-----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, Roacoz9C/bkUI2jZgYusZtCI0U0H3E2acsNYXCwcHh0e8SturiIXa6lZBkKWWfHM 001bGofoJwV6m5XFuCCn4Q== 0000950152-03-009971.txt : 20031125 0000950152-03-009971.hdr.sgml : 20031125 20031125172804 ACCESSION NUMBER: 0000950152-03-009971 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20031125 ITEM INFORMATION: FILED AS OF DATE: 20031125 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: 031023992 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 j0428702e8vk.txt H.J. HEINZ COMPANY 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): November 25, 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 November 25, 2003 furnished herewith as Exhibit 99.1.* The attached press release presents the financial results of the Registrant and its business segments and identifies certain special items that impacted the financial results that management deemed to be significant. These special items include, in Fiscal 2004, the impact of reorganization costs following last year's spin-off transaction with Del Monte and the gain on the sale of the company's bakery business in Northern Europe and in Fiscal 2003, reorganization costs related to the Del Monte transaction and overhead reduction costs. Operating segment income excluding these special items is not a measure that is defined in generally accepted accounting principles ("GAAP"), but it is used by management to assist in evaluating the Registrant's results of operations from period to period. Management believes this information also may be useful to the readers of the financial statements in evaluating the Registrant's operating results between fiscal periods. Also disclosed as Exhibit 99.2* is supplemental information regarding reconciliation of non-GAAP financial measures in connection with the financial results for the second quarter of Fiscal Year 2004. INDEX TO EXHIBITS Exhibit Number (Referenced to Item 601 of Regulation S-K) Description of Exhibit - --------------- ---------------------- 99.1 (furnished but not filed)* H.J. Heinz Company Press Release dated November 25, 2003 99.2 (furnished but not filed)* Supplemental Information prepared for use in connection with the financial results for the second quarter of Fiscal Year 2004 * 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: November 25, 2003 EXHIBIT INDEX Exhibit NO. Description - ----------- ----------- 99.1 (furnished but not filed) H. J. Heinz Company Press Release dated November 25, 2003 99.2 (furnished but not filed) Supplemental Information prepared for use in connection with the financial results for the second quarter of Fiscal Year 2004 EX-99.1 3 j0428702exv99w1.txt EXHIBIT 99.1 Exhibit 99.1 News Release [HEINZ LOGO] FOR RELEASE UPON RECEIPT HEINZ REPORTS SECOND QUARTER INCOME FROM CONTINUING OPERATIONS OF $191.5 MILLION OR 54 CENTS PER SHARE VS. $168.5 MILLION OR 48 CENTS PER SHARE IN THE PRIOR YEAR - - EPS FOR THE SECOND QUARTER OF 54 CENTS PER SHARE FROM CONTINUING OPERATIONS, EXCLUDING SPECIAL ITEMS, UP 8% OVER PRIOR YEAR; - - VOLUME GROWS 1.6% IN THE SECOND QUARTER AND GROWS 1.9% THROUGH THE FIRST HALF OF FISCAL 2004; - - IMPROVED SALES MIX, SKU REDUCTION AND PRODUCTIVITY IMPROVEMENTS HELP INCREASE GROSS MARGINS 150 BASIS POINTS TO 37.4% IN THE SECOND QUARTER. PITTSBURGH, November 25, 2003 - H.J. Heinz Company (NYSE: HNZ) today announced results for the second quarter ended October 29, 2003. Heinz reported net income of $191.5 million, or $0.54 per diluted share, for the period. This compares with the following results for the prior year: - - On a fully reported total company basis, Heinz's current-quarter EPS of $0.54 compares with prior-year earnings of $212.1 million, or $0.60 per diluted share, which included earnings from discontinued operations ($43.5 million, or $0.12 per share) that were spun off and merged with Del Monte Corporation in December 2002. - - On a continuing operations basis, without the profits associated with the spun-off business units, the current quarter diluted EPS of $0.54 is a 13% increase over the earnings of $168.5 million, or $0.48 per diluted share, from continuing operations in the prior-year period. - - For continuing operations excluding special items recorded in Fiscal 2003, Heinz's current quarter diluted EPS of $0.54 is an 8% increase over the EPS of $0.50 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, including reconciliation of non-GAAP financial measures.) Commenting on the second quarter, H.J. Heinz Company Chairman, President and CEO William R. Johnson said: "We are pleased with Heinz's results for the second