SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 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) AUGUST 29, 1997
BPC Holding Corporation
(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)
Delaware 33-75706-01 35-1814673
(STATE OR OTHER JURISDICTION (COMMISSION (IRS EMPLOYER
OF INCORPORATION) FILE NUMBER) 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
(FORMER NAME OR FORMER ADDRESS, IF CHANGED SINCE LAST REPORT)
<PAGE>
AMENDMENT NO. 1
The undersigned registrant hereby amends the following items, financial
statements, exhibits or other portions of its Current Report on Form 8-K, Date
of Report August 29, 1997, and filed September 15, 1997, as set forth in the
pages attached hereto:
ITEM 7 (A) FINANCIAL STATEMENTS OF BUSINESS ACQUIRED
Audited Consolidated Financial Statements of Venture Packaging, Inc. for
the years ended September 30, 1996 and 1995:
Independent Auditors' Report of Deloitte & Touche LLP
Consolidated Balance Sheets
Consolidated Statements of Operations and Retained Earnings
Consolidated Statements of Cash Flows
Notes to Consolidated Financial Statements
Unaudited Consolidated Financial Statements of Venture Packaging, Inc. as
of August 29, 1997 and for the period from October 1, 1996 to August
29, 1997:
Consolidated Balance Sheet
Consolidated Statement of Operations and Retained Earnings
Consolidated Statement of Cash Flows
Note to Consolidated Financial Statements
ITEM 7 (B) PRO FORMA FINANCIAL INFORMATION
Pro Forma Unaudited Condensed Consolidated Financial Statements of BPC
Holding Corporation:
Pro Forma Unaudited Condensed Consolidated Balance Sheet as of June
28, 1997
Notes to Pro Forma Unaudited Condensed Consolidated Balance Sheet as
of June 28, 1997
Pro Forma Unaudited Condensed Consolidated Statement of Operations
for the year ended December 28, 1996
Notes to Pro Forma Unaudited Condensed Consolidated Statement of
Operations for the year ended December 28, 1996
Pro Forma Unaudited Condensed Consolidated Statement of Operations
for the six months ended June 28, 1997
Notes to Pro Forma Unaudited Condensed Consolidated Statement of
Operations for the six months ended June 28, 1997
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this amendment to be signed on its behalf by the
undersigned, thereunto duly authorized.
BPC HOLDING CORPORATION
By: /S/ JAMES M. KRATOCHVIL
James M. Kratochvil
Vice President, Chief Financial Officer and Secretary
Dated: November 14, 1997
<PAGE>
VENTURE PACKAGING, INC.
Consolidated Financial Statements
for the Years Ended
SEPTEMBER 30, 1996 AND 1995
AND INDEPENDENT AUDITORS' REPORT
INDEPENDENT AUDITORS' REPORT
To the Shareholders and Board of Directors
Venture Packaging, Inc.
Monroeville, Ohio
We have audited the accompanying consolidated balance sheets of Venture
Packaging, Inc. as of September 30, 1996 and 1995, and the related consolidated
statements of operations and retained earnings, and of cash flows for the years
then ended. 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 in accordance with generally accepted auditing
standards. Those standards 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. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, such consolidated financial statements present fairly, in all
material respects, the financial position of the Company at September 30, 1996
and 1995, and the results of its operations and its cash flows for the years
then ended in conformity with generally accepted accounting principles.
/S/ DELOITTE & TOUCHE LLP
Cleveland, Ohio
November 18, 1996
<PAGE>
VENTURE PACKAGING, INC.
CONSOLIDATED BALANCE SHEETS
SEPTEMBER 30, 1996 AND 1995
- ----------------------------
<TABLE>
<CAPTION>
ASSETS 1996 1995
------------- -------------
<S> <C> <C>
CURRENT ASSETS:
Cash $ 567,404 $ 184,317
Receivables - net 4,654,981 5,468,229
Inventories 8,693,353 6,613,464
Deferred income taxes 147,777 159,208
Other current assets 316,377 619,595
------------- -------------
Total current assets 14,379,892 13,044,813
------------- -------------
PROPERTY:
Land and improvements 2,106,242 2,043,868
Buildings and improvements 5,301,226 5,273,751
Machinery and equipment 39,115,191 36,477,193
Office furniture and fixtures 1,391,506 1,183,548
Vehicles 325,202 331,461
------------- -------------
Total 48,239,367 45,309,821
Less accumulated depreciation (27,990,408) (24,852,783)
------------- -------------
Property - net 20,248,959 20,457,038
------------- -------------
RESTRICTED INVESTMENTS 1,244,996 2,223,603
DEPOSTIS AND OTHER ASSETS 505,042 619,720
------------- -------------
TOTAL $36,378,889 $36,345,174
============= =============
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Short-term debt $8,955,400 $6,801,552
Current portion of long-term debt 892,148 892,148
Trade accounts payable 2,902,476 3,064,472
Accrued liabilities 868,103 1,189,192
------------- -------------
Total current liabilities 13,618,127 11,947,364
LONG-TERM DEBT, LESS CURRENT PORTION 10,384,278 11,332,852
DEFERRED INCOME TAXES 2,126,654 1,843,734
DEFERRED REVENUE 822,468 875,000
------------- -------------
Total liabilities 26,951,527 25,998,950
SHAREHOLDERS' EQUITY:
Capital stock, stated value $100 per share:
authorized - 1,000 shares;
issued and outstanding - 227.715
and 227.965 shares,respectively 22,772 22,797
Additional paid-in capital 10,521 10,616
Retained earnings 9,394,069 10,312,811
------------- -------------
Total shareholders' equity 9,427,362 10,346,224
------------- -------------
TOTAL $36,378,889 $36,345,174
============= =============
</TABLE>
See notes to consolidated financial statements.
