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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the Fiscal Year Ended September 30, 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 1-7626
UNIVERSAL FOODS CORPORATION
(Exact name of registrant as specified in its charter)
Wisconsin 39-0561070
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
433 East Michigan Street
Milwaukee, Wisconsin 53202
(Address of principal executive (Zip Code)
offices)
Registrant's telephone number, including area code:
(414) 271-6755
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT
Name of each exchange
Title of each class on which registered
Common Stock, $.10 par value New York Stock Exchange, Inc.
Associated Common Share
Purchase Rights
SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT
None
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 such shorter
period that the Registrant was required to file such reports), and (2) has
been subject to such filing requirements for at least the past 90 days.
Yes X No
Indicate by check mark if disclosure of delinquent filers
pursuant to Item 405 of Regulation S-K is not contained herein, and will
not be contained, to the best of registrant's knowledge, in definitive
proxy or information statements incorporated by reference in Part III of
this Form 10-K or any amendment to this Form 10-K.
Indicate the number of shares outstanding of each of the
issuer's classes of Common Stock as of December 1, 1995: 26,977,437
shares of Common Stock, $.10 par value, including 863,500 treasury shares.
Aggregate market value of Universal Foods Corporation Common
Stock, excluding treasury shares, held by non-affiliates as of December 1,
1995 was $873,323,603.
Documents Incorporated By Reference
1. Portions of Universal Foods Corporation 1995 Annual Report
to Shareholders (Parts I, II and IV of Form 10-K)
2. Portions of Universal Foods Corporation Notice of Annual
Meeting and Proxy Statement dated December 15, 1995 (Parts II and III of
Form 10-K)
PART I
ITEM 1. BUSINESS - Food
Universal Foods Corporation (the "Company") was incorporated in 1882
in Wisconsin. Its principal executive offices are located at 433 East
Michigan Street, Milwaukee, Wisconsin 53202, telephone (414) 271-6755.
The Company engages in the international development, manufacture and
distribution of high-performance ingredients and ingredient systems to
food products and other items. Principal products of the Company include
food, beverage and dairy flavors; certified and natural colors for foods,
cosmetics and pharmaceuticals; dehydrated vegetable products; a diverse
line of yeast products; and flavor enhancers, secondary flavorings and
other bioproducts. The Company exited the frozen potato business during
Fiscal 1994.
The following material from the Universal Foods Corporation 1995
Annual Report to Shareholders is incorporated by reference:
"Management's Analysis of Operations and Financial Condition" on
Pages 18 through 21 (but not any photographs or applicable
information included therein).
Note A - "Summary of Significant Accounting Policies" on Page
27.
Note K - "Foreign Operations" on Page 32.
Description
Flavor
The Company conducts its food flavor business through its wholly-
owned subsidiary Universal Flavor Corporation ("Universal Flavor").
Universal Flavor manufactures and supplies flavors, ingredient systems and
fragrances to the dairy, food processor, beverage and personal care and
household products industries worldwide and is a recognized leader in the
North American dairy and beverage flavor markets. It operates plants
located in Kearny, New Jersey; Amboy, Illinois; Indianapolis, Indiana; and
Fenton, Missouri. Universal Flavor has eleven additional plants in
Canada, Mexico, Belgium, Great Britain, Italy, Spain, Australia, New
Zealand, Hong Kong and the Philippines. Products are sold primarily
through employee sales representatives with some assistance from food
brokers.
Strategic acquisitions have expanded Universal Flavor's product lines
and processing capabilities. In April 1990, the Company acquired the
international flavor business of Felton Worldwide, a subsidiary of
Harrisons and Crosfield, PLC, of Great Britain. This acquisition
strengthened Universal Flavor's position as a major flavor producer in
Great Britain and gave Universal Flavor a larger presence on the European
continent and in the Pacific Rim. In September 1991, the Company acquired
Fantasy Flavors, Inc. Combining Fantasy's product lines with the
Company's existing BlankeBaer operation positioned Universal Flavor as the
premier dairy ingredient systems supplier in North America. The January
1992 acquisition of Curt Georgi Imes, S.P.A. brought particular strength
in the Italian bakery and dairy flavor markets, as well as experienced
research and development and sophisticated analytical capabilities. The
January 1994 acquisition of Destillaciones Garcia de la Fuente, S.A.
(DGF), based in Granada, Spain, provided a depth of expertise for
expanding into aroma chemicals which are used to create flavors as well as
fragrances. In July 1994, Universal Flavor, through its international
subsidiary, purchased its partner's 51% interest in Azteca en Ambesco de
Mexico. This purchase brought beverages and dairy flavor technology to
the Company's other existing Mexican flavor business.
