10-K 1 d10k.txt 10-K SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 FORM 10-K ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Fiscal Year Ended Commission File Number March 31, 2001 0-17084 -------------- ------- THE SMITHFIELD COMPANIES, INC. ------------------------------ (Exact name of Registrant as specified in its charter) Virginia 54-1167160 -------- ---------- (State or other jurisdic- (I.R.S. Employer tion of incorporation) Identification No.) 311 County Street, Portsmouth, VA 23704 --------------------------------- ----- (Address of principal executive offices) (Zip Code) Registrant's telephone number including area code:(757) 399-3100 Securities registered pursuant to Section 12(b) of the Act: None Securities registered pursuant to Section 12(g) of the Act: Common Stock, No Par or Stated Value ------------------------------------ (Title of Class) Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No ----- ------ Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [X] The aggregate market value of voting stock held by non-affiliates of the Registrant computed by reference to the average bid and asked prices on June 15, 2001: $3,609,387 The number of shares outstanding of each of the Registrant's classes of Common Stock, as of June 15, 2001 was 2,114,593 shares of Common Stock. PART I ITEM 1. BUSINESS General ------- Through its operating units, The Smithfield Companies, Inc. ("the Company") produces and markets a wide range of branded food products to the retail grocery and food service industries. The Company has the legal right through two of its units (Smithfield Ham and Joyner) to label certain of its aged, dry cured hams as genuine "Smithfield" hams, a term that can be used by only two other companies. The use of this term is protected by the laws of the Commonwealth of Virginia and enforced by the United States Department of Agriculture. The Company was incorporated in Virginia in 1981 as Pruden Foods, Inc. The name was changed to The Smithfield Companies, Inc. in 1985. The Company does not raise or slaughter animals or grow any vegetable products, but instead purchases all meats and ingredients for processing and curing. The Company purchases its meats and ingredients from a variety of suppliers and it is not dependent on any one particular supplier for a material portion of meats, ingredients or packaging materials. On April 30, 2001, the Company entered into a definitive merger agreement with Smithfield Foods, Inc. pursuant to which a subsidiary of Smithfield Foods, Inc. is being merged with and into the Company. Pursuant to the merger agreement, each share of the Company's common stock outstanding immeditely prior to the effective time of the merger, other than dissenting shares and shares held by Smithfield Foods, will be converted into and become exchangeable for an amount in cash equal to $8.50 without interest. The Company's board of directors has unanimously approved the merger agreement and recommended approval to the shareholders. Completion of the merger is subject to the customary conditions, including approval by more than two-thirds of the outstanding shares of common stock. Shareholders holding approximately 77% of the outstanding shares have agreed to vote in favor of the merger. The merger is expected to be completed during the Company's second quarter of fiscal 2002. The merger agreement has been attached as an exhibit to the Company's current report on Form 8-K filed with the Securities and Exchange Commission on May 4, 2001. Please see the Form 8-K for more information on the merger agreement. The Smithfield Ham and Products Co., Inc. ----------------------------------------- Founded in 1917 as a specialty food producer emphasizing genuine "Smithfield" hams, Smithfield Ham has evolved from a cured meat producer and meat canner to become primarily a producer of frozen barbecues and chilies for the food service and retail grocery industries. Smithfield Ham began producing frozen barbecues in 1985 primarily for the food service industry. On February 28, 1997, Smithfield Ham acquired the frozen barbecue and chili product lines of Doughtie's Foods, Inc. The operations have been integrated into the Company's plant in Smithfield, Virginia. The frozen line accounted for 86% of the unit's sales during the current year and includes pork, chicken and beef barbecues and frozen chili. The frozen line is marketed under the "James River", "Smitty Pig", "Virginia's Choice" and "Doughtie" brands primarily in the Mid-Atlantic States. The significant increase in the frozen line during the past three years is due to the acquisition of the Doughtie's product lines. Management believes the frozen products have significant growth potential. Smithfield Ham produces and markets barbecue sauces in plastic and glass containers and portion control packets for both the food service and retail grocery industries. It also markets deviled meat spreads, canned barbecues, country hams and genuine "Smithfield" hams under the "Amber" brand. 9% of Smithfield Ham's sales is composed of cured hams, honey glazed hams, canned meat products and meat spreads in glass containers marketed under the following brands: "James River", "Princess Anne" and "Amber". These products are sold in the Mid-Atlantic States to retail grocery accounts and, jointly with Joyner, by direct mail through seasonal consumer catalogs. The remaining 5% of the unit's sales relates to barbecue sauces sold to the fast food industry. These products are marketed primarily in the southeast under the "James River" brand. V. W. Joyner & Co. ------------------ Founded in 1889, V. W. Joyner & Co. is a curer and packer of genuine "Smithfield" hams under the "Joyner" brand and a curer and packer of country hams under the "Red Eye" brand. Joyner has expanded its business by further processing these two main products into various sliced, cooked and pressed variations for both the food service and retail grocery industry. The curing procedures for genuine Smithfield and country hams have not changed appreciably in the last 100 years, which accounts for the distinct and readily identifiable taste associated with these hams. On April 22, 1998, V. W. Joyner acquired The E. M. Todd Company. Founded in Smithfield, Virginia prior to 1779, Todd is America's oldest meat packer and the original curer of the Smithfield Ham. Joyner's sales are concentrated in Virginia, but Joyner maintains a large number of small accounts throughout the country. In addition, Joyner sells by direct marketing through seasonal consumer catalogs in combination with Smithfield Ham. Joyner's business is highly seasonal, concentrated during the Thanksgiving and Christmas holiday period. As a result, the third fiscal quarter accounted for 51% of Joyner's annual sales. Pruden Packing Co., Inc. ------------------------ Established in 1917 by P. D. Pruden, Pruden's first 50 years involved a number of activities, including curing country hams and other pork products, ginning cotton and packing potatoes and watermelons. By the late 1960's, Pruden focused exclusively on curing and packing dry cured pork products, including country hams, bacon and shoulders, which remain its primary products. Pruden markets its country meats primarily in Virginia and North Carolina under the "Peanut City" and "Pruden" brands. It also exports hams and shoulders to the Caribbean under its own and private label brands. Pruden's top ten customers account for approximately 84% of its sales. Pruden's business is highly seasonal, concentrated during the Thanksgiving and Christmas holiday period. As a result, the third fiscal quarter accounted for 57% of its annual sales. The Company acquired Pruden in 1986. The plant is located in Suffolk, Virginia. Williamsburg Foods, Inc./The Peanut Shop, Inc. ---------------------------------------------- These two subsidiaries are operated as one unit of the Company and involve a manufacturing facility, which operates as Williamsburg Foods, Inc., and four retail stores, which trade as "The Peanut Shop". Williamsburg Foods, Inc./The Peanut Shop, Inc. (continued) ---------------------------------------------------------- The manufacturing facility processes high quality extra large Virginia peanuts and premium cashews, which it packs in vacuum sealed tins and other containers for its own retail stores, for sale to other retailers, and for direct marketing to consumers through its seasonal retail catalogs. In addition, Williamsburg also packs, under its label, other specialty products such as pistachios, cashews and soups, and purchases for resale related peanut products, including candy and peanut butter. All of these products are marketed under "The Peanut Shop of Williamsburg" label to specialty customers throughout the country. The retail stores, currently located in the southeastern United States, are located in tourist oriented shopping areas. Each of the four retail stores operate with a separate name depicting its location (i.e. The Peanut Shop of Williamsburg). The stores feature their own brand of peanuts and peanut