FORM 10-Q

 

 

U.S. SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

x

Quarterly report pursuant to section 13 or 15(d) of the Securities Act of 1934.

 

For the quarterly period ended September 30, 2012

 

or

 

¨

Transition report pursuant to section 13 or 15(d) of the Securities Act of 1934.

 

Commission File No. 0-3026

 

 

PARADISE, INC.

 

 

INCORPORATED IN FLORIDA

I.R.S. EMPLOYER IDENTIFICATION NO. 59-1007583

 

1200 DR. MARTIN LUTHER KING, JR. BLVD.,

PLANT CITY, FLORIDA 33563

 

(813) 752-1155

 

  

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 and 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 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 x No ¨

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.

 

Large accelerated filer	¨		Accelerated filer	¨
Non-accelerated filer	¨		Smaller reporting company	x

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act) Yes ¨ No x

 

The number of shares outstanding of each of the issuer’s classes of common stock as of November 14, 2012 was 519,600 shares.

 

  

PARADISE, INC.

 

FORM 10-Q

FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2012

 INDEX

 

 

 

		PAGE
PART I.	FINANCIAL INFORMATION
	ITEM 1.
	CONSOLIDATED BALANCE SHEETS:
	Assets
	As of September 30, 2012 (Unaudited), December 31, 2011 and September 30, 2011 (Unaudited)	2
	Liabilities and Stockholders’ Equity
	As of September 30, 2012 (Unaudited), December 31, 2011 and September 30, 2011 (Unaudited)	3
	CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED):
	For the three-month periods ended September 30, 2012 and 2011	4
	For the nine-month periods ended September 30, 2012 and 2011	5
	CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED):
	For the nine-month periods ended September 30, 2012 and 2011	6
	NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)	7 – 9
	ITEM 2.
	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL
	CONDITION AND RESULTS OF OPERATIONS	10 – 13
	ITEM 3.
	QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK – N/A 13
	ITEM 4.
	CONTROLS AND PROCEDURES	13
PART II.	OTHER INFORMATION
	ITEMS 1 – 6.	14
SIGNATURES		15

 

 

 

PARADISE, INC.

COMMISSION FILE NO. 0-3026

 

PART I.

FINANCIAL INFORMATION

 

Item 1.

Financial Statements

 

PARADISE, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

 

		AS OF								AS OF
		SEPTEMBER 30,				AS OF				SEPTEMBER 30,
		2012				DECEMBER 31,				2011
		(UNAUDITED)				2011				(UNAUDITED)
ASSETS
CURRENT ASSETS:
Cash		$	78			$	7,468,908			$	95,564
Accounts Receivable, Less, Allowances of $0 (09/30/12), $1,003,779 (12/31/11) and $0 (09/30/11)			8,087,910				2,579,362				6,461,091
Inventories:
Raw Materials			3,627,009				2,214,455				2,783,301
Work in Process			390,446				558,899				370,161
Finished Goods			7,645,579				3,423,163				6,368,290
Deferred Income Tax Asset			234,912				234,912				225,942
Income Tax Refund Receivable			-								221,446
Prepaid Expenses and Other Current Assets			480,835				295,413				400,786
Total Current Assets			20,466,769				16,775,112				16,926,581
Property, Plant and Equipment, Less, Accumulated Depreciation of $18,860,033 (09/30/12), $18,505,964 (12/31/11) and $18,381,081 (09/30/11)			4,036,833				4,184,046				4,293,875
Goodwill			413,280				413,280				413,280
Customer Base and Non-Compete Agreement			471,219				565,632				597,104
Other Assets			233,205				222,663				228,163
TOTAL ASSETS		$	25,621,306			$	22,160,733			$	22,459,003

 

See Accompanying Notes to these Consolidated Financial Statements (Unaudited)

 

 

