Homework case 6

Financial Statements

Exhibit 1(A)
Balance Sheet, July 31 (Amounts in thousand dollars)
	2006	2007	2008	2009	2010	2011
ASSETS
Current assets:
Cash and cash equivalents	35,614	33,755	74,279	24,802	5,642	3,112
Trade receivables, net	49,536	50,662	46,256	33,492	65,553	98,218
Inventories	99,177	90,619	88,526	85,027	143,405	145,575
Deferred income taxes	4,578	4,805	7,387	13,109	10,497	13,249
Prepaid income taxes	3,147	1,854	- 0	- 0	9,225	2,783
Property held for sale	1,728	- 0	- 0	- 0	- 0	- 0
Prepaid expenses and other current assets	4,182	2,417	4,261	3,594	5,767	13,102
Total current assets	197,962	184,112	220,709	160,024	240,089	276,039
Restricted cash	- 0	- 0	- 0	- 0	- 0	15,795
Property, plant and equipment, net	34,291	33,936	34,606	51,115	117,816	127,407
Deferred income taxes	4,812	4,922	5,802	6,230	13,625	3,870
Goodwill	5,077	5,432	5,432	76,076	396,788	407,587
Other intangible assets, net	3,941	3,707	3,473	97,883	449,018	450,855
Other long-term assets	6,949	4,294	3,245	3,564	8,536	6,842
Total assets	253,032	236,403	273,267	394,892	1,225,872	1,288,395
LIABILITIES AND STOCKHOLDERS EQUITY
Current liabilities:
Current portion of long-term debt	- 0	162	- 0	15,000	40,000	41,700
Accounts payable and accrued liabilities	28,371	26,306	42,251	64,453	92,166	144,060
Payable to growers	81,902	57,117	56,942	29,149	35,755	Note 1
Total current liabilities	110,273	83,585	99,193	108,602	167,921	185,760
Long-term obligations	20,000	20,345	20,204	100,085	516,100	490,001
Deferred income taxes	- 0	- 0	- 0	1,221	144,755	131,870
Other liabilities	11,933	7,132	7,647	11,643	17,153	25,969
Stockholders equity:
Common stock, $0.001 par value	16	16	16	17	22	22
Treasury stock, at cost	- 0	(1,436)	(3,203)	(4,256)	(5,050)	(6,867)
Additional paid-in capital	93,962	101,106	112,550	122,817	307,032	318,083
Accumulated other comprehensive gain/(loss)	(36)	2,233	1,584	(1,296)	(869)	18,500
Retained earnings	16,884	23,422	35,276	56,059	78,808	125,057
Total stockholders equity	110,826	125,341	146,223	173,341	379,943	454,795
Total liabilities and stockholders equity	253,032	236,403	273,267	394,892	1,225,872	1,288,395
Exhibit 1(B)
Statements of Operations for the year ended July 31 (In thousand dollars, except per share amounts)
	2006	2007	2008	2009	2010	2011
Net sales	477,205	522,585	531,492	570,940	680,162	965,922
Cost of sales	411,809	443,945	443,490	435,344	519,161	714,775
Gross profit	65,396	78,640	88,002	135,596	161,001	251,147
Operating expenses:
Selling, general and administrative	37,046	42,541	43,613	60,971	64,301	96,960
Advertising	17,977	20,445	20,508	28,785	32,962	44,415
Restructuring and other costs, net	3,442	(15)	- 0	- 0	- 0	- 0
Loss on termination of defined benefit plan	- 0	3,054	- 0	- 0	- 0	- 0
Acquisition and integration related expenses	- 0	- 0	- 0	- 0	11,508	16,792
Total operating expenses	58,465	66,025	64,121	89,756	108,771	158,167
Income from operations	6,931	12,615	23,881	45,840	52,230	92,980
Interest expense, net	295	1,291	1,040	6,255	10,180	23,840
Other	310	98	- 0	898	1,849	- 0
Income before income taxes	6,326	11,226	22,841	38,687	40,201	69,140
Income taxes (tax benefit)	(1,010)	2,793	8,085	14,944	13,990	18,929
Net income (loss)	7,336	8,433	14,756	23,743	26,211	50,211
Earnings per share:
Basic	0.47	0.53	0.92	1.45	1.40	2.28
Diluted	0.47	0.53	0.91	1.42	1.36	2.22
