Pinnacle Foods Finance LLC Reports Fiscal 2011 Third Quarter Results
PARSIPPANY, N.J. (November 9, 2011)--Pinnacle Foods Finance LLC announced its financial results for the third quarter ended September 25, 2011. Net sales were $575 million, a 6% increase compared to $542 million in last year's third quarter. Net earnings were $13 million compared to a $(12) million loss in the third quarter last year which included $13 million after tax charges related to our refinancing. For the first nine months of 2011, net sales were $1.78 billion, a 0.5% increase compared to $1.77 billion in last year's first nine months. Net earnings were $41 million compared to $6 million in the first nine months last year.
Pinnacle's Chief Executive Officer, Bob Gamgort said, “Our increased investment in consumer marketing and innovation delivered strong sales growth in the quarter. Further, we began to realize the benefits of retail pricing actions previously implemented and have made sequential improvement in our year on year gross margin comparisons."
Third Quarter 2011
Net sales were $575 million in the third quarter of 2011 compared to $542 million in last year's third quarter, a 6% increase. Net sales in our North American retail businesses increased 7%, 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, Hungryman® frozen dinners, Armour® canned meats and Nalley® chili. During the quarter, we introduced several innovative new products, including Birds Eye® Steamfresh® Chef's Favorites® restaurant style vegetable blends, Vlasic® Reduced Sodium pickles, Vlasic® Farmers Garden® refrigerated pickles and Log Cabin® all natural pancake mix.
Earnings before interest and taxes (EBIT) were $65 million in the third quarter of 2011, compared to $54 million a year ago. EBIT was positively impacted by higher sales volumes, pricing actions and productivity improvements, partially offset by the incremental advertising investment and higher input costs. Consolidated EBITDA, as defined in our borrowing agreements, was $93 million in the third quarter of 2011 compared to $90 million in the third quarter of 2010. Consolidated EBITDA is defined below under “Non-GAAP Financial Matters”.
Earnings were positively impacted by lower interest expense, the result of last year's refinancing related charges.
This year's quarterly tax rate was 3%, due to two discrete items. Excluding these items, the tax rate would be approximately 38.5%.
First Nine Months 2011
Net sales were $1.78 billion in the first nine months of 2011 compared to $1.77 billion in last year's first nine months, a 0.5% increase. Net sales in our North American retail businesses increased 2%, 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, Van de Kamp's® and Mrs. Paul's® frozen seafood, Log Cabin® syrups, Armour® canned meat and Nalley® chili. Contributing to the year to date sales increase were the launches of our innovative new products. In addition to the third quarter launches noted above, we introduced in our first half Birds Eye® Voila!® Family Size complete bagged meals, Birds Eye® Steamfresh® Family Size vegetables, Hungry-Man® frozen dinner Pub Favorites, Van de Kamp's® and Mrs. Paul's® 90 calories fish fillets and Aunt Jemima® Oatmeal pancakes, as well as a complete line of Swanson® Skillet meals in Canada.
Earnings before interest and taxes (EBIT) were $209 million in the first nine months of 2011, compared to $187 million a year ago. The EBIT reflects the net sales increase, higher commodity costs, offset by improved productivity and pricing, as well as the write up to fair value of inventories of $37 million in 2010 associated with the Birds Eye Foods, Inc. acquisition. Consolidated EBITDA, as defined in our borrowing agreements, was $301 million in the first nine months of 2011 compared to $333 million in the first nine months of 2010, as detailed below.
Nine month earnings were positively impacted by lower interest expense, as mentioned above. This year's tax rate was 24.3%. Net cash provided by operating activities in the first nine months of 2011 was negatively impacted by the required pre-build of inventories associated with our previously announced plant closings.
Conference Call Information
We will hold a conference call on Thursday, November 10, 2011 at 2:00PM (ET) to discuss results for the quarter ended September 25, 2011.
To access the call, you can dial (866) 244-4518 and reference conference name: Pinnacle Foods Q3 Earnings Call. A replay of the call will be available beginning November 10, 2011 at 5:30 PM (ET) until November 25, 2011 by dialing 1-888-266-2081 and referencing Access Code 1557227.
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 more than 4,300 people in North America. 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® pickles, peppers, and relish, Mrs. Butterworth's® and Log Cabin® 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 Steam fresh®, C&W®, McKenzie's®, and Fresh like® vegetables, Birds Eye Voila!® meals, Aunt Jemima® frozen breakfasts, Swanson® and Hungry-Man® dinners and entrees, Van de Kamp's® and Mrs. Paul's® seafood, Lender's® bagels and Celeste® frozen 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.