United States
Securities and Exchange Commission
Washington, D.C. 20549
Form 10-Q/A
(Mark One)
[X] Quarterly Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the quarterly period ended March 30, 1996
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 33-75706; 01, 02, 03
BPC Holding Corporation
Berry Plastics Corporation
Berry Iowa Corporation
Berry Tri-Plas Corporation
(Exact name of registrant as specified in its charter)
Delaware 35-1814673
(State or other jurisdiction of incorporation or organization)
(I.R.S. employer identification no.)
101 Oakley Street, Evansville, Indiana 47710
(Address of principal executive offices) (Zip Code)
Registrant's telephone number,including area code: (812) 424-2904
None
(Former name, former address and former fiscal year, if changed
since last report)
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.
[X] Yes [ ] No
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date:
Number of Shares Outstanding
Common Stock as of March 30, 1996
Class A - $.00005 Par Value 1,326,220
Class B - $.00005 Par Value 355,940
<PAGE>
BPC Holding Corporation and Subsidiaries
Form 10-Q Index
For Quarterly Period Ended March 30, 1996
Page No.
Part I. Financial Information
Item 1. Financial Statements
Consolidated Balance Sheets _______________ 3
Consolidated Statements of Operations _____ 5
Consolidated Statements of Cash Flows ______ 6
Notes to Consolidated Financial Statements____ 7
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations__ 10
Part II Other Information
Item 6. Exhibits and Reports on Form 8-K _____________ 12
Signature ____________________________________________________ 13
<PAGE>
<TABLE>
Part 1. Financial Information
Item 1. Financial Statements
BPC Holding Corporation and Subsidiaries
Consolidated Balance Sheets
(In Thousands of Dollars)
<CAPTION>
March 30, December 30,
1996 1995
(Unaudited)
<S> <C> <C>
Assets
Current assets:
Cash and cash equivalents $ 5,047 $ 8,035
Accounts receivable (less allowance
for doubtful accounts of $749 and $737) 18,334 15,944
Inventories:
Finished goods 10,234 7,743
Raw materials and supplies 3,228 3,897
Custom molds 490 257
13,952 11,897
Prepaid expenses and other receivables 1,200 1,593
Income taxes recoverable 147 411
Total current assets 38,680 37,880
Property and equipment:
Land 4,285 3,882
Buildings and improvements 15,748 15,712
Machinery, equipment and tooling 72,477 68,801
Automobiles and trucks 515 496
Construction in progress 3,081 4,094
96,106 92,985
Less accumulated depreciation 42,986 40,544
53,120 52,441
Intangible assets:
Deferred financing and origination
fees (net of accumulated amortization
of $1,765 and $1,555) 5,752 5,962
Patents (net of accumulated
amortization of $2 and $0) 137 139
Excess of cost over net assets
acquired (net of accumulated
amortization of $513 and $425) 4,813 4,782
Covenants not to compete (net of
accumulated amortization of $35 and $27) 65 73
10,767 10,956
Deferred income taxes 1,928 2,056
Other 166 132
Total assets $104,661 $103,465
<PAGE>
BPC Holding Corporation and Subsidiaries
Consolidated Balance Sheets (continued)
(In Thousands of Dollars)
March 30, December 30,
1996 1995
(Unaudited)
Liabilities and stockholders' equity (deficit)
Current liabilities:
Accounts payable $ 11,550 $ 14,074
Accrued expenses and other liabilities 2,790 2,807
Accrued interest 5,705 2,652
Employee compensation and payroll
taxes 4,505 4,618
Current portion of long-term debt 722 717
Total current liabilities 25,272 24,868
Long-term debt, less current portion 110,924 110,959
Deferred compensation 122 122
Total liabilities 136,318 135,949
Stockholders' equity (deficit):
Preferred stock; $.001 par value; authorized -
100,000 shares; none issued _ _
Class A Common Stock; $.00005 par value:
Authorized: 3,000,000 shares
Issued: 1,331,432 shares _ _
Class B Common Stock; $.00005 par value:
Authorized: 1,000,000 shares
Issued: 355,940 shares _ _
Class A treasury stock: 5,212 shares (58) (58)
Additional paid-in capital - 959
Warrants 13,433 4,034
Retained earnings (deficit) (45,032) (37,419)
Total stockholders' equity (deficit) (31,657) (32,484)
Total liabilities and stockholders'
equity (deficit) $104,661 $103,465
<FN>
See notes to consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
BPC Holding Corporation and Subsidiaries
Consolidated Statements of Operations
(In Thousands of Dollars, Except Per Share Data)
<CAPTION>
Thirteen Weeks Ended
March 30, April 1,
1996 1995
(Unaudited)
<S> <C> <C>
