CHICAGO, March 31, 2020 /PRNewswire/ -- Today Conagra
Brands, Inc. (NYSE: CAG) reported results for the third quarter of
fiscal year 2020, which ended on February
23, 2020. All comparisons are against the prior-year fiscal
period, unless otherwise noted. Certain terms used in this
release, including "Organic net sales," "EBITDA," "Free cash flow,"
"Big 3 brands," and certain "adjusted" results, are defined under
the section entitled "Definitions." See page 5 for more
information.
Third Quarter Highlights
- Third quarter net sales decreased 5.6%; organic net sales
decreased 1.7%, in-line with the Company's expectations, which were
updated in a press release issued on February 17, 2020.
- Diluted earnings per share from continuing operations (EPS) was
$0.42; Adjusted EPS of $0.47 was in-line with the Company's updated
expectations.
- The integration of Pinnacle remained on-track, and each of the
Big 3 brands delivered sequential in-market performance
improvement.
- The Company reduced debt by $450
million in the quarter and remained on-track with its
de-leveraging target of 3.6x to 3.5x by the end of fiscal
2021.
Fourth Quarter and Full Year Outlook Highlights
- To-date in the fourth fiscal quarter, the Company has
experienced significantly increased demand in its retail
businesses, associated with the COVID-19 pandemic; the Company has
also begun to experience declines in foodservice demand.
- The Company's supply chain has executed very well to-date to
meet the needs of customers and consumers.
- The Company now expects to exceed prior full-year guidance for
total-company sales and profit metrics, assuming the end-to-end
supply chain continues to operate effectively.
CEO Perspective
Sean
Connolly, president and chief executive officer of Conagra
Brands, commented, "Through the third quarter, we remained squarely
on-track to deliver on our fiscal 2020 operational objectives, and
our third quarter results were in-line with our updated
expectations."
He continued, "In more recent weeks, the entire team at Conagra
Brands has been focused on supporting our customers, consumers,
employees, and communities in the face of the COVID-19
pandemic. While we are still early in our fourth quarter, we
have seen significantly elevated demand for our retail products as
consumers have started filling their pantries for more at-home
eating. On a quarter-to-date basis, shipments and consumption
in our domestic retail business have increased approximately 50%,
which have more than offset the impact of worsening trends in our
foodservice business. Our teams have remained agile in
responding to the elevated demand, and our supply chain has
performed extremely well to fulfill customer orders. I'd like
to thank our front-line employees who continue to work tirelessly
to provide much-needed food to consumers in this unprecedented time
– their efforts have been inspiring. Although the situation
remains highly dynamic and our ultimate results depend on an
effective and uninterrupted supply chain, we now believe that we
will exceed our fiscal 2020 sales and profit guidance."
Total Company Third Quarter Results
In the quarter,
net sales decreased 5.6% to $2.6
billion. The decline in reported net sales primarily
reflects:
- a 4.0% net decrease from the divestitures of the Wesson oil
business, the Direct Store Delivery (DSD) snacks business, the
Gelit business, and the Lender's Bagel business, and the exit of
the private label peanut butter business (collectively, the "Sold
Businesses");
- a 0.1% net benefit due to foreign exchange; and
- a 1.7% decrease in organic net sales.
The 1.7% decrease in organic net sales was driven by a 1.3%
decline in volume and an unfavorable price/mix impact of
0.4%. Volume was below planned levels in the quarter as the
Company's retail and foodservice businesses experienced broad-based
category softness early in the quarter. Price/mix was unfavorable
as additional price promotions and increased retailer investments
more than offset favorable mix.
Gross profit decreased 9.0% to $684
million in the quarter, and adjusted gross profit decreased
10.5% to $699 million. The
decreases were primarily driven by higher input costs, higher
levels of brand-building investments with retailers, lower sales
volume, higher inventory write-offs, and the lost profit associated
with the Sold Businesses, partially offset by realized productivity
and cost synergies.
Selling, general, and administrative expenses (SG&A), which
include advertising and promotional (A&P) expense, decreased
4.2% to $320 million in the
quarter. Adjusted SG&A, which excludes A&P expense,
decreased 15.1% to $233 million,
primarily as a result of incremental synergies associated with the
Pinnacle Foods acquisition achieved in the quarter and the removal
of costs associated with the Sold Businesses. These benefits
were partially offset by higher stock-based compensation
expense. A&P expense for the quarter was essentially flat
at $66 million.
Net interest expense was $118
million in the quarter. Compared to the prior-year
period, net interest expense decreased $13
million, driven by lower levels of debt outstanding.
The Company's 489 million average diluted shares outstanding was
an increase of approximately 1 million shares versus the prior-year
period.
In the quarter, net income attributable to Conagra Brands
decreased 15.6% to $204 million, or
$0.42 per diluted
share. Adjusted net income attributable to Conagra Brands
decreased 7.5% to $232 million, or
$0.47 per diluted share, in the
quarter. The decrease in adjusted net income attributable to
Conagra Brands was driven primarily by the decrease in operating
profit, lower equity method investment earnings, and higher income
tax rate, partially offset by higher pension and postretirement
non-service income and lower interest expense. The decrease in
adjusted EPS in the quarter was primarily driven by the decrease in
adjusted net income.
Adjusted EBITDA, which includes equity method investment
earnings and pension and postretirement non-service income,
decreased 7.1% to $515 million in the
quarter.
Grocery & Snacks Segment Third Quarter Results
Net sales for the Grocery & Snacks segment decreased 9.5% to
$1.02 billion in the quarter, with
the divestiture of the Wesson oil and DSD snacks businesses, and
the exit of private label peanut butter subtracting 5.9%. On
an organic basis, volume decreased 1.7% and price/mix decreased
1.9%. Volume decreased across multiple categories more than
the Company planned, reflecting softer-than-expected consumer
takeaway trends. The Company believes that year-over-year
category performance early in the third quarter was negatively
impacted by a relatively warmer winter. The unfavorable
price/mix was primarily driven by unfavorable mix and increased
promotional support on Chef Boyardee and the Hunts tomatoes
business. Several snack brands, including Slim Jim, ACT II,
Snack Pack, Angie's, BIGS, and DAVID Seeds, experienced growth.
Operating profit for the segment decreased 11.4% to $199 million in the quarter. Adjusted
operating profit decreased 14.5% to $210
million, primarily driven by input cost inflation, the lost
profit from the Sold Businesses, higher inventory write-offs, and
lower sales volume, partially offset by favorable realized
productivity and cost synergies.
Refrigerated & Frozen Segment Third Quarter
Results
Net sales for the Refrigerated & Frozen
segment decreased 1.6% to $1.08
billion in the quarter, with the divestiture of the Gelit
and Lender's Bagel businesses subtracting 1.9%. Organic net sales
increased 0.3%. On an organic net sales basis, volume
decreased 0.4% and price/mix increased 0.7%. In the frozen
business, several brands such as Birds Eye, Healthy Choice, and
Gardein, continued to report solid organic growth in the quarter,
and the fiscal 2020 frozen innovation, which was launched earlier
in the fiscal year across multiple brands, continued to perform
well in-market. Several businesses, however, including frozen
single serve meals, experienced softer-than-expected growth
associated with unfavorable category dynamics and a relatively
warmer winter. Several refrigerated brands also declined in the
quarter. Increased price/mix in the segment was primarily driven by
favorable mix from the continued strength in the Company's
innovation.
Operating profit for the segment increased 0.8% to $191 million in the quarter. Adjusted operating
profit decreased 0.3% to $201 million
as the benefit of realized productivity improvements and cost
synergies were more than offset by higher input costs, the lost
profit from the Sold Businesses, and higher inventory
write-offs.
International Segment Third Quarter Results
Net sales
for the International segment decreased 3.2% to $221 million in the quarter reflecting:
- a 2.7% decrease from the divestiture of the Wesson oil
business;
- a 1.4% increase from the favorable impact of foreign exchange;
and
- a 1.9% decrease in organic net sales.
On an organic net sales basis, volume decreased 0.9% and
price/mix decreased 1.0%. During the quarter, the segment continued
to benefit from growth in the Canadian snacks and frozen businesses
as well as improvement in the Indian operation. These benefits were
more than offset by planned value-over-volume actions in the export
business and the impact of economic softness in Mexico.
Operating profit for the segment decreased 25.3% to $22 million in the quarter. Adjusted operating
profit decreased 20.4% to $22 million
as higher input costs, increased retailer investments, and the lost
profit from the Sold Businesses more than offset the benefits of
realized productivity and cost synergies.
Foodservice Segment Third Quarter Results
Net sales
for the Foodservice segment decreased 8.0% to $234 million in the quarter, with the
divestitures of the Wesson oil and Lender's Bagel businesses, and
the exit of private label peanut butter subtracting 5.8% of net
sales growth. Organic net sales decreased 2.2%. On an organic
net sales basis, volume decreased 4.6% and price/mix increased 2.4%
in the quarter. The impact of unplanned softness in restaurant
industry traffic trends early in the quarter was partially offset
by inflation-related pricing.
Operating profit decreased 25.9% to $27
million in the quarter, as cost synergies captured in the
quarter and realized productivity improvements were more than
offset by lower organic net sales, higher input costs, the lost
profit from the Sold Businesses, and higher inventory
write-offs.
Other Third Quarter Items
Corporate expenses
increased 19.8% to $75 million in the
quarter. Adjusted corporate expenses decreased 17.1% to
$60 million in the quarter as cost
synergies more than offset higher stock-based compensation
expense.
Pension and post-retirement non-service income was $16 million in the quarter, an increase of
approximately $7 million compared to
the prior-year period. Adjusted pension and post-retirement
non-service income increased $5
million to $15 million as a
result of lower interest costs due to pension remeasurements
throughout the year.
Equity method investment earnings decreased 17.3% to
$10 million in the quarter and
adjusted equity method investment earnings decreased 12.5% to
$11 million in the quarter.
Unfavorable market conditions led to a year-over-year performance
decline in the Ardent Mills joint venture.
In the quarter, the effective tax rate was 25.2%, and the
adjusted effective tax rate was 24.8%.
In the quarter, the Company paid a dividend of $0.2125 per share.
The Company remains on-schedule with its de-leveraging targets
and remains committed to a solid investment grade credit rating.
Since the closing of the Pinnacle acquisition through the end of
the third quarter, Conagra Brands has reduced total gross debt by
more than $1.5 billion.
Portfolio Update
As previously disclosed, on
January 2, 2020, the Company
completed the divestiture of its Lender's Bagel business.
