SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-Q
/X/ Quarterly report pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934 for the quarterly period
ended May 31, 1995; or
/ / Transition report pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934 for the transition period
from __________ to __________.
Commission File Number: 33-12173
AMERICOLD CORPORATION
(Exact name of registrant as specified in its charter)
OREGON 93-0295215
(State of Incorporation) (I.R.S. Employer
Identification Number)
7007 S.W. Cardinal Lane, Suite 135
Portland, Oregon 97224
(Address of principal executive offices) (Zip Code)
Registrant's telephone number: (503) 624-8585
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 / /
Number of shares outstanding of the registrant's common stock, par
value $.01 per share, as of June 30, 1995: 4,860,934 shares.
AMERICOLD CORPORATION
Form 10-Q
INDEX
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Page
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PART I FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheets 3
Consolidated Statements of Operations 5
Consolidated Statements of Cash Flows 6
Notes to Consolidated Financial Statements 7
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of
Operations 11
PART II OTHER INFORMATION
Item 1. Legal Proceedings 18
Item 2. Changes in Securities 18
Item 4. Submission of Matters to a Vote of
Security Holders 18
Item 6. Exhibits and Reports on Form 8-K 19
SIGNATURES 21
EXHIBIT INDEX 22
PART I - Financial Information
Item 1. Financial Statements
AMERICOLD CORPORATION
CONSOLIDATED BALANCE SHEETS
Last day of February 1995 and May 1995
(In thousands, except share data)
Last day of Last day of
February 1995 May 1995
------------- -----------
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents (note 6) $ 33,163 $ 36,001
Trade receivables, net (note 7) 20,510 17,794
Other receivables, net 2,105 2,845
Prepaid expenses 5,240 4,407
Other current assets 974 884
----------- ----------
Total current assets 61,992 61,931
Property, plant and equipment, less accumulated depreciation
of $156,806 and $161,484, respectively (note 7) 367,248 379,319
Cost in excess of net assets acquired, less accumulated
amortization of $19,765 and $20,398 respectively 80,028 79,395
Other noncurrent assets 35,327 18,075
----------- ----------
Total assets $ 544,595 $ 538,720
=========== ==========
LIABILITIES, PREFERRED STOCK AND COMMON STOCKHOLDERS' DEFICIT
Current liabilities:
Accounts payable $ 6,741 $ 7,489
Accrued interest 17,683 20,187
Accrued expenses 11,345 8,896
Deferred revenue 5,914 5,388
Current maturities of long-term debt (note 7) 31,315 31,397
Other current liabilities 3,912 3,791
---------- ----------
Total current liabilities 76,910 77,148
Long-term debt, less current maturities (note 7) 442,912 442,456
Deferred income taxes 106,098 104,247
Other noncurrent liabilities 10,633 10,329
---------- ----------
Total liabilities 636,553 634,180
---------- ----------
Preferred stock, $100 par value; authorized 1,000,000 shares;
issued and outstanding 52,936 shares (note 5) 5,789 5,976
---------- ----------
Common stockholders' deficit (note 3):
Common stock, $.01 par value; authorized
10,000,000 shares; issued and outstanding 4,860,934 shares 49 49
Additional paid-in capital 49,022 49,022
Retained deficit (146,775) (150,464)
Equity adjustment to recognize minimum pension liability (43) (43)
---------- ----------
Total common stockholders' deficit (97,747) (101,436)
---------- ----------
Total liabilities, preferred stock and
common stockholders' deficit $ 544,595 $ 538,720
========== ==========
See accompanying notes to consolidated financial statements.
AMERICOLD CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
Three months ended last day of May 1994 and 1995
(In thousands, except per share data)
Three months Three months
ended last ended last
day of day of
May 1994 May 1995
------------ ------------
(Unaudited) (Unaudited)
Net sales $ 48,752 $ 53,183
----------- ----------
Operating expenses:
Cost of sales 31,932 33,574
Amortization of cost in excess of
net assets acquired 635 633
Selling and administrative expenses 6,654 6,909
----------- -----------
Total operating expenses 39,221 41,116
----------- -----------
Gross operating margin 9,531 12,067
----------- -----------
Other (expense) income:
Interest expense (13,744) (14,234)
Reorganization expenses (note 2) - (3,523)
Other, net 154 337
----------- -----------
Total other expense (13,590) (17,420)
----------- -----------
Loss before income taxes (4,059) (5,353)
Benefit for income taxes (note 4) 1,343 1,851
----------- -----------
Net loss $ (2,716) $ (3,502)
=========== ===========
Net loss per common share $ (0.59) $ (0.76)
=========== ===========
Weighted average number of shares
outstanding 4,864 4,861
=========== ===========
See accompanying notes to consolidated financial statements.
