-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, XaLh3nu+avzD6QfISGj/qcB7cM/hivgBtkdRVTPWqfIj4D4hD2N/aplroLaeBib/ UpitRkf5jmXb22jB0CmYyw== 0000791714-95-000001.txt : 19950530 0000791714-95-000001.hdr.sgml : 19950530 ACCESSION NUMBER: 0000791714-95-000001 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19950331 FILED AS OF DATE: 19950512 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: ALPINE LACE BRANDS INC CENTRAL INDEX KEY: 0000791714 STANDARD INDUSTRIAL CLASSIFICATION: 5140 IRS NUMBER: 222717823 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-15584 FILM NUMBER: 95538256 BUSINESS ADDRESS: STREET 1: 111 DUNNELL RD CITY: MAPLEWOOD STATE: NJ ZIP: 07040 BUSINESS PHONE: 2013788600 MAIL ADDRESS: STREET 1: 111 DUNNELL ROAD CITY: MAPLEWOOD STATE: NJ ZIP: 07040 FORMER COMPANY: FORMER CONFORMED NAME: FIRST WORLD CHEESE INC DATE OF NAME CHANGE: 19910813 10-Q 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q Quarterly Report Under Section 13 or 15 (d) of the Securities Exchange Act of 1934 For the Quarter Ended March 31, 1995 Commission File Number 0-15584 Alpine Lace Brands, Inc. (Exact name of registrant as specified in its charter) Delaware 22-2717823 (State or other jurisdiction of I.R.S. Employer incorporation or organization) Identification No.) 111 Dunnell Road, Maplewood, New Jersey 07040 (Address of Principal Executive Offices) (Registrant's telephone number, including area code): 201-378-8600 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 the number of shares outstanding of each of the issuers classes of common stock, as of the latest practicable date: As of April 28, 1995, there were 5,018,769 shares of Common Stock, $.01 par value outstanding. ALPINE LACE BRANDS, INC. INDEX Page Number Part I. Financial Information Item 1. Financial Statements Consolidated Balance Sheets as of March 31, 1995 (unaudited) and December 31, 1994 3 Consolidated Statements of Earnings for the Three Months Ended March 31, 1995 and 1994 (unaudited) 5 Consolidated Statements of Cash Flows for the Three Months Ended March 31, 1995 and 1994 (unaudited) 6 Notes to Consolidated Financial Statements 8 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 10 Part II. Other Information Item 6. Exhibits and Reports on Form 8-K 11 Signature 12 PART I. FINANCIAL INFORMATION Item 1. Financial Statements ALPINE LACE BRANDS, INC. CONSOLIDATED BALANCE SHEETS March 31, 1995 December 31, 1994 (unaudited) ASSETS (substantially pledged) Cash and cash equivalents $ 71,418 $ 438,414 Accounts receivable, net of allowance for bad debt 11,882,112 16,228,784 Inventories 6,566,334 5,447,502 Prepaid expenses and deposits 353,324 502,004 Advances to suppliers 300,000 300,000 ---------- ---------- Total current assets 19,173,188 22,916,704 Property, plant and equipment Land, building and improvements 346,000 346,000 Equipment under capital lease 1,052,544 1,052,544 Leasehold improvements 45,914 45,914 Furniture, fixtures and equipment 1,601,918 1,541,200 ---------- ---------- 3,046,376 2,985,658 Less accumulated depreciation and amortization 1,148,798 1,057,075 ---------- ---------- 1,897,578 1,928,583 Assets Held For Sale 265,800 265,800 OTHER ASSETS Investment in and advances to Mountain Farms, Inc. 1,675,948 1,675,948 Trademarks, tradenames and technology, less accumulated amortization of $748,742 in 1995 and $709,802 in 1994 1,688,797 1,709,451 Notes receivable 26,969 30,420 Other 354,533 409,609 ---------- ---------- 3,746,247 3,825,428 ---------- ---------- $25,082,813 $28,936,515 ========== ========== The accompanying notes are an integral part of these statements. ALPINE LACE BRANDS, INC. CONSOLIDATED BALANCE SHEETS March 31, 1995 December 31, 1994 (unaudited) LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities Current maturities of note payable $ 92,702 $ 1,385,846 Accounts payable 10,412,419 14,610,852 Accrued expenses 2,018,379 2,565,802 Income taxes 69,287 10,450 Current maturities of obligation under capital leases 178,815 178,815 ---------- ---------- Total current liabilities 12,771,602 18,751,765 Long term obligation, less current maturities Notes payable 8,900,562 9,547,581 Obligation under capital leases 544,862 592,121 Other long-term liability 452,989 576,531 ---------- ---------- 9,898,413 10,716,233 Stockholders' equity Preferred stock, par value $.01 per share; authorized 1,000,000 shares; issued and outstanding 45,000 at March 31, 1995 liquidation amount $50.00 per share 2,250,000 - Common stock, par value $.01 per share; authorized 10,000,000 shares; issued and outstanding 5,015,419 at March 31, 1995 and 5,012,419 at December 