SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C.
20549
FORM 10-K/A
AMENDMENT 1
ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended June 3, 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 Augusta Street, Greenville, South Carolina 29604
(Address of principal executive offices)
Registrant's telephone number, including area code: (803) 242-0424
Securities registered pursuant to Section 12(b) of the Act:
NONE
Securities registered pursuant to Section 12(g) of the Act:
COMMON STOCK
(Title of Class)
Indicate by check mark whether the registrant (l) 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
Aggregate market value of the voting stock (which consist solely of
shares of Common Stock) held by non-affiliates of the registrant as of June
3, 1995, computed by reference to the closing price of the registrant's Common
Stock: $6,517,175.
The number of share of common stock outstanding as of July 31, 1995 was
1,448,261.
PART I
Item 1. BUSINESS
INTRODUCTION
Piemonte Foods, Inc. develops, produces and markets pizza-related foods,
primarily prebaked pizza crusts and specialty meat toppings. The Company's
products are targeted to three specific segments in the wholesale food market:
Pre-made and frozen pizza industry, Institutional distributors and Supermarket
delicatessens. In addition, Piemonte's products are currently sold through
specialty fund raising programs for public and private schools in nineteen
states. The Company's products are sold through its own sales force and a
network of regional food brokers and sales agents.
Piemonte Foods, Inc. is a South Carolina corporation with its principal
offices located at 400 Augusta Street, Greenville, South Carolina. As used
herein the terms "Company" and "Piemonte" include Piemonte Foods, Inc. and its
wholly owned subsidiaries, Piemonte Foods of Indiana, Inc. and Origena, Inc.
The Company's business is not dependent on any single customer, but two
customers each accounted for more than 10% of the Company's consolidated
revenues for the last fiscal year. Kroger Company divisions accounted for 17%
and Winn-Dixie Stores divisions accounted for 14% of revenues.
BUSINESS OPERATIONS
WHOLESALE FOOD SALES
Pre-made and Frozen Pizza Industry
The Company produces pre-baked pizza crusts and specialty meat toppings
for the pre-made and frozen pizza industry. The Company's production
processes enable the prompt fulfillment of orders to customers' own pizza
specifications such as thick, medium or thin crusts and large, medium, small
or crumbled meat toppings. Piemonte has historically been a leader in the pre-
baked pizza crust industry serving this market. Sales to the pre-made and
frozen pizza industry accounted for approximately 34%, 32%, and 32% of the
Company's revenues during 1993, 1994 and 1995.
Institutional Distributors
The Company sells pizza ingredients and related products to the hotel,
restaurant and institutional market and convenience food stores through
regional institutional and specialty food distributors in approximately thirty
states as private label and proprietary products. Independent distributors
hold their own inventories and are solely responsible for the distribution and
resale of Piemonte's products.
Sales of pizza ingredients include the Company's pre-baked pizza crust,
specialty meat toppings, pizza cheeses, pizza sauces, mushrooms and related
items packaged under "Piemonte" brand names.
Sales through institutional distributors accounted for 30%, 29%, and 27%
of the Company's revenues during 1993, 1994 and 1995.
Supermarket Delicatessens
Competitive pressures from fast food chains advanced the rapid emergence
of supermarket delicatessens. Creation of the supermarket delicatessen
particularly appeals to people who want fresh and healthful food.
Piemonte has capitalized on this national consumer trend and markets its
"Piemonte" brand name products in this section of the supermarket.
Refrigerated pizza sales represent one of the fastest growing segments in the
pizza industry. Piemonte's pizzas are prepared from the Company's products
by supermarket personnel and displayed in refrigerated display cases in the
deli area.
These pizzas offer consumers a variety of choices from toppings to crust
thickness which offer significant savings over pizza restaurant chains and
small private pizza parlors. Buying them at the deli insures a great tasting
pizza with fresh ingredients, "hot" out of the oven, one thing that delivery
services often cannot guarantee.
Supermarket sales have accounted for 27%, 30%, and 31% of the Company's
revenues during 1993, 1994 and 1995.
Distribution Network
The Company distributes products to its wholesale customers from its
Greenville, Simpsonville and Frankfort facilities. Shipments are made to pre-
made and frozen pizza manufacturers, warehouses of independent institutional
distributors, who then service individual accounts, and supermarket chain
divisional warehouses. Deliveries are made in refrigerated delivery trucks,
which the Company either owns or leases, to customers in approximately twenty
Eastern states.
FUNDRAISING PROGRAM
Piemonte Foods supplies pizza products to schools and other organizations
in nineteen states for fundraising purposes. Piemonte provides pre-packaged
pizza kits which can be sold at a profit by schools or sponsored
organizations. The kits offer a wide variety of pizza toppings, crusts,
sauces and real cheeses. The ingredients are made into pizzas at home and
baked fresh or stored in packaging provided in the kit and placed in the
freezer for later consumption.
As a result of reductions in local funding for school programs in recent
years, these programs have received increased attention. Contacts with the
schools are made by both salaried and independent commissioned agents. These
agents provide support for organization of the fundraising program, distribute
appropriate materials for order taking and organize the distribution of
products to customers using refrigerated delivery trucks. Higher consumer
awareness of pizza as a food choice combined with expected increases in at-
home consumption of pizza will contribute to further growth of this market
segment.
Sales of the Company's products to various fund raising programs
accounted for approximately 9%, 9%, and 10% of the Company's revenues in 1993,
1994 and 1995
SOURCES AND AVAILABILITY OF RAW MATERIALS
Flour, oils, meat, tomatoes, cheese, packaging materials and other
related products are essential to the business of the Company. The Company
has not experienced any shortages of these items essential to its operations.
The Company currently has several sources of supply. Flour, meat, cheese and
other products used in production or for resale are subject to price
fluctuations related to the commodities market. Weather in recent months has
caused crop problems in the grain-producing states. Flour supplies have not
been interrupted.
The Company has not experienced any adverse effect on its operations as
a result of energy and fuel shortages. However, severe shortages of either
in the future could have an adverse effect on the Company's business.
PATENTS, TRADEMARKS
The Company currently has registered the "Piemonte" trademark. The
Company has developed significant consumer loyalty to its "Piemonte" brand
name and considers the ability to continue to use such name of considerable
importance to the Company.
