<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
<TABLE>
<S> <C>
For the Quarterly Period Ended Commission File Number
April 30, 1995 1-3822
</TABLE>
CAMPBELL SOUP COMPANY
<TABLE>
<S> <C>
NEW JERSEY 21-0419870
State of Incorporation I.R.S. Employer Identification No.
</TABLE>
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 249,613,033 SHARES OF CAPITAL STOCK OUTSTANDING AS OF
JUNE 1, 1995.
THIS FORM 10-Q CONSISTS OF A TOTAL OF 14 PAGES. AN INDEX TO EXHIBITS IS
ON PAGE 13.
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<PAGE> 2
PART I. FINANCIAL INFORMATION
CAMPBELL SOUP COMPANY CONSOLIDATED
STATEMENTS OF EARNINGS
(unaudited)
(million dollars except per share amounts)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
-------------------------- ----------------------
APRIL May APRIL May
30, 1995 1, 1994 30, 1995 1, 1994
--------- ---------- -------- --------
<S> <C> <C> <C> <C>
Net sales $1,744 $1,568 $5,648 $5,225
- -----------------------------------------------------------------------------------------------------------------------
Costs and expenses
Cost of products sold 1,045 946 3,308 3,108
Marketing and selling expenses 357 321 1,082 991
Administrative expenses 80 74 240 226
Research and development expenses 20 20 62 56
Other expense 20 9 48 36
- -----------------------------------------------------------------------------------------------------------------------
Total costs and expenses 1,522 1,370 4,740 4,417
- -----------------------------------------------------------------------------------------------------------------------
Earnings before interest and taxes 222 198 908 808
Interest, net 32 15 72 48
- -----------------------------------------------------------------------------------------------------------------------
Earnings before taxes 190 183 836 760
Taxes on earnings 63 64 281 272
- -----------------------------------------------------------------------------------------------------------------------
Net earnings $ 127 $ 119 $ 555 $ 488
=======================================================================================================================
Per share
Net earnings $.51 $.47 $2.23 $1.94
=======================================================================================================================
Dividends $.31 $.28 $.90 $.81
=======================================================================================================================
Weighted average shares outstanding 249 251 249 251
=======================================================================================================================
</TABLE>
See Notes To Financial Statements
-2-
<PAGE> 3
CAMPBELL SOUP COMPANY CONSOLIDATED
BALANCE SHEETS
(unaudited)
(million dollars)
<TABLE>
<CAPTION>
APRIL July
30, 1995 31, 1994
-------- --------
<S> <C> <C>
Current assets
Cash and cash equivalents $ 134 $ 94
Other temporary investments, at cost
which approximates market 25 2
Accounts receivable 676 578
Inventories 697 786
Prepaid expenses 152 141
- ----------------------------------------------------------------------------------------------------------
Total current assets 1,684 1,601
- ----------------------------------------------------------------------------------------------------------
Plant assets, net of depreciation 2,520 2,401
Intangible assets, net of amortization 1,732 582
Other assets 437 408
- ----------------------------------------------------------------------------------------------------------
Total assets $6,373 $4,992
==========================================================================================================
Current liabilities
Notes payable $1,116 $ 434
Payable to suppliers and others 409 473
Accrued liabilities 618 570
Dividend payable - 71
Accrued income taxes 136 117
- ----------------------------------------------------------------------------------------------------------
Total current liabilities 2,279 1,665
- ----------------------------------------------------------------------------------------------------------
Long-term debt 867 560
Nonpension postretirement benefits 431 402
Other liabilities, including deferred
income taxes of $231 and $211 395 376
- ----------------------------------------------------------------------------------------------------------
Total liabilities 3,972 3,003
- ----------------------------------------------------------------------------------------------------------
Shareowners' equity
Preferred stock; authorized 40 shares;
none issued - -
Capital stock, $.075 par value; authorized
280 shares; issued 271 shares 20 20
Capital surplus 163 155
Earnings retained in the business 2,690 2,359
Capital stock in treasury, at cost (530) (559)
