SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): August 4, 1998
INTERNATIONAL MULTIFOODS CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 1-6699 41-0871880
(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification No.)
200 East Lake Street, Wayzata, Minnesota 55391
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (612) 594-3300
Not applicable
(Former name or former address, if changed since last report)
Item 5. Other Events.
On August 4, 1998, International Multifoods Corporation (the
"Company") announced that the Company intends to sell its Venezuela
Foods business. See the Company's press release dated August 4, 1998,
attached hereto as Exhibit 99.1, which is incorporated by reference in
this Current Report on Form 8-K.
Item 7. Financial Statements and Exhibits.
(c) Exhibits.
99.1 Press release of International Multifoods Corporation dated
August 4, 1998.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned hereunto duly authorized.
INTERNATIONAL MULTIFOODS CORPORATION
Date: August 4, 1998 By /s/ William L. Trubeck
---------------------------------
William L. Trubeck
Senior Vice President Finance and
Chief Financial Officer and
President, Latin America
Operations
EXHIBIT INDEX
99.1 Press release of International Multifoods Corporation dated
August 4, 1998.
EXHIBIT 99.1
[INTERNATIONAL MULTIFOODS CORPORATION LETTERHEAD] NEWS RELEASE
FOR IMMEDIATE RELEASE Contact: Jill Schmidt (media)
(612) 594-3320
Tony Brausen (investors)
(612) 594-3385
INTERNATIONAL MULTIFOODS TO SELL VENEZUELA FOODS UNIT
Company to Account for Unit as Discontinued Operation; Restates
Earnings
WAYZATA, Minn., Aug. 4 - International Multifoods Corp. (NYSE:
IMC) today announced that it has entered into an exclusive non-binding
letter of intent with Archer Daniels Midland Co. (NYSE: ADM) to sell
its Venezuela Foods unit. The company said that it intends to complete
the sale on an expeditious basis, subject to board of directors' and
regulatory approval.
"In April, we began an in-depth review and analysis of the
Venezuela Foods business. As a result of this review, we concluded
that the business would not meet our Economic Value Added, or EVA,
objectives and was not expected to sufficiently improve to meet our
internal EVA requirements," said Gary E. Costley, International
Multifoods chairman and chief executive officer. "We have a core of
profitable businesses whose positive results have been masked by the
performance of Venezuela Foods over the last 18 months. While
Venezuela Foods has historically been a solid contributor to
International Multifoods, we believe that shareholders will be best
served by the more predictable stream of earnings from our remaining
businesses."
International Multifoods will now account for Venezuela Foods as a
discontinued operation and has restated its financial results to
reflect its plan to divest the Venezuelan business. The company also
said that it expects second-quarter fiscal 1999 earnings from
continuing operations to be in the range of 23 cents to 25 cents per
share and full-year earnings from continuing operations to be in the
range of $1.30 to $1.35 per share. This compares with $1.50 per share
in the prior fiscal year, which included 33 cents per share from the
following previously reported items: its divested international
trading business, a gain from the elimination of the company subsidy
for post-retirement health-care benefits for future retirees, and
interest income on a tax refund. Excluding these items, the company's
continuing operations delivered $1.17 per share last year. The
attached tables include the restated segment results for the first
quarter of fiscal 1999, as well as for fiscal 1998 and fiscal 1997.
- more -
INTERNATIONAL MULTIFOODS TO SELL VENEZUELA FOODS. . ./2
As a result of its decision to discontinue operations, the company
will establish a discontinued operations reserve in the second quarter
that will include a non-cash provision of approximately $93 million for
the reclassification to the income statement of its foreign currency
translation account. This amount was previously recorded on the
company's balance sheet in shareholders' equity as "equity adjustment
from foreign currency translation." This reclassification is required
under financial accounting standards to recognize unrealized losses
from the translation of Venezuelan assets and liabilities that occurred
before the company adopted highly inflationary accounting in fiscal
1994. The $93 million provision will not affect the company's net
worth.
Costley said, "Though the economic environment in Venezuela
remains challenging, Venezuela Foods is a solid business with good
employees, strong brand recognition, leading market positions, and
significant size and scale. We believe it will be a better fit with a
company, such as ADM, that has a strategic interest in Latin America,
and the reach and resources to capitalize on the future market
opportunities in the region.
