<PAGE>
Filed Pursuant to Rule 424(b)(2)
Registration No. 333-67015
Prospectus Supplement to Prospectus dated December 9, 1998.
$150,000,000
[LOGO]
Universal Foods Corporation
6.50% Notes due April 1, 2009
---------------
Universal Foods Corporation will pay interest on the Notes on April 1 and
October 1 of each year. The first such payment will be made on October 1,
1999. The Notes will be issued only in denominations of $1,000 and integral
multiples of $1,000.
---------------
Neither the Securities and Exchange Commission nor any other regulatory
body has approved or disapproved of these securities or passed upon the
accuracy or adequacy of this prospectus. Any representation to the contrary is
a criminal offense.
---------------
<TABLE>
<CAPTION>
Per Note Total
-------- ------------
<S> <C> <C>
Initial public offering price............................ 99.252% $148,878,000
Underwriting discount.................................... 0.650% $ 975,000
Proceeds, before expenses, to the Company................ 98.602% $147,903,000
</TABLE>
The initial public offering price set forth above does not include accrued
interest, if any. Interest on the Notes will accrue from March 25, 1999, and
must be paid by the purchaser if Notes are delivered after March 25, 1999.
---------------
The underwriters expect to deliver the Notes in book-entry form only
through the facilities of The Depository Trust Company against payment in New
York, New York, on March 25, 1999.
Goldman, Sachs & Co.
First Chicago Capital Markets, Inc.
A BANK ONE Company
ABN AMRO Incorporated
---------------
Prospectus Supplement dated March 22, 1999.
<PAGE>
THE COMPANY
Universal Foods Corporation is an industrial marketer of high-performance
components that add functionality to foods, cosmetics, pharmaceuticals and
other products. Our principal products include:
. flavors, flavor enhancers and aroma chemicals for foods, beverages,
dairy/ice cream products, animal feed, personal care and household items;
. certified synthetic and natural colors for foods, cosmetics, specialty
inks and pharmaceuticals;
. dehydrated vegetable products sold primarily to food processors; and
. a broad line of yeast products for commercial baking and other uses.
We have organized our business into five divisions: Flavor, Color,
Dehydrated Products, Red Star Yeast & Products and Asia Pacific.
Flavor Division
We are a leading manufacturer and supplier of flavors, ingredient systems
and aroma chemicals to the dairy, food processing, beverage, personal care and
household products industries worldwide. We have a broad, distinctive and fully
integrated product offering, ranging from savory flavor components to fully
formulated flavor systems for dairy, beverage and processed food applications.
During 1998 we combined our bioproducts business (which was formerly
operated as a separate division known as Red Star BioProducts) with our Flavor
division. Our bioproducts business served the food processing, animal feed
processing and bionutrient industries with a broad line of natural extracts and
specialty flavors. We produce various specialty extracts from yeast, vegetable
proteins, meat, milk protein and other natural products, which are used
primarily as savory flavor and texture modifiers and enhancers in processed
foods. The nutritional and functional properties of these extracts also make
them useful in enzyme and pharmaceutical production. We believe we are the
leading supplier of yeast extracts and the second leading supplier of HVPs in
the U.S. market.
The Flavor division operates through our subsidiary, Universal Flavor
Corporation, with plants in Illinois, Indiana, Michigan, Missouri, Wisconsin,
Belgium, Canada, France, Germany, Italy, Mexico, Spain and the United Kingdom.
Color Division
We believe we are the world's leading manufacturer of certified colors for
use in the
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
Glossary
Some of the terms which describe our products have special meanings. They
include:
"bionutrients" are bioproducts "HVPs" or hydrolized vegetable
used as nutrients in the proteins are flavors obtained by
production of other foods or treating proteins from wheat,
pharmaceutical ingredients. corn, soybeans and other crops.
"bioproducts" are produced from "natural colors" are extracted
natural sources through from sources in the plant and
biological processes such as animal kingdom. Some natural
extraction, fermentation or colors are themselves nutrients or
modification by enzyme action. spices.
"certified colors" are synthetic "savory flavors" are flavor
colors which have been approved enhancers that provide richness
for use in foods, drugs or and fullness of body associated
cosmetics by the Food and Drug with the taste of cooked, roasted
Administration or, in some cases, or fried foods.
a regulatory authority of another
country.
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
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<PAGE>
food industry. We make certified synthetic and natural colors for domestic and
international producers of beverages, bakery products, processed foods,
confections, pet foods, cosmetics and pharmaceuticals. We also make ink-jet
inks and other high-purity organic dyes. The Color division operates primarily
through our subsidiary, Warner-Jenkinson Company Inc., which has its principal
manufacturing facility in Missouri and other plants in New Jersey, Canada,
Mexico, the United Kingdom, the Netherlands, France and Italy.
We became a supplier of ink-jet inks for the ink-jet printer market in 1997
with the acquisition of Tricon Colors, Inc. We produce pharmaceutical colors,
ink-jet inks and other high-purity organic dyes in the Tricon plant, which is
our second facility in New Jersey.
Dehydrated Products Division
We believe we are the third largest producer of dehydrated onion and garlic
products in the United States. We are also one of the largest producers and
distributors of chili powder, paprika, chili pepper and dehydrated vegetables
such as parsley, celery and spinach. Domestically, we sell dehydrated products
to food manufacturers for use as ingredients and also for repackaging under
private labels for sale to the retail market and to the food service industry.
The Dehydrated Products division operates in the United States through our
subsidiary, Rogers Foods, Inc., which has its processing facilities in
California.
In addition, we believe that, based on the range of products we offer, we
are one of the leading dehydrators of specialty vegetables in Europe. Our
processing facilities in the Netherlands and France expand our dehydrated
technology base, enabling us to produce puff and vacuum dried vegetables.
Vegetables processed using these technologies rehydrate faster than vegetables
processed using straight heat drying methods. This is a benefit with today's
convenience foods such as soups, snacks and other dry foods.
Red Star Yeast & Products Division
We believe we are the largest North American supplier of yeast to the
commercial bakery market. We also export yeast and related products throughout
the world. We specialize in the production of baker's yeast in cream (liquid),
compressed (semi-solid), and active dry form, as well as nutritional yeast and
yeast used in the wine-making process, which are all sold under the Red
Star(TM) trademark. In addition, we sell active dry yeast to food processors
for inclusion in bread, pizza and similar mixes.
We also manufacture compressed, active dry and fast-acting dry yeast
products in ready-to-use packages which are sold on grocery store shelves and
in convenient packages for food service use. We believe we are the second
largest supplier of yeast to the U.S. retail market.
Red Star's domestic yeast plants are located in Wisconsin, Maryland and
California.
Asia Pacific Division
In 1997, we established the Asia Pacific division as a separate operating
division to focus on marketing our diverse product line in the Pacific Rim
under one unified name. Through the Asia Pacific division, we offer a full
range of products from our other four divisions as well as products developed
by regional technical teams to appeal to local preferences. Sales, marketing
and technical functions previously directed by U.S. based divisions are managed
through the Asia Pacific division's headquarters in Singapore. Manufacturing
operations are located in Australia, Hong Kong, New Zealand and the
Philippines.
