-----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, HFTFk7HSs+5cyyHLYW46N1P/suk2y38dbFhPlkMTUCWy5W6PB/q6ynE/VssZ++vs K2Le8CbqLdjc5mD6Qf/i+A== 0000893220-96-000962.txt : 19960613 0000893220-96-000962.hdr.sgml : 19960613 ACCESSION NUMBER: 0000893220-96-000962 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960428 FILED AS OF DATE: 19960612 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: 96579922 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 April 28, 1996 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 248,226,166 SHARES OF CAPITAL STOCK OUTSTANDING AS OF JUNE 3, 1996. 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 Nine Months Ended ------------------------ ---------------------- APRIL April* APRIL April* 28, 1996 30, 1995 28, 1996 30, 1995 --------- --------- --------- -------- Net sales $1,831 $1,737 $6,038 $5,624 - -------------------------------------------------------------------------------------------------------------------------------- Costs and expenses Cost of products sold 1,061 1,042 3,449 3,301 Marketing and selling expenses 391 353 1,188 1,066 Administrative expenses 92 79 251 239 Research and development expenses 20 20 61 62 Other expense 21 21 66 48 - -------------------------------------------------------------------------------------------------------------------------------- Total costs and expenses 1,585 1,515 5,015 4,716 - -------------------------------------------------------------------------------------------------------------------------------- Earnings before interest and taxes 246 222 1,023 908 Interest, net 29 32 95 72 - -------------------------------------------------------------------------------------------------------------------------------- Earnings before taxes 217 190 928 836 Taxes on earnings 72 63 307 281 - -------------------------------------------------------------------------------------------------------------------------------- Net earnings $ 145 $ 127 $ 621 $ 555 ================================================================================================================================ Per share Net earnings $.58 $.51 $2.49 $2.23 ================================================================================================================================ Dividends $.345 $.31 $1.00 $.90 ================================================================================================================================ Weighted average shares outstanding 249 249 249 249 ================================================================================================================================
See Notes To Financial Statements *Reclassified to conform to this year's presentation -2- 3 CAMPBELL SOUP COMPANY CONSOLIDATED BALANCE SHEETS (unaudited) (million dollars)
APRIL July 28, 1996 30, 1995 -------- --------- S> Current assets Cash and cash equivalents $ 57 $ 53 Accounts receivable 660 631 Inventories 718 755 Prepaid expenses 142 142 - ---------------------------------------------------------------------------------------------------------------- Total current assets 1,577 1,581 - ---------------------------------------------------------------------------------------------------------------- Plant assets, net of depreciation 2,618 2,584 Intangible assets, net of amortization 1,810 1,715 Other assets 489 435 - ---------------------------------------------------------------------------------------------------------------- Total assets $6,494 $6,315 ================================================================================================================ Current liabilities Notes payable $ 893 $ 865 Payable to suppliers and others 407 556 Accrued liabilities 611 545 Dividend payable 87 78 Accrued income taxes 148 120 - ---------------------------------------------------------------------------------------------------------------- Total current liabilities 2,146 2,164 - ---------------------------------------------------------------------------------------------------------------- Long-term debt 750 857 Nonpension postretirement benefits 463 434 Other liabilities, including deferred income taxes of $230 and $235 394 392 - ---------------------------------------------------------------------------------------------------------------- Total liabilities 3,753 3,847 - ---------------------------------------------------------------------------------------------------------------- Shareowners' equity Preferred stock; authorized 40 shares; none issued - - Capital stock, $.075 par value; authorized 280 shares; issued 271 shares 20 20 Capital surplus 214 165 Earnings retained in the business 3,127 2,755 Capital stock in treasury, at cost (676) (550) Cumulative translation adjustments 56 78 - ---------------------------------------------------------------------------------------------------------------- Total shareowners' equity 2,741 2,468 - ---------------------------------------------------------------------------------------------------------------- Total liabilities and shareowners' equity $6,494 $6,315 ================================================================================================================
