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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
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FORM 10-K/A
AMENDMENT NO. 1
[x] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED JANUARY 3, 1997
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM __ TO ____
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COMMISSION FILE NUMBER 000-24124
FRESH AMERICA CORP.
(Exact name of registrant as specified in its charter)
TEXAS 76-0281274
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
ONE LINCOLN CENTRE, 5400 LBJ FREEWAY, SUITE 1025, DALLAS, TEXAS 75240
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (972) 774-0575
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which registered:
- ---------------------------------- --------------------------------------------
Common Stock, $.01 Par Value Nasdaq National Market
Securities registered pursuant to Section 12(g) of the Act: NONE.
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. Yes [x] No [ ]
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to
the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K.
The aggregate market value of the voting stock held by non-affiliates of
the registrant on March 26, 1997, based on the closing price of the Common
Stock on the Nasdaq National Market was approximately $50 million.
Indicated below is the number of shares outstanding of each class of the
registrant's Common Stock, as of March 26, 1997.
<TABLE>
<CAPTION>
Title of Each Class of Common Stock Number of Outstanding
----------------------------------- ---------------------
<S> <C>
Common Stock, $.01 par value 3,740,890
</TABLE>
DOCUMENTS INCORPORATED BY REFERENCE
None.
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ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
Item 8 of the Form 10-K of Fresh America Corp., a Texas corporation
(the "Company"), filed with the Securities and Exchange Commission is hereby
amended by deleting Note 13 of the Notes to Consolidated Financial Statements
included therein and replacing such Note with the following:
NOTE 13. SUBSEQUENT EVENTS (UNAUDITED).
Subsequent to January 3, 1997, various transactions have occurred and
are described as follows:
On January 22, 1997, the Company acquired substantially all of the net
operating assets and the business of CPT Enterprises, Inc. d/b/a Chef's Produce
Team, ("CPT") a Los Angeles-based food service company providing specialty
produce to upscale restaurants and hotels throughout California and Nevada.
CPT, with operating facilities in Los Angeles and San Francisco, was acquired
for approximately $1.5 million, with future additional consideration depending
on the achievement of certain levels of pretax earnings over the next three
years. The transaction will be accounted for as an asset purchase.
In February 1997, the Company was advised by Sam's Club that it was
exercising the existing option under the Distribution Agreement and that Sam's
Club would begin to distribute directly to 40 clubs currently serviced by the
Company's Atlanta distribution center. Such transition is expected to occur in
late March and April 1997, and is expected to result in approximately $16 to
$20 million less revenue for the 1997 fiscal year as compared to fiscal 1996.
The Company does not believe this action will have a material adverse effect on
its consolidated financial condition.
On February 28, 1997, the Company entered into a five year agreement
with Fast Food Merchandiser's, Inc. ("FFM"), a wholly owned subsidiary of
Hardee's Food Systems, Inc. to source and distribute produce products to all
FFM distribution centers nationwide. Coinciding with the distribution
agreement, the Company acquired the produce production center in Richmond,
Indiana from FFM for approximately $2.9 million.
On March 7, 1997, the Company acquired the business and substantially
all of the net operating assets of One More Tomato, Inc. ("OMT") for
approximately $570,000 in cash. OMT is a tomato repackaging and distribution
company located in Houston, Texas. The transaction will be accounted for as an
asset purchase.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.
The following table sets forth certain information concerning the
executive officers and directors of the Company as of March 26, 1997.
<TABLE>
<CAPTION>
NAME AGE POSITION WITH THE COMPANY
---- --- -------------------------
<S> <C> <C>
David I. Sheinfeld 42 Chairman of the Board and Chief Executive Officer
Steve R. Grinstead 38 President, Chief Operating Officer and Director
Robert C. Kiehnle 47 Executive Vice President and Chief Financial Officer
Thomas M. Hubbard 54 Director
Sheldon I. Stein 43 Director
Colon Washburn 51 Director
</TABLE>
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David I. Sheinfeld. Mr. Sheinfeld joined the Company in June 1990 and
joined its Board of Directors in March 1991. In 1992, Mr. Sheinfeld became
Chairman of the Board and Chief Executive Officer of the Company. Prior to
joining the Company, Mr. Sheinfeld was self-employed and an active participant
and investor in real estate development projects. From 1989 to 1992, Mr.
Sheinfeld was a principal of The Resort Group, Inc., a real estate development
firm.
Steve R. Grinstead. Mr. Grinstead joined the Company in January 1992
and was named President, Chief Operating Officer and a director of the Company
in May 1992. From 1981 to 1991, Mr. Grinstead held various positions in
purchasing, marketing and management with Grocers' Supply Company in Houston,
Texas, including serving as a general manager of its banana processing plant
and perishables division. From 1980 to 1981, he was Director of Produce for
O'Brians, an independent chain of grocery stores located in Houston, Texas.
