NORTHLAND CRANBERRIES, INC.
PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF INCOME
YEAR ENDED AUGUST 31, 2004
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
Historical | Branded Juice Adjustment | Ocean Spray Adjustment | As Adjusted | |||||||||||
Net revenues | $ | 74,045 | $ | (47,544 | ) | $ | 0 | $ | 26,501 | |||||
Cost of sales | (50,969 | ) | 35,871 | 0 | (15,098 | ) | ||||||||
Gross profit | 23,076 | (11,673 | ) | 0 | 11,403 | |||||||||
Selling, general and administrative | ||||||||||||||
expenses | (18,996 | ) | 9,482 | 5,893 | (3,621 | ) | ||||||||
Write down of long-lived assets and assets | ||||||||||||||
held for sale | (558 | ) | 0 | 0 | (558 | ) | ||||||||
Gain on disposal of business and property | ||||||||||||||
and equipment | 2,851 | 0 | 0 | 2,851 | ||||||||||
Other income | 3,000 | 0 | 0 | 3,000 | ||||||||||
Income (loss) from operations | 9,373 | (2,191 | ) | 5,893 | 13,075 | |||||||||
Interest expense | (2,886 | ) | 560 | 2,294 | (32 | ) | ||||||||
Gain on debt extinguishment | 5,339 | 0 | 0 | 5,339 | ||||||||||
Interest income | 47 | 0 | 0 | 47 | ||||||||||
Income (loss) before income taxes | 11,873 | (1,631 | ) | 8,187 | 18,429 | |||||||||
Income tax benefit | 6,156 | 0 | 0 | 6,156 | ||||||||||
Net income (loss) | $ | 18,029 | $ | (1,631 | ) | $ | 8,187 | $ | 24,585 | |||||
Net income (loss) per common share: | ||||||||||||||
Basic: | $ | 0.19 | $ | (0.02 | ) | $ | 0.09 | $ | 0.26 | |||||
Diluted: | $ | 0.18 | $ | (0.02 | ) | $ | 0.08 | $ | 0.24 | |||||
Shares used in computing net income (loss) | ||||||||||||||
per share: | ||||||||||||||
Basic | 93,403,758 | 93,403,758 | 93,403,758 | 93,403,758 | ||||||||||
Diluted | 100,939,523 | 100,939,523 | 100,939,523 | 100,939,523 |
See notes to unaudited pro forma condensed consolidated financial statements.
NORTHLAND CRANBERRIES, INC.
PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF INCOME
FOR THE SIX MONTHS ENDED FEBRUARY 28, 2005
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
Historical | Ocean Spray Adjustment | As Adjusted | |||||||||
Net revenues | $ | 17,709 | $ | 0 | $ | 17,709 | |||||
Cost of sales | (11,655 | ) | 0 | (11,655 | ) | ||||||
Gross profit | 6,054 | 0 | 6,054 | ||||||||
Selling, general and administrative expenses | (4,091 | ) | 1,847 | (2,244 | ) | ||||||
Gain on disposal of property and equipment | 7,731 | 0 | 7,731 | ||||||||
Income from operations | 9,694 | 1,847 | 11,541 | ||||||||
Interest expense | (1,810 | ) | 1,796 | (14 | ) | ||||||
Loss on debt extinguishment | (1,731 | ) | 0 | (1,731 | ) | ||||||
Interest income | 102 | 0 | 102 | ||||||||
Income before income taxes | 6,255 | 3,643 | 9,898 | ||||||||
Income tax expense | (3,133 | ) | 0 | (3,133 | ) | ||||||
Income from continuing operations | $ | 3,122 | $ | 3,643 | $ | 6,765 | |||||
Income from continuing operations | |||||||||||
per common share | |||||||||||
Basic: | $ | 0.03 | $ | 0.04 | $ | 0.07 | |||||
Diluted: | $ | 0.03 | $ | 0.04 | $ | 0.07 | |||||
Shares used in computing income from continuing | |||||||||||
operations per share: | |||||||||||
Basic | 94,091,633 | 94,091,633 | 94,091,633 | ||||||||
Diluted | 100,975,372 | 100,975,372 | 100,975,372 |
See notes to unaudited pro forma condensed consolidated financial statements.
NORTHLAND CRANBERRIES, INC.