Additionally, on the first day of the third quarter of fiscal
2020, the Company completed the sale of its peanut butter
manufacturing facility in Streator,
Illinois as part of its broader initiative to optimize the
Company's peanut butter business. This initiative includes the exit
of the manufacture and sale of private label peanut
butter.
Fiscal 2020 Outlook
The impact that the COVID-19
pandemic will have on the Company's fiscal 2020 consolidated
results of operations is uncertain. The dynamic nature of the
current situation makes it challenging for management to estimate
future performance of the businesses, particularly over the near
term.
To-date in the fourth quarter, the Company has seen
significantly increased demand in its retail business. The
Company has also started to see reduced demand for its foodservice
products and expects a 50-60% decline in Foodservice organic net
sales in the fourth quarter. The Company's supply chain has
effectively serviced demand to-date.
As shown in the table below, the Company now expects to exceed
prior full-year guidance for total-company sales and profit
metrics, assuming the end-to-end supply chain continues to operate
effectively.
Note that organic net sales growth excludes the impact of fiscal
2020's 53rd week. All other metrics include the impact
of the 53rd week.
Metric
|
Prior Fiscal 2020
Guidance
|
Updated Fiscal
2020 Guidance
|
Organic Net Sales
Growth
|
Flat to
+0.5%
|
Above high end of
range
|
Reported Net Sales
Growth
|
+10.0% to
+10.5%
|
Above high end of
range
|
Adj. Op.
Margin
|
15.8% to
16.2%
|
Above high end of
range
|
Adj. Net Interest
Expense
|
~$500
million
|
No change
|
Adj. Effective Tax
Rate
|
23% to 24%
|
No change
|
Avg. Diluted
Shares
|
~488
million
|
No change
|
Adj. Diluted EPS from
Cont. Ops.
|
$2.00 to
$2.07
|
Above high end of
range
|
Free Cash
Flow
|
~$950
million
|
Above $950
million
|
The inability to predict the amount and timing of the impacts of
foreign exchange, acquisitions, divestitures, and other items
impacting comparability makes a detailed reconciliation of
forward-looking non-GAAP financial measures impracticable. Please
see the end of this release for more information.
Items Affecting Comparability of EPS
The following
are included in the $0.42 diluted EPS
from continuing operations for the third quarter of fiscal 2020
(EPS amounts rounded and after tax). Please see the
reconciliation schedules at the end of this release for additional
details.
- Approximately $0.05 per diluted
share of net expense related to restructuring
- Approximately $0.01 per diluted
share of net expense related to corporate hedging derivative
losses
- Approximately $0.01 per diluted
share of positive impact due to rounding
The following are included in the $0.50 diluted EPS from continuing operations for
the third quarter of fiscal 2019 (EPS amounts rounded and after
tax). Please see the reconciliation schedules at the end of
this release for additional details.
- Approximately $0.06 per diluted
share of net expense related to restructuring plans
- Approximately $0.04 per diluted
share of net expense related to Pinnacle's inventory valuation in
connection with our acquisition accounting
- Approximately $0.06 per diluted
share of net benefit related to the novation of a legacy guarantee
related to a divested business
- Approximately $0.04 per diluted
share of net benefit related to a fair value adjustment of cash
settleable equity awards issued in connection with the Pinnacle
acquisition
- Approximately $0.01 per diluted
share of net tax expense related to unusual tax items
Definitions
Organic net sales excludes, from reported
net sales, the impacts of foreign exchange, divested businesses and
acquisitions, including the Pinnacle acquisition (until the
anniversary date of the acquisitions), as well as the impact of any
53rd week. All references to changes in volume and
price/mix throughout this release are on an organic net sales
basis.
References to adjusted items throughout this release refer to
measures computed in accordance with GAAP less the impact of items
impacting comparability. Items impacting comparability are income
or expenses (and related tax impacts) that management believes have
had, or are likely to have, a significant impact on the earnings of
the applicable business segment or on the total corporation for the
period in which the item is recognized, and are not indicative of
the Company's core operating results. These items thus affect the
comparability of underlying results from period to period.
References to earnings before interest, taxes, depreciation, and
amortization (EBITDA) refer to net income attributable to Conagra
Brands before the impacts of discontinued operations, income tax
expense (benefit), interest expense, depreciation, and
amortization. References to adjusted EBITDA refer to EBITDA
before the impacts of items impacting comparability.
Free cash flow is defined as net cash flow from operating
activities from continuing operations less additions to property,
plant, and equipment.
References to the Big 3 brands refer to the Birds Eye,
Wish-Bone, and Duncan Hines brands acquired in the Pinnacle Foods
acquisition.
Discussion of Results
Conagra Brands will host a
webcast and conference call at 9:30 a.m.
Eastern time today to discuss the results. The live audio
webcast and presentation slides will be available on
www.conagrabrands.com/investor-relations under Events &
Presentations. The conference call may be accessed by dialing
1-877-883-0383 for participants in the U.S. and 1-412-902-6506 for
all other participants and using passcode 1355629. Please dial in
10 to 15 minutes prior to the call start time. Following the
Company's remarks, the conference call will include a
question-and-answer session with the investment community.
A replay of the webcast will be available on
www.conagrabrands.com/investor-relations under Events &
Presentations until March 31,
2021.
About Conagra Brands
Conagra Brands, Inc. (NYSE:
CAG), headquartered in Chicago, is
one of North America's leading
branded food companies. Guided by an entrepreneurial spirit,
Conagra Brands combines a rich heritage of making great food with a
sharpened focus on innovation. The company's portfolio is evolving
to satisfy people's changing food preferences. Conagra's iconic
brands, such as Birds Eye®, Marie
Callender's®, Banquet®, Healthy Choice®, Slim Jim®,
Reddi-wip®, and Vlasic®, as well as emerging brands, including
Angie's® BOOMCHICKAPOP®, Duke's®, Earth Balance®, Gardein®, and
Frontera®, offer choices for every occasion. For more information,
visit www.conagrabrands.com.
Note on Forward-looking Statements
This document
contains forward-looking statements within the meaning of the
federal securities laws. These forward-looking statements are based
on management's current expectations and are subject to uncertainty
and changes in circumstances. Readers of this document should
understand that these statements are not guarantees of performance
or results. Many factors could affect our actual financial results
and cause them to vary materially from the expectations contained
in the forward-looking statements, including those set forth in
this document. These risks, uncertainties, and factors include,
among other things: the risk that the cost savings and any other
synergies from the acquisition of Pinnacle Foods Inc. (the
"Pinnacle acquisition") may not be fully realized or may take
longer to realize than expected; the risk that the Pinnacle
acquisition may not be accretive within the expected timeframe or
to the extent anticipated; the risks that the Pinnacle acquisition
and related integration will create disruption to the Company and
its management and impede the achievement of business plans; the
risk that the Pinnacle acquisition will negatively impact the
ability to retain and hire key personnel and maintain relationships
with customers, suppliers, and other third parties; risks related
to our ability to successfully address Pinnacle's business
challenges; risks related to our ability to achieve the intended
benefits of other recent acquisitions and divestitures; risks
associated with general economic and industry conditions; risks
associated with our ability to successfully execute our long-term
value creation strategies, including those in place for specific
brands at Pinnacle before the Pinnacle acquisition; risks related
to our ability to deleverage on currently anticipated timelines,
and to continue to access capital on acceptable terms or at all;
risks related to our ability to execute operating and restructuring
plans and achieve targeted operating efficiencies from cost-saving
initiatives, related to the Pinnacle acquisition and otherwise, and
to benefit from trade optimization programs, related to the
Pinnacle acquisition and otherwise; risks related to the
effectiveness of our hedging activities and ability to respond to
volatility in commodities; risks related to the Company's
competitive environment and related market conditions; risks
related to our ability to respond to changing consumer preferences
and the success of its innovation and marketing investments; risks
related to the ultimate impact of any product recalls and
litigation, including litigation related to the lead paint and
pigment matters, as well as any securities litigation, including
securities class action lawsuits; risk associated with actions of
governments and regulatory bodies that affect our businesses,
including the ultimate impact of new or revised regulations or
interpretations; risks related to the impact of the recent
coronavirus (COVID-19) outbreak on our business, suppliers,
consumers, customers and employees; risks related to the
availability and prices of raw materials, including any negative
effects caused by inflation, weather conditions or health
pandemics; disruptions or inefficiencies in our supply chain and/or
operations, including from the recent COVID-19 outbreak; risks and
uncertainties associated with intangible assets, including any
future goodwill or intangible assets impairment charges, related to
the Pinnacle acquisition or otherwise; the costs, disruption, and
diversion of management's attention due to the integration of the
Pinnacle acquisition; and other risks described in our reports
filed from time to time with the Securities and Exchange Commission
(the "SEC"). We caution readers not to place undue reliance on any
forward-looking statements included in this report, which speak
only as of the date of this report. We undertake no responsibility
to update these statements, except as required by law.
Note on Non-GAAP Financial Measures
This document
includes certain non-GAAP financial measures, including adjusted
EPS, organic net sales, adjusted gross profit, adjusted operating
profit, adjusted SG&A, adjusted corporate expenses, adjusted
gross margin, adjusted operating margin, adjusted effective tax
rate, adjusted net income, adjusted pension and post-retirement
non-service income, adjusted net interest expense, free cash flow,
net debt, adjusted equity method investment earnings, and adjusted
EBITDA. Management considers GAAP financial measures as well as
such non-GAAP financial information in its evaluation of the
Company's financial statements and believes these non-GAAP measures
provide useful supplemental information to assess the Company's
operating performance and financial position. These measures should
be viewed in addition to, and not in lieu of, the Company's diluted
earnings per share, operating performance and financial measures as
calculated in accordance with GAAP.
Certain of these non-GAAP measures, such as organic net sales,
adjusted operating margin, adjusted effective tax rate, adjusted
net interest expense, adjusted EPS, net debt, and free cash flow,
are forward-looking. Historically, the Company has excluded
the impact of certain items impacting comparability, such as, but
not limited to, restructuring expenses, the impact of the
extinguishment of debt, the impact of foreign exchange, the impact
of acquisitions and divestitures, hedging gains and losses,
impairment charges, the impact of legacy legal contingencies, and
the impact of unusual tax items, from the non-GAAP financial
measures it presents. Reconciliations of these forward-looking
non-GAAP financial measures to the most directly comparable GAAP
financial measures are not provided because the Company is unable
to provide such reconciliations without unreasonable effort, due to
the uncertainty and inherent difficulty of predicting the
occurrence and the financial impact of such items impacting
comparability and the periods in which such items may be
recognized. For the same reasons, the Company is unable to
address the probable significance of the unavailable information,
which could be material to future results.
