<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
April 28, 1996 1-3822
CAMPBELL SOUP COMPANY
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 248,226,166 SHARES OF CAPITAL STOCK OUTSTANDING AS OF JUNE
3, 1996.
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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<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 April* APRIL April*
28, 1996 30, 1995 28, 1996 30, 1995
--------- --------- --------- --------
<S> <C> <C> <C> <C>
Net sales $1,831 $1,737 $6,038 $5,624
- --------------------------------------------------------------------------------------------------------------------------------
Costs and expenses
Cost of products sold 1,061 1,042 3,449 3,301
Marketing and selling expenses 391 353 1,188 1,066
Administrative expenses 92 79 251 239
Research and development expenses 20 20 61 62
Other expense 21 21 66 48
- --------------------------------------------------------------------------------------------------------------------------------
Total costs and expenses 1,585 1,515 5,015 4,716
- --------------------------------------------------------------------------------------------------------------------------------
Earnings before interest and taxes 246 222 1,023 908
Interest, net 29 32 95 72
- --------------------------------------------------------------------------------------------------------------------------------
Earnings before taxes 217 190 928 836
Taxes on earnings 72 63 307 281
- --------------------------------------------------------------------------------------------------------------------------------
Net earnings $ 145 $ 127 $ 621 $ 555
================================================================================================================================
Per share
Net earnings $.58 $.51 $2.49 $2.23
================================================================================================================================
Dividends $.345 $.31 $1.00 $.90
================================================================================================================================
Weighted average shares outstanding 249 249 249 249
================================================================================================================================
</TABLE>
See Notes To Financial Statements
*Reclassified to conform to this year's presentation
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<PAGE> 3
CAMPBELL SOUP COMPANY CONSOLIDATED
BALANCE SHEETS
(unaudited)
(million dollars)
<TABLE>
<CAPTION>
APRIL July
28, 1996 30, 1995
-------- ---------
S> <C> <C>
Current assets
Cash and cash equivalents $ 57 $ 53
Accounts receivable 660 631
Inventories 718 755
Prepaid expenses 142 142
- ----------------------------------------------------------------------------------------------------------------
Total current assets 1,577 1,581
- ----------------------------------------------------------------------------------------------------------------
Plant assets, net of depreciation 2,618 2,584
Intangible assets, net of amortization 1,810 1,715
Other assets 489 435
- ----------------------------------------------------------------------------------------------------------------
Total assets $6,494 $6,315
================================================================================================================
Current liabilities
Notes payable $ 893 $ 865
Payable to suppliers and others 407 556
Accrued liabilities 611 545
Dividend payable 87 78
Accrued income taxes 148 120
- ----------------------------------------------------------------------------------------------------------------
Total current liabilities 2,146 2,164
- ----------------------------------------------------------------------------------------------------------------
Long-term debt 750 857
Nonpension postretirement benefits 463 434
Other liabilities, including deferred
income taxes of $230 and $235 394 392
- ----------------------------------------------------------------------------------------------------------------
Total liabilities 3,753 3,847
- ----------------------------------------------------------------------------------------------------------------
Shareowners' equity
Preferred stock; authorized 40 shares;
none issued - -
Capital stock, $.075 par value; authorized
280 shares; issued 271 shares 20 20
Capital surplus 214 165
Earnings retained in the business 3,127 2,755
Capital stock in treasury, at cost (676) (550)
Cumulative translation adjustments 56 78
- ----------------------------------------------------------------------------------------------------------------
Total shareowners' equity 2,741 2,468
- ----------------------------------------------------------------------------------------------------------------
Total liabilities and shareowners' equity $6,494 $6,315
================================================================================================================
</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>
Nine Months Ended
--------------------------------
APRIL April
28, 1996 30, 1995
-------- --------
<S> <C> <C>
Cash flows from operating activities:
Net earnings $621 $555
Non-cash charges to net earnings
Depreciation and amortization 241 210
Deferred taxes 5 10
Other, net 59 55
Changes in working capital
Accounts receivable (45) (63)
Inventories 20 122
Other current assets and liabilities (73) (71)
- -------------------------------------------------------------------------------------------------------------------------
Net cash provided by operating activities 828 818
- -------------------------------------------------------------------------------------------------------------------------
