0000088121-95-000018.txt : 19950802 0000088121-95-000018.hdr.sgml : 19950802 ACCESSION NUMBER: 0000088121-95-000018 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19950617 FILED AS OF DATE: 19950801 SROS: AMEX FILER: COMPANY DATA: COMPANY CONFORMED NAME: SEABOARD CORP /DE/ CENTRAL INDEX KEY: 0000088121 STANDARD INDUSTRIAL CLASSIFICATION: POULTRY SLAUGHTERING AND PROCESSING [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: 95557760 BUSINESS ADDRESS: STREET 1: 9000 W. 67TH STREET CITY: SHAWNEE MISSION STATE: KS ZIP: 66201 BUSINESS PHONE: 913-676-8939 MAIL ADDRESS: STREET 1: 9000 W. 67TH STREET CITY: SHAWNEE MISSION STATE: KS ZIP: 66202 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 1995 2ND 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 17, 1995 ................................................................. 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.) 9000 W. 67th Street, Shawnee Mission, KS 66202 ................................................................. (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code 913-676-8800 ........................... ................................................................. 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 17, 1995. Total pages in filing - 12 pages SEABOARD CORPORATION AND SUBSIDIARIES Condensed Consolidated Balance Sheets June 17, 1995 and December 31, 1994 (Thousands of Dollars)
Part I - Financial Information June 17, December 31, 1995 1994 ----------- ------------ Assets Current assets: Cash and cash equivalents $ 3,276 $ 4,773 Short-term investments 250,657 174,665 Receivables, net 114,973 104,695 Inventories 93,123 73,243 Deferred income taxes 7,878 6,914 Prepaid expenses and deposits 15,040 7,705 ----------- ----------- Total current assets 484,947 371,995 ----------- ----------- Investments in and advances to foreign subsidiaries not consolidated 26,110 30,453 ----------- ----------- Property, plant and equipment 518,206 430,151 Accumulated depreciation (189,669) (175,080) ----------- ----------- Net property, plant and equipment 328,537 255,071 ----------- ----------- Other assets 17,891 17,692 ----------- ----------- Total assets $857,485 $675,211 =========== =========== Liabilities and Stockholders' Equity ------------------------------------ Current liabilities: Notes payable and current maturities of long-term debt $ 34,753 $ 23,984 Accounts payable 46,969 42,560 Income taxes payable 4,222 11,931 Other current liabilities 59,112 33,999 ----------- ----------- Total current liabilities 145,056 112,474 ----------- ----------- Long-term debt, less current maturities 307,115 177,666 ----------- ----------- Deferred income taxes 19,843 18,810 ----------- ----------- Other liabilities 24,415 20,181 ----------- ----------- 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 13,214 13,214 Unrealized gain (loss) on debt securities, (net of deferred income taxes of $92 and $466 at June 17, 1995 and December 31, 1994, respectively.) 152 (764) Retained earnings 346,202 332,142 ----------- ----------- Total stockholders' equity 361,056 346,080 ----------- ----------- Total liabilities and stockholders' equity $857,485 $675,211 =========== =========== See notes to condensed consolidated financial statements.