Hedge gains and losses are generally aggregated, and net amounts
are reclassified from unallocated corporate expense to the
operating segments when the underlying commodity or foreign
currency being hedged is expensed in segment cost of goods sold.
The Company identifies these amounts as items that impact
comparability within the discussion of unallocated Corporate
results.
For more information, please contact:
MEDIA:
Mike Cummins
312-549-5257
Michael.Cummins@conagra.com
INVESTORS: Brian Kearney
312-549-5002
IR@conagra.com
Conagra Brands,
Inc.
|
Consolidated
Statements of Earnings
|
(in
millions)
|
(unaudited)
|
|
|
|
THIRD
QUARTER
|
|
|
|
Thirteen weeks
ended
|
|
|
Thirteen weeks
ended
|
|
|
|
|
|
|
|
February 23,
2020
|
|
|
February 24,
2019
|
|
|
Percent Change
|
|
Net sales
|
|
$
|
2,555.0
|
|
|
$
|
2,707.1
|
|
|
|
(5.6)
|
%
|
Costs and
expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of goods
sold
|
|
|
1,870.6
|
|
|
|
1,954.8
|
|
|
|
(4.3)
|
%
|
Selling, general and
administrative expenses
|
|
|
319.9
|
|
|
|
334.1
|
|
|
|
(4.2)
|
%
|
Pension and
postretirement non-service income
|
|
|
(16.4)
|
|
|
|
(9.8)
|
|
|
|
68.0
|
%
|
Interest expense,
net
|
|
|
117.7
|
|
|
|
130.9
|
|
|
|
(10.0)
|
%
|
Income before income
taxes and equity method investment earnings
|
|
|
263.2
|
|
|
|
297.1
|
|
|
|
(11.4)
|
%
|
Income tax
expense
|
|
|
68.9
|
|
|
|
67.2
|
|
|
|
2.5
|
%
|
Equity method
investment earnings
|
|
|
10.4
|
|
|
|
12.7
|
|
|
|
(17.3)
|
%
|
Net income
|
|
$
|
204.7
|
|
|
$
|
242.6
|
|
|
|
(15.6)
|
%
|
Less: Net income
attributable to noncontrolling interests
|
|
|
0.3
|
|
|
|
0.6
|
|
|
|
(22.0)
|
%
|
Net income
attributable to Conagra Brands, Inc.
|
|
$
|
204.4
|
|
|
$
|
242.0
|
|
|
|
(15.6)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share -
basic
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
attributable to Conagra Brands, Inc.
|
|
$
|
0.42
|
|
|
$
|
0.50
|
|
|
|
(16.0)
|
%
|
Weighted average
shares outstanding
|
|
|
487.4
|
|
|
|
486.2
|
|
|
|
0.2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share -
diluted
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
attributable to Conagra Brands, Inc.
|
|
$
|
0.42
|
|
|
$
|
0.50
|
|
|
|
(16.0)
|
%
|
Weighted average
share and share equivalents outstanding
|
|
|
488.8
|
|
|
|
487.4
|
|
|
|
0.3
|
%
|
Conagra Brands,
Inc.
|
Consolidated
Statements of Earnings
|
(in
millions)
|
(unaudited)
|
|
|
|
THIRD QUARTER YEAR TO
DATE
|
|
|
|
Thirty-nine weeks
ended
|
|
|
Thirty-nine weeks
ended
|
|
|
|
|
|
|
|
February 23,
2020
|
|
|
February 24,
2019
|
|
|
Percent Change
|
|
Net sales
|
|
$
|
7,766.5
|
|
|
$
|
6,925.2
|
|
|
|
12.1
|
%
|
Costs and
expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of goods
sold
|
|
|
5,619.7
|
|
|
|
4,980.2
|
|
|
|
12.8
|
%
|
Selling, general and
administrative expenses
|
|
|
1,090.5
|
|
|
|
1,078.7
|
|
|
|
1.1
|
%
|
Pension and
postretirement non-service income
|
|
|
(37.2)
|
|
|
|
(29.7)
|
|
|
|
25.4
|
%
|
Interest expense,
net
|
|
|
361.8
|
|
|
|
260.5
|
|
|
|
38.9
|
%
|
Income from
continuing operations before income taxes and equity method
investment earnings
|
|
|
731.7
|
|
|
|
635.5
|
|
|
|
15.1
|
%
|
Income tax
expense
|
|
|
141.5
|
|
|
|
147.0
|
|
|
|
(3.8)
|
%
|
Equity method
investment earnings
|
|
|
50.3
|
|
|
|
66.6
|
|
|
|
(24.4)
|
%
|
Income from
continuing operations
|
|
|
640.5
|
|
|
|
555.1
|
|
|
|
15.4
|
%
|
Loss from
discontinued operations, net of tax
|
|
|
—
|
|
|
|
(1.9)
|
|
|
|
100.0
|
%
|
Net income
|
|
$
|
640.5
|
|
|
$
|
553.2
|
|
|
|
15.8
|
%
|
Less: Net income
attributable to noncontrolling interests
|
|
|
1.8
|
|
|
|
1.4
|
|
|
|
36.5
|
%
|
Net income
attributable to Conagra Brands, Inc.
|
|
$
|
638.7
|
|
|
$
|
551.8
|
|
|
|
15.7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share -
basic
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from
continuing operations
|
|
$
|
1.31
|
|
|
$
|
1.28
|
|
|
|
2.3
|
%
|
Income from
discontinued operations
|
|
|
—
|
|
|
|
—
|
|
|
|
0.0
|
%
|
Net income
attributable to Conagra Brands, Inc.
|
|
$
|
1.31
|
|
|
$
|
1.28
|
|
|
|
2.3
|
%
|
Weighted average
shares outstanding
|
|
|
487.1
|
|
|
|
431.3
|
|
|
|
12.9
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share -
diluted
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from
continuing operations
|
|
$
|
1.31
|
|
|
$
|
1.28
|
|
|
|
2.3
|
%
|
Loss from
discontinued operations
|
|
|
—
|
|
|
|
(0.01)
|
|
|
|
100.0
|
%
|
Net income
attributable to Conagra Brands, Inc.
|
|
$
|
1.31
|
|
|
$
|
1.27
|
|
|
|
3.1
|
%
|
Weighted average
share and share equivalents outstanding
|
|
|
488.4
|
|
|
|
433.1
|
|
|
|
12.8
|
%
|
Conagra Brands,
Inc.
|
Consolidated Balance
Sheets
|
(in
millions)
|
(unaudited)
|
|
|
|
February 23,
2020
|
|
|
May 26,
2019
|
|
ASSETS
|
|
|
|
|
|
|
|
|
Current
assets
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
99.0
|
|
|
$
|
236.6
|
|
Receivables, less
allowance for doubtful accounts of $2.0 and $2.2
|
|
|
854.2
|
|
|
|
818.2
|
|
Inventories
|
|
|
1,646.5
|
|
|
|
1,548.9
|
|
Prepaid expenses and
other current assets
|
|
|
105.0
|
|
|
|
93.4
|
|
Current assets held
for sale
|
|
|
4.7
|
|
|
|
36.7
|
|
Total current
assets
|
|
|
2,709.4
|
|
|
|
2,733.8
|
|
Property, plant and
equipment, net
|
|
|
2,317.8
|
|
|
|
2,327.4
|
|
Goodwill
|
|
|
11,443.1
|
|
|
|
11,435.4
|
|
Brands, trademarks
and other intangibles, net
|
|
|
4,479.4
|
|
|
|
4,539.3
|
|
Other
assets
|
|
|
1,249.3
|
|
|
|
915.5
|
|
Noncurrent assets
held for sale
|
|
|
3.1
|
|
|
|
262.4
|
|
|
|
$
|
22,202.1
|
|
|
$
|
22,213.8
|
|
LIABILITIES AND
STOCKHOLDERS\' EQUITY
|
|
|
|
|
|
|
|
|
Current
liabilities
|
|
|
|
|
|
|
|
|
Notes
payable
|
|
$
|
0.8
|
|
|
$
|
1.0
|
|
Current installments
of long-term debt
|
|
|
923.8
|
|
|
|
20.6
|
|
Accounts
payable
|
|
|
1,357.4
|
|
|
|
1,252.1
|
|
Accrued
payroll
|
|
|
133.6
|
|
|
|
173.2
|
|
Other accrued
liabilities
|
|
|
711.5
|
|
|
|
690.6
|
|
Current liabilities
held for sale
|
|
|
—
|
|
|
|
5.1
|
|
Total current
liabilities
|
|
|
3,127.1
|
|
|
|
2,142.6
|
|
Senior long-term
debt, excluding current installments
|
|
|
8,897.8
|
|
|
|
10,459.8
|
|
Subordinated
debt
|
|
|
195.9
|
|
|
|
195.9
|
|
Other noncurrent
liabilities
|
|
|
2,117.4
|
|
|
|
1,951.8
|
|
Total stockholders'
equity
|
|
|
7,863.9
|
|
|
|
7,463.7
|
|
|
|
$
|
22,202.1
|
|
|
$
|
22,213.8
|
|
Conagra Brands, Inc.
