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 July 31, 2002.
[ ] 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: 0-16787
YOCREAM INTERNATIONAL, INC.
(Exact name of registrant as specified in its charter)
Oregon 91-0989395
(State or other jurisdiction of (I.R.S. Employer Identification
incorporation or organization) Number)
5858 N.E. 87th Avenue 97220
Portland, Oregon
(Address of Principal Executive (Zip Code)
Office)
(503) 256-3754
(Registrants 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 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
such filing requirements for the past 90 days.
YES X NO _____
The number of shares outstanding of the registrants common stock, as of
the latest practicable date is:
Class: Common stock outstanding at
August 23, 2002: 2,249,978 shares
YOCREAM INTERNATIONAL, INC.
CONTENTS
Page
PART I FINANCIAL INFORMATION:
Item 1. Financial Statements
Balance Sheets as of July 31, 2002 3
(unaudited), and October 31, 2001
Statements of Income for the 4
Three Months ended July 31, 2002 and 2001,
and the Nine Months ended July 31, 2002
and 2001(all unaudited)
Statements of Cash Flows for the 5
Nine Months ended July 31, 2002 and 2001
(all unaudited)
Notes to Financial Statements 6-8
Item 2. Managements Discussion and Analysis of 9-14
Financial Condition and Results of
Operations
PART II OTHER INFORMATION
Item 1. Legal Proceedings 14
Item 2. Changes in Securities 14
Item 3. Defaults upon Senior Securities 14
Item 4. Submission of Matters to a Vote of 14
Security Holders
Item 5. Other Information 14
Item 6. Exhibits and Reports on Form 8-K 15
SIGNATURES 14
PART 1. FINANCIAL INFORMATION
Item 1. Financial Statements
YOCREAM INTERNATIONAL, INC.
BALANCE SHEETS
July 31, October 31,
2002 2001
(Unaudited)
ASSETS
Current assets
Cash and cash equivalents $1,667,512 $1,161,661
Accounts receivable, net 1,625,369 1,039,003
Inventories 2,372,630 2,473,538
Other current assets 340,443 256,536
Total current assets 6,005,954 4,930,738
Fixed assets, net 4,370,004 4,344,981
Deferred tax asset - 5,000
Intangible and other long-term assets, net 315,400 309,050
$10,691,358 $9,589,769
LIABILITIES AND SHAREHOLDERS EQUITY
Current liabilities
Current portion of long-term debt $ 289,700 $ 344,676
Accounts payable 1,581,826 1,142,398
Income taxes payable 107,909 122,175
Other accrued liabilities 182,682 125,148
Total current liabilities 2,162,117 1,734,397
Long-term debt, less current portion 976,398 1,037,024
Deferred income taxes 107,900 -
Total liabilities 3,246,415 2,771,421
Shareholders equity
Preferred stock, no par value,
5,000,000 authorized; none issued - -
Common stock, no par value,
30,000,000 shares authorized;
2,249,978 and 2,262,583 shares
issued and outstanding 4,626,082 4,797,204
Retained earnings 2,818,861 2,021,144
Total shareholders equity 7,444,943 6,818,348
$10,691,358 $9,589,769
The accompanying notes are an integral part of the financial statements.
YOCREAM INTERNATIONAL, INC.
STATEMENTS OF INCOME
(Unaudited)
Three months ended Nine months ended
July 31, July 31,
2002 2001 2002 2001
Sales $6,289,553 $5,024,496 $14,244,837 $11,302,026
Cost of sales 4,477,676 3,527,654 10,088,736 7,978,248
Gross profit 1,811,877 1,496,842 4,156,101 3,323,778
Selling and marketing
Expenses 533,411 494,980 1,402,090 1,232,925
General and administrative
Expenses 517,887 446,761 1,441,156 1,270,642
Income from operations 760,579 555,101 1,312,855 820,211
Other income (expenses)
Interest income 3,653 3,265 9,814 15,193
Interest expense (11,556) (21,719) (37,950) (33,970)
Other, net ( 7,903) (18,454) (28,136) (18,776)
Income before taxes 752,676 536,647 1,284,719 801,434
Income tax provision 282,700 130,700 487,000 232,400
Net income $ 469,976 $ 405,947 $ 797,719 $ 569,034
Earnings per common share:
Basic $.21 $.18 $.35 $.25
Diluted $.21 $.18 $.35 $.25
The accompanying notes are an integral part of the financial statements.
YOCREAM INTERNATIONAL, INC.
