FORM 10-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the Fiscal year ended December 31, 2001
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: 33-15962
WHITEFORD PARTNERS, L.P.
(Exact name of registrant as specified in its charter)
Delaware 76-0222842
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
770 North Center Street, Versailles, Ohio 45380
- ----------------------------------------- ----------
(Address of principal executive offices) (Zip Code)
1-800-225-6328
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Name of Each Exchange
Title of Each Class On Which Registered
------------------- -------------------
None None
Securities registered pursuant to Section 12(g) of the Act:
Limited Partnership Units
1,306,890 Units Outstanding
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes __X__ No ____
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.
Yes __X__ No ____
At March 28, 2002, 1,306,890 Class A units had been subscribed and
issued.
INDEX
Item
No. Description Page
- ------ -------------------------------------------------------------------
PART I
1. Business 1
2. Properties 3
3. Legal Proceedings 3
4. Submission of Matters to a Vote of Security Holders 3
PART II
5. Market for Registrant's Common Equity and Related Stockholder
Matters 3
6. Selected Financial Data 4
7. Management's Discussion and Analysis of Financial Condition and
Results of Operations 5
7A. Quantitative and Qualitative Disclosure About Market Risk 6
8. Financial Statements and Supplementary Data 6
9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure 7
PART III
10. Directors and Executive Officers of the Registrant 7
11. Executive Compensation 7
12. Security Ownership of Certain Beneficial Owners and Management 8
13. Certain Relationships and Related Transactions 8
PART IV
14. Exhibits, Financial Statement Schedules and Reports on Form 8-K 8
PART I
ITEM 1. BUSINESS
A. GENERAL DEVELOPMENT OF BUSINESS
Whiteford Partners, L.P. (the "Partnership") was formed on June 30, 1987,
as a Delaware limited partnership. The Partnership consists of a General
Partner, Gannon Group, Inc., and Limited Partners. The offering period of the
Partnership terminated on November 10, 1989, with $13,557,550 of Limited Partner
gross subscriptions received in the form of Class A Units. Pursuant to the terms
of the Prospectus, offering proceeds in the amount of $140,365 were returned to
certain Ohio residents when the Partnership's business acquisition program was
not substantially completed by December, 1989. The Partnership was organized
principally to form, acquire, own and operate businesses engaged in the
development, production, processing, marketing, distribution and sale of food
and related products (the "Food Businesses").
In the first quarter of 1990, the Partnership entered into a limited
partnership, Whiteford Foods Venture, L.P. ("Whiteford's") which was formerly
named Granada/Whiteford Foods Venture, L.P., with a wholly-owned subsidiary of
the former General Partner, G/W Foods, Inc., for the purpose of acquiring the
assets, certain liabilities and the operations of Whiteford's Inc., a further
processor and distributor of beef products to major fast food restaurants and
regional chains, which was located in Versailles, Ohio. The acquisition, which
was made with Partnership funds, was closed March 26, 1990, with the
Partnership's resultant equity interest in Whiteford's being in excess of 99%.
On April 23, 1990, all outstanding and contingent items were resolved and
completed, and the acquisition of the assets was funded on April 24, 1990.
On May 4, 1992, the outstanding shares of G/W Foods, Inc. were assigned by
the former General Partner to Gannon Group, Inc., a corporation owned by Kevin
T. Gannon, a Director and Vice President of G/W Foods, Inc. At that time, Mr.
Gannon was also a former Vice President of Granada Corporation and certain of
its affiliates. Also on May 4, 1992, Granada Management Corporation assigned its
sole general partnership interest in the Partnership to Gannon Group, Inc. The
effect of these assignments is for Gannon Group, Inc. to have general
partnership authority and responsibility with respect to the Partnership and,
through G/W Foods, Inc., of Whiteford's.
Subject to the availability of capital resources and/or financing, the
Partnership Agreement permits the acquisition of additional Food Businesses that
produce, process or distribute specialty food products including businesses that
possess technology or special processes which could increase the productivity or
processing capability of the Partnership's current Food Business or which
enhance the marketability or resale value of the Partnership's Food Business
products. At the present time, no acquisitions are contemplated.
The Partnership sold (the "Sale Transaction") substantially all its assets
on November 11, 2001, to an affiliate of Rochester Meat Company ("Rochester
Meat"), an unaffiliated company, pursuant to an Asset Purchase Agreement (the
"Agreement"). The purchase price was $7,950,000, including the assumption or
payment of certain liabilities. The purchase price was paid $1,500,000 in cash
and the issuance of a subordinated note the "Subordinated Note" due June 30,
2007 in the principal amount of $1,350,000 (as adjusted) with the balance of the
purchase price paid by the assumption of certain liabilities net of other
assets. The Subordinated Note bears interest at 9.5% and is prepayable under
certain conditions. Additionally, the principal balance of the Subordinated Note
may be adjusted downward under certain circumstances.
In connection with the transaction with Rochester Meat, the Partnership
was obligated to pay up to $500,000 to Greenaway Consultants, Inc. pursuant to a
consulting agreement. Greenaway Consultants, Inc. acquired the right to such
payment in connection with its provision of management services and financing to
the Partnership. The Partnership and Greenaway Consultants, Inc. agreed to: (i)
defer $50,000 of such payment until January 2002, (ii) subordinate $300,000 of
such payment to the distribution by the Partnership of $2.00 per limited partner
unit (an aggregate of $2,613,780) and (iii) forgive $150,000 of such payment.
Greenaway Consultants, Inc. is wholly owned by Albert Greenaway. Neither Mr.
Greenaway nor Greenaway Consultants, Inc. owns any interest in the general
partner of the Partnership. This $300,000 payment to Greenaway Consultants has
not been accrued as a result of its subordination to the partnership.
Upon completion of the transaction, the Partnership's assets included the
net cash proceeds and the Subordinated Note, subject to the then remaining
obligations to Greenaway Consultants, Inc. and the General Partner, other
closing costs and potential liabilities, if any, associated with pending
litigation with Ameriserve, Inc., a former customer and a major national
distributor of food and related products, which filed for protection under
bankruptcy proceedings in January, 2000. As a debtor in bankruptcy, Ameriserve
has claimed that all payments made to creditors during the ninety days prior to
the bankruptcy are preference items which Ameriserve may recover from its
creditors. As a result, Ameriserve instituted a lawsuit against the Partnership
and other suppliers to recover its estimate of the preference amounts. The
amount sought by Ameriserve in the lawsuit approximated $800,000. The
Partnership filed a response to their motion and entered into a settlement
agreement with Ameriserve in January 2002. Such settlement agreement provided
for a payment by the Partnership of $40,000, which was paid in January 2002 to
settle such claim.
1
The Partnership is considering the contribution of the net assets of the
Partnership to a liquidation trust, which will then collect the Subordinated
Note.
B. FINANCIAL INFORMATION ABOUT INDUSTRY SEGMENTS
Prior to the Sale Transaction, the Partnership operated principally in the
food processing and distribution business. The Partnership is presently holding
and managing the proceeds of sale and related assets.
C. DESCRIPTION OF BUSINESS
The Partnership was organized to form, acquire, own and operate
businesses engaged in the development, production, processing, marketing,
distribution and sale of food and related products. Prior to the Sale
Transaction, the Partnership operated a further processing and meat production
operation at one location--Versailles, Ohio.
Versailles, Ohio Plant Operation
Prior to the Sale Transaction, Whiteford's was a further processor and
distributor of meat products to major fast food restaurants and regional chains
and food distributors. The Partnership served major metropolitan areas such as
Chicago, Cincinnati, Cleveland, Columbus, Detroit, Indianapolis, Louisville and
St. Louis. Whiteford's principal products were fresh frozen hamburger patties;
precooked and uncooked ground beef, taco meat and roast beef; marinated beef
entrees; and other items processed to customers' specifications. Prior to the
Sale Transaction, Whiteford's purchased products principally from major domestic
packers and regional distributors.
Prior to the Sale Transaction and for the period ended November 11, 2001,
and the years ended 2000 and 1999, Whiteford's processed and sold 28.9 million
pounds of products ($31.9 million), 40.3 million pounds of products ($40.2
million), and 55.9 million pounds of products ($51.5 million), respectively,
through its further processing and distribution operations.
Marketing and Sales
Prior to the Sale Transaction, Whiteford's customers consisted primarily
of fast food retail chains in addition to HRI (Hotel, Restaurant, Institutional)
customers and food products distributors. Sales operations were conducted
locally by sales representatives from the Versailles location and through
unaffiliated food products distributors and food brokers.
The following customers contributed more than 10% of Whiteford's revenues,
prior to the Sale Transaction, for the period ended November 11, 2001: Gordon
Food Service, 37.8%; and Harkers, 11.304%.
Historically, a significant portion of Whiteford's business had been
lodged with relatively few major national and regional accounts. During the year
2000, a significant customer eliminated Whiteford's as one of its suppliers as a
result of a reduction of its distribution system after a bankruptcy filing by
its major distributor.
Prior to the Sale Transaction, all of Whiteford's sales are to customers
in the United States and Canada.
