News Release
ConAgra Foods Reports Solid Fourth Quarter Sales and Earnings; Expects Solid Fiscal 2005 EPS; Seven Million Shares Repurchased During the Quarter
OMAHA, Neb.--(BUSINESS WIRE)--July 1, 2004--ConAgra Foods, Inc. (NYSE:CAG):
Fourth Quarter 2004 Highlights
-- Diluted EPS of $0.40 vs. $0.28 last year.
-- Sales rose to $4.0 billion compared with $3.6 billion last
year. All operating segments posted year-over-year sales
gains.
-- Due to strategic portfolio changes, new segment
classifications are now in effect: Retail Products,
Foodservice Products, and Food Ingredients.
-- Repurchased seven million shares of the company's stock at a
cost of approximately $200 million.
FISCAL YEAR 2004 HIGHLIGHTS
-- Fiscal year diluted EPS of $1.66 vs. $1.46 in the prior fiscal
year.
-- Repurchased 15 million shares of the company's stock at a cost
of approximately $419 million.
Note: Year-Over-Year Comparability:
Several items impact year-over-year comparisons of sales, operating profit, and EPS, including the prior year contribution from businesses the company no longer owns, fiscal year 2004 costs associated with implementing efficiency initiatives, the estimated benefit from the inclusion of one additional week in the fourth quarter and the full fiscal year 2004, and changing the fiscal year-end for an operation within the Food Ingredients segment to match ConAgra Foods fiscal year-end. Comparable year-over-year changes in sales and operating profits for the fourth quarter and the fiscal year reflecting these factors are summarized in tables at the end of this release.
ConAgra Foods, Inc. (NYSE:CAG), one of America's leading packaged food companies, today reported earnings for the fourth quarter ended May 30, 2004. Net income for the quarter rose 41% to $212 million, or $0.40 per diluted share, compared with earnings a year ago of $150 million, or $0.28 per diluted share. For all of fiscal year 2004, net income rose to $880 million, or $1.66 per diluted share. In fiscal 2003, the company earned $775 million, or $1.46 per diluted share.
Bruce Rohde, chairman and chief executive officer, commented, "Fiscal year 2004 was a year of significant momentum for ConAgra Foods; we accomplished the strategic reshaping of our portfolio that we set out to do by completing the divesture of non-core businesses, and we made measurable progress with key initiatives designed to drive profitable future growth. We are expanding profit margins through sales, marketing, and operational platform initiatives, as we build our business base into a richer, and more consumer-focused enterprise."
For the quarter: Sales were up 9% to $4.0 billion vs. $3.6 billion last year. Current quarter operating profit was $465 million, 4% below the $486 million reported last year. On a comparable basis, sales were 4% ahead of last year and operating profit increased 2% over last year, after considering the impact of prior year contributions from businesses the company no longer owns, fiscal year 2004 costs associated with implementing efficiency initiatives, the estimated benefit from the inclusion of one additional week in the fourth quarter, and changing the fiscal year-end for an operation within the Food Ingredients segment to match ConAgra Foods fiscal year-end, all of which are detailed in tables at the end of this release. Current quarter income from continuing operations before income tax and the cumulative effect of changes in accounting was $305 million, equal to last fiscal year.
For fiscal 2004: Sales were $14.5 billion, 14% below last year's sales of $16.9 billion. Fiscal year 2004 operating profit totaled $1.7 billion, 8% below $1.9 billion reported last year. Sales increased 3% and operating profit increased 2% on a comparable basis, after considering the impact of prior year contributions from businesses the company no longer owns, fiscal year 2004 costs associated with implementing efficiency initiatives, and the estimated benefit from the inclusion of one additional week in the full fiscal year 2004, all of which are detailed in tables at the end of this release. For the fiscal year 2004, income from continuing operations before income tax and cumulative effect of changes in accounting was $1.2 billion, down 6% compared to last year.
Segment Comments & Operating Efficiency Initiatives
Reflecting strategic portfolio changes and management realignment in 2004, the company began reporting its operations in three segments: Retail Products, Foodservice Products, and Food Ingredients. Historical segment results have been adjusted to reflect the segment changes.
The company has several operating efficiency initiatives underway that are designed to improve the company's cost structure, margins, and competitive position. Implementing these initiatives resulted in approximately $62 million of charges, or $0.07 per diluted share of expense for the fiscal year 2004; this includes $24 million, or $0.03 per diluted share, in the fourth quarter. Most of the expenses were incurred in the Foodservice Products and Retail Products segments. The company currently plans for these initiatives to continue in fiscal year 2005 and result in approximately $0.03 per diluted share of similar charges in that year.
