US: McCormick buy boosts FY earnings

By: just-food.com | 28 January 2010

McCormick & Co. has booked an increase in full-year earnings, boosted by cost savings and the acquisition of Lawry’s.

The spices, herbs and seasonings specialist saw adjusted earnings reach US$310.7m for the year ended 30 November, compared to $282m a year earlier.

Acquisitions, cost savings and effective management of working capital contributed “significantly” to the performance, McCormick said today (28 January).

Excluding the impact of unfavourable currency exchange rates, sales rose 5% to reach $1.91bn, due largely to the impact of Lawry’s as well as the company’s pricing actions.

Excluding restructuring charges and unusual items, operating income increased 14% to $385.6m.

Alan Wilson, chairman, president & CEO said: “Acquisitions are an integral part of our growth strategy and in 2009, much of our sales growth and margin improvement were led by Lawry’s which we acquired in July 2008. In addition, we achieved cost reductions of $42m, which provided the fuel for a 15% increase in marketing programs to support our leading brands.”

The firm said it anticipates driving sales in 2010 with a “significant” increase in marketing support of $20m and a line-up of new products.

The company said sales are projected to grow 4-6%, including an estimated 2% benefit based on current foreign currency exchange rates.

For the fourth quarter, the company reported net income of $116.4m, up from $82.5m a year earlier. Revenue at the Maryland-based company rose marginally to $924.5m, a 2% increase on the prior year.