<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarter ended December 31, 1996 Commission File No.
----------------- 0-20624
-------
TODHUNTER INTERNATIONAL, INC.
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
DELAWARE 59-1284057
- --------------------------------------------------------------------------------
(State or other jurisdiction of IRS employer identification No.
incorporation or organization)
222 Lakeview Avenue, Suite 1500, West Palm Beach, FL 33401
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number including area code: (561) 655-8977
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 such shorter period that the registrant was required
to file such reports), and (2) has been subject to such filing requirements for
the past 30 days.
Yes X No
-------- --------
The number of shares outstanding of registrant's Common Stock, $.01 par value
per share, as of February 7, 1997 was 4,949,714.
<PAGE>
TODHUNTER INTERNATIONAL, INC.
INDEX TO FORM 10-Q
QUARTER ENDED DECEMBER 31, 1996
PART I FINANCIAL INFORMATION
Item 1 Financial Statements
Consolidated Balance Sheets -
December 31, 1996 and September 30, 1996
Consolidated Statements of Income -
Three Months Ended December 31, 1996 and 1995
Consolidated Statements of Cash Flows -
Three Months Ended December 31, 1996 and 1995
Notes to Consolidated Financial Statements
Item 2 Management's Discussion and Analysis of Financial Condition
and Results of Operations
PART II OTHER INFORMATION
Item 1 Legal Proceedings *
Item 2 Changes in Securities *
Item 3 Defaults Upon Senior Securities *
Item 4 Submission of Matters to a Vote of Security Holders *
Item 5 Other Information *
Item 6 Exhibits and Reports on Form 8-K
Signatures
* Item is omitted because answer is negative or item is inapplicable.
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
TODHUNTER INTERNATIONAL, INC.
CONSOLIDATED BALANCE SHEETS
December 31, September 30,
ASSETS 1996 1996
------------- -------------
(Unaudited) *
CURRENT ASSETS
Cash and cash equivalents $ 5,627,488 $ 2,594,246
Certificates of deposit - 4,494,375
Trade receivables 10,968,267 11,232,609
Other receivables 1,375,658 1,573,864
Inventories 19,283,401 18,614,304
Notes receivable, current maturities 1,534,236 1,510,389
Deferred income taxes 1,835,000 2,156,000
Other current assets 1,323,714 1,358,434
Assets of discontinued operations 352,996 544,719
------------- -------------
Total current assets 42,300,760 44,078,940
------------- -------------
LONG-TERM NOTES RECEIVABLE, less current
maturities 7,385,449 7,768,504
------------- -------------
PROPERTY AND EQUIPMENT 68,541,796 67,828,031
Less accumulated depreciation 25,636,270 24,705,488
------------- -------------
42,905,526 43,122,543
------------- -------------
PROPERTY HELD FOR LEASE 2,362,361 2,317,175
Less accumulated depreciation 901,856 871,330
------------- -------------
1,460,505 1,445,845
------------- -------------
GOODWILL, less accumulated amortization 446,727 454,913
OTHER ASSETS 1,909,148 1,988,051
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$ 96,408,115 $ 98,858,796
------------- -------------
------------- -------------
* From audited financial statements.
See Notes to Consolidated Financial Statements.
<PAGE>
TODHUNTER INTERNATIONAL, INC.
CONSOLIDATED BALANCE SHEETS
December 31, September 30,
LIABILITIES AND STOCKHOLDERS' EQUITY 1996 1996
------------ ------------
(Unaudited) *
CURRENT LIABILITIES
Current maturities of long-term debt $ 2,102,206 $ 2,152,206
Accounts payable 4,831,036 5,053,661
Accrued interest expense 553,463 1,261,542
Other accrued expenses 1,907,818 1,674,539
Liabilities of discontinued operations 354,556 419,933
------------ ------------
Total current liabilities 9,749,079 10,561,881
LONG-TERM DEBT, less current maturities 48,262,879 51,292,490
DEFERRED INCOME TAXES 4,770,000 4,784,000
OTHER LIABILITIES 341,022 354,330
------------ ------------
63,122,980 66,992,701
------------ ------------
MINORITY INTEREST 418,249 417,784
------------ ------------
STOCKHOLDERS' EQUITY
Preferred stock, par value $.01 per share;
authorized 2,500,000 shares,
no shares issued - -
Common stock, par value $.01 per share;
authorized 10,000,000 shares 49,497 49,235
Additional paid-in capital 11,945,777 11,788,539
Retained earnings 20,871,612 19,610,537
------------ ------------
32,866,886 31,448,311
------------ ------------
$ 96,408,115 $ 98,858,796
------------ ------------
------------ ------------
* From audited financial statements.
See Notes to Consolidated Financial Statements.
<PAGE>
TODHUNTER INTERNATIONAL, INC.
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
Three Months Ended
December 31,
----------------------------
1996 1995
------------ ------------
Sales $ 29,573,894 $ 30,205,377
Less excise taxes 10,659,633 11,178,249
------------ ------------
Net sales 18,914,261 19,027,128
Cost of goods sold 13,960,520 13,938,345
------------ ------------
Gross profit 4,953,741 5,088,783
Selling, general and administrative
expenses 2,996,628 2,680,489
------------ ------------
Operating income 1,957,113 2,408,294
------------ ------------
Other income (expense):
Interest income 206,732 263,743
Interest expense (1,065,594) (1,199,767)
Other, net 506,928 224,315
------------ ------------
(351,934) (711,709)
------------ ------------
Income before income taxes 1,605,179 1,696,585
------------ ------------
Income tax expense :
Current 37,104 33,000
Deferred 307,000 173,000
------------ ------------
344,104 206,000
------------ ------------
Net income $ 1,261,075 $ 1,490,585
------------ ------------
------------ ------------
Earnings per common share:
Primary $ 0.25 $ 0.30
------------ ------------
------------ ------------
Fully diluted $ 0.25 $ 0.30
------------ ------------
------------ ------------
Common shares and equivalents outstanding:
Primary 4,964,733 4,941,416
------------ ------------
------------ ------------
Fully diluted 4,965,789 4,944,456
------------ ------------
------------ ------------
See Notes to Consolidated Financial Statements.
