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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) January 23, 1998
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Monterey Pasta Company
(Exact name of registrant as specified in charter)
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Delaware 0-22534-LA 77-0227341
(State or other jurisdiction (Commission File Number) (IRS Employer
of incorporation) Identification No.)
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1528 Moffett Street, Salinas, California 93905
(Address of principal executive offices) (Zip Code)
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Registrant's telephone number, including area code (408) 753-6262
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(Former name or former address, if changed since last report)
This Current Report, including exhibits, contains 9 pages.
The Exhibit Index is located on page 4.
1.
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ITEM 5. OTHER EVENTS.
Monterey Pasta Company (the "Company") recently announced its earnings
for the quarter and year ended December 28, 1997, the resignation of three
directors and the election of one director to the Company's Board of
Directors.
Copies of the two press releases announcing the Company's quarterly
earnings and the changes to the Board of Directors are attached as Exhibits
99.2 and 99.3 and are incorporated by reference.
ITEM 7. EXHIBITS.
Exhibit No. Description
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99.2 Press Release dated January 23, 1998 announcing two new
product offerings and the resignation of Timothy J. Ryan
from the Board of Directors.
99.3 Press Release dated January 30, 1998 announcing earnings for
the quarter and year ended December 28, 1997, the resignation
of Kenneth A. Steel and Robert F. Steel from the Board of
Directors and the election of Gerald P. Melia to the Company's
Board of Directors.
2.
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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.
MONTEREY PASTA COMPANY
By: /s/ Stephen L. Brinkman
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Stephen L. Brinkman
Chief Financial Officer
January 30, 1998
3.
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EXHIBIT INDEX
Sequentially
Exhibit No. Description Numbered Page
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99.2 Press Release dated January 23, 1998 announcing two 5
new product offerings and the resignation of Timothy J.
Ryan from the Board of Directors.
99.3 Press Release dated January 30, 1998 announcing 6
earnings for the quarter and year ended December 28,
1997, the resignation of Kenneth A. Steel and Robert F.
Steel from the Board of Directors and the election of
Gerald P. Melia to the Company's Board of Directors.
4.
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EXHIBIT 99.2
MONTEREY PASTA CO.
PRESS RELEASE
For Immediate Release Contact: Vince Guarino
January 23, 1998 408/753-6262, Ext. 109
- -NEW, SOUTHWEST STYLE RAVIOLI REDEFINES THE REFRIGERATED PASTA CATEGORY
Salinas CA.....Monterey Pasta Company (Nasdaq: PSTA) introduces two unique
gourmet ravioli flavors to fuse traditional Italian pasta with the fast
growing Mexican food category. The introduction of Southwestern Style Ravioli
is part of a strategy synonymous with the California Company's upscale,
gourmet image.
"We are not inhibited by traditional culinary restraints", says Lance
Hewitt, President/CEO. "Our Company philosophy is a global one. We use these
gourmet pasta products as a vehicle to introduce consumers to unique and
exciting flavor profiles that have a fusion of traditional roots. It gives us
a competitive advantage by setting us apart from the mass producers of dry
and refrigerated pasta," said Hewitt.
First, the BLUE CORN RAVIOLI made with Sonoma Jack Habanero cheese
filling is a pepper lovers delight. Blue corn meal dough pillows are filled
with Sonoma Jack Habanero cheese, corn and sundried tomatoes. CHILE CILANTRO
RAVIOLI with Southwestern Chicken Filling incorporates black beans, green
chiles, chicken and cheese for an authentic Southwestern flavor. Paired with
Monterey Pasta's new Ranchero Salsa, these quickly-cooked hot entrees
comprise a gourmet meal.
Separately, Monterey Pasta announced the resignation from its Board of
Directors of Timothy J. Ryan effective December 31, 1997. "Ryan's recent
acceptance of an executive position with a southern California coffee company
prompted the resignation," according to Lance Hewitt, President/CEO. "Tim's
service since 1995 embraced a particularly challenging time at MPC and Tim
was a steadying influence. We are sorry to lose his wisdom, and wish him well
in his new endeavor," said Hewitt.
-END-
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EXHIBIT 99.3
For Further Information:
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<S> <C>
MONTEREY PASTA COMPANY COFFIN COMMUNICATIONS GROUP
1528 Moffett Street 15300 Venture Boulevard, Ste. 303
Salinas, CA 93905 Sherman Oaks, CA 91403
(408) 753-6262 (818) 789-0100
CONTACT: Steve Brinkman, Chief Financial Officer CONTACT: Sanjay Sabani, Partner
Vince Guarino, Executive Assistant Bill Coffin, President
</TABLE>
For Immediate Release:
MONTEREY PASTA REPORTS NET INCOME INCREASE IN FOURTH QUARTER
- THIRD CONSECUTIVE PROFITABLE QUARTER FOR GOURMET FOOD COMPANY
- CONTINUING PROFITABILITY EVIDENCES 1997 AS A TURNAROUND YEAR FOR NATIONAL
MANUFACTURER OF REFRIGERATED FRESH PASTA.
SALINAS, CA (January 30, 1998)--Monterey Pasta Company (NASDAQ: PSTA)
today reported net income for the quarter ended December 28, 1997 of $363,000
before dividends to preferred and certain common stockholders of $58,000, or
$0.03 per share, on net revenues of $6,159,000, based on 11.37 million
shares. This compares with a net loss for the quarter ended December 29, 1996
of ($1,515,000), before dividends to preferred and certain common
stockholders of $492,000, resulting in a loss of ($0.23) per share, on net
revenues of $5,971,000, based on 8.71 million shares.
