SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C.
20549
FORM 10-K
ANNUAL REPORT UNDER SECTION 13 OR 15 (d) OF
THE SECURITIES EXCHANGE ACT OR 1934
For the fiscal year ended June 1, 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: (864) 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 (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
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 1,
1996, computed by reference to the closing price of the registrant's Common
Stock:
$7,015,854.
The number of shares of common stock outstanding as of August 22, 1996
was 1,476,209.
PART I
ITEM 1. BUSINESS
Piemonte Foods, Inc. develops, produces and markets pizza-related
foods, primarily pre-baked pizza crusts and specialty meat toppings in addition
to icing cakes for supermarkets.
The Company's products are targeted to three specific segments in the
wholesale food market; Pre-made and frozen pizza industry, Institutional and
Foodservice distributors, and Supermarket delicatessens. Additionally,
Piemonte's products are sold through specialty fund raising programs for public
and private schools, clubs, and church groups in nineteen states.
The Company's products are sold through its own sales force as well as
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 participates in a 50/50 joint venture with Sabatasso Pizza
Products in Breda, Holland, having formed a company named Piemonte Beheer MIJ
B.V. in 1994. The joint venture is a pizza crust producer.
BUSINESS OPERATIONS
WHOLESALE FOOD SALES
The 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 thickness and sizes of crusts as well as special recipes.
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 32%, 32%, and 33% of the Company's revenues during
1994, 1995, and 1996.
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 both private label and proprietary products. Independent distributors
hold their own inventories and are solely responsible for the distribution
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 29%, 27%, and
26% of the Company's revenues during 1994, 1995, and 1996.
Supermarkets
Competitive pressures from fast food chains advanced the rapid
emergence of supermarket delicatessens which offer fresh, healthful,
already-prepared foods.
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 toppings and crust thicknesses.
In response to customer demand, the Company has expanded its cake icing
services for Supermarkets. Cakes are iced for the supermarkets with both base
icing and decorative icing to include intricate rose pedals.
Supermarket sales have accounted for 30%, 31%, and 36% of the Company's
revenues during 1994, 1995, and 1996.
The Distribution Network
The Company distributes products to its wholesale customers from its
manufacturing facilities as well as a centralized warehouse in Simpsonville, SC.
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.
FUNDRAISING PROGRAM
Piemonte Foods supplies pizza products to schools and other
organizations 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.
Consumers assemble the ingredients and bake.
Fundraising programs such as Piemonte's are gaining popularity as local
funding is reduced in many communities across the country. Contacts with the
schools are made by independent commissioned agents. These agents provide
support for the fundraising organizations, providing materials and helping
organize the distribution.
We anticipate continued growth in the fundraising market because of the
popularity of pizza coupled with the surge in at-home consumption.
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.
MAJOR CUSTOMERS
The Company's business is not dependent on any single customer, but one
Company - Kroger at 19% - did account for more than 10% of the Company's
consolidated revenues for the last year.
SOURCES AND AVAILABILTY 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. The drought this spring did cause crop
problems in the grain-producing states, but we were partially protected by our
purchasing procedures.
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 name "Piemonte" is a registered trademark. The brand name enjoys a
significant amount of brand equity among not only trade customers but consumers
as well.
SEASONAL AND CYCLICAL NATURE OF BUSINESS; BACKLOG
The pizza industry does experience volatility, decreasing significantly
in the summer when fundraising programs traditionally stall and picnics displace
pizza consumption.
Because the Company deals almost entirely in products which are sold
fresh to the consumer, it does not develop significant order backlogs.
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. Our most important goal is to produce products
that are superior in taste to our competition, and then support our customers
through merchandising, marketing, service, and value.
REGULATIONS
The Company is subject to various Federal, State and local laws
affecting its business, including various health, environment, sanitation, and
safety regulations. Our Frankfurt, IN facility 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 301 full and part-time employees. Of these, there are
10 administrative and clerical positions and 18 sales and sales administrative
positions. The remaining employees are in manufacturing, warehousing, and
delivery.
ITEM 2. PROPERTIES
The following table sets forth information concerning the Company's
facilities:
Date Leased Exp. Of Approx.
or Acquired Lease Square
Location Description Term Footage
Greenville, SC 1974 Corporate Headquarters, Bakery, 1998 67,000
Distribution, and Maintenance
Simpsonville, SC 1983 Warehousing and Distribution 1998 40,000
Chicago, IL 1990 Office and Bakery 1999 30,000
Frankfort, IN 1988 Office, USDA Meat Production and Owned 55,000
Regional Distribution
Nashville, TN 1996 Decorated Cake Production 2001 26,000
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
Matters subject to a vote at the regularly scheduled meeting are addressed in
the Proxy mailed to all security holders.
