-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, ZIuayiJC+2CawLlQr44Q0t1GzvPodWvS3BYrdx4WKhHaDGsFYUQgcJEihYxq69Fg N6cN7d4rTm93DDtuS8u6wQ== 0000893220-94-000497.txt : 19941215 0000893220-94-000497.hdr.sgml : 19941215 ACCESSION NUMBER: 0000893220-94-000497 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19941030 FILED AS OF DATE: 19941214 SROS: NYSE SROS: PHLX FILER: COMPANY DATA: COMPANY CONFORMED NAME: CAMPBELL SOUP CO CENTRAL INDEX KEY: 0000016732 STANDARD INDUSTRIAL CLASSIFICATION: FOOD & KINDRED PRODUCTS [2000] IRS NUMBER: 210419870 STATE OF INCORPORATION: NJ FISCAL YEAR END: 0729 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-03822 FILM NUMBER: 94564798 BUSINESS ADDRESS: STREET 1: CAMPBELL PL CITY: CAMDEN STATE: NJ ZIP: 08103 BUSINESS PHONE: 6093424800 MAIL ADDRESS: STREET 1: CAMPBELL PL CITY: CAMDEN STATE: NJ ZIP: 08103 10-Q 1 FORM 10-Q, CAMPBELL SOUP COMPANY 1 ======================================================================= SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarterly Period Ended Commission File Number October 30, 1994 1-3822 [CAMPBELL SOUP COMPANY LOGO] NEW JERSEY 21-0419870 State of Incorporation I.R.S. Employer Identification No. CAMPBELL PLACE CAMDEN, NEW JERSEY 08103-1799 Principal Executive Offices TELEPHONE NUMBER: (609) 342-4800 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 . ------ THERE WERE 248,714,023 SHARES OF CAPITAL STOCK OUTSTANDING AS OF DECEMBER 1, 1994. THIS FORM 10-Q CONSISTS OF A TOTAL OF 13 PAGES, INCLUDING EXHIBITS. AN INDEX TO EXHIBITS IS ON PAGE 12. ======================================================================= -1- 2 PART I. FINANCIAL INFORMATION CAMPBELL SOUP COMPANY CONSOLIDATED STATEMENTS OF EARNINGS (unaudited) (million dollars except per share amounts)
Three Months Ended --------------------------------- OCTOBER October 30, 1994 31, 1993 --------- ---------- Net sales $1,864 $1,763 - ----------------------------------------------------------------------------------- Costs and expenses Cost of products sold 1,088 1,058 Marketing and selling expenses 339 320 Administrative expenses 78 73 Research and development expenses 19 18 Other expense 17 14 - ----------------------------------------------------------------------------------- Total costs and expenses 1,541 1,483 - ----------------------------------------------------------------------------------- Earnings before interest and taxes 323 280 Interest, net 26 19 - ----------------------------------------------------------------------------------- Earnings before taxes 297 261 Taxes on earnings 100 95 - ----------------------------------------------------------------------------------- Net earnings $ 197 $ 166 =================================================================================== Per share Net earnings $.79 $.66 =================================================================================== Dividends $.28 $.25 =================================================================================== Weighted average shares outstanding 249 251 ===================================================================================
(d) Divestiture and Restructuring Program On January 28, 1993, the company's Board of Directors approved a divestiture and restructuring program which specifically identified six manufacturing plants to be closed and fourteen businesses to be sold. At the time of the Board's approval, charges of $353 ($300 after tax or $1.19 per share) were recorded for the estimated loss on disposition of plant assets, cost of closing each plant and loss on each business divestiture. During the first quarter of 1995, one business was sold. A summary of the original reserve and charges through October 30, 1994 is as follows:
Original Balance BALANCE Reserve Charges 7/31/94 Charges 10/30/94 -------- ------- ------- ------- -------- Loss on disposal of assets $275 $(145) $130 $(2) $128 Severance and benefits 52 (28) 24 (3) 21 Other 26 (10) 16 -- $16 - ---------------------------------------------------------------------------------------------- Total $353 $(183) $170 $(5) $165 ============================================================================================== Current $153 $170 $165 Non-current 200 -- -- - ---------------------------------------------------------------------------------------------- Total $353 $170 $165 ==============================================================================================
See Notes To Financial Statements -2- 3 CAMPBELL SOUP COMPANY CONSOLIDATED BALANCE SHEETS (unaudited) (million dollars)