"The Venezuela Foods business is an important provider of food
products to the Venezuelan marketplace," Costley said. "We will
proceed with a sale in an expeditious manner and will do everything we
can to facilitate a smooth transition for Venezuela Foods' employees,
customers and suppliers."
Costley said that the company will allocate the proceeds from the
sale to those activities that generate the highest, risk-adjusted
returns to shareholders. He indicated that the actions might include
value-enhancing acquisitions, a stock repurchase program or debt
reduction.
"Our Multifoods Distribution Group and North America Foods
segments are on track," Costley said. "We are moving forward with our
strategies to profitably grow the U.S. distribution and the North
American food manufacturing businesses for the benefit of our
shareholders."
- more -
INTERNATIONAL MULTIFOODS TO SELL VENEZUELA FOODS. . ./3
Venezuela Foods, headquartered in Caracas, is a vertically
integrated food manufacturing business that holds the No. 1 or No. 2
market positions in each of its three segments: consumer foods,
commercial foods and animal feeds. Its brands include Robin Hood wheat
flour and baking mixes, Juana corn flour, Lassie oat cereal and Super-S
animal feeds. The company employs approximately 2,800 people in
Venezuela and operates 19 mills and other processing facilities, 13
agricenters, 12 warehouses, three hatcheries and 16 poultry farms
throughout the country. Net sales in the Venezuela Foods business were
$360.7 million in fiscal 1998, or about 14 percent of International
Multifoods' total sales of $2.6 billion. Venezuela Foods reported a
net loss of $4.6 million, or 25 cents per share, in fiscal 1998. Its
net book value is approximately $110 million.
International Multifoods is an EVA company that operates
distribution businesses in the United States and food manufacturing
businesses in Canada and the United States.
# # #
1998
This news release contains forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995. These
forward-looking statements are based on current expectations or
beliefs, including, but not limited to, statements concerning the
company's operations and financial performance and condition. For this
purpose, statements that are not statements of historical fact may be
deemed to be forward-looking statements. The company cautions that
these statements by their nature involve risks and uncertainties, and
actual results may differ materially depending on a variety of
important factors, including, among others, the impact of competitive
products and pricing; market conditions and weather patterns that may
affect the costs of grain and other raw materials; changes in laws and
regulations; economic and political conditions in Venezuela, including
inflation, currency volatility, possible limitations on foreign
investment, exchangeability of currency, dividend repatriation and
changes in existing tax laws; the company's ability to complete a sale
of the Venezuela Foods business; fluctuations in foreign exchange
rates; the company's ability to realize the earnings benefits from the
integration of its distribution businesses; and other factors as may be
discussed in the company's Report on Form 10-K for the year ended Feb.
28, 1998, and other reports filed with the Securities and Exchange
Commission.