SEASONAL AND CYCLICAL NATURE OF BUSINESS; BACKLOG
As a result of a number of factors, the pizza business, and therefore,
the business of the Company, experiences a period of lower activity in the
summer months. The Company's operations are geared to the expectation of this
annual seasonal decline.
Because the Company deals almost entirely in products which are sold
fresh to the consumer, it does not develop order backlogs of any significant
duration.
COMPETITIVE CONDITIONS
All segments of the pizza business are extremely competitive. Primary
competition in the wholesale pre-baked pizza crust business includes Virga,
TNT and a number of small regional processors. Competition for supermarket
deli sales includes Crestar Foods, Gilardi's and a number of regional pizza
processors. In the specialty meat topping market, competition includes
Doskocil Sausage Co., Capitol Wholesale Meats, H & M Meats, Arco Meats and
many other national and regional packers. The Company believes that it has
been, and will continue to be, competitive in product quality, merchandising,
marketing, service and price. However, the Company does not maintain any
sales contracts with customers that insure future purchases.
REGULATIONS
The Company is subject to various Federal, State and local laws affecting
its business, including various health, environmental, sanitation, and safety
regulations. One of the Company's facilities operates under the United States
Department of Agriculture (USDA) supervision. The Company believes its
operations comply in all material respects with applicable laws and
regulations.
EMPLOYEES
The Company has 326 full and part time employees. Of these, eleven are
in administrative and clerical positions, thirty six are in sales and sales
administration and the remainder are in manufacturing, warehousing and
delivery.
Item 2. Properties
The following table sets forth information concerning the Company's
facilities:
Date Exp. of Approx.
Leased or Lease Square
Location Acquired Description Term Footage
Greenville, 1974 Corporate Headquarters, 1998 67,000
S. C. Bakery, Distribution
and Maintenance
Simpsonville, 1983 Warehousing and 1998 40,000
S. C. Regional Distribution
Chicago, IL 1990 Office and Bakery 1999 30,000
Frankfort, IN 1988 Office, USDA Meat Owned 55,000
Production and
Regional Distribution
Nashville, TN 1994 Decorated Cake 1995 3,000
Production
The Company's manufacturing facilities were designed specifically for the
operations they support. The facilities are adequate for current production
and distribution needs.
Item 3. LEGAL PROCEEDINGS
None
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None
EXECUTIVE OFFICERS OF THE REGISTRANT
Following is a list of names and ages of all the executive officers of
the registrant, indicating all positions and offices with the Company held by
each such person and each such person's principal occupation or employment
during the past five years.
Name Title Age
Ronald T. Huth Chairman & Director 62
Virgil L. Clark President, CEO & Director 56
John A. Lindsay Senior Vice-President, 48
Treasurer & Director
T. Patrick Costello Senior Vice-President & 52
Director
David B. Ward Secretary 54
Ronald T. Huth has served as a Director since 1984. He was elected
Chairman of the Board in February, 1993. Mr. Huth is a practicing CPA and
Senior Partner of Ronald T. Huth & Co. in Lafayette, Indiana.
Virgil L. Clark has served as Director since 1986. He was elected Chief
Executive Officer in October, 1992. Mr. Clark is also Chairman of M & S
Chemicals, Inc. in Greenville, South Carolina.
John A. Lindsay was elected Senior Vice-President in January, 1995.
Previously he had served as Vice President of Finance and Treasurer of the
company since he was employed in September, 1985.
T. Patrick Costello was the President and sole shareholder of Origena,
Inc. since its founding in 1990. Origena was acquired by Piemonte in October,
1993. Mr. Costello previously was employed with Sara Lee Bakery, most
recently as Senior Vice-President and General Manager of two divisions.
David B. Ward was elected Secretary in September, 1985. Mr. Ward is a
practicing attorney with Horton, Drawdy, Ward & Johnson, P. A. in Greenville,
South Carolina.
PART II
Item 5. MARKET PRICE AND DIVIDENDS ON THE REGISTRANT'S COMMON EQUITY
AND RELATED STOCKHOLDER MATTERS
PRICE RANGE OF COMMON STOCK
The Company's common stock trades on the Nasdaq Small-Cap under the
symbol PIFI. The shares have been traded since 1969. The prices shown below
represent high and low bid prices exclusive of commissions and may not
represent actual transactions.
1994 High Low
1st 7 1/2 5
2nd 9 1/2 6 3/4
3rd 9 7 1/4
4th 8 1/2 7 1/4
1995
1st 9 1/4 7 3/4
2nd 9 1/4 6 1/2
3rd 7 3/4 6 1/4
4th 6 1/2 4 1/2
The principal market makers of the Company's shares are McDonald &
Company in Cleveland, Ohio, Natwest Securities in Indianapolis, Indiana and
Carr Securities in New York, New York.
APPROXIMATE NUMBER OF EQUITY SECURITIES HOLDERS
Approximate Number of Record Holders
as of July 31, 1995
Common Stock, No Par Value 400
DIVIDEND HISTORY
The following table sets forth information concerning cash dividends per
share paid during fiscal years 1993, 1994 and 1995.
1993 None
1994 5% stock dividend (August 1993)
1995 5% stock dividend (August 1994)
There were 1,448,261 shares of common stock outstanding as of July 31,
1995.
Item 6. SELECTED FINANCIAL DATA (Note 1)
1995 1994 1993 1992 1991
Net Sales 30,483,161 29,874,548 24,072,414 23,504,519 22,964,472
Income from continuing
operations 105,719 499,422 684,513 627,570 442,923
Income from continuing
operations per common
share 0.07 0.32 0.54 0.52 0.37
Total Assets 11,226,223 10,817,273 9,326,636 9,034,942 8,518,298
Long Term Liabilities 1,357,224 889,510 1,335,070 1,780,630 2,226,190
Dividends per Share (1) (2)
(1) 5% Stock Dividend (August 1994)
(2) 5% Stock Dividend (August 1993)
Note 1: Comparative data is affected by factors relating to purchase of
Origena and expensing previously capitalized costs as detailed
in Note 2 in Notes to Consolidated Financial Statements.
Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
LIQUIDITY AND CAPITAL RESOURCES
Liquidity is evaluated by an examination of working capital and the
recognition of other short-term resources available to the Company. At June
3, 1995 working capital was $2,445,553 which is approximately equivalent to last
year. Available cash of $885,967 remains at an acceptable level. Receivables
have decreased 18% reflecting both improved collection efforts and a slight
weakness in third and fourth quarter sales. Inventories have increased
significantly due in part to increased costs in overall packaging supplies and
commodity costs, but also due to the cost of branded packaging to support
"Focaccia" and other branded items. Working capital remains at an acceptable
level, both to management and our lender under the terms of our long-term debt
agreement which requires the maintenance of at least $1,000,000 in
working capital. In addition the Company has available lines of credit of
$2,500,000 which are unused at present.
Current year capital expenditures of $1,169,772 include the completion
of the cooling system in the Illinois plant, the start of a major plant
refurbishment at the Indiana plant and normal equipment replacement in all
three locations. For the coming year capital expenditures are budgeted at
$1,200,000 including finishing the refurbishment of the Indiana plant.
An additional commitment was made this year to develop a baking facility
in Europe on a joint venture basis. The joint venture partner is a successful
frozen pizza maker in Holland who is also a current customer of the Company.
The bakery will be automated similar to our Illinois facility and our partner
has committed to using half of the initial output from the plant. Site
preparation is complete and construction of the plant has begun. The plant
is expected to be in operation in early 1996. Total project costs are
estimated at $5,000,000. Both parties will contribute initial capital and
loans of $1,000,000 and the balance of the project will be funded with debt.
RESULTS OF OPERATIONS
1995 compared to 1994
Revenues for 1995 were $30.5 million, a 2.0% increase from $29.9 million of
1994. 1995 includes a full year for Origena which was acquired in October,
1993, versus eight months in 1994. On a full year basis had Origena been
acquired at the beginning of FY94, FY95 revenues at $30.5 million declined 1.8%
from $31.0 million. Piemonte "Focaccia" continued to grow in importance,
indicating that the market for a shelf-stable Italian flat bread exists.
Revenues in our institutional distributor were less than expected, the
supermarket deli and pre-made/frozen pizza manufacturer markets showed slight
growth and the fundraising segment grew 10 percent.
Gross margin declined to 24.6 percent in 1995 from 28.1 percent last
year. Margins were affected by significant increases in both corrugated
and plastic film supplies and by higher costs and lower sales in the Company's
Indiana facility. While packaging supply costs affected all manufacturers,
competition in our markets made passing on those costs difficult. Recently
costs have climbed for grain products used in our two bakeries, but these
costs will be passed on to our customers.
As indicated last year, spending was increased in our sales and marketing
areas. Additional penetration was achieved with "Focaccia" as over 2,000
supermarkets now carry the product. In addition our upscale pizza program
for supermarket delis has gained acceptance as retailers' focus on pizza
competition has shifted from the frozen goods case to the pizzeria in the
same shopping center. Our marketing focus produced a third product line
that is proving to have potential. In early 1994 we began decorating
birthday-type cakes for a specific customer as a test to determine if overall
cost savings for the retailer could be obtained by offsite preparation.
This test has proved successful for our original customer and our ability
to achieve cost savings for delis is now being marketed to other supermarket
chains. With more than 800 product offerings, the supermarket deli manager
has a very broad focus. If we can profitably prepare some of these products
offsite, we believe we can help that manager focus more on the remaining
products and improve the department's efficiency and profits.
Net income declined to $105,719 for 1995 as compared to $557,328 last
year. The commitment to upgrade the Indiana plant should reduce its operating
costs and allow positive contributions from that facility. Solid gains in
cake decorating, "Focaccia" and pizza crust sales which were achieved
throughout 1995 will continue to be pursued through focused market strategies
in fiscal 1996.
1994 compared to 1993
For 1994 Piemonte Foods' sales were $29.9 million and earnings of $557,328.
On October 2, 1993 we acquired Origena, Inc., a pizza crust bakery in
Chicago, from its sole owner T. Patrick Costello. The addition significantly
increases our baking capacity and expands our market access. Mr. Costello has
joined the Piemonte management team, thereby expanding our operational
expertise. The acquisition was accounted for as a purchase.
During 1994 all four of our market segments showed progress. Our
supermarket deli business increased 29%, institutional distributors 11%,
the fundraising program 20% and our sales to frozen pizza manufacturers 8%.
We introduced our first branded item during the year. Piemonte "Focaccia"
is an Italian flat bread, packaged to be shelf-stable for an extended period
of time and designed to be used as either a base for gourmet pizza or an
upscale bread product. We also introduced our "Hand Tossed" pizza crust.
Designed with the flavor and texture of "pizzeria" dough, but mass produced
and pre-baked for convenience, it is packaged with its own pizza sauce and
cheese blends in a portion-control unit. It appeals to both supermarket
delis for upgrading their store-made pizza programs and non-traditional
foodservice establishments wanting to add pizza to their menu. Sales of
both products indicate both were successful launches.
As stated, cost of sales increased 1% to 71.9%. This however, includes a
partial year for Origena in 1994. On full year sales, there is in actuality a
decline of 0.6%. We were successful in implementing selected price increases
during the year and we kept tight control of our manufacturing costs.
Selling, general and administrative costs increased as we added a
marketing department to support our growth, expanded our customer field
support staff and launched the new products mentioned above in addition to
Origena. This resulted in a $1.6 million or 28% increase. The $549 thousand
increase to support our marketing forays into new product areas provided the
basis for the growth elaborated in the 1995 to 1994 comparison above. We also
added a private label expert to expand our focus in that segment. Operating
income decreased 27%, resulting in a new income of $557,328.
For the coming year we will focus on expanding our branded retail line,
introducing our upscale products to more supermarket delis and foodservice
establishments, continuing our controlled growth through our salaried staff
in the fundraising segment and expanding our ability to private label products
for others.
IMPACT OF INFLATION
The Company does not believe that inflation has had a material effect
on revenues or expenses for the previous three fiscal years. Inflation in
raw material and labor costs, however, could significantly affect the
Company's operations. In the past, the, Company has been able to generate
revenue sufficient to meet or exceed increases in its operating costs. To
the extent that inflation were to cause increased costs that the Company
could not offset by price increases or other revenue, the Company's results
of operations would be adversely affected.
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTAL DATA
Index to Consolidated Financial Statements and Schedules
Page
Report of Independent Certified Public Accountants II F-l
Financial Statements:
Consolidated Balance Sheets II F-2
Consolidated Statements of Income II F-4
Consolidated Statements of Stockholders' Equity II F-5
Consolidated Statements of Cash Flows II F-6
Notes to Consolidated Financial Statements II F-7
Schedules:
II - Valuation and Qualifying Accounts II F-16
Schedules I, III, IV, V, VI, VII, IX, X, XI, XII and XIII have
been omitted because they are either not required or are inapplicable.
