UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q/A
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended October 5, 2002
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 Number 000-32825
FRESH BRANDS, INC.
--------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
WISCONSIN 39-2019963
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.
2215 Union Avenue
Sheboygan, Wisconsin 53081
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (920) 457-4433
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 filing
requirements for the past 90 days.
Yes X No
----- -----
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS:
Indicate by check mark whether the registrant has filed all reports required to
be filed by Section 12, 13 or 15(d) of the Securities Exchange Act of 1934
subsequent to the distribution of securities under a plan confirmed by a court.
Yes No
----- -----
APPLICABLE ONLY TO CORPORATE ISSUERS: Indicate the number of shares outstanding
of each of the issuer's classes of common stock, as of the latest practicable
date.
As of November 15, 2002, 5,101,598 shares of Common Stock, $0.05 par value, were
issued and outstanding.
FRESH BRANDS, INC.
FORM 10-Q/A INDEX
PART I - FINANCIAL INFORMATION Page
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Item 1. Financial Statements (Restated)
Overview 3
Consolidated Balance Sheets 4
Consolidated Statements of Earnings 5
Consolidated Statements of Cash Flows 6
Notes to Consolidated Financial Statements 7
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations............................ 12
Item 3. Quantitative and Qualitative Disclosures About Market Risk..... 20
Item 4. Procedures and Controls........................................ 20
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K............................... 21
Signature..................................................... S-1
Certifications................................................ S-2
2
PART I - FINANCIAL INFORMATION
Overview
Our previously issued consolidated balance sheets as of October 5, 2002 and
December 29, 2001 and the related consolidated statements of earnings and cash
flows for the quarters ended October 5, 2002 and October 6, 2001 have been
restated.
This amendment to our Quarterly Report on Form 10-Q for the quarter ended
October 5, 2002 amends and restates those items of the Form 10-Q originally
filed on November 19, 2002 (the Original Filing) which have been affected by the
restatement. In order to preserve the nature and character of the disclosures
set forth in such items as originally filed, no attempt has been made in this
amendment to update such disclosures. Except as required to reflect the effects
of the restatement and certain other stylistic changes, all information
contained in this amendment is stated as of the date of the Original Filing. For
additional information regarding the restatement, see "Notes to Consolidated
Financial Statements - Note 5 - Restatement" and to our Annual Report on Form
10-K/A for the year ended December 29, 2001.
3
Item 1. Financial Statements
FRESH BRANDS, INC.
CONSOLIDATED BALANCE SHEETS
(in thousands)
-------------------------------------------------------------------------------------------------------------
Restated Restated
October 5, December 29,
2002 2001
-------------------------------------------------------------------------------------------------------------
Assets
Current assets:
Cash and cash equivalents $ 12,925 $ 11,501
Receivables 13,621 10,884
Inventories 33,411 34,538
Land and building held for resale 7,780 4,770
Other current assets 3,164 2,220
Deferred income taxes 4,459 4,459
-------------------------------------------------------------------------------------------------------------
Total current assets 75,360 68,372
-------------------------------------------------------------------------------------------------------------
Noncurrent receivables under capital subleases 8,815 9,278
Property under capital leases, net 9,974 10,604
Property and equipment, net 29,051 26,513
Goodwill 20,280 20,280
Other noncurrent assets 5,523 3,273
-------------------------------------------------------------------------------------------------------------
Total assets $ 149,003 $ 138,320
=============================================================================================================
Liabilities and Shareholders' Investment
-------------------------------------------------------------------------------------------------------------
Current liabilities:
Accounts payable $ 29,746 $ 33,293
Accrued salaries and benefits 7,317 7,845
Accrued insurance 2,842 2,665
Other accrued liabilities 7,587 3,942
Current obligations under capital leases 1,304 1,192
Current maturities of long-term debt 306 323
-------------------------------------------------------------------------------------------------------------
Total current liabilities 49,102 49,260
-------------------------------------------------------------------------------------------------------------
Long-term obligations under capital leases 19,799 20,808
Long-term debt 25,373 16,569
Deferred income taxes 1,103 1,103
Shareholders' investment:
Common stock 438 438
Additional paid-in capital 15,527 15,371
Retained earnings 79,713 75,840
Treasury stock (42,052) (41,069)
-------------------------------------------------------------------------------------------------------------
Total shareholders' investment 53,626 50,580
-------------------------------------------------------------------------------------------------------------
Total liabilities and shareholders' investment $ 149,003 $ 138,320
=============================================================================================================
See notes to consolidated financial statements.
4
FRESH BRANDS, INC.
CONSOLIDATED STATEMENTS OF EARNINGS
(in thousands, except per share data)
----------------------------------------------------------------------------------------------------------------------------------
For the 12-weeks ended For the 40-weeks ended
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Restated Restated
October 5, 2002 October 6, 2001 October 5, 2002 October 6, 2001
Net sales $ 141,860 $ 144,042 $ 472,920 $ 428,543
Cost of products sold 113,688 115,721 379,694 351,153
----------------------------------------------------------------------------------------------------------------------------------
Gross profit 28,172 28,321 93,226 77,390
Selling and administrative expenses 23,574 23,612 77,429 63,929
Depreciation and amortization 1,829 1,976 5,885 4,979
----------------------------------------------------------------------------------------------------------------------------------
Operating income 2,769 2,733 9,912 8,482
Interest income 2 16 39 600
Interest expense (427) (341) (1,362) (876)
----------------------------------------------------------------------------------------------------------------------------------
Earnings before income taxes 2,344 2,408 8,589 8,206
Provision for income taxes 901 918 3,323 3,120
----------------------------------------------------------------------------------------------------------------------------------
Net earnings $ 1,443 $ 1,490 $ 5,266 $ 5,086
==================================================================================================================================
Earnings per share - basic $ 0.28 $ 0.30 $ 1.02 $ 0.96
Earnings per share - diluted $ 0.28 $ 0.29 $ 1.00 $ 0.96
Weighted average shares and
equivalents outstanding:
Basic 5,143 5,033 5,161 5,274
Diluted 5,207 5,097 5,249 5,304
Cash dividends paid per share of
common stock $ 0.09 $ 0.09 $ 0.27 $ 0.27
==================================================================================================================================
See notes to consolidated financial statements.
