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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 August 31, 1998
OR
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 0-16130
Northland Cranberries, Inc.
(Exact name of registrant as specified in its charter)
Wisconsin 39-1583759
(State of other jurisdiction of (I.R.S. Employer
incorporation or organization Identification No.)
800 First Avenue South
P. O. Box 8020
Wisconsin Rapids, Wisconsin 54495-8020
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (715) 424-4444
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act: Class A Common
Stock, $.01 par value
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 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.
Aggregate market value of the voting stock held by non-affiliates of the
registrant as of November 25, 1998:
$231,804,790
Number of shares issued and outstanding of each of the registrant's classes of
common stock as of November 25, 1998:
Class A Common Stock, $.01 par value: 19,115,484 shares
Class B Common Stock, $.01 par value: 636,202 shares
PORTIONS OF THE FOLLOWING DOCUMENTS ARE INCORPORATED HEREIN BY REFERENCE:
Proxy Statement for 1999 annual meeting of shareholders scheduled to be held
January 6, 1999 (incorporated by reference into Part III, to the extent
indicated therein).
1998 Annual Report to Shareholders (incorporated by reference into Parts II and
IV, to the extent indicated therein).
PART I
Special Note Regarding Forward-Looking Statements
We make certain "forward-looking statements" in this Form 10-K, such as
statements about our future plans, goals and other events which have not yet
occurred. We intend that these statements will qualify for the safe harbors from
liability provided by the Private Securities Litigation Reform Act of 1995. You
can generally identify these forward-looking statements because we use words
such as we "believe," "anticipate," "expect" or similar words when we make them.
Whether or not these forward-looking statements will be accurate in the future
will depend on certain risks and factors including risks associated with (i) the
development, market share growth and continued consumer acceptance of our
branded juice products; (ii) the level of expenditures to build the brand name
equity and consumer awareness of our Northland product line; (iii) the
integration of the operations of Minot Food Packers, Inc., which we acquired in
fiscal 1998; (iv) the consummation of the potential acquisition of the juice
division of Seneca Foods Corporation; (v) strategic actions of our competitors
in pricing, marketing and advertising; and (vi) agricultural factors affecting
our crop. You should consider these risks and factors and the impact they may
have when you evaluate our forward-looking statements. We make these statements
based only on our knowledge and expectations on the date of this Form 10-K. We
will not necessarily update these statements or other information in this Form
10-K based on future events or circumstances. Please read this entire Form 10-K
to better understand our business and the risks associated with our operations.
Item 1. Business.
General
We are a grower, processor and marketer of cranberries and cranberry
products. Our products include:
o Northland brand 100% juice cranberry blends, which we sell mostly
through supermarkets and, to a smaller degree, through mass merchandisers and
other retail channels;
o private label cranberry drinks and other fruit products, which we
sell to retail and wholesale customers for sale under their own labels;
o Northland brand fresh cranberries, which we sell to retail and
wholesale customers; and
o cranberry juice concentrate, single-strength cranberry juice and
frozen and whole sliced cranberries, which we sell to industrial and ingredient
customers.
We began our business in 1987 as a cranberry grower and member of the
Ocean Spray Cranberries, Inc. marketing cooperative. In 1993, we left Ocean
Spray and began implementing our marsh to market strategy by introducing
Northland brand fresh cranberries. In October 1995, we introduced our family of
Northland 100% juice cranberry blends. By June 1997, we had successfully
achieved national distribution. In July 1998, we acquired Minot Food Packers,
Inc., a manufacturer of private label cranberry and other fruit products. Also
in 1998, we reached an agreement in principle with Seneca Foods Corporation to
acquire Seneca's juice division. Please see "Potential Seneca Acquisition,"
below, for more details. As of September 13, 1998, our branded juice products
were available in all 50 states and in approximately 84% of supermarkets
nationwide according to data compiled by Information Resources, Inc.
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We had several important achievements in fiscal 1998. Included among
them:
o we topped $100 million in revenues for the first time in our history;
o we achieved an 11.9% dollar market share in the shelf-stable
cranberry beverage market according to IRI data for the 12 weeks ending
September 13, 1998, and were as high as 14.2% for the 12 weeks ending March 29,
1998;
o we acquired Minot, a Bridgeton, New Jersey company with about $41
million in revenues in its 1997 fiscal year, which produces and sells private
label cranberry and other fruit products; and
o we completed a public sale of our common stock which provided us with
$74.5 million, allowing us to pay the cash portion of the purchase price for
Minot and pay down debt, which in turn improved our financial condition.
In addition to providing us with a base of private label customers, the
Minot acquisition gave us more processing and storage facilities and our first
bottling facility. As a result, we now have the ability to bottle and can our
own products (including beverage and sauce products), and to perform those
operations for other producers of bottled and canned beverages (an arrangement
called "co-packing"). Please see the discussion below under the headings
"Non-Branded Products--Products" and "Manufacturing" for further information
about Minot.
We achieved significant revenue and asset growth in fiscal 1998 through
increased sales of our Northland 100% juice cranberry blends and the acquisition
of Minot. We intend to continue growing our business in the next fiscal year by
focusing our strategic efforts on:
o increasing spending on our national marketing efforts, including
introducing new national television advertising, to heighten consumer awareness
of our branded products and how they are different from our competitors'
products;
o expanding our product selection by adding sizes in retail outlets
across the country and by adding branded products currently produced by Seneca;
o continuing our sales and trade promotion plan;
o continuing to pursue alternative sales channels for our products,
such as mass merchandisers, club stores and foodservice providers like
restaurants, hospitals and schools;
o strengthening and expanding our national food broker network;
o continuing the integration of Minot's operations; and
o completing the acquisition of the juice division of Seneca (which we
discuss below) and integrating Seneca's operations into ours.
In addition to producing and selling cranberry and other fruit
products, we are the world's largest cranberry grower, with 25 cranberry
producing marshes and 2,549 planted acres owned or operated in Wisconsin and
Massachusetts as of November 25, 1998.
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Potential Seneca Acquisition
In August 1998 we reached an agreement in principle with Seneca Foods
Corporation to purchase most of the assets of Seneca's juice division. The
assets we will obtain in the acquisition, if it is completed, will include
Seneca's TreeSweet and Awake brand names, as well as three processing plants, a
distribution center and a receiving station. We will also purchase the right to
sell Seneca brand fruit beverages. In Seneca's last completed fiscal year, its
juice division accounted for about $105 million in revenues. We believe this
acquisition, if completed, will give us a strong presence in the apple and grape
juice segments and will allow us to enter both the retail frozen juice
concentrate category and the retail canned beverage category. If we complete the
acquisition of Seneca's juice division, our selection of branded products will
include, in addition to our current branded products:
o Seneca and TreeSweet bottled and canned fruit beverages, including
apple, grape and orange juice products;
o Seneca and TreeSweet frozen juice concentrate products, including
apple, grape, cranberry and orange juice products; and
o Awake frozen orange-flavored concentrate.
