UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the period ended: March 31, 2000
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: 001-13403
American Italian Pasta Company
(Exact name of Registrant as specified in its charter)
Delaware 84-1032638
State or other jurisdiction of (I.R.S. Employer
incorporation or organization Identification No.)
410 N. Mulberry Drive, Suite 200, Kansas City, Missouri 64116
(Address of principal executive office) (Zip Code)
Registrant's telephone number, including area code: (816) 502-6000
1000 Italian Way, Excelsior Springs, Missouri 64024
- -------------------------------------------------------------------------------
(Former name, former address and former fiscal year, if
changed since last report)
Indicate by check mark whether the Registrant has (1) filed all documents
and 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 [ ]
The number of shares outstanding as of April 26, 2000 of the Registrant's
Class A Convertible Common Stock was 18,304,520 and there were no shares
outstanding of the Class B Common Stock.
1
<PAGE>
American Italian Pasta Company
Form 10-Q
Quarter Ended March 31, 2000
Table of Contents
Part I - Financial Information Page
Item 1. Consolidated Financial Statements (unaudited)
Consolidated Balance Sheets at March 31, 2000 and
September 30, 1999..........................................3
Consolidated Statements of Income for the three
months ended March 31, 2000 and 1999........................4
Consolidated Statements of Income for the six
months ended March 31, 2000 and 1999........................5
Consolidated Statements of Stockholders' Equity
for the six months ended March 31, 2000 and 1999............6
Consolidated Statements of Cash Flows for the
six months ended March 31, 2000 and 1999....................7
Notes to Consolidated Financial Statements................8-9
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations...........10-14
Item 3. Quantitative and Qualitative Disclosures About
Market Risk................................................14
Part II - Other Information
Item 1. Legal Proceedings..........................................15
Item 2. Changes in Securities......................................15
Item 3. Defaults Upon Senior Securities............................15
Item 4. Submission of Matters to a Vote of Security Holders........15
Item 5. Other Information..........................................15
Item 6. Exhibits and Reports on Form 8-K...........................15
Signature Page...............................................................16
2
<PAGE>
AMERICAN ITALIAN PASTA COMPANY
Consolidated Balance Sheets
<TABLE>
<CAPTION>
March 31, September 30,
2000 1999
---- ----
(In thousands)
(Unaudited)
<S> <C> <C>
Assets
Current assets:
Cash and temporary investments $ 915 $ 3,088
Trade and other receivables 20,015 22,018
Prepaid expenses and deposits 3,945 3,952
Inventory 31,871 25,227
Deferred income taxes 1,368 1,031
----- -----
Total current assets 58,114 55,316
Property, plant and equipment:
Land and improvements 6,980 6,953
Buildings 75,833 75,677
Plant and mill equipment 223,851 219,725
Furniture, fixtures and equipment 7,249 7,239
----- -----
313,913 309,594
Accumulated depreciation (59,139) (51,156)
----- -----
254,774 258,438
Construction in progress 30,393 7,686
----- -----
Total property, plant and equipment 285,167 266,124
Other assets 1,124 782
----- -----
Total assets $344,405 $322,222
======== ========
Liabilities and stockholders' equity
Current liabilities:
Accounts payable $ 17,468 $ 15,187
Accrued expenses 6,959 9,763
Income tax payable 890 --
Current maturities of long-term debt 935 1,144
----- -----
Total current liabilities 26,252 26,094
Long-term debt 85,977 81,467
Deferred income taxes 17,159 12,931
Commitments and contingencies
Stockholders' equity:
Preferred stock, $.001 par value:
Authorized shares - 10,000,000 -- --
Class A common stock, $.001 par value:
Authorized shares - 75,000,000 18 18
Class B common stock, $.001 par value:
Authorized shares - 25,000,000 -- --
Additional paid-in capital 176,852 175,030
Treasury stock (245) (26)
Notes receivable from officers (61) (71)
Retained earnings 39,704 26,779
Accumulated other comprehensive income (loss) (1,251) --
----- -----
Total stockholders' equity 215,017 201,730
----- -----
Total liabilities and stockholders' equity $344,405 $322,222
======== ========
</TABLE>
[FN]
See accompanying notes to consolidated financial statements.
