<PAGE> 1
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended Commission File Number
October 30, 1994 1-3822
[CAMPBELL SOUP COMPANY LOGO]
NEW JERSEY 21-0419870
State of Incorporation I.R.S. Employer Identification No.
CAMPBELL PLACE
CAMDEN, NEW JERSEY 08103-1799
Principal Executive Offices
TELEPHONE NUMBER: (609) 342-4800
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 .
------
THERE WERE 248,714,023 SHARES OF CAPITAL STOCK OUTSTANDING AS OF
DECEMBER 1, 1994.
THIS FORM 10-Q CONSISTS OF A TOTAL OF 13 PAGES, INCLUDING EXHIBITS.
AN INDEX TO EXHIBITS IS ON PAGE 12.
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PART I. FINANCIAL INFORMATION
CAMPBELL SOUP COMPANY CONSOLIDATED
STATEMENTS OF EARNINGS
(unaudited)
(million dollars except per share amounts)
<TABLE>
<CAPTION>
Three Months Ended
---------------------------------
OCTOBER October
30, 1994 31, 1993
--------- ----------
<S> <C> <C>
Net sales $1,864 $1,763
- -----------------------------------------------------------------------------------
Costs and expenses
Cost of products sold 1,088 1,058
Marketing and selling expenses 339 320
Administrative expenses 78 73
Research and development expenses 19 18
Other expense 17 14
- -----------------------------------------------------------------------------------
Total costs and expenses 1,541 1,483
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Earnings before interest and taxes 323 280
Interest, net 26 19
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Earnings before taxes 297 261
Taxes on earnings 100 95
- -----------------------------------------------------------------------------------
Net earnings $ 197 $ 166
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Per share
Net earnings $.79 $.66
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Dividends $.28 $.25
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Weighted average shares outstanding 249 251
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</TABLE>
(d) Divestiture and Restructuring Program
On January 28, 1993, the company's Board of Directors approved a divestiture
and restructuring program which specifically identified six manufacturing
plants to be closed and fourteen businesses to be sold. At the time of the
Board's approval, charges of $353 ($300 after tax or $1.19 per share) were
recorded for the estimated loss on disposition of plant assets, cost of
closing each plant and loss on each business divestiture. During the first
quarter of 1995, one business was sold. A summary of the original reserve
and charges through October 30, 1994 is as follows:
<TABLE>
<CAPTION>
Original Balance BALANCE
Reserve Charges 7/31/94 Charges 10/30/94
-------- ------- ------- ------- --------
<S> <C> <C> <C> <C> <C>
Loss on disposal of assets $275 $(145) $130 $(2) $128
Severance and benefits 52 (28) 24 (3) 21
Other 26 (10) 16 -- $16
- ----------------------------------------------------------------------------------------------
Total $353 $(183) $170 $(5) $165
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Current $153 $170 $165
Non-current 200 -- --
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Total $353 $170 $165
==============================================================================================
</TABLE>
See Notes To Financial Statements
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<PAGE> 3
CAMPBELL SOUP COMPANY CONSOLIDATED
BALANCE SHEETS
(unaudited)
(million dollars)
<TABLE>
<CAPTION>
OCTOBER July
30,1994 31, 1994
------- --------
<S> <C> <C>
Current assets
Cash and cash equivalents $ 88 $ 94
Other temporary investments, at cost
which approximates market 14 2
Accounts receivable 783 578
Inventories 888 786
Prepaid expenses 157 141
- ----------------------------------------------------------------------------------------
Total current assets 1,930 1,601
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Plant assets, net of depreciation 2,462 2,401
Intangible assets, net of amortization 681 582
Other assets 456 408
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Total assets $5,529 $4,992
========================================================================================
Current liabilities
Notes payable $ 644 $ 434
Payable to suppliers and others 491 473
Accrued liabilities 626 570
Dividend payable 71 71
Accrued income taxes 169 117
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Total current liabilities 2,001 1,665
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Long-term debt 574 560
Nonpension postretirement benefits 411 402
Other liabilities, including deferred
income taxes of $217 and $211 388 376
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Total liabilities 3,374 3,003
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Shareowners' equity
Preferred stock; authorized 40 shares;
none issued - -
Capital stock, $.075 par value; authorized
280 shares; issued 271 shares 20 20
Capital surplus 159 155
Earnings retained in the business 2,487 2,359
Capital stock in treasury, at cost (555) (559)
Cumulative translation adjustments 44 14
- ----------------------------------------------------------------------------------------
Total shareowners' equity 2,155 1,989
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Total liabilities and shareowners' equity $5,529 $4,992
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</TABLE>
See Notes to Financial Statements
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<PAGE> 4
