-----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, WBF9ZlIvxmGtEsBlifjOIRoLbU4KXwewBUtE6Ui4nvsg/mvn+kuL6Sd1hrIpqF2M 4ySW4XWu2Rr8DweNNi3FjQ== 0000063754-97-000026.txt : 19971015 0000063754-97-000026.hdr.sgml : 19971015 ACCESSION NUMBER: 0000063754-97-000026 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970831 FILED AS OF DATE: 19971014 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: MCCORMICK & CO INC CENTRAL INDEX KEY: 0000063754 STANDARD INDUSTRIAL CLASSIFICATION: MISCELLANEOUS FOOD PREPARATIONS & KINDRED PRODUCTS [2090] IRS NUMBER: 520408290 STATE OF INCORPORATION: MD FISCAL YEAR END: 1130 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-00748 FILM NUMBER: 97695219 BUSINESS ADDRESS: STREET 1: 18 LOVETON CIRCLE STREET 2: P O BOX 6000 CITY: SPARKS STATE: MD ZIP: 21152 BUSINESS PHONE: 4107717301 MAIL ADDRESS: STREET 1: 18 LOVETON CIRCLE STREET 2: P O BOX 6000 CITY: SPARKS STATE: MD ZIP: 21152 FORMER COMPANY: FORMER CONFORMED NAME: MCCORMICK & CO DATE OF NAME CHANGE: 19660620 10-Q 1 MCCORMICK & COMPANY, INC. 10-Q 3RD QUARTER 1997 SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 Form 10-Q QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For Quarter Ended August 31, 1997 Commission File Number 0-748 McCORMICK & COMPANY, INCORPORATED (Exact name of registrant as specified in its charter) MARYLAND 52-0408290 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 18 Loveton Circle, P. O. Box 6000, Sparks, MD 21152-6000 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (410) 771-7301 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 for such shorter period that the registrant was required to file such reports), and (2) has been subject to filing requirements for 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. Shares Outstanding September 30, 1997 Common Stock 10,471,705 Common Stock Non-Voting 64,120,991 McCORMICK & COMPANY, INCORPORATED INDEX - FORM 10-Q August 31, 1997 Page No. Part I. FINANCIAL INFORMATION Item 1. Financial Statements: Condensed Consolidated Income Statement 2 Condensed Consolidated Balance Sheet 3 Condensed Consolidated Statement of Cash Flows 4 Notes to Condensed Consolidated Financial Statements 5 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 8 Part II. OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K 13 SIGNATURES 14 Exhibit Index 15 McCORMICK & COMPANY, INCORPORATED CONDENSED CONSOLIDATED INCOME STATEMENT (UNAUDITED) (In Thousands Except Per Share Amounts) Three Months Ended Nine Months Ended August 31, August 31, 1997 1996 1997 1996 Net sales $422,870 $405,451 $1,243,992 $1,195,078 Cost of goods sold 284,326 269,115 834,268 804,955 Gross profit 138,544 136,336 409,724 390,123 Selling, general and administrative expense 106,181 103,184 319,876 312,575 Restructuring charge (credit) (3,726) 57,538 (3,340) 57,538 Operating income (loss) 36,089 (24,386) 93,188 20,010 Interest expense 9,367 8,082 27,051 24,807 Other (inc.) expense-net (1,090) 524 (4,400) 156 Income (loss) from consolidated continuing operations before income taxes 27,812 (32,992) 70,537 (4,953) Income taxes (benefits) 10,930 (9,871) 26,738 185 Net income (loss) from consoli- dated continuing operations 16,882 (23,121) 43,799 (5,138) Income from unconsolidated operations 2,317 1,557 5,426 2,782 Net income (loss) from continuing operations 19,199 (21,564) 49,225 (2,356) Income from discontinued operations, net of income taxes 1,013 5,112 1,013 6,249 Net income (loss) before extraordinary item 20,212 (16,452) 50,238 3,893 Extraordinary loss from early extinguishment of debt, net of income tax benefit - (7,806) - (7,806) Net income (loss) $ 20,212 $(24,258) $ 50,238 $ (3,913) Earnings (loss) per common share: Continuing operations $0.26 $(0.26) $0.65 $(0.03) Discontinued operations 0.01 0.06 0.01 0.08 Extraordinary loss from early extinguishment of debt - (0.10) - (0.10) Earnings (loss) per common share $0.27 $(0.30) $0.66 $(0.05) Average shares outstanding 75,117 80,982 76,079 81,164 Cash dividends declared per common share $0.15 $0.14 $0.45 $0.42 See notes to condensed consolidated financial statements. (2) McCORMICK & COMPANY, INCORPORATED CONDENSED CONSOLIDATED BALANCE SHEET (In Thousands) Aug. 31, Aug. 31, Nov. 30, 1997 1996 1996 (unaudited) (unaudited) ASSETS Current Assets Cash and cash equivalents $ 10,588 $ 36,746 $ 22,418 Accounts receivable - net 189,570 194,927 217,495 Inventories Raw materials and supplies 124,282 125,969 188,936 Finished products and work-in process 137,881 138,737 56,153 262,163 264,706 245,089 Other current assets 47,144 44,148 49,410 Total current assets 509,465 540,527 534,412 Property - net 383,889 400,322 400,394 Goodwill - net 156,871 160,238 165,066 Prepaid allowances 140,321 163,115 149,200 Other assets 85,118 76,158 77,537 Total assets $1,275,664 $1,340,360 $1,326,609 LIABILITIES AND SHAREHOLDERS' EQUITY Current Liabilities Short-term borrowings $215,112 $147,544 $ 98,450 Current portion of long-term debt 9,088 9,966 10,477 Trade accounts