Northland Cranberries, Inc. Reports Second Quarter Financial Results

Apr 16, 2001, 01:00 ET from Northland Cranberries, Inc.

    WISCONSIN RAPIDS, Wis., April 16 /PRNewswire/ --
     Northland Cranberries, Inc. (Nasdaq:   CBRYA), manufacturer and marketer of
 Northland 100% juice cranberry blends and Seneca fruit juice products, today
 reported fiscal 2001 second quarter financial results for the period ended
 February 28, 2001.  Total revenues recorded for the three-month period were
 $32.4 million.  Net loss for the quarter was $1.4 million, or $0.07 per share,
 compared to fiscal 2000 second quarter net loss of $21.0 million, or $1.04 per
 share, on revenues of $68.6 million.  The net loss for the fiscal 2000 second
 quarter included a $27.0 million pre-tax lower of cost or market charge to
 cost of sales to reduce the carrying value of the cranberry inventory.  That
 charge on an after-tax basis was approximately $16.5 million, or $.81 per
 share.
     For the six-month period ended February 28, 2001, the company reported
 revenues of $77.2 million.  Net loss for the period was $1.2 million, or
 $0.06 per share. During the comparable period last year, net loss was
 $20.7 million, or $1.02 per share, on revenues of $143.6 million.
     The company also reported that it is currently in default under the terms
 of its forbearance agreements with its bank lenders and an insurance company,
 and that it is in active negotiations with those lenders regarding potential
 refinancing and other measures designed to regain compliance with the terms of
 those agreements and the company's other debt arrangements.
     John Swendrowski, Northland Chairman and CEO, stated "While our second
 quarter performance resulted in a loss, we feel we have made significant
 improvement over last year and that the elements in our restructuring plan and
 our renewed focus on emphasizing profitability over increasing sales are
 beginning to take effect.  Our selling, general and administrative expenses as
 a percentage of revenues decreased significantly during the first six months
 of fiscal 2001, primarily as a result of tighter control over expenses,
 decreased staff levels and the restructure of our sales and marketing
 operations.  At the operating level, prior to interest and tax considerations,
 we generated income of $691,000 for the quarter and $4.9 million for the
 six-month year-to-date period.
     "Our branded sales efforts continue to be adversely impacted by heavy
 price discounting and promotional activity by our competitors.  However, we
 expect improvement over time as consumers become aware of the reformulation of
 our entire product line to contain 27% cranberry juice.  We are currently
 conducting a print media campaign in national magazines designed to introduce
 the reformulated products to our target audience.
     "Obviously, refinancing of our bank debt remains one of our top
 priorities.  Although we are in default of certain covenants in our
 forbearance agreements, we are continuing to negotiate with our current
 lenders in an effort to restructure our debt.  We are also investigating
 numerous other financing alternatives and strategic options," Swendrowski
 said.
     Northland is a vertically integrated grower, handler, processor and
 marketer of cranberries and value-added cranberry products.  The company
 processes and sells Northland brand 100% juice cranberry blends, Seneca brand
 juice products, Northland brand fresh cranberries and other cranberry products
 through retail supermarkets and other distribution channels.  Northland also
 sells cranberry and other fruit concentrates to industrial customers who
 manufacture juice products.  With 24 growing properties in Wisconsin and
 Massachusetts, Northland is the world's largest cranberry grower.  It is the
 only publicly-owned, regularly-traded cranberry company in the United States,
 with shares traded on the Nasdaq Stock Market under the listing symbol CBRYA.
 
           (Condensed Consolidation Statements of Operations Follow)
 
               SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
     Certain matters discussed in this press release are "forward-looking
 statements," including statements about the Company's future plans, goals and
 other events, which have not yet occurred.  These statements are intended to
 qualify for the safe harbors from liability established by the Private
 Securities Litigation Reform Act of 1995.  They can generally be identified
 because the context of such statements will include words such as "believes,"
 "anticipates," "expects," or words of similar import.  Whether or not these
 forward-looking statements will be accurate in the future will depend on
 certain risks and factors including risks associates with (i) the development,
 market share growth and continued consumer acceptance of the Company's branded
 juice products, including consumer acceptance of its new 27% Solution; (ii)
 the disposition of certain litigation related to the sale of the net assets of
 the Company's private label juice business; (iii) the implementation of a
 marketing order of the United States Department of Agriculture, if any,
 relative to the 2001 crop year, as well as the cranberry purchase program
 adopted by the United States Congress; (iv) agricultural factors affecting the
 Company's crop and the crop of other North American growers; (v) the Company's
 ability to comply with the terms and conditions of, and to satisfy its
 responsibilities under, its amended credit facility and other debt agreements,
 with respect to which the Company is currently in default of certain covenants
 as well as certain principal and interest payment provisions, as well as the
 Company's forbearance agreements; (vi) the Company's ability to secure
 additional financing and/or generate sufficient cash from operations as may be
 necessary to fund working capital requirements and continue as a going
 concern; (vii) the results of the previously announced exploration of
 strategic alternatives; (viii) the results of the Company's internal
 organizational restructuring, including, without limitation, the results of
 the restructuring of certain sales and marketing functions through an
 agreement with Crossmark, Inc.; (ix) the Company's ability to manage its trade
 payables; and (x) the Company's ability to continue to meet the listing
 requirements of The Nasdaq National Market, including, without limitation, the
 requirement that its Class A Common Stock maintain a  minimum bid price above
 $1.00 per share.  Readers should consider these risks and factors and the
 impact they have when evaluating these forward-looking statements.  These
 statements are based only on management's knowledge and expectations on the
 date of this press release.  The Company will not necessarily update these
 statements or other information in this press release based on future events
 or circumstances.
 
