-----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, ZDjU7o1NUTN2Y+aK24O9/s0livpbY4zFkjzma/J5vIRmpgqpfw/M6E8MhJDyX0lb l9W5DPwwMFqsbL2e7s+7EA== 0000950144-95-000412.txt : 19950515 0000950144-95-000412.hdr.sgml : 19950515 ACCESSION NUMBER: 0000950144-95-000412 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19950101 FILED AS OF DATE: 19950215 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: SAVANNAH FOODS & INDUSTRIES INC CENTRAL INDEX KEY: 0000086941 STANDARD INDUSTRIAL CLASSIFICATION: SUGAR & CONFECTIONERY PRODUCTS [2060] IRS NUMBER: 581089367 STATE OF INCORPORATION: DE FISCAL YEAR END: 1003 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-11420 FILM NUMBER: 95511296 BUSINESS ADDRESS: STREET 1: P O BOX 339 CITY: SAVANNAH STATE: GA ZIP: 31402 BUSINESS PHONE: 9122341261 10-Q 1 FORM 10-Q: SAVANNAH FOODS & INDUSTRIES 1 FORM 10-Q SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 [ X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934. For the quarterly period ended January 1, 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 1-11420 ----------- SAVANNAH FOODS & INDUSTRIES, INC. - ------------------------------------------------------------------------------ (Exact name of Registrant as specified in its Charter) Delaware 58-1089367 - ------------------------------- ------------------------------ (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) P. O. Box 339, Savannah, Georgia 31402 - ------------------------------------------------------------------------------ (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (912) 234-1261 --------------------------- 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 such filing requirements for the past 90 days. Yes X No --- --- As of January 1, 1995, there were 26,238,196 shares of common stock of Savannah Foods & Industries, Inc. outstanding. The exhibit index is located on page 10 of this filing. Page 1 of 12 pages 2 SAVANNAH FOODS & INDUSTRIES, INC. INDEX Part I. FINANCIAL INFORMATION: Page ---- Item 1. Financial Statements: Consolidated Balance Sheets at January 1, 1995 and October 2, 1994 3 Consolidated Statements of Operations for the 13 weeks ended January 1, 1995 and January 2, 1994 4 Consolidated Statements of Cash Flows for the 13 weeks ended January 1, 1995 and January 2, 1994 5 Notes to Consolidated Financial Statements 6 Item 2. Management's Discussion and Analysis of the Company's Financial Position and Results of Operations 8 Part II. OTHER INFORMATION: Item 6. Exhibits and Reports on Form 8-K 10 Signatures 11 Exhibit 27-1 Financial Data Schedule 12
Page 2 of 12 pages 3 PART I. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS Savannah Foods & Industries, Inc. Consolidated Balance Sheets (In thousands except for shares and per share amounts) (Unaudited)
January 1, October 2, 1995 1994 ---------- ---------- Assets - ------ Current assets: Cash and cash equivalents $ 8,132 $ 28,436 Accounts receivable 66,486 75,776 Inventories (net of LIFO reserve of $8,632 in 1995 and $8,889 in 1994) (Note 2) 221,259 85,340 Other current assets 17,545 9,328 -------- -------- Total current assets 313,422 198,880 Property, plant and equipment (net of accumulated depreciation of $187,211 in 1995 and $180,810 in 1994) 240,438 241,885 Other assets 46,039 45,362 -------- -------- $599,899 $486,127 ======== ======== Liabilities and Stockholders' Equity - ------------------------------------ Current liabilities: Short-term borrowings $ 49,068 $ - Current portion of long-term debt (Note 3) 1,657 1,643 Trade accounts payable 108,046 56,953 Dividends payable - 3,542 Income taxes accrued 11,785 - Accrued expenses related to beet operations 21,400 - Other liabilities and accrued expenses 26,178 23,002 -------- -------- Total current liabilities 218,134 85,140 -------- -------- Long-term debt (Note 3) 119,762 140,224 -------- -------- Deferred employee benefits 73,753 72,589 -------- -------- Stockholders' equity: Common stock $.25 par value; $.55 stated value; 64,000,000 shares authorized; 31,306,800 shares issued 17,365 17,365 Capital in excess of stated value 12,190 12,190 Retained earnings 202,141 202,065 Minimum pension liability adjustment (8,210) (8,210) -------- -------- 223,486 223,410 Less - Treasury stock, at cost (5,068,604 shares) 31,275 31,275 - Note receivable from employee stock ownership trust 3,961 3,961 -------- -------- Total stockholders' equity 188,250 188,174 -------- -------- Commitments and contingencies (Note 6) - - -------- -------- $599,899 $486,127 ======== ========
(The accompanying notes are an integral part of the financial statements.) Page 3 of 12 pages 4 Savannah Foods & Industries, Inc. Consolidated Statements of Operations (In thousands of dollars except for per share amounts) (Unaudited)
