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PEPSICO REPORTS RESULTS

 PEPSICO REPORTS RESULTS
 PURCHASE, N.Y., Feb. 4 /PRNewswire/ -- PepsiCo, Inc. (NYSE: PEP)


today announced a 10 percent increase in net income for 1991 before unusual charges. On the same basis, earnings per share grew 9 percent to $1.50 and sales grew 10 percent to a record $19.6 billion. These results reflect double-digit restaurant and soft drink profit growth as well as lower interest costs.
 Unusual charges in 1991 totaled $119.8 million after tax or $0.15 per share. Net unusual charges in 1990 totaled $17.9 million or $0.03 per share. Reported net income and earnings per share, which include the unusual charges, were even with last year at $1.1 billion and $1.35, respectively.
 Wayne Calloway, chairman and chief executive officer of PepsiCo, said: "1991 was an important year for PepsiCo. In one of the most difficult consumer environments we've seen in a decade, we were able to achieve a solid gain in ongoing profits. International performance was particularly impressive in soft drinks and restaurants. In addition, we made significant restructuring investments in our domestic and international snack foods businesses and KFC so that they can compete more effectively in the coming years."
 Fourth Quarter Results
 Before unusual charges, net income advanced 14 percent in the quarter, earnings per share grew 11 percent to $0.41 and sales gained nine percent to $5.9 billion. The profit performance was driven by particularly strong growth from soft drinks and Pizza Hut. Reported net income was up two percent to $271.1 million and earnings per share were $0.34, even with 1990.
 Fourth Quarter Unusual Charges
 Restructuring charges in the quarter totaled $69.6 million ($57.4 million after tax or $0.07 per share). They were:
 -- $34.0 million at KFC primarily for the elimination of
 certain positions, the relocation of personnel and the
 closing of offices. This restructuring is focused on
 streamlining processes to improve productivity and
 customer service.
 -- $23.6 million related to productivity initiatives in the
 U.K. snack foods business, including plant closure,
 administrative streamlining, and the creation of a sales
 organization, representing both Smiths and Walkers,
 focused solely on the important non-supermarket channel.
 -- $12.0 million for probable actions related to a small,
 unprofitable international snack foods business,
 including a disposition or joint venture arrangement.
 Anticipated annual pretax savings from these actions, when fully implemented, will be $40-50 million. This will provide KFC and international snack foods additional resources to reinvest in their businesses to more effectively execute marketplace strategies.
 Fourth quarter charges in 1990 totaled $26.3 million ($22.5 million after tax or $0.03 per share) for the reorganization of Pizza Hut operations and a write-down of an international Pizza Hut joint venture.
 Soft Drinks
 Fourth Quarter
 Operating profits surged 29 percent in the fourth quarter to $199.1 million on a sales increase of 6 percent to $2.0 billion. This profit performance was driven by a 22 percent increase in domestic earnings due principally to higher concentrate pricing and lower ingredient costs. Domestic profit growth was also enhanced by the combined impact of a 1991 gain on the sale of a bottling property and write-downs of similar properties in 1990. International profits posted a nearly five fold increase against a soft fourth quarter last year. This was due primarily to double digit volume advances and higherpricing in Latin America.
 Full Year
 Full year profits for worldwide soft drinks were up a solid 11 percent, excluding the domestic unusual charges in 1990, on sales growth of 6 percent. On the same basis, domestic profits grew 9 percent and international profits grew 25 percent. Reported worldwide profits advanced 12 percent.
 Volume
 U.S. bottler case sales were even for the quarter and full year. Excluding the impact of the loss of the Burger King business in 1990, full-year growth was two percent, driven by gains in the Mountain Dew and Diet Pepsi categories.
 International bottler case sales grew nine percent for the quarter and 6 percent for the full year. Earlier in the year, bottler case sales growth was affected by the cut-off of concentrate shipments to Iraq and Kuwait in 1990. Excluding this impact, growth for the full year was 8 percent. Both quarter and full year gains were driven by double digit growth in Latin America.