OCTOBER July 30,1994 31, 1994 ------- -------- Current assets Cash and cash equivalents $ 88 $ 94 Other temporary investments, at cost which approximates market 14 2 Accounts receivable 783 578 Inventories 888 786 Prepaid expenses 157 141 - ---------------------------------------------------------------------------------------- Total current assets 1,930 1,601 - ---------------------------------------------------------------------------------------- Plant assets, net of depreciation 2,462 2,401 Intangible assets, net of amortization 681 582 Other assets 456 408 - ---------------------------------------------------------------------------------------- Total assets $5,529 $4,992 ======================================================================================== Current liabilities Notes payable $ 644 $ 434 Payable to suppliers and others 491 473 Accrued liabilities 626 570 Dividend payable 71 71 Accrued income taxes 169 117 - ---------------------------------------------------------------------------------------- Total current liabilities 2,001 1,665 - ---------------------------------------------------------------------------------------- Long-term debt 574 560 Nonpension postretirement benefits 411 402 Other liabilities, including deferred income taxes of $217 and $211 388 376 - ---------------------------------------------------------------------------------------- Total liabilities 3,374 3,003 - ---------------------------------------------------------------------------------------- Shareowners' equity Preferred stock; authorized 40 shares; none issued - - Capital stock, $.075 par value; authorized 280 shares; issued 271 shares 20 20 Capital surplus 159 155 Earnings retained in the business 2,487 2,359 Capital stock in treasury, at cost (555) (559) Cumulative translation adjustments 44 14 - ---------------------------------------------------------------------------------------- Total shareowners' equity 2,155 1,989 - ---------------------------------------------------------------------------------------- Total liabilities and shareowners' equity $5,529 $4,992 ========================================================================================
See Notes to Financial Statements -3- 4 CAMPBELL SOUP COMPANY CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) (million dollars)
Three Months Ended ------------------------------ OCTOBER October 30, 1994 31, 1993 -------- ---------- Cash flows from operating activities: Net earnings $197 $166 Non-cash charges: Depreciation and amortization 63 61 Deferred taxes - 3 Other 24 18 Net change in accounts receivable (188) (161) Net change in inventories (94) (121) Net change in other current assets and liabilities 88 37 - -------------------------------------------------------------------------------------------------- Net cash provided by operating activities 90 3 - -------------------------------------------------------------------------------------------------- Cash flows from investing activities: Purchases of plant assets (60) (83) Sales of plant assets 3 7 Businesses acquired (177) (8) Sales of businesses 3 - Net change in other assets 4 13 Net change in other temporary investments (12) 2 - -------------------------------------------------------------------------------------------------- Net cash used in investing activities (239) (69) - -------------------------------------------------------------------------------------------------- Cash flows from financing activities: Issuance of long-term debt 3 100 Reductions in long-term debt (4) (101) Net change in borrowings with less than three-month maturities 149 170 Other short-term borrowings 55 (19) Dividends paid (70) (63) Treasury stock purchased - (41) Treasury stock issued 5 3 - -------------------------------------------------------------------------------------------------- Net cash provided by financing activities 138 49 - -------------------------------------------------------------------------------------------------- Effect of exchange rate changes on cash 5 2 - -------------------------------------------------------------------------------------------------- Net change in cash and cash equivalents (6) (15) Cash and cash equivalents - beginning of period 94 63 - -------------------------------------------------------------------------------------------------- Cash and cash equivalents - end of period $ 88 $ 48 ==================================================================================================
See Notes to Financial Statements -4- 5 CAMPBELL SOUP COMPANY CONSOLIDATED STATEMENTS OF CHANGES IN SHAREOWNERS' EQUITY (unaudited) (million dollars)
Earnings Capital Retained Stock Cumulative Total Preferred Capital Capital in the in Translation Shareowners' Stock Stock Surplus Business Treasury Adjustments Equity --------- ------- ------- -------- --------- ----------- ----------- Balance at August 1, 1993 $ - $20 $149 $2,002 $(428) $(39) $1,704 Net earnings 166 166 Cash dividends ($.25 per share) (62) (62) Treasury stock purchased (41) (41) Treasury stock issued under Management incentive and Stock option plans (6) 12 6 Translation adjustments (14) (14) - ----------------------------------------------------------------------------------------------------------------------------------- Balance at October 31, 1993 $ - $20 $143 $2,106 $(457) $(53) $1,759 =================================================================================================================================== BALANCE AT JULY 31, 1994 $ - $20 $155 $2,359 $(559) $14 $1,989 NET EARNINGS 197 197 CASH DIVIDENDS ($.28 PER SHARE) (69) (69) TREASURY STOCK PURCHASED (1) (1) TREASURY STOCK ISSUED UNDER MANAGEMENT INCENTIVE AND STOCK OPTION PLANS 4 5 9 TRANSLATION ADJUSTMENTS 30 30 - ----------------------------------------------------------------------------------------------------------------------------------- BALANCE AT OCTOBER 30, 1994 $ - $20 $159 $2,487 $(555) $44 $2,155 ===================================================================================================================================
