<PAGE> 1
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 2, 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 000-18815
OUTLOOK GROUP CORP.
--------------------------------------------------
(Exact name of registrant as specified in its charter)
Wisconsin 39-1278569
------------------------------- ------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1180 American Drive
Neenah, Wisconsin 54956
--------------------------------------------------------------------
(Address of principal executive offices, including zip code)
(920) 722-2333
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(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 twelve 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.
3,880,569 shares of common stock, $.01 par value, were outstanding at
September 29, 2000.
<PAGE> 2
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.
The condensed consolidated financial statements included herein have been
included by the Company pursuant to the rules and regulations of the Securities
and Exchange Commission. Certain information and footnote disclosures normally
included in financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted pursuant to such rules and
regulations, although the Company believes that the disclosures are adequate to
make the information presented not misleading. This information is unaudited but
includes all adjustments (consisting only of normal recurring accruals) which,
in the opinion of Company management, are necessary for a fair presentation of
the Company's financial position and results of operations for such periods.
The results of operations for interim periods are not necessarily indicative of
the results of operations for the entire year. It is suggested that these
condensed financial statements be read in conjunction with the financial
statements and the notes thereto included in the Company's 2000 Form 10-K. The
May 31, 2000 Condensed Consolidated Balance Sheet Data was derived from audited
financial statements, but does not include all disclosures required by Generally
Accepted Accounting Principles.
<PAGE> 3
OUTLOOK GROUP CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(IN THOUSANDS, EXCEPT SHARE AMOUNTS)
<TABLE>
<CAPTION>
SEPTEMBER 2, MAY 31,
ASSETS 2000 2000
=================================================================== ------------ ------------
<S> <C> <C>
Current Assets
Cash and cash equivalents $ - $ 1,981
Accounts receivable, less allowance for 9,796 10,088
doubtful accounts of $1,097 and $774, respectively
Notes receivable-current portion 502 550
Inventories 7,039 6,390
Deferred income taxes 707 707
Other 662 719
------------ ------------
Total current assets 18,706 20,435
Notes receivable-long term, less allowance for 2,592 2,713
doubtful accounts of $777 at both dates
Property, plant, and equipment
Land 817 543
Building and improvements 11,991 11,386
Deposits on machinery and equipment 3,718 -
Machinery and equipment 39,593 38,323
------------ ------------
56,119 50,252
Less: accumulated depreciation (27,881) (26,984)
------------ ------------
28,238 23,268
Other assets 1,443 1,450
------------ ------------
Total assets $ 50,979 $ 47,866
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
===================================================================
Current Liabilities
Current maturities of long-term debt $ 1,169 $ 1,953
Short-term borrowings 2,250 -
Accounts payable 3,816 2,351
Accrued liabilities:
Salaries and wages 1,786 2,120
Other 1,928 1,559
------------ ------------
Total current liabilities 10,949 7,983
Long-term debt, less current maturities 2,400 2,800
Deferred income taxes 4,019 4,019
Shareholders' Equity
Cumulative preferred stock - -
Common stock (5,127,132 shares at both dates) 51 51
Additional paid-in capital 18,549 18,549
Retained earnings 23,247 22,700
Treasury stock (1,246,563 shares at both dates) (8,136) (8,136)
Officer loans (100) (100)
------------ ------------
Total shareholders' equity 33,611 33,064
------------ ------------
Total liabilities and shareholders' equity $ 50,979 $ 47,866
============ ============
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE> 4
OUTLOOK GROUP CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
THREE-MONTH PERIOD ENDED
SEPTEMBER 2, 2000 AUGUST 28, 1999
----------------- ---------------
<S> <C> <C>
NET SALES $ 17,638 $ 16,043
COST OF GOODS SOLD 13,583 12,608
----------- -----------
GROSS PROFIT 4,055 3,435
SELLING, GENERAL, AND
