<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(MARK ONE)
[x] Quarterly Report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 For the quarterly period ended March 31, 1995
or
[ ] Transition report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 For the transition period
from to
Commission file number 0-19075
THE MORNINGSTAR GROUP INC.
(Exact name of registrant as specified in its charter)
DELAWARE 75-2217488
(State or other jurisdiction (I.R.S. Employer
of incorporation) Identification No.)
5956 SHERRY LANE, SUITE 1800
DALLAS, TEXAS 75225-6522
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (214) 360-4777
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X . No .
--- ---
As of April 30, 1995, the number of shares outstanding of each class of
common stock was:
Common Stock, $.01 par value: 14,934,847 shares
<PAGE> 2
PART I
FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS.
THE MORNINGSTAR GROUP INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
<TABLE>
<CAPTION>
December 31, March 31,
1994 1995
------------- -------------
(Unaudited)
<S> <C> <C>
ASSETS
------
CURRENT ASSETS:
Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 2,152 $ 4,440
Receivables, net of allowance for doubtful accounts of $1,495 and $1,495 . 30,469 26,438
Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,540 12,130
Prepaids and deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,062 1,640
Net assets held for sale . . . . . . . . . . . . . . . . . . . . . . . . . - 749
------------- -------------
Total current assets . . . . . . . . . . . . . . . . . . . . . . . 48,223 45,397
PROPERTY, PLANT AND EQUIPMENT:
Land . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,062 5,713
Buildings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17,938 17,700
Machinery and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . 36,041 38,468
------------- -------------
Gross property, plant and equipment . . . . . . . . . . . . . . . . 60,041 61,881
Less: Accumulated depreciation . . . . . . . . . . . . . . . . . . . . . . (13,404) (14,325)
------------- -------------
Net property, plant and equipment . . . . . . . . . . . . . . . . . 46,637 47,556
INTANGIBLE AND OTHER ASSETS:
Identifiable intangible assets . . . . . . . . . . . . . . . . . . . . . . 2,512 2,346
Goodwill . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65,951 62,882
Deferred financing costs . . . . . . . . . . . . . . . . . . . . . . . . . 1,540 1,444
Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 402 270
------------- -------------
Total intangible and other assets . . . . . . . . . . . . . . . . . 70,405 66,942
------------- -------------
TOTAL ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 165,265 $ 159,895
============= =============
</TABLE>
The accompanying notes are an integral part of these consolidated statements.
1
<PAGE> 3
THE MORNINGSTAR GROUP INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
<TABLE>
<CAPTION>
December 31, March 31,
1994 1995
------------- -------------
(Unaudited)
<S> <C> <C>
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
CURRENT LIABILITIES:
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 17,263 $ 16,768
Accrued liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19,345 16,288
Current portion of long-term debt . . . . . . . . . . . . . . . . . . . . . 6,000 8,000
------------- -------------
Total current liabilities . . . . . . . . . . . . . . . . . . . . . 42,608 41,056
LONG-TERM DEBT (net of current maturities) . . . . . . . . . . . . . . . . . 53,892 46,834
OTHER LONG-TERM LIABILITIES . . . . . . . . . . . . . . . . . . . . . . . . . 1,963 2,240
STOCKHOLDERS' EQUITY:
Common stock, $.01 par value, 50,000,000 shares authorized;
14,920,797 issued and outstanding in 1994 and 1995 . . . . . . . . . . . . 149 149
Additional paid-in capital . . . . . . . . . . . . . . . . . . . . . . . . 71,157 71,157
Retained deficit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (4,504) (1,541)
------------- -------------
Total stockholders' equity . . . . . . . . . . . . . . . . . . . . 66,802 69,765
------------- -------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY . . . . . . . . . . . . . . . . . $ 165,265 $ 159,895
============= =============
</TABLE>
The accompanying notes are an integral part of these consolidated statements.
