Attached files
file | filename |
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EX-32.1 - EX-32.1 - DAKOTA GROWERS PASTA CO INC | a09-35395_1ex32d1.htm |
EX-31.2 - EX-31.2 - DAKOTA GROWERS PASTA CO INC | a09-35395_1ex31d2.htm |
EX-31.1 - EX-31.1 - DAKOTA GROWERS PASTA CO INC | a09-35395_1ex31d1.htm |
EX-32.2 - EX-32.2 - DAKOTA GROWERS PASTA CO INC | a09-35395_1ex32d2.htm |
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
x Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the quarterly period ended October 31, 2009
or
o Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Commission File No. 000-50111
DAKOTA GROWERS PASTA COMPANY, INC.
(Exact name of registrant as specified in its charter)
North Dakota |
|
45-0423511 |
(State of incorporation) |
|
(IRS Employer Identification No.) |
One Pasta Avenue, Carrington, ND 58421
(Address of principal executive offices including zip code)
(701) 652-2855
(Registrants telephone number, including area code)
NOT APPLICABLE
(Former name, former address and former fiscal year, if changed since last report)
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 o
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files.) Yes o No o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of large accelerated filer, accelerated filer and smaller reporting company in Rule 12b-2 of the Exchange Act.
Large accelerated filer o |
|
Accelerated filer o |
|
|
|
Non-Accelerated filer x |
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Smaller reporting company o |
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x
As of December 15, 2009, the Registrant had 10,764,932 shares of common stock, par value $0.01 per share, outstanding.
PART I FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
DAKOTA GROWERS PASTA COMPANY, INC.
CONSOLIDATED BALANCE SHEETS
(In Thousands, Except Share Information)
|
|
(Unaudited) |
|
|
|
||
|
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October 31, |
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July 31, |
|
||
|
|
2009 |
|
2009 |
|
||
ASSETS |
|
|
|
|
|
||
|
|
|
|
|
|
||
CURRENT ASSETS |
|
|
|
|
|
||
Cash and cash equivalents |
|
$ |
3,148 |
|
$ |
1,315 |
|
|
|
|
|
|
|
||
Trade accounts receivable, less allowance for cash discounts and doubtful accounts of $922 and $826, respectively |
|
21,815 |
|
20,466 |
|
||
|
|
|
|
|
|
||
Other receivables |
|
63 |
|
67 |
|
||
|
|
|
|
|
|
||
Inventories |
|
33,283 |
|
33,878 |
|
||
|
|
|
|
|
|
||
Prepaid expenses |
|
1,434 |
|
799 |
|
||
|
|
|
|
|
|
||
Deferred income taxes |
|
947 |
|
947 |
|
||
|
|
|
|
|
|
||
Total current assets |
|
60,690 |
|
57,472 |
|
||
|
|
|
|
|
|
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PROPERTY AND EQUIPMENT |
|
|
|
|
|
||
In service |
|
133,947 |
|
134,112 |
|
||
Construction in progress |
|
4,006 |
|
975 |
|
||
|
|
137,953 |
|
135,087 |
|
||
Less accumulated depreciation |
|
(73,283 |
) |
(71,960 |
) |
||
|
|
|
|
|
|
||
Net property and equipment |
|
64,670 |
|
63,127 |
|
||
|
|
|
|
|
|
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INVESTMENT IN COOPERATIVE BANK |
|
1,507 |
|
1,507 |
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||
|
|
|
|
|
|
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INTANGIBLE ASSETS, NET |
|
2,336 |
|
2,387 |
|
||
|
|
|
|
|
|
||
GOODWILL |
|
8,381 |
|
8,381 |
|
||
|
|
|
|
|
|
||
OTHER ASSETS |
|
424 |
|
421 |
|
||
|
|
|
|
|
|
||
|
|
$ |
138,008 |
|
$ |
133,295 |
|
(continued on next page)
2
DAKOTA GROWERS PASTA COMPANY, INC.
CONSOLIDATED BALANCE SHEETS
(In Thousands, Except Share Information)
|
|
(Unaudited) |
|
|
|
||
|
|
October 31, |
|
July 31, |
|
||
|
|
2009 |
|
2009 |
|
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LIABILITIES AND STOCKHOLDERS EQUITY |
|
|
|
|
|
||
|
|
|
|
|
|
||
CURRENT LIABILITIES |
|
|
|
|
|
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Accounts payable |
|
$ |
10,975 |
|
$ |
9,987 |
|
Accrued liabilities |
|
5,965 |
|
5,903 |
|
||
Current portion of long-term debt |
|
5,763 |
|
5,756 |
|
||
|
|
|
|
|
|
||
Total current liabilities |
|
22,703 |
|
21,646 |
|
||
|
|
|
|
|
|
||
COMMITMENTS AND CONTINGENCIES |
|
|
|
|
|
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LONG-TERM DEBT, net of current portion |
|
23,225 |
|
25,418 |
|
||
DEFERRED INCOME TAXES |
|
14,244 |
|
14,065 |
|
||
|
|
|
|
|
|
||
Total liabilities |
|
60,172 |
|
61,129 |
|
||
|
|
|
|
|
|
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STOCKHOLDERS EQUITY |
|
|
|
|
|
||
|
|
|
|
|
|
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Series D delivery preferred stock, non-cumulative, $.01 par value, 11,340,841 authorized, 11,275,297 shares issued and outstanding |