Retail Products
Sales for the Retail Products segment (58% of total annual sales) were $2.2 billion for the fourth quarter, up 3%. Sales were essentially equal to last year on a comparable basis, after considering the impact of prior year contribution from businesses the company no longer owns and the estimated benefit from the inclusion of one additional week in the fourth quarter, which are detailed in tables at the end of this release.
-- Several major consumer brands posted sales gains on a
comparable 13-week basis including: Banquet, Blue Bonnet, Chef
Boyardee, DAVID, Egg Beaters, Hebrew National, Hunt's, Kid
Cuisine, La Choy, Manwich, Marie Callender's, PAM, Peter Pan,
Reddi-wip, Slim Jim, Snack Pack, Wesson, and others. Many have
posted several successive quarters of solid sales growth and
strong category performance.
The sales performance reflects distribution gains for many products. Efforts to expand distribution have been made more effective by the unification of the retail sales team; earlier in fiscal 2004, the retail sales force consolidated and now serves customers as a consolidated ConAgra Foods team representing the ConAgra Foods Retail Products portfolio. This consolidation is expected to improve customer contact, service, and expand product promotion and bundling opportunities that benefit customers and the company.
Improved marketing efforts for some brands are starting to favorably influence brand performance, as the company has formalized its approach to building brands to utilize best practices and to prioritize marketing investments. In addition, selling prices for many items are increasing, made necessary by rising input costs. Other factors contributing to the improved sales performance include a portfolio that has a variety of quality foods and product platforms which are on-trend with current consumer preferences. Life Choice, the company's new line of frozen meals targeting carb-conscious consumers, performed well. During the quarter, the company introduced Banquet(R) Crock-Pot(R) Classics, a new line of frozen meals specifically for Crock-Pot(R) slow cookers; the product is off to a strong start and the company is optimistic about its prospects. Weak popcorn volumes negatively impacted the segment's sales performance, due to category and competitive challenges.
The Retail Products segment operating profit for the quarter was $315 million, 7% below the $340 million posted last year. On a comparable basis, operating profit was 11% below last year after considering the impact of prior year contribution from businesses the company no longer owns, fiscal year 2004 costs associated with implementing efficiency initiatives, and the estimated benefit from the inclusion of one additional week in the fourth quarter, as detailed in tables at the end of this release. Increased input costs, which were not fully offset by higher selling prices during the year for several of the company's products, negatively affected segment profits as did a less favorable mix of products. The company noted that operating profits for its branded processed meats and popcorn products were weak compared to past trends, reflecting current category and competitive challenges.
Fiscal year 2004 sales for the Retail Products segment reached $8.4 billion, 3% below the $8.7 billion reported last fiscal year primarily due to divestitures. Operating profit for the segment was $1.2 billion, 7% below the $1.3 billion reported last fiscal year. Sales were 1% ahead of last year and operating profit was 4% below last year after considering the impact of the prior year contribution from businesses the company no longer owns, fiscal year 2004 costs associated with implementing efficiency initiatives, and the estimated benefit from the inclusion of one additional week in the full fiscal year 2004, all of which are detailed in tables at the end of this release.
Foodservice Products
Sales for the Foodservice Products segment (26% of total annual sales) were $1.0 billion for the fourth quarter, an increase of 9% over the $916 million in the fourth quarter last year. Segment operating profit for the quarter was $90 million, 15% above the $78 million posted last year. On a comparable basis, sales were 5% above last year and operating profit was 29% higher than last year after considering the impact of prior year contribution from businesses the company no longer owns, fiscal year 2004 costs associated with implementing efficiency initiatives, and the estimated benefit from the inclusion of one additional week in the fourth quarter, all of which are detailed in tables at the end of this release.
As a result of recent organizational changes, the company's Foodservice Products segment now consists of three specialized sales platforms: culinary, specialty potatoes, and seafood. The company's culinary group represents several different types of products, including branded consumer products sold in the foodservice channel, prepared meats, frozen prepared entrees, pizza, ethnic foods, condiments, sauces, custom products, and others.
Comparable Foodservice Products sales growth for the quarter reflects strong customer demand for specialty potato and culinary products; seafood sales declined despite unit volume gains, reflecting market conditions. The overall comparable operating profit growth for the quarter reflects strong volumes across a variety of products and effective cost and pricing management.
The company believes that all components of its foodservice business have solid opportunities for growth, and that its culinary business unit, in particular, has an excellent opportunity to identify new customers and gain more business with existing customers given that this business unit was recently established. This unit is expected to benefit from stronger marketplace presence, sales penetration, and greater efficiencies.
