1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q/A AMENDMENT NO. 1 TO THE QUARTERLY REPORT [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended November 30, 2000 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ____________ to ____________ Commission File No. 0-11488 Penford Corporation - -------------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) Washington 91-1221360 - -------------------------------------------------------------------------------- (State of Incorporation) (I.R.S. Employer Identification No.) 777-108th Avenue N.E., Suite 2390, Bellevue, WA 98004-5193 - -------------------------------------------------------------------------------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (425) 462-6000 Indicate by a 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 [ ] Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of January 5, 2001. Class Outstanding ----- ----------- Common stock, par value $1.00 7,457,347 1 2 PENFORD CORPORATION AND SUBSIDIARIES INDEX Page No. -------- PART I - FINANCIAL INFORMATION Item 1 - Financial Statements Condensed Consolidated Balance Sheets 3 November 30, 2000 (restated) and August 31, 2000 Condensed Consolidated Statements of Income 4 Three Months Ended November 30, 2000 (restated) and November 30, 1999 Condensed Consolidated Statements of Cash Flow 5 Three Months Ended November 30, 2000 (restated) and November 30, 1999 Notes to Condensed Consolidated Financial Statements 6-12 Item 2 - Management's Discussion and Analysis of 13-16 Financial Condition and Results of Operations Item 3 - Quantitative and Qualitative Disclosures 17 About Market Risk PART II - OTHER INFORMATION Item 1 - Legal Proceedings 18 Item 2 - Changes in Securities 18 Item 3 - Defaults Upon Senior Securities 18 Item 4 - Submission of Matters to a Vote of Security Holders 18 Item 5 - Other Information 18 Item 6 - Exhibits and Reports on Form 8-K 18-21 SIGNATURES 22 2 3 PART I - FINANCIAL INFORMATION Item 1 Financial Statements PENFORD CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (Dollars in thousands) November 30, 2000 (as restated - See Note 9) August 31, 2000 ----------------- --------------- ASSETS Current assets: Cash and cash equivalents $ 37 $ -- Trade accounts receivable 29,052 17,530 Inventories: Raw materials and other 10,182 3,016 Work in progress 420 502 Finished goods 13,108 6,701 --------- --------- 23,710 10,219 Prepaid expenses and other 7,089 5,580 --------- --------- Total current assets 59,888 33,329 Net property, plant and equipment 143,397 114,848 Deferred income taxes 11,467 11,466 Restricted cash value of life insurance 12,449 12,330 Other assets 5,504 3,650 Goodwill, net 15,356 -- --------- --------- Total assets $ 248,061 $ 175,623 ========= ========= LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Bank overdraft, net $ -- $ 313 Accounts payable 16,673 10,068 Accrued liabilities 7,241 8,305 Current portion of long-term debt 10,925 2,857 --------- --------- Total current liabilities 34,839 21,543 Long-term debt 105,672 47,824 Other postretirement benefits 10,867 10,805 Deferred income taxes 22,438 21,048 Other liabilities 7,970 6,539 Shareholders' equity: Common stock 9,435 9,392 Additional paid-in capital 23,630 23,129 Retained earnings 67,901 68,100 Treasury stock (32,757) (32,757) Accumulated other comprehensive income (loss) (1,934) -- --------- --------- Total shareholders' equity 66,275 67,864 --------- --------- Total liabilities and shareholders' equity $ 248,061 $ 175,623 ========= ========= See accompanying notes to condensed consolidated financial statements. 3 4 PENFORD CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Dollars in thousands except per share data) Three Months Ended November 30 ------------------------------ 2000 (as restated - See Note 9) 1999 -------------- ----------- Sales $ 46,853 $ 40,553 Cost of sales 35,900 29,487 ----------- ----------- Gross margin 10,953 11,066 Operating expenses 5,113 4,595 Research and development 1,650 1,372 ----------- ----------- Income from operations 4,190 5,099 Interest expense (2,491) (1,276) ----------- ----------- Income before taxes and extraordinary item 1,699 3,823 Income taxes 563 1,338 ----------- ----------- Income before extraordinary item 1,136 2,485 Extraordinary loss on early extinguishment of debt, net of applicable income taxes of $478 (888) -- ----------- ----------- Net income $ 248 $ 2,485 =========== =========== Weighted average common shares and equivalents outstanding, assuming dilution 7,660,604 7,709,616 Earnings per common share: Income before extraordinary item $ 0.15 $ 0.33 =========== =========== Extraordinary loss $ (0.12) $ -- =========== =========== Net income $ 0.03 $ 0.33 =========== =========== Earnings per share, assuming dilution: Income before extraordinary item $ 0.15 $ 0.32 =========== =========== Extraordinary item $ (0.12) $ -- =========== =========== Net income $ 0.03 $ 0.32 =========== =========== Dividends declared per common share $ 0.06 $ 0.05 =========== =========== See accompanying notes to condensed consolidated financial statements. 