Cash flows from investing activities:
Purchases of plant assets (266) (229)
Sales of plant assets 29 59
Businesses acquired (149) (1,257)
Sales of businesses 45 11
Net change in other assets and liabilities (80) (38)
- -------------------------------------------------------------------------------------------------------------------------
Net cash used in investing activities (421) (1,454)
- -------------------------------------------------------------------------------------------------------------------------
Cash flows from financing activities:
Long-term borrowings 225 305
Repayments of long-term borrowings (33) (20)
Short-term borrowings 146 916
Repayments of short-term borrowings (419) (238)
Dividends paid (241) (295)
Treasury stock purchased (139) (1)
Treasury stock issued 53 30
- -------------------------------------------------------------------------------------------------------------------------
Net cash (used in) provided by financing activities (408) 697
- -------------------------------------------------------------------------------------------------------------------------
Effect of exchange rate changes on cash 5 2
- -------------------------------------------------------------------------------------------------------------------------
Net change in cash and cash equivalents 4 63
Cash and cash equivalents - beginning of period 53 96
- -------------------------------------------------------------------------------------------------------------------------
Cash and cash equivalents - end of period $ 57 $159
=========================================================================================================================
</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 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
===================================================================================================================================
BALANCE AT JULY 30, 1995 $ - $20 $165 $2,755 $(550) $78 $2,468
NET EARNINGS 621 621
CASH DIVIDENDS ($1.00 PER SHARE) (249) (249)
TREASURY STOCK PURCHASED (139) (139)
TREASURY STOCK ISSUED UNDER MANAGEMENT
INCENTIVE AND STOCK OPTION PLANS 49 13 62
TRANSLATION ADJUSTMENTS (22) (22)
- -----------------------------------------------------------------------------------------------------------------------------------
BALANCE AT APRIL 28, 1996 $ - $20 $214 $3,127 $(676) $56 $2,741
===================================================================================================================================
</TABLE>
Changes in Number of Shares (unaudited)
(thousands of shares)
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------
Issued Outstanding In Treasury
--------- ----------- -----------
<S> <C> <C> <C>
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
============================================================================================================================
BALANCE AT JULY 30, 1995 271,245 249,231 22,014
TREASURY STOCK PURCHASED (2,449) 2,449
TREASURY STOCK ISSUED UNDER MANAGEMENT INCENTIVE AND
STOCK OPTION PLANS 1,706 (1,706)
- ----------------------------------------------------------------------------------------------------------------------------
BALANCE AT APRIL 28, 1996 271,245 248,488 22,757
============================================================================================================================
</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
28, 1996 30, 1995
-------- --------
<S> <C> <C>
Raw materials, containers and supplies $288 $317
Finished products 498 505
-----------------------------------------------------------------------------------------------------
786 822
Less - Adjustment of certain inventories to LIFO basis 68 67
-----------------------------------------------------------------------------------------------------
$718 $755
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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. Based on current estimates, existing
reserves are adequate to cover expected losses on the remaining
businesses to be sold and finalizing other activities. The company
plans to complete the program in 1996. A summary of the original
reserves and activity through April 28, 1996 follows:
<TABLE>
<CAPTION>
Original Balance BALANCE
Reserves Activity 7/30/95 Activity 4/28/96
--------- -------- ------- ------- --------
<S> <C> <C> <C> <C> <C>
Loss on disposal of assets $275 $(197) $78 $(1) $77
Other 78 (60) 18 (4) 14
---------------------------------------------------------------------------------------------------------
Total $353 $(257) $96 $(5) $91
=========================================================================================================
Current $153 $96 $91
Non-current 200 - -
---------------------------------------------------------------------------------------------------------
Total $353 $96 $91
=========================================================================================================
</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 achieved record sales and earnings for the third quarter and first
nine months ended April 28, 1996. Net sales for the quarter were $1.83
billion, up 5% from the comparable period last year. Earnings per share
increased 14% to a quarterly record of 58 cents, up from 51 cents in the third
quarter last year. Net earnings rose 14% to $145 million from $127 million a
year ago.
Sales for the nine months increased 7% to $6.04 billion, versus $5.62 billion
for the comparable period last year. Earnings per share for the nine months
increased 12% to $2.49, and net earnings increased 12% to $621 million.