Shares used to compute earnings per share:
Basic	15,634	15,786	16,088	16,073	18,313	21,577
Diluted	15,653	15,786	16,152	16,391	18,843	22,242
Total dividends on common stock:	1,407	1895	2,902	2,960	3,462	3,962
Annual dividend per share:	0.09	0.12	0.18	0.18	0.18	0.18
Exhibit 1(C )
Statements of Cash Flows for the year ended July 31 (In thousand dollars)
	2006	2007	2008	2009	2010	2011
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	7,336	8,433	14,756	23,743	26,211	50,211
Adjustments:
Depreciation and amortization	5,532	7,561	6,420	11,362	17,154	29,465
Deferred income taxes	(1,531)	(1,874)	(3,022)	(2,800)	7,072	(7,534)
Loss termination of defined benefit plan	- 0	2,575	- 0	- 0	- 0	- 0
Tax benefit related to stock-based compensation plans	- 0	- 0	- 0	(1,067)	(434)	(2,274)
Stock-based compensation	3,992	5,859	6,893	3,901	3,231	6,974
Gain on sale of property held for sale	- 0	(1,193)	- 0	- 0	- 0	- 0
Other, net	395	56	4	858	1,109	1,055
Changes in assets and liabilities:
Trade receivables	(4,805)	(1,048)	4,406	12,764	(2,873)	(32,665)
Inventories	17,278	8,077	2,093	10,316	(45,852)	(2,170)
Prepaid expenses and income taxes and other current assets	(1,957)	1,581	10	1,053	(6,437)	(893)
Other assets	1,764	454	24	- 0	- 0	- 0
Accounts payable and accrued liabilities	(4,419)	(1,871)	15,475	(6,562)	(5,462)	17,577
Other, net	- 0	- 0	- 0	(200)	4,693	5,921
Payable to growers	9,348	(24,785)	(175)	- 0	- 0	- 0
Other liabilities	1,027	(11)	192	- 0	- 0	- 0
Net cash provided by (used in) operating activities	33,960	3,814	47,076	53,368	(1,588)	65,667
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital revolvement from CoBank	126	419	299	- 0	- 0	- 0
Net proceeds from sales of property, plant and equipment	49	2,941	12	- 0	- 0	- 0
Payment of Harmony acquisition costs	(19,186)	(197)	- 0	- 0	- 0	- 0
Purchases of property, plant and equipment	(8,354)	(6,790)	(6,583)	(7,994)	(11,790)	(27,703)
Net deposits of restricted cash	- 0	- 0	- 0	- 0	- 0	(15,795)
Acquisitions, net of cash acquired	- 0	- 0	- 0	(190,224)	(615,389)
Other, net	- 0	- 0	- 0	133	618	262
Net cash used in investing activities	(27,365)	(3,627)	(6,272)	(198,085)	(626,561)	(43,236)
CASH FLOWS FROM FINANCING ACTIVITIES:
Revolving line of credit borrowings	- 0	- 0	- 0	- 0	176,000	- 0
Repayment of revolving line of credit	(2,119)		(162)	- 0	(9,900)	(4,800)
Net proceeds from issuance of long-term debt	- 0	- 0	- 0	123,027	391,148	21,350
Payment to members of membership interest	(17,329)	- 0	- 0	- 0	- 0	- 0
Payment of long-term debt and notes payable	- 0	- 0	- 0	(30,141)	(125,119)	(40,884)
Gross proceeds from equity offering	- 0	- 0	- 0	- 0	179,737	- 0
Issuance of common stock under stock plans	802	1,204	3,972	- 0	- 0	- 0
Dividends paid	(1,407)	(1,895)	(2,902)	(2,960)	(3,462)	(3,962)
Excess tax benefit from stock option transactions	37	81	579	1,067	434	2,274
Other, net	- 0	- 0	- 0	4,247	24	940
Purchase of treasury stock	- 0	(1,436)	(1,767)	- 0	- 0	- 0
Net cash (used in) provided by financing activities	(20,016)	(2,046)	(280)	95,240	608,862	(25,082)
Effect of exchange rate changes on cash	- 0	- 0	- 0	- 0	127	121
Net increase (decrease) in cash and cash equivalents	(13,421)	(1,859)	40,524	(49,477)	(19,160)	(2,530)
Cash and cash equivalents:
Beginning of period	49,035	35,614	33,755	74,279	24,802	5,642
End of period	35,614	33,755	74,279	24,802	5,642	3,112

