SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C.
20549
FORM 10-Q/A
AMENDMENT 1
QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarter ended September 2, 1995 amended as of April 23, 1996
Commission File No. 0-15696
PIEMONTE FOODS, INC.
(Exact name of registrant as specified in its charter)
South Carolina 57-0626121
(State of other jurisdiction of I.R.S. Employer
incorporation of organization) Identification
400 Auqusta Street, Greenville, South Carolina 29604
(Address of principal executive offices)
Registrant's telephone number, including area code: (803) 242-0424
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
The number of shares of common stock outstanding as of September 30, 1995 was
1,450,878.
PIEMONTE FOODS, INC.
INDEX TO FORM 10-Q/A
Part I. Financial Information (Amended)
Item 1. Financial Statements
Consolidated Balance Sheets - September 2, 1995 and June 3,
1995.
Consolidated Statements of Income for the first quarters ended
September 2, 1995 and August 27, 1994 and the three months then
ended.
Consolidated Statements of Cash Flows for the first quarters
ended September 2, 1995 and August 27, 1994 and the three months
then ended.
Notes to Consolidated Financial Statements
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Part II. Other Information
Item 6. Exhibits and Reports on Form 8-K
PIEMONTE FOODS, INC.
CONSOLIDATED BALANCE SHEETS
ASSETS September 2, 1995 June 3, 1995
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CURRENT ASSETS
Cash & cash equivalents 688,855 885,967
Accounts receivable, net 1,939,664 1,778,773
Inventories 1,785,796 1,909,104
Prepaid expenses 547,120 299,059
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TOTAL CURRENT ASSETS 4,961,435 4,872,903
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PROPERTY, PLANT & EQUIPMENT 5,383,443 5,373,892
DEFERRED CHARGES, INTANGIBLE AND OTHER ASSETS
Excess of cost over fair value of net assets acquired 795,072 803,310
Investment in joint venture 50,000 50,000
Loan to joint venture 308,532 0
Other assets 130,603 126,118
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Total 1,284,207 979,428
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TOTAL ASSETS 11,629,085 11,226,223
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LIABILITIES AND STOCKHOLDER'S EQUITY
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CURRENT LIABILITIES
Current portion of long-term debt 609,131 609,131
Short term borrowings 500,000 0
Accounts payable, trade 1,672,146 1,379,088
Accrued promotional allowances 106,640 78,069
Accrued compensation and payroll taxes 159,158 184,842
Accrued property taxes 90,601 76,762
Other accrued Expenses 61,716 99,458
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TOTAL CURRENT LIABILITIES 3,199,392 2,427,350
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LONG-TERM DEBT 1,204,941 1,357,224
DEFERRED INCOME TAXES 420,728 420,728
STOCKHOLDER'S EQUITY
Common stock 14,507 14,481
Capital in excess of stated value of common stock 2,756,571 2,744,938
Retained earnings 4,032,946 4,261,502
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TOTAL STOCKHOLDER'S EQUITY 6,804,024 7,020,921
------------------------------------------
TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY 11,629,085 11,226,223
==========================================
See accompanying notes to Financial Statements
PIEMONTE FOODS, INC.
CONSOLIDATED STATEMENTS OF INCOME
For the three months ended September 2, 1995 and August 27, 1994
Three Months
1996 1995
- ---------------------------------------------------------------------------------------
Net Sales 6,641,954 6,568,770
Operating Expenses
Cost of Goods Sold 5,476,049 5,057,763
Selling, general and administrative 1,504,251 1,506,961
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6,980,300 6,564,724
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Operating Income (338,346) 4,046
Other Expenses
Interest expense 39,210 33,279
Other expense (income) (1,550) (17,238)
Sale of assets 3,757 0
Interest income (11,125) (9,480)
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30,292 6,561
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Income Before Income Taxes (368,638) (2,515)
Provision for Income Taxes (140,082) (1,232)
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Net Income (Loss) (228,556) (1,283)
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Average Number of Shares Outstanding 1,525,160 1,546,470
Net Income Per Share (0.15) (0.00)
See accompanying notes to Financial Statements.
