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(Mark One)
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/X/ QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE
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SECURITIES EXCHANGE ACT OF 1934
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For the quarterly period ended June 29, 2013
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OR
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/ / TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE
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SECURITIES EXCHANGE ACT OF 1934
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For the transition period from _______ to _______
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Delaware
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36-2495346
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(State or other jurisdiction
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(I.R.S. Employer
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of incorporation or organization)
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Identification Number)
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251 O'Connor Ridge Blvd., Suite 300
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Irving, Texas
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75038
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(Address of principal executive offices)
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(Zip Code)
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Large accelerated filer
|
X
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Accelerated filer
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Non-accelerated filer
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Smaller reporting company
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(Do not check if a smaller reporting company)
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Page No.
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June 29,
2013 |
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December 29,
2012 |
||||
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ASSETS
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(unaudited)
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|
||||
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Current assets:
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||||
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Cash and cash equivalents
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$
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133,571
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$
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103,249
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Restricted cash
|
361
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361
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Accounts receivable, net
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91,872
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98,131
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||
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Inventories
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63,114
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65,065
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Prepaid expenses
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15,087
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9,256
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Other current assets
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5,344
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1,591
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Deferred income taxes
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13,621
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12,609
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Total current assets
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322,970
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290,262
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||
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Property, plant and equipment, less accumulated depreciation of
$348,512 at June 29, 2013 and $326,201 at December 29, 2012
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478,967
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453,927
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Intangible assets, less accumulated amortization of
$87,046 at June 29, 2013 and $73,021 at December 29, 2012
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325,765
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337,402
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Goodwill
|
381,369
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381,369
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|
||
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Investment in unconsolidated subsidiary
|
104,297
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62,495
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|
||
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Other assets
|
28,457
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26,961
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||
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$
|
1,641,825
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$
|
1,552,416
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LIABILITIES AND STOCKHOLDERS’ EQUITY
|
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Current liabilities:
|
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Current portion of long-term debt
|
$
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85
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$
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82
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Accounts payable, principally trade
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65,188
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54,014
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Accrued expenses
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68,708
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77,588
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Total current liabilities
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133,981
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131,684
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Long-term debt, net of current portion
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250,099
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250,142
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Other non-current liabilities
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59,469
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61,539
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Deferred income taxes
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71,166
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46,615
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Total liabilities
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514,715
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489,980
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Commitments and contingencies
|
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Stockholders’ equity:
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Common stock, $0.01 par value; 150,000,000 shares authorized;
119,152,005 and 118,622,650 shares issued at June 29, 2013
and at December 29, 2012, respectively
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1,192
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1,186
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Additional paid-in capital
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609,316
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603,836
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Treasury stock, at cost; 955,728 and 807,659 shares at
June 29, 2013 and at December 29, 2012, respectively
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(12,524
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)
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(10,033
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)
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Accumulated other comprehensive loss
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(28,473
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)
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(31,329
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)
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Retained earnings
|
557,599
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498,776
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Total stockholders’ equity
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1,127,110
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1,062,436
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$
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1,641,825
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$
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1,552,416
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Three Months Ended
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Six Months Ended
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||||||||||||
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June 29,
2013 |
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June 30,
2012 |
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June 29,
2013 |
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June 30,
2012 |
||||||||
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Net sales
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$
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423,593
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$
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436,674
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$
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869,015
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$
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823,782
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Costs and expenses:
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Cost of sales and operating expenses
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309,922
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314,138
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632,608
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590,607
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||||
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Selling, general and administrative expenses
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40,793
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36,894
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83,086
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74,263
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||||
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Depreciation and amortization
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22,076
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21,674
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43,943
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42,434
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||||
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Total costs and expenses
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372,791
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372,706
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759,637
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707,304
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||||
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Operating income
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50,802
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|
|
63,968
|
|
|
109,378
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116,478
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||||
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||||||||
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Other expense:
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|
||||||
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Interest expense
|
(5,669
|
)
|
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(5,753
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)
|
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(11,294
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)
|
|
(12,678
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)
|
||||
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Other income/(expense), net
