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
May 3, 1999
Date of Report (Date of earliest event reported)
POORE BROTHERS, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 1-14556 86-0786101
(State or other jurisdiction (Commission File Number) (I.R.S. Employe
of incorporation) Identification No.)
3500 South La Cometa Drive
Goodyear, Arizona 85338
(Address of principal executive offices)(zip code)
(602) 932-6200
(Registrant's telephone number, including area code)
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ITEM 5. OTHER EVENTS
On May 3, 1999, the Registrant issued a press release regarding the signing
of a letter of intent to acquire Wabash Foods, LLC for 4.0 million shares of
common stock and assumption of debt. The Registrant simultaneously signed a
management contract pursuant to which the Registrant will manage the operations
of Wabash Foods pending completion of the acquisition. The Registrant will
receive a management fee for such services. Completion of the acquisition is
subject to the signing of a definitive purchase agreement, approval by the
Registrant's Board of Directors, and approval by the Registrant's shareholders.
The acquisition is expected to close in the third quarter. A copy of the press
release is attached hereto as Exhibit 99.1, which press release is hereby
incorporated by reference herein.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(c) Exhibits.
99.1 Press release of Poore Brothers, Inc. dated May 3, 1999.
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: May 5, 1999 By: /s/ Thomas W. Freeze
------------------------------------------
Thomas W. Freeze
Vice President and Chief Financial Officer
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EXHIBIT INDEX
Exhibit Number Description
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99.1 Press Release of Poore Brothers, Inc. dated May 3, 1999
EXHIBIT 99.1
POORE BROTHERS SIGNS LETTER OF INTENT
TO ACQUIRE FORMER KEEBLER SNACK BRANDS
May 3, 1999 -- Poore Brothers, Inc. (Nasdaq: POOR) announced today that it
has signed a letter of intent to acquire Wabash Foods, LLC for 4.0 million
shares of common stock and assumption of debt. The Company simultaneously signed
a management contract pursuant to which Poore Brothers will manage the
operations of Wabash Foods pending completion of the acquisition. Poore Brothers
will receive a management fee for such services.
Completion of the acquisition is subject to the signing of a definitive
purchase agreement, approval by Poore Brothers' Board of Directors, and approval
by Poore Brothers' shareholders. The acquisition is expected to close in the
third quarter.
Mr. Eric J. Kufel, President and CEO, stated "The acquisition of Wabash
Foods is a very positive financial and strategic action for Poore Brothers and
its shareholders. In addition to acquiring a profitable, growing business that
is currently generating over $12.0 million in annualized revenues, the
acquisition will result in diversification of Poore Brothers' lineup of unique,
consumer preferred snack brands and will provide Poore Brothers access to Wabash
Foods' national vending distribution network."
"The management contract fees, coupled with expected strong revenue growth
from Poore Brothers base business, should positively impact Company operating
results beginning in the second quarter. Upon completion of the acquisition,
Poore Brothers is projected to generate approximately $30.0 million in
annualized net sales and achieve profitability in the near future."
Wabash Foods produces and markets former Keebler Company owned salted snack
brands, including O'Boisies(R), Tato Skins(R), Pizzarias(R), Ripplins(R), Cha
Chos(R), Braids(R) and Knots(R), at its Bluffton, Indiana manufacturing
facility. Upon completion of the acquisition, the Company will possess potato
chip, potato crisp, tortilla chip and pretzel manufacturing capabilities.
Mr. Thomas W. Freeze, Poore Brothers Chief Financial Officer, commented,
"It is especially encouraging that Wabash Foods is profitable while operating at
approximately 15% of capacity. Upon completion of the acquisition, the Company
will be well positioned to grow its mid-western business by executing additional
strategic acquisitions and implementing base business growth programs that
leverage the Company's Bluffton, Indiana manufacturing capabilities."
"Since its inception in April 1998, Wabash Foods has done a tremendous job
re-building the former Keebler owned salted snack brands into major players in
the vending distribution channel and paving the way to grow the brands in the
retail and mass merchandiser channels. Currently, over 80% of Wabash Foods net
sales are derived from vending channel revenues, which are sold through Wabash's
national broker network."
"Wabash's success in the vending channel is a direct result of the
uniqueness and consumer acceptance of the former Keebler product lines. Keebler
supported these businesses with television advertising for over a decade,
creating strong brand awareness. Wabash intelligently capitalized on the equity
of these brands by launching the products into the vending channel, which has
resulted in mass product acceptance. Wabash's sales currently approximate
40,000,000 bags a year into the vending channel. This strong consumer acceptance
now needs to be translated into increased grocery distribution, which is Poore
Brother's strength."
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"The synergies from this acquisition include leveraging the Poore
Brothers(R) and Bob's Texas Style(R) brand products into Wabash Foods vending
distribution channel and conversely selling the Wabash Foods brands into Poore
Brothers' retail sales and distributor network. The Company also plans to
leverage Wabash Foods unique manufacturing capability to develop and launch
innovative new products."
Poore Brothers also announced that upon completion of the acquisition, Mr.
Larry R. Polhill is expected to join Poore Brothers' Board of Directors. Mr.
Polhill is President of American Pacific Financial Corporation, an asset
management firm based in San Bernardino, California, with investments in over 20
companies. The companies include Pate Foods Corporation, an Illinois based
manufacturer of salted snack products and Pate's Bakery, LLC, a manufacturer of
cookies and crackers. Wabash Foods is a wholly owned subsidiary of Pate Foods
Corporation. Mr. Polhill is currently a director of several privately owned
companies and functions in numerous other director and advisory roles.
"We are extremely pleased to be adding an executive of Mr. Polhill's
caliber to the Company's Board of Directors. He adds to Poore Brothers'
extensive industry and financial experience, excellent capital resources, and
strong relationships with existing and potential major customers." commented Mr.
Kufel.
Mr. Polhill commented, "This acquisition is an excellent opportunity for
shareholders of both companies because it creates an organization with the
management talent, manufacturing capabilities, and unique brands necessary to
profitably compete long-term in the salted snack category."
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Poore Brothers is a regional salted snack manufacturer, marketer and
distributor based in Goodyear, Arizona. The Company's primary emphasis is the
manufacture of premium batch-cooked potato chips under the Poore Brothers(R) and
Bob's Texas Style(R) brand names. In addition, the Company manufactures private
label potato chips for major retailers in Arizona and California and operates a
direct store delivery distribution business in Arizona and a merchandising
operation in south/central Texas.
For further information about Poore Brothers or this release, please
contact Thomas W. Freeze, Vice President and Chief Financial Officer, at (602)
932-6200.
Certain statements contained herein may be "forward-looking" statements (as
such term is defined in the Private Securities Litigation Reform 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.