PIEMONTE FOODS, INC.
AND
SUBSIDIARIES
Consolidated Financial Statements
For the Fiscal Years Ended June 3, 1995, May 28, 1994 and May 29, 1993
(INSERTS F-2 - F-5 WHEN DISK COMES IN)
Independent Auditors' Report
The Board of Directors
Piemonte Foods, Inc.
Greenville, South Carolina
We have audited the accompanying consolidated balance sheets of
Piemonte Foods, Inc. and Subsidiaries as of June 3, 1995 and May
28, 1994, and the related consolidated statements of income and
retained earnings, stockholders' equity, and cash flows for each
of the three fiscal years in the period ended June 3, 1995.
These financial statements are the responsibility of the
Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that
our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred
to above present fairly, in all material respects, the financial
position of Piemonte Foods, Inc. and Subsidiaries as of June 3,
1995 and May 28, 1994, and the results of its operations and its
cash flows for each of the three fiscal years in the period
ended June 3, 1995 in conformity with generally accepted
accounting principles.
As discussed in Note 2 to the financial statements, the Company
expensed product development costs that had previously been capitalized
in fiscal year 1994 and 1993.
Also as described in Note 2, the acquisition of Origena, Inc. previously
accounted for as a pooling of interest has been accounted for as a purchase.
Certified Public Accountants
Greenville, South Carolina
July 15, 1995
(except for Note 2, as to
which date is April 18, 1996)
PIEMONTE FOODS, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
June 3, 1995 and May 28, 1994
ASSETS
As Restated As Restated
1995 1994
CURRENT ASSETS
Cash $ 885,967 $ 1,030,983
Accounts receivable, net 1,778,773 2,165,831
Inventories 1,909,104 1,427,895
Prepaid expenses 299,059 104,101
TOTAL CURRENT ASSETS 4,872,903 4,728,810
PROPERTY, PLANT AND EQUIPMENT, NET OF
ACCUMULATED DEPRECIATION 5,373,892 5,125,682
DEFERRED CHARGES, INTANGIBLE AND
OTHER ASSETS
Excess of cost over fair value of net assets acquired 803,310 833,169
Other assets 176,118 129,612
979,428 962,781
TOTAL ASSETS $11,226,223 $10,817,273
See Accompanying Notes to Consolidated Financial Statements.
PIEMONTE FOODS, INC. AND SUBSIDIARIES
Consolidated Balance Sheets (Continued)
June 3, 1995 and May 28, 1994
LIABILITIES AND STOCKHOLDERS' EQUITY
As Restated As Restated
1995 1994
CURRENT LIABILITIES
Current portion of long-term debt $ 609,131 $ 445,560
Line of credit - 500,000
Accounts payable, trade 1,379,088 1,136,030
Accrued promotional allowances 78,069 139,575
Accrued compensation and payroll taxes 184,842 182,884
Accrued incentive fund - 130,000
Accrued property taxes 76,762 102,253
Other accrued expenses 99,458 66,606
TOTAL CURRENT LIABILITIES 2,427,350 2,702,908
LONG-TERM DEBT 1,357,224 889,510
DEFERRED INCOME TAXES 420,728 389,728
STOCKHOLDERS' EQUITY
Common stock, no par value; authorized 5,000,000
shares; issued 1,448,261 shares outstanding
1,448,261 and 1,426,945 in 1995 and 1994,
respectively 14,481 14,369
Capital in excess of stated value of common
stock 2,744,938 2,688,726
Retained earnings 4,261,502 4,155,783
Total 7,020,921 6,858,878
Less treasury stock - at cost (10,000 shares) - 23,751
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $11,226,223 $10,817,273
See Accompanying Notes to Consolidated Financial Statements.
PIEMONTE FOODS, INC. AND SUBSIDIARIES
Consolidated Statements of Stockholders' Equity
For the Years Ended June 3, 1995, May 28, 1994 and May 29, 1993
Common Stock As Restated As Restated Treasury Stock
Capital in
Number of Excess of Retained Number of
Shares Amount Stated Value Earnings Shares Amount
Balance, May 30, 1992, as previously
reported 1,267,551 $ 12,675 $1,410,409 $3,732,994 $ 10,000 $ 23,751
Dividends: Stock, 5% August, 1994 67,906 679 568,373 (569,052) - -
Balance, May 30, 1992, as restated 1,335,457 13,354 1,978,782 3,163,942 10,000 23,751
Net Income - - - 684,513 - -
Balance, May 29, 1993 1,335,457 13,354 1,978,782 3,848,455 10,000 23,751
Common stock issued 101,488 1,015 709,944 - - -
Net income - - - 557,328 - -
Dividends: Origena, Inc. - - - (250,000) - -
Balance, May 28, 1994 1,436,945 14,369 2,688,726 4,155,783 10,000 23,751
Treasury stock cancelled (10,000) (100) (23,651) - (10,000) (23,751)
Common stock issued 21,316 212 79,863 - - -
Net income - - - 105,719 - -
Balance, June 3, 1995 1,448,261 $ 14,481 $2,744,938 $4,261,502 $ - $ -
See Accompany Notes to Consolidated Financial Statements.
PIEMONTE FOODS, INC. AND SUBSIDIARIES
Consolidated Statements of Income
For the Fiscal Years Ended June 3, 1995, May 28, 1994 and May 29, 1993
As Restated As Restated As Restated
1995 1994 1993
(52 weeks) (52 weeks) (52 weeks)
NET SALES $30,483,161 $29,874,548 $ 24,072,414
OPERATING EXPENSES
Cost of sales 22,871,329 21,439,486 17,023,722
Selling, general and administrative expenses 7,241,706 7,516,819 5,871,156
Total 30,113,035 28,956,305 22,894,878
OPERATING INCOME 370,126 918,243 1,177,536
OTHER EXPENSE (INCOME)
Interest expense 153,190 114,470 122,917
Loss on disposal of assets 98,980 - -
Interest income (39,421) (33,910) (43,626)
Other expense (income) (49,342) (44,739) (29,268)
Net other expense 163,407 35,821 50,023
INCOME BEFORE INCOME TAXES AND
CUMULATIVE EFFECT ADJUSTMENT 206,719 882,422 1,127,513
PROVISION FOR INCOME TAXES 101,000 383,000 443,000
INCOME BEFORE EFFECT OF CHANGE IN
ACCOUNTING PRINCIPLE 105,719 499,422 684,513
CUMULATIVE EFFECT OF CHANGE IN
ACCOUNTING PRINCIPLE - 57,906 -
NET INCOME $ 105,719 $ 557,328 $ 684,513
Earnings per common and common equivalent shares:
Before cumulative effect of change in accounting princi 0.07 0.32 0.54
Cumulative effect of change in accounting principle - 0.04 -
0.07 0.36 0.54
See Accompanying Notes to Consolidated Financial Statements.
