-----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, PIxx8KXv+HOwTWu7fRy0c8+cb74WTsoHFAiNJ4xXYweD8A8aYZlS4ai6kW/TIKkz 2Gi8l7IXBkKrYuSUlfljaA== 0000897069-94-000067.txt : 19940525 0000897069-94-000067.hdr.sgml : 19940525 ACCESSION NUMBER: 0000897069-94-000067 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19940331 FILED AS OF DATE: 19940516 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: 1934 Act SEC FILE NUMBER: 001-07626 FILM NUMBER: 94528596 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 FORM 10-Q FOR UNIVERSAL FOODS CORPORATION =================================================================== 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: March 31, 1994 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 March 31, 1994 Common Stock, par value $0.10 per share 26,027,105 shares =================================================================== UNIVERSAL FOODS CORPORATION INDEX Page No. PART I, FINANCIAL INFORMATION: Consolidated Condensed Balance Sheets - March 31, 1994 and September 30, 1993. 1 Consolidated Condensed Statements of Earnings - Three and Six Months Ended March 31, 1994 and 1993. 2 Consolidated Condensed Statements of Cash Flows - Six Months Ended March 31, 1994 and 1993. 3 Notes to Consolidated Condensed Financial Statements. 4 Management's Discussion and Analysis 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) March 31 1994 September 30 ASSETS (Unaudited) 1993 CURRENT ASSETS: Cash and cash equivalents $ 21,895 $ 11,356 Trade accounts receivable 103,783 94,339 Inventory: Finished and in-process products 121,138 114,178 Raw materials and supplies 56,672 60,404 Prepaid expenses and other current assets 44,305 31,841 -------- -------- TOTAL CURRENT ASSETS 347,793 312,118 INVESTMENTS AND OTHER ASSETS 30,515 28,502 INTANGIBLES 112,181 107,381 PROPERTY, PLANT AND EQUIPMENT Cost: Land and buildings 136,024 131,709 Machinery and equipment 366,066 340,446 -------- -------- 502,090 472,155 Less accumulated depreciation 210,510 190,163 -------- -------- 291,580 281,992 -------- -------- TOTAL ASSETS $782,069 $729,993 -------- -------- LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES: Short-term borrowings $ 57,103 $ 14,945 Accounts payable, accrued expenses and other liabilities 114,072 142,980 Federal and state income taxes 11,667 11,035 Current maturities on long-term debt 4,744 5,663 -------- -------- TOTAL CURRENT LIABILITIES 187,586 174,623 DEFERRED INCOME TAXES 19,989 20,557 OTHER DEFERRED LIABILITIES 18,595 20,571 ACCRUED EMPLOYEE AND RETIREE BENEFITS 39,184 37,269 LONG-TERM DEBT 206,498 171,907 SHAREHOLDERS' EQUITY Common stock 2,698 2,698 Additional paid-in capital 80,356 79,826 Earnings reinvested in the business 263,901 246,939 -------- -------- 346,955 329,463 Less: Treasury stock, at cost 26,488 14,693 Other 10,250 9,704 -------- -------- 310,217 305,066 -------- -------- TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $782,069 $729,993 ======== ======== 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 Six Months Ended March 31 Ended March 31 1994 1993 1994 1993 Total Revenue $237,082 $216,663 $457,873 $426,037 Cost of Products Sold 157,645 144,688 301,804 281,361 -------- -------- -------- -------- Gross Profit 79,437 71,975 156,069 144,676 Selling and Administrative Expenses 52,117 46,526 102,083 93,613 -------- -------- -------- -------- Operating Income 27,320 25,449 53,986 51,063 Interest Expense 4,002 3,913 7,532 7,807 -------- -------- -------- -------- Earnings Before Income Taxes 23,318 21,536 46,454 43,256 Income Taxes 8,744 8,130 17,420 16,329 -------- -------- -------- -------- Earnings Before Accounting Changes 14,574 13,406 29,034 26,927 Accounting Changes -- -- -- 23,563 -------- -------- -------- -------- Net Earnings $ 14,574 $ 13,406 $ 29,034 $ 3,364 -------- -------- -------- -------- Weighted Average Number of Common Shares Outstanding 26,024,000 26,350,000 26,218,000 26,337,000 ========== ========== ========== ========== Earnings Per Common Share: Earnings Before Ac- counting Changes $ .56 $ .51 $ 1.11 $ 1.02 Accounting Changes -- -- -- (.90) ------ ------ ------ ------ Net Earnings $ .56 $ .51 $ 1.11 $ .12 ====== ====== ====== ====== Dividends Per Common Share $ .23 $ .22 $ .46 $ .44 ====== ====== ====== ====== See Accompanying Notes to Consolidated Condensed Financial Statements. UNIVERSAL FOODS CORPORATION CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS ($000's Omitted) (Unaudited) Six Months Ended March 31 1994 1993 Cash flows from operating activities: Net earnings $ 29,034 $ 3,364 Adjustments to reconcile net earnings to cash provided by (used in) operating activities: Cumulative effect of accounting changes -- 23,563 Depreciation and Amortization 20,667 18,122 Changes in operating assets and liabilities and other adjustments (49,372) (46,084) ------- ------- Net cash provided by (used in) operating activities $ 329 $ (1,035) -------- -------- Cash flows from investing activities: Acquisition of property, plant and equipment (25,969) (16,802) Acquisition of new business (11,061) (4,767) Proceeds from sale of property,plant and equipment and other productive assets 480 344 Increase in investments (1,970) (722) -------- -------- Net cash used in investing activities (38,520) (21,947) Cash flows from financing activities: Proceeds from additional borrowings 102,793 49,356 Reductions in long-term debt (28,056) (18,271) Proceeds from options exercised and dividend reinvestment 183 199 Purchase of treasury stock (14,118) --- Dividends paid (12,072) (11,591) -------- -------- Net cash provided by financing activities 48,730 19,693 Net increase (decrease) in cash and cash equivalents 10,539 (3,289) Cash and cash equivalents at beginning of period 11,356 11,030 -------- -------- Cash and cash equivalents at end of period $ 21,895 $ 7,741 ======== ======== Supplement Disclosure of Cash Flow Information: Cash paid during the period for: Interest $ 6,176 $ 8,685 Income taxes 17,563 15,888 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 March 31, 1994 and September 30, 1993, and the results of operations and cash flows for the three and six month periods ended March 31, 1994 and 1993. 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 six months ended March 31, 1994, the Company repurchased 450,700 shares of common stock for an aggregate price of $14,118,000. 6. For the six months ended March 31, 1994, depreciation and amortization were $17,761,000 and $2,906,000, respectively. For the six months ended March 31, 1993, depreciation and amortization were $15,442,000 and $2,680,000 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 financial position of DGF are 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. On April 18, 1994 the Company announced the signing of an agreement to sell for cash its Frozen Foods Division to ConAgra, Inc. The agreement provides for a purchase price which reflects a premium over book value; no other terms were disclosed. The transaction is expected to close on June 1, 1994. 9. 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 the six months ended March 31, 1993 Earnings Before Accounting Changes by $1,532,000, net of tax, or $.06 per share. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS, FINANCIAL CONDITION AND FORWARD LOOKING INFORMATION RESULTS OF OPERATIONS: Revenue from operations for the second quarter was $237,082,000, a 9% increase from $216,663,000 reported in the comparable quarter last year. Revenue for the first six months ended March 31, 1994, was $457,873,000, a 7% increase from the prior year's sales of $426,037,000. Gross profit margins increased to 33.5% of revenues during the second quarter compared with 33.2% during the same period last year. Gross profit margins for the first six months increased to 34.1% from 34.0%. Selling and administrative expenses increased slightly to 22.0% of revenues during the second quarter compared with 21.5% during the same period last year. For the first six months of fiscal 1994 selling and administrative expenses increased to 22.3% from 22.0%. Interest expense in the second quarter increased to $4,002,000 from $3,913,000 in the same period last year and decreased to $7,532,000 from $7,807,000 for the six months ended March 31, 1994 and 1993, respectively. The increase in the current quarter primarily resulted from higher average outstanding debt, slightly offset by lower interest rates, compared with the same period last year. The decrease year-to-date is primarily due to lower interest rates during the six-month period. The income tax provision for the second quarter and first six 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 1.9:1 at March 31, 1994, from 1.8:1 at September 30, 1993. Net working capital increased $22,712,000 to $160,207,000 at March 31, 1994 from $137,495,000 at September 30, 1993. Net cash used in investing activities was $38,520,000 for the six months ended March 31, 1994. Included in investing activities are capital additions of $25,969,000 year-to-date. 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 currently underway include an expansion of the confection room at the Flavor Division's Amboy plant and upgrade of the software used by the North American operations of the Flavor Division. Also included in investing activities is the acquisition of a new business for $11,061,000. This represents the acquisition of DGF in the second quarter as described in Note #7 on page 4. Net cash provided by financing activities was $48,730,000 for the six-month period. Included in financing activities are proceeds from additional borrowings of $102,793,000 and reductions of debt of $28,056,000 for the six months ended March 31, 1994. The net increase in debt was used primarily to fund capital expenditures, treasury stock purchases and the acquisition of DGF. Dividends of $5,985,000 were paid in the second quarter. FORWARD LOOKING INFORMATION: Management is pleased with the Company's progress so far this year. The Company expects continued growth in volumes, revenue, and operating profit from its on-going businesses during the remainder of the year. PART II OTHER INFORMATION 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 March 31, 1994. 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: May 12, 1994 By: /s/ Terrence M. O'Reilly Terrence M. O'Reilly, Vice President, Secretary and General Counsel Date: May 12, 1994 By: /s/ Geoffrey J. Hibner Geoffrey J. Hibner, Vice President - Finance -----END PRIVACY-ENHANCED MESSAGE-----