AMERICOLD CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
Three months ended last day of May 1994 and 1995
(In thousands)
Three months Three months
ended last ended last
day of day of
May 1994 May 1995
----------- -----------
(Unaudited) (Unaudited)
Cash flows from operating activities:
Net loss $ (2,716) $ (3,502)
Adjustments to reconcile net loss to net
cash provided (used) by operating activities:
Depreciation 5,122 4,720
Amortization and other noncash expenses 1,162 1,415
Changes in assets and liabilities (3,867) 2,750
Provision for deferred taxes (1,343) (1,851)
----------- -----------
Net cash provided (used) by operating activities (1,642) 3,532
----------- -----------
Cash flows from investing activities:
Net expenditures for property, plant
and equipment (2,699) (16,878)
Proceeds from insurance policies and other items, net 23,659 852
----------- -----------
Net cash provided (used) by investing activities 20,960 (16,026)
----------- -----------
Cash flows from financing activities:
Principal payments under capitalized
lease and other debt obligations (401) (622)
Release of escrowed funds - 15,954
----------- -----------
Net cash provided (used) by financing activities (401) 15,332
----------- -----------
Net increase in cash and cash equivalents 18,917 2,838
Cash and cash equivalents at beginning of period 3,892 33,163
----------- -----------
Cash and cash equivalents at end of period $ 22,809 $ 36,001
=========== ===========
Supplemental disclosure of cash flow information:
Cash paid year-to-date for interest,
net of amounts capitalized $ 17,309 $ 11,392
=========== ===========
Cash paid during the year for income taxes $ 28 $ 324
=========== ===========
See accompanying notes to consolidated financial statements.
AMERICOLD CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. PRINCIPLES OF CONSOLIDATION
The consolidated balance sheet as of the last day of May 1995,
the related consolidated statements of operations for the
three months ended the last day of May 1994 and May 1995, and
the related consolidated statements of cash flows for the
three months ended the last day of May 1994 and May 1995 are
unaudited. In the opinion of management, all adjustments
necessary for a fair presentation of such financial statements
have been included. Such adjustments consisted of normal
recurring items. Interim results are not necessarily
indicative of results for a full year. The financial
information presented herein should be read in conjunction
with the financial statements included in the registrant's
Annual Report on Form 10-K for the year ended the last day of
February 1995.
2. PLAN OF REORGANIZATION UNDER CHAPTER 11
On May 9, 1995, the Company filed a prepackaged plan of
reorganization (the "Plan") under Chapter 11 of the United
States Bankruptcy Code in the United States Bankruptcy Court
for the District of Oregon (the "Court"). The principal
purpose of the Plan was to reduce the Company's short-term
cash requirements with respect to payments due on its
subordinated indebtedness and to adjust certain restrictive
financial covenants and certain other provisions contained in
the Amended and Restated Investment Agreement, dated March 2,
1993, between the Company and Metropolitan Life Insurance
Company (the "MetLife"). On the filing date, the Plan had
been approved by both of the classes of debtholders entitled
to vote on the Plan.
As further explained in note 7, a hearing was held on June 19,
1995 at which time the Court confirmed the Plan. The Company
emerged from the Chapter 11 proceedings on June 30, 1995.
The consolidated financial statements have therefore been
prepared on a going concern basis, which contemplates
continuity of operation, realization of assets and liquidation
of liabilities in the ordinary course of business.
In November 1990, the American Institute of Certified Public
Accountants issued Statement of Position 90-7, "Financial
Reporting by Entities in Reorganization Under the Bankruptcy
Code" ("SOP 90-7"). Under SOP 90-7, the financial statements
for periods including and subsequent to filing a Chapter 11
petition are structured to distinguish transactions and events
that are directly associated with the reorganization from the
ongoing operations of the Company. Since the Company was in
Chapter 11 proceedings for less than two months, and since the
Plan did not differentiate between prepetition and post-
petition liabilities and did not include any forgiveness of
liabilities, the Company has elected not to follow the
presentation proposed by SOP 90-7. The Company has expensed
all professional fees and similar types of expenditures
incurred through the last day of May 1995 directly relating to
the Chapter 11 proceedings as "reorganization expenses." The
Company also has not recorded the effects of possible
rejections of executory contracts or leases in the financial
statements for the first three months of fiscal 1996 (see note
7).
