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Consolidated Financial Statements Second Quarter Close November 29, 2020 Hanover Foods Corporation Consolidated Balance Sheets Nov. 29, May 31, Dec. 1, Assets 2020 2020 2019 Current assets Cash and cash equivalents $ 11,862,000 $ 14,646,000 -$ 7,515,000 Accounts and notes receivable, net 35,676,000 34,064,000 35,831,000 Inventories: Finished goods 110,159,000 90,653,000 101,932,000 Raw materials and supplies 39,343,000 28,604,000 30,878,000 Prepaid expenses 16,603,000 17,578,000 16,549,000 Income tax receivable 2,290,000 5,076,000 2,290,000 Total current assets 215,933,000 __190,621,000__194,995,000 Noncurrent assets Property, plant and equipment, at cost: Land and buildings 113,239,000 112,040,000 97,899,000 Machinery and equipment 199,165,000 200,740,000 195,838,000 Leasehold improvements 845,000 845,000 845,000 313,289,000 “313,625,000 294,582,000 Less accumulated depreciation and amortization 219,581,000___219,988,000___215,587,000 93,668,000 93,637,000 78,995,000 Construction in progress 18,265,000 9,474,000 21,136,000 Total property, plant and equipment 111,933,000 __103,111,000___ 100,131,000 Goodwill 3,923,000 3,923,000 3,923,000 Intangible assets 4,580,000 4,630,000 4,680,000 Right-of-use assets, operating, Net 4,677,000 4,677,000 0 Other assets 3,827,000 2,788,000 7,840,000 ‘Total noncurrent assets 128,940,000 119,129,000 _116,574,000 Total assets $ 344,873,000 $ 309,750,000 $ 311,569,000 Hanover Foods Corporation Consolidated Balance Sheets Nov. 29, May 31, Dec. 1, Liabilities and stockholders’ equity 2020 2020 2018 Current liabilities Notes payable - banks $ 41,510,000 $ 15,440,000 $ 16,835,000 ‘Accounts payable 14,878,000 15,084,000 21,423,000 ‘Accrued expenses 117,665,000 14,694,000 18,550,000 Operating lease liabilities 1,332,000 1,332,000 0 Total current liabilities 75,385,000 46,550,000 _56,808,000 Noncurrent liabilities Deferred income taxes 3,222,000 3,222,000 37,000 Operating lease liabilities 3,345,000 3,345,000 0 Other labilties 10,917,000 11,197,000 __ 13,247,000 Total noncurrent liabilities 17,484,000 17,764,000 _13,284,000 Total liabilities 92,869,000 64,314,000 __70,092,000 Stockholders’ equity Series A & B 8.25% cumulative convertible preferred stock 73,000 773,000 76,000 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 - voting 21,213,000 24,213,000 21,213,000 Capital paid in excess of par value 35,046,000 35,046,000 35,044,000 Retained earnings 232,751,000 226,138,000 222,947,000 Treasury stock at cost (50,041,000) (50,031,000) (50,025,000) Accumulative other comprehensive income 3,278,000 3,313,000 2,539,000 Total stockholders’ equity 252,004,000 245,436,000 201,477,000 ities and stockholders’ equity $ 344,873,000 $ 309,750,000 _$ 311,569,000 ‘onsen sates oF TOOSIOBES UY [= Hanover Foods Corporation Consolidated Statements of Earnings For the Six Months Ended Nov. 29, Dec. 1, 2020 2019 Net sales $ 191,529,000 $ 201,742,000 Cost of goods sold 169,310,000 177,907,000 Gross profit 22,219,000 23,835,000 Selling expenses 6,096,000 6,246,000 Administrative expenses 8,524,000 8,508,000 Operating profit 7,599,000 9,081,000 Interest expense 92,000 55,000 Other (income) expense, net (2,517,000) (984,000) Earnings before income taxes 10,024,000 110,010,000 Income taxes 3,007,000 3,003,000 Net earnings 7,017,000 7,007,000 Dividends on preferred stock 20,000 20,000 Net earnings applicable to common stock $6,997,000 _$ _ 6,987,000 Hanover Foods Corporation Consolidated Statements of Comprehensive Income Nov. 29, Dec. 1, 2020 2019 Net earnings $7,017,000 $_7,007,000 Other Comprehensive Income (loss) Unrealized gain (loss) on securities, net of reclassification adjustment (35,000) (91,000) and Others (net of taxes) Other Comprehensive Income (loss) (35,000) (81,000) Comprehensive Income $6,982,000 _$ 6,916,000 Hanover Foods Corporation Consolidated Statements of Cash Flows For the Six Months Ended Cash flows from operating activities Net earnings $7,017,000 $ 7,007,000 ‘Adjustments to reconcile net earnings to net ‘cash provided by operating activities Depreciation and amortization 4,326,000 4,076,000 (Gain) Loss on disposal of fixed assets (2,616,000) ° Deferred income taxes ° 0 Changes in assets and liabilities Accounts receivable, net (2,612,000) (2,639,000) Inventories, net (30,245,000) (27,208,000) Prepaid expenses and other assets (28,000) (33,000) ‘Accounts payable and accrued expenses 2,765,000 13,425,000 Income taxes receivable 2,786,000 2,398,000 Other abilities (280,000) (414,000) [Net cash provided by (used in) operating activi (16,958,000) (4,388,000) Cash flows used in investing activities ‘Acquisitions of property, plant and equipment (23,510,000) (13,402,000) Proceeds from disposal of property, plant and equipment 2,028,000 ° Net cash provided by (used in) investing activities (22,482,000) (13,402,000) ‘Cash flows from financing activities Proceeds from (payments on) notes payable, net 26,070,000 36,230,000 Repurchase of stock (20,000) (31,000) Payment of dividends (404,000) (409,000) [Net cash provided by (used in) financing activities, 3,656,000 15,790,000 Net increase (decrease) in cash and cash equivaents (2784,000) (2,000,000) Cash and cash equivalents, beginning of the war 14,816,000 9,515,000 Cash and cash equival id of period $.11,862900 4 7,515,000