UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(MARK ONE)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended June 27, 1998
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
BPC HOLDING CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 35-1814673
(State or other jurisdiction of (IRS employer
incorporation or organization) 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 JUNE 28, 1998
- -----------------------------------------------------------------------------
Class A - Voting - $.01 Par Value 91,000
Class A - Nonvoting - $.01 Par Value 259,000
Class B - Voting - $.01 Par Value 144,936
Class B - Nonvoting - $.01 Par Value 57,387
Class C - Nonvoting - $.01 Par Value 16,960
1
<PAGE>
BPC HOLDING CORPORATION AND SUBSIDIARIES
FORM 10-Q INDEX
FOR QUARTERLY PERIOD ENDED JUNE 27, 1998
PAGE NO.
Part I. Financial Information
Item 1. Financial Statements
Consolidated Balance Sheets 3
Consolidated Statements of Operations 5
Consolidated Statement of Changes in Stockholders'
Equity (Deficit) 6
Consolidated Statements of Cash Flows 7
Notes to Consolidated Financial Statements 8
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 13
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 16
SIGNATURE 17
2
<PAGE>
PART 1. FINANCIAL INFORMATION
Item 1. Financial Statements
BPC Holding Corporation and Subsidiaries
Consolidated Balance Sheets
(In Thousands of Dollars)
<TABLE>
<CAPTION>
JUNE 27, DECEMBER 27,
1998 1997
-------------- --------------
<S> <C> <C>
(UNAUDITED)
ASSETS
Current assets:
Cash and cash equivalents $ 2,680 $ 2,688
Accounts receivable (less allowance
for doubtful accounts of $993 at June 27,
1998 and $1,038 at December 27, 1997) 33,951 28,385
Inventories:
Finished goods 20,639 22,029
Raw materials and supplies 6,869 7,429
-------------- --------------
27,508 29,458
Prepaid expenses and other receivables 2,110 1,834
Income taxes recoverable 355 1,167
-------------- --------------
Total current assets 66,604 63,532
Assets held in trust 13,345 19,738
Property and equipment:
Land 6,157 5,811
Buildings and improvements 34,449 33,891
Machinery, equipment and tooling 128,912 122,991
Automobiles and trucks 1,272 1,241
Construction in progress 8,545 10,357
-------------- --------------
179,335 174,291
Less accumulated depreciation 74,075 66,073
-------------- --------------
105,260 108,218
Intangible assets:
Deferred financing and origination fees, net 10,056 10,849
Covenants not to compete, net 3,867 3,940
Excess of cost over net assets acquired, net 29,080 30,303
Deferred acquisition costs 77 13
-------------- --------------
43,080 45,105
Deferred income taxes 2,049 2,049
Other 833 802
-------------- --------------
Total assets $231,171 $239,444
============== ==============
</TABLE>
3
<PAGE>
BPC Holding Corporation and Subsidiaries
Consolidated Balance Sheets (continued)
(In Thousands of Dollars)
<TABLE>
<CAPTION>
JUNE 27, DECEMBER 27,
1998 1997
-------------- --------------
<S> <C> <C>
(UNAUDITED)
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities:
Accounts payable $ 15,746 $ 16,732
Accrued expenses and other liabilities 7,536 7,162
Accrued interest 3,525 3,612
Employee compensation and payroll taxes 8,569 7,489
Income taxes 152 55
Current portion of long-term debt 12,313 7,619
-------------- --------------
Total current liabilities 47,841 42,669
Long-term debt, less current portion 287,542 298,716
Accrued dividends on preferred stock 5,457 3,674
Other liabilities 2,894 3,360
-------------- --------------
343,734 348,419
Stockholders' equity (deficit):
Class A Preferred Stock; 800,000 shares
authorized; 600,000 shares issued and
outstanding (net of discount of $2,917 at June 11,655 11,509
27, 1998 and $3,062 at December 27, 1997)
Class B Preferred Stock; 200,000 shares
authorized, issued and outstanding 5,000 5,000
Class A Common Stock; $.01 par value:
Voting; 500,000 shares authorized; 91,000
shares issued and outstanding 1 1
Nonvoting; 500,000 shares authorized; 259,000
shares issued and outstanding 3 3
Class B Common Stock; $.01 par value:
Voting; 500,000 shares authorized; 144,936
shares issued and outstanding 1 1
