CAMDEN, N.J.–(BUSINESS WIRE)–Feb. 23, 2004–Campbell Soup Company (NYSE:CPB) today reported diluted earnings per share for the second quarter ended February 1, 2004 of $.57 compared to $.56 recorded in the year-ago quarter.
For the second quarter, net sales rose 9 percent to $2.1 billion, driven by the following:
-- Volume and mix increased 3 percent -- Price added 2 percent -- Increased promotional spending subtracted 1 percent -- Currency added 5 percent
Net earnings for the second quarter of fiscal 2004 were $235 million versus $231 million a year earlier.
Diluted earnings per share for the first six months were $1.08, up 5 percent versus $1.03 a year ago, before the cumulative effect of accounting change. In fiscal 2003, the company recognized a one-time non-cash goodwill impairment charge of $31 million after taxes, or 8 cents per share, related to the adoption of SFAS No. 142.
Net sales were $4.0 billion for the first six months, an increase of 11 percent compared with the year-ago period, reflecting the following factors:
-- Volume and mix increased 3 percent -- Price added 2 percent -- Currency added 5 percent -- Acquisitions contributed 1 percent
For the first half of fiscal 2004, the company reported net earnings of $446 million versus $423 million a year earlier before the cumulative effect of accounting change.
Douglas R. Conant, Campbell’s President and Chief Executive Officer, said, “We again delivered solid financial performance in the quarter. We are successfully executing our highest strategic priority of revitalizing our U.S. soup business. We continue to generate excellent growth in our ready-to-serve soups and we are encouraged by the improved performance of our condensed soups. Across the broader portfolio, we see many examples of strong marketplace performance, including ‘V8’ beverages and ‘Pepperidge Farm’ in the U.S. and ‘Arnott’s’ in Australia.”
Conant added, “Our strategy to drive improved top-line growth through investments in higher quality products and packaging, convenience, and integrated marketing is clearly paying off. Looking ahead, we will focus on continuing this top-line momentum, while improving our margin structure.”
Consistent with earlier guidance, the company expects earnings per share of approximately $1.58 for fiscal 2004. In fiscal 2003, the company reported earnings per share of $1.52 before the cumulative effect of accounting change. For the third quarter of 2004, the company expects earnings per share to be approximately $.31.
A summary of second quarter and first half segment results follows.
North America Soup and Away From Home
North America Soup and Away From Home sales increased 8 percent to $894 million in the quarter compared to the year-ago period, driven by strong volume and mix increases, offset by increased promotional spending. Operating earnings of $220 million were up 5 percent. Sales for the quarter break down as follows:
-- Volume and mix increased 5 percent -- Price added 3 percent -- Increased promotional spending subtracted 2 percent -- Currency added 2 percent Further details include the following: -- Ready-to-serve soup sales increased 17 percent for the quarter on shipment growth of 17 percent. This strong performance was driven by significantly enhanced promotional activity behind "Campbell's Chunky" canned soups, as well as the continued positive impact of the "M'm! M'm! Good! To Go" convenience platform, which includes "Chunky" and "Select" microwaveable bowls and "Soup At Hand," a line of convenient sippable soups designed for out-of-home consumption. -- Condensed soup sales were even with a year ago as higher prices offset a 2 percent decline in shipments during the quarter. "Campbell's" Chicken Noodle soup achieved particularly strong shipment growth in the quarter, offset by declines in cooking soups. -- Broth sales declined 1 percent, as shipment growth of 1 percent was more than offset by higher promotional spending.
For the first half of fiscal 2004, sales increased 8 percent to $1.7 billion with currency contributing 2 percentage points of the growth. Operating earnings increased 7 percent to $441 million, compared to the year-ago period.
North America Sauces and Beverages
North America Sauces and Beverages sales rose 2 percent to $324 million in the quarter and operating earnings decreased 14 percent to $72 million, due to higher costs of packaging and ingredients, quality improvements and unfavorable product mix. Sales for the quarter break down as follows:
-- Volume and mix increased 5 percent -- Increased promotional spending subtracted 3 percent Further details include the following: -- Strong sales gains in beverages were generated by effective marketing programs and new product introductions. -- "Pace" Mexican sauce sales were solid, particularly around the Super Bowl. -- Sales of "Prego" pasta sauce declined slightly due in part to the continued softness in the pasta category.
For the first half of fiscal 2004, sales rose 4 percent to $651 million compared to the year-ago period. Operating earnings declined 7 percent to $150 million, due to higher costs of packaging and ingredients, quality improvements and unfavorable product mix.
