<PAGE>
SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D. C. 20549
FORM 10-Q
[X] QUARTERLY]REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED OCTOBER 30, 1996
OR
[_] TRANSITION]REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM TO
----- ------
FOR THE SIX MONTHS ENDED OCTOBER 30, 1996 COMMISSION FILE NUMBER 1-3385
H. J. HEINZ COMPANY
(Exact name of registrant as specified in its charter)
PENNSYLVANIA 25-0542520
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
600 GRANT STREET, PITTSBURGH, PENNSYLVANIA 15219
(Address of Principal Executive Offices) (Zip Code)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: 412-456-5700
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 requirements for the past 90 days. Yes X No
-- --
The number of shares of the Registrant's Common Stock, par value $.25 per
share, outstanding as of December 2, 1996, was 368,232,894 shares.
<PAGE>
PART I--FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS.
H. J. HEINZ COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
<TABLE>
<CAPTION>
Six Months Six Months
Ended Ended
October 30, 1996 November 1, 1995
---------------- ----------------
FY 1997 FY 1996
(Unaudited)
(In Thousands, Except
per Share Amounts)
<S> <C> <C>
Sales................... $4,602,818 $4,382,570
Cost of products sold... 2,959,675 2,785,331
---------- ----------
Gross profit............ 1,643,143 1,597,239
Selling, general and
administrative
expenses............... 942,109 929,858
---------- ----------
Operating income........ 701,034 667,381
Interest income......... 20,377 19,523
Interest expense........ 133,985 137,991
Other expense, net...... 20,681 14,129
---------- ----------
Income before income
taxes.................. 566,745 534,784
Provision for income
taxes.................. 209,695 202,148
---------- ----------
Net income.............. $ 357,050 $ 332,636
========== ==========
Net income per share.... $ .95 $ .88
========== ==========
Cash dividends per
share.................. $ .55 1/2 $ .50 1/2
========== ==========
Average shares for
earnings per share..... 374,500 376,436
========== ==========
</TABLE>
See Notes to Condensed Consolidated Financial Statements.
------------
2
<PAGE>
H. J. HEINZ COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
<TABLE>
<CAPTION>
Three Months Three Months
Ended Ended
October 30, 1996 November 1, 1995
---------------- ----------------
FY 1997 FY 1996
(Unaudited)
(In Thousands, Except
per Share Amounts)
<S> <C> <C>
Sales................... $2,394,058 $2,288,277
Cost of products sold... 1,546,554 1,465,346
---------- ----------
Gross profit............ 847,504 822,931
Selling, general and
administrative
expenses............... 494,746 494,015
---------- ----------
Operating income........ 352,758 328,916
Interest income......... 9,947 7,354
Interest expense........ 68,141 69,396
Other expense, net...... 12,787 12,586
---------- ----------
Income before income
taxes.................. 281,777 254,288
Provision for income
taxes.................. 104,257 96,121
---------- ----------
Net income.............. $ 177,520 $ 158,167
========== ==========
Net income per share.... $ .47 $ .42
========== ==========
Cash dividends per
share.................. $ .29 $ .26 1/2
========== ==========
Average shares for
earnings per share..... 374,500 376,436
========== ==========
</TABLE>
See Notes to Condensed Consolidated Financial Statements.
------------
3
<PAGE>
H. J. HEINZ COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
October 30, 1996 May 1, 1996*
---------------- ------------
FY 1997 FY 1996
(Unaudited)
(Thousands of Dollars)
<S> <C> <C>
Assets
Current Assets:
Cash and cash equivalents........................ $ 124,030 $ 90,064
Short-term investments, at cost which
approximates market............................. 242 18,316
Receivables, net................................. 1,266,348 1,207,874
Inventories...................................... 1,692,847 1,493,963
Prepaid expenses and other current assets........ 365,615 236,475
---------- ----------
Total current assets........................... 3,449,082 3,046,692
---------- ----------
Property, plant and equipment.................... 4,402,028 4,220,044
Less accumulated depreciation.................... 1,709,614 1,603,216
---------- ----------
Total property, plant and equipment, net....... 2,692,414 2,616,828
---------- ----------
Investments, advances and other assets........... 580,394 573,645
Goodwill, net.................................... 1,799,091 1,737,478
Other intangibles, net........................... 658,676 649,048
---------- ----------
Total other noncurrent assets.................. 3,038,161 2,960,171
---------- ----------
Total assets................................... $9,179,657 $8,623,691
========== ==========
</TABLE>
*Summarized from audited fiscal year 1996 balance sheet.
