-----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, rR8AGWJzPAsNFAfJNx1AdwwnRJx5WWTK1QNbQ2+ZrAy0fykKcCUOArSrLF9qN19L 1Dk1z5D0GeTB9x02/16DpA== 0000897069-95-000101.txt : 19950814 0000897069-95-000101.hdr.sgml : 19950814 ACCESSION NUMBER: 0000897069-95-000101 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19950630 FILED AS OF DATE: 19950811 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: UNIVERSAL FOODS CORP CENTRAL INDEX KEY: 0000310142 STANDARD INDUSTRIAL CLASSIFICATION: FOOD & KINDRED PRODUCTS [2000] IRS NUMBER: 390561070 STATE OF INCORPORATION: WI FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-07626 FILM NUMBER: 95561767 BUSINESS ADDRESS: STREET 1: 433 EAST MICHIGAN ST CITY: MILWAUKEE STATE: WI ZIP: 53202 BUSINESS PHONE: 4142716755 MAIL ADDRESS: STREET 1: PO BOX 737 CITY: MILWAUKEE STATE: WI ZIP: 53201 10-Q 1 UNIVERSAL FOODS FORM 10-Q UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 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: June 30, 1995 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: 1-7626 UNIVERSAL FOODS CORPORATION (Exact name of registrant as specified in its charter) Wisconsin 39-0561070 (State or other jurisdiction of (I.R.S. Employer Identification incorporation or organization) Number) 433 East Michigan Street, Milwaukee, Wisconsin 53202 (Address of principal executive offices) Registrant's telephone number, including area code: (414) 271-6755 NONE (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 such shorter period that the Registrant was required to file such reports) and (2) has been subject to such filing requirements for at least the past 90 days. Yes X No Indicate the number of shares outstanding of each of the issuer's classes of Common Stock as of the latest practicable date. Class Outstanding at July 31, 1995 Common Stock, par value $0.10 per share 26,082,504 shares UNIVERSAL FOODS CORPORATION INDEX Page No. PART I, FINANCIAL INFORMATION: Consolidated Condensed Balance Sheets - June 30, 1995 and September 30, 1994. 1 Consolidated Condensed Statements of Earnings - Three and Nine Months Ended June 30, 1995 and 1994. 2 Consolidated Condensed Statements of Cash Flows - Nine Months Ended June 30, 1995 and 1994. 3 Notes to Consolidated Condensed Financial Statements. 4 Management's Discussion and Analysis of Results of Operations, Financial Condition and Forward Looking Information. 5 PART II, OTHER INFORMATION: Item 6, Exhibits and Reports on Form 8-K. 7 Signatures. 8 PART I FINANCIAL INFORMATION UNIVERSAL FOODS CORPORATION CONSOLIDATED CONDENSED BALANCE SHEETS ($000's Omitted) June 30 1995 September 30 ASSETS (Unaudited) 1994 CURRENT ASSETS: Cash and cash equivalents $ 16,872 $ 43,430 Trade accounts receivable 112,887 95,336 Inventory: Finished and in-process products 108,758 101,046 Raw materials and supplies 61,724 55,075 Prepaid expenses and other current assets 33,949 32,941 -------- -------- TOTAL CURRENT ASSETS 334,190 327,828 INVESTMENTS AND OTHER ASSETS 42,181 32,328 INTANGIBLES 145,762 147,789 PROPERTY, PLANT AND EQUIPMENT: Cost: Land and buildings 129,437 118,538 Machinery and equipment 330,282 309,847 -------- -------- 459,719 428,385 Less accumulated depreciation 192,418 172,666 -------- -------- 267,301 255,719 -------- -------- TOTAL ASSETS $789,434 $763,664 ======== ======== LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES: Short-term borrowings $ 18,915 $ 4,527 Accounts payable, accrued expenses and other current liabilities 130,030 138,153 Federal and state income taxes 18,324 28,697 Current maturities on long-term debt 19,734 20,775 ------- ------- TOTAL CURRENT LIABILITIES 187,003 192,152 DEFERRED INCOME TAXES 20,724 17,300 OTHER DEFERRED LIABILITIES 19,183 19,414 ACCRUED EMPLOYEE AND RETIREE BENEFITS 38,637 35,173 LONG-TERM DEBT 156,142 172,235 SHAREHOLDERS' EQUITY Common stock 2,698 2,698 Additional paid-in capital 79,113 80,066 Earnings reinvested in the business 318,827 273,800 -------- -------- 400,638 356,564 Less: Treasury stock, at cost 25,412 25,521 Other 7,481 3,653 -------- -------- 367,745 327,390 -------- -------- TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $789,434 $763,664 ======== ======== See Accompanying Notes to Consolidated Condensed Financial Statements. UNIVERSAL FOODS CORPORATION CONSOLIDATED CONDENSED STATEMENTS OF EARNINGS ($000's Omitted Except Per Share Amounts) (Unaudited) Three Months Nine Months Ended June 30, Ended June 30, 1995 1994 1995 1994 Total Revenue $207,542 $249,467 $587,090 $707,340 Operating Costs and Expenses: Cost of Products Sold 138,996 168,268 386,020 470,072 Selling and Administrative Expenses 41,981 52,816 126,011 154,899 Unusual Item - Gain on Sale of Frozen Foods Business --- --- (49,560) --- ------- -------- -------- ------ Operating Income 26,565 28,383 124,619 82,369 Interest Expense 3,729 4,170 11,659 11,702 ------- -------- -------- ------- Earnings Before Income Taxes 22,836 24,213 112,960 70,667 Income Taxes 8,279 8,903 49,173 26,323 ------- ------- ------- -------- Net Earnings $ 14,557 $ 15,310 $ 63,787 $ 44,344 ======= ======= ======= ======= Weighted Average Number of Common Shares Outstanding 26,076,000 26,040,000 26,053,000 26,159,000 ========== ========== ========== ========== Net Earnings Per Common Share $ .56 $ .59 $2.45 $1.70 ===== ===== ===== ===== Dividends Per Common Share $ .24 $ .23 $ .72 $ .69 ===== ===== ===== ===== See Accompanying Notes to Consolidated Condensed Financial Statements. UNIVERSAL FOODS CORPORATION CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS ($000's Omitted) (Unaudited) Nine Months Ended June 30, 1995 1994 Net cash provided by operating activities $ 6,514 $49,851 Cash flows from investing activities: Acquisition of property, plant and equipment (28,437) (40,645) Acquisition of new businesses (net of cash acquired) (12,633) (15,043) Proceeds from disposition of business and sale of property, plant and equipment and other productive assets 41,609 480 Increase in investments (4,418) (6,867) ------- ------- Net cash used in investing activities (3,879) (62,075) ------- ------- Cash flows from financing activities: Proceeds from additional borrowings 53,114 135,373 Reductions in debt (63,181) (56,460) Proceeds from options exercised and other 1,393 502 Purchase of treasury stock (1,759) (14,118) Dividends paid (18,760) (18,060) ------- ------- Net cash (used in) provided by financing activities (29,193) 47,237 ------- ------- Net (decrease) increase in cash and cash equivalents (26,558) 35,013 Cash and cash equivalents at beginning of period 43,430 11,356 ------- ------- Cash and cash equivalents at end of period $16,872 $46,369 ======= ======= Supplemental disclosure of cash flow information: Cash paid during the period for: Interest $10,912 $10,703 Income taxes 49,180 22,284 See Accompanying Notes to Consolidated Condensed Financial Statements. UNIVERSAL FOODS CORPORATION NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS 1. In the opinion of the Company, the accompanying unaudited consolidated condensed financial statements contain all adjustments (consisting of only normal recurring accruals) necessary to present fairly the financial position as of June 30, 1995 and September 30, 1994, the results of operations for the three and nine month periods ended June 30, 1995 and 1994 and cash flows for the nine month periods ended June 30, 1995 and 1994. The results of operations for any interim period are not necessarily indicative of the results to be expected for the full fiscal year. 2. Refer to the footnotes in the Company's annual financial statements for the year ended September 30, 1994, for a description of the accounting policies, which have been continued without change, and additional details of the Company's financial condition. The details in those notes have not changed except as a result of normal transactions in the interim. 3. Expenses are charged to operations in the year incurred. However, for interim reporting purposes, certain of these expenses are charged to operations based on an estimate rather than as expenses are actually incurred. 4. During the nine months ended June 30, 1995 and 1994, the Company repurchased 65,000 and 450,700 shares of common stock, respectively, for an aggregate price of $1,759,000 and $14,118,000, respectively. 5. For the nine months ended June 30, 1995, depreciation and amortization were $22,967,000 and $4,628,000, respectively. For the nine months ended June 30, 1994, depreciation and amortization were $25,532,000 and $4,381,000, respectively. 6. In June 1995, the Company refinanced its $55,000,000 revolving loan agreement, replacing the facility with a $70,000,000 multicurrency revolving loan agreement which matures in June 2000. Under the agreement, the Company has the option to elect to have interest rates determined based upon the LIBOR rate plus margin or the certificate of deposit rate plus margin. A commitment fee is payable on the unused amount of credit. 7. The Company acquired, effective April 21, 1995, at a cost of $9,252,000, Top Foods, a dehydrated vegetable processor located in The Netherlands. Silva-Laon, a dehydrated vegetable processor located in France, was acquired at a cost of $3,546,000, effective March 17, 1995. On January 1, 1994, the Company acquired Destillaciones Garcia de la Fuente, S.A. (DGF), a specialty flavor and fragrance company, at a cost of $11,100,000. On June 8, 1994, the Company acquired Mallow Foods in Midleton, Ireland, a leading processor of air and freeze- dried vegetables for $3,300,000. The acquisitions have been accounted for as purchases and, accordingly, the results of operations and financial position are reflected in the Consolidated Condensed Financial Statements from the effective dates of the acquisitions. On a consolidated performa basis the acquisitions were not significant to the Company's results of operations. 8. On December 21, 1994, the Company amended the Stock Purchase Agreement ("Agreement") with ConAgra, Inc. Under the amended Agreement ConAgra agreed to acquire 100% of the stock of Universal Frozen Foods Company for $202,000,000. The final purchase price of $202,000,000 included a one-time cash payment of $39,000,000 in addition to the base consideration of $163,000,000 that was paid August 1, 1994. The sale of the Frozen Foods business resulted in a pre-tax gain of $49,560,000 ($23,370,000 after-tax, or $.90 per share). The income tax provision related to the gain was 52.8% as a result of non-deductible basis differences relating to intangibles. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS, FINANCIAL CONDITION AND FORWARD LOOKING INFORMATION RESULTS OF OPERATIONS: Revenue from operations for the three months and nine months ended June 30, 1995, was $207,542,000 and $587,090,000, respectively, compared with $249,467,000 and $707,340,000 in 1994. The decrease in revenue for the three months and nine months ended June 30, 1995, of 16.8% and 17.0%, respectively, from the comparable prior year periods is a result of the sale of the Company's Frozen Foods business. Revenue from continuing operations, including the impact from companies acquired during fiscal 1994 and 1995, increased $33,463,000, or 19.2%, for the quarter ended June 30, and increased $94,667,000, or 19.2%, for the nine months ended June 30. Gross profit margins increased to 33.0% of revenues during the quarter compared with 32.5% during the same period last year. Gross profit margins for the first nine months increased to 34.2% from 33.5%. The improvement in gross profit margin for both the quarter and nine months ended is primarily due to product mix and the elimination of lower margin business in the Frozen Foods division. Selling and administrative expenses decreased to 20.2% of revenues during the third quarter compared to 21.2% during the same period last year. For the first nine months of fiscal 1995, selling and administrative expenses decreased to 21.5% of revenues from 21.9% last year. Interest expense in the quarter decreased to $3,729,000 from $4,170,000 in the same period last year and decreased to $11,659,000 from $11,702,000 for the nine months ended June 30, 1995 and 1994, respectively. The slight decrease in the current quarter primarily resulted from lower average outstanding debt, offset by higher interest rates, compared with the same period last year. Income tax expense for the quarter and nine months ended June 30, 1995 exceeded the 34% statutory rate primarily as a result of state income taxes and a higher than normal effective tax rate on the sale of the Frozen Foods business. FINANCIAL CONDITION: The current ratio increased to 1.8 at June 30, 1995, from 1.7 at September 30, 1994. Net working capital increased $11,511,000 to $147,187,000 at June 30, 1995 from $135,676,000 at September 30, 1994. Net cash provided by operating activities was $6,514,000 for the nine months ended June 30, 1995, compared to net cash provided of $49,851,000 for the nine months ended June 30, 1994. Cash provided by operating activities decreased primarily due to the tax payments related to the sale of the Frozen Foods business. Net cash used in investing activities was $3,879,000 for the nine months ended June 30, 1995. Cash used in investing activities in fiscal 1995 includes the receipt of $39,000,000 of cash from the sale of the Frozen Foods business. Also, capital additions of $28,437,000 and $40,645,000 for the nine months ended June 30, 1995 and 1994, respectively reflects the Company's continuing commitment to maintain and enhance product quality, further automate and upgrade manufacturing processes, and expand the business through internal growth. Included in investing activities are the acquisitions of new businesses as described in Note 7 on page 4. Net cash used in financing activities was $29,193,000 for the nine months ended June 30, 1995 compared to net cash provided by financing activities of $47,237,000 for the comparable prior year period. The increase in cash used for financing activities result from the sale of the Frozen Foods business providing cash for investing activities and reducing the amounts of short term borrowing required as of June 30. FORWARD LOOKING INFORMATION: Given the Company's nine month performance, management believes that full-year results will show gains over last year's earnings from continuing operations, but, as anticipated, will be down when results from the Frozen Foods business are included. PART II OTHER INFORMATION Item 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibit 27 Financial Data Schedule (b) No reports on Form 8-K were required to be filed during the quarter ended June 30, 1995. 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. UNIVERSAL FOODS CORPORATION Date: August 11, 19995 By: /s/ Terrence M. O'Reilly Terrence M. O'Reilly, Vice President, Secretary and General Counsel Date: August 11, 1995 By: /s/ Michael L. Hennen Michael L. Hennen, Corporate Controller EXHIBIT INDEX Exhibit Description 27 Financial Data Schedule EX-27 2 EXHIBIT 27
5 THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE CONSOLIDATED CONDENSED FINANCIAL STATEMENTS OF UNIVERSAL FOODS CORPORATION AS OF AND FOR THE NINE MONTHS ENDED JUNE 30, 1995 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 1,000 9-MOS SEP-30-1995 OCT-01-1994 JUN-30-1995 16,872 0 116,486 3,599 170,482 334,190 459,719 192,418 789,434 187,003 156,142 2,698 0 0 365,047 789,434 587,090 587,090 386,020 386,020 (49,560) 666 11,659 112,960 49,173 63,787 0 0 0 63,787 2.45 2.45 Unusual Item: Gain on sale of Frozen Foods business.
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