MULTIFOODS REPORTS 1993 AND FOURTH QUARTER EARNINGS Performance Steady in Difficult Economy
MINNEAPOLIS, April 15 /PRNewswire/ -- International Multifoods Corp. (NYSE: IMC) today announced that net earnings were $41.2 million, or $2.13 per share, in fiscal 1993. That compares with fiscal 1992 net earnings of $39.1 million, or $2 per share, before reflecting the adoption of a new accounting standard for post-retirement health benefits. Including the accounting change, the company reported net earnings of $22 million, or $1.12 per share, in fiscal 1992. Fiscal 1992 results also included the following special items: a gain of $37.3 million from the sale of the company's North American agribusinesses, which were divested in December 1991; and a charge of $33.9 million for costs to further integrate the company's foodservice businesses, to write down certain intangible assets and to consolidate facilities. This charge, along with a $1.9 million charge related to an unconsolidated affiliate, offset the gain in 1992 on an after-tax basis. Sales for the year ended Feb. 28 were $2.22 billion, compared with $2.28 billion in 1992. When these sales are adjusted to exclude results from units divested in fiscal 1992, sales increased 6 percent. "Multifoods produced stable results amid a prolonged period of slow economic growth in its key markets. The company continues to take steps to focus on its core businesses and to identify ways to serve its customers more effectively and efficiently. The 1993 results demonstrate our ability to maintain progress through difficult economic times," said Tony Luiso, chairman, president and chief executive officer. "At the same time, we are committed to our strategy of being differentiated by quality and service, and are building on our strengths in anticipation of changing customer and market requirements." Segment earnings in fiscal 1993 were $76.6 million, compared with $78.2 million in 1992, excluding unusual items and divested businesses. Results in fiscal 1993 reflect growth in U.S. Foodservice and Venezuelan Foods, which were more than offset by the effects of the weak economy in Canada. Net interest expense in fiscal 1993 declined 37 percent to $11.9 million from $18.8 million in 1992. In addition, the company benefited from a lower effective tax rate, primarily from lower non-U.S. taxes, of 37.6 percent in fiscal 1993, compared with a 42 percent effective tax rate in 1992. Multifoods posted a return on beginning equity of 13.1 percent, compared with 12.1 percent in 1992. "In 1990, the company's return on equity was 8.5 percent," Luiso said. "Since that time, we have made significant progress toward our interim ROE goal of 15 percent."
Fiscal 1993 Segment Results
U.S. Foodservice. Sales for U.S. Foodservice in fiscal 1993 were $1.67 billion, up from $1.6 billion in 1992. The 4 percent sales improvement was primarily achieved from volume growth in some product lines and from acquisitions, despite the effects of a business environment characterized by intense pricing pressure. Earnings for the segment were $33.9 million, up 3 percent from $32.9 million, before unusual items in 1992. Results in 1993 benefited from cost and productivity improvements but were partially offset by a change in vending distribution product mix and competitive pricing pressures in the segment. "U.S. Foodservice faced a difficult year with continued soft demand in key end markets and increased competition in the industry. Nevertheless the business performed well in 1993," Luiso said. "We continue to invest in the business to enhance our ability to deliver superior customer service and, as a result, to differentiate ourselves and favorably position us for long-term growth." Canadian Foods. Fiscal 1993 sales in Canadian Foods were up 13 percent to $294.9 million from $261.2 million in 1992. This increase, which was partially offset by the effects of currency translation, stemmed from the acquisition of Gourmet Baker, a frozen bakery products business acquired early in fiscal 1993, and volume growth in industrial bakery mix products. Earnings for the segment in fiscal 1993 were $18.2 million, compared with $22.6 million, before unusual items, in 1992. The decrease in earnings was the result of continued economic weakness in Canada and a 7 percent decline in the exchange rate. "We achieved volume growth in new products and benefited from the strategic acquisition of Gourmet Baker, which favorably positions us for future growth in our target markets on a North American basis," Luiso said. "In the near term, the industry continues under margin pressure because of pricing competition and ongoing weakness in consumer confidence in Canada." Venezuelan Foods. Sales for Venezuelan Foods were $261.2 million, compared with $239.6 million in fiscal 1992. The 9 percent increase reflects solid sales growth in both consumer and agricultural products, offsetting a slight decline in industrial product sales. Venezuelan Foods' earnings in fiscal 1993 were $24.5 million, up 8 percent from $22.7 million in 1992. "Performance in Venezuela continues to outpace the market despite the changing political and economic realities of the region," Luiso said. "Over the past several years, we have leveraged more than 35 years of experience and credibility in the country. In fiscal 1993, this enabled us to expand our rice business in response to customers' basic food needs in the country. Today, we have a strong presence in each of the four major grains."
