UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C 20549
FORM 10-Q
(Mark One)
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
- ---- ACT OF 1934
For the quarterly period ended December 31, 1995
-----------------
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
- ----
EXCHANGE ACT OF 1934
For the transition period from to
-------------------- ------------------
Commission file number 2-22791
-------
AGWAY INC.
- ------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
DELAWARE 15-0277720
- ------------------------------------------------------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
333 Butternut Drive, DeWitt, New York 13214
- ------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
315-449-6431
- ------------------------------------------------------------------------------
(Registrant's telephone number, including area code)
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
--- ---
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Class Outstanding at February 2, 1996
- -------------------------------------- -------------------------------
Membership Common Stock, $25 par value 108,118 shares
per share
1
<PAGE>
AGWAY INC. AND CONSOLIDATED SUBSIDIARIES
INDEX
<TABLE>
<CAPTION>
PAGE NO.
--------
PART I. FINANCIAL INFORMATION
- ------- ---------------------
<S> <C>
Item 1. Financial Statements (Unaudited)
Condensed Consolidated Balance Sheets as of December 31, 1995 and June 30, 1995....................... 3
Condensed Consolidated Statements of Operations and Retained Margin for the three months
and six months ended December 31, 1995 and December 31, 1994.......................................... 4
Condensed Consolidated Cash Flow Statements for the six months ended December 31, 1995
and December 31, 1994................................................................................. 5
Notes to Condensed Consolidated Financial Statements.................................................. 6
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations........ 12
<CAPTION>
PART II. OTHER INFORMATION
- -------- -----------------
<S> <C>
Item 1. Legal Proceedings............................................................................ 18
Item 4. Submission of Matters to a Vote of Security Holders.......................................... 18
Item 6. Exhibits and Reports on Form 8-K............................................................. 18
SIGNATURES............................................................................................ 19
</TABLE>
2
<PAGE>
PART I. FINANCIAL INFORMATION
AGWAY INC. AND CONSOLIDATED SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Thousands of Dollars)
<TABLE>
<CAPTION>
December 31, June 30,
1995 1995
------------ -----------
(Unaudited) (Restated)
<S> <C> <C>
ASSETS
- ------
Current Assets:
Trade accounts receivable (including notes receivable of
$20,889 and $33,491, respectively), less allowance for
doubtful accounts of $10,459 and $9,716, respectively........... $ 164,891 $ 209,949
Leases receivable, less unearned income of $43,776 and
$41,523 respectively............................................ 98,378 96,165
Uncollected insurance premiums.................................... 9,609 10,261
Advances and other receivables.................................... 31,528 21,808
Inventories
Raw materials................................................... 23,078 20,609
Finished goods.................................................. 155,195 129,533
Goods in transit and supplies................................... 8,464 7,516
------------ -----------
Total inventories............................................... 186,737 157,658
Prepaid expenses.................................................. 50,465 71,044
------------ -----------
Total current assets.......................................... 541,608 566,885
Marketable securities available for sale............................... 35,904 34,752
Other security investments............................................. 38,897 37,981
Properties and equipment, net.......................................... 239,743 248,753
Long-term leases receivable, less unearned income of
$69,963 and $68,799 respectively..................................... 244,611 236,522
Other assets........................................................... 90,343 85,876
Net assets of discontinued operations.................................. 15,734
------------ -----------
Total assets.................................................. $ 1,191,106 $ 1,226,503
============ ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
- ------------------------------------
Current Liabilities:
Notes payable..................................................... $ 85,876 $ 70,300
Current installments of long-term debt and subordinated debt...... 70,863 84,620
Accounts payable.................................................. 91,008 118,529
Unearned insurance premiums....................................... 16,252 17,023
Other current liabilities......................................... 125,405 122,087
------------ -----------
Total current liabilities..................................... 389,404 412,559
Long-term debt......................................................... 213,306 219,986
Subordinated debt...................................................... 378,221 362,768
Other liabilities...................................................... 57,486 58,825
Commitments and contingencies..........................................
Preferred stock, net................................................... 62,215 65,635
Common stock, net...................................................... 2,705 2,728
Paid-in capital........................................................ 1,470
Retained margin........................................................ 87,769 102,532
------------ -----------
Total liabilities and shareholders' equity.................... $ 1,191,106 $ 1,226,503
============ ===========
</TABLE>
See accompanying notes to condensed consolidated financial statements.
3
<PAGE>
<TABLE>
<CAPTION>
PART I. FINANCIAL INFORMATION (continued)
AGWAY INC. AND CONSOLIDATED SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND RETAINED MARGIN
(Unaudited)
(Thousands of Dollars)
Three Months Ended Six Months Ended
December 31, December 31,
----------------------------- -----------------------------
1995 1994 1995 1994
------------- ------------- ------------- ------------
(Restated) (Restated)
<S> <C> <C> <C> <C>
Net sales and revenues from:
Product sales...................... $ 344,134 $ 342,771 $ 647,118 $ 670,730
Leasing operations................. 11,831 9,973 23,045 19,248
Insurance operations............... 5,973 6,677 12,859 13,361
Service revenues................... 3,430 4,303 6,967 8,694
------------- ------------- ------------- ------------
Total net sales and revenues... 365,368 363,724 689,989 712,033
Cost and expenses from:
Products and plant operations...... 322,217 322,851 611,986 639,047
Leasing operations................. 5,159 4,445 10,416 8,806
Insurance operations............... 8,020 3,915 12,811 8,373
Selling, general and
administrative activities........ 32,859 36,074 66,694 71,555
------------- ------------- ------------- ------------
Total costs and expenses....... 368,255 367,285 701,907 727,781
Operating loss.......................... (2,887) (3,561) (11,918) (15,748)
Interest expense, net................... (7,539) (7,159) (14,459) (13,938)
Other income, net....................... 5,923 1,377 7,885 2,903
------------- ------------- ------------- ------------
Loss from continuing operations
before income taxes ............... (4,503) (9,343) (18,492) (26,783)
Income tax expense (benefit)............ 424 (2,884) (3,103) (9,055)
------------- ------------- ------------- ------------
Loss from continuing operations......... (4,927) (6,459) (15,389) (17,728)
Discontinued operations:
Gain (loss) on disposal of Hood,
net of tax expense (benefit) of
$1,585, $(13,261), $1,624 and
$(13,261), respectively............ 2,284 (6,944) 2,017 (6,944)
Gain on disposal of Curtice Burns,
net of tax expense of $19,700...... 4,430 4,430
------------- ------------- ------------- ------------
Margin (loss) from discontinued
operations................. 2,284 (2,514) 2,017 (2,514)
------------- ------------- ------------- ------------
Net loss................................ $ (2,643) $ (8,973) $ (13,372) $ (20,242)
Retained Margin:
Balance at beginning of period..... 91,790 112,171 102,532 123,346
Dividends.......................... (2,172) (2,374) (2,172) (2,374)
Adjustment to unrealized gains
(losses) on available-for-sale
securities, net of tax......... 794 (17) 781 77
------------- ------------- ------------- ------------
Balance at end of period................ $ 87,769 $ 100,807 $ 87,769 $ 100,807
============= ============= ============= ============
</TABLE>
See accompanying notes to condensed consolidated financial statements.
