<PAGE> 1
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 September 30, 1998
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 33-36374-01
DEL MONTE FOODS COMPANY
(Exact name of registrant as specified in its charter)
Delaware 13-3542950
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
ONE MARKET, SAN FRANCISCO, CALIFORNIA 94105
(Address of principal executive office) (Zip Code)
Registrant's telephone number, including area code: (415) 247-3000
Indicate by check mark whether registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No
Indicate by check mark whether the registrant has filed all documents
and reports required to be filed by Section 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court. Yes [ ] No [ ]
As of October 30, 1998, 35,496,944 shares of Common Stock, par value
$.01 per share, were outstanding.
<PAGE> 2
DEL MONTE FOODS COMPANY AND SUBSIDIARIES
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page No.
--------
<S> <C>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheets
June 30, 1998 and September 30, 1998 1
Consolidated Statements of Operations
Three Months Ended September 30, 1997 and 1998 2
Consolidated Statements of Cash Flows
Three Months Ended September 30, 1997 and 1998 3
Notes to Consolidated Financial Statements 4
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations 8
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 11
Item 2. Changes in Securities 11
Item 3. Defaults Upon Senior Securities 11
Item 4. Submission of Matters to a Vote of Security Holders 11
Item 5. Other Information 11
Item 6. Exhibits and Reports on Form 8-K 11
SIGNATURES
</TABLE>
<PAGE> 3
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
DEL MONTE FOODS COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In Millions Except Per Share Data)
<TABLE>
<CAPTION>
June 30, September 30,
1998 1998
------- -------
(unaudited)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 7 $ 11
Trade accounts receivable, net of allowance 108 122
Other receivables 6 6
Inventories 366 693
Prepaid expenses and other current assets 14 7
---- ------
TOTAL CURRENT ASSETS 501 839
Property, plant and equipment, net 305 296
Intangibles 16 44
Other assets 23 22
---- ------
TOTAL ASSETS $845 $1,201
==== ======
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued expenses $259 $ 432
Short-term borrowings -- 202
Current portion of long-term debt 32 34
---- ------
TOTAL CURRENT LIABILITIES 291 668
Long-term debt 677 668
Other noncurrent liabilities 194 193
Redeemable preferred stock ($.01 par value per share, 1,000,000 shares
authorized; issued and outstanding: 37,253 at June 30, 1998,
aggregate liquidation preference:
$41 and 37,253 at September 30, 1998; aggregate liquidation preference: $43) 33 33
Stockholders' equity (deficit):
Common stock ($.01 par value per share, 500,000,000 shares
authorized; issued and outstanding: 35,495,058 at June 30, 1998 and
35,496,944 at September 30, 1998)
Paid-in capital 172 172
Retained earnings (deficit) (522) (533)
------ ------
TOTAL STOCKHOLDERS' EQUITY (DEFICIT) (350) (361)
------ ------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 845 $1,201
====== ======
</TABLE>
See Notes to Consolidated Financial Statements.
1
<PAGE> 4
DEL MONTE FOODS COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
(In Millions Except Per Share Data)
<TABLE>
<CAPTION>
Three Months
Ended
September 30,
---------------------
1997 1998
----- -----
<S> <C> <C>
Net sales $ 251 $ 318
Cost of products sold 172 218
Selling, administrative and general expenses 62 80
Special charges related to plant consolidation -- 7
Acquisition expense -- 1
----- -----
OPERATING INCOME 17 12
Interest expense 17 21
Other expense -- 2
----- -----
INCOME (LOSS) BEFORE INCOME TAXES -- (11)
Provision for income taxes -- --
----- -----
NET INCOME (LOSS) $ -- $ (11)
===== =====
Basic net loss per common shares $(0.06) $(0.34)
====== ======
Diluted net loss per common share $(0.06) $(0.34)
====== ======
</TABLE>
See Notes to Consolidated Financial Statements
2
<PAGE> 5
DEL MONTE FOODS COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
(In Millions)
<TABLE>
<CAPTION>
Three Months Ended
September 30,
---------------------
1997 1998
----- -----
<S> <C> <C>
OPERATING ACTIVITIES:
Net income (loss) $ -- $ (11)
Adjustments to reconcile net income (loss) to net cash flows
(used in) operating activities:
Depreciation and amortization 7 13
Loss on disposal of assets -- 3
Changes in operating assets and liabilities:
Accounts receivable (15) (14)
Inventories (285) (324)
Prepaid expenses and other current assets 6 7
Accounts payable and accrued expenses 132 173
Other non-current liabilities 2 --
----- -----
NET CASH USED IN OPERATING ACTIVITIES (153) (153)
----- -----
INVESTING ACTIVITIES:
Capital expenditures (2) (5)
Acquisition of business -- (32)
----- -----
NET CASH USED IN INVESTING ACTIVITIES (2) (37)
----- -----
FINANCING ACTIVITIES:
Short-term borrowings 189 256
Payments on short-term borrowings (34) (54)
Principal payments on long-term borrowings -- (8)
----- -----
NET CASH PROVIDED BY FINANCING ACTIVITIES 155 194
----- -----
Effect of exchange rate changes on cash and cash equivalents -- --
----- -----
NET CHANGE IN CASH AND CASH EQUIVALENTS -- 4
Cash and cash equivalents at beginning of period 5 7
----- -----
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 5 $ 11
===== =====
</TABLE>
See Notes to Consolidated Financial Statements.
