<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
FOR QUARTERLY PERIOD ENDED SEPTEMBER 29, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Commission File Number 0-18339
SYLVAN INC.
(Exact name of registrant as specified in its charter)
Nevada 25-1603408
- ------------------------------ --------------------------------
(State or other jurisdiction of (IRS Employer Identification No.)
Incorporation or organization)
828 South Pike Road, Sarver, PA 16055
- -------------------------------------- ---------
Address of principal executive offices) (Zip Code)
(412) 295-3910
---------------------------------------------------
(Registrant's telephone number, including area code)
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
--- ---
Indicate the number of shares outstanding of each of the issuer's classes of
Common Stock, as of the latest practicable date.
Class Outstanding at September 27, 1996
- ----------------------------- ---------------------------------
Common Stock - $.001 Par Value 6,371,947
<PAGE> 2
SYLVAN INC. AND SUBSIDIARIES
INDEX
<TABLE>
<CAPTION>
Page No.
--------
<S> <C>
Part I - FINANCIAL INFORMATION
Item 1. Condensed Consolidated Balance Sheets
September 29, 1996 and December 31, 1995.......................................................3
Condensed Consolidated Statements of Income, Three Months
Ended September 29, 1996 and October 1, 1995...................................................5
Condensed Consolidated Statements of Income, Nine Months
Ended September 29, 1996 and October 1, 1995...................................................6
Condensed Consolidated Statements of Cash Flows, Nine
Months Ended September 29, 1996 and October 1, 1995............................................7
Notes to Condensed Consolidated Financial Statements
September 29, 1996.............................................................................8
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations..................................................11
Part II - OTHER INFORMATION
Item 1. Legal Proceedings..............................................................................14
Item 6. Exhibits and Reports on Form 8-K...............................................................14
</TABLE>
<PAGE> 3
Item 1. - Financial Statements
CONDENSED CONSOLIDATED BALANCE SHEETS
Sylvan Inc. and Subsidiaries
(In Thousands)
<TABLE>
<CAPTION>
SEPTEMBER 29, 1996 DECEMBER 31, 1995
------------------ -----------------
(Unaudited)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 6,279 $ 5,375
Trade accounts receivable, net of allowance
for doubtful accounts of $1,040 and $1,088, respectively 9,379 9,025
Inventories 7,322 6,849
Deferred income tax benefit 493 493
Prepaid expenses and other current assets 3,919 1,410
- -----------------------------------------------------------------------------------------------------------------
Total current assets 27,392 23,152
Property, plant and equipment, net 44,641 42,492
Intangible assets, net of accumulated amortization
of $2,153 and $1,794, respectively 10,074 10,754
Other assets, net of accumulated amortization
of $1,150 and $997, respectively 5,437 5,386
- -----------------------------------------------------------------------------------------------------------------
TOTAL ASSETS $87,544 $81,784
=================================================================================================================
</TABLE>
The accompanying notes are an integral part of these financial statements.
3
<PAGE> 4
CONDENSED CONSOLIDATED BALANCE SHEETS
Sylvan Inc. and Subsidiaries
(In Thousands Except Share Data)
<TABLE>
<CAPTION>
SEPTEMBER 29, 1996 DECEMBER 31, 1995
------------------ -----------------
(Unaudited)
<S> <C> <C>
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable - trade $ 3,249 $ 4,197
Current portion of long-term debt 211 1,559
Accrued salaries, wages and other employee benefits 4,186 4,030
Accrued interest 487 289
Other accrued liabilities 2,681 2,477
- ----------------------------------------------------------------------------------------------------------------
Total current liabilities 10,814 12,552
- ----------------------------------------------------------------------------------------------------------------
Long-term and revolving term debt 31,480 26,842
- ----------------------------------------------------------------------------------------------------------------
Other long-term liabilities:
Postretirement medical benefits 5,379 5,755
Other employee benefits 220 955
Other 1,710 2,045
- ----------------------------------------------------------------------------------------------------------------
Total other long-term liabilities 7,309 8,755
- ----------------------------------------------------------------------------------------------------------------
CONTINGENT LIABILITIES (See Note 2)
SHAREHOLDERS' EQUITY:
Common stock, voting, par value $.001, 10,000,000 shares authorized,
6,478,172 and 6,354,792 shares issued and 6,371,947 and 6,258,567
shares outstanding at September 29, 1996 and December 31, 1995,
respectively 6 6
Common capital contributed in excess of par 14,359 13,070
Retained earnings 25,842 21,019
Less: Treasury stock, at cost, 106,225 and 96,225 shares
at September 29, 1996 and December 31, 1995 (414) (281)
Cumulative translation adjustment 1,127 2,800
Pension adjustment (2,979) (2,979)
- ----------------------------------------------------------------------------------------------------------------
Total shareholders' equity 37,941 33,635
- ----------------------------------------------------------------------------------------------------------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $87,544 $81,784
================================================================================================================
</TABLE>
The accompanying notes are an integral part of these financial statements.