5
FRESH BRANDS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
--------------------------------------------------------------------------------------------------------------------------------
For the 40-Weeks Ended
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Restated
Oct. 5, 2002 Oct. 6, 2001
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Cash Flows from Operating Activities:
Net earnings $ 5,266 $ 5,086
Adjustments to reconcile net earnings to net cash provided by operating activities
Depreciation and amortization 5,885 4,943
Deferred income taxes - (160)
Changes in assets and liabilities
Receivables (2,737) 1,219
Inventories 1,128 (3,319)
Other current assets (3,964) (1,196)
Accounts payable (3,547) (494)
Accrued liabilities 3,452 (56)
--------------------------------------------------------------------------------------------------------------------------------
Net cash flows provided by operating activities 5,483 6,023
--------------------------------------------------------------------------------------------------------------------------------
Cash Flows From Investing Activities:
Capital expenditures (10,002) (4,233)
Proceeds from sale of assets 24 2,184
Receipt of principal amounts under capital sublease agreements 405 283
Acquisition, net of cash acquired - (27,260)
--------------------------------------------------------------------------------------------------------------------------------
Net cash flows used in investing activities (9,573) (29,026)
--------------------------------------------------------------------------------------------------------------------------------
Cash Flows From Financing Activities:
Net change in revolver activity 9,050 12,900
Payment for acquisition of treasury stock (1,843) (8,258)
Payment of cash dividends (1,394) (1,414)
Exercise of stock options 772 1,078
Principal payments on capital lease obligations (895) (604)
Long term debt borrowing - 335
Principal payments on long-term debt (265) (196)
Receipt for sale of treasury stock 65 -
Other financing activities 24 24
--------------------------------------------------------------------------------------------------------------------------------
Net cash flows provided by financing activities 5,514 3,865
--------------------------------------------------------------------------------------------------------------------------------
Cash and Equivalents:
Net change 1,424 (19,138)
Balance, beginning of period 11,501 31,309
--------------------------------------------------------------------------------------------------------------------------------
Balance, end of period $ 12,925 $ 12,171
================================================================================================================================
Supplemental Cash Flow Disclosures:
Interest paid $ 2,071 $ 858
Income taxes paid 2,447 4,012
See notes to restated consolidated financial statements.
6
FRESH BRANDS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. Basis of Presentation
The financial statements included herein have been prepared by us without
audit. Although certain information and footnote disclosures normally included
in financial statements prepared in accordance with accounting principles
generally accepted in the United States have been condensed or omitted, we
believe that the disclosures are adequate to make the information presented not
misleading. The interim financial statements furnished with this report reflect
all adjustments (consisting of a normal recurring nature), which are, in the
opinion of management, necessary for a fair statement of the results for the
interim periods presented. It is suggested that these financial statements be
read in conjunction with the financial statements and the notes thereto included
in our 2001 annual report to shareholders, as incorporated by reference in our
Form 10-K/A for the fiscal year ended December 29, 2001. The 2001 financial
statements included within this Form 10-Q /A reflect restated numbers as
described in note 5.
2. Other Current Assets
(in thousands)
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October 5, 2002 December 29, 2001
----------------------------------------------------------------------------------------------------------------------
Prepaid expenses $ 1,937 $ 1,268
Retail systems and supplies for resale 643 426
Receivables under capital subleases 584 526
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Other current assets $ 3,164 $ 2,220
======================================================================================================================
3. Segment Reporting
Our operations are classified into two segments, wholesale and retail. Our
wholesale business derives its revenues primarily from the sale of groceries,
produce, dairy, meat and other products to our franchised supermarkets and
independent supermarket customers. We also supply these products to our
corporate supermarkets, but those revenues are eliminated for consolidated
accounting purposes. We supply grocery, frozen food, produce and general
merchandise and health and beauty care to our supermarkets through two
distribution centers in Sheboygan, Wisconsin. We also provide our supermarkets
with fresh, frozen and processed meats, eggs, dairy and deli items through a
third-party distribution facility in Milwaukee, Wisconsin. Additionally, we
distribute bakery and deli items made in our Platteville, Wisconsin centralized
production facility. Our retail business consists of our 27 owned supermarkets.
Our retail revenue is generated by our corporate supermarkets selling products,
including products purchased from our wholesale segment, to retail consumers.
7
Summarized financial information for the third quarter and year-to-date
of 2002 and 2001 concerning our reportable segments is shown in the following
tables (in thousands):
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For the 12-weeks ended For the 40-weeks ended
Sales October 5, 2002 October 6, 2001 October 5, 2002 October 6, 2001
---------------------------------------------------------------------------------------------------------------------
Wholesale sales $ 107,516 $ 109,280 $ 358,281 $ 339,351
Intracompany sales (35,387) (38,079) (120,063) (104,171)
----------- ----------- ----------- -----------
Net wholesale sales 72,129 71,201 238,218 235,180
Retail sales 69,731 72,841 234,702 193,363
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Total sales $ 141,860 $ 144,042 $ 472,920 $ 428,543
=====================================================================================================================
---------------------------------------------------------------------------------------------------------------------
For the 12-weeks ended For the 40-weeks ended
Restated Restated
---------------------------------------------------------------------------------------------------------------------
Earnings Before Income Tax October 5, 2002 October 6, 2001 October 5, 2002 October 6, 2001
---------------------------------------------------------------------------------------------------------------------
Wholesale $ 2,308 $ 2,076 $ 7,792 $ 6,492
Retail 461 657 2,120 1,989
----------- ----------- ----------- -----------
Total operating income 2,769 2,733 9,912 8,482
Interest income 2 16 39 600
Interest expense (427) (341) (1,362) (876)
---------------------------------------------------------------------------------------------------------------------
Earnings before income taxes $ 2,344 $ 2,408 $ 8,589 $ 8,206
=====================================================================================================================
4. New Accounting Pronouncements
In June 2001, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards ("SFAS") No. 141, "Business
Combinations," and SFAS No. 142, "Goodwill and Other Intangible Assets,"
effective for fiscal years beginning after December 15, 2001. Under SFAS No.
