SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
Current Report Pursuant
to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): January 31, 1999
American Rice, Inc.
(Exact name of registrant as specified in its charter)
Texas
(State or other jurisdiction of incorporation)
0-17039 76-0231626
(Commission File Number) (I.R.S. Employer
Identification No.)
411 N. Sam Houston Parkway E.
Houston, Texas 77060
(Address of Principal (Zip Code)
Executive Offices)
(281) 272-8800
(Registrant's telephone number, including area code)
Not Applicable
(Former name or former address, if changed since last report
<PAGE>
Item 5. Other Events
Monthly Operating Reports filed with United States Trustee
As previously reported on Form 8-K, on August 11, 1998 American Rice, Inc.
(the "Company") filed a voluntary petition for reorganization under Chapter 11
of the U.S. Bankruptcy Code with the U.S. Bankruptcy Court for the Southern
District of Texas, Corpus Christi Division. Pursuant to Federal Rule of
Bankruptcy Procedure 2015 and the United States Trustee's Operating Guidelines
and Reporting Requirements for Chapter 11 cases, the Company must file a
Monthly Operating Report ("MOR") with the Office of the United States Trustee.
The MOR covering the period from inception of the bankruptcy through January
31, 1999 was filed with the Office of the United States Trustee on January 24,
1999. A copy of this MOR is attached hereto as Exhibit 99 and is incorporated
herein by reference.
California Milling Operations Shutdown and Layoffs
American Rice, Inc. issued a press release on February 4, 1999 announcing
an anticipated temporary seasonal shutdown in April of its milling operations
in Maxwell, California. The information contained in such press release is
attached hereto as Exhibit 99.1 and is incorporated herein by reference.
Item 7. Financial Statement and Exhibits
(c) Exhibits
Exhibit 99 - Monthly Operating Report
Exhibit 99.1 - Press Release dated February 4, 1999.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Date: February 26, 1999 American Rice, Inc.
--------------------
(Registrant)
By: /s/ Joseph E. Westover
----------------------
Joseph E. Westover
Vice President and
Controller
CASE NAME: AMERICAN RICE, INC. UNITED STATES BANKRUPTCY COURT
CASE NUMBER: 98-21254-C-11 (RSS) SOUTHERN DISTRICT OF TEXAS
PETITION FILING DATE: AUGUST 11, 1998 CORPUS CHRISTI DIVISION
MONTHLY OPERATING REPORT SUMMARY FOR MONTH ENDING JANUARY 31, 1999
<TABLE>
<CAPTION>
($ Thousands)
MONTH (1) Sept. 30 (2) Oct. 31 Nov. 30 Dec. 31 Jan. 31
<S> <C> <C> <C> <C> <C>
REVENUES (MOR-6) $36,694 $25,182 $18,450 $20,992 $16,343
INCOME (LOSS) BEFORE INT, DEPREC./TAX (26) (390) 627 1,089 993
NET INCOME (LOSS) (MOR-6) (2,455) (2,461) (835) (330) (293)
PAYMENTS TO INSIDERS (MOR-9) 390 293 256 220 214
PAYMENTS TO PROFESSIONALS (MOR-9) 98 174 65 532 105
TOTAL DISBURSEMENTS (MOR-8) 49,935 43,904 51,265 42,322 23,704
</TABLE>
REQUIRED INSURANCE MAINTAINED
AS OF SIGNATURE DATE EXP.
DATE
CASUALTY YES(X) NO( ) 5/1/99
LIABILITY YES(X) NO( ) 4/2/99
VEHICLE YES(X) NO( ) 4/2/99
WORKERS YES(X) NO( ) 2/1/99
OTHER YES(X) NO( ) 4/1/99
Are all accounts receivable being collected within terms? No.
Are all post-petition liabilities, including taxes, being paid
within terms ? Yes.
Have any pre-petition liabilities been paid? Yes.
If so, describe. Court authorized payments to customers,
processor liens, non-debtor subsidiaries to extent of proceeds.
Are all funds received being deposited into DIP bank account? Yes.
Were any assets disposed of outside of the normal course of
business ? No. If so, describe.
Are all U. S. Trustee quarterly fee payments current? Yes.
What is the status of your Plan of Reorganization? In process.