4
<PAGE> 5
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
Sylvan Inc. and Subsidiaries
(Unaudited, In Thousands Except Share Data)
<TABLE>
<CAPTION>
---------- Three Months Ended ----------
SEPTEMBER 29, 1996 OCTOBER 1, 1995
------------------ ---------------
<S> <C> <C>
NET SALES $19,728 $18,771
- --------------------------------------------------------------------------------------------------------------
OPERATING COSTS AND EXPENSES:
Cost of sales 11,496 10,581
Noncash interest cost of employee benefits 30 100
Selling, administration, research and development 4,527 4,178
Depreciation 1,057 991
- --------------------------------------------------------------------------------------------------------------
17,110 15,850
- --------------------------------------------------------------------------------------------------------------
OPERATING INCOME 2,618 2,921
INTEREST EXPENSE, NET, INCLUDING
AMORTIZATION OF DEBT ISSUANCE COST 477 709
OTHER INCOME (EXPENSE) (143) (75)
- --------------------------------------------------------------------------------------------------------------
INCOME BEFORE INCOME TAXES 1,998 2,137
PROVISION FOR INCOME TAXES 579 524
- --------------------------------------------------------------------------------------------------------------
NET INCOME $ 1,419 $ 1,613
- --------------------------------------------------------------------------------------------------------------
NET INCOME PER SHARE $ 0.22 $ 0.25
- --------------------------------------------------------------------------------------------------------------
WEIGHTED AVERAGE NUMBER OF SHARES (See Note 1) 6,414,811 6,342,164
==============================================================================================================
</TABLE>
The accompanying notes are an integral part of these financial statements.
5
<PAGE> 6
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
Sylvan Inc. and Subsidiaries
(Unaudited, In Thousands Except Share Data)
<TABLE>
<CAPTION>
---------- Nine Months Ended -----------
SEPTEMBER 29, 1996 OCTOBER 1, 1995
------------------ ---------------
<S> <C> <C>
NET SALES $58,595 $55,910
- ---------------------------------------------------------------------------------------------------------------
OPERATING COSTS AND EXPENSES:
Cost of sales 33,370 31,366
Noncash interest cost of employee benefits 181 301
Selling, administration, research and development 13,638 12,580
Depreciation 3,132 2,955
- ---------------------------------------------------------------------------------------------------------------
50,321 47,202
- ---------------------------------------------------------------------------------------------------------------
OPERATING INCOME 8,274 8,708
INTEREST EXPENSE, NET, INCLUDING
AMORTIZATION OF DEBT ISSUANCE COST 1,635 2,062
OTHER INCOME (EXPENSE) (14) 96
- ---------------------------------------------------------------------------------------------------------------
INCOME BEFORE INCOME TAXES 6,625 6,742
PROVISION FOR INCOME TAXES 1,802 2,044
- ---------------------------------------------------------------------------------------------------------------
NET INCOME $ 4,823 $ 4,698
- ---------------------------------------------------------------------------------------------------------------
NET INCOME PER SHARE $ 0.75 $ 0.74
- ---------------------------------------------------------------------------------------------------------------
WEIGHTED AVERAGE NUMBER OF SHARES (See Note 1) 6,431,713 6,331,342
===============================================================================================================
</TABLE>
The accompanying notes are an integral part of these financial statements.
