-----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, Qrjb6DDH96UXlN4Dgp1MxAPTNmjH/NKqhEaTSPssH3ZZnQgfewUMFMOe2LzoQGd+ sVk53ZOHfGG1bwdlOJM7Gg== 0000897069-96-000251.txt : 19960814 0000897069-96-000251.hdr.sgml : 19960814 ACCESSION NUMBER: 0000897069-96-000251 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960630 FILED AS OF DATE: 19960813 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: UNIVERSAL FOODS CORP CENTRAL INDEX KEY: 0000310142 STANDARD INDUSTRIAL CLASSIFICATION: BEVERAGES [2080] 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: 96610978 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 CORPORATION 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, 1996 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, 1996 Common Stock, par value $0.10 per share 25,416,346 shares ==================================================================== UNIVERSAL FOODS CORPORATION INDEX Page No. PART I, FINANCIAL INFORMATION: Consolidated Condensed Balance Sheets - June 30, 1996 and September 30, 1995. 1 Consolidated Condensed Statements of Earnings - Three and Nine Months Ended June 30, 1996 and 1995. 2 Consolidated Condensed Statements of Cash Flows - Nine Months Ended June 30, 1996 and 1995. 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 1996 September 30 ASSETS (Unaudited) 1995 CURRENT ASSETS: Cash and cash equivalents $ 4,722 $ 8,717 Trade accounts receivable 107,525 105,847 Inventories: Finished and in-process products 109,658 119,885 Raw materials and supplies 54,696 59,135 Prepaid expenses and other current assets 41,741 32,780 -------- -------- TOTAL CURRENT ASSETS 318,342 326,364 INVESTMENTS AND OTHER ASSETS 49,582 42,164 INTANGIBLES 145,386 148,654 PROPERTY, PLANT AND EQUIPMENT: Cost: Land and buildings 139,210 139,177 Machinery and equipment 338,361 308,204 -------- -------- 477,571 447,381 Less accumulated depreciation 208,059 187,693 -------- -------- 269,512 259,688 TOTAL ASSETS $782,822 $776,870 ======== ======== LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES: Short-term borrowings $ 4,016 $ 7,108 Accounts payable, accrued expenses and other liabilities 120,943 133,637 Federal and state income taxes 24,743 20,755 Current maturities on long-term debt 5,271 21,100 -------- -------- TOTAL CURRENT LIABILITIES 154,973 182,600 DEFERRED INCOME TAXES 14,321 14,514 OTHER DEFERRED LIABILITIES 18,718 19,198 ACCRUED EMPLOYEE AND RETIREE BENEFITS 39,777 38,100 LONG-TERM DEBT 193,342 160,678 SHAREHOLDERS' EQUITY Common stock 2,698 2,698 Additional paid-in capital 78,437 78,955 Earnings reinvested in the business 339,192 314,883 -------- -------- 420,327 396,536 Less: Treasury stock, at cost 44,326 24,770 Other 14,310 9,986 -------- -------- 361,691 361,780 -------- -------- TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $782,822 $776,870 ======== ======== 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 1996 1995 1996 1995 Revenue $200,776 $207,542 $594,256 $587,090 Operating costs and expenses: Cost of products sold 132,928 138,996 391,593 386,020 Selling and administrative expenses 39,925 41,981 123,898 126,011 Unusual item - gain on sale of Frozen Foods business --- --- --- (49,560) ------- ------- ------- ------- Operating income 27,923 26,565 78,765 124,619 Interest expense 4,071 3,729 11,452 11,659 ------- ------- ------- ------- Earnings before income taxes 23,852 22,836 67,313 112,960 Income taxes 8,131 8,279 23,560 49,173 ------- ------- ------- ------- Net earnings $ 15,721 $ 14,557 $ 43,753 $ 63,787 ======== ======== ======== ======== Weighted average number of common shares outstanding 25,716,000 26,076,000 25,919,000 26,053,000 ========== ========== ========== ========== Net earnings per common share $ .61 $ .56 $1.69 $2.45 ===== ===== ===== ===== Dividends per common share $ .25 $ .24 $ .75 $ .72 ===== ===== ===== ===== 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 1996 1995 Net cash provided by operating activities $ 61,695 $ 6,514 ------- ------- Cash flows from investing activities: Acquisition of property, plant and equipment (34,074) (28,437) Acquisition of new businesses (net of cash acquired) (529) (12,633) Proceeds from disposition of business and sale of property, plant and equipment and other productive assets --- 41,609 Other items, net (6,405) (4,418) ------- ------- Net cash used in investing activities (41,008) (3,879) Cash flows from financing activities: Proceeds from additional borrowings 98,801 53,114 Reductions in debt (85,679) (63,181) Proceeds from options exercised and other equity transactions 1,605 1,393 Purchase of treasury stock (19,965) (1,759) Dividends paid (19,444) (18,760) ------- ------- Net cash used in financing activities (24,682) (29,193) Net decrease in cash and cash equivalents (3,995) (26,558) Cash and cash equivalents at beginning of period 8,717 43,430 ------- ------- Cash and cash equivalents at end of period $ 4,722 $ 16,872 ======== ======== Supplemental disclosure of cash flow information: Cash paid during the period for: Interest $ 11,099 $ 10,912 Income taxes 20,830 49,180 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, 1996 and September 30, 1995, the results of operations for the three and nine month periods ended June 30, 1996 and 1995 and cash flows for the nine month periods ended June 30, 1996 and 1995. 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, 1995, 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, 1996 and 1995, the Company repurchased 588,670 and 65,000 shares of common stock, respectively, for an aggregate price of $21,808,000 and $1,759,000, respectively. 