<PAGE>
VENTURE PACKAGING, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS AND RETAINED EARNINGS
YEARS ENDED SEPTEMBER 30, 1996 AND 1995
- ------------------------------------------------------------
<TABLE>
<CAPTION>
1996 1995
------------- -------------
<S> <C> <C>
REVENUES:
Net sales $42,262,349 $41,800,788
Other 944,579 861,155
------------- -------------
Total revenues 43,206,928 42,661,943
COST AND EXPENSES:
Cost of sales 37,747,768 36,108,439
Selling, general and administrative 5,509,215 4,931,505
Interest 1,244,576 849,945
------------- -------------
Total cost and expenses 44,501,559 41,889,889
------------- -------------
INCOME (LOSS) BEFORE INCOME TAXES (1,294,631) 772,054
------------- -------------
PROVISION (BENEFIT) FOR INCOME TAXES:
Federal (447,619) 210,398
State and local 31,600 83,616
------------- -------------
Total provision (benefit) for income taxes (416,019) 294,014
NET INCOME (LOSS) (878,612) 478,040
CASH DIVIDENDS (22,797) (22,846)
CAPITAL STOCK PURCHASED AND RETIRED (17,333) (33,169)
RETAINED EARNINGS, BEGINNING OF YEAR 10,312,811 9,890,786
------------- -------------
RETAINED EARNINGS, END OF YEAR $ 9,394,069 $10,312,811
============= =============
NET INCOME (LOSS) PER SHARE $ (3,857) $ 2,096
============= =============
</TABLE>
See notes to consolidated financial statements.
<PAGE>
VENTURE PACKAGING, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
YEARS ENDED SEPTEMBER 30, 1996 AND 1995
- ----------------------------------------
<TABLE>
<CAPTION>
1996 1995
------------- -------------
<S> <C> <C> <C>
OPERATING ACTIVITIES:
Net income (loss) $ (878,612) $ 478,040
Adjustments to reconcile net income (loss)
to net cash provided from operating activities:
Depreciation 3,168,730 2,545,363
Deferred income taxes 294,351 392,933
Loss on sale of machinery and equipment 31,541
Change in operating assets and liabilities:
Receivables 813,248 (1,515,871)
Inventories (2,079,889) (1,522,459)
Other assets 311,590 (604,354)
Trade accounts payable (161,996) 1,327,190
Accrued liabilities (321,089) 148,627
Deferred revenue (52,532) 875,000
------------- -------------
Total cash provided by operating activities 1,125,342 2,124,469
------------- -------------
INVESTING ACTIVITIES:
Capital expenditures (2,949,366) (11,394,621)
Net proceeds from (purchases of)
restricted investments 978,607 (2,223,603)
Proceeds from sale of machinery and equipment 42,953
Other - net 20,526 (20,761)
------------- -------------
Total cash used in investing activities (1,907,280) (13,638,985)
------------- -------------
FINANCING ACTIVITIES:
Net borrowings under line of credit agreement 2,153,848 3,954,585
Proceeds from long-term debt 8,325,000
Payments on long-term debt (948,574) (601,333)
Dividends paid (22,797) (22,846)
Purchase of capital stock (17,452) (33,409)
------------- -------------
Total cash provided by financing activities 1,165,025 11,621,997
------------- -------------
NET INCREASE IN CASH 383,087 107,481
CASH, BEGINNING OF YEAR 184,317 76,836
------------- -------------
CASH, END OF YEAR $ 567,404 $ 184,317
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the year for:
Interest $ 989,996 $ 741,183
------------- -------------
Income taxes $ 155,038 $ 192,889
------------- -------------
NONCASH INVESTING AND FINANCING ACTIVITIES:
Short-term borrowings refinanced as
long-term debt $3,900,000
-------------
</TABLE>
See notes to consolidated financial statements.
<PAGE>
VENTURE PACKAGING, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED SEPTEMBER 30, 1996 AND 1995
1. BUSINESS DESCRIPTION
Venture Packaging, Inc. (the "Company"), a Delaware corporation, is a
manufacturer of molded plastic products, primarily food storage containers.
