Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | |
Dec. 29, 2018 | Feb. 23, 2019 | |
Entity Registrant Name | U. S. Premium Beef, LLC | |
Entity Central Index Key | 0001289237 | |
Document Type | 10-K | |
Document Period End Date | Dec. 29, 2018 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-29 | |
Entity a Well-known Seasoned Issuer | No | |
Entity a Voluntary Filer | No | |
Entity's Reporting Status Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Document Fiscal Period Focus | FY | |
Document Fiscal Year Focus | 2018 | |
Entity Public Float | $ 0 | |
Entity Emerging Growth | false | |
Entity Small Business | false | |
Entity Shell Company | false | |
Class A Units [Member] | ||
Entity Common Stock, Shares Outstanding | 735,385 | |
Class B Units [Member] | ||
Entity Common Stock, Shares Outstanding | 755,385 |
Balance Sheets
Balance Sheets - USD ($) $ in Thousands | Dec. 29, 2018 | Dec. 30, 2017 |
Current assets: | ||
Cash and cash equivalents | $ 88,411 | $ 119,074 |
Due from affiliates | 21 | 137 |
Other current assets | 27 | 35 |
Total current assets | 88,459 | 119,246 |
Property, plant, and equipment, at cost | 200 | 223 |
Less accumulated depreciation | 183 | 201 |
Net property, plant, and equipment | 17 | 22 |
Investment in National Beef Packing Company, LLC | 143,361 | 140,030 |
Other assets | 69 | 103 |
Total assets | 231,906 | 259,401 |
Current liabilities: | ||
Accounts payable - trade | 12 | 58 |
Due to affiliates | 44 | 388 |
Accrued compensation and benefits | 2,158 | 2,250 |
Other accrued expenses and liabilities | 515 | 284 |
Distributions payable | 5,687 | 28,328 |
Total current liabilities | 8,416 | 31,308 |
Long-term liabilities: | ||
Other liabilities | 3,734 | 3,946 |
Total long-term liabilities | 3,734 | 3,946 |
Total liabilities | 12,150 | 35,254 |
Commitments and contingencies | ||
Capital shares and equities: | ||
Members' capital, 735,385 Class A units and 755,385 Class B units authorized, issued and outstanding | 219,756 | 224,147 |
Total capital shares and equities | 219,756 | 224,147 |
Total liabilities and capital shares and equities | $ 231,906 | $ 259,401 |
Balance Sheets (Parenthetical)
Balance Sheets (Parenthetical) - shares | Dec. 29, 2018 | Dec. 30, 2017 |
Class A Units [Member] | ||
Members' capital, units authorized | 735,385 | 735,385 |
Members' capital, units issued | 735,385 | 735,385 |
Members' capital, units outstanding | 735,385 | 735,385 |
Class B Units [Member] | ||
Members' capital, units authorized | 755,385 | 755,385 |
Members' capital, units issued | 755,385 | 755,385 |
Members' capital, units outstanding | 755,385 | 755,385 |
Statements of Operations
Statements of Operations - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 29, 2018 | Dec. 30, 2017 | Dec. 31, 2016 | |
Net sales | $ 0 | $ 0 | $ 0 |
Costs and expenses: | |||
Cost of sales | 0 | 0 | 0 |
Selling, general, and administrative expenses | 4,476 | 4,008 | 3,621 |
Depreciation and amortization | 12 | 13 | 13 |
Total costs and expenses | 4,488 | 4,021 | 3,634 |
Operating loss | (4,488) | (4,021) | (3,634) |
Other income (expense): | |||
Interest income | 1,073 | 321 | 48 |
Interest expense | (15) | (13) | (13) |
Equity in net income of National Beef Packing Company, LLC | 89,610 | 61,056 | 49,267 |
Other, net | 408 | 138 | 700 |
Total other income | 91,076 | 61,502 | 50,002 |
Net income | $ 86,588 | $ 57,481 | $ 46,368 |
Class A Units [Member] | |||
Income per unit: | |||
Basic and diluted | $ 11.77 | $ 7.82 | $ 6.31 |
Outstanding weighted-average Class A and Class B units: | |||
Basic and diluted | 735,385 | 735,385 | 735,385 |
Class B Units [Member] | |||
Income per unit: | |||
Basic and diluted | $ 103.16 | $ 68.49 | $ 55.24 |
Outstanding weighted-average Class A and Class B units: | |||
Basic and diluted | 755,385 | 755,385 | 755,385 |
Statements of Capital Shares an
Statements of Capital Shares and Equities - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||
Dec. 29, 2018 | Mar. 31, 2018 | Dec. 30, 2017 | Mar. 25, 2017 | Dec. 29, 2018 | Dec. 30, 2017 | Dec. 31, 2016 | |
Members' Capital | |||||||
Beginning Balance | $ 224,147 | $ 221,195 | $ 224,147 | $ 221,195 | $ 211,770 | ||
Net income for the year | 86,588 | 57,481 | 46,368 | ||||
Member distribution | (90,979) | (54,529) | (36,943) | ||||
Ending Balance | $ 219,756 | $ 224,147 | 219,756 | 224,147 | 221,195 | ||
Net income for the year | $ 20,671 | $ 9,201 | $ 13,450 | $ 7,576 | $ 86,588 | $ 57,481 | $ 46,368 |
Statements of Cash Flows (Unaud
Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 29, 2018 | Dec. 30, 2017 | Dec. 31, 2016 | |
Cash flows from operating activities: | |||
Net income | $ 86,588 | $ 57,481 | $ 46,368 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation and amortization | 12 | 13 | 13 |
Equity in net income of National Beef Packing Company, LLC | (89,610) | (61,056) | (49,267) |
Distributions from National Beef Packing Company, LLC | 68,023 | 33,531 | 10,923 |
Changes in assets and liabilities: | |||
Due from affiliates | 116 | (89) | 89 |
Other assets | 42 | 34 | 32 |
Accounts payable | (46) | (8) | 52 |
Due to affiliates | (344) | 351 | 37 |
Accrued compensation and benefits | (304) | 33 | (21) |
Other accrued expenses and liabilities | 231 | 31 | 74 |
