UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the 27 weeks ended July 2, 1994
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 1-9256
__________________
PREMARK INTERNATIONAL, INC.
(Exact name of registrant as specified in its charter)
Delaware 36-3461320
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1717 Deerfield Road, Deerfield, Illinois 60015
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (708)
405-6000
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 August 11, 1994, 63,683,851 shares of the Common Stock,
$1.00 par value, of the Registrant were outstanding.
PART I
FINANCIAL INFORMATION
Item 1. Financial Statements
a) Financial Statements of Registrant
Page
Index Number
Condensed Consolidated Statement of Income
(Unaudited) for the 13 week periods ended
July 2, 1994 and June 26, 1993................... 2
Condensed Consolidated Statement of Income
(Unaudited) for the 27 week period ended
July 2, 1994 and the 26 week period ended
June 26, 1993.................................... 3
Condensed Consolidated Balance Sheet
as of July 2, 1994 (Unaudited) and
December 25, 1993................................ 4
Condensed Consolidated Statement of Cash Flows
(Unaudited) for the 27 weeks ended
July 2, 1994 and the 26 weeks ended
June 26, 1993.................................... 6
Notes to Condensed Consolidated
Financial Statements (Unaudited)................. 7
The condensed consolidated financial statements of the
Registrant included herein have been prepared, without audit,
pursuant to the rules and regulations of the Securities and
Exchange Commission. Although certain information normally
included in financial statements prepared in accordance with
general accepted accounting principles has been condensed or
omitted, the Registrant believes that the disclosures are
adequate to make the information presented not misleading. It
is suggested that these condensed consolidated financial
statements be read in conjunction with the financial statements
and the notes thereto included in the Annual Report on Form 10-K
of the Registrant for its fiscal year ended December 25, 1993.
The condensed consolidated financial statements included herein
reflect all adjustments, consisting only of normal recurring
items, which, in the opinion of management, are necessary to
present a fair statement of the results for the interim periods
presented.
The results for interim periods are not necessarily indicative
of trends or of results to be expected for a full year.
- 1 -
PREMARK INTERNATIONAL, INC.
CONDENSED CONSOLIDATED STATEMENT OF INCOME
(Unaudited)
13 Weeks 13 Weeks
Ended Ended
July 2, June 26,
1994 1993
(In millions, except per share data) -------- --------
Net sales................................... $ 831.3 $ 763.2
-------- --------
Costs and expenses:
Cost of products sold...................... 428.6 388.5
Delivery, sales and administrative expense. 320.2 311.4
Interest expense........................... 6.0 7.7
Interest income............................ (1.4) (1.5)
Other (income) expense, net................ (0.3) 1.4
-------- --------
Total costs and expenses................ 753.1 707.5
-------- --------
Income before income taxes................... 78.2 55.7
Provision for income taxes................... 21.3 14.7
-------- --------
Net income................................... 56.9 41.0
Retained earnings, beginning of period....... 439.8 302.8
Cash dividends declared...................... (12.7) (8.0)
Cost of treasury stock issued in excess
of option exercise proceeds................ (1.1) -
-------- --------
Retained earnings, end of period............. $ 482.9 $ 335.8
======== ========
Net income per common and
common equivalent share<F1>................ $ 0.86 $ 0.61
======== ========
Average number of
common shares outstanding<F1>.............. 66.3 67.1
======== ========
Dividends declared per common share<F1>...... $ 0.20 $ 0.14
======== ========
<F1> All share-related amounts reflect a 2-for-1 stock split
declared on May 4, 1994.
See accompanying Notes to Condensed Consolidated Financial
Statements (Unaudited).
- 2 -
PREMARK INTERNATIONAL, INC.
