-----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, nsbdHTdDVvg27478sp2xTuk9tABNoqYpQRP+lAowP7lFNfkDBPywesZZtKg5OtTz 8hZcOSqgJk2g1JKlHG2wWw== 0000893220-95-000408.txt : 19950615 0000893220-95-000408.hdr.sgml : 19950615 ACCESSION NUMBER: 0000893220-95-000408 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19950430 FILED AS OF DATE: 19950614 SROS: BSE SROS: NYSE SROS: PSE SROS: SSE 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: 95546992 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 CAMPBELL SOUP COMPANY FORM 10-Q 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 April 30, 1995 1-3822
CAMPBELL SOUP COMPANY 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 249,613,033 SHARES OF CAPITAL STOCK OUTSTANDING AS OF JUNE 1, 1995. THIS FORM 10-Q CONSISTS OF A TOTAL OF 14 PAGES. AN INDEX TO EXHIBITS IS ON PAGE 13. ================================================================================ 2 PART I. FINANCIAL INFORMATION CAMPBELL SOUP COMPANY CONSOLIDATED STATEMENTS OF EARNINGS (unaudited) (million dollars except per share amounts)
Three Months Ended Nine Months Ended -------------------------- ---------------------- APRIL May APRIL May 30, 1995 1, 1994 30, 1995 1, 1994 --------- ---------- -------- -------- Net sales $1,744 $1,568 $5,648 $5,225 - ----------------------------------------------------------------------------------------------------------------------- Costs and expenses Cost of products sold 1,045 946 3,308 3,108 Marketing and selling expenses 357 321 1,082 991 Administrative expenses 80 74 240 226 Research and development expenses 20 20 62 56 Other expense 20 9 48 36 - ----------------------------------------------------------------------------------------------------------------------- Total costs and expenses 1,522 1,370 4,740 4,417 - ----------------------------------------------------------------------------------------------------------------------- Earnings before interest and taxes 222 198 908 808 Interest, net 32 15 72 48 - ----------------------------------------------------------------------------------------------------------------------- Earnings before taxes 190 183 836 760 Taxes on earnings 63 64 281 272 - ----------------------------------------------------------------------------------------------------------------------- Net earnings $ 127 $ 119 $ 555 $ 488 ======================================================================================================================= Per share Net earnings $.51 $.47 $2.23 $1.94 ======================================================================================================================= Dividends $.31 $.28 $.90 $.81 ======================================================================================================================= Weighted average shares outstanding 249 251 249 251 =======================================================================================================================
See Notes To Financial Statements -2- 3 CAMPBELL SOUP COMPANY CONSOLIDATED BALANCE SHEETS (unaudited) (million dollars)
APRIL July 30, 1995 31, 1994 -------- -------- Current assets Cash and cash equivalents $ 134 $ 94 Other temporary investments, at cost which approximates market 25 2 Accounts receivable 676 578 Inventories 697 786 Prepaid expenses 152 141 - ---------------------------------------------------------------------------------------------------------- Total current assets 1,684 1,601 - ---------------------------------------------------------------------------------------------------------- Plant assets, net of depreciation 2,520 2,401 Intangible assets, net of amortization 1,732 582 Other assets 437 408 - ---------------------------------------------------------------------------------------------------------- Total assets $6,373 $4,992 ========================================================================================================== Current liabilities Notes payable $1,116 $ 434 Payable to suppliers and others 409 473 Accrued liabilities 618 570 Dividend payable - 71 Accrued income taxes 136 117 - ---------------------------------------------------------------------------------------------------------- Total current liabilities 2,279 1,665 - ---------------------------------------------------------------------------------------------------------- Long-term debt 867 560 Nonpension postretirement benefits 431 402 Other liabilities, including deferred income taxes of $231 and $211 395 376 - ---------------------------------------------------------------------------------------------------------- Total liabilities 3,972 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 163 155 Earnings retained in the business 2,690 2,359 Capital stock in treasury, at cost (530) (559) Cumulative translation adjustments 58 14 - ---------------------------------------------------------------------------------------------------------- Total shareowners' equity 2,401 1,989 - ---------------------------------------------------------------------------------------------------------- Total liabilities and shareowners' equity $6,373 $4,992 ==========================================================================================================
See Notes to Financial Statements -3- 4 CAMPBELL SOUP COMPANY CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) (million dollars)