Net cash provided by operating activities | 64,708 | 30,321 | 8,300 |
Cash flows from investing activities: | |||
Capital expenditures, including interest capitalized | (7) | 0 | 0 |
Distributions from National Beef Packing Company, LLC | 18,256 | 30,942 | 27,525 |
Net cash provided by investing activities | 18,249 | 30,942 | 27,525 |
Cash flows from financing activities: | |||
Partnership distributions and redemptions | (113,620) | (27,419) | (35,815) |
Net cash used in financing activities | (113,620) | (27,419) | (35,815) |
Net (decrease) increase in cash | (30,663) | 33,844 | 10 |
Cash and cash equivalents at beginning of period | 119,074 | 85,230 | 85,220 |
Cash and cash equivalents at end of period | 88,411 | 119,074 | 85,230 |
Supplemental cash disclosures: | |||
Cash paid during the period for interest | 13 | 13 | 13 |
Supplemental noncash disclosures of financing activities: | |||
Distributions payable | $ 5,687 | $ 0 | $ 0 |
1. Description of Business
1. Description of Business | 12 Months Ended |
Dec. 29, 2018 | |
Accounting Policies [Abstract] | |
Description of Business | NOTE 1. Description of Business U.S. Premium Beef (USPB or the Company) was formed as a closed marketing cooperative on July 1, 1996. Its mission is to increase the quality of beef and long-term profitability of cattle producers by creating a fully integrated producer-owned beef processing system that is a global supplier of high quality, value-added beef products responsive to consumer desires. USPB operates an integrated cattle processing and beef marketing enterprise where consumer and processor demands and requirements are implemented through changes in genetics, feeding, and management. USPB’s unitholders benefit from its supplier alliance with National Beef Packing Company, LLC (NBP) through (i) premiums received in excess of cash market prices for higher quality cattle, (ii) allocations of profits and potential distributions, (iii) potential unit price appreciation, and (iv) information that permits unitholders to make informed production decisions. On August 18, 2004, the shareholders of U.S. Premium Beef, Ltd. approved the conversion of the cooperative into a Delaware LLC. On December 5, 2011, USPB entered into a Membership Interest Purchase Agreement with Leucadia National Corporation (Leucadia). The Purchase Agreement provided for Leucadia to purchase 56.2415% of the membership interests in NBP (National Interests) from the Company for approximately $646.8 million. The Leucadia Transaction closed on December 30, 2011. Following the close, USPB owned 15.0729% of NBP’s membership interests. As a result of the sale to Leucadia, USPB’s investment in NBP will be accounted for using the equity method of accounting as the Company has the ability to exercise significant influence, but does not have financial or operational control. Ownership Structure As USPB is structured as a Limited Liability Company, its members are not personally liable for liabilities of USPB. USPB’s members are taxed on their proportionate share of USPB’s taxable income. Class A Units Class B Units. |
2. Basis of Presentation and Ac
2. Basis of Presentation and Accounting Policies | 12 Months Ended |
Dec. 29, 2018 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Accounting Policies | NOTE 2. Basis of Presentation and Accounting Policies Basis of Presentation USPB’s investment in NBP is accounted for using the equity method of accounting as the Company has the ability to exercise significant influence, but does not have financial or operational control. Fiscal Year The Company’s fiscal year ends on the last Saturday in December. The Company files annual reports for each 52 week or 53 week period ended on the last Saturday in December. Use of Estimates The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, using management’s best estimates and judgments where appropriate. These estimates and judgments affect the reported amounts of assets and liabilities at the date of the financial statements. The estimates and judgments will also affect the reported amounts for certain revenues and expenses during the reporting period. Actual results could differ materially from these estimates and judgments. Cash and Cash Equivalents The Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents. Investment in National Beef Packing Company, LLC USPB’s 15.0729% investment in NBP accounted for using the equity method of accounting as the Company has the ability to exercise significant influence, but does not have financial or operational control. For fiscal years 2018 and 2017, USPB conducted an evaluation to determine if its investment in NBP was impaired as of the end of the fiscal year in accordance with Auditing Standards Codification (ASC) 323 Investments Equity Method and Joint Ventures USPB presents the distributions received from its equity method investee within the Statement of Cash Flows in accordance with ASU 2016-15-Statement of Cash Flows (Topic 230); Classification of Certain Cash Receipts and Cash Payments, under the cumulative earnings approach. Property, Plant, and Equipment Property, plant, and equipment are recorded at cost. Property, plant, and equipment are depreciated principally on a straight-line basis over the estimated useful life (based upon original acquisition