</FN>
3
<PAGE>
AMERICAN ITALIAN PASTA COMPANY
Consolidated Statements of Income
<TABLE>
<CAPTION>
Three Months Ended
March 31,
2000 1999
---- ----
(In thousands)
(Unaudited)
<S> <C> <C>
Revenues $63,965 $55,867
Cost of goods sold 45,899 41,352
Plant expansion costs -- 80
Gross profit 18,066 14,435
Selling and marketing expense 4,387 3,649
General and administrative expense 1,688 1,537
----- -----
Operating profit 11,991 9,249
Interest expense, net 1,101 484
----- -----
Income before income tax expense 10,890 8,765
Income tax expense 3,975 3,239
----- -----
Net income $6,915 $5,526
------ ------
Earnings Per Common Share:
Net income per common share $.38 $.31
------ ------
Weighted-average common shares outstanding 18,303 18,091
------ ------
Earnings Per Common Share - Assuming Dilution:
Net income per common share assuming dilution $.37 $.30
====== ======
Weighted-average common shares outstanding 18,738 18,642
====== ======
</TABLE>
[FN]
See accompanying notes to consolidated financial statements.
</FN>
4
<PAGE>
AMERICAN ITALIAN PASTA COMPANY
Consolidated Statements of Income
<TABLE>
<CAPTION>
Six Months Ended
March 31,
2000 1999
---- ----
(In thousands)
(Unaudited)
<S> <C> <C>
Revenues $123,106 $103,716
Cost of goods sold 88,986 77,102
Plant expansion costs - 80
Gross profit 34,120 26,534
Selling and marketing expense 8,265 6,745
General and administrative expense 3,172 2,792
Operating profit 22,683 16,997
Interest expense, net 2,329 919
Income before income tax expense 20,354 16,078
Income tax expense 7,429 5,945
Net income $12,925 $10,133
------- -------
Earnings Per Common Share:
Net income per common share $.71 $.56
------ ------
Weighted-average common shares outstanding 18,258 18,089
------ ------
Earnings Per Common Share - Assuming Dilution:
Net income per common share assuming dilution $.69 $.54
------ ------
Weighted-average common shares outstanding 18,756 18,608
------ ------
</TABLE>
[FN]
See accompanying notes to consolidated financial statements.
</FN>
5
<PAGE>
AMERICAN ITALIAN PASTA COMPANY
Consolidated Statements of Stockholders' Equity
<TABLE>
<CAPTION>
Class Notes
Class A A Additional Receivable Other Total
Common Common Paid-In Treasury From Retained Comprehensive Stockholders'
Shares Stock Capital Stock Officers Earnings Income (Loss) Equity
------- -------- ---------- ---------- ---------- -------- ------------- -----------
(In thousands, except share data)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Balance at September 18,176,554 $18 $175,030 $(26) $ (71) $26,779 -- $201,730
30, 1999
Paydown of
Notes
receivable -- -- -- -- 10 -- -- 10
from officers
Issuance of
Shares of
Class A common
stock to 127,966 -- 1,822 -- -- -- -- 1,822
option holders
& other
issuances
Purchase of -- -- -- (219) -- -- -- (219)
treasury stock
Net income -- -- -- -- -- 12,925 -- 12,925
Foreign
currency
translation -- -- -- -- -- -- (1,251) (1,251)
adjustment ------ ----- ----- ----- ----- ----- ----- -----
Comprehensive
income 11,674
=======
Balance at 18,304,520 $ 18 $176,852 $ (245) $ (61) $39,704 $(1,251) $215,017
March 31, 2000 ========== ==== ======= ====== ===== ======= ======= =======
</TABLE>
[FN]
See accompanying notes to consolidated financial statements.
