Printer Friendly

RJR NABISCO REPORTS SECOND QUARTER RESULTS

 NEW YORK, July 29 /PRNewswire/ -- RJR Nabisco Holdings Corp. (NYSE: RN) today announced second quarter 1993 net income of $77 million, down 11 percent from net income of $87 million in the year-ago quarter.
 Net income per common share on a fully diluted basis was $.06, down 14 percent from $.07 in the second quarter of 1992. The company said net income in the second quarter of 1993 included an after-tax extraordinary charge of $65 million ($.05 per common share) related to the repurchase and retirement of debt, compared with a similar after-tax extraordinary charge of $122 million ($.09 per common share) in the second quarter of 1992. Excluding the extraordinary charges, net income in the second quarter of 1993 was $142 million, 32 percent lower than $209 million in the second quarter of 1992. Fully diluted net income per common share excluding the extraordinary charges was $.11 in the second quarter of 1993 down 31 percent from $.16 in the quarter a year ago.
 "The extremely competitive domestic tobacco environment led to a significant decline in our earnings," said Charles M. Harper, chairman and chief executive officer of RJR Nabisco.
 "We made many changes to our domestic tobacco pricing structure over the past several weeks and expect our full-price volume to benefit from price reductions," Harper said. "But we also expect to record significant expenses to enable us to adjust to a changing business environment. Those expenses, along with lower domestic tobacco revenue, will further depress our financial results through year-end. We plan to get our house in order this year so that we can resume our earnings growth track next year.
 "I intend to measure RJR Nabisco's progress in terms of what I call 'real' earnings, or net cash earnings after providing for depreciation charges, which gives us the level of earnings available to fund business investment, debt repayment and other uses of surplus cash," Harper continued. "I am confident our 'real' earnings will show improvement in 1994, when we start building a financial trend line for this company based on growth in 'real' earnings and shareholder value."
 Harper noted the company's "real" earnings per share in the second quarter were $.20 compared with $.25 a year ago.
 RJR Nabisco's operating income in the second quarter of 1993 was $582 million, down 24 percent from $768 million in the quarter a year ago. Net sales for the quarter were $3.72 billion, 7 percent below $3.98 billion in the second quarter of last year.
 For the first six months of 1993, net income, including a $112 million after-tax extraordinary charge related to debt retirement, was $240 million ($.19 per common share), up 233 percent from net income of $72 million ($.07 per common share) a year earlier, when there was a similar extraordinary charge of $281 million. Absent the extraordinary charges the company would have reported six month net income of $352 million ($.27 per common share) in 1993, down slightly from $353 million ($.27 per common share) in the period a year ago. Six month operating income was $1.27 billion in 1993, 12 percent below $1.43 billion in 1992. Net sales for the first half of 1993 were $7.46 billion, 2 percent below $7.63 billion a year ago.
 Tobacco
 RJR Nabisco's worldwide tobacco business reported second quarter net sales of $2.03 billion, 13 percent below $2.33 billion a year ago. The company's worldwide volume was down slightly, as increasing international volume was more than offset by a decline in domestic volume. Business unit contribution (operating income before amortization of trademarks and goodwill) of $515 million in the second quarter of 1993 declined 28 percent from $714 million in the quarter a year ago.
 In international tobacco, net sales rose 5 percent and business unit contribution rose 9 percent.
 In domestic tobacco, net sales declined 20 percent and business unit contribution declined 36 percent as a result of significantly intensified price competition. Volume in the quarter declined 7 percent, reflecting reductions in trade inventories that more than offset increased consumption. In response to the competitive environment, the company recently announced it was lowering list prices on its full-price brands, raising prices on its lowest-price brands and reducing prices on its mid-price brands to the lowest-price level. The company said its Winston brand was beginning to benefit from recent promotional activities and that the new price reductions are expected to improve volume trends on Winston, Camel and other full-price brands as well as reduce overall marketing expenditures over time.