Nine Months Ended ------------------------------ APRIL May 30, 1995 1, 1994 -------- ---------- Cash flows from operating activities: Net earnings $555 $488 Non-cash charges: Depreciation and amortization 210 193 Deferred taxes 10 8 Other 55 41 Net change in accounts receivable (63) 35 Net change in inventories 122 55 Net change in other current assets and liabilities (71) (125) - ----------------------------------------------------------------------------------------------------------------- Net cash provided by operating activities 818 695 - ----------------------------------------------------------------------------------------------------------------- Cash flows from investing activities: Purchases of plant assets (229) (278) Sales of plant assets 59 33 Businesses acquired (1,257) (8) Sales of businesses 11 23 Net change in other assets (38) (57) Net change in other temporary investments (21) 7 - ----------------------------------------------------------------------------------------------------------------- Net cash used in investing activities (1,475) (280) - ----------------------------------------------------------------------------------------------------------------- Cash flows from financing activities: Issuance of long-term debt 305 111 Reductions in long-term debt (20) (109) Net change in borrowings with less than three-month maturities 916 (37) Other short-term borrowings (238) (57) Dividends paid (295) (265) Treasury stock purchased (1) (46) Treasury stock issued 30 13 - ----------------------------------------------------------------------------------------------------------------- Net cash provided by (used in) financing activities 697 (390) - ----------------------------------------------------------------------------------------------------------------- Effect of exchange rate changes on cash - (2) - ----------------------------------------------------------------------------------------------------------------- Net change in cash and cash equivalents 40 23 Cash and cash equivalents - beginning of period 94 63 - ----------------------------------------------------------------------------------------------------------------- Cash and cash equivalents - end of period $134 $ 86 =================================================================================================================
See Notes to Financial Statements -4- 5 CAMPBELL SOUP COMPANY CONSOLIDATED STATEMENTS OF CHANGES IN SHAREOWNERS' EQUITY (unaudited) (million dollars)
Capital Earnings 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) $1,704 Net earnings 488 488 Cash dividends ($.81 per share) (202) (202) Treasury stock purchased (46) (46) Treasury stock issued under Management incentive and Stock option plans 8 12 20 Translation adjustments 18 18 - ----------------------------------------------------------------------------------------------------------------------------------- Balance at May 1, 1994 $ - $20 $157 $2,288 $(462) $(21) $1,982 =================================================================================================================================== BALANCE AT JULY 31, 1994 $ - $20 $155 $2,359 $(559) $ 14 $1,989 NET EARNINGS 555 555 CASH DIVIDENDS ($.90 PER SHARE) (224) (224) TREASURY STOCK PURCHASED (1) (1) TREASURY STOCK ISSUED UNDER MANAGEMENT INCENTIVE AND STOCK OPTION PLANS 8 30 38 TRANSLATION ADJUSTMENTS 44 44 - ----------------------------------------------------------------------------------------------------------------------------------- BALANCE AT APRIL 30, 1995 $ - $20 $163 $2,690 $(530) $ 58 $2,401 ===================================================================================================================================
Changes in Number of Shares (unaudited) (thousands of shares)
Issued Outstanding In Treasury ------ ----------- ------------ Balance at August 1, 1993 271,245 251,706 19,539 Treasury stock purchased (1,268) 1,268 Treasury stock issued under Management incentive and Stock option plans 514 (514) - ------------------------------------------------------------------------------------------------------------------ Balance at May 1, 1994 271,245 250,952 20,293 ================================================================================================================== 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 1,269 (1,269) - ------------------------------------------------------------------------------------------------------------------ BALANCE AT APRIL 30, 1995 271,245 249,576 21,669 ==================================================================================================================
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
APRIL July 30, 1995 31, 1994 -------- -------- Raw materials, containers and supplies $297 $368 Finished products 474 483 - -------------------------------------------------------------------------------------------------------- 771 851 Less - Adjustment of certain inventories to LIFO basis 74 65 - -------------------------------------------------------------------------------------------------------- $697 $786 ========================================================================================================
