FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Quarterly Report Under Section 13 or 15(d)
of the Securities Exchange Act of 1934
For Quarter Ended March 25, 1995
.................................................................
Commission file number 1-3390
.................................................................
Seaboard Corporation
.................................................................
(Exact name of registrant as specified in its charter)
Delaware 04-2260388
.................................................................
(State or other jurisdiction of (IRS Employer Identification
incorporation or organization). No.)
9000 W. 67th Street, Shawnee Mission, KS 66202
.................................................................
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including
area code 913-676-8800
...........................
.................................................................
Former name, former address and former 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 number of shares outstanding of each of the
issuer's classes of common stock, as of latest practicable date.
Common stock of $1 par value, 1,487,520 shares outstanding, as of
March 25, 1995.
Total pages in filing - 11 pages
<TABLE>
SEABOARD CORPORATION AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
March 25, 1995 and December 31, 1994
(Thousands of Dollars)
<CAPTION>
Part I - Financial Information
March 25, December 31,
1995 1994
------------ ------------
Assets
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 7,996 $ 4,773
Short-term investments 163,683 174,665
Receivables, net 118,338 104,695
Inventories 79,973 73,243
Deferred income taxes 7,227 6,914
Other current assets 9,483 7,705
--------- ---------
Total current assets 386,700 371,995
--------- ---------
Investments in and advances to foreign
subsidiaries not consolidated 28,447 30,453
--------- ---------
Property, plant and equipment 459,125 430,151
Accumulated depreciation (183,538) (175,080)
--------- ---------
Net property, plant and equipment 275,587 255,071
--------- ---------
Other assets 17,985 17,692
--------- ---------
Total assets $708,719 $675,211
========= =========
Liabilities and Stockholders' Equity
Current liabilities:
Notes payable and current maturities
of long-term debt $ 30,198 $ 23,984
Accounts payable 38,952 42,560
Income taxes payable 9,212 11,931
Other current liabilities 51,535 33,999
--------- ---------
Total current liabilities 129,897 112,474
--------- ---------
Long-term debt, less current maturities 182,447 177,666
--------- ---------
Deferred income taxes 19,246 18,810
--------- ---------
Other Liabilities 22,915 20,181
--------- ---------
Stockholders' equity:
Common stock of $1 par value,
Authorized 4,000,000 shares;
issued 1,789,599 shares 1,790 1,790
Less 302,079 shares held in treasury,
at par value 302 302
--------- ---------
1,488 1,488
Additional Capital 13,214 13,214
Unrealized loss on debt securities,
(net of deferred income taxes of $179
and $466 at March 25, 1995 and
December 31, 1994, respectively.) (298) (764)
Retained earnings 339,810 332,142
--------- ---------
Total stockholders' equity 354,214 346,080
--------- ---------
Total liabilities and stockholders' equity $708,719 $675,211
========= =========
<FN>
See notes to condensed consolidated financial statements.
</TABLE>
Page 2
<TABLE>
SEABOARD CORPORATION AND SUBSIDIARIES
Condensed Consolidated Statements of Earnings
Twelve weeks ended March 25, 1995 and March 26, 1994
(Thousands of dollars except per share amounts)
<CAPTION>
March 25, March 26,
1995 1994
---------- ----------
<S> <C> <C>
Net sales $235,923 $257,398
Cost of sales and operating expenses 193,836 221,329
--------- ---------
Gross income 42,087 36,069
Selling, general and administrative expenses 28,398 24,267
--------- ---------
Operating income 13,689 11,802
--------- ---------
Income (loss) from foreign subsidiaries not
consolidated (1,019) 799
--------- ---------
Other income (expense):
Interest income 2,301 1,744
Interest expense (2,534) (3,358)
Miscellaneous (47) 62
--------- ---------
Total other income (expense) (280) (1,552)
--------- ---------
Earnings before income taxes 12,390 11,049
--------- ---------
Income tax expense (benefit):
Current 4,531 2,817
Deferred (181) 756
--------- ---------
Total income taxes 4,350 3,573
--------- ---------
Net earnings $ 8,040 $ 7,476
========= =========
Earnings per common share $ 5.40 $ 5.03
========= =========
Dividends declared per common share $ .25 $ .25
========= =========
Average number of shares outstanding 1,487,520 1,487,520
========= =========
<FN>
See notes to condensed consolidated financial statements.