date) of the individual asset by major asset class as follows: Machinery and equipment 2 to 15 years Furniture and fixtures 3 to 5 years Trailers and automotive equipment 2 to 4 years Upon disposition of these assets, any resulting gain or loss is included in other, net. Normal repairs and maintenance costs are charged to Selling, general and administrative expenses, as incurred. A summary of cost and accumulated depreciation for property, plant, and equipment as of December 29, 2018 and December 30, 2017 follows (thousands of dollars): December 29, December 30, Machinery and equipment $ 24 $ 24 Furniture and fixtures 147 140 Trailers and automotive equipment 29 59 Total property, plant, and equipment, at cost 200 223 Accumulated depreciation 183 201 Property, plant, and equipment, net $ 17 $ 22 Depreciation expense was immaterial for fiscal years ended December 29, 2018 and December 30, 2017. New Accounting Standard In February 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update No. 2016-02, Leases. The new standard requires the recognition of all leases that are longer than one year on the balance sheet, which will result in the recognition of a right-of-use asset and a corresponding lease liability. The right-of-use asset and lease liability will be measured initially using the present value of the remaining lease payments. The new standard is effective for annual and interim periods beginning after December 15, 2018. The new guidance will not have a material impact on our financial statements. In terms of practical expedients, USPB accepts: · Its original determination of whether a contract contained a lease. · That a subsequent review of existing contracts is not necessary. · That USPB does not have to reassess the initial direct costs assigned to leases under previous leasing guidance as USPB did not occur any initial direct costs for the leases subject to previous leasing guidance. Distributions Payable USPB utilizes a controlled disbursement account to fund cash distribution checks presented for payment by the holder. Checks issued that have not cleared are included in distributions payable and the change in the related balances are reflected in financing activities on the statement of cash flows. Distributions payable totaled $5.7 million and $28.3 million as of December 29, 2018 and December 30, 2017, respectively. Income Taxes Effective August 29, 2004, the Company converted to an LLC, and under this structure, taxes are not provided at the Company level because the results of operations are included in the taxable income of the individual members. Selling, General, and Administrative Selling expenses consist primarily of salaries, bonuses, phantom unit option expense, trade promotions, advertising, commissions and other marketing costs. General and administrative costs consist primarily of general management, insurance and professional expenses. Noncompetition Payments The former CEO’s employment agreement provided for him to receive noncompetition payments in connection with the Leucadia Transaction. During fiscal years 2018 and 2017, the former CEO was paid $844,938 and $853,263, respectively, in noncompetition payments. He will continue to receive noncompetition payments of approximately $845,000 per year during calendar years 2019 through 2021. The current CEO’s employment agreement provides for him to receive noncompetition payments for a twelve month period following his termination of employment with USPB. As of December 29, 2018 and December 30, 2017, the Company had accrued $2.7 million and $3.4 million, respectively, for the noncompetition agreements. The current and long-term portion of the accrued amounts are included in Accrued compensation and benefits and Other liabilities, respectively, on the balance sheet. Business Segments USPB is not organized by multiple operating segments for the purpose of making operating decisions or assessing performance. Accordingly, USPB has one reportable segment. Earnings Per Unit Under the LLC structure, earnings of the Company are to be distributed to unitholders based on their proportionate share of underlying equity, and, as a result, earnings per unit (EPU) has been presented in the accompanying Statement of Operations and in the table that follows. Basic EPU excludes dilution and is computed by first allocating 10% of net income or loss attributable to USPB to Class A units and the remaining 90% is allocated to Class B units. Net income or loss allocated to the Class A and Class B units is then divided by the weighted-average number of Class A and Class B units outstanding for the period to determine the basic EPU for each respective class of unit. Diluted EPU reflects the potential dilution that could occur to the extent that any outstanding dilutive Class A or Class B units were exercised. There are no potentially dilutive Class A or Class B units outstanding. Income Per Unit Calculation 52 weeks ended 52 weeks ended 53 weeks ended (thousands of dollars, except unit and per unit data) December 29, December 30, December 31, Basic and diluted earnings per unit: Income attributable to USPB available to unitholders (numerator) Class A $ 8,659 $ 5,748 $ 4,637 Class B $ 77,929 $ 51,733 $ 41,731 Weighted average outstanding units (denominator) Class A 735,385 735,385 735,385 Class B 755,385 755,385 755,385 Per unit amount Class A $ 11.77 $ 7.82 $ 6.31 Class B $ 103.16 $ 68.49 $ 55.24 |
