Del Monte Foods Company (NYSE: DLM), today reported earnings per share, as adjusted, of $0.29 for the second quarter of fiscal 2001. This compares with the consensus of analyst estimates of $0.31, as reported by First Call, and with $0.40, as adjusted, in the second quarter of fiscal 2000. Net sales for the quarter were $428 million compared to $455 million in the comparable prior year period.
The decline in net sales for the quarter, when compared to the prior year period, reflects the impact of unusually high Y2K-related sales volumes in the second quarter of fiscal 2000. Earnings per share, as adjusted, decreased primarily due to these lower volumes and higher production costs.
Go deeper with GlobalData
“As anticipated, our revenues and resulting bottom-line are down significantly versus last year reflecting difficult comparisons stemming from last year’s Y2K disruptions,” said Richard G. Wolford, Chairman and Chief Executive Officer. “In addition, as previously discussed, higher than planned production costs negatively impacted our bottom-line and will put pressure on the full year’s results. Ongoing, our business remains healthy, as evidenced by our strong and improving market shares.”
“We are excited about our recently announced acquisition of S&W,” Mr. Wolford continued. “This acquisition is consistent with our strategy to seek premium branded businesses that leverage our selling and operating infrastructure. As with our entire line, S&W products are healthy, convenient and meet the needs of today’s consumer.”
EBITDA, as adjusted, for the quarter was $51.5 million compared to $62.0 million in the same quarter last year. Net income, as adjusted, for the quarter was $15.2 million compared to $21.4 million for the same quarter last year.
These adjusted results exclude special charges related to plant consolidations and other non-recurring items and use a projected income tax rate for the year of 34.6% compared to the 39.0% rate used last year. The Company’s effective income tax rate for this year includes the benefit of net operating losses and other tax adjustments.
How well do you really know your competitors?
Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.
Thank you!
Your download email will arrive shortly
Not ready to buy yet? Download a free sample
We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form
By GlobalDataActual diluted earnings per share for the second quarter ended December 31, 2000 were $0.16 per share compared to $0.43 per share in last year’s second quarter, and net income was $8.5 million compared to $22.8 million last year.
Six Months Ended December 31, 2000
Net sales for the first six months of fiscal 2001 were $739.0 million compared to net sales of $789.1 million for the same period last year. EBITDA, as adjusted, for the first six months of fiscal 2001 was $85.3 million compared to $98.6 million for the comparable period last year. Net income, as adjusted, for the first six months was $19.2 million compared to $28.5 million for the first six months of last year. Earnings per share, as adjusted, for the first six months of fiscal 2001 were $0.37, compared to $0.53 for the first six months of fiscal 2000.
Actual diluted earnings per share for the first six months of fiscal 2001 were $0.28 per share compared to $0.56 per share in last year’s second quarter, and net income was $14.9 million compared to $29.7 million last year.
Outlook
Looking forward for the full fiscal year 2001, the Company continues to expect that net sales will be approximately 4 to 6% higher than in fiscal 2000 and that adjusted earnings per share for fiscal 2001 will be essentially flat, compared with fiscal 2000. However, the Company’s earnings for the full fiscal 2001 may be adversely affected by several factors, including increased interest expense and higher production costs, such as lower fruit recoveries, higher energy costs and higher fixed costs. The Company is actively pursuing mitigation of these increased costs.
Del Monte Foods Company, with net sales of approximately $1.5 billion in fiscal 2000, is the largest producer and distributor of premium quality, branded processed fruit, vegetable and tomato products in the United States. The Del Monte brand was introduced in 1892 and is one of the best known brands in the United States. Del Monte products are sold through national grocery chains, independent grocery stores, warehouse club stores, mass merchandisers, drug stores and convenience stores. The Company also sells its products to the U.S. military, certain export markets, the foodservice industry and food processors. The Company operates fourteen production facilities and seven distribution centers in the U.S., has operations in Venezuela and owns Del Monte brand marketing rights in South America.