International Multifoods Corporation
Segment and Earnings Digest
(unaudited)
(in millions, except per share data)
FY 1999 - First Quarter Ended May 31
- ------------------------------------
Operating
Earnings
Before
Net Operating Unusual Unusual Operating
Sales Costs Items Items Loss
----- --------- ------- ------- ---------
Multifoods
Distribution Group $454.7 $(448.2) $6.5 $(11.5) $(5.0)
North America Foods 110.5 (105.9) 4.6 (7.2) (2.6)
Divested Business - 0.8 0.8 (10.3) (9.5)
Corporate Expenses - (2.0) (2.0) - (2.0)
----- ------- ----- ------ -----
Total $565.2 $(555.3) $9.9 $(29.0) $(19.1)
===== ====== ===== ====== =====
Reconciliation of operating earnings (loss) to net earnings (loss):
Before
Unusual Unusual
Items Items Total
------- ------- ------
Operating earnings (loss) $9.9 $(29.0) $(19.1)
Interest, net (2.8) - (2.8)
Other income (expense), net (0.3) - (0.3)
----- ------ -------
Earnings (loss) from
continuing operations
before income taxes 6.8 (29.0) (22.2)
Income taxes (2.7) 10.3 7.6
----- ------ -------
Earnings (loss) from
continuing operations 4.1 (18.7) (14.6)
Loss from discontinued operations (1.3) (8.4) (9.7)
----- ------ -------
Net earnings (loss) $2.8 $(27.1) $(24.3)
===== ======= =======
Basic earnings (loss) per share:
Continuing operations $0.22 $(1.00) $(0.78)
Discontinued operations (0.07) (0.45) (0.52)
----- ------ -------
Total $0.15 $(1.45) $(1.30)
===== ======= =======
Diluted earnings (loss) per share:
Continuing operations $0.22 $(1.00) $(0.78)
Discontinued operations (0.07) (0.45) (0.52)
----- ------ -------
Total $0.15 $(1.45) $(1.30)
===== ======= =======
Average shares outstanding:
Basic 18.8
=====
Diluted 18.8
=====
International Multifoods Corporation
Segment and Earnings Digest
(unaudited)
(in millions, except per share data)
FY 1998 - Twelve Months Ended February 28
- -----------------------------------------
Operating
Earnings
Before Operating
Net Operating Unusual Unusual Earnings
Sales Costs Items Items (Loss)
-------- --------- ------- ------- ---------
Multifoods
Distribution Group $1,770.2 $(1,746.5) $23.7 $ - $23.7
North America Foods 471.7 (441.1) 30.6 - 30.6
Divested Business 9.2 (4.8) 4.4 (5.0) (0.6)
Corporate Expenses - (9.2) (9.2) - (9.2)
-------- -------- ----- ------ ------
Total $2,251.1 $(2,201.6) $49.5 $(5.0) $44.5
======== ========= ===== ====== ======
Reconciliation of operating earnings to net earnings:
Before
Unusual Unusual
Items Items Total
------- ------- ------
Operating earnings $49.5 $(5.0) $44.5
Interest, net (7.5) - (7.5)
----- ------ ------
Earnings from continuing
operations before income taxes 42.0 (5.0) 37.0
Income taxes (14.2) 1.8 (12.4)
------ ----- ------
Earnings from continuing
operations 27.8 (3.2) 24.6
Loss from discontinued operations (4.6) - (4.6)
----- ------ -----
Net earnings $23.2 $(3.2) $20.0
====== ====== ======
Basic earnings (loss) per share:
Continuing operations $1.51 $(0.17) $1.34
Discontinued operations (0.25) - (0.25)
------ ------- ------
Total $1.26 $(0.17) $1.09
===== ======= ======
Diluted earnings (loss) per share:
Continuing operations $1.50 $(0.17) $1.33
Discontinued operations (0.25) - (0.25)
------ ------- ------
Total $1.25 $(0.17) $1.08
===== ======= =====
Average shares outstanding:
Basic 18.4
=====
Diluted 18.6
=====
International Multifoods Corporation
Segment and Earnings Digest
(unaudited)
(in millions, except per share data)
FY 1998 - First Quarter Ended May 31
- ------------------------------------
Operating
Earnings
Before
Net Operating Unusual Unusual Operating
Sales Costs Items Items Earnings
----- --------- ------- ------- ---------
Multifoods
Distribution Group $446.7 $(443.2) $3.5 $ - $3.5
North America Foods 115.5 (112.5) 3.0 - 3.0
Divested Business 2.7 (2.1) 0.6 - 0.6