142, goodwill and intangible assets deemed to have indefinite lives will no
longer be amortized, but will be subject to annual impairment tests in
accordance with this statement. Other intangible assets will continue to be
amortized over their useful lives. Under these statements, business combinations
initiated after June 30, 2001 are required to be accounted for under the
purchase method of accounting and new criteria has been established for
recording intangible assets separate from goodwill. During the first quarter of
fiscal 2002, we implemented SFAS No. 142 and ceased amortization on goodwill and
intangible assets deemed to have indefinite lives. The total goodwill
amortization for the 12-week and 40-week periods ended October 6, 2001 was
$266,000 and $375,000, respectively. For fiscal 2002, we anticipate that the
application of the nonamortization provisions is expected to have a positive
impact on operating income of approximately $1.0 million. Also, during the first
quarter of fiscal 2002, we performed the required impairment test of goodwill as
of December 29, 2001 and determined that no impairment existed. The impacts to
date of adopting Statement 142 for the three and nine months ended June 30, 2002
and July 1, 2001 are as follows:
8
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For the 12-weeks ended For the 40-weeks ended
---------------------------------------------------------------------------------------------------------------------
Restated Restated
October 5, October 6, October 5, October 6,
2002 2001 2002 2001
Reported net income $ 1,443 $ 1,490 $ 5,266 $ 5,086
Add back: Goodwill amortization, net of tax of
$102 and $146 - 159 - 229
---------------------------------------------------------------------------------------------------------------------
Adjusted net income $ 1,443 $ 1,751 $ 5,266 $ 5,461
=====================================================================================================================
BASIC EARNINGS PER SHARE:
Reported net income .28 .30 1.02 .96
Goodwill amortization - .03 - .04
---------------------------------------------------------------------------------------------------------------------
Adjusted net income .28 .33 1.02 1.00
=====================================================================================================================
DILUTED EARNINGS PER SHARE:
Reported net income .28 .29 1.00 .96
Goodwill amortization - .03 - .04
---------------------------------------------------------------------------------------------------------------------
Adjusted net income .28 .32 1.00 1.00
=====================================================================================================================
In August 2001, the Emerging Issues Task Force ("EITF") issued EITF No.
01-09, "Accounting for Consideration Given by a Vendor to a Customer or a
Reseller of Vendor's Products," which codified and reconciled the Task Force's
consensus's in EITF No. 00-14 "Accounting for Certain Sales Incentives", EITF
No. 00-22 "Accounting for Points and Certain Other Time Based Sales Incentives
or Volume Based Sales Incentive Offers, and Offers of Free Products or Services
to Be Delivered in the Future", and EITF No. 00-25 "Vendor Income Statement
Characterization of Consideration Paid to a Reseller for the Vendor's Products".
These EITFs provide guidance regarding the timing of recognition and income
statement classification of costs incurred for certain sales incentive programs,
including sales incentives offered voluntarily by a vendor without charge to
customers that can be used in, or that are exercisable by a customer, as a
result of a single exchange transaction. The implementation of EITF 01-09 in the
first quarter of fiscal 2002 resulted in a reclassification that decreased 2001
third quarter and year-to-date net sales and cost of products sold each by $1.4
million and $4.6 million, respectively, to conform with the 2002 presentation.
The implementation of EITF 01-09 did not impact operating income or net
earnings.
In August 2001, the FASB issued SFAS No. 143 "Accounting for Asset
Retirement Obligations." Statement No. 143 addresses financial accounting and
reporting for obligations associated with the retirement of tangible long-lived
assets and the associated asset retirement costs. Management is currently
evaluating the impact of adoption on the consolidated financial statements.
In August 2001, the FASB issued SFAS No. 144, "Accounting for the
Impairment or Disposal of Long-Lived Assets" effective for years beginning after
December 15, 2001. SFAS No. 144 establishes a single accounting model for
long-lived assets to be disposed of by sale and provides additional
implementation guidance for assets to be held and used and assets to be disposed
of other than by sale. SFAS No. 144 supersedes SFAS No. 121, "Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed of".
The implementation of this pronouncement did not have a material impact on our
results of operations or financial position.
9
In July 2002, the FASB issued SFAS No. 146, "Accounting for Costs
Associated with Exit or Disposal Activities." SFAS No. 146 requires companies to
recognize costs associated with exit or disposal activities when they are
incurred rather than at the date of a commitment to an exit or disposal plan.
The Statement replaces EITF Issue No. 94-3, "Liability Recognition for Certain
Employee Termination Benefits and Other Costs to Exit an Activity (Including
Certain Costs Incurred in a Restructuring)." We are required to apply this
Statement prospectively to exit or disposal activities initiated after December
31, 2002.
5. Restatement
Our previously issued quarterly consolidated balance sheets as of October
5, 2002 has been restated for the items described below. Additionally, our
previously issued consolidated balance sheet as of December 29, 2001 and the
related consolidated statements of earnings, shareholders' investment and cash
flows for the year then ended have been restated in our 2001 10-K/A.
Receivables, net
As more fully described within the caption addressing cost of products
sold, we understated our cost of products sold due to an error related to a
unique supply relationship we have with one of our direct store delivery meat
vendors. Accurately stating cost of products sold resulted in a reduction in
receivables, net, at December 29, 2001.