ADMINISTRATIVE EXPENSES 3,176 2,854
----------- -----------
OPERATING PROFIT 879 581
OTHER INCOME (EXPENSE):
INTEREST EXPENSE (93) (106)
INTEREST AND OTHER INCOME 107 92
----------- -----------
EARNINGS FROM OPERATIONS
BEFORE INCOME TAXES 893 567
INCOME TAX EXPENSE 346 214
----------- -----------
NET EARNINGS $ 547 $ 353
=========== ===========
NET EARNINGS PER COMMON SHARE - BASIC $ 0.14 $ 0.08
NET EARNINGS PER COMMON SHARE - DILUTED $ 0.14 $ 0.08
WEIGHTED AVERAGE
NUMBER OF SHARES OUTSTANDING-BASIC 3,880,569 4,650,300
=========== ===========
WEIGHTED AVERAGE
NUMBER OF SHARES OUTSTANDING-DILUTED 3,946,048 4,650,300
=========== ===========
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
<PAGE> 5
OUTLOOK GROUP CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(IN THOUSANDS)
<TABLE>
<CAPTION>
THREE-MONTH PERIOD ENDED
SEPTEMBER 2, 2000 AUGUST 28, 1999
----------------- ---------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings $ 547 $ 353
Adjustments to reconcile net earnings to
net cash provided by operating activities:
Depreciation and amortization 938 976
Provision for doubtful accounts 323 239
Loss on sale of assets (1) 14
Change in assets and liabilities:
Accounts and notes receivable 351 1,530
Inventories (596) (434)
Other 34 (267)
Accounts payable 1,298 (293)
Accrued liabilities (10) 199
Income taxes refundable -- 184
------- -------
Net cash provided by operating activities 2,884 2,501
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sale of assets 22 21
Deposits on property, plant, and equipment (3,718) --
Acquisition of property, plant, and equipment (2,235) (378)
------- -------
Net cash used in investing activities (5,931) (357)
CASH FLOWS FROM FINANCING ACTIVITIES:
Decrease in book overdraft -- (337)
Short-term borrowings 2,250 --
Payments on long-term borrowings (1,184) (359)
Purchase of treasury stock -- (179)
------- -------
Net cash provided by (used in) financing activities 1,066 (875)
Net increase (decrease) in cash (1,981) 1,269
Cash and cash equivalents at beginning of period 1,981 1,940
------- -------
Cash and cash equivalents at end of period $ -- $ 3,209
======= =======
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE> 6
OUTLOOK GROUP CORP. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
September 2, 2000
1. Net Earnings Per Common Share:
Basic earnings per share is computed by dividing net earnings by the
weighted average shares outstanding during each period. Diluted
earnings per share is computed similar to basic earnings per share
except that the weighted average shares outstanding is increased to
include the number of additional shares that would have been
outstanding if stock options were exercised and the proceeds from such
exercise were used to acquire shares of common stock at the average
market price during the period.
<TABLE>
<CAPTION>
Three Month Period Ended
September 2, 2000 August 28, 1999
---------------------- ---------------------
<S> <C> <C>
Weighted average shares outstanding - Basic 3,880,569 4,650,300
Effect of dilutive securities - stock options 65,479 -
---------------------- ---------------------
Weighted average shares outstanding - Diluted 3,946,048 4,650,300
====================== =====================
</TABLE>
2. Inventories:
Inventories consist of the following (in thousands):
<TABLE>
<CAPTION>
September 2, 2000 May 31, 2000
---------------------- ---------------------
<S> <C> <C>
Raw materials $ 2,868 $ 3,306
Work in process 2,698 1,092
Finished goods 1,473 1,992
---------------------- ---------------------
$ 7,039 $ 6,390
====================== =====================
</TABLE>
3. Income Taxes:
The effective income tax rate used to calculate the income tax expense
for the quarters ended September 2, 2000 and August 28, 1999 is based
on the anticipated income tax rate for the entire fiscal year.
4. Debt:
As of September 2, 2000 the Company had borrowings of $2,250,000 on its
revolving credit agreement.
5. Reclassifications:
Certain reclassifications have been made to the financial statements of
the prior period to conform to the September 2, 2000 presentation.
<PAGE> 7
6. Accounting Periods:
The Company elected to adopt 13 week quarters beginning in fiscal 1997;
however, fiscal year-end remains May 31.
7. Segment Reporting:
The Company has three reportable segments that are strategic business
units that offer different products and services. These business units
are: Outlook Graphics, Outlook Label Systems, and Outlook Packaging.
