<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
Form 8-K/A
Amendment No. 1
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): August 31, 2000
Commission File Number 0-748
MCCORMICK & COMPANY, INCORPORATED
------------------------------------------------------
(Exact name of registrant as specified in its charter)
MARYLAND 52-0408290
--------------------------------------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
18 LOVETON CIRCLE, P. O. BOX 6000, SPARKS, MD 21152-6000
-------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (410) 771-7301
--------------
<PAGE>
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
This Amendment No. 1 hereby amends Item 7 of the Current Report on Form 8-K
filed by McCormick & Company, Incorporated with the Securities and Exchange
Commission on September 15, 2000 relating to McCormick's acquisition on
August 31, 2000 of Ducros, S.A. and Sodis, S.A.S. The following financial
statements required by Item 7 are filed as part of this report beginning on
page 5.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
(a) Financial Statements of the Business Acquired.
- Balance sheets as of December 31, 1999 and the related
consolidated income statements and consolidated statement
of cash flows for the year ended December 31, 1999, of
Ducros, together with independent accountant's report
thereon, in accordance with accounting principles generally
accepted in France.
- Balance sheets as of December 31, 1999 and the related
consolidated income statements and consolidated statement
of cash flows for the year ended December 31, 1999, of
Sodis, together with independent accountant's report
thereon, in accordance with accounting principles generally
accepted in France.
- Reconciliation of Ducros historical statements to accounting
principles generally accepted in the United States ("US
GAAP").
- Consent of Independent Accountants
(b) Pro Forma Financial Information.
- Pro Forma Condensed Combined Statement of Income for the year
ended November 30, 1999 (unaudited).
- Pro Forma Condensed Combined Statement of Income for the
6-month period ended May 31, 2000 (unaudited).
- Pro Forma Condensed Combined Balance Sheet as of May 31, 2000
(unaudited).
- Notes to Unaudited Pro Forma Condensed Combined Financial
Statements
(c) Exhibits.
2.1 Stock Purchase Agreement (Incorporated by reference from
the McCormick's Current Report on Form 8-K filed on
September 15, 2000).
99.1 Press Release, dated August 31, 2000 (Incorporated by
reference from the McCormick's Current Report on Form 8-K
filed on September 15, 2000).
2
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
McCORMICK & COMPANY, INCORPORATED
Date: November 14, 2000 By: /s/ Francis A. Contino
------------------------- ------------------------------
Francis A. Contino
Executive Vice President & Chief
Financial Officer
Date: November 14, 2000 By: /s/ Kenneth A. Kelley, Jr.
------------------------- ------------------------------
Kenneth A. Kelly, Jr.
Vice President & Controller
3
<PAGE>
ITEM 7(a): FINANCIAL STATEMENTS OF THE BUSINESSES ACQUIRED.
BUSINESS : DUCROS S.A.
INDEPENDENT ACCOUNTANT'S REPORT
In fulfillment of the assignment decided by your general meeting, we have
audited the consolidated financial statements of Ducros established in euros for
the financial year-end December, 31 1999, as presented in this report.
These consolidated financial statements are the responsibility of the Eridania
Beghin-Say's management. Our responsibility is to express an opinion on these
consolidated financial statements based on our audits.
We conducted our audit in accordance with the 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
misstatements. 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 consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Ducros and its
subsidiaries as of December, 31 1999.
Le Commissaire aux Comptes
Deloitte Touche Tohmatsu - Audit
Neuilly, May, 11 2000
/s/ Arnaud de Planta
4
<PAGE>
DUCROS GROUP
CONSOLIDATED BALANCE SHEET
<TABLE>
<CAPTION>
IN THOUSANDS OF EUR DECEMBER 31, DECEMBER 31,
1999 1999
------------------------------------------------------------- -------------------------------------------------------------
<S> <C> <C> <C>
Intangible assets 6 898 SHAREHOLDERS' EQUITY
Goodwill 7 024 Share capital 15 829
PROPERTY, PLANT AND EQUIPMENT Retained earnings 53 705
Gross value 67 240 Accumulated exchange difference (1 469)
Accumulated amortization (41 562) Net income 14 207
---------------------
TOTAL TANGIBLE FIXED ASSETS 25 678
------------------
TOTAL SHAREHOLDERS' EQUITY FOR THE SHARE 82 272
OF THE GROUP
FINANCIAL FIXED ASSETS
Unconsolidated investments 78 Minority interest -
Deposits 349
Other financial assets 5 933 Provisions for risks and charges 6 260
---------------------
TOTAL FINANCIAL FIXED ASSETS 6 360
Borrowings 7 412
---------------------
TOTAL FIXED ASSETS 45 960
Trade accounts payable 58 452
Inventories and work in progress 38 447 Other operating debt 11 323
------------------
TOTAL 69 775
Trade accounts receivable 70 691
Other receivable 5 872
---------------------
TOTAL RECEIVABLE 76 563 Fixed assets suppliers 3 844
Other debt 973
------------------
Cash at bank and in hand 8 847 TOTAL 4 817
---------------------
CURRENT ASSETS 123 857
Prepaid and other 719
--------------------- ------------------
TOTAL ASSETS 170 536 TOTAL LIABILITIES 170 536
===================== ==================
</TABLE>
See notes to consolidated financial statements.
Prepared in accordance with accounting principles generally accepted in France.
5
<PAGE>
DUCROS GROUP
CONSOLIDATED INCOME STATEMENT
FOR THE YEAR ENDED DECEMBER 31, 1999
<TABLE>
<CAPTION>
IN THOUSANDS OF EUR 1999
---------------------------------------------------------------------------------------
<S> <C>
OPERATING INCOME
Turnover 246 778
Other operating income 282
------------
TOTAL OPERATING INCOME 247 060
OPERATING EXPENSES
Purchases & change in stock 77 274
Wages and social security 26 124
Amortization charge 6 122
Head office costs 3 110
Slotting fees 2 592
Other operating costs 114 917
------------
TOTAL OPERATING EXPENSES 230 139
------------
OPERATING RESULT 16 921
Financial result (341)
------------
OPERATING RESULT BEFORE INCOME TAX 16 580
Exceptional result (884)
Income tax (989)
------------
NET RESULT 14 707
Amortization of goodwill (500)
Minority interest -
------------
CONSOLIDATED NET RESULT FOR THE SHARE OF THE GROUP 14 207
============
</TABLE>
See notes to consolidated financial statements.
Prepared in accordance with accounting principles generally accepted in France.