and Subsidiaries
|
Condensed
Consolidated Statements of Cash Flows
|
(in
millions)
|
(unaudited)
|
|
|
|
Thirty-nine weeks
ended
|
|
|
|
February
23,
2020
|
|
|
February
24,
2019
|
|
Cash flows from
operating activities:
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
640.5
|
|
|
$
|
553.2
|
|
Loss from
discontinued operations
|
|
|
—
|
|
|
|
(1.9)
|
|
Income from
continuing operations
|
|
|
640.5
|
|
|
|
555.1
|
|
Adjustments to
reconcile net income to net cash flows from operating
activities:
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
|
292.5
|
|
|
|
232.6
|
|
Asset impairment
charges
|
|
|
113.5
|
|
|
|
3.0
|
|
Loss (gain) on
divestiture
|
|
|
2.2
|
|
|
|
(13.2)
|
|
Earnings of affiliates
in excess of distributions
|
|
|
(15.8)
|
|
|
|
(23.4)
|
|
Stock-settled
share-based payments expense
|
|
|
29.0
|
|
|
|
22.5
|
|
Contributions to
pension plans
|
|
|
(11.0)
|
|
|
|
(11.5)
|
|
Pension
benefit
|
|
|
(25.8)
|
|
|
|
(21.0)
|
|
Proceeds from
settlement of interest rate swaps
|
|
|
—
|
|
|
|
47.5
|
|
Novation of a legacy
guarantee
|
|
|
—
|
|
|
|
(27.3)
|
|
Other items
|
|
|
12.1
|
|
|
|
25.4
|
|
Change in operating
assets and liabilities excluding effects of business acquisitions
and dispositions:
|
|
|
|
|
|
|
|
|
Receivables
|
|
|
(37.2)
|
|
|
|
(108.4)
|
|
Inventories
|
|
|
(104.6)
|
|
|
|
13.0
|
|
Deferred income taxes
and income taxes payable, net
|
|
|
(33.3)
|
|
|
|
39.3
|
|
Prepaid expenses and
other current assets
|
|
|
(14.6)
|
|
|
|
(20.0)
|
|
Accounts
payable
|
|
|
116.4
|
|
|
|
(15.6)
|
|
Accrued
payroll
|
|
|
(40.0)
|
|
|
|
(9.0)
|
|
Other accrued
liabilities
|
|
|
(17.4)
|
|
|
|
56.1
|
|
Net cash flows from
operating activities — continuing operations
|
|
|
906.5
|
|
|
|
745.1
|
|
Net cash flows from
operating activities — discontinued operations
|
|
|
—
|
|
|
|
11.2
|
|
Net cash flows from
operating activities
|
|
|
906.5
|
|
|
|
756.3
|
|
Cash flows from
investing activities:
|
|
|
|
|
|
|
|
|
Additions to property,
plant and equipment
|
|
|
(265.3)
|
|
|
|
(236.1)
|
|
Sale of property,
plant and equipment
|
|
|
8.7
|
|
|
|
18.7
|
|
Purchase of marketable
securities
|
|
|
(37.9)
|
|
|
|
—
|
|
Sale of marketable
securities
|
|
|
43.1
|
|
|
|
—
|
|
Purchase of
businesses, net of cash acquired
|
|
|
—
|
|
|
|
(5,119.2)
|
|
Proceeds from
divestitures, net of cash divested
|
|
|
191.4
|
|
|
|
32.2
|
|
Other items
|
|
|
0.1
|
|
|
|
0.1
|
|
Net cash flows from
investing activities
|
|
|
(59.9)
|
|
|
|
(5,304.3)
|
|
Cash flows from
financing activities:
|
|
|
|
|
|
|
|
|
Net short-term
borrowings
|
|
|
(0.1)
|
|
|
|
(278.3)
|
|
Issuance of long-term
debt
|
|
|
—
|
|
|
|
8,310.5
|
|
Repayment of long-term
debt
|
|
|
(665.9)
|
|
|
|
(3,517.1)
|
|
Debt issuance costs
and bridge financing fees
|
|
|
—
|
|
|
|
(95.2)
|
|
Payment of intangible
asset financing arrangement
|
|
|
(13.6)
|
|
|
|
(14.0)
|
|
Issuance of Conagra
Brands, Inc. common shares, net
|
|
|
—
|
|
|
|
555.7
|
|
Cash dividends
paid
|
|
|
(310.1)
|
|
|
|
(253.0)
|
|
Exercise of stock
options and issuance of other stock awards, including tax
withholdings
|
|
|
4.3
|
|
|
|
(4.1)
|
|
Other items
|
|
|
0.8
|
|
|
|
0.9
|
|
Net cash flows from
financing activities
|
|
|
(984.6)
|
|
|
|
4,705.4
|
|
Effect of exchange
rate changes on cash and cash equivalents and restricted
cash
|
|
|
0.4
|
|
|
|
(3.2)
|
|
Net change in cash
and cash equivalents and restricted cash
|
|
|
(137.6)
|
|
|
|
154.2
|
|
Cash and cash
equivalents and restricted cash at beginning of period
|
|
|
237.6
|
|
|
|
129.0
|
|
Cash and cash
equivalents and restricted cash at end of period
|
|
$
|
100.0
|
|
|
$
|
283.2
|
|
Conagra Brands,
Inc.
|
Reconciliation of
Non-GAAP Financial Measures to Reported Financial
Measures
|
(in
millions)
|
|
Q3
FY20
|
|
Grocery &
Snacks
|
|
|
Refrigerated
&
Frozen
|
|
|
International
|
|
|
Foodservice
|
|
|
Total Conagra
Brands
|
|
Net
Sales
|
|
$
|
1,022.9
|
|
|
$
|
1,076.8
|
|
|
$
|
220.9
|
|
|
$
|
234.4
|
|
|
$
|
2,555.0
|
|
Impact of foreign
exchange
|
|
|
—
|
|
|
|
—
|
|
|
|
(3.2)
|
|
|
|
—
|
|
|
|
(3.2)
|
|
Net sales from
divested businesses 1
|
|
|
(4.4)
|
|
|
|
(3.8)
|
|
|
|
—
|
|
|
|
(0.9)
|
|
|
|
(9.1)
|
|
Organic Net
Sales
|
|
$
|
1,018.5
|
|
|
$
|
1,073.0
|
|
|
$
|
217.7
|
|
|
$
|
233.5
|
|
|
$
|
2,542.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year-over-year
change - Net Sales
|
|
|
(9.5)
|
%
|
|
|
(1.6)
|
%
|
|
|
(3.2)
|
%
|
|
|
(8.0)
|
%
|
|
|
(5.6)
|
%
|
Impact of
foreign exchange (pp)
|
|
|
—
|
|
|
|
—
|
|
|
|
(1.4)
|
|
|
|
—
|
|
|
|
(0.1)
|
|
Net sales from
divested businesses (pp)
|
|
|
5.9
|
|
|
|
1.9
|
|
|
|
2.7
|
|
|
|
5.8
|
|
|
|
4.0
|
|
Organic Net
Sales
|
|
|
(3.6)
|
%
|
|
|
0.3
|
%
|
|
|
(1.9)
|
%
|
|
|
(2.2)
|
%
|
|
|
(1.7)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Volume
(Organic)
|
|
|
(1.7)
|
%
|
|
|
(0.4)
|
%
|
|
|
(0.9)
|
%
|
|
|
(4.6)
|
%
|
|
|
(1.3)
|
%
|
Price/Mix
|
|
|
(1.9)
|
%
|
|
|
0.7
|
%
|
|
|
(1.0)
|
%
|
|
|
2.4
|
%
|
|
|
(0.4)
|
%
|
Q3
FY19
|
|
Grocery &
Snacks
|
|
|
Refrigerated
&
Frozen
|
|
|
International
|
|
|
Foodservice
|
|
|
Total Conagra
Brands
|
|
Net
Sales
|
|
$
|
1,129.8
|
|
|
$
|
1,094.3
|
|
|
$
|
228.3
|
|
|
$
|
254.7
|
|
|
$
|
2,707.1
|
|
Net sales from
divested businesses 1
|
|
|
(73.6)
|
|
|
|
(24.9)
|
|
|
|
(6.3)
|
|
|
|
(15.9)
|
|
|
|
(120.7)
|
|
Organic Net
Sales
|
|
$
|
1,056.2
|
|
|
$
|
1,069.4
|
|
|
$
|
222.0
|
|
|
$
|
238.8
|
|
|
$
|
2,586.4
|
|
|
|
Q3 FY20
YTD
|
|
Grocery &
Snacks
|
|
|
Refrigerated
&
Frozen
|
|
|
International
|
|
|
Foodservice
|
|
|
Total Conagra
Brands
|
|
Net
Sales
|
|
$
|
3,143.0
|
|
|
$
|
3,204.2
|
|
|
$
|
659.6
|
|
|
$
|
759.7
|
|
|
$
|
7,766.5
|
|
Impact of foreign
exchange
|
|
|
—
|
|
|
|
—
|
|
|
|
(0.6)
|
|
|
|
—
|
|
|
|
(0.6)
|
|
Net sales from
acquired businesses
|
|
|
(406.3)
|
|
|
|
(567.6)
|
|
|
|
(46.0)
|
|
|
|
(57.7)
|
|
|
|
(1,077.6)
|
|
Net sales from
divested businesses 1
|
|
|
(68.9)
|
|
|
|
(23.2)
|
|
|
|
—
|
|
|
|
(11.2)
|
|
|
|
(103.3)
|
|
Organic Net
Sales
|
|
$
|
2,667.8
|
|
|
$
|
2,613.4
|
|
|
$
|
613.0
|
|
|
$
|
690.8
|
|
|
$
|
6,585.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year-over-year
change - Net Sales
|
|
|
8.3
|
%
|
|
|
21.5
|
%
|
|
|
3.0
|
%
|
|
|
1.6
|
%
|
|
|
12.1
|
%
|
Impact of foreign
exchange (pp)
|
|
|
—
|
|
|
|
—
|
|
|
|
(0.1)
|
|
|
|
—
|
|
|
|
—
|
|
Net sales from
acquired businesses (pp)
|
|
|
(14.0)
|
|
|
|
(21.5)
|
|
|
|
(7.2)
|
|
|
|
(7.7)
|
|
|
|
(15.6)
|
|
Net sales from
divested businesses (pp)
|
|
|
3.6
|
|
|
|
1.3
|
|
|
|
3.3
|
|
|
|
4.3
|
|
|
|
2.9
|
|
Net sales from sold
Trenton plant (pp)
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
0.3
|
|
|
|
—
|
|
Organic Net
Sales
|
|
|
(2.1)
|
%
|
|
|
1.3
|
%
|
|
|
(1.0)
|
%
|
|
|
(1.5)
|
%
|
|
|
(0.6)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Volume
(Organic)
|
|
|
(0.7)
|
%
|
|
|
0.0
|
%
|
|
|
(1.2)
|
%
|
|
|
(4.6)
|
%
|
|
|
(0.9)
|
%
|
Price/Mix
|
|
|
(1.4)
|
%
|
|
|
1.3
|
%
|
|
|
0.2
|
%
|
|
|
3.1
|
%
|
|
|
0.3
|
%
|
Q3 FY19
YTD
|
|
Grocery &
Snacks
|
|
|
Refrigerated
&
Frozen
|
|
|
International
|
|
|
Foodservice
|
|
|
Total Conagra
Brands
|
|
Net
Sales
|
|
$
|
2,901.0
|
|
|
$
|
2,636.2
|
|
|
$
|
640.4
|
|
|
$
|
747.6
|
|
|
$
|
6,925.2
|
|
Net sales from
divested businesses 1
|
|
|
(177.1)
|
|
|
|
(57.3)
|
|
|
|
(21.2)
|
|
|
|
(44.1)
|
|
|
|
(299.7)
|
|
Net sales from sold
Trenton plant
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(2.0)
|
|
|
|
(2.0)
|
|
Organic Net
Sales
|
|
$
|
2,723.9
|
|
|
$
|
2,578.9
|
|
|
$
|
619.2
|
|
|
$
|
701.5
|
|
|
$
|
6,623.5
|
|
|
1 A
portion of our Net sales from divested businesses relates to our
private label peanut butter business, which we exited in the third
quarter of fiscal 2020. This exit is occurring in waves and will
continue to produce net sales through the end of fiscal
2020.
