AMENDMENT TO FORM 10-Q
FORM 10-Q/A
The Form 10-Q previously electronically filed with the Securities and
Exchange Commission and made available to the public on September 20, 1996
was in error. That filing contained 10-Q information for Sterling Sugars,
Inc. for the quarter ended April 30, 1996.
The accompanying 10-Q is correct for the six months ended July 31, 1996.
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 10-Q/A
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended July 31, 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 0-1287
STERLING SUGARS, INC.
____________________________________________________________________
Exact name of registrant as specified in its charter
Delaware 72-0327950
_______________________________ ______________________________
State or other jurisdiction of IRS employer identification
incorporation or organization number
P. O. Box 572, Franklin, La. 70538
____________________________________________________________________
Address of principal executive offices Zip Code
Registrant's telephone number including area code 318 828 0620
Not Applicable
____________________________________________________________________
Former name, former address and former fiscal year, if changed since
last report.
Indicate by check mark whether 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 such shorter
period that the registrant was required to file such reports), and
(2) has been subject to such filing requirments for the past 90 days.
YES X NO
There were 2,500,000 common shares outstanding at August 31, 1996.
Total number of pages 14
-1-
STERLING SUGARS, INC.
I N D E X
PAGE
NUMBER
PART I: FINANCIAL INFORMATION:
ITEM 1. FINANCIAL STATEMENTS
Condensed balance sheets July 31, 1996
(unaudited) and January 31, 1996 I-1
Statements of earnings and retained earnings
Six months ended July 31, 1996 and 1995
(unaudited) I-2
Statements of earnings and retained earnings
Three months ended July 31, 1996 and 1995 I-3
Statements of cash flows
Six months ended July 31, 1996 and 1995 I-4
(unaudited)
Notes to condensed financial statements
Three and six months ended July 31, 1996
and 1995 I-6
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS I-8
PART II. OTHER INFORMATION:
ITEM 6. EXHIBITS AND REPORTS ON FORM 8K II-1
-2-
STERLING SUGARS, INC.
CONDENSED BALANCE SHEETS
July 31, January 31,
1996 1996
UNAUDITED NOTE
ASSETS: ---------------------------
CURRENT ASSETS:
Cash and short-term investments $ 1,744,786 $ 134,052
Accounts receivable 297,141 1,717,048
Inventories 724,125 12,359,866
Expenditures for future crops (Note B) 3,348,316 216,967
Deferred income taxes 244,646 160,600
Other current assets 360,445 165,868
------------- -------------
TOTAL CURRENT ASSETS $ 6,719,459 $ 14,754,401
------------- -------------
Property, plant and equipment - net $ 13,269,985 $ 11,980,458
------------- -------------
Expenditures for future crops $ 487,338 $ 487,338
------------- -------------
Notes receivable - net of allowance $ 720,541 $ 677,479
------------- -------------
Deferred loan acquisition costs $ 63,986 $ 69,893
------------- -------------
$ 21,261,309 $ 27,969,569
============= =============
LIABILITIES AND STOCKHOLDERS' EQUITY:
CURRENT LIABILITIES:
Accounts payable and accrued expenses $ 1,702,789 $ 5,967,246
Short-term debt - 3,658,334
------------- -------------
TOTAL CURRENT LIABILITIES $ 1,702,789 $ 9,625,580
------------- -------------
Long-term debt $ 3,897,882 $ 4,017,469
------------- -------------
Deferred income taxes $ 698,000 $ 698,000
------------- -------------
STOCKHOLDERS' EQUITY:
Common stock $ 2,500,000 $ 2,500,000
Additional paid in capital (Note C) 40,455 40,455
Retained earnings 12,422,183 11,088,065
------------- -------------
$ 14,962,638 $ 13,628,520
------------- -------------
$ 21,261,309 $ 27,969,569
============= =============
NOTE: The balance sheet at January 31, 1996 has been taken from the
audited financial statements at that date, and condensed.
