New Jersey State of Incorporation |
Commission File Number 1-3822 |
21-0419870 I.R.S. Employer Identification No. |
o | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |
o | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |
o | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |
o | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-(c)) |
(d) | Exhibits |
99.1 | Release dated September 2, 2011 announcing financial results for the quarter and year ended July 31, 2011. |
CAMPBELL SOUP COMPANY | ||||
(Registrant) |
||||
Date: September 2, 2011 | By: | /s/ B. Craig Owens | ||
B. Craig Owens | ||||
Senior Vice President Chief Financial Officer and Chief Administrative Officer |
2
Exhibit No. | Description | |
99.1
|
Release dated September 2, 2011 announcing financial results for the quarter and year ended July 31, 2011. |
CONTACTS:
|
Anthony Sanzio (Media) | |
(856) 968-4390 | ||
Jennifer Driscoll (Analysts/Investors) | ||
(856) 342-6081 |
| Sales Increased 6 Percent to $1.607 Billion; Excluding Currency, Organic Sales Increased 1 Percent | |
| Strong Performances in Global Baking and Snacking, International Simple Meals and Beverages and North America Foodservice | |
| U.S. Simple Meals Sales Decreased 8 Percent |
2
▪ | Volume and mix subtracted 2 percent | ||
▪ | Price and sales allowances added 2 percent | ||
▪ | Decreased promotional spending added 1 percent | ||
▪ | Currency added 5 percent |
▪ | Gross margin was 39.8 percent compared with 40.4 percent a year ago. The decline in gross margin percentage was primarily due to cost inflation and unfavorable mix, partly offset by productivity improvements, higher selling prices and reduced promotional spending. | ||
▪ | Marketing and selling expenses decreased 11 percent to $196 million compared with $221 million in the prior year, primarily due to lower advertising expenditures. | ||
▪ | Administrative expenses increased $3 million to $170 million, primarily due to the impact of currency. | ||
▪ | Earnings before interest and taxes (EBIT) were $169 million compared with $187 million in the prior-year quarter. Excluding items impacting comparability, adjusted EBIT in the current quarter was $232 million. Adjusted EBIT increased 24 percent primarily |
3
due to earnings gains in International Simple Meals and Beverages, North America Foodservice and Global Baking and Snacking, and the favorable impact of currency. |
▪ | Adjusted net earnings per share were $0.43 in the current quarter compared with net earnings per share of $0.33 in the prior-year quarter, an increase of 30 percent. Earnings per share also benefited from fewer outstanding shares reflecting the impact of the companys share repurchase programs. |
| Sales Increased 1 Percent to $7.719 Billion | |
| Global Baking and Snacking Sales Increased 9 Percent | |
| U.S. Simple Meals Sales Decreased 6 Percent | |
| Earnings Gains in Global Baking and Snacking, North America Foodservice and International Simple Meals and Beverages |
▪ | Volume and mix subtracted 1 percent | ||
▪ | Price and sales allowances added 1 percent | ||
▪ | Increased promotional spending subtracted 1 percent | ||
▪ | Currency added 2 percent |
▪ | Gross margin was 40.2 percent compared with 41.0 percent a year ago. The decline in gross margin percentage was primarily due to cost inflation as well as higher plant costs, and increased |
4
promotional spending, partly offset by productivity improvements and higher selling prices. |
▪ | Marketing and selling expenses declined 5 percent to $1.007 billion, primarily due to lower advertising and lower selling expense, partly offset by the impact of currency. | ||
