U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2001
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
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Commission file number: 1-9083
OVERHILL CORPORATION
(Exact name of registrant as specified in its charter)
Nevada 23-2708876
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
4800 Broadway, Suite A
Addison, Texas 75001
(Address of principal executive offices)
(972) 386-0101
(Registrants's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15 (d) of the Exchange Act during the past 12
months (or for such shorter period the registrant was required to file such
reports), and (2) has been subject to such filing requirements for the past 90
days.
Yes X No
------------- -------------
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Common Stock, $.01 par value 17,827,464
--------------------------
Outstanding at May 4, 2001
OVERHILL CORPORATION
FORM 10-Q
QUARTER ENDED MARCH 31, 2001
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TABLE OF CONTENTS
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PART I. FINANCIAL INFORMATION Page No.
----------------------------- --------
Item 1. Financial Statements
Consolidated Condensed Balance Sheets as of
March 31, 2001 and September 30, 2000 2
Consolidated Condensed Statements of
Operations for the Three Months Ended
March 31, 2001 and 2000 4
Consolidated Condensed Statements of
Operations for the Six Months Ended
March 31, 2001 and 2000 5
Consolidated Condensed Statements of
Cash Flows for the Six Months Ended
March 31, 2001 and 2000 7
Notes to Consolidated Condensed Financial Statements 9
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 15
Item 3. Quantitative and Qualitative Disclosures about Market Risk 16
PART II - OTHER INFORMATION
---------------------------
Item 1. Legal Proceedings 17
Item 4. Submission of Matters to a Vote of Security Holders 17
Item 6. Exhibits and Reports on Form 8-K 18
Signature Page 19
-1-
OVERHILL CORPORATION AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
Assets
March 31, September 30,
------------- -------------
2001 2000
------------- -------------
(Unaudited)
Current assets:
Cash $ 1,331,026 $ 1,522,347
Receivables, net of allowance for doubtful accounts
of $448,359 and $433,359
Trade accounts 19,841,039 20,399,265
Current portion of sales contracts 3,637,387 4,145,318
Notes 4,452,994 3,642,112
Inventories 34,714,699 36,120,187
Prepaid expenses and other 3,839,582 3,062,932
------------- -------------
Total current assets 67,816,727 68,892,161
------------- -------------
Property and equipment:
Land 432,000 432,000
Buildings and improvements 3,808,658 3,792,009
Machinery, equipment and other 12,851,005 11,986,465
------------- -------------
17,091,663 16,210,474
Less-Accumulated depreciation (8,796,602) (8,281,568)
------------- -------------
8,295,061 7,928,906
------------- -------------
Other assets:
Noncurrent receivables, net of allowance for
doubtful accounts of $1,200,000
Sales contracts 1,964,294 2,094,718
Related parties 1,344,528 1,202,183
Excess of cost over fair value of net assets of businesses
acquired, net of accumulated amortization of $5,244,244
and $4,687,461 16,357,570 16,881,886
Other intangible assets 1,446,948 1,734,858
Restricted cash 567,730 633,124
Assets held for sale 1,926,264 1,926,264
Other 3,467,908 3,338,653
------------- -------------
27,075,242 27,811,686
------------- -------------
$103,187,030 $104,632,753
============= =============
The accompanying notes are an integral part
of these consolidated financial statements.
-2-
OVERHILL CORPORATION AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS (continued)
Liabilities and Stockholders' Equity
March 31, September 30,
------------ ------------
2001 2000
------------ ------------
(Unaudited)
Current liabilities:
Notes payable $ 9,143,674 $ 7,674,131
Accounts payable 16,987,896 14,903,684
Accrued expenses and other 3,437,392 4,004,971
Current maturities of long-term debt 3,325,208 3,891,579
------------ ------------
Total current liabilities 32,894,170 30,474,365
Long term debt, less current maturities 35,617,867 40,859,613
Note payable and accrued interest to related party 21,539,992 20,746,384
Reserve for credit guarantees 567,730 633,124
------------ ------------
Total liabilities 90,619,759 92,713,486
------------ ------------
Warrants to purchase common stock
in subsidiary 2,976,450 2,806,175
Stockholders' equity:
Common stock, $.01 par value, authorized
100,000,000 shares, issued and outstanding
17,827,464 and 17,812,464 shares 178,275 178,125
Paid-in capital 27,612,146 27,650,734
Accumulated deficit (18,199,600) (18,715,767)
------------ ------------
Total stockholders' equity 9,590,821 9,113,092
------------ ------------
$103,187,030 $104,632,753
============ ============
The accompanying notes are an integral part
of these consolidated financial statements.