Nonvoting; 500,000 shares authorized; 57,387
shares issued and outstanding 1 1
Class C Common Stock; $.01 par value:
Nonvoting; 500,000 shares authorized; 16,960
shares issued and outstanding - -
Treasury stock: 726 shares (81) (22)
Additional paid-in capital 47,445 49,374
Warrants 3,511 3,511
Retained earnings (deficit) (180,099) (178,353)
-------------- --------------
Total stockholders' equity (deficit) (112,563) (108,975)
-------------- --------------
Total liabilities and stockholders'
equity (deficit) $ 231,171 $ 239,444
============== ==============
</TABLE>
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
4
<PAGE>
BPC Holding Corporation and Subsidiaries
Consolidated Statements of Operations
(In Thousands of Dollars)
<TABLE>
<CAPTION>
THIRTEEN WEEKS ENDED TWENTY-SIX WEEKS ENDED
----------------------------------------------------------------------------
JUNE 27, JUNE 28, JUNE 27, JUNE 28,
1998 1997 1998 1997
----------------------------------------------------------------------------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C>
Net sales $69,586 $56,929 $136,317 $105,936
Cost of goods sold 50,768 43,771 100,016 82,167
----------------------------------------------------------------------------
Gross margin 18,818 13,158 36,301 23,769
Operating expenses:
Selling 3,487 2,737 7,112 5,094
General and administrative 4,400 3,120 8,799 5,725
Research and development 347 366 743 602
Amortization of intangibles 828 346 1,708 624
Other 1,230 910 2,363 1,741
----------------------------------------------------------------------------
Operating income 8,526 5,679 15,576 9,983
Other income and expense:
Loss on disposal of property and
equipment 297 90 430 90
----------------------------------------------------------------------------
Income before interest and income 8,229 5,589 15,146 9,893
taxes
Interest:
Expense (8,776) (7,742) (17,441) (15,550)
Income 337 709 575 1,156
----------------------------------------------------------------------------
Loss before income taxes (210) (1,444) (1,720) (4,501)
Income tax expense 13 564 26 92
----------------------------------------------------------------------------
Net loss (223) (2,008) (1,746) (4,593)
Preferred stock dividends (869) (524) (1,783) (1,048)
----------------------------------------------------------------------------
Net loss attributable to common
stockholders $ (1,092) $ (2,532) $ (3,529) $ (5,641)
============================================================================
</TABLE>
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
5
<PAGE>
BPC Holding Corporation and Subsidiaries
Consolidated Statement of Changes in Stockholders' Equity (Deficit)
(In Thousands of Dollars)
(Unaudited)
<TABLE>
<CAPTION>
COMMON STOCK PREFERRED
STOCK
----------------- -------------- ADDITIONAL RETAINED
CLASS CLASS CLASS CLASS CLASS TREASURY PAID-IN EARNINGS
A B C A B STOCK CAPITAL WARRANTS (DEFICIT) TOTAL
----- ----- ----- ------- ------ ------- ---------- -------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Balance at December 27, 1997 $ 4 $ 2 $ - $11,509 $5,000 $ (22) $ 49,374 $ 3,511 $(178,353) $(108,975)
Net loss - - - - - - - - (1,746) (1,746)
Accrued dividends on
preferred stock - - - - - - (1,783) - - (1,783)
Purchase treasury stock
from management - - - - - (59) - - - (59)
Amortization of preferred
stock discount - - - 146 - - (146) - - -
Balance at June 27, 1998 $ 4 $ 2 $ - $11,655 $5,000 $ (81) $ 47,445 $ 3,511 $(180,099) $(112,563)
</TABLE>
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
6
<PAGE>
7
BPC Holding Corporation and Subsidiaries
Consolidated Statements of Cash Flows
(In Thousands of Dollars)
<TABLE>
<CAPTION>
TWENTY-SIX WEEKS ENDED
------------------------------------------------
JUNE 27, JUNE 28,
1998 1997
------------------------------------------------
(UNAUDITED)
OPERATING ACTIVITIES
<S> <C> <C> <C>
Net loss $ (1,746) $ (4,593)
Adjustments to reconcile net loss to net cash
provided by
operating activities:
Depreciation 10,075 7,249
Non-cash interest expense 884 739
Amortization 1,708 624
Interest applied to assets held in trust 6,393 5,459