|
113 |
|
113 |
|
||
Series F convertible preferred stock, non-cumulative, $.01 par value, 2,100,000 shares authorized, 1,065,000 shares issued and outstanding |
|
11 |
|
11 |
|
||
Common stock, $.01 par value, 75,000,000 shares authorized, 10,203,063 shares issued and outstanding |
|
102 |
|
102 |
|
||
Additional paid-in capital |
|
43,144 |
|
43,120 |
|
||
Retained earnings |
|
34,466 |
|
28,820 |
|
||
|
|
|
|
|
|
||
Total stockholders equity |
|
77,836 |
|
72,166 |
|
||
|
|
|
|
|
|
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Total liabilities and stockholders equity |
|
$ |
138,008 |
|
$ |
133,295 |
|
See Notes to Consolidated Financial Statements
3
DAKOTA GROWERS PASTA COMPANY, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In Thousands, Except Per Share Amounts)(Unaudited)
|
|
Three Months Ended |
|
||||
|
|
October 31, |
|
||||
|
|
2009 |
|
2008 |
|
||
Net revenues (net of discounts and allowances of $7,568 and $7,117, respectively) |
|
$ |
63,764 |
|
$ |
87,145 |
|
|
|
|
|
|
|
||
Cost of goods sold |
|
48,978 |
|
78,519 |
|
||
|
|
|
|
|
|
||
Gross profit |
|
14,786 |
|
8,626 |
|
||
|
|
|
|
|
|
||
Marketing, general and administrative expenses |
|
5,456 |
|
5,133 |
|
||
|
|
|
|
|
|
||
Operating income |
|
9,330 |
|
3,493 |
|
||
|
|
|
|
|
|
||
Other income (expense) |
|
|
|
|
|
||
Interest and other income |
|
22 |
|
36 |
|
||
Loss on disposition of property, equipment and other assets |
|
(32 |
) |
|
|
||
Interest expense, net |
|
(214 |
) |
(855 |
) |
||
|
|
|
|
|
|
||
Income before income taxes |
|
9,106 |
|
2,674 |
|
||
|
|
|
|
|
|
||
Income tax expense |
|
3,460 |
|
982 |
|
||
|
|
|
|
|
|
||
Net income |
|
$ |
5,646 |
|
$ |
1,692 |
|
|
|
|
|
|
|
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Net income per common share |
|
|
|
|
|
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Basic |
|
$ |
0.55 |
|
$ |
0.17 |
|
|
|
|
|
|
|
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Diluted |
|
$ |
0.47 |
|
$ |
0.14 |
|
|
|
|
|
|
|
||
Weighted average common shares outstanding |
|
|
|
|
|
||
Basic |
|
10,203 |
|
10,192 |
|
||
|
|
|
|
|
|
||
Diluted |
|
11,958 |
|
11,958 |
|
See Notes to Consolidated Financial Statements
4
DAKOTA GROWERS PASTA COMPANY, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands)(Unaudited)
|
|
Three Months Ended |
|
||||
|
|
October 31, |
|
||||
|
|
2009 |
|
2008 |
|
||
OPERATING ACTIVITIES |
|
|
|
|
|
||
Net income |
|
$ |
5,646 |
|
$ |
1,692 |
|
Adjustments to reconcile net income to net cash from operating activities: |
|
|
|
|
|
||
Depreciation and amortization |
|
1,641 |
|
1,638 |
|
||
Loss on disposition of property, equipment and other assets |
|
32 |
|
|
|
||
Deferred income taxes |
|
179 |
|
390 |
|
||
Stock-based employee compensation |
|
24 |
|
34 |
|
||
Changes in assets and liabilities |
|
|
|
|
|
||
Trade receivables |
|
(1,349 |
) |
(2,353 |
) |
||
Other receivables |
|
4 |
|
(860 |
) |
||
Inventories |
|
595 |
|
12,065 |
|
||
Prepaid expenses |
|
(635 |
) |
105 |
|
||
Other assets |
|
3 |
|
3 |
|
||
Accounts payable |
|
988 |
|
(6,847 |
) |
||
Other accrued liabilities |
|
62 |
|
(435 |
) |
||
NET CASH FROM OPERATING ACTIVITIES |
|
7,190 |
|
5,432 |
|
||
|
|
|
|
|
|
||
INVESTING ACTIVITIES |
|
|
|
|
|
||
Purchases of property and equipment |
|
(3,107 |
) |
(552 |
) |
||
Proceeds from sale of property, equipment and other assets |
|
2 |
|
|
|
||
Payments for package design costs |
|
(66 |
) |
(48 |
) |
||
NET CASH USED FOR INVESTING ACTIVITIES |
|
(3,171 |
) |
(600 |
) |
||
|
|
|
|
|
|
||
FINANCING ACTIVITIES |
|
|
|
|
|
||
Net change in excess outstanding checks over cash on deposit |
|
|
|
4,304 |
|
||
Net change in short-term notes payable |
|
|
|
(3,300 |
) |
||
Payments on long-term debt |
|
(2,186 |
) |
(5,956 |
) |
||
NET CASH USED FOR FINANCING ACTIVITIES |
|
(2,186 |
) |
(4,952 |
) |
||
|
|
|
|
|
|
||
NET CHANGE IN CASH AND CASH EQUIVALENTS |
|
1,833 |
|
(120 |
) |
||
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD |
|
1,315 |
|
125 |
|
||
|
|
|
|
|
|
||
CASH AND CASH EQUIVALENTS, END OF PERIOD |
|
$ |
3,148 |
|
$ |
5 |
|
|
|
|
|
|
|
||
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION |
|
|
|
|
|
||
Cash payments for |
|
|
|
|
|
||
Interest (net of amounts capitalized) |
|
$ |
278 |
|
$ |
1,009 |
|
|
|
|
|
|
|
||
Income taxes |
|
$ |
4,052 |
|
$ |
2,654 |
|
See Notes to Consolidated Financial Statements
5
DAKOTA GROWERS PASTA COMPANY, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
The following notes should be read in conjunction with the notes to the financial statements for the year ended July 31, 2009 as filed in the Companys Form 10-K.