See Notes to Condensed Consolidated Financial Statements.
------------
4
<PAGE>
H. J. HEINZ COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
October 30, 1996 May 1, 1996*
---------------- ------------
FY 1997 FY 1996
(Unaudited)
(Thousands of Dollars)
<S> <C> <C>
Liabilities and Shareholders' Equity
Current Liabilities:
Short-term debt.................................. $ 481,762 $ 994,586
Portion of long-term debt due within one year.... 264,742 87,583
Accounts payable................................. 942,196 870,337
Salaries and wages............................... 67,292 72,678
Accrued marketing................................ 129,555 146,055
Other accrued liabilities........................ 299,814 368,182
Income taxes..................................... 195,302 175,701
---------- ----------
Total current liabilities...................... 2,380,663 2,715,122
---------- ----------
Long-term debt................................... 2,999,734 2,281,659
Deferred income taxes............................ 372,547 319,936
Non-pension postretirement benefits.............. 207,170 209,994
Other liabilities................................ 367,259 390,223
---------- ----------
Total long-term debt and other liabilities.... 3,946,710 3,201,812
---------- ----------
Shareholders' Equity:
Capital stock.................................... 108,020 108,045
Additional capital............................... 150,799 154,602
Retained earnings................................ 4,309,730 4,156,380
Cumulative translation adjustments............... (84,500) (155,753)
---------- ----------
4,484,049 4,263,274
Less:
Treasury stock at cost (63,952,691 shares at
October 30, 1996 and 62,498,417 shares at May
1, 1996)....................................... 1,578,382 1,500,866
Unfunded pension obligation..................... 32,874 32,550
Unearned compensation relating to the ESOP...... 20,509 23,101
---------- ----------
Total shareholders' equity..................... 2,852,284 2,706,757
---------- ----------
Total liabilities and shareholders' equity..... $9,179,657 $8,623,691
========== ==========
</TABLE>
*Summarized from audited fiscal year 1996 balance sheet.
See Notes to Condensed Consolidated Financial Statements.
------------
5
<PAGE>
H. J. HEINZ COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Six Months Six Months
Ended Ended
October 30, 1996 November 1, 1995
---------------- ----------------
FY 1997 FY 1996
(Unaudited)
(Thousands of Dollars)
<S> <C> <C>
Cash Provided by Operating Activities........ $ 211,796 $ 74,413
--------- ---------
Cash Flows from Investing Activities:
Capital expenditures....................... (193,938) (172,645)
Acquisitions, net of cash acquired......... (119,539) (46,025)
Purchases of short-term investments........ (3,341) (619,673)
Sales and maturities of short-term
investments............................... 13,841 651,565
Investment in tax benefits................. (2,383) 54,714
Other items, net........................... 23,906 6,520
--------- ---------
Cash (used for) investing activities..... (281,454) (125,544)
--------- ---------
Cash Flows from Financing Activities:
Proceeds from long-term debt............... 36,907 3,975
Payments on long-term debt................. (91,577) (36,522)
Proceeds from commercial paper and short-
term borrowings, net...................... 430,515 233,646
Dividends.................................. (203,700) (185,939)
Purchases of treasury stock................ (155,494) (38,648)
Exercise of stock options.................. 66,775 46,583
Other items, net........................... 16,906 41,386
--------- ---------
Cash provided by financing activities.... 100,332 64,481
--------- ---------
Effect of exchange rate changes on cash and
cash equivalents............................. 3,292 (2,191)
--------- ---------
Net increase in cash and cash equivalents.... 33,966 11,159
Cash and cash equivalents at beginning of
year......................................... 90,064 124,338
--------- ---------
Cash and cash equivalents at end of period... $ 124,030 $ 135,497
========= =========
</TABLE>
See Notes to Condensed Consolidated Financial Statements.
