Del Monte Foods Company Reports Fiscal 2004 Fourth Quarter and Year-End Results.SAN FRANCISCO San Francisco (săn frănsĭs`kō), city (1990 pop. 723,959), coextensive with San Francisco co., W Calif., on the tip of a peninsula between the Pacific Ocean and San Francisco Bay, which are connected by the strait known as the Golden -- Company Achieves Key Financial and Strategic Objectives and Delivers $271 Million in Debt Reduction in Fiscal 2004 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. ) today announced its financial results for its fiscal year 2004 and fourth quarter of fiscal 2004. Fiscal Year Results The Company reported 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 of $3,129.9 million and net income of $164.6 million, or 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 of $0.78, in its 53-week fiscal year ended May 2, 2004, compared to reported net sales of $2,092.3 million and net income of $133.5 million, or diluted earnings per share of $0.76, in its 52-week fiscal year ended April 27, 2003. Reported income from continuing operations continuing operations Parts of a business that are expected to be maintained as an ongoing segment of an overall business operation. Income and losses from continuing operations are reported separately if any segments have been discontinued during the in fiscal 2004 was $160.7 million, or diluted earnings per share of $0.76, compared to reported income from continuing operations of $130.2 million, or $0.74 diluted earnings per share in fiscal 2003 (1). Adjusting both years for the factors detailed in the tables included at the end of this press release, as adjusted diluted earnings per share were $0.91 in fiscal 2004 (with $0.89 coming from continuing operations), compared to pro forma As a matter of form or for the sake of form. Used to describe accounting, financial, and other statements or conclusions based upon assumed or anticipated facts. The phrase pro forma as adjusted diluted earnings per share of $0.85 in fiscal 2003 (with $0.83 coming from continuing operations). (1) Del Monte Monte (Italian, Portuguese and Spanish meaning mount) may refer to various things: Monte is the name of several places: In Brazil
named after North America. North American blastomycosis see North American blastomycosis. North American cattle tick see boophilusannulatus. StarKist seafood seafood Edible aquatic animals excluding mammals, but including both freshwater and ocean creatures. Seafood includes bony and cartilaginous fishes, crustaceans, mollusks, edible jellyfish, sea turtles, frogs, sea urchins, and sea cucumbers. , North American pet food and pet snacks, U.S. private label soup, College Inn 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. and the U.S. infant feeding businesses (the "Acquired Businesses") of the H. J. Heinz Company H. J. Heinz Company (NYSE: HNZ), commonly known as Heinz, famous for its "57 Varieties" slogan, is a processed food product company with its headquarters in Pittsburgh, Pennsylvania, in the United States of America. (NYSE: HNZ HNZ HJ Heinz Co (stock symbol) ) on December December: see month. 20, 2002. For accounting purposes, the Acquired Businesses are considered the surviving entity and the historical financial statements of the Acquired Businesses now constitute the historical financial statements of the Company. Therefore, fiscal 2003 reported results include the results of operations of Del Monte's 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 businesses only for the period after the December 20, 2002 merger. Reported financial results for periods prior to the merger reflect only the financial results of the Acquired Businesses. Reported results also include certain merger-related expenses and other income, the detail of which is shown in the Company's Combined Statements of Income included with this press release. Fourth Quarter The Company also reported net sales of $915.9 million and net income of $56.6 million, or diluted earnings per share of $0.27, for the 14-week quarter ended May 2, 2004, compared to reported net sales of $756.8 million and net income of $23.5 million, or $0.11 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share, for the 13-week quarter ended April 27, 2003. Reported income from continuing operations was $54.3 million, or $0.26 per diluted share, for the fourth quarter of fiscal 2004, compared to reported income from continuing operations of $25.0 million, or $0.12 per diluted share, in the prior year period. Adjusting both quarters for the factors detailed in the attached tables, as adjusted diluted earnings per share were $0.33 in the fiscal 2004 fourth quarter (with $0.32 coming from continuing operations), compared to $0.21 per diluted share in the fiscal 2003 fourth quarter (all of which was derived de·rive v. de·rived, de·riv·ing, de·rives v.tr. 1. To obtain or receive from a source. 2. from continuing operations). Chairman's Comments "We are pleased with our year end results and the progress we have made in the first full year of operations as the new Del Monte Foods," said Rick 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