3. COMMON STOCKHOLDERS' DEFICIT
The Company has reserved 300,000 shares of common stock for
issuance under a stock option plan established in 1987. Under
the plan, options are granted by the compensation committee of
the Board of Directors to purchase common stock at a price not
less than 85% of the fair market value on the date the option
is granted.
Information with regard to the plan as of the last day of May
1995 follows:
Number of Shares Exercise Number of Shares Expiration
Subject to Option Price Exercisable Date
----------------- -------- ---------------- ----------
93,795 $10.00 93,795 May 1998
100,000 $18.95 80,000 June 2000
30,000 $21.88 12,000 May 2003
30,000 $20.40 6,000 December 2003
In addition, the Company had reserved 500,000 shares of common
stock for issuance under a Stock Incentive Plan effective
March 1, 1991.
Under the terms of the plan, officers and key management
employees can receive either common stock or cash in specified
amounts depending upon the financial performance of the
Company measured over a four-year period ending February 28,
1995. Since inception of the plan, the Board had approved a
total award of approximately 106,000 shares. The Board
suspended the Stock Incentive Plan effective February 28,
1994. In April 1995, all awards accrued and payable under the
plan were paid. All participants elected to receive cash plus
interest in lieu of stock.
4. PROVISION FOR INCOME TAXES
The provision for income taxes was computed using a tax rate
of 39.2%. The tax rate was applied to income or loss before
taxes, after adding back amortization of cost in excess of net
assets acquired.
5. LOSS PER COMMON SHARE
Loss per common share is computed by dividing net loss, less
preferred dividend requirements, by the weighted average
number of common shares outstanding. See Exhibit 11,
Statement Re Computation of Per Share Earnings.
6. CASH AND CASH EQUIVALENTS
Cash and cash equivalents includes highly liquid investment
instruments, with original maturities of three months or less
when purchased. There were cash equivalents totaling
approximately $25.2 million and $31.9 million as of the last
day of February 1995 and May 1995, respectively.
As of May 31, 1995, the Company was holding approximately $4.8
million in cash which had been tendered to the Trustee under
the indenture related to its first mortgage bonds to
substitute as cash collateral for the property lost at the
Kansas City, Kansas warehouse facility. The Company has not
reclassified any cash balance for the payment.
7. SUBSEQUENT EVENTS
Subsequent to the end of the fiscal quarter, on June 19, 1995,
the Court approved the Company's Disclosure Statement dated
April 14, 1995 and the Company's solicitation of votes to
accept or reject the Plan, and confirmed the Plan. On June
30, 1995, the Company emerged from the Chapter 11 proceedings
in accordance with the Plan, pursuant to which:
(i) each holder of the Company's 11% Senior Subordinated
Debentures due 1997 is entitled to receive a corresponding
amount of new 15% Senior Subordinated Debentures due 2007, and
an amount in cash equal to the accrued but unpaid interest on
the old Senior Subordinated Debentures through June 29, 1995;
and
(ii) the Company repurchased on June 30, 1995 $10 million of
its 11.45% Series A First Mortgage Bonds due 2002 at par and
paid an agreement modification fee of $2.25 million to the
MetLife in connection with amending the Amended and Restated
Investment Agreement, dated March 2, 1993, between the Company
and the MetLife.
Also subsequent to the end of the fiscal quarter, the Company:
(a) Amended on June 30, 1995 the existing credit agreement
with its primary bank, which provides an aggregate
availability of $27.5 million, to be used for any
combination of letters of credit (up to $10.0 million)
and revolving cash borrowings, subject to borrowing base
limitations. The new credit agreement will be secured by
the Company's trade receivables and, at the Company's
option, mortgages on certain of the Company's warehouse
properties.
(b) Filed motions to reject certain lease agreements.
Properties subject to the leases accounted for
approximately $11.7 million of sales and a minimal amount
of gross operating margin in fiscal 1995. The outcome of
the rejections cannot be predicted at this time.
(c) Transferred on June 30, 1995, the $4.8 million as
described in note 6, above, relative to insurance
proceeds from Kansas City.
ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
- ---------------------
INTRODUCTION - During the first quarter of fiscal 1996, the
Company solicited acceptance of a prepackaged plan of
reorganization (the "Plan") under Chapter 11 of the United
States Bankruptcy Code from certain debtholders as a means of
implementing the Company's plan for restructuring a portion of
its outstanding indebtedness. On May 8, 1995, the Company
received approval from the classes of debtholders entitled to
vote on the Plan, and on May 9, 1995, filed the Plan as
approved with the United States Bankruptcy Court for the
District of Oregon (the "Court"). The Company was debtor-in-
possession during the proceedings. Subsequent to the end of
the fiscal quarter, on June 19, 1995, the Court approved the
Company's Plan, and on June 30, 1995, the Company emerged from
the Chapter 11 proceedings. See " - Liquidity and Capital
Resources."
NET SALES - The Company's net sales increased 9.1% from $48.8
million for the first quarter of fiscal 1995 to $53.2 million
for the same period in fiscal 1996.
Americold's net sales for the first three months of fiscal
1995 and the first three months of fiscal 1996 are detailed in
the table below by activity:
NET SALES
(Dollars in Millions)
First Three Months First Three Months
Fiscal 1995 Fiscal 1996
----------- ----------- % Change
Amount % Amount % 1995 to 1996
------ --- ------ --- ------------
Storage $ 22.9 46.9% $ 24.7 46.4% 7.9%
Handling 16.8 34.4% 18.0 33.8% 7.1%
Freezing 1.3 2.7% 1.1 2.1% (15.4)%
Leasing 1.8 3.7% 1.7 3.2% (5.6)%
Other 0.9 1.8% 0.7 1.3% (22.2)%
------ ----- ------ ----- -------
Net ware-
housing
sales $ 43.7 89.5% $ 46.2 86.8% 5.4%
Quarry sales 1.2 2.5% 0.9 1.7% (25.0)%
Transportation
management
services 3.9 8.0% 6.1 11.5% 56.4%
------ ----- ------ ----- -----
Total net
sales $ 48.8 100.0% $ 53.2 100.0% 9.1%
====== ====== ====== ====== =====
Warehousing sales increased 5.4% from $43.7 million for the
first three months of fiscal 1995 to $46.2 million for the
same period in fiscal 1996, primarily due to a 7.9% increase
in storage revenue and a 7.1% increase in handling revenue.
The increase in storage revenue resulted from an increase in
storage volume of 5.0%, assisted slightly by price increases
and other factors. The increase in storage volume is due
primarily to the increased storage of vegetables, which is
attributable to a strong vegetable harvest in the Midwest in
calendar 1994.
The increase in handling revenue resulted primarily from a
5.1% increase in volume of product handled. For the first
three months of fiscal 1995, 4.7 billion pounds of product
were handled by the Company compared with 4.9 billion pounds
during the same period in fiscal 1996. While handling volume
increased 5.1%, handling revenue increased 7.1% due to
increased processing and special services revenue (classified
by the Company as handling revenue), and changes in product
mix.
Nonwarehousing sales increased 37.3% from $5.1 million for the
first three months of fiscal 1995 to $7.0 million in the
comparable period in fiscal 1996, due to increased sales from
the Americold Transportation Systems ("ATS") unit, which
offset the decrease in quarry sales. The development of the
Company's transportation management services business is
proceeding and the Company believes that growth will continue
in its logistics business.
COST OF SALES - Cost of sales increased a net $1.6 million or
5.1% from $31.9 million for the first three months of fiscal
1995 to $33.6 million for the first three months of fiscal
1996. Increased volume at ATS, which requires corresponding
increases in transportation capacity purchased from carriers,
resulted in an approximate $2.1 million increase in cost of
goods sold, which was offset by a decrease of approximately
$0.4 million of depreciation. The Company was able to manage
the increase in handling volume at the Company's facilities
without any increased warehouse payroll expense.
Cost of sales as a percentage of net sales decreased from
65.5% in the first three months of fiscal 1995 to 63.1% in the
first three months of fiscal 1996, even as handling and ATS
sales, which have high variable cost requirements, increased
from 42.4% of net sales in the prior period to 45.3% in the
more recent period.
SELLING AND ADMINISTRATIVE EXPENSES - Selling and
administrative expenses for the first three months of fiscal
1995 were $6.7 million, as compared to $6.9 million for the
first three months of fiscal 1996, an increase of 3.8%. The
increase primarily reflects an increase of approximately $.2
million in salaries and related fringe benefits, partially
related to the increase in ATS activity.
