1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) [X] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the period ended March 30, 1997 ---------------------------------------------------------- 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: 0-19912 ------------------------------------------------------ Signature Brands USA, Inc. - -------------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) Delaware 36-3635286 - -------------------------------------------------------------------------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 24700 Miles Road, Bedford Heights, Ohio 44146-1399 - -------------------------------------------------------------------------------- (Address of principal executive offices) (Zip Code) (216) 464-4000 - -------------------------------------------------------------------------------- (Registrant's telephone number, including area code) Health o meter Products, Inc. - -------------------------------------------------------------------------------- (Former Name) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section l3 or l5(d) of the Securities Exchange Act of l934 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 ----- ----- As of April 30, 1997, the issuer had 9,080,534 shares of common stock outstanding. 2 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) [X] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the period ended March 30, 1997 ---------------------------------------------------------- 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: 33-80000 ------------------------------------------------------ Signature Brands, Inc. - -------------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) Ohio 36-3330781 - -------------------------------------------------------------------------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 24700 Miles Road, Bedford Heights, Ohio 44146-1399 - -------------------------------------------------------------------------------- (Address of principal executive offices) (Zip Code) (216) 464-4000 - -------------------------------------------------------------------------------- (Registrant's telephone number, including area code) Health o meter, Inc. - -------------------------------------------------------------------------------- (Former Name) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section l3 or l5(d) of the Securities Exchange Act of l934 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 ----- ----- The Registrant is a wholly-owned subsidiary of Signature Brands USA, Inc. Accordingly, none of its equity securities are owned by non-affiliates. 3 PART 1. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS SIGNATURE BRANDS USA, INC. AND SUBSIDIARY CONSOLIDATED BALANCE SHEETS (AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA) March 30 September 29 1997 1996 ------------ ----------- (Unaudited) ASSETS Current assets Cash $ 2,017 736 Trade accounts receivable, net 46,814 57,960 Inventories 40,479 43,626 Deferred income taxes 5,206 5,206 Other current assets 795 1,479 -------- -------- Total current assets 95,311 109,007 Property, plant and equipment, net 16,308 18,522 Other assets Excess of cost over fair value of net assets acquired, net 137,862 139,830 Deferred financing costs, net 4,151 4,579 Other 1,620 1,552 -------- -------- Total other assets 143,633 145,961 -------- -------- Total assets $255,252 273,490 ======== ======== (Continued) 2 4 SIGNATURE BRANDS USA, INC. AND SUBSIDIARY CONSOLIDATED BALANCE SHEETS (AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA) March 30 September 29 1997 1996 ------------- ------------ (Unaudited) LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities Current portion of long-term debt $ 6,250 6,000 Accounts payable 16,306 22,851 Accrued liabilities 18,065 19,542 --------- --------- Total current liabilities 40,621 48,393 Long-term debt Revolving Credit Facility 34,600 41,600 Term Note 56,507 60,250 Senior Subordinated Notes 68,793 68,681 --------- --------- Total long-term debt 159,900 170,531 Product liability 3,432 3,516 Other 2,068 2,043 --------- --------- Total liabilities 206,021 224,483 Stockholders' equity Common stock, par value $.01 per share; authorized 20,000 shares; issued and outstanding 9,080 shares 91 91 Paid-in capital 51,772 51,772 Warrants 1,773 1,773 Accumulated deficit (4,405) (4,629) --------- --------- Total stockholders' equity 49,231 49,007 --------- --------- Total liabilities and stockholders' equity $ 255,252 273,490 ========= ========= See accompanying notes to consolidated financial statements. 