From 1974 to 1980, he worked for Winn Dixie Food Stores in Florida. Mr.
Grinstead is active in produce industry associations and was previously
President of the Houston Fresh Fruit and Vegetable Association.
Robert C. Kiehnle. Mr. Kiehnle joined the Company in August 1996 as
Executive Vice President and Chief Financial Officer. From January 1994
through June 1996, Mr. Kiehnle served as Treasurer of Aviall, Inc., an aircraft
service and parts distribution company located in Dallas, Texas. From 1978
through 1993, he held various positions in financial management for Itel Rail
Corporation, the rail car leasing subsidiary of Itel Corporation, where he
served most recently as Vice President Finance and Administration.
Thomas M. Hubbard. Mr. Hubbard, a founder of the Company, has been a
director since 1989 and served as the Company's President until April 1992.
Mr. Hubbard has worked in the produce industry for more than 30 years and is an
active investor in a number of produce companies, including Pacific Fresh
Marketing, Inc., which harvests, packs and markets fresh vegetables in the
southwestern United States and central Mexico.
Sheldon I. Stein. Mr. Stein has been a director of the Company since
December 1992. Mr. Stein is a Senior Managing Director of Bear, Stearns & Co.
Inc. and heads the firm's southwestern investment banking operations. Mr.
Stein serves as a director of five other companies with publicly-traded
securities, Cinemark USA, Inc., The Mens Warehouse, Tandycrafts, Inc., First
Plus Financial Group and Cellstar Corp.
Colon Washburn. Mr. Washburn has been a director of the Company since
July 1993. From 1971 until January 1993, Mr. Washburn was employed by Wal-Mart
Stores, Inc., ("Wal-Mart") where he served most recently as Executive Vice
President of Wal-Mart and also as Senior Vice President of Sam's Wholesale
Club, a division of Wal-Mart. Since February 1993, Mr. Washburn has been
President of Beau Chene Farms, a real estate development company.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act of 1934, as amended (the "Exchange
Act"), requires the Company's executive officers and directors and persons who
own more than ten percent (10%) of a registered class of the Company's equity
securities (collectively, the "Reporting Persons") to file reports of ownership
and changes in ownership with the Securities and Exchange Commission and to
furnish the Company with copies of these reports. The Company believes that
all filings required to be made by the Reporting Persons during the fiscal year
ended January 3, 1997 were made on a timely basis.
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ITEM 11. EXECUTIVE COMPENSATION.
SUMMARY COMPENSATION TABLE
The following table sets forth certain information regarding
compensation paid during each of the last three fiscal years to the Company's
chief executive officer and each of the Company's other executive officers (the
"named executive officers").
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
------------
ANNUAL COMPENSATION SHARES
NAME AND ---------------------------------- UNDERLYING ALL OTHER
PRINCIPAL POSITION YEAR SALARY BONUS OTHER OPTIONS COMPENSATION(1)
- ----------------------- ---- ------ ----- ----- ------- ---------------
<S> <C> <C> <C> <C> <C> <C>
David I. Sheinfeld ........ 1996 $187,500 $90,000 $54,000(2) 20,000 $2,885
Chairman of the Board 1995 150,000 50,000 45,536(3) 17,000 2,714
and Chief Executive 1994 130,484 -- -- 15,000 --
Officer
Steve R. Grinstead ........ 1996 145,000 45,000 -- 15,000 4,750
President and Chief 1995 115,000 25,000 -- 16,000 2,200
Operating Officer 1994 103,814 -- -- 14,000 796
Marc K. Rieke(4) .......... 1996 105,000 -- -- -- 3,280
Vice President and 1995 105,000 12,500 -- 15,000 2,393
Chief Financial 1994 95,349 -- -- 13,000 665
Officer
</TABLE>
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(1) These amounts consist of contributions by the Company to a 401(k) plan
on behalf of the named executive.
(2) This amount includes payments of $45,600 for a housing allowance and
$8,400 for an automobile allowance.
(3) This amount includes payments of $41,800 for a housing allowance and
$3,736 for an automobile allowance.
(4) Effective in September 1996 Mr. Rieke resigned as Chief Financial
Officer and resigned as an officer of the Company in December 1996.
Robert C. Kiehnle was employed by the Company in August 1996 to serve
in the capacity as Executive Vice President and Chief Financial
Officer.
OPTION GRANTS IN LAST FISCAL YEAR
The following table sets forth certain information concerning options
to purchase Common Stock by the named executive officers during fiscal 1996
under the 1993 Fresh America Corp. Stock Option and Award Plan and the 1996
Fresh America Corp. Stock Option and Award Plan.