Color
The Company, through its subsidiary Warner-Jenkinson Company ("W-J"),
is the world's leading manufacturer of certified food colors. It also has
a growing share of the international natural color market. Its products,
sold under such trademarks as RED SEAL and SPECTRACOAT, are used by
producers of beverages, bakery products, processed foods, confections, pet
foods, cosmetics and pharmaceuticals. W-J is headquartered in St. Louis,
Missouri, the site of its major manufacturing facilities. Cosmetic and
pharmaceutical colors are produced in New Jersey. Latin American
customers are served by W-J de Mexico, S.A. de C.V., a manufacturing and
sales subsidiary located just outside of Mexico City. W-J Canada
(formerly Dyeco Ltd.) operates out of Kingston, Ontario. Other
manufacturing facilities are located in King's Lynn, England; Amersfoort,
The Netherlands; and Tullamarine, Victoria, Australia. Domestically, the
W-J product line is sold principally by the Company's own sales force.
International sales are made through distributors and directly by the
Company.
Recent acquisitions have strengthened the business internationally
which operates under the W-J name. In August 1991, the Company acquired
the international food and cosmetic color operations of Morton
International, Inc. which provided additional technology in cosmetic
colors and a worldwide distribution network. In June 1992, the Company
acquired Butterfield Food Ingredients, Ltd., a British food color
manufacturer with particular expertise in natural colors, pharmaceutical
applications and international distribution, particularly in the Far East.
During 1993, the Company acquired Spectrum S.A., a Mexican food color
distributor with approximately 20% market share in that country.
Dehydrated Products
The Company's subsidiary, Rogers Foods, Inc. ("Rogers"), produces
dehydrated onion and garlic and is believed to be the third largest
producer of these products in the United States. These items are marketed
under the trademark ROGERS FOODS and private labels. Rogers also produces
and distributes chili powder, chili pepper, paprika, dehydrated vegetables
such as parsley, celery and spinach, and oleoresin (a liquid chili pepper
used as a highly concentrated coloring agent) under the brand name CHILI
PRODUCTS. Rogers believes it is one of the largest producers of these
products.
Rogers sells dehydrated products directly and through brokers to food
manufacturers for use as ingredients and also for repackaging under
private labels for sale to the retail market and to the food service
industry. Rogers' processing facilities are located in Turlock,
Livingston and Greenfield, California.
During 1994 and 1995, the Company acquired three European dehydrated
vegetable processors. The acquisitions give the Company a base from which
to expand its dehydrated products business internationally. These
acquisitions also expand the Company's dehydrated technology base to
include freeze drying, puffed drying and vacuum drying. Vegetables
processed using these technologies are premium products because they have
a short reconstitution time, a benefit in today's convenience foods such
as soups, snacks and other dry foods.
The European businesses operate as UNIVERSAL DEHYDRATES. The
acquired companies formerly operated as Mallow Foods in Midleton, County
Cork, Ireland; Silva Laon, located near Laon, France; and Top Foods in
Elburg, the Netherlands. The Company believes it is the leading
dehydrator of specialty vegetables in Europe.
Yeast
The Company specializes in the production of compressed, cream,
active dry and nutritional yeast products for sale to industrial,
institutional and retail accounts under the RED STAR trademark. The
largest market for yeast is the domestic baking industry. In addition,
active dry yeast is sold to food processors for inclusion in bread, pizza
and similar mixes. The compressed, active dry and fast-acting dry yeast
products of the Company bearing the RED STAR and RED STAR QUICK RISE
trademarks are sold in ready-to-use packages to retail stores and in two
pound packages for food service use. The Company believes it is the
largest North American supplier of yeast to the commercial bakery market
and the second largest supplier to the retail market.
The business also exports yeast and allied products throughout the
world and manages investments in companies operating yeast and allied
product facilities in 12 offshore locations, two of which are wholly-owned
subsidiaries. The Company receives revenues in the form of dividends and
technical assistance fees from these foreign affiliates.
Company owned yeast plants are located in Milwaukee, Wisconsin;
Baltimore, Maryland; Dallas, Texas; and Oakland, California. The Company
distributes its fermentation products largely through its own sales force.
In 1994, the Company purchased a 20% stock interest in and entered an
agreement with Minn-Dak Yeast Company, Inc. in Wahpeton, North Dakota for
contract manufacturing under the RED STAR trademark and to supply
molasses, a major raw material in yeast production, to the Company.