products, an extensive line of other nut products and a large selection of the Company's cured meat products. Williamsburg Foods, Inc. and The Peanut Shop, Inc. were acquired in late 1986. The manufacturing facility is located near Williamsburg in James City County, Virginia. Marketing and Customers ----------------------- The Company is not dependent on any single customer or few customers, the loss of any one or more of which would have a material adverse effect on the Company. No customer accounts for more than 10% of the Company's consolidated sales. Each unit has developed a marketing strategy, which emphasizes quality products, customer service and maximum use of its regional brand awareness by consumers. Whenever possible the "Smithfield" name is emphasized by Smithfield Ham and Joyner to take advantage of the name's favorable image in the food industry and with consumers. The units have wholesale accounts throughout the United States, but the primary market area is the states of Virginia, Maryland, North Carolina, South Carolina, West Virginia, Tennessee, Georgia and Florida, and the District of Columbia. At Smithfield Ham, an executive supervises four sales executives and a network of regional brokers. Smithfield Ham utilizes volume discounts and co-op advertising to promote its products. Products are distributed by its fleet of four trucks but many customers use their own trucks to pick up Smithfield Ham products. The unit does no media advertising except related to its direct marketing (catalog) business, where direct consumer response ads are placed in selected national and regional magazines. At Joyner, the general manager and the sales manager are responsible for all food service and retail grocery accounts and supervision of a small group of brokers around the country. Located within one mile of each other, Joyner and Smithfield Ham share the same delivery fleet of four trucks for Virginia deliveries and generally use common carrier or customer pickup for sales outside Virginia. Marketing and Customers (continued) ----------------------------------- Joyner utilizes volume discounts, co-op advertising and point-of-sale advertising to promote its products. Like Smithfield Ham, Joyner does no media advertising except related to its direct marketing (catalog) efforts with Smithfield Ham. Currently, there are only four producers of genuine "Smithfield" hams. By the laws of the Commonwealth of Virginia, a genuine Smithfield ham must be dry cured and aged for a minimum of six months and the processing must take place within the town limits of Smithfield, Virginia. The law is enforced by both state and federal meat regulatory personnel. The Company's Smithfield Ham and Joyner units are two of the four producers currently permitted to call certain of their hams genuine "Smithfield", thus creating a unique and protected market for their two brands of this specialty ham. Pruden sells primarily to retail grocery chains and retail distributors in eastern Virginia and eastern North Carolina. Pruden's president and its general manager supervise all sales activities. Pruden uses volume discounts and co-op advertising but does no other media advertising. Pruden distributes its products on two trucks within its geographical market, although several of Pruden's primary distributors pick up products from its plant in Suffolk, Virginia. Pruden exports dry cured hams and other pork products to a number of Caribbean Islands in the fall of each year. Williamsburg sells to a wide variety of specialty retail outlets and catalogers throughout the country. Its vice president and general manager and two sales personnel are responsible for generating sales through direct calls, "fancy food" trade shows and trade publications. Williamsburg's direct consumer marketing (catalog) sales are generated from two mass mailings per year. Wholesale distribution is largely by common carrier. The balance of Williamsburg's sales are accounted for by its subsidiary, The Peanut Shop, Inc., which operates four retail stores. Raw Materials ------------- One of the Company's primary raw materials consists of fresh and frozen pork products purchased domestically or imported. Another significant raw material is raw peanuts purchased primarily from Virginia and North Carolina. Should increases in the cost of raw materials occur, the Company may not be able to pass such increases through to its customers. The Company has a number of suppliers throughout the United States and Canada and has not experienced any difficulty in obtaining adequate supplies of its raw materials. Competition ----------- Because of the Company's variety of products and its sales to both the retail grocery industry and the food service industry, its competitors are likewise varied and numerous. Smithfield Ham competes with several large and small regional food processors. Joyner and Pruden primarily compete with a number of small ham processors of similar size located in Virginia and North Carolina. Williamsburg competes with a number of peanut processors of similar size located in Virginia and North Carolina. The Company believes that all of its units compete effectively with other food processors by providing products of predictable quality and consistency, and responsive service to its customers. Employees --------- As of March 31, 2001, the Company had approximately 84 full-time employees and 76 part-time employees. During the peak holiday period from September through December, the Company typically has employed up to an additional 50 seasonal employees. All hourly, non-clerical employees at Pruden are represented by Local 25/65 of the United Auto Workers Union. The collective bargaining agreement expires on May 7, 2002. At Smithfield Ham and Joyner, all hourly, non-clerical employees are represented by Local 1046 affiliated with the Laborers' International Union of North America, AFL-CIO. Effective March 1, 2000, the Company entered into a new union contract that will be in effect until February 28, 2005. All other units are non-union. Virginia is a right-to-work state. None of the units with collective bargaining agreements has ever experienced a strike and the Company considers its employee relations to be good. Government Regulation --------------------- Food products purchased, processed and sold by the Company are subject to various federal, state and local laws and regulations, including the federal Meat Inspection Act and the Food and Drug Act. Smithfield Ham, Joyner and Pruden are subject to United States Department of Agriculture regulations regarding quality, labeling and sanitary control. Pruden has been under the U. S. Department of Agriculture's Total Quality Control System Program (TQC) since 1985, which enables Pruden to self-inspect its products and production conditions and techniques. The Company is also subject to various federal, state and local regulations regarding work place health and safety, environmental protection, equal employment opportunity and other matters. Trademarks ---------- All significant brand names used by the Company are protected by actual or pending federal trademark registration. ITEM 2. PROPERTIES The Smithfield Ham plant is located on seven acres in Smithfield, Virginia. The office and manufacturing facilities have a total of 60,012 square feet. The Joyner facility with 30,714 square feet on three acres is also located in Smithfield. Pruden occupies a 32,127 square foot facility on three acres in Suffolk, Virginia. Williamsburg occupies a 20,000 square foot facility on 1.5 acres in James City County, Virginia. The Company also owns an office building with approximately 13,000 square feet of leasable space. The Company occupies approximately 3,000 square feet and the remaining portion is currently under lease. The Company also owns equipment and vehicles used in its operations. The Company owns all of its property free of any liens or encumbrances. In addition to this property, the Company has operating leases for each of its retail operations. Commitments associated with these leases are disclosed in Note I to the Company's consolidated financial statements and is incorporated herein by reference. All of the Company's facilities have access to municipal sewer systems. Management believes that the sewage treatment facilities available to the Company are and will continue to be adequate. The Company believes its facilities and equipment are generally well maintained and have a capacity adequate for the Company's current needs. ITEM 3. LEGAL PROCEEDINGS -- None ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS -- None PART II ITEM 5. MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED STOCKHOLDERS MATTERS Since September 19, 2000, the Company's common stock is traded on the OTC Bulletin Board Market under the symbol HAMS.OB. Prior to September 19, 2000, the Company's common stock traded on the Nasdaq Small Cap Market under the symbol HAMS. The following table sets forth the quarterly high and low market prices and dividends paid for each quarter of fiscal 2001 and 2000.