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(418
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)
|
|
270
|
|
|
649
|
|
|
(338
|
)
|
||||
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Total other expense
|
(6,087
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)
|
|
(5,483
|
)
|
|
(10,645
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)
|
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(13,016
|
)
|
||||
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||||||||
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Equity in net loss of unconsolidated subsidiary
|
(1,962
|
)
|
|
(656
|
)
|
|
(3,157
|
)
|
|
(892
|
)
|
||||
|
Income before income taxes
|
42,753
|
|
|
57,829
|
|
|
95,576
|
|
|
102,570
|
|
||||
|
Income taxes
|
16,335
|
|
|
21,604
|
|
|
36,753
|
|
|
37,774
|
|
||||
|
Net income
|
$
|
26,418
|
|
|
$
|
36,225
|
|
|
$
|
58,823
|
|
|
$
|
64,796
|
|
|
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|
|
|
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|
||||||||
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Basic income per share
|
$
|
0.22
|
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|
$
|
0.31
|
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|
$
|
0.50
|
|
|
$
|
0.55
|
|
|
Diluted income per share
|
$
|
0.22
|
|
|
$
|
0.31
|
|
|
$
|
0.50
|
|
|
$
|
0.55
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
|
June 29, 2013
|
|
June 30, 2012
|
|
June 29, 2013
|
|
June 30, 2012
|
||||||||
|
Net income
|
$
|
26,418
|
|
|
$
|
36,225
|
|
|
$
|
58,823
|
|
|
$
|
64,796
|
|
|
Other comprehensive income, net of tax:
|
|
|
|
|
|
|
|
||||||||
|
Pension adjustments
|
805
|
|
|
742
|
|
|
1,610
|
|
|
1,484
|
|
||||
|
Natural gas swap derivative adjustments
|
(209
|
)
|
|
314
|
|
|
(61
|
)
|
|
321
|
|
||||
|
Corn option derivative adjustments
|
358
|
|
|
—
|
|
|
1,307
|
|
|
—
|
|
||||
|
Interest rate swap derivative adjustment
|
—
|
|
|
17
|
|
|
—
|
|
|
159
|
|
||||
|
Total other comprehensive income, net of tax
|
954
|
|
|
1,073
|
|
|
2,856
|
|
|
1,964
|
|
||||
|
Total comprehensive income
|
$
|
27,372
|
|
|
$
|
37,298
|
|
|
$
|
61,679
|
|
|
$
|
66,760
|
|
|
|
June 29,
2013 |
|
June 30,
2012 |
||||
|
Cash flows from operating activities:
|
|
|
|
||||
|
Net income
|
$
|
58,823
|
|
|
$
|
64,796
|
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
||||
|
Depreciation and amortization
|
43,943
|
|
|
42,434
|
|
||
|
Loss/(gain) on disposal of property, plant, equipment and other assets
|
(627
|
)
|
|
629
|
|
||
|
Gain on insurance proceeds from insurance settlement
|
(1,981
|
)
|
|
(900
|
)
|
||
|
Deferred taxes
|
23,539
|
|
|
10,541
|
|
||
|
Increase in long-term pension liability
|
600
|
|
|
167
|
|
||
|
Stock-based compensation expense
|
4,875
|
|
|
4,926
|
|
||
|
Write-off deferred loan costs
|
—
|
|
|
725
|
|
||
|
Deferred loan cost amortization
|
1,537
|
|
|
1,519
|
|
||
|
Equity in net loss of unconsolidated subsidiary
|
3,157
|
|
|
892
|
|
||
|
Changes in operating assets and liabilities, net of effects from acquisitions:
|
|
|
|
||||
|
Accounts receivable
|
6,259
|
|
|
(1,629
|
)
|
||
|
Income taxes refundable/payable
|
(273
|
)
|
|
16,253
|
|
||
|
Inventories and prepaid expenses
|
(3,880
|
)
|
|
(8,734
|
)
|
||
|
Accounts payable and accrued expenses
|
(333
|
)
|
|
6,598
|
|
||
|
Other
|
(6,459
|
)
|
|
3,743
|
|
||
|
Net cash provided by operating activities
|
129,180
|
|
|
141,960
|
|
||
|
Cash flows from investing activities:
|
|
|
|
||||
|
Capital expenditures
|
(54,689
|
)
|
|
(53,496
|
)
|
||
|
Acquisition
|
—
|
|
|
(2,000
|
)
|
||
|
Investment in unconsolidated subsidiary
|
(44,959
|
)
|
|
(25,518
|
)
|
||
|
Gross proceeds from disposal of property, plant and equipment and other assets
|
1,292
|
|
|
2,516
|
|
||
|
Proceeds from insurance settlement
|
1,981
|
|
|
900
|
|
||
|
Payments related to routes and other intangibles
|
(649
|
)
|
|
—
|
|
||
|
Net cash used by investing activities
|
(97,024
|
)
|
|
(77,598
|
)
|
||
|
Cash flows from financing activities:
|
|
|
|
||||
|
Payments on long-term debt
|
(40
|
)
|
|
(30,005
|
)
|
||
|
Issuance of common stock
|
32
|
|
|
64
|
|
||
|
Minimum withholding taxes paid on stock awards
|
(2,529
|
)
|
|
(2,214
|
)
|
||
|
Excess tax benefits from stock-based compensation
|
703
|
|
|
1,111
|
|
||
|
Net cash used by financing activities
|
(1,834
|
)
|
|
(31,044
|
)
|
||
|
Net increase in cash and cash equivalents
|
30,322
|
|
|
33,318
|
|
||
|
Cash and cash equivalents at beginning of period
|
103,249
|
|
|
38,936
|
|
||
|
Cash and cash equivalents at end of period
|
$
|
133,571
|
|
|
$
|
72,254
|
|
|
Supplemental disclosure of cash flow information:
|
|
|
|
||||
|
Accrued capital expenditures
|
$
|
(1,074
|
)
|
|
$
|
—
|
|
|
Cash paid during the period for:
|
|
|
|
||||
|
Interest, net of capitalized interest
|
$
|
9,756
|
|
|
$
|
10,295
|
|
|
Income taxes, net of refunds
|
$
|
17,713
|
|
|
$
|
10,786
|
|
|
(1)
|
General
|
|
(2)
|
Summary of Significant Accounting Policies
|
|
(a)
|
Basis of Presentation
|
|
(b)
|
Fiscal Periods
|
|
(c)
|
Revenue Recognition
|
|
(d)
|
Reclassifications
|
|
(e)
|
Earnings Per Share
|
|
|
Net Income per Common Share (in thousands, except per share data)
|
||||||||||||||||||||
|
|
Three Months Ended
|
||||||||||||||||||||
|
|
|
|
June 29, 2013
|
|
|
|
|
|
June 30, 2012
|
|
|
||||||||||
|
|
Income
|
|
Shares
|
|
Per Share
|
|
Income
|
|
Shares
|
|
Per Share
|
||||||||||
|
Basic:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Net Income
|
$
|
26,418
|
|
|
118,196
|
|
|
$
|
0.22
|
|
|
$
|
36,225
|
|
|
117,613
|
|
|
$
|
0.31
|
|
|
Diluted:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Effect of dilutive securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Add: Option shares in the money and dilutive effect of non-vested stock
|
|
|
|
690
|
|
|
|
|
|
|
|
|
867
|
|
|
|
|
||||
|
Less: Pro forma treasury shares
|
|
|
|
(298
|
)
|
|
|
|
|
|
|
|
(339
|
)
|
|
|
|
||||
|
Diluted:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Net income
|
$
|
26,418
|
|
|
118,588
|
|
|
$
|
0.22
|
|
|
$
|
36,225
|
|
|
118,141
|
|
|
$
|
0.31
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
Net Income per Common Share (in thousands, except per share data)
|
||||||||||||||||||||
|
|
Six Months Ended
|
||||||||||||||||||||
|
|
|
|
June 29, 2013
|
|
|
|
|
|
June 30, 2012
|
|
|
||||||||||
|
|
Income
|
|
Shares
|
|
Per Share
|
|
Income
|
|
Shares
|
|
Per Share
|
||||||||||
|
Basic:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Net Income
|
$
|
58,823
|
|
|
118,056
|
|
|
$
|
0.50
|
|
|
$
|
64,796
|
|
|
117,458
|
|
|
$
|
0.55
|
|
|
Diluted:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Effect of dilutive securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Add: Option shares in the money and dilutive effect of non-vested stock
|
|
|
|
688
|
|
|
|
|
|
|
|
|
870
|
|
|
|
|
||||
|
Less: Pro forma treasury shares
|
|
|
|
(304
|
)
|
|
|
|
|
|
|
|
(343
|
)
|
|
|
|
||||
|
Diluted:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Net income
|
$
|
58,823
|
|
|
118,440
|
|
|
$
|
0.50
|
|
|
$
|
64,796
|
|
|
117,985
|
|
|
$
|
0.55
|
|
|
(3)
|
Acquisition
|
|
(4)
|
Investment in Unconsolidated Subsidiary
|
|
(5)
|
Debt
|
|
Year
|
Percentage
|
|
2014
|
104.250%
|
|
2015
|
102.125%
|
|
2016 and thereafter
|
100.000%
|
|
|
June 29,
2013 |
December 29,
2012 |
||||
|
Senior Notes:
|
|
|
||||
|
8.5% Senior Notes due 2018
|
$
|
250,000
|
|
$
|
250,000
|
|
|
Senior Secured Credit Facilities:
|
|
|
||||
|
Term Loan
|
$
|
—
|
|
$
|
—
|
|
|
Revolving Credit Facility:
|
|
|
|
|
||
|
Maximum availability
|
$
|
415,000
|
|
$
|
415,000
|
|
|
Borrowings outstanding
|
—
|
|
—
|
|
||
|
Letters of credit issued
|
32,817
|
|
30,119
|
|
||
|
Availability
|
$
|
382,183
|
|
$
|
384,881
|
|
|
(6)
|
Income Taxes
|
|
(7)
|
Other Comprehensive Income
|
|
|
Three Months Ended
|
|||||||||||||||||||
|
|
Before-Tax
|
|
Tax (Expense)
|
|
Net-of-Tax
|
|||||||||||||||
|
|
Amount
|
|
or Benefit
|
|
Amount
|
|||||||||||||||
|
|
June 29, 2013
|
June 30, 2012
|
|
June 29, 2013
|
June 30, 2012
|
|
June 29, 2013
|
June 30, 2012
|
||||||||||||
|
Defined benefit pension plans
|
|
|
|
|
|
|
|
|
||||||||||||
|
Amortization of prior service cost
|
$
|
15
|
|
$
|
22
|
|
|
$
|
(6
|
)
|
$
|
(8
|
)
|
|
$
|
9
|
|
$
|
14
|
|
|
Amortization of actuarial loss
|
1,300
|
|
1,189
|
|
|
(504
|
)
|
(461
|
)
|
|
796
|
|
728
|
|
||||||
|
Total defined benefit pension plans
|
1,315
|
|
1,211
|
|
|
(510
|
)
|
(469
|
)
|
|
805
|
|
742
|
|
||||||
|
Natural gas swap derivatives
|
|
|
|
|
|
|
|
|
||||||||||||
|
Loss/(gain) reclassified to net income
|
(244
|
)
|
295
|
|
|
94
|
|
(114
|
)
|
|
(150
|
)
|
181
|
|
||||||
|
Gain/(loss) activity recognized in other comprehensive income (loss)
|
(97
|
)
|
217
|
|
|
38
|
|
(84
|
)
|
|
(59
|
)
|
133
|
|
||||||
|
Total natural gas swap derivatives
|
(341
|
)
|
512
|
|
|
132
|
|
(198
|
)
|
|
(209
|
)
|
314
|
|
||||||
|
Corn option derivatives
|
|
|
|
|
|
|
|
|
||||||||||||
|
Loss/(gain) reclassified to net income
|
(866
|
)
|
—
|
|
|
336
|
|
—
|
|
|
(530
|
)
|
—
|
|
||||||
|
Gain/(loss) activity recognized in other comprehensive income (loss)
|
1,450
|
|
—
|
|
|
(562
|
)
|
—
|
|
|
888
|
|
—
|
|
||||||
|
Total corn option derivatives
|
584
|
|
—
|
|
|
(226
|
)
|
—
|
|
|
358
|
|
—
|
|
||||||
|
Interest rate swap derivatives
|
|
|
|
|
|
|
|
|
||||||||||||
|
Loss reclassified to net income
|
—
|
|
28
|
|
|
—
|
|
(11
|
)
|
|
—
|
|
17
|
|
||||||
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Other comprehensive income (loss)
|
$
|
1,558
|
|
$
|
1,751
|
|
|
$
|
(604
|
)
|
$
|
(678
|
)
|
|
$
|
954
|
|
$
|
1,073
|
|
|
|
Six Months Ended
|
|||||||||||||||||||
|
|
Before-Tax
|
|
Tax (Expense)
|
|
Net-of-Tax
|
|||||||||||||||
|
|
Amount
|
|
or Benefit
|
|
Amount
|
|||||||||||||||
|
|
June 29, 2013
|
June 30, 2012
|
|
June 29, 2013
|
June 30, 2012
|
|
June 29, 2013
|
June 30, 2012
|
||||||||||||
|
Defined benefit pension plans
|
|
|
|
|
|
|
|
|
||||||||||||
|
Amortization of prior service cost
|
$
|
30
|
|
$
|
44
|
|
|
$
|
(12
|
)
|
$
|
(16
|
)
|
|
$
|
18
|
|
$
|
28
|
|
|
Amortization of actuarial loss
|
2,600
|
|
2,378
|
|
|
(1,008
|
)
|
(922
|
)
|
|
1,592
|
|
1,456
|
|
||||||
|
Total defined benefit pension plans
|
2,630
|
|
2,422
|
|
|
(1,020
|
)
|
(938
|
)
|
|
1,610
|
|
1,484
|
|
||||||
|
Natural gas swap derivatives
|
|
|
|
|
|
|
|
|
||||||||||||
|
Loss/(gain) reclassified to net income
|
(187
|
)
|
1,008
|
|
|
72
|
|
(390
|
)
|
|
(115
|
)
|
618
|
|
||||||
|
Gain/(loss) activity recognized in other comprehensive income (loss)
|
87
|
|
(483
|
)
|
|
(33
|
)
|
186
|
|
|
54
|
|
(297
|
)
|
||||||
|
Total natural gas swap derivatives
|
(100
|
)
|
525
|
|
|
39
|
|
(204
|
)
|
|
(61
|
)
|
321
|
|
||||||
|
Corn option derivatives
|
|
|
|
|
|
|
|
|
||||||||||||
|
Loss/(gain) reclassified to net income
|
(908
|
)
|
—
|
|
|
352
|
|
—
|
|
|
(556
|
)
|
—
|
|
||||||
|
Gain/(loss) activity recognized in other comprehensive income (loss)
|
3,041
|
|
—
|
|
|
(1,178
|
)
|
—
|
|
|
1,863
|
|
—
|
|
||||||
|
Total corn option derivatives
|
2,133
|
|
—
|
|
|
(826
|
)
|
—
|
|
|
1,307
|
|
—
|
|
||||||
|
Interest rate swap derivatives
|
|
|
|
|
|
|
|
|
||||||||||||
|
Loss reclassified to net income
|
—
|
|
260
|
|
|
—
|
|
(101
|
)
|
|
—
|
|
159
|
|
||||||
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Other Comprehensive income (loss)
|
$
|
4,663
|
|
$
|
3,207
|
|
|
$
|
(1,807
|
)
|
$
|
(1,243
|
)
|
|
$
|
2,856
|
|
$
|
1,964
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
|
||||||||||
|
|
June 29, 2013
|
June 30, 2012
|
|
June 29, 2013
|
June 30, 2012
|
Statement of Operations Classification
|
||||||||
|
Derivative instruments
|
|
|
|
|
|
|
||||||||
|
Natural gas swap derivatives
|
$
|
244
|
|
$
|
(295
|
)
|
|
$
|
187
|
|
$
|
(1,008
|
)
|
Cost of sales and operating expenses
|
|
Corn option derivatives
|
866
|
|
—
|
|
|
908
|
|
—
|
|
Cost of sales and operating expenses
|
||||
|
Interest rate swap derivatives
|
—
|
|
(28
|
)
|
|
—
|
|
(260
|
)
|
Interest expense
|
||||
|
|
1,110
|
|
(323
|
)
|
|
1,095
|
|
(1,268
|
)
|
Total before tax
|
||||
|
|
(430
|
)
|
125
|
|
|
(424
|
)
|
491
|
|
Income taxes
|
||||
|
|
680
|
|
(198
|
)
|
|
671
|
|
(777
|
)
|
Net of tax
|
||||
|
Defined benefit pension plans
|
|
|
|
|
|
|
||||||||
|
Amortization of prior service cost
|
$
|
(15
|
)
|
$
|
(22
|
)
|
|
$
|
(30
|
)
|
$
|
(44
|
)
|
(a)
|
|
Amortization of actuarial loss
|
(1,300
|
)
|
(1,189
|
)
|
|
(2,600
|
)
|
(2,378
|
)
|
(a)
|
||||
|
|
(1,315
|
)
|
(1,211
|
)
|
|
(2,630
|
)
|
(2,422
|
)
|
Total before tax
|
||||
|
|
510
|
|
469
|
|
|
1,020
|
|
938
|
|
Income taxes
|
||||
|
|
(805
|
)
|
(742
|
)
|
|
(1,610
|
)
|
(1,484
|
)
|
Net of tax
|
||||
|
Total reclassifications
|
$
|
(125
|
)
|
$
|
(940
|
)
|
|
$
|
(939
|
)
|
$
|
(2,261
|
)
|
Net of tax
|
|
(a)
|
These items are included in the computation of net periodic pension cost. See Note 8 Employee Benefit Plans for additional information.
