-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, BEj+tAz/5Pnw68+VKYS3TF/aZUltLicz/9tEjjR5mSPM8W0mbvVTVZMb9memtqxd Lvy3B1sSDj/6QdJLiallyg== /in/edgar/work/0001018848-00-000025/0001018848-00-000025.txt : 20001120 0001018848-00-000025.hdr.sgml : 20001120 ACCESSION NUMBER: 0001018848-00-000025 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20001117 FILED AS OF DATE: 20001117 FILER: COMPANY DATA: COMPANY CONFORMED NAME: KEEBLER FOODS CO CENTRAL INDEX KEY: 0001018848 STANDARD INDUSTRIAL CLASSIFICATION: [2052 ] IRS NUMBER: 363839556 STATE OF INCORPORATION: DE FISCAL YEAR END: 1230 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 001-13705 FILM NUMBER: 772412 BUSINESS ADDRESS: STREET 1: 677 LARCH AVE CITY: ELMHURST STATE: IL ZIP: 60126 BUSINESS PHONE: 6308332900 MAIL ADDRESS: STREET 1: 677 LARCH AVE CITY: ELMHURST STATE: IL ZIP: 60126 FORMER COMPANY: FORMER CONFORMED NAME: KEEBLER CORP DATE OF NAME CHANGE: 19960715 10-Q 1 0001.txt Q3'00 FORM 10-Q FOR KEEBLER FOODS COMPANY UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 -------------------- FORM 10-Q (Mark One) |X| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED OCTOBER 7, 2000 OR | | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM TO COMMISSION FILE NUMBER: NO. 001-13705 -------------------- KEEBLER FOODS COMPANY (Exact name of Registrant as specified in its charter) DELAWARE 36-3839556 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 677 LARCH AVE., ELMHURST, IL 60126 (Address of principal executive offices) 630-833-2900 (Registrant's 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 | | NUMBER OF SHARES OF COMMON STOCK, $0.01 PAR VALUE, OUTSTANDING AS OF THE CLOSE OF BUSINESS ON NOVEMBER 14, 2000: 85,016,219. PART I: FINANCIAL INFORMATION ITEM 1: FINANCIAL STATEMENTS KEEBLER FOODS COMPANY CONSOLIDATED BALANCE SHEETS (UNAUDITED) (IN THOUSANDS EXCEPT SHARE AND PER SHARE AMOUNTS)
OCTOBER 7, 2000 January 1, 2000 ------------------ ------------------ ASSETS CURRENT ASSETS: Cash and cash equivalents $ 20,469 $ 20,717 Trade accounts and notes receivable, net 52,367 65,052 Inventories, net: Raw materials 28,120 34,243 Package materials 17,170 13,907 Finished goods 137,273 126,954 Other 2,080 1,176 ------------------ ------------------ 184,643 176,280 Deferred income taxes 34,668 46,252 Other 38,583 27,278 ------------------ ------------------ Total current assets 330,730 335,579 . PROPERTY, PLANT AND EQUIPMENT, NET 610,337 553,031 GOODWILL, NET 527,611 370,188 TRADEMARKS, TRADE NAMES AND OTHER INTANGIBLES, NET 239,177 211,790 PREPAID PENSION 30,914 33,240 ASSETS HELD FOR SALE 1,159 6,662 OTHER ASSETS 17,140 17,693 ------------------ ------------------ Total assets $ 1,757,068 $ 1,528,183 ================== ================== THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONSOLIDATED FINANCIAL STATEMENTS. 2
KEEBLER FOODS COMPANY CONSOLIDATED BALANCE SHEETS (UNAUDITED) (IN THOUSANDS EXCEPT SHARE AND PER SHARE AMOUNTS)
OCTOBER 7, 2000 January 1, 2000 ------------------ ------------------ LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES: Current maturities of long-term debt $ 50,660 $ 37,283 Trade accounts payable 146,750 147,862 Other liabilities and accruals 237,406 237,447 Income taxes payable 1,138 23,603 Plant and facility closing costs and severance 12,232 11,290 ------------------ ------------------ Total current liabilities 448,186 457,485 LONG-TERM DEBT 546,104 419,160 OTHER LIABILITIES: Deferred income taxes 127,544 124,389 Postretirement/postemployment obligations 63,546 64,383 Plant and facility closing costs and severance 7,397 12,062 Deferred compensation 26,312 24,581 Other 20,398 16,808 ------------------ ------------------ Total other liabilities 245,197 242,223 COMMITMENTS AND CONTINGENCIES SHAREHOLDERS' EQUITY: Preferred stock ($.01 par value; 100,000,000 shares authorized and none issued) - - Common stock ($.01 par value; 500,000,000 shares authorized and 86,348,001 and 84,655,874 shares issued, respectively) 863 846 Additional paid-in capital 207,492 182,686 Retained earnings 349,238 255,813 Treasury stock (40,012) (30,030) ------------------ ------------------ Total shareholders' equity 517,581 409,315 ------------------ ------------------ Total liabilities and shareholders' equity $ 1,757,068 $ 1,528,183 ================== ================== THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONSOLIDATED FINANCIAL STATEMENTS. 3
KEEBLER FOODS COMPANY CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) (IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
TWELVE Twelve FORTY Forty WEEKS ENDED Weeks Ended WEEKS ENDED Weeks Ended OCTOBER 7, 2000 October 9, 1999 OCTOBER 7, 2000 October 9, 1999 --------------- --------------- --------------- --------------- NET SALES $ 642,203 $ 615,844 $ 2,111,635 $ 2,055,724 COSTS AND EXPENSES: Cost of sales 254,237 261,244 870,967 899,296 Selling, marketing and administrative expenses 301,752 284,375 983,999 952,066 Other 10,569 7,265 20,797 22,025 Restructuring and impairment charge - - (996) 69,208 --------------- --------------- --------------- --------------- INCOME FROM OPERATIONS 75,645 62,960 236,868 113,129 Interest (income) (1,517) (249) (3,002) (1,190) Interest expense 11,568 7,346 37,189 29,687 --------------- --------------- --------------- --------------- INTEREST EXPENSE, NET 10,051 7,097 34,187 28,497 --------------- --------------- --------------- --------------- INCOME BEFORE INCOME TAX EXPENSE 65,594 55,863 202,681 84,632 Income tax expense 24,644 23,742 80,767 41,204 --------------- --------------- --------------- --------------- NET INCOME $ 40,950 $ 32,121 $ 121,914 $ 43,428 =============== =============== =============== =============== BASIC NET INCOME PER SHARE $ 0.48 $ 0.38 $ 1.44 $ 0.52 WEIGHTED AVERAGE SHARES OUTSTANDING 84,994 83,708 84,365 83,785 DILUTED NET INCOME PER SHARE $ 0.46 $ 0.37 $ 1.39 $ 0.50 WEIGHTED AVERAGE SHARES OUTSTANDING 88,240 87,423 87,728 87,741 THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONSOLIDATED FINANCIAL STATEMENTS. 4
KEEBLER FOODS COMPANY CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (IN THOUSANDS)