See notes to condensed financial statements
I-1 -3-
STERLING SUGARS, INC.
STATEMENT OF EARNINGS AND RETAINED EARNINGS
(UNAUDITED)
SIX MONTHS ENDED JULY 31
---------------------------
1996 1995
---- ----
REVENUES:
Sugar and molasses sales $14,525,872 $ 3,707,078
Interest earned 36,730 42,868
Mineral leases and royalties 44,113 58,709
Gain (loss) on sale of depreciable assets (894) 120,000
Other 162,292 350,252
------------ ------------
$14,768,113 $ 4,278,907
------------ ------------
COSTS AND EXPENSES:
Cost of products sold $12,015,435 $ 3,179,135
General and administrative 400,763 348,706
Interest expense 200,112 211,513
------------ ------------
$12,616,310 $ 3,739,354
------------ ------------
NET EARNINGS BEFORE INCOME TAXES $ 2,151,803 $ 539,553
INCOME TAXES 817,685 205,030
------------ ------------
NET EARNINGS $ 1,334,118 $ 334,523
RETAINED EARNINGS AT BEGINNING OF PERIOD 11,088,065 8,968,456
------------ ------------
RETAINED EARNINGS AT END OF PERIOD $12,422,183 $ 9,302,979
============ ============
NET EARNINGS PER SHARE $ .53 $ .13
============ ============
See notes to condensed financial statements
I-2 -4-
STERLING SUGARS, INC.
STATEMENT OF EARNINGS AND RETAINED EARNINGS
(UNAUDITED)
THREE MONTHS ENDED JULY 31
---------------------------
1996 1995
---- ----
REVENUES:
Sugar and molasses sales $ 3,288,213 $ 1,787,045
Interest earned 28,406 2,960
Mineral leases and royalties 22,015 27,214
Loss on sale of depreciable assets (894) -
Other 147,304 19,413
------------ ------------
$ 3,485,044 $ 1,836,632
------------ ------------
COSTS AND EXPENSES:
Cost of products sold $ 2,265,460 $ 1,506,463
General and administrative 244,401 202,200
Interest expense 93,819 110,288
------------ ------------
$ 2,603,680 $ 1,818,951
------------ ------------
NET EARNINGS BEFORE INCOME TAXES $ 881,364 $ 17,681
INCOME TAXES 334,918 6,719
------------ ------------
NET EARNINGS $ 546,446 $ 10,962
RETAINED EARNINGS AT BEGINNING OF PERIOD 11,875,737 9,292,017
------------ ------------
RETAINED EARNINGS AT END OF PERIOD $12,422,183 $ 9,302,979
============ ============
NET EARNINGS PER SHARE $ .22 $ .00
============ ============
See notes to condensed financial statements
I-3 -5-
STERLING SUGARS, INC.
STATEMENT OF CASH FLOWS
(UNAUDITED)
SIX MONTHS ENDED JULY 31
---------------------------
1996 1995
---- ----
OPERATING ACTIVITIES:
Net earnings $ 1,334,118 $ 334,523
Adjustments to reconcile net earnings to net
cash provided by operating activities:
Amoritization of loan costs 5,907 5,907
Depreciation 752,125 712,795
(Gain) loss on sale of depreciable assets 894 ( 120,000)
Changes in operating assets and liabilities:
Decrease in accounts receivable 1,419,907 1,894,803
Increase in notes receivable ( 43,062) ( 65,050)
Decrease in inventories 11,635,741 3,203,121
Increase in other current assets ( 194,577) ( 105,821)
Increase in expenditures for future crops ( 3,131,349) (2,819,616)
Decrease in accounts payable and accrued exp. ( 4,270,990) (2,884,798)
Other items - net ( 84,046) ( 102,770)
------------ ------------
Net cash provided by operating activities $ 7,424,668 $ 53,094
------------ ------------
INVESTING ACTIVITIES:
Purchase of property, plant and equipment $( 2,045,046) $(1,732,119)
Proceeds from sale of depreciable assets 2,500 120,000
----------- ------------
Net cash used in investing activities $( 2,042,546) $(1,612,119)
------------ ------------
FINANCING ACTIVITIES:
Proceeds from short-term debt $ 855,000 $ 2,103,398
Payments on short-term debt ( 4,513,334) ( 645,905)
Payments on long-term debt ( 113,054) ( 476,593)
Proceeds from sale of treasury stock - 111,865
------------ ------------
Net cash used in financing activities $( 3,771,388) $ 1,092,765
------------ ------------
Increase in cash and temporary investments $ 1,610,734 $ (466,260)
Cash and temporary investments at the
beginning of the period 134,052 623,237
------------ ------------
Cash and temporary investments at the
end of the period $ 1,744,786 $ 156,977
============ ============
Continued
See notes to condensed financial statements
I-4 -6-
STERLING SUGARS, INC.