4 5 PENFORD CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW (Dollars in thousands) Three Months Ended November 30 ------------------------------ 2000 (as restated - See Note 9) 1999 -------------- --------- Operating Activities: Net Income $ 248 $ 2,485 Adjustments to reconcile net income to net cash from operations: Loss on early extinguishment of debt 888 -- Depreciation 4,272 3,311 Deferred income taxes 237 (141) Change in operating assets and liabilities excluding impact of Penford Australia Limited acquisition: Trade receivables (1,948) (2,521) Inventories (1,081) 12 Accounts payable, prepaids and other (903) 1,310 --------- --------- Net cash from operating activities 1,713 4,456 Investing Activities: Additions to property, plant and equipment, net (3,053) (3,741) Acquisition of Penford Australia Limited (55,886) -- Other 306 481 --------- --------- Net cash used by investing activities (58,633) (3,260) Financing Activities: Proceeds from revolving line of credit 23,163 13,795 Payments on revolving line of credit (17,806) (11,435) Proceeds from long-term debt 104,648 -- Payments on long-term debt (50,571) (3,067) Payment of fees for early extinguishment of debt (1,366) -- Exercise of stock options 474 30 Purchase of treasury stock -- (209) Payment of dividends (891) (369) --------- --------- Net cash provided (used) by financing activities 57,651 (1,255) Effect of exchange rate changes on cash and cash equivalents (381) -- --------- --------- Net increase (decrease) in cash and equivalents 350 (59) Cash and cash equivalents (bank overdraft) at beginning of period (313) 15 --------- --------- Cash and cash equivalents (bank overdraft) at end of period $ 37 $ (44) ========= ========= See accompanying notes to condensed consolidated financial statements. 5 6 PENFORD CORPORATION AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 1. BUSINESS Penford Corporation ("Penford" or the "Company") is in the business of developing, manufacturing and marketing specialty carbohydrate-based ingredient systems for various applications, including papermaking, textiles and food products. The Company operates manufacturing facilities in the United States, Australia, and New Zealand. Penford's products provide excellent binding and film-forming characteristics that make customers' products better through natural, convenient and cost effective solutions. Sales of the Company's products are generated using a combination of direct sales and distributor agreements. The Company has extensive research and development capabilities, which are used in understanding the complex chemistry of carbohydrate-based materials and their application. In addition, the Company has specialty processing capabilities for a variety of modified starches, all of which have similar production methods. 2. BASIS OF PRESENTATION The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation of the interim period presented have been included. The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. Operating results for the three month period ended November 30, 2000 are not necessarily indicative of the results that may be expected for the year ending August 31, 2001. For further information, refer to the consolidated financial statements and footnotes thereto included in Penford Corporation's annual report on Form 10-K for the fiscal year ended August 31, 2000. 6 7 3. RECENT ACCOUNTING DEVELOPMENTS Effective September 1, 2000, the Company adopted Statement of Financial Accounting Standards ("SFAS") No. 133, "Accounting for Derivative Instruments and Hedging Activities." SFAS No. 133 establishes standards for recognition and measurement of derivatives and hedging activities. As a result of this adoption, the Company recorded in the first quarter of fiscal 2001 the cumulative effect of change in accounting principle to other comprehensive income of $0.3 million ($0.2 million after-tax) for derivatives which hedge the variable cash flows of certain forecasted transactions. The fair value of these derivative instruments was previously classified in inventory. 4. ACQUISITION OF PENFORD AUSTRALIA LIMITED On September 29, 2000, Penford Corporation completed its acquisition of Starch Australasia Limited from Goodman Fielder Limited for $54.2 million (USD) in cash, plus costs incurred directly related to the acquisition of approximately $1.7 million (USD), including accounting, financial consulting, taxation, legal and other due diligence efforts. Starch Australasia Limited, renamed Penford Australia Limited ("Penford Australia"), is Australia's sole producer of corn starch products and a world leader in the research, development and commercialization of novel starch-based products. Penford Australia manufactures products used to enhance the functionality of packaged food products, as well as products used in the mining and paper industries. Its operations include three manufacturing facilities, two in Australia and one in New Zealand, for processing specialty corn starches and wheat related products. The acquisition was recorded using the purchase method of accounting. Accordingly, a portion of the purchase price was allocated to net tangible and intangible assets acquired based on their estimated fair values. The balance of the purchase price was recorded as goodwill, which is being amortized over a twenty year period. Two months of Penford Australia's results of operations, from the September 29, 2000 date of acquisition, are included in the consolidated financial statements for the fiscal quarter ended November 30, 2000. 