ITEM 6. SELECTED FINANCIAL DATA (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

ITEM 7 Management's Discussion and Analysis of Financial Condition and Results of Operations General The Company produces and markets branded foods primarily to the retail grocery, food service and gourmet food industries. The Company also markets its products through direct mail and its own retail outlets. The Company's business is somewhat seasonal with its direct mail and gourmet food operations having disproportionate sales during the Christmas season. This traditionally makes the Company's third quarter sales and income the highest of the fiscal year. On April 30, 2001, the Company entered into a definitive merger agreement with Smithfield Foods, Inc. pursuant to which a subsidiary of Smithfield Foods, Inc. is being merged with and into the Company. Pursuant to the merger agreement, each share of the Company's common stock outstanding immediately prior to the effective time of the merger, other than dissenting shares and shares held by Smithfield Foods, will be converted into and become exchangeable for an amount in cash equal to $8.50 without interest. The Company's board of directors has unanimously approved the merger agreement and recommended approval to the shareholders. Completion of the merger is subject to the customary conditions, including approval by more than two-thirds of the outstanding shares of common stock. Shareholders holding approximately 77% of the outstanding shares have agreed to vote in favor of the merger. The merger is expected to be completed during the Company's second quarter of fiscal 2002. The merger agreement has been attached as an exhibit to the Company's current report on Form 8-K filed with the Securities and Exchange Commission on May 4, 2001. Please see the Form 8-K for more information on the merger agreement. Following the merger, the Company's common stock will no longer be eligible for trading on the OTC Bulletin Board and price quotations will no longer be available. Following the merger, the common stock will be terminated from registration under the Securities Exchange Act of 1934 and the Company will be relieved of its obligation to comply with the public reporting requirements of the Exchange Act. Accordingly, the Company will no longer be required to file periodic reports with the SEC, including for example, Form 10-Ks, 10-Qs and 8- Ks. In addition, Smithfield Companies will no longer be subject to the proxy rules of Regulation 14A, the short-swing trading profit provisions of Section 16 and, with respect to future transactions, the going-private provisions of Rule 13e-3 of the Exchange Act. The Company has filed preliminary proxy materials with the Securities and Exchange Commission regarding the merger. A copy of the definitive proxy statement will be mailed when it is available to all shareholders of record as of May 23, 2001. Please consult the definitive proxy statement for a more complete explanation of the merger. Additional copies of the definitive proxy statement are available from the Company on request. Results of Operations The following table shows, for the periods indicated, items included in Selected Financial Data as a percentage of sales and the percentage changes in the dollar amounts of such items compared to the prior period.

