ConAgra Foods, Inc., (NYSE: CAG) one of North America�s leading
food companies, today reported results for the fiscal 2009 second
quarter ended Nov. 23, 2008 and confirmed that it expected total
year diluted EPS from continuing operations to be slightly above
$1.50, excluding items that impact comparability. Diluted EPS from
continuing operations was $0.38 for the quarter, an increase of 41%
from prior-year levels of $0.27. Overall sales grew 11%, reflecting
the company�s pricing actions across all segments over the last few
quarters. Excluding $0.05 per diluted share of net expense in the
current quarter and $0.03 of expense in the prior-year quarter from
items that impact comparability, diluted EPS from continuing
operations in the current quarter was $0.43, an increase of 43%
from $0.30 in the year ago period. Items impacting comparability in
the current year and prior year are summarized toward the end of
this release. Gary Rodkin, ConAgra Foods� chief executive officer,
commented, �I am pleased to reconfirm our earnings outlook for
fiscal 2009 given the dynamics of the current marketplace.
Commercial Foods continued its outstanding top and bottom-line
performance by managing volatile input costs through nimble pricing
actions and operating excellence. We also substantially reduced
operating costs through an over-delivery against cost savings
targets in the Consumer Foods supply chain and successfully focused
on SG&A expenses. While comparable Consumer Foods profits were
down, we are confident that changes in our merchandising, slowing
inflation, and other planned operating changes will reverse this
trend in the back half of the year. Recent trends support our
confidence for balance-of-year results.� Consumer Foods Segment
(62% of Year-to-date sales) Branded consumer products sold in
retail and foodservice channels. The Consumer Foods segment posted
sales of $2,043 million and operating profit of $253 million in the
current quarter, and $1,956 million of sales and $247 million of
operating profit in the year-ago period. The following segment
commentary relates to comparable performance unless otherwise
indicated (see page 8 for Regulation G reconciliation): Consumer
Foods� comparable sales growth was 4%, reflecting price increases
necessitated by higher input costs as well as a 4% decline in unit
volume. Brand details and subsegment performance can be found in
the financial information and Q&A document accompanying this
release. Consumer Foods� comparable operating profit declined 8% to
$253 million. Input cost inflation was approximately $170 million,
significantly more than year-ago amounts. As expected, overall
volume declines as well as previously discussed profit challenges
for the Banquet� and Wesson� brands adversely impacted profits.
Positive benefits occurred from strong sales performance in mass
and club channels, lower SG&A expenses, and higher-than-planned
cost savings. The company expects comparable year-over-year profit
growth for this segment in the back half of the fiscal year due to
benefits from adjustments to merchandising programs, favorable cost
savings trends and an expected moderation of input cost increases.
Commercial Foods Segment (38% of Year-to-date sales) Specialty
potato, dehydrated vegetable, seasonings, blends, flavors, and
milled grain products sold to foodservice, retail and commercial
channels worldwide. During the quarter, sales for the Commercial
Foods segment were $1,222 million, 23% ahead of last year,
primarily reflecting increased prices driven by input cost
increases for flour milling and, to a lesser extent, the Lamb
Weston specialty potato operations. Segment operating profit was
$156 million for the quarter, 18% ahead of the year-ago amounts;
the profit increase reflects the overall sales growth along with
operating efficiencies in the flour milling operations, including
the favorable impact of a very high-quality wheat crop.
Acquisitions at Lamb Weston contributed to profit growth, as did
more efficient operations and improved performance from Gilroy
dehydrated products and specialty spices. As the company has
previously stated, given the unusually strong profits for this
segment in the third quarter of fiscal 2008 due to market
opportunities in the flour milling operations, the company has not
planned for Commercial Foods profits in the third quarter of fiscal
2009 to be above year-ago amounts. Hedging Activities � This
language primarily relates to operations other than the company�s
milling operations. The company uses hedging activities to manage
the risk in its plans for the cost of various commodity inputs and,
to a lesser extent, foreign exchange. To improve the transparency
of segment operating results, the company began utilizing a new
methodology for presenting derivative gains and losses in the first
quarter of fiscal 2009. This methodology temporarily classifies
mark-to-market gains and losses as unallocated Corporate expense.
The company later transfers the gains or losses to segment
operating profit when the underlying item being hedged is expensed
in cost of goods sold for the applicable operating segment.
