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FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
(Mark One)
[x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1994
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
For Quarter Ended June 30, 1994 Commission file number 1-800
WM. WRIGLEY JR. COMPANY
(Exact name of registrant as specified in its charter)
DELAWARE 36-1988190
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
410 North Michigan Avenue
Chicago, Illinois 60611
(Address of principal executive offices) (Zip Code)
(Registrant's telephone number, including area code) 312-644-2121
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 .
91,053,266 shares of Common Stock and 25,320,852 shares of Class B
Common Stock were outstanding as of July 15, 1994.
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FORM 10-Q
PART I - FINANCIAL INFORMATION - ITEM 1
WM. WRIGLEY JR. COMPANY
STATEMENT OF CONSOLIDATED EARNINGS (CONDENSED)
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
1994 1993 1994 1993
<S> <C> <C> <C> <C>
Revenues:
Net sales $ 423,048 386,167 801,605 718,500
Investment and other income 2,783 2,460 5,334 4,600
Nonrecurring gain on sale of
Singapore property - - 38,102 -
Total revenues 425,831 388,627 845,041 723,100
Costs and expenses:
Cost of sales 185,761 165,301 348,697 310,414
Selling, distribution, and
general administrative 149,190 139,440 286,249 261,680
Interest 391 269 973 509
Total costs and expenses 335,342 305,010 635,919 572,603
Earnings before income taxes 90,489 83,617 209,122 150,497
Income taxes 32,142 30,057 74,833 54,577
Net earnings $ 58,347 53,560 134,289 95,920
Net earnings per average share of
common stock $ .50 .46 1.15 .82
Dividends declared per share of
common stock $ .12 .10 .24 .20
Average number of shares
outstanding for the period 116,374,118 116,549,955 116,383,654 116,622,785
All dollar amounts in thousands except for per share values.
SEE ACCOMPANYING NOTES ON PAGE 5
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FORM 10-Q
PART I - FINANCIAL INFORMATION - ITEM 1 (Cont'd)
WM. WRIGLEY JR. COMPANY
STATEMENT OF CONSOLIDATED CASH FLOWS (CONDENSED)
<CAPTION>
Six Months Ended
June 30,
1994 1993
<S> <C> <C>
CASH FLOWS - OPERATING ACTIVITIES
Net earnings $ 134,289 95,920
Adjustments to reconcile net earnings to net
cash flows from operating activities:
Depreciation 19,049 15,426
Gain on sales of property, plant, and
equipment (38,460) (578)
(Increase) decrease in:
Accounts receivable (52,551) (50,302)
Inventories (10,757) (2,422)
Other current assets (1,660) (3,479)
Other assets and deferred charges 10,354 (4,275)
Increase (decrease) in:
Accounts payable 13,743 13,067
Accrued expenses 15,360 27,715
Income and other taxes payable 25,851 (1,103)
Deferred taxes (4,195) (1,080)
Other noncurrent liabilities 3,644 (191)
Net cash flows - operating activities 114,667 88,698
CASH FLOWS - INVESTING ACTIVITIES
Additions to property, plant, and equipment (27,129) (30,586)
Proceeds from property retirements 39,580 2,298
Purchases of short-term investments (111,182) -
Maturities of short-term investments 113,184 -
Net (increase) decrease in short-term investments - 5,722
Net cash flows - investing activities 14,453 (22,566)
CASH FLOWS - FINANCING ACTIVITIES
Dividends paid (25,605) (23,323)
Common stock purchased (5,600) (10,084)
Net cash flows - financing activities (31,205) (33,407)
Effect of exchange rate changes on cash and
cash equivalents 1,987 (1,663)
Net increase in cash and cash equivalents 99,902 31,062
Cash and cash equivalents at beginning of period 86,290 84,144
Cash and cash equivalents at end of period $186,192 115,206
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Income taxes paid $ 54,340 59,315
Interest paid $ 979 475
Interest and dividends received $ 5,226 4,725
All dollar amounts in thousands.
SEE ACCOMPANYING NOTES ON PAGE 5.