|
Conagra Brands,
Inc.
|
Reconciliation of
Non-GAAP Financial Measures to Reported Financial
Measures
|
(in
millions)
|
|
Q3
FY20
|
|
Grocery &
Snacks
|
|
|
Refrigerated
& Frozen
|
|
|
International
|
|
|
Foodservice
|
|
|
Corporate
Expense
|
|
|
Total
Conagra
Brands
|
|
Operating
Profit
|
|
$
|
199.4
|
|
|
$
|
190.7
|
|
|
$
|
22.3
|
|
|
$
|
27.2
|
|
|
$
|
(75.1)
|
|
|
$
|
364.5
|
|
Restructuring
plans
|
|
|
10.9
|
|
|
|
10.5
|
|
|
|
—
|
|
|
|
—
|
|
|
|
10.4
|
|
|
|
31.8
|
|
Acquisitions and
divestitures
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
0.6
|
|
|
|
0.6
|
|
Loss on divestiture
of business
|
|
|
—
|
|
|
|
0.2
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
0.2
|
|
Adjustment to
contract settlement gain
|
|
|
0.1
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
0.1
|
|
Corporate hedging
derivative losses (gains)
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
3.8
|
|
|
|
3.8
|
|
Adjusted Operating
Profit
|
|
$
|
210.4
|
|
|
$
|
201.4
|
|
|
$
|
22.3
|
|
|
$
|
27.2
|
|
|
$
|
(60.3)
|
|
|
$
|
401.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Profit
Margin
|
|
|
19.5
|
%
|
|
|
17.7
|
%
|
|
|
10.1
|
%
|
|
|
11.6
|
%
|
|
|
|
|
|
|
14.3
|
%
|
Adjusted Operating
Profit Margin
|
|
|
20.6
|
%
|
|
|
18.7
|
%
|
|
|
10.1
|
%
|
|
|
11.6
|
%
|
|
|
|
|
|
|
15.7
|
%
|
Year-over-year %
change - Operating Profit
|
|
|
(11.4)
|
%
|
|
|
0.8
|
%
|
|
|
(25.3)
|
%
|
|
|
(25.9)
|
%
|
|
|
19.8
|
%
|
|
|
(12.8)
|
%
|
Year-over year %
change - Adjusted Operating Profit
|
|
|
(14.5)
|
%
|
|
|
(0.3)
|
%
|
|
|
(20.4)
|
%
|
|
|
(25.9)
|
%
|
|
|
(17.1)
|
%
|
|
|
(8.9)
|
%
|
Year-over-year bps
change - Adjusted Operating Profit
|
|
|
(122)
|
bps
|
|
|
24
|
bps
|
|
|
(218)
|
bps
|
|
|
(282)
|
bps
|
|
|
|
|
|
|
(57)
|
bps
|
Q3
FY19
|
|
Grocery &
Snacks
|
|
|
Refrigerated
& Frozen
|
|
|
International
|
|
|
Foodservice
|
|
|
Corporate
Expense
|
|
|
Total
Conagra
Brands
|
|
Operating
Profit
|
|
$
|
225.0
|
|
|
$
|
189.1
|
|
|
$
|
29.9
|
|
|
$
|
36.8
|
|
|
$
|
(62.6)
|
|
|
$
|
418.2
|
|
Restructuring
plans
|
|
|
3.0
|
|
|
|
2.1
|
|
|
|
(0.1)
|
|
|
|
—
|
|
|
|
33.4
|
|
|
|
38.4
|
|
Acquisitions and
divestitures
|
|
|
0.1
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
2.3
|
|
|
|
2.4
|
|
Inventory fair value
mark-up rollout
|
|
|
17.8
|
|
|
|
10.8
|
|
|
|
(1.7)
|
|
|
|
—
|
|
|
|
—
|
|
|
|
26.9
|
|
Novation of a legacy
guarantee
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(27.3)
|
|
|
|
(27.3)
|
|
Fair value adjustment
of cash settleable equity awards issued in connection with Pinnacle
acquisition
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(18.6)
|
|
|
|
(18.6)
|
|
Corporate hedging
derivative losses (gains)
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
0.2
|
|
|
|
0.2
|
|
Adjusted Operating
Profit
|
|
$
|
245.9
|
|
|
$
|
202.0
|
|
|
$
|
28.1
|
|
|
$
|
36.8
|
|
|
$
|
(72.6)
|
|
|
$
|
440.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Profit
Margin
|
|
|
19.9
|
%
|
|
|
17.3
|
%
|
|
|
13.1
|
%
|
|
|
14.4
|
%
|
|
|
|
|
|
|
15.4
|
%
|
Adjusted Operating
Profit Margin
|
|
|
21.8
|
%
|
|
|
18.5
|
%
|
|
|
12.3
|
%
|
|
|
14.4
|
%
|
|
|
|
|
|
|
16.3
|
%
|
Conagra Brands,
Inc.
|
Reconciliation of
Non-GAAP Financial Measures to Reported Financial
Measures
|
(in
millions)
|
|
Q3 FY20
YTD
|
|
Grocery &
Snacks
|
|
|
Refrigerated
& Frozen
|
|
|
International
|
|
|
Foodservice
|
|
|
Corporate
Expense
|
|
|
Total
Conagra
Brands
|
|
Operating
Profit
|
|
$
|
614.8
|
|
|
$
|
533.7
|
|
|
$
|
73.5
|
|
|
$
|
96.6
|
|
|
$
|
(262.3)
|
|
|
$
|
1,056.3
|
|
Restructuring
plans
|
|
|
49.2
|
|
|
|
12.3
|
|
|
|
1.4
|
|
|
|
—
|
|
|
|
53.6
|
|
|
|
116.5
|
|
Acquisitions and
divestitures
|
|
|
3.0
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
0.6
|
|
|
|
3.6
|
|
Impairment of
businesses held for sale
|
|
|
31.4
|
|
|
|
27.6
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
59.0
|
|
Intangible impairment
charges
|
|
|
3.5
|
|
|
|
15.8
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
19.3
|
|
Loss on divestiture
of businesses
|
|
|
1.5
|
|
|
|
0.2
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
1.7
|
|
Contract settlement
gain
|
|
|
(11.9)
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(11.9)
|
|
Legal
matters
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(1.5)
|
|
|
|
(1.5)
|
|
Environmental
matters
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
6.6
|
|
|
|
6.6
|
|
Corporate hedging
derivative losses (gains)
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
9.2
|
|
|
|
9.2
|
|
Adjusted Operating
Profit
|
|
$
|
691.5
|
|
|
$
|
589.6
|
|
|
$
|
74.9
|
|
|
$
|
96.6
|
|
|
$
|
(193.8)
|
|
|
$
|
1,258.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Profit
Margin
|
|
|
19.6
|
%
|
|
|
16.7
|
%
|
|
|
11.1
|
%
|
|
|
12.7
|
%
|
|
|
|
|
|
|
13.6
|
%
|
Adjusted Operating
Profit Margin
|
|
|
22.0
|
%
|
|
|
18.4
|
%
|
|
|
11.4
|
%
|
|
|
12.7
|
%
|
|
|
|
|
|
|
16.2
|
%
|
Year-over-year %
change - Operating Profit
|
|
|
(1.4)
|
%
|
|
|
20.9
|
%
|
|
|
(18.0)
|
%
|
|
|
(2.1)
|
%
|
|
|
(32.2)
|
%
|
|
|
21.9
|
%
|
Year-over year %
change - Adjusted Operating Profit
|
|
|
4.9
|
%
|
|
|
27.0
|
%
|
|
|
(10.9)
|
%
|
|
|
(2.1)
|
%
|
|
|
7.1
|
%
|
|
|
11.8
|
%
|
Year-over-year bps
change - Adjusted Operating Profit
|
|
|
(73)
|
bps
|
|
|
79
|
bps
|
|
|
(178)
|
bps
|
|
|
(48)
|
bps
|
|
|
|
|
|
|
(4)
|
bps
|
Q3 FY19
YTD
|
|
Grocery &
Snacks
|
|
|
Refrigerated
& Frozen
|
|
|
International
|
|
|
Foodservice
|
|
|
Corporate
Expense
|
|
|
Total
Conagra
Brands
|
|
Operating
Profit
|
|
$
|
623.2
|
|
|
$
|
441.4
|
|
|
$
|
89.7
|
|
|
$
|
98.8
|
|
|
$
|
(386.8)
|
|
|
$
|
866.3
|
|
Restructuring
plans
|
|
|
5.2
|
|
|
|
2.2
|
|
|
|
3.9
|
|
|
|
—
|
|
|
|
139.2
|
|
|
|
150.5
|
|
Gain on sale of Del
Monte business
|
|
|
—
|
|
|
|
—
|
|
|
|
(13.2)
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(13.2)
|
|
Acquisitions and
divestitures
|
|
|
1.0
|
|
|
|
—
|
|
|
|
2.9
|
|
|
|
—
|
|
|
|
100.0
|
|
|
|
103.9
|
|
Integration
costs
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
8.9
|
|
|
|
8.9
|
|
Inventory fair value
mark-up rollout
|
|
|
29.7
|
|
|
|
20.7
|
|
|
|
0.9
|
|
|
|
—
|
|
|
|
—
|
|
|
|
51.3
|
|
Novation of a legacy
guarantee
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(27.3)
|
|
|
|
(27.3)
|
|
Fair value adjustment
of cash settleable equity awards issued in connection with Pinnacle
acquisition
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(18.6)
|
|
|
|
(18.6)
|
|
Corporate hedging
derivative losses (gains)
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
3.8
|
|
|
|
3.8
|
|
Adjusted Operating
Profit
|
|
$
|
659.1
|
|
|
$
|
464.3
|
|
|
$
|
84.2
|
|
|
$
|
98.8
|
|
|
$
|
(180.8)
|
|
|
$
|
1,125.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Profit
Margin
|
|
|
21.5
|
%
|
|
|
16.7
|
%
|
|
|
14.0
|
%
|
|
|
13.2
|
%
|
|
|
|
|
|
|
12.5
|
%
|
Adjusted Operating
Profit Margin
|
|
|
22.7
|
%
|
|
|
17.6
|
%
|
|
|
13.1
|
%
|
|
|
13.2
|
%
|
|
|
|
|
|
|
16.3
|
%
|
Conagra Brands,
Inc.