Corporate Expenses - (2.6) (2.6) - (2.6)
------ -------- ----- ------- ------
Total $564.9 $(560.4) $4.5 $ - $4.5
====== ======== ===== ======= ======
Reconciliation of operating earnings to net earnings:
Before
Unusual Unusual
Items Items Total
------- ------- ------
Operating earnings $4.5 $ - $4.5
Interest, net (2.9) - (2.9)
Other income (expense), net (0.2) - (0.2)
----- ------ -----
Earnings from continuing
operations before income taxes 1.4 - 1.4
Income taxes (0.5) - (0.5)
----- ------ -----
Earnings from
continuing operations 0.9 - 0.9
Earnings from discontinued
operations 1.1 - 1.1
------ ------ -----
Net earnings $2.0 $ - $2.0
====== ====== =====
Basic earnings per share:
Continuing operations $0.05 $ - $0.05
Discontinued operations 0.06 - 0.06
----- ------ -----
Total $0.11 $ - $0.11
====== ====== =====
Diluted earnings per share:
Continuing operations $0.05 $ - $0.05
Discontinued operations 0.06 - 0.06
----- ------ -----
Total $0.11 $ - $0.11
====== ====== ======
Average shares outstanding:
Basic 18.0
=====
Diluted 18.1
=====
International Multifoods Corporation
Segment and Earnings Digest
(unaudited)
(in millions, except per share data)
FY 1998 - Second Quarter Ended August 31
- ----------------------------------------
Operating
Earnings
Before
Net Operating Unusual Unusual Operating
Sales Costs Items Items Earnings
----- --------- ------- ------- ---------
Multifoods
Distribution Group $422.2 $(417.1) $ 5.1 $- $ 5.1
North America Foods 116.7 (111.4) 5.3 - 5.3
Divested Business 2.7 (0.6) 2.1 - 2.1
Corporate Expenses - (1.9) (1.9) - (1.9)
------ -------- ------ ----- -----
Total $541.6 $(531.0) $10.6 $- $10.6
======= ======== ====== ====== =====
Reconciliation of operating earnings to net earnings:
Before
Unusual Unusual
Items Items Total
------- ------- ------
Operating earnings $10.6 $- $10.6
Interest, net (1.7) - (1.7)
Other income (expense), net 0.3 - 0.3
----- ------ -------
Earnings from continuing
operations before income taxes 9.2 - 9.2
Income taxes (3.1) - (3.1)
----- ------ -------
Earnings from
continuing operations 6.1 - 6.1
Loss from discontinued operations (1.6) - (1.6)
----- ------ -----
Net earnings $ 4.5 $- $ 4.5
====== ====== ======
Basic earnings (loss) per share:
Continuing operations $0.33 $- $0.33
Discontinued operations (0.08) - (0.08)
----- ------- ------
Total $0.25 $- $0.25
====== ======= ======
Diluted earnings (loss) per share:
Continuing operations $0.33 $- $0.33
Discontinued operations (0.08) - (0.08)
------ ------- ------
Total $0.25 $- $0.25
====== ======= =====
Average shares outstanding:
Basic 18.2
====
Diluted 18.5
====
International Multifoods Corporation
Segment and Earnings Digest
(unaudited)
(in millions, except per share data)
FY 1998 - Third Quarter Ended November 30
- -----------------------------------------
Operating
Earnings
Before
Net Operating Unusual Unusual Operating
Sales Costs Items Items Earnings
----- --------- ------- ------- ---------
Multifoods
Distribution Group $456.8 $(449.0) $ 7.8 $- $ 7.8
North America Foods 133.4 (119.4) 14.0 - 14.0
Divested Business 3.4 (2.1) 1.3 - 1.3
Corporate Expenses - (2.4) (2.4) - (2.4)
------ -------- ------ ----- -----
Total $593.6 $(572.9) $20.7 $- $20.7
======== ========= ===== ====== ======
Reconciliation of operating earnings to net earnings:
Before
Unusual Unusual
Items Items Total
------- ------- ------
Operating earnings $20.7 $- $20.7
Interest, net (0.8) - (0.8)
Other income (expense), net (0.2) - (0.2)
------ ---- ------
Earnings from continuing
operations before income taxes 19.7 - 19.7
Income taxes (6.6) - (6.6)
-------- ------- ------
Earnings from
continuing operations 13.1 - 3.1
Loss from discontinued operations (3.7) - (3.7)
------- ------- ------