Fiscal 2001 Compared to Fiscal 2000 Net sales in 2001 were $20.2 million compared to $20.0 million in 2000. Cost of sales increased as a percentage of net sales to 67.4% for the year ended March 31, 2001 from 66.1% for the year ended March 31, 2000. The lower gross profit margins were primarily due to higher pork related raw material costs. Selling expenses increased as a percentage of net sales to 16.9% for the year ended March 31, 2001 from 15.9% for the year ended March 31, 2000. This increase was due to the continued effort by the Company to increase its marketing effort associated with the frozen food business. The Company's new frozen food processing facility has significantly increased plant capacity that should help future growth in this area. General and administrative expenses were $2.5 million for the year ended March 31, 2001 compared to $2.6 million for the year ended March 31, 2000. The decrease was primarily due to the Company's effort to cut costs to help offset increased marketing expenses. Fiscal 2001 Compared to Fiscal 2000 (continued) Other income increased significantly during the year ended March 31, 2001 compared to the prior year. Other income consists primarily of interest income and net gains from the sale of marketable securities. The Company increased its position in marketable securities during the year which resulted in this increase. The increase in interest expense during the year was due to higher average interest rates. Income tax expense as a percentage of income before income taxes was 29.0% in 2001 compared to 29.3% in 2000. Income tax rates are lower than statutory rates primarily because of income from tax-exempt municipal bond funds. Net income decreased to $860,204 or $.40 per diluted share in 2001 compared to $908,870 or $.40 per diluted share in 2000. The difference in weighted average shares outstanding between 2001 and 2000 is due to the repurchase of 58,151 shares in fiscal 2001. The difference in basic and diluted earnings per share is due to exercisable stock options. Fiscal 2000 Compared to Fiscal 1999 Net sales in 2000 were $20.0 million compared to $21.2 million in 1999. The decrease in net sales for the year ended March 31, 2000 is primarily due to a $1.1 million one-time seasonal sale to a national club store chain made during the second quarter of fiscal 1999. Cost of sales increased as a percentage of net sales to 66.1% for the year ended March 31, 2000 from 65.0% for the year ended March 31, 1999. The lower gross profit margins were primarily the result of additional production costs related to the Company's new frozen food processing plant. Selling expenses increased as a percentage of net sales to 15.9% for the year ended March 31, 2000 from 14.2% for the year ended March 31, 1999. This increase was a conscious effort by the Company to increase its marketing effort associated with the frozen food business. The Company's new frozen food processing facility has significantly increased plant capacity that should help future growth in this area. General and administrative expenses remained relatively constant during the two years ended March 31, 2000. Net interest income decreased 11.3% during the year ended March 31, 2000 compared to the prior year. Net invested balances during fiscal 2000 were lower than fiscal 1999 due primarily to the significant amount of repurchased stock during the year. Average interest rates were higher during the current year to partially offset the effect of lower balances. Income tax expense as a percentage of income before income taxes was 29.3% in 2000 compared to 32.2% in 1999. Tax-exempt interest income as a percentage of income before income taxes was higher in 2000 compared to 1999 thereby decreasing the overall average tax rate. Income tax rates are lower than statutory rates primarily because of income from tax-exempt municipal bond funds. Fiscal 2000 Compared to Fiscal 1999 (continued) Net income decreased to $908,870 or $.40 per diluted share in 2000 compared to $1,461,710 or $.62 per diluted share in 1999. The difference in weighted average shares outstanding between 2000 and 1999 is due to the repurchase of 168,317 shares in fiscal 2000. The difference in basic and diluted earnings per share is due to exercisable stock options. Liquidity and Capital Resources At March 31, 2001 the Company had an Industrial Development Revenue Bond (the Bond) in the amount of $2,800,000 outstanding. The Bond matures in the year 2014 and has principle payments of $500,000 due in 2004 and 2009. At March 31, 2001, the Company had approximately $6.2 million invested in short-term highly liquid debt instruments and a certificate of deposit in the amount of $1.0 million. In addition, the Company has an unused $10 million line of credit loan with a bank bearing interest at the LIBOR market rate plus .50% which expires on July 31, 2001. The Company believes its liquidity and capital resources to be excellent. Current cash flow and available funds are sufficient to satisfy existing cash requirements. Management believes the Company's capital resources are sufficient to meet all of its working capital requirements into the foreseeable future. Impact of Inflation Over the past three years, the effects of inflation on the Company's operations have been minimal. If inflation rises substantially, competitive pressures may make it difficult for the Company to pass the increases to the consumer. Forward-Looking Information This report may contain "forward-looking" information within the meaning of the federal securities laws. The forward-looking information may include statements concerning the Company's outlook for the future, as well as other statements of beliefs, future plans and strategies or anticipated events, and similar expressions concerning matters that are not historical facts. Forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those expressed in, or implied by the statements. ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK The Company is exposed to price fluctuations on the marketable portion of equity securities included in the Company's portfolio of marketable securities. These investments are generally in companies listed in the Standard & Poor's 500 Stock Index. From time to time, the Company purchases and sells call options on these securities in order to reduce the downside risk of these investments. A 10% adverse change in equity prices would result in an approximate $150,000 decrease in the fair value of our available-for-sale equity securities as of March 31, 2001. ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA The report of PricewaterhouseCoopers LLP, independent accountants, and the Consolidated Financial Statements for the year ended March 31, 2001 are included herein. Quarterly Results of Operations for the years ended March 31, 2001 and 2000 are included herein. CONSOLIDATED BALANCE SHEETS THE SMITHFIELD COMPANIES, INC.

See notes to consolidated financial statements. CONSOLIDATED STATEMENTS OF INCOME THE SMITHFIELD COMPANIES, INC.

See notes to consolidated financial statements. CONSOLIDATED STATEMENTS OF CASH FLOWS THE SMITHFIELD COMPANIES, INC.

See notes to consolidated financial statements. CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY THE SMITHFIELD COMPANIES, INC.