3 5 SIGNATURE BRANDS USA, INC. AND SUBSIDIARY CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) (AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA) Thirteen weeks ended Twenty-six weeks ended -------------------------- ---------------------------- March 30 March 31 March 30 March 31 1997 1996 1997 1996 ---------- ---------- ----------- ---------- Net sales $ 61,925 56,275 149,061 153,682 Operating costs and expenses Cost of goods sold 42,312 38,538 103,389 105,401 Selling, general and administrative expenses 14,790 12,086 33,845 30,888 Amortization of intangible assets 984 1,000 1,968 2,000 -------- -------- -------- -------- Total operating costs and expenses 58,086 51,624 139,202 138,289 -------- -------- -------- -------- Operating income 3,839 4,651 9,859 15,393 Interest expense 4,575 4,717 9,557 9,814 Other income (59) (96) (248) (166) -------- -------- -------- -------- Income (loss) before income taxes (677) 30 550 5,745 Income tax (benefit) expense (410) 20 326 3,758 -------- -------- -------- -------- Net income (loss) $ (267) 10 224 1,987 ======== ======== ======== ======== Net income (loss) per share $ (0.03) - 0.02 0.22 ======== ======== ======== ======== Weighted average shares outstanding 9,080 9,071 9,080 9,071 See accompanying notes to consolidated financial statements. 4 6 SIGNATURE BRANDS USA, INC. AND SUBSIDIARY CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (AMOUNTS IN THOUSANDS) Twenty-six weeks ended ---------------------------- March 30 March 31 1997 1996 ------------ ---------- Cash flows from operating activities Net income $ 224 1,987 Adjustments to reconcile net income to net cash provided by operating activities Depreciation and amortization of plant and equipment 3,460 2,945 Loss on asset write-offs and disposals - 103 Amortization of intangible assets 1,968 2,000 Amortization of deferred financing costs 428 429 Accretion of debt discount 112 112 Changes in Accounts receivable 11,146 6,684 Inventories 3,147 5,538 Other assets 616 1,135 Accounts payable (6,545) (14,266) Accrued liabilities (1,477) 3,082 Noncurrent liabilities (59) (126) -------- -------- Net cash provided by operating activities 13,020 9,623 -------- -------- Cash flows from investing activities Capital expenditures (1,246) (1,449) -------- -------- Net cash used in investing activities (1,246) (1,449) -------- -------- Cash flows from financing activities Proceeds from revolving credit facility 36,100 44,500 Repayments of revolving credit facility (43,100) (49,900) Repayment of long-term debt (3,493) (2,500) -------- -------- Net cash used in financing activities (10,493) (7,900) -------- -------- Increase in cash 1,281 274 Cash at beginning of the period 736 835 -------- -------- Cash at end of the period $ 2,017 1,109 ======== ======== SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION Cash paid during the period for Interest $ 8,953 9,360 Income taxes 1,450 1,177 See accompanying notes to consolidated financial statements. 5 7 SIGNATURE BRANDS USA, INC. AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA) (UNAUDITED) (1) Basis of Presentation --------------------- The consolidated financial statements include the accounts of the Company and its wholly owned subsidiary. All significant intercompany accounts and transactions are eliminated in consolidation. In the opinion of management, the information furnished herein includes all adjustments of a normal recurring nature that are necessary for a fair presentation of results for the interim periods shown in accordance with generally accepted accounting principles. The unaudited interim consolidated financial statements have been prepared using the same accounting principles that were used in preparation of the Company's annual report on Form 10-K for the year ended September 29, 1996, and should be read in conjunction with the consolidated financial statements and notes thereto. Because of the seasonal nature of the small appliance and consumer scale industries, the results of operations for the interim period are not necessarily indicative of results for the full fiscal year. (2) Inventories ----------- The components of inventories are as follows: March 30 September 29 1997 1996 ---------- ------------- Inventories at FIFO cost Raw materials and purchased parts $13,629 13,446 Finished goods 26,261 29,591 ------- ------- 39,890 43,037 Excess of LIFO cost over FIFO 589 589 ------- ------- Inventories $40,479 43,626 ======= ======= Work-in-process inventories are not significant and are included with raw materials. Inventories accounted for under the last-in, first-out (LIFO) method represent 59 percent and 62 percent of inventories at March 30, 1997 and September 29, 1996, respectively. 