PART II
ITEM 5. MARKET PRICE AND DIVIDENDS ON THE REGISTRANT'S COMMON EQUITY
AND RELATED STOCKHOLDER MATTERS
PRICE RANGE OF 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.
1995 High Low
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
1996
1st 5 3/4 4
2nd 6 4
3rd 5 1/4 4 1/2
4th 5 1/8 4 1/2
The principal market makers of the Company's shares are McDonald &
Company in Cleveland, Ohio, NatCity 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 June 1, 1996
Common Stock, No Par Value 400
DIVIDEND HISTORY
The following table sets forth information concerning cash dividends
per share paid during fiscal years 1994, 1995 and 1996.
1994 5% stock dividend (August 1993)
1995 5% stock dividend (August 1994)
1996 None
There were 1,477,022 shares of common stock outstanding as of June 1,
1996.
Bank covenants restrict the declaration of dividends only to the extent
such dividends would cause an Event of Default.
ITEM 6. SELECTED FINANCIAL DATA
1996 1995 1994 1993 1992
Net Sales 31,148,458 30,483,161 29,874,548 24,072,414 23,504,519
Income (Loss)
from continuing
operations (638,599) 105,719 449,422 684,513 627,570
Income from
continuing oper
Per common
share (.42) 0.07 0.32 0.49 0.52
Total Assets 12,361,020 11,226,223 10,817,273 9,326,636 9,034,942
Long Term
Liabilities 3,329,524 1,357,224 889,510 1,335,070 1,780,630
Dividends per
Share (1) (2)
(1) 5% Stock Dividend (August 1994)
(2) 5% Stock Dividend (August 1993)
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
LIQUIDITY AND CAPITAL RESOURCES
Working capital on June 2, 1996 was $3,497 thousand which was $1,051
thousand favorable versus last year. Available cash of $1,659 thousand remains
at an acceptable level. Receivables have increased 27% versus prior year
though our experience factor is improved and hence a favorable percentage
reserved for bad debt versus prior year. Emphasis was placed on reducing
inventories that were lowered 37% to $1,210 thousand; obsolete items were
discarded and a review of days of supply was initiated. Also, payables were
lowered 21%. The working capital level is well above the $1 million bank
requirement. Additionally, the Company has a $500 thousand unused line of
credit.
Current year capital expenditures of $573 thousand include continued
improvements in the Frankfort facility as well as preparing a new facility for
cake icing in Nashville. For the coming year capital expenditures are budgeted
at $450 thousand. Capital investments will be focused in Nashville within the
cake icing facility where capacities and productivity are being upgraded, as
well as productivity improvements in both the Chicago and Frankfort facilities.
$1 million was invested in our joint venture in Holland this year in
addition to the original $50 thousand. The facility began operations in March.
Total project costs are estimated at $6,750 thousand. This is financed in via a
bank loan of $4,230 thousand and the remainder split evenly between Piemonte
Foods and its joint venture partner. Additional funding in the coming year is
not projected above $230 thousand that was forwarded in the summer, 1996.
RESULTS OF OPERATIONS
1996 compared to 1995
Revenues for 1996 were $31.1 million, an increase of 2% versus $30.5
million in the previous year. Sales gains in the Retail trade channel were
nearly offset by losses in Food Service. Retail gains were across numerous
supermarkets, but were most highly focused within accounts purchasing cakes that
are iced by the expanding Nashville business. Cake sales doubled between
business years. Fundraising sales remained relatively flat.
Gross margin declined to $6.4 million or 20.4% of sales, reflecting
over a 4% reduction in gross margin or a 17.5% decline versus last year's gross
margin percent. Raw material increases in flour, corrugated, and cheese were not
immediately passed on to the customers, partially due to competitive pressures.
Management has implemented measures to improve future profitability.
Continued focus on selling, general, and administrative expenses
resulted in costs of $6,676 thousand for the business year, or $566 thousand
lower than the previous year.
Financial performance for the Company's joint venture pizza crust
facility in Holland lowered the full year earnings by $261 thousand, which was
recognized in the Fourth Quarter. The joint venture losses are 50% of the total
losses through May 31, 1996, reflecting facility construction and initial
start-up phases. These costs were recognized in Holland as operational losses
rather than capitalized start-up costs.
