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): August 23, 2011
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.) |
One PPG Place, Pittsburgh, |
15222 |
|
(Address of principal executive offices) |
(Zip Code) |
412-456-5700
(Registrant’s
telephone number, including area code)
Not Applicable
(Former
name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
⃞ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
⃞ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
⃞ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
⃞ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
GENERAL
ITEM 2.02. RESULTS OF OPERATIONS AND FINANCIAL CONDITION
Attached is H. J. Heinz Company’s press release dated August 23, 2011, furnished herewith as Exhibit 99.1.
This press release presents the Company’s results in Fiscal 2012 excluding charges for productivity initiatives. Such charges include costs associated with targeted workforce reductions, asset write-offs associated with factory closures and other implementation costs, consisting primarily of professional fees and relocation costs for the establishment of a European supply chain hub in The Netherlands, designed to increase manufacturing effectiveness and accelerate productivity on a global scale. Management believes that this measure provides useful information to investors because it is the profitability measure we use to evaluate earnings performance on a comparable year-over-year basis. The adjustments are charges for non-recurring productivity initiatives that, in management’s judgment, significantly affect the year-over-year assessment of operating results. In addition, these results are used in reporting to our executive management and as a component of the Board of Director’s measurement of our performance for incentive compensation purposes. These non-GAAP measures should be viewed in addition to, and not in lieu of, the comparable GAAP measures.
This press release also presents the business measure of organic sales growth, which is defined as either volume plus price or total sales growth excluding the impact of foreign exchange and acquisitions and divestitures. This measure is utilized by senior management to provide investors with a more complete understanding of underlying sales trends by providing sales growth on a consistent basis. The limitation of this measure is its exclusion of the impact of foreign exchange and acquisitions and divestitures.
This press release also presents the business measure of operating free cash flow, which is defined as cash flow from operations less capital expenditures net of proceeds from disposal of property, plant and equipment. This measure is utilized by senior management and the board of directors to gauge our business operating performance, including the progress of management to profitably monetize low return assets.
The limitation of operating free cash flow is that it adjusts for cash used for capital expenditures and cash received from disposals of property, plant and equipment, the net of which is no longer available to the Company for other purposes. Management compensates for this limitation by using the GAAP operating cash flow number as well. Operating free cash flow does not represent residual cash flow available for discretionary expenditures and does not provide insight to the entire scope of the historical cash inflows or outflows of our operations that are captured in the other cash flow measures reported in the statement of cash flows.
This press release also presents certain financial measures and certain outlook on a constant currency basis. Constant currency is defined as the reported amount adjusted for translation (the effect of changes in average foreign exchange rates between the current period and the corresponding prior year), and the impact of current year foreign currency translation hedges. Management refers to growth rates at constant currency so that results can be viewed without the impact of changing foreign currency exchange rates, thereby facilitating period-to-period comparisons of financial results. Management provides outlook on a constant currency basis because of the volatility of foreign exchange rates and because it believes that such presentation facilitates a period-to-period comparison. However, a limitation of the use of the constant currency results as a performance measure is that it does not reflect the impact of exchange rates on financial results when comparing to the prior period. These results should be considered in addition to, not as a substitute for, results reported in accordance with GAAP.
Disclosed on Exhibit 99.1 is supplemental information regarding reconciliation and calculation of the non-GAAP measures discussed above in connection with the financial results for the first quarter ended July 27, 2011 and July 28, 2010, respectively.
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS
(d) Exhibits
Exhibit Number |
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(Referenced to |
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Item 601 of |
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Regulation S-K) |
Description of Exhibit |
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99.1 | H. J. Heinz Company Press Release dated August 23, 2011 |
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 hereunto duly authorized.
