-----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, DDu93HVIozOPyK2wH1revP7K02f1M4lg0z8/KVceCNJ9l5Xic5bNQivJ3cbVxvw1 xxEwQM2gI6iJuyI1OhHCCg== 0001047469-98-037068.txt : 19981014 0001047469-98-037068.hdr.sgml : 19981014 ACCESSION NUMBER: 0001047469-98-037068 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19980830 FILED AS OF DATE: 19981013 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: CONAGRA INC /DE/ CENTRAL INDEX KEY: 0000023217 STANDARD INDUSTRIAL CLASSIFICATION: MEAT PACKING PLANTS [2011] IRS NUMBER: 470248710 STATE OF INCORPORATION: DE FISCAL YEAR END: 0531 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 001-07275 FILM NUMBER: 98724518 BUSINESS ADDRESS: STREET 1: ONE CONAGRA DR CITY: OMAHA STATE: NE ZIP: 68102 BUSINESS PHONE: 4025954000 FORMER COMPANY: FORMER CONFORMED NAME: NEBRASKA CONSOLIDATED MILLS CO DATE OF NAME CHANGE: 19721201 10-Q 1 10-Q 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 August 30, 1998 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 1-7275 - ------------------------------------------------------------------------------- CONAGRA, INC. - ------------------------------------------------------------------------------- (Exact name of registrant, as specified in charter) Delaware 47-0248710 - ------------------------------------------------------------------------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) One ConAgra Drive, Omaha, Nebraska 68102-5001 - ------------------------------------------------------------------------------- (Address of Principal Executive Offices) (Zip Code) (402) 595-4000 - ------------------------------------------------------------------------------- (Registrant's telephone number, including area code) NA - ------------------------------------------------------------------------------- (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 outstanding of issuer's common stock, as of September 25, 1998 was 489,324,064. PART I -- FINANCIAL INFORMATION ITEM 1. CONDENSED FINANCIAL STATEMENTS CONAGRA, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF EARNINGS (in millions except per share amounts) (unaudited) - -------------------------------------------------------------------------------
THIRTEEN WEEKS ENDED AUGUST 30, AUGUST 24, 1998 1997 ------------ ----------- Net sales $ 6,483.4 $ 6,262.8 Costs and expenses Cost of goods sold 5,565.9 5,379.4 Selling, administrative and general expenses 663.3 618.3 Interest expense 76.4 73.6 ------------ ----------- 6,305.6 6,071.3 ------------ ----------- Income before income taxes 177.8 191.5 Income taxes 68.5 73.2 ------------ ----------- Net income $ 109.3 $ 118.3 ------------ ----------- ------------ ----------- Income per share - basic $ .23 $ .25 ------------ ----------- ------------ ----------- Income per share - diluted $ .23 $ .25 ------------ ----------- ------------ -----------
- ------------------------------------------------------------------------------- See notes to the condensed consolidated financial statements. 2 CONAGRA, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (in millions) (unaudited) - -------------------------------------------------------------------------------
THIRTEEN WEEKS ENDED AUGUST 30, AUGUST 24, 1998 1997 --------- ---------- Net income $ 109.3 $ 118.3 Other comprehensive income/(loss): Currency translation adjustment (17.9) (11.5) --------- ---------- Comprehensive income $ 91.4 $ 106.8 --------- ---------- --------- ----------
- ------------------------------------------------------------------------------- See notes to the condensed consolidated financial statements. 3 CONAGRA, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (in millions except shares) (unaudited)
- ------------------------------------------------------------------------------------------------------ ASSETS AUGUST 30, MAY 31, AUGUST 24, 1998 1998 1997 ---------- --------- ---------- Current assets Cash and cash equivalents $ 10.8 $ 108.4 $ 26.6 Receivables, less allowance for doubtful accounts of $78.3, $68.2 and $74.1 2,688.6 1,546.9 2,402.2 Inventories 3,806.4 3,540.8 3,660.1 Prepaid expenses 367.6 341.6 424.5 ---------- --------- ---------- Total current assets 6,873.4 5,537.7 6,513.4 ---------- --------- ---------- Property, plant and equipment 5,912.6 5,761.1 5,443.4 Less accumulated depreciation (2,390.8) (2,311.4) (2,136.1) ---------- --------- ---------- Property, plant and equipment, net 3,521.8 3,449.7 3,307.3 ---------- --------- ---------- Brands, trademarks and goodwill 2,694.9 2,391.7 2,421.8 