Otherwise, Fourth Quarter earnings were low in the U.S. as well. Net
income was a loss of $371 thousand or $293 thousand unfavorable versus prior
year. $213 thousand of the loss represented numerous accounting adjustments;
$153 thousand of it recognizing fixed assets that had been previously disposed.
Due to the negative earnings recognized in the Fourth Quarter, the
Company was in default of its bank covenants for the fiscal year-end testing.
The Bank agreed to waive those covenant violations and new covenants have been
agreed upon within which the Company is in compliance. Interest costs are
increased approximately $50 thousand both in 1996 and the upcoming year due to
the new loan initiated during 1996.
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 moths in 1994. On a full year basis had Origena been
acquired at the beginning of FY 94, FY 95 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
privilege 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
the 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.
IMPACT OF INFLATION
The Company does not believe that inflation has had a material effect
on revenues or expenses for the previous three years. Inflation in raw material
and labor costs do, however, shrink Company margins, particularly in consonance
with raw material market volatility.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTAL DATA
Index to Consolidated Financial Statements and Schedules
Financial Statements: Page No.
Report of Independent Certified Public Accountants II F-1
Consolidated Balance Sheets II F-2
Consolidated Statements of Stockholders' Equity II F-4
Consolidated Statements of Income 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, VIII, IX, X, XI, XII, XIII
have been omitted because they are either not required or
inapplicable.
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 1, 1996 and June 3, 1995, 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 1,
1996. 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 1, 1996 and June 3, 1995, and the results of its
operations and its cash flows for each of the three fiscal years in the period
ended June 1, 1996 in conformity with generally accepted accounting principles.
Certified Public Accountants
Greenville, South Carolina
July 26, 1996
(except for Note 5, as to
which date is August 23, 1996)
PIEMONTE FOODS, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
June 1, 1996 and June 3, 1995
ASSETS
1996 1995
------------------- -------------------
CURRENT ASSETS
Cash $ 1,658,514 $ 885,967
Accounts Receivable, net 2,265,873 1,778,773
Inventories 1,210,154 1,909,104
Prepaid expenses 518,796 299,059
------------------- -------------------
TOTAL CURRENT ASSETS 5,653,337 4,872,903
------------------- -------------------
PROPERTY, PLANT AND EQUIPMENT, NET OF
ACCUMULATED DEPRECIATION 5,044,217 5,373,892
------------------- -------------------
DEFERRED CHARGES, INTANGIBLE AND
OTHER ASSETS
Excess of cost over fair value of net assets acquired 770,358 803,310
Investment in European joint venture - at equity 794,913 50,000
Other assets 98,195 126,118
------------------- -------------------
1,663,466 979,428
------------------- -------------------
$ 12,361,020 $ 11,226,223
=================== ===================
See Accompanying Notes to Consolidated Financial Statements.
PIEMONTE FOODS, INC. AND SUBSIDIARIES
Consolidated Balance Sheets (Continued)
June 1, 1996 and June 3, 1995
LIABILITIES AND STOCKHOLDERS' EQUITY
1996 1995
------------------- -------------------
CURRENT LIABILITIES
Current portion of long-term debt $ 502,857 $ 609,131
Accounts payable, trade 1,091,045 1,379,088
Accrued promotional allowances 76,163 78,069
Accrued compensation and payroll taxes 143,084 184,842
Accrued property taxes 70,075 76,762
Other accrued expenses 273,199 99,458
------------------- -------------------
TOTAL CURRENT LIABILITIES 2,156,423 2,427,350
------------------- -------------------
LONG-TERM DEBT 3,329,524 1,357,224
------------------- -------------------
DEFERRED INCOME TAXES 437,095 420,728
------------------- -------------------
STOCKHOLDERS' EQUITY
Common stock, no par value; authorized 5,000,000
shares; issued - 1,477,022 shares; outstanding -
1,477,022 and 1,448,261 in 1996 and 1995,
respectively. 14,770 14,481
Capital in excess of stated value of common stock 2,800,305 2,744,938
Retained earnings 3,622,903 4,261,502
------------------- -------------------
TOTAL STOCKHOLDERS' EQUITY 6,437,978 7,020,921
------------------- -------------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 12,361,020 $ 11,226,223
=================== ===================
See Accompanying Notes to Consolidated Financial Statements.