INTEREST EXPENSE - Interest expense increased 3.6% from $13.7
million for the first three months of fiscal 1995 to $14.2
million for the first three months of fiscal 1996 as a result
of slightly higher overall borrowings. The increase in
borrowings resulted from funds obtained to finance a warehouse
expansion in fiscal 1995.
REORGANIZATION EXPENSES - Reorganization expenses reflects the
expenses related to the Chapter 11 proceedings incurred for
professional services including investment banking, accounting
and legal fees through the first quarter of fiscal 1996. The
Company anticipates significant additional expenses to be
incurred in the second quarter of fiscal 1996.
INCOME - The Company's loss before income taxes for the first
three months of fiscal 1995 was $4.1 million, compared to $5.4
million in the first three months of fiscal 1996. The
increased loss is primarily the result of approximately $3.5
million of reorganization expenses incurred during the period.
SUBSEQUENT EVENT - Subsequent to the end of the fiscal
quarter, on June 19, 1995, the Court approved the Company's
Plan, and on June 30, 1995, the Company emerged from the
Chapter 11 proceedings. See " - Liquidity and Capital
Resources."
LIQUIDITY AND CAPITAL RESOURCES
- -------------------------------
LIQUIDITY
---------
OPERATING CASH FLOW - The Company relies primarily upon cash
generated by operations to service debt and fund capital
expenditures. Net cash flow from operating activities as
reported in the Company's consolidated financial statements
improved from a negative $1.6 million for the first three
months of fiscal 1995 to $3.5 million for the first three
months of fiscal 1996. The increase is due primarily to a
decrease in trade receivables, resulting from changes in the
timing of certain cash collections, and from the postponement
due to the bankruptcy proceeding of the approximately $6.3
million of interest due on May 1, 1995 on the subordinated
debentures.
The Company's working capital position as of the last day of
the three-month period ended May 31, 1995 was a negative $15.2
million. This position compares to a negative $14.9 million
at fiscal 1995 year end. The decrease is due primarily to
timing of certain cash collections and payments.
SHORT-TERM CAPITAL RESOURCES - The Company did not pursue
debtor-in-possession financing while in Chapter 11. The
Company's cash position throughout the bankruptcy proceedings
was sufficient to finance operations during such period.
As part of the bankruptcy proceedings, subsequent to the end
of the fiscal quarter, on June 30, 1995, the Company amended
its credit agreement with the U. S. National Bank of Oregon
(the "Bank") (the "New Credit Agreement"). The New Credit
Agreement provides an aggregate availability of $27.5 million,
which may be used for any combination of letters of credit (up
to $10.0 million) and revolving cash borrowings, subject to
borrowing base limitations. The borrowing base for both cash
borrowings and letter of credit amounts will equal 85% of
eligible accounts receivable, plus 70% of the value of all
real property mortgaged to the Bank, up to a maximum of $27.5
million. The New Credit Agreement is secured by the Company's
trade receivables and, at the Company's option, mortgages on
certain of the Company's warehouse properties. The Company
has not mortgaged any properties to the Bank under the New
Credit Agreement. Borrowings under the New Credit Agreement
will mature on February 28, 1999. The New Credit Agreement
eliminates the 30-day resting period (during which there may
be no outstanding borrowings) for fiscal 1996 and requires
only one such period for fiscal 1997. Two such periods will
be required during fiscal 1998 and fiscal 1999. The New
Credit Agreement also contains amendments of certain financial
covenants contained in the existing credit agreement in light
of the restructuring.
DEBT SERVICE REQUIREMENTS - The Company believes that making
payments due on long-term debt in the first half of fiscal
1996 would have created a default at the next measurement date
(May 31, 1995) under the pro forma debt service covenant (as
defined) contained in the Amended and Restated Investment
Agreement, dated March 2, 1993 (the "Old Investment
Agreement"), between the Company and the MetLife, and a
default under the old credit agreement relating to an out-of-
debt requirement as of June 30, 1995. The Company therefore
proposed the Plan to alleviate the Company's anticipated
liquidity shortfall and to avoid defaulting under its various
debt agreements.