</FN>
6
<PAGE>
AMERICAN ITALIAN PASTA COMPANY
Consolidated Statements of Cash Flows
<TABLE>
<CAPTION>
Six Months Ended
March 31,
2000 1999
---- ----
(In thousands)
(Unaudited)
<S> <C> <C>
Operating activities:
Net income $12,925 $10,133
Adjustments to reconcile net income to net cash
provided by operations:
Depreciation and amortization 8,401 6,223
Deferred income tax expense 3,892 --
Changes in operating assets and liabilities:
Trade and other receivables 2,002 (1,035)
Prepaid expenses and deposits 7 (1,687)
Inventory (6,644) 1,493
Accounts payable and accrued expenses (257) (4,091)
Income tax payable 1,930 1,767
Other (766) (272)
----- -----
Net cash provided by operating activities 21,490 12,531
Investing activities:
Additions to property, plant and equipment (28,536) (45,767)
-------- --------
Net cash used in investing activities (28,536) (45,767)
Financing activities:
Proceeds from issuance of debt 5,000 31,000
Principal payments on debt and capital lease
Obligations (699) (561)
Proceeds from issuance of common stock, net of
issuance costs 749 140
Other (177) 11
----- -----
Net cash provided by financing activities 4,873 30,590
----- ------
Net decrease in cash and temporary investments (2,173) (2,646)
Cash and temporary investments at beginning of
Period 3,088 5,442
----- -----
Cash and temporary investments at end of period $915 $2,796
====== ======
</TABLE>
[FN]
See accompanying notes to consolidated financial statements.
</FN>
7
<PAGE>
AMERICAN ITALIAN PASTA COMPANY
Notes to Consolidated Financial Statements
March 31, 2000
1. Basis of Presentation
The accompanying unaudited consolidated financial statements have been prepared
in accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-Q and Article 10 of
Regulation S-X. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments (consisting
of normal recurring accruals) considered necessary for a fair presentation have
been included. Operating results for the three and six-month periods ended March
31, 2000 are not necessarily indicative of the results that may be expected for
the year ended September 30, 2000. These financial statements should be read in
conjunction with the consolidated financial statements and footnotes thereto and
management's discussion and analysis thereof included in the Company's Annual
Report on Form 10-K for the year ended October 1, 1999 and management's
discussion and analysis included in Item 2 hereof.
American Italian Pasta Company (the "Company" or "AIPC") uses a 52/53 week
financial reporting cycle with a fiscal year which ends on the last Friday of
September or the first Friday of October. The Company's first three fiscal
quarters end on the Friday last preceding December 31, March 31, and June 30 or
the first Friday of the following month. For purposes of this Form 10-Q, the
second fiscal quarter of fiscal years 2000 and 1999 both included thirteen weeks
of activity and are described as the three month periods ended March 31, 2000
and 1999.
2. Stock Repurchase Plan
On March 20, 2000, the Company's Board of Directors authorized up to $25 million
to implement a common stock repurchase program of up to one million shares
during the next twelve months.
Purchases will be made from time to time on the open market or in negotiated
transactions, depending upon market conditions and other factors. Repurchased
common shares will be added to the Company's treasury shares to satisfy a
portion of the Company's existing stock option commitments.
As of April 26, 2000, the Company has purchased 304,400 shares at prices ranging
from $21.9886 to $24.7702.
8
<PAGE>
3. Earnings Per Share
Dilutive securities, consisting of options to purchase the Company's Class A
common stock, included in the calculation of diluted weighted average common
shares were 435,000 and 498,000 shares for the three-month and six-month periods
ended March 31, 2000, respectively, and 551,000 and 519,000 shares for the
three-month and six-month periods ended March 31, 1999, respectively.
A summary of the Company's stock option activity:
<TABLE>
Number of Shares
________________
<S> <C>
Outstanding at September 30, 1999 1,944,708
Exercised (123,995)
Granted 520,050
Canceled/Expired (6,577)
------
Outstanding at March 31, 2000 2,334,186
=========
</TABLE>
9
<PAGE>
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The discussion set forth below, as well as other portions of this Quarterly
Report, contains statements concerning potential future events. Such
forward-looking statements are based upon assumptions by the Company's
management, as of the date of this Quarterly Report, including assumptions about
risks and uncertainties faced by the Company. Readers can identify these
forward-looking statements by their use of such verbs as expects, anticipates,
believes or similar verbs or conjugations of such verbs. If any management
assumptions prove incorrect or should unanticipated circumstances arise, the
Company's actual results could materially differ from those anticipated by such
forward-looking statements. The differences could be caused by a number of
factors or combination of factors including, but not limited to, those factors
identified in the Company's Current Report on Form 8-K dated October 29, 1997,
and amended November 2, 1999, which is hereby incorporated by reference. This
report has been filed with the Securities and Exchange Commission (the "SEC" or
the "Commission") in Washington, D.C. and can be obtained by contacting the
SEC's public reference operations or obtaining it through the SEC's web site on
the World Wide Web at http://www.sec.gov. Readers are strongly encouraged to
consider those factors when evaluating any such forward-looking statement. The
Company will not update any forward-looking statements in this Quarterly Report
to reflect future events or developments.
