-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, KgD9rw6yDG66E1LndflqthFxAXGCZtEi/DqsZXPnfi01Hi+pgwCOR7fW6SxpEVxB WI/3dKx8sImFPYR5w57dfw== 0000950152-03-008043.txt : 20030903 0000950152-03-008043.hdr.sgml : 20030903 20030903170413 ACCESSION NUMBER: 0000950152-03-008043 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20030903 ITEM INFORMATION: FILED AS OF DATE: 20030903 FILER: COMPANY DATA: COMPANY CONFORMED NAME: HEINZ H J CO CENTRAL INDEX KEY: 0000046640 STANDARD INDUSTRIAL CLASSIFICATION: CANNED, FROZEN & PRESERVED FRUIT, VEG & FOOD SPECIALTIES [2030] IRS NUMBER: 250542520 STATE OF INCORPORATION: PA FISCAL YEAR END: 0430 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-03385 FILM NUMBER: 03879678 BUSINESS ADDRESS: STREET 1: 600 GRANT ST CITY: PITTSBURGH STATE: PA ZIP: 15219 BUSINESS PHONE: 4124565700 MAIL ADDRESS: STREET 1: P O BOX 57 STREET 2: P O BOX 57 CITY: PITTSBURGH STATE: PA ZIP: 15230 8-K 1 j0289001e8vk.txt H.J. HEINZ 8-K ============================================================================ SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report (Date of Earliest Event Reported): September 3, 2003 H. J. HEINZ COMPANY (Exact name of registrant as specified in its charter) Pennsylvania 1-3385 25-0542520 (State of Incorporation) (Commission File Number) (I.R.S. Employer Identification No.) 600 Grant Street, Pittsburgh, 15219 Pennsylvania (Zip Code) (Address of principal executive offices) 412-456-5700 (Registrant's telephone number, including area code) Not Applicable (Former name or former address, if changed since last report) ============================================================================= ITEM 12. RESULTS OF OPERATIONS AND FINANCIAL CONDITION H. J. Heinz Company wishes to disclose its press release dated September 3, 2003 furnished herewith as Exhibit 99.* INDEX TO EXHIBITS Exhibit Number (Referenced to Item 601 of Regulation S-K) Description of Exhibit - --------------- ---------------------- 99 (furnished but not filed)* H.J. Heinz Company Press Release dated September 3, 2003 * The Exhibit attached to this Form 8-K shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934 (the "Exchange Act") or otherwise subject to liability under that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific reference in such filing. SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. H.J. HEINZ COMPANY By /s/ Arthur Winkleblack ---------------------------------- Arthur Winkleblack Executive Vice President and Chief Financial Officer Dated: September 3, 2003 EXHIBIT INDEX Exhibit NO. Description - ----------- ----------- 99 (furnished but not filed) H. J. Heinz Company Press Release dated September 3, 2003 EX-99 3 j0289001exv99.txt NEWS RELEASE Exhibit 99 NEWS RELEASE [HEINZ Logo] FOR RELEASE UPON RECEIPT HEINZ REPORTS FIRST QUARTER NET INCOME OF $214 MILLION OR 60 CENTS PER SHARE VS. $100 MILLION, OR $0.28 PER SHARE IN THE PRIOR YEAR o EPS OF 53 CENTS PER SHARE FROM CONTINUING OPERATIONS, UP 20% OVER PRIOR YEAR; o EPS OF 51 CENTS PER SHARE FROM CONTINUING OPERATIONS, EXCLUDING SPECIAL ITEMS, UP 9% OVER PRIOR YEAR; o STRONG PERFORMANCE BY FOODSERVICE, GLOBAL KETCHUP AND CONDIMENTS, AND ASIA PACIFIC BUSINESSES; o SALES FROM CONTINUING OPERATIONS UP 3.1% TO $1.90 BILLION; o VOLUME GROWS 2.2%; o IMPROVED SALES MIX AND SKU REDUCTION HELP INCREASE GROSS MARGINS 0.9 POINTS TO 37.5% PITTSBURGH - September 3, 2003 -- H.J. Heinz Company today announced results for the first quarter ended July 30, 2003. Heinz reported net income of $214.0 million, or $0.60 per diluted share, compared with $100.0 million, or $0.28 per diluted share, in the year-earlier quarter. Earnings per share from continuing operations were $0.53 in the current year versus $0.44 in the prior year, which excludes profit associated with the spun-off business units and the effect of a change in accounting in the prior year related to the adoption of SFAS No. 142. Excluding special items and the effect of adopting SFAS No. 142, Heinz reported earnings from continuing operations of $179.8 million or $0.51 per diluted share, which compares with $166.0 million, or $0.47 per diluted share for these operations in the year-earlier quarter. (Comments that follow refer to the results of continuing operations, excluding