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 40 weeks ended October 1, 1994
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 1-9256
__________________
PREMARK INTERNATIONAL, INC.
(Exact name of registrant as specified in its charter)
Delaware 36-3461320
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1717 Deerfield Road, Deerfield, Illinois 60015
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (708)
405-6000
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_______
As of November 11, 1994, 63,922,596 shares of the Common Stock,
$1.00 par value, of the Registrant were outstanding.
<PAGE>
<PAGE>
PART I
FINANCIAL INFORMATION
Item 1. Financial Statements
a) Financial Statements of Registrant
Page
Index Number
Condensed Consolidated Statement of Income
(Unaudited) for the 13 week periods ended
October 1, 1994 and September 25, 1993........... 2
Condensed Consolidated Statement of Income
(Unaudited) for the 40 week period ended
October 1, 1994 and the 39 week period
ended September 25, 1993......................... 3
Condensed Consolidated Balance Sheet
(Unaudited) as of October 1, 1994 and
December 25, 1993................................ 4
Condensed Consolidated Statement of Cash Flows
(Unaudited) for the 40 week period ended
October 1, 1994 and the 39 week period
ended September 25, 1993......................... 6
Notes to Condensed Consolidated
Financial Statements (Unaudited)................. 7
The condensed consolidated financial statements of the
Registrant included herein have been prepared, without audit,
pursuant to the rules and regulations of the Securities and
Exchange Commission. Although certain information normally
included in financial statements prepared in accordance with
generally accepted accounting principles has been condensed or
omitted, the Registrant believes that the disclosures are
adequate to make the information presented not misleading. It
is suggested that these condensed consolidated financial
statements be read in conjunction with the financial statements
and the notes thereto included in the Annual Report on Form 10-K
of the Registrant for its fiscal year ended December 25, 1993.
The condensed consolidated financial statements included herein
reflect all adjustments, consisting only of normal recurring
items, which, in the opinion of management, are necessary to
present a fair statement of the results for the interim periods
presented.
The results for interim periods are not necessarily indicative
of trends or of results to be expected for a full year.
<PAGE>
PREMARK INTERNATIONAL, INC.
CONDENSED CONSOLIDATED STATEMENT OF INCOME
(Unaudited)
13 Weeks Ended
------------------
Oct. 1, Sept. 25,
1994 1993
(In millions, except per share data) -------- --------
Net sales.................................... $ 824.3 $ 744.8
-------- --------
Costs and expenses:
Cost of products sold...................... 436.7 395.3
Delivery, sales and administrative expense. 326.9 302.0
Interest expense........................... 6.1 8.6
Interest income............................ (1.2) (1.3)
Other expense (income), net................ 0.2 (1.3)
-------- --------
Total costs and expenses................ 768.7 703.3
-------- --------
Income before income taxes................... 55.6 41.5
Provision for income taxes................... 14.7 8.6
-------- --------
Net income................................... 40.9 32.9
Retained earnings, beginning of period....... 482.9 335.8
Cash dividends declared...................... (12.7) (9.8)
Cost of treasury stock issued
in excess of option exercise proceeds...... (2.9) -
-------- --------
Retained earnings, end of period............. $ 508.2 $ 358.9
======== ========
Net income per common and
common equivalent share<F1>................ $ 0.62 $ 0.49
======== ========
Average number of common and common
equivalent shares outstanding<F1>.......... 66.4 67.4
======== ========
Dividends declared per common share<F1>...... $ 0.20 $ 0.14
======== ========
<F1> All share-related amounts reflect a 2-for-1 stock split
declared on May 4, 1994.
See accompanying Notes to Condensed Consolidated Financial
Statements (Unaudited).
- 2 -
<PAGE>
PREMARK INTERNATIONAL, INC.