Regulatory Matters
Prior to the Sale Transaction, all of Whiteford's meat production
operations were subject to ongoing inspection and regulation by the United
States Department of Agriculture ("USDA"). Whiteford's plant and facilities were
subject to periodic or continuous inspection, without advance notice, by USDA
employees to ensure compliance with USDA standards of sanitation, product
composition, packaging and labeling. All producers of meat and other food
products must comply with substantially similar standards.
Prior to the Sale Transaction, Whiteford's was subject to federal, state
and local laws and regulations governing environmental protection, compliance
with which has required capital and operating expenditures. The General Partner
believes Whiteford's was in substantial compliance with such laws and
regulations prior to the Sale Transaction. The General Partner is not aware of
any violations of, or pending changes in such laws and regulations that are
likely to result in material penalties.
Prior to the Sale Transaction, Whiteford Foods was subject to various
other federal, state and local regulations, none of which imposed material
restrictions on its operations.
Employees
The Partnership's operations have been managed by its general partner,
Gannon Group, Inc. since May 4, 1992, and Granada Management Corporation from
inception to May 4, 1992. Directly, the Partnership has no employees. The
Partnership has utilized the services of employees of the General Partner as
needed for certain administrative services.
2
The Whiteford's operation at Versailles, Ohio employed 175 personnel at
November 11, 2001, the date of the Sale Transaction and no employees as of
December 31, 2001. The General Partner believes there will be sufficient
personnel available to adequately manage the Partnership's business affairs.
ITEM 2. PROPERTIES
Properties Utilized by the Partnership
The Partnership's executive offices are those of the General Partner,
located at 770 North Center Street, Versailles, Ohio 45380.
The following table sets forth Whiteford's operational facilities and
approximate capacities as of November 11, 2001, immediately prior to the Sale
Transaction. As of December 31, 2001, the Partnership owns no operational
facilities.
Estimated Annual
Tons of Production
------------------
General 2001
Location Character Size Capacity Actual
- ----------------- ---------- -------------------------------------------------------- -------- ------
Versailles, Ohio Meat Two separate facilities (1) 71,400 and (1) 33,000 square 40,000 19,000
Processing feet on 20 acres of land, (8) hamburger/specialty lines,
Plant (2) grinding lines, (1) precooked line, (3) smoke houses,
freezers, coolers, dry storage and office space.
All Whiteford's facilities were subject to a mortgage with two banks, prior to
the Sale Transaction.
ITEM 3. LEGAL PROCEEDINGS
Ameriserve, Inc., a former customer and a major national distributor of
food and related products, filed for protection under bankruptcy proceedings in
January, 2000. As a debtor in bankruptcy, Ameriserve has claimed that all
payments made to creditors during the ninety days prior to the bankruptcy are
preference items which Ameriserve may recover from its creditors. As a result,
Ameriserve instituted a lawsuit against the Partnership and other suppliers to
recover its estimate of the preference amounts.
The amount sought by Ameriserve in the lawsuit approximated $800,000. The
Partnership filed a response to their action. In January 2002, the Partnership
entered into a settlement agreement with Ameriserve which required a payment of
$40,000 by the Partnership. A payment of $40,000 was made in January 2002
pursuant to the Settlement Agreement. The Partnership recorded a liability of
$40,000 in connection with the Ameriserve action. The Partnership, prior to the
Settlement Agreement, had agreed to escrow proceeds from the sale of its assets
to defend or satisfy the Ameriserve potential claims until such claims were
settled or otherwise compromised.
In December 2001, following the Sale Transaction, Ameriserve notified the
Partnership that Ameriserve discovered what it believes are overpayments to the
Partnership for prior purchases in the approximate amount of $189,000.
Ameriserve subsequently notified the Partnership that if payment of the alleged
overpayment is not received, Ameriserve will file a lawsuit to collect the
amount allegedly owing. The Partnership is investigating the alleged
overpayments and the potential liability, if any, for such alleged overpayments.
However, at this time since no litigation has been commenced, it is not possible
to evaluate the likelihood of an unfavorable outcome or to estimate the amount
or range of potential loss, if any, related to the overpayment allegation.
There are no other material pending or threatened legal proceedings
involving the Partnership, known to either the Partnership or the General
Partner.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matter was submitted to a vote of the Limited Partners of the
Partnership during 2001.
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
There is no established public trading market for the Partnership's
Limited Partnership Units.
The following table sets forth the amounts and dates of distributions to
holders of Limited Partnership Units in 1998 and 1999. No distributions were
issued during 2000 or 2001.
3
Amount Per Limited
Date Aggregate Amount Partnership Unit
---- ---------------- -------------------
February 25, 1998 $65,344.50 $0.05
May 29, 1998 65,344.50 0.05
August 25, 1998 65,344.50 0.05
November 27, 1998 65,344.50 0.05
March 2, 1999 65,344.50 0.05
May 31, 1999 65,344.50 0.05
Prior to the Sale Transaction, certain of the Partnership's loans with its
lender contain restrictive covenants. One of the covenants restricted the
Partnership from declaring or paying any distributions to its partners without
the prior consent of the bank. Such loans were paid in full in 2001 as the
result of the Sale Transaction.
The following table sets forth the approximate number of holders of record
of the equity securities of the Partnership as of December 31, 2001:
Title of Class Number of Record Holders
-------------- ------------------------
Limited Partnership Units 1,428
ITEM 6. SELECTED FINANCIAL DATA
The selected financial data set forth below should be read in conjunction
with the consolidated financial statements, the notes thereto and other
financial information included elsewhere herein, including "Management's
Discussion and Analysis of Results of Operations and Financial Condition." The
table following reflects the results of operations of acquired businesses for
periods subsequent to their respective acquisition dates.
Year Ended December 31
----------------------------------------------------------------------------------
2001 2000 1999 1998 1997
---- ---- ---- ---- ----
STATEMENT OF OPERATIONS DATA:
Revenues:
Sale of meat products $ 31,936,702 $ 40,158,449 $ 51,549,748 $ 62,431,746 $ 62,224,110
Interest and other 214,760 158,450 166,680 338,696 256,416
------------- ------------- ------------- ------------- -------------
Total revenues 32,151,462 40,316,899 51,716,428 62,770,442 62,480,526
------------- ------------- ------------- ------------- -------------
Cost of sales 30,874,256 37,024,111 48,705,602 57,551,373 57,846,006
------------- ------------- ------------- ------------- -------------
Gross profit
Meat products 1,062,446 3,134,338 2,844,146 4,880,373 4,378,104
Other 214,760 158,450 166,680 338,696 256,416
------------- ------------- ------------- ------------- -------------
Total gross profit 1,277,206 3,292,788 3,010,826 5,219,069 4,634,520
------------- ------------- ------------- ------------- -------------
Selling and admin expenses 1,436,690 1,688,685 2,266,593 2,575,320 2,447,303
Depreciation, amortization
and interest 1,474,437 2,007,919 1,915,768 1,907,188 1,932,836
Writeoff of goodwill 2,350,550 0 0 0 0
Loss on sale of assets 1,972,651 0 0 0 0
------------- ------------- ------------- ------------- -------------
7,234,328 3,696,604 4,182,361 4,482,508 4,380,139
------------- -------------- ------------- ------------- -------------
Net (Loss) Income $ (5,957,122) $ (403,816) $ (1,171,535) $ 736,561 $ 254,381
============ ============= ============= ============= =============
(Loss) Income per unit of
Limited Partners' Capital $ (4.51) $ (0.31) $ (0.90) $ 0.56 $ 0.19
============= ============= ============= ============= =============
Weighted average units
outstanding 1,306,890 1,306,890 1,306,890 1,306,890 1,306,890
============= ============= ============= ============= =============
BALANCE SHEET DATA (December 31):
Working capital (deficit) $ 1,190,648 $ (246,226) $ (1,372,016) $ (55,756) $ (397,866)
Total assets $ 2,686,919 $ 16,755,410 $ 19,620,720 $ 20,986,810 $ 21,798,022
Long-term debt, less current
maturities 0 $ 4,050,711 $ 3,527,128 $ 4,001,939 $ 4,732,167
Total partners' capital $ 2,540,648 $ 8,497,770 $ 8,901,586 $ 10,205,117 $ 9,732,547
4
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Management's discussion and analysis set forth below should be read in
conjunction with the Consolidated Financial Statements and the notes thereto
included elsewhere herein.
Information Regarding and Factors Affecting Forward-Looking Statements:
The partnership is including the following cautionary statement in this
Annual Report on Form 10-K to make applicable and take advantage of the safe
harbor provision of the Private Securities Litigation Reform Act of 1995 for any
forward looking statements made by, or on behalf of the Partnership.