Net sales $34,996 $32,694
Cost of goods sold 25,119 22,542
Gross margin 9,877 10,152
Operating expenses:
Selling 1,672 1,370
General and administrative 3,187 2,356
Research and development 207 176
Amortization of intangibles 99 198
Operating income 4,712 6,052
Other expenses:
Gain on disposal of property and
equipment (42) (7)
Other 336 422
Income before interest and income taxes 4,418 5,637
Interest:
Expense (3,448) (3,545)
Income 68 239
Income before income taxes 1,038 2,331
Income taxes 397 5
Net income $ 641 $ 2,326
Earnings per share:
Earnings per common and common equivalent share:
Net income $ .31 $ 1.11
Earnings per common share - assuming full dilution:
Net income $ .30 $ 1.11
<FN>
See notes to consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
BPC Holding Corporation and Subsidiaries
Consolidated Statements of Cash Flows
(In Thousands of Dollars)
Thirteen Weeks Ended
March 30, April 1,
1996 1995
<S> <C> <C> <C> <C>
(Unaudited)
Operating activities
Net income $ 641 $ 2,326
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation and amortization 2,589 2,185
Non-cash interest expense 232 223
Write-off of deferred acquisition costs _ 390
Non-cash compensation _ 5
Gain on sale of property and
equipment (42) (7)
Deferred income taxes 128 (229)
Changes in operating assets and liabilities:
Accounts receivable, net (2,408) (4,256)
Inventories (2,055) (888)
Prepaid expenses and other
receivables 657 (327)
Accounts payable and accrued
expenses 273 2,969
Other assets (5) (10)
Net cash provided by operating activities 10 2,381
Investing activities
Additions to property and equipment (2,482) (1,893)
Proceeds from disposal of property and
equipment 42 11
Purchase of assets of Sterling Products,
Inc., net of cash acquired - (7,246)
Purchase of the Alpha drink cup product line (625) -
Acquisition costs (66) (328)
Net cash used for investing activities (3,131) (9,456)
Financing activities
Exercise of management stock options 185 _
Reclassification of cash held for
acquisition - 12,000
Payments on capital lease (52) (46)
Net cash provided by financing
activities 133 11,954
Net increase (decrease) in cash and
cash equivalents (2,988) 4,879
Cash and cash equivalents at beginning
of period 8,035 9,327
Cash and cash equivalents at end of
period $ 5,047 $ 14,206
<FN>
See notes to consolidated financial statements.
</TABLE>
<PAGE>
BPC Holding Corporation and Subsidiaries
Notes to Consolidated Financial Statements
(Unaudited)
1. Basis of Presentation
The accompanying unaudited consolidated financial statements of BPC
Holding Corporation and its subsidiaries (the "Company") have been
prepared in accordance with generally accepted accounting
principles for interim financial information and with the
instructions for Form 10-Q and Article 10 of Regulation S-X.
Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for
complete financial statements. In the opinion of management, all
adjustments (consisting of normal recurring accruals) considered
necessary for a fair presentation have been included. Operating
results for the periods presented are not necessarily indicative of
the results that may be expected for the full fiscal year. The
accompanying financial statements include the results of the
Company's wholly-owned subsidiary, Berry Plastics Corporation
("Berry"), and its wholly-owned subsidiaries: Berry Iowa
Corporation; Berry Tri-Plas Corporation; and Berry Sterling
Corporation. For further information, refer to the consolidated
financial statements and footnotes thereto included in the
Company's Form 10-K filed with the Securities and Exchange
Commission for the year ended December 30, 1995.
2. Acquisitions
On March 10, 1995, the Company acquired (the "Sterling
Acquisition") through its newly-formed subsidiary, Berry Sterling
Corporation, substantially all of the assets and assumed certain
liabilities of Sterling Products, Inc. for a purchase price of
$7,300,000. The operations of Berry Sterling Corporation are
included in the Company's operations since the acquisition date
using the purchase method of accounting.
On December 21, 1995, the Company acquired (the "Tri-Plas
Acquisition") substantially all of the assets and assumed certain
liabilities of Tri-Plas, Inc. through its subsidiary Berry Tri-Plas
Corporation (formerly Berry-CPI Plastics Corp.) for $6,600,000.
The operations of Berry Tri-Plas Corporation are included in the
Company's operations since the acquisition date using the purchase
method of accounting.