CONDENSED CONSOLIDATED STATEMENT OF INCOME
(Unaudited)
40 Weeks 39 Weeks
Ended Ended
Oct. 1, Sept. 25,
1994 1993
(In millions, except per share data) --------- ---------
Net sales................................... $2,457.2 $2,214.1
--------- ---------
Costs and expenses:
Cost of products sold...................... 1,276.9 1,149.3
Delivery, sales and administrative expense. 978.2 914.1
Interest expense........................... 18.4 23.8
Interest income............................ (4.1) (4.3)
Other expense, net......................... 2.1 0.7
--------- ---------
Total costs and expenses................ 2,271.5 2,083.6
--------- ---------
Income before income taxes................... 185.7 130.5
Provision for income taxes................... 50.1 32.6
--------- ---------
Net income................................... 135.6 97.9
Retained earnings, beginning of period....... 418.7 286.8
Cash dividends declared...................... (34.3) (25.8)
Cost of treasury stock issued
in excess of option exercise proceeds...... (11.8) -
--------- ---------
Retained earnings, end of period.............$ 508.2 $ 358.9
========= =========
Net income per common and
common equivalent share<F1>................$ 2.04 $ 1.46
========= =========
Average number of common and common
equivalent shares outstanding<F1>.......... 66.5 66.9
========= =========
Dividends declared per common share<F1>......$ 0.54 $ 0.405
========= =========
<F1> All share-related amounts reflect a 2-for-1 stock split
declared on May 4, 1994.
See accompanying Notes to Condensed Consolidated Financial
Statements (Unaudited).
- 3 -
<PAGE>
PREMARK INTERNATIONAL, INC.
CONDENSED CONSOLIDATED BALANCE SHEET
ASSETS
(Unaudited)
Oct. 1, Dec. 25,
1994 1993
(In millions) --------- ---------
Cash and cash equivalents............ $ 61.4 $ 140.0
Accounts and notes receivable........ 507.9 471.5
Less allowances for
doubtful accounts................ (43.6) (37.1)
--------- ---------
464.3 434.4
Inventories.......................... 527.5 441.2
Deferred income tax benefits......... 95.4 96.3
Prepaid expenses..................... 66.0 27.5
--------- ---------
Total current assets............... 1,214.6 1,139.4
--------- ---------
Investments, long-term receivables
and deferred charges............... 168.0 152.8
Less allowances for
doubtful accounts................ (27.4) (29.0)
--------- ---------
140.6 123.8
Property, plant and equipment........ 1,721.4 1,606.4
Less accumulated depreciation...... (1,021.6) (934.9)
--------- ---------
699.8 671.5
Intangibles, less accumulated
amortization....................... 182.2 182.3
--------- ---------
Total assets......................... $2,237.2 $2,117.0
========= =========
See accompanying Notes to Condensed Consolidated Financial
Statements (Unaudited).
- 4 -
<PAGE>
PREMARK INTERNATIONAL, INC.
CONDENSED CONSOLIDATED BALANCE SHEET
LIABILITIES AND SHAREHOLDERS' EQUITY
(Unaudited)
Oct. 1, Dec. 25,
1994 1993
(In millions) --------- --------
Accounts payable..................... $ 166.9 $ 194.4
Short-term borrowings and current
portion of long-term debt.......... 152.6 143.4
Accrued liabilities.................. 595.2 549.8
--------- ---------
Total current liabilities.......... 914.7 887.6
--------- ---------
Long-term debt....................... 167.5 168.0
Accrued postretirement
benefit cost....................... 149.1 144.5
Deferred income taxes................ 11.6 9.0
Other liabilities.................... 102.9 96.0
Shareholders' equity:
Preferred stock, $1.00 par value,
authorized 50,000,000 shares;
issued -- none................... - -
Common stock, $1.00 par value,
authorized 200,000,000 shares;
issued -- 69,003,840 shares<F1>
at October 1, 1994, and 34,501,920
shares at December 25, 1993,
at cost.......................... 69.0 34.5
Capital surplus.................... 547.8 582.3
Retained earnings.................. 508.2 418.7
Treasury stock, 5,329,889 shares<F1>
at October 1, 1994, and 2,595,387
shares at December 25, 1993,
at cost.......................... (123.0) (93.0)
Unearned portion of restricted
stock issued for future service.. (0.4) (1.0)
Cumulative foreign currency
adjustments...................... (110.2) (129.6)
--------- ---------
Total shareholders' equity......... 891.4 811.9
--------- ---------
Total liabilities and
shareholders' equity............. $2,237.2 $2,117.0
========= =========
<F1> Reflects a 2-for-1 stock split declared on May 4, 1994.