|
|
|
|
Six Months Ended June 29, 2013
|
||||||||
|
|
|
Derivative
|
Defined Benefit
|
|
||||||
|
|
|
Instruments
|
Pension Plans
|
Total
|
||||||
|
Accumulated Other Comprehensive Income (loss) December 29, 2012, net of tax
|
|
$
|
180
|
|
$
|
(31,509
|
)
|
$
|
(31,329
|
)
|
|
Other comprehensive gain before reclassifications
|
|
1,917
|
|
—
|
|
1,917
|
|
|||
|
Amounts reclassified from accumulated other comprehensive income (loss)
|
|
(671
|
)
|
1,610
|
|
939
|
|
|||
|
Net current-period other comprehensive income
|
|
1,246
|
|
1,610
|
|
2,856
|
|
|||
|
Accumulated Other Comprehensive Income (loss) June 29, 2013, net of tax
|
|
$
|
1,426
|
|
$
|
(29,899
|
)
|
$
|
(28,473
|
)
|
|
|
Three Months Ended
|
Six Months Ended
|
||||||||||
|
|
June 29,
2013 |
June 30,
2012 |
June 29,
2013 |
June 30,
2012 |
||||||||
|
Service cost
|
$
|
76
|
|
$
|
82
|
|
$
|
153
|
|
$
|
163
|
|
|
Interest cost
|
1,318
|
|
1,363
|
|
2,636
|
|
2,726
|
|
||||
|
Expected return on plan assets
|
(1,819
|
)
|
(1,678
|
)
|
(3,638
|
)
|
(3,355
|
)
|
||||
|
Amortization of prior service cost
|
15
|
|
22
|
|
30
|
|
44
|
|
||||
|
Amortization of net loss
|
1,300
|
|
1,189
|
|
2,600
|
|
2,378
|
|
||||
|
Net pension cost
|
$
|
890
|
|
$
|
978
|
|
$
|
1,781
|
|
$
|
1,956
|
|
|
(9)
|
Derivatives
|
|
Derivatives Designated
|
Balance Sheet
|
Asset Derivatives Fair Value
|
|||||
|
as Hedges
|
Location
|
June 29, 2013
|
December 29, 2012
|
||||
|
Corn options
|
Other current assets
|
$
|
2,688
|
|
$
|
490
|
|
|
Natural gas swaps
|
Other current assets
|
—
|
|
11
|
|
||
|
|
|
|
|
||||
|
Total asset derivatives designated as hedges
|
$
|
2,688
|
|
$
|
501
|
|
|
|
|
|
|
|
||||
|
Derivatives Not
Designated as
Hedges
|
|
|
|
|
|
||
|
Heating oil swaps and options
|
Other current assets
|
$
|
31
|
|
$
|
104
|
|
|
Corn futures
|
Other current assets
|
3
|
|
117
|
|
||
|
|
|
|
|
||||
|
Total asset derivatives not designated as hedges
|
$
|
34
|
|
$
|
221
|
|
|
|
|
|
|
|
||||
|
Total asset derivatives
|
|
$
|
2,722
|
|
$
|
722
|
|
|
Derivatives Designated
|
Balance Sheet
|
Liability Derivatives Fair Value
|
|||||
|
as Hedges
|
Location
|
June 29, 2013
|
December 29, 2012
|
||||
|
Natural gas swaps
|
Accrued expenses
|
$
|
116
|
|
$
|
21
|
|
|
|
|
|
|
||||
|
Total liability derivatives designated as hedges
|
$
|
116
|
|
$
|
21
|
|
|
|
|
|
|
|
||||
|
Derivatives Not
Designated as
Hedges
|
|
|
|
|
|
||
|
Natural gas swaps
|
Accrued expenses
|
$
|
28
|
|
$
|
—
|
|
|
Heating oil swaps and options
|
Accrued expenses
|
146
|
|
4
|
|
||
|
Corn options
|
Accrued expenses
|
—
|
|
119
|
|
||
|
|
|
|
|
||||
|
Total liability derivatives not designated as hedges
|
$
|
174
|
|
$
|
123
|
|
|
|
|
|
|
|
||||
|
Total liability derivatives
|
$
|
290
|
|
$
|
144
|
|
|
|
Derivatives
Designated as
Cash Flow Hedges
|
Gain or (Loss)
Recognized in OCI
on Derivatives
(Effective Portion) (a)
|
Gain or (Loss)
Reclassified from
Accumulated OCI
into Income
(Effective Portion) (b)
|
Gain or (Loss)
Recognized in Income
on Derivatives
(Ineffective Portion and
Amount Excluded from
Effectiveness Testing) (c)
|
|||||||||||||||
|
|
2013
|
2012
|
2013
|
2012
|
2013
|
2012
|
||||||||||||
|
Interest rate swaps
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
(28
|
)
|
$
|
—
|
|
$
|
—
|
|
|
Corn options
|
1,450
|
|
—
|
|
866
|
|
—
|
|
(288
|
)
|
—
|
|
||||||
|
Natural gas swaps
|
(97
|
)
|
217
|
|
244
|
|
(295
|
)
|
(7
|
)
|
—
|
|
||||||
|
|
|
|
|
|
|
|
||||||||||||
|
Total
|
$
|
1,353
|
|
$
|
217
|
|
$
|
1,110
|
|
$
|
(323
|
)
|
$
|
(295
|
)
|
$
|
—
|
|
|
(a)
|
Amount recognized in accumulated OCI (effective portion) is reported as accumulated other comprehensive income/(loss) of approximately $
1.4 million
and approximately $
0.2 million
recorded net of taxes of approximately $
0.5 million
and $
0.1 million
as of
June 29, 2013
and
June 30, 2012
, respectively.
|
|
(b)
|
Gains and (losses) reclassified from accumulated OCI into income (effective portion) for interest rate swaps is included in interest expense and corn options and natural gas swaps are included in cost of sales, respectively, in the Company’s consolidated statements of operations.
|
|
(c)
|
Gains and (losses) recognized in income on derivatives (ineffective portion) for interest rate swaps, corn options and natural gas swaps is included in other income/(expense), net in the Company’s consolidated statements of operations.
|
|
Derivatives
Designated as
Cash Flow Hedges
|
Gain or (Loss)
Recognized in OCI
on Derivatives
(Effective Portion) (a)
|
Gain or (Loss)
Reclassified From
Accumulated OCI
into Income
(Effective Portion) (b)
|
Gain or (Loss)
Recognized in Income
on Derivatives
(Ineffective Portion and
Amount Excluded from
Effectiveness Testing) (c)
|
|||||||||||||||
|
|
2013
|
2012
|
2013
|
2012
|
2013
|
2012
|
||||||||||||
|
Interest rate swaps
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
(260
|
)
|
$
|
—
|
|
$
|
—
|
|
|
Corn options
|
3,041
|
|
—
|
|
908
|
|
—
|
|
(34
|
)
|
—
|
|
||||||
|
Natural gas swaps
|
87
|
|
(483
|
)
|
187
|
|
(1,008
|
)
|
(8
|
)
|
3
|
|
||||||
|
|
|
|
|
|
|
|
||||||||||||
|
Total
|
$
|
3,128
|
|
$
|
(483
|
)
|
$
|
1,095
|
|
$
|
(1,268
|
)
|
$
|
(42
|
)
|
$
|
3
|
|
|
(a)
|
Amount recognized in accumulated OCI (effective portion) is reported as accumulated other comprehensive income/(loss) of approximately $
3.1 million
and approximately $
0.5 million
recorded net of taxes of approximately $
1.2 million
and $
0.2 million
as of
June 29, 2013
and
June 30, 2012
, respectively.
|
|
(b)
|
Gains and (losses) reclassified from accumulated OCI into income (effective portion) for interest rate swaps is included in interest expense and corn options and natural gas swaps are included in cost of sales, respectively, in the Company’s consolidated statements of operations.
|
|
(c)
|
Gains and (losses) recognized in income on derivatives (ineffective portion) for interest rate swaps, corn options and natural gas swaps is included in other income/(expense), net in the Company’s consolidated statements of operations.
