-----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, GItkRxOpX4V+g5UIoYSHzY3A5ehrGJVT2GO+s4wNwu95TEBKFSlHEFpPK8C7Iq5O Hl8CqV8tsNHN3aPiHmE3PA== 0000088121-96-000022.txt : 19961023 0000088121-96-000022.hdr.sgml : 19961023 ACCESSION NUMBER: 0000088121-96-000022 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960907 FILED AS OF DATE: 19961022 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: 96646281 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 1996 3RD 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 September 7, 1996 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 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 No.) incorporation or organization) 9000 W. 67th Street, Shawnee Mission, KS 66202 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (Address of principal executive offices) (Zip Code) 913-676-8800 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (Registrant's telephone number, including area code) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 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 September 7, 1996. Total pages in filing - 13 pages SEABOARD CORPORATION AND SUBSIDIARIES Condensed Consolidated Balance Sheets September 7, 1996 and December 31, 1995 (Thousands of Dollars) Part I - Financial Information September 7, December 31, 1996 1995 ------------ ------------ Assets ------ Current assets: Cash and cash equivalents $ 8,443 $ 5,529 Short-term investments 106,036 135,197 Receivables, net 154,379 117,709 Inventories 142,681 112,843 Income taxes receivable 12,265 -- Deferred income taxes 8,638 8,231 Prepaid expenses and deposits 16,807 14,251 ------------ ----------- Total current assets 449,249 393,760 ------------ ----------- Investments in and advances to foreign subsidiaries not consolidated 31,964 26,140 ------------ ----------- Property, plant and equipment 698,611 650,402 Accumulated depreciation (237,062) (211,987) ------------ ----------- Net property, plant and equipment 461,549 438,415 ------------ ----------- Other assets 15,321 19,817 ------------ ----------- Total assets $ 958,083 $ 878,132 ============ =========== Liabilities and Stockholders' Equity ------------------------------------ Current liabilities: Notes payable and current maturities of long-term debt $ 115,565 $ 40,826 Accounts payable 69,632 75,749 Income taxes payable -- 744 Other current liabilities 75,342 57,417 ------------ ----------- Total current liabilities 260,539 174,736 ------------ ----------- Long-term debt, less current maturities 297,231 297,440 ------------ ----------- Deferred income taxes 21,288 14,569 ------------ ----------- Other liabilities 26,963 25,577 ------------ ----------- 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 tax benefit (expense) of $23 and ($150) at September 7, 1996 and December 31, 1995, respectively) (48) 251 Retained earnings 337,408 350,857 ------------ ----------- Total stockholders' equity 352,062 365,810 ------------ ----------- Total liabilities and stockholders' equity $ 958,083 $ 878,132 ============ =========== Page 2 SEABOARD CORPORATION AND SUBSIDIARIES Condensed Consolidated Statements of Earnings Twelve weeks ended September 7, 1996 and September 9, 1995 (Thousands of dollars except per share amounts) September 7, September 9, 1996 1995 ------------ ------------ Net sales $ 350,739 $ 288,263 Cost of sales and operating expenses 311,314 248,341 ------------ ------------ Gross income 39,425 39,922 Selling, general and administrative expenses 30,139 30,426 ------------ ------------ Operating income 9,286 9,496 ------------ ------------ Income (loss) from foreign subsidiaries not consolidated (557) 1,701 ------------ ------------ Other income(expense): Interest income 1,762 3,349 Interest expense (6,358) (4,648) Miscellaneous 898 39 ------------ ------------ Total other income (expense) (3,698) (1,260) ------------ ------------ Earnings before income taxes 5,031 9,937 ------------ ------------ Income tax expense(benefit): Current (2,011) 4,002 Deferred 3,921 (1,145) ------------ ------------ Total income taxes 1,910 2,857 ------------ ------------ Net earnings $ 3,121 $ 7,080 ============ ============ Earnings per common share $ 2.10 $ 4.76 ============ ============ 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 Thirty-Six weeks ended September 7, 1996 and September 9, 1995 (Thousands of dollars except per share amounts) September 7, September 9, 1996 1995 ------------ ------------ Net sales $ 978,873 $ 779,588 Cost of sales and operating expenses 891,343 657,366 ------------ ------------ Gross income 87,530 122,222 Selling, general and administrative expenses 95,054 89,925 ------------ ------------ Operating income (loss) ( 7,524) 32,297 ------------ ------------ Income (loss) from foreign subsidiaries not consolidated (988) 1,957 ------------ ------------ Other income(expense): Interest income 5,362 8,108 Interest expense (17,913) (10,410) Miscellaneous 958 ( 91) ------------ ------------ Total other income (expense) (11,593) (2,393) ------------ ------------ Earnings (loss) before income taxes (20,105) 31,861 ------------ ------------ Income tax expense(benefit): Current (14,258) 11,627 Deferred 6,486 (1,650) ------------ ------------ Total income taxes (7,772) 9,977 ------------ ------------ Net earnings (loss) $ (12,333) $ 21,884 ============ ============ Earnings (loss) per common share $ (8.29) $ 14.71 ============ ============ Dividends declared per common share $ .75 $ .75 ============ ============ 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 Thirty-Six weeks ended