"Business performance across the Company was strong in fiscal 2004," added Wolford. "We are making great progress 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. the Pet business, delivering the first year over year increase in revenues and operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. in seven years. We continued to leverage our billion dollar Del Monte brand, as we have successfully re-launched our infant feeding product line. In StarKist Brands, we have continued our successful growth of the value-added val·ue-add·ed adj. Of or relating to the estimated value that is added to a product or material at each stage of its manufacture or distribution: tuna tuna or tunny, game and food fishes, the largest members of the family Scombridae (mackerel family) and closely related to the albacore and bonito. They have streamlined bodies with two fins, and five or more finlets on the back. pouch pouch (pouch) a pocket or sac. abdominovesical pouch one formed by reflection of the peritoneum from the abdominal wall to the anterior surface of the bladder. line which is revitalizing the tuna category. Our unified management team looks forward to continuing this progress in the coming year." Fiscal Year 2004 - Segment Detail
Reported Net Sales Segment Detail
2004 2003
------------- --------------
(In Millions)
Consumer Products $ 2,340.6 $ 1,333.8
Pet Products 789.3 758.5
------------- --------------
Total company $ 3,129.9 $ 2,092.3
============= ==============
The increase in reported net sales for the 2004 fiscal year to $3,129.9 million, from $2,092.3 million in fiscal 2003, primarily reflects the inclusion of sales related to our fruit, vegetable and tomato businesses for a full twelve months in fiscal 2004, compared to an approximate ap·prox·i·mate v. To bring together, as cut edges of tissue. adj. 1. Relating to the contact surfaces, either proximal or distal, of two adjacent teeth; proximate. 2. Close together. four-month post-merger period in fiscal 2003. We also experienced organic sales growth in both our Consumer Products and Pet Products reportable segments. Consumer Products net sales increased to $2,340.6 million from $1,333.8 million. The vast majority of this increase reflects the inclusion of sales related to our fruit, vegetable and tomato businesses as described above. In addition, sales gains in tuna pouch contributed to the increase. Pet Products net sales of $789.3 million reflected an increase of $30.8 million, or 4.1%, from the prior year, due primarily to increased sales of our Kibbles 'n Bits Kibbles 'n Bits is a brand name of dog food manufactured and marketed by Del Monte Foods. It was originally created in 1981 as the first dual textured dog food, having soft chewy pieces as well as hard crunchy ones. In 1995, the brand was acquired by Del Monte. branded products behind improved media support and new product launches, as well as an extra week in fiscal 2004.
Reported Operating Income Segment Detail
2004 2003
------------- ----------------
(In Millions)
Consumer Products $ 252.9 $ 111.8
Pet Products 159.7 147.8
Corporate (34.1) (14.5)
------------- ----------------
Total company $ 378.5 $ 245.1
============= ================
Reported operating income for fiscal 2004 totaled $378.5 million, an increase of $133.4 million, or 54.4%, compared to fiscal 2003. This increase was due primarily to the inclusion of operating income related to our fruit, vegetable and tomato businesses in our Consumer Products reportable segment for a full twelve months in fiscal 2004, compared to an approximate four-month post-merger period of fiscal 2003. Improved volume in our StarKist Brands operating segment and our Pet Products reportable segment also contributed to the increase. These increases were partially offset by higher corporate expense in 2004, largely due to a full year of corporate expense in fiscal 2004, compared with approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. four months in fiscal 2003.
Reported and Pro forma As Adjusted Net Sales Segment Detail
2004 2003
(Pro Forma
(Reported) As Adjusted)
------------- --------------
(In Millions)
Consumer Products $ 2,340.6 $ 2,235.5
Pet Products 789.3 765.9
------------- --------------
Total company $ 3,129.9 $ 3,001.4
============= ==============
Net sales of $3,129.9 million for the year compared to pro forma as adjusted net sales (adjusted for the factors detailed in the attached tables) of $3,001.4 million in fiscal 2003, an increase of $128.5 million or 4.3%. This increase was due in part to the 53rd week, as well as sales growth in fruit, tuna pouch and Kibbles 'n Bits branded products.