6
<PAGE> 7
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Sylvan Inc. and Subsidiaries
(Unaudited, In Thousands)
<TABLE>
<CAPTION>
---------- Nine Months Ended -----------
SEPTEMBER 29, 1996 OCTOBER 1, 1995
------------------ ---------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 4,823 $ 4,698
Adjustments to reconcile net income to net cash provided
by operating activities:
Depreciation and amortization 3,644 3,490
Deferred income taxes (36) (449)
Noncash interest cost of employee benefits 181 301
Net gain on sale of assets (4) (39)
Stock option compensation expense 158 238
Trade accounts receivable (354) 306
Inventories (473) (562)
Prepaid expenses and other assets (2,391) (567)
Accounts payable and accrued liabilities (825) (160)
Postretirement medical and other employee benefits (1,135) (2,670)
- -------------------------------------------------------------------------------------------------------------
Net cash provided by operating activities 3,588 4,586
- -------------------------------------------------------------------------------------------------------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Net expenditures for property, plant and equipment (5,949) (5,388)
- -------------------------------------------------------------------------------------------------------------
Net cash used in investing activities (5,949) (5,388)
- -------------------------------------------------------------------------------------------------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from European bank loans 0 7,178
Principal payments on long-term debt (5,878) (2,307)
Net borrowings under revolving credit line 9,577 453
Net proceeds from exercise of stock options 931 205
Cost of treasury stock purchase (133) (118)
- -------------------------------------------------------------------------------------------------------------
Net cash provided by financing activities 4,497 5,411
- -------------------------------------------------------------------------------------------------------------
EFFECT OF EXCHANGE RATES ON CASH (1,232) 1,539
- -------------------------------------------------------------------------------------------------------------
NET INCREASE IN CASH AND CASH EQUIVALENTS 904 6,148
CASH AND CASH EQUIVALENTS, beginning of period 5,375 5,555
- -------------------------------------------------------------------------------------------------------------
CASH AND CASH EQUIVALENTS, end of period $ 6,279 $11,703
=============================================================================================================
SUPPLEMENTAL DISCLOSURE OF CASH FLOW DATA:
Interest paid $ 1,544 $ 1,884
Income taxes paid $ 1,744 $ 714
</TABLE>
The accompanying notes are an integral part of these financial statements.
7
<PAGE> 8
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Sylvan Inc. and Subsidiaries
September 29, 1996
(Unaudited)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
General
These condensed consolidated financial statements of Sylvan Inc.
("Sylvan") (the "Company") are unaudited and reflect all adjustments
(consisting only of normal recurring adjustments) which are, in the
opinion of management, necessary for a fair presentation of the results
of operations for the interim period. These statements should be read in
conjunction with the consolidated financial statements and notes thereto
contained in the Company's Annual Report to Shareholders and its Form
10-K for the year ended December 31, 1995.
Cash
The Company maintains cash balances of approximately $3.0 million with a
U.S. bank in support of a letter of credit issued to a European bank.
Inventories
Inventories at September 29, 1996 and December 31, 1995 consisted of the
following (in thousands):
<TABLE>
<CAPTION>
September 29, 1996 December 31, 1995
------------------ -----------------
<S> <C> <C>
Growing crops and compost material $3,678 $3,532
Stores and other supplies 1,811 1,690
Mushrooms and spawn on hand 1,833 1,627
------ ------
$7,322 $6,849
====== ======
</TABLE>
Earnings Per Common Share
Earnings per Common share for the three months and nine months ended
September 29, 1996 were calculated using the weighted average number of
Common shares outstanding during the period and included the effect of
stock options outstanding. Pursuant to the Company's 1990 and 1993 Stock
Option Plans, options for a total of 963,834 shares of the Company's
Common Stock have been granted and options for a total of 333,379 of
these shares have been exercised as of September 29, 1996.
8
<PAGE> 9
2. CONTINGENT LIABILITIES:
Certain of the Company's subsidiaries are self-insured for employee
medical benefits claims up to a limit of $50,000 per occurrence and also
for claims filed under Pennsylvania workers' compensation laws. Workers'
compensation claims for medical and lost wages in excess of $350,000 are
covered by an insurance policy.
3. FOREIGN CURRENCY TRANSLATION:
Assets and liabilities of non-U.S. operations are translated into U.S.
dollars using period-end exchange rates, while revenues and expenses are
translated at average exchange rates throughout the quarter. The
resulting net translation adjustments are recorded as a separate
component of shareholders' equity.