		AS OF								AS OF
		SEPTEMBER 30,				AS OF				SEPTEMBER 30,
		2012				DECEMBER 31,				2011
		(UNAUDITED)				2011				(UNAUDITED)
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES:
Short Term Debt		$	2,592,084			$	313,246			$	1,118,364
Accounts Payable			1,261,334				358,851				980,953
Accrued Liabilities			774,814				1,218,289				755,553
Income Taxes Payable			187,777				370,678				363,382
Total Current Liabilities			4,816,009				2,261,064				3,218,252
DEFERRED INCOME TAX LIABILITY			165,891				165,891				147,354
Total Liabilities			4,981,900				2,426,955				3,365,606
STOCKHOLDERS’ EQUITY:
Common Stock:  $0.30 Par Value, 2,000,000 Shares Authorized, 583,094 Shares Issued, 519,600 Shares Outstanding			174,928				174,928				174,928
Capital in Excess of Par Value			1,288,793				1,288,793				1,288,793
Retained Earnings			19,730,149				18,824,521				18,184,140
Accumulated Other Comprehensive Loss			(281,245	)			(281,245	)			(281,245	)
Treasury Stock, at Cost, 63,494 Shares			(273,219	)			(273,219	)			(273,219	)
Total Stockholders’ Equity			20,639,406				19,733,778				19,093,397
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY		$	25,621,306			$	22,160,733			$	22,459,003

 

 

PARADISE, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

(UNAUDITED)

 

		FOR THE THREE MONTHS ENDED
		SEPTEMBER 30,
		2012				2011
Net Sales		$	9,994,865			$	9,446,944
Costs and Expenses:
Cost of Goods Sold			7,023,493				7,053,289
Selling, General and Administrative Expense			1,199,859				1,154,877
Amortization			35,971				35,971
Interest Expense			3,304				8,344
Total Costs and Expenses			8,262,627				8,252,481
Income from Operations			1,732,238				1,194,463
Other Loss			(35,771	)			(23,906	)
Income from Operations Before Provision for Income Taxes			1,696,467				1,170,557
Provision for Income Taxes			644,654				444,813
Net Income		$	1,051,813			$	725,744
Income per Common Share (Basic and Diluted)		$	2.02			$	1.40
Dividend per Common Share		$	0.00			$	0.00

 

See Accompanying Notes to these Consolidated Financial Statements (Unaudited)

 

 

PARADISE, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

(UNAUDITED)

 

		FOR THE NINE MONTHS ENDED SEPTEMBER 30,
		2012				2011
Net Sales		$	15,848,256			$	14,217,580
Costs and Expenses:
Cost of Goods Sold			11,325,394				10,653,906
Selling, General and Administrative Expense			2,816,946				2,666,303
Amortization			107,914				107,453
Interest Expense			3,304				8,344
Total Costs and Expenses			14,253,558				13,436,006
Income from Operations			1,594,698				781,574
Other Income			34,894				174,695
Income from Operations Before Provision for Income Taxes			1,629,592				956,269
Provision for Income Taxes			619,241				363,383
Net Income		$	1,010,351			$	592,886
Income per Common Share (Basic and Diluted)		$	1.94			$	1.14
Dividend per Common Share		$	0.20			$	0.10

 

See Accompanying Notes to these Consolidated Financial Statements (Unaudited)

 

 

PARADISE, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

 

		FOR THE NINE MONTHS ENDED
		SEPTEMBER 30,
		2012				2011
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income		$	1,010,351			$	592,886
Adjustments to Reconcile Net Income to Net Cash Used in Operating Activities:
Depreciation and Amortization			461,982				496,638
Increase in:
Accounts Receivable			(5,508,548	)			(2,841,356	)
Inventories			(5,466,517	)			(3,475,169	)
Prepaid Expenses			(185,422	)			(52,379	)
Other Assets			(24,847	)			(57,589	)
Income Tax Refund Receivable			-				(221,446	)
Increase (Decrease) in:
Accounts Payable			902,485				676,296
Accrued Expense			(443,475	)			(479,970	)
Income Taxes Payable			(182,901	)			211,373
Net Cash Used in Operating Activities			(9,436,892	)			(5,150,716	)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of Property and Equipment			(206,856	)			(344,344	)
Net Cash Used in Investing Activities			(206,856	)			(344,344	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net Proceeds of Short-Term Debt			2,278,838				870,528
Dividends Paid			(103,920	)			(51,960	)
Net Cash Provided by Financing Activities			2,174,918				818,568
NET DECREASE IN CASH			(7,468,830	)			(4,676,492	)
CASH, AT BEGINNING OF PERIOD			7,468,908				4,772,056
CASH, AT END OF PERIOD		$	78			$	95,564
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid for:
Interest		$	3,304			$	8,344
Income Tax			802,142				371,446
Net Supplemental Cash Flows		$	805,446			$	379,790

 

See Accompanying Notes to these Consolidated Financial Statements (Unaudited)

 

 

PARADISE, INC. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

 

NOTE 1

BASIS OF PRESENTATION

 

The accompanying unaudited consolidated financial statements of Paradise, Inc. (the “Company”) have been prepared by the Company in accordance with accounting principles generally accepted in the United States of America for interim financial information and pursuant to the rules and regulations of the Securities and Exchange Commission. Accordingly, they do not include all the information and footnotes required by accounting principles generally accepted in the United States of America for annual financial statements.

