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GENERAL MILLS EPS UP 12 PERCENT IN THIRD QUARTER BEFORE UNUSUAL ITEMS

 MINNEAPOLIS, March 15 /PRNewswire/ -- General Mills (NYSE: GIS) today reported a 12 percent increase in earnings per share for the third quarter of fiscal 1993. These results are before a current year 5-cents per share restructuring charge for Snack Ventures Europe, a 40 percent- owned joint venture with PepsiCo Foods International that became operational in July 1992, and a net 1-cent charge last year.
 For the 13 weeks ended Feb. 28, 1993, General Mills earned 91 cents per share compared to 81 cents in last year's third quarter, each before unusual items. Through nine months, earnings per share grew 13 percent to $2.74. Cumulative unusual charges were 6-cents per share in 1993.
 Sales of $2.0 billion in the third quarter and $6.1 billion through nine months represent gains of 8 percent and 6 percent, respectively. Sales grew 12 percent for the third quarter and 10 percent cumulatively excluding revenues of European snack food operations, now part of Snack Ventures Europe, and PYCASA, a Spanish subsidiary that was sold. This is well above the growth rates for the markets in which the company operates.
 Chairman Bruce Atwater said General Mills' record results were led by strong operating gains, including a third quarter increase in operating profits of 15 percent. That performance was paced by operating profit gains of 24 percent by Restaurants and 13 percent by Consumer Foods before unusual items, as well as excellent expense control throughout the company. With the outlook good for continuing operating vitality in the fourth quarter, Atwater said General Mills "expects fiscal 1993 to be another year of record sales, earnings and earnings per share."
 In the third quarter, Restaurants reported their strongest performance of the year with sales increasing 15 percent, more than twice the rate of sales growth experienced in the first half. Red Lobster USA's overall sales grew 16 percent with operating profits growing at a comparable rate. This strong performance reflected good consumer response to high-value Lobsterfest and 30-shrimp promotions held during the quarter, as well as increased marketing support. Most of the 6 percent growth in average unit sales resulted from increases in customer traffic. Red Lobster added 32 new units during the first 39 weeks and now has 651 units in North America.
 The Olive Garden's third-quarter performance in the United States was comparable to first-half results: a 16 percent gain in sales and even faster growth in operating profits. Average unit sales were slightly below the prior year. The Olive Garden expanded by 38 units in the first 39 weeks, most in existing markets, bringing total units in North America to 379. An updated menu, featuring a greater variety of sauces and entrees tailored to regional taste preferences, is being introduced March 29.
 For the first 39 weeks, Restaurant sales grew 9 percent and operating profits were up 15 percent. Cumulative performance in Canada by Red Lobster and The Olive Garden operations trailed prior-year comparisons, but third quarter results were nearly equal to the prior year.
 Consumer Foods sales increased 11 percent in the third quarter, excluding revenues of European snack foods and PYCASA. Domestic retail packaged food unit volume increased 7 percent in the quarter and is up 6 percent year to date. Betty Crocker Products achieved excellent volume growth on the strength of new dessert, main meal and snack products. Big G cereal volume was even with that of last year's third quarter, a period in which volume grew 14 percent on the strength of major new product introductions. Through the first three quarters, Big G volume is up 4 percent, with major new product activity planned in the fourth quarter. The company's dollar share of the $8.2 billion retail ready- to- eat cereal market was 29.4 percent for the past 52 weeks, up 0.3 percentage point from the comparable period last year.
 Through nine months, Consumer Foods sales and operating profits each increased 11 percent, excluding unusual items. International Foods, Foodservice, Gorton's and Yoplait joined Big G and Betty Crocker in making good contributions to improved operating results. Cumulative Consumer Foods profits also included significant planned expense relating to continued growth of the Cereal Partners Worldwide joint venture with Nestle that reduced the Consumer Foods profit growth rate by one percentage point.
 General Mills average shares outstanding were 163.6 million for the third quarter, 2.4 million fewer average shares than in last year's third quarter. This net reduction reflects the company's repurchase of 4 million shares during the first nine months, less shares issued under stock option and other incentive programs. Total corporate expense increased $15.4 million year to date, including $14.6 million in the third quarter. An increase of $7.2 million in interest expense, partially to fund the share repurchases, accounted for about half the third-quarter change; most of the remainder reflects a $6.0 million gain from the early termination of a tax lease transaction that lowered last year's corporate expense.