See Notes to Financial Statements -3- 4 CAMPBELL SOUP COMPANY CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) (million dollars)
Nine Months Ended -------------------------------- APRIL April 28, 1996 30, 1995 -------- -------- Cash flows from operating activities: Net earnings $621 $555 Non-cash charges to net earnings Depreciation and amortization 241 210 Deferred taxes 5 10 Other, net 59 55 Changes in working capital Accounts receivable (45) (63) Inventories 20 122 Other current assets and liabilities (73) (71) - ------------------------------------------------------------------------------------------------------------------------- Net cash provided by operating activities 828 818 - ------------------------------------------------------------------------------------------------------------------------- Cash flows from investing activities: Purchases of plant assets (266) (229) Sales of plant assets 29 59 Businesses acquired (149) (1,257) Sales of businesses 45 11 Net change in other assets and liabilities (80) (38) - ------------------------------------------------------------------------------------------------------------------------- Net cash used in investing activities (421) (1,454) - ------------------------------------------------------------------------------------------------------------------------- Cash flows from financing activities: Long-term borrowings 225 305 Repayments of long-term borrowings (33) (20) Short-term borrowings 146 916 Repayments of short-term borrowings (419) (238) Dividends paid (241) (295) Treasury stock purchased (139) (1) Treasury stock issued 53 30 - ------------------------------------------------------------------------------------------------------------------------- Net cash (used in) provided by financing activities (408) 697 - ------------------------------------------------------------------------------------------------------------------------- Effect of exchange rate changes on cash 5 2 - ------------------------------------------------------------------------------------------------------------------------- Net change in cash and cash equivalents 4 63 Cash and cash equivalents - beginning of period 53 96 - ------------------------------------------------------------------------------------------------------------------------- Cash and cash equivalents - end of period $ 57 $159 =========================================================================================================================
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 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 =================================================================================================================================== BALANCE AT JULY 30, 1995 $ - $20 $165 $2,755 $(550) $78 $2,468 NET EARNINGS 621 621 CASH DIVIDENDS ($1.00 PER SHARE) (249) (249) TREASURY STOCK PURCHASED (139) (139) TREASURY STOCK ISSUED UNDER MANAGEMENT INCENTIVE AND STOCK OPTION PLANS 49 13 62 TRANSLATION ADJUSTMENTS (22) (22) - ----------------------------------------------------------------------------------------------------------------------------------- BALANCE AT APRIL 28, 1996 $ - $20 $214 $3,127 $(676) $56 $2,741 ===================================================================================================================================
Changes in Number of Shares (unaudited) (thousands of shares)
- ---------------------------------------------------------------------------------------------------------------------------- Issued Outstanding In Treasury --------- ----------- ----------- 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 ============================================================================================================================ BALANCE AT JULY 30, 1995 271,245 249,231 22,014 TREASURY STOCK PURCHASED (2,449) 2,449 TREASURY STOCK ISSUED UNDER MANAGEMENT INCENTIVE AND STOCK OPTION PLANS 1,706 (1,706) - ---------------------------------------------------------------------------------------------------------------------------- BALANCE AT APRIL 28, 1996 271,245 248,488 22,757 ============================================================================================================================
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 28, 1996 30, 1995 -------- -------- Raw materials, containers and supplies $288 $317 Finished products 498 505 ----------------------------------------------------------------------------------------------------- 786 822 Less - Adjustment of certain inventories to LIFO basis 68 67 ----------------------------------------------------------------------------------------------------- $718 $755 =====================================================================================================
