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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): July 29, 1999
(July 12, 1999)
FLOWERS INDUSTRIES, INC.
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Georgia 1-9787 58-0244940
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(State or Other (Commission (I.R.S. Employer
Jurisdiction of File Number) Identification No.)
Incorporation)
1919 Flowers Circle, P.O. Box 1338, Thomasville, GA 31757
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (912) 226-9110
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Item 5. Other Information
The Registrant is filing herewith, a press release dated July 12, 1999
and a Second Amendment to $500,000,000 Amended and Restated Credit
Agreement dated as of January 30, 1998, among Flowers Industries, Inc.,
certain Banks listed therein, Wachovia Bank, N.A., as Agent, The Bank
of Nova Scotia, as Documentation Agent and NationsBank, N.A., as
Syndicating Agent.
Item 7. Financial Statements and Exhibits
Exhibit 99.1 Press Release dated July 12, 1999.
Exhibit 99.2 Second Amendment to $500,000,000 Amended and Restated Credit
Agreement dated as of January 30, 1998, among Flowers Industries,
Inc., certain Banks listed therein, Wachovia Bank, N.A., as Agent,
The Bank of Nova Scotia, as Documentation Agent and NationsBank,
N.A., as Syndicating Agent.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
FLOWERS INDUSTRIES, INC.
BY: /s/ Jimmy M. Woodward
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Jimmy M. Woodward
Vice President and Chief
Administrative Officer
Chief Accounting Officer
Date: July 29, 1999
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Exhibit 99.1
Contact: C. M. Wood III
Senior Vice President
Chief Financial Officer
(912) 226-9110
Marta Turner
Vice President of Public Affairs
(912) 227-2348
FLOWERS INDUSTRIES ADJUSTS
SECOND QUARTER AND FISCAL YEAR 1999 EARNINGS EXPECTATIONS
THOMASVILLE, GA; July 12, 1999--Flowers Industries, Inc. (NYSE: FLO) announced
today that its second quarter and full year earnings will be less than expected
by industry analysts due to production realignment costs and promotional
expenses at its Mrs. Smith's Bakeries business unit. Flowers Industries' other
businesses, Keebler Foods and Flowers Bakeries, are anticipated to perform
according to expectations for the second quarter as well as the full year.
The company expects earnings per share for the second quarter of fiscal 1999 of
approximately $.10 before the previously announced non-recurring charge at
Keebler. According to analysts, the consensus estimate is $.19 per share for
the second quarter. For the full year, the company now expects earnings per
share to be between $.98 to $1.05, compared to $.92 cents per share for fiscal
1998, before non-recurring charges for both years.
Amos R. McMullian, Flowers Industries' chairman and chief executive officer,
said Mrs. Smith's began a massive restructuring and relocation of its
production facilities 18 months ago in keeping with the company's strategy to
position Mrs. Smith's as the most efficient producer and marketer of frozen
baked foods serving customers nationwide. The project is the largest in the
company's history--costing over $150 million. This complex production
realignment includes relocating and upgrading 20 production lines, adding five
new lines and the construction of some 700,000 square feet of new building.
Seven of Mrs. Smith's 11 operating facilities have been impacted. "It is an
ambitious plan designed to make Mrs. Smith's a major competitive factor in the
frozen baked foods category in as short a time frame as possible," McMullian
said. "Unfortunately, the progressive start-up of the new production lines has
been delayed due to the timing of receipt and installation of certain
manufacturing equipment and related software. We now expect to have 22 of the
25 lines operational by the end of the third quarter with the remaining three
lines in place by the end of the year."
(more)
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The company expects operating income from Mrs. Smith's for the second quarter
and the fiscal year to be less than anticipated because of increased
administrative expenses, product promotional expenses, inventory carrying
costs, logistics, and start-up costs which can no longer be capitalized. "We
underestimated the time and cost to bring our realignment of Mrs. Smith's on
line," said McMullian. "In addition, our vigorous promotional efforts at Mrs.
Smith's have resulted in unanticipated levels of retail customer accommodations
and promotional costs.
"Mrs. Smith's continues to experience real revenue growth in retail,
foodservice and bakery/deli categories and our long-term outlook for this
business is still very positive," McMullian said. "Although revenue growth will
be slightly less than anticipated due to our transition delays, we expect Mrs.