|
|
|
|
Fair Value Measurements at June 29, 2013 Using
|
||||||||||
|
|
|
Quoted Prices in
Active Markets for
Identical Assets
|
Significant Other
Observable
Inputs
|
Significant
Unobservable
Inputs
|
||||||||
|
(In thousands of dollars)
|
Total
|
(Level 1)
|
(Level 2)
|
(Level 3)
|
||||||||
|
Assets:
|
|
|
|
|
||||||||
|
Derivative instruments
|
$
|
2,722
|
|
$
|
—
|
|
$
|
2,722
|
|
$
|
—
|
|
|
Total Assets
|
$
|
2,722
|
|
$
|
—
|
|
$
|
2,722
|
|
$
|
—
|
|
|
|
|
|
|
|
||||||||
|
Liabilities:
|
|
|
|
|
||||||||
|
Derivative instruments
|
$
|
290
|
|
$
|
—
|
|
$
|
290
|
|
$
|
—
|
|
|
Senior Notes
|
276,563
|
|
—
|
|
276,563
|
|
—
|
|
||||
|
Total Liabilities
|
$
|
276,853
|
|
$
|
—
|
|
$
|
276,853
|
|
$
|
—
|
|
|
(11)
|
Contingencies
|
|
(12)
|
Business Segments
|
|
|
Three Months Ended
|
Six Months Ended
|
||||||||||
|
|
June 29,
2013 |
June 30,
2012 |
June 29,
2013 |
June 30,
2012 |
||||||||
|
Rendering
|
$
|
350,597
|
|
$
|
371,481
|
|
$
|
717,771
|
|
$
|
693,793
|
|
|
Bakery
|
72,996
|
|
65,193
|
|
151,244
|
|
129,989
|
|
||||
|
Total
|
$
|
423,593
|
|
$
|
436,674
|
|
$
|
869,015
|
|
$
|
823,782
|
|
|
|
Three Months Ended
|
Six Months Ended
|
||||||||||
|
|
June 29, 2013
|
June 30, 2012
|
June 29, 2013
|
June 30, 2012
|
||||||||
|
Rendering
|
$
|
60,219
|
|
$
|
73,061
|
|
$
|
131,898
|
|
$
|
137,639
|
|
|
Bakery
|
13,743
|
|
13,093
|
|
28,183
|
|
24,145
|
|
||||
|
Corporate Activities
|
(41,875
|
)
|
(44,176
|
)
|
(89,964
|
)
|
(84,310
|
)
|
||||
|
Interest expense
|
(5,669
|
)
|
(5,753
|
)
|
(11,294
|
)
|
(12,678
|
)
|
||||
|
Net Income
|
$
|
26,418
|
|
$
|
36,225
|
|
$
|
58,823
|
|
$
|
64,796
|
|
|
|
June 29,
2013 |
December 29,
2012 |
||||
|
Rendering
|
$
|
1,090,732
|
|
$
|
1,088,775
|
|
|
Bakery
|
170,188
|
|
170,566
|
|
||
|
Corporate Activities
|
380,905
|
|
293,075
|
|
||
|
Total
|
$
|
1,641,825
|
|
$
|
1,552,416
|
|
|
(13)
|
Related Party Transactions
|
|
|
Issuer
|
Guarantors
|
Non-guarantors
|
Eliminations
|
Consolidated
|
||||||||||
|
ASSETS
|
|
|
|
|
|
||||||||||
|
Total current assets
|
$
|
211,664
|
|
$
|
510,553
|
|
$
|
2,479
|
|
$
|
(401,726
|
)
|
$
|
322,970
|
|
|
Investment in subsidiaries
|
1,550,047
|
|
—
|
|
—
|
|
(1,550,047
|
)
|
—
|
|
|||||
|
Property, plant and equipment, net
|
161,850
|
|
317,117
|
|
—
|
|
—
|
|
478,967
|
|
|||||
|
Intangible assets, net
|
15,485
|
|
310,021
|
|
259
|
|
—
|
|
325,765
|
|
|||||
|
Goodwill
|
21,860
|
|
359,243
|
|
266
|
|
—
|
|
381,369
|
|
|||||
|
Investment in unconsolidated subsidiary
|
—
|
|
—
|
|
104,297
|
|
—
|
|
104,297
|
|
|||||
|
Other assets
|
25,263
|
|
3,194
|
|
—
|
|
—
|
|
28,457
|
|
|||||
|
|
$
|
1,986,169
|
|
$
|
1,500,128
|
|
$
|
107,301
|
|
$
|
(1,951,773
|
)
|
$
|
1,641,825
|
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
|
|
|
|
|
|||||||
|
Total current liabilities
|
$
|
478,593
|
|
$
|
58,319
|
|
$
|
(1,205
|
)
|
$
|
(401,726
|
)
|
$
|
133,981
|
|
|
Long-term debt, net of current portion
|
250,000
|
|
99
|
|
—
|
|
—
|
|
250,099
|
|
|||||
|
Other noncurrent liabilities
|
59,300
|
|
—
|
|
169
|
|
—
|
|
59,469
|
|
|||||
|
Deferred income taxes
|
71,166
|
|
—
|
|
—
|
|
—
|
|
71,166
|
|
|||||
|
Total liabilities
|
859,059
|
|
58,418
|
|
(1,036
|
)
|
(401,726
|
)
|
514,715
|
|
|||||
|
Total stockholders’ equity
|
1,127,110
|
|
1,441,710
|
|
108,337
|
|
(1,550,047
|
)
|
1,127,110
|
|
|||||
|
|
$
|
1,986,169
|
|
$
|
1,500,128
|
|
$
|
107,301
|
|
$
|
(1,951,773
|
)
|
$
|
1,641,825
|
|
|
|
Issuer
|
Guarantors
|
Non-guarantors
|
Eliminations
|
Consolidated
|
||||||||||
|
ASSETS
|
|
|
|
|
|
||||||||||
|
Total current assets
|
$
|
174,576
|
|
$
|
455,604
|
|
$
|
3,037
|
|
$
|
(342,955
|
)
|
$
|
290,262
|
|
|
Investment in subsidiaries
|
1,449,577
|
|
—
|
|
—
|
|
(1,449,577
|
)
|
—
|
|
|||||
|
Property, plant and equipment, net
|
148,131
|
|
305,796
|
|
—
|
|
—
|
|
453,927
|
|
|||||
|
Intangible assets, net
|
14,497
|
|
322,634
|
|
271
|
|
—
|
|
337,402
|
|
|||||
|
Goodwill
|
21,860
|
|
359,243
|
|
266
|
|
—
|
|
381,369
|
|
|||||
|
Investment in unconsolidated subsidiary
|
—
|
|
—
|
|
62,495
|
|
—
|
|
62,495
|
|
|||||
|
Other assets
|
26,530
|
|
431
|
|
—
|
|
—
|
|
26,961
|
|
|||||
|
|
$
|
1,835,171
|
|
$
|
1,443,708
|
|
$
|
66,069
|
|
$
|
(1,792,532
|
)
|
$
|
1,552,416
|
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
|
|
|
|
|
|||||||
|
Total current liabilities
|
$
|
414,755
|
|
$
|
59,218
|
|
$
|
666
|
|
$
|
(342,955
|
)
|
$
|
131,684
|
|
|
Long-term debt, net of current portion
|
250,000
|
|
142
|
|
—
|
|
—
|
|
250,142
|
|
|||||
|
Other noncurrent liabilities
|
61,365
|
|
—
|
|
174
|
|
—
|
|
61,539
|
|
|||||
|
Deferred income taxes
|
46,615
|
|
—
|
|
—
|
|
—
|
|
46,615
|
|
|||||
|
Total liabilities
|
772,735
|
|
59,360
|
|
840
|
|
(342,955
|
)
|
489,980
|
|
|||||
|
Total stockholders’ equity
|
1,062,436
|
|
1,384,348
|
|
65,229
|
|
(1,449,577
|
)
|
1,062,436
|
|
|||||
|
|
$
|
1,835,171
|
|
$
|
1,443,708
|
|
$
|
66,069
|
|
$
|
(1,792,532
|
)
|
$
|
1,552,416
|
|
|
|
Issuer
|
Guarantors
|
Non-guarantors
|
Eliminations
|
Consolidated
|
||||||||||
|
Net sales
|
$
|
159,392
|
|
$
|
309,689
|
|
$
|
1,761
|
|
$
|
(47,249
|
)
|
$
|
423,593
|
|
|
Cost and expenses:
|
|
|
|
|
|
||||||||||
|
Cost of sales and operating expenses
|
124,146
|
|
231,381
|
|
1,644
|
|
(47,249
|
)
|
309,922
|
|
|||||
|
Selling, general and administrative expenses
|
22,106
|
|
18,674
|
|
13
|
|
—
|
|
40,793
|
|
|||||
|
Depreciation and amortization
|
5,817
|
|
16,253
|
|
6
|
|
—
|
|
22,076
|
|
|||||
|
Total costs and expenses
|
152,069
|
|
266,308
|
|
1,663
|
|
(47,249
|
)
|
372,791
|
|
|||||
|
Operating income
|
7,323
|
|
43,381
|
|
98
|
|
—
|
|
50,802
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|||||||
|
Interest expense
|
(5,666
|
)
|
(3
|
)
|
—
|
|
—
|
|
(5,669
|
)
|
|||||
|
Other, net
|
(612
|
)
|
212
|
|
(18
|
)
|
—
|
|
(418
|
)
|
|||||
|
Equity in net loss of unconsolidated subsidiary
|
—
|
|
—
|
|
(1,962
|
)
|
—
|
|
(1,962
|
)
|
|||||
|
Earnings in investments in subsidiaries
|
25,767
|
|
—
|
|
—
|
|
(25,767
|
)
|
—
|
|
|||||
|
Income/(loss) before taxes
|
26,812
|
|
43,590
|
|
(1,882
|
)
|
(25,767
|
)
|
42,753
|
|
|||||
|
Income taxes (benefit)
|
394
|
|
16,663
|
|
(722
|
)
|
—
|
|
16,335
|
|
|||||
|
Net income (loss)
|
$
|
26,418
|
|
$
|
26,927
|
|
$
|
(1,160
|
)
|
$
|
(25,767
|
)
|
$
|
26,418
|
|
|
|
Issuer
|
Guarantors
|
Non-guarantors
|
Eliminations
|
Consolidated
|
||||||||||
|
Net sales
|
$
|
321,264
|
|
$
|
629,100
|
|
$
|
5,895
|
|
$
|
(87,244
|
)
|
$
|
869,015
|
|
|
Cost and expenses:
|
|
|
|
|
|
||||||||||
|
Cost of sales and operating expenses
|
248,250
|
|
465,902
|
|
5,700
|
|
(87,244
|
)
|
632,608
|
|
|||||
|
Selling, general and administrative expenses
|
44,673
|
|
38,360
|
|
53
|
|
—
|
|
83,086
|
|
|||||
|
Depreciation and amortization
|
11,955
|
|
31,976
|
|
12
|
|
—
|
|
43,943
|
|
|||||
|
Total costs and expenses
|
304,878
|
|
536,238
|
|
5,765
|
|
(87,244
|
)
|
759,637
|
|
|||||
|
Operating income
|
16,386
|
|
92,862
|
|
130
|
|
—
|
|
109,378
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|||||||
|
Interest expense
|
(11,287
|
)
|
(7
|
)
|
—
|
|
—
|
|
(11,294
|
)
|
|||||
|
Other, net
|
326
|
|
347
|
|
(24
|
)
|
—
|
|
649
|
|
|||||
|
Equity in net loss of unconsolidated subsidiary
|
—
|
|
—
|
|
(3,157
|
)
|
—
|
|
(3,157
|
)
|
|||||
|
Earnings in investments in subsidiaries
|
55,485
|
|
—
|
|
—
|
|
(55,485
|
)
|
—
|
|
|||||
|
Income/(loss) from operations before taxes
|
60,910
|
|
93,202
|
|
(3,051
|
)
|
(55,485
|
)
|
95,576
|
|
|||||
|
Income taxes (benefit)
|
2,087
|
|
35,840
|
|
(1,174
|
)
|
—
|
|
36,753
|
|
|||||
|
Net income (loss)
|
$
|
58,823
|
|
$
|
57,362
|
|
$
|
(1,877
|
)
|
$
|
(55,485
|
)
|
$
|
58,823
|
|
|
|
Issuer
|
Guarantors
|
Non-guarantors
|
Eliminations
|
Consolidated
|
||||||||||
|
Net sales
|
$
|
184,570
|
|
$
|
300,190
|
|
$
|
3,721
|
|
$
|
(51,807
|
)
|
$
|
436,674
|
|
|
Cost and expenses:
|
|
|
|
|
|
||||||||||
|
Cost of sales and operating expenses
|
142,905
|
|
219,470
|
|
3,570
|
|
(51,807
|
)
|
314,138
|
|
|||||
|
Selling, general and administrative expenses
|
18,927
|
|
17,933
|
|
34
|
|
—
|
|
36,894
|
|
|||||
|
Depreciation and amortization
|
5,816
|
|
15,853
|
|
5
|
|
—
|
|
21,674
|
|
|||||
|
Total costs and expenses
|
167,648
|
|
253,256
|
|
3,609
|
|
(51,807
|
)
|
372,706
|
|
|||||
|
Operating income
|
16,922
|
|
46,934
|
|
112
|
|
—
|
|
63,968
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|||||||
|
Interest expense
|
(5,752
|
)
|
(1
|
)
|
—
|
|
—
|
|
(5,753
|
)
|
|||||
|
Other, net
|
(588
|
)
|
878
|
|
(20
|
)
|
—
|
|
270
|
|
|||||
|
Equity in net loss of unconsolidated subsidiary
|
—
|
|
—
|
|
(656
|
)
|
—
|
|
(656
|
)
|
|||||
|
Earnings in investments in subsidiaries
|
29,519
|
|
—
|
|
—
|
|
(29,519
|
)
|
—
|
|
|||||
|
Income/(loss) before taxes
|
40,101
|
|
47,811
|
|
(564
|
)
|
(29,519
|
)
|
57,829
|
|
|||||
|
Income taxes
|
3,876
|
|
17,938
|
|
(210
|
)
|
—
|
|
21,604
|
|
|||||
|
Net income (loss)
|
$
|
36,225
|
|
$
|
29,873
|
|
$
|
(354
|
)
|
$
|
(29,519
|
)
|
$
|
36,225
|
|
|
|
Issuer
|
Guarantors
|
Non-guarantors
|
Eliminations
|
Consolidated
