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
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
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
— “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
— 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
— 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
Conference Call
Forward-Looking Statements
About Campbell Soup Company
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
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