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<PAGE>
ADDITIONAL INFORMATION
For additional information about the Company, see "Management's Summary
Discussion and Analysis of Results of Operations and Financial Condition" and
the documents we have incorporated by reference. See "Where You Can Find More
Information" in the accompanying prospectus to find out how to locate documents
we have incorporated by reference.
USE OF PROCEEDS
The net proceeds from the sale of the Notes will be used to repay existing
short-term indebtedness under our bank credit facilities and borrowings under
our commercial paper program, which we used to acquire other companies, to fund
capital expenditures and to meet our working capital needs. As of March 22,
1999, approximately $182 million was outstanding under our bank facilities and
our commercial paper program, bearing interest at an average annual rate of
approximately 5.27%. Based on the balance outstanding at March 22, 1999, we
expect to use approximately $32 million of the net proceeds from the sale of the
Notes to repay borrowings from The First National Bank of Chicago, which is the
Trustee and also is an affiliate of one of the underwriters.
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<PAGE>
CAPITALIZATION
The following table shows our consolidated capitalization as of December
31, 1998, and as adjusted to give effect to the sale of the Notes and the
application of the estimated net proceeds as described under "Use of Proceeds":
<TABLE>
<CAPTION>
As of December 31, 1998
------------------------
Actual Adjusted
----------- ------------
(unaudited, dollars in
thousands)
<S> <C> <C>
Current maturities of long-term debt and short-term
borrowings (1)........................................ $ 56,357 $ 6,929
----------- -----------
Long-term debt excluding current maturities:
6.50% Notes due April 1, 2009........................ -- 150,000
Senior notes due through January 2011 (2)............ 199,000 199,000
Commercial paper and other short-term notes (1),
(3)................................................. 70,000 --
Various mortgage notes, capital lease obligations and
other notes......................................... 3,186 3,186
Notes and credit facilities payable in foreign
currencies (4)...................................... 19,118 19,118
----------- -----------
Total long-term debt............................... 291,304 371,304
----------- -----------
Shareholders' equity:
Common stock par value $0.10 a share, authorized
100,000,000 shares (5);
issued 53,954,874 shares............................ 5,396 5,396
Additional paid in capital........................... 74,751 74,751
Earnings reinvested in the business.................. 427,055 427,055
Less:
Treasury stock, at cost, 2,943,851 shares (6)........ 56,047 56,047
Accumulated other comprehensive income............... 37,127 37,127
Other................................................ 1,437 1,437
----------- -----------
Total shareholders' equity......................... 412,591 412,591
----------- -----------
Total capitalization............................. $ 760,252 $ 790,824
=========== ===========
</TABLE>
- --------
(1) Since December 31, 1998, we have incurred additional short-term borrowings,
a portion of which will be repaid with the proceeds from the sale of the
Notes. See "Use of Proceeds."
(2) These senior notes have maturities ranging from December 2002 through
January 2011 and bear interest at rates ranging from 6.38% to 9.06%.
(3) We have a $70 million multi-currency revolving loan agreement which expires
in August 2003. We issue short-term commercial paper obligations supported
by committed lines included in the revolving loan agreement. At December
31, 1998, $70 million of short-term borrowings were classified as long-term
debt reflecting our intent and ability, through the existence of the unused
credit facility, to refinance these borrowings.
(4) In July 1998 we entered into a foreign currency and interest rate swap. The
swap agreement converts $15 million of short-term variable rate borrowings
to fixed rate borrowings payable in deutschemarks on July 27, 2008.
(5) In January 1999, our Articles of Incorporation were amended to increase the
number of authorized shares of common stock to 250,000,000.
(6) As of December 31, 1998 and reflected in the above capitalization table, we
purchased 3,333,196 shares of common stock under our 5,000,000-share
repurchase program. From January 1, 1999 through March 5, 1999 we
repurchased an additional 516,100 shares of common stock.
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<PAGE>
SELECTED FINANCIAL DATA
The selected financial data appearing below should be read together with
the financial statements, notes and other financial information we are
incorporating by reference. See "Where You Can Find More Information" in the
accompanying prospectus. The selected financial data for each of the fiscal
years 1994 through 1998 are derived from our audited consolidated financial
statements. The selected financial data for the three months ended December 31,
1998 and December 31, 1997, are derived from our unaudited consolidated
financial statements. In our opinion, the unaudited consolidated financial
statements reflect all adjustments, consisting only of normal, recurring
adjustments, necessary for a fair presentation of such periods. Our results of
operations for the three months ended December 31, 1998 do not necessarily
indicate what our operating results will be for the full fiscal year.
<TABLE>
<CAPTION>
Three months
ended
Fiscal years ended September 30, December 31,
------------------------------------------------ ------------------
1994 1995 1996 1997 1998 1997 1998
-------- -------- -------- -------- -------- -------- --------
(in thousands, except per share and ratio data)
<S> <C> <C> <C> <C> <C> <C> <C>
Operating Results:
Revenue................ $929,863 $792,971 $806,352 $825,714 $856,772 $208,889 $217,535
Cost of products sold.. 616,752 518,194 533,260 551,090 556,048 137,007 141,847
Selling and
administrative
expenses (1).......... 203,965 171,914 164,186 167,390 171,862 43,602 44,479
Unusual items (2)...... 12,125 (26,847) 25,000 -- -- -- --
-------- -------- -------- -------- -------- -------- --------
Operating income....... 97,021 129,710 83,906 107,234 128,862 28,280 31,209
Interest expense....... 15,888 15,107 15,266 16,798 21,185 4,966 5,757
-------- -------- -------- -------- -------- -------- --------
Earnings before income
taxes................. 81,133 114,603 68,640 90,436 107,677 23,314 25,452
Income taxes........... 30,222 48,500 24,435 25,748 35,033 8,043 8,577
-------- -------- -------- -------- -------- -------- --------
Net earnings........... $ 50,911 $ 66,103 $ 44,205 $ 64,688 $ 72,644 $ 15,271 $ 16,875
======== ======== ======== ======== ======== ======== ========
Other Operating Data:
Ratio of earnings to
fixed charges (3)..... 4.8 7.6 4.9 5.6 5.5 5.3 5.1
Depreciation and
amortization.......... $ 36,378 $ 34,641 $ 33,519 $ 37,326 $ 44,232 $ 11,033 $ 12,442
Capital expenditures... 55,071 42,562 59,012 73,502 66,063 14,819 11,243
Financial Condition (at
end of period):
Total debt as a
percentage of total
capitalization........ 37.6% 34.3% 36.9% 41.1% 45.7% 43.3% 45.7%
Working capital........ $135,676 $143,764 $162,452 $163,721 $147,935 $189,136 $155,406
Property, plant and
equipment, net........ 255,719 259,688 268,461 308,979 355,579 312,135 353,657
Total assets........... 763,664 776,870 780,472 887,729 991,226 889,530 995,865
Long-term debt......... 172,235 160,678 196,869 252,526 291,588 282,554 291,304
Shareholders' equity... 327,390 361,780 350,966 380,451 405,645 378,522 412,591
</TABLE>
- --------
(1) The fiscal 1997 results include a fourth quarter pretax charge of $7.5
million for integrating two divisions.