September 7, 1996 and September 9, 1995 (Thousands of Dollars) September 7, September 9, 1996 1995 ------------ ------------ Cash flows from operating activities: Net earnings (loss) $ (12,333) $ 21,884 Adjustment to reconcile net earnings to net cash provided by (used in) operating activities: Depreciation and amortization 36,410 27,897 Deferred income taxes 6,312 (1,119) Other operating activities 1,335 (9,819) Changes in assets and liabilities: Receivables (48,935) (11,028) Inventories (29,838) (20,688) Prepaid expenses and deposits (2,556) (5,596) Liabilities, excluding debt 12,345 27,730 ------------ ----------- Net cash provided by (used in) operating activities (37,260) 29,261 ------------ ----------- Cash flows from investing activities: Purchase of investments (234,602) (560,015) Proceeds from the sale or maturity of investments 263,291 519,138 Capital expenditures, net (59,544) (140,194) Notes receivable 797 1,188 Investments and advances to foreign subsidiaries not consolidated ( 6,812) 5,424 ------------ ----------- Net cash (used in) investing activities (36,870) (174,459) ------------ ----------- Cash flows from financing activities: Notes payable to bank 75,114 10,723 Proceeds from long-term debt 10,348 131,369 Principal payments (10,932) (2,879) Deferred grants 350 3,927 Bond construction fund 3,280 3,393 Dividends paid (1,116) (1,116) ------------ ----------- Net cash provided by financing activities 77,044 145,417 ------------ ----------- Net increase in cash and cash equivalents 2,914 219 Cash and cash equivalents at beginning of year 5,529 4,773 ------------ ----------- Cash and cash equivalents at end of quarter $ 8,443 $ 4,992 ============ =========== 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 September 7, 1996, and the results of operations and cash flows for the periods ended September 7, 1996 and September 9, 1995. Note 2 - ------ The results of operations for the thirty-six weeks ended September 7, 1996 and September 9, 1995 are not necessarily indicative of the results to be expected for the full year. Note 3 - ------ The following is a summary of inventories at September 7, 1996 and December 31, 1995 (in thousands): September 7, December 31, 1996 1995 ------------ ------------ At lower of last-in, first-out (LIFO) cost or market: Live poultry $ 30,967 $ 26,442 Dressed poultry 18,237 21,219 Feed and baking ingredients, packaging supplies and other 8,995 8,772 ------------ ------------ 58,199 56,433 LIFO allowance (13,137) (6,965) ------------ ------------ Total inventories at lower of LIFO cost or market 45,062 49,468 ------------ ------------ At lower of first-in, first-out (FIFO) cost or market: Live hogs 53,220 28,626 Grain, flour and feed 20,805 19,551 Dressed pork 3,283 166 Crops in production, fertilizers and pesticides 9,663 7,639 Other 10,648 7,393 ------------ ------------ Total inventories at lower of FIFO cost or market 97,619 63,375 ------------ ------------ Total inventories $ 142,681 $ 112,843 ============ ============ Page 6 Management's Discussion and Analysis LIQUIDITY AND CAPITAL RESOURCES ___________________________________________________________________________ September 7, December 31, (Dollars in millions) 1996 1995 - --------------------------------------------------------------------------- Current ratio 1.72:1 2.25:1 Working capital $ 188.7 $ 219.0 - --------------------------------------------------------------------------- Cash used in operating activities for the thirty-six weeks ending September 7, 1996 was $37.3 million compared to $29.3 million of cash provided by operations for the same period one year earlier. The decrease in cash was primarily related to the net loss of $12.3 million and increased inventories, receivables and liabilities exclusive of debt. Inventories increased primarily as a result of expansion of the live hog herd, higher priced feed raw materials and finished product at the Guymon pork plant which began operating in December, 1995. The increase in receivables was primarily related to increased sales of pork and poultry products, sales of wheat to affiliated nonconsolidated foreign flour mills, advances to a nonconsolidated foreign subsidiary and income taxes receivable resulting from the net loss. The increase in liabilities consists primarily of accrued voyage expenses. The Company invested $75.5 million in property, plant and equipment through September 7, 1996 in the food production and processing segment. Capital expenditures of $64.5 million were for construction of hog farrowing and finishing facilities, two feed mills and the Guymon pork processing plant. Cumulative capital expenditures on these facilities since 1992 total $286.2 million. The Company expects additional expenditures for hog farrowing and finishing facilities and working capital to total approximately $39 million in the next two years, of which approximately $6.6 million is currently under contract. Management anticipates the facilities will be financed from cash. Capital expenditures of $1 million were made to complete a $9.5 million expansion of processing capacity at the Company's poultry plant in Athens, Georgia. Other capital expenditures in the food production and processing segment through September 7, 1996 included $10 million in general modernization and efficiency upgrades of plant and equipment. Capital expenditures in the transportation segment through September 7, 1996 totaled $7.6 million for general replacement and upgrades of property and equipment. Page 7 At December 31, 1995, the Company had $33.8 million outstanding under