 

The information furnished herein reflects only the adjustments and accruals of a normal recurring nature management believes is necessary to fairly state the operating results for the respective periods. The notes to the unaudited consolidated financial statements should be read in conjunction with the notes to the consolidated financial statements contained in the Company’s Form 10-K for the year ended December 31, 2011. The Company’s management believes that the disclosures are sufficient for interim financial reporting purposes.

 

Consumer demand for glace’ fruit product is traditionally strongest during the Thanksgiving and Christmas season. Almost 80% of glace’ fruit product sales are recorded during an eight to ten week period beginning in mid September. Therefore, the operating results for the nine months ended September 30, 2012 are not necessarily indicative of the results that may be expected for the current year.

 

Certain minor reclassifications have been made to the consolidated unaudited statements of operations for the quarter ended September 30, 2011 to conform to the classifications used for the quarter ended September 30, 2012.

 

NOTE 2

RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

 

In May 2011, the FASB issued ASU 2011-04 Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs. The ASU expands ASC Topic 820’s existing disclosure requirements for fair value measurements and makes other amendments that could change how the fair value measurement guidance in ASC Topic 820 is applied. The ASU is effective for the Company for the interim and annual periods beginning after December 15, 2011. The adoption of this ASU did not have an impact on the Company’s consolidated financial statements or disclosures.

 

In June 2011, the FASB issued ASU 2011-05 Presentation of Comprehensive Income, which revises the manner in which entities present comprehensive income in their financial statements. The new guidance requires entities to report components of comprehensive income in either (1) a continuous statement of comprehensive income or (2) two separate but consecutive statements. The ASU is effective for the Company for the interim and annual periods beginning after December 15, 2011. The adoption of this ASU did not have an impact on the Company’s consolidated financial statements or disclosures.

 

Other recent accounting pronouncements issued by the FASB (including its EITF), the AICPA, and the Securities and Exchange Commission did not or are not believed by management to have a material impact on the Company’s present or future consolidated financial statements.

 

NOTE 3

INCOME PER COMMON SHARE

 

Basic and diluted income per common share are based on the weighted average number of shares outstanding and assumed to be outstanding of 519,600. There are no dilutive securities outstanding.

 

 

PARADISE, INC. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(UNAUDITED)

 

NOTE 4

BUSINESS SEGMENT DATA

 

The Company’s operations are conducted through two business segments. These segments, and the primary operations of each, are as follows:

 

Business Segment		Operation
Fruit		Production of candied fruit, a basic fruitcake ingredient, sold to manufacturing bakers, institutional users, and retailers for use in home baking.  Also, based on market conditions, the processing of frozen strawberry products, for sale to commercial and institutional users such as preservers, dairies, drink manufacturers, etc.
Molded Plastics		Production of plastics containers and other molded plastics for sale to various food processors and others.

 

		September 30,				September 30,
		2012				2011
Net Sales in Each Segment
Fruit:
Sales to Unaffiliated Customers		$	9,646,744			$	8,700,855
Molded Plastics:
Sales to Unaffiliated Customers			6,201,512				5,516,725
Net Sales		$	15,848,256			$	14,217,580

 

For the nine month period ended September 30, 2012 and 2011, sales of frozen strawberry products totaled $521,952 and $323,495, respectively.

 

The Company does not account for intersegment transfers as if the transfers were to third parties.

 

The Company does not prepare operating profit or loss information on a segment basis for internal use, until the end of each year. Due to the seasonal nature of the fruit segment, management believes that it is not practical to prepare this information for interim reporting purposes. Therefore, reporting is not required by accounting principles generally accepted in the United States of America.

 

 

PARADISE, INC. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(UNAUDITED)

 

NOTE 4

BUSINESS SEGMENT DATA (CONTINUED)

 

		September 30,				September 30,
		2012				2011
Identifiable Assets of Each Segment are Listed Below:
Fruit		$	19,310,400			$	15,379,816
Molded Plastics			4,629,462				5,106,533
Identifiable Assets			23,939,862				20,486,349
General Corporate Assets			1,681,444				1,972,654
Total Assets		$	25,621,306			$	22,459,003

 

Identifiable assets by segment are those assets that are principally used in the operations of each segment. General corporate assets are principally cash and land and buildings.