2
<PAGE> 4
THE MORNINGSTAR GROUP INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited, dollars in thousands, except per share amounts)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
--------------------------
1994 1995
----------- -----------
<S> <C> <C>
NET SALES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 70,739 $ 72,018
Cost of goods sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54,366 54,506
Selling, distribution, and general and administrative . . . . . . . . . . . . . . 12,526 13,185
----------- -----------
OPERATING INCOME . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,847 4,327
OTHER (INCOME) AND EXPENSE:
Interest expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,230 1,136
Dividend income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - (268)
Amortization of deferred financing costs . . . . . . . . . . . . . . . . . . . . 95 96
Other income, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (131) (149)
----------- -----------
INCOME BEFORE INCOME TAXES . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,653 3,512
Provision for income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . 889 1,243
----------- -----------
INCOME FROM CONTINUING OPERATIONS . . . . . . . . . . . . . . . . . . . . . . . . . 1,764 2,269
DISCONTINUED OPERATIONS:
Income from discontinued operations, net of applicable tax provision
of $456 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 907 -
Gain (loss) on disposal, net of applicable tax provision (benefit)
of ($41) and $806 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (80) 694
----------- -----------
INCOME FROM DISCONTINUED OPERATIONS . . . . . . . . . . . . . . . . . . . . . . . . 827 694
----------- -----------
NET INCOME . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 2,591 $ 2,963
=========== ===========
EARNINGS PER COMMON SHARE:
Earnings from continuing operations . . . . . . . . . . . . . . . . . . . . . . . $ .12 $ .15
Earnings from discontinued operations . . . . . . . . . . . . . . . . . . . . . . .05 .05
----------- -----------
Earnings per common share . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ .17 $ .20
=========== ===========
WEIGHTED AVERAGE COMMON AND COMMON EQUIVALENT SHARES OUTSTANDING . . . . . . . . . 14,905,000 15,111,000
</TABLE>
The accompanying notes are an integral part of these consolidated statements.
3
<PAGE> 5
THE MORNINGSTAR GROUP INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited, dollars in thousands)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
--------------------------
1994 1995
----------- -----------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Cash received from customers . . . . . . . . . . . . . . . . . . . . . . . . . . $ 71,315 $ 75,900
Interest received . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 -
Cash paid to suppliers and employees . . . . . . . . . . . . . . . . . . . . . . (60,412) (66,225)
Interest paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,566) (1,350)
Income taxes paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (184) (1,175)
------------ -----------
NET CASH PROVIDED BY CONTINUING OPERATIONS . . . . . . . . . . . . . . . . . . . . 9,154 7,150
NET CASH USED BY DISCONTINUED OPERATIONS . . . . . . . . . . . . . . . . . . . . . (182) -
------------ -----------
NET CASH PROVIDED BY OPERATING ACTIVITIES . . . . . . . . . . . . . . . . . . . . . 8,972 7,150
CASH FLOWS FROM INVESTING ACTIVITIES:
Sale of subsidiaries:
Working capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 857 -
Property, plant and equipment . . . . . . . . . . . . . . . . . . . . . . . . . 1,179 -
Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (4) -
------------ -----------
Net cash provided by sale of subsidiary . . . . . . . . . . . . . . . . . . . . 2,032 -
Capital expenditures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (2,158) (2,925)
Proceeds from sale of fixed assets . . . . . . . . . . . . . . . . . . . . . . . 10 5
Dividends received from preferred stock . . . . . . . . . . . . . . . . . . . . - 268
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (423) (152)
------------ -----------
Net cash used by continuing operations . . . . . . . . . . . . . . . . . . . . (539) (2,804)
Discontinued operations:
Sale of preferred stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 3,000
Capital and other expenditures . . . . . . . . . . . . . . . . . . . . . . . . . (468) -
Proceeds from sale of fixed assets . . . . . . . . . . . . . . . . . . . . . . . 2 -
------------ -----------
Net cash provided (used) by discontinued operations . . . . . . . . . . . . . (466) 3,000
NET CASH PROVIDED (USED) BY INVESTING ACTIVITIES . . . . . . . . . . . . . . . . . (1,005) 196
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuing common stock . . . . . . . . . . . . . . . . . . . . . . . 224 -
Net payments under revolving credit facility . . . . . . . . . . . . . . . . . . (4,067) (58)
Payments on long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . (3,500) (5,000)
Dividends paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (535) -
------------ -----------
NET CASH USED BY FINANCING ACTIVITIES . . . . . . . . . . . . . . . . . . . . . . (7,878) (5,058)
NET INCREASE IN CASH . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89 2,288
CASH, BEGINNING OF PERIOD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,340 2,152
------------ -----------
CASH, END OF PERIOD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 3,429 $ 4,440
============ ===========
</TABLE>
The accompanying notes are an integral part of these consolidated statements.