Net earnings $ 9.4 $- $ 9.4
======= ======= ======
Basic earnings (loss) per share:
Continuing operations $0.70 $- $0.70
Discontinued operations (0.19) - (0.19)
------- ------- ------
Total $0.51 $- $0.51
======= ======= ======
Diluted earnings (loss) per share:
Continuing operations $0.69 $- $0.69
Discontinued operations (0.19) - (0.19)
------- ------ ------
Total $0.50 $- $0.50
======= ====== ======
Average shares outstanding:
Basic 18.6
=====
Diluted 18.9
=====
International Multifoods Corporation
Segment and Earnings Digest
(unaudited)
(in millions, except per share data)
FY 1998 - Fourth Quarter Ended February 28
- ------------------------------------------
Operating
Earnings
Before Operating
Net Operating Unusual Unusual Earnings
Sales Costs Items Items (Loss)
----- --------- ------- ------- ---------
Multifoods
Distribution Group $444.5 $(437.2) $ 7.3 $ - $7.3
North America Foods 106.1 (97.8) 8.3 - 8.3
Divested Business 0.4 - 0.4 (5.0) (4.6)
Corporate Expenses - (2.3) (2.3) - (2.3)
------ -------- ------ ------ ------
Total $551.0 $(537.3) $13.7 $(5.0) $8.7
======== ========= ===== ====== ======
Reconciliation of operating earnings to net earnings:
Before
Unusual Unusual
Items Items Total
------- ------- ------
Operating earnings $13.7 $(5.0) $8.7
Interest, net (2.1) - (2.1)
Other income (expense), net 0.1 - 0.1
------ ------ -----
Earnings from continuing
operations before income taxes 11.7 (5.0) 6.7
Income taxes (4.0) 1.8 (2.2)
----- ------ -----
Earnings from
continuing operations 7.7 (3.2) 4.5
Loss from discontinued operations (0.4) - (0.4)
----- ------ -----
Net earnings $ 7.3 $(3.2) $4.1
===== ====== =====
Basic earnings (loss) per share:
Continuing operations $0.41 $(0.17) $0.24
Discontinued operations (0.02) - (0.02)
------ ------ ------
Total $0.39 $(0.17) $0.22
===== ======= ======
Diluted earnings (loss) per share:
Continuing operations $0.41 $(0.17) $0.24
Discontinued operations (0.03) - (0.03)
----- ------- ------
Total $0.38 $(0.17) $0.21
===== ======= =====
Average shares outstanding:
Basic 18.7
=====
Diluted 19.0
=====
International Multifoods Corporation
Segment and Earnings Digest
(unaudited)
(in millions, except per share data)
FY 1997 - Twelve Months Ended February 28
- -----------------------------------------
Operating
Earnings
Before Operating
Net Operating Unusual Unusual Earnings
Sales Costs Items Items (Loss)
-------- --------- ------- ------- ---------
Multifoods
Distribution Group $1,729.9 $(1,725.0) $ 4.9 $ (5.1) $(0.2)
North America Foods 476.7 (455.9) 20.8 (11.4) 9.4
Divested Business 42.5 (34.8) 7.7 - 7.7
Corporate Expenses - (10.3) (10.3) (3.6) (13.9)
-------- --------- ----- ------- ------
Total $2,249.1 $(2,226.0) $23.1 $(20.1) $ 3.0
======== ========== ===== ======= ======
Reconciliation of operating earnings to net earnings:
Before
Unusual Unusual
Items Items Total
------- ------- ------
Operating earnings $23.1 $(20.1) $ 3.0
Interest, net (12.3) - (12.3)
Other income (expense), net (0.5) - (0.5)
------ ------ ------
Earnings (loss) from continuing
operations before income taxes 10.3 (20.1) (9.8)
Income taxes (6.9) 5.3 (1.6)
----- ------ ------
Earnings (loss) from
continuing operations 3.4 (14.8) (11.4)
Earnings from
discontinued operations 14.2 - 14.2
----- ------- -----
Net earnings $17.6 $(14.8) $ 2.8
===== ====== =====
Basic earnings (loss) per share:
Continuing operations $0.19 $(0.83) $(0.64)
Discontinued operations 0.79 - 0.79
----- ------ -----
Total $0.98 $(0.83) $0.15
===== ====== =====
Diluted earnings (loss) per share:
Continuing operations $0.19 $(0.83) $(0.64)
Discontinued operations 0.79 - 0.79
----- ------ ------
Total $0.98 $(0.83) $ 0.15
===== ====== ======
Average shares outstanding:
Basic 18.0
=====
Diluted 18.0
=====
