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1
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
X ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
--- EXCHANGE ACT OF 1934
For the fiscal year ended May 30, 1999
OR
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 000-17896
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HANOVER FOODS CORPORATION
(Exact name of Registrant as specified in its charter)
PENNSYLVANIA 23-0670710
(State or other jurisdiction of incorporation or organization) (IRS Employer I.D. No.)
P.O. BOX 334, YORK STREET EXTENDED, HANOVER, PENNSYLVANIA 17331-0334
(Address of principal executive offices) (Zip code)
Registrant's telephone number including area code: (717) 632-6000
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:
Name Of Each Exchange On
Title Of Each Class Which Registered
------------------- ----------------
Class A Nonvoting Common Stock None
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, and (2) has been subject to such filing requirements
for the past 90 days. Yes X No
--- ---
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K.
---
As of August 10, 1999, the estimated aggregate market value of Class B Voting
Common Stock held by non-affiliates of the Registrant was $582,060. As of August
10, 1999, the estimated aggregate market value of Class A Nonvoting Common Stock
held by non-affiliates of the Registrant was $14,296,740. (The exclusion of the
market value of shares owned by any person shall not be deemed an admission that
such person is an "affiliate" of the Registrant.) There were 426,474 shares of
Class B Voting Common Stock outstanding as of August 10, 1999. There were
289,414 shares of Class A Nonvoting Common Stock outstanding as of August 10,
1999.
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PART I
ITEM 1. BUSINESS
Forward Looking Statements
When used in this Annual Report, the words or phrases "will likely result," "are
expected to," "will continue," "is anticipated," "estimate," "projected," or
similar expressions are intended to identify "forward looking statements" within
the meaning of the Private Securities litigation Reform Act of 1995. Such
statements are subject to certain risks and uncertainties, including but not
limited to quarterly fluctuations in operating results, competition, state and
federal regulation, environmental considerations, foreign operations and risks
associated with the Year 2000 Issue. Such factors, which are discussed in the
Annual Report, could affect the Corporation's financial performance and could
cause the Corporation's actual results for future periods to differ materially
from any opinion or statements expressed herein with respect to future periods.
As a result, the Corporation wishes to caution readers not to place undue
reliance on any such forward- looking statements, which speak only as of the
date made.
OVERVIEW
Hanover Foods Corporation (as used herein the term "Corporation" refers to
Hanover Foods Corporation and its consolidated subsidiaries) was incorporated on
December 12, 1924 in Harrisburg, Pennsylvania. The Corporation consists of three
(3) operating divisions: Hanover, L. K. Bowman Co., and Bickel's Potato Chip Co.
In addition, the Corporation has five (5) wholly-owned subsidiaries, Tri-Co.
Foods Corp., Consumers Packing Corporation, d/b/a Hanover Foods - Lancaster
Division, Spring Glen Fresh Foods, Inc., Hanover Insurance Corporation, Ltd.,
and Nittany Corporation. Tri-Co. Foods Corp. in turn has two (2) wholly-owned
subsidiaries, Alimentos Congelados Monte Bello, S.A., and Sunwise Corporation.
Originally, the Corporation was established to provide seasonal packing of
locally grown peas, beans and other vegetables. From this beginning, the
Corporation has grown to become one of the leading independent processors of
canned vegetables, frozen vegetables, frozen meat products, frozen entrees,
frozen soft pretzels, canned and frozen mushrooms, fresh foods and snack food
products in the eastern United States. The Corporation's raw materials are
readily available, and the Corporation is not dependent on a single supplier or
a few suppliers. This growth has resulted from the Corporation's extended scope
of operations, new product development and acquisitions. See "Risk Factors -
Industry Conditions and Price and Volume Fluctuations."
The Corporation is a vertically integrated processor of vegetable products in
one industry segment. It is involved in the growing, processing, canning,
freezing, freeze-drying, packaging, marketing and distribution of its products
under its own trademarks, as well as other branded, customer and private labels.
"See Risk Factors - General Risks of the Food Industry."
The Corporation enjoys its strongest retail sales in the mid-Atlantic states and
Florida. Introduction of frozen ethnic blends, specialty vegetables, canned
pasta, a frozen soft pretzel, refrigerated food, canned, frozen mushrooms and
snack food products has enabled the Corporation to increase and expand its
distribution throughout the eastern seaboard. Distribution in the remainder of
the United States is limited to food service, military and industrial customers.
OPERATIONS
The Corporation has operations at seven (7) plants in Pennsylvania, one (1)
plant in Delaware, one (1) plant in New Jersey, two (2) plants in Guatemala and
one (1) plant in California.
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PRODUCTS
The Corporation markets its products under the brand names HANOVER, HANOVER
FARMS, MYERS, PHILLIPS, GIBBS, SUPERFINE, MARYLAND CHIEF, MITCHELL'S, DUTCH
FARMS, SUNWISE, O&C (jarred onions only), SPRING GLEN FRESH FOODS, SUNNYSIDE
FOODS, NOTTINGHAM, BICKEL'S and DRAPER KING COLE. The products sold by the
Corporation under these brand names include canned vegetables, beans and pasta
as well as frozen vegetables, frozen meat products, food entrees, refrigerated
and fresh foods, canned and frozen mushrooms and potato chips. See "Management's
Discussion and Analysis of Financial Condition and Results of Operations - Year
Ended May 30, 1999 Results of Operations Compared to Year Ended May 31, 1998" in
the 1999 Annual Report attached hereto as Exhibit 13 (the "Annual Report").
DISTRIBUTION
The Corporation's products are marketed under its brand labels and customer
private labels to the consumer for home use and also to the food service trade
which includes restaurants, fast food chains, hospitals and schools as well as
military and other governmental uses. The Corporation's ten largest customers
account for approximately 35% of the Corporation's net sales for the fiscal year
ended May 30, 1999 and 21% of accounts receivable as of May 30, 1999. No single
customer accounted for more than approximately 10% of net sales for the fiscal
years ended May 30, 1999, May 31, 1998, and June 1, 1997. The Corporation's
products are distributed directly to its customers and indirectly via
independent distributors. Sales activities are conducted via Corporation
employed sales personnel and independent sales brokerage firms. The Corporation
also manufactures private label food products for other food companies.