6
<PAGE>
DUCROS GROUP
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED DECEMBER 31, 1999
<TABLE>
<CAPTION>
IN THOUSANDS OF EUR 1999
---------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
NET CASH PROVIDED BY OPERATING ACTIVITIES
Operating result 16 921
Amortization charge 6 122
Write on / (write back) for operating reserves (416)
------------
EBITDA 22 627
Change in working capital (4 666)
------------
OPERATING CASH FLOW 17 961
Paid interests, net (financial result) (341)
Paid income tax (1 178)
Exceptional costs paid (793)
------------
TOTAL (a) 15 649
NET CASH FROM INVESTING ACTIVITIES
CAPITAL EXPENDITURES (11 079)
Tangible fixed assets (6 771)
Loans (4 002)
Other fixed assets (306)
DISPOSAL OF ASSETS OR LOAN REIMBURSMENT 637
Tangible fixed assets 187
Loans 450
CHANGE IN WORKING CAPITAL (478)
------------
TOTAL (b) (10 920)
NET CASH PROVIDED BY FINANCING ACTIVITIES
New / (repayments) borrowings (3 997)
------------
TOTAL (c) (3 997)
Effect of variance in exchange rates (d) 13
------------
INCREASE / (DECREASE) IN CASH AND CASH EQUIVALENTS 745
(a)+(b)+(c)+(d)
Cash and cash equivalents at the beginning of the year 8 102
------------
CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR 8 847
============
</TABLE>
See notes to consolidated financial statements.
Prepared in accordance with accounting principles generally accepted in France.
7
<PAGE>
DUCROS GROUP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1999
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND PRACTICES
The consolidated financial statements are presented in accordance with the rules
and regulations in force in France.
From January, 1st 1999, the group is no longer allowed to apply the
International Accounting Standards Committee (IASC) accounting principles.
Indeed, the revised IAS 1, applicable this year, requires the use of the
wholeness of the IASC standards.
The French law on the consolidated accounts does not allow the groups to present
their financial statements only under the IASC GAAPs, as long as the article 6
of the law nDEG.98-261 of April, 6 1999, is not enter in force. This article
gives the possibility to some groups to apply IAS GAAPs, instead of the French
accounting rules.
However, the accounting principles applied to prepare the financial statements
are consistent with those applied in the previous financial statements.
a) PRINCIPLES OF CONSOLIDATION
The consolidation has been done from the financial accounts as of December, 31.
All the significant investments in which Ducros has an exclusive control,
directly or undirectly, are fully consolidated.
The companies in which there is a joint control are consolidated according to
the proportional integration method.
The companies in which Ducros has a significant influence and holds, directly or
indirectly, more than 20% of the shareholders' equity, are consolidated using
the equity method.
Certain investments although corresponding to the above criteria are not
consolidated, as they are not significant.
All significant intercompany balances and transactions have been eliminated in
consolidation.
b) FOREIGN CURRENCY TRANSLATION
The transactions made in foreign currencies are converted at the exchange rate
at the date of the transaction.
The payable and receivable in foreign currency are converted at the year-end
exchange rate, and the exchange gains and losses are recognized in the income
statement.
8
<PAGE>
The financial accounts of foreign subsidies are converted as follows :
Except the shareholders' equity, for which the historical rates are applied, the
balance sheet is converted in euros on the basis of the official exchange rates
at the end of the financial year. The income statement is converted using the
average exchange rate of the period.
The resulting exchange rate difference is recorded in the consolidated
shareholders' equity.
Before this, and according to their management method, the financial accounts of
the foreign subsidiaries located in countries with a high inflation rate, are
converted by using the year-end exchange rate - after having been restated by
the effects of the inflation, or reported in the functional currency.
c) INTANGIBLE FIXED ASSETS
The trademarks are not amortized due to their legal protection. In case of a
significant and durable downturn, it is possible to constitute a provision for
depreciation.
The other intangible fixed assets are amortized on a straight-line basis,
according to their useful life as follows :
Goodwill 20 years
Patents, licenses variable duration not exceeding 20 years
Start-up costs 3/5 years
Software variable duration not exceeding 5 years
d) RESEARCH AND DEVELOPMENT COSTS
The research and development costs are generally expenses in the year they are
incurred.
e) GOODWILL
The difference arising from the first consolidation of a subsidiary (excess of
purchase price compared to the restated net assets acquired) is allocated, if
any, to the appropriate captions of the consolidated balance sheet. The
allocation of this difference to the appropriate assets and liabilities is done
on a period that does not exceed the end of the first complete financial year
after the acquisition. The residual part constitutes the goodwill which is
amortized on a 20-year-period, except for specific cases, for which a shorter
duration can be justified (note 4). In case the fair value of the assets and
liabilities exceed this difference, the allocation is limited to the latest.
f) TANGIBLE FIXED ASSETS
The tangible fixed assets are recorded at their acquisition cost (note 5).
Amortization is calculated on a straight-line method over the estimated useful
lives of the assets.
The main asset lives are :
Industrial buildings 20-40 years
Machinery and equipments 5-10 years
Fixtures and fittings 10-20 years
Furniture 10 years
Cars and other vehicles 5 years
9
<PAGE>
Concerning assets used under capital leases, the purchase cost at the date of
signing of the contract is recorded in the fixed assets and amortized on a
straight-line basis, following the above presented method. The corresponding
debt is recorded in the liabilities.
The maintenance costs are expressed in the year they are incurred, except when
they contribute to improve the productivity or extend the useful life of the
asset.
g) NON CONSOLIDATED INVESTMENTS
These investments are stated at their acquisition cost ; less, if any,
provisions for depreciation. These depreciations take into account the share of
net equity and the potential future profitability, if any.
h) INVENTORIES AND WORK IN PROGRESS
Inventories and work in progress are valued at their production cost, without
exceeding the net realisable value. The production costs correspond essentially
to the weighted average costs.
i) GRANT
They are recorded in the liabilities and are writen-back in the income statement
at the same rate than the amortization of the tangible fixed assets to which
they are linked.
j) RETIREMENT COMMITMENTS AND RELATED ITEMS
The group records the amount of its retirement commitments, departure
indemnities and other related items (for the working employees as well as for
the retired employees).
k) TAXES
The amount of tax effectively due at the end of the financial year is corrected
by the deferred tax, which is calculated at the enacted tax rate on all
temporary differences between the accounting values and the tax values, as well
as on the consolidation entries. The deferred tax asset - as well as the
deferred tax related to the carried forward losses - calculated for each tax
entity, are recorded if the probability to recover them has been established.
Taxes from dividends distribution which will be paid in the following year are
accrued.
No provision related to the distributable retained earnings of the subsidiaries
is set up, as they are considered to be held permanently.
l) FINANCIAL INSTRUMENTS
In order to manage their exchange risk, the companies of the Ducros group use
various financial instruments.
