Del Monte Foods Company Reports Fiscal 2006 Second Quarter.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. ): Announcement Highlights --Q2 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 4.2%; the year-over-year increase was primarily driven by successful pricing actions and new products --Diluted 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. 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 was $0.21 in Q2F06 compared to $0.20 (including $0.01 integration expense) in Q2F05 --The Company continued to experience 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, with Q2 energy and transportation-related costs higher than originally anticipated Del Monte Foods Second Quarter Results Del Monte Foods Company today reported income from continuing operations of $42.7 million and 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 $0.21 for the second quarter ended October October: see month. 30, 2005, compared to income from continuing operations of $41.8 million and $0.20 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, including $0.01 of integration expense. Del Monte's year-over-year second quarter earnings increase was driven primarily by the strong top-line performance, offset by increased steel, energy, 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. and other transportation-related costs as well as unfavorable mix. Lower interest expense and the benefits from the share repurchase Share Repurchase A program by which a company buys back its own shares from the marketplace, reducing the number of outstanding shares. This is usually an indication that the company's management thinks the shares are undervalued. program also contributed to higher earnings per share. Second quarter net sales increased 4.2% from the prior year period to $882.3 million. The increase in net sales was driven primarily by increased pricing and volume growth from new products, partially offset by expected volume loss associated with price increases (elasticity). "We are pleased with our top-line, business building momentum which continued in the second quarter behind positive pricing and new product introductions, both enabled by our strong brands," 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
Wolford continued, "In the second quarter, our company also experienced continued steel, energy and transportation cost increases which pressured margins. To offset these increases, we continued to execute against our ongoing cost reduction program as well as benefit from prior pricing actions." Consumer Products For the second quarter, Consumer Products net sales were $673.5 million, an increase of 7.1% over the prior year period. The increase was driven primarily by increased pricing, as well as volume growth from existing products including fruit and 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. 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 new products including StarKist Tuna Fillets, Del Monte Monte (Italian, Portuguese and Spanish meaning mount) may refer to various things: Monte is the name of several places: In Brazil
Consumer Products 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. decreased 2.8% from $73.8 million in second quarter fiscal 2005 to $71.7 million in second quarter fiscal 2006, as the significant sales increase was more than offset by increased steel, energy, logistics and other transportation-related costs, higher SG&A and unfavorable mix. Pet Products For the second quarter, Pet Products net sales were $208.8 million, a decrease of 4.0% versus the prior year period. The decline in Pet Products net sales was driven primarily by an expected decrease in volume from existing products as compared to the prior year period which included the positive volume impact of the fiscal 2005 9Lives restage and 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. wet new product introduction. Positively impacting sales was increased volume from new products in the pet snacks and dry dog businesses, including Kibbles 'n Bits Homestyle Beef and Meaty Bone Denta Delicious See social bookmarking. . Pet Products operating income increased 5.7% from $31.5 million in second quarter fiscal 2005 to $33.3 million in second quarter fiscal 2006 as the earnings impact of lower sales was more than offset by decreased SG&A. The decrease in SG&A reflected lower marketing as compared to the prior year period which included increased investment around the 9Lives restaging and Kibbles 'n Bits introduction initiatives, partially offset by higher customer delivery costs. Del Monte Foods Six Months Ended October 30, 2005 Results The Company reported income from continuing operations of $59.0 million and diluted earnings per share of $0.29 for the six months ended October 30, 2005, compared to income from continuing operations of $50.4 million and $0.24 per diluted share for the prior year period, including $0.03 of integration expense. Del Monte's year-over-year earnings increase for the six months ended October 30, 2005 was driven primarily by the positive top-line performance, partially offset by increased steel, energy, logistics and other transportation-related costs and increased SG&A. Lower interest expense and the benefits from the share repurchase program also contributed to higher earnings per share. Net sales for the six months ended October 30, 2005 increased 5.5% from the prior year period to $1,553.4 million. The increase in net sales was driven primarily by increased pricing. Favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. volume from new and existing products, partially offset by volume loss associated with price increases, also positively impacted net sales. Outlook For fiscal 2006, the Company now expects to deliver sales growth toward the higher end Coordinates: For other places with the same name, see Billinge. Higher End or Billinge Higher End is a district of the Metropolitan Borough of Wigan, in Greater Manchester, England. of