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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 September 30, 1995
[ ] 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 September 30, 1995 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 .
91,395,583 shares of Common Stock and 24,755,114 shares of Class B
Common Stock were outstanding as of October 13, 1995.
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FORM 10-Q
PART I - FINANCIAL INFORMATION - ITEM 1
WM. WRIGLEY JR. COMPANY
STATEMENT OF CONSOLIDATED EARNINGS (CONDENSED)
Three Months Ended Nine Months Ended
September 30, September 30,
1995 1994 1995 1994
<S> <C> <C> <C> <C>
Revenues:
Net sales $ 431,479 404,087 1,312,286 1,205,692
Investment and other income 3,899 17,530 11,446 22,864
Nonrecurring gain on sale of
Singapore property - - 38,102
Total revenues 435,378 421,617 1,323,732 1,266,658
Costs and expenses:
Cost of sales 189,939 172,838 579,776 521,535
Selling, distribution, and
general administrative 155,103 159,879 465,902 446,128
Interest 327 221 1,680 1,194
Total costs and expenses 345,369 332,938 1,047,358 968,857
Earnings before income taxes 90,009 88,679 276,374 297,801
Income taxes 31,721 27,058 98,914 101,891
Net earnings 58,288 61,621 177,460 195,910
Net earnings per average
share of common stock $ .50 .53 1.53 1.68
Dividends declared per share of
common stock $ .17 .12 .45 .36
Average number of shares
outstanding for the period 115,999,292 116,373,180 116,087,117 116,380,124
All dollar amounts in thousands except for per share amounts.
SEE ACCOMPANYING NOTES ON PAGE 5
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<TABLE>
FORM 10-Q
PART I - FINANCIAL INFORMATION - ITEM 1 (Cont'd)
WM. WRIGLEY JR. COMPANY
STATEMENT OF CONSOLIDATED CASH FLOWS (CONDENSED)
Nine Months Ended
September 30,
1995 1994
<S> <C> <C>
CASH FLOWS - OPERATING ACTIVITIES
Net earnings $ 177,460 195,910
Adjustments to reconcile net earnings to net
cash flows from operating activities:
Depreciation 32,156 29,593
Gain on sales of property, plant, and
equipment (1,313) (39,054)
(Increase) decrease in:
Accounts receivable (38,600) (45,399)
Inventories (28,146) (45,140)
Other current assets 3,012 (2,875)
Other assets and deferred charges (2,616) 10,144
Increase (decrease) in:
Accounts payable 14,126 23,671
Accrued expenses 19,225 17,475
Income and other taxes payable 3,703 26,847
Deferred taxes ( 420) (5,793)
Other noncurrent liabilities 8,541 768
Net cash flows - operating activities 187,128 166,147
CASH FLOWS - INVESTING ACTIVITIES
Additions to property, plant, and equipment (73,537) (52,152)
Proceeds from property retirements 4,910 40,599
Purchase of short-term investments (248,861) (177,375)
Maturities of short-term investments 236,261 182,776
Net cash flows - investing activities (81,227) (6,152)
CASH FLOWS - FINANCING ACTIVITIES
Dividends paid (48,760) (39,570)
Common stock purchased (11,734) (9,315)
Net cash flows - financing activities (60,494) (48,885)
Effect of exchange rate changes on cash and
cash equivalents 2,127 1,180
Net increase in cash and cash equivalents 47,534 112,290
Cash and cash equivalents at beginning of period 127,569 86,290
Cash and cash equivalents at end of period $ 175,103 198,580
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Income taxes paid $ 98,269 80,337
Interest paid $ 1,862 1,193
Interest and dividends received $ 11,298 8,321
All dollar amounts in thousands.
SEE ACCOMPANYING NOTES ON PAGE 5.