The group policy is to reduce its exposure to the fluctuation of the exchange
rates and not to speculate.
The positions are negotiated on the markets over the counter, with first class
bank counterparts, or with companies of the Eridania Beghin-Say group.
The results made on the hedging instruments are booked according to the results
arised on the hedged items.
10
<PAGE>
All the transactions in progress at the year-end are mentioned as off-balance
sheet commitments, without any compensation.
The foreign exchange risks due to the trading activity are analysed and managed
as soon as they have been identified. Strategies of firm or optional hedgings
(forward purchases / sales) are implemented according to the probability of the
outcome of the risk, the anticipation of the evolution of the currencies and the
result of the term period (backward-forward).
m) CASH FLOW
Cash and equivalents includes cash and marketable securities, if any. The trade
notes given to the bank at the year-end, with maturity date after the year-end,
are stated under < < cash and equivalents > > caption.
2. CONSOLIDATION PERIMETER
a) EVOLUTION OF THE CONSOLIDATION PERIMETER
The 1999 consolidation perimeter is the same than for 1998, as no movement has
been occurred.
b) LIST OF CONSOLIDATED COMPANIES AS OF DECEMBER, 31 1999
<TABLE>
<CAPTION>
HEAD COUNTRY SIREN % OF % OF
OFFICE NUMBER CONTROL INTERESTS
-----------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
FULLY CONSOLIDATED
Ducros Carpentras France 622 980 027 100,00 100,00
Ducros Distribution Braine Belgium 100,00 100,00
Benelux L'alleud
Ducros Guadeloupe Baie France 342 032 729 100,00 100,00
Mahault
Ducros Margao Productos Alverca Portugal 100,00 100,00
Alimentares
Ducros SA Barcelone Spain 100,00 100,00
Ducros Reunion Le Port France 950 640 318 100,00 100,00
Alb Ducros Sarl Tirana Albania 100,00 100,00
Ducros srl Milan Italy 100,00 100,00
Ducros Polska Zoo Varsovie Poland 100,00 100,00
</TABLE>
11
<PAGE>
3. INTANGIBLE FIXED ASSETS
<TABLE>
<CAPTION>
IN THOUSANDS OF EUR GROSS VALUES AMORTIZATION NET VALUES NET VALUES
31.12.1999 31.12.1998
--------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Trademark 4 378 (31) 4 347 4 324
Software 4 281 (2 342) 1 939 2 273
Other 668 (56) 612 651
--------------------------------------------------------------------------
TOTAL 9327 (2 429) 6 898 7 248
==========================================================================
</TABLE>
4. GOODWILL
<TABLE>
<CAPTION>
IN THOUSANDS OF EUR GROSS VALUES AMORTIZATION NET VALUES NET VALUES
31.12.1999 31.12.1998
--------------------------------------------------------------------------
<S> <C> <C> <C> <C>
As of January, 1st 9 997 (2 473) 7 524 8 024
Amortization of the period - (500) (500) (500)
--------------------------------------------------------------------------
AS OF DECEMBER, 31 9 997 (2 973) 7 024 7 524
==========================================================================
</TABLE>
As at December, 31 1999, the balance of the goodwill, standing at kEUR 7 024
can be analysed as follows :
<TABLE>
<S> <C>
- Ducros SA (ex : Ducros Int. BV) 5 509
- Ducros Margao 1 472
- Ducros Italy 43
</TABLE>
5. TANGIBLE FIXED ASSETS
a) BY NATURE
<TABLE>
<CAPTION>
IN THOUSANDS OF EUR GROSS VALUES AMORTIZATION NET VALUES NET VALUES
31.12.1999 31.12.1998
--------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Lands 1 100 (40) 1 060 1 039
Buildings 24 083 (16 739) 7 344 8 432
Machinery and equipments 32 087 (20 293) 11 794 11 503
Other tangible fixed assets 6 186 (4 490) 1 696 2 056
Fixed assets in progress 3 784 - 3 784 1 761
--------------------------------------------------------------------------
TOTAL 67 240 (41 562) 25 678 24 791
==========================================================================
</TABLE>
12
<PAGE>
b) MOVEMENT OF THE YEAR
<TABLE>
<CAPTION>
IN THOUSANDS OF EUR 1999
-----------
<S> <C>
As of January, 1st 24 791
Evolution of the perimeter -
Investments of the period 6 771
Disposals (303)
Amortization (5 651)
Effect of the currencies exchange 70
-----------
AS OF DECEMBER, 31 25 678
===========
</TABLE>
6. NOT CONSOLIDATED INVESTMENTS
<TABLE>
<CAPTION>
IN THOUSANDS OF EUR % 1999 31.12.1999 31.12.1998
-------------------------------------------
<S> <C> <C> <C>
Cavasse/Mul 49,93 49 49
Dessert Products Int. 51,00 27 -
Other - 2 2
-------------------------------
TOTAL 78 51
===============================
</TABLE>
7. FINANCIAL FIXED ASSETS
<TABLE>
<CAPTION>
IN THOUSANDS OF EUR 31.12.1999 31.12.1998
----------------------------
<S> <C> <C>
Loans to the EBS subsidiaries 5 669 2 078
Loans with the non consolidated companies 205 205
Other 73 59
----------------------------
TOTAL 5 947 2 342
============================
</TABLE>
The loans with the non consolidated companies are only related to Cavasse/Mul.
8. INVENTORIES AND WORK IN PROGRESS
<TABLE>
<CAPTION>
IN THOUSANDS OF EUR GROSS VALUES AMORTIZATION NET VALUES NET VALUES
31.12.1999 31.12.1998
------------------------------------------------------------
<S> <C> <C> <C> <C>
Raw material 24 300 (1 213) 23 087 21 445
Work in progress 145 - 145 -
Finished goods 15 551 (336) 15 215 17 205
------------------------------------------------------------
TOTAL 39 996 (1 549) 38 447 38 650
============================================================
</TABLE>
13
<PAGE>
9. OTHER RECEIVABLE ACCOUNTS
<TABLE>
<CAPTION>
IN THOUSANDS OF EUR 31.12.1999 31.12.1998
-------------------------------------------
<S> <C> <C>
Receivable from French State 3 888 3 528
Advance to suppliers (raw material) 1 787 190
Other 197 184
-------------------------------------------
TOTAL 5 872 3 902
===========================================
</TABLE>
10. CHANGE IN SHAREHOLDERS' EQUITY
<TABLE>
<CAPTION>
IN THOUSANDS OF EUR EQUITY PREMIUM RETAINED ACCUMULATED NET RESULT TOTAL
EARNINGS EXCHANGE
DIFFERENCE
----------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
As of December, 31 1998 15 829 - 40 727 (1 662) 12 978 67 872
Allocation in retained earnings - - 12 978 - (12 978) -
Ducros shares - - - - - -
Paid dividends - - - - - -
Increase of capital - - - - - -
Result of the year - - - - 14 207 14 207
Exchange difference - - - 193 - 193
----------------------------------------------------------------------
AS OF DECEMBER, 31 1999 15 829 - 53 705 (1 469) 14 207 82 272
======================================================================
</TABLE>
11. PROVISIONS FOR RISKS AND CHARGES
<TABLE>
<CAPTION>
IN THOUSANDS OF EUR 31.12.1999 31.12.1998
-------------------------------------------
<S> <C> <C>
Retirement indemnities and related items (note a) 332 332
Deferred tax, net (note b) 1 755 2 247
Other risks and charges (note c) 4 173 4 018
-------------------------------------------
TOTAL 6 260 6 597
===========================================
</TABLE>
a) RETIREMENT INDEMNITIES
The provision for retirement indemnities of kEUR 332 relates to the Ducros
France company (444 employees as at December, 31 1999).