PIEMONTE FOODS, INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows
For the Fiscal Years Ended June 3, 1995, May 28, 1994 and May 29, 1993
As Restated As Restated As Restated
1995 1994 1993
(53 weeks) (52 weeks) (52 weeks)
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income $ 105,719 $ 557,328 $ 684,513
Adjustments to reconcile net income to net cash
provided by operating activities
Depreciation and amortization 751,722 662,410 532,854
Deferred income taxes 31,000 63,174 21,000
(Gain) loss on disposal of property 98,988 - -
(Increase) decrease in accounts receivable 387,058 (381,412) (252,196)
(Increase) decrease in prepaid expenses (66,207) 172,045 (56,926)
(Increase) decrease in inventories (481,209) 90,710 (197,440)
(Increase) decrease in other assets 3,494 (27,731) (2,853)
Increase (decrease) in accounts payable 243,058 334,835 179,220
Increase (decrease) in accrued liabilities (151,299) 164,854 (53,867)
Increase (decrease) in income taxes payable - (29,938) (121,738)
Total adjustments 816,605 1,048,947 48,054
NET CASH PROVIDED BY OPERATING ACTIVITIES 922,324 1,606,275 732,567
CASH FLOWS FROM INVESTING ACTIVITIES
Cash payments for the purchase of property (1,319,203) (1,314,504) (447,280)
Investment in joint venture (50,000) - -
Cash proceeds from the sale of property 90,100 - -
NET CASH USED IN INVESTING ACTIVITIES (1,279,103) (1,314,504) (447,280)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of long-term debt 1,145,000 - -
Proceeds from issuance of common stock 80,478 10,959 -
Net borrowings (repayment) on line of credit (500,000) 500,000 -
Principal payments on long-term debt (513,715) (445,560) (445,560)
Dividends paid - (250,000) -
NET CASH PROVIDED BY (USED IN)
FINANCING ACTIVITIES 211,763 (184,601) (445,560)
NET DECREASE IN CASH (145,016) 107,170 (160,273)
CASH, BEGINNING OF YEAR 1,030,983 923,813 1,083,586
CASH, END OF YEAR $ 885,967 $ 1,030,983 $ 923,313
Supplemental information
Cash paid for interest 153,190 530,157 122,917
Cash paid for income taxes 301,932 125,651 561,738
</Table
See Accompany Notes to Consolidated Financial Statements.
PIEMONTE FOODS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
For the Fiscal Years Ended June 3, 1995, May 28, 1994 and May 29, 1993
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Principles of Consolidation
The consolidated financial statements include the accounts of
Piemonte Foods, Inc. (the "Company"), and its subsidiaries, Piemonte
Foods of Indiana, Inc. and Origena, Inc., both of which are
wholly owned. All significant intercompany accounts and balances have
been eliminated.
Cash
The Company maintains cash balances at several banks. Accounts
at each institution are insured by the Federal Deposit Insurance
Corporation up to $100,000. Amounts in excess of insured limits were
$513,000 and $995,000 at June 3, 1995 and May 28, 1994, respectively.
Accounts Receivable and Allowance for Doubtful Accounts
Income is charged and an allowance is credited with a provision
for doubtful accounts based on bad debt experience and the status of
delinquent accounts at year end. Accounts deemed uncollectible are
charged against this allowance. Accounts receivable are reported
in the balance sheets net of such accumulated allowance. The
allowances were $160,000 and $129,000 at June 3, 1995 and May 28, 1994,
respectively. The provisions for doubtful accounts were $66,000,
$54,000 and $134,000 for 1995, 1994, and 1993, respectively.
The Company is engaged in the manufacture and distribution of
Italian style food products. The Company's primary sales area is
the eastern half of the United States. Credit is granted to its
customers which include grocery chains, wholesale food distributors and
frozen pizza manufacturers.
Substantially all accounts receivable are pledged as collateral for
the line of credit and long-term debt (See notes 5 and 6).
Inventories
Inventories are stated at the lower of cost (first-in, first-out
method) or market. Inventories are composed of the following:
June 3, May 28,
1995 1994
Raw materials $ 776,130 $ 478,220
Finished goods 1,132,974 949,675
$ 1,909,104 $ 1,427,895
Substantially all inventory is pledged as collateral for the line of
credit and long-term debt (See notes 5 and 6).
PIEMONTE FOODS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
For the Fiscal Years Ended June 3, 1995, May 28, 1994 and May 29, 1993
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Property, Plant and Equipment
Property, plant and equipment are stated at cost. Maintenance
and repairs are charged to expense as incurred. When property,
plant and equipment are retired or sold, the cost and related
accumulated depreciation are removed from the respective accounts and
the resulting gain or loss, if any, is included in income.
Depreciation of property, plant and equipment is computed using
the straight-line method and estimated useful lives of the property for
financial reporting purposes and accelerated cost recovery methods and
periods for income tax purposes.
Substantially all property, plant and equipment in Indiana and Illinois
is pledged as collateral for the line of credit and long-term debt (See
notes 5 and 6).
Excess of Cost over Fair Value of Net Assets Acquired
Excess cost over fair value of net assets acquired arises from the
acquisition in 1984 of Piemonte Foods of Indiana, Inc. and in 1993 of
Origena, Inc. The amounts and amortization periods are as follows:
Piedmonte Foods of Indiana, Inc. $1,023,654 40 years
Origena, Inc. 73,791 25 years
Accumulated amortization at June 3, 1995 and May 28, 1994 was $293,000
and $264,000, respectively.