7 8 The following unaudited pro forma financial information presents the combined results of operations of the Company and Penford Australia, as if the acquisition had occurred on September 1, 1999. The unaudited pro forma financial information does not necessarily reflect the results of operations that would have occurred had the Company and Penford Australia constituted a single entity during such periods (dollars in thousands except per share data). Three Months Ended November 30 ------------------------ 2000 1999 -------- -------- Sales $ 53,484 $ 59,671 Net income $ 1,281 $ 2,607 Net income per share Basic $ .17 $ .35 ======== ======== Diluted $ .17 $ .34 ======== ======== 5. FINANCING ACTIVITIES On September 29, 2000, the Company obtained interim financing to finance the acquisition of Penford Australia and to replace its existing credit facilities. As a result, except for a $5 million uncommitted line of credit that remained in place, all outstanding debt as of August 31, 2000, was replaced by a $120 million bridge loan with a syndicate of banks, consisting of the same three banks responsible for the previous $75 million unsecured credit facility. Borrowings under the bridge loan facility totaled $109.5 million. Of the previously existing facilities replaced by the bridge loan facility, $18.6 million was principal repaid to holders of private placement debt. Terms of the private placements also required a prepayment fee of $1.4 million, which has been presented as an extraordinary item, net of the related tax benefit of $478,000. On November 15, 2000, a new $130 million credit facility was completed with the aforementioned syndicate of banks, including the addition of an Australian bank. The new credit facility consists of various agreements with $65 million in term loans and $65 million of revolving lines of credit. The revolving lines of credit expire on October 31, 2003, and the term loans expire on October 31, 2005. Borrowing rates available to the Company under the entire credit facility are based on the LIBOR or prime rate depending on the selection of borrowing options. All of Penford's assets secure the credit facility and the new agreements include, among other terms, financial covenants with limitations on indebtedness, minimum net worth and maintenance of certain leverage, interest and fixed charge coverage ratios. All of the financial covenants are similar to restrictions on the existing debt as of August 31, 2000. 8 9 6. COMPREHENSIVE INCOME SFAS No. 130 establishes the standards for reporting and displaying comprehensive income and its components in the financial statements. The components of comprehensive income (loss) for the three months ended November 30, 2000 and 1999 are as follows (Dollars in thousands): Three Months Ended November 30 -------------------------- 2000 (as restated) 1999 ------------- ------- Net income $ 248 $ 2,485 Cumulative effect of change in accounting principle - FAS 133 (Note 3) 189 -- Foreign currency translation adjustments (2,123) -- ------- ------- Comprehensive income (loss) $(1,686) $ 2,485 ======= ======= The foreign currency translation adjustment reflects the translation of the Company's investment in its Australian operations to U.S. dollars from Australian dollars. The foreign currency exchange rates as of September 29, 2000, the date of acquisition, and November 30, 2000 were $0.542 and $0.521 U.S. dollars to the Australian dollar, respectively. 9 10 7. SEGMENT REPORTING The Company operates in one business segment: developing, manufacturing, and marketing specialty carbohydrate-based ingredient systems for various applications. Information about the Company's operations by geographic area, including its operations in North America and its recently acquired business in Australia and New Zealand, follows (Dollars in thousands): Three Months Ended November 30 ------------------------- 2000 (as restated) 1999 ------------- -------- Sales - North America $ 37,409 $ 40,553 - Australia/New Zealand 9,444 -- -------- -------- $ 46,853 $ 40,553 ======== ======== Income before extraordinary item - North America $ 793 $ 2,485 - Australia/New Zealand 343 -- -------- -------- $ 1,136 $ 2,485 ======== ======== November 30, 2000 August 31, (as restated) 2000 ------------- ---------- Total Assets - North America $177,901 $175,623 - Australia/New Zealand 70,160 -- -------- -------- $248,061 $175,623 ======== ======== 10 11 8. EARNINGS PER COMMON SHARE The following table presents the computation of basic and diluted earnings per share (Dollars in thousands except per share data): Three Months Ended November 30 -------------------------- 2000 1999 ---------- ---------- Income before extraordinary item $ 1,136 $ 2,485 ========== ========== Weighted average common shares outstanding 7,434,047 7,424,711 Net effect of dilutive stock options 226,557 284,905 ---------- ---------- Weighted average common shares outstanding, assuming dilution 7,660,604 7,709,616 ========== ========== Earnings per common share $ 0.15 $ 0.33 ========== ========== Earnings per common share, assuming dilution $ 0.15 $ 0.32 ========== ========== Basic earnings per share reflects only the weighted average common shares outstanding. Diluted earnings per share reflects weighted average common shares outstanding and the effect of any dilutive common stock equivalent shares. 