For the subsidiaries of the group, there is no provision, as there is no legal
obligation or they employee a small number of people.
Regarding the Italian subsidiary, an indemnity is due at the end of the contract
of an employee, which is recorded in < < other operating debt > >, for an amount
of kEUR 130 in 1999 and kEUR 111 in 1998.
b) DEFERRED TAX (NET)
The deferred tax amounts to kEUR 1 755 and it is composed of the following :
- France : 2 909
- Portugal : (356)
- Italy : (287)
14
<PAGE>
- Poland (379)
- Spain (132)
Concerning France, they are mainly related to regulatory provisions such as the
provision for increase in prices (kEUR 1 546) and to the excess of the
accelerated amortization (kEUR932). The balance is due to other restatements or
temporary difference.
Regarding the subsidiaries, the recorded deferred tax are linked to tax losses
carried forward.
c) OTHER RISKS AND CHARGES
This caption amounts to kEUR 4 173 and the breakdown is as follows :
<TABLE>
<S> <C> <C>
France : Business tax for displays 841
Potypara litigation 790
Litigations linked to employees 314
Tax audit 303
Belgium Tax litigation 345
Former Manager 192
Italy Retirement of commercial agents 259
----------
3044
Other risks and charges (< kEUR 200) 1 129*
----------
TOTAL 4 173
</TABLE>
* Including France 825, Belgium 151, Italy 51, Portugal 50, Albania 39,
Guadeloupe 13.
12. DEBTS
a) SCHEDULE
<TABLE>
<CAPTION>
IN THOUSANDS OF EUR BONDS OTHER LOANS TOTAL TOTAL
31.12.1999 31.12.1998
-----------------------------------------------------------
<S> <C> <C> <C> <C>
Less than one year - 7 412 7 412 11 227
One to five years - - - -
More than five years - - - -
-----------------------------------------------------------
TOTAL - 7 412 7 412 11 227
===========================================================
</TABLE>
b) FINANCIAL DEBT, NET
As of December, 31 1999, the net financial debt is negative (cash in hand) :
<TABLE>
<S> <C>
IN THOUSANDS OF EUR
Financial debt 7 412
Cash at bank and in hand (8 847)
Loan EBS subsidiaries (5 659)
-------
TOTAL (7 094)
</TABLE>
15
<PAGE>
13. OTHER OPERATING DEBT
<TABLE>
<CAPTION>
IN THOUSANDS OF EUR 31.12.1999 31.12.1998
---------------------------------------------
<S> <C> <C>
Debt to employees 3 065 2 802
Social and tax debt 4 198 3 715
Other 4 060 4 024
---------------------------------------------
TOTAL 11 323 10 541
=============================================
</TABLE>
14. TURNOVER BREAKDOWN
a) BY SECTOR
<TABLE>
<CAPTION>
IN THOUSANDS OF EUR 31.12.1999 31.12.1998
---------------------------------------------
<S> <C> <C>
Pepper, herbs and spices 142 700 132 021
Dessert aids 76 987 73 328
Other 27 091 30 732
---------------------------------------------
TOTAL 246 778 236 081
=============================================
</TABLE>
b) BY COUNTRY
<TABLE>
<CAPTION>
IN kEUR 31.12.1999 31.12.1998
---------------------------------------------
<S> <C> <C>
France 178 392 168 356
Other EU countries 55 642 55 348
Other European countries 3 704 4 077
North-America 628 440
Middle-East Africa 6 708 6 820
Rest of the world 1 704 1 040
---------------------------------------------
TOTAL 246 778 236 081
=============================================
</TABLE>
15. OTHER OPERATING INCOME
<TABLE>
<CAPTION>
IN kEUR 31.12.1999 31.12.1998
---------------------------------------------
<S> <C> <C>
Operating subsidies 7 13
Other income 275 206
---------------------------------------------
TOTAL 282 219
=============================================
</TABLE>
16. RESEARCH AND DEVELOPMENT COSTS
Research and development costs for the financial year 1999 amount to kEUR 1 200,
versus kEUR 1 103 in 1998.
17. EXCEPTIONAL RESULT
<TABLE>
<CAPTION>
IN THOUSANDS OF EUR 31.12.1999 31.12.1998
---------------------------------------------
<S> <C> <C>
Restructuring plan (278) (145)
Capital gain / (loss) on asset disposals (127) 10
16
<PAGE>
Other income / (charges), net (479) (990)
---------------------------------------------
TOTAL (884) (1 125)
=============================================
</TABLE>
< < Other income / (charges), net > > for 1998 includes an expense of kEUR (495)
related to a litigation between Ducros SA and Auchan.
18. INCOME TAX
a) ANALYSIS OF THE TAX CHARGES
<TABLE>
<CAPTION>
IN THOUSANDS OF EUR 31.12.1999 31.12.1998
---------------------------------------------
<S> <C> <C>
Income tax 1 475 943
Deferred tax (486) (36)
---------------------------------------------
Total 989 907
=============================================
</TABLE>
b) ANALYSIS OF THE EFFECTIVE RATE
The 1999 effective rate stands at 6,3% against 5,5% in 1998 and should be
analysed as follows :
<TABLE>
<CAPTION>
IN THOUSANDS OF EUR 31.12.1999 31.12.1998
---------------------------------------------
<S> <C> <C>
Legal income tax rate in France 33,3 33,3
Impact of the contribution 6,6 4,0
Use of tax losses carry forward (29,9) (32,1)
Other differences (3,7) 0,3
---------------------------------------------
TOTAL EFFECTIVE TAX 6,3 5,5
=============================================
</TABLE>
The use of tax losses carry forward relates mainly to Ducros SA for 25% in 1999
and 31% in 1998.
