<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
____________________
FORM 10-K
(Mark One) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
[X] SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED]
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1993
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the Transition Period from to
Commission File Number: 1-6244
AMERICAN MAIZE - PRODUCTS COMPANY
(Exact name of registrant as specified in its charter)
Maine 13-0432720
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
250 Harbor Drive, Stamford, CT 06902
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (203) 356-9000
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange
Title of each class on which registered
Class A Common Stock, par value of American Stock Exchange
$.80 per share
Class B Common Stock, par value of American Stock Exchange
$.80 per share
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [X] No [ ]
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [X]
State the aggregate market value of the voting stock held by non-affiliates
of the registrant: $173,141,467.63 (based upon closing prices on the American
Stock Exchange on March 9, 1994).
Indicate the number of shares outstanding of each of the registrant's
classes of common stock, as of March 9, 1994:
Class A Common Stock, par value $.80 per share: 8,484,685 shares
Class B Common Stock, par value $.80 per share: 1,742,057 shares
DOCUMENTS INCORPORATED BY REFERENCE
Registrant's Annual Report to security holders for the fiscal year ended
December 31, 1993 is incorporated by reference in Parts I, II and IV hereof.
Registrant's Definitive Proxy Statement to be filed pursuant to Regulation
14A promulgated by the Securities and Exchange Commission under the Securities
Exchange Act of 1934, which Definitive Proxy Statement is anticipated to be
filed within 120 days after the end of the registrant's fiscal year ended
December 31, 1993, is incorporated by reference in Part III hereof.
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PART I
ITEM 1 - BUSINESS
American Maize-Products Company is a Maine corporation
organized in 1906 (together with its subsidiaries hereinafter
referred to as "American Maize" or "the Company"). American
Maize is engaged primarily in the manufacture and sale of
products derived from corn wet milling, such as corn sweeteners
and starches. It also manufactures and markets cigars and
smokeless tobacco products.
Prior to February 1993, the high fructose corn syrup
component of the Company's corn wet milling business was
conducted by American Fructose Corporation ("AFC"), which was
organized by American Maize in 1983. In February 1993, the
Company acquired all of the shares of AFC that it did not already
own in exchange for 3,738,483 shares of the Company's Class A
Common Stock and $30,817,495 in cash, and AFC merged with and
into American Maize.
On July 1, 1993 Patric J. McLaughlin became President and
Chief Executive Officer of the Company following the retirement
of William Ziegler, III who continues as Chairman of the Board.
Mr. McLaughlin had been President and Chief Operating Officer.
In October 1993, the Company's Board of Directors approved a
$160,000,000 program to modernize and expand its corn wet milling
plant located in Hammond, Indiana. As part of the program the
grind capacity will be increased by approximately 30% and the
corn syrup capacity by approximately 50%. The program is
expected to be completed by mid-1996.
Information required with respect to industry segments of
American Maize, is hereby incorporated by reference to Note 13 of
"NOTES TO CONSOLIDATED FINANCIAL STATEMENTS" in the Company's
1993 Annual Report to Shareholders, attached hereto as Exhibit
13. See "INDEX TO FINANCIAL STATEMENTS AND FINANCIAL STATEMENT
SCHEDULES" elsewhere in this report.
CORN BUSINESS
American Maize manufactures a number of corn-derived
products by the wet milling process through its ingredients and
sweetener divisions. The wet milling process involves grinding
wet corn and then separating it into starch and other components;
thereafter, the starch component is either dried for sale as
common starch or processed further into other principal products.
The Sweetener Division produces glucose corn syrups and high
fructose corn syrup and the Ingredients Division makes unmodified
and modified starches, corn syrup solids, maltodextrins, dextrins
and cyclodextrins.
Corn syrup is used in many foods and beverages for both
sweetness and to provide a wide range of functionalities such as
color, texture and freezability. High fructose corn syrup is
primarily used by the soft drink industry as a sweetener.
American Maize extracts starch from common, waxy, high
amylose, and various new hybrid strains of corn. American Maize
also produces modifications of these starches by chemical or
physical processes to make products designed to serve the
particular needs of a wide variety of food and industrial users.
The Company continues to research new hybrid corn strains to
develop new specialty starches which reduce or eliminate chemical
usage in the modification process and for new product
applications. Specialty starch products derived from waxy corn
have characteristics differing from common corn starches, making
them useful in many specialty applications. The Company's waxy
corn based specialty starches are used as stabilizers, fillers,
thickeners and extenders in such products as canned and frozen
foods, pie fillings, puddings, salad dressings, baby foods, soups
and snack foods.
Corn syrup solids and maltodextrins are used in a variety of
food applications, including dry food mixes, beverage mixes,
microwaveable and convenience foods.
American Maize is one of the leading dextrin suppliers in
the industry. Its dextrins and industrial starches are sold to
the paper, adhesives, textile and chemical industries for their
sizing and adhesive properties. Significant quantities of
American Maize's waxy corn starches are used as adhesives by the
gummed tape industry. The Company completed the modernization of
its dextrin manufacturing facility during 1993.
American Maize is the largest producer of cyclodextrins in
the world and the only producer in North America. Cyclodextrins
are doughnut-shaped molecular structures, produced from starch,
which have many food and non-food applications, including
fragrance carrying, cholesterol removing, and drug delivery in
the pharmaceutical industry. In 1993 American Maize completed a
major expansion of its cyclodextrin facility at Hammond, Indiana.
The principal by-products produced by American Maize are
corn germ, corn gluten feed and corn gluten meal. Corn germ is
sold for further processing into corn oil and its co-product,
corn germ meal. Corn oil is used as a cooking oil and as an
ingredient in salad dressings and margarine. Corn gluten feed
and corn gluten meal are sold in commodities markets and directly
to manufacturers of various animal feeds.
Competition
The corn wet milling business is highly competitive. Almost
all of the Company's products compete with virtually identical or
similar products and derivatives manufactured by other companies
in the industry. In addition to American Maize, there are ten
companies in the corn wet milling industry in the United States,
most of which are larger and have greater resources than American
Maize.
In addition, many of American Maize's products are in
competition with products made from raw materials other than
corn. Corn syrup and high fructose corn syrup compete
principally with cane and beet sugar. By-products compete with
products of the corn dry milling industry and with soybean
products. Fluctuation in the prices of these competing products
may affect prices of and profits derived from the products of
American Maize.
The cost of producing corn products is largely dependent
upon the market price of corn. As a result, American Maize's
profit margins in its corn business are frequently subjected to
commodity price pressures which the Company is unable to
anticipate. The price of corn sweeteners (especially high
fructose corn syrups) is indirectly impacted by government
programs supporting sugar prices. If sugar price supports are
not continued, American Maize's earnings may be adversely
affected.
Raw Materials
Corn is the basic raw material of the corn wet milling
industry, which generally processes approximately 10-15% of the
annual domestic crop. The supply of domestic corn has been, and
continues to be, adequate for American Maize's needs. The price
of this agricultural commodity fluctuates widely as a result of a
number of factors, including levels of agricultural production,
market demand, livestock feeding demand, government agricultural
programs and exports. Due to the competitive nature of the
business and to fluctuating prices of competing products such as
sugar, end-product prices may not necessarily relate to raw
material costs; therefore, an increase in corn prices may
adversely affect American Maize's earnings. American Maize
purchases common corn in both the cash market and the corn
futures market. Waxy and high amylose corn are purchased under
contracts with individual farmers.
General
Sales of American Maize's corn products generally are
highest during the spring, summer and fall, and decrease during
the winter months.
Sales to The Coca-Cola Company accounted for approximately
12% of American Maize's revenues in 1993 and is expected to
account for greater than 10% in 1994. The Coca-Cola Company is
publicly reported to control approximately 40% of the domestic
soft drink industry, the principal user of 55% high fructose corn
syrup.
TOBACCO BUSINESS
The Company manufactures and sells cigars through its wholly
owned subsidiary, Swisher International, Inc. ("Swisher"). It
manufactures and sells smokeless tobacco products through
Swisher's wholly owned subsidiary, Helme Tobacco Company
("Helme").
Swisher is a leading producer of popular priced cigars in
the United States under the "King Edward" and "Swisher Sweets"
brand names. Swisher manufactures and sells mid-priced cigars
under several brands including "Optimo", "El Trelles", "Santa Fe"
and "Keep Moving". Swisher also sells higher priced cigars under
the "Bering" brand name. Swisher markets little cigars
nationally under the brand names "Swisher Sweets Little Cigars",
"Swisher Sweets Lights Little Cigars", "Swisher Sweets Menthol
Little Cigars" and "King Edward Little Cigars". In addition,
Swisher imports and markets "Pleiades" and "Dannemann" cigars and
other tobacco products including "MacBaren" pipe tobacco.
Helme competes in the dry snuff, loose leaf chewing tobacco
and moist snuff market segments of the smokeless tobacco
industry. Since 1888, it has been a significant producer of dry
snuff, the original smokeless tobacco product, which consists of
finely powdered tobacco. Helme markets its dry snuffs, some of
which are flavored, under a variety of brands including "Navy"
and "Railroad Mills." Helme's brands represent approximately
one-third of the total dry snuff market. Helme has also been in
the loose leaf chewing tobacco business for many years and
currently holds approximately a seven percent market share with
its "Mail Pouch", "Chattanooga Chew" and "Lancaster" brands,
among others. This product consists of shredded tobacco leaf
which is sweetened, flavored and packaged in foil pouches. Helme
has a small share of the moist snuff market with its "Silver
Creek", "Gold River" and "Redwood" brands. It markets a low
nicotine moist snuff under the "Cooper" brand name. In recent
years, Helme began marketing to a "price-value" segment of the
smokeless tobacco market with a "buy-one-get-one-free" pricing
strategy for its moist snuff brands and with the sale of private
label moist snuff and loose leaf chewing tobacco.
Industry and Markets
Unit sales in the domestic cigar industry have been in a
general decline for a number of years. During this period,
Swisher's large cigar sales have declined to a lesser degree than
the industry trend. As a result, Swisher's percentage of this
market has increased. Swisher's share of the little cigar market
has grown each year since it entered this market in 1987.
Swisher's share of the combined market for both large and little
cigars is approximately 30%. Total industry unit sales of dry
snuff and chewing tobacco have declined over the past three years
while moist snuff unit sales have increased. The Company cannot
predict whether these trends will continue.
Swisher and Helme sell cigars and smokeless tobacco products
through separate sales forces to direct buying accounts,
consisting principally of tobacco distributors, grocery
wholesalers and retail chains. Although each company's products
are sold nationwide, the majority of Swisher's sales are
concentrated in the Southeast, Southwest and Midwest, and the
majority of Helme's sales are concentrated in the Southeast,
Southwest and Mid-Atlantic states. A small percentage of cigar
sales results from exports to the United Kingdom, other European
Economic Community member countries and approximately 50 other
foreign markets. Although exports represent a small percentage
of sales, Swisher is the leading exporter of domestic cigars and
is increasing its presence in foreign markets through licensing
agreements in addition to its export activities. All of the
tobacco markets in which Swisher and Helme compete are highly
competitive.
Sales of Swisher's and Helme's tobacco products are not
dependent upon any one customer or group of customers and are not
affected by seasonal selling factors in any significant degree.
Raw Materials
There are three tobacco components of cigars: filler,
binder and wrapper. Swisher uses domestic and imported tobacco
purchased through domestic sources for filler and manufactures
its own binder. Swisher uses natural wrapper tobacco purchased
from domestic dealers, who deal with growers and suppliers in
Central America, or specially formulated structured wrapper
tobacco which Swisher also manufactures.
The various tobaccos used in the manufacture of Helme's
smokeless tobacco products are purchased primarily in domestic
markets either directly from growers or at auction from several
growing areas.
The supply of all the raw materials used in manufacturing
Swisher's and Helme's tobacco products has been, and is expected
to continue to be, adequate. However, due to consumer
resistance, increases in raw material costs cannot always be
passed along on a timely basis in the form of price increases for
finished products. Neither Swisher nor Helme is substantially
dependent upon any one supplier of raw materials and, to date,
neither has experienced any significant shortage of raw
materials.
Trademarks and Trade Secrets
Swisher and Helme market their tobacco products under
numerous registered trademarks, including the brand names
referred to above. These United States trademarks, which are
significant to the Company's tobacco businesses, expire
periodically and are renewable for additional ten year terms upon
expiration. A number of these trademarks are registered in
several foreign countries. Flavor formulas relating to all of
the Company's tobacco products are principal assets of the
Company and are maintained under strict secrecy.
GENERAL
The backlog of orders of American Maize and its subsidiaries
estimated to be firm at December 31, 1992 and 1993 was $9,249,000
and $11,911,000, respectively. All of the backlog orders at
December 31, 1993 are expected to be filled within the current
fiscal year.
American Maize is committed to sell some of its products
under short-term (two to three months) and long-term (up to one
year) contracts. Long-term commitments at December 31, 1992 and
1993, approximated $109,443,000 and $69,717,000 respectively.
Long-term commitments were lower at December 31, 1993 than at
December 31, 1992 due to the timing of contract negotiations.
American Maize owns a number of patents, is licensed under
others, and owns various registered trademarks, relating to
products sold by it and processes used in its business. No one
patent and no one registered trademark is considered material to
the business as a whole.
The day-to-day activities of American Maize are conducted
through its operating divisions and subsidiaries. At December
31, 1993, the total number of persons employed by American Maize
and its subsidiaries was 1,986, approximately 930 of whom are
members of labor unions. Collective bargaining agreements
covering approximately 90% of such employees are up for
renegotiation in 1994. American Maize and certain of its
subsidiaries maintain for their respective employees who are
eligible, employee pension or retirement plans on a
non-contributory basis, group life, temporary disability and
medical insurance plans, some of which are contributory.
American Maize considers its employee relations to be good.
American Maize is engaged continuously in the development of
new products and new applications and uses of existing products.
During 1991, 1992 and 1993 the expenditures on research
activities relating to the development of new products and
improvements of existing products were approximately $3,373,000,
$3,147,000 and $3,890,000 respectively.
GOVERNMENT REGULATION
General production, packaging, labeling and distribution of
many of American Maize's products are subject to various laws and
regulations, including regulation by the Federal Food and Drug
Administration, the United States Department of Agriculture, the
Federal Trade Commission, the Alcohol and Tobacco Tax Unit of the
Treasury Department and by various comparable state agencies.
Certain of these federal and state agencies have the power, among
other things, to order the recall of products that do not meet
applicable standards.
In recent years, an increasing amount of legislation
affecting the use and sale of tobacco products has been
implemented or proposed. Federal legislation requires, among
other things, that smokeless tobacco products and advertisements
for such products bear one of a series of specified health
warnings on a rotating basis and prohibits radio or television
advertising of such products. In addition, federal, state and
local regulations have been implemented or proposed that would
prohibit smoking in certain areas or in certain buildings,
require stronger health warnings on tobacco products, impose bans
on advertising and promotion, significantly increase tobacco
excise taxes, prohibit or impose restrictions on sampling of
tobacco products, impose mandatory negative advertising campaigns
and eliminate the tax deductions for tobacco advertising and
promotional expenses. As part of its health care reform proposals
submitted to Congress in 1993 the Clinton Administration has
proposed significant increases in tobacco excise taxes.
It is expected that these and other regulatory initiatives will
continue in 1994. The Company is unable to assess the future
effects these actions may have on the marketing and sale of its
tobacco products.
ENVIRONMENTAL MATTERS
The application of federal and state regulations to protect
the environment, particularly with respect to emissions into the
air and wastewater discharges, may limit or prevent the operation
of American Maize's businesses or may substantially increase the
cost of operation and/or financing of its operations. American
Maize presently spends various amounts, from time to time, for
capital improvements to regulate discharges into the environment.
In 1994 and 1995 the Company intends to spend approximately $20
million for wastewater treatment facilities at its Hammond, Indiana
facility. See also "ITEM 3 - LEGAL PROCEEDINGS" below.
ITEM 2 - PROPERTIES
American Maize leases its executive offices consisting of
approximately 17,000 square feet of space in Stamford,
Connecticut, and the offices of its Sweetener Division consisting
of approximately 6,500 square feet of space in Chicago, Illinois.
In 1993, the aggregate annual rental of all leased real and
personal properties of American Maize and all of its subsidiaries
was approximately $13,992,000 most of which represents railroad
tank car leases. The Company's leases contain expiration dates
ranging from 1994 to 2005.
Corn Processing Facilities
American Maize operates three manufacturing facilities in
the corn wet milling business located in Hammond, Indiana;
Decatur, Alabama; and Dimmitt, Texas. All three facilities are
operated on a continuous basis except for normal maintenance.
Capacity utilization of the three facilities in 1993 was
approximately 90% reflecting seasonal demand variations and
maintenance shutdowns.
The Hammond facility, which is owned by the Company, is
located on approximately 113 acres and has a grind capacity of
approximately 85,000 bushels per day. For a discussion of
expansion and modernization of the Hammond facility, see Item I -
Business on page 1. The Decatur facility and most of its
equipment are leased from the Industrial Development Board of the
City of Decatur, Alabama under an Industrial Revenue Bond
financing lease. The Decatur facility is located on a 33 acre
site and has a grind capacity of approximately 55,000 bushels per
day. The Dimmitt facility, is owned by the Company in part, and
the remainder is leased from Dimmitt Agri Industries, Inc. with
an option for the Company to purchase the leased premises and
equipment at the end of the lease term for a nominal price. The
Dimmitt facility is located on a 22 acre site and has a grind
capacity of approximately 55,000 bushels per day. Additionally,
there is a 410 acre parcel of undeveloped land approximately two
miles from the facility which is used for disposition of
processed wastewater.
American Maize also owns or leases various storage and
distribution facilities in various locations and leases its rail
transportation equipment.
Tobacco Facilities
Swisher owns cigar manufacturing plants in Jacksonville,
Florida (325,000 square feet) and in Waycross, Georgia (105,000
square feet). A portion of the Waycross facility is leased
pursuant to an Industrial Revenue Bond financing lease. Swisher
also owns virtually all of its cigar manufacturing equipment
except for certain machinery which is leased on a year-to-year
basis. In addition, Swisher owns a storage facility in Quincy,
Florida (107,000 square feet) and a warehouse in Stoughton,
Wisconsin (62,000 square feet) which are currently for sale.
Helme owns, and has listed for sale, its manufacturing
facility in Helmetta, New Jersey and leases another in Wheeling,
West Virginia (389,000 square feet) pursuant to an Industrial
Revenue Bond financing lease. During 1993 Helme completed the
consolidation of the two manufacturing facilities into the
Wheeling, West Virginia location and now manufactures dry snuff,
moist snuff and chewing tobacco at that location. Helme also
owns tobacco warehouses in Edgerton, Wisconsin; Lancaster,
Pennsylvania; Brookneal, Virginia; and Hopkinsville, Kentucky.
These facilities comprise an aggregate of approximately 543,000
square feet. In addition, Helme leases approximately 8,000
square feet of office space in Stamford, Connecticut, for its
executive offices.
ITEM 3 - LEGAL PROCEEDINGS
Application of Helen Z. Steinkraus
In March 1991, an agreement was entered into settling
various lawsuits which concerned disputes between William
Ziegler, III, Helen Z. Steinkraus, GIH Corp. and United States
Trust Company of New York with respect to issues of corporate
governance and management succession of the Company (the
"Settlement Agreement"). Mr. Ziegler is a director and Chairman
of the Board and former Chief Executive Officer of the Company.
Mrs. Steinkraus, the sister of Mr. Ziegler, is the wife of
William C. Steinkraus, a director of the Company. GIH Corp. is a
Delaware corporation which owns a majority of the Class B Common
Stock of the Company and is thereby able to elect 70% of the
Board of Directors. GIH Corp., in turn, is wholly owned by a
group of trusts for the benefit of Mr. Ziegler, Mrs. Steinkraus
and their respective descendants and by Mr. Ziegler, Mrs.
Steinkraus and members of their respective families.
In December 1991, Mrs. Steinkraus commenced an action in the
Surrogate's Court for New York County, New York to enforce the
Settlement Agreement, alleging that the management succession and
other provisions of the Settlement Agreement had been breached by
Mr. Ziegler and by Donald E. McNicol, a former director of the
Company and a party to the Settlement Agreement. Mr. Ziegler and
Mr. McNicol have filed answers and counterclaims against Mrs.
Steinkraus. The court has held hearings from time to time but has
not reached a decision in the matter. During 1992 and 1993, the
Company paid approximately $676,204 to reimburse the
director/defendants for their legal expenses in this matter
pursuant to the Company's By-laws and indemnification agreements.
See discussion below under Eric M. Steinkraus v. William Ziegler,
III, et al. for description of settlement discussions.
Eric M. Steinkraus v. William Ziegler, III, et al.
On February 20, 1992, a lawsuit was filed in Superior Court
for the County of Cumberland, Maine naming as defendants five
then directors of the Company (William Ziegler, III, Leslie C.
Liabo, Charles B. Cook, Jr., Patric J. McLaughlin and Donald E.
McNicol) and naming the Company as a nominal defendant. The
complaint was filed by Eric M. Steinkraus (a son of William C.
Steinkraus and Helen Z. Steinkraus). The plaintiff filed the
action in the right of the Company, personally and on behalf of a
class of the Company's stockholders. The complaint alleges two
counts of breach of fiduciary duty and one count of common law
fraud, and includes derivative and class action allegations. The
charges are based on (a) allegations of deception and concealment
regarding the "forcible retirement" of two directors of the
Company and a proposal to sell the Company's Hammond, Indiana
plant to American Fructose Corporation ("AFC"), a former
subsidiary of the Company which was merged with and into the
Company on February 26, 1993, (b) allegations of actions taken to
prevent the election of a new president of the Company, (c)
allegations of scheming and misrepresentation to cause the
Company to pay fees on behalf of certain of the defendants and
salaries to certain other defendants, and (d) an alleged failure
to disclose what plaintiff characterizes as an unconditional
offer by Archer-Daniels-Midland Company ("ADM") to purchase all
of the Company's stock at a premium.