|
||||||||||
|
Net sales
|
$
|
337,558
|
|
$
|
573,699
|
|
$
|
6,275
|
|
$
|
(93,750
|
)
|
$
|
823,782
|
|
|
Cost and expenses:
|
|
|
|
|
|
||||||||||
|
Cost of sales and operating expenses
|
264,002
|
|
414,283
|
|
6,072
|
|
(93,750
|
)
|
590,607
|
|
|||||
|
Selling, general and administrative expenses
|
39,712
|
|
34,478
|
|
73
|
|
—
|
|
74,263
|
|
|||||
|
Depreciation and amortization
|
12,112
|
|
30,311
|
|
11
|
|
—
|
|
42,434
|
|
|||||
|
Total costs and expenses
|
315,826
|
|
479,072
|
|
6,156
|
|
(93,750
|
)
|
707,304
|
|
|||||
|
Operating income
|
21,732
|
|
94,627
|
|
119
|
|
—
|
|
116,478
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|||||||
|
Interest expense
|
(12,677
|
)
|
(1
|
)
|
—
|
|
—
|
|
(12,678
|
)
|
|||||
|
Other, net
|
(1,230
|
)
|
905
|
|
(13
|
)
|
—
|
|
(338
|
)
|
|||||
|
Equity in net loss of unconsolidated subsidiary
|
—
|
|
—
|
|
(892
|
)
|
—
|
|
(892
|
)
|
|||||
|
Earnings in investments in subsidiaries
|
59,851
|
|
—
|
|
—
|
|
(59,851
|
)
|
—
|
|
|||||
|
Income/(loss) from operations before taxes
|
67,676
|
|
95,531
|
|
(786
|
)
|
(59,851
|
)
|
102,570
|
|
|||||
|
Income taxes (benefit)
|
2,880
|
|
35,184
|
|
(290
|
)
|
—
|
|
37,774
|
|
|||||
|
Net income (loss)
|
$
|
64,796
|
|
$
|
60,347
|
|
$
|
(496
|
)
|
$
|
(59,851
|
)
|
$
|
64,796
|
|
|
|
Issuer
|
Guarantors
|
Non-guarantors
|
Eliminations
|
Consolidated
|
||||||||||
|
Net income
|
$
|
26,418
|
|
$
|
26,927
|
|
$
|
(1,160
|
)
|
$
|
(25,767
|
)
|
$
|
26,418
|
|
|
Other comprehensive income (loss), net of tax:
|
|
|
|
|
|
||||||||||
|
Pension adjustments
|
805
|
|
—
|
|
—
|
|
—
|
|
805
|
|
|||||
|
Natural gas swap derivative adjustments
|
(209
|
)
|
—
|
|
—
|
|
—
|
|
(209
|
)
|
|||||
|
Corn option derivative adjustments
|
358
|
|
—
|
|
—
|
|
—
|
|
358
|
|
|||||
|
Total other comprehensive income, net of tax
|
954
|
|
—
|
|
—
|
|
—
|
|
954
|
|
|||||
|
Total comprehensive income (loss)
|
$
|
27,372
|
|
$
|
26,927
|
|
$
|
(1,160
|
)
|
$
|
(25,767
|
)
|
$
|
27,372
|
|
|
|
Issuer
|
Guarantors
|
Non-guarantors
|
Eliminations
|
Consolidated
|
||||||||||
|
Net income
|
$
|
58,823
|
|
$
|
57,362
|
|
$
|
(1,877
|
)
|
$
|
(55,485
|
)
|
$
|
58,823
|
|
|
Other comprehensive income (loss), net of tax:
|
|
|
|
|
|
||||||||||
|
Pension adjustments
|
1,610
|
|
—
|
|
—
|
|
—
|
|
1,610
|
|
|||||
|
Natural gas swap derivative adjustments
|
(61
|
)
|
—
|
|
—
|
|
—
|
|
(61
|
)
|
|||||
|
Corn option derivative adjustments
|
1,307
|
|
—
|
|
—
|
|
—
|
|
1,307
|
|
|||||
|
Total other comprehensive income
|
2,856
|
|
—
|
|
—
|
|
—
|
|
2,856
|
|
|||||
|
Total comprehensive income (loss)
|
$
|
61,679
|
|
$
|
57,362
|
|
$
|
(1,877
|
)
|
$
|
(55,485
|
)
|
$
|
61,679
|
|
|
|
Issuer
|
Guarantors
|
Non-guarantors
|
Eliminations
|
Consolidated
|
||||||||||
|
Net income
|
$
|
36,225
|
|
$
|
29,873
|
|
$
|
(354
|
)
|
$
|
(29,519
|
)
|
$
|
36,225
|
|
|
Other comprehensive income (loss), net of tax:
|
|
|
|
|
|
||||||||||
|
Pension adjustments
|
742
|
|
—
|
|
—
|
|
—
|
|
742
|
|
|||||
|
Natural gas swap derivative adjustments
|
314
|
|
—
|
|
—
|
|
—
|
|
314
|
|
|||||
|
Interest rate swap derivative adjustment
|
17
|
|
—
|
|
—
|
|
—
|
|
17
|
|
|||||
|
Total other comprehensive income, net of tax
|
1,073
|
|
—
|
|
—
|
|
—
|
|
1,073
|
|
|||||
|
Total comprehensive income (loss)
|
$
|
37,298
|
|
$
|
29,873
|
|
$
|
(354
|
)
|
$
|
(29,519
|
)
|
$
|
37,298
|
|
|
|
Issuer
|
Guarantors
|
Non-guarantors
|
Eliminations
|
Consolidated
|
||||||||||
|
Net income
|
$
|
64,796
|
|
$
|
60,347
|
|
$
|
(496
|
)
|
$
|
(59,851
|
)
|
$
|
64,796
|
|
|
Other comprehensive income (loss), net of tax:
|
|
|
|
|
|
||||||||||
|
Pension adjustments
|
1,484
|
|
—
|
|
—
|
|
—
|
|
1,484
|
|
|||||
|
Natural gas swap derivative adjustments
|
321
|
|
—
|
|
—
|
|
—
|
|
321
|
|
|||||
|
Interest rate swap derivative adjustment
|
159
|
|
—
|
|
—
|
|
—
|
|
159
|
|
|||||
|
Total other comprehensive income
|
1,964
|
|
—
|
|
—
|
|
—
|
|
1,964
|
|
|||||
|
Total comprehensive income (loss)
|
$
|
66,760
|
|
$
|
60,347
|
|
$
|
(496
|
)
|
$
|
(59,851
|
)
|
$
|
66,760
|
|
|
|
Issuer
|
Guarantors
|
Non-guarantors
|
Eliminations
|
Consolidated
|
||||||||||
|
Cash flows from operating activities:
|
|
|
|
|
|
||||||||||
|
Net income
|
$
|
58,823
|
|
$
|
57,362
|
|
$
|
(1,877
|
)
|
$
|
(55,485
|
)
|
$
|
58,823
|
|
|
Earnings in investments in subsidiaries
|
(55,485
|
)
|
—
|
|
—
|
|
55,485
|
|
—
|
|
|||||
|
Other operating cash flows
|
98,273
|
|
(29,858
|
)
|
1,942
|
|
—
|
|
70,357
|
|
|||||
|
Net cash provided by operating activities
|
101,611
|
|
27,504
|
|
65
|
|
—
|
|
129,180
|
|
|||||
|
|
|
|
|
|
|
||||||||||
|
Cash flows from investing activities:
|
|
|
|
|
|
||||||||||
|
Capital expenditures
|
(24,344
|
)
|
(30,345
|
)
|
—
|
|
—
|
|
(54,689
|
)
|
|||||
|
Investment in subsidiaries and affiliates
|
(44,985
|
)
|
—
|
|
(44,959
|
)
|
44,985
|
|
(44,959
|
)
|
|||||
|
Gross proceeds from sale of property, plant and equipment and other assets
|
744
|
|
548
|
|
—
|
|
—
|
|
1,292
|
|
|||||
|
Proceeds from insurance settlements
|
1,531
|
|
450
|
|
—
|
|
—
|
|
1,981
|
|
|||||
|
Payments related to routes and other intangibles
|
(649
|
)
|
—
|
|
—
|
|
—
|
|
(649
|
)
|
|||||
|
Net cash used in investing activities
|
(67,703
|
)
|
(29,347
|
)
|
(44,959
|
)
|
44,985
|
|
(97,024
|
)
|
|||||
|
|
|
|
|
|
|
||||||||||
|
Cash flows from financing activities:
|
|
|
|
|
|
||||||||||
|
Payments on long-term debt
|
—
|
|
(40
|
)
|
—
|
|
—
|
|
(40
|
)
|
|||||
|
Issuances of common stock
|
32
|
|
—
|
|
—
|
|
—
|
|
32
|
|
|||||
|
Contributions from parent
|
—
|
|
—
|
|
44,985
|
|
(44,985
|
)
|
—
|
|
|||||
|
Minimum withholding taxes paid on stock awards
|
(2,529
|
)
|
—
|
|
—
|
|
—
|
|
(2,529
|
)
|
|||||
|
Excess tax benefits from stock-based compensation
|
703
|
|
—
|
|
—
|
|
—
|
|
703
|
|
|||||
|
Net cash used in financing activities
|
(1,794
|
)
|
(40
|
)
|
44,985
|
|
(44,985
|
)
|
(1,834
|
)
|
|||||
|
|
|
|
|
|
|
||||||||||
|
Net increase/(decrease) in cash and cash equivalents
|
32,114
|
|
(1,883
|
)
|
91
|
|
—
|
|
30,322
|
|
|||||
|
Cash and cash equivalents at beginning of year
|
96,945
|
|
5,577
|
|
727
|
|
—
|
|
103,249
|
|
|||||
|
Cash and cash equivalents at end of year
|
$
|
129,059
|
|
$
|
3,694
|
|
$
|
818
|
|
$
|
—
|
|
$
|
133,571
|
|
|
|
Issuer
|
Guarantors
|
Non-guarantors
|
Eliminations
|
Consolidated
|
||||||||||
|
Cash flows from operating activities:
|
|
|
|
|
|
||||||||||
|
Net income
|
$
|
64,796
|
|
$
|
60,347
|
|
$
|
(496
|
)
|
$
|
(59,851
|
)
|
$
|
64,796
|
|
|
Earnings in investments in subsidiaries
|
(59,851
|
)
|
—
|
|
—
|
|
59,851
|
|
—
|
|
|||||
|
Other operating cash flows
|
108,858
|
|
(30,770
|
)
|
(924
|
)
|
—
|
|
77,164
|
|
|||||
|
Net cash provided by operating activities
|
113,803
|
|
29,577
|
|
(1,420
|
)
|
—
|
|
141,960
|
|
|||||
|
|
|
|
|
|
|
||||||||||
|
Cash flows from investing activities:
|
|
|
|
|
|
||||||||||
|
Capital expenditures
|
(23,682
|
)
|
(29,814
|
)
|
—
|
|
—
|
|
(53,496
|
)
|
|||||
|
Acquisitions
|
(2,000
|
)
|
—
|
|
—
|
|
—
|
|
(2,000
|
)
|
|||||
|
Investment in subsidiaries and affiliates
|
(25,542
|
)
|
—
|
|
(25,518
|
)
|
25,542
|
|
(25,518
|
)
|
|||||
|
Gross proceeds from sale of property, plant and equipment and other assets
|
1,214
|
|
1,302
|
|
—
|
|
—
|
|
2,516
|
|
|||||
|
Proceeds from insurance settlements
|
—
|
|
900
|
|
—
|
|
—
|
|
900
|
|
|||||
|
Net cash used in investing activities
|
(50,010
|
)
|
(27,612
|
)
|
(25,518
|
)
|
25,542
|
|
(77,598
|
)
|
|||||
|
|
|
|
|
|
|
||||||||||
|
Cash flows from financing activities:
|
|
|
|
|
|
||||||||||
|
Payments on long-term debt
|
(30,000
|
)
|
(5
|
)
|
—
|
|
—
|
|
(30,005
|
)
|
|||||
|
Issuances of common stock
|
64
|
|
—
|
|
—
|
|
—
|
|
64
|
|
|||||
|
Contributions from parent
|
—
|
|
—
|
|
25,542
|
|
(25,542
|
)
|
—
|
|
|||||
|
Minimum withholding taxes paid on stock awards
|
(2,214
|
)
|
—
|
|
—
|
|
—
|
|
(2,214
|
)
|
|||||
|
Excess tax benefits from stock-based compensation
|
1,111
|
|
—
|
|
—
|
|
—
|
|
1,111
|
|
|||||
|
Net cash used in financing activities
|
(31,039
|
)
|
(5
|
)
|
25,542
|
|
(25,542
|
)
|
(31,044
|
)
|
|||||
|
|
|
|
|
|
|
||||||||||
|
Net increase/(decrease) in cash and cash equivalents
|
32,754
|
|
1,960
|
|
(1,396
|
)
|
—
|
|
33,318
|
|
|||||
|
Cash and cash equivalents at beginning of year
|
35,207
|
|
1,773
|
|
1,956
|
|
—
|
|
38,936
|
|
|||||
|
Cash and cash equivalents at end of year
|
$
|
67,961
|
|
$
|
3,733
|
|
$
|
560
|
|
$
|
—
|
|
$
|
72,254
|
|
|
•
|
Lower finished product prices for MBM, PM (pet food), BFT, PG and YG in the second quarter of
fiscal 2013
as compared to the second quarter of
fiscal 2012