31, 1994 50,154 50,124 Additional paid-in capital 2,796,022 3,129,888 Retained earnings (deficit) (2,683,378) (3,711,495) ----------- ----------- 2,412,798 (531,483) ----------- ----------- $25,082,813 $28,936,515 ========== ========== The accompanying notes are an integral part of these statements. ALPINE LACE BRANDS, INC. CONSOLIDATED STATEMENTS OF EARNINGS (unaudited) Three Months Ended March 31, 1995 1994 Net Sales $32,446,320 $31,007,551 Cost of goods sold 23,678,896 23,680,708 ---------- ---------- Gross profit 8,767,424 7,326,843 Operating expenses Selling 6,348,954 5,919,815 Administrative 1,102,117 1,022,428 ---------- ---------- 7,451,071 6,942,243 ---------- ---------- Operating profit 1,316,353 384,600 Other Income 3,114 104,599 Interest expense - net (328,731) (401,058) ---------- ---------- Earnings before income taxes and extraordinary item 990,736 88,141 Income taxes 66,379 - ---------- ---------- Earnings before extraordinary item 924,357 88,141 Extraordinary Item: Gain from extinguishment of debt, net of income taxes of $7,451 103,760 - ---------- ---------- Net earnings $ 1,028,117 $ 88,141 ========== ========== Earnings per share of common stock Earnings before extraordinary item $ .18 $ .02 Extraordinary item .02 .00 ---------- ---------- Net earnings per share of common stock $ .20 $ .02 ---------- ---------- Weighted average number of common and common equivalent shares outstanding 5,195,932 5,045,255 ========== ========== The accompanying notes are an integral part of these statements. ALPINE LACE BRANDS, INC. CONSOLIDATED STATEMENTS OF CASH FLOW Three Months Ended March 31, 1995 1994 Cash flows from operating activities Net earnings $ 1,028,117 $ 88,141 --------- ------ Adjustments to reconcile net earnings to net cash used in operating activities Depreciation and amortization 130,662 207,027 Extraordinary gain from extinguishment of debt, net of income taxes (103,760) - Provisions for losses on accounts receivable 19,073 10,500 Change in assets and liabilities Decrease in accounts receivable 4,327,599 1,312,161 (Increase) Decrease in inventory (1,118,832) 1,265,580 (Increase) Decrease in prepaid expenses 148,680 (210,527) Decrease in refundable income taxes - 45,897 Decrease in other assets 17,468 25,782 (Increase) in trade receivables, net-due from Mountain Farms, Inc. - (1,069,117) Decrease in notes receivable 3,451 3,097 Decrease in accounts payable (4,198,433) (2,292,335) Increase (Decrease) in accrued expenses (547,423) 112,756 Increase (Decrease) in income taxes 51,386 (10,599) Decrease in other long-term liabilities (123,542) - ---------- ---------- (1,393,671) (599,778) ---------- ---------- Net cash used in operating activities $ (365,554) $ (511,637) ---------- ---------- The accompanying notes are an integral part of these statements. ALPINE LACE BRANDS, INC. CONSOLIDATED STATEMENTS OF CASH FLOW (unaudited) Three Months Ended March 31, 1995 1994 Cash flow from investing activities Additions to property, plant and equipment $ (60,718) $ (72,149) Payments for trademarks and trade names (18,285) (5,428) Changes in investments in and advances to MFI-principally sales proceeds - 3,617,130 --------- ---------- Net cash (used) provided by investing activities (79,003) 3,539,553 --------- ---------- Cash flows from financing activities Net payments from obligation under capital lease (47,259) (27,018) Net payments under long-term obligations (2,003,680) (3,050,653) Net proceeds from preferred stock issued 2,115,000 - Proceeds from employee stock option exercise 13,500 - --------- ---------- Net cash (used) provided by financing activities 77,561 (3,077,671) --------- ---------- Net (decrease) in cash and cash equivalents (366,996) (49,755) Cash and cash equivalents at beginning of year 438,414 238,937 --------- ---------- Cash and cash equivalents at end of quarter $ 71,418 $ 189,182 ========= ========== Supplemental disclosures of cash flow information: Cash paid during the year for Interest $ 389,598 $ 437,063 ========= ========== Income taxes $ 15,346 $ 10,600 ========= ========== The accompanying notes are an integral part of these statements. ALPINE LACE BRANDS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 1. In the opinion of management, the accompanying consolidated financial statements contain all adjustments necessary to present fairly the financial position of Alpine Lace Brands, Inc. as of March 31, 1995 and December 31, 1994, the results of its operations for the three months ended March 31, 1995 and 1994 and the changes in its cash position for the three months ended March 31, 1995 and 1994. All