The Company operates plants located in Monroeville, Ohio and Anderson,
South Carolina, and a printing and distribution facility in Chesapeake,
Virginia. The Company sells its products to customers nationwide, which
operate primarily in food processing industries.
To better align its corporate structure with its future growth plans,
Venture Packaging, Inc., an Ohio corporation, reincorporated in the state
of Delaware through an Agreement of Merger and Plan of Reorganization
effective October 1, 1995. The objective of the reincorporation was to
establish a Delaware holding company with two separate operating
subsidiaries for the Midwest and Southeast divisions.
To accomplish the corporate reorganization, Venture Packaging, Inc., an
Ohio corporation, formed the following subsidiaries: Venture Packaging
Southeast, Inc., a South Carolina corporation; Venture Packaging Midwest,
Inc., an Ohio corporation; and Venture Packaging, Inc., a Delaware
corporation. Effective October 1, 1995, substantially all of the Midwest
division assets were assigned to Venture Packaging Midwest, Inc., and
substantially all of the Southeast division assets were assigned to Venture
Packaging Southeast, Inc. Subsequently, Venture Packaging, Inc., the Ohio
corporation was merged with and into Venture Packaging, Inc., the Delaware
corporation.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
CONSOLIDATION - The consolidated financial statements include the accounts
of Venture Packaging, Inc. and its wholly-owned subsidiaries Venture
Packaging Southeast, Inc. and Venture Packaging Midwest, Inc. All
significant intercompany transactions and balances have been eliminated in
consolidation.
ESTIMATES - The preparation of the financial statements in conformity with
generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts 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 reporting period. Actual results could differ from
those estimates.
INVENTORIES - Inventories are stated at the lower of cost or market. Cost
is determined using the first-in, first-out (FIFO) method.
PROPERTY - Property is stated at cost. Depreciation is computed using the
straight-line method over the estimated useful lives of the assets.
Maintenance and repairs are charged to expense as incurred.
RESTRICTED INVESTMENTS - Restricted investments represent proceeds from
Industrial Development Bonds (see Note 5) invested in short-term
repurchase agreements, the use of which is restricted to certain capital
expenditures and related costs under the terms of the loan agreement.
DEFERRED REVENUE - Deferred revenue relates to government grant revenues
and is being amortized over ten years.
<PAGE>
NET INCOME PER SHARE - Net income per share has been computed by dividing
net income by the weighted average number of shares of capital stock
outstanding during the period.
3. RECEIVABLES
Receivables consist of the following:
<TABLE>
<CAPTION>
1996 1995
------------- -------------
<S> <C> <C>
Customer accounts $3,626,580 $4,174,511
Affiliate 161,037 78,915
Refundable income taxes 985,364 415,803
Government grants 975,000
Allowances (118,000) (176,000)
------------- -------------
Total $4,654,981 $5,468,229
============= =============
</TABLE>
Sales to the affiliated company totaled approximately $918,000 in fiscal
1996 and $877,000 in fiscal 1995.
4. INVENTORIES
Inventories consist of the following:
<TABLE>
<CAPTION>
1996 1995
------------- -------------
<S> <C> <C>
Raw Materials $2,841,583 $2,327,719
Finished product 5,545,807 4,072,232
Shipping supplies 305,963 213,513
------------- -------------
Total $8,693,353 $6,613,464
============= =============
</TABLE>
5. DEBT
Short-term debt of $8,955,400 and $6,801,552 at September 30, 1996 and 1995,
respectively, consists of amounts outstanding under a $10,000,000 line of
credit agreement which currently matures December 31, 1996. Interest is
payable monthly at a rate which approximates the bank's prime lending rate.
Long-term debt consists of:
<TABLE>
<CAPTION>
1996 1995
------------- -------------
<S> <C> <C>
Industrial Development Bonds $7,655,000 $8,325,000
Bank term loans 3,621,426 3,900,000
------------- -------------
Total long-term debt 11,276,426 12,225,000
Less current maturities 892,148 892,148
------------- -------------
Non-current portion $10,384,278 $11,332,852
============= =============
</TABLE>
<PAGE>
The Industrial Development Bonds are to be repaid in semi-annual
installments through April 1, 2010 with a final balloon payment of
$945,000. Interest is payable quarterly. The bonds have a variable
interest rate, which averaged 3.78% and 4.13% during fiscal 1996 and 1995,
respectively. The interest rate can not exceed 10%. The Company can make
an irrevocable election to convert the interest rate to a fixed rate. The
bondholders may redeem the bonds at their option while the bonds bear
interest at a variable rate; however, the bonds are classified as non-
current due to a remarketing agreement and credit facilities, which permit
the Company to extend the payment for several years. The Company also has
the option to call the bonds.