is a sign of decreased demand in domestic and export markets for MBM, PM (pet food), BFT, PG and YG. These lower prices were partially offset by an overall increase in PM (feed grade) and corn, which is used to price BBP. Corn prices were up as a result of a short supply of corn that increased demand for BBP. Overall, finished product prices were unfavorable to the Company's sales revenue, but this unfavorable result was partially offset by the negative impact on raw material cost, due to the Company's formula pricing arrangements with raw material suppliers, which index raw material cost to the prices of finished product derived from the raw material. The financial impact of finished goods prices on sales revenue and raw material cost is summarized below in Results of Operations. Comparative sales price information from the Jacobsen Index, an established trading exchange publisher (the "Jacobsen") used by management to monitor performance, is provided below in Summary of Key Indicators.
|
|
•
|
Higher raw material volumes were collected from the Company's pork, poultry and beef suppliers during the second quarter of
fiscal 2013
as compared to the second quarter of
fiscal 2012
. Management believes the increase in raw material volume is due to an increase in slaughter and processor rates by the Company's raw material suppliers during the quarter as a result of increased demand. The financial impact of higher raw material volumes is summarized below in Results of Operations.
|
|
•
|
Energy prices for natural gas and diesel fuel increased during the second quarter of
fiscal 2013
as compared to the second quarter of
fiscal 2012
. The financial impact of energy costs is summarized below in Results of Operations.
|
|
•
|
Finished product prices for MBM, PM (both feed grade and pet food) and corn increased during the first six months of fiscal 2013 as compared to the same period of fiscal 2012, while finished product prices for BFT, PG and YG decreased during the first six months of fiscal 2013 as compared to the same period of fiscal 2012. No assurance can be given that this increase in commodity prices for various proteins and corn will continue in the future or that commodity prices for various fats, including BFT, PG and YG, will not decrease further, as commodity prices are volatile by their nature. A decrease in commodity prices for some or all of the Company's products could have a significant impact on the Company’s earnings for the remainder of fiscal 2013 and into future periods.
|
|
•
|
The Company collected higher raw material volumes in the first six months of fiscal 2013 as compared to the first six months of fiscal 2012, as slaughter and processor rates for the Company's poultry and pork raw material suppliers increased. No assurance can be given that this increased activity from the Company's poultry and pork raw material suppliers will continue in the future. If raw material suppliers reduce their slaughter and processing rates in the future there could be a negative impact on the Company's ability to obtain raw materials for the Company's operations.
|
|
•
|
In July 2013, the Indonesia markets for MBM derived from U.S. beef reopened. The opening of this market for MBM derived from U.S. Beef will impact the Company's West Coast MBM market which could have a positive impact on the Company's earnings in future periods.
|
|
•
|
The Company consumes significant volumes of natural gas to operate boilers in its plants, which generate steam to heat raw material. Natural gas represents a significant component of factory cost included in cost of sales. The Company also consumes significant volumes of diesel fuel to operate its fleet of tractors and trucks used to collect raw material. Diesel fuel represents a significant component of collection costs included in cost of sales. Higher natural gas and diesel fuel prices were incurred during the first six months of fiscal 2013 as compared to the same period of fiscal 2012. These prices can be volatile and there can be no assurance that these prices will not increase in the near future, thereby representing an ongoing challenge to the Company’s operating results for future periods. A material increase in energy prices for natural gas and/or diesel fuel over a sustained period of time could materially adversely affect the Company’s business, financial condition and results of operations.
|
|
•
|
Pursuant to the requirements established by the Energy Independence and Security Act of 2007 ("EISA"), the Environmental Protection Agency ("EPA") finalized regulations for the Renewable Fuel Standard, which were published in the Federal Register on March 26, 2010 ("RFS2"). The regulations mandated the domestic use of biomass-based diesel (biodiesel or renewable diesel) of 1.0 billion gallons in 2012. Beyond 2012 the regulations require a minimum of 1.0 billion gallons of biomass-based diesel for each year through 2022, which amount is subject to increase by the EPA Administrator. On September 14, 2012, the EPA issued a final rule establishing the biomass-based diesel volume for calendar year 2013 to be 1.28 billion gallons, effective on November 26, 2012. Biomass-based diesel also qualifies to fulfill the non-specified portion of the advanced bio-fuel requirement in the EISA. In order to qualify as a "renewable fuel" each type of fuel from each type of feed stock is required to lower greenhouse gas emissions ("GHG") by levels specified in the regulation. The EPA has determined that bio-fuels (either biodiesel or renewable diesel) produced from waste oils, fats and greases result in an 86% reduction in GHG emissions, exceeding the 50% requirement established by the regulation. Prices for the Company's finished products may be impacted by worldwide government policies relating to renewable fuels and GHG. Programs like RFS2 and tax credits for bio-fuels both in the U.S. and abroad may positively impact the demand for the Company's finished products. Accordingly, changes to, a failure to enforce or discontinuing any of these programs could have a negative impact on the Company's business and results of operations.
|
|
•
|
The Company’s exports are subject to the imposition of tariffs, quotas, trade barriers and other trade protection measures imposed by foreign countries regarding the import of the Company’s MBM, BFT and YG. General economic and political conditions as well as the closing of borders by foreign countries to the import of the Company’s products due to animal disease or other perceived health or safety issues impact the Company. As a result trade policies of both U.S and foreign countries could have a negative impact on the Company’s business and results of operations.
|
|
•
|
The emergence of diseases such as Swine Flu ("H1N1") and highly pathogenic strains of avian influenza, collectively called Bird Flu, that are in or associated with animals and have the potential to also threaten humans has created concern that such diseases could spread and cause a global pandemic. The H5N1 strain of Bird Flu has not been reported in North America. Outbreaks of a different strain of Bird Flu ("H7N3"), however, were reported by Mexican animal health authorities on chicken farms in Mexico during 2012 and the first half of 2013. There have been no reports of human cases of the H7N3 strain, but the occurrence of another new strain of Bird Flu ("H7N9") in humans was reported in China on March 31, 2013. World health experts believe the H7N9 strain to be an animal virus that infects people in rare cases. This outbreak in China followed a seasonal pattern typical of flu viruses and no new cases have been reported since May 30, 2013. Chinese and international health authorities continue to investigate the origin of the H7N9 strain and how it is spread. To date however, there have been no incidences of person-to-person transmission of the H7N9 Bird Flu reported. As of the date of this report, neither the various strains of Bird Flu nor Swine Flu have been linked to a global disease pandemic among humans. Even though such a pandemic has not occurred, governments may be pressured to address these concerns and prohibit imports of animals, meat and animal by-products from countries or regions where the disease is detected. On or about April 15, 2013, the first case of porcine epidemic diarrhea (“PED”) virus was confirmed in the U.S. on a hog farm in Ohio. The disease has since spread into more than 15 states. The PED virus is highly contagious among pigs, but does not affect other animals and is not transmissible to humans. The effects of the PED virus on hog production will vary according to the age of the pigs affected. Death rates can be very high among young pigs, while symptoms are mild in older animals. Hogs that have the disease and recover will typically develop immunity to the PED virus and this immunity can be passed on to future offspring. Because the PED virus is common in other parts of the world and poses no threat to human health or food safety, its presence in a country or region does not restrict trade in pork or pork products. The occurrence of Swine Flu, a Bird Flu strain or any other disease in the United States that is correctly or incorrectly linked to animals and has a negative impact on meat or poultry consumption or animal production could have a material negative impact on the volume of raw materials available to the Company or the demand for the Company's finished products.