STATEMENT OF CASH FLOWS
(UNAUDITED)
Supplemental information:
Interest paid $ 207,643 $ 220,782
=========== ===========
Income taxes paid $ 373,500 $ 442,704
=========== ===========
Non-cash item:
Accrued management fee paid by
issuance of treasury stock $ - $ 50,635
=========== ===========
I-5 -7-
STERLING SUGARS, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
THREE AND SIX MONTHS ENDED JULY 31, 1996 AND 1995
(UNAUDITED) (CONTINUED)
A. CONDENSED FINANCIAL STATEMENTS:
The condensed balance sheets as of July 31, 1996, the
statements of earnings and retained earnings for the three and
six months ending July 31, 1996 and 1995, and the condensed
statements of cash flows for the six month periods then
ended have been prepared by the Company, without audit. In
the opinion of management, all adjustments (which include
only normal recurring adjustments) necessary to present
fairly the financial position, results of operations and
cash flows at July 31, 1996 and for all periods presented
have been made.
Certain information and footnote disclosures normally
included in financial statements prepared in accordance with
generally accepted accounting principles have been condensed
or omitted. It is suggested that these condensed financial
statements be read in conjunction with the 1996 annual report
to stockholders. The results of operations for the period
ending July 31, 1996 are not necessarily indicative of the
operating results expected for the full year.
I-6 -8-
STERLING SUGARS, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
THREE AND SIX MONTHS ENDED JULY 31, 1996 AND 1995
(UNAUDITED)
B. EXPENDITURES FOR FUTURE CROPS:
Expenditures incurred and income earned from sugar
operations for the 1996 and 1995 crops have been deferred
in order to properly match revenues and expenses. The
deferred items are as follows:
SIX MONTHS ENDED JULY 31
---------------------------
1996 1995
---- ----
DEFERRED COSTS: (1996 AND 1995 CROPS)
Factory $ 2,806,543 $ 2,401,730
Plantations 519,484 530,865
------------ ------------
$ 3,326,027 $ 2,932,595
Land preparation and planting costs
1997 and 1996 crops respectively 22,289 45,168
------------ ------------
$ 3,348,316 $ 2,977,763
============ ============
C. ADDITIONAL PAID IN CAPITAL:
As discussed in Form 10-K, filed for the year ended January 31,
1996, the Company entered into a technical service agreement with
M. A. Patout & Son, Ltd. (Patout). The agreement provided an
option for Patout to purchase 50,000 shares of the Company's
treasury stock at a price of $3.25 per share. In April, 1995
Patout exercised its option.
I-7 -9-
STERLING SUGARS, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Results of Operations:
Sugar and Molasses Sales:
Sugar and molasses sales for the six months ended July 31, 1996
and 1995 were as follows:
1996 1995
------ ------
Raw sugar sales $14,183,180 $ 3,451,739
Molasses sales 342,692 255,339
------------ ------------
$14,525,872 $ 3,707,078
============ ============
For the first six months of the Company's fiscal year ending January
31, 1997 (fiscal 1997), sales of raw sugar (1995 crop) increased com-
pared to the same period ending in fiscal 1996 (1994 crop). This in-
crease is the result of the Company having more sugar available to
market during the current period. At January 31, 1996, the Company had
on hand approximately 31,545 tons of raw sugar available for sale to
refiners as compared to 10,238 tons of raw sugar at January 31, 1995.