(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 third quarter, two additional businesses were sold, bringing the total businesses sold to four in this fiscal year. A summary of the original reserves and charges through April 30, 1995 follows:
Original Balance BALANCE Reserves Charges 7/31/94 Charges 4/30/95 --------- ------- ------- ------- -------- Loss on disposal of assets $275 $(145) $130 $(23) $107 Severance and benefits 52 (28) 24 (22) 2 Other 26 (10) 16 (1) 15 - ------------------------------------------------------------------------------------------------------------- Total $353 $(183) $170 $(46) $124 ============================================================================================================= Current $153 $170 $124 Non-current 200 - - - ------------------------------------------------------------------------------------------------------------- Total $353 $170 $124 =============================================================================================================
(e) Acquisitions Effective January 30, 1995 the company acquired Pace Foods, Ltd., the world's largest producer and marketer of Mexican sauces, for $1.076 billion. The acquisition was accounted for as a purchase transaction and the results of operations after January 30, 1995 are included in Campbell's financial statements. The purchase price was allocated to assets acquired and liabilities assumed based upon preliminary fair value estimates, and resulted in the recording of intangible asssets, principally goodwill, of approximately $1 billion. Intangible assets are amortized on a straight-line basis over periods not exceeding 40 years. -6- 7 MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION CAMPBELL SOUP COMPANY RESULTS OF OPERATIONS OVERVIEW Campbell achieved record sales and earnings for the third quarter and nine months ended April 30, 1995. Net sales for the quarter were $1.74 billion, up 11% from the comparable period last year. Earnings per share, after 4 cents per share dilution from acquisitions, increased 9% to 51 cents, up from 47 cents last year. Net earnings rose 7% to $127 million from $119 million a year ago. Acquisitions were positive contributors to net sales and operating earnings, and earnings growth was anchored by strong results from leading U.S. brands, especially soup. Sales for the nine months increased 8% to $5.65 billion, versus $5.23 billion for the comparable period last year. Earnings per share for the nine months increased 15% to $2.23, and net earnings increased 14% to $555 million. RESULTS BY DIVISION THIRD QUARTER U.S.A. - U.S. sales for the quarter were $1.02 billion versus $913 million last year. Operating earnings climbed 14% to $171 million. The Pace Foods and Fresh Start acquisitions contributed 60% of the U.S. sales growth and soup volume increased 3%, as the Continuous Product Replenishment program better matched factory shipments to consumer purchases. Ready-to-Serve soups led the volume gain driven by double-digit increases in "Healthy Request", "Home Cookin'" and "Swanson" broth. Excellent consumer reception brought strong growth to several "Swanson" brand products including canned poultry, "Hungry-Man" dinners and new "Mac & More" single serving dishes. New products such as Vlasic's "Sandwich Stackers" pickles, "Franco-American" pasta in the shape of Disney licensed characters, and a new size of "Campbell's" Pork & Beans drove volume growth in their categories. -7- 8 BAKERY & CONFECTIONERY - This division consists of Pepperidge Farm in the U.S., Delacre in Europe, Arnotts Limited in Australia and Asia, Godiva Chocolatier worldwide and the Lamy Lutti confectionery businesses in Europe. Bakery & Confectionery also achieved record third quarter sales, increasing 9% to $379 million. Operating earnings rose 7% to $30 million. "Goldfish" crackers and "Pepperidge Farm" frozen garlic breads continued their strong sales growth. Godiva Chocolatier had excellent Valentine's Day sales with strong double-digit sales growth in the U.S., Europe and Japan, and Lamy Lutti also experienced strong volume growth. INTERNATIONAL GROCERY - International Grocery consists of soup, grocery and frozen businesses in Canada, Mexico, Argentina, Europe, Australia and Asia. This division reported sales of $356 million for the third quarter, a 12% increase over last year. Sales were reduced slightly by the divestiture of two small businesses in Italy. Operating earnings rose 5% to $31 million. The devaluation of the Mexican peso reduced earnings by $2 million in the quarter. Soup volume outside the United States grew 10% during the quarter, with major gains in Canada, Australia and Asia. Sales also benefitted from the acquisition of Stratford-upon-Avon in the United Kingdom as well as growth of the beef business in Argentina. NINE MONTHS U.S.A. - U.S. sales for the nine months were $3.36 billion versus $3.14 billion last year. Operating earnings increased 13% to $702 million. Soup volume was down 1% due to unseasonably warm weather in the important second and third quarters. The "Healthy Request" and "Home Cookin'" lines continued to show strong growth. Other strong sales performances came from "Vlasic" pickles; "Swanson" brand products including "Hungry-Man" dinners, canned poultry and broth; "Great Starts" breakfasts; "Prego" spaghetti sauce; "Franco-American" pasta; "V8" juice and U.S. Food