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FORM 10-Q
PART I - FINANCIAL INFORMATION - ITEM 1 (Cont'd)
WM. WRIGLEY JR. COMPANY
CONSOLIDATED BALANCE SHEET (CONDENSED)
<CAPTION>
June 30, December 31,
1994 1993
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 186,192 86,290
Short-term investments 101,460 103,556
Accounts receivable 176,611 118,222
(less allowance for doubtful accounts;
6/30/94 - $5,376; 12/31/93-$4,407)
Inventories -
Finished goods 49,828 47,471
Raw materials and supplies 141,968 129,325
191,796 176,796
Other current assets 13,579 11,511
Deferred income taxes - current 6,294 5,918
Total current assets 675,932 502,293
Marketable equity securities at fair value 30,692 31,417
Other assets and deferred charges 20,169 25,881
Deferred income taxes - noncurrent 18,410 15,865
Property, plant and equipment, at cost 579,478 550,877
Less accumulated depreciation 329,971 311,009
249,507 239,868
Total assets $ 994,710 815,324
Current liabilities:
Accounts payable $ 78,512 62,621
Accrued expenses 84,916 67,137
Dividends payable 13,965 11,640
Income and other taxes payable 44,597 17,127
Deferred income taxes - current 404 636
Total current liabilities 222,394 159,161
Deferred income taxes - noncurrent 21,428 22,716
Other noncurrent liabilities 62,937 58,265
Stockholders' equity:
Preferred stock - no par value
Authorized - 20,000,000 shares
Issued - None
Common stock - no par value
Authorized - 400,000,000 shares
Issued - 91,046,588 shares at 6/30/94;
90,588,065 shares at 12/31/93 12,112 12,078
Class B Common Stock - convertible
Authorized - 80,000,000 shares
Issued and outstanding -
25,327,530 shares at 6/30/94;
25,812,424 shares at 12/31/93 3,408 3,442
Additional paid-in capital 1,457 1,467
Retained earnings 670,999 564,640
Foreign currency translation adjustment (16,531) (24,757)
Unrealized holding gains on marketable equity
securities 17,840 18,312
Common Stock in treasury, at cost - 26,371
shares at 6/30/94; 0 shares 12/31/93 (1,334) -
Total stockholders' equity 687,951 575,182
Total liabilities & stockholders' equity $ 994,710 815,324
All dollar amounts in thousands.
SEE ACCOMPANYING NOTES ON PAGE 5.
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FORM 10-Q
PART I - FINANCIAL INFORMATION - ITEM 1 (Cont'd)
WM. WRIGLEY JR. COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONDENSED)
1. The Statement of Consolidated Earnings (Condensed) for the
three and six month periods ended June 30, 1994 and 1993,
the Statement of Consolidated Cash Flows (Condensed) for the six
month periods ended June 30, 1994 and 1993, and the
Consolidated Balance Sheet (Condensed) at June 30, 1994 are
unaudited. In the Company's opinion, the accompanying
financial statements reflect all adjustments (which include
only normal recurring adjustments) necessary to present fairly
the results for the periods, and have been prepared on a basis
consistent with the 1993 audited consolidated financial
statements. These condensed financial statements should be
read in conjunction with the 1993 consolidated financial
statements and related notes.
2. An analysis of the cumulative foreign currency translation
adjustment follows (in thousands of dollars).
Decrease (Increase) to
Stockholders' Equity
Second Quarter 1994 1993
Balance at April 1 $22,885 12,694
Translation adjustment for the
second quarter (6,354) 3,730
Balance at June 30 $16,531 16,424
Six Months
Balance at January 1 $24,757 9,692
Translation adjustment for
the six-month period (8,226) 6,732
Balance at June 30 $16,531 16,424
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FORM 10-Q
PART I - FINANCIAL INFORMATION - ITEM 2
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
RESULTS OF OPERATIONS AND FINANCIAL CONDITION
RESULTS OF OPERATIONS
Revenues
Net Sales
1994 second quarter and first six months net sales exceeded the same
period last year by 9.6% and 11.6%, respectively. Higher
international volume accounts for the majority of the sales gain with
over half of the volume increase coming from the emerging markets of
Central and Eastern Europe and Latin America.
Investment and Other Interest Income
1994 second quarter and first six months investment and other
interest income increased by 13% and 16% respectively when compared
with the same periods in 1993. The increases are due to higher
invested balances and higher yields.
Costs and Expenses
Cost of Sales
Cost of sales for the second quarter and first six months of 1994
increased by 12.4% and 12.3% respectively, compared with the same
periods last year. The increases were primarily due to volume
increases in emerging markets which impose import duties.
The Company's consolidated gross profit percentages declined slightly
mainly due to import duties and pricing restraints in newer markets.
