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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, 1996
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 offices) (Zip Code)
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 6, 1996: 26,977,437
shares of Common Stock, $.10 par value, including 1,543,250 treasury
shares.
Aggregate market value of Universal Foods Corporation Common
Stock, excluding treasury shares, held by non-affiliates as of December 6,
1996 was $869,469,165.
Documents Incorporated By Reference
1. Portions of Universal Foods Corporation 1996 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 18, 1996 (Parts
II and III of Form 10-K)
PART I
ITEM 1. BUSINESS - Food and Other Industries
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 is a technology-driven industrial marketer of high-
performance components that add functionality to foods, cosmetics,
pharmaceuticals and other products. The Company's technical expertise and
application know-how make it unique among suppliers that serve these
industries. Principal products of the Company include aroma chemicals and
flavors for foods, beverages, dairy/ice cream products, personal care and
household items; certified and natural colors for foods, cosmetics and
pharmaceuticals; dehydrated vegetable products sold primarily to food
processors; a diverse line of yeast products for commercial baking and
other uses; and flavor enhancers and other bioproducts for foods, feed,
pharmaceuticals and commercial use. The Company exited the frozen potato
business during Fiscal 1994.
The following material from the Universal Foods Corporation 1996
Annual Report to Shareholders is incorporated by reference:
"Management's Analysis of Operations and Financial Condition" on
Pages 13 through 17 (but not any photographs or graphical information
included thereon).
Note 1 - "Summary of Significant Accounting Policies" on Pages
23 and 24.
Note 10 - "Foreign Operations" on Page 29.
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 aroma chemicals 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. 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
Flavors, through its international subsidiary, purchased its partner's 51%
interest in Azteca en Ambesco de Mexico S.A. de C.V. This purchase
brought beverages and dairy flavor product lines to the Company's existing
Mexican flavor business.
Color
The Company, through its subsidiary Warner-Jenkinson Company,
Inc.("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 the Warner-Jenkinson name, 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 operates
out of Kingston, Ontario. Other manufacturing facilities are located in
King's Lynn, Norfolk, 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. During 1993, the
Company acquired Spectrum S.A. de C.V., 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 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 and 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 expanded 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 acquisitions operate as UNIVERSAL DEHYDRATES. These
entities are Mallow Foods in Midleton, County Cork, Ireland; Silva Laon,
located near Laon, France; and Top Foods in 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 commercial and
retail accounts under the RED STAR trademark. The largest market for
yeast is the U.S. 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 the non-wholly-owned foreign affiliates.
Company owned yeast plants are located in Milwaukee, Wisconsin;
Baltimore, Maryland; Dallas, Texas; and Oakland, California. The Company
distributes its products largely through its own sales force. In 1994,
the Company purchased a 20% interest in and entered an agreement with
Minn-Dak Yeast Company, Inc. in Wahpeton, North Dakota for contract
manufacturing under the Red Star label and to supply molasses, a major raw
material in yeast production.
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 start-up 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 it
would not be profitable for some time.
The 1994 acquisitions of Champlain Industries Limited in Canada
and The Biolux Group in Belgium expanded the division's product lines and
international presence, making the division a more significant part of the
Company. The expanded Red Star BioProducts Division serves the food and
feed processing and bionutrient industries with the broadest line of
natural extracts and specialty flavors. 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 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 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 customers
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 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 advantages and ability
to develop and deliver high-performance products are 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 percent of
revenue have increased from 3.0% in 1992 to 3.7% in 1996. Expenditures in
fiscal 1996 were $29.8 compared to $28.6 million in 1995. Expenditures in
1995 decreased from the fiscal 1994 level of $32.2 million, a direct
result of the sale of Frozen Foods which 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 $20.4 million in fiscal 1994, $19.3 million in
fiscal 1995, and $21.4 million in 1996 were research and development
expenses as defined by the Financial Accounting Standards Board.
As part of its commitment to quality as a competitive advantage,
the Company has undertaken efforts to achieve certification to the
requirements established by the International Organization for
Standardization in Geneva, Switzerland, through its ISO 9000 series of
quality standards. Red Star BioProducts believes it was the first North
American ingredients supplier to receive ISO 9002 certification.
Facilities currently certified include Universal Flavor facilities in
Spain, Italy and the United Kingdom; Red Star BioProducts facilities in
the United States and Canada; Warner-Jenkinson facilities in The
Netherlands and United Kingdom; and Dehydrated Products facilities in the
United States, Ireland, France and The Netherlands.
Competition
All Company products are sold in highly competitive markets.
Some competitors have more product lines and greater resources than the
Company has. 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. The
Company competes in many market niches where price is not the most
important variable. 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 demonstrated
by acquisitions.