COMPETITION
The Corporation markets its food products to the retail and food service sectors
in the northeastern, mid-Atlantic, southeastern and midwestern areas of the
United States. See "Risk Factors - Competition."
The principal methods of competition within the food processing industry are:
price, promotion, advertising, product quality and service.
The Corporation competes with national processors such as Agrilink Foods and
Campbell Foods and area processors such as Bush.
TRADEMARKS
The Corporation has various registered and unregistered trademarks, service
marks and licenses which are of material importance to the Corporation's
business.
BACKLOG OF ORDERS
The Corporation manufactures against customer forecasts and orders. While at any
given time there may be a backlog of orders, such backlog is not material to
total sales, nor are the changes from time to time significant.
RESEARCH AND DEVELOPMENT
The Corporation engages in research and development of new products and
improvement of existing products as well as the improvement and modernization of
its operating plants and equipment. See Note 1 of the Notes to Consolidated
Financial Statements in the Annual Report.
REGULATION
The Corporation's operations, as is the case of all food companies, are subject
to strict regulation by the U.S. Food and Drug Administration (FDA). The
Corporation is also subject to inspection by the Food Safety and Quality Service
Division (USDA), for its meat and poultry products.
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FDA regulates the safety of the food product, the identity of the product, its
purity and identification of ingredients therein. USDA establishes grades for
products and regulates sanitation. The appropriate state agencies regulate the
sanitation of the Corporation's plants and the manufacture of food products
utilizing flour in any baking process.
The Corporation is also regulated by many other federal and state governmental
agencies such as Occupational Safety and Health Administration (OSHA), Federal
Trade Commission and U.S. Environmental Protection Agency. See "Risk Factors -
Regulation" and "Legal Proceedings."
ENVIRONMENTAL CONSIDERATIONS
The Corporation continually makes investments to comply with all federal, state
and local laws, environmental rules and regulations. To date, such expenditures
have not been material with respect to the Corporation's capital expenditures,
earnings or competitive position, and are not expected to be in the future. See
"Risk Factors Environmental Risks" and "Legal Proceedings."
SOURCES OF SUPPLY
The Corporation maintains an intimate involvement in all phases of agricultural
crop production as well as direct procurement of fresh vegetables. The
Corporation procures all of its fresh vegetable requirements through direct
contracts with farmers who cultivate and harvest the crops according to the
Corporation's specifications. In addition, the Corporation directly procures
beans, tomato based products, pasta, herbs and other ingredients, as well as
containers and packaging materials from outside vendors throughout the world. No
supplier provides more than 10% of the raw materials or packaging materials
purchased by the Corporation.
EMPLOYEES
The Corporation, its divisions and subsidiaries currently employ approximately
1,856 employees on a full-time and a seasonal basis. Approximately 1,475
employees are employed in the United States and 390 are employed in Guatemala.
A total of 684 production workers at the Hanover, PA, Centre Hall, PA and
Clayton, DE plants are members of the United Food and Commercial Workers Union -
Locals 1776, 72 and 56, respectively. The Hanover and Centre Hall, PA plants
each have their own three (3) year contract beginning January 1, 1997 and ending
December 31, 1999. The Clayton, DE plant has its own three (3) year contract
beginning January 1, 1998 and ending December 31, 2001. There are no union
contracts at any other plants or locations of the Corporation. The Corporation
has never had any strikes or labor disputes interfering with its operations.
Management considers labor relations to be excellent.
FOREIGN OPERATIONS
The Corporation's wholly-owned subsidiary, Tri-Co. Foods Corp., has two (2)
wholly-owned subsidiaries, Alimentos Congelados Monte Bello, S.A., San Jose
Pinula, Guatemala and Sunwise Corporation, Lakeland, Florida.
Alimentos Congelados Monte Bello, S.A. procures, processes and ships vegetables
produced in Guatemala. Alimentos Congelados Monte Bello, S.A. contracts with
approximately 3,000 independent farmers in Guatemala for the growing and
harvesting of broccoli, cauliflower, okra and Brussels sprouts. The raw
vegetable product purchased by the Corporation is frozen at one of two
Corporation plants located at San Jose Pinula, Guatemala and Teculutan,
Guatemala.
Sunwise Corporation imports and distributes the Guatemalan product to Hanover
Foods Corporation.
The business of the Corporation in Guatemala is subject to the laws of Guatemala
which may place restrictions and controls on such matters as ownership, imports
and exports, prices, product lines and transfer of funds, and is also subject to
the fluctuating exchange rate between the Guatemalan quetzal and the U.S.
dollar. See "Management's
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discussion and Analysis of Financial Conditions and Results of Operations -
Impact of Events and Commitment of Future Operations" and "Risk Factors - Risks
Associated With Foreign Operations" in the Annual Report.
6
Information with respect to the revenue, cost of sales and identifiable assets
for the Corporation's foreign operations is set forth in Note 11 to the
Consolidated Financial Statements entitled "Foreign Operations" in the Annual
Report.
RISK FACTORS
Industry Conditions and Price and Volume Fluctuations
The Corporation's financial performance and growth are related to conditions in
the food processing industry. The United States food processing industry is a
mature industry. The Corporation's net sales are a function of product
availability and market pricing. In the food processing industry, product
availability and market prices tend to have an inverse relationship: market
prices tend to decrease as more product is available, whereas if less product is
available, market prices tend to increase. Product availability is a direct
result of plantings, growing conditions, crop yields and inventories, all of
which vary from year to year. In addition, price can be affected by the
planting, inventory level and individual pricing decisions of the three or four
largest processors in the industry. Generally, the market prices in the food
processing industry tend to adjust more quickly to variations in product
availability than an individual processor can adjust its cost structure; thus,
in an over-supply situation, a processor's margins likely will weaken, as
suppliers generally are not able to adjust their cost structure as rapidly as
market prices adjust for the over-supply. The Corporation typically has
experienced lower margins during times of industry over-supply. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" in the Annual Report.