<PAGE>
TODHUNTER INTERNATIONAL, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Three Months Ended
December 31,
---------------------------
1996 1995
------------ ------------
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 1,261,075 $ 1,490,585
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation 986,937 928,034
Amortization 64,827 50,027
(Gain) on investment transactions (8,000) (3,406)
(Gain) on sale of property and equipment (13,175) (13,800)
Equity in earnings of affiliates 6,142 4,169
Deferred income taxes 307,000 173,000
Minority interest in net income 465 465
Changes in assets and liabilities:
(Increase) decrease in:
Receivables 462,548 (1,215,679)
Inventories (669,097) 180,432
Other current assets 34,720 (77,486)
Increase (decrease) in:
Accounts payable (222,625) 1,070,326
Accrued interest expense (708,079) (685,357)
Accrued expenses 233,279 (550,281)
Other liabilities (13,308) (18,283)
Discontinued operations 126,346 702,690
------------ ------------
Net cash provided by
operating activities 1,849,055 2,035,436
------------ ------------
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from sale of property and
equipment 24,486 13,800
Proceeds from sale of marketable
securities 8,000 3,406
Principal payments received on notes
receivable 373,208 465,652
Purchase of property and equipment (795,891) (1,015,613)
Disbursements for notes receivable (14,000) -
Purchase of certificates of deposit - (4,529,503)
Redemption of certificates of deposit 4,494,375 4,284,434
(Increase) decrease in other assets 16,120 682
------------ ------------
Net cash provided by (used in)
investing activities $ 4,106,298 $ (777,142)
------------ ------------
(Continued)
<PAGE>
TODHUNTER INTERNATIONAL, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)
(Unaudited)
Three Months Ended
December 31,
---------------------------
1996 1995
------------ ------------
CASH FLOWS FROM FINANCING ACTIVITIES
Net borrowings (payments) under line of
credit arrangements $ (2,779,611) $ (893,416)
Proceeds from issuance of common stock 157,500 -
Principal payments on long-term borrowings (300,000) (669,459)
------------ ------------
Net cash (used in) financing activities (2,922,111) (1,562,875)
------------ ------------
Net increase (decrease) in cash and
cash equivalents 3,033,242 (304,581)
Cash and cash equivalents:
Beginning 2,594,246 2,000,581
------------ ------------
Ending $ 5,627,488 $ 1,696,000
------------ ------------
------------ ------------
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION -
Cash payments for:
Interest $ 1,773,673 $ 1,885,124
------------ ------------
------------ ------------
Income taxes $ - $ -
------------ ------------
------------ ------------
See Notes to Consolidated Financial Statements.
<PAGE>
TODHUNTER INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Note 1. Basis of Presentation
The consolidated financial statements included herein have been prepared by
the Company, without audit, pursuant to the rules and regulations of the
Securities and Exchange Commission. Certain information and footnote
disclosures normally included in financial statements prepared in accordance
with generally accepted accounting principles have been condensed or omitted
pursuant to such rules and regulations. In the opinion of management, all
adjustments, consisting only of normal recurring adjustments necessary for a
fair presentation of the financial information of the periods indicated have
been included. For further information regarding the Company's accounting
policies, refer to the consolidated financial statements and related notes
included in the Company's Annual Report on Form 10-K for the year ended
September 30, 1996.
Note 2. Inventories
The major components of inventories are:
December 31, 1996 September 30, 1996
----------------- ------------------
(Unaudited)
Finished goods $ 11,706,284 $ 12,032,447
Work in process 877,940 549,673
Raw materials and supplies 6,699,177 6,032,184
--------------- ------------
$ 19,283,401 $ 18,614,304
--------------- ------------
--------------- ------------
<PAGE>
TODHUNTER INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued
(Unaudited)
<TABLE>
<CAPTION>
Note 3. Long-Term Debt
<S> <C>
Long-term debt consists of the following as of December 31, 1996.
Senior notes, interest payable semiannually at 8.905%, principal
payments of $6,800,000 on October 30, 1999, $7,933,333 on
October 30, 2000 and 2001, $4,533,334 on October 30, 2002 and
$3,400,000 on October 30, 2003 and 2004, unsecured (1) $ 34,000,000
Revolving credit note of $20,000,000, interest payable monthly at
the prime rate for domestic loans and at 150 basis points above the
LIBOR rate for Eurodollar loans, principal is due in full
November 1, 1999. The maximum amount which can be drawn
on the revolving note is based on the borrowing base as specified
in the agreement, unsecured 6,905,874
Bank note payable, interest at the prime rate plus 1%,
quarterly principal payments of $250,000, collateralized by real
property, equipment, machinery and trade receivables in the
Virgin Islands (2) 6,500,000
Note payable, interest at 6%, monthly principal payments of
$80,739, unsecured 2,825,877
Note payable, interest at the prime rate, monthly principal payments
of $16,667 133,334
------------
50,365,085
2,102,206
------------
Less current maturities
$ 48,262,879
------------
------------
</TABLE>
(1) The Company has entered into an interest rate swap agreement accounted for
as a hedge with a bank. The agreement calls for the Company to exchange,
as of May 1 and November 1 through 2004, interest payment streams
calculated on a principal balance starting at $4,000,000 and reducing
starting in November 1999. The Company's interest is calculated based upon
a floating rate of 1.06% above the six-month London Interbank Offered Rate
(LIBOR). The bank's rate is 8.905%.
(2) The Company has entered into an interest rate swap agreement accounted for
as a hedge with a bank. The agreement calls for the Company to exchange,
as of January 1, April 1, July 1, and October 1, through 2003, interest
payment streams calculated on a principal balance starting at $7,500,000
and reducing starting April 1, 1996. The Company's rate is fixed at 8.46%.
The long-term debt contains various restrictive covenants related to fixed
charge coverage, interest expense coverage, net worth and debt limitation. All
covenants have been met.
<PAGE>
TODHUNTER INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued
(Unaudited)
Note 4. Earnings Per Common Share
Primary earnings per common share are calculated by dividing net income by
the average common stock outstanding and common stock equivalents assuming the
exercise of stock options at an average market price. On a fully diluted basis,
shares outstanding are adjusted to assume the exercise of stock options at the
ending market price.
