caret-down

Campbell Reports Fourth Quarter and Fiscal 2002 Results

CAMDEN, N.J., Sep 5, 2002 (BUSINESS WIRE) — Campbell Soup Company (NYSE:CPB)
today reported diluted earnings per share for the fourth quarter ended July 28,
2002 of $.13, even with last year. Before the costs of the previously announced
Australian manufacturing reconfiguration, diluted earnings per share were $.14,
versus $.15 a year ago. Last year’s fourth quarter results included
approximately $.03 dilutive impact from the acquisition of several European dry
soup and sauce businesses.

For the quarter, net sales increased 5 percent to $1,223 million. The following
factors drove the increase: base volume and mix was up 4 percent, price added 1
percent, promotions reduced sales 2 percent, currency added 2 percent. For the
quarter, wet soup shipments compared to a year ago were up 3 percent in the U.S.
and 1 percent outside the U.S., resulting in a 2 percent increase worldwide. As
reported, net earnings were $55 million, an increase of 6 percent versus $52
million a year earlier. Excluding the impact of the Australian reconfiguration,
net earnings for the quarter were $59 million versus $62 million a year ago. The
net earnings decline resulted from planned increases in marketing and
infrastructure investments across major businesses. Total marketing investment
for the quarter was up 17 percent before the impact of currency.

For fiscal 2002, the company reported diluted earnings per share of $1.28. Net
earnings were $525 million. Excluding costs associated with the Australian
manufacturing reconfiguration, diluted earnings per share were $1.31, compared
to $1.58 for the prior year. The earnings decrease was directly related to
planned increases in marketing and infrastructure investment in support of the
company’s multi-year Transformation Plan. Net sales for the year increased 6
percent to $6,133 million. The following factors drove the increase:


    —  The European acquisition contributed 4 percentage points to
this growth.
— Volume and mix was up 2 percent
— Price added 1 percent
— Promotions reduced sales 1 percent
— Currency had no impact

Worldwide wet soup shipments increased 1 percent, with soup outside the U.S. up
2 percent and U.S. wet soup shipments up 1 percent. For the year, ready-to-serve
soup shipments rose 9 percent, while condensed soup shipments declined 5
percent. In line with previously announced plans, total marketing spending was
up 15 percent before the impact of currency and the European acquisition, and up
20 percent including the European acquisition. In addition, the company reported
another year of strong free cash flow of $748 million.

Douglas R. Conant, Campbell’s President and Chief Executive Officer, said, “We
have made substantial progress in the first year of our Transformation Plan. We
significantly increased our investment in marketing and infrastructure to put
Campbell back on track. These marketing investments produced solid growth in
many of our businesses, including ready-to-serve soups, ‘V8’ vegetable juices,
‘Prego’ pasta sauces, ‘Pace’ Mexican sauces, ‘Arnott’s’ biscuits and ‘Pepperidge
Farm’ cookies and breads. We recognize that the increased marketing efforts
against our condensed soup business had limited impact. However, it’s important
to note that we are only now realizing the first of many planned
technology-driven product and package improvements in condensed soup. Overall,
we significantly advanced our quality improvement agenda and we delivered strong
productivity gains. In sum, we promised that we would take significant steps to
build a platform to support profitable growth – and we have.”

Conant continued, “As we enter the second year of our Transformation Plan, our
business is poised for growth, but not yet at the levels to which we aspire.
While we expect solid sales growth in fiscal 2003, we will continue to invest
for the long term in brand-building, innovation, quality and infrastructure.”

For fiscal year 2003, the company expects earnings per share to be approximately
$1.35, excluding the impact of adopting new accounting rules related to goodwill
and other intangible assets. Under these rules, amortization of these assets
will cease. The company is continuing to evaluate the impact of the new
accounting rules and expects that the adoption will result in an increase in
earnings per share of approximately $.12 to $.13 annually. For the first
quarter, given the unusual events of the first quarter last year, notably the
impact of September 11, the company expects earnings to be flat compared with
last year, excluding the impact of new accounting rules related to goodwill and
other intangible assets.


    A summary of fiscal 2002 results by segment follows:
North America Soup and Away From Home

Sales of $2,524 million were flat compared with a year ago. Operating earnings
of $624 million were down 19 percent, reflecting increased marketing and
infrastructure investments.