FORTY Forty WEEKS ENDED Weeks Ended OCTOBER 7, 2000 October 9, 1999 ------------------ ------------------ CASH FLOWS PROVIDED FROM OPERATING ACTIVITIES Net income $ 121,914 $ 43,428 Adjustments to reconcile net income to cash from operating activities: Depreciation and amortization 72,547 62,651 Deferred income taxes 22,367 (11,018) (Gain) loss on sale of property, plant and equipment (1,623) 249 Gain on sale of value brands assets (5,700) - Restructuring and impairment charge (615) 46,071 Income tax benefit related to stock options exercised 18,875 8,838 Changes in assets and liabilities: Trade accounts and notes receivable, net 10,890 (35,241) Inventories, net (211) (10,853) Income taxes payable (21,329) (4,651) Other current assets (10,202) (7,827) Trade accounts payable and other current liabilities (17,313) 27,016 Plant and facility closing costs and severance (17,592) 11,554 Other, net 2,819 7,622 ------------------ ------------------ Cash provided from operating activities 174,827 137,839 CASH FLOWS USED BY INVESTING ACTIVITIES Capital expenditures (53,174) (68,637) Proceeds from property disposals 8,617 2,833 Purchase of Sesame Street license (10,000) - Proceeds from sale of value brands assets 17,000 - Purchase of Austin Quality Foods, Inc., net of cash acquired (253,797) - ------------------ ------------------ Cash used by investing activities (291,354) (65,804) CASH FLOWS PROVIDED FROM (USED BY) FINANCING ACTIVITIES Purchase of treasury stock (9,982) (21,350) Exercise of employee stock options 5,948 2,741 Proceeds from receivables securitization 13,000 125,000 Long-term debt repayments (34,198) (103,861) Revolving facility, net 170,000 (77,800) Dividends paid (28,489) - ------------------ ------------------ Cash provided from (used by) financing activities 116,279 (75,270) ------------------ ------------------ Decrease in cash and cash equivalents (248) (3,235) Cash and cash equivalents at beginning of period 20,717 23,515 ------------------ ------------------ Cash and cash equivalents at end of period $ 20,469 $ 20,280 ================== ================== THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONSOLIDATED FINANCIAL STATEMENTS. 5
KEEBLER FOODS COMPANY NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED) - -------------------------------------------------------------------------------- 1. BASIS OF PRESENTATION INTERIM FINANCIAL STATEMENTS The unaudited interim consolidated financial statements included herein were prepared pursuant to the rules and regulations for interim reporting under the Securities Exchange Act of 1934. Accordingly, certain information and footnote disclosures normally accompanying the annual financial statements were omitted. The interim consolidated financial statements and notes should be read in conjunction with the annual audited consolidated financial statements and notes thereto. The accompanying unaudited interim consolidated financial statements contain all adjustments, consisting only of normal adjustments, which in the opinion of management were necessary for a fair statement of the results for the interim periods. Results for the interim periods are not necessarily indicative of results for the full year. FISCAL YEAR Keebler's fiscal year consists of thirteen four week periods (fifty-two or fifty-three weeks) and ends on the Saturday nearest December 31. The first quarter consists of four four-week periods. RECLASSIFICATIONS Certain reclassifications of prior period data have been made to conform with the current period reporting. 2. ACQUISITION OF AUSTIN QUALITY FOODS, INC. On March 6, 2000, Keebler Foods Company ("Keebler") acquired Austin Quality Foods, Inc. ("Austin") from R&H Trust Co. (Jersey) Limited, as Trustee, HB Marketing & Franchising L.P., 697163 Alberta Ltd., and William C. Burkhardt, for a purchase price, net of cash acquired, of $253.7 million, excluding related fees and expenses paid of approximately $3.0 million. The acquisition of Austin was a cash transaction funded with approximately $235.0 million from borrowings under the $700.0 million Senior Credit Facility Agreement dated as of September 28, 1998, and the remainder from cash received on additional sales of accounts receivable under Keebler's Receivables Purchase Agreement. The acquisition of Austin by Keebler has been accounted for as a purchase. The total purchase price and the fair value of liabilities assumed have been allocated to the tangible and intangible assets of Austin based on respective fair values. The acquisition has resulted in an unallocated excess purchase price over fair value of net assets acquired of $168.5 million, which is being amortized on a straight-line basis over a forty year period. Results of operations for Austin from March 6, 2000 to October 7, 2000 have been included in the consolidated statements of operations. The following unaudited pro forma information has been prepared assuming the acquisition had taken place at the beginning of each respective fiscal year reported. The unaudited pro forma information includes adjustments for interest expense that would have been incurred related to financing the purchase, additional depreciation of the property, plant and equipment acquired and amortization of the trademarks, trade names, other intangibles and goodwill arising from the acquisition. The unaudited pro forma consolidated results of operations are not necessarily indicative of the results that would have been reported had the Austin acquisition been effected on the first day of the year reported. 6 KEEBLER FOODS COMPANY NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED) 2. ACQUISITION OF AUSTIN QUALITY FOODS, INC. (CONTINUED)
Unaudited (IN THOUSANDS EXCEPT PER SHARE DATA) For the Forty Weeks Ended ------------------------------------ October 7, 2000 October 9, 1999 ----------------- ----------------- Net sales....................................................................... $ 2,139,130 $ 2,217,917 Net income...................................................................... $ 117,478 $ 42,148 Diluted net income per share.................................................... $ 1.35 $ .48
3. ASSETS HELD FOR SALE On May 2, 2000, the Sayreville, New Jersey manufacturing facility, which had been held for sale after its closure, was sold for $7.5 million. The sale resulted in a pre-tax gain of approximately $2.0 million, which was recorded in other income during the first half of the year. Disposition of the remaining assets held for sale is expected to occur within the next thirty-three months without a significant gain or loss. 4. DEBT Long-term debt consisted of the following at October 7, 2000:
(IN THOUSANDS) Interest Rate Final Maturity OCTOBER 7, 2000 ------------------ ----------------------- ------------------ Revolving Facility.................................. 6.845% September 28, 2004 $ 170,000 Term Facility....................................... 6.827% September 28, 2004 287,000 Senior Subordinated Notes........................... 10.750% July 1, 2006 124,400 Other Senior Debt................................... Various 2001-2005 8,840 Capital Lease Obligations........................... Various 2002-2042 6,524 ------------------ 596,764 Less: Current maturities............................ 50,660 ------------------ Total.......................................... $ 546,104 ==================