Additionally, we corrected an error to recognize patronage dividends on an
accrual basis rather than the cash basis. This correction resulted in an
increase in receivables, net, at October 5, 2002 and December 29, 2001.
Inventories
Inventory balances were adjusted to recognize the reduction in inventory
values reflecting cash discounts received by us from our vendors. The correction
reduced inventory balances at October 5, 2002 and December 29, 2001.
We did not fully eliminate intercompany profit recorded within our
inventory balance. Correction of this error resulted in a reduction in the
reported inventory balance at October 5, 2002 and December 29, 2001.
Accounts payable
Accounts payable were reduced to reflect our estimate of the underlying
vendor liability based on the best information available at the balance sheet
date. Correction of this error impacted our periods ended October 5, 2002 and
December 29, 2001.
Accrued insurance
Accrued insurance was reduced to reflect our estimate of the underlying
employee health insurance liability based on the best information available at
the balance sheet date. Correction of this error impacted our periods ended
October 5, 2002 and December 29, 2001.
Other accrued liabilities
The originally reported tax liabilities were increasedto reflect the
10
impact of the adjustments described in this note, impacting our periods ended
October 5, 2002 and December 29, 2001.
Cost of products sold
We understated our cost of products sold due to an error related to a
unique supply relationship we have with one of our direct store delivery meat
vendors. Orders from nine supermarkets were delivered by the vendor to our meat
distribution center and shipped by us to these stores. Sales were properly
recorded, but we inadvertently failed to record accurately the corresponding
cost of products sold. Correction of this error resulted in an increasein our
period ended October 6, 2001.
The following table presents the changes that have been made to the
consolidated balance sheet as of October 5, 2002 as a result of the restatement.
The changes made to the consolidated balance sheet as of December 29, 2001, and
the related consolidated statements of earnings for the quarters in 2001 are
presented within the quarterly financial information note included within the
2001 Form 10-K/A, as such, these changes are not included herein.There were no
net changes in earnings, operating, financing or investing cash flows for the
12-weeks ended October 5, 2002 and October 6, 2001.
(In thousands)
------------------------------------------------------------------------------------------------------------
Condensed Balance Sheet
October 5, 2002
------------------------------------------------------------------------------------------------------------
As Previously
Reported As Restated
------------------------------------------------------------------------------------------------------------
Receivables, net $ 13,536 $ 13,621
Inventories 33,825 33,411
Total current assets 75,689 75,360
Total assets 149,332 149,003
Accounts payable 30,434 29,746
Accrued insurance 3,327 2,842
Other accrued liabilities 7,261 7,587
Total current liabilities 49,949 49,102
Retained earnings 79,195 79,713
Total shareholders' investment 53,108 53,626
Total liabilities and shareholders' investment 149,332 149,003
------------------------------------------------------------------------------------------------------------
11
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
GENERAL
Our previously issued consolidated balance sheets as of October 5, 2002 and
December 29, 2001 and the related consolidated statements of earnings and cash
flows for the 12-week and 40-week periods ending October 5, 2002 and October 6,
2001 have been restated.
The following managements' discussion and analysis has been restated to
reflect the changes more fully described within note 5 of the notes to the
consolidated financial statements.
As of October 5, 2002, we owned and operated 27 supermarkets and franchised
an additional 73 supermarkets, an increase of two franchised supermarkets since
October 6, 2001. Nineteen of our corporate supermarkets operate under the Piggly
Wiggly(R) banner and eight of them operate under the Dick's(R) Supermarkets
banner. All of our franchised supermarkets operate under the Piggly Wiggly
banner. We are the primary supplier to all 100 supermarkets and also serve as a
wholesaler to a number of smaller, independently operated supermarkets and
convenience stores. All of our supermarkets and other wholesale customers are
located in Wisconsin and northern Illinois.
Our operations are classified into two segments, wholesale and retail.
Compared to our wholesale segment, our retail segment is more capital- and
labor-intensive, generally has higher operating and administrative expenses and
generates higher gross profit margins. In June 2001, we acquired Dick's
Supermarkets, Inc., which owns and operates eight retail supermarkets. In each
of the three years prior to the Dick's acquisition, our retail segment generated
between 40% and 43% of our annual sales. As a result of the Dick's acquisition,
the percentage of our net sales generated by our retail segment has increased to
approximately 50% of our net sales. We believe that, absent any future
acquisitions of any additional retail supermarket chains, our two segments will
each continue to generate approximately 50% of our net sales.
As expected, the change in the relative contributions of our segments
caused our gross margin and operating and administrative expenses, as a
percentage of sales, to increase significantly during the second half of 2001
and the first half of 2002 compared to the same periods during previous years.
We believe that, absent any future acquisitions of any additional retail
supermarket chains, our gross margin and operating and administrative expenses,
as a percentage of sales, will, in the fourth quarter, be similar to the levels
realized during the third quarter of 2002.
During the past year, the competition in many of our market areas increased
significantly. Competitive store openings have affected about one-third of our
corporate stores and several of our franchised stores this year. This increased
competition, along with the continuing softness of the economy, has contributed
to decreases in our same store sales, retail sales and the percent of our net
sales generated by our retail segment. We believe that, absent an improvement in
the economy or increases in our revenue due to any future acquisitions, our same
store sales and retail sales will, during the fourth quarter of 2002, be flat or
decrease nominally compared to the fourth quarter of 2001.
12
Based on our performance through the third quarter and a special assessment
imposed by a health and accident insurance plan that covers some of our union
employees (see "Operating and Administrative Expenses" below), we have lowered
our earnings per share estimates for 2002. Barring further increasing
difficulties in our markets or our business, we currently expect our 2002
earnings per share to be between $1.50 and $1.56, a decrease of $.02 to $.03 per
share from our previously announced range of $1.53 to $1.58.