RESULTS BY DIVISION
THIRD QUARTER
U.S.A. - U.S. sales for the quarter were $1.10 billion, up 8% over $1.02
billion last year. Operating earnings rose 19% to $204 million.
Red & White condensed chicken noodle soup, "Chunky" ready-to-serve soups and
"Swanson" broths showed double-digit growth, increasing overall soup volume by
5%.
Strong volume gains also came from "Pace" Mexican sauces, "Prego" spaghetti
sauces, "V8" vegetable juice and "Swanson Hungry-Man" dinners. Food Service
reported exceptional gains in soups and entrees as well as chicken pot pies for
the away-from-home market.
BAKERY & CONFECTIONERY - Bakery & Confectionery sales increased 5% to $392
million from $372 million in the third quarter last year. Operating earnings
declined 7% to $28 million from $31 million a year ago, due to one-time charges
at Arnotts Ltd. primarily relating to changes in organization.
New "Pepperidge Farm" Fat Free cookies and brownies added to their wide
consumer acceptance. "Goldfish" crackers and frozen garlic breads continued to
achieve double-digit growth.
Godiva Chocolatier experienced an excellent Valentine's Day and Easter season
with record sales and earnings for the third quarter. Earnings of Continental
Sweets and Delacre were soft, mostly attributable to economic difficulties in
Europe.
This division consists of Pepperidge Farm in the U.S., Arnotts in Australia,
Delacre in Europe, Godiva worldwide and the confectionery business in Europe.
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<PAGE> 8
INTERNATIONAL GROCERY - The International Grocery Division reported sales of
$359 million in the third quarter, a 5% increase over last year's $342 million
excluding the divestiture of a frozen vegetable business in Europe. Operating
earnings declined 15% to $27 million because of the divestiture and a one-time
gain last year.
Soup volume outside the United States grew 6.5% during the quarter lead by
strong gains in Hong Kong and Japan. Also, the recent acquisitions of
"Homepride" cooking sauces in the United Kingdom and the Cheong Chan soup and
sauce business in Malaysia contributed to volume growth.
International Grocery consists of soup, grocery and frozen businesses in
Argentina, Asia, Canada, Europe and Mexico.
NINE MONTHS
U.S.A. - U.S. sales for the nine months were $3.65 billion versus $3.36
billion last year. Operating earnings increased 16% to $812 million.
Soup volume increased 4.0% led by Red & White chicken noodle, "Chunky" soup,
and "Swanson" broths.
Other strong sales gains came from "Prego" and "Barilla" spaghetti sauces, Food
Service entrees and chicken pot pies for the away-from-home market. Frozen
foods volume declined, reflecting marketplace conditions.
BAKERY & CONFECTIONERY - Bakery & Confectionery sales grew 6% to $1.29 billion
from $1.22 billion in the first nine months. Operating earnings increased 7%
to $148 million.
Volume gains were led by new "Pepperidge Farm" fat-free cookies and brownies,
"Goldfish" crackers and frozen garlic breads.
Arnotts' earnings declined because of lower volume and one-time charges due to
organization changes. Lamy Lutti, a confectionery business in Europe,
experienced volume and earnings decline due to economic difficulties in
France. Delacre experienced volume declines due to economic difficulties in
Europe. Godiva Chocolatier had record holiday season results.
INTERNATIONAL GROCERY - International Grocery reported sales of $1.15 billion
in the first nine months, a 6% increase over last year. Operating earnings
rose 2% to $106 million.
Soup volume outside the U.S. was up 8% in the first nine months with strong
gains from the United Kingdom and Asia. Sales also benefited from the
acquisition of "Homepride" cooking sauces in the United Kingdom.
STATEMENTS OF EARNINGS
Net sales increased 5% for the third quarter and 7% for the nine months,
compared to the same periods last year. These gains are the result of
acquisitions and worldwide soup volume gains of 5% in the third quarter and for
the first nine months. Volume gains continue to be strong in Asia, United
Kingdom and Japan.
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<PAGE> 9
Gross margins improved 2.1 percentage points to 42.1% in the third quarter and
1.6 percentage points to 42.9% for the nine-month period. Gross margin
improvements resulted primarily from higher selling prices and operational
improvements.