On March 6, 2000, Keebler utilized existing credit facilities in order to finance the acquisition of Austin. The additional borrowings were under the Revolving Facility, which was originally entered into on September 28, 1998. At October 7, 2000, the outstanding balance on the Revolving Facility was $170.0 million, with an available balance of $180.0 million. 5. RESTRUCTURING AND IMPAIRMENT CHARGE In May of 1999, Keebler closed its manufacturing facility in Sayreville, New Jersey, which resulted in a pre-tax restructuring and impairment charge, in 1999, to operating income of $66.3 million in total. In the second quarter of 2000, the charge was reduced by an adjustment of $1.0 million. The adjustment related to severance and other exit costs from the facility closure due to lower-than-expected severance costs and the earlier-than-expected sale of the facility. The restructuring and impairment charge included $19.2 million for cash costs related to severance and other exit costs from the Sayreville facility. The remaining $46.1 million were non-cash charges for asset impairments related to the Sayreville closing, including write-downs of property, plant and equipment at Sayreville and equipment at other locations, and a proportionate reduction of goodwill acquired in the Sunshine Biscuits, Inc. acquisition in June 1996. Approximately 650 employees were terminated as a result of the closing of the Sayreville facility, of which approximately 600 employees were represented by unions. 7 KEEBLER FOODS COMPANY NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED) 5. RESTRUCTURING AND IMPAIRMENT CHARGE (CONTINUED) The following table sets forth the activity related to the liabilities accrued in conjunction with the restructuring and impairment charge:
(IN THOUSANDS) January 1, 2000 Provision Spending Adjustment OCTOBER 7, 2000 ------------------ ------------ ------------ -------------- ------------------- Severance................. $ 2,037 $ - $ (1,196) $ (140) $ 701 Facility closure.......... 2,567 - (852) (1,556) 159 Other..................... 1,717 - 56 700 2,473 ------------------ ------------ ------------ -------------- ------------------- Total................. $ 6,321 $ - $ (1,992) $ (996) $ 3,333 ================== ============ ============ ============== ===================
At October 7, 2000, $3.2 million remained for plant and facility closing costs and severance accruals and $.1 million for other liabilities and accruals. Only costs related to the settlement of worker's compensation claims (included in other above), and health and welfare payments are expected to extend beyond the year ended December 30, 2000. 6. PLANT AND FACILITY CLOSING COSTS AND SEVERANCE In conjunction with the March 6, 2000 Austin acquisition, Keebler has recognized estimated costs pursuant to a plan to exit certain activities of the acquired company. These exit costs, for which there is no future economic benefit, were provided for in the purchase price allocation and were equal to $14.5 million. Spending equal to $8.8 million has occurred through October 7, 2000. Staff reductions of approximately 80 non-union employees are expected as part of the exit plan. Approximately 75 employees had been terminated at October 7, 2000. The remaining terminations are expected to occur by February 23, 2001. Spending on exit costs is expected to be substantially complete before the end of 2001, with primarily health and welfare payments extending beyond that timeframe. During 1998, as part of acquiring President International, Inc. ("President"), Keebler provided for $12.8 million in exit costs in the allocation of the purchase price. At January 1, 2000, there remained $7.4 million in reserves of which $2.8 million was spent during the first three quarters of 2000. There were 260 employees at January 1, 2000, still expected to be terminated as part of the exit plan, of which approximately 175 were represented by a union. Throughout the first forty weeks of 2000, approximately 150 employees under union contract and approximately 35 employees not under union contract had been terminated. The remaining terminations are scheduled to occur in the fourth quarter of 2000. In the second quarter of the current year, Keebler adjusted accruals previously established in the accounting for the Keebler and Sunshine acquisitions by reducing goodwill and other intangibles by $0.5 million and $1.1 million, respectively, to recognize exit costs that are now expected to be less than initially anticipated. 8 KEEBLER FOODS COMPANY NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED) 6. PLANT AND FACILITY CLOSING COST AND SEVERANCE (CONTINUED) The following table sets forth the activity in Keebler's plant and facility closing costs and severance liabilities exclusive of the liabilities resulting from the restructuring and impairment charge recorded during 1999:
January 1, OCTOBER 7, (IN THOUSANDS) 2000 Provision Spending Adjustment 2000 ------------- ------------ ------------ ------------- ------------- KEEBLER COMPANY Severance................... $ 24 $ - $ - $ - $ 24 Facility closure............ 7,829 - (1,430) (500) 5,899 ------------- ------------ ------------ ------------- ------------- Subtotal................ 7,853 - (1,430) (500) 5,923 ------------- ------------ ------------ ------------- ------------- SUNSHINE BISCUITS, INC. Severance................... $ 63 $ - $ (17) $ - $ 46 Facility closure............ 1,962 - (689) (1,116) 157 ------------- ------------ ------------ ------------- ------------- Subtotal................ 2,025 - (706) (1,116) 203 ------------- ------------ ------------ ------------- ------------- PRESIDENT INTERNATIONAL, INC. Severance................... $ 2,829 $ - $ (2,235) $ - $ 594 Facility closure............ 4,596 - (569) - 4,027 Other....................... 10 - (10) - - ------------- ------------ ------------ ------------- ------------- Subtotal................ 7,435 - (2,814) - 4,621 ------------- ------------ ------------ ------------- ------------- AUSTIN QUALITY FOODS, INC. Severance................... $ - $ 13,979 $ (8,398) $ - $ 5,581 Facility closure............ - 479 (408) - 71 Other....................... - 28 (5) - 23 ------------- ------------ ------------ ------------- ------------- Subtotal................ - 14,486 * (8,811) - 5,675 ------------- ------------ ------------ ------------- ------------- Total................. $ 17,313 $ 14,486 $ (13,761) $ (1,616) $ 16,422 ============= ============ ============ ============= ============= * Recorded as part of the purchase price allocation.
