CAMDEN, N.J.–(BUSINESS WIRE)–Sept. 13, 2004–Campbell Soup
Company (NYSE:CPB) today reported diluted earnings per share for the
fourth quarter ended August 1, 2004 of $.14, compared to $.18 recorded
in the year-ago quarter. Comparability of earnings per share in the
quarter was impacted by a gain of $.02 related to the sale of an idle
manufacturing plant in California and a charge of $.05 related to the
restructuring announced in June. Excluding these two items, earnings
were $.17 per share.
For the quarter, net sales decreased 2 percent to $1,433 million,
reflecting the following factors:
-- Volume and mix added 4 percent
-- Price added 1 percent
-- Increased promotional spending subtracted 2 percent
-- Currency added 2 percent
-- One less week in the quarter subtracted 7 percent
Excluding the impact of one less week in the quarter compared to
fiscal 2003, net sales were up 5 percent.
Net earnings for the fourth quarter of fiscal 2004 were $59
million versus $74 million a year earlier. This year’s fourth quarter
includes a $6 million after-tax gain from the sale of the idle
manufacturing site and a $22 million after-tax charge related to the
restructuring announced by the company in June.
For the fiscal 2004 year, the company reported diluted earnings
per share of $1.57 compared to $1.52 for the prior year, before the
cumulative effect of accounting change. In fiscal 2004, comparability
of net earnings was impacted by a $.02 per share gain from the
settlement of a class action suit, a $.02 per share gain from the sale
of property, and a $.05 per share charge for restructuring. Excluding
these items, earnings were $1.58 per share.
For the year, net sales increased 6 percent to $7,109 million,
reflecting the following factors:
-- Volume and mix added 2 percent
-- Price added 2 percent
-- Currency added 4 percent
-- One less week in the fiscal year subtracted 2 percent
Excluding the impact of one less week in the year compared to
fiscal 2003, net sales were up 8 percent.
Net earnings for fiscal 2004 were $647 million versus $626 million
for the prior year, before the cumulative effect of accounting change.
In fiscal 2004, net earnings included a $10 million after-tax gain
associated with the class action suit, a $6 million after-tax gain
from the sale of property, and a $22 million after-tax charge for the
restructuring.
In addition, the company reported cash flow from operations of
$744 million compared with $873 million last year. This decline was
primarily due to higher working capital requirements of approximately
$150 million and a $50 million contribution to a U.S. pension fund,
partially offset by an increase in earnings. Capital expenditures for
fiscal 2004 were $288 million, slightly higher than the $283 million
of a year ago.
Douglas R. Conant, Campbell’s President and Chief Executive
Officer, said, “Our sales on a comparable basis in the fourth quarter
of fiscal 2004 were strong and we have good momentum as we begin the
new fiscal year. We have demonstrated that we can grow the top line
across our key segments, including soup, beverages, biscuits and
confectionery. As anticipated, in the U.S. our investment this year in
quality, convenience packaging, and more focused marketing helped us
to maintain substantial growth in our ready-to-serve soup business and
to moderate the decline in condensed soup sales.”
Conant continued, “The restructuring we announced in June will
enable us to achieve tighter control of costs and will help to improve
margins. While we still have challenges to address, our plans to
deliver quality growth will enable us to win with our customers and
consumers in 2005 and beyond.”
For fiscal year 2005, the company expects earnings per share to
increase between 5 and 7 percent, excluding restructuring charges,
from the adjusted fiscal year 2004 base of $1.58.
Summary of Fiscal 2004 Results by Segment
North America Soup and Away From Home
Sales for North America Soup and Away From Home were $2,699
million, a 4 percent increase compared with a year ago. A breakdown of
the change in sales follows:
-- Volume and mix added 1 percent
-- Price added 3 percent
-- Increased promotional spending subtracted 1 percent
-- Currency added 2 percent
-- One less week in the fiscal year subtracted 1 percent
Excluding the impact of one less week in the year, net sales rose
5 percent compared to fiscal 2003.
Further details of sales results include the following:
-- U.S. ready-to-serve soup sales for fiscal 2004 increased 8
percent on a shipment increase of 6 percent. Investments in
higher quality products, convenience packaging and integrated
marketing are driving top line growth. The "M'm! M'm! Good! To
Go" convenience platform was the primary driver of sales
growth. This includes Campbell's "Soup At Hand" sippable
soups, which more than doubled sales versus a year ago, as
well as "Campbell's Chunky" and "Campbell's Select" soups in
microwavable bowls.