------------
6
<PAGE>
H. J. HEINZ COMPANY AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(1) The Management's Discussion and Analysis of Financial Condition and
Results of Operations which follows these notes contains additional
information on the results of operations and the financial position of the
company. Those comments should be read in conjunction with these notes.
The company's annual report on Form 10-K for the fiscal year ended May 1,
1996 includes additional information about the company, its operations,
and its financial position, and should be read in conjunction with this
quarterly report on Form 10-Q.
(2) The results for the interim periods are not necessarily indicative of the
results to be expected for the full fiscal year due to the seasonal nature
of the company's business. Certain prior year amounts have been
reclassified in order to conform with the fiscal 1997 presentation.
(3) In the opinion of management, all adjustments, which are of a normal and
recurring nature, necessary for a fair statement of the results of
operations of these interim periods have been included.
(4) The composition of inventories at the balance sheet dates was as follows:
<TABLE>
<CAPTION>
October 30, 1996 May 1, 1996
---------------- -----------
(Thousands of Dollars)
<S> <C> <C>
Finished goods and work-in-process............ $1,269,382 $1,115,367
Packaging material and ingredients............ 423,465 378,596
---------- ----------
$1,692,847 $1,493,963
========== ==========
</TABLE>
(5) The provision for income taxes consists of provisions for federal, state,
U.S. possessions and foreign income taxes. The company operates in an
international environment with significant operations in various locations
outside the United States. Accordingly, the consolidated income tax rate
is a composite rate reflecting the earnings in the various locations and
the applicable tax rates.
(6) On August 29, 1996, the company amended the line of credit agreements that
support its domestic commercial paper programs, increasing availability
and extending maturity dates. The amended terms provide for one agreement
totaling $2.3 billion that expires in September 2001. The previous
agreements provided for lines of credit totaling $2.0 billion, of which
$1.2 billion was scheduled to expire in September 1996 and $800.0 million
was scheduled to expire in September 2000.
At October 30, 1996, the company had $1.8 billon of domestic commercial
paper outstanding. Due to the long-term nature of the amended credit
agreement, all of the outstanding domestic commercial paper has been
classified as long-term debt as of October 30, 1996. As of May 1, 1996,
$1.5 billion of domestic commercial paper was outstanding, of which $800.0
million was classified as long-term debt.
(7) On September 10, 1996, the company's board of directors raised the
quarterly dividend on the company's common stock to $0.29 per share from
$0.26 1/2 per share, for an indicated annual rate of $1.16 per share.
(8) On May 2, 1996, the company adopted Statement of Financial Accounting
Standard No. 121, "Accounting for the Impairment of Long-Lived Assets and
for Long-Lived Assets to Be Disposed Of." The implementation of this
standard did not have a material effect on the company's financial
position or results of operations.
7
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.
RESULTS OF OPERATIONS SIX MONTHS ENDED OCTOBER 30, 1996 AND NOVEMBER 1, 1995
For the six months ended October 30, 1996, sales increased $220.2 million,
or 5.0%, to $4,602.8 million from $4,382.6 million recorded in the same period
a year ago. The sales increase came primarily from acquisitions (net of
divestitures) of 2.6%, volume gains of 1.7%, and price increases of 1.2%;
partially offset by the unfavorable effect of foreign exchange translation
rates of less than one percent. Domestic operations provided 56.2% of the
current period's net sales compared to 57.2% in the same period last year.
Fiscal 1996 acquisitions impacting the year-to-year sales dollar comparison
include: In pet food--Nature's Recipe Pet Food in the U.S., and Alimentos
Pilar S.A. of Argentina; In infant foods--Fattoria Scaldasole S.p.A. in Italy,
and Earth's Best, Inc. in the U.S.; In foodservice--Britwest Ltd. in the
United Kingdom, and the Craig's foodservice business in New Zealand; and In
tuna--Indian Ocean Tuna Ltd. in the Seychelles, and the Mareblu brand of
canned tuna in Italy.
