BW20030213002199 20030213T133507Z UTC
( BW)(CAMPBELL-SOUP-CO)(CBE) Interim Results
Business Editors
UK REGULATORY NEWS
CAMDEN, N.J.--(BUSINESS WIRE)--Feb. 13, 2003--
Campbell Reports Second Quarter Earnings Per Share of $.56; U.S. Wet
Soup Shipments Rise 4 Percent; Worldwide Wet Soup Shipments Increase 2
Percent
Campbell Soup Company (NYSE:CPB) today reported diluted earnings per
share for the second quarter ended January 26, 2003 of $.56 compared
to $.49 recorded in the year-ago quarter. Earnings per share in the
year-ago quarter were $.53 when adjusted for amortization expense of
$.03 per share eliminated under SFAS No. 142, which the company
adopted at the start of fiscal 2003, and $.01 per share of costs
related to the Australian manufacturing reconfiguration.
For the second quarter, net sales rose 6 percent to $1.9 billion,
driven by the following:
-- Base volume and mix were up 1 percent;
-- Price added 2 percent;
-- Promotions subtracted 1 percent;
-- Currency added 2 percent; and
-- Acquisitions added 2 percent.
For the second quarter of fiscal 2003, U.S. wet soup shipments rose 4
percent. Outside of the U.S., wet soup shipments declined 1 percent,
resulting in a 2 percent increase worldwide.
As reported net earnings were $231 million versus $203 million a year
earlier. On a comparable basis, earnings for the year-ago quarter were
$219 million, after adjusting for amortization of $13 million
eliminated under SFAS No. 142, and $3 million for costs related to the
Australian reconfiguration.
For the first half of fiscal year 2003, the company reported diluted
earnings per share, before the cumulative effect of the accounting
change, of $1.03 compared to $.91 recorded in the same period last
year. Earnings per share in the year-ago period were $.99 when
adjusted for amortization expense of $.06 per share eliminated under
SFAS No. 142 and approximately $.02 per share of costs related to the
Australian reconfiguration.
Net sales for the first six months increased 2 percent to $3.6 billion
compared with the year-ago period, reflecting the following factors:
-- Base volume and mix were down 1 percent;
-- Price added 1 percent;
-- Promotions subtracted 1 percent;
-- Currency added 1 percent; and
-- Acquisitions added 2 percent.
For the first half, compared with the same period last year, wet soup
shipments declined 2 percent in the U.S. and 1 percent in
international, resulting in a 2 percent worldwide decline. Net
earnings for the first half, before the cumulative effect of the
accounting change, were $423 million compared to $374 million in the
year-ago period.
Excluding the impact of amortization of $26 million eliminated under
SFAS No. 142 and costs of $6 million related to the Australian
reconfiguration, net earnings for the first half of last year were
$406 million.
Douglas R. Conant, Campbell's President and Chief Executive Officer,
said, "We delivered a solid financial performance this quarter. In
U.S. Soup, our quality and packaging improvements, as well as our
innovation efforts, are beginning to have a positive impact on our
results. During the quarter, we began marketing our improved condensed
vegetable soups, and we have experienced significantly improved
consumer purchasing trends since this marketing commenced. Our
ready-to-serve soups delivered solid growth this quarter, helped by
Campbell's 'Chunky' and 'Select' soups, as well as Campbell's 'Soup at
Hand' sippable soups, which are performing very well in the
marketplace. 'Swanson' broth continued to show strength over the
Thanksgiving and Christmas holidays. However, we know we still have
more work to do to improve our overall marketing effectiveness in U.S.
Soup."
Conant added, "We are pleased with the performance of Pepperidge Farm,
'V8' vegetable juice, 'Pace' Mexican sauces and our Canadian business,
as well as other elements of our broader portfolio. We will continue
to make the strategic investments necessary to help us realize the
potential of our full portfolio of businesses."
Consistent with earlier guidance, the company continues to expect
earnings per share, before the cumulative effect of the accounting
change, of approximately $1.47 for fiscal 2003. This compares to $1.28
per share as reported in fiscal 2002, or $1.44 when adjusted for
amortization expense of $.13 per share and costs of $.03 per share
related to the Australian reconfiguration. For the third quarter of
2003, the company expects earnings per share to be in the range of
$.25 to $.27.
