<PAGE>
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 thirteen weeks ended April 1, 1995
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 1-5084
TASTY BAKING COMPANY
(Exact name of registrant as specified in its charter)
Pennsylvania 23-1145880
(State of Incorporation) (IRS Employer Identification Number)
2801 Hunting Park Avenue
Philadelphia, Pennsylvania 19129
(Address of principal executive offices) (Zip Code)
Telephone: 215-221-8500
(Registrant's Telephone Number, including area code)
N O N E
- --------------------------------------------------------------------------------
(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 the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Class Outstanding at April 1, 1995
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Common stock, par value $.50 6,134,402 shares
Index of exhibits is located on page 8 of 9.
1 of 9
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TASTY BAKING COMPANY AND SUBSIDIARY
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INDEX
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Page Number
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Part I - Financial Information
Item 1. Financial Statements
Consolidated Condensed Balance Sheets -
April 1, 1995 and December 31, 1994 3
Consolidated Condensed Statements of Operations -
13 weeks Ended April 1, 1995 and April 2, 1994 4
Consolidated Condensed Statements of Cash Flows -
13 Weeks Ended April 1, 1995 and April 2, 1994 5
Notes to Consolidated Condensed Financial Statements 6
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 7
Part II - Other Information
Item 6. Exhibits and Reports on Form 8-K 8
Signatures 9
2 of 9
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TASTY BAKING COMPANY AND SUBSIDIARY
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CONSOLIDATED CONDENSED BALANCE SHEETS
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(unaudited)
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
April 1, Dec. 31,
1995 1994
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<S> <C> <C>
Current assets:
Cash $ 282,190 $ 147,251
Accounts and notes receivable,
net of allowance for doubtful accounts 21,088,385 17,574,423
Inventories:
Raw materials 1,514,282 1,657,926
Work in progress 735,214 633,909
Finished goods 520,189 645,225
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2,769,685 2,937,060
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Deferred income taxes,
prepayments and other 4,121,668 3,681,528
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Total current assets 28,261,928 24,340,262
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Property, plant and equipment 123,399,682 122,001,864
Less accumulated depreciation 85,933,801 84,063,636
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37,465,881 37,938,228
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Long-term receivables 10,929,883 10,872,115
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Deferred income taxes 10,608,205 10,830,705
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Other assets and deferred charges 3,072,914 3,155,286
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Total assets $ 90,338,811 $ 87,136,596
============ ============
<CAPTION>
April 1, Dec. 31,
1995 1994
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<S> <C> <C>
Current liabilities:
Current portion of long-term debt $ 222,831 $ 222,831
Current obligations under capital leases 470,077 455,712
Notes payable, banks 1,300,000 1,800,000
Accounts payable 5,793,454 4,075,343
Accrued liabilities 4,829,269 4,552,843
Accrued income taxes 1,579,257 893,111
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Total current liabilities 14,194,888 11,999,840
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Long-term debt, less
current portion 5,295,190 5,349,558
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Long-term obligations under capital
leases, less current portion 2,047,837 2,166,293
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Deferred income 2,793,083 3,271,268
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Accrued pensions and other
liabilities 12,093,619 11,691,444
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Postretirement benefits
other than pensions 19,819,176 19,707,364
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SHAREHOLDERS' EQUITY
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Common stock 3,644,544 3,644,544
Capital in excess of par value of stock 29,175,510 29,175,510
Retained earnings 18,340,597 17,228,764
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51,160,651 50,048,818
Less:
Treasury stock, at cost 16,614,192 16,601,793
Management Stock Purchase Plan
receivables and deferrals 451,441 496,196
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34,095,018 32,950,829
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Total liabilities and
shareholders' equity $90,338,811 $87,136,596
=========== ===========
</TABLE>
See accompanying notes to consolidated condensed financial statements.