Loss on sale of property and equipment 430 90
Deferred income taxes - (20)
Changes in operating assets and liabilities:
Accounts receivable, net (5,565) (8,833)
Inventories 1,950 2,492
Prepaid expenses and other receivables 534 (96)
Accounts payable and accrued expenses (114) (1,368)
Other assets (169) 554
------------ ------------
Net cash provided by operating activities 14,380 2,297
INVESTING ACTIVITIES
Additions to property and equipment (7,853) (4,801)
Proceeds from disposal of property and equipment 95 1,060
Acquisitions of businesses - (44,767)
------------ ------------
Net cash used for investing activities (7,759) (48,508)
FINANCING ACTIVITIES
Proceeds from borrowings - 40,807
Payments on long-term borrowings (6,397) (1,250)
Payments on capital lease (127) (116)
Payment of refinancing fees (46) (1,184)
Payment of bond consent fee - (737)
Purchase of stock from management (59) -
------------ ------------
Net cash provided by (used for) financing
activities (6,629) 37,520
------------ ------------
Net decrease in cash and cash equivalents (8) (8,691)
Cash and cash equivalents at beginning of period 2,688 10,192
------------ ------------
Cash and cash equivalents at end of period $ 2,680 $ 1,501
============ ============
</TABLE>
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
7
<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 BPC Holding Corporation ("Holding") and its wholly-owned subsidiary, Berry
Plastics Corporation ("Berry"), and its wholly-owned subsidiaries: Venture
Packaging, Inc. ("Venture Packaging"), Venture Packaging Midwest, Inc.,
Venture Packaging Southeast, Inc., PackerWare Corporation, Berry Iowa
Corporation, Berry Tri-Plas Corporation, Berry Sterling Corporation, Berry
Plastics Design Corporation ("Berry Design"), and AeroCon, Inc. For further
information, refer to the consolidated financial statements and footnotes
thereto included in Holding's and Berry's Form 10-K's filed with the
Securities and Exchange Commission for the year ended December 27, 1997.
Certain amounts on the 1997 financial statements have been reclassified to
conform with the 1998 presentation.
2. ACQUISITIONS
On January 17, 1997, Berry acquired certain assets and assumed certain
liabilities of Container Industries, Inc. ("Container Industries") of
Pacoima, California for $2.9 million. The purchase was funded out of
operating funds. The operations of Container Industries are included in the
Berry's operations since the acquisition date using the purchase method of
accounting.
On January 21, 1997, Berry acquired the outstanding stock of PackerWare
Corporation, a Kansas corporation, for aggregate consideration of
approximately $28.1 million by way of a merger of PackerWare with a newly-
formed, wholly-owned subsidiary of Berry (with PackerWare being the surviving
corporation). The purchase was primarily financed through the Credit
Facility (see Note 3). The operations of PackerWare are included in Berry's
operations since the acquisition date using the purchase method of
accounting.
On May 13, 1997, Berry Design, a newly-formed wholly-owned subsidiary of
Berry, acquired substantially all of the assets and assumed certain
liabilities of Virginia Design Packaging Corp. ("Virginia Design") for
approximately $11.1 million. The purchase was financed through the Credit
Facility (see Note 3). The operations of Berry Design are included in
Berry's operations since the acquisition date using the purchase method of
accounting.
8
<PAGE>
2. ACQUISITIONS (CONTINUED)
On August 29, 1997, Berry acquired the outstanding common stock of Venture
Packaging for aggregate consideration of $43.7 million by way of a merger of
Venture Packaging with a newly formed subsidiary of Berry (with Venture
Packaging being the surviving corporation). The purchase was primarily
financed through the Credit Facility (see Note 3). Additionally, preferred
stock and warrants were issued to certain selling shareholders of Venture
Packaging. The operations of Venture Packaging are included in Berry's
operations since the acquisition date using the purchase method of
accounting.