▪ | Administrative expenses increased $7 million to $612 million, primarily due to the impact of currency. | ||
▪ | EBIT was $1.279 billion compared with $1.348 billion in the prior year. Excluding items impacting comparability in both periods, adjusted EBIT declined 1 percent to $1.342 billion compared to adjusted EBIT of $1.360 billion. The decrease was primarily due to lower earnings in U.S. Simple Meals and U.S. Beverages, partly offset by gains across the balance of the portfolio and the favorable impact of currency. | ||
▪ | Cash flow from operations was $1.142 billion compared with $1.057 billion in the year-ago period. The current-year cash flow reflected the benefit of lower pension contributions and higher cash earnings, partly offset by higher working capital requirements. | ||
▪ | In fiscal 2011, Campbell repurchased 21 million shares for $728 million under its June 2008 strategic share repurchase program and its practice of buying back shares sufficient to offset those issued under incentive compensation plans. The June 2008 strategic share repurchase program was completed during the fourth quarter of fiscal 2011. In June 2011, Campbell announced that its Board of Directors authorized a new share repurchase program, with no expiration date, to purchase up to $1 billion of its outstanding shares. |
5
▪ | Volume and mix subtracted 11 percent | ||
▪ | Decreased promotional spending added 3 percent |
▪ | Sales of Campbells condensed soups decreased 10 percent, with declines in both eating and cooking varieties. | ||
▪ | Sales of ready-to-serve soups decreased 5 percent, reflecting declines in Select Harvest canned soups and microwavable soups. | ||
▪ | Broth sales declined 11 percent. |
▪ | Volume and mix subtracted 5 percent | ||
▪ | Increased promotional spending subtracted 1 percent |
6
▪ | Volume and mix added 3 percent | ||
▪ | Price and sales allowances subtracted 1 percent | ||
▪ | Increased promotional spending subtracted 3 percent |
▪ | Volume and mix added 2 percent | ||
▪ | Increased promotional spending subtracted 2 percent |
7
▪ | Volume and mix added 3 percent |
▪ | Price and sales allowances added 5 percent |
▪ | Increased promotional spending subtracted 1 percent |
▪ | Currency added 10 percent |
▪ | Sales at Pepperidge Farm increased, reflecting higher selling prices and volume gains. |
| In cookies and crackers, sales increases were fueled by solid gains in Goldfish snack crackers, the launch of Milano Melts cookies and growth in Chocolate Chunk Crispy cookies. | ||
| Sales of fresh bakery products were comparable to the prior year. | ||
| Sales of frozen products increased, driven by gains in Garlic Toast and the launch of Artisan Stone Baked rolls. |
▪ | Sales at Arnotts increased due to currency and sales gains in savory crackers, led by Shapes, and Tim Tam chocolate biscuits. |
▪ | Volume and mix added 3 percent | ||
▪ | Price and sales allowances added 2 percent | ||
▪ | Increased promotional spending subtracted 1 percent | ||
▪ | Currency added 5 percent |
8
▪ | Volume and mix subtracted 3 percent | ||
▪ | Price and sales allowances added 1 percent | ||
▪ | Decreased promotional spending added 2 percent | ||
▪ | Currency added 12 percent |
▪ | In Europe, sales increased primarily due to the favorable impact of currency and increased sales in Belgium. |
▪ | In the Asia Pacific region, sales increased due to currency, partially offset by lower soup sales in Australia. |
▪ | In Canada, sales increased primarily due to currency and increased sales of soup. |
▪ | Increased promotional spending subtracted 1 percent |
▪ | Currency added 4 percent |
9
▪ | Volume and mix added 1 percent |
