CHICAGO, June 29, 2017 /PRNewswire/ -- Today Conagra
Brands, Inc. (NYSE: CAG) reported results for the fourth quarter
and full fiscal year 2017, which ended on May 28, 2017.
Highlights
(all comparisons are against the prior year fiscal period,
unless otherwise noted)
- For the full fiscal year, diluted earnings per share (EPS) from
continuing operations grew from $0.29
to $1.25, with the fourth quarter
improving from $(0.27) to
$0.36; adjusted1 diluted
EPS from continuing operations grew 33.8% from $1.30 to $1.74 in
fiscal 2017, with strong growth in the fourth quarter of 15.6% to
$0.37.
- For the full fiscal year, net sales decreased 9.7%; fourth
quarter net sales decreased 9.3%. Net sales excluding the
impacts of divestitures and foreign exchange decreased 5.0% for the
full fiscal year. The fourth quarter showed continued
sequential improvement with a decrease of 3.6%.
- For the full fiscal year, gross margin2 expanded 190
basis points, and adjusted gross margin expanded 180 basis
points.
- In the fourth quarter, the Company reached its fiscal 2017
target of repurchasing $1 billion of
common stock. The Board has authorized an additional $1 billion of share repurchases.
- In the fourth quarter, the Company continued to reshape its
portfolio through disciplined M&A, completing the acquisition
of Duke's meat snacks and BIGS seeds brands and announcing a
definitive agreement to divest the Wesson oil brand.
CEO Perspective
Sean Connolly, president and
chief executive officer of Conagra Brands, commented, "Fiscal 2017
marked our second year of tremendous progress in reshaping our
company for success. The aggressive actions we have taken to
upgrade the quality of our revenue base, while focusing and
modernizing our portfolio, have enabled us to improve our margins
and jump-start innovation. Guided by our portfolio management
principles outlined at our investor day, we are producing solid
results. We are confident in our ability to continue to build
on this momentum and drive long-term shareholder value."
- Adjusted financial measures, including net sales excluding the
impacts of divestitures and foreign exchange, and are non-GAAP
financial measures. Please see the end of this release for
reconciliations to the most directly comparable GAAP financial
measures.
- Gross margin is defined as net sales less cost of goods
sold.
Total Company Fiscal 2017 Results
For the full fiscal year, net sales decreased 9.7%. Net
sales excluding the impacts of divestitures and foreign exchange
decreased 5.0%, primarily as a result of volume declines associated
with the Company's actions to build a higher quality revenue
base.
For the full fiscal year, gross margin increased 190 basis
points from 28.0% to 29.9%. Adjusted gross margin increased
180 basis points to 30.2%. The Company estimates that its
fiscal 2017 adjusted gross margin was reduced by approximately 20
basis points by the Spicetec Flavors & Seasonings and JM Swank
businesses, which were divested in the first quarter of fiscal
2017. Gross margin improvement was driven primarily by supply
chain realized productivity, the impact of divesting lower margin
businesses, and improved price/mix. These benefits more than
offset input cost inflation and negative effects of foreign
exchange.
For the full fiscal year, diluted EPS from continuing operations
increased from $0.29 to $1.25, and adjusted diluted EPS from continuing
operations increased 33.8% from $1.30
to $1.74. The growth in adjusted
diluted EPS from continuing operations primarily reflects lower
selling, general, and administrative (SG&A) expenses and lower
interest expense as a result of debt reduction. These benefits were
partially offset by planned volume declines, and the impact of the
divestitures of the Spicetec Flavors & Seasonings and JM Swank
businesses in the first quarter of fiscal year 2017.
Total Company Fourth Quarter Results
In the fourth quarter, net sales decreased 9.3%. Net sales
excluding the impacts of divestitures and foreign exchange
decreased 3.6%, primarily as a result of volume declines associated
with the Company's actions to build a higher quality revenue
base. The Company estimates that the acquisition of the Duke's
meat snacks and BIGS seeds brands added approximately 40 basis
points to the quarter's net sales growth rate.
In the fourth quarter, gross margin increased 10 basis points to
28.4%. Adjusted gross margin increased 130 basis points to
29.0%. The increases were driven primarily by supply chain
realized productivity, improved pricing, and the impact of
divesting lower margin businesses. These benefits more than
offset unfavorable brand margin mix in the Grocery & Snacks and
Refrigerated & Frozen segments as well as the impact of input
cost inflation.
In the fourth quarter, diluted EPS from continuing operations
increased from a loss of $0.27 to
earnings of $0.36, and adjusted
diluted EPS from continuing operations increased 15.6% from
$0.32 to $0.37. The growth primarily reflects lower
SG&A expenses and lower interest expense. These benefits were
partially offset by volume declines and the impact of the
divestitures of the Spicetec Flavors & Seasonings and JM Swank
businesses in the first quarter of fiscal 2017.
Grocery & Snacks Segment Fourth Quarter Results
In the fourth quarter, net sales for the Grocery & Snacks
segment decreased 3% to $749
million. Volume declined 2% from a reduction in
promotional intensity and the planned discontinuation of certain
lower-performing products. Price/mix decreased 1% as the
continued progress in pricing and trade productivity was more than
offset by unfavorable mix. The Company estimates that the
acquisition of the Duke's meat snacks and BIGS seeds brands added
approximately 100 basis points to the segment's fourth quarter net
sales growth rate.
Operating profit for the segment decreased 56%. The decrease was
largely driven by intangible impairment charges of $67 million pre-tax related to the Chef Boyardee
brand and impairment charges and other costs of $31 million pre-tax related to a Wesson oil
production facility that is not expected to be included in the
Wesson divestiture. Adjusted operating profit decreased 5%,
driven primarily by increased advertising and promotion (A&P)
investments. Favorable SG&A and net pricing offset the
negative impact of volume declines and unfavorable brand margin
mix. The unfavorable brand margin mix was primarily driven by
recent growth-oriented acquisitions, where margins are expected to
rise over time.
Refrigerated & Frozen Segment Fourth Quarter
Results
In the fourth quarter, net sales for the Refrigerated &
Frozen segment decreased 5% to $640
million. Volume declined 5%, reflecting the Company's
continued actions to upgrade the quality of its revenue base by
optimizing pricing and improving trade promotion productivity as
well as the planned discontinuation of certain lower-performing
products. Price/mix was flat compared to the prior-year period as
improvements in pricing and trade promotion practices across much
of the portfolio were completely offset by reduced prices in select
deflationary categories. Net sales growth was also negatively
affected by a transitory increase in Egg Beaters' volume in the
prior-year period associated with the avian flu outbreak. The
Company's egg supply was unaffected by last year's avian flu
outbreak, resulting in incremental sales for the brand in the
prior-year period.