11 12 9. RESTATEMENT Upon further analysis of the costs incurred at the acquisition of Penford Australia, company management has reclassified the expenses related to financing as loan origination fees and the cost of early extinguishment of debt. The financial statements for the three months ended November 30, 2000 have been restated to reflect these changes. The restatement does not affect previously reported net cash flow for the period. The material effects of this restatement on previously reported consolidated financials are as follows (amounts in thousands except per share data): Three Months Ended November 30, 2000 ------------------------ As previously reported Restated ------------- -------- Statement of Operations: Extraordinary loss on early extinguishment of debt, net of applicable income taxes of $478 $ -- $ (888) Net income 1,205 248 Earnings per common share 0.16 0.03 Extraordinary loss per common share -- (0.12) November 30, 2000 ------------------------ As previously reported Restated ------------- -------- Balance Sheet: Goodwill, net $ 18,557 $ 15,356 Other assets (includes deferred loan fees) 3,801 5,504 Accrued liabilities (includes income taxes payable) 7,782 7,241 Retained earnings 68,858 67,901 12 13 Item 2 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RECENT ACQUISITION On September 29, 2000, Penford Corporation completed its acquisition of Starch Australasia Limited, renamed Penford Australia Limited ("Penford Australia"), from Goodman Fielder Limited for $54.2 million (USD) in cash, plus costs of $1.7 million directly related to the acquisition. Two months of Penford Australia's results of operations are included in the Company's condensed consolidated financial statements for the quarter ended November 30, 2000. Penford Australia is Australia's sole producer of corn starch products and a world leader in the research, development and commercialization of novel starch-based products. Penford Australia manufactures products used to enhance the functionality of packaged food products, as well as products used in the mining and paper industries. Its operations include three manufacturing facilities, two in Australia and one in New Zealand, for processing specialty corn starches and wheat related products. RESULTS OF CONTINUING OPERATIONS In the three months ended November 30, 2000, Penford Corporation's consolidated sales increased $6.3 million, or 15.5%, to $46.9 million. The increase from $40.6 million in the prior year is primarily due to the acquisition of Penford Australia and higher sales volume of the Company's specialty starch-based ingredient systems for the food industry. However, sales volumes for paper customers decreased approximately 8.3% caused by a softened demand in the North American paper industry suppressing overall sales growth. Sales revenue and volumes of specialty potato-based food starches increased 8.8% and 11.8%, respectively, in the first quarter of fiscal 2001 ending November 30, 2000 over the same period a year ago. The increase over last year's strong quarter was primarily due to solid performance in both coating and processed meat applications. Gross margin for the three months ended November 30, 2000 was 23.4% compared to 27.3% for the corresponding period a year ago. Total gross margin for the three months ended November 30, 2000 was $11.0 million compared to $11.1 million for the corresponding period a year ago. Total gross margin dollars in the first three months of fiscal 2001 remained consistent with the same prior year period primarily due to higher natural gas costs in North America which significantly impacted manufacturing costs, being offset by the addition of the higher margin Penford Australia operation and increased demand for specialty food ingredients. The decrease in gross margin percentage was primarily due to higher natural gas costs, and to a lesser extent, the inclusion of Penford Australia. Operating expenses in the first quarter of $5.1 million were approximately $518,000 higher compared to the same quarter in the prior year. Research and development expenses increased $278,000 in the three months ended November 30, 2000 over the same period a 13 14 year ago. The increases in operating and research and development expenses are primarily due to the inclusion of Penford Australia in the Company's overall results. Net interest expense was $2.5 million for the three months ended November 30, 2000 compared to $1.3 million in the same period in fiscal 2000. The increase is attributed to higher debt balances as a result of the acquisition of Penford Australia. The effective tax rate on income before extraordinary items for the first quarter of fiscal 2001 and 2000 was 33.1% and 35.0%, respectively. The slightly lower effective tax rate in the current fiscal year reflects Australia's current statutory tax rate of 34%, decreasing to 30% in July 2001. Income before extraordinary item was $1.1 million, or $0.15 per common share, assuming dilution for the three months ended November 30, 2000, compared to net income of $2.5 million, or $0.32 per