For the year, as previously noted, U.S. soup shipments were up 1 percent.
Further details include:


    —  Ready-to-serve soup shipments increased 9 percent behind
continued excellent performance by Campbell’s “Chunky” and
“Select” soups. New varieties, quality improvements and strong
advertising drove the performance of these brands.
— “Swanson” broth shipments were up 4 percent as the new Pop N’
Pour lids, new package sizes and product improvements proved
to be a hit with consumers.
— Condensed soups declined 5 percent for the year. In the fourth
quarter, the company began shipping ten improved condensed
vegetable varieties as well as two new “Goldfish” soups.
— New “Soup At Hand” is now on shelf. This ready-to-serve soup,
designed for out-of-home consumption, will receive significant
marketing support in fiscal 2003.
— Away From Home sales were up slightly versus a year ago, led
by strong soup sales in chain accounts and traditional
foodservice outlets, which offset a decline in lower margin
bakery and frozen entree sales.
— Canadian sales were ahead of a year ago led by soup shipments,
in response to increased marketing investment in core
businesses. The Canadian business had a strong year on the top
line driven by all businesses in its portfolio.
North America Sauces and Beverages

Sales were up 2 percent to $1,182 million, behind strong sales of “Prego” Pasta
Bake sauces, “Pace” Mexican sauces and “V8” vegetable juices, partially offset
by a sales decline in “V8 Splash” juice drinks. Operating profits declined 20
percent to $236 million. The earnings decline was primarily the result of
planned marketing increases behind the “Prego” franchise, “Pace” Mexican sauces
and “V8” vegetable juices.


    —  “Prego” Pasta Bake sauces delivered growth in the “Prego”
franchise.
— “Pace” Mexican sauces shipments increased behind focused
marketing in the brand’s core Southwest market.
— “V8” vegetable juice shipments were up, responding positively
to increased advertising and more effective marketing.
Biscuits and Confectionery

Sales increased 4 percent to $1,507 million; before the impact of currency,
sales grew 5 percent. Sales were up in all three businesses – Arnotts in
Australia, Pepperidge Farm and Godiva Chocolatier. Excluding the impact of the
Australian reconfiguration, earnings declined 8 percent to $195 million. These
results were driven by planned marketing and infrastructure investments.


    —  Pepperidge Farm delivered strong sales performance across its
biscuit, bakery and frozen segments. In biscuits, the
introduction of “Goldfish” Sandwich Crackers, as well as
strong sales of “Milano” cookies and “Goldfish” crackers, were
the primary drivers of growth. Bakery sales increased
primarily due to new varieties and increased distribution of
“Farmhouse” bread and rolls. New varieties of Pepperidge Farm
“Texas Toast” frozen bread delivered strong sales results in
the frozen category.
— At Arnotts, sales were up on the strength of snack foods and
biscuits. Value-added products in the snack foods category,
such as “Rix” Rice Chips and “Kettle” Chips helped drive
results. “Tim Tam” biscuit sales were also up significantly in
both Australia and Indonesia.
— Godiva Chocolatier’s worldwide sales were up slightly, as
additional sales from new stores were offset by lower same
store sales in a weak North American retail environment.
International Soup and Sauces

International Soup and Sauces sales increased 46 percent to $920 million
compared to $632 million a year ago. Operating earnings increased to $92 million
compared to $51 million a year ago. These results were driven by the European
acquisition, which was completed May 4, 2001. Sales on the base business were
down 1 percent and operating earnings declined significantly. These results were
due to sales softness in the United Kingdom business and increases in marketing
and infrastructure investments to support long-term growth. The recently
acquired European dry soup and sauces business continues to meet sales and
earnings expectations.


    —  Weakness in the UK in both soup and sauces offset gains in
soup sales in Belgium and France.
— In Australia, Campbell’s wet soup share continued to rise, as
new product launches under the “Country Ladle,” “Chunky” and
“Velish” brands proved successful. Campbell’s “Real Stock”
broth sales were also up significantly.
Accounting Change

In the first quarter, the company adopted new accounting standards related to
the recognition, measurement and income statement classification of certain
consumer and trade promotional expenses, such as coupon redemption costs,
cooperative advertising programs and in-store display incentives. As a result,
the following reclassifications were made to the fourth quarter and fiscal 2001
financial statements: net sales were reduced by $166 million and $893 million,
respectively; cost of products sold was reduced by $4 million and $14 million,
respectively; and selling, general and administrative expenses were reduced by
$162 million and $879 million, respectively.