(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. Based on current estimates, existing reserves are adequate to cover expected losses on the remaining businesses to be sold and finalizing other activities. The company plans to complete the program in 1996. A summary of the original reserves and activity through April 28, 1996 follows:
Original Balance BALANCE Reserves Activity 7/30/95 Activity 4/28/96 --------- -------- ------- ------- -------- Loss on disposal of assets $275 $(197) $78 $(1) $77 Other 78 (60) 18 (4) 14 --------------------------------------------------------------------------------------------------------- Total $353 $(257) $96 $(5) $91 ========================================================================================================= Current $153 $96 $91 Non-current 200 - - --------------------------------------------------------------------------------------------------------- Total $353 $96 $91 =========================================================================================================
-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 first nine months ended April 28, 1996. Net sales for the quarter were $1.83 billion, up 5% from the comparable period last year. Earnings per share increased 14% to a quarterly record of 58 cents, up from 51 cents in the third quarter last year. Net earnings rose 14% to $145 million from $127 million a year ago. Sales for the nine months increased 7% to $6.04 billion, versus $5.62 billion for the comparable period last year. Earnings per share for the nine months increased 12% to $2.49, and net earnings increased 12% to $621 million. RESULTS BY DIVISION THIRD QUARTER U.S.A. - U.S. sales for the quarter were $1.10 billion, up 8% over $1.02 billion last year. Operating earnings rose 19% to $204 million. Red & White condensed chicken noodle soup, "Chunky" ready-to-serve soups and "Swanson" broths showed double-digit growth, increasing overall soup volume by 5%. Strong volume gains also came from "Pace" Mexican sauces, "Prego" spaghetti sauces, "V8" vegetable juice and "Swanson Hungry-Man" dinners. Food Service reported exceptional gains in soups and entrees as well as chicken pot pies for the away-from-home market. BAKERY & CONFECTIONERY - Bakery & Confectionery sales increased 5% to $392 million from $372 million in the third quarter last year. Operating earnings declined 7% to $28 million from $31 million a year ago, due to one-time charges at Arnotts Ltd. primarily relating to changes in organization. New "Pepperidge Farm" Fat Free cookies and brownies added to their wide consumer acceptance. "Goldfish" crackers and frozen garlic breads continued to achieve double-digit growth. Godiva Chocolatier experienced an excellent Valentine's Day and Easter season with record sales and earnings for the third quarter. Earnings of Continental Sweets and Delacre were soft, mostly attributable to economic difficulties in Europe. This division consists of Pepperidge Farm in the U.S., Arnotts in Australia, Delacre in Europe, Godiva worldwide and the confectionery business in Europe. -7- 8 INTERNATIONAL GROCERY - The International Grocery Division reported sales of $359 million in the third quarter, a 5% increase over last year's $342 million excluding the divestiture of a frozen vegetable business in Europe. Operating earnings declined 15% to $27 million because of the divestiture and a one-time gain last year. Soup volume outside the United States grew 6.5% during the quarter lead by strong gains in Hong Kong and Japan. Also, the recent acquisitions of "Homepride" cooking sauces in the United Kingdom and the Cheong Chan soup and sauce business in Malaysia contributed to volume growth. International Grocery consists of soup, grocery and frozen businesses in Argentina, Asia, Canada, Europe and Mexico. NINE MONTHS U.S.A. - U.S. sales for the nine months were $3.65 billion versus $3.36 billion last year. Operating earnings increased 16% to $812 million. Soup volume increased 4.0% led by Red & White chicken noodle, "Chunky" soup, and "Swanson" broths. Other strong sales gains came from "Prego" and "Barilla" spaghetti sauces, Food Service entrees and chicken pot pies for the away-from-home market. Frozen foods volume declined, reflecting marketplace conditions. BAKERY & CONFECTIONERY - Bakery & Confectionery sales grew 6% to $1.29 billion from $1.22 billion in the first nine months. Operating earnings increased 7% to $148 million. Volume gains were led by new "Pepperidge Farm" fat-free cookies and brownies, "Goldfish" crackers and frozen garlic breads. Arnotts' earnings declined because of lower volume and one-time charges due to organization changes. Lamy Lutti, a confectionery business in Europe, experienced volume and earnings decline due to economic difficulties in France. Delacre experienced volume declines due to economic