Seasonality and Quarterly Fluctuations
The Corporation's operations are affected by the growing cycle of the vegetables
it processes. The Corporation's business can be positively or negatively
affected by weather conditions nationally and the resulting impact on crop
yields. Favorable weather conditions can produce high crop yields and an
oversupply situation in a given year. This oversupply typically will result in
depressed selling prices and reduced profitability to the Corporation on the
inventory produced from that year's crops. Excessive rain or drought conditions
can produce low crop yields and a shortage situation. This shortage typically
will result in higher selling prices and increased profitability to the
Corporation. While the national supply situation controls the pricing, the
supply can differ regionally because of variations in weather.
Because many of the raw materials processed by the Corporation are agricultural
crops, production of products using these crops is predominantly seasonal. As a
result, the Corporation needs access to working capital financing to meet its
production requirements during these periods. See "Management's Discussion and
Analysis of Financial Condition and Results of Operations" in the Annual Report.
Competition
All of the Corporation's products compete with those of other national, major
and small regional food processing companies under highly competitive
conditions. Many of the Corporation's major competitors in the market are larger
and have greater financial and marketing resources than the Corporation.
Continued industry consolidation also may increase the market strength of the
Corporation's larger competitors.
Regulation
United States and foreign governmental laws, regulations and policies directly
affect the agricultural industry and food processing industry. The Corporation
is subject to regulation by the FDA, the USDA, the Federal Trade Commission, the
Environmental Protection Agency and various state agencies with respect to
production, packaging, labeling and distribution of its food products. The
application or modification of existing, or the adoption of new, laws,
regulations or policies could have an adverse effect on the Corporation's
business and results of operations.
General Risks of the Food Industry
7
Food processors are subject to the risks of adverse changes in general economic
conditions; evolving consumer preferences and nutritional and health-related
concerns; changes in food distribution channels and increasing buying power of
large supermarket chains and other retail outlets that tend to resist price
increases; federal, state and local food processing controls; consumer product
liability claims; and risks of product tampering.
8
Environmental Risks
The disposal of solid and liquid waste material resulting from the preparation
and processing of foods are subject to various federal, state and local laws and
regulations relating to the protection of the environment. Such laws and
regulations have had an important effect on the food processing industry as a
whole, requiring substantially all firms in the industry to incur material
expenditures for modification of existing processing facilities and for
construction of upgraded or new waste treatment facilities.
The Corporation cannot predict what environmental legislation or regulations
will be enacted in the future, how existing or future laws or regulations will
be administered or interpreted or what environmental conditions may be found to
exist. Enactment of more stringent laws or regulations or more strict
interpretation of existing laws and regulations may require additional
expenditures by the Corporation, some of which could be material.
Risks Associated with Foreign Operations
Foreign operations generally involve greater risks than doing business in the
United States. Foreign economies differ favorably or unfavorably from the United
States' economy in such respects as the level of inflation and debt, which may
result in fluctuations in the value of the country's currency and real property.
Further, there may be less government regulation in various countries, and
difficulty in enforcing legal rights outside the United States. Additionally, in
some foreign countries, there is the possibility of expropriation or
confiscatory taxation, limitations on the removal of property or other assets,
political or social instability or diplomatic developments which could affect
the operations and assets of U.S. companies doing business in that country. Some
of these are more pronounced in third world countries such as Guatemala. At May
30, 1999, the total assets of the Corporation's foreign operations were
approximately $9.0 million.
Year 2000
As part of its Year 2000 compliance program, the Corporation is contacting and
surveying vendors and customers with whom the Corporation does a material amount
of business to determine whether these parties' systems (to the extent they
relate to the Corporation's business) are subject to Year 2000 issues. The
failure of the Corporation's material vendors or customers to convert their
systems on a timely basis may have a material adverse effect on the
Corporation's operations. The Corporation is in the process of developing a
contingency plan in the event these vendors or customers with which the
Corporation does a material amount of business are not Year 2000 compliant on a
timely basis.
The Corporation has performed a review of its non-information technology and
believes that all such technology is Year 2000 compliant. Currently the
Corporation does not have a contingency plan in the event that correction has
not been timely made.
ITEM 2. PROPERTIES
The following is a list of the Corporation's manufacturing, processing and
warehousing properties. The Corporation owns each of the properties, except as
noted.
UNITED STATES
Hanover, PA - Canned and jarred products processing, repackaging of frozen vegetables,
frozen soft pretzels manufacture, dry and frozen storage. Corporate
research, new product development and quality assurance laboratory
(corporate headquarters).
Centre Hall, PA - Frozen vegetable processing. Dry and frozen storage.
Lancaster, PA - Frozen mushrooms, peppers, onions and celery, freeze-dried food and ice
manufacture. Dry and frozen storage.
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Plumsteadville, PA - Frozen food entrees, meat pies and soups manufacture. Dry and frozen
storage.
Nottingham, PA - Canned mushrooms, dry storage.
10
Ephrata, PA - Refrigerated, fresh foods and soups manufacture. Dry, refrigerated and
frozen storage.
Manheim, PA - Potato chip manufacturer, dry storage.
Millville, NJ - Refrigerated, fresh foods and soups manufacture. Dry, refrigerated and
frozen storage. The building and land is leased from Purity Group, Inc.
which lease expires January 15, 2000. All equipment is owned by the
corporation.
Clayton, DE - Frozen vegetables, meat products, frozen food entrees and meat pies
manufacture. Dry and frozen storage.
GUATEMALA
San Jose Pinula - Frozen vegetable processing, dry and frozen storage, research and quality
assurance laboratory.
Teculutan - Frozen vegetable processing, dry and frozen storage.
ITEM 3. LEGAL PROCEEDINGS
On February 1, 1995, Michael A. Warehime, J. William Warehime and Elizabeth W.
Stick, three Class B shareholders of the Corporation, filed a complaint in the
Court of Common Pleas of York County, Pennsylvania against the Corporation and
John A. Warehime (Chairman of the Corporation), in his capacity as voting
trustee of two voting trusts entitling him to vote approximately 52% of the
Class B common stock. The Court has dismissed various claims and parties in the
lawsuit and the only remaining parties are Michael A. Warehime as plaintiff and
John A. Warehime as defendant. The only remaining claims are (i) a claim for
breach of fiduciary duty based on exercise of powers beyond those granted by
certain voting trust agreements; (ii) a claim for breach of fiduciary duty for
use of the voting trusts in a manner harmful to their beneficiaries, (iii) a
count requesting removal of John A. Warehime as the voting trustee of the voting
trusts.
