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RJR NABISCO REPORTS SECOND QUARTER RESULTS

 RJR NABISCO REPORTS SECOND QUARTER RESULTS
 NEW YORK, July 23 /PRNewswire/ -- RJR Nabisco Holdings Corp. today


announced second quarter 1992 net income of $87 million ($.06 per common share), up 10 percent from net income of $79 million ($.03 per common share) in the quarter last year.
 The second quarter 1992 net income includes a $122 million ($.09 per common share) after-tax extraordinary charge related to repurchases and retirements by the company of approximately $1 billion principal amount of high-cost debt during the quarter. Absent the extraordinary charge, the company would have reported net income of $209 million ($.15 per common share and $.16 on a fully diluted basis) in the second quarter, a 165 percent increase over the year-ago quarter.
 The company said it repurchased and retired $225 million of its 13- 1/8 percent subordinated extendible reset debentures, $268 million of its 15 percent payment-in-kind subordinated debentures due 2001, $131 million (including interest) of its 17-3/8 percent senior converting debentures due 2009, $327 million principal amount ($249 million accreted amount) of its 15 percent subordinated discount debentures due 2001 and $43 million of other notes. The extraordinary charge in the quarter is a result of the premium paid for the debentures and a write- off of unamortized debt issuance costs.
 "Since the beginning of the year we've refinanced at favorable rates $2 billion of high-cost debt which had an average coupon of 14 percent," said Louis V. Gerstner Jr., RJR Nabisco chairman and chief executive officer. "This will help reduce the company's future interest expense and the amount of debt refinancing that we will need to do in the future."
 RJR Nabisco's second quarter operating income was $768 million, 1 percent below the second quarter of 1991. Net sales were $3.98 billion, or 5 percent higher than $3.78 billion in the quarter last year.
 "We were pleased with the company's business operations in a very tough consumer packaged goods marketplace," Gerstner said. "In times like these we need to protect our most valuable assets -- our high- market-share brands. We are doing just that. In particular, we made significant investments in marketing spending for our domestic tobacco business that have restrained operating income. But, we're seeing benefits from that spending in volume and sales. The volume-trend improvement experienced in domestic tobacco last quarter has continued in the second quarter, and our food and international tobacco businesses continued to deliver earnings growth."
 For the first six months of 1992, net income, including a $281 million after-tax extraordinary charge related to debt repurchases and retirements, was $72 million, 14 percent lower than $84 million in 1991. Net income per common share was $.04, compared with a net loss of $.03 per common share for the first half of 1991. Absent the extraordinary charge for the first six months of 1992, the company would have reported net income of $353 million ($.25 per common share), a 320 percent increase from $84 million ($.03 loss per common share) reported for the first half of 1991. Six-month operating income was $1.43 billion, up 1 percent from $1.42 billion last year. Net sales for the first half of 1992 were $7.63 billion, up 5 percent from $7.25 billion in 1991.
 Tobacco
 RJR Nabisco's worldwide tobacco business reported net sales of $2.33 billion in the second quarter, a 5 percent increase over the second quarter of 1991. Business unit contribution (operating income beforet lower than the year-ago second quarter.
 In international tobacco, net sales decreased 4 percent and business unit contribution increased 16 percent over second quarter 1991. Sales reflect the absence of contract sales to Russia in 1992 and business unit contribution reflects lower expenses and favorable pricing offset in part by lower volume. Excluding Russian contract sales last year, second-quarter international net sales were even with last year.