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 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. Competition in Red Star BioProducts comes primarily from
domestic and European producers. Red Star Yeast & Products competes
primarily in the North American market and has three 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. A technology was installed for production of aseptically
processed fruits. Emphasis has been placed on the development of low-fat
dairy and bakery flavor and ingredient 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 division's
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 brewer's 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 in the
"Business Profile" on Pages 4 and 5 of the 1996 Annual Report to
Shareholders is incorporated by reference (but not any photographs or
graphical information included thereon).
Raw Materials
In producing its products, the Company uses a wide range of raw
materials. 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 turmeric,
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 supply arrangements on supplies of
brewer's yeast for European production needs. Chili peppers, onion, garlic
and other vegetables are acquired under annual contracts with numerous
growers in the western United States and Europe.
The principal raw material used in the production of yeast
products is molasses, which is purchased through brokers and producers,
usually 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
Farmers Cooperative, a major North American molasses supplier, to provide
additional assurances of adequate supplies.
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, 1996, the Company employed about 4,000
persons worldwide (which includes approximately 200 seasonal employees).
Approximately 450 U.S. employees are represented by one of the 11 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 products of the Company 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, 1996. 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 1996.
ITEM 4(a). EXECUTIVE OFFICERS OF THE REGISTRANT
The executive officers of the registrant and their ages as of
December 1, 1996 are as follows:
EXECUTIVE OFFICERS
Name Age Position
Guy A. Osborn 60 Chairman and Director
Kenneth P. Manning 54 President, Chief Executive
Officer and Director
Richard Carney 46 Vice President - Human Resources
Steven O. Cordier 40 Treasurer
Thomas J. Degnan 48 Group Vice President
Michael Fung 46 Vice President and Chief
Financial Officer
Michael L. Hennen 43 Controller
Richard F. Hobbs 49 Vice President - Administration
R. Steven Martin 40 President - Red Star Yeast &
Products Division
Terrence M. O'Reilly 51 Vice President, Secretary and
General Counsel
James F. Palo 56 President - Rogers Foods, Inc.
Dr. Gary W. Sanderson 61 Vice President, Technologies
Kenneth G. Scheffel 60 Vice President - Chemical
Technologies
William Tesch 46 President - Red Star BioProducts
Charles G. Tuchel 41 President - Universal Flavors
Corporation
Michael A. Wick 53 President - Warner-Jenkinson Co.,
Inc.
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. 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, a leading provider of
products and services to design, build and manage computer network
infrastructures for large enterprises. From 1988 to 1992, Mr. Fung was
Vice President and Chief Financial Officer of Bass Pro Shops and Tracker
Marine Corporation, privately-held companies operated under common
ownership involved in the manufacture and marketing of outdoor sporting
goods.
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. 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. Tesch joined the Company in 1971, becoming Plant Manager of the
Red Star BioProducts Division in 1989. From 1993 to 1994 he was Director,
Training and Development of The Universal Way and from 1994 to 1996 he
served as Vice President, Manufacturing Operations of Red Star
BioProducts. On April 16, 1996, Mr. Tesch was elected President of Red
Star BioProducts.
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.
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 1996 appearing under "Common Stock prices
and dividends" on Page 18 of the 1996 Annual Report to Shareholders 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,
1996, $5,635,000 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, 1996, 828,118 shares 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 6 of Notes
to Consolidated Financial Statements - "Shareholders' Equity" on Pages 26
and 27 of the 1996 Annual Report to Shareholders and which is incorporated
by reference.
The number of shareholders of record on December 6, 1996 was 6,099.
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 on Page 31 of
the 1996 Annual Report to Shareholders.
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 13 through 17 of the 1996 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 18 through 30 of the 1996 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 18, 1996, 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 11 of the Notice of Annual Meeting and
Proxy Statement of the Company dated December 18, 1996.
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 18
through 30 of the Notice of Annual Meeting and Proxy Statement of the
Company dated December 18, 1996, 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, 1995 through September 30, 1996, 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
1996 Annual
Report
to Shareholders
1. FINANCIAL STATEMENTS
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, 1996.
Independent Auditors' Report 30
Consolidated Balance Sheets - September 30, 20
1996 and 1995
Consolidated Earnings - Years ended 19
September 30, 1996, 1995 and 1994
Consolidated Shareholders' Equity - Years 21
ended September 30, 1996, 1995 and 1994
Consolidated Cash Flows - Years ended 22
September 30, 1996, 1995 and 1994
Notes to Consolidated Financial Statements 21 - 29
Page Reference
2. FINANCIAL STATEMENT SCHEDULES in Form 10-K
Independent Auditors' Report 14
Schedule II - Valuation and Qualifying 15
Accounts and Reserves
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.