payable 127,055 127,534 153,584 Other accrued liabilities 188,531 221,834 236,791 Total current liabilities 539,786 506,878 499,302 Long-term debt 275,780 289,664 291,194 Deferred income taxes 4,167 1,755 4,937 Other long-term liabilities 81,806 77,955 81,133 Total liabilities 901,539 876,252 876,566 Shareholders' Equity Common stock 45,331 49,320 48,541 Common stock non-voting 115,275 115,844 112,489 Retained earnings 246,163 332,342 313,847 Foreign currency translation adj. (32,644) (33,398) (24,834) Total shareholders' equity 374,125 464,108 450,043 Total liabilities and shareholders' equity $1,275,664 $1,340,360 $1,326,609 See notes to condensed consolidated financial statements. (3) McCORMICK & COMPANY, INCORPORATED CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED) (In Thousands) Nine Months Ended Aug. 31, Aug. 31, 1997 1996 Cash flows from operating activities Net income (loss) $ 50,238 $ (3,913) Adjustments to reconcile net income to net cash provided by (used in) operating activities Non cash charges and credits Depreciation and amortization 37,430 48,113 Restructuring charges (credits) (3,340) 57,538 Income from unconsolidated operations (5,426) (2,782) Extraordinary loss - 7,806 Other (374) (2,684) Changes in selected working capital items Accounts receivable 22,380 13,540 Inventories (24,962) (1,596) Prepaid allowances 8,806 9,746 Accounts payable, trade (23,055) 1,418 Other assets and liabilities (24,630) (41,159) Net cash provided by operating activities 37,067 86,027 Cash flows from investing activities Capital expenditures (36,890) (61,970) Acquisitions of businesses (3,315) - Proceeds from sale of discontinued operations - 248,766 Proceeds from sale of assets 2,576 15,207 Other investments (3,080) (282) Currency hedging contracts (300) - Net cash provided by (used in) investing activities (41,009) 201,721 Cash flows from financing activities Short-term borrowings, net 118,969 (137,497) Long-term debt borrowings - 4,130 Long-term debt repayments (10,892) (81,479) Common stock issued 6,349 7,871 Common stock acquired by purchase (90,367) (20,927) Dividends paid (34,329) (34,128) Net cash used in financing activities (10,270) (262,030) Effect of exchange rate changes on cash and cash equivalents 2,382 (1,437) Increase (decrease) in cash and cash equivalents (11,830) 24,281 Cash and cash equivalents at beginning of period 22,418 12,465 Cash and cash equivalents at end of period $ 10,588 $ 36,746 See notes to condensed consolidated financial statements. (4) McCORMICK & COMPANY, INCORPORATED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Amounts In Thousands Except As Otherwise Noted) (Unaudited) Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and do not include all the information and notes required by generally accepted accounting principles for complete financial statements. In the opinion of management, the accompanying condensed consolidated financial statements contain all adjustments necessary to present fairly the financial position and the results of operations for the interim periods. Certain other reclassifications have been made to the 1996 financial statements to conform with the 1997 presentation. As of January 1, 1997, the Company's Mexican operations were measured using the U.S. dollar as the functional currency due to the highly inflationary nature of the Mexican economy. The results of consolidated operations for the three and nine month periods ended August 31, 1997 are not necessarily indicative of the results to be expected for the full year. Historically, the Company's consolidated sales and profits are lower in the first half of the fiscal year, and increase in the second half. For further information, refer to the consolidated financial statements and notes included in the Company's Annual Report on Form 10-K for the year ended November 30, 1996. Business Restructuring In the third quarter of 1996, the Company began implementation of a restructuring plan and recorded a restructuring charge of $58,095 in 1996. This charge reduced net income by $39,582 or $.49 per share. In addition there are additional charges directly related to the restructuring plan which could not be accrued in 1996. The Company has expensed $419 of these costs in the first nine months of 1997. Under the restructuring plan the Company has closed the Brooklyn, New York packaging plant, converted from a direct sales force to a broker sales force for certain regions in the U.S., exited from certain minor non-core product lines, closed its manufacturing facility in Switzerland and moved that production to its U.K. facility, sold the Minipack business, and sold Giza National Dehydration Company of Egypt. In the fourth quarter of 1994, the Company recorded a charge of $70,445 for restructuring its business operations. Except for the realignment of some of our operations in the United Kingdom, this restructuring plan is complete. (5) In the third quarter of 1997, the Company reevaluated its restructuring