We also expect the Seneca acquisition to make our bottling and
distribution network more efficient and to further our ability to perform
co-packing operations for other bottled and canned beverage producers. This is
mainly because we will add, as part of the Seneca acquisition:
o a processing plant in Mountain Home, North Carolina;
o a processing plant in Dundee, New York;
o a processing plant in Jackson, Wisconsin;
o a distribution center in Eau Claire, Michigan; and
o a grape receiving station in Portland, New York.
In addition to helping reduce our transportation and distribution
costs, these new facilities would continue to produce the Seneca, TreeSweet and
Awake branded products currently offered by Seneca.
We intend to complete the Seneca acquisition during the second quarter
of fiscal 1999. We have not yet entered into a definitive purchase agreement
with Seneca regarding the acquisition, and, if and when we do, its closing will
still be subject to certain conditions. As a result, we cannot guarantee that we
will complete the acquisition. We have spent considerable time and attention
developing strategies to take advantage of the anticipated benefits that the
Seneca acquisition would provide. If we do not complete the acquisition, our
results of operations and our future strategic plans could be adversely
affected. Even if we complete the acquisition, we may experience difficulties
integrating Seneca's operations with our own. Also, we can't be certain that
current Seneca customers will remain our customers following the acquisition.
Should these things happen, or should we incur costs or experience problems
which we did not expect as a result of the acquisition, our results of
operations could be adversely affected.
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Branded Products
Products
Our family of Northland 100% juice cranberry blends is our primary
branded product. We introduced Northland 100% juice cranberry blends in late
1995 and achieved national distribution in the summer of 1997. As of September
13, 1998, our Northland 100% juice cranberry blends were available in all 50
states and in about 84% of supermarkets nationwide. We currently produce and
sell eight flavors, including traditional cranberry, cranberry apple, cranberry
raspberry, cranberry grape, cranberry peach, cranberry cherry, cranberry
blackberry and cranberry strawberry. Only one bottle size, 64-ounce, has been
generally available in supermarkets nationwide. However, we recently introduced
new bottle sizes, including a 46-ounce plastic bottle in supermarkets and a
128-ounce plastic bottle and 16-ounce plastic bottle multi-packs in warehouse
clubs.
In addition to Northland 100% juice cranberry blends, we also grow and
package Northland brand fresh cranberries and sell them in 12-ounce plastic bags
mainly to food retailers and wholesalers during the fall.
In November 1998, we announced that we hired Scott Corriveau to be our
President - Branded Division. Mr. Corriveau, who will assume his duties with us
in December 1998, has over 16 years experience in the beverage industry, most
recently as the Vice President, Sales and Customer Marketing for the Dr.
Pepper/7Up Premier Beverages Division of Cadbury Beverages. Mr. Corriveau will
be responsible for overseeing the continued development of our family of 100%
juice blends as well as the marketing and sale of Seneca branded products if we
complete the Seneca acquisition.
Marketing
Our principal consumer marketing strategy for our family of Northland
100% juice cranberry blends is to highlight the differences in flavor and health
benefits between Northland brand 100% juice cranberry blends and many of the
competing products of Ocean Spray and others which have less than 100% juice.
Our marketing strategy includes:
o media advertising
- we used a national television advertising campaign in fiscal
1998 designed to appeal to and be seen by our target audience and to
promote their awareness of our product, its 100% juice content, and the
lesser juice content of many of our competitors' products. We will
continue advertising on television in fiscal 1999 by again buying
advertising time on daytime network shows, cable networks, and
syndicated programming, and by adding primetime broadcast network
advertising. We also anticipate additional brand-building media efforts
in fiscal 1999, including a new national magazine advertising campaign
which will begin in November 1998. We spent approximately $7.8 million
on these types of media advertising in fiscal 1998 and intend to spend
approximately $10-12 million on these types of media advertising in
fiscal 1999; and
o sales promotion
- we offer coupons to attract first-time buyers and give
people who already drink Northland 100% juice cranberry blends
incentive to purchase more of our products. We anticipate that our
fiscal 1999 sales promotions will be consistent with fiscal 1998
levels.
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In addition to media advertising and sales promotions, we are currently
in the process of redesigning the Northland 100% juice label with the intention
of making the Northland name more visible on the bottle and making the 100%
juice content of the product more prominently shown. We also hope the new label
will be more appealing to consumers and easier to read.
In addition to our new President-Branded Division, our branded juice
marketing efforts are coordinated by our Vice President-Marketing (who has over
20 years of marketing experience in the food and consumer products industries),
a marketing manager, an assistant product manager, and support staff personnel.
We also employ our own creative services department, including a manager and two
graphic designers, to help in marketing and promotional efforts, and use the
services of an advertising agency to help us develop our marketing strategies.
Sales
Dollar sales of shelf-stable cranberry beverages continued to increase
in fiscal 1998, and we anticipate they will continue to increase in fiscal 1999.
We hope to realize increased sales of our branded juice products by:
o continuing our trade promotion plan
- on a periodic basis, we offer discounts on our products to
retailers and wholesalers to temporarily reduce the price of our
products to consumers and to obtain store display features and retail
advertisements. These efforts help to increase our product visibility
and offer the consumer savings on our products. We anticipate that
we'll increase these trade promotion activities in fiscal 1999;
o expanding our product selection by introducing more Northland sizes
and adding Seneca products;
o continuing to increase distribution of our branded products into
certain regional supermarkets where our products are not yet available; and
o establishing or increasing our presence in other sales channels such
as supercenters, mass merchandisers, club stores and drug stores.
With the planned increase in consumer marketing spending discussed in
"Marketing," above, we expect to spend approximately $35 million (which does not
include possible spending related to products added through the potential Seneca
acquisition) on advertising, promotion and slotting expenses in support of our
brand in fiscal 1999. We use the term "slotting" to refer to fees that we pay to
retailers in order to secure space on their shelves for our products. In fiscal
1998, we spent approximately $27 million on advertising, promotion and slotting.
Our branded juice sales are coordinated by our Vice President-Sales and
our Director of Sales (who together have over 40 years of sales experience in
the food and consumer products industries), as well as a sales coordinator and
eight regional sales managers. In addition to their experience with our branded
products to date, many of our sales staff personnel have prior sales experience
working for companies such as ConAgra, Inc., H.J. Heinz Company, Campbell's Soup
Company, RJR Nabisco and Welch's. Our sales staff directs distribution and sale
of our branded juice products through a network of over 70 independent food
brokers throughout the United States. If we complete the Seneca acquisition, we
will add an additional regional sales manager. Seneca also has a food broker
network of about the same size, which we anticipate combining to some degree
with our own food broker network to make our sales operations more efficient.