common share, assuming dilution for the corresponding period a year ago. During the first quarter of fiscal 2001, the Company prepaid its private placement debt facilities in connection with a comprehensive refinancing to fund the acquisition of Penford Australia. The prepayment of the private placements required prepayment fees, which resulted in a loss on early extinguishment of debt of $1.4 million, which is presented as an extraordinary item, net of the related tax benefit of $478,000. LIQUIDITY AND CAPITAL RESOURCES In connection with the acquisition of Penford Australia on September 29, 2000, the Company obtained interim financing to replace its existing credit facilities and to fund the acquisition. As a result, except for a $5 million uncommitted line of credit that remained in place, all outstanding debt as of August 31, 2000, was replaced by a $120 million bridge loan with a syndicate of banks, consisting of the same three banks responsible for the previous $75 million unsecured credit facility. Borrowings under this interim bridge loan facility totaled $109.5 million. Of the previous existing credit facilities replaced by this interim financing, $18.6 million was principal repaid to holders of private placement debt. Terms of the private placements also required a prepayment fee of $1.4 million, which was paid on September 29, 2000. Subsequent to the consummation of the purchase transaction, a new $130 million credit facility was completed on November 15, 2000, with the aforementioned syndicate of banks, including the addition of an Australian bank. The new credit facility consists of various agreements with $65 million in term loans and $65 million of revolving lines of credit. The revolving lines of credit expire on October 31, 2003, and the term loans expire on October 31, 2005. Borrowing rates available to the Company under the entire credit facility are based on the LIBOR or prime rate depending on the selection of borrowing options. All of Penford's assets secure the credit facility and the new agreements include, among other terms, financial covenants with limitations on indebtedness, minimum net worth and maintenance of certain leverage, interest and fixed charge coverage ratios. All of the financial covenants are similar to restrictions on the existing debt as of August 31, 2000. 14 15 At November 30, 2000, Penford had working capital of $25.0 million and $46.5 million outstanding under the $65 million revolving line of credit. The Company also has a $5 million uncommitted line of credit under which there was $1.3 million outstanding. In the first quarter of fiscal 2001, the Company used its debt proceeds and operating cash flow to finance the purchase of Penford Australia and other capital expenditures. Cash flow from operations for the quarter ended November 30, 2000 was $1.7 million compared to $4.5 million in the corresponding quarter of the prior year. The decrease in operating cash flow is due to lower quarterly earnings and fluctuations in the components of working capital. Additions to property, plant and equipment during the three months ended November 30, 2000 were $3.1 million. First quarter additions were primarily for various improvements at the Company's industrial facility in Cedar Rapids, Iowa and equipment additions and improvements at all of the Company's food-grade manufacturing facilities. The Company began paying a quarterly cash dividend of $0.05 per share in 1992 and has continued to pay quarterly dividends ever since. On April 3, 2000, the Board of Directors approved an increase in the quarterly cash dividend to $0.06 per share. During the quarter ended November 30, 2000, the Company made payments for two quarterly dividends due to timing of the distributions. The Board of Directors has authorized a stock repurchase program for the purchase of up to 500,000 shares of the outstanding common stock of the Company. Repurchases under the program to date have totaled 281,300 shares for $4.3 million, although the Company has not purchased any of its common stock during the first quarter of fiscal 2001. FORWARD-LOOKING STATEMENTS This report contains forward-looking statements concerning the performance and results of the Company. There are a variety of factors which could cause actual events or results to differ materially from those projected in the forward-looking statements, including, without limitation, competition; the possibility of interruption of business activities due to equipment problems, accidents, strikes, weather or other factors; product development risk; changes in corn and other raw material prices; changes in general economic conditions or developments with respect to specific industries or customers affecting demand for the Company's products including unfavorable shifts in product mix; unanticipated costs, expenses or third party claims; the risk that results may be affected by construction delays, cost overruns, technical difficulties, nonperformance by contractors or changes in capital improvement project requirements or specifications; interest rate and energy cost volatility; foreign currency exchange rate fluctuations; or other unforeseen developments in the industries in which the Company operates. Accordingly, there can be no assurance that future activities or results will be as anticipated. Forward-looking statements are based on the estimates and opinions of management on the date the statements are made. The Company assumes no obligation to update any forward-looking statements if circumstances or management's estimates or opinions should change. 