During the first six months of fiscal 1997, the company acquired Southern
Country Foods Ltd. in Australia, one of the world's largest producers of
canned corn beef and meals and substantially all of the pet food businesses of
Martin Feed Mills Limited of Elmira, Ontario. Southern Country Foods, with
annual sales of approximately $55 million, sells two-thirds of its products in
the Pacific Rim, the Middle East and Canada. Martin Feed Mills produces and
markets cat and dog food throughout Canada and also exports to Japan and
Europe.
Volume increases recorded in pet food, tuna, foodservice frozen potatoes and
single-serve condiments were partially offset by volume declines in infant
food, frozen entrees and retail frozen potatoes.
Price increases recorded in infant foods overseas, retail frozen potatoes,
single-serve condiments, Heinz beans and tuna were offset partially by price
decreases in weight-loss classroom activities, pet food and frozen entrees.
Gross profit increased $45.9 million to $1,643.1 million from $1,597.2
million a year ago. The gross profit increase is mainly attributable to
increased sales. The ratio of gross profit to sales, however, decreased to
35.7% from 36.4%. The current year's gross profit ratio was impacted by an
unfavorable profit mix and higher commodity prices; offset somewhat by
favorable pricing.
Operating income increased $33.7 million, or 5.0%, to $701.0 million from
$667.4 million for the same period last year. The increase in operating income
was primarily due to the increase in gross profit and decreased marketing
expenses; partially offset by higher general and administrative expenses
associated with acquisitions and higher selling and distribution expenses
associated with higher sales levels. For the six months ended October 30,
1996, domestic operations provided 54.6% of operating income compared to 55.3%
for the same period a year ago.
Net interest expense decreased $4.9 million to $113.6 million from $118.5
million in the comparable period a year ago as the impact of higher average
borrowings was more than offset by lower average interest rates.
The effective tax rate for the first six months of fiscal 1997 was 37.0%
compared to 37.8% for the same period a year ago.
Net income for the first six months was $357.1 million compared to $332.6
million for the same period last year, and earnings per share was $0.95
compared to $0.88.
8
<PAGE>
RESULTS OF OPERATIONS
THREE MONTHS ENDED OCTOBER 30, 1996 AND NOVEMBER 1, 1995
For the three months ended October 30, 1996, sales increased $105.8 million,
or 4.6%, to $2,394.1 million from $2,288.3 million recorded in the same period
a year ago. Sales prices increased 2.2% while sales volumes were maintained.
Acquisitions (net of divestitures) contributed 2.5% to the sales dollar
increase while the effect of foreign exchange rates was negligible. Domestic
operations provided 56.8% of the current period's net sales compared to 58.7%
in the same period last year.
Contributing to the second quarter sales dollar increase were the following
acquisitions: In pet food--Nature's Recipe Pet Food in the U.S., Alimentos
Pilar S.A. of Argentina, and Martin Feed Mills in Canada; In infant foods--
Fattoria Scaldasole S.p.A. in Italy, and Earth's Best, Inc. in the U.S.; In
foodservice--Britwest Ltd. in the United Kingdom, and the Craig's foodservice
business in New Zealand; and In tuna--Indian Ocean Tuna Ltd. in the
Seychelles, and the Mareblu brand of canned tuna in Italy. During the first
quarter of fiscal 1997, the company acquired Southern Country Foods Ltd. in
Australia, one of the world's largest producers of canned corn beef and meals.
Price increases were noted in infant foods, retail frozen potatoes, single-
serve condiments and Heinz beans.
Volume increases occurred in foodservice frozen potatoes, pet food and
foodservice condiments. Volume decreases were noted in Heinz grocery ketchup,
frozen entrees and Heinz beans.
Gross profit increased $24.6 million to $847.5 million from $822.9 million a
year ago. The ratio of gross profit to sales decreased to 35.4% from 36.0%.
The current quarter's gross profit ratio was impacted by an unfavorable profit
mix and higher commodity prices; offset somewhat by favorable pricing.
