Filed Pursuant To Rule 424(b)(3)
File Number 333-175596
MICHAEL FOODS GROUP, INC.
SUPPLEMENT NO. 27 TO
MARKET-MAKING PROSPECTUS DATED AUGUST 8, 2011
THE DATE OF THIS SUPPLEMENT IS MAY 9, 2014
ON MAY 8, 2014, MICHAEL FOODS GROUP, INC. FILED THE ATTACHED
CURRENT REPORT ON FORM 8-K DATED MAY 8, 2014
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities and Exchange Act of 1934
Date of Report (Date of earliest event reported): May 8, 2014
MICHAEL FOODS GROUP, INC.
(Exact name of registrant as specified in its charter)
| DELAWARE | 333-173400 | 20-0344222 | ||
| (State or other jurisdiction of incorporation or organization) | (Commission File Number) | (I.R.S. Employer Identification No.) |
301 CARLSON PARKWAY SUITE 400 MINNETONKA, MINNESOTA | 55305 | |
| (Address of principal executive offices) | (Zip Code) |
(952) 258-4000
(Registrant’s telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 2.02. Results of Operations and Financial Condition.
On May 8, 2014, Michael Foods Group, Inc. (the “Company”) issued a news release to the Company’s debtholders pertaining to the Company’s financial results for the first quarter of 2014. A copy of the news release issued by the Company in connection with this Current Report on Form 8-K under Item 9.01 is attached hereto as Exhibit 99.1 and incorporated by reference herein. The information in this Form 8-K shall not be deemed “Filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific reference in such a filing.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
The following material is filed as an exhibit to this Current Report on Form 8-K:
Exhibit | Description of Exhibit | |
| 99.1 | News release issued by the Company on May 8, 2014. | |
2
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: May 8, 2014 | MICHAEL FOODS GROUP, INC. | |||||
| By: | /s/ James E. Dwyer, Jr. | |||||
| James E. Dwyer, Jr. | ||||||
| Its: Chairman and Chief Executive Officer | ||||||
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EXHIBIT INDEX
Exhibit | Description of Exhibit | |
| 99.1 | News release issued by the Company on May 8, 2014. | |
4
Exhibit 99.1
Contact:
Mark Westphal
Senior Vice President and
Chief Financial Officer
(952) 258-4000
MICHAEL FOODS REPORTS FIRST QUARTER RESULTS
MINNETONKA, MN, May 8—Michael Foods Group, Inc. today reported financial results for the first quarter of 2014.
Net sales for the quarter ended March 29, 2014 were $474 million, compared to $484.3 million in 2013, a decrease of 2.1%. Net earnings for the quarter ended March 29, 2014 were $1.7 million, compared to $14.2 million in 2013.
Earnings before interest, taxes, depreciation, amortization (“EBITDA”) and other adjustments (“adjusted EBITDA,” as defined in the Company’s credit facility) for the quarter ended March 29, 2014 were $48.2 million, compared to $67.2 million in 2013.
Michael Foods Group, Inc. uses adjusted EBITDA as a measurement of financial results, as an indication of the relative strength of its operating performance, and to determine incentive compensation levels. Management believes that EBITDA and adjusted EBITDA provide potential investors with useful information with which to analyze and compare with other companies in our industry our operating performance and our ability to service debt.
Certain items contained in this release may be “forward-looking statements.” Forward-looking statements include statements concerning our plans, objectives, goals, strategies, future events, future sales or performance, capital expenditures, financing needs, ability to fund operations, intentions relating to acquisitions, our competitive strengths and weaknesses, our business strategy and the trends we anticipate in the industries and economies in which we operate and other information that is not historical information. When used herein, the words “estimates,” “expects,” “anticipates,” “projects,” “plans,” “intends,” “believes” and variations of such words or similar expressions are intended to identify forward-looking statements. These forward-looking statements are not guarantees of future performance.