As Adjusted and Pro forma As Adjusted Operating Income Segment Detail
2004 2003
(Pro Forma
(As Adjusted) As Adjusted)
------------- --------------
(In Millions)
Consumer Products $ 285.0 $ 258.2
Pet Products 166.6 160.3
Corporate (28.6) (18.3)
------------- --------------
Total company $ 423.0 $ 400.2
============= ==============
Adjusting for the factors detailed in the attached tables, as adjusted operating income for fiscal 2004 totaled $423.0 million, an increase of $22.8 million, or 5.7%, compared to pro forma as adjusted operating income of $400.2 million in fiscal 2003. This increase was largely due to higher volume across all of our operating segments, partially offset by higher commodity, ingredient
An ingredient is something that forms part of a mixture (in a general sense). , packaging costs and corporate expense. Fiscal 2004 - Other Key Item Detail 53-Week Year Fiscal 2004 contained 53 weeks versus 52 weeks in fiscal 2003. The Company estimates the extra week added 2% to sales growth and $0.03 to diluted earnings per share in fiscal 2004. The fiscal 2004 fourth quarter contained 14 weeks versus 13 weeks in the fiscal 2003 fourth quarter. The Company estimates the extra week added 8% to sales growth and $0.03 to diluted earnings per share in the fourth quarter. Capital Expenditures In fiscal 2004, the Company spent $82.7 million on capital projects. Of that total, $31.9 million was related to synergy The enhanced result of two or more people, groups or organizations working together. In other words, one and one equals three! It comes from the Greek "synergia," which means joint work and cooperative action. and integration projects. Cash Flow Cash provided by operating activities, less cash used in investing activities, equaled $271.8 million, which included $81.5 million from the sale of non-strategic assets. The prior year's cash flow is not comparable to the current year due to the occurrence of the merger in December 2002. Debt The cash flow generated throughout the year was used to reduce debt from $1,647.4 million at the end of fiscal 2003, to $1,376.6 million at the end of fiscal 2004. Outlook for Fiscal 2005
Full Year
Expected
2004 2005
--------- ------------------
Reported EPS $ 0.76 $ 0.81 - $0.86
Integration expense per share 0.13 0.06
Impact of 53rd week (est.) (0.03)
---------
$ 0.86 (1)
=========
(1) Represents as adjusted EPS (Encapsulated PostScript) A PostScript file format used to transfer a graphic image between applications and platforms. EPS files contain PostScript code as well as an optional preview image in TIFF, WMF, PICT or EPSI, the latter being an ASCII-only format. , further modified mod·i·fy v. mod·i·fied, mod·i·fy·ing, mod·i·fies v.tr. 1. To change in form or character; alter. 2. to reflect estimated impact of 53rd week The Company also stated that it expects reported fiscal 2005 sales growth of approximately 1% over reported fiscal 2004 (or growth of approximately 3% if the extra week in fiscal 2004 is taken into account). Additionally, the Company announced projected reported diluted earnings per share from continuing operations in fiscal 2005 of approximately $0.81 to $0.86, including an estimated $0.06 of integration expense, compared to $0.76 of reported diluted earnings per share from continuing operations in fiscal 2004, including $0.13 of integration expenses. In addition, fiscal 2004 was benefited by an estimated $0.03 per diluted share for the 53rd week. The Company also expects cash provided by operating activities, less cash used in investing activities, to exceed $200 million in fiscal 2005. The 2005 earnings performance is expected to be driven by increased volume and improved mix, continuing the momentum that began in 2004. The Company expects volume growth will be driven by increased marketing investments against key brand equities, which will be partially funded by cost savings efforts in our overhead structure. In addition, the Company expects to maintain a flat gross margin, in spite of in opposition to all efforts of; in defiance or contempt of; notwithstanding. See also: Spite significant inflationary in·fla·tion·ar·y adj. Of, associated with, or tending to cause inflation: inflationary prices; inflationary policies. Adj. 1. cost increases in commodity, ingredient, packaging and energy costs. These cost increases are planned to be offset by strategic pricing actions, a full year benefit of integration savings, improved trade management and other cost savings. In addition, the Company expects de-leveraging and lower integration expenses will contribute to earnings growth. First Quarter The Company also expects sales growth of approximately 2%, compared to the first quarter of fiscal 2004, and reported diluted earnings per share of approximately $0.03 to $0.05 for the first quarter of fiscal 2005, including approximately $0.01 of integration expense, compared to $0.07 for the first quarter of fiscal 2004, including $0.02 of integration expense. These earnings results are driven by increased sales volume offset by higher commodity, ingredient, packaging and energy cost pressures, as well as higher levels of marketing investment. Del Monte Foods Del Monte Foods is one of the country's largest and most well-known well-known adj. 1. Widely known; familiar or famous: a well-known performer. 