Outlook Graphics produces custom printed products on a wide range of
media including newsprint, coated paper, and heavy board, including
paperboard packaging. Outlook Graphics also provides finishing
services, promotional contract packaging, direct mailing, and
distribution services. Outlook Label Systems manufactures items such as
coupons, pressure sensitive specialty labels, printed vinyl cards,
continuous forms, cartons, and sweepstakes and specialty game pieces.
Flexographic printing and the subsequent laminating of flexible
packaging films are manufactured by the Outlook Packaging business
unit.
The Company evaluates the performance of its reportable segments based
on the income from operations of the respective business units.
Summarized financial information for the three month periods ending
September 2, 2000 and August 28, 1999 are as follows:
INCOME STATEMENT DATA:
<TABLE>
<CAPTION>
THREE MONTH PERIOD ENDED THREE MONTH PERIOD ENDED
SEPTEMBER 2, 2000 AUGUST 28, 1999
NET SALES NET EARNINGS (LOSS) NET SALES NET EARNINGS (LOSS)
--------- ------------------- --------- -------------------
<S> <C> <C> <C> <C> <C>
GRAPHICS $ 8,518 $ 413 GRAPHICS $ 9,119 $ 527
LABEL SYSTEMS 5,094 267 LABEL SYSTEMS 3,594 183
PACKAGING 4,169 (110) PACKAGING 3,401 (261)
ALL OTHER (143) (23) ALL OTHER (71) (96)
--------- ------------------- --------- -------------------
TOTAL $ 17,638 $ 547 TOTAL $ 16,043 $ 353
========= =================== ========= ===================
</TABLE>
BALANCE SHEET DATA:
<TABLE>
<CAPTION>
SEPTEMBER 2, 2000 MAY 31, 2000
TOTAL ASSETS TOTAL ASSETS
------------------------ -----------------------
<S> <C> <C> <C>
GRAPHICS $ 28,065 GRAPHICS $ 27,333
LABEL SYSTEMS 10,990 LABEL SYSTEMS 8,046
PACKAGING 11,924 PACKAGING 12,487
------------------------ -----------------------
TOTAL $ 50,979 TOTAL $ 47,866
======================== =======================
</TABLE>
<PAGE> 8
8. Commitments and Contingencies
The Company is a defendant in litigation filed by Barrier films
Ltd.-New York ("Barrier-NY"). This litigation, which was reported in
the Company's May 31, 2000 financial statements, alleges various causes
of action generally arising out of the acquisition of Barrier Films
Corporation from the Company by Barrier-NY. Because the complaint
presents overlapping claims, and requests multiple awards of damages of
cancellations of obligations for the same underlying facts, determining
the actual amount at issue is uncertain. However, all of the claims
made total approximately $28 million, plus elimination of payments
under Barrier-NY's promissory note to the Company, plus requests for
costs and punitive damages, without any attempt to adjust the claims
for multiple requests resulting from overlapping causes of action.
The Company has answered the claims denying liability and filed a
counterclaim for more than $2.6 million, plus costs and other damages.
The claim is a result of Barrier-NY's failure to make payments due the
Company under the 1997 promissory note and under the Purchase and Sale
Agreement in connection with the sale of BFC. The Company believes that
Barrier-NY's claims are without merit, and intends to defend the
matter, and to pursue its counterclaim, vigorously and aggressively.
The litigation remains at an early stage, and discovery has begun.
However, the Company has served Barrier-NY with a motion for judgment
dismissing 15 of the 19 causes of action in Barrier-NY's amended
complaint and for a judgment of liability on the Company's
counterclaim. The Company has also served a motion that whatever
remains of the litigation be transferred to the Eastern District of
Wisconsin, based on improper venue in the Eastern District of New York.
Barrier-NY has responded to the motion, but the court has not taken
action on them. The Company subsequently withdrew the motion to
transfer the case to Wisconsin.
In a separate matter, Outlook Packaging, Inc., a wholly-owned
subsidiary of the Company, commenced an action in the U.S. District
Court for the Eastern District of Wisconsin against BFC. In this suit,
which seeks monetary damages, Outlook Packaging alleges
misrepresentation, tortuous interference and breach of warranty against
BFC, based upon certain films produced by BFC for Outlook Packaging.
BFC answered the complaint and filed a motion requesting that the
Wisconsin case be dismissed or consolidated with the case Barrier-NY
filed in the Eastern District of New York. The court has granted BFC's
motion to consolidate this case with the case pending in New York.