CONDENSED CONSOLIDATED STATEMENT OF INCOME
(Unaudited)
27 Weeks 26 Weeks
Ended Ended
July 2, June 26,
1994 1993
(In millions, except per share data) --------- ---------
Net sales................................. $1,632.9 $1,469.3
--------- ---------
Costs and expenses:
Cost of products sold................... 840.2 754.0
Delivery, sales and
administrative expense................ 651.3 612.1
Interest expense........................ 12.3 15.2
Interest income......................... (2.9) (3.0)
Other expense, net...................... 1.9 2.0
--------- ---------
Total costs and expenses............. 1,502.8 1,380.3
--------- ---------
Income before income taxes................ 130.1 89.0
Provision for income taxes................ 35.4 24.0
--------- ---------
Net income................................ 94.7 65.0
Retained earnings, beginning of period.... 418.7 286.8
Cash dividends declared................... (21.6) (16.0)
Cost of treasury stock issued
in excess of option exercise proceeds... (8.9) -
--------- ---------
Retained earnings, end of period.......... $ 482.9 $ 335.8
========= =========
Net income per common
and common equivalent share<F1>......... $ 1.42 $ 0.97
========= ========
Average number of common shares
outstanding<F1>......................... 66.6 66.7
========= ========
Dividends declared per common share<F1>... $ 0.34 $ 0.265
========= ========
<F1> All share-related amounts reflect a 2-for-1 stock split
declared on May 4, 1994.
See accompanying Notes to Condensed Consolidated Financial
Statements (Unaudited).
- 3 -
PREMARK INTERNATIONAL, INC.
CONDENSED CONSOLIDATED BALANCE SHEET
ASSETS
July 2,
1994 December 25,
(Unaudited) 1993
(In millions) --------- ---------
Cash and cash equivalents............ $ 98.2 $ 140.0
Accounts and notes receivable........ 478.3 471.5
Less allowances for
doubtful accounts................ (41.4) (37.1)
--------- ---------
436.9 434.4
Inventories.......................... 507.6 441.2
Deferred income tax benefits......... 95.0 96.3
Prepaid expenses..................... 34.8 27.5
--------- ---------
Total current assets............... 1,172.5 1,139.4
--------- ---------
Investments, long-term receivables
and deferred charges............... 161.5 152.8
Less allowances for
doubtful accounts................ (28.3) (29.0)
--------- ---------
133.2 123.8
Property, plant and equipment........ 1,688.1 1,606.4
Less accumulated depreciation...... (990.2) (934.9)
--------- ---------
697.9 671.5
Intangibles, less accumulated
amortization....................... 183.7 182.3
--------- ---------
Total assets......................... $2,187.3 $2,117.0
========= =========
See accompanying Notes to Condensed Consolidated Financial
Statements (Unaudited).
- 4 -
PREMARK INTERNATIONAL, INC.
CONDENSED CONSOLIDATED BALANCE SHEET
LIABILITIES AND SHAREHOLDERS' EQUITY
July 2,
1994 December 25,
(Unaudited) 1993
(In millions) --------- --------
Accounts payable..................... $ 164.1 $ 194.4
Short-term borrowings and current
portion of long-term debt.......... 170.9 143.4
Accrued liabilities.................. 568.0 549.8
--------- ---------
Total current liabilities.......... 903.0 887.6
--------- ---------
Long-term debt....................... 167.9 168.0
Accrued postretirement
benefit cost....................... 147.4 144.5
Deferred income taxes................ 10.4 9.0
Other liabilities.................... 101.2 96.0
Shareholders' equity:
Preferred stock, $1.00 par value,
authorized 50,000,000 shares;
issued -- none................... - -
Common stock, $1.00 par value,
authorized 200,000,000 shares;
issued -- 69,003,840 shares<F1>
at July 2, 1994, and 34,501,920
at December 25, 1993............. 69.0 34.5
Capital surplus.................... 547.8 582.3
Retained earnings.................. 482.9 418.7
Treasury stock, 5,468,470 shares<F1>
at July 2, 1994, and 2,595,387
shares at December 25, 1993,
at cost.......................... (123.9) (93.0)
Unearned portion of restricted
stock issued for future service.. (0.6) (1.0)
Cumulative foreign currency
adjustments...................... (117.8) (129.6)
--------- ---------
Total shareholders' equity......... 857.4 811.9
--------- ---------
Total liabilities and
shareholders' equity............. $2,187.3 $2,117.0
========= =========
<F1> Reflects a 2-for-1 stock split declared on May 4, 1994.