Forward-looking statements include statements concerning plans, objectives,
goals, strategies, future events or performance and underlying assumptions and
other statements that are other than statements of historical facts. Certain
statements contained herein are forward-looking statements and, accordingly,
involve risk and uncertainties, which could cause actual results to differ
materially from those expressed in the forward-looking statements. The
Partnership's expectations, beliefs and projections are expressed in good faith
and are believed by the Partnership to have reasonable basis, including without
limitation, Management's examination of historical operating trends, data
contained in the Partnership's records, and other data available from third
parties, but there can be no assurance that Management's expectations, beliefs,
or projections would result or be achieved or accomplished. In addition to other
factors and matters discussed elsewhere herein, important factors that, in the
view of the Partnership, could cause actual results to differ materially from
those discussed in the forward-looking statements include demand for Whiteford
Foods' products, the ability of Whiteford Foods to obtain widespread market
acceptance of its products, the ability of the Partnership to obtain acceptable
forms and amounts of financing, competitive factors, regulatory approvals and
developments, economic conditions, the impact of competition and pricing, and
other factors affecting the partnership and Whiteford Foods' business that is
beyond the Partnership's control. The Partnership has no obligation to update or
revise these forward-looking statements to reflect the occurrence of future
events or circumstances.
The Partnership was organized as a Limited Partnership with a maximum
operating life of twenty years ending 2007. The source of its capital has been
from the sale of Class A, $10 Limited Partnership units in a public offering
that terminated on November 10, 1989.
Results of Operations
Year Ended December 31, 2000, Compared to Year Ended December 31, 1999
Revenues for the year ended December 31, 2000 were $40,316,899 versus
$51,716,428 for the year ended December 31, 1999, a decrease of $11,399,529.
During the 2000 period, 40,350,723 pounds of meat products were sold versus
55,948,467 pounds during the 1999 period, a decrease of 15,597,744 pounds. The
decrease in pounds of meat products sold is primarily attributable to the
decrease in sales order from certain customers.
Costs of meat products sold for the year ended December 31, 2000 were
$37,024,111 versus $48,705,602 for the year ended December 31, 1999, a decrease
of $11,681,491. During the 2000 period, 40,350,723 pounds of meat products were
sold versus 55,948,467 pounds during the 1999 period. The average cost of meat
products sold for 2000 was $.918 versus $.871 in the 1999 period, an increase of
5.4%. The increase in the cost per pound is primarily attributable to general
composition of the product.
Gross margins on meat sales were 7.8% for the year ended December 31, 2000
and 5.5% for the 1999 period. This increase in gross margins is primarily
attributable to the semi-variable nature of certain costs in the costs of meat
products sold such as labor, packaging, and utilities.
Selling and administrative expenses decreased to $1,688,685 during the year
ended December 31, 2000 versus $2,266,593 for the same period in 1999. The
decrease is primarily attributable to reduction in volume.
Depreciation and amortization expense for the year ended December 31, 2000
was $1,302,441 versus $1,263,659 for the same period in 1999, an increase of
3.1%.
Interest expense for the year ended December 31, 2000 was $705,478 versus
interest expense of $652,109 for the same period in 1999. This increase of
$53,369 primarily relates to the higher interest rates during 2000.
The Partnership reported net loss of $403,816 for the year ended December
31, 2000 versus a net loss of $1,171,535 for the 1999 period.
Year Ended December 31, 2001, Compared to Year Ended December 31, 2000
Revenues for the year ended December 31, 2001 were $32,151,152 versus
$40,316,899 for the year ended December 31, 2000, a decrease of $8,165,437.
During the 2001 period, 28,929,580 pounds of products were sold versus
40,350,723 pounds during the 2000 period, a decrease of 11,521,143 pounds. This
decrease in pounds of meat products sold is primarily attributable to the
decrease in sales orders from certain customers and the Sale Transaction which
reduced the operation period in 2001.
Cost of meat products sold for the year ended December 31, 2001 were
$30,874,256 versus $37,024,111 for the year ended December 31, 2000, a decrease
of $6,149,855.
5
Gross margins on meat sales were 3.3% for the year ended December 31, 2001
and 7.8% for the 2000 period. This decrease in gross margins is primarily
attributable to: i) increase in raw material costs and ii) the semi-variable
nature of certain costs of meat products sold such as labor, packaging and
utilities.
Selling and administrative expenses decreased to $1,436,690 during the year
ended December 31, 2001 verses $1,688,685 for the same period in 2001. The
decrease is primarily attributable to reduction in volume.
Depreciation and amortization expense for the year ended December 31, 2001
was $1,034,873 versus $1,302,441 for the same period in 2000.
Interest expense for the year ended December 31, 2001 was $439,564 versus
interest expense of $705,478 for the same period in 2000. The decrease of
$265,914 primarily relates to the decrease in the average debt outstanding
during 2001 as the result of the Sale Transaction.
The Partnership reported a net loss of $5,957,122 for the year ended
December 31, 2001 versus a net loss of $403,816 for 2000 period, reflecting the
aforementioned change in operations, a loss on sale of assets and writeoff of
goodwill.
The loss on the sale of assets was taken in the third quarter to reflect
the expected transaction to occur with Rochester Meat Company, in the amount of
1,972,651. The assets were written down to their net realizable value in
accordance with Financial Accounting Standards Board Statement No. 121. The
decline in value was attributed to the declining economic conditions and the
events of September 11, 2001.
Goodwill was removed in the third quarter in the amount of 2,354,550 to
reflect the proposed sales transaction to Rochester Meat Company. The goodwill
was written down to $0 in accordance with Financial Accounting Standards Board
Statement No. 121. The write down was attributed to the declining economic
conditions and the events of September 11, 2001.
Liquidity and Capital Resources
At December 31, 2001, the Partnership had a working capital position of
$1,190,648, versus a negative working capital of $246,226 at December 31, 2000.
Cash provided by operating activities was $1,383,582 for the year ended
December 31, 2001 reflecting a net loss of $5,957,122, depreciation and
amortization of $1,034,873, a loss on sale of assets of $1,972,651, and the
write off of goodwill of $2,350,550, and a net decrease in other assets of
$1,982,631. Cash provided by operating activities for the year ended December
31, 2000 was $1,570,271, with a net loss of $403,816, depreciation and
amortization of $1,302,441,and a decrease in other net operating assets of
$671,646.
Cash provided by (used in) investing activities was $6,086,633 for 2001
versus ($296,418) for 2000. Cash used from financing activities for 2001 was
$6,473,651 verses cash used from financing activities for 2000 was $1,225,758.
The Limited Partnership Agreement provides for the General Partner to
receive an annual administrative fee. The fee is equal to 2% (adjusted for
changes in the Consumer Price Index after 1989) of net business investment
(defined as $8.50 multiplied by Partnership units outstanding). However, such
amounts payable to the General Partner are limited to 10% of aggregate
distributions to all Partners from "Cash Available for Distributions." As
defined in the Limited Partnership Agreement, that portion of the management fee
in excess of such 10% limitation is suspended, and future payment is contingent.
The Administrative Management Fees paid to the General Partner and recorded by
the Partnership were $0 in 2001, $0 in 2000, $13,069 in 1999, $26,138 in 1998,
$13,069 in 1997, $-0- in 1996, $10,455 in 1995, $13,069 in 1994, $2,614 in 1993,
and $-0- in 1992. Suspended fees during 2001, 2000, 1999, 1998, 1997, 1996,
1995, 1994, 1993 and 1992 respectively, are $300,000, $300,000, $287,000,
$274,000, $287,000, $300,000, $290,000, $222,000, $229,000, and $228,000,
respectively. The General Partner has agreed to subordinate payment of such fees
to the distribution of $2.00 per unit to Limited Partners and the payment of
deferred payments to Greenaway Consultants, Inc.
During the second quarter of 2002, the Partnership expects to make a
distribution of excess working capital. The amount of such distribution will
depend upon the availability of cash at that time. The General Partner estimates
a per unit distribution of approximately $.75.
ITEM 7A. QUANTATATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
In the normal operation, the Company has market risk exposure to interest
rates on its cash investments and subordinated note. At December 31, 2001, the
Company had $2,675,875 in interest bearing investments that are subject to
market risk exposure to change in interest rates.
The Company holds a Subordinated Note with interest fixed at 9 1/2% for the
life of the note which comes due June 30, 2007. The remaining amount is subject
to normal economic risk associated with fluctuating money markets. A 1% increase
or decrease in rates would have approximately $15,000 impact in net income.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The financial statements and supplementary data of the Partnership are
included in this report after the signature page.
6
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE PARTNERSHIP
Management
The Partnership has no officers or directors. The affairs of the
Partnership are managed by the Gannon Group, Inc., the General Partner. The
directors, executive officers and key employees of the General Partner as of
December 31, 2001, are as follows:
Kevin T. Gannon, age 45, sole director, President and sole stockholder of
Gannon Group, Inc.
Mr. Gannon is a private investor and a Managing Director of Robert A.
Stanger & Co., Inc., a New Jersey based investment banking, investment research
and consulting firm. Mr. Gannon is a Certified Public Accountant.
No director or officer of the General Partner was, during the last five (5)
years, the subject (directly, or indirectly as a general partner of a
partnership or as an executive officer of a corporation) of a bankruptcy or
insolvency petition, of any criminal proceeding (excluding traffic violations
and other minor offenses), or restrictive orders, judgments or decrees enjoining
him from or otherwise limiting him from acting as a futures commission merchant,
introducing broker, commodity trading advisor, commodity pool operator, floor
broker, leverage transaction merchant, any other person regulated by the
Commodity Futures Trading Commission, or an associated person of any of the
foregoing, or as an investment adviser, underwriter, broker or dealer in
securities, or as an affiliated person, director or employee of any investment
company, bank, savings and loan association or insurance company, or engaging in
or continuing any conduct or practice in connection with such activity, engaging
in any business activity, or engaging in any activity in connection with the
purchase or sale of any security or commodity or in connection with any
violation of Federal or State securities laws or Federal commodities laws, or
was the subject of any existing order of a federal or state authority barring or
suspending for more than sixty (60) days the right of such person to be engaged
in such activity.