NOTE 1 - ORGANIZATION
Dakota Growers Pasta Company, Inc. (Dakota Growers or the Company) is a North Dakota corporation that operates a milling and pasta manufacturing facility in Carrington, North Dakota. The Companys wholly-owned subsidiary, Primo Piatto, Inc. (Primo Piatto), a Minnesota corporation, operates a pasta manufacturing facility in New Hope, Minnesota. DNA Dreamfields Company, LLC (DNA Dreamfields) became a wholly-owned subsidiary on September 21, 2007.
NOTE 2 FINANCIAL STATEMENT PRESENTATION
The unaudited consolidated financial statements included herein have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission for quarterly reporting. Accordingly, they do not include all the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three months ended October 31, 2009 are not necessarily indicative of the results that may be expected for the year ended July 31, 2010. The unaudited consolidated financial statements included in this Form 10-Q should be read in conjunction with the consolidated financial statements and footnotes included in the Companys Form 10-K for the year ended July 31, 2009. The information contained in the balance sheet as of July 31, 2009 was derived from the Companys audited annual report for fiscal year 2009. Reclassifications have been made to facilitate comparability with current presentation. Such reclassifications have no effect on the net results of operations.
The financial information presented herein includes the consolidated balance sheets and results of operations of the Company, its wholly-owned subsidiary Primo Piatto, Inc., and DNA Dreamfields Company, LLC (DNA Dreamfields). All material inter-company accounts and transactions have been eliminated in the preparation of the consolidated financial statements.
Our consolidated financial statements for the quarter ended October 31, 2009 were evaluated for subsequent events through December 15, 2009, the date the consolidated financial statements were issued.
NOTE 3 NEW ACCOUNTING PRONOUNCEMENTS
In December 2007, the FASB issued an amendment to ASC (Accounting Standards Codification) 805 Business Combinations to improve the relevance, representational faithfulness, and comparability of the information that a reporting entity provides in its financial reports about a business combination and its effects. In April 2009, the FASB further amended ASC 805 Business Combinations to address the initial recognition and measurement of an asset acquired or a liability assumed in a business combination that arises from a contingency and for which the fair value of the asset or liability on the date of acquisition can be determined. These amendments are effective prospectively to business combinations on or after the beginning of the first annual reporting period beginning on or after December 15, 2008 (our fiscal year 2010). The adoption of these amendments did not have a material impact on our consolidated financial statements.
In December 2007, the FASB issued authoritative guidance included in ASC 810, Consolidation. The objective of this guidance is to improve the relevance, comparability, and transparency of the financial information that a reporting entity provides in its consolidated financial statements. This guidance establishes accounting and reporting standards for the noncontrolling interest in a subsidiary and for the deconsolidation of a subsidiary. This guidance also changes the way the consolidated income statement is presented, establishes a single method of accounting for changes in a parents ownership interest in a subsidiary that do not result in deconsolidation,
6
DAKOTA GROWERS PASTA COMPANY, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
requires that a parent recognize a gain or loss in net income when a subsidiary is deconsolidated and expanded disclosures in the consolidated financial statements that clearly identify and distinguish between the interests of the parents owners and the interest of the noncontrolling owners of a subsidiary. This guidance became effective for financial statements issued for fiscal years beginning on or after December 15, 2008. The adoption of this guidance did not have a material impact on the Companys financial statements.
In April 2008, the FASB issued an amendment providing additional guidance regarding the factors that should be considered in developing renewal or extension assumptions used to determine the useful life of a recognized intangible asset as defined in FASB ASC 275 Risks and Uncertainties and FASB ASC 350 IntangiblesGoodwill & Other. The intent of this amendment is to improve the consistency between the useful life of a recognized intangible asset and the period of expected cash flows used to measure the fair value of the asset. This amendment is effective for our interim and annual financial statements beginning in our fiscal year 2010. The adoption of these amendments did not have a material impact on our consolidated financial statements.
In June 2009, the FASB issued a new standard, included in ASC 810, Consolidation, regarding the consolidation of variable interest entities. The standard includes guidance for determining whether an entity is a variable interest entity and replaces the quantitative-based risks and rewards approach with a qualitative approach that focuses on identifying which enterprise has the power to direct the activities of a variable interest entity that most significantly impact the entitys economic performance. It also requires an ongoing reassessment of whether an entity is the primary beneficiary, and it requires additional disclosures about an enterprises involvement in variable interest entities. This guidance becomes effective as of the beginning of the first fiscal year that begins after November 15, 2009, our first quarter of fiscal year 2011. We are currently evaluating the impact, if any, that the adoption will have on our consolidated financial statements.
In June 2009, the FASB issued an accounting pronouncement regarding the FASB Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting Principles. This pronouncement establishes the FASB Accounting Standards Codification (the Codification) as the single source of authoritative, nongovernmental U.S. GAAP. The Codification is effective for financial statements for interim or annual reporting periods ending after September 15, 2009. All U.S. GAAP accounting literature is now known as the Accounting Standard Codification (ASC) and updates to the Codification are now issued as Accounting Standards Updates (ASU). As the Codification was not intended to change or alter existing U.S. GAAP, it did not have any impact on our consolidated financial statements.
In June 2009, the FASB issued new authoritative guidance, which has yet to be codified in the ASC. This guidance eliminates the concept of a qualifying special-purpose entity, changes the requirements for derecognizing financial assets, and requires additional disclosures. This guidance is effective for financial asset transfers occurring after the beginning of an entitys first fiscal year that begins after November 15, 2009. This guidance becomes effective for the Company beginning in our first quarter of fiscal year 2011. The Company does not expect the adoption of this guidance will have a material impact on its financial statements.
