**SECURITIES AND EXCHANGE COMMISSION**

**Washington, D.C.  20549**

 

**FORM 10-Q**

 

**(MarkOne)**
| **ý**                                                                                                                                                                     |   | **QUARTERLY  REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF  1934**  |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------------------------------------------------------------------------------------|
|                                                                                                                                                                           |
| **For  the quarterly period ended November 29, 2003**                                                                                                                          |
|                                                                                                                                                                           |
| **OR**                                                                                                                                                                         |
|                                                                                                                                                                           |   |                                                                                            |
| **o**                                                                                                                                                                          |   | **TRANSITION  REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF  1934** |
|                                                                                                                                                                           |
| **For  the transition period from              to             ** |

** **

**CommissionFile Number****1-6699**

** **

**INTERNATIONALMULTIFOODS CORPORATION**

(Exact name ofregistrant as specified in its charter)

 

| **Delaware**                                                                        |   | **41-0871880**                        |
|-------------------------------------------------------------------------------------|--------|---------------------------------------|
| (State or other  jurisdiction of incorporation or organization)                     |   | (I.R.S. Employer  Identification No.) |
|                                                                                |   |                                  |
| **110 Cheshire Lane, Suite 300,  Minnetonka, Minnesota**                            |   | **55305-1060**                        |
| (Address of  principal executive offices)                                           |   | (Zip Code)                            |
|                                                                                |   |                                  |
| **(952) 594-3300**                                                                  |
| (Registrant’s  telephone number, including area code)                          |
|                                                                                |   |                                  |
| **(not applicable)**                                                                |
| (Former name,  former address and former fiscal year, if changed since last report) |

 

Indicate by checkmark whether the registrant (1) has filed all reports required to be filed bySection 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding12 months (or for such shorter period that the registrant was required to filesuch reports), and (2) has been subject to such filing requirements for the past90 days.

Yes   ý     No  o

 

Indicate by checkmark whether the registrant is an accelerated filer (as defined in Rule 12b-2of the Exchange Act).

Yes   ý     No  o

 

The number of sharesoutstanding of the registrant’s Common Stock, par value $.10 per share, as ofDecember 27, 2003 was 19,316,170.

 

 

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**PART I. FINANCIAL INFORMATION**

 

INTERNATIONALMULTIFOODS CORPORATION AND SUBSIDIARIES

 

ConsolidatedCondensed Statements of Operations(unaudited)(in thousands,except per share amounts)

 
|                                                                        |   | **THREE  MONTHS ENDED** |    | **NINE  MONTHS ENDED** |   |
|-----------------------------------------------------------------------------|--------|-------------------------|---------|------------------------|--------|
|                                                                        |   | **Nov. 29,  2003**      |    | **Nov. 30,  2002**     |   | **Nov. 29,  2003** |   | **Nov. 30,  2002** |   |
| Net sales                                                                   |   | $                       | 273,693 |                   | $      | 301,218 |   | $ | 696,029 |   | $ | 721,700 |   |
| Cost  of goods sold                                                         |   | (215,871                | )       | (236,037               | )      | (564,390 | ) | (573,027 | ) |
| Gross profit                                                                |   | 57,822                  |    | 65,181                 |   | 131,639 |   | 148,673 |   |
| Selling,  general and administrative                                        |   | (30,493                 | )       | (33,777                | )      | (84,259 | ) | (92,152 | ) |
| Unusual  items                                                              |   | (1,078                  | )       | —                 |   | (5,482 | ) | — |   |
| Operating earnings                                                          |   | 26,251                  |    | 31,404                 |   | 41,898 |   | 56,521 |   |
| Interest,  net                                                              |   | (5,272                  | )       | (6,081                 | )      | (17,635 | ) | (18,845 | ) |
| Other  income (expense), net                                                |   | —                  |    | (4,671                 | )      | (3,032 | ) | (4,671 | ) |
| Earnings from continuing operations before income  taxes                    |   | 20,979                  |    | 20,652                 |   | 21,231 |   | 33,005 |   |
| Income  taxes                                                               |   | (6,746                  | )       | (7,898                 | )      | (6,414 | ) | (12,592 | ) |
| Earnings  from continuing operations                                        |   | 14,233                  |    | 12,754                 |   | 14,817 |   | 20,413 |   |
| Discontinued  operations:                                                   |   |                    |    |                   |   |   |   |   |   |
| Operating  loss, after tax                                                  |   | —                  |    | (2,155                 | )      | — |   | (7,025 | ) |
| Cumulative  effect of change in accounting principle, net of tax of $23,781 |   | —                  |    | —                 |   | — |   | (41,342 | ) |
| Net loss on disposition, net of tax of $14,362                              |   | —                  |    | —                 |   | — |   | (25,922 | ) |
| Loss from  discontinued operations                                          |   | —                  |    | (2,155                 | )      | — |   | (74,289 | ) |
| Net  earnings (loss)                                                        |   | $                       | 14,233  |                   | $      | 10,599 |   | $ | 14,817 |   | $ | (53,876 | ) |
|                                                                        |   |                    |    |                   |   |   |   |   |   |
| Basic  earnings (loss) per share:                                           |   |                    |    |                   |   |   |   |   |   |
| Continuing operations                                                       |   | $                       | 0.74    |                   | $      | 0.67 |   | $ | 0.77 |   | $ | 1.07 |   |
| Discontinued  operations                                                    |   | —                  |    | (0.12                  | )      | — |   | (3.89 | ) |
| Total                                                                       |   | $                       | 0.74    |                   | $      | 0.55 |   | $ | 0.77 |   | $ | (2.82 | ) |
|                                                                        |   |                    |    |                   |   |   |   |   |   |
| Diluted  earnings (loss) per share:                                         |   |                    |    |                   |   |   |   |   |   |
| Continuing operations                                                       |   | $                       | 0.73    |                   | $      | 0.66 |   | $ | 0.76 |   | $ | 1.05 |   |
| Discontinued  operations                                                    |   | —                  |    | (0.11                  | )      | — |   | (3.83 | ) |
| Total                                                                       |   | $                       | 0.73    |                   | $      | 0.55 |   | $ | 0.76 |   | $ | (2.78 | ) |
|                                                                        |   |                    |    |                   |   |   |   |   |   |
| Average  shares of common stock outstanding:                                |   |                    |    |                   |   |   |   |   |   |
| Basic                                                                       |   | 19,306                  |    | 19,131                 |   | 19,251 |   | 19,085 |   |
| Diluted                                                                     |   | 19,606                  |    | 19,327                 |   | 19,525 |   | 19,413 |   |

 

See accompanying notes toconsolidated condensed financial statements.