STATEMENTS OF CASH FLOWS
For the nine months ended July 31, 2002 and 2001
(Unaudited)
2002 2001
Cash flows from operating activities:
Net income $ 797,719 $ 569,034
Adjustments to reconcile net
income to net cash provided by
operating activities:
Depreciation and amortization 456,615 399,353
Deferred income taxes 112,900 (4,900)
Change in assets and liabilities
Accounts receivable (586,366) (158,479)
Inventories 100,908 73,587
Other current assets (83,906) (148,426)
Other assets (14,709) (11,750)
Accounts payable 439,425 355,555
Income taxes payable (14,266) 102,345
Other accrued liabilities 57,536 25,796
Net cash provided by
operating activities 1,265,855 1,202,115
Cash flows from investing activities:
Expenditures for fixed assets (473,280) (2,170,519)
Net cash used in investing
Activities (473,280) (2,170,519)
Cash flows from financing activities:
Proceeds from issuance of long-term debt 156,500 1,400,000
Proceeds from exercise of stock options 290,280 40,250
Principal payments on long term debt (272,102) (103,159)
Repurchase of common stock (461,402) (84,776)
Net cash provided by (used in)
financing activities (286,724) 1,252,315
Net increase in cash and
Equivalents 505,851 283,911
Cash and equivalents, beginning of period 1,161,661 719,139
Cash and equivalents, end of period $1,667,512 $1,003,050
The accompanying notes are an integral part of the financial statements.
YOCREAM INTERNATIONAL, INC.
NOTES TO FINANCIAL STATEMENTS
Note A - Basis of Presentation
The accompanying unaudited financial statements have been prepared in accor-
dance with generally accepted accounting principles for interim financial
information and with the instructions to Form 10-Q and Rule 10-01 of Regulation
S-X. Accordingly, they do not include all of the information and footnotes
required by generally accepted accounting principles for complete financial
statements. In the opinion of management, all adjustments, which consist of
normal recurring accruals, considered necessary for a fair presentation have
been included. Operating results for the third quarter and nine months ended
July 31, 2002 are not necessarily indicative of the results that may be
expected for the year ending October 31, 2002. For further information, refer
to the financial statements, and footnotes thereto, included in the Corpo-
rations annual report on Form 10-K for the year ended October 31, 2001.
Note B - Accounting for Certain Sales Incentives
In accordance with the provisions of Emerging Issues Task Force (EITF)
Pronouncement 00-14, which provides guidance regarding the timing of recog-
ition of income, and the classification of costs incurred for certain sales
incentives as a reduction of sales, the Company adopted the required accounting
changes in the first quarter of fiscal 2002. Accordingly, sales rebates are
presented as a reduction of sales in fiscal year 2002. Such expenses amounted
to $93,634 and $244,854, respectively for the third quarter and nine months
ended July 31, 2002. Similar expenses in the prior year have been reclassified
as a reduction of sales, rather than as a sales and marketing expense. Such
expenses amounted to $69,603 and $156,116, respectively for the third quarter
and nine months ended July 31, 2001. This had no effect on net income as
previously reported.
Note C - Reclassifications
Certain amounts previously reported as general and administrative expense in
the prior year have been reclassified to cost of goods sold to conform to the
current years presentation.
Note D - Inventories
July 31, October 31,
2002 2001
Inventories consist of
Finished goods $1,650,963 $1,931,184
Raw materials 468,145 329,512
Packaging materials and supplies 253,522 212,842
$2,372,630 $2,473,538
NOTES TO FINANCIAL STATEMENTS - Continued
Note E - Note Payable to Bank
The Company has an uncollateralized bank line of credit which permits bor-
rowings of up to $2,000,000. The line bears interest at the banks commer-
cial lending rate. The line is subject to renewal by July 2003. There were
no borrowings outstanding at July 31, 2002, or October 31, 2001.
The Company has arranged a finance lease with its bank, which permits
borrowings of up to $425,000 to finance equipment. The lease agreement
provides for payments over seven years with interest at 30 day LIBOR plus 200
basis points. The agreement also provides the option to fix the rate during the
term. At July 31, 2002, long-term debt includes $156,000 of obligations, which
the Company intends to finance under this lease agreement.