2. Fully known: well-known facts. producers, distributors and marketers of premium quality, branded and private label food and pet products for the U.S. retail market, generating over $3 billion in net sales in fiscal 2004. With a powerful portfolio of brands including Del Monte(R), Contadina(R), StarKist(R), S&W(R), Nature's Goodness(TM), College Inn(R), 9Lives(R), Kibbles' n Bits(R), Pup-Peroni(R), Snausages Snausages are a dog treat of small pieces that resemble miniature "pigs in blankets" (in the American sense of sausages wrapped in dough). They come in several different flavors, including "bacon and cheese" and "beef and cheese". (R), and NawSomes! (R), Del Monte products are found in nine out of 10 American American, river, 30 mi (48 km) long, rising in N central Calif. in the Sierra Nevada and flowing SW into the Sacramento River at Sacramento. The discovery of gold at Sutter's Mill (see Sutter, John Augustus) along the river in 1848 led to the California gold rush of households. For more information on Del Monte Foods Company, visit the Company's Web site at www.delmonte.com. Del Monte Foods will host a live audio web cast, accompanied 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. by a slide presentation, to discuss its fiscal 2004 Fourth Quarter and Year-end year-end also year·end n. The end of a year. adj. Occurring or done at the end of the year: a year-end audit. Noun 1. results and its view of its business and prospects for fiscal 2005 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 ) today. The web cast, slide presentation, related reconciliations of non-GAAP financial measures and historical, quarterly pro forma results for fiscal 2003 and 2004 can be accessed at www.delmonte.com/company/investors. The web cast and slide presentation will be available online through July July: see month. 8, 2004. The Company is providing the adjusted and pro forma, as adjusted non-GAAP financial measures because the Company believes these non-GAAP financial measures are useful in developing consistent period-to-period comparisons. This is due, in part, to the fact that on December 20, 2002, the Company merged with certain businesses of H. J. Heinz Company (NYSE: HNZ). For accounting purposes, fiscal 2003 reported results include the results of operations of the fruit, vegetable and tomato business only for the period after the December 20, 2002 merger. Reported financial results for periods prior to the merger reflect only the financial results of the Acquired Businesses. Reported results also include expenses and charges that relate to the merger and other events rather than to the routine operation of the Company's businesses. The Company's adjustments to its GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). and GAAP pro forma results include expenses, gains and losses related to integration and merger-related items, restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). and debt refinancing Refinancing An extension and/or increase in amount of existing debt. . The Company uses the presented non-GAAP financial measures internally to focus management on period-to-period changes in the Company's businesses and believes this information is also helpful to investors. The Company cautions investors that the non-GAAP financial measures presented by the Company are intended to supplement the Company's GAAP and pro forma GAAP results and are not a substitute for such results. 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. The forward-looking statements contained in this press release include statements related to future financial operating results and business plans. Factors that could cause actual results to differ materially from those described in this press release include, among others: general economic and business conditions; cost and availability of commodities, ingredients and other raw materials, including without limitation, steel, grains, meat by-products Meat by-products are ground and cleaned slaughtered meat carcass parts such as necks, feet, undeveloped eggs, bones, heads, and intestines (and a small amount of feathers in the case of chicken meat). , tuna and energy; continuation continuation - continuation passing style of or further increases in current high prices of certain ingredients, commodities and other raw materials, including without limitation, steel, grains, meat by-products, tuna and energy; ability to increase prices and reduce costs; high leverage and ability to service and reduce our debt; costs and results of efforts to improve the performance and market share of the businesses we acquired from Heinz; effectiveness of marketing and trade promotion programs; changing consumer and pet preferences; timely launch and market acceptance of new products; optimization optimization Field of applied mathematics whose principles and methods are used to solve quantitative problems in disciplines including physics, biology, engineering, and economics. of our trade promotion spending and of our distribution network; 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. ; transportation costs; insurance coverage; product liability claims; weather conditions; crop yields; changes in U.S., foreign or local tax laws and rates; foreign currency exchange and interest rate fluctuations; the loss of significant customers or a substantial reduction in orders from these customers; acquisitions, including identification of appropriate targets and successful integration of any acquired business; 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; dependence on co-packers, some of whom may be competitors or sole-source suppliers; changes in, or the failure or inability to comply with, U.S., foreign and local governmental regulations, including environmental regulations; industry trends, including changes in buying, inventory and other business practices by customers; public safety and health issues; and other factors. These factors and other risks and uncertainties are described in more detail, from time to time, 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 April 27, 2003. 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 Financial Results
Selected Balance Sheet Data
May 2, April 27,
2004 2003
--------- ---------
Cash and cash equivalents $ 36.3 $ 42.7
Trade accounts receivable, net of allowance 222.3 222.4
Inventories 823.5 768.0
Total assets 3,459.7 3,544.9
Accounts payable and accrued expenses 427.2 432.4
Short-term borrowings 0.8 0.6
Long-term debt, including current portion 1,375.8 1,646.8
Stockholders' equity 1,128.9 949.4
Selected Cash Flow Data
May 2, April 27,
2004 2003
--------- ---------
Net cash provided by operating activities $ 273.0 $ 490.9
Net cash used in investing activities (1.2)(1) (173.5)
--------- ---------
Total 271.8 317.4
Net cash used in financing activities 283.0 (285.2)
(1) Capital spending of $82.7 million less $81.5 million of net
proceeds from the sale of assets.