Three Months Ended
------------------------
December 31
------------------------
1996 1995
Net income $ 1,261,075 $ 1,490,585
----------- -----------
----------- -----------
Determination of shares:
Weighted average number of
common shares outstanding 4,923,749 4,941,416
Shares issuable on exercise,
of stock options, net of shares
assumed to be purchased out of
proceeds at ending market price 42,040 3,040
----------- -----------
Average common shares out-
standing for fully diluted
computation 4,965,789 4,944,456
----------- -----------
----------- -----------
Earnings per common share
Primary $ 0.25 $ 0.30
Fully diluted $ 0.25 $ 0.30
Note 5. Discontinued Operations
During July 1995, the Company decided to discontinue the operations of
Blair Importers, Ltd. and sold assets consisting of certain trademarks and
inventory in September 1995. There was no revenue or interest expense allocated
to discontinued operations during the quarters ended December 31, 1996 and 1995.
<PAGE>
TODHUNTER INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued
(Unaudited)
Note 5. Discontinued Operations (Continued)
As of December 31, 1996, the assets and liabilities of the discontinued
operations consisted of the following:
Assets
Cash and cash equivalents $ 17,308
Receivables 360,947
Inventories 519,956
Other current assets 4,107
Less adjustment for write-down of accounts
receivable and inventories to estimated net
realizable value (549,322)
-----------
$ 352,996
-----------
-----------
Liabilities
Accounts payable $ 23,728
Anticipated future expenses to disposal date 330,828
-----------
$ 354,556
-----------
-----------
The foregoing assets and liabilities have been classified as current as of
December 31, 1996 since the discontinuance is expected to be completed during
1997.
<PAGE>
TODHUNTER INTERNATIONAL, INC.
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
GENERAL
The Company's primary businesses are production of citrus and cane-based
alcoholic beverage ingredients for other manufacturers; contract bottling of
coolers, prepared cocktails and other beverages; and production and bottling of
popular price spirits for distribution in the Southeast. The Company also
imports and distributes alcoholic beverages throughout the United States and
produces vinegar, cooking wine and other alcohol related products.
Beverage ingredients produced by the Company include fortified citrus wine,
citrus brandy, citrus and cane spirits and rum. Also included in this category
is grain alcohol which the Company buys in bulk and resells as bulk or packaged
grain alcohol. During fiscal 1995, the Company expanded the production
capacity of the Virgin Islands facility by 40% and shifted most of its domestic
rum production offshore in order to capitalize on the lower raw material costs
available in the Virgin Islands.
Popular price spirits produced by the Company are distributed under the
Company's proprietary labels and those of major retailers of liquor in the
Southeast, and include rum, vodka, gin, cordials, brandies and whiskies. Since
the acquisition of the Virgin Islands operations in February 1994, the Company
also produces and sells popular price spirits in the U.S. Virgin Islands. The
Company is importing, marketing and distributing a limited number of alcoholic
beverages from the former Blair product line in the United States. These
brands, which include the Company's own Cruzan Rum trademark, are being marketed
by the Company on a national basis.
The Company's contract bottling operations consist primarily of bottling
coolers, prepared cocktails and other nonalcoholic beverages. The
underutilization of the Company's bottling facilities has significantly impacted
the Company's profitability due to its high overhead costs. Management is
actively seeking to utilize its remaining capacity by bottling additional types
of beverages and through expansion in the territories it serves.
During fiscal 1995, the Company completed the construction of a vinegar
production facility in Louisville, Kentucky. This state-of-the-art facility has
more than doubled the Company's previous vinegar production capacity. Shipments
from the new Kentucky facility commenced in 1995.
During the quarter ended September 30, 1995, the Company discontinued the
operations of Blair Importers, Ltd., sold substantially all of its assets,
terminated it employees, closed its facilities and began liquidating its
remaining assets. The Company acquired Blair in August 1994. At that time,
management believed that Blair would enhance the Company's national sales
capabilities and provide an entry to the imported wine and spirits segment of
the alcohol beverage market. However, beginning in January 1995, Blair incurred
substantial operating losses. In 1995, the losses from Blair amounted to
$10,740,124 (net of tax benefit of $935,883), including operating losses during
the phase out period of $1,871,173. These losses resulted from, among other
things, the failure to meet exaggerated sales and gross profit projections
furnished to the Company, certain unrecorded liabilities, surplus inventories,
and inadequate reserves for uncollectible receivables, all of which were
uncovered subsequent to the acquisition. The Company is reserving all rights
that it has to indemnification from the selling shareholders of Blair under the
Merger Agreement relating to the acquisition.
<PAGE>
TODHUNTER INTERNATIONAL, INC.
The Company's net sales and gross margins (gross profit as a percentage of
net sales) vary depending on the mix of business among the Company's product
lines. Historically, gross margins have been highest in beverage ingredients and
lower in popular price, contract bottling and vinegar and cooking wine
operations. Within its contract bottling operations, sales and gross margins
have varied substantially based upon the mix of business from the Company's Type
A and Type B bottling customers. Although gross profit per case for the
Company's Type A and Type B bottling customers is approximately equal, Type A
customers pay the Company to purchase all raw materials. As a result, given the
same volume, net sales and cost of goods sold with respect to products bottled
for Type A bottling customers are higher, and gross margins are lower, than for
Type B bottling customers which supply their own raw materials.
Net sales represent the Company's gross sales less excise taxes. Excise
taxes are generally payable on products bottled by the Company. In addition,
excise taxes are payable on sales of industrial alcohol to certain customers.
Accordingly, excise taxes vary from period to period depending upon the
Company's product and customer mix.
The Company has a limited number of customers, and these customers often
purchase beverage ingredients in significant quantities or place significant
orders for bottling services. Accordingly, the size and timing of purchase
orders and product shipments can cause operating results to fluctuate
significantly from quarter to quarter. Additionally, some Company products
generate higher profit margins than others, and changes in the Company's product
mix will cause gross margins to fluctuate. Certain aspects of the Company's
business are also somewhat seasonal, with increased demand for the Company's
bottling services during the summer months and increased production of the
Company's beverage ingredients during the months from October to June,
corresponding to the Florida citrus-growing season. As a result of these
factors, the Company's operating results vary significantly from quarter to
quarter.
FORWARD LOOKING STATEMENTS
Management's Discussion and Analysis of Financial Condition and Results of
Operations contains, among other things, information regarding revenue growth,
expenditure levels and plans for development. These statements could be
considered forward looking statements that involve a number of risks and
uncertainties. The following is a list of factors, among others, that could
cause actual results to differ materially from the forward looking statements;
business conditions and growth in certain market segments and industries and the
general economy; competitive factors including increased competition and price
pressures; availability of third party component products at reasonable prices;
excise taxes; foreign currency exposure; changes in product mix between and
among product lines; lower than expected customer orders and quarterly seasonal
fluctuation of those orders; and product shipment interruptions.