3 of 9
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TASTY BAKING COMPANY AND SUBSIDIARY
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CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
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(Unaudited)
<TABLE>
<CAPTION>
For the 13 Weeks Ended
----------------------
04/01/95 04/02/94
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<S> <C> <C>
Net Sales $37,064,267 $37,068,932
Costs and expenses:
Cost of sales 23,153,106 22,205,867
Depreciation 1,884,144 1,789,585
Selling, general and administrative 9,370,648 10,521,813
Interest expense 164,908 174,995
Other income, net (907,545) (826,608)
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33,665,261 33,865,652
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Income before provision for income taxes 3,399,006 3,203,280
Provision for income taxes 1,428,130 1,294,716
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Net income $ 1,970,876 $ 1,908,564
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Average common shares outstanding 6,148,975 6,137,911
Per share of common stock:
Net income $.32 $.31
==== ====
Cash dividend $.14 $.13
==== ====
</TABLE>
See accompanying notes to consolidated condensed financial statements.
4 of 9
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TASTY BAKING COMPANY AND SUBSIDIARY
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CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
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(Unaudited)
<TABLE>
<CAPTION>
For the 13 Weeks Ended
----------------------
04/01/95 04/02/94
-------- --------
<S> <C> <C>
Cash flows from (used for) operating activities
Net income $ 1,970,876 $ 1,908,564
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation 1,884,144 1,789,585
Amortization 13,614 15,610
Deferred taxes 222,500 199,138
Other 82,648 631,537
Changes in assets and liabilities affecting
operations (1,106,044) (2,380,486)
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Net cash from operating activities 3,067,738 2,163,948
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Cash flows from (used for) investing activities
Proceeds from owner/operator's loan repayments 924,200 968,894
Purchase of property, plant and equipment (1,411,797) (1,154,971)
Loans to owner/operators (981,968) (988,574)
Other 54,268 20,558
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Net cash used for investing activities (1,415,297) (1,154,093)
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Cash flows used for financing activities
Dividends paid (859,043) (797,738)
Payment of long-term debt (158,459) (190,297)
Net decrease in short-term debt (500,000) (100,000)
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Net cash used for financing activities (1,517,502) (1,088,035)
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Net increase (decrease) in cash 134,939 (78,180)
Cash, beginning of year 147,251 141,026
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Cash, end of period $ 282,190 $ 62,846
=========== ===========
Supplemental Cash Flow Information:
Cash paid during the period for:
Interest $ 161,573 $ 215,962
=========== ===========
Income taxes $ 519,742 $ 281,895
=========== ===========
</TABLE>
See accompanying notes to consolidated condensed financial statements.
5 of 9
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NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
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1. In the opinion of management, the accompanying unaudited consolidated
condensed financial statements contain all adjustments (consisting of only
normal recurring accruals) necessary to present fairly the financial
position of the company as of April 1, 1995 and December 31, 1994 and the
results of its operations for the 13 weeks ended April 1, 1995 and April 2,
1994 and cash flows for the 13 weeks ended April 1, 1995 and April 2, 1994.
These unaudited consolidated condensed financial statements should be read
in conjunction with the consolidated financial statements and footnotes
thereto in the company's 1994 Annual Report to Shareholders.
2. The results of operations for the 13 weeks ended April 1, 1995 are not
necessarily indicative of the results to be expected for the full year.
3. Advertising expenses and certain other expense items are charged to
operations in the year incurred. However, for interim reporting purposes
the expenses are charged to operations on a pro-rata basis over the
company's accounting periods. For the 13 weeks ended April 1, 1995 and
April 2, 1994, the difference between the actual expenses incurred and the
expenses charged to operations was not significant.
4. Per share amounts are based on the weighted average number of common
shares and equivalent shares outstanding during the quarter.
6 of 9
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Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
---------------------------------------------
Results of Operations
- ---------------------
For the first quarter of 1995, the company realized net income of $1,970,876
versus $1,908,564 for the first quarter of 1994. Net income per share increased
3% to $.32 from $.31 per share for the comparable quarter of 1994.
Net sales for the first quarter of 1995 were $37,064,267 versus $37,068,932 for
the comparable period in 1994. Unit sales also remained relatively unchanged as
the company encountered heavy competitive promotional activity and market
conditions that were less favorable than anticipated.