</TABLE>
Page 3
<TABLE>
SEABOARD CORPORATION AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
Twelve weeks ended March 25, 1995 and March 26, 1994
(Thousands of dollars)
<CAPTION>
March 25, March 26,
1995 1994
--------- ---------
<S> <C> <C>
Net cash provided by operating
activities $ 3,948 $ 1,164
---------- ----------
Cash flows from investing activities:
Purchase of investments (67,846) (197,599)
Proceeds from the sale and maturity of
investments 79,582 218,188
Capital expenditures, net (29,195) (11,045)
Notes receivable 1,014 355
Investments and advances to foreign
subsidiaries not consolidated 987 (1,057)
---------- ----------
Net cash (used in) provided by
investing activities (15,458) 8,842
---------- ----------
Cash flows from financing activities:
Notes payable to bank 6,488 (7,188)
Proceeds from long-term debt 5,943 1,896
Principal payments (1,436) (6,126)
Deferred grant revenue 2,993 -
Bond construction fund 1,117 -
Dividends paid (372) (372)
---------- ----------
Net cash provided by (used in)
financing activities 14,733 (11,790)
---------- ----------
Net increase (decrease) in cash and cash
equivalents 3,223 (1,784)
Cash and cash equivalents at beginning of year 4,773 7,110
---------- ----------
Cash and cash equivalents at end of quarter $ 7,996 $ 5,326
========== ==========
<FN>
Disclosure of accounting policy:
For purposes of the Condensed Consolidated Statements of Cash Flows, the
Company considers all demand deposits and overnight investments as cash
and cash equivalents.
See notes to condensed consolidated financial statements.
</TABLE>
Page 4
SEABOARD CORPORATION AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
Note 1
In the opinion of the Company, the accompanying unaudited condensed
consolidated financial statements reflect all adjustments (consisting of
normal recurring accruals) necessary to present fairly the financial
position as of March 25, 1995, and the results of operations and cash flows
for the twelve weeks ended March 25, 1995 and March 26, 1994.
Note 2
The results of operations for the twelve weeks ended March 25, 1995 and
March 26, 1994 are not necessarily indicative of the results to be expected
for the full year.
Note 3
<TABLE>
The following is a summary of inventories at March 25, 1995 and December
31, 1994 (in thousands):
<CAPTION>
March 25, December 31,
1995 1994
---------- ------------
<S> <C> <C>
At lower of last-in, first-out (LIFO) cost
or market:
Live poultry $22,640 $22,230
Dressed poultry 17,086 13,344
Feed and baking ingredients, packaging
supplies and other 6,579 6,121
---------- ----------
46,305 41,695
LIFO allowance (1,965) (1,390)
---------- ----------
Total inventories at lower of
LIFO cost or market 44,340 40,305
---------- ----------
At lower of first-in, first-out (FIFO) cost or market:
Live hogs 11,433 10,122
Grain, flour and feed 9,383 7,622
Crops in production, fertilizers and
pesticides 5,014 6,132
Dressed pork 3,025 2,523
Other 6,778 6,539
---------- ----------
Total inventories at lower of
FIFO cost or market 35,633 32,938
---------- ----------
Total inventories $79,973 $73,243
========== ==========
</TABLE>
Page 5
First Quarter 1995
Management's Discussion and Analysis of
Financial Condition and Results of Operations
Liquidity and Capital Resources
Liquidity, as measured by current ratio and working capital, are presented
as follows:
March 25, 1995 December 31, 1994
-------------- -----------------
Current Ratio 2.98 3.31
Working Capital
(in thousands) $256,803 $259,521
The Company generated $3.9 million in cash from operating activities for
the quarter ending March 25, 1995 compared to $1.2 million for the quarter
ending March 26, 1994. The change includes increases in accounts receivable
relating to higher export and transportation sales which have longer
collection terms and higher accrued liabilities related to incomplete
voyages.