3. Long-Term Debt and Loan Agre
3. Long-Term Debt and Loan Agreements | 12 Months Ended |
Dec. 29, 2018 | |
Debt Disclosure [Abstract] | |
Long-Term Debt and Loan Agreements | NOTE 3. Long-Term Debt and Loan Agreements (a) Master Loan Agreement On June 13, 2017, USPB and CoBank entered into a Revolving Term Loan Supplement to the Master Loan Agreement dated July 26, 2011. The Revolving Term Loan Supplement provides for a $5 million revolving credit commitment. The new commitment carries a term of three years, maturing on June 30, 2020. The Pledge Agreement provides CoBank with a first-priority security interest in USPB’s membership interests in, and distributions from, NBP. All of the $5 million revolving credit commitment was available as of December 29, 2018. Borrowings under the revolving credit commitment bear interest at the base rate or LIBOR rate plus applicable margin. The applicable margin over LIBOR was 200 bps at December 29, 2018. On December 30, 2011, in connection with the closing of the transaction with Leucadia, the Company and CoBank entered into the Consent and First Amendment to Pledge Agreement and Security Agreement, by which CoBank agreed to (i) consent to the Membership Interest Sale and the PA Distribution, (ii) release its security interest in, and liens on, the Membership Interests being sold pursuant to the Membership Interest Sale, (iii) consent to the NBP Pledge and (iv) consent to the amendments and restatements of the NBP Operating Agreement and the PA Newco Operating Agreement. The NBP Pledge grants NBP a perfected security interest in and to USPB’s membership interests in, and distributions from, NBP, subject only to the prior first priority security interest held by CoBank. The Company was in compliance with the Master Loan Agreement’s Net Worth covenant as of December 29, 2018. (b) Capital and Operating Leases USPB leases its office space in Kansas City, Missouri and Dodge City Kansas. Lease expense associated with operating leases was $0.1 million for fiscal years 2018, 2017, and 2016. USPB expects that it will renew lease agreements or enter into new leases as the existing leases expire. |
4. Employee Options and Benefit
4. Employee Options and Benefit Plans | 12 Months Ended |
Dec. 29, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Employee Options and Benefit Plans | NOTE 4. Employee Options and Benefit Plans In September 2010, USPB’s Board of Directors approved a management phantom unit plan. The phantom unit plan provides for the award of unit appreciation rights to management employees of USPB. USPB’s CEO administers the phantom unit plan and awards “Phantom Units” (Class A and Class B Units) to employees in amounts determined by the CEO, subject to the total Phantom Unit amount approved by the Board of Directors of USPB. A total of 5,000 Class A phantom units and 5,000 Class B phantom units were awarded to management employees, with a strike price of $118 and $157, respectively. The closing of the Leucadia Transaction resulted in management employees receiving a payment under the management phantom unit plan. As a result of that payment, the strike price for both the Class A phantom units and Class B phantom units was satisfied and is now $0. As a result of the retirement of one of USPB’s employees on December 31, 2014, 50 Class A phantom units and 50 Class B phantom units were forfeited as they were not vested. One third of the retiring employee’s vested phantom units will be exercised and the appreciation rights paid in three tranches (retirement, and first and second anniversary of retirement). At the end of fiscal year 2018, 4,750 Class A phantom units and 4,750 Class B phantom units remain outstanding. The phantom units became fully vested in August 2015. For the management phantom unit plan, compensation expense of $0.6 million, $0.3 million, and $0.2 million was recognized in fiscal years 2018, 2017, and 2016, respectively. On November 16, 2012, USPB’s Board of Directors approved the issuance of an additional 1,500 Class A phantom units, with a strike price of $66.04 and 1,500 Class B phantom units, with a strike price of $73.70, to certain members of management, to be effective on January 28, 2013. The phantom units became fully vested in January 2018. Compensation expense of $0.2 million, $0.1 million and $0.0 million was recognized in fiscal years 2018, 2017, and 2016, respectively. The Company maintains a tax-qualified employee savings and retirement plan (401(k) Plan) covering the Company’s non-union employees. Pursuant to the 401(k) Plan, eligible employees may elect to reduce their current compensation by up to the lesser of 75% of their annual compensation or the statutorily prescribed annual limit and have the amount of such reduction contributed to the 401(k) Plan. The 401(k) Plan provides for additional matching contributions by the Company, based on specific terms contained in the 401(k) Plan. The trustee of the 401(k) Plan, at the direction of each participant, invests the assets of the 401(k) Plan in designated investment options. The 401(k) Plan is intended to qualify under Section 401 of the Internal Revenue Code. Expenses related to the 401(k) Plan totaled approximately $0.1 million, $0.1 million, and $0.0 million for fiscal years 2018, 2017, and 2016, respectively. |