plans. Most of the actions under these plans are completed or near completion and have resulted in losses being less than originally anticipated. In addition, an agreement in principal to dispose of an overseas food brokerage and distribution business with 6% of consolidated net sales was not consummated. As a result of these developments, a credit of $9,493 was included in the caption Restructuring Charge (Credit) in the Condensed Consolidated Income Statement. Concurrent with the reevaluation of restructuring plans, the Company initiated plans to streamline the food brokerage and distribution business and close a domestic packaging plant. These actions resulted in a $5,734 charge to the Restructuring Charge (Credit) caption in the Condensed Consolidated Income Statement. Charges related to these initiatives include severance and personnel costs of $2,516 and a $3,218 writedown of assets to net realizable value and will require net cash outflows of approximately $3,365. The credit for the restructuring reevaluation and the charge for the new initiatives resulted in a pre-tax restructuring credit of $3,759 ($2,281 after tax) in the quarter and nine months ended August 31, 1997. The restructuring liability remaining at August 31, 1997 was $5,091 for severance and personnel, $1,971 for disposal of assets and $1,344 for other exit costs. The Company expects to have all restructuring programs completed in 1998. Discontinued Operations On August 29, 1996, the Company sold substantially all the assets of Gilroy Foods, Incorporated (GFI) and Gilroy Energy Company, Inc. (GEC). Based on the settlement of terms related to assumptions used to estimate the gain or loss from the disposals of GFI and GEC, a credit of $1,660 ($1,013 after tax) was included in the caption Income From Discontinued Operations, Net of Income Taxes in the Condensed Consolidated Income Statement for the quarter and nine months ended August 31, 1997. Accounting and Disclosure Changes In February 1997, the Financial Accounting Standards Board issued Statement No. 128, "Earnings per Share." The Statement is effective for financial statements issued for periods ending after December 15, 1997. The Statement will have no significant effect on the reported earnings per share for the Company. In June 1997, the Financial Accounting Standards Board issued Statement No. 130, "Reporting Comprehensive Income", which requires that an enterprise report, by major components and as a single total, the change in its net assets during the period from non- owner sources; and No. 131, "Disclosures About Segments of an Enterprise and Related Information", which establishes annual and interim reporting standards for an enterprise's operating segments (6) and related disclosures about its products, services, geographic areas and major customers. Both statements are effective for fiscal years beginning after December 15, 1997. Adoption of these standards will not impact the Company's consolidated financial position, results of operations or cash flows, and any effect, while not yet determined by the Company, will be limited to the presentation of its disclosures. Financial Instruments During the second quarter of 1997, the Company entered into foreign currency hedge contracts. The Company sold Mexican pesos forward to cover its net investment in its Mexican subsidiary and affiliate. These contracts, which expire in November 1997, have a combined nominal amount of $28,727 at August 31, 1997. (7) McCORMICK & COMPANY, INCORPORATED MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Amounts in Thousands Except as Otherwise Noted) Overview For the third quarter ended August 31, 1997 the Company reported net income of $20.2 million or $.27 per common share compared to a net loss of $24.3 million or $(.30) per common share for the comparable period last year. For the nine months ended August 31, 1997, net income was $50.2 million or $.66 per common share compared to a net loss of $3.9 million or $(.05) per common share for the same period last year. During the third quarter of 1997, the Company recorded adjustments relating to a favorable revaluation of reserves for restructuring programs and discontinued operations and unfavorable adjustments at its Venezuelan operation, principally related to the correction of a prior period currency translation error. During the third quarter of 1996, the Company recorded a business restructuring, completed the sale of Gilroy Foods and Gilroy Energy, and recorded a loss on prepayment of debt associated with Gilroy Energy. Excluding these items (as well as operating results of discontinued operations), net income for the third quarter and nine months ended August 31, 1997 was $19.9 million and $50.1 million or $.27 and $.66 per share, respectively, as compared to $17.7 million and $36.9 million or $.23 and $.46 per share, respectively, for the same period last year. During the first quarter of 1997, the Company purchased a line of dry seasoning