Results of Operations
Second quarter fiscal 2000 compared to second quarter fiscal 1999.
Revenues. Total revenues increased $8.1 million, or 14.5%, to $64.0 million
for the three-month period ended March 31, 2000, from $55.9 million for the
three-month period ended March 31, 1999. The increase for the three-month period
ended March 31, 2000 was primarily due to volume growth of 29.3% over the prior
year, offset by lower average selling prices. Average selling prices were lower
due to changes in sales mix and the pass-through of lower durum wheat costs.
Management expects continued increases in revenues as a result of increasing
Retail volumes and Institutional volumes; however, increases will be partially
offset by higher growth rates of lower-priced Ingredient products, and may be
impacted by revenue pass-throughs associated with durum wheat cost fluctuations.
Revenues for the Retail market increased $3.5 million, or 8.7%, to $44.4
million for the three-month period ended March 31, 2000, from $40.9 million for
the three-month period ended March 31, 1999. The increase primarily reflects
volume growth of 16.9% over the comparable period, offset by lower average
selling prices. The pass-through of lower durum wheat costs and changes in sales
mix were the primary causes of a 7.0% reduction in average selling prices.
Revenues for the Institutional market increased $4.6 million, or 30.3%, to
$19.6 million for the three-month period ended March 31, 2000, from $15.0
million for the three-month period ended March 31, 1999. This increase was
primarily a result of volume growth of 55.2% over the comparable period, offset
by lower average selling prices. The pass-through of lower durum wheat costs,
along with changes in sales mix generated by rapid growth of Ingredient revenues
and a significant increase in contract volume to utilize available capacity,
created a 16.0% reduction in average selling prices.
Gross Profit. Gross profit increased $3.6 million, or 25.2%, to $18.1
million for the three-month period ended March 31, 2000, from $14.4 million for
the three-month period ended March 31, 1999. Gross profit increased
10
<PAGE>
generally as a result of the volumes and revenue gains referenced above. Gross
profit as a percentage of revenues increased to 28.2% for the three-month period
ended March 31, 2000 from 25.8% for the three-month period ended March 31, 1999.
The increase in gross profit relates to lower raw material costs and lower
operating costs per unit. Management expects increases in gross profit to
continue as a result of volume and related revenue increases.
Selling and Marketing Expense. Selling and marketing expense increased $0.7
million, or 20.2%, to $4.4 million for the three-month period ended March 31,
2000, from $3.6 million for the three-month period ended March 31, 1999. Selling
and marketing expense as a percentage of revenues increased to 6.9% for the
three-month period ended March 31, 2000, from 6.5% for the comparable prior year
period. The increase relates primarily to increased selling and promotional
expenses associated with higher private label sales volumes and additional
private label customers.
General and Administrative Expense. General and administrative expense were
comparable between periods, and decreased as a percentage of revenues from 2.75%
to 2.64%.
Operating Profit. Operating profit for the three-month period ended March
31, 2000, was $12.0 million, an increase of $2.7 million or 29.6% over the $9.2
million reported for the three-month period ended March 31, 1999, and increased
as a percentage of revenues to 18.7% for the three-month period ended March 31,
2000, from 16.6% for the three-month period ended March 31, 1999 as a result of
the factors discussed above.
Interest Expense. Interest expense for the three-month period ended March
31, 2000, was $1.1 million, increasing $0.6 million or 127.5% from the $0.5
million reported for the three-month period ended March 31, 1999. The increase
reflects higher borrowings, slightly higher interest rates, and reduced interest
expense capitalization. Specifically, interest expense capitalization was
reduced as construction in progress as of March 31, 1999 was $62.9 million
compared to $30.4 million as of March 31, 2000. Interest capitalized for the
quarter totaled $.3 million, compared to $.8 million in the prior year quarter.
Income Tax. Income tax expense for the three-month period ended March 31,
2000, was $4.0 million, increasing $0.7 million from the $3.2 million reported
for the three-month period ended March 31, 1999, and reflects an effective
income tax rate of approximately 36.5% and 37%, respectively.