On September 13, 1996, certain Class A common stockholders filed a complaint in
equity against six of the Corporation's directors and the estate of a former
director in the Court of Common Pleas of York County, Pennsylvania (the
complaint). The suit also names the Corporation as a nominal defendant. The suit
sought various forms of relief including, but not limited to, rescission of the
board's April 28, 1995 approval of John A. Warehime's 1995 Employment Agreement
and the board's February 10, 1995 adjustment of directors' fees. (Since the
filing of this lawsuit, John A. Warehime's 1995 Employment Agreement was
amended.) In addition, the plaintiffs sought costs and fees incident to bringing
suit. On November 4, 1996, the complaint was amended to add additional
plaintiffs. On June 24, 1997, the Court dismissed the amended complaint for
failure to make a prior demand. An appeal has been filed from the Court's June
24, 1997 Order. On May 12, 1997, a written demand was received by the
Corporation from the attorney for those Class A common stockholders containing
similar allegations and the allegations raised by the Class A common
stockholders were investigated by a special independent committee of the Board
of Directors and found to be without merit.
On February 21, 1997, Michael A. Warehime, a Class B shareholder, and certain
Class A shareholders filed motions for a preliminary injunction against the
Corporation, John A. Warehime, in his capacity as voting trustee, and all
certain directors of the Corporation in the Court of Common Pleas of York
County, Pennsylvania against a proposal of the Board of Directors to amend and
restate the Corporation's Articles of Incorporation in the manner hereafter
described.
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On February 13, 1997, the Board of Directors proposed an amendment and
restatement of the Corporation's Articles of Incorporation (the "Amended and
Restated Articles") which provides that if all of the following Class B
shareholders (or their Estates upon the death of such stockholders), Michael A.
Warehime, John A. Warehime, Sally W. Yelland, J. William Warehime, and Elizabeth
W. Stick (all members of the Warehime family), do not agree in writing to the
composition of the Company's Board of Directors or other important matters
specified below on or after the 1998 annual shareholders meeting, the trustees
of the Corporation's 401(k) Savings Plan (or a similar employee benefit plan),
acting as fiduciaries for the employees who participate in the Plan, and the
Class A shareholders may become entitled to vote in the manner described in the
Amended and Restated Articles. The Amended and Restated Articles created a
Series C Convertible Preferred Stock, which, in case of a dispute among the
abovementioned members of the Warehime family on Board of Directors composition
or other important matters, would be entitled to 35 votes per share (a total of
350,000 votes based on 10,000 shares of Series C Convertible Preferred Stock
issued to and held by the Trustees of the Company's 401(k) Savings Plan); if the
Series C Convertible Preferred Stock were entitled to vote because of such
dispute, each share of Class A Common Stock would be entitled to 1/10th of a
vote per share.
The Amended and Restated Articles create a Series C Convertible Preferred Stock
and also classified the terms of the Board of Directors commencing with the
election at the 1997 annual shareholders meeting and permit directors to be
elected for four year terms as permitted by Pennsylvania law.
The motions for a preliminary injunction were dismissed by the Court on June 24,
1997. The Class B shareholders on June 25, 1997 approved the Amended and
Restated Articles (John A. Warehime being the sole Class B shareholder voting
affirmatively in his capacity as voting trustee) and the Amended and Restated
Articles became effective June 25, 1997. Appeals have been filed from the denial
of the plaintiffs' motion for a preliminary injunction.
In August 1997, the Board of Directors proposed a further amendment (the
"Amendment") to the Amended and Restated Articles to expand the definition of
"disinterested directors" in the manner described below, and to approve certain
performance based compensation for John A. Warehime solely for the purpose of
making the Corporation eligible for a federal income tax deduction pursuant to
Section 162(m) of the Internal Revenue Code of 1986, as amended. A special
meeting was scheduled for August 14, 1997 (the "Special Meeting") to vote on
these proposals. On August 8, 1997, Michael A. Warehime filed a motion in the
Court of Common Pleas of York County, Pennsylvania to prevent John A. Warehime,
in his capacity as voting trustee from voting on these proposals. This motion
was denied on August 11, 1997. Michael A. Warehime has filed an appeal. The
Amendment and the proposal under Section 162(m) were approved by Class B
Shareholders (John A. Warehime was the sole Class B shareholder to vote
affirmatively, in his capacity as voting trustee) on August 14, 1997 and the
Amendment became effective on August 14, 1997.
Under the Amendment, the definition of "disinterested directors" means the
person who, in the opinion of counsel for the Corporation, meet any of the
following criteria: (i) disinterested directors as defined in Section 1715(e) of
the Pennsylvania Business Corporation Law of 1988, as amended; (ii) persons who
are not "interested" directors as defined in Section 1.23 of The American Law
Institute "Principles of Corporate Governance: Analysis and Recommendations"
(1994); or (iii) persons who qualify as members of the Audit Committee pursuant
to Section 303.00 of the New York Stock Exchange's Listed Corporation Manual.
Michael Warehime filed an appeal from the denial of his motion to enjoin the
previously Amended and Restated Articles and the Amendment thereto. On December
2, 1998, the Pennsylvania Superior Court, in a two to one decision, held that
although John Warehime had acted in good faith and in the best interest of the
Corporation in voting for the Amended and Restated Articles as trustee of the
Warehime voting trust, Mr. Warehime nevertheless breached his fiduciary duty to
the beneficiaries of the Warehime voting trust in so voting. On December 16,
1998, Michael Warehime filed a motion for clarification requesting that the
Pennsylvania Superior Court issue an order invalidating the Amended and Restated
Articles and that motion was denied in banc. On March 10, 1999, John
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Warehime and the other directors filed a petition for allowance of appeal with
the Pennsylvania Supreme Court and no decision has as yet been rendered.
On August 13, 1999, Michael Warehime filed a complaint in equity in the Court of
Common Pleas of York County, Pennsylvania, naming as defendants Arthur S.