Note F - Earnings Per Share
Earnings per share is calculated as follows for the three months ended
July 31, 2002 and 2001:
Three Months Ended July 31, 2002
Net Earnings Shares Per-Share
(Numerator) (Denominator) Amount
Basic earnings per share:
Net earnings $469,976 2,248,883 $ .21
Effect of dilutive securities - 29,133 -
Diluted earnings per share $469,976 2,278,016 $ .21
Three Months Ended July 31, 2001
Net Earnings Shares Per-Share
(Numerator) (Denominator) Amount
Basic earnings per share:
Net earnings $405,947 2,262,191 $ .18
Effect of dilutive securities - 6,340 -
Diluted earnings per share $405,947 2,268,531 $ .18
NOTES TO FINANCIAL STATEMENTS - Continued
Earnings per share is calculated as follows for the nine months ended
July 31, 2002 and 2001:
Nine Months Ended July 31, 2002
Net Earnings Shares Per-Share
(Numerator) (Denominator) Amount
Basic earnings per share:
Net earnings $797,719 2,254,338 $ .35
Effect of dilutive securities - 16,215 -
Diluted earnings per share $797,719 2,270,553 $ .35
Nine Months Ended July 31, 2001
Net Earnings Shares Per-Share
(Numerator) (Denominator) Amount
Basic earnings per share:
Net earnings $569,034 2,262,243 $ .25
Effect of dilutive securities - 9,657 -
Diluted earnings per share $569,034 2,271,900 $ .25
Note G - Contingency
Subsequent to July 31, 2002, the Company received notification from a third
party freight auditor representing a customer of the Company. The notification
implied that the customer may be entitled to up to $140,000 for additional
freight charge reimbursements for shipments that occurred in 1999 and 2000.
The Company is currently investigating this matter and management has not been
able to determine the validity or the effects, if any, on the Companys
financial statements.
Item 2. Managements Discussion and Analysis of Financial Condition and
Results of Operations.
The following discussion includes forward-looking statements within the meaning
of the "safe-harbor" provisions of the Private Securities Litigation Reform Act
of 1995. Such forward-looking statements are based on the beliefs of the
Companys management and on assumptions made by and information currently
available to management. All statements other than statements of historical
fact, regarding the Companys financial position, business strategy and plans
and objectives of management for future operations of the Company are forward-
looking statements. When used herein, the words "anticipate," "believe,"
"estimate," "expect," and "intend" and words or phrases of similar meaning, as
they relate to the Company or management, are intended to identify forward-
looking statements. Although the Company believes that the expectations
reflected in such forward-looking statements are reasonable, it can give no
assurance that such expectations will prove to have been correct. Forward-
looking statements are subject to certain risks and uncertainties, which could
cause actual results to differ materially from those indicated by the forward-
looking statements. These risks and uncertainties include the Companys ability
to maintain or expand its distribution abilities, including the risk of
disruptions in the transportation system and relationships with brokers and
distributors. Further, actual results may be affected by the Companys ability
to compete on price and other factors with other manufacturers and distributors
of frozen dessert products; customer acceptance of new products; general trends
in the food business as they relate to customer preferences for the Companys
products; and the Companys ability to obtain raw materials and produce finished
products in a timely manner, as well as its ability to develop and maintain its
co-packing relationships and strategic alliances. In addition, there are risks
inherent in dependence on key customers, the loss of which could materially
adversely affect the Companys operations. The reader is advised that this list
of risks is not exhaustive and should not be construed as any prediction by the
Company as to which risks would cause actual results to differ materially from
those indicated by the forward-looking statements.
Results of Operations
Sales
YoCreams primary focus is on the manufacture, marketing and sales of superior
quality frozen yogurt, frozen custard, sorbet, smoothie, coffee latte and ice
cream products in a variety of premium, low-fat, and nonfat flavors in either
non-organic or organic formulations. The Company also co-packs similar
products for other companies. Due to the nature of these products, sales are
subject to seasonal fluctuations, with the summer months normally being the
busiest season. The introduction and roll out of new products has tended to
level the seasonal fluctuations.
The Companys sales increased 25.2% to $6,290,000 for the third quarter, and
increased 26.0% to $14,245,000 for the nine months ended July 31, 2002,
compared to the corresponding periods in 2001.
The exceptional sales growth experienced over the last five quarters has been
broad-based with increases in all categories of the Companys business: club
store, foodservice and co-packing. Following the first half of fiscal 2001,
which was impacted by the downturn in the economy, the Company reported sales
increases of 7.9%, 14.3%, 22.5%, 30.0% and 25.2%, respectively.