PIEMONTE FOODS, INC. AND SUBSIDIARIES
Consolidated Statements of Stockholders' Equity
For the Years Ended June 1, 1996, June 3, 1995 and May 28, 1994
Common Stock Treasury Stock
------------------------ --------------------------
Capital in
Number of Excess of Retained Number of
Shares Amount Stated Value Earnings Shares Amount
----------- --------- ------------- ------------ ------------ ----------
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 - -
Common stock issued 28,761 289 55,367 - - -
Net income (loss) - - - (638,599) - -
----------- --------- ------------- ------------ ------------ ----------
Balance, June 1, 1996 1,477,022 $ 14,770 $ 2,800,305 $ 3,622,903 - $ -
=========== ========= ============= ============ ============ ==========
See Accompanying Notes to Consolidated Financial Statements.
PIEMONTE FOODS, INC. AND SUBSIDIARIES
Consolidated Statements of Income
For the Fiscal Years Ended June 1, 1996, June 3, 1995, and May 28, 1994
1996 1995 1994
(52 weeks) (53 weeks) (52 weeks)
----------- ----------- -----------
NET SALES $ 31,148,458 $ 30,483,161 $ 29,874,548
----------- ----------- ------------
OPERATING EXPENSES
Cost of sales 24,771,803 22,871,329 21,439,486
Selling, general and administrative expenses 6,676,123 7,241,706 7,516,819
----------- ----------- ------------
Total 31,447,926 30,113,035 28,956,305
----------- ----------- ------------
OPERATING INCOME (LOSS) (299,468) 370,126 918,243
----------- ----------- ------------
OTHER EXPENSE (INCOME)
Interest expense 200,451 153,190 114,470
Loss on disposal of assets 182,807 98,980 -
Equity in loss on European joint venture 261,016 -
Interest income (45,724) (39,421) (33,910)
Other income (33,419) (49,342) (44,739)
----------- ----------- ------------
Net other expense 565,131 163,407 35,821
----------- ----------- ------------
INCOME (LOSS) BEFORE INCOME TAXES AND
CUMULATIVE EFFECT ADJUSTMENT (864,599) 206,719 882,422
PROVISION (BENEFIT) FOR INCOME TAXES (226,000) 101,000 383,000
----------- ----------- ------------
INCOME (LOSS) BEFORE EFFECT OF CHANGE IN
ACCOUNTING PRINCIPLE (638,599) 105,719 499,422
----------- ----------- ------------
CUMULATIVE EFFECT OF CHANGE IN
ACCOUNTING PRINCIPLE - - 57,906
----------- ----------- ------------
NET INCOME (LOSS) $ (638,599) $ 105,719 $ 557,328
=========== =========== ============
Earnings (loss) per common and common equivalent shares:
Before cumulative effect of change in accounting principle (0.42) 0.07 0.32
Cumulative effect of change in accounting principle - - 0.04
----------- ----------- ------------
(0.42) 0.07 0.36
=========== =========== ============
See Accompanying Notes to Consolidated Financial Statements.
PIEMONTE FOODS, INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows
For the Fiscal Years Ended June 1, 1996, June 3, 1995 and May 28, 1994
1996 1995 1994
(52 weeks) (53 weeks) (52 weeks)
------------ ------------ -----------
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income (Loss) $ (638,599) $ 105,719 $ 557,328
----------- ----------- -----------
Adjustments to reconcile net income to net cash
provided by operating activities
Depreciation and amortization 742,640 751,722 662,410
Equity in loss on European joint venture 261,016 - -
Deferred income taxes 16,367 31,000 63,174
(Gain) loss on disposal of property 182,807 98,988 -
(Increase) decrease in accounts receivable (487,100) 387,058 (381,412)
(Increase) decrease in prepaid expenses (219,737) (66,207) 172,045
(Increase) decrease in inventories 698,950 (481,209) 90,710
(Increase) decrease in other assets 27,923 3,494 (27,731)
Increase (decrease) in accounts payable (288,043) 243,058 334,835
Increase (decrease) in accrued liabilities 95,164 (151,299) 164,854
Increase (decrease) in income taxes payable 28,226 - (29,938)
----------- ----------- -----------
Total adjustments 1,058,213 816,605 1,048,947
----------- ----------- -----------
NET CASH PROVIDED BY OPERATING ACTIVITIES 419,614 922,324 1,606,275
----------- ----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES
Cash payments for the purchase of property (572,820) (1,319,203) (1,314,504)
Cash proceeds from the sale of property 10,000 90,100 -
Investment in European joint venture (1,005,929) (50,000) -
----------- ----------- -----------
NET CASH USED IN INVESTING ACTIVITIES (1,568,749) (1,279,103) (1,314,504)
----------- ----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of long-term debt 4,000,000 1,145,000 -
Proceeds from issuance of common stock 55,656 80,478 10,959
Net borrowings (repayment) on line of credit - (500,000) 500,000
Principal payments on long-term debt (2,133,974) (513,715) (445,560)
Dividends paid - - (250,000)
----------- ----------- -----------
NET CASH PROVIDED BY (USED IN)
FINANCING ACTIVITIES 1,921,682 211,763 (184,601)
----------- ----------- -----------
NET INCREASE (DECREASE) IN CASH 772,547 (145,016) 107,170
----------- ----------- -----------
CASH, BEGINNING OF YEAR 885,967 1,030,983 923,813
----------- ----------- -----------
CASH, END OF YEAR $ 1,658,514 $ 885,967 $ 1,030,983
=========== =========== ===========
Supplemental information
Cash paid for interest 200,451 153,190 125,651
Cash paid for income taxes 48,292 301,932 530,157
See Accompanying Notes to Consolidated Financial Statements.