The bank term loans are to be repaid in equal monthly installments of
principal plus interest. Interest is payable monthly at the bank's prime
lending rate.
The total aggregate principal payments applicable to all long-term debt at
September 30, 1996 is due as follows:
<TABLE>
<CAPTION>
<S> <C>
1997 $ 892,148
1998 1,227,148
1999 1,227,148
2000 1,227,148
2001 1,227,148
Thereafter 5,475,686
-------------
Total $11,276,426
=============
</TABLE>
The credit agreements require, among other things, the maintenance of
minimum tangible net worth, a maximum debt to tangible net worth ratio, a
minimum debt service coverage ratio, and a fixed charge coverage ratio.
The agreements also limit other secured borrowings and the annual amount of
capital expenditures and dividends. The credit agreements are secured by
accounts receivable, inventories, and certain equipment, land and
buildings.
6. INCOME TAXES
The provision (benefit) for income taxes consist of the following:
<TABLE>
<CAPTION>
1996 1995
------------ ----------
<S> <C> <C>
Current provision (benefit) $(710,370) $(98,919)
Deferred provision 294,351 392,933
------------ ----------
Total $(416,019) $294,014
============ ==========
</TABLE>
A reconciliation between the federal statutory income tax rate and the
Company's effective tax rate is as follows:
<TABLE>
<CAPTION>
1996 1995
------------ ----------
<S> <C> <C>
Statutory tax rate (34.0)% 34.0%
Effects of:
State and local income taxes 1.6 7.1
Other 0.3 (3.0)
------------ ----------
Effective tax rate (32.1)% 38.1%
============ ==========
</TABLE>
<PAGE>
The components of the net deferred income tax liability consist of the
following:
<TABLE>
<CAPTION>
1996 1995
------------- -------------
<S> <C> <C>
Tax depreciation in excess of book $(2,262,352) $(1,943,974)
Reserves and accruals not currently deductible 82,451 128,297
Net operating loss and credit carryforwards 537,156 95,237
Other - net 13,868 35,914
Valuation allowance (350,000)
------------- -------------
Net deferred tax liability $(1,978,877) $(1,684,526)
------------- -------------
</TABLE>
7. LEASES
The Company leases certain equipment and warehouse facilities under operating
leases. Certain of the operating leases contain renewal options at the end
of the initial lease term. Future minimum rental payments under leases
with initial or remaining noncancellable lease terms in excess of one year
consisted of the following at September 30, 1996:
<TABLE>
<CAPTION>
FISCAL YEAR ENDING
SEPTEMBER 30, AMOUNT
<S> <C>
1997 $ 716,680
1998 714,920
1999 704,139
2000 587,594
2001 556,208
Thereafter 554,357
-------------
Total $3,833,898
=============
</TABLE>
Total rent expense under operating leases was approximately $926,000 in
fiscal 1996 and $533,000 in fiscal 1995.
8. FAIR VALUE OF FINANCIAL INSTRUMENTS
The carrying value of cash, receivables, restricted investments, deposits,
accounts payable, accrued expenses, short term debt and long term debt are
reasonable estimates of their fair value. The fair value of the industrial
development bonds was measured using a tax free interest rate.
<PAGE>
VENTURE PACKAGING, INC.
CONSOLIDATED BALANCE SHEET
(UNAUDITED)
AUGUST 29, 1997
<TABLE>
<CAPTION>
ASSETS
<S> <C>
Current assets:
Cash $ 656,944
Receivables, net 4,986,292
Inventories 9,116,879
Deferred income taxes 336,799
Other current assets 243,677
-------------
Total current assets 15,340,591
Property and equipment:
Land and improvements 2,116,443
Buildings and improvements 5,420,296
Machinery and equipment 41,559,038
Office furniture and fixtures 1,456,660
Vehicles 325,887
-------------
50,878,324
Less accumulated depreciation (31,190,092)
-------------
Property, net 19,688,232
Restricted investments 805,950
Deposits and other assets 1,248,225
-------------
$37,082,998
=============
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
LIABILITIES AND STOCKHOLDERS' EQUITY
<S> <C>
Current liabilities:
Short-term debt $ 7,969,925
Current portion of long-term debt 1,640,302
Trade accounts payable 3,412,919
Accrued liabilities 1,103,949
-------------
Total current liabilities 14,127,095
Long-term debt, less current portion 11,423,059
Deferred income taxes 2,023,151
Deferred revenue 722,004
-------------
Total liabilities 28,295,309
Stockholders' equity:
Capital stock, $100 stated value per share:
Authorized: 1,000 shares
Outstanding: 227.47 shares 22,747
Additional paid-in capital 10,426
Retained earnings 8,754,516
-------------
Total stockholders' equity 8,787,689
-------------
$ 37,082,998
=============
</TABLE>
SEE ACCOMPANYING NOTE.
<PAGE>
VENTURE PACKAGING, INC.