For the nine months ended July 31, 2002 and 2001 the breakdown of sales by
product are as follows:
% % Dollar %
Category 2002 Total 2001 Total Increase Increase
Yogurt $7,529,000 52.9% $6,041,000 53.5% $1,488,000 24.6%
Smoothies 5,247,000 36.8% 4,967,000 43.9% 280,000 5.6%
Coffee Latte 907,000 6.4% 59,000 .5% 848,000 1437%
Custard and 342,000 2.4% 52,000 .5% 290,000 558%
Ice Cream
Copacking 220,000 1.5% 183,000 1.6% 37,000 20.2%
Total $14,245,000 100% $11,302,000 100% $2,943,000 26.0%
The 24.6% increase in yogurt sales has been due to increases in sales to both
Costco Wholesale and other foodservice distributors. Sales to Costco have
increased due to the opening of new stores, and other innovative programs,
which have increased same store sales of the Companys yogurt products. Sales
to other foodservice distributors have increased primarily as a result of the
Companys strategic alliance with The Dannon Company, Inc., which began in
April 2001, and the efforts of the Companys foodservice sales staff.
Following the expansion of the Companys field sales personnel, and the
completion of a major upgrade of its plant facility in January 2001, the
Company successfully entered into a strategic alliance with The Dannon Company
in April 2001. The purpose of the alliance is for Yocream to supply soft serve
frozen yogurt to Dannons foodservice customers. By July 2001 the alliance had
provided the Company with several new brokers and distributors in previously
untapped markets. It also facilitated accessing national and international
accounts that had not been penetrated in the past, including military
installations and governmental agencies. Under the terms of the alliance
agreement, Dannon currently receives a royalty from the sales of YoCream
product to Dannons previous customers.
The major plant upgrade project increased plant processing capacity by over
150% and provided additional manufacturing flexibility. This was a factor in
bringing about the alliance.
In October 2001, the Company announced that the alliance with The Dannon
Company was expanded, beyond selling yogurt to Dannons foodservice customers,
to include a co-branded line of soft serve frozen yogurt. The top-quality
product line is Dannon / YoCream and includes more than forty flavors of soft
serve frozen yogurt. The co-branded line utilizes YoCream formulas and
includes nonfat, low fat, and no-sugar-added flavors.
The Company is in the process of completing the roll out of the
Dannon / YoCream Frozen Yogurt co-brand. The brand has been well accepted
nationwide and has helped increase sales in the East Coast markets where there
is strong Dannon brand recognition, and YoCream had less penetration. The
Dannon alliance continues to be effective with increased sales activity,
including joint sales calls. The companies are also jointly working on sales
and marketing programs that are expected to result in increased exposure for
both brands.
The Dannon alliance was instrumental in YoCreams transition into the Military
segment, which has been a significant contributor to the increase in yogurt
sales this year. The Companys focus on this market is resulting in stable
growth. We participate in all of the DSCP (Defense Supply Center of
Philadelphia) programs and selectively advertise in government food service
publications. The Companys marketing efforts are expanding brand awareness
throughout the military as indicated by invitations to participate in menu
board meetings domestically. Internationally, our European, Asian and Middle
Eastern business is gradually expanding in all segments of the military. In
addition to selling Dannon / YoCream Frozen Yogurt, in June the Company
received approval and new NAPA (National Allowance Pricing Agreement) numbers
to sell YoCream soft serve frozen custard and 4 ounce novelty frozen custard
cups. Novelty items are in demand, because they do not require special
equipment, and they fulfill food service needs in channels such as commissary,
dining hall, and MWR (Moral, Welfare, and Recreation) facilities. The custard
cups provide opportunity to gain sales in an area where the Company has not had
a presence. Management expects to show these new products as well as frozen
yogurt at the worldwide GSA (General Service Administration) show in
Heidelberg, Germany in October 2002.
The strength of the Dannon name along with YoCreams concentration on the
foodservice or on-premise marketplace is expected to offer significant
opportunities for increased sales and market share. Management believes that
the two companies are similar in philosophy, and both companies yogurt products
are known for their high live culture count, with an emphasis on product
quality and appeal to consumers with concerns for health and nutrition.
The 5.6% increase in smoothie sales primarily relates to dispenser smoothie
sales as a result of new store openings by Costco Wholesale, the primary
customer for this product line. However, the Company recently entered into a
three-year branded program with Garden Ridge Corporation to sell YoCream
Dispenser Smoothies to its stores. Garden Ridge, the home decor and craft
marketplace, is a Texas-based chain with 43 stores in thirteen states. YoCream
smoothies will be served in the Cafe, an in-store food service area providing
refreshments for shoppers. Garden Ridge is currently in the process of rolling
the product out to 18 stores. Management anticipates that sales to the 18
stores will generate approximately $200,000 to $300,000 in revenue over the
next 12 to 18 months for YoCream. In addition, the companies expect to roll
out the smoothie program system wide in 2003. The program increases YoCream
brand exposure in the Southwest and Southeast and broadens smoothie
distribution in these markets.