BioProducts
During 1994, the Company created the Red Star BioProducts Division
from its existing Red Star Specialty Products Division and two
acquisitions. Red Star Specialty Products had been established as a
small, stand-alone profit center in 1989 out of the Company's yeast group.
With internally developed expertise, the group focused on highly technical
product development using extracts from brewer's and baker's yeast.
During 1993, Universal BioVentures, the Company's biotechnology group, was
integrated into Red Star Specialty Products to develop new products
utilizing the Company's expertise in fermentation and molecular biology.
The BioVentures product line was discontinued in 1995 because of the
continuing development costs and funding required for expansion.
The 1994 acquisitions of Champlain Industries Limited and the Biolux
Group expanded the division's product lines and international presence,
making the division a more significant part of the Company. Champlain
Industries Limited produces savory flavorings and flavor enhancers from
vegetable proteins, yeast, meats and milk protein. It is a leading
producer of hydrolyzed vegetable proteins (HVP) in North America. The
Company has operations in Canada, the U.S., and the United Kingdom.
The Biolux Group is the leading European producer of food,
nutritional and feed ingredients derived from brewer's yeast. The
acquisition makes the Company the world leader in brewer's yeast extract
technology, production and sales. The Biolux Group consists of New Biolux
in Belgium and Vitalevor in France. Its products include flavor
enhancers, health foods, feed ingredients and nutrients for pharmaceutical
and biotechnology processes. The Biolux Group is a major purchaser and
processor of brewer's yeast in the European market.
The expanded Red Star BioProducts Division serves the food and feed
processing and bionutrient industries with the broadest line of natural
extracts and specialty cultures. It supplies various natural extracts
from brewer's yeast, baker's yeast, vegetable proteins, meat, casein and
other naturally occurring materials. These specialty extracts function
primarily as flavor and texture modifiers and enhancers, and secondary
flavorings in the food processing industries. The nutritional and
functional properties of Red Star BioProducts extracts are the basis for
their use in enzyme and pharmaceutical production.
The Company believes Red Star BioProducts is the leading supplier of
yeast extracts and second in the supply of HVPs in the U.S. market. The
products are marketed under a number of RED STAR and CHAMPLAIN trademarks.
The expanded division operates production facilities in Juneau,
Wisconsin; Harbor Beach, Michigan; Clifton, New Jersey; and in Canada, the
United Kingdom, Belgium and France. More than half of the Division's
products are now produced outside of the United States. Its products are
marketed through technically trained sales personnel directly to the
customer and through distributors in some international markets.
Frozen Foods
On August 1, 1994, the Company completed the sale of Universal Frozen
Foods Company, a wholly owned subsidiary of the Company ("Frozen Foods"),
to ConAgra, Inc. The sale was a major step in Universal Foods' strategic
transition to a focus on high-performance ingredients and ingredient
systems for foods and other products.
Frozen Foods produced frozen potato products for U.S. and international
markets, selling most of its product to the food service industry. It had
a share of the retail market with branded and private labeled products.
It operated processing facilities in Twin Falls, Idaho; Hermiston, Oregon;
and Pasco, Washington.
Research and Development/Quality Assurance
The Company believes that its competitive advantage and ability to
develop and deliver high-performance products is based on its technical
expertise in the processing and application of its technology for foods
and other products. Therefore, the Company provides an above-industry
average investment in research, development and quality assurance, and is
committed to the training and development of its people.
The Company employs approximately 400 people in research and quality
assurance. Over the past five years, expenditures as a percentage of
revenue have increased from 3.0% in 1991 to 3.6% in 1995. Expenditures in
fiscal 1995 decreased 11.4% from fiscal 1994 to $28.6 million from $32.2
million. This decrease is a direct result of the sale of Frozen Foods.
Frozen Foods accounted for $4.1 million in expenditures during fiscal
1994. Expenditures in fiscal 1994 increased 13% to $32.2 million from
$28.5 million in fiscal 1993. The Company's commitment to research and
product development continues at a level significantly higher than the
food industry average. Of the aforesaid amounts, approximately $17.9
million in fiscal 1993, $20.4 million in fiscal 1994 and $19.3 million in
fiscal 1995, were research and development expenses as defined by the
Financial Accounting Standards Board.