mixes in Canada which will be marketed under the French's (registered trademark) brand name. This acquisition will expand the Company's market areas in Canada. During the second quarter of 1997, the Company dissolved the McCormick & Wild joint venture and the business was split between the partners. Under the 1996 restructuring plan, the Company completed the sales of Giza National Dehydration Company of Egypt and Minipack Systems Limited of England, exited from certain non-core product lines, and closed its manufacturing facility in Switzerland and moved that production to its U.K. facility during 1997. Results of Operations Consolidated net sales increased 4.3% and 4.1% for the quarter and for the nine month period ended August 31, 1997, respectively, as compared to the corresponding periods of 1996. For the quarter ended August 31, 1997, the increase in consolidated net sales was mainly driven by unit volume increases. The effect of foreign currency exchange rate changes increased sales by less than 1% when compared to last year. There was improved performance in the U.S. industrial and food service businesses, the packaging business and the Asia Pacific group. The U.S. retail business decreased compared to the same quarter of last year with volume decreases partially offset by the combined favorable effect of price and mix changes. (8) For the nine months ended August 31, 1997, the 4.1% increase in consolidated net sales was mainly driven by unit volume increases and the combined favorable effect of price and mix changes. An increase to consolidated net sales of less than 1% due to foreign exchange rate changes was offset by a decrease due to the effect of business disposals, net of acquisitions. Net sales improved compared to last year in all operating groups except the U.S. retail business whose volume decrease was partially offset by the combined favorable effect of price and mix changes. While underlying sales patterns in the grocery store channel have recently shown some improvement, in part due to the Company's category management and marketing initiatives, the Company does not anticipate fully recovering in the fourth quarter the net sales shortfall realized in the first nine months of 1997. Operating income as a percentage of net sales, excluding restructuring, decreased from 8.2% to 7.7% for the quarter and increased from 6.5% to 7.2% for the nine months as compared to last year. Excluding the impact of adjustments, at the Company's Venezuelan operation, principally related to a prior period currency translation error, operating profit as a percentage of net sales was 8.5% for the quarter and 7.5% for the nine months ended August 31, 1997. Gross profit as a percentage of net sales decreased from 33.6% to 32.8% for the quarter as compared to last year. The decrease is due to adjustments at the Company's Venezuelan operations, principally related to a prior period currency translation error. For the nine months ended August 31, 1997, gross profit as a percentage of net sales increased from 32.6% to 32.9%. Gross margin percentage improvements for the nine months ended August 31, 1997 were led by the U.S. retail, industrial, and packaging businesses. The improvement in the Company's packaging business was partially due to a write-off of packaging inventory for obsolete products in the second quarter of 1996. Selling, general, and administrative expenses as a percentage of sales decreased slightly in the third quarter and nine months ended August 31, 1997 as compared to last year's comparable periods. For the three months ended August 31, 1997, the decrease is composed of a receivable write-off due to a customer bankruptcy recorded in the third quarter of 1996, offset by increases in earnings-based employee compensation costs. For the nine months ended August 31, 1997, promotional spending is down due to lower U.S. retail sales and the effect on volume based promotions. Advertising spending, while lower than last year, is still higher than historical levels as the Company continues its focus on brand recognition. The decreases in advertising and promotion were partially offset by increases in earnings-based employee compensation costs. Interest expense decreased $2.2 million and $8.9 million for the quarter and nine months as compared to last year. Interest expense for the third quarter and nine months of 1996 excludes $3.5 million and $11.2 million of interest allocated to discontinued operations. (9) The significant decrease in total interest is primarily due to reduced borrowings as a result of the sale of Gilroy Foods and Gilroy Energy in 1996. Short term borrowing rates increased slightly for the third quarter and remained flat for the nine months ended August 31, 1997 as compared to last year's comparable periods. Other income includes $2.0 million for the quarter and $6.0 million for the nine months ended August 31, 1997 from the three year non- compete agreement with Calpine Corporation, entered into