In August 2009, the FASB issued ASU 2009-05 which provides additional guidance on measuring the fair value of liabilities under ASC 820. ASU 2009-05 clarifies that the quoted price for the identical liability, when traded as an asset in an active market, is also a Level 1 measurement for that liability when no adjustment to the quoted price is required. This pronouncement also requires that the fair value of a liability is measured using one or more of the following techniques when a quoted price in an active market for the identical liability is not available, (1) a valuation technique that uses the quoted price for the identical liability when traded as an asset, (2) quoted prices for similar liabilities or similar liabilities when traded as assets, or (3) another valuation technique consistent with the guidance in ASC 820, for example, an income approach such as a present value technique. The new guidance on measuring liabilities at fair value is effective for the first interim or annual reporting period beginning after August 28, 2009, the second quarter of our fiscal year 2010. The Company does not expect the adoption of ASU 2009-05 will have a material impact on the Companys consolidated financial statements.
7
DAKOTA GROWERS PASTA COMPANY, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE 4 FAIR VALUE MEASURES
The fair value of a financial instrument is generally defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Quoted market prices are generally not available for the Companys financial instruments. Accordingly, fair values are based on judgments regarding anticipated cash flows, future expected loss experience, current economic conditions, risk characteristics of various financial instruments and other factors. These estimates involve uncertainties and matters of judgment, and therefore cannot be determined with precision. Changes in assumptions could significantly affect the estimates.
FASB ASC 820 Financial Value Measures and Disclosures establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The standard describes three levels of inputs that may be used to measure fair value:
Level 1Quoted prices in active markets for identical assets or liabilities;
Level 2Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities; and
Level 3Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.
The carrying amount of cash and cash equivalents, receivables, payables, short-term debt and other current assets and liabilities approximates fair value because of the short maturity and/or frequent repricing of those instruments.
The Company believes it is not practical to estimate the fair value of the securities of non-subsidiary cooperatives without incurring excessive costs because there is no established market for these securities and it is inappropriate to estimate future cash flows, which are largely dependent on future patronage earnings of the non-subsidiary cooperatives.
Based upon current borrowing rates with similar maturities, the fair value of the long-term debt approximates the carrying value as of October 31, 2009 and July 31, 2009.
NOTE 5 INVENTORIES
Inventories are valued at lower of cost or market. Inventories as of October 31, 2009 include raw materials and packaging of $10,560,000 and finished goods of $22,723,000. Inventories at July 31, 2009 include raw materials and packaging of $10,672,000 and finished goods of $23,206,000.
NOTE 6 LOAN AGREEMENTS
The Company has a $45 million revolving credit facility with CoBank that extends through January 13, 2010 and is collateralized by all assets of the Company. Interest on the revolving line is at the 7-day LIBOR rate subject to performance adjustments depending upon the Companys ratio of total debt to earnings before interest, taxes, depreciation and amortization or EBITDA. The higher the ratio the higher the adjustment to the 7-day LIBOR rate within a range of 200 to 300 basis points above the 7-day LIBOR rate. Fixed interest rate options are also available. There were no balances outstanding under the revolving credit arrangement as of October 31, 2009 and July 31, 2009. The Company had $45 million available for borrowings under the line of credit as of October 31, 2009 and July 31, 2009.
The Companys various debt agreements with CoBank and certain institutional note holders obligate the Company to maintain or achieve certain amounts of equity and certain financial ratios and impose certain restrictions on the Company. The Company was in compliance with these financial covenants as of October 31, 2009.
NOTE 7 EARNINGS PER SHARE
Basic earnings per share (EPS) is calculated by dividing net earnings on common stock by the weighted average number of common shares outstanding during the period. Diluted EPS includes the effect of all potentially dilutive securities, such as stock options and convertible preferred stock.
Dilutive securities, consisting of stock options and convertible preferred stock, included in the calculation of diluted weighted average common shares totaled 1,755,000 and 1,766,000 for the three months ended October 31, 2009 and October 31, 2008, respectively. The Series F Convertible Preferred Stock is included in the fully diluted EPS calculation and not included in the basic EPS calculation. As there is currently no established public trading market for the Companys common stock, the Company has assumed the proceeds from the exercise of stock options would reduce debt and, thus, interest expense.
The components of basic earnings per share are as follows (in thousands, except per share amounts):
|
|
Three Months Ended |
|
||||
|
|
October 31, |
|
||||
Earnings per share - Basic |
|
2009 |
|
2008 |
|
||
|
|
|
|
|
|
||
Net earnings available to common stockholders |
|
$ |
5,646 |
|
$ |
1,692 |
|
|
|
|
|
|
|
||
Basic weighted-average shares outstanding |
|
10,203 |
|
10,192 |
|
||
|
|
|
|
|
|
||
Earnings per share - Basic |
|
$ |
0.55 |
|
$ |
0.17 |
|
8
DAKOTA GROWERS PASTA COMPANY, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
The components of diluted earnings per share are as follows (in thousands, except per share amounts):
|
|
Three Months Ended |
|
||||
|
|
October 31, |
|
||||
Earnings per share - Diluted |
|
2009 |
|
2008 |
|
||
|
|
|
|
|
|
||
Net earnings available to common stockholders |
|
$ |
5,646 |
|
$ |
1,692 |
|
Plus: Impact of interest expense on the exercise of options, net of taxes (1) |
|
12 |
|
23 |
|
||
Net earnings available to common stockholders |
|
$ |
5,658 |
|
$ |
1,715 |
|
|
|
|
|
|
|
||
Diluted weighted-average shares outstanding: |
|
|
|
|
|
||
Basic weighted-average shares outstanding |
|
10,203 |
|
10,192 |
|
||
Plus: Incremental shares from assumed conversions |
|
|
|
|
|
||
Options |
|
690 |
|
701 |
|
||
Convertible preferred shares |
|
1,065 |
|
1,065 |
|
||
Diluted weighted-average shares outstanding |
|
11,958 |
|
11,958 |
|
||
|
|
|
|
|
|
||
Earnings per share - Diluted |
|
$ |
0.47 |
|
$ |
0.14 |
|
(1) As there is currently no established public trading market for the Companys common stock, the Company has assumed the proceeds from the exercise of stock options would reduce debt and, thus, interest expense.