3
<PAGE> 6
DEL MONTE FOODS COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
September 30, 1998
(In Millions Except Per Share Data)
NOTE 1 - BASIS OF FINANCIAL STATEMENTS
Basis of Presentation: The accompanying consolidated financial
statements at September 30, 1998 and for the three-month periods ended September
30, 1997 and 1998, are unaudited, but are prepared in accordance with generally
accepted accounting principles for interim financial information and include all
adjustments (consisting only of normal recurring entries) which, in the opinion
of management, are necessary for a fair presentation of financial position,
results of operations and cash flows. These unaudited consolidated financial
statements should be read in conjunction with the audited consolidated financial
statements as of and for the year ended June 30, 1998, and notes thereto,
included in the Annual Report on Form 10-K.
Stock Split. On July 22, 1998, the Company declared, by way of a stock
dividend effective July 24, 1998, a 191.542-for-one stock split of all of the
Company's outstanding shares of Common Stock (the "Stock Split"). Accordingly,
all share and per share amounts for all prior periods presented herein have been
retroactively adjusted to give effect to the Stock Split.
Depreciation and amortization. Depreciation of plant and equipment and
leasehold amortization was $6 and $12 for the three months ended September 30,
1997 and 1998, respectively. For the three months ended September 30, 1998, $4
of depreciation is related to acceleration of depreciation resulting from the
effects of adjusting the assets' remaining useful lives to match the period of
use prior to plant closure. (The accelerated depreciation is included in the
caption "Special charges related to plant consolidation" in the Consolidated
Statement of Operations.) Depreciation and amortization also includes $1 of
amortization of deferred debt issuance costs for both three-month periods ended
September 30, 1997 and 1998.
NOTE 2 - INVENTORIES
The major classes of inventory are as follows:
<TABLE>
<CAPTION>
June 30, September 30,
1998 1998
---- ----
<S> <C> <C>
Finished product $237 $629
Raw materials and supplies 19 27
Other, principally packaging material 110 37
---- ----
$366 $693
==== ====
</TABLE>
During the twelve months ended June 30, 1998 and the three months ended
September 30, 1997 and 1998, respectively, inflation had a minimal impact on
production costs. As a result, the effect of accounting for these inventories by
the LIFO method has had no material effect on inventories at June 30, 1998 and
September 30, 1998 or on results of operations for the three months ended
September 30, 1997 and 1998, respectively.
4
<PAGE> 7
DEL MONTE FOODS COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued
September 30, 1998
(In Millions Except Per Share Data)
NOTE 3 - EARNINGS PER SHARE
The following tables set forth the computation of basic and diluted
earnings per share:
<TABLE>
<CAPTION>
THREE MONTHS
ENDED
SEPTEMBER 30,
-------------------------------
1997 1998
------ ------
<S> <C> <C>
BASIC AND DILUTED EARNINGS PER SHARE
Numerator:
Loss per common share $-- $(11)
Preferred stock dividends (2) (1)
------ ------
Numerator for basic and diluted loss per share - loss
attributable to common shares $(2) $(12)
====== ======
Denominator:
Denominator for basic and diluted earnings per share - weighted
average shares 26,815,880 35,495,683
Basic and diluted loss per common share $(0.06) $(0.34)
</TABLE>
The effect of outstanding options is not included in the computation of
diluted earnings per share as the result would be antidilutive due to a net
operating loss.