6 8 SIGNATURE BRANDS USA, INC. AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA) (UNAUDITED) (3) Condensed Consolidated Financial Information -------------------------------------------- Condensed consolidated financial information for Signature Brands, Inc. at March 30, 1997 and September 29, 1996, and for the thirteen-week and twenty-six-week periods ended March 30, 1997 and March 31, 1996 is as follows March 30 September 29 1997 1996 ----------- ----------- Current assets $ 95,311 109,007 Noncurrent assets 159,941 164,483 --------- --------- Total assets $ 255,252 273,490 ========= ========= Current liabilities $ 40,621 48,393 Noncurrent liabilities 165,400 176,090 Intercompany payables 47,658 47,658 --------- --------- Total liabilities 253,679 272,141 Stockholder's equity Common stock - $.01 par value; 1,000 shares authorized and outstanding 10 10 Paid-in capital 2,811 2,811 Accumulated deficit (1,248) (1,472) --------- --------- Total stockholder's equity 1,573 1,349 --------- --------- Total liabilities and stockholder's equity $ 255,252 273,490 ========= ========= Thirteen-week period ended Twenty-six-week period ended ---------------------------- ---------------------------- March 30 March 31 March 30 March 31 1997 1996 1997 1996 ------------ ------------- ------------ ------------- Net sales $ 61,925 56,275 $149,061 153,682 Gross profit $ 19,613 17,737 $ 45,672 48,281 Net income (loss) $ (267) 10 $ 224 1,987 7 9 SIGNATURE BRANDS USA, INC. AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA) (UNAUDITED) (4) Subsequent Event ---------------- On March 6, 1997, the stockholders of the Company approved an amendment to the Company's Certificate of Incorporation to change the name of the Company to "Signature Brands USA, Inc." In view of the Company's name change, on April 30, 1997, Health o meter, Inc. the Company's operating subsidiary, was merged with and into a wholly-owned subsidiary of the Company, Signature Brands, Inc., an Ohio corporation, formed by the Company solely for the purpose of changing the name of Health o meter, Inc. to "Signature Brands, Inc." 8 10 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS COMPANY OVERVIEW - ---------------- Signature Brands USA, Inc. (the "Company") is a holding company which, through its wholly owned subsidiary, Signature Brands, Inc. ("Signature Brands"), designs, manufactures, markets, and distributes a comprehensive line of consumer and professional products. The Company's consumer products, marketed under the Mr. Coffee(R) and Health o meter(R) brand names include automatic drip coffeemakers, teamakers, filters, water filtration products, accessories, and other kitchen counter top appliances as well as bath, kitchen, and diet scales and therapeutic devices. Professional products include the Pelouze(R) and Health o meter(R) brands of office, food service and medical scales. RESULTS OF OPERATIONS - --------------------- THIRTEEN-WEEKS ENDED MARCH 30, 1997 AND MARCH 31, 1996 Overview. Net sales in the second quarter of fiscal 1997 increased approximately 10.0 percent to $61.9 million, compared with $56.3 million for the same period in fiscal 1996. The Company's gross profit in the second quarter of fiscal 1997 was $19.6 million, or approximately 31.7 percent of net sales, compared with $17.7 million, or approximately 31.5 percent of net sales in the same period in fiscal 1996. Net Sales and Gross Profit Consumer Products Division. In the second quarter of 1997, the Consumer Products Division's net sales were $51.9 million compared with $47.6 million in 1996, an increase of 9.0 percent. The increase in net sales was primarily attributable to increased sales of coffeemakers, consumer scales and water filtration products somewhat offset by reduced sales of teamakers and espresso/cappuccino makers. The Consumer Products Division's gross profit in the second quarter of 1997 increased 8.7 percent to $15.5 million from $14.3 million in 1996. The gross profit margin was 29.9 percent of net sales in 1997, compared with 30.0 percent in 1996. The Consumer Products Division experienced improved margins for filters, therapeutic devices and water filtration products while margins declined for teamakers and certain other kitchen countertop appliances. Historically, gross margins on individual product lines have been greatest near the point of introduction, gradually decreasing as the product matures and becomes subject to pricing pressure. There continues to be intense pressure on retail prices and there can be no assurance as to the Company's ability to achieve price increases or maintain current price levels in the future. For these reasons, the Company continues its efforts to introduce new products and to reduce the cost of existing products as a means of protecting margins. 