The pro forma results listed below are unaudited and reflect purchase
accounting adjustments assuming the Container Industries, PackerWare,
Virginia Design and Venture Packaging acquisitions occurred on December 29,
1996.
<TABLE>
<CAPTION>
THIRTEEN WEEKS ENDED TWENTY-SIX WEEKS ENDED
JUNE 28, 1997 JUNE 28, 1997
---------------------------------------------------------
(In Thousands)
<S> <C> <C>
Net sales $ 67,117 $ 133,184
Loss before income taxes (2,797) (7,164)
Net loss (3,361) (7,256)
</TABLE>
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:
<TABLE>
<CAPTION>
JUNE 27, DECEMBER 27,
1998 1997
----------------------------------------------
<S> <C> <C>
(In Thousands)
Holding 12.50% Senior Secured Notes $105,000 $105,000
Berry 12.25% Senior Subordinated Notes 100,000 100,000
Term loans 56,206 58,300
Revolving line of credit 22,187 25,654
Nevada Industrial Revenue Bonds 4,500 5,000
Iowa Industrial Revenue Bonds 5,400 5,400
South Carolina Industrial Development Bonds 6,650 6,985
Capital lease obligation 420 547
Debt discount (508) (551)
-------------- --------------
299,855 306,335
Less current portion of long-term debt 12,313 7,619
-------------- --------------
$287,542 $298,716
============== ==============
</TABLE>
The current portion of long-term debt at June 27, 1998 consists of $10.6
million of quarterly installments on the term loans, $1.5 million of repayments
on the industrial bonds and the monthly principal payments related to a capital
lease obligation.
Concurrent with the PackerWare acquisition, Berry entered into a financing
and security agreement with NationsBank, N.A. (the "Credit Agreement") for a
senior secured line of credit in an aggregate principal amount of $60.0
million (the "Credit Facility"). As a result of the acquisition of assets of
Virginia Design and the acquisition of Venture Packaging, the Credit Facility
was amended and increased to $127.2 million. The indebtedness under the
Credit Facility is guaranteed by Holding and Berry's subsidiaries.
The Credit Facility provided the Company with a $50.0 million revolving line
of credit, subject to a borrowing base formula, a $58.3 million term loan
facility and an $18.9 million standby letter of credit facility to support
Berry's and its subsidiaries' obligations under the Nevada and Iowa
Industrial Revenue Bonds and the South Carolina Industrial Development Bonds.
Berry borrowed all amounts available under the term loan facility to finance
the PackerWare, Virginia Design and Venture Packaging acquisitions. Based on
the borrowing formula as of June 27, 1998, Berry had approximately $19.4
million of additional available credit under the revolving line of credit.
3. LONG-TERM DEBT (CONTINUED)
The Credit Facility matures on January 21, 2002 unless previously terminated
by Berry or by the lenders upon an Event of Default as defined in the Credit
Agreement. The term loan facility requires periodic quarterly payments,
varying in amount, through the maturity of the facility.
Interest on borrowings on the Credit Facility will be based on the lender's
base rate plus .5% or LIBOR plus 2.0%, at Berry's option.
The Credit Facility contains various covenants which include, among other
things: (i) maintenance of certain financial ratios and compliance with
certain financial tests and limitations, (ii) limitations on the issuance of
additional indebtedness, and (iii) limitations on capital expenditures.
4. BPC HOLDING CORPORATION SUMMARY FINANCIAL INFORMATION (IN THOUSANDS)
The following summarizes parent company only unaudited financial information
of Holding:
<TABLE>
<CAPTION>
JUNE 27, 1998 DECEMBER 27, 1997
----------------------------------------------
<S> <C> <C>
BALANCE SHEET
Current assets $ 673 $ 708
Noncurrent assets (2,323) (499)
Current liabilities 456 510
Noncurrent liabilities 110,457 108,674
Stockholders' equity (deficit) (112,563) (108,975)
THIRTEEN WEEKS ENDED TWENTY-SIX WEEKS ENDED
----------------------------------------------------------------------------
JUNE 27, JUNE 28, JUNE 27, JUNE 28,
1998 1997 1998 1997
----------------------------------------------------------------------------
<S> <C> <C> <C> <C>
STATEMENT OF OPERATIONS
Net sales $ - $ - $ - $ -
Cost of goods sold - - - -
Loss before income taxes (3,098) (2,823) (6,292) (5,915)
Equity in net income of 2,875 1,439 4,546 1,316
subsidiary
Preferred stock dividends (869) (524) (1,783) (1,048)
Net loss attributable to common
stockholders (1,092) (2,532) (3,529) (5,641)
</TABLE>
9
<PAGE>
5. RECENT ACCOUNTING PRONOUNCEMENTS
In June 1997, the Financial Accounting Standards Board issued Statement No.