RESULTS OF OPERATIONS
The following table sets forth certain information regarding our results
from the 12-weeks ended October 5, 2002 compared to the restated results from
the 12-weeks ended October 6, 2001 and the results from 40-weeks ended October
5, 2002 compared to the restated results from the 40-weeks ended October 6, 2001
(in thousands, except per share data):
For the 12-weeks ended For the 40-weeks ended
Restated Restated Restated Restated
October 5, October 6, Variance October October 6, Variance
2002 2001 Amount Percentage 5, 2002 2001 Amount Percentage
-------------------------------------------------------------------------------------------------------------------
Net sales $141,860 $144,042 (2,182) (1.5%) 472,920 $428,543 $44,377 10.4%
Retail sales 69,731 72,841 (3,110) (4.3%) 234,702 193,363 41,339 21.4%
Wholesale sales 72,129 71,201 928 1.3% 238,218 235,180 3,038 1.3%
Gross profit 28,172 28,321 (149) (0.5%) 93,226 77,390 15,836 20.5%
Operating and
administrative
expenses 25,403 25,588 (185) (0.7%) 83,314 68,908 14,406 20.9%
Operating income 2,769 2,733 36 1.3% 9,912 8,482 1,430 16.9%
Earnings before
income taxes 2,344 2,408 (64) (2.7%) 8,589 8,206 383 4.7%
Net earnings 1,443 1,490 (47) (3.2%) 5,266 5,086 180 3.5%
Diluted earnings
per share $0.28 $ 0.29 $ (0.01) (3.4%) $ 1.00 $ 0.96 $0.04 4.2%
-------------------------------------------------------------------------------------------------------------------
The following table sets forth certain information regarding our results
from the 12-weeks ended October 5, 2002, the restated results from the 12-weeks
ended October 6, 2001, the results from 40-weeks ended October 5, 2002 and the
restated results from the 40-weeks ended October 6, 2001 (in thousands):
--------------------------------------------------------------------------------------------------------------------
Percent of Net Sales
------------------------------------------
For the 12-weeks ended For the 40-weeks ended
-------------------------------------------------------------------------
Restated Restated
October 5, 2002 October 6, 2001 October 5, 2002 October 6, 2001
--------------------------------------------------------------------------------------------------------------------
Net sales 100.0% 100.0% 100.0% 100.0%
Retail sales 49.2% 50.6% 49.6% 45.1%
Wholesale sales 50.8% 49.4% 50.4% 54.9%
Gross margin 19.9% 19.7% 19.7% 18.1%
Operating and administrative expenses 17.9% 17.8% 17.6% 16.1%
Operating income 2.0% 1.9% 2.1% 2.0%
Earnings before income taxes 1.7% 1.7% 1.8% 1.9%
Net earnings 1.0% 1.0% 1.1% 1.2%
--------------------------------------------------------------------------------------------------------------------
13
Net Sales
Retail Sales
The decrease in our retail sales for the third quarter of 2002 compared to
our third quarter of 2001 was primarily due to:
o Increased intense competitive activity in certain of our market areas,
including competitive store openings affecting about one-third of our
corporate stores and several of our franchised stores.
o A return to more sustainable levels of sales at our Sheboygan flagship
corporate store compared to its opening period sales in last year's
third quarter.
o Overall softness of the economy and rising unemployment rates, which
reduce discretionary spending and tend to cause retail shoppers to
reduce their spending by purchasing less expensive products from our
supermarkets.
Despite these difficult factors, our retail sales during the first three
quarters of 2002 improved primarily because:
o Our acquisition of the Dick's Supermarket chain added $75.0 million to
our retail sales for the first three quarters of 2002, compared to
$31.7 million for the same period of 2001 (when we only realized about
four months of retail sales from Dick's).
o Sales at our new replacement corporate supermarkets in Sheboygan,
Wisconsin and Zion, Illinois that opened in August 2001 and January
2002, respectively, were higher than sales at the supermarkets they
replaced.
Due primarily to the above factors, same store sales for our corporate and
franchised supermarkets decreased 1.1% for the third quarter of 2002 and were
flat for the first three quarters of 2002 compared to the same periods in 2001.
Because the Dick's acquisition occurred in the second quarter of 2001, the third
quarter of 2002 was the first quarter that the Dick's stores were included in
our same store sales figures. The inclusion of our Dick's stores, which have
faced especially intense competition from several competitive store openings, in
our same store sales comparisons for our third quarter was one of the factors
that contributed to our third quarter decline in our same store sales. In
contrast, last year, we achieved significant same store sales in part because of
competitive store closures in several of our markets. In light of the
competitive environment and near-term economic outlook, we anticipate same store
sales to be lower during the fourth quarter of 2002 compared to the fourth
quarter of 2001. Based on our internal wholesale price index, inflation has not
had any significant effect on our retail sales this year.
As part of our continuing efforts to increase our retail sales volume, we
are currently building a new market 50,000 square-foot corporate supermarket in
Kenosha, Wisconsin. We expect this new market store to open in January 2003. In
addition, we recently announced a new corporate replacement store and Pig
Stop(R) gas station project to be built on the north side of Sheboygan by late
summer of next year. Both stores are designed after our flagship supermarket
14
in Sheboygan, Wisconsin and will be called "Piggly Wiggly Fresh Market Circle"
stores, which is the new name for our circular prototype store design. Based on
the sales and profitability of our flagship supermarket and our first Pig Stop
gas station, we hope that these stores will help increase our sales and earnings
shortly after their openings.
Net Wholesale Sales
Our net wholesale sales for the third quarter and first three quarters of
2002 increased nominally compared to the same periods in 2001. These increases
were largely due to our conversion of independent supermarkets to Piggly Wiggly
supermarkets in Howard and Nekoosa, Wisconsin in October 2001 and in Cambridge,
Wisconsin in August 2002. Additionally, our wholesale sales increased due to our
March 2002 addition of a wholesale customer in Oostburg, Wisconsin that will
become a franchised supermarket in the fourth quarter. These increases were
offset by wholesale sales decreases due to competitive store openings in several
of our markets, which decreased customer count at several of our franchised
supermarkets and the amount that customers, on average, spent at these
supermarkets. Based on our internal wholesale price index, inflation has not had
any significant effect on our wholesale sales this year.
