Campbell Reports Second Quarter Earnings Per Share of $.57 on Strong Sales Growth Driven by U.S. Soup.Business Editors CAMDEN Camden, borough, Greater London, England Camden, inner borough (1991 pop. 170,500) of Greater London, SE England. Within the borough, residential Hampstead is popular with writers and artists. , N.J.--(BUSINESS WIRE)--Feb. 23, 2004 Campbell Soup Company Campbell Soup Company (NYSE: CPB) (also known as Campbell's) is a well-known American producer of canned soups and related products. Campbell's products are sold in 120 countries around the world. It is headquartered in Camden, New Jersey. (NYSE NYSE See: New York Stock Exchange :CPB CPB see cardiopulmonary bypass. CPB Cardiopulmonary bypass. See Port-Access cardiopulmonary bypass. ) today reported diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of for the second quarter ended February February: see month. 1, 2004 of $.57 compared to $.56 recorded in the year-ago quarter. For the second quarter, net sales Net Sales The amount a seller receives from the buyer after costs associated with the sale are deducted. Notes: This amount is calculated by subtracting the following items from gross sales: merchandise returned for credit, allowances for damaged or missing goods, freight rose 9 percent to $2.1 billion, driven by the following: -- Volume and mix increased 3 percent -- Price added 2 percent -- Increased promotional spending subtracted 1 percent -- Currency added 5 percent Net earnings for the second quarter of fiscal 2004 were $235 million versus $231 million a year earlier. Diluted earnings per share for the first six months were $1.08, up 5 percent versus $1.03 a year ago, before the cumulative effect of accounting change. In fiscal 2003, the company recognized a one-time one-time adj. 1. or one·time a. Occurring or undertaken only once: a one-time winner in 1995. b. non-cash goodwill impairment Impairment 1. A reduction in a company's stated capital. 2. The total capital that is less than the par value of the company's capital stock. Notes: 1. This is usually reduced because of poorly estimated losses or gains. 2. charge of $31 million after taxes, or 8 cents per share Cents per share The amount of a mutual fund's dividend or capital gains distributions that a shareholder will receive for each share owned. , related to the adoption of SFAS SFAS Statement of Financial Accounting Standards SFAS Special Forces Assessment and Selection SFAS Student Financial Aid Services SFAS Sport Fishing Association of Singapore SFAS Safety Features Actuation System SFAS Statewide Fixed Assets System No. 142. Net sales were $4.0 billion for the first six months, an increase of 11 percent compared with the year-ago period, reflecting the following factors: -- Volume and mix increased 3 percent -- Price added 2 percent -- Currency added 5 percent -- Acquisitions contributed 1 percent For the first half of fiscal 2004, the company reported net earnings of $446 million versus $423 million a year earlier before the cumulative effect of accounting change. Douglas Douglas, city, Isle of Man Douglas, city (1991 pop. 19,950), capital of the Isle of Man, Great Britain. It is a popular resort, connected by rail to Ramsey and Port Erin, on the Irish Sea. Tourism is the chief industry. R. Conant Co·nant , James Bryant 1893-1978. American educator who was president of Harvard University (1933-1953) and served as ambassador to West Germany (1955-1957). , Campbell's President and Chief Executive Officer, said, "We again delivered solid financial performance in the quarter. We are successfully executing our highest strategic priority of revitalizing re·vi·tal·ize tr.v. re·vi·tal·ized, re·vi·tal·iz·ing, re·vi·tal·iz·es To impart new life or vigor to: plans to revitalize inner-city neighborhoods; tried to revitalize a flagging economy. our U.S. soup business. We continue to generate excellent growth in our ready-to-serve soups and we are encouraged by the improved performance of our condensed con·dense v. con·densed, con·dens·ing, con·dens·es v.tr. 1. To reduce the volume or compass of. 2. To make more concise; abridge or shorten. 3. Physics a. soups. Across the broader portfolio, we see many examples of strong marketplace performance, including 'V8' beverages and 'Pepperidge Farm' in the U.S. and 'Arnott's' in Australia Australia (ôstrāl`yə), smallest continent, between the Indian and Pacific oceans. With the island state of Tasmania to the south, the continent makes up the Commonwealth of Australia, a federal parliamentary state (2005 est. pop. ." Conant added, "Our strategy to drive improved top-line growth through investments in higher quality products and packaging, convenience, and integrated marketing is clearly paying off. Looking ahead, we will focus on continuing this top-line momentum, while improving our margin structure." Consistent with earlier guidance, the company