(2) The fiscal 1996 results include a pretax charge of $25.0 million relating
to adopting Statement of Financial Accounting Standards No. 121,
"Accounting for the Impairment of Long-Lived Assets and for Long-Lived
Assets to be Disposed Of." The fiscal 1995 results include a net pretax
gain of $26.8 million relating to the sale of our frozen foods business,
the cost of discontinuing a product line and other items. The fiscal 1994
results include a pretax restructuring charge of $12.1 million.
(3) We have calculated the ratios of earnings to fixed charges according to a
formula the SEC requires us to use. This formula has special definitions
for earnings (generally, our pre-tax earnings from operations, less
interest expense) and fixed charges (generally, all interest and interest-
related payments and accruals). If you would like to see how we have
calculated these ratios, you should review Exhibit 12.1 to the registration
statement. See "Where You Can Find More Information" in the accompanying
prospectus to find out how you can locate a copy of the registration
statement.
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<PAGE>
MANAGEMENT'S SUMMARY DISCUSSION AND ANALYSIS
OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION
The following is a brief discussion of our historical results of operations
and financial condition and has been excerpted from the Management's Discussion
and Analysis of Results of Operations and Financial Condition included in our
Form 10-Q for the quarter ended December 31, 1998 and our Form 10-K for the
fiscal year ended September 30, 1998. You should read those discussions and our
consolidated financial statements for more complete information.
Results of Operations
Three months ended December 31, 1998 and 1997
Revenue from operations during the three months ended December 31, 1998
increased 4.1% to $217.5 million, compared with $208.9 million in 1997. We
reported strong revenue increases in the Flavor division as a result of volume
gains in the U.S. combined with revenue from recent acquisitions. The
Dehydrated Products division also reported increased domestic volumes. Our
revenue gains were partially offset by lower sales in the Color division due to
softness in the ink-jet ink and synthetic dye businesses.
Gross profit margins increased to 34.8% for the first quarter of fiscal
1999 compared with 34.4% for the same period last year primarily due to the
improvements in the U.S. market for the Flavor division and lower raw material
costs at most divisions.
Selling and administrative expenses decreased slightly to 20.4% of revenue
during the three months ended December 31, 1998, compared to 20.9% for the same
period last year as revenue increases significantly exceeded cost increases in
the Flavor and Dehydrated Products divisions.
As a result of higher average borrowings outstanding, interest expense in
the first quarter increased to $5.8 million from $5.0 million in the same
period last year. The increased borrowings were used primarily to fund
acquisitions.
Fiscal Years ended September 30, 1998, 1997 and 1996
Net earnings for 1998 were $72.6 million, compared with $64.7 million for
1997 and $44.2 million for 1996. The 1996 earnings reflect pretax charges from
unusual items of $25.0 million ($16.7 million after tax).
Revenue for 1998 increased to $856.8 million from $825.7 million in 1997
and $806.4 million in 1996. Our Dehydrated Products and Flavor divisions
reported strong revenue growth in 1998. Our Dehydrated Products division
revenue reflects strong volume increases in the U.S. business. Our Flavor
division revenue includes modest gains in the U.S. and solid gains in the
international business which benefitted from 1998 acquisitions. Our Color and
Red Star Yeast & Products divisions reported modest revenue gains in 1998,
while revenue for our Asia Pacific division was slightly lower than the prior
year. In 1997, our Color and Dehydrated Products divisions reported solid
revenue growth. Our Red Star Yeast & Products division revenue was flat
reflecting the impact of customers moving to cream yeast, which reduces both
revenue and product cost. Our Flavor division revenue declined in 1997
primarily from continued weakness in the dairy segment and slack demand for
beef products in the United Kingdom.
Revenue generated outside the United States, including exports, increased
to 41% of revenue from 40% in 1997. Approximately 57% of 1998 and 1997 foreign
revenue was derived from Europe. We also generate foreign revenue in Canada,
Mexico and the Pacific Rim. Changes in foreign currency rates had no material
effect on revenue and expenses in 1998.
The cost of products sold was 64.9% of revenue in 1998, 66.7% in 1997 and
66.1% in 1996. The decrease in cost of products sold as a percent of revenue in
1998 reflects lower raw material costs in our Color and Red Star Yeast &
Products divisions, combined with customers continuing to move to more
sophisticated proprietary products. The increase of product costs in 1997
resulted primarily from decreased
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margins in the Flavor business, as market weakness in North America negatively
impacted both pricing and capacity utilization.
Selling and administrative expenses in 1998 increased 2.7% to $171.9
million from $167.4 million in 1997 and $164.2 million in 1996. Selling and
administrative expenses were 20.1% of revenue in 1998, 20.3% in 1997 and 20.4%
in 1996. Included in 1997 selling and administrative expenses are $7.5 million
of integration expenses for the cost of combining our Red Star BioProducts and
Flavor divisions.
Operating income increased $21.7 million in 1998 to $128.9 million from
$107.2 million in 1997 and $83.9 million in 1996. All divisions, except Asia
Pacific, reported strong operating income increases in 1998. The Flavor
division's results were favorably impacted by acquisitions and savings from the
Red Star BioProducts consolidation. Operating income in 1997 includes strong
gains by the Color and Dehydrated Products divisions, reduced by $7.5 million
of integration expenses. Color division results include Tricon Colors, Inc.
since we acquired it in the second quarter of 1997. Operating income in 1996
was reduced by unusual items which included a $20 million non-cash charge in
adopting Statement of Financial Accounting Standards No. 121, "Accounting for
the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed
Of." We also recorded a $5.0 million restructuring charge in 1996 to address
opportunities to streamline our production base, improve efficiency and reduce
operating costs.
The effective income tax rate was 32.5% in 1998, 28.5% in 1997 and 35.6% in
1996. The lower effective tax rates in 1998 and 1997 reflect settlements of
prior years' issues and other items. Excluding the effect of these items, the
effective tax rate would have been approximately 34.0% in 1998 and 1997.
Financial Condition
Three months ended December 31, 1998 and 1997
The current ratio remained constant at 1.7 at December 31, 1998 and
September 30, 1998. Net working capital increased $7.5 million to $155.4
million at December 31, 1998 from $147.9 million at September 30, 1998.
Net cash provided by operating activities was $14.3 million for the quarter
ended December 31, 1998, compared to $4.8 million for the quarter ended
December 31, 1997. The increase in net cash provided by operating activities in
fiscal 1999 was primarily due to higher earnings and depreciation and lower
income tax payments.
Net cash used in investing activities was $11.1 million for the three
months ended December 31, 1998. Included in investing activities were capital
additions of $11.2 million. The capital expenditure program reflects our
continuing commitment to maintain and enhance product quality, further automate
and upgrade manufacturing processes, and expand the business through internal
growth.
Net cash used in financing activities was $4.5 million for the quarter,
compared with cash provided by financing activities of $11.0 million in the
comparable period last year. Proceeds from net borrowings of $6.4 million were
used primarily to fund capital expenditures and purchase treasury stock.
Dividends of $6.8 million were paid during the first three months of fiscal
1999 and 1998, respectively.
Fiscal Years ended September 30, 1998, 1997 and 1996
Cash provided by operating activities was $94.1 million in 1998, $93.7
million in 1997 and $92.0 million in 1996. The 1998 and 1997 amounts include
increases in net earnings and depreciation, offset by an increase in net
operating assets.