In 1992, the Company completed a new research center for seed genetics
and tissue culture at Livingston, California, for Dehydrated Products, and
the Company enlarged food flavor research laboratories in Kearny, New
Jersey. During 1993, beverage flavor laboratories in Indianapolis were
enlarged, new modern laboratories for research on color products at W-J's
production site in St. Louis, Missouri were completed, and a new facility
for quality assurance and technical customer services was added to the
Turlock, California complex. All of these facilities are designed to
meet the specialized, strategic needs of the Company's operating units.
The Company continued its comprehensive training program designed to
introduce all personnel to team problem solving using statistical process
control, teamwork and communication procedures under a program named "The
Universal Way." This program promotes the Company's commitment to
continuous quality improvement of its products and services as a primary
Company objective.
As part of its commitment to quality as a competitive advantage, the
Company has undertaken efforts to achieve certification to quality
standards established by the International Organization for
Standardization in Geneva, Switzerland, through its ISO 9000 series. Red
Star BioProducts believes it was the first North American ingredients
supplier to receive ISO 9002 certification. To date, Universal Flavor
facilities in Indiana and New Jersey in the United States and facilities
in The Netherlands and United Kingdom have also been certified.
Dehydrated Product facilities in California, in the United States, and in
Ireland, France and the Netherlands have also been certified.
Competition
All Company products are sold in highly competitive markets. Since the
Company and its competitors utilize similar methods of production,
marketing and delivery, the Company competes primarily on process and
applications expertise, quality and service. Universal Foods competes
with only a few companies across multiple ingredient lines and is more
likely to encounter competition specific to individual businesses.
With the evolution of food processing as a global business, competition
to supply the industry has taken on an increasingly global nature. In the
worldwide flavor market, the Company's principal competition comes from
other U.S. and European producers. Building an international presence is
a key goal for Universal Flavor as witnessed by acquisitions and the
completion of a plant in Belgium in order to meet increasing international
flavor demands.
W-J is the leading producer of certified colors in North America and
Western Europe. State of the art equipment, the latest process
technology, a Color Service Laboratory unequaled in the industry, and the
most complete range of synthetic and natural colors constitute the basis
for its market leadership position. Acquisitions have resulted in product
and process technology synergies, particularly in the cosmetic color
market, as well as a growing international presence.
For Dehydrated Products, acquisitions in Europe provide international
expansion and strengthen export opportunities for U.S. based operations.
The Company believes it is now the leading dehydrator of specialty
vegetables in Europe and the third largest producer of onion and garlic in
North America. Competition in Red Star BioProducts comes primarily from
domestic and European producers. Red Star BioProducts is the leading
producer of flavor enhancers in North America; competition in the European
market is fragmented. Red Star yeast and Products competes primarily in
the North American market and has two major competitors.
Products and Application Activities
With the Company's strategic focus on high-performance ingredients and
ingredient systems, the Company's emphasis has shifted from the
development of major new products to application activities and processing
improvements in the support of its customers' numerous new and
reformulated products. The Company maintains many of its proprietary
processes and formulae as trade secrets and under secrecy agreements with
customers.
Development activities include a line of stable aqueous dispersion of
colors for foods and pharmaceutical products. Patents have been granted
on the products marketed under the SPECTRASPRAY label and applied for on
the SPECTRABLEND label. The development of natural food colors continues
to expand and is a growth opportunity for W-J.
A variety of activities at Universal Flavor focus on the development of
natural flavors and flavor solutions for low-fat and no-fat applications.
The group has developed a reaction flavor for imparting animal fat flavor
to nutritionally preferred vegetable oils. Using new reaction and
extraction processes, a line of natural roasted onion, garlic and pepper
flavors has been created. A new technology was installed for production
of aseptically processed fruits. Emphasis has been placed on the
development of low-fat dairy and bakery flavor and ingredients systems.
New flavored fruit and spice pieces have also been developed to provide
new textures, flavors and unique performance properties in bakery items.
In 1993 Red Star BioProducts introduced the Flavor Mate 950 series, the
most potent flavor enhancer on the market, and the Savory Mate series,
which are flavor enhancers designed for specific areas such as beef,
poultry, pork, etc. Acquisitions in 1994 expanded the divisions product
line particularly in hydrolyzed vegetable proteins. The transfer of
technology to European acquisitions begun in 1995 will allow the
production of food and pharmaceutical grade extracts from brewing yeast.
European acquisitions in 1994 and 1995 expanded the Dehydrated Products
product line to include peas, carrots, beans, celery root and other
specialty vegetables.