expects earnings per share of approximately $1.58 for fiscal 2004. In fiscal 2003, the company reported earnings per share of $1.52 before the cumulative effect of accounting change. For the third quarter of 2004, the company expects earnings per share to be approximately $.31. A summary of second quarter and first half segment results follows. North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. Soup and Away From Home North America Soup and Away From Home sales increased 8 percent to $894 million in the quarter compared to the year-ago period, driven by strong volume and mix increases, offset by increased promotional spending. Operating earnings Operating Earnings Profits after subtracting expenses such as marketing, cost of goods sold, administration and general operating costs from revenue. Notes: Tax and interest expenses are not subtracted - operating earnings are synonymous with EBIT (earnings before of $220 million were up 5 percent. Sales for the quarter break down as follows: -- Volume and mix increased 5 percent -- Price added 3 percent -- Increased promotional spending subtracted 2 percent -- Currency added 2 percent Further details include the following: -- Ready-to-serve soup sales increased 17 percent for the quarter on shipment growth of 17 percent. This strong performance was driven by significantly enhanced promotional activity behind "Campbell's Chunky chunk·y adj. chunk·i·er, chunk·i·est 1. Short and thick; stocky. 2. Containing small thick pieces: chunky peanut butter; chunky soup. " canned soups Canned soup is soup that comes packaged in a can. It can be condensed, in which case it is prepared by adding water (or sometimes milk), or it can be ready-to-eat, meaning that it only needs to be warmed. Canned soup can be prepared by heating in a pan or in the microwave. , as well as the continued positive impact of the "M'm! M'm! Good! To Go" convenience platform, which includes "Chunky" and "Select" microwaveable bowls and "Soup At Hand," a line of convenient sippable soups designed for out-of-home consumption. -- Condensed soup sales were even with a year ago as higher prices offset a 2 percent decline in shipments during the quarter. "Campbell's" Chicken Noodle soup Noodle soup refers to a variety of dishes with noodles served in stock and other ingredients. The dish is an Asian staple. Varieties China and Taiwan There are a myriad of noodle soup dishes originating in China, and many of these are eaten in, or adapted in achieved particularly strong shipment growth in the quarter, offset by declines in cooking soups. -- Broth broth liquid media for culturing microorganisms. cooked meat broth a medium useful for culturing anaerobic bacteria. enrichment broth one modified to permit growth by selected bacteria. sales declined 1 percent, as shipment growth of 1 percent was more than offset by higher promotional spending. For the first half of fiscal 2004, sales increased 8 percent to $1.7 billion with currency contributing 2 percentage points of the growth. Operating earnings increased 7 percent to $441 million, compared to the year-ago period. North America Sauces and Beverages North America Sauces and Beverages sales rose 2 percent to $324 million in the quarter and operating earnings decreased 14 percent to $72 million, due to higher costs of packaging and ingredients, quality improvements and unfavorable product mix. Sales for the quarter break down as follows: -- Volume and mix increased 5 percent -- Increased promotional spending subtracted 3 percent Further details include the following: -- Strong sales gains in beverages were generated by effective marketing programs and new product introductions. -- "Pace" Mexican Mexican named after or originating in Mexico. Mexican axolotl see ambystomamexicanum. Mexican beaded lizard (Heloderma horridum sauce sales were solid, particularly around the Super Bowl. -- Sales of "Prego Prego® is a trade mark brand name pasta sauce of Campbell Soup Company. It was introduced in 1981 internationally and is based on a family recipe of one of the chefs. Eventually they became the number one selling dry grocery product of the decade. " pasta While the only basic difference between these names is the shape of the pasta, each pasta is typically matched with a particular sauce based on cooking time, consistency, ability to hold sauce, ease of eating, etc. sauce declined slightly due in part to the continued softness in the pasta category. For the first half of fiscal 2004, sales rose 4 percent to $651 million compared to the year-ago period. Operating earnings declined 7 percent to $150 million, due to higher costs of packaging and ingredients, quality improvements and unfavorable product mix. Biscuits and Confectionery confectionery, delicacies or sweetmeats that have sugar as a principal ingredient, combined with coloring matter and flavoring and often with fruit