Cash used for investing activities increased to $133.9 million in 1998 from
$129.3 million in 1997 and $61.6 million in 1996. Cash used for acquisitions
was $68.7 million in 1998 and $50.5 million in 1997. Capital expenditures
totaled $66.1 million in 1998 and $73.5 million in 1997. Both years reflect
expenditures for productivity improvements and plant expansions. In addition,
the Flavor division completed construction of two technical centers in 1998. In
1999, capital expenditures are estimated to be
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<PAGE>
between $65 million and $75 million; depreciation expense should approximate
$45 million.
Financing activities provided cash of $39.6 million in 1998 and $35.6
million in 1997. During 1998 and 1997 we repurchased 964,396 and 285,200 shares
of treasury stock at a cost of $21.8 million and $5.8 million, respectively.
Net additional borrowings were $75.0 million in 1998 compared to $59.8 million
in 1997. The majority of the 1998 and 1997 borrowings were used to finance
acquisitions. We use debt financing to lower our overall cost of capital, which
increases the return to shareholders. We maintain debt levels considered
prudent based on our cash flows, interest coverage and percentage of total debt
to total capital.
We have paid uninterrupted quarterly cash dividends since our stock began
trading publicly over 35 years ago. In 1998, dividends paid per share were
$0.53, up 1.9% from $0.52 in 1997, which was an increase of 4.0% over 1996.
The impact of inflation on our financial position and results of operations
has been minimal and is not expected to adversely affect 1999 results.
FORWARD-LOOKING STATEMENTS
This prospectus supplement, the accompanying prospectus and the information
incorporated by reference contain certain statements that are "forward-
looking," within the meaning of Section 27A of the Securities Act of 1933, as
amended (the "Securities Act"), including statements regarding, among other
matters, our beliefs, expectations, plans and estimates with respect to certain
future events, the impact of governmental regulation, the impact of litigation
and regulatory proceedings, actions to be taken by others and similar
expressions concerning matters that are not historical facts. Such forward-
looking statements are not guarantees of future performance and involve known
and unknown risks, uncertainties and other factors that could cause actual
events to differ materially from those expressed in those statements.
We do not undertake to publicly update or revise our forward-looking
statements even if experience or future changes make it clear that any
projected results expressed or implied therein will not be realized. This
prospectus supplement, the prospectus and the documents we have incorporated by
reference contain forward-looking statements that reflect our current
assumptions and estimates of future economic circumstances, industry
conditions, our performance and financial results, in particular, earnings
growth and return on shareholders' equity. A variety of factors could cause our
actual results and experience to differ materially from the anticipated
results. These factors and assumptions include the pace and nature of new
product introductions by our customers, execution of our acquisition program,
industry and economic factors related to our international business, and the
outcome of various productivity-improvement and cost-reduction efforts.
DESCRIPTION OF THE NOTES
The following information concerning the Notes supplements and should be
read together with the information in the accompanying prospectus under
"Description of the Debt Securities." Capitalized terms that are not defined in
this summary are defined in the accompanying prospectus or in the indenture.
General
The Notes will be issued as a series under the indenture dated November 9,
1998, between us and The First National Bank of Chicago, as Trustee. The
indenture is more fully described in the accompanying prospectus.
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<PAGE>
The Notes will be unsecured obligations of Universal Foods Corporation
limited in aggregate principal amount to $150,000,000 and will mature on April
1, 2009.
The Notes will bear interest from March 25, 1999, payable semiannually in
arrears on each April 1 and October 1, beginning on October 1, 1999, at the
rate set forth on the cover page of this prospectus supplement, to the persons
in whose names the Notes are registered on the immediately preceding March 15
and September 15, respectively.
The principal of and interest and premium (if any) on the Notes will be
payable, the transfer of Notes will be registrable and the Notes may be
presented for exchange, at the corporate trust office of the Trustee, The
First National Bank of Chicago, 14 Wall Street, 8th Floor, New York, New York,
10005 Attention: Corporate Trust Administration. The First National Bank of
Chicago also has a commercial banking relationship with us. In addition, The
First National Bank of Chicago is an affiliate of First Chicago Capital
Markets, Inc., which is one of the underwriters for the offering of the Notes.
Pursuant to the Trust Indenture Act of 1939, as amended, if a default
occurs under the Notes while The First National Bank of Chicago has
a conflicting interest (as defined by the Trust Indenture Act) with respect to
the Notes, The First National Bank of Chicago is required to resign as Trustee
within 90 days of default unless the default is cured, duly waived or
otherwise eliminated or a new trustee is appointed.
As long as the Notes are represented by global debt securities, the
interest payable on the Notes will be paid to Cede & Co., the nominee of DTC,
or its registered assigns as the registered owner of the global debt
securities, by wire transfer of immediately available funds on each of the
applicable interest payment dates. If the Notes are no longer represented by
global debt securities, payment of interest may, at our option, be made by
check mailed to the address of the person entitled thereto. No service charge
will be made for any transfer or exchange of Notes, but we may require payment
of an amount sufficient to cover any tax or other governmental charge payable
in connection therewith.
No sinking fund is provided for the Notes.
Optional Redemption
The Notes will not be redeemable, in whole or in part, at our option prior
to maturity.
Defeasance
The provisions described in the accompanying prospectus under the caption
"Description of the Debt Securities--Defeasance" are applicable to the Notes.
Book-Entry, Delivery and Form
The Notes will be represented by global debt securities that will be
deposited with, or on behalf of, DTC, as Depositary, and registered in the
name of Cede & Co., the nominee of DTC.
Unless and until they are exchanged in whole or in part for certificated
notes in definitive form, the global debt securities may not be transferred
except as a whole by DTC to a nominee of DTC or by a nominee of DTC to DTC or
another nominee of DTC or by DTC or any such nominee to a successor depositary
or a nominee of such successor depositary.
You can read more about DTC and its procedures with respect to the Notes in
the accompanying prospectus under the headings "About DTC" and "Description of
the Debt Securities--Registration, Transfer and Payment of Interest and
Principal."
VALIDITY OF THE NOTES
The validity of the Notes offered in this prospectus supplement will be
passed upon for us by Whyte Hirschboeck Dudek S.C., Milwaukee, Wisconsin, and
for the underwriters by Sullivan & Cromwell, New York, New York.
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<PAGE>
UNDERWRITING
The Company and the underwriters for the offering (the "Underwriters")
named below have entered into an underwriting agreement with respect to the
Notes. Subject to certain conditions, each Underwriter has severally agreed to
purchase the aggregate principal amount of Notes indicated in the following
table.
<TABLE>
<CAPTION>
Principal
Amount of
Underwriters Notes
------------ ------------
<S> <C>
Goldman, Sachs & Co............................................ $ 90,000,000
First Chicago Capital Markets, Inc. ........................... 37,500,000
ABN AMRO Incorporated.......................................... 22,500,000
------------
Total........................................................ $150,000,000
============
</TABLE>
----------------
Notes sold by the Underwriters to the public will initially be offered at
the initial public offering price set forth on the cover of this prospectus.
Any Notes sold by the Underwriters to securities dealers may be sold at a
discount from the initial offering price of up to 0.400% of the principal
amount of the Notes. Any such securities dealers may resell any Notes purchased
from the Underwriters to certain other brokers or dealers at a discount from
the initial offering price of up to 0.250% of the principal amount of the
Notes. If all the Notes are not sold at the initial offering price, the
Underwriters may change the offering price and the other selling terms.