Cumulative translation adjustments 58 14
- ----------------------------------------------------------------------------------------------------------
Total shareowners' equity 2,401 1,989
- ----------------------------------------------------------------------------------------------------------
Total liabilities and shareowners' equity $6,373 $4,992
==========================================================================================================
</TABLE>
See Notes to Financial Statements
-3-
<PAGE> 4
CAMPBELL SOUP COMPANY CONSOLIDATED
STATEMENTS OF CASH FLOWS
(unaudited)
(million dollars)
<TABLE>
<CAPTION>
Nine Months Ended
------------------------------
APRIL May
30, 1995 1, 1994
-------- ----------
<S> <C> <C>
Cash flows from operating activities:
Net earnings $555 $488
Non-cash charges:
Depreciation and amortization 210 193
Deferred taxes 10 8
Other 55 41
Net change in accounts receivable (63) 35
Net change in inventories 122 55
Net change in other current assets and liabilities (71) (125)
- -----------------------------------------------------------------------------------------------------------------
Net cash provided by operating activities 818 695
- -----------------------------------------------------------------------------------------------------------------
Cash flows from investing activities:
Purchases of plant assets (229) (278)
Sales of plant assets 59 33
Businesses acquired (1,257) (8)
Sales of businesses 11 23
Net change in other assets (38) (57)
Net change in other temporary investments (21) 7
- -----------------------------------------------------------------------------------------------------------------
Net cash used in investing activities (1,475) (280)
- -----------------------------------------------------------------------------------------------------------------
Cash flows from financing activities:
Issuance of long-term debt 305 111
Reductions in long-term debt (20) (109)
Net change in borrowings with less than three-month
maturities 916 (37)
Other short-term borrowings (238) (57)
Dividends paid (295) (265)
Treasury stock purchased (1) (46)
Treasury stock issued 30 13
- -----------------------------------------------------------------------------------------------------------------
Net cash provided by (used in) financing activities 697 (390)
- -----------------------------------------------------------------------------------------------------------------
Effect of exchange rate changes on cash - (2)
- -----------------------------------------------------------------------------------------------------------------
Net change in cash and cash equivalents 40 23
Cash and cash equivalents - beginning of period 94 63
- -----------------------------------------------------------------------------------------------------------------
Cash and cash equivalents - end of period $134 $ 86
=================================================================================================================
</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>
Capital
Earnings 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) $1,704
Net earnings 488 488
Cash dividends ($.81 per share) (202) (202)
Treasury stock purchased (46) (46)
Treasury stock issued under Management
incentive and Stock option plans 8 12 20
Translation adjustments 18 18
- -----------------------------------------------------------------------------------------------------------------------------------
Balance at May 1, 1994 $ - $20 $157 $2,288 $(462) $(21) $1,982
===================================================================================================================================
BALANCE AT JULY 31, 1994 $ - $20 $155 $2,359 $(559) $ 14 $1,989
NET EARNINGS 555 555
CASH DIVIDENDS ($.90 PER SHARE) (224) (224)
TREASURY STOCK PURCHASED (1) (1)
TREASURY STOCK ISSUED UNDER MANAGEMENT
INCENTIVE AND STOCK OPTION PLANS 8 30 38
TRANSLATION ADJUSTMENTS 44 44
- -----------------------------------------------------------------------------------------------------------------------------------
BALANCE AT APRIL 30, 1995 $ - $20 $163 $2,690 $(530) $ 58 $2,401
===================================================================================================================================
</TABLE>
Changes in Number of Shares (unaudited)
(thousands of shares)
<TABLE>
<CAPTION>
Issued Outstanding In Treasury
------ ----------- ------------
<S> <C> <C> <C>
Balance at August 1, 1993 271,245 251,706 19,539
Treasury stock purchased (1,268) 1,268
Treasury stock issued under Management
incentive and Stock option plans 514 (514)
- ------------------------------------------------------------------------------------------------------------------