difficulties in Europe. Godiva Chocolatier had record holiday season results. INTERNATIONAL GROCERY - International Grocery reported sales of $1.15 billion in the first nine months, a 6% increase over last year. Operating earnings rose 2% to $106 million. Soup volume outside the U.S. was up 8% in the first nine months with strong gains from the United Kingdom and Asia. Sales also benefited from the acquisition of "Homepride" cooking sauces in the United Kingdom. STATEMENTS OF EARNINGS Net sales increased 5% for the third quarter and 7% for the nine months, compared to the same periods last year. These gains are the result of acquisitions and worldwide soup volume gains of 5% in the third quarter and for the first nine months. Volume gains continue to be strong in Asia, United Kingdom and Japan. -8- 9 Gross margins improved 2.1 percentage points to 42.1% in the third quarter and 1.6 percentage points to 42.9% for the nine-month period. Gross margin improvements resulted primarily from higher selling prices and operational improvements. Marketing and selling expenses increased 11% for the third quarter and nine months over the same periods a year ago. Acquisitions and increased trade marketing in the third quarter, particularly for soups, were the principal reasons for the increase. The nine-month increase was attributable to acquisitions, increased advertising spending for ready-to-serve soups, Pepperidge Farm "Goldfish" crackers, and increased trade marketing, principally for soups. Administrative expenses as a percentage of sales increased .5 percentage points to 5.0% for the quarter, due to one-time charges at Arnotts Ltd., primarily related to changes in organization. Administrative expense as a percentage of sales remained flat for the nine-month period versus a year ago. Other expense as a percentage of sales was flat this quarter versus last year, and up .2 percentage points for the nine-month period due to amortization of intangibles associated with recent acquisitions. Net interest expense for the quarter was down as a result of repayment of acquisition related debt. For the nine-month period, net interest expense is higher due to Pace Foods acquisition debt being outstanding for the entire period versus only a portion of the same period a year ago. The effective tax rate for the first nine months was 33.1% compared to 33.6% for last year. The company expects its effective tax rate for the full fiscal year 1996 to remain approximately at this level due to tax planning strategies, including utilization of tax loss carryforwards. LIQUIDITY AND CAPITAL RESOURCES Net earnings growth helped drive cash from operations to $828 million in the first nine months of 1996, up $10 million from the same period in 1995. Capital expenditures were $266 million in 1996, an increase of $37 million from the prior year, due primarily to construction of a new Arnotts' manufacturing facility in Huntingwood, New South Wales, Australia. Capital expenditures are projected to be approximately $415 million in 1996. During the year, the company acquired the "Homepride" sauce business, United Kingdom's leading cooking sauce brand, and the Cheong Chan soup and sauce business in Asia. The company also completed the purchase of a 50% interest in the Indonesian biscuit and snack manufacturer, PT Helios Arnotts Indonesia, and increased its Arnotts share ownership to 70%. The company divested Campbell's Groko B.V., a Dutch frozen vegetable processor. Long-term debt increased by $192 million in 1996. During the current fiscal year, the company issued $200 million, 5.5% fixed-rate three-year notes due January 1999. The proceeds were used to repay short-term debt which has decreased $273 million this year. The company repurchased 2,448,600 shares of common stock for the treasury at a cost of $139 million, compared to minimal repurchases in 1995. -9- 10 PART II ITEM 1. LEGAL PROCEEDINGS There have been no material developments in the legal proceedings as reported in Campbell's Form 10-Q for the quarter ended October 29, 1995. 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: June 11, 1996 By:/s/JOHN M. COLEMAN ---------------------------------------- John M. Coleman, Senior Vice President - Law and Public Affairs Date: June 11, 1996 By:/s/BASIL L. ANDERSON ---------------------------------------- Basil L. Anderson, Senior Vice President-Finance, Chief Financial Officer and Treasurer Date: June 11, 1996 By:/s/LEO J. GREANEY ---------------------------------------- Leo J. Greaney Vice President - Controller (Chief Accounting Officer) -11- 12 INDEX TO EXHIBITS
Exhibit Number Page - -------------- ---- 27 Financial Data Schedule 13
-12- EX-27 2 FINANCIAL DATA SCHEDULE
5 1,000,000 9-MOS JUL-28-1996 JUL-31-1995 APR-28-1996 57 0 734 74 718 1,577 4,405 1,787 6,494 2,146 750 0 0 20 2,721 6,494 6,038 6,038 3,449 3,449 1,249 0 98 928 307 621 0 0 0 621 2.49 2.49
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