Operating profit for the segment increased 8% in the quarter,
and adjusted operating profit increased 2%. The benefits of
SG&A cost savings and supply chain productivity more than
offset lower net sales and unfavorable brand margin mix, primarily
related to the Egg Beaters brand. The Company estimates that
the avian flu-related benefits in the prior-year period reduced the
segment's operating profit growth, on a reported and adjusted
basis, by approximately 3 percentage points.
International Segment Fourth Quarter Results
In the fourth quarter, net sales for the International segment
decreased 1% to $205 million. A
3% increase in price/mix was more than offset by a 3% unfavorable
impact of foreign exchange and 1% decrease in volume.
The segment reported an operating loss of $11 million from an operating profit of
$14 million in the year-ago period,
reflecting pre-tax goodwill and intangible impairment charges of
$28 million related to the Canadian
and Mexican businesses. Adjusted operating profit increased 33%
behind higher price/mix and lower SG&A expenses.
Foodservice Segment Fourth Quarter Results
In the fourth quarter, net sales for the Foodservice segment
decreased 5% to $267 million. Volume
decreased 17% and price/mix increased 12%, primarily reflecting the
impact of exiting a non-core business in the prior-year period.
Operating profit for the segment increased 2%, reflecting
general stability in the business and SG&A cost
savings.
Corporate Expenses Fourth Quarter Results
In the fourth quarter, corporate expenses decreased from
$412 million to $59 million, primarily driven by a $349 million expense related to the year-end
re-measurement of pension amounts in the year-ago
period. Adjusted corporate expenses decreased 10% to
$54 million, primarily reflecting
planned benefits from the Company's cost savings efforts.
Other Items
A&P expense increased 12% to $76
million in the quarter as the Company invested to drive
brand saliency in connection with innovation launches.
In the fourth quarter, equity method investment earnings
increased 24% to $19 million as a
result of improved performance by the Ardent Mills joint
venture.
Net interest expense decreased 38% to $38
million, driven by significant debt reduction over the past
several quarters.
Capital Allocation
In the fourth quarter, the Company paid a quarterly dividend of
$0.20 per share.
In the fourth quarter, the Company made a $150 million pension contribution to increase the
funded status of its pension plans.
The Company repurchased approximately 10 million shares of its
common stock for $405 million during
the fourth quarter. During the full fiscal year, the Company
repurchased approximately 25 million shares for approximately
$1 billion.
The Company also announced today that its Board of Directors has
approved an additional $1 billion
share repurchase authorization. The Company's total share
repurchase authorization as of today is approximately $1.38 billion. The authorization has no
expiration date. Shares are expected to be repurchased
periodically, depending on market conditions and other factors,
through open-market or privately negotiated transactions. This
authorization is part of a broader capital allocation strategy that
balances debt reduction, a top-tier dividend, share repurchases,
and strategic growth investments.
Long-Term Algorithm and Fiscal 2018 Outlook
The Company is reiterating its three-year fiscal 2020 financial
algorithm, which uses fiscal 2017 as the base year, as summarized
below:
- Organic net sales compound annual growth rate (CAGR) in the
range of 1% to 2%. Organic net sales growth is defined as net sales
growth excluding the impacts of foreign exchange as well as
acquisitions and divestitures until the anniversary date of the
transactions.
- Adjusted gross margin of approximately 32% for the full fiscal
year 2020
- Adjusted operating margin of approximately 16.5% for the full
fiscal year 2020
- Adjusted EPS CAGR of approximately 10%
- Annual dividend payout ratio of between 45% and 50%
The Company is providing fiscal 2018 guidance as summarized
below:
- Reported net sales growth in the range of (2)% to flat
- Organic net sales growth in the range of (2)% to flat
- Adjusted operating margin in the range of 15.9% to 16.3%
- Effective tax rate in the range of 32.5% to 33.5%
- Adjusted diluted EPS from continuing operations in the range of
$1.84 to $1.89
- The Company expects to repurchase approximately $1.1 billion of shares of its common stock in the
fiscal year, subject to market and other conditions
The fiscal 2018 Outlook includes the expected results of the
Wesson oil brand for the full fiscal year.
The inability to predict the amount and timing of the impacts of
foreign exchange, acquisitions, and divestitures and other items
impacting comparability makes a detailed reconciliation of these
forward-looking non-GAAP financial measures
impracticable. Please see the end of this release for more
information.
Items Affecting Fourth Quarter Fiscal 2017
Comparability
Included in the $0.36 diluted
EPS from continuing operations for the fourth quarter of fiscal
2017 (EPS amounts rounded and after tax)
- Approximately $0.02 per diluted
share of net expense, or $16.0
million pre-tax ($10.5 million
after tax), related to restructuring plans ($5.5 million in cost of goods sold and
$10.5 million in SG&A)
- Approximately $0.05 per diluted
share of net expense, or $31.4
million pre-tax ($19.6 million
after tax), related to the planned divestiture of the Wesson oil
brand, most of which is related to impairment charges on the Wesson
oil production facility ($0.5 million
in cost of goods sold and $30.9
million in SG&A)
- Approximately $0.16 per diluted
share of net expense, or $95.5
million pre-tax ($66.7 million
after tax), related to goodwill and intangible impairment charges
(all SG&A)
- Approximately $0.01 per diluted
share of net benefit, or $5.7 million
pre-tax ($3.7 million after tax),
related to a historical lawsuit (all SG&A)
- Approximately $0.01 per diluted
share of net expense, or $5.5 million
pre-tax ($3.4 million after tax),
related to hedging derivative losses (all SG&A)
- Approximately $0.21 per diluted
share of net tax benefit, or $91.3
million, related to a tax adjustment of valuation allowance
associated with the planned divestiture of the Wesson oil brand
(all Tax)
Included in the $(0.27) diluted
EPS from continuing operations for the fourth quarter of fiscal
2016 (EPS amounts rounded and after tax)
- Approximately $0.04 per diluted
share of net expense, or $22.3
million pre-tax ($15.8 million
after tax), related to restructuring plans ($3.6 million in cost of goods sold, $18.7 million in SG&A)
- Approximately $0.07 per diluted
share of net expense, or $50.1
million pre-tax ($31.6 million
after tax), related to goodwill and intangible impairment charges
(all SG&A)
- Approximately $0.49 per diluted
share of net expense, or $348.5
million pre-tax ($215.1 after
tax), related to the year-end re-measurement of pension amounts
(all SG&A)
- Approximately $0.01 per diluted
share of net expense, or $5.0 million
pre-tax ($3.1 million after tax),
associated with a historical lawsuit (all SG&A)
- Approximately $0.02 per diluted
share of net benefit, or $14.4
million pre-tax ($8.9 million
after tax), related to hedging derivative (all SG&A)
- Approximately $0.01 per diluted
share of net tax expense, or $2.7
million, related to adjustments in prior-year tax credits
(all Tax)
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 conagrabrands.com/investor-relations
under Events & Presentations. The conference call may be
accessed by dialing 1-877-883-0383 for participants in the
continental U.S. and 1-412-902-6506 for all other participants and
using passcode 5665391. 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 for one year beginning
Thursday, June 29, 2017, at
12:30 p.m. ET on
conagrabrands.com/investor-relations under Events &
Presentations.