Balance at May 1, 1994 271,245 250,952 20,293
==================================================================================================================
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 1,269 (1,269)
- ------------------------------------------------------------------------------------------------------------------
BALANCE AT APRIL 30, 1995 271,245 249,576 21,669
==================================================================================================================
</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>
APRIL July
30, 1995 31, 1994
-------- --------
<S> <C> <C>
Raw materials, containers and supplies $297 $368
Finished products 474 483
- --------------------------------------------------------------------------------------------------------
771 851
Less - Adjustment of certain inventories
to LIFO basis 74 65
- --------------------------------------------------------------------------------------------------------
$697 $786
========================================================================================================
</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 third quarter, two additional businesses were sold, bringing the
total businesses sold to four in this fiscal year. A summary of the
original reserves and charges through April 30, 1995 follows:
<TABLE>
<CAPTION>
Original Balance BALANCE
Reserves Charges 7/31/94 Charges 4/30/95
--------- ------- ------- ------- --------
<S> <C> <C> <C> <C> <C>
Loss on disposal of assets $275 $(145) $130 $(23) $107
Severance and benefits 52 (28) 24 (22) 2
Other 26 (10) 16 (1) 15
- -------------------------------------------------------------------------------------------------------------
Total $353 $(183) $170 $(46) $124
=============================================================================================================
Current $153 $170 $124
Non-current 200 - -
- -------------------------------------------------------------------------------------------------------------
Total $353 $170 $124
=============================================================================================================
</TABLE>
(e) Acquisitions
Effective January 30, 1995 the company acquired Pace Foods, Ltd., the
world's largest producer and marketer of Mexican sauces, for $1.076
billion. The acquisition was accounted for as a purchase transaction and
the results of operations after January 30, 1995 are included in
Campbell's financial statements. The purchase price was allocated to
assets acquired and liabilities assumed based upon preliminary fair value
estimates, and resulted in the recording of intangible asssets,
principally goodwill, of approximately $1 billion. Intangible assets are
amortized on a straight-line basis over periods not exceeding 40 years.
-6-
<PAGE> 7
MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS
AND FINANCIAL CONDITION
CAMPBELL SOUP COMPANY
RESULTS OF OPERATIONS
OVERVIEW
Campbell achieved record sales and earnings for the third quarter and nine
months ended April 30, 1995.
Net sales for the quarter were $1.74 billion, up 11% from the comparable period
last year. Earnings per share, after 4 cents per share dilution from
acquisitions, increased 9% to 51 cents, up from 47 cents last year. Net
earnings rose 7% to $127 million from $119 million a year ago. Acquisitions
were positive contributors to net sales and operating earnings, and earnings
growth was anchored by strong results from leading U.S. brands, especially
soup.
Sales for the nine months increased 8% to $5.65 billion, versus $5.23 billion
for the comparable period last year. Earnings per share for the nine months
increased 15% to $2.23, and net earnings increased 14% to $555 million.
RESULTS BY DIVISION
THIRD QUARTER
U.S.A. - U.S. sales for the quarter were $1.02 billion versus $913 million last
year. Operating earnings climbed 14% to $171 million.
The Pace Foods and Fresh Start acquisitions contributed 60% of the U.S. sales
growth and soup volume increased 3%, as the Continuous Product Replenishment
program better matched factory shipments to consumer purchases. Ready-to-Serve
soups led the volume gain driven by double-digit increases in "Healthy
Request", "Home Cookin'" and "Swanson" broth.
Excellent consumer reception brought strong growth to several "Swanson" brand
products including canned poultry, "Hungry-Man" dinners and new "Mac & More"
single serving dishes. New products such as Vlasic's "Sandwich Stackers"
pickles, "Franco-American" pasta in the shape of Disney licensed characters,
and a new size of "Campbell's" Pork & Beans drove volume growth in their
categories.