<PAGE>
TODHUNTER INTERNATIONAL, INC.
RESULTS OF OPERATIONS
The following tables set forth certain income statement items as a
percentage of net sales, and certain information on net sales in each of the
Company's operating categories.
THREE MONTHS ENDED DECEMBER 31,
1996 1995
------ ------
Net sales 100.0% 100.0%
Cost of goods sold 73.8 73.3
------ ------
Gross margin 26.2 26.7
Selling, general and
administrative expenses 15.9 14.1
------ ------
Operating income 10.3 12.6
Interest expense (5.6) (6.3)
Other income (expense), net 3.8 2.6
------ ------
Income before income taxes 8.5 8.9
Income tax expense (1.8) (1.1)
------ ------
Net income 6.7% 7.8%
------ ------
------ ------
THREE MONTHS ENDED DECEMBER 31,
1996 1995
------ ------
(in thousands)
Beverage ingredients $ 7,913 $ 7,838
Popular price spirits 5,064 4,824
Contract bottling 2,206 3,157
Vinegar and cooking wine 2,231 1,654
Bahamian operations 769 762
Other 731 802
-------- --------
$ 18,914 $ 19,027
-------- --------
-------- --------
The following table provides certain unit sales volume data for each of the
periods indicated.
THREE MONTHS ENDED DECEMBER 31,
1996 1995
------ ------
(in thousands)
Beverage ingredients:
Distilled products,
in proof gallons 2,913 2,925
Fortified citrus wine,
in gallons 1,646 1,584
Popular price spirits,
in cases 288 341
Contract bottling, in cases 706 844
<PAGE>
TODHUNTER INTERNATIONAL, INC.
A. THREE MONTHS ENDED DECEMBER 31, 1996 VS. THREE MONTHS ENDED DECEMBER 31,
1995
NET SALES. Net sales for the three months ended December 31, 1996 were
$18.9 million, a decrease of .6% from net sales of $19.0 million during the
comparable prior year period.
Beverage Ingredients net sales increased 1.1% during the three months
ended December 31, 1996. Distilled products volume decreased .4% and fortified
citrus wine volume increased 3.9%. The increases in citrus, cane and grain
spirits volume were offset by decreases in citrus brandy and rum volume. With
the exception of the increase in grain spirits volume, management attributes
these product volume changes to timing of customer orders. Grain spirits volume
increased 39.4% due to increased export sales of bulk grain spirits. These
customers had previously purchased packaged grain alcohol and are now buying in
bulk to reduce costs. The average unit price for distilled products decreased
.3% due to a combination of product and customer mix, price increases and
commodity pricing pressures. The average unit price for fortified citrus wine
increased .9%.
Net sales of popular price spirits increased 5.0%. The increase in net
sales is due to a combination of product mix and the introduction of new higher
priced products. Volume in this category decreased due to increased
competition.
In the Company's contract bottling operations, net sales decreased 30.1%.
The net decrease in sales was due to a decrease in sales of packaged grain
alcohol as described above, the loss of a Type A bottling customer and the
timing of customer orders.
Net sales of vinegar and cooking wine increased 35.0%. The increase in net
sales was due to the Company's new vinegar production facility which is now
fully operational.
GROSS PROFIT. Gross profit decreased to $5.0 million during the three
months ended December 31, 1996 from $5.1 million for the comparable prior year
period. Gross margin remained relatively constant at 26.2% compared to 26.7% in
the prior year period as the Company's sales mix was relatively consistent for
each period.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. Selling, general and
administrative expenses during the three months ended December 31, 1996 were
$3.0 million, compared to $2.7 million for the comparable prior year period and
as a percentage of net sales, were 15.9% during the three months ended December
31, 1996 compared to 14.1% for the comparable prior year period. The dollar
increase was primarily due to the Company's increased emphasis on marketing its
branded products.
INTEREST EXPENSE. Interest expense decreased approximately $134,000 during
the three months ended December 31, 1996 compared to the three months ended
December 31, 1995 due to the Company paying down debt.
INCOME TAX EXPENSE. The Company's effective income tax rate was 21% for
the three months ended December 31, 1996 compared to 12% for the comparable
prior year period. The low tax rate is due to income from the Virgin Islands
operations which has a 90% exemption from income taxes.
<PAGE>
TODHUNTER INTERNATIONAL, INC.
B. FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES
The Company's net cash provided by operating activities was $1.8
million for the three months ended December 31, 1996, compared to $2.0 million
for the three months ended December 31, 1995. The largest components of net cash
provided by operating activities are summarized as follows for the three months
ended December 31, 1996 and 1995:
December 31, December 31,
1996 1995
----------- -----------
Net income $ 1,261,075 $ 1,490,585
Adjustments to net income:
Depreciation and amortization 1,051,764 978,061
Deferred income taxes 307,000 173,000
Change in operating assets and liabilities (882,562) (1,296,328)
Discontinued operation 126,346 702,690
Other (14,568) (12,572)
----------- -----------
Net cash provided by operating activities $ 1,849,055 $ 2,035,436
----------- -----------
----------- -----------
The Company had net income of $1.3 million for the three months ended
December 31, 1996, compared to net income of $1.5 million for the three months
ended December 31, 1995. The primary reason for the decrease in net income was
the Company's increased emphasis on marketing its branded products. This
increased selling, general and administrative expense by approximately $353,000.
For the three months ended December 31, 1996, the Company's deferred income
tax assets decreased due to its use of a portion of its net operating loss
carryforward. Also, the Company's deferred income tax liabilities decreased due
to its recognition of installment sale income for income tax purposes. This
resulted in $307,000 of deferred income tax expense for the three months ended
December 31, 1996.
The Company's operating assets and liabilities increased $882,562 for the
three months ended December 31, 1996, compared to $1,296,328 for the three
months ended December 31, 1995. The Company's working capital requirements
fluctuate seasonally with the demand for its contract bottling services and
production of beverage ingredients. Demand for contract bottling services is
generally highest during the months from April to October and beverage
ingredients are produced from October to June, corresponding to the Florida
citrus-growing season. The Company's increase in operating assets and
liabilities was less for the three months ended December 31, 1996 compared to
the prior period due to a decrease in contract bottling.
The net assets of the discontinued operations at the end of fiscal 1995
were $2,853,063. During fiscal 1996, the Company liquidated most of these
assets and liabilities and as of December 31, 1996, the net liabilities of
discontinued operations were $1,560.