Operating income increased $23.8 million, or 7.2%, to $352.8 million from
$328.9 million for the same period last year. The increase in operating income
was primarily due to the increase in gross profit and decreased marketing
expenses; partially offset by higher selling and distribution expenses
associated with higher sales levels and increased general and administrative
expenses associated with acquisitions. For the second quarter ended October
30, 1996, domestic operations provided 59.4% of operating income compared to
57.3% in the same period last year.
Net interest expense decreased $3.8 million to $58.2 million from $62.0
million in the second quarter a year ago as the impact of higher average
borrowings was more than offset by lower average interest rates.
The effective tax rate for the second quarter was 37.0% compared to 37.8%
for the same period a year ago.
Net income for the current quarter was $177.5 million compared to $158.2
million for the same quarter last year, and earnings per share was $0.47
compared to $0.42, an increase of 11.9%.
LIQUIDITY AND FINANCIAL POSITION
Cash provided by operating activities totaled $211.8 million for the six
month period ended October 30, 1996 compared to $74.4 million last year.
9
<PAGE>
Cash used by investing activities required $281.5 million compared to $125.5
million last year. Cash used for acquisitions in the current period totaled
$119.5 million, due mainly to the purchases of Martin Feed Mills Limited in
Canada and Southern Country Foods Ltd. in Australia. Acquisitions in the prior
year's comparable period totaled $46.0 million and included PMV/Zabreh in the
Czech Republic and the additional investment in Kecskemeti Konzervgyar R.T. in
Hungary. Purchases of property, plant and equipment totaled $193.9 million in
the current period compared to $172.6 million a year ago. Investments in tax
benefits provided $54.7 million in the prior period, due mainly to the
company's sale of certain domestic investments.
Financing activities provided $100.3 million for the six months ended
October 30, 1996 compared to $64.5 million a year ago. Proceeds from
commercial paper and short-term borrowings provided $430.5 million in the
current period versus $233.6 million in the prior year's comparable period.
Stock options exercised provided $66.8 million in the current period versus
$46.6 million in the prior year's comparable period. Proceeds from long-term
debt provided $36.9 million compared to $4.0 million in the prior period.
During the six months ended October 30, 1996, treasury stock purchases totaled
$155.5 million (4.8 million shares) versus $38.6 million (1.3 million shares)
in the prior year's first six months. Payments on long-term debt totaled $91.6
million for the current period compared to $36.5 million last year. Dividend
payments totaled $203.7 million compared to $185.9 million a year ago.
On August 29, 1996, the company amended the line of credit agreements that
support its domestic commercial paper programs, increasing availability and
extending maturity dates. The amended terms provide for one agreement totaling
$2.3 billion that expires in September 2001. The previous agreements provided
for lines of credit totaling $2.0 billion, of which $1.2 billion would have
expired in September 1996 and $800.0 million was scheduled to expire in
September 2000.
At October 30, 1996, the company had $1.8 billion of domestic commercial
paper outstanding. Due to the long-term nature of the amended credit
agreement, all of the outstanding domestic commercial paper has been
classified as long-term debt as of October 30, 1996. As of May 1, 1996, $1.5
billion of domestic commercial paper was outstanding, of which $800.0 million
was classified as long-term debt.
On September 10, 1996, the company's board of directors raised the quarterly
dividend on the company's common stock to $0.29 per share from $0.26 1/2 per
share, for an indicated annual rate of $1.16 per share. On December 5, 1996,
the company's board of directors declared the quarterly dividend on the
company's common stock of $0.29 per share payable January 10, 1997 to
shareholders of record at the close of business on December 20, 1996.
The company's financial position continues to remain strong, enabling it to
meet cash requirements for operations, capital expansion programs and
dividends to shareholders.
OTHER MATTERS
On December 10, 1996 Questor Partners Fund, L.P. and Star-Kist Foods, Inc.,
a wholly owned subsidiary of the company, announced that they have terminated
discussions with Bumble Bee Seafoods, Inc., a unit of Unicord Public Co.,
Ltd., regarding the previously announced possible purchase by a subsidiary of
Questor of the brand name and ongoing canned seafood business of Bumble Bee
and the possible purchase by Star-Kist of the Bumble Bee tuna production
facilities.
