UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): March 1, 2004
Spectrum Organic Products, Inc.
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(Exact name of Registrant as specified in its charter)
California 333-22997 94-3076294
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(State of (Commission File Number) (IRS Employer ID No.)
Incorporation)
5341 Old Redwood Highway, Suite 400
Petaluma, CA 94954
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(Address of Principal Executive Offices)
(707) 778-8900
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(Registrant's telephone number)
ITEM 7. Financial Statements and Exhibits
(c) Exhibits:
99.07 Press release of the Company dated March 1, 2004 titled
"Spectrum Organic Products Reports Record Sales and Profits
for 2003".
Item 12. Results of Operations and Financial Condition
Spectrum Organic Products, Inc. (the "Company") issued a press release on March
1, 2004 announcing its final 2003 results of operations and financial condition.
Included with that press release were the following financial statements:
1. Balance Sheets as of December 31, 2003 and 2002
2. Statements of Operations for the years ended December 31, 2003, 2002
and 2001
3. Statement of Stockholders' Equity for the years ended December 31,
2003, 2002 and 2001
4. Statements of Cash Flows for the years ended December 31, 2003, 2002
and 2001
A copy of the press release is included with this 8-K filing as Exhibit 99.07.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned, hereunto duly authorized.
Dated: March 2, 2004
Spectrum Organic Products, Inc.
/s/ Robert B. Fowles
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Robert B. Fowles
Duly Authorized Officer &
Chief Financial Officer
Spectrum Organic Products, Inc.
Balance Sheets
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As of December 31,
2003 2002
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Assets
Current Assets:
Cash $ 7,300 $ 12,700
Accounts receivable, net 4,163,200 3,075,200
Inventories, net 8,007,200 5,269,600
Deferred income taxes - current 514,200 --
Prepaid expenses and other current assets 297,500 79,600
------------ ------------
Total Current Assets 12,989,400 8,437,100
Property and Equipment, net 4,338,700 3,447,400
Other Assets:
Deferred income taxes - long-term 1,087,700 --
Intangible assets, net 586,800 42,000
Other assets 218,300 271,900
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Total Assets $ 19,220,900 $ 12,198,400
============ ============
Liabilities and Stockholders' Equity
Current Liabilities:
Bank overdraft $ 513,800 $ 601,000
Line of credit 4,833,000 2,479,800
Accounts payable, trade 4,168,000 3,176,300
Accrued expenses 1,307,700 876,200
Current maturities of notes payable & capital lease
obligations 322,300 256,000
Current maturities of notes payable, related parties 275,200 275,100
Income taxes payable 9,900 176,000
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Total Current Liabilities 11,429,900 7,840,400
Notes payable & capital lease obligations, less current
maturities 1,104,200 278,900
Notes payable, related parties, less current maturities 549,200 805,200
Deferred rent 50,700 --
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Total Liabilities 13,134,000 8,924,500
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Stockholders' Equity:
Preferred stock, 5,000,000 shares authorized, no shares
issued or outstanding -- --
Common stock, without par value, 60,000,000 shares
authorized, 46,254,777 and 45,705,571 issued and
outstanding at December 31, 2003 and 2002, respectively 9,579,500 9,430,100
Accumulated deficit (3,492,600) (6,156,200)
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Total Stockholders' Equity 6,086,900 3,273,900
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Total Liabilities and Stockholders' Equity $ 19,220,900 $ 12,198,400
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Spectrum Organic Products, Inc.
Statements of Operations
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For the years ended December 31,
2003 2002 2001
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Net sales $ 45,676,500 $ 40,579,300 $ 41,019,200
Cost of goods sold 33,806,800 29,823,000 30,009,700
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Gross profit 11,869,700 10,756,300 11,009,500
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Operating Expenses:
Sales and marketing 6,204,600 5,987,500 5,791,300
General and administrative 3,729,100 2,949,500 3,194,900
Amortization of goodwill -- -- 520,700
Industrial accident expenses 410,200 254,100 --
(Gain) loss on sales of product
lines -- (210,300) 4,803,200
Goodwill impairment writedown -- -- 950,000
------------ ------------ ------------
Total operating expenses 10,343,900 8,980,800 15,260,100
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Income (Loss) From Operations 1,525,800 1,775,500 (4,250,600)
Other Income (Expense):
Interest expense (404,200) (480,600) (912,800)
Other, net (24,600) 14,900 (42,400)
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Income (Loss) Before Taxes 1,097,000 1,309,800 (5,205,800)
Benefit (Provision) for income taxes 1,566,600 (189,800) --
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Net Income (Loss) $ 2,663,600 $ 1,120,000 $ (5,205,800)
============ ============ ============
Basic and Fully Diluted Income (Loss) Per Share $ 0.06 $ 0.02 $ (0.12)
============ ============ ============
Weighted Average Shares Outstanding:
Basic 45,845,140 45,699,627 45,278,517
Fully Diluted 47,839,765 46,306,077 45,278,517
Spectrum Organic Products, Inc.