 Snack Foods
 Fourth Quarter
 Excluding the international restructuring charges, worldwide snack food profits were down 1 percent in the fourth quarter on a sales increase of 5 percent to $1.7 billion. Reported profits fell 13 percent to $262.2 million.
 Frito-Lay, the domestic snack company, saw profits fall 3 percent against a particularly strong fourth quarter last year when profits grew 17 percent. These results were based on a mix shift toward lower profit packages and products and higher promotional expense, partially offset by solid volume increases and lower G&A expense. International snack food profits grew 6 percent excluding the restructuring charges. This performance was led by profit growth in Mexico due primarily to higher volumes. Profits in the U.K. declined as higher operating expenses were only partially offset by solid volume advances. Profits in Spain declined primarily due to soft volume performance. Reported international profits were down 51 percent.
 Full Year
 Excluding unusual charges, full year profits in worldwide snack foods declined three percent on a sales increase of 10 percent. Domestic profits declined 5 percent and international profits were up 2 percent.
 These results exclude 1991 restructuring charges for both domestic and international operations totalling $127.0 million as well as $10.6 million in domestic unusual charges in 1990. Reported profits for worldwide snack foods for the full year fell 16 percent.
 Volume
 Domestic pound growth for Frito-Lay was 5 percent in the fourth quarter and a strong 7 percent for the full year. These gains were driven by Tostitos and Sun Chips, with Lay's and Chee.tos also spurring full year growth.
 International snack chip volume advanced one percent in the quarter with gains in the U.K. and Mexico partially offset by a decline in Spain. For the full year, volume growth was 6 percent driven by double- digit growth in Mexico, as the U.K. and Spain were about even with 1990.
 Restaurants
 Fourth Quarter
 Worldwide restaurant profits, excluding unusual charges in both 1991 and 1990, grew 2 percent in the fourth quarter on a sales increase of 15 percent to $2.2 billion. These results reflect a 3 percent decline in domestic profits, due to soft results at KFC, and a strong 34 percent gain in international profits. Reported worldwide profits fell 13 percent to $135.9 million.
 Full Year
 Full year profits for worldwide restaurants excluding unusual charges advanced 12 percent on sales growth of 14 percent. Domestic earnings grew 10 percent and international profits were up 25 percent. Reported worldwide profits were up 10 percent.
 Pizza Hut
 Fourth quarter profits grew a strong 16 percent excluding the impact of an unusual charge last year, and sales increased 11 percent to $1.0 billion. Both the domestic and international businesses posted double digit earnings growth. Domestic performance was fueled by the delivery/ carry out business which benefited from strong volume gains as well as unit additions. Reported worldwide profits grew 34 percent to $89.8 million.
 Full year profits, excluding 1990 unusual charges, grew a strong 19 percent on a 10 percent increase in sales. Reported profits grew 28 percent.
 Same store sales for domestic company-owned units grew 1 percent for both the quarter and the full year. These gains were driven by strong growth in the delivery/carry-out business which was partially offset by a decline in traditional stores.
 KFC
 Profits declined 33 percent in the fourth quarter, excluding the impact of the 1991 restructuring charge, on sales growth of 19 percent to $571.2 million. These results reflect a significant decline in domestic profits, partially offset by double-digit international profit growth. The significant decline in domestic profits against a very strong quarter last year was primarily a result of lower volumes which were only partially offset by reduced discounting. In addition, higher food and labor costs contributed to lower profits. The international profit advance reflected additional units, primarily in Canada and Australia, and higher volumes driven by Mexico. Including the restructuring charge, KFC reported a loss of $10.9 million.
 Full year profits, excluding unusual charges in 1991 and 1990, declined 6 percent on a sales gain of 20 percent. Profit results for the full year reflect a decline in the domestic business partially offset by double-digit international growth. Reported profits declined 37 percent. Same store sales for domestic company-owned units declined 7 percent in the quarter and were about even for the full year.