its previously announced 1 to 3% sales growth guidance range. Fiscal 2005 net sales were $3,180.9 million. Additionally, the Company now anticipates delivering full-year fiscal 2006 earnings per share at the low end of its original $0.75 to $0.80 guidance. This EPS guidance reflects the expected impact of higher-than-anticipated year-over-year energy, logistics and other transportation-related costs, the expected impact of additional business initiatives and cost savings efforts, and the expectation that the recent downward trends associated with energy and carrier capacity costs will continue. The Company reported diluted earnings per share of $0.56 from continuing operations for fiscal 2005, which included $0.07 of integration expense, $0.10 of refinancing Refinancing An extension and/or increase in amount of existing debt. expense and $0.02 of expenses related to the Kal-Kan litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. . The Company continues to expect cash provided by operating activities, less cash used in investing activities, of approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $190 to $200 million. For the fiscal 2006 third quarter, the Company expects to deliver sales growth of approximately 1 to 3% over net sales of $861.3 million in the third quarter of fiscal 2005. Diluted earnings per share is expected to be approximately $0.18 to $0.23. The Company reported diluted earnings per share of $0.23 from continuing operations for the third quarter of fiscal 2005, which included $0.01 of integration expense. Del Monte Foods Del Monte Foods is one of the country's largest and most well known 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 2005. 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), Pounce(R) and Meaty Bone(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 (NYSE:DLM), visit the Company's website 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 2006 second quarter at 8:00 a.m. PT (11:00 a.m. ET) today. The webcast slide presentation and historical, quarterly results can be accessed at www.delmonte.com/Company/investors. The audio portion of the webcast may also be accessed during the call (listen-only mode) as follows: 1- 877-709-5341 (1-517-308-9005 outside the U.S. and Canada Canada (kăn`ədə), independent nation (2001 pop. 30,007,094), 3,851,787 sq mi (9,976,128 sq km), N North America. Canada occupies all of North America N of the United States (and E of Alaska) except for Greenland and the French islands of ), verbal code: Del Monte Foods. 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 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, energy, fuel, 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). and tuna; logistics and other transportation-related costs; ability to increase prices and reduce costs; Hurricane Katrina  Editing of this page by unregistered or newly registered users is currently disabled due to vandalism. and its aftermath AFTERMATH. A right to have the last crop of grass or pasturage. 1 Chit. Pr. 181. ; our debt levels and
ability to service our debt; costs and results of efforts to improve the
performance and market share of our businesses; reduced sales,
disruptions, costs or other charges to earnings that may be generated by
our strategic plan, including related disposition Act of disposing; transferring to the care or possession of another. The parting with, alienation of, or giving up of property. The final settlement of a matter and, with reference to decisions announced by a court, a judge's ruling is commonly referred to as disposition, regardless of efforts; acquisitions,
if any, including identification of appropriate targets and successful
integration of any acquired business; effectiveness of marketing,
pricing and trade promotion programs; changing consumer and pet
preferences; timely launch and market acceptance of new products;
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. ; product liability claims; weather conditions; crop yields;
changes in U.S., foreign or local tax laws and effective rates; interest
rate fluctuations; the loss of significant customers or a substantial
reduction in orders from these customers or the bankruptcy bankruptcy, in law, settlement of the liabilities of a person or organization wholly or partially unable to meet financial obligations. The purposes are to distribute, through a court-appointed receiver, the bankrupt's assets equitably among creditors and, in most of any such
customer; changes in business strategy or development plans;
availability, terms and deployment 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;
litigation; 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. and quarterly report on Form 10-Q Form 10-Q See 10-Q. for the three months ended July July: see month. 31, 2005. 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 Information
Net Sales by Segment
(In millions)
Three Months Ended Six Months Ended
----------------------- -----------------------
October 30, October 31, October 30, October 31,
Net Sales: 2005 2004 2005 2004
----------- ----------- ----------- -----------
Consumer Products $ 673.5 $ 629.1 $ 1,150.2 $ 1,076.1
Pet Products 208.8 217.5 403.2 396.5
----------- ----------- ----------- -----------
Total company $ 882.3 $ 846.6 $ 1,553.4 $ 1,472.6
=========== =========== =========== ===========
Operating Income by
Segment
(In millions)
Three Months Ended Six Months Ended
----------------------- -----------------------
October 30, October 31, October 30, October 31,
Operating Income: 2005 2004 2005 2004
----------- ----------- ----------- -----------
Consumer Products $ 71.7 $ 73.8 $ 106.6 $ 109.1
Pet Products 33.3 31.5 56.8 48.3
Corporate (a) (12.6) (11.6) (23.6) (23.2)
----------- ----------- ----------- -----------
Total company $ 92.4 $ 93.7 $ 139.8 $ 134.2
=========== =========== =========== ===========
(a) Corporate represents expenses not directly attributable to
reportable segments.