 EARNINGS HIGHLIGHTS
 (Amounts in Millions, Except per Share Data)
 13 Weeks Ended 39 Weeks Ended
 2/28/93(b) 2/23/92(b) 2/28/93(c) 2/23/92(c)
 Sales (a) $2,010.7 $1,868.3 $6,127.2 $5,777.3
 Net Earnings $140.9 $132.1 $438.6 $402.5
 EPS $.86 $.80 $2.68 $2.43
 Average Shares Outstanding 163.6 166.0 163.7 165.6
 OPERATING RESULTS BY SEGMENT
 Percent
 Change
 From
 Prior Year
 Third Quarter Nine Months 3rd 9
 Sales 2/28/93 2/23/92 2/28/93 2/23/92 Qtr Mos
 Consumer Foods (a) $1,300.2 $1,248.5 $4,116.6 $3,934.2 4 5
 Restaurants 710.5 619.8 2,010.6 1,843.1 15 9
 Total Sales $2,010.7 $1,868.3 $6,127.2 $5,777.3 8 6
 Operating Profit
 Consumer Foods(b)(c) $206.6 $185.8 $662.2 $617.1 11 7
 Restaurants 58.1 46.8 138.8 121.2 24 15
 Total Operating Profit 264.7 232.6 801.0 738.3 14 8
 Corporate Expenses,
 including interest (27.6) (13.0) (77.5) (62.1)(112)(25)
 Earnings - Pretax $237.1 $219.6 $723.5 $676.2 8 7
 (a) Fiscal 1993 cumulative sales includes $41.5 million from our European snack food entities prior to the formation of Snack Ventures Europe (SVE). Fiscal 1992 quarter and cumulative sales include $76.1 million and $252.6 million, respectively, from our European snack food entities and PYCASA, our Spanish subsidiary that was sold.
 (b) Fiscal 1993 third quarter results include a charge of $5.9 million pretax and $8.7 million after-tax ($.05 per share) for restructuring SVE. Fiscal 1992 third quarter results include a net charge of $3.0 million pretax and $1.9 million after-tax ($.01 per share) for restructuring our Consumer Foods national sales organization and adjustment of previously established reserves.
 (c) Cumulative fiscal 1993 results include a charge of $6.3 million pretax and $10.3 million after-tax ($.06 per share) for restructuring SVE. Fiscal 1992 cumulative results include a net gain of $11.2 million pretax and no after-tax effect including the sale of PYCASA and restructuring charges for our Betty Crocker packaged mixes production and European food operations, and the call of our 9 3/8 percent debt in the second quarter.
 GENERAL MILLS
 SALES AND EARNINGS ANALYSIS
 (In Millions)
 Third Quarter Year-to-Date
 1993 1992 Percent 1993 1992 Percent
 Change Change
 SALES
 $2,010.7 $1,792.2 12 Operations $6,085.7 $5,524.7 10
 -- 76.1 -- Other (a) 41.5 252.6 --
 $2,010.7 $1,868.3 8 As Reported $6,127.2 $5,777.3 6
 OPERATING PROFIT
 $212.5 $188.8 13 Foods-Before
 Unusual Items $668.5 $600.2 11
 (5.9) (3.0) -- Unusual Items (6.3) 16.9 --
 206.6 185.8 11 Foods-As Reported 662.2 617.1 7
 58.1 46.8 24 Restaurants 138.8 121.2 15
 270.6 235.6 15 Total-Before
 Unusual Items 807.3 721.4 12
 264.7 232.6 14 Total-As Reported 801.0 738.3 8
 Corporate Expenses,
 (27.6) (13.0) (112) Including Interest (77.5) (56.4) (37)
 -- -- -- Unusual Item
 (Debt Call) -- (5.7) --
 243.0 222.6 9 Pretax-Before
 Unusual Items 729.8 665.0 10
 (5.9) (3.0) -- Unusual Items (6.3) 11.2 --
 237.1 219.6 8 Pretax-As Reported 723.5 676.2 7
 93.4 88.6 5 Taxes-Before
 Unusual Items 280.9 262.5 7
 38.4 39.8 -- Tax Rate (pct.) 38.5 39.5 --
 2.8 (1.1) -- Taxes-Unusual Items 4.0 11.2 --
 96.2 87.5 10 Taxes-As Reported 284.9 273.7 4
 40.6 39.8 -- Tax Rate (pct.) 39.4 40.5 --
 149.6 134.0 12 EAT-Before Unusual
 Items 448.9 402.5 12
 (8.7) (1.9) -- Unusual Items (10.3) -- --
 $140.9 $132.1 7 EAT-As Reported $438.6 $402.5 9
 EARNINGS PER SHARE
 $.91 $.81 12 Before Unusual
 Items $2.74 $2.43 13
 (.05) (.01) -- Unusual Items (.06) -- --
 $.86 $.80 8 EPS-AS REPORTED $2.68 $2.43 10
 (a) Includes disposed business and European entities, merged into Snack Ventures Europe as of July 11, 1992, whose sales are no longer consolidated.