The lawsuit follows settlement of various litigations
brought against Mr. Ziegler and others in connection with
corporate governance issues relating to the Company and alleges
violations of the settlement agreement terminating those
litigations, which alleged violations are the subject of the
action entitled Application of Helen Z. Steinkraus described
above.
The lawsuit seeks damages in excess of $45,000,000 for the
plaintiff class and damages in excess of $2,000,000 for the
Company together with the return of various fees, salaries and
benefits paid by the Company to the defendant directors and their
affiliates as well as unspecified exemplary damages.
On December 3, 1992 the Court dismissed the action insofar
as it asserted claims in the right of the Company so that the
Company is no longer a defendant. The Court also dismissed a
portion of the complaint against the defendant directors and left
standing the class-action claim alleging breach of fiduciary duty
with respect to the alleged ADM offer. The plaintiff has filed a
motion with the Court seeking permission to appeal the partial
dismissal. During 1992 and 1993, the Company paid approximately
$283,654 to reimburse the director/defendants for their legal
expenses in this matter pursuant to the Company's By-laws and
indemnification agreements.
In April 1993, counsel for the parties have agreed in
principle to settle this case and the lawsuit entitled
Application of Helen Z. Steinkraus discussed above, subject to
agreement by the parties and the Company to the terms of a
definitive settlement agreement and court approvals. Under the
terms of the proposed settlement, which would result in the
dismissal of both cases, the parties would release each other and
the Company from any claims related to the Company and would
covenant not to sue each other or the Company for the next five
years on any claims related to the Company. In addition, the
shares of the Company held by GIH Corp., which control the
election of a majority of the Company's Board of Directors, would
be voted during the next five years in support of a Board having
a majority of Directors who are neither employees of the Company
nor members of the Steinkraus or Ziegler families. The agreement
in principle also provides that the Company would pay $600,000 to
reimburse plaintiffs for a portion of their legal fees. The
Board of Directors of the Company approved the agreement in
principle on April 28, 1993. Thus far the parties have been
unable to agree on the terms of a definitive settlement
agreement.
Grain Processing Corporation v. American Maize-Products Company
On May 12, 1981, Grain Processing Corporation ("GPC")
brought a lawsuit against the Company in the United States
District Court for the Northern District of Indiana alleging
infringement of a patent owned by GPC relating to certain kinds
of waxy starch maltodextrins. The trial court found infringement
as to one small-volume product, which had been discontinued by
the time of the decision. In an appeal by GPC, the Court of
Appeals found that another product also had infringed, in some
instances. The case was sent back to the trial court to
determine how much of the accused product was infringing, to
assess what damages should be paid to GPC, and to rule on GPC's
claims for increased damages and attorney fees.
The GPC patent expired in 1991 and has no present effect on
the Company's activities. The Company has filed a motion, not
yet decided, seeking a ruling that no damages should be paid for
the past because the patent is invalid.
GPC is contending that it should receive damages based on
its lost profits on products not covered by the patent. The
Company contends that if any damages are awarded, they should be
based on a reasonable royalty, because GPC never sold the
patented product. The law on that issue is in conflict at
present.
Because of the Company's undecided motion and the conflict
in the law on damages, no reasonable estimate can be given at
this time as to how much the Company may be required to pay when
this litigation is ultimately resolved, or when that is likely to
occur.
Lloyd T. Whitaker v. Swisher International, Inc.
On April 23, 1992, Lloyd T. Whitaker, the trustee in
bankruptcy for Olympia Holding Corporation a/k/a P-I-E
Nationwide, Inc. ("Olympia") commenced a lawsuit in United States
Bankruptcy Court for the Middle District of Florida against
Swisher seeking recovery of freight charges that allegedly should
have been paid under tariffs filed with the Interstate Commerce
Commission ("ICC"). Actual amounts paid were pursuant to a
separate lower tariff filed with the ICC which the trustee claims
is unlawful. The trustee seeks recovery of approximately
$973,000 plus interest on behalf of Olympia for past shipments.
In September, 1993, the court ruled in a similar case that the
trustee does not have standing to challenge the lower tariff.
Swisher believes that it has meritorious defenses to plaintiff's
claims, and is contesting this litigation vigorously.
U.S. v. The Sanitary District of Hammond, et al.
On August 2, 1993, the United States, on behalf of the U.S.
Environmental Protection Agency (EPA), filed a civil action
against the Company, four other industrial companies and four
municipalities for alleged violations of the Clean Water Act and
the Rivers and Harbors Act. The issue in the suit involves
discharges of industrial and municipal wastewater by the
defendants into the sewage treatment facilities of the City of
Hammond, Indiana and from there into the Grand Calumet River.
The Government is seeking civil penalties in an unspecified
amount for alleged violations of discharge permit limitations,
injunctive relief to require compliance with permit terms, and,
from the Company and the other industrial defendants and the City
of Hammond, additional injunctive relief requiring the
development and implementation of a plan to remediate allegedly
contaminated sediments in the Grand Calumet River.
The Company does not believe that its discharges have caused
or contributed to any sedimentation problem in the Grand Calumet
River, and it has already taken measures to ensure continued
compliance with the terms of its discharge permits. The Company
intends to contest the Government's allegations vigorously.
ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None
<PAGE>
EXECUTIVE OFFICERS OF THE COMPANY
Name Age Office
William Ziegler, III (1) 65 Chairman of the Board
Patric J. McLaughlin (1) 48 President and Chief
Executive Officer
Cynthia Z. Brighton 34 Secretary
Robert A. Britton 47 Vice President, Treasurer
and Assistant Secretary
Jane E. Downey 43 Vice President - Human
Resources
Thomas H. Fisher 47 Director of Taxes
Edmond G. Herve, Jr. 44 Controller
Charles A. Koons 50 Vice President - Corporate
Development and Planning
Edward P. Norris 53 Vice President and Chief
Financial Officer
Robert M. Stephan 51 Vice President, General
Counsel and Assistant Secretary
_____________________________
(1) Member of Board of Directors and its Executive Committee
<PAGE>
The Company's Executive Officers do not have a fixed term of
office; they serve at the pleasure of the Board of Directors.
Messrs. Britton, Herve, Fisher, Koons and Norris have served
in their respective capacities with the Company for more than the
past five years.
Mr. Ziegler retired as Chief Executive Officer effective
July 1, 1993 and remains Chairman of the Board of Directors;
prior thereto he served as Chairman and Chief Executive Officer
since 1976.
Mr. McLaughlin was elected President and Chief Executive
Officer of the Company effective July 1, 1993; prior thereto he
served as President and Chief Operating Officer (1992-1993) and
President of the Corn Processing Division (1984-1992).
Mrs. Brighton was elected Secretary of the Company in April,
1992; prior thereto she served as Assistant Secretary since 1983,
and Secretary of American Fructose Corporation, a former
subsidiary of the Company, since 1986. Mrs. Brighton is the
daughter of Mr. Ziegler.
Ms. Downey was elected Vice President - Human Resources of
the Company effective August 1, 1993; prior thereto she served as
Vice President - Human Resources of the Corn Processing Division
(1988-1993).
Mr. Stephan was elected Vice President and General Counsel
of the Company in April 1992, following a one-month period during
which he served as Vice President and Associate General Counsel;
prior thereto he served as Vice President, General Counsel and
Secretary of Erbamont N.V. since 1983.
<PAGE>
PART II
Item 5 - MARKET FOR COMPANY'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
(a) Market Information.
Information required with respect to this Item 5 (a) is
hereby incorporated by reference to information under "Stock
Price and Dividend Review" on page 21 of the Company's 1993
Annual report to security holders, attached hereto as Exhibit
"13".
(b) Holders.
Information required with respect to this Item 5 (b) is
hereby incorporated by reference to information under "Stock
Price and Dividend Review" on page 21 of the Company's 1993
Annual Report to security holders, attached hereto as Exhibit
"13".
(c) Dividends.
During 1992 and 1993, the Company declared and paid a
quarterly dividend of $.16 per share on its Class A Common Stock
and Class B Common Stock.
Other information required with respect to this Item 5 (c)
is hereby incorporated by reference to the Company's 1993 Annual
Report to security holders, attached hereto as Exhibit "13", as
follows:
(i) With respect to dividend history, see "Five-Year
Summary of Selected Financial Data" on page 20.
(ii) With respect to restrictions on the payment of
dividends, see Note 4 of "Notes to Consolidated Financial
Statements" on page 27.
Item 6 - SELECTED FINANCIAL DATA
Information required with respect to this Item 6 is hereby
incorporated by reference to information under "Five-Year Summary
of Selected Financial Data" on page 20 of the Company's 1993
Annual Report to security holders, attached hereto as Exhibit
"13".
Item 7 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Information required with respect to this Item 7 is hereby
incorporated by reference to material under "Financial Review" on
page 15 of the Company's 1993 Annual Report to security holders,
attached hereto as Exhibit "13".
Item 8 - FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Information required with respect to this Item 8 is hereby
incorporated by reference to the applicable sections in the
Company's 1993 Annual Report to security holders, attached hereto
as Exhibit "13". See Financial Statements Incorporated by
Reference under "Index to Consolidated Financial Statements and
Financial Statement Schedules" elsewhere in this report.
Item 9 - CHANGES AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
AND FINANCIAL DISCLOSURE
None.
<PAGE>
PART III
ITEM 10 - DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY
Information required by this Item 10 with respect to the
directors of Company is hereby incorporated by reference to the
Company's definitive proxy statement to be filed pursuant to
Regulation l4A promulgated by the Securities and Exchange
Commission under the Securities Exchange Act of 1934, which proxy
statement is anticipated to be filed within 120 days after the
end of the Company's fiscal year ended December 31, 1993. With
respect to information regarding executive officers of the
Company, see pages 15-16 of this report.
ITEM 11 - EXECUTIVE COMPENSATION
Information required by this Item 11 is hereby incorporated
by reference to the Company's definitive proxy statement to be
filed pursuant to Regulation l4A promulgated by the Securities
and Exchange Commission under the Securities Exchange Act of
1934, which proxy statement is anticipated to be filed within 120
days after the end of the Company's fiscal year ended December
31, 1993.
ITEM 12 - SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
Information required by this Item 12 is hereby incorporated
by reference to the Company's definitive proxy statement to be
filed pursuant to Regulation l4A promulgated by the Securities
and Exchange Commission under the Securities Exchange Act of
1934, which proxy statement is anticipated to be filed within 120
days after the end of the Company's fiscal year ended December
31, 1993.
ITEM 13 - CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Information required by this Item 13 is hereby incorporated
by reference to the Company's definitive proxy statement to be
filed pursuant to Regulation l4A promulgated by the Securities
and Exchange Commission under the Securities Exchange Act of
1934, which proxy statement is anticipated to be filed within 120
days after the end of the Company's fiscal year ended December
31, 1993.
<PAGE>
PART IV
ITEM 14 - EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON
FORM 8-K
(a)(1) and (2) See "Consolidated Financial Statements and
Schedules" elsewhere in this report.
(a)(3) Exhibits
Regulation S-K
Exhibit No.:
2. -- The Amended and Restated Agreement and Plan of Merger,
dated as of December 15, 1992, by and between the Company and AFC
attached as Annex A to the Joint Proxy Statement/Prospectus
forming a part of the Company's registration statement on Form
S-4 (File No. 33-55946), is incorporated herein by reference.
3.(a) -- The Restated Articles of Incorporation of the Company,
as amended through February 26, 1993, filed as Exhibit "3.(a)" to
the Company's Form 10-K Annual Report for the fiscal year ended
December 31, 1992 (File No. 1-6244), is incorporated herein by
reference.
(b) -- By-Laws, as amended to February 24, 1993, filed as
Exhibit "3.(b)" to the Company's Form 10-K Annual Report for the
fiscal year ended December 31, 1992 (File No. 1-6244), is
incorporated herein by reference.
4.(a) -- A specimen copy of the certificates for the Company's
Class A Common Stock, par value $.80 per share, filed as Exhibit
"4.3" to the Company's registration statement on Form S-4 (File
No. 33-55946), is incorporated herein by reference.
(b) -- A specimen copy of the certificates for the Company's
Class B Common Stock, par value $.80 per share, filed as Exhibit
"4.(b)" to the Company's Form 10-K Annual Report for the fiscal
year ended December 31, 1992 (File No. 1-6244), is incorporated
herein by reference.
(c) -- Note Agreement dated as of March 3, 1993 among the
Company and each Purchaser in the Private Placement of the
Company's 7.875% Senior Notes due March 3, 2003, filed as Exhibit
"4.(g)" to the Company's Form 10-K Annual Report for the fiscal
year ended December 31, 1992 (File No. 1-6244), is incorporated
herein by reference.
10.(a)-- Supplemental Pension Program, filed as Exhibit "10.(f)"
to the Company's Form 10-K Annual Report for the fiscal year
ended December 31, 1991 (File No. 1-6244), is incorporated herein
by reference.
(b) -- Unfunded Supplemental Pension Plan Trust Agreement
relating to Item 10.(a) above, filed as Exhibit "10.(g)" to the
Company's From 10-K Annual Report for the fiscal year ended
December 31, 1991 (File No. 1-6244) is incorporated herein by
reference.
(c) -- Funded Supplemental Pension Plan Trust Agreement
relating to Item 10.(a) above, filed as Exhibit "10.(h)" to the
Company's Form 10-K Annual Report for the fiscal year ended
December 31, 1991 (File No. 1-6244), is incorporated herein by
reference.
(d) -- Deferred Compensation Plan, filed as Exhibit "10." to
the Company's Form 10-K Annual Report for the fiscal year ended
December 31, 1981 (File No. 1-6244), is incorporated herein by
reference.
(e) -- Executive Life Insurance Program summary, filed as
Exhibit "10.(j)" to the Company's Form 10-K Annual Report for the
fiscal year ended December 31, 1991 (File No. 1-6244), is
incorporated herein by reference.
(f) -- Pertinent provisions of Incentive Compensation Program,
filed as Exhibit "11." to the Company's Form 10-K Annual Report
for the fiscal year ended December 31, 1981 (File No. 1-6244), is
incorporated herein by reference.
(g) -- American Maize-Products Company Directors Retirement
Benefit Plan, filed as Exhibit "10.(l)" to the Company's Form
10-K Annual Report for the fiscal year ended December 31, 1991
(File No. 1-6244), is incorporated herein by reference.
(h) -- The 1976 Stock Option Plan, as amended November 24,
l981, filed as Exhibit "12." to the Company's Form 10-K Annual
Report for the fiscal year ended December 31, l981 (File No.
1-6244), is incorporated herein by reference.
(i) -- The 1985 Stock Option Plan, filed as Exhibit "5." to
the Company's Form 10-K Annual Report for the fiscal year ended
December 31, 1985 (File No. 1-6244), is incorporated herein by
reference.
(j) -- The 1985 Stock Option Plan, as amended, filed as
Exhibit "4.(f)" to the Company's registration statement on Form
S-8 on July 7, 1988 (File No. 33-22943), is incorporated herein
by reference.
(k) -- Lease between Harbor Plaza Associates, Landlord, and
the Company, Tenant, relating to the offices located at 41 Harbor
Plaza Drive (presently known as 250 Harbor Drive), Stamford,
Connecticut, filed as Exhibit "13." to the Company's Form 10-K
Annual Report for the fiscal year ended December 31, l981 (File
No. 1-6244), is incorporated herein by reference.
(l) -- Services Agreement dated February 1, 1973 between
Dimmitt Agri Industries, Inc. and Amstar Corporation, filed as
Exhibit "10.1(a)" to the Company's Form 8-K Current Report on
December 13, 1984 (File No. 1-6244), is incorporated herein by
reference.
(m) -- Assignment of Services Agreement dated November 28,
1984 among Amstar Corporation, Dimmitt Operating Inc. and Dimmitt
Agri Industries, Inc., filed as Exhibit "10.1(e)" to the
Company's Form 8-K Current Report on December 13, 1984 (File No.
1-6244), is incorporated herein by reference.
(n) -- Letter Amendments dated August 24, 1977, November 24,
1980 and November 18, 1982 in connection with Exhibit "10(m)"
above, filed as Exhibits "10.1(b)," "10.1(c)" and "10.1(d)" to
the Company's Form 8-K Current Report on December 13, 1984 (File
No. 1-6244), are incorporated herein by reference.
(o) -- Lease Agreement dated as of February 1, 1973 between
Dimmitt Agri Industries, Inc. and Amstar Corporation, filed as
Exhibit "10.2(a)" to the Company's Form 8-K Current Report on
December 13, 1984 (File No. 1-6244), is incorporated herein by
reference.
(p) -- Assignment of Lease Agreement dated November 28, 1984
among Amstar Corporation, Dimmitt Operating Inc., Dimmitt Agri
Industries, Inc. and Texas Bank for Cooperatives filed as Exhibit
"10.2(b)" to the Company's Form 8-K Current Report on December
13, 1984 (File No. 1-6244), is incorporated herein by reference.
(q) -- Credit Agreement dated as of July 1, 1991 among the
Company, the signatory lenders thereto, and The Bank of New York,
as agent, filed as Exhibit "10.(a)" to the Company's Form 10-Q
Quarterly Report for the quarterly period ended September 30,
1991 (File No. 1-6244), is incorporated herein by reference.
(r) -- Guaranty dated as of July 1, 1991 made by Jno. H.
Swisher & Son, Inc., to The Bank of New York, as Agent, and the
signatory lenders under the Credit Agreement referenced in Item
10.(q) above, filed as Exhibit "10.(b)" to the Company's Form
10-Q Quarterly Report for the quarterly period ended September
30, 1991 (File No. 1-6244), is incorporated herein by reference.
(s) -- Guaranty dated as of July 1, 1991 made by Helme Tobacco
Company to The Bank of New York, as agent, and the signatory
lenders under the Credit Agreement referenced in Item 10.(q)
above, filed as Exhibit "10.(c)" to the Company's Form 10-Q
Quarterly Report for the quarterly period ended September 30,
1991 (File No. 1-6244), is incorporated herein by reference.
(t) -- Agreement dated as of March 1, 1991 among William
Ziegler, III, Helen Z. Steinkraus, GIH Corp., Donald E. McNicol
and the trustees of certain trusts for the benefit of Mr. Ziegler
and his issue and the trustees of certain trusts for the benefit
of Mrs. Steinkraus and her issue, filed as Exhibit "10.(a)" to
the Company's Form 8-K Current Report dated March 29, 1991 (File
No. 1-6244), is incorporated herein by reference.
(u) -- Amendment No. 1 dated as of March 14, 1991, to Item
10.(t) above, filed as Exhibit "10.(b)" to the Company's Form 8-K
Current Report dated March 29, 1991 (File No. 1-6244), is
incorporated herein by reference.
(v) -- Stockholders Agreement dated as of March 1, 1991 among
William Ziegler, III, Helen Z. Steinkraus, certain trusts for the
benefit of Mr. Ziegler and his issue and certain trusts for the
benefit of Mrs. Steinkraus and her issue, filed as Exhibit
"10.(c)" to the Company's Form 8-K Current Report dated March 29,
1991 (File No. 1-6244), is incorporated herein by reference.
(w) -- Amendment No. 1 dated as of July 1, 1992, to Item
10.(q) above, filed as Exhibit "10.(w)" to the Company's Form
10-K Annual Report for the fiscal year ended December 31, 1992
(File No. 1-6244), is incorporated herein by reference.
(x) -- Consent and Amendment No. 2 dated as of March 3, 1993,
to Item 10.(q) above, filed as Exhibit "10.(x)" to the Company's
Form 10-K Annual Report for the fiscal year ended December 31,
1992 (File No. 1-6244), is incorporated herein by reference.
(y) -- Amendment effective April 24, 1992 to the 1985 Stock
Option Plan, as amended, filed as Exhibit "10.(bb)" to the
Company's Form 10-K Annual Report for the fiscal year ended
December 31, 1992 (File No. 1-6244), is incorporated herein by
reference.
(z) -- Consent and Amendment No. 3 dated as of July 19, 1993,
to Item 10.(q) above, is attached hereto as Exhibit "10.(z)".
(aa) -- Consent No. 4 and Waiver to the Credit Agreement dated
as of March 4, 1994, to Item 10.(q) above, is attached hereto as
Exhibit "10.(aa)".
(bb) -- The American Fructose Corporation 1986 Stock Option
Plan, assumed by the Company pursuant to the merger of American
Fructose Corporation with and into the Company on February 26,
1993, filed on July 14, 1986 on Form S-8 (File No. 33-7062), is
incorporated herein by reference.
(cc) -- Employment Agreement dated as of July 1, 1993 between
the Company and Patric J. McLaughlin is attached hereto as
Exhibit "10.(cc)".
(dd) -- Promissory Note dated April 29, 1993 in the amount of
$150,000 of Patric J. McLaughlin in favor of the Company is
attached hereto as Exhibit "10.(dd)".
11.(a)-- Calculation of Primary Earnings Per Share for the
fiscal years ended December 31, 1993, 1992 and 1991 inclusive is
attached hereto as Exhibit "11.(a)".
11.(b)-- Calculation of Fully-Diluted Earnings Per Share for the
fiscal years ended December 31, 1993, 1992 and 1991 inclusive is
attached hereto as Exhibit "11.(b)".
13. -- 1993 Annual Report to security holders of the Company,
is attached hereto as Exhibit "13".
21. -- Subsidiaries of the Company as of December 31, 1993 is
attached hereto as Exhibit "21.".
23. -- Consent of Coopers & Lybrand, dated March 25, 1994, is
attached hereto as Exhibit "23.".