4
<PAGE> 6
THE MORNINGSTAR GROUP INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
RECONCILIATION OF NET INCOME TO NET CASH PROVIDED BY OPERATIONS
(Unaudited, dollars in thousands)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
--------------------------
1994 1995
----------- -----------
<S> <C> <C>
NET INCOME . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 2,591 $ 2,963
ADJUSTMENTS TO RECONCILE NET INCOME TO
NET CASH FLOW FROM OPERATIONS:
Discontinued operations net income . . . . . . . . . . . . . . . . . . . . . . . (827) (694)
Depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,034 1,268
Amortization of intangibles . . . . . . . . . . . . . . . . . . . . . . . . . . . 618 675
Gain on fixed asset retirements . . . . . . . . . . . . . . . . . . . . . . . . . (240) -
Increase in non-cash taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . 972 1,850
Change in assets and liabilities, net of effects from
acquisition and disposition of subsidiaries:
Accounts receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . (464) 4,031
Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (22) (1,590)
Prepaids and other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,528 3,197
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,156 (495)
Accrued liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . 976 (4,057)
Long-term liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . (168) 2
----------- -----------
NET CASH PROVIDED BY CONTINUING OPERATIONS . . . . . . . . . . . . . . . . . . . . 9,154 7,150
DISCONTINUED OPERATIONS:
Discontinued operations net income . . . . . . . . . . . . . . . . . . . . . . . 827 694
Gain on disposal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - (694)
Increase in working capital . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,800) -
Depreciation and amortization . . . . . . . . . . . . . . . . . . . . . . . . . . 791 -
----------- -----------
NET CASH USED BY DISCONTINUED OPERATIONS . . . . . . . . . . . . . . . . . . . . . (182) -
----------- -----------
NET CASH PROVIDED BY OPERATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . $ 8,972 $ 7,150
=========== ===========
</TABLE>
The accompanying notes are an integral part of these consolidated statements.
5
<PAGE> 7
THE MORNINGSTAR GROUP INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 1995
(1) CONSOLIDATED FINANCIAL STATEMENTS
The consolidated financial statements as of March 31, 1995, and
for the three months then ended have been prepared by The Morningstar
Group Inc. (the "Company" or "Morningstar") without audit. In the
opinion of management, all necessary adjustments (which include only
normal recurring adjustments) to present fairly, in all material
respects, the consolidated financial position, results of operations and
changes in cash flows at March 31, 1995, and for the three months then
ended, have been made. Certain information and footnote disclosures
normally included in financial statements prepared in accordance with
generally accepted accounting principles have been omitted. These
financial statements should be read in conjunction with the Company's
1994 financial statements contained in its most recent Annual Report on
Form 10-K. Certain prior year balances have been reclassified to conform
to the current year presentation.
On April 13, 1994, Morningstar completed the divestiture of its
Florida-based fluid milk operation Velda Farms Inc. ("Velda") to Engles
Dairy Acquisition L.P. ("Purchaser") at an approximate selling price of
$48 million in cash after working capital adjustments and $3 million of
9% Series A Preferred Stock (the "Preferred Stock"). The Company deferred
the recognition of the gain on the Preferred Stock pending realization of
the gain. The sale of Velda completed the Company's divestiture of its
regional dairies. These regional dairy operations along with the
Company's other divested operations, have been treated as discontinued
operations, and previously published financial statements have been
restated to conform with this presentation.
On March 31, 1995, the Preferred Stock was redeemed by its issuer
at face value plus accrued dividends. The $3.0 million gain on the
stock, less applicable taxes and other reserves, has been reflected in
discontinued operations in the Consolidated Statements of Operations for
the three months ended March 31, 1995. The Company also recognized
$268,000 in dividends, related to the Preferred Stock, during the first
quarter of 1995 which has been recorded in continuing operations.
(2) INVENTORIES
Inventories are valued at the lower of cost or market. Cost is
determined using the first-in, first-out method. Inventories are
summarized as follows (in thousands):
<TABLE>
<CAPTION>
At At
December 31, March 31,
1994 1995
-------------- -------------
<S> <C> <C>
Raw materials and supplies . . . . . . . . . . . . . . . . . . . $ 6,757 $ 6,412
Finished goods . . . . . . . . . . . . . . . . . . . . . . . . . 3,783 5,718
-------------- -------------
Total . . . . . . . . . . . . . . . . . . . . . . . . . $ 10,540 $ 12,130
============== =============
</TABLE>
Finished goods inventories include the costs of materials, labor
and plant overhead.