▪ | Price and sales allowances subtracted 1 percent |
▪ | Decreased promotional spending added 8 percent |
▪ | Currency added 2 percent |
▪ | Volume and mix subtracted 1 percent |
▪ | Decreased promotional spending added 2 percent |
▪ | Currency added 1 percent |
10
11
12
THREE MONTHS ENDED | ||||||||
July 31, | August 1, | |||||||
2011 | 2010 | |||||||
Net sales |
$ | 1,607 | $ | 1,518 | ||||
Costs and expenses |
||||||||
Cost of products sold |
968 | 905 | ||||||
Marketing and selling expenses |
196 | 221 | ||||||
Administrative expenses |
170 | 167 | ||||||
Research and development expenses |
34 | 35 | ||||||
Other expenses |
7 | 3 | ||||||
Restructuring charges |
63 | | ||||||
Total costs and expenses |
1,438 | 1,331 | ||||||
Earnings before interest and taxes |
169 | 187 | ||||||
Interest, net |
26 | 26 | ||||||
Earnings before taxes |
143 | 161 | ||||||
Taxes on earnings |
45 | 48 | ||||||
Net earnings |
98 | 113 | ||||||
Net loss attributable to noncontrolling interests |
2 | | ||||||
Net earnings attributable to Campbell Soup Company |
$ | 100 | $ | 113 | ||||
Per share basic |
||||||||
Net earnings attributable to Campbell Soup Company |
$ | .31 | $ | .33 | ||||
Dividends |
$ | .29 | $ | .275 | ||||
Weighted average shares outstanding basic |
321 | 338 | ||||||
Per share assuming dilution |
||||||||
Net earnings attributable to Campbell Soup Company |
$ | .31 | $ | .33 | ||||
Weighted average shares outstanding assuming dilution |
323 | 341 | ||||||
TWELVE MONTHS ENDED | ||||||||
July 31, | August 1, | |||||||
2011 | 2010 | |||||||
Net sales |
$ | 7,719 | $ | 7,676 | ||||
Costs and expenses |
||||||||
Cost of products sold |
4,616 | 4,526 | ||||||
Marketing and selling expenses |
1,007 | 1,058 | ||||||
Administrative expenses |
612 | 605 | ||||||
Research and development expenses |
129 | 123 | ||||||
Other expenses |
13 | 4 | ||||||
Restructuring charges |
63 | 12 | ||||||
Total costs and expenses |
6,440 | 6,328 | ||||||
Earnings before interest and taxes |
1,279 | 1,348 | ||||||
Interest, net |
111 | 106 | ||||||
Earnings before taxes |
1,168 | 1,242 | ||||||
Taxes on earnings |
366 | 398 | ||||||
Net earnings |
802 | 844 | ||||||
Net loss attributable to noncontrolling interests |
3 | | ||||||
Net earnings attributable to Campbell Soup Company |
$ | 805 | $ | 844 | ||||
Per share basic |
||||||||
Net earnings attributable to Campbell Soup Company |
$ | 2.44 | $ | 2.44 | ||||
Dividends |
$ | 1.145 | $ | 1.075 | ||||
Weighted average shares outstanding basic |
326 | 340 | ||||||
Per share assuming dilution |
||||||||
Net earnings attributable to Campbell Soup Company |
$ | 2.42 | $ | 2.42 | ||||
Weighted average shares outstanding assuming
dilution |
329 | 343 | ||||||
THREE MONTHS ENDED | ||||||||||||
July 31, | August 1, | Percent | ||||||||||
2011 | 2010 | Change | ||||||||||
Sales |
||||||||||||
Contributions: |
||||||||||||
U.S. Simple Meals |
$ | 431 | $ | 467 | (8 | %) | ||||||
U.S. Beverages |
176 | 177 | (1 | %) | ||||||||
Global Baking and Snacking |
559 | 479 | 17 | % | ||||||||
International Simple Meals and Beverages |
316 | 281 | 12 | % | ||||||||
North America Foodservice |
125 | 114 | 10 | % | ||||||||
Total sales |
$ | 1,607 | $ | 1,518 | 6 | % | ||||||
Earnings |
||||||||||||
Contributions: |
||||||||||||
U.S. Simple Meals |
$ | 101 | $ | 97 | 4 | % | ||||||
U.S. Beverages |
30 | 42 | (29 | %) | ||||||||
Global Baking and Snacking |
92 | 73 | 26 | % | ||||||||
International Simple Meals and Beverages |
24 | 6 | 300 | % | ||||||||
North America Foodservice |
16 | 3 | 433 | % | ||||||||
Total operating earnings |
263 | 221 | 19 | % | ||||||||
Unallocated corporate expenses |
