UNITED
STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
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For the quarterly period ended March 31, 2003 |
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or |
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
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For the transition period from to |
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Commission File Number: 333-63722 |
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MICHAEL FOODS, INC.
(Exact name of registrant as specified in its charter)
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Minnesota |
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41-0498850 |
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(State or other jurisdiction of incorporation or organization) |
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(I.R.S. Employer Identification No.) |
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401 Carlson Parkway |
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55305 |
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(Address of principal executive offices) |
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(Zip code) |
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(952) 258-4000 |
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(Registrant’s telephone number, including area code) |
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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 (“Exchange Act”) 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. ý Yes o No
Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). o Yes ý No
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
MICHAEL FOODS, INC.
(A wholly-owned subsidiary of M-Foods Holdings, Inc.)
Condensed Consolidated Balance Sheets
(Unaudited, dollars in thousands)
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March 31, |
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December
31, |
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ASSETS |
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Current assets |
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Cash and equivalents |
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$ |
18,127 |
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$ |
20,572 |
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Accounts receivable, less allowances |
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102,902 |
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101,579 |
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Inventories |
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96,423 |
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95,807 |
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Prepaid expenses and other |
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12,228 |
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13,571 |
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Total current assets |
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229,680 |
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231,529 |
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Property, plant and equipment, net |
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276,994 |
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282,353 |
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Other assets |
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Goodwill |
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341,028 |
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341,028 |
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Joint ventures and other assets |
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36,520 |
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38,112 |
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377,548 |
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379,140 |
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$ |
884,222 |
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$ |
893,022 |
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LIABILITIES AND SHAREHOLDER’S EQUITY |
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Current liabilities |
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Current maturities of long-term debt |
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$ |
17,764 |
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$ |
17,671 |
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Accounts payable |
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60,751 |
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65,990 |
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Accrued liabilities |
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Compensation |
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11,242 |
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15,251 |
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Insurance |
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8,369 |
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7,855 |
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Customer programs |
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32,385 |
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26,484 |
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Income taxes |
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10,353 |
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7,403 |
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Interest |
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15,111 |
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9,336 |
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Hedging derivative liability |
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9,909 |
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11,001 |
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Other |
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11,161 |
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11,393 |
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Total current liabilities |
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177,045 |
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172,384 |
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Long-term debt, less current maturities |
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472,644 |
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493,718 |
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Deferred income taxes |
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47,534 |
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47,119 |
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Commitments and contingencies |
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— |
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— |
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Non-controlling interest |
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475 |
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475 |
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Shareholder’s equity |
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Common stock, $0.01 par value, 1,000 shares authorized, issued and outstanding |
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— |
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— |
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Additional paid-in capital |
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147,498 |
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147,498 |
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Retained earnings |
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45,375 |
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39,476 |
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Accumulated other comprehensive loss |
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(6,349 |
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(7,648 |
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186,524 |
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179,326 |
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$ |
884,222 |
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$ |
893,022 |
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The accompanying notes are an integral part of the unaudited condensed consolidated financial statements.
2
MICHAEL FOODS, INC.
(A wholly-owned subsidiary of M-Foods Holdings, Inc.)
Condensed Consolidated Statements of Earnings
Three months ended March 31,
(Unaudited, dollars in thousands)
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2003 |
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2002 |
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Net sales |
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$ |
298,213 |
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$ |
278,429 |
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Cost of sales |
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247,298 |
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227,313 |
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Gross profit |
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50,915 |
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51,116 |
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Selling, general and administrative expenses |
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29,435 |
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29,623 |
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Operating profit |
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21,480 |
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21,493 |
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Interest expense, net |
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11,871 |
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12,664 |
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Earnings before income taxes |
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9,609 |
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8,829 |
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Income tax expense |
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3,710 |
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3,470 |
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Net earnings |
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$ |
5,899 |
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$ |
5,359 |
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The accompanying notes are an integral part of the unaudited condensed consolidated financial statements.
3
MICHAEL FOODS, INC.
(A wholly-owned subsidiary of M-Foods Holdings, Inc.)
Condensed Consolidated Statements of Cash Flows
Three months ended March 31,
(Unaudited, dollars in thousands)
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2003 |
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2002 |
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Net cash provided by operating activities |
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$ |
26,981 |
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$ |
26,590 |
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Cash flows from investing activities: |
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Capital expenditures |
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(7,845 |
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(6,878 |
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Investments in joint ventures and other assets |
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— |
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422 |
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Net cash used in investing activities |
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(7,845 |
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(6,456 |
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Cash flows from financing activities: |
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Payments on notes payable and revolving line of credit |
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(5,000 |
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Payments on long-term debt |
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(21,631 |
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(4,581 |
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Net cash used in financing activities |
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(21,631 |
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(9,581 |
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Effect of exchange rate changes on cash |
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50 |
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— |
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