Del Monte Foods Company Announces Third Quarter Fiscal 2002 Results.Business Editors SAN FRANCISCO--(BUSINESS WIRE)--May 2, 2002 Del Monte Foods Del Monte Foods (NYSE: DLM) is an American food production and distribution company based in San Francisco, California. It offers canned goods in Del Monte, S&W and Contadina brands, pet foods under Kibbles n' Bits, 9Lives, Pounce, Milk-Bone and several premium brands, Company (NYSE NYSE See: New York Stock Exchange : DLM See ILM. DLM - Distributed Lock Manager on distributed VMS systems. ) announced today adjusted earnings per share for the fiscal 2002 third quarter of $0.21, compared to $0.24 for the same period in fiscal 2001. 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 for the quarter were $343.9 million, compared to $328.7 million for the third fiscal quarter of 2001. Adjusted net income for the quarter was $11.3 million compared to $12.8 million for the same quarter last year. In order to provide comparability among all periods presented, the Company's reported results, prepared using Generally Accepted Accounting Principles The standard accounting rules, regulations, and procedures used by companies in maintaining their financial records. Generally accepted accounting principles (GAAP) provide companies and accountants with a consistent set of guidelines that cover both broad accounting (GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). ), have been presented as adjusted to exclude special charges related to plant consolidations, acquisition-related expenses, gains and losses from the change in fair value of interest rate swaps Interest Rate Swap A deal between banks or companies where borrowers switch floating-rate loans for fixed rate loans in another country. These can be either the same or different currencies. and income from the reversal reversal n. the decision of a court of appeal ruling that the judgment of a lower court was incorrect and is reversed. The result is that the lower court which tried the case is instructed to dismiss the original action, retry the case, or is ordered to change its of an accrual accrual, n continually recurring short-term liabilities. Examples are accrued wages, taxes, and interest. for a contingent liability Contingent Liability 1. The possibility of an obligation to pay certain sums dependent on future events. 2. Defined obligations by a company that must be met, but the probability of payment is minimal. Notes: 1. , all of which are non-recurring or non-cash charges Non-Cash Charge A charge off, made by a company against earnings, that does not require an initial outlay of cash. Notes: Non-cash charges are typically against the depreciation, amortization, and depletion accounts on a company's balance sheet. or credits. The amount of the adjustments for each period are detailed in the accompanying ac·com·pa·ny v. ac·com·pa·nied, ac·com·pa·ny·ing, ac·com·pa·nies v.tr. 1. To be or go with as a companion. 2. unaudited Consolidated con·sol·i·date v. con·sol·i·dat·ed, con·sol·i·dat·ing, con·sol·i·dates v.tr. 1. To unite into one system or whole; combine: Statements of Income. "We continue to be pleased with the progress we've we've Contraction of we have. we've have made towards our strategic objectives," said Richard Ri·chard , Joseph Henri Maurice Known as "Rocket." 1921-2000. Canadian hockey player. A right wing for the Montreal Canadiens (1942-1960), he led his team to eight Stanley Cup championships and was the first player to score 50 goals in a G. Wolford Wolford, located in Austria, is a marketer and manufacturer of hosiery and lingerie. In the late 1990s, it ran a famous campaign featuring the work of Helmut Newton. External links
Adj. 1. fast-growing - tending to spread quickly; "an aggressive tumor" strong-growing, aggressive high margin market segments of our business. We have also continued to make excellent progress toward our goal to reduce debt and delever our company. As a result of our inventory reduction efforts, we were able to generate better than anticipated cash flows and prepay pre·pay tr.v. pre·paid, pre·pay·ing, pre·pays To pay or pay for beforehand. pre·pay  ment n. $65 million of
our term loan during the quarter. These lower debt levels combined with
reduced interest rates have resulted in significantly lower interest
expense this year."The increase in net sales for the quarter, when compared to the third quarter of fiscal 2001, was due primarily to the acquisition of S&W and the impact of a July July: see month. 1 retail price increase, net of the impact of higher promotion expenses. Adjusted earnings per share reflect these higher sales, offset by increased marketing investments to support the S&W and SunFresh businesses, new products, increased fixed costs fixed costs, n.pl the costs that do not change to meet fluctuations in enrollment or in use of services (e.g., salaries, rent, business license fees, and depreciation). , as production volumes were reduced to decrease inventory levels in order to reduce debt and lower interest expense, and lower returns on pension assets. On a GAAP basis, the Company announced net sales of $343.9 million and net income of $10.7 million, or $0.20 per share, for the third quarter ended March 31, 2002, compared to net sales of $328.7 million and net income of $10.7 million, or $0.20 