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 26 weeks ended June 29, 1996
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: (847)
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 7, 1996, 62,331,539 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
June 29, 1996 and July 1, 1995................... 2
Condensed Consolidated Statement of Income
(Unaudited) for the 26 week periods ended
June 29, 1996 and July 1, 1995................... 3
Condensed Consolidated Balance Sheet
(Unaudited) as of June 29, 1996 and
December 30, 1995................................ 4
Condensed Consolidated Statement of Cash Flows
(Unaudited) for the 26 week periods ended
June 29, 1996 and July 1, 1995................... 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 30, 1995.
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 Ended
--------------------
June 29, July 1,
1996 1995
(In millions, except per share data) --------- ---------
Net sales................................. $ 565.7 $ 539.0
--------- ---------
Costs and expenses:
Cost of products sold................... 363.9 342.5
Delivery, sales, and
administrative expense................ 163.8 161.6
Interest expense........................ 4.6 7.3
Interest income......................... (1.2) (0.5)
Loss on disposition of business......... 43.1 -
Other income, net....................... (0.3) (0.3)
--------- ---------
Total costs and expenses............. 573.9 510.6
--------- ---------
Income (loss) before income taxes......... (8.2) 28.4
Provision for income taxes................ 9.1 11.3
--------- ---------
Income (loss) from continuing operations.. (17.3) 17.1
Income from discontinued operations....... 29.4 50.0
--------- ---------
Net income................................ 12.1 67.1
Retained earnings, beginning of period.... 751.7 611.4
Cash dividends declared................... (18.6) (16.5)
Cost of treasury stock issued in excess
of option exercise prices............... (7.0) (5.3)
Distribution of Tupperware Corporation
to shareholders......................... (86.1) -
--------- ---------
Retained earnings, end of period.......... $ 652.1 $ 656.7
========= =========
Income (loss) per common and common
equivalent share:
Continuing operations................. $ (0.27) $ 0.27
Discontinued operations............... 0.46 0.79
--------- ---------
Net income per common and
common equivalent share................. $ 0.19 $ 1.06
========= =========
Average number of common and
common equivalent shares outstanding.... 63.8 63.3
========= =========
Dividends declared per common share....... $ 0.30 $ 0.27
========= =========
See accompanying Notes to Condensed Consolidated Financial
Statements (Unaudited).
- 2 -
PREMARK INTERNATIONAL, INC.
CONDENSED CONSOLIDATED STATEMENT OF INCOME
(Unaudited)
26 Weeks Ended
--------------------
June 29, July 1,
1996 1995
(In millions, except per share data) --------- ---------
Net sales................................. $1,094.4 $1,058.6
--------- ---------
Costs and expenses:
Cost of products sold................... 704.6 675.6
Delivery, sales, and
administrative expense................ 327.4 319.7
Interest expense........................ 10.3 12.9
Interest income......................... (1.4) (0.9)
Loss on disposition of business......... 43.1 -
Other income, net....................... (0.4) (0.3)
--------- ---------
Total costs and expenses............. 1,083.6 1,007.0
--------- ---------
Income before income taxes................ 10.8 51.6
Provision for income taxes................ 16.3 20.3
--------- ---------
Income (loss) from continuing operations.. (5.5) 31.3
Income from discontinued operations....... 62.2 82.3
--------- ---------
Net income................................ 56.7 113.6
Retained earnings, beginning of period.... 735.7 579.8
Cash dividends declared................... (35.2) (28.7)
Cost of treasury stock issued
in excess of option exercise prices..... (19.0) (8.0)
Distribution of Tupperware Corporation
to shareholders......................... (86.1) -
--------- ---------
Retained earnings, end of period.......... $ 652.1 $ 656.7
========= =========
Income (loss) per common and
common equivalent share:
Continuing operations $ (0.09) $ 0.49
Discontinued operations 0.98 1.28
--------- ---------
Net income per common
and common equivalent share............. $ 0.89 $ 1.77
========= ========
Average number of common and
common equivalent shares outstanding.... 63.5 64.3
========= ========
Dividends declared per common share....... $ 0.57 $ 0.47
========= ========
See accompanying Notes to Condensed Consolidated Financial
Statements (Unaudited).
- 3 -
PREMARK INTERNATIONAL, INC.
