Filed Pursuant to Rule 424(b)(3)
File Number 333-46495
File Number 333-46495-01
FOURTH SUPPLEMENT TO THE OFFER AND CIRCULAR DATED OCTOBER 19, 1998
THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION. IF YOU HAVE
ANY QUESTIONS AS TO HOW TO DEAL WITH IT, YOU SHOULD CONSULT YOUR PROFESSIONAL
ADVISORS. NO SECURITIES COMMISSION OR SIMILAR AUTHORITY IN CANADA OR THE UNITED
STATES HAS IN ANY WAY PASSED UPON THE MERITS OF THE SECURITIES OFFERED
HEREUNDER AND ANY REPRESENTATION TO THE CONTRARY IS AN OFFENCE. INFORMATION
RELATING TO SMITHFIELD FOODS HAS BEEN INCORPORATED BY REFERENCE FROM DOCUMENTS
FILED BY SMITHFIELD WITH THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION
AND THE CANADIAN SECURITIES REGULATORY AUTHORITIES AND MAY BE OBTAINED ON
REQUEST WITHOUT CHARGE FROM THE SECRETARY OF SMITHFIELD FOODS AT 200 COMMERCE
STREET, SMITHFIELD, VIRGINIA, 23430.
NOTICE OF CHANGE
TO THE
OFFERS TO PURCHASE
ANY AND ALL OF THE OUTSTANDING COMMON SHARES AND CLASS A NON-VOTING SHARES OF
SCHNEIDER CORPORATION
BY
SMITHFIELD CANADA LIMITED
A WHOLLY-OWNED SUBSIDIARY OF
SMITHFIELD FOODS, INC.
This is a Supplement to Smithfield Canada's Offer and Circular dated
October 19, 1998, as previously supplemented on October 26, 1998, November 6,
1998 and November 18, 1998 (the "Offer and Circular"), and should be read in
conjunction therewith. The Offer and Circular is incorporated by reference in
this Supplement. Capitalized terms used in this Supplement without definition
have the meanings ascribed to them in the Offer and Circular.
Smithfield Canada Limited has offered to purchase, upon the terms and
subject to the conditions described in the Offer and Circular, each outstanding
Common Share and each Class A non-voting Share (including Class A Shares
issuable upon exercise of outstanding Options) of Schneider Corporation for
0.5415 of an Exchangeable Share of Smithfield Canada. Each whole Exchangeable
Share will be exchangeable for one share of the common stock of Smithfield
Foods. Smithfield Canada is a newly-incorporated, wholly-owned subsidiary of
Smithfield Foods. The Offers are open for acceptance (by Shareholders who did
not tender their Schneider Shares by November 18, 1998) until 5:00 p.m. (local
time at place of deposit) on December 1, 1998.
The closing price of the shares of Smithfield Common Stock on the Nasdaq
National Market on November 20, 1998 was US$25.0625. Based on such closing
price and using the United States/Canada currency exchange rate in effect on
that date (the Noon Spot Rate), the value of 0.5415 of a share of Smithfield
Common Stock was C$20.97.
The dealer manager for the Smithfield Offers (defined below) is First
Marathon Securities Limited. Questions and requests for assistance may be
directed to the Dealer Manager or to CIBC Mellon Trust Company, the Depositary
for the Smithfield Offers. Additional copies of this document, the Offer and
Circular and related materials may be obtained without charge on request from
the Depositary at its Toronto office specified on the back page of this
document.
FOR A DISCUSSION OF RISK FACTORS TO BE CONSIDERED BY SHAREHOLDERS IN
EVALUATING WHETHER TO ACCEPT THE OFFERS, SEE "RISK FACTORS" BEGINNING ON PAGE
16 OF THE OFFER AND CIRCULAR.
November 23, 1998
<PAGE>
1. RECENT DEVELOPMENTS
SMITHFIELD FOODS REPORTS RECORD SECOND QUARTER EARNINGS
Smithfield Foods today reported record second quarter earnings in fiscal
1999. Net income in the quarter ended November 1, 1998 increased to US$18.5
million, or US$.47 per diluted share, from US$15.5 million, or US$.39 per
diluted share, in the same quarter a year ago.