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<TABLE>
<CAPTION>
POTENTIAL REALIZABLE VALUE
NUMBER OF PERCENT OF AT ASSUMED ANNUAL RATE OF
SECURITIES TOTAL OPTIONS STOCK PRICE APPRECIATION
UNDERLYING GRANTED TO FOR OPTION TERM (1)
OPTIONS EMPLOYEES EXERCISE EXPIRATION -------------------------
NAME GRANTED IN 1996 PRICE DATE 5% 10%
------------------- --------- --------- --------- ---------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
David I. Sheinfeld ....... 20,000 21.3% $11.75 7/12/2001 $64,926 $143,470
Steve R. Grinstead ....... 15,000 16.0 11.75 7/12/2006 110,843 280,897
Marc K. Rieke ............ -- -- -- -- -- --
</TABLE>
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(1) The "Potential Realizable Value" portion of the table illustrates
value that might be realized upon the exercise of the options
immediately prior to the expiration of their term, assuming the
specified compounded rates of appreciation of the Common Stock over
the term of the options.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION
VALUES
The following table sets forth certain information related to options
exercised by the named executive officers during the 1996 fiscal year and the
number and value of options held at fiscal year end.
<TABLE>
<CAPTION>
NUMBER OF UNEXERCISED VALUE OF UNEXERCISED
OPTIONS AT JANUARY 3, IN-THE-MONEY OPTIONS
1997 AT JANUARY 3, 1997(1)
----------------------- ---------------------
SHARES ACQUIRED VALUE EXERCISABLE/ EXERCISABLE/
NAME ON EXERCISE REALIZED UNEXERCISABLE UNEXERCISABLE
----------------------- --------------- -------- ----------------------- ---------------------
<S> <C> <C> <C> <C>
David I. Sheinfeld ...... -- -- 48,925/20,000 $499,775/$97,500
Steve R. Grinstead ...... -- -- 87,367/15,000 1,210,054/73,125
Marc K. Rieke ........... 51,587 $813,281 -- --
</TABLE>
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(1) The value indicated is the amount by which the market value of the
underlying stock on the last trading day of fiscal 1996 ($16 5/8 per
share) exceeded the aggregate exercise price of the options.
COMPENSATION OF DIRECTORS
The Company's non-employee directors receive cash compensation of
$10,000 per year for serving on the Board of Directors and are reimbursed for
expenses reasonably incurred in connection with their services as directors.
Each director who is not an officer or employee of the Company is
eligible to receive stock options and awards under the 1993 Plan and each
director is eligible to receive stock options and awards under the 1996 Plan.
Members of the Plan Administration Committee may receive stock options or
awards under the 1993 Plan only pursuant to the automatic grant provisions of
such plan. Pursuant to the Stock Option Plans, options to purchase 5,000
shares are automatically granted annually to each director who is not an
officer or employee of the Company. Such automatic option grants are
exercisable at fair market value on the date of grant. Pursuant to these
provisions, on August 8, 1996, each of Messrs. Hubbard, Morris, Stein and
Washburn received options to purchase 5,000 shares of Common Stock at $14.00
per share.
EMPLOYMENT AGREEMENTS
In April 1995, the Company entered into severance agreements with
Messrs. Sheinfeld, Grinstead and Rieke pursuant to which each such officer
would be entitled to receive severance compensation equal to
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two times his annual salary if his employment with the Company is actually or
constructively terminated following a change in control of the Company. All of
the severance agreements expired in April 1997.
In September 1996, the Company entered into a ten month employment
agreement with Mr. Rieke pursuant to which, among other things, Mr. Rieke
resigned as an officer of the Company.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Messrs. Stein and Washburn serve as the Compensation Committee of the
Board of Directors. No Compensation Committee interlocks existed in fiscal
1996 and no insiders participated in Compensation Committee decisions in fiscal
1996.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
The following table sets forth certain information believed by the
Company to be accurate based on information provided to it concerning the
beneficial ownership of Common Stock by (a) each shareholder who is known by
the Company to own beneficially in excess of 5% of the outstanding Common
Stock, (b) each director, (c) the Company's Chief Executive Officer, (d) each
of the Company's other named executive officers and (e) all executive officers
and directors as a group, as of March 26, 1997.