(b) Reports on Form 8-K
No report on Form 8-K was filed during the last quarter of the
fiscal year ended December 31, 1993.
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the Company has caused this report to
be signed on its behalf by the undersigned, thereunto duly authorized.
AMERICAN MAIZE-PRODUCTS COMPANY
(Company)
March 18, 1994 By Edward P. Norris
________________________________________
Edward P. Norris,
Vice President and Chief Financial
Officer
Pursuant to the requirements of the Securities Exchange Act of
1934, this Report has been signed below by the following persons on
behalf of the Company and in the capacities and on the dates indicated.
March 18, 1994 By William Ziegler, III
________________________________________
William Ziegler, III,
Chairman of the Board
and Director
March 18, 1994 By Patric J. McLaughlin
________________________________________
Patric J. McLaughlin,
President and Chief Executive
Officer and Director
(Principal Executive Officer)
March 18, 1994 By Leslie C. Liabo
________________________________________
Leslie C. Liabo,
Director
March 18, 1994 By Charles B. Cook, Jr.
________________________________________
Charles B. Cook, Jr.,
Director
March 18, 1994 By Paul F. Engler
________________________________________
Paul F. Engler,
Director
March 18, 1994 By James E. Harwood
________________________________________
James E. Harwood,
Director
March 18, 1994 By John R. Kennedy
________________________________________
John R. Kennedy,
Director
March 18, 1994 By C. Alan MacDonald
________________________________________
C. Alan MacDonald,
Director
March 18, 1994 By H. Barclay Morley
________________________________________
H. Barclay Morley,
Director
March 18, 1994 By William L. Rudkin
________________________________________
William L. Rudkin,
Director
March 18, 1994 By Wendell M. Smith
________________________________________
Wendell M. Smith,
Director
March 18, 1994 By William C. Steinkraus
________________________________________
William C. Steinkraus,
Director
March 18, 1994 By Raymond S. Troubh
________________________________________
Raymond S. Troubh,
Director
March 18, 1994 By Edward P. Norris
________________________________________
Edward P. Norris,
Vice President and Chief Financial
Officer
(Principal Financial and Accounting
Officer)
<PAGE>
SECURITITES AND EXCHANGE COMMISSION
Washington, D.C. 20549
__________
FORM 10-K
ANNUAL REPORT
__________
CONSOLIDATED FINANCIAL STATEMENTS AND SCHEDULES
for the years ended December 31, 1993, 1992 and 1991
__________
AMERICAN MAIZE-PRODUCTS COMPANY
__________
<PAGE>
AMERICAN MAIZE-PRODUCTS COMPANY AND ITS SUBSIDIARIES
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS AND FINANCIAL
STATEMENT SCHEDULES
Consolidated Financial Statements Incorporated by Reference
The consolidated financial statements of American Maize-Products
Company and its subsidiaries and the Report of Independent
Accountants related thereto are incorporated herein by reference
to the Company's 1993 Annual Report to shareholders (Exhibit 13),
which Exhibit is not "filed" as a part of this Form 10-K except
for the consolidated financial statements and notes thereto and
Report of Independent Accountants on pages 21 through 36 thereof
and certain other information incorporated elsewhere herein.
Consolidated Financial Statements and Financial Statement
Schedules: Page
Report of Independent Accountants F-2
Financial Statement Schedules:
II. Amounts Receivable from Related Parties and
Underwriters, Promoters and Employees Other
Than Related Parties F-3
V. Property, Plant and Equipment for the years ended
December 31, 1993, 1992 and 1991 F-4
VI. Accumulated Depreciation of Property, Plant and
Equipment for the years ended December 31, 1993,
1992 and 1991 F-5
VIII. Valuation and Qualifying Accounts and Reserves for
the years ended December 31, 1993, 1992 and 1991 F-6
X. Supplementary Income Statement Information for the
years ended December 31, 1993, 1992 and 1991 F-7
Financial Statement Schedules Omitted
Financial Statement Schedules other than those listed above are
omitted because they are not required or are not applicable or
that the required information is presented in the consolidated
financial statements or notes thereto. Columns omitted from
financial statement schedules filed have been omitted because the
information is not applicable. Any other information omitted
from the financial statement schedules filed has been omitted due
to immateriality.
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and Stockholders,
American Maize-Products Company:
Our report on the consolidated financial statements of
American Maize-Products Company has been incorporated by
reference in this Form 10-K from the 1993 Annual Report to
security holders of American Maize-Products Company (Exhibit 13),
and appears on page 21 therein. In connection with our audits of
such financial statements, we have also audited the related
financial statement schedules listed in the accompanying index on
page F-1 of this Form 10-K.
In our opinion, the financial statement schedules referred
to above, when considered in relation to the basic financial
statements taken as a whole, present fairly, in all material
respects, the information required to be included therein.
COOPERS & LYBRAND
One Canterbury Green
Stamford, Connecticut
February 22, 1994.
<PAGE>
AMERICAN MAIZE-PRODUCTS COMPANY AND ITS SUBSIDIARIES
SCHEDULE II - AMOUNTS RECEIVABLE FROM RELATED PARTIES AND
UNDERWRITERS, PROMOTERS AND EMPLOYEES OTHER THAN RELATED PARTIES
For the years ended December 31, 1993, 1992 and 1991
(In thousands)
<TABLE>
<CAPTION>
Col. A Col. B Col. C Col. D Col. E
Balance at
Balance at Deductions End of Period
Beginning Amounts Amounts Not
Name of Debtor of Period Additions Collected Written Off Current Current
December 31, 1993:
<S> <C> <C> <C> <C> <C> <C>
Patric J. McLaughlin - $150(A) - - $50 $100
December 31, 1992:
Patric J. McLaughlin - - - - - -
December 31, 1991:
Patric J. McLaughlin - - - - - -
<FN>
_______________________
Note:
(A) In connection with Mr. McLaughlin's relocation, and becoming the
Company's President and Chief Operating Officer, the Company granted Mr.
McLaughlin a housing loan in the amount of $150,000 on April 29, 1993.
In return for the housing loan, Mr. McLaughlin issued the Company a
$150,000 note which requires three equal annual payments of principal,
together with interest due on the outstanding principal balance, on the
anniversary date of the note beginning on April 29, 1994. Interest on
the note is at the rate of 5.24% per annum on the unpaid principal of the
note. Collateral for the note is a second mortgage on Mr. McLaughlin's
principal residence.
</TABLE>
<PAGE>
AMERICAN MAIZE-PRODUCTS COMPANY AND ITS SUBSIDIARIES
SCHEDULE V - PROPERTY, PLANT AND EQUIPMENT
For the years ended December 31, 1993, 1992 and 1991
(In thousands)
<TABLE>
<CAPTION>
Col. A Col. B Col. C Col. D Col. E Col. F
Balance at Other Balance at
Beginning Additions Changes Add End of
Classification of Period At Cost Retirements (Deduct) Period
<S> <C>
December 31, 1993: (A)
Land $ 3,004
Buildings and
improvements 72,757
Machinery and
equipment 381,382
Construction in
progress 10,874
$468,017
December 31, 1992:(A)
Land $ 3,060
Buildings and
improvements 64,069
Machinery and
equipment 359,254
Construction in
progress 19,207
$445,590
December 31, 1991:(A)
Land $ 3,590
Buildings and
improvements 63,264
Machinery and
equipment 353,815
Construction in
progress 7,412
$428,081
______________________
Note:
(A) Details of additions, retirements and other changes are not
shown since such amounts were not required (less than 10% of the ending
balance in Column F). In 1993, 1992 and 1991 total additions aggregated
$43,633,000, $32,266,000 and $19,428,000 and retirements were $12,022,000,
$14,757,000 and $4,399,000, respectively, other changes in 1993 were a
deduction of $9,184,000. The other changes in 1993 include $8,769,000
related to the merger of American Fructose Corporation with and into the
Company.
</TABLE>
<PAGE>
AMERICAN MAIZE-PRODUCTS COMPANY AND ITS SUBSIDIARIES
SCHEDULE VI - ACCUMULATED DEPRECIATION of PROPERTY, PLANT AND EQUIPMENT
For the years ended December 31, 1993, 1992 and 1991
(In thousands)
<TABLE>
<CAPTION>
Col A. Col B. Col C. Col. D. Col. E. Col. F.
Additions
Balance at Charged to Other Balance at
Beginning Costs and Changes Add End of
Description of Period Expenses Retirements (Deduct) Period
<S> <C> <C> <C> <C> <C>
December 31, 1993: (A)
Buildings and $ 25,691 $ 3,964 $ 2,481 $ (2,101)(B) $ 25,073
improvements
Machinery and
equipment 185,078 26,319 2,878 (52,999)(B) 155,520
$210,769 $30,283 $ 5,359 $ (55,100) $ 180,593
December 31, 1992:(A)
Buildings and
improvements $ 23,881 $ 2,646 $ 836 $ - $ 25,691
Machinery and
equipment 171,934 22,796 9,652 - 185,078
$195,815 $25,442 $10,488 $ - $ 210,769
December 31, 1991:(A)
Buildings and
improvements $ 21,321 $ 2,569 $ 9 $ - $ 23,881
Machinery and
equipment 152,010 22,601 2,677 - 171,934
$173,331 $25,170 $ 2,686 $ - $ 195,815
<FN>
Note:
(A) Buildings and improvements and machinery and equipment are depreciated
over their useful lives, generally on the straight-line method. Assets
recorded under capital leases are amortized over the lease term or, if
title ultimately passes to the Company, over the estimated useful lives.
Depreciation is based on the following useful lives: Buildings and
improvements, 3 to 45 years; machinery and equipment, 3 to 20 years.
(B) In connection with the merger of American Fructose Corporation with and
into the Company, the accumulated depreciation relating to the assets
held by the minority interest were eliminated.
/TABLE
<PAGE>
AMERICAN MAIZE-PRODUCTS COMPANY AND ITS SUBSIDIARIES
SCHEDULE VIII - VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
For the years ended December 31, 1993, 1992 and 1991
(In thousands)
<TABLE>
<CAPTION>
Col A. Col B. Col C. Col. D. Col. E.
Additions
Balance at Charged to
Beginning Costs and Balance at
Description of Period Expenses Deductions End of Period
<S> <C> <C> <C> <C>
For the year ended
December 31, 1993:
Allowance for
doubtful accounts $2,109 $1,979 $ 479(A) $3,609
For the year ended
December 31, 1992:
Allowance for
doubtful accounts $1,600 $ 895 $ 386(A) $2,109
For the year ended
December 31, 1991:
Allowance for
doubtful accounts $3,237 $ 553 $2,190(B) $1,600
<FN>
_________________________
Notes:
(A) Doubtful accounts written off.
(B) Doubtful accounts written off during the year including $2,000,000
related to certain accounts of a discontinued international sales and
trading company business.
/TABLE
<PAGE>
AMERICAN MAIZE-PRODUCTS COMPANY AND ITS SUBSIDIARIES
SCHEDULE X - SUPPLEMENTARY INCOME STATEMENT INFORMATION
For the years ended December 31, 1993, 1992 and 1991
(In thousands)
Col. A Col. B
Item Charged to Costs and Expenses
1993 1992 1991
Maintenance and repairs $24,515 $24,529 $24,553
Taxes, other than payroll
and income taxes:
Federal excise $10,099 $ 8,247 $ 8,131
Other 5,947 6,348 5,619
$16,046 $14,595 $13,750
<PAGE>
INDEX TO EXHIBITS
Sequential
Regulation S-K Page
Exhibit No: Exhibit Number
2. -- The Amended and Restated Agreement *
and Plan of Merger, dated as of
December 15, 1992, by and between
the Company and AFC attached as Annex
A to the Joint Proxy Statement/Prospectus
forming a part of the Company's registration
statement on Form S-4 (File No. 33-55946).
3.(a)-- The Restated Articles of Incorporation of *
the Company, as amended through February
26, 1993, filed as Exhibit "3.(a)" to the
Company's Form 10-K Annual Report for the
fiscal year ended December 31, 1992
(File No. 1-6244).
(b)-- By-Laws, as amended to February 24, 1993, *
filed as Exhibit "3.(b)" to the Company's
Form 10-K Annual Report for the fiscal
year ended December 31, 1992
(File No. 1-6244).
4.(a)-- A specimen copy of the certificates for the *
Company's Class A Common Stock, par value
$.80 per share, filed as Exhibit "4.3" to
the Company's registration statement on
Form S-4 (File No. 33-55946).
(b)-- A specimen copy of the certificates for the *
Company's Class B Common Stock, par value
$.80 per share, filed as Exhibit "4.(b)"
to the Company's Form 10-K Annual Report
for the fiscal year ended December 31, 1992
(File No. 1-6244).
(c)-- Note Agreement dated as of March 3, 1993 *
among the Company and each Purchaser in the
Private Placement of the Company's 7.875%
Senior Notes due March 3, 2003, filed as
Exhibit "4.(g)" to the Company's Form 10-K
Annual Report for the fiscal year ended
December 31, 1992 (File No. 1-6244).
10.(a)-- Supplemental Pension Program, filed as *
Exhibit "10.(f)" to the Company's Form
10-K Annual Report for the fiscal year
ended December 31, 1991 (File No. 1-6244).
(b)-- Unfunded Supplemental Pension Plan Trust *
Agreement relating to Item 10.(a) above,
filed as Exhibit "10.(g)" to the Company's
Form 10-K Annual Report for the fiscal year
ended December 31, 1991 (File No. 1-6244).
(c)-- Funded Supplemental Pension Plan Trust *
Agreement relating to Item 10.(a) above,
filed as Exhibit "10.(h)" to the Company's
Form 10-K Annual Report for the fiscal year
ended December 31, 1991 (File No. 1-6244).
(d)-- Deferred Compensation Plan, filed as *
Exhibit "10." to the Company's Form 10-K
Annual Report for the fiscal year ended
December 31, 1981 (File No. 1-6244).
(e)-- Executive Life Insurance Program summary, *
filed as Exhibit "10.(j)" to the Company's
Form 10-K Annual Report for the fiscal year
ended December 31, 1991 (File No. 1-6244).
(f)-- Pertinent provisions of Incentive *
Compensation Program, filed as Exhibit
"11." to the Company's Form 10-K Annual
Report for the fiscal year ended
December 31, 1981 (File No. 1-6244).
(g)-- American Maize-Products Company Directors *
Retirement Benefit Plan, filed as
Exhibit "10.(l)" to the Company's Form
10-K Annual Report for the fiscal year
ended December 31, 1991 (File No. 1-6244).
(h)-- The 1976 Stock Option Plan, as amended *
November 24, 1981, filed as Exhibit "12."
to the Company's Form 10-K Annual Report
for the fiscal year ended December 31, 1981
(File No. 1-6244).
(i)-- The 1985 Stock Option Plan, filed as *
Exhibit "5." to the Company's Form 10-K
Annual Report for the fiscal year ended
December 31, 1985 (File No. 1-6244).
(j)-- The 1985 Stock Option Plan, as *
amended, filed as Exhibit "4.(f)" to
the Company's registration statement
on Form S-8 on July 7, 1988
(File No. 33-22943).
(k)-- Lease between Harbor Plaza Associates, *
Landlord, and the Company, Tenant,
relating to the offices located at
41 Harbor Plaza Drive (presently known as
250 Harbor Drive), Stamford, Connecticut,
filed as Exhibit "13." to the Company's
Form 10-K Annual Report for the fiscal year
ended December 31, 1981 (File No. 1-6244).
(l)-- Services Agreement dated February 1, 1973 *
between Dimmitt Agri Industries, Inc. and
Amstar Corporation, filed as Exhibit
"10.1(a)" to the Company's Form 8-K
Current Report on December 13, 1984
(File No. 1-6244).
(m)-- Assignment of Services Agreement dated *
November 28, 1984 among Amstar Corporation,
Dimmitt Operating Inc. and Dimmitt Agri
Industries, Inc., filed as Exhibit
"10.1(e)" to the Company's Form 8-K Current
Report on December 13, 1984
(File No. 1-6244).
(n)-- Letter Amendments dated August 24, 1977, *
November 24, 1980 and November 18, 1982 in
connection with Exhibit "10(m)" above,
filed as Exhibits "10.1(b)," "10.1(c)" and
"10.1(d)" to the Company's Form 8-K Current
Report on December 13, 1984
(File No. 1-6244).
(o)-- Lease Agreement dated as of February 1, *
1973 between Dimmitt Agri Industries,
Inc. and Amstar Corporation, filed as
Exhibit "10.2(a)" to the Company's Form 8-K
Current Report on December 13, 1984
(File No. 1-6244).
(p)-- Assignment of Lease Agreement dated *
November 28, 1984 among Amstar Corporation,
Dimmitt Operating Inc., Dimmitt Agri
Industries, Inc. and Texas Bank for
Cooperatives filed as Exhibit "10.2(b)"
to the Company's Form 8-K Current Report on
December 13, 1984 (File No. 1-6244).
(q)-- Credit Agreement dated as of July 1, 1991 *
among the Company, the signatory lenders
thereto, and The Bank of New York, as agent,
filed as Exhibit "10.(a)" to the Company's
Form 10-Q Quarterly Report for the quarterly
period ended September 30, 1991
File No. 1-6244).
(r)-- Guaranty dated as of July 1, 1991 made by *
Jno. H. Swisher & Son, Inc., to The Bank
of New York, as Agent, and the signatory
lenders under the Credit Agreement
referenced in Item 10.(q) above, filed as
Exhibit "10.(b)" to the Company's Form
10-Q Quarterly Report for the quarterly
period ended September 30, 1991
(File No. 1-6244).
(s)-- Guaranty dated as of July 1, 1991 made by *
Helme Tobacco Company to The Bank of New
York, as agent, and the signatory lenders
under the Credit Agreement referenced in
Item 10.(q) above, filed as Exhibit
"10.(c)" to the Company's Form 10-Q
Quarterly Report for the quarterly period
ended September 30, 1991 (File No. 1-6244).
(t)-- Agreement dated as of March 1, 1991 *
among William Ziegler, III, Helen Z.
Steinkraus, GIH Corp., Donald E. McNicol
and the trustees of certain trusts for
the benefit of Mr. Ziegler and his issue
and the trustees of certain trusts for
the benefit of Mrs. Steinkraus and her
issue, filed as Exhibit "10.(a)" to the
Company's Form 8-K Current Report dated
March 29, 1991 (File No. 1-6244).
(u)-- Amendment No. 1 dated as of March 14, *
1991, to Item 10.(t) above, filed as Exhibit
"10.(b)" to the Company's Form 8-K Current
Report dated March 29, 1991 (File No. 1-6244).
(v)-- Stockholders Agreement dated as of *
March 1, 1991 among William Ziegler, III,
Helen Z. Steinkraus, certain trusts for
the benefit of Mr. Ziegler and his issue
and certain trusts for the benefit of Mrs.
Steinkraus and her issue, filed as Exhibit
"10.(c)" to the Company's Form 8-K Current
Report dated March 29, 1991 (File No. 1-6244).
(w)-- Amendment No. 1 dated as of July 1, 1992, *
to Item 10.(q) above, filed as Exhibit
"10.(w)" to the Company's Form 10-K
Annual Report for the fiscal year ended
December 31, 1992 (File No. 1-6244).
(x)-- Consent and Amendment No. 2 dated as
of March 3, 1993, to Item 10.(q) above,
filed as Exhibit "10.(x)" to the Company's
Form 10-K Annual Report for the fiscal year
ended December 31, 1992 (File No. 1-6244).
(y)-- Amendment effective April 24, 1992 to the *
1985 Stock Option Plan, as amended, filed as
Exhibit "10.(bb)" to the Company's Form 10-K
Annual Report for the fiscal year ended
December 31, 1992 (File No. 1-6244).
(z)-- Consent and Amendment No. 3 dated
as of July 19, 1993, to Item 10.(q)
above, is attached hereto as
Exhibit "10.(z)".
(aa)-- Consent No. 4 and Waiver to the Credit
Agreement dated as of March 4, 1994,
to Item 10.(q) above, is attached hereto
as Exhibit "10.(aa)".
(bb))-- The American Fructose Corporation 1986 *
Stock Option Plan, assumed by the Company
pursuant to the merger of American Fructose
Corporation with and into the Company on
February 26, 1993, filed on July 14, 1986
on Form S-8 (File No. 33-7062).
(cc)-- Employment Agreement dated as of July 1, 1993
between the Company and Patric J. McLaughlin
is attached hereto as Exhibit "10.(cc)".
(dd)-- Promissory Note dated April 29, 1993 in
the amount of $150,000 of Patric J. McLaughlin
in favor of the Company is attached hereto as
Exhibit "10.(dd)".
11.(a)-- Calculation of Primary Earnings Per Share
for the fiscal years ended December 31, 1993,
1992 and 1991 inclusive is attached hereto as
Exhibit "11.(a)".
11.(b)-- Calculation of Fully-Diluted Earnings Per Share
for the fiscal years ended December 31, 1993,
1992 and 1991 inclusive is attached hereto as
Exhibit "11.(b)".
13. -- 1993 Annual Report to security holders of the
Company is attached hereto as Exhibit "13".
21. -- Subsidiaries of the Company as of December 31, 1993
is attached hereto as Exhibit "21.".
23. -- Consent of Coopers & Lybrand, dated March 25, 1994,
is attached hereto as Exhibit "23.".
__________________
* Incorporated by Reference.
The Company will make the foregoing exhibits available upon
request upon payment of a charge of $.25 per page and postage.
Requests should be addressed to the Secretary, American Maize-
Products Company, P.O. Box 10128, 250 Harbor Drive, Stamford, CT
06904.