Page 2 SEABOARD CORPORATION AND SUBSIDIARIES Condensed Consolidated Statements of Earnings Twelve weeks ended June 17, 1995 and June 18, 1994 (Thousands of dollars except per share amounts)
June 17, June 18, 1995 1994 ----------- ----------- Net sales $255,402 $215,016 Cost of sales and operating expenses 215,189 175,084 ----------- ----------- Gross income 40,213 39,932 Selling, general and administrative expenses 31,101 24,472 ----------- ----------- Operating income 9,112 15,460 ----------- ----------- Income from foreign subsidiaries not consolidated 1,275 370 ----------- ----------- Other income (expense): Interest income 2,458 1,915 Interest expense (3,228) (3,191) Miscellaneous (83) 2,613 ----------- ----------- Total other income (expense) (853) 1,337 ----------- ----------- Earnings before income taxes 9,534 17,167 ----------- ----------- Income tax expense(benefit): Current 3,094 6,188 Deferred (324) (165) ----------- ----------- Total income taxes 2,770 6,023 ----------- ----------- Net earnings $ 6,764 $ 11,144 =========== =========== Earnings per common share $ 4.55 $ 7.49 =========== =========== Dividends declared per common share $ .25 $ .25 =========== =========== 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 17, 1995 and June 18, 1994 (Thousands of dollars except per share amounts)
June 17, June 18, 1995 1994 ----------- ----------- Net sales $491,325 $472,414 Cost of sales and operating expenses 409,025 396,413 ----------- ----------- Gross income 82,300 76,001 Selling, general and administrative expenses 59,499 48,739 ----------- ----------- Operating income 22,801 27,262 ----------- ----------- Income from foreign subsidiaries not consolidated 256 1,169 ----------- ----------- Other income(expense): Interest income 4,759 3,659 Interest expense (5,762) (6,549) Miscellaneous (130) 2,675 ----------- ----------- Total other income (expense) (1,133) (215) ----------- ----------- Earnings before income taxes 21,924 28,216 ----------- ----------- Income tax expense(benefit): Current 7,625 9,005 Deferred (505) 591 ----------- ----------- Total income taxes 7,120 9,596 ----------- ----------- Net earnings $ 14,804 $ 18,620 =========== =========== Earnings per common share $ 9.95 $ 12.52 =========== =========== Dividends declared per common share $ .50 $ .50 =========== =========== 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 17, 1995 and June 18, 1994 (Thousands of Dollars)
June 17, June 18, 1995 1994 ----------- ----------- Net cash provided by operating activities $ 14,160 $ 14,367 ----------- ----------- Cash flows from investing activities: Purchase of investments (299,928) (375,425) Proceeds from the sale or maturity of investments 225,410 387,760 Capital expenditures (91,411) (28,057) Notes receivable 646 4,131 Investments and advances to foreign subsidiaries not consolidated 4,599 (118) ----------- ----------- Net cash used in investing activities (160,684) (11,709) ----------- ----------- Cash flows from financing activities: Notes payable to bank 11,064 (6,178) Proceeds from long-term debt 131,269 3,792 Principal payments (2,115) (6,695) Deferred grants 3,927 4,341 Bond construction fund 1,626 -- Dividends paid (744) (744) ----------- ----------- Net cash provided by (used in) financing activities 145,027 (5,484) ----------- ----------- Net decrease in cash and cash equivalents (1,497) (2,826) Cash and cash equivalents at beginning of year 4,773 7,110 ----------- ----------- Cash and cash equivalents at end of quarter $ 3,276 $ 4,284 =========== =========== 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 and cash equivalents. 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 17, 1995, and the results of operations and cash flows for the twenty-four weeks ended June 17, 1995 and June 18, 1994. Note 2 ------ The results of operations for the twenty-four weeks ended June 17, 1995 and June 18, 1994 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 17, 1995 and December 31, 1994 (in thousands):
June 17, December 31, 1995 1994 ----------- ------------ At lower of last-in, first-out (LIFO) cost or market: Live poultry $23,805 $22,230 Dressed poultry 14,699 13,344 Feed and baking ingredients, packaging supplies and other 7,280 6,121 ----------- ------------ 45,784 41,695 LIFO allowance (3,021) (1,390) ----------- ------------ Total inventories at lower of LIFO cost or market 42,763 40,305 ----------- ------------ At lower of first-in, first-out (FIFO) cost or market: Live hogs 14,275 10,122 Grain, flour and feed 19,787 7,622 Crops in production, fertilizers and pesticides 5,295 6,132 Dressed pork 2,615 2,523 Other 8,388 6,539 ----------- ------------ Total inventories at lower of FIFO cost or market 50,360 32,938 ----------- ------------ Total inventories $93,123 $73,243 =========== ============