See accompanying Notes to Condensed Consolidated Financial
Statements (Unaudited).
- 5 -
PREMARK INTERNATIONAL, INC.
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited)
27 Weeks 26 Weeks
Ended Ended
July 2, June 26,
1994 1993
(In millions) --------- ---------
Cash flows from operating activities:
Net income......................... $ 94.7 $ 65.0
Adjustment to reconcile net
income to net cash provided
by operating activities:
Depreciation and amortization.. 59.2 54.4
Changes in assets and liabilities:
Decrease in accounts
and notes receivable......... 4.1 13.9
Increase in inventory.......... (52.4) (37.7)
Decrease in accounts payable
and accrued liabilities...... (26.9) (11.4)
Increase (decrease) in
income taxes payable......... 0.7 (3.9)
Increase in deferred
income taxes................. (3.3) (1.8)
Other.............................. (9.0) 0.9
-------- --------
Net cash provided by
operating activities......... 67.1 79.4
-------- --------
Cash flows from investing activities:
Capital expenditures............... (70.9) (58.8)
Other.............................. (7.5) (0.9)
-------- --------
Net cash used in
investing activities......... (78.4) (59.7)
-------- --------
Cash flows from financing activities:
Net increase in short-term debt.... 176.1 5.2
Repayment of long-term debt........ (150.6) (1.8)
Proceeds from exercise of
stock options.................... 6.3 3.1
Purchase of treasury stock......... (45.3) (2.1)
Payment of dividends............... (17.9) (15.9)
-------- --------
Net cash used in
financing activities......... (31.4) (11.5)
-------- --------
Effect of exchange rate changes on
cash and cash equivalents.......... 0.9 (5.0)
-------- --------
Net (decrease) increase in cash
and cash equivalents............... $ (41.8) $ 3.2
======== ========
See accompanying Notes to Condensed Consolidated Financial
Statements (Unaudited).
- 6 -
PREMARK INTERNATIONAL, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Note 1: Basis of Presentation
The accompanying unaudited condensed consolidated financial
statements have been prepared in accordance with the
instructions to Form 10-Q and therefore do not include all
information and footnotes necessary for a fair presentation of
financial position, results of operations, and changes in
financial position in conformity with generally accepted
accounting principles. In the opinion of management, the
unaudited condensed consolidated financial statements include
all adjustments, consisting only of normal recurring items,
necessary for a fair presentation of financial position and
results of operations. The results of operations of any interim
period are not necessarily indicative of the results that may be
expected for a full fiscal year.
Premark's (the Company) fiscal year ends on the last Saturday of
December. Fiscal 1994 will consist of 53 weeks compared with 52
weeks in 1993. As a result, the first half includes 27 weeks in
1994 compared with 26 weeks in 1993.
Note 2: Inventories
Inventories, by component, are summarized as follows (in
millions):
July 2,
1994 December 25,
(Unaudited) 1993
-------- --------
Finished goods.................... $ 251.9 $ 196.8
Work in process................... 74.2 65.1
Raw materials and supplies........ 181.5 179.3
-------- --------
Total inventories............. $ 507.6 $ 441.2
======== ========
Note 3: Stock Split
On May 4, 1994, the Company's board of directors declared a
2-for-1 stock split which was effected in the form of a 100
percent stock dividend issued to shareholders of record on
June 16, 1994. All previously reported per share amounts have
been restated to reflect the stock split.