material intercompany accounts and transactions have been eliminated. Certain information and footnote disclosures required under generally accepted accounting principles have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission, although the registrant believes that the disclosures are adequate to make the information presented not misleading. It is suggested that these financial statements be read in conjunction with the year-end financial statements and notes thereto included in the registrant's Annual Report on Form 10-K as filed. The accounting policies followed by the Company are set forth in the notes to the Company's consolidated financial statements as set forth in its Annual Report on Form 10-K filed with the Securities Exchange Commission. 2. The results of operations for the three months ended March 31, 1995 are not necessarily indicative of the results to be expected for the entire fiscal year. 3. Inventories are summarized as follows: March 31, 1995 December 31, 1994 Finished goods $ 6,162,160 $ 4,986,691 Raw materials & packaging supplies 404,174 460,811 ------------ -------------- $ 6,566,334 $ 5,447,502 ------------ -------------- 4. Earnings per share of common stock was computed by dividing net earnings by the weighted average number of common equivalent shares outstanding during the period, including the incremental shares from the dilutive effect of warrants and stock options, if applicable. 5. The Company's operations consist of two segments: (1) the branded cheese business which develops, markets, converts, packages and distributes branded cheeses; and (2) the Company's cheese and dairy products trading business. 6. As of December 31, 1994, the Company had available net operating loss carry-forwards of approximately $1,015,000, which expire in 2009. The Company also had at December 31, 1994, approximately $2,000,000 of tax deductible temporary differences available for future use. The Company's effective income tax rate of 6.7% for the three months ended March 31, 1995 includes the utilization of the Company's net operating loss carry-forwards and the utilization of temporary differences. 7. On March 22, 1995, the Company completed a private placement of $2,250,000 of 7.5% cumulative preferred stock, resulting in net proceeds to the Company of approximately $2,100,000. The securities are convertible into common stock at a conversion price of $7 3/8 for five years at which time the Company must either force a conversion at market price of the common stock or redeem the preferred stock. In the event of a change of control, the Company is required to make an offer to purchase the convertible preferred stock. 8. On March 27, 1995, the Company redeemed its $3,000,000 subordinated note payable and common stock purchase warrants for $3,000,150 plus accrued interest of $42,750. The redemption resulted in an extraordinary gain of $103,760 to the Company. Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations. a. Results of Operations. Comparison of the Registrant's first quarter (January 1, 1995 - March 31, 1995) of the current fiscal year ("1995") with the first quarter (January 1, 1994 - March 31, 1994) of the last fiscal year ("1994"). Net sales for the first quarter ending March 31, 1995 were $32,446,320 as compared to $31,007,551 in the same period of 1994. The Alpine Lace Branded Division had increased sales of $2,252,865 for the first quarter ending March 31, 1995 going from $23,083,434 in 1994 to $25,336,299 in the same period of 1995. Sales for the Company's cheese and dairy products trading business decreased by 10.2% or 810,839 to $7,102,736 from $7,913,575 for the comparative period of 1994. As a percentage of sales, gross profit increased to 27.0% in the first quarter of 1995 from 23.6% in the comparable period of 1994. Gross profit increased by $1,440,581 in the quarter ending March 31, 1995 going from $7,326,843 in 1994 to $8,767,424 in 1995. This increase was the result of the lower cost to purchase cheese resulting from lower commodity prices and continuing manufacturing efficiencies. As a percentage of sales, selling and administrative expenses increased from 22.4% in the first quarter of 1994 to 23.0% in the comparable period of 1995. Selling and administrative expenses increased from 6,942,243 in the first quarter of 1994 to $7,451,071 in the same period of 1995. The major contributors to this increase were for co- op advertising and advertising which supported the 9.7% increase in branded sales. The Company's operating profit increased by $931,753 from $384,600 in the first quarter of 1994 to $1,316,353 