I certify under penalty of perjury that the following complete
Monthly Operating Report (MOR), consisting of MOR-1 through
MOR-9 plus attachments, is true and correct.
SIGNED: /s/ Joseph E. Westover
TITLE: Vice-President
MOR-1 Footnotes follow MOR-9
<PAGE>
CASE NAME: AMERICAN RICE, INC.
CASE NUMBER: 98-21254-C-11 (RSS)
<TABLE>
<CAPTION>
COMPARATIVE BALANCE SHEETS
($ Thousands) Filing Date
MONTH Aug. 11 (1) Sept. 30 Oct. 31 Nov. 30 Dec. 31 Jan. 31
<S> <C> <C> <C> <C> <C> <C>
ASSETS
CURRENT ASSETS
Cash $913 $1,071 $216 $795 $541 $2,402
Accounts receivable, net (MOR-5) 33,914 39,725 34,456 33,667 28,317 33,173
Inventory: lower of cost or market 67,692 63,005 28,561 30,255 33,151 29,903
Prepaid expenses 3,603 3,468 1,727 1,595 2,612 2,468
Investments - - - - - -
Other - - 1,000 1,000 1,000 1,000
TOTAL CURRENT ASSETS 106,122 107,269 65,960 67,312 65,621 68,946
PROPERTY, PLANT, & EQUIPMENT @ COST 66,866 67,072 56,405 56,405 56,409 56,564
Less accumulated depreciation (27,631) (28,081) (26,768) (26,965) (27,227) (27,438)
NET BOOK VALUE OF PP&E 39,235 38,991 29,637 29,440 29,182 29,126
OTHER ASSETS
TAX DEPOSITS - - - - - -
INVESTMENTS IN SUBS (2) (2,472) (2,015) (2,225) (2,490) (2,491) (5,599)
OTHER INVESTMENTS (3) 1,134 1,175 698 698 698 -
TRADEMARKS 11,847 11,801 11,416 11,387 11,361 11,329
RECEIVABLE FROM ERLY INDUSTRIES (4) 9,738 10,054 9,935 9,935 9,935 9,935
OTHER 1,708 1,666 689 689 689 571
TOTAL OTHER ASSETS 21,955 22,681 20,513 20,219 20,192 16,236
TOTAL ASSETS $167,312 $168,941 $116,110 $116,971 $114,995 $114,308
</TABLE>
MOR-2 Footnotes follow MOR-9
<PAGE>
CASE NAME: AMERICAN RICE, INC.
CASE NUMBER: 98-21254-C-11 (RSS)
<TABLE>
<CAPTION>
COMPARATIVE BALANCE SHEETS
($ Thousands) Filing Date
MONTH Aug. 11 (1) Sept. 30 Oct. 31 Nov. 30 Dec. 31 Jan. 31
<S> <C> <C> <C> <C> <C> <C>
LIABILITIES AND OWNER'S EQUITY
LIABILITIES
POST PETITION LIABILITIES (MOR-4,5) - $28,703 $53,540 $57,926 $59,457 $59,140
PRE-PETITION LIABILITIES:
Notes payable - secured 192,900 165,454 114,545 112,652 112,652 111,666
Priority debt 448 448 448 448 448 448
Federal income tax - - - - - -
FICA / withholding - - - - - -
Unsecured debt 30,157 32,774 28,013 26,253 26,803 26,803
Other (2) 27,261 27,261 7,687 8,670 4,943 5,852
TOTAL PRE-PETITION LIABILITIES 250,766 225,937 150,693 148,023 144,846 144,769
TOTAL LIABILITIES 250,766 254,640 204,233 205,949 204,303 203,909
OWNER'S EQUITY (DEFICIT)
PREFERRED STOCK 3,878 3,878 3,878 3,878 3,878 3,878
COMMON STOCK 2,444 2,444 2,444 2,444 2,444 2,444
ADDITIONAL PAID-IN CAPITAL 25,286 25,286 25,286 25,286 25,286 25,286
RETAINED EARNINGS: post filing date - (2,455) (4,916) (5,751) (6,081) (6,374)
RETAINED EARNINGS: filing date (112,685) (112,685) (112,685) (112,685) (112,685) (112,685)
FOREIGN CURRENCY TRANS. ADJS. (2,377) (2,167) (2,130) (2,150) (2,150) (2,150)
TOTAL OWNER'S EQUITY (83,454) (85,699) (88,123) (88,978) (89,308) (89,601)
TOTAL LIABILITIES AND EQUITY $167,312 $168,941 $116,110 $116,971 $114,995 $114,308
</TABLE>
MOR-3 Footnotes follow MOR-9
<PAGE>
CASE NAME: AMERICAN RICE, INC.