- 7 -
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
The following is a discussion of the results of operations for
the 13 weeks and 27 weeks ended July 2, 1994, compared with the
13 weeks and 26 weeks ended June 26, 1993, and changes in
financial condition during the 27 weeks ended July 2, 1994. The
current year's first half includes 27 weeks because the Company's
fiscal year ends on the last Saturday of each calendar year and
will include 53 weeks in 1994.
Net Sales
Net sales for the second quarter of 1994 were $831.3 million, an
increase of nearly 9 percent compared with net sales of $763.2
million in 1993. Net sales for the first half of 1994 were $1.6
billion, an improvement of more than 11 percent compared with
$1.5 billion in 1993. All segments generated increases in both
the second quarter and first half of 1994.
Costs and Expenses
Cost of products sold as a percentage of net sales was 51.6
percent for the second quarter of 1994 compared with 50.9
percent for the second quarter of 1993. For the first six
months, the rates in 1994 and 1993 were comparable. The increase
in the quarter was due to lower capacity utilization at
Tupperware U.S. and manufacturing inefficiencies at Florida Tile.
Delivery, sales and administrative expense as a percentage of net
sales decreased in the second quarter of 1994 to 38.5 percent
from 40.8 percent in the same period last year. For the six
months, the rate declined from 41.7 percent in 1993 to 39.9
percent in 1994. The lower ratio for both the quarter and the
first half in 1994 resulted from lower marketing expenses at the
Food Equipment Group. Additionally, at Tupperware, lower
promotional expenses were only partially offset by higher
distribution costs in the United States and Asia Pacific.
Provision for Income Taxes
The effective tax rate for both the second quarter and first half
of 1994 was 27.2 percent compared with 26.4 percent and 27.0
percent, respectively, for 1993. For the year ended December 25,
1993, the rate was 24.9 percent. The increase from 1993's full
year rate primarily reflects the lower amount of available
foreign tax credits. The Company's effective tax rates have been
below the statutory rates due to the strength of U.S. operating
results, which has allowed the recognition of previously reserved
assets for temporary differences, and the benefit of foreign tax
credits.
Net Income
Net income for the second quarter of 1994 rose 39 percent to $57
million, or 86 cents per share, from $41.0 million, or 61 cents
per share, in 1993, after reflecting the 2-for-1 stock split
declared on May 4, 1994. For the first six months of 1994, net
income was $94.7 million, or $1.42 per share, a 46 percent
increase from $65.0 million, or 97 cents per share. The
improvements for both the second quarter and first half reflect
substantial increases in profitability at all units except
Florida Tile. Tupperware accounted for almost half of the
improvements, led by Asia Pacific. Tupperware's European and
U.S. operations also contributed to the increases. The Food
Equipment Group also achieved substantially better results led by
the performance of its domestic operations. Ralph Wilson
Plastics reported significant growth in spite of continuing
provisions for adhesive claims, and West Bend reported record
results.
Segment results
Tupperware
Net sales for the second quarter of 1994 were $330.8 million, an
increase of 5 percent from $316.3 million in 1993. The growth
was driven primarily by an increase in volume in Asia Pacific.
For the first half, net sales increased 9 percent from $591.5
million in 1993 to $642.7 million in 1994. The increase was due
to improvement in Asia Pacific, Latin America and Europe, offset
in part by unfavorable foreign exchange rates, especially in
Europe, as well as lower sales in the U.S. Tupperware's
international operations accounted for 81 percent of its segment
sales for the second quarter and 83 percent for the first half of
1994.
Segment profit for the second quarter of 1994 was $54.6 million,
a 20 percent improvement over $45.4 million last year. For the
first half of 1994, segment profit was $88.8 million, an increase
of 24 percent from $71.4 million in 1993. The profit increases
for both the second quarter and first half were from
significantly better results in Asia Pacific and continued
improvement in Europe and the United States. Tupperware's
international operations accounted for 86 percent of its segment
profit for the second quarter and 98 percent for the first half
of 1994.
