-----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, bbaBbKdZE2CGLv1nsMwpov1AT1Klj9ofe8l/qDwCH2KNa24ceX+p1uF7yTJpAV0s LXds542sOJixd6QLg4QpRA== 0000088121-94-000013.txt : 19940804 0000088121-94-000013.hdr.sgml : 19940804 ACCESSION NUMBER: 0000088121-94-000013 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19940618 FILED AS OF DATE: 19940802 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: 94541259 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 1994 SECOND QUARTER 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 June 18, 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 June 18, 1994. Total pages in filing - 12 pages SEABOARD CORPORATION AND SUBSIDIARIES Condensed Consolidated Balance Sheets June 18, 1994 and December 31, 1993 (Thousands of Dollars)
Part I - Financial Information June 18, 1994 December 31, 1993 --------------- ------------------ Assets Current assets: Cash and cash equivalents $ 4,284 $ 7,110 Short-term investments 202,614 215,902 Receivables, net 105,300 92,714 Inventories 72,341 70,961 Deferred income taxes 6,522 7,671 Other current assets 7,637 8,374 --------- --------- Total current assets 398,698 402,732 --------- --------- Investments in and advances to foreign subsidiaries not consolidated 28,638 28,520 --------- --------- Property, plant and equipment 379,568 354,932 Accumulated depreciation (160,297) (149,494) --------- --------- Net property, plant and equipment 219,271 205,438 --------- --------- Other assets 8,854 10,642 --------- --------- Total assets $655,461 $647,332 ========= ========= Liabilities and Stockholders' Equity Current liabilities: Notes payable and current maturities of long-term debt $ 13,752 $ 25,272 Accounts payable 35,543 44,787 Income taxes payable 12,085 8,757 Other current liabilities 46,708 47,469 --------- --------- Total current liabilities 108,088 126,285 Long-term debt, less current maturities 196,945 194,506 Deferred income taxes 19,565 20,440 Deferred grants 4,341 - Accrued pension plan liabilities, net of current portion 4,926 1,745 --------- --------- Total liabilities 333,865 342,976 --------- --------- 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 Unrealized loss on debt securities, (net of deferred income taxes of $317) (636) - Retained earnings 316,304 298,428 --------- --------- Total stockholders' equity 321,596 304,356 --------- --------- Total liabilities and stockholders' equity $655,461 $647,332 ========= ========= See notes to condensed consolidated financial statements.
Page 2 SEABOARD CORPORATION AND SUBSIDIARIES Condensed Consolidated Statements of Earnings Twelve weeks ended June 18, 1994 and June 19, 1993 (Thousands of dollars except per share amounts)
June 18, 1994 June 19, 1993 -------------- -------------- Net sales $215,016 $258,254 Cost of sales and operating expenses 175,084 228,403 --------- --------- Gross income 39,932 29,851 Selling, general and administrative expenses 24,472 22,902 --------- --------- Operating income 15,460 6,949 --------- --------- Other income (expense): Interest income 1,915 2,640 Interest expense (3,191) (1,389) Miscellaneous 2,983 (1,311) --------- ---------- Total other income (expense) 1,707 (60) --------- ---------- Earnings before income taxes 17,167 6,889 ---------- ---------- Income tax expense (benefit): Current 6,188 2,068 Deferred (165) 15 ---------- ---------- Total income taxes 6,023 2,083 ---------- ---------- Net earnings $ 11,144 $ 4,806 ========== ========== Earnings per common share $ 7.49 $ 3.23 ========== ========== 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 Earnings Twenty-four weeks ended June 18, 1994 and June 19, 1993 (Thousands of dollars except per share amounts)
June 18, 1994 June 19, 1993 ------------- ------------- Net sales $472,414 $541,721 Cost of sales and operating expenses 396,413 475,644 --------- -------- Gross income 76,001 66,077 Selling, general and administrative expenses 48,739 47,281 --------- -------- Operating income 27,262 18,796 --------- -------- Other income (expense): Interest income 3,659 3,772 Interest expense (6,549) (2,887) Miscellaneous 3,844 (684) --------- --------- Total other income 954 201 --------- --------- Earnings before income taxes and cumulative effect of a change in accounting principle 28,216 18,997 --------- --------- Income tax expense (benefit): Current 9,005 6,678 Deferred 591 (618) --------- --------- Total income taxes 9,596 6,060 --------- --------- Earnings before cumulative effect of a change in accounting principle 18,620 12,937 Cumulative effect on prior years of changing the method of accounting for deferred income taxes - 20,074 --------- --------- Net earnings $ 18,620 $ 33,011 ========= ========= Earnings per common share: Income before cumulative effect of a change in accounting principle $ 12.52 $ 8.70 Cumulative effect on prior years of changing the method of reporting deferred income taxes - 13.49 --------- --------- Earnings per common share $ 12.52 $ 22.19 ========= ========= Dividends declared per common share $ .50 $ .25 ========= ========= Average number of shares outstanding 1,487,520 1,487,520 ========== ========== See notes to condensed consolidated financial statements.