As of July 31, 1996, the Company had sold and shipped the 31,545 tons
of raw sugar held in inventory. For the six month period ending July
31, 1995, the Company had sold and shipped 7,542 tons of raw sugar.
For the three month periods ending July 31, 1996 and 1995, the Company
sold and shipped to refiners 6,921 and 3,892 tons of raw sugar, respect-
ively. The remaining 2,696 tons of raw sugar held in inventory at July
31, 1995 were marketed in the quarter ending October 31, 1995. The
sugar price for the 1995 crop increased and was $22.52 cwt.
For the 1994 crop, the average price was $22.00 cwt.
As of January 31, 1996, the Company had on hand approximately
715,711 gallons of molasses all of which had been sold as of April 30,
1996. At January 31, 1995, the Company had approximately 691,383
gallons of molasses on hand all of which had been sold as of April 30,
1995. For the 1995 molasses crop, the Company received $.40 per gallon
compared to $.35 per gallon for the sale of the 1994 molasses crop.
Interest Earned:
Interest earned for the six month periods ending July 31, 1996 and
1995 was $36,730 and $42,868, respectively. The decrease in the current
period is primarily attributable to the Company receiving $25,528 in
April, 1995 from the Sugarcane Safety Group for its share of interest
earned on workers compensation reserve funds held by the group. The
decrease, however, is offset by interest earned in the current period
from short-term investments. For the six month period ending July 31,
1996, interest earnings from short-term investments were $36,730 compared
to $17,340 for the six month period ending July 31, 1995. Of the
$36,730 earned from short-term investments, $28,406 was recognized in the
three month period ending July 31, 1996.
Mineral Leases and Royalties:
For the three and six month periods ending July 31, 1996, income
I-8 -10-
from mineral leases and royalties decreased and were $44,113 for the
six month period ending July 31, 1996 compared to $58,709 for the same
period ending in 1995. The decrease is primarily attributable to an oil
and gas lease orginally granted in February, 1995 on 274 acres for
$20,528 and not renewed for a second year. Also in April, 1995, the
Company had entered into a geophysical option agreement dated April 1,
1995 for $10,166 covering 985 acres. The agreement expired March 31,
1996 and was not renewed.
Gain on the Sale of Depreciable Assets:
The Company, for the three and six month periods ending July 31,
1996 recognized a loss of $894 on the sale of obsolete machinery and
equipment. For the six month period ending July 31, 1995, the Company
recognized a gain of $120,000 on the sale of obsolete machinery and
equipment.
Other Revenues:
Other revenues, which consist mainly of miscellaneous income items,
were $162,292 for the six month period ending July 31, 1996 and
$350,252 for the same period ending in 1995. These revenues, which can
vary considerably from year to year, generally include amounts received
for the sale of scrap, permitting seismic surveys conducted for oil and
gas exploration on Company owned land and other miscellaneous items.
The sharp decrease for the current period is the result of the Company
receiving $318,032 in April, 1995 from the Sugarcane Safety Group repre-
senting a return of capital from workers compensation reserve funds for
years that had been closed out. The decrease in the current six month
period is offset by an increase in other revenues for the three month
period ending July 31, 1996. This increase is primarily the result of
the Company receiving $141,127 in May, 1996 from the Sugarcane Safety
Group as a return of capital from closing prior year workers compensation
reserve funds.
Cost of Products Sold:
Cost of products sold increased for the three and six month periods
ending July 31, 1996 and were $2,265,460 and $12,015,435, respectively.
For the same three and six month periods in 1995, cost of products sold
were $1,506,463 and $3,179,135, respectively. Costs relating to sales
are charged to cost of products sold. Accordingly, costs have increased
for 1996 as would be expected with the increase in sales.