-3-
OVERHILL CORPORATION AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)
For the Three Months Ended
March 31,
--------------------------
2001 2000
----------- -----------
Net revenues $49,117,414 $43,487,234
Cost of sales 39,726,720 34,691,213
----------- -----------
Gross profit 9,390,694 8,796,021
Selling, general and administrative expenses 6,984,190 5,976,604
----------- -----------
Operating income 2,406,504 2,819,417
----------- -----------
Other income (expenses):
Interest expense (2,032,586) (2,081,631)
Interest income and other 91,755 167,150
----------- -----------
Total other income (expenses) (1,940,831) (1,914,481)
----------- -----------
Income before income taxes and income allocable
to subsidiary warrant holder 465,673 904,936
Income taxes - (93,701)
Income allocable to subsidiary warrant holder (113,459) -
----------- -----------
Net income $ 352,214 $ 811,235
=========== ===========
Net income per share - basic and diluted $ .02 $ .05
=========== ===========
The accompanying notes are an integral part
of these consolidated financial statements.
-4-
OVERHILL CORPORATION AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)
For the Six Months Ended
March 31,
-------------------------
2001 2000
----------- -----------
Net revenues $95,845,989 $87,930,184
Cost of sales 77,855,038 69,691,471
----------- -----------
Gross profit 17,990,951 18,238,713
Selling, general and administrative expenses 13,556,469 12,293,214
----------- -----------
Operating income 4,434,482 5,945,499
----------- -----------
Other income (expenses):
Interest expense (4,205,672) (4,074,355)
Interest income and other 457,632 331,876
----------- -----------
Total other income (expenses) (3,748,040) (3,742,479)
----------- -----------
Income before income taxes, income allocable to
subsidiary warrant holder and extraordinary item 686,442 2,203,020
Income taxes - (112,442)
Income allocable to subsidiary warrant holder (170,275) -
----------- -----------
Income before extraordinary item 516,167 2,090,578
Extraordinary item--early extinguishment of debt - (1,290,431)
----------- -----------
Net income 516,167 800,147
Gain on reacquired preferred stock - 351,457
----------- -----------
Net income attributable to common stockholders $ 516,167 $ 1,151,604
=========== ===========
The accompanying notes are an integral part
of these consolidated financial statements.
-5-
OVERHILL CORPORATION AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS (continued)
(Unaudited)
For the Six Months Ended
March 31,
-------------------------
2001 2000
----------- -----------
Net income per share - basic and diluted:
Before extraordinary item $ .03 $ .13
Extraordinary item - (.07)
---------- ----------
Net income per share: $ .03 $ .06
========== ==========
The accompanying notes are an integral part
of these consolidated financial statements.
-6-
OVERHILL CORPORATION AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
For the Six Months Ended
March 31,
------------------------
2001 2000
----------- -----------
Cash flows provided by (used in) operating activities:
Net income $ 516,167 $ 800,147
Adjustments to reconcile net income to net
cash provided by (used in) operating
activities:
Depreciation and amortization 1,668,036 1,691,068
Provision for doubtful accounts 162,451 69,820
Income allocable to subsidiary warrant holder 170,275 -
Extraordinary item - 1,290,431
Changes in:
Accounts and sales contracts receivable 1,034,130 573,606
Inventories 1,405,488 (2,141,880)
Prepaid expenses and other (905,905) (910,922)
Accounts payable 2,084,212 (1,615,378)
Accrued expenses and other 226,029 61,799
----------- -----------
Net cash provided by (used in)
operating activities 6,360,883 (181,309)
----------- -----------
Cash flows provided by (used in) investing activities:
Notes and other receivables (810,882) (85,762)
Receivables from related parties (142,345) 293,062
Capital expenditures, net (934,965) (459,765)
----------- -----------
Net cash provided by (used in)
investing activities $(1,888,192) $ (252,465)
----------- -----------
The accompanying notes are an integral part
of these consolidated financial statements.