Net Income. Net income for the three-month period ended March 31, 2000, was
$6.9 million, increasing $1.4 million or 25.1% from the $5.5 million reported
for the three-month period ended March 31, 1999. Diluted earnings per share was
$0.37 per share for the three-month period ended March 31, 2000 compared to
$0.30 per share in the comparable prior year period.
11
<PAGE>
Six months fiscal 2000 compared to six months fiscal 1999.
Revenues. Revenues increased $19.4 million, or 18.7%, to $123.1 million for
six-month period ended March 31, 2000, from $103.7 million for the six-month
period ended March 31, 1999. The increase for the six-month period ended March
31, 2000 was primarily due to volume growth of 32.2% over the comparable period,
offset by lower average selling prices and the pass-through of durum wheat
costs. Management expects continued increases in revenues as a result of both
increasing Retail volumes and Institutional volumes; however, increases will be
partially offset by higher growth rates of lower priced Ingredient products, and
may be impacted by revenue pass-throughs associated with durum wheat cost
fluctuations.
Revenues for the Retail market increased $12.2 million, or 16.3%, to $87.3
million for the six-month period ended March 31, 2000, from $75.1 million for
the six-month period ended March 31, 1999. The increase primarily reflects gains
in private label volumes which are partially offset by decreases in average
sales prices related to the pass-through of lower durum wheat costs in the
current period.
Revenues for the Institutional market increased $7.2 million, or 25.0%, to
$35.8 million for the six-month period ended March 31, 2000, from $28.6 million
for the six-month period ended March 31, 1999. This increase was primarily due
to volume growth in the Ingredient market of 60.6% offset by lower average
selling prices. The pass-through of lower durum wheat costs, along with changes
in sales mix generated by rapid growth in Ingredient revenues and a significant
increase in contract volume, created a 16.1% reduction in average selling
prices.
Gross Profit. Gross profit increased $7.6 million, or 28.6%, to $34.1
million for the six-month period ended March 31, 2000, from $26.5 million for
the six-month period ended March 31, 1999. This increase is generally related to
the revenue growth. Gross profit as a percentage of revenues increased to 27.7%
for the six-month period ended March 31, 2000 from 25.6% for the six-month
period ended March 31, 1999. The increase in gross profit as a percentage of
revenues relates to lower raw material costs and lower operating costs per unit.
Management expects increases in gross profit to continue as a result of volume
and related revenue increases.
Selling and Marketing Expense. Selling and marketing expense increased $1.5
million, or 22.5%, to $8.3 million for the six-month period ended March 31,
2000, from $6.7 million for the six-month period ended March 31, 1999. Selling
and marketing expense as a percentage of revenues increased to 6.7% for the
six-month period ended March 31, 2000, from 6.5% for the comparable prior year
period. The increase relates primarily to increased selling and promotional
expenses associated with higher private label sales volumes and additional
private label customers.
General and Administrative Expense. General and administrative expense
increased $0.4 million, or 13.6%, to $3.2 million for the six-month period ended
March 31, 2000, from $2.8 million for the comparable prior period, but decreased
as a percentage of revenues from 2.7% to 2.6%.
Operating Profit. Operating profit for the six-month period ended March 31,
2000, was $22.7 million, an increase of $5.7 million or 33.5% over the $17.0
million reported for the six-month period ended March 31, 1999, and increased as
a percentage of revenues to 18.4% for the six-month period ended March 31, 2000,
from 16.4% for the six-month period ended March 31, 1999 as a result of the
factors discussed above.
12
<PAGE>
Interest Expense. Interest expense for the six-month period ended March 31,
2000, was $2.3 million, increasing $1.4 million or 153.4% from the $0.9 million
reported for the six-month period ended March 31, 1999. The increase reflects
higher borrowings, slightly higher interest rates, and reduced interest expense
capitalization. Interest capitalized for the six months ended March 31, 2000
totaled $.5 million, compared to $1.2 million in the prior year.
Income Tax. Income tax expense for the six-month period ended March 31,
2000, was $7.4 million, increasing $1.5 million from the $5.9 million reported
for the six-month period ended March 31, 1999, and reflects an effective income
tax rate of approximately 36.5% and 37%, respectively.