ITEM 11. EXECUTIVE COMPENSATION
Current Year Remuneration
The Partnership has no officers or directors. Accordingly, no direct
remuneration was paid to officers and directors of the Partnership for the year
ended December 31, 2001. Remuneration to the General Partner is pursuant to
Article VI of the LIMITED PARTNERSHIP AGREEMENT (filed as Exhibit A to the
Prospectus included in the Partnership's Registration Statement on Form S-1
[File No. 2-98273]) and incorporated herein by reference.
Pursuant to Section 6.4(c) of the Limited Partnership Agreement, the
General Partner is entitled to receive a management fee of approximately
$300,000 for the calendar year 2001. However, Section 6.4(c)(v) limits all
amounts payable to the General Partner pursuant to Section 6.4(c) to an amount
which does not exceed 10% of aggregate distributions to Partners from "Cash
Available for Distributions". Under the Limited Partnership Agreement, Cash
Available for Distributions is comprised of cash funds from operations (after
all expenses, debt repayments, capital improvements and replacements, but before
depreciation) less amounts set aside for restoration or reserves. That portion
of the management fee in excess of such 10% limitation is suspended, and future
payment is delayed until such payment may be made without exceeding such limit.
On dissolution of the Partnership, Section 15.3(a)(ii) of the Limited
Partnership Agreement generally provides for the payment of creditors, and then
pro rata payment to record holders for loans or other amounts owed to them by
the Partnership, including without limitation any amounts owed to the General
Partner pursuant to Section 6.4. Any amounts payable to the General Partner
under Section 15.3(a)(ii) will be dependent upon the funds available for
distribution on the dissolution of the Partnership.
Section 6.4(e) of the Limited Partnership Agreement also provides the
General Partner a subordinated special allocation equal to 15% of any gain on
the sale of partnership assets or food businesses. Among other things, this
special allocation is subordinated to payments to the limited partners for
certain distributions. Any payment pursuant to Section 6.4(e) will be dependent
upon the ultimate sale price of such partnership assets or food businesses.
During calendar year 2001 and 2000, the Partnership made no distributions
to the Limited Partners. During calendar year 1999, the Partnership made
aggregate distributions of $130,869. As a result in 2001, the Partnership
suspended payment to the General Partner of $300,000 of such management fee. The
cumulative amount of annual management fees that have been suspended is
$2,717,000.
Other Compensation Arrangements
There is no plan provided for or contributed to by the Partnership or the
General Partner which provides annuity, pension or retirement benefits for the
General Partner or the officers and directors of the General Partner. There is
no existing plan provided for or contributed to by the General Partner which
provides annuity, pension or benefits for its officers or directors. There are
no arrangements for remuneration
7
covering services as a director between the Partnership and any director of the
General Partner. No options to purchase any securities of the General Partner
were granted or exercised during its fiscal year ended December 31, 2001. No
options were held to purchase securities of the Partnership as of December 31,
2001, and as of the date hereof.
After the Partnership acquired the assets of Whiteford's, Inc., Whiteford's
entered into a Services Agreement with Greenaway Consultant, Inc. ("GCI") under
which GCI managed Whiteford's. GCI is owned by one of Whiteford's, Inc.'s former
principal shareholders. This agreement was extended to December 31, 2002, and
modified pursuant to the Sale Transaction.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Principal Security Holders
The General Partner owns the entire general partnership interest, which
interest controls the Partnership. The General Partner does not beneficially
own, either directly or indirectly, any equity security in the Partnership,
other than the general partner interest.
Contractual Arrangements Affecting Control
On May 4, 1992, the outstanding shares of G/W Foods, Inc. were assigned by
Granada Management Corporation to Gannon Group, Inc., a corporation owned by
Kevin T. Gannon, a Director and Vice President of G/W Foods, Inc. and also a
former Vice President of Granada Corporation and certain of its affiliates. Also
on May 4, 1992, Granada Management Corporation assigned its sole general
partnership interest in the Partnership to Gannon Group, Inc. The effect of
these assignments is for Gannon Group, Inc. to have general partnership
authority and responsibility with respect to the Partnership and, through G/W
Foods, Inc., of Whiteford's.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
None.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
All schedules to the consolidated financial statements are omitted, because
the required information is inapplicable or has been presented in the financial
statements or related notes thereto.
A form 8-K was filed during the period ended December 31, 2001, reflecting
the Sale Transaction.
8
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
Whiteford Partners L.P.
-----------------------
(Registrant)
By Gannon Group, Inc.
Its General Partner
Date: March 28, 2002 /s/ Kevin T. Gannon
- ---------------------- -------------------
Chief Executive Officer
And President
Pursuant to the requirements of the Securities Act of 1934, this Report
has been signed below by the following persons on behalf of the registrant and
in the capacities and on the dates indicated:
Signatures Title Date
- ---------- ----- ----
/s/ Kevin T. Gannon Chief Executive officer, President, Chairman of the Board March 28, 2002
- ------------------- and Sole Director (Principal Executive Officer), Chief --------------
Kevin T. Gannon Financial Officer, and Chief Accounting Officer
9
ANNUAL REPORT ON FORM 10-K
ITEM 8, ITEM 14(a)(1) AND (2), (c) and (d)
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
CERTAIN EXHIBITS
YEAR ENDED DECEMBER 31, 2000
WHITEFORD PARTNERS, L.P.
10
FORM 10-K -- Item 8, Item 14 (a) (1) and (2), (c) and (d)
The following financial statements and financial statement schedules
of the Partnership are included as part of this report at Item 8:
(a) 1. Financial Statements
Consolidated Balance Sheets - December 31, 2001, and 2000.
Consolidated Statements of Operations - for the years ended December
31, 2001, 2000, and 1999.
Consolidated Statements of Changes in Partners' Capital - for the
years ended December 31, 2001, 2000, and 1999.
Consolidated Statements of Cash Flows - for the years ended December
31, 2001, 2000, and 1999.
Notes to Consolidated Financial Statements
Report of Independent Auditors
(a) 2. See Index to Exhibits immediately following the financial statement
schedules.
11
Whiteford Partners, L.P.
CONSOLIDATED BALANCE SHEETS
Year Ended December 31
----------------------------
2001 2000
------------ ------------
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 1,325,875 $ 329,311
Accounts Receivable - trade 0 1,061,960
Inventories 0 2,501,717
Prepaid expenses 0 67,715
Interest Receivable 11,044 0
------------ ------------
TOTAL CURRENT ASSETS 1,336,919 3,960,703
SUBORDINATED NOTE RECEIVABLE PROPERTY AND EQUIPMENT: 1,350,000 0
Land and improvements 0 86,700
Buildings 0 7,311,245
Machinery and equipment 0 11,487,590
Accumulated depreciation 0 (8,540,998)
------------ ------------
TOTAL PROPERTY AND EQUIPMENT 0 10,344,537
OTHER ASSETS - NET OF AMORTIZATION 0 2,450,170
------------ ------------
TOTAL ASSETS $ 2,686,919 $ 16,755,410
============ ============
LIABILITIES AND PARTNERS' CAPITAL
CURRENT LIABILITIES:
Accounts payable - trade $ 0 $ 1,453,765
Notes payable and current maturities on long term debt 0 2,422,940
Accrued expenses and other liabilities 146,271 330,224
------------ ------------
TOTAL CURRENT LIABILITIES 146,271 4,206,929
LONG-TERM DEBT - NET OF CURRENT MATURITIES 0 4,050,711
PARTNERS' CAPITAL:
General Partner:
Capital contributions 132,931 132,931
Capital transfers to Limited Partners (117,800) (117,800)
Interest in net (loss) (49,274) 10,297
Distributions (38,171) (38,171)
------------ ------------
(72,314) (12,743)
------------ ------------
Class A Limited Partners:
Capital contributions, net of organization and
offering costs of $2,010,082 11,172,274 11,172,274
Capital transfers from the General Partner 116,554 116,554
Interest in net (loss) (4,889,268) 1,008,283
Distributions (3,786,598) (3,786,598)
------------ ------------
2,612,962 8,510,513
------------ ------------
TOTAL PARTNERS' CAPITAL 2,540,648 8,497,770
------------ ------------
TOTAL LIABILITIES AND PARTNERS' CAPITAL $ 2,686,919 $ 16,755,410
============ ============
See notes to consolidated financial statements.
F-1
Whiteford Partners, L.P.