5. For the nine months ended June 30, 1996, depreciation and amortization were $23,978,000 and $3,591,000, respectively. For the nine months ended June 30, 1995, depreciation and amortization were $22,967,000 and $4,628,000, respectively. 6. On January 8, 1996, the Company issued two senior notes of $15,000,000 each, one bearing interest at 6.77%, due January 2010 and the other bearing interest at 6.68%, amortizing in seven equal, annual principal payments beginning January 2005. Proceeds will be used for general corporate purposes. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS, FINANCIAL CONDITION AND FORWARD LOOKING INFORMATION RESULTS OF OPERATIONS: Revenue from operations for the three and nine months ended June 30, 1996, was $200,776,000 and $594,256,000, respectively, compared with $207,542,000 and $587,090,000 a year ago. Revenue for the three months ended June 30, 1996 decreased by 3.3% as compared to the prior year third quarter. Revenue for the nine months ended June 30, 1996 increased by 1.2% compared with the prior year period. The elimination of some lower margin business and weakness in selected markets in the Flavor Division caused revenue to be below the prior year quarter. These factors also partially offset increased revenues from the Color and Dehydrated operations for the nine months ended June 30, 1996. Gross profit margins increased to 33.8% of revenues during the third quarter as compared with 33.0% during the same period last year. Gross profit margins for the first nine months decreased slightly to 34.1% of revenue as compared to 34.2% of revenue during the same period last year. The Company's continued focus on cost reduction resulted in a decrease of selling and administrative expenses to 19.9% of revenues during the third quarter compared to 20.2% during the same period last year. For the first nine months of fiscal 1996, selling and administrative expenses decreased to 20.8% of revenues from 21.5% last year. Interest expense in the third quarter increased to $4,071,000 from $3,729,000 in the same period last year and decreased to $11,452,000 from $11,659,000 for the nine months ended June 30, 1996 and 1995, respectively. The increase in interest for the quarter as compared to the prior year third quarter resulted from higher average long- term debt balances used for general corporate purposes. The effective income tax rate for the quarter and nine months ended June 30, 1996 exceeded the 34.0% statutory rate primarily as a result of state income taxes. The effective income tax rate in 1995 exceeded 34.0% as a result of a higher than normal effective tax rate on the sale of the Frozen Foods business. FINANCIAL CONDITION: The current ratio increased to 2.1 at June 30, 1996, from 1.8 at September 30, 1995 due primarily to a decrease in current liabilities of $27,627,000. Current liabilities were reduced primarily by a reduction in short-term borrowings and current maturities on long- term debt totaling $18,921,000. Net working capital increased $19,605,000 to $163,369,000 at June 30, 1996 from $143,764,000 at September 30, 1995. Net cash provided by operating activities was $61,695,000 for the nine months ended June 30, 1996, compared to net cash provided by operating activities of $6,514,000 for the nine months ended June 30, 1995. The cash provided by operations in fiscal 1995 was reduced by tax payments related to the sale of the Frozen Foods business. Net cash used in investing activities was $41,008,000 for the nine months ended June 30, 1996 as compared with $3,879,000 used in investing activities in fiscal 1995. The change is primarily due to the proceeds received in 1995 from the sale of the Frozen Foods business. Included in investing activities are capital additions of $34,074,000 for the nine months ended June 30, 1996. The capital expenditure program reflects the Company's continuing commitment to maintain and enhance product quality, further automate and upgrade manufacturing processes, and expand capacity required by the businesses' internal growth. Major projects in-process include construction of additional capacity for our aroma chemical and fragrance facility in Spain and a state-of-the-art BioProducts facility in France. Financing activities used $24,682,000 for the nine months ended June 30, 1996 compared to $29,193,000 in 1995. Proceeds from additional borrowings of $98,801,000 in 1996 were used to refinance other long- term debt obligations and facilitate share repurchases. Dividends of $19,444,000 and $18,760,000 were also paid during the first nine months of 1996 and 1995, respectively. FORWARD LOOKING INFORMATION: Four of the five businesses performed well during the quarter and should continue to perform well for the remainder of the year. The Flavor business results were below expectations due to weakness in selected markets. The Company is working with customers on a variety of new product development projects to provide for future growth. 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, 1996. 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 13, 1996 By: /s/ Terrence M. O'Reilly Terrence M. O'Reilly, Vice President, Secretary and General Counsel Date: August 13, 1996 By: /s/ Michael L. Hennen Michael L. Hennen, Corporate Controller EX-27 2 UNIVERSAL FOODS CORPORATION FINANCIAL DATA SCHEDUL
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, 1996 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 1,000 9-MOS SEP-30-1996 OCT-01-1995 JUN-30-1996 4,722 0 110,698 3,173 164,354 318,342 477,571 208,059 782,822 154,973 193,342 0 0 2,698 358,993 782,822 594,256 594,256 391,593 515,491 0 120 11,452 67,313 23,560 43,753 0 0 0 43,753 1.69 1.69
-----END PRIVACY-ENHANCED MESSAGE-----