NOTE 8 STOCK OPTIONS
The Company accounts for share based payments in accordance with ASC Topic 718 Compensation Stock Compensation. Under ASC 718, the Company is required to recognize, as expense, the estimated fair value of all share based payments to employees. In accordance with this guidance, the Company has elected to recognize the compensation cost of all service based awards on a straight-line basis over the vesting period of the award. Performance based awards are recognized ratably for each vesting tranche. The Company recorded stock-based employee compensation expense of $24,000 and $34,000, for the three months ended October 31, 2009 and October 31, 2008, respectively.
9
DAKOTA GROWERS PASTA COMPANY, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
The following tables set forth information regarding stock options outstanding and exercisable:
|
|
Options to purchase Series C Convertible Preferred Stock |
|
|||||||
|
|
Number of |
|
|
|
Weighted |
|
|
|
|
|
|
Series C |
|
Option |
|
Average |
|
|
|
|
|
|
Convertible |
|
Price |
|
Exercise |
|
|
|
|
|
|
Preferred Shares |
|
per Share |
|
Price |
|
Exercisable |
|
|
|
|
|
|
|
|
|
|
|
|
|
Outstanding at July 31, 2009 |
|
1,977 |
|
$100-$150 |
|
$ |
117.35 |
|
1,977 |
|
Exercised |
|
|
|
|
|
|
|
|
|
|
Granted |
|
|
|
|
|
|
|
|
|
|
Forfeited/Expired |
|
|
|
|
|
|
|
|
|
|
Outstanding at October 31, 2009 |
|
1,977 |
|
$100-$150 |
|
$ |
117.35 |
|
1,977 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Options to purchase Common Stock |
|
|||||||
|
|
|
|
|
|
Weighted |
|
|
|
|
|
|
|
|
Option |
|
Average |
|
|
|
|
|
|
Number of |
|
Price |
|
Exercise |
|
|
|
|
|
|
Common Shares |
|
per Share |
|
Price |
|
Exercisable |
|
|
|
|
|
|
|
|
|
|
|
|
|
Outstanding at July 31, 2009 |
|
642,363 |
|
$4.00-$6.25 |
|
$ |
5.11 |
|
574,182 |
|
Exercised |
|
|
|
|
|
|
|
|
|
|
Granted |
|
|
|
|
|
|
|
|
|
|
Forfeited/Expired |
|
|
|
|
|
|
|
|
|
|
Outstanding at October 31, 2009 |
|
642,363 |
|
$4.00-$6.25 |
|
$ |
5.11 |
|
642,363 |
|
A summary of the status of the Companys issued but nonvested stock options as of October 31, 2009, and changes during the three months ended October 31, 2009, is presented below:
|
|
|
|
Weighted-Average |
|
|
|
|
Common |
|
Grant-Date |
|
|
Nonvested Stock Options |
|
Shares |
|
Fair Value |
|
|
|
|
|
|
|
|
|
Nonvested at July 31, 2009 |
|
68,181 |
|
$ |
5.00 |
|
Granted |
|
|
|
|
|
|
Vested |
|
(68,181 |
) |
$ |
5.00 |
|
Forfeited/Expired |
|
|
|
|
|
|
Nonvested at October 31, 2009 |
|
|
|
|
|
NOTE 9 COMMITMENTS
The Company forward contracts for a certain portion of its future durum wheat requirements. The Company had outstanding commitments for grain purchases totaling $13,646,000 as of October 31, 2009, related to forward purchase contracts. These contracts are set price contracts to deliver grain to the Companys mill, and are not derivative in nature as they have no net settlement provision and are not transferable.
10
DAKOTA GROWERS PASTA COMPANY, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
The Company is currently undertaking an estimated $10 million capital project at its Carrington facility. As of October 31, 2009, the Company had expended $3.7 million in conjunction with this project, and had entered into additional commitments for building construction and pasta equipment totaling $5.0 million as of October 31, 2009. These costs are expected to be paid within one year.
NOTE 10 RELATED PARTY TRANSACTIONS
Jeffrey Topp, a director of the Company, sold wheat to the Company through an affiliated entity in the first quarters of fiscal years 2010 and 2009. Those sales totaled $177,000 and $473,000 at market prices for the quarters ended October 31, 2009 and 2008, respectively. The Company had a commitment to purchase wheat totaling $9,000 and $187,500 from Mr. Topp and/or his affiliated entity as of October 31, 2009 and July 31, 2009, respectively.
NOTE 11 SUBSEQUENT EVENTS
During December 2009, certain executive officers and employees of the Company exercised options for the purchase of 561,869 shares of the Companys Common Stock and 47,448 shares of the Companys Series D Delivery Preferred Stock. The aggregate consideration received by the Company for the issuance of those shares was $2.9 million. The shares were issued in private placement transactions exempt from the registration requirements of the Securities Act, pursuant to Section 4(2) of the Securities Act.
On November 19, 2009, the Companys Board of Directors authorized the payment of non-periodic dividends of $0.01 per share on its Series D Delivery Preferred Stock, $0.62 per share on its Common Stock and $0.62 per share on its Series F Convertible Preferred Stock, payable on January 5, 2010 to stockholders of record as of December 4, 2009.