Net income in the first six months of fiscal 1999 increased to US$13.2
million, or US$.33 per diluted share, from net income of US$9.0 million, or
US$.23 per diluted share, in the six month period a year ago. The net income in
the first half of fiscal 1998 included a non-recurring charge of US$12.6
million (US$.32 per diluted share), which reflected penalties imposed against
Smithfield Foods in a case brought by the U.S. Environmental Protection Agency.
The judgment has been appealed. Excluding the non-recurring charge, the
Smithfield Foods had net income of US$21.6 million, or US$.55 per diluted
share, in the first half of fiscal 1998.
Sales for the second quarter of fiscal 1999 were US$874.4 million, down
from US$982.7 million in the same quarter of fiscal 1998. Sales for the first
six months of fiscal 1999 were US$1.7 billion, down from US$1.9 billion in the
same six-month period a year ago. The decrease in sales in both periods was due
to lower unit selling prices for Smithfield's products, reflecting
substantially lower hog and raw material prices, which were not totally offset
by increased unit sales volume in each period.
The record fiscal 1999 second quarter net income reflected substantially
improved operating results at Smithfield's Meat Processing Group which more
than compensated for losses at Smithfield's Hog Production Group.
The Meat Processing Group experienced sharply higher margins, especially
on sales of fresh pork, in this fiscal year's second quarter. While margins on
sales of processed meats were up, overall results in the processed meats area
of the Group's business were adversely affected by a sharp drop in exports of
hot dogs to Russia.
The Hog Production Group experienced a sharp reversal in profitability in
the current year's second quarter due to the lowest hog prices since 1971. The
Hog Production Group incurred a net loss of US$.22 per diluted share in this
year's second quarter compared to net income of US$.08 per diluted share in the
same quarter of fiscal 1998.
"Our second quarter results reinforces our belief that being vertically
integrated to the extent that we are takes the peaks and valleys out of our
earnings and, in effect, makes them more stable as well as predictable," Luter
stated.
"The brisk rate of business in the first three weeks of November further
confirms our expectation that fiscal 1999 third quarter earnings should set a
record," Luter said.
This Supplement may contain "forward-looking" information within the
meaning of United States federal securities laws. The forward-looking
information may include, among other information, statements concerning
Smithfield Foods' outlook for the future. There may also be other statements of
beliefs, future plans and strategies, anticipated events or trends and similar
expressions concerning matters that are not historical facts. The
forward-looking information and statements in this news release are subject to
known and unknown risks and uncertainties, including availability and prices of
raw materials, product pricing, competitive environment and related market
conditions, operating efficiencies, access to capital, integration of
acquisitions and changes in, or the failure or inability to comply with,
governmental regulation, including without limitation environmental and health
regulations, that could cause actual results to differ materially from those
expressed in or implied by the information or statements.
<PAGE>
CONSOLIDATED STATEMENTS OF OPERATIONS
SMITHFIELD FOODS, INC. AND SUBSIDIARIES
(ALL FIGURES ARE IN UNITED STATES DOLLARS)
<TABLE>
<CAPTION>
13 WEEKS ENDED 13 WEEKS ENDED 26 WEEKS ENDED 26 WEEKS ENDED
(IN THOUSANDS, EXCEPT PER SHARE DATA) NOVEMBER 1, 1998 OCTOBER 26, 1997 NOVEMBER 1, 1998 OCTOBER 26, 1997
- --------------------------------------- ------------------ ------------------ ------------------ -----------------
<S> <C> <C> <C> <C>
Sales ................................. $ 874,378 $ 982,699 $ 1,740,201 $ 1,897,662
Cost of sales ......................... 756,914 888,729 1,549,960 1,728,508
--------- --------- ----------- -----------
Gross profit .......................... 117,464 93,970 190,241 169,154
Selling, general and administrative
expenses ............................. 65,974 53,177 123,971 102,369
Depreciation expense .................. 14,015 10,353 26,954 20,068
Interest expense ...................... 10,916 8,036 20,622 15,403
Nonrecurring charge(1) ................ -- -- -- 12,600
--------- --------- ----------- -----------
Income before income taxes(1) ......... 26,559 22,404 18,694 18,714
Income taxes .......................... 8,078 6,856 5,538 9,707
--------- --------- ----------- -----------
Net income(1) ......................... $ 18,481 $ 15,548 $ 13,156 $ 9,007
--------- --------- ----------- -----------
Net income per common share:
Basic(1) ............................. $ .48 $ .41 $ .35 $ .24
Diluted(1) ........................... .47 .39 .33 .23
--------- --------- ----------- -----------
Average common shares outstanding:
Basic ................................ 38,273 37,527 37,905 37,527
Diluted .............................. 39,599 39,666 39,807 39,639
--------- --------- ----------- -----------
</TABLE>
(1) Reflects a nonrecurring charge of $12.6 million ($.32 per diluted share) for
the 26 weeks ended October 26, 1997 related to civil penalties in an
environmental case.
