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RJR NABISCO REPORTS 1992 YEAR-END RESULTS

 1992 HIGHLIGHTS, Excluding Net Charge for
 Extraordinary Loss from Debt Retirements, Restructuring
 Provision, and Gain on Cold Cereal Business Sale
 FOR THE YEAR:
 -- Fully Diluted Earnings Per Share up 65 percent to $.61
 -- Primary Earnings Per Share up 159 percent to $.57
 -- Net Income up 121 Percent to $812 million
 -- Operating Income down 1 percent to $2.91 billion
 -- Free Cash Flow (after interest payments) up 49 percent to
 $1.6 billion
 FOR THE QUARTER:
 -- Fully Diluted Earnings Per Share up 14 percent to $.16
 -- Net Income up 29 percent to $207 million
 -- Operating Income down 5 percent to $711 million
 NEW YORK, Feb. 2 /PRNewswire/ -- RJR Nabisco Holdings Corp. (NYSE: RN) today announced 1992 full-year net income of $812 million, excluding a previously announced $513 million net charge, an increase of 121 percent from $368 million in 1991.
 Net income per common share, excluding the net charge, was $.57, up 159 percent from $.22 in 1991. On a fully diluted basis, net income per share was $.61, up 65 percent from $.37 in 1991.
 The company said the $513 million net charge ($.37 per common share) in 1992 consisted of the following items:
 -- an after-tax extraordinary loss of $477 million related to the repurchase and retirement of $3.62 billion principal amount ($3.21 billion accreted amount) of high-cost debt;
 -- an after-tax charge totaling $65 million from business restructuring programs at the company's food and tobacco operations;
 -- and a $29 million after-tax gain from the sale of the company's cold cereal business.
 Full-year net income in 1992 including the net charge was $299 million, a 19 percent decrease from 1991. Net income per common share was $.20, a decrease of 9 percent from 1991. Net income per common share on a fully diluted basis was $.24, down 35 percent from 1991.
 The company's free cash flow (cash after operating expenses and cash interest payments that is available to the company for acquisitions, the repayment of debt principal or other corporate purposes) was $1.64 billion in 1992, an increase of $539 million over 1991.
 "Throughout the year we took full advantage of the investment-grade flexibility we earned with our recapitalization at the end of 1991," said RJR Nabisco Chairman and Chief Executive Officer Louis V. Gerstner Jr., "we built our operating base with acquisitions of new food and tobacco businesses. At the same time, we refinanced more than $3 billion of costly debt at more favorable interest rates.
 "Although our ambitious refinancing program reduced our reported earnings last year, the benefits far outweigh the costs," Gerstner continued. "Our 1993 interest expense will be reduced substantially as a result."
 RJR Nabisco said its operating income for 1992 was $2.90 billion, off 1 percent from $2.93 billion in 1991. Net sales for the year were $15.73 billion, up 5 percent from $14.99 billion in 1991.
 "Last year was a difficult one in the consumer products markets, as competitors responded to weak consumer demand with aggressive pricing and promotional programs," Gerstner said. "Nevertheless, we ended the year on a note of optimism. Our North American food organization is entering 1993 with momentum from new products; demand for our international food and tobacco brands was strong; and by the end of the year, we saw better prices for our lower-price domestic tobacco brands."
 For the fourth quarter of 1992, net income excluding a net charge of $162 million ($.12 per common share) was $207 million, an increase of 29 percent from the year-ago fourth quarter. Net income per common share in the fourth quarter excluding the net charge was $.15, an increase of 7 percent from the year-ago quarter. On a fully diluted basis, net income per common share was $.16, or 14 percent higher than $.14 in the fourth quarter of 1991.
 With the net charge, fourth-quarter net income was $45 million, a 72 percent decline from $161 million in the fourth quarter of 1991. Net income per common share was $.03, compared with $.14 in the fourth quarter of 1991. On a fully diluted basis, net income per common share was $.04, compared with $.14 in the fourth quarter of 1991.
 Fourth quarter 1992 operating income was $711 million, excluding the restructuring charge and cold cereal business gain, a 5 percent decrease from operating income of $752 million in the fourth quarter of 1991. Reported operating income in the fourth quarter was $703 million, or 7 percent lower than in the fourth quarter of 1991. Net sales in the fourth quarter of $4.09 billion were 3 percent higher than net sales of $3.98 billion a year ago.
 For the full year, RJR Nabisco's worldwide tobacco business reported net sales of $9.03 billion, 6 percent higher than $8.54 billion in 1991. The company's worldwide tobacco volume rose 3 percent. Business unit contribution (operating income before the restructuring charge and amortization of trademarks and goodwill) for full-year 1992 of $2.69 billion was 1 percent below $2.73 billion in 1991. For the fourth quarter, net sales for RJR Nabisco's worldwide tobacco business were $2.26 billion, up 3 percent from $2.20 billion in the quarter a year ago. Fourth-quarter worldwide tobacco volume increased 9 percent, while business unit contribution of $610 million was 4 percent below $637 million in the quarter a year ago.