Fiscal year 2004 sales for the Foodservice Products segment reached $3.7 billion, 3% ahead of the $3.6 billion reported last fiscal year. Operating profit was $321 million, 7% below the $345 million reported last fiscal year primarily due to costs related to implementing efficiency initiatives. On a comparable basis, sales grew 4% and operating profit grew 2% after considering the impact of prior year contribution from businesses the company no longer owns, fiscal year 2004 costs associated with implementing efficiency initiatives, and the estimated benefit from the inclusion of one additional week in full fiscal year 2004, all of which are detailed in tables at the end of this release.
Food Ingredients
During the quarter, sales for the Food Ingredients (16% of total annual sales) segment increased 32% to $731 million from $553 million last year. Operating profit improved 223% to $60 million this year compared with $19 million last year. On a comparable basis, sales increased 14% and operating profit increased 74%, after considering the impact of prior year contribution from businesses the company no longer owns, fiscal year 2004 costs associated with implementing efficiency initiatives, the estimated benefit from the inclusion of one additional week in the fourth quarter, and changing the fiscal year-end for an operation within the Food Ingredients segment to match ConAgra Foods fiscal year-end, all of which are detailed in tables at the end of this release. The operating profit increase reflects a slightly improved business environment and more efficient operations for dehydrated, seasonings and flavors, and milled product lines as well as better results from ingredient merchandising operations. The sales increase largely reflects fluctuating market prices and a more favorable environment for commodity merchandising operations.
For fiscal year 2004, sales for the Food Ingredients segment totaled $2.4 billion, 8% ahead of the $2.2 billion reported last year, and operating profit for the fiscal year was $197 million, 57% above the $125 million reported last fiscal year. On a comparable basis, fiscal 2004 sales increased 5% and operating profit increased 58%, after considering the impact of prior year contribution from businesses the company no longer owns, fiscal year 2004 costs associated with implementing efficiency initiatives, and the estimated benefit from the inclusion of one additional week in the full fiscal year 2004, all of which are detailed in tables at the end of this release.
During the quarter, the company divested a non-core European animal feed business that had approximately $282 million in annual revenues and an immaterial amount of segment profits. As a result of this transaction that business has now been reclassified as a discontinued operation; historical results reflect this reclassification. That divestiture resulted in a net $0.02 per share gain in the fourth quarter, which is classified within discontinued operations.
Earnings from Equity Method Investments & Discontinued Operations
Equity method investment earnings for the quarter were $14 million, compared with $10 million for the same quarter last year. Fiscal year 2004 results for equity method investment earnings were $44 million, compared with $37 million for last fiscal year.
During the quarter, diluted EPS from discontinued operations totaled $0.03 per share, including a net $0.02 gain from selling the European animal feed business, described above.
Capital Resource Management & Corporate Expense
The company repurchased approximately 7 million shares of common stock during the fourth quarter at a total cost of approximately $200 million. During fiscal year 2004, the company repurchased over 15 million shares for a total cost of approximately $419 million.
-- Continuing operations - fiscal fourth quarter: Capital
expenditures for property, plant, and equipment totaled $106
million compared with $120 million last year. Depreciation and
amortization expense was approximately $93 million for the
quarter versus $93 million a year ago. Dividends paid totaled
$137 million. Net interest expense for the quarter was $80
million compared with $59 million last year.
-- Continuing operations - fiscal year 2004: Capital expenditures
for property, plant, and equipment were $352 million, compared
with $376 million in fiscal year 2003. Depreciation and
amortization expense amounted to $352 million versus $375
million last year. Dividends paid totaled $537 million. Net
interest expense was $275 million, compared with $275 million
last fiscal year.
-- Corporate expense was $95 million for the quarter, compared
with $133 million last year. The year-over-year reduction was
favorably influenced by a $21 million taxable gain in the
current quarter from selling a minority interest in a joint
venture. Additionally, the company established a $25 million
legal reserve in the fourth quarter this year in connection
with the previously disclosed September 28, 2001 SEC formal
order of nonpublic investigation.
-- For the fiscal year, corporate expense was $342 million,
compared with $407 million last year.
New Product News
During the quarter, ConAgra Foods introduced Banquet(R) Crock-Pot(R) Classics, the first complete meal designed and created for Crock-Pot(R) slow cooking. Banquet Crock-Pot Classics contain all of the high-quality ingredients needed for a slow-cooked meal--like tender meats, fresh vegetables, hearty potatoes and perfectly seasoned sauces--and are ready to cook with less than five minutes of preparation. The product is off to a strong start.