Page 4 SEABOARD CORPORATION AND SUBSIDIARIES Condensed Consolidated Statements of Cash Flows Twenty-four weeks ended June 18, 1994 and June 19, 1993 (Thousands of Dollars)
June 18, 1994 June 19, 1993 ------------- ------------- Net cash provided by operating activities $ 14,367 $ 33,673 -------- -------- Cash flows from investing activities: Purchase of investments (375,425) - Proceeds from the sale and maturity of investments 387,760 - Net (investment in) short-term investments - (5,736) Capital expenditures, net (28,057) (28,206) Notes receivable 4,131 (2,076) Investments and advances to foreign subsidiaries not consolidated (118) 352 Acquisition of business - (5,500) Cash acquired in acquisition of business - 2,202 --------- --------- Net cash used by investing activities (11,709) (38,964) --------- --------- Cash flows from financing activities: Notes payable to bank (6,178) 1,717 Proceeds from long-term debt 3,792 10,250 Principal payments (6,695) (351) Deferred grants 4,341 - Dividends paid (744) (372) --------- --------- Net cash provided by (used in) financing activities (5,484) 11,244 --------- --------- Net increase (decrease) in cash and cash equivalents (2,826) 5,953 Cash and cash equivalents at beginning of year 7,110 9,838 --------- ---------- Cash and cash equivalents at end of quarter $ 4,284 $ 15,791 ========= ========== 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 5 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 June 18, 1994, the results of operations for the twelve and twenty-four weeks and the statement of cash flows for the twenty-four weeks ended June 18, 1994 and June 19, 1993, respectively. Note 2 The results of operations for the twelve and twenty-four weeks ended June 18, 1994 and June 19, 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 June 18, 1994 and December 31, 1993 (in thousands):
June 18, 1994 December 31, 1993 -------------- ------------------ At lower of last-in, first-out (LIFO) cost or market: Live poultry $24,369 $22,545 Dressed poultry 13,441 8,278 Feed and baking ingredients, packaging supplies and other 6,519 7,200 ------- ------- 44,329 38,023 LIFO allowance (4,170) (3,834) -------- -------- Total inventories at lower of LIFO cost or market 40,159 34,189 -------- -------- At lower of first-in, first-out (FIFO) cost or market: Crops in production, fertilizers and pesticides 4,883 11,376 Grain, flour and feed 5,728 3,170 Dressed pork 5,448 8,587 Live Hogs 6,713 3,037 Other 9,410 7,467 -------- -------- Total inventories at lower of FIFO cost or market 32,182 33,637 -------- -------- Grain, at market - 3,135 -------- -------- Total inventories $72,341 $70,961 ======== ========
Page 6 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 separate 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 June 18, 1994, the Company categorized all short-term investments as Available-for- Sale. Note 5 Subsequent to June 18, 1994, the Company entered into a tentative settlement of a derivative action commenced in April 1990 by a stockholder naming the Company, the Parent Company and the then three directors of the Company as defendants. Under the terms of the settlement, the Company would receive a payment of $10.8 million from which it would be required to pay plaintiff's legal costs. This settlement is subject to approval of the Delaware Chancery Court. Page 7 Second 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 figures are as follows: June 18, 1994 December 31, 1993 -------------- ----------------- Current Ratio 3.69 3.19 Working Capital (in thousands) $290,610 $276,447 Net cash provided by operating activities for the twenty-four weeks ended June 18, 1994 decreased compared to the same period one year ago primarily due to increased short-term advances and deposits related to the construction of hog production facilities. The Company invested $24.8 million in property, plant and equipment through June 18, 1994 in the food production and processing segment. Capital expenditures of $11.1 million were for construction expenditures on the Company's hog production and pork processing project in Northeastern Colorado and the Oklahoma Panhandle. Cumulative capital expenditures for hog facilities have totalled $37.6 million since 1992. The company expects expenditures for facilities and working capital to total $71.9 million in the next two years, of which approximately $33.8 million is currently under contract. This expansion will be funded primarily with term debt. Through June 18, 1994, capital expenditures of $4.1 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 $11.0 million. Remaining capital expenditures for planned expansion of the poultry processing facility are expected to total $1.0 million during 1994 and will be funded with internal cash. Other capital expenditures in the food production and processing segment through June 18, 1994 included $9.6 million in general replacement and upgrade of plant and equipment. Capital expenditures in the transportation segment through June 18, 1994, totalled $3.1 million and were for routine replacement and upgrade of equipment used in the Company's ocean liner service and were funded with internal cash. Subsequent to June 18, 1994, the Company committed to purchase a cargo vessel to be used in its ocean liner service. The purchase price will be approximately $15 million and will be funded with internal cash. Page 8 Liquidity and Capital Resources (continued) - - ------------------------------- As of June 18, 1994 and December 31, 1993, the Company had $9.9 million and $16.1 million, respectively, outstanding under the Company's short-term uncommitted, unsecured credit lines from banks totalling $132.0 million. Deferred grants represent economic development grant funds provided by local government agencies. Use of these funds is limited to construction of a hog processing facility in Guymon, Oklahoma. Deferred incentive grants will be amortized over the life of the assets acquired with the funds. As of June 18, 1994, the Company had used $4.3 million of grant funds, approximately $8.2 million of grant funds remain available for construction expenditures. 