15 16 Additional information which could affect the Company's financial results is included in the Company's 2000 Annual Report to Shareholders and its Form 10-K for the fiscal year ended August 31, 2000 on file with the Securities and Exchange Commission. 16 17 Item 3 QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK MARKET RISK SENSITIVE INSTRUMENTS AND POSITIONS The market risk associated with the Company's market risk sensitive instruments is the potential loss from adverse changes in interest rates, foreign currency exchange rates, and commodities prices. The Company is unaware of any material changes to the market risk disclosures referred to in the Company's Report on Form 10-K for the year ended August 31, 2000, other than the increase in the amount of borrowings undertaken principally to finance the acquisition of Penford Australia. 17 18 PART II - OTHER INFORMATION Item 1 Legal Proceedings A complaint was filed in late November 1999 against Penford in the United States District Court for the District of Idaho, alleging various violations of the Federal Clean Air Act, as well as claims for trespass and nuisance by alleged emissions from Penford's Idaho Falls starch processing plant. The subject of the complaint involves alleged excessive starch emissions that occurred in 1996 and 1997, which were previously disclosed by the Company, and certain other alleged violations relating to the plant. The complaint sought civil penalties, together with private damages. By agreement of the Parties, the Federal Clean Air Act claims have been dismissed with prejudice. Non-binding mediation for the remaining trespass and nuisance claims was tentatively scheduled for February, 2001. In December 2000, the plaintiffs filed an amended complaint adding several new plaintiffs, adding claims for emotional distress and outrage, and purporting to re-assert the Clean Air Act Claims on behalf of the new plaintiffs. Penford is currently preparing papers seeking to dismiss the Clean Air Act claims. Item 2 Changes in Securities Not applicable Item 3 Defaults Upon Senior Securities Not applicable Item 4 Submission of Matters to a Vote of Security Holders Not applicable Item 5 Other Information Not applicable Item 6 Exhibits and Reports on Form 8-K. (a) Exhibits: (2.1) Starch Australasia Share Sale Agreement completed as of September 29, 2000 among Penford Holdings Pty Limited, a wholly owned subsidiary of Registrant, and Goodman Fielder Limited (filed as an exhibit to Registrant's Form 8-K/A dated September 29, 2000) (3.1) Restated Articles of Incorporation of Registrant (filed as an exhibit to Registrant's Form 10-K for fiscal year ended August 31, 1995) (3.2) Articles of Amendment to Restated Articles of Incorporation of Registrant (filed as an exhibit to Registrant's Form 10-K for fiscal year ended August 31, 1997) 18 19 (3.3) Bylaws of Registrant as amended and restated as of October 20, 1997 (filed as an exhibit to Registrant's Form 10-K for fiscal year ended August 31, 1997) (4.1) Amended and Restated Rights Agreement dated as of April 30, 1997 (filed as an exhibit to Registrant's Amendment to Registration Statement on Form 8-A/A dated May 5, 1997) (10.1) Penford Corporation Supplemental Executive Retirement Plan, dated March 19, 1990 (filed as an exhibit to Registrant's Form 10-K for the fiscal year ended August 31, 1991) (10.2) Penford Corporation Supplemental Survivor Benefit Plan, dated January 15, 1991 (filed as an exhibit to Registrant's Form 10-K for the fiscal year ended August 31, 1991) (10.3) Penford Corporation Deferred Compensation Plan, dated January 15, 1991 (filed as an exhibit to Registrant's Form 10-K for the fiscal year ended August 31, 1991) (10.4) Change of Control Agreements between Penford Corporation and Messrs. Cook, Horn, Keeley, and Kunerth (a representative copy of these agreements is filed as an exhibit to Registrant's Form 10-K for the fiscal year ended August 31, 1995) (10.5) Penford Corporation 1993 Non-Employee Director Restricted Stock Plan (filed as an exhibit to Registrant's Form 10-Q for the quarter ended November 30, 1993) (10.6) Penford Corporation 1994 Stock Option Plan as amended and restated as of January 21, 1997 (filed on Form S-8 dated March 17, 1997) (10.7) Penford Corporation Stock Option Plan for Non-Employee Directors (filed as an exhibit to the Registrant's Form 10-Q for the quarter ended May 31, 1996) (10.8) Separation Agreement dated as of July 31, 1998 between Registrant and Penwest Pharmaceuticals Co. (filed as an exhibit to Registrant's Form 8-K dated August 31, 1998) (10.9) Services Agreement dated as of July 31, 1998 between Registrant and Penwest Pharmaceuticals Co. (filed as an exhibit to Registrant's Form 8-K dated August 31, 1998) (10.10) Employee Benefits Agreement dated as of July 31, 1998 between Registrant and Penwest Pharmaceuticals Co. (filed as an exhibit to Registrant's Form 8-K dated August 31, 1998) (10.11) Tax Allocation Agreement