The Notes are a new issue of debt securities with no established trading
market. The Company has been advised by the Underwriters that they intend to
make a market in the Notes, but they are not obligated to do so and may
discontinue market making at any time without notice. No assurance can be given
as to the liquidity of the trading market for the Notes.
In connection with the offering, the Underwriters may purchase and sell the
Notes in the open market. These transactions may include short sales,
stabilizing transactions and purchases to cover positions created by short
sales. Short sales involve the sale by the Underwriters of a greater aggregate
principal amount of Notes than they are required to purchase in the offering.
Stabilizing transactions consist of certain bids or purchases made for the
purpose of preventing or retarding a decline in the market price of the Notes
while the offering is in progress.
The Underwriters also may impose a penalty bid. This occurs when a
particular Underwriter is required to repay to the Underwriters a portion of
the underwriting discount received by it because the Underwriters have
repurchased Notes sold by or for the account of such Underwriter in stabilizing
or short covering transactions.
These activities by the Underwriters may stabilize, maintain or otherwise
affect the market price of the Notes. As a result, the price of the Notes may
be higher than the price that otherwise might exist in the open market. If
these activities are commenced, they may be discontinued by the Underwriters at
any time. These transactions may be effected in the over-the-counter market or
otherwise.
The Company estimates that its share of the total expenses of the offering,
excluding underwriting discounts and commissions, will be approximately
$390,000.
In the ordinary course of business, Goldman, Sachs & Co. has in the past
performed, and may in the future perform, investment banking services for the
Company for which it has received, and
S-10
<PAGE>
may in the future receive, fees or other compensation. Affiliates of both First
Chicago Capital Markets, Inc. and ABN AMRO Incorporated have engaged, and may
in the future engage, in general financing and banking transactions with the
Company for which they have received, and may in the future receive,
compensation in the ordinary course of business. The First National Bank of
Chicago, an affiliate of First Chicago Capital Markets, Inc. is Trustee under
the indenture for the Notes. In addition, affiliates of both First Chicago
Capital Markets, Inc. and ABN AMRO Incorporated are lenders to us under our
revolving credit facility and may receive a portion of the amounts repaid under
our revolving credit facility with the proceeds of this offering. See "Use of
Proceeds." Accordingly, this offering is being made in compliance with Section
2710(c)(8) of the Conduct Rules of the National Association of Securities
Dealers, Inc.
The Company has agreed to indemnify the several Underwriters against
certain liabilities, including liabilities under the Securities Act.
S-11
<PAGE>
Universal Foods Corporation
[UNIVERSAL FOODS LOGO APPEARS HERE]
Up to $300,000,000 of Debt Securities
We may offer debt securities from time to time in one or more series and in
amounts, at prices and on terms to be determined at the time we offer them. The
total offering price of the debt securities will not exceed $300,000,000. For
information about the terms of the debt securities, see "Description of the
Debt Securities."
This prospectus may not be used to sell the debt securities unless we also
furnish you with a prospectus supplement which contains the final terms for
each series of debt securities. You should read this prospectus and any
prospectus supplement carefully before you invest.
The debt securities are not listed for trading on any national securities
exchange or on The Nasdaq Stock Market.
The accompanying prospectus supplement identifies any underwriters involved
in the sale of the debt securities, the amount to be purchased by them and the
compensation they will receive. For more information, see "Plan of
Distribution."
----------------
Neither the Securities and Exchange Commission nor any other regulatory
body has approved or disapproved of these securities or passed upon the
adequacy of this prospectus. Any representation to the contrary is a criminal
offense.
----------------
Prospectus dated December 9, 1998.
<PAGE>
ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement that we filed with the
SEC utilizing a "shelf" registration process. Under this process, we may sell
debt securities in one or more offerings for up to a total dollar amount of
$300,000,000. This prospectus provides you with a general description of the
debt securities. Each time we offer a series of debt securities, we will
provide a prospectus supplement that will contain specific information about
the terms of that offering. The prospectus supplement may also add, update or
change information contained in this prospectus. You should read both this
prospectus and any prospectus supplement together with additional information
described under the heading "Where You Can Find More Information."
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and current reports, proxy statements and other
information with the SEC. You may read and copy any document we file, including
the registration statement, at the SEC's public reference room located at 450
Fifth Street, N.W., Washington, D.C. 20549, or its public reference rooms
located in New York, New York and Chicago, Illinois. You may call the SEC at 1-
800-SEC-0330 for further information about the public reference rooms. Our SEC
filings are also available to the public on the SEC's web site at
http://www.sec.gov. They are located in the EDGAR database on that web site.
The SEC allows us to "incorporate by reference" the information we file
with them, which means that we can disclose important information to you by
referring you to those documents. The information incorporated by reference is
considered to be part of this prospectus, and later information that we file
with the SEC will automatically update and supersede this information. We
incorporate by reference the documents listed below and any future filings we
make with the SEC (including any filings we make prior to the effectiveness of
the registration statement) under Sections 13(a), 13(c), 14, or 15(d) of the
Securities Exchange Act of 1934 until we sell all the debt securities.
. Our Annual Report on Form 10-K for the fiscal year ended September 30,
1997;
. Our Quarterly Reports on Form 10-Q for the quarters ended December 31,
1997, March 31, 1998, and June 30, 1998;
. Our Current Report on Form 8-K dated April 10, 1998, which describes the
2-for-1 stock split we completed in May, 1998; and
. Our Registration Statement on Form 8-A dated July 20, 1998 and our
Current Reports on Form 8-K dated June 26, 1998 and August 6, 1998,
which relate to a preferred share purchase rights plan we adopted in
June, 1998.
You may request a copy of these filings, at no cost, by writing or
telephoning us at the following address:
John L. Hammond
Universal Foods Corporation
433 East Michigan Street
Milwaukee, Wisconsin 53202
(414) 271-6755
1
<PAGE>
THE COMPANY
Universal Foods Corporation is an industrial marketer of high-performance
components that add functionality to foods, cosmetics, pharmaceuticals and
other products. Our principal products include:
. flavors, flavor enhancers and aroma chemicals, for foods, beverages,
dairy/ice cream products, animal feed, personal care and household
items;
. certified synthetic and natural colors for foods, cosmetics, specialty
inks and pharmaceuticals;
. dehydrated vegetable products sold primarily to food processors; and
. a broad line of yeast products for commercial baking and other uses.
For additional information, see the documents we have incorporated by
reference. See "Where You Can Find More Information."
RATIOS OF EARNINGS TO FIXED CHARGES
Our consolidated ratios of earnings to fixed charges for the nine month
periods ended June 30, 1997 and 1998 and for each of the fiscal years ended
September 30, 1993 through 1997 are as follows:
<TABLE>
<CAPTION>
Fiscal years ended September 30, Nine months ended June 30,
------------------------------------------------ --------------------------------
1993 1994 1995 1996 1997 1997 1998
---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
5.5 4.8 7.6 4.9 5.6 5.9 5.4
</TABLE>
We have calculated the ratios of earnings to fixed charges according to a
formula the SEC requires us to use. This formula has special definitions for
earnings (generally, our pre-tax earnings from operations, less interest
expense) and fixed charges (generally, all interest and interest-related
payments and accruals). If you would like to see how we have calculated these
ratios, you should review Exhibit 12.1 to the registration statement. See
"Where You Can Find More Information" to find out how you can locate a copy of
the registration statement.