 

NOTE 5

SUBSEQUENT EVENTS

 

Subsequent to September 30, 2012, the Company filed a settlement claim against BP Exploration & Production, Inc. and BP America Production Company (“BP”). The claim is subject to review by a claims board as well as a protest period by BP. An amount has not been recorded in the Company’s consolidated financial statements due to the inherent uncertainty in the claims process.

 

 

 

PARADISE, INC.

COMMISSION FILE NO. 0-3026

 

PART I. FINANCIAL INFORMATION

 

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

Forward–Looking Statements

 

This Quarterly Report on Form 10-Q contains “forward-looking statements” within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended. All statements other than statements of historical fact should be considered “forward-looking statements” for the purpose of these provisions, including statements that include projections of, or expectations about, earnings, revenues or other financial items, statements about our plans and objectives for future operations, statements concerning proposed new products or services, statements regarding future economic conditions or performance, statements concerning our expectations regarding the attraction and retention of customers, statements about market risk and statements underlying any of the foregoing. In some cases, forward-looking statements can be identified by the use of such terminology as “may”, “will”, “expects”, “potential”, or “continue”, or the negative thereof or other similar words. Although we believe that the expectations reflected in our forward-looking statements are reasonable, we can give no assurance that such expectations or any of our forward-looking statements will prove to be correct. Actual results and developments are likely to be different from, and may be materially different from, those expressed or implied by our forward-looking statements. Forward-looking statements are subject to inherent risks and uncertainties.

 

Overview

 

Paradise, Inc.’s main business segment, glace’ fruit, a prime ingredient of fruitcakes and other holiday confections, represented 68.9% of total net sales for the previous year of 2011. These products are sold to manufacturing bakers, institutional users, supermarkets and other retailers throughout the country. Consumer demand for glace’ fruit product is traditionally strongest during the Thanksgiving and Christmas season. Almost 80% of glace’ fruit product sales are recorded from the eight to ten weeks beginning in mid September.

 

Since the majority of the Company’s customers require delivery of glace’ candied fruit products during this relatively short period of time, Paradise, Inc. must operate at consistent levels of production from as early as January through the middle of November of each year in order to meet peak demands. Furthermore, the Company must make substantial borrowings of short-term working capital to cover the cost of raw materials, factory overhead and labor expense associated with production for inventory. This combination of building and financing inventories during the year, without the opportunity to record any significant fruit product income, results in the generation of operating losses well into the third quarter of each year. Therefore, it is the opinion of management that meaningful forecasts of annual net sales or profit levels require analysis of a full year’s operations.

 

In addition, comparison of current quarterly results to the preceding quarter produces an incomplete picture on the Company’s performance due to year-to-year changes in production schedules, seasonal harvests and availability of raw materials, and in the timing of customer orders and shipments. Thus, the discussion of information presented within this report is focused on the review of the Company’s current year-to-date results as compared to the similar period last year.

 

Paradise, Inc.’s other business segment, Paradise Plastics, Inc., a wholly owned subsidiary of Paradise, Inc. produces custom molding products, is not subject to the seasonality of the glace’ fruit business. This segment represents all injection molding and thermoforming operations, including the packaging for the Company’s fruit products. Only sales to unaffiliated customers are reported.

 

 

  

PARADISE, INC.

COMMISSION FILE NO. 0-3026

 

PART I. FINANCIAL INFORMATION

 

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations (Continued)

 

The First Nine Months

 

Paradise, Inc.’s fruit segment net sales for the first nine months of 2012 increased 10.9% to $9,646,744 compared to $8,700,855 for the similar nine months reporting period of 2011. This increase is due to timing differences in the receipt of customers’ orders and the corresponding shipping dates for delivery of the Company’s retail glace’ fruit products. Paradise, Inc. recognizes net sales based upon the date of shipment to its customers. For the quarter under review, the increase of 10.9% is directly related to the increase in shipment of retail glace’ fruit orders to several customers in September, 2012 compared to September, 2011. Paradise, Inc.’s management has consistently disclosed that interim filings are not reliable financial indicators of year-end performance. Only a full year’s accounting will provide the necessary financial information to determine the Company’s overall success.

