CHICAGO, Sept. 26, 2019 /PRNewswire/ -- Today Conagra
Brands, Inc. (NYSE: CAG) reported results for the first quarter of
fiscal year 2020, which ended on August 25,
2019. 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,"
"Legacy Conagra," "Legacy Pinnacle," and certain "adjusted"
results, are defined under the section entitled
"Definitions." Effective as of the first quarter, the Company
allocated the business components comprising the previous Pinnacle
Foods reporting segment to the four Legacy Conagra reporting
segments. See page 3 for more information.
Highlights
- First quarter net sales grew 30.3%, and organic net sales
decreased 1.7%.
- Diluted earnings per share from continuing operations (EPS) was
$0.36 in the quarter; adjusted EPS of
$0.43 benefitted from double-digit
growth in adjusted net income.
- The Legacy Conagra frozen and snacks businesses continued their
strong momentum in the quarter with retail sales growth (as
measured by IRI) of 2.5% and 7.2%, respectively.
- For Legacy Conagra, the combined results of the Refrigerated
& Frozen and Grocery & Snacks segments over-delivered
planned organic net sales growth in the quarter.
- The Legacy Conagra Foodservice and International businesses
experienced softer-than-planned organic net sales growth in the
quarter behind discrete events that are expected to be overcome in
the balance of the year.
- Legacy Pinnacle's retail sales decline (as measured by IRI) of
4.6% was in-line with expectations as the Company continued to
execute its value-over-volume strategy within the Legacy Pinnacle
portfolio.
- The Pinnacle integration and synergy realization remained
on-track in the quarter, with approximately $40 million of cost synergies realized in the
quarter, bringing total cost synergy realization to $71 million from the closing of the acquisition
through the first quarter.
- In the quarter, the Company reduced total gross debt by
$148 million; the Company remains
on-schedule with its previously-announced de-leveraging
targets.
- The Company is reaffirming its fiscal 2020 guidance for all
previously-communicated metrics, including the expectation of
stronger growth in the second half of the fiscal year. The
guidance includes expected full-year results from the Direct Store
Delivery (DSD) snacks business, the pending sale of which was
announced after quarter end. The DSD snacks business
divestiture transaction is expected to be completed before the end
of the calendar year.
CEO Perspective
Sean
Connolly, president and chief executive officer of Conagra
Brands, commented, "After one quarter, fiscal 2020 is on-track with
our plan as we execute against each of the priorities we outlined
previously: maintaining the momentum on Legacy Conagra, applying
our value-over-volume playbook to Pinnacle, and delivering against
our integration, synergy, and de-leveraging commitments. I am
pleased that our domestic retail businesses outperformed our first
quarter organic net sales growth plan. While our Foodservice
and International businesses experienced unplanned softness on the
top line this quarter, they outperformed our operating profit and
margin expectations. We believe the first quarter net sales
issues in these segments were discrete and are now largely behind
us."
He continued, "Our expectation for fiscal 2020 is that the
investments we are making in the first half of the year, in
particular the second quarter, will result in strong second half
performance, with the impacts of new innovation in the frozen and
snacks businesses, smart promotional support in key grocery brands,
the continued implementation of our Pinnacle improvement plan, and
the impact of synergy capture all greatest in the third and fourth
quarters. Given our progress in the first quarter, and
expectations for the balance of the year, we are reaffirming our
fiscal 2020 guidance across all elements."
Total Company First Quarter Results
In the quarter,
net sales increased 30.3%. Reported net sales growth
primarily reflects:
- a 35.8% increase from the acquisition of Pinnacle;
- a 3.7% net decrease from the divestitures of the Wesson oil
business, the Gelit business, and the Canadian Del Monte business, as well as the sale of the
Trenton, Missouri production
facility (Trenton) (the "Sold
Businesses");
- a 0.1% decrease from the impact of foreign exchange; and
- a 1.7% decrease in organic net sales.
The 1.7% decrease in organic net sales in the quarter was driven
by a 2.5% volume decline behind unplanned softness in the
International and Foodservice segments as well as planned
elasticity-driven declines in the Grocery & Snacks
segment. Price/mix increased 0.8% as favorable net pricing
and mix were partially offset by the Company's continued actions to
support its brands with brand building investments with
retailers.
Gross profit increased 28.9% to $665
million in the quarter, and adjusted gross profit increased
29.0% to $676 million. The
increases were primarily driven by the net impact of the addition
of Pinnacle's gross profit and cost synergies, as well as the
benefits of price/mix and supply chain productivity. These
benefits were partially offset by a reduction in profit associated
with the Sold Businesses, input cost inflation and the decline in
organic net sales. Gross margin decreased 31 basis points to
27.8% in the quarter. Adjusted gross margin declined 29 basis
points to 28.3% in the quarter, as the Pinnacle business was
dilutive to the Company's overall adjusted gross margin by
approximately 46 basis points, including the impact of cost
synergies related to the Legacy Pinnacle business.
Selling, general, and administrative expenses (SG&A), which
include advertising and promotional (A&P) expense, increased
55.8% to $401 million in the
quarter. Adjusted SG&A, which excludes A&P expense,
increased 19.9% to $256 million,
primarily as a result of the addition of expenses associated with
the Pinnacle business, partially offset by cost synergies.
Adjusted SG&A as a percent of net sales decreased 93 basis
points, reflecting these cost synergies and effective cost control
across the Company.
A&P expense for the quarter increased 5.9% to $45 million primarily due to the addition of
expenses associated with the Pinnacle business.
Pinnacle-related increases were partially offset by the Company's
continued implementation of its strategy to shift marketing
investments from certain lower-return A&P investments to brand
building investments with retailers.
Net interest expense was $123
million in the quarter, reflecting an increase versus the
prior-year period of $74 million on a
reported basis and $79 million on an
adjusted basis. The increase was driven by higher levels of
debt outstanding as a result of the net debt issued in connection
with the Pinnacle acquisition.