Fourth-Quarter Summary ? In the fourth quarter, Multifoods' net earnings were $10.6 million, or 55 cents per share, compared with $9.3 million, or 48 cents per share, a year earlier. Sales in the quarter were $537.1 million, compared with $551.7 million in 1992. Overall, earnings increased primarily due to reduced interest expense and a lower effective tax rate.
U.S. Foodservice posted fourth-quarter segment earnings of $7.1 million, up slightly from $6.8 million, excluding unusual items, a year ago. Sales for the segment were $409 million, compared with $417.9 million in the fourth quarter of 1992. Earnings for the company's Canadian Foods segment were $4.5 million, compared with $5.3 million, before unusual items, in the year-earlier period. Sales in the quarter were $67.8 million, up slightly from $66.8 million in the same quarter in 1992. 1993 fourth-quarter earnings for Venezuelan Foods were $6.3 million, up from $5.8 million in 1992. Sales were $60.3 million, down from $67 million a year earlier. Minneapolis-based Multifoods is a diversified food company with major operations in the United States, Canada and Venezuela. INTERNATIONAL MULTIFOODS CORPORATION CONSOLIDATED STATEMENTS OF EARNINGS (Unaudited) (in millions, except EPS) Fiscal Year Ended the Last Day of February FY 1993 FY 1992 Net Sales $2,223.9 $2,281.4 Cost of Sales (1,949.8) (1,972.4) Selling, General and Administrative (197.5) (221.3) Unusual Items - 3.4 Interest, net (11.9) (18.8) Corporate (0.4) (2.8) Earnings (Losses) from Unconsolidated Affiliates 1.8 (2.1) Earnings Before Income Taxes and Cumulative Effect of Accounting Change 66.1 67.4 Income Taxes (24.9) (28.3) Earnings Before Cumulative Effect of Accounting Change 41.2 39.1 Cumulative Effect of Accounting Change, net of taxes - (17.1)(1) Net Earnings $ 41.2 $ 22.0 Earnings Per Share of Common Stock: Before Cumulative Effect of Accounting Change $ 2.13 $ 2.00 Cumulative Effect of Accounting Change - (0.88)(1) Net Earnings Per Share of Common Stock $ 2.13 $ 1.12 Average Shares of Common Stock Outstanding 19.3 19.5 Fourth Quarter Ended the Last Day of February FY 1993 FY 1992 Net Sales $ 537.1 $ 551.7 Cost of Sales (470.9) (481.5) Selling, General and Administrative (48.3) (52.3) Unusual Items - 3.4 Interest, net (1.9) (3.7) Corporate (0.5) (1.1) Earnings (Losses) from Unconsolidated Affiliates 0.9 (1.6) Earnings Before Income Taxes 16.4 14.9 Income Taxes (5.8) (5.6) Net Earnings $ 10.6 $ 9.3 Net Earnings Per Share of Common Stock $ 0.55 $ 0.48 Average Shares of Common Stock Outstanding 19.3 19.4 (1) Accounting change related to the adoption of Statement of Financial Accounting Standards No. 106 "Employers' Accounting for Post- retirement Benefits Other than Pensions." INTERNATIONAL MULTIFOODS CORPORATION EARNINGS DIGEST (Unaudited) (in millions) FY 1993 - Twelve Months Ended February 28 Net Operating