9 11 Professional Products Division. In the second quarter of 1997, the Professional Products Division's net sales increased 15.5 percent to $10.0 million compared with $8.7 million in 1996. The Company experienced increased sales in the second quarter of 1997 in its commercial, office and medical distribution channels when compared with the same period in 1996. The Professional Products Division's gross profit was $3.7 million, or 36.4 percent of net sales, in the second quarter of 1997, compared with $3.5 million, or 39.9 percent of net sales, in 1996. The margin reduction resulted from lower margins in the office and international distribution channels somewhat offset by improved margins in the medical channel. Selling, General and Administrative Expenses. Selling, general and administrative expenses ("SG&A") for the second quarter of fiscal 1997 totalled $14.8 million, or approximately 23.9 percent of net sales, compared with $12.1 million, or approximately 21.4 percent of net sales, for the first quarter of fiscal 1996. The increase in SG&A as a percentage of net sales is mainly attributable to a $1.2 million increase in national advertising expenditures primarily to support the marketing of teamakers and water filtration products. Amortization of Intangible Assets. The amortization of intangible assets relates primarily to intangible assets associated with the acquisition by the Company of Mr. Coffee, inc. on August 17, 1994 ("the Acquisition"). Interest Expense. Net interest expense for the second quarter of fiscal 1997 was approximately $4.6 million, compared with $4.7 million for the same period in the prior year. Income Taxes. The effective tax rate was a benefit of 60.6 percent for the second quarter of fiscal 1997, compared with an effective tax rate of 69.0 percent in 1996. Expenses not deductible for tax purposes, primarily the amortization of intangible assets associated with the Acquisition, resulted in an effective tax rate significantly higher than the statutory tax rate in both periods. Net Income. Based on the foregoing, the Company experienced a net loss of $0.3 million in the second quarter of fiscal 1997 compared with minimal net income in fiscal 1996. TWENTY-SIX WEEKS ENDED MARCH 30, 1997 AND MARCH 31, 1996 Overview. Net sales in the first six months of fiscal 1997 decreased approximately 3.0 percent to $149.1 million, compared with $153.7 million for the same period in fiscal 1996. The Company's gross profit in the first six months of fiscal 1997 was $45.7 million, or approximately 30.6 percent of net sales, compared with $48.3 million, or approximately 31.4 percent of net sales in the same period in fiscal 1996. Net Sales and Gross Profit Consumer Products Division. In the first six months of 1997, the Consumer Products Division's net sales were $129.0 million compared with $135.9 million in 1996, a decrease of 5.0 percent. The decrease in net sales was primarily attributable to reduced sales of teamakers and espresso/cappuccino makers somewhat offset by increased sales of coffeemakers, 10 12 water filtration products and therapeutic devices. The Consumer Products Division's gross profit in the first six months of 1997 declined 7.7 percent to $38.5 million from $41.7 million in 1996. The gross profit margin was 29.8 percent of net sales in 1997, compared with 30.7 percent in 1996. Reduced margins for teamakers and accessories, somewhat offset by improved margins for water filtration products, espresso/cappuccino makers and therapeutic devices caused the decline in gross margin as a percent of net sales. Professional Products Division. In the first six months of 1997, the Professional Products Division's net sales increased 12.4 percent to $20.0 million compared with $17.8 million in 1996. The Company experienced increased sales in the first six months of 1997 in its commercial, international, office and medical distribution channels compared with the same period in 1996. The Professional Products Division's gross profit was $6.8 million, or 33.8 percent of net sales, in the first six months of 1997, compared with $6.6 million, or 37.2 percent of net sales, in 1996. The decline in gross margin as a percent of sales was primarily attributable to office products. Selling, General and Administrative Expenses. Selling, general and administrative expenses ("SG&A") for the first six months of fiscal 1997 totalled $33.8 million, or approximately 22.7 percent of net sales, compared with $30.9 million, or approximately 20.1 percent of net sales, for the first six months of fiscal 1996. The increase in SG&A as a percentage of net sales is mainly attributable to a $3.0 million increase in national advertising expenditures relating primarily to teamaker and water filtration products. Amortization of Intangible Assets. The amortization of intangible assets relates primarily to intangible assets associated with the Acquisition. Interest Expense. During the first six months of fiscal 1997 net interest expense was approximately $9.6 million, compared with $9.8 million in the same period of fiscal 1996. Income Taxes. In the first six months of fiscal 1997 and 1996 the effective tax rate was 59.3 percent and 65.4 percent, respectively. Expenses not deductible for tax purposes, primarily the amortization of intangible assets associated with the Acquisition, resulted in an effective tax rate significantly higher than the statutory tax rate in both periods. Net Income. Based on the foregoing, the Company experienced net income of approximately $0.2 million and $2.0 million in the first six months of fiscal 1997 and 1996, respectively. LIQUIDITY AND CAPITAL RESOURCES - ------------------------------- The Company's primary sources of liquidity are internally generated cash and borrowings under a Credit Agreement among Signature Brands and a group of Banks represented by Banque Nationale de Paris, New York Branch ("BNP") as agent and as issuer of letters of credit, ("the Bank Credit Agreement") entered into in connection with the Acquisition. 