The average diluted shares outstanding of 488 million reflects
an increase of 94 million shares versus the prior-year
period. The increase was primarily driven by the shares
issued in connection with the Pinnacle acquisition.
In the quarter, net income attributable to Conagra Brands
decreased 2.5% to $174 million or
$0.36 per diluted share.
Adjusted net income attributable to Conagra Brands increased 12.5%
to $210 million or $0.43 per diluted share in the quarter. The
increase in adjusted net income attributable to Conagra Brands was
driven primarily by the addition of Pinnacle's operating profit and
cost synergies. These benefits were partially offset by
higher interest expense, the removal of profit from the Sold
Businesses, and lower earnings in the Ardent Mills joint
venture. The decrease in adjusted EPS in the quarter was
primarily driven by the increase in average diluted shares
outstanding, partially offset by the increase in adjusted net
income.
Adjusted EBITDA, which includes equity method investment
earnings and pension and postretirement non-service income,
increased 35.4% to $481 million in
the quarter, driven primarily by the addition of Pinnacle's
operating profit.
Segment Recast
As disclosed in the Company's fourth
quarter fiscal 2019 earnings release, beginning with the first
quarter of fiscal 2020, the Company no longer reports Pinnacle as a
standalone reporting segment. To better reflect how the
Company is now managing the overall integrated business, the
business components comprising the Pinnacle segment have been
allocated to the four Legacy Conagra reporting segments.
On September 23, 2019, the Company
furnished a Current Report on Form 8-K with recast historical
segment financial information that reflects this recast.
Grocery & Snacks Segment First Quarter Results
Net
sales for the Grocery & Snacks segment increased 26.9% to
$978 million in the quarter with the
acquisition of Pinnacle adding 34.7% to the net sales growth rate
and the divestiture of the Wesson oil business subtracting
4.1%. Organic net sales declined 3.7%. On an organic
net sales basis, volume decreased 3.0% during the quarter.
Planned sales declines in the Hunt's and Chef Boyardee businesses
in the quarter were related to the lingering effects of competitive
dynamics experienced in the fourth quarter of fiscal 2019.
The Company's action plans to reverse these trends are
underway. The segment continued to benefit from momentum and
innovation successes in the snacks businesses, including by the
Slim Jim, David, BIGS, Angie's BOOMCHICKAPOP, and Act II
brands. The price/mix decrease of 0.7% in the quarter
reflects favorable pricing and mix, the benefits of which were more
than offset by the impacts of increased brand building investments
with retailers. In-market retail sales for the Wish-Bone
business showed growth following product quality and packaging
improvements.
Operating profit for the segment decreased 15.1% to $152 million in the quarter. Adjusted
operating profit increased 16.0% to $208
million, primarily driven by the addition of Pinnacle's
profit and cost synergies. In the Legacy Conagra business,
the impacts of higher input costs, particularly in packaging, and
the loss of profit from the divestiture of the Wesson oil business
were partially offset by supply chain realized productivity
improvements.
Refrigerated & Frozen Segment First Quarter
Results
Net sales for the Refrigerated & Frozen
segment increased 51.0% to $959
million in the quarter with the acquisition of Pinnacle
adding 51.6% to the net sales growth rate and the divestiture of
the Gelit business subtracting 2.1%. Organic net sales
increased 1.5%. On an organic net sales basis, volume
increased 0.2% and price/mix increased 1.3%. The segment
benefited from solid performance across multiple brands, including
Banquet, Healthy Choice, P.F. Chang's, Reddi-wip, and Sandwich
Bros. Additionally, the Birds Eye business launched several
new innovations that are expected to benefit the second-half
organic net sales growth rate as they build in-market distribution
and velocity.
Operating profit for the segment increased 63.0% to $156 million in the quarter, and adjusted
operating profit increased 80.2% to $172
million. The increases were primarily driven by the
addition of Pinnacle's profit and cost synergies. In the
Legacy Conagra business, realized productivity improvements more
than offset higher input costs.
International Segment First Quarter Results
Net sales
for the International segment increased 5.5% to $204 million in the quarter, driven by
- a 14.0% increase from the acquisition of Pinnacle,
- a 4.8% net decrease from the divestitures of the Canadian
Del Monte business and the Wesson
oil business,
- a 0.7% decrease from the unfavorable impact of foreign
exchange, and
- a 3.0% decrease in organic net sales.
On an organic net sales basis, volume decreased 4.7% and
price/mix increased 1.7%. During the quarter, the segment
continued to benefit from growth in the snacks and frozen
businesses but experienced unplanned softness in the Puerto Rico export market and the Indian
business, which caused the segment's net sales to be below
expectations in the quarter. The Company expects that these
sales will now occur later in the fiscal year.
Operating profit for the segment decreased 33.5% to $25 million in the quarter. Adjusted
operating profit decreased 4.0% to $26
million as higher input costs, lower volume, the
divestitures of the Canadian Del
Monte and Wesson oil businesses, and the unfavorable impact
of foreign exchange more than offset the benefits of favorable
price/mix, realized productivity, and the addition of Pinnacle's
profit.
Foodservice Segment First Quarter Results
Net sales
for the Foodservice segment increased 6.3% to $250 million in the quarter with the acquisition
of Pinnacle adding 15.3% and the combined impact of the divestiture
of the Wesson oil business and sale of Trenton subtracting 5.8% from the net sales
growth rate. Organic net sales decreased 3.2%. On an organic
net sales basis, price/mix increased 3.2% and volume declined 6.4%
in the quarter driven by continued execution of the segment's
value-over-volume strategy, although at a higher-than-planned
level. Net sales growth in the foodservice Gardein business
was better than planned in the quarter, a trend the Company expects
to benefit organic net sales growth rate in the second half of the
fiscal year.