31 | 34 | ||||||||||
Restructuring charges |
63 | | ||||||||||
Earnings before interest and taxes |
169 | 187 | (10 | %) | ||||||||
Interest, net |
26 | 26 | ||||||||||
Taxes on earnings |
45 | 48 | ||||||||||
Net earnings |
98 | 113 | (13 | %) | ||||||||
Net loss attributable to noncontrolling interests |
2 | | ||||||||||
Net earnings attributable to Campbell Soup Company |
$ | 100 | $ | 113 | (12 | %) | ||||||
Per share assuming dilution |
||||||||||||
Net earnings attributable to Campbell Soup Company |
$ | .31 | $ | .33 | (6 | %) | ||||||
TWELVE MONTHS ENDED | ||||||||||||
July 31, | August 1, | Percent | ||||||||||
2011 | 2010 | Change | ||||||||||
Sales |
||||||||||||
Contributions: |
||||||||||||
U.S. Simple Meals |
$ | 2,751 | $ | 2,938 | (6 | %) | ||||||
U.S. Beverages |
759 | 762 | | % | ||||||||
Global Baking and Snacking |
2,156 | 1,975 | 9 | % | ||||||||
International Simple Meals and Beverages |
1,463 | 1,423 | 3 | % | ||||||||
North America Foodservice |
590 | 578 | 2 | % | ||||||||
Total sales |
$ | 7,719 | $ | 7,676 | 1 | % | ||||||
Earnings |
||||||||||||
Contributions: |
||||||||||||
U.S. Simple Meals |
$ | 657 | $ | 737 | (11 | %) | ||||||
U.S. Beverages |
182 | 206 | (12 | %) | ||||||||
Global Baking and Snacking |
355 | 322 | 10 | % | ||||||||
International Simple Meals and Beverages |
185 | 161 | 15 | % | ||||||||
North America Foodservice |
82 | 55 | 49 | % | ||||||||
Total operating earnings |
1,461 | 1,481 | (1 | %) | ||||||||
Unallocated corporate expenses |
119 | 121 | ||||||||||
Restructuring charges |
63 | 12 | ||||||||||
Earnings before interest and taxes |
1,279 | 1,348 | (5 | %) | ||||||||
Interest, net |
111 | 106 | ||||||||||
Taxes on earnings |
366 | 398 | ||||||||||
Net earnings |
802 | 844 | (5 | %) | ||||||||
Net loss attributable to noncontrolling interests |
3 | | ||||||||||
Net earnings attributable to Campbell Soup Company |
$ | 805 | $ | 844 | (5 | %) | ||||||
Per share assuming dilution |
||||||||||||
Net earnings attributable to Campbell Soup Company |
$ | 2.42 | $ | 2.42 | | % | ||||||
July 31, | August 1, | |||||||
2011 | 2010 | |||||||
Current assets |
$ | 1,963 | $ | 1,687 | ||||
Plant assets, net |
2,103 | 2,051 | ||||||
Intangible assets, net |
2,660 | 2,428 | ||||||
Other assets |
136 | 110 | ||||||
Total assets |
$ | 6,862 | $ | 6,276 | ||||
Current liabilities |
$ | 1,989 | $ | 2,065 | ||||
Long-term debt |
2,427 | 1,945 | ||||||
Other liabilities |
1,350 | 1,337 | ||||||
Total equity |
1,096 | 929 | ||||||
Total liabilities and equity |
$ | 6,862 | $ | 6,276 | ||||
Total debt |
$ | 3,084 | $ | 2,780 | ||||
Cash and cash equivalents |
$ | 484 | $ | 254 | ||||
% Change versus Prior Year | ||||||||
Fiscal 2011 | Fiscal 2011 | |||||||
Fourth Quarter | Year-to-Date | |||||||
Volume and Mix |
-2 | % | -1 | % | ||||
Price and Sales Allowances |
2 | % | 1 | % | ||||
Increased Promotional Spending |
1 | % | -1 | % | ||||
Organic Growth |
1 | % | -1 | % | ||||
Currency |
5 | % | 2 | % | ||||
Total |
6 | % | 1 | % | ||||
(1) | In the fourth quarter of fiscal 2011, the company announced a series of initiatives to improve supply chain efficiency and reduce overhead costs across the organization to help fund plans to drive the growth of the business. The company also announced its intent to close its office in Moscow and exit the Russian market. In the fourth quarter of fiscal 2011, the company recorded pre-tax restructuring charges of $63 million ($41 million after tax or $.12 per share) related to these initiatives. | ||