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 Marie Callender's®, Reddi-wip®,
Hunt's®, Healthy Choice®, Slim Jim® and Orville Redenbacher's®, as well as emerging
brands, including Alexia®, Blake's®, Frontera® and Duke's®, offer
choices for every occasion. With an ongoing commitment to corporate
citizenship, Conagra Brands has been named to the Dow Jones
Sustainability™ North America Index for six consecutive years. 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. We undertake
no responsibility for updating these statements. 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 and uncertainties
include, among other things: our ability to achieve the intended
benefits of acquisitions and divestitures, including the recent
spin-off of our Lamb Weston business and our divestiture of the
Wesson oil brand; general economic and industry conditions; our
ability to successfully execute our long-term value creation
strategy; our ability to access capital; our ability to execute our
operating and restructuring plans and achieve our targeted
operating efficiencies from cost-saving initiatives and to benefit
from trade optimization programs; the effectiveness of our hedging
activities, and our ability to respond to volatility in
commodities; the competitive environment and related market
conditions; our ability to respond to changing consumer preferences
and the success of our innovation and marketing investments; the
ultimate impact of any product recalls and litigation, including
litigation related to the lead paint and pigment matters; actions
of governments and regulatory factors affecting our businesses; the
availability and prices of raw materials, including any negative
effects caused by inflation or weather conditions; risks and
uncertainties associated with intangible assets, including any
future goodwill or intangible assets impairment charges; the costs,
disruption, and diversion of management's attention associated with
campaigns commenced by activist investors; and other risks
described in our reports filed from time to time with the
Securities and Exchange Commission. We caution readers not to place
undue reliance on any forward-looking statements included in this
document, which speak only as of the date of this document.
Note on Non-GAAP Financial Measures
This document includes certain non-GAAP financial measures,
including adjusted diluted earnings per share from continuing
operations, net sales excluding the impacts of divestitures and
foreign exchange, organic net sales, adjusted operating profit for
certain segments, adjusted corporate expenses, adjusted gross
margin, and adjusted operating margin. 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 gross margin, adjusted operating
margin, and adjusted diluted EPS from continuing operations, are
forward-looking. Historically, the Company has excluded the
impact of certain items impacting comparability, such as, but not
limited to, restructuring expense, extinguishment of debt, pension
plan lump sum settlement, foreign exchange, the impact of
acquisitions and divestitures, hedging gains and losses, impairment
charges and 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.
Conagra Brands,
Inc.
Consolidated Statements of Operations
(in millions, except per share amounts)
(unaudited)
|
|
|
|
FOURTH
QUARTER
|
|
|
Thirteen weeks
ended
|
|
Thirteen weeks
ended
|
|
|
|
|
May 28,
2017
|
|
May 29,
2016
|
|
Percent
Change
|
Net sales
|
|
$
|
1,861.7
|
|
|
$
|
2,053.0
|
|
|
(9.3)
|
%
|
Costs and
expenses:
|
|
|
|
|
|
|
Cost of goods
sold
|
|
1,332.7
|
|
|
1,472.9
|
|
|
(9.5)
|
%
|
Selling, general and
administrative expenses
|
|
417.8
|
|
|
731.6
|
|
|
(42.9)
|
%
|
Interest expense,
net
|
|
37.5
|
|
|
60.1
|
|
|
(37.6)
|
%
|
Income (loss) from
continuing operations before income taxes and equity method
investment earnings
|
|
73.7
|
|
|
(211.6)
|
|
|
N/A
|
|
|
|
|
|
|
|
|
Income tax
expense
|
|
(60.8)
|
|
|
(79.6)
|
|
|
(23.6)
|
%
|
Equity method
investment earnings
|
|
19.1
|
|
|
15.4
|
|
|
24.0
|
%
|
Income (loss) from
continuing operations
|
|
153.6
|
|
|
(116.6)
|
|
|
N/A
|
|
Income (loss) from
discontinued operations, net of tax
|
|
(1.7)
|
|
|
237.5
|
|
|
N/A
|
|
Net income
|
|
$
|
151.9
|
|
|
$
|
120.9
|
|
|
25.6
|
%
|
Less: Net income
attributable to noncontrolling interests
|
|
0.6
|
|
|
3.3
|
|
|
(81.8)
|
%
|
Net income
attributable to Conagra Brands, Inc.
|
|
$
|
151.3
|
|
|
$
|
117.6
|
|
|
28.7
|
%
|
|
|
|
|
|
|
|
Earnings per share -
basic
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from
continuing operations
|
|
$
|
0.36
|
|
|
$
|
(0.27)
|
|
|
N/A
|
|
Income from
discontinued operations
|
|
—
|
|
|
0.54
|
|
|
(100.0)
|
%
|
Net income
attributable to Conagra Brands, Inc.
|
|
$
|
0.36
|
|
|
$
|
0.27
|
|
|
33.3
|
%
|
|
|
|
|
|
|
|
Weighted average
shares outstanding
|
|
420.3
|
|
|
437.8
|
|
|
(4.0)
|
%
|
|
|
|
|
|
|
|
Earnings per share -
diluted
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from
continuing operations
|
|
$
|
0.36
|
|
|
$
|
(0.27)
|
|
|
N/A
|
|
Income from
discontinued operations
|
|
—
|
|
|
0.54
|
|
|
(100.0)
|
%
|
Net income
attributable to Conagra Brands, Inc.
|
|
$
|
0.36
|
|
|
$
|
0.27
|
|
|
33.3
|
%
|
|
|
|
|
|
|
|
Weighted average
share and share equivalents outstanding
|
|
424.9
|
|
|
437.8
|
|
|
(3.0)
|
%
|
Conagra Brands,
Inc.