In addition, the discussion of operational activities on Page 16 of the
1995 Annual Report to Shareholders is incorporated by reference.
Raw Materials
The principal raw material used in the production of yeast products is
molasses, which is purchased through brokers and producers under yearly
fixed-price contracts. Processes have been developed to permit partial
replacement of molasses with alternate, readily available substrates for
use if molasses supplies should become limited. In 1994, the Company
entered a supply agreement with Minn-Dak Yeast Company, Inc., a major
North American molasses supplier, to provide additional assurances of
adequate supplies.
Chili peppers, onion, garlic and other vegetables are acquired under
annual contracts with numerous growers in the western United States and
Europe. Chemicals and petrochemicals used to produce certified colors are
obtained from several domestic and foreign suppliers. Raw materials for
natural colors, such as carmine, beta carotene, annatto and tumeric, are
purchased from overseas and U.S. sources. In the production of flavors,
the principal raw materials include essential oils, aroma chemicals,
botanicals, fruits and juices and are obtained from local vendors. Flavor
enhancers and secondary flavors are produced from brewer's yeast, baker's
yeast from the Company's own operations, and vegetable materials such as
corn and soybeans. The acquisition of the Biolux Group in 1994 provides
long-term contracts on supplies of brewer's yeast for European production
needs.
The Company believes that its required raw materials are generally in
adequate supply and available from numerous competitively priced sources.
Patents, Formulae and Trademarks
The Company owns or controls many patents, formulae and trademarks
related to its businesses. The businesses are not materially dependent
upon patent or trademark protection; however, trademarks, patents and
formulae are important for the continued consistent growth of the Company.
Employees
As of September 30, 1995, the Company employed about 4,100 persons
worldwide (which includes approximately 200 seasonal employees).
Approximately 430 employees are represented by one of 12 union contracts
with whom the Company has collective bargaining relationships. The
Company considers its employee relations to be good.
Regulation
Compliance with government provisions regulating the discharge of
material into the environment, or otherwise relating to the protection of
the environment, did not have a material adverse effect on the Company's
operations for the year covered by this report nor is such compliance
expected to have a material effect in the succeeding two years. As is
true with the food industry in general, the production, packaging,
labeling and distribution of the Company's products are subject to the
regulations of various federal, state and local governmental agencies, in
particular the Food & Drug Administration.
ITEM 2. PROPERTIES
Domestically, the Company operates eighteen manufacturing and processing
plants in ten states as of September 30, 1995. Four plants produced
bakers yeast, four facilities provided flavor enhancers and bioproducts,
three produced dehydrated products, two plants produced colors and four
plants produced flavors. None of these properties are held subject to any
material encumbrances. The Company also has investments in fifteen
companies operating yeast and allied product facilities located in twelve
offshore locations. The Company operates five color plants, eleven flavor
plants, five bioproducts facilities and three dehydrated vegetable plants
in thirteen foreign countries.
ITEM 3. LEGAL PROCEEDINGS
The Company is a party to various legal proceedings of a character
regarded as normal to its business and in which, the Company believes,
adverse decisions, in the aggregate, would not subject the Company to
damages of a material amount.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
There were no matters submitted to a vote of security holders during the
last quarter of fiscal 1995.
ITEM 4(a). EXECUTIVE OFFICERS OF THE REGISTRANT
The executive officers of the registrant and their ages as of December
1, 1995 are as follows:
EXECUTIVE OFFICERS
Name Age Position
Guy A. Osborn 59 Chairman, Chief Executive
Officer and Director
Kenneth P. Manning 53 President, Chief Operating
Officer and Director
Richard Carney 45 Vice President - Human
Resources
Steven O. Cordier 39 Treasurer
Thomas J. Degnan 47 President, Red Star
BioProducts Division
Michael Fung 45 Vice President - Chief
Financial Officer
Michael L. Hennen 42 Controller
Richard F. Hobbs 48 Vice President -
Administration
R. Steven Martin 39 President, Red Star Yeast &
Products Division
Terrence M. O'Reilly 50 Vice President, Secretary and
General Counsel
James F. Palo 55 President, Dehydrated
Products
Division
Dr. Gary W. Sanderson 60 Vice President, Technologies
Kenneth G. Scheffel 59 Vice President, Chemical
Technologies
Charles G. Tuchel 40 President, Flavor Division
Michael A. Wick 52 President, Color Division
All of these individuals have been employed by the Company in an
executive capacity for more than five years, except Richard Carney, Steven
O. Cordier, Michael L. Hennen, R. Steven Martin, Charles G. Tuchel and
Michael Fung.
Mr. Carney was elected Vice President - Human Resources in April
1993. He joined the Company in 1981 as Treasury Manager and held various
positions in the Treasurer's Department until 1986 when he assumed the
Director of Benefits responsibilities which he performed until being
elected a Vice President.
