THE EARTHGRAINS COMPANY
AND
HEINER'S BAKERY, INC.
PRO FORMA CONDENSED COMBINED STATEMENT OF EARNINGS
THIRTY-SIX WEEK PERIOD ENDED SEPTEMBER 10, 1996
(Unaudited)
($ In millions)
The following pro forma condensed combined statement of earnings
combines The Earthgrains Company (Earthgrains or The Company) for
the thirty-six week period ended September 10, 1996 and Heiner's
Bakery, Inc. (Heiner's) for the thirty-six week period ended
September 7, 1996. This statement has been prepared under the
assumptions set forth in the accompanying notes. This statement
should be read in conjunction with the separate financial
statements and notes thereto of Earthgrains, included in the
Company's most recent filing on Form 10-Q, and Heiner's interim
financial statements included in this report. The pro forma
condensed combined statement of earnings is not necessarily
indicative of the future results of operations of the combined
companies or the results as they might have been had the
acquisition been effective on the first day of the period
presented.
Earthgrains Pro Forma
Pro Adjustments
Forma Pro Heiner's Note Pro Forma
Historical Adj.(f) Forma Historical Amount Ref. Combined
---------- ------- ----- ---------- ------ ---- --------
Net sales $1,120.0 $ -- $1,120.0 $ 27.9 $ $1,147.9
Cost of products sold 679.3 0.8 680.1 14.7 694.8
-------- -------- -------- -------- --------
Gross profit 440.7 (0.8) 439.9 13.2 453.1
Marketing, distribution and
administrative expenses 434.5 3.7 438.2 9.9 (0.2) (a) 447.9
Provision for restructuring
and consolidation, net 1.0 -- 1.0 -- -- 1.0
-------- -------- -------- -------- -------- --------
Operating Income 5.2 (4.5) 0.7 3.3 0.2 4.2
Other income and expenses:
Interest expense (2.9) (1.2) (4.1) -- (1.9) (b) (6.0)
Interest income 0.7 -- (0.7) (0.7) (a) --
Other income, net 0.7 -- 0.7 0.1 -- 0.8
-------- -------- -------- -------- -------- --------
Income (loss)
before income taxes 3.0 (5.7) (2.7) 4.1 (2.4) (1.0)
-------- -------- -------- -------- -------- --------
Provision (benefit) for 1.6 (g)
income taxes 2.9 (2.0) 0.9 -- (0.9) (c) 1.6
-------- -------- -------- -------- --------- --------
Net income (loss) $ 0.1 $ (3.7) $ (3.6) $ 4.1 (3.1) $ (2.6)
======== ======== ======== ======== ======== ========
Earnings (loss) per share $ 0.01 $ (0.36) $ (0.26)
(d) ======== ======== ========
Weighted average shares
outstanding (pro forma
for Earthgrains prior
to 3/27/96) (d) (e) 10.1 10.1 10.1
======== ======== ========
THE EARTHGRAINS COMPANY
AND
HEINER'S BAKERY, INC.
PRO FORMA CONDENSED COMBINED STATEMENT OF EARNINGS
FISCAL YEAR 1995
(Unaudited)
($ In millions)
The following pro forma condensed combined statement of earnings
combines The Earthgrains Company (Earthgrains or The Company) for
the fifty-two week period ended January 2, 1996 and Heiner's
Bakery, Inc. (Heiner's) for the fifty-two week period ended
December 30, 1995. This statement has been prepared under the
assumptions set forth in the accompanying notes. This statement
should be read in conjunction with the separate financial
statements and notes thereto of Earthgrains, included in the
Company's registration statement on Form 10, and Heiner's for the
fifty-two week period ended December 30, 1995 included in this
report. The pro forma condensed combined statement of earnings is
not necessarily indicative of the future results of operations of
the combined companies or the results as they might have been had
the acquisition been effective on the first day of fiscal 1995.
Earthgrains Pro Forma
Pro Adjustments
Forma Pro Heiner's Note Pro Forma
Historical Adj.(f) Forma Historical Amount Ref. Combined
---------- ------- ----- ---------- ------ ---- ---------
Net sales $1,664.6 $ -- $1,664.6 $ 36.1 $ $1,700.7
Cost of products sold 1,023.1 3.5 1,026.6 19.5 1,046.1
-------- -------- -------- -------- --------
Gross profit 641.5 (3.5) 638.0 16.6 654.6
Marketing, distribution and
administrative expenses 639.1 21.0 660.1 12.9 (0.3) (a) 672.7
Provision for restructuring
and consolidation, net 9.1 -- 9.1 -- -- 9.1
-------- -------- -------- -------- -------- --------
Operating Income (6.7) (24.5) (31.2) 3.7 0.3 (27.2)
Other income and expenses:
Interest expense (1.9) (5.4) (7.3) -- (2.7) (b) (10.0)
Interest income -- -- -- 1.7 (1.7) (a) --
Other income, net 4.7 -- 4.7 0.1 -- 4.8
-------- -------- -------- -------- -------- --------
Income (loss)
before income taxes (3.9) (29.9) (33.8) 5.5 (4.1) (32.4)
-------- -------- -------- -------- -------- --------
Provision (benefit) for 2.2 (g)
income taxes 2.7 (10.8) 8.1 -- (1.6) (c) (7.5)
-------- -------- -------- -------- --------- --------
Net income (loss) $ (6.6) $ (19.1) $ (25.7) $ 5.5 (4.7) $ (24.9)
======== ======== ======== ======== ======== ========
Earnings (loss) per share $ (0.65) $ (2.52) $ (2.44)
(d) ======== ======== ========
Weighted average shares
outstanding (pro forma
for Earthgrains) (d) 10.2 10.2 10.2
======== ======== ========
THE EARTHGRAINS COMPANY
AND
HEINER'S BAKERY, INC.