CONSOLIDATED STATEMENT OF OPERATIONS AND RETAINED EARNINGS
(UNAUDITED)
FOR THE PERIOD FROM OCTOBER 1, 1996 TO AUGUST 29, 1997
<TABLE>
<CAPTION>
Revenue:
<S> <C>
Net sales $ 43,175,443
Other 859,032
-------------
Total revenues 44,034,475
Costs and expenses:
Cost of sales 38,258,849
Selling, general and administrative 5,468,503
Interest 1,223,401
-------------
Total cost and expenses 44,950,753
Loss before income tax benefit (916,278)
Income tax benefit (292,524)
-------------
Net loss (623,754)
Capital stock purchased and retired (15,799)
Retained earnings, beginning of period 9,394,069
-------------
Retained earnings, end of period $ 8,754,516
=============
</TABLE>
SEE ACCOMPANYING NOTE.
<PAGE>
VENTURE PACKAGING, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
(UNAUDITED)
FOR THE PERIOD FROM OCTOBER 1, 1996 TO AUGUST 29, 1997
<TABLE>
<CAPTION>
OPERATING ACTIVITIES
<S> <C>
Net loss $ (623,754)
Adjustments to reconcile net loss to net
cash provided by operating activities:
Depreciation 3,247,875
Loss on sale of machinery and equipment 4,720
Deferred income taxes (292,525)
Changes in operating assets and liabilities:
Accounts receivable (331,311)
Inventories (423,526)
Other assets (670,483)
Trade accounts payable 510,443
Accrued liabilities 235,846
Deferred revenue (100,464)
-------------
Net cash provided by operating activities 1,556,821
INVESTING ACTIVITIES
Capital expenditures (2,713,854)
Net proceeds from restricted investments 439,046
Proceeds from sale of machinery and equipment 21,986
-------------
Net cash used by investing activities (2,252,822)
FINANCING ACTIVITIES
Net payments under line of credit agreement (985,475)
Proceeds from long-term debt 2,702,000
Payments on long-term debt (915,065)
Purchase of capital stock (15,919)
-------------
Net cash provided by financing activities 785,541
-------------
Net increase in cash 89,540
Cash at beginning of period 567,404
-------------
Cash at end of period $ 656,944
=============
</TABLE>
SEE ACCOMPANYING NOTE.
<PAGE>
VENTURE PACKAGING, INC.
NOTE TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
AS OF AUGUST 29, 1997 AND FOR THE PERIOD FROM OCTOBER 1, 1996 TO AUGUST 29,
1997
The unaudited consolidated financial statements of Venture Packaging, Inc. as
of August 29, 1997 and for the period from October 1, 1996 to August 29, 1997
have been prepared in accordance with generally accepted accounting principles
for interim financial information. 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 considered necessary for a fair presentation have been included.
Operating results for the period presented are not necessarily indicative of
the results that may be expected for the full fiscal year. These statements
should be read in conjunction with the audited consolidated financial
statements of Venture Packaging, Inc. for the years ended September 30, 1996
and 1995 included in this Form 8-K/A.
Comparative consolidated financial statements as of August 29, 1996 and for the
period from October 1, 1995 to August 29, 1996 have not been presented as these
statements were not available.
Venture Packaging, Inc. was purchased by Berry Plastics Corporation in a
transaction which was consummated on August 29, 1997.
<PAGE>
BPC HOLDING CORPORATION
PRO FORMA UNAUDITED CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS)
The following unaudited pro forma condensed consolidated balance sheet and pro
forma condensed consolidated statements of operations (collectively, the "Pro
Forma Statements") give effect to the purchase of the outstanding common stock
of Venture Packaging, Inc. ("Venture Packaging") and PackerWare Corporation
("PackerWare") by Berry Plastics Corporation ("Berry"). Berry is a wholly
owned subsidiary of BPC Holding Corporation ("Holding").
The pro forma information is based on the historical consolidated financial
statements of Holding, the historical financial statements of Venture Packaging
and the historical financial statements of PackerWare, giving effect to the
acquisitions using the purchase method of accounting and the assumptions and
adjustments in the accompanying notes to the pro forma condensed consolidated
financial statements. The pro forma condensed balance sheet gives effect to
the acquisitions as if they had occurred on June 28, 1997 and the condensed
statements of operations give effect to the acquisitions as if they had
occurred on December 31, 1995. There are no pro forma condensed balance sheet
adjustments as of June 28, 1997 for the acquisition of PackerWare as these
adjustments are reflected in Holding's historical balances as of June 28, 1997.
There are no pro forma condensed consolidated statement of operations
adjustments for the six months ended June 28, 1997 for the acquisition of
PackerWare as the operations of PackerWare are included in Holding's historical
balances from January 22, 1997 through June 28, 1997. PackerWare's operations
from December 29, 1996 through January 21, 1997 (the date of the PackerWare
acquisition)have been determined to be immaterial by management.