4
<PAGE>
PART I. FINANCIAL INFORMATION (continued)
AGWAY INC. AND CONSOLIDATED SUBSIDIARIES
CONDENSED CONSOLIDATED CASH FLOW STATEMENTS
(Unaudited)
(Thousands of Dollars)
<TABLE>
<CAPTION>
Six Months Ended
December 31,
--------------------------------
1995 1994
------------- ---------------
(Restated)
<S> <C> <C>
Net cash flows (used in) provided by operating activities.............. $ (358) $ 23,569
Cash flows (used in) provided by investing activities:
Purchases of property, plant and equipment........................ (7,518) (16,299)
Proceeds from disposal of businesses and property, plant and
equipment..................................................... 1,782 4,296
Leases originated................................................. (74,098) (80,115)
Leases repaid..................................................... 60,841 45,524
Proceeds from sale of marketable securities....................... 5,777 715
Purchases of marketable securities................................ (6,148) (1,618)
Other............................................................. (917) 147
Proceeds from sale of discontinued operations..................... 15,900 55,786
Net changes in net assets of discontinued operations.............. 14,511
------------- -------------
Net cash flows (used in) provided by investing activities.............. (4,381) 22,947
Cash flows (used in) provided by financing activities:
Net change in short-term borrowings............................... 15,576 (23,400)
Proceeds from long-term debt...................................... 19,764 36,205
Repayment of long-term debt....................................... (19,585) (38,155)
Proceeds from sale of subordinated debt........................... 44,790 31,894
Maturity and redemption of subordinated debt...................... (49,304) (47,123)
Redemption of stock............................................... (3,448) (2,536)
Cash dividends paid............................................... (2,410) (2,589)
Other............................................................. (644) (812)
------------- -------------
Net cash flows provided by (used in) financing activities.............. 4,739 (46,516)
------------- -------------
Net decrease in cash and equivalents................................... 0 0
Cash and equivalents at beginning of period............................ 0 0
------------- -------------
Cash and equivalents at end of period.................................. $ 0 $ 0
============= =============
</TABLE>
See accompanying notes to condensed consolidated financial statements.
5
<PAGE>
PART I. FINANCIAL INFORMATION (continued)
AGWAY INC. AND CONSOLIDATED SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(Thousands of Dollars)
1. BASIS OF PRESENTATION
---------------------
The accompanying unaudited condensed consolidated financial statements of
Agway Inc. (the "Company") have been prepared in accordance with
generally accepted accounting principles for interim financial
information and with the instructions to Form 10-Q and Article 10 of
Regulation S-X. Accordingly, they do not include all of the information
and footnotes required by generally accepted accounting principles for
complete financial statements. In the opinion of management, all
adjustments (consisting of normal recurring accruals) considered
necessary for a fair presentation have been included. Operating results
for the six-month period ended December 31, 1995 are not necessarily
indicative of the results that may be expected for the year ending June
30, 1996 due, among other reasons, to the sale of H. P. Hood Inc.
("Hood") and to the seasonal nature of certain major segments of the
Company's business. For further information, refer to the consolidated
financial statements and notes thereto included in the annual report on
Form 10-K for the year ended June 30, 1995.
The financial statements of Agway Inc. and Agway Financial Corporation
have been restated to reflect Hood, which was previously consolidated in
continuing operations, as a discontinued operation. Certain
reclassifications have been made to conform prior year financial
statements with the current year presentation.
2. AGWAY FINANCIAL CORPORATION
---------------------------
Agway Financial Corporation (AFC) is a wholly owned subsidiary of the
Company whose principal business activity is securing financing through
bank borrowings and issuance of corporate debt instruments to provide
funds for the Company and AFC's sole wholly owned subsidiary, Agway
Holdings Inc. (AHI), and AHI's subsidiaries, for general corporate
purposes. The payment of principal and interest on this debt is
absolutely and unconditionally guaranteed by the Company. In an exemptive
relief granted pursuant to a "no action letter" issued by the Securities
and Exchange Commission, AFC, as a separate company, is not required to
file periodic reports with respect to these debt securities. However, as
required by the 1934 Act, the summarized financial information concerning
AFC and Consolidated Subsidiaries is as follows:
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
December 31, December 31,
----------------------------- -----------------------
1995 1994 1995 1994
------------- ------------- ------------- ------------
(Restated) (Restated)
<S> <C> <C> <C> <C>
Net sales and revenues............. $ 265,432 $ 272,006 $ 486,861 $ 518,395
Operating margin................... 3,307 4,888 1,933 4,127
Loss from continuing operations.... (4,943) (2,880) (12,376) (8,330)
Net margin (loss).................. (2,658) (5,393) (10,359) (10,843)
</TABLE>
<TABLE>
<CAPTION>
December 31, June 30,
1995 1995
------------- -------------
(Restated)
<S> <C> <C>
Current assets.................................... $ 565,990 $ 546,416
Properties and equipment, net..................... 166,884 169,368
Noncurrent assets................................. 331,337 321,152
Net assets of discontinued operations............. 15,734
------------- -------------
Total assets...................................... $ 1,064,211 $ 1,052,670
============= =============
Current liabilities............................... $ 257,827 $ 242,726
Long-term debt.................................... 208,595 217,425
Subordinated debt................................. 378,221 362,768
Noncurrent liabilities............................ 14,460 8,855
Shareholder's equity.............................. 205,108 220,896
------------- -------------
Total liabilities and
shareholder's equity.......................... $ 1,064,211 $ 1,052,670
============= =============
</TABLE>
6
<PAGE>
PART I. FINANCIAL INFORMATION (continued)
AGWAY INC. AND CONSOLIDATED SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Unaudited)
(Thousands of Dollars)
3. BORROWING ARRANGEMENTS
----------------------
As of December 31, 1995, the Company had available lines of credit with
