<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
______________
FORM 8-K/A
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
______________
Date of Report (Date of earliest event reported): December 31, 1999
OPTA FOOD INGREDIENTS, INC.
(Exact name of registrant as specified in its charter)
Delaware 0-19811 04-3117634
- ------------------ --------------------- ---------------------
(State or other (Commission File (IRS Employer
jurisdiction of Number) Identification No.)
incorporation)
25 Wiggins Avenue
Bedford, Massachusetts 01730
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (781) 276-5100
Former Name, Former Address and Former Fiscal Year,
If Changed Since Last Report: Not Applicable
___________________________________________________________
Page 1 of 12 Pages
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Item 2. Acquisition or Disposition of Assets.
On December 31, 1999, Opta Food Ingredients, Inc. ("Opta") acquired all of
the assets of privately held Canadian Harvest of Cambridge, Minnesota from DCV,
Inc., a Delaware-based holding company ("DCV"), and all of the outstanding
common stock of Canadian Harvest Process Ltd. ("CHPL"), a wholly owned
subsidiary of DCV, in an arms length transaction. The assets of Canadian Harvest
and CHPL include manufacturing facilities in Cambridge, Minnesota and St.
Thomas, Ontario and related assets. Pursuant to the Purchase and Sale Agreement
between DCV and Opta dated as of December 31, 1999, Opta paid DCV $12 million
for the Canadian Harvest assets and the stock of CHPL based on the historical
value of the assets (exclusive of net working capital) acquired. In addition,
Opta paid approximately $1.6 million for the net working capital of the
purchased entities, consisting of inventory plus accounts receivable less
accounts payable, as of December 31, 1999. Opta paid for this acquisition out of
available cash and cash equivalents. Opta will continue the purchased entities'
business of manufacturing and supplying dietary oat fiber to the food industry
and will integrate this business into its own.
A copy of the Opta press release announcing the acquisition of Canadian
Harvest which was issued on January 3, 2000 is filed herewith as Exhibit 99.1
and incorporated herein by reference.
Item 7. Financial Statements and Exhibits.
(a) Financial statements of businesses acquired.
Page 2 of 12 Pages
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REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and Stockholders
of Opta Food Ingredients, Inc.
In our opinion, the accompanying combined balance sheet and related
combined statements of income and retained earnings and of cash flows present
fairly, in all material respects, the financial position of Canadian Harvest, a
division of DCV, Inc. and Canadian Harvest Process Ltd., a wholly owned
subsidiary of DCV, Inc. (together "Canadian Harvest" or the "Company") at
December 31, 1999 and the results of their operations and their cash flows for
the year in conformity with accounting principles generally accepted in the
United States. These financial statements are the responsibility of the
Company's management; our responsibility is to express an opinion on these
financial statements based on our audits. We conducted our audits of these
statements in accordance with auditing standards generally accepted in the
United States which require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for the opinion expressed above.
PricewaterhouseCoopers LLP
Boston, Massachusetts
February 22, 2000
Page 3 of 12 Pages
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CANADIAN HARVEST
COMBINED BALANCE SHEET
DECEMBER 31, 1999
(In thousands, except per share data)
Assets
Current assets:
Accounts receivable........................................ $ 1,029
Inventories................................................ 834
Prepaid expenses and other current assets.................. 36
-------
Total current assets................................... 1,899
Fixed assets, net.............................................. 7,946
Patents and trademarks......................................... 210
Other assets................................................... 3,197
-------
$13,252
=======
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable........................................... 467
Accrued expenses and other current liabilities............. 170
Intercompany payable - DCV................................. 4,419
-------
Total current liabilities.............................. 5,056
-------
Stockholders' equity:
Parent's equity interest................................... 8,196
-------
$13,252
=======
The accompanying notes are an integral part of the financial statements.
Page 4 of 12 Pages
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CANADIAN HARVEST
COMBINED STATEMENT OF INCOME AND RETAINED EARNINGS
FOR THE YEAR ENDED DECEMBER 31, 1999
(In thousands)
Product revenue................................................... $7,776
Operating expenses:
Cost of revenue............................................... 6,322
Selling, general and administrative........................... 358
Research and development...................................... 115
------
6,795
------
Income from operations............................................ 981
Other income.................................................. 8
Interest expense.............................................. (216)
------
Income before income tax expense.................................. 773
Provision for income tax expense.................................. 307
------
Net income........................................................ 466
Parents' equity interest December 31, 1998........................ 7,730
------
Parents' equity interest December 31, 1999........................ $8,196
======
The accompanying notes are an integral part of the financial statements.
Page 5 of 12 Pages
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CANADIAN HARVEST
COMBINED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED DECEMBER 31, 1999
(In thousands)
Cash flows from operating activities:
Net income............................................... $ 466
Adjustments to reconcile net income to
net cash used by operating activities:
Depreciation and amortization.................... 1,601
Changes in assets and liabilities:
Accounts receivable.......................... (23)
Inventories.................................. (61)
Prepaid expenses............................. 38
Accounts payable............................. 138
Accrued expenses............................. 78
Intercompany payable - DCV................... (2,363)
-------
Net cash used in operating activities... (126)
-------
Cash flows from investing activities:
Purchases of fixed assets................................ (126)
-------
Net cash used in investing activities... (126)
-------
Net decrease in cash and cash equivalents.................... (252)
Cash and cash equivalents, beginning of year................. 252
-------
Cash and cash equivalents, end of year....................... $ --
=======
The accompanying notes are an integral part of the financial statements.