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. Results of Operations - - --------------------- Net sales for the twelve and twenty-four weeks ended June 18, 1994 decreased by $43.2 million and $69.3 million, respectively, compared to the same periods one year earlier. Operating income increased by $8.5 million in the second quarter and year-to-date compared to the same periods one year ago. The segment distribution of the increase (decrease) in net sales and operating income compared to the prior year is as follows (in thousands): Net Sales Operating Income --------------------- --------------------- Quarter Year-to-Date Quarter Year-to-Date --------- ------------ --------- ------------ Food production and processing $(54,107) $(95,273) $ 2,660 $ 747 Transportation 7,791 22,380 5,253 6,841 Other 3,078 3,586 598 878 --------- --------- -------- -------- $(43,238) $(69,307) $ 8,511 $ 8,466 ========= ========= ======== ======== The decrease in net sales in the food production and processing segment is the result of discontinuing the slaughter of hogs and lambs at the Company's Minnesota processing plant. Since March, 1994, the ongoing operations of the plant have consisted 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 Zaire. Net Page 9 Results of Operations (continued) - - --------------------- sales from the commodity trading activity decreased as a result of a decrease in grain sales to the Company's nonconsolidated flour mills. These decreases were partially offset by increases in poultry sales attributable to an increase in average sales price and pounds sold of poultry products. The increase in pounds sold resulted primarily from the expansion of the company's poultry processing plant in Western Kentucky. Operating income within the food production and processing segment increased during the quarter and year-to-date compared to the same periods one year earlier. The improved operating results were primarily due to higher average sales prices for the Company's poultry products. Finished feed costs remain higher for the quarter and year-to-date compared to the same periods last year. Year-to- date operating income has been further increased by discontinuing the hog kill at the Minnesota processing plant which has resulted in lower operating losses compared to the same period one year ago. Net sales and operating income in the transportation segment increased for the quarter and year-to-date compared to the same periods one year earlier. The increases resulted from new services to Peru and Chile and increased southbound volume within existing services in the Eastern Caribbean, particularly in the second quarter. The Company expects recent political and economic instability in Venezuela to have a negative effect on net sales and operating income. At this time, the Company does not believe the effect will be material. Selling, general and administrative expenses increased by $1.6 million and $1.5 million for the quarter and year-to-date, respectively, compared to the same periods one year earlier. The increase is primarily related to expanded services in the transportation segment and expansion of the Company's hog production business. Interest income decreased for the quarter and year-to-date by $0.7 million and $0.1 million, respectively, compared to the same periods one year earlier. The decrease is primarily a result of having accrued $1.4 million of interest on refunds of Federal income tax in the second quarter of 1993. Interest expense increased for the quarter and year-to-date by $1.8 million and $3.7 million, respectively, compared to the same periods one year ago. 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. Page 10 Results of Operations (continued) - - --------------------- Miscellaneous income includes a $2.9 million gain from liquidating an interest rate exchange agreement during the quarter. The Company entered into the interest rate exchange agreement as an anticipatory hedge against interest rate risk associated with variable rate financing. Subsequent to obtaining the interest rate exchange agreement the Company received commitments for fixed rate financing and, therefore, terminated the agreement. The Company does not believe its businesses have been materially adversely affected by inflation. Page 11 SEABOARD CORPORATION AND SUBSIDIARIES PART II - OTHER INFORMATION Item 4. Submission of Matters to a Vote of Security Holders The annual meeting of stockholders was held on April 25, 1994 in Newton, Massachusetts. Two items were submitted to a vote of stockholders as described in the Company's Proxy Statement dated March 31, 1994. The table below briefly describes the proposals and results of the stockholders' vote: Votes in Votes Broker Favor Against Abstain Nonvotes ---------- ---------- ---------- ---------- 1. To elect: H. Harry Bresky, 1,425,991 0 550 0 Joe E. Rodrigues, 1,425,991 0 550 0 Robert J. McDonough, and 1,425,891 0 650 0 Thomas J. Shields 1,425,981 0 560 0 as directors. 2. To ratify selection of KPMG Peat Marwick as independent auditors 1,426,036 175 330 0 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 June 18, 1994. Page 11 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: August 1, 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 12 -----END PRIVACY-ENHANCED MESSAGE-----