19. FINANCIAL COMMITMENTS
<TABLE>
<CAPTION>
IN THOUSANDS OF EUR 31.12.1999 31.12.1998
---------------------------------------------
<S> <C> <C>
Guarantees, deposits and counter- 578 517
guarantees in the favor of third parties
Forward purchases 7 694 13 809
</TABLE>
20. NUMBER OF EMPLOYEES
a) AVERAGE NUMBER OF EMPLOYEES DURING THE YEAR
<TABLE>
<CAPTION>
IN THOUSANDS OF EUR 31.12.1999 31.12.1998
---------------------------------------------
<S> <C> <C>
Managers 13 13
Other executives 124 123
Employees 353 359
Workers 279 307
---------------------------------------------
TOTAL 769 802
=============================================
</TABLE>
17
<PAGE>
b) NUMBER OF EMPLOYEES AT THE END OF THE YEAR BY COUNTRY
<TABLE>
<CAPTION>
IN THOUSANDS OF EUR 31.12.1999 31.12.1998
---------------------------------------------
<S> <C> <C>
France 483 500
Other EU union 172 184
Other European countries 75 73
Middle-East Africa 1 21
---------------------------------------------
TOTAL 731 778
=============================================
</TABLE>
21. KEY FIGURES BY SUBSIDIARY
<TABLE>
<CAPTION>
IN THOUSANDS OF EUR TURNOVER OPERATING TANGIBLE INVENTORIES TOTAL
RESULT FIXED ASSETS
ASSETS
--------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Ducros SA 1999 175 750 12 878 22 813 31 791 129 373
1998 164 587 14 961 21 623 31 294 112 547
Ducros Margao 1999 8 365 504 513 663 6 599
1998 8 825 719 643 1 042 7 252
Ducros 1999 8 303 540 175 1 226 3 040
Guadeloupe
1998 8 460 435 259 1 074 3 316
Ducros Reunion 1999 3 925 98 56 582 1 952
1998 3 968 78 80 829 2 103
Ducros 1999 20 017 2 174 595 1 138 10 471
Distribution
Benelux
1998 18 373 1 941 620 1 060 9 120
Ducros 1999 13 523 902 552 703 7 668
Distribution Spain
1998 13 483 614 565 806 6 713
Ducros 1999 10 306 415 188 291 6 587
Distribution Italy
1998 10 250 130 218 341 7 010
Ducros Albalia 1999 3 185 93 579 1 651 3 257
1998 4 706 339 562 1 902 2 942
Ducros Poland 1999 3 404 (683) 207 302 1 589
1998 3 429 (440) 221 302 1 207
TOTAL 1999 246 778 16 921 25 678 38 447 170 536
1998 236 081 18 777 24 791 38 550 152 210
</TABLE>
18
<PAGE>
BUSINESS: SODIS S.A.S.
INDEPENDENT ACCOUNTANT'S REPORT
In fulfillment of the assignment decided by your general meeting, we have
audited the consolidated financial statements of Sodis established in euros for
the financial year-end December, 31 1999, as presented in this report.
These consolidated financial statements are the responsibility of the Eridania
Beghin-Say's management. Our responsibility is to express an opinion on these
consolidated financial statements based on our audits.
We conducted our audit in accordance with the 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
misstatements. 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 consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Sodis and its
subsidiaries as of December, 31 1999.
Le Commissaire aux Comptes
Deloitte Touche Tohmatsu - Audit
Neuilly, May, 11 2000
/s/ Arnaud de Planta
19
<PAGE>
SODIS GROUP
CONSOLIDATED BALANCE SHEET
<TABLE>
<CAPTION>
IN THOUSANDS OF EUR DECEMBER 31, DECEMBER 31,
1999 1999
----------------------------------------------------------- ---------------------------------------------------------
<S> <C> <C> <C>
Intangible assets 2 SHAREHOLDERS' EQUITY
Goodwill - Share capital 46
PROPERTY, PLANT AND EQUIPMENT Retained earnings (80)
Gross value 342 Net income 84
Accumulated amortization (251)
--------------------
--------------------
TOTAL TANGIBLE FIXED ASSETS 91 TOTAL SHAREHOLDERS' EQUITY FOR 50
THE SHARE OF THE GROUP
FINANCIAL FIXED ASSETS Minority interest -
Deposits 38
Provisions for risks and charges 3
--------------------
TOTAL FINANCIAL FIXED ASSETS 38
Borrowings 772
--------------------
TOTAL FIXED ASSETS 131
Inventories and work in progress 5
Trade accounts receivable 621 Trade accounts payable 444
Other receivable 237 Other operating debt 944
--------------------
TOTAL RECEIVABLE 858
--------------------
TOTAL 1 388
Other receivable 511
Cash at bank and in hand 661
--------------------
CURRENT ASSETS 2 035
Prepaid and other 47
-------------------- --------------------
TOTAL ASSETS 2 213 TOTAL LIABILITIES 2 213
==================== ====================
</TABLE>
See notes to consolidated financial statements.
Prepared in accordance with accounting principles generally accepted in France.
20
<PAGE>
SODIS GROUP
CONSOLIDATED INCOME STATEMENT
FOR THE YEAR ENDED DECEMBER 31, 1999
<TABLE>
<CAPTION>
IN THOUSANDS OF EUR 1999
---------------------------------------------------------------------------------------
<S> <C>
OPERATING INCOME
Turnover 6 364
Other operating income 56
------------
TOTAL OPERATING INCOME 6 420
OPERATING EXPENSES
Wages and social security 4 286
Amortization charge 27
Other operating costs 2 060
------------
TOTAL OPERATING EXPENSES 6 373
------------
OPERATING RESULT 47
Financial result 55
------------
OPERATING RESULT BEFORE INCOME TAX 102
Exceptional result (2)
Income tax (16)
Minority interest -
------------
CONSOLIDATED NET RESULT FOR THE SHARE OF THE GROUP 84
============
</TABLE>
See notes to consolidated financial statements.
Prepared in accordance with accounting principles generally accepted in France.