PIEMONTE FOODS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the three months ended September 2, 1995 and August 27, 1994
Three Months
1996 1995
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Cash Flows From Operating Activities
Net income (228,556) (1,283)
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation and amortization 193,568 170,981
Decrease (increase) in:
Receivables (160,891) 234,155
Inventories 123,308 (293,034)
Prepaid expenses (248,061) (264,688)
Other assets 3,753 23,527
Investment in joint venture 0 0
Increase (decrease) in:
Accounts payable 293,058 441,442
Accrued liabilities (21,016) (164,279)
- -------------------------------------------------------------------------------------------------------
Net cash provided by operating activities (44,837) 146,821
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Cash Flows from Investing Activities
Purchases of property, plant and equipment (203,119) (519,356)
Loan to joint venture (308,532) 0
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Net cash used in investing activities (511,651) (519,356)
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Cash Flows From Financing Activities
Proceeds from issuance of common stock 11,659 13,358
Advances (repayments) of credit line 500,000 0
Addition (Repayment) of long-term debt (152,283) (111,390)
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Net cash used in financing activities 359,376 (98,032)
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Net increase (decrease) in cash (197,112) (470,567)
Cash, beginning of period 885,967 1,030,983
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Cash, end of period 688,855 560,416
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See accompanying Notes to Financial Statements
PIEMONTE FOODS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
September 2, 1995
Note 1 Principles of Consolidation
The accompanying financial statements include the accounts of Piemonte Foods,
Inc. and its wholly-owned subsidiaries, Piemonte Foods of Indiana, Inc. and
Origena, Inc. The consolidated balance sheet as of September 2, 1995 and the
related statements of income and cash flows for the three month period then
ended are unaudited. In the opinion of management, all adjustments necessary for
a fair presentation of such financial statements have been included. Such
adjustments consisted only of normal recurring items.
The financial statements and notes are presented as permitted by Form 10-Q, and
do not contain certain information included in the company's annual financial
statements and notes.
Note 2 Reclassification
Sales related costs assigned to cost of goods sold have been reclassified
to selling, general and administrative. Quarterly impact is $204 thousand
in FY 96 and $95 thousand in FY 95.
Note 3 Restatement of Financial Statements
Restatements as detailed in the amended 10-K for June 3, 1995 impacted this
quarter as well as its previous year's quarter as follows:
Net income increase (decrease) ($K) 1996 1995
Expensing previously capitalized costs 20,831 61,338
Origena acquisition - purchase versus pooling (18,416) (18,416)
Net income tax of (918) (16,310)
Net income 1,497 26,612
Net income per share ($/share) 0. 00 0.02
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
LIQUIDITY AND CAPITAL RESOURCES
Working capital at the end of the First Quarter was $1.8 million. Receivables
and prepaid expenses are slightly higher partially offset by lower inventories.
Cash remains at an acceptable level.
During the quarter $203 thousand was spent on capital improvements and $308
thousand was advanced to the joint venture in Holland. Both were funded through
short-term debt with the intention of replacing the borrowings with longer-term
debt in the future. The company is in compliance with all restrictive covenants
imposed by its lender.
Concerning the joint venture bakery in Holland, all site work is done,
foundations poured and framework erected. The plant is expected to be in
operation in early 1996.
RESULTS OF OPERATIONS
Quarter Ended September 2 1995 Compared to
Quarter Ended August 27, 1994
Revenues for the First Quarter were $6.6 million, comparable to last year. Cost
of goods sold increased from 77.0% of sales last year to 82.4% this year. The
increase in costs is attributable to both commodity costs and product mix.
Commodity cost increased this year over last year amounted to $180,000 for the
quarter. Flour costs this summer have increased 29% and are anticipated to
remain high until June, 1996. In addition packaging costs, specifically
cardboard packaging, have increased 50 - 60% in the last two years. Due to
competitive pressure, these cost increases were absorbed. After months of
absorbing these costs, a general price increase was implemented in September,
1995 to offset most of the cost increases. It is also anticipated that cardboard
costs may begin to decline in early 1996.
The mix of products sold during the quarter also affected cost of goods. Last
year the company was packing a product for a national customer that carried high
gross margins. That product is no longer packed, the volume has been replaced,
but with products producing $275,000 less margin. This impact was first apparent
in the 4th quarter, FY 95; it's impact is repeated this quarter. The Company has
revised its sales strategies to compensate this loss which should be dampened
throughout the remainder of the business year.
In an ongoing effort to reduce costs, selling, general and administrative
expenses were lowered slightly, offsetting inflation with operational
efficiencies.
The overall effect of margin decreases, offset by some cost decreases, is a loss
for the quarter of $228,556 compared to a loss last year of $1,283.
Part II. Other Information
Item 6. Exhibits and Reports on Form 8-K
a) Exhibits
None
b) Reports on Form 8-K
No reports on Form 8-K were filed by the
Company during the quarter ended September 2, 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 hereunto duly authorized.
PIEMONTE FOODS, INC.
Date By
Virgil L. Clark
President and CEO
Roy E. Gogel
Vice President/CFO