Net Income. Net income for the six-month period ended March 31, 2000, was
$12.9 million, increasing $2.8 million or 27.6% from the $10.1 million reported
for the six-month period ended March 31, 1999. Diluted earnings per common share
was $0.69 per share for the six-month period ended March 31, 2000 compared to
$0.54 per share for the six-month period ended March 31, 1999.
Financial Condition and Liquidity
The Company's primary sources of liquidity are cash provided by operations
and borrowings under its credit facility. Cash and temporary investments totaled
$.9 million, and working capital totaled $31.9 million at March 31, 2000.
The Company's net cash provided by operating activities totaled $21.5
million for the six-month period ended March 31, 2000 compared to $12.5 million
for the six-month period ended March 31, 1999. The increase in the net cash
provided by operations is due primarily to higher operating income and lower
working capital utilized in the period.
Cash used in investing activities principally relates to the Company's
investments in manufacturing, distribution and milling assets. Capital
expenditures were $28.5 million for the six-month period ended March 31, 2000
compared to $45.8 million in the comparable prior fiscal year period. The
decrease in spending for the six-month period ended March 31, 2000 was a result
of the Company's completion, in 1999, of its third plant in Kenosha, Wisconsin
and its 1999 South Carolina and Missouri capital expansion programs. Currently,
the Company is in the process of completing a fourth plant in Verolanuova,
Italy, and plans to spend approximately $35 - $40 million, of which
approximately $17 million has been spent to date. The Company anticipates
completion of this project during the fiscal year ending September 30, 2001.
Additionally, the Company plans to spend approximately $25 million in fiscal
year 2000, primarily for cost savings and maintenance projects, of which
approximately $10 million has been spent to date. The Company anticipates
completion of these projects during the year ending September 30, 2000.
Net cash provided by financing activities was $4.9 million for the
six-month period ended March 31, 2000 compared to net cash provided of $30.6
million for the six-month period ended March 31, 1999. The $4.9 million in 2000
is the result of borrowings to fund the capital expansion programs.
The Company currently uses cash and proceeds from long-term borrowings to
fund capital expenditures, repayments of debt and working capital requirements.
The Company expects that future cash requirements will continue to be
principally for capital expenditures, share repurchases, repayments of
indebtedness, and working capital requirements.
13
<PAGE>
The Company has current commitments for $24.0 million in raw material
purchases for fiscal year 2000 and has approximately $38.0 million in
expenditures remaining under the above referenced capital expansion programs.
The Company anticipates the current capital programs will be fully funded by the
end of fiscal year 2001. The Company expects to fund these commitments from
operations and borrowings under its revolving credit facility.
On April 26, 2000, the Company completed an expansion to its revolving
credit facility with its bank group by adding a multi-currency feature.
Available credit under the expanded credit facility is $190 million compared
with $140 million previously. The expanded facility eliminates the previously
scheduled step-downs of available credit in the agreement, and allows the
Company to borrow in dollars or up to $65.0 million in Euro equivalents. The
Company's new manufacturing facility in Italy provides the opportunity to borrow
in Euros with minimal net currency exposure at rates well below current
dollar-denominated rates.
At this time, the current and projected borrowings under the credit
facility do not exceed the facility's available commitment. The facility matures
at the end of fiscal year 2002. The Company anticipates that any borrowing
outstanding at that time will be satisfied with funds from operations or will be
refinanced. The Company currently has no other material commitments.
Management believes that net cash provided by operating and financing
activities will be sufficient to meet the Company's expected capital and
liquidity needs for the foreseeable future.
Year 2000 Compliance
The Company completed all Year 2000 readiness work and experienced no
significant problems. The Company had anticipated some surge in certain customer
volumes during the quarter, which did not occur, but was able to replace those
volumes with Contract sales. The Company increased raw material and finished
good inventories anticipating potential Year 2000 issues, and as a result, the
Company has somewhat higher than normal inventories, and higher prepaid expenses
associated with the purchase of durum wheat. The Company anticipates inventories
will return to normal levels over the remainder of the fiscal year.
The Company incurred expenses of approximately $330,000 in fiscal year 1998
and approximately $250,000 in fiscal year 1999, to resolve the Company's Year
2000 compliance issues. All expenses incurred in connection with Year 2000
compliance were expensed as incurred, other than acquisitions of new software or
hardware, which were capitalized.