Changes in Number of Shares (unaudited) (thousands of shares) - ----------------------------------------------------------------------------------------------------------------------------------- In Issued Outstanding Treasury ------ ----------- -------- Balance at August 1, 1993 271,245 251,706 19,539 Treasury stock purchased (1,139) 1,139 Treasury stock issued under Management incentive and Stock option plans 368 (368) - ----------------------------------------------------------------------------------------------------------------------------------- Balance at October 31, 1993 271,245 250,935 20,310 =================================================================================================================================== BALANCE AT JULY 31, 1994 271,245 248,319 22,926 TREASURY STOCK PURCHASED (12) 12 TREASURY STOCK ISSUED UNDER MANAGEMENT INCENTIVE AND STOCK OPTION PLANS 197 (197) - ----------------------------------------------------------------------------------------------------------------------------------- BALANCE AT OCTOBER 30, 1994 271,245 248,504 22,741 ===================================================================================================================================
See Notes to Financial Statements -5- 6 CAMPBELL SOUP COMPANY CONSOLIDATED NOTES TO FINANCIAL STATEMENTS (unaudited) (millions) (a) The financial statements reflect all adjustments which are, in the opinion of management, necessary for a fair presentation of the results for the indicated periods. All such adjustments are of a normal recurring nature. (b) Net earnings per share are based on the weighted average shares outstanding during the applicable periods. The potential dilution from the exercise of stock options is not material. (c) Inventories
OCTOBER July 30, 1994 31, 1994 -------- -------- Raw materials, containers and supplies $392 $368 Finished products 564 483 - ------------------------------------------------------------------------------------ 956 851 Less - Adjustment of certain inventories to LIFO basis 68 65 - ------------------------------------------------------------------------------------ $888 $786 ====================================================================================
-6- 7 MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION CAMPBELL SOUP COMPANY RESULTS OF OPERATIONS OVERVIEW Campbell had record sales and earnings for the first quarter ended October 30. Net sales of $1.86 billion were up 6% over the $1.76 billion for the similar period last year, and sales of ongoing businesses were up 7%. Earnings per share increased 20% to 79 cents, up from 66 cents last year. Net earnings were $197 million, up 19% from $166 million last year. U.S. businesses performed strongly, and international businesses continued on a fast pace. Worldwide soup sales were up over 5%. RESULTS BY DIVISION Results by division for fiscal 1994 have been restated to conform with new operating groups. FIRST QUARTER U.S.A. - U.S. sales for the quarter were $1.12 billion versus $1.07 billion for the comparable period last year. Sales of ongoing businesses were up 6%. Operating earnings climbed 16% to $259 million, a $36 million increase over last year. Soup shipments to the trade declined 2.5%, as the U.S. soup unit continued its program, begun in the second quarter of fiscal 1994, to eliminate costly peaks in its manufacturing and shipping cycles. The "Ready-to-Serve" business, however, saw volume growth led by strong performance in "Home Cookin'" and "Healthy Request" soups. Strong volume gains were achieved by a number of products, including "Swanson" traditional frozen dinners, pot pies and canned poultry, "Great Starts" breakfasts, "Prego" spaghetti sauce, "Franco-American" pasta, "V8" vegetable juice and "Vlasic" pickles. BAKERY & CONFECTIONERY - This division consists of "Pepperidge Farm" in the U.S., "Delacre" in Europe, "Arnotts" in Australia, "Godiva" worldwide and the "Lamy-Lutti" confectionery business in Europe. Bakery & Confectionery sales increased 6% to $417 million from $393 million in the first quarter of last year, primarily from favorable exchange rates. Earnings increased 15% to $46 million from $40 million last year, with Arnotts the major contributor to the improvement. -7- 8 Strong volume gains were achieved by "Godiva" chocolates in the U.S. and Japan. "Pepperidge Farm" biscuits and frozen foods units also reported substantial increases. INTERNATIONAL GROCERY - International Grocery consists of soup, grocery and frozen businesses in Canada, Mexico, Argentina, Europe, Australia and Asia. The division reported sales of $341 million, an 11% increase from continuing businesses led by very strong soup sales. Operating earnings rose 16% to $32 million, with major increases in soup worldwide and businesses in Argentina and Continental Europe. STATEMENTS OF EARNINGS Net sales increased 6% over the prior year, with sales of ongoing businesses up 7%, driven by across-the-board