FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 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 No. 1-6244
AMERICAN MAIZE-PRODUCTS COMPANY
______________________________________________________________________
(Exact name of registrant as specified in its charter)
Maine 13-0432720
______________________________________________________________________
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification #)
250 Harbor Drive, Stamford, CT 06902
______________________________________________________________________
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (203) 356-9000
_____________________
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
__________ __________
Number of shares outstanding of each of issuer's classes of common stock
at March 31, 1994.
Class A Class B
__________ __________
Outstanding 8,493,003 1,742,057
INDEX
Page #
Part I
Financial Statements:
Condensed Consolidated Balance Sheets
at March 31, 1994 and December 31, 1993 1
Condensed Consolidated Statements of Operations and Retained
Earnings for the three months ended March 31, 1994 and 1993 2
Condensed Consolidated Statements of Cash Flows
for the three months ended March 31, 1994 and 1993 3
Notes to Condensed Consolidated Financial Statements 4
Management's Discussion and Analysis of Financial
Condition and Results of Operations 5
Part II
Item 1. Legal Proceedings 6
Item 6. Exhibits and Reports on Form 8-K 6
Signatures 7
AMERICAN MAIZE-PRODUCTS COMPANY AND ITS SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
March 31, December 31,
1994 1993
Current assets:
Cash and cash equivalents $ 6,185,000 $ 3,625,000
Accounts receivable, trade, less allowance
for doubtful accounts of $3,827,000 at
March 31, 1994 and $3,609,000 at December 31, 1993 60,079,000 53,529,000
Inventories
Finished goods 23,889,000 25,074,000
Work-in-process 4,908,000 4,344,000
Raw materials 46,016,000 40,302,000
Stores and supplies 18,637,000 17,833,000
93,450,000 87,553,000
Other current assets 10,444,000 8,934,000
Total current assets 170,158,000 153,641,000
Property, plant and equipment, at cost 471,181,000 468,017,000
Less, Accumulated depreciation 184,420,000 180,593,000
286,761,000 287,424,000
Excess of cost over net assets of
acquired companies, less accumulated
amortization of $3,655,000 at March 31, 1994
and $3,504,000 at December 31, 1993 23,133,000 23,284,000
Prepaid pension costs 14,732,000 14,732,000
Other assets 12,755,000 12,977,000
$507,539,000 $492,058,000
Current liabilities:
Short-term debt $ 2,000,000 $ 5,000,000
Long-term debt, current installments 900,000 885,000
Accounts payable, trade 13,169,000 16,278,000
Accrued expenses 24,158,000 24,395,000
Accrued income taxes 5,318,000 4,837,000
Total current liabilities 45,545,000 51,395,000
Long-term debt, less current installments 160,113,000 139,294,000
Deferred income taxes 30,900,000 30,775,000
Accrued postretirement and postemployment benefits 51,112,000 50,027,000
Other liabilities 4,985,000 4,901,000
292,655,000 276,392,000
Stockholders' equity:
Capital stock:
Common, Class A, $.80 par value; authorized
15,000,000 shares at March 31, 1994 and
at December 31, 1993; issued 8,855,603 shares
at March 31, 1994 and 8,848,903 shares at
December 31, 1993 7,084,000 7,079,000
Common, Class B, $.80 par value; authorized
2,500,000 shares; issued 1,809,282 shares
at March 31, 1994 and December 31, 1993 1,447,000 1,447,000
Capital in excess of par value of common stock 123,962,000 123,836,000
Retained earnings 89,268,000 90,221,000
221,761,000 222,583,000
Less, Common Stock in treasury, at cost;
Class A, 362,600 shares at March 31, 1994 and 366,990
at December 31, 1993; Class B, 67,225 shares at
March 31, 1994 and at December 31, 1993 6,877,000 6,917,000
Total stockholders' equity 214,884,000 215,666,000
$507,539,000 $492,058,000
See accompanying notes to condensed consolidated financial statements.