as part of the sale of Gilroy Energy. The total income expected in fiscal 1997 for this agreement is $8.0 million. The other income for the nine months ended August 31, 1996 includes a $1.4 million gain on the sale of a building. The Company's effective tax rates for the quarter and nine months ended August 31, 1997 are 39.3% and 37.9%, respectively, as compared to 29.9% and 3.7% for the comparable periods in 1996. The increase in tax rate is primarily due to the nondeductibility of a prior period currency translation error at the Company's Venezuelan operation and the favorable effect of certain restructuring charges in 1996. Income from unconsolidated operations improved in the third quarter and nine months ended August 31, 1997 mainly due to improved earnings in our Mexican joint venture. Due to cyclical events in the worldwide commodity markets, the price of black pepper has risen dramatically. Through the third quarter ended August 31, 1997, the Company has not experienced a materially adverse impact on earnings. While the future movement of commodity prices is uncertain, a variety of programs, including strategic global procurement and customer price adjustments, are expected to help the Company recoup escalating black pepper prices. Business Restructuring In the third quarter of 1996, the Company began implementation of a restructuring plan and recorded a restructuring charge of $58,095 in 1996. This charge reduced net income by $39,582 or $.49 per share. In addition there are additional charges directly related to the restructuring plan which could not be accrued in 1996. The Company has expensed $419 of these costs in the first nine months of 1997. Under the restructuring plan the Company has closed the Brooklyn, New York packaging plant, converted from a direct sales force to a broker sales force for certain regions in the U.S., exited from certain minor non-core product lines, closed its manufacturing facility in Switzerland and moved that production to its U.K. facility, sold the Minipack business, and sold Giza National Dehydration Company of Egypt. In the fourth quarter of 1994, the Company recorded a charge of $70,445 for restructuring its business operations. Except for the realignment of some of our operations in the United Kingdom, this restructuring plan is complete. (10) In the third quarter of 1997, the Company reevaluated its restructuring plans. Most of the actions under these plans are completed or near completion and have resulted in losses being less than originally anticipated. In addition, an agreement in principal to dispose of an overseas food brokerage and distribution business with 6% of consolidated net sales was not consummated. As a result of these developments, a credit of $9,493 was included in the caption Restructuring Charge (Credit) in the Condensed Consolidated Income Statement. Concurrent with the reevaluation of restructuring plans, the Company initiated plans to streamline the food brokerage and distribution business and close a domestic packaging plant. These actions resulted in a $5,734 charge to the Restructuring Charge (Credit) caption in the Condensed Consolidated Income Statement. Charges related to these initiatives include severance and personnel costs of $2,516 and a $3,218 writedown of assets to net realizable value and will require net cash outflows of approximately $3,365. The credit for the restructuring reevaluation and the charge for the new initiatives resulted in a pre-tax restructuring credit of $3,759 ($2,281 after tax) in the quarter and nine months ended August 31, 1997. The restructuring liability remaining at August 31, 1997 was $5,091 for severance and personnel, $1,971 for disposal of assets and $1,344 for other exit costs. The Company expects to have all restructuring programs completed in 1998. Financial Condition Cash flows from operating activities decreased from a cash inflow of $86.0 million at August 31, 1996 to a cash inflow of $37.1 million at August 31, 1997. This decrease is partially due to a change in inventory levels. During the period the Company owned Gilroy Foods in 1996, a $22.3 million decrease in inventory from year end 1995 was realized in that operation. This was a result of a thorough inventory review that was performed in 1996 on all operations, as well as the seasonality of the Gilroy Foods business. The increase in inventory since year end 1996 is due to the normal building of inventory to supply our busier second half of the year. Investing activities used cash of $41.0 million in the first nine months of 1997 versus cash generation of $201.7 million in the comparable period last year. The significant change is principally due to cash proceeds received on the sale of Gilroy Foods and Gilroy Energy in 1996. Capital expenditures are lower than last year as the Company focuses its efforts on completion of the restructuring programs and implementing only higher return projects. Full year capital expenditures in 1997 are expected