various banking institutions whereby lenders have agreed to provide funds
up to $89,000 to separately financed units of the Company as follows: AFC
- $65,000 and Telmark - $24,000, the same as June 30, 1995. In addition,
AFC may issue up to $60,000 of commercial paper under the terms of a
separate agreement, backed by a letter of credit. Telmark had a committed
term loan of $125,000 available to be borrowed through February 1, 1996,
of which $109,000 was outstanding as of December 31, 1995. Telmark's
long- and short-term lines of credit were renegotiated effective February
1, 1996 as discussed below. Long-term and subordinated debt outstanding
amounted to:
<TABLE>
<CAPTION>
Agway & AFC Telmark Total
---------------------------- --------------------------- --------------------------
12/95 6/95 12/95 6/95 12/95 6/95
------------- ------------ ------------- ----------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C>
Long-term debt.......... $ 15,886 $ 22,843 $ 251,955 $ 245,467 $ 267,841 $ 268,310
Currently payable....... 4,913 13,702 49,622 34,622 54,535 48,324
------------- ------------ ------------- ----------- ----------- ------------
Net long-term debt...... $ 10,973 $ 9,141 $ 202,333 $ 210,845 $ 213,306 $ 219,986
============= ============ ============= =========== =========== ============
Subordinated debt....... $ 378,699 $ 390,890 $ 15,850 $ 8,174 $ 394,549 $ 399,064
Currently payable....... 16,328 36,296 16,328 36,296
------------- ------------ ------------- ----------- ----------- ------------
Net subordinated debt... $ 362,371 $ 354,594 $ 15,850 $ 8,174 $ 378,221 $ 362,768
============= ============ ============= =========== =========== ============
</TABLE>
The AFC available $65,000 line of credit and availability of issuing
$60,000 of commercial paper were extended through February 29, 1996. In
order to consider the effect of the December 15, 1995 sale of Hood on the
line of credit requirements, existing lines of credit were extended to
February 29, 1996. Longer-term renewals are in the process of
negotiations. These AFC short-term lines of credit are collateralized by
certain of the Company's accounts receivable and non-petroleum
inventories ("collateral"). Amounts which can be drawn under the AFC
short-term agreements are limited to a specific calculation based upon
the collateral available. Adequate collateral has existed throughout the
fiscal year to permit AFC to borrow amounts to meet the ongoing needs of
the Company and is expected to continue to do so. In addition, the
agreements include certain covenants, the most restrictive of which
requires the Company to maintain specific quarterly levels of interest
coverage and monthly levels of tangible net worth. The Company has
ongoing discussions with its lenders and expects to continue to have
appropriate and adequate financing to meet its ongoing needs.
Telmark borrows under its short-term line of credit agreement and its
revolving term agreement from time to time to fund its operations.
Short-term debt serves as interim financing between the issuances of
long-term debt. The current uncommitted short-term line of credit
agreement with one bank permits Telmark to borrow up to $4,000 on an
unsecured basis with interest paid upon maturity. The line bears interest
at money market variable rates. As of December 31, 1995, there were no
amounts outstanding against this line. Effective February 1, 1996, the
$20,000 short-term line of credit and the $125,000 term loan commitment
were replaced by a $200,000 revolving term loan facility from the same
bank against which Telmark may draw short-term funds bearing interest at
money market rates or draw long-term debt at rates appropriate for the
term of the note drawn. The amounts outstanding as of December 31, 1995
on the short-term line and term loan totaled $118,500 and will be applied
against the new $200,000 revolving term loan facility.
Telmark renews its lines of credit annually. The $4,000 line of credit
has been renewed through December 1996. As described above, the $200,000
revolving term agreement is available beginning February 1, 1996 through
February 1, 1997. The Company believes Telmark has sufficient lines of
credit in place to meet interim funding needs.
7
<PAGE>
PART I. FINANCIAL INFORMATION (continued)
AGWAY INC. AND CONSOLIDATED SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Unaudited)
(Thousands of Dollars)
4. COMMITMENTS AND CONTINGENCIES
-----------------------------
Environmental
The Company is subject to a number of governmental regulations concerning
environmental matters, either directly, or as a result of the operations
of its subsidiaries. The Company expects that it will be required to
expend funds to remediate certain sites, including certain Superfund
sites and sites with underground fuel storage tanks. In addition, the
Company expects that it will incur other expenses associated with
environmental compliance.
The Company continually monitors its operations with respect to potential
environmental issues, including changes in legally mandated standards and
remediation technologies. The Company's recorded liability reflects those
specific issues where remediation activities are currently deemed to be
probable and where the cost of remediation is estimable. Estimates of the
extent of the Company's degree of responsibility of a particular site and
the method and ultimate cost of remediation require a number of
assumptions for which the ultimate outcome may differ from current
estimates; however, the Company believes that its past experience
provides a reasonable basis for estimating its liability. As additional
information becomes available, estimates are adjusted as necessary. While
the Company does not anticipate that any such adjustment would be
material to its financial statements, it is reasonably possible that the
result of ongoing and/or future environmental studies, changes in legal
requirements or other factors could alter this expectation and require
the recording of additional liabilities. The extent or amount of such
events, if any, cannot be estimated at this time.
As part of its long-term environmental protection program, the Company
spent approximately $4,000 in fiscal 1995 on capital projects. The
Company estimates that during fiscal 1996 and 1997 approximately $4,000
per year will be spent on additional capital projects for environmental
protection. These estimates recognize the additional capital required to
comply with Environmental Protection Agency (EPA) Underground Storage
Tank (UST) regulations which become effective in December 1998.
Presently, the total cost to comply with the EPA UST regulations is
estimated to be approximately $5,000. The total capital requirements may
change due to, amongst other things, the actual number of USTs actively
in use on the effective date.