Consolidated Statements of Operations
(in millions, except per share amounts)
(unaudited)
|
|
|
FOURTH
QUARTER
|
|
|
Fifty-two weeks
ended
|
|
Fifty-two weeks
ended
|
|
|
|
|
May 28,
2017
|
|
May 29,
2016
|
|
Percent
Change
|
Net sales
|
|
$
|
7,826.9
|
|
|
$
|
8,664.1
|
|
|
(9.7)
|
%
|
Costs and
expenses:
|
|
|
|
|
|
|
Cost of goods
sold
|
|
5,484.8
|
|
|
6,234.9
|
|
|
(12.0)
|
%
|
Selling, general and
administrative expenses
|
|
1,417.1
|
|
|
2,024.6
|
|
|
(30.0)
|
%
|
Interest expense,
net
|
|
195.5
|
|
|
295.8
|
|
|
(33.9)
|
%
|
Income from
continuing operations before income taxes and equity method
investment earnings
|
|
729.5
|
|
|
108.8
|
|
|
570.5
|
%
|
|
|
|
|
|
|
|
Income tax
expense
|
|
254.7
|
|
|
46.4
|
|
|
448.9
|
%
|
Equity method
investment earnings
|
|
71.2
|
|
|
66.1
|
|
|
7.7
|
%
|
Income from
continuing operations
|
|
546.0
|
|
|
128.5
|
|
|
324.9
|
%
|
Income (loss) from
discontinued operations, net of tax
|
|
102.0
|
|
|
(794.4)
|
|
|
N/A
|
|
Net income
(loss)
|
|
$
|
648.0
|
|
|
$
|
(665.9)
|
|
|
N/A
|
|
Less: Net income
attributable to noncontrolling interests
|
|
8.7
|
|
|
11.1
|
|
|
(21.6)
|
%
|
Net income (loss)
attributable to Conagra Brands, Inc.
|
|
$
|
639.3
|
|
|
$
|
(677.0)
|
|
|
N/A
|
|
|
|
|
|
|
|
|
Earnings (loss) per
share - basic
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from
continuing operations
|
|
$
|
1.26
|
|
|
$
|
0.29
|
|
|
334.5
|
%
|
Income (loss) from
discontinued operations
|
|
0.22
|
|
|
(1.86)
|
|
|
N/A
|
|
Net income (loss)
attributable to Conagra Brands, Inc.
|
|
$
|
1.48
|
|
|
$
|
(1.57)
|
|
|
N/A
|
|
|
|
|
|
|
|
|
Weighted average
shares outstanding
|
|
431.9
|
|
|
434.4
|
|
|
(0.6)
|
%
|
|
|
|
|
|
|
|
Earnings (loss) per
share - diluted
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from
continuing operations
|
|
$
|
1.25
|
|
|
$
|
0.29
|
|
|
331.0
|
%
|
Income (loss) from
discontinued operations
|
|
0.21
|
|
|
(1.85)
|
|
|
N/A
|
|
Net income (loss)
attributable to Conagra Brands, Inc.
|
|
$
|
1.46
|
|
|
$
|
(1.56)
|
|
|
N/A
|
|
|
|
|
|
|
|
|
Weighted average
share and share equivalents outstanding
|
|
436.0
|
|
|
438.5
|
|
|
(0.6)
|
%
|
Conagra Brands,
Inc.
Segment Operating
Results
(in
millions)
(unaudited)
|
|
|
|
FOURTH
QUARTER
|
|
|
Thirteen weeks
ended
|
|
Thirteen weeks
ended
|
|
|
|
|
May 28,
2017
|
|
May 29,
2016
|
|
Percent
Change
|
SALES
|
|
|
|
|
|
|
Grocery &
Snacks
|
|
$
|
749.4
|
|
|
$
|
772.5
|
|
|
(3.0)
|
%
|
Refrigerated &
Frozen
|
|
640.2
|
|
|
674.5
|
|
|
(5.1)
|
%
|
International
|
|
204.7
|
|
|
207.3
|
|
|
(1.3)
|
%
|
Foodservice
|
|
267.4
|
|
|
282.3
|
|
|
(5.3)
|
%
|
Commercial
|
|
—
|
|
|
116.4
|
|
|
(100.0)
|
%
|
Total
|
|
1,861.7
|
|
|
2,053.0
|
|
|
(9.3)
|
%
|
|
|
|
|
|
|
|
OPERATING
PROFIT
|
|
|
|
|
|
|
Grocery &
Snacks
|
|
$
|
50.9
|
|
|
$
|
114.3
|
|
|
(55.5)
|
%
|
Refrigerated &
Frozen
|
|
106.9
|
|
|
98.7
|
|
|
8.3
|
%
|
International
|
|
(11.1)
|
|
|
13.7
|
|
|
N/A
|
|
Foodservice
|
|
23.7
|
|
|
23.2
|
|
|
2.2
|
%
|
Commercial
|
|
—
|
|
|
10.1
|
|
|
(100.0)
|
%
|
Total operating
profit for segments
|
|
170.4
|
|
|
260.0
|
|
|
(34.5)
|
%
|
|
|
|
|
|
|
|
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
|
|
(59.2)
|
|
|
(411.5)
|
|
|
(85.6)
|
%
|
Interest expense,
net
|
|
(37.5)
|
|
|
(60.1)
|
|
|
(37.6)
|
%
|
Income (loss) from
continuing operations before income taxes and equity method
investment earnings
|
|
$
|
73.7
|
|
|
$
|
(211.6)
|
|
|
N/A
|
|
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 Brands, Inc.