    Conference Call

The company will host a conference call to discuss these results on September 5,
2002 at 8:30 a.m. Eastern Standard Time. U.S. participants may access the call
at 1-888-282-1678 and non-U.S. participants at 1-630-395-0481. Participants
should call at least five minutes prior to the starting time. The passcode is
Campbell Soup. 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
September 9, 2002 at 1-800-759-1940 or 1-402-998-0471.

    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 marketing investments 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 24,000 employees worldwide. For more
information on the company, visit Campbell’s website on the Internet at
www.campbellsoup.com.

CONTACT: Jerry S. Buckley (Media)
856/342-6007
Leonard F. Griehs (Analysts)
856/342-6428

                  CAMPBELL SOUP COMPANY CONSOLIDATED
STATEMENTS OF EARNINGS
(millions, except per share amounts)
THREE MONTHS ENDED
——————
July July
28, 2002 29, 2001
——– ——–
Net sales $1,223 $1,164
——– ——–
Costs and expenses
Cost of products sold 686 646
Selling, general and
administrative expenses 409 374
Restructuring charge – 10
——– ——–
Total costs and expenses 1,095 1,030
——– ——–
Earnings before interest and taxes 128 134
Interest, net 44 54
——– ——–
Earnings before taxes 84 80
Taxes on earnings 29 28
——– ——–
Net earnings $ 55 $ 52
======== ========
Per share – basic
Net earnings $ .13 $ .13
======== ========
Dividends $.1575 $ .225
======== ========
Weighted average shares outstanding – basic 411 410
======== ========
Per share – assuming dilution
Net earnings $ .13 $ .13
======== ========
Weighted average shares outstanding
– assuming dilution 411 411
======== ========
In fiscal 2002, the company adopted new accounting standards related
to the recognition, measurement and income statement classification of
certain consumer and trade promotional expenses, such as coupon
redemption costs, cooperative advertising programs and in-store
display incentives. As a result, the following reclassifications were
made to the three month period ended July 29, 2001, statement of
earnings: Net sales were reduced by $166; Cost of products sold was
reduced by $4; and Selling, general and administrative expenses were
reduced by $162.
CAMPBELL SOUP COMPANY CONSOLIDATED
STATEMENTS OF EARNINGS
(millions, except per share amounts)
TWELVE MONTHS ENDED
——————-
July July
28, 2002 29, 2001
——– ——–
Net sales $6,133 $5,771
——– ——–
Costs and expenses
Cost of products sold 3,443 3,132
Selling, general and
administrative expenses 1,705 1,435
Restructuring charge 1 10
——– ——–
Total costs and expenses 5,149 4,577
——– ——–
Earnings before interest and taxes 984 1,194
Interest, net 186 207
——– ——–
Earnings before taxes 798 987
Taxes on earnings 273 338
——– ——–
Net earnings $ 525 $ 649
======== ========
Per share – basic
Net earnings $ 1.28 $ 1.57
======== ========
Dividends $ .63 $ .90
======== ========
Weighted average shares outstanding – basic 410 414
======== ========
Per share – assuming dilution
Net earnings $ 1.28 $ 1.55
======== ========
Weighted average shares outstanding
– assuming dilution 411 418
======== ========
In fiscal 2002, the company adopted new accounting standards related
to the recognition, measurement and income statement classification of
certain consumer and trade promotional expenses, such as coupon
redemption costs, cooperative advertising programs and in-store
display incentives. As a result, the following reclassifications were
made to the twelve month period ended July 29, 2001, statement of
earnings: Net sales were reduced by $893; Cost of products sold was
reduced by $14; and Selling, general and administrative expenses were
reduced by $879.
CAMPBELL SOUP COMPANY CONSOLIDATED
SUPPLEMENTAL SCHEDULE OF SALES AND EARNINGS
(millions, except per share amounts)
THREE MONTHS ENDED
——————
Sales July July Percent
—– 28, 2002 29, 2001 Change
——– ——– ——-
Contributions:
North America Soup
and Away From Home $ 390 $ 394 -1%
North America Sauces
and Beverages 274 270 1%
Biscuits and Confectionery 343 313 10%
International Soup and Sauces 216 187 16%
—— ——
Total sales $1,223 $1,164 5%
====== ======
Percent
Change
Excluding
Restructuring
Related
Costs (1)
Earnings ————-
——–
Contributions:
North America Soup
and Away From Home $ 71 $ 90 -21% -21%
North America Sauces