|
|
•
|
Effective August 1997, the Food and Drug Administration ("FDA"), promulgated a rule prohibiting the use of mammalian proteins, with some exceptions, in feeds for cattle, sheep and other ruminant animals (referred to herein as the "BSE Feed Rule") to prevent further spread of BSE, commonly referred to as "mad cow disease." Detection of the first case of BSE in the United States in December 2003 resulted in additional U.S. government regulations,
|
|
•
|
With respect to BSE in the United States, on October 26, 2009, the FDA began enforcing new regulations intended to further reduce the risk of spreading BSE ("Enhanced BSE Rule"). These new regulations amended the BSE Feed Rule to also prohibit the use of tallow having more than 0.15% insoluble impurities in feed for cattle or other ruminant animals. In addition, the Enhanced BSE Rule prohibits brain and spinal cord material from cattle aged 30 months and older or the carcasses of such cattle, if the brain and spinal cord are not removed, ("Prohibited Cattle Materials") and tallow derived from Prohibited Cattle Materials that also contains more than 0.15% insoluble impurities in the feed or food for all animals. The Company has followed the Enhanced BSE Rule since it was first published in 2008 and has made capital expenditures and implemented new processes and procedures to be compliant with the Enhanced BSE Rule at all of the Company's operations. Notwithstanding the foregoing, the Company can provide no assurance that unanticipated costs and/or reductions in raw material volumes related to the Company's compliance with the Enhanced BSE Rule will not negatively impact the Company’s operations and financial performance.
|
|
•
|
With respect to human food, pet food and animal feed safety, the Food and Drug Administration Amendments Act of 2007 (the "FDAAA") directs the Secretary of Health and Human Services and the FDA to promulgate significant new requirements for the pet food and animal feed industries. As a prerequisite to new requirements specified by the FDAAA, the FDA was directed to establish a Reportable Food Registry, which was implemented on September 8, 2009. On June 11, 2009, the FDA issued "Guidance for Industry: Questions and Answers Regarding the Reportable Food Registry as Established by the Food and Drug Administration Amendments Act of 2007: Draft Guidance." Stakeholder comments and questions about the Reportable Food Registry were incorporated into a second draft guidance ("RFR Draft Guidance"), which was published on September 8, 2009. In the RFR Draft Guidance, the FDA defined a reportable food, which the manufacturer or distributor would be required to report in the Reportable Food Registry, to include materials used as ingredients in animal feeds and pet foods, if there is reasonable probability that the use of such materials will cause serious adverse health consequences or death to humans or animals. The FDA issued a second version of its RFR Draft Guidance in May 2010 without finalizing it. On July 16, 2013 the FDA finalized the draft policy regarding salmonella in food for animals that the agency developed in 2010, with publication of "Compliance Policy Guide Sec. 690.800 Salmonella in Food For Animals" ("Salmonella CPG"). The Salmonella CPG describes differing criteria to determine whether pet food and farmed animal feeds that are contaminated with salmonella will be considered to be adulterated under section 402(a)(1) of the Food Drug and Cosmetic Act. According to the Salmonella CPG, any finished pet food contaminated with any species of salmonella will be considered adulterated because such feeds have direct human contact. Finished animal feeds intended for pigs, poultry and other farmed animals, however, will be considered to be adulterated only if the feed is contaminated with a species of salmonella that is considered to be pathogenic for the animal species that the feed is intended for. With issuance of the Salmonella CPG, the FDA revoked a 1967 advisory opinion on animal feeds contaminated with salmonella microorganisms and removed 21 CFR 500.35 from the Code of Federal Regulations. The impact of the FDAAA and implementation of the Reportable Food Registry on the Company, if any, will not be clear until the FDA finalizes its RFR Draft Guidance, which was not finalized as of the date of this report. The Company believes that it has adequate procedures in place to assure that its finished products are safe to use in animal feed and pet food and the Company does not currently anticipate that the FDAAA will have a significant impact on the Company’s operations or financial performance. Notwithstanding the forgoing FDA policy on salmonella, any pathogen, such as salmonella, that is correctly or incorrectly associated with the Company’s finished products could have a negative impact on the demands for the Company’s finished products.
|
|
•
|
In addition, the Food Safety Modernization Act ("FSMA") was enacted on January 4, 2011. The FSMA gave the FDA new authorities, which became effective immediately. Included among these is mandatory recall authority for adulterated foods that are likely to cause serious adverse health consequences or death to humans or animals, if the responsible party fails to cease distribution and recall such adulterated foods voluntarily. The FSMA further instructed the FDA to amend existing regulations that define its administrative detention authority. Prior to the FSMA becoming law, FDA had authority to order that an article of food be detained only if there was credible evidence or information indicating that the article of food presented a threat of serious adverse health consequences or death to humans or animals. On May 5, 2011, the FDA issued an interim final rule amending its administrative detention authority and lowering both the level of proof and the degree of risk required for detaining an article of food. This interim final rule, which became effective on July 3, 2011, gives the FDA authority to detain an article of food if there is reason to believe the food is adulterated or misbranded. The FMSA also requires the FDA to develop new regulations that, among other provisions, places additional registration requirements on food and feed producing firms. Section 102 of the FSMA amends facility registration requirements in the Federal Food, Drug and Cosmetic Act for domestic and foreign manufacturers, processors, packers or holders of food for human or animal consumption. Such facility registrations were previously required to be updated when changes in a facility occurred, but there were no provisions for renewing facility registrations. The FSMA, however, requires that facility registrations be renewed during the fourth quarter of each even-numbered year, beginning October 1, 2012. The FDA delayed the start of facility registration renewals until October 22, 2012, while it completed revisions to its on-line registration site and subsequently extended the deadline for completing such registration renewals from December 31, 2012 to January 31, 2013. Other new FDA regulations mandated by the FSMA will require registered facilities to perform hazard analysis and to implement preventive plans to control those hazards identified to be reasonably likely to occur; increase the length of time that records are required to be retained; and regulate the sanitary transportation of food. The FDA published its intent to meet the preventive control provisions required by the FSMA on January 16, 2013 in two proposed rules for manufactured food and produce intended for human consumption: (1) Current Good Manufacturing Practice and Hazard Analysis and Risk-Based Preventive Controls for Human Food and (2) Standards for the Growing, Harvesting, Packing, and Holding of Produce for Human Consumption. Neither of these proposed rules is for animal feed and, as of the date of this filing, the FDA has not published a proposed rule for implementing preventive controls for animal feed. On April 22, 2013, the U.S. District Court, Northern District of California, in the case of
Center for Food Safety et al. v. Margret A. Hamburg, M.D.
, issued a judicial declaration that the FDA had violated the FSMA by failing to promulgate required regulations in accordance with the deadlines mandated by Congress. Subsequently, on June 21, 2013, the Court ordered the FDA to publish all remaining proposed regulations, required under the FSMA, by November 30, 2013 and all final regulations no later than June 30, 2015. The FDA published two of these remaining proposed rules on July 29, 2013: (1) Foreign Supplier Verification Programs for Importers of Food For Humans and Animals and (2) Accreditation of Third-Party Auditors/Certification Bodies to Conduct Food Safety Audits and to Issue Certifications. Management is reviewing these two new proposed regulations, which are intended to strengthen oversight of human and animal foods imported into the U.S., to determine their impact, if any, on the Company's operations. New proposed regulations for animal foods produced in the U.S, required by FSMA, have not been published as of the filing date of this Report. The Company has followed the FSMA throughout its legislative history and has renewed registrations for all of its facilities and implemented hazard prevention controls and other procedures that the Company believes will be needed to comply with the FSMA. Such rule-making could, among other things, require the Company to amend certain of the Company’s other operational policies and procedures. While unforeseen issues and requirements may arise as the FDA promulgates the new regulations provided for by the FSMA, the Company does not anticipate that the costs of compliance with the FSMA will materially impact the Company’s business or operations.
|
|
•
|
Finished product commodity prices,
|
|
•
|
Raw material volume,
|
|
•
|
Production volume and related yield of finished product,
|
|
•
|
Energy prices for natural gas quoted on the NYMEX index and diesel fuel,
|
|
•
|
Collection fees and collection operating expenses, and
|
|
•
|
Factory operating expenses.