Other
The Company is also subject to various investigations, claims and legal
proceedings covering a wide range of matters that arise in the ordinary
course of its business activities. Each of these matters is subject to
various uncertainties, and it is possible that some of these matters may
be resolved unfavorably to the Company. The Company has established
accruals for matters for which payment is probable and amounts reasonably
estimable. Management believes any liability that may ultimately result
from the resolution of these matters in excess of amounts provided will
not have a material adverse effect on the financial position or results
of operations of the Company.
8
<PAGE>
PART I. FINANCIAL INFORMATION (continued)
AGWAY INC. AND CONSOLIDATED SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Unaudited)
(Thousands of Dollars)
5. RESTRUCTURING RESERVES
----------------------
In June 1992, the Company established a $75,000 reserve for the estimated
net cost to complete a significant restructuring of the Company planned
at that time. Periodically, management has reviewed its original
estimates and has made revisions due to changes in circumstances as the
restructuring plan evolved. The following schedule details the remaining
reserves to complete the restructuring project and their intended
purposes, as well as the actual activity for the six-month period ended
December 31, 1995:
<TABLE>
<CAPTION>
Balance Proceeds Reductions Change Balance
---------------------
at Sale of Divested Costs in at
6/30/95 Assets Assets Incurred Estimate 12/31/95
-------- -------- --------- --------- -------- ---------
Restructuring Reserve:
Plant, Store & Business Divestitures
- ------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Proceeds on sale of assets (A) $ (1,506) $ (143) $ (1,363)
Net book value of assets to
be divested (A) 962 $ 32 930
Cost of divestiture (1) (B) 3,099 $ 1,251 1,848
---------- -------- --------- --------- --------- ---------
Loss on divestiture 2,555 (143) 32 1,251 1,415
Incremental environmental
costs (C) 3,597 56 3,541
---------- -------- --------- --------- --------- ---------
TOTAL RESTRUCTURING $ 6,152 $ (143) $ 32 $ 1,307 $ 0 $ 4,956
========== ======== ========= ========= ========= =========
</TABLE>
(1) Includes demolition, asset transfer costs, and commissions on real estate
transactions.
(A) Represents certain assets identified for disposition as part of the
original restructuring plan which have yet to be sold or closed. Efforts
to sell the assets and complete the shutdowns are ongoing. Ultimate
disposition will depend upon successful negotiations with willing buyers
for remaining properties. The Company anticipates that the planned
activities will be completed in fiscal 1996.
(B) Cost of divestitures includes shutdown costs in connection with the
closing and sale of remaining locations. Ultimate disposition will depend
upon successful negotiations with willing buyers for remaining
properties. As operational shutdowns are completed, costs are expected to
vary from the original estimates. The Company anticipates these efforts
will be completed in fiscal 1996.
(C) Included in the costs related to business divestitures are environmental
remediation costs, identified during the process of asset sales, that
primarily relate to real estate assets retained on energy business sold.
These anticipated cash outlays will be part of our ongoing programs
regarding environmental remediation and are expected to be incurred over
the next three years.
9
<PAGE>
PART I. FINANCIAL INFORMATION (continued)
AGWAY INC. AND CONSOLIDATED SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Unaudited)
(Thousands of Dollars)
6. DISCONTINUED OPERATIONS
-----------------------
In November 1994, the sale of Hood was anticipated to close shortly in a
sale to a Hood management-led buyout group. However, based on changed
business conditions and financial markets during prolonged negotiations,
on January 24, 1995, Agway and the management buyout group mutually
concluded to cease the pursuit of this sale transaction. While Agway was
still actively interested in the sale of Hood and while such a sale could
have been consummated in the near future, Agway no longer was able to
estimate with reasonable certainty whether a sale would occur within the
next year and, accordingly, reclassified Hood to continuing operations
for financial reporting purposes as of December 31, 1994. Since January
24, 1995, Agway has actively pursued alternative buyers for Hood. As
previously reported on Form 8-K on December 18 and 22, 1995, Hood was
sold to Catamount Dairy Holdings Limited Partnership on December 15,
1995.
As a result of the sale of Hood, Agway has reclassified Hood as a
discontinued operation for financial reporting purposes as of December
31, 1995. Net sales and revenues from the discontinued operations of
Hood, sold in December 1995, and Curtice Burns, sold in November 1994,
were approximately $749,000 and $1,323,000 for the years ended June 30,
1995 and 1994, respectively.
A summary of net assets of discontinued operations at June 30, 1995 and
1994, previously reported as continuing operations, is as follows:
<TABLE>
<CAPTION>
1995 1994
------------- ------------------------------------------------
H.P. Curtice H. P.