All forward-looking statements are based upon our current expectations and various assumptions. Our expectations, beliefs and projections are expressed in good faith, and we believe there is a reasonable basis for them, but there can be no assurance that our expectations, beliefs and projections will be realized. There are a number of risks and uncertainties that could cause our actual results to differ materially from the forward-looking statements contained in this release, including the factors described under “Risk Factors” in our 2013 Annual Report on Form 10-K, filed with the Securities and Exchange Commission on March 21, 2014. Important factors that could cause our actual results to differ materially from the forward-looking statements we make in this release include changes in domestic and international economic conditions.
Unaudited segment data follows (in thousands):
| Egg Products | Refrigerated Potato Products | Cheese & Other Dairy-Case Products | Corporate | Total | ||||||||||||||||
Three months ended March 29, 2014 | ||||||||||||||||||||
External net sales | $ | 349,104 | $ | 42,409 | $ | 82,526 | $ | — | $ | 474,039 | ||||||||||
Net earnings (loss) | 8,891 | 1,509 | (233 | ) | (8,473 | ) | 1,694 | |||||||||||||
Adjusted EBITDA | 41,728 | 5,875 | 2,916 | (2,344 | ) | 48,175 | ||||||||||||||
Three months ended March 30, 2013 | ||||||||||||||||||||
External net sales | $ | 345,321 | $ | 41,846 | $ | 97,104 | $ | — | $ | 484,271 | ||||||||||
Net earnings (loss) | 16,225 | 2,848 | 3,560 | (8,390 | ) | 14,243 | ||||||||||||||
Adjusted EBITDA | 52,262 | 8,144 | 8,957 | (2,122 | ) | 67,241 | ||||||||||||||
Adjusted EBITDA is a financial indicator used to analyze and compare companies on the basis of operating performance. It should not be considered in isolation or as a substitute for measures of performance prepared in accordance with generally accepted accounting principles and is not indicative of operating profit or cash flow from operations as determined under generally accepted accounting principles.
The following table reconciles net earnings (loss) to adjusted EBITDA for the three-month period ended March 29, 2014 (unaudited, in thousands):
| Egg Products | Refrigerated Potato Products | Cheese & Other Dairy-Case Products | Corporate | Total | ||||||||||||||||
Net earnings (loss) | $ | 8,891 | $ | 1,509 | $ | (233 | ) | $ | (8,473 | ) | $ | 1,694 | ||||||||
Unrealized loss on currency transactions (a) | 541 | — | — | — | 541 | |||||||||||||||
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Consolidated net earnings (loss) | 9,432 | 1,509 | (233 | ) | (8,473 | ) | 2,235 | |||||||||||||
Interest expense | 51 | 15 | — | 21,129 | 21,195 | |||||||||||||||
Intercompany interest expense (income) | 6,458 | 451 | 984 | (7,893 | ) | — | ||||||||||||||
Income tax expense (benefit) | 4,948 | 518 | 50 | (4,476 | ) | 1,040 | ||||||||||||||
Depreciation and amortization | 18,042 | 2,859 | 1,742 | — | 22,643 | |||||||||||||||
Non-cash and stock option compensation | — | — | — | 533 | 533 | |||||||||||||||
Costs associated with permitted acquisition | 179 | — | — | — | 179 | |||||||||||||||
Equity sponsor management fee | — | — | — | 693 | 693 | |||||||||||||||
Expenses related to industrial revenue bonds guaranteed by certain of our subsidiaries | 106 | — | — | — | 106 | |||||||||||||||
Unrealized gain on swap contracts | (449 | ) | — | — | — | (449 | ) | |||||||||||||
Intercompany allocation of corporate admin costs | 2,961 | 523 | 373 | (3,857 | ) | — | ||||||||||||||
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Adjusted EBITDA, as defined in the credit agreement | $ | 41,728 | $ | 5,875 | $ | 2,916 | $ | (2,344 | ) | $ | 48,175 | |||||||||