Page 6 of 12 Pages
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CANADIAN HARVEST
NOTES TO FINANCIAL STATEMENTS
1. Basis of Presentation
Canadian Harvest, as presented in these financial statements, is the
combination of Canadian Harvest, a division of DCV, Inc. and Canadian
Harvest Process Ltd., a wholly owned subsidiary of DCV, Inc., which are
both under common control. Effective December 31, 1999, Opta Food
Ingredients, Inc. acquired the operating assets of the two Canadian Harvest
entities, (together "Canadian Harvest").
Historically, combined financial statements were not prepared for the two
Canadian Harvest entities. The accompanying financial statements were
prepared to comply with the rules and regulations of the Securities and
Exchange Commission. These combined financial statements are derived from
the Canadian Harvest entities' historical accounting records.
2. Summary of Significant Accounting Policies
Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amount of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses
during the year. Actual results could differ from those estimates.
Revenue Recognition
Revenue from product sales is recorded upon shipment.
Inventories
Inventories are stated at the lower of cost or market, cost determined
using the first-in, first-out method.
Fixed Assets
Fixed assets are stated at cost and depreciated using the straight-line
method over the estimated useful lives of the assets, which range from
three to fifteen years. Maintenance and repairs are charged to expense as
incurred.
Financial Instruments
The carrying amount of Canadian Harvest's financial instruments, which
include accounts receivable, accounts payable and accrued expenses,
approximates their fair value at December 31, 1999.
Research and Development Expenses
Research and development costs are expensed as incurred.
Income Taxes
The Canadian Harvest entities have an informal tax sharing agreement with
the former parent in which tax expense is allocated to the Canadian Harvest
entities directly by the parent. Taxes payable is included in the
intercompany - DCV account in the accompanying financial statements.
Page 7 of 12 Pages
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3. Inventories
Inventories consist of the following (in thousands):
Raw materials $ 123
Finished goods 711
-----
$ 834
=====
4. Fixed Assets
Fixed assets consist of the following (in thousands):
Useful life
in years
-----------
Land and land improvements $ 462
Buildings 15 1,892
Autos 4 202
Machinery and equipment 5-7 9,570
Office equipment 3-7 135
------
12,261
Less accumulated depreciation
and amortization 4,315
------
$7,946
======
Depreciation expense for the year ended December 31, 1999 was $1,601,000.
5. Acquisition by Opta Food Ingredients, Inc.
On December 31, 1999, Opta Food Ingredients, Inc. ("Opta") purchased all of
the assets of privately held Canadian Harvest of Cambridge, Minnesota from
DCV, Inc., a Delaware-based holding company ("DCV"), and all of the
outstanding common stock of Canadian Harvest Process Ltd. ("CHPL"), a
wholly owned subsidiary of DCV. The assets of Canadian Harvest and CHPL
include manufacturing facilities in Cambridge, Minnesota and St. Thomas,
Ontario and related assets. Pursuant to the Purchase and Sale Agreement
between DCV and Opta dated as of December 31, 1999, Opta paid DCV $12
million for the long term Canadian Harvest assets and the stock of CHPL
based on the historical value of the assets acquired. In addition, Opta
paid approximately $1.6 million for the net working capital of the
purchased entities, consisting of inventory plus accounts receivable less
accounts payable and accrued expenses, as of December 31, 1999.
Page 8 of 12 Pages
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(b) Pro forma financial information.
Unaudited Pro Forma Financial Information
The accompanying unaudited proforma combined financial statements are
presented as if Opta Food Ingredients and Canadian Harvest had been
operating as a combined entity. The unaudited pro forma combined balance
sheet as of December 31, 1999 presents the financial position of Opta Food
Ingredients assuming the acquisition had occurred on December 31, 1999.
The unaudited pro forma combined statement of income presents the results
of operations of Opta Food Ingredients assuming the acquisition had
occurred on January 1, 1999. All material adjustments to reflect the
acquisition are set forth in the column "Pro Forma Adjustments."
The pro forma data is for informational purposes only and may not
necessarily reflect future results of operations and financial position or
what the results of operations or financial position would have been had
Opta Food Ingredients and Canadian Harvest been operating as a combined
entity for the specified period. The unaudited proforma combined financial
statements should be read in conjunction with the historical financial
statements and notes thereto of Opta Food Ingredients.