special items. See attached tables for further details.) Commenting on the first quarter, H.J. Heinz Company Chairman, President and CEO William R. Johnson said: "Heinz's strong first quarter performance indicates continued progress in generating sales, cash and earnings growth, and confirms that Heinz is on track to achieve its EPS, Net Sales and Operating Free Cash Flow (cash from operations less capital expenditures) target ranges for Fiscal 2004. Increased volume and improved mix were key factors in driving growth in sales, gross margins and operating income. We are particularly pleased with the continued strength in our ketchup, condiments and sauces business and the growth in our domestic Foodservice and Asia Pacific businesses, all of which performed exceptionally well. "We also continued the significant progress in our balance sheet and cash management initiatives during the quarter, as reduced Working Capital and, in particular, lower inventories helped improve our Cash Conversion Cycle by 14 days versus the year-ago period. We continued to pare net debt and significantly increased Operating Free Cash Flow while at the same time boosting total consumer and trade marketing spending by nearly 15%. All of these achievements affirm the impact of Heinz's growth strategy and the efficacy of our Four Imperatives - to drive profitable growth; remove clutter; squeeze out costs; and measure and recognize performance." H.J. Heinz Company, P.O. Box 57, Pittsburgh 15230-0057 2 First quarter sales grew by 3.1% to $1.90 billion, driven by favorable volume of 2.2% and foreign exchange translation rates of 7.5%, partially offset by a 0.4% decline in price and a 6.3% decline from divestitures, net of acquisitions. The favorable volume impact is primarily due to increases in the North American Consumer Products, U.S. Foodservice and Asia Pacific segments. EPS from discontinued operations was $0.08 per share in the current quarter, reflecting the favorable settlement of prior-year tax liabilities related to the spun-off businesses, versus $0.07 per share in the year-earlier quarter. (On December 20, 2002, Heinz completed the transaction by which it spun off its U.S. and Canadian pet food, U.S. tuna and retail private label soup, and U.S. infant feeding businesses to its shareholders and then merged these businesses with Del Monte Corporation, a subsidiary of Del Monte Foods Company, NYSE:DLM. The results of the spun-off businesses have been accounted for as discontinued operations.) Heinz's Gross Profit Margin was 37.5% in the quarter, an increase of 0.9 points over the year-ago period. This improvement reflects the company's progress in reducing less-profitable SKUs and improving sales mix, especially in developing markets. The company's Effective Tax Rate of 33.1% reflects a change in country mix and effective tax planning. FIRST QUARTER SEGMENT HIGHLIGHTS In the first quarter of Fiscal 2004, the Company changed its segment reporting to reflect changes in organizational structure and management of its business. The company is now managing and reporting its North American businesses under two segments, designated North American Consumer Products and U.S. Foodservice. Certain changes were also made to the composition of the remaining segments; prior periods have been restated to conform with the current presentation. Heinz is a brand-focused company with a powerful line up of 15 mega-brands, led by the $2.7 billion Heinz brand. More than 60% of the company's sales come from outside the United States. NORTH AMERICAN CONSUMER PRODUCTS Sales volume in the North American Consumer Products segment was up $18.7 million or 4.1%, driven by strong volume increases in Heinz(R) ketchup and Classico(R) pasta sauces. There was some weakness in frozen food, and the overall business improvement was more than offset by the impact of divestitures, resulting in a segment sales decrease of $3.4 million or 0.7%. Overall, pricing was down 2%, as Heinz continued its strategy of value pricing directly to consumers. Operating income increased $1.4 million, or 1.3%, to $107.8 million. In Canada, Heinz(R) ketchup reached it highest quarterly level in five years and the Classico(R) brand continued its market-leading share of the country's pasta sauce category. 