A summary of second quarter and first half segment results follows.
For comparative purposes, prior year business results have been
adjusted to reflect the pro forma impact of amortization eliminated
under SFAS No. 142.
North America Soup and Away From Home
Sales of $824 million were up 1 percent in the quarter compared to the
year-ago period, reflecting 4 percent growth in U.S. wet soup
shipments, offset by increased promotional spending. Operating
earnings of $209 million were down 4 percent, reflecting increased
promotional spending behind the improved condensed vegetable varieties
and "Soup at Hand" sippable soups, as well as increased investments in
U.S. Soup product development and shelving initiatives. Further
details include the following:
-- Condensed soup shipments declined 3 percent. During the quarter,
the company launched consumer marketing in support of the improved
vegetable varieties and the expanded line of Fun Favorites soups for
kids. Since this marketing commenced, both of these product groups
have experienced significant improvement in consumer purchasing
trends.
-- Ready-to-serve soup shipments rose 4 percent for the quarter,
driven by growth in Campbell's "Chunky" and "Select," and the
introduction of "Soup at Hand," Campbell's new convenient sipping soup
designed for out-of-home consumption.
-- "Swanson" broth shipments rose 20 percent, boosted by strong growth
in consumer purchases over the holiday season and the later timing of
the Thanksgiving holiday.
For the first half of fiscal 2003, sales of $1.6 billion declined 3
percent and operating earnings of $414 million declined 8 percent
compared to the year-ago period.
North America Sauces and Beverages
Sales of $318 million were recorded in the quarter, compared to sales
of $319 million recorded in the year-ago quarter. Operating earnings
increased 20 percent to $84 million primarily due to lower
manufacturing costs and marketing spending compared to the year-ago
quarter. Marketing spending was lower primarily due to the comparison
with the year-ago quarter when the introductory marketing behind
"Prego" Pasta Bakes was initiated. Further details include the
following:
-- Strong gains in "V8" vegetable juice offset declines in "V8
Splash." "V8 Splash" Smoothies were launched in January and are
gaining strong retail acceptance.
-- "Pace" Mexican sauce shipments delivered double-digit growth,
driven by new marketing initiatives and product introductions,
including "Pace" Enchilada sauce.
-- Shipments of "Prego" pasta sauces and "Franco-American" pasta
declined. "Prego" sauce shipments were down primarily due to the tough
comparison with the year-ago quarter when introductory marketing
behind "Prego" Pasta Bake sauce drove growth.
For the first half of fiscal 2003, sales of $625 million declined 1
percent compared to the year-ago period. Operating earnings rose 20
percent to $161 million.
Biscuits and Confectionery
Sales rose 14 percent to $486 million in the quarter. Excluding the
impact of currency and the acquisition of Snack Foods Limited, sales
grew 4 percent. Operating earnings rose 5 percent to $87 million,
excluding the impact of the Australian manufacturing reconfiguration
in fiscal 2002. Operating earnings rose 4 percent, excluding the
acquisition of Snack Foods Limited and currency.
During the quarter, sales gains were driven by Pepperidge Farm, Godiva
Chocolatier, and the impact of the acquisition of Snack Foods Limited.
Further details include the following:
-- Pepperidge Farm delivered strong sales growth across its entire
portfolio of cookies, crackers, bread and frozen products. The primary
driver of growth was the "Goldfish" cracker line, which grew at a
double-digit rate for the quarter and the year-to-date period. This
business was bolstered by Super Bowl promotions and the introduction
of "Goldfish" Colors during the quarter.
-- Godiva Chocolatier's worldwide sales increased, helped by growth in
Europe and Asia. Same store sales in North America remained weak.
-- Excluding currency and the acquisition of Snack Foods Limited,
sales at Arnotts were unchanged. Arnotts earnings were favorably
impacted by an $8 million gain on the sale of the site of the recently
closed Burwood facility. This gain was substantially offset by
start-up costs at the Huntingwood plant and severance costs related to
the integration of Snack Foods Limited.
For the first half of fiscal 2003, sales of $896 million rose 11
percent compared to the year-ago period. Excluding the impact of the
acquisition of Snack Foods Limited and currency, sales grew 3 percent.
Operating earnings rose 5 percent to $130 million, excluding the
impact of the Australian manufacturing reconfiguration. Operating
earnings rose 5 percent, excluding the acquisition of Snack Foods
Limited and currency.