dated as of July 31, 1998 between Registrant and Penwest Pharmaceuticals Co. (filed as an exhibit to Registrant's Form 8-K dated August 31, 1998) (10.12) Excipient Supply Agreement dated as of July 31, 1998 between Registrant and Penwest Pharmaceuticals Co. (filed as an exhibit to Registrant's Form 8-K dated August 31, 1998) 19 20 (10.13) Restatement and Exchange Agreement amending the Senior Note Agreement among Penford Corporation as Borrower and Mutual of Omaha and Affiliates as lenders, dated as of August 1, 1998 (filed as an exhibit to Registrant's Form 10-K for the fiscal year ended August 31, 1998) (10.14) Guaranty Agreement dated as of August 1, 1998 by Penford Products Co., a wholly-owned subsidiary of Registrant, of the Restatement and Exchange Agreement among Registrant and Mutual of Omaha and Affiliates (filed as an exhibit to Registrant's Form 10-K for the fiscal year ended August 31, 1998) (10.15) Restatement and Exchange Agreement amending the Senior Note Agreement among Penford Corporation as Borrower, and Principal Mutual Life Insurance Company and TMG Life Insurance Company as lenders, dated as of August 1, 1998 (filed as an exhibit to Registrant's Form 10-K for the fiscal year ended August 31, 1998) (10.16) Guaranty Agreement dated as of August 1, 1998 by Penford Products Co., a wholly owned subsidiary of Registrant, of the Restatement and Exchange Agreement among Registrant, Principal Mutual Life Insurance Company, and TMG Life Insurance Company (filed as an exhibit to Registrant's Form 10-K for the fiscal year ended August 31, 1998) (10.17) Credit Agreement dated as of July 2, 1998 among Penford Corporation and Penford Products Co. as borrowers, and certain commercial lending institutions as the lenders, and The Bank of Nova Scotia, as agent for the lenders (filed as an exhibit to Registrant's Form 10-K for the fiscal year ended August 31, 1998) (10.18) Intercreditor Agreement dated as of August 1, 1998 among the parties to the Credit Agreement dated July 2, 1998 and the parties to the Senior Note Agreements dated as of August 1, 1998 (filed as an exhibit to Registrant's Form 10-K for the fiscal year ended August 31, 1998) (10.19) Amended and Restated Credit Agreement dated as of November 15, 2000 among Penford Corporation and Penford Products Co. as borrowers, and certain commercial lending institutions as lenders, and the Bank of Nova Scotia, as agent for the lenders (filed as an exhibit to Registrant's Form 8-K/A dated September 29, 2000) (10.20) Debenture Trust Deed dated as of November 15, 2000 among Penford Holdings Pty Limited as issuer and ANZ Capel Court Limited as trustee (filed as an exhibit to Registrant's Form 8-K/A dated September 29, 2000) (10.21) Syndicated Facility Agreement dated as of November 15, 2000 among Penford Australia Limited, a wholly owned subsidiary of Penford Holdings Pty Limited, as borrowers, and Australia and New Zealand Banking Group Limited as lender and agent (filed as an exhibit to Registrant's Form 8-K/A dated September 29, 2000) 20 21 (10.22) Intercreditor Agreement dated as of November 15, 2000 by and among The Bank of Nova Scotia, KeyBank National Association, U.S. National Association and Australia and New Zealand Banking Group Limited (filed as an exhibit to Registrant's Form 8-K/A dated September 29, 2000) 27 Financial Data Schedule (b) Reports on Form 8-K A Form 8-K dated August 29, 2000 was filed reporting under Item 5, Registrant's intention to acquire Starch Australasia Limited from Goodman Fielder Limited on September 29, 2000. Filed as an exhibit was a copy of the press release dated August 29, 2000. A Form 8-K dated September 29, 2000 was filed reporting under Item 2, Registrant's completion of its acquisition of Starch Australasia Limited from Goodman Fielder Limited. Filed as an exhibit was a copy of the press release dated September 29, 2000. In accordance with paragraph 4 of Item 7(a) of Form 8-K, the required financial statements and pro forma financial information were filed by amendment on December 12, 2000. 21 22 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. Penford Corporation ------------------------------------- (Registrant) June 13, 2001 /s/ Jeffrey T. Cook - ------------- ------------------------------------- Date Jeffrey T. Cook President and Chief Executive Officer (Principal Executive Officer) June 13, 2001 /s/ Jacqueline L. Davidson - ------------- ------------------------------------- Date Jacqueline L. Davidson Vice President, Finance (Chief Accounting Officer) 22 23 EXHIBIT INDEX (2.1) Starch Australasia Share Sale Agreement completed as of September 29, 2000 among Penford Holdings Pty Limited, a wholly owned subsidiary of Registrant, and Goodman Fielder Limited (filed as an exhibit to Registrant's Form 8-K/A dated September 29, 2000) (3.1) Restated Articles of Incorporation of Registrant (filed as an exhibit to Registrant's Form 10-K for fiscal year ended August 31, 1995) (3.2) Articles of Amendment to Restated Articles of Incorporation of Registrant (filed as an exhibit to Registrant's Form 10-K for fiscal year ended August 31, 1997) (3.3) Bylaws of Registrant as amended and restated as of October 20, 1997 (filed as an exhibit to Registrant's Form 10-K for fiscal year ended August 31, 1997) (4.1) Amended