CONDENSED CONSOLIDATED BALANCE SHEET
ASSETS
(Unaudited)
June 29, December 30,
1996 1995
(In millions) --------- ---------
Cash and cash equivalents............ $ 147.3 $ 19.8
Accounts and notes receivable........ 379.6 397.5
Less allowances for
doubtful accounts................ (20.2) (19.7)
--------- ---------
359.4 377.8
Inventories.......................... 346.1 347.6
Recoverable income taxes............. 14.3 12.3
Deferred income tax benefits......... 77.1 77.2
Prepaid expenses..................... 47.0 45.0
--------- ---------
Total current assets............... 991.2 879.7
--------- ---------
Property, plant, and equipment....... 920.4 939.0
Less accumulated depreciation...... (509.6) (514.3)
--------- ---------
410.8 424.7
Intangibles, net of accumulated
amortization....................... 105.3 168.7
Other assets......................... 67.5 73.0
Net assets of discontinued
operations......................... - 415.2
--------- ---------
Total assets......................... $1,574.8 $1,961.3
========= =========
See accompanying Notes to Condensed Consolidated Financial
Statements (Unaudited).
- 4 -
PREMARK INTERNATIONAL, INC.
CONDENSED CONSOLIDATED BALANCE SHEET
LIABILITIES AND SHAREHOLDERS' EQUITY
(Unaudited)
June 29, December 30,
1996 1995
(In millions) --------- --------
Accounts payable..................... $ 98.9 $ 104.4
Short-term borrowings and current
portion of long-term debt.......... 12.4 133.0
Accrued liabilities.................. 343.1 365.7
--------- ---------
Total current liabilities.......... 454.4 603.1
--------- ---------
Long-term debt....................... 116.5 121.7
Accrued postretirement
benefit cost....................... 120.4 120.1
Other liabilities.................... 77.0 107.6
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...... 69.0 69.0
Capital surplus.................... 331.9 590.3
Retained earnings.................. 652.1 735.7
Treasury stock, 6,775,113 shares
at June 29, 1996, and 7,857,080
shares at December 30, 1995,
at cost.......................... (227.6) (258.0)
Unearned portion of restricted
stock issued for future service.. (3.0) (1.0)
Cumulative foreign currency
adjustments...................... (15.9) (127.2)
--------- ---------
Total shareholders' equity......... 806.5 1,008.8
--------- ---------
Total liabilities and
shareholders' equity............. $1,574.8 $1,961.3
========= =========
See accompanying Notes to Condensed Consolidated Financial
Statements (Unaudited).
- 5 -
PREMARK INTERNATIONAL, INC.
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited)
26 Weeks Ended
--------------------
June 29, July 1,
1996 1995
(In millions) --------- ---------
Cash flows from operating activities:
Net income............................... $ 56.7 $ 113.6
Adjustments to reconcile net
income to net cash provided
by operating activities from
continuing operations:
Income from discontinued
operations.......................... (62.2) (82.3)
Loss on disposition of business....... 38.6 -
Depreciation and amortization......... 34.8 35.6
Changes in assets and liabilities:
Decrease in accounts
and notes receivable................ 19.0 33.1
Increase in inventory................. (13.2) (56.7)
Decrease in accounts payable
and accrued liabilities............. (19.5) (42.6)
Increase (decrease) in
income taxes payable................ 3.7 (8.8)
Increase in deferred income taxes..... (2.5) (2.4)
Increase in prepaid expenses.......... (2.5) (6.8)
Other..................................... (15.5) (20.6)
-------- --------
Net cash provided by (used in)
operating activities from
continuing operations............... 37.4 (37.9)
-------- --------
Cash flows from investing activities:
Capital expenditures...................... (43.8) (37.5)
Proceeds from disposition
of business............................. 35.8 -
Other..................................... 2.5 (5.5)
-------- --------
Net cash used in investing activities
from continuing operations.......... ( 5.5) (43.0)
-------- --------
Cash flows from financing activities:
Net (decrease) increase in
short-term debt......................... (119.5) 181.2
Proceeds from long-term debt.............. 5.0 -
Repayment of long-term debt............... (0.2) (0.2)
Dividend paid by Tupperware............... 284.9 -
Proceeds from exercise of stock options... 14.7 6.6
Purchase of treasury stock................ (7.3) (147.3)
Payment of dividends...................... (33.2) (25.0)
-------- --------
Net cash provided by
financing activities from
continuing operations............... 144.4 15.3
-------- --------
Effect of exchange rate changes on
cash and cash equivalents................. (0.6) 1.2
Net cash (used in) provided by
discontinued operations................... (48.2) 60.4
-------- --------
Net increase (decrease) in cash
and cash equivalents...................... $ 127.5 $ (4.0)
======== ========
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. Certain prior year amounts have
been reclassified to conform with the current year's presentation.