Mr. Tuchel joined the Company in May 1992 as the Managing Director -
Europe for the Color Division. In October 1994, he was promoted to Vice
President and General Manager of Universal Flavors International, and in
June 1995 elected President - Flavors Division. Prior to joining the
Company, Mr. Tuchel was Business Manager at ICI Petrochemicals from 1990
through 1992.
Mr. Martin joined the Company as Vice President - Marketing of its
Red Star Yeast & Products Division in 1993. In June 1995, Mr. Martin was
elected President - Red Star Yeast & Products Division. Prior to joining
the Company, Mr. Martin was with the Monsanto Company since 1978 in
various general management positions.
Mr. Hennen joined the Company in January 1995 as Controller. From
1985 until joining the Company he was a Senior Manager at Deloitte &
Touche LLP, a public accounting firm providing audit and tax services to
the Company as its outside auditor.
Mr. Cordier joined the Company in October 1995 as Treasurer. From
1990 until joining the Company he was Director of Financial Planning at
International Flavors and Fragrances, a $1.3 billion New York Stock
Exchange company.
Mr. Fung joined the Company in June 1995 as Vice President - Chief
Financial Officer. From 1992 to 1995 he served as Senior Vice President
and Chief Financial Officer for Vanstar Corporation, the world's largest
manufacturer and integrator of multi-vendor personal computer systems and
services. From 1988 to 1992, Mr. Fung was Vice President and Chief
Financial Officer of Bass Pro Shops & Tracker Marine, privately-held
companies operated under common ownership involved in the manufacture and
marketing of outdoor sporting goods.
PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED STOCKHOLDER
MATTERS
The principal market in which the common stock of the Company is
traded is the New York Stock Exchange. The range of the high and low
sales prices as quoted in the New York Stock Exchange - Composite
Transaction tape for the common stock of the Company and the amount of
dividends declared for fiscal 1995 appearing under "Quarterly Financial
Data" on Page 22 of the 1995 Annual Report of the Company are incorporated
by reference. Common stock dividends were paid on a quarterly basis, and
it is expected that quarterly dividends will continue to be paid in the
future. In addition to the restrictions contained in its Restated
Articles of Incorporation, the Company is subject to restrictions on the
amount of dividends which may be paid on its common stock under the
provisions of various credit agreements. On the basis of the consolidated
financial statements of the Company as of September 30, 1995, $29,737,000
is available for the payment of dividends on the common stock of the
Company under the most restrictive loan covenants.
The Company had a stock repurchase program, initially announced June
7, 1984, under which the authorization terminated in fiscal 1994.
Consequently, on January 27, 1994 the Board of Directors established a new
share repurchase program which authorizes the Company to repurchase up to
2.5 million shares. As of September 30, 1995, 65,000 had been repurchased
under the new authorization.
On September 8, 1988 the Board of Directors of the Company adopted a
common stock shareholder rights plan which is described at Note F of Notes
to Consolidated Financial Statements - Shareholders' Equity on Pages 29,
30 and 31 of the 1995 Annual Report to Shareholders and which is
incorporated by reference.
The number of shareholders of record on December 1, 1995 was 6,065.
ITEM 6. SELECTED FINANCIAL DATA
The selected financial data required by this item is incorporated by
reference from the "Five-Year Review" and the notes thereto of the 1995
Annual Report to Shareholders on Page 34.
ITEM 7. MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATION
Management's Analysis of Operations and Financial Condition is
incorporated by reference from Pages 18 through 21 of the 1995 Annual
Report to Shareholders.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The financial statements and supplementary data required by this item
are set forth on Pages 22 through 33 of the 1995 Annual Report to
Shareholders and are incorporated by reference.
ITEM 9. DISAGREEMENTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
None.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Information regarding directors and officers appearing under
"Election of Directors" (ending before "Committees of the Board of
Directors") and "Other Matters" on Pages 2 through Page 6 and Page 15,
respectively, of the Notice of Annual Meeting and Proxy Statement of the
Company dated December 15, 1995, is incorporated by reference.
