-----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, fQMltycdj+DOU8Mu9eEqa0pzb9zOug8qUvSFfmeSgyhdV8uTkl+y0yCY61ksU6ex JE6EDrXbG+PWaEaP7sKzvw== 0000088121-94-000010.txt : 19940512 0000088121-94-000010.hdr.sgml : 19940512 ACCESSION NUMBER: 0000088121-94-000010 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19940326 FILED AS OF DATE: 19940509 FILER: COMPANY DATA: COMPANY CONFORMED NAME: SEABOARD CORP /DE/ CENTRAL INDEX KEY: 0000088121 STANDARD INDUSTRIAL CLASSIFICATION: 2015 IRS NUMBER: 042260388 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-03390 FILM NUMBER: 94526714 BUSINESS ADDRESS: STREET 1: 200 BOYLSTON ST CITY: NEWTON STATE: MA ZIP: 02167 BUSINESS PHONE: 6173328492 MAIL ADDRESS: STREET 1: 200 BOYLSTON ST CITY: NEWTON STATE: MA ZIP: 02167 FORMER COMPANY: FORMER CONFORMED NAME: SEABOARD ALLIED MILLING CORP DATE OF NAME CHANGE: 19820328 FORMER COMPANY: FORMER CONFORMED NAME: HATHAWAY BAKERIES INC DATE OF NAME CHANGE: 19710315 10-Q 1 FIRST QUARTER 1994 10-Q FILING FORM 10-Q SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Quarterly Report Under Section 13 or 15(d) of the Securities Exchange Act of 1934 For Quarter Ended March 26, 1994 ................................................................. Commission file number 1-3390 ................................................................. Seaboard Corporation ................................................................. (Exact name of registrant as specified in its charter) Delaware 04-2260388 ................................................................. (State or other jurisdiction of (IRS Employer Identification incorporation or organization). No.) 200 Boylston Street, Newton, MA 02167 ................................................................. (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code 617-332-8492 ........................... ................................................................. 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 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 ___. Indicate number of shares outstanding of each of the issuer's classes of common stock, as of latest practicable date. Common stock of $1 par value, 1,487,520 shares outstanding, as of March 26, 1994. Total pages in filing - 11 pages SEABOARD CORPORATION AND SUBSIDIARIES Condensed Consolidated Balance Sheets March 26, 1994 and December 31, 1993 (Thousands of Dollars)
Part I - Financial Information March 26, 1994 December 31, 1993 -------------- ----------------- Assets Current assets: Cash and cash equivalents $ 5,326 $ 7,110 Short-term investments 194,617 215,902 Receivables, net 100,276 92,714 Inventories 67,119 70,961 Deferred income taxes 6,899 7,671 Other current assets 7,495 8,374 ----------- ------------ Total current assets 381,732 402,732 ----------- ------------ Investments in and advances to foreign subsidiaries not consolidated 29,577 28,520 ---------- ------------ Property, plant and equipment 365,367 354,932 Accumulated depreciation (155,947) (149,494) ---------- ------------ Net property, plant and equipment 209,420 205,438 ---------- ------------ Other assets 11,257 10,642 ---------- ------------ Total assets $631,986 $647,332 ========== ============ Liabilities and Stockholders' Equity Current liabilities: Notes payable and current maturities of long-term debt $ 12,623 $ 25,272 Accounts payable 34,708 44,787 Income taxes payable 6,003 8,757 Other current liabilities 49,980 47,469 ---------- ------------ Total current liabilities 103,314 126,285 ---------- ------------ Long-term debt, less current maturities 195,737 194,506 ---------- ------------ Deferred income taxes 20,194 20,440 ---------- ------------ Accrued pension plan liabilities, net of current portion 1,747 1,745 ---------- ------------ Stockholders' equity: Common stock of $1 par value, Authorized 4,000,000 shares; issued 1,789,599 shares 1,790 1,790 Less 302,079 shares held in treasury, at par value 302 302 ---------- ------------ 1,488 1,488 Additional capital 4,440 4,440 Retained earnings 305,066 298,428 ---------- ------------ Total stockholders' equity 310,994 304,356 ---------- ------------ Total liabilities and stockholders' equity $631,986 $647,332 ========== ============ See notes to condensed consolidated financial statements.
