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 PITTSBURGH, Dec. 7 /PRNewswire/ -- H.J. Heinz Company (NYSE: HNZ) announced today a 4 percent increase in sales (11 percent excluding currency fluctuations) and a 25 percent increase in earnings per share for the second quarter ended Oct. 27, 1993. Earnings per share were $0.75 in the second quarter, up $0.15 per share compared to $0.60 per share for the same period last year. The earnings per share figures for the second quarter results include a gain of $0.24 per share from the sale of the confectionery business of Heinz Italy and the sale of the Near East specialty rice business. Excluding this gain, earnings per share from operations were $0.51 compared to $0.60 last year; the decrease is primarily due to the strength of the U.S. dollar against most overseas currencies, increased marketing expense (up 13 percent) and a higher tax rate of 37 percent compared to 31 percent in the second quarter last year. Net income was $193.1 million, up from $154.2 million last year.
 Sales for the quarter totaled $1.81 billion, up $69.2 million or 4 percent from $1.74 billion last year. The increase in sales is due to volume gains (3 percent), price increases (2 percent) and acquisitions, net of divestitures (6 percent). Sales were adversely impacted by the strengthening U.S. dollar against most currencies, primarily the Pound Sterling and Italian Lira, which reduced sales by $124 million (7 percent). Excluding the effect of foreign exchange, sales would have increased by 11 percent.
 Volume gains occurred in most grocery and foodservice product categories. Heinz ketchup was up 16 percent in the U.S., Ore-Ida frozen potatoes were up 6 percent, Heinz pet food was up 8 percent, and StarKist light meat tuna was up 12 percent. Price increases in most of the company's core products also contributed to the sales increase.
 Commenting on the results, Anthony J.F. O'Reilly, Heinz chairman, president and chief executive officer, said: "The improvement in Heinz's businesses is very encouraging. Overseas there are signs of some recovery in European markets and in Asia/Pacific, Wattie's continues to perform ahead of expectations. Although the company's financial performance was adversely impacted by a difficult comparison with last year due to weak European currencies and a higher effective tax rate, most of our major brands exhibited volume growth and increased market shares confirming the intrinsic strength of our brand franchises. Our foodservice business, a major growth opportunity for Heinz, also performed extremely well, building on the recent acquisitions of JLFoods, the Moore's and Domani brands in the U.S., and Arimpex in Italy."
 For the six months, net income was $345.3 million, up $181.0 million from last year's total of $164.3 million (which included the cumulative effect of an accounting change of $133.6 million ($0.51 per share) for certain post-retirement benefits recorded in the first quarter last year). Earnings per share for the six-month period were $1.34 per share, up $0.70 per share from $0.64 per share last year.
 Sales for the six months increased 3 percent or $88.0 million to $3.39 billion from $3.30 billion last year. Foreign exchange reduced sales by $224 million or 7 percent. Excluding the effect of foreign exchange, sales would have increased by 10 percent, comprised of a 2 percent increase in volume, a 2 percent increase in price and a 6 percent increase from acquisitions, net of divestitures.
 Consolidated Statement of Income
 (000's omitted - except for per share amounts)
 Second Quarter Ended Six Months Ended
 Oct. 27, Oct. 28, Oct. 27, Oct. 28,
 1993 1992 1993 1992
 Sales $ 1,807,729 $ 1,738,559 $ 3,391,041 $ 3,303,000
 Cost of
 products sold 1,158,722 1,086,264 2,122,060 2,049,203
 Gross profit 649,007 652,295 1,268,981 1,253,797
 Selling, general
 and administrative
 expenses 428,576 390,662 775,337 733,099
 Gain on sale of
 confectionery and
 specialty rice
 businesses 127,001 -- 127,001 --
 Operating income 347,432 261,633 620,645 520,698
 Interest income 6,455 6,356 14,968 13,978
 Interest expense 35,578 33,183 74,746 63,716
 Other expenses, net 9,605 10,807 17,980 20,876
 Income before
 income taxes and
 cumulative effect
 of accounting
 change 308,704 223,999 542,887 450,084
 Provision for
 income taxes 115,579 69,833 197,583 152,128
 Income before
 accounting change 193,125 154,166 345,304 297,956
 Cumulative effect of
 FAS 106 adoption -- -- -- (133,630)
 Net income $ 193,125 $ 154,166 $ 345,304 $ 164,326
 Income per share:
 Income before
 cumulative effect of
 accounting change $.75 $.60 $1.34 $1.15
 Cumulative effect of
 accounting change -- -- -- $(0.51)
 Net income per share $.75 $.60 $1.34 $.64
 Dividends per share $.33 $.30 $.63 $.57
 Fiscal 1993 year-to-date results have been restated to reflect the adoption of statement of Financial Accounting Standards No. 106, Accounting for Post-Retirement Benefits Other Than Pensions.
 -0- 12/7/93
 /CONTACT: D. Edward I. Smyth, vp-Corpoarte Affairs, 412-456-5780, or Debora S. Foster, general manager-Corporate Communications, 412-456-5778; or John E. Kennedy, 412-456-3586, or L. Michael Kelly Jr., 412-456-3840, both of Ketchum Public Relations, for H.J. Heinz/

CO: H.J. Heinz Company ST: Pennsylvania IN: FOD SU: ERN

DM-CD -- PG003 -- 1148 12/07/93 08:33 EST
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Publication:PR Newswire
Date:Dec 7, 1993

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