or nuts. In the United States it is usually called candy, in Great Britain, sweets or boiled sweets. Biscuits and Confectionery sales increased 13 percent to $550 million in the quarter and operating earnings rose 3 percent to $90 million. Sales for the quarter break down as follows: -- Volume and mix increased 2 percent -- Price increases added 3 percent -- Increased promotional spending subtracted 1 percent -- Currency added 9 percent Currency contributed 6 percentage points of the growth in operating earnings during the quarter. In the year-ago period, operating earnings were favorably fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. impacted by an $8 million gain on the sale of a biscuit biscuit, n the firing bakes, or stages (referred to as low, medium, and high), during the fusing of dental porcelain preceding the final, or glaze, bake. biscuit in dogs, a grayish-yellow coat color. plant in Australia. Further details include the following: -- Pepperidge Farm Pepperidge Farm was founded in 1937 by Margaret Rudkin, who named the brand for a property her family owned in Connecticut (which itself was named for the pepperidge tree, Nyssa sylvatica). In 1961, the company was purchased by Campbell's. delivered strong sales growth in cookies, crackers, and bread, while frozen products declined. The cookie cookie File or part of a file put on a Web user's hard disk by a Web site. Cookies are used to store registration data, to make it possible to customize information for visitors to a Web site, to target Web advertising, and to keep track of the products a user wishes to business grew behind the introduction of Minis, smaller versions of Pepperidge pepperidge: see black gum. Farm's most popular cookies, and particularly strong sales during the holiday season. Bread sales increased due to distribution gains in the mass merchandise channel. -- Godiva Chocolatier's worldwide sales increased, behind continued strong growth in Asia. Same store sales Same Store Sales A statistic used in retail industry analysis. It compares sales of stores that have been open for a year or more. Notes: This statistic allows investors to determine what portion of new sales has come from sales growth and what portion from the opening of trends in North America also improved in the quarter. -- Sales of "Arnott's" biscuits in Australia increased significantly in the quarter, driven by strong performance of "Shapes," Australia's #1 snack cracker (1) A person who breaks into a computer system without authorization, whose purpose is to do damage (destroy files, steal credit card numbers, plant viruses, etc.). Because a cracker uses low-level hacker skills to do cracking, the terms "cracker" and "hacker" have become , and chocolate varieties. For the first half of fiscal 2004, sales rose 16 percent to $1.0 billion compared to the year-ago period, with currency contributing 8 percentage points of the growth. Operating earnings increased 5 percent, with currency contributing 8 percentage points of the growth. International Soup and Sauces International Soup and Sauces sales rose 14 percent to $332 million and operating earnings increased 15 percent to $39 million in the quarter. Sales for the quarter break down as follows: -- Volume and mix decreased 2 percent -- Price added 1 percent -- Reduced promotional spending added 1 percent -- Currency added 15 percent -- Divestiture The breakup of AT&T. By federal court order, AT&T divested itself on January 1, 1984 of its 23 operating companies, which became known as the Regional Bell Operating Companies (RBOCs). subtracted 1 percent Operating earnings growth was driven by favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. currency. Further details include the following: -- In Europe Europe (y  r`əp), 6th largest continent, c.4,000,000 sq mi (10,360,000 sq km) including adjacent islands (1992 est. pop. 512,000,000). , branded sales grew for the second straight quarter
led by strong performance in Germany Germany (jûr`mənē), Ger. Deutschland, officially Federal Republic of Germany, republic (2005 est. pop. 82,431,000), 137,699 sq mi (356,733 sq km). and France, offsetting private label declines. In Germany, new single serve pouches of "Erasco" soups performed well. In France, "Liebig Lie·big , Baron Justus von 1803-1873. German chemist who made a number of contributions to organic chemistry and pioneered laboratory-based scientific education (1826). " aseptic aseptic /asep·tic/ (-tik) free from infection or septic material. a·sep·tic adj. Of, relating to, or characterized by asepsis. soups had strong sales during the quarter. -- In Asia Pacific, sales growth was driven by soup, broth and "V8" beverages. For the first half of fiscal 2004, sales increased 16 percent to $618 million, compared to the year-ago period. Currency contributed 14 percentage points of the sales growth. Operating earnings increased 