Note 2: Inventories
Inventories, by component, are summarized as follows (in
millions):
June 29, December 30,
1996 1995
-------- --------
Finished goods.................... $ 170.0 $ 169.8
Work in process................... 35.0 37.9
Raw materials and supplies........ 141.1 139.9
-------- --------
Total inventories............. $ 346.1 $ 347.6
======== ========
Note 3: Pro Rata Distribution of Tupperware Stock
On November 1, 1995, the company's board of directors authorized
management to establish its Tupperware business as an independent
company through a stock distribution to Premark shareholders. The
distribution was effected on May 31, 1996.
Under the Distribution Agreement, on May 24, 1996, Dart Industries
Inc. paid a $284.9 million special dividend to Premark. If the
distribution had occurred at the beginning of 1995, it is assumed
that the company would not have incurred any short-term borrowings
during 1995 or the first half of 1996. Consequently, on a pro
forma basis, interest expense would have been $3.0 million and $4.2
million for the second quarter of 1996 and 1995, respectively, and
$6.4 million and $8.7 million for the first half of 1996 and 1995,
respectively.
Note 4: Sale of Hartco
On June 28, 1996, the company completed the sale of the stock of
its Hartco subsidiary to Triangle Pacific Corporation for $35.8
million in cash plus the assumption of certain Hartco liabilities.
A pretax loss of $43.1 million ($38.6 million after tax) is
reflected in the reported results of the Decorative Products Group.
- 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 26 weeks ended June 29, 1996, compared with the 13
weeks and 26 weeks ended July 1, 1995, and changes in financial
condition during the 26 weeks ended June 29, 1996.
Overall
In late 1995, the company's board of directors authorized
management to proceed with a plan to establish Tupperware as an
independent company through a stock distribution to Premark's
shareholders. The distribution was effected on May 31, 1996.
Tupperware has been reported as a discontinued operation in these
financial statements.
Net Income
Net income for the quarter decreased to $12.1 million, or $0.19 per
share, in 1996 from $67.1 million, or $1.06 per share, in 1995.
For the first half of 1996, net income declined to $56.7 million or
$0.89 per share, in 1996, from $113.6 million, or $1.77 per share,
in 1995.
Continuing Operations
Net Sales and Income from Operations
Net sales from continuing operations for the second quarter of 1996
were $565.7 million, an increase of 5 percent compared with net
sales of $539.0 million in 1995. In the first half of 1996, net
sales rose to $1,094 million, which was an improvement of 3 percent
from 1995's net sales of $1,059 million. Improvements in the
second quarter were seen at all operating units except the Food
Equipment Group, where sales fell slightly due to lower European
volume as well as the negative effect of a stronger U.S. dollar.
For the first half of 1996, improvements at Wilsonart, Precor,
Hartco and Florida Tile were somewhat offset by a decline at West
Bend, due to a poor retail environment in its Housewares division,
and at the Food Equipment Group, due to weak economies in Europe
and the negative effect of a strong U.S. dollar.
Second quarter income from continuing operations decreased
significantly from income of $17.1 million, or $0.27 per share, in
1995 to a loss of $17.3 million or ($0.27) per share, in 1996. The
decrease reflects the loss on the sale of the company's Hartco
subsidiary. Absent that loss, income from continuing operations
would have been $21.3 million or $0.33 per share. A significant
improvement in profitability at Wilsonart, Precor and Hartco,
coupled with lower net interest expense and lower corporate
overhead, more than offset a decline at West Bend, reflecting lower
production volume, as well as a $3.3 million provision for plant
closures in the U.S. sector of the Food Equipment Group. For the
first half of 1996, a net loss of $5.5 million or ($0.09) per share
was significantly below last year's income from continuing
operations of $31.3 million or $0.49 per share, due to the loss on
the sale of Hartco. Excluding that loss, income from operations
would have been $33.1 million or $0.52 per share. The higher
income from continuing operations is being driven by improvement in
profitability at Wilsonart, Precor and West Bend, along with lower
corporate and net interest expenses, which offset lower results at
the Food Equipment Group and Florida Tile. Prior year's results
for West Bend included an $8 million pretax provision for a product
recall. Absent that provision, West Bend would have reported a
substantial shortfall from 1995.
