<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 For the quarterly period ended July 2, 1999
or
[_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from _________________ to _________________
Commission File Number: 0-19887
WORTHINGTON FOODS, INC.
-----------------------
(Exact name of registrant as specified in its charter)
OHIO 31-0733120
- ------------------------ ------------------------------------
(State of incorporation) (IRS Employer Identification Number)
900 PROPRIETORS ROAD, WORTHINGTON, OH 43085
-------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (614) 885-9511
Not Applicable
----------------------------------------------------
(Former name, former address and formal fiscal year,
if changed since last report.)
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 the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.
Class Outstanding at August 9, 1999
- --------------------------- -----------------------------
Common shares, no par value 12,380,296
Exhibit Index at Page 15
Page 1 of 17
<PAGE> 2
<TABLE>
WORTHINGTON FOODS, INC. AND SUBSIDIARY
INDEX
<CAPTION>
Page No.
--------
<S> <C> <C>
PART I FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Consolidated Balance Sheets -
July 2, 1999 and December 31, 1998.................................................... 3-4
Condensed Consolidated Statements of Income -
For the three month and six month periods ended July 2, 1999 and July 3, 1998......... 5
Condensed Consolidated Statements of Cash Flows -
For the six month periods ended July 2, 1999 and July 3, 1998......................... 6
Notes to Condensed Consolidated Financial Statements.................................... 7
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations.............................................................. 8-12
Item 3. Quantitative and Qualitative Disclosures about Market Risk................................ 12
PART II OTHER INFORMATION......................................................................... 13
Item 1. Legal Proceedings....................................................................... 13
Item 2. Changes in Securities and Use of Proceeds............................................... 13
Item 3. Defaults Upon Senior Securities......................................................... 13
Item 4. Submission of Matters to a Vote of Security Holders..................................... 13
Item 5. Other Information....................................................................... 13
Item 6. Exhibits and Reports on Form 8-K........................................................ 13
Signature ........................................................................................ 14
Exhibit Index....................................................................................... 15
Exhibit 11 - Computation of Earnings Per Share................................................ 16
Exhibit 27 - Financial Data Schedule.......................................................... 17
</TABLE>
- 2 -
<PAGE> 3
ITEM 1.
FINANCIAL STATEMENTS
- --------------------
<TABLE>
WORTHINGTON FOODS, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED BALANCE SHEETS
<CAPTION>
7/2/99 12/31/98
------ --------
(UNAUDITED) (AUDITED)
(000'S OMITTED)
<S> <C> <C>
ASSETS
Current Assets
Cash .................................................... $ 2,628 $ 1,054
Accounts receivable less allowance
(1999 - $160; 1998 - $100)............................. 13,000 13,109
Inventories:
Finished goods ....................................... 21,739 18,032
Work in process ...................................... 2,438 1,690
Raw materials ........................................ 6,449 4,872
Packaging materials and supplies ..................... 3,123 2,357
-------- --------
33,749 26,951
Income taxes refundable ................................. 1,011 1,686
Prepaid expenses and other .............................. 7,736 4,936
-------- --------
Total Current Assets ................................. 58,124 47,736
Property, Plant and Equipment ........................... 101,182 93,397
Less accumulated depreciation and amortization ....... 33,530 30,860
-------- --------
67,652 62,537
Goodwill ................................................ 191 352
Trade name .............................................. 8,199 8,409
Intangible pension asset ................................ 1,227 1,227
Other intangible assets ................................. 802 688
-------- --------
10,419 10,676
TOTAL ASSETS ................................... $136,195 $120,949
======== ========
</TABLE>
The accompanying notes are an integral part of the condensed consolidated
financial statements.
- 3 -
<PAGE> 4
<TABLE>
WORTHINGTON FOODS, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED BALANCE SHEETS
<CAPTION>
7/2/99 12/31/98
------ --------
(UNAUDITED) (AUDITED)
(000'S OMITTED)
<S> <C> <C>
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Accounts payable (including outstanding checks of $2,001 in
1999 and $2,634 in 1998) ...................................... $ 7,117 $ 7,959
Accrued compensation ................................................ 730 765
Other accrued expenses .............................................. 5,390 2,658
Current portion of long-term debt and capital lease obligations ..... 800 800
-------- --------
Total Current Liabilities ........................................ 14,037 12,182
Long-Term Liabilities
Long-term debt and capital lease obligations ........................ 35,833 26,583
Intangible pension asset ............................................ 1,395 1,395
Deferred income taxes ............................................... 8,307 8,000
-------- --------
Total Long-Term Liabilities ...................................... 45,535 35,978
Shareholders' Equity
Preferred shares, no par value, authorized 2,000,000 shares,
none issued .................................................... -- --
Common shares, $1.00 stated value, authorized 30,000,000 shares,
issued 12,380,296 shares in 1999 and 12,346,440 in 1998 ........ 12,380 12,356
Additional paid-in capital .......................................... 19,028 18,931
Accumulated other comprehensive income .............................. (168) (168)
Retained earnings ................................................... 45,383 41,670
-------- --------
76,623 72,789
-------- --------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY ....................... $136,195 $120,949
======== ========
</TABLE>
The accompanying notes are an integral part of the condensed consolidated
financial statements.