 Taco Bell
 Profits in the fourth quarter grew 5 percent to $57.0 million on a strong sales gain of 17 percent to $655.1 million. This profit performance was the result of volume gains and additional units, partially offset by lower pricing, higher advertising costs and strategic spending for market manager hiring and training, new concepts and advanced computer systems.
 Full year profits, excluding an unusual charge in 1990, advanced 18 percent on a sales gain of 17 percent. Reported profits increased 21 percent for the year.
 Same store sales for domestic company-owned units grew 4 percent in the quarter and 5 percent for the year.
 PEPSICO, INC. AND SUBSIDIARIES
 Condensed Consolidated Statement of Income
 (In millions except per share amounts, unaudited)
 16 Weeks Ended Percent
 12/28/91 12/29/90(A) Change
 Net sales $5,929.8 $5,444.6 9
 Costs and expenses:
 Cost of sales 2,847.5 2,619.0 9
 Selling, general and
 administrative expenses 2,443.8(b) 2,228.9(C) 10
 Amortization of goodwill
 and other intangibles 68.7 57.8 19
 Interest expense 186.5 211.6 (12)
 Interest income (47.9) (59.6) (20)
 5,498.6 5,057.7 9
 Income before income taxes 431.2(B) 386.9(C) 11
 Provision for income taxes(D) 160.1 121.0 32
 Net income $ 271.1(B) $ 265.9(C) 2
 Net income per share $ 0.34(B) $ 0.34(C) -
 Average shares outstanding 800.4 797.2
 NOTES:
 (A) Reflects a reclassification to conform with 1991 presentation.
 (B) Includes unusual charges totaling $69.6 ($57.4 after-tax or $0.07 per share) consisting of restructuring charges of $35.6 at international snack foods and $34.0 at worldwide KFC.
 (C) Includes unusual charges totaling $26.3 ($22.5 after-tax or $0.03 per share) at worldwide Pizza Hut consisting of a $15.9 charge to write-down the investment in an international joint venture and $10.4 in reorganization charges.
 (D) The effective tax rates were 37.1% in 1991 and 31.3 percent in 1990. Excluding the unusual tax effects on the restructuring charges at international snack foods in 1991 and the write-down of the investment in an international Pizza Hut joint venture in 1990, the effective tax rates were 34.3 percent and 30.0 percent, respectively.
 PEPSICO, INC. AND SUBSIDIARIES
 Condensed Consolidated Statement of Income
 (In millions except per share amounts, unaudited)
 52 Weeks Ended Percent
 12/28/91 12/29/90(A) Change
 Net sales $19,607.9 $17,802.7 10
 Costs and expenses:
 Cost of sales 9,395.5 8,549.4 10
 Selling, general and
 administrative expenses 7,880.8(B) 7,008.6 (C) 12
 Amortization of goodwill
 and other intangibles 208.7 189.1 10
 Gain on joint venture
 stock offering - (118.2)(C) -
 Interest expense 615.9 688.5 (11)
 Interest income (163.3) (182.1) (10)
 17,937.6 16,135.3 11
 Income from continuing operations
 before income taxes 1,670.3(B) 1,667.4 (C) -
 Provision for income taxes(E) 590.1 576.8 2
 Income from continuing
 operations 1,080.2(B) 1,090.6 (C) (1)
 Discontinued operation charge - (13.7)(D) -
 Net income $ 1,080.2 $ 1,076.9 -
 Per share:
 Continuing operations $ 1.35(B) $ 1.37 (C) (1)
 Discontinued operation - (0.02)(d) -
 Net income per share $ 1.35 $ 1.35 -
 Average shares outstanding 802.5 798.7
 NOTES:
 (A) Reflects a reclassification to conform with 1991 presentation.