-- U.S. condensed soup sales declined 2 percent for the year on
shipment declines of 4 percent. "Campbell's" condensed eating
soups grew sales, led by "Campbell's" Chicken Noodle soup,
which delivered strong performance driven by an integrated
kids marketing program. This growth was offset by declines in
cooking soups. Fiscal 2004 saw substantial progress in the
installation of new gravity-feed shelving for condensed soup.
Over 8,700 units are now installed, and plans call for an
additional 2,300 units to be in place this fall.
-- U.S. broth sales increased 6 percent, while shipments
increased 5 percent, with gains in both cans and aseptically
packaged "Swanson" broth.
-- For the balance of the segment, sales in Canada increased due
to currency, while Away From Home sales grew slightly,
primarily due to strong sales of refrigerated soups.
For fiscal 2004, operating earnings of $602 million were down 5
percent compared to the previous year. This decline included a $7
million restructuring charge, which negatively impacted earnings by 1
percent. Earnings were also negatively impacted by costs associated
with quality improvements, higher inflation, trade promotion, and
product mix. These were partially offset by higher selling prices and
productivity improvements.
North America Sauces and Beverages
North America Sauces and Beverages sales were even with last year
at $1,246 million. A breakdown of the change in sales follows:
-- Volume and mix added 1 percent
-- Reduced promotional spending added 1 percent
-- One less week in the fiscal year subtracted 2 percent
Excluding the impact of one less week in the year, net sales rose
2 percent compared to fiscal 2003.
Further details of sales results include the following:
-- Campbell's beverage businesses had an outstanding year, led by
sales growth of "V8" vegetable juice. Stronger advertising,
more efficient trade spending, and favorable consumer trends
toward wellness enabled "V8" vegetable juice to achieve record
sales levels. "Campbell's" Organic Tomato Juice was launched
as the company's first certified organic product.
-- "Prego" pasta sauce sales declined primarily due to the impact
of lower sales in the dry pasta category. Performance improved
in the second half of the year.
-- "Pace" Mexican sauces were even with the previous year.
-- Mexico achieved good sales growth.
For fiscal 2004, operating earnings of $268 million were down 7
percent compared to the previous year. The decline in operating
earnings included a restructuring charge of $3 million, which accounts
for 1 percent of the decrease. Other factors in the decline included
higher costs associated with new product introductions and inflation,
partially offset by productivity improvements.
Biscuits and Confectionery
Sales for Biscuits and Confectionery were $1,982 million, a 12
percent increase compared with a year ago. A breakdown of the change
in sales follows:
-- Volume and mix added 4 percent
-- Price added 2 percent
-- Increased promotional spending subtracted 1 percent
-- Acquisitions added 2 percent
-- Currency added 7 percent
-- One less week in the fiscal year subtracted 2 percent
Excluding the impact of one less week in the year, net sales rose
14 percent compared to fiscal 2003.
Further details of sales results include the following:
-- The Pepperidge Farm "Goldfish" snacks business continued its
strong growth driven by gains in mass merchandisers and the
introduction of new varieties, including new "Goldfish"
sandwich snackers and trans-fat free "Goldfish" Crisps. The
Mini Distinctive cookie varieties, which include mini "Milano"
and "Nantucket" cookies, were successfully launched. Fresh
bread sales also increased primarily due to the introduction
of "Pepperidge Farm" Carb Style breads and rolls, as well as
good growth in the sales of bagels and English muffins.
-- Arnott's delivered strong sales results driven by improved
performance in biscuits. The Australian Snackfoods business,
behind strong incremental marketing investment, improved
marketplace performance in a highly competitive environment.
-- Godiva Chocolatier's worldwide sales improved, driven by solid
growth in North American retail same store sales and increased
sales in duty free stores.
For fiscal 2004, operating earnings increased 2 percent to $216
million, with currency translation accounting for 8 percentage points
of the growth. Operating earnings included a $12 million restructuring
charge, which negatively impacted earnings growth by 6 percentage
points. Earnings growth at Pepperidge Farm, Arnott’s, and Godiva was
offset by a decline in earnings in the Australian Snackfoods business.
International Soup and Sauces
International Soup and Sauces sales were $1,182 million, an
increase of 12 percent compared to a year ago. A breakdown of the
change in sales follows:
-- Volume and mix added 2 percent
-- Currency added 12 percent
-- One less week in the fiscal year subtracted 2 percent
Excluding the impact of one less week in the year, net sales rose
14 percent compared to fiscal 2003.
Further details of sales results include the following:
-- Sales gains were achieved in France, Belgium and the Asia
Pacific region, partially offset by sales declines in the U.K.
and Germany.