Segment Operating
Results
(in
millions)
(unaudited)
|
|
|
|
|
|
|
FOURTH
QUARTER
|
|
|
Fifty-two weeks
ended
|
|
Fifty-two weeks
ended
|
|
|
|
|
May 28,
2017
|
|
May 29,
2016
|
|
Percent
Change
|
SALES
|
|
|
|
|
|
|
Grocery &
Snacks
|
|
$
|
3,208.8
|
|
|
$
|
3,377.1
|
|
|
(5.0)
|
%
|
Refrigerated &
Frozen
|
|
2,652.7
|
|
|
2,867.8
|
|
|
(7.5)
|
%
|
International
|
|
816.0
|
|
|
846.6
|
|
|
(3.6)
|
%
|
Foodservice
|
|
1,078.3
|
|
|
1,104.5
|
|
|
(2.4)
|
%
|
Commercial
|
|
71.1
|
|
|
468.1
|
|
|
(84.8)
|
%
|
Total
|
|
7,826.9
|
|
|
8,664.1
|
|
|
(9.7)
|
%
|
|
|
|
|
|
|
|
OPERATING
PROFIT
|
|
|
|
|
|
|
Grocery &
Snacks
|
|
$
|
653.7
|
|
|
$
|
592.9
|
|
|
10.3
|
%
|
Refrigerated &
Frozen
|
|
445.8
|
|
|
420.4
|
|
|
6.0
|
%
|
International
|
|
(168.9)
|
|
|
66.7
|
|
|
N/A
|
|
Foodservice
|
|
105.1
|
|
|
97.7
|
|
|
7.6
|
%
|
Commercial
|
|
202.6
|
|
|
45.4
|
|
|
346.3
|
%
|
Total operating
profit for segments
|
|
1,238.3
|
|
|
1,223.1
|
|
|
1.2
|
%
|
|
|
|
|
|
|
|
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
|
|
(313.3)
|
|
|
(818.5)
|
|
|
(61.7)
|
%
|
Interest expense,
net
|
|
(195.5)
|
|
|
(295.8)
|
|
|
(33.9)
|
%
|
Income from
continuing operations before income taxes and equity method
investment earnings
|
|
$
|
729.5
|
|
|
$
|
108.8
|
|
|
570.5
|
%
|
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.
Consolidated Balance
Sheet
(in millions)
(unaudited)
|
|
|
|
May 28,
2017
|
|
May 29,
2016
|
ASSETS
|
|
|
|
|
Current
assets
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
251.4
|
|
|
$
|
798.1
|
|
Receivables, less
allowance for doubtful accounts
|
|
|
|
|
of $3.1 and
$3.2
|
|
563.4
|
|
|
650.1
|
|
Inventories
|
|
934.2
|
|
|
1,044.1
|
|
Prepaid expenses and
other current assets
|
|
228.7
|
|
|
148.6
|
|
Current assets of
discontinued operations
|
|
—
|
|
|
779.7
|
|
Current assets held
for sale
|
|
35.5
|
|
|
156.1
|
|
Total
current assets
|
|
2,013.2
|
|
|
3,576.7
|
|
Property, plant and
equipment, net
|
|
1,664.9
|
|
|
1,697.8
|
|
Goodwill
|
|
4,298.3
|
|
|
4,318.9
|
|
Brands, trademarks
and other intangibles, net
|
|
1,232.9
|
|
|
1,223.3
|
|
Other
assets
|
|
790.6
|
|
|
905.5
|
|
Noncurrent assets of
discontinued operations
|
|
—
|
|
|
1,339.3
|
|
Noncurrent assets
held for sale
|
|
96.4
|
|
|
329.1
|
|
|
|
$
|
10,096.3
|
|
|
$
|
13,390.6
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
Current
liabilities
|
|
|
|
|
Notes
payable
|
|
$
|
28.2
|
|
|
$
|
13.9
|
|
Current installments
of long-term debt
|
|
199.0
|
|
|
559.4
|
|
Accounts
payable
|
|
773.1
|
|
|
706.7
|
|
Accrued
payroll
|
|
167.6
|
|
|
220.8
|
|
Other accrued
liabilities
|
|
552.6
|
|
|
567.7
|
|
Current liabilities
of discontinued operations
|
|
—
|
|
|
409.2
|
|
Current liabilities
held for sale
|
|
—
|
|
|
54.7
|
|
Total
current liabilities
|
|
1,720.5
|
|
|
2,532.4
|
|
Senior long-term
debt, excluding current installments
|
|
2,573.3
|
|
|
4,685.5
|
|
Subordinated
debt
|
|
195.9
|
|
|
195.9
|
|
Other noncurrent
liabilities
|
|
1,528.8
|
|
|
1,875.7
|
|
Noncurrent
liabilities of discontinued operations
|
|
—
|
|
|
304.8
|
|
Noncurrent
liabilities held for sale
|
|
—
|
|
|
1.5
|
|
Total stockholders'
equity
|
|
4,077.8
|
|
|
3,794.8
|
|
|
|
$
|
10,096.3
|
|
|
$
|
13,390.6
|
|
Conagra Brands,
Inc. and Subsidiaries Consolidated Statements of Cash Flows (in
millions)
|
|
|
For
the Fiscal Years Ended May
|
|
2017
|
|
2016
|
Cash flows from
operating activities:
|
|
|
|
Net income
(loss)
|
$
|
648.0
|
|
|
$
|
(665.9)
|
|
Income (loss) from
discontinued operations
|
102.0
|
|
|
(794.4)
|
|
Income from
continuing operations
|
546.0
|
|
|
128.5
|
|
Adjustments to
reconcile income from continuing operations to net cash flows from
operating activities:
|
|
|
|
Depreciation and
amortization
|
268.0
|
|
|
278.5
|
|
Asset impairment
charges
|
343.3
|
|
|
62.6
|
|
Gain on
divestitures
|
(197.4)
|
|
|
—
|
|
Lease cancellation
expense
|
—
|
|
|
55.6
|
|
Loss on
extinguishment of debt
|
93.3
|
|
|
23.9
|
|
Earnings of
affiliates in excess of distributions
|
(3.0)
|
|
|
(25.7)
|
|
Stock-settled
share-based payments expense
|
36.1
|
|
|
41.8
|
|
Contributions to
pension plans
|
(163.0)
|
|
|
(11.5)
|
|
Pension expense
(benefit)
|
(21.4)
|
|
|
358.1
|
|
Other
items
|
39.9
|
|
|
53.6
|
|
Change in operating
assets and liabilities excluding effects of business acquisitions
and dispositions:
|
|
|
|
Receivables
|
104.7
|
|
|
(156.8)
|
|
Inventories
|
123.3