Debt Net of Cash
May 2, April 27,
2004 2003
--------- ---------
Term loans $ 612.1 $ 881.6
Senior subordinated notes 760.1 761.5
Other 3.6 3.7
--------- ---------
Total long-term borrowings 1,375.8 1,646.8
Short term borrowings 0.8 0.6
--------- ---------
Total debt 1,376.6 1,647.4
Cash 36.3 42.7
--------- ---------
Debt net of cash $1,340.3 $1,604.7
========= =========
DEL MONTE FOODS COMPANY
Combined Statements of Income
For the Twelve Months Ended May 2, 2004
(In Millions)
GAAP Non-GAAP Non-GAAP
Reported Adjustments(1) As Adjusted
------------ -------------- ------------
Net sales $ 3,129.9 $ - $ 3,129.9
Cost of products sold 2,294.4 (13.1) 2,281.3
Selling, general and
administrative 457.0 (31.4) 425.6
------------ -------------- ------------
Operating income 378.5 44.5 423.0
Interest expense 129.0 - 129.0
Other income 1.7 - 1.7
------------ -------------- ------------
Income from continuing
operations before
income taxes 251.2 44.5 295.7
Provision for income taxes 90.5 17.4 107.9
------------ -------------- ------------
Income from continuing
operations 160.7 27.1 187.8
Income from discontinued
operations before income
taxes 6.0 0.7 6.7
Income taxes 2.1 0.3 2.4
------------ -------------- ------------
Income from Discontinued
Operations 3.9 0.4 4.3
------------ -------------- ------------
Net Income $ 164.6 $ 27.5 $ 192.1
============ ============== ============
Basic Average Shares 209,535,655 209,535,655
EPS - Continuing Operations $ 0.77 $ 0.90
EPS - Discontinued Operations 0.02 0.02
------------ ------------
EPS - Net Income $ 0.79 $ 0.92
============ ============
Fully Diluted Shares
Outstanding 211,212,242 211,212,242
EPS - Continuing Operations $ 0.76 $ 0.89
EPS - Discontinued Operations 0.02 0.02
------------ ------------
EPS - Net Income $ 0.78 $ 0.91
============ ============
Segment Detail:
Operating income
Consumer Products $ 252.9 $ 32.1 $ 285.0
Pet Products 159.7 6.9 166.6
Corporate (34.1) 5.5 (28.6)
------------ -------------- ------------
Total operating income $ 378.5 $ 44.5 $ 423.0
============ ============== ============
(1) Non-GAAP adjustments represent integration and restructuring expenses related to the expansion of soup production in our Mendota Mendota can refer to any of the following places in the United States:
Divisions of a business that have been sold or written off and that no longer are maintained by the business. ($0.7) and various other integration costs ($2.2).