International Soup and Sauces
International Soup and Sauces sales rose 16 percent to $290 million
and operating earnings were $34 million in the quarter, a decline of 3
percent compared to the year-ago period. Excluding the impact of
currency and the acquisition of Erin Foods in Ireland, sales were
unchanged and operating earnings declined 14 percent, compared to the
year-ago quarter. The operating earnings decline was driven by costs
related to strategy development, investments in infrastructure and
higher promotional spending primarily behind the company's dry soup
business in Europe.
Dry soups continued to deliver a positive performance, helped by new
products in Germany and strong sales in Belgium and the Nordic region.
These increases were offset by a decline in sales in the U.K. Sales in
the Asia Pacific region were unchanged.
For the first half of fiscal 2003, sales were $532 million, an
increase of 10 percent compared to the year-ago period. Excluding the
impact of currency and the acquisition of Erin Foods, sales declined 1
percent. Operating earnings declined 6 percent to $60 million compared
to the year-ago period. Excluding the impact of currency and the
acquisition of Erin Foods, operating earnings declined 16 percent.
Conference Call
The company will host a conference call to discuss these results on
February 13, 2003 at 11:00 a.m. Eastern Standard Time. U.S.
participants may access the call at 1-888-396-9931 and non-U.S.
participants at 1-630-395-0077. Participants should call at least five
minutes prior to the starting time. The passcode is Campbell Soup and
the conference leader is Len Griehs. The call will also be broadcast
live over the Internet at http://www.campbellsoup.com and can be
accessed by clicking on the Webcast banner. A recording of the call
will be available approximately two hours after it is completed
through midnight February 17, 2003 at 1-800-884-1530 or
1-402-220-3007.
Forward-Looking Statements
This release contains "forward-looking statements" which reflect the
company's current expectations about its future plans and performance,
including statements concerning the impact of marketing investments
and strategies, new product introductions, and quality improvements on
sales and earnings. These forward-looking statements rely on a number
of assumptions and estimates which could be inaccurate and which are
subject to risks and uncertainties. Actual results could vary
materially from those anticipated or expressed in any forward-looking
statement made by the company. Please refer to the company's most
recent Form 10-K and subsequent filings for a further discussion of
these risks and uncertainties. The company disclaims any obligation or
intent to update the forward-looking statements in order to reflect
events or circumstances after the date of this release.
About Campbell Soup Company
Campbell Soup Company is a global manufacturer and marketer of high
quality soup, sauces, beverage, biscuits, confectionery and prepared
food products. The company owns a portfolio of more than 20
market-leading businesses each with more than $100 million in sales.
They include "Campbell's" soups worldwide, "Erasco" soups in Germany
and "Liebig" soups in France, "Pepperidge Farm" cookies and crackers,
"V8" vegetable juices, "V8 Splash" juice beverages, "Pace" Mexican
sauces, "Prego" pasta sauces, "Franco-American" canned pastas and
gravies, "Swanson" broths, "Homepride" sauces in the United Kingdom,
"Arnott's" biscuits in Australia and "Godiva" chocolates around the
world. The company also owns dry soup and sauce businesses in Europe
under the "Batchelors," "Oxo," "Lesieur," "Royco," "Liebig," "Heisse
Tasse," "Bla Band" and "McDonnells" brands. The company is ably
supported by approximately 25,000 employees worldwide. For more
information on the company, visit Campbell's website on the Internet
at www.campbellsoup.com.
CONTACT:
Michelle M. Davidson (Media)
(856) 968-4390
Leonard F. Griehs (Analysts)
(856) 342-6428
-0-
*T
CAMPBELL SOUP COMPANY CONSOLIDATED
STATEMENTS OF EARNINGS (unaudited)
(millions, except per share amounts)
THREE MONTHS ENDED
------------------
January January
26, 2003 27, 2002
-------------- --------------
Net sales $ 1,918 $ 1,810
-------------- --------------
Costs and expenses
Cost of products sold 1,056 1,004
Selling, general and
administrative expenses 477 453
Restructuring charge - 1
-------------- --------------
Total costs and expenses 1,533 1,458
-------------- --------------
Earnings before interest and taxes 385 352
Interest, net 46 45
-------------- --------------
Earnings before taxes 339 307
Taxes on earnings 108 104
-------------- --------------
Net earnings $ 231 $ 203
============== ==============
Per share - basic
Net earnings $ .56 $ .49
============== ==============
Dividends $ .1575 $ .1575
============== ==============
Weighted average shares outstanding -
basic 411 410
============== ==============
Per share - assuming dilution
Net earnings $ .56 $ .49
============== ==============
Weighted average shares outstanding
- assuming dilution 411 411
============== ==============
In the first quarter of fiscal 2003, the company adopted Statement of
Financial Accounting Standards No. 142 "Goodwill and Other Intangible
Assets." In accordance with the standard, the company discontinued
the amortization of goodwill and indefinite-lived intangible assets.