Selected Balance Sheet Data
(In millions) As of
-----------------------
October 30, May 1,
2005 2005
----------- -----------
Cash and cash equivalents $ 20.2 $ 145.9
Trade accounts receivable, net of
allowance 222.9 212.6
Inventories 1,140.9 825.1
Total assets 3,691.1 3,530.6
Accounts payable and accrued
expenses 560.9 387.3
Short-term borrowings 39.3 1.0
Long-term debt, including current
portion 1,305.3 1,306.1
Stockholders' equity 1,197.9 1,260.6
Selected Cash Flow Data
(In millions) Six Months Ended
-----------------------
October 30, October 31,
2005 2004
----------- -----------
Net cash used in operating
activities $ (40.3) $ (138.2)
Net cash used in investing
activities (1.5) (32.8)
----------- -----------
Total (41.8) (171.0)
Net cash provided by (used in)
financing activities (86.1) 143.9
Depreciation and amortization 47.1 45.3
Other Financial Data
(In millions) As of
-----------------------------------
October 30, May 1, October 31,
2005 2005 2004
----------- ----------- -----------
Short-term borrowings $ 39.3 $ 1.0 $ 142.0
Current portion of long-term debt 7.3 1.7 6.3
Long-term debt (excluding current
portion) 1,298.0 1,304.4 1,365.8
----------- ----------- -----------
Total Debt 1,344.6 1,307.1 1,514.1
----------- ----------- -----------
Cash and cash equivalents 20.2 145.9 10.8
----------- ----------- -----------
Total Debt Net of Cash $ 1,324.4 $ 1,161.2 $ 1,503.3
=========== =========== ===========
DEL MONTE FOODS COMPANY
Consolidated Statements of Income
(In millions, except share and per share data)
Three Months Ended Six Months Ended
--------------------------- ---------------------------
October 30, October 31, October 30, October 31,
2005 2004 2005 2004
------------- ------------- ------------- -------------
Net sales $ 882.3 $ 846.6 $ 1,553.4 $ 1,472.6
Cost of
products sold 650.8 624.2 1,160.1 1,103.4
------------- ------------- ------------- -------------
Gross profit 231.5 222.4 393.3 369.2
Selling,
general and
administrative
expense 139.1 128.7 253.5 235.0
------------- ------------- ------------- -------------
Operating
income 92.4 93.7 139.8 134.2
Interest
expense 22.9 25.9 44.1 50.5
Other expense 1.1 0.5 1.1 2.5
------------- ------------- ------------- -------------
Income from
continuing
operations
before
income taxes 68.4 67.3 94.6 81.2
Provision for
income taxes 25.7 25.5 35.6 30.8
------------- ------------- ------------- -------------
Income from
continuing
operations 42.7 41.8 59.0 50.4
Income (loss)
from
discontinued
operations
before
income taxes 1.6 (0.6) 1.4 (0.7)
Provision
(benefit)
for income
taxes 0.4 (0.4) 0.3 (0.4)
------------- ------------- ------------- -------------
Income (loss)
from
discontinued
operations 1.2 (0.2) 1.1 (0.3)
------------- ------------- ------------- -------------
Net income $ 43.9 $ 41.6 $ 60.1 $ 50.1
============ ============ ============ ============
Earnings per
common share
(EPS)
Basic:
Basic Average
Shares 199,515,587 210,216,329 203,658,216 210,015,490
EPS -
Continuing
Operations $ 0.21 $ 0.20 $ 0.29 $ 0.24
EPS -
Discontinued
Operations 0.01 - 0.01 -
------------- ------------- ------------- -------------
EPS - Total $ 0.22 $ 0.20 $ 0.30 $ 0.24
============= ============= ============= =============
Diluted:
Diluted
Average
Shares 202,227,979 212,066,245 206,130,552 211,893,409
EPS -
Continuing
Operations $ 0.21 $ 0.20 $ 0.29 $ 0.24
EPS -
Discontinued
Operations 0.01 - 0.01 -
------------- ------------- ------------- -------------
EPS - Total $ 0.22 $ 0.20 $ 0.30 $ 0.24
============= ============= ============= =============
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