 

Paradise Plastics, Inc.’s net sales to unaffiliated customers during the first nine months of 2012 increased 12.4% to $6,201,512 from $5,516,725 for the similar reporting period of 2011. This increase is primarily related to two long term customers, who have received a greater demand for their products during the first three quarters of 2012 compared to the similar reporting period of September, 2011. The Plastics business is also continuing to make inroads in expanding its base of business to include such diverse industries as medical supplies, food processing and aerospace. Sales to these customers continue to help offset the loss of business related to the housing market showdown starting back in late 2008.

 

Consolidated cost of sales, as a percentage of net sales, decreased 3.4% during the first nine months of 2012 compared to the similar reporting period of 2011. This decrease is primarily related to the earlier shipment of higher margin retail glace’ fruit products during the third quarter of 2012 compared to the similar reporting period of 2011. It is management’s belief when the current year’s shipment of all seasonal products are completed, cost of sales will be in line with 2011’s cost of sales percentage.

 

Selling, general and administrative expenses for the first nine months of 2012 increased 5.6% compared to the previous year’s reporting period of 2011. The increase in expenses such as advertising, brokerage and freight out expenses can be directly attributable to the growth reflected above in net sales for Paradise, Inc.’s fruit and plastics segment during the first nine months of 2012.

 

Paradise, Inc.’s interest expense on its revolving line of credit for the nine months ended September 30, 2012 was $3,304 compared to $8,344 for September 30, 2011. As reported in previous filings, Paradise, Inc. renewed its revolving line of credit on June 30, 2011 for a two year period. Terms of the renewal are similar to the previous agreement. Paradise, Inc.’s revolving line of credit has a maximum limit of $12,000,000 with a borrowing base of 80% of the Company’s eligible receivables plus up to 60% of the Company’s eligible inventory. Interest is payable monthly at the bank’s LIBOR rate plus 1.9% or a floor rate of 3%, whichever is greater.

 

Other Significant Items

 

Other Income for the nine months ended September 30, 2012 was $34,894 compared to $174,695 for the nine months ended September 30, 2011. As mentioned in previous filings, on February 22, 2011, Paradise, Inc. received $150,000 from a former supplier to settle a dispute dating back to September, 2004. This amount is reflected as part of Other Income on the Company’s income statement. All legal expenses incurred by Paradise, Inc. as a result of this settlement have been paid.

 

 

 

PARADISE, INC.

COMMISSION FILE NO. 0-3026

 

PART I. FINANCIAL INFORMATION

 

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations (Continued)

 

Other Significant Items (Continued)

 

Inventory as of September 30, 2012 totaled $11,663,034 compared to $9,521,752 as of September 30, 2011.

 

This increase of $2,141,282 is primarily driven by the Company’s need to procure a sufficient amount of raw fruit materials heading into 2013. As mentioned above, Paradise, Inc.’s production period will commence as early as January in order to be ready to ship glace’ fruit products to customers in time for the holiday selling season beginning in mid-September of each year. Management is consistently reviewing economic, harvest and weather conditions to see what effect changes to these factors will have on the future availability of the Company’s raw materials. Based on its current review of these factors, management has taken appropriate steps to increase the procurement of raw fruit materials during the third quarter of 2012. This will ensure that sufficient raw materials will be on hand as we transition into the 2013 production period.

 

Paradise, Inc. finances ongoing operations primarily with cash provided by our operating activities which are seasonal in nature. Our principal sources of liquidity are our cash flows provided by operating activities, our existing cash, and a line of credit facility. At September 30, 2012 and December 31, 2011, we had $78 and $7,468,908, respectively, in cash. Additionally, we have a revolving line of credit with a maximum limit of $12 million and a borrowing limit of 80% of the Company’s eligible receivables plus up to 60% of the Company’s eligible inventory, of which $2,083,209 was outstanding at September 30, 2012 and $0 at December 31, 2011. Within this agreement, there are letters of credit with a limit of $1,200,000, of which $508,875 was outstanding at September 30, 2012 and $313,246 at December 31, 2011. The line of credit agreement expires in June 2013. Net cash used in operating activities increased from $5,150,716 for the nine months ended September 30, 2011 compared to $9,436,892 for the nine months ended September 30, 2012. The primary reasons for this increase are as follows; income tax payments made during the first nine months for 2012 were $430,696 greater than the first nine months of 2011; payments for the purchase of inventory increased $1,991,348 and Accounts Receivable payments received from Paradise, Inc.’s customers during the first nine months of 2012 were $2,667,192 less than the similar reporting period of 2011.