 For the six months of 1993, net sales for the company's worldwide tobacco business were $4.13 billion, down 7 percent from $4.44 billion last year. Six month business unit contribution was $1.17 billion, 14 percent lower than $1.37 billion in the period a year ago.
 Food
 RJR Nabisco's food businesses reported second quarter 1993 net sales of $1.69 billion, up 2 percent from the year-ago quarter. Business unit contribution of $254 million was 6 percent higher than $240 million in the second quarter of 1992. When food results are adjusted to exclude results from the ready-to-eat cereal business sold in 1992 and a gain from the sale of a corn processing facility in 1993, food sales increased 7 percent and business unit contribution increased 8 percent. The solid performance of the continuing food businesses reflects stronger U.S. and international biscuit volumes, cost savings from productivity initiatives and the contribution of acquisitions.
 For the first six months of 1993, net sales for the company's food businesses were $3.32 billion, up 4 percent from $3.19 billion in 1992. Six month business unit contribution of $457 million was 7 percent higher than $429 million last year. Absent the cereal results and the gain from the corn processing facility sale, six month food sales increased 8 percent and business unit contribution increased 10 percent from 1992.
 RJR Nabisco Holdings Corp. is the parent company 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 6 mos. ended
 6/30/93 6/30/92 6/30/93 6/30/92
 Net sales:
 Tobacco
 Domestic $ 1,331 $ 1,669 $ 2,736 $ 3,100
 International 699 664 1,398 1,341
 Total tobacco 2,030 2,333 4,134 4,441
 Total food 1,689 1,650 3,321 3,185
 Consolidated $ 3,719 $ 3,983 $ 7,455 $ 7,626
 Business unit contribution:
 Tobacco
 Domestic $ 369 $ 580 $ 869 $ 1,092
 International 146 134 305 273
 Total tobacco 515 714 1,174 1,365
 Total food 254 240 457 429
 Corporate (32) (32) (56) (56)
 Business unit contribution 737 922 1,575 1,738
 Amortization of trademarks
 and goodwill (155) (154) (310) (306)
 Operating income 582 768 1,265 1,432
 Cash interest expense (230) (255) (454) (505)
 Non-cash interest expense (66) (112) (157) (238)
 Amortization of debt
 issuance costs (4) (5) (9) (10)
 Other (expense) income,
 net (3) 4 4 (1)
 Income before income
 taxes 279 400 649 678
 Provision for income
 taxes 137 191 297 325
 Income before
 extraordinary item 142 209 362 353
 Extraordinary item - loss
 on early extinguishments
 of debt, net of income
 taxes (65) (122) (112) (281)
 Net income (loss) 77 87 240 72
 Preferred stock dividends 7 8 13 16
 Net income (loss) applicable
 to common stock $ 70 $ 79 $ 227 $ 56
 Net income (loss) per common and common equivalent
 share on a fully diluted basis:
 Income before extraordinary
 item(a) $ 0.11 $ 0.16 $ 0.27 $ 0.27
 Extraordinary item (0.05) (0.09) (0.08) (0.28)
 Net income (loss) $ 0.06 $ 0.07 $ 0.19 $ 0.07
 Avg. no. of common and common
 equiv. shares outstanding
 (in thousands) 1,384,670 1,413,426 1,303,137 1,415,884
 (a) If calculated on a primary basis, income (loss) before extraordinary item per common and common equivalent share amounted to $.10 and $.15 for the three months ended June 30, 1993 and 1992, respectively, and $.25 and $.25 for the six months ended June 30, 1993 and 1992, respectively.
 -0- 7/28/93
 /CONTACT: Jason Wright of RJR Nabisco, 212-258-5770/


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

BR-BN -- AT006 -- 7196 07/29/93 10:20 EDT
COPYRIGHT 1993 PR Newswire Association LLC
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1993 Gale, Cengage Learning. All rights reserved.

Article Details
Printer friendly Cite/link Email Feedback
Publication:PR Newswire
Date:Jul 29, 1993
Words:1419
Previous Article:CHECK EXPRESS REACHES AGREEMENT IN PRINCIPLE WITH CHECK-X-CHANGE CORPORATION
Next Article:PALFED, INC. ANNOUNCES SECOND QUARTER EARNINGS FOR 1993
Topics:

Terms of use | Copyright © 2017 Farlex, Inc. | Feedback | For webmasters