Page 6 Second Quarter 1995 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, is presented as follows: June 17, 1995 December 31, 1994 ------------- ----------------- Current Ratio 3.34 3.31 Working Capital $339,891 $259,521 (in thousands) Significant increases in accounts receivable, inventories and current liabilities resulted from expanded commodity trading activities in the second quarter of 1995. At the end of the quarter, certain commodity trades had not been completed. Accordingly, these commodities were still in inventory and advance payments received were included in current liabilities. The increase in receivables also includes higher poultry export and transportation sales which have longer collection terms. The Company invested $69.4 million in property, plant and equipment through June 17, 1995 in the food production and processing segment. Capital expenditures of $52.6 million were for construction of hog farrowing and finishing facilities, a feedmill and a pork processing plant. The facilities are located in Oklahoma, Colorado and Kansas. Cumulative capital expenditures on these facilities since 1992 total $117.7 million. The Company expects additional expenditures for facilities and working capital to total approximately $149 million in the next two years, of which approximately $45 million is currently under contract. Management anticipates the facilities will be financed from the proceeds of the senior notes issued in June, 1995, described below, and cash generated from operations. Other capital expenditures in the food production and processing segment through June 17, 1995 consisted of $16.8 million in general modernization and efficiency upgrades of plant and equipment. Capital expenditures in the transportation segment through June 17, 1995 totaled $24.0 million. The Company purchased two cargo vessels for $14.7 million for use in the ocean liner service and other capital expenditures Page 7 Liquidity and Capital Resources (continued) ------------------------------------------- of $9.3 million were for general replacement and upgrades of property and equipment. $2.6 million of the capital expenditures were financed through a capitalized lease and the balance was paid with cash. In June 1995, the Company issued $125.0 million in unsecured Senior Notes to various lenders, the proceeds of which will be used for the construction of hog production facilities, a pork processing plant and for general corporate purposes. The notes bear interest at 7.88% and mature in equal installments of $25.0 million on June 1, 2003, 2004, 2005, 2006 and 2007. The Company borrowed the proceeds of $3.3 million in Adjustable rate, 7-Day Demand Revenue Bonds issued by the Guymon Utilities Authority. The funds are being used to construct a waste pre-treatment facility for the Company's pork processing plant currently under construction in Guymon, Oklahoma. As of June 17, 1995 and December 31, 1994, the Company had $31.6 million and $20.6 million, respectively, outstanding under the Company's short-term uncommitted, unsecured credit lines from banks totaling $122.0 million. Management intends to continue seeking opportunities for expansion in the industries in which it operates and believes that the Company's liquidity, capital resources and borrowing capabilities are adequate for its current and intended operations. Results of Operations --------------------- Net sales for the twelve and twenty-four weeks ended June 17, 1995 increased by $40.4 million and $18.9 million, respectively, compared to the same periods one year earlier. Operating income for the twelve and twenty-four weeks ended decreased by $6.3 million and $4.5 million, respectively, 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 are as follows (in thousands): Net Sales Operating Income --------------------- ------------------------- Quarter Year-to-date Quarter Year-to-date -------- ------------ --------- -------------- Food production and processing $14,220 $ (18,780) $ (5,292) $(2,261) Transportation 26,023 34,769 555 (1,278) Other 143 2,922 (1,611) (922) -------- ------------ --------- -------------- $40,386 $ 18,911 $ (6,348) $(4,461) ======== ============ ========= ============== Page 8 Results of Operations (continued) --------------------------------- Food Production and Processing Segment Net sales of pork products and live hogs for the twelve and twenty-four weeks ended June 17, 1995 totaled $16.6 million and $34.7 million, respectively. Year-to-date net sales from pork products declined by $36.3 million primarily from discontinuing the fresh pork operations at the Company's Minnesota processing plant in March, 1994. Gross income in pork operations for the twelve and twenty-four weeks ended June 17, 1995 were a negative $1.3 million and $1.7 million, respectively. The margins declined for the quarter and year to date by $0.1 million and $1.8 million, respectively, compared to the same periods one year earlier. The decline is primarily due to start-up costs of the pork operations located in Western Oklahoma and Southwest Kansas. Management expects Third and Fourth Quarter results to continue to be adversely effected by costs associated with the start-up of its hog processing plant in Guymon, Oklahoma in October, 1995. Net sales of poultry products for the twelve and twenty-four weeks ended June 17, 1995 were $106.9 million and $202.7 million, respectively. Net sales increased for the