short- term uncommitted credit lines from banks that totaled $122 million. During 1996, the Company entered into one-year revolving credit facilities totaling $90 million and a five-year $50 million revolving credit facility and reduced certain uncommitted credit lines. As of September 7, 1996, the Company had $82.5 million outstanding under the one-year revolving credit facilities and $26 million outstanding under the remaining short-term uncommitted credit lines totaling $87.5 million. The Company borrowed $10 million of the five- year revolving credit facility, the proceeds of which were used to retire $10 million in existing term loans. Utilization of the five-year revolving credit facility is subject to debt covenant compliance. During the quarter the Company sold three vessels used in the transportation segment to a third party for $28.5 million. The vessels have been chartered from the third party for terms ranging from seven to ten years. The Company realized a $5.5 million gain on the sale of the vessels which will be deferred and recognized over the term of the charter agreements. The charters are accounted for as operating leases. During the quarter, the Company purchased for $8.8 million a non-controlling interest in Ingenio y Refineria San Martin del Tabacal S.A. (Tabacal). Tabacal is an Argentinean company primarily engaged in growing and refining sugar cane and citrus production for consumption in Argentina and for export. The investment will be accounted for using the equity method of accounting. As of September 7, 1996, the Company had advanced $9.2 million to Tabacal for working capital requirements. Subsequent to quarter end, the Company has advanced an additional $9.7 million. Subsequent to the end of the third quarter, the Company acquired for $4.6 million a 50% interest in a flour mill located in Mozambique. The purchase price consisted of $1 million payable at closing and a note of $3.6 million payable in installments during the next six years. The investment will be accounted for using the equity method of accounting. 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 thirty-six weeks ended September 7, 1996 increased by $62.5 million and $199.3 million, respectively, compared to the same periods one year earlier. Operating income for the twelve and thirty-six weeks ended September 7, 1996 decreased by $.2 million and $39.8 million, respectively, compared to the same periods one year ago. Page 8 The segment distribution of the increase (decrease) in net sales and operating income compared to the prior year are as follows (in millions): Net Sales Operating Income ----------------------- ---------------------- Quarter Year-to-Date Quarter Year-to-Date ----------------------- ---------------------- Food Production and Processing $ 62.6 $ 111.6 $ ( .1) $ (22.1) Commodity 1.8 92.5 2.0 4.6 Transportation (2.7) (9.8) (1.8) (21.6) Other .8 5.0 ( .3) (.7) -------- --------- -------- --------- $ 62.5 $ 199.3 $ ( .2) $ (39.8) ======== ========= ======== ========= Food Production And Processing Segment Net sales of poultry products for the quarter and year-to-date were $130.1 million and $352.6 million, respectively. This is an increase of $21.6 million and $41.3 million, respectively, compared to the same periods one year earlier. The increase in sales of poultry products was primarily related to increased production resulting from expanded processing capacity and an increase in the average selling price of poultry products. The increased sales prices were partially attributable to higher poultry markets and changes in product mix. Gross income on poultry products for the quarter and year-to - -date were $12 million and $15.5 million, respectively. Gross income decreased for the quarter and year-to-date by $4.1 million and $22.4 million, respectively, compared to the same periods one year earlier. The decrease in gross income is primarily related to higher feed costs. Net sales from the pork operations for the quarter and year-to-date totaled $60.4 million and $121.6 million, respectively. Net sales increased by $38.1 million and $64.5 million, respectively, compared to the same periods one year earlier. The increase resulted primarily from sales of pork products at the Company's hog processing plant which began operations in December 1995. During the second quarter of 1996, sales of market hogs to third parties were discontinued. The market hogs produced at the Company's live hog operations are slaughtered at the pork processing plant. The net increase in sales was partially offset by the decrease in sales resulting from discontinuing the operations at the Albert Lea, Minnesota pork processing plant in December 1995. Gross income from pork operations for the quarter was $2.2 million, an increase of $1.8 million compared to the same period one year earlier. The increase in gross income is primarily related to an increase in the number of hogs processed at the Company's processing plant and higher sales prices Page 9 on pork products. Year-to-date gross income was a negative $2.6 million, a decline of $1.3 million compared to the same period one year ago. The decline was primarily related to start-up costs associated with the Company's hog processing plant. The segment's operating income for the quarter was almost unchanged compared to the same period one year earlier despite higher finished feed costs. The increase in finished feed costs was offset by higher sales prices for poultry and pork products and efficiencies in the pork operations resulting from increased production of live