7. SEGMENT INFORMATION Keebler has adopted Statement of Financial Standards No. 131 "Disclosures about Segments of an Enterprise and Related Information" for reporting segment information. Keebler's reportable segments are Branded and Specialty. The reportable segments were determined using Keebler's method of internal reporting, which divides and analyzes the business by sales channel. The nature of the customers, products and method of distribution can vary by sales channel. The reportable segments represent an aggregation of similar sales channels. The Branded segment is comprised of sales channels that principally market brand name cookie and cracker products to retail outlets. Either a Keebler sales employee or a distributor sells products in the Branded segment. The sales channels in the Specialty segment primarily sell cookie, cracker and brownie products that are manufactured on a made-to-order basis or that are produced in individual packs to be used in various institutions (i.e., restaurants, hospitals, etc.), as well as cookies manufactured for the Girl Scouts of the U.S.A. Many of the products sold by the Specialty segment are done so through the use of brokers. 9 KEEBLER FOODS COMPANY NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED) 7. SEGMENT INFORMATION (CONTINUED) Keebler evaluates the performance of the reportable segments and allocates resources based on the segment's profit contribution, defined as earnings before certain functional support costs, amortization, interest and income taxes. While the accounting policies for each reportable segment are the same as for the total company, the cost of sales used to determine a segment's profit contribution is calculated using standard costs for each product, whereas actual cost of sales is used to determine consolidated income from operations. There are no intersegment transactions that result in revenue or profit. Asset information by reportable segment is not presented, as Keebler does not report or generate such information internally. However, depreciation expense included in the determination of a segment's profit contribution has been presented. The depreciation expense for each reportable segment reflects the amount absorbed in the standard cost of products sold, as well as the depreciation that relates to assets used entirely by the respective segment. The following table presents certain information included in the profit contribution of each segment for the twelve weeks ended October 7, 2000 and October 9, 1999 and the forty weeks ended October 7, 2000 and October 9, 1999. Prior year amounts have been restated for reclassifications between reportable segments.
Branded Specialty Segment Segment Other (a) Total --------------- ---------------- ---------------- --------------- (IN THOUSANDS) TWELVE WEEKS ENDED OCTOBER 7, 2000: NET SALES TO EXTERNAL CUSTOMERS............. $ 512,412 $ 129,791 $ - $ 642,203 DEPRECIATION EXPENSE........................ 5,205 2,404 9,475 17,084 PROFIT CONTRIBUTION......................... 92,896 23,108 - 116,004 TWELVE WEEKS ENDED OCTOBER 9, 1999: Net sales to external customers............. $ 479,598 $ 136,246 $ - $ 615,844 Depreciation expense........................ 5,297 2,034 7,673 15,004 Profit contribution......................... 83,362 17,759 - 101,121 FORTY WEEKS ENDED OCTOBER 7, 2000: NET SALES TO EXTERNAL CUSTOMERS............. $ 1,597,553 $ 514,082 $ - $ 2,111,635 DEPRECIATION EXPENSE........................ 19,194 9,216 25,743 54,153 PROFIT CONTRIBUTION......................... 264,305 103,594 - 367,899 FORTY WEEKS ENDED OCTOBER 9, 1999: Net sales to external customers............. $ 1,533,543 $ 522,181 $ - $ 2,055,724 Depreciation expense........................ 15,804 6,275 25,510 47,589 Profit contribution......................... 240,905 90,148 - 331,053 (a) Represents expenses incurred by the functional support departments that are not allocated to the reportable segments.
The net sales to external customers from the reportable segments equal the consolidated net sales of Keebler. A reconciliation of segment profit contribution to total consolidated income from continuing operations before income tax expense for the twelve weeks ended October 7, 2000 and October 9, 1999 and the forty weeks ended October 7, 2000 and October 9, 1999 is as follows: 10 KEEBLER FOODS COMPANY NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED) 7. SEGMENT INFORMATION (CONTINUED)
Twelve Weeks Ended Forty Weeks Ended -------------------------------------- --------------------------------------- OCTOBER 7, 2000 October 9, 1999 OCTOBER 7, 2000 October 9, 1999 ----------------- ----------------- ------------------ ----------------- (IN THOUSANDS) INCOME BEFORE INCOME TAX EXPENSE: Reportable segment's profit contribution.... $ 116,004 $ 101,121 $ 367,899 $ 331,053 Unallocated functional support costs (b).... 40,359 38,161 132,027 148,716 Restructuring and impairment charge......... - - (996) 69,208 Interest expense, net....................... 10,051 7,097 34,187 28,497 ----------------- ----------------- ------------------ ----------------- Income before Income Tax Expense......... $ 65,594 $ 55,863 $ 202,681 $ 84,632 ================= ================= ================== ================= (b) Includes support costs such as distribution, research and development, corporate administration and other (income) expense, which are not allocated internally to reportable segments.