 (B) Includes unusual charges totaling $170.0 ($119.8 after-tax or $0.15 per share) consisting of restructuring charges of $127.0 at worldwide snack foods and $34.0 at worldwide KFC, as well as a $9.0 charge at domestic KFC related to a delayed national roll-out of the new skinfree chicken product.
 (C) Includes a net unusual credit of $35.2 ($4.2 charge after-tax or $0.01 per share) consisting of the $118.2 gain on joint venture stock offering partially offset by $83.0 in unusual charges described below.
 (D) Represents a $14.0 charge for pending lawsuits and claims relating to a business sold in a prior year.
 (E) The effective tax rates were 35.3 percent in 1991 and 34.6 percent in 1990. Excluding the unusual tax effects on the restructuring charges at international snack foods in 1991 as well as the gain on joint venture stock offering and the write-down of the investment in an international Pizza Hut joint venture in 1990, the effective tax rates were 34.6 percent and 32.7 percent, respectively.
 PEPSICO, INC. AND SUBSIDIARIES
 Analysis of Selected Components of Income and Income Per Share
 (In millions, except per share amounts, unaudited)
 Fourth Quarter Year-To-Date
 1991 1990 1991 1990
 Net income $ 271.1 $ 265.9 $1,080.2 $1,076.9
 Discontinued operation
 Charge 13.7
 Income from continuing
 operations 271.1 265.9 1,080.2 1,090.6
 Unusual charges (credit)
 Included in continuing operations:
 Restructurings
 -Worldwide KFC 21.8 21.8
 -International snack foods 35.6 35.6
 -Domestic snack foods 56.9
 KFC delayed new product 5.5
 Joint venture write-down 15.9 15.9
 Pizza Hut reorganization 6.6 6.6
 Joint venture stock offering (53.0)
 Accelerated contributions 11.0
 Restaurant closures 10.8
 Receivables exposures 12.9
 Total unusual items 57.4 22.5 119.8 4.2
 Income from continuing operations
 excluding unusual items $ 328.5 $ 288.4 $1,200.0 $1,094.8
 Net income per share $ 0.34 $ 0.34 $ 1.35 $ 1.35
 Discontinued operation
 charge per share 0.02
 Income per share from
 continuing operations 0.34 0.34 1.35 1.37
 Unusual charges (credit)
 Included in continuing operations:
 Restructurings
 -Worldwide KFC 0.03 0.03
 -International snack foods 0.04 0.04
 -Domestic snack foods 0.07
 KFC delayed new product 0.01
 Joint venture write-down 0.02 0.02
 Pizza Hut reorganization 0.01 0.01
 Joint venture stock offering (0.07)
 Accelerated contributions 0.02
 Restaurant closures 0.01
 Receivables exposures 0.02
 Total unusual items 0.07 0.03 0.15 0.01
 Income per share from cont. opers.
 excluding unusual items $ 0.41 $ 0.37 $ 1.50 $ 1.38
 PEPSICO, INC. AND SUBSIDIARIES
 Supplemental Schedule of Net Sales and Operating Profits
 16 Weeks Ended Dec. 28, 1991 and Dec. 29, 1990
 (In millions, unaudited)
 Net Sales Operating Profits
 16 Weeks 16 Weeks 16 Weeks 16 Weeks
 Ended Ended Percent Ended Ended Percent
 12/28/91 12/29/90 Change 12/28/91 12/29/90 Change
 Soft Drinks
 -Dom $1,493.7 $1,423.8 5 $ 184.8 $ 152.0 22
 -Intl 513.9 469.1 10 14.3 2.5 472
 2,007.6 1,892.9 6 199.1 154.5 29
 Snack Foods
 -Dom 1,100.9 1,056.7 4 231.7 239.9 (3)
 -Intl 576.0 537.6 7 30.5 (A) 62.1 (51)
 1,676.9 1,594.3 5 262.2 302.0 (13)
 Restaurants
 -Dom 1,955.5 1,728.5 13 105.1 (B) 134.3 (c) (22)
 -Intl 289.8 228.9 27 30.8 (B) 21.4 (c) 44
 2,245.3 1,957.4 15 135.9 155.7 (13)
 Total
 -Dom 4,550.1 4,209.0 8 521.6 526.2 (1)
 -Intl 1,379.7 1,235.6 12 75.6 86.0 (12)
 $5,929.8 $5,444.6 9 597.2 612.2 (2)
 Interest & other corporate
 expenses, net (166.0) (225.3)(D) (26)
 Income from continuing operations
 before income taxes $ 431.2 $ 386.9 11
 Results by restaurant chain:
 Pizza
 Hut $1,019.0 $ 921.0 11 $ 89.8 $ 67.2 (c) 34
 Taco
 Bell 655.1 557.9 17 57.0 54.2 5
 KFC 571.2 478.5 19 (10.9)(b) 34.3 (132)
 $2,245.3 $1,957.4 15 $ 135.9 $ 155.7 (13)
 NOTES:
 (A) Includes $35.6 in restructuring charges to streamline the U.K. operations ($23.6) and dispose of or reduce ownership in a small, unprofitable business ($12.0).