Smith's to achieve approximately $750 million in sales (including intercompany)
for fiscal 1999, up from $673 million in 1998, including a 20% increase in our
national frozen baked foods business. Pricing, volume and retail share trends
continue to improve and operating margins should improve in fiscal 2000 as Mrs.
Smith's emerges from this transition and the cost structure improvement begins
to match sales growth.
Final second quarter results will be announced as scheduled on August 12, 1999.
Flowers Industries, Inc. is a national branded baked foods company operating
three business units--Keebler Foods (NYSE: KBL), Mrs. Smith's, and Flowers
Bakeries. In fiscal 1998, aggregate sales for the company were $3.8 billion.
The company's products are sold under such well-known brands as Keebler,
Cheez-It, Famous Amos, Mrs. Smith's, Pet-Ritz, Nature's Own, and Cobblestone
Mill.
Statements contained in this press release that are not historical facts are
forward-looking statements as that term is defined in the Private Securities
Litigation Reform Act of 1995. All forward-looking statements are subject to
risks and uncertainties that could cause actual results to differ from those
projected. Other factors that may cause actual results to differ from the
forward-looking statements contained in this release and that may affect the
Company's prospects in general include, but are not limited to, changes in
general economic and business conditions (including the baked foods markets),
the Company's ability to start the manufacturing lines according to schedule
and train personnel to run the new production capacity, the availability of
capital on acceptable terms, actions of competitors and customers, the extent
to which the Company is able to develop new products and markets for its
products, Y2K issues outside the Company's control and such other factors as
are described in the Company's filings with the Securities and Exchange
Commission.
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Exhibit 99.2
SECOND AMENDMENT TO CREDIT AGREEMENT
THIS SECOND AMENDMENT TO CREDIT AGREEMENT (this "Second Amendment") is
dated as of the 16th day of July, 1999, by and among FLOWERS INDUSTRIES, INC.
(the "Borrower"), the BANKS listed on the signature pages hereof (collectively,
the "Banks"), WACHOVIA BANK, N.A., as Agent (the "Agent"), THE BANK OF NOVA
SCOTIA, as Documentation Agent (the "Documentation Agent"), and NATIONSBANK,
N.A., as Syndications Agent (the "Syndications Agent");
W I T N E S S E T H:
WHEREAS, the Borrower, the Banks, the Agent, the Documentation Agent
and the Syndications Agent executed and delivered that certain Amended and
Restated Credit Agreement, dated as of January 30, 1998, as amended by a First
Amendment to Credit Agreement dated as of September 24, 1998 (as so amended, the
"Credit Agreement");
WHEREAS, the Borrower has requested and the Banks, the Agent, the
Documentation Agent and the Syndications Agent have agreed to a certain
amendment to the Credit Agreement, subject to the terms and conditions hereof;
NOW, THEREFORE, for and in consideration of the above premises and
other good and valuable consideration, the receipt and sufficiency of which
hereby is acknowledged by the parties hereto, the Borrower, the Banks, the
Agent, the Documentation Agent and the Syndications Agent hereby covenant and
agree as follows:
1. Definitions. Unless otherwise specifically defined herein,
each term used herein which is defined in the Credit Agreement shall have the
meaning assigned to such term in the Credit Agreement. Each reference to
"hereof", "hereunder", "herein" and "hereby" and each other similar reference
and each reference to "this Agreement" and each other similar reference
contained in the Credit Agreement shall from and after the date hereof refer to
the Credit Agreement as amended hereby.
2. Amendment to Section 5.17. Section 5.17 of the Credit
Agreement hereby is deleted in its entirety, and the following is substituted
therefor:
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SECTION 5.17. Adjusted Fixed Charges Coverage Ratio. At the
end of each Fiscal Quarter, commencing with the Fiscal Quarter ending
July 17, 1999, the ratio of Adjusted EBILT to Adjusted Consolidated
Fixed Charges shall at all times be greater than (i) for the Fiscal
Quarter ending July 17, 1999, 1.5 to 1.0, and (ii) for all Fiscal
Quarters thereafter, 2.0 to 1.0.
3. Substitution of New Compliance Certificate. Exhibit F to the
Credit Agreement hereby is modified by deleting par3 thereof and substituting
the following therefor:
3. Adjusted Fixed Charge Coverage Ratio (Section 5.17)
At the end of each Fiscal Quarter, commencing with the Fiscal
Quarter ending July 17, 1999, the ratio of Adjusted EBILT to
Adjusted Consolidated Fixed Charges shall at all times be
greater than (i) for the Fiscal Quarter ending July 17, 1999,
1.5 to 1.0, and (ii) for all Fiscal Quarters thereafter, 2.0
to 1.0.