|
Reconciliation of
Non-GAAP Financial Measures to Reported Financial
Measures
|
(in
millions)
|
|
Q3
FY20
|
|
Gross
profit
|
|
|
Selling,
general
and
administrative
expenses
|
|
|
Operating
profit 1
|
|
|
Income from
continuing
operations before
income taxes and
equity method
investment earnings
|
|
|
Income
tax
expense
|
|
|
Income
tax
rate
|
|
|
Net income
attributable
to Conagra
Brands, Inc.
|
|
|
Diluted EPS
from
income
from continuing
operations
attributable
to Conagra
Brands, Inc common
stockholders
|
|
Reported
|
|
$
|
684.4
|
|
|
$
|
319.9
|
|
|
$
|
364.5
|
|
|
$
|
263.2
|
|
|
$
|
68.9
|
|
|
|
25.2
|
%
|
|
$
|
204.4
|
|
|
$
|
0.42
|
|
% of Net
Sales
|
|
|
26.8
|
%
|
|
|
12.5
|
%
|
|
|
14.3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring
plans
|
|
|
10.9
|
|
|
|
20.9
|
|
|
|
31.8
|
|
|
|
31.8
|
|
|
|
7.9
|
|
|
|
|
|
|
|
23.9
|
|
|
|
0.05
|
|
Acquisitions and
divestitures
|
|
|
—
|
|
|
|
0.6
|
|
|
|
0.6
|
|
|
|
0.6
|
|
|
|
0.2
|
|
|
|
|
|
|
|
0.4
|
|
|
|
—
|
|
Corporate hedging
derivative losses (gains)
|
|
|
3.8
|
|
|
|
—
|
|
|
|
3.8
|
|
|
|
3.8
|
|
|
|
1.0
|
|
|
|
|
|
|
|
2.8
|
|
|
|
0.01
|
|
Advertising and
promotion expenses 2
|
|
|
—
|
|
|
|
65.5
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
|
—
|
|
|
|
—
|
|
Pension settlement
and valuation adjustment
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(1.9)
|
|
|
|
(0.4)
|
|
|
|
|
|
|
|
(1.5)
|
|
|
|
—
|
|
Adjustment to gain on
Ardent JV asset sale
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
0.1
|
|
|
|
|
|
|
|
0.5
|
|
|
|
—
|
|
Adjustment to
contract settlement gain
|
|
|
—
|
|
|
|
0.1
|
|
|
|
0.1
|
|
|
|
0.1
|
|
|
|
—
|
|
|
|
|
|
|
|
0.1
|
|
|
|
—
|
|
Loss on divestiture
of business
|
|
|
—
|
|
|
|
0.2
|
|
|
|
0.2
|
|
|
|
0.2
|
|
|
|
0.1
|
|
|
|
|
|
|
|
0.1
|
|
|
|
—
|
|
Unusual tax
items
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(1.1)
|
|
|
|
|
|
|
|
1.1
|
|
|
|
—
|
|
Rounding
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
|
—
|
|
|
|
(0.01)
|
|
Adjusted
|
|
$
|
699.1
|
|
|
$
|
232.6
|
|
|
$
|
401.0
|
|
|
$
|
297.8
|
|
|
$
|
76.7
|
|
|
|
24.8
|
%
|
|
$
|
231.8
|
|
|
$
|
0.47
|
|
% of Net
Sales
|
|
|
27.4
|
%
|
|
|
9.1
|
%
|
|
|
15.7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year-over-year
% of net sales change - reported
|
|
|
(100)
|
bps
|
|
|
18
|
bps
|
|
|
(118)
|
bps
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year-over-year
% of net sales change - adjusted
|
|
|
(150)
|
bps
|
|
|
(101)
|
bps
|
|
|
(57)
|
bps
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year-over-year
change - reported
|
|
|
(9.0)
|
%
|
|
|
(4.2)
|
%
|
|
|
(12.8)
|
%
|
|
|
(11.4)
|
%
|
|
|
2.5
|
%
|
|
|
|
|
|
|
(15.6)
|
%
|
|
|
(16.0)
|
%
|
Year-over-year
change - adjusted
|
|
|
(10.5)
|
%
|
|
|
(15.1)
|
%
|
|
|
(8.9)
|
%
|
|
|
(6.7)
|
%
|
|
|
(5.0)
|
%
|
|
|
|
|
|
|
(7.5)
|
%
|
|
|
(7.8)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Q3
FY19
|
|
Gross
profit
|
|
|
Selling,
general
and
administrative
expenses
|
|
|
Operating
profit 1
|
|
|
Income from
continuing
operations before
income taxes and
equity method
investment earnings
|
|
|
Income
tax
expense
|
|
|
Income
tax
rate
|
|
|
Net income
attributable
to Conagra
Brands, Inc.
|
|
|
Diluted EPS
from
income
from continuing
operations
attributable
to Conagra
Brands, Inc common
stockholders
|
|
Reported
|
|
$
|
752.3
|
|
|
$
|
334.1
|
|
|
$
|
418.2
|
|
|
$
|
297.1
|
|
|
$
|
67.2
|
|
|
|
21.7
|
%
|
|
$
|
242.0
|
|
|
$
|
0.50
|
|
% of Net
Sales
|
|
|
27.8
|
%
|
|
|
12.3
|
%
|
|
|
15.4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring
plans
|
|
|
1.9
|
|
|
|
36.5
|
|
|
|
38.4
|
|
|
|
38.4
|
|
|
|
9.7
|
|
|
|
|
|
|
|
28.7
|
|
|
|
0.06
|
|
Acquisitions and
divestitures
|
|
|
—
|
|
|
|
2.4
|
|
|
|
2.4
|
|
|
|
2.4
|
|
|
|
0.5
|
|
|
|
|
|
|
|
1.9
|
|
|
|
—
|
|
Corporate hedging
derivative losses (gains)
|
|
|
0.2
|
|
|
|
—
|
|
|
|
0.2
|
|
|
|
0.2
|
|
|
|
—
|
|
|
|
|
|
|
|
0.2
|
|
|
|
—
|
|
Advertising and
promotion expenses 2
|
|
|
—
|
|
|
|
67.4
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
|
—
|
|
|
|
—
|
|
Inventory fair value
mark-up rollout
|
|
|
26.9
|
|
|
|
—
|
|
|
|
26.9
|
|
|
|
26.9
|
|
|
|
6.9
|
|
|
|
|
|
|
|
20.0
|
|
|
|
0.04
|
|
Novation of a legacy
guarantee
|
|
|
—
|
|
|
|
(27.3)
|
|
|
|
(27.3)
|
|
|
|
(27.3)
|
|
|
|
—
|
|
|
|
|
|
|
|
(27.3)
|
|
|
|
(0.06)
|
|
Fair value adjustment
of cash settleable equity awards issued in connection with Pinnacle
acquisition
|
|
|
—
|
|
|
|
(18.6)
|
|
|
|
(18.6)
|
|
|
|
(18.6)
|
|
|
|
(1.1)
|
|
|
|
|
|
|
|
(17.5)
|
|
|
|
(0.04)
|
|
Unusual tax
items
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(2.5)
|
|
|
|
|
|
|
|
2.5
|
|
|
|
0.01
|
|
Adjusted
|
|
$
|
781.3
|
|
|
$
|
273.7
|
|
|
$
|
440.2
|
|
|
$
|
319.1
|
|
|
$
|
80.7
|
|
|
|
24.3
|
%
|
|
$
|
250.5
|
|
|
$
|
0.51
|
|
% of Net
Sales
|
|
|
28.9
|
%
|
|
|
10.1
|
%
|
|
|
16.3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1
Operating profit is derived from taking Income from continuing
operations before income taxes and equity method investment
earnings, adding back Interest expense, net and removing Pension
and postretirement non-service income.
|
2 Advertising and promotion expense
(A&P) has been removed from adjusted selling, general and
administrative expense because this metric is used in reporting to
management, and management believes this adjusted measure provides
useful supplemental information to assess the Company's operating
performance. Please note that A&P is not removed from
adjusted profit measures.
|
Conagra Brands,
Inc.
|
Reconciliation of
Non-GAAP Financial Measures to Reported Financial
Measures
|
(in
millions)
|
|
Q3 FY20
YTD
|
|
Gross
profit
|
|
|
Selling,
general
and
administrative
expenses
|
|
|
Operating
profit 1
|
|
|
Income from
continuing
operations before
income taxes and
equity method
investment earnings
|
|
|
Income
tax
expense
|
|
|
Income
tax
rate
|
|
|
Net income
attributable to
Conagra
Brands, Inc.