This press release contains forward-looking statements conveying management’s expectations as to the future based on plans, estimates and projections at the time the Company makes the statements. Forward-looking statements involve inherent risks and uncertainties and the Company cautions you that a number of important factors could cause actual results to differ materially from those contained in such statements. These factors include, among others: general economic and business conditions; competition; weather conditions; crop yields; raw material costs and availability; the loss of significant customers; changes in business strategy or development plans; availability, terms and deployment of capital; availability of qualified personnel; inability to increase prices; changes in, or failure or inability to comply with, governmental regulations, including, without limitation, environmental regulations; industry trends; declines in consumption levels in the Company’s categories; production capacity constraints and other factors. Factors are described in more detail in the Company’s filings with the Securities and Exchange Commission, including its annual report on Form 10-K for the fiscal year ended June 30, 2000. Investors are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof.
Selected Balance Sheet Data
(In millions) December 31,
2000
———-
Cash and cash equivalents $ 7.5
Trade accounts receivable, net of allowance 140.9
Inventories 638.6
Total assets 1,281.3
Accounts payable and accrued expenses 308.1
Short-term borrowings 222.4
Long-term debt, including current portion 567.2
Stockholders’ equity 25.7
Del Monte Foods Company
(In millions, except
share data) For the Three Months Ended December 31,
As Adjusted (1) Historical
2000 1999 2000 1999
—– —- —- —-
Net sales $428.2 $455.4 $428.2 $455.4
Cost of products sold (2) 276.7 284.5 277.4 284.5
Selling, administrative
and general expenses 107.8 117.6 107.8 117.6
Special charges related
to plant consolidation (3) – – 11.8 4.4
Operating income 43.7 53.3 31.2 48.9
Interest expense 20.6 18.3 20.6 18.3
Income before taxes 23.1 35.0 10.6 30.6
Income taxes (4) 7.9 13.6 2.1 7.8
Net income available to
common shares $15.2 $21.4 $8.5 $22.8
Diluted earnings per
common share $0.29 $0.40 $0.16 $0.43
Shares 52,610,561 53,147,088 52,610,561 53,147,088
(1) In order to provide comparability among all periods presented, the
Company’s historical results have been adjusted to exclude special
charges related to plant consolidation and non-recurring items.
(2) In accordance with purchase accounting rules applied to the
acquisition of the Sunfresh business, inventory was increased to
market value. This inventory step-up resulted in one-time charges
to cost of products sold as the inventory on hand at the
acquisition date was sold. Results, as adjusted, for the three
months ended December 31, 2000 excluded step-up of $0.7 million.
(3) For the three months ended December 31, 2000 and 1999, special
charges related to plant consolidation included accelerated
depreciation and other restructuring costs related to the
consolidation of certain processing plants.
(4) Income taxes, as adjusted, for the three months ended December 31,
1999 included the impact of using a 39.0% tax rate. For the three
months ended December 31, 2000, as adjusted results included
income taxes at an annualized rate of 34.6%. Income taxes for the
historical periods presented above included the benefit of net
operating losses and other tax adjustments.
Del Monte Foods Company (In millions, except
share data) For the Six Months Ended December 31,
As Adjusted (1) Historical
2000 1999 2000 1999
Shares 52,592,075 53,360,861 52,592,075 53,360,861
(1) In order to provide comparability among all periods presented, the
Company’s historical results have been adjusted to exclude special
charges related to plant consolidation and non-recurring items.
(2) In accordance with purchase accounting rules applied to the
acquisition of the Sunfresh business, inventory was increased to
market value. This inventory step-up resulted in one-time charges
to cost of products sold as the inventory on hand at the
acquisition date was sold. Results, as adjusted, for the six
months ended December 31, 2000 excluded step-up of $0.9 million.
(3) Selling, administrative and general expenses for the six months
ended December 31, 2000 have been adjusted to exclude indirect
expenses related to the acquisition of Sunfresh.
(4) For the six months ended December 31, 2000 and 1999, special
charges related to plant consolidation included accelerated
depreciation and other restructuring costs related to the
consolidation of certain processing plants.
(5) For the six months ended December 31, 2000, the reversal of an
accrual on a contingent liability was excluded from the as
adjusted results.
(6) Income taxes, as adjusted, for the six months ended December 31,
1999 included the impact of using a 39.0% tax rate. For the six
months ended December 31, 2000, as adjusted results included
income taxes at an annualized rate of 34.6%. Income taxes for the
historical periods presented above included the benefit of net
operating losses and other tax adjustments.