Cost of sales in the first quarter of 1995 increased by 4.3% over the first
quarter of 1994 due to higher ingredient and packaging costs. In addition, 1995
cost of sales includes approximately $797,000 of shipping case costs. In 1994,
shipping case costs of approximately $695,000 are reflected in operating
expenses. This change in classification was done as a result of a change in
operating policy that treats shipping cases as completely disposable items.
Depreciation expense increased in the first quarter of 1995 by 5.3% over the
first quarter of 1994 due to the installation of new electrical transformers
and the completion of a new telephone system in the fourth quarter of 1994.
The decrease in interest expense for the first quarter of 1995 versus the
first quarter of 1994 was the result of lower average borrowing levels.
The effective tax rates on net income for the quarters ended April 1, 1995 and
April 2, 1994 were 42.0% and 40.4%, which compares to a federal statutory rate
of 34.0%. The principle reason for the difference between the effective rates
and the statutory rate in 1995 and 1994 was the effect of state income taxes.
Financial Condition
- -------------------
The company has consistently demonstrated the ability to generate sufficient
cash for working capital from operations. Bank borrowings, under various
lines of credit arrangements, are used to supplement cash flow form operations
during periods of cyclical shortages.
For the 13 weeks ended April 1, 1995, net cash from operating activities
increased by $903,790 to $3,067,738 from $2,163,948 for the same period in
1994. Net cash from operating activities for the quarter ended April 1, 1995
was positively impacted by changes in working capital, depreciation and net
income relative to the comparable quarter in 1994.
Net cash used for investing activities increased by $261,204 over the
comparable quarter in 1994 principally from expenditures on property, plant
and equipment. Net cash used for financing activities increased by $429,467
relative to the same period in 1994. This increase is primarily the result of a
further reduction in short-term debt of $400,000 and an increase in dividend
payments of $61,305 relative to the prior year.
For the remainder of 1995 the company anticipates that cash flow from
operations, along with the continued availability of bank lines of credit,
revolving credit agreements and other long-term financing, will provide
sufficient cash to meet operating and financing requirements.
7 of 9
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Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits: Exhibit 27 Financial Data Schedule
(b) Reports on Form 8-K
The registrant did not file a report on Form 8-K during the thirteen
weeks ended April 1, 1995.
Exhibit Index
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Exhibit 27 Financial Data Schedule
8 of 9
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SIGNATURES
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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.
TASTY BAKING COMPANY
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(Registrant)
Date: May 15, 1995
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John M. Pettine
Vice President and
Chief Financial Officer
(Principal Financial and Accounting Officer)
9 of 9
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM CONSOLIDATED
CONDENSED BALANCE SHEETS AT APRIL 1, 1995 AND DECEMBER 31, 1994 AND CONSOLIDATED
CONDENSED STATEMENTS OF OPERATIONS FOR THE 13 WEEKS ENDED APRIL 1, 1995 AND
APRIL 2, 1994 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 4-MOS
<FISCAL-YEAR-END> DEC-30-1995
<PERIOD-END> APR-01-1995
<CASH> 282
<SECURITIES> 0
<RECEIVABLES> 21,089
<ALLOWANCES> 0
<INVENTORY> 2,770
<CURRENT-ASSETS> 28,262
<PP&E> 123,400
<DEPRECIATION> 85,934
<TOTAL-ASSETS> 90,339
<CURRENT-LIABILITIES> 14,195
<BONDS> 7,343
<COMMON> 3,645
0
0
<OTHER-SE> 30,450
<TOTAL-LIABILITY-AND-EQUITY> 90,339
<SALES> 37,064
<TOTAL-REVENUES> 37,064
<CGS> 23,153
<TOTAL-COSTS> 23,153
<OTHER-EXPENSES> 1,884
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 165
<INCOME-PRETAX> 3,399
<INCOME-TAX> 1,428
<INCOME-CONTINUING> 1,971
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,971
<EPS-PRIMARY> .32
<EPS-DILUTED> .32
</TABLE>