See notes to consolidated financial statements. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS THE SMITHFIELD COMPANIES, INC. - MARCH 31, 2001 ________________________________________________________________________________ NOTE A - SIGNIFICANT ACCOUNTING POLICIES Principles of Consolidation: The consolidated financial statements include the accounts of The Smithfield Companies, Inc. and its wholly owned subsidiaries. All significant intercompany balances and transactions have been eliminated. Cash Equivalents: The Company considers all highly liquid debt instruments purchased with an original maturity of three months or less to be cash equivalents. Segment Information: The Smithfield Companies, Inc. and its subsidiaries are engaged principally in a single business segment designated as "food processing". As a federally inspected food processor, the Company is engaged in the processing and/or distribution of cured meats, smoked meats and other food products. Revenue Recognition: Revenue is recognized at the time of title transfer, which ordinarily occurs at the time of shipment. Revenue from retail stores is recognized in the period which the products are sold. Advertising Costs: Advertising costs are expensed in the period incurred. Use of Estimates: The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the periods presented. Actual results could differ from those estimates. Concentrations of Credit Risk: Financial instruments that potentially subject the Company to credit risk consist primarily of cash equivalents and trade receivables. All of the Company's cash equivalents are in highly liquid short- term municipal bond funds. The carrying amount of these cash equivalents approximate fair value because of their short maturities and fluctuating interest rates. Credit risk with respect to trade receivables is limited as the Company has a large number of diverse customers, thus spreading the trade credit risk. No single customer accounts for more than 10% of net sales. Stock-Based Compensation: Stock-based compensation is determined using the intrinsic value method prescribed in Accounting Principles Board Opinion No. 25. Required disclosures determined under the fair value method in accordance with Statement of Financial Accounting Standards (SFAS) No. 123, Accounting for Stock-Based Compensation, are presented in Note F. New Accounting Standards: In June 1998, the Financial Accounting Standards Board issued SFAS No. 133 "Accounting for Derivative Instruments and Hedging Activities." This standard, as amended by SFAS No. 137, is effective for fiscal years beginning after June 15, 2000. The Company does not expect that SFAS No. 133 will have a material effect on its financial condition or results of operations. Securities & Exchange Commission Staff Accounting Bulletin 101 (SAB 101), "Revenue Recognition in Financial Statements", as amended by SAB 101B, is effective in the current fiscal year. Adoption of SAB 101 has not had a material effect on the recognition, presentation, and disclosure of revenue. Inventories: Inventories are valued at lower of cost (determined on the first- in, first-out method) or market. Property and Equipment: Property and equipment are stated at cost. Depreciation is provided over the estimated useful lives of the assets using the straight-line and accelerated methods (buildings 10-40 years; machinery and equipment 7-10 years; delivery equipment 3-10 years; office furniture and equipment 5-10 years). Accelerated methods are used for income tax purposes. Gains and losses from dispositions or retirements of property and equipment are recognized currently. The Company incurred $578,065, $565,068 and $267,689 of depreciation expense for the years ended March 31, 2001, 2000 and 1999, respectively. Marketable Securities and Comprehensive Income (Loss): Investments in marketable securities are reported at fair market value based on quoted market prices, with unrealized gains or losses, net of tax, recorded as a separate component of shareholders' equity, if material. Realized gains and losses are determined using the specific identification method. Bond Issuance Costs: Bond issuance costs have been capitalized and are being amortized over the life of the bonds. Accumulated amortization of bond issuance costs is $65,202 and $33,905 at March 31, 2001 and 2000, respectively. Amortization of Intangibles: Intangibles include goodwill, trademarks, brand names and customer lists. Goodwill is being amortized over twenty years using the straight-line method. Trademarks, brand names and customer lists are being amortized over their estimated useful lives of four to twenty years using the straight-line method. Accumulated amortization of intangibles is $548,250 and $500,919 at March 31, 2001 and 2000, respectively. Income Taxes: Taxes are provided on substantially all income and expense items included in earnings, regardless of the period in which such items are recognized for tax purposes. The Company uses an asset and liability approach that requires the recognition of deferred tax assets and liabilities for the estimated future tax consequences of events that have been recognized in the Company's financial statements or tax returns. In estimating future tax consequences, the Company generally considers all expected future events other than enactments of changes in the tax laws or rates. Earnings Per Share: Earnings per share are computed based upon the weighted average number of common shares outstanding and common equivalent shares in the form of stock options. NOTE B - INVENTORIES Inventories at March 31, 2001 and 2000 consisted of the following: 2001 2000 ---------- ---------- Finished goods................... $1,329,626 $1,295,332 Production materials: Meats.......................... 1,084,956 1,245,700 Other ingredients.............. 213,255 197,833 Packing materials.............. 506,496 489,964 ---------- ---------- $3,134,333 $3,228,829 ========== ========== NOTE C - MARKETABLE SECURITIES Equity securities are summarized as follows: Gross Gross Estimated Unrealized Unrealized Fair Available for Sale Cost Gains Losses Value ------------------------------------------------------------------------- Common stock $1,526,079 $123,256 $150,130 $1,499,205 Proceeds from sales of investment securities available for sale were $1,595,525, resulting in realized gains of $223,153 and realized losses of $65,692. During fiscal year 2001, the Company purchased and sold call options related to some of the above available for sale securities. At March 31, 2001 $19,694 in call options is included in accrued expenses. Realized gains associated with these call options are included as other income. NOTE D - LONG-TERM DEBT On March 4, 1999, the Company obtained, through its subsidiary The Smithfield Ham and Products Company, Incorporated, an Industrial Development Revenue Bond (IRB) in the amount of $2,800,000 from The Industrial Development Authority of the County of Isle of Wight. The interest rate on the bonds is variable and is adjusted weekly in accordance with the Bond Indenture by the Remarketing Agent. In no event shall the interest exceed 10%. At March 31, 2001 the variable interest rate on the bonds was 3.65%. The only collateral for the bonds is an irrevocable letter of credit from a bank. The letter of credit expires on February 15, 2002 and is subject to renewal. Principal payments on the bonds are as follows: $500,000 in 2004, $500,000 in 2009 and $1,800,000 in 2014. Interest is payable monthly. The Smithfield Companies, Inc. has guaranteed all principle and interest payments due under the bonds. Under terms of the IRB, the Company, among other things, agrees to maintain a current ratio of 3:1 and a debt service coverage ratio, as defined, of 1.5:1. The Company paid $119,710 and $98,927 in interest on the IRB for the years ended March 31, 2001 and 2000, respectively. NOTE E - LINE OF CREDIT The Company has a line of credit agreement with a bank. The agreement provides the Company with a $10 million line of credit loan that can be used for all general corporate uses including acquisitions of companies in the food business. The line bears interest at the LIBOR market rate plus .50% and is subject to renewal on July 31, 2001. The line of credit is unsecured. The Company did not have any outstanding balance on this facility during the year ended March 31, 2001. NOTE F - STOCKHOLDERS' EQUITY Capital Stock The Company is authorized to issue up to 5,250,000 shares of stock of all classes, of which 5,000,000 shares are to be designated Common Stock and 250,000 shares are to be designated Preferred Stock. The Company's Common Stock has no par value. The Company's Preferred Stock (none outstanding) has a par value of $100 per share. The Company's Preferred Stock may be issued in one or more series, with each series to have distinctive serial designations and such preferences, limitations, and relative rights as shall be permitted by law and established by resolution of the Board of Directors providing for the issue of such Preferred Stock. Each series of Preferred Stock may have the number of shares, voting powers, redemption provisions, dividend rights, liquidation preferences, convertibility features, and sinking fund entitlements as shall be set forth in such Board resolution. On July 31, 1991, the Board of Directors authorized 100,000 shares of voting Series A Junior Participating Cumulative ($300 per share semi-annually) Preferred Stock pursuant to the Shareholder Rights Plan discussed below. The issuance of Preferred Stock may have the effect of delaying, deferring, or preventing a change in control of the Company without any further action by holders of the Company's Common Stock and may adversely affect the rights of existing stockholders. Stock Options The Company has elected to follow Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to Employees" (APB 25) in accounting for its employee stock options. In electing to account for its stock options under APB 25, the Company is required by SFAS No. 123, "Accounting for Stock-Based Compensation" to provide pro forma information regarding net income and earnings per share. Under the Company's Stock Option Plan selected employees of the Company may be granted options to purchase Common Stock. Such options may be designated Incentive Stock Options, as defined under the Internal Revenue Code, or Nonstatutory Stock Options at the time the option is granted. The exercise price of the options may not be less than 100% of the fair market value of the Company's Common Stock on the date of grant of such options, and the options must be exercised within ten years. Other terms of the options will be determined at the date of grant. The termination of the Stock Option Plan does not effect the validity of options outstanding on the date of termination. The options are exercisable two years from the date of grant. At March 31, 2001, the weighted average remaining contractual life of the options is 6.1 years. The Company had 115,000, 117,500 and 40,000 shares which were exercisable at March 31, 2001, 2000 and 1999, respectively. At March 31, 2001, the weighted average exercise price of those shares is $4.91. The following is a summary of transactions for the Stock Option Plan:

The fair value of each stock option granted in fiscal 2001 and 2000 is estimated using the Black-Scholes option model with the following weighted average assumptions for both years: dividend yield of 2% and expected lives of eight years. The weighted average risk free interest rate was 4.93% in fiscal 2001 and 6.72% in fiscal 2000. The expected volatility is 7.48% in fiscal 2001 and 8.11% in 2000. The weighted average fair value of options granted is $1.14 and $1.90 in fiscal 2001 and 2000, respectively. Had compensation cost for the Company's stock options been determined based on the fair value at the grant dates for awards consistent with the method of SFAS No. 123, the Company's pro forma net income would have decreased by $5,000, or $.00 per share for the year ended March 31, 2001 and $50,000 or $.02 for the year ended March 31, 2000. No stock options were issued during the year ended March 31, 1999. Shareholder Rights Plan On July 31, 1991, the Board of Directors adopted a Shareholder Rights Plan ("Rights Plan") and declared a dividend of one Right for each outstanding share of Common Stock. Under the terms of the Rights Plan, the Rights will be exercisable only if a person, group or other entity that was not a 10% shareholder as of July 1, 1991, becomes a 15% or more shareholder. Each Right will entitle the holder, upon payment of the exercise price of $29.50, to acquire one ten-thousandths of a share (a "unit") of Series A Junior Participating Cumulative Preferred Stock. Each unit has the same voting rights as one share of Common Stock. At the discretion of the Board of Directors, the Company will be entitled to redeem the Rights for $.01 per Right at any time before announcement that a 15% position has been acquired, and for 10 days after the announcement. If the Rights have not been redeemed, and any person, group or entity becomes a 20% or more shareholder, each Right will entitle the holder, except the acquiring person, group, or entity, upon payment of the exercise price, to acquire Preferred Stock or Common Stock at the option of the Company, each having a value equal to twice the Right's exercise price. Also, if the Company were acquired in a merger or other business combination by such persons, group or entity, or if 50% of its earning power or assets were sold in one transaction or series of transactions, each Right would entitle the holder, except the acquiring person, group or entity, to purchase securities of the surviving company having a market value equal to twice the Right's exercise price. The Rights will expire on July 31, 2001 unless previously exercised or redeemed by the Board of Directors. On April 30, 2001 the Board of Directors amended the Shareholder Rights Plan to exempt any transaction undertaken by Smithfield Foods, Inc. from triggering the Rights described above. See Footnote J, Subsequent Event, for details on the proposed acquisition by Smithfield Foods, Inc. NOTE G - EMPLOYEE BENEFIT PLANS Profit Sharing Plan The Company's profit sharing plan is a voluntary, defined contribution plan which covers virtually all employees. The Company may contribute annually up to a certain percentage of employee compensation to the plan. The Company makes contributions to the plan based on 50% of the participants' contributions, which can range from 1% to 6% of their total compensation subject to certain limitations. Company matching contributions to the 401(k) plan were $43,130, $44,534 and $45,240 for the years ended March 31, 2001, 2000 and 1999, respectively. Employee Stock Ownership Plan The Company's Employee Stock Ownership Plan "the Plan" covers all employees who have attained the required minimum age and length of service, except those covered by a collective bargaining agreement. Contributions to the Plan, which will be invested in the Company's Common Stock, are made as determined by the Board of Directors and are limited to certain percentages of the eligible employees' compensation. The Company contributed $55,000, $55,000 and $50,000 into the Plan for the years ended March 31, 2001, 2000 and 1999, respectively. NOTE H - INCOME TAXES Significant components of the Company's deferred tax assets as of March 31, 2001 and 2000 are as follows:

The provision for income taxes varies from that computed using federal statutory rates of 34%, as follows:

The Company made income tax payments of $270,756 in 2001, $543,022 in 2000 and $593,534 in 1999. NOTE I - OTHER FINANCIAL INFORMATION Commitments and Contingencies Employment agreements have been established with certain officers of the Company. These agreements include clauses relating to salary and severance. The Company also has incentive arrangements with certain officers of the Company. Leases The Company's operating leases consist primarily of retail facilities, some of which contain escalation clauses and renewal options for up to five years. At March 31, 2001 aggregate minimum rental commitments under non-cancelable operating leases having remaining terms of more than one year were $413,000 and are payable as follows: 2002, $150,000; 2003, $137,000; 2004, $63,000; 2005, $36,000; 2006, $27,000. Contingent rentals relate to retail sales space based on gross sales. Rent expense is summarized as follows: For the Year Ended March 31 2001 2000 1999 ---- ---- ---- Minimum rentals..... $151,525 $147,884 $150,715 Contingent rentals.. 26,472 27,358 26,048 -------- -------- -------- TOTAL $177,997 $175,242 $176,763 ======== ======== ======== Related Party Transactions A member of the Board of Directors is a partner with the Company's law firm. The Company paid $13,012, $5,199 and $7,397 to the law firm in 2001, 2000 and 1999, respectively. Another member of the Board of Directors is chairman of a company which supplied packaging materials to the Company in the amount of $10,157, $10,779 and $14,488 in 2001, 2000 and 1999, respectively. The Company invested $158,381 at March 31, 2001 and $80,000 at March 31, 2000 in the Common Stock of TowneBank (the Bank). The Company's President and CEO is on the Board of Directors of the Bank and a member of the Company's Board of Directors is President and Senior Loan Officer of the Bank. In addition the Company purchased a Certificate of Deposit (CD) from the Bank, which had a balance of $1,022,925 at March 31, 2001 and $1,038,529 at March 31, 2000. Earnings on the CD amounted to $55,428 and $50,705 for the years ended March 31, 2001 and 2000, respectively. Note J - Subsequent Event On April 30, 2001 The Smithfield Companies, Inc. signed a definitive merger agreement that calls for Smithfield Foods, Inc. to acquire all of the outstanding common stock of the Company for $8.50 per share. Completion of the merger is subject to customary conditions, including approval by the holders of more than two-thirds of the outstanding shares of common stock. Shareholders holding approximately 77% of the outstanding shares have agreed to vote in favor of the merger. The merger is expected to be completed during the Company's second quarter of fiscal 2002. The Company's board of directors has unanimously approved the merger agreement. In entering into the definitive merger agreement, the board of directors took all necessary action under the Company's shareholder rights plan to provide that the acquisition can be completed without causing outstanding rights to become exercisable. If this merger agreement is not consummated and the reason is the willful failure by the Company to fulfill its obligations under the agreement, then the Company could be assessed a termination fee of $1,000,000 plus out-of-pocket expenses incurred by Smithfield Foods in connection with this agreement. [PricewaterhouseCoopers Letterhead] REPORT OF INDEPENDENT ACCOUNTANTS Shareholders and Board of Directors The Smithfield Companies, Inc. In our opinion, the consolidated financial statements listed in the index appearing under Item 14(a) (1) and (2), present fairly, in all material respects, the financial position of The Smithfield Companies, Inc. and Subsidiaries (the "Company") at March 31, 2001 and 2000, and the results of their operations and their cash flows for each of the three years in the period ended March 31, 2001 in conformity with accounting principles generally accepted in the United States of America. In addition, in our opinion, the financial statement schedule listed in the index appearing under Item 14 (a) (1) and (2), present fairly, in all material respects, the information set forth therein when read in conjunction with the related consolidated financial statements. These financial statements and financial statement schedule are the responsibility of the Company's management; our responsibility is to express an opinion on these financial statements and financial statement schedule based on our audits. We conducted our audits of these statements in accordance with auditing standards generally accepted in the United States of America, which require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. /s/ PricewaterhouseCoopers LLP PricewaterhouseCoopers LLP Virginia Beach, Virginia June 1, 2001 Quarterly Results Of Operations The following table presents quarterly results of operations for the years ended March 31, 2001 and 2000. (In thousands, except per share data) (Unaudited)

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE -- None PART III ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

* Less than 1% (1) There has been no change in principal occupation or employment of any director or executive officer during the past five years. (2) Includes 7,000 shares owned by Mr. Cresimore's wife as to which Mr. Cresimore disclaims beneficial ownership and which Mr. Cresimore's wife has sole voting power and investment power. Includes 10,000 shares subject to presently exercisable stock options. (3) Includes 17,666 shares in which Mr. Fuller had a vested interest pursuant to the Company's Employee Stock Ownership Plan. Includes 35,000 shares subject to presently exercisable stock options. Includes 400 shares owned by Mr. Fuller's wife as to which Mr. Fuller disclaims beneficial ownership and which Mr. Fuller's wife has sole voting power and investment power. (4) Includes 10,000 shares subject to presently exercisable stock options. (5) Includes 9,960 shares owned by Mr. Buhler's wife as to which Mr. Buhler disclaims beneficial ownership and which Mr. Buhler's wife has sole voting power and investment power. Includes 10,000 shares subject to presently exercisable stock options. (6) Includes 14,454 shares in which Mr. Pruden had a vested interest pursuant to the Company's Employee Stock Ownership Plan. Includes 4,000 shares held as custodian under the Uniform Gift to Minors Act. Includes 25,000 shares subject to presently exercisable stock options. ITEM 11. EXECUTIVE COMPENSATION The following table sets forth the annual and long-term compensation for the Company's Chief Executive Officer and its other executive officers whose annual compensation exceeded $100,000 as well as the total compensation paid to each individual for the Company's two previous years. Summary Compensation Table