CASE NUMBER: 98-21254-C-11 (RSS)
<TABLE>
<CAPTION>
SCHEDULE OF POST-PETITION LIABILITIES
($ Thousands)
MONTH Sept. 30 Oct. 31 Nov. 30 Dec. 31 Jan. 31
<S> <C> <C> <C> <C> <C>
TRADE ACCOUNTS PAYABLE $482 $584 $2,484 $2,332 $2,500
TAX PAYABLE
Federal payroll taxes - - - - -
State payroll taxes - - - - -
Ad valorem taxes - - 107 147 176
other - - - - -
TOTAL TAXES PAYABLE - - 107 147 176
SECURED DEBT POST PETITION 21,950 42,622 45,222 48,133 52,000
ACCRUED INTEREST PAYABLE 630 579 426 505 449
PROFESSIONAL FEES 1,483 1,515 1,640 1,990 2,462
OTHER ACCRUED LIABILITIES
Growers 448 1,871 1,696 1,967 559
Other 3,710 6,369 6,351 4,383 994
TOTAL POST-PETITION LIABILITIES (MOR-3) $28,703 $53,540 $57,926 $59,457 $59,140
</TABLE>
MOR-4 Footnotes follow MOR-9
<PAGE>
CASE NAME: AMERICAN RICE, INC.
CASE NUMBER: 98-21254-C-11 (RSS)
POST-PETITION TRADE ACCOUNTS AND TAXES PAYABLE
JANUARY, 1999
($ Thousands)
TRADE FEDERAL STATE AD
DAYS TOTAL ACCTS TAXES TAXES VALOREM OTHER
0-30 $58,599 $1,959 - - $176 $56,464
31-60 45 45 - - - -
61-90 213 213 - - - -
91+ 283 283 - - - -
TOTAL (MOR-3) $59,140 $2,500 - - $176 $56,464
AGING OF ACCOUNTS RECEIVABLE
MONTH Sept. 30 Oct. 31 Nov. 30 Dec. 31 Jan. 31
0-30 $35,790 $27,852 $29,202 $21,646 $27,876
31-60 1,745 1,679 2,869 4,019 1,450
61-90 910 798 316 1,586 2,514
91+ 1,280 4,127 1,280 1,066 1,333
TOTAL (MOR- $39,725 $34,456 $33,667 $28,317 $33,173
MOR-5 Footnotes follow MOR-9
<PAGE>
CASE NAME: AMERICAN RICE, INC.
CASE NUMBER: 98-21254-C-11 (RSS)
<TABLE>
<CAPTION>
STATEMENT OF INCOME (LOSS)
($ Thousands) FILING
MONTH Sept. 30 Oct. 31 Nov. 30 Dec. 31 Jan. 31 TO DATE
<S> <C> <C> <C> <C> <C> <C>
REVENUES $36,694 $25,182 $18,450 $20,992 $16,343 $117,661
COST OF SALES 31,899 21,672 16,844 18,245 14,244 102,904
GROSS PROFIT 4,795 3,510 1,606 2,747 2,099 14,757
OPERATING EXPENSES
Sales, general and administrative 4,391 3,609 766 1,438 892 11,096
Insider's compensation 390 293 256 220 214 1,373
Professional fees - - - - - -
Other - - - - - -
TOTAL OPERATING EXPENSES 4,781 3,902 1,022 1,658 1,106 12,469
INCOME BEFORE INT, DEPREC./TAX (MOR-1) 14 (392) 584 1,089 993 2,288
INTEREST EXPENSE 1,130 864 421 504 423 3,342
DEPRECIATION 490 344 226 288 247 1,595
OTHER (INCOME) EXPENSE 12 10 6 15 7 50
INTEREST IN (EARNINGS) LOSSES / OF SUBS. (246) 247 245 2 12 260
REORGANIZATION EXPENSE 1,083 604 521 610 597 3,415
OTHER - - - - - -
NET INCOME BEFORE TAXES (2,455) (2,461) (835) (330) (293) (6,374)
FEDERAL INCOME TAX - - - - - -
NET INCOME (LOSS) (MOR-1) ($2,455) ($2,461) ($835) ($330) ($293) ($6,374)
</TABLE>
MOR-6 Footnotes follow MOR-9
<PAGE>
CASE NAME: AMERICAN RICE, INC.