and Beverages 56 62 -10% -10%
Biscuits and Confectionery 25 20 25% -9%
International Soup and Sauces 22 4 450% 450%
—— ——
Total operating earnings 174 176 -1% -5%
Unallocated corporate expenses (46) (42)
—— ——
Earnings before interest
and taxes 128 134 -4% -9%
Interest, net (44) (54)
Taxes on earnings (29) (28)
—— ——
Net earnings $ 55 $ 52 6% -5%
====== ======
Net earnings per share
– assuming dilution $ .13 $ .13 0% -7%
====== ======
In fiscal 2002, the company adopted new accounting standards related
to the recognition, measurement and income statement classification of
certain consumer and trade promotional expenses, such as coupon
redemption costs, cooperative advertising programs and in-store
display incentives. As a result, the following reclassifications were
made to the three month period ended July 29, 2001, statement of
earnings: Net sales were reduced by $166; Cost of products sold was
reduced by $4; and Selling, general and administrative expenses were
reduced by $162.
Earnings contributions from Biscuits and Confectionery include the
effect of costs associated with the Australian manufacturing
reconfiguration plan. In fiscal 2002, costs were $6 pre-tax ($4 after
tax or $.01 per share, basic and diluted). In fiscal 2001, costs were
$14 pre-tax ($10 after tax or $.02 per share, basic and diluted).
(1) Percent change is calculated excluding the effect of the
Australian manufacturing reconfiguration costs.
CAMPBELL SOUP COMPANY CONSOLIDATED
SUPPLEMENTAL SCHEDULE OF SALES AND EARNINGS
(millions, except per share amounts)
TWELVE MONTHS ENDED
——————-
July July Percent
Sales 28, 2002 29, 2001 Change
—– ——– ——– ——-
Contributions:
North America Soup
and Away From Home $2,524 $2,532 0%
North America Sauces
and Beverages 1,182 1,161 2%
Biscuits and Confectionery 1,507 1,446 4%
International Soup and Sauces 920 632 46%
—— ——
Total sales $6,133 $5,771 6%
====== ======
Percent
Change
Excluding
Restructuring
Earnings Related
——– Costs (1)
Contributions: ————-
North America Soup
and Away From Home $ 624 $ 774 -19% -19%
North America Sauces
and Beverages 236 295 -20% -20%
Biscuits and Confectionery 175 197 -11% -8%
International Soup and Sauces 92 51 80% 80%
—— ——
Total operating earnings 1,127 1,317 -14% -14%
Unallocated corporate expenses (143) (123)
—— ——
Earnings before interest
and taxes 984 1,194 -18% -17%
Interest, net (186) (207)
Taxes on earnings (273) (338)
—— ——
Net earnings $ 525 $ 649 -19% -18%
====== ======
Net earnings per share
– assuming dilution $ 1.28 $ 1.55 -17% -17%
====== ======
In fiscal 2002, the company adopted new accounting standards
related to the recognition, measurement and income statement
classification of certain consumer and trade promotional expenses,
such as coupon redemption costs, cooperative advertising programs and
in-store display incentives. As a result, the following
reclassifications were made to the twelve month period ended July 29,
2001, statement of earnings: Net sales were reduced by $893; Cost of
products sold was reduced by $14; and Selling, general and
administrative expenses were reduced by $879.
Earnings contributions from Biscuits and Confectionery include the
effect of costs associated with the Australian manufacturing
reconfiguration plan. In fiscal 2002, costs were $20 pre-tax ($14
after tax or $.03 per share, basic and diluted). In fiscal 2001, costs
were $15 pre-tax ($11 after tax or $.03 per share, basic and diluted).
(1) Percent change is calculated excluding the effect of the
Australian manufacturing reconfiguration costs.
CAMPBELL SOUP COMPANY CONSOLIDATED
BALANCE SHEETS
(millions)
July July
28, 2002 29, 2001
——– ——–
Current assets $1,199 $1,203
Plant assets, net 1,684 1,637
Intangible assets, net 2,503 2,451
Other assets 335 636
——– ——–
Total assets $5,721 $5,927
======== ========
Current liabilities $2,678 $3,120
Long-term debt 2,449 2,243
Nonpension postretirement benefits 319 336
Other liabilities 389 475
Shareowners’ equity (114) (247)
——– ——–
Total liabilities and shareowners’ equity $5,721 $5,927
======== ========
Total debt $3,645 $4,049
======== ========
Net debt $3,624 $4,025
======== ========
Certain reclassifcations were made to prior year financial statements.

CONTACT:          Campbell Soup Company
Jerry S. Buckley (Media)
856/342-6007
or
Leonard F. Griehs (Analysts)
856/342-6428