3 U.S. FOODSERVICE U.S. Foodservice's sales rose $23.5 million, or 7.6%, due primarily to a significant volume increase for Heinz(R) ketchup, along with increased sales of Escalon(R) specialty sauces and Dianne's(R) frozen desserts. Acquisitions, net of divestitures, increased sales slightly due primarily to the current year acquisition of Truesoups LLC, a manufacturer and marketer of premium frozen soups. Operating income grew $8.6 million, or 20.0%, to $51.7 million, due primarily to volume growth, favorable pricing and sales mix. Heinz's Chairman noted that the acquisition of Truesoups supports the company's leadership position in the premium soup category and expands its customer base among well-known and rapidly growing fast-casual dining chains. "It is a well-focused strategic addition to a powerful foodservice portfolio whose leading brands include Heinz(R) ketchup, Escalon(R) tomato products, Chef Francisco(R) soups and Dessert Inspiration(R) frozen desserts," he said. EUROPE Heinz Europe's sales increased $61.8 million, or 9.2% primarily due to favorable exchange translation rates and significant volume increases in Petit Navire(R) seafood. European sales were impacted by lower volumes in convenience meals and infant feeding due to promotional timing, elimination of low-margin SKUs, and, to a lesser extent, by volume decreases in ready-to-serve soups and Heinz(R) beans due to changes in summer eating patterns induced by the record European heat wave. By contrast, Heinz(R) ketchup volume grew by 6% in the U.K., with dollar market share up 3 points to 76%. The enduringly popular Heinz Salad Cream(R) grew volume by 17%, with its dollar share up more than 5 points, reaching 78%. Operating income increased $6.7 million, or 4.8%, to $146.5 million, largely attributable to improvements in the seafood business and favorable exchange translation rates. These increases were partially offset by unfavorable manufacturing costs in Northern Europe as well as sales mix and lower volumes. General and administrative expenses also increased primarily due to exchange and increased pension expense. Heinz Europe has translated the popular U.S. upside-down Heinz Easy Squeeze!(R)ketchup concept into Top Down(R), a packaging concept now rolling out to 19 countries across the European continent. Heinz Europe is re-energizing its German ketchup market with a new flight of television commercials and strong store promotions. The result has been double-digit growth in ketchup sales. In Italy, the Plasmon(R) baby food range introduced 4 varieties of Ready Meals(R) and two new Winnie the Pooh(R) biscuits under license. Russian parents are being introduced to a range of Heinz(R) canned baby foods, which complement the existing range of jarred varieties. 4 ASIA PACIFIC Asia Pacific had an excellent quarter, with volume up a strong 5.2% and sales up $52.8 million, or 22.2%. This was primarily driven by significant volume increases in Tegel(R) poultry in New Zealand and ABC(R) sauces and juice concentrates in Indonesia as well as the favorable impact of exchange translation rates. Operating income rose $15.3 million, to $34.3 million, primarily due to strong net pricing and manufacturing cost improvements in Australia and New Zealand as well as favorable exchange translation rates. Asia Pacific, which now represents 15% of Heinz's global sales, showed solid marketing results, led by Heinz ABC in Indonesia, whose strong showing in seasonal juices and soy sauce helped drive overall sales growth of 45%. Heinz China, despite the difficulties of the SARS epidemic, increased sales by 40%. In New Zealand, the Wattie's(R) range expanded with the addition of Wok Creations(R), a healthful mix of frozen vegetables and stir-fry sauces, and the Good Taste(R) range of dressings and marinades. Heinz Australia's Greenseas(R) tuna range recorded a strong quarter with a significant rise in sales of traditional varieties and new flavored tunas. The company's Very Vegetable(R) soup range concluded the cold-weather season with strong double-digit growth over the prior year. In other developing markets such as Latin America and India, volumes were up 7%, responding to marketing and product innovations. # # MEETING WITH SECURITIES