The significant increase in coffee latte sales relates to the early stages of
the rollout of this product to Costco Wholesale. The process first began last
year with a frozen product. The demand for this product has been so great that
it became necessary to move to the development of an aseptically packaged bag
of fresh, rather than frozen product. The Company is currently finalizing
plans with suppliers, machine manufacturers and an outside co-packer to develop
the most effective processing and packaging for this product. Currently this
product is being supplied to eighty stores, with equipment available to add an
additional forty stores as soon as the aseptic package is available. It is
expected that this product will be rolled out to the remaining stores in the
next fiscal year. The significant increase in custard and ice cream sales is
primarily due to the sale of soft server frozen custard to Runza Restaurants, a
64-unit chain based in Lincoln, Nebraska. On June 11, 2002, the Company
announced that it had signed a two-year contract and began supplying truckload
quantities of its soft serve frozen custard to the Runza chain. Management
anticipates that this new account will generate approximately $900,000 to
$1,400,000 in sales over the next 12 to 18 months.
The Companys strategy is to provide outstanding products and service, to
continue development of new products and markets, and to aggressively seek new
business relationships, of which the Dannon alliance is an example. This is
based on the belief that alliances with other reputable companies are strategic
to the Companys continued growth. The Company is currently in the process of
finalizing development of a new product category scheduled for release in the
fourth quarter of this fiscal year. The R&D department is instrumental in
supporting the sales and marketing efforts of the Company through continually
formulating new flavors and flavor modifications.
In accordance with the provisions of Emerging Issues Task Force (EITF)
pronouncement 00-14, which provides guidance regarding the timing of
recognition of income, and the classification of costs incurred for certain
sales incentives as a reduction of sales, the Company adopted the required
accounting changes in the first quarter of fiscal 2002. Accordingly, sales
rebates are presented as a reduction of sales in fiscal year 2002. Such
expenses amounted to $93,634 and $244,854, respectively for the third quarter
and nine months ended July 31, 2002. Similar expenses in the prior year have
been reclassified as a reduction of sales, rather than as a sales and marketing
expense. Such expenses amounted to $69,603 and $156,116, respectively for the
third quarter and nine months ended July 31, 2001. This had no effect on net
income as previously reported.
Gross Profit
The Companys gross profit margin decreased from 29.8% to approximately 28.8%
for the third quarter and from 29.4% to 29.2% for the nine-month periods in
both years.
The slight decrease in margins in the fiscal 2002 periods is primarily due to
the change in sales mix and a planned decrease in inventory levels. The
reduction in inventory levels has had the effect of reducing storage costs.
Management expects that with increases in sales, margins will improve as a
result of economies of scale.
Selling and Marketing Expenses
Selling and marketing expenses decreased, as a percentage of sales, from 9.9%
to 8.5% for the third quarter, and decreased from 10.9% to 9.8% for the nine
months. Sales and marketing expenses in total have increased due to
promotional expenses, an increase in field staff, and travel expenses related
to supporting the sales expansion. Management believes that the opportunities
merit the intensified sales and marketing activities.
General and Administrative Expenses
General and administrative expenses decreased, as a percentage of sales, from
8.9% to 8.2% of sales for the quarter, and decreased from 11.2% to 10.1% for
the nine months. These expenses have decreased as a percentage of sales due to
the increase in sales volume. General and administrative expenses have
increased in total primarily due to professional fees, insurance, and personnel
related expenses.
Income from Operations
Income from operations increased 37.0% to $760,600 for the third quarter of
2002, which was 12.1% of sales compared to 8.8% for the corresponding quarter
last year. The results for the nine months ended July 31, 2002 reflected an
increase of 60.1% to $1,313,000, or 9.2% of sales, while the corresponding
results in 2001 represented 7.3% of sales. This substantial improvement in the
fiscal 2002 periods is primarily due to the increase in sales volume and
related gross profit, along with the control of expenses.
Provision for Income Taxes
The effective tax rate is approximately 37.9% for the nine months in fiscal
2002. This is down slightly from earlier periods as a result of an increase in
research and development tax credits related to the ongoing development of new
products referenced earlier. In fiscal 2001, the rate was 29% for the nine
months, and 24.4% for the third quarter. In the 2001 third quarter, the
estimated effective tax rate for the year was reduced by research and
development tax credits of approximately $145,000 relating to several years.