In fiscal 2008, the company announced initiatives to improve operational efficiency and long-term profitability, including selling certain salty snack food brands and assets in Australia, closing certain production facilities in Australia and Canada, and streamlining the companys management structure. In the third quarter of fiscal 2010, the company recorded pre-tax restructuring charges of $12 million ($8 million after tax or $0.02 per share) for pension benefit costs related to these initiatives. | |||
(2) | In the third quarter of fiscal 2010, the company recorded deferred tax expense of $10 million ($0.03 per share) due to the enactment of U.S. health care legislation in March 2010. The law changed the tax treatment of subsidies to companies that provide prescription drug benefits to retirees. Accordingly, the company recorded the non-cash charge to reduce the value of the deferred tax asset associated with the subsidy. |
Fourth Quarter | ||||||||||||
(millions, except per share amounts) | July 31, 2011 | Aug. 1, 2010 | % Change | |||||||||
Earnings before interest and taxes, as reported |
$ | 169 | $ | 187 | ||||||||
Add: Restructuring charges (1) |
63 | | ||||||||||
Adjusted Earnings before interest and taxes |
$ | 232 | $ | 187 | 24 | % | ||||||
Interest, net, as reported |
$ | 26 | $ | 26 | ||||||||
Adjusted Earnings before taxes |
$ | 206 | $ | 161 | ||||||||
Taxes on earnings, as reported |
$ | 45 | $ | 48 | ||||||||
Add: Tax benefit from restructuring charges (1) |
22 | | ||||||||||
Adjusted Taxes on earnings |
$ | 67 | $ | 48 | ||||||||
Adjusted effective income tax rate |
32.5 | % | 29.8 | % | ||||||||
Net earnings attributable to Campbell Soup Company, as
reported |
$ | 100 | $ | 113 | ||||||||
Add: Net adjustment from restructuring charges (1) |
41 | | ||||||||||
Adjusted Net earnings attributable to Campbell Soup
Company |
$ | 141 | $ | 113 | 25 | % | ||||||
Diluted net earnings per share attributable to Campbell
Soup Company, as reported |
$ | 0.31 | $ | 0.33 | ||||||||
Add: Net adjustment from restructuring charges (1) |
0.12 | | ||||||||||
Adjusted Diluted net earnings per share attributable to
Campbell Soup Company |
$ | 0.43 | $ | 0.33 | 30 | % | ||||||
Year-to-Date | ||||||||||||
(millions, except per share amounts) | July 31, 2011 | Aug. 1, 2010 | % Change | |||||||||
Earnings before interest and taxes, as reported |
$ | 1,279 | $ | 1,348 | ||||||||
Add: Restructuring charges (1) |
63 | 12 | ||||||||||
Adjusted Earnings before interest and taxes |
$ | 1,342 | $ | 1,360 | (1 | )% | ||||||
Interest, net, as reported |
$ | 111 | $ | 106 | ||||||||
Adjusted Earnings before taxes |
$ | 1,231 | $ | 1,254 | ||||||||
Taxes on earnings, as reported |
$ | 366 | $ | 398 | ||||||||
Add: Tax benefit from restructuring charges (1) |
22 | 4 | ||||||||||
Deduct: Tax expense from health care legislation (2) |
| (10 | ) | |||||||||
Adjusted Taxes on earnings |
$ | 388 | $ | 392 | ||||||||
Adjusted effective income tax rate |
31.5 | % | 31.3 | % | ||||||||
Net earnings attributable to Campbell Soup Company, as
reported |
$ | 805 | $ | 844 | ||||||||
Add: Net adjustment from restructuring charges (1) |
41 | 8 | ||||||||||
Add: Tax expense from health care legislation (2) |
| 10 | ||||||||||
Adjusted Net earnings attributable to Campbell Soup
Company |
$ | 846 | $ | 862 | (2 | )% | ||||||
Diluted net earnings per share attributable to Campbell
Soup Company, as reported |
$ | 2.42 | $ | 2.42 | ||||||||
Add: Net adjustment from restructuring charges (1) |
0.12 | 0.02 | ||||||||||
Add: Tax expense from health care legislation (2) |
| 0.03 | ||||||||||
Adjusted Diluted net earnings per share attributable to
Campbell Soup Company |
$ | 2.54 | $ | 2.47 | 3 | % | ||||||
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