PIEMONTE FOODS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
For the Fiscal Years Ended June 1, 1996, June 3, 1995 and May 28, 1994
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 $1,162,000 and $513,000 at
June 1, 1996 and June 3, 1995, 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 $170,000 and $160,000 at June 1, 1996 and June 3,
1995, respectively. The provisions for doubtful accounts were $76,000, $66,000
and $54,000 for 1996, 1995, and 1994, respectively.
The Company is engaged in the manufacture and distribution of Italian style food
products and the icing and distribution of cakes. 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. Sales to its largest single customer were in excess of 19%
of net sales. In the prior year, two customers constituted in excess of 10% of
net sales each.
Substantially all accounts receivable are pledged as collateral for the line of
credit and long-term debt (See notes 4 and 5).
Inventories
Inventories are stated at the lower of cost (first-in, first-out method) or
market. Inventories are composed of the following:
June 1, June 3,
1996 1995
Raw materials $ 478,351 $ 776,130
Finished goods 731,803 1,132,974
$1,210,154 $1,909,104
Substantially all inventory is pledged as collateral for the line of credit and
long-term debt (See notes 4 and 5).
PIEMONTE FOODS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
For the Fiscal Years Ended June 1, 1996, June 3, 1995 and May 28, 1994
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 4 and
5).
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:
Piemonte Foods of Indiana, Inc. $1,024,000 40 years
Origena, Inc. 74,000 25 years
Accumulated amortization at June 1, 1996 and June 3, 1995 was $328,000 and
$295,000, 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 8
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 1, 1996, June 3, 1995 and May 28, 1994
NOTE 2 - PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment consists of:
Estimated
Useful
1996 1995 Lives - Years
Land $ 25,000 $ 25,000
Buildings 1,972,157 1,825,566 4-30
Equipment 7,153,188 7,732,160 2-12
Vehicles 188,862 242,991 2-6
Furniture and fixtures 328,245 316,504 2-10
Leaseholds 536,190 536,190 3-10
Construction in progress 182,639 149,431
Total 10,386,281 10,827,842
Less Accumulated Depreciation and
Amortization 5,342,064 5,453,950
Net Property, Plant and
Equipment $5,044,217 $5,373,892
Depreciation and amortization of property, plant and equipment was $709,688,
$722,000 and $662,000 in 1996, 1995 and 1994, respectively.
Repairs and maintenance were $430,000, $354,000, and $338,000 in 1996, 1995 and
1994, respectively.
NOTE 3 - OPERATING LEASES
The Company leases its bakery manufacturing plants, distribution center,
automotive fleet, computer and various equipment under arrangements accounted
for as operating leases. Such leases expire at various times over the next eight
fiscal years. The approximate minimum annual commitments under these leases are
as follows:
Fiscal Year Amount
1997 $397,820
1998 371,268
1999 268,260
2000 260,160
2001 129,684
Thereafter 227,309
The Company leases certain transportation equipment (principally over-the-road
tractors and trailers) under cancelable leases for an approximate base rent of
$37,000 per month plus a charge for mileage and fuel.
Rent expense for operating leases totaled $862,000, $793,000 and $766,000 in
1996, 1995 and 1994, respectively.