H.J. HEINZ COMPANY |
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|
|
By: |
/s/ Arthur B. Winkleblack |
Arthur B. Winkleblack |
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Executive Vice President and |
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Chief Financial Officer |
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Dated: |
August 23, 2011 |
EXHIBIT INDEX
Exhibit No. |
Description |
99.1 |
H. J. Heinz Company Press Release dated August 23, 2011 |
Exhibit 99.1
Heinz Reports Solid First-Quarter Results with Sales Growth of 14.9%, Fueled by Emerging Markets
Fiscal 2012 First-Quarter Results
Reconciliations of non-GAAP amounts are set forth in the attached financial tables. Results excluding charges for productivity initiatives represent the Company’s reported results adjusted to exclude charges for workforce reductions, factory closures and other implementation costs taken in Fiscal 2012 to accelerate growth. Organic sales are defined as volume plus price or total sales growth excluding the impact of foreign exchange and acquisitions and divestitures. Operating free cash flow is defined as cash from operations less capital expenditures net of proceeds from disposal of Property, Plant & Equipment. Also, constant currency as used in this press release is defined as the reported amount adjusted for translation (the effect of changes in average foreign exchange rates between the current period and the corresponding prior year) and the impact of current-year foreign currency translation hedges.
PITTSBURGH--(BUSINESS WIRE)--August 23, 2011--H.J. Heinz Company (NYSE:HNZ) today reported first-quarter sales growth of 14.9%, fueled by dynamic growth in Emerging Markets and higher global sales of ketchup and the Company’s Top 15 brands. Excluding special charges for productivity initiatives, Heinz also reported 4% growth in earnings per share and a 5.9% increase in net income.
Sales in the quarter ended July 27, 2011 rose to $2.85 billion, led by 13% organic sales growth in Emerging Markets (45.2% reported) and the acquisitions of the Quero® brand in Brazil and the Foodstar business in China, which increased total Company sales by 4.6%. Globally, ketchup delivered 8.3% organic sales growth (14.6% reported) as volume increased in Latin America, Europe and China. The Company’s Top 15 brands (excluding the Quero® and Master® brands) delivered strong organic growth of 6.2%, led by Heinz® branded products globally, as well as higher sales of T.G.I. Friday’s® frozen meals and Classico® pasta sauces in North America, Complan® nutritional beverages in India and ABC® brand sauces in Indonesia.
Overall, the Company’s global portfolio delivered organic sales growth of 3.1% despite the difficult economic environment in Developed Markets. The organic growth reflected higher net pricing (+3.8%), primarily in the U.S., U.K. and Latin America, in response to sharply rising commodity costs. Volume was down 0.7% as stronger volume in Emerging Markets, the U.K., Continental Europe, Canada and Japan was more than offset by softer volume in Australia and the U.S. The Company’s top-line growth also reflected favorable foreign exchange rates (+7.2%).
Heinz Chairman, President and CEO William R. Johnson said: “Emerging Markets generated a record 23% of our sales in the first quarter, up from 18% a year ago. Our strategy to accelerate growth in Emerging Markets organically and through acquisitions in countries with fast-growing populations helped Heinz deliver strong top-line growth and solid operating results despite the economic downturn in Developed Markets. Heinz also drove strong growth in global ketchup and our Top 15 brands by focusing on value-added consumer innovation and new product development.”
As the Company announced on May 26, 2011, Heinz expects to incur special charges of at least $160 million pre-tax income – or $0.35 per share – in Fiscal 2012 for one-time initiatives to drive global productivity and manufacturing efficiency. Heinz also anticipates investing at least $130 million of cash this year in these productivity initiatives.
In the first quarter of Fiscal 2012, Heinz recorded initial charges of $41 million pre-tax, or $0.09 per share, for costs related to exiting four previously announced factories and other productivity initiatives. These special charges were recorded in the non-operating segment.
Excluding the productivity charges, gross profit increased to $1.02 billion ($985 million reported). The increase reflected solid organic sales growth, the acquisitions of Foodstar in China in November 2010 and the Quero® brand in Brazil in April 2011, and the favorable impact from foreign exchange. Excluding special charges, gross profit margin decreased 90 basis points to 35.7% (34.6% reported), reflecting significantly higher commodity costs, which were partially offset by higher pricing and productivity improvements. Foreign exchange translation and the acquisitions reduced gross margin by 20 bps and 40 bps respectively.