6
<PAGE> 8
(3) DEBT
The Company's outstanding long-term debt and average interest
rates in effect on March 31, 1995 were:
<TABLE>
<CAPTION>
Average
Amount of Interest
Debt Rate
-------------- --------------
(in thousands)
<S> <C> <C>
Senior term loan . . . . . . . . . . . . . . . . . . . . . . . $ 50,000 7.488%
Revolving credit facility (a) . . . . . . . . . . . . . . . . 1,834 9.000%
Industrial development revenue bonds . . . . . . . . . . . . . 3,000 4.750%
--------------
Total . . . . . . . . . . . . . . . . . . . . . . . . . 54,834
Less: Current maturities . . . . . . . . . . . . . . . . . . 8,000
--------------
Long-term debt, net of current maturities . . . . . . . . . . $ 46,834
==============
</TABLE>
_________________
(a) As of March 31, 1995, $1,834,000 was borrowed under the
revolving credit facility and letters of credit totaling
$8,325,000 were issued. At March 31, 1995, the Company had
$14,841,000 in additional borrowing capacity under the terms
of its revolving credit facility.
(4) EARNINGS PER COMMON SHARE
Net income per share is based on the weighted average shares of
common stock and common stock equivalents outstanding. Stock options are
included as common stock equivalents under the treasury stock method,
where dilutive.
7
<PAGE> 9
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS
OF OPERATIONS AND FINANCIAL CONDITION.
Results of Operations - First Quarter 1995
Compared with First Quarter 1994
Net sales are classified into two categories: (i) Branded specialty
products, which include sales of the Company's four national branded products
- -- International Delight(R) gourmet flavored coffee creamers, Second Nature(R)
egg product, Lactaid(R) reduced lactose and lactose-free milks and Naturally
Yours(R) no-fat sour cream; and (ii) Other specialty products, which includes
all sales of the Company's specialty foods business other than branded
specialty products.
Net sales for the first quarter of 1995 totaled $72.0 million, an increase
of $1.3 million from net sales for the same period in 1994. The following
table reflects net sales by business category from year to year (dollars in
thousands):
<TABLE>
<CAPTION>
Three Months Ended
March 31,
--------------------------
Business Category 1994 1995
----------------- ----------- -----------
<S> <C> <C>
Branded specialty products . . . . . . . . . . . . . . . . . . . . . . . . . . $ 23,861 $ 27,527
Other specialty products . . . . . . . . . . . . . . . . . . . . . . . . . . . 46,878 44,491
----------- -----------
Net Sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 70,739 $ 72,018
=========== ===========
</TABLE>
Net sales of branded specialty products increased by 15.4% for the first
quarter of 1995 when compared to the same period of 1994. This improvement was
accomplished through increased sales of International Delight and Lactaid. Net
sales of other specialty products decreased by 5.1% during the first quarter as
compared to 1994 primarily as a result of the Company's selective wthdrawal
from certain marginally profitable segments of this business.
Gross margin was 24.3% for the first quarter of 1995 compared to 23.2% for
the like period of 1994, due to a shift in branded products sales mix and due
to the Company's selective elimination of certain marginally profitable
segments of the specialty products business.
Operating expenses as a percentage of net sales were 18.3% for the first
quarter of 1995 compared to 17.7% for the same period of 1994. Distribution
expenses as a percent of sales remained flat compared to 1994 despite the
increase in branded sales in the first quarter of 1995. This reflects the
Company's continued efforts to optimize its distribution programs. Selling
expenses increased slightly as a percent of sales as a result of increased
marketing and promotional activities and increased brokerage commissions
related to the increase in branded sales. General and administrative expenses
as a percent of sales were relatively flat as compared to 1994.
The Company's operating income during the first quarter of 1995 was $4.3
million, an increase of 12.5% from operating income for the first quarter of
1994 of approximately $3.8 million. The increase in operating income was
primarily due to the increased sales of branded products, which contribute
higher operating margins.
For the first quarter, interest expense decreased by 7.6% from $1.2
million during 1994 to $1.1 million during 1995. The decrease resulted from
lower debt levels offset by slightly higher average interest rates in 1995 on
the Company's debt as compared with the first quarter of 1994.