-7-
OVERHILL CORPORATION AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (continued)
(Unaudited)
For the Six Months Ended
March 31,
---------------------------
2001 2000
------------ ------------
Cash flows provided by (used in) financing
activities:
Net borrowings (principal payments) on line
of credit arrangements $ (1,887,983) $ 3,597,273
Borrowings on other notes payable and
long-term debt 185,205 28,000,000
Principal payments on long-term debt (2,922,796) (1,201,038)
Repayment of subordinated debt - (22,675,000)
Exercise of common stock options 7,500 -
Repurchase of stock purchase warrants (45,938) -
Redemption of Overhill Farms warrants - (3,700,000)
Deferred financing costs - (1,832,907)
Repurchase of preferred stock - (450,000)
------------ ------------
Net cash provided by (used in)
financing activities (4,664,012) 1,738,328
------------ ------------
Net increase (decrease) in cash (191,321) 1,304,554
Cash - beginning of period 1,522,347 375,408
------------ ------------
Cash - end of period $ 1,331,026 $ 1,679,962
============ ============
Supplemental schedule of cash flow information:
Cash paid during the period for :
Interest $ 2,921,064 $ 3,169,457
Income taxes $ 50,000 $ 5,000
Supplemental schedule of noncash investing and financing activities:
In November 1999, in connection with the Overhill Farms refinancing, warrants
were issued having an estimated fair market value of $2,370,000.
The accompanying notes are an integral part
of these consolidated financial statements.
-8-
OVERHILL CORPORATION AND SUBSIDIARIES
Notes to Consolidated Condensed Financial Statements
March 31, 2001
1. NATURE OF BUSINESS
Overhill Corporation, formerly Polyphase Corporation, (the "Company") is a
diversified holding company that, through its subsidiaries, operates in two
industry segments: the food segment and the forestry segment. The food
segment (the "Food Group"), which consists of the Company's 99% owned
subsidiary, Overhill Farms, Inc. ("Overhill"), produces high quality
entrees, plated meals, soups, sauces and poultry, meat and fish
specialities The Company's ownership of Overhill is subject to warrants
outstanding to purchase a minority position in Overhill. The forestry
segment (the "Forestry Group"), which consists of the Company's wholly-
owned subsidiary Texas Timberjack, Inc. ("Timberjack" or "TTI") and its
majority-owned subsidiaries Southern Forest Products LLC ("SFP") and Wood
Forest Products LLC ("WFP"), distributes, leases and provides financing for
industrial and commercial timber equipment and is also engaged in certain
related timber and sawmill operations.
2. BASIS OF PRESENTATION
The consolidated financial statements include the accounts of the Company,
its wholly-owned subsidiaries and its majority-owned subsidiaries. All
material intercompany accounts and transactions have been eliminated.
Certain prior year amounts have been reclassified to conform to the current
year presentation.
The financial statements included herein have been prepared by the Company,
without an audit, pursuant to the rules and regulations of the Securities
and Exchange Commission. Certain information and footnote disclosures
normally included in financial statements prepared in accordance with
generally accepted accounting principles have been condensed or omitted
pursuant to such rules and regulations. The Company believes that the
disclosures are adequate to make the information presented not misleading.
The information presented reflects all adjustments (consisting solely of
normal recurring adjustments) which are, in the opinion of management,
necessary for a fair statement of results for the interim periods when read
in conjunction with the financial statements and the notes thereto included
in the Company's latest financial statements filed as part of Form 10-K for
the year ended September 30, 2000.
-9-
3. INVENTORIES
Inventories are summarized as follows: March 31, September 30,
2001 2000
----------- -------------
Finished goods $25,015,259 $ 26,179,043
Raw materials 9,724,177 10,091,144
Inventory reserve (24,737) (150,000)
----------- -------------
Total $34,714,699 $ 36,120,187
=========== =============
As of March 31, 2001 and September 30, 2000, finished goods inventories
consisted of approximately $7,502,000 and $9,655,000 in inventories at the
Food Group, $16,519,000 and $15,690,000 in timber and logging related
equipment, and $994,000 and $834,000 in finished wood products,
respectively. As of March 31, 2001 and September 30, 2000, raw materials
inventories consisted of approximately $8,704,000 and $9,289,000 in
inventories at the Food Group and $1,020,000 and $802,000 in both
unharvested and harvested but unprocessed timber, respectively.
4. TAXES
For the six months ended March 31, 2001, the actual income tax expense
attributable to income from continuing operations differed from the net
amounts recorded by the Company. The Company's subsidiaries recorded a
provision for income taxes of approximately $700,000, based upon their
effective tax rates determined as if they were separate taxpayers; the
Company then applied a like amount of its existing valuation allowance as a
reduction of this amount, resulting in a net income tax provision for the
period of zero. The Company continues to maintain a valuation allowance
against a portion of its deferred tax assets due to uncertainty with
respect to the future recoverability of all such amounts.
