TreeHouse Foods third quarter income increased from US$0.16 per share in the third quarter of last year to $0.26 per share for the third quarter of this year, boosted by the April acquisition of soup and infant feeding (SIF) products and improved margins.
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Adjusted EBITDA increased to $28.6m compared to $18.3m posted for the comparable year-ago period.
Net sales totalled $251.7m, an increase of 46.4%, reflecting the soup and infant feeding acquisition. Excluding the acquisition, sales increased by a total of 0.6%. Pickle revenues were up 3.3%, due to the acquisition of Oxford Foods book business in February, non-dairy powdered creamer sales were up 2% with pricing programmes offsetting declining volumes. Other product sales fell 7.9% due to lower co-pack revenues.
Gross margin for the third quarter was 21.5% compared to 19.9%, with the increase resulting from plant efficiencies and internal cost savings programmes which more than offset higher input costs. Operating expenses increased from $24.9m during the third quarter of 2005 to $36.9m in 2006. This includes $9.7m for the SIF acquisition and $2,3m due to higher administrative costs.
Commenting on the results, Sam K. Reed, Chairman and CEO, said: “The third quarter was a very strong quarter for us and marked a significant recovery from last year’s problems. We posted excellent results for the quarter based upon margin expansion, revenue growth and on-plan integration of canned soup into our private label grocery business. The key metrics of sales revenue, product margins, customer service and operating cash flow all showed steady progress and continued improvement. We expect to maintain our momentum during the fourth quarter resulting in a strong finish for the year.”
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