For the 13 Weeks Ended ---------------------- January 1, January 2, 1995 1994 ---------- ---------- Net sales $282,477 $280,186 -------- -------- Operating expenses: Cost of sales and operating expenses 253,629 249,207 Selling, general and administrative expenses 13,494 14,884 Depreciation and amortization 6,894 7,778 -------- -------- 274,017 271,869 -------- -------- Income from operations 8,460 8,317 -------- -------- Other income and expenses: Interest and other investment income 527 406 Interest expense (3,572) (3,390) Other 101 82 -------- -------- (2,944) (2,902) -------- -------- Income before income taxes 5,516 5,415 Provision for income taxes (Note 4) (1,898) (1,874) -------- -------- Net income $ 3,618 $ 3,541 ======== ======== Per share: Net income (Note 5) $ .14 $ .13 ======== ======== Dividends $ .135 $ .135 ======== ========
(The accompanying notes are an integral part of the financial statements.) Page 4 of 12 pages 5 Savannah Foods & Industries, Inc. Consolidated Statements of Cash Flows (Unaudited)
For the 13 Weeks Ended -------------------------- January 1, January 2, 1995 1994 ---------- ---------- (In thousands of dollars) Cash flows from operations: Net income $ 3,618 $ 3,541 Adjustments to reconcile net income to net cash provided by operations - Depreciation and amortization 6,894 7,778 Provision for deferred income taxes (10,273) (9,176) Other 32 34 Changes in balance sheet accounts - Accounts receivable 9,290 35,734 Inventories (135,919) (83,600) Other current assets 1,198 2,613 Trade accounts payable 51,093 (6,600) Income taxes accrued 11,785 6,877 Accrued expenses related to beet operations 21,400 21,125 Other liabilities and accrued expenses 3,176 848 Other 977 1,667 -------- -------- Cash used for operations (36,729) (19,159) -------- -------- Cash flows from investing activities: Additions to property, plant and equipment (5,186) (5,563) Proceeds from sale of property, plant and equipment 182 152 Liquidation of short-term investments included in "Other current assets" - 4,500 Changes in escrow balances related to industrial revenue bonds (21) (33) Other (62) (120) -------- -------- Cash used for investing activities (5,087) (1,064) -------- -------- Cash flows from financing activities: Increase in short-term borrowings 49,068 25,100 Payments of long-term debt (20,448) (801) Dividends declared to stockholders (3,542) (3,542) Decrease in dividends payable (3,542) - Other (24) 49 -------- -------- Cash provided by financing activities 21,512 20,806 -------- -------- Cash flows for period (20,304) 583 Cash and cash equivalents, beginning of period 28,436 7,481 -------- -------- Cash and cash equivalents, end of period $ 8,132 $ 8,064 ======== ========
(The accompanying notes are an integral part of the financial statements.) Page 5 of 12 pages 6 Savannah Foods & Industries, Inc. Notes to Consolidated Financial Statements (Unaudited) (1) The information furnished reflects all adjustments (consisting of only normal recurring accruals) which are, in the opinion of Management, necessary for a fair statement of the results for the interim periods. These consolidated financial statements should be read in conjunction with the financial statements and the notes thereto included in the Company's latest annual report on Form 10-K. Certain prior year amounts have been reclassified to conform to current year presentation. (2) A summary of inventories by class is as follows:
January 1, October 2, 1995 1994 ---------- ---------- (In thousands of dollars) Raw materials and work-in-process.......... $ 84,903 $26,924 Packaging materials, parts and supplies.... 26,574 27,115 Finished goods............................. 110,829 31,301 Costs related to future inventory purchases...................... (1,047) - -------- ------- $221,259 $85,340 ======== =======
(3) Long-term debt is summarized as follows:
January 1, October 2, 1995 1994 ---------- ---------- (In thousands of dollars) Senior notes - $50,000 Series A at 8.35% and $20,000 Series B at 7.15% payable through 2002..................... $ 70,000 $ 70,000 Long-term debt supported by revolving credit facilities with banks............. - 20,000 Notes payable to banks from 1996 to 1998 related to the ESOP...................... 15,500 15,500 Industrial revenue bonds................... 28,000 28,000 Present value of non-compete agreements related to the purchase of King Packaging, payable monthly from 1993 to 1998, discounted at 5%................... 5,921 6,314 Other long-term debt....................... 1,998 2,053 -------- -------- 121,419 141,867 Less - Current portion..................... (1,657) (1,643) -------- -------- $119,762 $140,224 ======== ========