- 4 -
<PAGE> 5
<TABLE>
WORTHINGTON FOODS, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
7/2/99 7/3/98 7/2/99 7/3/98
------ ------ ------ ------
(UNAUDITED)
(000'S OMITTED, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C>
Net sales ............................... $45,951 $36,038 $82,759 $67,348
Cost of goods sold ...................... 25,794 19,814 46,789 37,777
------- ------- ------- -------
Gross profit ......................... 20,157 16,224 35,970 29,571
Selling and distribution expenses ....... 14,256 9,634 25,013 17,523
General and administrative expenses ..... 1,221 866 2,431 1,825
Research and development expenses ....... 394 420 846 812
------- ------- ------- -------
15,871 10,920 28,290 20,160
------- ------- ------- -------
Income from operations .................. 4,286 5,304 7,680 9,411
Interest expense ........................ 498 440 1,010 891
------- ------- ------- -------
Income before income taxes .............. 3,788 4,864 6,670 8,520
Provision for income taxes .............. 1,243 1,994 2,425 3,493
------- ------- ------- -------
Net income .............................. $ 2,545 $ 2,870 $ 4,245 $ 5,027
======= ======= ======= =======
Earnings per share:
Basic .............................. $ 0.21 $ 0.25 $ 0.34 $ 0.43
======= ======= ======= =======
Diluted ............................ $ 0.20 $ 0.24 $ 0.34 $ 0.42
======= ======= ======= =======
Dividends per share ..................... $0.0215 $0.0215 $ 0.043 $ 0.043
======= ======= ======= =======
Weighted average number of common
and common equivalent shares used in
computing earnings per share
Basic............................... 12,379,979 11,723,816 12,376,352 11,683,762
Diluted............................. 12,514,517 12,088,541 12,504,563 12,024,979
</TABLE>
The accompanying notes are an integral part of the condensed consolidated
financial statements.
- 5 -
<PAGE> 6
<TABLE>
WORTHINGTON FOODS, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
<CAPTION>
SIX MONTHS ENDED
-------------------------
7/2/99 7/3/98
------ ------
(UNAUDITED)
(000'S OMITTED)
<S> <C> <C>
Operating activities:
Net income ................................................................ $ 4,245 $ 5,027
Adjustments to reconcile net income to net cash provided
by operating activities:
Depreciation ........................................................... 2,968 2,645
Deferred income taxes .................................................. 307 308
Amortization of intangible assets ...................................... 371 161
Cash provided by (used for) current assets and liabilities:
Accounts receivable ................................................... 109 154
Inventories ........................................................... (6,798) (6,423)
Prepaid expenses and other ............................................ (2,800) (1,137)
Accounts payable and accrued expenses ................................. 1,855 2,691
Income taxes .......................................................... 675 1,023
(Increase) decrease in other assets ..................................... (114) 37
-------- --------
Net cash provided by operating activities ................................. 818 4,486
Investing activities:
Purchases of property, plant and equipment, net ........................... (8,083) (3,021)
-------- --------
Net cash used for investing activities .................................... (8,083) (3,021)
Financing activities:
Proceeds from long-term borrowings ........................................ 39,875 24,200
Payments on long-term borrowings .......................................... (30,625) (24,884)
Proceeds from the issuance of common shares ............................... 121 529
Dividends paid ............................................................ (532) (503)
-------- --------
Net cash provided by (used for) financing activities ...................... 8,839 (658)
Net increase in cash ........................................................ 1,574 807
Cash at beginning of period ................................................. 1,054 714
-------- --------
Cash at end of period ....................................................... $ 2,628 $ 1,521
======== ========
</TABLE>
The accompanying notes are an integral part of the condensed consolidated
financial statements.