4. LONG-TERM DEBT AND BORROWING ARRANGEMENTS:
On June 1, 1996 the Company entered into a successor Revolving Credit
Agreement ("New Agreement") with two commercial banks. The New Agreement
amends and restates the Amended and Restated Revolving Credit and Term
Loan Agreement dated as of March 19, 1991 and last amended as of August
1, 1995 ("Old Agreement"). It provides for revolving credit loans on
which the aggregate outstanding balance available to the Company may not
initially exceed $45.0 million, but this aggregate outstanding balance
will decline over the life of the New Agreement as follows:
<TABLE>
<CAPTION>
Maximum Aggregate
Year Beginning Outstanding Balance
-------------- -------------------
<S> <C>
June 1, 1996 $45.0 million
June 1, 1998 40.0 million
June 1, 1999 35.0 million
June 1, 2001 25.0 million
June 1, 2002 20.0 million
</TABLE>
Outstanding borrowings under the New Agreement bear interest at either
the Prime Rate or LIBOR (plus an applicable margin), at the Company's
option.
The revolving credit loans mature on May 31, 2003. Within and under the
same terms and conditions as the revolving credit loan facility, the
Company may also borrow up to the U.S. dollar equivalent of $6.0 million,
denominated in Dutch guilders. Such borrowings may only be made outside
the United States.
In addition to certain other restrictions, the New Agreement provides for
the maintenance of various financial covenants, including limitations as
to incurring additional indebtedness, granting security interests to
third parties, spending for capital projects and paying dividends. The
Company has pledged to the lending banks a security interest in the
capital stock of its subsidiaries.
9
<PAGE> 10
The Company utilized monies under the New Agreement to repay term loans
outstanding under the Old Agreement and has allocated $2.0 million of its
credit capacity to support stand-by letters of credit which the Company
was required to obtain in connection with the self-insurance of its
subsidiaries' workers' compensation claims. On September 29, 1996, the
Company had outstanding borrowings under the New Agreement of $25.2
million.
The Company has two interest rate swap agreements which apply to $10.0
million of the Company's total long-term debt. The Company is required to
pay a weighted interest rate over the life of the agreements of 7.61%
plus the applicable margin. The balance of long-term debt continues to be
subject to variable interest rate pricing.
The Company has an agreement with a French bank which enables it to
borrow 15 million French francs at an interest rate based on a Paris
Interbank Offered Rate plus the applicable margin with repayment due
January 1998.
The Company's majority-owned Dutch subsidiary has a long-term plant and
equipment and overdraft facility with a Dutch bank. At September 29,
1996, term loans amounting to 5.0 million Dutch guilders (approximately
$2.9 million) were outstanding under this agreement.
10
<PAGE> 11
Item 2.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Sylvan Inc. and Subsidiaries
Liquidity and Capital Resources
Net cash provided by operating activities for the nine months ended September
29, 1996 was $3.6 million, or 22% below the comparable period in 1995, due to
increases in working capital. Trade accounts receivable increased by $0.4
million in the nine months ended September 29, 1996, compared to a decrease of
$0.3 million for the comparable period in 1995. This movement was primarily
driven by the continuation of a mix shift towards spawn products sales, in which
trade credit terms are extended for slightly longer periods than those for fresh
mushroom sales. Prepaid expenses and other assets increased by $2.4 million, due
to a one-time payment of $1.2 million by the Company into an escrow account in
anticipation of the settlement of certain postretirement medical benefits
litigation, and normal advance payments to raw material vendors by the Quincy
Farms subsidiary. Accounts payable and accrued liabilities decreased $0.8
million, representing payments during 1996 to settle plant construction related
payables at December 31, 1995, slightly off-set during 1996 by an increase in
payables relating to initial inventory purchases at the new facilities
(Australia and England). Postretirement and other employee benefits liabilities
decreased by $1.1 million, compared to a decrease of $2.7 million in the
comparable period in 1995. The decrease in both periods reflects on-going
payments and settlements of workers' compensation cases. The pool of unresolved
cases has now diminished to a level whereby fewer lump-sum settlements are
expected and future cash expenditures by the Company will decrease accordingly.
The Company was not required to, and did not, make a federal tax deposit in the
nine months ended September 29, 1996. Utilization of loss carry forwards and
the timing of employee benefit payments related to the closure of Moonlight
Mushrooms, Inc. mitigate the Company's U.S. federal tax payments.