Operating profit increased 12.8% to $31
million in the quarter, primarily driven by the addition of
Pinnacle's profit and cost synergies. In the Legacy Conagra
business, the impacts of favorable price/mix and supply chain
realized productivity improvements were more than offset by higher
input cost and the impact of the sales of the Trenton facility and the Wesson oil
business.
Other First Quarter Items
Corporate expenses increased
23.2% to $100 million in the
quarter. Adjusted corporate expenses increased 1.4% to
$63 million in the quarter as the
addition of expenses associated with the Pinnacle business was
largely offset by cost synergies as well as the benefit of timing
of certain expenses.
Pension and post-retirement non-service income was $10 million in the quarter, which is comparable
to the prior-year period.
Equity method investment earnings decreased 24.2% to
$12 million in the quarter, and
adjusted equity method investment earnings decreased 57.8% to
$7 million. Unfavorable market
conditions led to lower performance by the Ardent Mills joint
venture.
In the quarter, the effective tax rate was (7.0)%, and the
adjusted effective tax rate was 21.8%.
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. In the quarter, the Company reduced its total gross
debt by $148 million as compared to
the end of the fourth quarter of fiscal 2019 and through the end of
the first quarter had reduced debt by over $1 billion since completing the Pinnacle
acquisition. Compared to the end of the fourth quarter of
fiscal 2019, net debt was approximately flat as the reduction in
gross debt was funded primarily by cash on hand as of the end of
the fourth quarter, in-line with expectations.
Portfolio Update
As previously disclosed on
September 11, 2019, the Company has
entered into a definitive agreement to sell its DSD snacks
business. The transaction is subject to customary closing
conditions and is expected to be completed before the end of the
calendar year.
Fiscal 2020 Outlook
The Company is reaffirming its
fiscal 2020 guidance. 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.
- Organic net sales growth of 1.0% to 1.5%
- Reported net sales growth of 13.5% to 14.0%
- Adjusted operating margin in the range of 16.2% to 16.8%
- Adjusted net interest expense of approximately $505 million
- Adjusted effective tax rate of 24% to 25%
- Average diluted share count of approximately 488 million
- Adjusted EPS in the range of $2.08 to $2.18
- Free cash flow of approximately $1
billion
The Company continues to expect second half results to show
stronger organic net sales growth and adjusted EPS growth than the
first half in light of the timing of the impact of new innovation,
strong first-half brand-building investments that peak in the
second quarter, the planned pace of synergy capture, and the
lapping of both higher interest expense and share count.
All metrics include the expected results of the DSD snack
business for the full fiscal year. Following the closing of
the transaction, the expected annualized impact of the divestiture
is a reduction of approximately $110
million of net sales and $0.02
of adjusted EPS.
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 these
forward-looking non-GAAP financial measures impracticable.
Please see the end of this release for more information.
Items Affecting Comparability of EPS
Included in the
$0.36 diluted EPS from continuing
operations for the first 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 $0.08 per diluted
share of net expense related to restructuring
- Approximately $0.01 per diluted
share of net expense related to corporate derivative hedging
activity
- Approximately $0.01 per diluted
share of net benefit related to a gain on an asset sale in the
Ardent Mills joint venture
- Approximately $0.06 per diluted
share of net expense related to an impairment of goodwill
associated with the planned divestiture of the DSD snack
business
- Approximately $0.03 per diluted
share of net expense related to an impairment of intangible
assets
- Approximately $0.10 per diluted
share of net benefit related to unusual tax items primarily related
to the reorganization of various Legacy Pinnacle legal entities and
state tax planning strategies
Included in the $0.45 diluted EPS
from continuing operations for the first 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 $0.04 per diluted
share of net expense related to costs associated with acquisitions
and divestitures
- Approximately $0.01 per diluted
share of net expense related to corporate derivative hedging
activity
- Approximately $0.01 per diluted
share of net expense related to costs associated with preparing for
the integration of Pinnacle Foods
- Approximately $0.02 per diluted
share of net gain related to the gain on sale of the Del
Monte Canada business
- Approximately $0.01 per diluted
share of net gain related to release of a Mexican tax reserve
- Approximately $0.01 per diluted
share of beneficial impact due to rounding
Definitions
Organic net sales growth 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 Legacy Conagra throughout this release exclude any
income or expenses associated with the recently acquired Pinnacle
business.
References to Legacy Pinnacle throughout this release refer to
either businesses or income and expenses that were a part of the
acquired Pinnacle Foods business and exclude any income or expense
associated with the Legacy Conagra business.
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.
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 continental U.S. and
1-412-902-6506 for all other participants and using passcode
5319750. 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 September 26,
2020.
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 (the "acquisition") may
not be fully realized or may take longer to realize than expected;
the risk that the acquisition may not be accretive within the
expected timeframe or to the extent anticipated; the risks that the
acquisition and related integration will create disruption to the
Company and its management and impede the achievement of business
plans; the risk that the 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 and pending acquisitions and divestitures,
including the pending divestiture of the DSD snacks business; risks
related to the timing to complete a potential divestiture of the
DSD snacks business; risks related to the ability and timing to
obtain required regulatory approvals and satisfy other closing
conditions for the divestiture of the DSD snacks business; 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 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 acquisition and otherwise, and to
benefit from trade optimization programs, related to the
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
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, related to
the acquisition or otherwise; the costs, disruption, and diversion
of management's attention due to the integration of the
acquisition; 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. 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 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)
|
|
|
|
FIRST
QUARTER
|
|
|
|
Thirteen weeks
ended
|
|
|
Thirteen weeks
ended
|
|
|
|
|
|
|
|
August 25,
2019
|
|
|
August 26,
2018
|
|
|
Percent Change
|
|
Net sales
|
|
|
2,390.7
|
|
|
|
1,834.4
|
|
|
|
30.3
|
%
|
Costs and
expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of goods
sold
|
|
|
1,726.2
|
|
|
|
1,318.9
|
|
|
|
30.9
|
%
|
Selling, general and
administrative expenses
|
|
|
400.8
|
|
|
|
257.3
|
|
|
|
55.8
|
%
|
Pension and
postretirement non-service income
|
|
|
(9.5)
|
|
|
|
(10.2)
|
|
|
|
(7.0)
|
%
|
Interest expense,
net
|
|
|
122.7
|
|
|
|
49.0
|
|
|
|
150.5
|
%
|
Income before income
taxes and equity method investment earnings
|
|
|
150.5
|
|
|
|
219.4
|
|
|
|
(31.4)
|
%
|
Income tax expense
(benefit)
|
|
|
(11.5)
|
|
|
|
57.4
|
|
|
N/A
|
|
Equity method
investment earnings
|
|
|
12.3
|
|
|
|
16.2
|
|
|
|
(24.2)
|
%
|
Net income
|
|
$
|
174.3
|
|
|
$
|
178.2
|
|
|
|
(2.2)
|
%
|
Less: Net income
attributable to noncontrolling interests
|
|
|
0.5
|
|
|
|
—
|
|
|
|
100.0
|
%
|
Net income
attributable to Conagra Brands, Inc.