23 percent to $74 million compared to the year-ago period with currency contributing 15 percentage points of the growth. Conference Call The company will host a conference call to discuss these results on February 23, 2004 at 10:00 a.m. Eastern Standard Time. U.S. participants may access the call at 1-800-857-5156 and non-U non-U adj. Chiefly British Not characteristic of the upper class, especially in language usage. [non- + U2. .S. participants at 1-630-395-0021. Participants should call at least five minutes prior to the starting time Noun 1. starting time - the time at which something is supposed to begin; "they got an early start"; "she knew from the get-go that he was the man for her" commencement, get-go, offset, outset, showtime, start, kickoff, beginning, first . The passcode is Campbell Campbell, city, United States Campbell, city (1990 pop. 36,048), Santa Clara co., W Calif., in the fertile Santa Clara valley; founded 1885, inc. 1952. Soup and the conference leader is Len Griehs. The call will also be broadcast live over the Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the at http://www.campbellsoupcompany.com and can be accessed by clicking on the Webcast banner. A recording of the call will be available approximately two hours after it is completed through midnight February 27, 2004 at 1-888-562-6139 or 1-402-280-9979. Forward-Looking Statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. This release contains "forward-looking statements" which reflect the company's current expectations about its future plans and performance, including statements concerning the impact of marketing investments and strategies, new product introductions, and quality improvements on sales and earnings. These forward-looking statements rely on a number of assumptions and estimates which could be inaccurate and which are subject to risks and uncertainties. Actual results could vary materially from those anticipated or expressed in any forward-looking statement made by the company. Please refer to the company's most recent Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. and subsequent filings for a further discussion of these risks and uncertainties. The company disclaims any obligation or intent to update the forward-looking statements in order to reflect events or circumstances CIRCUMSTANCES, evidence. The particulars which accompany a fact. 2. The facts proved are either possible or impossible, ordinary and probable, or extraordinary and improbable, recent or ancient; they may have happened near us, or afar off; they are public or after the date of this release. About Campbell Soup Company Campbell Soup Company is a global manufacturer and marketer of high quality soup, sauce, beverage, biscuit, confectionery and prepared food products. The Company is 135 years old, with nearly $7 billion in annual sales and a portfolio of more than 20 market-leading brands. In North America, leading brands include "Campbell's" soups, "Swanson" broths, "Pepperidge Farm" cookies, crackers, breads and frozen products, "V8" vegetable juices Vegetable juice is a popular drink all over the world. Vegetable juice is an alternative to fruit juice. Most commercial brands do however contain a large amount of sodium. If making vegetable juice at home, a juicer that can process vegetables will be needed. , "V8 Splash" juice beverages, "Pace" Mexican sauces, "Prego" pasta sauces, and "Franco-American Fran·co-A·mer·i·can n. An American of French or French-Canadian descent. adj. 1. Of or relating to the Franco-Americans. 2. " canned pastas and gravies. In Europe, leading brands include "Erasco" soups in Germany and "Liebig" soups in France, and several dry soup and sauce brands: "Batchelors For unrelated subjects with similar spelling see Bachelor. Batchelors is a brand of predominantly dried food products. The company makes instant soup, in particular Cup A Soup and noodle products such as Super Noodles. ," "Oxo," "Lesieur," "Royco," "Liebig," "Heisse Tasse," "Bla Band," "Erin Erin (ĕr`ĭn, ēr`–), ancient and poetic name of Ireland. ," and "McDonnells." Additional European European emanating from or pertaining to Europe. European bat lyssavirus see lyssavirus. European beech tree fagussylvaticus. European blastomycosis see cryptococcosis. brands include "Homepride" sauces and "Fray Bentos Fray Bentos (frī`bān`tōs), city (1996 pop. 22,577), capital of Río Negro dept., SW Uruguay, a port on the Uruguay River. It was founded in 1859 as Independencia and renamed for an 18th-century religious hermit of the region. " canned meats in the United Kingdom, and "Devos Devos, De Vos or deVos is the surname of
adj. Employed for or involving a standard number of hours of working time: a full-time administrative assistant. full employees worldwide. For more information on the company, visit Campbell's website on the Internet at www.campbellsoupcompany.com.