CONSOLIDATED STATEMENTS OF OPERATIONS
Year Ended December 31
--------------------------------------------
2001 2000 1999
------------ ------------ ------------
REVENUE
Sales of meat products $ 31,936,702 $ 40,158,449 $ 51,549,748
Interest and other 214,760 158,450 166,680
------------ ------------ ------------
32,151,462 40,316,899 51,716,428
COST AND EXPENSES
Cost of meat products sold 30,874,256 37,024,111 48,705,602
Selling and administrative 1,436,690 1,688,685 2,253,524
Administrative fee - General Partner 0 -- 13,069
Depreciation and amortization 1,034,873 1,302,441 1,263,659
Interest 439,564 705,478 652,109
Write off of Goodwill 2,350,550 0 0
Loss on Sale of Assets 1,972,651 0 0
------------ ------------ ------------
37,893,824 40,720,715 52,887,963
------------ ------------ ------------
NET LOSS ($ 5,957,122) $ (403,816) $ (1,171,535)
============ ============ ============
Summary of net (loss) allocated to:
General Partner ($ 59,571) $ (4,038) $ (11,715)
Class A Limited Partners ($ 5,897,551) (399,778) (1,159,820)
------------ ------------ ------------
$ 5,957,122) $ (403,816) $ (1,171,535)
============ ============ ============
Net (loss) per unit of Limited Partner Capital $ (4.51) $ (0.31) $ (0.90)
============ ============ ============
Weighted average units issued and outstanding 1,306,890 1,306,890 1,306,890
============ ============ ============
See notes to consolidated financial statements.
F-2
Whiteford Partners, L.P.
Consolidated Statements of Changes in Partners' Capital
General Partner Class A Limited Partners
---------------------------------------------------- ----------------------------------------------------
Capital
Transfers
Capital Interest in from Interest in
Capital Transfers to Net Capital General Net
Contributions Limited Partners (Loss) Distributions Contributions Partner (Loss) Distributions
------------- ---------------- ------ ------------- ------------- ------- ----------- -------------
Balance, December 31, 1998 $ 132,931 $ (117,800) $ 26,050 $ (36,864) $ 11,172,274 $ 116,554 $ 2,567,881 $ (3,655,909)
Net Loss (11,715) (1,159,820)
Distributions (1,307) (130,689)
--------------------------------------------------------------------------------------------------------
Balance, December 31, 1999 $ 132,931 $ (117,800) $ 14,335 $ (38,171) $ 11,172,274 $ 116,554 $ 1,408,061 $ (3,786,598)
Net Loss (4,038) (399,778)
--------------------------------------------------------------------------------------------------------
Balance, December 31, 2000 $ 132,931 $ (117,800) $ 10,297 $ (38,171) $ 11,172,274 $ 116,554 $ 1,008,283 $ (3,786,598)
Net Loss (59,571) (5,897,551)
--------------------------------------------------------------------------------------------------------
Balance, December 31, 2001 132,931 (117,800) (49,274) (38,171) 11,172,274 116,554 (4,889,268) (3,786,598)
========================================================================================================
See notes to consolidated financial statements
F-3
Whiteford Partners, L.P.
CONSOLIDATED STATEMENTS OF CASH FLOWS
Year Ended December 31,
--------------------------------------------
2001 2000 1999
------------ ------------- -------------
OPERATING ACTIVITIES:
Net (loss) $ (5,957,122) $ (403,816) $ (1,171,535)
Adjustments to reconcile net (loss) to net cash
provided by operating activities:
Depreciation and amortization 1,034,873 1,302,441 1,263,659
Loss (Gain) on sale of assets 1,972,651 0 (4,000)
Write-off of goodwill 2,350,550 0 0
Changes in operating assets and liabilities:
Accounts receivable - trade 1,061,960 1,006,468 1,264,543
Inventories 2,501,717 876,970 (813,132)
Prepaid expenses 67,715 23,944 317,670
Interest receivable (11,044) 0 0
Accounts payable - trade (1,453,765) (834,222) (166,367)
Accrued expenses and other liabilities (183,953) (401,514) (158,695)
---------------------------------------------
NET CASH PROVIDED BY OPERATING ACTIVITIES 1,383,582 1,570,271 532,143
INVESTING ACTIVITIES:
Purchase of property and equipment (301,572) (296,418) (801,577)
Proceeds from disposal of property and equipment 6,388,205 0 4,000
--------------------------------------------
NET CASH PROVIDED BY (USED IN) INVESTING 6,086,633 (296,418) (797,577)
ACTIVITIES
FINANCING ACTIVITIES:
Proceeds from notes payable and long-term debt 0 2,160,846 18,610,233
Payments on notes payable and long-term debt (6,473,651) (3,386,604) (18,347,730)
Distributions to Limited and General Partners 0 0 (131,996)
--------------------------------------------
NET CASH PROVIDED BY (USED IN) (6,473,651) (1,225,758) 130,507
FINANCING ACTIVITIES
--------------------------------------------
INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS 996,564 48,095 (134,927)
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 329,311 281,216 416,143
---------------------------------------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 1,325,875 $ 329,311 $ 281,216
=============================================
See notes to consolidated financial statements.
F-4
WHITEFORD PARTNERS, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2001
- --------------------------------------------------------------------------------
NOTE A - ORGANIZATION, BUSINESS AND ACQUISITIONS
Whiteford Partners, L.P., (the Partnership), formerly Granada Foods, L.P.,
was formed on June 30, 1987, as a Delaware limited partnership. Prior to May 4,
1992, the Partnership consisted of a General Partner, Granada Management
Corporation, (Granada), and the Limited Partners. On May 4, 1992, Granada
assigned its sole general partner interest in the Partnership to Gannon Group,
Inc. and the Partnership was renamed Whiteford Partners, L.P.
The operational objectives of the Partnership are to own and operate
businesses engaged in the development, production, processing, marketing,
distribution and sale of food and related products (Food Businesses) for the
purpose of providing quarterly cash distributions to the partners while
providing capital appreciation through the potential appreciation of the
Partnership's Food Businesses. The Partnership expects to operate for twenty
years from inception, or for such shorter period as the General Partner may
determine is in the best interest of the Partnership, or for such shorter period
as determined by the majority of the Limited Partners.
The Partnership Agreement provides that a maximum of 7,500,000 Class A, $10
partnership units can be issued to Limited Partners. Generally, Class A units
have a preference as to cumulative quarterly cash distributions of $.25 per
unit. The sharing of income and loss from the Partnership operations is 99% to
the Class A and 1% to the General Partner. Amounts and frequency of
distributions are determinable by the General Partner.
On March 26, 1990, the Partnership, through Whiteford Foods Venture,
(Whiteford's) L.P. (formerly Granada/Whiteford Foods Venture, L.P.), a joint
venture with an affiliate of the then General Partner, acquired the business
assets of Whiteford's Inc., a meat processing and distribution company. The
Partnership and Whiteford's have operated in the food business segment only. The
cash purchase price of the assets was $8,275,000 with liabilities of $3,776,806
assumed. The excess of the purchase price over the estimated fair value of the
net tangible assets acquired of approximately $3,825,000 was recorded as
goodwill. The acquisition was accounted for using the purchase method of
accounting and, accordingly, the financial statements include the operations of
Whiteford's from the date of acquisition.
At December 31, 2001, and at December 31, 2000, the Partnership had
1,306,890 Class A limited partnership units issued and outstanding.
On November 11, 2001, the Partnership sold (the "Sale Transaction")
substantially all its assets to an affiliate of Rochester Meat Company
("Rochester Meat"), an unaffiliated company, pursuant to an Asset Purchase
Agreement (the "Agreement"). The purchase price was $7,950,000, including the
assumption or payment of certain liabilities. The purchase price was paid
$1,500,000 in cash and the issuance of a subordinated note (the Subordinated
Note) due June 30, 2007 in the principal amount of $1,350,000 (As Adjusted),
with the balance of the purchase price paid by the assumption of certain
liabilities net of other assets. The Subordinated Note bears interest at 9.5%
and is prepayable under certain conditions. Additionally, the principal balance
of the Subordinated Note may be adjusted downward under certain circumstances.
In connection with the transaction with Rochester Meat, the Partnership was
obligated to pay up to $500,000 to Greenaway Consultants, Inc. pursuant to a
consulting agreement. Greenaway Consultants, Inc. acquired the right to such
payment in connection with its provision of management services and financing to
the Partnership. The Partnership and Greenaway Consultants, Inc. agreed to: (i)
defer $50,000 of such payment until January 2002, (ii) subordinate $300,000 of
such payment to the distribution by the Partnership of $2.00 per limited partner
unit (an aggregate of $2,613,780) and (iii) forgive $150,000 of such payment.
Greenaway Consultants, Inc. is wholly owned by Albert Greenaway. Neither Mr.
Greenaway nor Greenaway Consultants, Inc. owns any interest in the general
partner of the Partnership. This payment to Greenaway Consultants has not been
accrued as a result of its subordination to the partnership.
Upon completion of the transaction, the Partnership's assets included the net
cash proceeds and the Subordinated Note, subject to the then remaining
obligations to Greenaway Consultants, Inc., and the General Partner, other
closing costs and potential liabilities, if any, associated with pending
litigation with Ameriserve, Inc., a former customer and a major national
distributor of food and related products, which filed for protection under
bankruptcy proceedings in January, 2000. As a debtor in bankruptcy, Ameriserve
has claimed that all payments made to creditors during the ninety days prior to
the bankruptcy are preference items which Ameriserve may recover from its
creditors. As a result, Ameriserve instituted a lawsuit against the Partnership
and other suppliers to recover its estimate of the preference amounts. The
amount sought by Ameriserve in the lawsuit approximated $800,000. The
Partnership filed a response to their motion and entered into a settlement
agreement with Ameriserve in January 2002. Such settlement agreement provided
for a payment by the Partnership of $40,000, which was paid in January 2002 to
settle such claim.
