EXHIBIT 99.5
CONTENTS
| Financial Statements | |
Balance Sheets | 1 |
Statement of Operations | 2 |
Statement of Cash Flows | 3 |
Notes to Financial Statements | 4 - 5 |
HILLANDALE, LLC
Balance Sheet (Unaudited)
| ASSETS | September 24, 2005 | ||||
|---|---|---|---|---|---|
| Current assets | |||||
| Cash and cash equivalents | $ | 1,892,347 | |||
| Trade and other receivables | 4,655,263 | ||||
| Receivables from related parties | 5,062,230 | ||||
| Inventories | 11,440,976 | ||||
| Prepaid expenses and other current assets | 580,840 | ||||
| Due from affiliates | 453,626 | ||||
| Total current assets | 24,085,282 | ||||
Other assets: | |||||
| Notes receivable and investments | 1,147,039 | ||||
| Other assets | 1,088,006 | ||||
| 2,235,045 | |||||
Property, plant and equipment, net | 23,112,106 | ||||
| 25,347,151 | |||||
| Total assets | $ | 49,432,433 | |||
LIABILITIES AND MEMBERS’ EQUITY | |||||
Current liabilities | |||||
| Accounts payable and accrued expenses | $ | 3,608,849 | |||
| Accounts payable - related parties | 1,470,241 | ||||
| Notes payable | 8,010,000 | ||||
| Current maturities of long-term debt | 2,803,869 | ||||
| Total current liabilities | 15,892,959 | ||||
Long-term debt, less current maturities | 10,989,666 | ||||
Members’ equity | 22,549,808 | ||||
Total liabilities and members’ equity | $ | 49,432,433 | |||
See accompanying notes.
HILLANDALE, LLC
Statement of Operations (Unaudited)
For the eight week period ended September 24, 2005
| Eight week period ended September 24, 2005 | |||||
|---|---|---|---|---|---|
| Net sales | $ | 19,080,972 | |||
| Cost of sales | 15,670,502 | ||||
| Gross profit | 3,410,470 | ||||
Selling, general and administrative | 4,623,210 | ||||
| Operating loss | (1,212,740 | ) | |||
Interest expense | 141,793 | ||||
Other income, net | 19,332 | ||||
Net loss | $ | (1,335,201 | ) | ||
See accompanying notes.
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HILLANDALE, LLC
Statement of Cash Flows (Unaudited)
For the eight week period ended September 24, 2005
| Eight week period ended September 24, 2005 | |||||
|---|---|---|---|---|---|
| Cash flows from operating activities | |||||
| Net loss | $ | (1,335,201 | ) | ||
| Adjustments to reconcile net income | |||||
| to net cash provided by operating activities | |||||
| Depreciation | 637,237 | ||||
| Changes in operating assets and liabilities | |||||
| Trade and other receivables | (2,525,321 | ) | |||
| Inventories | (110,802 | ) | |||
| Prepaid expenses and other assets | (32,494 | ) | |||
| Accounts payable and accrued expenses | 1,885,148 | ||||
| Net cash used for operating activities | (1,481,433 | ) | |||
| Cash flows from investing activities | |||||
| Purchases of property, plant and equipment | (103,805 | ) | |||
| Net payments received on notes receivable | 3,468 | ||||
| Net payments to affiliates | (453,626 | ) | |||
Net cash used in investing activities | (553,963 | ) | |||
Cash flows from financing activities | |||||
| Long-term borrowings | 2,000,000 | ||||
| Principal payments on long-term debt | (1,990,567 | ) | |||
Net cash provided by financing activities | 9,433 | ||||
Net decrease in cash and cash equivalents | (2,025,963 | ) | |||
Cash and cash equivalents at beginning of period | 3,918,310 | ||||
Cash and cash equivalents at end of period | $ | 1,892,347 | |||
See accompanying notes.
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HILLANDALE, LLC
As of and for the eight week period ended September 24, 2005
NOTES TO FINANCIAL STATEMENTS
Basis of Presentation
Hillandale, LLC (the “Company”) was formed in July, 2005 as a limited liability company. Effective July 28, 2005, Hillandale Farms, Inc. and Hillandale Farms of Fla. Inc. contributed substantially all of their assets, liabilities, and business to the Company in exchange for Membership Units in the Company. The contributions have been accounted for in the accompanying financial statements on the historical basis of the assets and liabilities contributed. The carrying value of the net assets contributed were as follows as of July 28, 2005:
| Current assets | $ | 22,960,101 | |||
| Property, plant and equipment, net | 23,645,462 | ||||
| Other non-current assets | 2,267,414 | ||||
| Total assets contributed | 48,872,977 | ||||
Less: Total liabilities assumed | (24,988,044 | ) | |||
Net assets contributed | $ | 23,884,933 | |||
The amounts set forth in the preceding financial statements of the Company are unaudited as of and for the period ended September 24, 2005, however, in the opinion of management, reflect all adjustments (consisting only of normal recurring adjustments) necessary for a fair statement of the results for the period presented. Such results are not necessarily indicative of results for the full year. The unaudited financial statements have been prepared in accordance with generally accepted accounting principles for the interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and notes required by generally accepted accounting principles for complete financial statements.
Related-Party Transactions
Hillandale Farms, LLC
The Company sold $606,258 in feed to Hillandale Farms, LLC during the eight weeks ended September 24, 2005. Hillandale, LLC owned 50% of Hillandale Farms, LLC as of September 24, 2005. On October 5, 2005, Hillandale, LLC purchased the remaining 50% interest in Hillandale Farms, LLC for $1.0 million.
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The Company has a receivable recorded as of September 24, 2005 relating to funds provided to Hillandale Farms, LLC to fund a portion of Hillandale Farms, LLC’s operations. As of September 24, 2005, the receivable balance was $2,894,081.
The Company purchased $846,678 in eggs from Hillandale Farms, LLC during the eight weeks ended September 24, 2005. Included in accounts payable — related parties as of September 24, 2005 is a payable of $187,168 relating to egg purchases from Hillandale Farms, LLC.
American Egg Products
The Company has a 27.5% equity ownership in American Egg Products. During the eight weeks ended September 24, 2005 the Company sold $8,597 in breeder eggs to American Egg Products. Included in receivables from related parties as of September 24, 2005 is a receivable from American Egg Products for breeder egg purchases of $101,481.
Cal-Maine Foods, Inc.
The Company sold $802,971 in shell eggs to Cal-Maine Foods-Inc. during the eight week period ended September 24, 2005. Included in receivables from related parties as of September 24, 2005 is a receivable from Cal-Maine Foods, Inc. for egg purchases of $344,514.
Columbia Grain & Ingredients, Inc.
Certain of the feed ingredients purchased by the Company was purchased from Columbia Grain & Ingredients, Inc. Columbia Grain & Ingredients, Inc. is owned by shareholders of Hillandale, LLC. The Company purchased $3,436,067 in feed from Columbia Grain & Ingredients, Inc. during the eight week period ended September 24, 2005. Included in accounts payable – related parties as of September 24, 2005 is a payable to Columbia Grain & Ingredients for ingredient purchases of $1,283,073.
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