21
<PAGE>
SODIS GROUP
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED DECEMBER 31, 1999
<TABLE>
<CAPTION>
IN THOUSANDS OF EUR 1999
---------------------------------------------------------------------------------------
<S> <C> <C>
NET CASH PROVIDED BY OPERATING ACTIVITIES
Operating result 47
Amortization charge 27
Write on / (write back) for operating reserves (14)
------------
EBITDA 60
------------
OPERATING CASH FLOW 60
Financial result 55
Income tax (16)
Proceeds of change in cash adjustments 21
------------
TOTAL (a) 120
NET CASH FROM INVESTING ACTIVITIES
CAPITAL EXPENDITURES
Tangible fixed assets (27)
------------
TOTAL (b) (27)
NET CASH PROVIDED BY FINANCING ACTIVITIES
New / (repayments) borrowings (354)
------------
TOTAL (c) (354)
------------
INCREASE / (DECREASE) IN CASH AND CASH EQUIVALENTS (261)
(a)+(b)+(c)
Cash and cash equivalents at the beginning of the year 922
------------
CASH AND CASH EQUIVALENT AT THE END OF THE YEAR 661
============
</TABLE>
See notes to consolidated financial statements.
Prepared in accordance with accounting principles generally accepted in France.
22
<PAGE>
SODIS GROUP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1999
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND PRACTICES
The consolidated financial statements are presented in accordance with the rules
and regulations in force in France.
a) PRINCIPLES OF CONSOLIDATION
The consolidation has been done from the financial accounts as of December, 31.
All the significant investments in which Sodis has an exclusive control,
directly or undirectly, are fully consolidated.
All significant intercompany balances and transactions have been eliminated in
consolidation.
b) FOREIGN CURRENCY TRANSLATION
The transactions made in foreign currencies are converted at the exchange rate
at the date of the transaction.
The payable and receivable in foreign currency are converted at the year-end
exchange rate, and the exchange gains and losses are recognized in the income
statement.
c) INTANGIBLE FIXED ASSETS
The intangible fixed assets are amortized on a straight-line basis, according to
their useful life as follows :
Goodwill 20 years
Patents, licenses variable duration not exceeding 20 years
Start-up costs 3/5 years
Software variable duration not exceeding 5 years
d) TANGIBLE FIXED ASSETS
The tangible fixed assets are recorded at their acquisition cost.
Amortization is calculated on a straight-line method over the estimated useful
lives of the assets.
The main asset lives are :
Industrial buildings 20-40 years
Machinery and equipments 5-10 years
Fixtures and fittings 10-20 years
Furniture 10 years
Cars and other vehicles 5 years
The maintenance costs are expressed in the year they are incurred, except when
they contribute to improve the productivity or extend the useful life of the
asset.
23
<PAGE>
e) INVENTORIES AND WORK IN PROGRESS
Inventories and work in progress are valued at their production cost, without
exceeding the net realisable value. The production cost correspond essentially
to the weighted average costs.
f) RETIREMENT COMMITMENTS AND RELATED ITEMS
The group has no commitment in terms of retirement and related items, because
there is no legal or contractual obligation.
g) CASH FLOW
The < < cash at bank and in hand > > includes only cash.
2. CONSOLIDATION PERIMETER
LIST OF CONSOLIDATED COMPANIES AS OF DECEMBER, 31 1999
<TABLE>
<CAPTION>
HEAD OFFICE COUNTRY SIREN NUMBER % OF % OF
CONTROL INTERESTS
-----------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Fully consolidated
Sodis Monteux France 100,00 100,00
Sarl Ouest Distribution services Suresnes France 32375113100018 100,00 100,00
Sarl Bretagne Distribution Suresnes France 32737660400077 100,00 100,00
Sarl AMS Vandoeuvre N. France 31648883200064 100,00 100,00
Sarl Paris Sud Distribution Suresnes France 32978041500066 100,00 100,00
Sarl Promalp Avignon France 32829887200081 100,00 100,00
Snc Soreme Suresnes France 33438042500089 100,00 100,00
Snc Ile de France Distribution Gennevilliers France 33525836400033 100,00 100,00
Snc Paris Nord Distribution Suresnes France 31656081200075 100,00 100,00
</TABLE>
3. TANGIBLE FIXED ASSETS
a) BY NATURE
<TABLE>
<CAPTION>
IN THOUSANDS OF EUR GROSS VALUES AMORTIZATION NET VALUES
31.12.1999
----------------------------------------------------------------
<S> <C> <C> <C>
Buildings 42 (25) 17
Machinery and equipments 83 (67) 16
Other tangible fixed assets 217 (159) 58
----------------------------------------------------------------
TOTAL 342 (251) 91
================================================================
</TABLE>
24
<PAGE>
b) MOVEMENTS OF THE YEAR 1999
<TABLE>
<CAPTION>
IN THOUSANDS OF EUR 1999
-------------
<S> <C>
As of January, 1st 91
Investments of the period 27
Amortization (27)
-------------
AS OF DECEMBER, 31 91
=============
</TABLE>
4. CHANGE IN SHAREHOLDERS' EQUITY
<TABLE>
<CAPTION>
IN THOUSANDS OF EUR 01.01.1999 NET INCOME RETAINED
AFTER EARNINGS
IMPUTATION
--------------------------------------------------
<S> <C> <C> <C>
Shareholders' equity 46 - 46
Retained earnings (80) - (80)
Net income - 84 84
--------------------------------------------------
(34) 84 50
==================================================
</TABLE>
5. DEBTS
a) SCHEDULE
<TABLE>
<CAPTION>
IN THOUSANDS OF EUR BONDS OTHER LOANS TOTAL
31.12.1999
--------------------------------------------------
<S> <C> <C> <C>
Less than one year - 772 772
One to five years - - -
More than five years - - -
--------------------------------------------------
TOTAL - 772 772
==================================================
</TABLE>
b) FINANCIAL DEBT, NET
As of December, 31 1999, the net financial debt is negative (cash) :
<TABLE>
IN THOUSANDS OF EUR
<S> <C>
Financial debt 772
Cash at bank and in hand (661)
Various receivable (Ducros loan) (511)
-----
TOTAL (400)
</TABLE>
25
<PAGE>
6. NUMBER OF EMPLOYEES
AVERAGE NUMBER OF EMPLOYEES DURING THE YEAR (BY COMPANY)
<TABLE>
<CAPTION>
IN THOUSANDS OF EUR 31.12.1999
-------------------
<S> <C>
Sodis -
Promalp 33
Sarl Paris Sud Distribution 20
Ouest Distribution 25
Bretagne Distribution 25
AMS 12
Soreme 23
Ile de France Distribution 20
Paris Nord Distribution 11
-------------------
TOTAL 169
===================
</TABLE>
7. KEY FIGURES BY SUBSIDIARY
<TABLE>
<CAPTION>
IN THOUSANDS OF EUR TURNOVER OPERATING TANGIBLE TOTAL
RESULT FIXED ASSETS
ASSETS
--------------------------------------------------------
<S> <C> <C> <C> <C>
Sodis - (10) - 136
Promalp 1 179 (6) 13 202
Paris Sud Distribution 928 2 30 356
Paris Nord Distribution 397 (10) 3 413
Sodis Ile de France 959 60 35 335
Soreme 785 6 2 142
AMS 429 (3) 2 190
Bretagne Distribution 860 2 4 166
Ouest Distribution Services 827 6 2 273
--------------------------------------------------------
TOTAL 6 364 47 91 2 213
========================================================
</TABLE>
26
<PAGE>
DUCROS - RECONCILIATION TO ACCOUNTING PRINCIPLES GENERALLY ACCEPTED IN THE
UNITED STATES The accounting principles generally accepted in France that
were used in Ducros' historical financial statements differ from accounting
principles generally accepted in the United States ("US GAAP"). Differences
that have a material effect on Consolidated Net Income and Shareholders'
Equity are described below:
Accounting for retirement indemnities - Certain retirement indemnities are not
accrued in the Ducros historical financial statement and are required under US
GAAP.