- 6 -
<PAGE> 7
WORTHINGTON FOODS, INC. AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
1. The accompanying condensed consolidated financial statements (unaudited)
include the accounts of Worthington Foods, Inc. and Subsidiary.
The information furnished reflects all adjustments (all of which were of a
normal recurring nature) which are, in the opinion of management, necessary
to fairly present the condensed consolidated financial position, results of
operations, and cash flows on a consistent basis. Operating results for the
three month and six month periods ended July 2, 1999 are not necessarily
indicative of the results that may be expected for the year ended December
31, 1999.
The accompanying condensed consolidated financial statements (unaudited)
are presented in accordance with the requirements for Form 10-Q and
consequently do not include all the disclosures normally required by
generally accepted accounting principles. Reference should be made to the
Company's Form 10-K for the fiscal year ended December 31, 1998 (File No.
0-19887) for additional disclosures including a summary of the Company's
accounting policies, which have not significantly changed. The Company's
policy is that each fiscal year includes four, thirteen week periods.
2. The Board of Directors at its July 20, 1999 meeting declared a $0.0215 per
share dividend payable October 30, 1999 to shareholders of record September
18, 1999.
- 7 -
<PAGE> 8
ITEM 2.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
- --------------------------------------------------------------------------
OPERATIONS
- ----------
RESULTS OF OPERATIONS
The following table sets forth selected items from the Company's Condensed
Consolidated Statements of Income expressed as a percentage of net sales for the
periods indicated.
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
------------------ ----------------
7/2/99 7/3/98 7/2/99 7/3/98
------ ------ ------ ------
<S> <C> <C> <C> <C>
Net sales ...................................... 100.0% 100.0% 100.0% 100.0%
Cost of goods sold ............................. 56.1 55.0 56.5 56.1
----- ----- ----- -----
Gross profit ................................. 43.9 45.0 43.5 43.9
Selling and distribution expenses .............. 31.0 26.7 30.2 26.0
General and administrative expenses ............ 2.7 2.4 3.0 2.7
Research and development expenses .............. 0.9 1.2 1.0 1.2
----- ----- ----- -----
34.6 30.3 34.2 29.9
----- ----- ----- -----
Income from operations ......................... 9.3 14.7 9.3 14.0
Interest expense ............................... 1.1 1.2 1.2 1.3
----- ----- ----- -----
Income before income taxes ..................... 8.2 13.5 8.1 12.7
Provision for income taxes ..................... 2.7 5.5 3.0 5.2
----- ----- ----- -----
Net income ..................................... 5.5% 8.0% 5.1% 7.5%
===== ===== ===== =====
Provision for income taxes as a percentage
of income before income taxes .................. 32.9% 41.0% 36.4% 41.0%
===== ===== ===== =====
</TABLE>
SECOND QUARTER OF 1999 COMPARED TO 1998
Net sales for the second quarter and six month period ended July 2, 1999
increased approximately $9,913,000 and $15,411,000 or 27.5% and 22.9% over the
similar prior year periods. Net sales for the second quarter of 1999 to the
Company's Specialty Markets (Seventh-day Adventist, Health Food, and
International) increased approximately $1,381,000 or 13.1% from the similar
prior year period. This increase is primarily attributable to a moderate price
increase and higher International sales due to timing of customer orders. For
the first half, net sales to the Company's Specialty Markets increased
approximately $1,660,000 or 8.3% over the similar prior year period. The first
half increase in sales is more in line with Company expectations.
Net sales to Foodservice operations for the second quarter and six month period
of 1999 increased approximately $359,000 and $379,000 or 8.0% and 4.6% over the
similar prior year periods due to solid gains in the core business and a
moderate price increase during the second quarter. New product tests were
initiated during the second quarter of 1999 and print advertising was used to
stimulate additional category growth.