|
|
$
|
173.8
|
|
|
$
|
178.2
|
|
|
|
(2.5)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share -
basic
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
attributable to Conagra Brands, Inc.
|
|
$
|
0.36
|
|
|
$
|
0.45
|
|
|
|
(20.0)
|
%
|
Weighted average
shares outstanding
|
|
|
486.8
|
|
|
|
391.7
|
|
|
|
24.3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share -
diluted
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
attributable to Conagra Brands, Inc.
|
|
$
|
0.36
|
|
|
$
|
0.45
|
|
|
|
(20.0)
|
%
|
Weighted average
share and share equivalents outstanding
|
|
|
487.9
|
|
|
|
394.1
|
|
|
|
23.8
|
%
|
Conagra Brands,
Inc.
Consolidated Balance
Sheets
(in
millions)
(unaudited)
|
|
|
|
August 25,
2019
|
|
|
May 26,
2019
|
|
ASSETS
|
|
|
|
|
|
|
|
|
Current
assets
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
|
64.7
|
|
|
|
236.6
|
|
Receivables, less
allowance for doubtful accounts of $2.1 and $2.2
|
|
|
776.3
|
|
|
|
818.2
|
|
Inventories
|
|
|
1,755.7
|
|
|
|
1,563.3
|
|
Prepaid expenses and
other current assets
|
|
|
108.7
|
|
|
|
93.4
|
|
Current assets held
for sale
|
|
|
22.6
|
|
|
|
22.3
|
|
Total current
assets
|
|
|
2,728.0
|
|
|
|
2,733.8
|
|
Property, plant and
equipment, net
|
|
|
2,348.0
|
|
|
|
2,356.3
|
|
Goodwill
|
|
|
11,462.3
|
|
|
|
11,460.1
|
|
Brands, trademarks
and other intangibles, net
|
|
|
4,524.8
|
|
|
|
4,559.5
|
|
Other
assets
|
|
|
1,140.4
|
|
|
|
915.5
|
|
Noncurrent assets
held for sale
|
|
|
151.0
|
|
|
|
188.6
|
|
|
|
|
22,354.5
|
|
|
|
22,213.8
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
Current
liabilities
|
|
|
|
|
|
|
|
|
Notes
payable
|
|
|
56.0
|
|
|
|
1.0
|
|
Current installments
of long-term debt
|
|
|
150.1
|
|
|
|
20.6
|
|
Accounts
payable
|
|
|
1,316.9
|
|
|
|
1,252.1
|
|
Accrued
payroll
|
|
|
96.4
|
|
|
|
173.7
|
|
Other accrued
liabilities
|
|
|
823.5
|
|
|
|
690.6
|
|
Current liabilities
held for sale
|
|
|
7.0
|
|
|
|
4.6
|
|
Total current
liabilities
|
|
|
2,449.9
|
|
|
|
2,142.6
|
|
Senior long-term
debt, excluding current installments
|
|
|
10,127.5
|
|
|
|
10,459.8
|
|
Subordinated
debt
|
|
|
195.9
|
|
|
|
195.9
|
|
Other noncurrent
liabilities
|
|
|
2,058.8
|
|
|
|
1,951.8
|
|
Noncurrent
liabilities held for sale
|
|
|
5.6
|
|
|
|
—
|
|
Total stockholders'
equity
|
|
|
7,516.8
|
|
|
|
7,463.7
|
|
|
|
|
22,354.5
|
|
|
|
22,213.8
|
|
Conagra Brands,
Inc. and Subsidiaries
Condensed
Consolidated Statements of Cash Flows
(in
millions)
(unaudited)
|
|
|
|
Thirteen weeks
ended
|
|
|
|
August
25,
2019
|
|
|
August
26,
2018
|
|
Cash flows from
operating activities:
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
174.3
|
|
|
$
|
178.2
|
|
Adjustments to
reconcile net income to net cash flows from operating
activities:
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
|
96.7
|
|
|
|
63.7
|
|
Asset impairment
charges
|
|
|
67.0
|
|
|
|
0.5
|
|
Loss (gain) on
divestiture
|
|
|
1.7
|
|
|
|
(13.3)
|
|
Earnings of affiliates
less than (in excess of) distributions
|
|
|
0.2
|
|
|
|
(3.0)
|
|
Stock-settled
share-based payments expense
|
|
|
10.2
|
|
|
|
11.4
|
|
Contributions to
pension plans
|
|
|
(3.4)
|
|
|
|
(4.2)
|
|
Pension
benefit
|
|
|
(5.7)
|
|
|
|
(6.9)
|
|
Other items
|
|
|
(2.6)
|
|
|
|
7.4
|
|
Change in operating
assets and liabilities excluding effects of business acquisitions
and dispositions:
|
|
|
|
|
|
|
|
|
Receivables
|
|
|
41.7
|
|
|
|
(18.9)
|
|
Inventories
|
|
|
(198.0)
|
|
|
|
(115.1)
|
|
Deferred income taxes
and income taxes payable, net
|
|
|
(23.9)
|
|
|
|
49.4
|
|
Prepaid expenses and
other current assets
|
|
|
(16.1)
|
|
|
|
(24.1)
|
|
Accounts
payable
|
|
|
94.3
|
|
|
|
50.4
|
|
Accrued
