GENERAL MILLS FIRST QUARTER EPS UP 7 PERCENT
MINNEAPOLIS, Sept. 20 /PRNewswire/ -- General Mills (NYSE: GIS) today reported a 7 percent increase in earnings per share for the first quarter of fiscal 1994. Earnings per share were $1.04 compared with 97 cents earned in the prior year. Increases in federal tax rates retroactive to Jan. 1, 1993, reduced first-quarter earnings by about 3 cents per share. Reported sales increased 3 percent to $2.09 billion. Sales grew 6 percent excluding prior-year revenues of $41.5 million from European snack food operations that became part of the Snack Ventures Europe joint venture with PepsiCo Foods International in July 1992. Chairman Bruce Atwater told shareholders at General Mills' 65th annual meeting in Minneapolis that General Mills' strong consumer foods and restaurant brand franchises continue to demonstrate excellent performance in the marketplace. First-quarter results included operating profit gains of 10 percent for Restaurants and 5 percent in Consumer Foods. Total domestic retail packaged foods unit volume grew 2 percent and market shares were maintained or increased in virtually all major food categories. Consumer Foods' performance was led by profit increases from Big G cereals and Betty Crocker Products, with Yoplait, Foodservice and International Foods also contributing to the gain. While reported sales were unchanged from last year, sales were up 4 percent excluding European snack food revenues. Unit volume growth was led by gains of 22 percent for Yoplait yogurt and 6 percent for Gold Medal flour and packaged mixes. Both Betty Crocker Products and Big G cereals posted 1 percent volume gains, with stronger growth at the end of the quarter. The company's quarterly dollar share of the $8.5 billion retail ready- to-eat cereal market was 29 percent, nearly equal to last year's first quarter. In Canada, cereal volume grew over 7 percent, sustaining the company's 16 percent dollar share in that market. CPW, the company's worldwide cereal joint venture with Nestle, S.A., continued to record good volume and share progress in markets outside North America. CPW's volume during the first quarter was up over 25 percent. Restaurants' 10 percent sales and profit gains were led by Red Lobster. Total sales for Red Lobster's North American operations grew 6 percent, with only a 3 percent increase in the number of units versus the prior year's first quarter. In the U.S., Red Lobster's average unit sales grew 4 percent, reflecting good customer response to high-value product promotions such as the 30 Shrimp combination plate. Sales for The Olive Garden's North American operations increased 15 percent. U.S. average store sales declined 2 percent, reflecting the opening of additional units in established markets and the impact of the weak economy in California, where 57 of the chain's 409 units are located. During the quarter, Red Lobster opened 6 units and The Olive Garden added 9 restaurants, for a combined total of 1053 units in North America. China Coast commenced expansion. Three new restaurants opened in the Dallas market during the quarter, for a total of eight in operation. Another nine units are now under construction in the Midwest, Southeast and Southwest, with additional units planned. During the quarter, the company adopted FAS #109 (income tax accounting) and FAS #112 (severance and disability benefits accrual.) These two accounting changes were largely offsetting and had no impact on earnings per share. Interest expense increased by $10.2 million in the quarter, primarily due to the $4.3 million one-time impact of the federal tax changes on accounting for tax benefit leases and additional borrowing costs related to ongoing stock repurchase activities. General Mills repurchased 6.3 million shares in fiscal 1993 and another 1.5 million shares in the first quarter of 1994. Atwater told the annual meeting audience that General Mills expects 1994 to be another year of record sales, earnings and earnings per share. As previously indicated, he said the first half of the year is expected to show the slowest rates of growth. Atwater provided an update on the continuous product innovation and productivity increases that are the keys to the company's market share growth. He also reported on the strong progress being achieved by major new businesses, including the company's international joint ventures and China Coast. Prior to the annual meeting, the board of directors approved a quarterly dividend payment of 47 cents per share, payable Nov. 1, 1993, to shareholders of record October 8. The 47-cent quarterly rate was established with the August 2 payment and represented a 12 percent increase. This is the 29th consecutive year of General Mills dividend growth. In actions at the annual meeting, shareholders re-elected 13 directors, approved the appointment of KPMG Peat Marwick as the company's independent auditor, and approved the 1993 Stock Option and Long-Term Incentive Plan. A shareholder resolution to adopt cumulative voting for directors not adopted. GENERAL MILLS EARNINGS HIGHLIGHTS Thirteen Weeks Ended (Amounts in Millions, 8/29/93 8/30/92 Except per Share Data) Sales $2,089.8 $2,019.6 Earnings from Operations 165.6 159.6 EPS from Operations 1.04 .97 Cumulative Effect of Accounting Changes (a) .2 -- Net Earnings 165.8 159.6 EPS 1.04 .97 Average Shares Outstanding 159.9 163.8 OPERATING RESULTS BY SEGMENT Percent Change First Quarter From Prior Year Sales 8/29/93 8/30/92 Consumer Foods 1,346.9 $1,342.6 -- Restaurants 742.9 677.0 10 Total Sales $2,089.8 $2,019.6 3 Operating Profit Consumer Foods $241.5 $230.0 5 Restaurants 60.0 54.5 10 Total Operating Profit 301.5 284.5 6 Corporate Expenses, including Interest (28.4) (23.8) (19) Earnings - Pretax $273.1 $260.7 5 (a) We adopted Statement of Financial Accounting Standards (SFAS) No. 109, "Accounting for Income Taxes" during the first quarter. The cumulative effect was an increase in net earnings of $17.5 million ($.11 per share).