 

2

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INTERNATIONALMULTIFOODS CORPORATION AND SUBSIDIARIES

 

ConsolidatedCondensed Balance Sheets(in thousands)

 
|                                             |   | **(Unaudited)  Nov. 29,  2003** |    | **Condensed  from audited  financial  statements  March 1,  2003** |   |
|--------------------------------------------------|--------|---------------------------------|---------|--------------------------------------------------------------------|--------|
| **Assets**                                       |   |                            |    |                                                               |   |
| Current  assets:                                 |   |                            |    |                                                               |   |
| Cash  and cash equivalents                       |   | $                               | 2,118   |                                                               | $      | 1,203 |   |
| Trade  accounts receivable, net                  |   | 87,117                          |    | 43,909                                                             |   |
| Inventories                                      |   | 140,023                         |    | 124,659                                                            |   |
| Other current assets                             |   | 31,800                          |    | 46,242                                                             |   |
| Total current assets                             |   | 261,058                         |    | 216,013                                                            |   |
| Property,  plant and equipment, net              |   | 248,025                         |    | 235,118                                                            |   |
| Goodwill,  net                                   |   | 64,323                          |    | 63,358                                                             |   |
| Other  intangible assets, net                    |   | 135,299                         |    | 135,986                                                            |   |
| Other  assets                                    |   | 113,649                         |    | 115,789                                                            |   |
| Total  assets                                    |   | $                               | 822,354 |                                                               | $      | 766,264 |   |
|                                             |   |                            |    |                                                               |   |
| **Liabilities  and Shareholders’ Equity**   |   |                            |    |                                                               |   |
| Current  liabilities:                            |   |                            |    |                                                               |   |
| Notes  payable                                   |   | $                               | 98,615  |                                                               | $      | 15,110 |   |
| Current  portion of long-term debt               |   | 10,375                          |    | 1,313                                                              |   |
| Accounts  payable                                |   | 76,364                          |    | 70,097                                                             |   |
| Other  current liabilities                       |   | 38,284                          |    | 60,499                                                             |   |
| Total current liabilities                        |   | 223,638                         |    | 147,019                                                            |   |
| Long-term  debt                                  |   | 267,540                         |    | 328,030                                                            |   |
| Employee  benefits and other liabilities         |   | 60,410                          |    | 55,246                                                             |   |
| Total  liabilities                               |   | 551,588                         |    | 530,295                                                            |   |
|                                             |   |                            |    |                                                               |   |
| Shareholders’  equity:                      |   |                            |    |                                                               |   |
| Common  stock                                    |   | 2,184                           |    | 2,184                                                              |   |
| Accumulated  other comprehensive income (loss)   |   | 6,138                           |    | (10,181                                                            | )      |
| Other  shareholders’ equity                 |   | 262,444                         |    | 243,966                                                            |   |
| Total  shareholders’ equity                 |   | 270,766                         |    | 235,969                                                            |   |
|                                             |   |                            |    |                                                               |   |
| Commitments  and contingencies                   |   |                            |    |                                                               |   |
|                                             |   |                            |    |                                                               |   |
| Total  liabilities and shareholders’ equity |   | $                               | 822,354 |                                                               | $      | 766,264 |   |

 

See accompanying notes toconsolidated condensed financial statements.

 

3

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INTERNATIONALMULTIFOODS CORPORATION AND SUBSIDIARIES

 

ConsolidatedCondensed Statements of Cash Flows(unaudited)(in thousands)

 
|                                                                                                      |   | **NINE  MONTHS ENDED** |   |
|-----------------------------------------------------------------------------------------------------------|--------|------------------------|--------|
|                                                                                                      |   | **Nov. 29,  2003**     |   | **Nov. 30,  2002** |   |
| Cash  flows from operations:                                                                              |   |                   |   |   |   |
| Earnings  from continuing operations                                                                      |   | $                      | 14,817 |   | $ | 20,413 |   |
| Adjustments  to reconcile earnings from continuing operations to cash provided by  continuing operations: |   |                   |   |   |   |
| Depreciation and amortization                                                                             |   | 16,263                 |   | 10,647 |   |
| Deferred income tax expense                                                                               |   | 5,779                  |   | 9,944 |   |
| Increase  in prepaid pension assets                                                                       |   | (2,518                 | )      | (8,731 | ) |
| Loss  on early repayment of debt                                                                          |   | 4,453                  |   | 4,671 |   |
| Provision  for losses on receivables                                                                      |   | 2,025                  |   | 863 |   |
| Changes  in working capital:                                                                              |   |                   |   |   |   |
| Accounts receivable                                                                                       |   | (40,850                | )      | (7,865 | ) |
| Inventories                                                                                               |   | (6,727                 | )      | (17,633 | ) |
| Other  current assets                                                                                     |   | 15,521                 |   | (16,393 | ) |
| Accounts  payable                                                                                         |   | 15,806                 |   | 9,565 |   |
| Other  current liabilities                                                                                |   | (23,453                | )      | 7,503 |   |
| Other,  net                                                                                               |   | (268                   | )      | 6,441 |   |
| Cash provided by continuing operations                                                                    |   | 848                    |   | 19,425 |   |
| Cash  provided by discontinued operations                                                                 |   | —                 |   | 4,591 |   |
| Cash  provided by operations                                                                              |   | 848                    |   | 24,016 |   |
| Cash flows from  investing activities:                                                                    |   |                   |   |   |   |
| Proceeds  from disposition of business                                                                    |   | —                 |   | 165,774 |   |
| Capital  expenditures                                                                                     |   | (28,084                | )      | (19,257 | ) |
| Proceeds from property disposals                                                                          |   | 2,525                  |   | 93 |   |
| Discontinued operations                                                                                   |   | —                 |   | (1,577 | ) |
| Cash  provided by (used for) investing activities                                                         |   | (25,559                | )      | 145,033 |   |
| Cash  flows from financing activities:                                                                    |   |                   |   |   |   |
| Net  increase in notes payable                                                                            |   | 80,113                 |   | 15,244 |   |
| Additions  to long-term debt                                                                              |   | 75,000                 |   | — |   |
| Reductions  in long-term debt                                                                             |   | (129,017               | )      | (209,967 | ) |
| Proceeds  from issuance of common stock                                                                   |   | 1,411                  |   | 1,108 |   |
| Other,  net                                                                                               |   | (1,935                 | )      | (240 | ) |
| Cash provided by (used for) financing activities                                                          |   | 25,572                 |   | (193,855 | ) |
| Decrease in cash from discontinued operations                                                             |   | —                 |   | 14 |   |
| Effect  of exchange rate changes on cash and cash equivalents                                             |   | 54                     |   | 168 |   |
| Net increase (decrease) in cash and cash equivalents                                                      |   | 915                    |   | (24,624 | ) |
| Cash  and cash equivalents at beginning of period                                                         |   | 1,203                  |   | 26,459 |   |
| Cash  and cash equivalents at end of period                                                               |   | $                      | 2,118  |   | $ | 1,835 |   |

 

See accompanying notes toconsolidated condensed financial statements.