                          NORTHLAND CRANBERRIES, INC.
                CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                   (DOLLARS IN THOUSANDS, EXCEPT SHARE DATA)
                                  (Unaudited)
 
                                For the three                 For the six
                                months ended                  months ended
                         February 28,  February 29,   February 28, February 29,
                              2001         2000          2001          2000
 
     Revenues               $32,447       $68,621      $77,209      $143,588
 
     Cost of sales           20,487        73,041       50,646       124,596
 
     Gross profit (loss)     11,960        (4,420)      26,563        18,992
 
       Selling, general and
        administrative
        expenses             11,271        26,600       22,105        46,547
       Gain on disposals of
        property & equipment     (2)           --         (412)           --
 
     Income (loss) from
      operations                 691      (31,020)       4,870        (27,555)
 
     Interest expense          4,818        3,492        9,503          6,403
     Interest income            (682)          --       (1,376)            --
 
     Loss before income
      taxes                   (3,445)     (34,512)      (3,257)       (33,958)
 
     Income tax benefit       (2,092)     (13,476)      (2,092)       (13,244)
 
     Net loss                $(1,353)    $(21,036)     $(1,165)      $(20,714)
 
     Net loss per share:
       Basic                  $(0.07)      $(1.04)      $(0.06)        $(1.02)
 
       Diluted                $(0.07)      $(1.04)      $(0.06)        $(1.02)
 
     Shares used in
      computing net loss
      per share:
 
       Basic              20,338,423   20,338,423   20,338,423     20,338,423
       Diluted            20,338,423   20,338,423   20,338,423     20,338,423
 
 

SOURCE Northland Cranberries, Inc.
    WISCONSIN RAPIDS, Wis., April 16 /PRNewswire/ --
     Northland Cranberries, Inc. (Nasdaq:   CBRYA), manufacturer and marketer of
 Northland 100% juice cranberry blends and Seneca fruit juice products, today
 reported fiscal 2001 second quarter financial results for the period ended
 February 28, 2001.  Total revenues recorded for the three-month period were
 $32.4 million.  Net loss for the quarter was $1.4 million, or $0.07 per share,
 compared to fiscal 2000 second quarter net loss of $21.0 million, or $1.04 per
 share, on revenues of $68.6 million.  The net loss for the fiscal 2000 second
 quarter included a $27.0 million pre-tax lower of cost or market charge to
 cost of sales to reduce the carrying value of the cranberry inventory.  That
 charge on an after-tax basis was approximately $16.5 million, or $.81 per
 share.
     For the six-month period ended February 28, 2001, the company reported
 revenues of $77.2 million.  Net loss for the period was $1.2 million, or
 $0.06 per share. During the comparable period last year, net loss was
 $20.7 million, or $1.02 per share, on revenues of $143.6 million.
     The company also reported that it is currently in default under the terms
 of its forbearance agreements with its bank lenders and an insurance company,
 and that it is in active negotiations with those lenders regarding potential
 refinancing and other measures designed to regain compliance with the terms of
 those agreements and the company's other debt arrangements.
     John Swendrowski, Northland Chairman and CEO, stated "While our second
 quarter performance resulted in a loss, we feel we have made significant
 improvement over last year and that the elements in our restructuring plan and
 our renewed focus on emphasizing profitability over increasing sales are
 beginning to take effect.  Our selling, general and administrative expenses as
 a percentage of revenues decreased significantly during the first six months
 of fiscal 2001, primarily as a result of tighter control over expenses,
 decreased staff levels and the restructure of our sales and marketing
 operations.  At the operating level, prior to interest and tax considerations,
 we generated income of $691,000 for the quarter and $4.9 million for the
 six-month year-to-date period.
     "Our branded sales efforts continue to be adversely impacted by heavy
 price discounting and promotional activity by our competitors.  However, we
 expect improvement over time as consumers become aware of the reformulation of
 our entire product line to contain 27% cranberry juice.  We are currently
 conducting a print media campaign in national magazines designed to introduce
 the reformulated products to our target audience.
     "Obviously, refinancing of our bank debt remains one of our top
 priorities.  Although we are in default of certain covenants in our
 forbearance agreements, we are continuing to negotiate with our current
 lenders in an effort to restructure our debt.  We are also investigating
 numerous other financing alternatives and strategic options," Swendrowski
 said.
     Northland is a vertically integrated grower, handler, processor and
 marketer of cranberries and value-added cranberry products.  The company
 processes and sells Northland brand 100% juice cranberry blends, Seneca brand
 juice products, Northland brand fresh cranberries and other cranberry products
 through retail supermarkets and other distribution channels.  Northland also
 sells cranberry and other fruit concentrates to industrial customers who
 manufacture juice products.  With 24 growing properties in Wisconsin and
 Massachusetts, Northland is the world's largest cranberry grower.  It is the
 only publicly-owned, regularly-traded cranberry company in the United States,
 with shares traded on the Nasdaq Stock Market under the listing symbol CBRYA.
 