10
<PAGE>
Subsequent to quarter-end, the company completed the acquisition of assets
of the canned beans and pasta business of Nestle Canada Inc., together with a
two-year license to use the Libby's brand. Under the agreement, the company
will also acquire the trademarks: Deep-Browned Beans, Alpha-Getti and Zoodles,
among others.
Also subsequent to quarter-end, the company completed the acquisition of the
assets of Shortland Cannery Limited, an Auckland, New Zealand meat processor.
Shortland markets New Zealand's number-one canned corn beef line and produces
other meat products. More than half of Shortland's revenues are from exports
to United States markets and parts of Asia and the Pacific Rim. Shortland
sells its products under the Hellaby, Crown and Pacific labels.
During the second quarter, the company completed the acquisition of
substantially all of the pet food businesses of Martin Feed Mills Limited of
Elmira, Ontario. Martin produces and markets cat and dog food throughout
Canada and also exports to Japan and Europe. Martin sells pet food under the
Techni-Cal brand and markets products under the Medi-Cal label through
veterinary offices and clinics.
In October 1996, the Weight Watchers Gourmet Food Company closed The All
American Gourmet plant in Clearfield, Utah. The facility's four production
lines will be consolidated with other company facilities. The closure is part
of the company's strategy to combine recent acquisitions with existing
operations. The employee severance and exit costs related to this closure had
previously been provided for through purchase accounting. This closure
represents the completion of the integration plan related to The All American
Gourmet acquisition.
On September 10, 1996, at the Annual Meeting of Shareholders of H. J. Heinz
Company, the company announced a plan to review its assets and to divest
assets that do not play to the company's major strengths. The company intends
that any surplus generated will be used to reduce debt, to write-off
underperforming assets, and to pay for organizational changes, if these prove
necessary.
11
<PAGE>
PART II--OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
Nothing to report under this item.
ITEM 2. CHANGES IN SECURITIES
Nothing to report under this item.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
Nothing to report under this item.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The Annual Meeting of Shareholders of H.J. Heinz Company was held in
Pittsburgh, Pennsylvania on September 10, 1996. The following individuals were
elected as directors for a one-year term expiring in September 1997:
<TABLE>
<CAPTION>
Shares
Director Shares for Withheld
-------- ---------- --------
<S> <C> <C>
A. J. F. O'Reilly 315,000,346 5,738,220
W. P. Snyder III 317,828,714 2,909,852
J. J. Bogdanovich 317,311,350 3,427,216
H. J. Schmidt 317,735,210 3,003,356
A. Lippert 318,099,801 2,638,765
E. B. Sheldon 317,899,666 2,838,900
R. M. Cyert 317,725,411 3,013,155
S. C. Johnson 318,206,691 2,531,875
D. R. Keough 318,057,690 2,680,876
S. D. Wiley 317,933,236 2,805,330
L. J. McCabe 318,021,641 2,716,925
D. R. Williams 318,046,037 2,692,529
L. Ribolla 317,998,763 2,739,803
N. F. Brady 314,173,015 6,565,551
W. R. Johnson 317,962,747 2,775,819
W. C. Springer 317,963,697 2,774,869
E. E. Holiday 317,936,869 2,801,697
T. S. Foley 316,809,463 3,929,103
</TABLE>
Shareholders also acted upon the following proposals at the Annual Meeting:
Elected Coopers & Lybrand L.L.P. the company's independent accountants for
the fiscal year ending April 30, 1997. Votes totaled 318,029,041 for;
1,107,762 against; and 1,601,763 abstentions.
Approved the company's 1996 Stock Option Plan. Votes totaled 249,631,723
for; 67,527,605 against; and 3,579,237 abstentions.
Defeated the shareholder proposal related to non-employee directors' pension
benefits. Votes totaled 83,227,352 for; 163,107,135 against; and 27,992,247
abstentions. Broker non-votes totaled 46,400,676.
12
<PAGE>
Defeated the shareholder proposal related to non-employee directors'
compensation. Votes totaled 36,449,595 for; 230,711,020 against; and 6,127,765
abstentions. Broker non-votes totaled 46,799,853.
ITEM 5. OTHER INFORMATION
See "Other Matters" in Part I--Item 2 of this Quarterly Report on Form 10-Q.