|
|
|
66.1
|
|
Deferred income taxes
and income taxes payable, net
|
52.3
|
|
|
(264.9)
|
|
Prepaid expenses and
other current assets
|
15.0
|
|
|
10.8
|
|
Accounts
payable
|
71.0
|
|
|
(118.3)
|
|
Accrued
payroll
|
(52.4)
|
|
|
68.9
|
|
Other accrued
liabilities
|
(114.9)
|
|
|
54.3
|
|
Net cash flows from
operating activities - continuing operations
|
1,140.8
|
|
|
625.5
|
|
Net cash flows from
operating activities - discontinued operations
|
34.7
|
|
|
633.7
|
|
Net cash flows from
operating activities
|
1,175.5
|
|
|
1,259.2
|
|
Cash flows from
investing activities:
|
|
|
|
Additions to
property, plant and equipment
|
(242.1)
|
|
|
(277.5)
|
|
Sale of property,
plant and equipment
|
13.2
|
|
|
35.7
|
|
Proceeds from
divestitures
|
489.0
|
|
|
—
|
|
Purchase of business
and intangible assets
|
(325.7)
|
|
|
(10.4)
|
|
Other
items
|
—
|
|
|
0.3
|
|
Net cash flows from
investing activities - continuing operations
|
(65.6)
|
|
|
(251.9)
|
|
Net cash flows from
investing activities - discontinued operations
|
(123.7)
|
|
|
2,379.3
|
|
Net cash flows from
investing activities
|
(189.3)
|
|
|
2,127.4
|
|
Cash flows from
financing activities:
|
|
|
|
Net short-term
borrowings
|
14.3
|
|
|
9.5
|
|
Repayment of
long-term debt
|
(1,064.5)
|
|
|
(2,523.2)
|
|
Payment of intangible
asset financing arrangement
|
(14.9)
|
|
|
—
|
|
Repurchase of Conagra
Brands, Inc. common shares
|
(1,000.0)
|
|
|
—
|
|
Sale of Conagra
Brands, Inc. common shares
|
—
|
|
|
8.6
|
|
Cash dividends
paid
|
(415.0)
|
|
|
(432.5)
|
|
Exercise of stock
options and issuance of other stock awards
|
73.8
|
|
|
208.4
|
|
Other
items
|
(1.9)
|
|
|
—
|
|
Net
cash flows from financing activities - continuing
operations
|
(2,408.2)
|
|
|
(2,729.2)
|
|
Net cash flows from
financing activities - discontinued operations
|
839.1
|
|
|
(4.0)
|
|
Net cash flows from
financing activities
|
(1,569.1)
|
|
|
(2,733.2)
|
|
Effect of exchange
rate changes on cash and cash equivalents
|
(0.2)
|
|
|
(2.0)
|
|
Net change in cash
and cash equivalents
|
(583.1)
|
|
|
651.4
|
|
Add: Cash balance
included in assets held for sale and discontinued operations at
beginning of period
|
36.4
|
|
|
49.0
|
|
Less: Cash balance
included in assets held for sale and discontinued operations at end
of period
|
—
|
|
|
36.4
|
|
Cash and cash
equivalents at beginning of year
|
798.1
|
|
|
134.1
|
|
Cash and cash
equivalents at end of year
|
$
|
251.4
|
|
|
$
|
798.1
|
|
Q4 FY17 & Q4
FY16 Diluted EPS from Continuing Operations
|
|
|
|
Q4
FY17
|
|
Q4
FY16
|
|
%
Change
|
Diluted EPS from
continuing operations
|
$
|
0.36
|
|
|
$
|
(0.27)
|
|
|
N/A
|
Net expense related
to restructuring plans
|
0.02
|
|
|
0.04
|
|
|
|
Net expense related
to the planned divestiture of the Wesson oil brand, most of which
is related to impairment charges on the Wesson oil production
facility
|
0.05
|
|
|
—
|
|
|
|
Net expense related
to Goodwill & Intangible impairment charges
|
0.16
|
|
|
0.07
|
|
|
|
Net expense related
to pension valuation adjustment
|
—
|
|
|
0.49
|
|
|
|
Net expense (benefit)
related to legal matters
|
(0.01)
|
|
|
0.01
|
|
|
|
Net expense (benefit)
related to hedging
|
0.01
|
|
|
(0.02)
|
|
|
|
Net benefit related
to tax adjustment of valuation allowance
|
(0.21)
|
|
|
—
|
|
|
|
Net expense related
to unusual tax items
|
—
|
|
|
0.01
|
|
|
|
Rounding
|
(0.01)
|
|
|
(0.01)
|
|
|
|
Adjusted Diluted
EPS from continuing operations
|
$
|
0.37
|
|
|
$
|
0.32
|
|
|
15.6
|
%
|
Grocery &
Snacks Segment Operating Profit Reconciliation
|
|
(Dollars in
millions)
|
Q4
FY17
|
|
Q4
FY16
|
|
%
Change
|
Grocery &
Snacks Segment Operating Profit
|
$
|
50.9
|
|
|
$
|
114.3
|
|
|
(55.5)
|
%
|
Net expense related
to restructuring plans
|
9.9
|
|
|
3.9
|
|
|
|
Net expense related
to the planned divestiture of the Wesson oil brand, most of which
is related to impairment charges on the Wesson oil production
facility
|
31.4
|
|
|
—
|
|
|
|
Net expense related
to intangible impairment charges
|
67.1
|
|
|
50.1
|
|
|
|
Grocery &
Snacks Segment Adjusted Operating Profit
|
$
|
159.3
|
|
|
$
|
168.3
|
|
|
(5.3)
|
%
|
Refrigerated &
Frozen Segment Operating Profit Reconciliation
|
|
(Dollars in
millions)
|
Q4
FY17
|
|
Q4
FY16
|
|
%
Change
|
Refrigerated &
Frozen Segment Operating Profit
|
$
|
106.9
|
|
|
$
|
98.7
|
|
|
8.3
|
%
|
Net expense related
to restructuring plans
|
0.1
|
|
|
6.1
|
|
|
|
Refrigerated &
Frozen Segment Adjusted Operating Profit