5. LONG-TERM DEBT
In November 1999, Overhill Farms, Inc. refinanced substantially all its
existing debt. The new facility amounted to $44 million, consisting of a
$16 million line of credit provided by Union Bank of California, N.A.
("Union Bank"), together with $28 million in the form of a five-year term
loan provided by Levine Leichtman Capital Partners II, L.P. ("LLCP").
The line of credit with Union Bank expires in November 2002 and provides
for borrowings limited to the lesser of $16 million or an amount determined
by a defined borrowing base consisting of eligible receivables and
inventories. Borrowings under the line bear interest at a rate, as selected
by Overhill at the time of borrowing, of prime plus .25% or LIBOR plus
2.75%. The agreement contains various covenants including restrictions on
capital expenditures, requirements to maintain specified net worth levels
and debt service ratios, and generally prohibits loans, advances or
dividends from Overhill to the Company and limits payments of taxes and
other expenses to the parent company to specified levels. The line of
credit is guaranteed by the Company and collateralized by certain assets of
Overhill and the Overhill common stock owned by the Company.
-10-
The term loan with LLCP is a secured senior subordinated note bearing
interest at 12% per annum, with interest payable monthly until maturity in
October 2004. Principal payments in an amount equal to 50% of the excess
cash flow, as defined, for Overhill's previous fiscal year are also payable
annually; such payment in the amount of $2,020,000 was paid in January
2001. Voluntary principal payments are permitted after October 31, 2001,
subject to certain prepayment penalties. The agreement contains various
covenants including restrictions on capital expenditures, minimum EBITDA
and net worth levels, and specified debt service and debt to equity ratios.
In addition, the terms of the agreement restrict changes in control,
generally prohibit loans, dividends or advances by Overhill to the Company
and limit payments of taxes and other expenses to the parent company to
specified levels. The term loan with LLCP is guaranteed by the Company and
collateralized by certain assets of Overhill. The agreement also requires
Overhill to pay to LLCP, during each January, annual consulting fees of
$180,000.
In connection with the agreement, LLCP was issued warrants to purchase
17.5% of the common stock of Overhill, exercisable immediately at a nominal
exercise price. During the first two years following the date of the
agreement, Overhill has the right to repurchase 5% of Overhill's shares
from LLCP for $3 million and/or to repurchase all 17.5% of the Overhill
shares subject to the LLCP warrant within five days of the term loan being
repaid at their then determined fair market value. If such shares are not
purchased, LLCP will be entitled under the agreement to receive a cash
payment of $500,000 from Overhill. At the date of issuance, the warrants
granted to LLCP were estimated to have a fair value of $2.37 million.
As a result of the transactions, Overhill repaid in full the $22.7 million
senior subordinated notes and the $9.7 million balance of its revolving
line of credit with previous lenders. Additionally, Overhill repurchased,
for $3.7 million, the warrants held by a previous lender to purchase 30% of
Overhill's common stock; the excess of such repurchase amount over the
carrying value of the warrant amounted to approximately $2.3 million and
was recorded as goodwill. In connection with the refinancing, Overhill was
permitted to make a one-time advance of $1.25 million to the Company for
working capital and other specified purposes. Overhill incurred costs and
expenses in connection with the refinancing totaling approximately $1.9
million, substantially all of which has been, or will be, paid to the
lenders. The early extinguishment of the previous indebtedness resulted in
an extra ordinary loss of approximately $1.3 million (net of a $500,000
refund for early payment of the senior subordinated notes) during the six
months ended March 31, 2000.
-11-
6. EARNINGS PER SHARE
The following table sets forth the computations of basic and diluted
earnings per share:
For the Three Months Ended
March 31,
-----------------------
2001 2000
----------- -----------
Numerator:
Net income $ 352,214 $ 811,235
=========== ===========
Denominator:
Denominator for basic earnings per share-
weighted average shares 17,827,464 17,812,464
----------- -----------
Effect of dilutive securities:
Stock options 109,120 32,273
Warrants - -
----------- -----------
Dilutive potential common shares 109,120 32,273
----------- -----------
Denominator for diluted earnings per share 17,936,584 17,844,737
=========== ===========
Net income per share - basic and diluted $ .02 $ .05
=========== ===========
-12-
For the Six Months Ended
March 31,
------------------------
2001 2000
----------- -----------
Numerator:
Income before extraordinary item $ 516,167 $ 2,090,578
Gain on reacquired preferred stock - 351,457
----------- -----------
516,167 2,442,035
Extraordinary item - (1,290,431)
----------- -----------
Net income attributable to common
stockholders $ 516,167 $ 1,151,604
=========== ===========
Denominator:
Denominator for basic earnings per share-
weighted average shares 17,825,404 17,812,464
----------- -----------
Effect of dilutive securities:
Convertible preferred stock - 537,926
Stock options 75,417 3,739
Warrants - -
----------- -----------
Dilutive potential common shares 75,417 541,665
----------- -----------
Denominator for diluted earnings per share 17,900,821 18,354,129
=========== ===========
Net income per share - basic and diluted:
Before extraordinary item $ .03 $ .13
Extraordinary item - (.07)
----------- -----------
Net income per share $ .03 $ .06
=========== ===========
-13-
7. STOCKHOLDERS' EQUITY
Stock Options
During the period ended March 31, 2001, options to purchase 15,000 shares
of the Company's common stock, at an exercise of $.50 per share, were
exercised.
