ConAgra Foods, Inc. (NYSE: CAG), one of the world’s largest branded food companies, today reported diluted fourth quarter EPS of $.23 for the period ending May 27, 2001. Fourth quarter sales improved 5% to $6.4 billion and operating profit totaled $405 million. For fiscal 2001, sales grew 7% to reach $27.2 billion, operating profit totaled $1.9 billion, and diluted EPS was $1.33 before the cumulative effect of a change in three accounting principles. After the cumulative effect of a change in three accounting principles, the company’s diluted EPS was $1.24. For fiscal 2001, diluted EPS was greater than fiscal 2000 diluted EPS of $.80, but below fiscal 2000 diluted EPS of $1.60 excluding restructuring and related charges.

The company noted that weak economic conditions and higher energy prices impacted profitability for all reporting segments. Bruce Rohde, chairman and chief executive officer, commented, “We faced a difficult business environment in the last half of fiscal 2001. But even in the midst of a challenging year, we aggressively laid the foundation for a stronger future by improving operating efficiency, introducing new products, and investing behind our market positions. ConAgra Foods has the potential to be much more profitable. We are taking deliberate steps to ensure that end, and barring any unforeseen economic setbacks, we expect to see marked improvement in fiscal 2002.”

In the review of results for the fourth quarter and fiscal year 2001 which follows, unless otherwise indicated, comparisons are with the corresponding periods of fiscal 2000, and exclude restructuring and related charges in fiscal 2000.

Food Business

During the fourth quarter, sales for the company’s food businesses (Packaged Foods and Refrigerated Foods reporting segments) grew 5% to $5.5 billion. Total food business operating profit declined to $372 million, versus $415 million in fiscal 2000. For all of fiscal 2001, food business sales grew 7% to $21.9 billion and food business operating profit was flat at $1.6 billion.

Packaged Foods

Fourth quarter sales for ConAgra’s Packaged Foods segment grew 17% to $2.3 billion and operating profit was $276 million compared to $294 million in the fourth quarter of last fiscal year. These results reflect growth in the portfolio of shelf stable products, largely due to the acquisition earlier in the fiscal year of Chef Boyardee, Gulden’s mustard, Bumble Bee tuna, and other brands, as well as a solid performance from the company’s foodservice-focused businesses. For a variety of products, lowered inventory levels among trade customers impeded the quarter’s sales and profit growth. Profitability was also impeded by significantly increased marketing investment, largely due to new products introduced earlier in the fiscal year as well as the company’s emphasis on strengthening its market positions.

For the full fiscal year, Packaged Foods sales increased 14% to $8.7 billion and operating profit grew 5% to $1.1 billion. As previously mentioned, several new products for the company’s shelf-stable grocery and frozen foods operations were introduced during the year to serve customers better and to boost sales growth in future periods. For strategic reasons, the company is committed to investing in market positions, new products, and service capabilities for the retail and foodservice channels.

Refrigerated Foods

For the quarter, Refrigerated Foods sales declined 2% to $3.3 billion and operating profit decreased to $97 million from $121 million in the fourth quarter of fiscal 2000. Sales of branded processed meats increased, as did sales for the company’s fresh poultry and pork operations. Profits for the entire segment declined due in part to increases in product costs. Sales of fresh beef declined as a result of eliminated capacity following a fire which destroyed the Garden City, Kansas plant earlier in the fiscal year. Operating profit for the company’s fresh poultry and beef operations improved over that of the comparable period last year.

For the full fiscal year, sales rose 3% to $13.2 billion and operating profit declined to $438 million from $491 million in fiscal 2000. The company also noted that fiscal 2000’s favorable market dynamics produced very strong margins for fresh beef and pork operations, which have affected comparisons for fiscal 2001. Going forward, the company will continue to aggressively explore opportunities to differentiate its meat offerings in the marketplace as part of a strategy to generate higher margins.

Agricultural products Business

Fourth quarter sales for the Agricultural Products segment increased 4% to $899 million. Operating profit was $33 million, compared to $47 million in the fourth quarter of fiscal 2000. The company’s Food Ingredients business posted a significant increase in profitability, as did the ConAgra Trade Group. The Agricultural Products segment showed lower profitability versus the fourth quarter last year due to declines in profitability for United Agri Products (UAP), which distributes crop inputs to growers. Decreased profitability for UAP represents a weaker mix of customer purchases and expansion-related expenses.

For the full fiscal year, Agricultural Products sales rose 5% to $5.3 billion and operating profit totaled $281 million, down slightly from last year’s operating profit of $283 million.