Statement of Stockholders' Equity
For the Years Ended December 31, 2001, 2002 and 2003
=============================================================================================================
Retained
Earnings Total
Common Stock (Accumulated Stockholders'
Shares Amount Deficit) Equity
----------- ----------- ----------- -----------
Balances, January 1, 2001 44,495,828 $ 8,920,400 $(2,070,400) $ 6,850,000
Restricted common shares issued to a non-executive
Director of the Company, under a private sale 160,000 50,000 -- 50,000
Restricted common shares issued to non-executive
Directors of the Company, in lieu of cash
compensation for Board fees earned during 2000 64,000 20,000 -- 20,000
Restricted common shares issued to four note holders
under the private placement conversion offer to
convert the notes to equity 630,000 168,200 -- 168,200
Warrants net exercised by the note holders under the
private placement 230,883 -- -- --
Warrants issued in connection with the private
placement notes -- 96,100 -- 96,100
Options issued to Global Natural Brands, Ltd. in
final settlement of litigation -- 25,300 -- 25,300
Shares issued to the Trustee for the Chapter 7
estate of Sunny Farms in final settlement of
litigation 117,950 93,700 -- 93,700
Net loss for the year -- -- (5,205,800) (5,205,800)
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Balances, December 31, 2001 45,698,661 $ 9,373,700 $(7,276,200) $ 2,097,500
Warrants net exercised by the note holders under the
private placement 6,910 -- -- --
Warrants issued in connection with the private
placement notes -- 49,500 -- 49,500
Non-qualified stock options issued -- 6,900 -- 6,900
Net income for the year -- -- 1,120,000 1,120,000
----------- ----------- ----------- -----------
Balances, December 31, 2002 45,705,571 $ 9,430,100 $(6,156,200) $ 3,273,900
Warrants exercised by the note holders under the
private placement 405,456 90,000 -- 90,000
Exercise of common stock options 143,750 59,400 -- 59,400
Net income for the year -- -- 2,663,600 2,663,600
----------- ----------- ----------- -----------
Balances, December 31, 2003 46,254,777 $ 9,579,500 $(3,492,600) $ 6,086,900
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Spectrum Organic Products, Inc.
Statements of Cash Flows
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For the years ended December 31,
2003 2002 2001
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Cash Flows From Operating Activities:
Net Income (Loss) $ 2,663,600 $ 1,120,000 $ (5,205,800)
Adjustments to Reconcile Net Income (Loss) to Net Cash
Provided by (Used in) Operating Activities:
Provision for allowances against receivables 103,400 47,000 68,300
Provision for inventory obsolescence 210,800 262,200 300,500
Provision for industrial accident 410,200 254,100 --
Depreciation and amortization 524,700 454,300 418,800
Amortization of goodwill -- -- 520,700
Goodwill impairment writedown -- -- 950,000
(Gain) Loss on sales of product lines -- (210,300) 4,803,200
Loss on asset disposals 50,300 -- 84,100
Imputed interest on notes payable and warrants issued 19,000 71,300 107,600
Imputed expense on non-qualified stock options -- 6,900 --
Directors fees paid via issuance of common stock -- -- 20,000
Changes in Assets and Liabilities:
Accounts receivable (1,191,400) 430,400 (524,500)
Inventories (2,948,400) (1,057,700) (420,600)
Deferred income taxes (1,601,900) -- --
Prepaid expenses and other assets (224,300) (54,300) 35,000
Accounts payable 871,700 (500,300) (2,203,900)
Accrued expenses (104,000) (282,200) 188,900
Income taxes payable 9,900 176,000 --
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Net Cash Provided by (Used in) Operating Activities (1,206,400) 717,400 (857,700)
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Cash Flows From Investing Activities:
Purchase of property and equipment (1,281,100) (719,300) (522,700)
Purchase of intellectual property (550,000) -- --
Proceeds from sales of product lines and related inventories -- 3,215,200 2,953,100
Transaction fees on sales of product lines -- (152,000) (139,700)
Proceeds from sale of assets -- -- 3,000
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Net Cash Provided by (Used in) Investing Activities (1,831,100) 2,343,900 2,293,700
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Cash Flows From Financing Activities:
Increase (decrease) in bank overdraft (87,200) 29,300 24,900
Proceeds from lines of credit 36,210,000 43,931,000 43,677,700
Repayment of lines of credit (33,856,600) (46,050,000) (44,511,000)
Repayment of notes payable, related parties (275,300) (371,200) (426,400)
Proceeds of notes payable 1,495,200 -- 132,700
Repayment of notes payable (553,800) (545,200) (287,500)
Repayment of capitalized lease obligations (49,600) (69,000) (78,600)
Restricted shares purchased by board member -- -- 50,000
Proceeds from exercise of common stock warrants 90,000 -- --
Proceeds from exercise of common stock options 59,400 -- --
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Net Cash Provided by (Used in) Financing Activities 3,032,100 (3,075,100) (1,418,200)
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Net Increase (Decrease) in Cash (5,400) (13,800) 17,800
Cash, beginning of the year 12,700 26,500 8,700
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Cash, end of the year $ 7,300 $ 12,700 $ 26,500
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Supplemental Disclosure of Cash Flow Information:
Cash paid for income taxes $ 323,500 $ 13,800 $ 800
Cash paid for interest $ 384,400 $ 446,300 $ 805,200
Non-Cash Financing Activities:
Conversion of notes payable to common stock $ -- $ -- $ 168,200
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