Del Monte Foods Company Reports Fiscal 2005 Second Quarter Results; Delivers Strong Revenue Growth of 6.9%; Lowers Full Year EPS Guidance Due to Increased Energy/Logistics Costs.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 -- 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 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 of $0.20 for the second quarter ended October October: see month. 31, 2004, compared to $0.19 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 prior year period. Integration costs of $4.2 million ($0.01 per share) and $7.7 million ($0.02 per share) are included in the results for the second quarter of fiscal 2005 and fiscal 2004, respectively. These earnings per share results are consistent with the guidance the company previously provided. 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 increased 6.9% from the prior year period to $846.6 million. The increase in sales was driven by new product introductions, increased pricing, and higher volumes from increased marketing support and successful merchandising merchandising Element of marketing concerned especially with the sale of goods and services to customers. One aspect of merchandising is advertising, which aims to capture the interest of the segment of the population most likely to buy the product. . 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 increased to $41.8 million for the quarter from $40.7 million a year ago. Increased volume and pricing, combined with cost reduction actions and lower overhead expenses, offset increased inflationary in·fla·tion·ar·y adj. Of, associated with, or tending to cause inflation: inflationary prices; inflationary policies. Adj. 1. and other costs in steel, ingredients, energy and logistics logistics In military science, all the activities of armed-force units in support of combat units, including transport, supply, communications, and medical aid. The term, first used by Henri Jomini, Alfred Thayer Mahan, and others, was adopted by the U.S. as well as higher marketing spending. In addition, lower interest expense was partially offset by the higher effective income tax rate. "Our second quarter results reflect successful performance in the marketplace although costs were negatively impacted by inflationary pressures," 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
"In the second half, we plan to continue to invest in our brands and new product initiatives. We believe that the success of these actions, along with our strong second quarter growth and the pricing actions we have already taken, will result in higher than originally expected fiscal 05 revenue growth. However, higher than anticipated energy and logistics costs will put pressure on our bottom-line bot·tom-line adj. 1. Concerned exclusively with costs and profits: bottom-line issues. 2. Ruthlessly realistic; pragmatic: a bottom-line political strategy. ." Six Months Ended October 31, 2004 The Company reported diluted earnings per share of $0.24 for the six months ended October 31, 2004, compared to $0.26 per diluted share for the prior year period. Integration costs of $12.8 million ($0.03 per share) and $14.7 million ($0.04 per share) are included in the results for the first half of fiscal 2005 and fiscal 2004, respectively. Net sales increased 5.0% from the first half of fiscal 2004 to $1,472.6 million, driven by new product introductions, increased pricing, and higher volumes from increased marketing support and successful merchandising. Income from continuing operations was $50.4 million for the first six months of fiscal 2005 versus $54.2 million a year ago. This decrease in income was driven by the increased inflationary and other costs mentioned above, marketing investments, and corporate expenses partially offset by increased pricing, increased volume and lower interest expense. Outlook The Company now expects fiscal 2005 sales growth of approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 2% to 3% over fiscal 2004 net sales of $3,129.9 million and diluted earnings per share from continuing operations of $0.76 to $0.81, including integration expense of approximately $0.06 per share. This compares to $0.76 of diluted earnings per share from continuing operations in fiscal 2004, which included integration expense of $0.13 per share. The Company previously said it expected fiscal 2005 sales growth of 1% to 2% over fiscal 2004 and diluted earnings per share from continuing operations of approximately $0.81 to $0.86, including integration expense of approximately $0.06 per share. The Company expects the year-over-year increase in sales to be driven by continued marketing investment and new product activities as well as the impact of prior pricing actions, offset by the absence of the 53rd week in fiscal 2005 when compared to fiscal 2004. Fiscal 2005 earnings results are expected to be driven by increased sales volume, favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. pricing, cost reduction initiatives and lower incentive compensation, offset primarily by the inflationary and other cost increases mentioned above and planned increases in marketing investments over the prior year. Specifically, energy and logistics costs are higher than originally anticipated and now expected to continue as such for the balance of the year, driven by factors including rate increases, fuel surcharges and other logistics related issues. The Company now expects cash provided by operating activities, less cash used in investing activities, of approximately $185 to $200 million in fiscal 2005. For the fiscal 2005 third quarter, the Company expects sales growth of approximately 4% to 6% over net sales of $811 million in the third quarter of fiscal 2004, and diluted earnings per share of approximately $0.21 to $0.25 which compares to $0.25 for the third quarter of fiscal 2004. We also expect integration costs of approximately $0.02 per share in the third quarter of fiscal 2005, which compares to $0.02 per share in the second quarter of fiscal 2004. 