See accompanying Notes to Condensed Consolidated Financial
Statements (Unaudited).
- 5 -
<PAGE>
PREMARK INTERNATIONAL, INC.
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited)
40 Weeks 39 Weeks
Ended Ended
Oct. 1, Sept. 25,
1994 1993
(In millions) --------- ---------
Cash flows from operating activities:
Net income......................... $ 135.6 $ 97.9
Adjustment to reconcile net
income to net cash provided
by operating activities:
Depreciation and amortization.. 91.7 82.1
Changes in assets and liabilities:
Increase in accounts
and notes receivable......... (19.4) (8.7)
Increase in inventory.......... (66.9) (64.1)
(Decrease) increase in
accounts payable and
accrued liabilities.......... (5.4) 5.1
Increase (decrease) in
income taxes payable......... 3.5 (7.0)
Increase in deferred
income taxes................. (2.7) (1.0)
Increase in prepaid expenses... (36.6) (6.6)
Other.............................. (3.8) 10.2
-------- --------
Net cash provided by
operating activities......... 96.0 107.9
-------- --------
Cash flows from investing activities:
Capital expenditures............... (98.5) (91.0)
Other.............................. (9.4) 3.3
-------- --------
Net cash used in
investing activities......... (107.9) (87.7)
-------- --------
Cash flows from financing activities:
Net increase
in short-term debt............... 158.1 5.6
Repayment of long-term debt........ (151.1) (2.3)
Proceeds from exercise of
stock options.................... 8.9 6.4
Payment for purchase of
treasury stock................... (49.8) (15.6)
Payment of dividends............... (30.6) (24.8)
-------- --------
Net cash used in
financing activities......... (64.5) (30.7)
-------- --------
Effect of exchange rate changes on
cash and cash equivalents.......... (2.2) (5.0)
-------- --------
Net decrease in cash
and cash equivalents............... $ (78.6) $ (15.5)
======== ========
See accompanying Notes to Condensed Consolidated Financial
Statements (Unaudited).
- 6 -
<PAGE>
PREMARK INTERNATIONAL, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Note 1: Basis of Presentation
The accompanying unaudited condensed consolidated financial
statements have been prepared in accordance with the instructions
to Form 10-Q and therefore do not include all information and
footnotes necessary for a fair presentation of financial
position, results of operations, and changes in financial
position in conformity with generally accepted accounting
principles. In the opinion of management, the unaudited
condensed consolidated financial statements include all
adjustments, consisting only of normal recurring items, necessary
for a fair presentation of financial position and results of
operations. The results of operations of any interim period are
not necessarily indicative of the results that may be expected
for a full fiscal year. Certain prior year amounts have been
reclassified to conform with the current year's presentation.
Premark's (the Company) fiscal year ends on the last Saturday of
December. Fiscal 1994 will consist of 53 weeks compared with 52
weeks in 1993. As a result, the first three quarters include 40
weeks in 1994 compared with 39 weeks in 1993.
Note 2: Inventories
Inventories, by component, are summarized as follows (in
millions):
October 1, December 25,
1994 1993
-------- --------
Finished goods.................... $ 271.2 $ 196.8
Work in process................... 74.7 65.1
Raw materials and supplies........ 181.6 179.3
-------- --------
Total inventories............. $ 527.5 $ 441.2
======== ========
Note 3: Stock Split
On May 4, 1994, the Company's board of directors declared a 2-
for-1 stock split which was effected in the form of a 100 percent
stock dividend issued to shareholders of record as of June 16,
1994. All previously reported per share amounts have been
restated to reflect the stock split.