Unusual Sales Costs Items Total U.S. Foodservice $1,667.8 $(1,633.9) $ - $ 33.9 Canadian Foods 294.9 (276.7) - 18.2 Venezuelan Foods 261.2 (236.7) - 24.5 Total $2,223.9 $(2,147.3) $ - $ 76.6 Segment Earnings $ 76.6 Interest, net (11.9) Corporate Unallocated (0.4) Earnings from Unconsolidated Affiliates 1.8 Earnings Before Income Taxes $ 66.1 FY 1992 - Twelve Months Ended February 29 Net Operating Unusual Sales Costs Items(1) Total U.S. Foodservice $1,604.8 $(1,571.9) $ (32.7) $ 0.2 Canadian Foods 261.2 (238.6) (1.2) 21.4 Venezuelan Foods 239.6 (216.9) - 22.7 Divested Businesses 175.8 (166.3) 37.3 46.8 Total $2,281.4 $(2,193.7) $ 3.4 $ 91.1 Segment Earnings $ 91.1 Interest, net (18.8) Corporate Unallocated (2.8) Losses from Unconsolidated Affiliates (2) (2.1) Earnings Before Income Taxes and Cumulative Effect of Accounting Change $ 67.4 (1) Unusual Items FY 1992 Write-down of certain intangible assets - U.S. Foodservice $ (14.9) Consolidation within U.S. Foodservice (17.8) Reorganization within Canadian Foods (1.2) Gain on divestiture of North American Agriculture operations 37.3 Total Unusual Items $ 3.4 (2) Included a write-down of $1.9 million related to an unconsolidated affiliate in Mexico. INTERNATIONAL MULTIFOODS CORPORATION EARNINGS DIGEST (Unaudited) (in millions) FY 1993 - 4th Quarter Ended February 28 Net Operating Unusual Sales Costs Items Total U.S. Foodservice $409.0 $(401.9) $ - $ 7.1 Canadian Foods 67.8 (63.3) - 4.5 Venezuelan Foods 60.3 (54.0) - 6.3 Total $537.1 $(519.2) $ - $ 17.9 Segment Earnings $ 17.9 Interest, net (1.9) Corporate Unallocated (0.5) Earnings from Unconsolidated Affiliates 0.9 Earnings Before Income Taxes $ 16.4 FY 1992 - 4th Quarter Ended February 29 Net Operating Unusual Sales Costs Items(1) Total U.S. Foodservice $ 417.9 $(411.1) $ (32.7) $(25.9) Canadian Foods 66.8 (61.5) (1.2) 4.1 Venezuelan Foods 67.0 (61.2) - 5.8 Divested Businesses - - 37.3 37.3 Total $ 551.7 $(533.8) $ 3.4 $ 21.3 Segment Earnings $ 21.3 Interest, net (3.7) Corporate Unallocated (1.1) Losses from Unconsolidated Affiliates (2) (1.6) Earnings Before Income Taxes $ 14.9 (1) Unusual Items FY 1992 Write-down of certain intangible assets - U.S. Foodservice $ (14.9) Consolidation within U.S. Foodservice (17.8) Reorganization within Canadian Foods (1.2) Gain on divestiture of North American Agriculture operations 37.3 Total Unusual Items $ 3.4 (2) Included a write-down of $1.9 million related to an unconsolidated affiliate in Mexico. /CONTACT: Jill Schmidt (media), 612-851-1625 or 612-340-3410; or Yolanda M. Scharton (investors), 612-340-3621, both for International Multifoods/ (IMC)
CO: International Multifoods Corporation ST: Minnesota IN: FOD SU: ERN
DS -- MN006 -- 6030 04/15/93 08:52 EDT
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|Date:||Apr 15, 1993|
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