hogs. Year-to-date operating income declined by $22.1 million compared to the same period one year ago. The decline was primarily related to higher finished feed costs. The higher finished feed costs are primarily a result of higher corn prices. Higher corn prices which have impacted and will continue to impact the cost of livestock for the next quarter declined significantly subsequent to the end of the third quarter. Significant declines in the price of corn should lessen the cost of growing livestock in future quarters. At this time, management cannot assess whether corn will remain at lower price levels or the net effect the lower priced corn will have on operating income. Commodity Trading Net sales from commodity trading activity increased for the quarter and year- to-date by $ 1.8 million and $92.5 million, respectively, compared to the same periods one year earlier. The increase is primarily related to expanded trading of wheat, soybeans, corn and other grains in foreign markets. Transportation Segment Net sales from containerized cargo operations decreased for the quarter and year-to-date by $2.7 million and $9.8 million, respectively, compared to the same periods one year earlier despite an increase in the number of revenue producing units moved. The decline was primarily related to lower freight rates in certain markets serviced by the Company compared to the same periods one year earlier. Operating income decreased by $1.8 million and $21.6 million, respectively, compared to the same periods one year earlier. The decrease was primarily related to lower freight rates. Management cannot predict when rates in these markets will improve. Other Operations Net sales from electric power generating increased for the quarter and year-to-date by $0.8 million and $5.4 million, respectively, compared to the same periods one year earlier. Page 10 Selling, General and Administrative Expenses Selling, general and administrative (SG&A) expenses for the quarter and year- to-date totaled $30.1 million and $95.1 million, respectively. Year-to-date SG&A increased by $5.1 million compared to the same period one year earlier. The increase was primarily related to reserves for potentially uncollectible foreign receivables and SG&A costs associated with opening the Company's hog processing plant in Guymon, Oklahoma. The increases were partially offset by the decrease in SG&A costs from discontinuing the operations at the Albert Lea, Minnesota pork processing plant in December, 1995. Interest Income and Expense Interest income decreased for the quarter and year-to-date by $1.6 million and $2.7 million, respectively, compared to the same periods one year earlier. The decrease in interest income resulted primarily from a decline in invested funds. Interest expense increased for the quarter and year-to-date by $1.7 million and $7.5 million, respectively, compared to the same periods one year earlier. The increase was primarily related to increased short-term borrowing and the issuance of long-term debt in the second quarter of 1995. The Company does not believe its businesses have been materially adversely affected by general inflation. Page 11 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 September 7, 1996. This Form 10-Q contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, which may include statements concerning projection of revenues, income or loss, capital expenditures, capital structure or other financial items, statements regarding the plans and objectives of management for future operations, statements of future economic performance, statements of the assumptions underlying or relating to any of the foregoing statements and other statements which are other than statements of historical fact. These statements appear in a number of places in this Form 10-Q and include statements regarding the intent, belief or current expectations of the Company and its management with respect to (I) the cost and timing of the completion of new or expanded facilities, (ii) the Company's financing plans, (iii) the Company's competitive position, (iv) the supply and price of feed stocks and other materials used by the Company, (v) the demand and price for the Company's products and services, (vi) utilization of plant capacity, or (vii) other trends affecting the Company's financial condition or results of operations and acquisition of new business. Readers are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, and that actual results may differ materially as a result of various factors. The accompanying information contained in this Form 10-Q, including with limitation the information under the heading "Management's Discussion and Analysis of Financial Condition and Results of Operations" identifies important factors which could cause such differences. Page 12 PART II - OTHER INFORMATION --------------------------- SIGNATURE --------- 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 and principal financial officer. DATE: October 21, 1996 Seaboard Corporation by: /s/ Robert Steer ------------------------------------ Robert Steer, Vice President-Finance Page 13 EX-27 2 EX-27 FINANCIAL DATA SCHEDULE
5 THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE SECOND QUARTER 10-Q FILING AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 9-MOS DEC-31-1996 SEP-07-1996 8443 106036 154379 22570 142681 449249 698611 237062 958083 260539 297231 0 0 1488 350574 958083 978873 978873 891343 891343 95054 0 17913 (20105) (7772) (12333) 0 0 0 (12,333) (8.29) (8.29)
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