11 13 Cash flow activity for the first six months of fiscal 1997 and 1996 is presented in the Consolidated Statements of Cash Flows. During the first six months of fiscal 1997, the Company generated approximately $13.0 million in cash flow from operating activities. Net income plus non-cash charges generated approximately $6.2 million, while changes in working capital components generated approximately $6.8 million. The decrease in accounts receivable, which generated approximately $11.1 million, is attributable to the seasonally lower sales activity compared with the fourth quarter of the prior fiscal year and the first quarter of this fiscal year. The decrease in inventories generated $3.1 million. The decrease in accounts receivable and inventories were partially offset by reductions in accounts payable and accrued liabilities of $6.5 million and $1.5 million, respectively. The decrease in these liabilities is due to seasonal factors. The Company's business is seasonal, with a large portion of its sales and earnings generated in the fourth calendar quarter of the year. During fiscal 1996, the Company generated approximately 34 percent of its annual net sales in this quarter. The Company's aggregate capital expenditures during the first six months of fiscal 1997 were approximately $1.2 million. The Company anticipates making $6.8 million of capital expenditures for the remainder of fiscal 1997. These capital expenditures relate primarily to new product tooling, information systems and production equipment. Management plans to fund these capital expenditures with available cash, cash flow from operations and, if necessary, borrowings under the revolving credit facility provided under the Bank Credit Agreement. Indebtedness incurred in connection with the Acquisition has significantly increased the Company's cash requirements and imposes various restrictions on its operations. The Acquisition and related transactions were financed with approximately $98 million in borrowings under the Bank Credit Agreement, approximately $70 million in proceeds from a unit offering of 13% senior subordinated notes due 2002, (the "Notes") and warrants to purchase shares of Common Stock at a price of $6.25 per share, and approximately $17.2 million in net proceeds received from the exercise of certain transferable rights to purchase 3,543,433 shares of Common Stock issued to the stockholders of the Company. The Notes are generally not redeemable at the option of the Company until August 15, 1999. Subject to certain conditions, at any time through August 17, 1997, up to 35 percent of the initial principal amount of the Notes originally issued may be redeemed with the net proceeds of one or more public offerings of equity securities of the Company or Signature Brands at a redemption price of 110% of the principal amount thereof, together with accrued and unpaid interest. For more detailed information, see the Company's Annual Report on Form 10-K for the year ended September 29, 1996. The Bank Credit Agreement includes a $75.0 million term loan facility, which is subject to amortization on a quarterly basis in aggregate annual amounts of $6.0 million, $8.75 million, $17.5 million, $15.0 million and $19.0 million during fiscal 1997 through fiscal 2001, respectively, and a $60.0 million revolving credit facility. Signature Brands is required to make prepayments on the term loan and revolving credit facility with a percentage of Excess Cash Flow (as defined) and 100% of the proceeds from certain asset sales, issuances of debt and equity securities and extraordinary items outside the ordinary course of business. The required 12 14 term loan repayment of $1.0 million for fiscal 1997 was paid in the second quarter. Signature Brands may also make optional prepayments, in full or in part, on the term loan. The Bank Credit Agreement and the indenture governing the Notes contain various customary covenants which the Company was in compliance with at March 30, 1997. Borrowing availability under the revolving credit facility at March 30, 1997 was $9.9 million after considering outstanding letters of credit of $0.6 million, actual borrowings of $34.6 million, and sufficiency of collateral. Signature Brands' obligations under the Bank Credit Agreement are secured by substantially all of Signature Brands' assets and a pledge of all of its issued and outstanding common stock. Signature Brands' obligations under the Bank Credit Agreement and the Notes are guaranteed by the Company. Based upon current levels of operations, anticipated sales growth and plans for expansion, management