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<TABLE>
FORM 10-Q
PART I - FINANCIAL INFORMATION - ITEM 1 (Cont'd)
WM. WRIGLEY JR. COMPANY
CONSOLIDATED BALANCE SHEET (CONDENSED)
September 30, December 31,
1995 1994
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 175,103 127,569
Short-term investments 115,320 102,679
Accounts receivable 181,712 138,547
(less allowance for doubtful accounts:
9/30/95 -$7,097; 12/31/94-$6,645
Inventories -
Finished goods 51,989 59,205
Raw materials and supplies 200,630 161,904
252,619 221,109
Other current assets 24,005 25,924
Deferred income taxes - current 7,813 7,484
Total current assets 756,572 623,312
Marketable equity securities at fair value 18,550 14,687
Other assets and deferred charges 35,918 30,581
Deferred income taxes - noncurrent 21,419 20,834
Property, plant and equipment, at cost 704,244 638,463
Less accumulated depreciation 374,459 349,043
329,785 289,420
Total assets $1,162,244 978,834
Current liabilities:
Accounts payable $ 83,745 68,097
Accrued expenses 90,994 69,716
Dividends payable 19,720 16,269
Income and other taxes payable 60,033 55,178
Deferred income taxes - current 419 638
Total current liabilities 254,911 209,898
Deferred income taxes-noncurrent 17,803 15,760
Other noncurrent liabilities 74,293 64,706
Stockholders' equity:
Preferred stock - no par value
Authorized - 20,000,000 shares
Issued - None
Common stock - no par value
Common Stock
Authorized - 400,000,000 shares
Issued - 91,226,107 shares at 9/30/95;
91,325,657 shares at 12/31/94 12,217 12,177
Class B Common Stock - convertible
Authorized - 80,000,000 shares
Issued and outstanding -
24,775,502 shares at 9/30/95;
25,074,832 shares at 12/31/94 3,303 3,343
Additional paid-in capital 1,625 1,781
Retained earnings 811,099 685,850
Foreign currency translation adjustment (5,059) (13,502)
Unrealized holding gains on marketable
equity securities 10,424 7,855
Common Stock in treasury, at cost - 398,880
shares at 9/30/95; 192,233 shares at 12/31/94 (18,372) (9,034)
Total stockholders' equity 815,237 688,470
Total liabilities & stockholders' equity $1,162,244 978,834
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 nine month periods ended September 30, 1995 and
1994, the Statement of Consolidated Cash Flows (Condensed) for
the nine month periods ended September 30, 1995 and 1994, and
the Consolidated Balance Sheet (Condensed) at September 30,
1995 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 1994 audited
consolidated financial statements. These condensed financial
statements should be read in conjunction with the 1994
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
Third Quarter 1995 1994
Balance at July 1 $ 5,344 16,531
Translation adjustment for the
third quarter (285) (3,477)
Balance at September 30 $5,059 13,054
Nine Months
Balance at January 1 $13,502 24,757
Translation adjustment for
the nine-month period (8,443) (11,703)
Balance at September 30 $ 5,059 13,054
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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
Net sales for the third quarter and first nine months of 1995
exceeded the same periods last year by 6.8% and 8.8%, respectively.
Higher overseas volume, translation to a weaker U.S. dollar and
selective price increases accounted for the majority of the sales
gain.
Investment and Other Interest Income
Investment and other interest income for the third quarter and
first nine months of 1995 decreased by $13.6 million (78%) and
$11.4 million (50%), respectively. This decrease is mainly due to
a 1994 market gain of $14.3 million on securities contributed to
the Company's charitable foundation.
Costs and Expenses
Cost of Sales
Cost of sales for the third quarter and first nine months of 1995
increased by 9.9% and 11.2%, respectively compared with the same
periods last year. The increases were primarily due to higher
product costs, translation to a weaker U.S. dollar and higher
overseas volume.
The Company's consolidated gross profit percentages were as
follows:
1995 1994
Third Quarter 56.0% 57.2%
First Nine Months 55.8% 56.7%
Selling, Distribution, and General Administrative
Selling, distribution, and general administrative expenses
decreased by 3.0% in the third quarter and increased by 4.4% in the
first nine months of 1995 when compared to the same periods last
year. Excluding the charitable foundation contribution in the
third quarter of 1994, selling, distribution and general
administrative expenses for the third quarter and first nine months
of 1995 exceeded the same periods last year by 7.0% and 8.1%,
respectively. Increases are primarily due to higher marketing and
selling in International operations.