 

4

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INTERNATIONALMULTIFOODS CORPORATION AND SUBSIDIARIES

Notes toConsolidated Condensed Financial Statements

(unaudited)

 

**(1)   **In our opinion, theaccompanying unaudited consolidated condensed financial statements contain alladjustments (consisting of only normal recurring adjustments, except as notedelsewhere in the notes to the consolidated condensed financial statements)necessary to present fairly our financial position as of Nov. 29, 2003, and theresults of our operations and cash flows for the interim periodspresented.  These statements arecondensed and, therefore, do not include all of the information and footnotesrequired by generally accepted accounting principles for complete financialstatements.  The statements should beread in conjunction with the consolidated financial statements and footnotesincluded in our Annual Report on Form 10-K for the year ended March 1,2003.  The results of operations for thethree and nine months ended Nov. 29, 2003, are not necessarily indicative ofthe results to be expected for the full year.

 

**(2)   Stock-Based compensation**

 

Our stock-based planspermit awards of restricted stock, restricted stock units, stock options andstock appreciation rights to directors and key employees subject to theprovisions of the plans and as determined by the Compensation and HumanResources Committee of the Board of Directors. See Note 15 to the consolidated financial statements of our 2003 AnnualReport for further information.

 

We have elected to use the intrinsic value method ofaccounting as prescribed by Accounting Principles Board Opinion No. 25,“Accounting for Stock Issued to Employees.” Under theintrinsic value method, compensation expense is recorded only to the extentthat the market price of the common stock exceeds the exercise price of thestock option on the date of grant.

 

The followingprovides pro forma effect on earnings and earnings per share if we had appliedthe fair value recognition provisions prescribed by SFAS No. 123, “Accounting for Stock-Based Compensation,”to stock-based employee compensation.

 
|                                                                                                          |   | **Three  Months Ended** |   | **Nine  Months Ended** |   |
|---------------------------------------------------------------------------------------------------------------|--------|-------------------------|--------|------------------------|--------|
| **(in thousands,  except per share amounts)**                                                                 |   | **Nov. 29,  2003**      |   | **Nov. 30,  2002**     |   | **Nov. 29,  2003** |   | **Nov. 30,  2002** |   |
| Net earnings (loss) as reported                                                                               |   | $                       | 14,233 |                   | $      | 10,599 |   | $ | 14,817 |   | $ | (53,876 | ) |
| Deduct: Total stock-based employee compensation  expense determined under fair value based method, net of tax |   | (569                    | )      | (600                   | )      | (1,506 | ) | (1,721 | ) |
| Pro  forma net earnings (loss)                                                                                |   | $                       | 13,664 |                   | $      | 9,999 |   | $ | 13,311 |   | $ | (55,597 | ) |
|                                                                                                          |   |                    |   |                   |   |   |   |   |   |
| Basic earnings (loss)  per share:                                                                             |   |                    |   |                   |   |   |   |   |   |
| As  reported                                                                                                  |   | $                       | 0.74   |                   | $      | 0.55 |   | $ | 0.77 |   | $ | (2.82 | ) |
| Pro  forma                                                                                                    |   | 0.71                    |   | 0.52                   |   | 0.69 |   | (2.91 | ) |
|                                                                                                          |   |                    |   |                   |   |   |   |   |   |
| Diluted  earnings (loss) per share:                                                                           |   |                    |   |                   |   |   |   |   |   |
| As  reported                                                                                                  |   | $                       | 0.73   |                   | $      | 0.55 |   | $ | 0.76 |   | $ | (2.78 | ) |
| Pro  forma                                                                                                    |   | 0.70                    |   | 0.52                   |   | 0.68 |   | (2.86 | ) |

 

5

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**(3)   Comprehensive income (loss)**– The components of totalcomprehensive income (loss) were as follows:

 
|                                                        |   | **Three  Months Ended** |   | **Nine Months  Ended** |   |
|-------------------------------------------------------------|--------|-------------------------|--------|------------------------|--------|
| **(in thousands)**                                          |   | **Nov. 29,  2003**      |   | **Nov. 30,  2002**     |   | **Nov. 29,  2003** |   | **Nov. 30,  2002** |   |
| Net earnings (loss)                                         |   | $                       | 14,233 |                   | $      | 10,599 |   | $ | 14,817 |   | $ | (53,876 | ) |
| Foreign currency translation adjustment                     |   | 8,526                   |   | (704                   | )      | 16,180 |   | 1,717 |   |
| Net unrealized gain (loss) on cash flow hedges              |   | (59                     | )      | (508                   | )      | 159 |   | (1,945 | ) |
| Reclassification adjustment for amounts in earnings  (loss) |   | (13                     | )      | 177                    |   | (111 | ) | 363 |   |
| Minimum pension liability adjustment                        |   | (21                     | )      | —                 |   | 91 |   | — |   |
| Comprehensive  income (loss)                                |   | $                       | 22,666 |                   | $      | 9,564 |   | $ | 31,136 |   | $ | (53,741 | ) |

 

**(4)   Goodwilland other intangible assets**

 

The changes in thecarrying amount of goodwill by segment for the nine months ended Nov. 29, 2003are as follows:

 
| **(in thousands)**            |   | **U.S.  Consumer  Products** |   | **Foodservice  Products** |   | **Canadian  Foods** |   | **Total** |   |
|-------------------------------|--------|------------------------------|--------|---------------------------|--------|---------------------|--------|-----------|--------|
| Balance  as of March 2, 2003  |   | $                            | 43,891 |                      | $      | 12,972              |   | $         | 6,495  |   | $ | 63,358 |   |
| Foreign  currency translation |   | —                       |   | —                    |   | 965                 |   | 965       |   |
| Balance  as of Nov. 29, 2003  |   | $                            | 43,891 |                      | $      | 12,972              |   | $         | 7,460  |   | $ | 64,323 |   |

 