 Net sales in the domestic tobacco unit increased 10 percent from the second quarter last year and business unit contribution was 5 percent lower. Domestic volume was up 1.3 percent over the quarter last year, with increased savings volume offsetting lower full-price business. The effect of more favorable pricing and volume in the domestic tobacco business was more than offset by marketing expenditures that are part of an ongoing investment program to improve long-term market-share performance, as well as savings-segment growth.
 For the first six months of 1992, net sales for the company's worldwide tobacco business were $4.44 billion, 6 percent greater than $4.18 billion last year. Six-month business unit contribution was $1.37 billion, about even with $1.38 billion for the first half of 1991.
 Food
 RJR Nabisco's food businesses reported second quarter 1992 net sales of $1.65 billion, 5 percent higher than $1.57 billion reported in the 1991 second quarter. Second quarter business unit contribution increased 6 percent to $240 million from $226 million in the year-ago quarter.
 Food results in the quarter were led by volume increases in U.S. cookies and crackers and selected grocery products plus strong performances from Latin American subsidiaries, including recently acquired businesses in Mexico and Brazil.
 For the first six months of 1992, net sales for the company's food businesses were $3.19 billion, up 4 percent from the first half of 1991. Six-month business unit contribution of $429 million for the food businesses was 8 percent higher than $397 million for the first half of 1991.
 RJR Nabisco Holdings Corp. is the indirect parent of RJR Nabisco, Inc. an international consumer products company. RJR Nabisco's major business units are R.J. Reynolds Tobacco Co., R.J. Reynolds Tobacco International, Inc., and the Nabisco Foods Group.
 RJR NABISCO HOLDINGS CORP.
 CONSOLIDATED CONDENSED STATEMENTS OF INCOME
 (Dollars in millions except per share amounts)
 3 mos. ended 6 mos. ended
 6/30/92 6/30/91 6/30/92 6/30/91
 Net sales:
 Tobacco - domestic $ 1,669 $ 1,523 $ 3,100 $ 2,839
 Tobacco - international 664 691 1,341 1,336
 Total tobacco 2,333 2,214 4,441 4,175
 Foods group 1,650 1,566 3,185 3,075
 Consolidated $ 3,983 $ 3,780 $ 7,626 $ 7,250
 Business unit contribution:
 Tobacco - domestic $ 580 $ 612 $ 1,092 $ 1,140
 Tobacco - international 134 116 273 236
 Total tobacco 714 728 1,365 1,376
 Foods group 240 226 429 397
 Corporate (32) (29) (56) (48)
 Business unit contribution 922 925 1,738 1,725
 Amortization of trademarks
 and goodwill (154) (152) (306) (305)
 Operating income 768 773 1,432 1,420
 Cash interest expense (255) (308) (505) (615)
 Non-cash interest expense (112) (233) (238) (527)
 Amortization of debt
 issuance costs (5) (56) (10) (82)
 Other (expense) income,
 net 4 (13) (1) (23)
 Income before income taxes 400 163 678 173
 Provision for income taxes 191 84 325 89
 Income before extraordinary
 item 209 79 353 84
 Extraordinary item - loss
 on early extinguishments
 of debt, net of income
 taxes (122) --- (281) ---
 Net income $ 87 $ 79 $ 72 $ 84
 Preferred stock divs. 8 56 16 108
 Net income (loss) applicable
 to common stock $ 79 $ 23 $ 56 $ (24)
 Net income (loss) per common and common equivalent share:
 Income (loss) before
 extraordinary item(a)$ 0.15 $ 0.03 $ 0.25 $ (0.03)
 Extraordinary item (0.09) --- (0.21) ---
 Net income (loss) $ 0.06 $ 0.03 $ 0.04 $ (0.03)
 Avg. no. of common and common
 equiv. shares outstanding
 (in thousands) 1,366,741 876,544 1,366,219 724,198
 (a) 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 $.16 and $.08 for the three months ended June 30, 1992 and 1991, respectively, and $.27 and $.11 for the six months ended June 30, 1992 and 1991, respectively.
 -0- 7/23/92
 /CONTACT: Jason Wright of RJR Nabisco, 212-258-5770/ CO: RJR Nabisco Holdings Corp. ST: New York IN: REA SU: ERN


BR-BN -- AT004 -- 2320 07/23/92 09:31 EDT
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