PIEMONTE FOODS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
For the Fiscal Years Ended June 1, 1996, June 3, 1995 and May 28, 1994
NOTE 4 - NOTE PAYABLE - LINE OF CREDIT
A line of credit has been extended to the Company in the amount of $500,000. The
line is collateralized by all fixed assets, all accounts receivable and all
inventories and is guaranteed by the Company and its subsidiaries. The interest
rate charged is the 90 day LIBOR base rate plus 150 basis points. The line
expires October 31, 1996. It was not in use at June 1, 1996.
The line of credit and bank loans are cross collateralized and cross defaulted.
NOTE 5 - LONG-TERM DEBT AND DEBT COVENANT RESTRICTIONS
Long-term debt consists of:
1996 1995
Bank loans collateralized by all fixed assets, all accounts receivable and all
inventories; due in monthly installments indicated below plus interest at
the 90 day LIBOR base rate plus 150 basis points
$13,630 monthly, through November, 2001 $ - $ 1,076,485
$13,333 monthly, through October, 2000 1,546,667 262,600
$28,571 monthly, through October, 2000 2,285,714 627,270
3,832,381 1,966,355
Less current portion 502,857 609,131
LONG-TERM DEBT $ 3,329,524 $ 1,357,224
The loan agreement contains restrictive covenants which, among other things,
requires that the Company limit the funding of the Piemonte/Sabatasso European
Project Joint Venture to $1,000,000 (See Note 10), have a debt coverage ratio of
1.25 to 1 at June 1996, and have a minimum net worth of $6,600,000 at June 1,
1996. At June 1, 1996, the Company was in violation of the three covenants
described above. The bank has agreed to waive these requirements for the fiscal
year end testing in a letter dated August 21, 1996. Also, on August 23, 1996,
Piemonte and the bank executed an amendment to the loan agreement which provides
less stringent requirements for future periods. The Company, at August 23, 1996,
was not in violation of any of the amended covenants.
The lines of credit and bank loans are cross collateralized and cross defaulted.
Long-term debt maturities are as follows:
Fiscal Year Amount
1997 $502,857
1998 502,857
1999 502,857
2000 502,857
2001 502,857
Thereafter 815,239
PIEMONTE FOODS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
For the Fiscal Years Ended June 1, 1996, June 3, 1995 and May 28, 1994
NOTE 6 - 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 (benefit) for income taxes consists of:
1996 1995 1994
Current
Federal $(167,000) $ 88,000 $ 283,000
State 21,000 34,000 54,000
Total Current Provision (146,000) 122,000 337,000
Deferred (80,000) (21,000) 46,000
Provision (benefit) for income taxes $(226,000) $ 101,000 $ 383,000
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:
1996 1995 1994
1986 Tax Reform Act changes
Bad debt $ (4,000) $(12,400) $ 10,000
Inventory capitalization (1,000) 10,000 4,000
Deferred marketing (29,000) -- --
Depreciation for income tax return
in excess of book depreciation 17,000 31,000 27,000
Accruals (31,000) (7,000) --
State income tax (32,000) -- 5,000
AMT credit carry forward -- (42,600) --
Deferred income taxes $(80,000) $(21,000) 46,000
The deferred tax asset and deferred tax liability comprised the following at
June 1, 1996:
Deferred tax asset:
Allowance for doubtful accounts $ 65,000
Inventory 8,000
Deferred costs 29,000
Accruals 3,000
Net operating loss and tax credit carryforward 74,000
179,000
Valuation allowance (143,000)
Net deferred tax asset $ 36,000
Deferred tax liability:
Depreciation $ 437,000
PIEMONTE FOODS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
For the Fiscal Years Ended June 1, 1996, June 3, 1995 and May 28, 1994
NOTE 6 - INCOME TAXES (Continued)
The income tax provision differs from the amount computed by applying the
statutory rate as follows:
1996 1995 1994
Tax expense (benefit) computed at statutory
federal income tax rate - 34% $(217,000) $ 70,000 $ 300,000
Increases (reductions) in taxes resulting from:
Benefit (cost) of graduated tax rates 20,000 (11,000) (45,000)
Foreign loss not taxable in U.S. (89,000) -- --
Amortization of the excess of cost
over fair value of net assets
acquired and meals and entertainment
not deductible for tax purposes 46,000 26,000 16,000
State income taxes, net of
federal benefit 14,000 16,000 132,000
Other items:
Cumulative effect of change in
accounting principle -- -- (20,000)
Provision (benefit) for income taxes $(226,000) $ 101,000 $ 383,000
NOTE 7 - 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 10% of annual
compensation to the plan. In addition, the Company contributes 50% of such
employee contributions up to 6% of his compensation. Company contributions
totaled approximately $68,000, $54,000 and $53,000 in 1996, 1995 and 1994,
respectively.