-6-
Competition
The consumer cranberry product market is large and very competitive.
Based on industry data, retail supermarket bottled shelf-stable cranberry
beverage sales were approximately $735 million for the 52-weeks ended September
13, 1998. The shelf-stable cranberry beverage market is significantly larger if
you include all sales channels as opposed to just supermarkets. Most of the
markets in which we compete are dominated by Ocean Spray. Ocean Spray is an
agricultural marketing cooperative which has certain protections under federal
anti-trust laws. Ocean Spray has over 700 member-growers, accounting for
approximately 70% of all cranberries grown in North America. Based on IRI data,
for the 12-weeks ended September 13, 1998, Ocean Spray products represented
approximately 58.8% of the supermarket shelf-stable cranberry beverage market,
down from approximately 62.8% for the 12-weeks ended September 14, 1997. We had
the second largest market share for the 12-weeks ended September 13, 1998 with
11.9%.
Northland 100% juice cranberry blends compete with:
o Ocean Spray's branded cranberry juice products;
o branded cranberry juice products of other producers;
o private label cranberry juice products; and
o other juice and beverage products.
Our Northland branded juice products are 100% juice cranberry blends.
Most of our competitors' products are made up of much less than 100% juice. For
example, Ocean Spray's Cranberry Juice Cocktail contains only up to 27%
cranberry juice with the remainder being water and high fructose corn syrup.
Like Ocean Spray, many other competitors' juices use sugar or corn syrup
additives as sweeteners. We believe that we have an advantage over many of our
competitors due to the perceived benefits of our 100% juice products. We also
believe that the continued success of our branded juice products will depend on
whether consumers will continue to think highly of its quality and taste
compared to that of our competitors' products.
Northland 100% juice cranberry blends are premium-priced products. Our
products compete mainly with other premium-priced branded cranberry beverages,
but also with private label products which are usually lower priced.
During fiscal 1998, Ocean Spray introduced a product line of 100% juice
cranberry blends which compete directly with Northland 100% juice cranberry
blends. We expect that Ocean Spray will continue to compete aggressively against
our 100% juice cranberry blend products, possibly by increasing advertising of
its 100% juice product line, reducing product pricing, increasing its trade
promotions or other actions. Ocean Spray has significantly more experience in
the fruit juice markets than we do, as well as greater brand name recognition
and greater marketing and distribution resources. We cannot be certain that we
will be successful in competing against Ocean Spray.
We also compete with Ocean Spray and other brand label producers in the
market for fresh cranberry sales during the fall. We expect to continue to
compete in the fresh cranberry market by selling Northland brand fresh
cranberries at competitive prices. Ocean Spray has significantly more experience
in the sale of branded fresh cranberries than we do, as well as greater brand
name recognition and greater marketing and distribution resources. We cannot be
certain that we will be successful in competing against Ocean Spray in the fresh
cranberry market.
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If we complete the Seneca acquisition, we will also sell the Seneca
products mentioned above under the heading "Potential Seneca Acquisition." The
addition of these products should allow us to compete for the first time in the
markets for frozen juice concentrate and shelf-stable canned fruit juices and
drinks. If we enter these markets, we would compete against several established
brand names including Welch's, TreeTop, Tropicana, Mott's and Minute Maid. Many
of these competitors have greater brand name recognition and greater marketing
and distribution resources than we do. Ocean Spray does not compete in either
the frozen juice concentrate market or the shelf-stable canned fruit juice
market.
Non-Branded Products
Products
Our major non-branded products are private label cranberry and other
fruit juices. We use the term "private label" to refer to products which we
manufacture and sell to customers who sell those products to consumers under
their own labels. Before we acquired Minot, we had a very small presence in the
private label fruit juice market. Our acquisition of Minot gives us an
established base of private label customers and expertise in private label
processing and bottling. Combined with our existing network of contract
co-packers, Minot's bottling operations will also allow us to provide quicker
and lower-cost service to our private label customers than we could before.
We now offer private label cranberry juice and cranberry juice
cocktail, as well as private label apple, orange, pineapple, grape, grapefruit
and lemon juice. In addition to fruit drinks, we offer other non-branded
products including:
o industrial cranberry concentrate;
o jellied and whole cranberry sauce;
o frozen and whole sliced cranberries;
o single-strength cranberry juice;
o sports drinks; and
o ready-to-drink teas.
We also offer other non-branded products and services. For example, we
co-pack for several customers. We also own Wildhawk Inc., which sells
agricultural chemicals and fertilizer to cranberry growers.
Marketing and Sales
Our marketing and sales efforts for our non-branded products are
different from our efforts for our branded products. This is mainly because we
market our branded products directly to the consumer, while we sell non-branded
products to retail and other customers who then either market those products
under their own labels or use those products to make other consumer products. As
a result, our non-branded marketing efforts do not include media advertising or
other traditional branded product marketing support. Rather, we market our
private label products three primary ways:
o we compete on the basis of strong historical supplier relationships
and quality assurance. Many sellers of private label products maintain
relationships with their historical suppliers. The Minot acquisition provided us
with a longstanding private label customer base. Because we are able to perform
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our own bottling operations, we can also provide better quality assurance to our
private label customers and reduce bottling costs by relying less on co-packers;
o we offer product variety to retail customers. Since we work with
retail buyers on an ongoing basis, we are able to supply some of their private
label fruit juice needs as well. We believe that the acquisition of Seneca, if
completed, will further our ability to provide category management opportunities
to retailers by further expanding our product selection; and
o we compete on the basis of price. Many private label juice products
are low-cost national brand name alternatives that appeal to consumers who
typically buy lower-priced products. As a result, private label suppliers must
be low cost providers. We believe we may have a competitive advantage in private
label markets over many of our competitors because we grow most of our own
cranberries. As a result, we typically have a lower cost for our cranberries.
In addition, we are currently in the process of expanding our sales
efforts into new sales channels such as mass merchandisers, foodservice
providers and club stores. To better manage this process, we have recently
undergone a divisional restructuring, creating separate divisions for Minot,
club stores/mass merchandisers, foodservice and contract packing relations, all
of which report to our non-branded group president. We have also added several
personnel, including a Private Label Division President, a director of
foodservice, and former employees of Minot with experience in private label
sales. We intend to market our non-branded products to alternative channels by
offering low prices and category management opportunities.