Income Taxes
Effective May 30, 1993, the Company adopted the provisions of Statement
of Financial Accounting Standards No. 109 (SFAS 109), "Accounting for
Income Taxes" and reported the cumulative effect of that change in the
method of accounting for income taxes in the consolidated statement of
earnings.
Net Income Per Share
Net income per share is based upon the weighted average number
of common and common equivalent shares outstanding during the
respective periods. See Note 9 regarding stock options outstanding
which constitute the Company's common equivalent shares. The common
equivalent shares have had no material dilutive effect.
Stock Dividends
On August 16, 1993 and on August 15, 1994, the Board of
Directors declared a five percent (5%) stock dividend. All relevant
data has been adjusted to give retroactive effect to these stock
dividends.
PIEMONTE FOODS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
For the Fiscal Years Ended June 3, 1995, May 28, 1994 and May 29, 1993
NOTE 2 - RESTATEMENT OF FINANCIAL STATEMENTS
The accompanying financial statements for 1995, 1994 and 1993 have been
restated to reflect the expensing of product development costs as incurred.
Originally, the costs were capitalized beginning in 1993 and were being
amortized over three years. The effect of the restatment is as follows:
1995 1994 1993
Net income increase (decrease) $134,249 $(305,728) $ (28,126)
Per share $ 0.09 $ (0.21) $ (0.02)
Net income tax of $ 82,000 $(188,000) $ (18,000)
The acquisition of Origena, Inc., an S corporation, was consumated in October,
1993 and was accounted for as a pooling of interest. The sole shareholder of
the S corporation received a distribution from the acquired company in the
amount of $250,000. This distribution was deemed to be an unusual distribution
in contemplation of the merger, and therefore, does not qualify for pooling.
The financial statements have been restated to show the acquisition as a
purchase. The effect of this restatement is as follows:
1995 1994 1993
Net income increase (decrease) $ (46,665) $(183,591) $(145,402)
Per share $ (0.03) $ (0.12) $ (0.10)
Net income tax of $ (28,000) $ -- $ --
Origena, Inc. became a wholly owned subsidiary of the Company through the
exchange of 100,000 shares of the Company's common stock for all of the
outstanding stock of Origena, Inc. The amount assigned to the issued stock
was $700,000. The accompanying financial statements include the results of
operations of Origena, Inc. from October, 1993.
Cumulatively, these two restatements affected results as follows:
1995 1994 1993
Net income increase (decrease) $ 87,584 $(489,319) $(173,528)
Per share $ 0.06 $ (0.33) $ (0.12)
Net income tax of $ 54,000 $(188,000) $ (18,000)
Had the results of operations been included in the financial statements for
the full year of acquisition and for the prior year, the following sales
and net income of the combined companies would be as follows:
1994 1993
Sales $31,048,554 $26,835,937
Income before effect of
change in accounting
principle $ 499,422 $ 684,513
Net income $ 667,789 $ 829,915
Earnings/share
Before change 0.32 0.45
If restated 0.43 0.55
NOTE 3 - PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment consists of:
Estimated
Useful
1995 1994 Lives - Years
Land $ 25,000 $ 93,268
Buildings 1,825,566 2,104,312 4-30
Equipment 7,156,567 6,547,071 2-12
Vehicles 242,991 254,134 2-6
Furniture and fixtures 316,504 304,159 2-10
Leaseholds 554,091 533,510 3-10
Total 10,120,719 9,836,454
Less Accumulated Depreciation and
Amortization 5,336,095 5,370,753
Net Property, Plant and Equipment $ 4,784,624 $ 4,465,701
Depreciation and amortization of property, plant and equipment was
$663,000, $584,000 and $626,000 in 1995, 1994 and 1993, respectively.
Repairs and maintenance were $354,000, $354,000, and $320,000 in 1995,
1994 and 1993, respectively.
PIEMONTE FOODS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
For the Fiscal Years Ended June 3, 1995, May 28, 1994 and May 29, 1993
NOTE 4 - OPERATING LEASES
The Company leases its two bakery manufacturing plants,
distribution center and automotive fleet under arrangements accounted
for as operating leases. Such leases expire at various times over
the next four fiscal years. The approximate minimum annual commitments
under these leases are as follows:
Fiscal Year Amount
1995 $ 217,000
1996 151,000
1997 109,000
1998 104,000
The Company leases certain transportation equipment (principally
over-the-road tractors and trailers) under cancelable leases for an
approximate base rent of $40,000 per month plus a charge for mileage and
fuel.
Rent expense for operating leases totaled $793,000, $750,000 and
$808,000 in 1995, 1994 and 1993, respectively.
NOTE 5 - NOTE PAYABLE - LINE OF CREDIT
Annually renewable lines of credit have been extended to the
Company in the amounts of $1,000,000 and $1,500,000. The $1,000,000
line is collateralized by fixed assets acquired with the proceeds from
the line use and by all accounts receivable and inventories and is
guaranteed by the Company and its subsidiaries. The $1,500,000 line of
credit is collateralized by all accounts receivable and inventory and is
guaranteed by the Company and its subsidiaries. The interest rate
charged is at the borrower's option of the bank's prime rate or the
30, 60 or 90 LIBOR base rate plus 150 basis points. The lines expire
September 30, 1995. They were not in use at June 3, 1995.
The lines of credit and bank loans are cross collateralized and cross
defaulted.
PIEMONTE FOODS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
For the Fiscal Years Ended June 3, 1995, May 28, 1994 and May 29, 1993
NOTE 6 - LONG-TERM DEBT AND DEBT COVENANT RESTRICTIONS
Long-term debt consists of:
1995 1994
Bank loans collateralized by all property in Indiana, plant and
equipment in Indiana and Illinois, all accounts receivable
and all inventories; due in monthly installments indicated
below plus interest at either the prime rate or the 30, 60
or 90 day LIBOR base rate plus 150 basis points
$23,800 monthly, through April, 1996 $ 262,600 $ 548,200
$13,330 monthly, through April, 1999 627,270 786,870
$13,630 monthly, through November, 2001 1,076,485 -
1,966,355 1,335,070
Less current portion 609,131 445,560
LONG-TERM DEBT $ 1,357,224 $ 889,510
The debt agreements contain restrictive covenants which, among
other things, require that the Company maintain a minimum level of
working capital, meet certain minimum financial ratios and limit its
additional outside borrowings to $1,000,000 annually.
The lines of credit and bank loans are cross collateralized and cross
defaulted.