per share, in the prior year period. Nine Months Ended March 31, 2002 Adjusted earnings per share were $0.57 for the first nine months of fiscal 2002 compared to $0.61 for the first nine months of fiscal 2001. Adjusted net sales for the first nine months of fiscal 2002 were $1,008.8 million compared to net sales of $949.9 million for the same period last year. Adjusted net income for the first nine months was $30.2 million, compared to $32.0 million for the first nine months of last year. On a GAAP basis, the Company reported net sales of $1,007.5 million and net income of $24.3 million, or $0.46 per share, for the first nine months of fiscal 2002, compared to net sales of $949.9 million and net income of $25.6 million, or $0.49 per share, in the prior year period. Outlook For the full fiscal year 2002, the Company continues to expect top line growth of 2 to 4% and adjusted earnings per share of approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $0.83 to $0.87. As compared to the prior year, adjusted earnings per share are expected to reflect higher sales offset by increased marketing investments in existing products and new products and increased fixed costs, as production volumes were reduced to decrease inventory levels and associated debt. Del Monte Foods Company, with net sales of approximately $1.3 billion in fiscal 2001 (reflecting the impact of EITF EITF Emerging Issues Task Force EITF Edinburgh International Television Festival EITF Europe International Taekwon-Do Federation Issue Nos. 00-14 and 00-25), is the largest producer and distributor of premium quality, branded processed fruit, vegetable vegetable, term originally used for any plant, now the name for many food plants, most of them annuals, and for their edible parts. There is no clear botanical distinction between vegetables and fruits. and tomato products in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. . The Del Monte Monte (Italian, Portuguese and Spanish meaning mount) may refer to various things: Monte is the name of several places: In Brazil
Del Monte Foods will host a live audio webcast to discuss its results and the Company's view of its business and prospects for fiscal 2002 today at 8:00 a.m. PDT PDT abbr. Pacific Daylight Time PDT Pacific Daylight Time PDT n abbr (US) (= Pacific Daylight Time) → hora de verano del Pacífico PDT (11:00 a.m. EDT EDT abbr. Eastern Daylight Time EDT Eastern Daylight Time EDT n abbr (US) (= Eastern Daylight Time) → hora de verano de Nueva York EDT ). The webcast can be accessed at www.delmonte.com. The webcast will be available online at www.delmonte.com until May 9, 2002. This press release contains 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. conveying con·vey tr.v. con·veyed, con·vey·ing, con·veys 1. To take or carry from one place to another; transport. 2. management's expectations as to the future based on plans, estimates and projections at the time the Company makes the statements. Forward-looking statements involve inherent risks and uncertainties and the Company cautions you that a number of important factors could cause actual results to differ materially from those contained in any such forward-looking statement. These factors include, among others: general economic and business conditions; weather conditions; energy costs and availability; crop yields; competition, including pricing and promotional spending levels by competitors COMPETITORS, French law. Persons who compete or aspire to the same office, rank or employment. As an English word in common use, it has a much wider application. Ferriere, Dict. de Dr. h.t. ; raw material costs and availability; high leverage; the loss of significant customers or a substantial reduction in orders from these customers; market acceptance of new products; successful integration of acquired businesses; successful implementation of its capability improvement program; consolidation of processing plants; changes in business strategy or development plans; availability, terms and deployment Installing, setting up, testing and running. This military term, which means the placement of troops and equipment in the field, is widely used with computers as an alternate to the word "implementation. of capital; ability to increase prices; changes in, or the failure or inability to comply with, governmental regulations, including, without limitation, environmental regulations; industry trends, including changes in buying and inventory practices by customers; production capacity constraints CONSTRAINTS - A language for solving constraints using value inference. ["CONSTRAINTS: A Language for Expressing Almost-Hierarchical Descriptions", G.J. Sussman et al, Artif Intell 14(1):1-39 (Aug 1980)]. and other factors. These factors are described in more detail in the Company's filings with the Securities and Exchange Commission, including its annual report on 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. for the fiscal year ended June June: see month. 30, 2001. Investors are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof here·of adv. Of this. hereof Adverb Formal or law of or concerning this Adv. 1. hereof - of or concerning this; "the twigs hereof are physic" . The Company does not undertake to update any of these statements in light of new information or future events.