Other intangible assetsare as follows:

 
|                          |   | **Nov. 29, 2003**           |    | **March 1,  2003**            |   |
|-------------------------------|--------|-----------------------------|---------|-------------------------------|--------|
| **(in thousands)**            |   | **Gross  Carrying  Amount** |    | **Accumulated  Amortization** |   | **Net** |   | **Gross  Carrying  Amount** |   | **Accumulated  Amortization** |   | **Net** |   |
| Amortized  intangible assets  |   |                        |    |                          |   |   |   |   |   |   |   |   |   |
| Trademarks                    |   | $                           | 9,090   |                          | $      | 2,513 |   | $ | 6,577 |   | $ | 9,090 |   | $ | 2,033 |   | $ | 7,057 |   |
| Customer  lists               |   | 5,800                       |    | 4,489                         |   | 1,311 |   | 5,800 |   | 4,278 |   | 1,522 |   |
| Other                         |   | 2,048                       |    | 1,998                         |   | 50 |   | 2,053 |   | 1,956 |   | 97 |   |
| Total                         |   | $                           | 16,938  |                          | $      | 9,000 |   | $ | 7,938 |   | $ | 16,943 |   | $ | 8,267 |   | $ | 8,676 |   |
|                          |   |                        |    |                          |   |   |   |   |   |   |   |   |   |
| Unamortized intangible assets |   |                        |    |                          |   |   |   |   |   |   |   |   |   |
| Trademarks                    |   | $                           | 127,353 |                          | $      | — |   | $ | 127,353 |   | $ | 127,302 |   | $ | — |   | $ | 127,302 |   |
| Other                         |   | 8                           |    | —                        |   | 8 |   | 8 |   | — |   | 8 |   |
| Total                         |   | $                           | 127,361 |                          | $      | — |   | $ | 127,361 |   | $ | 127,310 |   | $ | — |   | $ | 127,310 |   |

 

Amortization expenserelated to amortizable intangibles assets for the nine months ended Nov. 29,2003 and Nov. 30, 2002 was $0.7 million. The estimated amortization expense for fiscal 2004 to fiscal 2008 isexpected to approximate $1 million each year.

 

6

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**(5)   Unusual items** – In the third quarter of fiscal 2004,we incurred $1.1 million of severance charges relating to the departures of thePresident and Chief Operating Officer of the Company and the President of theFoodservice Products business.

 

In the second quarter offiscal 2004, we sold production equipment and other assets at our plant inSimcoe, Ontario for approximately $1.9 million in cash.  We recorded a $0.4 million pre-tax gain fromthe sale transaction.  We sold theassets as a result of our decision to exit the foodservice pie product line,which generated annual sales of approximately $10 million.  In connection with our decision to exit theproduct line, we also decided to close the Simcoe plant and recorded a pre-taxcharge of $1.3 million for severance costs. The plant employed approximately 135 people.  We expect to record additional exit costs of up to $0.4 millionover the remainder of the year in connection with the plant closing.

 

In the first quarter offiscal 2004, we recognized unusual charges of $3.5 million associated withactions taken to reduce the cost structure and improve the financialperformance of our Canadian Foods business and our Foodservice Productsbusiness in the United States.  Unusualitems in the first quarter included a $2.5 million charge for severance costsassociated with reorganizing our Canadian Foods business.  Also included in unusual items was a $1.0million charge primarily for severance costs associated with reducing thenumber of production employees at our plant in Sedalia, Missouri and closingtwo small facilities in the eastern United States.

 

Theliability balance associated with the unusual charges described above was $2.7million as of Nov. 29, 2003, and is comprised of future severance payments thatwe expect to pay over the next 12 months. Cash payments related to these unusual charges were $3.1 million for thenine months ended Nov. 29, 2003.

 

**(6)   Interest, net**

 
|                                                   |   | **Three  Months Ended** |   | **Nine  Months Ended** |   |
|--------------------------------------------------------|--------|-------------------------|--------|------------------------|--------|
| **(in thousands)**                                     |   | **Nov. 29,  2003**      |   | **Nov. 30,  2002**     |   | **Nov. 29,  2003** |   | **Nov. 30,  2002** |   |
| Interest expense                                       |   | $                       | 5,400  |                   | $      | 6,630 |   | $ | 17,953 |   | $ | 24,709 |   |
| Capitalized interest                                   |   | (80                     | )      | (177                   | )      | (216 | ) | (367 | ) |
| Interest  income                                       |   | (48                     | )      | (203                   | )      | (102 | ) | (323 | ) |
|                                                   |   | 5,272                   |   | 6,250                  |   | 17,635 |   | 24,019 |   |
| Interest  expense allocated to discontinued operations |   | —                  |   | (169                   | )      | — |   | (5,174 | ) |
| Interest,  net                                         |   | $                       | 5,272  |                   | $      | 6,081 |   | $ | 17,635 |   | $ | 18,845 |   |

 

Cash payments for interest, net of amountscapitalized, were $19.6****millionand $22.8 million for the nine months ended Nov. 29, 2003, and Nov. 30, 2002,respectively.

 

**(7)   Other income (expense), net –**During the second quarter of fiscal2004, we recognized a non-cash write off of unamortized financing costs of $4.4million as a result of replacing our senior secured credit facility.  See Note 10 for additional information.

 

Inthe first quarter of fiscal 2004, we realized a $1.4 million foreign exchangegain on U.S. dollar-denominated debt that was held by our Canadian business.

 

**(8)   Income taxes** – Cashrefunds for income taxes were $2.5 million for the nine months ended Nov. 29,2003.  Cash payments for income taxeswas $4.1 million for the nine months ended Nov. 30, 2002.

 

7

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**(9)**   **Supplemental balance sheet information**

 
| **(in thousands)**                                  |   | **Nov. 29,  2003** |    | **March 1,  2003** |   |
|-----------------------------------------------------|--------|--------------------|---------|--------------------|--------|
| Trade  accounts receivable, net:                    |   |               |    |               |   |
| Trade                                               |   | $                  | 89,504  |               | $      | 44,276 |   |
| Allowance  for doubtful accounts                    |   | (2,387             | )       | (367               | )      |
| Total  trade accounts receivable, net               |   | $                  | 87,117  |               | $      | 43,909 |   |
|                                                |   |               |    |               |   |
| Inventories:                                        |   |               |    |               |   |
| Raw  materials, excluding grain                     |   | $                  | 19,810  |               | $      | 12,675 |   |
| Grain                                               |   | 5,634              |    | 6,282              |   |
| Finished  and in-process goods                      |   | 105,262            |    | 99,269             |   |
| Packages  and supplies                              |   | 9,317              |    | 6,433              |   |
| Total  inventories                                  |   | $                  | 140,023 |               | $      | 124,659 |   |
|                                                |   |               |    |               |   |
| Property,  plant and equipment, net:                |   |               |    |               |   |
| Land                                                |   | $                  | 3,583   |               | $      | 3,313 |   |
| Buildings  and improvements                         |   | 75,944             |    | 69,309             |   |
| Machinery  and equipment                            |   | 294,858            |    | 235,570            |   |
| Improvements  in progress                           |   | 17,460             |    | 44,889             |   |
|                                                |   | 391,845            |    | 353,081            |   |
| Accumulated  depreciation                           |   | (143,820           | )       | (117,963           | )      |
| Total  property, plant and equipment, net           |   | $                  | 248,025 |               | $      | 235,118 |   |
|                                                |   |               |    |               |   |
| Accumulated  other comprehensive income (loss):     |   |               |    |               |   |
| Foreign currency translation adjustment             |   | $                  | 4,958   |               | $      | (11,222 | ) |
| Minimum pension liability adjustment                |   | (2,987             | )       | (3,078             | )      |
| Derivative  hedge accounting adjustment             |   | 4,167              |    | 4,119              |   |
| Total accumulated other comprehensive income (loss) |   | $                  | 6,138   |               | $      | (10,181 | ) |