ITEM 11. EXECUTIVE COMPENSATION
Information relating to compensation of directors and officers is
incorporated by reference from "Director Compensation and Benefits," and
"Compensation and Development Committee Report" and "Executive
Compensation" on Pages 7 through 14 of the Notice of Annual Meeting and
Proxy Statement of the Company dated December 15, 1995.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The discussion of securities ownership of certain beneficial owners
and management appearing under "Principal Shareholders" on Pages 8 through
9 of the Notice of Annual Meeting and Proxy Statement of the Company dated
December 15, 1995, is incorporated by reference.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
There are no family relationships between any of the directors,
nominees for director and officers of the Company nor any arrangement or
understanding between any director or officer or any other person pursuant
to which any of the nominees has been nominated. No director, nominee for
director or officer had any material interest, direct or indirect, in any
business transaction of the Company or any subsidiary during the period
October 1, 1994 through September 30, 1995, or in any such proposed
transaction. In the ordinary course of business, the Company engages in
business transactions with companies whose officers or directors are also
directors of the Company. These transactions are routine in nature and are
conducted on an arm's-length basis. The terms of any such transactions
are comparable at all times to those obtainable in business transactions
with unrelated persons.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
(a) Documents filed:
1. and 2. Financial Statements and Financial Statement
Schedule. (See following "List of Financial Statements and
Financial Statement Schedules.")
3. Exhibits. (See Exhibit Index on the last page of this
report.) (No instruments defining the rights of holders of long-term
debt of the Company and its consolidated subsidiaries are filed
herewith because no long-term debt instrument authorizes securities
exceeding 10% of the total consolidated assets of the Company. The
Company agrees to furnish a copy of any such instrument to the
Securities and Exchange Commission upon request.)
(b) Reports on Form 8-K: None
List Of Financial Statements and Financial Statement Schedules
Page Reference
in 1995 Annual
Report to
1. FINANCIAL STATEMENTS Shareholders
The following consolidated financial
statements of Universal Foods Corporation and
Subsidiaries are incorporated by reference
from the Annual Report to Shareholders for the
year ended September 30, 1995.
Independent Auditors' Report 33
Consolidated Balance Sheets - September 30, 1995
and 1994 24
Consolidated Earnings - Years ended September 30,
1995, 1994 and 1993 23
Consolidated Shareholders' Equity - Years ended
September 30, 1995, 1994 and 1993 25
Consolidated Cash Flows - Years ended
September 30, 1995, 1994 and 1993 26
Notes to Consolidated Financial Statements 27 - 32
Page Reference
2. FINANCIAL STATEMENT SCHEDULES in Form 10-K
Independent Auditors' Report 15
Schedule II - Valuation and Qualifying Accounts
and Reserves 16
All other schedules are omitted because they are inapplicable, not
required by the instructions or the information is included in the
consolidated financial statements or notes thereto.
Deloitte & Touche 411 East Wisconsin Avenue
LLP Milwaukee, WI 53202-4496
INDEPENDENT AUDITORS' REPORT
To the Shareholders and Directors
of Universal Foods Corporation
We have audited the consolidated financial statements of Universal Foods
Corporation as of September 30, 1995 and 1994 and for each of the three
years in the period ended September 30, 1995, and have issued our report
thereon dated November 9, 1995, which report expresses an unqualified
opinion and includes an explanatory paragraph relating to the change in
methods of accounting for postretirement benefits other than pensions and
postemployment benefits to conform with Statements of Financial Accounting
Standards No. 106 and No. 112, respectively; such consolidated financial
statements and report are included in your 1995 Annual Report to
Shareholders and are incorporated herein by reference. Our audits also
included the consolidated financial statement schedule of Universal Foods
Corporation, listed in Item 14. This consolidated financial statement
schedule is the responsibility of the Company's management. Our
responsibility is to express an opinion based on our audits. In our
opinion, such consolidated financial statement schedule, when considered
in relation to the basic consolidated financial statements taken as a
whole, presents fairly in all material respects the information set forth
therein.
DELOITTE & TOUCHE LLP
November 9, 1995
SCHEDULE II
UNIVERSAL FOODS CORPORATION AND SUBSIDIARIES
SCHEDULE II - VALUATION AND QUALIFYING
ACCOUNTS AND RESERVES
(In Thousands)
Years ended September 30, 1995, 1994, and 1993
Valuation accounts
deducted in the Additions
balance sheet from Balance at Charged to Balance at
the assets to which beginning costs and Net end of
they apply of period expenses acquired Deductions period
1993
Allowance for losses:
Trade accounts
receivable $3,357 $ 988 $ --- $1,039 (A) $3,306
1994
Allowance for losses:
Trade accounts
receivable $3,306 $ 971 $ 637 $1,387 (A) $3,527
1995
Allowance for losses:
Trade accounts
receivable $3,527 $1,356 $ --- $1,115 (A) $3,768
(A) Divestiture and accounts written off, less recoveries.