- 7 -
<PAGE>
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
The following is a discussion of the results of operations for
the 13 weeks and 40 weeks ended October 1, 1994, compared with
the 13 weeks and 39 weeks ended September 25, 1993, and changes
in financial condition during the 40 weeks ended October 1, 1994.
The current year's first three quarters include 40 weeks because
the Company's fiscal year ends on the last Saturday of each
calendar year and will include 53 weeks in 1994.
Net Sales
Net sales for the third quarter of 1994 were $824.3 million, an
increase of nearly 11 percent compared with net sales of $744.8
million in 1993. Net sales for the first three quarters of 1994
were $2.5 billion, an improvement of 11 percent compared to $2.2
billion in 1993. All segments generated increases in both the
third quarter and first three quarters of 1994.
Costs and Expenses
Cost of products sold as a percentage of net sales was 53.0
percent for the third quarter of 1994 compared with 53.1 percent
for the third quarter of 1993. For the first three quarters, the
rate was 52.0 percent in 1994 and 51.9 percent in 1993. The
slight change in both periods was due to increased capacity
utilization at the Food Equipment Group's domestic operations as
well as at Ralph Wilson Plastics, offset by lower capacity
utilization at Tupperware U.S. and manufacturing inefficiencies
at Florida Tile.
Delivery, sales and administrative expense as a percentage of net
sales decreased slightly in the third quarter of 1994 to 39.6
percent from 40.5 percent in the same period last year. For the
first three quarters, the rate declined from 41.3 percent in 1993
to 39.8 percent in 1994. The lower ratio for the quarter
resulted from lower marketing expenses at the Food Equipment
Group offsetting higher costs for marketing, research and
development and administration at Ralph Wilson Plastics. For the
first three quarters, lower marketing expenses at the Food
Equipment Group and lower promotional and administrative expenses
at Tupperware offset generally higher expenses at Florida Tile
and increased warehousing costs for Tupperware U.S.
Provision for Income Taxes
The effective tax rates for the third quarter and first three
quarters of 1994 were 26.5 percent and 27.0 percent,
respectively, compared with 20.7 percent and 25.0 percent,
respectively, for 1993. For the year ended December 25, 1993,
the rate was 24.9 percent. The increase in the 1994 year-to-date
rate compared with 1993's full year rate primarily reflects the
lower amount of available foreign tax credits. The company's
effective tax rates have been below the statutory rates due to
the strength of U.S. operating results, which has allowed the
recognition of previously reserved assets for temporary
differences, and the benefits of foreign tax credits.
Net Income
Net income for the third quarter of 1994 rose 24 percent to $40.9
million, or $0.62 per share, from $32.9 million, or $0.49 per
share, in 1993, after reflecting the 2-for-1 stock split declared
on May 4, 1994. For the first nine months of 1994, net income
was $135.6 million or $2.04 per share, a 39 percent increase from
$97.9 million or $1.46 per share in 1993. The improvement in the
third quarter reflects substantial increases in profitability at
all units except Florida Tile, which was even with last year, and
Tupperware. The increase in the first nine months reflects
double digit increases in profitability at all units except
Florida Tile.
For the quarter, the Food Equipment Group accounted for the
majority of the improvement, led by the performance of its
domestic operations. Also, Ralph Wilson Plastics reported
significant growth and West Bend reported record results. At
Tupperware, lower sales in the Asia Pacific region, due to a
shift in timing of a major annual sales promotion, and a
reduction in force provision in Latin America offset continued
improvement in Europe and the U.S. For the first three quarters,
the Food Equipment Group achieved substantially better results
also led by the performance of its domestic operations.