Outlook
The company believes fiscal 2005 will show a solid EPS performance and growth in sales and operating profits from its current business segments. In addition to paying a strong dividend, the company expects to continue allocating capital toward repurchasing its shares during fiscal 2005 as well as toward acquisition opportunities that fit with the company's strategic and financial goals.
The company is currently implementing profit-enhancing initiatives that impact the marketing, sales, operations, and information system functions, and expects the benefit from these initiatives to have an increasingly positive impact to the company's overall EPS over the next three fiscal years. For more detail on these initiatives, please refer to the company's website, www.conagrafoods.com/investors, and choose the button titled "ConAgra Foods Comments on Strategic Direction."
Major Items Affecting Year-Over-Year EPS Comparability of Fourth-Quarter 2004 Results
Included in the $0.40 diluted EPS for the fourth quarter of fiscal
2004:
-- Current quarter results include expense of approximately $0.03
per diluted share related to implementing cost-saving
initiatives.
-- Current quarter results include $0.03 per diluted share of
income from discontinued operations.
-- Current quarter results include a benefit of approximately
$0.02 per diluted share related to the taxable gain on the
sale of the company's minority interest in a joint venture;
this is classified as a $21 million reduction of corporate
expense.
-- Current quarter results include a $0.02 per share benefit from
a lower than normal effective tax rate, due primarily to the
utilization of capital loss carryforwards and foreign tax
credits.
-- Current quarter results include an estimated $0.03 per share
benefit from having an extra week's results in the quarter, as
fiscal 2004 was a 53-week year.
-- Current quarter results include a $0.05 per share charge for
the establishment of a legal reserve, described previously in
this release and classified as corporate expense.
Included in the $0.28 diluted EPS for the fourth quarter of fiscal
2003:
-- Prior year results include $0.12 per diluted share of loss
from discontinued operations, mostly related to the
divestiture of chicken processing operations.
-- Prior year results include a favorable insurance settlement of
$0.06 per diluted share. This is classified as operating
profit in the Meat Processing segment.
-- Prior year results include a tax benefit of $0.04 per diluted
share, due to a lower than normal tax rate in the fiscal
fourth quarter of 2003.
Major Items Affecting Year-Over-Year Sales and Operating Profit Comparability
-- To determine comparable year-over-year sales and operating
profit amounts for the Retail Products segment for the fourth
quarter and fiscal year, management considered the estimated
impacts of matters set forth in the analysis below (amounts in
millions):
Retail Q4 2004 Q4 2003 % Fiscal Fiscal %
Products Sales Sales Change 2004 2003 Change
Sales Sales Sales
----------------------------------------------------------------------
As Reported $2,230.2 $2,157.2 3.4% $8,434.1 $8,668.1 (2.7%)
----------------------------------------------------------------------
Estimated ($164.6) - ($164.6) -
impact of
extra week
in 2004 (a)
----------------------------------------------------------------------
Impact on - ($94.9) - ($492.9)
fiscal 2003
from
operations
the company
no longer
owns
----------------------------------------------------------------------
Comparable $2,065.6 $2,062.3 0.2% $8,269.5 $8,175.2 1.2%
Amounts
----------------------------------------------------------------------
Retail Q4 2004 Q4 2003 % Fiscal Fiscal %
Products Operating Operating Change 2004 2003 Change
Operating Profit Profit Operating Operating
Profit Profit Profit
----------------------------------------------------------------------
As Reported $314.8 $339.8 (7.4%) $1,206.8 $1,298.0 (7.0%)
----------------------------------------------------------------------
Estimated ($27.6) - ($27.6) -
impact of
extra week
in 2004 (a)
----------------------------------------------------------------------
Costs Related $10.2 - $25.4 -
to
Implementing
Efficiency
Initiatives
in 2004
----------------------------------------------------------------------
Impact on - ($6.3) - ($43.2)
fiscal 2003
from
operations
the company
no longer
owns
----------------------------------------------------------------------
Comparable $297.4 $333.5 (10.8%) $1,204.6 $1,254.8 (4.0%)
Amounts
----------------------------------------------------------------------
(a) The company estimated the impact of the extra week of operations
in 2004 using a pro-rata methodology based on the last six weeks of
the fiscal year.