Cash interest payments during the first three months of fiscal 1995 and 1994 amounted to $4,529,000 and $4,573,000, respectively. (4) Cash tax payments during the first three months of fiscal 1995 and 1994 amounted to $67,000 and $186,000, respectively. Page 6 of 12 pages 7 (5) Earnings per share for fiscal 1995 and 1994 are based on weighted average outstanding shares of 26,238,196 for the 13 weeks ended January 1, 1995 and January 2, 1994. (6) Commitments and Contingencies: The Company has contracted for the purchase of a substantial portion of its future raw sugar requirements. Prices to be paid for raw sugar under these contracts are based in some cases on market prices during the anticipated delivery month. In other cases prices are fixed and, in these instances, the Company generally obtains commitments from its customers to buy the sugar prior to fixing the price, or enters into futures transactions to hedge the commitment. The Company uses interest rate exchange agreements, more commonly called interest rate swaps, to manage its interest rate exposure. The Company is exposed to loss in the event of non-performance by the other party to these swaps. However, the Company does not anticipate non-performance by the counter-parties to the transactions. In May 1992, the United States Customs Service (Customs) issued a bill to the Company for approximately $7,500,000 seeking reimbursement for certain drawback claims filed by the Company with customs during the period 1984 through 1988. Customs has alleged that drawback claims prepared by the Company for certain export shipments of sugar during these years are technically and/or substantively deficient, and that the Company therefore is not entitled to monies previously received under these drawback claims. The Company disputes Customs' findings and is vigorously protesting the decision of Customs. While it is not certain how long the protest (administrative appeal) process will take, based upon the facts known to the Company at this time, the ultimate resolution of this matter is not expected to have a materially adverse effect on the Company's financial position or results of operations. In July 1991, National Utility Service, Inc. (NUS) filed a complaint against the Company in the United States District Court for the District of New Jersey seeking compensation and damages arising from a contract between the Company and NUS for energy cost saving recommendations. On September 12, 1994, summary judgment was entered against the Company in the amount of $2,973,000 in this case. On December 19, 1994, the judgment was amended to add $1,343,000 prejudgment interest. The Company has appealed the judgment to the United States Court of Appeals for the Third Circuit. The Company intends to pursue the appeal vigorously and strongly contends that no amounts are due to NUS. Page 7 of 12 pages 8 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF THE COMPANY'S FINANCIAL POSITION AND RESULTS OF OPERATIONS. Liquidity Operating working capital increased $47,392,000 from the end of fiscal 1994. Inventory, net of trade payables and accrued beet expenses, increased because of seasonal factors from October 2, 1994 and was funded by short-term borrowings. Cash and cash equivalents for the quarter decreased $20,304,000 as a result of long-term debt reductions of $20,448,000. This reduction resulted from working capital reductions at the end of fiscal 1993-94. The Company is committed to continuing its working capital reduction program to deploy these assets to realize a greater return for our stockholders. Capital Resources Long-term debt excluding the current portion, decreased $20,462,000. Changes in debt and equity resulted in a decrease from 43% to 39% in the ratio of long-term debt to total capital. At January 1, 1995, the Company had $145,000,000 in revolving credit facilities with banks, of which $40,000,000 was outstanding as short-term debt. The remaining available balance of $105,000,000 is intended to meet working capital and other cash needs as they arise. All of the $145,000,000 of available facilities are committed through September 30, 1996. The revolving credit facilities, in general, enable the Company to borrow at the banks' cost of funds plus approximately 1/2%. Additionally, at January 1, 1995, Raceland Sugars, Inc. had $9,068,000 in short-term borrowings from the Commodity Credit Corporation. At January 1, 1995, stockholders' equity was $188,250,000 compared to equity at October 2, 1994, of $188,174,000. Equity increased as a result of earnings of $3,618,000, during the quarter ended January 1, 1995, and dividends decreased equity by $3,542,000. Fixed asset additions during the quarter ended January 1, 1995 were $5,186,000. The capital expenditures were primarily concentrated on cost saving projects and our expansion into Mexico. The Company expects that net