and Restated Rights Agreement dated as of April 30, 1997 (filed as an exhibit to Registrant's Amendment to Registration Statement on Form 8-A/A dated May 5, 1997) (10.1) Penford Corporation Supplemental Executive Retirement Plan, dated March 19, 1990 (filed as an exhibit to Registrant's Form 10-K for the fiscal year ended August 31, 1991) (10.2) Penford Corporation Supplemental Survivor Benefit Plan, dated January 15, 1991 (filed as an exhibit to Registrant's Form 10-K for the fiscal year ended August 31, 1991) (10.3) Penford Corporation Deferred Compensation Plan, dated January 15, 1991 (filed as an exhibit to Registrant's Form 10-K for the fiscal year ended August 31, 1991) (10.4) Change of Control Agreements between Penford Corporation and Messrs. Cook, Horn, Keeley, and Kunerth (a representative copy of these agreements is filed as an exhibit to Registrant's Form 10-K for the fiscal year ended August 31, 1995) (10.5) Penford Corporation 1993 Non-Employee Director Restricted Stock Plan (filed as an exhibit to Registrant's Form 10-Q for the quarter ended November 30, 1993) (10.6) Penford Corporation 1994 Stock Option Plan as amended and restated as of January 21, 1997 (filed on Form S-8 dated March 17, 1997) (10.7) Penford Corporation Stock Option Plan for Non-Employee Directors (filed as an exhibit to the Registrant's Form 10-Q for the quarter ended May 31, 1996) (10.8) Separation Agreement dated as of July 31, 1998 between Registrant and Penwest Pharmaceuticals Co. (filed as an exhibit to Registrant's Form 8-K dated August 31, 1998) (10.9) Services Agreement dated as of July 31, 1998 between Registrant and Penwest Pharmaceuticals Co. (filed as an exhibit to Registrant's Form 8-K dated August 31, 1998) (10.10) Employee Benefits Agreement dated as of July 31, 1998 between Registrant and Penwest Pharmaceuticals Co. (filed as an exhibit to Registrant's Form 8-K dated August 31, 1998) (10.11) Tax Allocation Agreement dated as of July 31, 1998 between Registrant and Penwest Pharmaceuticals Co. (filed as an exhibit to Registrant's Form 8-K dated August 31, 1998) (10.12) Excipient Supply Agreement dated as of July 31, 1998 between Registrant and Penwest Pharmaceuticals Co. (filed as an exhibit to Registrant's Form 8-K dated August 31, 1998) 24 (10.13) Restatement and Exchange Agreement amending the Senior Note Agreement among Penford Corporation as Borrower and Mutual of Omaha and Affiliates as lenders, dated as of August 1, 1998 (filed as an exhibit to Registrant's Form 10-K for the fiscal year ended August 31, 1998) (10.14) Guaranty Agreement dated as of August 1, 1998 by Penford Products Co., a wholly-owned subsidiary of Registrant, of the Restatement and Exchange Agreement among Registrant and Mutual of Omaha and Affiliates (filed as an exhibit to Registrant's Form 10-K for the fiscal year ended August 31, 1998) (10.15) Restatement and Exchange Agreement amending the Senior Note Agreement among Penford Corporation as Borrower, and Principal Mutual Life Insurance Company and TMG Life Insurance Company as lenders, dated as of August 1, 1998 (filed as an exhibit to Registrant's Form 10-K for the fiscal year ended August 31, 1998) (10.16) Guaranty Agreement dated as of August 1, 1998 by Penford Products Co., a wholly owned subsidiary of Registrant, of the Restatement and Exchange Agreement among Registrant, Principal Mutual Life Insurance Company, and TMG Life Insurance Company (filed as an exhibit to Registrant's Form 10-K for the fiscal year ended August 31, 1998) (10.17) Credit Agreement dated as of July 2, 1998 among Penford Corporation and Penford Products Co. as borrowers, and certain commercial lending institutions as the lenders, and The Bank of Nova Scotia, as agent for the lenders (filed as an exhibit to Registrant's Form 10-K for the fiscal year ended August 31, 1998) (10.18) Intercreditor Agreement dated as of August 1, 1998 among the parties to the Credit Agreement dated July 2, 1998 and the parties to the Senior Note Agreements dated as of August 1, 1998 (filed as an exhibit to Registrant's Form 10-K for the fiscal year ended August 31, 1998) (10.19) Amended and Restated Credit Agreement dated as of November 15, 2000 among Penford Corporation and Penford Products Co. as borrowers, and certain commercial lending institutions as lenders, and the Bank of Nova Scotia, as agent for the lenders (filed as an exhibit to Registrant's Form 8-K/A dated September 29, 2000) (10.20) Debenture Trust Deed dated as of November 15, 2000 among Penford Holdings Pty Limited as issuer and ANZ Capel Court Limited as trustee (filed as an exhibit to Registrant's Form 8-K/A dated September 29, 2000) (10.21) Syndicated Facility Agreement dated as of November 15, 2000 among Penford Australia Limited, a wholly owned subsidiary of Penford Holdings Pty Limited, as borrowers, and Australia and New Zealand Banking Group Limited as lender and agent (filed as an exhibit to Registrant's Form 8-K/A dated September 29, 2000) (10.22) Intercreditor Agreement dated as of November 15, 2000 by and among The Bank of Nova Scotia, KeyBank National Association, U.S. National Association and Australia and New Zealand Banking Group Limited (filed as an exhibit to Registrant's Form 8-K/A dated September 29, 2000) 27 Financial Data Schedule