DEL MONTE FOODS COMPANY
Combined Statements of Income
For the Twelve Months Ended April 27, 2003
(In Millions)
GAAP
GAAP Pro Forma
Reported Adjustments(1)
------------ --------------
Net sales $ 2,092.3 $ 888.1
Cost of products sold 1,533.6 677.3
Selling, general and administrative 313.6 136.0
------------- --------------
Operating income 245.1 74.8
Interest expense 45.3 81.9
Other income/(expense) (4.4) 0.3
------------- --------------
Income from continuing operations
before income taxes 195.4 (6.8)
Provision for income taxes 65.2 (2.6)
------------- --------------
Income from continuing operations 130.2 (4.2)
Income from discontinued operations
before income taxes 5.7 -
Income taxes 2.4 -
------------- --------------
Income from Discontinued Operations 3.3 -
Net income $ 133.5 $ (4.2)
============= ==============
Basic Average Shares 175,859,550 33,392,382
EPS - Continuing Operations $ 0.74
EPS - Discontinued Operations 0.02
-------------
EPS - Net Income $ 0.76
=============
Fully Diluted Shares Outstanding 176,494,577 33,912,262
EPS - Continuing Operations $ 0.74
EPS - Discontinued Operations 0.02
-------------
EPS - Net Income $ 0.76
=============
Segment Detail:
Net sales
Consumer Products $ 1,333.8 $ 888.1
Pet Products 758.5 -
------------- --------------
Total net sales $ 2,092.3 $ 888.1
============= ==============
Operating income
Consumer Products $ 111.8 $ 78.6
Pet Products 147.8 -
Corporate (14.5) (3.8)
------------- --------------
Total operating income $ 245.1 $ 74.8
============= ==============
GAAP Non-GAAP
Total Non-GAAP Pro Forma
Pro Forma Adjustments As Adjusted
------------ ----------- ------------
Net sales $ 2,980.4 $ 21.0 (2) $ 3,001.4
Cost of products sold 2,210.9 (30.4)(3) 2,180.5
Selling, general and
administrative 449.6 (28.9)(4) 420.7
------------ ----------- ------------
Operating income 319.9 80.3 400.2
Interest expense 127.2 2.5 (5) 129.7
Other income/(expense) (4.1) 4.5 (6) 0.4
------------ ----------- ------------
Income from continuing
operations
before income taxes 188.6 82.3 270.9
Provision for income taxes 62.6 34.3 (7) 96.9
------------ ----------- ------------
Income from continuing
operations 126.0 48.0 174.0
Income from discontinued
operations
before income taxes 5.7 1.6 (8) 7.3
Income taxes 2.4 0.7 (7) 3.1
------------ ----------- ------------
Income from Discontinued
Operations 3.3 0.9 4.2
Net income $ 129.3 $ 48.9 $ 178.2
============ =========== ============
Basic Average Shares 209,251,932 209,251,932
EPS - Continuing Operations $ 0.60 $ 0.83
EPS - Discontinued
Operations 0.02 0.02
------------ ------------
EPS - Net Income $ 0.62 $ 0.85
============ ============
Fully Diluted Shares
Outstanding 210,406,839 210,406,839
EPS - Continuing Operations $ 0.60 $ 0.83
EPS - Discontinued
Operations 0.02 0.02
------------ ------------
EPS - Net Income $ 0.62 $ 0.85
============ ============
Segment Detail:
Net sales
Consumer Products $ 2,221.9 $ 13.6 $ 2,235.5
Pet Products 758.5 7.4 765.9
------------ ----------- ------------
Total net sales $ 2,980.4 $ 21.0 $ 3,001.4
============ =========== ============
Operating income
Consumer Products $ 190.4 $ 67.8 $ 258.2
Pet Products 147.8 12.5 160.3
Corporate (18.3) - (18.3)
------------ ----------- ------------
Total operating income $ 319.9 $ 80.3 $ 400.2
============ =========== ============
(1) The historical GAAP Reported 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 include the results of operations for the Acquired Businesses, and the results of Del Monte Brands from the December 20, 2002 merger date. For comparability, the GAAP Total Pro Forma consolidated statements of income include a pro forma adjustment for the results of Del Monte Brands for the entire period presented. Cost of products sold includes $1.0 million of pro forma depreciation expense to recognize the unwinding of Acquired Businesses assets held under synthetic lease Synthetic Lease An operating lease that is structured in a way so that it is not recorded as a liability on the balance sheet. Instead, it is considered to be an expense on the income statement. obligations. SG&A excludes $34.6 million of Del Monte Brands merger-related expenses incurred prior to the December 20, 2002 merger date. Interest expense includes $49.7 million of additional pro forma expense as if the merger and related financing occurred on the first day of the fiscal year. (2) Net sales exclude Acquired Businesses adjustments of $7.6 million for trade promotion expenses related to a change in estimate for liabilities associated with accounts receivable accounts receivable n. the amounts of money due or owed to a business or professional by customers or clients. Generally, accounts receivable refers to the total amount due and is considered in calculating the value of a business or the business' problems in paying deductions, $7.0 million related to a change in estimate related to prior periods, and $9.7 million for trade promotion and other sales related expenses and a $4.3 million reduction in Del Monte Brands new item introduction expenses resulting from conforming con·form v. con·formed, con·form·ing, con·forms v.intr. 1. To correspond in form or character; be similar. 