-- In the U.K., "Batchelors Cup-A-Soup" dry soup and "Batchelors
Supernoodles" ramen noodles achieved good growth, which was
more than offset by declines in wet soups and sauces.
-- In Europe, aseptically packaged soups, sold under the "Liebig"
brand in France and the "Campbell's" brand in Belgium,
achieved good growth.
-- In Asia Pacific, soups had strong sales growth driven by
increased volume in Australia, with strong performances by
both Campbell's "Country Ladle" and "Chunky" brands.
For fiscal 2004, operating earnings increased 5 percent to $135
million. Operating earnings included restructuring charges of $9
million, which negatively impacted earnings growth by 7 percentage
points. The remaining change in earnings is primarily due to favorable
currency translation.
Non-GAAP Financial Information
This release presents Campbell’s reported financial results. In
discussing these results, this release also refers to certain non-GAAP
financial measures. As required by the SEC, the company has provided a
reconciliation of those measures to the most directly comparable GAAP
measures with this release and on the company’s website at
www.campbellsoupcompany.com in the “Investor Center” section.
Conference Call
The company will host a conference call to discuss these results
on September 13, 2004 at 10:00 a.m. Eastern Standard Time. U.S.
participants may access the call at 1-888-791-6044 and non-U.S.
participants at 1-517-308-9004. 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 www.campbellsoupcompany.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 17, 2004 at 1-800-964-3292 or 1-402-998-1011.
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, cost-saving
initiatives and quality improvement on sales, earnings and margins.
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, sauce, beverage, biscuit, confectionery and
prepared food products. The Company is 135 years old, with over $7
billion in annual sales and a portfolio of more than 20 market-leading
brands. In North America, leading brands include “Campbell’s” soups,
“Swanson” broths, “Pepperidge Farm” cookies, crackers, breads and
frozen products, “V8” vegetable juices, “V8 Splash” juice beverages,
“Pace” Mexican sauces, and “Prego” pasta sauces. In Europe, leading
brands include “Erasco” soups in Germany and “Liebig” soups in France,
and several dry soup and sauce brands: “Batchelors,” “Oxo,” “Lesieur,”
“Royco,” “Liebig,” “Heisse Tasse,” “Bla Band,” “Erin,” and
“McDonnells.” Additional European brands include “Homepride” sauces
and “Fray Bentos” canned meats in the United Kingdom, and “Devos
Lemmens” mayonnaise and cold sauces in Belgium and France. In the Asia
Pacific region, the company markets “Arnott’s” biscuits, “Campbell’s”
soups, and “Swanson” broths. “Godiva” chocolates are sold around the
world. Approximately 25,000 employees ably support the company around
the world. For more information on the company, visit Campbell’s
website on the Internet at www.campbellsoupcompany.com.
CAMPBELL SOUP COMPANY CONSOLIDATED
STATEMENTS OF EARNINGS
(millions, except per share amounts)
THREE MONTHS ENDED
------------------
August 1, August 3,
2004 2003
------------- -------------
Net sales $ 1,433 $ 1,455
------------- -------------
Costs and expenses
Cost of products sold 872 858
Marketing and selling expenses 242 278
Administrative expenses 142 128
Research and development expenses 28 25
Other(income)/expenses (12) 11
Restructuring charge 32 -
------------- -------------
Total costs and expenses 1,304 1,300
------------- -------------
Earnings before interest and taxes 129 155
Interest, net 43 45
------------- -------------
Earnings before taxes 86 110
Taxes on earnings 27 36
------------- -------------
Net earnings $ 59 $ 74
============= =============
Per share - basic
Net earnings $ .14 $ .18
============= =============
Dividends $ .1575 $ .1575
============= =============
Weighted average shares outstanding
- basic 409 411
============= =============
Per share - assuming dilution
Net earnings $ .14 $ .18
============= =============
Weighted average shares outstanding
- assuming dilution 412 411
============= =============
The period ended August 1, 2004 had 13 weeks. The period ended
August 3, 2003 had 14 weeks.