USE OF PROCEEDS
The prospectus supplement will describe how we will use the net proceeds
from the sale of a particular series of debt securities.
DESCRIPTION OF THE DEBT SECURITIES
General
We will issue the debt securities under an indenture dated November 9,
1998. The First National Bank of Chicago, a national banking association, is
the Trustee under the indenture.
We have summarized selected provisions of the indenture below. The summary
is not complete. The form of the indenture has been filed as an exhibit to the
registration statement and you should read the indenture for more information
on provisions that may be important to you. See "Where You Can Find More
Information" to find out how to locate the indenture. You may also review the
indenture at the Trustee's offices at One First National Plaza, Suite 0126,
Chicago, Illinois 60670-0126.
2
<PAGE>
In the summary below, we have included references to section numbers of the
indenture so that you can easily locate these provisions. Capitalized terms
that are not defined in this summary are defined in the indenture.
A prospectus supplement relating to any series of debt securities that we
offer will include specific terms relating to that series. These terms will
include some or all of the following:
. The total principal amount;
. The dates on which principal will be payable;
. The interest rate and the interest payment dates;
. Any discount or premium at which we will offer that series of debt
securities to the public;
. Any payments due if the maturity is accelerated;
. Any optional redemption periods;
. Any sinking fund or other provisions that would obligate us to
repurchase or otherwise redeem that series of debt securities;
. Any provisions granting special rights to holders when a specified event
occurs;
. Any changes to or additional Events of Default or covenants;
. Any special tax implications of that series of debt securities; and
. Any other terms of that series of debt securities.
The indenture does not limit the amount of debt securities that may be
issued. The indenture allows debt securities to be issued up to any principal
amount that we may authorize and in any currency or currency unit we designate.
Debt securities of a series may be issued in registered or global form.
[Section 301(16)]
Concerning the Trustee and Paying Agent
The Trustee may resign at any time or may be removed by the holders of at
least a majority in aggregate principal amount of any series of the outstanding
debt securities. If the Trustee resigns, is removed or becomes incapable of
acting as Trustee or if a vacancy occurs in the office of the Trustee for any
cause, a successor Trustee shall be appointed in accordance with the provisions
of the indenture.
The Trustee will also act as paying agent for the debt securities, unless a
different paying agent is identified in any prospectus supplement.
Denominations
The prospectus supplement for each series of debt securities will state
whether the debt securities will be issued in registered form in multiples of
$1,000.
Consolidation, Merger or Sale
The indenture generally permits a consolidation or merger between the
Company and another corporation. It also permits the sale by us of all or
substantially all of our property and assets. If this happens, the remaining or
acquiring corporation (if other than us) must assume all of our
responsibilities and liabilities under the indenture including the payment of
all amounts payable on the debt securities and performance of all the covenants
in the indenture. If we sell all or substantially all of our assets, we will be
released from all our liabilities and obligations under the indenture and under
the debt securities. [Sections 801 and 802]
However, the Company may only consolidate or merge with or into any other
corporation or sell all or substantially all of our assets according to the
terms and conditions of the indenture. Briefly, under the indenture, the merger
must not cause an Event of Default to occur. Also, the debt securities must be
secured equally and ratably with any other debt secured by a mortgage, pledge,
lien or other security interest arising as a result of the
3
<PAGE>
merger, unless such mortgage, pledge, lien or other security interest is
otherwise permitted by the indenture. [Section 801] The remaining or acquiring
corporation will be substituted for us in the indenture with the same effect as
if it had been an original party to the indenture. Thereafter, the successor
corporation may exercise our rights and powers under the indenture, in our name
or in its own name. Any act or proceeding required or permitted to be done by
our board of directors or any of our officers may be done by the board or
officers of the successor corporation.
Modification of Indenture
Under the indenture, our rights and obligations and the rights of the
holders may be modified with the consent of the holders of at least a majority
in aggregate principal amount of the outstanding debt securities of each series
affected by the modification. No modification of the principal or interest
payment terms, or reduction of the percentage of holders required to consent to
modifications, is effective against any holder without its consent. [Section
902]
Events of Default
"Event of Default" when used in the indenture, means any of the following
[Section 501]:
. failure to pay the principal of or any premium on any debt security when
due;
. failure to deposit any sinking fund payment when due;
. failure to pay interest on any debt security for 30 days;
. failure to perform, or breach of, any other covenant in the indenture
that continues for 60 days after we are given written notice;
. a principal payment default at maturity on other debt for borrowed money
totaling $10 million or more, or our obligation to repay other debt for
borrowed money totaling $10 million or more is accelerated by our
lenders, unless, within 10 days from the date we receive a notice of
such default under the indenture from the Trustee or the holders of the
debt securities, we either pay the other debt in full or cause the
acceleration of the other debt to be rescinded;
. certain events of bankruptcy, insolvency or reorganization; or
. any other Event of Default for that series of debt securities.
An Event of Default for a particular series of debt securities may, but
does not necessarily constitute an Event of Default for any other series of
debt securities. The Trustee may withhold notice to the holders of debt
securities of any default (except in the payment of principal or interest on
the debt securities) if it decides that withholding notice is in the best
interests of the holders. [Section 602]
If an Event of Default for any series of debt securities occurs and
continues, the Trustee or the holders of at least 25% in aggregate principal
amount of the debt securities of the series may declare the entire principal of
all the debt securities of that series to be due and payable immediately. If
this happens, subject to certain exceptions (such as an Event of Default
arising from our bankruptcy or insolvency), the holders of a majority of the
aggregate principal amount of the debt securities of that series can void the
declaration. [Section 502]
The Trustee is not obligated to exercise any of its rights or powers under
the indenture at the request, order or direction of any holders, unless the
holders offer the Trustee reasonable indemnity against costs, expenses and
liabilities. [Section 603(5)] If they provide this reasonable indemnification,
the holders of a majority in principal amount of the outstanding debt
securities of any series may direct the time, method and place of conducting
any proceeding or any remedy available to the Trustee, or exercising any power
conferred upon the Trustee, for any series of debt securities. [Section 512]
4
<PAGE>
Covenants
Under the indenture, we have agreed to:
. pay the principal of and interest and any premium on the debt securities
when due [Section 1001];
. maintain a place of payment [Section 1002];
. deposit sufficient funds with the paying agent on or before the due date
for any principal, interest or any premium payment or, if we act as our
own paying agent, segregate such funds and hold them in trust for the
benefit of the holders of the debt securities [Section 1003];
. maintain our corporate existence and our properties and assets and pay
all material taxes and claims (except those we are contesting in good
faith) when due [Section 1005 through 1007]; and
. deliver a report to the Trustee at the end of each fiscal year reviewing
our obligations under the indenture [Sections 704 and 1004].