The Pro Forma Statements do not purport to represent what Holding's
consolidated financial position or results of operations would actually have
been if such transactions had in fact occurred on such dates or to project
Holding's consolidated financial position or results of operations for any
future date or period. The pro forma adjustments are based upon available
information and upon assumptions that management believes to be reasonable. The
Pro Forma Statements and accompanying notes should be read in conjunction with
the historical consolidated financial statements and related notes of Holding
included within its Annual Report on Form 10-K for the year ended December 28,
1996, with the unaudited historical consolidated financial statements and
related notes of Holding included within its periodic reports on Form 10Q for
the year ending December 27, 1997, with the audited consolidated financial
statements and related notes of Venture Packaging for the years ended September
30, 1996 and 1995 and the unaudited consolidated financial statements as of
August 29, 1997 and for the period from October 1, 1996 to August 29, 1997
included in this Form 8-K/A, and with Form 8-K/A filed on April 7, 1997 which
provides similar information related to the acquisition of PackerWare.
<PAGE>
BPC HOLDING CORPORATION
PRO FORMA UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEET
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
JUNE 28, 1997
--------------------------------------------------------------------------------
VENTURE
HOLDING PACKAGING PRO FORMA CONSOLIDATED
HISTORICAL HISTORICAL ADJUSTMENTS PRO FORMA<S>
---------------- --------------- --------------- -------------
ASSETS (UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C>
Current assets
Cash and cash equivalents $ 1,501 $ 657 $ - $ 2,158
Accounts receivable 30,870 4,986 (92) (a) 35,764
Inventories 21,482 9,117 (848) (a) 29,751
Other current assets 1,554 581 - 2,135
----------- ---------- --------- -----------
Total current assets 55,407 15,341 (940) 69,808
Assets held in trust 24,729 - - 24,729
Property and equipment, net 81,852 19,688 6,280 (b) 107,820
Intangible assets, net 24,285 - 19,321 (b) 45,606
2,000 (c)
Restricted investments - 806 - 806
Other assets 2,100 1,248 (403) (a) 3,546
601 (a)
Total assets $188,373 $37,083 $26,859 $252,315
=========== ========== ========= ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $16,229 $ 3,413 $ - $ 19,642
Accrued expenses 14,159 1,039 238 (a) 17,836
2,000 (c)
400 (c)
Accrued interest 3,336 65 (43) (d) 3,358
Short-term debt - 7,970 (7,970) (d) -
Current portion of long-term debt 5,120 1,640 (970) (d) 6,978
1,188 (e)
----------- ---------- --------- -----------
Total current liabilities 38,844 14,127 (5,157) 47,814
Long-term debt:
Holding 12.50% Senior Secured Notes 105,000 - - 105,000
Berry 12.25% Senior Subordinated Notes 100,000 - - 100,000
Term loans 26,859 4,773 27,112 (e) 53,971
(4,773) (d)
Industrial Revenue Bonds 9,900 6,650 - 16,550
Revolving line of credit 8,827 - 10,975 (e) 19,802
Capital lease obligation 420 - - 420
Debt discount (595) - - (595)
----------- ---------- --------- -----------
Total long-term debt 250,411 11,423 33,314 295,148
Other liabilities 2,163 2,745 2,490 (b) 7,398
----------- ---------- --------- -----------
Total liabilities 291,418 28,295 30,647 350,360
Stockholders' equity (deficit):
Common stock and additional paid-in capital 50,639 33 (33) (f) 50,639
Preferred stock 11,362 - 5,000 (g) 16,362
Treasury stock (22) - - (22)
Warrants 3,511 - - 3,511
Retained earnings (deficit) (168,535) 8,755 (8,755) (f) (168,535)
----------- ---------- --------- -----------
Total stockholders' equity (deficit) (103,045) 8,788 (3,788) (98,045)
----------- ---------- --------- -----------
Total liabilities and stockholders'
equity (deficit) $188,373 $37,083 $26,859 $252,315
=========== ========== ========== ===========
</TABLE>
SEE ACCOMPANYING NOTES.
<PAGE>
BPC HOLDING CORPORATION
NOTES TO PRO FORMA UNAUDITED CONDENSED
CONSOLIDATED BALANCE SHEET
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
The historical balance sheet presented for Holding is as of June 28, 1997, and the historical balance sheet presented for
Venture Packaging is as of August 29, 1997 (the acquisition date). The following adjustments reflect the acquisition of
the common stock of Venture Packaging and the repayment of the outstanding debt of Venture Packaging on a pro forma basis
using proceeds from Berry's revolving credit facility. The pro forma allocations to the assets acquired and liabilities
assumed have been made using estimates by management and may be adjusted to reflect fair values subsequently established as
a result of appraisals by a qualified appraiser. The amount allocated to cost in excess of assets acquired may be
subsequently adjusted to reflect such appraisals, but any such adjustment is not expected to be material. The cost in excess
of net assets acquired will be amortized by the straight-line method over a period of 15 years.