Hood Burns Hood Total
------------- -------------- ------------- -------------
<S> <C> <C> <C> <C>
Accounts receivable....................... $ 45,399 $ 66,337 $ 51,622 $ 117,959
Inventory................................. 20,337 155,259 19,124 174,383
Property, plant and equipment, net........ 62,560 167,516 68,991 236,507
Other, net................................ 17,262 25,352 23,841 49,193
Accounts payable and other liabilities.... (76,815) (128,760) (67,090) (195,850)
Structured debt........................... (53,009) (237,280) (60,129) (297,409)
------------- -------------- ------------- -------------
$ 15,734 $ 48,424 $ 36,359 $ 84,783
============= ============== ============= =============
</TABLE>
10
<PAGE>
PART I. FINANCIAL INFORMATION (continued)
AGWAY INC. AND CONSOLIDATED SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Unaudited)
(Thousands of Dollars)
6. DISCONTINUED OPERATIONS (continued)
-----------------------------------
As previously discussed, the financial statements have been reclassified
to reflect Hood as a discontinued operation. A reconciliation to margin
(loss) from continuing operations as previously reported follows:
<TABLE>
<CAPTION>
Six Months Fiscal Year Fiscal Year
Ended Ended Ended
December 31, 1994 June 30, 1995 June 30, 1994
----------------- ------------------ ----------------
<S> <C> <C> <C>
Impact of reclassification of loss from
continuing operations to margin
(loss) from discontinued operations:
Interest expense.......................... $ (891) $ (1,000) $ (1,783)
Transaction costs and allowance........... (15,884) (16,724)
Pre-tax margin (loss) from
segment operations.................... 2,177 (2,666) (7,681)
----------------- ------------------ ----------------
Pre-tax (loss) from continuing
operations............................ (14,598) (20,390) (9,464)
Income tax benefit........................ 5,031 5,406 3,086
----------------- ------------------ ----------------
Losses to discontinued operations..... (9,567) (14,984) (6,378)
Original balance - margin (loss)
from continuing operations............ (27,295) (22,962) (5,682)
----------------- ------------------ ----------------
Reclassified balance - margin (loss)
from continuing operations............ $ (17,728) $ (7,978) $ 696
================= ================== ================
<CAPTION>
A reconciliation to loss from discontinued operations as previously
reported follows:
Six Months
December 31, 1994 June 1995 June 1994
----------------- ------------------ ----------------
<S> <C> <C> <C>
Original balance:
Gain on sale of Curtice Burns,
net of tax of $19,700.............. $ 4,430 $ 4,430
================== ==================
Previous reclassification to
reconsolidate Hood, net of tax
benefit (expense) of $8,230, $8,230
and $(3,086), respectively......... $ 2,623 $ 2,624 $ 2,378
Current reclassification of Hood
losses to discontinued operations.. (9,567) (14,984) (6,378)
------------------- ------------------ -----------------
Restated balance - Gain (loss) on
disposal of Hood, net of tax....... $ (6,944) $ (12,360) $ (4,000)
=================== ================== ===================
</TABLE>
7. INCOME TAXES
------------
The income tax benefit from continuing operations and the resulting
effective tax rate for the three- and six-month periods ended December
31, 1995 vary significantly from the anticipated statutory rates. The
difference between the expected tax benefit on current period losses and
the actual amount recorded in the current year is primarily the result of
certain patronage losses not being given current tax benefit.
11
<PAGE>
PART I. FINANCIAL INFORMATION (continued)
AGWAY INC. AND CONSOLIDATED SUBSIDIARIES
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
(Unaudited)
(Thousands of Dollars)
RESULTS OF OPERATIONS
- ---------------------
The Company's net sales and revenues and operating results are significantly
impacted by seasonal fluctuations due to the nature of its operations and the
geographic location of its service area, which is primarily the Northeastern
United States. Agriculture & Consumer net sales and revenues are traditionally
higher in the spring as customers acquire products to initiate the growing
season. Energy realizes significantly higher net sales and revenues in the
winter months due to cold winter conditions. Financial Services and Corporate
are not materially impacted by seasonal fluctuations.
<TABLE>
<CAPTION>
Results by Operating Segment
----------------------------
Increase (Decrease)
----------------------------------------------
Three Months Ended Six Months Ended
--------------------- ---------------------
12/31/95 vs. 12/31/94 12/31/95 vs. 12/31/94
--------------------- ---------------------
<S> <C> <C>
Net Sales and Revenues
----------------------
Agriculture & Consumer................. $ (1,528) $ (17,358)
Energy................................. 2,257 (7,556)
Financial Services..................... 812 2,602
Corporate.............................. 103 268
---------------------- ---------------------
$ 1,644 $ (22,044)
====================== ======================
Margin (Loss) from Continuing Operations
----------------------------------------
before Income Taxes
-------------------
Agriculture & Consumer................. $ 6,238 $ 9,847
Energy................................. 726 (488)
Financial Services..................... (3,598) (3,163)
Corporate.............................. 1,854 2,616
---------------------- ---------------------
Operating margin (loss) and other
income (expense), net................ 5,220 8,812
Interest (expense), net................ (380) (521)
---------------------- ----------------------
$ 4,840 $ 8,291
====================== =====================
</TABLE>
Numbers in the following narrative have been rounded to the nearest hundred
thousand.
Consolidated Results
- --------------------
The sales decrease for the six months ended December 31, 1995 was in part the
planned result from (1) the sale of the Dairy Route and Installation & Service
businesses by AAP in fiscal 1995; (2) the change in product mix from high
dollar volume, low gross margin power equipment to lower unit value, higher
gross margin consumer products which affected both AAP and ARS; (3) the
reduction of power fuel facilities in the Energy segment for locations
determined not to be cost beneficial to upgrade; and (4) a reduction of Energy
sales to high volume, low margin commercial accounts. Sales were adversely
affected in the first quarter by the summer drought conditions which reduced
sales of fertilizer, lime and yard and garden equipment and supplies, as well
as crop and farm store supplies. These sales declines were offset by higher
sales prices in feed and fertilizer products due to an increase in the cost of
these products; by volume increases in CPG, particularly in human edible
sunflower seeds, birdseed and turf; and by increases, particularly in the
second quarter due to the colder weather, in sales of heating oil and propane
for Energy and of winter consumable products and birdseed for ARS.
The pre-tax loss from continuing operations was reduced $4,800 for the three
months and $8,300 for the six months ended December 31, 1995. This improvement
was primarily the result of reductions in selling and administration expenses
in AAP and ARS; an increase in gross margin percent on ARS sales; an increase
in gross margin dollars on increased CPG sales volume; increased margin from
Telmark due to the increase of its net investment in leases; a $1,400 second
quarter gain on the sale of an investment; and the non-reoccurrence of
reengineering costs incurred in the prior year. These improvements were offset
by a significant adverse claim experience in the second quarter for the
Insurance operations.