Del Monte Foods Company
Selected Balance Sheet Data (Unaudited) March 31,
(In millions) 2002
------------
Cash and cash equivalents $ 21.5
Trade accounts receivable, net of allowance 127.1
Inventories 473.8
Total assets 1,144.3
Accounts payable and accrued expenses 288.2
Short-term borrowings 0.2
Long-term debt, including current portion 646.0
Stockholders' equity 50.3
Del Monte Foods Company
Consolidated Statement of Income (Unaudited)
(In millions, except share and per share data)
For the Three Months Ended March 31,
As Adjusted (1) Reported (2)
2002 2001 2002 2001
---------- --------- --------- ---------
Net sales $ 343.9 328.7 (3) $ 343.9 $ 328.7 (3)
Cost of products sold 269.8 257.1 (4) 269.8 257.3
Selling, administrative
and general expenses(5) 43.2 35.0 (3) 43.2 35.0 (3)
Special charges related
to plant consolidation(6) - - 0.1 1.5
Operating income 30.9 36.6 30.8 34.9
Interest expense 15.0 (7) 18.8 13.6 18.8
Loss on financial
instruments - - 1.3 (8) -
Other income (0.3)(9) - (0.4) -
Income before taxes and
extraordinary item 16.2 17.8 16.3 16.1
Provision for taxes 4.9 (10) 5.0 (10) 4.9 5.4
Income before
extraordinary item 11.3 12.8 11.4 10.7
Extraordinary loss,
net of tax benefit (11) - - 0.7 -
Net income available
to common shares $ 11.3 $ 12.8 $ 10.7 $ 10.7
Diluted earnings
per common share $ 0.21 $ 0.24 $ 0.20 $ 0.20
Diluted weighted
average shares 53,039,589 53,014,103 53,039,589 53,014,103
(1) In order to provide comparability among all periods presented,
the Company's reported results have been adjusted to exclude
special charges related to plant consolidation, non-recurring
and non-cash items.
(2) In accordance with Generally Accepted Accounting Principles.
(3) For the three months ended March 31, 2001, $54.7 million of
expenses have been reclassified from selling, administrative
and general expenses to net sales for as adjusted and
reported. This adjustment is in accordance with the EITF
Issues Nos. 00-14 and 00-25 which reclassify certain consumer
and trade sales promotion expenses.
(4) In accordance with purchase accounting rules applied to the
acquisitions of the SunFresh & S&W businesses, inventory was
increased to market value. This inventory step-up resulted in
one-time charges to cost of products sold as the inventory on
hand at the acquisition date was sold. Results, as adjusted,
for the three months ended March 31, 2001 excluded step-up
charges of $0.2 million.
(5) Upon adoption of SFAS 142 on July 1, 2001, intangible assets
with indefinite lives are no longer amortized. Amortization of
these intangibles for the three months ended March 31, 2001
was $0.5 million or $0.01 earnings per share on a diluted
basis.
(6) For the three months ended March 31, 2002 and 2001, special
charges related to plant consolidation include accelerated
depreciation and other restructuring costs related to the
consolidation of certain processing plants.
(7) Excludes a credit to interest expense of $1.4 million
resulting from the release to earnings of a portion of the
swap liability of $5.8 million (as noted in footnote (8)).
Settlements accrued for payment to the swap counterparties
offset this release to earnings.
(8) At January 23, 2002, the fair value of the interest rate swaps
was a loss of $5.8 million, reflecting a change of $1.3
million from the December 31, 2001 fair value loss of $4.5
million. Changes in fair value of the swaps, prior to January
23, 2002, are reflected in the income statement. On January
23, 2002 these swaps were designated as cash flow hedging
instruments under SFAS 133. Changes in the fair value of the
swaps subsequent to the January 23, 2002 designation date are
recorded primarily in accumulated other comprehensive income
in Stockholders' Equity.
(9) For the three months ended March 31, 2002, other income has
been adjusted to exclude $0.7 million related to litigation
expenses in connection with Del Monte's recapitalization
transaction in 1997, a $0.7 million reversal of an accrual
related to a contingent liability no longer required, and $0.1
million due to rounding.
(10)Income taxes, as adjusted, for the three months ended March
31, 2002 and 2001 included the impact of using an annualized
rate of 30.4% and 32.1%, respectively. These rates included
the benefit of net operating losses, other tax adjustments and
reflect the tax effect of the adjustments described in
footnote (1) above.
(11)The extraordinary loss is related to the write-off of
previously capitalized debt issuance costs as a result of debt
prepayments.
