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INTERNATIONAL MULTIFOODS ANNOUNCES ACTIONS TO IMPROVE SHAREHOLDER RETURNS; REPORTS FY94 SECOND-QUARTER RESULTS

 MINNEAPOLIS, Sept. 20 /PRNewswire/ -- International Multifoods Corp. (NYSE: IMC) today said that its board of directors approved several actions to more clearly focus the company's assets and energies on its specialty distribution and bakery businesses, while immediately enhancing shareholder returns.
 These actions include the board's authorization to:
 -- explore the divestiture of its Prepared Foods division, which c ?of Frozen Specialty Foods, Surimi and Meats and accounted for about 15 percent of the company's fiscal 1993 revenues.
 -- continue to invest in internal growth opportunities and acquisitions to enhance the company's leadership positions in the specialty distribution and domestic and international bakery businesses.
 -- implement a share repurchase program of up to 2.5 million shares.
 -- dispose of several underperforming assets and reorganize its remaining businesses to reduce costs and improve customer performance. To this end, the company recognized special charges of $36.3 million after tax, or $1.88 per share, in the second quarter of fiscal 1994, which ended Aug. 31, to further enhance and reposition its specialty distribution and bakery businesses to take advantage of emerging growth opportunities.
 "These actions will accomplish two primary objectives. First, it will focus us more closely on businesses where we believe we can enhance shareholders returns. Second, it will provide an opportunity for improved value through stock repurchases, resulting in higher earnings per share," said Tony Luiso, chairman, president and chief executive officer. "These steps position the company to achieve its near-term goal of 15 percent return on beginning equity."
 Focus on Core Businesses
 Multifoods expects that its focus on the specialty distribution and bakery businesses will enable the company to achieve profitable growth based on broad market presence and extensive experience serving customers in these markets.
 "By devoting our resources to these core businesses, we see significant growth potential as a result of our market leadership in specialty distribution and our historic experience and expertise in the bakery business," Luiso said. "It is our intention to reinforce and build on our leadership in these industries."
 Luiso said that two recently completed acquisitions will help strengthen the company's core distribution and bakery businesses.
 Earlier this month, Multifoods purchased the assets and business of Bevmatic Wholesale & Vending Supply, Inc., a privately held, Twin Cities- based distributor with annual sales of about $30 million.
 "This purchase reflects our ongoing commitment to expanding our vending, office coffee service and fund-raising business to meet customer needs," Luiso said. "Bevmatic complements our existing business and provides an excellent fit with our strategic direction."
 Multifoods announced in June that it purchased J. Amicone Company, Inc., a Boston-based supplier of quality bakery mixes and frozen batters with annual sales of about $17 million, to complement its position as a leading supplier to in-store bakeries.
 As part of the focus on fewer core businesses, Multifoods' directors authorized management to explore the sale of the company's Prepared foods businesses.
 Other actions taken to focus on fewer core businesses include the recent sale of a regional business in California and the decision to sell two joint-venture businesses. The effect of these actions is reflected in the fiscal 1994 second-quarter special charges.
 Fiscal 1993 sales for Prepared Foods, and other divested businesses, were $420 million, or approximately 19 percent of total company sales of $2.2 billion. Prepared Foods, headquartered in Riverside, Calif., manufactures and markets appetizers, ethnic foods, meats and seafood to restaurants, schools and other foodservice customers. The division employs approximately 2,000 people.
 "This action is consistent with the ongoing evaluation of our businesses for their strategic fit and their ability to meet our financial objectives," Luiso said. "Prepared Foods is a profitable business with a leading position in several attractive niches of the foodservice market, but we believe it can be better enhanced as a strategic fit elsewhere."
 Share Repurchase
 Multifoods' directors also authorized management to repurchase up to 2.5 million common shares. The buy-back program represents about 13 percent of Multifoods' 19.4 million outstanding shares. The company intends to purchase the shares on the open market or otherwise. This repurchase program is in addition to a smaller, existing program adopted in 1991.
 "This action reflects our confidence in Multifoods' ongoing businesses," Luiso said. "We believe Multifoods is a good long-term investment as a result of our continued commitment to focus on businesses that have sustained market advantages and can deliver the most attractive results for our shareholders."
 Reorganizing Actions
 The company announced that it will undertake steps throughout the organization to reorganize operations and reduce costs. These actions are included in the second-quarter special charges of $36.3 million, or about $1.88 per share, after tax.
 The company is investing to improve its cost structure in its specialty distribution and bakery businesses to anticipate and capitalize on changing market conditions. The charge includes costs for facilities consolidation, plant rationalization and organizational changes.
 "We are undertaking these steps in anticipation of changes in our markets and in our customers' requirements to fully capitalize on market opportunities and strengthen our competitive position in each core business," Luiso said. "We estimate ongoing annualized benefits of up to $10 million in the company's operating profit to be realized during the next two fiscal years."