12
<PAGE>
PART I. FINANCIAL INFORMATION (continued)
AGWAY INC. AND CONSOLIDATED SUBSIDIARIES
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
(Unaudited)
(Thousands of Dollars)
Agriculture & Consumer
- ----------------------
Agriculture & Consumer consists of Agway Agricultural Products (AAP),
Agriculture & Related Services (ARS) and Country Products Group (CPG). Total
Agriculture & Consumer net sales and revenues of $206,000 and $413,800 for the
second quarter and six months ended December 31, 1995, respectively, decreased
$1,500 (1%) and $17,400 (4%) as compared to the prior year. Total pre-tax loss
from continuing operations for the second quarter of $4,600 and for the six
months to date of $11,700 decreased $6,200 (57%) and $9,800 (46%),
respectively, as compared to the prior year. The change from the prior year of
net sales and revenues and pre-tax margin (loss) from continuing operations
for the three-month and six-month periods ended December 31, 1995 within the
segment was as follows:
<TABLE>
<CAPTION>
December 31, 1995 vs 1994
-------------------------
Three Months Ended Six Months Ended
---------------------- -------------------
<S> <C> <C> <C> <C>
Net sales and revenues: $ % $ %
------------- ------ ------------- ----
AAP......................................... $ 5,328 6% $ (3,063) (2%)
ARS......................................... (10,367) (17%) (22,671) (18%)
CPG......................................... 3,511 7% 8,376 9%
------------- -------------
Total................................... $ (1,528) 1% $ (17,358) 4%
============= =============
Pre-tax margin (loss) from continuing
operations:
AAP......................................... 5,011 55% 6,948 37%
ARS......................................... 1,781 37% 2,403 37%
CPG......................................... 585 495% 1,835 163%
Eliminations................................ (1,139) (40%) (1,339) (28%)
------------- -------------
Total $ 6,238 57% $ 9,847 46%
============= =============
</TABLE>
Total net sales and revenues of AAP of $101,700 and $201,600 for the three and
six months ended December 31, 1995 approximate 50% of the total segment. The
sales levels during the first six months have been reduced because of the
decision to exit, during the fourth quarter of fiscal 1995, the Dairy Route
and Installation & Service (I&S) businesses of AAP and as the result of summer
drought conditions, followed by early winter conditions in the Northeast,
which lowered the demand for fertilizer, lime, yard and garden equipment and
supplies and crop and farm store supplies. Increased sales dollars in the
second quarter were mainly the result of increased feed and fertilizer product
costs, which were approximately 15% higher than in the prior year, and
improved wholesale crop sales, particularly in dry fertilizers.
Total net sales and revenues of ARS of $51,100 and $105,400 for the three and
six months ended December 31, 1995 approximate 25% of the total segment. ARS
has experienced significant declines (18%) in net sales and revenues during
the first six months of fiscal 1996. Exiting of the Dairy Route and I&S
businesses in the fourth quarter of fiscal 1995 has reduced sales compared to
the prior year. Further, to improve overall margins, the unit has made product
mix changes and has created marketing programs designed to de-emphasize high
dollar value/lower margin power equipment sales in favor of more consumer
products of smaller per unit value, but with higher turnover rates and
margins. In addition, the summer drought conditions have adversely impacted
the sales in yard and garden product lines, particularly fertilizers and turf
seeds.
Total net sales and revenues of CPG of $53,200 and $106,800 for the three and
six months ended December 31, 1995 approximate 25% of the total segment. As
noted above, the CPG unit has experienced sales growth of 9% over the prior
year six-month period ended December 31. The increase is mainly the result of
increased sales of sunflower seeds, both in use for human consumption and in
the production of birdfoods, and growth in the turf and flour operations.
13
<PAGE>
PART I. FINANCIAL INFORMATION (continued)
AGWAY INC. AND CONSOLIDATED SUBSIDIARIES
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
(Unaudited)
(Thousands of Dollars)
Agriculture & Consumer (continued)
- ----------------------------------
Pre-tax loss for AAP and ARS has shown significant improvement in both the
three-month (55% and 37%, respectively) and six-month (37% and 37%,
respectively) periods ending December 31, 1995 as compared to the prior year.
Substantial improvement has come from management's successful efforts to
reduce selling and administrative expenses in the current year. These
improvements are after considering declines in gross margin dollars of
approximately $700 (5%) for AAP and $5,000 (14%) for ARS and are the result of
the increased product cost or volume reductions noted previously.
Pre-tax margin (loss) improvement for CPG is due primarily to gross margin
gains realized from increased sales volume in sunflower seeds, turf and the
flour operation.
Energy
- ------
Total net sales and revenues of Energy were $140,200 and $237,600 for the
three and six months ended December 31, 1995 and represent an increase of
$2,200 (2%) for the three-month period and a decrease of $7,600 (3%) for the
six-month period, respectively. The sales reductions occurring during the
first six months were due to (1) ongoing efforts to close down certain
company-owned retail keytrol/cardtrol sites and bulk customer sites determined
not to be cost beneficial for upgrade to comply with storage tank regulation
requirements; (2) a regional oversupply of fuel oil from the prior year's warm
winter in Energy's marketplace was sold by competitors as commercial and
retail diesel fuel at bargain prices which reduced Energy's volume of diesel
fuel sold; and (3) a decision to redirect commercial diesel fuel sales away
from high volume/low margin transport deliveries toward higher margin/low
volume tankwagon sales. However, sales increases did occur in the three-month
period ended December 31, 1995, which partially offset the declines over the
entire six-month period. The increase was substantially due to colder
temperatures than in the prior year which elevated residential heating oil and
propane sales. Overall, unit volume decreased 4% in the six-month period and
remained constant in the three-month period ended December 31, 1995 as
compared to the prior year.
Pre-tax margin (loss) from continuing operations for Energy shows a $700 (14%)
improvement during the second quarter ended December 31, 1995 as compared to
the prior year. However, through six months, pre-tax margin has declined $500
(270%) over the prior year. The decline over the six-month period is
attributable to lower gross margins as a result of lower sales volumes, lower
gross margins in power fuels due to product mix and competitive pricing, and
higher administrative costs which were partially offset by lower amounts of
selling and distribution expenses. During the second quarter, the pre-tax
margin improvement relates to a 2% improvement in gross margin being generated
in the retail propane and fuel oil products and as the result of reduced
selling and distribution expenses.
14
<PAGE>
PART I. FINANCIAL INFORMATION (continued)
AGWAY INC. AND CONSOLIDATED SUBSIDIARIES
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
(Unaudited)
(Thousands of Dollars)
Financial Services
- ------------------
For segment reporting purposes, Financial Services consists of Telmark, Inc.
("Telmark"), Agway Insurance Company ("Insurance") and Agway General
Agency, Inc. ("General Agency").