8. SALE OF VALUE BRANDS ASSETS On January 4, 2000, Keebler sold its Birmingham, Alabama, and North Little Rock, Arkansas bakeries and the SUNNY and GREGS brands to Consolidated Biscuit Company. As a result of the sale, Keebler recorded a $5.7 million pre-tax gain in other income during the first quarter of 2000. 9. INCOME TAXES During the quarter, Keebler decreased the annual effective tax rate from 41.0% to 39.8%. The effective tax rate declined due to increased earnings, the adoption of a change in the tax basis of the assets acquired and liabilities assumed in the Keebler acquisition, in accordance with the Internal Revenue Code Section 338, and a satisfactory resolution of certain income tax contingencies. Partially offsetting the reduction in the effective tax rate was the increase in intangible amortization expense as a result of the Austin acquisition. The effective tax rate remains above the federal statutory rate due to nondeductible expenses, primarily the amortization of intangibles, resulting from the Sunshine, President and Austin acquisitions. 10. SUBSEQUENT EVENTS On October 26, 2000, Kellogg Company announced it reached an agreement to acquire Keebler Foods Company in a transaction entered into with Keebler and with Flowers Industries, Inc., the majority shareholder of Keebler. Completion of the merger is subject to customary closing conditions and regulatory approvals. There can be no assurance that such approvals will be obtained. The transaction is expected to close during the first quarter of 2001. On November 7, 2000, the Board of Directors of Keebler declared a quarterly cash dividend of $0.1125 per common share payable on December 20, 2000, to stockholders of record on December 6, 2000. 11 ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS OVERVIEW MATTERS AFFECTING COMPARABILITY The following discussion of the financial condition and results of operations for the twelve and forty weeks ended October 7, 2000 and October 9, 1999 should be read in conjunction with Keebler's 1999 annual report on Form 10-K filed with the Securities and Exchange Commission on March 20, 2000. Keebler's operating results for the forty weeks ended October 7, 2000, include the operating results of Austin Quality Foods, Inc. ("Austin") from the acquisition date of March 6, 2000, whereas the comparable period ended October 9, 1999, does not. Keebler's operating results for the forty weeks ended October 7, 2000, do not include the operating results of the Birmingham, Alabama, and North Little Rock, Arkansas bakeries and the SUNNY and GREGS brands ("the value brands business"), as these brands were sold to Consolidated Biscuit Company on January 4, 2000. The comparable forty weeks ended October 9, 1999, includes the operating results of the value brands business. RESULTS OF OPERATIONS Results of operations expressed as a percentage of net sales for the twelve and forty weeks ended October 7, 2000 and October 9, 1999 are set forth below:
Twelve Weeks Ended Forty Weeks Ended -------------------------------------- ------------------------------------ October 7, 2000 October 9, 1999 October 7, 2000 October 9, 1999 ------------------ ------------------- ----------------- ------------------ NET SALES......................................... 100.0% 100.0% 100.0% 100.0% Cost of sales..................................... 39.6 42.4 41.2 43.7 Selling, marketing and administrative expenses.... 47.0 46.2 46.6 46.3 Restructuring and impairment charge............... - - - 3.4 INCOME FROM OPERATIONS............................ 11.8 10.2 11.2 5.5 Interest Expense, net............................. 1.6 1.1 1.6 1.4 NET INCOME........................................ 6.4% 5.2% 5.8% 2.1%
Keebler's reportable segments are Branded and Specialty, which were determined using Keebler's method of internal reporting, which divides and analyzes the business by sales channel. The reportable segments represent an aggregation of similar sales channels. We evaluate the performance of the reportable segments and allocate resources based on the segment's profit contribution, defined as earnings before certain functional support costs, amortization, interest and income taxes. While the accounting policies for each reportable segment are the same as for the total company, the cost of sales used to determine a segment's profit contribution is calculated using standard costs for each product, whereas actual cost of sales is used to determine consolidated income from operations. Prior year numbers have been restated for reclassifications between reportable segments. 12 BRANDED SEGMENT The Branded segment sells a number of well-recognized products, primarily to retail outlets such as supermarkets, mass merchandisers, warehouse club stores, convenience stores and drug stores. This segment also imports and distributes CARR'S crackers in the U.S. under an exclusive long-term licensing and distribution agreement with United Biscuits.