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<PAGE> 8
BAKERY & CONFECTIONERY - This division consists of Pepperidge Farm in the U.S.,
Delacre in Europe, Arnotts Limited in Australia and Asia, Godiva Chocolatier
worldwide and the Lamy Lutti confectionery businesses in Europe.
Bakery & Confectionery also achieved record third quarter sales, increasing 9%
to $379 million. Operating earnings rose 7% to $30 million.
"Goldfish" crackers and "Pepperidge Farm" frozen garlic breads continued their
strong sales growth. Godiva Chocolatier had excellent Valentine's Day sales
with strong double-digit sales growth in the U.S., Europe and Japan, and Lamy
Lutti also experienced strong volume growth.
INTERNATIONAL GROCERY - International Grocery consists of soup, grocery and
frozen businesses in Canada, Mexico, Argentina, Europe, Australia and Asia.
This division reported sales of $356 million for the third quarter, a 12%
increase over last year. Sales were reduced slightly by the divestiture of two
small businesses in Italy. Operating earnings rose 5% to $31 million. The
devaluation of the Mexican peso reduced earnings by $2 million in the quarter.
Soup volume outside the United States grew 10% during the quarter, with major
gains in Canada, Australia and Asia. Sales also benefitted from the
acquisition of Stratford-upon-Avon in the United Kingdom as well as growth of
the beef business in Argentina.
NINE MONTHS
U.S.A. - U.S. sales for the nine months were $3.36 billion versus $3.14 billion
last year. Operating earnings increased 13% to $702 million.
Soup volume was down 1% due to unseasonably warm weather in the important
second and third quarters. The "Healthy Request" and "Home Cookin'" lines
continued to show strong growth.
Other strong sales performances came from "Vlasic" pickles; "Swanson" brand
products including "Hungry-Man" dinners, canned poultry and broth; "Great
Starts" breakfasts; "Prego" spaghetti sauce; "Franco-American" pasta; "V8"
juice and U.S. Food Service.
BAKERY & CONFECTIONERY - Bakery & Confectionery sales grew 8% to $1.24 billion
from $1.15 billion in the first nine months of last year. Operating earnings
improved 11% to $139 million.
Sales improvement was driven by new varieties of Pepperidge Farm distinctive
cookies and strength in "Goldfish" crackers and "Pepperidge Farm" frozen garlic
bread. Godiva Chocolatier enjoyed excellent Christmas and Valentine's Day
seasons in the U.S., Europe and Japan.
-8-
<PAGE> 9
INTERNATIONAL GROCERY - International Grocery reported sales of $1.08 billion
in the first nine months, an 11% increase over last year. Operating earnings
rose 11% to $103 million.
Soup volume outside the U.S. was up 11% for the first nine months of fiscal
1995 with strong gains in Canada, Mexico, Asia and exports from the United
Kingdom. Argentina continued its strong growth in the export and domestic beef
businesses.
STATEMENTS OF EARNINGS
Net sales increased 11% for the third quarter and 8% for the nine months,
compared to the same periods in the prior year. Sales gains were strong across
all divisions. Worldwide soup sales for the nine months grew 4.5% with net
sales outside the U.S. contributing strong growth of 11%. Acquisitions
contributed 5.5% of the growth for the third quarter and 2.5% for the nine
months.
Gross margins improved .4 percentage points to 40.1% in the third quarter and
.9 percentage points to 41.4% for the nine-month period. These improvements
resulted principally from higher selling prices and manufacturing efficiencies.
Marketing and selling expense as a percent of sales remained flat compared to
the prior year at 20.4% and 19.1% for the third quarter and nine months,
respectively. These expenses increased 11.4% in the third quarter and 8.5% for
the nine months, compared to the prior year, as a result of spending on
Ready-to-Serve soups and in support of the launch of Vlasic's new "Stackers"
line.
Interest expense for the nine months increased due principally to financing
costs associated with acquisitions.