NOTE 4 - ACQUISITIONS
On August 28, 1998, the Company reacquired rights to the Del Monte
brand in South America from Nabisco, Inc. and purchased Nabisco's canned fruit
and vegetable business in Venezuela, including a food processing plant in
Venezuela, for a cash purchase price of $32 (the "South America Acquisition").
In connection with the South America Acquisition, approximately $1 of
acquisition-related expenses were incurred which included a transaction advisory
fee to a designee of Texas Pacific Group, who owns a controlling interest in
the Company. Nabisco had retained ownership of the Del Monte brand in South
America and the Venezuela Del Monte business when it sold other Del Monte
businesses in 1990. The purchase price is subject to adjustment based on the
final calculation of the closing inventory amount. Such adjustment is not
expected to be material to the financial statements taken as a whole.
The South America Acquisition has been reflected in the balance sheet
at September 30, 1998. The acquisition was accounted for using the purchase
method of accounting. The total purchase price has been allocated to the
tangible and intangible assets acquired and liabilities assumed (consisting
primarily of inventory, property, plant and equipment, and tradename) based on
preliminary estimates of their respective fair values. Accordingly, adjustments
will be made based upon final determination of the purchase price adjustments
and completion of the valuations that are in progress. Results of operations of
the acquired business and any other expenses of the transaction are included in
the Consolidated Statement of Operations for the quarter ended September 30,
1998, and did not significantly effect the results of operations of the Company
for the period.
5
<PAGE> 8
DEL MONTE FOODS COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued
September 30, 1998
(In Millions Except Per Share Data)
NOTE 5 - PLANT CONSOLIDATION
In the third quarter of fiscal 1998, management committed to a plan to
consolidate the Company's tomato and fruit processing operations. In connection
with this plan, the Company established an accrual of $7 in fiscal 1998 relating
to severance and benefit costs for employees to be terminated. No expenditures
have been recorded against this accrual as of September 30, 1998. At this time,
there have been no significant changes to this plan.
During the quarter, the Company incurred total charges of $4
representing accelerated depreciation. This acceleration results from the
effects of adjusting the tomato and fruit processing assets' remaining useful
lives to match the period of use prior to the closures of these plants.
In August 1998, management announced its intention to close the
Company's vegetable processing plant located in Arlington, Wisconsin after the
summer 1998 pack. Upon completion of this pack, a charge of $3 was taken during
the quarter representing the write-down to fair value of the assets held for
sale. These assets primarily include building, building improvements, and
machinery and equipment with a carrying value of $4. Fair value was based on
current market values of land and buildings in the area and estimates of market
values of equipment to be disposed of. Based on the level of interest already
demonstrated in the facility by third parties, it is expected that these assets
will be disposed of within a year.
NOTE 6 - COMPREHENSIVE INCOME
The Company has no items of other comprehensive income in any period
presented. Therefore, net income (loss) as presented in the Consolidated
Statements of Operations equals comprehensive income.
NOTE 7 - NEW ACCOUNTING STANDARDS
In March 1998, the AICPA Accounting Standards Executive Committee
issued Statement of Position ("SOP") No. 98-1 "Accounting for the Cost of
Computer Software Developed or Obtained for Internal Use". This SOP provides
guidance with respect to the recognition, measurement and disclosure of costs of
computer software developed or obtained for internal use. SOP 98-1 is required
to be adopted for fiscal years beginning after December 15, 1998. The Company
will adopt this statement in fiscal 2000 and is currently evaluating the impact
on the Company's financial statements.
The Company will adopt Statement of Financial Accounting Standards
("SFAS") SFAS No. 131, "Disclosures about Segments of an Enterprise and Related
Information" for its 1999 fiscal year. This statement establishes annual and
interim reporting standards for an enterprise's operating segments and related
disclosures about its products, services, geographic areas, and major customers.
The Company is not required to disclose segment information in accordance with
SFAS No. 131 until its fiscal June 30, 1999 year end and for subsequent interim
periods in fiscal 2000 with comparative fiscal 1999 interim disclosures.