CAMPBELL SOUP COMPANY CONSOLIDATED
STATEMENTS OF EARNINGS
(millions, except per share amounts)
TWELVE MONTHS ENDED
-------------------
August 1, August 3,
2004 2003
------------- -------------
Net sales $ 7,109 $ 6,678
------------- -------------
Costs and expenses
Cost of products sold 4,187 3,805
Marketing and selling expenses 1,153 1,145
Administrative expenses 542 507
Research and development expenses 93 88
Other(income)/expenses (13) 28
Restructuring charge 32 -
------------- -------------
Total costs and expenses 5,994 5,573
------------- -------------
Earnings before interest and taxes 1,115 1,105
Interest, net 168 181
------------- -------------
Earnings before taxes 947 924
Taxes on earnings 300 298
------------- -------------
Earnings before cumulative
effect of accounting change 647 626
Cumulative effect of accounting change - (31)
------------- -------------
Net earnings $ 647 $ 595
============= =============
Per share - basic
Earnings before cumulative
effect of accounting change $ 1.58 $ 1.52
Cumulative effect of accounting change - (.08)
------------- -------------
Net earnings $ 1.58 $ 1.45
============= =============
Dividends $ .63 $ .63
============= =============
Weighted average shares outstanding
- basic 409 411
============= =============
Per share - assuming dilution
Earnings before cumulative
effect of accounting change $ 1.57 $ 1.52
Cumulative effect of accounting change - (.08)
------------- -------------
Net earnings $ 1.57 $ 1.45
============= =============
Weighted average shares outstanding
- assuming dilution 412 411
============= =============
In connection with the adoption of Statement of Financial Accounting
Standards No. 142 "Goodwill and Other Intangible Assets," the company
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.
Fiscal 2004 had 52 weeks. Fiscal 2003 had 53 weeks.
CAMPBELL SOUP COMPANY CONSOLIDATED
SUPPLEMENTAL SCHEDULE OF SALES AND EARNINGS
(millions, except per share amounts)
THREE MONTHS ENDED
------------------
August 1, August 3, Percent
Sales 2004 2003 Change
----- --------- --------- -------
Contributions:
North America Soup and Away
From Home $422 $436 -3%
North America Sauces and
Beverages 294 326 -10%
Biscuits and Confectionery 460 444 4%
International Soup and
Sauces 257 249 3%
--------- ---------
Total sales $1,433 $1,455 -2%
========= =========
Earnings
--------
Contributions:
North America Soup and Away
From Home $48 $71 -32%
North America Sauces and
Beverages 52 69 -25%
Biscuits and Confectionery 43 45 -4%
International Soup and
Sauces 23 31 -26%
--------- ---------
Total operating earnings 166 216 -23%
Unallocated corporate expenses (37) (61)
--------- ---------
Earnings before interest
and taxes 129 155 -17%
Interest, net (43) (45)
Taxes on earnings (27) (36)
--------- ---------
Net earnings $59 $74 -20%
========= =========
Net earnings per share -
assuming dilution $.14 $.18 -22%
========= =========
Earnings contributions by segment include the effect of a fourth
quarter 2004 restructuring charge of $32 pre-tax ($22 after tax or
$.05 per share) as follows: North America Soup and Away From Home $7,
North America Sauces and Beverages $3, Biscuits and Confectionery $12,
International Soup and Sauces $9 and Corporate Unallocated $1.
The period ended August 1, 2004 had 13 weeks. The period ended
August 3, 2003 had 14 weeks.
CAMPBELL SOUP COMPANY CONSOLIDATED
SUPPLEMENTAL SCHEDULE OF SALES AND EARNINGS
(millions, except per share amounts)
TWELVE MONTHS ENDED
-------------------
August 1, August 3, Percent
Sales 2004 2003 Change
----- --------- --------- -------
Contributions:
North America Soup and Away
From Home $ 2,699 $ 2,606 4%
North America Sauces and
Beverages 1,246 1,246 0%
Biscuits and Confectionery 1,982 1,774 12%
International Soup and
Sauces 1,182 1,052 12%
--------- ---------
Total sales $ 7,109 $ 6,678 6%
========= =========
Earnings
--------
Contributions:
North America Soup and Away
From Home $ 602 $ 632 -5%
North America Sauces and
Beverages 268 289 -7%
Biscuits and Confectionery 216 212 2%
International Soup and
Sauces 135 128 5%
--------- ---------
Total operating earnings 1,221 1,261 -3%
Unallocated corporate expenses (106) (156)
--------- ---------
Earnings before interest and
taxes 1,115 1,105 1%
Interest, net (168) (181)
Taxes on earnings (300) (298)
--------- ---------
Earnings before cumulative
effect of accounting
change 647 626 3%
Cumulative effect of
accounting change - (31)
--------- ---------
Net earnings $ 647 $ 595 9%
========= =========
Net earnings per share before
cumulative effect of
accounting change
- assuming dilution $ 1.57 $ 1.52 3%
========= =========
In connection with the adoption of SFAS No. 142, the company
recognized a non-cash charge of $31 (net of a $17 tax benefit), or
$.08 per share, as a cumulative effect of accounting change for the
write-down of goodwill of one business unit in the first quarter of
fiscal 2003.