payroll
|
|
|
(77.6)
|
|
|
|
(70.0)
|
|
Other accrued
liabilities
|
|
|
48.2
|
|
|
|
(10.8)
|
|
Net cash flows from
operating activities
|
|
|
207.0
|
|
|
|
94.7
|
|
Cash flows from
investing activities:
|
|
|
|
|
|
|
|
|
Additions to property,
plant and equipment
|
|
|
(106.6)
|
|
|
|
(86.1)
|
|
Sale of property,
plant and equipment
|
|
|
1.0
|
|
|
|
17.2
|
|
Purchase of marketable
securities
|
|
|
(16.9)
|
|
|
|
—
|
|
Sale of marketable
securities
|
|
|
18.2
|
|
|
|
—
|
|
Proceeds from
divestiture
|
|
|
—
|
|
|
|
30.3
|
|
Other items
|
|
|
(3.2)
|
|
|
|
0.1
|
|
Net cash flows from
investing activities
|
|
|
(107.5)
|
|
|
|
(38.5)
|
|
Cash flows from
financing activities:
|
|
|
|
|
|
|
|
|
Net short-term
borrowings
|
|
|
55.0
|
|
|
|
26.8
|
|
Repayment of long-term
debt
|
|
|
(205.8)
|
|
|
|
—
|
|
Bridge financing fees
and other
|
|
|
—
|
|
|
|
(35.1)
|
|
Payment of intangible
asset financing arrangement
|
|
|
(13.6)
|
|
|
|
(14.0)
|
|
Cash dividends
paid
|
|
|
(103.3)
|
|
|
|
(83.0)
|
|
Exercise of stock
options and issuance of other stock awards, including tax
withholdings
|
|
|
(3.1)
|
|
|
|
(2.4)
|
|
Other items
|
|
|
—
|
|
|
|
(1.9)
|
|
Net cash flows from
financing activities
|
|
|
(270.8)
|
|
|
|
(109.6)
|
|
Effect of exchange
rate changes on cash and cash equivalents and restricted
cash
|
|
|
(0.6)
|
|
|
|
0.2
|
|
Net change in cash
and cash equivalents and restricted cash
|
|
|
(171.9)
|
|
|
|
(53.2)
|
|
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
|
|
$
|
65.7
|
|
|
$
|
75.8
|
|
Conagra Brands,
Inc.
Reconciliation of
Non-GAAP Financial Measures to Reported Financial
Measures
(in
millions)
|
|
Q1
FY20
|
|
Grocery &
Snacks
|
|
|
Refrigerated & Frozen
|
|
|
International
|
|
|
Foodservice
|
|
|
Total Conagra
Brands
|
|
Net
Sales
|
|
$
|
977.6
|
|
|
$
|
959.1
|
|
|
$
|
204.4
|
|
|
$
|
249.6
|
|
|
$
|
2,390.7
|
|
Impact of foreign
exchange
|
|
|
—
|
|
|
|
—
|
|
|
|
1.4
|
|
|
|
—
|
|
|
|
1.4
|
|
Net sales from
acquired businesses
|
|
|
(266.3)
|
|
|
|
(327.8)
|
|
|
|
(26.8)
|
|
|
|
(35.4)
|
|
|
|
(656.3)
|
|
Organic Net
Sales
|
|
$
|
711.3
|
|
|
$
|
631.3
|
|
|
$
|
179.0
|
|
|
$
|
214.2
|
|
|
$
|
1,735.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year-over-year
change - Net Sales
|
|
|
26.9
|
%
|
|
|
51.0
|
%
|
|
|
5.5
|
%
|
|
|
6.3
|
%
|
|
|
30.3
|
%
|
Impact of
foreign exchange (pp)
|
|
|
—
|
|
|
|
—
|
|
|
|
0.7
|
|
|
|
—
|
|
|
|
0.1
|
|
Net sales from
acquired businesses (pp)
|
|
|
(34.7)
|
|
|
|
(51.6)
|
|
|
|
(14.0)
|
|
|
|
(15.3)
|
|
|
|
(35.8)
|
|
Net sales from
divested businesses (pp)
|
|
|
4.1
|
|
|
|
2.1
|
|
|
|
4.8
|
|
|
|
4.9
|
|
|
|
3.6
|
|
Net sales
from sold Trenton plant (pp)
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
0.9
|
|
|
|
0.1
|
|
Organic Net
Sales
|
|
|
(3.7)
|
%
|
|
|
1.5
|
%
|
|
|
(3.0)
|
%
|
|
|
(3.2)
|
%
|
|
|
(1.7)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Volume
(Organic)
|
|
|
(3.0)
|
%
|
|
|
0.2
|
%
|
|
|
(4.7)
|
%
|
|
|
(6.4)
|
%
|
|
|
(2.5)
|
%
|
Price/Mix
|
|
|
(0.7)
|
%
|
|
|
1.3
|
%
|
|
|
1.7
|
%
|
|
|
3.2
|
%
|
|
|
0.8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Q1
FY19
|
|
Grocery &
Snacks
|
|
|
Refrigerated & Frozen
|
|
|
International
|
|
|
Foodservice
|
|
|
Total Conagra
Brands
|
|
Net
Sales
|
|
$
|
770.7
|
|
|
$
|
635.2
|
|
|
$
|
193.8
|
|
|
$
|
234.7
|
|
|
$
|
1,834.4
|
|
Net sales from
divested businesses
|
|
|
(31.9)
|
|
|
|
(13.2)
|
|
|
|
(9.2)
|
|
|
|
(11.6)
|
|
|
|
(65.9)
|
|
Net sales from sold
Trenton plant
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(2.0)
|
|
|
|
(2.0)
|
|
Organic Net
Sales
|
|
$
|
738.8
|
|
|
$
|
622.0
|
|
|
$
|
184.6
|
|
|
$
|
221.1
|
|
|
$
|
1,766.5
|
|
Conagra Brands,
Inc.