-- To determine comparable year-over-year sales and operating
profit amounts for the Foodservice Products segment for the
fourth quarter and fiscal year, management considered the
estimated impacts of matters set forth in the analysis below
(amounts in millions):
Foodservice Q4 2004 Q4 2003 % Fiscal Fiscal % Products Sales Sales Change 2004 2003 Change Sales Sales Sales ---------------------------------------------------------------------- As Reported $1,001.7 $915.6 9.4% $3,714.4 $3,597.9 3.2% ---------------------------------------------------------------------- Estimated ($69.5) - ($69.5) - impact of extra week in 2004 (a) ---------------------------------------------------------------------- Impact on - ($28.3) - ($93.1) fiscal 2003 from operations the company no longer owns ---------------------------------------------------------------------- Comparable $932.2 $887.3 5.1% $3,644.9 $3,504.8 4.0% Amounts ---------------------------------------------------------------------- Foodservice Q4 2004 Q4 2003 % Fiscal Fiscal % Products Operating Operating Change 2004 2003 Change Operating Profit Profit Operating Operating Profit Profit Profit ---------------------------------------------------------------------- As Reported $89.9 $78.0 15.3% $321.4 $344.5 (6.7%) ---------------------------------------------------------------------- Estimated ($6.6) - ($6.6) - impact of extra week in 2004 (a) ---------------------------------------------------------------------- Costs Related $13.3 - $28.9 - to Implementing Efficiency Initiatives in 2004 ---------------------------------------------------------------------- Impact on - ($2.9) - ($6.2) fiscal 2003 from operations the company no longer owns ---------------------------------------------------------------------- Comparable $96.6 $75.1 28.6% $343.7 $338.3 1.6% Amounts ---------------------------------------------------------------------- (a) The company estimated the impact of the extra week of operations in 2004 using a pro-rata methodology based on the last six weeks of the fiscal year.
-- To determine comparable year-over-year sales and operating
profit amounts for the Food Ingredients segment for the fourth
quarter and fiscal year, management considered the estimated
impacts of matters set forth in the analysis below (amounts in
millions):
Food Ingredients Q4 2004 Q4 2003 % Fiscal Fiscal %
Sales Sales Sales Change 2004 2003 Change
Sales Sales
----------------------------------------------------------------------
As Reported $730.5 $552.5 32.2% $2,373.6 $2,204.4 7.7%
----------------------------------------------------------------------
Estimated impact ($54.9) - ($54.9) -
of extra week in
2004 (a)
----------------------------------------------------------------------
Impact of change - $42.9 - -
in fiscal year
of fertilizer
operations (b)
----------------------------------------------------------------------
Comparable $675.6 $595.4 13.5% $2,318.7 $2,204.4 5.2%
Amounts
----------------------------------------------------------------------
Food Q4 2004 Q4 2003 % Fiscal Fiscal %
Ingredients Operating Operating Change 2004 2003 Change
Operating Profit Profit Operating Operating
Profit Profit Profit
----------------------------------------------------------------------
As Reported $60.4 $18.7 223.0% $196.6 $125.1 57.2%
----------------------------------------------------------------------
Estimated ($6.7) - ($6.7) -
impact of
extra week
in 2004 (a)
----------------------------------------------------------------------
Costs Related $0.3 - $7.6 -
to
Implementing
Efficiency
Initiatives
in 2004
----------------------------------------------------------------------
Impact of - $12.4 - -
change in
fiscal year
of
fertilizer
operations
(b)
----------------------------------------------------------------------
Comparable $54.0 $31.1 73.6% $197.5 $125.1 57.9%
Amounts
----------------------------------------------------------------------
(a) The company estimated the impact of the extra week of operations
in 2004 using a pro-rata methodology based on the last six weeks of
the fiscal year.
(b) Certain of the company's fertilizer operations historically had a
February fiscal year end. In the current year the company changed
these operations' year-end to May. As such, the fourth quarter results
for fiscal 2003 are for the three months ended February, as compared
to the fourth quarter fiscal 2004 results which are for the three
months ended May. Due to seasonality, the fertilizer operations are
typically significantly greater for the three months ended May as
compared to the three months ended February. There is no material
impact of change on the full year comparison.