For the quarter, Tupperware's European sales increased 2 percent
to $136.4 million and profits rose 6 percent. The sales
improvement was led by Scandinavia, France, Austria and Italy,
due to favorable volume resulting from continued growth of the
sales force as well as higher selling prices. The profit growth
resulted from the higher sales along with lower promotional
expenses, primarily in Germany. Asia Pacific sales increased 26
percent to $89.1 million, and segment profit more than doubled
from 1993. The favorable sales comparison was driven principally
by higher volume in Japan, although Korea, the Philippines and
some of the smaller markets also showed increases. Part of the
increase in Japan reflected the benefit of a change in the timing
of a major annual promotional program, which was held in the
second quarter this year versus the third quarter in 1993. The
growth in sales plus lower manufacturing expenses more than
offset higher volume related promotional and warehousing costs.
In the U.S., sales for the quarter declined to $64.3 million from
$70.4 million in 1993. The sales decline reflects mixed results
with promotional experiments undertaken during the quarter and a
less productive sales force. Segment profit of $8.0 million was
a $0.7 million improvement over 1993. Profit increased, despite
the lower sales, due to lower promotional costs and continued
restructuring savings. Latin America sales for the quarter rose
2 percent to $33.2 million, primarily due to higher volume in
Mexico. Segment profit, however, declined significantly due to
higher operating expenses overall and foreign exchange losses in
Brazil. Canadian sales were $6.8 million, down 6 percent on a
decline in the number of active dealers. Segment profit declined
significantly due to the lower sales.
For the first half, Tupperware Europe reported modest increases
in sales and segment profit. However, before considering the
negative impact of foreign exchange rates, the region had strong
sales and segment profit increases. The segment profit increase
resulted primarily from gains in Germany and Scandinavia that
outweighed poor results in the United Kingdom. Asia Pacific's
sales and segent profit showed significant improvement with
particular strength in Japan and Korea. Despite a slight
decrease in sales, U.S. segment profit rose by $1.8 million to
$3.1 million in 1994, due to lower promotional costs and savings
from the 1992 restructuring. While Latin America's sales rose
significantly due to strength in Mexico, profits declined
modestly due to higher operating expenses overall and the
negative effect of foreign exchange in Brazil. Canada's segment
profit declined significantly due to somewhat lower sales and
higher promotional and other operating expenses.
Food Equipment Group
Net sales for the second quarter of 1994 were $275.1 million, an
increase of 9 percent compared with $251.9 million in 1993. For
the first half, net sales also increased 9 percent from $485.5
million in 1993 to $531.3 million in 1994. The increases in both
periods were the result of significantly higher volume in the
U.S. International operations accounted for 39 percent of
segment sales in both the second quarter and first half.
For the second quarter, segment profit of $18.0 million was
significantly higher than 1993's $10.8 million, primarily due to
the higher sales in the U.S. and lower expenses in Europe as a
result of the reduction in the work force last year. For similar
reasons, first half segment profit grew to $29.0 million from
$17.4 million in 1993. International operations accounted for 28
percent of segment profit for both the second quarter and first
half.
U.S. sales rose 15 percent for both the second quarter and first
half due to increases in all markets and across all product
lines. Segment profit increased significantly, by 68 percent and
78 percent, respectively, over the second quarter and first half
of last year, due to higher volume and nominal price increases.
In May 1994, a $23 million verdict was entered against one of the
domestic Food Equipment Group companies in a product liability
lawsuit following a jury trial. The Company does not believe the
verdict to be justified, and is vigorously pursuing post trial
motions and will appeal the verdict if necessary. Although the
ultimate outcome is uncertain, the Company does not expect the
final resolution of this matter to have any material effect on
its financial condition or results of operations.
European sales were essentially even with last year's amounts for
both the quarter and first half, as improvements in the United
Kingdom and Italy were mostly offset by continued weakness in
Germany and France. Profits, however, rose 59 percent for the
quarter and 47 percent for the half due to savings resulting from
the reduction in the work force, which more than offset the
impact of product discounting. In Canada in the second quarter,
sales rose modestly, but segment profit increased significantly,
from a low base, due to the higher sales. For the first half,
Canadian sales were essentially even, due to unfavorable foreign
exchange rates. Segment profit dropped significantly due to
lower production levels in the first quarter.