On January 23, 1996, the Company purchased the assets relating to
the plastic drink cup line and decorating equipment of Alpha
Products, Inc., a subsidiary of Aladdin Industries, Inc. for
$625,000. The addition of these assets compliments the drink cup
product line acquired in the Sterling Acquisition.
<PAGE>
BPC Holding Corporation and Subsidiaries
Notes to Consolidated Financial Statements (continued)
(Unaudited)
The pro forma results listed below are unaudited and reflect
purchase accounting adjustments assuming the Sterling Acquisition and
Tri-Plas Acquisition occurred on December 31, 1994.
April 1,
1995
(In thousands)
Net sales $ 37,622
Income before income taxes 1,767
Net income 1,762
Earnings per common share:
Primary .84
Fully diluted .84
The pro forma financial information is presented for informational
purposes only and is not necessarily indicative of the operating
results that would have occurred had the acquisitions been
consummated at the above date, nor are they necessarily indicative
of future operating results. Further, the information gathered on
the acquired companies is based upon unaudited internal financial
information and reflects only pro forma adjustments for additional
interest expense and amortization of the excess of the cost over
the underlying net assets acquired, net of the applicable income
tax effect.
3. Long-Term Debt
Long-term debt consists of the following:
March 30, December 30,
1996 1995
(In thousands)
12.25% Senior Subordinated Notes $100,000 $100,000
Nevada Industrial Revenue Bonds 6,000 6,000
Iowa Industrial Revenue Bonds 5,400 5,400
Capital lease obligation 950 1,002
Debt discount (704) (726)
111,646 111,676
Less current portion of long-term debt 722 717
$110,924 $110,959
As a result of the issuance of $100 million of Senior Subordinated
Notes (the "Notes") on April 21, 1994, the current portion of long
term debt is limited to a $.5 million repayment of the industrial
revenue bonds and the monthly principal payments related to a
capital lease obligation. The
<PAGE>
BPC Holding Corporation and Subsidiaries
Notes to Consolidated Financial Statements (continued)
(Unaudited)
Company also maintains a $28 million revolving line of credit with
Fleet Capital Corporation (by assignment from Shawmut Capital
Corporation, by assignment from Barclays Business Credit, Inc.).
As of March 30, 1996 approximately $12 million of this credit line
was used to provide a letter of credit for the outstanding
industrial revenue bonds. Based on the borrowing formula as of
March 30, 1996, the Company had approximately $16 million of
additional available credit under the Fleet Capital credit line.
4. Subsequent Event
On April 25, 1996, in connection with the patent infringement
lawsuit filed by Berry Sterling Corporation against Pescor
Plastics, Inc., the United States District Court for the Eastern
District of Virginia entered an order that held that Berry
Sterling's patent for the design of a drink cup was not valid. The
Company is currently consulting with its advisors concerning an
appeal of the order.
<PAGE>
Item 2.
BPC Holding Corporation and Subsidiaries
Management's Discussion and Analysis of Financial Condition and
Results of Operations
Results of Operations
13 Weeks Ended March 30, 1996 (the "Quarter")
Compared to 13 Weeks Ended April 1, 1995 (the "Prior Quarter")
Net Sales. Net sales increased $2.3 million, or 7%, to $35.0
million for the Quarter from $32.7 million for the Prior Quarter,
notwithstanding an approximate 10% decrease in net selling price
due mainly to the impact of cyclical adjustments in the price of
plastic resin. The increase in net sales was attributed to a
combination of higher drink cup sales of $1.3 million and higher
container sales of $1.4 million (including the introduction of
polypropylene containers from the Tri-Plas Acquisition). Sales of
custom manufactured tools decreased $0.4 million.
Gross Margin. Gross margin decreased by $0.3 million to $9.9
million for the Quarter from $10.2 million for the Prior Quarter.
This decrease of 2.8% included the impact of negative inventory
valuation (due principally to changing raw material costs) and
start-up expenses associated with the transfer of the business
previously conducted by Tri-Plas, Inc. in its Ontario, California
facility to the Henderson plant.
Operation Expenses. Selling expenses increased by $0.3
million to $1.8 million for the Quarter from $1.5 million for the
Prior Quarter principally as a result of the addition of the drink
cup business and the Tri-Plas Acquisition. General and
administrative expenses increased by $0.8 million to $3.2 million
for the Quarter from $2.4 million for the Prior Quarter. The
Tri-Plas Acquisition and the Sterling Products Acquisition resulted
in additional expenses of $0.3 million, and patent and other
litigation expenses were $0.5 million.