Restriction on Liens
Some of our assets may be subject to a mortgage or other legal mechanism
that gives some lenders preferential rights in those assets over other lenders
(including you and the other holders of the debt securities) and over our
general creditors if we fail to pay them back. These preferential rights are
called "Liens." Under the indenture, we have agreed that the Company and our
Domestic Subsidiaries will not become obligated on any new debt that is secured
by a Lien on any Principal Domestic Manufacturing Property, or on any shares of
stock or debt of any of our Domestic Subsidiaries, unless we grant an
equivalent or higher-ranking Lien on the same property to you and the other
holders of the debt securities. [Section 1008]
We do not need to comply with this restriction if the amount of all debt
that would be secured by Liens on Principal Domestic Manufacturing Properties
(including the new debt and all "Attributable Debt", as described
- --------------------------------------------------------------------------------
Other Defined Terms. As used in both the Restrictions on Liens covenant and the
Restrictions on Sale and Leasebacks covenant:
"Attributable Debt" means the total net amount of rent that is required to be
paid during the remaining term of any lease (discounted at the rate of interest
in the lease or, if this is not available, at the highest rate of interest of
any series of debt securities compounded semi-annually).
"Consolidated Net Tangible Assets" means the total amount of assets (less
reserves and certain other permitted deductible items), after subtracting all
current liabilities and all goodwill, trade names, trademarks, patents,
unamortized debt discounts and expenses and similar intangible assets, as such
amounts appear on our most recent consolidated balance sheet and computed in
accordance with generally accepted accounting principles.
"Domestic Subsidiary" means any of our Subsidiaries which is incorporated or
organized in the United States. A "Subsidiary" is a corporation in which the
Company and/or one or more of our other Subsidiaries owns at least 50% of the
voting stock.
"Funded Debt" means all debt for borrowed money that:
. has a maturity of 12 months or more from the date on which the calculation
of Funded Debt is made; or
. has a maturity of less than 12 months from that date but is by its terms
renewable or extendible beyond 12 months from that date at the option of the
borrower.
"Principal Domestic Manufacturing Property" means any building or other
structure or facility, and the land on which it sits and its associated
fixtures, used primarily for manufacturing or processing and that is located in
the United States which has a book value, before depreciation, of greater than
5% of Consolidated Net Tangible Assets, other than a building, structure or
other facility that our Board of Directors has determined is not of material
importance to the total business that we and our subsidiaries conduct.
- --------------------------------------------------------------------------------
5
<PAGE>
under "Restriction on Sale and Leasebacks" below, that results from a sale and
leaseback transaction involving Principal Domestic Manufacturing Properties) is
less than 15% of our Consolidated Net Tangible Assets.
This Restriction on Liens covenant does not apply to debt secured by:
. Liens on the property of any of our Domestic Subsidiaries, or on their
shares of stock or debt, if those Liens existed at the time the
corporation became our Domestic Subsidiary;
. Liens in favor of the Company or our Domestic Subsidiaries;
. Liens in favor of U.S. Governmental bodies;
. Liens on property that existed at the time we acquired the property
(including property we may acquire through a merger or similar
transaction) or that we granted in order to purchase the property
(sometimes called "purchase money mortgages"); and
. Liens that extend, renew or replace any of the listed types of Liens.
The indenture does not limit the amount of unsecured debt of the Company
and its subsidiaries.
Restriction on Sale and Leasebacks
Under the indenture, we have agreed that neither we nor any of our Domestic
Subsidiaries will enter into any sale and leaseback transaction involving a
Principal Domestic Manufacturing Property, unless we comply with this covenant.
A "sale and leaseback transaction" is, in substance, an arrangement between a
company and a lender in which the company sells a property to the lender and
then leases it back from the lender. [Section 1009]
This Restriction on Sale and Leaseback covenant does not apply:
. to a sale and leaseback completed within 120 days after the completion
of construction of the property and the beginning of its full operation;
. if the Company or our Domestic Subsidiary could grant a Lien on the
Principal Domestic Manufacturing Property in an amount equal to the
Attributable Debt for the sale and leaseback transaction without being
required to grant an equivalent or higher-ranking Lien to the holders of
the debt securities under the Restriction on Liens described above;
. to any sale and leaseback transaction that is between the Company and
one of our Domestic Subsidiaries or between Domestic Subsidiaries; or
. that involves a lease for a period of 3 years or less.
We can comply with this covenant if we retire an amount of Funded Debt,
within 120 days of the transaction, that equals or exceeds the greater of: (i)
proceeds of the sale of the Principal Domestic Manufacturing Property that we
lease in the transaction, or (ii) the fair value of that property (subject to
credits for certain voluntary retirements of debt securities and Funded Debt we
may make).
Defeasance
The following discussion of full defeasance and covenant defeasance
[Sections 1301 to 1306] will be applicable to your series of debt securities
only if we choose to have them apply to that series.
Full Defeasance. If there is a change in federal tax law, as described
below, we can legally release ourselves from any payment or other obligations
on the debt securities (called "full defeasance") if we put in place the
following other arrangements for you to be repaid:
. We must deposit in trust for the benefit of all holders of the debt
securities a combination of money and U.S. government or U.S. government
agency notes or bonds that will generate enough cash to make interest,
principal and any other payments on the debt securities on their various
due dates.
6
<PAGE>
. There must be a change in current federal tax law or an IRS ruling that
lets us make that deposit without causing you to be taxed on the debt
securities any differently than if we did not make the deposit and just
repaid the debt securities ourselves. (Under current federal tax law,
the deposit and our legal release from the debt securities would be
treated as though we took back your debt securities and gave you your
share of the cash and notes or bonds deposited in trust. In that event,
you could recognize gain or loss on the debt securities you give back to
us.)
. We must deliver to the trustee a legal opinion of our counsel
confirming the tax law change described above.
If we ever did accomplish full defeasance, as described above, you would
have to rely solely on the trust deposit for repayment on the debt securities.
You could not look to us for repayment in the unlikely event of any shortfall.
Covenant Defeasance. Under current federal tax law, we can make the same
type of deposit described above and be released from certain covenants and the
provisions dealing with Consolidation, Merger or Sale, Restriction on Liens
and Restriction on Sales and Leaseback described above. The release from these
covenants is called "covenant defeasance." In that event, you would lose the
protection of these covenants but would gain the protection of having money
and securities set aside in trust to repay the debt securities. In order to
achieve covenant defeasance, we must do the following:
. We must deposit in trust for the benefit of all holders of the debt
securities a combination of money and U.S. government or U.S. government
agency notes or bonds that will generate enough cash to make interest,
principal and any other payments on the debt securities on their various
due dates.
. We must deliver to the trustee a legal opinion of our counsel confirming
that under current federal income tax law we may make that deposit
without causing you to be taxed on the debt securities any differently
than if we did not make the deposit and just repaid the debt securities
ourselves.
If we accomplish covenant defeasance, the following provisions of the
Indenture and the debt securities would no longer apply:
. Certain covenants previously described on page 5 under "Covenants," and
any other covenants applicable to the series of debt securities and
described in the prospectus supplement.
. The condition regarding the treatment of Liens when we merge or engage
in similar transactions, as previously described under "Consolidation,
Merger or Sale."
. The Events of Default relating to breach of covenants and acceleration
of the maturity of other debt, described under "Events of Default."
