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Heinz Reports Double-Digit EPS Growth To $0.90 From Continuing Operations; Reaffirms Previously Announced Fiscal 2013 Full-Year Sales And Profit Outlook

ABOUT HEINZ: H.J. Heinz Company, offering “Good Food Every Day”™ is one of the world’s leading marketers and producers of healthy, convenient and affordable foods specializing in ketchup, sauces, meals, soups, snacks and infant nutrition. Heinz provides superior quality, taste and nutrition for all eating occasions whether in the home, restaurants, the office or “on-the-go.” Heinz is a global family of leading branded products, including Heinz ® Ketchup, sauces, soups, beans, pasta and infant foods (representing over one third of Heinz’s total sales), Ore-Ida ® potato products, Weight Watchers ® Smart Ones ® entrées, T.G.I. Friday’s ® snacks, and Plasmon infant nutrition. Heinz is famous for its iconic brands on six continents, showcased by Heinz ® Ketchup, The World’s Favorite Ketchup ®.

 
 

H.J. Heinz Company and Subsidiaries

Consolidated Statements of Income

           
 
Second Quarter Ended Six Months Ended
(In Thousands, Except per Share Amounts)

October 28, 2012 FY 2013

 

October 26, 2011 FY 2012

October 28, 2012 FY 2013

 

October 26, 2011 FY 2012

Sales $ 2,827,210 $ 2,813,964 $ 5,618,434 $ 5,646,562
Cost of products sold 1,813,801   1,846,345   3,603,037   3,695,311  
Gross profit 1,013,409 967,619 2,015,397 1,951,251
Selling, general and administrative expenses 621,712   609,474   1,213,362   1,222,568  
Operating income 391,697 358,145 802,035 728,683
Interest income 7,833 9,191 16,191 18,968
Interest expense 69,963 75,177 143,334 146,132
Other (expense)/income, net (6,264 ) 1,244   (3,998 ) (1,036 )
Income from continuing operations before income taxes 323,303 293,403 670,894 600,483
Provision for income taxes 31,037   52,999   92,624   124,505  
Income from continuing operations 292,266 240,404 578,270 475,978
Loss from discontinued operations, net of tax (678 ) (268 ) (22,004 ) (883 )
Net income 291,588 240,136 556,266 475,095
Less: Net income attributable to the noncontrolling interest 2,144   3,127   8,795   11,972  
Net income attributable to H.J. Heinz Company $ 289,444   $ 237,009   $ 547,471   $ 463,123  
Income/(loss) per common share:
Diluted
Continuing operations attributable to H.J. Heinz Company common shareholders $ 0.90 $ 0.73 $ 1.76 $ 1.43
Discontinued operations attributable to H.J. Heinz Company common shareholders     (0.07 )  
Net income attributable to H.J. Heinz Company common shareholders $ 0.90   $ 0.73   $ 1.70   $ 1.43  
Average common shares outstanding - diluted 323,058   323,561   322,969   323,910  
Basic
Continuing operations attributable to H.J. Heinz Company common shareholders $ 0.91 $ 0.74 $ 1.78 $ 1.44
Discontinued operations attributable to H.J. Heinz Company common shareholders     (0.07 )  
Net income attributable to H.J. Heinz Company common shareholders $ 0.90   $ 0.74   $ 1.71   $ 1.44  
Average common shares outstanding - basic 320,492   320,876   320,415   321,158  
Cash dividends per share $ 0.515   $ 0.48   $ 1.03   $ 0.96  
Amounts attributable to H.J. Heinz Company common shareholders:
Income from continuing operations, net of tax $ 290,122 $ 237,277 $ 569,475 $ 464,006
Loss from discontinued operations, net of tax (678 ) (268 ) (22,004 ) (883 )
Net income $ 289,444   $ 237,009   $ 547,471   $ 463,123  
(Totals may not add due to rounding)
 
 
 

H.J. Heinz Company and Subsidiaries

Segment Data

 
           
Second Quarter Ended Six Months Ended
(Amounts in thousands)

October 28, 2012 FY 2013

 

October 26, 2011 FY 2012

October 28, 2012 FY 2013

 

October 26, 2011 FY 2012

Net external sales:
North American Consumer Products $ 794,957 $ 794,271 $ 1,553,809 $ 1,568,892
Europe 808,427 844,187 1,586,343 1,682,019
Asia/Pacific 606,283 592,825 1,264,216 1,263,591
U.S. Foodservice 348,028 334,436 663,374 642,403
Rest of World 269,515   248,245   550,692   489,657  
Consolidated Totals $ 2,827,210   $ 2,813,964   $ 5,618,434   $ 5,646,562  
Operating income (loss):
North American Consumer Products $ 190,341 $ 201,927 $ 373,772 $ 392,705
Europe 140,398 144,470 277,592 281,909
Asia/Pacific 49,784 39,989 122,613 101,234
U.S. Foodservice 44,223 34,886 80,873 67,417
Rest of World 27,094 32,119 58,107 64,415
Other:
Non-Operating (60,143 ) (57,929 ) (110,922 ) (101,169 )
Productivity initiatives (a)   (37,317 )   (77,828 )
Consolidated Totals $ 391,697   $ 358,145   $ 802,035   $ 728,683  
 
The company's revenues are generated via the sale of products in the following categories:
 
Ketchup and Sauces $ 1,315,116 $ 1,268,332 $ 2,634,416 $ 2,578,812
Meals and Snacks 1,072,892 1,090,462 2,043,544 2,081,912
Infant/Nutrition 285,254 301,508 581,972 623,622
Other 153,948   153,662   358,502   362,216  
Total $ 2,827,210   $ 2,813,964   $ 5,618,434   $ 5,646,562  
 

(a) Includes costs in Fiscal 2012 associated with targeted workforce reductions, asset write-offs associated with factory closures and other implementation costs in order to increase manufacturing effectiveness and accelerate productivity on a global scale. Other implementation costs primarily include professional fees and relocation costs for the establishment of a European supply chain hub in the Netherlands.

 
 

H.J. Heinz Company and Subsidiaries

Non-GAAP Performance Ratios

 

The Company reports its financial results in accordance with accounting principles generally accepted in the United States of America ("GAAP"). However, management believes that certain non-GAAP performance measures and ratios, used in managing the business, may provide users of this financial information with additional meaningful comparisons between current results and results in prior periods. Non-GAAP financial measures should be viewed in addition to, and not as an alternative for, the Company's reported results prepared in accordance with GAAP. The following table provides the calculation of the non-GAAP performance ratios discussed in the Company's press release dated November 20, 2012:

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