Interest Expense. Interest expense decreased $0.1 million to
$3.4 million for the Quarter compared to $3.5 million for the Prior
Quarter.
Income Tax. For the Quarter, the Company had income tax
of $0.4 million which was determined using Federal and
state statutory income tax rates. There was minimal income tax for
the Prior Quarter due to the availability of loss carryforwards.
Net Income and EBITDA. Net income for the Quarter of
$0.6 million decreased $1.7 million from net income of $2.3 million
for the Prior Quarter for the reasons discussed above. EBITDA,
defined as income before taxes, interest, depreciation,
amortization, loss (gain) on disposal of property and equipment,
write-off of deferred acquisition costs and one-time transition
expenses related to the Sterling Products Acquisition and the Tri-Plas
Acquisition, was $7.3 for the Quarter compared to $8.2 million for the
Prior Quarter.
<PAGE>
Liquidity and Sources of Capital
Net cash provided from operating activities was $0.0 million
through the thirteen week period ended March 30, 1996, a decrease
of $2.4 million from the $2.4 million for the comparable prior year
period. Increased sales volume, a reduction of overdue accounts
payable assumed in connection with the Tri-Plas Acquisition and the
build-up of drink cup inventory for the peak summer season all
contributed to increasing working capital (defined as accounts
receivable, inventories, prepaid expenses, other receivables,
accounts payable and accrued expenses) by $3.5 million since 1995
year end. Working capital increased $2.5 million for the same
period in 1995.
Capital spending of $2.5 million included $1.0 million for molds
and molding machines, $0.5 for printing-related equipment, and $1.0
million for building and accessory equipment. Additionally, the
Company purchased the drink cup product line of Alpha Products,
Inc. (see Note 2). The Company currently intends to finance capital
spending through cash flow from operations, existing cash balances
and cash available under the Fleet revolving credit agreement.
At March 30, 1996, the Company's cash balance was $5.0 million, and
the Company had unused borrowing capacity under the Revolving Credit
Facility's borrowing base of approximately $16 million.
<PAGE>
Part II. Other Information
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits:
11.01 Computation of Per Share Earnings
(b) Reports on Form 8-K:
No reports on Form 8-K were filed by the Company
during the quarter ended March 30, 1996.
<PAGE>
SIGNATURE
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.
BPC Holding Corporation
Berry Plastics Corporation
Berry Iowa Corporation
Berry Tri-Plas Corporation
May 13, 1996
James M. Kratochvil
Vice President, Chief Financial
Officer and Secretary of BPC Holding
Corporation and its Subsidiaries
(Principal Financial Officer)
<PAGE>
<TABLE>
Exhibit 11.01.
COMPUTATION OF PER SHARE EARNINGS
<CAPTION>
Thirteen Weeks
Ended
March 30, April 1,
1996 1995
<S> <C> <C> <C>
Net income $ 640,402 $2,325,992
Primary earnings per share:
Average number of common shares
outstanding at quarter-end 1,663,408 1,659,408
Net additional common shares
in respect to common stock
equivalents based on the
Modified Treasury Stock
method using average market
price 435,808 437,709
Total primary shares and
equivalents 2,099,216 2,097,117
Net income per
per primary share $ .31 1.11
Fully-diluted earnings per share:
Average number of common share
outstanding at quarter-end 1,663,408 1,659,408
Net additional common shares
in respect to common stock
equivalents based on the
Modified Treasury Stock
method using higher of
average market or last price 487,274 437,709
Total shares and equivalents 2,150,683 2,097,117
Net income per fully-
diluted shares $ .30 $ 1.11
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-28-1996
<PERIOD-END> MAR-30-1996
<CASH> 5047
<SECURITIES> 0
<RECEIVABLES> 19083
<ALLOWANCES> (749)
<INVENTORY> 13952
<CURRENT-ASSETS> 38680
<PP&E> 96106
<DEPRECIATION> (42986)
<TOTAL-ASSETS> 104661
<CURRENT-LIABILITIES> 25272
<BONDS> 111400
0
0
<COMMON> (58)
<OTHER-SE> (31599)
<TOTAL-LIABILITY-AND-EQUITY> 104661
<SALES> 34996
<TOTAL-REVENUES> 0
<CGS> 25119
<TOTAL-COSTS> 30284
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 147
<INTEREST-EXPENSE> 3448
<INCOME-PRETAX> 1038
<INCOME-TAX> 397
<INCOME-CONTINUING> 641
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 641
<EPS-PRIMARY> .31
<EPS-DILUTED> .30
</TABLE>
