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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 March 31, 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 March 31, 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 .
91,237,279 shares of Common Stock and 24,996,373 shares of Class B
Common Stock were outstanding as of April 17, 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
March 31
1995 1994
<S> <C> <C>
Revenues:
Net sales $ 410,159 378,557
Investment and other income 3,069 2,551
Nonrecurring gain on sale of
Singapore property - 38,102
Total revenues 413,228 419,210
Costs and expenses:
Cost of sales 181,761 162,936
Selling, distribution, and
general administrative 146,159 137,059
Interest 199 582
Total costs and expenses 328,119 300,577
Earnings before income taxes 85,109 118,633
Income taxes 29,833 42,691
Net earnings $ 55,276 75,942
Net earnings per average share of
common stock $ .48 .65
Dividends declared per share of
common stock $ .14 .12
Average number of shares
outstanding for the period 116,184,259 116,393,296
All dollar amounts in thousands except for per share values.
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)
Three Months Ended
March 31,
1995 1994
<S> <C> <C>
CASH FLOWS - OPERATING ACTIVITIES
Net earnings $ 55,276 75,942
Adjustments to reconcile net earnings to net
cash flows from operating activities:
Depreciation 10,443 9,016
(Gain) Loss on sales of property, plant, and
equipment 131 (38,321)
(Increase) decrease in:
Accounts receivable (28,704) (34,034)
Inventories 5,411 (17,533)
Other current assets (5,316) (240)
Other assets and deferred charges 1,826 11,378
Increase (decrease) in:
Accounts payable 9,141 2,549
Accrued expenses (9,722) 1,686
Income and other taxes payable 18,803 39,543
Deferred taxes (261) (6,725)
Other noncurrent liabilities 5,009 3,120
Net cash flows - operating activities 62,037 46,381
CASH FLOWS - INVESTING ACTIVITIES
Additions to property, plant, and equipment (17,966) (9,675)
Proceeds from property retirements 302 39,163
Purchases of short-term investments (95,753) (81,971)
Maturities of short-term investments 90,333 86,890
Net cash flows - investing activities (23,084) 34,407
CASH FLOWS - FINANCING ACTIVITIES
Dividends paid (16,269) (11,640)
Common stock purchased (7,742) (5,600)
Proceeds from Notes Payable 52,000 -
Net cash flows - financing activities 27,989 (17,240)
Effect of exchange rate changes on cash and
cash equivalents (1,026) 673
Net increase in cash and cash equivalents 65,916 64,221
Cash and cash equivalents at beginning of period 127,569 86,290
Cash and cash equivalents at end of period $ 193,485 150,511
SUPPLEMENTAL CASH FLOW INFORMATION
Income taxes paid $ 13,181 10,105
Interest paid $ 174 577
Interest and dividends received $ 3,059 2,224
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)
March 31, December 31,
1995 1994
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 193,485 127,569
Short-term investments 108,150 102,679
Accounts receivable 173,563 138,547
(less allowance for doubtful accounts;
3/31/95-$7,039; 12/31/94-$6,645)
Inventories -
Finished goods 50,851 59,205
Raw materials and supplies 169,804 161,904
220,655 221,109
Other current assets 32,839 25,924
Deferred income taxes - current 7,514 7,484
Total current assets 736,206 623,312
Marketable equity securities at fair value 15,557 14,687
Other assets and deferred charges 31,381 30,581
Deferred income taxes - noncurrent 20,992 20,834
Property, plant and equipment, at cost 663,727 638,463
Less accumulated depreciation 362,416 349,043
301,311 289,420
Total assets $1,105,447 978,834
Current liabilities:
Notes Payable $ 52,000 -
Accounts Payable 79,514 68,097
Accrued Expenses 62,554 69,716
Dividends Payable 16,251 16,269
Income and other taxes payable 75,764 55,178
Deferred income taxes - current 408 638
Total current liabilities 286,491 209,898
Deferred income taxes - noncurrent 16,186 15,760
Other noncurrent liabilities 71,311 64,706
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 - 91,062,883 shares at 3/31/95;
91,325,657 shares at 12/31/94 12,178 12,177
Class B Common Stock - convertible
Authorized - 80,000,000 shares
Issued and outstanding -
25,015,166 shares at 3/31/95;
25,074,832 shares at 12/31/94 3,342 3,343
Additional paid-in capital 1,738 1,781
Retained earnings 724,875 685,850
Foreign currency translation adjustment (4,174) (13,502)
Unrealized holding gains on marketable equity
securities 8,418 7,855
Common Stock in treasury, at cost -322,444
shares at 3/31/95; 192,233 shares at 12/31/94 (14,918) (9,034)
Total stockholders' equity 731,459 688,470
Total liabilities & stockholders' equity $1,105,447 978,834
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) and of
Consolidated Cash Flows (Condensed) for the three month
periods ended March 31, 1995 and 1994, and the Consolidated
Balance Sheet (Condensed) at March 31, 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
First Quarter 1995 1994
Balance at January 1 $13,502 24,757
Translation adjustment for the
first quarter (9,328) (1,872)
Balance at March 31 $ 4,174 22,885
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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
The 1995 first quarter net sales were $410.2 million, an increase
of over 8% from the prior year. Exchange rate translation to a
weaker U.S. dollar, volume increases, selected selling price and
the mix of products sold account for the increase.