The Plan, as approved by the Court on June 19, 1995 and
executed on June 30, 1995, provided, among other things, that:
(i) each holder of the Company's 11% Senior
Subordinated Debentures due 1997 is entitled to receive a
corresponding amount of the new 15% Senior Subordinated
Debentures due 2007, and an amount in cash equal to the
accrued but unpaid interest on the old Senior Subordinated
Debentures through June 29, 1995. The new 15% Subordinated
Debentures were issued subject to an indenture which contained
financial and other covenants similar to those contained in
the existing indenture for the Company's first mortgage bonds.
(ii) the legal, equitable and contractual rights of
each holder of the Company's 11.45% First Mortgage Bonds,
Series A due 2002 (the "Series A Bonds") and 11 1/2% First
Mortgage Bonds, Series B due 2005 (the "Series B Bonds")
(collectively, the "First Mortgage Bonds"), under the Amended
and Restated Indenture, dated as of March 9, 1993, were left
unaltered; and
(iii) the Old Investment Agreement between the
Company and the MetLife was superseded by the Second Amended
and Restated Investment Agreement (the "New Investment
Agreement"), which contains certain financial and operating
covenants that in some cases are less restrictive than those
contained in the Old Investment Agreement, and pursuant to
which (x) the Company redeemed $10.0 million in principal
amount of the Company's Series A Bonds held by the MetLife,
and (y) the Company has the right, under certain
circumstances, to redeem prior to scheduled maturity
additional Series A Bonds without payment of any prepayment
premium. The Company also paid an agreement modification fee
of $2.25 million to the MetLife.
Also subsequent to the end of the fiscal quarter, the Company
has filed motions to reject certain lease agreements.
Properties subject to the leases accounted for approximately
$11.7 million of sales and a minimal amount of gross operating
margin in fiscal 1995. The outcome of the rejections cannot
be predicted at this time.
The Company believes the Plan has mitigated the Company's
near-term financial vulnerability by postponing the maturity
of its subordinated debt and increased the likelihood that the
Company will realize the benefits of capital expenditures from
its escrowed funds and its anticipated expansion of its
refrigerated transportation management business. The
Company's present level of cash flow available from operations
and escrowed funds is expected to be sufficient to cover all
interest payments and planned capital expenditures for fiscal
1996. The Company is currently constructing three new
warehouse properties, two of which are expected to be funded
with the remaining balance of escrowed funds. For the third
property, the Company is currently negotiating for funding
from an outside source. Upon completion of construction of
these properties, the Company will have expended all of the
escrowed funds, except for the $4.8 million which has been
deposited with the trustee out of the insurance proceeds from
the Kansas City fire. After the reorganization, however, the
Company will remain highly leveraged and will continue to be
subject to substantial principal and interest obligations with
respect to its indebtedness.
CAPITAL RESOURCES - Expenditures for property, plant and
equipment for the first three months of fiscal 1996 totaled
$16.9 million, of which approximately $15.5 million relates to
warehouse expansions currently underway. Budgeted fiscal 1996
capital expenditures total approximately $35.4 million,
including approximately $25.6 million for property
development. A portion, related primarily to material
handling equipment, is expected to be leased on an operating
or capital lease basis.
As of May 31, 1995, the Company was holding approximately $4.8
million in cash which had been tendered to the Trustee under
the indenture related to its first mortgage bonds to
substitute as cash collateral for the property lost at the
Kansas City, Kansas warehouse facility. The Company has not
reclassified any cash balance for the possible payment.
Although no formal agreement has been reached with the
Trustee, on June 30, 1995, the Company transferred the $4.8
million in cash to the Trustee. Such funds will be used for
acquisition or construction of new warehouse properties, to
expand or improve existing warehouse properties, or applied to
repurchase outstanding First Mortgage Bonds.
The Company, as part of its Kansas City, Kansas location,
operates a limestone quarry. Subject to the completion of
certain remaining due diligence items, the Company expects to
dispose of this business during the first half of fiscal 1996.
Net proceeds of the sale must, in accordance with the
Company's existing debt agreements, be reinvested in warehouse
properties or used to satisfy, in part, the mortgage
obligation on the property.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
On May 9, 1995, the Company filed the Plan under Chapter 11 of
the United States Bankruptcy Code in the Court (Case No. 395-
33058elp11). The principal purpose of the Plan was to reduce
the Company's short-term cash requirements with respect to
payments due on its subordinated indebtedness and to adjust
certain restrictive financial covenants and certain other
provisions contained in the Amended and Restated Investment
Agreement, dated March 2, 1993, between the Company and
Metropolitan Life Insurance Company. On the filing date, the
Plan had received approval from both of the classes of
debtholders entitled to vote on the Plan.