Discovery remains in its early stages. Barrier-NY and BFC are
corporations controlled by Ronnie Shemesh, who is a greater-than 5%
shareholder of the Company.
Because of the early stages of these claims and counterclaims, the
ultimate resolution of these matters cannot be determined. In the event
of an unanticipated adverse final judgement in this claim, the
Company's consolidated financial position and results of operations
could be materially affected.
<PAGE> 9
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.
The following section presents a discussion and analysis of the Company's
results and operations during the first quarters of fiscal 2001 and 2000, and
its financial condition at September 2, 2000. Statements that are not historical
facts (such as statements in the future tense or using terms such as "believe",
"expect" or "anticipate") may be forward-looking statements that involve risks
and uncertainties. The Company's actual future results could materially differ
from those discussed. Factors that could cause or contribute to such differences
include, but are not limited to, those discussed in the following sections,
particularly under "General Factors."
Results of Operations
In the first quarter of fiscal 2001, net sales were $17.6 million, an increase
of 9.9% or $1.6 million from the comparable prior year period. The Label and
Packaging business units had net sales increases of $1.5 million or 41.7% and
$700,000 or 22.6% respectively. The Graphics business unit had a net sales
decrease of $600,000 or 6.6%. The Graphics business segment had decreases of
$1.2 million in the collateral management market and $600,000 in the paperboard
packaging market. These were offset by a $200,000 increase in the contract
packaging market and a $1.0 million increase in the commercial print market.
These changes reflect a changing services mix which can vary substantially from
period to period. It also represents a decrease in services for AOL, which
represented 6% of sales in the first quarter of fiscal 2001, as compared to 14%
in fiscal 2000. Sales to AOL are based largely on promotional mailings
determined by AOL. These activities can vary significantly from period to
period. There is no assurance that the volume of these promotional mailings will
continue in the future.
The Company's gross profit margin increased 1.6 percentage points to 23.0% of
net sales in the current quarter, up from 21.4% in fiscal 2000. The increase of
approximately $600,000 in gross profit is the result of a more profitable
product sales mix resulting from the discontinuation of unprofitable business,
the types of business on which the Company focused, and from the Company's
efforts to increase manufacturing efficiency and productivity. During the first
quarter of fiscal 2000, the Company began a personnel development and process
improvement program designed to enhance quality, reduce costs and strengthen the
Company's competitive position. This program is expected to continue throughout
fiscal 2001. However, outside consulting costs are not expected to be as large
as in Fiscal 2000.
Selling, general, and administrative expense increased $322,000 to 18.0% of
sales for the quarter as compared to 17.8% in the prior year's quarter. This
increase reflects the Company's sales, marketing, and product development
efforts, increases to the bad debt reserve, and additional expenses related to
the investments in employee training programs.
As a result, the operating profit percentage increased to 5.0% of sales in the
current quarter up from 3.6% of net sales in fiscal 2000 generating an increase
of $298,000 over the comparable year to date period.
Interest expense decreased over the prior year's quarter by $13,000. The
decrease for the quarter is the result of lower overall debt. The Company's debt
has decreased $3.1 million from August 1999.
Income tax expense is being accrued for the year at the rate of 38.5% although
quarter to quarter fluctuations may occur.
As a result of these factors, quarterly earnings increased to $547,000 or $0.14
per share, compared to $353,000 or $0.08 per share for the comparable period
last year. As a percentage of net sales, net income is 3.1% compared to 2.2% for
the comparable period last year. The per share information is affected by the
reduced number of shares outstanding in the fiscal 2001 period as a result of
the Company's share repurchases.
<PAGE> 10
Liquidity and Capital Resources
Operating activities provided $2.9 million of increased cash during the first
quarter of fiscal 2001. Cash from operations before depreciation and
amortization generated $1.5 million. Additional cash of $1.3 million was
generated from increases in accounts payable and accrued liabilities and another
$700,000 increase from collection of accounts and notes receivable including the
increase in the provision for doubtful accounts. Decreases in cash provided by
operating activities resulted from a $600,000 increase in inventory. The Company
continues to focus on managing its inventory. During the first quarter of fiscal
2001, work in process inventory was higher than normal due to the volume of
projects in process. These projects are scheduled to ship in September and
October, which the Company expects will consequently reduce work in process
levels.