AMERICAN MAIZE-PRODUCTS COMPANY AND ITS SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND RETAINED EARNINGS
FOR THE THREE MONTHS ENDED MARCH 31, 1994 AND 1993
(Unaudited)
Three Months Ended
March 31,
1994 1993
Net sales $137,839,000 $115,006,000
Cost of sales 104,601,000 92,168,000
Gross profit 33,238,000 22,838,000
Selling, administrative and general expenses 23,480,000 22,970,000
Restructuring charges 5,400,000 4,000,000
Operating profit (loss) 4,358,000 (4,132,000)
Other income (expenses):
Interest expense (2,931,000) (3,931,000)
Interest income 69,000 566,000
Other, net (314,000) (1,152,000)
(3,176,000) (4,517,000)
Income (loss) before income taxes, minority
interest, extraordinary loss and
cumulative effect of accounting changes 1,182,000 (8,649,000)
Income taxes:
Current (341,000) 1,981,000
Deferred (158,000) 1,373,000
(499,000) 3,354,000
Income (loss) before minority interest,
extraordinary loss and cumulative effect of
accounting changes 683,000 (5,295,000)
Minority interest in loss of subsidiary - 329,000
Income (loss) before extraordinary loss and
cumulative effect of accounting changes 683,000 (4,966,000)
Extraordinary loss from early extinguishment of debt - (2,862,000)
Income (loss) before cumulative effect of
accounting changes 683,000 (7,828,000)
Cumulative effect of accounting changes - (27,200,000)
Net income (loss) 683,000 (35,028,000)
Retained earnings at beginning of period 90,221,000 127,324,000
Less: cash dividends paid 1,636,000 1,034,000
Retained earnings at end of period $ 89,268,000 $ 91,262,000
Earnings per share of common stock:
Income (loss) before extraordinary loss and
cumulative effect of accounting changes $ .07 $ (.63)
Extraordinary loss from early extinguishment of debt - (.36)
Cumulative effect of accounting changes - (3.45)
Net income (loss) $ .07 $(4.44)
Dividends per share of common stock $ .16 $ .16
Weighted average number of common shares
outstanding 10,226,758 7,872,797
See accompanying notes to condensed consolidated financial statements.
AMERICAN MAIZE-PRODUCTS COMPANY AND ITS SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 1994
(Unaudited)
Three Months Ended
March 31,
1994 1993
Cash flows from operating activities:
Net income (loss) $ 683,000 $(35,028,000)
Adjustments to reconcile net income (loss)
to net cash provided by operating activities:
Depreciation and amortization 8,117,000 7,483,000
Amortization of original issue discount on
subordinated debentures - 124,000
Deferred income taxes 158,000 (1,373,000)
Extraordinary loss from early extinguishment of debt - 2,862,000
Cumulative effect of accounting changes - 27,200,000
Restructuring charges 5,400,000 4,000,000
Minority interest in (loss) of subsidiary, net of dividends - (941,000)
Changes in assets and liabilities:
Accounts receivable, trade (6,550,000) (1,410,000)
Inventories (5,897,000) (6,627,000)
Other current assets (1,510,000) (708,000)
Accounts payable and accrued expenses (5,670,000) 3,224,000
Other, net 2,099,000 (2,269,000)
Net cash used in operating activities (3,170,000) (3,463,000)
Cash flows from investing activities:
Additions to property, plant and equipment (10,468,000) (10,810,000)
Purchase of minority interest in subsidiary - (32,992,000)
Net cash used in investing activities (10,468,000) (43,802,000)
Cash flows from financing activities:
Cash dividends (1,636,000) (1,034,000)
Issuance of short-term debt 2,000,000 -
Payments of short-term debt (5,000,000) (9,200,000)
Borrowings on long-term debt 21,050,000 125,000,000
Payments of long-term debt (216,000) (73,038,000)
Net cash provided by financing activities 16,198,000 41,728,000
Net increase (decrease) in cash and cash equivalents 2,560,000 (5,537,000)
Cash and cash equivalents, beginning of year 3,625,000 72,085,000
Cash and cash equivalents, end of period $ 6,185,000 $ 66,548,000
Supplemental Cash Flow Information
Cash paid during the period for:
Interest (net of amount capitalized) $ 4,460,000 $ 2,254,000
Income taxes (net of refunds) $ 43,000 $ 569,000
See accompanying notes to condensed consolidated financial statements.
Notes to Condensed Consolidated Financial Statements
Unaudited
(A) Basis of Presentation
The accompanying condensed consolidated financial statements of
American Maize-Products Company and its Subsidiaries ("Company") for
the three month periods ended March 31, 1994 and 1993 are unaudited.
However, in the opinion of the Company, all adjustments (of a normal
recurring nature) considered necessary for a fair presentation have
been reflected therein.