Net cash provided by investing activities was $4.1 million for the three
months ended December 31, 1996, compared to net cash used in investing
activities of $.8 million for the three months ended December 31, 1995. During
the three months ended December 31, 1996, the Company received $.4 million from
payments on notes receivable, purchased $.8 million of property and equipment
and redeemed $4.5 million of certificates of deposit. During the three months
ended December 31, 1995, the
<PAGE>
TODHUNTER INTERNATIONAL, INC.
B. FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES (Continued)
Company received $.5 million from payments on notes receivable and purchased
$1.0 million of property and equipment.
During the three months ended December 31, 1996, the Company's net cash
used in financing activities was $2.9 million, compared to $1.6 million for the
three months ended December 31, 1995. During the three months ended December
31, 1996, the Company reduced its line of credit by $2.8 million, received
proceeds from the issuance of common stock of $.2 million and paid down
long-term debt by $.3 million. During the three months ended December 31, 1995,
the Company reduced its line of credit by $.9 million and paid down its
long-term debt by $.7 million.
The Company's long-term debt was $50.4 million as of December 31, 1996, and
its ratio of long-term debt to equity was 1.5 to 1.
The Company has operated in the Bahamas since 1964. Under Bahamian law,
the Company pays no taxes on the profits from these operations, and such profits
have generally been retained in the Bahamas, including a portion which has been
invested in real estate. In addition, the Company has generally not paid United
States federal income taxes on such profits. Repatriation of these profits
could result in a significant United States federal income tax liability to the
Company.
Management believes that cash provided by operating activities and the
availability of cash from the revolving credit note will be sufficient to fund
the Company's operations and anticipated investment activities for at least the
next twelve months.
<PAGE>
TODHUNTER INTERNATIONAL, INC.
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibit Index
Exhibit No. Description
----------- -----------
10.14(c) Third Modification of Loan Agreement dated as of
December 18, 1996, amending Loan Agreement dated as of
November 22, 1994, as further amended.
27 Financial Data Schedule
(b) Reports on Form 8-K
No reports on From 8-K have been filed during the quarter ended
December 31, 1996.
<PAGE>
TODHUNTER INTERNATIONAL, INC.
Signatures
----------
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.
Date: February 13, 1997 /s/ A. Kenneth Pincourt, Jr.
-----------------------------------
A. Kenneth Pincourt, Jr.
Chairman
and Chief Executive Officer
Date: February 13, 1997 /s/ Troy Edwards
-----------------------------------
Troy Edwards
Chief Financial Officer,
Treasurer and Controller
<PAGE>
THIRD MODIFICATION OF LOAN AGREEMENT
THIS AGREEMENT is made as of the 18th day of December, 1996, by and
between FIRST UNION NATIONAL BANK OF FLORIDA, a national banking association
acting as Lender and as Agent pursuant to the Loan Agreement (the "Lender"),
TODHUNTER INTERNATIONAL, INC., a Delaware corporation (the "Borrower") and
TODHUNTER IMPORTS, LTD., a New York corporation (formerly known as Blair
Importers, Ltd.) (the "Guarantor").
WITNESSETH:
WHEREAS, Lender, Borrower and Guarantor entered into a Loan Agreement dated
as of November 22, 1994 as modified by Modification of Loan Agreement dated as
of February 26, 1996 and Modification of Loan Agreement dated as of August 19,
1996 (the "Loan Agreement") in connection with which Lender made available to
Borrower a revolving line of credit in the maximum principal amount of TWENTY
MILLION and no/100s Dollars ($20,000,000.00) (the "Revolving Line of Credit")
evidenced by the Revolving Credit Note, secured and evidenced by the Blair
Guaranty and the other Loan Documents, as defined in the Loan Agreement; and
WHEREAS, Lender and Borrower have agreed to extend the date for advancing
Revolving Loans and final payment of all amounts due under the Revolving Credit
Note and the other Loan Documents to November 1, 1999 and to revise certain
financial covenants in the Loan Agreement by amending the Loan Agreement and by
Borrower executing and delivering a Renewal Revolving Credit Note in the face
amount of Twenty Million and no/100s Dollars ($20,000,000) (the "Renewal Note");
and
WHEREAS, the Guarantor has agreed to execute this Agreement to evidence its
consent to the amendments to the Loan Agreement contained herein and to affirm
the continuing validity of the Blair Guaranty, after the amendments contained
herein.
NOW, THEREFORE, in consideration of the mutual promises and covenants of
this agreement and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, Lender, Borrower and Guarantor
agree as follows:
1. RECITALS/TERMS. All of the recitals set forth above are true and
correct and by this reference are made a material part of this Agreement. All
capitalized terms used herein which are defined in the Loan Agreement shall have
the meaning provided therein when used herein unless the context shall require
otherwise.
2. DEFINITIONS.
(a) The definition of the term Revolving Loan Termination Date is
hereby amended to read as follows:
"REVOLVING LOAN TERMINATION DATE shall mean the earliest of (i)
November 1, 1999; (ii) the date of termination by the Required
Lenders after the occurrence of an Event of Default; (iii) such
date of termination as is mutually agreed upon by the Lenders and
the Borrower, and (iv) the date after all Obligations have been
paid in full and no Lender is any longer obligated to make any
Revolving Loans hereunder."
b) The term "Notes" shall include the Renewal Note; and
<PAGE>
c) The term "Revolving Credit Note" shall include the Renewal Note.
Borrower hereby acknowledges that the Renewal Note continues to evidence
the Revolving Loans and that the amendment to the definition of the Revolving
Loan Termination Date applies to that term as used in the Renewal Note so that
the unpaid principal balance of the Renewal Note shall be due on November 1,
1999 unless due sooner pursuant to the terms of the Loan Documents.
3. REVISIONS TO FINANCIAL COVENANTS.
(a) Section 7.23(a) is hereby amended to read as follows:
"(a) LEVERAGE RATIO. Permit the ratio of Total Funded Debt
to Consolidated Tangible Net Worth to exceed 2.25 to 1
at any time from September 30, 1996 through September
29, 1997 or to exceed 1.75 to 1 at any time from
September 30, 1997 through September 29, 1998 or to
exceed 1.50 to 1 at any time on or after September 30,
1998." Compliance shall be certified by the Chief
Executive Officer or the Chief Financial Officer of
Borrower at the end of each fiscal quarter of Borrower
in form acceptable to Lender.