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, 1996 and 1995 and for each of the three
years in the period ended September 30, 1996, and have issued our report
thereon dated November 14, 1996, which report expresses an unqualified
opinion and includes an explanatory paragraph relating to the adoption of
the provisions of Statement of Financial Accounting Standards No. 121,
"Accounting for the Impairment of Long-Lived Assests and for Long-Lived
Assets to be Disposed Of"; such consolidated financial statements and
report are included in your 1996 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
Milwaukee, Wisconsin
November 14, 1996
SCHEDULE II
UNIVERSAL FOODS CORPORATION AND SUBSIDIARIES
SCHEDULE II - VALUATION AND QUALIFYING
ACCOUNTS AND RESERVES
(In Thousands)
Years ended September 30, 1996, 1995 and 1994
Additions
Valuation accounts
deducted in the balance Balance at Charged to
sheet from the assets to beginning costs and Net Balance at end
which they apply of period expenses acquired Deductions(A) of period
1994
Allowance for losses:
Trade accounts
receivable $3,306 971 637 1,387(B) $3,527
===== ===== ===== ===== =====
1995
Allowance for losses:
Trade accounts
receivable $3,527 1,356 --- 1,115 $3,768
===== ===== ===== ===== =====
1996
Allowance for losses:
Trade accounts
receivable $3,768 349 --- 608 $3,509
===== ===== ===== ===== =====
(A) Accounts written off, less recoveries.
(B) Includes divestiture of Frozen Foods business.
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.
UNIVERSAL FOODS CORPORATION
By: /s/ T. M. O'Reilly
T. M. O'Reilly, Vice President
Secretary & General Counsel
Dated: December 20, 1996
PURSUANT to the requirements of the Securities Exchange Act of 1934, this
report has been signed below on December 20, 1996, by the following
persons on behalf of the Registrant and in the capacities indicated.
/s/ Guy A. Osborn
Guy A. Osborn Chairman and Director
/s/ Kenneth P. Manning
Kenneth P. Manning President, Chief Executive Officer and
Director
/s/ Michael Fung
Michael Fung Vice President and Chief Financial
Officer
/s/ Michael L. Hennen
Michael L. Hennen Corporate Controller
/s/ Michael E. Batten
Michael E. Batten Director
/s/ John F. Bergstrom
John F. Bergstrom Director
/s/ James L. Forbes
James L. Forbes Director
/s/ Dr. Carol I. Waslien Ghazaii
Dr. Carol I. Waslien Ghazaii Director
/s/ Leon T. Kendall
Leon T. Kendall Director
/s/ James H. Keyes
James H. Keyes Director
/s/ Charles S. McNeer
Charles S. McNeer Director
/s/ William U. Parfet
William U. Parfet Director
/s/ Essie Whitelaw
Essie Whitelaw Director
UNIVERSAL FOODS CORPORATION
EXHIBIT INDEX
1996 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 (Previously filed at
Exhibit 3.2 to the
1995 Annual Report on
Form 10-K)
4 Shareholders Rights (Previously filed on
Plan 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 with
Stock Option the Notice of Annual
Plan Meeting & Proxy
Statement dated
December 5, 1981)
* (c) 1985 Stock (Previously filed with
Plan for the Notice of Annual
Executive Meeting & Proxy
Employees Statement dated
December 12, 1985)
* (d) 1990 Employee (Previously filed with
Stock Plan 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 (Previously filed as
Income Exhibit 10(f) to the
Deferral Plan 1991 Annual Report on
Form 10-K)
* (g) Executive (Previously filed as
Income Exhibit 10(g) to the
Deferral Plan 1991 Annual Report on
Form 10-K)
* (h) Change of (Previously filed as
Control Exhibit 10(h) to the
Employment and 1995 Annual Report on
Severance Form 10-K)
Agreement
(i) Trust (Previously filed as
Agreement Exhibit 18 to
dated January Amendment No. 1 of the
18, 1988 Company's Schedule
between the 14D-9 filed December
Company and 9, 1988)
Marshall &
Ilsley Trust
Company
(j) Trust (Previously filed as
Agreement Exhibit 19 to
dated January Amendment No. 1 of the
18, 1988 Company's Schedule
between the 14D-9 filed December
Company and 9, 1988)
Marshall &
Ilsley Trust
Company
(k) Trust (Previously filed as
Agreement Exhibit 20 to
dated Amendment No. 1 of the
September 18, Company's Schedule
1988 between 14D-9 filed December
the Company 9, 1988)
and Marshall &
Ilsley Trust
Company
* (l) Management X
Incentive Plan
for Major
Corporate
Executives
* (m) Management X
Incentive Plan
for Division
Presidents
* (n) 1994 Employees (Previously filed on
Stock Option Form S-8 dated
Plan September 12, 1994)
13 Portions of Annual
Report to Shareholders
for the year ended X
September 30, 1996 that
are incorporated by
reference
21 Significant
Subsidiaries of
Universal Foods X
Corporation
23 Consent of Deloitte & X
Touche LLP
27 Financial Data Schedule X
99 Notice of Annual (Previously filed via
Meeting and Proxy the EDGAR System on
Statement, dated December 18, 1996 as
December 18, 1996 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.