The Company recorded income from continuing operations of $2.3 million in
the first quarter of 1995 compared to income from continuing operations of $1.8
million in the same period last year. The improved profitability was primarily
the result of higher sales and higher gross margins offset by slightly higher
operating expense margins.
8
<PAGE> 10
Liquidity and Capital Resources
Cash provided by continuing operations was $7.2 million during the first
three months of 1995 compared to cash provided by continuing operations of $9.2
million during the first three months of 1994. The sources of cash during the
first quarter of 1995 were the $7.2 million provided by continuing operations,
$.3 million provided from dividends on the Preferred Stock and $3.0 million
from the sale of the Preferred Stock. These sources of cash were utilized to
pay down debt of $5.1 million, to provide for capital and other expenditures of
$3.1 million, and to provide for an increase in cash balances of $2.3 million.
Capital expenditures during the first quarter of 1995 were spent primarily
on equipment additions for increased operating efficiencies. As of March 31,
1995, the Company was in compliance with all covenants and financial ratios
contained in its Senior Credit Agreement. Based upon the Company's projections
for the remainder of 1995, management does not anticipate any violation of the
financial covenants contained in the Senior Credit Agreement.
At March 31, 1995, the Company had approximately $14.9 million in unused
borrowing capacity under its revolving credit facility. The Company expects
that operating cash flows, together with borrowings under its revolving credit
facility, will be sufficient to fund the Company's requirements for working
capital and capital expenditures for the foreseeable future.
Financing
As of March 31, 1995, the Company's senior credit agreement consisted of a
$97.0 million term loan and a $25.0 million revolving credit facility. As of
March 31, 1995, approximately $1.8 million was borrowed under the revolving
credit facility and approximately $8.3 million in letters of credit were
outstanding.
On April 13, 1994, Morningstar completed the divestiture of Velda, its
Florida-based fluid milk operation, to Engles Dairy Acquisition L.P. at an
approximate selling price of $48 million in cash after working capital
adjustments and $3.0 million of 9% Series A Preferred Stock. Following the
application of the cash proceeds on April 13, 1994, the Company had no revolver
balance outstanding and had a remaining term loan balance of approximately
$64.2 million. The Company made additional term loan principal payments during
the year ended December 31, 1994, and during the three months ended March 31,
1995, of approximately $11.8 million and $5.0 million respectively. The
remaining amortization schedule for the term loan is as follows:
<TABLE>
<CAPTION>
Approximate
Quarterly payment date(s) Quarterly payment
------------------------------------- -----------------
<S> <C>
June 20, 1995 - September 20, 1996 $ 2,000,000
December 20, 1996 3,083,000
March 20, 1997 3,716,000
June 20, 1997 - September 20, 1998 4,519,000
December 20, 1998 4,088,000
</TABLE>
9
<PAGE> 11
PART II
OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
To the knowledge of the Company, there are no reportable suits or
proceedings pending or threatened against or affecting the Company other than
those encountered in the ordinary course of the Company's business and
described in the Company's most recent Annual Report on Form 10-K.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
None.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits.
27 Financial Data Schedule
(b) Reports on Form 8-K.
None.
10
<PAGE> 12
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 thereunto duly authorized.
THE MORNINGSTAR GROUP INC.
/s/ C. DEAN METROPOULOS
-----------------------------------------
C. Dean Metropoulos
(Authorized Officer)
Date: May 15, 1995
11
<PAGE> 13
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
<S> <C>
27 Financial Data Schedule.
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> MAR-31-1995
<CASH> 4,440
<SECURITIES> 0
<RECEIVABLES> 27,933
<ALLOWANCES> 1,495
<INVENTORY> 12,130
<CURRENT-ASSETS> 45,397
<PP&E> 61,881
<DEPRECIATION> 14,325
<TOTAL-ASSETS> 159,895
<CURRENT-LIABILITIES> 41,056
<BONDS> 0
<COMMON> 69,764
0
0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 159,895
<SALES> 72,018
<TOTAL-REVENUES> 72,018
<CGS> 54,506
<TOTAL-COSTS> 54,506
<OTHER-EXPENSES> 13,185
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,232
<INCOME-PRETAX> 3,512
<INCOME-TAX> 1,243
<INCOME-CONTINUING> 2,269
<DISCONTINUED> 694
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,963
<EPS-PRIMARY> .20
<EPS-DILUTED> .20
</TABLE>