to be below the 1996 level. The proceeds from sale of assets in 1996 include the sale of certain assets to the Signature Brands joint venture which is now operating the Cake Mate business, and also includes the sale of property no longer used in the business. The proceeds from sale of assets in 1997 include the sale of Giza (11) National Dehydration and the proceeds received from the dissolution of the McCormick & Wild joint venture as well as the sale of property no longer used in the business. Acquisitions of businesses in 1997 are for the purchase of a line of dry seasoning mixes in Canada which will be marketed under the French's (registered trademark) brand name. This acquisition will expand the Company's market areas in Canada. Cash flows used in financing activities include the purchase of 3.7 million shares of common stock under the Company's previously announced 10 million share buyback program. To date 6.2 million shares have been repurchased under this program. The Company's ratio of debt to total capital was 57.2% as of August 31, 1997, up from 49.1% at August 31, 1996 and 47.1% at November 30, 1996. The change in the ratio for both periods is due to the stock buyback program. Management believes that internally generated funds and its existing sources of liquidity are sufficient to meet current and anticipated financing requirements over the next 12 months. Forward-Looking Information Certain statements contained in this report, including expected trends in net sales performance, cost recovery programs and capital expenditures, are "forward-looking statements" within the meaning of Section 21E of the Securities and Exchange Act of 1934. Because forward-looking statements are based on management's current views and assumptions, and involve risks and uncertainties that could significantly affect expected results, operating results could be materially affected by external factors such as: actions of competitors, customer relationships, fluctuations in the cost and availability of supply chain resources and foreign economic conditions, including currency rate fluctuations. (12) PART II - OTHER INFORMATION Item 6 Exhibits and Reports on Form 8-K (a) Item 601 Exhibit No.: (11) Statement regarding Page 16 of this report on computation of per Form 10-Q. share earnings. (27) Financial Data Schedule Submitted in electronic format only. (b) Reports on Form 8-K. None (13) 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. McCORMICK & COMPANY, INCORPORATED Date: October 14, 1997 By: /s/ Robert G. Davey Robert G. Davey Executive Vice President & Chief Financial Officer Date: October 14, 1997 By: /s/ J. Allan Anderson J. Allan Anderson Vice President & Controller 10Q9mos.mz (14) Exhibit Index Item 601 Exhibit Number Reference or Page (11) Statement re computation of Page 16 of this report on per-share earnings. Form 10-Q. (27) Financial Data Schedule Submitted in electronic format only. (15) McCormick and Company, Inc. Part I - Exhibit 11 (In Thousands Except Per Share Amounts) Statement re Computation of Per-Share Earnings* Three Nine Months Ended Months Ended Computation for Statement of Income 8/31/97 8/31/96 8/31/97 8/31/96 Net Income $20,212 $(24,258) $50,238 $(3,913) Reconciliation of Weighted Average Number of Shares Outstanding to Amount used in Primary Earnings Per Share Computation Weighted Average Number of Shares Outstanding 75,117 80,982 76,079 81,164 Add - Dilutive Effect of Outstanding Options (as Determined by the Application of the Treasury Stock Method) (1) 218 12 189 47 Weighted Average Number of Shares Outstanding As Adjusted for Equivalent Shares 75,335 80,994 76,268 81,211 PRIMARY EARNINGS PER SHARE $ .27 $(.30) $ .66 $(.05) Three Nine Months Ended Months Ended Computation for Statement of Income 8/31/97 8/31/96 8/31/97 8/31/96 Net Income $20,212 $(24,258) $50,238 $(3,913) Reconciliation of Weighted Average Number of Shares Outstanding to Amount used in Fully Diluted Earnings Per Share Computation Weighted Average Number of Shares Outstanding 75,117 80,982 76,079 81,164 Add - Dilutive Effect of Outstanding Options (as Determined by the Application of the Treasury Stock Method) (1) 218 12 225 60 Weighted Average Number of Shares Outstanding As Adjusted for Equivalent Shares 75,335 80,994 76,304 81,224 FULLY DILUTED EARNINGS PER SHARE $ .27 $(.30) $ .66 $(.05) *See 1996 Annual Report, Note (1) of the Notes to Financial Statements. (1) "This calculation is submitted in accordance with Regulation S-K item 601(b)(11) although not required by footnote 2 to paragraph 14 of APB Opinion No. 15 because it results in dilution of less than 3%." (16) EX-27 2 FINANCIAL DATA SCHEDULE - 9 MONTHS ENDED:08/31/97
5 1,000 9-MOS NOV-30-1997 AUG-31-1997 10,588 0 193,359 3,789 262,163 509,465 687,427 303,538 1,275,664 539,786 275,780 0 0 160,606 213,519 1,275,664 1,243,992 1,243,992 834,268 316,536 (4,400) 0 27,051 70,537 26,738 49,225 1,013 0 0 50,238 0.66 0.66
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