Other assets 438.6 429.4 377.6 ---------- --------- ---------- $ 13,528.7 $ 11,808.5 $ 12,620.1 ---------- --------- ---------- ---------- --------- ---------- LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities Notes payable $ 4,187.5 $ 858.1 $ 3,216.1 Current installments of long-term debt 28.5 52.7 368.0 Accounts payable 1,051.9 1,971.0 1,078.4 Advances on sales 106.6 829.7 163.9 Other accrued liabilities 1,384.0 1,382.2 1,503.2 ---------- --------- ---------- Total current liabilities 6,758.5 5,093.7 6,329.6 ---------- --------- ---------- Senior long-term debt, excluding current installments 1,781.8 1,753.5 1,591.4 Other noncurrent liabilities 830.7 847.3 924.6 Subordinated debt 750.0 750.0 750.0 Preferred securities of subsidiary company 525.0 525.0 525.0 Common stockholders' equity Common stock of $5 par value, authorized 1,200,000,000 shares; issued 519,448,104, 519,424,034 and 522,805,088 2,597.2 2,597.1 2,614.0 Additional paid-in capital 212.0 320.0 416.7 Retained earnings 1,373.9 1,337.7 1,133.4 Foreign currency translation adjustment (85.5) (67.6) (43.2) Less treasury stock, at cost, common shares 30,155,200, 30,011,958 and 34,284,418 (708.9) (705.2) (798.6) ---------- --------- ---------- 3,388.7 3,482.0 3,322.3 Less unearned restricted stock and value of 19,830,815, 21,376,632 and 24,950,494 common shares held in Employee Equity Fund (506.0) (643.0) (822.8) ---------- --------- ---------- Total common stockholders' equity 2,882.7 2,839.0 2,499.5 ---------- --------- ---------- $ 13,528.7 $ 11,808.5 $ 12,620.1 ---------- --------- ---------- ---------- --------- ---------- - ------------------------------------------------------------------------------------------------------
See notes to the condensed consolidated financial statements. 4 CONAGRA, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (in millions) (unaudited)
- --------------------------------------------------------------------------------------------- THIRTEEN WEEKS ENDED AUGUST 30, AUGUST 24, 1998 1997 ----------- ---------- Cash flows from operating activities Net income $ 109.3 $ 118.3 Adjustments to reconcile net income to net cash provided by operating activities Depreciation and other amortization 102.9 93.3 Goodwill amortization 17.2 17.5 Other noncash items (includes nonpension postretirement benefits) 35.1 26.2 Change in assets and liabilities before effects from business acquisitions (3,127.9) (2,852.3) ----------- ---------- Net cash flows from operating activities (2,863.4) (2,597.0) ----------- ---------- Cash flows from investing activities Additions to property, plant and equipment (112.2) (89.3) Payment for business acquisitions (400.0) -- Sale of businesses and property, plant and equipment 4.9 136.7 Notes receivable and other items (2.1) 8.8 ----------- ---------- Net cash flows from investing activities (509.4) 56.2 ----------- ---------- Cash flows from financing activities Net short-term borrowings 3,329.4 2,675.6 Proceeds from issuance of long-term debt 45.9 303.4 Repayment of long-term debt (42.2) (327.3) Cash dividends paid (71.5) (61.3) Cash distributions of pooled companies (1.2) (1.5) Treasury stock purchases -- (140.7) Employee Equity Fund stock transactions 6.4 11.9 Other items 8.4 0.4 ----------- ---------- Net cash flows from financing activities 3,275.2 2,460.5 ----------- ---------- Net increase (decrease) in cash and cash equivalents (97.6) (80.3) Cash and cash equivalents at beginning of period 108.4 106.9 ----------- ---------- Cash and cash equivalents at end of period $ 10.8 $ 26.6 ----------- ---------- - ---------------------------------------------------------------------------------------------
See notes to the condensed consolidated financial statements. 5 CONAGRA, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE THIRTEEN WEEKS ENDED AUGUST 30, 1998 (COLUMNAR DATA IN MILLIONS) 1. ACCOUNTING POLICIES The unaudited interim financial information included herein reflects the adjustments (consisting solely of normal recurring adjustments) which are, in the opinion of management, necessary for a fair presentation of the results of operations, financial position, and cash flows for the periods presented. Such interim information should be read in conjunction with the financial statements and notes thereto included in the Company's report on Form 8-K dated September 29, 1998, restated to give effect to mergers accounted for as poolings of interest. The results of operations for any interim period are not necessarily indicative of the