CASE NUMBER: 98-21254-C-11 (RSS)
<TABLE>
<CAPTION>
STATEMENT OF SOURCES AND USES OF CASH
($ Thousands) FILING
MONTH Sept. 30 Oct. 31 Nov. 30 Dec. 31 Jan. 31 TO DATE
<S> <C> <C> <C> <C> <C> <C>
NET INCOME (LOSS) (MOR-6) ($2,455) ($2,461) ($835) ($330) ($293) ($6,374)
ADD: DEPRECIATION & AMORTIZATION 450 (1,313) 197 262 211 (193)
CASH GENERATED FROM OPERATIONS (2,005) (3,774) (638) (68) (82) (6,567)
ADD: DECREASE IN ASSETS
Accounts receivable - 5,269 789 5,350 - 11,408
Inventory 4,687 34,444 - - 3,248 43,379
Prepaid expenses 135 1,741 132 - 144 2,152
Property, plant, and equipment - 10,667 - - - 10,667
Other (1) 210 2,205 274 27 3,956 6,672
ADD: INCREASE IN LIABILITIES
Post-petition liabilities 28,703 24,837 4,386 1,531 - 59,457
Pre-petition liabilities - - - - - -
TOTAL SOURCES OF CASH (A) 31,730 75,389 4,943 6,840 7,266 126,168
USES OF CASH:
INCREASES IN ASSETS
Accounts receivable 5,811 - - - 4,856 10,667
Inventory - - 1,694 2,896 - 4,590
Prepaid expenses - - - 1,017 - 1,017
Property, plant, and equipment 206 - - 4 155 365
Other 726 1,000 - - - 1,726
DECREASES IN LIABILITIES
Post-petition liabilities - - - - 317 315
Pre-petition liabilities 24,829 75,244 2,670 3,177 77 105,997
TOTAL USES OF CASH (B) 31,572 76,244 4,364 7,094 5,405 124,679
NET SOURCES (USES) OF CASH (A-B) 158 (855) 579 (254) 1,861 1,489
CASH - BEGINNING BALANCE 913 1,071 216 795 541 913
CASH - ENDING BALANCE (MOR-2) $1,071 $216 $795 $541 $2,402 $2,402
</TABLE>
MOR-7 Footnotes follow MOR-9
<PAGE>
CASE NAME: AMERICAN RICE, INC.
CASE NUMBER: 98-21254-C-11 (RSS)
<TABLE>
<CAPTION>
CASH ACCOUNT RECONCILIATION
JANUARY, 1999
($ Thousands)
BANK NAME CIBC(1) CIBC (1) Nat'bank So'west Wells Far. 1st Union
ACCOUNT NUMBER 04- 26623 - Bank 4159 - 2000000 -
40213 1338315 73389 328170 702372 371753
ACCOUNT TYPE Lockbox Operating Operating Lockbox Lockbox Operating
<S> <C> <C> <C> <C> <C> <C>
BANK BALANCE $83 $28 $35 $210 - ($568)
DEPOSITS IN TRANSIT - - - - - 853
OUTSTANDING CHECKS - - - - - -
ADJUSTED BANK BALANCE $83 $28 $35 $210 - $285
BEGINNING CASH PER BOOKS $175 $28 $39 $184 $49 $126
RECEIPTS 233 - - 3,457 - 14,182
TRANSFERS BETWEEN ACCOUNTS (325) - - (3,431) (49) (5,380)
CHECKS / OTHER DISBURSEMENTS(2) - - (4) - - (8,643)
ENDING CASH PER BOOKS (MOR-2) $83 $28 $35 $210 - $285
</TABLE>
<TABLE>
<CAPTION>
BANK NAME 1st Union 1st Union 1st Union Harris
ACCOUNT NUMBER 207989 - 207992 - 207992- Trust
1226349 19508 19511 173-846-7 Petty
ACCOUNT TYPE Collateral Disbursement Segregated Oper. Cash Adjs(2) Total
<S> <C> <C> <C> <C> <C> <C> <C>
BANK BALANCE $1,631 ($967) $607 $4 $36 $104 $1,203