|
|
|
Diluted EPS
from
income
from continuing
operations
attributable
to Conagra
Brands, Inc common
stockholders
|
|
Reported
|
|
$
|
2,146.8
|
|
|
$
|
1,090.5
|
|
|
$
|
1,056.3
|
|
|
$
|
731.7
|
|
|
$
|
141.5
|
|
|
|
18.1
|
%
|
|
$
|
638.7
|
|
|
$
|
1.31
|
|
% of Net
Sales
|
|
|
27.6
|
%
|
|
|
14.0
|
%
|
|
|
13.6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring
plans
|
|
|
23.0
|
|
|
|
93.5
|
|
|
|
116.5
|
|
|
|
117.1
|
|
|
|
27.1
|
|
|
|
|
|
|
|
90.0
|
|
|
|
0.18
|
|
Acquisitions and
divestitures
|
|
|
—
|
|
|
|
3.6
|
|
|
|
3.6
|
|
|
|
3.6
|
|
|
|
1.0
|
|
|
|
|
|
|
|
2.6
|
|
|
|
0.01
|
|
Corporate hedging
derivative losses (gains)
|
|
|
9.2
|
|
|
|
—
|
|
|
|
9.2
|
|
|
|
9.2
|
|
|
|
2.3
|
|
|
|
|
|
|
|
6.9
|
|
|
|
0.01
|
|
Advertising and
promotion expenses 2
|
|
|
—
|
|
|
|
171.5
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
|
—
|
|
|
|
—
|
|
Pension settlement
and valuation adjustment
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(1.9)
|
|
|
|
(0.4)
|
|
|
|
|
|
|
|
(1.5)
|
|
|
|
—
|
|
Gain on Ardent JV
asset sale
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(1.0)
|
|
|
|
|
|
|
|
(3.2)
|
|
|
|
(0.01)
|
|
Impairment of
businesses held for sale
|
|
|
—
|
|
|
|
59.0
|
|
|
|
59.0
|
|
|
|
59.0
|
|
|
|
4.0
|
|
|
|
|
|
|
|
55.0
|
|
|
|
0.11
|
|
Contract settlement
gain
|
|
|
—
|
|
|
|
(11.9)
|
|
|
|
(11.9)
|
|
|
|
(11.9)
|
|
|
|
(3.0)
|
|
|
|
|
|
|
|
(8.9)
|
|
|
|
(0.02)
|
|
Intangible impairment
charges
|
|
|
—
|
|
|
|
19.3
|
|
|
|
19.3
|
|
|
|
19.3
|
|
|
|
4.5
|
|
|
|
|
|
|
|
14.8
|
|
|
|
0.03
|
|
Legal
matters
|
|
|
—
|
|
|
|
(1.5)
|
|
|
|
(1.5)
|
|
|
|
(1.5)
|
|
|
|
(0.4)
|
|
|
|
|
|
|
|
(1.1)
|
|
|
|
—
|
|
Environmental
matters
|
|
|
—
|
|
|
|
6.6
|
|
|
|
6.6
|
|
|
|
6.6
|
|
|
|
1.6
|
|
|
|
|
|
|
|
5.0
|
|
|
|
0.01
|
|
Loss on divestiture
of businesses
|
|
|
—
|
|
|
|
1.7
|
|
|
|
1.7
|
|
|
|
1.7
|
|
|
|
(0.2)
|
|
|
|
|
|
|
|
1.9
|
|
|
|
—
|
|
Unusual tax
items
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
52.5
|
|
|
|
|
|
|
|
(52.5)
|
|
|
|
(0.11)
|
|
Rounding
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
|
—
|
|
|
|
0.01
|
|
Adjusted
|
|
$
|
2,179.0
|
|
|
$
|
748.7
|
|
|
$
|
1,258.8
|
|
|
$
|
932.9
|
|
|
$
|
229.5
|
|
|
|
23.4
|
%
|
|
$
|
747.7
|
|
|
$
|
1.53
|
|
% of Net
Sales
|
|
|
28.1
|
%
|
|
|
9.6
|
%
|
|
|
16.2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year-over-year
% of net sales change - reported
|
|
|
(44)
|
bps
|
|
|
(154)
|
bps
|
|
|
109
|
bps
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year-over-year
% of net sales change - adjusted
|
|
|
(96)
|
bps
|
|
|
(54)
|
bps
|
|
|
(4)
|
bps
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year-over-year
change - reported
|
|
|
10.4
|
%
|
|
|
1.1
|
%
|
|
|
21.9
|
%
|
|
|
15.1
|
%
|
|
|
(3.8)
|
%
|
|
|
|
|
|
|
15.7
|
%
|
|
|
2.3
|
%
|
Year-over-year
change - adjusted
|
|
|
8.4
|
%
|
|
|
6.2
|
%
|
|
|
11.8
|
%
|
|
|
3.0
|
%
|
|
|
(3.0)
|
%
|
|
|
|
|
|
|
3.9
|
%
|
|
|
(7.8)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Q3 FY19
YTD
|
|
Gross
profit
|
|
|
Selling,
general
and
administrative
expenses
|
|
|
Operating
profit 1
|
|
|
Income from
continuing
operations before
income taxes and
equity method
investment earnings
|
|
|
Income
tax
expense
|
|
|
Income
tax
rate
|
|
|
Net income
attributable to
Conagra
Brands, Inc.
|
|
|
Diluted EPS
from
income
from continuing
operations
attributable
to Conagra
Brands, Inc common
stockholders
|
|
Reported
|
|
$
|
1,945.0
|
|
|
$
|
1,078.7
|
|
|
$
|
866.3
|
|
|
$
|
635.5
|
|
|
$
|
147.0
|
|
|
|
20.9
|
%
|
|
$
|
551.8
|
|
|
$
|
1.28
|
|
% of Net
Sales
|
|
|
28.1
|
%
|
|
|
15.6
|
%
|
|
|
12.5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring
plans
|
|
|
9.8
|
|
|
|
140.7
|
|
|
|
150.5
|
|
|
|
149.9
|
|
|
|
34.2
|
|
|
|
|
|
|
|
115.7
|
|
|
|
0.27
|
|
Acquisitions and
divestitures
|
|
|
—
|
|
|
|
103.9
|
|
|
|
103.9
|
|
|
|
115.8
|
|
|
|
22.9
|
|
|
|
|
|
|
|
92.9
|
|
|
|
0.21
|
|
Integration
costs
|
|
|
—
|
|
|
|
8.9
|
|
|
|
8.9
|
|
|
|
8.9
|
|
|
|
2.3
|
|
|
|
|
|
|
|
6.6
|
|
|
|
0.02
|
|
Corporate hedging
derivative losses (gains)
|
|
|
3.8
|
|
|
|
—
|
|
|
|
3.8
|
|
|
|
3.8
|
|
|
|
0.9
|
|
|
|
|
|
|
|
2.9
|
|
|
|
0.01
|
|
Advertising and
promotion expenses 2
|
|
|
—
|
|
|
|
179.5
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
|
—
|
|
|
|
—
|
|
Inventory fair value
mark-up rollout
|
|
|
51.3
|
|
|
|
—
|
|
|
|
51.3
|
|
|
|
51.3
|
|
|
|
13.1
|
|
|
|
|
|
|
|
38.2
|
|
|
|
0.09
|
|
Novation of a legacy
guarantee
|
|
|
—
|
|
|
|
(27.3)
|
|
|
|
(27.3)
|
|
|
|
(27.3)
|
|
|
|
—
|
|
|
|
|
|
|
|
(27.3)
|
|
|
|
(0.06)
|
|
Fair value adjustment
of cash settleable equity awards issued in connection with Pinnacle
acquisition
|
|
|
—
|
|
|
|
(18.6)
|
|
|
|
(18.6)
|
|
|
|
(18.6)
|
|
|
|
(1.1)
|
|
|
|
|
|
|
|
(17.5)
|
|
|
|
(0.04)
|
|
Gain on sale of Del
Monte business
|
|
|
—
|
|
|
|
(13.2)
|
|
|
|
(13.2)
|
|
|
|
(13.2)
|
|
|
|
(3.6)
|
|
|
|
|
|
|
|
(9.6)
|
|
|
|
(0.02)
|
|
Gain on Ardent JV
asset sale
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(3.5)
|
|
|
|
|
|
|
|
(11.6)
|
|
|
|
(0.03)
|
|
Wesson valuation
allowance adjustment
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
24.3
|
|
|
|
|
|
|
|
(24.3)
|
|
|
|
(0.06)
|
|
Unusual tax
items
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
0.1
|
|
|
|
|
|
|
|
(0.1)
|
|
|
|
—
|
|
Loss from
discontinued operations, net of noncontrolling interests
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
|
1.9
|
|
|
|
—
|
|
Rounding
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
|
—
|
|
|
|
(0.01)
|
|
Adjusted
|
|
$
|
2,009.9
|
|
|
$
|
704.8
|
|
|
$
|
1,125.6
|
|
|
$
|
906.1
|
|
|
$
|
236.6
|
|
|
|
24.7
|
%
|
|
$
|
719.6
|
|
|
$
|
1.66
|
|
% of Net
Sales
|
|
|
29.0
|
%
|
|
|
10.2
|
%
|
|
|
16.3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1
Operating profit is derived from taking Income from continuing
operations before income taxes and equity method investment
earnings, adding back Interest expense, net and removing Pension
and postretirement non-service income.
|
2 Advertising and promotion expense
(A&P) has been removed from adjusted selling, general and
administrative expense because this metric is used in reporting to
management, and management believes this adjusted measure provides
useful supplemental information to assess the Company's operating
performance. Please note that A&P is not removed from
adjusted profit measures.
|
Conagra Brands,
Inc.
|
Reconciliation of
Non-GAAP Financial Measures to Reported Financial
Measures
|
(in
millions)
|
|
|
|
Q3 FY20
YTD
|
|
|
Q3 FY19
YTD
|
|
|
%
Change
|
|
Interest expense,
net
|
|
$
|
361.8
|
|
|
$
|
260.5
|
|
|
|
38.9
|
%
|
Acquisitions and
divestitures
|
|
|
—
|
|
|
|
(11.9)
|
|
|
|
|
|
Adjusted interest
expense, net
|
|
$
|
361.8
|
|
|
$
|
248.6
|
|
|
|
45.6
|
%
|
|
|
|
|
Q3
FY20
|
|
|
Q3
FY19
|
|
|
%
Change
|
|
Equity method
investment earnings
|
|
$
|
10.4
|
|
|
$
|
12.7
|
|
|
|
(17.3)
|
%
|
Adjustment to gain on
Ardent JV asset sale
|
|
|
0.6
|
|
|
|
—
|
|
|
|
|
|
Adjusted equity
method investment earnings
|
|
$
|
11.0
|
|
|
$
|
12.7
|
|
|
|
(12.5)
|
%
|
|
|
|
|
Q3 FY20
YTD
|
|
|
Q3 FY19
YTD
|
|
|
%
Change
|
|
Equity method
investment earnings
|
|
$
|
50.3
|
|
|
$
|
66.6
|
|
|
|
(24.4)
|
%
|
Gain on Ardent JV
asset sale
|
|
|
(4.2)
|
|
|
|
(15.1)
|
|
|
|
|
|
Adjusted equity
method investment earnings
|
|
$
|
46.1
|
|
|
$
|
51.5
|
|
|
|
(10.4)
|
%
|
|
|
|
|
Q3
FY20
|
|
|
Q3
FY19
|
|
|
%
Change
|
|
Pension and
postretirement non-service income
|
|
$
|
(16.4)
|
|
|
$
|
(9.8)
|
|
|
|
68.0
|
%
|
Pension settlement
and valuation adjustment
|
|
|
1.9
|
|
|
|
—
|
|
|
|
|
|
Adjusted pension
and postretirement non-service income
|
|
$
|
(14.5)
|
|
|
$
|
(9.8)
|
|
|
|
48.2
|
%
|
|
|
|
|
Q3 FY20
YTD
|
|
|
Q3 FY19
YTD
|
|
|
%
Change
|
|
Pension and
postretirement non-service income
|
|
$
|
(37.2)
|
|
|
$
|
(29.7)
|
|
|
|
25.4
|
%
|
Restructuring
plans
|
|
|
(0.6)
|
|
|
|
0.6
|
|
|
|
|
|
Pension settlement
and valuation adjustment
|
|
|
1.9
|
|
|
|
—
|
|
|
|
|
|
Adjusted pension
and postretirement non-service income
|
|
$
|
(35.9)
|
|
|
$
|
(29.1)
|
|
|
|
23.3
|
%
|
Conagra Brands,
Inc.