PIEMONTE FOODS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
For the Fiscal Years Ended June 3, 1995, May 28, 1994 and May 29, 1993
NOTE 6 - LONG-TERM DEBT (Continued)
Long-term debt maturities are as follows:
Fiscal Year Amount
1996 $ 609,131
1997 323,520
1998 323,520
1999 310,590
2000 163,560
Thereafter 236,034
NOTE 7 - INCOME TAXES
As discussed in Note 1, the Company adopted SFAS 109 as of the
beginning of the fiscal year ended May 28, 1994. The cumulative
effect of this change in accounting for income taxes, which resulted
in a $57,905 reduction of the deferred income tax liability at
May 30, 1993, has been reflected in the consolidated statement of
earnings for the fiscal year ended May 28, 1994.
The provision for income taxes consists of:
1995 1994 1993
Current
Federal $ 88,000 $ 283,000 $ 358,000
State 34,000 54,000 64,000
Total Current Provision 122,000 337,000 422,000
Deferred
Federal (26,000) 39,000 18,000
State 5,000 7,000 3,000
Total Deferred Provision (21,000) 46,000 21,000
Provision for income taxes $ 101,000 $ 383,000 $ 443,000
Components of the deferred portion of the income tax provision which
resulted from timing differences in the recognition of expense for
income tax and financial accounting purposes are as follows:
1995 1994 1993
1986 Tax Reform Act changes
Bad debt $ (12,400) $ 10,000 $ -
Inventory capitalization 10,000 4,000 (1,000)
Depreciation for income tax return
in excess of book depreciation 31,000 27,000 20,000
Accruals (7,000) - 2,000
State income taxes - 5,000 -
AMT credit carry forward (42,600) - -
$ (21,000) $ 46,000 $ 21,000
PIEMONTE FOODS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
For the Fiscal Years Ended June 3, 1995, May 28, 1994 and May 29, 1993
NOTE 7 - INCOME TAXES (Continued)
The income tax provision differs from the amount computed by applying
the statutory rate as follows:
1995 1994 1993
Tax expense computed at statutory
federal income tax rate - 34% $ 70,000 $ 300,000 $ 384,000
Increases (reductions) in taxes
resulting from:
Benefit of graduated tax rates (11,000) (45,000) (19,000)
Amortization of the excess of cost
over fair value of net assets
acquired and meals and entertainment
not deductible for tax purposes 26,000 16,000 13,000
State income taxes, net of
federal benefit 16,000 132,000 65,000
Other items:
Cumulative effect of change in
accounting principle - (20,000) -
$ 101,000 $ 383,000 $ 443,000
NOTE 8 - EMPLOYEES' SAVINGS PLAN (401K)
In November, 1990, the Company adopted a 401K savings plan.
Full-time employees with at least one year of service may elect to
contribute up to 6% of annual compensation to the plan. In
addition, the Company contributes 50% of such employee contributions.
Company contributions totaled approximately $54,000, $53,000 and $37,000
in 1995, 1994 and 1993, respectively.
NOTE 9 - STOCK OPTIONS OUTSTANDING
In April 1994, the Board of Directors adopted the 1994 Stock Plan
that provides 450,000 shares of common stock for options for key
employees. In addition the plan incorporates options outstanding under
a previous plan. The plan was ratified by stockholders at the 1994
Annual meeting.
Concurrent with adoption, options covering 150,000 shares were granted
and became exercisable at 25% per year beginning in 1994. Under
provisions of the Plan, options representing 6,300 shares were
granted to non-employee Directors in October, 1994.
PIEMONTE FOODS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
For the Fiscal Years Ended June 3, 1995, May 28, 1994 and May 29, 1993
NOTE 9 - STOCK OPTIONS OUTSTANDING (Continued)
At June 3, 1995, options granted and outstanding are as follows:
Options Date Exercise Price Options Expiration
Granted Granted Per Share Exercised Date
16,537 Nov., 1990 $1.81 None Jan., 1996
90,405 Dec., 1991 2.04 11,025 Dec., 1996
40,793 Jan., 1993 2.49 None Oct., 1997
17,850 Nov., 1993 8.33 None Nov., 1998
157,500 Apr., 1994 6.90 None Apr., 2004
6,300 Oct., 1994 6.75 None Oct., 2004
NOTE 10 - RECLASSIFICATION
Sales related expenses reported in cost of goods sold were reclassified to
selling, general, and administrative expenses. The impact was approximately
$1 million in both FY 95 and FY 94.
NOTE 11 - COMMITMENTS
During the year, the Company entered into an agreement with another
company to develop a joint venture in Europe. The agreement includes a
provision for each participant to invest $1,000,000 in equity and for
loans to the joint venture. The joint venture intends to borrow
an additional $3,000,000. Each party will be jointly and severally
liable for the joint venture debt.
The Company in its financial plan has committed up to $900,000
to retrofit the Indiana plant to meet applicable USDA and other
governmental requirements.
PIEMONTE FOODS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
For the Fiscal Years Ended June 3, 1995, May 28, 1994 and May 29, 1993
NOTE 12 - UNAUDITED QUARTERLY FINANCIAL DATA, ($ IN THOUSANDS, EXCEPT
PER SHARE AMOUNTS)
1st Quarter 2nd Quarter
1995 1994 1995 1994
Net Sales $ 6,569 5,689 8,533 7,524
Gross Profit $ 1,511 1,234 2,258 2,291
Net Income (Loss) before
Cumulative Effect of Change
in Accounting Principle $ (1) (240) 130 277
Cumulative Effect of Change in
Accounting Principle $ - 58 - -
Net Income (Loss) $ (1) (182) 130 277
Per Share Net Income (Loss)
Before change $ (0.00) (0.17) 0.09 0.19
After change $ (0.00) (0.13) 0.09 0.19
Bid Price Common Stock
High $ 9 1/4 7 1/2 9 1/4 9 1/2
Low $ 7 3/4 5 6 1/2 6 3/4
3rd Quarter 4th Quarter
1995 1994 1995 1994
Net Sales $ 7,331 8,140 8,050 8,522
Gross Profit $ 2,144 2,295 1,600 2,615
Net Income (Loss) $ 55 120 (78) 342
Per Share Net Income (Loss) $ 0.04 0.08 (0.05) 0.24
Bid Price Common Stock
High $ 7 3/4 9 6 1/2 8 1/2
Low $ 6 1/4 7 1/4 4 1/2 7 1/4
PIEMONTE FOODS, INC. AND SUBSIDIARIES
Schedule II - Valuation and Qualifying Accounts
For the Fiscal Years Ended June 3, 1995, May 28, 1994 and May 29, 1993
Balance at Chargedto Charged to Balance at
beginning of cost and other end
Description period expenses accounts Deductions of period
1995
Allowance for doubtful
accounts $ 127,000 67,000 34,000 160,000
1994
Allowance for doubtful
accounts $ 155,000 48,000 76,000 127,000
1993
Allowance for doubtful
accounts $ 108,000 134,000 87,000 155,000
Item 9. DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None
PART III
A definitive proxy statement, which will be filed with the Securities and
Exchange Commission pursuant to regulation 14A of the Securities Exchange
Act of 1934 within 120 days of the end of the registrant's fiscal year ended
June 3, 1995, is incorporated herein by reference.