<PAGE>
CONSENT AND
AMENDMENT NO. 3
TO THE
CREDIT AGREEMENT
CONSENT AND AMENDMENT NO. 3 (this "Amendment"), dated
as of July 19, 1993, to the Credit Agreement, dated as of July 1,
1991, by and among AMERICAN MAIZE-PRODUCTS COMPANY, a Maine
corporation, the signatory LENDERS thereto and THE BANK OF NEW
YORK, as agent (as amended by Amendment No. 1, dated as of July
1, 1992, and Amendment No. 2, dated as of March 3, 1993, the
"Credit Agreement").
RECITALS
I. Capitalized terms used herein which are defined in the
Credit Agreement shall have the meanings therein defined.
II. The Company has requested an amendment to the Credit
Agreement to revise certain financial reporting covenants
contained therein, and the Agent has agreed to such amendment on
the terms and conditions, and subject to the limitations,
contained herein.
III. The Company has also requested the Agent to consent to
its non compliance with paragraph 7 of Amendment No. 1 to the
Credit Agreement in connection with the payment by the Company of
certain attorneys' fees in connection with certain shareholder
suits, and the Agent has consented to such noncompliance on the
terms and conditions, and subject to the limitations, contained
herein.
Accordingly, in consideration of the covenants and
conditions hereinafter set forth, and for other good and valuable
consideration, the receipt and adequacy of which are hereby
acknowledged, the parties hereto agree as follows:
1. Paragraph 1.1 of the Credit Agreement is hereby
amended by adding the following definition in its proper
alphabetical order:
"Results of Operations Report": the report of the
Company and the Subsidiaries, taken separately, prepared for
distribution to the board of directors of the Company,
substantially in the form of the report attached hereto as
Exhibit Q, as such report may be modified from time to time,
such modifications to be satisfactory to the Agent and the
Lenders.
2. Paragraph 7.1(b) of the Credit Agreement is hereby
amended and restated in its entirety as follows:
(b) As soon as available, but in any event not later than
60 days after the end of each of the first three quarterly
accounting periods in each fiscal year of the Company,
(i) a copy of the Consolidated Balance Sheet as at the
end of each such quarterly period, and the Consolidated
Statements of Income, Cash Flows and Shareholders' Equity,
for such period and for the elapsed portion of the fiscal
year through such date, setting forth in each case in
comparative form the figures for the corresponding periods
of the preceding fiscal year, together with the Results of
Operations Report for the elapsed portion of the fiscal year
through such date, each of which in all cases shall be
certified by the Chief Financial Officer of the Company
(or such other officer acceptable to the Agent) (A) as
presenting fairly the Consolidated or Consolidating, as the
case may be, financial condition and results of operations
of the Company and the Subsidiaries and (B) with respect to
the Consolidated Balance Sheets and Statements of Income,
Cash Flows and Shareholders' Equity, as having been prepared
in accordance with GAAP, and (ii) a certificate of the Chief
Financial Officer of the Company (or such other officer as
shall be acceptable to the Agent) in detail reasonably
satisfactory to the Agent (1) stating that there exists no
violation of any of the terms or provisions of the Loan
Documents, or the occurrence of any condition or event which
would constitute a Default or Event of Default, and, if so,
specifying in such certificate all such violations, conditions
and events, and the nature and status thereof and (2) containing
computations showing compliance with the provisions of paragraphs
7.11, 7.12, 7.13 and 7.16.
3. Paragraph 9.1 of the Credit Agreement is hereby amended
to add the following immediately before the period at the end of
subparagraph (1) contained therein:
; or
(m) the resolutions of the Board of Directors, dated
April 24, 1992, as amended by the resolutions dated April 28,
1993 authorizing the payment by the Company to Helen and Eric
Steinkraus of not more than $600,000 to reimburse the
Steinkrauses for a portion of the legal expenses incurred by
them in connection with certain shareholder litigation, as more
particularly described in such resolutions and amended
resolutions, shall have been modified, rescinded or amended in
any way or shall not be in full force and effect, or the Company
shall not abide by the terms of such resolutions and amended
resolutions in any respect, or the Company shall make all or any
part of such payment to the Steinkrauses prior to the execution
and delivery of settlement documents incorporating the terms of
settlement substantially as outlined in the letter, dated April
26, 1993, from David E. Brodsky, Esq. to Michael J. Chepiga, Esq.
and Rodman Ward, Jr., Esq.
4. Notwithstanding anything to the contrary contained in
the Credit Agreement (including, without limitation, paragraph
8.10) or paragraph 7 of Amendment No. 1, dated as of July 1,
1992, to the Credit Agreement, the Agent, on behalf of the
Lenders, hereby consents to the payment by the Company to Helen
and Eric Steinkraus of not more than $600,000 to reimburse the
Steinkrauses for a portion of their legal expenses incurred in
connection with certain shareholder litigation, provided that (i)
each of the letter, dated April 26, 1993, from David E. Brodsky,
Esq. to Michael J. Chepiga, Esq. and Rodman Ward, Jr., Esq.
outlining the terms of the settlement and that settlement papers
incorporating such terms have been executed and delivered, and
both the letter and the settlement papers shall not have been
terminated or rescinded and continue in full force and effect and
(ii) immediately before and after giving effect to such payment,
no Default or Event of Default shall exist.
5. The Credit Agreement is hereby amended to add Exhibit
Q, Form of Results of Operations Report, in substantially the
form attached hereto.
6. In all other respects, the Credit Agreement and the
other Loan Documents shall remain in full force and effect.
7. The effectiveness of this Amendment is subject to the
fulfillment of the following conditions precedent:
(a) The execution and delivery of this Amendment by the
parties hereto;
(b) The receipt by the Agent of the consent of the Required
Lenders to the execution hereof;
(c) The receipt by the Agent of duly adopted resolutions of
the Board of Directors of the Company authorizing the payment to
Helen and Eric Steinkraus of not more than $600,000 to reimburse
the Steinkrauses for legal expenses incurred in connection with
certain shareholder litigation, such resolutions to be
satisfactory to the Agent in form and substance; and
(d) All representations and warranties contained herein and
in the Loan Documents shall be true and correct immediately
before and after giving effect to this Amendment.
8. The Company hereby (a) reaffirms and admits the
validity and enforceability of all the Loan Documents and its
obligations thereunder, (b) agrees and admits that it has no
valid defenses to or offsets against any of its obligations to
the Agent or the Lenders under the Loan Documents, (c) agrees to
pay the reasonable fees and disbursements of Special Counsel
incurred in connection with the preparation, negotiation and
closing of this amendment, and (d) represents and warrants that,
immediately before and after giving effect hereto, no Default or
Event of Default exists.
9. This Amendment may be executed in any number of
counterparts, each of which shall be an original and all of which
shall constitute one agreement. It shall not be necessary in
making proof of this Amendment to produce or account for more
than one counterpart signed by the party against which
enforcement is sought.
10. THIS AMENDMENT IS BEING DELIVERED IN AND IS INTENDED TO
BE PERFORMED IN THE STATE OF NEW YORK AND SHALL BE CONSTRUED AND
ENFORCEABLE IN ACCORDANCE WITH, AND BE GOVERNED BY, THE INTERNAL
LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO PRINCIPLES OF
CONFLICT OF LAWS.
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be duly executed as of the date first above written.
AMERICAN MAIZE-PRODUCTS COMPANY,
a Maine corporation
By: /s/Robert A. Britton
Name: Robert A. Britton
Title: Vice President and Treasurer
THE BANK OF NEW YORK, as Agent
By:
Name:
Title:
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be duly executed as of the date first above written.
AMERICAN MAIZE-PRODUCTS COMPANY,
a Maine corporation
By:
Name:
Title:
THE BANK OF NEW YORK, as Agent
By: /s/Edward J. Moriarty
Name: Edward J. Moriarty
Title: Vice President
<PAGE>
CONSENT NO. 4
AND
WAIVER
TO THE
CREDIT AGREEMENT
CONSENT NO. 4 AND WAIVER (this "Consent and Waiver"),
dated as of March 4, 1994, to the Credit Agreement (as amended
the "Credit Agreement"), dated as of July 1, 1991, by and among
AMERICAN MAIZE-PRODUCTS COMPANY, a Maine corporation (the
"Company"), the signatory LENDERS thereto and THE BANK OF NEW
YORK, as agent (the "Agent").
RECITALS
I. Capitalized terms used herein which are defined in
the Credit Agreement shall have the meanings therein defined.
II. The Company has requested the Agent and the
Lenders to waive any Events of Default occurring during the
period from January 1, 1993 through the date hereof in connection
with certain financial covenants required to be maintained under
the Credit Agreement, and to consent to the method of calculation
of such covenants hereafter in a manner inconsistent with the
terms set forth in the Credit Agreement, and the Agent and the
Lenders have agreed to such waiver and consent on the terms and
conditions, and subject to the limitations, contained herein.
Accordingly, in consideration of the covenants and
conditions hereinafter set forth, and for other good and valuable
consideration, the receipt and adequacy of which are hereby
acknowledged, the parties hereto agree as follows:
1. The Agent, on behalf of the Lenders, hereby waives
any Event of Default under paragraph 9.1(d) resulting from the
failure by the Company to comply with paragraphs 7.12 and 7.16
during the period from January 1, 1993 through the date hereof
resulting directly from the following:
(a) the exclusion by the Company from its calculation of
"EBITDA" of charges and accruals against the Company during
such period taken in connection with (i) the Statements of
Financial Accounting Standards Board Nos. 106 and 112 and
(ii) the asset write-down with respect to the closing of the
Company's Helmetta, NJ snuff factory (provided that the
aggregate amount of such write-down is not greater than
$5,200,000); and
(b) the exclusion by the Company from its calculation of
"Total Liabilities" of liabilities incurred by the Company
during such period in connection with the Statements of
Financial Standards Nos. 106 and 112.
2. Notwithstanding anything to the contrary contained in
the definition of "EBITDA" appearing in paragraph 1.1 of the
Credit Agreement, the Agent, on behalf of the Lenders, hereby
consents to the exclusion from such calculation of EBITDA, for
any period, of all charges and accruals, if any, against the
Company on a Restricted Consolidated basis taken during such
period in connection with the Statements of Financial Accounting
Standards Board Nos. 106 and 112, after giving effect to any
corresponding income tax credits or other benefits received by
the Company in connection with such charges and accruals.
3. Notwithstanding anything to the contrary contained in
the definition of "Total Liabilities" appearing in paragraph 1.1
of the Credit Agreement, the Agent, on behalf of the Lenders,
hereby consents to the exclusion from such calculation of Total
Liabilities, for any period, all liabilities, if any, incurred by
the Company on a Restricted Consolidated basis during such period
in connection with the Statements of Financial Accounting
Standards Board Nos. 106 and 112, after giving effect to any
corresponding income tax credits or other benefits received by
the Company in connection with such charges and liabilities.
4. In all other respects, the Credit Agreement and the
other Loan Documents shall remain in full force and effect.
5. The effectiveness of this Consent and Waiver is
conditioned upon the execution and delivery of this Consent and
Waiver by the parties hereto, and the receipt by the Agent of the
consent of the Required Lenders to the execution hereof.
6. The company hereby (a) reaffirms and admits the
validity and enforceability of all the Loan Documents and its
obligations thereunder, (b) agrees and admits that it has no
valid defenses to or offsets against any of its obligations to
the Agent or the Lenders under the Loan Documents, (c) agrees to
pay the reasonable fees and disbursements of Special Counsel
incurred in connection with the preparation, negotiation and
closing of this Consent and Waiver, and (d) represents and
warrants that (i) all representations and warranties contained
herein and in the Loan Documents are and shall be true and
correct immediately before and after giving effect to this
Consent and Waiver and (ii) immediately after giving effect
hereto, no Default or Event of Default shall exist.
7. This Consent and Waiver may be executed in any number
of counterparts, each of which shall be an original and all of
which shall constitute one agreement. It shall not be necessary
in making proof of this Consent and Waiver to produce or account
for more than one counterpart signed by the party against which
enforcement is sought.
8. THIS CONSENT AND WAIVER IS BEING DELIVERED IN AND IS
INTENDED TO BE PERFORMED IN THE STATE OF NEW YORK AND SHALL BE
CONSTRUED AND ENFORCEABLE IN ACCORDANCE WITH, AND BE GOVERNED BY,
THE INTERNAL LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO
PRINCIPLES OF CONFLICT OF LAWS.
IN WITNESS WHEREOF, the parties hereto have caused this
Consent and Waiver to be duly executed as of the date first above
written.
THE BANK OF NEW YORK, as Agent
By:
Name:
Title:
ACCEPTED AND AGREED TO:
AMERICAN MAIZE-PRODUCTS COMPANY
By: /s/ Edward P. Norris
Name: Edward P. Norris
Title: V. P. and Chief Financial Officer
<PAGE>
pay the reasonable fees and disbursements of Special Counsel
incurred in connection with the preparation, negotiation and
closing of this Consent and Waiver, and (d) represents and
warrants that (i) all representations and warranties contained
herein and in the Loan Documents are and shall be true and
correct immediately before and after giving effect to this
Consent and Waiver and (ii) immediately after giving effect
hereto, no Default or Event of Default shall exist.
7. This Consent and Waiver may be executed in any number
of counterparts, each of which shall be an original and all of
which shall constitute one agreement. It shall not be necessary
in making proof of this Consent and Waiver to produce or account
for more than one counterpart signed by the party against which
enforcement is sought.
8. THIS CONSENT AND WAIVER IS BEING DELIVERED IN AND IS
INTENDED TO BE PERFORMED IN THE STATE OF NEW YORK AND SHALL BE
CONSTRUED AND ENFORCEABLE IN ACCORDANCE WITH, AND BE GOVERNED BY,
THE INTERNAL LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO
PRINCIPLES OF CONFLICT OF LAWS.
IN WITNESS WHEREOF, the parties hereto have caused this
Consent and Waiver to be duly executed as of the date first above
written.
THE BANK OF NEW YORK, as Agent
By: /s/David C. Judge
Name: David C. Judge
Title: Vice President
ACCEPTED AND AGREED TO:
AMERICAN MAIZE-PRODUCTS COMPANY
By:
Name:
Title:
<PAGE>
Employment Agreement
AGREEMENT made and entered into as of July 1, 1993 by and
between American Maize-Products Company, a Maine corporation with
offices at 250 Harbor Drive, Stamford, CT 06902 (the "Company")
and Patric J. McLaughlin of [Home Address] (the "Employee").
WHEREAS, prior to the effective date of this Agreement,
Employee was employed by the Company in various capacities, and
WHEREAS, the Company and Employee desire to continue such
employment with the Company on the terms and subject to the
conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and
agreements set forth herein, the parties agree as follows:
1. Employment and Term. The Company agrees to employ the
Employee and Employee agrees to serve the Company as President
and Chief Executive Officer of the Company commencing the date
hereof and terminating June 30, 1996 (the "Termination Date"),
subject to the terms and conditions of this Agreement. On each
anniversary date of this Agreement starting with the first
anniversary on July 1, 1994, through and including the seventh
anniversary on July 1, 2000, the Termination Date shall be
automatically extended for an additional twelve-month period,
unless prior thereto (i) the parties have agreed to terminate the
employment or (ii) the Company has given notice of termination
under paragraph 5.
2. Services and Duties. Employee shall have appropriate
responsibilities, duties and authorities commensurate with the
task of serving as President and Chief Executive Officer.
Employee shall be responsible to the Board of Directors and shall
devote substantially all of his business attention, skill and
efforts to the faithful and diligent performance of his duties.
The expenditure of reasonable amounts of time by the Employee for
personal or outside charitable and professional activities shall
not be deemed a breach of this Agreement, provided such
activities do not materially interfere with the services required
to be rendered by Employee under this Agreement and are not
contrary to the business or other interests of the Company.
3. Compensation and Benefits. During the period of his
employment under this Agreement, the Employee shall receive the
following compensation and benefits:
a. Base salary in the amount of Four Hundred Thousand
Dollars ($400,000) per annum, payable in equal bi-weekly
installments. Employee's base salary will be reviewed
annually by the Compensation Committee of the Board of
Directors for possible increases or decreases based upon
Employee's performance.
b. Annual incentive compensation based on individual
and company performance targets to be mutually agreed upon
each year by the parties. The amount of the annual
incentive compensation payable will be determined by the
Company's management incentive plan in effect from time to
time, it being understood that the annual incentive
compensation "target" rate under the current plan shall be
fifty percent (50%) of Employee's annual base salary.
c. Employee shall be entitled to participate in any
benefit programs made available from time to time by the
Company to executives and/or other salaried employees,
including but not limited to the Company's retirement plan;
401(k) plan; executive life insurance program;
hospitalization, surgical and major medical coverage for
Employee and his dependents; sick leave and short-term
disability; long-term disability coverage; vacation and
holidays.
4. Business Expense Reimbursements and Perquisites.
Employee shall be entitled to reimbursement for all reasonable
and necessary out-of-pocket expenses incurred by him in
performing services hereunder, subject to appropriate
documentation. The Company shall also reimburse Employee for the
cost of an annual physical examination. Employee shall be
provided with the use of an automobile under the conditions
specified in the Company's policies governing same.
5. Termination of Employment.
a. Employee's employment shall terminate upon his
death.
b. In the event Employee becomes, in the good faith
determination by the Board of Directors based upon
professional medical advice to the Board of Directors,
physically or mentally disabled so as to be unable, for a
period of more than 90 consecutive days, or for more than
120 days in the aggregate during a twelve-month period, to
perform his duties hereunder on a full-time basis, the
Company may at its option, terminate his employment upon not
less than five days written notice.
c. The Company may terminate the Employee's employment
at any time for cause, including but not limited to the
occurrence of any of the following: (i) a default or other
breach by the Employee of his obligations under this
Agreement, (ii) failure by the Employee diligently and
competently to perform his duties under this Agreement,
(iii) misconduct, dishonesty or insubordination by the
Employee, or (iv) any act or omission by the Employee
detrimental to the business reputation of the Company or
damaging to the Company's relationship with its customers,
suppliers or employees.
d. The Company may terminate the Employee's employment
at any time without cause. In the event that the Employee's
employment is terminated without cause and subject to the
conditions set forth below, the Company shall provide the
following severance benefits to Employee until the
Termination Date:
(i) The Company shall continue to pay to Employee
the bi-weekly base salary amounts under paragraph 3(a).
(ii) The Company shall continue to make incentive
compensation payments to Employee under paragraph 3(b)
in the amounts equivalent to his "target" incentive
compensation under the management incentive plan in
effect at the time of his termination.
(iii) Employee shall continue to participate in the
Company benefit plans under paragraph 3(c); provided,
however, that Employee shall not be entitled to any
stock option grants or long-term incentive compensation
awards that have not previously been granted prior to
his termination. The calculation of Employee's pension
benefit under the Company's retirement plan shall
include credit for the amounts paid under subparagraphs
5(d)(i) and 5(d)(ii) and the duration of such payments
for purpose of determining length of service, and
amounts equivalent to the resulting benefit shall be
paid out of a non-qualified plan to the extent
necessary.
(iv) Employee shall use his best efforts to find
other employment during the period he is entitled to
receive severance benefits from the Company. Any
compensation, fee or benefit earned by Employee from any
part-time or full-time employment in any capacity during
the period he is entitled to receive severance benefits
from the Company shall be deducted in full from the
amounts otherwise payable under the above three
paragraphs.
(v) Stock options which have been awarded to
Employee prior to his termination shall remain
exercisable until the earlier of their expiration date
or the third anniversary of termination of his
employment, subject to appropriate modification of the
Company's stock option plans.
Severance payments to the Employee by the Company
described above shall be in full and complete satisfaction
of any and all obligations owing to the Employee pursuant to
this Agreement.
e. In the event of termination of employment under
paragraph 5(a), 5(b) or 5(c), or termination of employment
for any reason regardless of cause on or after the
Termination Date, the Company shall not be obligated to make
any severance payments to Employee, and Employee's
entitlement to compensation and benefits under paragraph 3
shall cease upon such termination of employment.
6. Constructive Termination. It is mutually understood and
agreed that a substantial reduction in Employee's
responsibilities, functions or authority to a level not
commensurate with the task of serving as President and Chief
Executive Officer or transfer of Employee to an inappropriate
location shall, upon election by the Employee, be deemed to be a
termination of employment by the Company, and the Employee shall
be entitled to the severance benefits under paragraph 5(d) unless
the Company has grounds for termination under paragraph 5(c).
7. Confidential Information. The Employee shall not,
during the period of his employment or at any time thereafter
disclose or communicate to any unauthorized person, firm or
corporation, or use for his own purposes, trade secrets,
confidential commercial information, or any other information,
knowledge or data of the Company or any of its affiliates which
is not generally known to the public and shall use his best
efforts to prevent the publication or disclosure by any person of
any such secret, information, knowledge or data. All documents
and objects made, compiled, received, held or used by the
Employee while employed by the Company in connection with the
business of the Company shall be and remain the Company's
property and shall be delivered by the Employee to the Company
upon the termination of the Employee's employment or at any
earlier time requested by the Company.
8. Employee Hiring Restriction. The Employee shall not,
for a period of two years after termination of his employment,
employ or retain any person as a consultant or otherwise who was
employed by the Company or any of its affiliates or induce such
person to accept employment or retention other than with the
Company and its affiliates.
9. Arbitration. Any dispute or controversy arising under
or in connection with this Agreement (except any dispute with
respect to paragraph 7 or 8) shall be settled exclusively by
arbitration in Connecticut or New York in accordance with the
rules of the American Arbitration Association then in effect.
Judgment upon the award rendered may be entered in any court
having jurisdiction thereof. The Company shall not be required
to arbitrate any dispute or claim arising under paragraph 7 or 8
but shall have the right to institute judicial proceedings in any
court of competent jurisdiction with respect to such dispute or
claim, and such judicial proceeding shall not be stayed or
delayed pending the outcome of any arbitration proceeding
hereunder. The Employee agrees that a breach of paragraph 7 or 8
will result in irreparable and continuing damage to the Company
for which there will be no adequate remedy at law and that the
Company shall be entitled to injunctive relief in the event of
breach of paragraph 7 or 8.