 (B) Includes restructuring charges to streamline KFC operations of $32.8 in domestic and $1.2 in international.
 (C) Includes an $8.0 charge to consolidate domestic Pizza Hut field operations and a $2.4 charge to relocate international Pizza Hut headquarters.
 (D) Includes a $15.9 charge to write-down the investment in an international Pizza Hut joint venture.
 PEPSICO, INC. AND SUBSIDIARIES
 Supplemental Schedule of Net Sales and Operating Profits
 52 Weeks Ended Dec. 28, 1991, and Dec. 29, 1990
 (in millions, unaudited)
 Net Sales Operating Profits
 52 Weeks 52 Weeks 52 Weeks 52 Weeks
 Ended Ended Percent Ended Ended Percent
 12/28/91 12/29/90 Change 12/28/91 12/29/90 Change
 Soft Drinks
 -Dom $ 5,171.5 $ 5,034.5 3 $ 746.2 $ 673.8 (D) 11
 -Intl 1,743.7 1,488.5 17 117.1 93.8 25
 6,915.2 6,523.0 6 863.3 767.6 12
 Snack Foods
 -Dom 3,737.9 3,471.5 8 616.6 (A) 732.3 (D) (16)
 -Intl 1,827.9 1,582.5 16 171.0 (B) 202.1 (15)
 5,565.8 5,054.0 10 787.6 934.4 (16)
 Restaurants
 -Dom 6,258.4 5,540.9 13 479.4 (C) 447.2 (E) 7
 -Intl 868.5 684.8 27 96.2 (C) 75.2 (E) 28
 7,126.9 6,225.7 14 575.6 522.4 10
 Total
 -Dom 15,167.8 14,046.9 8 1,842.2 1,853.3 (1)
 -Intl 4,440.1 3,755.8 18 384.3 371.1 4
 $19,607.9 $17,802.7 10 $ 2,226.5 $ 2,224.4 -
 Interest & Other Corporate
 Expenses, net (556.2) (557.0)(F) -
 Income from Continuing Operations
 Before Income Taxes $ 1,670.3 $ 1,667.4 -
 Results by Restaurant Chain:
 Pizza
 Hut $ 3,258.3 $ 2,949.9 10 $ 314.5 $ 245.9 (E) 28
 Taco
 Bell 2,038.1 1,745.5 17 180.6 149.6 (E) 21
 KFC 1,830.5 1,530.3 20 80.5 (C) 126.9 (E) (37)
 $ 7,126.9 $ 6,225.7 14 $ 575.6 $ 522.4 10
 NOTES:
 (A) Includes a $91.4 restructuring charge to streamline Frito-Lay's operations.
 (B) Includes $35.6 in restructuring charges to streamline the U.K. operations ($23.6) and dispose of or reduce ownership in a small, unprofitable business ($12.0).