Most of our non-branded revenues were realized from sales of cranberry
concentrate in fiscal 1998. Fiscal 1998 revenues from private label sales were
minimal, largely because we acquired Minot with only two months remaining in the
fiscal year. Sales of other non-branded products, such as single-strength
cranberry juice and Wildhawk's products, did not have a material impact on our
revenues in fiscal 1998. We intend to continue to pursue sales opportunities for
our non-branded products, primarily in mass merchandisers and club stores as
well as in the foodservice and industrial/ingredient markets, in fiscal 1999.
Competition
According to industry data, private label products represented over 19%
of all fruit beverages and over 18% of all cranberry drinks sold in supermarkets
nationally in 1998. As mentioned, competition in private label is based mainly
on price. Also, the private label markets are characterized by longstanding
relationships between retailers and private label manufacturers, and by
retailers who are reluctant to approve new manufacturers and vendors. As a
result, before we acquired Minot, we were largely unsuccessful in our attempts
to compete in private label. The acquisition of Minot provided us with an
established base of private label customers, and we now compete in the market
for private label cranberry juice, sauce and other processed cranberry products
with a small number of other private label manufacturers, including primarily
Clement Pappas & Co. and Cliffstar Corporation. These and other private label
processors have significant experience in the private label fruit juice and
processed cranberry products markets and have established co-packing and
bottling operations and customer bases. We may not be successful in competing
against certain major independent processors.
Private label cranberry products also compete against branded cranberry
products. Our private label products may not be able to compete successfully
against private label products of other suppliers, or the branded products of
Ocean Spray or others.
We also compete for the sale of cranberry concentrate, single-strength
cranberry juice and frozen whole and sliced cranberries to industrial customers,
such as food processors and foodservice
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companies. Cranberry concentrate is currently our principal industrial product
in terms of sales volume and potential. Our industrial customer base includes
several major food processing firms. We believe our own ability to grow and
internally process cranberries allows us to offer a reliable supply of high
quality, competitively priced cranberry products to our industrial customers.
Manufacturing
Processing and Bottling
An important part of our marsh to market strategy is our ability to
process our grown and purchased cranberries, as well as our ability to bottle
our own branded and private label products. We utilize different types of
facilities at different stages in the processing and bottling of cranberries and
cranberry-based products:
o raw cranberries are brought to our receiving stations. We
own a 150,000 square foot receiving station and fresh fruit packaging
facility in Wisconsin Rapids, Wisconsin and a 49,000 square foot
receiving station in Massachusetts. These receiving stations clean and
sort raw cranberries;
o after sorting, the cranberries we sell as fresh fruit during
the fall are stored in temperature-controlled facilities until they are
packaged and distributed for sale. Cranberries we use to make our juice
and other cranberry products are cleaned, sorted and stored in our
65,000 square foot freezer facility in Wisconsin Rapids, our freezer
facilities in Bridgeton, or independent freezer facilities, until they
are sent to one of our processing plants or to one of our co-packers;
o we have a 16,000 square foot processing plant in Wisconsin
Rapids and a 10,000 square foot processing plant in Bridgeton, New
Jersey. Our Wisconsin Rapids plant processes cranberries into cranberry
concentrate, which is used to make Northland branded juice, private
label products, or is sold to other manufacturers of cranberry
products. Our Bridgeton plant processes cranberries into
single-strength juice, used to manufacture private label products.
The Bridgeton plant also produces other juice products such as the
private label apple, orange, grape and other fruit juice products which we now
manufacture and sell following the Minot acquisition.
We acquired the Bridgeton facilities when we bought Minot. These
facilities are still fairly new to our business operations, so we have not yet
taken full advantage of the efficiencies we expect they will provide. We expect
these new facilities will help reduce our transportation, handling and storage
costs by allowing us to ship cranberries grown on our Massachusetts properties
to Minot's facilities for processing and storage. We also anticipate Northland
brand production at the Bridgeton facility will help reduce our distribution
costs and lead-times to our customers in the eastern United States.
While we are now able to perform some of our own bottling operations,
we still maintain agreements to formulate and bottle our processed cranberry
blends with three co-packers in strategic locations around the country.
Distribution Network
We have an internal transportation department which contracts with
independent carriers to distribute our bottled products to various grocery
stores and retail outlets. We currently have 11 distribution centers owned or
under contract, including a current co-packing arrangement to utilize Seneca's
distribution center in Eau Claire, Michigan, as well its three processing plants
which also act as distribution
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centers. We believe that our distribution centers, combined with the strategic
locations of our current co-packers, lowers our freight and production costs, as
well as allows for timely response to customer demands.
Agricultural Operations
An important factor in successfully implementing our marsh to market
strategy, and one of the major differences between us and many of our
competitors, is our ability to grow a significant and reliable supply of
cranberries on our owned or leased properties. We are the world's largest
cranberry grower, with 25 owned or operated properties and approximately 2,549
planted acres in Wisconsin and Massachusetts as of November 25, 1998. In the
fall of 1997 (i.e., fiscal 1998), we harvested a record 417,000 barrels from
2,243 acres. The large harvest was due in part to the maturation of hybrid
high-yield cranberry vines which we planted in our expansion program in prior
years. On our hybrid acres in 1997, we achieved an average of 259 barrels
harvested per acre, compared to around 170 barrels on our non-hybrid acreage.
To supplement our own internal supply of cranberries, we also contract
with other cranberry growers in Wisconsin and Oregon to purchase their crop. In
fiscal 1998, we bought approximately 104,000 barrels of cranberries from other
growers. As of November 25, 1998, we maintain multi-year crop purchase contracts
with 27 independent cranberry growers to purchase all of the cranberries
harvested from an aggregate of 1,557 planted acres. None of these contracts
expires in fiscal 1999. The ability to harvest our own fruit in both Wisconsin
and Massachusetts, combined with the contracted acreage, provides us with
geographical diversity in our crop and spreads our agricultural risk. We expect
the quantity of cranberries purchased under these contracts to increase in
future years as the contracted marsh acreage matures and becomes more
productive. However, we cannot be certain that these contracts will be renewed
when they expire.
We have increased our planted acreage over time mainly through marsh
acquisitions and our own internal planting program. From August 1987 through
November 15, 1998, we added, through acquisitions or leases, a total of 20 marsh
properties. During this period, our total planted acreage has increased 656%,
from 337 acres to 2,549 acres.
The quality and quantity of cranberries produced in any given year is
dependent upon certain factors which we have little control over. For example,
extremes in temperature, rainfall levels, storms and hail, or crop infestations
can all adversely impact the production in any crop year. While we make efforts
to reduce the potential adverse effects that these factors may have on our
internal crop, our cranberry production remains subject to these agricultural
factors.
We also have crop insurance coverage for all of our marshes which is
subsidized by the federal government. These policies help insure against bad
weather and other contingencies which may affect our crop. They generally insure
us for up to 75% of the average crop yield on each marsh over the past 10 years.