This resulted in a lower than normal rate in 2001.
Net Income
Net income for the quarter ended July 31, 2002 increased 15.8% to $470,000, or
7.5% of sales, compared to $406,000, or 8.1% for the same quarter last year.
Net income for the nine months ended July 31, 2002 increased 40.2% to $798,000,
or 5.6% of sales, compared to $569,000, or 5.0% for the same period last year.
Liquidity and Capital Resources.
In recent years, the Company has financed its operations and expansion from
bank loans, operating leases, capital leases, stock sales, and internally
generated funds.
As of July 31, 2002, there were no borrowings under the Companys $2 million
bank line of credit. The line of credit remains in place and permits
borrowings subject to the Company being in compliance with certain ratios and
negative covenants. Interest on the line of credit is at the bank's basic
commercial lending rate.
Expenditures for plant and equipment of approximately $473,000 in the nine
months ended July 31, 2002 were significantly less than the $2,171,000 spent in
the same period last year during the plant upgrade project. Capital
expenditures in fiscal 2002 are not expected to exceed $600,000.
The Company has arranged a finance lease with its bank, which permits
borrowings of up to $425,000 to finance equipment. The lease agreement
provides for payments over seven years with interest at 30 day LIBOR plus 200
basis points. The agreement also provides the option to fix the rate during
the term. At July 31, 2002, long-term debt includes $156,000 of obligations,
which the Company intends to finance under this lease agreement.
The Company follows the practice of repurchasing its common stock from time to
time. Repurchases, net of options exercised, during the nine months ended July
31, 2002 amounted to $254,623. During the nine months ended July 31, 2002, the
Company purchased 71,913 shares of its common stock, including 59,500 shares
related to stock options exercised by certain employees. In the same period in
2001, the Company purchased 392 shares of its common stock on the open market,
and 23,000 shares related to stock options exercised by certain employees.
Accounts receivable at July 31, 2002 and October 31, 2001 were $1,625,000 and
$1,039,000, respectively. This increase of 56.4% is primarily attributable to
the higher sales in July 2002 compared to October 2001. The current level of
receivables is also higher than the July 31, 2001 total of $1,156,000, due to
the sales growth in the current year.
Inventories at July 31, 2002 and October 31, 2001 were $2,373,000 and
$2,474,000 respectively. The current dollar level is also lower than the July
31, 2001 total of $2,424,000 due to managements plan to reduce inventory
levels.
At July 31, 2002 the Company had working capital of approximately $3,844,000
compared with $3,196,000 at October 31, 2001, and $3,002,000 at July 31, 2001.
The increase from July 2001 is primarily due to the effect of earnings and cash
flow.
The Company believes its existing assets, bank lines, and cash flow from
operations will be sufficient to fund the Company's operations for at least the
next twelve months.
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
The Company is not involved in any material pending legal proceedings,
other than non-material legal proceedings occurring in the ordinary
course of business.
Item 2. Changes in Securities
None.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Submission of Matters to Vote of Security Holders
None
Item 5. Other Information
None
Item 6. Exhibits and Reports on Form 8-K
A. Exhibits - 99.1 Certification of Chief Executive Officer and Chief
Financial Officer
B. Reports on Form 8-K - None
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Registrant:
YOCREAM INTERNATIONAL, INC.
Date: August 28, 2002 By: /s/ John N. Hanna
John N. Hanna, Chairman of the
Board, and Chief Executive
Officer
Date: August 28, 2002 By: /s/ W. Douglas Caudell
W. Douglas Caudell, Chief
Financial Officer
Exhibit 99.1
CERTIFICATION OF
CHIEF EXECUTIVE OFFICER AND CHIEF FINANCIAL OFFICER
This certification is given by the undersigned Chief Executive Officer and
Chief Financial Officer of YoCream International, Inc. (the Registrant)
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. Each of the
undersigned hereby certifies, with respect to the Registrants quarterly report
of Form 10-Q for the period ended July 31, 2002 as filed with the Securities
and Exchange Commission on the date hereof (the Report), that:
(1) The Report fully complies with the requirements of section 13(a) or
15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all
material respects, the financial condition and result of operations
of the Company.
/s/ John N. Hanna
John N. Hanna
Chief Executive Officer
YoCream International, Inc.
/s/ W. Douglas Caudell
W. Douglas Caudell
Chief Financial Officer
YoCream International, Inc.
August 28, 2002