For the twelve months ended December 28, 1997, the company reported net
income of $511,000, before dividends to preferred and certain common
stockholders of $318,000, resulting in a profit of $0.02 per share on 10.46
million shares. This compares with a net loss for the twelve months ended
December 29, 1996, of ($8,233,000), before dividends to preferred and certain
common stockholders of $1,108,000, resulting in a loss of ($1.13) per share
on 8.28 million shares. In addition to the positive profit results, the
Company continues to generate significant positive cash flow, thereby
allowing the reduction of borrowings. As of the date of this release, total
borrowings have been reduced by $1,017,000 since the end of the third quarter
from $1,994,000 to $977,000.
Page 1 of 4
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Commenting on the results, Mr. Lance Hewitt, Chief Executive Officer and
President, said, "We are pleased to report the third consecutive profitable
quarter for Monterey Pasta. Additionally, this quarter's earnings exceeded
third quarter's earnings by $88,000. These earnings partially incorporate the
early stages of a roll-out of our products into approximately 180 more Club
stores nationwide in the fourth quarter. We expect income from Club stores to
increase during 1998 as the supply systems fills and Club retail customers
become repeat buyers of our pasta and sauces. Our trend in profitability is
due to aggressive restructuring actions, taken by the board and the
management team, and by a deliberate return to customer relationships based
on profitability rather than a pure volume strategy. During the fourth
quarter we were able to enter high pasta consuming metropolitan areas in
Denver and Columbus, Ohio, adding 60 more retail supermarkets over and above
the important Club business. I fully expect we will continue to pick up
retail customers during 1998."
"The future impact of our share price of unexercised conversion rights
awarded in preferred stock private placements is no longer an issue. The
private placements, necessary to fund Company operations during the
turnaround in late 1996 and early 1997, are now fully converted. Principal
among these is Clearwater Fund IV, Ltd., largest single holder of such rights
which converted $3,000,000 of Series A-1 Preferred Stock into 4,108,108
shares of common stock. Clearwater said at the time of conversion they looked
forward to participating in the future growth of the Company," Hewitt said.
Monterey Pasta also announced the resignation of Kenneth A. Steel, Jr.
and Robert F. Steel from the Board of Directors. In their resignations they
stated their desire to reduce their time and travel commitments, although
remaining strong supporters of Monterey Pasta Company. A substantial private
investor in MPC, Kenneth Steel served as a Director since 1996 and as Interim
CEO from October of that year until August of 1997. Mr. Hewitt noted that,
"Monterey Pasta stockholders are indebted to both of the Steel brothers for
their energy and commitment to the Company. Both contributed tremendously to
the recent turnaround, with Ken taking the lead as Interim CEO. Elected to
the Board is Gerard P. Melia, Chief Financial Officer, Clearwater Funds,
Clearwater, Florida, our largest stockholder. Jerry Melia represents a
Page 2 of 4
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committed, long-term major investor. His election is both appropriate and
timely," accordingly to Hewitt.
Monterey Pasta Company manufactures and distributes a premium line of
fresh refrigerated pastas and sauces to grocery and club stores across the
United States. The company's operations are managed from 37,666 square foot
integrated headquarters and production facility in Salinas, California.
This press release contains forward-looking statements that involve a
number of uncertainties and risks that could cause actual results to differ
materially from those discussed in the forward-looking statements, including
risks associated with the retention of key personnel and integration of new
management, the risks of food production and intense competition in the
market in which the company competes. For additional information regarding
these and other risks, reference is made to the Company's Annual Report on
Form 10-K, as amended by Form 10-K/A, for the year ended December 29, 1996,
subsequent quarterly reports on Form 10-Q, and the company's Registration
Statement on Form S-3.
Chart to follow
Page 3 of 4.
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MONTEREY PASTA COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(000'S except earnings per share numbers)
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<CAPTION>
Fourth Quarter Ended Year Ended
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December 28, 1997 December 29, 1996 December 28, 1997 December 29, 1996
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Net revenues from continuing operations.................. 6,159 5,971 23,447 24,492
Cost of sales............................................ 3,685 3,881 13,761 15,851
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Gross profit............................................. 2,474 2,090 9,686 8,641
Selling, general and administrative expenses............. 2,084 3,345 8,725 16,238
Gain (loss) on sale or impairment of assets.............. - (91) (259) (571)
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Operating income (loss).................................. 390 (1,346) 702 (8,168)
Other income (expense)................................... 4 150 4 146
Interest income (expense), net........................... (34) (172) (211) (431)
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Income (loss) from continuing operations
before provision for income taxes...................... 360 (1,368) 495 (8,453)
Provision for income taxes............................... 3 - (21) -
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Net income (loss) from continuing operations............. 363 (1,368) 474 (8,453)
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Net recovery (loss) from discontinued operations......... - (147) 37 220
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Net income (loss)........................................ 363 (1,515) 511 (8,233)
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Dividends to preferred and certain common shareholders... 58 492 318 1,108
Net income (loss) from continuing operations
attributable to common shareholders.................... 305 (1,860) 156 (9,561)
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Income (loss) per share:
Continuing operations.................................. 0.03 (0.21) 0.02 (1.16)
Discontinued operations................................ - (0.02) - 0.03
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Net income (loss) per share.............................. 0.03 (0.23) 0.02 (1.13)
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Weighted average common and common
equivalent shares outstanding......................... 11,370 8,714 10,458 8,277
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