Subsequent to the end of the fiscal quarter, a hearing was
held on June 19, 1995 at which the Court approved the motion
of the Company requesting the Court (1) to approve the
Company's Disclosure Statement dated April 14, 1995 and the
Company's procedure for solicitation of votes to accept or
reject the Plan, and (2) to confirm the Plan. The Company
emerged from the Chapter 11 proceedings on June 30, 1995.
For additional information with respect to the Plan, see Part
I, Item 2. - "Management's Discussion and Analysis of
Financial Condition and Results of Operations -- Liquidity and
Capital Resources."
ITEM 2. CHANGES IN SECURITIES
Under the Plan, the holders of the Company's 11% Senior
Subordinated Debentures due 1997 will exchange those
debentures for the Company's new 15% Senior Subordinated
Debentures due 2007. For additional information on the 15%
Senior Subordinated Debentures, see Part I, Item 2. -
"Management's Discussion and Analysis of Financial Condition
and Results of Operations -- Liquidity and Capital Resources."
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
On June 26, 1995, subsequent to the end of the fiscal quarter,
the annual meeting of shareholders of the Company was held.
The Company did not solicit proxies. At the meeting, the
following actions were approved by the shareholders:
(a) Election of a Board of Directors for the ensuing
year consisting of Ronald H. Dykehouse, Frank
Edelstein, William A. Marquard, George E. Matelich,
James C. Pigott and Joel M. Smith.
(b) Approval of the selection of KPMG Peat Marwick as
the Company's auditors for fiscal 1996.
With respect to the election of directors, there were
2,651,500 votes cast for the election of each of the nominees
for director and no abstentions.
With respect to the approval of the selection of auditors,
there were 2,651,500 votes cast for approval and no
abstentions.
No votes were cast against the proposal related to the
ratification of the selection of auditors.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
(3) Articles of Incorporation and Bylaws
(i) Second Restated Articles of
Incorporation, as amended
(4) Instruments defining the rights of security
holders, including indentures
4.1 First Supplemental Indenture to
Amended and Restated Indenture,
dated as of March 9, 1993, with
respect to First Mortgage Bonds
4.2 Indenture dated June 30, 1995 with
respect to the 15% Senior
Subordinated Debentures, due 2007
4.3 Second Amended and Restated
Investment Agreement, dated May 5,
1995, between the Company and
Metropolitan Life Insurance Company
(10) Material Contracts
10.1 Second Amended and Restated Credit
Agreement, dated June 19, 1995,
between the Company and United
States National Bank of Oregon
(11) Statement re Computation of Per Share Earnings
(27) Financial Data Schedule
(b) Reports on Form 8-K
During the quarter, the following were filed:
1. A Current Report on Form 8-K, dated April 14,
1995, was filed on April 14, 1995 disclosing
the distribution of a confidential disclosure
statement to certain of the Company's
debtholders describing the Company's plan for
restructuring certain of its outstanding
indebtedness.
2. A Current Report on Form 8-K, dated May 9,
1995, was filed on May 10, 1995 announcing
that the Company's restructuring plan had
received approval from both classes of
debtholders entitled to vote on the plan and
that the Company had filed the plan as
approved as a prepackaged plan of
reorganization under Chapter 11 of the U. S.
Bankruptcy Code in the United States
Bankruptcy Court for the District of Oregon on
May 9, 1995.
3. A Current Report on Form 8-K, dated June 19,
1995, was filed on June 22, 1995 announcing
that the Company's restructuring plan had been
confirmed by the United States Bankruptcy
Court for the District of Oregon on June 19,
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.
AMERICOLD CORPORATION
/s/ Joel M. Smith
---------------------------
JOEL M. SMITH, Senior Vice President
and Chief Financial Officer
Date: July 14, 1995
AMERICOLD CORPORATION
FORM 10-Q
Exhibit Index
Exhibit Page
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(3) Articles of Incorporation and Bylaws
(i) Second Restated Articles of Incorporation,
as amended
(4) Instruments defining the rights of security
holders, including indentures
4.1 First Supplemental Indenture to Amended
and Restated Indenture
4.2 Indenture to the 15% Senior Subordinated
Debentures, due 2007
4.3 Second Amended and Restated Investment
Agreement
(10) Material Contracts
10.1 Second Amended and Restated Credit
Agreement
(11) Statement re Computation of Per Share
Earnings
(27) Financial Data Schedule