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GERBER F'94 FIRST-QUARTER EPS $0.38 VS. $0.44 A YEAR EARLIER

 FREMONT, Mich., July 23 /PRNewswire/ -- First-quarter fiscal 1994 earnings per share of Gerber Products Company (NYSE: GEB) declined by 14 percent to $0.38 because of lower U.S. baby food shipments and increased expenses to grow the company's international business.
 For the three months ended June 30, 1993, Gerber revenue declined to $283 million from the $315 million reported a year ago. Income before the cumulative effect of accounting changes was $26 million, or $0.38 per share, versus $33 million, or $0.44 per share, in the prior-year period. Effective in last year's first quarter, Gerber adopted new accounting rules for retiree medical benefits.
 "These results were slightly better than our expectations, which take three factors into account. First, our fiscal year plan anticipated a decline in the U.S. baby food business in the quarter because of heavy promotions and resultant trade inventory building that tended to inflate year-ago volume. Second, last year's quarter included the sales of Buster Brown Apparel, which was subsequently divested. And third, we are continuing to invest in the growth of our international businesses and to provide sustained, strong support for our domestic baby food business and our fast-growing Graduates line," said Al Piergallini, chairman, president and chief executive officer.
 Income for the food and baby care segment declined by 19 percent to $42 million versus $52 million in the first quarter of fiscal 1993.
 Sales of the apparel segment declined to $33 million from $63 million in last year's first quarter. Prior year sales include $26 million for the company's Buster Brown apparel unit which was sold in last year's fourth quarter. Operating income dropped to $426,000 from $1.5 million, a portion of which is attributable to the divestiture of Buster Brown. "Another reason for the apparel declines was reduced shipments of Gerber Childrenswear products as a result of a soft retail environment," Piergallini said.
 The other segment (life insurance) sales rose 23 percent to $25 million; operating income increased 94 percent to $4.3 million, due in part to capital gains on the sale of investments. Excluding the effect of the capital gains, operating income increased 16 percent. "Gerber Life Insurance had an excellent first quarter," Piergallini said.
 "The first-quarter performance gives us confidence about achieving our fiscal 1994 plan while we invest in building Gerber's future earnings power by expanding our international business and by growing U.S. baby food consumption, primarily with the Graduates line," Piergallini said.
 With regard to international expansion, Piergallini added that this area "continues to be a very bright star. International sales were up 24 percent over that achieved in last year's first quarter. We made progress on a number of fronts. We established a distributor relationship in Colombia. First-time-ever marketing programs were launched behind the Bobo Frut line in Poland. We are producing Gerber- branded baby food in Poland. We began shipping Gerber baby food from Poland into France. In the French market, Gerber introduced a new line of cereals as well as continued to gain new retail distribution."
 "The Graduates line of toddler food products had a sales increase of 85 percent over the first quarter of fiscal 1993 and is meeting our expectations," Piergallini said.
 Baby food sales were $201 million during the first quarter compared to $209 million last year. Worldwide baby food volume for Gerber was down 4 percent; the U.S. volume declined by 7 percent. Gerber's average retail market shares during the first quarters of fiscal 1993 and 1994 were 72.4 percent and 71.7 percent, respectively. The domestic volume decline was also influenced by slight declines in the U.S. birth rate and the per capita consumption of baby food.
 Baby care sales rose slightly in the first quarter to $25 million from $23 million a year ago. According to Piergallini, the company continues to expand the distribution of baby care in the supermarket, drug and mass-retail channels.
 GERBER PRODUCTS COMPANY
 RESULTS OF OPERATIONS(a)
 Three Months Ended June 30
 1993 1992 Pct. Change
 Net sales and revenue $282,947 $315,471 (10.3)
 Interest, royalties &
 other income 7,878 5,539 42.2
 Cost of products sold &
 services provided 151,543 174,154 (13.0)
 Mktg., distribution, admin.
 & general expenses 94,933 92,834 2.3
 Interest expense 3,036 3,345 (9.2)
 Earnings before taxes 41,313 50,677 (18.5)
 Income taxes 14,822 18,157 (18.4)
 Earnings before cumulative
 effect of accounting changes 26,491 32,520 (18.5)
 Cumulative effect of
 accounting changes --- (90,390)
 Net earnings (loss) $26,491 ($57,870)
 Earnings (loss) per share:
 Before cumulative effect of
 accounting changes $0.38 $0.44
 Cumulative effect of
 accounting changes --- (1.22)
 Net earnings (loss) per share $0.38 ($0.78)
 Average shares outstanding 70,480 74,278
 (a) Unaudited. Amounts in thousands, except per-share data.
 RESULTS BY SEGMENT(a)
 Three Months Ended June 30
 Sales and Revenue Operating Profit
 1993 1992 1993 1992
 Food and Baby Care
 Food $200,806 $209,389
 Baby Care 24,522 22,862
 Total 225,328 232,251 $41,999 $51,983
 Apparel Group 32,708 62,905 426 1,518
 Other 24,911 20,315 4,260 2,191
 Total $282,947 $315,471 $46,685 $55,692
 Interest expense (3,036) (3,345)
 Investment income 2,022 2,191
 General corp. exp. (4,358) (3,861)
 Earnings before taxes 41,313 50,677
 Income taxes 14,822 18,157
 Earnings before cumulative effect
 of accounting changes 26,491 32,520
 Cumulative effect of
 accounting changes --- (90,390)
 Net earnings (loss) $26,491 ($57,870)
 Net earnings (loss) per share $0.38 ($0.78)
 Average shares outstanding 70,480 74,278
 (a) Unaudited. Amounts in thousands, except per-share data.
 CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION(a)
 As of June 30,
 1993 1992
 Assets
 Cash and short-term investments $53,413 $96,598
 Accounts receivable 89,893 126,423
 Inventories 189,000 213,976
 Other current assets 76,913 56,624
 Total current assets 409,219 493,621
 Other assets 291,575 241,012
 Net land, buildings and equipment 239,607 227,953
 Total $940,401 $962,586
 Liabilities and Shareholders' Equity
 Current liabilities $260,653 $235,083
 Long-term debt 116,825 125,579
 Postretirement benefits obligation 152,610 141,384
 Other liabilities 104,897 86,661
 Shareholders' equity 305,416 373,879
 Total $940,401 $962,586
 (a) Unaudited. Amounts in thousands.
 -0- 7/23/93 R
 /CONTACT: Tim Croasdaile of Gerber Products Company, 616-928-2718/
 (GEB)


CO: Gerber Products Company ST: Michigan IN: FOD SU: ERN

DD-JB -- DE003R -- 5091 07/23/93 11:16 EDT
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Publication:PR Newswire
Date:Jul 23, 1993
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