Regulation
Cranberry Products Regulation
The production, packaging, labeling, marketing and distribution of our
fresh cranberries and cranberry juice products are subject to the rules and
regulations of various federal, state and local food and health agencies,
including the United States Food and Drug Administration, the United States
Department of Agriculture, the Federal Trade Commission and the Environmental
Protection Agency. We
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believe we have complied, and will be able to comply, in all material respects
with such rules, regulations and laws.
Environmental and Other Governmental Regulation
It can be difficult under federal laws for cranberry growers and other
developers to obtain permits to create new cranberry marshes in wetlands in the
United States. To do so, such growers must generally observe a "no net loss" of
wetlands policy. That is, they must show that the proposed development activity
will not result in a loss of wetland acreage, or they must restore the
functional value of acreage they propose to disturb. Given this strict
requirement, as well as strict water quality legislation in Wisconsin and
Massachusetts, we believe it is currently unlikely that we, or other cranberry
growers or developers in North America, will be able to secure permits for
cranberry marsh development or expansion in wetland acreage. However, we and
other growers or developers may renovate existing wetland acreage from time to
time and replant older cranberry vine varieties with higher-yielding vine
varieties. Also, certain developers have begun to create upland cranberry
marshes, which are marshes that are not on wetland acreage. We do not know
whether upland marshes, if successful, will increase the available supply of
cranberries in the future.
Certain growers have also begun to plant, cultivate, and develop new
cranberry-producing acreage in several states and abroad. Because of
environmental regulations, the soil and temperature conditions necessary to grow
cranberries and the long lead-time required for cranberry vines to mature, we do
not expect these efforts to materially affect the supply of cranberries in
fiscal 2000.
We are currently taking steps to clean up certain contamination caused
by underground storage tanks at one of our marshes in Wisconsin and one in
Massachusetts. We have removed the tanks and reported this to the appropriate
state regulatory agencies. Our clean-up activities are subject to state
supervision. Based on information available as of August 31, 1998, we believe
most of the costs of such activities will be covered by state reimbursement
funds (except in the case of the Massachusetts property), or claims against the
prior owners of the properties. We do not expect to incur material liabilities
as a result of these activities.
The Wisconsin Department of Natural Resources approved regulations
which became effective in May 1998 and which amended parts of the Wisconsin
Administrative Code to make it easier to obtain the DNR's approval to maintain
existing cranberry marshes and to obtain state water quality certification to
conduct activities in wetlands under a federal permit. However, as a result of
the continued federal restrictions on wetland development and the long lead-time
associated with the planting and maturation of cranberry vines, we do not expect
the regulations to materially affect the supply of cranberries in Wisconsin in
the near term.
The Cranberry Marketing Committee of the United States Department of
Agriculture has the authority to recommend that the Secretary of the USDA impose
harvest restrictions on cranberry growers if the CMC believes there will be an
over-supply of cranberries for the coming crop year. The USDA has not imposed
such restrictions since 1971. While we do not anticipate any such restrictions
in the near future, we can't be certain that such restrictions will not be
imposed.
We don't expect environmental or other governmental legislation or
regulation to have a material effect on our capital expenditures, results of
operations or competitive position, other than as we have described above.
-12-
Seasonality
Before fiscal 1997, our business was very seasonal because we sold most
of our crop to cranberry processors. Now that we have changed from a cranberry
grower to a consumer products company, we expect to reduce the seasonality of
our business because we will offer branded and private label products for sale
throughout the entire year. We do expect, however, that our results of
operations will continue to fluctuate from quarter to quarter depending mainly
upon the level of media advertising and other promotional expenditures in any
given quarter.
Materials and Supplies
We buy bottles, caps, flavorings, juices and packaging either from our
co-packers or independent third parties. We get most of the materials and
supplies necessary for growing and cultivating cranberries, including water and
sand, from our own marshes. We purchase and expect to continue purchasing most
of our fertilizer and pesticides from Wildhawk. We purchase the rest of the raw
materials and supplies, including the materials used to package our fresh fruit,
from various sources.
If necessary, we believe we would be able to find other sources for raw
materials and supplies without a material delay or adverse effect on our
business.
Trademarks and Formulae
We own the Northland and Minot trademarks, which are registered in the
United States Patent and Trademark Office. The Northland trademark is important
in the sale of our branded fresh cranberries and cranberry juice products. We
expect it will become more important as Northland brand 100% juice cranberry
blends continue to grow in market share and distribution.
If we complete the Seneca acquisition, we will also own the TreeSweet
and Awake trademarks. These trademarks are also registered in the United States
Patent and Trademark Office. Additionally, we expect to enter into a license
agreement with Seneca in connection with the acquisition which will allow us to
market and sell Seneca brand juice and concentrate.
We use proprietary flavor formulations to make our cranberry blends. We
protect the confidentiality of these formulations by requiring co-packers to
enter into confidentiality agreements with us.
Employees
As of August 31, 1998, we had 212 full-time employees, as compared to
203 as of August 31, 1997. In addition to our full time employees, we hired:
o approximately 90 seasonal workers during the 1998 crop cultivation
season;
o approximately 264 seasonal workers to harvest our crop; and
o approximately 117 seasonal employees to operate the cranberry
processing facility in Wisconsin Rapids from September through December 1997.
We also had 34 full-time employees in sales and marketing as of August
31, 1998, compared to 20 as of August 31, 1997.
Seneca's juice division currently has over 350 employees.
-13-
We have entered into collective bargaining agreements with unions
representing the former Minot employees in New Jersey. Those agreements cover
about 160 employees and expire on May 14, 2001. We believe our current
relationships with our employees, both union and non-union, is good.
Item 2. Properties
In Wisconsin Rapids, Wisconsin we own three office buildings, including
our corporate headquarters, an office building near our processing plant and the
Northland Conference Center. We also own a 150,000 square foot receiving station
and fresh fruit packaging facility located on 40 acres which we use to clean and
store processed and fresh cranberries. Also in Wisconsin Rapids, we own a 16,000
square foot juice concentrating facility which gives us the capacity to
concentrate over 400,000 barrels of cranberries every year.
In Bridgeton, New Jersey, we own a dry warehousing, receiving and
shipping facility; a processing plant; four cold storage facilities; a
manufacturing and bottling facility; and an office building.
We also own a 49,000 square foot receiving station located on a
seven-acre parcel of land adjacent to the Hanson Division bogs in Massachusetts.
In addition to our facilities, we own 22 cranberry marshes and lease
another three. We have set forth in the following table information about each
of our 25 cranberry marshes as of November 25, 1998. We own all of these marshes
in fee simple (or we lease them, in either case as indicated below), subject to
mortgages (except for the Dandy Creek, Nantucket and Hills Division Marshes and
one of the two marshes in each of the Associate and Crawford Creek Divisions).
