-----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, AKVDoM6OUOEbtwyz1gAWplOyEuqMpZjfyFAr2jzbhliKP8uKMIBfgNRl+9FSHk2Q +hOvXdVXTLB3TdPrdeFvPg== 0000897069-95-000060.txt : 19950516 0000897069-95-000060.hdr.sgml : 19950516 ACCESSION NUMBER: 0000897069-95-000060 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19950331 FILED AS OF DATE: 19950515 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: 95538599 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: March 31, 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 April 30, 1995 Common Stock, par value $0.10 per share 26,076,565 shares ======================================================================== UNIVERSAL FOODS CORPORATION INDEX Page No. PART I, FINANCIAL INFORMATION: Consolidated Condensed Balance Sheets - March 31, 1995 and September 30, 1994. 1 Consolidated Condensed Statements of Earnings - Three and Six Months Ended March 31, 1995 and 1994. 2 Consolidated Condensed Statements of Cash Flows - Six Months Ended March 31, 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 UNIVERSAL FOODS CORPORATION CONSOLIDATED CONDENSED BALANCE SHEETS ($000's Omitted) March 31 1995 September 30 ASSETS (Unaudited) 1994 CURRENT ASSETS: Cash and cash equivalents $ 21,916 $ 43,430 Trade accounts receivable 102,186 95,336 Inventory: Finished and in-process products 100,928 101,046 Raw materials and supplies 61,177 55,075 Prepaid expenses and other current assets 33,808 32,941 -------- -------- TOTAL CURRENT ASSETS 320,015 327,828 INVESTMENTS AND OTHER ASSETS 40,196 32,328 INTANGIBLES 146,178 147,789 PROPERTY, PLANT AND EQUIPMENT: Cost: Land and buildings 126,840 118,538 Machinery and equipment 318,695 309,847 -------- -------- 445,535 428,385 Less accumulated depreciation 187,212 172,666 -------- -------- 258,323 255,719 -------- -------- TOTAL ASSETS $764,712 $763,664 ======== ======== LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES: Short-term borrowings $ 10,756 $ 4,527 Accounts payable, accrued expenses and other liabilities 119,830 138,153 Federal and state income taxes 12,196 28,697 Current maturities on long-term debt 20,318 20,775 -------- -------- TOTAL CURRENT LIABILITIES 163,100 192,152 DEFERRED INCOME TAXES 20,516 17,300 OTHER DEFERRED LIABILITIES 18,535 19,414 ACCRUED EMPLOYEE AND RETIREE BENEFITS 37,411 35,173 LONG-TERM DEBT 168,457 172,235 SHAREHOLDERS' EQUITY Common stock 2,698 2,698 Additional paid-in capital 79,224 80,066 Earnings reinvested in the business 310,527 273,800 -------- -------- 392,449 356,564 Less: Treasury stock, at cost 25,368 25,521 Other 10,388 3,653 -------- -------- 356,693 327,390 -------- -------- TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $764,712 $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 Six Months Ended March 31 Ended March 31 1995 1994 1995 1994 Total Revenue $191,824 $237,082 $379,548 $457,873 Operating Costs and Expenses: Cost of Products Sold 124,653 157,645 247,024 301,804 Selling and Administrative Expenses 41,801 52,117 84,030 102,083 Unusual Item - Gain on Sale of Frozen Foods Business --- --- (49,560) --- -------- -------- -------- -------- Operating Income 25,370 27,320 98,054 53,986 Interest Expense 3,962 4,002 7,930 7,532 -------- -------- -------- -------- Earnings Before Income Taxes 21,408 23,318 90,124 46,454 Income Taxes 7,760 8,744 40,894 17,420 -------- -------- -------- -------- Net Earnings $ 13,648 $ 14,574 $ 49,230 $ 29,034 ======== ========= ========= ======== Weighted Average Number of Common Shares Outstanding 26,023,000 26,024,000 26,042,000 26,218,000 ========== ========== ========== ========== Net Earnings Per Common Share $ .52 $ .56 $1.89 $1.11 ======= ======== ======= ======== Dividends Per Common Share $ .24 $ .23 $ .48 $ .46 ======= ======== ======= ======== 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 1995 1994 Net cash (used in) provided by operating activities $ (26,404) $ 329 --------- --------- Cash flows from investing activities: Acquisition of property, plant and equipment (13,936) (25,969) Acquisition of new businesses (net of cash acquired) (2,978) (11,061) Proceeds from disposition of business and sale of property, plant and equipment and other productive assets 41,609 480 Increase in investments (2,068) (1,970) -------- -------- Net cash provided by (used in) investing activities 22,627 (38,520) Cash flows from financing activities: Proceeds from additional borrowings 30,524 102,793 Reductions in debt (35,268) (28,056) Proceeds from options exercised and other 1,269 183 Purchase of treasury stock (1,759) (14,118) Dividends paid (12,503) (12,072) -------- -------- Net cash (used in) provided by financing activities (17,737) 48,730 Net (decrease) increase in cash and cash equivalents (21,514) 10,539 Cash and cash equivalents at beginning of period 43,430 11,356 -------- -------- Cash and cash equivalents at end of period $ 21,916 $ 21,895 ======== ======== Supplemental Disclosure of Cash Flow Information: Cash paid during the period for: Interest $ 6,831 $ 6,176 Income taxes 42,746 17,563 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, 1995 and September 30, 1994, the results of operations for the three and six month periods ended March 31, 1995 and 1994 and cash flows for the six month periods ended March 31, 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 six months ended March 31, 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 six months ended March 31, 1995, depreciation and amortization were $15,018,000 and $3,193,000, respectively. For the six months ended March 31, 1994, depreciation and amortization were $17,761,000 and $2,906,000, respectively. 