 In domestic tobacco, full-year net sales rose 5 percent and business unit contribution was 5 percent lower than in 1991. The company SiOe3lVomesti c volume in 1992 rose 3 percent and overall market share also improved over 1991. In the fourth quarter, domestic tobacco net sales declined 2 percent and business unit contribution declined 8 percent. The more favorable pricing and volume at the domestic tobacco business were more than offset by marketing expenditures, and the increased percentage of sales in the lower-margin savings segment.
 In international tobacco, full-year net sales rose 7 percent and business unit contribution increased 15 percent over 1991. Volume for the year increased 4 percent but, excluding a large 1991 contract sale to the Russian Republic, would have shown a 13 percent increase. Fourth-quarter net sales increased 12 percent and business unit contribution increased 11 percent over the fourth quarter of 1991. International tobacco results for the year and quarter reflect strong volume gains in Eastern Europe (where the company made several acquisitions), Asia and the Middle East, that more than offset slightly lower volume in Western Europe and business investment costs in new markets.
 Food
 RJR Nabisco's food businesses reported full-year 1992 net sales of $6.71 billion, 4 percent higher than $6.45 billion in 1991. Full-year business unit contribution (also excluding the gain on the sale of the cold cereal business) increased 3 percent to $947 million from $920 million in 1991. For the fourth quarter, net sales were $1.83 billion, up 3 percent from $1.78 billion in the quarter a year ago. Fourth- quarter business unit contribution decreased 3 percent to $286 million from $295 million in the year-ago quarter.
 Sales and earnings growth for the year and quarter were strong in the company's international food businesses as a result of both acquisitions and internal growth. However, restrained consumer spending in North America led to slow growth in both sales and earnings in that market. The company said its North American food units introduced more than 100 new products and product varieties in 1992, which helped it maintain strong market shares in its major food businesses and also contributed to improved competitive positioning for 1993.
 RJR Nabisco Holdings Corp. is the parent of RJR Nabisco, Inc., an international consumer products company. RJR Nabisco's major operating units are R.J. Reynolds Tobacco Co., R.J. Reynolds Tobacco International, Inc., the Nabisco Foods Group and Nabisco International, Inc.
 RJR NABISCO HOLDINGS CORP.
 CONSOLIDATED CONDENSED STATEMENTS OF INCOME
 (Dollars in millions except per share amounts)
 3 mos. ended 12 mos. ended
 12/31/92 12/31/91 12/31/92 12/31/91
 Net sales:
 Tobacco-domestic $ 1,474 $ 1,498 $ 6,165 $ 5,861
 Tobacco-international 785 700 2,862 2,679
 Total tobacco 2,259 2,198 9,027 8,540
 Total food 1,828 1,778 6,707 6,449
 Consolidated $ 4,087 $ 3,976 $ 15,734 $ 14,989
 Business unit contribution:
 Tobacco-domestic $ 467 $ 508 $ 2,112 $ 2,226
 Tobacco-international 143 129 575 500
 Total tobacco 610 637 2,687 2,726
 Total food 286 295 947 920
 Corporate (29) (28) (112) (103)
 Business unit contribution 867 904 3,522 3,543
 Amortization of trademarks
 and goodwill (156) (152) (616) (609)
 Other operating charges,
 net (a) (8) --- (8) ---
 Operating income 703 752 2,898 2,934
 Cash interest expense (248) (326) (995) (1,326)
 Non-cash interest expense (93) (145) (434) (787)
 Amortization of debt
 issuance costs (5) (6) (20) (104)
 Other (expense) income,
 net (4) (25) 7 (69)
 Income before income taxes 353 250 1,456 648
 Provision for income taxes 182 89 680 280
 Income before extraord.
 item 171 161 776 368
 Extraordinary item - loss
 on early extinguishments
 of debt, net of income
 taxes (126) --- (477) ---
 Net income $ 45 $ 161 $ 299 $ 368
 Preferred stock divs. 8 8 31 173
 Net income applicable
 to common stock $ 37 $ 153 $ 268 $ 195
 Net income (loss) per common and common equivalent share:
 Income before extraord.
 item (b) $ 0.12 $ 0.14 $ 0.55 $ 0.22
 Extraordinary item (0.09) --- (0.35) ---
 Net income $ 0.03 $ 0.14 $ 0.20 $ 0.22
 Avg. no. of common and common
 equiv. shares outstanding
 (in thousands) 1,357,431 1,088,779 1,363,549 887,622
 (a) Includes the effects of a restructuring charge (Tobacco-$43, Foods-$63) and a gain on sale of Holdings' Food cold cereal division ($98).
 (b) If calculated on a fully diluted basis, including securities that produce an anti-dilutive result, income (loss) before extraordinary item per common and common equivalent share amounted to $.13 ($.16 before other operating charges, net) and $.14 for the three months ended Dec. 31, 1992 and 1991, respectively, and $.58 ($.61 before other operating charges, net) and $.37 for the 12 months ended Dec. 31, 1992 and 1991, respectively.
 -0- 2/2/93
 /CONTACT: Jason Wright of RJR Nabisco, 212-258-5770/


CO: RJR Nabisco Holdings Corp. ST: New York IN: REA SU: ERN

BR-TG -- AT005 -- 1719 02/02/93 10:02 EST
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Date:Feb 2, 1993
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