-- To determine comparable year-over-year sales and operating
profit amounts for the total company for the fourth quarter
and fiscal year, management considered the estimated impacts
of matters set forth in the analysis below (amounts in
millions):
ConAgra Q4 2004 Q4 2003 % Fiscal Fiscal %
Foods Sales Sales Change 2004 2003 Change
Sales Sales Sales
----------------------------------------------------------------------
As Reported $3,962.4 $3,625.3 9.3% $14,522.1 $16,939.1 (14.3%)
----------------------------------------------------------------------
Estimated ($289.0) - ($289.0) -
impact of
extra week
in 2004
(a)
----------------------------------------------------------------------
Impact of - $42.9 - -
change in
fiscal
year of
fertilizer
operations
(b)
----------------------------------------------------------------------
Impact on - ($123.2) - ($3,054.7)
fiscal
2003 from
operations
the
company no
longer
owns
----------------------------------------------------------------------
Comparable $3,673.4 $3,545.0 3.6% $14,233.1 $13,884.4 2.5%
Amounts
----------------------------------------------------------------------
ConAgra Foods Q4 2004 Q4 2003 % Fiscal Fiscal %
Operating Operating Operating Change 2004 2003 Change
Profit (c) Profit Profit Operating Operating
Profit Profit
----------------------------------------------------------------------
As Reported $465.1 $486.2 (4.3%) $1,724.8 $1,867.0 (7.6%)
----------------------------------------------------------------------
Estimated ($40.9) - ($40.9) -
impact of
extra week
in 2004 (a)
----------------------------------------------------------------------
Costs Related $23.8 - $61.9 -
to
Implementing
Efficiency
Initiatives
in 2004
----------------------------------------------------------------------
Impact of - $12.4 - -
change in
fiscal year
of
fertilizer
operations
(b)
----------------------------------------------------------------------
Impact on - ($58.9) - ($148.8)
fiscal 2003
from
operations
the company
no longer
owns
----------------------------------------------------------------------
Comparable $448.0 $439.7 1.9% $1,745.8 $1,718.2 1.6%
Amounts
----------------------------------------------------------------------
(a) The company estimated the impact of the extra week of operations
in 2004 using a pro-rata methodology based on the last six weeks of
the fiscal year.
(b) Certain of the company's fertilizer operations historically had a
February fiscal year end. In the current year the company changed
these operations' year-end to May. As such, the fourth quarter results
for fiscal 2003 are for the three months ended February, as compared
to the fourth quarter fiscal 2004 results which are for the three
months ended May. Due to seasonality, the fertilizer operations are
typically significantly greater for the three months ended May as
compared to the three months ended February. There is no material
impact of change on the full year comparison.
(c) A reconciliation of total operating profit to income from
continuing operations before income tax and cumulative effect of
changes in accounting is presented in the segment operating results
attached to this release.
ConAgra Foods, Inc. (NYSE:CAG) is one of North America's largest packaged food companies, serving consumer grocery retailers, as well as restaurants and other foodservice establishments. Popular ConAgra Foods consumer brands include: ACT II, Armour, Banquet, Blue Bonnet, Brown 'N Serve, Butterball, Chef Boyardee, Cook's, Crunch 'n Munch, DAVID, Decker, Eckrich, Egg Beaters, Fleischmann's, Golden Cuisine, Gulden's, Healthy Choice, Hebrew National, Hunt's, Kid Cuisine, Knott's Berry Farm, La Choy, Lamb Weston, Libby's, Life Choice, Lightlife, Lunch Makers, MaMa Rosa's, Manwich, Marie Callender's, Orville Redenbacher's, PAM, Parkay, Pemmican, Peter Pan, Reddi-wip, Rosarita, Ro*Tel, Slim Jim, Snack Pack, Swiss Miss, Van Camp's, Wesson, Wolf, and many others. For more information, please visit us at www.conagrafoods.com.
Discussion of Results
A discussion of ConAgra Foods' fourth-quarter results will be available today at 8:30 a.m. EDT. To access the discussion, call toll-free at 1-877-447-8217. International callers should dial 1-706-679-0415. On the Internet you may access the discussion at www.conagrafoods.com/investors. No passcode or call identification number is needed for the call at 8:30 a.m. EDT. A digital replay of the discussion will be available after 9:30 a.m. EDT at 1-800-642-1687 and at 1-706-645-9291 for international callers. The conference identification number for the digital replay for domestic callers and international callers is 7645047. The company has posted a question-and-answer supplement relating to this release and an audio archive of management's discussion at www.conagrafoods.com/investors. See ConAgra Foods' Web site for recent news at www.conagrafoods.com.
Note on Forward-Looking Statements:
This news release contains "forward-looking" statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on management's current expectations and are subject to uncertainty and changes in circumstances. Actual results may vary materially from the expectations contained in the forward-looking statements. Future economic circumstances, industry conditions, company performance and financial results, availability and prices of raw materials, product pricing, competitive environment and related market conditions, operating efficiencies, access to capital, actions of governments and regulatory factors affecting the company's businesses and other risks described in the company's reports filed with the Securities and Exchange Commission are examples of factors, among others, that could cause actual results to differ materially from those described in the forward-looking statements. The company is under no obligation to (and expressly disclaims any such obligation to) update or alter its forward-looking statements whether as a result of new information, future events, or otherwise.