results to be expected for other interim periods or the full year. ACCOUNTING CHANGES In the first quarter of fiscal 1999, ConAgra adopted Statement of Financial Accounting Standards No. 130, REPORTING COMPREHENSIVE INCOME (SFAS No. 130), which establishes standards for reporting comprehensive income in financial statements. Comprehensive income includes all changes in equity during a period except those resulting from investments by or distributions to stockholders. The adoption of this statement had no impact on net income or shareholders' equity. Comprehensive income for all periods presented consists of net income and foreign currency translation adjustments. Amounts in prior year financial statements have been reclassified to conform to SFAS No. 130 requirements. ConAgra deems its foreign investments to be permanent in nature and does not provide for taxes on currency translation adjustments arising from converting the investment in a foreign currency to U.S. dollars. There are no reclassification adjustments to be reported in periods presented. 2. BUSINESS COMBINATIONS On July 31, 1998, GoodMark Foods, Inc. (GoodMark) merged with ConAgra through an exchange of shares. ConAgra issued approximately 7.8 million shares of common stock for all outstanding shares of GoodMark. On July 31, 1998, Fernando's Foods Corporation (Fernando's) merged with ConAgra through an exchange of shares. ConAgra issued approximately 1.3 million shares of common stock for all outstanding shares of Fernando's. During fiscal 1998, ConAgra completed mergers with Hester Industries, Inc. (Hester) and A.M. Gilardi & Sons, Inc. (Gilardi), exchanging 3.7 million and 3.8 million shares of ConAgra stock, respectively, for all outstanding shares of Hester and Gilardi. The above business combinations have been accounted for as poolings of interest. The historical financial statements of the Company have been restated to give effect to the all of the above acquisitions as though the companies had operated together from the beginning of the earliest period presented. 6 CONAGRA, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE THIRTEEN WEEKS ENDED AUGUST 30, 1998 (COLUMNAR DATA IN MILLIONS) Results of operations of the acquired businesses prior to acquisition date were as follows:
THIRTEEN WEEKS ENDED AUGUST 24, 1997 ----------- Net sales $ 122.4 Net income $ 8.2
3. INCOME PER SHARE The following table reconciles the income and average share amounts used to compute both basic and diluted income per share:
THIRTEEN WEEKS ENDED ------------------------- AUGUST 30, AUGUST 24, 1998 1997 ---------- ---------- INCOME PER SHARE - BASIC Net income $ 109.3 $ 118.3 -------- -------- -------- -------- Weighted average shares outstanding - basic 468.7 465.2 -------- -------- -------- -------- INCOME PER SHARE - DILUTED Net income $ 109.3 $ 118.3 -------- -------- -------- -------- Weighted average shares outstanding - basic 468.7 465.2 Add shares contingently issuable upon exercise of stock options 6.7 10.8 -------- -------- Weighted average shares outstanding - diluted 475.4 476.0 -------- -------- -------- --------
4. INVENTORIES The major classes of inventories are as follows:
AUGUST 30, MAY 31, AUGUST 24, 1998 1998 1997 ---------- ---------- ---------- Hedged commodities $ 1,152.6 $ 1,199.3 $ 1,100.9 Food products and livestock 1,291.6 1,263.3 1,430.3 Agricultural chemicals, fertilizer and feed 831.2 581.4 662.1 Other, principally ingredients and supplies 531.0 496.8 466.8 ---------- ---------- ---------- $ 3,806.4 $ 3,540.8 $ 3,660.1 ---------- ---------- ---------- ---------- ---------- ----------
7 CONAGRA, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE THIRTEEN WEEKS ENDED AUGUST 30, 1998 (COLUMNAR DATA IN MILLIONS) 5. CONTINGENCIES In fiscal 1991, ConAgra acquired Beatrice Company ("Beatrice"). As a result of the acquisition and the significant pre-acquisition tax and other contingencies of the Beatrice businesses and its former subsidiaries, the consolidated post-acquisition financial statements of ConAgra reflected significant liabilities and valuation allowances associated with the estimated resolution of these contingencies. The material pre-acquisition tax contingencies were resolved in fiscal 1995. Beatrice is also engaged in various litigation and environmental proceedings related to businesses divested by Beatrice prior to its acquisition by ConAgra. The environmental proceedings include litigation and administrative proceedings involving Beatrice's status as a potentially responsible