Biscuits and Confectionery
Biscuits and Confectionery sales increased 13 percent to $550 million in the quarter and operating earnings rose 3 percent to $90 million. Sales for the quarter break down as follows:
-- Volume and mix increased 2 percent -- Price increases added 3 percent -- Increased promotional spending subtracted 1 percent -- Currency added 9 percent
Currency contributed 6 percentage points of the growth in operating earnings during the quarter. In the year-ago period, operating earnings were favorably impacted by an $8 million gain on the sale of a biscuit plant in Australia.
Further details include the following: -- Pepperidge Farm delivered strong sales growth in cookies, crackers, and bread, while frozen products declined. The cookie business grew behind the introduction of Minis, smaller versions of Pepperidge Farm's most popular cookies, and particularly strong sales during the holiday season. Bread sales increased due to distribution gains in the mass merchandise channel. -- Godiva Chocolatier's worldwide sales increased, behind continued strong growth in Asia. Same store sales trends in North America also improved in the quarter. -- Sales of "Arnott's" biscuits in Australia increased significantly in the quarter, driven by strong performance of "Shapes," Australia's #1 snack cracker, and chocolate varieties.
For the first half of fiscal 2004, sales rose 16 percent to $1.0 billion compared to the year-ago period, with currency contributing 8 percentage points of the growth. Operating earnings increased 5 percent, with currency contributing 8 percentage points of the growth.
International Soup and Sauces
International Soup and Sauces sales rose 14 percent to $332 million and operating earnings increased 15 percent to $39 million in the quarter. Sales for the quarter break down as follows:
-- Volume and mix decreased 2 percent -- Price added 1 percent -- Reduced promotional spending added 1 percent -- Currency added 15 percent -- Divestiture subtracted 1 percent Operating earnings growth was driven by favorable currency. Further details include the following: -- In Europe, branded sales grew for the second straight quarter led by strong performance in Germany and France, offsetting private label declines. In Germany, new single serve pouches of "Erasco" soups performed well. In France, "Liebig" aseptic soups had strong sales during the quarter. -- In Asia Pacific, sales growth was driven by soup, broth and "V8" beverages.
For the first half of fiscal 2004, sales increased 16 percent to $618 million, compared to the year-ago period. Currency contributed 14 percentage points of the sales growth. Operating earnings increased 23 percent to $74 million compared to the year-ago period with currency contributing 15 percentage points of the growth.
Conference Call
The company will host a conference call to discuss these results on February 23, 2004 at 10:00 a.m. Eastern Standard Time. U.S. participants may access the call at 1-800-857-5156 and non-U.S. participants at 1-630-395-0021. 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 https://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 February 27, 2004 at 1-888-562-6139 or 1-402-280-9979.
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, sauce, beverage, biscuit, confectionery and prepared food products. The Company is 135 years old, with nearly $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, “Prego” pasta sauces, and “Franco-American” canned pastas and gravies. 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. The company is ably supported by 25,000 full-time employees worldwide. For more information on the company, visit Campbell’s website on the Internet at www.campbellsoupcompany.com.
CAMPBELL SOUP COMPANY CONSOLIDATED STATEMENTS OF EARNINGS (unaudited) (millions, except per share amounts) THREE MONTHS ENDED -------------------------- February January 1, 2004 26, 2003 ------------ ------------ Net sales $ 2,100 $ 1,918 ------------ ------------ Costs and expenses Cost of products sold 1,212 1,056 Marketing and selling expenses 340 329 Administrative expenses 136 128 Research and development expenses 21 21 Other expenses 2 (1) ------------ ------------ Total costs and expenses 1,711 1,533 ------------ ------------ Earnings before interest and taxes 389 385 Interest, net 42 46 ------------ ------------ Earnings before taxes 347 339 Taxes on earnings 112 108 ------------ ------------ Net earnings $ 235 $ 231 ============ ============ Per share - basic Net earnings $ .57 $ .56 ============ ============ Dividends $ .1575 $ .1575 ============ ============ Weighted average shares outstanding - basic 411 411 ============ ============ Per share - assuming dilution Net earnings $ .57 $ .56 ============ ============ Weighted average shares outstanding - assuming dilution 412 411 ============ ============ Certain reclassifications