Warrants
During the period ended March 31, 2001, the Company repurchased warrants
covering 210,000 shares of its common stock, exercisable at $1.125 per
share, for total consideration of approximately $46,000.
Subsidiary Warrants
During the period ended March 31, 2001, warrants issued in 1997 to purchase
1% of the common stock of Overhill Farms, Inc., at an exercise price of
$50,000, were exercised.
Convertible Preferred Stock
During November 1999, the Company and Infinity Investors Limited, the
holder of a series of the Company's preferred stock, entered into an
agreement whereby, among other things, the Company agreed to repurchase all
remaining preferred stock owned by Infinity, including all accrued but
unpaid dividends, for $450,000 cash, and Infinity agreed to the dismissal
of all litigation against the Company with respect to various matters
related to its ownership of the preferred stock. As a result of the
settlement, the Company recorded a gain of approximately $351,000, related
to the difference in the carrying value of the preferred stock plus the
accrued dividends and the settlement amount. Such amount was accounted for
by recording a reduction of the Company's accumulated deficit during the
six months ended March 31, 2000.
-14-
Item 2. Management's Discussion and Analysis
Statements contained in this Form 10-Q that are not historical facts,
including, but not limited to, any projections contained herein, are
forward-looking statements and involve a number of risks and uncertainties.
The actual results of the future events described in such forward-looking
statements in this Form 10-Q could differ materially from those stated in
such forward-looking statements. Among the factors that could cause actual
results to differ materially are: adverse economic conditions, industry
competition and other competitive factors, government regulation and
possible future litigation.
Results of Operations
Revenues for the six months ended March 31, 2001 increased $7,916,000 (9%)
to $95,846,000 from $87,930,000 during the six months ended March 31, 2000.
The increase in revenues is primarily attributable to sales gains by
Overhill. Gross profits decreased $248,000 to $17,991,000 in the current
year from $18,239,000 in the comparable period in 2000, due to a decrease
in gross margin rates to 18.8% in the current year as compared to 20.7% in
the comparable period in fiscal 2000. During the current six month period,
operating income decreased to $4,434,000 from $5,945,000 in fiscal 2000.
Consolidated income before extraordinary item for the six months ended
March 31, 2001 decreased to $516,000 from $2,090,000 during the six months
ended March 31, 2000. After the effect in the prior year of an
extraordinary expense of $1,290,000 related to the early extinguishment of
debt in connection with major refinancing by Overhill Farms, and a gain of
$351,000 on the reacquisition of preferred stock, net income attributable
to common stockholders amounted to $516,000 ($.03 per share) in the current
year compared to $1,151,000 ($.06 per share) in fiscal 2000.
The Food Group's revenues increased $12,173,000 (18.2%) to $78,916,000 for
the six months ended March 31, 2001 as compared to $66,743,000 for the six
months ended March 31, 2000. Gross profits increased $578,000 to
$13,886,000, compared to $13,308,000 in the prior year. A decrease in the
gross margin rate to 17.6% in 2001 from 19.9% in 2000, as well as an
increase in operating expenses, were both attributable to startup expenses
related to the Chicago Brothers acquisition and increased energy costs in
the California based facilities and resulted in a decrease in operating
income to $4,695,000 in 2001 from $5,286,000 in 2000.
Revenues for the Forestry Group for the six months ended March 31, 2001
decreased $4,257,000 (20.1%) to $16,930,000 from $21,187,000 for the six
months ended March 31, 2000. Operating income for the same period decreased
$676,000 to $128,000 for the six months ended March 31, 2001 from $804,000
for the six months ended March 31, 2000. These decreases are due to a
continued softness in the East Texas timber market, affecting both the
Texas Timberjack core equipment business as well as its sawmill operations.