The Company anticipates that it will obtain a settlement of postretirement
medical benefit litigation. The proposed notice of settlement has been provided
to the plaintiffs. A judicial hearing to approve the settlement is scheduled to
occur during the fourth quarter. If the settlement is approved, it would result
in a material, one-time actuarial gain as well as a reduction in future cash
outlays for benefits. If the settlement is not approved, the $1.2 million which
was put into escrow during the third quarter of 1996 will revert to the Company
and its reported postretirement liabilities will remain unchanged.
During 1996, the U.S. dollar strengthened against most major trading currencies.
The effect of the continuation of this trend in the third quarter of 1996 has
been to reduce the U.S. dollar value of foreign currency denominated assets and
liabilities of the Company's foreign subsidiaries. The effects of these
currency translation value changes are reflected in the $1.7 million reduction
in the cumulative translation account component of shareholders' equity.
Capital expenditures in the nine months ended September 29, 1996 were $5.9
million, compared with $5.4 million in the prior year comparable period, as the
Company continues its spawn manufacturing capacity expansion. The Australian
spawn production facility and the Pennsylvania spawn inoculum production
facility were completed during 1996. The most significant capital spending in
the quarter relates to the construction of a new spawn facility in Budapest,
Hungary. This is expected to be completed in mid-1997.
The Company expects total 1996 expenditures to amount to between $7.5 million
and $8.5 million, the exact amount being dependent on the timing of progress
payments relating to major capital projects currently under construction.
Funding for capital projects is provided by existing cash balances, cash flows
generated by operations or the Company's revolving credit facility.
11
<PAGE> 12
RESULTS OF OPERATIONS (Three Months Ended September 29, 1996 and October 1,
1995)
Net Sales
Net sales for the three months ended September 29, 1996 increased by 5.0% over
the comparable period in 1995. Underlying this increase was a mix shift. Fresh
mushroom sales declined to 35.0% of net sales, compared with 42.0% in 1995,
while spawn and related products sales increased. Fresh mushrooms sales revenue
decreased 12.0% despite a 7.0% increase in average realized price. The
proportion of mushrooms sold through fresh distribution channels increased from
85% to 93% and resulted in an average price per pound increase of 7%. Sales of
spawn and spawn-related products increased 17.0%, as sales unit growth was
recorded in all significant markets. Local currency selling prices in foreign
markets were slightly higher, although these increases are not reflected in U.S.
dollar revenue gains as the strengthening of the U.S. dollar during 1996
resulted in a 3% reduction in U.S. dollar translated selling price as compared
to 1995. Sales of nutritional supplements and chemicals increased by 19% with
strong growth in North American supplement sales.
Operating Costs and Expenses
Cost of sales increased to 58.3% of net sales, compared with 56.4% in the prior
year quarter. The effects of the production cutbacks at Quincy continue to
adversely affect consolidated results. Certain cost components are fixed and do
not closely track movements in production levels causing Quincy's cost of sales
percentage to increase sharply. The weighted effect of the increase in cost of
sales at Quincy on Sylvan's consolidated results was 2.5%, more than the full
1.9% in cost of sales percentage. This has obscured margin improvements in the
spawn and spawn related businesses. Selling, administration and research and
development expenses increased from 22.3% to 22.9% of net sales in the current
quarter. This increase is primarily due to higher spending levels incurred in
the on-going international market development initiatives in Eastern Europe and
Asia. Research and development costs were essentially unchanged or equivalent
between quarters. Depreciation expense increased slightly over the prior year
quarter as higher expenses were recognized from the continuing investment
program in spawn production facilities as new and expanded facilities become
operational.
Interest Expense
Net interest expense of $477,000 for the third quarter of 1996 was 33% below
the expense reported in the prior year comparable period. The Company's average
borrowing level was lower in the current quarter, compared to the prior year
quarter. The average cost of funds was 7.7% in the current quarter, compared
with 9.3% in the prior-year quarter. Under the Revolving Credit Agreement that
was entered into on June 1, 1996, the Company pays a reduced spread above its
selected prime rate or LIBOR option. This, together with a general downward
trend in market interest rates, resulted in a decreased net interest expense.
Income Tax Expense
The effective income tax rate in the third quarter of 1996 was 29%, compared
with 25% in the comparable prior year quarter.