Prior-year amounts utilized a different methodology, which
classified the hedge gain or loss in the segment operating results
regardless of when the underlying item was expensed. Prior year
second-quarter results include $25 million of net derivative gains
($24 million for Consumer Foods, and $1 million for Commercial
Foods other than the milling operations). This change in
methodology was discussed in detail in the company�s first-quarter
fiscal 2009 earnings release dated Sept. 18, 2008. An example of
the new methodology is presented in the written Q&A document
accompanying that release. For the quarter, the company experienced
a net increase of $48 million, or $0.06 per diluted share, in
unallocated Corporate expense from net derivative losses
(reflecting the net of gains, losses and reclassifications to
operating segment results); this net amount is listed as an item
impacting comparability in the applicable summary. Prior year net
gains are not listed as an item impacting comparability. Other
Items Corporate expense was $111 million for the quarter and $126
million in the year-ago period. Current year amounts include $48
million related to net derivative losses; excluding this amount,
unallocated Corporate expense was $64 million in the quarter vs.
$126 million last year. Equity method investments generated a $2
million profit for the second quarter, down from $13 million in the
year-ago period; the decline primarily reflects higher short-term
potato costs for an international potato joint venture. Net
interest expense was $43 million in the current quarter and $62
million in the year-ago period. Current-quarter amounts include
income on the note receivable held in connection with the recent
divestiture of the company�s Trading & Merchandising
operations. The effective tax rate for continuing operations for
the quarter was 33%, slightly lower than planned. The EPS impact of
the lower-than-planned tax rate is listed among the items impacting
comparability. Going forward, the company expects an effective tax
rate of approximately 34%-35% for continuing operations, excluding
items impacting comparability. Capital Items Dividends paid during
the quarter totaled $86 million versus $88 million last year,
reflecting fewer shares outstanding. For the quarter, capital
expenditures from continuing operations for property, plant, and
equipment were $115 million, compared with $104 million in the
year-ago period. Depreciation and amortization expense from
continuing operations was approximately $79 million for the
quarter; this compares with a total of $74 million in the year-ago
period. The company continues to expect capital expenditures for
the fiscal year in the range of $475 million. Outlook The company
expects improved Consumer Foods operating profit in the second half
of fiscal 2009, particularly in the fiscal fourth quarter.
Reflecting recent trends and the expected Consumer Foods operating
profit improvement, the company reaffirms its expectations for
fiscal 2009 diluted EPS from continuing operations of slightly
above $1.50, excluding items impacting comparability. Major Items
Affecting Second-quarter Fiscal 2009 EPS Comparability Included in
the $0.38 diluted EPS from continuing operations for the second
quarter of fiscal 2009: Approximately $0.06 per diluted share of
net expense related to the net losses on derivatives used to hedge
input costs, temporarily classified in unallocated Corporate
expense. This expense will later be reclassified to the operating
segments when underlying items are expensed in segment results.
This methodology was implemented in the first quarter of fiscal
2009; prior-year amounts used a different methodology that expensed
such costs in segment results regardless of when the related item
was utilized or the related derivative liquidated. Approximately
$0.01 per diluted share of net benefit from a lower-than-planned
effective income tax rate. Included in the $0.27 diluted EPS from
continuing operations for the second quarter of fiscal 2008 (EPS
amounts rounded and after tax): Expense of approximately $0.03 per
diluted share, or $27 million pretax, for costs related to the pot
pie recall. Approximately $19 million impacted gross profit for the
Consumer Foods segment, and approximately $8 million is reflected
within SG&A expense for the Consumer Foods segment. The tax
rate associated with this expense is approximately 38%. Discussion
of Results ConAgra Foods will host a conference call at 9:30 a.m.
EST to discuss the results. Following the company�s remarks, the
call will include a question-and-answer session with the investment
community. Domestic and international participants may access the
conference call toll-free by dialing 1-800-260-6066 and
1-913-312-0654, respectively. No confirmation or pass code is
needed. This conference call also can be accessed live on the
Internet at http://investor.conagrafoods.com. A rebroadcast of the
conference call will be available after 1 p.m. EST. To access the
digital replay, a pass code number will be required. Domestic
participants should dial 1-888-203-1112, and international
participants should dial 1-719-457-0820 and enter pass code
7570064. A rebroadcast also will be available on the company�s Web
site. In addition, the company has posted a question-and-answer
supplement relating to this release at
http://investor.conagrafoods.com. To view recent company news,
please visit http://media.conagrafoods.com. ConAgra Foods, Inc.,
(NYSE: CAG) is one of North America�s leading food companies,
serving grocery retailers, as well as restaurants and other
foodservice establishments. Popular ConAgra Foods consumer brands
include: Banquet�, Chef Boyardee�, Egg Beaters�, Healthy Choice�,
Hebrew National�, Hunt's�, Marie Callender's�, Orville
Redenbacher's�, PAM�, Peter Pan�, Reddi-wip� and many others. For
more information, please visit us at www.conagrafoods.com. Note on
Forward-looking Statements: This release contains forward-looking
statements. These statements are based on management�s current
views and assumptions of future events and financial performance
and are subject to uncertainty and changes in circumstances. The
company undertakes no responsibility for updating these statements.