Schaier, Cyril T. Noel, Clayton J. Rohrbaugh, Jr., John A. Warehime, and the
Company. The complaint seeks a court order declaring that the September 1999
election for the board of directors of the Company be conducted in accordance
with the Articles of Incorporation of the Company as they existed prior to June
25, 1997, an order declaring that the Series C Convertible Preferred Stock
cannot be voted, and an order that the following candidates for the board of
directors of the Company proposed by Michael Warehime. Sally Yelland, Elizabeth
Stick and J. William Warehime be accepted by the Company and listed on the
ballot to be distributed at the annual meeting of shareholders of the Company to
be held on September 16,1999: Michael Warehime, Daniel Meckley, Michael Stick,
Sonny Bowman, and John Denton. The basis for the complaint was the December 2,
1998 decision of the Pennsylvania Superior Court, which is currently on appeal
to the Pennsylvania Supreme Court, which held that John A. Warehime had breached
his fiduciary duties in voting for the Amended and Restated Articles as trustee
of the Warehime voting trust. The complaint also requested that John A. Warehime
pay all costs incurred by the Company in response to the suit as well as award
Michael Warehime costs and fees and grant such other relief as equity and
justice require.
The Corporation is involved in various other claims and legal actions arising in
the ordinary course of business. In the opinion of management, the ultimate
disposition of these matters will not have a material adverse effect on the
Corporation's consolidated financial position, results of operations or
liquidity.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED STOCKHOLDER MATTERS
Information contained under the caption "Market for the Registrant's Common
Stock and Related Stockholder Matter" on page 34 of the Corporation's Annual
Report to Shareholders for the year ended May 30, 1999 is incorporated herein by
reference in response to this item.
ITEM 6. SELECTED FINANCIAL DATA
Information contained under the caption "Financial Highlights Five Year" on page
7 of the Corporation's Annual Report to Shareholders for the year ended May 30,
1999 is incorporated herein by reference in response to this item.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
Incorporated by reference from the section entitled "Management's Discussion and
Analysis of Financial Condition and Results of Operations" in the Corporation's
Annual Report to Shareholders for the year ended May 30, 1999.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Incorporated by reference from the section entitled Management's Discussion and
Analysis of Financial Condition and Results of Operations in the Corporation's
Annual Report to Shareholders for the year ended May 30, 1999.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
13
Financial statements for Hanover Foods Corporation and Subsidiaries are
contained on pages 9 through 33 of the Corporation's Annual Report to
Shareholders for the year ended May 30, 1999, and quarterly financial data is
contained on page 34 of the Corporation's annual report to shareholders for the
year ended May 30, 1999 and are incorporated herein by reference in response to
this item.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF REGISTRANT
Incorporated by reference from the Corporation's 1999 Proxy Statement which was
previously filed with SEC on August 16, 1999.
(b) EXECUTIVE OFFICERS OF THE CORPORATION WHO ARE NOT ALSO DIRECTORS (AS OF
AUGUST 10, 1999)
NAME, AGE, AND TERM PRINCIPAL OCCUPATION DURING
OF OFFICE PAST FIVE (5) YEARS
- ------------------- ---------------------------
GARY T. KNISELY, ESQUIRE Executive Vice President - 1995-Present;
Executive Vice President & Secretary Vice President - Administration - 1989-1995;
1995-Present Counsel-1987-Present; Secretary-1987-
Age: 50 Present. Mr. Knisely also acts as Chief
Financial Officer of the Corporation
(January 1996 - Present).
PEITRO D. GIRAFFA, JR. Vice President-Controller-1996-Present;
Vice President-Controller Controller-1984-1996. Mr. Giraffa also
1984-Present Chief Accounting Officer of the Corporation
Age: 53 (1996-Present).
ALAN T. YOUNG Vice President-Transportation-1996-Present;
Vice President-Purchasing & Vice President-Operations-1991-1996;
Transportation Director of Corporate Logistics-1990-1991;
1996-Present Manager of Corporate Systems-1986-1990.
Age: 56
EDWARD L. BOECKEL, JR. Treasurer-July 1997-Present; Banking &
Treasurer Insurance Manager-1995-1997; Vice
1997-Present President CoreStates Bank-1992-1995.
Age: 48
(d) FAMILY RELATIONSHIPS OF DIRECTORS AND EXECUTIVE OFFICERS
None.
(h) SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
14
Section 16(a) of the Securities Exchange Act of 1934 requires that
directors and certain officers of the Corporation file reports of
ownership and changes in ownership with the Securities and Exchange
Commission as to the shares of the Corporation Class A Common Stock
beneficially owned by them.
Based solely on its review of copies of such forms received by it, the
Corporation believes that during the Corporation's fiscal year ended
May 30, 1999, all filing requirements applicable to its directors and
officers were complied with in a timely fashion.
15
ITEM 11. EXECUTIVE COMPENSATION
Incorporated by reference from the Corporation's 1999 Proxy Statement which was
previously filed with SEC on August 16, 1999.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
CERTAIN SECURITY HOLDERS
Incorporated by reference from the Corporation's 1999 Proxy Statement which was
previously filed with SEC on August 16 , 1999.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Incorporated by reference from the Corporation's 1999 Proxy Statement which was
previously filed with SEC on August 16, 1999.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
(a) 1. Financial Statements:
Hanover Foods Corporation and Subsidiaries (See Exhibit 13)
2. Financial Statement Schedules
None
All schedules are omitted because they are not applicable or not required, or
because the required information is included in the financial statements or
notes thereto.
3. Exhibits
The following exhibits are filed herein or have been
previously filed with the Securities and Exchange Commission
and are incorporated by reference herein.
Number Description
------ -----------
3(a) Registrant's Amended and Restated By-laws enacted
June 24, 1998 it is incorporated by reference to the
form 10-K filed on September 1, 1998, wherein such
Exhibit is designated as 3 (a).
3(b) Registrant's Amended and Restated Articles of
Incorporation is incorporated by reference to the
form 10-K filed on September 1, 1998, wherein such
Exhibit is designated as 3(b).
3(c) Amendment No. 1 to Registrant's Amended and Restated
Articles of Incorporation is incorporated by
reference to the form 10-K filed on September 1,
1998, wherein such Exhibit is designated as 3(c).
Registrants Amended and Restated By-laws enacted
January 15,
16
Number Description
------ -----------
3(d) 1999 is attached as Exhibit 3(d).