party at 46 Superfund, proposed Superfund or state- equivalent sites. Beatrice has paid or is in the process of paying its liability share at 40 of these sites. Substantial reserves for these matters have been established based on the Company's best estimate of its undiscounted remediation liabilities, which estimates include evaluation of investigatory studies, extent of required cleanup, the known volumetric contribution of Beatrice and other potentially responsible parties and its experience in remediating sites. ConAgra is a party to a number of other lawsuits and claims arising out of the operation of its businesses. After taking into account liabilities recorded for all of the foregoing matters, management believes the ultimate resolution of such matters should not have a material adverse effect on ConAgra's financial condition, results of operations or liquidity. 6. ACQUISITIONS On August 17, 1998, ConAgra acquired the Egg Beaters and Tablespreads businesses from Nabisco, Inc. for $400 million. The Tablespreads business manufactures and markets margarine under Parkay, Blue Bonnet, Fleischmann's, Touch of Butter, Chiffon and Move Over Butter brand names. Egg Beaters is an egg alternative product. Annual sales of the combined businesses are approximately $480 million. The acquisition was accounted for as a purchase. 7. SUBSEQUENT EVENTS On October 7, 1998, ConAgra issued $400 million of senior notes with an interest rate of 7.00% due October 1, 2028. The notes were priced at 99.964% of par. On October 9, 1998, ConAgra issued $200 million of senior notes with an interest rate of 5.50% due October 15, 2002. The notes were priced at 99.981% of par. The proceeds of the note issuances were used to reduce short-term debt. 8 CONAGRA, INC. AND SUBSIDIARIES PART I -- FINANCIAL INFORMATION ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Following is management's discussion and analysis of certain significant factors which have affected the Company's financial condition and operating results for the periods included in the accompanying consolidated condensed financial statements. Results for the thirteen-week period ended August 30, 1998 are not necessarily indicative of results that may be attained in the future. This report contains forward-looking statements. The statements reflect management's current views and estimates of future economic circumstances, industry conditions, company performance and financial results. The statements are based on many assumptions and factors including availability and prices of raw materials, product pricing, competitive environment and related market conditions, operating efficiencies, access to capital and actions of governments. Any changes in such assumptions or factors could produce significantly different results. All prior period results have been restated to give effect to mergers accounted for as poolings of interest. FINANCIAL CONDITION ConAgra's earnings are generated principally from its capital investment, which consists of working capital (current assets less current liabilities) plus all noncurrent assets. Capital investment is financed with stockholders' equity, long-term debt and other noncurrent liabilities. Capital investment increased $55.4 million, or 0.8%, compared to May 31, 1998. Working capital decreased $329.1 million, primarily due to increased short-term borrowings for the Egg Beaters and Tablespreads acquisition. Normal seasonal increases in accounts receivable and inventory were funded by short-term debt. ConAgra invested $112.2 million in property, plant and equipment and $400 million for business acquisitions in the first quarter of fiscal 1999 compared to $89.3 million in additions to property, plant and equipment in the same quarter of fiscal 1998. Sales of property and businesses totaled $4.9 million in the first quarter of fiscal 1999 versus $136.7 million in the first quarter of fiscal 1998. Depreciation and amortization totaled $120.1 million in the first quarter compared to $110.8 million in the same quarter last year. The Company's objective is that senior long-term debt normally will not exceed 30 percent of total long-term debt plus equity. This objective was met for all periods presented. 9 CONAGRA, INC. AND SUBSIDIARIES PART I -- FINANCIAL INFORMATION ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS OPERATING RESULTS A summary of the period to period increases (decreases) in the principal components of operations is shown below (dollars in millions, except per share amounts).