During the quarter, the Company continued to invest strongly in the businesses. Excluding the productivity charges, SG&A expenses as a percentage of the Company’s sales increased to 21.3% (21.6% reported) from 20.2%. This reflects a 15% increase in marketing, investments in Emerging Markets, higher fuel costs and increased spending for Project Keystone, the Company’s global program to harmonize and standardize systems and processes under a common SAP technology platform. Excluding special items, operating income increased 1.1% to $410 million, while reported operating income decreased 8.9% to $370 million. Excluding special charges, the effective tax rate for the first quarter was 24% (23.2% reported) versus 25.3% last year, primarily reflecting a corporate tax rate reduction in the U.K.
Excluding special items, first-quarter net income grew to $255 million. Including special items, reported net income was $226 million versus $240 million a year ago.
Excluding special charges, first-quarter earnings per share grew to $0.78. Currency translation and translation hedges had a $0.05 favorable impact on EPS. EPS was diluted by a 1% increase in shares outstanding. Including the special items, Heinz reported first-quarter diluted earnings per share was $0.70 versus $0.75 a year ago.
Heinz generated $97 million of operating free cash flow in the quarter.
Fiscal 2012 Outlook
Mr. Johnson said: “We are looking to build on our solid first-quarter performance and believe we are on track to deliver our full-year constant currency EPS outlook of $3.24 to $3.32, excluding the impact of one-time productivity initiatives.”
Heinz continues to expect constant currency sales growth of 7 to 8% and EPS growth of 6 to 8% for the full year in Fiscal 2012, including higher costs for Project Keystone, while excluding the special charges for productivity initiatives.
Heinz also expects strong operating free cash flow of approximately $1.15 billion for Fiscal 2012, before special charges. On a reported basis, operating free cash flow is expected to exceed $1 billion.
Heinz expects second-quarter EPS to be in-line with, or slightly higher than prior year.
First-Quarter Marketing Highlights
OPERATING RESULTS BY BUSINESS SEGMENT
North American Consumer Products
Sales of the North American Consumer Products segment grew 1.7% to $775 million. Net pricing rose 3.1%, reflecting increases across many brands and reduced trade promotions. Volume declined 3.1%, reflecting the Company’s decision to exit the Boston Market® product line in the quarter and declines in Heinz® Ketchup, Ore-Ida® potatoes and Weight Watchers® Smart Ones® single-serve meals (all due to the impact of promotional timing and price increases). Classico® pasta sauces reported higher volume and the launches of T.G.I. Friday’s® single serve meals and Weight Watchers® Smart Ones® bagged meals posted higher volume. Favorable Canadian exchange translation rates increased sales 1.6%. Operating income was unchanged from last year at $191 million.
Europe
Heinz Europe sales grew 17.5% to $838 million, with organic sales growth of 4.9%. Volume increased 2.2%, led by Heinz® soup and Weight Watchers® from Heinz frozen meals in the U.K., as well as increases in ketchup across Europe and market share gains by Orlando™ tomato-based sauces in Spain. Net pricing increased 2.7%, driven by price increases across Europe and reduced promotional activity, particularly in the U.K. Favorable foreign exchange translation rates increased sales by 12.6%. Operating income increased 19.5% to $137 million, reflecting constant currency growth of 7%. Higher pricing was partially offset by increased marketing investments, higher commodity costs and increased G&A due to investments in Project Keystone.
Asia/Pacific
Heinz Asia/Pacific sales grew 20.2% to $671 million. Constant currency sales in Emerging Markets increased by 21%, while Developed Market sales decreased by 3% reflecting the impact of soft sales in Australia. Favorable exchange translation rates increased sales by 13.1%. The acquisition of Foodstar in China in the third quarter of Fiscal 2011 increased sales in the segment by 6% as sales of its Master® brand soy sauces were strong. Pricing increased 1.7% as negative pricing in Australia partially offset gains in other markets. Volume decreased 0.7%, reflecting soft volume in Australia, which has been impacted by a challenging retail and competitive environment. Complan® nutritional beverages in India, Ketchup and baby food in China, frozen potatoes and sauces in Japan and ABC® products in Indonesia all delivered higher volume. Operating income declined 14.6% to $61 million, due to poor operating results in Australia.