4(a) Note Agreement dated as of December 1, 1991, between
the Corporation and Allstate Life Insurance
Corporation, with regard to the Corporation's
$25,000,000, 8.74% Senior Notes Due March 15, 2007,
is incorporated herein by reference to the Form 10-K
filed June, 1992 wherein such Exhibit is designated
as 4(a).
4(b) June 20, 1995 First Amendment to December 1, 1991
Note Agreement between the Corporation and Allstate
Life Insurance Corporation (the "Note Agreement") and
Waiver of Compliance with Section 5.9 of the Note
Agreement is incorporated herein by reference to the
Form 10-K filed on July 3, 1995, wherein such Exhibit
is designated as 4(b).
4(c) June 24, 1996 waiver to covenants in the December 1,
1991 Note Agreement between the Corporation and
Allstate Life Insurance Corporation (the "Note
Agreement") is incorporated herein by reference to
the Form 10-K filed on July 2, 1996, wherein such
Exhibit is designated as 4(c).
4(d) July 1, 1996 Second Amendment to December 1, 1991
Note Agreement between the Corporation and Allstate
Life Insurance Corporation (the "Note Agreement") is
incorporated by reference to the Form 10-K filed on
August 27, 1997, wherein such Exhibit is designated
as 4(d).
4(e) August 1, 1997 Third Amendment to December 1, 1991
Note Agreement between the Corporation and Allstate
Life Insurance Corporation (the "Note Agreement") is
attached as Exhibit 4(e).
4(f) March 15, 1999 Fourth Amendment to December 1, 1991
Note Agreement between the Corporation and Allstate
Life Insurance
4(g) Corporation (the "Note Agreement") is attached as
Exhibit 4(f). July 26, 1999 waiver to covenants in
the December 1, 1991 Note Agreement between the
Corporation and Allstate Life Insurance Corporation
(the "Note Agreement") is attached as Exhibit 4(g).
9(a) April 5, 1988 Voting Trust Agreement is incorporated
herein by reference to the Form 10 filed July 28,
1989, wherein such Exhibit is designated as 9(a).
9(b) December 1, 1988 Voting Trust Agreement is
incorporated herein by reference to the Form 10 filed
July 28, 1989, wherein such Exhibit is designated as
9(b).
9(c) Writing dated April 5, 1988 appointing John A.
Warehime as Successor Voting Trustee under Voting
Trust Agreement dated December 1, 1988, is
incorporated herein by reference to the
17
Number Description
------ -----------
Form 8-K filed June 1, 1990, wherein such Exhibit is
designated as 9(c).
9(d) Writing dated December 1, 1988 appointing John A.
Warehime as Successor Voting Trustee under Voting
Trust Agreement dated December 1, 1988, is
incorporated herein by reference to the Form 8-K
filed June 1, 1990, wherein such Exhibit is
designated as 9(d).
10(a) April 28, 1988 Sublease Agreement between Warehime
Enterprises, Inc. and Hanover Brands, Inc., is
incorporated herein by reference to the Form 10 filed
July 28, 1989, wherein such Exhibit is designated as
10(a).
10(b) April 28, 1988 Agreement of Sale between Warehime
Enterprises, Inc. and Hanover Brands, Inc., is
incorporated herein by reference to the Form 10 filed
July 28, 1989, wherein such Exhibit is designated as
10(b).
10(c) March 3, 1989 Agreement of Sale between Warehime
Enterprises, Inc. and Hanover Brands, Inc., is
incorporated herein by reference to the Form 10 filed
July 28, 1989, wherein such Exhibit is designated as
10(c).
10(d) November 14, 1986 Employment Agreement between
Hanover Brands, Inc., and Patricia H. Townsend is
incorporated herein by reference to the Form 10 filed
July 28, 1989, wherein such Exhibit is designated as
10(i).
10(e) May 10, 1991 Amendment to April 28, 1988 Agreement of
Sale between Warehime Enterprises, Inc. and Hanover
Brands, Inc., is incorporated herein by reference to
the Form 10-K filed June 29, 1991, wherein such
Exhibit is designated as 10(k).
10(f) October 1, 1994 Amendment to the June 1, 1994 Lease
Agreement between Hanover Foods Corporation and Food
Service East, Inc. is incorporated herein by
reference to the Form 10-K filed July 3, 1995,
wherein such Exhibit is designated as 10(f).
10(g) June 12, 1995 Employment Agreement between Hanover
Foods Corporation and John A. Warehime is
incorporated herein by reference to the Form 10-K
filed July 3, 1995, wherein such Exhibit is
designated as 10(g). *
10(h) April 4, 1994 Lease Agreement between John A. and
Patricia M. Warehime and Hanover Foods Corporation is
incorporated herein by reference to the Form 10-K
filed July 2, 1996, wherein such Exhibit is
designated as 10(h).
10(i) July 27, 1995 Installment Sales Agreement for the
purchase of 5,148 shares of Hanover Foods Class B
Voting Common Stock
18
Number Description
------ -----------
from Cyril T. Noel, individually, and Cyril T. Noel
and Frances L. Noel, jointly, is incorporated herein
by reference to the Form 10-K filed July 2, 1996,
wherein such Exhibit is designated as 10(i).
10(j) April 1, 1996 Installment Sales Agreement for the
purchase of 1,210 shares of Hanover Foods Class B
Voting Common Stock and 5,990 shares of Hanover Foods
Class A Nonvoting Common Stock from John R. Miller,
Jr. is incorporated herein by reference to the Form
10-K filed July 2, 1996, wherein such Exhibit is
designated as 10(j).