131, "Disclosure About Segments of an Enterprise and Related Information"
(FAS 131). FAS 131 establishes requirements for reporting information about
operating segments in annual and interim reports and is effective for the
Company in 1998, but need not be applied to interim financial statements
in the initial year of application. FAS 131 may require a change in the
Company's financial reporting; however, the extent of the change, if any,
has not been determined.
6. SUBSEQUENT TRANSACTION
On July 2, 1998, NIM Holdings Limited, a newly formed wholly-owned subsidiary
of Berry and a company incorporated in England and Wales ("NIM Holdings"),
acquired all of the outstanding capital stock of Norwich Injection Moulders
Limited, a company incorporated in England and Wales ("NIM"), for aggregate
consideration of approximately $14.0 million. The purchase was financed
through an amendment to the Credit Facility to increase the amount of funds
available thereunder.
10
<PAGE>
Item 2.
BPC Holding Corporation and Subsidiaries
Management's Discussion and Analysis of Financial Condition and
Results of Operations
The following discussion includes certain forward-looking statements.
Actual results could differ materially from those reflected by the forward-
looking statements in the discussion, and a number of factors could adversely
affect future results, liquidity and capital resources. These factors
include, among other things, the Company's ability to pass through raw
material price increases to its customers, its ability to service debt, the
availability of plastic resin, the impact of changing environmental laws and
changes in the level of the Company's capital investment. Although
management believes it has the business strategy and resources needed for
improved operations, future revenue and margin trends cannot be reliably
predicted.
RESULTS OF OPERATIONS
13 WEEKS ENDED JUNE 27, 1998 (THE "QUARTER")
COMPARED TO 13 WEEKS ENDED JUNE 28, 1997 (THE "PRIOR QUARTER")
NET SALES. Net sales increased $12.7 million, or 22%, to $69.6 million
for the Quarter from $56.9 million for the Prior Quarter with net selling
prices relatively flat. The increase in net sales was primarily attributed
to the addition of Venture Packaging with net sales of $10.5 million and
increased non-Venture Packaging container net sales of $2.0 million.
GROSS MARGIN. Gross margin increased by $5.6 million to $18.8 million
for the Quarter from $13.2 million for the Prior Quarter. This increase of
43% includes the combined impact of added sales volume, productivity
improvement initiatives, and the cyclical impact of lower raw material costs
compared to the Prior Quarter.
OPERATING EXPENSES. Selling expenses increased by $0.8 million to $3.5
million for the Quarter from $2.7 million for the Prior Quarter principally
as a result of expanded sales coverage and increased product development and
marketing expenses. General and administrative expenses increased from $3.1
million for the Prior Quarter to $4.4 million for the Quarter. The increase
of $1.3 million is primarily attributable to increased patent litigation
expenses and increased accrued employee profit sharing expense. During the
Quarter, one-time transition expenses primarily related to the shutdown
of the Anderson facility was $1.2 million. In the Prior Quarter,
one-time transition expenses for the PackerWare, Container Industries,
and Virginia Design acquisitions were $0.9 million.
INTEREST EXPENSE. Interest expense increased $1.0 million to $8.7
million for the Quarter compared to $7.7 million for the Prior Quarter
primarily due to additional borrowings under the Credit Facility (see Note 3)
to support the 1997 acquisitions (see Note 2).
INCOME TAX. For the Quarter, the Company's income tax expense was
$0.1 million compared to an income tax expense of $0.6 million for the
Prior Quarter. The Company continues to operate in a net operating loss
carryforward position for Federal income tax purposes.
NET LOSS AND EBITDA. Net loss for the Quarter of $0.2 million
represented a favorable change of $1.8 million from the net loss of $2.0
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, write-off of financing fees, and one-time transition
expenses, was $15.7 million for the Quarter compared to $10.7 million for the
Prior Quarter.