(a) Adjustments of certain assets and liabilities purchased:
<S> <C>
Increase of allowance for doubtful accounts $ (92)
Increase in inventory reserves (848)
Write-off of deposits (403)
Reserve for income tax audits (238)
Deferred income taxes on adjustments to certain assets and liabilities purchased 601
----------
$ (980)
==========
(b) Adjustments for assumed fair values of assets and liabilities of Venture Packaging:
Increase of property and equipment to estimated fair value $ 6,280
Allocation of excess of purchase price over net assets acquired to intangible assets 19,321
Deferred income taxes on the step-up to estimated fair value of property and equipment (2,490)
----------
$ 23,111
==========
(c) Other assets and liabilities resulting from purchase:
Intangible asset for not-to-compete agreement $ 2,000
Accrued liability for not-to-compete agreement (2,000)
Accrued transaction costs (400)
----------
$ (400)
==========
(d) Repayment of Venture Packaging debt:
Short-term debt $7,970
Current portion of long-term debt 970
Term loans 4,773
Accrued interest 43
----------
$ 13,756
==========
(e) Borrowings for payment of purchase price and transaction costs:
Proceeds from term loans, net of current portion $(27,112)
Proceeds from revolving line of credit (10,975)
Current portion of term loan borrowing (1,188)
----------
$(39,275)
==========
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
(f) Elimination of Venture Packaging's stockholders' equity:
<S> <C>
Common stock and additional paid-in capital $ 33
Retained earnings 8,755
----------
$ 8,788
==========
(g) Issuance of equity for purchase price:
Preferred stock $(5,000)
==========
</TABLE>
<PAGE>
BPC HOLDING CORPORATION
PRO FORMA UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
FISCAL 1996
----------------------------------------------------------------------------------------
VENTURE
HOLDING PACKAGING PACKERWARE PRO FORMA CONSOLIDATED
HISTORICAL HISTORICAL HISTORICAL ADJUSTMENTS PRO FORMA
-------------- -------------- -------------- --------------- --------------
Net sales $ 151,058 $ 44,416 $ 42,818 $ (1,007) (e) $ 237,285
Cost of goods sold 110,110 38,691 36,521 (1,637) (a) 181,548
(1,564) (f)
(573) (h)
-------------- -------------- -------------- --------------- --------------
Gross margin 40,948 5,725 6,297 2,767 55,737
Operating expenses 23,679 5,619 4,773 1,760 (b)
(166) (g)
196 (i) 35,861
-------------- -------------- -------------- --------------- --------------
Income from operations 17,269 106 1,524 977 19,876
Interest expense, net (20,075) (1,221) (1,469) (2,113) (c) (25,744)
(866) (j)
Other income (expense) (302) 61 426 - 185
-------------- -------------- -------------- --------------- --------------
Income (loss) before
income taxes (3,108) (1,054) 481 (2,002) (5,683)
Income tax expense (benefit) 239 (332) 243 332 (d) 239
(243) (k)
-------------- -------------- -------------- --------------- --------------
Net income (loss) (3,347) (722) 238 (2,091) (5,922)
Preferred stock dividends (1,116) - - - (1,116)
-------------- -------------- -------------- --------------- --------------
Net income (loss)attributable
to common shareholders $ (4,463) $ (722) $ 238 $ (2,091) $ (7,038)
============== ============== ============== =============== ==============
</TABLE>
SEE ACCOMPANYING NOTES.
<PAGE>
BPC HOLDING CORPORATION
NOTES TO PRO FORMA UNAUDITED CONDENSED
CONSOLIDATED STATEMENT OF OPERATIONS
(DOLLARS IN THOUSANDS)
YEAR ENDED DECEMBER 28, 1996
<TABLE>
<CAPTION>
The historical consolidated statement of operations presented for Holding is for its fiscal year ended December 28, 1996,
the historical statement of operations presented for Venture Packaging is for the twelve months ended December 31, 1996,
and the historical statement of operations presented for PackerWare (acquired January 21, 1997) is for its fiscal year ended
October 31, 1996.
