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QUAKER REPORTS HIGHER FIRST QUARTER SALES AND EARNINGS

 CHICAGO, Oct. 21 /PRNewswire/ -- The Quaker Oats Company (NYSE: OAT) today reported earnings per share of $1.31 for the first quarter of fiscal 1994 ended Sept. 30, 1993, a 62 percent increase above last year's 81 cents before the cumulative effect of accounting changes. Included in last year's results was a pretax restructuring charge of $38.6 million, or 37 cents per share, for the consolidation of production facilities at a U.S. pet foods plant. Excluding the charge, earnings per share were up 11 percent over the prior year.
 Consolidated sales of $1.53 billion were 3 percent above last year's $1.49 billion. Consolidated operating income of $182.1 million was 41 percent above the prior year's $129.5 million. Net income was $91.4 million versus a loss of $55.3 million last year, which included the restructuring charge and a charge of $115.5 million, or $1.59 per share, for the after-tax cumulative effect of adopting both FASB Statements no. 106 and no. 109. Excluding the restructuring charge and the FASB no. 106 and no. 109 effect, net income was 5 percent above last year.
 William D. Smithburg, chairman and chief executive officer, said, "We are off to a good start in fiscal 1994, which we expect to be another good year for Quaker. The positive first-quarter results are due to strong volumes, especially for Gatorade Worldwide, U.S. ready- -to-eat cereals and grain-based snacks, as well as improved operating efficiencies.
 "Consolidated volume for all Quaker businesses was 7 percent higher than a year ago. The first-quarter operating results are especially gratifying, given that the comparable period last year was particularly strong, aided significantly by the change in timing of trade promotions during fiscal 1992. Also, the first-quarter net income includes a higher corporate tax rate for this year and a retroactive adjustment for the new tax legislation."
 U.S. AND CANADIAN GROCERY PRODUCTS
 Operating income for U.S. and Canadian Grocery Products was $161.6 million, a 48 percent increase over last year's $109.5 million. Excluding the $38.6 million restructuring charge last year for the consolidation of production facilities at a pet foods plant, operating income was 9 percent higher than a year ago. Sales of $1.13 billion were 10 percent above last year's $1.02 billion.
 Overall unit volume was 9 percent above a year ago, led by a 30 percent increase in Gatorade thirst quencher. Other businesses showing significant volume gains included ready-to-eat cereals, due to strong performances by Cap'n Crunch and Life, as well as the successful introduction of Quaker Toasted Oatmeal; rice/grain cakes; granola bars; and Aunt Jemima mixes, syrup and frozen breakfast products.
 Advertising and merchandising expenditures were 14 percent above last year's spending and were also higher as a percentage of sales.
 INTERNATIONAL GROCERY PRODUCTS
 Operating income in International Grocery Products was $20.5 million, compared to $20.0 million last year, a 2.5 percent increase. Sales of $406.3 million were 14 percent below last year's $470.7 million. The sales decline primarily reflects the weakening of European currencies, as well as the fiscal 1993 disposition of two Italian businesses and the Sutherlands business in the United Kingdom. Overall unit volume was 4 percent above a year ago, led by Gatorade thirst quencher increases in Latin America and Europe.
 The average number of shares outstanding in the quarter was 68.9 million compared to 72.7 million last year.
 THE QUAKER OATS COMPANY AND SUBSIDIARIES
 CONDENSED STATEMENTS OF CONSOLIDATED INCOME
 AND REINVESTED EARNINGS
 (Unaudited--Millions of Dollars Except Per Share Data)
 Three Months Ended Sept. 30 1993 1992
 Net Sales $1,534.3 $1,494.2
 Cost of goods sold 749.6 740.5
 Gross profit 784.7 753.7
 Selling, general and
 administrative expenses 600.0 582.7
 Interest expense - net 14.3 17.9
 Other expense - net 17.5 49.2
 Income before income taxes
 and cumulative effect of
 accounting changes 152.9 103.9
 Provision for income taxes 61.5 43.7
 Income before cumulative effect of
 accounting changes 91.4 60.2
 Cumulative effect of accounting
 changes - net of tax -- (115.5)
 Net income 91.4 (55.3)
 Preferred dividends - net of tax 1.0 1.1
 Net Income Available for Common $ 90.4 $ (56.4)
 Per Common Share:
 Income before cumulative effect
 of accounting changes $ 1.31 $ .81
 Cumulative effect of accounting
 changes -- $ (1.59)
 Net income $ 1.31 $ (0.78)
 Dividends declared $ 0.53 $ 0.48
 Average Number of Common
 Shares Outstanding
 (in thousands) 68,945 72,730
 Reinvested Earnings:
 Balance beginning of period $1,190.1 $1,162.3
 Net income 91.4 (55.3)
 Dividends (36.5) (35.8)
 Common stock issued for stock
 purchase and incentive plans (0.2) ---
 Balance end of period $1,244.8 $1,071.2
 (Millions of Dollars)
 Net Sales
 Three Months Percent
 Ended Increase
 Sept. 30 1993 1992 (Decrease)
 U.S. & Canadian
 Grocery Products $1,128.0 $1,023.5 10.2 percent
 International Grocery
 Products 406.3 470.7 (13.7 percent)
 Total Sales $1,534.3 $1,494.2 2.7 percent
 Operating Income
 Three Months Percent
 Ended Increase
 Sept. 30 1993 1992 (Decrease)
 U.S. & Canadian
 Grocery Products $ 161.6 $ 161.6 47.6 percent
 International Grocery
 Products 20.5 20.0 2.5 percent
 Total Operating Income $ 182.1 $ 129.5 40.6 percent
 Less: General corporate
 expenses 7.3 4.8
 Interest expense-net 14.3 17.9
 Foreign exchange
 loss-net 7.6 2.9
 Income before income taxes
 and cumulative effect
 of accounting changes $ 152.9 $ 103.9
 -0- 10/21/93
 /CONTACT: Ronald G. Bottrell, director-public relations of Quaker Oats, 312-222-7388/
 (OAT)


CO: Quaker Oats Company ST: Illinois IN: FOD SU: ERN

LG -- NY032 -- 5083 10/21/93 10:38 EDT
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Date:Oct 21, 1993
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