 

**(10)   Notes payable and long-term debt**-In August 2003, we entered into a new five year, $250 million senior securedcredit agreement in order to refinance some of our debt under more favorableterms.  The new financing replaced theremaining balance on our $450 million senior secured credit facility that wasobtained in connection with our November 2001 acquisition of the Pillsburydesserts and specialty products from General Mills.

 

The new $250 millionsenior secured credit agreement is comprised of a $175 million revolving creditfacility and $75 million of amortizing term loans.  The interest rates on borrowings under the new credit agreementare variable and based on current market interest rates plus a spread based onour leverage.  The current spread onLIBOR based loans is 2.25%.  The creditagreement also contains covenants that require the maintenance of leverage andfixed charge coverage ratios and limit revolver borrowings based on assetlevels.  Borrowings under the agreementmay be used for general corporate purposes. The agreement is secured by our assets.

 

InSeptember 2003, we entered into three interest rate swap agreements for anaggregate notional amount of $75 million that expire on Nov. 13, 2009.  Under the terms of the swap agreements, wewill receive a fixed interest rate of 6.602% and pay a floating interest ratebased on three-month LIBOR plus a predetermined spread that will average2.465%.  We will account for these swapagreements as fair value hedges on $75 million of our unsecured notes thatmature on Nov. 13, 2009 and have an interest rate of 6.602%.  We entered into the swap agreements in orderto achieve a targeted proportion of variable versus fixed rate debt.

 

8

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**(11)  Segment information**

 

We manage the companythrough three operating segments: U.S. Consumer Products,  Foodservice Products and CanadianFoods.  Our organizational structure isthe basis for reporting business results to management and the segment datapresented in this Note.

 
| **(in  millions)**               |   | **Net  Sales** |   | **Operating  Costs** |   | **Unusual  Items** |   | **Operating  Earnings** |   |
|----------------------------------|--------|----------------|--------|----------------------|--------|--------------------|--------|-------------------------|--------|
| Three Months Ended Nov. 29, 2003 |   |           |   |                 |   |               |   |                    |   |
| U.S. Consumer Products           |   | $              | 133.2  |                 | $      | (109.3             | )      | $                       | — |   | $ | 23.9 |   |
| Foodservice Products             |   | 53.4           |   | (52.8                | )      | (0.3               | )      | 0.3                     |   |
| Canadian Foods                   |   | 87.1           |   | (80.7                | )      | —             |   | 6.4                     |   |
| Corporate                        |   | —         |   | (3.6                 | )      | (0.8               | )      | (4.4                    | )      |
| Total                            |   | $              | 273.7  |                 | $      | (246.4             | )      | $                       | (1.1   | ) | $ | 26.2 |   |
|                             |   |           |   |                 |   |               |   |                    |   |
| Three Months Ended Nov. 30, 2002 |   |           |   |                 |   |               |   |                    |   |
| U.S. Consumer Products           |   | $              | 151.8  |                 | $      | (128.5             | )      | $                       | — |   | $ | 23.3 |   |
| Foodservice Products             |   | 59.4           |   | (57.8                | )      | —             |   | 1.6                     |   |
| Canadian Foods                   |   | 90.0           |   | (81.1                | )      | —             |   | 8.9                     |   |
| Corporate                        |   | —         |   | (2.4                 | )      | —             |   | (2.4                    | )      |
| Total                            |   | $              | 301.2  |                 | $      | (269.8             | )      | $                       | — |   | $ | 31.4 |   |
|                             |   |           |   |                 |   |               |   |                    |   |
| Nine Months Ended  Nov. 29, 2003 |   |           |   |                 |   |               |   |                    |   |
| U.S. Consumer Products           |   | $              | 296.5  |                 | $      | (254.7             | )      | $                       | — |   | $ | 41.8 |   |
| Foodservice Products             |   | 158.8          |   | (156.7               | )      | (2.2               | )      | (0.1                    | )      |
| Canadian Foods                   |   | 240.7          |   | (227.0               | )      | (2.5               | )      | 11.2                    |   |
| Corporate                        |   | —         |   | (10.2                | )      | (0.8               | )      | (11.0                   | )      |
| Total                            |   | $              | 696.0  |                 | $      | (648.6             | )      | $                       | (5.5   | ) | $ | 41.9 |   |
|                             |   |           |   |                 |   |               |   |                    |   |
| Nine Months Ended Nov. 30, 2002  |   |           |   |                 |   |               |   |                    |   |
| U.S. Consumer Products           |   | $              | 317.7  |                 | $      | (273.6             | )      | $                       | — |   | $ | 44.1 |   |
| Foodservice Products             |   | 176.0          |   | (171.4               | )      | —             |   | 4.6                     |   |
| Canadian Foods                   |   | 228.0          |   | (210.0               | )      | —             |   | 18.0                    |   |
| Corporate                        |   | —         |   | (10.2                | )      | —             |   | (10.2                   | )      |
| Total                            |   | $              | 721.7  |                 | $      | (665.2             | )      | $                       | — |   | $ | 56.5 |   |

 

**(12) Contingencies**- In fiscal 1998, we were notified that approximately $6 million of ourinventory was taken from a ship in the port of St. Petersburg, Russia.  The ship had been chartered by a majorcustomer of our former food-exporting business.  Following submission of a claim for indemnity, the insurancecarrier denied our claim for coverage, and we commenced a lawsuit seeking toobtain coverage under the insurance carrier’s policy.  In October 2001, the U.S. District Court of the Southern Districtof New York granted us summary judgment on our claim, which is carried on ourbooks as a $6 million receivable, and awarded us interest to the date ofjudgment.  The interest has not beenrecognized on our books.  On Oct. 17,2002, following an appeal by the insurance carrier, the U.S. Court of Appealsfor the Second Circuit partially affirmed the summary judgment with respect tothe amount of loss and held that such loss is within the scope of thepolicy.  The Court of Appeals, however,remanded the case back to the District Court for further proceedings todetermine whether certain provisions of the policy had the effect of excludingcoverage.  We continue to believe thatthe loss is covered by the insurance policy, and we will continue toaggressively pursue our claim against the insurer.  If we are ultimately unable to collect on the policy, we wouldrecord a loss of $6 million to write off the receivable for the estimatedrecovery of the claim.