Costs and Expenses
Cost of products sold as a percentage of net sales was 64.3 percent
for the second quarter of 1996 compared with 63.5 percent for the
second quarter of 1995. For the first half, the rates in 1996 and
1995 were 64.4 percent and 63.8 percent, respectively. Delivery,
sales and administrative expense as a percentage of sales at 29.0
percent and 29.9 percent for the second quarter and first half of
1996, respectively, were comparable with the 1995 ratios of 30.0
percent and 30.2 percent, respectively.
Tax Rate
For the quarter, the company had a tax provision on a pretax loss
versus an effective tax rate of 39.7% for the same period in 1995
and 34.4% for the year ended December 30, 1995. For the first half
of 1996, the effective tax rate was 150.5% versus 39.3% for the
first half of 1995. The significant increase in both the second
quarter and first half of 1996 reflects the company's potential
inability to realize in the first half the full tax benefit
associated with the loss on the sale of Hartco.
Net Interest Expense
Interest expense, net of interest income, was $3.4 million in the
second quarter of 1996 versus $6.8 million in the second quarter of
1995. For the first half of 1996, net interest expense was $8.9
million versus $12.0 million in 1995. Net interest expense
reflects interest accrued and earned on all of Premark's borrowings
and invested cash, excluding amounts that were owed or held by
Tupperware, respectively. The lower net interest expense in 1996
was due to the special dividend paid to Premark by Dart on May 24,
1996, as described in Note 3 to the condensed consolidated
financial statements, which was used to substantially reduce
Premark's outstanding debt. In addition, less debt was required to
finance working capital needs.
Segment Results
Food Equipment Group
Net sales for the second quarter of 1996 were $308.2 million, a
decrease of 1% from $312.6 million in 1995. For the first half,
net sales also declined 1% from $604.1 million in 1995 to $601.3
million in 1996. For both periods, growth in the U.S. and other
international operations was more than offset by declines in most
European countries. International operations accounted for 41% of
segment sales in both the second quarter and first half of 1996.
For the second quarter, segment profit of $18.4 million was 14%
lower than 1995's $21.4 million. For the first half, segment
profit fell to $31.1 million from $41.1 million in 1995. For both
periods, declines in the U.S. and Europe more than offset
improvements in other international operations. International
operations accounted for 20% and 11% of segment profit for the
second quarter and first half, respectively.
U.S. sales rose nearly 3% for the second quarter as a result of
strong demand for service as well as cooking equipment sales,
improvement in the food retail market and nominal price increases.
Segment profit fell, however, by 17% from the second quarter of
1995, due to a $3.3 million provision to close two operating
plants. For the first half, sales increased 2% reflecting higher
service revenues and growth in the food service equipment business.
Segment profit, however, declined 16% as a result of the provision
for plant closings, unfavorable product mix and lower production
volume.
European sales were down almost 11% and 7% for the second quarter
and first half, respectively, as a result of difficult economies in
most markets as well as the unfavorable impact of foreign exchange.
Excluding foreign exchange impacts, European sales dropped 5% and
3%, respectively, from the second quarter and first half of 1995.
For the second quarter, profits declined 23% due to the lower
volume, offset partially by reduction in force savings. For the
first half, a small loss was incurred versus a profit last year,
reflecting lower sales and production volumes as well as a $1.9
million provision for a reduction in force in the first quarter of
1996.
Sales of the other international operations grew by 15% in both the
second quarter and first half of 1996. For both periods, the
addition of Brazil plus improvements in Mexico and Japan more than
offset a slight decline in Canada. Segment profit for both periods
grew substantially over last year driven by higher pricing in
Canada, sales related gains in Mexico and Japan, and, for the first
six months, lower foreign exchange losses in Mexico.