 (C) Domestic KFC includes a $32.8 restructuring charge to streamline operations and a $9.0 charge related to a delayed national roll-out of the new skinfree chicken product. International KFC also includes a $1.2 restructuring charge to streamline operations.
 (D) Includes charges for receivables exposures of $10.5 million in soft drinks and $10.6 million in snack foods.
 (E) Includes $25.0 of domestic and $3.0 of international charges as follows: Pizza Hut-$9.0 for underperforming restaurant closures, $8.0 to consolidate domestic field operations and $2.4 to relocate international headquarters; KFC-$4.6 (including $0.6 international) and Taco Bell- $4.0, both for underperforming restaurant closures.
 (F) Includes an $84.3 net credit consisting of the $118.2 KFC-Japan IPO gain, and charges of $18.0 for accelerated contributions and $15.9 to write-down the investment in an international Pizza Hut joint venture.
 PEPSICO, INC. AND SUBSIDIARIES
 Supplemental Schedule of Operating Profits
 Excluding Unusual Charges (Credit)
 (in millions, unaudited)
 Fourth Quarter Year-To-Date
 1991 1990 Percent 1991 1990 Percent
 684.3 9
 -Int'l 14.3 2.5 472 117.1 93.8 25
 199.1 154.5 29 863.3 778.1 11
 Snack Foods
 -Domestic 231.7 239.9 (3) 708.0 742.9 (5)
 -Int'l 66.1 62.1 6 206.6 202.1 2
 297.8 302.0 (1) 914.6 945.0 (3)
 Restaurants
 -Domestic 137.9 142.3 (3) 521.2 472.2 10
 -Int'l 32.0 23.8 34 97.4 78.2 25
 169.9 166.1 2 618.6 550.4 12
 Total
 -Domestic 554.4 534.2 4 1,975.4 1,899.4 4
 -Int'l 112.4 88.4 27 421.1 374.1 13
 $ 666.8 $ 622.6 7 $2,396.5 $2,273.5 5
 Interest & Other
 Corp. Exps, net (166.0) (209.4) (21) (556.2) (641.3) (13)
 Income from Cont. Ops. Before
 Income Taxes $ 500.8 $ 413.2 21 $1,840.3 $1,632.2 13
 Results by Restaurant Chain:
 Pizza Hut $ 89.8 $ 77.6 16 $ 314.5 $ 265.3 19
 Taco Bell 57.0 54.2 5 180.6 153.6 18
 KFC 23.1 34.3 (33) 123.5 131.5 (6)
 $ 169.9 $ 166.1 2 $ 618.6 $ 550.4 12
 Unusual Charges(Credit) Fourth Quarter Year-To-Date
 Excluded: 1991 1990 1991 1990
 Soft Drinks
 -Domestic receivables exposures $ 10.5
 Snack Foods
 -Domestic receivables exposures 10.6
 -Domestic restructuring $ 91.4
 -Int'l restructuring $ 35.6 35.6
 Restaurants
 -Domestic Pizza Hut consolidation $ 8.0 8.0
 -Domestic Pizza Hut unit closures 9.0
 -Int'l Pizza Hut relocation 2.4 2.4
 -Domestic Taco Bell unit closures 4.0
 -Domestic KFC restructuring 32.8 32.8
 -Domestic KFC delayed new product 9.0
 -Domestic KFC unit closures 4.0
 -Int'l KFC restructuring 1.2 1.2
 -Int'l KFC unit closures 0.6
 Corporate Items
 -Joint venture stock offering (118.2)
 -Accelerated contributions 18.0
 -Joint venture write-down 15.9 15.9
 Total $ 69.6 $ 26.3 $170.0 $(35.2)
 -0- 2/4/92
 /CONTACT: Kenneth Ross of PepsiCo, 914-253-2725/
 (PEP) CO: PepsiCo, Inc. ST: New York IN: FOD SU: ERN


TS-PS -- NY009 -- 6489 02/04/92 08:05 EST
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