CAMPBELL SOUP COMPANY CONSOLIDATED
STATEMENTS OF CASH FLOWS
(unaudited)
(million dollars)
<TABLE>
<CAPTION>
Three Months Ended
------------------------------
OCTOBER October
30, 1994 31, 1993
-------- ----------
<S> <C> <C>
Cash flows from operating activities:
Net earnings $197 $166
Non-cash charges:
Depreciation and amortization 63 61
Deferred taxes - 3
Other 24 18
Net change in accounts receivable (188) (161)
Net change in inventories (94) (121)
Net change in other current assets and liabilities 88 37
- --------------------------------------------------------------------------------------------------
Net cash provided by operating activities 90 3
- --------------------------------------------------------------------------------------------------
Cash flows from investing activities:
Purchases of plant assets (60) (83)
Sales of plant assets 3 7
Businesses acquired (177) (8)
Sales of businesses 3 -
Net change in other assets 4 13
Net change in other temporary investments (12) 2
- --------------------------------------------------------------------------------------------------
Net cash used in investing activities (239) (69)
- --------------------------------------------------------------------------------------------------
Cash flows from financing activities:
Issuance of long-term debt 3 100
Reductions in long-term debt (4) (101)
Net change in borrowings with less than three-month
maturities 149 170
Other short-term borrowings 55 (19)
Dividends paid (70) (63)
Treasury stock purchased - (41)
Treasury stock issued 5 3
- --------------------------------------------------------------------------------------------------
Net cash provided by financing activities 138 49
- --------------------------------------------------------------------------------------------------
Effect of exchange rate changes on cash 5 2
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Net change in cash and cash equivalents (6) (15)
Cash and cash equivalents - beginning of period 94 63
- --------------------------------------------------------------------------------------------------
Cash and cash equivalents - end of period $ 88 $ 48
==================================================================================================
</TABLE>
See Notes to Financial Statements
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<PAGE> 5
CAMPBELL SOUP COMPANY CONSOLIDATED
STATEMENTS OF CHANGES IN SHAREOWNERS' EQUITY
(unaudited)
(million dollars)
<TABLE>
<CAPTION>
Earnings Capital
Retained Stock Cumulative Total
Preferred Capital Capital in the in Translation Shareowners'
Stock Stock Surplus Business Treasury Adjustments Equity
--------- ------- ------- -------- --------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Balance at August 1, 1993 $ - $20 $149 $2,002 $(428) $(39) $1,704
Net earnings 166 166
Cash dividends ($.25 per share) (62) (62)
Treasury stock purchased (41) (41)
Treasury stock issued under Management
incentive and Stock option plans (6) 12 6
Translation adjustments (14) (14)
- -----------------------------------------------------------------------------------------------------------------------------------
Balance at October 31, 1993 $ - $20 $143 $2,106 $(457) $(53) $1,759
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BALANCE AT JULY 31, 1994 $ - $20 $155 $2,359 $(559) $14 $1,989
NET EARNINGS 197 197
CASH DIVIDENDS ($.28 PER SHARE) (69) (69)
TREASURY STOCK PURCHASED (1) (1)
TREASURY STOCK ISSUED UNDER MANAGEMENT
INCENTIVE AND STOCK OPTION PLANS 4 5 9
TRANSLATION ADJUSTMENTS 30 30
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BALANCE AT OCTOBER 30, 1994 $ - $20 $159 $2,487 $(555) $44 $2,155
===================================================================================================================================
</TABLE>
<TABLE>
<CAPTION>
Changes in Number of Shares (unaudited)
(thousands of shares)
- -----------------------------------------------------------------------------------------------------------------------------------
In
Issued Outstanding Treasury
------ ----------- --------
<S> <C> <C> <C>
Balance at August 1, 1993 271,245 251,706 19,539
Treasury stock purchased (1,139) 1,139
Treasury stock issued under Management incentive and Stock option plans 368 (368)
- -----------------------------------------------------------------------------------------------------------------------------------
Balance at October 31, 1993 271,245 250,935 20,310
===================================================================================================================================
BALANCE AT JULY 31, 1994 271,245 248,319 22,926
TREASURY STOCK PURCHASED (12) 12
TREASURY STOCK ISSUED UNDER MANAGEMENT INCENTIVE AND STOCK OPTION PLANS 197 (197)
- -----------------------------------------------------------------------------------------------------------------------------------
BALANCE AT OCTOBER 30, 1994 271,245 248,504 22,741
===================================================================================================================================
</TABLE>
See Notes to Financial Statements
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<PAGE> 6
CAMPBELL SOUP COMPANY CONSOLIDATED
NOTES TO FINANCIAL STATEMENTS
(unaudited)
(millions)
(a) The financial statements reflect all adjustments which are, in the opinion
of management, necessary for a fair presentation of the results for the
indicated periods. All such adjustments are of a normal recurring nature.