Page 2 SEABOARD CORPORATION AND SUBSIDIARIES Condensed Consolidated Statements of Earnings Twelve weeks ended March 26, 1994 and March 27, 1993 (Thousands of dollars except per share amounts)
March 26, 1994 March 27, 1993 -------------- -------------- Net sales $257,398 $283,467 Cost of sales and operating expenses 221,329 247,241 ---------- --------- Gross income 36,069 36,226 Selling, general and administrative expenses 24,267 24,379 ---------- --------- Operating income 11,802 11,847 ---------- --------- Other income (expense): Interest income 1,744 1,132 Interest expense (3,358) (1,498) Miscellaneous 861 627 ---------- --------- Total other income (expense) (753) 261 ---------- --------- Earnings before income taxes and cumulative effect of a change in accounting principle 11,049 12,108 ---------- --------- Income tax expense (benefit): Current 2,817 4,610 Deferred 756 (633) ----------- ---------- Total income taxes 3,573 3,977 ----------- ---------- Earnings before cumulative effect of a change in accounting principle 7,476 8,131 Cumulative effect on prior years of changing the method of reporting deferred income taxes - 20,074 ----------- --------- Net earnings $ 7,476 $ 28,205 =========== ========= Earnings per common share: Income before cumulative effect of a change in accounting principle $ 5.03 $ 5.47 Cumulative effect on prior years of changing the method of reporting deferred income taxes - 13.49 ----------- ---------- Earnings per common share $ 5.03 $ 18.96 =========== ========== Dividends declared per common share $ .25 $ .125 =========== ========== Average number of shares outstanding 1,487,520 1,487,520 =========== ========== See notes to condensed consolidated financial statements.
Page 3 SEABOARD CORPORATION AND SUBSIDIARIES Condensed Consolidated Statements of Cash Flows Twelve weeks ended March 26, 1994 and March 27, 1993 (Thousands of dollars)
March 26, 1994 March 27, 1993 -------------- -------------- Net cash provided by (used in)operating activities $ 1,164 $ (3,846) --------- ---------- Cash flows from investing activities: Purchase of investments (197,599) - Proceeds from the sale and maturity of investments 218,188 - Net proceeds from short-term investments - 13,547 Capital expenditures, net (11,045) (5,378) Notes receivable 355 (2,172) Investments and advances to foreign subsidiaries not consolidated (1,057) 964 Acquisition of business - (5,500) Cash acquired in acquisition of business - 2,202 Net cash provided by investing -------- -------- activities 8,842 3,663 -------- -------- Cash flows from financing activities: Notes payable to bank (7,188) 2,994 Proceeds from long-term debt 1,896 - Principal payments (6,126) (287) Dividends paid (372) (186) --------- ---------- Net cash provided by (used in) financing activities (11,790) 2,521 --------- ---------- Net increase (decrease) in cash and cash equivalents (1,784) 2,338 Cash and cash equivalents at beginning of year 7,110 9,838 --------- ---------- Cash and cash equivalents at end of quarter $ 5,326 $ 12,176 ========= ========== Disclosure of accounting policy: For purposes of the Condensed Consolidated Statements of Cash Flows, the Company considers all demand deposits and overnight investments as cash. See notes to condensed consolidated financial statements.