U.S. Foodservice
Sales of the U.S. Foodservice segment declined 1.1% to $325 million. Pricing increased sales 2.3% while volume decreased by 3.4%, reflecting declining restaurant traffic. Operating income decreased 20.1% to $32 million primarily due to sharply higher commodity costs, a lag of price increases in national accounts and rising fuel costs for distribution.
Rest of World
Sales for Rest of World more than doubled to $241 million. The acquisition of Quero®, a leading brand of tomato-based sauces, ketchup and vegetables in Brazil, increased sales 68.1%. Higher pricing increased sales by 27.9%, largely due to increases in Latin America taken to mitigate inflation. Volume increased 4.4%, propelled mainly by ketchup and baby food in Latin America. Foreign exchange translation rates increased sales 2.5%. Operating income more than doubled to $32 million, resulting from higher pricing and the addition of Quero®.
MEETING WITH SECURITIES ANALYSTS – INTERNET BROADCASTS
Heinz will host an investor and analyst call today at 8:30 a.m. (Eastern Time). The call will be Webcast live on www.heinz.com and will be archived for playback. Participants (institutional investors and analysts) can call 1-877-703-6103 in the U.S. and Canada and 1-857-244-7302 internationally. A listen-only broadcast for media is available on 1-866-713-8565 in the U.S. and Canada and 1-617-597-5324 for international attendees. Corresponding slides will be available for this call on www.heinz.com. The conference call will be hosted by Art Winkleblack, Executive Vice President and Chief Financial Officer.
SAFE HARBOR PROVISIONS FOR FORWARD-LOOKING STATEMENTS:
This press release and our other public pronouncements contain forward-looking statements within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are generally identified by the words “will,” “expects,” “anticipates,” “believes,” “estimates” or similar expressions and include our expectations as to future revenue growth, earnings, capital expenditures and other spending, dividend policy, and planned credit rating, as well as anticipated reductions in spending. 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. Factors that could cause actual results to differ from such statements include, but are not limited to:
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, 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® entrees, 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 |
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Consolidated Statements of Income | |||||||||||
(In Thousands, Except per Share Amounts) | |||||||||||
First Quarter Ended | |||||||||||
July 27, 2011 | July 28, 2010 | ||||||||||
FY2012 | FY2011 | ||||||||||
Sales | $ | 2,849,581 | $ | 2,480,825 | |||||||
Cost of products sold | 1,864,088 | 1,572,848 | |||||||||
Gross profit | 985,493 | 907,977 | |||||||||
Selling, general and administrative expenses | 615,930 | 502,262 | |||||||||
Operating income | 369,563 | 405,715 | |||||||||
Interest income | 9,777 | 4,117 | |||||||||
Interest expense | 70,955 | 66,752 | |||||||||
Other expense, net | (2,280 | ) | (10,289 | ) | |||||||
Income before income taxes | 306,105 | 332,791 | |||||||||
Provision for income taxes | 71,146 | 84,196 | |||||||||
Net income | 234,959 | 248,595 | |||||||||
Less: Net income attributable to the noncontrolling interest | 8,845 | 8,168 | |||||||||
Net income attributable to H.J. Heinz Company | $ | 226,114 | $ | 240,427 | |||||||
Net income attributable to H.J. Heinz Company common shareholders- diluted | $ | 0.70 | $ | 0.75 | |||||||
Average common shares outstanding - diluted |