Twelve Weeks Ended Forty Weeks Ended ------------------------------------------ ----------------------------------------- October 7, 2000 October 9, 1999 October 7, 2000 October 9, 1999 --------------------- -------------------- -------------------- -------------------- ($ IN MILLIONS) $ % $ % $ % $ % ---------- ---------- --------- ---------- --------- ---------- ---------- --------- NET SALES........................... $ 512.4 $ 479.6 $1,597.6 $1,533.5 PROFIT CONTRIBUTION................. $ 92.9 18.1% $ 83.4 17.4% $ 264.3 16.5% $ 240.9 15.7%
Net sales in the Branded segment for the twelve weeks ended October 7, 2000 grew 6.8% over the year-earlier quarter to $512.4 million and year-to-date net revenues of $1,597.6 million exceeded the comparable period of 1999 by 4.2%. The acquisition of Austin accounted for $37.4 million and $92.6 million of the total increase in net sales for the twelve and forty weeks ended October 7, 2000, respectively. Also impacting comparisons for the third quarter and year-to-date period was the sale of the value brands business, which contributed $8.1 million and $34.3 million of revenues for the twelve and forty weeks ended October 9, 1999, respectively. Excluding the effect of current year Austin revenues and net sales recorded by the value brands business in the prior year, net sales for the quarter and year-to-date period ended October 7, 2000 grew $3.5 million and $5.7 million, respectively, as compared to the similar periods of the previous year. Growth in the current quarter was driven by volume gains in core Keebler brand cookie and cracker products, sales of new products and distribution points added in the national rollout of FAMOUS AMOS and MURRAY SUGAR FREE. New products in the current quarter included the rollout of the SESAME STREET line. These revenue gains versus the prior year quarter were partially offset by declines in secondary cookie brands, which were limited by competitive activity. For the forty weeks ended October 7, 2000, the primary drivers of the net sales growth as compared to the prior year included new product introductions, greater distribution of FAMOUS AMOS and MURRAY SUGAR FREE cookies, and retail business outside supermarkets, including mass merchandisers and convenience channels. New products contributing to the overall growth for the year were SESAME STREET cookies and crackers, also HARVEST BAKERY, WHEATABLES SNACK MIX and SNAX STIX. Revenue growth for the year was constrained by competitive activity and the impact of product culls on certain secondary brand products. For the twelve and forty weeks ended October 7, 2000, profit contribution in the Branded segment was $92.9 million, or 18.1% of net sales, and $264.3 million, or 16.5% of net sales, respectively. The increase in profit contribution for both the third quarter and year-to-date was attributed to a higher gross margin achieved on KEEBLER and CHEEZ-IT core products and incremental Austin sales volume, combined with productivity enhancements and cost savings at our bakeries. Higher gross margins were the result of a favorable sales mix, which included increased revenues from higher margin core products. Cost savings were achieved through favorable commodity and packaging costs as well as capital programs to improve efficiency and increase capacity. Partially offsetting these gains were volume declines, primarily due to the loss of the value brands business. Higher marketing expenses, due to increased support behind the SESAME STREET launch, also partly offset the increase in profit contribution. 13 SPECIALTY SEGMENT The Specialty segment produces cookies, crackers and brownies for the foodservice market and private label retailers. In addition, we also produce custom-baked products for other marketers of branded food products, including sales of cookies to the Girl Scouts of the U.S.A.
Twelve Weeks Ended Forty Weeks Ended ------------------------------------------ ----------------------------------------- October 7, 2000 October 9, 1999 October 7, 2000 October 9, 1999 --------------------- -------------------- -------------------- -------------------- ($ IN MILLIONS) $ % $ % $ % $ % ---------- ---------- --------- ---------- --------- ---------- ---------- --------- NET SALES.......................... $ 129.8 $ 136.2 $ 514.1 $ 522.2 PROFIT CONTRIBUTION................ $ 23.0 17.7% $ 17.8 13.1% $ 103.4 20.1% $ 90.2 17.3%
The Specialty segment recorded net sales of $129.8 million and $514.1 million for the respective quarter and year-to-date ended October 7, 2000. Revenues for the twelve and forty weeks ended October 7, 2000 fell short of the comparable periods of a year ago by $6.4 million and $8.1 million, respectively. Volume declines of custom-baked products for other marketers of branded products, as well as on-going losses experienced in the private label industry drove the majority of the unfavorability in the Specialty segment. Overall sales shortages were partially offset by revenue growth in the foodservice market, which was mainly due to continued growth in specialty crackers, and increased sales of both Grab 'n Go products and ice cream cones. The inclusion of Austin contributed incremental sales of $8.8 million and $17.3 million, or 6.8% and 3.4%, as a percent of net sales, to the respective twelve and forty week periods. Profit contribution for the Specialty segment of $23.0 million and $103.4 million finished the twelve and forty weeks ended October 7, 2000, $5.3 million and $13.3 million ahead of the comparable periods of the prior year. Excluding Austin, Keebler's profit contribution closed 4.6 and 3.0 percentage points, as a percentage of net sales, higher than the same twelve and forty week periods of last year, respectively. The primary contributor to the favorable profit contribution was a focus shift to higher margin products, which also carry a lower cost of goods sold in dollars spent, as well as a percentage of net sales. Additional improvements were also noted by the introduction of more efficient cost saving programs. COST OF SALES Cost of sales for the twelve weeks ended October 7, 2000, was $254.2 million, or 39.6% of net sales, compared to $261.2 million, or 42.4% of net sales, in the comparable quarter of the prior year. Year-to-date cost of sales for the forty weeks ended October 7, 2000 was $871.0 million, or 41.2% of net sales, versus $899.3 million, or 43.7% of net sales, for the year-earlier period. Before including the sale of Austin products, cost of sales, as a percentage of net sales, was 38.8% and 40.3% for the twelve and forty weeks ended October 7, 2000, respectively. Cost of sales in both the third quarter and year-to-date periods benefited from savings generated from productivity and efficiency initiatives as well as other cost reduction programs. Favorable raw material prices continued to benefit the quarter, as has been trended throughout the forty weeks ended October 7, 2000. Reduced sales of contract packaged products, and private label and value products also contributed to lower cost of sales. In addition, cost of sales improvements can be attributed to a favorable shift in the overall business mix to both higher margin products and channels of distribution. These aforementioned factors more than offset the increase to cost of sales resulting from the inclusion of Austin subsequent to its acquisition. SELLING, MARKETING AND ADMINISTRATIVE EXPENSES Selling, marketing and administrative expenses for the twelve and forty weeks ended October 7, 2000 totaled $301.8 million and $984.0 million, respectively. This contributed to a $17.4 million and $31.9 million increase over the respective quarter and year-to-date periods of a year ago. Higher selling, marketing and administrative expenses were mainly due to the inclusion of Austin activity. Excluding