Since the end of the third quarter, we have opened new franchised
replacement stores in West Bend and Howard, Wisconsin. Over the next 12 months,
multiple additional franchise store openings are planned which we expect will
help increase our wholesale volume. These projects include expanded and
renovated franchised stores in Mosinee, Cross Plains and Mayville, Wisconsin,
and new franchised replacement stores in Omro, Union Grove and Juneau,
Wisconsin. Based on our performance through the third quarter, we expect the
increased sales from these projects will help offset the expected continued
decreased sales to our wholesale customers who face heightened competition. As a
result, we expect that our fourth quarter net wholesale sales will be flat
compared to the fourth quarter of 2001.
Gross Margin
The significant improvement in our gross margin during the first three
quarters of 2002 was attributable primarily to the increase in our mix of retail
sales to total sales resulting from the Dick's acquisition.
Our gross margin increased in the third quarter of 2002, compared to the
third quarter of 2001, the first full quarter after the Dick's acquisition,
primarily due to a change in the mix of items sold and reduced sale markdowns in
our supermarkets. We anticipate that these same factors will result in our gross
margin in the fourth quarter being flat compared to the third quarter of 2002,
but higher than in the fourth quarter of 2001.
Operating and Administrative Expenses
Our operating and administrative expenses increased nominally, as a percent
of sales, during the third quarter of 2002 compared to the third quarter of
2001. This increase was due, in part, to a one-time $166,000 special assessment
imposed by the Illinois United Food and Commercial Workers Health Benefits Fund
to eliminate the amount by which the plan's liabilities exceed the value of its
assets. We will pay this special assessment over the next two
15
years, but we recognized the entire charge in the third quarter. Like many
employers, we continue to be faced with the prospect of significant increases in
our health care costs. The impact of these increases during 2002 has been
mitigated, in part, by our fall 2001 introduction of employee health plan cost
sharing. Additionally, during the third quarter, we recognized $200,000 of
pre-tax costs associated with our previously announced reaudit of our earnings
(see note 5 to our financial statements above).
Our operating and administrative expenses, as a percent of net sales,
increased significantly during the first three quarters of 2002, compared to the
same period of 2001. This increase was principally attributable to the factors
noted above and an increase in our percentage of retail sales to total sales
resulting from the Dick's acquisition.
Due to the competitive nature of the supermarket industry, some of our
franchised and corporate retail stores continue to experience operational
challenges in their marketplaces. As a result, some of these supermarkets have
experienced financial and operational difficulties. In order to further improve
our overall financial results, we actively evaluate various business
alternatives to these operations. These alternatives include selling these
supermarkets, converting franchised supermarkets into corporate supermarkets
(and vice versa), closing supermarkets and implementing other operational
changes. While we did not incur any significant retail repositioning expenses
during the past few years and do not anticipate incurring any such expenses in
the fourth quarter, implementing any of these alternatives could result in our
incurring significant repositioning or restructuring charges in 2003.
Earnings
Our increase in operating income in the third quarter of 2002, compared to
the third quarter of 2001, was due to decreased amortization costs as a result
of the discontinuance of goodwill amortization as required by SFAS No. 142 (see
note 4 to our financial statements above). The decreases in our earnings before
income taxes and net earnings in the third quarter of 2002, compared to the
third quarter of 2001, were due primarily to the increase in our depreciation
and interest expenses in the third quarter. Our interest expenses increased due
to our increased borrowings under our revolving line of credit to fund our
on-going business information systems project and working capital requirements.
The increases in our operating income, earnings before income taxes and net
earnings in the first three quarters of 2002 compared to the same period of 2001
were due largely to increased sales resulting from our Dick's acquisition and
the decrease in amortization costs referred to above.
Our earnings per share decreased for the third quarter of 2002, compared to
the same period in 2001, due to a decrease in our earnings and an increase in
our diluted weighted average common shares and equivalents. The increase in our
weighted average common shares and equivalents to 5,207,000 for the third
quarter of 2002 from 5,097,000 for same the period in 2001 was due to the sale
of shares to two local investors in the fourth quarter of 2001.
Our earnings per share increased for the first three quarters of 2002,
compared to the same period in 2001, due to an increase in our earnings and a
nominal decrease in our weighted
16
average common shares and equivalents. The decrease in our weighted average
common shares and equivalents to 5,249,000 for the first three quarters of 2002
from 5,304,000 for the same period in 2001 was due to repurchases of our shares,
which was partially offset by the sale of shares to two local investors during
the fourth quarter of 2001.
Many of our peer companies measure the profitability of their sales using
their net earnings to sales ratio. This ratio represents the net earnings margin
realized from each dollar of sales. Our net earnings to sales was 1.0% during
the third quarters of both 2002 and 2001. For the first three quarters of 2002,
our net earnings to sales ratio was 1.1%, compared to 1.2% for the same period
last year. This nominal decrease was primarily due to increased competition in
some of our retail markets. Increased competition decreases our net earnings to
sales ratio by decreasing customer count, requiring us to lower prices on
certain products and causing customers to decrease the amount that they spend at
our supermarkets. We anticipate that our net earnings to sales ratio will likely
remain between 1.0% and 1.2% in the fourth quarter of 2002.