Service. BAKERY & CONFECTIONERY - Bakery & Confectionery sales grew 8% to $1.24 billion from $1.15 billion in the first nine months of last year. Operating earnings improved 11% to $139 million. Sales improvement was driven by new varieties of Pepperidge Farm distinctive cookies and strength in "Goldfish" crackers and "Pepperidge Farm" frozen garlic bread. Godiva Chocolatier enjoyed excellent Christmas and Valentine's Day seasons in the U.S., Europe and Japan. -8- 9 INTERNATIONAL GROCERY - International Grocery reported sales of $1.08 billion in the first nine months, an 11% increase over last year. Operating earnings rose 11% to $103 million. Soup volume outside the U.S. was up 11% for the first nine months of fiscal 1995 with strong gains in Canada, Mexico, Asia and exports from the United Kingdom. Argentina continued its strong growth in the export and domestic beef businesses. STATEMENTS OF EARNINGS Net sales increased 11% for the third quarter and 8% for the nine months, compared to the same periods in the prior year. Sales gains were strong across all divisions. Worldwide soup sales for the nine months grew 4.5% with net sales outside the U.S. contributing strong growth of 11%. Acquisitions contributed 5.5% of the growth for the third quarter and 2.5% for the nine months. Gross margins improved .4 percentage points to 40.1% in the third quarter and .9 percentage points to 41.4% for the nine-month period. These improvements resulted principally from higher selling prices and manufacturing efficiencies. Marketing and selling expense as a percent of sales remained flat compared to the prior year at 20.4% and 19.1% for the third quarter and nine months, respectively. These expenses increased 11.4% in the third quarter and 8.5% for the nine months, compared to the prior year, as a result of spending on Ready-to-Serve soups and in support of the launch of Vlasic's new "Stackers" line. Interest expense for the nine months increased due principally to financing costs associated with acquisitions. The effective tax rate of 33.6% reflects the benefit of tax planning strategies, including utilization of tax loss carryforwards. LIQUIDITY AND CAPITAL RESOURCES Campbell's cash flows from operating activities are highly seasonal. As a result of earnings improvements and increased attention to working capital management, the company generated cash from operations of $818 million in the nine months of 1995, up $123 million from 1994. An increase in accounts receivable of $63 million in 1995 was the result of higher sales. Continued focus on inventory management provided $122 million of cash in the nine months of 1995, up $67 million from 1994. Capital expenditures were $229 million in 1995, down $49 million from the prior year, as the company completed several cost saving and restructuring programs in the prior year. Capital expenditures are not expected to exceed $400 million in 1995. Construction of a new $150 million world-class factory by Arnotts began in the third quarter with completion planned for 1997. -9- 10 During the first nine months of fiscal 1995, the company acquired Pace Foods, the world's leading producer and marketer of Mexican sauces; 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; Kohi Biscuits in New Zealand; Diet Care Puree, a Canadian food service company targeting institutional food for the elderly; and Greenfield Foods, a U.S. based baking operation specializing in low-fat cakes and cookies. The company also acquired an additional 6% interest in Arnotts Limited, boosting its share ownership in the Australian biscuit company to 64%. These acquisitions (approximately $1.3 billion) were funded through cash generated from operations and commercial paper borrowings of different maturities and interest rates. During the third quarter, a portion of these borrowings was replaced with a $300 million, 7.75% fixed rate two-year note due in February 1997. There were no significant repurchases of common stock for the treasury in fiscal 1995, compared to repurchases of 1.3 million shares at a cost of $46 million in fiscal 1994. As a result of increases in the dividend rate, year-to-date dividend payments increased $30 million to $295 million in 1995, from $265 million for the first nine months of 1994. -10- 11 PART II ITEM 1. LEGAL PROCEEDINGS As previously reported, 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 A Form 8-K, reporting Campbell's purchase on January 30, 1995, of the assets and business of Pace Foods, Ltd., was filed with the Securities and Exchange Commission on February 9, 1995. -11- 12 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: June 13, 1995 By:/s/JOHN M. COLEMAN ------------------------------------------- John M. Coleman, Senior Vice President - Law and Public Affairs Date: June 13, 1995 By:/s/LEO J. GREANEY --------------------------------------------- Leo J. Greaney Vice President - Controller (Chief Accounting Officer)
-12- 13 INDEX TO EXHIBITS
Exhibit Number Page - -------------- ---- 27 Financial Data Schedule 14
-13- EX-27 2 FINANCIAL DATA SCHEDULE
5 1,000,000 9-MOS JUL-30-1995 JAN-30-1995 APR-30-1995 134 25 733 56 697 1,684 4,158 1,638 6,373 2,279 867 20 0 0 2,381 6,373 5,648 5,648 3,308 3,308 1,144 0 79 836 281 555 0 0 0 555 $2.23 $2.23
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