Accounting for brand intangible assets - Under the accounting principles
generally accepted in France, brand intangible assets are not amortized. Under
US GAAP, these assets are assumed to be amortized over 40 years.
Accounting for income taxes - Accounting principles generally accepted in
France record income taxes in a manner similar to US GAAP. However, certain
deferred tax assets are not recognized.
The following table summarizes the significant adjustments to Ducros'
consolidated net income and shareholders' equity which would be required if US
GAAP had been applied instead of the accounting principles generally accepted
in France.
<TABLE>
<CAPTION>
Shareholders' Equity Net Income
as of for the year ended
(in thousands of EUR) December 31, 1999 December 31, 1999
<S> <C> <C>
Per accounting principles generally
accepted in France 82,272 14,207
Retirement indemnity (1,336)
Brand intangible assets (675) (129)
Deferred income taxes 1,255 (312)
------- -------
Per US GAAP 81,516 13,766
------- -------
</TABLE>
SODIS - RECONCILIATION TO ACCOUNTING PRINCIPLES GENERALLY ACCEPTED IN THE
UNITED STATES The accounting principles generally accepted in France that
were used in Sodis' historical financial statements do not differ materially
from US GAAP.
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to use of our reports dated May 11, 2000, with respect to the
financial statements prepared in accordance with generally accepted accounting
principles in France of Ducros and Sodis included in the Current Report on Form
8-K, as amended by Form 8-K/A, of McCormick & Company, Incorporated dated
November 10, 2000 and incorporated by reference in all currently effective
Registration Statements of McCormick & Company, Inc. on Form S-3 and on Form S-8
(including any Post Effective Amendments thereto) filed on or before.
November 10, 2000
Deloitte Touche Tohmatsu - Audit
/s/ Arnaud de Planta
27
<PAGE>
ITEM 7(b): PRO FORMA FINANCIAL INFORMATION.
The following unaudited pro forma condensed combined balance sheet (balance
sheet) as of May 31, 2000, and the unaudited pro forma condensed combined
statements of income for the year ended November 30, 1999, and for the six
months ended May 31, 2000, (statements of operations), give effect to the
acquisition, by McCormick & Company, Incorporated (the Company), of the share
capital of Ducros, S.A. ("Ducros") and Sodis, S.A.S. ("Sodis") (Collectively
referred to as Consolidated Ducros and Sodis) from Eridania Beghin-Say, S.A. The
acquisition is being accounted for using the purchase method of accounting.
The pro forma financial information is based on historical results of the
combined entities and will not necessarily be reflective of results that will
be achieved by the combined entities in the future. Some factors that will
give rise to a difference between these pro forma results and actual results
are: changes in the financial performance of the acquired businesses, foreign
currency exchange rates (particularly the Euro), and synergy savings in the
combined entity.
The pro forma combined condensed balance sheet presents the financial position
of the Company, Ducros, and Sodis as of May 31, 2000, assuming the acquisition
occurred as of that date. The pro forma combined condensed statements of income
have been prepared assuming the acquisition occurred as of the beginning of the
periods presented. The acquisition actually occurred on August 31, 2000.
The pro forma financial information reflects pro forma adjustments that are
based upon available information and which the Company believes are reasonable.
The pro forma financial information does not necessarily reflect the results of
operations or financial position of the Company that actually would have
resulted had the transaction, which pro forma effect is given, been consummated
as of the date or for the period indicated. Additionally, the pro forma combined
condensed financial statements have been prepared on the basis of preliminary
estimates of the fair value of the assets acquired and may change as valuations
are completed and more facts become known.
This information should be read in conjunction with the previously filed Form
8-K, dated September 14, 2000, the previously filed historical consolidated
financial statements and accompanying notes of the Company, contained in its
Annual Report on Form 10-K for the fiscal year ended November 30, 1999, and
in its 2000 Quarterly Reports on Form 10-Q, and in conjunction with the
historical financial statements and accompanying notes of Ducros and Sodis
included elsewhere in this Form 8-K/A.
28
<PAGE>
MCCORMICK AND COMPANY, INCORPORATED
PRO FORMA CONDENSED COMBINED STATEMENT OF INCOME, UNAUDITED FOR THE
YEAR ENDED NOVEMBER 30, 1999
<TABLE>
<CAPTION>
HISTORICAL
MCCORMICK CONSOLIDATED PRO FORMA
in millions US$, except per share AND COMPANY DURCROS & SODIS ADJUSTMENTS PRO FORMA
--------------- ----------------- ------------- --------------
<S> <C> <C> <C> <C>
Net sales $ 2,006.9 $ 263.4 $ 2,270.3
Cost of good sold 1,289.7 102.2 1,391.9
--------------- ----------------- ------------- --------------
GROSS PROFIT 717.2 161.2 878.4
Selling, general and administrative expenses 522.3 143.7 6.0 (a)(b) 672.0
Special charges (credits) 18.0 - 18.0
--------------- ----------------- ------------- --------------
OPERATING INCOME 176.9 17.5 (6.0) 188.4
Interest expense 32.4 0.4 28.4 (c) 61.2
Other (income) expense, net (5.5) 0.9 (4.6)
--------------- ----------------- ------------- --------------
Income from consolidated continuing operations
before income taxes 150.0 16.2 (34.4) 131.8
Income taxes 60.1 1.1 (4.6)(d) 56.6
--------------- ----------------- ------------- --------------
Net income from consolidated continuing operations 89.9 15.1 (29.8) 75.2
Income from unconsolidated operations 13.4 - 13.4
--------------- ----------------- ------------- --------------
NET INCOME $ 103.3 $ 15.1 $ (29.8) $ 88.6
--------------- ----------------- ------------- --------------
Average shares outstanding, fully diluted 72.0 72.0
EPS FULLY DILUTED $ 1.43 $ 1.23
</TABLE>
The accompanying notes are an integral part of these pro forma condensed
combined financial statements.