Readers of this release should understand that these statements are
not guarantees of performance or results. Many factors could affect
the company�s actual financial results and cause them to vary
materially from the expectations contained in the forward-looking
statements. These factors include, among other things, availability
and prices of raw materials, product pricing, future economic
circumstances, industry conditions, the company�s ability to
execute its operating and restructuring plans, competitive
environment and related market conditions, operating efficiencies,
the ultimate impact of the company�s recalls, access to capital,
actions of governments and regulatory factors affecting the
company�s businesses and other risks described in the company�s
reports filed with the Securities and Exchange Commission. The
company cautions readers not to place undue reliance on any
forward-looking statements included in this release, which speak
only as of the date made. Regulation G Disclosure Consumer Foods
Segment Below is a reconciliation of segment operating profit
exclusive of the pot pie recall costs. � � � Consumer Foods Segment
Reconciliation (impacted by rounding) � � (Dollars in millions) Q2
FY09 Q2 FY08 % Change � Consumer Foods Segment Operating Profit $ �
253 $ � 247 2% Banquet Pot Pie Recall Costs � � - � � � 27 � NA
Consumer Foods Segment Adjusted Operating Profit $ � 253 � $ � 274
� (8)% ConAgra Foods, Inc. � � � � Segment Operating Results (in
millions) � SECOND QUARTER � 13 Weeks Ended 13 Weeks Ended November
23, 2008 November 25, 2007 Percent Change SALES Consumer Foods $ �
2,042.8 $ � 1,956.2 4.4% Commercial Foods � � 1,221.5 � � � 995.0 �
22.8% Total � � 3,264.3 � � � 2,951.2 � 10.6% � OPERATING PROFIT
Consumer Foods $ 252.5 $ 247.1 2.2% Commercial Foods � � 155.5 � �
� 131.8 � 18.0% Total operating profit for segments 408.0 378.9
7.7% � Reconciliation of total operating profit to income from
continuing operations before income taxes and equity method
investment earnings � Items excluded from segment operating profit:
� General corporate expense (111.4) (126.0) (11.6)% � Interest
expense, net � � (42.7) � � � (62.2) � (31.4)% Income from
continuing operations before income taxes and equity method
investment earnings $ � 253.9 � $ � 190.7 � 33.1% � � Segment
operating profit excludes general corporate expense, equity method
investment earnings, and net interest expense. Management believes
such amounts are not directly associated with segment performance
results for the period. Management believes the presentation of
total operating profit for segments facilitates period-to-period
comparison of results of segment operations. ConAgra Foods, Inc. �
Segment Operating Results (in millions) � � SECOND QUARTER � � 26
Weeks Ended 26 Weeks Ended November 23, 2008 November 25, 2007
Percent Change SALES Consumer Foods $ � 3,911.2 $ � 3,667.2 6.7%
Commercial Foods � � 2,418.7 � � � 1,905.1 � 27.0% Total � �
6,329.9 � � � 5,572.3 � 13.6% � OPERATING PROFIT Consumer Foods $
439.6 $ 434.4 1.2% Commercial Foods � � 288.3 � � � 252.4 � 14.2%
Total operating profit for segments 727.9 686.8 6.0% �
Reconciliation of total operating profit to income from continuing
operations before income taxes and equity method investment
earnings � Items excluded from segment operating profit: � General
corporate expense (208.8 ) (196.6 ) 6.2% � Interest expense, net �
� (92.8 ) � � (117.0 ) (20.7)% Income from continuing operations
before income taxes and equity method investment earnings $ � 426.3
� $ � 373.2 � 14.2% � � Segment operating profit excludes general
corporate expense, equity method investment earnings, and net
interest expense. Management believes such amounts are not directly
associated with segment performance results for the period.