quarter, and the company's performance continues to confirm our confidence in the target ranges we set for EPS, Net Sales and Operating Free Cash Flow (cash flow from operations less capital expenditures) in Fiscal 2004. We saw continued volume, margin and operating income growth in the second quarter, reflecting the improved focus of our international portfolio and strong performances by Heinz(R) Ketchup and our leading sauces brands, our U.S. Foodservice, European seafood and rapidly growing Asia Pacific businesses. We are particularly pleased with the margin performance in Asia Pacific, where the operating income margin increased more than 300 basis points. "We continued to reduce Working Capital, especially accounts receivable and inventories, driving improvement in our Cash Conversion Cycle 8 days versus the second quarter last year. Net debt (total debt, net of the value of interest rate swaps, less cash and cash equivalents) also continued to decline and our Operating Free Cash Flow remained strong and in line with our Fiscal 2004 target. We 2 achieved all of this even as we continued to improve our business mix with strategic divestitures. Looking forward, we remain focused on increasing sales, cash and earnings, which we are successfully driving through the previously announced Four Strategic Imperatives of driving profitable growth, removing clutter, squeezing out costs, and measuring and recognizing performance." Second quarter sales excluding divestitures, net of acquisitions, increased 7.7%, reflecting volume growth of 1.6% and favorable foreign exchange translation rates of 6.0%. Divestitures, net of acquisitions, had a negative impact on sales of 8.1%, causing overall sales for the quarter to decline 0.4% to $2.09 billion. Heinz's Gross Profit Margin was 37.4% in the quarter, an increase of 150 basis points over the year-ago period. This improvement reflects the company's progress in reducing less-profitable SKU's and improving sales mix and productivity, especially in developing markets. Operating income grew more than 2% and was favorably leveraged to 9% growth in income from continuing operations through lower interest costs, reduced minority interest expense and a favorable effective tax rate. EPS from discontinued operations was $0.12 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.) SECOND QUARTER SEGMENT HIGHLIGHTS NORTH AMERICAN CONSUMER PRODUCTS North American Consumer Products saw strong performances by Heinz(R) Ketchup, EZ Marinader(R) marinading pouches and Classico(R) pasta sauces. These gains were offset by declines in several frozen brands and the continuing process of rationalizing Boston Market(R) side dishes and Hot Bites(R) frozen snacks. Excluding divestitures, sales for the unit were down 1% versus the prior-year period. Lower pricing decreased sales by 2.9%, consistent with Heinz's Every Day Low Pricing strategy. This decrease was largely offset by favorable Canadian currency translation rates. Operating income decreased $1.4 million, or 1.1%, to $126.5 million, as manufacturing cost savings and decreased consumer marketing expenses related to Boston Market(R) frozen entrees and the prior-year launch of Heinz(R) Easy Squeeze!(TM) upside-down Ketchup were offset by lower net pricing. The company expects similar performance in the third quarter with several previously announced new product innovations such as Ore-Ida(R) Extra Crispy french fries and a new line of Smart Ones(R) frozen entrees for carbohydrate-conscious consumers slated for introduction in the fourth quarter. HEINZ U.S. FOODSERVICE Heinz U.S. Foodservice's sales increased $29.3 million, or 8.6%, reflecting growth in Heinz(R) Ketchup, single-serve condiments, Escalon(R) processed tomato products and Dianne's(R) frozen desserts. The introduction of several innovative new products such as Fry Shakers, Stand-Up Premium Pouches for condiments and jellies, and a restaurant line of Heinz's Delimex(R) Taquitos helped drive foodservice sales growth. Acquisitions, net of divestitures, increased sales 4.5%, mainly due to the acquisition of Truesoups LLC, a manufacturer and marketer of premium frozen soups. Operating income increased $0.6 million, or 1.1%, to $57.5 million, primarily due to strong growth in sales and improved gross margins, partially offset by the timing of SG&A costs and investment in infrastructure. 