Earnings contributions by segment include the effect of a fourth
quarter 2004 restructuring charge of $32 pre-tax ($22 after tax or
$.05 per share) as follows: North America Soup and Away From Home $7,
North America Sauces and Beverages $3, Biscuits and Confectionery $12,
International Soup and Sauces $9 and Corporate Unallocated $1.
Fiscal 2004 had 52 weeks. Fiscal 2003 had 53 weeks.
CAMPBELL SOUP COMPANY CONSOLIDATED
BALANCE SHEETS
(millions)
August 1, August 3,
2004 2003
---------- ----------
Current assets $ 1,481 $ 1,290
Plant assets, net 1,901 1,843
Intangible assets, net 2,995 2,821
Other assets 298 251
---------- ----------
Total assets $ 6,675 $ 6,205
========== ==========
Current liabilities $ 2,339 $ 2,783
Long-term debt 2,543 2,249
Nonpension postretirement benefits 298 304
Other liabilities 621 482
Shareowners' equity 874 387
---------- ----------
Total liabilities and shareowners' equity $ 6,675 $ 6,205
========== ==========
Total debt $ 3,353 $ 3,528
========== ==========
Cash and cash equivalents $ 32 $ 32
========== ==========
Reconciliation of GAAP and Non-GAAP Financial Measures, as
reported in the Campbell Soup Company earnings release of September
13, 2004
The company uses certain “non-GAAP” financial measures as defined
by the Securities and Exchange Commission in certain communications.
The “non-GAAP” financial measures are measures of performance not
defined by accounting principles generally accepted in the United
States and should be considered in addition to, not in lieu of, GAAP
reported measures. The items include the following:
-- Earnings per share (EPS) before the cumulative effect of
accounting change, excluding restructuring related costs and
one-time items
-- EPS annual growth rates excluding restructuring related costs
and one-time items
-- Organic sales growth
The table below reconciles earnings per share before the
cumulative effect of accounting change, presented in accordance with
GAAP, to earnings per share excluding restructuring related costs and
other one-time items.
Fourth Quarter Fiscal Year
-------------------------- --------------------------
August 1, August 3, % August 1, August 3, %
2004 2003 Change 2004 2003 Change
---- ---- ------ ---- ---- ------
As reported
earnings per
share before
the cumulative
effect of
accounting
change $ 0.14 $ 0.18 (22)% $ 1.57 $ 1.52 3%
Add:
Restructuring
related
costs (1) 0.05 - 0.05 -
Deduct:
Gain on
litigation
settlement (2) - - (0.02) -
Gain on sale
of
property (3) (0.02) - (0.02) -
--------- --------- --------- ---------
Earnings per
share before
the cumulative
effect of
accounting
change,
excluding
restructuring
related costs
and one-time
items $ 0.17 $ 0.18 (6)% $ 1.58 $ 1.52 4%
========= ========= ====== ========= ========= ======
(1) The 2004 costs relate to the worldwide cost savings
initiatives and Australian distribution and logistics
realignment announced on June 24.
(2) The gain relates to the settlement of a class-action lawsuit
involving ingredient suppliers.
(3) The gain relates to the sale of an idle facility in
California.
The company believes that earnings per share excluding certain
restructuring related costs and certain other transactions not
considered to be part of the ongoing business are a better indicator
of the true performance of the business. Consequently, the company
believes that investors may be able to better understand earnings if
these transactions are excluded from the results.
The company refers to sales growth rates adjusting for currency,
acquisitions and divestitures and the extra week in a 53 week fiscal
year to present the results without the impact of these items, all of
which can make it more difficult for investors to understand our
underlying business trend. The company refers to sales growth
excluding currency, acquisitions and divestitures, and the 53rd week
as organic growth. Management believes that this measure provides
useful comparisons of period-to-period results.
Components of the change in sales are as follows:
Fourth Quarter Fiscal Year
------------------- -------------------
August 1, August 3, August 1, August 3,
2004 2003 2004 2003
--------- --------- --------- ---------
Volume and mix 4% (2)% 2% 1%
Price 1 2 2 1
Trade and consumer promotions (2) 3 - -
--------- --------- --------- ---------
Organic growth 3% 3% 4% 2%
Acquisitions - 3 - 2
Currency 2 5 4 3
--------- --------- --------- ---------
Sub-total 5 11 8 7
Impact of 53rd week (7) 8 (2) 2
--------- --------- --------- ---------
As reported change in sales (2)% 19% 6% 9%
========= ========= ========= =========
CONTACT: Campbell Soup Company
Media
Jerry S. Buckley, 856-342-6007
or
Analysts
Leonard F. Griehs, 856-342-6428
SOURCE: Campbell Soup Company