10. Governing Law. The validity, construction,
interpretation and enforcement of this Agreement shall be
determined and governed by the laws of the State of Connecticut.
11. Entire Agreement. This Agreement constitutes the
entire agreement between the parties hereto with respect to the
Employee's employment by the Company, and supersedes and is in
full substitution for any and all prior understandings or
agreements with respect to the Employee's employment. In the
event of conflict between this Agreement and the provisions of
any Company benefit plan under which Employee is entitled to
receive benefits, the provisions of this Agreement shall prevail.
12. Notices. Any notices required or permitted to be given
under this Agreement shall be sufficient if in writing and sent
by certified mail to the following address or to such other
address as either party shall designate in writing to the other:
To the Employee: To the Company:
Mr. Patric J. McLaughlin American Maize-Products Company
[Home Address] 250 Harbor Drive
Stamford, CT 06902
13. Amendments and Waiver. This Agreement may be amended
only by an instrument in writing signed by the parties hereto,
and any provision hereof may be waived only by an instrument in
writing signed by the party or parties against whom or which
enforcement of such waiver is sought. The failure of either
party hereto at any time to require the performance by the other
party hereto of any provision hereof shall in no way affect the
full right to require such performance at any time thereafter,
nor shall the waiver by either party hereto of a breach of any
provision hereof be taken or held to be a waiver of any
succeeding breach of such provision or a waiver of the provision
itself or a waiver of any other provision of this Agreement.
14. Assignments. Neither this Agreement nor any right or
obligation hereunder may be assigned by the Company (except to an
affiliate) or by the Employee.
15. Scope. If any provision of this Agreement, or portion
thereof, is so broad, in scope or duration, so as to be
unenforceable, such provision or portion thereof shall be
interpreted to be only so broad as is enforceable.
16. Survival of Covenants. The obligations of the Employee
set forth in paragraphs 7, 8 and 9 represent independent
covenants by which the Employee is and will remain bound
notwithstanding any breach by the Company, and shall survive the
termination of this Agreement.
17. Withholding Taxes. All amounts payable under this
Agreement shall be subject to applicable deductions for
withholding taxes, FICA, unemployment compensation and the like.
18. Binding Effect. This Agreement shall be binding upon
and inure to the benefit of the Company, its successors and
assigns and the Employee, his heirs, executors and
administrators.
IN WITNESS WHEREOF, the parties have executed this Agreement
effective as of the date first written above.
EMPLOYEE AMERICAN MAIZE-PRODUCTS COMPANY
/s/ Patric J. McLaughlin By /s/ H. Barklay Morley
_________________________ _________________________________
Patric J. McLaughlin Its Chairman, Compensation Committee
_________________________________
<PAGE>
NOTE
April 29, 1993 $150,000.00
Stamford, Connecticut
BORROWER'S PROMISE TO PAY
1. In return for a loan that the undersigned has received, the undersigned,
hereinafter referred to as the "Borrower", promises to pay One Hundred Fifty
Thousand ($150,000.00) Dollars, (this amount to be called "principal"),
to the order of American Maize-Products Company, the Lender. I understand that
the Lender may transfer this Note. The Lender or anyone who takes this note
by transfer and who is entitled to receive payments under this Note will be
called the "Note Holder".
INTEREST
2. Interest will be charged on unpaid principal until the full amount of
principal has been paid. I will pay interest at a yearly rate of 5.24%. The
interest rate I will pay will not change during the term of this Note.
PAYMENTS
3. (A) I will pay principal and interest by making payments each year.
I will make three (3) equal annual payments of principal together with
interest due on the outstanding principal balance on the anniversary date of
this Note beginning on April 29, 1994. I will make these payments every
year until I have paid all of the principal and interest that I may owe under
this Note. My annual payments will be applied to interest before principal.
If on April 29, 1996 I still owe amounts under this Note, I will pay those
amounts in full on that date, which is called the "maturity date". I will
make my payments at 250 Harbor Drive, Stamford, Connecticut 06902 or at a
different place if required by the Note Holder.
(B) My initial annual payment, due on April 29, 1994, will be in the
amount of $57,860.
BORROWER'S FAILURE TO PAY AS REQUIRED
4. (A) Late charge for Overdue Payments
If the Note Holder has not received the full amount of any of
Borrower's annual payments by the end of ten (10) calendar days after the
date it is due, Borrower will pay a late charge to the Note Holder. The
amount of charge will be four (4%) percent of Borrower's overdue payment.
(B) Notice from Note Holder
If Borrower does not pay the full amount of each annual payment on
time, the Note Holder may send notice telling Borrower that if it does not
pay the overdue amount by a certain date, Borrower will be in default. That
date must be at least 15 days after the date on which the notice is mailed
to Borrower, if notice is not mailed, 15 days after the date on which it is
delivered to the Borrower.
(C) Default
If Borrower does not pay the overdue amount by the date stated in the
notice described in (B) above, Borrower will be in default. If Borrower is
in default, the Note Holder may require Borrower to pay immediately the full
amount of principal which has not been paid and all the interest that Borrower
owes on that amount.
Even if, at a time when Borrower is in default, the Note Holder does not
require Borrower to pay immediately in full as described above, the Note
Holder will still have the right to do so if Borrower is in default at a
later time.
(D) PAYMENT OF NOTE HOLDER'S COSTS AND EXPENSES
If the Note Holder has required Borrower to pay immediately in full as
described above, the Note Holder will have the right to be paid back
for all of its costs and expenses to the extent not prohibited by applicable
law. Those expenses include, for example, reasonable attorney's fees.
THIS NOTE SECURED BY A MORTGAGE
5. In addition to the protections given to the Note Holder under this
Note, a Mortgage, dated June 17, 1993 protects the Note Holder from possible
losses which might result if Borrower does not keep the promises which
Borrower made in this Note. That Mortgage describes how and under what
conditions Borrower may be required to make immediate payment in full of all
amounts that Borrower owes under this Note.
BORROWER'S PAYMENTS BEFORE THEY ARE DUE
6. The Borrower has the right to make payments of principal at any time
before they are due. A payment of principal only is known as a "prepayment".
When Borrower makes a prepayment, Borrower will tell the Note Holder in a letter
that Borrower is doing so. A prepayment of all of the unpaid principal is
known as "full prepayment". A prepayment of only part of the unpaid principal
is known as "partial prepayment".
Borrower may make a full prepayment or a partial prepayment without
paying any penalty. The Note Holder will use all of Borrower's prepayments
to reduce the amount of principal that Borrower owes under this Note.
Borrower may make a full prepayment at any time. If Borrower chooses to make
a partial prepayment, the Note Holder may require Borrower to make the
prepayment on the same day that one of Borrower's annual payments is due.
At the time any prepayment is made the Borrower shall pay all interest
which has accrued on the principal to the date of any such prepayment.
BORROWER'S WAIVERS
7. Borrower waives its rights to require the Note Holder to do certain
things. Those things are: (A) to demand payment of amounts due (known as
"presentment"); (B) to give notice that amounts due have not been paid (known
an "dishonor")' (C) to obtain an official certification of nonpayment (known
as a "protest").
GIVING OF NOTICES
8. Any notice that must be given to Borrower under this Note will be
given by delivering it or by mailing it by certified mail addressed to
Borrower at [Home Address]. A notice will be
delivered or mailed to Borrower at a different address if Borrower gives the
Note Holder a notice of new mailing address.
Any notice that must be given to the Note Holder under this Note will be
given or mailed by mailing it by certified mail to the Note Holder at the
address stated in Section 3 above. A notice will be mailed to the Note Holder
at a different address if Borrower is given a notice of that different
address.
BORROWER'S ACKNOWLEDGEMENTS AND REPRESENTATIONS
9. The Borrower, as an employee of the Lender, acknowledges and
represents the following: (a) This loan is a term loan, the benefits of the
interest arrangements of which are not transferrable by the Borrower, as an
employee of the Lender, and are conditioned on the future performance of
substantial services by the Borrower as said employee; (b) the Borrower
certifies to the Lender that the Borrower reasonably expects to be entitled
to and will itemize deductions for each year this loan is outstanding; and
(c) the proceeds of the loan shall be used by the Borrower only to purchase
the new principal residence of the Borrower.
PROPERTY SECURING THIS NOTE
10. This Note will be secured by a Mortgage on property located at
[Home Address].
/s/ Patric J. McLaughlin
PATRIC J. MCLAUGHLIN
<PAGE>
Exhibit 11.(a)
AMERICAN MAIZE-PRODUCTS COMPANY AND ITS SUBSIDIARIES
CALCULATION OF PRIMARY EARNINGS PER SHARE
For the years ended December 31, 1993, 1992 and 1991
<TABLE>
<CAPTION>
ITEM 1993 1992 1991
<S> <C> <C> <C>
Weighted average number of common shares
outstanding . . . . . . . . . . . . . . . . . 9,634,622 6,442,065 6,415,032
Income from continuing operations. . . . . . . $ 214,000 $ 9,995,000 $12,805,000
Loss on disposal of discontinued operation,
net of tax . . . . . . . . . . . . . . . . . - - (1,518,000)
Extraordinary losses from early
extinguishment of debt. . . . . . . . . . . . (4,182,000) - -
Cumulative effect of change in accounting
for postretirement benefits other than
pensions and other postemployment
benefits. . . . . . . . . . . . . . . . . . . (27,200,000) - -
Cumulative effect of change in accounting
for income taxes. . . . . . . . . . . . . . . - 3,016,000 -
Net income (loss) . . . . . . . . . . . . . $(31,168,000) $13,011,000 $11,287,000
Primary earnings per share:
Income from continuing operations . . . . . . $ .02 $1.55 $2.00
Loss on disposal of discontinued operation. . - - (.24)
Extraordinary losses from early
extinguishment of debt . . . . . . . . . . . (.43) - -
Cumulative effect of change in accounting
for postretirement benefits other than
pensions and other postemployment
benefits . . . . . . . . . . . . . . . . . . (2.82) - -
Cumulative effect of change in accounting
for income taxes . . . . . . . . . . . . . . - .47 -
Net income (loss) . . . . . . . . . . . . . $(3.23) $2.02 $1.76
/TABLE
<PAGE>
Exhibit 11.(b)
AMERICAN MAIZE-PRODUCTS COMPANY AND ITS SUBSIDIARIES
CALCULATION OF FULLY-DILUTED EARNINGS PER SHARE
For the years ended December 31, 1993, 1992 and 1991
<TABLE>
<CAPTION>
ITEM 1993 1992 1991
<S> <C> <C> <C>
Weighted average number of common shares
outstanding . . . . . . . . . . . . . . . . . 9,634,622 6,442,065 6,415,032
Assumed exercise of certain options. . . . . . 19,134 24,835 24,345
9,653,756 6,466,900 6,439,377
Income from continuing operations . . . . . . $ 214,000 $ 9,995,000 $12,805,000
Loss on disposal of discontinued operation,
net of tax . . . . . . . . . . . . . . . . . - - (1,518,000)
Extraordinary losses from early
extinguishment of debt. . . . . . . . . . . . (4,182,000) - -
Cumulative effect of change in accounting
for postretirement benefits other than
pensions and other postemployment
benefits. . . . . . . . . . . . . . . . . . . (27,200,000) - -
Cumulative effect of change in accounting
for income taxes. . . . . . . . . . . . . . . - 3,016,000 -
Net income (loss) . . . . . . . . . . . . . $(31,168,000) $13,011,000 $11,287,000
Fully-diluted earnings per share:
Income from continuing operations . . . . . . $ .02 $1.54 $1.99
Loss on disposal of discontinued operation. . - - (.24)
Extraordinary losses from early
extinguishment of debt . . . . . . . . . . . (.43) - -
Cumulative effect of change in accounting
for postretirement benefits other than
pensions and other postemployment
benefits . . . . . . . . . . . . . . . . . . (2.82) - -
Cumulative effect of change in accounting
for income taxes . . . . . . . . . . . . . . - .47 -
Net income (loss) . . . . . . . . . . . . . $(3.23) $2.01 $1.75
</TABLE>
<PAGE>
SECURITITES AND EXCHANGE COMMISSION
Washington, D.C. 20549
__________
FORM 10-K
ANNUAL REPORT
__________
CONSOLIDATED FINANCIAL STATEMENTS AND SCHEDULES
for the years ended December 31, 1993, 1992 and 1991
__________
AMERICAN MAIZE-PRODUCTS COMPANY
__________
<PAGE>
Exhibit 13.
AMERICAN MAIZE-PRODUCTS COMPANY AND ITS SUBSIDIARIES
1993 Annual Report to Security Holders
Index to Items Incorporated by Reference to the Company's 1993
Annual Report to Security Holders
Reference(Page)
Annual Report
to
Exhibit 13 Security Holders
ITEM 5 -Market for Company's Common Equity
and Related Stockholder Matters:
(a) Market Information. 13-1 21
(b) Holders. 13-1 21
(c) Dividends.
(i) 13-2 20
(ii) 13-13 27
ITEM 6 -Selected Financial Data 13-2 20
ITEM 7 -Management's Discussion and Analysis of
Financial Condition and Results of
Operations 13-3 15
through through
13-6 19
ITEM 8 -Financial Statements and Supplementary
Data:
Report of Independent Accountants 13-7 21
Consolidated balance sheets for the
years ended December 31, 1993 and
1992 13-8 22
Consolidated statements of operations
and retained earnings for the years
ended December 31, 1993, 1992 and
1991 13-9 23
Consolidated statements of cash flows
for the years ended December 31,
1993, 1992 and 1991 13-10 24
Notes to consolidated financial
statements 13-11 25
through through
13-22 36
<PAGE>
ITEM 5 - MARKET FOR COMPANY'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
AMERICAN MAIZE-PRODUCTS COMPANY AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)
(Dollars in thousands, except per share amounts)
The common stock of American Maize-Products Company is traded on the
American Stock Exchange. The quarterly range of prices and dividends
per share during the last two years was as follows:
<TABLE>
<CAPTION>
Market Price Per Share
Class A Class B
Dividends
High Low High Low per Share
<S> <C> <C> <C> <C> <C>
1993
First Quarter . . . . . . . . . . . . . . . . $23 1/2 $21 5/8 $24 3/8 $22 3/4 $ .16
Second Quarter. . . . . . . . . . . . . . . . 22 5/8 16 5/8 22 3/4 18 .16
Third Quarter . . . . . . . . . . . . . . . . 19 14 3/8 18 1/2 15 7/8 .16
Fourth Quarter. . . . . . . . . . . . . . . . 16 7/8 15 1/4 16 3/4 14 7/8 .16
Total . . . . . . . . . . . . . . . . . . $ .64
1992
First Quarter . . . . . . . . . . . . . . . . $25 3/4 $20 1/4 $25 1/2 $20 $ .16
Second Quarter. . . . . . . . . . . . . . . . 24 20 23 3/8 21 1/2 .16
Third Quarter . . . . . . . . . . . . . . . . 25 1/2 20 5/8 25 3/8 21 1/2 .16
Fourth Quarter. . . . . . . . . . . . . . . . 25 5/8 21 25 5/8 22 3/4 .16
Total . . . . . . . . . . . . . . . . . . $ .64
</TABLE>
The approximate number of security holders of record at December 31,
1993 was 1,064 for Class A Common Stock and 433 for Class B Common Stock.
<PAGE>
ITEM 6 - SELECTED FINANCIAL DATA
AMERICAN MAIZE-PRODUCTS COMPANY AND ITS SUBSIDIARIES
Five-Year Summary of Selected Financial Data
(Dollars in thousands, except per share amounts)
<TABLE>
<CAPTION>
For the years ended December 31,
1993 1992 1991 1990 1989
<S> <C> <C> <C> <C> <C>
Summary of Operations
Net sales . . . . . . . . . . . . . . . . . . . . . . . $ 538,534 $ 542,172 $ 533,565 $ 501,498 $ 504,752
Operating profit. . . . . . . . . . . . . . . . . . . . $ 15,549 $ 44,329 $ 56,983 $ 60,126 $ 57,030
Gain on exchange of debentures . . . . . . . . . . . . $ - $ - $ - $ - $ 535
Income from continuing operations before income
taxes, minority interest, extraordinary losses and
cumulative effect of accounting changes. . . . . . . $ 1,036 $ 32,892 $ 39,595 $ 48,739 $ 42,764
Income taxes . . . . . . . . . . . . . . . . . . . . . (1,151) (12,901) (15,294) (18,922) (19,257)
Income (loss) before minority interest, extraordinary
losses and cumulative effect of accounting changes. . (115) 19,991 24,301 29,817 23,507
Minority interest in loss (earnings) of subsidiary. . . 329 (9,996) (11,496) (13,657) (10,711)
Income from continuing operations . . . . . . . . . . . 214 9,995 12,805 16,160 12,796
Discontinued operation:
Loss from operations, net of tax . . . . . . . . . . . - - - - (6,396)
Loss on disposal, net of tax . . . . . . . . . . . . . - - (1,518) (2,640) (9,240)
Total . . . . . . . . . . . . . . . . . . . . . . . - - (1,518) (2,640) (15,636)
Income (loss) before extraordinary losses and
cumulative effect of accounting changes . . . . . . . 214 9,995 11,287 13,520 (2,840)
Extraordinary losses from early extinguishment
of debt . . . . . . . . . . . . . . . . . . . . . . . (4,182) - - - -
Cumulative effect of accounting changes (1) . . . . . . (27,200) 3,016 - - -
Net income (loss) . . . . . . . . . . . . . . . $ (31,168) $ 13,011 $ 11,287 $ 13,520 $ (2,840)
Cash dividends . . . . . . . . . . . . . . . . . . . . $ 5,935 $ 4,124 $ 4,107 $ 4,252 $ 3,449
Depreciation and amortization . . . . . . . . . . . . . 32,083 26,434 26,343 24,177 21,785
Capital expenditures . . . . . . . . . . . . . . . . . 43,633 32,266 19,428 32,431 50,603
Financial Position
Cash and cash equivalents . . . . . . . . . . . . . . . $ 3,625 $ 72,085 $ 49,050 $ 32,666 $ 36,201
Working capital . . . . . . . . . . . . . . . . . . . . 102,246 156,306 140,603 63,743 69,344
Current ratio . . . . . . . . . . . . . . . . . . . . . 2.99:1 4.04:1 3.93:1 1.65:1 1.71:1
Total assets . . . . . . . . . . . . . . . . . . . . . 492,058 484,003 459,639 433,222 426,985
Long-term debt, less current installments . . . . . . . 139,294 136,227 127,542 70,530 72,738
Stockholders' equity . . . . . . . . . . . . . . . . . 215,666 168,240 158,665 151,066 146,431
Per Common Share
Primary earnings (loss) per share (2):
Continuing operations . . . . . . . . . . . . . . . $ .02 $ 1.55 $ 2.00 $ 2.44 $ 1.93
Discontinued operation . . . . . . . . . . . . . . . - - (.24) (.40) (2.36)
Extraordinary losses from early extinguishment
of debt. . . . . . . . . . . . . . . . . . . . . . (.43) - - - -
Cumulative effect of accounting changes (1). . . . . (2.82) .47 - - -
Net income (loss) . . . . . . . . . . . . . . . $ (3.23) $ 2.02 $ 1.76 $ 2.04 $ (.43)
Cash dividends . . . . . . . . . . . . . . . . . . . . $ .64 $ .64 $ .64 $ .64 $ .52
Stockholders' equity (3) . . . . . . . . . . . . . . . $ 21.09 $ 26.05 $ 24.70 $ 23.60 $ 21.96
General
Common Shares outstanding (4) . . . . . . . . . . . . 10,223,970 6,458,196 6,423,892 6,401,871 6,668,796
Number of employees (4) . . . . . . . . . . . . . . . 1,986 2,154 2,009 2,158 2,087
Return on average common stockholders' equity. . . . . - 8.0% 7.3% 9.1% -
<FN>
(1) Reflects adoption of Financial Accounting Standards No. 106, "Employers' Accounting
for Postretirement Benefits Other Than Pensions" and No. 112, "Employers' Accounting
for Postemployment Benefits" in 1993 and No. 109, "Accounting for Income Taxes" in 1992.
(2) Based on weighted average number of shares outstanding during the year.
(3) Based on shares outstanding at the end of year.
(4) As of the end of the year.
</TABLE>
<PAGE>
ITEM 7 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Highlights
Merger - During the first quarter of the year the Company
completed a merger with American Fructose Corporation. Prior
to the merger the Company owned 3,901,851 shares of American
Fructose Corporation and 5,109,673 shares were publicly held.
American Fructose has been included in the Company's
consolidated financial statements since its formation in 1983
because the Company has always maintained effective voting
control. Under the terms of the merger, 1,371,190 American
Fructose shares were exchanged for cash at $22.475 per share,
or a total of $30,817,000. The remaining 3,738,483 shares
were exchanged for a like number of the Company's Class A
Common Stock. After the merger there were 8,458,178 shares
of the Company's Class A Common Stock and 1,742,057 shares of
Class B Common Stock outstanding.
Refinancing - Just prior to the merger the Company's debt
rating was raised to investment grade by the major rating
agencies. The Company used this opportunity to issue
$125,000,000 in 7.875% senior notes, with a final maturity in
March 2003. During the course of the year the Company called
for redemption two high-yield debt securities; its 12% senior
subordinated debentures, effective rate of 12.50% and its
9.40% subordinated debentures, effective rate of 13.29%.
Aggregate cash used to complete the redemptions was
$72,862,000.
Restructuring - Charges totaling $12,323,000 ($7,720,000
after tax, or $.80 per share) were recorded during the year.
The charges principally reflect the costs of consolidation
and modernization programs in the Company's business units,
divestiture of nonperforming assets and organizational
changes.