The Company does not expect to incur any material expenditures in the
future related to Year 2000 issues.
The Company does not believe it has any continued exposure to the Year 2000
issues.
Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The Company's exposure to market risk through financial instruments such as
long-term debt is not material. There have been no significant changes in market
risk since September 30, 1999.
14
<PAGE>
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
- -------------------------------
Not applicable
Item 2. Changes in Securities
- -------------------------------
Not applicable
Item 3. Defaults Upon Senior Securities
- -------------------------------
Not applicable
Item 4. Submission of Matters to a Vote of Security Holders
- -------------------------------
The Annual Meeting of Shareholders was held on February 3, 2000.
There were two matters submitted to a vote of security holders. The
first matter was for the election of directors. Each of the persons
named in the Proxy Statement as a nominee for director was elected.
Following are the voting results on each of the nominees for director:
Election of Directors Votes For Votes Withheld
Horst W. Schroeder 15,334,204 86,057
Mark C. Demetree 15,392,104 28,157
Timothy S. Webster 15,334,404 85,857
Karen H. Bechtel 15,327,204 93,057
The following directors continued in office:
Serving Until 2001 Serving Until 2002
David Y. Howe Jonathan E. Baum
John P. O'Brien Robert H. Niehaus
William R. Patterson Richard C. Thompson
The second matter was for the ratification of the Board of Directors'
selection of Ernst & Young LLP to serve as the Company's independent
auditors for the fiscal year 2000. The shareholders cast 15,408,657
votes in the affirmative and 10,689 votes in the negative and
shareholders holding 915 votes abstained from voting on the
ratification of Ernst & Young LLP as the Company's independent
auditors for the fiscal year 2000.
Item 5. Other Information
- -------------------------------
Not applicable
Item 6. Exhibits and Reports on Form 8-K
- -------------------------------
(a) Exhibits.
Ex-27 Financial Data Schedule
(b) Reports on Form 8-K.
None
15
<PAGE>
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.
American Italian Pasta Company
April 26, 2000
__________________________________ ___________________________________
Date Timothy S. Webster
President and Chief Executive Officer
(Principal Executive Officer)
April 26, 2000
__________________________________ ___________________________________
Date Warren B. Schmidgall
Executive Vice President
and Chief Financial Officer
(Principal Financial and
Accounting Officer)
16
<PAGE>
EXHIBIT INDEX
Exhibit No. Description
_____________ _______________________________________
27 Financial Data Schedule
17
<PAGE>
TYPE EX-27
DESCRIPTION Financial Data Schedule
ARTICLE 5
LEGEND THIS SCHEDULE CONTAINS SUMMARY FINANCIAL
INFORMATION EXTRACTED FROM Consolidated Balance
Sheets at March 31, 2000; Consolidated
Statements of Operations for the six months
ended March 31, 2000; Consolidated Statements
of Stockholders' Equity for the six months
ended March 31, 2000; Consolidated Statements
of Cash Flows for the six months ended March
31, 2000 AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH CONSOLIDATED FINANCIAL
STATEMENTS AND THE NOTES THERETO
MULTIPLIER 1000
PERIOD-START OCT-02-1999
PERIOD-TYPE 6 months
FISCAL-YEAR-END SEPT-30-2000
PERIOD-END MAR-31-2000
CASH 915
SECURITIES 0
RECEIVABLES 20165
ALLOWANCES 150
INVENTORY 31871
CURRENT-ASSETS 58114
PP&E 313913
DEPRECIATION 59139
TOTAL-ASSETS 344405
CURRENT-LIABILITIES 26252
BONDS 0
PREFERRED-MANDATORY 0
PREFERRED 0
COMMON 18
OTHER-SE 216250
TOTAL-LIABILITY-AND-EQUITY 344405
SALES 123106
TOTAL-REVENUES 123106
CGS 88986
TOTAL-COSTS 100423
OTHER-EXPENSES 0
LOSS-PROVISION 0
INTEREST-EXPENSE 2329
INCOME-PRETAX 20354
INCOME-TAX 7429
INCOME-CONTINUING 12925
DISCONTINUED 0
EXTRAORDINARY 0
CHANGES 0
NET-INCOME 12925
EPS-PRIMARY .71
EPS-DILUTED .69
18
<PAGE>