- 8 -
<PAGE> 9
Net sales of Morningstar Farms(R) products to supermarkets in the second quarter
and six month period of 1999 increased approximately $8,174,000 and $13,372,000
or 38.9% and 34.2% over the similar prior year periods. Net sales of Morningstar
Farms meat alternative products in the second quarter and six month period of
1999 increased approximately $8,398,000 and $13,788,000 or 44.5% and 39.9% over
the similar prior year periods. The gain in sales continues to be attributed to
an extensive line of meatless products, expanded distribution and the addition
of Harvest Burgers(R). Sales of Harvest Burgers products accounted for 12.3% and
11.7% of the MSF supermarket sales for the second quarter and first half of
1999. Sales of America's Original Veggie Dogs(TM), MeatFree Buffalo Wings,
MeatFree Corn Dogs and Hard Rock Cafe(R) Veggie Burgers, which were introduced
in 1998, continue to experience growth as the national roll-out for these
products continues. The Company will be introducing MSF MeatFree Mini Corn Dogs
and hand-held stuffed sandwiches during the third quarter. The Mini Corn Dogs
are another addition to our popular hot dog line while the hand-held stuffed
sandwiches will be offered in three varieties. Net sales of Morningstar Farms
frozen egg substitutes for the second quarter and six month period of 1999
decreased approximately $233,000 and $417,000 or 10.5% and 9.3% from the similar
prior year periods. The Company expects this downward trend to continue as
consumer trends move from frozen to refrigerated egg substitutes.
Gross profit as a percentage of net sales for the second quarter of 1999
decreased from 45.0% in 1998 to 43.9% in 1999. For the first half of 1999, gross
profit decreased from 43.9% in 1998 to 43.5% in 1999. The Company expects the
gross profit percentage for the remainder of the year to be similar to the
second quarter of 1999.
Selling and distribution expenses as a percentage of net sales for the second
quarter and six month period of 1999 increased from 26.7% and 26.0% in 1998 to
31.0% and 30.2% in 1999. A national advertising campaign targeted to print and
broadcast media was introduced in May 1999 and will continue throughout the
third quarter. Particular emphasis will be placed on increasing awareness of the
Company's products and building brand loyalty. In addition, new product
packaging, developed as a result of consumer research, has begun to be
distributed at retail and should be completely phased-in by the end of the third
quarter. General and administrative expenses for the second quarter and first
half of 1999 increased as a percentage of net sales from 2.4% and 2.7% in 1998
to 2.7% and 3.0% in 1999. This increase can be attributed to additional costs
related to the Harvest Burgers purchase and the one-time costs associated to the
executive search currently ongoing. Research and development expenses decreased
from prior year percentages due to efficiencies gained through higher sales
volume.
Interest expense for the second quarter and six month period of 1999 increased
approximately $58,000 and $119,000 or 11.3% and 15.6% over the similar prior
year periods. The increase is attributed to higher average borrowing levels
associated with increased inventory levels to support future sales growth.
The Company recognized a $309,000 State of Ohio investment tax credit during the
second quarter of 1999. Based upon projected capital expenditures for 1999, the
Company has also qualified for a similar investment tax credit during the second
half.
Net income for the second quarter and six month period of 1999 decreased
approximately $325,000 and $782,000 or 11.3% and 15.6% over the similar prior
year periods. This decrease is the result of increased sales, offset by
decreased gross profit percentages, higher selling, general and administrative
expenses as a percentage of net sales, higher interest costs and a lower tax
rate.
- 9 -
<PAGE> 10
LIQUIDITY AND CAPITAL RESOURCES
The Company relies on cash generated from operations and a $35,000,000 revolving
credit facility as its principal sources of liquidity. As of August 9, 1999,
$2,800,000 of this credit facility was unused. The Company believes that this
borrowing capability plus internally generated funds will be adequate to finance
current growth levels into the foreseeable future.
The Company plans on spending approximately $7,800,000 to expand the frozen
distribution center in Zanesville. This expansion will allow the Company to
maintain higher finished goods inventory to support anticipated future sales
growth. The distribution center was completed in the second quarter of 1999 and
will be funded through cash generated from operations and the revolving credit
facility. As of July 30, 1999, $4,557,000 of the $7,800,000 had been spent. The
majority of the remaining amount should be spent by the end of the year.
Net cash provided by operating activities for the first half of 1999 decreased
over the similar prior year period due to a decrease in net income and changes
in operating assets and liabilities.
Net cash used for investing activities during the first half of 1999 increased
from the similar prior year period, primarily due to higher expenditures for
property, plant and equipment including the distribution center expansion at
Zanesville facility.
Net cash used for financing activities for the first half of 1999 increased from
the similar prior year period, primarily due to increased borrowings for capital
expenditures on property, plant and equipment and higher inventory levels to
support future sales growth.
INFLATION
Although inflation has slowed in recent years, the Company continues to seek
ways to moderate any inflationary impact. To the extent possible based on
competitive conditions, the Company passes increased costs on to its customers
by increasing sales prices over time.