The Company invested $24.2 million in property, plant and equipment through
March 25, 1995 in the food production and processing segment. Capital
expenditures of $16.3 million were for construction of hog farrowing and
finishing facilities, a feedmill and a pork processing plant. The facilities
are located in Oklahoma, Colorado, Kansas and Texas. Cumulative capital
expenditures on these facilities since 1992 total $81.4 million. The Company
expects additional expenditures for facilities and working capital to total
approximately $185.0 million in the next two years, of which approximately
$89.3 million is currently under contract. Management anticipates the
facilities will be financed with additional senior notes and cash generated
from operations.
Other capital expenditures in the food production and processing segment
through March 25, 1995 consisted of $7.9 million in general modernization
and efficiency upgrades of plant and equipment.
During the quarter, the Company borrowed the proceeds of $3.3 million in
Industrial Development Revenue Bonds issued by the Guymon Utilities Authority.
The funds are being used to construct a waste pre-treatment facility for the
Company's pork processing plant currently under construction in Guymon,
Oklahoma.
Capital expenditures in the transportation segment for general replacement
and upgrade of property and equipment through March 25, 1995, totaled $4.8
million, of which $2.6 million was financed through a capitalized lease and
the balance was paid with cash.
Subsequent to March 25, 1995, the Company plans to purchase two containerized
cargo vessels to be used in its ocean liner service. The purchase price of
$14.5 million will be paid from internal cash sources.
Page 6
Liquidity and Capital Resources (continued)
Subsequent to March 25, 1995, commitments, subject to the negotiation of
definitive documentation, were made by various institutional investors to
purchase $125.0 million of the Company's senior notes with average maturities
of ten years at a fixed rate of 7.88%. It is anticipated that this private
placement will be closed in the second quarter of 1995.
As of March 25, 1995 and December 31, 1994, the Company had $27.1 million
and $20.6 million, respectively, outstanding under the Company's short-term
uncommitted, unsecured credit lines from banks totaling $122.0 million.
Management intends to continue seeking opportunities for expansion in the
industries in which it operates and believes that the Company's liquidity,
capital resources and borrowing capabilities are adequate for its current
and intended operations.
Results of Operations
Net sales for the twelve weeks ended March 25, 1995 decreased by $21.5 million
compared to the same quarter one year earlier. Operating income increased
by $1.9 million compared to the same quarter one year ago.
The segment distribution of the increase (decrease) in sales and operating
income compared to the prior year are as follows (in thousands):
Net Sales Operating Income
-------------- ----------------
Food production and processing $(33,000) $ 3,149
Transportation 8,746 (1,620)
Other 2,779 358
-------------- ----------------
$(21,475) $ 1,887
============== ================
Food Production and Processing Segment
Net sales of pork products and live hogs declined from $50.2 million in the
first quarter of 1994 to $18.1 million in 1995. This resulted from
discontinuing the fresh pork operations at the Company's Minnesota processing
plant in March 1994. The ongoing operations of the plant consist of processed
meats. Gross income in the pork operations declined from $1.3 million in 1994
to a negative $0.4 million for the quarter ending March 25, 1995 primarily due
to the live hog operations reporting negative gross income in the first
quarter of 1995 resulting from higher production costs as the live operations
are in a start-up phase.
Page 7
Results of Operations (continued)
Net sales of poultry products increased by $6.0 million during the quarter
compared to the same period one year earlier to total $95.8 million. The
increase in net sales of poultry products was primarily related to increased
sales volume at the Company's poultry processing plant in Western Kentucky.
Gross income on poultry products increased from $6.4 million to $11.2 million
for the comparable quarter ending March 25, 1995. The increase in gross
income resulted primarily from lower finished feed costs, which represent a
significant percentage of total poultry product costs, and an increase in
pounds of poultry products sold.
Operating income within the food production and processing segment increased
compared to the same quarter one year earlier. The increase was primarily
related to decreases in finished poultry feed costs resulting in higher
margins as described above. The net increase in operating income includes
an operating loss from the pork operations resulting from expenses incurred
in advance of the opening of the processing plant now being constructed in
Guymon, Oklahoma.