COMPARISON OF THE PERIODS ENDED AUGUST 30, 1998 AND AUGUST 24, 1997 ----------------------------------- DOLLAR PERCENT CHANGE CHANGE -------- ------ Net sales $ 220.6 3.5% Costs and expenses Cost of goods sold 186.5 3.5 Selling, administrative and general expenses 45.0 7.3 Interest expense 2.8 3.8 -------- ------ 234.3 3.9 -------- ------ Income before income taxes (13.7) (7.2) Income taxes (4.7) (6.4) -------- ------ Net income $ (9.0) (7.6)% -------- ------ -------- ------ Income per share - basic $ (.02) (8.0)% -------- ------ -------- ------ Income per share - diluted $ (.02) (8.0)% -------- ------ -------- ------
In ConAgra's Grocery & Diversified Products business segment, operating profit increased 10 percent and sales increased 1 percent in fiscal 1999's first quarter versus fiscal 1998's first quarter. The segment's three business groups all contributed to first quarter operating profit growth. ConAgra Frozen Foods increased unit volumes and operating profit. ConAgra Foodservice Sales Company, which includes Lamb-Weston potato products, had significant operating profit growth. ConAgra Grocery Products, the shelf-stable foods group, raised operating profit supported by Hunt-Wesson's, Golden Valley's and GoodMark's unit volume growth. In ConAgra's Food Inputs & Ingredients business segment, operating profit increased 13 percent and sales increased 11 percent in fiscal 1999's first quarter versus fiscal 1998's first quarter. ConAgra's major crop inputs business, United Agri Products, enjoyed substantial sales and operating profit growth in fiscal 1999's first quarter. In the ingredients sector, commodity services, international operations and specialty food ingredients achieved operating profit growth, while operating profit was down in grain merchandising and flour milling. In ConAgra's Refrigerated Foods business segment, operating profit decreased 29 percent and sales were unchanged in fiscal 1999's first quarter versus fiscal 1998's first quarter. Lower pork and beef raw materials prices passed through as lower selling prices constrained segment sales about 4 percent. The branded packaged meats business increased first quarter unit volumes and operating profit. A recent acquisition contributed to operating profit growth in the cheese and tablespreads business. Poultry products and Australia beef increased operating profit. Pork operating profit was down due to the effect of procurement contracts. The principal cause of the segment's operating profit decline was a sharp drop in U.S. beef processing as excess total protein supply adversely impacted beef industry prices and margins. 10 CONAGRA, INC. AND SUBSIDIARIES PART I -- FINANCIAL INFORMATION ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS In total, ConAgra's fiscal 1999 first quarter net sales were $6.48 billion, up 3.5 percent from $6.26 billion in fiscal 1998's restated first quarter. Gross margins improved to 14.2% of sales, up from 14.1% in the first quarter, fiscal 1998. Selling, administrative and general expenses increased $45 million or 7.3%, primarily relating to expansion of business or marketing of new products. Interest expense was up $2.8 million, as lower interest rates offset the impact of higher borrowing balances. For ConAgra in total, fiscal 1999 first quarter net income was $109.3 million, down 8 percent from $118.3 million in fiscal 1998's restated first quarter. Fiscal 1999 first quarter diluted earnings per share were 23 cents, down 8 percent from 25 cents in fiscal 1998's first quarter as restated for pooling of interests with four businesses that subsequently merged with ConAgra. YEAR 2000 The Year 2000 ("Y2K") computer software compliance issues affect ConAgra and most companies in the world. Historically, certain computer programs were written using two digits rather than