Tupperware registered a good increase, led by significantly
improved results in Asia Pacific, along with improvements in its
European and U.S. operations. Ralph Wilson Plastics, West Bend,
Precor and Hartco all registered significant increases in
profits.
Segment results
Tupperware
Net sales for the third quarter of 1994 were $292.2 million, an
increase of 6 percent from $275.9 million in 1993. The growth
was primarily the result of increased volume in Europe, the U.S.
and Latin America, plus favorable foreign exchange rates,
partially offset by a decline in Asia Pacific. For the first
three quarters, net sales increased nearly 8 percent from $867.4
million in 1993 to $934.9 million in 1994. The increase was due
to improvement in all areas except Canada. Tupperware's
international operations accounted for 80 percent of its segment
sales for the third quarter and 82 percent for the first three
quarters of 1994.
Segment profit for the third quarter of 1994 was $24.6 million, a
12 percent decline from $27.8 million last year. For the first
three quarters of 1994, segment profit was $113.4 million, an
increase of 14 percent from $99.2 million in 1993. The profit
decline for the third quarter, despite favorable foreign exchange
rates, was due to lower results in Asia Pacific and a provision
for a reduction in force in Latin America. The improvement for
the first three quarters over last year was due to significantly
higher results in Asia Pacific during the first half of the year,
and continued improvement in Europe and the United States.
Tupperware's international operations accounted for 92 percent of
its segment profit for the third quarter and 97 percent for the
first three quarters of 1994.
For the quarter, Tupperware's European operations' sales
increased 16 percent to $105.4 million and profits rose 34
percent. The sales improvement was led by Germany, Scandinavia,
France and Holland, along with favorable foreign exchange rates,
which offset declines in the United Kingdom and Spain. The
growth was due to higher volume resulting from continued growth
of the sales force. The profit growth resulted from the higher
sales partially offset by higher administrative and volume
related promotional costs. Asia Pacific sales declined 8 percent
to $85.6 million, and segment profit dropped $3.6 million to
$11.3 million. The unfavorable sales comparison was principally
due to lower volume in Japan and Australia, although the
Philippines and some of the smaller markets reflected increases.
Most of the decrease in Japan reflected the impact of a change in
the timing of a major annual promotion program, which was held in
the second quarter this year versus the third quarter of 1993.
The decline in profitability resulted from the lower sales, which
more than offset lower promotional costs. In the U.S., sales for
the quarter rose to $59.0 million from $53.7 million in 1993.
The sales growth reflected a larger active sales force and new
products. Segment profit of $2.5 million was a $0.3 million
improvement over 1993. Higher sales and cost savings from the
restructuring were mostly offset by the effect of lower
production levels, which led to higher per unit costs. Latin
American sales for the quarter rose nearly 15 percent to $36.2
million, primarily due to higher volume in Mexico and Brazil
along with higher pricing in Brazil. Segment profit, however,
declined significantly due to the reduction in force provision,
as well as lower sales in Venezuela. Canadian sales of $5.0
million were down 14 percent from 1993 due to lower volume. As a
result of the lower sales and higher product costs, Canada
incurred a segment loss.
For the first three quarters, Tupperware Europe reported a modest
increase in sales and a strong improvement in segment profit.
The segment profit increase resulted primarily from gains in
Germany and Scandinavia that outweighed poor results in the
United Kingdom. Asia Pacific's sales showed strong improvement
while profits increased significantly resulting from gains in
Japan and Korea, along with lower manufacturing costs, which more
than offset a decline in Australia. U.S. segment profit rose by
$2.1 million to $5.6 million in 1994, resulting from a slight
increase in sales, lower promotional costs and savings from the
1992 restructuring. While Latin America's sales rose
significantly due to strength in Mexico and improvement in
Brazil, profits declined somewhat due to higher promotional and
selling expenses, as well as a reduction in force provision.
Canada had a segment loss due to somewhat lower sales and higher
product costs.