The Partnership is considering the contribution of the net assets of the
Partnership to a liquidation trust, which will then collect the Subordinated
Note and pay excess amounts to the partners and Greenaway Consultants, Inc., and
the General Partner as available.
F-5
NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Principles of consolidation. The consolidated financial statements include
the Partnership and Whiteford's, from the date of acquisition (March 26, 1990).
Significant intercompany account balances and transactions have been eliminated
in consolidation.
Inventories. Inventories of meat, meat products and packaging supplies are
stated at the lower of first-in, first-out (FIFO) cost or market. The major
components of inventories are as follows at December 31:
2001 2000
------ -----------
Finished products 0 $ 1,002,319
Raw materials 0 490,015
Packaging supplies and other 0 1,009,383
---- -----------
$0 $ 2,501,717
==== ===========
Property and Equipment. Property and equipment is stated at cost.
Depreciation, computed using the straight-line method on the basis of the
estimated useful lives of the depreciable assets, was $896,438, $1,174,947, and
$1,136,166 in years 2001, 2000 and 1999, respectively. The costs of ordinary
repairs and maintenance are charged to expense, while betterment and major
replacements were capitalized.
The carrying value of property and equipment and other long-lived assets is
reviewed if the facts and circumstances suggest it may be impaired. If this
review indicates the carrying value of the assets may not be recoverable, based
on estimates of their undiscounted cash flows, the carrying value will be
reduced to the asset's fair market value.
Other Assets. Goodwill associated with the acquisition of Whiteford's Inc.
was amortized on a straight-line basis over a thirty-year period. Until
September, 2001, at which time Goodwill was written off. Accumulated
amortization at December 31, 2000 was $1,336,070.
The loss on the sale of assets was taken in the third quarter to reflect
the expected transaction to occur with Rochester Meat Company, in the amount of
1,972,651.
Goodwill was removed in the third quarter in the amount of 2,354,550 to
reflect the proposed sales transaction to Rochester Meat Company.
Revenue Recognition. Revenue is generally recognized when title passes
which is generally at the time of shipment.
Distributions. The Partnership records distributions of income and/or
return of capital to the General Partner and Limited Partners when paid. Special
transfers of equity, as determined by the General Partner, from the General
Partner to the Limited Partners are recorded in the period of determination.
Distributions of $0, $0 and $130,689 to Limited Partners were recorded in 2001,
2000, and 1999, respectively.
Income Taxes. The Partnership files an information tax return. The items of
income and expense are allocated to the partners pursuant to the terms of the
Partnership Agreement. Income taxes applicable to the Partnership's results of
operations are the responsibility of the individual partners and have not been
provided for in the accounts of the Partnership.
Cash, Cash Equivalents and Cash Flows. Cash and cash equivalent amounts
approximate fair value. For the purpose of the statement of cash flows, the
Partnership considers all highly liquid debt instruments purchased with a
maturity of three months or less to be cash equivalents. Total interest paid was
439,564, $703,976 and $647,953 for 2001, 2000 and 1999, respectively.
Net (Loss) Income Per Unit of Limited Partners Capital. The net (loss)
income per unit of limited partners capital is calculated by dividing the net
(loss) income allocated to limited partners by the weighted average units
outstanding.
Concentrations. Financial instruments which potentially expose the
Partnership of credit risk, as defined by Statement of Financial Accounting
Standards No. 105, Disclosure of Information about Financial Instruments with
Off-Balance Sheet Risk and Financial with Concentrations of Credit Risk, consist
primarily of a subordinated note receivable from the buyer of the Partnership's
assets. The Partnership's subordinated note receivable is concentrated in the
food processing business.
To date, the Partnership has relied on a limited number of customers for a
substantial portion of its total sales. The buyer of the partnership's assets is
expected to derive a significant portion of its future revenues will continue to
be generated by a limited number of customers. The failure to obtain new
customers or the reduction in sales from existing customers could materially
adversely affect the buyer's operating results (see Note G) and consequently
their ability to make payments under the subordinated note agreement.
Use of Estimates. The preparation of the financial statements in accordance
with accounting principles generally accepted in the United States requires
management to make estimates and assumptions that affect the amounts reported in
the financial statements and accompanying notes. Actual results could differ
from those results.
Fair Value. Because of the timing of the issuance near year end of the note
receivable, it approximates its fair value.
F-6
NOTE C - RELATED PARTY TRANSACTIONS
The Limited Partnership Agreement provides for the General Partner to
receive an annual administrative fee. The fee is equal to 2% (adjusted for
changes in the consumer price index after 1989) of net business investment
(defined as $8.50 multiplied by Partnership units outstanding). However, such
amounts payable to the General Partner are limited to 10% of aggregate
distributions to all Partners from "Cash Available for Distributions". As
defined in the Limited Partnership Agreement, that portion of the management fee
in excess of such 10% limitation is suspended, and future payment is contingent.
The Administrative Management Fees paid to the General Partner and recorded
by the Partnership were $0 in 2001, $0 in 2000 and $13,069 in 1999. Suspended
fees as of December 31, 2001, for which no accrual had been recorded, total
$2,717,000 ($2,417,000 as of December 31, 2001). This only becomes an obligation
of the Partnership upon a change of control or sale of substantially all of the
assets of the Partnership. The Partnership also has a service agreement with
Greenaway Consultant, Inc. (GCI), which provides for the former principal owner
of Whiteford's to provide consulting services to the Partnership. The agreement
has been extended for five years expiring December 31, 2002, and provides
minimum consulting fees of approximately $250,000 per annum. During 2000, 1999
and 1998 the minimum was paid. GCI was due a payment of $500,000 upon a sale of
substantially all of the assets of the Partnership. However, GCI and the
partnership modified such agreement at the time of the Sale Transaction to
provide for a payment of $50,000 in January 2002 and the payment of up to
$300,000, subordinated to total distributions of $2 per unit to limited partner
investors. The remaining balance due under such agreement ($150,000) was
forgiven. This payment to Greenaway Consultants has not been accrued as a result
of its subordination to the partnership. The general partner has agreed to
subordinate the receipt of amounts due to it to a distribution of $2.00 per unit
of limited partnership interest and the payment of deferred amounts due to
Greenaway Consultants Inc.
NOTE D - LONG TERM DEBT
The following schedule summarizes long-term debt at December 31:
2001 2000
-------- ---------
Notespayable to bank with monthly payments of $11,000. Interest at
Prime plus 1%, interest at 10.50% on December 31,2000
Maturity date is March 31, 2002 (1) 0 3,133,807
Notes payable to bank with monthly payments of $27,362. Interest at
Euro-Rate plus 3%, interest at 9.78% March 31,2002 (1) 0
465,156
Note Payable to bank with monthly payments of $12,000. Interest at
Prime plus 2%, interest 11.50 March 31, 2002 (1) 0 976,000
Revolving credit agreement with a bank, due January 31, 2001, interest at
Prime plus 2%, interest at 11.50% May 31, 2001 (1) 0 1,806,071
Other 0 92,617
-------- ----------
0 $6,473,651
Less portion classified as current 0 2,422,940
-------- ----------
0 $4,050,711
-------- ==========
(1) See Footnote G.
The carrying value of the long-term debt approximates fair value. This is
based on terms and maturities currently available to the Partnership for similar
debt instruments. The notes payable and the revolving credit agreement with the
bank contain restrictive covenants. The covenants restricted the Partnership
from declaring or paying any distributions to its partners without the prior
written consent of the bank; limited the level of capital expenditures the
Partnership may make in any fiscal year; and, required the Partnership to
maintain certain financial ratios. In addition, the Partnership was required to
maintain a monthly average of $100,000 on deposit with the bank as a
compensating balance. Such debt balances were paid by the Partnership from the
proceeds received from the Sales Transaction at the time of the Sale
Transaction, and no restriction on distributions or compensating balances apply
to the Partnership at December 31, 2001.
Prior to the Sale Transaction, the revolving credit agreement permitted
borrowings based on a percentage of eligible accounts receivable and
inventories. Prior to the Sale Transaction, long-term debt and borrowing under
the revolving credit agreement were collateralized by substantially all of the
Partnership's property and equipment, inventory and accounts receivable.
Subsequent to the Sale Transaction, there are no maturities on the
long-term debt for the Partnership.
During 2001, 2000, and 1999, the weighted average interest rate on
short-term borrowing was 8.8%, 10.5%, and 8.9% respectively, while the
weighted-average month-end amount outstanding was $2,251,250, $3,238,705, and
$3,993,868 respectively. The largest outstanding month-end balance was
$2,499,000 during 2001, $3,919,582 during 2000, and $4,182,868 during 1999.
Interest paid in 2001, 2000, and 1999 was $439,564, $705,477, and $652,108,
respectively.