 Second-Quarter Results
 Multifoods today said its second-quarter fiscal 1994 segment earnings increased to $18.1 million, before reflecting special charges, from $17.8 million a year ago. Earnings per share, on a comparable basis, of 47 cents were even with the year-earlier quarter.
 In the quarter ended Aug. 31, the company recognized a special, after-tax charge of $36.3 million, or $1.88 per share, for costs to reorganize the company's businesses and improve performance.
 Including the charges, Multifoods reported a net loss for the quarter of $27.2 million, or $1.41 per share. Sales in the second quarter were $521.5 million, compared with $542.4 million in the same quarter a year ago.
 "Results in Canada and Prepared Foods enabled us to deliver improved segment earnings in the second quarter," Luiso said.
 U.S. Foodservice's earnings were $7.8 million, excluding special charges. That compared with $8.1 million in the year-earlier quarter. Sales for the business were $386.5 million, down 2 percent from $393.2 million a year ago. Results were affected by the loss of a vending distribution customer who initiated a self-distribution program. This was partially offset by lower ingredient costs and higher volume in some Prepared Foods lines.
 In Canadian Foods, operating margins improved in the quarter. Canadian Foods' earnings, excluding special charges, increased 32 percent to $3.7 million, from $2.8 million in the same quarter of fiscal 1993. This improvement was primarily due to improved unit volumes in consumer flour. Sales declined to $68.4 million from $74.7 million a year earlier as a result of a lower average exchange rate.
 "We are pleased with our results in Canada," Luiso said. "While the vending industry in the United States continues to face pressure from layoffs and regional pricing competition, we believe the long-term opportunities in this business remain intact."
 Venezuelan Foods' earnings were $6.6 million, compared with $6.9 million last year. Sales were $66.6 million, down from $74.5 million a year ago. Results were impacted by competitive pricing pressures in industrial wheat flour.
 "Today we are expanding our commitment to improving shareholder value with a view to the future," Luiso said. "With the steps we are taking to strengthen our remaining businesses, we are well positioned to meet our financial objectives as we move through the 1990s."
 Six-Month Summary
 First-half fiscal 1994 segment earnings were $31.5 million, before reflecting special charges, compared with $32.4 million in the first half of fiscal 1993. Fiscal 1994 results include the effects of a special charge recognized in the second quarter for costs to dispose of several underperforming assets and to reorganize the company's remaining businesses to reduce costs and improve performance. Earnings per share, on a comparable basis, for the six-month period increased to 80 cents from 78 cents in fiscal 1993.
 Including the special charge, the company reported a net loss for the first half of fiscal 1994 of $20.8 million, or $1.08 per share. Six- month sales were $1.08 billion, compared with $1.09 billion for the same year-earlier period.
 Quarterly Dividend
 In other actions, the company today announced a regular quarterly dividend of 20 cents per common share payable Jan. 17, 1994, to shareholders of record Dec. 28, 1993.
 A regular quarterly dividend was also declared on each series of the company's preferred stock, with the same record and payment dates as the common stock dividend.
 Minneapolis-based Multifoods, with fiscal 1993 sales of more than $2.2 billion, is a diversified food company with major operations in the United States, Canada and Venezuela.
 INTERNATIONAL MULTIFOODS CORPORATION
 CONSOLIDATED STATEMENTS OF EARNINGS
 (Unaudited)
 (in millions, except per share data)
 2nd Quarter Ended
 August 31
 FY 1994 FY 1993
 Net Sales $ 521.5 $ 542.4
 Cost of Sales (456.8) (478.2)
 Selling, General and Administrative (46.6) (46.4)
 Special Charges (a) (47.5) -
 Interest, net (2.9) (2.9)
 Corporate (.3) (.2)
 Earnings (losses) from Unconsolidated
 Affiliates (12.5) .4
 Earnings (Loss) Before Income Taxes (45.1) 15.1
 Income Tax Benefit (Expense) 17.9 (5.9)
 Net Earnings (loss) $ (27.2) $ 9.2