(b) Section 7.23(b) is hereby amended to read as follows:
"(b) FIXED CHARGE COVERAGE TEST. Permit the ratio of
Earnings Before Depreciation, Amortization, Interest
and Taxes to actual Fixed Charges tested as of the end
of each fiscal quarter of Borrower for each period of
four consecutive fiscal quarters ending with that
fiscal quarter commencing October 1, 1995 to be less
than 1.50 to 1."
(c) Section 7.23(c) is hereby amended to read as follows:
"(c) INTEREST COVERAGE TEST. Permit the ratio of Earnings
Before, Depreciation, Amortization, Interest and Taxes
to Interest Expense at the end of the fiscal year of
Borrower ending September 30, 1997 to be less than 2.25
to 1 and at the end of each fiscal year of Borrower
thereafter to be less than 2.50 to 1."
(d) Section 7.23(d) is hereby amended to read as follows:
"(d) MAINTENANCE OF NET WORTH. Permit its Consolidated
Tangible Net Worth to be less than $27,000,000.00
during the period beginning on September 30, 1996
through September 29, 1997, less than $30,000,000.00
during the period beginning on September 30, 1997
through September 29, 1998, less than $33,000,000.00
during the period beginning September 30, 1998 through
September 29, 1999 or less than $36,000,000.00 on and
after September 30, 1999. Compliance shall be
certified by the Chief Executive Officer or Chief
-2-
<PAGE>
Financial Officer of Borrower at the end of each fiscal
quarter of Borrower."
4. BLAIR GUARANTY. Guarantor hereby ratifies and confirms the continuing
validity of the Blair Guaranty and any other documents or agreements given by
Guarantor in connection with the Revolving Line of Credit, the Loan Agreement or
any other Loan Documents notwithstanding the amendments to the Loan Agreement
contained herein and hereby further consents to such amendments.
5. NO DEFAULT. Borrower hereby warrants and represents to Lender that,
since the date of the August 19, 1996 Modification of Loan Agreement, Borrower
is in compliance with all provisions of the Loan Agreement and all other Loan
Documents and that no default or Event of Default has occurred thereunder nor
has any event occurred or failed to occur which with the passage of time or the
giving of notice or both would comprise such a default or Event of Default.
6. MISCELLANEOUS.
(a) This agreement shall be governed by and construed in accordance
with the law of the State of Florida. In the event of any dispute
hereunder, the prevailing party shall be entitled to recover all costs and
attorney's fees from the non-prevailing party. Paragraph headings used
herein are for convenience only and shall not be used to interpret any term
hereof. The Loan Agreement shall continue in full force and effect as
modified by this Modification. In the event the terms of this Modification
conflict with the terms of the Loan Agreement, the terms of this
Modification shall control.
(b) This Modification constitutes the entire agreement among the
parties hereto and supersedes all prior agreements, understandings,
negotiations and discussions, both written and oral among the parties
hereto with respect to the subject matter hereof, all of which prior
agreements, understanding, negotiations and discussions, both written and
oral, are merged into this Modification. All provisions of the Loan
Agreement and each of the other Loan Documents shall remain in full force
and effect as modified by this Agreement. Without limiting the generality
of any of the provisions of this Modification, nothing herein or in any
instrument or agreement shall be deemed or construed to constitute a
novation, satisfaction or refinancing of all or any portion of the Loan or
in any manner affect or impair the lien or priority of the Loan Agreement
or any of the Loan Documents as amended hereby.
(c) This Modification may be executed in any number of counterparts
with each executed counterpart constituting an original, but altogether
constituting but one and the same instrument.
(d) This Modification shall be binding upon and inure to the benefit
of the Borrower, the Guarantor and the Lender and their respective heirs,
legal representatives, executors, successors and assigns.
8. RELEASE. IN CONSIDERATION OF THE ACCOMMODATIONS PROVIDED HEREIN, EACH
OF THE BORROWER AND THE GUARANTOR HEREBY UNCONDITIONALLY, IRREVOCABLY AND
FOREVER RELEASES, ACQUITS AND
-3-
<PAGE>
DISCHARGES THE LENDER AND EACH OF THE LENDER'S RESPECTIVE OFFICERS, DIRECTORS,
EMPLOYEES, AGENTS AND COUNSEL FROM ANY AND ALL CLAIMS, DEMANDS AND CAUSES OF
ACTION THAT ANY OF THEM HAD, NOW HAS OR MAY IN THE FUTURE HAVE AGAINST ANY ONE
OR MORE OF THE LENDER OR ANY ONE OR MORE OF THE LENDER'S OFFICERS, DIRECTORS,
EMPLOYEES, AGENTS OR COUNSEL FOR THE ACTS OR OMISSIONS OF ANY OF THE FOREGOING
PARTIES FROM THE BEGINNING OF TIME THROUGH, TO AND INCLUDING THE DATE OF THE
EFFECTIVENESS OF THIS AGREEMENT, INCLUDING, WITHOUT LIMITATION, ANY CLAIMS
ARISING OUT OF OR CONNECTED IN ANY MANNER WITH THE TRANSACTIONS CONTEMPLATED
HEREIN OR IN THE LOAN AGREEMENT, AS AMENDED HEREBY OR ANY OTHER LOAN DOCUMENTS,
AS THE SAME MAY BE AMENDED HEREBY, AS THE CASE MAY BE.
9. WAIVER OF JURY TRIAL. THE BORROWER, THE GUARANTOR AND THE LENDER
HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE THE RIGHT ANY OF THEM MAY
HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING
OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY AGREEMENT EXECUTED IN
CONJUNCTION HEREWITH, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS,
(WHETHER VERBAL OR WRITTEN) OR ACTIONS BY ANY PARTY. THIS PROVISION IS A
MATERIAL INDUCEMENT TO THE LENDER ENTERING INTO THIS AGREEMENT AND MAKING ANY
LOAN, ADVANCE OR OTHER EXTENSION OF CREDIT TO THE BORROWER. FURTHER, EACH OF
THE BORROWER AND THE GUARANTOR HEREBY CERTIFIES THAT NO REPRESENTATIVE OR AGENT
OF THE LENDER, NOR THE LENDER'S COUNSEL, HAS REPRESENTED, EXPRESSLY OR
OTHERWISE, THAT THE LENDERS WOULD NOT, IN THE EVENT OF SUCH LITIGATION, SEEK TO
ENFORCE THIS WAIVER OF RIGHT TO JURY TRIAL PROVISION. NO REPRESENTATIVE OR
AGENT OF THE LENDER, NOR THE LENDER'S COUNSEL HAS THE AUTHORITY TO WAIVE,
CONDITION, OR MODIFY THIS PROVISION.