RESULTS OF OPERATIONS (Nine Months Ended September 29, 1996 and October 1,
1995)
Net Sales
Net sales for the nine months ended September 29, 1996 were 5% higher than that
reported in the comparable prior year period, as net sales of spawn and spawn
related product increased 14%, offset by a 7% decrease in mushroom sales.
Revenues derived from non-U.S. customers amounted to 48% of net sales. Product
mix trends previously identified in the six months ended June 30, 1996 continued
as the proportion of net sales revenue generated from mushroom sales decreased
from 42.0% in 1995 to 37.0% in the current period. Pounds sold of mushrooms were
11.0% lower than 1995, due to the production cutback which was initiated at the
end of the first quarter. Average price per pound sold improved by 4.0% as a
greater proportion of total output was sold through fresh mushroom distribution
channels. Sales of spawn and spawn related products increased by 19% during the
current period, with unit growth recorded in all major markets. The comparative
strength of the U.S. dollar against the Company's major trading foreign
currencies, together with greater customer participation in volume discount
programs, combined to reduce average selling prices slightly on a year-over-year
basis. Sales of nutritional supplements and chemicals increased by 13.0%.
Operating Costs and Expenses
Cost of sales for the nine months ended September 29, 1996 were 57.0% of net
sales, compared with 56.1% in the comparable period. Mushroom business margins
decreased significantly in the current period as a result of the previously
identified operational changes implemented at the end of the first quarter of
1996. This overshadowed margin improvements in the spawn business, as discard
rates improved and cost savings were realized from new European production
facilities. Selling, administration and research and development expenses were
23.3% of net sales, compared with 22.5% in the prior year period. Higher market
development costs in Eastern Europe and Asia were the main cause of this
increase. Research and development costs were equivalent period against period.
Depreciation expense was 6% higher in the current period, reflecting the effects
of the European spawn production plant construction and expansion program.
Interest Expense
Interest expense for the nine months ended September 29, 1996 was $1.6 million,
compared with $2.1 million in the comparable period in 1995. Average borrowings
were broadly consistent between periods, but the Company's average cost of
funds was 8.0%, compared with 9.3% in 1995. This decrease was primarily due to
the effects of decreasing market interest rates.
12
<PAGE> 13
Income Tax Expense
The effective income tax rate for the nine months ended September 29, 1996 was
27%, compared with 30% in the comparable period in 1995. This decrease was
primarily due to a shift in the proportion of earnings generated from
operations in higher tax jurisdictions to those in lower tax jurisdictions
during 1996.
13
<PAGE> 14
PART II - OTHER INFORMATION
Item 1. - Legal Proceedings
Other than ordinary routine litigation incidental to their respective
businesses, there are no material pending legal proceedings to which the
Company or any of its subsidiaries is a party or of which any of their property
is the subject.
Item 6. - Exhibits and Reports on Form 8-K
(a) Exhibits
(11) Statement re computation of per share earnings is not
required because the relevant computation can be clearly
determined from the material contained in the financial
statements included herein.
(27) Financial Data Schedule
(b) Reports on Form 8-K
None
14
<PAGE> 15
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.
Date: November 1, 1996 SYLVAN INC.
----------------
By: /s/ WILLIAM P. MOONEY
-----------------------------
William P. Mooney
Chief Financial Officer
(Principal Financial Officer
and Chief Accounting Officer)
By: /s/ FRED Y. BENNITT
-----------------------------
Fred Y. Bennitt
Secretary/Treasurer
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-29-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> SEP-29-1996
<CASH> 6,279
<SECURITIES> 0
<RECEIVABLES> 10,419
<ALLOWANCES> 1,040
<INVENTORY> 7,322
<CURRENT-ASSETS> 27,392
<PP&E> 64,478
<DEPRECIATION> 19,837
<TOTAL-ASSETS> 87,544
<CURRENT-LIABILITIES> 10,814
<BONDS> 0
0
0
<COMMON> 6
<OTHER-SE> 37,935
<TOTAL-LIABILITY-AND-EQUITY> 87,544
<SALES> 58,595
<TOTAL-REVENUES> 58,595
<CGS> 33,370
<TOTAL-COSTS> 50,321
<OTHER-EXPENSES> 14
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,635
<INCOME-PRETAX> 6,625
<INCOME-TAX> 1,802
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 4,823
<EPS-PRIMARY> 0.75
<EPS-DILUTED> 0.75
</TABLE>
