caret-down

Campbell Reports Second Quarter Earnings Per Share of $.56; U.S. Wet Soup Shipments Rise 4 Percent; Worldwide Wet Soup Shipments Increase 2 Percent

CAMDEN, N.J., Feb 13, 2003 (BUSINESS WIRE) — 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


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.


CONTACT:          Campbell Soup Company, Camden
Michelle M. Davidson (Media)
(856) 968-4390
or
Leonard F. Griehs (Analysts)
(856) 342-6428