Transportation Segment
Net sales in the transportation segment increased for the quarter compared
to the same period one year earlier. The increase resulted from new services
to South America and the Caribbean Basin and increased volume within existing
services in Central America.
Operating income decreased compared to the same period one year ago. The
decrease is primarily related to increased operating costs resulting from
new services.
Selling, General and Administrative Expenses
Selling, general and administrative expenses increased by $4.1 million during
the quarter compared to the same period one year earlier. The increase is
primarily attributable to staffing and expenses relating to pork operations
in advance of the opening of the processing plant now being constructed in
Guymon, Oklahoma. In addition, selling, general and administrative costs
increased as a result of additional marketing and administrative support of
expanded shipping routes and product lines.
Other
Interest expense decreased during the quarter compared to the same period
one year ago principally because the Company retired $26.3 million of
long-term debt in the fourth quarter of 1994. A significant portion of the
Company's debt has fixed rates of interest, and therefore increasing interest
rates did not have a significant effect on interest expense. Interest rate
exchange agreements resulted in additional interest expense of $0.5 million
in the first quarter of 1994.
Foreign currency gains and losses included in earnings for the first quarter
of 1995 and 1994 were not material.
Page 8
Results of Operations (continued)
The effective income tax rate for the quarter ending March 25, 1995 increased
compared to the same quarter one year ago. The increase is primarily related
to the expiration of the Targeted Jobs Tax Credit.
The Company does not believe its businesses have been materially adversely
affected by inflation.
Page 9
SEABOARD CORPORATION AND SUBSIDIARIES
PART II - OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders
The annual meeting of stockholders was held on April 24, 1995 in Newton,
Massachusetts. Two items were submitted to a vote of stockholders as
described in the Company's Proxy Statement dated March 31, 1995. The table
below briefly describes the proposals and results of the stockholders' vote:
Votes in Votes Broker
Favor Against Abstain Nonvotes
1. To elect:
H. Harry Bresky, 1,434,271 0 510 0
Joe E. Rodrigues, 1,434,281 0 500 0
David A. Adamsen 1,434,281 0 500 0
and Thomas J. Shields 1,434,281 0 500 0
as directors.
2. To ratify selection of
KPMG Peat Marwick LLP
as independent
auditors. 1,434,291 275 215 0
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits required to be filed by item 601 of Regulation S-K and
by Item 6(a) of Instruction.
27 Financial Data Schedule
(b) Reports on Form 8-K. Seaboard Corporation has not filed any
reports on Form 8-K during the twelve week period ended March 25, 1995.
Page 10
PART II - OTHER INFORMATION
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.
DATE: May 8, 1995
Seaboard Corporation
by: /s/ Rick J. Hoffman
Rick J. Hoffman, Vice President
by: /s/ Jesse H. Bechtold
Jesse H. Bechtold, Chief Accounting Officer
Page 11
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FIRST QUARTER 10-Q FILING AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE
TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0000088121
<NAME> SEABOARD CORPORATION
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> MAR-25-1995
<CASH> 7996
<SECURITIES> 163683
<RECEIVABLES> 118338
<ALLOWANCES> 10347
<INVENTORY> 79973
<CURRENT-ASSETS> 386700
<PP&E> 459125
<DEPRECIATION> 183538
<TOTAL-ASSETS> 708719
<CURRENT-LIABILITIES> 129897
<BONDS> 182447
<COMMON> 1488
0
0
<OTHER-SE> 352726
<TOTAL-LIABILITY-AND-EQUITY> 708719
<SALES> 235923
<TOTAL-REVENUES> 235923
<CGS> 193836
<TOTAL-COSTS> 193836
<OTHER-EXPENSES> 28398
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 2534
<INCOME-PRETAX> 12390
<INCOME-TAX> 4350
<INCOME-CONTINUING> 8040
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 8040
<EPS-PRIMARY> 5.4
<EPS-DILUTED> 5.4
</TABLE>
