EX-99.3 5 unauditsigfinan70106.htm UNAUDITED SIGNATURE FINANCIAL STATEMENTS JULY 1, 2006 Unaudited Signature Financial Statements July 1, 2006
Exhibit 99.3

Signature Fruit Company, LLC
 
       
Consolidated Balance Sheets
 
           
Unaudited
(In Thousands)
 
           
   
July 1, 2006
 
 
June 25, 2005
 
Assets
         
Current assets:
         
Cash and cash equivalents
 
$
759
 
$
1,136
 
Trade accounts receivable, net of allowances
of $3,147 in 2006 and $2,084 in 2005
   
10,488
   
16,524
 
Inventories
   
87,594
   
118,067
 
Intercompany receivable in lieu of tax benefit
   
2,535
   
-
 
Prepaid expenses and other current assets
   
1,203
   
1,126
 
Total current assets
   
102,579
   
136,853
 
               
Property, plant and equipment, net
   
75,089
   
79,022
 
Other assets
   
386
   
844
 
Total assets
 
$
178,054
 
$
216,719
 
               
Liabilities and members’ equity
             
Current liabilities:
             
Bank overdraft
 
$
1,505
 
$
4,390
 
Accounts payable
   
3,282
   
2,957
 
Accrued liabilities
   
17,766
   
17,411
 
Accrued interest
   
1,653
   
1,862
 
Revolving line of credit
   
22,065
   
40,883
 
Current portion of long-term debt
   
250
   
7,500
 
Total current liabilities
   
46,521
   
75,003
 
               
Payable to vendor
   
7,360
   
7,360
 
Long-term debt, less current portion
   
92,889
   
90,546
 
               
Members’ equity:
             
Class A membership interest
   
53,000
   
53,000
 
Accumulated deficit
   
(21,716
)
 
(9,190
)
Total members’ equity
   
31,284
   
43,810
 
Total liabilities and members’ equity
 
$
178,054
 
$
216,719
 

 
 

 

 
Signature Fruit Company, LLC
 
       
Consolidated Statements of Operations
 
           
Unaudited
(In Thousands)
 
           
   
Six Months Ended
July 1, 2006
 
Six Months Ended
June 25, 2005
 
           
Net sales
 
$
112,568
 
$
116,929
 
Cost of goods sold
   
99,345
   
105,031
 
Gross profit
   
13,223
   
11,898
 
               
Selling, general and administrative expenses
   
10,857
   
9,301
 
Income from operations
   
2,366
   
2,597
 
               
Other income (expense):
             
Interest expense, net
   
(6,857
)
 
(7,282
)
Other income (expense)
   
(2,110
)
 
552
 
     
(6,601
)
 
(4,133
)
Intercompany allocation in lieu of income tax benefit
   
2,310
   
1,446
 
Net income (loss)
 
$
(4,291
)
$
(2,687
)

 

 
 

 


 
Signature Fruit Company, LLC
 
           
Consolidated Statements of Cash Flows
 
           
Unaudited
(In Thousands)
 
           
   
Six Months
Ended July 1, 2006
 
Six Months
Ended June 25, 2005
 
Operating activities
         
Net income (loss)
 
$
(4,291
)
$
(2,687
)
Adjustments to reconcile net income (loss) to net cash
provided by operating activities:
             
Depreciation
   
3,589
   
4,224
 
Amortization of debt issuance costs
   
(87
)
 
338
 
Accretion of interest expense on notes payable
   
-
   
741
 
(Gain) loss on sale of property, plant and equipment
         
(84
)
Changes in operating assets and liabilities:
             
Trade accounts receivable
   
10,088
   
2,663
 
Inventories
   
65,446
   
55,275
 
Prepaid expenses, current assets and other assets
   
(510
)
 
(257
)
Intercompany receivable in lieu of tax benefit
   
(635
)
 
717
 
Bank overdraft
   
409
   
2,548
 
Accounts payable and accrued liabilities
   
3,137
   
1,776
 
Accrued interest and other liabilities
   
(648
)
 
(111
)
Net cash provided by operating activities
   
76,498
   
65,143
 
               
Investing activities
             
Payments for purchases of property, plant and equipment
   
(4,415
)
 
(3,669
)
Proceeds from sales of property, plant and equipment
   
20
   
7,546
 
Net cash provided by investing activities
   
(4,395
)
 