29
<PAGE>
MCCORMICK AND COMPANY, INCORPORATED
PRO FORMA CONDENSED COMBINED STATEMENT OF INCOME, UNAUDITED
FOR THE SIX MONTHS ENDED MAY 31, 2000
<TABLE>
<CAPTION>
HISTORICAL
MCCORMICK CONSOLIDATED PRO FORMA
in millions US$, except per share AND COMPANY DURCROS & SODIS ADJUSTMENTS PRO FORMA
--------------- ----------------- ------------- --------------
<S> <C> <C> <C> <C>
Net sales $ 948.1 $ 110.0 $ 1,058.1
Cost of good sold 613.8 42.7 656.5
--------------- ----------------- ------------- --------------
GROSS PROFIT 334.3 67.3 401.6
Selling, general and administrative expenses 253.7 60.6 3.1 (a)(b) 317.4
Special charges (credits) 1.0 - 1.0
--------------- ----------------- ------------- --------------
OPERATING INCOME 79.6 6.7 (3.1) 83.2
Interest expense 15.7 - 14.2 (c) 29.6
Other (income) expense, net 2.7 0.8 3.5
--------------- ----------------- ------------- --------------
Income from consolidated continuing operations
before income taxes 61.2 5.9 (17.3) 49.8
Income taxes 21.8 0.8 (3.6)(d) 19.0
--------------- ----------------- ------------- --------------
Net income from consolidated continuing operations 39.4 5.1 (13.7) 30.8
Income from unconsolidated operations 9.2 - 9.2
--------------- ----------------- ------------- --------------
NET INCOME $ 48.6 $ 5.1 $ (13.7) $ 40.0
Average shares outstanding, fully diluted 69.6 69.6
EPS FULLY DILUTED $ 0.70 $ 0.58
</TABLE>
The accompanying notes are an integral part of these pro forma condensed
combined financial statements.
30
<PAGE>
MCCORMICK AND COMPANY, INCORPORATED
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET, UNAUDITED
AS OF MAY 31, 2000
<TABLE>
<CAPTION>
HISTORICAL
MCCORMICK CONSOLIDATED PRO FORMA
in millions US$ AND COMPANY DURCROS & SODIS ADJUSTMENTS PRO FORMA
--------------- ----------------- ------------- --------------
<S> <C> <C> <C> <C>
Cash $ 28.4 $ 15.7 $ (9.0)(f) $ 35.1
Accounts receivable, net 175.2 53.4 228.6
Inventories 252.0 41.1 293.1
Other current assets 19.2 11.8 31.0
--------------- ----------------- ------------- --------------
Total current assets 474.8 122.0 (9.0) 587.8
PP&E, net 356.5 24.7 381.2
Intangible assets, net 138.1 21.5 290.8 (e)(h) 450.4
Prepaid allowances 124.1 - 124.1
Other assets 101.8 16.6 118.4
--------------- ----------------- ------------- --------------
Total assets $ 1,195.3 $ 184.8 $ 281.8 $ 1,661.9
=============== ================= ============= ==============
Short-term borrowings $ 196.4 $ 6.9 $ 203.3
Current portion of long-term debt 5.8 - 5.8
Trade AP 143.5 61.6 205.1
Other accrued liabilities 181.0 12.0 6.1 (e) 199.1
--------------- ----------------- ------------- --------------
Total current liabilities 526.7 80.5 6.1 613.3
Long-term debt 235.1 3.7 369.9 (f) 608.7
Other long-term liabilities 99.1 6.4 105.5
--------------- ----------------- ------------- --------------
Total liabilities 860.9 90.6 376.0 1,327.5
Common stock, no par; 160.0 authorized 50.1 - 50.1
Common stock, non-voting, 160 authorized 123.7 28.3 (28.3)(g) 123.7
Retained earnings 202.9 65.9 (65.9)(g) 202.9
Accumulated other comprehensive income (42.3) 0.0 (0.0) (42.3)
--------------- ----------------- ------------- --------------
Total shareholders' equity 334.4 94.2 (94.2) 334.4
Total liabilities & shareholders' equity $ 1,195.3 $ 184.8 $ 281.8 $ 1,661.9
=============== ================= ============= ==============
</TABLE>
The accompanying notes are an integral part of these pro forma condensed
combined financial statements.
31
<PAGE>
ITEM 7 (b). Notes to Unaudited Pro Forma Condensed Combined Financial
Statements. (columnar amounts in millions of US$)
Pro Forma Condensed Combined Statements of Income :
(a) To reflect the amortization of $312.3 million of goodwill
which the Company will amortize over 40 years and eliminate
goodwill amortization included in the Consolidated Ducros
and Sodis historical financial statements. Pro forma
amortization for each period is as follows:
- $3.8 million for the six months ended May 31, 2000
- $8.3 million for the year ended November 31, 1999
(b) To reflect the elimination of management fees charged by the prior
owner, net of incremental costs to be incurred in lieu of these
services. . Pro forma amounts for each period is as follows:
- $0.7 million for the six months ended May 31, 2000
- $2.4 million for the year ended November 31, 1999
(c) To reflect the additional net interest expense based on a $379
million purchase price and based on the Company's intent to
finance the acquisition with 7.5% medium term notes.
(d) To reflect the tax effect of these pro forma adjustements based on
the effective rate applicable to each adjustment. Also, to adjust
the consolidated Ducros and Sodis taxes to their effective rate,
which had previously been calculated as part of their parent
company's consolidated tax return. Goodwill is reflected as a
non-deductible expense for tax purposes.
Pro Forma Condensed Consolidated Balance Sheet :
(e) The Company has not completed the final assessment of the fair
value of Ducros and Sodis fixed assets and other identifiable
assets and liabilities assumed for the purpose of allocating
the purchase price. As a result, certain of the allocations are
estimates and are subject to revision once the final
assessments are completed. The following summarizes the
preliminary estimated goodwill assuming a purchase date of
May 31, 2000:
<TABLE>
<S> <C>
Purchase price $ 378.9
Less tangible net assets acquired 72.7
Plus accrued expenses 6.1
---------
Total estimated goodwill $ 312.3
</TABLE>
(f) To reflect the long-term debt and cash required to finance the
acquisition.
(g) To eliminate the shareholders' equity accounts of the acquired
businesses.
(h) To eliminate the $21.5 million intangible assets of the
acquired businesses.
32