UNAUDITED PRO FORMA COMBINED
BALANCE SHEET
DECEMBER 31, 1999
(In thousands)
<TABLE>
<CAPTION>
Historical
--------------------------
Opta Food Canadian Pro Forma Pro Forma
Ingredeints Harvest Adjustments Combined
----------- -------- ----------- ---------
<S> <C> <C> <C> <C>
Assets
Current assets:
Cash and cash equivalents........................... $16,237 $ -- $(13,659) (b) $ 2,578
Short term investments.............................. 10,004 -- -- 10,004
Accounts receivable, net............................ 2,831 1,029 67 (b) 3,927
Inventories, net.................................... 3,744 834 100 (b) 4,678
Prepaid expenses and other current assets........... 546 36 (36) (a) 546
------- ------- -------- --------
Total current assets...................... 33,362 1,899 (13,528) 21,733
Fixed assets, net........................................ 12,030 7,946 3,844 (b) 23,820
Goodwill, net............................................ 1,549 -- -- 1,549
Patents and trademarks, net.............................. 482 210 (100) (b) 592
Other assets............................................. 45 3,197 (3,197) (a) 121
76 (b)
------- ------- -------- --------
$47,468 $13,252 $(12,905) $ 47,815
======= ======= ======== ========
Liabilities and Stockholders' Equity
Current liabilities:
Current portion of long term debt................... 394 -- -- 394
Accounts payable.................................... 1,608 467 (203) (a) 1,872
Accrued expenses.................................... 1,197 170 (87) (a) 1,280
Intercompany payables............................... -- 4,419 (4,419) (a) --
------- ------- -------- --------
Total current liabilities................. 3,199 5,056 (4,709) 3,546
------- ------- -------- --------
Long term debt........................................... 2,733 -- -- 2,733
Stockholders' equity:
Common stock........................................ 111 -- -- 111
Additional paid in capital.......................... 79,807 -- -- 79,807
Retained earnings (deficit)......................... (37,938) 8,196 (8,196) (a) (37,938)
Treasury stock...................................... (444) -- -- (444)
------- ------- -------- --------
41,536 8,196 (8,196) 41,536
$47,468 $13,252 $(12,905) $ 47,815
======= ======= ======== ========
</TABLE>
Page 9 of 12 Pages
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UNAUDITED PRO FORMA COMBINED STATEMENT
OF INCOME FOR THE YEAR ENDED DECEMBER 31, 1999
(In thousands, except per share amounts)
<TABLE>
<CAPTION>
Historical
-------------------------
Opta Food Canadian Pro Forma Pro Forma
Ingredeints Harvest Adjustments Combined
----------- -------- ----------- ---------
<S> <C> <C> <C> <C>
Product revenue........................................... $19,289 $ 7,776 $ -- $27,065
Operating expenses:
Cost of revenue...................................... 12,408 6,322 -- 18,730
Selling, general and administrative.................. 4,553 358 -- 4,911
Research and development............................. 3,275 115 -- 3,390
Restructuring........................................ 350 -- -- 350
------- ------- ------- -------
20,586 6,795 -- 27,381
------- ------- ------- -------
Income (loss) from operations............................. (1,297) 981 -- (316)
Interest income........................................... 1,344 -- (642) (c) 702
Interest expense.......................................... (262) (216) -- (478)
Other income, net......................................... 58 8 -- 66
------- ------- ------- -------
Income (loss) before income tax expense................... (157) 773 (642) (26)
Provision for income tax expense.......................... -- 307 (307) (d) --
------- ------- ------- -------
Net income (loss)......................................... $ (157) $ 466 $ (335) $ (26)
======= ======= ======= =======
Basic and diluted loss per share.......................... $ (0.01) $ (0.00)
Weighted average shares outstanding -
basic and diluted................................... 11,031 11,031
</TABLE>
Pro Forma Adjustments
(a) To eliminate the Canadian Harvest entities' assets, liabilities and
equity not relating to the business acquired in the acquisition of
Canadian Harvest.
(b) To reflect the tentative purchase price as if the acquisition had
occurred on January 1, 1999. The company intends to have an
independent appraisal completed on the assets acquired. The purchase
price was allocated based on the estimated fair values at the date of
the acquisition, as follows:
Property, plant and equipment $11,790
Intangibles 110
Accounts receivable 1,096
Inventory 934
Accounts payable 263
Accrued expenses 83
Transaction costs 75
-------
Total $13,659
=======
(c) To reflect adjustment of interest income for cash used as if the
purchase had occurred on January 1, 1999 with out regard to the
positive cash flow generated from the operations of Canadian Harvest
during 1999.
(d) To decrease provision for income tax expense based on Opta Food
Ingredients' net operating loss carryforwards.
Page 10 of 12 Pages
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(c) Exhibits.
2.1 Purchase and Sale Agreement Between DCV, Inc., as Seller, and Opta
Food Ingredients, Inc., as Buyer, Dated as of December 30, 1999.*
99.1 Press Release of the Registrant, dated January 3, 2000.*
Page 11 of 12 Pages
* Filed as an exhibit to Opta's Form 8-K filed with the Securities and Exchange
Commission on Janury 18, 2000.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
OPTA FOOD INGREDIENTS, INC.
(Registrant)
Date: March 17, 2000 /s/ Scott A. Kumf
----------------------------------
Scott A. Kumf, Chief Financial Officer,
Vice President Administration and
Treasurer
Page 12 of 12 Pages