 

Summary

 

Paradise Inc.’s consolidated net sales increased $1,630,676 representing an increase of 11.5% for the first nine months of 2012 compared to the similar reporting period of 2011. This increase is twofold: First, timing differences in the receipt of purchase orders received and related shipping dates from fruit customers resulting in additional fruit segment income for the first nine months of 2012 of $945,889. Secondly, Paradise Plastics, Inc.’s demand for product from several long time customers resulted in plastics net sales increasing $684,748 for the first nine months of 2012.

 

However, as mentioned and disclosed in all previous interim filings, due to the highly seasonal nature of the Company’s primary product, glace’ fruit, no meaningful financial analysis may be developed from Paradise, Inc.’s interim reporting results. Only a full year’s accounting of revenue and expenses will provide the necessary information to determine the Company’s financial performance.

 

 

PARADISE, INC.

COMMISSION FILE NO. 0-3026

 

PART I. FINANCIAL INFORMATION

 

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations (Continued)

 

Critical Accounting Estimates

 

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make assessments, estimates and assumptions that affect the amounts reported in the consolidated financial statements. We evaluate the accounting policies and estimates used to prepare the consolidated financial statements on an ongoing basis. Critical accounting estimates are those that require management’s most difficult, complex, or subjective judgments and have the most potential to impact our financial position and operating results. For a detailed discussion of our critical accounting estimates, see our Annual Report on Form 10-K for the year ended December 31, 2011. There have been no material changes to our critical accounting estimates during the nine months ended September 30, 2012.

 

Recently Issued Accounting Pronouncements

 

In May 2011, the FASB issued new guidance that expands existing disclosure requirements for fair value measurements and makes other amendments that could change how the fair value measurement guidance is applied. The guidance is effective for us for the interim and annual periods beginning after December 15, 2011. The adoption of this guidance did not have an impact on us.

 

In June 2011, the FASB issued new guidance that revises the manner in which entities present comprehensive income in their financial statements. The new guidance requires entities to report components of comprehensive income in either (1) a continuous statement of comprehensive income or (2) two separate but consecutive statements. The guidance is effective for us for the interim and annual periods beginning after December 15, 2011. The adoption of this guidance did not have an impact on us.

 

We do not believe that other recent accounting pronouncements issued by the FASB (including its EITF), the AICPA, and the Securities and Exchange Commission will have a material impact on the Company’s present or future consolidated financial statements.

 

Item 3.

Quantitative and Qualitative Disclosure and Market Risk – N/A

 

Item 4.

Controls and Procedures

  

The Company’s Chief Executive Officer and Chief Financial Officer have, within 90 days of the filing date of this quarterly report, evaluated the Company’s disclosure controls and procedures. Based on their evaluation, the Company’s Chief Executive Officer and Chief Financial Officer have concluded, as of September 30, 2012, that the Company’s disclosure controls and procedures are effective to ensure that information required to be disclosed by the Company in reports that it files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the applicable Securities and Exchange Commission rules and forms. During the year ended December 31, 2010, the Company identified a weakness in internal control over the timing of issuing credit memos for products returned into inventory. Procedures were established during the nine months ended September 30, 2011 to ensure the timeliness of issuing credit memos when products are returned. There were no other changes in the Company’s internal controls over financial reporting that occurred during the period covered by this report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. The most recent evaluation of these controls by the Company’s Chief Executive Officer and Chief Financial Officer did not identify any additional deficiencies or weaknesses in the Company’s internal controls over financial reporting; therefore, no corrective actions were taken.

 

 

PARADISE, INC.

COMMISSION FILE NO. 0-3026

 

PART II.	OTHER INFORMATION
Item 1.	Legal Proceedings – N/A
Item 1A.	Risk Factors – N/A
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds – N/A
Item 3.	Defaults Upon Senior Securities – N/A
Item 4.	Mine Safety Disclosures – N/A
Item 5.	Other Information – N/A
Item 6.	Exhibits and Reports on Form 8-K

 

 

(a)

Exhibits

 

	Exhibit  Number	Description
	31.1	Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
	31.2	Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
	32.1	Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
	32.2	Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

 

(b)

Reports on Form 8-K.

 

None.

 

 

PARADISE, INC. COMMISSION FILE NO. 0-3026

 

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.

 

 

	PARADISE, INC.
	A Florida Corporation
	/s/ Melvin S. Gordon		Date: November 14, 2012
	Melvin S. Gordon
	Chief Executive Officer and Chairman
	/s/ Jack M. Laskowitz		Date: November 14, 2012
	Jack M. Laskowitz
	Chief Financial Officer and Treasurer