Adoption will not impact the Company's consolidated financial position, results
of operations or cash flows, and any effect will be limited to the form and
content of its disclosures.
Effective July 1, 1998, the Company adopted SFAS No. 132, "Employers'
Disclosures about Pensions and Other Postretirement Benefits." SFAS No. 132 is
required to be adopted for fiscal years beginning after December 15, 1997 and
amends only the disclosure requirements with respect to pensions and other
postretirement benefits. Adoption of this statement will not impact the
Company's consolidated financial position, results of operations or cash flows,
and any effect will be limited to the form and content of its disclosures.
6
<PAGE> 9
DEL MONTE FOODS COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued
September 30, 1998
In fiscal 1998, the Financial Accounting Standards Board ("FASB")
issued SFAS No. 133, "Accounting for Derivative Instruments and Hedging
Activities." SFAS No. 133 is required to be adopted for all fiscal quarters and
fiscal years beginning after June 15, 1999 and relates to accounting for
derivative instruments, including certain derivative instruments embedded in
other contracts, and hedging activities. It requires that an entity recognize
all derivatives as either assets or liabilities and measure those instruments at
fair value. The Company is currently reviewing the effect of adoption of this
statement on its financial statements.
7
<PAGE> 10
DEL MONTE FOODS COMPANY AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
September 30, 1998
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
THREE MONTHS ENDED SEPTEMBER 30, 1997 VS. THREE MONTHS ENDED SEPTEMBER 30, 1998
South America Acquisition. On July 10, 1998, the Company entered into
an agreement with Nabisco, Inc. ("Nabisco") to reacquire rights to the Del Monte
brand in South America and to purchase Nabisco's canned fruit and vegetable
business in Venezuela, including a food processing plant in Venezuela (the
"South America Acquisition"). The transaction closed on August 28, 1998 for a
cash purchase price of $32 million. In connection with the South America
Acquisition, approximately $1 million of acquisition-related expenses were
incurred. RJR Nabisco had retained ownership of the Del Monte brand in South
America and the Venezuela Del Monte business when it sold other Del Monte
businesses in 1990. The purchase price is subject to adjustment based on the
final calculation of the closing inventory amount. Such adjustment is not
expected to be material to the financial statements taken as a whole.
Net Sales. Consolidated net sales for the first fiscal quarter of 1999
increased by $67 million compared to the prior year quarter, primarily due to
higher volumes in the vegetable and fruit businesses and the purchase of
Contadina which accounted for $35 million of the increase. The vegetable and
fruit businesses have experienced an increase in sales volumes, and
correspondingly, an increase in net sales of 17% and 14%, respectively compared
to prior year period. For the 13 weeks ended September 26, 1998 as compared to
the comparable period in the prior year, the Company's vegetable market share,
based on case volume, has increased from 16.8% to 20.9%. Vegetable product sales
have increased in the current year quarter due to increased promotional
effectiveness. Fruit product sales have increased in first quarter 1999 as
compared to prior year quarter due to the introduction of new products
(FruitRageous, Fruit Pleasures and Orchard Select) which began national
distribution during the first quarter of fiscal 1999. The Company's market share
in the fruit category increased from 40.2% to 42.2% % for the 13 weeks ended
September 26,1998 as compared to the comparable period in the prior year.
Cost of Products Sold. Cost of products sold as a percent of net sales
was 68.5% for both the current year quarter and the prior year quarter.
Manufacturing costs are favorable in the current year as compared to the prior
year due to cost savings from capital spending initiatives and increased
production levels. Prior year manufacturing costs were adversely impacted by
lower yields and recoveries, as well as lower production volume affecting cost
absorption. The decrease in manufacturing costs has been offset by $2 million of
inventory step-up, attributable to the purchase price allocation related to the
acquisition of Contadina.
Selling, Administrative and General Expenses. Selling, administrative
and general expenses increased by $18 million versus the same period of the
prior year. This higher spending was due to a combination of promotion costs
associated with higher volumes of product sold (including the increase due to
the purchase of Contadina) as compared to the prior year quarter, together with
costs associated with the introduction of new products.
Special Charges Related to Plant Consolidation. Charges of $4 million
in the first quarter of fiscal 1999 result from accelerated depreciation of
buildings and machinery and equipment which will no longer be needed following
the consolidation of the operations of two fruit processing plants and two
tomato processing plants. Also included in the quarter in special charges was $3
million for the write-down to fair value of the assets held for sale, related to
the closure of the Arlington, Wisconsin plant.