|
$
|
107.0
|
|
|
$
|
104.8
|
|
|
2.1
|
%
|
International
Segment Operating Profit Reconciliation
|
|
(Dollars in
millions)
|
Q4
FY17
|
|
Q4
FY16
|
|
%
Change
|
International
Segment Operating Profit (Loss)
|
$
|
(11.1)
|
|
|
$
|
13.7
|
|
|
N/A
|
Net (income) expense
related to restructuring plans
|
0.6
|
|
|
(0.2)
|
|
|
|
Net expense related
to goodwill and intangible impairment charges
|
28.4
|
|
|
—
|
|
|
|
International
Segment Adjusted Operating Profit
|
$
|
17.9
|
|
|
$
|
13.5
|
|
|
32.6
|
%
|
Foodservice
Segment Operating Profit Reconciliation
|
|
(Dollars in
millions)
|
Q4
FY17
|
|
Q4
FY16
|
|
%
Change
|
Foodservice
Segment Operating Profit
|
$
|
23.7
|
|
|
$
|
23.2
|
|
|
2.2
|
%
|
Net expense related
to restructuring plans
|
—
|
|
|
—
|
|
|
|
Foodservice
Segment Adjusted Operating Profit
|
$
|
23.7
|
|
|
$
|
23.2
|
|
|
2.2
|
%
|
Commercial Segment
Operating Profit Reconciliation
|
|
(Dollars in
millions)
|
Q4
FY17
|
|
Q4
FY16
|
|
%
Change
|
Commercial Segment
Operating Profit
|
$
|
—
|
|
|
$
|
10.1
|
|
|
(100.0)
|
%
|
Net expense related
to restructuring plans
|
—
|
|
|
—
|
|
|
|
Commercial Segment
Adjusted Operating Profit
|
$
|
—
|
|
|
$
|
10.1
|
|
|
(100.0)
|
%
|
Corporate Expense
Reconciliation
|
|
(Dollars in
millions)
|
Q4
FY17
|
|
Q4
FY16
|
|
%
Change
|
Selling, general
and administrative expenses
|
$
|
417.8
|
|
|
$
|
731.6
|
|
|
(42.9)
|
%
|
Less: selling,
general and administrative expenses from reporting
segments
|
364.1
|
|
|
305.7
|
|
|
|
Plus: Corporate cost
of goods sold
|
5.5
|
|
|
(14.4)
|
|
|
|
Corporate
expenses
|
$
|
59.2
|
|
|
$
|
411.5
|
|
|
|
Net expense related
to restructuring plans
|
(5.4)
|
|
|
(12.5)
|
|
|
|
Net benefit (expense)
related to a legal matter
|
5.7
|
|
|
(5.0)
|
|
|
|
Net income (loss)
related to hedging
|
(5.5)
|
|
|
14.4
|
|
|
|
Net expense related
to pension valuation adjustment
|
—
|
|
|
(348.5)
|
|
|
|
Adjusted Corporate
expenses
|
$
|
54.0
|
|
|
$
|
59.9
|
|
|
(9.8)
|
%
|
Net Sales
Reconciliation
|
|
(Dollars in
millions)
|
Q4
FY17
|
|
Q4
FY16
|
|
%
Change
|
Net
Sales
|
$
|
1,861.7
|
|
|
$
|
2,053.0
|
|
|
(9.3)
|
%
|
Impact of foreign
exchange
|
6.0
|
|
|
—
|
|
|
|
Net sales from
divested businesses
|
—
|
|
|
(116.4)
|
|
|
|
Net Sales,
excluding the impacts of divestitures and foreign
exchange
|
$
|
1,867.7
|
|
|
$
|
1,936.6
|
|
|
(3.6)
|
%
|
Gross Margin
Reconciliation
|
|
Gross Margin: Gross
Profit as a % of Net sales
|
|
|
|
|
Q4
FY17
|
|
Q4
FY16
|
Net sales
|
$
|
1,861.7
|
|
|
$
|
2,053.0
|
|
Cost of goods
sold
|
1,332.7
|
|
|
1,472.9
|
|
Gross
Profit
|
$
|
529.0
|
|
|
$
|
580.1
|
|
|
|
|
|
Net expense related
to the planned divestiture of the Wesson oil brand, most of which
is related to charges on the Wesson oil production
facility
|
0.5
|
|
|
—
|
|
Net expense related
to restructuring plans included in cost of goods sold
|
5.5
|
|
|
3.6
|
|
Net expense (income)
related to hedging
|
5.5
|
|
|
(14.4)
|
|
Adjusted Gross
Profit
|
$
|
540.5
|
|
|
$
|
569.3
|
|
Adjusted Gross
Margin
|
29.0
|
%
|
|
27.7
|
%
|
FY17 & FY16
Diluted EPS from Continuing Operations
|
|
|
FY17
|
|
FY16
|
|
%
Change
|
Diluted EPS from
continuing operations
|
$
|
1.25
|
|
|
$
|
0.29
|
|
|
331.0
|
%
|
Net expense related
to restructuring plans
|
0.09
|
|
|
0.41
|
|
|
|
Net expense related
to the planned divestiture of the Wesson oil brand, most of which
is related to impairment charges on the Wesson oil production
facility
|
0.05
|
|
|
—
|
|
|
|
Net benefit related
to gain on sale of Spicetec and JM Swank businesses
|
(0.16)
|
|
|
—
|
|
|
|
Net expense related
to Goodwill & Intangible impairment charges
|
0.59
|
|
|
0.07
|
|
|
|
Net expense related
to pension valuation adjustment
|
—
|
|
|
0.49
|
|
|
|
Net expense related
to salaried pension plan lump sum settlement
|
0.02
|
|
|
—
|
|
|
|
Net expense related
to early retirement of debt
|
0.14
|
|
|
0.04
|
|
|
|
Net expense (benefit)
related to legal matters
|
(0.01)
|
|
|
0.01
|
|
|
|
Net expense (benefit)
related to hedging
|
0.01
|
|
|
(0.02)
|
|
|
|
Net benefit related
to tax adjustment of valuation allowance
|
(0.21)
|
|
|
—
|
|
|
|
Net expense (benefit)
related to unusual tax items
|
(0.03)
|
|
|
0.03
|
|
|
|
Rounding
|
—
|
|
|
(0.02)
|
|
|
|
Adjusted Diluted
EPS from continuing operations
|
$
|
1.74
|
|
|
$
|
1.30
|
|
|
33.8
|
%
|
Grocery &
Snacks Segment Operating Profit Reconciliation
|
|
(Dollars in
millions)
|
FY17
|
