Illinois-based food group Treehouse Foods posted net income for the fourth quarter from continuing operations totalling US$22.4m, against a loss of $5.6m in the same period last year. Fully diluted earnings per share for the quarter were $0.70 per share compared to a loss of $0.18 per share last year.
Net sales for the fourth quarter totalled $282.9m, an increase of 53.3% over the fourth quarter of 2005, reflecting growth from the acquisition of the soup and infant feeding business.
“Our fourth quarter results continue our strong trends of margin improvement, operating cost control and growth in EBITDA,” said CEO Sam Reed. “We experienced some sales challenges late in the fourth quarter as both powder and soup sales saw year over year sales weakness that appear to be weather related, as both of these categories rebounded nicely in January 2007.”
Looking ahead, the company, which produces a wide range of products from pickles and related to non-dairy powdered coffee creamer; private label soup, salad dressings and infant feeding products, said it expects that input costs will continue to be a challenge in 2007, particularly for sweeteners, fruit, glass and vegetable crops. Net sales are expected to increase by 12% to 13% in 2007.
Income from continuing operations, including stock option expense, is forecast to be in the range of $1.29 to $1.34 per diluted share, based on 31.9m fully diluted average shares outstanding, an increase from the 2006 weighted average shares outstanding of 31.4m shares.
“We will continue to focus our efforts on improving our overall profit margins through both gross profit improvement and lower operating costs as a percent of sales,” said CEO Sam K. Reed. “We will also pursue profitable growth, targeting a 22% to 26% increase in adjusted earnings per share over last year’s $1.06 per share.”
Reed added that the company would be looking to invest in acquisitions that allow us to take advantage of its existing distribution networks, while also pursuing new sales opportunities that match well with its existing customer base.
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