Page 4 SEABOARD CORPORATION AND SUBSIDIARIES Notes to Condensed Consolidated Financial Statements Note 1 In the opinion of the Company, the accompanying unaudited condensed consolidated financial statements reflect all adjustments (consisting of normal recurring accruals) necessary to present fairly the financial position as of March 26, 1994, and the results of operations and cash flows for the twelve weeks ended March 26, 1994 and March 27, 1993, respectively. Note 2 The results of operations for the twelve weeks ended March 26, 1994 and March 27, 1993 are not necessarily indicative of the results to be expected for the full year. Note 3 The following is a summary of inventories at March 26, 1994 and December 31, 1993 (in thousands):
March 26, 1994 December 31, 1993 -------------- ----------------- At lower or last-in, first out (LIFO) cost or market: Live poultry $23,434 $22,545 Dressed poultry 11,330 8,278 Feed and baking ingredients, packaging supplies and other 7,452 7,200 --------- -------- 42,216 38,023 LIFO allowance (4,305) (3,834) --------- -------- Total inventories at lower of LIFO cost or market 37,911 34,189 --------- -------- At lower of first-in, first-out (FIFO) cost or market: Crops in production, fertilizers and pesticides 6,997 11,376 Grain, flour and feed 4,684 3,170 Dressed pork 4,890 8,587 Live Hogs 4,431 3,037 Other 7,957 7,467 --------- ------- Total inventories at lower of FIFO cost or market 28,959 33,637 --------- ------- Grain, at market 249 3,135 --------- ------- Total inventories $67,119 $70,961 ========= ========
Page 5 SEABOARD CORPORATION AND SUBSIDIARIES Notes to Condensed Consolidated Financial Statements Note 4 Effective January 1, 1994, the Company adopted Statement of Financial Accounting Standards (SFAS) No. 115, "Accounting for Certain Investments in Debt and Equity Securities." SFAS No. 115 requires certain investments to be categorized as either Trading, Available- for-Sale, or Held-to-Maturity. Investments in the Trading category are carried at fair value with unrealized gains and losses included in income. Investments in the Available-for-Sale category are carried at fair value with unrealized gains and losses recorded as a special component of stockholders' equity. Investments in the Held- to-Maturity category are carried at amortized cost. Short-term investments at January 1, 1994 included $215,902,000 in debt securities, for which cost approximated fair value and, therefore, the impact of adopting this standard was not material to the consolidated financial statements of the Company. At March 26, 1994, the Company categorized all short-term investments as Available-for-Sale. The estimated fair value of the short-term investments amounted to $194,617,000. The effect of applying the standard in the quarter ended March 26, 1994 was to decrease stockholders' equity by $466,000, net of $230,000 in deferred income taxes. The amortized cost, gross unrealized holding gains and losses and the estimated fair value of the Available-for-Sale debt securities as of March 26, 1994 are presented in the following table: Gross Gross Unrealized Unrealized Estimated Amortized Holding Holding Fair (Thousands of Dollars) Cost Gains Losses Value ---------------------------------------------- U.S. Treasury securities and obligations of U.S. government agencies $104,992 - (495) 104,497 Obligations of states and political subdivisions 65,413 - (221) 65,192 Other debt securities 24,908 20 - 24,928 ----------------------------------------------- Total debt securities $195,313 20 (716) 194,617 =============================================== The gross realized gains on sales of Available-for-Sale securities totalled $32,000, and the gross realized losses totalled $82,000 for the quarter ended March 26, 1994. The Available-for-Sale debt securities are expected to be traded within one year. Page 6 First Quarter 1994 Management's Discussion and Analysis of Financial Condition and Results of Operations Liquidity and Capital Resources Liquidity, as measured by current ratio and working capital, has increased since December 31, 1993. Comparative amounts are as follows: March 26, 1994 December 31, 1993 ---------------- ----------------- Current Ratio 3.69 3.19 Working Capital (in thousands) $278,418 $276,447 The Company invested $10.7 million in property, plant and equipment through March 26, 1994 in the food production and processing segment. Capital expenditures of $2.5 million were for construction expenditures on the Company's hog production and processing project in Northeastern Colorado and the Oklahoma Panhandle. Cumulative capital expenditures on the project since 1992 total $29.1 million. The Company anticipates remaining expenditures to total $80.4 