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GERBER POSTS 3-PERCENT EARNINGS GAIN IN FIRST QUARTER -- $0.93 VS. $0.90

GERBER POSTS 3-PERCENT EARNINGS GAIN IN FIRST QUARTER -- $0.93 VS. $0.90
 FREMONT, Mich., July 28 /PRNewswire/ -- Gerber Products Company (NYSE: GEB) continued its record of strong year-to-year volume increases for its baby food business in the first quarter of Fiscal 1993. Higher expenses related to business growth programs and reduced baby formula licensing income moderated the company's first-quarter earnings. Earnings per share rose 3 percent to $0.93 per share; revenue increased 8 percent to $315 million. Both were records.
 For the three months ended June 30, 1992, Gerber's revenue was $315 million compared to $293 million in Fiscal 1992's first quarter. Net earnings in the Fiscal 1993 first quarter were $34.4 million, or $0.93 per share, compared to $33.7 million, or $0.90 per share in the prior-year period.
 "With the exception of reduced formula licensing income, our first- quarter results met our expectations. Our baby food business continued to expand both in the U.S. and internationally. The apparel business results were on plan. Last year's first quarter still had strong cloth diaper business; Fiscal 1993 does not. Gerber Life Insurance continued its excellent performance," said Al Piergallini, Gerber chairman and chief executive officer.
 For the first quarter, the food and baby care segment's sales increased 9 percent to $232 million. Operating income decreased 2 percent to $52.3 million from the $53.1 million in last year's first quarter. Worldwide baby food volume grew 4 percent over the previous year. Higher marketing expenses related to increased retail distribution for baby food and baby care, new product introductions and international expansion decreased income. During the quarter, Gerber added 320 baby food items in 12 major U.S. retail chains and 680 baby care items in 17 accounts. "We promoted a number of new products in the quarter such as our new line of Fruit & Veggie juices. This line may prove to be one of our most successful new product introductions to date," Piergallini said. "In addition, the quarter's income was adversely affected by reduced income from our licensing arrangement with Bristol Myers for baby formula under the Gerber brand name. This was a result of lower sales of the formula due to reduced marketing support by the licensee."
 The apparel group sales for the first quarter of Fiscal 1993 were $62.9 million, down 1 percent from last year's quarter. Operating income decreased 60 percent from last year to $1.7 million. "Gerber Childrenswear met our expectations in this year's first quarter. The drastic fall off in demand for our cloth diaper business did not occur until the second quarter of last year. Because this lost business is a continuing factor, an 'apples-to-apples' comparison will not be possible until the next quarter," he said. Gerber recently announced that it is considering the sale of its Buster Brown apparel unit which contributed $267 million in revenue to this year's first quarter.
 The other segment's first-quarter revenue increased 28 percent to $20.3 million; operating income increased 51 percent to $2.3 million. According to Piergallini, "With the exception of a small portion of the sales and income in last year's first quarter related to a sold printing business, this segment represents the results of Gerber Life Insurance. This business keeps chugging along, producing quarter after quarter of excellent earnings."
 "Because of continued marketing spending -- primarily behind the introduction of the Gerber Graduates line of food for toddlers -- the second-quarter earnings increase over the prior year will also be somewhat modest. However, the second six months will have excellent increases over the prior year so that for the full year Gerber will produce earnings in excess of our stated goal of 6 percent to 8 percent real growth and consistent with current analyst estimates," Piergallini said.
 GERBER PRODUCTS COMPANY
 RESULTS OF OPERATIONS(A)
 THREE MONTHS ENDED JUNE 30
 PCT.
 1992 1991 CHANGE
 Net Sales and Revenue $315,471 $293,084 7.6
 Interest, Royalties & Other
 Income 5,539 6,000 (7.7)
 Cost of Products Sold &
 Services Provided 173,669 158,455 9.6
 Mktg., Distribution, Admin.
 and General Expenses 90,627 82,699 9.6
 Interest Expense 3,345 4,234 (21.0)
 Income Before Taxes 53,369 53,696 (0.6)
 Provision for Income Taxes 18,961 20,043 (5.4)
 Net Earnings $34,408 $33,653 2.2
 Net Earnings Per Share $.93 $.90 3.3
 Average Shares Outstanding 37,139 37,411
 RESULTS BY SEGMENT(A)
 THREE MONTHS ENDED JUNE 30
 Sales and Revenue Operating Profit
 1992 1991 1992 1991
 Food and Baby Care
 Food $209,389 $189,454
 Baby Care 22,862 23,980
 Total 232,251 213,434 $52,330 $53,156
 Apparel Group 62,905 63,787 1,651 4,079
 Other 20,315 15,863 2,251 1,488
 Total $315,471 $293,084 56,232 58,723
 Interest Expense (3,345) (4,234)
 Investment Income 2,191 2,663
 General Corp. Exp. (1,709) (3,456)
 53,369 53,696
 Income Taxes 18,961 20,043
 Net Earnings $34,408 $33,653
 (A) -- Unaudited. Amounts in thousands, except per-share data.
 CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION(A)
 AS OF JUNE 30
 1992 1991
 Assets
 Cash and Short-Term Investments $96,598 $146,477
 Accounts Receivable 126,423 107,349
 Inventories 213,976 204,282
 Total Current Assets 436,997 458,108
 Other Assets 237,368 196,459
 Net Land, Buildings and Equipment 227,953 204,756
 Total $902,318 $859,323
 Liabilities and Shareholders' Equity
 Current Liabilities $208,383 $197,621
 Long-Term Debt 125,579 164,422
 Other Liabilities 102,199 78,777
 Shareholders' Equity 466,157 418,503
 Total $902,318 $859,323
 (A) -- Unaudited. Amounts in thousands.
 -0- 7/28/92
 /CONTACT: Tim Croasdaile, vice president - Investor Relations & Corp. Affairs, 616-928-2718/
 (GEB) CO: Gerber Products Company ST: Michigan IN: FOD SU: ERN


KR-JG -- DE009 -- 3997 07/28/92 10:48 EDT
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Date:Jul 28, 1992
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