The effective tax rate of 33.6% reflects the benefit of tax planning
strategies, including utilization of tax loss carryforwards.
LIQUIDITY AND CAPITAL RESOURCES
Campbell's cash flows from operating activities are highly seasonal. As a
result of earnings improvements and increased attention to working capital
management, the company generated cash from operations of $818 million in the
nine months of 1995, up $123 million from 1994. An increase in accounts
receivable of $63 million in 1995 was the result of higher sales. Continued
focus on inventory management provided $122 million of cash in the nine months
of 1995, up $67 million from 1994.
Capital expenditures were $229 million in 1995, down $49 million from the prior
year, as the company completed several cost saving and restructuring programs
in the prior year. Capital expenditures are not expected to exceed $400
million in 1995. Construction of a new $150 million world-class factory by
Arnotts began in the third quarter with completion planned for 1997.
-9-
<PAGE> 10
During the first nine months of fiscal 1995, the company acquired Pace Foods,
the world's leading producer and marketer of Mexican sauces; 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; Kohi Biscuits in New Zealand; Diet Care Puree, a Canadian food
service company targeting institutional food for the elderly; and Greenfield
Foods, a U.S. based baking operation specializing in low-fat cakes and cookies.
The company also acquired an additional 6% interest in Arnotts Limited,
boosting its share ownership in the Australian biscuit company to 64%.
These acquisitions (approximately $1.3 billion) were funded through cash
generated from operations and commercial paper borrowings of different
maturities and interest rates. During the third quarter, a portion of these
borrowings was replaced with a $300 million, 7.75% fixed rate two-year note due
in February 1997.
There were no significant repurchases of common stock for the treasury in
fiscal 1995, compared to repurchases of 1.3 million shares at a cost of $46
million in fiscal 1994. As a result of increases in the dividend rate,
year-to-date dividend payments increased $30 million to $295 million in 1995,
from $265 million for the first nine months of 1994.
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<PAGE> 11
PART II
ITEM 1. LEGAL PROCEEDINGS
As previously reported, 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
A Form 8-K, reporting Campbell's purchase on January 30, 1995, of
the assets and business of Pace Foods, Ltd., was filed with the
Securities and Exchange Commission on February 9, 1995.
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<PAGE> 12
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.
<TABLE>
<S> <C>
CAMPBELL SOUP COMPANY
Date: June 13, 1995 By:/s/JOHN M. COLEMAN
-------------------------------------------
John M. Coleman, Senior Vice President -
Law and Public Affairs
Date: June 13, 1995 By:/s/LEO J. GREANEY
---------------------------------------------
Leo J. Greaney
Vice President - Controller
(Chief Accounting Officer)
</TABLE>
-12-
<PAGE> 13
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit Number Page
- -------------- ----
<S> <C> <C>
27 Financial Data Schedule 14
</TABLE>
-13-
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> JUL-30-1995
<PERIOD-START> JAN-30-1995
<PERIOD-END> APR-30-1995
<CASH> 134
<SECURITIES> 25
<RECEIVABLES> 733
<ALLOWANCES> 56
<INVENTORY> 697
<CURRENT-ASSETS> 1,684
<PP&E> 4,158
<DEPRECIATION> 1,638
<TOTAL-ASSETS> 6,373
<CURRENT-LIABILITIES> 2,279
<BONDS> 867
<COMMON> 20
0
0
<OTHER-SE> 2,381
<TOTAL-LIABILITY-AND-EQUITY> 6,373
<SALES> 5,648
<TOTAL-REVENUES> 5,648
<CGS> 3,308
<TOTAL-COSTS> 3,308
<OTHER-EXPENSES> 1,144
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 79
<INCOME-PRETAX> 836
<INCOME-TAX> 281
<INCOME-CONTINUING> 555
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 555
<EPS-PRIMARY> $2.23
<EPS-DILUTED> $2.23
</TABLE>