Consumer and Decorative Products
Net sales were $225.4 million for the second quarter of 1994, an
increase of 16 percent compared with $195.0 million in 1993. For
the first half, sales grew 17 percent from $392.3 million in 1993
to $458.9 million in 1994. Segment profit for the second quarter
was $16.9 million, a 50 percent increase from $11.3 million in
1993. For the first half, segment profit also improved 50
percent from $23.0 million in 1993 to $34.5 million in 1994.
The sales growth for both the second quarter and first half
resulted from double digit increases at all units. Higher
segment profit for both periods was driven by improvements at all
units except Florida Tile. Ralph Wilson Plastics' segment profit
increased significantly for both the quarter and first half from
the effect of record volume and lower manufacturing costs, which
was only partially offset by higher operating expenses and
increased adhesive claims costs. The provision for adhesive
claims was $6.0 million and $12.0 for the second quarter and
first half, respectively, versus $5.1 million and $6.5 million,
respectively, for the same periods in 1993. The Company
continues to evaluate adhesive claims, and has recorded reserves
associated with the issue. In addition, the Company is
negotiating with its insurance carriers over the amount of
coverage. The potential benefit of such recoveries has not been
quantified. Overall, however, the Company has not been able to
predict its aggregate cost associated with the claims, and its
reserves are subject to revision based on an ongoing review of
new claims data. Charges could continue during the remainder of
1994 and beyond.
At Hartco, increased sales volume drove profit growth for both
the second quarter and first half. Florida Tile, despite higher
volume, saw profits decline substantially for both the second
quarter and first half due to manufacturing inefficiencies and
higher selling, promotional and systems costs.
West Bend achieved record segment profit for both the second
quarter and first half from higher volume, including especially
strong sales of its bread makers. A labor dispute at the sole
domestic supplier of one of the primary raw materials used in
West Bend's premiere cookware lines was resolved in the second
quarter. Although the dispute caused some disruption in West
Bend's supply, there was no significant effect on the Company's
results, and the current supply of raw materials is adequate.
Precor generated a strong sales increase for the quarter and
significant growth in the first half, driven by strong treadmill
demand. A small segment loss for the quarter was a significant
improvement over last year. For the first half, Precor's segment
profit was significantly higher than the previous year's, also
from increased sales.
Financial Condition
Net cash provided by operating activities amounted to $67.1
million for the first half of 1994, compared with $79.4 million
in the first half of 1993. The decrease was due to a higher
level of net inventories and the timing of accounts payable
disbursements. The increased levels of inventories are to
support higher sales levels. Also, at Tupperware, inventories
increased due to an expanded product line, increased levels of
purchased product, mixed results associated with certain
promotions and the desire to improve service levels.
Net cash used in investing activities, mainly for capital
expenditures, was $78.4 million and $59.7 million in the first
half of 1994 and of 1993, respectively. In addition to capital
expenditures, in 1994 the Company made two small acquisitions
which required $6.1 million in cash, while in 1993 a small
subsidiary was sold. Net cash used in financing activities was
$31.4 million in the first half of 1994 compared with $11.5
million in the first half of 1993. The variation in net cash
flows associated with financing activities reflects outflows for
repurchases of the Company's common stock under its repurchase
plan. Partially offsetting these outflows was an increase in
debt levels to finance the higher level of working capital. On
February 1, 1994, the Company called its $150 million 8 3/8%
notes, which had a stated maturity date in 1997. The redemption
was funded through available cash and the issuance of commercial
paper at more favorable rates.