Marketing and selling expenses increased 11% for the third quarter and nine
months over the same periods a year ago. Acquisitions and increased trade
marketing in the third quarter, particularly for soups, were the principal
reasons for the increase. The nine-month increase was attributable to
acquisitions, increased advertising spending for ready-to-serve soups,
Pepperidge Farm "Goldfish" crackers, and increased trade marketing, principally
for soups.
Administrative expenses as a percentage of sales increased .5 percentage points
to 5.0% for the quarter, due to one-time charges at Arnotts Ltd., primarily
related to changes in organization. Administrative expense as a percentage of
sales remained flat for the nine-month period versus a year ago.
Other expense as a percentage of sales was flat this quarter versus last year,
and up .2 percentage points for the nine-month period due to amortization of
intangibles associated with recent acquisitions. Net interest expense for the
quarter was down as a result of repayment of acquisition related debt. For the
nine-month period, net interest expense is higher due to Pace Foods acquisition
debt being outstanding for the entire period versus only a portion of the same
period a year ago.
The effective tax rate for the first nine months was 33.1% compared to 33.6%
for last year. The company expects its effective tax rate for the full fiscal
year 1996 to remain approximately at this level due to tax planning strategies,
including utilization of tax loss carryforwards.
LIQUIDITY AND CAPITAL RESOURCES
Net earnings growth helped drive cash from operations to $828 million in the
first nine months of 1996, up $10 million from the same period in 1995.
Capital expenditures were $266 million in 1996, an increase of $37 million from
the prior year, due primarily to construction of a new Arnotts' manufacturing
facility in Huntingwood, New South Wales, Australia. Capital expenditures are
projected to be approximately $415 million in 1996.
During the year, the company acquired the "Homepride" sauce business, United
Kingdom's leading cooking sauce brand, and the Cheong Chan soup and sauce
business in Asia. The company also completed the purchase of a 50% interest in
the Indonesian biscuit and snack manufacturer, PT Helios Arnotts Indonesia, and
increased its Arnotts share ownership to 70%. The company divested Campbell's
Groko B.V., a Dutch frozen vegetable processor.
Long-term debt increased by $192 million in 1996. During the current fiscal
year, the company issued $200 million, 5.5% fixed-rate three-year notes due
January 1999. The proceeds were used to repay short-term debt which has
decreased $273 million this year.
The company repurchased 2,448,600 shares of common stock for the treasury at a
cost of $139 million, compared to minimal repurchases in 1995.
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<PAGE> 10
PART II
ITEM 1. LEGAL PROCEEDINGS
There have been no material developments in the legal proceedings as reported
in Campbell's Form 10-Q for the quarter ended October 29, 1995.
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: June 11, 1996 By:/s/JOHN M. COLEMAN
----------------------------------------
John M. Coleman, Senior Vice President -
Law and Public Affairs
Date: June 11, 1996 By:/s/BASIL L. ANDERSON
----------------------------------------
Basil L. Anderson, Senior Vice
President-Finance, Chief Financial
Officer and Treasurer
Date: June 11, 1996 By:/s/LEO J. GREANEY
----------------------------------------
Leo J. Greaney
Vice President - Controller
(Chief Accounting Officer)
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<PAGE> 12
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit Number Page
- -------------- ----
<S> <C> <C>
27 Financial Data Schedule 13
</TABLE>
-12-
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> JUL-28-1996
<PERIOD-START> JUL-31-1995
<PERIOD-END> APR-28-1996
<CASH> 57
<SECURITIES> 0
<RECEIVABLES> 734
<ALLOWANCES> 74
<INVENTORY> 718
<CURRENT-ASSETS> 1,577
<PP&E> 4,405
<DEPRECIATION> 1,787
<TOTAL-ASSETS> 6,494
<CURRENT-LIABILITIES> 2,146
<BONDS> 750
0
0
<COMMON> 20
<OTHER-SE> 2,721
<TOTAL-LIABILITY-AND-EQUITY> 6,494
<SALES> 6,038
<TOTAL-REVENUES> 6,038
<CGS> 3,449
<TOTAL-COSTS> 3,449
<OTHER-EXPENSES> 1,249
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 98
<INCOME-PRETAX> 928
<INCOME-TAX> 307
<INCOME-CONTINUING> 621
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 621
<EPS-PRIMARY> 2.49
<EPS-DILUTED> 2.49
</TABLE>
