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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, 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 June 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 .
91,293,725 shares of Common Stock and 24,853,659 shares of Class B
Common Stock were outstanding as of July 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 Six Months Ended
June 30, June 30,
1995 1994 1995 1994
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Revenues:
Net sales $ 470,648 423,048 880,807 801,605
Investment and other income 4,478 2,783 7,547 5,334
Nonrecurring gain on sale of
Singapore property - - - 38,102
Total revenues 475,126 425,831 888,354 845,041
Costs and expenses:
Cost of sales 208,076 185,761 389,837 348,697
Selling, distribution, and
general administrative 164,640 149,190 310,799 286,249
Interest 1,154 391 1,353 973
Total costs and expenses 373,870 335,342 701,989 635,919
Earnings before income taxes 101,256 90,489 186,365 209,122
Income taxes 37,360 32,142 67,193 74,833
Net earnings $ 63,896 58,347 119,172 134,289
Net earnings per average share of
common stock $ .55 .50 1.03 1.15
Average number of shares
outstanding for the period 116,079,772 116,374,118 116,131,727 116,383,654
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)
Six Months Ended
June 30,
1995 1994
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CASH FLOWS - OPERATING ACTIVITIES
Net earnings $ 119,172 134,289
Adjustments to reconcile net earnings to net
cash flows from operating activities:
Depreciation 21,262 19,049
Gain on sales of property, plant, and
equipment (570) (38,460)
(Increase) decrease in:
Accounts receivable (49,939) (52,551)
Inventories 23,342 (10,757)
Other current assets 1,409 (1,660)
Other assets and deferred charges 750 10,354
Increase (decrease) in:
Accounts payable 6,729 13,743
Accrued expenses 9,277 15,360
Income and other taxes payable 8,527 25,851
Deferred taxes 125 (4,195)
Other noncurrent liabilities 5,822 3,644
Net cash flows - operating activities 145,906 114,667
CASH FLOWS - INVESTING ACTIVITIES
Additions to property, plant, and equipment (44,084) (27,129)
Proceeds from property retirements 3,433 39,580
Purchases of short-term investments (136,763) (111,182)
Maturities of short-term investments 129,921 113,184
Net cash flows - investing activities (47,493) 14,453
CASH FLOWS - FINANCING ACTIVITIES
Dividends paid (32,520) (25,605)
Common stock purchased (11,677) (5,600)
Net increase in Notes Payable 52,876 0
Net cash flows - financing activities 8,679 (31,205)
Effect of exchange rate changes on cash and
cash equivalents (739) 1,987
Net increase in cash and cash equivalents 106,353 99,902
Cash and cash equivalents at beginning of period 127,569 86,290
Cash and cash equivalents at end of period $233,922 186,192
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Income taxes paid $ 63,630 54,340
Interest paid $ 1,331 979
Interest and dividends received $ 7,156 5,226
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)
June 30, December 31,
1995 1994
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Current assets:
Cash and cash equivalents $ 233,922 127,569
Short-term investments 109,734 102,679
Accounts receivable 194,201 138,547
(less allowance for doubtful accounts;
6/30/95- $7,371; 12/31/94-$6,645)
Inventories -
Finished goods 42,466 59,205
Raw materials and supplies 159,419 161,904
201,885 221,109
Other current assets 25,969 25,924
Deferred income taxes - current 7,781 7,484
Total current assets 773,492 623,312
Marketable equity securities at fair value 15,907 14,687
Other assets and deferred charges 32,699 30,581
Deferred income taxes - Noncurrent 20,751 20,834
Property, plant and equipment, at cost 681,265 638,463
Less accumulated depreciation 367,682 349,043
313,583 289,420
Total assets $1,156,432 978,834
Current liabilities:
Notes Payable $ 52,876 -
Accounts payable 76,777 68,097
Accrued expenses 81,741 69,716
Dividends payable 16,251 16,269
Income and other taxes payable 65,136 55,178
Deferred income taxes - current 383 638
Total current liabilities 293,164 209,898
Deferred income taxes - noncurrent 16,757 15,760
Other noncurrent liabilities 71,962 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 - 91,122,475 shares at 6/30/95;
91,325,657 shares at 12/31/94 12,187 12,177
Class B Common Stock - convertible
Authorized - 80,000,000 shares
Issued and outstanding -
24,873,642 shares at 6/30/95
25,074,832 shares at 12/31/95 3,333 3,343
Additional paid-in capital 1,738 1,781
Retained earnings 772,520 685,850
Foreign currency translation adjustment (5,344) (13,502)
Unrealized holding gain 8,705 7,855
Common Stock in treasury, at cost - (6/30/95-
404,372 shares; 12/31/94-192,233 shares) (18,590) (9,034)
Total stockholders' equity 774,549 688,470
Total liabilities & stockholders' equity $ 1,156,432 978,834
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 six month periods ended June 30, 1995 and 1994,
the Statement of Consolidated Cash Flows (Condensed) for the
six month periods ended June 30, 1995 and 1994, and the
Consolidated Balance Sheet (Condensed) at June 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
Second Quarter 1995 1994
Balance at April 1 $ 4,174 22,885
Translation adjustment for the
second quarter 1,170 (6,354)
Balance at June 30 $ 5,344 16,531
Six Months
Balance at January 1 $13,502 24,757
Translation adjustment for
the six-month period (8,158) (8,226)
Balance at June 30 $ 5,344 16,531
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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 second quarter and first six months of 1995
exceeded the respective periods last year by 11.3% and 9.9%,
respectively. Increases are due to exchange rate translation to a
weaker U.S. dollar, higher volume overseas and some selected
selling price increases.