(a) Adjusted Consolidated Net Income
Schedule 2 $
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(b) Adjusted Consolidated Interest
Expense - Schedule 2 $
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(c) payments on operating leases
and rental agreements $
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(d) taxes - Schedule 2 $
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(e) sum of (a) plus (b) plus (c)
plus (d) $
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(f) sum of (b) plus (c) $
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Ratio of (e) to (f)
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Requirement [> 1.5 to 1.0]
[> 2.0 to 1.0]
4. Restatement of Representations and Warranties. The Borrower
hereby restates and renews each and every representation and warranty heretofore
made by it in the Credit Agreement and the other Loan Documents as fully as if
made on the date hereof and with specific reference to this Second Amendment and
all other loan documents executed and/or delivered in connection herewith.
5. Effect of Amendment. Except as set forth expressly
hereinabove, all terms of the Credit Agreement and the other Loan Documents
shall be and remain in full force and effect, and shall constitute the legal,
valid, binding and enforceable obligations
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of the Borrower. The amendments contained herein shall be deemed to have
prospective application only, unless otherwise specifically stated herein.
6. Ratification. The Borrower hereby restates, ratifies and
reaffirms each and every term, covenant and condition set forth in the Credit
Agreement and the other Loan Documents effective as of the date hereof.
21. Counterparts. This Second Amendment may be executed in any
number of counterparts and by different parties hereto in separate counterparts,
each of which when so executed and delivered shall be deemed to be an original
and all of which counterparts, taken together, shall constitute but one and the
same instrument.
7. Section References. Section titles and references used in this
Second Amendment shall be without substantive meaning or content of any kind
whatsoever and are not a part of the agreements among the parties hereto
evidenced hereby.
8. No Default. To induce the Agent and the Banks to enter into
this Second Amendment and to continue to make advances pursuant to the Credit
Agreement, the Borrower hereby acknowledges and agrees that, as of the date
hereof, and after giving effect to the terms hereof, there exists (i) no Default
or Event of Default and (ii) no right of offset, defense, counterclaim, claim or
objection in favor of the Borrower arising out of or with respect to any of the
Loans or other obligations of the Borrower owed to the Banks under the Credit
Agreement.
9. Further Assurances. The Borrower agrees to take such further
actions as the Agent shall reasonably request in connection herewith to evidence
the amendments herein contained to the Borrower.
10. Governing Law. This Second Amendment shall be governed by
and construed and interpreted in accordance with, the laws of the State of
Georgia.
11. Condition Precedent. This Second Amendment shall become
effective only upon execution and delivery of this Second Amendment by the
Borrower, the Agent and the Required Banks.
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IN WITNESS WHEREOF, the Borrower, the Agent and each of the Banks has
caused this Second Amendment to be duly executed, under seal, by its duly
authorized officer as of the day and year first above written.
FLOWERS INDUSTRIES, INC.,
as Borrower (SEAL)
By: /s/ C. M. Wood, III
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Title: Senior Vice President and
Chief Financial Officer
WACHOVIA BANK, N.A., THE BANK OF NOVA SCOTIA, as
as Agent and as a Bank (SEAL) Documentation Agent and as
a Bank (SEAL)
By: /s/ J. Timothy Toler By: /s/ Darlo H. Smith
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Title: Senior Vice President Title:
NATIONSBANK, N.A., as FIRST UNION NATIONAL BANK
Syndications Agent and as as a Bank (SEAL)
a Bank (SEAL)
By: /s/ Michael Romanzo
By: /s/ Casey Cosgrove ----------------------
---------------------------------- Title: Bank Officer
Title: Vice President
THE FIRST NATIONAL BANK SUNTRUST BANK, ATLANTA,
OF CHICAGO, as a Bank (SEAL) as a Bank (SEAL)
By: /s/ David McNeela By: /s/ Michel A. Odermatt
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Title: Vice President Title: Vice President
COOPERATIEVE CENTRALE RAIFFEISEN-
BOERENLEENBANK B.A., "RABOBANK
NEDERLAND", NEW YORK BRANCH,
as a Bank (SEAL)
By: /s/ Theodore W. Cox
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Title: Vice President
By: /s/ Edward Peyser
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Title: Vice President
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