General and Administrative Expenses:
General and administrative expenses for the three and six month
periods ended July 31, 1996 have increased compared to the same periods
ending in 1995. These expenses were $400,763 and $348,706 for the six
month periods ending July 31, 1996 and 1995, respectively. The increase
in the current periods is primarily attributable to expense accruals
totaling $33,319 for contributions due the Company's pension and 401(K)
plans.
Interest Expense:
Interest expense decreased for the three and six month periods
I-9 -11-
ending July 31, 1996 compared to the same periods in 1995 and were
$200,112 for the six month period ending in 1996 and $211,513 for the
six month period ending July 31, 1995. The decrease in interest expense
is primarily the result of increases in working capital from the sale of
sugar inventory on hand at January 31, 1996, which avoided the need to
make short-term borrowings in the 1996 period, thus, no outstanding short-
term loans existed at July 31, 1996. At July 31, 1995, the Company had
short-term debt of $1,457,493.
Income Taxes:
The income taxes for the three and six month periods ending July
31, 1996 and 1995 were recorded at the statutory rate of 38 percent which
reflects the 34 percent federal corporate rate plus 4 percent state
income taxes.
Liquidity and Capital Resources:
At July 31, 1996, the Company had working capital of $5,016,670
compared to $5,128,821 at January 31, 1996. The working capital ratios
were 3.9 to 1 and 1.5 to 1, respectively.
For the 1996 crop, the Company budgeted $2,525,000 for capital
additions. These additions are expected to increase the average daily
grinding rate to in excess of 10,000 tons. These additions include
expansion of the raw house on the pan floor and centrifugal stations.
Also, improvements are being made to steam boilers #4 and #6
including installation of wet scrubbers to improve air emissions.
Management expects to fund the cost of the capital additions from
working capital and short-term borrowings through lines of credit
available to the Company. As of July 31, 1996, cash and short-term
investments totaled $1,744,786. Management does not expect to begin
using the lines of credit until the beginning of October, 1996.
Expenditures for Future Crops - Note B:
Factory Deferred Costs:
Factory deferred costs for the six month period ended July 31,
1996 were $2,806,543. Such costs for the same period in 1995 were
$2,401,730. The increase in these costs for the current period is
primarily attributable to the increase in budgeted costs for the idle
season maintenance and repair. The budgeted amount for the 1996 period
is $2,161,000 compared to $1,534,201 for the 1995 period. The budgeted
increase is primarily the result of increased maintenance and repair
from processing larger volumes of cane for the 1995 season.
Plantation Deferred Costs:
Plantation deferred costs decreased to $519,484 for the six
month period ending July 31, 1996 from $530,865 for the same period
in 1995. For the 1996 season, the total costs budgeted
for the plantations have been reduced. The amount budgeted for the
1996 period was $398,154. The budgeted amount for the 1995 period was
$496,033. These budgeted amounts are exclusive of planting costs
incurred in each preceding year. For the 1996 crop, these costs were
$167,782 and for the 1995 crop were $158,147. The increased budgeted
costs for the 1995 period were primarily costs to improve sugarcane
yields on marginal lands.
I-10 -12-
PART II - OTHER INFORMATION
ITEM 6 - EXHIBITS AND REPORTS ON FORM 8K
(a) Exhibits - None
(b) Reports on Form 8K
No reports on Form 8K have been filed during the
quarter for which this report is filed.
II-1 -13-
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act
of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned thereunto duly authorized.
STERLING SUGARS, INC.
---------------------
(REGISTRANT)
DATE September 12, 1996 By /S/ Craig P. Caillier
--------------------------- ---------------------
CRAIG P. CAILLIER
PRESIDENT AND
CHIEF EXECUTIVE OFFICER
DATE September 12, 1996 By /S/ Stanley H. Pipes
---------------------------- ---------------------
STANLEY H. PIPES
VICE PRESIDENT AND TREASURER
II-2 -14-
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