Decorative Products
Net sales were $204.4 million for the second quarter of 1996, an
increase of 15% compared with $178.0 million in the same period in
1995. For the first half, sales grew 9% from $348.3 million to
$380.6 million in 1996. A segment loss of $22.3 million was
incurred in the second quarter of 1996 versus a profit of $16.8
million in the same period last year. For the first half, a loss
of $10.0 million was reported, versus a profit in the same period
last year of $32.6 million. The segment loss for both periods was
a result of the pretax loss on the sale of the company's Hartco
subsidiary of $43.1 million. Excluding the loss, segment profit
would have been $20.8 million and $33.2 million for the second
quarter and six months, respectively.
Wilsonart's sales in 1996 increased 16% and 10%, respectively, for
the second quarter and first half versus 1995, reflecting higher
volume, improved pricing and the introduction of a new laminate
flooring product. Segment profit for both periods rose
significantly, resulting from higher volume and pricing, despite
marketing expenses associated with new product introductions.
Florida Tile had a 10 percent increase in sales for the second
quarter and a 3 percent increase year-to-date. Higher volume and
private label sales more than offset competitive pricing pressures.
The unit reported a small segment profit for the quarter and a
break even position year-to-date, versus profits in both periods
last year. Lower pricing, higher manufacturing costs and expenses
to open additional branch locations contributed to the decrease in
both periods.
Hartco sales for both periods grew significantly, driven by higher
volume in the do-it-yourself channel. A large segment loss was
reported for both the quarter and first half due to the loss on the
sale of the company. Segment profit, excluding the loss on the
sale, improved significantly, reflecting the growth in sales.
Consumer Products
Net sales were $53.1 million for the second quarter of 1996, an
increase of 10% compared with $48.4 million in 1995. For the first
half, sales rose 6% from $106.2 million to $112.5 million in 1996.
Segment profit for the second quarter, however, fell nearly 5% from
$3.8 million to $3.6 million. For the first half, segment profit
rose significantly to $7.7 million from $1.8 million last year.
For the quarter, West Bend sales grew 4 percent from 1995, while
first six months' sales fell 4 percent. Housewares sales fell
sharply for both periods due to a soft retail environment and
competitive pricing of bread makers. Direct-to-the-home cookware
sales increased significantly in both periods. For the second
quarter West Bend's segment profit declined substantially,
reflecting lower Housewares sales and production volume. For the
first half, segment profit rose significantly due to the absence of
the $8 million recall provision made in 1995. Excluding that
charge, profits fell substantially compared with last year, on
lower Housewares sales and production volume.
Precor sales grew 33 percent and 42 percent for the quarter and
first half, respectively, on the strength of a pickup in both the
retail and commercial markets as well as the introduction of new
products. The unit's segment profit improved significantly in both
periods as a result of the higher volume.
Financial Condition of Premark
Under the Distribution Agreement among Premark, Tupperware and
Dart, on May 24, 1996, Dart paid $284.9 million to Premark. On
June 28, 1996, the company completed the sale of its Hartco
subsidiary to Triangle Pacific for $35.8 million.
Net cash provided by operating activities in the first half of 1996
was $25.3 million compared with a use of cash of $37.9 million in
the first half of 1995. The higher cash generation in 1996 was
primarily due to lower working capital needs than in 1995.
Net cash used in investing activities was $5.5 million and $43.0
million in 1996 and 1995, respectively. The improvement year to
year reflects the cash received on the sale of the company's Hartco
subsidiary. The cash provided by financing activities was $144.4
million in the first half of 1996 versus $15.3 million in the first
half of 1995. In 1995, short-term debt was increased, reflecting
the funding for the stock repurchase program along with financing a
higher level of working capital. In 1996, a significant part of
the company's short-term debt was repaid using the cash received
from the special dividend from Tupperware.
The total debt-to-capital ratio at the end of the second quarter of
1996 was 13.8%, compared with 31.2% at the end of the second
quarter of 1995, and 25.1% as of December 30, 1995. The lower
ratio as of June 29, 1996, compared with both last year's second
quarter and the end of 1995, reflects a paydown of borrowings with
cash generated from the special Tupperware dividend plus the effect
from the reduction of equity due to the spin-off of Tupperware.
Working capital as of June 29, 1996 increased by $260.2 million
from December 30, 1995. The largest changes among the components
of working capital were an increase in cash and cash equivalents
and a decrease in short-term borrowings, both reflecting the
receipt of the special Tupperware dividend and cash from the sale
of the company's Hartco subsidiary.