11
ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
This Managements Discussion and Analysis of Financial Condition and Results of Operations (MD&A) should be read in conjunction with the MD&A included in the Companys Form 10-K for the fiscal year ended July 31, 2009.
Forward-Looking Statements
The following discussion contains forward-looking statements. Such forward-looking statements include, among others, those statements including the words expect, anticipate, believe, may and similar expressions. Such statements are based on assumptions by the Companys management as of the date of this Quarterly Report, and are subject to risks and uncertainties, including those discussed in the Companys Form 10-K for the year ended July 31, 2009 under Risk Factors, that could cause actual results to differ materially from those anticipated. The Company cautions readers not to place undue reliance on such forward-looking statements. The Company will not update any forward-looking statements in this Quarterly Report to reflect future events or developments.
Summary
Dakota Growers is the third largest pasta manufacturer in North America. The Company has two production plants, located in Carrington, North Dakota and New Hope, Minnesota, and generates a majority of its revenues from manufacturing dry pasta for the retail store brand, foodservice and ingredient markets. The Companys cost of goods sold consists mainly of raw materials (primarily durum wheat), packaging, and manufacturing and distribution costs. The Company competes through low cost production, high product quality, flexibility and customer service.
Net income for the quarter ended October 31, 2009 totaled $5,646,000 compared to $1,692,000 for the quarter ended October 31, 2008. Net earnings per basic common share for the quarter ended October 31, 2009 were $0.55 per share compared to $0.17 per share for the quarter ended October 31, 2008.
Durum prices continued to decline in the first quarter of fiscal year 2010 when compared to fiscal year 2009. Decreases in raw material costs were partially offset by lower sales as the Companys net revenues decreased 26.8% for the quarter ended October 31, 2009 when compared to the same period of the prior year. The decrease resulted primarily from lower pasta per unit selling prices and, to a lesser extent, lower sales volumes.
Critical Accounting Policies
The accompanying discussion and analysis of our results of operations and financial condition are based upon our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. These estimates form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. We base our estimates and judgments on historical experience and on various other assumptions that we believe are reasonable under the circumstances. However, future events are subject to change and the best estimates and judgments may require adjustment. For a complete description of the Companys significant accounting policies, please see Note 1 to the consolidated financial statements included in the Companys Form 10-K for the year ended July 31, 2009. Our critical accounting policies are those that have meaningful impact on the reporting of our financial condition and results, and that require significant management judgment and estimates. These policies include our accounting for (a) allowance for doubtful accounts, (b) inventory valuation, (c) asset impairment, and (d) income taxes.
Allowance for Doubtful Accounts
We evaluate the collectability of our accounts receivable based on a combination of factors. In cases where we are aware of circumstances that may impair a specific customers ability to meet its financial obligations to us, we
12
record a specific allowance against amounts due to us, and thereby reduce the net recognized receivable to the amount we reasonably believe will be collected. For all other customers, we recognize allowances for doubtful accounts based on the length of time the receivables are past due and our historical experience. If the financial condition of our customers deteriorates, additional allowances may be required in the future that could have an adverse impact on our future operating results.
Inventory Valuation
Inventories are stated at the lower of cost or market, determined on a first-in, first-out (FIFO) basis, using product specific standard costs. The Company analyzes variances between actual manufacturing costs incurred and amounts absorbed at inventory standard costs. Inventory valuations are adjusted for these variances as applicable. The Company regularly evaluates its inventories and recognizes inventory allowances for discontinued and slow-moving inventories based upon these evaluations.
Asset Impairment
We are required to evaluate our long-lived assets, including goodwill and other intangible assets, for impairment and write down the value of any assets if they are determined to be impaired. Evaluating the impairment of long-lived assets involves management judgment in estimating the future cash flows and fair values related to these assets. Future events could cause management to conclude that impairment indicators exist and that the value of certain long-lived assets is impaired.
Income Taxes
In determining income (loss) for financial statement purposes, management must make certain estimates and judgments in calculating tax liabilities and in determining the recoverability of certain deferred tax assets. Deferred tax assets must be reduced by a valuation allowance if, based on the weight of available evidence, it is more likely than not that some portion or all of the recorded deferred tax assets will not be realized in future periods. Management believes it is likely that the deferred tax assets as of October 31, 2009 will be realized through the generation of future taxable income and tax planning strategies.
Results of Operations
Comparison of the Three Months Ended October 31, 2009 and 2008
Net Revenues. Net revenues totaled $63.8 million for the three months ended October 31, 2009, a decrease of 26.8%, compared to $87.1 million for the three months ended October 31, 2008. Overall, pasta per unit selling prices decreased 19.2% along with a decrease in sales volumes of 7.4%. Revenues from the retail market, a portion of which includes co-pack and government sales, decreased $5.4 million, or 15.2%, due to a 11.0% decrease in average selling prices and a 4.7% decrease in sales volume. Foodservice revenues decreased $4.7 million, or 22.8%, due to a 20.7% decrease in average selling prices and a 2.7% decrease in sales volumes. Ingredient revenues decreased $10.0 million, or 42.3%, due to a 32.9% decrease in average selling prices and a 14.0% decrease in sales volumes.
The Company markets semolina production in excess of its own requirements as well as durum wheat flour, other flour blends and by-products of the durum milling process. Revenues from mill product sales totaled $4.0 million for the three months ended October 31, 2009, a decrease of $3.3 million when compared to the same period of the prior year. The decrease is due to lower semolina sales volumes along with a decrease in per unit selling prices.
Cost of Goods Sold. Cost of goods sold decreased $29.5 million, or 37.6%, to $49.0 million for the three months ended October 31, 2009, compared to $78.5 million for the three months ended October 31, 2008. The decrease was primarily due to lower durum costs. Gross profit as a percentage of net revenues increased to 23.2% for the three months ended October 31, 2009 from 9.9% for the three months ended October 31, 2008 due to decreases in raw material costs partially offset by lower sales prices.