Certain financial information which is normally included in financial
statements prepared in accordance with generally accepted accounting
principles, but which is not required for interim reporting purposes,
has been omitted. The accompanying condensed consolidated financial
statements should be read in conjunction with the financial statements
and notes thereto included in the Company's Annual Report to Shareholders
for the fiscal year ended December 31, 1993.
(B) Supplementary Information
Interest costs incurred during the three months ended March 31, 1994
and 1993 were $3,014,000 and $4,153,000 respectively. Interest
capitalized during these periods was $83,000 and $222,000, respectively.
For cash flow reporting purposes all highly liquid short-term
investments (as denoted on the balance sheet), with maturities of
three months or less, are considered cash equivalents.
Deposits made for hedging transactions to cover open positions on corn
purchases are included in inventory for cash flow reporting purposes.
(C) Short-term Debt
Short-term debt comprises borrowings on lines of credit from banks.
(D) Legal Proceedings
The current status of litigation is described in Part II, herein.
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Financial Condition (March 31, 1994
compared to December 31, 1993)
The Company currently has available $125,000,000 under a bank revolving
credit agreement which expires on December 31, 1998 and open lines of
credit with banks of $5,000,000. At March 31, 1994, borrowings under
these facilities were $33,650,000 and $2,000,000 respectively.
Significant uses of cash during the period included capital expenditures
of $10,468,000 and increased receivable and inventory levels of $6,550,000
and $5,897,000 respectively. The Company anticipates approximately
$80,000,000 of additional capital spending for the remainder of the year
which will be financed through internal cash flow and available credit
facilities, as needed.
Results of Operations (Three Months
ended March 31, 1994 compared with the
Three Months ended March 31, 1993)
Net sales increased 19.9% in 1994 to $137,839,000 compared to $115,006,000
in 1993. The higher sales reflect an increase in unit sales volumes and
pricing of high fructose corn syrup and specialty food starches and higher
net sales in the tobacco business.
Operating profits were $4,358,000 in 1994 compared to a loss of $4,132,000
in 1993. Operating profits in the Company's corn processing business were
significantly higher than last year due primarily to higher sweetener
prices. Operating results in the tobacco business include restructuring
charges of $5,400,000 in 1994 and $4,000,000 in 1993. The charge in 1994
represents the costs associated with the consolidation of the Company's
tobacco businesses. Helme Tobacco Company, a manufacturer and marketer of
chewing tobacco, moist and dry snuff, will be merged into Swisher
International, Inc., a manufacturer and marketer of cigars. Consolidation
of the sales force, marketing and management will be completed in the second
quarter of 1994. In addition, Swisher will consolidate all of its cigar
manufacturing into its Jacksonville, Florida facilities which will result
in the closing of its Waycross, Georgia plant. This consolidation will be
completed in early 1995.
Interest expense decreased to $2,931,000 in 1994 compared to $3,931,000 in
1993. The primary reasons for the decrease were lower average interest
rates and debt levels.
Net income in 1994 was $683,000, or $.07 per share, compared to a net loss
of $35,028,000, or $4.44 per share, in 1993. Results for 1993 include an
after tax charge of $27,200,000, or $3.45 per share, to reflect the
cumulative effect of the adoption of Financial Accounting Standards No.
106, "Employers' Accounting for Postretirement Benefits Other than
Pensions" and No. 112, "Employers' Accounting for Postemployment
Benefits." Also included in the 1993 results was an extraordinary loss of
$2,862,000, or $.36 per share, relating to the early retirement of the
Company's 12% senior subordinated debentures.
PART II
Item 1. Legal Proceedings
No reportable events have occurred which would require modification
of the discussion under Legal Proceedings set forth in the Company's Form
10-K Annual Report for the fiscal year ended December 31, 1993.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits (exhibit reference numbers refer to Item 601 of
Regulation S-K)
10 (a) Credit Agreement, dated as of March 31, 1994, by and
among the Company, the Signatory Lenders thereto and The Bank of
New York, as agent.
11 (a) Calculation of Primary Earnings Per Share
11 (b) Calculation of Fully-Diluted Earnings Per Share
(b) No reports on Form 8-K were filed during the quarter for
which this report is filed.
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.
AMERICAN MAIZE-PRODUCTS COMPANY
DATE: May 12, 1994 /s/ Patric J. McLaughlin
----------------------------
Patric J. McLaughlin
President and
Chief Executive Officer
DATE: May 12, 1994 /s/ Edward P. Norris
----------------------------
Edward P. Norris
Vice President and
Chief Financial Officer