IN WITNESS WHEREOF, Borrower, Lender and Guarantor have caused this
agreement to be executed as of the day and year set forth above.
Witnesses: LENDER:
FIRST UNION NATIONAL BANK OF FLORIDA, a
national banking association
By: . . . . . . . . . . . . . . . . . .
Print Name: . . . . . . . . . . . . Print Name: Linda Scheltens
Its: Vice President
. . . . . . . . . . . . . . . . . .
Print Name: . . . . . . . . . . . .
AGENT:
FIRST UNION NATIONAL BANK OF FLORIDA, a
national banking association
-4-
<PAGE>
By:. . . . . . . . . . . . . . . . . . .
Print Name: . . . . . . . . . . . . Print Name: Linda Scheltens
Its: Vice President
. . . . . . . . . . . . . . . . . .
Print Name: . . . . . . . . . . . .
BORROWER:
TODHUNTER INTERNATIONAL, INC., a
Delaware corporation
By:. . . . . . . . . . . . . . . . . . .
Print Name: . . . . . . . . . . . . Print Name: A. Kenneth Pincourt, Jr.
Its: Chairman of the Board of
Directors/CEO
. . . . . . . . . . . . . . . . . .
Print Name: . . . . . . . . . . . .
[SIGNATURES CONTINUED ON NEXT PAGE]
TODHUNTER IMPORTS, LTD., a New York
corporation (f/k/a Blair Importers,
Ltd.)
By:. . . . . . . . . . . . . . . . . . .
Print Name: . . . . . . . . . . . . Print Name: A. Kenneth Pincourt, Jr.
Its: Chairman of the Board of Directors
. . . . . . . . . . . . . . . . . .
Print Name: . . . . . . . . . . . .
STATE OF FLORIDA )
) SS:
COUNTY OF PALM BEACH )
The foregoing instrument was acknowledged before me this _____ day of
____________, 199__, by LINDA SCHELTENS as Vice President of FIRST UNION
NATIONAL BANK OF FLORIDA, a national banking association, on behalf of the bank.
She is personally known to me or has produced _________________________ as
identification.
. . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . .Printed Name:
Notary Public
. . . . . . . . . . . . .Commission No.:
My Commission Expires:
-5-
<PAGE>
STATE OF FLORIDA )
) SS:
COUNTY OF PALM BEACH )
The foregoing instrument was acknowledged before me this _____ day of
____________, 199__, by LINDA SCHELTENS as Vice President of FIRST UNION
NATIONAL BANK OF FLORIDA, a national banking association, on behalf of the bank,
as Agent. She is personally known to me or has produced
_________________________ as identification.
. . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . .Printed Name:
Notary Public
. . . . . . . . . . . . .Commission No.:
My Commission Expires:
STATE OF FLORIDA )
) SS:
COUNTY OF PALM BEACH )
The foregoing instrument was acknowledged before me this _____ day of
____________, 199__, by A. KENNETH PINCOURT, JR. as Chairman of the Board of
Directors/CEO of TODHUNTER INTERNATIONAL, INC., a Delaware corporation, on
behalf of the corporation. He is personally known to me or has produced
_________________________ as identification.
. . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . .Printed Name:
Notary Public
. . . . . . . . . . . . .Commission No.:
My Commission Expires:
STATE OF FLORIDA )
) SS:
COUNTY OF PALM BEACH )
The foregoing instrument was acknowledged before me this _____ day of
____________, 199__, by A. KENNETH PINCOURT, JR. as Chairman of the Board of
Directors of TODHUNTER IMPORTS, LTD. (f/k/a Blair Importers, Ltd.), a New York
corporation, on behalf of the corporation. He is personally known to me or has
produced _________________________ as identification.
. . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . .Printed Name:
Notary Public
. . . . . . . . . . . . .Commission No.:
My Commission Expires:
-6-
<PAGE>
RENEWAL REVOLVING CREDIT NOTE
$20,000,000.00 As of December 18, 1996
FOR VALUE RECEIVED, TODHUNTER INTERNATIONAL, INC., a Delaware corporation
(the "Borrower"), hereby promises to pay to the order of
FIRST UNION NATIONAL BANK OF FLORIDA, a national banking association, at
the offices of First Union National Bank of Florida (the "Agent"), located at
303 Banyan Boulevard, West Palm Beach, Florida 33401 (or at such other place or
places as the Agent may designate), the principal sum of up to
TWENTY MILLION AND NO/100 DOLLARS ($20,000,000.00), or such lesser amount
as may constitute the unpaid principal amount of the Revolving Credit Loans, on
the Revolving Loan Termination Date (as such term is defined in the Loan
Agreement hereinafter referred to), under the terms and conditions of this
promissory note (the "Note") and in accordance with a certain Loan Agreement,
dated as of November 22, 1994 as modified by Modification of Loan Agreement
dated as of February 26, 1996, by Modification of Loan Agreement dated as of
August 19, 1996 and by Third Modification of Loan Agreement dated as of the date
hereof, by and between the Borrower, Todhunter Imports, Ltd., a New York
corporation f/k/a Blair Importers, Ltd. (the "Guarantor"), the Agent and the
Lenders set forth therein (as amended, modified or supplemented from time to
time, the "Loan Agreement"). The Borrower also unconditionally promises to pay
interest on the aggregate unpaid principal amount of this Note on each Interest
Payment Date (as defined in the Loan Agreement) at the rate or rates provided in
the Loan Agreement.
This Note is issued to evidence the Revolving Line of Credit made by the
Lenders pursuant to Article II of the Loan Agreement. The defined terms in the
Loan Agreement are used herein with the same meanings given them in the Loan
Agreement. All of the terms, conditions and covenants of the Loan Agreement are
expressly made a part of this Note by reference in the same manner and with the
same effect as if set forth herein at length and any holder of this Note is
entitled to the benefits of and remedies provided in the Loan Agreement and any
other agreements by and between the Borrower and the Guarantor, and either of
them, and the Agent or any of the Lenders. Reference is made to the Loan
Agreement for provisions for maturity, payment, prepayment and acceleration.
This Note renews and evidences the indebtedness under that certain Revolving
Credit Note dated as of November 22, 1994.