Reconciliation of
Non-GAAP Financial Measures to Reported Financial
Measures
(in
millions)
|
|
|
Q1
FY20
|
|
Grocery
& Snacks
|
|
|
Refrigerated
& Frozen
|
|
|
International
|
|
|
Foodservice
|
|
|
Corporate
Expense
|
|
|
Total
Conagra
Brands
|
|
Operating
Profit
|
|
$
|
151.7
|
|
|
$
|
155.6
|
|
|
$
|
24.8
|
|
|
$
|
31.1
|
|
|
$
|
(99.5)
|
|
|
$
|
263.7
|
|
Restructuring
plans
|
|
|
19.1
|
|
|
|
0.6
|
|
|
|
1.2
|
|
|
|
—
|
|
|
|
28.6
|
|
|
|
49.5
|
|
Acquisitions and
divestitures
|
|
|
0.7
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
1.2
|
|
|
|
1.9
|
|
Impairment of a
business held for sale
|
|
|
31.4
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
31.4
|
|
Brand impairment
charges
|
|
|
3.5
|
|
|
|
15.8
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
19.3
|
|
Loss on divestiture
of businesses
|
|
|
1.7
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
1.7
|
|
Corporate hedging
derivative losses (gains)
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
7.2
|
|
|
|
7.2
|
|
Adjusted Operating
Profit
|
|
$
|
208.1
|
|
|
$
|
172.0
|
|
|
$
|
26.0
|
|
|
$
|
31.1
|
|
|
$
|
(62.5)
|
|
|
$
|
374.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Profit
Margin
|
|
|
15.5
|
%
|
|
|
16.2
|
%
|
|
|
12.1
|
%
|
|
|
12.5
|
%
|
|
|
|
|
|
|
11.0
|
%
|
Adjusted Operating
Profit Margin
|
|
|
21.3
|
%
|
|
|
17.9
|
%
|
|
|
12.7
|
%
|
|
|
12.5
|
%
|
|
|
|
|
|
|
15.7
|
%
|
Year-over-year %
change - Operating Profit
|
|
|
(15.1)
|
%
|
|
|
63.0
|
%
|
|
|
(33.5)
|
%
|
|
|
12.8
|
%
|
|
|
23.2
|
%
|
|
|
2.1
|
%
|
Year-over year %
change - Adjusted Operating Profit
|
|
|
16.0
|
%
|
|
|
80.2
|
%
|
|
|
(4.0)
|
%
|
|
|
12.8
|
%
|
|
|
1.4
|
%
|
|
|
40.0
|
%
|
Year-over-year bps
change - Adjusted Operating Margin
|
|
|
(198)
|
bps
|
|
|
291
|
bps
|
|
|
(125)
|
bps
|
|
|
72
|
bps
|
|
|
|
|
|
|
108
|
bps
|
Q1
FY19
|
|
Grocery
& Snacks
|
|
|
Refrigerated
& Frozen
|
|
|
International
|
|
|
Foodservice
|
|
|
Corporate
Expense
|
|
|
Total
Conagra
Brands
|
|
Operating
Profit
|
|
$
|
178.6
|
|
|
$
|
95.5
|
|
|
$
|
37.3
|
|
|
$
|
27.6
|
|
|
$
|
(80.8)
|
|
|
$
|
258.2
|
|
Restructuring
plans
|
|
|
0.1
|
|
|
|
—
|
|
|
|
0.2
|
|
|
|
—
|
|
|
|
0.9
|
|
|
|
1.2
|
|
Gain on sale of Del
Monte business
|
|
|
—
|
|
|
|
—
|
|
|
|
(13.3)
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(13.3)
|
|
Acquisitions and
divestitures
|
|
|
0.6
|
|
|
|
—
|
|
|
|
2.9
|
|
|
|
—
|
|
|
|
7.5
|
|
|
|
11.0
|
|
Integration
costs
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
4.3
|
|
|
|
4.3
|
|
Corporate hedging
derivative losses (gains)
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
6.4
|
|
|
|
6.4
|
|
Adjusted Operating
Profit
|
|
$
|
179.3
|
|
|
$
|
95.5
|
|
|
$
|
27.1
|
|
|
$
|
27.6
|
|
|
$
|
(61.7)
|
|
|
$
|
267.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Profit
Margin
|
|
|
23.2
|
%
|
|
|
15.0
|
%
|
|
|
19.2
|
%
|
|
|
11.8
|
%
|
|
|
|
|
|
|
14.1
|
%
|
Adjusted Operating
Profit Margin
|
|
|
23.3
|
%
|
|
|
15.0
|
%
|
|
|
14.0
|
%
|
|
|
11.8
|
%
|
|
|
|
|
|
|
14.6
|
%
|
Conagra Brands,
Inc.