 

On Sept. 9, 2002, wecompleted the sale of our foodservice distribution business to WellspringDistribution Corp.  We continue toguarantee certain real estate, information system and tractor/trailer fleetlease obligations of our former business. However, at the time of the sale of the business, we

 

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renegotiated ourguarantee of the business’s fleet lease obligations.  The guarantee now requires the lessor to pursue collection andother remedies against our former subsidiaries before demanding payment fromus.  In addition, our guaranteeobligation is limited to 75% of the amount outstanding after the lessor hasexhausted its remedies against our former subsidiaries.  This reduces our risk under the fleet leaseguarantee.  In addition, while theinitial guarantee was not limited by time, the fleet lease guarantee will nowexpire in September 2006.

 

Theoutstanding guarantees for the lease obligations of our former subsidiaries asof Nov. 29, 2003, were as follows:

 
| **(in  millions)**  |   | **Amounts** |   |
|---------------------|--------|-------------|--------|
| Tractor/trailer     |   | $           | 21.5   |   |
| Real estate         |   | 14.3        |   |
| Information systems |   | 0.1         |   |
| Total               |   | $           | 35.9   |   |

 

IfWellspring Distribution Corp. was unable to meet its obligations that we haveguaranteed, any loss would be reduced by the amount generated from theliquidation of the tractor/trailer fleet and income from the sub-lease of realestate space.

 

Thepossibility that we would have to honor our contingent liabilities under theguaranties is largely dependent upon the future operations of our formersubsidiaries and the value of the underlying leased properties.  Should a reserve be required in the future,it would be recorded at the time the obligation was determined to be probable.

 

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INTERNATIONALMULTIFOODS CORPORATION AND SUBSIDIARIES

Management’s Discussion and Analysis of Results of

Operations and Financial Condition

 

**OVERVIEW**

 

InternationalMultifoods is a North American producer of branded consumer foods and foodserviceproducts, including baking mixes, frozen bakery products, flour,ready-to-spread frostings, condiments, potato and pancake mix offerings.  We manage the company through threeoperating segments – U.S. Consumer Products, Foodservice Products and CanadianFoods.

 

InSeptember 2002, we sold our foodservice distribution business for $166 millionin cash to Wellspring Distribution Corp. The foodservice distribution business is classified as discontinuedoperations in the consolidated condensed financial statements.

 

InDecember 2003, we announced that we had retained an outside consulting firm tohelp us conduct an enterprise wide assessment of our operational structure inorder to identify opportunities to reduce costs, and improve productivity andorganizational effectiveness.  We expectto complete the assessment by the end of February 2004.  The organizational assessment is alsoexpected to result in restructuring actions that may result in charges thatwould be material to our results of operations.

 

**Results of Operations**

 

ContinuingOperations

 

Overview

 

Consolidated net sales inthe third quarter ended Nov. 29, 2003, declined 9% to $273.7 million.  The decline was primarily driven by lowersales volume in each of our business segments. The decline was partially offset by the impact on net sales of astronger Canadian dollar on currency translation.

 

Earnings from continuing operations were $14.2million, or 73 cents per diluted share, in the third quarter ended Nov. 29,2003, compared with earnings of $12.8 million, or 66 cents per share, in thesame period last year.  Earnings in thecurrent quarter were adversely affected by lower sales volumes and lowerpension income.  We were also adverselyimpacted by a $1.1 million pre-tax charge, or 3 cents per share, for severancecosts associated with the departure of two executive officers.  Last year, our third quarter results wereaffected by a pre-tax charge of $4.7 million, or 15 cents per share, associatedwith the early repayment of term loans.

 

Consolidated net sales for the nine months endedNov. 29, 2003, were $696 million, compared with $721.7 million in the sameperiod last year.  Consolidated netsales were affected by the same factors as described in the third quarter.

 

Earnings from continuing operations for the ninemonths ended Nov. 29, 2003, were $14.8 million, or 76 cents per diluted share,compared with earnings of $20.4 million, or $1.05 per diluted share in the sameperiod last year.  Earnings in thecurrent nine-month period were adversely affected by pre-tax charges of $5.5million, or 17 cents per share, which included costs to restructure andincrease the competitiveness of our Canadian Foods business and our FoodserviceProducts business.  See Note 5 to theconsolidated condensed financial statements for additional information on thesecharges.  Earnings in the currentnine-month period were also adversely affected by a pre-tax charge of $4.4million, or 14 cents per share, to write off unamortized financing costs on asenior secured credit facility that we replaced in August 2003.  In addition, earnings from

 

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continuing operations in the current period wereadversely affected by higher commodity costs and lower pension income.

 

Segment Results

 

U.S. Consumer Products:Net sales in the third quarter declined 12% to $133.2 million, compared with$151.8 million in the same period a year ago. Unit sales volume declined 15% due to aggressive competitive promotionalactivity and soft product category trends. Product category trends have been affected by the growing popularity oflow carbohydrate diets, which we believe will continue to negatively impactconsumer demand in the foreseeable future. The decline in net sales was partially offset by higher average sellingprices.

 

Operating earnings were$23.9 million, compared with $23.3 million last year.  The slight increase in earnings was driven by the higher averageselling prices and lower selling and promotional expenses, which more thanoffset the affect of the lower sales volume.

 

Net sales for thenine-month period ended Nov. 29, 2003, declined 7% to $296.5 million, comparedwith $317.7 million in the same period a year ago.  The sales decline was the result of lower unit volumes, whichwere affected by competitive promotional activity, soft product category trendsand the bankruptcy of Fleming Companies, Inc. Operating earnings declined 5% to $41.8 million, compared with $44.1million in the same period last year. The decline in earnings was driven by the lower sales volume, a $1.7million bad debt reserve associated with the Fleming bankruptcy and highercommodity costs.

 

Foodservice Products: Net sales in the thirdquarter declined 10% to $53.4 million, compared with $59.4 million in the sameperiod a year ago.  The decline waspartially the result of lower unit volumes in our bakery mix product lines,which have been impacted by ongoing softness in the foodservice industry andcompetitive pressures.  The salesdecline was also the result of lower unit sales volume in our ready-to-bakeproduct line, which was primarily the result of exiting a large unprofitablecustomer account.