Registration, Transfer and Payment of Interest and Principal
Book-entry Debt Securities
Debt securities of a series may be issued in the form of a global debt
security that will be deposited with The Depository Trust Company, New York,
New York ("DTC"). See "About DTC" on page 8. This means that we will not issue
certificates to each holder. One global debt security will be issued to DTC
who will keep a computerized record of its participants (for example, your
broker) whose clients have purchased the debt securities. The participant will
then keep a record of its clients who purchased the debt securities. Unless it
is exchanged in whole or in part for a certificated debt security, a global
debt security may not be transferred; except that DTC, its nominees, and their
successors may transfer a global debt security as a whole to one another.
Beneficial interests in global debt securities will be shown on, and
transfers of global debt securities will be made only through, records
maintained by DTC and its participants.
7
<PAGE>
- -------------------------------------------------------------------------------
ABOUT DTC
DTC has provided us the following information:
DTC is a limited-purpose trust company organized under the New York Banking
Law, a "banking organization" within the meaning of the New York Banking Law, a
member of the United States Federal Reserve System, a "clearing corporation"
within the meaning of the New York Uniform Commercial Code and a "clearing
agency" registered under the provisions of Section 17A of the Securities
Exchange Act of 1934. DTC holds securities that its participants deposit with
DTC. DTC also records the settlement among participants of securities
transactions, such as transfers and pledges, in deposited securities through
computerized records for participants' accounts. This eliminates the need to
exchange certificates. Participants include securities brokers and dealers,
banks, trust companies, clearing corporations and certain other organizations.
DTC's book-entry system is also used by other organizations such as
securities brokers and dealers, banks and trust companies that work through a
participant. The rules that apply to DTC and its participants are on file with
the SEC.
DTC is owned by a number of its participants and by the New York Stock
Exchange, Inc., The American Stock Exchange, Inc. and the National Association
of Securities Dealers, Inc.
- -------------------------------------------------------------------------------
DTC will hold the debt securities through its nominee, Cede & Co. We will
wire principal and interest payments to Cede & Co. We and the Trustee will
treat Cede & Co. as the owner of the global debt securities for all purposes.
We, the Trustee and the paying agent will have no direct responsibility if Cede
& Co. fails to distribute those payments to owners of beneficial interests in
the global debt securities.
It is DTC's current practice, upon receipt of any payment of principal or
interest, to credit participants' accounts on the payment date according to
their respective holdings of beneficial interests in the global debt securities
as shown on DTC's records. In addition, it is DTC's current practice to assign
any consenting or voting rights to participants whose accounts are credited with
debt securities on a record date by using an omnibus proxy. Payments by
participants to owners of beneficial interests in the global debt securities,
and voting by participants, will be governed by the customary practices between
the participants and owners of beneficial interests, as is the case with debt
securities held for the account of customers registered in "street name."
However, those payments will be the responsibility of the participants and not
of DTC, the trustee or us.
Debt securities represented by a global debt security will be exchangeable
for certificated debt securities with the same terms in authorized
denominations only if:
. DTC notifies us that it is unwilling or unable to continue as depositary
and we have not appointed a successor depositary within 90 days;
. DTC ceases to be a clearing agency registered under applicable law; or
. we determine not to require all of the debt securities of a series to be
represented by a global note and notify the trustee of our decision.
Certificated Debt Securities
If we issue certificated debt securities, they will be registered in the
name of the holder of the debt security. The debt securities may be transferred
or exchanged, pursuant to administrative procedures in the indenture, without
the payment of any service charge (other than any tax or other governmental
charge) by contacting the trustee. [Section 305]
Principal of and interest and any premium on certificated debt securities
will be paid at designated places. Payment will be made by check mailed to the
persons in whose names the debt securities are registered on days specified in
the prospectus supplement. [Section 202] Debt security payments in other forms
will be paid at a place we designate and specify in a prospectus supplement.
[Section 301]
8
<PAGE>
PLAN OF DISTRIBUTION
We may sell the debt securities through agents, underwriters or dealers, or
directly to one or more purchasers.
Agents
We may designate agents who agree to use their reasonable efforts to
solicit purchases for the period of their appointment to sell debt securities
on a continuing basis.
Underwriters
If we use underwriters in the sale, the debt securities will be acquired by
the underwriters for their own account. The underwriters may resell the debt
securities in one or more transactions, including negotiated transactions, at a
fixed public offering price or at varying prices determined at the time of
sale. The obligations of the underwriters to purchase the debt securities will
be subject to certain conditions. The underwriters will be obligated to
purchase all the debt securities of the series offered if any of the debt
securities of that series are purchased. Any initial public offering price and
any discounts or concessions allowed or re-allowed or paid to dealers may be
changed from time to time.
Direct Sales
We may also sell debt securities directly to one or more purchasers without
using underwriters or agents.
Underwriters, dealers, and agents that participate in the distribution of
the debt securities may be underwriters as defined in the Securities Act, and
any discounts or commissions they receive from us and any profit on their
resale of the debt securities may be treated as underwriting discounts and
commissions under the Securities Act. Any underwriters, dealers or agents will
be identified and their compensation described in a prospectus supplement. We
may have agreements with the underwriters, dealers and agents to indemnify them
against certain civil liabilities, including liabilities under the Securities
Act. Underwriters, dealers and agents may engage in transactions with or
perform services for us or our subsidiaries in the ordinary course of their
businesses.
VALIDITY OF THE DEBT SECURITIES
Our lawyers, Whyte Hirschboeck Dudek S.C., Milwaukee, Wisconsin, will issue
an opinion about the validity of the debt securities for us.
EXPERTS
Deloitte & Touche LLP, independent auditors, audited our consolidated
financial statements and schedules for the fiscal years ended September 30,
1997, 1996 and 1995 incorporated by reference in this prospectus and elsewhere
in the registration statement. These documents are incorporated by reference in
this prospectus in reliance upon the report of Deloitte & Touche LLP given upon
their authority as experts in accounting and auditing.
9
<PAGE>
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No dealer, salesperson or other person is authorized to give any
information or to represent anything that is not contained in this prospectus.
You must not rely on any unauthorized information or representations. This
prospectus is an offer to sell only the Notes offered hereby, but only under
circumstances and in jurisdictions where it is lawful to do so. The
information contained in this prospectus is current only as of its date.
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TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
Prospectus Supplement
<S> <C>
The Company.............................................................. S-1
Additional Information................................................... S-3
Use of Proceeds.......................................................... S-3
Capitalization........................................................... S-4
Selected Financial Data.................................................. S-5
Management's Summary Discussion and Analysis of Results of Operations and
Financial Condition..................................................... S-6
Forward-Looking Statements............................................... S-8
Description of the Notes................................................. S-8
Validity of the Notes.................................................... S-9
Underwriting............................................................. S-10
Prospectus
About this Prospectus.................................................... 1
Where You Can Find More Information...................................... 1
The Company.............................................................. 2
Ratios of Earnings to Fixed Charges...................................... 2
Use of Proceeds.......................................................... 2
Description of the Debt Securities....................................... 2
Other Defined Terms...................................................... 5
About DTC................................................................ 8
Plan of Distribution..................................................... 9
Validity of the Debt Securities.......................................... 9
Experts.................................................................. 9
</TABLE>
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$150,000,000
Universal Foods Corporation
6.50% Notes due April 1, 2009
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[UNIVERSAL FOODS LOGO]
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Goldman, Sachs & Co.
First Chicago Capital Markets, Inc.
A BANK ONE Company
ABN AMRO Incorporated
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