Rohde commented, “Fiscal 2001 is behind us and we are working on fiscal 2002. While a disruptive economy and other factors affected our performance in the second half of this fiscal year, we made significant progress energizing some brands and businesses by laying a foundation for a stronger future. Like many companies in today’s uncertain environment, we considered the last six months to be a period of adjustment and rebuilding. We used this period to make some changes to our business regarding product offerings, organizational structure, staffing, and accounting policies, and these changes should better position us in the marketplace. We think that next year will yield strong single-digit earnings growth, or perhaps double-digit earnings growth, depending on developments in the economy. We look for market conditions to snap back, but we are also looking rigorously at all possibilities for improving the short-term and long-term profitability. Given the strong performance of our business in the first half of fiscal 2001, we expect year-over-year percentage gains to be seen in the second half of fiscal 2002 rather than in the first half. We look forward to reporting to you on our progress.”

The company has posted a question and answer document relating to this release, and its June 22 press release discussing restated financial statements and changes in accounting principles, on its website at www.conagrafoods.com/investors .

ConAgra Foods, Inc. (NYSE: CAG) is North America’s largest foodservice manufacturer and second-largest retail food supplier, with annual sales of approximately $27 billion. ConAgra Foods’ consumer brands include: Hunt’s tomato products, Healthy Choice, Banquet meals, Armour meats, Bumble Bee tuna, Louis Kemp seafood, La Choy, Chun King, Lunch Makers, Wesson, Country Pride, Blue Bonnet, Kid Cuisine, Parkay, Reddi-wip, Marie Callender’s, Cook’s Ham, Butterball, Act II, Slim Jim, Decker, Chef Boyardee, Orville Redenbacher’s, PAM Cooking Spray, Snack Pack puddings, Van Camp’s, Peter Pan, Hebrew National, Gulden’s mustard, Pemmican Jerky, Swift Brown ‘n Serve Sausages, Swiss Miss, and many others. For more information, please visit us at www.conagrafoods.com .

Note on Forward Looking Statements:

This news release contains “forward-looking” statements within the Private Securities Litigation Reform Act of 1995. These statements are based on management’s current expectations and are subject to uncertainty and changes in circumstances. Actual results may vary materially from the expectations contained in the forward-looking statements. Future economic circumstances, industry conditions, company performance and financial results, availability and prices of raw materials, product pricing, competitive environment and related market conditions, operating efficiencies, access to capital, actions of governments and regulatory factors affecting the company’s businesses are examples of factors, among others, that could cause actual results to differ materially from those described in the company’s reports filed with the Securities and Exchange Commission. The company is under no obligation to (and expressly disclaims any such obligation to) update or alter its forward-looking statements whether as a result of new information, future events, or otherwise.

    ConAgra Foods, Inc.

Segment Operating Results
In millions FOURTH QUARTER – 13 Weeks Ended

Percent
May 27, 2001 May 28, 2000 Change
SALES
Packaged Foods $2,281.8 $1,956.2 16.6%
Refrigerated Foods 3,256.6 3,331.6 (2.3)
Agricultural Products 899.2 862.0 4.3
Total $6,437.6 $6,149.8 4.7%

OPERATING PROFIT*
Packaged Foods $275.6 $293.5 (6.1)%
Refrigerated Foods 96.6 121.1 (20.2)
Agricultural Products 33.1 47.4 (30.2)
Total $405.3 $462.0 (12.3)%

RESTRUCTURING & RELATED CHARGES
Packaged Foods $- $160.2 N/A
Refrigerated Foods – 130.3 N/A
Agricultural Products – 94.8 N/A
Total $- $385.3 N/A


  • Operating profit is before interest expense, goodwill amortization, general corporate expense, restructuring and related charges and income taxes.
        ConAgra Foods, Inc.

    Segment Operating Results
    In millions FULL YEAR – 52 Weeks Ended
    Percent
    May 27, 2001 May 28, 2000 Change
    SALES
    Packaged Foods $8,681.7 $7,610.9 14.1%
    Refrigerated Foods 13,212.1 12,880.8 2.6
    Agricultural Products 5,300.4 5,042.9 5.1
    Total $27,194.2 $25,534.6 6.5%

    OPERATING PROFIT*
    Packaged Foods $1,139.2 $1,086.9 4.8%
    Refrigerated Foods 437.8 490.9 (10.8)
    Agricultural Products 281.0 282.6 (0.6)
    Total $1,858.0 $1,860.4 (0.1)%

    RESTRUCTURING & RELATED CHARGES
    Packaged Foods $- $309.5 N/A
    Refrigerated Foods – 168.0 N/A
    Agricultural Products – 143.9 N/A
    Total $- $621.4 N/A


  • Operating profit is before interest expense, goodwill amortization, general corporate expense, restructuring and related charges and income taxes.
        ConAgra Foods, Inc.