in the comparable period of 1995. Operating profit as a percent of net sales increased to 4.1% in the first quarter of 1995 compared to 1.2% in the first quarter of 1994 due to the higher gross profit offset slightly by higher selling and administrative expenses previously discussed. Net interest expense in the first quarter of 1995 was $328,731, a decrease of $72,327 for the comparable period of 1994, as a result of the company's decreased use of its working capital credit line, partially offset by higher interest rates. The Company's effective tax rate of 6.7% or $66,379 in the first quarter of 1995 includes the utilization of the Company's net operating loss carry-forwards generated in prior years. The Company did not accrue for income taxes in the first quarter of 1994 as a result of the use of tax loss carry-forwards generated from the 1993 loss of $4,040,254. The Company's net earnings for the quarter ending March 31, 1995 was $1,028,117 compared to $88,141 for the same period of 1994 for the reasons discussed previously. b. Financial Condition The major sources of cash for the quarter ending March 31, 1995 came from first quarter net earnings and the decrease in accounts receivable. The major uses of cash for the quarter ending March 31, 1995 were to fund decreases in accounts payable and increases in inventory. On March 27, 1995, the Company redeemed its subordinated note payable and common stock purchase warrants for $3,000,150 and accrued interest of $42,750. The majority of the funds for the redemption came from the issuance of $2,250,000 of 7.5% cumulative preferred stock on March 22, 1995, which resulted in net proceeds of approximately $2,100,000. As of May 8, 1995, the Company had approximately $4,200,000 available on its revolving credit facility and $ 3,500,000 available on its equipment credit facility. PART II. Other Information Item 2. Changes in Securities. On March 22, 1995 the Company issued and sold in a private placement transaction 45,000 shares of its Series A 7.50% Cumulative Convertible Preferred Stock (the "Series A Preferred Stock"). The Series A Preferred Stock ranks, with respect to dividend rights and rights upon liquidation, winding up and dissolution, senior to all classes of common stock of the Company, including the common stock, par value $.01 per share, of the Company (the "Common Stock). Consequently, so long as any shares of Series A Preferred Stock are outstanding, the Company shall not, among other things, declare or pay dividends on Common Stock or make any other payments or distribution with respect to such Common Stock if all dividends on the Series A Preferred Stock have not been paid in full. Similarly, upon the liquidation of the Company, before any distribution is made to the holders of any Common Stock, the holders of Series A Preferred Stock are entitled to be paid out of the assets of the Company an amount equal to $50 per share for each share of Series A Preferred Stock outstanding. Item 6. Exhibits and Reports on Form 8-K a. Exhibits. Exhibit 10.3(f) Employment Agreement, as of January 1, 1995 between the Company and Kenneth E. Meyers. Exhibit 10.5(c) Lease Modification, dated March 23, 1995, between Dunnell Associates and Alpine Lace Brands, Inc. Exhibit 11 Computation of Earnings per Share of Common Stock b. Form 8-K Reports. There were no current reports on Form 8-K filed by the registrant during the quarter ended March 31, 1995. 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. ALPINE LACE BRANDS, INC. By: /s/ Carl T. Wolf Carl T. Wolf, President and Chairman of the Board (Principal Executive Officer) Dated: May 10, 1995 By: /s/ Arthur Karmel Arthur Karmel, Vice President - Finance (Chief Accounting Officer) Dated: May 10, 1995 Exhibit 11. ALPINE LACE BRANDS, INC. Computation of Earnings Per Share of Common Stock Three Months Ended March 31, 1995 1994 Net earnings for the Period (1) $1,028,117 (A) $88,141 (A) Weighted Average Number of Issued and Outstanding Common Shares (2) 5,015,419 5,012,419 Incremental Shares Attributable to Assumed Exercise of Warrants and Stock Options (3) 180,513 32,836 Weighted Average Number of Common Shares (2) + (3) 5,195,932 (B) 5,045,255 (B) Earnings Per Common and Common Equivalent Share $.20 (A)/(B) $.02 (A)/(B) EX-27 2
5 3-MOS DEC-31-1995 MAR-31-1995 71,418 0 11,909,081 0 6,566,334 19,173,188 3,312,176 1,148,798 25,082,813 12,771,602 9,898,413 50,154 0 2,250,000 112,644 25,082,813 32,446,320 32,446,320 23,678,896 30,027,850 1,102,117 0 328,731 990,736 66,379 924,357 0 103,760 0 1,028,117 .20 .20
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