8
<PAGE> 11
DEL MONTE FOODS COMPANY AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued
September 30, 1998
Interest expense. Interest expense increased by $4 million compared to
the prior year quarter, primarily due to debt incurred to fund the acquisition
of Contadina.
Other expense. Other expense for the quarter ended September 30, 1998
represents expenses of the cancelled public equity offering.
Net income (loss). Net loss for the quarter ended September 30, 1998
was $11 million as compared to no earnings for the quarter ended September 30,
1997. Although net sales have increased as compared to last year, the net loss
in the current quarter resulted from higher interest expense, special charges
related to the plant consolidation plan, inventory step-up related to the
acquisition of Contadina, and costs of the public equity offering which were
charged to earnings during the quarter upon the cancellation of the offering.
YEAR 2000
In the first quarter of fiscal 1998, the Company contracted with its
information services outsourcing provider, Electronic Data Systems Corporation
("EDS"), to assist the Company in implementation of the Company's Year 2000
compliance project. The Company's Year 2000 compliance project was initiated to
address the issue of computer hardware and software that are time-sensitive or
define dates using two digits rather than four. EDS maintains and operates most
of the Company's software applications and also owns and operates a significant
portion of the related hardware. The Company's compliance project includes both
information technology ("IT") systems and non-IT systems which could be impacted
by Year 2000 issues.
The Company's project to evaluate, modify, test and/or implement Year
2000 compliant systems (including customer and supplier assessments) is expected
to be completed by June 1999. Overall, the project is proceeding as scheduled
and is estimated to be 70% complete as of September 30,1998, with testing
ongoing as each system is modified.
Total cost of the project is not material to the Company's financial
position. Costs incremental to the base service contract between EDS and the
Company are expected to total under $2 million and are being funded through
operating cash flow. Approximately $1 million of this $2 million estimate has
been incurred as of September 30, 1998. The Company is expensing all costs
associated with these system changes as the costs are incurred.
The Company is continuing to conduct inquiries regarding the Year 2000
compliance programs of its key suppliers and customers and will continue to
update its understanding of the current status of their Year 2000 programs
throughout calendar 1999. No assurance can be given that the Company's suppliers
and customers will all be Year 2000 compliant. The failure of the Company's
suppliers and customers to address the Year 2000 issue adequately, or the
failure of any material aspect of the Company's Year 2000 compliance project
with respect to its own systems, could result in disruption to the Company's
operations and have a significant adverse impact on its results of operations,
the extent of which the Company cannot yet determine.
Although management believes the Company's systems will be Year 2000
compliant, the Company has begun developing contingency plans to address
internal system failures that may result from Year 2000 issues. These
contingency plans will identify alternatives for the Company's core business
operations, including the Company's key suppliers and customers, should there be
a Year 2000 system failure.
9
<PAGE> 12
DEL MONTE FOODS COMPANY AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued
September 30, 1998
FINANCIAL CONDITION - LIQUIDITY AND CAPITAL RESOURCES
The Company's primary cash requirements are to fund debt service,
finance seasonal working capital needs and make capital expenditures. Internally
generated funds and amounts available under its Revolving Credit Facility are
the Company's primary sources of liquidity.
As of September 30, 1998, the Company's short term borrowings and long
term debt primarily consisted of a revolving credit facility, bank term loans,
senior subordinated notes and senior discount notes (collectively, the "Debt").
The Debt agreements contain restrictive covenants, the most restrictive of which
currently is minimum EBITDA (as defined in the agreements). The Company is in
compliance with all such covenants for the first quarter of fiscal 1999.
The working capital requirements of the Company are seasonally affected
by the growing cycle of the vegetables, fruits and tomatoes it processes.
Substantially all inventories are produced during the harvesting and packing
months of June through October and depleted through the remaining seven months.
Accordingly, working capital requirements fluctuate significantly. The increase
in inventories at September 30, 1998 from June 30, 1998 reflects the seasonal
inventory buildup. The increase in accounts payable and accrued expenses from
June 30, 1998 to September 30, 1998 primarily reflects accrued expenses
resulting from the peak production period.