---------- * Perquisites during the year were not in excess of the lesser of $50,000 and 10% of salary and bonus. There is no other "Other Annual Compensation." (1) These amounts include Company contributions to its Profit Sharing Plan and Employee Stock Ownership Plan allocated to each named executive officer. ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT PRINCIPAL STOCKHOLDERS The only persons known by the Company to own beneficially more than 5% of the Company's Common Stock, the only class of outstanding voting securities of the Company, as of June 15, 2001, are: Name and Address of Amount and Nature of Percent Beneficial Owner Beneficial Ownership of Class ------------------- -------------------- -------- James L. Cresimore 514,236(1) 23.1% P.O. Box 17743 Raleigh, NC 27619 SF Investments, Inc. 428,496 19.2% 1105 North Market Street Wilmington, DE 19899 Peter D. Pruden, III 392,030(2) 17.6% 311 County Street Portsmouth, VA 23704 Richard S. Fuller 377,066(3) 16.9% 311 County Street Portsmouth, VA 23704 Quest Advisory Corp. 148,400 6.7% 1414 Avenue of the Americas New York, NY 10019 (1) Includes 7,000 shares owned by Mr. Cresimore's wife as to which Mr. Cresimore disclaims beneficial ownership and which Mr. Cresimore's wife has sole voting power and investment power. Includes 10,000 shares subject to presently exercisable stock options. (2) Includes 25,000 shares subject to presently exercisable stock options and 4,000 shares held as custodian under the Uniform Gift to Minors Act. In- cludes 14,454 shares in which Mr. Pruden had a vested interest pursuant to the Company's Employee Stock Ownership Plan for which he exercises voting power but does not exercise dispositive power. (3) Includes 35,000 shares subject to presently exercisable stock options and 400 shares owned by Mr. Fuller's wife as to which Mr. Fuller disclaims beneficial ownership and which Mr. Fuller's wife has sole voting power and in- vestment power. Includes 17,666 shares in which Mr. Fuller had a vested inter- est pursuant to the Company's Employee Stock Ownership Plan for which he exer- cises voting power but does not exercise dispositive power. ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS INFORMATION CONCERNING THE BOARD OF DIRECTORS Directors' Fees Directors, who are not employees of the Company, receive $1,100 for each Board meeting attended and $500 for each committee meeting attended. Bernard C. Baldwin, III, a director of the Company, is a partner with the law firm of Edmunds & Williams, the Company's Counsel. Edmunds & Williams was paid $13,012 in fees during the 2001 fiscal year. R. Scott Morgan is President of TowneBank. At March 31, 2001 the Company owned 11,600 shares of TowneBank and had a certificate of deposit invested with the bank in the amount of $1,022,925. The Company earned $55,428 on the CD during the 2001 fiscal year. Committees of the Board of Directors and Meeting Attendance The Board of Directors held four meetings during the year. The committees of the Board of Directors include a Compensation Committee and an Audit Com- mittee. The Board has no nominating Committee. The Compensation Committee includes James L. Cresimore, Chairman and Frank H. Buhler. The committee approves the compensation to be paid to the Company's executive officers and also approves the issuance of stock options under the Company's Stock Option Plan. The committee held two meetings during the year. The Audit Committee includes Frank H. Buhler, Chairman and Bernard C. Bald- win, III. The Committee's primary responsibility is the recommendation to the Board of Directors of a firm to be engaged by the Company as its independent public accountants and to review the results of the independent accountants' examination and recommendations with respect to accounting practices and pro- cedures and internal control. The Committee held one meeting during the year. All Directors of the Company attended at least 75% of all meetings of the Board and of Committees of the Board on which they served. Compensation Committee Interlocks and Insider Participation James L. Cresimore, Chairman of the Board of the Company, serves on the Compensation Committee. Mr. Cresimore is not an employee, nor does he receive a salary (other than director's fees) from the Company. Frank H. Buhler, a director of the Company is Chairman and C.E.O. of Old Dominion Box Co. which supplies packaging materials to the Company. Old Domin- ion Box Co. received $10,157 from the Company during the 2001 fiscal year. The Company believes the terms of these arrangements are competitive with those available from unaffiliated vendors and are in the normal course of business. Employment agreements The Company has employment agreements, dated June 7, 1988 with Richard S. Fuller and Peter D. Pruden, III. These employment agreements are initiated only if an individual or entity owns a 24% interest in the Company's Common Stock by direct or beneficial ownership and the employee is still in the employment of the Company. Until a 20% interest in the Company's Common Stock is owned by an individual or entity, Messrs. Fuller and Pruden are at will employees of the Company. If the employment agreement is initiated, the employee will receive a gross annual salary of an amount equal to the highest annual salary ever received by the employee from the Company. The term of the employment agreements are five years from the date they are initiated. In the event of a "change in control" of the Company, the employee may terminate his employment and receive a one time severance pay of three times the employee's annual salary. "Change in control" is defined as (a) the acquisition by a third person or entity of 30% or more of the Company's outstanding shares or (b) a transaction that results in the persons who were directors of the Company before the transaction ceasing to constitute a majority of the Board of Directors of the Company and the Board fails to recommend the transaction to the stockholders of the Company. PART IV ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K (a) (1) and (2) The following consolidated financial statements of The Smithfield Companies, Inc. and subsidiaries appear in Item 8 hereof. Consolidated balance sheets--March 31, 2001 and 2000 Consolidated statements of income--Years ended March 31, 2001, 2000 and 1999 Consolidated statements of cash flows--Years ended March 31, 2001, 2000 and 1999 Consolidated statements of shareholders' equity--Years ended March 31, 2001, 2000, and 1999 Notes to consolidated financial statements--March 31, 2001 (3) Exhibits: 3.1 Amended and Restated Articles of Incorporation. Filed August 9, 1988, as Exhibit 3.1 to the Registrant's Form S-1, and incorporated herein by reference. 3.2 Bylaws. Filed August 9, l988, as Exhibit 3.2 to the Registrant's Form S-1, and incorporated herein by reference. 4.1 Amended and Restated Rights Agreement, as Exhibit 4.1 to the Registrant's Form 8-K as of July 31, 1991 and amended on Form 8 on August 29, 1991, and incorporated herein by reference. 10.1 Stock Option Plan, executed June 4, l999. Filed June 25, 1999, as EXHIBIT A to the Registrant's proxy statement, and is incorporated herein by reference. 10.2 Employment Agreements, dated June 7, 1988, with Richard S. Fuller, Peter D. Pruden, III. Filed August 9, 1988, as Exhibit 10.2 to the Registrant's Form S-1, and incorporated herein by reference. 10.3 Incentive bonus practice. Filed August 9, l988, as Exhibit 10.5 to the Registrant's Form S-1, and incorporated herein by reference. 10.4 Profit Sharing Plan. Filed June 29, 1989 as Exhibit 10.5 to the Registrant's Forms 10-K for the year ended March 31, 1989, and incorporated herein by reference. 10.5 Employee Stock Ownership Plan. Filed June 29, 1989 as Exhibit 10.6 to the Registrant's Form 10-K for the year ended March 31, 1989, and incorporated herein by reference. 21.1 Subsidiaries of the Registrant. Filed June 27, 2000 as Exhibit 21.1 to the Registrant's Form 10-K for the year ended March 31, 2000, and incorporated herein by reference. (b) Reports filed on Form 8-K for the quarter ended March 31, 2001--None (c) The exhibits listed in Item 14(a)(3) are incorporated herein by reference. (d) Schedule I - Valuation and qualifying accounts. SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, Registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized. THE SMITHFIELD COMPANIES, INC. By S/ Richard S. Fuller -------------------------------- Richard S. Fuller, President and Chief Executive Officer Pursuant to the requirements of the Securities and Exchange Act of 1934, this Report has been signed below by the following persons on behalf of the Registrant and in the capacities and dates indicated. Name Capacity Date S/ James L. Cresimore Chairman of the Board June 29, 2001 --------------------------- James L. Cresimore S/ Richard S. Fuller President and Chief June 29, 2001 --------------------------- Executive Officer Richard S. Fuller (Principal Executive Officer) S/ Peter D. Pruden, III Executive Vice June 29, 2001 --------------------------- President, Secretary Peter D. Pruden, III and Director S/ Mark D. Bedard Treasurer and Chief June 29, 2001 --------------------------- Financial Officer Mark D. Bedard (Principal Financial Officer and Principal Accounting Officer) S/ Bernard C. Baldwin,III Director June 29, 2001 --------------------------- Bernard C. Baldwin, III S/ Frank H. Buhler Director June 29, 2001 -------------------- Frank H. Buhler S/ R. Scott Morgan Director June 29, 2001 -------------------- R. Scott Morgan SCHEDULE I -- VALUATION AND QUALIFYING ACCOUNTS THE SMITHFIELD COMPANIES, INC.

(1) Uncollectible accounts written off, net of recoveries.

SMITHFIELD COMPANIES INC 10-K