Pinnacle Foods Finance reports Q4 net loss of US$87M, compared with net earnings of US$16M in year-ago period, amid impact of non-cash impairment charges of US$129M over course of year; net sales up 3.6% to US$686M
PARSIPPANY, New Jersey
March 13, 2012
– Pinnacle Foods Finance LLC announced its financial results for the fourth quarter and fiscal year ended December 25, 2011. Net sales in the fourth quarter were $686 million, a 3.6% increase compared to $662 million last year. Net loss in the fourth quarter was $(87) million compared to net earnings of $16 million last year. Excluding the impact of non-cash impairment charges of $129 million in 2011 and $18 million in 2010, fourth quarter net earnings were $42 million in 2011 compared to $34 million in 2010, an increase of 24%.
For the 2011 fiscal year, net sales were $2.47 billion, a 1.3% increase compared to $2.44 billion in 2010. Fiscal 2011 net loss was $(47) million compared to net earnings of $22 million in 2010. Excluding the impact of non-cash impairment charges of $129 million in 2011 and $18 million in 2010, net earnings were $82 million in 2011 compared to $40 million in 2010, an increase of 108%.
Pinnacle's Chief Executive Officer, Bob Gamgort said, “Against the backdrop of an especially challenging food industry in 2011, I am pleased to report that Pinnacle Foods performed well. Our ongoing focus on innovation and marketing against our Leadership Brands again drove organic growth, and our cost management discipline and pricing actions allowed us to largely offset the effects of inflation while continuing to drive strong cash flow generation.”
Fourth Quarter 2011
Net sales were $686 million in the fourth quarter of 2011 compared to $662 million last year, a 3.6% increase. Net sales in our North American retail businesses increased 3.8%, excluding the impact of the exited Birds Eye® Steamfresh® meals and U. S. Swanson® meals businesses. We experienced strong growth in Birds Eye® Voila!® complete bagged meals, Birds Eye® Steamfresh® vegetables, Duncan Hines® baking mixes and frostings,and Mrs. Butterworth's® table syrups.
Earnings before interest and taxes (EBIT) were $122 million in the fourth quarter of 2011 compared to $107 million a year ago, excluding the impact of the non-cash impairment charges, an increase of 14%. EBIT was positively impacted by net pricing actions and productivity improvements which more than offset higher input costs. In addition, reduced SG&A expenses were partially offset by the incremental advertising investment behind the Duncan Hines® and Birds Eye® brands. Management EBITDA was $149 million in the fourth quarter of 2011 compared to $137 million last year, an increase of 9%. Management EBITDA is defined below under “Non-GAAP Financial Matters”.
Fiscal Year 2011
Net sales were $2.47 billion in fiscal 2011 compared to $2.44 billion last year, a 1.3% increase. Net sales in our North American retail businesses increased 2.5%, excluding the impact of the exited Birds Eye® Steamfresh® meals and U. S. Swanson® meals businesses. We experienced strong growth in Birds Eye® Voila!® complete bagged meals, Birds Eye® Steamfresh® vegetables, and Log Cabin® syrups. Contributing to the 2011 sales increase were the launches of our innovative new products, including Birds Eye® Voila!® Family Size complete bagged meals, Birds Eye® Steamfresh® Family Size vegetables, Birds Eye® Steamfresh® Chef's Favorites® restaurant style vegetable blends, Hungry-Man® Pub Favorites, Van de Kamp's® and Mrs. Paul's® 90 calories fish fillets, Vlasic® Reduced Sodium and Farmer's Garden® pickles and Log Cabin® all natural pancake mix, as well as a complete line of Swanson® Skillet meals in Canada.
Earnings before interest and taxes (EBIT) excluding the impact of the non-cash impairment charges were $331 million in 2011 compared to $294 million a year ago, an increase of 13%. The EBIT reflects our ongoing productivity efforts and net pricing actions offsetting inflation with incremental synergies benefiting the bottom line. Also we increased our investment in advertising in 2011. 2010 was adversely impacted by the write up to fair value of the acquired Birds Eye Foods, Inc. inventories of $37 million. Management EBITDA, as defined and detailed below, was $450 million in 2011 compared to $447 million in 2010, an increase of 1%.
Conference Call Information
We will hold a conference call on Tuesday, March 13, 2012 at 3:00 PM (ET) to discuss results for the quarter and year ended December 25, 2011.
To access the call, you can dial (866) 814-1914 and reference conference name: Pinnacle Foods Q4 Earnings Call. A replay of the call will be available beginning March 13, 2012 at 6:00 PM (ET) until March 27, 2012 by dialing 1-888-266-2081 and referencing Access Code 1571948.
About Pinnacle Foods Finance LLC
Millions of times a day in more than 85% of American households, consumers reach for Pinnacle Foods brands. We are a leading producer, marketer and distributor of high-quality branded food products, which have been trusted household names for decades. Headquartered in Parsippany, NJ, our business employs an average of approximately 4,300 employees. We are a leader in the shelf stable and frozen foods segments and our brands hold the #1 or #2 market position in 8 out of 12 major category segments in which they compete. Our Duncan Hines Grocery Division manages brands such as Duncan Hines® baking mixes and frostings, Vlasic® shelf-stable pickles, Comstock® and Wilderness® pie and pastry fillings, Mrs. Butterworth's® and Log Cabin® table syrups, Armour® canned meats, Nalley® and Brooks® chili and chili ingredients, and Open Pit® barbecue sauces. Our Birds Eye Frozen Division manages brands such as Birds Eye®, Birds Eye Steamfresh®, C&W®, McKenzie's®, and Fresh like® vegetables, Birds Eye Voila!® complete bagged meals, Aunt Jemima® frozen breakfasts, Swanson® and Hungry-Man® dinners and entrées, Van de Kamp's® and Mrs. Paul's® seafood, Lender's® bagels and Celeste® pizza. Our Specialty Foods Division manages Tim's Cascade Snacks®, Hawaiian™ Kettle Style Potato Chips, Snyder of Berlin® and Husman's® in addition to our food service and private label businesses. Further information is available at www.pinnaclefoods.com.
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