LIQUIDITY AND CAPITAL RESOURCES
Summary
At October 5, 2002, we had cash and equivalents totaling $12.9 million. At
the end of 2001, cash and equivalents aggregated $11.5 million. Our net cash
inflow of approximately $1.4 million was attributable to various operational,
investing and financing activities described below. Our working capital position
at October 5, 2002 was $25.7 million, compared to $18.6 million at December 29,
2001. Our current ratio at October 5, 2002 was 1.52 to 1.00, compared to 1.37 to
1.00 at December 29, 2001. As of October 5, 2002, we had unsecured revolving
bank credit facilities aggregating $35.0 million, with $12.3 million remaining
available for use. Our current working capital levels provide us with a very
favorable and strong liquidity position.
Cash Flows From Operating Activities
The cash inflows from our wholesale segment occur when our retail
supermarket customers pay us. The cash disbursements from both of our segments
occur when we pay our suppliers. Because these payments are relatively large,
our cash inflows and outflows fluctuate depending on the timing of the receipt
of payments from our wholesale customers and the timing of payments to our
suppliers. For the first three quarters of 2002, our net cash generated from
operations was $5.5 million, compared to $6.0 million for the same period in
2001. Our net change in cash inflows from operations was attributable primarily
to the timing of cash receipts and disbursements.
Cash Flows From Investing Activities
For the first three quarters of 2002, our net cash outflows from investing
activities totaled $9.6 million, compared to $29.0 million for the same period
in 2001. Our acquisition of Dick's Supermarkets accounted for $27.3 million of
our 2001 investing cash outflow. For the first three quarters of 2002, investing
cash outflows for capital items was nearly $10.0 million, compared to $4.2
million for the same period in 2001. Approximately $3.7 million of our investing
outflow
17
for 2002 related to expenditures related to the expansion of our distribution
centers and approximately $3.5 million of our capital expenditures were for our
on-going systems project. Additionally, expenditures for retail equipment and
fixtures for 2002, including those associated with Dick's, were approximately
$2.2 million and corporate office technology expenditures were nearly $600,000.
Cash Flows From Financing Activities
For the first three quarters of 2002, our net cash inflows from financing
activities totaled approximately $5.5 million compared to nearly $3.9 million
for the same period in 2001. The change was primarily due to the repurchase of
approximately 104,000 shares of our common stock in the first three quarters of
2002 for an aggregate price of $1.8 million compared to approximately 670,000
shares aggregating $8.3 million for the same period of 2001.
In the second quarter of 2001, we entered into a $35.0 million bank
revolving credit facility. We borrowed $12.5 million under our revolving credit
facility to fund a portion of the purchase price of Dick's Supermarkets, Inc. in
June of 2001. Subsequently, in both 2001 and 2002 we borrowed additional amounts
to fund our systems project and working capital requirements, including our
increased working capital requirements due to the Dick's acquisition. An
increase in the amount outstanding under the revolving credit facility compared
to 2001 resulted in financing cash inflows in 2002. We owed approximately $22.7
million under our revolving credit facility at the end of the third quarter of
2002, compared to approximately $13.7 million owed at the end of 2001. Our ratio
of total liabilities to shareholders' investment for the 2002 third quarter was
up from the third quarter of 2001 to 1.76 from 1.63.
As of October 5, 2002 approximately $5.1 million of the Board of Directors'
authorized $30 million stock repurchase program remained available for
additional stock repurchases. Also, on October 11, 2002, our Board of Directors
declared a fourth quarter 2002 cash dividend of $0.09 per common share. The
dividend is payable on November 22, 2002 to shareholders of record on November
8, 2002 and is expected to total approximately $450,000.
Major 2002 Commitments
During the second quarter of 2001, we announced our plans to spend
approximately $15.0 million, over a three-year period to replace and expand our
current business information systems. The new systems are expected to support
our growth plans and provide improved operational efficiencies and cost savings.
The project includes four critical phases. The first two phases, the core
infrastructure and the systems related to our wholesale business operations, are
expected to be completed by the first quarter of 2003. Part of the wholesale
phase of the project, which involved our meat, dairy and frozen food warehouse
operations, has been substantially completed. The final two phases, related to
our retail pricing and promotional card marketing, and human resources, payroll
and financial reporting systems, are projected to be completed between the end
of 2003 and the end of 2004. Since the inception of the systems project in 2001,
we have expended nearly $8.8 million on this project.
18
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
Certain matters discussed in our 10-Q/A are "forward-looking statements"
intended to qualify for the safe harbors from liability established by the
Private Securities Litigation Reform Act of 1995. These forward-looking
statements can generally be identified as such because the context of the
statement will include words such as we believe, anticipate, expect or words of
similar import. Similarly, statements that describe our future plans,
objectives, strategies or goals are also forward-looking statements.
Specifically, forward-looking statements include our statements about (a) our
2002 earnings expectations; (b) our plans to remodel existing supermarkets, open
additional corporate supermarkets and convert existing supermarkets to
franchised supermarkets; (c) our expectations regarding our future sales and
same store sales growth; (d) potential increases in our health care costs and
our plans to offset the impact of these cost increases; (e) our expectations
regarding our net earnings to sales ratio, operating and administrative expenses
and gross margin; (f) the cost, timing and results of our new business
information technology systems replacement project; (g) the cost, timing and
results of our financial statement restatements; and (h) our expectations
regarding the likelihood that we will incur future retail repositioning
expenses. Such forward-looking statements are subject to certain risks and
uncertainties that may materially adversely affect the anticipated results. Such
risks and uncertainties include, but are not limited to, the following: (1) the
cost and results of our new business information technology systems replacement
project; (2) the presence of intense competitive market activity in our market
areas, including competition from warehouse club stores and deep discount
supercenters; (3) our ability to identify and develop new market locations
and/or acquisition candidates for expansion purposes; (4) our continuing ability
to obtain reasonable vendor marketing funds for promotional purposes; (5) our
ability to continue to recruit, train and retain quality franchised and
corporate retail store operators; (6) the potential recognition of repositioning
charges resulting from potential closures, conversions and consolidations of
retail stores due principally to the competitive nature of the industry and to
the quality of our retail store operators; (7) the final cost and results of,
and the diversion of management's time and attention in connection with, our
financial statement restatements; and (8) our ability to integrate and
assimilate the acquisition of Dick's Supermarkets, Inc. and to achieve, on a
timely basis, our anticipated benefits and synergies thereof. Shareholders,
potential investors and other readers are urged to consider these factors
carefully in evaluating the forward-looking statements and are cautioned not to
place undue reliance on such forward-looking statements. The forward-looking
statements made herein are only made as of the date of this release and we
disclaim any obligation to publicly update such forward-looking statements to
reflect subsequent events or circumstances.