ANALYSTS - INTERNET BROADCASTS Heinz will host a conference call with security analysts today at 8:30 a.m. (Eastern time). The call will be webcast live on www.heinz.com and will be archived for playback beginning at 2 p.m. The call is available live via conference call at 1-888-757-3036 (listen only). It will be hosted by Art Winkleblack, Executive Vice President and Chief Financial Officer; Casey Keller, Chief Growth Officer; Jack Runkel, Vice President - Investor Relations; and Edward J. McMenamin, Vice President - Finance. # # SAFE HARBOR PROVISIONS FOR FORWARD-LOOKING STATEMENTS: This press release contains forward-looking statements within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements reflect management's view of future events and financial performance. These statements are subject to risks, uncertainties, assumptions and other important factors, many of which may be beyond Heinz's control and could cause actual results to differ materially from those expressed or implied in these forward-looking statements. Uncertainties contained in such statements include, but are not limited to, sales, 5 earnings, and volume growth, general economic, political, and industry conditions, competitive conditions, production, energy and raw material costs, the ability to maintain favorable supplier relationships, achieving cost savings programs and gross margins, currency valuations and interest rate fluctuations, success of acquisitions, joint ventures, and divestitures, new product and packaging innovations, the effectiveness of advertising, marketing, and promotional programs, supply chain efficiency and cash flow initiatives, the impact of e-commerce and e-procurement, risks inherent in international operations, particularly the performance of business in hyperinflationary environments and litigation, changes in estimates in critical accounting judgments, the possibility of increased pension expense and contributions, and other factors described in "Cautionary Statement Relevant to Forward-Looking Information" in the Company's Form 10-K for the fiscal year ended April 30, 2003, and the Company's subsequent filings with the Securities and Exchange Commission. The forward-looking statements are and will be based on management's then current views and assumptions regarding future events and speak only as of their dates. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. # # ABOUT HEINZ: H.J. Heinz Company is one of the world's leading producers and marketers of branded foods in ketchup, condiments, sauces, meals, soups, seafood, snacks and infant foods. Heinz is a global family of leading brands, including Heinz(R) Ketchup, sauces, soups, beans, pasta and infant foods (representing nearly one-third of total sales), Ore-Ida(R) french fries, Boston Market(R) and Smart Ones(R) meals and Plasmon(R) baby food. Heinz's 50 companies have number-one or number-two brands in 200 countries, showcased by Heinz(R) Ketchup, the world's favorite ketchup. Information on Heinz is available at www.heinz.com/news. # # # CONTACT: Media: ----- Ted Smyth, 412-456-5780; Debbie Foster, 412-456-5778; Jack Kennedy, 412-456-5923; OR Investors: --------- Jack Runkel, 412-456-6034 6 H.J. HEINZ COMPANY AND SUBSIDIARIES SPECIAL ITEMS - FIRST QUARTERS ENDED JULY 30, 2003 AND JULY 31, 2002 The following table provides a comparison of the company's reported results from continuing operations and the results excluding special items for the first quarters ended July 30, 2003 and July 31, 2002:
First Quarter Ended July 30, 2003 ---------------------------------------------------------- Net Gross Operating Per Sales Profit Income Income * Share* -------- ------ ------ ------ ------ Reported results from continuing operations $ 1,895.5 $ 707.1 $ 349.1 $ 186.8 $ 0.53 Reorganization costs -- 4.0 9.5 6.2 0.02 Gain on sale of the Northern Europe bakery business -- -- (28.8) (13.3) (0.04) --------- ------- ------- ------- ------- Results from continuing operations excluding special items $ 1,895.5 $ 711.1 $ 329.7 $ 179.8 $ 0.51 ========= ======= ======= ======= =======