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, duly authorized.
UNIVERSAL FOODS CORPORATION
/s/ T. M. O'Reilly
T. M. O'Reilly, Vice President
Secretary & General Counsel
Dated: December 22, 1995
PURSUANT to the requirements of the Securities Exchange Act of 1934, this
report has been signed below on December 22, 1995, by the following
persons on behalf of the Registrant and in the capacities indicated.
/s/ Guy A. Osborn Chairman, Chief Executive Officer and
Director
/s/ Kenneth P. Manning President, Chief Operating Officer and
Director
/s/ Michael Fung Vice President - Chief Financial
Officer
/s/ Michael L. Hennen Corporate Controller
/s/ Michael E. Batten Director
/s/ John F. Bergstrom Director
/s/ James L. Forbes Director
/s/ Dr. Olan D. Forker Director
/s/ Dr. Carol I. Waslien Ghazaii Director
/s/ Leon T. Kendall Director
/s/ James H. Keyes Director
/s/ Charles S. McNeer Director
/s/ John L. Murray Director
/s/ William U. Parfet Director
/s/ Essie Whitelaw Director
UNIVERSAL FOODS CORPORATION
EXHIBIT INDEX
1994 ANNUAL REPORT ON FORM 10-K
Incorporated
Exhibit Herein by Filed
Number Description Reference Herewith
3.1 Restated Articles of (Previously filed at
Incorporation Exhibit 3.1 to the
1993 Annual Report on
Form 10-K)
3.2 Restated Bylaws X
4 Shareholders Rights Plan (Previously filed on
Form 8-A dated
September 15, 1988 as
amended by Exhibit 3
to Form 8 dated
December 22, 1988 and
by Exhibits 4 and 5
to Form 8 dated
September 14, 1990)
10 Material Contracts
*(a) Executive (Previously filed at
Employment Exhibit 10(a) to the
Contract 1985 Annual Report on
Form 10-K)
*(b) 1981 Incentive (Previously filed
Stock Option Plan with the Notice of
Annual Meeting &
Proxy Statement dated
December 5, 1981)
*(c) 1985 Stock Plan (Previously filed
for Executive with the Notice of
Employees Annual Meeting &
Proxy Statement dated
December 12, 1985)
*(d) 1990 Employee (Previously filed
Stock Plan with the Notice of
Annual Meeting &
Proxy Statement dated
December 18, 1989)
*(e) Director Stock (Previously filed as
Grant Plan, as Exhibit 10(e) to the
amended 1991 Annual Report on
Form 10-K)
*(f) Management Income (Previously filed as
Deferral Plan Exhibit 10(f) to the
1991 Annual Report on
Form 10-K)
*(g) Executive Income (Previously filed as
Deferral Plan Exhibit 10(g) to the
1991 Annual Report on
Form 10-K)
*(h) Change of Control X
Employment and
Severance
Agreement
(i) Trust Agreement (Previously filed as
dated January 18, Exhibit 18 to
1988 between the Amendment No. 1 of
Company and the Company's
Marshall & Ilsley Schedule 14D-9 filed
Trust Company December 9, 1988)
(j) Trust Agreement (Previously filed as
dated January 18, Exhibit 19 to
1988 between the Amendment No. 1 of
Company and the Company's
Marshall & Ilsley Schedule 14D-9 filed
Trust Company December 9, 1988)
(k) Trust Agreement (Previously filed as
dated September Exhibit 20 to
18, 1988 between Amendment No. 1 of
the Company and the Company's
Marshall & Ilsley Schedule 14D-9 filed
Trust Company December 9, 1988)
*(l) Management (Previously filed as
Incentive Plan for Exhibit 10(i) to the
Major Corporate 1991 Annual Report on
Executives Form 10-K)
*(m) 1994 Employees (Previously filed on
Stock Option Plan Form S-8 dated
September 12, 1994)
13 Portions of Annual Report
to Shareholders for the
year ended September 30, X
1995 that are
incorporated by reference
21 Significant Subsidiaries
of Universal Foods
Corporation X
23 Consent of Deloitte &
Touche LLP X
27 Financial Data Schedule X
99 Notice of Annual Meeting (Previously filed via
and Proxy Statement, the EDGAR System on
dated December 15, 1995 December 14, 1995 as
the Company's
Schedule 14A)
Except to the extent
incorporated by
reference, the Proxy
Statement shall not
be deemed to be filed
with the Securities
and Exchange
Commission as part of
this annual Report on
Form 10-K.
* Indicates management contracts or compensatory plans.