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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report: February 9, 1994
Date of earliest event reported: February 7, 1994
CPC International Inc.
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(Exact name of registrant as specified in its charter)
Delaware 1-4199 36-2385545
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(State or other (Commission File (I.R.S. Employer
jurisdiction of Number) identification
incorporation) Number)
International Plaza, P.O. Box 8000,
Englewood Cliffs, New Jersey 07632
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(Address of principal executive offices) (Zip Code)
(201) 894-4000
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(Registrant's telephone number, including area code)
Page 1 of 10 Pages
Exhibit Index on Page
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Item 5. Other Events
On February 7, 1994, the registrant released its 1993 earnings report. A
true copy of the press release dated February 7, 1994 describing the above is
attached as Exhibit 99 hereto.
Item 7. Financial Statements and Exhibits
(c) Exhibits.
Exhibit 99 Reference is made to Item 5 regarding the
exhibit annexed hereto and made a part hereof.
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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 hereunto duly authorized.
CPC International Inc.
By /S/ Clifford B. Storms
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Name: Clifford B. Storms
Title: Senior Vice President
and General Counsel
Date: February 9, 1994
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Exhibit Index
<TABLE>
<CAPTION>
Exhibit No. Page Number
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<S> <C> <C>
99 Press release dated February 7, 1994 5-8
</TABLE>
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CONTACT: John W. Scott 201/894-2837
Vice President, Investor Relations
CPC INTERNATIONAL REPORTS 1993 EPS GROWTH OF 6.1%
4TH QUARTER EPS UP 6.5%
ENGLEWOOD CLIFFS, NJ, FEBRUARY 7, 1994 -- CPC International today reported an
increase in 1993 earnings per share of 6.1% to $2.95, compared to $2.78 in
1992, excluding from 1992 results the cumulative effect of changes in
accounting principles and an environmental charge relating to discontinued
non-food businesses. On the same basis, net income increased 5.6% to $454.5
million compared to $430.6 million in 1992. Operating income rose 4% to $883.3
million from $849.1 million in 1992, reflecting in part the positive effect in
1993 of a charge for an actuarial reevaluation of workers compensation
liabilities taken in 1992.
Contributing to the earnings improvement was a reduction in financing cost of
$11.6 million, or 11.1%, resulting from lower borrowing levels and lower
interest and exchange rates.
CPC's worldwide sales of $6.7 billion advanced 2.1%, reflecting strong volume
growth including acquisitions, but also the negative impact of unfavorable
exchange rates for European currencies experienced throughout the year.
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Volume Growth Reflects Underlying Strength of Business
Commenting of the year's results, C.R. Shoemate, chairman and chief executive
officer said, "The underlying strength in our businesses is evident from CPC's
volume growth of 5.7%, coming from all of our domestic and foreign divisions.
It's also important to note that while CPC's European sales and earnings were
lower in dollars, they were actually solidly higher in local currencies, in
spite of the recessionary European economies. Our Latin American consumer
foods operation had outstanding performance, demonstrating the benefits of our
seventy-year presence in the region and the impact of recent economic reforms.
CPC's Asian operations also performed very well. We are anticipating a
continuation of our rapid growth in Asia."
Looking ahead, Mr. Shoemate said, "With economies gradually improving here
and in Europe, it's reasonable to expect that CPC's earnings growth rates can
move toward and into the double digit as the year progresses. Of course, this
assumes that European currencies will not weaken further than they have already
done versus last year." Fourth Quarter EPS up 6.5%
CPC's fourth quarter earnings per share rose 6.5% to $.82 compared to $.77 in
the fourth quarter of 1992. Fourth quarter net income, on the same basis, rose
6.4% to $125.1 million from $117.6 million in 1992, while operating income
advanced 3.3% to $244.7 million compared to $236.9 million in the same quarter
last year. CPC's fourth quarter sales of $1.75 billion were 2.4% lower than
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last year, due to the lower values of European currencies compared to fourth
quarter last year, despite good volume improvement. Operating Income from
Consumer Foods up 3.8%
The company's 1993 sales of consumer foods advanced 2.4% to $5.6 billion from
$5.5 billion in 1992, and operating income was 3.8% higher than in the
comparable period last year. While volumes gained a strong 6.2%, about half of
which came from acquisitions, the unfavorable European exchange rates and lower
margins restrained earnings growth significantly.
Fourth quarter sales of consumer foods declined 3.9%, despite volume growth
of 4.2%, and operating income was 1.9% lower.
In 1993's highly price-competitive North American environment, sales of Best
Foods were flat for the year, although volumes grew nearly 2% and operating
income was 5.4% higher. The division's margin increased slightly, helped by
effective cost cutting programs.
Volumes of Hellmann's mayonnaise, Mazola corn oil, Knorr products, Mueller's
pasta, and Thomas' English muffins all increased in 1993. Best Foods'
successful introduction during the year of a number of new products under these
brands and the geographic extension of others helped achieve the division's 2%
volume growth. Skippy peanut butter volumes declined significantly in an
intensely competitive category that also declined.
For the fourth quarter, Best Foods reported a sales increase of 1.7% on a
1.5% volume gain, compared to fourth quarter 1992, and operating income was 4%
higher.