Investing activities represent the acquisition of $1.0 million in plant and
equipment for the purpose of increasing productivity and increasing capacity of
the core business. In addition, the Company made a deposit of $3.7 million on
new equipment that will be replaced with a long-term financing arrangement. The
Company acquired a label production facility in Troy, Ohio during June 2000 that
was financed solely by cash generated from operating activities.
The Company reduced long-term borrowings by $1.1 million and as of quarter end,
the Company had borrowed $2.25 million on its revolving credit agreement and was
in compliance with all of its loan covenants. As of September 29, 2000 the
balance on the revolving line of credit was approximately $5.0 million. This was
due to temporary financing on machinery that the Company intends to convert to a
long-term lease arrangement. The leasing arrangement is expected to commence in
October of 2000.
As previously reported, the Company holds notes receivable and other obligations
from the purchasers of its former Barrier operations that total approximately
$2.4 million. The Company is currently in litigation to collect those amounts;
the other party is making claims against the Company, including seeking
termination of the note. The Company is also in litigation to collect another
note that totals approximately $0.7 million. Failure of the Company to collect
these amounts, or amounts due under other notes or accounts receivable in excess
of reserves would adversely affect the Company's balance sheet and results of
operations.
The Company maintains a credit facility with a bank that provides for a maximum
revolving credit commitment of $15.0 million less $3.2 million used for standby
letters of credit. Interest on the debt outstanding varies with the Company's
selection to have the debt be based upon margins over the bank determined
preference rate or an IBOR rate. The Company's actual rate is dependent upon the
Company's performance against a specific ratio as measured against a
predetermined performance chart. Long-term Company indebtedness now consists
solely of Industrial Development Bond obligations.
The Company anticipates capital expenditures of approximately $5.9 million in
fiscal 2001, excluding any acquisition opportunities that may become available
to the Company. The Company intends to finance these expenditures through funds
obtained from operations plus its credit facilities and possible leasing
opportunities.
The Company regularly reassesses how its various operations complement the
Company as a whole and considers strategic decisions to acquire new operations
or expand, terminate or sell certain existing operations. These reviews resulted
in various transactions during recent fiscal years, and may result in additional
transactions during fiscal 2001 and beyond.
General Factors
Because of the project-oriented nature of the Company's business, the Company's
largest customers have historically tended to vary from year to year depending
on the number and size of the projects completed for these customers, and the
Company is dependent upon its ability to retain, and obtain new customers. The
Company's leading customer during the first quarter is from the Packaging
business unit and accounts for approximately 10.5% of the Company's net sales.
In fiscal 2000, the company's leading customer, AOL, accounted for 14% of the
Company's net sales. Sales to AOL are based largely on promotional mailings
determined by AOL. These
<PAGE> 11
activities can vary significantly from period to period. There is no assurance
that the volume of these promotional mailings will continue in the future. The
Company's top five customers account for approximately 36% of net sales in the
first quarter of fiscal 2001 and consists of customers from all respective
business units. As with many of the Company's customers, the timing and volume
of activities can vary significantly from period to period. There is no
assurance that the volume from any one particular customer will continue beyond
the current period.
Changes in the Company's project mix and timing of projects make predictability
of the Company's future results very difficult. Customers generally purchase the
Company's services under cancelable purchase orders rather than long-term
contracts, although exceptions sometimes occur when the Company is required to
purchase substantial inventories or special machinery to meet orders. The
Company believes that operating without long-term contracts is consistent with
industry practices, although it increases the Company's vulnerability to losses
of business and significant period-to-period changes. The Company is committed
to developing multi-year projects that add value for its clients as part of its
long-range vision.
The Company uses complex and specialized equipment to provide its services.
Therefore, the Company is dependent upon the functioning of such machinery, and
its ability to acquire and maintain appropriate equipment.
As do other companies, the Company has significant accounts receivable or other
amounts due from its customers or other parties. From time to time, certain of
these accounts receivable or other amounts due have become unusually large
and/or overdue, and on occasion the Company has taken significant write-offs
relating to accounts receivable. The failure of the Company's customers to pay
in full amounts due to the Company would affect future profitability. Also, see
above regarding litigation relating to the collection of certain notes
receivable.