2. accounting practices, and other sales adjustments of $1.0 million. (3) In accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with purchase accounting rules applied to the merger, Del Monte Brands inventory was increased to fair market value. This inventory step-up step-up A scheduled increase in the exercise or conversion price at which a warrant, an option, or a convertible security may be used to acquire shares of common stock. increases cost of products sold as inventory on-hand at the acquisition date is sold. Cost of products sold excludes $25.5 million from inventory step-up, and $4.0 million for incremental Additional or increased growth, bulk, quantity, number, or value; enlarged. Incremental cost is additional or increased cost of an item or service apart from its actual cost. depreciation resulting from the step-up of fixed assets fixed assets npl → activo sg fijo fixed assets npl → immobilisations fpl fixed assets fix npl → to their fair market value. Cost of products sold also excludes Acquired Businesses inventory adjustments of $1.5 million relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc revisions ReVisions is a 2004 anthology of alternate history short-stories. It is edited by Julie E. Czerneda and Isaac Szpindel. Contents Title Author The Resonance of Light James Alan Gardner Out of China Julie E. in the parent company overhead rates as of the merger date, $0.1 million of Acquired Businesses restructuring expense, and other adjustments of $0.7 million. (4) SG&A excludes $18.3 million of integration expenses, $3.5 million of allocated parent company costs for the Acquired Businesses, and $4.0 million of incentive and retention compensation for the Acquired Businesses. SG&A also excludes legal settlement costs of $3.0 million. In addition, SG&A excludes a $0.6 million credit resulting from conforming accounting practices for Del Monte Brands package design costs, and other adjustments of $0.7 million. (5) Interest expense excludes $4.7 million of interest income resulting from the amortization of a loss from interest rate swap 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. agreements, and $2.2 million of expense for previously capitalized Capitalized Recorded in asset accounts and then depreciated or amortized, as is appropriate for expenditures for items with useful lives longer than one year. debt issuance costs from the early repayment Repayment The act of paying back a debt. Notes: Everyone has to repay their debts eventually. See also: Debt, Defeasance, Loan of debt. (6) Other expense excludes a $3.6 million loss from foreign exchange related to the Company's Euro-denominated borrowings in connection with the merger financing and $0.8 million of prepayment penalties Prepayment penalty A fee a borrower pays a lender when the borrower repays a loan before its scheduled time of maturity. as a result of early repayment of debt. (7) Income taxes are presented to reflect the impact of the adjustments noted at the effective tax rate. (8) Excludes a credit adjustment of $1.0 million for trade promotion expenses related to a change in estimate for liabilities associated with accounts receivable deductions and $2.6 million of restructuring expense.
DEL MONTE FOODS COMPANY
Combined Statements of Income
For the Three Months Ended May 2, 2004
(In Millions)
GAAP Non-GAAP Non-GAAP
Reported Adjustments(1) As Adjusted
------------ -------------- ------------
Net sales $ 915.9 $ - $ 915.9
Cost of products sold 673.3 (10.2) 663.1
Selling, general and
administrative 122.2 (12.4) 109.8
------------ -------------- ------------
Operating income 120.4 22.6 143.0
Interest expense 36.7 - 36.7
Other expense 0.4 - 0.4
------------ -------------- ------------
Income from continuing
operations
before income taxes 83.3 22.6 105.9
Provision for income taxes 29.0 8.8 37.8
------------ -------------- ------------
Income from continuing
operations 54.3 13.8 68.1
Income from discontinued
operations
before income taxes 1.1 0.7 1.8
Income taxes (1.2) 0.3 (0.9)
------------ -------------- ------------
Income from Discontinued
Operations 2.3 0.4 2.7
------------ -------------- ------------
Net Income $ 56.6 $ 14.2 $ 70.8
============ ============== ============
Basic Average Shares
EPS - Continuing Operations 209,719,248 209,719,248
EPS - Discontinued Operations $ 0.26 $ 0.33
EPS - Net Income 0.01 $ 0.01
------------ ------------
$ 0.27 $ 0.34
============ ============
Fully Diluted Shares
Outstanding
EPS - Continuing Operations 212,047,640 212,047,640
EPS - Discontinued Operations $0.26 $0.32
EPS - Net Income 0.01 0.01
------------ ------------
$0.27 $0.33
============ ============
Segment Detail:
Operating income
Consumer Products $ 75.7 $ 16.7 $ 92.4
Pet Products 54.5 4.6 59.1
Corporate (9.8) 1.3 (8.5)
------------ -------------- ------------
Total operating income $ 120.4 $ 22.6 $ 143.0
============ ============== ============
(1) Non-GAAP adjustments represent integration and restructuring expenses related to the expansion of soup production in our Mendota facility ($1.8), employee termination benefits and retention bonuses ($3.0), distribution network optimization ($7.8), packaging design integration ($7.8), discontinued operations ($0.7) and various other integration costs ($2.2).