324,246 | 321,009 | |||||||||
Net income attributable to H.J. Heinz Company common shareholders- basic | $ | 0.70 | $ | 0.76 | |||||||
Average common shares outstanding - basic |
321,411 | 318,060 | |||||||||
Cash dividends per share | $ | 0.48 | $ | 0.45 | |||||||
H.J. Heinz Company and Subsidiaries |
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Segment Data | |||||||||||||
(Amounts in thousands) | First Quarter Ended | ||||||||||||
July 27, 2011 | July 28, 2010 | ||||||||||||
FY2012 | FY2011 | ||||||||||||
Net external sales: | |||||||||||||
North American Consumer Products | $ | 774,621 | $ | 761,812 | |||||||||
Europe | 837,832 | 713,323 | |||||||||||
Asia/Pacific | 670,766 | 558,180 | |||||||||||
U.S. Foodservice | 324,950 | 328,534 | |||||||||||
Rest of World | 241,412 | 118,976 | |||||||||||
Consolidated Totals | $ | 2,849,581 | $ | 2,480,825 | |||||||||
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Operating income (loss): | |||||||||||||
North American Consumer Products | $ | 190,778 | $ | 191,080 | |||||||||
Europe | 137,439 | 115,036 | |||||||||||
Asia/Pacific | 61,245 | 71,702 | |||||||||||
U.S. Foodservice | 31,556 | 39,489 | |||||||||||
Rest of World | 32,296 | 15,920 | |||||||||||
Other: | |||||||||||||
Non-Operating | (43,240 | ) | (27,512 | ) | |||||||||
Productivity initiatives (a) | (40,511 | ) | - | ||||||||||
Consolidated Totals | $ | 369,563 | $ | 405,715 | |||||||||
The company's revenues are generated via the sale of products in the following categories: | |||||||||||||
Ketchup and Sauces | $ | 1,310,480 | $ | 1,068,813 | |||||||||
Meals and Snacks | 1,008,396 | 924,195 | |||||||||||
Infant/Nutrition | 322,114 | 291,954 | |||||||||||
Other | 208,591 | 156,723 | |||||||||||
Total | $ | 2,849,581 | $ | 2,441,685 | |||||||||
(a) Includes costs 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 |
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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 August 23, 2011: |
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Operating Free Cash Flow Calculation |
First Quarter Ended | |||||||||||||||||||||||||
(amounts in thousands) |
July 27, 2011 |
July 28, 2010 |
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FY 2012 | FY 2011 | |||||||||||||||||||||||||
Cash provided by operating activities | $ | 164,790 | $ | 272,406 | ||||||||||||||||||||||
Capital expenditures | (74,270 | ) | (55,625 | ) | ||||||||||||||||||||||
Proceeds from disposals of property, plant and equipment | 6,592 | 205 | ||||||||||||||||||||||||
Operating Free Cash Flow | $ | 97,112 | $ | 216,986 | ||||||||||||||||||||||
Sales Variances |
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The following table illustrates the components of the change in net sales versus the prior year for each of the five reported business segments. | ||||||||||||||||||||||||||
First Quarter Ended July 27, 2011 | ||||||||||||||||||||||||||
Total Net | ||||||||||||||||||||||||||
Organic | Acquisitions/ | Foreign | Sales | |||||||||||||||||||||||
Volume | + | Price | = | Sales Growth (a) | + | Divestitures | + | Exchange | = | Change | ||||||||||||||||
Segment: | ||||||||||||||||||||||||||
North American Consumer Products | (3.1 | %) | 3.1 | % | 0.0 | % | 0.0 | % | 1.6 | % | 1.7 | % | ||||||||||||||
Europe | 2.2 | % | 2.7 | % | 4.9 | % | 0.0 | % | 12.6 | % | 17.5 | % | ||||||||||||||
Asia/Pacific | (0.7 | %) | 1.7 | % | 1.0 | % | 6.0 | % | 13.1 | % | 20.2 | % | ||||||||||||||
U.S. Foodservice | (3.4 | %) | 2.3 | % | (1.1 | %) | 0.0 | % | 0.0 | % | (1.1 | %) | ||||||||||||||