3 EUROPE Heinz Europe's sales increased $60.5 million, or 8.5%, driven by higher volumes for John West(R) and Petit Navire(R) seafood, Heinz(R) Salad Cream and convenience meals, and favorable foreign exchange translation rates. Heinz(R) Ketchup in the U.K. increased its value share to nearly 76%, almost 3 share points higher than a year ago, while Heinz(R) Salad Cream increased its share 4.7 points to more than 78% while driving category growth of nearly 8%. The "Win A House" promotion in the U.K. helped drive 6% volume growth for the core Heinz(R) soups and beans business during the second quarter. Overall volume in Europe increased 1.5%, led by good performance in the U.K. and Western Europe. European volume gains were partially offset by decreases in infant feeding and frozen food products, and the previously announced SKU rationalization of low-margin products. Divestitures reduced sales 2.3%, primarily related to the sale of the U.K. frozen pizza business and the Northern European bakery business. Operating income increased $10.5 million, or 7.8%, to $144.7 million, mostly attributable to favorable exchange translation rates and improved Gross Profit Margin, partially offset by increased General & Administrative expense, mainly related to increased pension expense. ASIA PACIFIC Asia Pacific had another very strong quarter, with sales up $64.6 million, or 23.9%. This was driven by a 6.2% increase in volume and by strong foreign exchange translation rates across the region. Tegel(R) poultry in New Zealand continued to perform well, while Australia achieved double-digit volume growth for the quarter in its leading Heinz(R) sauces and convenience meals and Greenseas(R) tuna. Indonesia's ABC(R) branded soy sauces and juice concentrates delivered strong double-digit sales growth and benefited from holiday promotions that came earlier than last year. New products and packaging also added to volume growth. Divestitures decreased sales by 0.7%. Operating income increased $16.9 million, or 62.8%, to $43.7 million, primarily due to strong volume growth, holiday timing in Indonesia, increased net pricing and manufacturing cost improvements in Australia and New Zealand, as well as favorable exchange translation rates. YEAR TO DATE HIGHLIGHTS Heinz reported income from continuing operations of $371.3 million in the six months ended October 29, 2003, up 8.7% compared to $341.4 million for the year-earlier period (excluding the adoption of SFAS No. 142). Diluted earnings per share from continuing operations were $1.05 for the period, an 8.2% increase over $0.97 in the prior year (excluding the adoption of SFAS No. 142). Sales increased 1.2% for the six-month period, driven by strong volume increases of 1.9%, at the top end of the company's 1-2% target range. Gross profit increased 4.7% and the Gross Profit Margin was 37.4%, up 120 basis points versus the prior year. Operating income increased $23.3 million, or 3.6%. The company's balance sheet and cash management showed significant improvement compared to the first half of Fiscal 2003. The Cash Conversion Cycle improved 11 days during the first half of the year compared to the prior-year period, and operating free cash flow improved 18.4% to $418 million. # # 4 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 1-800-659-6183 (listen only). It will be hosted by William R. Johnson, Chairman, President & CEO, 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, 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 litigation and international operations, particularly the performance of business in hyperinflationary environments, 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, except as required by the securities laws. # # 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 5 H. J. HEINZ COMPANY AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
Second Quarter Ended Six Months Ended ----------------------------------- ----------------------------------- October 29, 2003 October 30, 2002 October 29, 2003 October 30, 2002 FY2004 FY2003 FY2004 FY2003 ----------- ----------- ----------- ----------- Sales $ 2,090,461 $ 2,099,170 $ 3,985,985 $ 3,938,484 Cost of products sold 1,309,243 1,348,191 2,497,691 2,514,826 ----------- ----------- ----------- ----------- Gross profit 781,218 750,979 1,488,294 1,423,658 Selling, general and administrative expenses 432,183 419,955 790,183 796,737 ----------- ----------- ----------- ----------- Operating income 349,035 331,024 698,111 626,921 6,392 Interest income 4,548 6,392 10,313 12,615 Interest expense 54,292 54,602 106,529 106,455 Other expense, net (12,945) (21,797) (29,924) (34,982) ----------- ----------- ----------- ----------- Income from continuing operations before income taxes and effect of change in accounting principle 286,346 261,017 571,971 498,099 Provision for income