 GENERAL MILLS, INC.
 CONSOLIDATED STATEMENTS OF EARNINGS
 (Unaudited)
 (In Millions, Except per Share Data)
 13 Weeks Ended 39 Weeks Ended
 2/28/93 2/23/92 2/28/93 2/23/92
 Sales $2,010.7 $1,868.3 $6,127.2 $5,777.3
 Costs and Expenses:
 Cost of sales 1,069.3 983.4 3,191.9 3,030.9
 Selling, general
 and administrative 616.9 589.6 1,961.4 1,848.7
 Depreciation and
 amortization 67.6 63.1 197.0 180.6
 Interest, net 19.8 12.6 53.4 40.9
 Total Costs and Expenses 1,773.6 1,648.7 5,403.7 5,101.1
 Earnings before Taxes 237.1 219.6 723.5 676.2
 Income Taxes 96.2 87.5 284.9 273.7
 Net Earnings $140.9 $132.1 $438.6 $402.5
 Earnings per Share $.86 $.80 $2.68 $2.43
 Dividends per Share $.42 $.37 $1.26 $1.11
 Average Number of
 Common Shares 163.6 166.0 163.7 165.6
 GENERAL MILLS, INC.
 CONSOLIDATED CONDENSED BALANCE SHEETS
 (In Millions)
 (Unaudited) (Unaudited)
 2/28/93 2/23/92 5/31/92
 ASSETS
 Current Assets:
 Cash and cash equivalents $38.9 $38.2 $.5
 Receivables 405.1 405.7 291.9
 Inventories 486.0 550.3 487.2
 Prepaid expenses and other
 current assets 89.5 90.1 106.3
 Deferred income taxes 147.6 155.3 148.7
 Total Current Assets 1,167.1 1,239.6 1,034.6
 Land, Buildings and Equipment,
 at Cost 4,168.6 3,733.7 3,909.3
 Less accumulated depreciation (1,331.9) (1,219.5) (1,260.7)
 Net Land, Buildings
 and Equipment 2,836.7 2,514.2 2,648.6
 Other Assets 752.9 611.2 621.8
 Total Assets $4,756.7 $4,365.0 $4,305.0
 LIABILITIES AND STOCKHOLDERS' EQUITY
 Current Liabilities:
 Accounts payable $638.9 $644.6 $632.5
 Current portion of long-term debt 51.2 24.1 32.6
 Notes payable 339.7 263.7 169.3
 Accrued taxes 166.4 164.5 127.9
 Other current liabilities 454.0 417.2 409.4
 Total Current Liabilities 1,650.2 1,514.1 1,371.7
 Long-term Debt 1,181.5 840.7 920.5
 Deferred Income Taxes 240.2 251.5 231.5
 Deferred Income Taxes - Tax Leases 197.0 204.6 203.0
 Accrued Postretirement Benefits 101.3 107.1 103.6
 Other Liabilities 77.0 68.8 103.8
 Total Liabilities 3,447.2 2,986.8 2,934.1
 Stockholders' Equity:
 Cumulative preference
 stock, none issued -- -- --
 Common stock, 204.2 shares issued 357.1 339.0 343.6
 Retained earnings 2,216.4 2,016.5 2,049.0
 Less common stock in treasury,
 at cost, shares of 41.5,
 38.1 and 38.7, respectively (1,043.6) (758.6) (802.9)
 Unearned ESOP and restricted
 stock compensation (167.6) (174.1) (172.3)
 Cumulative foreign
 currency adjustment (52.8) (44.6) (46.5)
 Total Stockholders' Equity 1,309.5 1,378.2 1,370.9
 Total Liabilities and
 Stockholders' Equity $4,756.7 $4,365.0 $4,305.0
 -0- 3/15/93R
 /CONTACT: (Analysts) Dean Belbas, 612-540-2443, Ted Blood, 612-540-2256, (Media) R.C. Shulstad, 612-540-3745, all of General Mills/
 (GIS)


CO: General Mills, Inc. ST: Minnesota IN: FOD SU: ERN

2241 03-15-93 13:01 EST AL -- MN006R -- 6191 03/15/93 16:17 EST
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