5. Other Income
5. Other Income | 12 Months Ended |
Dec. 29, 2018 | |
Other income (expense): | |
Other Income | NOTE 5. Other Income Other non-operating income, net was $0.4 million, $0.1 million, and $0.7 million, for fiscal years 2018, 2017, and 2016, respectively. Other non-operating income primarily includes income related to lease income on additional delivery rights made available by the Company. |
6. Income Taxes
6. Income Taxes | 12 Months Ended |
Dec. 29, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | NOTE 6. Income Taxes USPB is structured as an LLC and is taxed as a partnership for federal income tax purposes. As a result, its taxable income/loss are passed through to the unitholders at the end of each tax year. Certain states assess an entity level tax, which is paid by USPB. Such taxes are generally immaterial, and the current provision in tax years 2018, 2017, and 2016 was $0.0 million. |
7. Related Party Transactions
7. Related Party Transactions | 12 Months Ended |
Dec. 29, 2018 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | NOTE 7. Related Party Transactions All of the Company’s directors hold Class A units of the Company. By virtue of their ownership of the units, each of these individuals is obligated to deliver cattle to the Company. The amount and terms of the payments received by these individuals (or the entities they represent) for the delivery of cattle are made on exactly the same basis as those received by other unitholders of the Company for the delivery of their cattle. On December 30, 2011, USPB entered into a new Cattle Purchase and Sale Agreement with NBP. Per the terms and conditions of the Agreement, NBP is required to purchase through USPB from its members, and USPB is required to cause to be sold and delivered from its members to NBP, a base amount of 735,385 (subject to adjustment) head of cattle per year. The purchase price for the cattle is determined by pricing grids, which, at all times, are required to be no less favorable than any other pricing grid being utilized by NBP and the pricing grid shall be competitive with NBP’s major competitors for the purchase of cattle. NBP believes the pricing grids are based on terms that could be obtained from an unaffiliated party. The cattle supply agreement extends through December 30, 2022, with automatic, but optional one year extensions on each December 30, unless either party provides a notice not to extend sixty days prior to the annual anniversary date. Neither party provided sixty day notice prior to December 29, 2018, the current year annual anniversary date. NBP also purchased additional cattle from certain USPB members and associates outside of the cattle supply agreement. USPB facilitates the delivery of cattle owned by its unitholders and associates to NBP. During fiscal years 2018, 2017, and 2016, USPB’s members and associates provided approximately 25%, 24%, and 27%, respectively, of NBP’s total cattle requirements. At December 29, 2018 and December 30, 2017, the Company had receivables from unitholders and associates in the amount of $0.0 million and $0.1 million, respectively. At December 29, 2018 and December 30, 2017, the Company had payables to unitholders and associates in the amount of $5.7 million and $28.7 million, respectively. |
8. Legal Proceedings
8. Legal Proceedings | 12 Months Ended |
Dec. 29, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Legal Proceedings | NOTE 8. Legal Proceedings As of December 29, 2018, USPB was not a party to any lawsuit or claim arising out of the operation of its business. |
9. Quarterly Results (Unaudited
9. Quarterly Results (Unaudited) | 12 Months Ended |
Dec. 29, 2018 | |
Quarterly Financial Information Disclosure [Abstract] | |
Quarterly Results (Unaudited) | NOTE 9. Quarterly Results (Unaudited) Selected quarterly financial data for fiscal years 2018 and 2017 are set forth below (dollars in thousands, except per unit data): Operating Net Basic and Diluted Earnings Per Net Sales Loss Income Class A Unit Class B Unit 2018 quarterly results: March 31, 2018 $ - $ (1,445 ) $ 9,201 $ 1.25 $ 10.96 June 30, 2018 - (1,092 ) 27,788 $ 3.78 $ 33.11 September 29, 2018 - (816 ) 28,928 $ 3.93 $ 34.47 December 29, 2018 - (1,135 ) 20,671 $ 2.81 $ 24.63 $ - $ (4,488 ) $ 86,588 2017 quarterly results: March 25, 2017 $ - $ (1,067 ) $ 7,576 $ 1.03 $ 9.03 June 24, 2017 - (840 ) 10,954 $ 1.49 $ 13.05 September 30, 2017 - (862 ) 25,501 $ 3.47 $ 30.38 December 30, 2017 - (1,252 ) 13,450 $ 1.83 $ 16.02 $ - $ (4,021 ) $ 57,481 |
10. Subsequent Events
10. Subsequent Events | 12 Months Ended |
Dec. 29, 2018 | |
Subsequent Events [Abstract] | |
Subsequent Events | NOTE 10. Subsequent Events On March 11, 2019, USPB and the other members of NBP entered into an agreement to acquire 100% of the ownership interests in Iowa Premium, LLC. USPB’s proportionate share of the Purchase Price is approximately $22.6 million, which will be funded by a distribution by NBP to USPB. Once the purchase of Iowa Premium, LLC is closed, USPB and the other members of NBP will subsequently transfer their respective ownership interests in Iowa Premium, LLC to NBP in the form of a capital contribution. Closing the transaction is subject to customary conditions, including the expiration of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act. USPB evaluated subsequent events and transactions for potential recognition or disclosure in the financial statements through March 13, 2019, the date the financial statements were available for issuance. |