|
Reconciliation of
Non-GAAP Financial Measures to Reported Financial
Measures
|
(in
millions)
|
|
|
|
February 23,
2020
|
|
|
February 24,
2019
|
|
Net cash flows from
operating activities - continuing operations
|
|
$
|
906.5
|
|
|
$
|
745.1
|
|
Additions to
property, plant and equipment
|
|
|
(265.3)
|
|
|
|
(236.1)
|
|
Free cash
flow
|
|
$
|
641.2
|
|
|
$
|
509.0
|
|
|
|
Q2
FY19
|
|
|
Q3
FY19
|
|
|
Q4
FY19
|
|
|
Q1
FY20
|
|
Q2
FY20
|
|
Q3
FY20
|
|
Notes
payable
|
|
$
|
0.9
|
|
|
$
|
—
|
|
|
$
|
1.0
|
|
|
$
|
56.0
|
|
$
|
0.5
|
|
$
|
0.8
|
|
Current installments
of long-term debt
|
|
|
17.2
|
|
|
|
19.9
|
|
|
|
20.6
|
|
|
|
150.1
|
|
|
1,173.8
|
|
|
923.8
|
|
Senior long-term
debt, excluding current installments
|
|
|
11,349.5
|
|
|
|
10,911.8
|
|
|
|
10,459.8
|
|
|
|
10,127.5
|
|
|
9,100.0
|
|
|
8,897.8
|
|
Subordinated
debt
|
|
|
195.9
|
|
|
|
195.9
|
|
|
|
195.9
|
|
|
|
195.9
|
|
|
195.9
|
|
|
195.9
|
|
Total
Debt
|
|
$
|
11,563.5
|
|
|
$
|
11,127.6
|
|
|
$
|
10,677.3
|
|
|
$
|
10,529.5
|
|
$
|
10,470.2
|
|
$
|
10,018.3
|
|
Less: Cash
|
|
|
442.3
|
|
|
|
282.2
|
|
|
|
236.6
|
|
|
|
64.7
|
|
|
192.0
|
|
|
99.0
|
|
Net
Debt
|
|
$
|
11,121.2
|
|
|
$
|
10,845.4
|
|
|
$
|
10,440.7
|
|
|
$
|
10,464.8
|
|
$
|
10,278.2
|
|
$
|
9,919.3
|
|
|
|
Q3 FY20
LTM3
|
|
Net
Debt
|
|
$
|
9,919.3
|
|
|
|
|
|
|
Net income
attributable to Conagra Brands, Inc.
|
|
$
|
765.2
|
|
Add
Back: Income tax expense
|
|
|
213.3
|
|
Income tax expense
attributable to noncontrolling interests
|
|
|
0.5
|
|
Interest expense,
net
|
|
|
492.7
|
|
Depreciation
|
|
|
332.9
|
|
Amortization
|
|
|
60.0
|
|
Earnings before
interest, taxes, depreciation, and amortization
(EBITDA)
|
|
$
|
1,864.6
|
|
Restructuring plans
1
|
|
|
119.9
|
|
Acquisitions and
divestitures
|
|
|
5.9
|
|
Corporate hedging
losses
|
|
|
7.2
|
|
Pension settlement
and valuation adjustment
|
|
|
2.4
|
|
Impairment of
businesses held for sale
|
|
|
59.0
|
|
Inventory fair value
mark-up rollout
|
|
|
1.7
|
|
Gain on divestiture
of businesses
|
|
|
(54.5)
|
|
Fair value adjustment
of cash settleable equity awards issued in connection with Pinnacle
acquisition
|
|
|
3.5
|
|
Legal
matters
|
|
|
(40.6)
|
|
Environmental
matters
|
|
|
6.6
|
|
Contract settlement
gain
|
|
|
(11.9)
|
|
Intangible impairment
charges 2
|
|
|
105.8
|
|
Gain on Ardent JV
asset sale
|
|
|
(4.2)
|
|
Adjusted
EBITDA
|
|
$
|
2,065.4
|
|
|
|
|
|
|
Net Debt to
Adjusted LTM EBITDA
|
|
|
4.8
|
|
|
1 Excludes
comparability items related to depreciation.
|
2 Excludes
comparability items attributable to noncontrolling
interests.
|
3 Last
twelve months
|
Conagra Brands,
Inc.
|
Reconciliation of
Non-GAAP Financial Measures to Reported Financial
Measures
|
(in
millions)
|
|
|
|
Q3
FY20
|
|
|
Q3
FY19
|
|
|
%
Change
|
|
Net income
attributable to Conagra Brands, Inc.
|
|
$
|
204.4
|
|
|
$
|
242.0
|
|
|
|
(15.6)
|
%
|
Add
Back: Income tax expense
|
|
|
68.9
|
|
|
|
67.2
|
|
|
|
|
|
Income tax expense
attributable to noncontrolling interests
|
|
|
(0.2)
|
|
|
|
(0.2)
|
|
|
|
|
|
Interest expense,
net
|
|
|
117.7
|
|
|
|
130.9
|
|
|
|
|
|
Depreciation
|
|
|
84.2
|
|
|
|
77.4
|
|
|
|
|
|
Amortization
|
|
|
14.9
|
|
|
|
14.9
|
|
|
|
|
|
Earnings before
interest, taxes, depreciation, and amortization
|
|
$
|
489.9
|
|
|
$
|
532.2
|
|
|
|
(7.9)
|
%
|
Restructuring plans
1
|
|
|
21.9
|
|
|
|
38.6
|
|
|
|
|
|
Acquisitions and
divestitures
|
|
|
0.6
|
|
|
|
2.4
|
|
|
|
|
|
Corporate hedging
losses (gains)
|
|
|
3.8
|
|
|
|
0.2
|
|
|
|
|
|
Pension settlement
and valuation adjustment
|
|
|
(1.9)
|
|
|
|
—
|
|
|
|
|
|
Inventory fair value
mark-up rollout
|
|
|
—
|
|
|
|
26.9
|
|
|
|
|
|
Loss on divestiture
of businesses
|
|
|
0.2
|
|
|
|
—
|
|
|
|
|
|
Novation of a legacy
guarantee
|
|
|
—
|
|
|
|
(27.3)
|
|
|
|
|
|
Fair value adjustment
of cash settleable equity awards issued in connection with Pinnacle
acquisition
|
|
|
—
|
|
|
|
(18.6)
|
|
|
|
|
|
Adjustment to
contract settlement gain
|
|
|
0.1
|
|
|
|
—
|
|
|
|
|
|
Adjustment to gain on
Ardent JV asset sale
|
|
|
0.6
|
|
|
|
—
|
|
|
|
|
|
Adjusted Earnings
before interest, taxes, depreciation, and
amortization
|
|
$
|
515.2
|
|
|
$
|
554.4
|
|
|
|
(7.1)
|
%
|
|
1 Excludes
comparability items related to depreciation.
|
|
|
Q3 FY20
YTD
|
|
|
Q3 FY19
YTD
|
|
|
%
Change
|
|
Net income
attributable to Conagra Brands, Inc.
|
|
$
|
638.7
|
|
|
$
|
551.8
|
|
|
|
15.7
|
%
|
Less:
Loss from discontinued operations, net of tax
|
|
|
—
|
|
|
|
(1.9)
|
|
|
|
|
|
Add Back:
Income tax expense
|
|
|
141.5
|
|
|
|
147.0
|
|
|
|
|
|
Income tax expense
attributable to noncontrolling interests
|
|
|
(0.3)
|
|
|
|
(0.9)
|
|
|
|
|
|
Interest expense,
net
|
|
|
361.8
|
|
|
|
260.5
|
|
|
|
|
|
Depreciation
|
|
|
247.6
|
|
|
|
198.6
|
|
|
|
|
|
Amortization
|
|
|
44.9
|
|
|
|
34.0
|
|
|
|
|
|
Earnings before
interest, taxes, depreciation, and amortization
|
|
$
|
1,434.2
|
|
|
$
|
1,192.9
|
|
|
|
20.2
|
%
|
Restructuring plans
1
|
|
|
92.9
|
|
|
|
144.2
|
|
|
|
|
|
Acquisitions and
divestitures 2
|
|
|
3.6
|
|
|
|
103.9
|
|
|
|
|
|
Integration
costs
|
|
|
—
|
|
|
|
8.9
|
|
|
|
|
|
Corporate hedging
losses (gains)
|
|
|
9.2
|
|
|
|
3.8
|
|
|
|
|
|
Pension settlement
and valuation adjustment
|
|
|
(1.9)
|
|
|
|
—
|
|
|
|
|
|
Impairment of
businesses held for sale
|
|
|
59.0
|
|
|
|
—
|
|
|
|
|
|
Inventory fair value
mark-up rollout
|
|
|
—
|
|
|
|
51.3
|
|
|
|
|
|
Loss (gain) on
divestiture of businesses
|
|
|
1.7
|
|
|
|
(13.2)
|
|
|
|
|
|
Novation of a legacy
guarantee
|
|
|
—
|
|
|
|
(27.3)
|
|
|
|
|
|
Fair value adjustment
of cash settleable equity awards issued in connection with Pinnacle
acquisition
|
|
|
—
|
|
|
|
(18.6)
|
|
|
|
|
|
Legal
matters
|
|
|
(1.5)
|
|
|
|
—
|
|
|
|
|
|
Environmental
matters
|
|
|
6.6
|
|
|
|
—
|
|
|
|
|
|
Contract settlement
gain
|
|
|
(11.9)
|
|
|
|
—
|
|
|
|
|
|
Intangible impairment
charges
|
|
|
19.3
|
|
|
|
—
|
|
|
|
|
|
Gain on Ardent JV
asset sale
|
|
|
(4.2)
|
|
|
|
(15.1)
|
|
|
|
|
|
Adjusted Earnings
before interest, taxes, depreciation, and
amortization
|
|
$
|
1,607.0
|
|
|
$
|
1,430.8
|
|
|
|
12.3
|
%
|
|
1 Excludes
comparability items related to depreciation.
|
2 Excludes
comparability items related to interest expense.
|
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SOURCE Conagra Brands, Inc.