 Net Earnings (Loss) Per Share of
 Common Stock $ (1.41) $ .47
 Average Shares of Common Stock Outstanding 19.2 19.3
 (a) see attached for summary of special charges
 Six Months Ended
 August 31
 FY 1994 FY 1993
 Net Sales $1,077.3 $1,090.0
 Cost of Sales (946.7) (961.2)
 Selling, General and Administrative (99.1) (96.4)
 Special Charges (a) SC
I;u4hP (47.5) -
 Interest, net (5.8) (6.8)
 Corporate (.9) (.8)
 Earnings (losses) from Unconsolidated
 Affiliates (12.2) .5
 Earnings (Loss) Before Income Taxes (34.9) 25.3
 Income Tax Benefit (Expense) 14.1 (10.1)
 Net Earnings (loss) $ (20.8) $ 15.2
 Net Earnings (Loss) Per Share of
 Common Stock $ (1.08) $ .78
 Average Shares of Common Stock Outstanding 19.3 19.3
 (a) see attached for special charges
 INTERNATIONAL MULTIFOODS CORPORATION
 EARNINGS DIGEST
 (Unaudited)
 (in millions, except per share data)
 FY 1994 - 2nd Quarter Ended August 31
 Segment
 Earnings
 Before
 Net Operating Special Special
 Sales Costs Charges Charges Total
 U.S. Foodservice $ 386.5 $ (378.7) $ 7.8 $(25.7) $(17.9)
 Canadian Foods 68.4 (64.7) 3.7 (21.8) (18.1)
 Venezuelan Foods 66.6 (60.0) 6.6 - 6.6
 Total $ 521.5 $ (503.4) $18.1 (47.5) $(29.4)
 Segment Losses $(29.4)
 Interest, net (2.9)
 Corporate Unallocated (.3)
 Losses from Unconsolidated Affiliates (12.5) (12.5)
 Loss Before Income Taxes (60.0) (45.1)
 Income Tax Benefit 23.7 17.9
 Net Loss $(36.3) $(27.2)
 Net Loss Per Share of Common Stock $(1.88) $(1.41)
 Net Earnings Per Share of Common Stock,
 Excluding Special Charges $ .47
 FY 1993 - 2nd Quarter Ended August 31
 Segment
 Earnings
 Before
 Net Operating Special Special
 Sales Costs Charges Charges Total
 U.S. Foodservice $ 393.2 $ (385.1) $ 8.1 $ - $8.1
 Canadian Foods 74.7 (71.9) 2.8 - 2.8
 Venezuelan Foods 74.5 (67.6) 6.9 - 6.9
 Total $ 542.4 $ (524.6) $17.8 - $17.8
 Segment Earnings $ 17.8
 Interest, net (2.9)
 Corporate Unallocated (.2)
 Earnings from Unconsolidated Affiliates .4
 Earnings Before Income Taxes 15.1
 Income Tax Expense (5.9)
 Net Earnings $ 9.2
 Net Earnings Per Share of Common Stock $ .47
 INTERNATIONAL MULTIFOODS CORPORATION
 EARNINGS DIGEST
 (Unaudited)
 (in millions, except per share data)
 FY 1994 - Six Months Ended August 31
 Segment
 Earnings
 Before
 Net Operating Special Special
 Sales Costs Charges Charges Total
 U.S. Foodservice $ 811.5 $ (795.6) $15.9 $(25.7) $ (9.8)
 Canadian Foods 133.9 (129.7) 4.2 (21.8) (17.6)
 Venezuelan Foods 131.9 (120.5) 11.4 - 11.4
 Total $1,077.3 $(1,045.8) $31.5 (47.5) $(16.0)
 Segment Losses $(16.0)
 Interest, net (5.8)
 Corporate Unallocated (.9)
 Losses from Unconsolidated Affiliates (12.5) (12.2)
 Loss Before Income Taxes (60.0) (34.9)
 Income Tax Benefit 23.7 14.1
 Net Loss $(36.3) $(20.8)
 Net Loss Per Share of Common Stock $(1.88) $(1.08)
 Net Earnings Per Share of Common Stock,
 Excluding Special Charges $ .80
 FY 1993 - Six Months Ended August 31
 Segment
 Earnings
 Before
 Net Operating Special Special
 Sales Costs Charges Charges Total
 U.S. Foodservice $ 813.4 $ (797.4) $16.0 $ - $16.0
 Canadian Foods 137.2 (133.0) 4.2 - 4.2
 Venezuelan Foods 139.4 (127.2) 12.2 - 12.2
 Total $1,090.0 $(1,057.6) $32.4 $ - $32.4
 Segment Earnings $32.4
 Interest, net (6.8)
 Corporate Unallocated (.8)
 Earnings from Unconsolidated Affiliates .5
 Earnings Before Income Taxes 25.3
 Income Tax Expense (10.1)
 Net Earnings $15.2
 Net Earnings Per Share of Common Stock $ .78
 INTERNATIONAL MULTIFOODS CORPORATION
 CONSOLIDATED CONDENSED BALANCE SHEETS
 (Unaudited)
 (dollars in millions)
 August 31, February 28,
 1993 1993
 Current Assets $423.2 $415.9
 Property, Plant and Equipment, net 243.0 245.7
 Goodwill 88.6 86.2
 Other Noncurrent Assets 55.2 55.7
 Total Assets $810.0 $803.5
 Current Liabilities $286.1 $243.5
 Long-term Debt, net of Current Portion 174.8 167.0
 Other Noncurrent Liabilities 65.1 67.1
 Redeemable Preferred Stock 3.8 3.9
 Shareholders' Equity 280.2 322.0
 Total Liabilities and
 Shareholders' Equity $810.0 $803.5
 -0- 9/20/93
 /CONTACT: Jill W. Schmidt (media), 612-340-3755, Yolanda M. Scharton (investors), 612-340-3621, both for International Multifoods/


CO: International Multifoods, Inc. ST: Minnesota IN: FOD SU: ERN

AL-DS -- MN003 -- 3487 09/20/93 08:59 EDT
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