Food Equipment Group
Net sales for the third quarter of 1994 were $295.4 million, an
increase of 15 percent compared with $256.6 million in 1993. For
the first three quarters, net sales increased 11 percent from
$742.1 million in 1993 to $826.7 million in 1994. The increase
in both periods was the result of significantly higher domestic
volume. International operations accounted for 38 percent of
group sales for the third quarter and 39 percent for the first
three quarters of 1994.
For the third quarter, segment profit of $22.9 million was
significantly higher than 1993's $12.6 million, primarily due to
the higher domestic sales. Lower expenses in Europe as a result
of the reduction in the work force last year also contributed to
the improvement in segment profit. For similar reasons, the
first three quarters' segment profit grew to $51.9 million from
$30.0 million in 1993. International operations accounted for 24
percent of segment profit for the third quarter and 26 percent
for the first three quarters.
U.S. sales rose 19 percent and 17 percent for the third quarter
and first three quarters, respectively, due to double digit
percentage point increases in all markets and across all product
lines. Segment profit more than doubled over the third quarter
last year. For the first three quarters, segment profit
increased 90 percent over the similar period last year. The
increases in both periods were due to higher volume and nominal
price increases. In May, 1994, a $23 million verdict was entered
against one of the domestic Food Equipment Group companies in a
product liability lawsuit following a jury trial. The Company
does not believe the verdict to be justified, and is vigorously
pursuing post-trial motions and will appeal the verdict if
necessary. Although the ultimate outcome is uncertain, the
Company does not expect the final resolution of this matter to
have any material effect on its financial condition or results of
operations.
European sales for the quarter were up strongly mainly due to
favorable foreign exchange rates. Excluding this effect, sales
were up slightly for both the quarter and the first three
quarters, as minor improvements occurred in most countries.
Profits, however, rose 25 percent for the quarter and 37 percent
for the first three quarters due to savings resulting from the
reduction in the work force, which more than offset the impact of
product discounting. In Canada, third quarter sales increased
slightly over last year as the effect of higher volume was
largely offset by unfavorable foreign exchange rates, but segment
profit increased significantly, from a low base, due to less
discounting. For the first three quarters, Canadian sales were
essentially even with 1993 due to unfavorable foreign exchange
rates which offset increased volume. Segment profit dropped
somewhat due to higher manufacturing costs in the first quarter.
Consumer and Decorative Products
Net sales were $236.7 million for the third quarter of 1994, an
increase of 12 percent compared with $212.3 million in 1993. For
the first three quarters, sales grew 15 percent from $604.6
million in 1993 to $695.6 million in 1994. Segment profit for
the third quarter was $19.7 million, a 37 percent increase from
$14.4 million in 1993. For the first three quarters, segment
profit improved 45 percent from $37.4 million in 1993 to $54.2
million in 1994.
The sales growth for both the third quarter and first three
quarters resulted from increases at all units. Third quarter
sales were at a record level for all units. Higher segment
profit for the third quarter and first three quarters was driven
by improvements at all units except Florida Tile. Ralph Wilson
Plastics' segment profit increased significantly for both the
quarter and the first three quarters from the effect of record
volume and lower manufacturing costs, which was only partially
offset by higher operating expenses. In addition, year-to-date
profitability was hurt by increased adhesive claims cost. The
provision for adhesive claims was $6.0 million and $18.0 million
for the third quarter and first three quarters, respectively,
versus $7.3 million and $13.8 million, respectively, for the same
periods in 1993. In late October, the Company reached agreement
with certain of its insurance carriers with respect to
reimbursement for a substantial portion of the adhesive claims.
These agreements are expected to result in fourth quarter
payments to the Company by the insurance companies of more than
$30 million. The Company has recorded reserves associated with
this issue, as well as assets for amounts to be reimbursed. Due
to the confirmed insurance coverage and the Company's current
assessment of potential future adhesive claims, the Company does
not currently expect to record any additional expense associated
with this issue. At Hartco, increased sales volume led to profit
growth for both the third quarter and first three quarters.