four to define the applicable year. As a result, software may recognize a date using the two digits "00" as 1900 rather than the year 2000. Computer programs that do not recognize the proper date could generate erroneous data or cause systems to fail. ConAgra has established a Y2K project office and has retained an independent consulting group to provide assistance with regard to ConAgra's Y2K compliance. ConAgra's Y2K project covers both traditional computer systems and infrastructure ("IT systems") and computer-based manufacturing, logistical and related systems ("non-IT systems"). The Y2K project has six phases: systems inventory, assessment, renovation, validation, implementation, and contingency planning. ConAgra operates on a decentralized independent operating company ("IOC") structure. Consequently, the Y2K project efforts may vary by IOC. For IT systems, the status of the project generally ranges from assessment to validation. For non-IT systems, the status of the project generally ranges from assessment to renovation. Based on its assessment of its major information technology systems, ConAgra expects that all necessary modifications and/or replacements will be completed in a timely manner to insure that each IOC's systems are Y2K compliant. ConAgra's Y2K project also considers the readiness of significant customers and suppliers. ConAgra does not have any suppliers or customers that are material to its operations as a whole. Each IOC is verifying the readiness of suppliers and customers that may be significant for such IOC. Due to the decentralized IOC structure, there are few IT systems and non-IT systems, the failure of which would have a material effect on ConAgra as a whole. Such material systems include general ledger, payroll, fixed assets and cash management systems. ConAgra's Y2K project includes contingency plans for these systems that involve, among other things, manual workarounds and extra staffing. ConAgra's Y2K project includes the development of a full contingency plan for each IOC and ConAgra presently expects to have such contingency arrangements completed by June 1999. ConAgra has incurred approximately $10 million of Y2K project expenses to date. Future expenses are expected to include $50 to $60 million of additional costs, plus approximately $10 million of systems initiatives that have been accelerated in connection with the Y2K project. Such cost estimates are based upon presently available information and may change as ConAgra continues with its Y2K project. 11 CONAGRA, INC. AND SUBSIDIARIES PART II -- OTHER INFORMATION ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES ConAgra issued 1,310,370 shares of its common stock during the first quarter of fiscal 1999 in connection with the acquisition through merger of Fernando's Foods Corporation. The common stock was issued in reliance on the exemption from registration provided by Section 4 (2) of the Securities Act of 1933 and Regulation D thereunder. ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK. There have been no material changes in the company's market risk during the first quarter ended August 30, 1998. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITYHOLDERS ConAgra's annual meeting of stockholders was held on September 24, 1998. The stockholders elected five directors to serve three-year terms, ratified the appointment of Deloitte & Touche to examine ConAgra's financial statements for fiscal year 1999 and did not approve a stockholder proposal. Voting on these items was as follows:
1. Election of Directors FOR WITHHELD Mogens C. Bay 408,869,925 8,436,312 Charles M. Harper 402,301,920 15,004,317 Carl E. Reichardt 402,719,786 14,586,451 Marjorie M. Scardino 408,833,634 8,472,603 Kenneth E. Stinson 408,873,916 8,432,321 2. Ratification of Accountants FOR: 414,896,013 AGAINST: 1,385,559 ABSTAIN: 1,024,665 BROKER/NON-VOTES: -0- 3. Stockholder Proposal on Employment Reporting FOR: 38,261,343 AGAINST: 315,664,236 ABSTAIN: 12,550,959 BROKER/NON-VOTES: 50,829,699
