US: TreeHouse records "best" Q1 earnings
- Net profit of $23m
- EBITDA up 9.5%
- Net sales reach $540.1
TreeHouse said it recorded its best first-quarter earnings in history
US own-label firm TreeHouse Foods said it has recorded its best-ever first-quarter earnings, with gross margin up and sales growing.
In the three months to the end of March, net income reached US$23m from $22.1m last year, the company reported today (9 May). The firm recorded gross margin of 22.2%, a 30 basis point improvement on last year.
EBITDA was up 9.5% to $76.8m, primarily due to improved margins and lower distribution costs resulting from both network efficiencies and lower freight rates.
Net sales for the first quarter totalled $540.1m compared to $523.8m last year, driven by its acquisitions of Naturally Fresh and the Aseptic cheese and pudding business from Associated Milk Producers, in addition to price increases.
|TreeHouse Foods, Inc. Reports First Quarter 2013 Results|
- First quarter net sales increased 3.1% due to acquisitions and pricing
- North American Retail Grocery volume/mix (excluding soup) improved 2.8% in the first quarter
- Direct operating income improved in all three segments
- First quarter adjusted EPS improved 17.5% to $0.74
- TreeHouse reaffirms 2013 adjusted earnings per share guidance of $3.00 to $3.10
OAK BROOK, Ill., May 9, 2013 /PRNewswire/ -- TreeHouse Foods, Inc. (NYSE: THS) today reported first quarter earnings of $0.62 per fully diluted share compared to$0.60 per fully diluted share reported for the first quarter of last year. The Company reported adjusted earnings per share grew 17.5% in the first quarter to$0.74 compared to $0.63 in the prior year, excluding the unusual items described below.
The Company's 2013 first quarter results included two unusual items that affected the year-over-year quarterly comparison. The first item is a $0.14 per share expense related to the previously announced restructuring of the Company's soup operations and the Seaforth, Ontario, Canada salad dressing plant closure. The second item is a $0.02 per share gain on the mark-to-market adjustment of the Company's commodity agreements.
"We are pleased to start 2013 with the best first quarter earnings in our history, having delivered top line growth and gross margin improvement, excluding restructuring charges," said Sam K. Reed, Chairman, President and Chief Executive Officer. "Our North American Retail Grocery volume/mix increased nicely, up 2.8%, excluding the impact related to the previously-announced soup restructuring. In addition, all three of our reporting segments delivered direct operating income growth compared to last year."
Adjusted operating earnings before interest, taxes, depreciation, amortization, non-cash stock based compensation, and unusual items, or Adjusted EBITDA (reconciliation to net income, the most directly comparable GAAP measure, appears on the attached schedule), was $76.8 million in the first quarter, a 9.5% increase compared to the prior year. Adjusted EBITDA was higher primarily due to improved margins across all three business segments and lower distribution costs resulting from both network efficiencies and lower freight rates.
Net sales for the first quarter totaled $540.1 million compared to $523.8 million last year, an increase of 3.1% primarily due to acquisitions (Naturally Fresh and the Aseptic cheese and pudding business from Associated Milk Producers Inc.), as well as some minor pricing. Sales for the North American Retail Grocery segment increased 1.9%, while sales for the Food Away From Home segment grew 8.6%, and sales for the Industrial and Export segment improved 4.0% compared to last year.
Total gross margins as reported decreased from 21.9% last year to 21.1% in the first quarter this year, but the reported cost of sales includes charges related to the soup and salad dressing restructuring. Excluding restructuring and facility consolidation costs of approximately $5.9 million, results in a normalized gross margin of 22.2%. This represents a 30 basis point improvement in total gross margins, while legacy margins grew 60 basis points before considering the acquisition of Naturally Fresh.
Selling, distribution, general and administrative expenses were $59.9 million for the quarter, a decrease of 1.7% from $60.9 million in the first quarter of 2012. The decline was due primarily to lower distribution and delivery costs, partially offset by additional costs associated with the acquisition of Naturally Fresh in the second quarter of 2012. In terms of efficiency, SG&A expenses decreased to 11.1% of sales compared to 11.6% last year, driven by improvements in distribution costs.
Income tax expense increased in the quarter to $10.4 million due to higher pretax income and a higher effective tax rate. The Company's first quarter effective income tax rate increased to 31.1% from the 2012 first quarter rate of 30.4% due to an increase in state tax expense.
Net income for the quarter totaled $23.0 million compared to $22.1 million last year.
Original source: TreeHouse Foods
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