3,877
 
               
Financing activities
             
Borrowings on revolving line of credit
   
84,400
   
72,939
 
Repayments on revolving line of credit
   
(140,208
)
 
(128,284
)
Borrowings on long-term debt
   
9,119
   
3,000
 
Repayments on long-term debt
   
(25,830
)
 
(16,169
)
Net cash used in financing activities
   
(72,519
)
 
(68,514
)
               
Increase in cash and cash equivalents
   
(416
)
 
506
 
Cash and cash equivalents, beginning of the period
   
1,175
   
630
 
Cash and cash equivalents, end of the period
 
$
759
 
$
1,136
 

 
 

 


   
Signature Fruit Company, LLC
 
   
Consolidated Statements of Cash Flows (continued)
 
   
Unaudited
(In thousands)
 
           
   
Six Months Ended July 1, 2006
 
Six Months Ended June 25, 2005
 
Supplemental disclosure of cash flow information
         
Cash paid for interest
 
$
7,505
 
$
6,654
 
               
Supplemental disclosure of noncash financing activities
             
Redemption of securities to bank to reduce outstanding
 
$
-
 
$
428
 
borrowings in lieu of cash payments
 
               

 

 

 
 

 

SIGNATURE FRUIT COMPANY, LLC
 
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(In Thousands)
 
July 1, 2006

1. Unaudited Condensed Consolidated Financial Statements
 
In the opinion of management, the accompanying unaudited condensed consolidated financial statements contain all adjustments, which are normal and recurring in nature, necessary to present fairly the financial position of Signature Fruit Company, LLC (the “Company”) as of July 1, 2006 and results of its operations and its cash flows for the interim periods presented. All significant intercompany transactions and accounts have been eliminated in consolidation.
 
The results of operations for the six month period ended July 1, 2006 are not necessarily indicative of the results to be expected for the full year.

The accounting policies followed by the Company are set forth in Note 1 to the Company's Financial Statements in the 2006 Signature Fruit Annual Report.
 
Other footnote disclosures normally included in annual financial statements prepared in accordance with U. S. generally accepted accounting principles have been condensed or omitted. These unaudited condensed consolidated financial statements should be read in conjunction with the financial statements and notes included in the Company's 2005 Annual Report.

2.  
The seasonal nature of the Company's food processing business results in a timing difference between expenses (primarily overhead expenses) incurred and absorbed into product cost. All Off Season Reserve balances, which essentially represent a contra-inventory account, are zero at fiscal year end. Depending on the time of year, Off Season Reserve is either the excess of absorbed expenses over incurred expenses to date or the excess of incurred expenses over absorbed expenses to date. Other than at the end of the first and fourth quarter of each year, absorbed expenses exceed incurred expenses due to timing of production. The Off Season Reserve balance was $13,983,000 as of July 1, 2006 and $19,457,000 as of June 25, 2005.

3.  
Comprehensive loss totaled $4,291,000 and $2,687,000, which equaled net loss for the six months ended July 1, 2006 and June 25, 2005, respectively.

4.  
The Company participates in several multiemployer pension plans, which provide defined benefits to certain union employees. Company contributions to multiemployer plans charged to expense for the six months ended July 1, 2006 and June 25, 2005, were $730,000 and $804,000, respectively.

5.  
The Company also sponsors a 401(k) pension plan covering substantially all salaried employees. Company contributions to the plan are based on employee contributions or compensation. Company contributions to this plan charged to expense for the six months ended July 1, 2006 and June 25, 2005, were $272,000 and $287,000, respectively.




6.  
Inventories consist of the following:

   
July 1, 2006
 
June 25, 2005
 
           
Finished product
 
$
62,931,000
 
$
83,333,000
 
Raw materials and supplies
   
23,021,000
   
32,724,000
 
Other, principally packaging materials
   
1,642,000
   
2,010,000
 
   
$
87,594,000
 
$
118,067,000
 

 
7.  
Property, plant and equipment consist of the following:
 
   
July 1, 2006
 
June 25, 2005
 
           
Land
 
$
12,234,000
 
$
12,234,000
 
Buildings and improvements
   
27,934,000
   
27,135,000
 
Machinery and equipment
   
62,964,000
   
63,172,000
 
Capital projects in progress
   
5,282,000
   
5,155,000
 
     
108,414,000
   
107,696,000
 
Accumulated depreciation
   
(33,325,000
)
 
(28,674,000
)
Total
 
$
75,089,000
 
$
79,022,000