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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 third quarter and first nine months
of 1995 and 1994 are shown below:
1995 1994
Third quarter 35.2% 30.5%
First nine months 35.8% 34.2%
The lower rates for 1994 result primarily from the U.S. income tax
benefit of the contribution of marketable securities valued at
nearly $15 million to the Company's charitable foundation.
Net Earnings
Consolidated net earnings totaled $58.3 million or $.50 per share
for the third quarter of 1995 - a 5.4% decrease of $3.3 million or
$.03 per share from the third quarter of 1994. Excluding the
income tax benefit from the Foundation contribution noted above,
net earnings per share were even with 1994.
Total net earnings for the first nine months of 1995 were $177.5
million, a decrease of $18.5 million or 9%. On a per share basis,
earnings were $1.53, a decrease of $.15 or 9%. In January, 1994,
the Company sold its real estate holding in Singapore for a pre-tax
gain of $38.1 million. This non-recurring gain increased net
earnings by an after-tax amount of $24.8 million or $.21 per share.
Excluding the non-recurring Singapore gain, the earnings increase
was $6.3 million or $.06 per share or 4% over the prior year.
Further excluding the 1994 income tax benefit from the Foundation
contribution noted above, the earnings increase was $.09 per share
or 6%.
LIQUIDITY AND CAPITAL RESOURCES
At September 30, 1995, the Company's cash and cash equivalents and
short-term investments totaled $290.4 million compared to
$230.2 million at December 31, 1994 - an increase of $60.2 million.
The ratio of current assets to current liabilities (current ratio)
was 2.97 to 1 at September 30, 1995 and at December 31, 1994.
Capital expenditures for 1995 are expected to be higher than
1994's expenditures of $87.0 million and are expected to be funded
from the Company's operations and internal sources.
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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.
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 this Foundation.
The agreement provided 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 was the
average closing price of the Company's Common Stock on the New York
Stock Exchange during each respective quarter.
Under these resolutions and agreements, the Company has acquired
and distributed stock in 1995 as follows:
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Aggregate
Shares Purchase Shares Shares in
Period Acquired Price Distributed Treasury
<S> <C> <C> <C> <C>
1st Quarter 170,311 $ 7,742,239 40,100 130,211
2nd Quarter 87,831 3,935,652 5,903 81,928
3rd Quarter 821 40,377 6,313 (5,492)
Total-1995 258,963 $11,718,268 52,316 206,647
Treasury shares 192,233
held at 12/31/94
Total Treasury 398,880
shares at 9/30/95
</TABLE>
Item 6 - Exhibits and Reports on Form 8-K
(b) The Company has not filed a Form 8-K for the nine month period
ended September 30, 1995.
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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 November 14, 1995
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> SEP-30-1995
<CASH> 175,103
<SECURITIES> 133,870
<RECEIVABLES> 188,809
<ALLOWANCES> 7,097
<INVENTORY> 252,619
<CURRENT-ASSETS> 756,572
<PP&E> 704,244
<DEPRECIATION> 374,459
<TOTAL-ASSETS> 1,162,244
<CURRENT-LIABILITIES> 254,911
<BONDS> 0
<COMMON> 15,520
0
0
<OTHER-SE> 799,717
<TOTAL-LIABILITY-AND-EQUITY> 1,162,244
<SALES> 1,312,286
<TOTAL-REVENUES> 1,323,732
<CGS> 579,776
<TOTAL-COSTS> 1,047,358
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,680
<INCOME-PRETAX> 276,374
<INCOME-TAX> 98,914
<INCOME-CONTINUING> 177,460
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 177,460
<EPS-PRIMARY> 1.53
<EPS-DILUTED> 1.53
</TABLE>