CAMPBELL SOUP COMPANY CONSOLIDATED
STATEMENTS OF EARNINGS (unaudited)
(millions, except per share amounts)
THREE MONTHS ENDED
--------------------------
February January
1, 2004 26, 2003
------------ ------------
Net sales $ 2,100 $ 1,918
------------ ------------
Costs and expenses
Cost of products sold 1,212 1,056
Marketing and selling
expenses 340 329
Administrative expenses 136 128
Research and development
expenses 21 21
Other expenses 2 (1)
------------ ------------
Total costs and expenses 1,711 1,533
------------ ------------
Earnings before interest and taxes 389 385
Interest, net 42 46
------------ ------------
Earnings before taxes 347 339
Taxes on earnings 112 108
------------ ------------
Net earnings $ 235 $ 231
============ ============
Per share - basic
Net earnings $ .57 $ .56
============ ============
Dividends $ .1575 $ .1575
============ ============
Weighted average shares outstanding - basic 411 411
============ ============
Per share - assuming dilution
Net earnings $ .57 $ .56
============ ============
Weighted average shares outstanding
- assuming dilution 412 411
============ ============
Certain reclassifications were made to prior year financial
statements.
CAMPBELL SOUP COMPANY CONSOLIDATED
STATEMENTS OF EARNINGS (unaudited)
(millions, except per share amounts)
SIX MONTHS ENDED
--------------------------
February January
1, 2004 26, 2003
------------ ------------
Net sales $ 4,009 $ 3,623
------------ ------------
Costs and expenses
Cost of products sold 2,320 2,027
Marketing and selling
expenses 633 603
Administrative expenses 259 236
Research and development
expenses 42 40
Other expenses 12 2
------------ ------------
Total costs and expenses 3,266 2,908
------------ ------------
Earnings before interest and taxes 743 715
Interest, net 85 91
------------ ------------
Earnings before taxes 658 624
Taxes on earnings 212 201
------------ ------------
Earnings before cumulative
effect of accounting change 446 423
Cumulative effect of accounting change - (31)
------------ ------------
Net earnings $ 446 $ 392
============ ============
Per share - basic
Earnings before cumulative
effect of accounting change $ 1.08 $ 1.03
Cumulative effect of accounting change - (.08)
------------ ------------
Net earnings $ 1.08 $ .95
============ ============
Dividends $ .315 $ .315
============ ============
Weighted average shares outstanding - basic 411 411
============ ============
Per share - assuming dilution
Earnings before cumulative
effect of accounting change $ 1.08 $ 1.03
Cumulative effect of accounting change - (.08)
------------ ------------
Net earnings $ 1.08 $ .95
============ ============
Weighted average shares outstanding
- assuming dilution 412 411
============ ============
In connection with the adoption of Statement of Financial Accounting
Standards No. 142 "Goodwill and Other Intangible Assets," the company
recognized a non-cash charge of $31 (net of a $17 tax benefit) as a
cumulative effect of accounting change for the write-down of goodwill
of one business unit in the first quarter of fiscal 2003.