DEPOSITS IN TRANSIT - - - - - 800 1,653
OUTSTANDING CHECKS 454 - - - - - (454)
ADJUSTED BANK BALANCE $1,177 ($967) $607 $4 $36 $904 $2,402
BEGINNING CASH PER BOOKS $754 ($932) - ($22) $36 $104 $541
RECEIPTS 6,456 - - 437 - 800 25,565
TRANSFERS BETWEEN ACCOUNTS 4,240 4,748 607 (410) - - -
CHECKS / OTHER DISBURSEMENTS (10,273) (4,783) - (1) - - (23,704)
ENDING CASH PER BOOKS (MOR-2) $1,177 ($967) $607 ($4) $36 $904 $2,402
</TABLE>
<TABLE>
<CAPTION>
CASH RECEIPTS AND DISBURSEMENTS
MONTH Sept. 30 Oct. 31 Nov. 30 Dec. 31 Jan. 31
<S> <C> <C> <C> <C> <C>
BEGINNING CASH $455 $1,071 $216 $795 $541
TOTAL RECEIPTS 50,551 43,049 51,844 42,068 25,565
TOTAL DISBURSEMENTS (MOR-1) (49,935) (43,904) (51,265) (42,322) (23,704)
ENDING CASH (MOR-2) $1,071 $216 $795 $541 $2,402
</TABLE>
MOR-8 Footnotes follow MOR-9
<PAGE>
CASE NAME: AMERICAN RICE, INC.
CASE NUMBER: 98-21254-C-11 (RSS)
<TABLE>
<CAPTION>
PAYMENTS TO INSIDERS AND PROFESSIONALS
INSIDERS COMP.
NAME TYPE Sept. 30 Oct. 31 Nov. 30 Dec. 31 Jan. 31
<S> <C> <C> <C> <C> <C> <C>
Bill McFarland Salary $31,333 $18,631 $35,283 - -
Bill McFarland Expenses - 35,425 - 1,266 2,362
C.B. Schultz Salary 16,745 9,956 9,504 9,956 9,504
C.B. Schultz Expenses 868 1,016 - 3,044 2,022
Dan Kelly Salary 15,034 8,939 13,206 26,150 -
Dan Kelly Expenses 12,807 8,769 - 4,906 188
David Kay Salary 16,529 9,828 9,381 9,828 9,381
David Kay Expenses 5,868 4,699 2,168 2,591 174
Doug Murphy Salary 38,807 23,075 22,026 23,075 22,026
Doug Murphy Expenses 7,538 1,065 3,014 9,879 5,763
Gerald Murphy Salary 50,306 29,912 28,552 29,912 28,552
Gerald Murphy Expenses 8,578 - - - 1,837
Joe Westover Salary 15,667 9,315 8,892 9,315 8,892
Joe Westover Expenses 715 125 1,037 - 1,955
Karen Porter Salary 10,888 6,474 6,179 6,474 6,179
Karen Porter Expenses 1,693 6,000 - - -
L.M. Pullen Salary 19,116 11,366 24,108 - 33,250
L.M. Pullen Expenses 1,777 4,515 5,780 3,854 925
Lee Adams Salary 25,872 15,383 14,684 15,231 14,684
Lee Adams Expenses 720 10,558 - 1,784 4,677
Ray Koza Salary 13,712 8,153 7,782 8,153 7,782
Ray Koza Expenses 1,616 475 5,990 857 2,352
Richard McCombs Salary 26,590 24,794 7,187 - -
Richard McCombs Expenses 14,368 2,653 - - 1,023
Richard McCombs Diretors Fees - - - - 1,326
Urbain Tran Salary 12,677 7,538 7,195 7,538 7,195
Urbain Tran Expenses 7,380 1,645 8,056 13,779 3,237
S.C. Bain, Jr. Directors Fees - - - - 3,109
William H. Burgess Directors Fees - - - - 3,109
411 NSHP LP Office rent 32,845 32,645 36,161 32,645 32,645
TOTAL INSIDERS (MOR-1) $390,048 $292,953 $256,185 $220,237 $214,150
</TABLE>
<TABLE>
<CAPTION>
PROFESSIONALS COMP.