6. The Company acquired Silva-Laon, a dehydrated vegetable processor, 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. 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. The impact of the acquisitions on the financial statements of the Company is not material. 7. 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. 8. The Company acquired at a cost of $9,252,000, Top Foods, a dehydrated vegetable processor located in The Netherlands, effective April 21, 1995. The acquisition will be accounted for as a purchase and, accordingly, the results of operations and the financial position of Top Foods will be reflected in the Consolidated Condensed Financial Statements from the effective date of the acquisition. The impact of the acquisition on the future financial statements of the Company is not expected to be material. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS, FINANCIAL CONDITION AND FORWARD LOOKING INFORMATION RESULTS OF OPERATIONS: Revenue from operations for the quarter and six months ended March 31, 1995, was $191,824,000 and $379,548,000, respectively, compared with $237,082,000 and $457,873,000 a year ago. The decrease in revenue for the quarter and six months ended March 31, 1995, of 19.1% and 17.1%, respectively, from the comparable prior year periods resulted from 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 $29,688,000, or 18.3%, for the quarter ended March 31, and increased $61,204,000, or 19.2%, for the six months ended March 31. Gross profit margins increased to 35.0% of revenues during the second quarter compared with 33.5% during the same period last year. Gross profit margins for the first six months increased to 34.9% from 34.1%. Selling and administrative expenses decreased to 21.8% of revenues during the second quarter compared to 22.0% during the same period last year. For the first six months of fiscal 1995, selling and administrative expenses decreased to 22.1% of revenues from 22.3% last year. Interest expense in the second quarter decreased to $3,962,000 from $4,002,000 in the same period last year and increased to $7,930,000 from $7,532,000 for the six months ended March 31, 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. The increase year-to-date is primarily due to higher interest rates during the six-month period. Income tax expense for the quarter and six months ended March 31, 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 2.0 at March 31, 1995, from 1.7 at September 30, 1994. Net working capital increased $21,239,000 to $156,915,000 at March 31, 1995 from $135,676,000 at September 30, 1994. Net cash used in operating activities was $26,404,000 for the six months ended March 31, 1995, compared to net cash provided of $329,000 for the six months ended March 31, 1994. Cash used in operating activities increased primarily because of the tax payments related to the sale of the Frozen Foods business. Net cash provided by investing activities was $22,627,000 for the six months ended March 31, 1995. Cash provided by investing activities in fiscal 1995 includes the receipt of $39,000,000 of cash from the sale of the Frozen Foods business. Also included in investing activities are capital additions of $13,936,000 and $25,969,000 for the six months ended March 31, 1995 and 1994, respectively. 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. Included in investing activities are the acquisitions of new businesses as described in Note 6 on page 4. Net cash used in financing activities was $17,737,000 for the six months ended March 31, 1995 compared to net cash provided by financing activities of $48,730,000 for the comparable prior year period. The increase in cash used for financing activities resulted from the sale of the Frozen Foods business providing cash for investing activities and the repayment of debt. FORWARD LOOKING INFORMATION: Management believes the Company continues to be on track for improvement in earnings from the Company's continuing operations in 1995. Revenue increases will come from both existing businesses and acquisitions. Economic conditions in Mexico, where the Company has operations, remain a concern but are expected to have a limited impact over the remainder of the year. 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 March 31, 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: May 12, 1995 By: /s/ Terrence M. O'Reilly Terrence M. O'Reilly, Vice President, Secretary and General Counsel Date: May 12, 1995 By: /s/ Michael L. Hennen Michael L. Hennen, Corporate Controller EXHIBIT INDEX Exhibit No. Description 27 Financial Data Schedule EX-27 2 FINANCIAL DATA SCHEDULE TO FORM 10-Q
5 THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE CONSOLIDATED CONDENSED FINANCIAL STATEMENTS OF UNIVERSAL FOODS CORPORATION AS OF AND FOR THE QUARTER ENDED MARCH 31, 1995 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 1,000 6-MOS SEP-30-1995 JAN-01-1995 MAR-01-1995 21,916 0 105,562 3,376 162,105 320,015 445,535 187,212 764,712 163,100 168,457 2,698 0 0 353,995 764,712 379,548 379,548 247,024 247,024 (49,560) 441 7,930 90,124 40,894 49,230 0 0 0 49,230 1.89 1.89 Unusual Item: Gain on sale of Frozen Foods business.
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