VENTURE PACKAGING ADJUSTMENTS
<S> <C>
(a) Adjustments to cost of goods sold:
Decrease in resin costs due to volume discounts available to Berry $(2,056)
Increase in depreciation expense due to increase of property and equipment
to estimated fair value 419
----------
Net reduction in cost of goods sold $(1,637)
==========
(b) Adjustments to operating expenses:
Increase in amortization due to increase in cost in excess of net assets acquired $ 1,360
Increase in amortization due to increase in not-to-compete agreements 400
----------
Net increase in operating expenses $ 1,760
==========
(c) Adjustments to interest expense:
Elimination of interest expense on debt extinguished $ (989)
Additional interest incurred on borrowing for Venture acquisition 3,102
----------
Net change in interest expense $ 2,113
==========
(d) Adjustment to income tax expense:
Elimination of Venture Packaging income tax benefit due to increase in Holding's
net operating loss offset by a corresponding increase in the valuation
allowance on deferred tax assets $ 332
==========
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
PACKERWARE ADJUSTMENTS
Adjustments of net sales, cost of goods sold and operating expenses due to the shut down of PackerWare's Nevada operations:
(e) Adjustments to net sales:
<S> <C>
Elimination of total net sales of PackerWare's Nevada operations $ (4,707)
Addition of net sales retained due to transfer to other PackerWare location or to
existing Holding location 3,700
----------
Net reduction in net sales $ (1,007)
==========
(f) Adjustments to cost of goods sold:
Elimination of total cost of goods sold of PackerWare's Nevada operations $ (4,672)
Addition of cost of sales related to net sales retained 3,108
----------
Net reduction in cost of goods sold $ (1,564)
==========
(g) Adjustment to operating expense:
Elimination of expenses incurred by PackerWare related to the sale of the company $ (166)
==========
</TABLE>
<TABLE>
<CAPTION>
Other adjustments to cost of goods sold, operating expenses, interest expense and income tax
expense are comprised of the following:
(h) Adjustments to cost of goods sold:
<S> <C>
Decrease in resin costs due to volume discounts available to Berry $ (1,000)
Net increase in depreciation expense due to a change in the remaining
useful lives of the related assets 427
----------
Net reduction in cost of goods sold $ (573)
==========
(i) Adjustments to operating expense:
Elimination of former employee salaries $ (241)
Increase in amortization of cost in excess of net assets acquired 437
----------
Net increase in operating expenses $ 196
==========
(j) Adjustments to interest expense:
Elimination of interest expense on debt extinguished $ (1,485)
Additional interest incurred on borrowing for the PackerWare acquisition 2,351
----------
Net change in interest expense $ 866
==========
(k) Adjustment to income tax expense:
Elimination of PackerWare income tax expenses due to a decrease in Holding's
net operating loss offset by a corresponding decrease in the valuation
allowance on deferred tax assets $ (243)
==========
</TABLE>
<PAGE>
BPC HOLDING CORPORATION
PRO FORMA UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
SIX MONTHS ENDED JUNE 28, 1997
----------------------------------------------------------------------------------------
VENTURE
HOLDING PACKAGING PRO FORMA CONSOLIDATED
HISTORICAL HISTORICAL ADJUSTMENTS PRO FORMA
------------- ------------- ------------- --------------
<S> <C> <C> <C> <C>
Net sales $ 105,936 $ 23,871 $ - $ 129,807
Cost of goods sold 82,167 20,324 (1,030) (a) 101,461
------------- ------------- ------------- --------------
Gross margin 23,769 3,547 1,030 28,346
Operating expenses 13,786 3,012 880 (b) 17,678
------------- ------------- ------------- --------------
Income from operations 9,983 535 150 10,668
Interest expense, net (14,394) (672) (1,056) (c) (16,122)
Other income (expense) (90) 24 - (66)
------------- ------------- ------------- --------------
Loss before income taxes (4,501) (113) (906) (5,520)
Income tax expense (benefit) 92 (24) 24 (d) 92
------------- ------------- ------------- --------------
Net loss (4,593) (89) (930) (5,612)
Preferred stock dividends (1,048) - - (1,048)
------------- ------------- ------------- --------------
Net loss attributable
to common shareholders $ (5,641) $ (89) $ (930) $ (6,660)
============= ============= ============= ==============
</TABLE>
SEE ACCOMPANYING NOTES.
<PAGE>
BPC Holding Corporation
Notes to Pro Forma Unaudited Condensed
Consolidated Statement of Operations
(Dollars in thousands)
SIX MONTHS ENDED JUNE 28, 1997
<TABLE>
<CAPTION>
The historical consolidated statement of operations presented for Holding is for its six months ended June 28, 1997
and the historical statement of operations presented for Venture Packaging is for the six months ended June 30, 1997.
(a) Adjustments to cost of goods sold:
<S> <C>
Decrease in resin costs due to volume discounts available to Berry $(1,239)
Increase in depreciation expense due to increase of property and equipment
to estimated fair value 209
----------
Net reduction in cost of goods sold $(1,030)
==========
(b) Adjustments to operating expenses:
Increase in amortization due to increase in cost in excess of net assets acquired $ 680
Increase in amortization due to increase in not-to-compete agreements 200
----------
Net increase in operating expenses $ 880
==========
(c) Adjustments to interest expense:
Elimination of interest expense on debt extinguished $ (495)
Additional interest incurred on borrowing for Venture acquisition 1,551
----------
Net change in interest expense $ 1,056
==========
(d) Adjustment to income tax expense:
Elimination of income tax benefit due to increase in Holding's net operating loss
offset by a corresponding increase in the valuation allowance on deferred tax assets $ 24
==========
</TABLE>