F-7
NOTE E - LEASES
Lease Commitments. Prior to the Sale Transaction, the Partnership's leased
buildings and equipment, are under various noncancelable operating lease
agreements. Lease rental expense for 2001, 2000, and 1999 was $479,908,
$598,567, and $663,423, respectively. There are no future minimum lease
payments.
NOTE F - EMPLOYEE BENEFIT PLAN
The Partnership had a 401(k) Plan which covers substantially all employees
who have completed one year of service. The Partnership matches a percentage up
to 25% of the participant's contributions up to 6% of employee eligible
compensation. Contributions to the Plan were $14,130 in 2001, $34,996 in 2000,
and $32,887 in 1999.
NOTE G - MAJOR CUSTOMERS
Prior to the Sale Transaction, Whiteford's facility, located in Versailles,
Ohio, operated as a further processor and distributor of beef products to fast
food restaurants and regional chains and food distribution in the Midwest of the
United States. Whiteford's principal products were fresh frozen hamburger
patties; precooked and uncooked ground beef taco meat and roast beef, marinated
beef entrees; and other items processed to the customers' specifications.
Sales of meat products to major customers are summarized as follows for the
fiscal years ended December 31, 2001, 2000, and 1999.
CUSTOMER 2001 2000 1999
-------- ---- ---- ----
A $12,066,165 $15,424,050 $13,762,901
B 3,608,757 9,177,693 13,044,177
C 2,878,506 5,223,073 5,749,151
D 1,915,872 2,951,304 4,630,998
E 1,216,533 1,579,652 4,486,046
F 1,180,525 1,562,433 2,364,608
----------- ----------- -----------
$22,866,358 $35,918,205 $44,037,881
=========== =========== ===========
The total amounts receivable from these customers on December 31, 2001, 2000,
and 1999 and were $0, $786,388 and $1,657,929, respectively.
NOTE H - SUBSEQUENT EVENT
Ameriserve, Inc., a former customer and a major national distributor of
food and related products, filed for protection under bankruptcy proceedings in
January, 2000. As a debtor in bankruptcy, Ameriserve has claimed that all
payments made to creditors during the ninety days prior to the bankruptcy are
preference items which Ameriserve may recover form its creditors. As a result,
Ameriserve instituted a lawsuit against the Partnership and other suppliers to
recover its estimate of the preference amounts.
The amount sought by Ameriserve in the lawsuit approximated $800,000. The
Partnership filed a response to their action. In January 2002, the Partnership
entered into a settlement agreement with Ameriserve which required a payment of
$40,000 by the Partnership. This amount was accrued for at December 31, 2001, in
the accrued expenses and other liabilities line in the Consolidated Balance
Sheet. A payment of $40,000 was made in January 2002 pursuant to the Settlement
Agreement. The Partnership recorded a reserve of $40,000 in connection with the
Ameriserve action. The Partnership, prior to the Settlement Agreement, had
agreed to escrow proceeds from the sale of its assets to defend or satisfy the
Ameriserve potential claims until such claims were settled or otherwise
compromised.
In December 2001, following the Sale Transaction, Ameriserve notified the
Partnership that Ameriserve discovered what it believes are overpayments to the
Partnership for prior purchases in the approximate amount of $189,000.
Ameriserve subsequently notified the Partnership that if payment of the alleged
overpayment is not received, Ameriserve will file a lawsuit to collect the
amount allegedly owing. The Partnership is investigating the alleged
overpayments and the potential liability, if any, for such alleged overpayments.
However, at this time since no litigation has been commenced, it is not possible
to evaluate the likelihood of an unfavorable outcome or to estimate the amount
or range of potential loss, if any, related to the overpayment allegation.
F-8
NOTE I - QUARTERLY DATA (UNAUDITED)
2000 Quarters
-------------
1st 2nd 3rd 4th Total
--- --- --- --- -----
Sales $ 10,591,459 $ 13,683,697 $ 9,204,279 $ 6,679,014 $ 40,158,449
Gross profit 605,696 946,182 911,833 670,627 3,134,338
Net (loss) income (294,420) 46,209 30,712 (186,317) (403,816)
(Loss) income per
unit of Limited
Partners' Capital $(0.23) $ 0.04 $ 0.02 $ (0.14) $ (0.31)
Weighted average units
outstanding 1,306,890 1,306,890 1,306,890 1,306,890 1,306,890
2001 Quarters
-------------
Sales 6,876,279 8,771,881 12,340,036 3,948,506 31,936,702
Gross profit 342,007 712,525 657,927 650,013 1,062,446
Net (loss) income (479,297) (133,145) (5,334,275 (10,405) (5,957,122)
(Loss) income per
unit of Limited
Partners' Capital $(0.37) $(0.11) $(4.03) ---- $(4.51)
Weighted average units
outstanding 1,306,890 1,306,890 1,306,890 1,306,890 1,306,890
F-9
Report of Independent Auditors
Limited and General Partners
Whiteford Partners, L.P.
We have audited the accompanying consolidated balance sheets of Whiteford
Partners, L.P. (a Delaware limited partnership) and subsidiary as of December
31, 2001 and 2000 and the related consolidated statements of operations, changes
in partners' capital, and cash flows for each of the three years in the period
ended December 31, 2001. These financial statements are the responsibility of
the Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatements. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the consolidated financial position of
Whiteford Partners, L.P. and subsidiary at December 31, 2001 and 2000 and the
consolidated results of their operations and their cash flows for each of the
three years in the period ended December 31, 2001, in conformity with accounting
principles generally accepted in the United States.
/s/ ERNST & YOUNG LLP
Dayton, Ohio
March 28, 2002
F-10
INDEX TO ATTACHED EXHIBITS
Exhibit
- ------- ----------------------------------------------------------------------
3. & 4. Limited Partnership Agreement of the Partnership incorporated by
reference to Exhibit "A" to Prospectus (pages A 1 - A 40) included in
the Partnership's Registration Statement on Form S-1 (File No.
33-15962).
10.1 Consulting Agreement between the Partnership and Granada Acquisitions,
Inc. incorporated by reference to Exhibit 10.2 to the Partnership's
Registration Statement on Form S-1 (File No. 33-15962).
10.2 Asset Purchase Agreement between Granada/Whiteford Foods Venture,
L.P., Whiteford's Inc. and Albert D. Greenaway, incorporated by
reference to Exhibit 2 to the Partnership's Form 8-K filing dated May
10, 1990, as amended (File No. 33-15962).
10.3 Services Agreement between Granada/Whiteford Foods Venture, L.P.,
Granada Cincinnati Multifoods, Inc. and Greenaway Consultants, Inc. to
engage Greenaway Consultants, Inc. to perform management services for
the operations of Granada/Whiteford Foods Venture, L.P. and CMF, a
joint venture, incorporated by reference to Exhibit 10.3 to the
Partnership's Annual Report on Form 10K for the year ended December
31, 1990.
10.4 Agreement of Limited Partnership dated March 27, 1990, between the
Registrant as limited partner, and G/W Foods, Inc. as General Partner,
to acquire the assets, certain liabilities, and meat purveying
operations of Whiteford's Inc., incorporated by reference to Exhibit
10.4 to the Partnership's Annual Report on Form 10K for the year ended
December 31, 1990.
10.5 Joint Venture Agreement dated July 1, 1990, between Granada/Whiteford
Foods Venture, L.P., North American Agrisystems, Inc. and Cincinnati
Multifoods, Inc. for the formation of a joint venture for
Granada/Whiteford Foods Venture, L.P. to operate meat production
facilities of North American Agrisystems, Inc., incorporated by
reference to Exhibit 10.5 to the Partnership's Annual Report on Form
10K for the year ended December 31, 1990.
10.6 Promissory Note payable by Granada/Whiteford Foods Venture to Fifth
Third Bank of Miami Valley, N.A. in the face amount of $3,000,000,
dated July 19, 1991, together with Hypothecation Agreement,
incorporated by reference to Exhibit 10.6 to the Partnership's Annual
Report on Form 10K for the year ended December 31, 1990.
10.7 Promissory Note payable by Granada/Whiteford Foods Venture to Fifth
Third Bank of Miami Valley, N.A. in the face amount of $280,000 dated
June 21, 1991, together with Hypothecation Agreement, incorporated by
reference to Exhibit 10.7 to the Partnership's Annual Report on form
10K for the year ended December 31, 1990.
10.8 Agreement dated November 6, 1991, between G/W Foods, Inc. and Fifth
Third Bank of Miami Valley, N.A. amending terms of Promissory Note
dated July 19, 1991, incorporated by reference to Exhibit 10.8 to the
Partnership's Annual Report on Form 10K for the year ended December
31, 1990.
10.9 Memorandum of Agreement -- Dissolution of CMF (a Texas joint venture)
effective October 1, 1991, stipulating terms and conditions of
dissolution and wind-up of operations of CMF, incorporated by
reference to Exhibit 10.9 to the Partnership's Annual Report on Form
10K for the year ended December 31, 1990.
10.10 Amendment to Certificate of Limited Partnership of Granada/Whiteford
Foods Venture, L.P., State of Ohio Certificate of Amendment of Foreign
Limited Partnership and Trade Name Registration, all dated April 30,
1992, and amending Name of Granada/Whiteford Foods Venture, L.P. to
Whiteford Foods Venture, L.P., incorporated by reference to Exhibit
10.10 to the Partnership's Annual Report on Form 10K for the year
ended December 31, 1990.