Format-requirement 4

	Balance Sheet on 31 July 2010			Balance Sheet on 31 July 2011
	O/S, U/S, or NE?	Amount		O/S, U/S, or NE?	Amount
Accounts payable
Inventory
	Income Statement for year ending 31 July 2010			Income Statement for year ending 31 July 2011
	O/S, U/S, or NE?	Amount		O/S, U/S, or NE?	Amount
Purchases
Cost of sales
Income before taxes

Req 5-Exhibit 2(A)-Bal Sheet

Exhibit 2(A)
	Balance Sheet, 31 July 2011 (Amounts in thousand dollars)						Balance Sheet, 31 July 2010 (Amounts in thousand dollars)
	Originally reported		Effect of error correction		Revised amount		Originally reported		Effect of error correction		Revised amount
ASSETS
Current assets:
Cash and cash equivalents	3,112						5,642
Trade receivables, net	98,218						65,553
Inventories	145,575						143,405								- 0	- 0
Deferred income taxes	13,249						10,497
Prepaid income taxes	2,783						9,225								- 0	- 0
Prepaid expenses and other current assets	13,102						5,767
Total current assets	276,039						240,089
Restricted cash	15,795						- 0
Property, plant and equipment, net	127,407						117,816
Deferred income taxes	3,870						13,625
Goodwill	407,587						396,788
Other intangible assets, net	450,855						449,018
Other long-term assets	6,842						8,536
Total assets	1,288,395						1,225,872
LIABILITIES AND STOCKHOLDERS EQUITY
Current liabilities:
Current portion of long-term debt	41,700						40,000
Accounts payable and accrued liabilities	144,060						92,166
Total current liabilities	185,760						132,166
Long-term obligations	490,001						516,100
Deferred income taxes	131,870						144,755
Other liabilities	25,969						17,153
Stockholders equity:
Common stock, $0.001 par value	22						22
Treasury stock, at cost	(6,867)						(5,050)
Additional paid-in capital	318,083						307,032
Accumulated other comprehensive gain/(loss)	18,500						(869)
Retained earnings	125,057						78,808
Total stockholders equity	454,795						379,943
Total liabilities and stockholders equity	1,288,395						1,190,117

Req 5 - Exhibit 2(B)- St of Ops

Exhibit 2(B)
Income Statements for the year ended July 31 (In thousand dollars, except per share amounts)
	2011			2010
	Originally reported	Effect of error correction	Revised amount	Originally reported	Effect of error correction	Revised amount
Net sales	965,922			680,162
Cost of sales	714,775			519,161
Gross profit	251,147			161,001
Operating expenses:
Selling, general and administrative	96,960		Req 5-	64,301
Advertising	44,415			32,962
Acquisition and integration related expenses	16,792			11,508
Total operating expenses	158,167			108,771
Income from operations	92,980			52,230
Interest expense, net	23,840			10,180
Other	- 0			1,849
Income before income taxes	69,140			40,201
Income taxes (tax benefit)	18,929			13,990
Net income (loss)	50,211			26,211
Weighted average number of shares	22,000			18,700
Earnings per share	2.28			1.40

1

2

3

4

5

6

A

B

2005

462,548

Net sales

413,750

Cost of sales

48,798

Gross profit

Exhibit 1(B)

Statements of Operations for the year ended July 31 (In thousand dollars, except per share amounts)