UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
September 17, 1997
Date of Report (Date of earliest event reported)
POORE BROTHERS, INC.
(Exact name of registrant as specified in its charter)
1-14556
DELAWARE 0-21857 86-0786101
(State or other jurisdiction of (Commission File Number) (I.R.S. Employer
incorporation) Identification No.)
3500 South La Cometa Drive
Goodyear, Arizona 85338
(Address of principal executive office)(zip code)
(602) 932-6200
(Registrant's telephone number, including area code)
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Item 5. Other Events
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On September 17, 1997, Poore Brothers, Inc. (the "Registrant")
announced the consolidation of the Registrant's manufacturing operations into
its new 60,000 square foot Goodyear, Arizona facility. As a result of this
consolidation, the Registrant is closing its LaVergne, Tennessee manufacturing
operation. The consolidation and closure of the Tennessee facility will result
in charges of approximately $500,000 and the elimination of about 35 jobs.
Substantially all of the charges will be recorded in the quarter ended September
30, 1997.
On September 17, 1997, the Registrant issued the press release attached
hereto as Exhibit 99.1, which press release is hereby incorporated by reference
herein.
Item 7. Financial Statements and Exhibits.
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(c) Exhibits.
99.1 Press release dated September 17, 1997.
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 hereunto duly authorized.
POORE BROTHERS, INC.
(Registrant)
Date: October 2, 1997 By: /s/ Thomas W. Freeze
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Thomas W. Freeze
Vice President and Chief Financial Officer
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EXHIBIT INDEX
Exhibit Number Description
99.1 Press Release dated September 17, 1997
EXHIBIT 99.1
POORE BROTHERS ANNOUNCES NEW ARIZONA PLANT START-UP AND
CONSOLIDATION OF MANUFACTURING OPERATIONS
Goodyear, AZ, September 17, 1997 - Poore Brothers, Inc. (NASDAQ: POOR) announced
the successful start-up of production at the Company's new 60,000 square foot
Goodyear, Arizona manufacturing facility and the consolidation of manufacturing
operations in that facility. The Company has recently closed its old Arizona
facilities. As a result of this consolidation, the Company will be closing its
LaVergne, Tennessee manufacturing operation in late September. The consolidation
and closure of the Tennessee facility will result in charges of approximately
$500,000 and the elimination of about 35 jobs. Substantially all of the charges
will occur in the current quarter.
The Company's new Goodyear, Arizona facility was built with the flexibility and
capacity to manufacture all Poore Brothers' products, thus eliminating the need
and costs associated with operating two smaller manufacturing facilities. Eric
J. Kufel, President and CEO, stated, "Our new Arizona operation is substantially
more efficient than our previous facilities. The savings associated with
operating one facility far outweigh the incremental shipping costs incurred as a
result of closing the Tennessee operation. Additionally, recent significant
investments in new production and quality assurance equipment will now allow us
to provide all customers with enhanced product quality. The Company anticipates
achieving gross profit improvements in the fourth quarter of 1997 due to lower
manufacturing costs as a result of these actions."
The Arizona start-up and the consolidation of operations from the Company's two
smaller facilities marks the end of an aggressive six-month restructuring plan
by the new management team designed to improve the Company's cost structure and
focus the Company on growing its core potato chip business. In addition to
construction of the new plant and manufacturing consolidation, management sold
the Company's unprofitable Texas distribution business and discontinued several
unprofitable non-Poore Brothers product lines from its Arizona distribution
business. In total, these moves resulted in the shedding of approximately $5
million in unprofitable revenues, which represented nearly 30% of the Company's
1996 reported sales.
Mr. Kufel added, "We are a leaner, more focused organization with a base
business that now has the potential to achieve profitable long-term growth.
Non-performing businesses have been eliminated and we are now aggressively
pursuing new revenue opportunities to replace those unprofitable businesses."
Poore Brothers also announced that since the beginning of the year, it has
achieved Poore Brothers potato chip distribution in over 600 new stores,
primarily in Southern California chains (including Ralphs, Vons, Lucky, Stater
Brothers, Hughes and Albertsons) and Colorado chains
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(including Safeway and Albertsons). Mr Kufel commented, "Although we have very
successfully acquired new shelf space for our products, we now need to invest in
trial-oriented marketing programs to stimulate strong new account growth. Our
ability to invest in marketing programs is directly linked to our ability to
generate cost savings."
The Company also announced that it had reached a two-year agreement with one of
the largest supermarket chains in Southern California, whereby Poore Brothers
will be the exclusive manufacturer of their private label potato chips.
Additionally, Poore Brothers products were selected recently to be featured in
November 1997 on QVC, the TV home-shopping network. Poore Brothers was honored
by the network as one of Arizona's best consumer products. QVC reaches over 60
million households across America.
Mr. Kufel added, "While 1997 has been a difficult transition year, the Company
is now well positioned and capable of achieving profitable long-term growth.
Without the unnecessary burden of subsidizing losses from non-strategic
operations, we look forward to investing in core business growth."
Poore Brothers manufactures batch cooked potato chips and distributes them under
the Poore Brothers brand name throughout the western and southern United States.
Poore Brothers manufactures and distributes private label potato chips for sale
by grocery chains served by its Arizona manufacturing facility, and also
distributes throughout Arizona a variety of snack food products manufactured by
other companies.
For further information about Poore Brothers or this release, please contact
Thomas W. Freeze, Vice President and Chief Financial Officer, at (602) 925-0731
(ext. 169).
Certain statements contained herein may be "forward-looking" statements (as such
term is defined in the Private Securities Litigation Act of 1995). Because such
statements include risks and uncertainties, actual results may differ materially
from those expressed or implied by such forward-looking statements. Factors that
could cause results to differ materially from those expressed or implied by such
forward-looking statements include, but are not limited to, those discussed in
filings made by the Company with the Securities and Exchange Commission.