NOTE 8 - 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 1, 1996, June 3, 1995 and May 28, 1994
NOTE 8 - STOCK OPTIONS OUTSTANDING (Continued)
At June 1, 1996, options granted and outstanding are as follows:
Options Date Exercise Price Options Expiration Options
Granted Granted Per Share Exercised Date Outstanding
79,380 Dec., 1991 $ 2.04 11,025 Dec., 1996 68,355
22,050 Jan., 1993 2.49 None Oct., 2002 22,050
17,850 Nov., 1993 8.33 None Nov., 2003 17,850
107,625 Apr., 1994 6.90 None Apr., 2004 107,625
5,000 Oct., 1994 6.75 None Oct., 2004 5,000
6,000 Oct., 1995 4.13 None Oct., 2005 6,000
26,500 Jan., 1996 4.52 None Jan., 2006 26,500
NOTE 9 - RECLASSIFICATION
Certain accounts have been reclassified in prior years to conform to the
accounting presentation for the year ended June 1, 1996 relating to cost of
sales and selling, general and administrative expenses.
NOTE 10 - INVESTMENT IN EUROPEAN JOINT VENTURE
Piemonte Foods initiated a 50/50 joint venture with Sabatasso Pizza Products in
Breda, Holland, forming a company named Piemonte Beheer MIJ B.V. in 1994.
Sabatasso is an established pizza topper with sales throughout Europe. The joint
venture will produce pizza crusts for Sabatasso as well as other European
toppers. It was financed through bank loans of 7,050 thousand guilders
(approximately $4,230,000) and investments by both partners of one million
dollars each this fiscal year. This is in addition to $50,000 investments made
by each joint venture partner in fiscal year 1995. The Company is jointly and
severally liable for the joint venture debt.
Start-up losses recorded by the joint venture were 236 thousand guilders through
calendar year 1995 (the joint venture's fiscal year,) and 557 thousand guilders
through the first five months of 1996 (Piemonte's fiscal year-end). Piemonte's
one half of the total loss in dollars is $261,000. Start-up costs that are
recognized as operational losses in Holland are typically capitalized in the
United States. Piemonte accounts for its investment in the joint venture using
the equity method.
Piemonte Foods has advanced an additional $228,000 to Piemonte Beheer MIJ B.V.
since June 1, 1996. Piemonte Beheer MIJ B.V. does not anticipate a requirement
for any additional funding.
PIEMONTE FOODS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
For the Fiscal Years Ended June 1, 1996, June 3, 1995 and May 28, 1994
NOTE 10 - INVESTMENT IN EUROPEAN JOINT VENTURE (Continued)
The following is a summary of the financial position and results of operations
of Piemonte Beheer MIJ B.V.:
($ Thousands)
------------------
Current assets $ 168
Property, plant and equipment 6,277
Other assets 12
------------------
$ 6,457
------------------
Current liabilities $ 1,979
Long-term debt 2,938
Stockholders' equity 1,540
------------------
$ 6,457
------------------
Sales $ 110
Net loss $ (522)
PIEMONTE FOODS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
For the Fiscal Years Ended June 1, 1996, June 3, 1995 and May 28, 1994
NOTE 11 - UNAUDITED QUARTERLY FINANCIAL DATA, ($ IN THOUSANDS, EXCEPT PER
SHARE AMOUNTS)
1st Quarter 2nd Quarter
1996 1995 1996 1995
Net Sales $ 6,642 6,569 7,984 8,533
Operating Income (Loss) $ (338) 4 139 271
Net Income (Loss) $ (229) (1) 71 130
Per Share Net Income (Loss) $ (0.15) (0.00) 0.05 0.09
Bid Price Common Stock
High $ 5 3/4 9 1/4 6 9 1/4
Low $ 4 7 3/4 4 6 1/2
3rd Quarter 4th Quarter
1996 1995 1996 1995
Net Sales $ 8,877 7,331 7,645 8,050
Operating Income (Loss) $ 278 112 (378) (17)
Net Income (Loss) $ 150 55 (632) (78)
Per Share Net Income (Loss) $ 0.10 0.04 (0.42) (0.06)
Bid Price Common Stock
High $ 5 1/4 7 3/4 5 1/8 6 1/2
Low $ 4 1/2 6 1/4 4 1/2 4 1/2
PIEMONTE FOODS, INC. AND SUBSIDIARIES
Schedule II - Valuation and Qualifying Accounts
For the Fiscal Years Ended June 1, 1996, June 3, 1995 and May 28, 1994
Balance at Charged to Credited to Balance at
beginning of cost and other end
Description period expenses accounts Deductions of period
--------------------------------------------------------------------------------
1996
Allowance for doubtful
accounts $ 160,000 76,000 66,000 170,000
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
Balance at Charged to Credited to Balance at
beginning of cost and other end
Description period expenses accounts Deductions of period
--------------------------------------------------------------------------------
1996
Valuation account - deferred
tax assets $ (127,000) 21,000 (148,000)
1995
Valuation account - deferred
tax assets $ (127,000) (127,000)
1994
Valuation account - deferred
tax assets $ 127,000 (127,000)
ITEM 9. CHANGES IN AND 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 1,
1996 is incorporated herein by reference.