PRO FORMA CONDENSED COMBINED STATEMENT OF EARNINGS
THIRTY-SIX WEEK PERIOD ENDED SEPTEMBER 10, 1996 AND FISCAL YEAR
1995
(Unaudited)
Notes to Condensed Combined Statements of Earnings
(a) To eliminate interest income and expenses associated with
investments, certain assets and liabilities not acquired by the
Company; and reflect incremental depreciation and amortization
associated with the preliminary purchase price allocation as a
result of the acquisition.
(b) To reflect interest expense on incremental debt and working
capital requirements.
(c) To reflect tax effect of the proforma adjustments.
(d) The number of shares used to compute earnings (loss) per share
is based on the weighted average number of company shares
outstanding subsequent to 3/26/96 and the number of shares of
Anheuser-Busch common stock outstanding for the period ended March
26, 1996, adjusted for an assumed distribution ratio of one share
of Common Stock for every 25 shares of Anheuser-Busch common stock
held on the Record Date.
(e) Earthgrains historical figures presented represent the amounts
included in quarterly filings on Form 10-Q for the twelve week
transition period ended March 26, 1996 plus the twenty-four week
period ended September 10, 1996. Effective March 26, 1996, the
Company changed its year end from the Tuesday closest to December
31 to the last Tuesday in March.
(f) Pro forma adjustments for Earthgrains have been shown for the
periods prior to 3/26/96 to present combined results assuming the
Company had been operating as an independent, public company from
the beginning of Fiscal 1995. Such pro forma combined results for
Earthgrains have been presented in the Form 10 for fiscal 1995 and
in the Form 10-Q for the twelve week transition period ended March
26, 1996.
(g) Heiner's pro forma tax provision calculated in accordance with
SFAS 109 "Accounting for Income Taxes", as if Heiner's had been a
"C" Corporation rather than an "S" Corporation as historically
presented.
PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION
THE EARTHGRAINS COMPANY
AND
HEINER'S BAKERY, INC.
PRO FORMA CONDENSED COMBINED BALANCE SHEET
SEPTEMBER 10, 1996
(Unaudited)
($ In millions)
The following pro forma condensed combined balance sheet combines
The Earthgrains Company (Earthgrains or The Company) at September
10, 1996 and Heiner's Bakery, Inc. (Heiner's) at September 7, 1996,
under the assumptions set forth in the accompanying notes. The pro
forma condensed combined balance sheet should be read in
conjunction with the separate financial statements and notes
thereto of Earthgrains, included in the Company's most recent
filing on Form 10-Q and Heiner's interim financial statements
included in this report. The pro forma condensed combined balance
sheet is not necessarily indicative of the future financial
position of the combined companies or of the financial position at
September 10, 1996 had the acquisition occurred on that date.
Historical Pro Forma Adjustments
------------------------- -----------------------------
Note Pro Forma
Earthgrains Heiner's Amount Reference Combined
----------- -------- ------ --------- ---------
ASSETS
Current assets:
Cash and cash equivalents $ 41.9 $ 8.2 $ (8.2) (1) $ 41.9
Investments -- 11.9 (11.9) (1) --
Accounts receivable, net 148.4 3.0 -- 151.4
Inventories 71.0 .5 -- 71.5
Deferred income taxes and other 28.7 .9 0.5 (2) 30.1
-------- -------- -------- --------
Total current assets 290.0 24.5 (19.6) 294.9
Other assets 29.7 29.7
Goodwill, net 128.1 -- 12.6 (2) 140.7
Plant and equipment, net 715.9 10.9 12.8 (2) 739.6
-------- -------- -------- --------
Total assets $1,163.7 $ 35.4 $ 5.8 $1,204.9
======== ======== ======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 117.7 $ .8 -- $ 118.5
Accrued salaries, wages & benefits 48.5 .5 -- 49.0
Accrued taxes, other than
income taxes 13.9 -- -- 13.9
Accrual for restructuring
& consolidation 8.1 -- -- 8.1
Other current liabilities 26.4 .1 1.3 (2) 27.8
-------- -------- -------- --------
Total current liabilities 214.6 1.4 1.3 217.3
-------- -------- -------- --------
Postretirement benefits 122.5 -- -- 122.5
Long-term debt 96.1 -- 38.5 (2) 134.6
Deferred income taxes 87.7 -- -- 87.7
Other noncurrent liabilities 60.2 1.1 (1.1) (1) 60.2
Commitments and contingencies -- -- -- --
Shareholders' equity 582.6 32.9 (32.9) (2) 582.6
-------- -------- -------- --------
Total liabilities and equity $1,163.7 $ 35.4 $ 5.8 $1,204.9
======== ======== ======== ========
_______________________
</TABLE
PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION
THE EARTHGRAINS COMPANY
AND
HEINER'S BAKERY, INC.
PRO FORMA CONDENSED COMBINED BALANCE SHEET
SEPTEMBER 10, 1996
(Unaudited)
Notes to Condensed Combined Balance Sheet:
(1) To eliminate certain assets and liabilities of Heiner's not
acquired by the Company.
(2) To record the preliminary purchase price allocation and
eliminate the stockholder's equity of Heiner's.