2. STATUTORY RIGHTS
Securities legislation in certain of the provinces and territories of
Canada provides holders of Schneider Shares with, in addition to any other
rights they may have at law, rights of recission or to damages, or both, if
there is a misrepresentation in a circular or a notice that is required to be
delivered to the holders of Schneider Shares. However, such rights must be
exercised within prescribed time limits. Holders of Schneider Shares should
refer to the applicable provisions of the securities legislation of their
province or territory for particulars of those rights, or consult with a
lawyer.
APPROVAL AND CERTIFICATE
The contents of the Offer and Circular (including the documents
incorporated by reference therein) and this Supplement have been approved, and
the sending, communication or delivery thereof to the Shareholders of Schneider
Corporation has been authorized by, the Board of Directors of Smithfield Canada
Limited. The foregoing contain no untrue statement of a material fact and do
not omit to state a material fact that is required to be stated or that is
necessary to make a statement not misleading in the light of the circumstances
in which it was made. In addition, the foregoing do not contain any
misrepresentation likely to affect the value or the market price of the
securities which are the subject of the Offers, as varied by this Supplement.
Dated: November 23, 1998.
(Signed) Joseph W. Luter, III (Signed) Aaron D. Trub
Chief Executive Officer Chief Financial Officer
On behalf of the Board of Directors
(Signed) Rene R. Sorell (Signed) Graham P.C. Gow
Director Director
<PAGE>
THE DEPOSITARY FOR THE OFFERS IS
CIBC MELLON TRUST COMPANY
FOR DELIVERY BY MAIL AND BY FACSIMILE TRANSMISSION:
CIBC MELLON TRUST COMPANY
P.O. Box 1036
Adelaide Street Postal Station
Toronto, Ontario
M5C 2K4
Attention: Special Projects
Telephone: (416) 643-5500
Toll Free: 1-800-387-0825
Fax: (416) 643-3148
FOR DELIVERY BY HAND OR COURIER:
CIBC Mellon Trust Company
199 Bay Street
Commerce Court West
Securities Level
Toronto, Ontario
M5L 1G9
Attention: Courier Window
<TABLE>
<S> <C> <C>
MONTREAL CALGARY VANCOUVER
2001 University Street 600 The Dome Tower Mall Level
16th Floor 333 Seventh Avenue S.W. 1177 West Hastings Street
Montreal, PQ 6th Floor Vancouver, BC
H3A 2A6 Calgary, AB V6E 2K3
T2P 2Z1
WINNIPEG HALIFAX REGINA
330 St. Mary Avenue 1660 Hollis Street 1080 - 2002 Victoria Avenue
Suite 201 Centennial Building, Main Floor Regina, SK
Winnipeg, MB Halifax, NS S4P 0R7
R3C 3Z5 B3J 1V7
</TABLE>
THE DEALER MANAGER OF THE OFFERS IS
FIRST MARATHON SECURITIES LIMITED
First Marathon Securities Limited
The Exchange Tower
2 First Canadian Place
Suite 3200, P.O. Box 21
Toronto, Ontario
M5X 1J9
Tel: (416) 869-3707
Fax: (416) 869-6411
