From GBUR's 5/17 10 Q. This is followed by their recent stellar performance in the 2nd qtr For the 3 months ended 06/30/1999, revenues were 22,228; after tax earnings were -10,539.
Looks like shareholders are headed for the deep end with lead booties.
also here's reuters take
biz.yahoo.com
Looks to me like the meatless veggieburger company is dead meat
Hope Gruntal or ML can get me a borrow, Datek doesn't have any.
Whoever'sbuy this on the bounce can't read a balance sheet/
Mad2
BTW who the on this earth runs a business and turns inventory twice a year?
LIQUIDITY AND CAPITAL RESOURCES
At March 31, 1999 working capital was $2.7 million, including $1.7 million of cash and cash equivalents. In the first quarter of 1999, working capital decreased by $4.7 million compared to December 31, 1998 and the current ratio decreased to 1.1:1 from 1.3:1.
Cash and cash equivalents decreased $636,000 from December 31, 1998 primarily due to $3.1 million used in operations, offset by $2.1 million in proceeds from the Company's line of credit and $375,000 of proceeds from the exercise of stock options.
Accounts receivable decreased $8.6 million to $6.4 million at March 31, 1999 from $15.0 million at December 31, 1998 due primarily to significant sales at the end of 1998 that were collected during the first quarter of 1999. Days sales outstanding decreased to 42 at March 31, 1999 from 47 at December 31, 1998.
Inventories increased $4.7 million to $17.2 million at March 31, 1999 from $12.5 million at December 31, 1998 in order to support the increased level of sales expected in the second quarter of 1999 as well as to help ensure adequate stock during a transition period as the second production line comes on line in Clearfield and the Portland facility ceased operations. Inventory turned 2.0 times on an annualized basis for the first quarter of 1999 compared to 5.3 times on an annualized basis for the fourth quarter of 1998.
Capital expenditures of $1.3 million during the first quarter of 1999 primarily resulted from expenditures for the Company's new management information system and for production equipment in Clearfield not covered under the company's operating leases. Capital expenditures are estimated to total approximately $4.0 million for 1999, primarily for information systems infrastructure and the second production line in Clearfield.
The Company has outstanding $15 million of 7 percent Convertible Senior Subordinated Notes (the "Notes") held by Dresdner Kleinwort Benson Private Equity Partners L.P. ("Dresdner"). The Notes are convertible into shares of the Company's Common Stock at the option of the holder until maturity in 2003, at which time they will be due in full if not previously converted. The Company may also elect to redeem the Notes, if not previously converted, at any time after two years from the date of issuance. The conversion price of the Notes at April 30, 1999 was $12.13 per share, as adjusted to reflect the issuance of convertible preferred stock as discussed below and the grant of certain stock options to employees and consultants. Under the terms of the Note Purchase Agreement relating to the Notes, the Company must comply with certain covenants and maintain certain financial ratios as follows: current assets to current
liabilities of at least 1.575 to 1.0, measured monthly; total liabilities, exclusive of the Notes, to tangible net worth, inclusive of the Notes, not to exceed 1.1 to 1.0, measured monthly; and a minimum fixed charge coverage ratio of 1.08 to 1.0, measured annually. At March 31, 1999, the Company was out of compliance with its financial ratio covenants under the Notes. The Company has received a waiver of compliance from Dresdner through the period ending December 31, 1999.
In April 1999, the Company consummated the sale of $32.5 million of convertible preferred stock to several investors pursuant to a stock purchase agreement entered into in March 1999. Under the terms of the agreement, the Company sold an aggregate of 2,762,500 shares of Series A convertible preferred stock and 487,500 shares of Series B convertible preferred stock to the investors, each at a price of $10 per share, or an aggregate consideration of $32.5 million. The preferred shares are convertible into shares of common stock at a conversion price of $10 per share at any time following issuance at the discretion of the holder. The Series B conversion price will be adjusted to $3.75 if the Company fails to meet specified performance targets for fiscal years 1999 and 2000. Both series of preferred stock are entitled to a 12 percent cumulative annual dividend payable upon redemption of the stock or in the event of a sale or liquidation of the Company. Shares may not be redeemed until five years after the original date of issuance, at which time they may be redeemed at the election of the holders or, under certain conditions, at the discretion of the Company.
In April 1999, the Company entered into an Amended and Restated Business Loan Agreement (the "Agreement") with Bank of America NT & SA. The Agreement provides for a credit line of up to $20 million with interest at the Bank's Reference Rate or, at the option of the Company, at LIBOR plus 1.25 percentage points or at the Offshore Rate plus 1.25 percentage points. The line of credit is available until June 1, 2000. The Agreement also provides for a standby letter of credit of up to $400,000 (included in the $20 million limit) with a maximum maturity of March 31, 2001. The Agreement provides that the line of credit is to be secured by all machinery, equipment, inventory, receivables and intangible assets of the Company.
The Company is required to meet certain financial covenants under the Agreement as follows:
- To maintain a current ratio of at least 1.5:1.0 measured monthly; - Not to incur an operating loss of more than $5 million for the year ending December 31, 1999; and - To maintain a minimum fixed charge coverage ratio of at least 1.25:1.00 measured on a rolling four-quarter basis, beginning December 31, 2000.
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