Expansion and Modernization - In October the Board of
Directors approved a program to modernize and expand the
Hammond, Indiana, corn wet milling plant. This program is
currently under way and is expected to be completed by mid-
1996 at a cost of approximately $160,000,000. The program
calls for the construction of a new corn syrup refinery and
significant improvements to the primary infrastructure of the
plant; including corn receiving and storage, the grind mill
and waste water treatment facilities. As part of the
program, grind capacity will be increased by 30% and corn
syrup capacity by 50%.
Operating Results
Consolidated - Operating profit declined to $15,549,000 in
1993 from $44,329,000 in 1992. The sharp decline was due in
large part to several accounting charges taken in 1993, the
most significant of which were:
- Restructuring charges of $12,323,000 (Similar charges
of $3,593,000 were recorded in 1992).
- Additional expense of approximately $4,000,000 was
recorded for retiree health care costs related
primarily to the adoption of FAS No. 106.
- An increase of $4,245,000 in cost of sales due to the
effect of significantly higher year-end corn prices
on LIFO inventory valuations.
- Additional depreciation and amortization of
$3,925,000 related to the merger with American
Fructose Corporation.
Corn Business - Net sales declined to $380,315,000 in 1993
from $391,513,000 in 1992 and $387,622,000 in 1991.
Operating profits declined to $19,958,000 in 1993 from
$37,995,000 in 1992 and $47,538,000 in 1991. The $18,037,000
decline in operating profit between 1992 and 1993 was due in
part to the accounting charges discussed above, namely the
$4,245,000 increase in cost of sales due to LIFO inventory
valuations, the $3,925,000 in additional depreciation and
amortization related to the merger with American Fructose
Corporation and $2,678,000 of the additional retiree health
care expense. The remainder of the decline in profitability
was due to lower unit selling prices for corn sweeteners and
higher manufacturing costs, particularly for energy.
The decrease in operating profits between 1991 and 1992 was
due primarily to lower selling prices for high fructose corn
syrup and higher corn costs. Higher manufacturing costs and
the impact of the December 1992 power outage at the Hammond
plant also contributed to the decline.
Tobacco Business - Net sales increased to $158,219,000 in
1993 from $150,659,000 in 1992 and $145,943,000 in 1991.
Operating profits declined to $13,846,000 in 1993 from
$14,818,000 in 1992 and $18,927,000 in 1991. Operating
results in 1993 and 1992 include restructuring charges of
$5,200,000 and $3,593,000, respectively. The $5,200,000
charge in 1993 reflects the write-down of the Helmetta, New
Jersey plant. Prior to the restructuring charges, operating
profits increased from $18,411,000 in 1992 to $19,046,000 in
1993. The 1993 results include $1,062,000 in expense related
to accounting for retiree health care costs. The higher
sales and operating profits in 1993 were principally due to
increased unit sales volumes and prices for little cigars and
moist snuff, which more than offset unit sales declines in
other categories and higher selling, general and
administrative expense.
Operating profits in 1992, before restructuring charges of
$3,593,000, were $18,411,000 compared to $18,927,000 in 1991.
The decrease in 1992 was principally due to higher selling,
general and administrative expenses.
Other Income and Expense
Interest Expense - Interest expense was $13,960,000 in 1993
compared to $12,698,000 in 1992 and $14,853,000 in 1991. The
primary reason for the increase in 1993 was higher average
interest rates and debt levels following the issuance of
$125,000,000 in 7.875% senior notes in March of 1993. The
decrease between 1991 and 1992 was due to lower rates.
Interest Income - The decrease in interest income between
1992 and 1993 was due principally to significantly lower
levels of investments and also to lower available rates. The
decrease between 1991 and 1992 was due primarily to
substantially lower available rates.
Income Taxes
Merger Effect - Prior to the merger of the Company with
American Fructose Corporation during the first quarter of
1993, each entity was required to file separate federal
income tax returns. As a result of the merger the Company
will commence filing a consolidated federal income tax return
starting with the year ended December 31, 1993. American
Fructose Corporation filed a final federal return for the
period from January 1, 1993, to February 26, 1993.
Loss Carryforwards - As of December 31, 1992, the Company had
available, for federal income tax purposes, regular tax
operating loss carryforwards of $16,432,000 and investment
tax credit carryforwards of $2,841,000. During 1993, regular
tax operating loss carryforwards of $13,739,000 and
$1,321,000 of investment tax credit carryforwards were
utilized, leaving carryforward balances of $2,693,000 and
$1,520,000, respectively.
Benefit Plans
Pension and Savings Plans - The Company has defined benefit
pension plans which cover substantially all employees. As of
December 31, 1993, plan assets exceeded projected benefit
obligations by $8,411,000. Operating results for the years
1993, 1992 and 1991 include negative expense, or noncash
income, associated with these overfunded plans of $1,512,000,
$2,483,000 and $587,000, respectively.
In addition to the defined benefit plans the Company also
provides benefits under a supplemental executive retirement
plan and a directors retirement plan. Both of these plans
are currently unfunded. Operating results for 1993, 1992 and
1991 include charges of $1,158,000, $1,061,000 and
$1,121,000, respectively, associated with these plans.
The Company also sponsors a 401(k) savings plan to provide
employees with additional income upon retirement.
Contribution expense was $1,482,000 in 1993, $1,383,000 in
1992 and $1,284,000 in 1991.
Other Postretirement Benefits - Effective January 1, 1993,
the Company adopted Statement of Financial Accounting
Standards No. 106, "Employers' Accounting for Postretirement
Benefits Other Than Pensions." The accounting standard
requires employers to recognize in their financial
statements, during their employees active service, the
obligation to provide health care benefits for retirees and
their beneficiaries. Previously, employers generally
accounted for these benefits as paid. The Company also
adopted, effective January 1, 1993, Statement of Financial
Accounting Standards No. 112, "Employers' Accounting for
Postemployment Benefits." This standard requires that the
estimated cost of benefits to former employees after
employment but before retirement be recorded on an accrual
basis.
The Company adopted both of these statements during the first
quarter of 1993. A one time noncash charge of $48,500,000
($27,200,000 net of tax, or $2.82 per share) was recorded to
recognize the cumulative effect of these accounting changes
through January 1, 1993. Under the newly adopted standards,
1993 operating results were charged $5,300,000 compared to
approximately $1,300,000 charged in 1992 under the previous
accounting method.
Liquidity and Capital Resources
Merger - Prior to completing the merger with American
Fructose Corporation on February 26, 1993 the accumulated
cash balances and cash flows of American Fructose were only
available to the Company in the form of dividends received.
As of December 31, 1992, consolidated cash and cash
equivalents was $72,085,000 of which $71,500,000 was American
Fructose's. Consolidated cash flow from operations in 1992
was $47,250,000 of which $32,378,000 was attributable to
American Fructose. Cash dividends received from American
Fructose in 1992 were $1,873,000. One of the significant
benefits to the Company from the merger is unrestricted
access to all current and future cash flows of American
Fructose.
Capital Structure - In conjunction with the merger, the
Company's capital structure was significantly revamped. The
Company redeemed 1,371,190 shares of American Fructose for
$22.475 per share in cash, or $30,817,000, and exchanged
3,738,483 shares of its Class A Common Stock for the
remaining American Fructose shares on a one-for-one basis at
$22.475, increasing stockholders equity by $84,022,000.
Immediately after the merger the Company used available cash
and part of the proceeds from $125,000,000 in newly issued
7.875% senior notes to repay $73,000,000 in bank borrowings.
In April the Company redeemed its 12% senior subordinated
debentures and in December its 9.40% subordinated
debentures. Aggregate cash used to complete the redemptions
was $72,862,000.
Cash Flow - Consolidated operating cash flow was $19,157,000
in 1993 compared to $47,250,000 in 1992. Part of the
$28,093,000 year-to-year decline was attributable to higher
levels of accounts receivable and inventories which increased
$14,703,000. Most of the increase was attributable to higher
year end 1993 corn prices. The remainder of the decrease was
primarily due to lower levels of operating profits in the
corn business caused by lower year-to-year selling prices for
corn sweeteners.
Capital Spending - Consolidated capital spending was
$43,633,000 in 1993 compared to $32,266,000 in 1992 and
$19,428,000 in 1991. Of the total spending in 1993,
$39,125,000 was attributable to projects in the corn
business, including the expansion of finishing capacity for
specialty products and cyclodextrins at the Hammond plant.
Capital spending in 1994 is expected to approximate
$90,000,000, most of which will be related to the expansion
and modernization of the Hammond plant. The 1994 capital
program will be financed by available cash resources, cash
flow from operations and available credit resources, as
needed.
Credit Resources - Currently, the Company has available
$75,000,000 under a revolving credit facility which expires
on June 30, 1995, and open lines of credit with banks
aggregating $10,000,000. At December 31, 1993, borrowings
under these facilities were $12,600,000 and $5,000,000,
respectively.
The Company is in the process of replacing its current
revolving credit facility with a new $125,000,000 revolving
credit facility. The new facility will have a five-year term
and is expected to be in place by the end of the first
quarter of 1994.
Inflation - The impact of general inflation on both the
Company's financial position and results of operations has
been minimal and is not expected to adversely affect 1994
results.
<PAGE>
ITEM 8 - FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and Stockholders,
American Maize-Products Company:
We have audited the accompanying consolidated balance
sheets of American Maize-Products Company and its
Subsidiaries as of December 31, 1993 and 1992, and the
related consolidated statements of operations and
retained earnings and consolidated statements of cash
flows for each of the years in the three year period
ended December 31, 1993. These financial statements
are the responsibility of the Company's management.
Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally
accepted auditing standards. Those standards require
that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are
free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements.
An audit also includes assessing the accounting
principles used and significant estimates made by
management, as well as evaluating the overall financial
statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to
above present fairly, in all material respects, the
consolidated financial position of American Maize-
Products Company and its Subsidiaries as of December
31, 1993 and 1992, and the consolidated results of
their operations and their cash flows for each of the
three years in the period ended December 31, 1993 in
conformity with generally accepted accounting
principles.
As discussed in Notes 7 and 8 to the consolidated
financial statements, effective January 1, 1993, the
Company changed its methods of accounting for
postretirement benefits other than pensions, and
postemployment benefits. As discussed in Note 5,
effective January 1, 1992, the Company changed its
method of accounting for income taxes.
Coopers & Lybrand
One Canterbury Green
Stamford, Connecticut
February 22, 1994.
<PAGE>
AMERICAN MAIZE-PRODUCTS COMPANY AND ITS SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
At December 31, 1993 and 1992
(Dollars in thousands, except per share amounts)
<TABLE>
<CAPTION>
ASSETS
1993 1992
<S> <C> <C>
Current assets:
Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . $ 3,625 $ 72,085
Accounts receivable, trade, less allowance
for doubtful accounts of $3,609 in 1993 and $2,109 in 1992 . . . 53,529 45,802
Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . 87,553 80,577
Other current assets . . . . . . . . . . . . . . . . . . . . . . 8,934 9,261
Total current assets . . . . . . . . . . . . . . . . . . . . . 153,641 207,725
Property, plant and equipment
Land . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,004 3,060
Buildings and improvements . . . . . . . . . . . . . . . . . . . 72,757 64,069
Machinery and equipment . . . . . . . . . . . . . . . . . . . . . 381,382 359,254
Construction in progress . . . . . . . . . . . . . . . . . . . . 10,874 19,207
468,017 445,590
Less, Accumulated depreciation . . . . . . . . . . . . . . . . 180,593 210,769
287,424 234,821
Excess of cost over net assets of acquired companies, less
accumulated amortization of $3,504 in 1993 and $2,697 in 1992 . . 23,284 14,381
Prepaid pension costs . . . . . . . . . . . . . . . . . . . . . . . 14,732 12,778
Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . 12,977 14,298
$492,058 $484,003
</TABLE>
<TABLE>
<CAPTION>
LIABILITIES AND STOCKHOLDERS' EQUITY
<S> <C> <C>
Current liabilities:
Short-term debt . . . . . . . . . . . . . . . . . . . . . . . . . $ 5,000 $ 9,200
Long-term debt, current installments . . . . . . . . . . . . . . 885 4,580
Accounts payable, trade . . . . . . . . . . . . . . . . . . . . . 16,278 10,283
Accrued payroll and employee benefits . . . . . . . . . . . . . . 12,709 12,611
Accrued income taxes . . . . . . . . . . . . . . . . . . . . . . 4,837 4,892
Accrued interest . . . . . . . . . . . . . . . . . . . . . . . . 3,304 408
Other accrued expenses . . . . . . . . . . . . . . . . . . . . . 8,382 9,445
Total current liabilities . . . . . . . . . . . . . . . . . . . 51,395 51,419
Long-term debt, less current installments . . . . . . . . . . . . . 139,294 136,227
Deferred income taxes . . . . . . . . . . . . . . . . . . . . . . . 30,775 37,931
Accrued postretirement and postemployment benefits. . . . . . . . . 50,027 -
Other liabilities . . . . . . . . . . . . . . . . . . . . . . . . . 4,901 4,782
Commitments and contingencies (Note 12)
Minority interest . . . . . . . . . . . . . . . . . . . . . . . . . - 85,404
276,392 315,763
Stockholders' equity:
Capital stock:
Common, Class A, $.80 par value; authorized 15,000,000 shares
in 1993 and 8,750,000 shares in 1992; issued 8,848,903 shares
in 1993 and 5,110,420 shares in 1992 . . . . . . . . . . . . . 7,079 4,088
Common, Class B, $.80 par value; authorized 2,500,000 shares;
issued 1,809,282 shares in 1993 and 1992 . . . . . . . . . . . 1,447 1,447
Capital in excess of par value of common stock . . . . . . . . . 123,836 42,543
Retained earnings . . . . . . . . . . . . . . . . . . . . . . . . 90,221 127,324
222,583 175,402
Less, Common stock in treasury, at cost:
Class A, 366,990 shares in 1993 and 394,281 shares in 1992;
Class B, 67,225 shares in 1993 and 1992 . . . . . . . . . . . . 6,917 7,162
Total stockholders' equity . . . . . . . . . . . . . . . . . . 215,666 168,240
$492,058 $484,003
</TABLE>
The accompanying notes are an integral part of the consolidated
financial statements.
<PAGE>
AMERICAN MAIZE-PRODUCTS COMPANY AND ITS SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS AND RETAINED EARNINGS
For the years ended December 31, 1993, 1992 and 1991
(Dollars in thousands, except per share amounts)
<TABLE>
<CAPTION>
1993 1992 1991
<S> <C> <C> <C>
Net sales . . . . . . . . . . . . . . . . . . . . . . . . . $ 538,534 $ 542,172 $ 533,565
Cost of sales . . . . . . . . . . . . . . . . . . . . . . . 417,215 410,156 395,747
Gross profit . . . . . . . . . . . . . . . . . . . . . . 121,319 132,016 137,818
Selling, administrative & general expenses . . . . . . . . 93,447 84,094 80,835
Restructuring charges . . . . . . . . . . . . . . . . . . . 12,323 3,593 -
Operating profit . . . . . . . . . . . . . . . . . . . . 15,549 44,329 56,983
Other income (expenses):
Interest expense . . . . . . . . . . . . . . . . . . . . (13,960) (12,698) (14,853)
Interest income . . . . . . . . . . . . . . . . . . . . . 809 2,288 2,685
Other, net . . . . . . . . . . . . . . . . . . . . . . . (1,362) (1,027) (1,058)
Nonrecurring charge . . . . . . . . . . . . . . . . . . . - - (4,162)
(14,513) (11,437) (17,388)
Income from continuing operations before income taxes,
minority interest, extraordinary losses and cumulative
effect of accounting changes . . . . . . . . . . . . . . . 1,036 32,892 39,595
Income taxes:
Current:
Federal . . . . . . . . . . . . . . . . . . . . . . . . (4,031) (12,342) (12,388)
State and local . . . . . . . . . . . . . . . . . . . . (1,290) (2,236) (1,936)
Deferred . . . . . . . . . . . . . . . . . . . . . . . . 4,170 1,677 (970)
(1,151) (12,901) (15,294)
Income (loss) from continuing operations before minority
interest, extraordinary losses and cumulative effect
of accounting changes . . . . . . . . . . . . . . . . . . (115) 19,991 24,301
Minority interest in loss (earnings) of subsidiary. . . . . 329 (9,996) (11,496)
Income from continuing operations . . . . . . . . . . . . . 214 9,995 12,805
Loss from discontinued operation . . . . . . . . . . . . . - - (1,518)
Income before extraordinary losses and cumulative effect
of accounting changes . . . . . . . . . . . . . . . . . . 214 9,995 11,287
Extraordinary losses from early extinguishment of debt. . . (4,182) - -
Cumulative effect of change in accounting for post-
retirement benefits other than pensions and other
post-employment benefits . . . . . . . . . . . . . . . . (27,200) - -
Cumulative effect of change in accounting for income
taxes . . . . . . . . . . . . . . . . . . . . . . . . . . - 3,016 -
Net income (loss) . . . . . . . . . . . . . . . . . . . . . (31,168) 13,011 11,287
Retained earnings, beginning of year. . . . . . . . . . . . 127,324 118,437 111,257
Less: Cash dividends paid ($.64 per share in 1993, 1992
and 1991). . . . . . . . . . . . . . . . . . . . . . 5,935 4,124 4,107
Retained earnings, end of year. . . . . . . . . . . . . . . $ 90,221 $ 127,324 $ 118,437
Earnings (loss) per share of common stock:
Continuing operations before cumulative effect of
accounting changes . . . . . . . . . . . . . . . . . . $ .02 $ 1.55 $ 2.00
Discontinued operation . . . . . . . . . . . . . . . . - - (.24)
Extraordinary losses from early extinguishment of debt. (.43) - -
Cumulative effect of change in accounting for post-
retirement benefits other than pensions and other
postemployment benefits. . . . . . . . . . . . . . . . (2.82) - -
Cumulative effect of change in accounting for
income taxes . . . . . . . . . . . . . . . . . . . . . - .47 -
Net income (loss) . . . . . . . . . . . . . . . . . . . $ (3.23) $ 2.02 $ 1.76
Weighted average number of common shares outstanding. . . . 9,634,622 6,442,065 6,415,032
</TABLE>
The accompanying notes are an integral part of the consolidated
financial statements.
<PAGE>
AMERICAN MAIZE-PRODUCTS COMPANY AND ITS SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the years ended December 31, 1993, 1992 and 1991
(Dollars in thousands)
<TABLE>
<CAPTION>
1993 1992 1991
<S> <C> <C> <C>
Cash flows from operating activities:
Net income (loss) . . . . . . . . . . . . . . . . . . . . . . . $(31,168) $ 13,011 $ 11,287
Adjustments to reconcile net income (loss) to net cash
provided by operating activities:
Depreciation and amortization. . . . . . . . . . . . . . . . 32,083 26,434 26,343
Amortization of original issue discount on subordinated
debentures . . . . . . . . . . . . . . . . . . . . . . . . 229 459 404
Loss from discontinued operation . . . . . . . . . . . . . . - - 1,518
Deferred income taxes . . . . . . . . . . . . . . . . . . . (4,170) (1,677) 970
Extraordinary losses from early extinguishment of debt . . . 4,182 - -
Cumulative effect of accounting changes. . . . . . . . . . . 27,200 (3,016) -
Restructuring charges. . . . . . . . . . . . . . . . . . . . 12,323 3,593 -
Minority interest in (loss) earnings of subsidiary, net of
dividends . . . . . . . . . . . . . . . . . . . . . . . . . (941) 7,546 9,351
Loss on disposal of property, plant and equipment. . . . . . 1,506 3,081 1,664
Changes in assets and liabilities
Accounts receivable, trade, net. . . . . . . . . . . . . . (7,727) 1,783 (7,460)
Inventories. . . . . . . . . . . . . . . . . . . . . . . . (6,976) 1,552 (2,607)
Other current assets . . . . . . . . . . . . . . . . . . . 327 610 2,317
Prepaid pension cost . . . . . . . . . . . . . . . . . . . (1,954) (2,879) (2,658)
Accounts payable and accrued expenses. . . . . . . . . . . (2,517) (3,094) 7,342
Cash flows of discontinued operation . . . . . . . . . . . - (1,182) (5,893)
Other, net . . . . . . . . . . . . . . . . . . . . . . . . (3,240) 1,029 346
Net cash provided by operating activities . . . . . . . 19,157 47,250 42,924
Cash flows from investing activities:
Additions to property, plant and equipment . . . . . . . . . . (43,633) (32,266) (19,428)
Purchase of minority interest in subsidiary. . . . . . . . . . (32,992) - -
Proceeds from disposal of property, plant and equipment. . . . - 1,188 49
Net cash used in investing activities . . . . . . . . . (76,625) (31,078) (19,379)
Cash flows from financing activities:
Cash dividends paid. . . . . . . . . . . . . . . . . . . . . . (5,935) (4,124) (4,107)
Issuance of short-term debt. . . . . . . . . . . . . . . . . . 5,000 15,000 41,700
Payments of short-term debt. . . . . . . . . . . . . . . . . . (9,200) (15,800) (74,200)
Borrowings on long-term debt . . . . . . . . . . . . . . . . . 145,835 54,000 93,300
Payments of long-term debt . . . . . . . . . . . . . . . . . . (146,692) (42,086) (62,633)
Treasury stock acquired. . . . . . . . . . . . . . . . . . . . - (127) -
Repurchase by a subsidiary of its common stock . . . . . . . . - - (1,221)
Net cash provided by (used in) financing activities . . (10,992) 6,863 (7,161)
Net increase (decrease) in cash and cash equivalents. . . . . . (68,460) 23,035 16,384
Cash and cash equivalents, beginning of year. . . . . . . . . . 72,085 49,050 32,666
Cash and cash equivalents, end of year. . . . . . . . . . . . . $ 3,625 $ 72,085 $ 49,050
Supplemental Cash Flow Information
Cash paid during the year for:
Interest (net of amount capitalized) . . . . . . . . . . . . $ 10,268 $ 13,095 $ 15,040
Income taxes (net of refunds). . . . . . . . . . . . . . . . $ 4,391 $ 15,691 $ 12,307
</TABLE>
The accompanying notes are an integral part of the consolidated
financial statements.