ConAgra Foods, Inc.
Segment Operating Results
In millions
FOURTH QUARTER
----------------------------
14 Weeks 13 Weeks
Ended Ended
--------- --------- --------
May 30, May 25, Percent
2004 2003 Change
--------- --------- --------
SALES
-----
Retail Products $2,230.2 $2,157.2 3.4%
Foodservice Products 1,001.7 915.6 9.4%
Food Ingredients 730.5 552.5 32.2%
Meat Processing - - -
--------- ---------
Total 3,962.4 3,625.3 9.3%
--------- ---------
OPERATING PROFIT
----------------
Retail Products $314.8 $339.8 (7.4)%
Foodservice Products 89.9 78.0 15.3%
Food Ingredients 60.4 18.7 223.0%
Meat Processing - 49.7 (100.0)%
--------- ---------
Total operating profit for segments 465.1 486.2 (4.3)%
Reconciliation of total operating profit
to income from continuing operations
before income tax and cumulative effect
of changes in accounting
Items excluded from segment operating
profit:
General corporate expense 95.2 132.8 (28.3)%
Interest expense, net 79.5 58.7 35.4%
Equity method investment earnings 14.1 10.0 41.0%
--------- ---------
Income from continuing operations before
income tax and cumulative effect of
changes in accounting $ 304.5 $ 304.7 (0.1)%
========= =========
Segment operating profit excludes general corporate expense, equity method investment earnings and net interest expense. Management believes such expenses are not directly associated with segment performance results for the period. Management believes the presentation of total operating profit for segments facilitates period-to-period comparison of results of segment operations.
ConAgra Foods, Inc.
Segment Operating Results
In millions
YEAR TO DATE
--------------------------------
53 Weeks 52 Weeks
Ended Ended
----------- ----------- --------
May 30, May 25, Percent
2004 2003 Change
----------- ----------- --------
SALES
-----
Retail Products $8,434.1 $8,668.1 (2.7)%
Foodservice Products 3,714.4 3,597.9 3.2%
Food Ingredients 2,373.6 2,204.4 7.7%
Meat Processing - 2,468.7 (100.0)%
----------- -----------
Total 14,522.1 16,939.1 (14.3)%
----------- -----------
OPERATING PROFIT
----------------
Retail Products $1,206.8 $1,298.0 (7.0)%
Foodservice Products 321.4 344.5 (6.7)%
Food Ingredients 196.6 125.1 57.2%
Meat Processing - 99.4 (100.0)%
----------- -----------
Total operating profit for segments 1,724.8 1,867.0 (7.6)%
Reconciliation of total operating profit
to income from continuing operations
before income tax and cumulative effect
of changes in accounting
Items excluded from segment operating
profit:
General corporate expense 342.1 406.8 (15.9)%
Interest expense, net 274.9 274.7 0.1%
Equity method investment earnings 43.5 37.1 17.3%
----------- -----------
Income from continuing operations
before income tax and cumulative
effect of changes in accounting $1,151.3 $1,222.6 (5.8)%
=========== ===========
Segment operating profit excludes general corporate expense, equity method investment earnings and net interest expense. Management believes such expenses are not directly associated with segment performance results for the period. Management believes the presentation of total operating profit for segments facilitates period-to-period comparison of results of segment operations.
ConAgra Foods, Inc.
Consolidated Statements of Earnings
In millions, except per share amounts FOURTH QUARTER
---------------------------
14 Weeks 13 Weeks
Ended Ended
--------- --------- -------
May 30, May 25, Percent
2004 2003 Change
--------- --------- -------
Net sales $3,962.4 $3,625.3 9.3%
Costs and expenses:
Cost of goods sold 3,144.0 2,831.9 11.0%
Selling, general and administrative
expenses 448.5 440.0 1.9%
Interest expense, net 79.5 58.7 35.4%
--------- ---------
3,672.0 3,330.6 10.3%
Equity method investment earnings 14.1 10.0 41.0%
--------- ---------
Income from continuing operations before
income taxes and cumulative effect of
changes in accounting 304.5 304.7 (0.1)%
Income tax expense 105.5 88.9 18.7%
--------- ---------
Income from continuing operations before
cumulative effect of changes in
accounting 199.0 215.8 (7.8)%
Income (loss) from discontinued
operations, net of tax 12.5 (65.4) N/A
Cumulative effect of changes in accounting - - N/A
--------- ---------
Net income $211.5 $150.4 40.6%
========= =========
Earnings per share - basic
Income from continuing operations before
cumulative effect of changes in
accounting $0.38 $0.41 (7.3)%
Income (loss) from discontinued operations 0.02 (0.12) N/A
--------- ---------
Net income $0.40 $0.29 37.9%
========= =========
Weighted average shares outstanding 522.4 529.2 (1.3)%
========= =========
Earnings per share - diluted
Income from continuing operations before
cumulative effect of changes in
accounting $0.37 $0.40 (7.5)%
Income (loss) from discontinued operations 0.03 (0.12) N/A
--------- ---------
Net income $0.40 $0.28 42.9%
========= =========
Weighted average share and share
equivalents outstanding 527.1 530.0 (0.5)%
========= =========
ConAgra Foods, Inc.