Florida Tile's segment profit for the quarter was essentially
even with last year, despite higher sales, due to higher selling,
promotional and systems costs. For the first three quarters
Florida Tile had a segment loss, despite higher sales, due to
manufacturing inefficiencies in the first half of the year plus
higher operating expenses.
West Bend achieved record segment profit for both the third
quarter and first three quarters from higher volume, including
especially strong sales of its breadmakers. Precor generated a
strong sales increase for the quarter and significant growth in
the first three quarters, reflecting strong treadmill demand.
Precor achieved a small segment profit for the quarter versus a
segment loss last year. For the first three quarters, Precor's
segment profit was significantly higher than the previous year's,
also from increased sales.
Financial Condition
Net cash provided by operating activities amounted to $96.0
million for the first three quarters of 1994, compared with
$107.9 million in the first three quarters of 1993. The decrease
was due to a build-up of net inventories and an increase in
prepaid expenses, which more than offset the substantial increase
in net income. The increased levels of inventories are to
support higher sales levels. Also, at Tupperware, inventories
increased due to an expanded product line, increased levels of
purchased product, mixed results associated with certain
promotions and the desire to improve service levels.
Net cash used in investing activities, mainly for capital
expenditures, was $107.9 million and $87.7 million in the first
three quarters of 1994 and of 1993, respectively. In addition to
capital expenditures, in 1994 the Company made two small
acquisitions which required $6.1 million in cash, while in 1993 a
small subsidiary was sold. Net cash used in financing activities
was $64.5 million in the first three quarters of 1994 compared
with $30.7 million in the first three quarters of 1993. The
variation in net cash flows associated with financing activities
primarily reflects outflows for repurchases of the Company's
common stock under its repurchase plan. On February 1, 1994, the
Company called its $150 million 8 3/8% notes, which had a stated
maturity date in 1997. The redemption was funded through
available cash and the issuance of commercial paper at more
favorable rates.
The total debt-to-capital ratio at the end of the third quarter
of 1994 was 26.4 percent, lower than the 28.7 percent ratio as of
the end of the third quarter of 1993 and the 27.7 percent ratio
at December 25, 1993, as a result of the increase in
shareholders' equity. Working capital as of October 1, 1994
increased by $48.1 million from December 25, 1993, as a decrease
in cash along with an increase in accruals was more than offset
by increases in inventories, prepaid expenses and accounts
receivable and a decrease in accounts payable.
As of October 1, 1994, the Company had unused lines of credit of
approximately $487 million, including $240 million under a
committed revolving credit facility. Future cash flows, lines of
credit and other short-term financing are expected to be adequate
to fund operating and investment requirements.
On May 4, 1994, the Company's board of directors declared a 2-
for-1 stock split which was effected in the form of a 100 percent
stock dividend to shareholders of record as of June 16, 1994.
Under its repurchase plan announced in 1993, the Company is
purchasing up to 6,000,000 of its shares of common stock, on a
post-split basis, over five years with volume and timing
dependent on market conditions. Since the inception of the plan
through October 1 and November 11, 1994, the Company has
purchased 2,279,400 shares at an average cost of $38 per share,
also on a post-split basis. Of the total, 1,140,600 shares at an
average cost of $41 per share have been purchased in fiscal 1994.
<PAGE>
PART II
OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits (numbered in accordance with Item 601 of
Regulation S-K)
(11) A statement of computation of per share earnings
is filed as an exhibit to this Report.
(27) A Financial Data Schedule for the third fiscal
quarter of 1994 is filed as an exhibit to this
Report.
(b) Reports on Form 8-K
No reports on Form 8-K have been filed by the Registrant
during the quarter for which this Report is filed.
<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.
PREMARK INTERNATIONAL, INC.