Total Financial Services net sales and revenues of $18,500 and $37,300 for the
second quarter and year-to-date, respectively, increased $800 (5%) and $2,600
(8%), respectively, as compared to the corresponding periods in the prior
year. Telmark operations provided $12,200 (66%) and $23,700 (64%) of second
quarter and six-month net sales and revenues as compared to $10,300 (58%) and
$19,800 (57%), respectively, in the same periods last year. Telmark continued
to experience booked volume growth as its net investment in leases increased
$12,700 (4%) for the six-month period to $361,100, but did not change during
the second quarter. The increase in Telmark's second quarter and year-to-date
net sales and revenues of $1,900 (19%) and $3,800 (19%) as compared to the
same periods last year is primarily due to the higher level of net investment
as well as having slightly higher revenue rates on its current portfolio as
compared to the prior year. Insurance and General Agency operations provided
$6,300 (34%) and $13,600 (36%) of total Financial Services net sales and
revenues for the second quarter and the six-month period. This represents a
decrease of $1,100 (15%) in the second quarter and $1,200 (8%) year-to-date as
compared to the prior year. Due to competitive price conditions for personal
lines business, Insurance has experienced a decline in direct written
premiums.
Pre-tax operating margins (loss) for Financial Services deteriorated from
$2,800 and $4,900 in the second quarter and for the first six months of the
prior year, respectively, to ($800) and $1,700, respectively. Telmark's
pre-tax operating margin increased in the second quarter and in the six-month
period by $900 (44%) and $1,500 (39%), respectively. The increase reflects the
positive impact of net investment growth with relatively higher interest
rates, which was offset somewhat by an increase in interest expense of $700
and $1,600 in the second quarter and year-to-date, respectively, resulting
from higher interest rates on new and replacement debt. Insurance pre-tax
operating margin was negatively impacted by $4,400 and $4,600 in the second
quarter and six months ended December 1995 as compared to the prior year. This
was primarily due to $3,800 of unusually large farmowner and auto liability
casualty losses and loss development during the second quarter.
Corporate
- ---------
Net sales and revenues of $600 in the second quarter and $1,200 for the first
six months remained relatively constant as compared to last year and represent
external revenues generated from the Information Services Department and the
elimination of sales and revenues between operating segments.
Operating margins of $3,500 in the second quarter and $6,200 for the first six
months reflect an increase of $1,900 (119%) and $2,600 (72%), respectively,
from last year. Prior year operating margin included reengineering costs
totaling $900 and $1,600 in the second quarter and year-to-date. These costs
were not incurred in fiscal 1996. Additionally, in the second quarter,
Corporate recorded a $1,400 gain on the sale of a security investment.
15
<PAGE>
PART I. FINANCIAL INFORMATION (continued)
AGWAY INC. AND CONSOLIDATED SUBSIDIARIES
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
(Unaudited)
(Thousands of Dollars)
LIQUIDITY AND CAPITAL RESOURCES
- -------------------------------
Cash flows from operating activities for the six months ended December 31,
1995 decreased approximately $23,900 as compared to the first six months of
the prior year due primarily to less cash provided from working capital. A
smaller decline in accounts receivable, a larger increase in inventory and a
larger decrease in accounts payable during the first six months as compared to
the prior year were the reason for the decreased cash flows. Net cash used in
investing activities for the six months was approximately $4,400 as compared
to net cash provided of approximately $22,900 for the same period last year,
primarily due to a reduction in the cash generated from sale of discontinued
operations this year compared to last year and a reduction in the financing
required for growth in the lease portfolio. The net cash flows provided by
financing activities for the six months were approximately $4,700 as compared
to net cash used of approximately $46,500 for the same period in the prior
year. The majority of the change from financing activities was the result of
less net repayments of long-term debt offset by an increase in net short-term
borrowings for the first six months as compared to the prior year. Net
repayments of long-term debt declined approximately $18,000 while the change
in short-term borrowings increased $38,000 as compared to the six months ended
December 31, 1994.
The Company finances its operations and the operations of all its continuing
businesses and subsidiaries, except Telmark and Agway Insurance Company,
through Agway Financial Corporation (AFC). Telmark and Agway Insurance Company
finance themselves through operations or direct borrowing arrangements. Each
is financed with a combination of short- and long-term credit facilities.
External sources of short-term financing for the Company and all its
continuing operations include revolving credit lines, letters of credit, and
commercial paper programs. In addition, Telmark has occasionally sold blocks
of its lease portfolio. Sources of longer-term financing include the following
as of December 31, 1995:
<TABLE>
<CAPTION>
Agway Telmark Total
------------- ------------- -------------
<S> <C> <C> <C>
Source of debt
--------------
Banks - due 2/96 - 8/99 with interest
from 5.4% - 8.5% $ 109,000 $ 109,000
Insurance companies - due 3/96 - 11/00
with interest from 5.7% - 9.2% 142,955 142,955
Capital leases & other - due 1996-2007
with interest from 6% - 12% $ 15,886 15,886
------------- ------------- -------------
Long-term debt 15,886 251,955 267,841
Subordinated debt - due 10/96 - 10/08
with interest from 4.5% - 9.5% 378,699 15,850 394,549
-------------- ------------- -------------
Total debt $ 394,585 $ 267,805 $ 662,390
============== ============= =============
</TABLE>
The AFC available $65,000 line of credit and availability of issuing $60,000
of commercial paper were extended through February 29, 1996. In order to
consider the effect of the December 15, 1995 sale of Hood on the line of
credit requirements, existing lines of credit were extended to February 29,
1996. Longer-term renewals are in the process of negotiations. These AFC
short-term lines of credit are collateralized by certain of the Company's
accounts receivable and non-petroleum inventories ("collateral"). Amounts
which can be drawn under the AFC short-term agreements are limited to a
specific calculation based upon the collateral available. Adequate collateral
has existed throughout the fiscal year to permit AFC to borrow amounts to meet
the ongoing needs of the Company and is expected to continue to do so. In
addition, the agreements include certain covenants, the most restrictive of
which requires the Company to maintain specific quarterly levels of interest
coverage and monthly levels of tangible net worth. The Company has ongoing
discussions with its lenders and expects to continue to have appropriate and
adequate financing to meet its ongoing needs.
16
<PAGE>
PART I. FINANCIAL INFORMATION (continued)
AGWAY INC. AND CONSOLIDATED SUBSIDIARIES
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
(Unaudited)
(Thousands of Dollars)
LIQUIDITY AND CAPITAL RESOURCES (continued)
- -------------------------------------------
Telmark borrows under its short-term line of credit agreement and its
revolving term agreement from time to time to fund its operations. Short-term
debt serves as interim financing between the issuances of long-term debt. The
current uncommitted short-term line of credit agreement with one bank permits
Telmark to borrow up to $4,000 on an unsecured basis with interest paid upon
maturity. The line bears interest at money market variable rates. As of
December 31, 1995, there were no amounts outstanding against this line.