The Company uses the LIFO method of accounting for raw materials, packaging
materials and the materials content of work-in-process and finished goods. Under
this method, the cost of products sold reported in the financial statements
approximates current costs.
COMPLIANCE WITH ENVIRONMENTAL PROTECTION REGULATIONS
The Company does not anticipate that compliance with federal, state, and local
regulations with respect to the discharge of materials into the environment, or
otherwise relating to the protection of the environment, will have a material
effect on capital expenditures, earnings, or the competitive position of the
Company.
- 10 -
<PAGE> 11
YEAR 2000
The Company intends this information to constitute notice under the Year 2000
Information and Readiness Disclosure Act as "Year 2000 Readiness Disclosure."
The YEAR 2000 issue refers to a condition in computer software where a two-digit
field rather that a four-digit field is used to distinguish a calendar year.
Unless corrected, date sensitive software may recognize a date using "00" as the
year 1900 rather that the year 2000. This could result in system failures or
miscalculations causing disruptions to various activities and operations. Such
an uncorrected condition could significantly interfere with the conduct of the
Company's business, including disruption of its supply, manufacturing,
processing, distribution and financial chains.
The Company has conducted an assessment of the YEAR 2000 issue and the potential
effect it will have on the Company and its business. The Company has also
prepared a formal plan for dealing with the YEAR 2000 issue. The plan covers
information systems, financial and administrative systems, process control and
manufacturing operating systems and significant vendors and customers. The
Company has completed or is in the process of updating much of its existing
software for YEAR 2000 compliance by modifying existing software or obtaining
YEAR 2000 compliant software updates from current software providers. The
Company is utilizing internal personnel, contract programmers and vendors to
identify YEAR 2000 noncompliance problems, modify codes and test the
modifications.
The Company completed the testing of the YEAR 2000 upgrades and successfully
converted our company-wide computer mainframe system during June 1999. Certain
non-critical components of the software that have not yet been implemented will
be YEAR 2000 compliant during the third quarter.
The majority of the Company's manufacturing and process equipment is currently
YEAR 2000 compliant, based upon discussions with vendors. Equipment that is
non-compliant will be modified by purchasing YEAR 2000 compliant upgrades or
replacing the equipment. The Company is in the process of updating non-compliant
manufacturing systems. The Company estimates that these systems will be 80%
compliant by August 31, 1999 and 100% compliant by November 30, 1999.
Third-party suppliers that have not modified their systems to adequately address
the YEAR 2000 issue may also affect the Company. The Company has initiated
efforts to evaluate the status of suppliers' efforts to resolve YEAR 2000
issues. The Company is monitoring the suppliers' efforts and addressing options
in case of non-compliance. These options include identification of alternate
suppliers and accumulation of inventory to assure production capacity. All of
the Company's critical suppliers have been contacted regarding YEAR 2000
compliance and we have either ascertained that they will be YEAR 2000 or
initiated for new suppliers that will be YEAR 2000 compliant. These activities
are intended to provide a means of managing risk, but cannot eliminate the
potential for disruption due to third party failure.
The Company is also dependent upon our customers for sales and cash flow. The
Company has also sent surveys to our customers regarding YEAR 2000 compliance.
Non-compliance by our customers could result in reduced sales, higher accounts
receivable and inventory levels and reduced cash flow to the Company. The
Company believes that its customer base is broad enough to minimize the effects
of a single occurrence; however, we are taking steps to monitor the status of
our customers as a means of determining risks and alternatives.
- 11 -
<PAGE> 12
The possibility exits that the Company could inadvertently fail to correct a
YEAR 2000 problem. However, failure to meet critical dates identified in our
readiness plan would provide advance notice and steps would be taken to correct
the problem prior to January 1, 2000. The Company believes that the impact of
such an occurrence would be minor. The Company does not yet have a comprehensive
contingency plan, but has identified a vendor that can provide remote processing
in the event of a YEAR 2000 problem.
The Company continually upgrades its person computers as part of its annual
capital budget; therefore, the Company does not anticipate any problems
regarding operating systems and ancillary software that resides on the Company's
personal computers. As of July 30, 1999, YEAR 2000 readiness has cost the
Company approximately $200,000 and is expected to cost an estimated $250,000 in
the aggregate to complete, not including internal resources.