Austin, selling, marketing and administrative expenses finished 3.1 and 1.5 percentage points, as a percentage of net sales, higher than the comparable quarter and year-to-date periods of last year, respectively. Marketing spending was up slightly due to additional support for the launch of the Sesame Street product line. Increased selling and distribution 14 expense was due to transition expenses related to the conversion costs of certain non-core independent distributor routes acquired in the President acquisition into Keebler's direct store door delivery system and also higher fuel costs. OTHER Other expense for the quarter and year-to-date ended October 7, 2000 was $10.6 million and $20.8 million, respectively. For the twelve weeks ended October 7, 2000, other expense exceeded the comparable period of last year by $3.3 million. The 45.5% increase was primarily driven by higher amortization resulting from intangibles recorded in the Austin acquisition, and on entering into a licensing agreement for the right to market cookies and crackers under the Sesame Street name. Also contributing to the increased expense were higher costs related to the Receivables Purchase Agreement and increased bank fees. Other expense finished the forty weeks ended October 7, 2000, by $1.2 million favorable to the same period of a year ago. The primary contributor to the 5.6% improvement were the pre-tax gains totaling $7.7 million realized in the sale of the value brands business and recognition of the sale of the Sayreville manufacturing facility. These gains more than offset increased expense for amortization, costs of the receivables securitization, and higher bank fees. RESTRUCTURING AND IMPAIRMENT CHARGE In May of 1999, Keebler closed its manufacturing facility in Sayreville, New Jersey, which resulted in a pre-tax restructuring and impairment charge to income from operations of $66.3 million. In the second quarter of 2000 the charge was reduced by an adjustment of $1.0 million. The adjustment was for costs related to severance and other exit costs from the facility due to lower-than-expected severance costs and the earlier-than-expected sale of the facility. On May 2, 2000, the Sayreville, New Jersey facility was sold. The restructuring and impairment charge included $19.2 million for cash costs related to severance and other exit costs from the Sayreville facility. The remaining $46.1 million were non-cash charges for asset impairments related to the Sayreville closing, including write-downs of property, plant and equipment at Sayreville and equipment at other locations, and a proportionate reduction of goodwill acquired in the Sunshine Biscuits, Inc. ("Sunshine") acquisition in June 1996. Of the total $65.3 million charge, approximately $64.6 million was recorded as plant and facility closing costs and severance. The remaining $0.7 million was recorded as other liabilities and accruals. Approximately 650 total employees were terminated as a result of the closing of the Sayreville facility, of which approximately 600 employees were represented by unions. At October 7, 2000, $3.2 million remained for plant and facility closing costs and severance accruals and $0.1 million for other liabilities and accruals. Only costs related to the settlement of workers' compensation claims and health and welfare payments are expected to extend beyond the year ended December 30, 2000. The amount of suspended depreciation and amortization that would have been recognized for the forty weeks ended October 7, 2000, if the prior year impairments had not been recognized, was approximately $4.2 million. INTEREST EXPENSE, NET For the quarter and year-to-date ended October 7, 2000, net interest expense of $10.1 million and $34.2 million, respectively, exceeded the comparable periods of last year by $3.0 million and $5.7 million. The respective 41.6% and 20.0% increases of expense for the twelve and forty-week periods were primarily related to the incremental debt incurred during the first quarter of 2000 in order to finance the Austin acquisition. Outstanding debt at October 7, 2000, was $123.9 million higher than the amount outstanding at October 9, 1999. Also contributing to the additional expense over last year was an increase in the weighted average interest rate versus the same periods of a year ago. INCOME TAX EXPENSE Income tax expense of $24.6 million and $80.8 million for the respective twelve and forty weeks ended October 7, 2000, increased over the same periods of last year by $0.9 million and $39.6 million, respectively. Higher taxable earnings primarily resulted in the higher income tax expense. A lower effective tax rate of 39.8% versus 42.5% in 1999 partially offset the higher earnings impact. The effective tax rate declined due to increased earnings, the adoption of a change in the tax basis of the assets acquired and liabilities assumed in the Keebler acquisition, in accordance with the Internal Revenue Code Section 338, and a satisfactory resolution of certain income tax contingencies. Partially offsetting the reduction in the effective tax rate was the increase in intangible amortization expense as a result of the Austin acquisition. The effective tax rate remains above the federal statutory rate due to nondeductible expenses, primarily the amortization of intangibles, resulting from the Sunshine, President and Austin acquisitions. 15 NET INCOME Net income for the quarter ended October 7, 2000 was $41.0 million or $8.8 million higher than the comparable twelve weeks of last year. Net income for the forty weeks ended October 7, 2000 of $121.9 million surpassed prior year results by $78.5 million. On a year-to-date basis and before considering the effects of restructuring and impairment adjustments, net income finished $32.8 million greater than prior year earnings. The growth in net income over the comparable twelve and forty-week periods of last year was primarily driven by the strength of sales growth in our core branded business and margin expansion through both the successful integration of the Austin acquisition into the Keebler business, and the benefits from productivity and cost reduction programs. LIQUIDITY AND CAPITAL RESOURCES For the forty weeks ended October 7, 2000, cash provided from operating activities totaled $174.8 million. Year-to-date net earnings of $121.9 million combined with a $10.9 million decrease in trade accounts and notes receivable, were the primary drivers of the positive cash flow. The reduced receivable balance was due to improved cash collections as compared to the prior year in addition to higher utilization of off-balance sheet financing. Also contributing to the cash flow was the $18.9 million tax benefit on stock options exercised. Partly offsetting these positive cash resources were lower trade accounts payable and other current liabilities of $17.3 million due to disbursement timing and spending of $17.6 million for plant and facility closing costs and severance. Cash used by investing activities for the year totaled $291.4 million, with $253.8 million, net of cash acquired, used to fund the acquisition of Austin during the first quarter. Other investing activities included the $10.0 million purchase of a Sesame Street license agreement. Year-to-date capital spending of $53.2 million was used to enhance, upgrade and automate the existing production and distribution facilities as part of capacity improvements and cost reduction programs. Slightly offsetting these uses of cash were proceeds of $25.6 million received from disposals of assets. The sale of the value brands business and the sale of the Sayreville facility combined for $24.5 million of the proceeds received during the year. Financing activities during the first forty weeks of 2000 provided $116.3 million of cash. The increase mainly