In May, 1996 the company entered into a new $250 million revolving
credit agreement with a group of banks. The agreement expires in
May, 2001 and replaces the company's existing facility for the same
amount which was to expire in May, 1999. As of June 29, 1996,
unused lines of credit were approximately $557.5 million, including
$250 million under the revolver. Future cash flows, lines of
credit, and other short-term financing are expected to be adequate
to fund operating and investing activities.
On August 7, 1996 the company announced it would repurchase 6
million of its shares, with volume and timing to depend on market
conditions. Purchases will be made in the open market or through
other transactions and will be financed through available cash,
cash flow from operations or issuance of additional debt. Through
August 8, 1996, no shares had been purchased under this program.
Share repurchases under the company's previous stock repurchase
plan announced in August, 1995 were terminated prior to June 29,
1996. Under that plan, the company had repurchased 588,000 shares
at an average cost of $51 per share, including repurchases in 1996
of 92,000 shares at an average cost of $50 per share.
PART II
OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders
The 1996 annual meeting of shareholders of the Registrant
occurred on May 1, 1996. The following matters were voted upon
at the meeting: the election as a director of the Registrant of
each of William O. Bourke, E. V. Goings, Joseph E. Luecke, Robert
M. Price, and Janice D. Stoney; the ratification of the appointment
of Price Waterhouse LLP as independent auditors of the Registrant;
the approval of the Tupperware Corporation 1996 Incentive Plan
("Plan"); and the approval of material terms of performance-based
incentives of Tupperware Corporation ("Incentives"). The Plan and
the Incentives were established in connection with the organization
of Tupperware Corporation as a wholly-owned subsidiary of the
Registrant and the separation of the Tupperware business and its
distribution to the Registrant's shareholders. The Plan makes
shares of common stock of Tupperware Corporation available for
stock-based awards for employees of Tupperware Corporation. The
Incentives establish performance-based incentives for Tupperware's
senior officers, in order to satisfy the requirements of the
Internal Revenue Code with respect to the deductibility of
compensation in excess of $1 million per year. The Plan and the
material terms of the Incentives were included in the Registrant's
proxy statement in connection with Registrant's 1996 annual meeting
of shareholders.
The results of the voting were as follows:
Votes
Votes Against/ Broker
Matter Voted For Withheld* Abstained Non-Votes
Election of
William O. Bourke 53,242,186 973,675 N/A 0
Election of
E. V. Goings 53,240,237 975,624 N/A 0
Election of
Joseph E. Luecke 53,243,249 972,612 N/A 0
Election of
Robert M. Price 53,246,809 969,052 N/A 0
Election of
Janice D. Stoney 53,237,591 978,270 N/A 0
Approval of
Price Waterhouse 53,978,216 93,135 144,510 0
Approval of Plan 45,544,237 3,796,460 575,322 4,299,842
Approval of
Material Terms
of Incentives 46,931,747 2,400,035 584,238 4,299,841
*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, Ruth M. Davis, Lloyd C.
Elam, John B. McKinnon, James M. Ringler, David R. Parker, Clifford
J. Grum and Bob Marbut. As set forth in Registrant's proxy
statement, upon the distribution of Tupperware's business to
Registrant's shareholders, Messrs. Goings, Price, Grum and Marbut
resigned as directors to become directors of Tupperware
Corporation.
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 May 17,
1996 and amended as of June 6, 1996, 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.
(27) A Financial Data Schedule for the second quarter
of 1996 is filed as an exhibit to this Report.
(b) During the quarter ended June 29, 1996, the Registrant
filed a Current Report on Form 8-K dated June 13, 1996
reporting the distribution to Registrant's shareholders
on May 31, 1996 of all the common stock of Tupperware
Corporation, and reporting the sale, as a consequence of
the distribution, by the trustees of the 401(k) plans of
Tupperware Corporation and the Registrant of stock of the
other and the use of the proceeds to purchase the common
stock of the company sponsoring the plan. Also during
the same quarter the Registrant filed a Current Report
on Form 8-K dated July 12, 1996, reporting the completion
of the sale of its flooring subsidiary, Hartco Flooring
Company.
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 9, 1996
EXHIBIT INDEX
Exhibit No. Description
(10) $250,000,000 Credit Agreement dated
as of May 17, 1996, amended as of
June 6, 1996, 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.
(27) A Financial Data Schedule for
the second quarter of 1996 is
filed as an exhibit to this
Report.