All of our marshes have storage buildings and repair shops for machinery, trucks
and harvest and irrigation equipment. Each also has a house on site or close to
the site which serves as the marsh manager's residence. Many of our marshes also
have residences for assistant marsh managers. We believe that all of our
facilities are suitable and adequate for our existing needs.
-14-
Marsh Division Name and Location November 25, 1998 Calendar Year
- -------------------------------- ---------------------------
Approximate Approximate Acquired
Marsh Acres Planted Acres or Leased
Associates Division (two marshes), Jackson County, Wisconsin..... 4,198 159 1983/1996
Meadow Valley Division, Jackson County, Wisconsin................ 2,150 77 1984
Fifield Division, Price County, Wisconsin........................ 2,460 196 1985
Three Lakes Division, Oneida County, Wisconsin................... 1,542 82 1985
Chittamo Division, Douglas and Washburn Counties, Wisconsin...... 620 55 1985
Biron Division, Wood County, Wisconsin........................... 473 212 1987
Warrens Division, Monroe County, Wisconsin....................... 160 63 1987
Trego Division, Washburn County, Wisconsin....................... 1,715 96 1988
Gordon Division, Douglas County, Wisconsin....................... 880 149 1988
Mather Division, Juneau County, Wisconsin........................ 2,500 148 1989
Nekoosa Division (two marshes), Wood County, Wisconsin........... 569 85 1989
Nantucket Division (two marshes), Nantucket County,
Massachusetts.................................................. 737 211 1990
Crawford Creek Division (two marshes), Jackson County,
Wisconsin...................................................... 304 135 1991
Hills Division, Jackson County, Wisconsin (leased)............... 465 70 1991
Hanson Division (two marshes), Plymouth County, Massachusetts.... 2,025 322 1993
Yellow River (two marshes), Juneau County, Wisconsin............. 1,714 252 1994
Dandy Creek, Monroe County, Wisconsin............................ 350 55 1996
Manitowish Waters (two marshes), Vilas County, Wisconsin......... 345 182 1996
--- ---
Total......................................................... 23,207 2,549
====== =====
Item 3. Legal Proceedings.
As of the date hereof, we are not a party to any legal proceedings
which, in our opinion, would have a material adverse effect on our results of
operations or financial condition if they were determined unfavorably to us.
Item 4. Submission of Matters to a Vote of Shareholders.
We did not submit any matters to a vote of our shareholders during the
fourth quarter of fiscal 1998.
-15-
Executive Officers
As of November 25, 1998, each of our executive officers is identified
below together with information about each officer's age, current position with
us and employment history for at least the past five years:
Name Age Current Position
John Swendrowski 50 Chairman of the Board and
Chief Executive Officer
Robert E. Hawk 43 Group President - Non-Branded Divisions
John A. Pazurek 49 Vice President - Finance, Treasurer and
Chief Financial Officer
William J. Haddow 50 Vice President - Purchasing and
Transportation
Steven E. Klus 52 Manufacturing Division President
David J. Lukas 56 Senior Vice President - Administration/
Secretary and Corporate Counsel
Scott Corriveau 40 President - Branded Division
John Stauner 36 Agricultural Operations Division President
John S. Wilson 48 East Coast Division Vice President
John Swendrowski originally founded Northland in 1987 and has served as
our Chief Executive Officer since that time.
As part of our recent divisional restructuring, in August 1998 Robert
E. Hawk was appointed Group President-Non-Branded Divisions. Before that, he
served as our Executive Vice President since October 1996; Vice President -
Sales, Marketing and Special Projects since January 1993; and Vice President -
Operations since January 1989.
John Pazurek is a certified public accountant who joined us as
Controller and Principal Accounting Officer in May 1987. In May 1990, he was
promoted to Vice President-Finance and in August 1993 he was promoted to
Treasurer. In October 1996, Mr. Pazurek was also appointed Chief Financial
Officer.
Bill Haddow was named Vice President - Purchasing and Transportation in
September 1998. Before that, he served as Vice President-Purchasing,
Transportation and Budget since October 1996; Vice President-Purchasing and
Transportation from May 1993; and Assistant Vice President-Purchasing from 1989.
We named Steve Klus our Manufacturing Division President in September
1998. He joined us in April 1996 as the Director of Strategic Product Planning.
He was appointed Vice President-Manufacturing in October 1996. Before that, he
served as President-Eastern Division of Seneca Foods Corporation in New York
from May 1990.
Dave Lukas has been with us since April 1992 when he joined us as Vice
President of Human Resources and Corporate Counsel. In May 1995 he was promoted
to Secretary and in August 1996 to Vice President-Administration. In September
1998, he was promoted to Senior Vice President-Administration, Secretary and
Corporate Counsel. Before joining us, he practiced law in Wisconsin Rapids for
over 20 years.
-16-
Scott Corriveau was named our new President-Branded Division in
November 1998 and will assume his duties with us in December 1998. Before that,
Mr. Corriveau held sales and marketing positions with Cadbury Beverages PLC,
based in London, England, since 1989. His positions with Cadbury Beverages
included Vice President, Sales and Customer Marketing of the Dr. Pepper/7Up
Premier Beverages Division since 1997 and Vice President, Customer Marketing of
the Mott's U.S.A. Division since 1995. Mr. Corriveau has over 16 years of
experience in the beverage industry, including nearly eight years with Cadbury
Beverages and seven years with Brown Forman Beverage Company.
John Stauner became our Agricultural Division President in September
1998. Before that, he was our Vice President-Agricultural Operations since
October 1996; Vice President-Operations from May 1995; and Assistant Vice
President of Operations since we were formed in 1987.
John Wilson joined us in October 1993 and was promoted to Vice
President - East Coast Operations in May 1994. In October 1996, his title
changed to Vice President-East Coast. He became our East Coast Division Vice
President in connection with our divisional restructuring in September 1998.
Before joining us, he served as Manager-Grower Services at Ocean Spray in
Lakeville, Massachusetts from 1988.
Our executive officers are generally elected annually by the Board of
Directors after the annual meeting of shareholders. Each executive officer holds
office until his successor has been duly qualified and elected or until his
earlier death, resignation or removal.
-17-
PART II
Item 5. Market for the Company's Common Equity and Related Shareholder Matters.
We have adjusted all share data appearing in the table below where
necessary to reflect our two-for-one stock split effected in the form of a 100%
stock dividend on September 3, 1996 on our Class A Common Stock.