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CPC's 1993 European consumer foods results reflected the impact of
recessions, which were particularly severe in the southern countries, and of
the year-long unfavorable exchange situation. Also included in the results are
the costs of an ongoing efficiency improvement program. For 1993, European
sales declined 1.4%, and operating income was 8.4% lower. Volume growth of
5.5% came largely from acquisitions.
European expansion during the year included establishment of a business in
Russia; the adding of locally-produced Knorr products in Poland; the launch of
Hellmann's mayonnaise in Poland; and the acquisition of a mayonnaise business
in the Czech Republic and an additional business in Turkey.
Fourth quarter European sales of consumer foods were 11.6% lower compared to
the same period last year, and operating income was down 16%, all relating to
weaker currencies.
In Latin America, CPC's consumer foods business posted yet another record
year. 1993 sales and operating income jumped 21% and 30%, respectively, on
vigorous volume growth of 18%, aided by acquisitions. Fourth quarter sales
advanced 8.3%, while operating income leapt 24% on volume and margin
improvements.
CPC's Asian sales rose 15% for the year, and operating income was up 13%.
CPC entered China during 1993, and is currently constructing plants in both
China and Indonesia.
Asian fourth quarter sales were 7.3% higher, but operating income declined
4.5%, as the division invested in development of its new and existing markets.
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Corn Refining Business Withstands Difficult North American Operating Conditions
CPC's corn refining business was heavily impacted in 1993 by very difficult
conditions in North America, but benefitted from strong performance in Latin
America. For the business as a whole, sales advanced slightly, while operating
income grew 1.2%, compared to 1992.
North American corn refining was impacted by two unusual situations: the poor
quality of 1992 corn, which made processing, in 1993, more difficult and
costly; and the massive Midwestern floods, which seriously disrupted delivery
of finished product.
In the fourth quarter, recovery in North America, with stronger volumes and
favorable pricing, and solid performance in Latin America resulted in sales and
operating income growth of 6% and 31%, respectively.
ABOUT CPC INTERNATIONAL: With sales in 1993 of $6.7 billion, CPC International
Inc. ranks as one of the 100 largest U.S. industrial companies. Consumer foods
account for 83% of the company's total sales. CPC's products include
Hellmann's and Best Foods mayonnaise, Mazola corn oil and margarine, Skippy
peanut butter, Thomas' English muffins, Arnold breads, Mueller's pasta
products, and Knorr products. CPC is one of the largest corn refiners. CPC
International has operations in 58 countries.
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CPC INTERNATIONAL INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF INCOME
(ALL FIGURES ARE IN THOUSANDS EXCEPT PER
SHARE AMOUNTS)
<TABLE>
<CAPTION>
THREE MONTHS ENDED TWELVE MONTHS ENDED
DECEMBER 31, DECEMBER 31,
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1993 1992* 1993 1992*
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<S> <C> <C> <C> <C>
NET SALES $1,747,881 $1,790,522 $6,738,021 $6,598,984
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COST OF SALES 1,034,066 1,065,447 4,043,259 3,992,772
OPERATING EXPENSES 469,112 488,169 1,811,469 1,757,127
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1,503,178 1,553,616 5,854,728 5,749,899
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OPERATING INCOME 244,703 236,906 883,293 849,085
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FINANCING COSTS 25,383 29,361 92,990 104,629
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INCOME BEFORE INCOME
TAXES 219,320 207,545 790,303 744,456
PROVISION FOR TAXES
ON INCOME 88,145 83,018 316,121 297,782
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131,175 124,527 474,182 446,674
MINORITY STOCKHOLDERS'
INTEREST 6,038 6,931 19,712 16,106
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INCOME FROM CONTINUING
OPERATIONS 125,137 117,596 454,470 430,568
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CHANGES IN ACCOUNTING
PRINCIPLES NET OF
TAXES -- -- -- (160,000)
LOSS FROM DISCONTINUED
OPERATIONS, NET OF
TAXES -- (46,800) -- (46,800)
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NET INCOME $ 125,137 $ 70,796 $ 454,470 $ 223,768
========= ========= ========= =========
EARNINGS PER COMMON
SHARE
INCOME FROM CONTINUING
OPERATIONS** $ .82 $ .77 $2.95 $2.78
CHANGES IN ACCOUNTING
PRINCIPLES -- -- -- (1.06)
LOSS FROM DISCONTINUED
OPERATIONS -- (.31) -- (.31)
----- ----- ----- ------
EARNINGS PER COMMON
SHARE $ .82 $ .46 $2.95 $1.41
===== ===== ===== =====
AVERAGE COMMON SHARES
OUTSTANDING 150,039 151,819 150,398 151,212
CASH DIVIDENDS DECLARED
PER COMMON SHARE $ .32 $ .30 $1.28 $1.20
</TABLE>
* RESTATED TO GIVE THE EFFECT OF CHANGES IN ACCOUNTING PRINCIPLES.
** REDUCED BY "ESOP" PREFERRED DIVIDENDS, NET OF TAXES.
ENGLEWOOD CLIFFS, NJ, FEBRUARY 7, 1994 JAMES E. HEALEY, COMPTROLLER
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