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 Monte (Italian, Portuguese and Spanish meaning mount) may refer to various things: Monte is the name of several places: In Brazil
In 1995, the brand was acquired by Del Monte. (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 ten 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 2005 Second Quarter results 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, and historical, quarterly results can be accessed at www.delmonte.com/company/investors. The web cast and slide presentation will be available online following the presentation. 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 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. 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; implementation of our trade promotion spending improvement project and of our distribution network improvement project; 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 May 2, 2004. 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
Net Sales by Segment
(In millions)
Three Months Ended Six Months Ended
October 31, October 26, October 31, October 26,
2004 2003 2004 2003
----------- ----------- ----------- -----------
Consumer Products $629.1 $599.4 $1,076.1 $1,048.4
Pet Products 217.5 192.2 396.5 354.5
----------- ----------- ----------- -----------
Total Company $846.6 $791.6 $1,472.6 $1,402.9
=========== =========== =========== ===========
Operating Income by Segment
(In millions)
Three Months Ended Six Months Ended
October 31, October 26, October 31, October 26,
2004 2003 2004 2003
----------- ----------- ----------- -----------
Consumer Products $73.8 $67.1 $109.1 $98.6
Pet Products 31.5 33.7 48.3 60.7
Corporate (11.6) (9.3) (23.2) (16.3)
----------- ----------- ----------- -----------
Total Company $93.7 $91.5 $134.2 $143.0
=========== =========== =========== ===========
Selected Balance Sheet Data
(In millions)
October 31,
2004 May 2, 2004
----------- -----------
Cash and cash equivalents $10.8 $36.3
Trade accounts receivable, net of allowance 240.9 222.3
Inventories 1,172.2 823.5
Total assets 3,766.3 3,459.7
Accounts payable and accrued expenses 542.3 427.2
Short-term borrowings 142.0 0.8
Long-term debt, including current portion 1,372.1 1,375.8
Stockholders' equity 1,188.8 1,128.9
Selected Cash Flow Data
(In millions)
Six Months Ended
October 31, October 26,
2004 2003
----------- -----------
Net cash used in operating activities $(138.2) $(115.3)
Net cash used in investing activities (32.8) (42.7)
----------- -----------
Total (171.0) (158.0)
Net cash provided by financing activities 143.9 125.5
Depreciation and amortization 45.3 43.0
DEL MONTE FOODS COMPANY
Condensed Consolidated Statements of Income
(In millions, except share and per share data)
Three Months Ended Six Months Ended
----------------------- -----------------------
October 31, October 26, October 31, October 26,
2004 2003 2004 2003
----------- ----------- ----------- -----------
Net Sales $846.6 $791.6 $1,472.6 $1,402.9
Cost of products sold 624.2 580.6 1,103.4 1,037.2
----------- ----------- ----------- -----------
Gross profit 222.4 211.0 369.2 365.7
Selling, general and
administrative expense 128.7 119.5 235.0 222.7
----------- ----------- ----------- -----------
Operating income 93.7 91.5 134.2 143.0
Interest expense 25.9 30.9 50.5 60.9
Other income (expense) (0.5) 2.4 (2.5) 1.6
----------- ----------- ----------- -----------
Income from
continuing
operations before
income taxes 67.3 63.0 81.2 83.7
Provision for income
taxes 25.5 22.3 30.8 29.5
----------- ----------- ----------- -----------
Income from
continuing
operations 41.8 40.7 50.4 54.2
Income (loss) from
discontinued
operations before
income taxes (0.6) (0.3) (0.7) 1.5
Provision (benefit)
for income taxes (0.4) 0.2 (0.4) 1.2
----------- ----------- ----------- -----------
Income (loss) from
discontinued
operations (0.2) (0.5) (0.3) 0.3
----------- ----------- ----------- -----------
Net income $41.6 $40.2 $50.1 $54.5
=========== =========== =========== ===========
Earnings per common share
Basic:
Basic Average
Shares 210,216,329 209,458,920 210,015,490 209,412,640
EPS - Continuing
Operations $0.20 $0.19 $0.24 $0.26
EPS - Discontinued
Operations - - - -
EPS - Total $0.20 $0.19 $0.24 $0.26
Diluted:
Diluted Average
Shares 212,066,245 210,630,911 211,893,409 210,541,998
EPS - Continuing
Operations $0.20 $0.19 $0.24 $0.26
EPS - Discontinued
Operations - - - -
EPS - Total $0.20 $0.19 $0.24 $0.26
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