-15-
Liquidity and Capital Resources
During the six months ended March 31, 2001, the Company's operating
activities resulted in cash provided of approximately $6,361,000, compared
to a use of cash of $181,000 during the comparable period in fiscal 2000.
The cash provided in the current year is primarily due to the operations of
Overhill Farms, with decreases in receivables and inventories and increases
in trade accounts payable.
During the six months ended March 31, 2001, the Company's investing
activities resulted in a use of cash of approximately $1,888,000, compared
to a use of cash of $252,000 during the comparable period in fiscal 2000.
The Company's use of cash in the current year resulted primarily from
increases in notes receivable by Texas Timberjack and from capital
expenditures by both operating units.
During the six months ended March 31, 2001, the Company's financing
activities resulted in a use of cash of approximately $4,664,000 as
compared to cash provided of $1,738,000 during the comparable period in
fiscal 2000. The use of cash in the current year resulted consisted
primarily of principal payments on indebtedness by Overhill Farms.
The Company believes that funds available to it from operations and
existing capital resources will be adequate for its capital requirements
for the next twelve months.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
The Company's interest expense is affected by changes in prime and LIBOR
rates as a result of its various line of credit arrangements. If these
market rates increase by an average of 1%, the Company's interest expense
for the next twelve months would increase by approximately $225,000, based
on the outstanding line of credit balances at March 31, 2001.
The Company does not own, nor does it have an interest in any other market
risk sensitive instruments.
-16-
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
During fiscal 1997, five substantially identical complaints were filed in
the United States District Court for the District of Nevada against the
Company and certain of its current and past officers and directors. The
complaints each sought certification as a class action and asserted
liability based on alleged misrepresentations that the plaintiffs claimed
resulted in the market price of the Company's stock being artificially
inflated. Without certifying the cases as class actions, the District Court
consolidated the cases into a single action.
In March 2000, the District Court dismissed the plaintiffs' claims against
one of the Company's officers and directors and restricted the plaintiffs
from pursuing a number of their claims against the other defendants. The
Court also granted the remaining defendants leave to file motions for
summary judgment. Motions for summary judgment were thereafter filed,
pointing out that the evidence did not support the plaintiffs' claims. In
November 2000, in a lengthy decision addressing the plaintiffs' claims
against each of the remaining defendants, the Court granted the motions for
summary judgment, thereby disposing of all of the claims asserted by the
plaintiffs. The plaintiffs then filed a motion for rehearing which the
Court denied in March 2001. The decision in these suits, which the Company
maintained all along were without merit, has now been appealed by the
plaintiffs to the United States Court of Appeals for the Ninth Circuit.
The Company and its subsidiaries are involved in certain legal actions and
claims arising in the ordinary course of business. However, management
believes (based, in part, on advice of legal counsel) that such litigation
and claims will be resolved without material effect on the Company's
financial condition, results of operations or cash flows.
Item 4. Submission of Matters to a Vote of Security Holders
On March 1, 2001, the Company held its Annual Meeting of Stockholders (the
"Annual Meeting"). At the Annual Meeting, the following matters were
considered and voted upon:
(a) the election of four (4) directors of the Company; and
(b) the amendment of the Company's Articles of Incorporation to change
the Company's name to Overhill Corporation.
Elected as directors at the meeting were James Rudis, William E. Shatley,
Michael F. Buck and George R. Schrader.
-17-
The following table sets forth certain information relating to the voting
by stockholders on the matter referred to in (b) above
Votes Cast Votes Cast
For Against Withheld
---------- ---------- --------
13,540,254 113,628 11,700
Reference is made to the Company's definitive proxy statement, mailed on
January 31, 2001, to stockholders of record on January 9, 2001, for more
complete information relating to the matters discussed above.
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits
3.1 Certiifcate of Amendment of Articles of Incorporation, as
adopted by stockholders on March 1, 2001.
(b) Reports on Form 8-K - No reports on form 8-K were filed during
the quarter ended March 31, 2001.
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SIGNATURES
In accordance with the requirements of the Securities Exchange Act of 1934, the
registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
OVERHILL CORPORATION
(Registrant)
Date: May 7, 2001 By: /s/ James Rudis
------------------------
James Rudis
Chairman, President and
Chief Executive Officer
Date: May 7, 2001 By: /s/ William E. Shatley
------------------------
William E. Shatley
Senior Vice President and
Chief Financial Officer
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