In addition, the Company's business requires it to maintain substantial
inventories. From time to time, changes in customer projects or Company services
can render certain inventories obsolete, and from time to time the Company has
taken substantial write-offs of obsolete inventories. The need to take such
write-offs in the future may affect future profitability and depends upon
changing customer requirements and other factors beyond the Company's control.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
The following discussion about the Company's risk-management activities may
include forward-looking statements that involve risk and uncertainties. Actual
results could differ materially from those discussed.
The Company has financial instruments, including notes receivable and long-term
debt, which are sensitive to changes in interest rates. However, the Company
does not use any interest-rate swaps or other types of derivative financial
instruments to limit its sensitivity to changes in interest rates because of the
relatively short-term nature of its notes receivable and variability of interest
rates on certain of its long-term debt.
The Company does not believe there has been any material changes in the reported
market risks faced by the Company since the end of its most recent fiscal year,
May 31, 2000.
<PAGE> 12
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
The Company has previously reported that it is named as a defendant in an action
captioned Barrier Films Ltd.--New York ["Barrier-NY"] versus Outlook Group
Corp., Inc. and Joseph Baksha, the U.S. District Court for the Eastern District
of New York, Civil No. 99-CV-3057 (LDW). This suit alleges various causes of
action which arise out of the acquisition of Barrier Films Corporation ("BFC")
by Barrier-NY from the Company in May 1997.
The Company has answered denying liability and has a counterclaim for more than
$2.6 million, plus costs and other damages, as a result of Barrier-NY's failure
to make payments due the Company under the 1997 promissory note and under the
Purchase and Sale Agreement in connection with the sale of BFC. The Company
believes that Barrier-NY's claims are without merit and intends to defend the
matter, and to pursue its counterclaim, vigorously and aggressively.
The litigation remains at an early stage, and discovery has begun. However, the
Company has served Barrier-NY with a motion for judgment dismissing 15 of the 19
causes of action in Barrier-NY's amended complaint and for a judgment of
liability on the Company's counterclaim. The Company has also served a motion
that whatever remains of the litigation be transferred to the Eastern District
of Wisconsin, based on improper venue in the Eastern District of New York.
Barrier-NY has responded to the motions, but the court has not yet taken action
on them. The Company subsequently withdrew the motion to transfer the case to
Wisconsin.
In a separate matter, Outlook Packaging, Inc., a wholly-owned subsidiary of the
Company, has commenced an action in the U.S. district Court for the Eastern
District of Wisconsin against BFC. In this suit, which seeks monetary damages,
Outlook Packaging alleges misrepresentation, tortuous interference and breach of
warranty against BFC, based upon certain films produced by BFC for Outlook
Packaging. BFC has answered the complaint and has filed a motion requesting that
the Wisconsin case be dismissed or consolidated with the case Barrier-NY filed
in the Eastern District of New York. The court has granted BFC's motion to
consolidate this case with the case pending in New York. Discovery remains in
its early stages. Barrier-NY and BFC are corporation controlled by Ronnie
Shemesh, who is a greater-than 5% shareholder of the Company.
Other than the foregoing, in the opinion of management, the Company is not a
defendant in any legal proceedings other than routine litigation that is not
material to its business.
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits. See attached Exhibit Index, which is incorporated by
reference herein.
(b) Reports on Form 8-K:
No reports on Form 8-K were filed during the quarter for which
this report is filed.
<PAGE> 13
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.
OUTLOOK GROUP CORP.
-------------------
(Registrant)
/s/ Richard C. Fischer
Dated: September 29, 2000 ----------------------------------------------------
Richard C. Fischer, Chairman and Chief Executive Officer
/s/ Paul M. Drewek
----------------------------------
Paul M. Drewek, Chief Financial Officer
<PAGE> 14
OUTLOOK GROUP CORP.
(the "Company")
EXHIBIT INDEX
to
Report on Form 10-Q for Quarter ended September 29, 2000
<TABLE>
<CAPTION>
Exhibit Filed
Number Description Herewith / Incorporated by reference
-----------------------------------------------------------------------------------------------------------
<S> <C> <C>
27 Financial Data Schedule X
</TABLE>