The total debt-to-capital ratio as of the end of the second
quarter of 1994 was 28.3 percent, slightly lower than the 28.9
percent at the end of the second quarter of 1993, but slightly
higher than the 27.7 percent ratio as of December 25, 1993, as a
result of the higher level of borrowings. Working capital as of
July 2, 1994, increased by $17.7 million from December 25, 1993,
as decreases in cash and increases in short-term borrowings and
accrued liabilities were more than offset by an increase in
inventories and a decrease in accounts payable.
In June 1994, the Company entered into a new $250 million
revolving credit facility with a group of banks. The new
agreement expires in May 1999, and replaces the Company's
existing facility for the same amount which was to expire in May
1995. As of July 2, 1994, unused lines of credit were
approximately $353 million, including $149 million under the
revolver. Future cash flows, lines of credit and other short-
term financing are expected to be adequate to fund operating and
investment requirements.
On May 4, 1994, the Company's board of directors declared a
2-for-1 stock split which was effected in the form of a 100
percent stock dividend to shareholders of record on June 16,
1994.
Under its repurchase plan announced in 1993, the Company is
purchasing up to 6,000,000 of its shares of common stock, on a
post-split basis, over five years with volume and timing
dependent on market conditions. Since the inception of the plan
through July 2 and August 10, 1994, the Company has purchased
2,179,400 shares at an average cost of $37 per share, also on a
post-split basis. Of the total, 1,040,600 shares at an average
cost of $40 per share have been purchased in fiscal 1994.
PART II
OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders
The 1994 annual meeting of shareholders of the Registrant
occurred on May 4, 1994. The following matters were voted upon
at the meeting: the election as a director of the Registrant of
each of Clifford J. Grum, Bob Marbut, David R. Parker and James
M. Ringler; the ratification of the appointment of Price
Waterhouse as independent auditors of the Registrant; the
approval of the Premark International Inc. 1994 Incentive Plan;
and the approval of the Material Terms of Performance-Based
Incentives. The results of the voting were as follows:
Votes
Votes Against/ Broker
Matter Voted For Withheld* Abstained Non-Votes
Election of
Clifford J. Grum 27,741,515 140,362 N/A 0
Election of
Bob Marbut 27,746,464 135,413 N/A 0
Election of
David R. Parker 27,744,885 136,992 N/A 0
Election of
James M. Ringler 27,737,670 144,207 N/A 0
Approval of
Price Waterhouse 27,777,088 48,583 56,206 0
Approval of
1994 Incentive
Plan 20,847,426 4,368,544 232,620 2,433,287
Approval of
Material Terms of
Performance-Based
Incentives 26,351,640 1,294,401 217,845 17,991
*Numbers shown for Director elections are votes withheld. For
other matters voted upon, numbers shown are votes against.
In addition to the directors elected at the meeting, the
directors of the Registrant whose terms of office continued
after the meeting are: Warren L. Batts, William O. Bourke, Ruth
M. Davis, Lloyd C. Elam, Joseph E. Luecke, John B. McKinnon,
Robert M. Price and Janice D. Stoney.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits (numbered in accordance with Item 601 of
Regulation S-K)
(10) $250,000,000 Credit Agreement dated as of
June 15, 1994, is filed as an exhibit to this
Report.
(11) A statement of computation of per share earnings
is filed as an exhibit to this Report.
(b) Reports on Form 8-K
During the quarter, the Registrant filed the following
current report on Form 8-K:
Dated May 4, 1994, regarding the board of directors'
declaration of a two-for-one stock split.
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.
PREMARK INTERNATIONAL, INC.
By: John M. Costigan
------------------------
Senior Vice President,
General Counsel and Secretary
By: Lawrence B. Skatoff
------------------------
Senior Vice President and
Chief Financial Officer
Deerfield, Illinois
August 11, 1994
EXHIBIT INDEX
Exhibit No. Description
(10) $250,000,000 Credit Agreement
dated as of June 15, 1994, is
filed as an exhibit to this
Report.
(11) A statement of the computation
of per share earnings is filed
as an exhibit to this Report.