Certain reclassifications were made to prior year financial
statements.
CAMPBELL SOUP COMPANY CONSOLIDATED
SUPPLEMENTAL SCHEDULE OF SALES AND EARNINGS (unaudited)
(millions, except per share amounts)
THREE MONTHS ENDED
------------------
February January Percent
Sales 1, 2004 26, 2003 Change
----- -------- -------- -------
Contributions:
North America Soup and Away
From Home $ 894 $ 824 8%
North America Sauces and
Beverages 324 318 2%
Biscuits and Confectionery 550 486 13%
International Soup and
Sauces 332 290 14%
-------- --------
Total sales $ 2,100 $ 1,918 9%
======== ========
Earnings
--------
Contributions:
North America Soup and Away
From Home $ 220 $ 209 5%
North America Sauces and
Beverages 72 84 -14%
Biscuits and Confectionery 90 87 3%
International Soup and
Sauces 39 34 15%
-------- --------
Total operating earnings 421 414 2%
Unallocated corporate expenses (32) (29)
-------- --------
Earnings before interest and
taxes 389 385 1%
Interest, net (42) (46)
Taxes on earnings (112) (108)
-------- --------
Net earnings $ 235 $ 231 2%
======== ========
Net earnings per share -
assuming dilution $ .57 $ .56 2%
======== ========
CAMPBELL SOUP COMPANY CONSOLIDATED
SUPPLEMENTAL SCHEDULE OF SALES AND EARNINGS (unaudited)
(millions, except per share amounts)
SIX MONTHS ENDED
------------------
February January Percent
Sales 1, 2004 26, 2003 Change
----- -------- -------- -------
Contributions:
North America Soup and Away
From Home $ 1,699 $ 1,570 8%
North America Sauces and
Beverages 651 625 4%
Biscuits and Confectionery 1,041 896 16%
International Soup and
Sauces 618 532 16%
-------- --------
Total sales $ 4,009 $ 3,623 11%
======== ========
Earnings
--------
Contributions:
North America Soup and Away
From Home $ 441 $ 414 7%
North America Sauces and
Beverages 150 161 -7%
Biscuits and Confectionery 136 129 5%
International Soup and
Sauces 74 60 23%
-------- --------
Total operating earnings 801 764 5%
Unallocated corporate expenses (58) (49)
-------- --------
Earnings before interest and
taxes 743 715 4%
Interest, net (85) (91)
Taxes on earnings (212) (201)
-------- --------
Earnings before cumulative
effect of accounting
change 446 423 5%
Cumulative effect of
accounting change - (31)
-------- --------
Net earnings $ 446 $ 392 14%
======== ========
Net earnings per share before
cumulative effect of
accounting change
- assuming dilution $ 1.08 $ 1.03 5%
======== ========
In connection with the adoption of SFAS No. 142, the company
recognized a non-cash charge of $31 (net of a $17 tax benefit), or
$.08 per share, as a cumulative effect of accounting change for the
write-down of goodwill of one business unit in the first quarter of
fiscal 2003.
CAMPBELL SOUP COMPANY CONSOLIDATED
BALANCE SHEETS (unaudited)
(millions)
February January
1, 2004 26, 2003
---------- ----------
Current assets $ 1,541 $ 1,484
Plant assets, net 1,871 1,757
Intangible assets, net 3,081 2,748
Other assets 303 298
---------- ----------
Total assets $ 6,796 $ 6,287
========== ==========
Current liabilities $ 2,502 $ 3,034
Long-term debt 2,566 2,270
Nonpension postretirement benefits 301 314
Other liabilities 559 430
Shareowners' equity 868 239
---------- ----------
Total liabilities and shareowners' equity $ 6,796 $ 6,287
========== ==========
Total debt $ 3,474 $ 3,627
========== ==========
Cash and cash equivalents $ 41 $ 37
========== ==========
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