<PAGE>
AMERICAN MAIZE-PRODUCTS COMPANY AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share amounts)
1. Summary of Significant Accounting Policies
Principles of Consolidation: The consolidated financial statements
include the accounts of American Maize-Products Company, its wholly
owned subsidiaries and American Fructose Corporation ("AFC") over which
the Company had effective voting control prior to February 26, 1993,
collectively referred herein as the "Company." On February 26, 1993,
AFC was merged with and into the Company (see Note 2).
By-Product Revenues: Certain by-products are produced from the Company's
corn processing operations. Revenues from by-products are included in
net sales and aggregated $71,903, $78,454, and $76,485 in 1993, 1992 and
1991, respectively.
Consolidated Statements of Cash Flows: For presentation purposes in the
Consolidated Statements of Cash Flows, all highly liquid short-term
investments, with maturities of three months or less, are considered
cash equivalents. Deposits made for hedging transactions are included
in inventory for cash flow reporting purposes.
Concentration of Credit Risk: Financial instruments which potentially
subject the Company to a concentration of credit risk principally
consist of cash, cash equivalents and trade receivables.
The Company sells its principal products to a large number of
customers in many different industries and geographies. As of December
31, 1993, approximately 10% (with 11 customers) of recorded trade
receivables were concentrated in the soft drink industry. To reduce
credit risk, the Company performs ongoing credit evaluations of its
customers' financial conditions but does not generally require
collateral.
The Company invests available cash in money market securities of
various banks, commercial paper of industrial and other companies with
high credit ratings and securities backed by the United States
government.
Inventories: Inventories are stated at the lower of cost or market. The
last-in, first-out (LIFO) method is predominantly used to determine the
cost of corn and tobacco content in inventory. The average cost and the
first-in, first-out (FIFO) methods are used to value the remaining
inventories.
Futures Contracts: The Company periodically enters into futures
contracts as hedges in its corn inventory purchasing program. Gains and
losses on hedge contracts are matched to specific inventory purchases
and charged or credited to cost of sales as such inventory is sold.
Property, Plant and Equipment: Property, plant and equipment is stated
at cost and includes expenditures for new facilities and those which
increase the useful lives of existing plant and equipment. Maintenance,
repairs and minor renewals are expensed as incurred. When property,
plant and equipment is sold or retired, the cost and accumulated
depreciation applicable to assets retired, are removed from the balance
sheet and any gain or loss on the transaction is included in income.
Plant and equipment is depreciated over its estimated useful life,
using the straight-line method. Depreciation is based on the following
useful lives: buildings and improvements, 3 to 45 years; machinery and
equipment, 3 to 20 years. Assets recorded under capital leases are
amortized over the lease term or, if title ultimately passes to the
Company, over their estimated useful lives. Accelerated depreciation
methods are used for tax purposes.
Excess of Purchase Cost Over Net Assets of Companies Acquired: The
excess of purchase cost over net assets of companies acquired prior to
November 1, 1970 ($208 at December 31, 1993) is not being amortized
since, in management's opinion, its value has not diminished. The
excess purchase cost relating to companies acquired after November 1,
1970 is being amortized over either 40 years or 20 years. At each
balance sheet date, management evaluates whether there has been a
permanent impairment in the value of goodwill by assessing the carrying
value of goodwill against anticipated future cash flows from related
operating activities. Factors which management considers in performing
this assessment include current operating results, trends and prospects
and, in addition, demand, competition and other economic factors.
Investment Tax Credits: Investment tax credits are recognized in the
year that the credits are utilized.
Fair Value of Financial Instruments: The following methods and
assumptions were used to estimate the fair value disclosures for
financial instruments:
Cash and Cash Equivalents - The carrying amounts reported in the
Consolidated Balance Sheets approximate fair value.
Short-term debt - The carrying amounts reported in the Consolidated
Balance Sheets approximate fair value because of the short maturity of
these instruments.
AMERICAN MAIZE-PRODUCTS COMPANY AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)
(Dollars in thousands, except per share amounts)
1. Summary of Significant Accounting Policies-(continued)
Long-term debt - Fair market value is estimated based on current market
quotations, where available, for publicly traded debt securities, or
based on rates currently available to the Company for nonpublicly traded
debt with similar terms.
The estimated fair value of the Company's long-term debt is as
follows:
<TABLE>
<CAPTION>
At December 31, 1993 1992
Carrying Amount Fair Value Carrying Amount Fair Value
<S> <C> <C> <C> <C>
Long-term debt. . . . . . . . . . . . $140,179 $144,057 $140,807 $159,093
</TABLE>
Earnings Per Share: Earnings per share of common stock has been
computed based upon the weighted average number of shares outstanding
during each year.
Reclassifications: Certain reclassifications have been made in the
prior years' financial statements to conform with the 1993 presentation.
2. Business Changes
On February 26, 1993, upon the satisfaction of various conditions,
including, among other things, the approval of the stockholders of the
Company and AFC, AFC was merged with and into the Company. In
accordance with the terms of the merger agreement, 3,738,483 AFC shares
were converted into a like number of the Company's Class A Common Stock
and 1,371,190 AFC shares were exchanged for a total of $30,817 in cash.
In addition, in accordance with the terms of the merger agreement,
129,350 outstanding AFC options were converted into stock options
outstanding of the Company. The issuance of the Company's Class A
Common Stock (in the amount of $84,022) was a noncash transaction and
was excluded from the accompanying Condensed Consolidated Statements of
Cash Flows.
Prior to the merger, the portion of AFC held by the public and
earnings or losses allocated thereto have been presented as "minority
interest" in the Consolidated Financial Statements. The merger has been
treated as a purchase of the minority interest for accounting purposes;
accordingly consolidated results include the entire amount of AFC's
operations for periods subsequent to the effective date of the merger.
In accordance with purchase accounting, the purchase price and direct
expenses associated with the merger were allocated to the proportionate
fair value of the assets purchased and liabilities assumed. These costs
exceeded the fair value of the net assets acquired in the merger by
$9,710 and are being amortized over a twenty year period.
The following sets forth the unaudited proforma results of operations of
the Company as if the merger had occurred on January 1, 1992:
Years ended December 31, 1993 1992
Net sales . . . . . . . . . . . . . . . . . . . . $538,534 $542,172
Income (loss) from continuing operations. . . . . $ (694) $ 16,478
Net income (loss) . . . . . . . . . . . . . . . . $(32,076) $ 19,494
Earnings per share of common stock:
Income (loss) from continuing operations. . . . $ (.07) $ 1.62
Net income (loss) . . . . . . . . . . . . . . . $ (3.14) $ 1.91
Until the end of 1990, the Company operated a number of home and
building materials retail centers through its wholly owned subsidiary,
Lloyd Home & Building Centers, Inc. ("Lloyd"). In connection with Lloyd
lease obligations, the Company provided $2,300 in 1991 for expected
lease commitment costs for Lloyd leases for which the Company remained
primarily liable. This amount is reported as a loss from discontinued
operation (net of income tax benefits recognized of $782) in the
accompanying Consolidated Statements of Operations and Retained
Earnings.
<PAGE>
AMERICAN MAIZE-PRODUCTS COMPANY AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)
(Dollars in thousands, except per share amounts)
3. Inventories
Inventories consisted of the following:
At December 31, 1993 1992
Finished goods . . . . . . . . $25,074 $22,349
Work-in-process . . . . . . . 4,344 5,595
Raw materials . . . . . . . . 40,302 32,733
Stores and supplies . . . . . 17,833 19,900
$87,553 $80,577
At December 31, 1993 and 1992, inventories of $49,553 and $45,293,
respectively, were valued using the LIFO method of accounting. These
amounts are less than the corresponding replacement values by $15,744 at
December 31, 1993 and $11,785 at December 31, 1992. In 1992 and 1991,
the carrying value of certain LIFO inventories were reduced by $1,259
and $843, respectively, to replacement cost (market).
4. Short-Term and Long-Term Debt
Long-term debt consisted of the following:
<TABLE>
<CAPTION>
At December 31, 1993 1992
Current Long-term Current Long-term
<S> <C> <C> <C> <C>
7.875% Senior notes (a). . . . . . . . . . . . $ - $125,000 $ - $ -
12% Senior subordinated debentures, less
unamortized discount of $1,295 in 1992,
effective rate of 12.50% (b). . . . . . . . . - - - 38,705
9.40% Subordinated debentures, less
unamortized discount of $5,779
in 1992, effective rate of 13.29% (b) . . . . - - - 25,693
Revolving credit borrowings (c). . . . . . . . 12,600 - 48,000
Bank term loan (d) . . . . . . . . . . . . . . - - 3,750 21,250
Capital lease obligation (e) . . . . . . . . . 885 1,694 830 2,579
$ 885 $139,294 $ 4,580 $136,227
<FN>
(a) During 1993, the Company issued and sold at par $125,000 of 7.875%
of Senior notes The notes require payments of $25,000 on March 3 of
each year from 1999 through 2002 with the balance due on March 3, 2003.
(b) The 12% Senior subordinated debentures, principal amount of $40,000,
were redeemed on April 13, 1993 and the 9.40% subordinated debentures,
principal amount of $31,472, were redeemed on December 15, 1993. As a
result of these early retirements, extraordinary losses of $4,182 (after
income tax benefits of $2,155) were incurred.
(c) In March 1993, the Company's $100,000 revolving credit facility with
various banks was amended which, among other things, reduced the
aggregate amount of the commitment to $75,000 through June 30, 1995.
Interest on the facility is at prime or at a cost of funds based
formula, at the Company's option. The facility provides for payment of
commitment fees of 0.375% on the unused portion of the facility during
the revolving credit period. The facility can be cancelled at any time
without cost to the Company.
During 1993, 1992 and 1991, the maximum revolving credit borrowings
outstanding at any month end were $78,000, $75,000 and $75,000,
respectively; average borrowings were $9,825, $59,631 and $20,780,
respectively; the weighted average interest rates were 4.55%, 4.66%
and 6.94%, respectively.
(d) Effective February 19, 1993, the bank term loan, which had been
established during 1992, was prepaid and cancelled.
During 1993 and 1992, the maximum borrowings outstanding at any month
end were $25,000; average borrowings were $3,562 and $6,694,
respectively; the weighted average interest rates were 4.90% and 4.77%,
respectively.
(e) The Company leases certain land, buildings and equipment under the
terms of a capital lease. At December 31, 1993 and 1992, property,
plant and equipment included $2,461 and $3,088 (net of accumulated
depreciation of $5,695 and $5,068), respectively, related to the assets
covered by this lease.
</TABLE>
AMERICAN MAIZE-PRODUCTS COMPANY AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)
(Dollars in thousands, except per share amounts)
4. Short-Term and Long-Term Debt-(continued)
The following is a schedule by year of future minimum capital lease
payments as of December 31, 1993:
Year ending December 31,
1994 . . . . . . . . . . . . . . . . . . . . . . . $1,032
1995 . . . . . . . . . . . . . . . . . . . . . . . 1,032
1996 . . . . . . . . . . . . . . . . . . . . . . . 773
Total minimum lease payments . . . . . . . . . . . 2,837
Less, amount representing interest . . . . . . . 258
Present value of minimum lease payments . . . . . $2,579
At December 31, 1993, total long-term debt maturing in each of the
next five years was as follows:
Year ending December 31,
1994 . . . . . . . . . . . . . . . . . . . . . . . $ 885
1995 . . . . . . . . . . . . . . . . . . . . . . . 944
1996 . . . . . . . . . . . . . . . . . . . . . . . 750
1997 . . . . . . . . . . . . . . . . . . . . . . . -
1998 . . . . . . . . . . . . . . . . . . . . . . . -
The Company's borrowing agreements contain various covenants which,
among other things, require the Company to maintain specific levels of
tangible net worth and leverage (as defined), and limit cash dividends
and the acquisition of the Company's common stock. At December 31,
1993, the most significant restriction of these agreements was the
leverage (as defined) ratio, under which up to an additional $58,173 of
senior liabilities (as defined) could be incurred.
The Company also has open lines of credit with banks, which are
renewable on an annual basis, aggregating $10,000 of which $5,000 and
$9,200 were used at December 31, 1993 and December 31, 1992,
respectively. The Company is required to pay fees of 0.250% per annum
on certain of these open lines of credit. Outstanding borrowings under
these lines of credit are classified as short-term debt. During 1993,
1992 and 1991, the maximum lines of credit borrowings outstanding at any
month end were $5,000, $10,000 and $65,000, respectively; average
borrowings were $748, $9,100, and $32,857, respectively; the weighted
average interest rates were 3.70%, 4.23% and 7.17%, respectively.
At December 31, 1993, the Company had standby letters of credit in the
amount of $5,291 outstanding which related principally to an insurance
program.
5. Income Taxes
Effective January 1, 1992, the Company adopted Statement of Financial
Accounting Standards No. 109, "Accounting for Income Taxes." The
cumulative effect of this accounting change was a $5,000 reduction in
the Company's consolidated deferred tax liability due principally to the
recognition of statutory tax rate changes upon temporary differences and
previously recognized net operating loss and investment tax credit
benefits and, to a lesser extent, by the impact of prior purchase
business combinations. The reduction resulted in an increase in
consolidated net income for 1992 of $3,016, or $.47 per share, including
$1,516, net, pertaining to AFC Until February 26, 1993, the Company and
AFC filed separate consolidated federal and state income tax returns.
The following reconciles the statutory federal income tax rate to the
effective tax rate:
<TABLE>
<CAPTION>
Years ended December 31, 1993 1992 1991
<S> <C> <C> <C>
Federal statutory rate . . . . . . . . . . . . . . . . 35.0% 34.0% 34.0%
State and local income taxes, net of federal income
tax benefit . . . . . . . . . . . . . . . . . . . . . 49.9 3.5 3.0
Amortization of difference in tax and book basis
of certain assets . . . . . . . . . . . . . . . . . . 63.0 .9 .9
FSC exempt sales . . . . . . . . . . . . . . . . . . . (51.3) (.2) (.1)
Meals and entertainment disallowance . . . . . . . . . 8.5 .2 .2
Other, net . . . . . . . . . . . . . . . . . . . . . . 6.0 .8 .6
Effective tax rate . . . . . . . . . . . . . . . . . . 111.1% 39.2% 38.6%
</TABLE>
<PAGE>
AMERICAN MAIZE-PRODUCTS COMPANY AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)
(Dollars in thousands, except per share amounts)
5. Income Taxes (continued)
The components of net deferred tax assets and liabilities at December
31, 1993 and 1992 are as follows:
<TABLE>
<CAPTION>
At December 31, 1993 1992
<S> <C> <C>
Deferred taxes:
Short-term deferred tax assets:
Restructuring reserves. . . . . . . . . . . . . . . . $ 2,511 $ -
Vacation . . . . . . . . . . . . . . . . . . . . . . 331 322
Workers compensation . . . . . . . . . . . . . . . . 623 729
Other . . . . . . . . . . . . . . . . . . . . . . . . - 611
$ 3,465 $ 1,662
Noncurrent deferred tax assets:
Postretirement and postemployment benefit accruals. . $ 22,350 $ -
Deferred compensation . . . . . . . . . . . . . . . . 1,362 1,226
Net operating loss carryforwards . . . . . . . . . . 2,693 5,471
Minimum tax credit carryforwards . . . . . . . . . . 6,014 -
Net investment tax credit carryforwards . . . . . . . 1,520 2,194
$ 33,939 $ 8,891
Total . . . . . . . . . . . . . . . . . . . . . . . $ 37,404 $ 10,553
Noncurrent deferred tax liabilities:
Depreciation . . . . . . . . . . . . . . . . . . . . $(36,145) $(34,901)
Merger step-up on fixed assets . . . . . . . . . . . (19,167) -
Pension . . . . . . . . . . . . . . . . . . . . . . . (6,536) (5,862)
Interest capitalization, net . . . . . . . . . . . . (2,196) (2,596)
Purchase business combination/restructuring . . . . . (1,574) (3,298)
Other . . . . . . . . . . . . . . . . . . . . . . . . (2,561) (1,827)
Total . . . . . . . . . . . . . . . . . . . . . . . $(68,179) $(48,484)
Net long-term deferred taxes . . . . . . . . . . . . . $(30,775) $(37,931)
</TABLE>
The components of the provision for deferred income taxes for the year
ended December 31, 1991 are as follows:
Year ended December 31, 1991
Reversals of tax over book depreciation . . . . . . . . . . . . . . $ 986
Inventory valuation allowances. . . . . . . . . . . . . . . . . . . (172)
Utilization of net operating losses and investment tax credits
in different periods for federal tax return and financial
reporting purposes. . . . . . . . . . . . . . . . . . . . . . . . (2,249)
Capitalized inventory costs . . . . . . . . . . . . . . . . . . . . (634)
Pension costs and other employee benefits . . . . . . . . . . . . . (382)
Capitalized interest, net of amortization . . . . . . . . . . . . . 133
Basis difference in assets disposed or sold . . . . . . . . . . . . 431
Provision for doubtful accounts . . . . . . . . . . . . . . . . . . 122
Other, net. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 795
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ (970)
The following summarizes net operating loss, investment tax and other
credit carryforwards available for federal income tax purposes as of
December 31, 1993:
Year of
Amount expiration
Net regular tax operating loss carryforwards . . . $ 2,693 2000-2004
Investment tax and other credit carryforwards. . . $ 812 2001
310 2002
94 2003
108 2004
145 2005
51 2007
Alternative minimum tax credit carryforward. . . . $ 6,014 N/A
<PAGE>
AMERICAN MAIZE-PRODUCTS COMPANY AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)
(Dollars in thousands, except per share amounts)
6. Pension and Savings Plans
The Company has several non-contributory defined benefit pension plans
which cover substantially all employees. Pension benefits are generally
based on either years of service and employee compensation during the
last years of employment or years of service times a multiplier. The
funding policy is to contribute annually amounts sufficient to meet the
minimum requirements set forth in applicable employee benefit and tax
laws and such additional amounts the Company may determine, from time to
time, to be appropriate. The vested benefit obligation is determined
based upon the expected date of retirement for participants. To the
extent that these requirements are fully covered by assets on hand, a
contribution, although not required, may be made in a particular year.
During 1993, the Company recognized a pension curtailment gain of $939
which related to a plant consolidation in the tobacco business.
Actuarially determined pension costs are accrued currently and include
amounts for current service and prior service costs which are amortized
on a straight-line basis over the participants remaining service period.
Negative pension expense for 1993, 1992 and 1991 included the
following components:
<TABLE>
<CAPTION>
Years ended December 31, 1993 1992 1991
<S> <C> <C> <C>
Service cost . . . . . . . . . . . . . . . . . . $(3,851) $(3,051) $(2,492)
Interest cost on projected benefit obligations . (7,961) (7,235) (6,784)
Curtailment gain . . . . . . . . . . . . . . . . 939 - -
Return on plan assets:
Actual income. . . . . . . . . . . . . . . . . 17,957 3,884 29,955
Deferred (loss) income . . . . . . . . . . . . (6,351) 7,735 (20,979)
Amortization of:
Initial unrecognized net asset . . . . . . . . 1,198 1,198 1,198
Unrecognized prior service cost . . . . . . . (356) (356) (267)
Unrecognized net (loss) gain . . . . . . . . . (63) 308 (44)
$ 1,512 $ 2,483 $ 587
Assumed rates of return on plan assets . . . . . 10.0% 10.0% 10.0%
Assumed discount rates (used to measure year-
end projected benefit obligation) . . . . . . . 7.0% 8.0% 8.5%
Assumed long-term rates of compensation
increases . . . . . . . . . . . . . . . . . . . 5%-7.1% 5%-7.1% 5%-7.1%
</TABLE>
At December 31, 1993, the plans' assets were primarily invested in equity
and fixed income securities.
The plans' funded status and amounts recognized in the Company's
Consolidated Balance Sheets for 1993 and 1992 were as follows:
<TABLE>
<CAPTION>
At December 31, 1993 1992
Over- Under- Over- Under-
funded funded funded funded
Plans Plans Plans Plans
<S> <C> <C> <C> <C>
Actuarial present value of benefit
obligation:
Vested benefit obligation . . . . . . . $ 76,850 $ 19,782 $ 62,157 $ 14,775
Non-vested benefit obligation . . . . . 2,502 540 2,663 478
Additional amounts related to
projected pay increases . . . . . . . . 19,933 2,787 17,308 1,549
Projected benefit obligation . . . . . . $ 99,285 $ 23,109 $ 82,128 $ 16,802
Plan assets at fair value . . . . . . . . . $110,282 $ 20,523 $101,969 $ 15,923
Projected benefit obligation (over)
under plan assets . . . . . . . . . . . . . $ 10,997 $ (2,586) $ 19,841 $ (879)
Unrecognized net (gain) loss . . . . . . . . 8,554 5,073 (993) 1,531
Unrecognized prior service cost . . . . . . 1,525 926 1,736 1,074
Adjustment for additional liability . . . . - (3,389) - (1,965)
Balance of unrecognized net
(asset) obligation existing from date
of initial application . . . . . . . . . . (6,256) (112) (7,945) 378
Prepaid (accrued) pension cost . . . . . . . $ 14,820 $ (88) $ 12,639 $ 139
</TABLE>
<PAGE>
AMERICAN MAIZE-PRODUCTS COMPANY AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)
(Dollars in thousands, except per share amounts)
6. Pension and Savings Plans-(continued)
The increase in the projected benefit obligation in 1993 compared to
1992, is primarily due to the 1993 change in the assumed discount rate.