Net earnings for the quarter ended January 27, 2002 would have been
$216 or $.53 per diluted share had the provisions of the standard been
adopted at the beginning of the prior year.
CAMPBELL SOUP COMPANY CONSOLIDATED
STATEMENTS OF EARNINGS (unaudited)
(millions, except per share amounts)
SIX MONTHS ENDED
--------------------------
January January
26, 2003 27, 2002
------------ ------------
Net sales $ 3,623 $ 3,539
------------ ------------
Costs and expenses
Cost of products sold 2,027 1,975
Selling, general and
administrative expenses 881 897
Restructuring charge - 1
------------ ------------
Total costs and expenses 2,908 2,873
------------ ------------
Earnings before interest and taxes 715 666
Interest, net 91 98
------------ ------------
Earnings before taxes 624 568
Taxes on earnings 201 194
------------ ------------
Earnings before cumulative
effect of accounting change 423 374
Cumulative effect of accounting change (31) -
------------ ------------
Net earnings $ 392 $ 374
============ ============
Per share - basic
Earnings before cumulative
effect of accounting change $ 1.03 $ .91
Cumulative effect of accounting change (.08) -
------------ ------------
Net earnings $ .95 $ .91
============ ============
Dividends $ .315 $ .315
============ ============
Weighted average shares outstanding - basic 411 410
============ ============
Per share - assuming dilution
Earnings before cumulative
effect of accounting change $ 1.03 $ .91
Cumulative effect of accounting change (.08) -
------------ ------------
Net earnings $ .95 $ .91
============ ============
Weighted average shares outstanding
- assuming dilution 411 411
============ ============
In the first quarter of fiscal 2003, the company adopted Statement of
Financial Accounting Standards No. 142 "Goodwill and Other Intangible
Assets." In accordance with the standard, the company discontinued
the amortization of goodwill and indefinite-lived intangible assets.
Net earnings for the six months ended January 27, 2002 would have been
$400 or $.97 per diluted share had the provisions of the standard been
adopted at the beginning of the prior year.
In connection with the adoption of this new standard, the company also
recognized a non-cash charge of $31 (net of a $17 tax benefit) as a
cumulative effect of accounting change for the write-down of goodwill
of one business unit in the first quarter of fiscal 2003.
CAMPBELL SOUP COMPANY CONSOLIDATED
SUPPLEMENTAL SCHEDULE OF SALES AND EARNINGS (unaudited)
(millions, except per share amounts)
THREE MONTHS ENDED
------------------
January January Percent
Sales 26, 2003 27, 2002 Change
----- -------- -------- -------
Contributions:
North America Soup and Away
From Home $ 824 $ 812 1%
North America Sauces and
Beverages 318 319 0%
Biscuits and Confectionery 486 428 14%
International Soup and
Sauces 290 251 16%
--------- ---------
Total sales $1,918 $1,810 6%
========= =========
Percent
Change
Excluding
Restructuring
Related
Earnings Costs(1)
-------- -------------
Contributions:
North America Soup and Away
From Home $ 209 $ 218 -4% -4%
North America Sauces and
Beverages 84 70 20% 20%
Biscuits and Confectionery 87 79 10% 5%
International Soup and
Sauces 34 35 -3% -3%
--------- ---------
Total operating earnings 414 402 3% 2%
Unallocated corporate expenses (29) (33)
--------- ---------
Earnings before interest
and taxes 385 369 4% 3%
Interest, net (46) (45)
Taxes on earnings (108) (108)
--------- ---------
Net earnings $ 231 $ 216 7% 5%
========= =========
Net earnings - assuming
dilution $ .56 $ .53 6% 6%
========= =========
Results for the period ended January 27, 2002 have been restated to
reflect the pro forma impact of SFAS No. 142. Amortization expense of
$17 ($13 after tax or $.03 per share) has been eliminated from the
prior period results.