26 Weeks Ended June 27, 1998 ("YTD")
Compared to 26 Weeks Ended June 28, 1997 ("prior YTD")
NET SALES. Net sales increased $30.4 million, or 29%, to $136.3
million for the YTD from $105.9 million for the prior YTD with an
approximate 1% decrease in net selling prices due mainly to competitive
market conditions. The increase in net sales can be primarily attributed
to the addition of Venture Packaging with YTD net sales of $21.0 million
and higher non-Venture Packaging container sales of $7.5 million.
GROSS MARGIN. Gross margin increased by $12.5 million to $36.3 million
for the YTD from $23.8 million for the prior YTD. This increase in gross
margin can be attributed to the combined impact of sales volume,
productivity improvement initiatives, and the cyclical impact of lower raw
material costs.
OPERATING EXPENSES. Selling expenses increased by $2.0 million to $7.1
million for the YTD from $5.1 million for the prior YTD principally as a
result of expanded sales coverage related to the acquisition of Venture
Packaging, increased product development and marketing expenses.
General and administrative expenses increased by $3.1 million to $8.8 million
YTD from $5.7 million for the prior YTD. The increase of $3.1 million is
primarily attributable to increased patent litigation expenses and increased
accrued employee profit sharing expense. YTD one-time transition expenses
include $1.4 million related to the shutdown of the Reno and Anderson
facilities and $1.0 million related to the 1997 acquisitions. One-time
transition expenses for prior YTD were $1.4 million related to the
PackerWare, Container Industries, and Virginia Design acquisitions and
$0.3 million related to the Winchester plant consolidation.
INTEREST EXPENSE. Interest expense increased $1.8 million to $17.4
million for the YTD compared to $15.6 million for the prior YTD primarily
due to additional borrowings under the Credit Facility (see Note 3) to
support the 1997 acquisitions (see Note 2).
INCOME TAX. The Company's income tax expense was $0.1 million for the
YTD compared to an income tax expense of $0.1 million in the prior YTD. The
Company continues to operate in a net operating loss carryforward position
for Federal income tax purposes.
11
<PAGE>
NET LOSS AND EBITDA. Net loss for the YTD of $1.7 million improved
$2.9 million from a net loss of $4.6 million for the prior YTD 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,
write-off of financing fees, and one-time transition expenses, was $29.6
million YTD compared to $19.6 million for the prior YTD.
LIQUIDITY AND SOURCES OF CAPITAL
Net cash provided by operating activities was $14.4 million for the YTD,
an increase of $12.1 million from the prior YTD. The increase is primarily
the result of improved operating performance with income before
depreciation and amortization increasing $6.8 million from prior YTD.
Net working capital changes (defined as accounts receivable, inventories,
prepaid expenses, other receivables, accounts payable and accrued expenses)
also increased YTD cash $4.6 million from the prior YTD.
YTD capital spending of $7.9 million included $4.9 million for molds and
machines, and $3.0 million for building and accessory equipment. Berry
currently intends to finance future capital spending through cash flow
from operations, existing cash balances, and cash available under the
Credit Facility's revolving line of credit.
At June 27, 1998, the Company's cash balance was $2.7 million, and Berry had
unused borrowing capacity under the Credit Facility's borrowing base of
approximately $19.4 million.
12
<PAGE>
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits:
None
(b) Reports on Form 8-K:
None
13
<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
August 11, 1998
By: /S/ JAMES M. KRATOCHVIL
James M. Kratochvil
Executive Vice President, Chief Financial
Officer and Secretary of BPC Holding
Corporation (Principal Financial and
Accounting Officer)
14
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JAN-02-1999
<PERIOD-END> JUN-27-1998
<CASH> 2680
<SECURITIES> 0
<RECEIVABLES> 34944
<ALLOWANCES> 993
<INVENTORY> 27508
<CURRENT-ASSETS> 66604
<PP&E> 179335
<DEPRECIATION> 74075
<TOTAL-ASSETS> 231171
<CURRENT-LIABILITIES> 47841
<BONDS> 299855
0
16655
<COMMON> 6
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