    Consolidated Statements of Earnings
    In millions except
    per share amounts FOURTH QUARTER – 13 Weeks Ended
    Percent
    May 27, 2001 May 28, 2000 Change

    Net sales $6,437.6 $6,149.8 4.7%
    Costs and expenses
    Cost of goods sold 5,528.7 5,336.1 3.6
    Selling, general and
    administrative expenses 614.6 553.5 11.0
    Interest expense, net 100.1 69.3 44.4

    Restructuring/impairment
    charges – 260.8 N/A
    6,243.4 6,219.7 0.4%

    Income (loss) before
    income taxes 194.2 (69.9) 377.8%
    Income taxes 72.8 (26.1) 378.9
    Net income (loss) $121.4 ($43.8) 377.2

    Income (loss) per
    share — basic $0.23 ($0.09) 355.6

    Weighted average
    shares outstanding 524.1 476.8 9.9%

    Income (loss) per
    share — diluted $0.23 ($0.09) 355.6

    Weighted average shares
    and share equivalents
    outstanding 525.6 478.3 9.9%


    Other restructuring-related items for the thirteen weeks ended May 28, 2000 include: accelerated depreciation of $23.9 million and inventory markdowns of $73.1 million included in cost of goods sold; accelerated depreciation of $0.5 million and restructuring plan implementation cost of $27.0 million, respectively, included in selling, general and administrative expenses.


    • ConAgra Foods, Inc.
    • Consolidated Statements of Earnings
    • In millions except

    per share amounts FULL YEAR – 52 Weeks Ended

    Percent

    May 27, 2001 May 28, 2000 Change

        Net sales                     $27,194.2       $25,534.6           6.5%
    Costs and expenses
    Cost of goods sold 23,311.7 22,182.9 5.1
    Selling, general and
    administrative expenses 2,355.1 2,108.1 11.7
    Interest expense, net 423.3 303.8 39.3

    Restructuring/impairment
    charges – 322.2 N/A
    26,090.1 24,917.0 4.7%

    Income before income
    taxes and cumulative
    effect of changes
    in accounting 1,104.1 617.6 78.8%
    Income taxes 421.6 235.3 79.2
    Income before cumulative
    effect of changes
    in accounting 682.5 382.3 78.5
    Cumulative effect of
    changes in accounting (43.9) – N/A
    Net income $638.6 $382.3 67.0%

    Income per share – basic
    Income before cumulative
    effect of changes in
    accounting $1.33 $0.80 66.3%
    Cumulative effect of
    changes in accounting (0.09) – N/A
    Net income $1.24 $0.80 55.0%

    Weighted average
    shares outstanding 511.6 475.7 7.5%

    Income per share — diluted
    Income before cumulative
    effect of changes in
    accounting $1.33 $0.80 66.3%
    Cumulative effect of
    changes in accounting (0.09) – N/A
    Net income $1.24 $0.80 55.0%

    Weighted average
    shares and share
    equivalents outstanding 514.3 478.6 7.5%


    Other restructuring-related items for the fifty-two weeks ended May 28, 2000 include: accelerated depreciation of $108.3 million and inventory markdowns of $114.5 million, respectively, included in cost of goods sold; accelerated depreciation of $30.8 million and restructuring plan implementation costs of $45.6 million, respectively, included in selling, general and administrative expenses. ConAgra Foods, Inc.

        Consolidated Balance Sheets
    In millions

    ASSETS May 27, 2001 May 28, 2000
    Current assets
    Cash and cash equivalents $198.1 $157.6
    Receivables, less allowance for
    doubtful accounts
    of $100.5 and $62.8 1,605.4 1,241.5
    Inventories 5,071.4 4,056.0
    Other Current Assets 487.7 404.8
    Total current assets 7,362.6 5,859.9

    Property, plant and equipment, net 3,884.7 3,584.0

    Brands, trademarks and goodwill, net 4,840.2 2,366.0

    Other assets 393.3 386.7

    Total assets $16,480.8 $12,196.6

    LIABILITIES AND STOCKHOLDERS’ EQUITY

    Current liabilities
    Notes payable $2,677.1 $1,255.5
    Current installments of long-term debt 123.1 20.6
    Accounts payable 2,289.8 2,042.5
    Advances on sales 349.0 912.7
    Other accrued liabilities 1,496.6 1,234.1
    Total current liabilities 6,935.6 5,465.4

    Senior long-term debt, excluding
    current installments 3,359.5 1,816.8

    Other noncurrent liabilities 927.5 750.7

    Subordinated debt 750.0 750.0

    Preferred securities of a subsidiary company 525.0 525.0

    Common stockholders’ equity 3,983.2 2,888.7

    Total liabilities and stockholders’ equity $16,480.8 $12,196.6