were made to prior year financial statements. CAMPBELL SOUP COMPANY CONSOLIDATED STATEMENTS OF EARNINGS (unaudited) (millions, except per share amounts) SIX MONTHS ENDED -------------------------- February January 1, 2004 26, 2003 ------------ ------------ Net sales $ 4,009 $ 3,623 ------------ ------------ Costs and expenses Cost of products sold 2,320 2,027 Marketing and selling expenses 633 603 Administrative expenses 259 236 Research and development expenses 42 40 Other expenses 12 2 ------------ ------------ Total costs and expenses 3,266 2,908 ------------ ------------ Earnings before interest and taxes 743 715 Interest, net 85 91 ------------ ------------ Earnings before taxes 658 624 Taxes on earnings 212 201 ------------ ------------ Earnings before cumulative effect of accounting change 446 423 Cumulative effect of accounting change - (31) ------------ ------------ Net earnings $ 446 $ 392 ============ ============ Per share - basic Earnings before cumulative effect of accounting change $ 1.08 $ 1.03 Cumulative effect of accounting change - (.08) ------------ ------------ Net earnings $ 1.08 $ .95 ============ ============ Dividends $ .315 $ .315 ============ ============ Weighted average shares outstanding - basic 411 411 ============ ============ Per share - assuming dilution Earnings before cumulative effect of accounting change $ 1.08 $ 1.03 Cumulative effect of accounting change - (.08) ------------ ------------ Net earnings $ 1.08 $ .95 ============ ============ 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. Certain reclassifications were made to prior year financial statements. CAMPBELL SOUP COMPANY CONSOLIDATED SUPPLEMENTAL SCHEDULE OF SALES AND EARNINGS (unaudited) (millions, except per share amounts) THREE MONTHS ENDED ------------------ February January Percent Sales 1, 2004 26, 2003 Change ----- -------- -------- ------- Contributions: North America Soup and Away From Home $ 894 $ 824 8% North America Sauces and Beverages 324 318 2% Biscuits and Confectionery 550 486 13% International Soup and Sauces 332 290 14% -------- -------- Total sales $ 2,100 $ 1,918 9% ======== ======== Earnings -------- Contributions: North America Soup and Away From Home $ 220 $ 209 5% North America Sauces and Beverages 72 84 -14% Biscuits and Confectionery 90 87 3% International Soup and Sauces 39 34 15% -------- -------- Total operating earnings 421 414 2% Unallocated corporate expenses (32) (29) -------- -------- Earnings before interest and taxes 389 385 1% Interest, net (42) (46) Taxes on earnings (112) (108) -------- -------- Net earnings $ 235 $ 231 2% ======== ======== Net earnings per share - assuming dilution $ .57 $ .56 2% ======== ======== CAMPBELL SOUP COMPANY CONSOLIDATED SUPPLEMENTAL SCHEDULE OF SALES AND EARNINGS (unaudited) (millions, except per share amounts) SIX MONTHS ENDED ------------------ February January Percent Sales 1, 2004 26, 2003 Change ----- -------- -------- ------- Contributions: North America Soup and Away From Home $ 1,699 $ 1,570 8% North America Sauces and Beverages 651 625 4% Biscuits and Confectionery 1,041 896 16% International Soup and Sauces 618 532 16% -------- -------- Total sales $ 4,009 $ 3,623 11% ======== ======== Earnings -------- Contributions: North America Soup and Away From Home $ 441 $ 414 7% North America Sauces and Beverages 150 161 -7% Biscuits and Confectionery 136 129 5% International Soup and Sauces 74 60 23% -------- -------- Total operating earnings 801 764 5% Unallocated corporate expenses (58) (49) -------- -------- Earnings before interest and taxes 743 715 4% Interest, net (85) (91) Taxes on earnings (212) (201) -------- -------- Earnings before cumulative effect of accounting change 446 423 5% Cumulative effect of accounting change - (31) -------- -------- Net earnings $ 446 $ 392 14% ======== ======== Net earnings per share before cumulative effect of accounting change - assuming dilution $ 1.08 $ 1.03 5% ======== ======== 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. CAMPBELL SOUP COMPANY CONSOLIDATED BALANCE SHEETS (unaudited) (millions) February January 1, 2004 26, 2003 ---------- ---------- Current assets $ 1,541 $ 1,484 Plant assets, net 1,871 1,757 Intangible assets, net 3,081 2,748 Other assets 303 298 ---------- ---------- Total assets $ 6,796 $ 6,287 ========== ========== Current liabilities $ 2,502 $ 3,034 Long-term debt 2,566 2,270 Nonpension postretirement benefits 301 314 Other liabilities 559 430 Shareowners' equity 868 239 ---------- ---------- Total liabilities and shareowners' equity $ 6,796 $ 6,287 ========== ========== Total debt $ 3,474 $ 3,627 ========== ========== Cash and cash equivalents $ 41 $ 37 ========== ==========
CONTACT: Campbell Soup Company Jerry S. Buckley (Media), 856-342-6007 Leonard F. Griehs (Analysts), 856-342-6428 SOURCE: Campbell Soup Company
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