ITEM 5. OTHER INFORMATION ConAgra's Board of Directors elected Chief Executive Officer Bruce Rohde as Chairman of ConAgra's Board of Directors on September 24, 1998. Mr. Rohde had been Vice Chairman, President and Chief Executive Officer since September 1997. Mr. Rohde succeeds Philip B. Fletcher, who continues as a member of ConAgra's Board of Directors and became Chairman of the Board's Executive Committee. 12 CONAGRA, INC. AND SUBSIDIARIES PART II -- OTHER INFORMATION On September 24, 1998, ConAgra's Board of Directors approved a 14.2% increase in ConAgra's common stock dividend. The Board declared a quarterly common stock cash dividend of 17.85 cents per share payable December 1, 1998 to stockholders of record November 6, 1998. The quarterly dividend previously was 15.625 cents per share. The new indicated annual dividend rate is 71.4 cents per share, up from the previous 62.5 cents per share. ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (A) Exhibits 12 - Statement regarding computation of ratio of earnings to fixed charges. (B) Reports on Form 8-K ConAgra filed a report on Form 8-K dated September 29, 1998 which included consolidated selected financial data, consolidated management's discussion and analysis of financial condition and results of operations, consolidated financial statements and notes thereto, and financial statement schedules, all restated to give effect to mergers accounted for as poolings of interest. CONAGRA, INC. By: /s/ James P. O'Donnell ---------------------------------- James P. O'Donnell Executive Vice President, Chief Financial Officer and Corporate Secretary By: /s/ Kenneth W. DiFonzo ---------------------------------- Kenneth W. DiFonzo Senior Vice President and Controller Dated this 13th day of October, 1998. 13 CONAGRA, INC. AND SUBSIDIARIES EXHIBIT INDEX EXHIBIT DESCRIPTION PAGE 12 Statement regarding computation of ratio of earnings to fixed charges 15 14 EX-12 2 EXHIBIT 12 EXHIBIT 12 CONAGRA, INC. AND SUBSIDIARIES COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES (in millions)
THIRTEEN WEEKS ENDED AUGUST 30, 1998 --------------- Fixed charges Interest expense $ 91.7 Capitalized interest 1.6 Interest in cost of goods sold 4.2 One third of noncancelable lease rent 8.5 -------- Total fixed charges (A) $ 106.0 -------- -------- Earnings Pretax income $ 177.8 Add fixed charges 106.0 Less capitalized interest (1.6) -------- Earnings and fixed charges (B) $ 282.2 -------- -------- Ratio of earnings to fixed charges (B/A) 2.7
For the purpose of computing the above ratio of earnings to fixed charges, earnings consist of income before taxes and fixed charges. Fixed charges, for the purpose of computing earnings, are adjusted to exclude interest capitalized. Fixed charges include interest on both long and short-term debt (whether said interest is expensed or capitalized and including interest charged to cost of goods sold), and a portion of noncancelable rental expense representative of the interest factor. The ratio is computed using the amounts for ConAgra as a whole, including its majority-owned subsidiaries, whether or not consolidated, and its proportionate share of any 50% owned subsidiaries, whether or not ConAgra guarantees obligations of these subsidiaries. 15 EX-27 3 EXHIBIT 27
5 1,000 3-MOS MAY-30-1999 JUN-01-1998 AUG-30-1998 10,800 0 2,766,900 78,300 3,806,400 6,873,400 5,912,600 2,390,800 13,528,700 6,758,500 2,531,800 0 525,000 2,597,200 285,500 13,528,700 6,483,400 6,483,400 5,565,900 5,565,900 663,300 0 76,400 177,800 68,500 109,300 0 0 0 109,300 0.23 0.23
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