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
EXECUTIVE OFFICERS OF THE REGISTRANT
The 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 63
Virgil L. Clark President, CEO & Director 57
T. Patrick Costello Senior Vice-President & 53
Director
Roy E. Gogel Chief Financial Officer 47
David B. Ward Secretary 55
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. Prior to1992, Mr. Clark was Chairman of M &
S Chemicals, Inc. in Greenville, South Carolina.
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.
Roy E. Gogel joined the Company in 1996 as Vice-President, Chief
Financial Officer, & Treasurer. Prior to 1996, he was Vice-President/Chief
Financial Officer of Sonopress, Inc. from 1994-1995, and Corporate Controller,
Ampex, 1993-1994. Prior to 1993 he was with Mobil Corp., most recently as a
Regional Controller.
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.
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 17, 1996.
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
Mr. Van der Sprong became a Director in October, 1995. As Co-Managing
Director of the Joint Venture in Holland, he continued purchasing pizza crusts
as he had previously from the Company and from Origena prior to its acquisition
by the Company. During the joint venture's start-up and following his becoming
a director but before the business year-end, the Company sold $396 thousand of
crusts to Mr. Van der Sprong's company, Sabatasso Pizza Products B.V.
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-1
Consolidated Balance Sheets II F-2
Consolidated Statements of Stockholders' Equity II F-4
Consolidated Statements of Income 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:
II. Valuation and Qualifying Accounts II-F-16
Schedules I, III, IV, V, VI, VII, VIII, IX, X, XI, XII, XIII
have been omitted because they are either not required or
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 1, 1996.
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 August 30, 1996
By s/Roy E. Gogel
Roy E. Gogel, VP/CFO
Pursuant to the requirement 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 _____________________
Virgil L. Clark, President, CEO Date
and Director
s/T. Patrick Costello _____________________
T. Patrick Costello, Sr. Vice Date
President and Director
s/Ronald T. Huth _____________________
Ronald T. Huth, Chairman and Date
Director
s/William P. Mahoney _____________________
William P. Mahoney, Director Date
s/Richard J. Stoner _____________________
Richard J. Stoner, Director Date
s/Carel Van der Sprong _____________________
Carel Van der Sprong 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 were filed as an exhibit
to the Company's Form 10-K for the fiscal year ended
May 30, 1987, are 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,
SC 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.
(l) 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 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 , which was filed as an exhibit to the
Company's Form 10-K for the fiscal year ended June 3,
1995, is hereby incorporated by reference.
(q) The Employment Agreement dated as of April 22, 1994,
between the Company and Virgil L. Clark was filed as
an exhibit to the Company's Form 10-K for the fiscal
year ended June 3, 1995, is hereby incorporated by
reference.
(r) The Loan Agreement dated January 4, 1996, between
First Union National Bank of South Carolina and the
Company, is attached.
(s) The Amendment to the Loan Agreement, dated July 18,
1996, relating to the Loan Agreement dated January 4,
1996, between First Union National Bank of
South Carolina and the Company, is attached.
(t) The Amendment to the Loan Agreement, dated August 23,
1996, relating to the Loan Agreement dated January 4,
1996, between First Union National Bank of South
Carolina and the Company is attached.
(u) The Lease Agreement dated as of March 26, 1996,
between Nashville International Airport and the
Company, is attached.
21 Subsidiaries of the registrant
27 Financial data schedule