By: /s/ John M. Costigan
------------------------
John M. Costigan
Senior Vice President,
General Counsel and Secretary
By: /s/ Lawrence B. Skatoff
------------------------
Lawrence B. Skatoff
Senior Vice President and
Chief Financial Officer
Deerfield, Illinois
November 14, 1994
<PAGE>
EXHIBIT INDEX
Exhibit No. Description
(11) A statement of the computation
of per share earnings is filed
as an exhibit to this Report.
(27) A Financial Data Schedule for
the third fiscal quarter of 1994
is filed as an exhibit to this
Report.
Exhibit 11
PREMARK INTERNATIONAL, INC.
Statement of Computation of Per Share Earnings
(Unaudited)
13 Weeks Ended
-------------------
Oct. 1, Sept. 25,
1994 1993
(Dollars in millions, shares in thousands) -------- --------
Earnings $ 40.9 $ 32.9
======== ========
PRIMARY METHOD
Shares<F1>
Cumulative average outstanding shares 63,608 63,664
Common equivalent shares 2,822 3,692
-------- --------
Weighted average number of common
and common equivalent shares
outstanding 66,430 67,356
======== ========
Primary earnings per share<F1> $ 0.62 $ 0.49
======== ========
FULLY DILUTED METHOD
Shares<F1>
Cumulative average outstanding shares 63,608 63,664
Common equivalent shares 2,837 3,818
-------- --------
Weighted average number of common
and common equivalent shares
outstanding 66,445 67,482
======== ========
Fully diluted earnings per share<F1> $ 0.62 $ 0.49
======== ========
<F1> All share amounts reflect a 2-for-1 stock split declared
on May 4, 1994.
<PAGE>
Exhibit 11
PREMARK INTERNATIONAL, INC.
Statement of Computation of Per Share Earnings
(Unaudited)
40 Weeks 39 Weeks
Ended Ended
Oct. 1, Sept. 25,
1994 1993
(Dollars in millions, shares in thousands) -------- --------
Earnings $ 135.6 $ 97.9
======== ========
PRIMARY METHOD
Shares<F1>
Cumulative average outstanding shares 63,582 63,686
Common equivalent shares 2,948 3,228
-------- --------
Weighted average number of common
and common equivalent shares
outstanding 66,530 66,914
======== ========
Primary earnings per share<F1> $ 2.04 $ 1.46
======== ========
FULLY DILUTED METHOD
Shares<F1>
Cumulative average outstanding shares 63,582 63,686
Common equivalent shares 2,991 3,818
-------- --------
Weighted average number of common
and common equivalent shares
outstanding 66,573 67,504
======== ========
Fully diluted earnings per share<F1> $ 2.04 $ 1.45
======== ========
<F1> All share amounts reflect a 2-for-1 stock split declared
on May 4, 1994.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED
FROM PREMARK INTERNATIONAL, INC.'S THIRD QUARTER 1994 FINANCIAL
STATEMENTS AS FILED IN ITS QUARTERLY REPORT ON FORM 10-Q AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-START> DEC-26-1993
<PERIOD-END> OCT-01-1994
<CASH> 61,400
<SECURITIES> 0
<RECEIVABLES> 507,900
<ALLOWANCES> 43,600
<INVENTORY> 527,500
<CURRENT-ASSETS> 1,214,600
<PP&E> 1,721,400
<DEPRECIATION> 1,021,600
<TOTAL-ASSETS> 2,237,200
<CURRENT-LIABILITIES> 914,700
<BONDS> 167,500
<COMMON> 69,000
0
0
<OTHER-SE> 1,056,000
<TOTAL-LIABILITY-AND-EQUITY> 2,237,200
<SALES> 2,457,200
<TOTAL-REVENUES> 2,457,200
<CGS> 1,276,900
<TOTAL-COSTS> 1,276,900
<OTHER-EXPENSES> 2,100
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 18,400
<INCOME-PRETAX> 185,700
<INCOME-TAX> 50,100
<INCOME-CONTINUING> 135,600
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 135,600
<EPS-PRIMARY> 2.04
<EPS-DILUTED> 2.04
</TABLE>