 

Operating earnings in thethird quarter were $0.3 million, compared with $1.6 million last year.  Operating earnings in the current quarterwere affected by higher raw material costs and the lower sales volumes.  Raw material costs increased primarily as aresult of sharply higher egg costs.  Webelieve that high egg costs as well as unfavorable sales volumes will continueto negatively impact operating results of the business segment for theremainder of the fiscal year.  Theearnings decline, however, was partially offset by reduced selling andadministrative costs.

 

Net sales for thenine-month period ended Nov. 29, 2003, declined 10% to $158.8 million, comparedwith $176 million in the same period a year ago.  The decline in net sales was due to the same factors discussedfor the third quarter.

 

We recognized anoperating loss of $0.1 million in the current nine-month period, compared withoperating earnings of $4.6 million in the same period last year.  In addition to the factors described in thediscussion of the third quarter, operating results in the current nine-monthperiod were impacted by a $1 million pre-tax charge for severance costsassociated with reducing the number of production employees at our plant inSedalia, Missouri and closing two small facilities in the eastern UnitedStates.  Operating results in thecurrent period were also affected by a $1.3 million pre-tax charge forseverance costs associated with closing a plant in Simcoe, Ontario, Canada.  In addition, we sold production equipment and other assets at theplant for a pre-tax gain of $0.4 million. The plant closure and asset sale resulted from our decision to exit thefrozen pie product line, which had annual sales of approximately $10 millionbut did not generate operating earnings.

 

Canadian Foods: Net salesin the thirdquarter declined 3% to $87.1 million, despite the impact of a strongerCanadian dollar on currency translation. Excluding the effects of currency translation, net sales declinedapproximately

 

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15%, due primarily tolower volumes in commercial and consumer baking mixes, and exportproducts.  We experienced a significantdecline in commercial bakery mix volume as a result of a large customertransitioning to a frozen product format. The decline in consumer mixes wasattributable to our decision to discontinue the sale of Duncan Hines productsin Canada, which we manufactured and marketed under an agreement with AuroraFoods Inc.  The agreement expired inJune 2003.

 

Operating earnings in thethird quarter declined 28% to $6.4 million, compared with $8.9 million lastyear.  The earnings decline wasprimarily driven by the sales volume decline and unfavorable gross marginimpact on our U.S. dollar-denominated sales as a result of a stronger Canadiandollar.  If the Canadian dollarcontinues to stay strong relative to the U.S. dollar, our gross margin on U.S.dollar-denominated sales will continue to be adversely impacted.

 

Net sales for thenine-month period ended Nov. 29, 2003, increased 6% to $240.7 million, comparedwith $228 million in the same period last year.  Net sales were affected by the same factors described in thethird quarter.  Operating earningsdeclined 38% to $11.2 million, compared with $18 million last year.  In addition to the factors described in thethird quarter, operating earnings in the current nine-month period wereadversely affected by a $2.5 million pre-tax charge for severance costsassociated with reorganizing the Canadian Foods business.

 

Corporate: In the thirdquarter of fiscal 2004, we recorded a pre-tax charge of $0.8 million for severancecosts associated with the departure of the President of the Company.

 

Non-operating Expense andIncome

 

During the second quarter of fiscal 2004, werecognized a non-cash write off of unamortized financing costs of $4.4 millionas a result of replacing our senior secured credit facility.  In the first quarter of fiscal 2004, werecorded a $1.4 million foreign exchange gain on U.S. dollar-denominated debtthat was held by our Canadian business. The gain resulted from a stronger Canadian dollar, which had the effectof reducing the amount of Canadian dollars our Canadian business needed torepay the U.S. dollar debt obligation.

 

Income Taxes

 

For the nine months ended Nov. 29, 2003, ourconsolidated effective income tax rate was 30.2%, compared with 38.2% in thesame period last year.  The decline isprimarily the result of the implementation of tax planning initiatives inCanada and favorable resolution of state tax audits.

 

**FinancialCondition**

 

Ourmajor sources of liquidity are cash flows from operations and borrowings fromour $175 million revolving credit facility. As of Nov. 29, 2003, we had $71 million available under the revolvingcredit facility.

 

Webelieve that cash flows from operations and borrowings from our existingrevolving credit facility will be sufficient to meet our operating requirementsand debt service obligations over the next twelve months.

 

Capital Resources

 

In August 2003, weentered into a new five year, $250 million senior secured credit agreement witha syndicate of banks in order to refinance our previous credit facility undermore favorable terms.  The new seniorsecured credit agreement is comprised of a $175 million revolving creditfacility and $75 million of amortizing term loans.  The interest rates on borrowings under the new credit agreementare variable and based on current market interest rates plus a spread based onour leverage.  The current spread onLIBOR based loans is 2.25%.  The creditagreement also contains covenants that require the maintenance of leverage andfixed charge coverage ratios and limit revolver

 

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borrowings based on ourasset levels.  Borrowings under theagreement may be used for general corporate purposes.  The agreement is secured by our assets.

 

InSeptember 2003, we entered into three interest rate swap agreements for anaggregate notional amount of $75 million that expire on Nov. 13, 2009.  Under the terms of the swap agreements, wewill receive a fixed interest rate of 6.602% and pay a floating interest ratebased on three-month LIBOR plus a predetermined spread that will average2.465%.  We will account for these swapagreements as fair value hedges on $75 million of our unsecured notes thatmature on Nov. 13, 2009 and have an interest rate of 6.602%.  We entered into the swap agreements in orderto achieve a targeted proportion of variable versus fixed rate debt.

 

InNovember 2003, Standard & Poor’s lowered our corporate credit rating to“BB-” from “BB” and placed our rating on “CreditWatch” with negativeimplications.  We believe that thecredit rating downgrade will not impact our results of operations or liquidity.

 

Cash Flows

 

Cash provided bycontinuing operations was $0.8 million for the first nine months of fiscal2004, compared with $19.4 million in the prior-year nine-month period.  Operating cash flows in the current periodwere adversely impacted by the completion of transition services for our U.S.Consumer Products business, which had been provided by General Mills since theNovember 2001 acquisition of the business. Under a transition services agreement, General Mills handled invoicingand collections and paid certain accounts payable for the business, whichresulted in the related trade receivables and payables being carried by GeneralMills last year.  During the firstquarter, we assumed direct responsibility for all billing, collection andpayment activities of the business.  Asa result, we now carry on our balance sheet the accounts receivable andpayables of the acquired business. Operating cash flows were also impacted by a decline in trade promotionliabilities, which are included in other current liabilities on theconsolidated condensed balance sheet.