(b) Net earnings per share are based on the weighted average shares
outstanding during the applicable periods. The potential dilution from
the exercise of stock options is not material.
(c) Inventories
<TABLE>
<CAPTION>
OCTOBER July
30, 1994 31, 1994
-------- --------
<S> <C> <C>
Raw materials, containers and supplies $392 $368
Finished products 564 483
- ------------------------------------------------------------------------------------
956 851
Less - Adjustment of certain inventories
to LIFO basis 68 65
- ------------------------------------------------------------------------------------
$888 $786
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</TABLE>
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<PAGE> 7
MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS
AND FINANCIAL CONDITION
CAMPBELL SOUP COMPANY
RESULTS OF OPERATIONS
OVERVIEW
Campbell had record sales and earnings for the first quarter ended October 30.
Net sales of $1.86 billion were up 6% over the $1.76 billion for the similar
period last year, and sales of ongoing businesses were up 7%. Earnings per
share increased 20% to 79 cents, up from 66 cents last year. Net earnings were
$197 million, up 19% from $166 million last year. U.S. businesses performed
strongly, and international businesses continued on a fast pace. Worldwide
soup sales were up over 5%.
RESULTS BY DIVISION
Results by division for fiscal 1994 have been restated to conform with new
operating groups.
FIRST QUARTER
U.S.A. - U.S. sales for the quarter were $1.12 billion versus $1.07 billion for
the comparable period last year. Sales of ongoing businesses were up 6%.
Operating earnings climbed 16% to $259 million, a $36 million increase over
last year.
Soup shipments to the trade declined 2.5%, as the U.S. soup unit continued its
program, begun in the second quarter of fiscal 1994, to eliminate costly peaks
in its manufacturing and shipping cycles. The "Ready-to-Serve" business,
however, saw volume growth led by strong performance in "Home Cookin'" and
"Healthy Request" soups.
Strong volume gains were achieved by a number of products, including "Swanson"
traditional frozen dinners, pot pies and canned poultry, "Great Starts"
breakfasts, "Prego" spaghetti sauce, "Franco-American" pasta, "V8" vegetable
juice and "Vlasic" pickles.
BAKERY & CONFECTIONERY - This division consists of "Pepperidge Farm" in the
U.S., "Delacre" in Europe, "Arnotts" in Australia, "Godiva" worldwide and the
"Lamy-Lutti" confectionery business in Europe.
Bakery & Confectionery sales increased 6% to $417 million from $393 million in
the first quarter of last year, primarily from favorable exchange rates.
Earnings increased 15% to $46 million from $40 million last year, with Arnotts
the major contributor to the improvement.
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<PAGE> 8
Strong volume gains were achieved by "Godiva" chocolates in the U.S. and Japan.
"Pepperidge Farm" biscuits and frozen foods units also reported substantial
increases.
INTERNATIONAL GROCERY - International Grocery consists of soup, grocery and
frozen businesses in Canada, Mexico, Argentina, Europe, Australia and Asia.
The division reported sales of $341 million, an 11% increase from continuing
businesses led by very strong soup sales. Operating earnings rose 16% to $32
million, with major increases in soup worldwide and businesses in Argentina and
Continental Europe.
STATEMENTS OF EARNINGS
Net sales increased 6% over the prior year, with sales of ongoing businesses up
7%, driven by across-the-board sales increases in North America, Europe,
Asia/Pacific and Argentina.
Gross margins improved 1.6 percentage points to 41.6% compared to the first
quarter of the prior year. Gross margin improvements resulted primarily from
higher selling prices.
Marketing and selling expenses increased 6% in the first quarter, compared to
the first quarter of the prior year, and remained at 18.2% of sales, as the
company focused on stabilizing trade spending.
Administrative expenses increased slightly to 4.2% of sales. The increase
in interest expense results primarily from the net interest cost of a
securities lending arrangement involving U.S. Treasury notes maturing in fiscal
1995. The maximum cost of this arrangement is $11 million, of which $7 million
has been accrued. Because of recent movements in interest rates, additional
charges are not anticipated.
The effective tax rate was 33.7% compared to 36.4% in the first quarter of
fiscal 1994. The company expects its effective rate for the full fiscal 1995
year to approximate the first quarter rate due to tax planning strategies,
including utilization of tax loss carryforwards.