|
FY16
|
|
%
Change
|
Grocery &
Snacks Segment Operating Profit
|
$
|
653.7
|
|
|
$
|
592.9
|
|
|
10.3
|
%
|
Net expense related
to restructuring plans
|
25.3
|
|
|
51.8
|
|
|
|
Net expense related
to the planned divestiture of the Wesson oil brand, most of which
is related to impairment charges on the Wesson oil production
facility
|
31.4
|
|
|
—
|
|
|
|
Net expense related
to intangible impairment charges
|
68.3
|
|
|
50.1
|
|
|
|
Grocery &
Snacks Segment Adjusted Operating Profit
|
$
|
778.7
|
|
|
$
|
694.8
|
|
|
12.1
|
%
|
Refrigerated &
Frozen Segment Operating Profit Reconciliation
|
|
(Dollars in
millions)
|
FY17
|
|
FY16
|
|
%
Change
|
Refrigerated &
Frozen Segment Operating Profit
|
$
|
445.8
|
|
|
$
|
420.4
|
|
|
6.0
|
%
|
Net expense related
to restructuring plans
|
6.2
|
|
|
21.1
|
|
|
|
Refrigerated &
Frozen Segment Adjusted Operating Profit
|
$
|
452.0
|
|
|
$
|
441.5
|
|
|
2.4
|
%
|
International
Segment Operating Profit Reconciliation
|
|
(Dollars in
millions)
|
FY17
|
|
FY16
|
|
%
Change
|
International
Segment Operating Profit (Loss)
|
$
|
(168.9)
|
|
|
$
|
66.7
|
|
|
N/A
|
Net expense related
to restructuring plans
|
0.9
|
|
|
1.2
|
|
|
|
Net expense related
to goodwill and intangible impairment charges
|
235.9
|
|
|
—
|
|
|
|
International
Segment Adjusted Operating Profit
|
$
|
67.9
|
|
|
$
|
67.9
|
|
|
—
|
%
|
Foodservice
Segment Operating Profit Reconciliation
|
|
(Dollars in
millions)
|
FY17
|
|
FY16
|
|
%
Change
|
Foodservice
Segment Operating Profit
|
$
|
105.1
|
|
|
$
|
97.7
|
|
|
7.6
|
%
|
Net expense related
to restructuring plans
|
1.8
|
|
|
0.1
|
|
|
|
Foodservice
Segment Adjusted Operating Profit
|
$
|
106.9
|
|
|
$
|
97.8
|
|
|
9.3
|
%
|
Commercial Segment
Operating Profit Reconciliation
|
|
(Dollars in
millions)
|
FY17
|
|
FY16
|
|
%
Change
|
Commercial Segment
Operating Profit
|
$
|
202.6
|
|
|
$
|
45.4
|
|
|
346.3
|
%
|
Net benefit related
to gain on sale of Spicetec and JM Swank businesses
|
(197.4)
|
|
|
—
|
|
|
|
Commercial Segment
Adjusted Operating Profit
|
$
|
5.2
|
|
|
$
|
45.4
|
|
|
(88.5)
|
%
|
Corporate Expense
Reconciliation
|
|
(Dollars in
millions)
|
FY17
|
|
FY16
|
|
%
Change
|
Selling, general
and administrative expenses
|
$
|
1,417.1
|
|
|
$
|
2,024.6
|
|
|
(30.0)
|
%
|
Less: selling,
general and administrative expenses from reporting
segments
|
1,108.9
|
|
|
1,189.7
|
|
|
|
Plus: Corporate cost
of goods sold
|
5.1
|
|
|
(16.4)
|
|
|
|
Corporate
expenses
|
$
|
313.3
|
|
|
$
|
818.5
|
|
|
|
Net expense related
to restructuring plans
|
(29.4)
|
|
|
(207.6)
|
|
|
|
Net benefit (expense)
related to a legal matter
|
5.7
|
|
|
(5.0)
|
|
|
|
Net income (loss)
related to hedging
|
(5.1)
|
|
|
16.4
|
|
|
|
Net expense related
to early retirement of debt
|
(93.3)
|
|
|
(23.9)
|
|
|
|
Net expense related
to salaried pension plan lump sum settlement
|
(13.8)
|
|
|
—
|
|
|
|
Net expense related
to pension valuation adjustment
|
—
|
|
|
(348.5)
|
|
|
|
Adjusted Corporate
expenses
|
$
|
177.4
|
|
|
$
|
249.9
|
|
|
(29.0)
|
%
|
Net Sales
Reconciliation
|
|
(Dollars in
millions)
|
FY17
|
|
FY16
|
|
%
Change
|
Net
Sales
|
$
|
7,826.9
|
|
|
$
|
8,664.1
|
|
|
(9.7)
|
%
|
Impact of foreign
exchange
|
29.3
|
|
|
—
|
|
|
|
Net sales from
divested businesses
|
(71.1)
|
|
|
(468.1)
|
|
|
|
Net Sales,
excluding the impacts of divestitures and foreign
exchange
|
$
|
7,785.1
|
|
|
$
|
8,196.0
|
|
|
(5.0)
|
%
|
Gross Margin
Reconciliation
|
|
Gross Margin: Gross
Profit as a % of Net sales
|
|
|
|
|
FY17
|
|
FY16
|
Net sales
|
$
|
7,826.9
|
|
|
$
|
8,664.1
|
|
Cost of goods
sold
|
5,484.8
|
|
|
6,234.9
|
|
Gross
Profit
|
$
|
2,342.1
|
|
|
$
|
2,429.2
|
|
|
|
|
|
Net expense related
to the planned divestiture of the Wesson oil brand, most of which
is related to charges on the Wesson oil production
facility
|
0.5
|
|
|
—
|
|
Net expense related
to restructuring plans included in cost of goods sold
|
17.2
|
|
|
49.0
|
|
Net expense (income)
related to hedging
|
5.1
|
|
|
(16.4)
|
|
Adjusted Gross
Profit
|
$
|
2,364.9
|
|
|
$
|
2,461.8
|
|
Adjusted Gross
Margin
|
30.2
|
%
|
|
28.4
|
%
|
For more information, please contact:
MEDIA: Mike Cummins
312-549-5257
Michael.Cummins@conagra.com
INVESTORS: Brian Kearney
312-549-5002
ir@conagra.com
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/conagra-brands-transformation-continues-with-solid-end-to-strong-fiscal-2017-300481628.html
SOURCE Conagra Brands, Inc.