2. Basis of Presentation and _2
2. Basis of Presentation and Accounting Policies (policies) | 12 Months Ended |
Dec. 29, 2018 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation USPB’s investment in NBP is accounted for using the equity method of accounting as the Company has the ability to exercise significant influence, but does not have financial or operational control. |
Fiscal Year | Fiscal Year The Company’s fiscal year ends on the last Saturday in December. The Company files annual reports for each 52 week or 53 week period ended on the last Saturday in December. |
Use of Estimates | Use of Estimates The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, using management’s best estimates and judgments where appropriate. These estimates and judgments affect the reported amounts of assets and liabilities at the date of the financial statements. The estimates and judgments will also affect the reported amounts for certain revenues and expenses during the reporting period. Actual results could differ materially from these estimates and judgments. |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents. |
Investment in National Beef Packing Company, LLC | Investment in National Beef Packing Company, LLC USPB’s 15.0729% investment in NBP accounted for using the equity method of accounting as the Company has the ability to exercise significant influence, but does not have financial or operational control. For fiscal years 2018 and 2017, USPB conducted an evaluation to determine if its investment in NBP was impaired as of the end of the fiscal year in accordance with Auditing Standards Codification (ASC) 323 Investments Equity Method and Joint Ventures USPB presents the distributions received from its equity method investee within the Statement of Cash Flows in accordance with ASU 2016-15-Statement of Cash Flows (Topic 230); Classification of Certain Cash Receipts and Cash Payments, under the cumulative earnings approach. |
Property, Plant and Equipment | Property, Plant, and Equipment Property, plant, and equipment are recorded at cost. Property, plant, and equipment are depreciated principally on a straight-line basis over the estimated useful life (based upon original acquisition date) of the individual asset by major asset class as follows: Machinery and equipment 2 to 15 years Furniture and fixtures 3 to 5 years Trailers and automotive equipment 2 to 4 years Upon disposition of these assets, any resulting gain or loss is included in other, net. Normal repairs and maintenance costs are charged to Selling, general and administrative expenses, as incurred. A summary of cost and accumulated depreciation for property, plant, and equipment as of December 29, 2018 and December 30, 2017 follows (thousands of dollars): December 29, December 30, Machinery and equipment $ 24 $ 24 Furniture and fixtures 147 140 Trailers and automotive equipment 29 59 Total property, plant, and equipment, at cost 200 223 Accumulated depreciation 183 201 Property, plant, and equipment, net $ 17 $ 22 Depreciation expense was immaterial for fiscal years ended December 29, 2018 and December 30, 2017. |
New Accounting Standard | New Accounting Standard In February 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update No. 2016-02, Leases. The new standard requires the recognition of all leases that are longer than one year on the balance sheet, which will result in the recognition of a right-of-use asset and a corresponding lease liability. The right-of-use asset and lease liability will be measured initially using the present value of the remaining lease payments. The new standard is effective for annual and interim periods beginning after December 15, 2018. The new guidance will not have a material impact on our financial statements. In terms of practical expedients, USPB accepts: · Its original determination of whether a contract contained a lease. · That a subsequent review of existing contracts is not necessary. · That USPB does not have to reassess the initial direct costs assigned to leases under previous leasing guidance as USPB did not occur any initial direct costs for the leases subject to previous leasing guidance. |
Distributions Payable | Distributions Payable USPB utilizes a controlled disbursement account to fund cash distribution checks presented for payment by the holder. Checks issued that have not cleared are included in distributions payable and the change in the related balances are reflected in financing activities on the statement of cash flows. Distributions payable totaled $5.7 million and $28.3 million as of December 29, 2018 and December 30, 2017, respectively. |
Income Taxes | Income Taxes Effective August 29, 2004, the Company converted to an LLC, and under this structure, taxes are not provided at the Company level because the results of operations are included in the taxable income of the individual members. |