LIQUIDITY AND CAPITAL RESOURCES
Campbell operates in a highly seasonal business and traditionally is a net user
of cash in the first quarter, as inventories grow from the fall harvest and
receivables increase from sales going into the "soup season". In the first
quarter of 1995, however, increased earnings and tighter management of working
capital contributed $90 million in operating cash flow as compared to $3
million in the first quarter of 1994.
Capital expenditures were $60 million in 1995, a decrease of $23 million from
the prior year, due to heavier 1994 spending on cost savings projects and
consolidation of frozen food plants. Capital expenditures are projected to
reach $450 million in 1995.
The company acquired Fresh Start Bakeries, a food service baking concern with
operations in the U.S., Europe and South America; Stratford- upon-Avon Foods, a
canned fruit and vegetable company in England; and Kohi Biscuits in New
Zealand. The company also acquired an additional 3% interest in Arnotts,
boosting its share ownership to 61%.
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<PAGE> 9
On November 25, 1994, the company agreed to acquire Pace Foods, Ltd., the
world's leading producer and marketer of Mexican sauces, for $1.1 billion. The
acquisition is contingent on customary regulatory clearances and is expected to
be completed in January 1995. The acquisition will be financed through a
combination of cash flow from operations, short-term borrowings and long-term
debt.
Short-term debt increased by $204 million in 1995 to finance acquisitions and
by $151 million in 1994.
There were no significant repurchases of common stock for the treasury in 1995,
compared to repurchases of 1.1 million shares at a cost of $41 million in 1994.
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<PAGE> 10
PART II
ITEM 1. LEGAL PROCEEDINGS
In management's opinion, there are no pending claims or litigation, the outcome
of which would have a material effect on the consolidated financial position of
the company. Campbell has received a notice of violation from the United
States Environmental Protection Agency relating to certain air emission permits
at its Sacramento, CA facility. Campbell is disputing the alleged violations.
The company has been named as a potentially responsible party in a number of
proceedings brought under the Comprehensive Environmental Response,
Compensation and Liability Act, commonly known as Superfund. The ultimate
impact of these proceedings cannot be predicted at this time due to the large
number of other potentially responsible parties, and the speculative nature of
clean-up cost estimates, but it is not expected to be material either
individually or in the aggregate.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
a. Exhibits
No.
4 There is no instrument with respect to long-term debt of the
company that involves indebtedness or securities authorized
thereunder exceeding 10 percent of the total assets of the
company and its subsidiaries on a consolidated basis. The
company agrees to file a copy of any instrument or agreement
defining the rights of holders of long-term debt of the company
upon request of the Securities and Exchange Commission.
27 Financial Data Schedule
b. Reports on Form 8-K
There were no reports on Form 8-K filed by Campbell during the
quarter for which this report is filed.
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<PAGE> 11
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.
CAMPBELL SOUP COMPANY
Date: December 14, 1994 By:/s/JOHN M. COLEMAN
------------------------------------
John M. Coleman, Senior Vice President -
Law and Public Affairs
Date: December 14, 1994 By:/s/FRANK E. WEISE, III
------------------------------------
Frank E. Weise, III
Senior Vice President - Finance
and Chief Financial Officer
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<PAGE> 12
INDEX TO EXHIBITS
Exhibit Number Page
- -------------- ----
27 Financial Data Schedule 13
-12-
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000,000
<S> <C>
<PERIOD-TYPE> QTR-1
<FISCAL-YEAR-END> JUL-30-1995
<PERIOD-START> AUG-01-1994
<PERIOD-END> OCT-30-1994
<EXCHANGE-RATE> 0
<CASH> 88
<SECURITIES> 14
<RECEIVABLES> 831
<ALLOWANCES> 48
<INVENTORY> 888
<CURRENT-ASSETS> 1,930
<PP&E> 3,987
<DEPRECIATION> 1,525
<TOTAL-ASSETS> 5,529
<CURRENT-LIABILITIES> 2,001
<BONDS> 574
<COMMON> 20
0
0
<OTHER-SE> 2,135
<TOTAL-LIABILITY-AND-EQUITY> 5,529
<SALES> 1,864
<TOTAL-REVENUES> 1,864
<CGS> 1,088
<TOTAL-COSTS> 1,088
<OTHER-EXPENSES> 358
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 27
<INCOME-PRETAX> 297
<INCOME-TAX> 100
<INCOME-CONTINUING> 197
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 197
<EPS-PRIMARY> .79
<EPS-DILUTED> .79
</TABLE>