believes that the Company's cash flow from operations (including favorable cost savings estimated to be achieved in the future), combined with borrowings available under the Bank Credit Agreement, will be sufficient to enable the Company to meet all of its cash operating requirements over both the short term and the longer term, including scheduled interest and principal payments, capital expenditures and working capital needs. This expectation is predicated upon continued growth in revenues in the Company's core businesses consistent with historical experience, achievement of operating cash flow margins consistent with historical experience, and the absence of significant increases in interest rates. INFLATION Increases in interest rates, the costs of materials and labor, and Federal, state and local tax rates can significantly affect the Company's operations. Management believes that the current practices of maintaining adequate operating margins through a combination of new product introductions, product differentiation, cost reduction, outsourcing, manufacturing and overhead expense control and careful management of working capital are its most effective tools for coping with inflation. NEW ACCOUNTING PRONOUNCEMENTS During 1995, the Financial Accounting Standards Board issued two pronouncements which are effective for financial statements for years beginning after December 15, 1995. The Company has considered the requirements of Statement No. 121, Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of and has determined that it will not require recognition of any impairment losses. The Company has also determined to remain within the accounting prescribed by APB Opinion No. 25, Accounting for Stock Issued to Employees, and accordingly the implementation of Statement No. 123, Accounting for Stock-Based Compensation will result in additional disclosures without any impact on the statements of operations or financial condition. During 1997, the Financial Accounting Standards Board issued two pronouncements which are effective for financial statements for years beginning after December 15, 1997. Statement No. 128, Earnings per Share changes the way that earnings per share 13 15 information is computed and presented and, will be adopted, as required, in the Company's fiscal year beginning in October 1998. This new standard will not materially impact the Company's financial statement disclosures. Statement No. 129, Disclosure of Information about Capital Structure will not materially impact the Company's financial statement disclosures. 14 16 PART II. OTHER INFORMATION ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS - -------------------------------------------------------------- The Annual Meeting of Stockholders of the Company was held on March 6, 1997. The following matters were voted on at the meeting. 1. Election of S. Donald McCullough, Thomas R. Shepherd and Frank E. Vaughn as Directors of the Company. The nominees were elected as Directors with the following votes: S. Donald McCullough -------------------- For 7,895,653 Withheld 246,414 Broker non-votes -0- Thomas R. Shepherd ------------------ For 7,895,653 Withheld 246,414 Broker non-votes -0- Frank E. Vaughn --------------- For 7,895,653 Withheld 246,414 Broker non-votes -0- 2. Approval and adoption of an Amendment to the Company's Amended and Restated Certificate of Incorporation to change the Company's name to "Signature Brands USA, Inc." For 7,561,552 Against 350,015 Abstain 230,500 Broker non-votes -0- 3. Approval and adoption of the Health o meter Products, Inc. 1997 Stock Option and Incentive Plan: For 7,574,174 Against 236,551 Abstain 271,676 Broker non-votes 59,666 15 17 4. Ratification of the Board of Directors' Appointment of KPMG Peat Marwick LLP to serve as Auditors of the Company: For 7,886,396 Against 22,753 Abstain 232,918 Broker non-votes -0- For information on how the votes for the above matters have been tabulated, see the Company's definitive Proxy Statement used in connection with the Annual Meeting of Stockholders on March 6, 1997. ITEM 6. - EXHIBITS AND REPORTS ON FORM 8-K - -------------------------------------------- (a) See the Exhibit Index at page 18 of this Form 10-Q. (b) No reports on Form 8-K were filed during the quarter for which this report is filed. 16 18 SIGNATURE 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. SIGNATURE BRANDS USA, INC. SIGNATURE BRANDS, INC. Date: May 14, 1997 /s/ Steven M. Billick ---------------------- Steven M. Billick Senior Vice President, Treasurer and Chief Financial Officer 17 19 Exhibit Index ------------- Exhibit Number Description of Document - -------------- ----------------------- 3.1 Amended and Restated Certificate of Incorporation of Signature Brands USA, Inc., as amended. 10.21 Health o meter Products, Inc. 1997 Stock Option and Incentive Plan* 27 Financial Data Schedule * Management contract or compensatory plan or arrangement. 18