|
Reconciliation of
Non-GAAP Financial Measures to Reported Financial
Measures
|
(in
millions)
|
|
|
Q1
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
|
|
$
|
664.5
|
|
|
$
|
400.8
|
|
|
$
|
263.7
|
|
|
$
|
150.5
|
|
|
$
|
(11.5)
|
|
|
|
(7.0)
|
%
|
|
$
|
173.8
|
|
|
$
|
0.36
|
|
% of Net
Sales
|
|
|
27.8
|
%
|
|
|
16.8
|
%
|
|
|
11.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring
plans
|
|
|
4.5
|
|
|
|
45.0
|
|
|
|
49.5
|
|
|
|
50.1
|
|
|
|
11.5
|
|
|
|
|
|
|
|
38.6
|
|
|
|
0.08
|
|
Acquisitions and
divestitures
|
|
|
—
|
|
|
|
1.9
|
|
|
|
1.9
|
|
|
|
1.9
|
|
|
|
0.5
|
|
|
|
|
|
|
|
1.4
|
|
|
|
—
|
|
Corporate hedging
derivative losses (gains)
|
|
|
7.2
|
|
|
|
—
|
|
|
|
7.2
|
|
|
|
7.2
|
|
|
|
1.8
|
|
|
|
|
|
|
|
5.4
|
|
|
|
0.01
|
|
Advertising and
promotion expenses 2
|
|
|
—
|
|
|
|
45.3
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
|
—
|
|
|
|
—
|
|
Gain on Ardent JV
asset sale
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(1.3)
|
|
|
|
|
|
|
|
(4.1)
|
|
|
|
(0.01)
|
|
Impairment of a
business held for sale
|
|
|
—
|
|
|
|
31.4
|
|
|
|
31.4
|
|
|
|
31.4
|
|
|
|
1.8
|
|
|
|
|
|
|
|
29.6
|
|
|
|
0.06
|
|
Brand impairment
charges
|
|
|
—
|
|
|
|
19.3
|
|
|
|
19.3
|
|
|
|
19.3
|
|
|
|
4.5
|
|
|
|
|
|
|
|
14.8
|
|
|
|
0.03
|
|
Loss on divestiture
of businesses
|
|
|
—
|
|
|
|
1.7
|
|
|
|
1.7
|
|
|
|
1.7
|
|
|
|
0.4
|
|
|
|
|
|
|
|
1.3
|
|
|
|
—
|
|
Unusual tax
items
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
51.0
|
|
|
|
|
|
|
|
(51.0)
|
|
|
|
(0.10)
|
|
Adjusted
|
|
$
|
676.2
|
|
|
$
|
256.2
|
|
|
$
|
374.7
|
|
|
$
|
262.1
|
|
|
$
|
58.7
|
|
|
|
21.8
|
%
|
|
$
|
209.8
|
|
|
$
|
0.43
|
|
% of Net
Sales
|
|
|
28.3
|
%
|
|
|
10.7
|
%
|
|
|
15.7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year-over-year
% of net sales change - reported
|
|
|
(31)
|
bps
|
|
|
274
|
bps
|
|
|
(304)
|
bps
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year-over-year
% of net sales change - adjusted
|
|
|
(29)
|
bps
|
|
|
(93)
|
bps
|
|
|
108
|
bps
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year-over-year
change - reported
|
|
|
28.9
|
%
|
|
|
55.8
|
%
|
|
|
2.1
|
%
|
|
|
(31.4)
|
%
|
|
|
N/A
|
|
|
|
|
|
|
|
(2.5)
|
%
|
|
|
(20.0)
|
%
|
Year-over-year
change - adjusted
|
|
|
29.0
|
%
|
|
|
19.9
|
%
|
|
|
40.0
|
%
|
|
|
12.0
|
%
|
|
|
(7.8)
|
%
|
|
|
|
|
|
|
12.5
|
%
|
|
|
(8.5)
|
%
|
|
|
Q1
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
|
|
$
|
515.5
|
|
|
$
|
257.3
|
|
|
$
|
258.2
|
|
|
$
|
219.4
|
|
|
$
|
57.4
|
|
|
|
24.4
|
%
|
|
$
|
178.2
|
|
|
$
|
0.45
|
|
% of Net
Sales
|
|
|
28.1
|
%
|
|
|
14.0
|
%
|
|
|
14.1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring
plans
|
|
|
2.3
|
|
|
|
(1.1)
|
|
|
|
1.2
|
|
|
|
0.6
|
|
|
|
0.2
|
|
|
|
|
|
|
|
0.4
|
|
|
|
—
|
|
Acquisitions and
divestitures
|
|
|
—
|
|
|
|
11.0
|
|
|
|
11.0
|
|
|
|
16.6
|
|
|
|
2.3
|
|
|
|
|
|
|
|
14.3
|
|
|
|
0.04
|
|
Corporate hedging
derivative losses (gains)
|
|
|
6.4
|
|
|
|
—
|
|
|
|
6.4
|
|
|
|
6.4
|
|
|
|
1.6
|
|
|
|
|
|
|
|
4.8
|
|
|
|
0.01
|
|
Integration
costs
|
|
|
—
|
|
|
|
4.3
|
|
|
|
4.3
|
|
|
|
4.3
|
|
|
|
1.1
|
|
|
|
|
|
|
|
3.2
|
|
|
|
0.01
|
|
Advertising and
promotion expenses 2
|
|
|
—
|
|
|
|
42.7
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
|
—
|
|
|
|
—
|
|
Gain on sale of Del
Monte business
|
|
|
—
|
|
|
|
(13.3)
|
|
|
|
(13.3)
|
|
|
|
(13.3)
|
|
|
|
(3.6)
|
|
|
|
|
|
|
|
(9.7)
|
|
|
|
(0.02)
|
|
Unusual tax
items
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
4.8
|
|
|
|
|
|
|
|
(4.8)
|
|
|
|
(0.01)
|
|
Rounding
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
|
—
|
|