DEL MONTE FOODS COMPANY
Combined Statements of Income
For the Three Months Ended April 27, 2003
(In Millions)
Non-GAAP
GAAP Non-GAAP Pro Forma
Reported Adjustments As Adjusted
------------ ----------- ------------
Net sales $ 756.8 $ 7.3 (1) $ 764.1
Cost of products sold 566.0 (13.9)(2) 552.1
Selling, general and
administrative 123.5 (12.3)(3) 111.2
------------ ----------- ------------
Operating income 67.3 33.5 100.8
Interest expense 30.7 (0.2)(4) 30.5
Other income/(expense) (1.2) 1.8 (5) 0.6
------------ ----------- ------------
Income from continuing
operations before income
taxes 35.4 35.5 70.9
Provision for income taxes 10.4 15.3 (6) 25.7
------------ ----------- ------------
Income from continuing
operations 25.0 20.2 45.2
Loss from discontinued
operations before income
taxes (1.8) 1.6 (7) (0.2)
Income tax benefit (0.3) 0.7 (6) 0.4
------------ ----------- ------------
Income from Discontinued
Operations (1.5) 0.9 (0.6)
Net income $ 23.5 $ 21.1 $ 44.6
============ =========== ============
Basic Average Shares 209,302,840 209,302,840
EPS - Continuing Operations $ 0.12 $ 0.21
EPS - Discontinued
Operations (0.01) -
------------ ------------
EPS - Net Income $ 0.11 $ 0.21
============ ============
Fully Diluted Shares
Outstanding 210,315,551 210,315,551
EPS - Continuing Operations $ 0.12 $ 0.21
EPS - Discontinued
Operations (0.01) -
------------ ------------
EPS - Net Income $ 0.11 $ 0.21
============ ============
Segment Detail:
Net sales
Consumer Products $ 569.8 $ 2.8 $ 572.6
Pet Products 187.0 4.5 191.5
------------ ----------- ------------
Total net sales $ 756.8 $ 7.3 $ 764.1
============ =========== ============
Operating income
Consumer Products $ 35.5 $ 26.3 $ 61.8
Pet Products 31.9 9.4 41.3
Corporate (0.1) (2.2) (2.3)
------------ ----------- ------------
Total operating income $ 67.3 $ 33.5 $ 100.8
============ =========== ============
(1) Net sales excludes trade promotion and other sales related expenses of $10.7 million, $4.3 million of reductions in new item introduction expenses resulting from conforming accounting practices, and other sales adjustments of $0.9 million. (2) In accordance with purchase accounting rules applied to the merger, Del Monte Brands inventory was increased to fair market value. This inventory step-up increases cost of products sold as inventory on-hand at the acquisition date is sold. These results exclude $14.5 million from inventory step-up. In addition, these results exclude $0.1 million related to Acquired Businesses restructuring and other adjustments of $0.7 million. (3) SG&A excludes $8.6 million of integration expenses, costs attributed to the Acquired Businesses for legal settlements of $3.0 million and incentive and retention compensation of $0.6 million. SG&A excludes a $0.6 million credit resulting from conforming accounting practices for Del Monte Brands package design costs, and other adjustments of $0.7 million. (4) Interest expense excludes $1.0 million of interest income resulting from the amortization of a loss from interest rate swap agreements, and $1.2 million of expense for previously capitalized debt issuance costs from the early repayment of debt. (5) Other expense excludes foreign exchange losses of $1.0 million related to the Company's Euro-denominated borrowings in connection with the merger financing, and $0.8 million of prepayment Prepayment 1. The payment of a debt obligation prior to its due date. 2. The excess payment over a scheduled debt repayment amount. Notes: 1. Examples include deferred expenses such as rent and early loan repayments. 2. premiums from the early repayment of debt. (6) Income taxes are presented to reflect the impact of the adjustments noted. (7) Excludes adjustments of $1.0 million for trade promotion expenses related to a change in estimate for liabilities associated with accounts receivable deductions and $2.6 million of restructuring expense. |
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