To finance this seasonal production, the Company relies on its
Revolving Credit Facility, which has a maximum availability of $350 million,
subject to an asset-based borrowing base. As of September 30, 1998, $202 million
was outstanding under the Revolving Credit Facility, compared to a zero balance
at June 30, 1998.
CERTAIN FORWARD-LOOKING STATEMENTS
Certain statements in this quarterly report under the captions
"Management's Discussion and Analysis of Financial Condition and Results of
Operations", "Financial Statements" and elsewhere constitute "forward-looking
statements" within the meaning of the Private Securities Litigation Reform Act
of 1995. Such forward-looking statements involve known and unknown risks,
uncertainties and other important factors that could cause the actual results,
performance or achievements of the Company, or industry results, to differ
materially from any future results, performances or achievements expressed or
implied by such forward-looking statements. Such risks and uncertainties and
other important factors include among others: general economic and business
conditions; weather conditions; crop yields; competition; raw material costs and
availability; the loss of significant customers; changes in business strategy or
development plans; availability, terms and deployment of capital; availability
of qualified personnel; changes in, or failure or inability to comply with,
governmental regulations, including, without limitation, environmental
regulations; industry trends and capacity, issues arising from addressing year
2000 compliance and other factors referenced in this quarterly report. These
forward-looking statements speak only as of the date of the quarterly report.
The Company expressly disclaims any obligation or undertaking to disseminate any
updates or revisions to any forward-looking statement contained herein to
reflect any change in the Company's expectations with regard thereto or any
change in events, conditions or circumstances on which any such statement is
based.
10
<PAGE> 13
DEL MONTE FOODS COMPANY AND SUBSIDIARIES
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS. None
ITEM 2. CHANGES IN SECURITIES. None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES. None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. None.
ITEM 5. OTHER INFORMATION. None.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits
(27) Financial Data Schedule
(b) Reports on Form 8-K
A Report on Form 8-K/A No. 3 was filed on July 6, 1998, which related
to the acquisition of Contadina on December 19, 1997.
A Report on Form 8-K was filed on July 15, 1998, which reported to the
Company entering into an agreement, on July 10, 1998, to reacquire
rights to the Del Monte brand in South America and to purchase Nabisco,
Inc.'s canned fruit and vegetable business in Venezuela.
A Report on Form 8-K was filed on July 29, 1998, which reported the
Company's financial results for the three and twelve months ended June
30, 1998.
A Report on Form 8-K was filed on July 29, 1998, which reported that
the Company's public equity offering was postponed due to conditions in
the public equity securities market.
11
<PAGE> 14
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF SECTION 13 OR 15(d) 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.
DEL MONTE FOODS COMPANY
Date: November 10, 1998
By: /s/ RICHARD G. WOLFORD
-------------------------------
Richard G. Wolford
Chief Executive Officer
By: /s/ DAVID L. MEYERS Date: November 10, 1998
-----------------------------
David L. Meyers
Executive Vice President, Administration
and Chief Financial Officer
S-1
<PAGE> 15
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit Number
- --------------
<S> <C>
27 Financial Data Schedule
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION FROM THE FINANCIAL
STATEMENTS OF DEL MONTE FOODS COMPANY FOR THE QUARTER ENDED SEPTEMBER 30, 1998,
AS PRESENTED IN THE COMPANY'S FORM 10-Q FILED FOR SUCH PERIOD, AND IS QUALIFIED
IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUN-30-1998
<PERIOD-START> JUL-01-1998
<PERIOD-END> SEP-30-1998
<CASH> 11
<SECURITIES> 0
<RECEIVABLES> 123
<ALLOWANCES> 1
<INVENTORY> 693
<CURRENT-ASSETS> 839
<PP&E> 482
<DEPRECIATION> 186
<TOTAL-ASSETS> 1,201
<CURRENT-LIABILITIES> 668
<BONDS> 0
33
0
<COMMON> 0
<OTHER-SE> (361)
<TOTAL-LIABILITY-AND-EQUITY> 1,201
<SALES> 318
<TOTAL-REVENUES> 318
<CGS> 218
<TOTAL-COSTS> 222
<OTHER-EXPENSES> 4
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 21
<INCOME-PRETAX> (11)
<INCOME-TAX> 0
<INCOME-CONTINUING> (11)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (11)
<EPS-PRIMARY> (0.34)
<EPS-DILUTED> (0.34)
</TABLE>