|
|
(0.01)
|
|
Adjusted
|
|
$
|
524.2
|
|
|
$
|
213.7
|
|
|
$
|
267.8
|
|
|
$
|
234.0
|
|
|
$
|
63.8
|
|
|
|
25.5
|
%
|
|
$
|
186.4
|
|
|
$
|
0.47
|
|
% of Net
Sales
|
|
|
28.6
|
%
|
|
|
11.7
|
%
|
|
|
14.6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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)
|
|
|
|
Q1
FY20
|
|
|
Q1
FY19
|
|
|
%
Change
|
|
Interest expense,
net
|
|
$
|
122.7
|
|
|
$
|
49.0
|
|
|
|
150.5
|
%
|
Acquisitions and
divestitures
|
|
|
—
|
|
|
|
(5.6)
|
|
|
|
|
|
Adjusted interest
expense, net
|
|
$
|
122.7
|
|
|
$
|
43.4
|
|
|
|
183.0
|
%
|
|
|
|
Q1
FY20
|
|
|
Q1
FY19
|
|
|
%
Change
|
|
Equity method
investment earnings
|
|
$
|
12.3
|
|
|
$
|
16.2
|
|
|
|
(24.2)
|
%
|
Gain on Ardent JV
asset sale
|
|
|
(5.4)
|
|
|
|
—
|
|
|
|
|
|
Adjusted equity
method investment earnings
|
|
$
|
6.9
|
|
|
$
|
16.2
|
|
|
|
(57.8)
|
%
|
|
|
|
Q1
FY20
|
|
|
Q1
FY19
|
|
|
%
Change
|
|
Pension and
postretirement non-service income
|
|
$
|
(9.5)
|
|
|
$
|
(10.2)
|
|
|
|
(7.0)
|
%
|
Restructuring
plans
|
|
|
(0.6)
|
|
|
|
0.6
|
|
|
|
|
|
Adjusted pension
and postretirement non-service income
|
|
$
|
(10.1)
|
|
|
$
|
(9.6)
|
|
|
|
5.1
|
%
|
Conagra Brands,
Inc.
Reconciliation of
Non-GAAP Financial Measures to Reported Financial
Measures
(in
millions)
|
|
|
|
Q1
FY20
|
|
|
Q1
FY19
|
|
|
%
Change
|
|
Net income
attributable to Conagra Brands, Inc.
|
|
$
|
173.8
|
|
|
$
|
178.2
|
|
|
|
(2.5)
|
%
|
Add
Back: Income tax expense
(benefit)
|
|
|
(11.5)
|
|
|
|
57.4
|
|
|
|
|
|
Income tax expense
attributable to noncontrolling interests
|
|
|
(0.2)
|
|
|
|
(0.2)
|
|
|
|
|
|
Interest expense,
net
|
|
|
122.7
|
|
|
|
49.0
|
|
|
|
|
|
Depreciation
|
|
|
81.7
|
|
|
|
55.4
|
|
|
|
|
|
Amortization
|
|
|
15.0
|
|
|
|
8.3
|
|
|
|
|
|
Earnings before
interest, taxes, depreciation, and amortization
|
|
$
|
381.5
|
|
|
|
348.1
|
|
|
|
9.6
|
%
|
Restructuring plans
1
|
|
|
43.8
|
|
|
|
(0.9)
|
|
|
|
|
|
Acquisitions and
divestitures 2
|
|
|
1.9
|
|
|
|
11.0
|
|
|
|
|
|
Integration
costs
|
|
|
—
|
|
|
|
4.3
|
|
|
|
|
|
Corporate hedging
losses (gains)
|
|
|
7.2
|
|
|
|
6.4
|
|
|
|
|
|
Impairment of a
business held for sale
|
|
|
31.4
|
|
|
|
—
|
|
|
|
|
|
Loss (gain) on sale
of businesses
|
|
|
1.7
|
|
|
|
(13.3)
|
|
|
|
|
|
Brand impairment
charges
|
|
|
19.3
|
|
|
|
—
|
|
|
|
|
|
Gain on Ardent JV
asset sale
|
|
|
(5.4)
|
|
|
|
—
|
|
|
|
|
|
Adjusted Earnings
before interest, taxes, depreciation, and
amortization
|
|
$
|
481.4
|
|
|
$
|
355.6
|
|
|
|
35.4
|
%
|
|
1 Excludes
comparability items related to depreciation.
|
2 Excludes
comparability items related to interest expense.
|
|
|
August 25,
2019
|
|
|
August 26,
2018
|
|
Net cash flows from
operating activities
|
|
$
|
207.0
|
|
|
$
|
94.7
|
|
Additions to
property, plant and equipment
|
|
|
(106.6)
|
|
|
|
(86.1)
|
|
Free cash
flow
|
|
$
|
100.4
|
|
|
$
|
8.6
|
|
|
|
Q2
FY19
|
|
|
Q3
FY19
|
|
|
Q4
FY19
|
|
|
Q1
FY20
|
|
Notes
payable
|
|
$
|
0.9
|
|
|
$
|
—
|
|
|
$
|
1.0
|
|
|
$
|
56.0
|
|
Current installments
of long-term debt
|
|
|
17.2
|
|
|
|
19.9
|
|
|
|
20.6
|
|
|
|
150.1
|
|
Senior long-term
debt, excluding current installments
|
|
|
11,349.5
|
|
|
|
10,911.8
|
|
|
|
10,459.8
|
|
|
|
10,127.5
|
|
Subordinated
debt
|
|
|
195.9
|
|
|
|
195.9
|
|
|
|
195.9
|
|
|
|
195.9
|
|
Total
Debt
|
|
$
|
11,563.5
|
|
|
$
|
11,127.6
|
|
|
$
|
10,677.3
|
|
|
$
|
10,529.5
|
|
Less: Cash
|
|
|
442.3
|
|
|
|
282.2
|
|
|
|
236.6
|
|
|
|
64.7
|
|
Net
Debt
|
|
$
|
11,121.2
|
|
|
$
|
10,845.4
|
|
|
$
|
10,440.7
|
|
|
$
|
10,464.8
|
|
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SOURCE Conagra Brands, Inc.