First Quarter Ended July 31, 2002 ---------------------------------------------------------- Net Gross Operating Per Sales Profit Income Income * Share* -------- ------ ------ ------ ------ Reported results from continuing operations $ 1,839.3 $ 672.7 $ 295.9 $ 154.4 $ 0.44 Reorganization costs -- -- 18.4 11.6 0.03 --------- ------- ------ ------- ------- Results from continuing operations excluding special items $ 1,839.3 $ 672.7 $ 314.3 $ 166.0 $ 0.47 ========= ======= ======= ======= =======
* Excludes the impact of cumulative effect of accounting change. (Note: Totals may not add due to rounding.) 7 H. J. HEINZ COMPANY AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
First Quarter Ended ------------------------------- July 30, 2003 July 31, 2002 FY2004 FY2003 ----------- ----------- Sales $ 1,895,524 $ 1,839,314 Cost of products sold 1,188,448 1,166,635 ----------- ----------- Gross profit 707,076 672,679 Selling, general and administrative expenses 358,000 376,782 ----------- ----------- Operating income 349,076 295,897 Interest income 5,765 6,223 Interest expense 52,237 51,853 Other expense, net (16,979) (13,185) ----------- ----------- Income from continuing operations before income taxes and effect of change in accounting principle 285,625 237,082 Provision for income taxes 98,800 82,710 ----------- ----------- Income from continuing operations before effect of change in accounting principle 186,825 154,372 Income from discontinued operations, net of tax 27,200 23,423 ----------- ----------- Income before effect of change in accounting principle 214,025 177,795 Effect of change in accounting principle -- (77,812) ----------- ----------- Net income $ 214,025 $ 99,983 =========== =========== Income per common share - Diluted Continuing operations $ 0.53 $ 0.44 Discontinued operations 0.08 0.07 Effect of change in accounting principle -- (0.22) ----------- ----------- Net Income $ 0.60 $ 0.28 =========== =========== Average common shares outstanding - diluted 354,522 353,529 =========== =========== Income per common share - Basic Continuing operations $ 0.53 $ 0.44 Discontinued operations 0.08 0.07 Effect of change in accounting principle -- (0.22) ----------- ----------- Net Income $ 0.61 $ 0.28 =========== =========== Average common shares outstanding - basic 352,094 351,026 =========== =========== Cash dividends per share $ 0.2700 $ 0.4050 =========== ===========
Note: Fiscals 2004 and 2003 include special items. (Totals may not add due to rounding) 8 H. J. HEINZ COMPANY AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME
First Quarter Ended ------------------------------- July 30, 2003 July 31, 2002 FY2004 FY2003 ----------- ----------- Net external sales: North American Consumer Products $ 450,778 $ 454,145 U.S. Foodservice 331,217 307,728 Europe 735,153 673,398 Asia/Pacific 290,007 237,240 Other Operating Entities 88,369 166,803 ----------- ----------- Consolidated Totals $ 1,895,524 $ 1,839,314 =========== =========== Intersegment revenues: North American Consumer Products $ 14,077 $ 13,379 U.S. Foodservice 3,532 3,554 Europe 4,535 3,531 Asia/Pacific 674 915 Other Operating Entities 499 462 Non-Operating (23,317) (21,841) ----------- ----------- Consolidated Totals $ -- $ -- =========== =========== Operating income (loss): North American Consumer Products $ 106,262 $ 101,628 U.S. Foodservice 49,200 40,948 Europe 171,316 139,779 Asia/Pacific 34,266 18,932 Other Operating Entities 11,238 21,460 Non-Operating (23,206) (26,850) ----------- ----------- Consolidated Totals $ 349,076 $ 295,897 =========== =========== Operating income (loss) excluding special items: North American Consumer Products $ 107,758 $ 106,394 U.S. Foodservice 51,700 43,076 Europe 146,517 139,779 Asia/Pacific 34,266 18,932 Other Operating Entities 11,238 21,460 Non-Operating (21,748) (15,339) ----------- ----------- Consolidated Totals $ 329,731 $ 314,302 =========== ===========
The company's revenues are generated via the sale of products in the following categories: Ketchup, Condiments and Sauces $ 742,295 $ 639,975 Frozen Foods 392,709 437,715 Convenience Meals 427,180 380,233 Infant Feeding 186,582 176,927 Other 146,758 204,464 ----------- ----------- Total $ 1,895,524 $ 1,839,314 =========== ===========
The above amounts include the impact of acquisitions, divestitures (primarily affecting the Other and Frozen Foods categories) and foreign exchange. -----END PRIVACY-ENHANCED MESSAGE-----