Effective February 1, 1996, the $20,000 short-term line of credit and the
$125,000 term loan commitment were replaced by a $200,000 revolving term loan
facility from the same bank against which Telmark may draw short-term funds
bearing interest at money market rates or draw long-term debt at rates
appropriate for the term of the note drawn. The amounts outstanding as of
December 31, 1995 on the short-term line and term loan totaled $118,500 and
will be applied against the new $200,000 revolving term loan facility.
Telmark renews its lines of credit annually. The $4,000 line of credit has
been renewed through December 1996. As described above, the $200,000 revolving
term agreement is available beginning February 1, 1996 through February 1,
1997. The Company believes Telmark has sufficient lines of credit in place to
meet interim funding needs.
17
<PAGE>
PART II. OTHER INFORMATION
AGWAY INC. AND CONSOLIDATED SUBSIDIARIES
(Thousands of Dollars)
Item 1. Legal Proceedings
- --------------------------
In August 1995, the Environmental Protection Agency (EPA) notified Agway that
the EPA has reason to believe that Agway is a potentially responsible party
(PRP) under the Comprehensive Environmental Response, Compensation and
Liability Act (CERCLA) at the Tri-Cities Barrel Site, Port Crane, New York.
The EPA requested that Agway and other PRPs participate in the ongoing
Remedial Investigation/Feasibility Study (RI/FS) for the Tri-Cities Barrel
Site. Agway believes that its involvement at the Tri-Cities Barrel Site is
minimal. Agway discussed with other PRPs who have been participating in the
RI/FS the terms of possible participation in the ongoing RI/FS and decided not
to participate at this time.
Item 4. Submission of Matters to a Vote of Security Holders
- ------------------------------------------------------------
The Company held its annual meeting of shareholders on November 29, 1995, at
which a quorum was present in person or by proxy. The following Directors were
elected to three-year terms through December 1998:
Nominee In Favor Opposed
---------------------- ---------------------- ---------------
William W. Young 54,246 5,553
Andrew J. Gilbert 54,246 5,553
D. Gilbert Couser 54,246 5,553
Thomas E. Smith 54,246 5,553
Keith H. Carlisle 54,246 5,553
Eligible additional votes totaling 26,834 were not received at the time of the
annual meeting and are not included as either votes in favor or opposed.
Additionally, these 26,834 eligible additional votes may be considered
abstentions and were not included for purposes of determining a quorum at the
annual meeting.
The following is a list of directors whose terms as Directors continued after
the Annual Meeting:
Ralph H. Heffner - Chairman of the Board and Director
Robert L. Marshman - Vice Chairman of the Board and Director
Keith H. Carlisle - Director
Vyron M. Chapman - Director
D. Gilbert Couser - Director
Andrew J. Gilbert - Director
Peter D. Hanks - Director
Frederick A. Hough - Director
Samuel F. Minor - Director
Donald E. Pease - Director
Carl D. Smith - Director
Thomas E. Smith - Director
Gary K. Van Slyke - Director
Joel L. Wenger - Director
Edwin C. Whitehead - Director
Christian F. Wolff, Jr. - Director
William W. Young - Director
Item 6. Exhibits and Reports on Form 8-K
- -----------------------------------------
There were two reports on Form 8-K required to be filed during the second
quarter ended December 31, 1995.
The first report was filed on December 18, 1995, announcing the sale of H. P.
Hood Inc. to Catamount Dairy Holdings Limited Partnership.
The second report filed on December 22, 1995, included the pro forma financial
information associated with the sale of H. P. Hood Inc. to Catamount Dairy
Holdings Limited Partnership.
18
<PAGE>
PART II. OTHER INFORMATION
AGWAY INC. AND CONSOLIDATED SUBSIDIARIES
(Thousands of Dollars)
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.
AGWAY INC.
----------------------------------------
(Registrant)
Date February 5, 1996 /s/ PETER J. O'NEILL
-------------------------- ----------------------------------------
Peter J. O'Neill
Senior Vice President,
Finance & Control,
Treasurer and Controller
(Principal Financial Officer and
Chief Accounting Officer)
19
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000002852
<NAME> AGWAY INC
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUN-30-1996
<PERIOD-END> DEC-31-1995
<CASH> 0
<SECURITIES> 35904
<RECEIVABLES> 164891
<ALLOWANCES> 10459
<INVENTORY> 186737
<CURRENT-ASSETS> 541608
<PP&E> 532387
<DEPRECIATION> 292644
<TOTAL-ASSETS> 1191106
<CURRENT-LIABILITIES> 389404
<BONDS> 591527
0
62215
<COMMON> 2705
<OTHER-SE> 87769
<TOTAL-LIABILITY-AND-EQUITY> 1191106
<SALES> 654085
<TOTAL-REVENUES> 689989
<CGS> 611986
<TOTAL-COSTS> 635213
<OTHER-EXPENSES> 66694
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 14459
<INCOME-PRETAX> (18492)
<INCOME-TAX> (3103)
<INCOME-CONTINUING> (15389)
<DISCONTINUED> 2017
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (13372)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<RESTATED>
<CIK> 0000002852
<NAME> AGWAY INC
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUN-30-1995
<PERIOD-END> DEC-31-1994
<CASH> 0
<SECURITIES> 34923
<RECEIVABLES> 154687
<ALLOWANCES> 12665
<INVENTORY> 186331
<CURRENT-ASSETS> 547206
<PP&E> 527117
<DEPRECIATION> 280284
<TOTAL-ASSETS> 1182767
<CURRENT-LIABILITIES> 393951
<BONDS> 551635
0
68824
<COMMON> 2755
<OTHER-SE> 102277
<TOTAL-LIABILITY-AND-EQUITY> 1182767
<SALES> 679424
<TOTAL-REVENUES> 712033
<CGS> 639047
<TOTAL-COSTS> 656226
<OTHER-EXPENSES> 71555
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 13938
<INCOME-PRETAX> (26783)
<INCOME-TAX> (9055)
<INCOME-CONTINUING> (17728)
<DISCONTINUED> (2514)
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (20242)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