Investment and Other Interest Income
Investment and Other Interest Income for the second quarter and
first six months of 1995 increased by 61% and 42% respectively when
compared with the same periods in 1994. The increases, primarily
in the U.S., 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 1995
increased by 12.0% and 11.8% respectively, compared with the same
periods last year. The increases were primarily due to higher
international shipment volume and translation noted above as well
as higher product costs in 1995.
The Company's consolidated gross profit percentages for the second
quarter and the first half of 1995 and 1994 were:
1995 1994
Second Quarter 55.8% 56.1%
First Half 55.7% 56.5%
Selling, Distribution, and General Administrative
The selling, distribution, and general administrative expenses for
the second quarter and the first six months of 1995 exceeded the
same periods last year by 10.4% and 8.6%, respectively. These
increases were primarily due to higher advertising, marketing and
selling expenses 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 second quarter and first half of
1995 and 1994 are shown below:
1995 1994
Second quarter 36.9% 35.5%
First half 36.1% 35.8%
Net Earnings
Consolidated net earnings totaled $63.9 million or $.55 per share
for the second quarter of 1995 - a 9.5% increase of $5.5 million or
$.05 per share from the second quarter of 1994.
Total net earnings for the first half of 1995 were $119.2 million,
a decrease of $15.1 million or 11%. On a per share basis, earnings
were $1.03, a decrease of $.12 or 10%. 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 net
earnings for the first six months of 1994 by an after-tax amount of
$24.8 million or $.21 per share. Excluding the nonrecurring
Singapore gain, earnings in 1995 increased $9.7 million or 9% and
$.09 per share or 10% over 1994.
LIQUIDITY AND CAPITAL RESOURCES
At June 30, 1995, the Company's cash and cash equivalents and
short-term investments totaled $343.7 million compared to $230.2
million at December 31, 1994 - an increase of $113.5 million. The
ratio of current assets to current liabilities (current ratio) at
June 30, 1995 was 2.64 to 1 compared to 3.0 to 1 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. Loans totaling
$52,000,000 were initiated with Bank of America on March 29, 1995
as part of an overall tax plan. As of June 30, 1995 the loans plus
accrued interest totaled $52,876,000. On July 7, 1995, these loans
were repaid.
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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 the 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 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 was the
average closing price of the Company's Common Stock on the New
York Stock Exchange during each respective quarter.
Under the resolutions and agreements, the Company acquired and
distributed stock in the first half of 1995 as follows:
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Aggregate Shares
Shares Purchase Shares in
Period Acquired Price Distributed Treasury
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1st Quarter 170,311 $ 7,742,239 40,100 130,211
2nd Quarter 87,831 $ 3,935,652 5,903 81,928
Total-1995 258,142 $11,677,891 46,003 212,139
Treasury shares held
at 12/31/94 192,233
Total Treasury shares
at 6/30/95 404,372
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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, 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 August 14, 1995
[ARTICLE] 5
[MULTIPLIER] 1,000
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<S> <C>
[PERIOD-TYPE] 6-MOS
[FISCAL-YEAR-END] DEC-31-1995
[PERIOD-START] JAN-01-1995
[PERIOD-END] JUN-30-1995
[CASH] 233,922
[SECURITIES] 125,641
[RECEIVABLES] 201,572
[ALLOWANCES] 7,371
[INVENTORY] 201,885
[CURRENT-ASSETS] 773,492
[PP&E] 681,265
[DEPRECIATION] 367,682
[TOTAL-ASSETS] 1,156,432
[CURRENT-LIABILITIES] 293,164
[BONDS] 0
[COMMON] 15,520
[PREFERRED-MANDATORY] 0
[PREFERRED] 0
[OTHER-SE] 759,029
[TOTAL-LIABILITY-AND-EQUITY] 1,156,432
[SALES] 880,807
[TOTAL-REVENUES] 888,354
[CGS] 389,837
[TOTAL-COSTS] 701,989
[OTHER-EXPENSES] 0
[LOSS-PROVISION] 0
[INTEREST-EXPENSE] 1,353
[INCOME-PRETAX] 186,365
[INCOME-TAX] 67,193
[INCOME-CONTINUING] 119,172
[DISCONTINUED] 0
[EXTRAORDINARY] 0
[CHANGES] 0
[NET-INCOME] 119,172
[EPS-PRIMARY] 1.03
[EPS-DILUTED] 1.03
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