 

Capital expenditures inthe nine months ended Nov. 29, 2003, were $28.1 million and included $11.5million for the Toledo, Ohio, plant that we acquired from General Mills.  Capital expenditures also includedadditional investment in equipment at the Toledo plant and an expansion projectat our flour mill in Montreal, Quebec. Capital expenditures in the nine months ended Nov. 30, 2002, were $19.3million.

 

**Cautionary Statement Relevant to Forward-Looking Information**

 

Thisdocument contains forward-looking statements within the meaning of the PrivateSecurities Litigation Reform Act of 1995. These forward-looking statements are based on current expectations orbeliefs, including, but not limited to, statements concerning our operationsand financial performance and condition. For this purpose, statements that are not statements of historical factmay be deemed to be forward-looking statements.  We caution that these statements by their nature involve risksand uncertainties, and actual results may differ materially depending on a varietyof important factors, including, among others, the impact of competitiveproducts and pricing; changes in consumer preferences and tastes or perceptionsof health-related issues; effectiveness of advertising or market-spendingprograms; market or weather conditions that may affect the costs of grain,other raw materials, utilities and fuel; the impact of labor matters; changesin laws and regulations; fluctuations in foreign exchange and interest rates;the potential inability to collect on a $6 million insurance receivable claimrelated to the loss of product in St. Petersburg, Russia; the potentialenforcement of our guaranties on lease obligations of our former distributionbusiness; risks commonly encountered in international trade; and other factorsas may be discussed in our reports filed with the Securities and ExchangeCommission.

 

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Item4.  Disclosure Controls and Procedures

 

Atthe end of the period covered by this report, we conducted an evaluation, underthe supervision and with the participation of our Chief Executive Officer andChief Financial Officer, of our disclosure controls and procedures (as definedin Rule 13a-15(e) under the Securities and Exchange Act of 1934 (the “ExchangeAct”)).  Based upon that evaluation, ourChief Executive Officer and Chief Financial Officer concluded that ourdisclosure controls and procedures were effective as of the end of the periodcovered by this report to reasonably ensure that information required to bedisclosed in reports that we file or submit under the Exchange Act is recorded,processed, summarized and reported within the time periods specified inSecurities and Exchange Commission rules and forms.  In addition, during the period covered by this report, there wasno change in our internal control over financial reporting (as defined in Rule13a-15(f) under the Exchange Act) that has materially affected, or isreasonably likely to materially affect, our internal control over financialreporting.

 

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**PART II**

 

**OTHERINFORMATION**

 
| **Item 6.** | **Exhibits and Reports on Form 8-K**                                                                                                                                                                                                                                                                                                                                                                                  |
|-------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|        |                                                                                                                                                                                                                                                                                                                                                                                                                  |   |   |
|        | (a)                                                                                                                                                                                                                                                                                                                                                                                                                   | Exhibits |
|        |                                                                                                                                                                                                                                                                                                                                                                                                                  |   |   |
|        |                                                                                                                                                                                                                                                                                                                                                                                                                  | 11. | Computation of Earnings  (Loss) per Common Share. |
|        |                                                                                                                                                                                                                                                                                                                                                                                                                  |   |   |
|        |                                                                                                                                                                                                                                                                                                                                                                                                                  | 12. | Computation of Ratio of  Earnings to Fixed Charges. |
|        |                                                                                                                                                                                                                                                                                                                                                                                                                  |   |   |
|        |                                                                                                                                                                                                                                                                                                                                                                                                                  | 31.1 | Certification of Chief Executive Officer Pursuant to  Section 302 of the Sarbanes-Oxley Act of 2002. |
|        |                                                                                                                                                                                                                                                                                                                                                                                                                  |   |   |
|        |                                                                                                                                                                                                                                                                                                                                                                                                                  | 31.2 | Certification of Chief Financial Officer Pursuant to  Section 302 of the Sarbanes-Oxley Act of 2002. |
|        |                                                                                                                                                                                                                                                                                                                                                                                                                  |   |   |
|        |                                                                                                                                                                                                                                                                                                                                                                                                                  | 32.1 | Certification of the Chief Executive Officer Pursuant  to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of the  Sarbanes-Oxley Act of 2002. |
|        |                                                                                                                                                                                                                                                                                                                                                                                                                  |   |   |
|        |                                                                                                                                                                                                                                                                                                                                                                                                                  | 32.2 | Certification of the Chief Financial Officer  Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of the  Sarbanes-Oxley Act of 2002. |
|        |                                                                                                                                                                                                                                                                                                                                                                                                                  |   |   |
|        | (b)                                                                                                                                                                                                                                                                                                                                                                                                                   | Reports on Form 8-K |
|        |                                                                                                                                                                                                                                                                                                                                                                                                                  |   |   |
|        | During the  quarter ended November 29, 2003, Multifoods furnished (1) a Current Report on  Form 8-K dated September 25, 2003, relating to Multifoods’ financial  results for its second quarter ended August 30, 2003 and (2) a Current  Report on Form 8-K dated November  5, 2003, relating to Multifoods’  expected earnings per share for its fiscal year ending February 28, 2004. |

 

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**SIGNATURE**

 

Pursuant to the requirementsof the Securities Exchange Act of 1934, the registrant has duly caused thisreport to be signed on its behalf by the undersigned thereunto duly authorized.

 

 
|   |            | **INTERNATIONAL MULTIFOODS CORPORATION** |                                 |
|--------|-----------------|------------------------------------------|--------------------------------------|
|   |            |                                     |
|   |            |                                     |                                 |
| Date:  | January 9, 2004 | By                                       |   /s/ John E.  Byom        |   |
|   |            |                                     | John E. Byom                         |
|   |            |                                     | Senior Vice President,  Finance, and |
|   |            |                                     |   Chief Financial Officer       |
|   |            |                                     | *(Principal Financial Officer*       |
|   |            |                                     | * and Duly  Authorized Officer* |
|        |                 |                                          |                                      |  |  |

 

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**EXHIBITINDEX**

 

 

11.           Computation of Earnings(Loss) per Common Share.

 

12.           Computationof Ratio of Earnings to Fixed Charges.

 

31.1         Certification of Chief Executive Officer Pursuant toSection 302 of the Sarbanes-Oxley Act of 2002.

 

31.2         Certification of Chief Financial Officer Pursuant toSection 302 of the Sarbanes-Oxley Act of 2002.

 

32.1         Certification of the Chief Executive Officer Pursuantto 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of theSarbanes-Oxley Act of 2002.

 

32.2         Certification of the Chief Financial Officer Pursuantto 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of theSarbanes-Oxley Act of 2002.

 

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