Selling, General and Administrative | Selling, General, and Administrative Selling expenses consist primarily of salaries, bonuses, phantom unit option expense, trade promotions, advertising, commissions and other marketing costs. General and administrative costs consist primarily of general management, insurance and professional expenses. |
Noncompetition Payments | Noncompetition Payments The former CEO’s employment agreement provided for him to receive noncompetition payments in connection with the Leucadia Transaction. During fiscal years 2018 and 2017, the former CEO was paid $844,938 and $853,263, respectively, in noncompetition payments. He will continue to receive noncompetition payments of approximately $845,000 per year during calendar years 2019 through 2021. The current CEO’s employment agreement provides for him to receive noncompetition payments for a twelve month period following his termination of employment with USPB. As of December 29, 2018 and December 30, 2017, the Company had accrued $2.7 million and $3.4 million, respectively, for the noncompetition agreements. The current and long-term portion of the accrued amounts are included in Accrued compensation and benefits and Other liabilities, respectively, on the balance sheet. |
Business Segments | Business Segments USPB is not organized by multiple operating segments for the purpose of making operating decisions or assessing performance. Accordingly, USPB has one reportable segment. |
Earnings Per Unit | Earnings Per Unit Under the LLC structure, earnings of the Company are to be distributed to unitholders based on their proportionate share of underlying equity, and, as a result, earnings per unit (EPU) has been presented in the accompanying Statement of Operations and in the table that follows. Basic EPU excludes dilution and is computed by first allocating 10% of net income or loss attributable to USPB to Class A units and the remaining 90% is allocated to Class B units. Net income or loss allocated to the Class A and Class B units is then divided by the weighted-average number of Class A and Class B units outstanding for the period to determine the basic EPU for each respective class of unit. Diluted EPU reflects the potential dilution that could occur to the extent that any outstanding dilutive Class A or Class B units were exercised. There are no potentially dilutive Class A or Class B units outstanding. Income Per Unit Calculation 52 weeks ended 52 weeks ended 53 weeks ended (thousands of dollars, except unit and per unit data) December 29, December 30, December 31, Basic and diluted earnings per unit: Income attributable to USPB available to unitholders (numerator) Class A $ 8,659 $ 5,748 $ 4,637 Class B $ 77,929 $ 51,733 $ 41,731 Weighted average outstanding units (denominator) Class A 735,385 735,385 735,385 Class B 755,385 755,385 755,385 Per unit amount Class A $ 11.77 $ 7.82 $ 6.31 Class B $ 103.16 $ 68.49 $ 55.24 |
2. Basis of Presentation and _3
2. Basis of Presentation and Accounting Policies (Tables) | 12 Months Ended |
Dec. 29, 2018 | |
Accounting Policies [Abstract] | |
Schedule of Property Plant And Equipment Estimated Useful Life | Machinery and equipment 2 to 15 years Furniture and fixtures 3 to 5 years Trailers and automotive equipment 2 to 4 years |
Schedule of cost and accumulated depreciation for property, plant, and equipment | December 29, December 30, Machinery and equipment $ 24 $ 24 Furniture and fixtures 147 140 Trailers and automotive equipment 29 59 Total property, plant, and equipment, at cost 200 223 Accumulated depreciation 183 201 Property, plant, and equipment, net $ 17 $ 22 |
Schedule of Income Per Unit Calculation | Income Per Unit Calculation 52 weeks ended 52 weeks ended 53 weeks ended (thousands of dollars, except unit and per unit data) December 29, December 30, December 31, Basic and diluted earnings per unit: Income attributable to USPB available to unitholders (numerator) Class A $ 8,659 $ 5,748 $ 4,637 Class B $ 77,929 $ 51,733 $ 41,731 Weighted average outstanding units (denominator) Class A 735,385 735,385 735,385 Class B 755,385 755,385 755,385 Per unit amount Class A $ 11.77 $ 7.82 $ 6.31 Class B $ 103.16 $ 68.49 $ 55.24 |
9. Quarterly Results (Unaudit_2
9. Quarterly Results (Unaudited) (Tables) | 12 Months Ended |
Dec. 29, 2018 | |
Quarterly Financial Information Disclosure [Abstract] | |
Schedule of selected quarterly financial data for fiscal years | Operating Net Basic and Diluted Earnings Per Net Sales Loss Income Class A Unit Class B Unit 2018 quarterly results: March 31, 2018 $ - $ (1,445 ) $ 9,201 $ 1.25 $ 10.96 June 30, 2018 - (1,092 ) 27,788 $ 3.78 $ 33.11 September 29, 2018 - (816 ) 28,928 $ 3.93 $ 34.47 December 29, 2018 - (1,135 ) 20,671 $ 2.81 $ 24.63 $ - $ (4,488 ) $ 86,588 2017 quarterly results: March 25, 2017 $ - $ (1,067 ) $ 7,576 $ 1.03 $ 9.03 June 24, 2017 - (840 ) 10,954 $ 1.49 $ 13.05 September 30, 2017 - (862 ) 25,501 $ 3.47 $ 30.38 December 30, 2017 - (1,252 ) 13,450 $ 1.83 $ 16.02 $ - $ (4,021 ) $ 57,481 |
1. Description of Business (Det
1. Description of Business (Details Narrative) | Dec. 29, 2018 |
Equity method percentage owned | 15.0729% |
National Beef Packing Company, LLC [Member] | |