They were:
1994 1993
Second Quarter 56.1% 57.2%
First Half 56.5% 56.8%
Selling, Distribution, and General Administrative
The selling, distribution, and general administrative expenses for
the second quarter and the first six months of 1994 exceeded the same
periods last year by 7.0% and 9.4%, respectively. These increases
were primarily due to higher advertising, marketing and selling
expenses.
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MANAGEMENT'S DISCUSSION AND ANALYSIS OF
RESULTS OF OPERATIONS AND FINANCIAL CONDITION
(Cont'd)
Income Taxes
The effective tax rates for the second quarter and first half of 1994
and 1993 are shown below:
1994 1993
Second quarter 35.5% 35.9%
First half 35.8% 36.3%
Net Earnings
Consolidated net earnings totaled $58.3 million or $.50 per share for
the second quarter of 1994 - an 8.9% increase of $4.8 million or $.04
per share from the second quarter of 1993.
In January, 1994, the Company sold its real estate holding in
Singapore for a pre-tax gain of $38.1 million. This nonrecurring
gain increased net earnings by an after-tax amount of $24.8 million
or $.21 per share.
Total net earnings for the first half of 1994 were $134.3 million, an
increase of $38.4 million or 40%. On a per share basis, earnings
were $1.15, an increase of $.33 or 40%. Excluding the nonrecurring
Singapore gain, the earnings increases were $13.6 million or 14% and
$.12 per share or 15%.
LIQUIDITY AND CAPITAL RESOURCES
At June 30, 1994, the Company's cash and cash equivalents and short-
term investments totaled $287.6 million compared to $189.8 million at
December 31, 1993 - an increase of $97.8 million. The ratio of
current assets to current liabilities (current ratio) at June 30,
1994 was 3.0 to 1 compared to 3.2 to 1 at December 31, 1993.
Capital expenditures for 1994 are expected to be higher than 1993's
expenditures of $63.1 million and are expected to be funded from the
Company's operations and internal sources including the proceeds from
the sales of real estate holdings in Singapore.
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FORM 10-Q
PART II - OTHER INFORMATION
Item 5 - Other Information
At its meeting of August 18, 1993, the Board of Directors adopted a
resolution authorizing the Company to purchase from time to time
shares of the Company's Common Stock not to exceed $100,000,000 in
aggregate price.
The Company's Management Incentive Plan (MIP) authorizes the granting
of up to 5,400,000 shares of the Company's Common Stock (including
492,222 shares issued under the predecessor 1984 Stock Award Plan) to
key managers in various forms including stock grants and stock
appreciation rights. Shares so awarded may be issued from the
Company Treasury or purchased in the open market.
The Company Stock Retirement Plan for Non-employee Directors
authorizes award of up to 300,000 shares in the aggregate to non-
employee directors upon their retirement from the Board. Shares so
awarded may be issued from the Company Treasury or purchased in the
open market.
During the first quarter of 1994, 120,000 shares were purchased under
the above resolutions at an aggregate purchase price of $5,600,150.
Of these, 93,629 shares were awarded under employee benefit programs,
and 26,371 shares were retained as Treasury Stock by the Company for
the future uses to be determined. No shares were purchased under the
above resolutions in the second quarter.
On June 9, 1994, pursuant to an unsolicited offer received by the
Company from the Wrigley Memorial Garden Foundation, the Company
entered into an agreement to purchase a total of 345,072 shares of
the Company's Common Stock, no par value, held by the Foundation.
The agreement provides that the Company purchase the shares from the
Foundation for cash in four equal quarterly increments of 86,268
shares beginning with the third calendar quarter of 1994. The
purchase price per share of each quarterly increment will be the
average closing price of the Company's Common Stock on the New York
Stock Exchange during each respective quarter.
On August 3, 1994 in a private placement, the Company sold 105,000
put warrants for $173,600 that entitle the holder of each warrant to
sell one share of Common Stock to the Company at a price of $38.44.
One-third (35,000) of the put warrants expire on each of the
following dates--November 1, November 9 and November 15, 1994.
Item 6 - Exhibits and Reports on Form 8-K
(b) The Company has not filed a Form 8-K for the six month
period ended June 30, 1994.
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FORM 10-Q
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.
WM. WRIGLEY JR. COMPANY
(Registrant)
By
Dennis J. Yarbrough
Corporate Controller
By
Dushan Petrovich
Vice President - Treasurer
Date August 12, 1994