million for facilities and working capital. The project will be funded with existing term debt or future financings. Capital expenditures of $3.0 million were made at the Company's poultry processing plant in Western Kentucky to expand processing capacity. Cumulative capital expenditures related to the expansion total $9.7 million. Remaining capital expenditures for planned expansion of the poultry processing facility are expected to total $1.3 million during 1994 and will be funded with internal cash. Other capital expenditures in the food production and processing segment for the first quarter included $5.2 million in general replacement and upgrade of plant and equipment. Capital expenditures in the transportation segment of $0.1 million were for routine replacement and upgrade of equipment used in the Company's ocean liner service and were funded with working capital. As of March 26, 1994 and December 31, 1993, the Company had $8.9 million and $16.1 million, respectively, outstanding under the Company's short-term uncommitted, unsecured credit lines from banks totalling $132.0 million. Management intends to continue its policy of expansion and growth in the agribusiness and ocean transportation industries and believes the Company's liquidity and capital resources are adequate for its intended operations. Page 7 Results of Operations Net sales for the quarter ended March 26, 1994, decreased by $26.1 million compared to the same period one year earlier. Operating income remained almost unchanged compared to the same period one year ago. The segment distribution of the increase (decrease) in sales and operating income in the first quarter compared to the prior year is as follows (in thousands): Net Sales Operating Income ----------- ---------------- Food production and processing $(41,166) $ (1,874) Transportation 14,589 1,588 Other 508 241 ----------- ---------------- $(26,069) $ (45) =========== ================ The decrease in net sales in the food production and processing segment is related to reducing the number of hogs slaughtered at the Company's Minnesota processing plant. By the end of the first quarter of 1994, the Company had stopped the slaughter of pork and lamb at the plant. The ongoing operations of the plant will consist of further processing fresh pork products purchased from third parties. In addition, sales from the flour mill in Zaire are no longer included in the Company's consolidation after a sale of shares reduced the investment to a minority interest. Beginning in December 1993, the Company began using the equity method of accounting for the flour mill in Zaire. Net sales from commodity trading activity decreased as a result of a decrease in grain sales to the Company's nonconsolidated flour mills. Operating income within the food production and processing segment decreased during the quarter compared to the same quarter one year earlier. The decrease was primarily related to higher finished feed costs at the Company's poultry and pork operations. The higher feed costs were partially offset by the reduced hog kill at the Minnesota processing plant which resulted in lower operating losses compared to the same quarter one year ago. Net sales and operating income in the transportation segment increased as a result of the new services to Peru and Chile and increased volume with existing services in Central America. Page 8 Results of Operations (continued) Selling, general and administrative expenses remained almost unchanged during the quarter compared to the same quarter one year earlier. As a percentage of sales, selling, general and administrative expenses increased by less than 1% compared to the same quarter one year ago. Interest income and interest expense increased $0.6 million and $1.9 million, respectively, compared to the same quarter one year earlier. The increase is primarily related to the issuance of $100.0 million in Senior Notes in December 1993, the proceeds of which were invested in short-term investments. The Company does not believe its businesses have been materially adversely affected by inflation. Page 9 SEABOARD CORPORATION AND SUBSIDIARIES PART II - OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K (a) Exhibits - None (b) Reports on Form 8-K. Seaboard Corporation has not filed any reports on Form 8-K during the twelve week period ended March 26, 1994. Page 10 PART II - OTHER INFORMATION 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. DATE: May 6, 1994 Seaboard Corporation by: /s/ Rick J. Hoffman ------------------------------------- Rick J. Hoffman, Vice President by: /s/ Jesse H. Bechtold ------------------------------------- Jesse H. Bechtold, Chief Accounting Officer Page 11 -----END PRIVACY-ENHANCED MESSAGE-----