Earnings contributions from Biscuits and Confectionery include the
effect of costs associated with the Australian manufacturing
reconfiguration plan. In the second quarter of fiscal 2002, costs
were $4 pre-tax ($3 after tax).
(1) Percent change is calculated excluding the effects of the
Australian manufacturing reconfiguration plan.
CAMPBELL SOUP COMPANY CONSOLIDATED
SUPPLEMENTAL SCHEDULE OF SALES AND EARNINGS (unaudited)
(millions, except per share amounts)
SIX MONTHS ENDED
------------------
January January Percent
Sales 26, 2003 27, 2002 Change
----- -------- -------- -------
Contributions:
North America Soup and Away
From Home $1,570 $1,618 -3%
North America Sauces and
Beverages 625 632 -1%
Biscuits and Confectionery 896 807 11%
International Soup and
Sauces 532 482 10%
--------- ---------
Total sales $3,623 $3,539 2%
========= =========
Percent
Change
Excluding
Restructuring
Related
Earnings Costs(1)
-------- -------------
Contributions:
North America Soup and Away
From Home $ 414 $ 450 -8% -8%
North America Sauces and
Beverages 161 134 20% 20%
Biscuits and Confectionery 129 116 11% 5%
International Soup and
Sauces 60 64 -6% -6%
--------- ---------
Total operating earnings 764 764 0% -1%
Unallocated corporate expenses (49) (64)
--------- ---------
Earnings before interest
and taxes 715 700 2% 1%
Interest, net (91) (98)
Taxes on earnings (201) (202)
--------- ---------
Earnings before
cumulative effect of
accounting change 423 400 6% 4%
Cumulative effect of
accounting change (31) -
--------- ---------
Net earnings $ 392 $ 400 -2% -3%
========= =========
Net earnings per share before
cumulative effect of
accounting change
- assuming dilution $ 1.03 $ 0.97 6% 4%
========= =========
Results for the period ended January 27, 2002 have been restated to
reflect the pro forma impact of SFAS No. 142. Amortization expense of
$34 ($26 after tax or $.06 per share) has been eliminated from the
prior period results.
Earnings contributions from Biscuits and Confectionery include the
effect of costs associated with the Australian manufacturing
reconfiguration plan. In the six month period ended January 26, 2003,
costs were both $1 pre- and after tax. In the six month period ended
January 27, 2002, costs were $8 pre-tax ($6 after tax).
(1) Percent change is calculated excluding the effects of the
Australian manufacturing reconfiguration plan.
CAMPBELL SOUP COMPANY CONSOLIDATED
BALANCE SHEETS (unaudited)
(millions)
January January
26, 2003 27, 2002
---------- ----------
Current assets $ 1,484 $ 1,420
Plant assets, net 1,757 1,586
Intangible assets, net 2,748 2,408
Other assets 298 635
---------- ----------
Total assets $ 6,287 $ 6,049
========== ==========
Current liabilities $ 3,034 $ 2,888
Long-term debt 2,270 2,354
Nonpension postretirement benefits 314 330
Other liabilities 430 481
Shareowners' equity (deficit) 239 (4)
---------- ----------
Total liabilities and shareowners' equity
(deficit) $ 6,287 $ 6,049
========== ==========
Total debt $ 3,627 $ 3,810
========== ==========
Net debt $ 3,590 $ 3,778
========== ==========
Certain reclassifications were made to prior year financial
statements.
*T
Short Name: Campbell Soup Co.
Category Code: IR
Sequence Number: 00001909
Time of Receipt (offset from UTC): 20030213T115812+0000
--30--RM/ph* CF/ph jgm/in
CONTACT: Campbell Soup Company, Camden
Michelle M. Davidson (Media)
(856) 968-4390
or
Leonard F. Griehs (Analysts)
(856) 342-6428
KEYWORD: NEW JERSEY UNITED KINGDOM INTERNATIONAL EUROPE
INDUSTRY KEYWORD: FOODS/BEVERAGES RETAIL
SOURCE: Campbell Soup Co
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