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| (a) | The unrealized loss on currency transactions relates to an intercompany note receivable denominated in Canadian currency due from our Canadian subsidiary, MFI Food Canada Ltd. |
The following table reconciles net earnings (loss) to adjusted EBITDA for the three-month period ended March 30, 2013 (unaudited, in thousands):
| Egg Products | Refrigerated Potato Products | Cheese & Other Dairy-Case Products | Corporate | Total | ||||||||||||||||
Net earnings (loss) | $ | 16,225 | $ | 2,848 | $ | 3,560 | $ | (8,390 | ) | $ | 14,243 | |||||||||
Unrealized loss on currency transactions (a) | 377 | — | — | — | 377 | |||||||||||||||
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Consolidated net earnings (loss) | 16,602 | 2,848 | 3,560 | (8,390 | ) | 14,620 | ||||||||||||||
Interest expense | 101 | 77 | — | 21,656 | 21,834 | |||||||||||||||
Intercompany interest expense (income) | 6,697 | 467 | 1,021 | (8,185 | ) | — | ||||||||||||||
Income tax expense (benefit) | 8,601 | 1,326 | 2,130 | (5,070 | ) | 6,987 | ||||||||||||||
Depreciation and amortization | 18,090 | 2,885 | 1,764 | 1 | 22,740 | |||||||||||||||
Non-cash and stock option compensation | — | — | — | 535 | 535 | |||||||||||||||
Unusual charges | — | — | — | 157 | 157 | |||||||||||||||
Equity sponsor management fee | — | — | — | 646 | 646 | |||||||||||||||
Expenses related to industrial revenue bonds guaranteed by certain of our subsidiaries | 115 | — | — | — | 115 | |||||||||||||||
Unrealized gain on swap contracts | (393 | ) | — | — | — | (393 | ) | |||||||||||||
Intercompany allocation of corporate admin costs | 2,449 | 541 | 482 | (3,472 | ) | — | ||||||||||||||
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Adjusted EBITDA, as defined in the credit agreement | $ | 52,262 | $ | 8,144 | $ | 8,957 | $ | (2,122 | ) | $ | 67,241 | |||||||||
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| (a) | The unrealized loss on currency transactions relates to an intercompany note receivable denominated in Canadian currency due from our Canadian subsidiary, MFI Food Canada Ltd. |
Michael Foods Group, Inc., based in Minnetonka, Minnesota, is a producer and distributor of food products to the foodservice, retail and food-ingredient markets. Its principal products are egg products, refrigerated potato products, cheese and other dairy-case products.
Consolidated statements of earnings are as follows:
Michael Foods Group, Inc.
Consolidated Statements of Earnings
For the three-month periods ended March 29, 2014 and March 30, 2013
(In thousands)
| 2014 | 2013 | |||||||
Net sales | $ | 474,039 | $ | 484,271 | ||||
Cost of sales | 407,113 | 397,803 | ||||||
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Gross profit | 66,926 | 86,468 | ||||||
Selling, general and administrative expenses | 42,451 | 42,528 | ||||||
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Operating profit | 24,475 | 43,940 | ||||||
Interest expense, net | 21,193 | 21,823 | ||||||
Unrealized loss on currency transactions | 541 | 377 | ||||||
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Earnings before income taxes and equity in losses of unconsolidated subsidiary | 2,741 | 21,740 | ||||||
Income tax expense | 1,040 | 6,987 | ||||||
Equity in losses of unconsolidated subsidiary | 7 | 510 | ||||||
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Net earnings | $ | 1,694 | $ | 14,243 | ||||
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| March 29, 2014 | December 28, 2013 | |||||||
Selected Balance Sheet Information: | ||||||||
Cash and equivalents | $ | 42,289 | $ | 60,677 | ||||
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Accrued interest | $ | 12,007 | $ | 22,534 | ||||
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Long-term debt, including current maturities | $ | 1,170,049 | $ | 1,171,062 | ||||
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# # #
05-08-14