Treehouse Foods has posted a 4.7% rise in third-quarter profits, boosted by increased sales from last year’s acquisition of condiments company ED Smith.
Net earnings at the US food group totalled US$11.1m, or $0.35 per share, up from $10.6m, or $0.34 per share, in the same period of last year.
Sales jumped 37.7%, climbing to $374.6m. Treehouse primarily attributed this increase to the purchase of ED Smith, which produces creamer, canned soup, salad dressing, salsa, Mexican sauces, jams and pie fillings under the ED Smith brand.
Gross margins for the quarter decreased from 21.6% to 19.5% due to higher input costs and energy-related costs that were not fully recovered in the quarter.
“Although our gross margins were down from last year, we saw an 85 basis point improvement from last quarter as our pricing programmes were more fully realised. In addition, we increased our emphasis on working capital improvements, and improved our quarterly free cash flow used to pay down debt by $68.6m compared to last year’s third quarter,” commented chairman and CEO Sam Reed.
TreeHouse affirmed its guidance for EPS of $1.50 to $1.55 per share for fiscal 2008.
The company also announced that it will close its salad dressing manufacturing plant in Cambridge, Ontario, Canada, which employs 85 people. Production will be moved to the company’s other facilities in Ontario and the US.
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