taxes 94,859 92,480 193,659 175,190 ----------- ----------- ----------- ----------- Income from continuing operations before effect of change in accounting principle 191,487 168,537 378,312 322,909 Income from discontinued operations, net of tax -- 43,545 27,200 66,968 ----------- ----------- ----------- ----------- Income before effect of change in accounting principle 191,487 212,082 405,512 389,877 Effect of change in accounting principle -- -- -- (77,812) ----------- ----------- ----------- ----------- Net income $ 191,487 $ 212,082 $ 405,512 $ 312,065 =========== =========== =========== =========== Income per common share - Diluted Continuing operations $ 0.54 $ 0.48 $ 1.07 $ 0.91 Discontinued operations -- 0.12 0.08 0.19 Effect of change in accounting principle -- -- -- (0.22) ----------- ----------- ----------- ----------- Net Income $ 0.54 $ 0.60 $ 1.14 $ 0.88 =========== =========== =========== =========== Average common shares outstanding - diluted 354,258 353,438 354,258 353,438 =========== =========== =========== =========== Income per common share - Basic Continuing operations $ 0.54 $ 0.48 $ 1.08 $ 0.92 Discontinued operations -- 0.12 0.08 0.19 Effect of change in accounting principle -- -- -- (0.22) ----------- ----------- ----------- ----------- Net Income $ 0.54 $ 0.60 $ 1.15 $ 0.89 =========== =========== =========== =========== Average common shares outstanding - basic 351,805 351,121 351,805 351,121 =========== =========== =========== =========== Cash dividends per share $ 0.2700 $ 0.4050 $ 0.5400 $ 0.8100 =========== =========== =========== ===========
Note: Fiscals 2004 and 2003 include special items. (Totals may not add due to rounding) 6 H. J. HEINZ COMPANY AND SUBSIDIARIES SEGMENT DATA
Second Quarter Ended Six Months Ended ----------------------------------- ----------------------------------- October 29, 2003 October 30, 2002 October 29, 2003 October 30, 2002 FY2004 FY2003 FY2004 FY2003 ----------- ----------- ----------- ----------- Net external sales: North American Consumer Products $ 521,882 $ 551,644 $ 972,660 $ 1,005,789 U.S. Foodservice 371,892 342,588 703,109 650,316 Europe 774,651 714,175 1,509,804 1,387,573 Asia/Pacific 334,769 270,152 624,776 507,392 Other Operating Entities 87,267 220,611 175,636 387,414 ----------- ----------- ----------- ----------- Consolidated Totals $ 2,090,461 $ 2,099,170 $ 3,985,985 $ 3,938,484 =========== =========== =========== =========== Intersegment revenues: North American Consumer Products $ 14,903 $ 14,422 $ 28,980 $ 27,801 U.S. Foodservice 3,099 3,392 6,631 6,946 Europe 3,088 3,870 7,623 7,401 Asia/Pacific 903 813 1,577 1,728 Other Operating Entities 619 583 1,118 1,045 Non-Operating (22,612) (23,080) (45,929) (44,921) ----------- ----------- ----------- ----------- Consolidated Totals $ -- $ -- $ -- $ -- =========== =========== =========== =========== Operating income (loss): North American Consumer Products $ 126,469 $ 123,650 $ 232,731 $ 225,278 U.S. Foodservice 57,450 55,741 106,650 96,689 Europe 144,667 134,213 315,983 273,992 Asia/Pacific 43,737 26,868 78,003 45,800 Other Operating Entities 8,392 31,255 19,630 52,715 Non-Operating (31,680) (40,703) (54,886) (67,553) ----------- ----------- ----------- ----------- Consolidated Totals $ 349,035 $ 331,024 $ 698,111 $ 626,921 =========== =========== =========== =========== Operating income (loss) excluding special items: North American Consumer Products $ 126,469 $ 127,904 $ 234,227 $ 234,298 U.S. Foodservice 57,450 56,841 109,150 99,917 Europe 144,667 134,213 291,184 273,992 Asia/Pacific 43,737 26,868 78,003 45,800 Other Operating Entities 8,392 31,255 19,630 52,715 Non-Operating (31,680) (35,914) (53,428) (51,253) ----------- ----------- ----------- ----------- Consolidated Totals $ 349,035 $ 341,167 $ 678,766 $ 655,469 =========== =========== =========== =========== The company's revenues are generated via the sale of products in the following categories: Ketchup, Condiments and Sauces $ 751,555 $ 691,346 $ 1,493,850 $ 1,331,321 Frozen Foods 483,770 524,685 876,479 962,400 Convenience Meals 457,832 402,615 885,012 782,848 Infant Feeding 220,535 201,160 407,117 378,087 Other 176,769 279,364 323,527 483,828 ----------- ----------- ----------- ----------- Total $ 2,090,461 $ 2,099,170 $ 3,985,985 $ 3,938,484 =========== =========== =========== ===========
