Consolidated Financial Statements First Quarter Close August 30, 2020Hanover Foods Corporation Consolidated Balance Sheets ‘Aug. 30, May 31, Sept. 1, Assets 2020 2020 2019 Current assets Cash and cash equivalents $ 12,711,000 "$14,646,000 $ 3,043,000 Accounts and notes receivable, net 30,785,000 34,064,000 33,196,000 Inventories: Finished goods 106,910,000 90,653,000 94,587,000 Raw materials and supplies 27,294,000 28,604,000 21,714,000 Prepaid expenses 17,301,000 17,578,000 17,029,000 Income tax receivable 3,934,000 5,076,000 4,198,000 Total current assets 198,935,000 190,621,000 173,767,000 Noncurrent assets Property, plant and equipment, at cost: Land and buildings 112,371,000 112,040,000 97,400,000 Machinery and equipment 202,316,000 200,740,000 195,099,000 Leasehold improvements 845,000 845,000 845,000 315,532,000 313,625,000 293,344,000 Less accumulated deprecis and amortization 222,084,000 219,988,000 213,651,000 93,448,000 93,637,000 79,693,000 Construction in progress 14,871,000 9,474,000 18,734,000 Total property, plant and equipment 108,319,000 103,111,000 98,427,000 Goodwill 3,923,000 3,923,000 3,923,000 Intangible assets 4,605,000 4,630,000 4,705,000 Right-of-use assets, operating, Net 4,677,000 4,677,000 : Other assets 2,753,000 2,788,000 8,161,000 Total noncurrent assets 124,277,000 119,129,000 115,216,000 Total assets $ 323,212,000 __$ 309,750,000 __$ 288,983,000 —_.ASA 212,000 __$ 309,750,000 __ $ 288,983,000_Hanover Foods Corporation Consolidated Balance Sheets ———————————— ‘Aug. 30, May 31, Sept.1, Liabilities and stockholders’ equity 2020 2020 2019 Current liabilities Notes payable - banks $ 23,239,000 $15,440,000 $ 4,941,000 ‘Accounts payable 17,236,000 15,084,000 17,053,000 Accrued expenses 15,913,000 14,694,000 16,474,000 Operating lease liabilities 1,332,000 1,332,000 o Total current liabilities 57,720,000 46,550,000 ___ 38,468,000 Noncurrent liabilities Deferred income taxes 3,222,000 3,222,000 37,000 Operating lease liabilities 3,345,000 3,345,000 0 Other liabitties 11,058,000 11,197,000 __ 13,393,000 Total noncurrent liabilities 17,625,000 17,764,000 __ 13,430,000 ‘Total liabilities 75,345,000 64,314,000 51,898,000 Stockholders’ equity Series A & 8 8.25% cumulative convertible preferred stock 773,000 773,000 776,000 Series C cumulative convertible preferred stock 250,000 250,000 250,000 Common stock, class A- nonvoting 8,734,000 8,734,000 8,733,000 Common stock, class 8 - vot 21,213,000 21,213,000 21,213,000 Capital paid in excess of par value 35,046,000 35,046,000 35,044,000 Retained earnings 228,599,000 226,138,000 218,236,000 Treasury stock at cost (50,041,000) (50,032,000) (50,005,000) Accumulative other comprehensive income 3,293,000 3,313,000 2,838,000 Total stockholders’ equity 247,867,000 245,436,000 237,085,000 Total liabilities and stockholders’ equity $ 323,212,000 __$ 309,750,000 _$ 288,983,000Hanover Foods Corporation Consolidated Statements of Earnings For the Three Months Ended -— ee ere ‘Aug. 30, Sept. 1, 2020 2019 Net sales $ 88,442,000 $90,036,000 Cost of goods sold 77,570,000 80,463,000 Gross profit 10,872,000 9,573,000 Selling expenses 3,006,000 2,722,000 Administrative expenses 4,369,000 4,264,000 Operating profit 3,497,000 2,587,000 Interest expense 38,000 2,000 Other (income) expense, net (406,000) (448,000) Earnings before income taxes 3,865,000 3,033,000 Income taxes 1,199,000 941,000 Net earnings 2,666,000 2,092,000 Dividends on preferred stock 10,000 10,000 2,082,000 Net earnings applicable to common stock $ 2,656,000Hanover Foods Corporation Consolidated Statements of Comprehensive Income Aug. 30, Sept. 1, 2020 2019 — Net earnings $ 2,666,000 $ 2,092,000 Other Comprehensive Income (loss) Unrealized gain (loss) on securities, net of reclassification adjustment (20,000) 208,000 and Others (net of taxes) Other Comprehensive income (loss) (20,000) 208,000 Comprehensive Income $2,646,000 $ 2,300,000Hanover Foods Corporation Consolidated Statements of Cash Flows For the Three Months Ended ‘Aug. 30, Sept. 1, 2020 2019 Cash flows from operating activities Net earnings $ 2,666,000 $ 2,092,000 Adjustments to reconcile net earnings to net cash provided by operating activities Depreciation and amortization 2,163,000 2,067,000 (Gain) Loss on disposal of fixed assets 0 0 Deferred income taxes o ° Changes in assets and liabilities Accounts receivable, net 3,279,000 (2,004,000) Inventories, net (14,847,000) (10,689,000) Prepaid expenses and other assets 292,000 (590,000) Accounts payable and accrued expenses 3,371,000 6,979,000 Income taxes receivable 1,142,000 480,000 Other liabilities. (139,000) (213,000)' ‘Net cash provided by (used in) operating activi (2,173,000) (878,000) Cash flows used in investing activities Acquisitions of property, plant and equipment (7,346,000) (9,714,000) Proceeds from disposal of property, plant and equipment 0 0 Net cash provided by (used in) investing activities (7,346,000) (9,724,000) Cash flows from financing activities Proceeds from (payments on) notes payable, net 7,799,000 4,336,000 Repurchase of stock (20,000) (21,000) Payment of dividends (205,000) (205,000) Net cash provided by (used in) financing activities 7,584,000 4,120,000 Net increase (decrease) in cash and cash equivalents (2,935,000) (6,472,000) Cash and cash equivalents, beginning of the year 14,646,000 9,515,000 Cash and cash equivalents end of period $ 12,711,000 $_ 3,043,000 SS i ent ot perit —S 12,722,000 $3,043,000Auinba swaaioHD01S 40 sunawaivas o2LvanOSNOD NoUvaos409 $0004 wanONvH