Sale Price Range of Class A Common Stock (1)
- --------------------------------------------------------------------------------------------------------------------
First Quarter Second Quarter Third Quarter Fourth Quarter
- --------------------------------------------------------------------------------------------------------------------
Fiscal Year Ended August 31, 1998
High $21.25 $16.50 $19.13 $16.13
Low $13.00 $12.63 $12.75 $9.63
Fiscal Year Ended August 31, 1997
High $25.25 $27.50 $20.75 $19.25
Low $15.25 $17.00 $8.88 $12.69
- ---------------
1. The range of sale prices listed for each quarter includes intra-day
trading prices as reported on The Nasdaq Stock Market.
On November 25, 1998, there were approximately 9,200 beneficial
shareholders for the shares of our Class A Common Stock and three shareholders
of record for the shares of our Class B Common Stock. Shares of our Class A
Common Stock trade on The Nasdaq Stock Market under the symbol CBRYA. No public
market exists for the shares of our Class B Common Stock.
See Item 6 for information on cash dividends paid on our Common Stock.
On November 25, 1998, the last sale price of shares of our Class A Common Stock
was $12.5625 per share.
Item 6. Selected Financial Data.
Pursuant to Instruction G, we have incorporated the information
required by this Item by reference from information under the caption "Selected
Financial Data" in our 1998 Annual Report to Shareholders.
Item 7. Management's Discussion and Analysis of Financial Condition and Results
of Operations.
Pursuant to Instruction G, we have incorporated the information
required by this Item by reference from information under the caption
"Management's Discussion and Analysis of Results of Operations and Financial
Condition" in our Annual Report.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk.
This item is not applicable.
-18-
Item 8. Financial Statements and Supplementary Data.
Pursuant to Instruction G, we have incorporated by reference our
Consolidated Balance Sheets as of August 31, 1998 and 1997, our Consolidated
Statements of Earnings, Cash Flows and Shareholders' Equity for the years ended
August 31, 1998, 1997 and 1996, together with the related Notes to Consolidated
Financial Statements (including supplementary financial data) from information
under the captions having substantially the same titles in the Annual Report.
Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure.
None.
-19-
PART III
Item 10. Directors and Executive Officers of the Company.
Pursuant to Instruction G, we have incorporated the information
required by this Item with respect to directors by reference to the information
set forth under the caption "Election of Directors" in our definitive proxy
statement for our 1999 annual meeting of shareholders filed with the Commission
pursuant to Regulation 14A on November 24, 1998. The information required by
Item 405 of Regulation S-K is also incorporated by reference to the information
set forth under the caption "Other Matters-Section 16(a) Beneficial Ownership
Reporting Compliance" in the Proxy Statement. The required information with
respect to executive officers appears at the end of Part I of this Form 10-K.
Item 11. Executive Compensation.
Pursuant to Instruction G, we have incorporated the information
required by this Item by reference to the information set forth under the
caption "Executive Compensation" in the Proxy Statement.
Item 12. Security Ownership of Certain Beneficial Owners and Management.
Pursuant to Instruction G, we have incorporated the information
required by this Item by reference to the information set forth under the
caption "Stock Ownership of Management and Others" in the Proxy Statement.
Item 13. Certain Relationships and Related Transactions.
None.
-20-
PART IV
Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K.
(a) We have filed the following documents as part of this Form 10-K:
1. Financial Statements
Consolidated Balance Sheets as of August 31, 1998 and 1997
Consolidated Statements of Earnings, Cash Flows and Shareholders'
Equity for the fiscal years ended August 31, 1998, 1997 and 1996
Notes to Consolidated Financial Statements
Independent Auditors' Report
We have omitted other schedules because they are not required or not
applicable, or the information required to be shown is included in our financial
statements and related notes.
3. Exhibits and Reports on Form 8-K.
(a) The exhibits filed herewith or incorporated by reference herein
are set forth on the attached Exhibit Index.*
(b) We filed the following Current Reports on Form 8-K with the
Securities and Exchange Commission during the fourth quarter of
fiscal 1998 and the first quarter of fiscal 1999 through the date
of this Form 10-K:
DATE FILED DATE OF REPORT ITEM
September 14, 1998 July 1, 1998 Item 7 - Financial Statements
related to the Acquisition of Minot
Food Packers, Inc.
July 15, 1998 July 1, 1998 Item 2 - Acquisition of Minot Food
Packers, Inc.
- -------------------
* We will furnish to shareholders the Exhibits to this Form 10-K,
including long-term debt instruments disclosed in Exhibit 4.5, on
request and advance payment of a fee of $0.20 per page, plus mailing
expenses. Requests for copies should be addressed to John A. Pazurek,
Chief Financial Officer, Northland Cranberries, Inc., 800 First Avenue
South, P.O. Box 8020, Wisconsin Rapids, Wisconsin 54495-8020.
-21-
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, as amended, the Company has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
NORTHLAND CRANBERRIES, INC.
Date: November 25, 1998 By:/s/ John Swendrowski
John Swendrowski
Chairman of the Board and
Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, this report has been signed on November 25, 1998 below by the following
persons on behalf of the Company and in the capacities indicated.
By:/s/ John Swendrowki By:/s/ John C. Seramur
John Swendrowski John C. Seramur
Chairman of the Board, Director
Chief Executive Officer and Director
By:/s/ John A. Pazurek By:/s/ LeRoy J. Miles
John A. Pazurek LeRoy J. Miles
Vice President-Finance, Treasurer, Chief Director
Accounting Officer and Chief Financial Officer
By:/s/ Jeffrey J. Jones By:/s/ Robert E. Hawk
Jeffrey J. Jones Robert E. Hawk
Director Group President - Non-Branded
Divisions and Director
By:/s/ Patrick F. Brennan By:/s/ Jerold D. Kaminski
Patrick F. Brennan Jerold D. Kaminski
Director Director
By:/s/ Pat Richter
Pat Richter
Director
-22-
EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION
2 Asset Purchase Agreement, dated as of July 1, 1998, by and among the
Company, Minot Food Packers, Inc. and Michael A. Morello.
[Incorporated by reference to Exhibit 2.0 to the Company's
Registration Statement on Form S-3 (Reg. No. 333-53173).]
3.1 Articles of Incorporation, as amended, dated January 8, 1997.
[Incorporated by reference to Exhibit 3.4 to the Company's Form 10-K
for the fiscal year ended August 31, 1996.]
3.2 Amendment to the By-Laws of the Company, dated October 21, 1998.
3.3 By-Laws of the Company, as amended and restated.
4.1 Secured Promissory Note, dated as of June 14, 1989, issued by the
Company to The Equitable Life Assurance Society of the United
States. [Incorporated by reference to Exhibit 10.1 to the Company's
Form 8-K dated July 7, 1989.]
4.2 Mortgage and Security Agreement, dated as of June 14, 1989, from the
Company to The Equitable Life Assurance Society of the United
States. [Incorporated by reference to Exhibit 10.2 to the Company's
Form 8-K dated July 7, 1989.]