quarter and year to date by $6.7 million and $12.7 million, respectively, compared to the same periods one year earlier. The increase in net sales of poultry products was primarily related to increased production at the Company's poultry processing plant in Western Kentucky and higher volume of further processed and export products which have higher sales prices relative to other products. Gross income on poultry products for the twelve and twenty-four weeks ended was $10.7 million and $21.9 million, respectively. Gross income decreased for the twelve weeks ended June 17, 1995 by $4.1 million compared to the same period one year earlier despite significantly lower finished feed costs. The decline was primarily related to a decrease in the average selling price of poultry products and higher processing costs. Year-to-date gross income increased by $0.8 million compared to the same period one year ago. Operating income within the food production and processing segment decreased compared to the same quarter one year earlier. The decrease is primarily related to a decline in the average sales price of poultry products, increased processing costs on poultry products and operating losses from the pork operations resulting from expenses incurred in advance of the opening of the processing plant now being constructed in Guymon, Oklahoma. Higher grain costs are expected to increase the cost of production at the Company's live hog and poultry operations in the second half of 1995. Transportation Segment Net sales in the transportation segment increased for the twelve and twenty-four weeks ended June 17, 1995 compared to the same period one year earlier. The increase resulted from new services to South America and the Caribbean Basin and increased volume within existing services in Central America. Operating income for the twenty-four weeks ended decreased compared to the same period one year ago. The decrease is primarily related to the increased operating costs resulting from new services. Page 9 Results of Operations (continued) The U. S. Congress is currently considering the elimination of the Federal Maritime Commission. Management cannot yet determine the impact of this, however, it could result in greater competition from larger shipping lines and lower freight rates. Selling, General and Administrative Expenses Selling, general and administrative expenses increased for the twelve and twenty-four weeks ended June 17, 1995 by $6.6 million and $10.8 million, respectively, compared to the same period one year earlier. The increase is primarily attributable to staffing and expenses relating to start-up of the pork operations in Western Oklahoma and Southwest Kansas. In addition, selling, general and administrative costs increased as a result of reserving for certain foreign accounts receivable and increased marketing and administrative support of expanded shipping routes and product lines. Other Interest income increased during the twelve and twenty-four weeks ended June 17, 1995 compared to the same period one year earlier. The increase is primarily related to increased rates on invested funds. Interest expense decreased for the twenty-four weeks ended June 17, 1995 compared to the same period one year ago principally because the Company retired $26.3 million of long-term debt in the fourth quarter of 1994. A significant portion of the Company's debt has fixed rates of interest, and therefore increasing interest rates did not have a significant effect on interest expense. Interest rate exchange agreements resulted in additional interest expense of $0.5 million in the first quarter of 1994. Miscellaneous income in the second quarter of 1994 includes a $2.9 million gain from liquidating an interest rate exchange agreement. 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. Foreign currency gains and losses included in earnings for the first quarter of 1995 and 1994 were not material. The effective tax rate for the quarter declined compared to the same period one year earlier. The decrease is attributable to an increase in tax exempt interest income, utilization of foreign tax credits, increases in foreign sales corporation (FSC) income which is taxed at substantially lower rates and increased earnings of nonconsolidated subsidiaries which are recorded net of tax. The expiration of the Targeted Jobs Tax Credit in 1995 partially offset the decline in the effective tax rate. The Company does not believe its businesses have been materially adversely affected by inflation. Page 10 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 June 17, 1995. 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: July 31, 1995 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 EX-27 2
5 THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE FIRST QUARTER 10-Q FILING AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 0000088121 SEABOARD CORPORATION 1000 6-MOS DEC-31-1995 JAN-01-1995 JUN-17-1995 3276 250657 114973 13905 93123 484947 518206 189669 857485 145056 307115 1488 0 0 359568 857485 491325 491325 409025 409025 59499 0 4759 21924 7120 14804 0 0 0 14804 9.95 9.95