|
|
|
Avg. Price
2nd Quarter
2013
|
Avg. Price
2nd Quarter
2012
|
Increase/(Decrease)
|
%
Increase/(Decrease)
|
|
|
Rendering Segment:
|
|
|
|
|
|
|
MBM (Illinois)
|
$ 420.30/ton
|
$ 427.90/ton
|
$ (7.60)/ton
|
(1.8
|
)%
|
|
Feed Grade PM (Carolina)
|
$ 512.96/ton
|
$ 480.39/ton
|
$ 32.57/ton
|
6.8
|
%
|
|
Pet Food PM (Southeast)
|
$ 700.09/ton
|
$ 704.37/ton
|
$ (4.28)/ton
|
(0.6
|
)%
|
|
BFT (Chicago)
|
$ 43.33/cwt
|
$ 47.30/cwt
|
$ (3.97)/cwt
|
(8.4
|
)%
|
|
PG (Southeast)
|
$ 39.16/cwt
|
$ 45.53/cwt
|
$ (6.37)/cwt
|
(14.0
|
)%
|
|
YG (Illinois)
|
$ 37.70/cwt
|
$ 40.19/cwt
|
$ (2.49)/cwt
|
(6.2
|
)%
|
|
Bakery Segment:
|
|
|
|
|
|
|
Corn (Illinois)
|
$ 7.02/bushel
|
$ 6.58/bushel
|
$ 0.44/bushel
|
6.7
|
%
|
|
|
Avg. Price
2nd Quarter
2013
|
Avg. Price
1st Quarter
2013
|
Increase/(Decrease)
|
%
Increase/(Decrease)
|
|
|
Rendering Segment:
|
|
|
|
|
|
|
MBM (Illinois)
|
$ 420.30/ton
|
$ 411.04/ton
|
$ 9.26/ton
|
2.3
|
%
|
|
Feed Grade PM (Carolina)
|
$ 512.96/ton
|
$ 488.50/ton
|
$ 24.46/ton
|
5.0
|
%
|
|
Pet Food PM (Southeast)
|
$ 700.09/ton
|
$ 809.79/ton
|
$ (109.70)/ton
|
(13.5
|
)%
|
|
BFT (Chicago)
|
$ 43.33/cwt
|
$ 40.93/cwt
|
$ 2.40/cwt
|
5.9
|
%
|
|
PG (Southeast)
|
$ 39.16/cwt
|
$ 40.82/cwt
|
$ (1.66)/cwt
|
(4.1
|
)%
|
|
YG (Illinois)
|
$ 37.70/cwt
|
$ 37.04/cwt
|
$ 0.66/cwt
|
1.8
|
%
|
|
Bakery Segment:
|
|
|
|
|
|
|
Corn (Illinois)
|
$ 7.02/bushel
|
$ 7.44/bushel
|
$ (0.42)/bushel
|
(5.6
|
)%
|
|
|
Rendering
|
Bakery
|
Corporate
|
Total
|
||||||||
|
Increase/(decrease) in finished product prices
|
$
|
(23.1
|
)
|
$
|
3.4
|
|
$
|
—
|
|
$
|
(19.7
|
)
|
|
Increase/(decrease) in yield
|
(5.3
|
)
|
0.8
|
|
—
|
|
(4.5
|
)
|
||||
|
Increase in raw material volume
|
4.7
|
|
3.7
|
|
—
|
|
8.4
|
|
||||
|
Increase in other sales
|
2.7
|
|
—
|
|
—
|
|
2.7
|
|
||||
|
|
$
|
(21.0
|
)
|
$
|
7.9
|
|
$
|
—
|
|
$
|
(13.1
|
)
|
|
|
Rendering
|
Bakery
|
Corporate
|
Total
|
||||||||
|
Increase/(decrease) in raw material costs
|
$
|
(22.9
|
)
|
$
|
6.5
|
|
$
|
—
|
|
$
|
(16.4
|
)
|
|
Increase/(decrease) in other costs of sales
|
7.2
|
|
(0.7
|
)
|
(0.3
|
)
|
6.2
|
|
||||
|
Increase in raw material volume
|
2.0
|
|
1.7
|
|
—
|
|
3.7
|
|
||||
|
Increase in energy costs, primarily natural gas and diesel fuel
|
2.0
|
|
0.3
|
|
—
|
|
2.3
|
|
||||
|
|
$
|
(11.7
|
)
|
$
|
7.8
|
|
$
|
(0.3
|
)
|
$
|
(4.2
|
)
|
|
|
Rendering
|
Bakery
|
Corporate
|
Total
|
||||||||
|
Increase/(decrease) in payroll and incentive-related benefits
|
$
|
1.6
|
|
$
|
0.2
|
|
$
|
(0.7
|
)
|
$
|
1.1
|
|
|
Increase/(decrease) in other expense
|
0.3
|
|
(0.2
|
)
|
2.7
|
|
2.8
|
|
||||
|
|
$
|
1.9
|
|
$
|
—
|
|
$
|
2.0
|
|
$
|
3.9
|
|
|
•
|
Finished product commodity prices,
|
|
•
|
Raw material volume,
|
|
•
|
Production volume and related yield of finished product,
|
|
•
|
Energy prices for natural gas quoted on the NYMEX index and diesel fuel,
|
|
•
|
Collection fees and collection operating expenses, and
|
|
•
|
Factory operating expenses.
|
|
|
Avg. Price
First Six Months
2013
|
Avg. Price
First Six Months
2012
|
Increase/(Decrease)
|
%
Increase/(Decrease)
|
|
|
Rendering Segment:
|
|
|
|
|
|
|
MBM (Illinois)
|
$ 415.67/ton
|
$ 371.73/ton
|
$ 43.94/ton
|
11.8
|
%
|
|
Feed Grade PM (Carolina)
|
$ 500.73/ton
|
$ 433.45/ton
|
$ 67.28/ton
|
15.5
|
%
|
|
Pet Food PM (Southeast)
|
$ 754.94/ton
|
$ 681.65/ton
|
$ 73.29/ton
|
10.8
|
%
|
|
BFT (Chicago)
|
$ 42.13/cwt
|
$ 46.68/cwt
|
$ (4.55)/cwt
|
(9.7
|
)%
|
|
PG (Southeast)
|
$ 39.99/cwt
|
$ 44.78/cwt
|
$ (4.79)/cwt
|
(10.7
|
)%
|
|
YG (Illinois)
|
$ 37.37/cwt
|
$ 39.51/cwt
|
$ (2.14)/cwt
|
(5.4
|
)%
|
|
Bakery Segment:
|
|
|
|
|
|
|
Corn (Illinois)
|
$ 7.23/bushel
|
$ 6.60/bushel
|
$ 0.63/bushel
|
9.5
|
%
|
|
|
Rendering
|
Bakery
|
Corporate
|
Total
|
||||||||
|
Increase in finished product prices
|
$
|
14.9
|
|
$
|
13.6
|
|
$
|
—
|
|
$
|
28.5
|
|
|
Increase in raw material volume
|
12.1
|
|
6.4
|
|
—
|
|
18.5
|
|
||||
|
Increase in other sales
|
5.7
|
|
—
|
|
—
|
|
5.7
|
|
||||
|
Increase/(decrease) in yield
|
(8.8
|
)
|
1.3
|
|
—
|
|
(7.5
|
)
|
||||
|
|
$
|
23.9
|
|
$
|
21.3
|
|
$
|
—
|
|
$
|
45.2
|
|
|
|
Rendering
|
Bakery
|
Corporate
|
Total
|
||||||||
|
Increase in raw material costs
|
$
|
3.7
|
|
$
|
15.3
|
|
$
|
—
|
|
$
|
19.0
|
|
|
Increase in raw material volume
|
4.6
|
|
3.0
|
|
—
|
|
7.6
|
|
||||
|
Increase in energy costs, primarily natural gas and diesel fuel
|
3.1
|
|
0.5
|
|
0.1
|
|
3.7
|
|
||||
|
Increase/(decrease) in other costs of sales
|
13.3
|
|
(1.1
|
)
|
(0.5
|
)
|
11.7
|
|
||||
|
|
$
|
24.7
|
|
$
|
17.7
|
|
$
|
(0.4
|
)
|
$
|
42.0
|
|
|
|
Rendering
|
Bakery
|
Corporate
|
Total
|
||||||||
|
Increase in payroll and incentive-related benefits
|
$
|
2.9
|
|
$
|
0.4
|
|
$
|
1.3
|
|
$
|
4.6
|
|
|
Increase/(decrease) in other expense
|
0.2
|
|
(0.1
|
)
|
4.1
|
|
4.2
|
|
||||
|
|
$
|
3.1
|
|
$
|
0.3
|
|
$
|
5.4
|
|
$
|
8.8
|
|
|
•
|
As of
June 29, 2013
, the Company had availability of $
382.2 million
under the revolving loan facility, taking into account
no
outstanding borrowings and letters of credit issued of $
32.8 million
.
|
|
•
|
As of
June 29, 2013
, the Company had repaid all of the original $
300.0 million
term loan facility issued under the credit agreement. The amounts that have been repaid on the term loan may not be reborrowed.
|
|
•
|
The obligations under the Company's credit agreement are guaranteed by Darling National, Griffin, and its subsidiary, Craig Protein Division, Inc. and are secured by substantially all of the property of the Company.
|
|
•
|
The Notes are guaranteed on an unsecured basis by Darling's existing restricted subsidiaries, including Darling National, Griffin and all of its subsidiaries, other than Darling's foreign subsidiaries, its captive insurance subsidiary and any inactive subsidiary with nominal assets. The Notes rank equally in right of payment to any existing and future senior debt of Darling. The Notes will be effectively junior to existing and future secured debt of Darling and the guarantors, including debt under the Credit Agreement, to the extent of the value of assets securing such debt. The Notes will be structurally subordinated to all of the existing and future liabilities (including trade payables) of each of the subsidiaries of Darling that do not guarantee the Notes. The guarantees by the guarantors (the “Guarantees”) rank equally in right of payment to any existing and future senior indebtedness of the guarantors. The Guarantees will be effectively junior to existing and future secured debt of the guarantors including debt under the Credit Agreement, to the extent of the value of the assets securing such debt. The Guarantees will be structurally subordinated to all of the existing and future liabilities (including trade payables) of each of the subsidiaries of each Guarantor that do not guarantee the Notes.
|
|
Senior Notes:
|
|
||
|
8.5% Senior Notes Due 2018
|
$
|
250,000
|
|
|
|
|
||
|
Senior Secured Credit Facilities:
|
|
||
|
Term Loan
|
$
|
—
|
|
|
Revolving Credit Facility:
|
|
||
|
Maximum availability
|
$
|
415,000
|
|
|
Borrowings outstanding
|
—
|
|
|
|
Letters of credit issued
|
32,817
|
|
|
|
Availability
|
$
|
382,183
|
|
|
|
31.1
|
Certification pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, of Randall C. Stuewe, the Chief Executive Officer of the Company.
|
||
|
|
31.2
|
Certification pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, of Colin Stevenson, the Chief Financial Officer of the Company.
|
||
|
|
32
|
Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, of Randall C. Stuewe, the Chief Executive Officer of the Company, and of Colin Stevenson, the Chief Financial Officer of the Company.
|
||
|
|
101
|
Interactive Data Files Pursuant to Rule 405 of Regulation S-T: (i) Consolidated Balance Sheets as of June 29, 2013 and December 29, 2012; (ii) Consolidated Statements of Operations for the three and six months ended June 29, 2013 and June 30, 2012; (iii) Consolidated Statements of Comprehensive Income for the three and six months ended June 29, 2013 and June 30, 2012; (iv) Consolidated Statements of Cash Flows for the six months ended June 29, 2013 and June 30, 2012; (v) Notes to the Consolidated Financial Statements.
|
||
|
|
|
DARLING INTERNATIONAL INC.
|
|
|
|
|
|
|
|
|
|
|
|
|
Date:
|
August 8, 2013
|
By:
|
/s/ Randall C. Stuewe
|
|
|
|
|
Randall C. Stuewe
|
|
|
|
|
Chairman and
|
|
|
|
|
Chief Executive Officer
|
|
Date:
|
August 8, 2013
|
By:
|
/s/ Colin Stevenson
|
|
|
|
|
Colin Stevenson
|
|
|
|
|
Executive Vice President
|
|
|
|
|
Chief Financial Officer
|
|
|
|
|
(Principal Financial Officer)
|
No information found
* THE VALUE IS THE MARKET VALUE AS OF THE LAST DAY OF THE QUARTER FOR WHICH THE 13F WAS FILED.
| FUND | NUMBER OF SHARES | VALUE ($) | PUT OR CALL |
|---|
| DIRECTORS | AGE | BIO | OTHER DIRECTOR MEMBERSHIPS |
|---|
No information found
Customers
| Customer name | Ticker |
|---|---|
| Abbott Laboratories | ABT |
No Suppliers Found
Price
Yield
| Owner | Position | Direct Shares | Indirect Shares |
|---|