The above amounts include the impact of acquisitions, divestitures (primarily affecting the Other and Frozen Foods categories) and foreign exchange. 7 H.J. HEINZ COMPANY AND SUBSIDIARIES SPECIAL ITEMS - SECOND QUARTER ENDED OCTOBER 30, 2002 The company reports its financial results in accordance with generally accepted accounting principles ("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 a reconciliation of the company's reported results from continuing operations to the results excluding special items for the second quarter ended October 30, 2002:
Second Quarter Ended October 30, 2002 -------------------------------------------------------------- Net Gross Operating Per Sales Profit Income Income Share -------- -------- -------- -------- -------- Reported results from continuing operations $2,099.2 $ 751.0 $ 331.0 $ 168.5 $ 0.48 Reorganization costs -- 1.9 10.1 6.9 0.02 -------- -------- -------- -------- -------- Results from continuing operations excluding special items $2,099.2 $ 752.9 $ 341.2 $ 175.5 $ 0.50 ======== ======== ======== ======== ========
(Note: Totals may not add due to rounding.) 8 SPECIAL ITEMS - SIX MONTHS ENDED OCTOBER 29, 2003 AND OCTOBER 30, 2002 The company reports its financial results in accordance with generally accepted accounting principles ("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 a reconciliation of the company's reported results from continuing operations to the results excluding special items for the six months ended October 29, 2003 and October 30, 2002:
Six Months Ended October 29, 2003 ------------------------------------------------------------------ Net Gross Operating Per Sales Profit Income Income Share -------- -------- -------- -------- -------- Reported results from continuing operations $3,986.0 $1,488.3 $ 698.1 $ 378.3 $ 1.07 Reorganization costs -- 4.0 9.5 6.2 0.02 Gain on sale of the Northern European bakery business -- -- (28.8) (13.3) (0.04) -------- -------- -------- -------- -------- Results from continuing operations excluding special items $3,986.0 $1,492.3 $ 678.8 $ 371.3 $ 1.05 ======== ======== ======== ======== ========
Six Months Ended October 30, 2002 ------------------------------------------------------------------ Net Gross Operating Per Sales Profit Income Income* Share* -------- -------- -------- -------- -------- Reported results from continuing operations $3,938.5 $1,423.7 $ 626.9 $ 322.9 $ 0.91 Reorganization costs -- 1.9 28.5 18.5 0.05 -------- -------- -------- -------- -------- Results from continuing operations excluding special items $3,938.5 $1,425.6 $ 655.5 $ 341.4 $ 0.97 ======== ======== ======== ======== ========
* Excludes the impact of cumulative effect of accounting change. (Note: Totals may not add due to rounding.) EX-99.2 4 j0428702exv99w2.txt EXHIBIT 99.2 Exhibit 99.2 H.J. HEINZ COMPANY AND SUBSIDIARIES Non-GAAP Performance Ratios The company reports its financial results in accordance with generally accepted accounting principles ("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 those non-GAAP performance ratios discussed in the company's press release dated November 25, 2003: NET DEBT CALCULATION (amounts in thousands)
October 29, 2003 April 30, 2003 October 30,2002 FY 2004 FY 2003 FY 2003 ----------- ----------- ----------- Short-term debt $ 20,609 $ 146,838 $ 162,571 Long-term debt, including current portion 4,975,130 4,784,091 5,311,748 ----------- ----------- ----------- Total debt 4,995,739 4,930,929 5,474,319 Less: Value of interest rate swaps (176,294) (294,802) (209,066) Cash and cash equivalents (848,696) (801,732) (291,863) ----------- ----------- ----------- Net Debt 3,970,749 3,834,395 4,973,390 Less: Preferred stock (325,000) -- -- ----------- ----------- ----------- Net Debt excluding preferred stock* $ 3,645,749 $ 3,834,395 $ 4,973,390 =========== =========== ===========
* The adoption of SFAS No. 150 by the Company in the second quarter of Fiscal 2004 required the prospective classification of Heinz Finance Company's $325 million of mandatorily redeemable preferred shares from minority interest to long-term debt. The current period calculation of net debt excludes the effects of this reclassification in order to provide more meaningful comparisons with prior periods. OPERATING FREE CASH FLOW CALCULATION (amounts in thousands)
Second Quarter Ended Six Months Ended --------------------------------- --------------------------------- October 29, 2003 October 30,2002 October 29, 2003 October 30,2002 FY 2004 FY 2003 FY 2004 FY 2003 --------- --------- --------- --------- Cash provided by operating activities $ 227,323 $ 246,826 $ 493,259 $ 416,936 Capital expenditures (45,240) (36,028) (74,837) (63,543) --------- --------- --------- --------- Operating Free Cash Flow $ 182,083 $ 210,798 $ 418,422 $ 353,393 ========= ========= ========= =========
-----END PRIVACY-ENHANCED MESSAGE-----