Equity method percentage owned | 15.0729% |
2. Basis of Presentation and _4
2. Basis of Presentation and Accounting Policies (Details - Useful lives) | 12 Months Ended |
Dec. 29, 2018 | |
Machinery and Equipment [Member] | |
Property and equipment useful lives | 2 to 15 years |
Furniture and Fixtures [Member] | |
Property and equipment useful lives | 3 to 5 years |
Trailers and Automotive Equipment [Member] | |
Property and equipment useful lives | 2 to 4 years |
2. Basis of Presentation and _5
2. Basis of Presentation and Accounting Policies (Details - Property schedule) - USD ($) $ in Thousands | Dec. 29, 2018 | Dec. 30, 2017 |
Property, plant and equipment, gross | $ 200 | $ 223 |
Accumulated depreciation | 183 | 201 |
Property, plant and equipment, net | 17 | 22 |
Machinery and Equipment [Member] | ||
Property, plant and equipment, gross | 24 | 24 |
Furniture and Fixtures [Member] | ||
Property, plant and equipment, gross | 147 | 140 |
Trailers and Automotive Equipment [Member] | ||
Property, plant and equipment, gross | $ 29 | $ 59 |
2. Basis of Presentation and _6
2. Basis of Presentation and Accounting Policies (Details - Income (Loss) calculation) - USD ($) | 12 Months Ended | ||
Dec. 29, 2018 | Dec. 30, 2017 | Dec. 31, 2016 | |
Class A Units [Member] | |||
Basic and diluted earnings per unit: | |||
Income attributable to USPB available to unitholders (numerator) | $ 8,659 | $ 5,748 | $ 4,637 |
Weighted average outstanding units (denominator) | 735,385 | 735,385 | 735,385 |
Per unit amount | $ 11.77 | $ 7.82 | $ 6.31 |
Class B Units [Member] | |||
Basic and diluted earnings per unit: | |||
Income attributable to USPB available to unitholders (numerator) | $ 77,929 | $ 51,733 | $ 41,731 |
Weighted average outstanding units (denominator) | 755,385 | 755,385 | 755,385 |
Per unit amount | $ 103.16 | $ 68.49 | $ 55.24 |
2. Basis of Presentation and _7
2. Basis of Presentation and Accounting Policies (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 29, 2018 | Dec. 30, 2017 | |
Accounting Policies [Abstract] | ||
Equity method percentage owned | 15.0729% | |
Distributions payable | $ 5,687,000 | $ 28,328,000 |
Payments for noncompetition agreement | 844,938 | 853,263 |
Accrued Noncompetition Payments | $ 2,700,000 | $ 3,400,000 |
3. Long-Term Debt and Loan Ag_2
3. Long-Term Debt and Loan Agreements (Details Narrative) - USD ($) | 12 Months Ended | ||
Dec. 29, 2018 | Dec. 30, 2017 | Dec. 31, 2016 | |
Rent expense | $ 100,000 | $ 100,000 | $ 100,000 |
CoBank [Member] | Revolving Credit Facility [Member] | |||
Credit line maximum borrowing capacity | 5,000,000 | ||
Credit line, remaining borrowing capacity | $ 5,000,000 | ||
Credit line expiration date | Jun. 30, 2020 |
4. Employee Options and Benef_2
4. Employee Options and Benefit Plans (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 29, 2018 | Dec. 30, 2017 | Dec. 31, 2016 | |
401K plan expenses | $ 100 | $ 100 | $ 0 |
Management Phantom Unit Plan [Member] | |||
Share-based compensation expense | 600 | 300 | 200 |
Certain Members of Management [Member] | |||
Share-based compensation expense | $ 200 | $ 100 | $ 0 |
Class A Phantom Units [Member] | |||
Phantom units outstanding | 4,750 | ||
Class B Phantom Units [Member] | |||
Phantom units outstanding | 4,750 |
5. Other Income (Details Narrat
5. Other Income (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 29, 2018 | Dec. 30, 2017 | Dec. 31, 2016 | |
Other income (expense): | |||
Other non-operating income | $ 408 | $ 138 | $ 700 |
6. Income Taxes (Details Narrat
6. Income Taxes (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 29, 2018 | Dec. 30, 2017 | Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |||
Income tax expense | $ 0 | $ 0 | $ 0 |
7. Related Party Transactions (
7. Related Party Transactions (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 29, 2018 | Dec. 30, 2017 | Dec. 31, 2016 | |
Accounts receivable from unitholders | $ 0 | $ 100 | |
Accounts payables to unitholders | $ 5,700 | $ 28,700 | |
National Beef Packing Company, LLC [Member] | Cattle requirements [Member] | |||
Concentration percentage | 25.00% | 24.00% | 27.00% |
9. Quarterly Results (Unaudit_3
9. Quarterly Results (Unaudited) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 29, 2018 | Sep. 29, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 30, 2017 | Sep. 30, 2017 | Jun. 24, 2017 | Mar. 25, 2017 | Dec. 29, 2018 | Dec. 30, 2017 | Dec. 31, 2016 | |
Net Sales | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 |
Operating Loss | (1,135) | (816) | (1,092) | (1,445) | (1,252) | (862) | (840) | (1,067) | (4,488) | (4,021) | (3,634) |
Net Income (Loss) | $ 20,671 | $ 28,928 | $ 27,788 | $ 9,201 | $ 13,450 | $ 25,501 | $ 10,954 | $ 7,576 | $ 86,588 | $ 57,481 | $ 46,368 |
Class A Units [Member] | |||||||||||
Basic and Diluted Earnings Per Unit | $ 2.81 | $ 3.93 | $ 3.78 | $ 1.25 | $ 1.83 | $ 3.47 | $ 1.49 | $ 1.03 | |||
Class B Units [Member] | |||||||||||
Basic and Diluted Earnings Per Unit | $ 24.63 | $ 34.47 | $ 33.11 | $ 10.96 | $ 16.02 | $ 30.8 | $ 13.05 | $ 9.03 |
10. Subsequent Events (Details
10. Subsequent Events (Details Narrative) $ in Thousands | 2 Months Ended |
Mar. 11, 2019USD ($) | |
Subsequent Event [Member] | |
Proportionate share price of purchase price of Iowa Premium | $ 22,600 |