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEETS
AS OF FEBRUARY 28, 2005
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
Historical | Ocean Spray Adjustment | As Adjusted | |||||||||
ASSETS | |||||||||||
Current assets: | |||||||||||
Cash and cash equivalents | $ | 999 | $ | 4,662 | $ | 4,763 | |||||
Accounts receivable - net | 1,072 | 0 | 1,072 | ||||||||
Note receivable and accounts receivable - other | 3,014 | 0 | 3,014 | ||||||||
Inventories | 20,745 | (898 | ) | 19,847 | |||||||
Prepaid expenses and other current assets | 1,017 | 0 | 1,017 | ||||||||
Deferred income taxes | 3,175 | (3,175 | ) | 0 | |||||||
Total current assets | 30,022 | 589 | 30,611 | ||||||||
Property and equipment - net | 46,386 | (22,818 | ) | 23,568 | |||||||
Other assets | 809 | 0 | 809 | ||||||||
Debt issuance cost - net | 349 | 0 | 349 | ||||||||
Total assets | $ | 77,566 | $ | (22,229 | ) | $ | 55,337 | ||||
LIABILITIES AND SHAREHOLDERS' EQUITY | |||||||||||
Current liabilities: | |||||||||||
Accounts payable | $ | 6,621 | $ | 0 | $ | 6,621 | |||||
Accrued liabilities | 8,507 | (5,000 | ) | 3,507 | |||||||
Current maturities of long-term debt: | |||||||||||
Outstanding principal payments | 13,723 | (13,573 | ) | 150 | |||||||
Future interest payments from debt restructuring | 186 | (186 | ) | 0 | |||||||
Current maturities of long-term debt | 13,909 | (13,759 | ) | 150 | |||||||
Total current liabilities | 29,037 | (18,759 | ) | 10,278 | |||||||
Long-term debt, less current maturities: | |||||||||||
Outstanding principal payments | 8,053 | (7,753 | ) | 300 | |||||||
Future interest payments from debt restructuring | 1,076 | (1,076 | ) | 0 | |||||||
Long-term debt, less current maturities | 9,129 | (8,829 | ) | 300 | |||||||
Total liabilities | 38,166 | (27,588 | ) | 10,578 | |||||||
Shareholders' equity: | |||||||||||
Common stock - Class A, $.01 par value, 94,091,633 shares | |||||||||||
issued and outstanding | 941 | 0 | 941 | ||||||||
Redeemable preferred stock - Series B, $.01 par value, 100 | |||||||||||
shares issued and outstanding | 0 | 0 | 0 | ||||||||
Additional paid-in capital | 154,902 | 0 | 154,902 | ||||||||
Accumulated deficit | (116,443 | ) | 5,359 | (111,084 | ) | ||||||
Total shareholders' equity | 39,400 | 5,359 | 44,759 | ||||||||
Total liabilities and shareholders' equity | $ | 77,566 | $ | (22,229 | ) | $ | 55,337 | ||||
See notes to unaudited pro forma condensed consolidated financial statements.
NORTHLAND CRANBERRIES, INC.
NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
The pro forma financial data do not purport to project our results of operations for the current year or for any future period. The pro forma financial data are based upon, and should be read in connection with, the latest audited consolidated financial statements and the notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended August 31, 2004 and the Company’s Quarterly Report on Form 10-Q for the six months ended February 28, 2005.
The pro forma condensed consolidated statements of income for the year ended August 31, 2004 have been prepared to show two adjustments (i) the sale of the branded juice business as reported in the Form 8-K filed with the Securities and Exchange Commission February 28, 2005 and (ii) the sale of nine cranberry marshes (including the Warrens marsh, which is scheduled to close on or before June 10, 2005), pursuant to the option agreement with Ocean Spray.
The pro forma condensed consolidated statements of income for the six months ended February 28, 2005 have been prepared to show the adjustment for the sale of nine cranberry marshes pursuant to the option agreement with Ocean Spray (the sale of the branded juice business, which was sold in February 2005, is already reflected as discontinued operations within the historical financial data presented).
The pro forma condensed consolidated statements of income do not reflect the gain on the sale of nine cranberry marshes of approximately $5.4 million (net of income taxes).
Branded Juice Adjustments:
1. | The unaudited pro forma condensed consolidated statements of income for year ended August 31, 2004 are based on the financial statements of the Company after giving effect to the following pro forma adjustments: |
(a) | The reduction in revenue and cost of goods sold as a result of the sale of the branded juice business; |
(b) | The reduction in selling, general and administrative expenses as a result of the sale; |
(c) | The decrease in interest expense as a result of the reduction in debt due to the application of proceeds from the sale of the branded juice business; and |
(d) | There is no provision for income tax expense resulting from the pro forma adjustments as any tax expense associated with the adjustments would be offset by the reversal of previously unrecognized valuation allowances on net operating loss carry forwards. |
Ocean Spray Adjustments:
1. | The unaudited pro forma condensed consolidated balance sheets have been prepared to reflect the sale by the Company of nine cranberry marshes (including the Warrens marsh, which is scheduled to close on or before June 10, 2005). The pro forma adjustments as of February 28, 2005 reflect the following: |
(a) | The receipt of cash from the sale of the nine cranberry marshes; |
(b) | The reduction of debt from the proceeds of the sale of the nine cranberry marshes; |
(c) | The assets sold; and |
(d) | The liabilities extinguished. |
2. | The unaudited pro forma condensed consolidated statements of income for the year ended August 31, 2004 are based on the financial statements of the Company after giving effect to the following pro forma adjustments: |
(a) | The reduction of selling, general and administrative expenses as a result of the sale of the nine cranberry marches is based on management estimates; |
(b) | The decrease in interest expense as a result of the reduction in debt due to the application of proceeds from the sale of the nine cranberry marshes; and |
(c) | There is no provision for income tax expense resulting from the pro forma adjustments as any tax expense associated with the adjustments would be offset by the reversal of previously unrecognized valuation allowances on net operating loss carry forwards. |
3. | The unaudited pro forma condensed consolidated statements of income for the six months ended February 28, 2005 are based on the financial statements of the Company after giving effect to the following pro forma adjustments: |
(a) | The reduction in selling, general and administrative expenses as a result of the sale of the nine cranberry marshes; |
(b) | The decrease in interest expense as a result of the reduction in debt due to the application of proceeds from the sale of the nine cranberry marshes; and |
(c) | There is no provision for income tax expense resulting from the pro forma adjustments as any tax expense associated with the adjustments would be offset by the reversal of previously unrecognized valuation allowances on net operating loss carry forwards. |