           (Condensed Consolidation Statements of Operations Follow)
 
               SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
     Certain matters discussed in this press release are "forward-looking
 statements," including statements about the Company's future plans, goals and
 other events, which have not yet occurred.  These statements are intended to
 qualify for the safe harbors from liability established by the Private
 Securities Litigation Reform Act of 1995.  They can generally be identified
 because the context of such statements will include words such as "believes,"
 "anticipates," "expects," or words of similar import.  Whether or not these
 forward-looking statements will be accurate in the future will depend on
 certain risks and factors including risks associates with (i) the development,
 market share growth and continued consumer acceptance of the Company's branded
 juice products, including consumer acceptance of its new 27% Solution; (ii)
 the disposition of certain litigation related to the sale of the net assets of
 the Company's private label juice business; (iii) the implementation of a
 marketing order of the United States Department of Agriculture, if any,
 relative to the 2001 crop year, as well as the cranberry purchase program
 adopted by the United States Congress; (iv) agricultural factors affecting the
 Company's crop and the crop of other North American growers; (v) the Company's
 ability to comply with the terms and conditions of, and to satisfy its
 responsibilities under, its amended credit facility and other debt agreements,
 with respect to which the Company is currently in default of certain covenants
 as well as certain principal and interest payment provisions, as well as the
 Company's forbearance agreements; (vi) the Company's ability to secure
 additional financing and/or generate sufficient cash from operations as may be
 necessary to fund working capital requirements and continue as a going
 concern; (vii) the results of the previously announced exploration of
 strategic alternatives; (viii) the results of the Company's internal
 organizational restructuring, including, without limitation, the results of
 the restructuring of certain sales and marketing functions through an
 agreement with Crossmark, Inc.; (ix) the Company's ability to manage its trade
 payables; and (x) the Company's ability to continue to meet the listing
 requirements of The Nasdaq National Market, including, without limitation, the
 requirement that its Class A Common Stock maintain a  minimum bid price above
 $1.00 per share.  Readers should consider these risks and factors and the
 impact they have when evaluating these forward-looking statements.  These
 statements are based only on management's knowledge and expectations on the
 date of this press release.  The Company will not necessarily update these
 statements or other information in this press release based on future events
 or circumstances.
 
                          NORTHLAND CRANBERRIES, INC.
                CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                   (DOLLARS IN THOUSANDS, EXCEPT SHARE DATA)
                                  (Unaudited)
 
                                For the three                 For the six
                                months ended                  months ended
                         February 28,  February 29,   February 28, February 29,
                              2001         2000          2001          2000
 
     Revenues               $32,447       $68,621      $77,209      $143,588
 
     Cost of sales           20,487        73,041       50,646       124,596
 
     Gross profit (loss)     11,960        (4,420)      26,563        18,992
 
       Selling, general and
        administrative
        expenses             11,271        26,600       22,105        46,547
       Gain on disposals of
        property & equipment     (2)           --         (412)           --
 
     Income (loss) from
      operations                 691      (31,020)       4,870        (27,555)
 
     Interest expense          4,818        3,492        9,503          6,403
     Interest income            (682)          --       (1,376)            --
 
     Loss before income
      taxes                   (3,445)     (34,512)      (3,257)       (33,958)
 
     Income tax benefit       (2,092)     (13,476)      (2,092)       (13,244)
 
     Net loss                $(1,353)    $(21,036)     $(1,165)      $(20,714)
 
     Net loss per share:
       Basic                  $(0.07)      $(1.04)      $(0.06)        $(1.02)
 
       Diluted                $(0.07)      $(1.04)      $(0.06)        $(1.02)
 
     Shares used in
      computing net loss
      per share:
 
       Basic              20,338,423   20,338,423   20,338,423     20,338,423
       Diluted            20,338,423   20,338,423   20,338,423     20,338,423
 
 SOURCE  Northland Cranberries, Inc.