<TABLE>
<CAPTION>
NUMBER OF SHARES OF
BENEFICIAL OWNER COMMON STOCK(1) PERCENT OF CLASS(2)
---------------- --------------- -------------------
<S> <C> <C>
David I. Sheinfeld (3)(4) . . . . . . . . . . . . . 541,062 14.46%
Thomas M. Hubbard (3)(5) . . . . . . . . . . . . . 499,432 13.35%
Steve R. Grinstead (3)(6) . . . . . . . . . . . . . 88,167 2.36%
Sheldon I. Stein (3)(7) . . . . . . . . . . . . . . 26,969 *
Robert C. Kiehnle . . . . . . . . . . . . . . . . 1,500 *
Colon Washburn (3)(8) . . . . . . . . . . . . . . . 14,282 *
Scudder, Stevens & Clark, Inc. (9) . . . . . . . . 292,700 7.82%
Gruber & McBaine Capital
Management, Inc. (10) . . . . . . . . . . . . . 262,000 7.00%
All directors and executive officers
as a group (6 persons) (11) . . . . . . . . . 1,171,412 31.31%
</TABLE>
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*less than one percent
(1) Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission. Except as indicated in the
footnotes to this table and subject to community property laws, where
applicable, each of the shareholders named in this table has sole
voting and investment power with respect to the shares shown as
beneficially owned, unless otherwise indicated.
(2) Percentages are based on the total number of shares outstanding at
March 26, 1997, plus the total number of outstanding options held by
each such person that are exercisable within 60 days of such date.
Shares issuable upon exercise of outstanding options, however, are not
deemed outstanding for purposes of computing the percentage ownership
of any other person.
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(3) Director of the Company.
(4) Consists of 362,037 shares held of record by David I. Sheinfeld, as
trustee of the Sheinfeld Family Trust, 130,100 shares held of record
by the Sheinfeld Family Partnership and 48,925 shares subject to
options issued to Mr. Sheinfeld under the Stock Option Plans that are
exercisable within 60 days. Mr. Sheinfeld's address is c/o Fresh
America Corp. at One Lincoln Center, 5400 LBJ Freeway, Suite 1025,
Dallas, Texas 75240.
(5) Includes 15,000 shares subject to options issued to Mr. Hubbard under
the Stock Option Plans that are exercisable within 60 days. Mr.
Hubbard's address is 740 Airport Blvd., Salinas, California 93912.
(6) Consists of 87,367 shares subject to options issued to Mr. Grinstead
under the Stock Option Plans that are exercisable within 60 days and
800 shares owned by Mr. Grinstead for the benefit of his minor
children.
(7) Includes 17,813 shares subject to options issued to Mr. Stein under
the Stock Option Plans that are exercisable within 60 days.
(8) Includes 5,000 shares subject to options issued to Mr. Washburn under
the Stock Option Plans that are exercisable within 60 days.
(9) Based on information set forth in Schedule 13G, dated February 10,
1997, filed with the Securities and Exchange Commission by Scudder,
Stevens & Clark, Inc. ("SSC"), a registered investment advisor. SSC
reported it has sole voting power with respect to 172,600 shares and
sole dispositive power with respect to 292,700 shares. SSC disclaims
beneficial ownership of the shares as it does not own the shares or
have custody over such shares. SSC's advisory clients have their own
custody arrangements. The business address of SSC is 345 Park Avenue,
New York, New York 10154.
(10) Based on information set forth in Schedule 13D, dated December 12,
1995, filed with the Securities and Exchange Commission by Gruber &
McBaine Capital Management, Inc. ("GMCM"), Gruber & McBaine Capital
Management International ("Intl"), Jon D. Gruber ("Gruber"), J.
Patterson McBaine ("McBaine"), Lagunitas Partners ("LP") and GMJ
Investments, L.P. ("GMJ"). The filing group reported it had total
ownership of 197,000 shares. The beneficial ownership of the filing
group was reported as follows.
<TABLE>
<CAPTION>
Aggregate Dispositive
Beneficially Owned Voting Power Power
------------------------ ----------------------- ----------------------
Name Number Percent Sole Shared Sole Shared
- ------------ --------- ----------- -------- ---------- --------- ----------
<S> <C> <C> <C> <C> <C> <C>
GMCM 188,500 5.4% -- 188,500 -- 188,500
Gruber 250,000 7.1% 35,000 215,000 35,000 215,000
McBaine 227,000 6.5% 12,000 215,000 12,000 215,000
LP 74,000 2.1% -- 74,000 -- 74,000
GMJ 10,000 0.3% -- 10,000 -- 10,000
Intl 26,500 0.8% -- 26,500 -- 26,500
</TABLE>
The business address of Gruber & McBaine Capital Management is 50
Osgood Place, San Francisco, California 94133.
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(11) Includes 174,105 shares subject to options issued to certain directors
and executive officers of the Company.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
None.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Company has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
FRESH AMERICA CORP.
Date: May 1, 1997 By: /s/ Robert C. Kiehnle
-------------------------------------
Robert C. Kiehnle,
Executive Vice President and Chief
Financial Officer
(Principal Financial Officer)
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