Marketing, General, and Administrative (MG&A) Expenses. MG&A expenses increased 6.3%, to $5.5 million for the quarter ended October 31, 2009, compared to $5.1 million for the quarter ended October 31, 2008.
13
The increase was primarily due to higher compensation costs and professional fees offset by a reduction in consumer marketing and advertising costs associated with Dreamfields pasta products. MG&A expenses as a percentage of net revenues increased to 8.6% for the quarter ended October 31, 2009, from 5.9% for the comparable quarter of the prior year.
Interest Expense. Interest expense for the three months ended October 31, 2009 totaled $0.2 million compared to $0.9 million for the comparable quarter of the prior year.
Income Taxes. Income tax expense for the three months ended October 31, 2009 and 2008 totaled $3.5 million and $1.0 million, respectively, and reflects an effective corporate income tax rate of approximately 38% and 37%, respectively.
Net Income. Net income for the three months ended October 31, 2009 totaled $5.6 million compared to net income of $1.7 million for the three months ended October 31, 2008.
Liquidity and Capital Resources
The Companys primary sources of liquidity are cash provided by operations and borrowings under its revolving credit facility. Working capital as of October 31, 2009 totaled $38.0 million compared to $35.8 million as of July 31, 2009.
The Company has a $45 million revolving credit facility with CoBank which extends through January 13, 2010. There was no balance outstanding on the line of credit as of October 31, 2009 and July 31, 2009. Therefore, the Company had $45 million available for borrowings under the revolving line of credit as of October 31, 2009 and July 31, 2009.
The Companys various debt agreements with CoBank and certain institutional investors obligate the Company to maintain or achieve certain amounts of equity and certain financial ratios and impose certain restrictions on the Company. The Company was in compliance with these financial covenants as of October 31, 2009 and the date of this filing.
Net cash provided from operating activities totaled $7.2 million for the three months ended October 31, 2009 compared to net cash provided by operating activities of $5.4 million for the three months ended October 31, 2008. The increase was primarily attributable to an increase in net income.
Net cash used for investing activities totaled $3.2 million and $0.6 million for the three months ended October 31, 2009 and 2008, respectively. A majority of the net cash used for investing activities for the quarter ended October 31, 2009 related to fixed asset expenditures. The Company is currently undertaking an estimated $10 million capital project at its Carrington facility. As of October 31, 2009, the Company had expended $3.7 million in conjunction with this project, and had entered into additional commitments for building construction and pasta equipment totaling $5.0 million as of October 31, 2009. These costs are expected to be paid within one year.
Net cash used for financing activities totaled $2.2 million and $5.0 million for the three months ended October 31, 2009 and 2008, respectively. The $2.2 million of net cash used for financing activities for the quarter ended October 31, 2009 related to scheduled payments on long-term debt. The $5.0 million of net cash used for financing activities for the quarter ended October 31, 2008 included $6.0 million in scheduled payments on long-term debt and a decrease in short-term notes payable offset by an increase in excess outstanding checks over cash on deposit.
On November 19, 2009, the Companys Board of Directors authorized the payment of non-periodic dividends of $0.01 per share on its Series D Delivery Preferred Stock, $0.62 per share on its Common Stock and $0.62 per share on its Series F Convertible Preferred Stock, payable on January 5, 2010 to stockholders of record as of December 4, 2009.
14
During December 2009, certain executive officers and employees of the Company exercised options for the purchase of 561,869 shares of the Companys Common Stock and 47,448 shares of the Companys Series D Delivery Preferred Stock. The aggregate consideration received by the Company for the issuance of those shares was $2.9 million.
U.S. Customs and Border Protection (Customs) has distributed antidumping and countervailing duties assessed on certain pasta imported from Italy and Turkey to affected domestic producers pursuant to the Continued Dumping and Subsidy Offset Act of 2000 (the Act). The Company received $692,000 in November 2009 under the Act, which will be recognized as other income in the Companys second quarter of fiscal year 2010. The Company cannot reasonably estimate the potential amount, if any, that it may receive under the Act in future periods as any such amount will be based upon future events over which the Company has little or no control, including but not limited to federal legislation, the amount of expenditures by domestic pasta producers and the amount of antidumping and countervailing duties collected by Customs. The Act, also known as the Byrd Amendment, has been repealed and therefore, duties assessed on pasta imports after September 30, 2007 will no longer be distributed to domestic producers. However, amounts collected (whether such collections occur before or after September 30, 2007) related to duties assessed on pasta entries prior to September 30, 2007, are expected to be available for future distribution to domestic producers.
The following table summarizes the Companys contractual obligations as of October 31, 2009 (in thousands):
|
|
|
|
Payments |
|
Payments |
|
Payments |
|
Payments |
|
|||||
|
|
|
|
Due in Less |
|
Due in |
|
Due in |
|
Due After |
|
|||||
Contractual Obligations |
|
Total |
|
Than 1 Year |
|
1-3 Years |
|
4-5 Years |
|
5 Years |
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Long-term debt |
|
$ |
28,988 |
|
$ |
5,763 |
|
$ |
16,725 |
|
$ |
6,500 |
|
$ |
|
|
Interest on long-term obligations (1) |
|
1,757 |
|
683 |
|
992 |
|
82 |
|
|
|
|||||
Wheat purchase obligations |
|
13,646 |
|
13,646 |
|
|
|
|
|
|
|
|||||
Construction obligations |
|
5,000 |
|
5,000 |
|
|
|
|
|
|
|
|||||
Warehouse obligations |
|
3,766 |
|
1,939 |
|
1,827 |
|
|
|
|
|
|||||
Operating leases |
|
1,123 |
|
557 |
|
537 |
|
29 |
|
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
|
$ |
54,280 |
|
$ |
27,588 |
|
$ |
20,081 |
|
$ |
6,611 |
|
$ |
|
|
(1) Based on interest rates as of October 31, 2009
The Company forward contracts for a certain portion of its future durum wheat requirements. At October 31, 2009, the Company had outstanding commitments for grain purchases totaling $13.6 million related to forward purchase contracts. These contracts are set price contracts to deliver grain to the Companys mill, and are not derivative in nature as they have no net settlement provision and are not transferable.