F-11
INDEX TO ATTACHED EXHIBITS (CONT.)
10.11 Loan Agreement dated May 5, 1992, between Greenaway Consultant, Inc.
and Whiteford FoodsVenture, L.P., providing for $750,000 revolving
credit facility, incorporated by reference to Exhibit 10.11 to the
Partnership's Annual Report on Form 10K for the year ended December
31, 1990.
10.12 Stock Purchase Agreement and Assignment of Partnership Interest dated
May 4, 1992, by and between Granada Management Corporation and Gannon
Group, Inc., incorporated by reference to Exhibit 10.12 to the
Partnership's Annual Report on Form 10K for the year ended December
31, 1990.
10.13 Loan Agreement dated December 23, 1992 between Whiteford Foods
Venture, L.P. and The Fifth Third Bank of Western Ohio, N.A. for a
credit facility of $2,300,000, incorporated by reference to Exhibit
10.13 to the Partnership's Annual Report on Form 10K for the year
ended December 31, 1992.
10.14 Letter of Agreement dated February 23, 1993 by and between Greenaway
Consultants, Inc. and Whiteford Foods Venture, L.P., proceeding for
(i) the termination of the revolving credit facility, (ii) the
issuance of a term promissory note in the amount of $750,000, (iii)
the termination of the Services Agreement between Whiteford Partners,
L.P. and Greenaway Consultants, Inc., and (iv) an agreement regarding
a new Services Agreement, incorporated by reference to Exhibit 10.14
to the Partnership's Annual Report on Form 10K for the year ended
December 31, 1993.
10.15 Loan Agreement dated August 27, 1993 between Whiteford Foods Venture,
L.P. and PNC Bank, Ohio, N.A., incorporated by reference to Exhibit
10.15 to the Partnership's Annual Report on Form 10K for the year
ended December 31, 1993.
10.16 Services Agreement dated October 1, 1993 between Whiteford Foods
Venture, L.P., Greenaway Consultant, Inc. and Albert D. Greenaway to
engage Greenaway Consultant, Inc., to perform management services for
the operation of Whiteford Foods Venture, L.P., incorporated by
reference to Exhibit 10.16 to the Partnership's Annual Report on Form
10K for the year ended December 31, 1993.
10.17 Loan Agreement dated October 1, 1993 between Whiteford Foods Venture,
L.P. and Greenaway Consultant, Inc. authorizing November 8, 1993
promissory note and certain security therefor, incorporated by
reference to Exhibit 10.17 to the Partnership's Annual Report on Form
10K for the year ended December 31, 1993.
10.18 Promissory note dated November 8, 1993 between Greenaway Consultant,
Inc. and Whiteford Foods Venture, L.P., incorporated by reference to
Exhibit 10.18 to the Partnership's Annual Report on Form 10K for the
year ended December 31, 1993.
10.19 Credit agreement dated June 13, 1994 between Whiteford Foods Venture,
L.P. and PNC Bank, Ohio, National Association and Fifth Third Bank of
Western Ohio, incorporated by reference to Exhibit 10.19 to the
Partnership's Annual Report on Form 10K for the year ended December
31, 1994.
10.20 Construction loan agreement dated June 13, 1994 between Whiteford
Foods Venture, L.P. and PNC Bank, Ohio, National Association,
incorporated by reference to Exhibit 10.20 to the Partnership's Annual
Report on Form 10K for the year ended December 31, 1994.
10.21 Lease agreement dated December 15, 1994 between Whiteford Foods
Venture, L.P. and Star Bank, National Association, incorporated by
reference to Exhibit 10.21 to the Partnership's Annual Report on Form
10K for the year ended December 31, 1994.
10.22 Term note B dated April 14, 1995, between Whiteford Foods Venture,
L.P. and PNC Bank, Ohio, National Association, incorporated by
reference to Exhibit 10.22 to the Partnership's Annual Report on Form
10K for the year ended December 31, 1995.
F-12
INDEX TO ATTACHED EXHIBITS (CONT.)
10.23 Note payable dated September 18, 1995, between Whiteford Foods
Venture, L.P. and PNC Bank, Ohio, National Association, incorporated
by reference to Exhibit 10.23 to the Partnership's Annual Report on
Form 10K for the year ended December 31, 1995.
10.24 Second amendment to Revolving Note dated July 11, 1995, incorporated
by reference to Exhibit 10.24 to the Partnership's Annual Report on
Form 10K for the year ended December 31, 1995.
10.25 Second amendment to Credit agreement dated July 11, 1995, incorporated
by reference to Exhibit 10.25 to the Partnership's Annual Report on
Form 10K for the year ended December 31, 1995.
10.26 Third amendment to Credit agreement dated July 11, 1995, incorporated
by reference to Exhibit 10.26 to the Partnership's Annual Report on
Form 10K for the year ended December 31, 1995.
10.27 Guarantee Compensation agreement dated September 18, 1995 between
Whiteford Foods Venture, L.P. and Albert D. Greenaway, incorporated by
reference to Exhibit 10.27 to the Partnership's Annual Report on Form
10K for the year ended December 31, 1995.
10.28 Mortgage granted to Albert D. Greenaway by Whiteford Foods Venture,
L.P., incorporated by reference to Exhibit 10.28 to the Partnership's
Annual Report on Form 10K for the year ended December 31, 1995
10.29 Mortgage granted to Albert D. Greenaway by Whiteford Foods Venture,
L.P., incorporated by reference to Exhibit 10.29 to the Partnership's
Annual Report on Form 10K for the year ended December 31, 1995.
10.30 Security agreement dated September 18, 1995 between Whiteford Foods
Venture, L.P. and Albert D. Greenaway, incorporated by reference to
Exhibit 10.30 to the Partnership's Annual Report on Form 10K for the
year ended December 31, 1995.
10.31 Fifth Amendment to Credit Agreement dated May 9, 1996, incorporated by
reference to Exhibit 10.31 to the Partnership's Annual Report on Form
10K for the year ended December 31, 1996.
10.32 Lease agreement dated October 8, 1996 between Whiteford Foods Venture,
L.P. and Fifth Third Leasing, incorporated by reference to Exhibit
10.32 to the Partnership's Annual Report on Form 10K for the year
ended December 31, 1996.
10.33 Lease agreement dated November 1, 1996 between Whiteford Foods
Venture, L.P. and PNC Leasing Corporation, incorporated by reference
to Exhibit 10.33 to the Partnership's Annual Report on Form 10K for
the year ended December 31, 1996.
10.34 Second Amendment to Term Note dated March 31, 1997.
10.35 Sixth Amendment to Credit Agreement dated June 30, 1997.
10.36 Lease agreement dated December 22, 1997 between Whiteford Foods
Venture, L.P. and PNC Leasing.
10.37 Seventh Amendment to Credit Agreement dated March 26, 1998,
incorporated by reference to Exhibit 10.37 to the Partnership's Annual
Report on Form 10K for the year ended December 31, 1998.
10.38 Eighth Amendment to Credit Agreement dated July 1, 1998, incorporated
by reference to Exhibit 10.38 to the Partnership's Annual Report on
Form 10K for the year ended December 31, 1998.
10.39 Third Amendment to Revolving Note dated July 1, 1998, incorporated by
reference to Exhibit 10.39 to the Partnership's Annual Report on Form
10K for the year ended December 31, 1998.
F-13
INDEX TO ATTACHED EXHIBITS (CONT.)
10.40 Fourth Amendment to Revolving Note dated May 3, 1999, incorporated by
reference to Exhibit 10.40 to the Partnership's Annual Report on Form
10K for the year ended December 31, 1999.
10.41 Ninth Amendment to Credit Agreement dated May 3, 1999, incorporated by
reference to Exhibit 10.41 to the Partnership's Annual Report on Form
10K for the year ended December 31, 1999.
10.42 Tenth Amendment to Credit Agreement dated November 1, 1999,
incorporated by reference to Exhibit 10.42 to the Partnership's Annual
Report on Form 10K for the year ended December 31, 1999.
10.43 Third Amendment to Construction and Term Note dated March 1, 2000.
10.44 Fifth Amendment to Revolving Note dated March 24, 2000.
10.45 Eleventh Amendment to Credit Agreement dated January 1, 2000.
10.46 Twelfth Amendment to Credit Agreement dated March 24, 2000.
10.47 Amended and Restated Credit Agreement dated September 5, 2000.
10.48 Amended and Restated Revolving Credit Note dated September 5, 2000.
10.49 Amended and Restated Term Note A dated September 5, 2000.
10.50 Amended and Restated Term Loan B dated September 5, 2000.
10.51 Term Note C. dated September 5, 2000.
10.52 Amended and Restated Security Agreement dated September 5, 2000.
10.53 Promissory Note from Whiteford Food Products, Inc. to Whiteford Foods
Venture, L.P., dated November 16, 2001.
13. 1990 Annual Report to Limited Partners, incorporated by reference to
Exhibit 13 to the Partnership's Annual Report on Form 10K for the year
ended December 31, 1990.
F-14