If the principal of this Note or any portion hereof and, to the extent
permitted by law, interest hereon shall not be paid when due, whether by
acceleration or otherwise, the same shall bear interest for any period during
which the same shall be overdue at a rate per annum equal to the Default Rate
set forth in the Loan Agreement and payable on demand.
The Borrower hereby agrees to pay all costs incurred by any holder hereof,
including reasonable attorneys' fees (including those for appellate
proceedings), incurred in connection with any Event of Default (as defined in
the Loan Agreement), or in connection with the collection or attempted
collection or enforcement hereof, whether or not legal proceedings may have been
instituted.
All parties to this Note, including the Borrower and any sureties,
endorsers or guarantors, hereby waive presentment for payment, demand, protest,
notice of dishonor, notice of acceleration of maturity, and all defenses on the
ground of extension of time for payment hereof, and agree to continue and remain
bound for the payment of principal, interest and all other sums payable
hereunder, notwithstanding any change or changes by way of release, surrender,
exchange or substitution of any security for this Note or by way of any
extension or extensions of time for payment of principal or interest; and all
such parties waive all and every kind of notice of such change or changes and
agree that the same may be made without notice to or consent of any of them.
The rights and remedies of
<PAGE>
the holder as provided herein shall be cumulative and concurrent and may be
pursued singularly, successively or together at the sole discretion of the
holder, and may be exercised as often as occasion therefor shall occur, and the
failure to exercise any such right or remedy shall in no event by construed as a
waiver or release of the same.
Anything herein to the contrary notwithstanding, the obligations of the
borrower under this Note shall be subject to the limitation that payments of
interest to the Lender shall not be required to the extent that receipt of any
such payment by the Lender would be contrary to provisions of law applicable to
the Lender (if any) which limit the maximum rate of interest which may be
charged or collected by the Lender, PROVIDED, HOWEVER, that nothing herein shall
be construed to limit the Lender to presently existing maximum rates of
interest, if an increased interest rate is hereafter permitted by reason of
applicable federal or state legislation. In the event that the borrower makes
any payment of interest, fees or other charges, however denominated, pursuant to
this Note, which payment results in the interest paid to the Lender to exceed
the maximum rate of interest permitted by applicable law, any excess over such
maximum shall be applied in reduction of the principal balance owed to the
Lender as of the date of such payment, or if such excess exceeds the amount of
principal owed to the Lender as of the date of such payment, the difference
shall be paid by the Lender to the Borrower.
THE BORROWER HEREBY, AND THE LENDER BY ITS ACCEPTANCE OF THIS NOTE,
KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE THE RIGHT EITHER OF THEM MAY HAVE
TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF,
UNDER OR IN CONNECTION WITH THIS REVOLVING CREDIT NOTE OR SAID LOAN AGREEMENT
AND ANY AGREEMENT CONTEMPLATED TO BE EXECUTED IN CONJUNCTION HEREWITH, OR ANY
COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR
ACTIONS OF ANY PART. THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE LENDER
ENTERING INTO SAID LOAN AGREEMENT AND MAKING THE LOANS EVIDENCED BY THIS NOTE.
FURTHER, THE BORROWER HEREBY CERTIFIES THAT NO REPRESENTATIVE OR AGENT OF
LENDER, NOR THE LENDER'S COUNSEL, HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT
THE LENDER WOULD NOT, IN THE EVENT OF SUCH LITIGATION, SEEK TO ENFORCE THIS
WAIVER OF RIGHT TO JURY TRIAL PROVISION. NO REPRESENTATIVE OR AGENT OF THE
LENDER, NOR THE LENDER'S COUNSEL HAS THE AUTHORITY TO WAIVE, CONDITION, OR
MODIFY THIS PROVISION.
This Note shall be governed by and construed in accordance with the
internal laws of the State of Florida, without regard to the principles of
conflicts thereunder. The Borrower hereby submits to the jurisdiction and venue
of the federal and state courts located in Palm Beach County, Florida.
IN WITNESS WHEREOF, the Borrower has caused this Note to be dated for
reference as of the date first above written but have in fact caused this Note
to be executed under seal by its duly authorized corporate officer as of this
_____ day of December, 1996.
TODHUNTER INTERNATIONAL,
INC., A DELAWARE CORPORATION
By: . . . . . . . . . . . . . . . .
A. Kenneth Pincourt, Jr.,
Chairman and CEO
STATE OF _________________ )
) SS:
COUNTY OF ________________ )
I, ________________________________, a Notary Public in and for the county
and state aforesaid, do hereby certify that A. Kenneth Pincourt, Jr. personally
appeared before me this day and, being duly sworn, says that he is the President
of Todhunter International, Inc., a Delaware corporation, and that said writing
was signed by him in behalf of said corporation by its authority duly given.
And the said A. Kenneth Pincourt, Jr. acknowledged the said writing to be the
act and deed of said corporation.
WITNESS my hand and notarial seal, this _____ day of December, 1996.
. . . . . . . . . . . . . . . . . . . . . .
Notary Public, State of Florida
. . . . . . . . . . . . . . . . Print Name:
My Commission Expires:
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM TODHUNTER
INTERNATIONAL, INC.'S CONSOLIDATED FINANCIAL STATEMENTS FOR ITS FIRST QUARTER
ENDED DECEMBER 31, 1996 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> SEP-30-1997
<PERIOD-END> DEC-31-1996
<CASH> 5,627,488
<SECURITIES> 0
<RECEIVABLES> 12,343,925
<ALLOWANCES> 0
<INVENTORY> 19,283,401
<CURRENT-ASSETS> 42,300,760
<PP&E> 70,904,157
<DEPRECIATION> 26,538,126
<TOTAL-ASSETS> 96,408,115
<CURRENT-LIABILITIES> 9,749,079
<BONDS> 48,262,879
0
0
<COMMON> 49,497
<OTHER-SE> 32,817,389
<TOTAL-LIABILITY-AND-EQUITY> 96,408,115
<SALES> 18,914,261
<TOTAL-REVENUES> 18,914,261
<CGS> 13,960,520
<TOTAL-COSTS> 13,960,520
<OTHER-EXPENSES> 2,282,968
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,065,594
<INCOME-PRETAX> 1,605,179
<INCOME-TAX> 344,104
<INCOME-CONTINUING> 1,261,075
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,261,075
<EPS-PRIMARY> .25
<EPS-DILUTED> .25
</TABLE>