Consolidated Statements of Earnings
In millions, except per share amounts YEAR TO DATE
-----------------------------
53 Weeks 52 Weeks
Ended Ended
---------- ---------- -------
May 30, May 25, Percent
2004 2003 Change
---------- ---------- -------
Net sales $14,522.1 $16,939.1 (14.3)%
Costs and expenses:
Cost of goods sold 11,326.1 13,569.9 (16.5)%
Selling, general and administrative
expenses 1,813.3 1,909.0 (5.0)%
Interest expense, net 274.9 274.7 0.1%
---------- ----------
13,414.3 15,753.6 (14.8)%
Equity method investment earnings 43.5 37.1 17.3%
---------- ----------
Income from continuing operations before
income taxes and cumulative effect of
changes in accounting 1,151.3 1,222.6 (5.8)%
Income tax expense 355.3 415.6 (14.5)%
---------- ----------
Income from continuing operations before
cumulative effect of changes in
accounting 796.0 807.0 (1.4)%
Income (loss) from discontinued
operations, net of tax 96.9 (36.1) N/A
Cumulative effect of changes in
accounting (13.1) 3.9 N/A
---------- ----------
Net income $879.8 $774.8 13.6%
========== ==========
Earnings per share - basic
Income from continuing operations before
cumulative effect of changes in
accounting $1.51 $1.53 (1.3)%
Income from discontinued operations 0.18 (0.07) N/A
Cumulative effect of changes in
accounting (0.02) 0.01 N/A
---------- ----------
Net income $1.67 $1.47 13.6%
========== ==========
Weighted average shares outstanding 527.2 528.6 (0.3)%
========== ==========
Earnings per share - diluted
Income from continuing operations before
cumulative effect of changes in
accounting $1.50 $1.52 (1.3)%
Income from discontinued operations 0.18 (0.07) N/A
Cumulative effect of changes in
accounting (0.02) 0.01 N/A
---------- ----------
Net income $1.66 $1.46 13.7%
========== ==========
Weighted average share and share
equivalents outstanding 530.7 530.7 -
========== ==========
ConAgra Foods, Inc.
Consolidated Balance Sheets
In millions
May 30, May 25,
2004 2003
---------- ----------
ASSETS
Current assets
Cash and cash equivalents $588.7 $628.6
Divestiture proceeds receivable 60.3 -
Receivables, less allowance for doubtful
accounts of $26.5 and $33.1 1,324.1 800.9
Inventories 2,625.6 2,455.6
Prepaid expenses and other current assets 410.6 669.3
Current assets of discontinued operations 135.6 1,505.2
---------- ----------
Total current assets 5,144.9 6,059.6
Property, plant and equipment, net 2,880.0 2,678.3
Goodwill 3,798.8 3,807.2
Brands, trademarks and other intangibles, net 826.9 824.3
Other assets 1,569.5 1,144.4
Noncurrent assets of discontinued operations 10.0 557.6
---------- ----------
$14,230.1 $15,071.4
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Notes payable $30.6 $1.6
Current installments of long-term debt 382.4 508.7
Accounts payable 940.8 788.1
Advances on sales 178.4 112.0
Other accrued liabilities 1,348.9 1,396.6
Current liabilities of discontinued operations 120.5 996.4
---------- ----------
Total current liabilities 3,001.6 3,803.4
Senior long-term debt, excluding current
installments 4,878.4 4,632.2
Subordinated debt 402.3 763.0
Preferred securities of subsidiary company - 175.0
Other noncurrent liabilities 1,108.3 1,058.7
Noncurrent liabilities of discontinued operations - 17.4
Common stockholders' equity 4,839.5 4,621.7
---------- ----------
$14,230.1 $15,071.4
========== ==========
CONTACT: ConAgra Foods, Inc., Omaha
Media:
Chris Kircher, 402-595-5392
or
Analysts:
Chris Klinefelter, 402-595-4154
www.conagrafoods.com
SOURCE: ConAgra Foods, Inc.