fixed assets additions (exclusive of any acquisitions) will approximate $17,000,000 in fiscal 1995. These expenditures are expected to benefit the Company through increased efficiency and expanded operational capabilities. Results of Operations The Company's net income for the quarter ended January 1, 1995 was $3,618,000, or $.14 per share, compared to income of $3,541,000, or $.13 per share, for the quarter ended January 2, 1994. Sugar sales volume increased 1% over the same quarter last year while sugar sales prices were flat. The U. S. Department of Agriculture imposed marketing allotments effective October 1, 1994 for the 1994-95 crop year. These allotments will limit the amount of beet sugar marketed to 4.35 million short tons raw value. This compares with estimated beet sugar production of 4.70 Page 8 of 12 pages 9 million short tons raw value. As a result of allotments, refined sugar prices have strengthened somewhat. However, raw sugar costs have increased by about $1.20 per cwt since October 1, 1994. Sales volume increased at the cane refineries over the same quarter last year. Cane refining margins have shown improvement since the last quarter of 1993-94 but are still below margins achieved in the first quarter of last year. Income is down at the cane refineries compared to the same quarter last year. Our beet operations, which include Michigan Sugar and our beet molasses desugarization facility, had lower sales volume compared to the previous year due to the marketing allotments. However, higher sugar content on beets processed in Michigan and Ohio compensated for the allotments, and income was flat with last year. Dixie Crystals(R) Foodservice sales volume decreased slightly from the same quarter last year, but income was up sharply as the Company benefited from concentrating its efforts on increasing sales of higher margin products. Raceland Sugars, Inc. showed an increase in income as a result of a successful processing campaign which produced more sugar than last year at a slightly lower cost per unit. Selling, general and administrative expenses decreased 9%, or $1,390,000, due to lower sales volume at Michigan Sugar and travel cost reductions resulting from a conscious effort to reduce overhead costs. The Company continues to be confident that earnings will increase significantly in fiscal 1995. Successful processing campaigns at Michigan Sugar and Raceland Sugars, improved sales mix at Dixie Crystals(R) Foodservice and increased sales volume (largely exported sugar) at the cane refineries should all contribute to improved profitability in 1995. The margins on exporting refined sugar to the world market have improved to the point that it is profitable to export sugar again. As a result, we will be operating all three cane refineries near capacity for the balance of the year. This will add to profits and reduce unit costs compared to last year. Our Mexican joint venture continues to look promising despite the recent devaluation of the peso and economic turmoil. We are shipping sugar to customers, and we expect to show a profit this fiscal year. Longer term, NAFTA will be fully implemented 14 years from now, and sugar will be allowed to flow freely across the border. We feel that it is strategically important to have a presence on both sides of the border. The sugar industry is actively working toward developing a sugar program for inclusion in the 1995 Farm Bill. No consensus has been developed so far, and it is too soon to predict what form the proposal might take. We are working with the rest of the industry to ensure that the new Farm Bill will be good for all segments of the industry. Page 9 of 12 pages 10 PART II. OTHER INFORMATION ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits:
Page Exhibit No. Number Description --- ------ ----------- 12 27-1 Financial Data Schedules (for SEC use only)
(b) Reports on Form 8-K, not applicable. Page 10 of 12 pages 11 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. SAVANNAH FOODS & INDUSTRIES, INC. BY: /S/John M. Tatum --------------------------- JOHN M. TATUM DATE: FEBRUARY 14, 1995 SECRETARY BY: /S/W. R. Steinhauer --------------------------- W. R. STEINHAUER SENIOR VICE PRESIDENT - DATE: FEBRUARY 14, 1995 FINANCE & ADMINISTRATION Page 11 of 12 pages EX-27 2 FINANCIAL DATA SCHEDULE
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE FINANCIAL STATEMENTS OF SAVANNAH FOODS & INDUSTRIES, INC. FOR THE PERIOD ENDED JANUARY 1, 1995, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 3-MOS OCT-01-1995 JAN-01-1995 8,132 0 66,486 0 221,259 313,422 240,438 187,211 599,899 218,134 119,762 17,365 0 0 170,885 599,899 282,477 282,477 253,629 253,629 0 0 3,572 5,516 1,898 3,618 0 0 0 3,618 .14 .14
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