NAME TYPE Sept. 30 Oct. 31 Nov. 30 Dec. 31 Jan. 31
<S> <C> <C> <C> <C> <C>
Jordan, Hyden, Womble & Culbreth $37,520 $37,480 - - -
Policano & Manzo, L.L.C. 60,093 136,660 64,846 32,338 -
Jay Alix and Associates - - - 499,913 -
Wachtell Lipton - - - - 105,000
TOTAL PROFESSIONALS (MOR-1) $97,612 $174,139 $64,846 $532,251 $105,000
</TABLE>
MOR-9 Footnotes follow
<PAGE>
CASE NAME: AMERICAN RICE, INC.
CASE NUMBER: 98-21254-C-11 (RSS)
FOOTNOTES TO MOR SCHEDULES
MOR-1
1. Excepting large transactions which are recorded in the calendar
month in which they occur, the Company follows the practice of
cutting off transactions on a 4-4-5 week basis.
2. Period from August 12, 1998 through September, 1998.
MOR-2
1. Book value.
2. Includes 100% ownership of Rice Corp. of Haiti. However,
documentation of ownership is inconsistent and unclear.
Change in January is due primarily to netting Compania
Envasadora Loreto to loss reserve.
3. ARI-Vinafood II. Netted to loss reserve in January.
4. Net of reserve for loss of $17,055.
MOR-3
1. Book value.
2. Reserves for losses on Early California Foods, Comet Ventures,
and ARI-Vinafood II.
MOR-7
1. Includes foreign currency translation gain or loss.
MOR-8
1. Canadian Imperial Bank of Canada.
2. Includes cutoff date differences between bank and financials.
See MOR-1 Note 1.
FOR IMMEDIATE RELEASE
HOUSTON, TX (February 4, 1999) - American Rice, Inc. ("ARI" or "the Company")
announced today that it would substantially conclude its 1998 crop year rice
processing at its Maxwell, California facility on or about April 9, 1999. At
that time, ARI anticipates a seasonal lay-off in excess of one-half of its
Maxwell work force. ARI will continue to operate domestic packaging and
shipping operations at the Maxwell facility, and stated that it would re-
start mill operations on or about September 1, 1999, in preparation for the
1999 California rice harvest and processing season.
ARI noted that the shut-down of its Maxwell milling operations for an
anticipated four month period was unusual and stated that this extraordinary
situation was a result in the reduction in the weather ravaged 1998
California rice crop. According to the US Department of Agriculture final
estimate of rice crop production in 1998, the California rice harvest
declined 23% from 1997 (from a 42.5 million cwt. harvest in 1997 to a 32.7
million cwt. harvest in 1998).
Mr. Douglas Murphy, President of ARI, commented, "The detrimental weather
conditions of 1998 created an over 20% reduction in the California rice
harvest, limiting the amount of rice available for industry processing. By
April 9th, ARI will have milled and stored all of its remaining rice, and
will have milled rice necessary to service our established domestic and
export customers through September 1999. Thus, while we are saddened to be
forced to temporarily shut-down mill operations and lay-off employees, we
feel it is a necessary and prudent action. Naturally, we look forward to a
bountiful 1999 harvest and re-starting operations in September."
Because ARI's lay-offs include more than one-third of its Maxwell work force,
employees were provided notice today pursuant to the Worker Adjustment and
Retraining Notification Act.
Safe Harbor Statement Under the Private Securities Litigation Reform Act of
1995. Any statements set forth above that are not historical facts are
forward-looking statements that involve risks and uncertainties that could
cause actual results to differ materially from those in the forward-looking
statements. Potential risks and uncertainties include but are not limited to
such factors as product demand and development, ability to maintain customer
relationships, technological advancements, impact of competitive products and
pricing, growth in targeted markets, risk of foreign operations, and other
information detailed from time to time in the Company's Securities and
Exchange Commission filings.