19
Item 3. Quantitative and Qualitative Disclosures about Market Risk
Our only variable rate financial instrument subject to interest rate risk
is our $35 million revolving credit facility which permits borrowings at
interest rates based on either the bank's prime rate or adjusted LIBOR. We have
borrowed approximately $22.7 million under this facility as of October 5, 2002.
As a result, increases in market interest rates would cause our interest expense
to increase and our net earnings to decrease. Based on our outstanding revolving
credit facility borrowings as of October 5, 2002, a 100 basis point increase in
market interest rates would increase our annual interest expense by
approximately $227,000. Similarly, a 100 basis point decrease in the market
interest rate would reduce our annual interest expense by approximately
$227,000.
We do not have any exposure to market risks related to changes in foreign
currency exchange rates believe that our exposure to trade accounts receivable
is immaterial.
Item 4. Procedures and Controls
a. Evaluation of disclosure controls and procedures
------------------------------------------------
Based on his evaluation as of a date within 90 days of the filing date of
this Quarterly Report on Form 10-Q, our principal executive officer and
principal financial officer has concluded that our disclosure controls and
procedures (as defined in Rules 13a-14(c) and 15d-14(c) under the Securities
Exchange Act of 1934 (the "Exchange Act")) are effective to ensure that
information required to be disclosed by us in reports that we file or submit
under the Exchange Act is recorded, processed, summarized and reported within
the time periods specified in Securities and Exchange Commission rules and
forms.
b. Changes in internal controls
----------------------------
There were no significant changes in our internal controls or in other
factors that could significantly affect these controls subsequent to the date of
their evaluation, including any corrective actions with regard to significant
deficiencies and material weaknesses.
20
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
a. Exhibits
--------
99.1 Written Statement Pursuant to 18 U.S.C. ss.1350.
b. Reports on Form 8-K
-------------------
We filed one current report on Form 8-K dated July 24, 2002, pursuant
to Item 4 thereof with respect to the acceptance by KPMG LLP to be the
independent auditors for our fiscal year ending December 28, 2002.
We filed one current report on Form 8-K dated July 25, 2002, pursuant
to Item 9 thereof with respect to our press release regarding an
accounting error and that we will restate of our financial statements
for the 2001, 2000, and 1999 fiscal years.
We filed one current report on Form 8-K dated August 2, 2002, pursuant
to Item 9 thereof with respect to our press release for the second
quarter ended July 13, 2002 and related disclosure requirements of
Regulation FD.
We filed one current report on Form 8-K dated August 15, 2002,
pursuant to Item 9 thereof with respect to our press release
announcing the resignation of our chief financial officer, Mr. Armand
C. Go, effective after August 23, 2002.
We filed one current report on Form 8-K, dated October 24, 2002,
pursuant to Item 9 with respect to our press release for the third
quarter and related disclosure requirements of Regulation FD.
21
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
company has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
FRESH BRANDS, INC.
------------------
DATE: March 27, 2003 By: /s/ S. Patric Plumley
---------------------------------------
S. Patric Plumley,
Senior Vice President, Chief Financial
Secretary and Treasurer
S-1
CERTIFICATION
-------------
I, Elwood F. Winn, certify that:
1. I have reviewed this quarterly report on Form 10-Q/A of Fresh Brands, Inc.;
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this quarterly report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and cash
flows of the registrant as of, and for, the periods presented in this
quarterly report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined
in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
(a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this quarterly
report is being prepared;
(b) evaluated the effectiveness of the registrant's disclosure controls
and procedures as of a date within 90 days prior to the filing date of
this quarterly report (the "Evaluation Date"); and
(c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based on
our most recent evaluation, to the registrant's auditors and the audit
committee of registrant's board of directors (or persons performing the
equivalent functions):
(a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to
record, process, summarize and report financial data and have
identified for the registrant's auditors any material weaknesses in
internal controls; and
(b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal
controls; and
6. The registrant's other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal
controls subsequent to the date of our most recent evaluation, including
any corrective actions with regard to significant deficiencies and material
weaknesses.
DATE: March 27, 2003 By: /s/ Elwood F. Winn
-------------------------------------
Elwood F. Winn,
President, Chief Executive Officer
S-2
CERTIFICATION
-------------
I, S. Patric Plumley, certify that:
1. I have reviewed this quarterly report on Form 10-Q/A of Fresh Brands, Inc.;
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this quarterly report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and cash
flows of the registrant as of, and for, the periods presented in this
quarterly report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined
in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
(a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this quarterly
report is being prepared;
(b) evaluated the effectiveness of the registrant's disclosure controls
and procedures as of a date within 90 days prior to the filing date of
this quarterly report (the "Evaluation Date"); and
(c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based on
our most recent evaluation, to the registrant's auditors and the audit
committee of registrant's board of directors (or persons performing the
equivalent functions):
(a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to
record, process, summarize and report financial data and have
identified for the registrant's auditors any material weaknesses in
internal controls; and
(b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal
controls; and
6. The registrant's other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal
controls subsequent to the date of our most recent evaluation, including
any corrective actions with regard to significant deficiencies and material
weaknesses.
DATE: March 27, 2003 By: /s/ S. Patric Plumley
-------------------------------------
S. Patric Plumley,
Senior Vice President, Chief
Financial Officer Secretary and
Treasurer
S-3