Investment and Other Income
The 1995 first quarter investment and other income increased by 20%
due primarily to larger amounts invested and higher yields in 1995.
Costs and Expenses
Cost of Sales
Cost of sales for the first quarter 1995 increased $18.8 million
or nearly 12% compared to the prior year. This was mainly due to
higher shipments, translation to a weaker U.S. dollar and higher
product costs in 1995.
The consolidated gross profit percentage for the first quarter of
1995 was 55.7%, compared to 57.0% for the first quarter of 1994.
The somewhat lower margin in 1995 was mainly due to higher product
cost and the mix of sales.
Selling, Distribution, and General Administrative
The selling, distribution, and general administrative expenses for
the first quarter of 1995 increased $9.1 million or 6.6% from the
prior year. Marketing and selling expenses accounted for the
increase.
Net Earnings
Net earnings for the first quarter of 1995 are $55.3 million or
$.48 per share compared to last year's results of $75.9 million or
$.65 per share for the same period. In January 1994, the Company
sold its real estate holdings in Singapore for a pre-tax gain of
$38.1 million. This nonrecurring gain increased 1994 first quarter
net earnings by an after-tax amount of $24.8 million or $.21 per
share.
Excluding the nonrecurring Singapore gain in 1994, the net earnings
increases are $4.1 million or 8% and $.04 per share or 9%.
Including last year's Singapore gain, net earnings are down $20.7
million or 27% and $.17 per share or 26%.
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FORM 10-Q
PART I - FINANCIAL INFORMATION - ITEM 2 (Cont'd)
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
RESULTS OF OPERATIONS AND FINANCIAL CONDITION
LIQUIDITY AND CAPITAL RESOURCES
At March 31, 1995 the Company's cash and cash equivalents and
short-term investments totaled $301.6 million compared to $230.2
million at December 31, 1994 - an increase of $71.4 million. The
ratio of current assets to liabilities (current ratio) at March 31,
1994 was 2.6 to 1 compared to 3.0 to 1 at December 31, 1994.
Loans totaling $52,000,000 were initiated with Bank of America on
March 29, 1995 as part of an overall tax plan. These loans are
scheduled to be repaid on July 7, 1995.
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 4 - Submission of Matters to Vote of Security Holders
The Annual Meeting of Stockholders of the Wm. Wrigley Jr.
Company was held on March 9, 1995 to consider the following
proposals: (1) the election of nine directors to serve for the
ensuing year; and
(2) ratification of the appointment of Ernst & Young as the
Company's independent auditors for 1995. The results of the voting
on each matter, as determined by the independent inspectors of
election, are as follows:
Proposal 1. Election of nine directors. With each class
of stock voting together, a total of 341,837,027 votes were
eligible to be cast and a total of 300,011,842 were
submitted with respect to each nominee as follows:
Nominee For % For Withheld
Charles F. Allison III 299,731,835 99.91 280,007
Lee Phillip Bell 299,730,153 99.91 281,689
Robert P. Billingsley 299,641,810 99.88 370,032
R.Darrell Ewers 299,748,793 99.91 263,049
Gary E. Gardner 299,484,179 99.82 527,633
Penny Pritzker 299,406,888 99.80 604,954
Richard K. Smucker 299,655,286 99.88 356,556
William Wrigley 299,749,203 99.91 262,639
William Wrigley, Jr. 299,720,359 99.90 291,483
Proposal 2. Ratification of Auditors. With each class of
stock voting together, a total of 341,837,027 votes were
eligible to be cast and a total of 300,011,842 were
submitted as follows:
For Against Abstain
299,174,867 423,884 413,091
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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 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 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.
Under these resolutions and agreements, the Company acquired
and distributed stock in the first quarter of 1995 as follows:
<TABLE>
Aggregate Shares
Shares Purchase Shares in
Period Acquired Price Distributed Treasury
<S> <C> <C> <C> <C> <C>
1st Quarter 170,311 $7,742,239 40,100 130,211
Treasury shares
held at 12/31/94 192,233
Total Treasury shares
at 3/31/95 322,444
</TABLE>
Item 6 - Exhibits and Reports on Form 8-K
(b) The Company has not filed a Form 8-K for the three month
period ended March 31, 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 behalfby the undersigned thereunto duly authorized.
WM. WRIGLEY JR. COMPANY
(Registrant)
By Dennis J. Yarbrough
Corporate Controller
By Dushan Petrovich
Vice President - Treasurer
Date May 12, 1995
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> MAR-31-1995
<CASH> 193,485
<SECURITIES> 123,707
<RECEIVABLES> 180,602
<ALLOWANCES> 7,039
<INVENTORY> 220,655
<CURRENT-ASSETS> 736,206
<PP&E> 663,727
<DEPRECIATION> 362,416
<TOTAL-ASSETS> 1,105,447
<CURRENT-LIABILITIES> 286,491
<BONDS> 0
<COMMON> 15,520
0
0
<OTHER-SE> 715,939
<TOTAL-LIABILITY-AND-EQUITY> 1,105,447
<SALES> 410,159
<TOTAL-REVENUES> 413,228
<CGS> 181,761
<TOTAL-COSTS> 328,119
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 199
<INCOME-PRETAX> 85,109
<INCOME-TAX> 29,833
<INCOME-CONTINUING> 55,276
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 55,276
<EPS-PRIMARY> 0.48
<EPS-DILUTED> 0.48
</TABLE>
