-----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, mh8+o2kHTORnK6jbHfg9dHT5xeow0XIbcW4l4Q9hKyYAh1shl0nBs3SBGcGjuRR7 kfuC3j2GVJYaY2uyKJyhSg== 0000897069-94-000029.txt : 19940210 0000897069-94-000029.hdr.sgml : 19940210 ACCESSION NUMBER: 0000897069-94-000029 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19931231 FILED AS OF DATE: 19940209 FILER: COMPANY DATA: COMPANY CONFORMED NAME: UNIVERSAL FOODS CORP CENTRAL INDEX KEY: 0000310142 STANDARD INDUSTRIAL CLASSIFICATION: 2000 IRS NUMBER: 390561070 STATE OF INCORPORATION: WI FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 34 SEC FILE NUMBER: 001-07626 FILM NUMBER: 94505401 BUSINESS ADDRESS: STREET 1: P O BOX 737 CITY: MILWAUKEE STATE: WI ZIP: 53201 BUSINESS PHONE: 4142716755 MAIL ADDRESS: STREET 1: PO BOX 737 CITY: MILWAUKEE STATE: WI ZIP: 53201 10-Q 1 TEST ========================================================================== 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: December 31, 1993 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 December 31, 1993 Common Stock, par value $0.10 per share 26,107,761 shares ========================================================================== UNIVERSAL FOODS CORPORATION INDEX Page No. PART I, FINANCIAL INFORMATION: Consolidated Condensed Balance Sheets - December 31, 1993 and September 30, 1993............ 1 Consolidated Condensed Statements of Earnings - Three Months Ended December 31, 1993 and 1992.............................................2 Consolidated Condensed Statements of Cash Flows - Three Months Ended December 31, 1993 and 1992........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 4, Submission of Matters to a Vote of Security Holders.....................................7 Item 6, Exhibits and Reports on Form 8-K...............8 Signatures.............................................9 PART I FINANCIAL INFORMATION UNIVERSAL FOODS CORPORATION CONSOLIDATED CONDENSED BALANCE SHEETS ($000's Omitted) December 31 1993 September 30 ASSETS (Unaudited) 1993 CURRENT ASSETS: Cash and cash equivalents $ 20,868 $ 11,356 Trade accounts receivable 86,761 94,339 Inventories Finished and in-process products 126,562 114,178 Raw materials and supplies 66,837 60,404 Prepaid expenses and other current assets 40,048 31,841 ------- ------- TOTAL CURRENT ASSETS 341,076 312,118 INVESTMENTS AND OTHER ASSETS 28,404 28,502 INTANGIBLES 106,229 107,381 PROPERTY, PLANT AND EQUIPMENT: Cost: Land and buildings 132,942 131,709 Machinery and equipment 349,294 340,446 ------- ------- 482,236 472,155 Less accumulated depreciation 198,470 190,163 ------- ------- 283,766 281,992 ------- ------- TOTAL ASSETS $759,475 $729,993 ======== ======== LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES: Short-term borrowings $ 23,775 $ 14,945 Accounts payable, accrued expenses and other liabilities 124,355 142,980 Federal and state income taxes 17,332 11,035 Current maturities on long-term debt 6,321 5,663 ------- ------- TOTAL CURRENT LIABILITIES 171,783 174,623 DEFERRED INCOME TAXES 20,232 20,557 OTHER DEFERRED LIABILITIES 20,078 20,571 ACCRUED EMPLOYEE AND RETIREE BENEFITS 38,229 37,269 LONG-TERM DEBT 204,532 171,907 SHAREHOLDERS' EQUITY: Common stock 2,698 2,698 Additional paid-in capital 80,512 79,826 Earnings reinvested in the business 255,311 246,939 ------- ------- 338,521 329,463 Less: Treasury stock, at cost 23,864 14,693 Other 10,036 9,704 ------- ------- 304,621 305,066 ------- ------- TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $759,475 $729,993 ======= ======= See accompanying Notes to Consolidated Condensed Financial Statements. -1- UNIVERSAL FOODS CORPORATION CONSOLIDATED CONDENSED STATEMENTS OF EARNINGS ($000's Omitted Except Per Share Amounts) (Unaudited) Three Months Ended December 31 1993 1992 Total Revenue $220,791 $209,374 Cost of Products Sold 144,159 136,673 -------- -------- Gross Profit 76,632 72,701 Selling and Administrative Expenses 49,966 47,087 -------- -------- Operating Income 26,666 25,614 Interest Expense 3,530 3,894 -------- -------- Earnings Before Income Taxes 23,136 21,720 Income Taxes 8,676 8,199 -------- -------- Earnings Before Accounting Changes 14,460 13,521 Accounting Changes --- (23,563) -------- -------- Net Earnings (Loss) $ 14,460 $(10,042) Weighted Average Number of Common Shares Outstanding 26,409,000 26,324,000 ========== ========== Earnings Per Common Share: Earnings Before Accounting Changes $ .55 $ .51 Accounting Changes --- (.90) ----- ------- Net Earnings (Loss) $ .55 $(.39) ===== ====== Dividends Per Common Share $ .23 $ .22 ===== ====== See Accompanying Notes to Consolidated Condensed Financial Statements. -2- UNIVERSAL FOODS CORPORATION CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS ($000's Omitted) (Unaudited) Three Months Ended December 31 1993 1992 Net cash used in operating activities $ (4,054) $ (3,498) Cash flows from investing activities: Acquisition of property, plant (11,631) (7,308) and equipment Acquisition of new business --- (4,767) Proceeds from sale of property, plant and equipment and other productive assets 480 310 Increase in investments (154) (109) -------- -------- Net cash used in investing activities (11,305) (11,874) Cash flows from financing activities: Proceeds from additional borrowings 53,320 31,201 Reductions in debt (11,207) (14,290) Proceeds from options exercised and dividend reinvestment (58) 408 Purchase of treasury stock (11,097) --- Dividends paid (6,087) (5,794) -------- -------- Net cash provided by financing activities 24,871 11,525 Net increase (decrease) in cash and cash equivalents 9,512 (3,847) Cash and cash equivalents at beginning of period 11,356 11,030 -------- -------- Cash and cash equivalents at end of period $ 20,868 $ 7,183 ======== ======== Supplemental Disclosure of Cash Flow Information: Cash paid during the period for: Interest $ 2,883 $ 3,482 Income taxes 3,081 1,073 See Accompanying Notes to Consolidated Condensed Financial Statements. -3- 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 December 31, 1993 and September 30, 1993, and the results of operations and cash flows for the three month periods ended December 31, 1993 and 1992. 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, 1993, 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. On December 15, 1993, the Company issued $20,000,000 of 6.38% senior notes, due in four annual principal payments of $5,000,000 beginning December 15, 2000, and $20,000,000 of 6.70% senior notes, due in nine annual principal payments of $2,222,222 beginning December 15, 2001. 5. During the three months ended December 31, 1993, the Company repurchased 355,700 shares of common stock for an aggregate price of $11,097,000. 6. For the three months ended December 31, 1993, depreciation and amortization were $9,099,000 and $1,416,000, respectively. For the three months ended December 31, 1992, depreciation and amortization were $7,811,000 and $1,361,000, respectively. 7. The Company acquired Destillaciones Garcia de la Fuente, S.A. (DGF), a specialty flavor and fragrance company, effective January 1, 1994. The acquisition has been accounted for as a purchase and, accordingly, the results of operations and the financial position of DGF will be reflected in The Consolidated Condensed Financial Statements from the effective date of the acquisition. The impact of the acquisition on the financial statements of the Company is not material. 8. Effective October 1, 1992, the Company adopted the provisions of Statement of Accounting Standards No. 106 (SFAS No. 106), "Employer's Accounting for Postretirement Benefits Other Than Pensions" and Statement of Accounting Standards No. 112 (SFAS No. 112), "Employer's Accounting for Postemployment Benefits", whereby the cost of postretirement and postemployment benefits is accrued during an employee's active service period rather than expensed as incurred. The after-tax transition effect of adopting SFAS No. 106 and 112 on an immediate recognition basis, as of October 1, 1992, reduced fiscal 1993 first quarter earnings by $23,563,000, or $.90 per share. In addition, application of SFAS No. 106 and 112 decreased fiscal 1993 first quarter Earnings Before Accounting Changes by $1,007,000, net of tax, or $.04 per share. -4- MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS, FINANCIAL CONDITION AND FORWARD LOOKING INFORMATION RESULTS OF OPERATIONS: Revenue from operations was $220,791,000 during the three months ended December 31, 1993, compared with $209,374,000 a year ago. Revenue for the quarter increased 5.5% over the comparable prior year results. Gross profit margins remained unchanged at 34.7% of revenue, during the three months ended December 31, 1993 compared with the same period last year. Selling and administrative expenses remained relatively flat at 22.6% of revenue during the three months ended December 31, 1993 compared to 22.5% for the same period last year. Interest expense in the first quarter decreased to $3,530,000 from $3,894,000 during the same period last year. This decrease is primarily due to lower interest rates, offset by slightly higher average outstanding debt. The income tax provision for the first three months of fiscal 1994 exceeded the 34% statutory rate primarily as a result of the state income tax provision and the non-tax deductibility of certain expenses such as the amortization of intangibles. FINANCIAL CONDITION: The current ratio increased to 2.0:1 for the period ended December 31, 1993, compared with 1.8:1 for the period ended September 30, 1993. Net working capital increased $31,798,000 to $169,293,000 at December 31, 1993 from $137,495,000 at September 30, 1993. Net cash used in operating activities was $4,054,000 for the quarter ended December 31, 1993. Depreciation and amortization were $9,099,000 and $1,416,000 for the quarter, respectively. Net cash used in investing activities was $11,305,000 for the three months ended December 31, 1993. Included in investing activities are capital additions of $11,631,000. The capital expenditure program 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. Major projects in-process include an expansion of the confection room at the Flavor Division's Amboy plant and rearrangement and upgrade of the packaging systems at the Pasco Frozen Foods plant. Current capital expenditures are in excess of the prior year first quarter additions of $7,308,000 due to the timing of the completion of certain major projects. -5- MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS, FINANCIAL CONDITION AND FORWARD LOOKING INFORMATION (Continued) FINANCIAL CONDITION: (Continued) Net cash provided by financing activities was $24,871,000 for the quarter ended December 31, 1993. Included in financing activities are proceeds from additional borrowings of $53,320,000 and reductions of debt of $11,207,000. Dividends of $6,087,000 were paid in the first quarter. FORWARD LOOKING INFORMATION: Net earnings before accounting changes increased 6.9% for the first three months of Fiscal 1994 compared with Fiscal 1993. The Company expects that there will continue to be steady growth over prior year quarterly earnings for the remainder of Fiscal 1994 as division volumes and revenue remain strong and profitability in the flavor and frozen potato industry improves. -6- PART II OTHER INFORMATION Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS The Annual Meeting of Shareholders of Universal Foods Corporation was held on Thursday, January 27, 1994. At the meeting the following matters were voted upon by the Shareholders. 26,462,615 shares were entitled to vote at the meeting, and 23,999,644 shares (90.69%) were voted. The following persons were elected to a three year term as Directors of the Company: For Against John F. Bergstrom 23,804,094 195,550 Leon T. Kendall 23,838,516 161,128 Charles S. McNeer 23,840,732 158,912 Kenneth P. Manning 23,852,073 147,571 The following person was elected to fulfill the remaining one year of Mr. Walter H. Drew's term as a Director of the Company: For Against Essie Whitelaw 23,775,790 223,854 Mr. Drew resigned from the Board for personal reasons. Broker non-votes for the election of Directors was 138,570. The following persons continued in office as Directors in accordance with their previous election: Michael E. Batten James L. Forbes Dr. Olan D. Forker Dr. Carol I. Waslien Ghazaii James H. Keyes John L. Murray Guy A. Osborn William U. Parfet The Shareholders ratified the appointment of Deloitte & Touche, certified public accountants, as the independent auditors of the Company for 1994. Of the 26,462,615 shares entitled to vote at the meeting, 23,792,657 shares voted for ratification, 50,911 shares voted against ratification and 156,076 shares abstained. There were 138,570 Broker non-votes. The Shareholders also approved the 1994 Employees Stock Plan. 22,161,907 shares of the 24,462,615 shares entitled to vote at the meeting voted for approval, 1,626,704 shares voted against the plan and 211,033 shares abstained. -7- Item 6. EXHIBITS AND REPORTS ON FORM 8-K (b) No reports on Form 8-K were required to be filed during the quarter ended December 31, 1993. -8- 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: February 9, 1994 By: /s/ Terrence M. O'Reilly Terrence M. O'Reilly, Vice President, Secretary and General Counsel Date: February 9, 1994 By: /s/ Geoffrey J. Hibner Geoffrey J. Hibner, Vice President - Finance -9- -----END PRIVACY-ENHANCED MESSAGE-----