We also adopted SFAS No. 112, "Employers' Accounting for Postemployment Benefits." The cumulative effect was a decrease in net earnings of $17.3 million ($.11 per share).
GENERAL MILLS, INC. CONSOLIDATED STATEMENTS OF EARNINGS (Unaudited) (In Millions, Except per Share Data) Thirteen Weeks Ended 8/29/93 8/30/92 Sales $2,089.8 $2,019.6 Costs and Expenses: Cost of sales 1,078.1 1,042.3 Selling, general and administrative 640.5 636.2 Depreciation and amortization 71.4 63.9 Interest, net 26.7 16.5 Total Costs and Expenses 1,816.7 1,758.9 Earnings before Taxes 273.1 260.7 Income Taxes 107.5 101.1 Earnings from Operations 165.6 159.6 Cumulative Effect to May 31, 1993 of Accounting Changes .2 -- Net Earnings $165.8 $159.6 Earnings per Share: From operations $1.04 $.97 Cumulative effect of accounting changes -- -- Net Earnings per Share $1.04 $.97 Average Number of Common Shares 159.9 163.8 GENERAL MILLS, INC. CONSOLIDATED CONDENSED BALANCE SHEETS (In Millions) (Unaudited) (Unaudited) 8/29/93 8/30/92 5/30/93 ASSETS Current Assets: Cash and cash equivalents $131.7 $.9 $100.0 Receivables 421.7 353.0 287.4 Inventories 500.8 511.1 439.0 Prepaid expenses and other current assets 96.5 90.2 108.2 Deferred income taxes 151.9 148.6 142.3 Total Current Assets 1,302.6 1,103.8 1,076.9 Land, Buildings and Equipment, at Cost 4,347.6 3,896.3 4,239.5 Less accumulated depreciation (1,431.0) (1,231.7) (1,379.9) Net Land, Buildings and Equipment 2,916.6 2,664.6 2,859.6 Other Assets 720.0 744.9 714.3 Total Assets $4,939.2 $4,513.3 $4,650.8 LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities: Accounts payable $666.0 $669.8 $617.0 Current portion of long- term debt 72.2 32.7 64.3 Notes payable 294.1 225.6 339.6 Accrued taxes 250.1 199.9 139.7 Other current liabilities 360.5 360.5 398.2 Total Current Liabilities 1,642.9 1,488.5 1,558.8 Long-term Debt 1,453.9 1,038.9 1,268.3 Deferred Income Taxes 240.3 234.3 262.0 Deferred Income Taxes - Tax Leases 198.2 202.5 195.6 Other Liabilities 174.9 199.9 147.6 Total Liabilities 3,710.2 3,164.1 3,432.3 Stockholders' Equity: Cumulative preference stock, none issued -- -- -- Common stock, 204.2 shares issued 365.8 350.3 358.7 Retained earnings 2,375.7 2,140.7 2,284.5 Less common stock in treasury, at cost, shares of 45.0, 40.4 and 43.7, respectively (1,285.1) (927.1) (1,196.4) Unearned compensation and other (165.3) (170.1) (167.5) Cumulative foreign currency adjustment (62.1) (44.6) (60.8) Total Stockholders' Equity 1,229.0 1,349.2 1,218.5 Total Liabilities and Stockholders' Equity $4,939.2 $4,513.3 $4,650.8 -0- 9/20/93 /CONTACT: Analysts, Dean Belbas, 612-540-2443, or Ted Blood, 612-540-2256; or Media, R.C. Shulstad, 612-540-8745, all of General Mills/ (GIS)
CO: General Mills ST: Minnesota IN: FOD SU: ERN
DB-AL -- MN008 -- 3656 09/20/93 12:04 EDT
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|Date:||Sep 20, 1993|
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