Management believes the presentation of total operating profit for
segments facilitates period-to-period comparison of results of
segment operations. ConAgra Foods, Inc. � � � � Consolidated
Statements of Earnings (in millions, except per share amounts) � �
SECOND QUARTER 13 Weeks Ended � 13 Weeks Ended � Percent November
23, 2008 November 25, 2007 Change Net sales $ � 3,264.3 $ 2,951.2 �
10.6 % Costs and expenses: Cost of goods sold 2,577.8 2,209.0 16.7
% Selling, general and administrative expenses 389.9 489.3 (20.3 )%
� Interest expense, net � � 42.7 � � � 62.2 � (31.4 )% Income from
continuing operations before income taxes and equity method
investment earnings 253.9 190.7 33.1 % Income tax expense 84.4 68.6
23.0 % Equity method investment earnings � � 1.9 � � � 12.5 � (84.8
)% Income from continuing operations 171.4 134.6 27.3 % � Income
from discontinued operations, net of tax � � (3.3 ) � � 110.2 � NA
� Net income $ � 168.1 � $ � 244.8 � (31.3 )% � Earnings per share
� basic � Income from continuing operations $ 0.38 $ 0.28 35.7 %
Income from discontinued operations � � - � � � 0.22 � (100.0 )%
Net income $ � 0.38 � $ � 0.50 � (24.0 )% � Weighted average shares
outstanding � � 447.1 � � � 487.3 � (8.3 )% � Earnings per share �
diluted � Income from continuing operations $ 0.38 $ 0.27 40.7 %
Income from discontinued operations � � (0.01 ) � � 0.23 � NA Net
income $ � 0.37 � $ � 0.50 � (26.0 )% � Weighted average share and
share equivalents outstanding � � 449.5 � � � 490.7 � (8.4 )%
ConAgra Foods, Inc. � � � � Consolidated Statements of Earnings (in
millions, except per share amounts) � � SECOND QUARTER 26 Weeks
Ended � 26 Weeks Ended Percent November 23, 2008 November 25, 2007
Change Net sales $ � 6,329.9 $ � 5,572.3 13.6 % Costs and expenses:
Cost of goods sold 5,051.9 4,211.3 20.0 % Selling, general and
administrative expenses 758.9 870.8 (12.9 )% Interest expense, net
� � 92.8 � � � 117.0 � (20.7 )% Income from continuing operations
before income taxes and equity method investment earnings 426.3
373.2 14.2 % Income tax expense 150.3 129.7 15.9 % Equity method
investment earnings � � 2.8 � � � 22.1 � (87.3 )% Income from
continuing operations 278.8 265.6 5.0 % � Income from discontinued
operations, net of tax � � 331.7 � � � 154.6 � 114.6 % � Net income
$ � 610.5 � $ � 420.2 � 45.3 % � Earnings per share � basic �
Income from continuing operations $ 0.61 $ 0.54 13.0 % Income from
discontinued operations � � 0.72 � � � 0.32 � 125.0 % Net income $
� 1.33 � $ � 0.86 � 54.7 % � Weighted average shares outstanding �
� 458.5 � � � 488.4 � (6.1 )% � Earnings per share � diluted �
Income from continuing operations $ 0.60 $ 0.54 11.1 % Income from
discontinued operations � � 0.72 � � � 0.31 � 132.3 % Net income $
� 1.32 � $ � 0.85 � 55.3 % � Weighted average share and share
equivalents outstanding � � 461.0 � � � 491.9 � (6.3 )% ConAgra
Foods, Inc. � � � Consolidated Balance Sheets (in millions) �
November 23, 2008 November 25, 2007 ASSETS Current assets Cash and
cash equivalents $ � 132.1 $ � 140.8 Receivables, less allowance
for doubtful accounts of $14.4 and $16.5 972.1 957.1 Inventories
2,280.8 2,048.8 Prepaid expenses and other current assets 455.5
347.2 Current assets held for sale � � - � � � � 2,314.1 � Total
current assets 3,840.5 � 5,808.0 � � Property, plant and equipment,
net 2,565.7 2,267.3 Goodwill 3,477.6 3,463.2 Brands, trademarks and
other intangibles, net 824.3 803.4 Other assets 1,062.6 240.8
Noncurrent assets held for sale � � - � � � � 229.3 � $ � 11,770.7
� � $ � 12,812.0 � LIABILITIES AND STOCKHOLDERS� EQUITY Current
liabilities Notes payable $ 300.1 $ 321.7 Current installments of
long-term debt 316.8 15.4 Accounts payable 1,019.5 920.5 Accrued
payroll 175.5 238.9 Other accrued liabilities 860.0 781.5 Current
liabilities held for sale � � - � � � � 1,126.0 � Total current
liabilities 2,671.9 3,404.0 � Senior long-term debt, excluding
current installments 2,856.6 3,173.7 Subordinated debt 195.9 200.0
Other noncurrent liabilities 1,271.7 1,213.4 Noncurrent liabilities
held for sale - 16.5 Common stockholders� equity � � 4,774.6 � � �
� 4,804.4 � $ � 11,770.7 � � $ � 12,812.0 �
ConAgra Brands (NYSE:CAG)
Historical Stock Chart
From Jun 2024 to Jul 2024
ConAgra Brands (NYSE:CAG)
Historical Stock Chart
From Jul 2023 to Jul 2024