Effective January 1, 1993, revisions to certain actuarial assumptions
relating to mortality, withdrawal, retirement and future salary
increases were adopted by the Company.
In addition to benefits provided under the Company's pension plans,
the Company also provides pension benefits under a non-contributory
supplemental executive retirement plan ("Supplemental Plan") and a non-
contributory directors retirement plan ("Directors Plan"). The
Supplemental Plan, which covers certain executives and other key
employees, provides for benefits which supplement those provided by the
Company's other pension plans. In connection with the Supplemental
Plan, restricted cash in the amounts of $2,020 at December 31, 1993 and
$1,271 at December 31, 1992 are included in other assets. Benefits
under the Directors Plan are based upon years of non-employee service on
the Board of Directors and the directors' remuneration during the last
years of service on the Board of Directors.
Net pension expense under these other pension plans included the
following components:
<TABLE>
<CAPTION>
Years ending December 31, 1993 1992 1991
Supplemental Directors Supplemental Directors Supplemental Directors
Plan Plan Plan Plan Plan Plan
<S> <C> <C> <C> <C> <C> <C>
Service cost . . . . . . . . . $241 $ 74 $263 $ 85 $206 $278
Interest cost on projected
benefit obligation . . . . . . 360 95 308 91 270 58
Amortization of:
Unrecognized prior service
cost . . . . . . . . . . . . 238 106 195 114 195 114
Unrecognized net loss . . . . 44 - - 5 - -
$883 $275 $766 $295 $671 $450
Assumed discount rates (used
to measure year end projected
benefit obligation) . . . . . 5.3% 7.0% 5.3% 8.0% 6.0% 8.5%
Assumed long-term rates of
compensation increases . . . . 6.1% 6.0% 6.1% 6.0% 6.1% 6.0%
</TABLE>
The amounts recognized in the Company's Consolidated Balance Sheets
regarding these other pension plans are as follows:
<TABLE>
<CAPTION>
At December 31, 1993 1992
Supplemental Directors Supplemental Directors
Plan Plan Plan Plan
<S> <C> <C> <C> <C>
Actuarial present value of
benefit obligation:
Vested benefit obligation . . . $ 5,188 $ 1,284 $ 3,642 $ 924
Non-vested benefit
obligation . . . . . . . . . . 5 148 - 265
Additional amounts related
to projected pay
increases. . . . . . . . . . . 2,775 2 2,445 67
Projected benefit
obligation . . . . . . . . . . $ 7,968 $ 1,434 $ 6,087 $ 1,256
Plan assets at fair value . . . . $ - $ - $ - $ -
Projected benefit obligation
over plan assets . . . . . . . . $(7,968) $(1,434) $(6,087) $(1,256)
Unrecognized net loss . . . . . . 2,080 291 848 137
Unrecognized prior service
cost . . . . . . . . . . . . . . 3,805 226 3,324 419
Balance of unrecognized net
obligation from date of
initial application . . . . . . - - - -
Adjustment for additional
liability . . . . . . . . . . . (3,110) (515) (1,727) (489)
Accrued pension cost . . . . . . $(5,193) $(1,432) $(3,642) $(1,189)
</TABLE>
<PAGE>
AMERICAN MAIZE-PRODUCTS COMPANY AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)
(Dollars in thousands, except per share amounts)
6. Pension and Savings Plans-(continued)
During 1991, an intangible asset of $2,461 was recorded to account for
the additional minimum liability of these other pension plans. This was
a noncash transaction and accordingly, has been excluded from the
Consolidated Statements of Cash Flows.
In addition to benefits under the Company's pension plans, the Company
sponsors a savings plan (the "Plan"), under Section 401(k) of the
Internal Revenue Code, to provide its eligible employees with additional
income upon retirement. The Plan requires specified contributions by
the Company in either cash or the Company's Class A Common Stock.
Specified cash contributions must be invested by the Plan's trustee in
the Company's Class A Common Stock. Discretionary contributions, which
must be invested in the Plan's diversified equity fund, are also
permitted. Contribution expense under the Plan was $1,482, $1,383 and
$1,284 in 1993, 1992 and 1991, respectively.
7. Postretirement Benefits Other Than Pensions
The Company provides certain health care benefits for retired
employees and their beneficiaries. A significant number of the
Company's employees may become eligible for these benefits if employed
until normal retirement age provided they fulfill certain service
requirements.
Effective January 1, 1993, the Company adopted Statement of Financial
Accounting Standards No. 106 "Employers' Accounting for Postretirement
Benefits Other Than Pensions"("SFAS 106"). Under the statement,
postretirement benefits are required to be recognized over the
employees' active years of service. The Company previously accounted
for these costs on a cash basis. The adoption of the statement created
a transition obligation for previously unrecognized prior years' costs.
As permitted under SFAS 106, the Company elected to record the
transition obligation on the immediate recognition basis. Accordingly,
the Company recorded as a cumulative effect of an accounting change a
charge of $47,370 ($26,566, net of tax), or $2.75 per share.
Postretirement benefit expense for 1993 included the following
components:
Year Ended December 31, 1993
Service cost . . . . . . . . . . . . $1,379
Interest cost. . . . . . . . . . . . 3,642
$5,021
The amount recognized in the Company's Consolidated Balance Sheet for
postretirement benefits other than pensions is as follows:
At December 31, 1993
Actuarial present value of accumulated
postretirement benefit obligation:
Retirees . . . . . . . . . . . . . . . . . . . . . . . . . $24,493
Fully eligible active participants . . . . . . . . . . . . 11,065
Other active participants. . . . . . . . . . . . . . . . . 18,915
Unrecognized loss. . . . . . . . . . . . . . . . . . . . . (4,405)
$50,068
The discount rate used to determine the accumulated postretirement
benefit obligation was 7.25%. The assumed health care cost trend rate
used to measure the accumulated postretirement benefit obligation was
13.0% initially, decreasing gradually to 5.5% in 2001 and thereafter. A
one-percentage-point increase in the assumed health care cost trend rate
in each year would increase the accumulated postretirement benefit
obligation as of December 31, 1993, by $8,596 and the aggregate of the
service cost and interest cost by $944 for the year ended December 31,
1993.
8. Postemployment Benefits Other Than To Retirees
The Company provides certain postemployment benefits to former or
inactive employees after employment but before retirement. Effective
January 1, 1993, the Company adopted Statement of Financial Accounting
Standards No. 112, "Employers' Accounting for Postemployment Benefits"
which requires that these benefits be recorded on an accrual basis. The
Company had previously recorded a portion of these costs on an accrual
basis; however, the adoption of this statement created a transition
obligation for previously unrecognized prior years' costs. As a result
of the adoption of the statement, the Company recorded a charge of
$1,130 ($634 net of tax), or $.07 per share, as a cumulative effect of
an accounting change.
<PAGE>
AMERICAN MAIZE-PRODUCTS COMPANY AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)
(Dollars in thousands, except per share amounts)
9. Capital Stock
Class A and Class B Common Stock are identical in all respects except
that voting power of the Class A Common Stock is limited to the election
of 30% of the Board of Directors, to matters involving stock options
and, under certain circumstances, to the acquisition of the stock or
assets of another company. All other voting rights are vested in the
Class B Common Stock (one vote per share) and the Company's 7%
Cumulative Preferred Stock (45 votes per share).
On February 10, 1993, the Company's stockholders approved proposals
which, among other things, increased the total number of the Company's
Class A Common Stock authorized by 6,250,000 shares and deleted the
Cumulative Preferred Stock from the authorized capital stock of the
Company. During 1992 there were zero shares of 7% Cumulative Preferred
Stock outstanding, with a par and liquidating value of $100 per share.
The Company's authorized stock includes 2,500,000 shares of Series
Preferred Stock, without par value. No Series Preferred Stock has been
issued.
Changes in common stock, capital in excess of par value and treasury
stock for 1991, 1992 and 1993 were as follows:
<TABLE>
<CAPTION>
Common Stock Capital
Treasury Stock in excess
Class A Class B of Par Class A Class B
Shares Amount Shares Amount Value Shares Shares Amount
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Balance at December 31, 1990 . 5,090,640 $4,073 1,809,282 $1,447 $ 41,704 430,826 67,225 $7,415
Exercise of stock options . . 500 - - - 6 - - -
Treasury shares contributed
to employee savings plan. . . - - - - 222 (21,341) - (191)
Exchange of 7% cumulative
preferred stock . . . . . . . 180 - - - - - - -
Balance at December 31, 1991 . 5,091,320 4,073 1,809,282 1,447 41,932 409,485 67,225 7,224
Exercise of stock options . . 19,100 15 - - 325 - - -
Purchase of treasury stock . . - - - - - 5,876 - 127
Treasury shares contributed
to employee savings plan. . . - - - - 286 (21,080) - (189)
Balance at December 31, 1992 . 5,110,420 4,088 1,809,282 1,447 42,543 394,281 67,225 7,162
Issuance of Common Stock . . . 3,738,483 2,991 - - 81,031 - - -
Treasury shares contributed
to employee savings plan. . . - - - - 262 (27,291) - (245)
Balance at December 31, 1993 . 8,848,903 $7,079 1,809,282 $1,447 $123,836 366,990 67,225 $6,917
</TABLE>
10. Stock Options
The 1985 Stock Option Plan, as amended, provides that options for
600,000 shares of the Company's Class A Common Stock may be granted to
officers and other key employees of the Company and its subsidiaries.
During 1992, stockholders of the Company approved a plan amendment
which increased available option shares by 250,000. Stock options
granted under the plan may be either incentive stock options or
non-qualified options. Options granted under the plan are at exercise
prices not less than the fair market value per share at the date of
grant and may be exercised at any time within ten years. Payment for
options exercised can be made in cash or, if approved by the Stock
Option Committee of the Board of Directors, in Class A Common Stock of
the Company.
During 1993, in accordance with the terms of the merger agreement
(See Note 2), 129,350 outstanding AFC options were converted into
stock options outstanding of the Company.
<PAGE>
AMERICAN MAIZE-PRODUCTS COMPANY AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)
(Dollars in thousands, except per share amounts)
10. Stock Options-(continued)
Plan activity for 1993, 1992 and 1991 was as follows:
<TABLE>
<CAPTION>
1993 1992 1991
Optioned Optioned Optioned
Shares Price Range Shares Price Range Shares Price Range
<S> <C> <C> <C> <C> <C> <C>
Balance outstanding
at January 1, . . . . . 230,898 $13.88-$22.88 204,098 $13.88-$23.24 231,700 $13.88-$23.24
Exercised . . . . . . . - - (19,100) $13.88-$21.25 (500) $13.88
Granted . . . . . . . . 120,000 $16.25 57,000 $22.88 - -
AFC option conversion. . 129,350 $ 6.63-$20.63 - - - -
Cancelled . . . . . . . - - - - (2,800) $13.88-$14.19
Cancelled (Expired Plan) - - - - (500) $16.69
Expired . . . . . . . . (1,300) $20.94-$21.25 (11,100) $13.88-$23.24 (23,802) $13.88-$21.25
Balance outstanding
at December 31, . . . . 478,948 $ 6.63-$22.88 230,898 $13.88-$22.88 204,098 $13.88-$23.24
Available for grant . . 135,452 254,152 50,052
</TABLE>
11. Supplementary Information
Research and development expenditures for the development of new
products and for improvements of existing products were $3,890 in
1993, $3,147 in 1992 and $3,373 in 1991.
Interest costs incurred during 1993, 1992 and 1991 were $14,708,
$13,234 and $15,110, respectively. Interest capitalized in those
years was $748, $536 and $257, respectively.
During 1993, operating results were adversely affected by
restructuring charges of $12,323. The charges principally reflect the
cost of consolidation and modernization programs in the Company's
business units, divestiture of non-performing assets and
organizational changes.
During 1992, a restructuring charge of $3,593 was incurred for a
plant consolidation in the Company's tobacco business.
During 1991, a nonrecurring charge of $4,162 was incurred by the
Company for legal fees and related expenses regarding the settlement
of certain shareholder litigation.
12. Commitments and Contingencies
At December 31, 1993, the Company and its subsidiaries were
committed under long-term operating leases expiring through 2005.
Minimum annual rental commitments were as follows:
Transportation
Year ending December 31, Equipment Other Total
1994 . . . . . . . . . . . . . $10,086 $946 $11,032
1995 . . . . . . . . . . . . . 9,022 893 9,915
1996 . . . . . . . . . . . . . 7,189 621 7,810
1997 . . . . . . . . . . . . . 4,752 164 4,916
1998 . . . . . . . . . . . . . 3,630 - 3,630
1999 and thereafter . . . . . 41,035 - 41,035
Rent expense was $13,992, $12,657 and $11,917 in 1993, 1992 and
1991, respectively.
The Company is committed to sell some of its products under short-
term (two to three months) and long-term (up to one year) contracts.
At December 31, 1993, long-term commitments approximated $69,717.
Sales to the Coca-Cola Company accounted for 12% and 11% of net
sales in 1993 and 1992, respectively.
Until December 31, 1996, the Company has a guaranteed handling and
storage agreement with an outside party. Total expenses under this
agreement were $2,231 in 1993, $2,281 in 1992 and $2,133 in 1991.
The Company is a defendant in a lawsuit for which no estimate of the
amount of final judgment, if any, against the Company can be made. In
the event that this lawsuit results in a final judgment against the
Company, management believes that such judgment could have a material
adverse effect on the results of operations in a future period but
would not have a material adverse effect on the Company's financial
condition.
The Company is primarily liable for certain leases for a
discontinued operation which, by their terms, call for lease payments
which aggregate a maximum amount of approximately $6,100.
<PAGE>
AMERICAN MAIZE-PRODUCTS COMPANY AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)
(Dollars in thousands, except per share amounts)
13. Industry Segments
Information about the Company's continuing operations in different
industries is as follows:
Corn Tobacco
Business Business Consolidated
Fiscal year 1993:
Net sales . . . . . . . . . . . . . . . $380,315 $158,219 $538,534
Operating profit . . . . . . . . . . . . $ 19,958 $ 13,846 $ 33,804
Corporate expenses . . . . . . . . . . . (18,255)
Interest expense . . . . . . . . . . . . (13,960)
Interest income . . . . . . . . . . . . 809
Other expense, net . . . . . . . . . . . (1,362)
Income from continuing operations before
income taxes, minority interest,
extraordinary losses and cumulative
effect of accounting changes. . . . . . $ 1,036
Identifiable assets . . . . . . . . . . $324,146 $ 95,129 $419,275
Corporate assets . . . . . . . . . . . . 72,783
Total assets . . . . . . . . . . . . . . $492,058
Depreciation and amortization . . . . . $ 27,603 $ 4,480 $ 32,083
Capital expenditures . . . . . . . . . . $ 39,125 $ 4,508 $ 43,633
Fiscal year 1992:
Net sales . . . . . . . . . . . . . . . $391,513 $150,659 $542,172
Operating profit . . . . . . . . . . . . $ 37,995 $ 14,818 $ 52,813
Corporate expenses . . . . . . . . . . . (8,484)
Interest expense . . . . . . . . . . . . (12,698)
Interest income . . . . . . . . . . . . 2,288
Other expense, net . . . . . . . . . . . (1,027)
Income from continuing operations before
income taxes, minority interest,
extraordinary losses and cumulative
effect of accounting changes. . . . . . $ 32,892
Identifiable assets . . . . . . . . . . $263,037 $ 97,640 $360,677
Corporate assets . . . . . . . . . . . . 123,326
Total assets . . . . . . . . . . . . . . $484,003
Depreciation and amortization . . . . . $ 21,855 $ 4,579 $ 26,434
Capital expenditures . . . . . . . . . . $ 28,072 $ 4,194 $ 32,266
Fiscal year 1991:
Net sales . . . . . . . . . . . . . . . $387,622 $145,943 $533,565
Operating profit . . . . . . . . . . . . $ 47,538 $ 18,927 $ 66,465
Corporate expenses . . . . . . . . . . . (9,482)
Interest expense . . . . . . . . . . . . (14,853)
Interest income . . . . . . . . . . . . 2,685
Other expense, net . . . . . . . . . . . (1,058)
Nonrecurring charge . . . . . . . . . . (4,162)
Income from continuing operations before
income taxes, minority interest,
extraordinary losses and cumulative
effect of accounting changes. . . . . . $ 39,595
Identifiable assets . . . . . . . . . . $263,004 $116,642 $379,646
Corporate assets . . . . . . . . . . . . 79,993
Total assets . . . . . . . . . . . . . . $459,639
Depreciation and amortization . . . . . $ 21,551 $ 4,792 $ 26,343
Capital expenditures . . . . . . . . . . $ 15,945 $ 3,483 $ 19,428
<PAGE>
AMERICAN MAIZE-PRODUCTS COMPANY AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)
(Dollars in thousands, except per share amounts)
13. Industry Segments-(continued)
The Corn Business segment involves the production and sale of a
number of corn-derived products, including corn sweeteners, corn
starches and by-products to companies in various industries.
The Tobacco Business segment involves principally the manufacture
and sale of cigars, dry snuff, chewing tobacco and moist snuff
products.
Identifiable assets are those assets used in operations in each
segment. Corporate assets are principally cash, short-term
investments, prepaid pension costs and certain other noncurrent
assets.
14. Quarterly Results of Operations-(Unaudited)
Quarterly results of operations for the years ended December 31,
1993 and 1992 were as follows:
Three Months Ended March 31 June 30 September 30 December 31
Fiscal year 1993:
Net sales . . . . . . . . $115,006 $135,847 $151,825 $135,856
Gross profit . . . . . . . $ 22,838 $ 30,625 $ 36,041 $ 31,815
Income (loss) before
extraordinary losses and
cumulative effect of
accounting changes . . . . $ (4,966)(1) $ (3,621)(1) $ 5,428 $ 3,373
Extraordinary losses from
early extinguishment
of debt . . . . . . . . (2,862) - - (1,320)
Cumulative effect of
accounting changes. . . (27,200) - - -
Net income (loss). . . . $(35,028) $ (3,621) $ 5,428 $ 2,053
Earnings (loss) per share:
Income (loss) before extra-
ordinary losses and
cumulative effect of
accounting changes. . . $ (.63) $ (.35) $ .53 $ .33
Extraordinary losses from
early extinguishment
of debt. . . . . . . . . (.36) - - (.13)
Cumulative effect of
accounting changes . . . (3.45) - - -
Net income (loss) . . . . . . $ (4.44) $ (.35) $ .53 $ .20
Fiscal year 1992:
Net sales . . . . . . . . . . $125,126 $147,086 $145,995 $123,965
Gross profit. . . . . . . . . $ 29,939 $ 37,960 $ 38,151 $ 25,966
Income (loss) before cumulative
effect of change in accounting
for income taxes . . . . . $ 113(2) $ 5,539(2) $ 5,220 $ (877)(2)
Cumulative effect of change
in accounting for
income taxes . . . . . . . . 3,016 - - -
Net income (loss) . . . . . . $ 3,129 $ 5,539 $ 5,220 $ (877)
Earnings (loss) per share:
Income (loss) before cumula-
tive effect of change
in accounting for income
taxes . . . . . . . . . . $ .02 $ .86 $ .81 $ (.14)
Cumulative effect of change
in accounting for income
taxes . . . . . . . . . .47 - - -
Net income (loss) . . . . $ .49 $ .86 $ .81 $ (.14)
(1) Includes restructuring charges of $7,720 (net of tax), or $.82 per
share, related to cost of consolidation and modernization programs
in the Company's business units, divestiture of non-performing
assets and organizational changes.
(2) Includes a restructuring charge of $2,074 (net of tax), or $.32
per share, related to a plant consolidation in the Company's
tobacco business.
<PAGE>
Exhibit 21.
SUBSIDIARIES
(a) Swisher International, Inc., a Delaware corporation which is
wholly owned by the Company;
(b) Helme Tobacco Company, a Delaware corporation which is
wholly owned by Swisher International, Inc.;
(c) Martin Brothers International, Inc., a New York corporation
which is wholly owned by Swisher International, Inc.;
(d) Swisher International, Ltd., a corporation formed under the
laws of the United Kingdom, which is wholly owned by Martin
Brothers International, Inc.;
(e) Lloyd Home & Building Centers, Inc., a Delaware corporation
which is wholly owned by Swisher International, Inc.;
(f) AMPCO Holding Corporation, a Texas corporation which is
wholly owned by American Maize-Products Decatur Inc.;
(g) AFC International Exporting, Inc., a corporation formed
under the laws of Barbados, which is wholly owned by American
Maize-Products Decatur Inc.;
(h) American Maize Technology, Inc., a Texas corporation, which
is owned by the Company (17%), Swisher International, Inc. (47%)
and Helme Tobacco Company (36%);
(i) American Maize-Products Decatur Inc., a Delaware corporation
which is wholly owned by the Company; and
(j) American Maize-Products Dimmitt Inc., a Delaware corporation
which is wholly owned by the Company.
<PAGE>
Exhibit 23.
CONSENT OF INDEPENDENT ACCOUNTANTS
American Maize-Products Company:
We consent to the incorporation by reference in the
Registration Statements of American Maize-Products Company on
Form S-8 (File Nos. 33-69794, 33-69796, 2-69532, 2-90927, 33-664
and 33-22943) of our reports dated February 22, 1994 on our
audits of the consolidated financial statements and financial
statement schedules of American Maize-Products Company as of
December 31, 1993 and 1992 and for each of the three years in the
period ended December 31, 1993, which reports are incorporated by
reference in this Annual Report on Form 10-K.
COOPERS & LYBRAND
One Canterbury Green
Stamford, Connecticut
March 25, 1994.
<PAGE>