This report contains certain forward-looking statements which are based on
management's current views and assumptions regarding future events and
financial performance. Reference should be made to the section "Forward-
Looking Statements" in Item 1 of the registrant's Annual Report on Form 10-K
for the fiscal year ended May 1, 1996 for a description of the important
factors that could cause actual results to differ materially from those
discussed herein.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits required to be furnished by Item 601 of Regulation S-K are
listed below and are filed as part hereof. The Registrant has omitted
certain exhibits in accordance with Item 601(b)(4)(iii)(A) of Regulation S-
K. The Registrant agrees to furnish such documents to the Commission upon
request. Documents not designated as being incorporated herein by reference
are filed herewith. The paragraph numbers correspond to the exhibit numbers
designated in Item 601 of Regulation S-K.
11. Computation of net income per share.
27. Financial Data Schedule.
(b) Reports on Form 8-K.
On September 3, 1996, the Registrant filed a Current Report on Form 8-K
which reported the Registrant's expected first-quarter earnings and
contained a copy of an advertisement entitled "Record Year for Heinz"
stating that the Registrant had achieved record earnings in its 1996 fiscal
year.
13
<PAGE>
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.
H. J. HEINZ COMPANY
(Registrant)
Date: December 16, 1996 /s/ Paul F. Renne
By......................................
Paul F. Renne
Senior Vice President-Finance and
Chief Financial Officer
(Principal Financial Officer)
Date: December 16, 1996 /s/ Edward J. McMenamin
By......................................
Edward J. McMenamin
Corporate Controller
(Principal Accounting Officer)
14
<PAGE>
EXHIBIT 11
H. J. Heinz Company and Subsidiaries
COMPUTATION OF NET INCOME PER SHARE
(Unaudited)
<TABLE>
<CAPTION>
Six Months Ended
-----------------------
October 30, November 1,
1996 1995
----------- -----------
FY 1997 FY 1996
<S> <C> <C>
Primary income per share:
Net income........................................... $357,050 $332,636
Preferred dividends.................................. 22 30
-------- --------
Net income applicable to common stock................ $357,028 $332,606
======== ========
Average common shares outstanding and
common stock equivalents.......................... 374,500 376,436
======== ========
Net income per share--primary........................ $ .95 $ .88
======== ========
Fully diluted income per share:
Net income........................................... $357,050 $332,636
======== ========
Average common shares outstanding and
common stock equivalents.......................... 374,500 376,436
Additional common shares assuming:
Conversion of $1.70 third cumulative preferred
stock............................................. 350 479
Additional common shares assuming options were
exercised at the period-end market price........ 531 1,193
-------- --------
Average common shares outstanding and
common stock equivalents.......................... 375,381 378,108
======== ========
Net income per share--fully diluted................. $ .95 $ .88
======== ========
</TABLE>
All amounts in thousands except per share amounts.
------------
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM FORM 10-Q
FOR THE PERIOD ENDED OCTOBER 30, 1996 AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> APR-30-1997
<PERIOD-START> MAY-02-1996
<PERIOD-END> OCT-30-1996
<EXCHANGE-RATE> 1
<CASH> 124,030
<SECURITIES> 242
<RECEIVABLES> 1,266,348
<ALLOWANCES> 0
<INVENTORY> 1,692,847
<CURRENT-ASSETS> 3,449,082
<PP&E> 4,402,028
<DEPRECIATION> 1,709,614
<TOTAL-ASSETS> 9,179,657
<CURRENT-LIABILITIES> 2,380,663
<BONDS> 2,999,734
0
246
<COMMON> 107,774
<OTHER-SE> 2,744,264
<TOTAL-LIABILITY-AND-EQUITY> 9,179,657
<SALES> 4,602,818
<TOTAL-REVENUES> 4,602,818
<CGS> 2,959,675
<TOTAL-COSTS> 2,959,675
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 133,985
<INCOME-PRETAX> 566,745
<INCOME-TAX> 209,695
<INCOME-CONTINUING> 357,050
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 357,050
<EPS-PRIMARY> .95
<EPS-DILUTED> .95
</TABLE>