Del Monte Foods Company
Consolidated Statement
of Income (Unaudited) For the Nine Months Ended March 31,
(In millions, except share
and per share data) As Adjusted (1) Reported (2)
2002 2001 2002 2001
----------------------------------------------
Net sales $ 1,008.8 (3) $ 949.9 (4) $ 1,007.5 $ 949.9
Cost of products sold 793.3 (5) 738.2 (5) 794.3 739.3
Selling, administrative
and general expenses(7) 125.6 106.1 (4)(6) 125.6 106.2
Special charges related
to plant consolidation(8) - - 1.2 14.0
Operating income 89.9 105.6 86.4 90.4
Interest expense 47.1 (9) 58.3 45.7 58.3
Loss on financial
instruments - - 5.8(10) -
Other (income) expense (0.6)(11) 0.1 (11) (0.7) (4.7)
Income before taxes and
extraordinary item 43.4 47.2 35.6 36.8
Provision for taxes 13.2 (12) 15.2 (12) 10.6 11.2
Income before
extraordinary item 30.2 32.0 25.0 25.6
Extraordinary loss,
net of tax benefit(13) - - 0.7 -
Net income available
to common shares $ 30.2 $ 32.0 $ 24.3 $ 25.6
Diluted earnings
per common share $ 0.57 $ 0.61 $ 0.46 $ 0.49
Diluted weighted
average shares 52,986,208 52,692,344 52,986,208 52,692,344
(1) In order to provide comparability among all periods presented,
the Company's reported results have been adjusted to exclude
special charges related to plant consolidation, non-recurring
and non-cash charges.
(2) In accordance with Generally Accepted Accounting Principles.
(3) Net sales, as adjusted, for the nine months ended March 31,
2002 exclude non-recurring trade promotion costs of an
acquired business.
(4) For the nine months ended March 31, 2001, $172.5 million of
expenses have been reclassified from selling, administrative
and general expenses to net sales for as adjusted and
reported. This adjustment is in accordance with the EITF
Issues Nos. 00-14 and 00-25 which reclassify certain consumer
and trade sales promotion expenses.
(5) In accordance with purchase accounting rules applied to the
acquisitions of the SunFresh and S&W businesses, inventory was
increased to market value. This inventory step-up resulted in
one-time charges to cost of products sold as the inventory on
hand at the acquisition date was sold. Results, as adjusted,
for the nine months ended March 31, 2002 and 2001 excluded
step-up charges of $1.0 million and $1.1 million,
respectively.
(6) Selling, administrative and general expenses for the nine
months ended March 31, 2001 have been adjusted to exclude
indirect expenses related to the acquisition of SunFresh.
(7) Upon adoption of SFAS 142 on July 1, 2001, intangible assets
with indefinite lives are no longer amortized. Amortization of
these intangibles for the nine months ended March 31, 2001 was
$1.5 million or $0.02 earnings per share on a diluted basis.
(8) For the nine months ended March 31, 2002 and 2001, special
charges related to plant consolidation included accelerated
depreciation and other restructuring costs related to the
consolidation of certain processing plants.
(9) Excludes a credit to interest expense of $1.4 million
resulting from the release to earnings of a portion of the
swap liability of $5.8 million (as noted in footnote (10)).
Settlements accrued for payment to the swap counterparties
offset this release to earnings.
(10)At January 23, 2002, the fair value of the interest rate swaps
was a loss of $5.8 million. Changes in fair value of the
swaps, prior to January 23, 2002, are reflected in the income
statement. On January 23, 2002 these swaps were designated as
cash flow hedging instruments under SFAS 133. Changes in the
fair value of the swaps subsequent to the January 23, 2002
designation date are recorded primarily in accumulated other
comprehensive income in Stockholders' Equity.
(11)For the nine months ended March 31, 2002, other income has
been adjusted to exclude $0.7 million related to litigation
expenses in connection with Del Monte's recapitalization
transaction in 1997, a $0.7 million reversal of an accrual
related to a contingent liability no longer required, and $0.1
million due to rounding. For the nine months ended March 31,
2001, the reversal of an accrual for a contingent liability
was excluded from the as adjusted results.
(12)Income taxes, as adjusted, for the nine months ended March 31,
2002 and 2001 included the impact of using an annualized rate
of 30.4% and 32.1%, respectively. These rates included the
benefit of net operating losses, other tax adjustments and
reflect the tax effect of the adjustments described in
footnote (1) above.
(13)The extraordinary loss is related to the write-off of
previously capitalized debt issuance costs as a result of debt
prepayments.
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