sales increases in North America, Europe, Asia/Pacific and Argentina. Gross margins improved 1.6 percentage points to 41.6% compared to the first quarter of the prior year. Gross margin improvements resulted primarily from higher selling prices. Marketing and selling expenses increased 6% in the first quarter, compared to the first quarter of the prior year, and remained at 18.2% of sales, as the company focused on stabilizing trade spending. Administrative expenses increased slightly to 4.2% of sales. The increase in interest expense results primarily from the net interest cost of a securities lending arrangement involving U.S. Treasury notes maturing in fiscal 1995. The maximum cost of this arrangement is $11 million, of which $7 million has been accrued. Because of recent movements in interest rates, additional charges are not anticipated. The effective tax rate was 33.7% compared to 36.4% in the first quarter of fiscal 1994. The company expects its effective rate for the full fiscal 1995 year to approximate the first quarter rate due to tax planning strategies, including utilization of tax loss carryforwards. LIQUIDITY AND CAPITAL RESOURCES Campbell operates in a highly seasonal business and traditionally is a net user of cash in the first quarter, as inventories grow from the fall harvest and receivables increase from sales going into the "soup season". In the first quarter of 1995, however, increased earnings and tighter management of working capital contributed $90 million in operating cash flow as compared to $3 million in the first quarter of 1994. Capital expenditures were $60 million in 1995, a decrease of $23 million from the prior year, due to heavier 1994 spending on cost savings projects and consolidation of frozen food plants. Capital expenditures are projected to reach $450 million in 1995. The company acquired Fresh Start Bakeries, a food service baking concern with operations in the U.S., Europe and South America; Stratford- upon-Avon Foods, a canned fruit and vegetable company in England; and Kohi Biscuits in New Zealand. The company also acquired an additional 3% interest in Arnotts, boosting its share ownership to 61%. -8- 9 On November 25, 1994, the company agreed to acquire Pace Foods, Ltd., the world's leading producer and marketer of Mexican sauces, for $1.1 billion. The acquisition is contingent on customary regulatory clearances and is expected to be completed in January 1995. The acquisition will be financed through a combination of cash flow from operations, short-term borrowings and long-term debt. Short-term debt increased by $204 million in 1995 to finance acquisitions and by $151 million in 1994. There were no significant repurchases of common stock for the treasury in 1995, compared to repurchases of 1.1 million shares at a cost of $41 million in 1994. -9- 10 PART II ITEM 1. LEGAL PROCEEDINGS In management's opinion, there are no pending claims or litigation, the outcome of which would have a material effect on the consolidated financial position of the company. Campbell has received a notice of violation from the United States Environmental Protection Agency relating to certain air emission permits at its Sacramento, CA facility. Campbell is disputing the alleged violations. The company has been named as a potentially responsible party in a number of proceedings brought under the Comprehensive Environmental Response, Compensation and Liability Act, commonly known as Superfund. The ultimate impact of these proceedings cannot be predicted at this time due to the large number of other potentially responsible parties, and the speculative nature of clean-up cost estimates, but it is not expected to be material either individually or in the aggregate. ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K a. Exhibits No. 4 There is no instrument with respect to long-term debt of the company that involves indebtedness or securities authorized thereunder exceeding 10 percent of the total assets of the company and its subsidiaries on a consolidated basis. The company agrees to file a copy of any instrument or agreement defining the rights of holders of long-term debt of the company upon request of the Securities and Exchange Commission. 27 Financial Data Schedule b. Reports on Form 8-K There were no reports on Form 8-K filed by Campbell during the quarter for which this report is filed. -10- 11 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. CAMPBELL SOUP COMPANY Date: December 14, 1994 By:/s/JOHN M. COLEMAN ------------------------------------ John M. Coleman, Senior Vice President - Law and Public Affairs Date: December 14, 1994 By:/s/FRANK E. WEISE, III ------------------------------------ Frank E. Weise, III Senior Vice President - Finance and Chief Financial Officer -11- 12 INDEX TO EXHIBITS Exhibit Number Page - -------------- ---- 27 Financial Data Schedule 13 -12- EX-27 2 FINANCIAL DATA SCHEDULE WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
5 1,000,000 QTR-1 JUL-30-1995 AUG-01-1994 OCT-30-1994 0 88 14 831 48 888 1,930 3,987 1,525 5,529 2,001 574 20 0 0 2,135 5,529 1,864 1,864 1,088 1,088 358 0 27 297 100 197 0 0 0 197 .79 .79
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