4.3 Mortgage and Security Agreement dated July 9, 1993, between the
Company and The Equitable Life Assurance Society of the United
States. [Incorporated by reference to Exhibit 4.8 to the Company's
Form 10-Q dated November 12, 1993.]
4.4 Modification Agreement, dated as of July 9, 1993, between the
Company and The Equitable Life Assurance Society of the United
States. [Incorporated by reference to Exhibit 4.9 to the Company's
Form 10-Q dated November 12, 1993.]
4.5 Amended and Restated Credit Agreement, dated October 3, 1997,
between the Company and Harris Trust & Savings Bank. [Incorporated
by reference to Exhibit 4.5 to the Company's Form 10-K for the
fiscal year ended August 31, 1997.]
4.6 First Amendment to Amended and Restated Credit Agreement, dated as
of September 30, 1998, between the Company and Harris Trust &
Savings Bank.
4.7 Second Amendment to Amended and Restated Credit Agreement and
Amendment to Revolving Credit Note, dated as of November 20, 1998,
between the Company and Harris Trust & Savings Bank.
4.8 Revolving Credit Note, dated October 3, 1997, by the Company in
favor of Harris Trust & Savings Bank. [Incorporated by reference to
Exhibit 4.6 to the Company's Form 10-K for the fiscal year ended
August 31, 1997.]
-23-
EXHIBIT NO. DESCRIPTION
4.9 Term Credit Note One, dated June 6, 1995, between the Company and
Harris Trust & Savings Bank. [Incorporated by reference to Exhibit
4.13 to the Company's Form 10-K for the fiscal year ended March 31,
1995.]
4.10 Term Credit Note Two, dated June 6, 1995, between the Company and
Harris Trust & Savings Bank. [Incorporated by reference to Exhibit
4.14 to the Company's Form 10-K for the fiscal year ended March 31,
1995.]
4.11 Term Credit Note Three, dated June 6, 1995, between the Company and
Harris Trust & Savings Bank. [Incorporated by reference to Exhibit
4.15 to the Company's Form 10-K for the fiscal year ended March 31,
1995.]
4.12 Secured Promissory Note, dated July 9, 1993, between the Company and
The Equitable Life Assurance Society of the United States.
[Incorporated by reference to Exhibit 4.23 to the Company's Form
10-K for the fiscal year ended March 31, 1995.]
4.13 Stock Pledge, dated July 9, 1993, between the Company and The
Equitable Life Assurance Society of the United States. [Incorporated
by reference to Exhibit 4.24 to the Company's Form 10-K for the
fiscal year ended March 31, 1995.] Other than as set forth in
Exhibits 4.1 through 4.13, the Company has numerous instruments
which define the rights of holders of long-term debt. These
instruments, primarily security agreements and mortgages, were
entered into in connection with debt financing provided by Harris
Trust & Savings Bank, and are disclosed in the Amended and Restated
Credit Agreement filed as Exhibit 4.5 to this Form 10-K. The Company
will furnish a copy of any of such instruments to the Commission
upon request.
*10.1 1987 Stock Option Plan, dated June 2, 1987, as amended.
[Incorporated by reference to Exhibit 10.5 to the Company's Form
10-K for the fiscal year ended December 31, 1987.]
*10.2 Forms of Stock Option Agreement, as amended, under 1987 Stock Option
Plan. [Incorporated by reference to Exhibit 10.6 to the Company's
Form 10-K for the fiscal year ended December 31, 1987.]
*10.3 Form of Modification Agreement, dated as of April 16, 1996, between
the Company and each of John A. Pazurek, John B. Stauner, John
Swendrowski, William J. Haddow and Robert E. Hawk, modifying Stock
Option Agreements previously entered into between the parties.
[Incorporated by reference to Exhibit 10.3 to the Company's Form 10-
K for the fiscal year ended August 31, 1996.]
-24-
EXHIBIT NO. DESCRIPTION
*10.4 1989 Stock Option Plan, as amended. [Incorporated by reference to
Exhibit 4.4 to the Company's Form S-8 Registration Statement (Reg.
No. 33-32525).]
*10.5 Forms of Stock Option Agreements under the 1989 Stock Option Plan,
as amended. [Incorporated by reference to Exhibits 4.5-4.8 to the
Company's Form S-8 Registration Statement (Reg. No. 33-32525).]
*10.6 1995 Stock Option Plan, as amended. [Incorporated by reference to
Exhibit 10.6 to the Company's Form 10-K for the fiscal year ended
August 31, 1997.]
*10.7 Form of Stock Option Agreements under the 1995 Stock Option Plan, as
amended. [Incorporated by reference to Exhibit 10.7 to the Company's
Form 10-K for the fiscal year ended August 31, 1996.]
10.8 Lease Agreement dated September 5, 1991 between The Equitable Life
Assurance Society of the United States and the Company.
[Incorporated by reference to Exhibit 10.13 to the Company's Form
10-K for the fiscal year ended March 31, 1992.]
10.9 Agreement dated September 5, 1991 between the Company and Cranberry
Hills Partnership. [Incorporated by reference to Exhibit 10.14 to
the Company's Form 10-K for the fiscal year ended March 31, 1992.]
10.10 Lease, dated March 31, 1994 between Nantucket Conservation
Foundation, Inc. and the Company. [Incorporation by reference to
Exhibit 10.11 to the Company's Form 10-K for the fiscal year ended
March 31, 1994.]
*10.12 Key Executive Employment and Severance Agreement, dated as of May 8,
1992, between the Company and John Swendrowski. [Incorporated by
reference to Exhibit 10.25 to the Company's Form 10-K for the fiscal
year ended March 31, 1992.]
*10.13 Northland Cranberries, Inc. 1998 Incentive Bonus Plan. [Incorporated
by reference to Exhibit 10.14 to the Company's Form 10-K for the
fiscal year ended August 31, 1997.]
*10.14 Northland Cranberries, Inc. 1999 Incentive Bonus Plan.
13 Portions of the 1998 Annual Report to Shareholders expressly
incorporated by reference into this Form 10-K.
21 Subsidiaries of the Company.
23 Consent of Deloitte & Touche LLP.
27 Financial Data Schedule.
99 Definitive Proxy Statement for the Company's 1999 annual meeting of
shareholders scheduled to he held on January 6, 1999 previously
filed with the Commission under Regulation 14A on November 24, 1998
and
-25-
EXHIBIT NO. DESCRIPTION
incorporated by reference herein to extent indicated in this Form
10-K).
* This exhibit is a management contract or compensatory plan or arrangement
required to be filed as an exhibit to this Form 10-K pursuant to Item 14(c) of
Form 10-K.