Item 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Such information as required by the Securities and Exchange Commission
in Regulation S-K is contained in the Company's definitive Proxy Statement
in connection with its Annual Meeting to be held October 27, 1995.
Item 11. EXECUTIVE COMPENSATION
The information with respect to executive compensation and transactions
is hereby incorporated by reference from the Company's definitive proxy
statement to be filed with the Securities and Exchange Commission pursuant
to Regulation 14A of the Securities Exchange Act of 1934.
Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The information with respect to security ownership of certain beneficial
owners and management is hereby incorporated by reference from the Company's
definitive proxy statement to be filed with the Securities and Exchange
Commission pursuant to Regulation 14A of the Securities and Exchange Act
of 1934.
Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
None
PART IV
Item 14. EXHIBITS, FINANCIAL STATEMENTS, SCHEDULES, REPORTS ON 8-K
(a)(1) Financial Statements Page No.
Included in Part II of this report:
Report of Independent Certified Public Accountants II F-l
Consolidated Balance Sheets II F-2
Consolidated Statements of Income II F-4
Consolidated Statements of Stockholders' Equity II F-5
Consolidated Statements of Cash Flows II F-6
Notes to Consolidated Financial Statements II F-7
(a)(2) Financial Statement Schedules
Included in Part II of this report:
III. Valuation and Qualifying Accounts II F-16
Schedules I, II, III, IV, VII, IX, X, XI, XII, XIII
have been omitted because they are either not required
or are inapplicable.
(a)(3) Exhibits
The Exhibits listed on the accompanying index to
Exhibits are filed as a part of this report.
(b) Reports on Form 8-K
No reports on Form 8-K were filed during the fourth
quarter of the fiscal year ended June 3, 1995.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
PIEMONTE FOODS, INC.
(Registrant)
By s/Virgil L. Clark
Virgil L. Clark, CEO
Date April 23, 1996
By s/Roy E. Gogel
Vice President/CFO
Date April 23, 1996
Pursuant to the requirements of the Securities Exchange Act of 1934 this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the date indicated.
s/Virgil L. Clark August 28, 1995
Virgil L. Clark, President, CEO Date
and Director
s/John A. Lindsay August 28, 1995
John A. Lindsay, Sr. Vice Pres. Date
CFO and Director
s/T. Patrick Costello August 28, 1995
T. Patrick Costello, Sr. Vice Date
President and Director
s/Grant L. Douglass August 28, 1995
Grant L. Douglass, Director Date
s/Paul S. Goldsmith August 28. 1995
Paul S. Goldsmith, Director Date
s/Ronald T. Huth August 28, 1995
Ronald T. Huth, Chairman and Date
Director
s/William P. Mahoney August 28, 1995
William P. Mahoney, Director Date
s/Glenn R. Oxner August 28, 1995
Glenn R. Oxner, Director Date
s/Richard J. Stoner August 28, 1995
Richard J. Stoner, Director Date
INDEX TO EXHIBITS
Exhibit No. Descriptions
3 (a) Articles of incorporation of Piemonte, as amended, which
was filed as an exhibit to the Company's Form 10-K for
the fiscal year ended May 30, 1987, is hereby
incorporated by reference.
(b) By-Laws of Piemonte, which was filed as an exhibit to
the Company's Form 10-K for the fiscal year ended May
30, 1987, is hereby incorporated by reference.
4 The Company agrees to furnish to the Securities and
Exchange Commission upon its request a copy of any
instrument which defines the rights of holders of long-
term debt of the Company and its consolidated
subsidiaries. No such instrument authorizes a total
amount of securities in excess of 10% of the total assets
of the Company and its subsidiaries on a consolidated
basis.
10 (c) The Lease Agreement dated October 28, 1983, between
Bakery Realty of Greenville, Inc. and the Company, which
was filed as an exhibit to the Company's Form 10-K for
the fiscal year ended May 30, 1987, is hereby
incorporated by reference.
(e) The Lease Agreement dated March 1, 1983, between Garrett
& Garrett Warehouses and Garrett & Garrett, S. C.
Partnerships and the Company, which was filed as an
exhibit to the Company's Form 10-K for the fiscal year
ended May 30, 1987, is hereby incorporated by reference.
(g) The Incentive Stock Option Plan, which was filed as
an exhibit to the Company's Form 10-K for the fiscal
year ended May 30, 1987, is hereby incorporated by
reference.
(1) The Loan and Security Agreement dated April 27, 1989,
between First Union National Bank of South Carolina
and the Company, which was filed as an exhibit to the
Company's Form 10-K for the fiscal year ended June 3,
1989 is hereby incorporated by reference.
(n) The Employment Agreement dated as of April 15, 1993
between the Company and John A. Lindsay, which was filed
as an exhibit to the Company's Form 10-K for the fiscal
year ended May 29, 1993, is hereby incorporated by
reference.
(o) The Lease Extension and Option Agreement dated July
1, 1993 between Garrett & Garrett Warehouses and Garrett
& Garrett and the Company, which was filed as an exhibit
to the Company's Form 10-K for the fiscal year ended
May 29, 1993, is hereby incorporated by reference.
(p) The Lease Agreement dated as of November 16, 1993,
between Institutional Wholesale Co., Inc. and the
Company, is hereby incorporated by reference.
(q) The Employment Agreement dated as of April 22, 1994,
between the Company and Virgil L. Clark, is hereby
incorporated by reference.
22 Subsidiaries of the registrant.