resulted from proceeds from borrowings of long-term debt under the Revolving facility in connection with the acquisition of Austin. Also contributing to the cash flow from financing activities during the year was $13.0 million of incremental proceeds from the sale of accounts receivable under the Receivables Purchase Agreement and $5.9 million of cash generated from the exercise of employee stock options. Offsetting these positive cash flows were scheduled debt repayments of $34.2 million, dividend payments of $28.5 million and common stock purchases into treasury totaling $10.0 million. As of October 7, 2000, cash and cash equivalents were $20.5 million and total debt outstanding was $596.8 million, of which current maturities were $50.7 million. Available borrowings under Keebler's Revolving facility were $350.0 million, of which $170.0 million was outstanding at October 7, 2000. All financial covenants contained in the financing agreements have been met by Keebler. Available cash, as well as existing credit facilities, are expected to be sufficient to meet normal operating requirements for the foreseeable future. NEW ACCOUNTING PRONOUNCEMENTS In May 2000, the Emerging Issues Task Force (EITF) of the Financial Accounting Standards Board reached consensus on Issue No. 00-14 "Accounting for Certain Sales Incentives". This Issue addresses the recognition, measurement, and income statement classification of sales incentives offered by vendors (including manufacturers) that have the effect of reducing the price of a product or service to a customer at the point of sale. For cash sales incentives within the scope of this Issue, costs are generally recognized at the date on which the related revenue is recorded and is to be classified as a reduction of revenue. The effect of adoption resulting from changes in classification will require restatement of prior year financial statements. EITF 00-14 is expected to impact how the Company classifies certain marketing costs. Management is currently assessing the impact of this guidance. 16 In June 2000, the Financial Accounting Standards Board ("FASB") issued the Statement of Financial Accounting Standards No. 138, "Accounting for Certain Derivative Instruments and Certain Hedging Activities," an amendment of FASB Statement No. 133. FASB Statement No. 133, "Accounting for Derivative Instruments and Hedging Activities," establishes accounting and reporting standards for derivative instruments, including certain derivative instruments embedded in other contracts, and for hedging activities. FASB Statement No. 138 addresses a limited number of issues causing implementation difficulties for numerous entities that apply FASB Statement No. 133. FORWARD-LOOKING STATEMENTS Certain statements incorporated by reference or made in this discussion are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 (the "Reform Act"). These statements are subject to the safe harbor provisions of the Reform Act. Such forward-looking statements include, without limitation, statements about: o sales trends o the competitiveness of the cookie and cracker industry; o the future availability and prices of raw and packaging materials; o potential regulatory obligations; o our strategies and o other statements that are not historical facts. When used in this discussion, the words "anticipate," "believe," "estimate," "expect" and similar expressions are generally intended to identify forward-looking statements. Because such forward-looking statements involve risks and uncertainties, there are important factors that could cause actual results to differ materially from those expressed or implied by such forward-looking statements, including, but not limited to: o changes in general economic or business conditions (including in the cookie and cracker industry); o actions of customers and competitors; o our ability to recover material costs in the pricing of our products; o the extent to which we are able to successfully develop new products and markets for our products; o the time required for such development; o the level of demand for such products and o changes in our business strategies. ITEM 3: QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK The principal market risks to which we are exposed that may adversely affect results of operations and financial position include changes in future interest rates and raw material prices. We seek to minimize or manage these market risks through normal operating and financing activities and through the use of interest rate swap agreements and commodity futures and options contracts. The use of these instruments is limited to hedging activities and they are not entered for trading or speculative purposes. These agreements and contracts are entered into at a corporate level and as such, any income or expense associated with these transactions is not allocated to our reportable segments. Our exposure to market risk for changes in interest rates relates primarily to long-term debt obligations. Our current debt structure consists of both fixed and floating rate debt. Interest rate swap agreements are used to effectively manage changes in interest rates related to the majority of our borrowings with the objective of reducing overall interest costs. Sensitivity analysis was used to assess the impact that changes in market prices have on the fair value of interest rate swap agreements at year end. The fair value of the interest rate swap agreements at October 7, 2000, with a notional amount of $316.5 million, remains comparable to year end. Additionally, interest rates have not fluctuated materially from year end and therefore, the sensitivity analysis performed as of January 1, 2000 for interest rate swap agreements remains a valid estimate. We enter into commodity futures and options contracts to neutralize the impact of price increases on raw material purchases that are not likely to be recovered through higher prices on our products. We also used sensitivity analysis to assess the potential impact on the fair value of commodity futures and options contracts. Assuming a ten percent increase or decrease in market price, the fair value of open contracts with a notional amount of $.1 million at October 7, 2000 would not be significantly impacted. 17 PART II: OTHER INFORMATION ITEM 6: EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits Exhibit NUMBER DESCRIPTION ------- ----------- 27 Financial Data Schedule 18 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. KEEBLER FOODS COMPANY (Registrant) /s/ Sam K. Reed ------------------------------------------------------ Sam K. Reed President, Chief Executive Officer and Director Date: November 17, 2000 /s/ E. Nichol McCully ------------------------------------------------------ E. Nichol McCully Senior Vice President and Chief Financial Officer (Principal Financial Officer) Date: November 17, 2000 /s/ James T. Spear ------------------------------------------------------ James T. Spear Vice President Finance and Corporate Controller (Principal Accounting Officer) Date: November 17, 2000 19 EX-27 2 0002.txt FINANCIAL DATA SCHEDULE
5 This legend contains summary financial information extracted from the Keebler Foods Company Consolidated Balance Sheet at October 7, 2000 and the Consolidated Statement of Operations for the forty weeks ended October 7, 2000 found on pages 2 through 4 of Keebler's Form 10-Q and is qualified in its entirety by reference to such financial statements. 0001018848 Keebler Foods Company 1,000 10-MOS DEC-30-2000 JAN-2-2000 OCT-7-2000 20,469 0 60,181 7,814 184,643 330,730 758,126 147,789 1,757,068 448,186 546,104 0 0 863 516,718 1,757,068 2,111,635 2,111,635 870,967 1,853,970 20,797 17,436 34,187 202,681 80,767 121,914 0 0 0 121,914 1.44 1.39
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