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
Certain statements in this Form 10-Q which are not historical fact are
"forward-looking statements" within the meaning of the Private Securities
Litigation Reform Act of 1995. Such statements involve known and unknown risks,
uncertainties and other factors that may cause actual results to differ
materially. Such risks, uncertainties and other factors include, but are not
limited to, changes in general economic conditions, fluctuation in interest
rates, increases in raw material costs, level of competition, market acceptance
of new and existing products, capital expenditure amounts, uninsured product
liability, the effective detection and remediation of Year 2000 issues by the
Company and its key third party vendors, suppliers and customers and other
factors described in detail in the Company's filings with the Securities and
Exchange Commission and communication to shareholders.
ITEM 3.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
- ----------------------------------------------------------
No response required
- 12 -
<PAGE> 13
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
Not Applicable
Item 2. Changes in Securities and Use of Proceeds
Not Applicable
Item 3. Defaults Upon Senior Securities
Not Applicable
Item 4. Submission of Matters to a Vote of Security Holders
Not Applicable
Item 5. Other Information
Not Applicable
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
Exhibit 10. Worthington Foods, Inc. Amended and
Restated 1995 Stock Option Plan
Exhibit 11. Computation of Earnings Per Share
Exhibit 27. Financial Data Schedule
(b) No report on Form 8-K was filed during the fiscal
quarter ended July 2, 1999.
- 13 -
<PAGE> 14
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
WORTHINGTON FOODS, INC.
-------------------------------
(Registrant)
Date: August 13, 1999 By: /S/ WILLIAM T. KIRKWOOD
------------------- ----------------------------
William T. Kirkwood
Executive Vice President and
Chief Financial Officer
- 14 -
<PAGE> 15
EXHIBIT INDEX
Filed with Worthington Foods, Inc. Quarterly Report on Form 10-Q for the Quarter
Ended July 2, 1999.
<TABLE>
<CAPTION>
Exhibit No. Page No.
- ----------- --------
<S> <C> <C>
10 Worthington Foods, Inc. Amended and Restated 1995 Stock Option Plan *
11 Computation of Earnings Per Share 16
27 Financial Data Schedule 17
</TABLE>
*Incorporated by reference to Exhibit 10 of the Registrant's Registration
Statement on Form S-8 filed August 4, 1999. (Registration No. 333-84459)
- 15 -
<PAGE> 1
EXHIBIT 11
<TABLE>
WORTHINGTON FOODS, INC.
COMPUTATION OF EARNINGS PER SHARE
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
7/2/99 7/3/98 7/2/99 7/3/98
------ ------ ------ ------
<S> <C> <C> <C> <C>
Basic:
Weighted average number of common
shares outstanding ................................. 12,379,979 11,723,816 12,376,352 11,683,762
=========== =========== =========== ===========
Net income ......................................... $ 2,545,000 $ 2,870,000 $ 4,245,000 $ 5,027,000
=========== =========== =========== ===========
Earnings per share ................................. $ 0.21 $ 0.25 $ 0.34 $ 0.43
=========== =========== =========== ===========
Diluted:
Weighted average number of common
shares outstanding ............................... 12,379,979 11,723,816 12,376,352 11,683,762
Net effect of dilutive stock options based
on the treasury stock method using the
average market price during the period ........... 134,538 364,725 128,211 341,217
----------- ----------- ----------- -----------
Weighted average common and common
equivalent shares used in computing
earnings per share ............................... 12,514,517 12,088,541 12,504,563 12,024,979
=========== =========== =========== ===========
Net income ......................................... $ 2,545,000 $ 2,870,000 $ 4,245,000 $ 5,027,000
=========== =========== =========== ===========
Earnings per share ................................. $ 0.20 $ 0.24 $ 0.34 $ 0.42
=========== =========== =========== ===========
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> JUL-02-1999
<CASH> 2,628
<SECURITIES> 0
<RECEIVABLES> 13,000
<ALLOWANCES> 160
<INVENTORY> 33,749
<CURRENT-ASSETS> 58,124
<PP&E> 101,182
<DEPRECIATION> 33,530
<TOTAL-ASSETS> 136,195
<CURRENT-LIABILITIES> 14,037
<BONDS> 0
0
0
<COMMON> 12,380
<OTHER-SE> 64,243
<TOTAL-LIABILITY-AND-EQUITY> 136,195
<SALES> 82,759
<TOTAL-REVENUES> 82,759
<CGS> 46,789
<TOTAL-COSTS> 75,079
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,010
<INCOME-PRETAX> 6,670
<INCOME-TAX> 2,425
<INCOME-CONTINUING> 4,245
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 4,245
<EPS-BASIC> 0.34
<EPS-DILUTED> 0.34
</TABLE>