10(k) January 23, 1997 Employment Agreement between Hanover
Foods Corporation and Gary T. Knisely is incorporated
herein by reference to the Form 10-K filed August 27,
1997, wherein such Exhibit is designated 10(k). *
10(l) February 13, 1997 Amendment No. 1 to June 12, 1995
Employment Agreement between Hanover Foods
Corporation and John A. Warehime is incorporated
herein by reference to the Form 10-K filed August 27,
1997, wherein such Exhibit is designated 10(l). *
10(m) August 1, 1997 Amendment No. 2 to June 12, 1995
Employment Agreement between Hanover Foods
Corporation and John A. Warehime is incorporated
herein by reference to the Form 10-K filed August 27,
1997, wherein such Exhibit is designated 10(m).*
10(n) May 21, 1997 Senior Executive Agreement between
Hanover Foods Corporation and Clement A. Calabrese is
incorporated herein by reference to the Form 10-K
filed August 27, 1997, wherein such Exhibit is
designated 10(n). *
10(o) May 21, 1997 Senior Executive Agreement between
Hanover Foods Corporation and Alan T. Young is
incorporated herein by reference to the Form 10-K
filed on August 27, 1997, wherein such Exhibit is
designated 10(o). *
10(p) April 22, 1997 John R. Miller, Jr. Voting Agreement
is incorporated herein by reference to the Form 10-K
filed on August 27, 1997, wherein such Exhibit is
designated as 10(p). *
10(q) Annual Top Management Cash Bonus Program is attached
as Exhibit 10(q). *
13 Management's Discussion and Analysis of Financial
Condition and Results of Operations.
The following financial statements of Hanover Foods
Corporation and Subsidiaries are incorporated herein
by reference to the Corporation's Annual Report to
Shareholders for the year ended May 30, 1999.
19
Number Description
------ -----------
Independent Auditors' Report
Consolidated Statements of Earnings for the Years
Ended May 30, 1999, May 31, 1998, and June 1, 1997.
Consolidated Balance Sheets for the Years Ended May
30, 1999 and May 31, 1998.
Consolidated Statements of Comprehensive Income for
the Years Ended May 30, 1999, May 31, 1998, and June
1, 1997.
Consolidated Statements of Cash Flows for the Years
Ended May 30, 1999, May 31, 1998, and June 1, 1997.
Consolidated Statements of Stockholders' Equity for
the Years Ended May 30, 1999, May 31, 1998, and June
1, 1997.
Notes to Consolidated Financial Statements for the
Years Ended May 30, 1999 and May 31, 1998.
21 A list setting forth subsidiaries of the Registrant
is attached as Exhibit 21.
27 The Financial Data Schedule is attached as Exhibit
27.
* Management contract or compensatory plan or arrangement.
(b) Reports on Form 8-K
None.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following person on behalf of Hanover Foods
Corporation and in the capacity and on the date indicated.
DATE: AUGUST 30, 1999.
HANOVER FOODS CORPORATION
By: /s/ John A. Warehime
-----------------------
JOHN A. WAREHIME
Chairman, President and
Chief Executive Officer
20
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following person on behalf of Hanover Foods
Corporation and in the capacity and on the date indicated.
DATE: AUGUST 30, 1999
By: /s/ John A. Warehime By: /s/ Clayton J. Rohrbach, Jr.
------------------------------- ----------------------------
John A. Warehime Clayton J. Rohrbach, Jr.
Chairman, President, Director
Chief Executive Officer and
Director
By: /s/ Gary T. Knisely By: /s/ James G. Sturgill
------------------------------- ----------------------------
Gary T. Knisely James G. Sturgill
Executive Vice President Director
(Chief Financial Officer)
By: /s/ Pietro D. Giraffa, Jr. By: /s/ James A. Washburn
------------------------------- ----------------------------
Pietro D. Giraffa, Jr. James A. Washburn
Vice President - Controller Director
(Chief Accounting Officer)
By: /s/ Arthur S. Schaier By: /s/ Cyril T. Noel
------------------------------- ----------------------------
Arthur S. Schaier Cyril T. Noel
Director Director
By: /s/ T. Edward Lippy
-------------------------------
T. Edward Lippy
Director
21
HANOVER FOODS CORPORATION
EXHIBIT INDEX
Number Description
- ------ -----------
3(a) Registrant's Amended and Restated By-laws enacted July 24, 1998 are
incorporated by reference to the Form 10-K filed September 1, 1998,
wherein such Exhibit is designated 3(a).
3(b) Registrant's Amended and Restated Articles of Incorporation are
incorporated herein by reference to the Form 10-K filed August 27,
1997, wherein such Exhibit is designated 3(b).
3(c) Amendment No. 1 to Registrant's Amended and Restated Articles of
Incorporation is incorporated herein by reference to the Form 10-K
filed August 27, 1997, wherein such Exhibit is designated 3(c).
3(d) Registrant's Amended and Restated By-laws enacted January 15, 1999 are
attached as Exhibit 3(d).
4(a) Note Agreement dated as of December 1, 1991, between the Corporation
and Allstate Life Insurance Corporation, with regard to the
Corporation's $25,000,000, 8.74% Senior Notes Due March 15, 2007, is
incorporated herein by reference to the Form 10-K filed June, 1992
wherein such Exhibit is incorporated herein by reference to the Form
10-K filed August 27, 1997, wherein such Exhibit is designated 4(a).
4(b) June 20, 1995 First Amendment to December 1, 1991 Note Agreement
between the Corporation and Allstate Life Insurance Corporation (the
"Note Agreement") and Waiver of Compliance with Section 5.9 of the Note
Agreement is incorporated herein by reference to the Form 10-K filed
July 3, 1995, wherein such Exhibit is designated 4(b).
4(c) June 24, 1996 waiver to covenants in the December 1, 1991 Note
Agreement between the Corporation and Allstate Life Insurance
Corporation (the "Note Agreement") is incorporated herein by reference
to the Form 10-K filed July 2, 1996, wherein such Exhibit is designated
4(c).
4(d) July 1, 1996 Second Amendment to December 1, 1991 Note Agreement
between the Corporation and Allstate Life Insurance Corporation (the
"Note Agreement") is incorporated herein by reference to the Form 10-K
filed August 27, 1998, wherein such Exhibit designated 4(d).
4(e) August 1, 1997 Third Amendment to December 1, 1991 Note Agreement
between the Corporation and Allstate Life Insurance Corporation (the
"Note Agreement") is attached as Exhibit 4(e).
-22-
22
Number Description
- ------ -----------
4(f) March 15, 1999 Fourth Amendment to December 1, 1991 Note Agreement
between the Corporation and Allstate Life Insurance Corporation (the
"Note Agreement") is attached as Exhibit 4(f).
July 26, 1999 waiver to covenants in the December 1, 1991 Note
4(g) Agreement between the Corporation and Allstate Life Insurance
Corporation (the "Note Agreement") is attached as Exhibit 4(g).