Management believes that net cash currently available and to be provided by operating activities, along with amounts the Company expects to be available under its line of credit, will be sufficient to meet the Companys expected capital and liquidity requirements for the foreseeable future.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Market risk is the potential loss to future earnings, fair values or cash flows resulting from adverse changes in interest rates, commodity prices, exchange rates, equity prices and other market changes.
The Company is exposed to market risk from changes in interest rates. For fixed rate debt, interest rate changes affect the fair value of financial instruments but do not impact earnings or cash flows. Conversely, for variable rate debt, interest rate changes generally do not affect the fair market value but do impact future earnings and cash flows, assuming other factors are held constant. A majority of the balances outstanding under the Companys current debt agreements are subject to variable interest rates.
15
The Company is exposed to certain fluctuations in commodity prices. The Company forward contracts for a certain portion of its future wheat requirements. These contracts are set price contracts to deliver grain to the Companys mill, and are not derivative in nature as they have no net settlement provision and are not transferable.
ITEM 4T. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
As required by Rule 13a-15(b) under the Securities Exchange Act of 1934 (the Exchange Act), we conducted an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer (together the Certifying Officers), of the effectiveness of the design and operation of our disclosure controls and procedures as of October 31, 2009, the end of the period covered by this report. Based upon that evaluation, the Certifying Officers concluded that our disclosure controls and procedures were effective as of October 31, 2009 to provide reasonable assurance that information required to be disclosed in our Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the SECs rules and forms and that such information is accumulated and communicated to our management, including our Certifying Officers, as appropriate, to allow for timely decisions regarding required disclosure.
Inherent Limitations on Effectiveness of Controls
Management is responsible for establishing and maintaining adequate internal control over financial reporting to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. generally accepted accounting principles. Internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of assets; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S. generally accepted accounting principles, and that receipts and expenditures are being made only in accordance with authorizations of the management and the Board; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of Company assets that could have a material effect on the financial statements.
Management personnel, including the Certifying Officers, recognize that our internal control over financial reporting cannot prevent or detect all error and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control systems objectives will be met. The design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Further, because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud, if any, have been detected. The design of any system of controls is based in part on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.
Changes in Internal Controls over Financial Reporting
There were no changes in the Companys internal controls over financial reporting during the Companys fiscal quarter ended October 31, 2009 that have materially affected, or are reasonably likely to materially affect, the Companys internal control over financial reporting.
16
PART II OTHER INFORMATION
ITEM 1A. RISK FACTORS
There have been no material changes from the risk factors disclosed in Part I, Item 1A, of the Companys Annual Report on Form 10-K for the fiscal year ended July 31, 2009.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
During December 2009, certain executive officers and employees of the Company exercised options for the purchase of 561,869 shares of the Companys Common Stock and 47,448 shares of the Companys Series D Delivery Preferred Stock. The aggregate consideration received by the Company for the issuance of those shares was $2.9 million. The shares were issued in private placement transactions exempt from the registration requirements of the Securities Act, pursuant to Section 4(2) of the Securities Act.
ITEM 6. EXHIBITS
Exhibits
3.1 |
Second Amended and Restated Articles of Incorporation of the Company, formerly Dakota Growers Restructuring Company, Inc. (Incorporated by reference to Exhibit 3.1 from the Companys Pre-Effective Amendment No. 2 to Form S-4 Registration Statement, File No. 333-81946, dated April 19, 2002). |
|
|
3.2 |
Second Amended and Restated Bylaws of the Company, formerly Dakota Growers Restructuring Company, Inc. (Incorporated by reference to Exhibit 3.3 from the Companys Pre-Effective Amendment No. 2 to Form S-4 Registration Statement, File No. 333-81946, dated April 19, 2002). |
|
|
3.3 |
Certificate of Designation of Series E Junior Participating Preferred Stock of the Company, formerly Dakota Growers Restructuring Company, Inc. (Incorporated by reference to Exhibit 3.2 from the Companys Pre-Effective Amendment No. 2 to Form S-4 Registration Statement, File No. 333-81946, dated April 19, 2002). |
|
|
3.4 |
Certificate of Designation of Series F Convertible Preferred Stock of the Company (Incorporated by reference to Exhibit 3.1 from the Companys Report on Form 8-K, File No. 000-50111, filed February 15, 2007). |
|
|
31.1 |
Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (Exchange Act Rule 13a-14(a) or 15d-14(a)). |
|
|
31.2 |
Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (Exchange Act Rule 13a-14(a) or 15d-14(a)). |
|
|
32.1 |
Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. Section 1350). |
|
|
32.2 |
Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. Section 1350). |
17
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
|
DAKOTA GROWERS PASTA COMPANY, INC. |
|
(Registrant) |
Signature |
|
Title |
|
Date |
|
|
|
|
|
/s/ Timothy J. Dodd |
|
President and Chief Executive Officer |
|
|
Timothy J. Dodd |
|
(Principal Executive Officer) |
|
December 15, 2009 |
|
|
|
|
|
/s/ Edward O. Irion |
|
Chief Financial Officer |
|
|
Edward O. Irion |
|
(Principal Financial and Accounting Officer) |
|
December 15, 2009 |
18