9(a) April 5, 1988 Voting Trust Agreement is incorporated herein by
reference to the Form 10 filed July 28, 1989, wherein such Exhibit is
designated as 9(a).
9(b) December 1, 1988 Voting Trust Agreement is incorporated herein by
reference to the Form 10 filed July 28, 1989, wherein such Exhibit is
designated as 9(b).
9(c) Writing dated April 5, 1988 appointing John A. Warehime as Successor
Voting Trustee under Voting Trust Agreement dated December 1, 1988, is
incorporated herein by reference to the Form 8-K filed June 1, 1990,
wherein such Exhibit is designated as 9(c).
9(d) Writing dated December 1, 1988 appointing John A. Warehime as Successor
Voting Trustee under Voting Trust Agreement dated December 1, 1988, is
incorporated herein by reference to the Form 8-K filed June 1, 1990,
wherein such Exhibit is designated as 9(d).
10(a) April 28, 1988 Sublease Agreement between Warehime Enterprises, Inc.
and Hanover Brands, Inc., is incorporated herein by reference to the
Form 10 filed July 28, 1989, wherein such Exhibit is designated as
10(a).
10(b) April 28, 1988 Agreement of Sale between Warehime Enterprises, Inc. and
Hanover Brands, Inc., is incorporated herein by reference to the Form
10 filed July 28, 1989, wherein such Exhibit is designated as 10(b).
10(c) March 3, 1989 Agreement of Sale between Warehime Enterprises, Inc. and
Hanover Brands, Inc., is incorporated herein by reference to the Form
10 filed July 28, 1989, wherein such Exhibit is designated as 10(c).
10(d) November 14, 1986 Employment Agreement between Hanover Brands, Inc.,
and Patricia H. Townsend is incorporated herein by reference to the
Form 10 filed July 28, 1989, wherein such Exhibit is designated as
10(i).
10(e) May 10, 1991 Amendment to April 28, 1988 Agreement of Sale between
Warehime Enterprises, Inc. and Hanover Brands, Inc., is incorporated
herein by reference to the Form 10-K filed June 29, 1991, wherein such
Exhibit is designated as 10(k).
10(f) October 1, 1994 Amendment to the June 1, 1994 Lease Agreement between
Hanover Foods Corporation and Food Service East, Inc. is incorporated
herein by reference to the Form 10-K filed July 3, 1995, wherein such
Exhibit is designated 10(f).
-23-
23
10(g) June 12, 1995 Employment Agreement between Hanover Foods Corporation
and John A. Warehime is incorporated herein by reference to the Form
10-K filed July 3, 1995, wherein such Exhibit is designated 10(g). *
10(h) April 4, 1994 Lease Agreement between John A. and Patricia M. Warehime
and Hanover Foods Corporation is incorporated herein by reference to
the Form 10-K filed July 2, 1996, wherein such Exhibit is designated
10(t).
10(i) July 27, 1995 Installment Sales Agreement for the purchase of 5,148
shares of Hanover Foods Class B Voting Common Stock from Cyril T. Noel,
individually, and Cyril T. Noel and Frances L. Noel, jointly, is
incorporated herein by reference to the Form 10-K filed July 2, 1996,
wherein such Exhibit is designated 10(u).
10(j) April 1, 1996 Installment Sales Agreement for the purchase of 1,210
shares of Hanover Foods Class B Voting Common Stock and 5,990 shares of
Hanover Foods Class A Nonvoting Common Stock from John R. Miller, Jr.
is incorporated herein by reference to the Form 10-K filed July 2,
1996, wherein such Exhibit is designated 10(v).
10(k) January 23, 1997 Employment Agreement between Hanover Foods Corporation
and Gary T. Knisely is incorporated herein by reference to the Form
10-K filed August 27, 1997, wherein such Exhibit is designated 10(k). *
10(l) February 13, 1997 Amendment No. 1 to June 12, 1995 Employment Agreement
between Hanover Foods Corporation and John A. Warehime is incorporated
herein by reference to the Form 10-K filed August 27, 1997, wherein
such Exhibit is designated 10(l). *
10(m) August 1, 1997 Amendment No. 2 to June 12, 1995 Employment Agreement
between Hanover Foods Corporation and John A. Warehime is incorporated
herein by reference to the Form 10-K filed August 27, 1997, wherein
such Exhibit is designated 10(m). *
10(n) May 21, 1997 Senior Executive Agreement between Hanover Foods
Corporation and Clement A. Calabrese is incorporated herein by
reference to the Form 10-K filed August 27, 1997, wherein such Exhibit
is designated 10(n). *
10(o) May 21, 1997 Senior Executive Agreement between Hanover Foods
Corporation and Alan T. Young is incorporated herein by reference to
the Form 10-K filed August 27, 1997, wherein such Exhibit is designated
10(o). *
10(p) April 22, 1997 John R. Miller, Jr. Voting Agreement is incorporated
herein by reference to the Form 10-K filed August 27, 1997, wherein
such Exhibit is designated 10(p). *
10(q) Annual Top Management Cash Bonus Program is attached as Exhibit 10(q).
*
-24-
24
-25-
25
13 Management's Discussion and Analysis of Financial Condition and Results
of Operations
The following financial statements of Hanover Foods Corporation and
Subsidiaries are incorporated herein by reference to the Corporation's
Annual Report to Shareholders for the year ended May 30, 1999
Independent Auditors' Report
Consolidated Statements of Earnings for the Years Ended May 30, 1999,
May 31, 1998 and June 1, 1997.
Consolidated Balance Sheets for the Years Ended May 30, 1999, May 31,
1998 and June 1, 1997.
Consolidated Statements of Comprehensive Income for the Years Ended May
30, 1999, May 31, 1998 and June 1, 1997.
Consolidated Statements of Cash Flows for the Years Ended May 30, 1999,
May 31, 1998 and June 1, 1997.
Consolidated Statements of Stockholders' Equity for the Years Ended May
30, 1999, May 31, 1998 and June 1, 1997.
Notes to Consolidated Financial Statements for the Years Ended May 30,
1999, May 31, 1998 and June 1, 1997.
21 A list setting forth subsidiaries of the Registrant is attached as
Exhibit 21.
27 The Financial Data Schedule is attached as Exhibit 27.
* Management contract or compensatory plan or arrangement.
-26-