Rest of World | 4.4 | % | 27.9 | % | 32.3 | % | 68.1 | % | 2.5 | % | 102.9 | % | ||||||||||||||
Consolidated Totals | (0.7 | %) | 3.8 | % | 3.1 | % | 4.6 | % | 7.2 | % | 14.9 | % | ||||||||||||||
Results Excluding Charges for Productivity Initiatives |
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The following table reconciles the Company's reported results to results excluding charges for productivity initiatives. | ||||||||||||||||||||||||||
(amounts in thousands) | First Quarter Ended July 27, 2011 | |||||||||||||||||||||||||
Reported Results | - |
Charges for |
= |
Results excluding charges |
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Sales | $ | 2,849,581 | $ | - | $ | 2,849,581 | ||||||||||||||||||||
Gross Profit | $ | 985,493 | $ | (31,390 | ) | $ | 1,016,883 | |||||||||||||||||||
Gross Profit Margin | 34.6 | % | (1.1 | ) | 35.7 | % | ||||||||||||||||||||
SG&A as a percentage of sales | 21.6 | % | 0.3 | 21.3 | % | |||||||||||||||||||||
Operating Income | $ | 369,563 | $ | (40,511 | ) | $ | 410,074 | |||||||||||||||||||
Effective tax rate | 23.2 | % | (0.8 | ) | 24.0 | % | ||||||||||||||||||||
Net income | $ | 226,114 | $ | (28,448 | ) | $ | 254,562 | |||||||||||||||||||
Earnings per share | $ | 0.70 | $ | (0.09 | ) | $ | 0.78 | |||||||||||||||||||
Constant Currency |
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The following table reconciles the Company's results excluding charges for productivity initiatives to constant currency results for the current period. | ||||||||||||||||||||||||||
(amounts in thousands) |
Results excluding |
- |
Currency |
- |
Currency Translation |
= |
Constant Currency |
Currency Impact | ||||||||||||||||||
Sales | ||||||||||||||||||||||||||
First Quarter Ended July 27, 2011 | $ | 2,849,581 | 178,171 | - | $ | 2,671,410 | (c) | |||||||||||||||||||
First Quarter Ended July 28, 2010 | $ | 2,480,825 | - | - | $ | 2,480,825 | ||||||||||||||||||||
Change | $ | 368,756 | $ | 190,585 | ||||||||||||||||||||||
% Change | 14.9 | % | 7.7 | % | ||||||||||||||||||||||
Earnings per share | ||||||||||||||||||||||||||
First Quarter Ended July 27, 2011 | $ | 0.78 | $ | 0.06 | $ | - | $ | 0.73 | (c) | |||||||||||||||||
First Quarter Ended July 28, 2010 | $ | 0.75 | $ | - | $ | - | $ | 0.75 | ||||||||||||||||||
Change | $ | 0.03 | $ | (0.02 | ) | $ | 0.05 | |||||||||||||||||||
% Change | 4.0 | % | ||||||||||||||||||||||||
Europe Operating Income | ||||||||||||||||||||||||||
First Quarter Ended July 27, 2011 | $ | 137,439 | 14,397 | - | $ | 123,042 | (c) | |||||||||||||||||||
First Quarter Ended July 28, 2010 | $ | 115,036 | - | - | $ | 115,036 | ||||||||||||||||||||
Change | $ | 22,403 | $ | 8,006 | ||||||||||||||||||||||
% Change | 19.5 | % | 7.0 | % | ||||||||||||||||||||||
Organic Sales |
Organic Sales |
+ | Foreign Exchange | + | Acquisitions/ Divestitures | = | Total Net Sales Change | |||||||||||||||||||
Q1 FY12 Emerging Markets | 13.0 | % | 6.3 | % | 25.9 | % | 45.2 | % | ||||||||||||||||||
Q1 FY12 global ketchup | 8.3 | % | 5.3 | % | 1.0 | % | 14.6 | % | ||||||||||||||||||
Q1 FY12 Top 15 brands | 6.2 | % | 6.9 | % | 6.5 | % | 19.6 | % | ||||||||||||||||||
Constant Currency Sales |
Constant Currency |
+ | Foreign Exchange | = | Total Net Sales Change | |||||||||||||||||||||
Q1 FY12 Asia Pacific Emerging Markets | 21.1 | % | 5.5 | % | 26.6 | % | ||||||||||||||||||||
Q1 FY12 Asia Pacific Developed Markets | (3.2 | %) | 18.7 | % | 15.5 | % | ||||||||||||||||||||
(a) Organic sales growth is a non-GAAP measure that excludes the impact of foreign currency translation rates and acquisitions/divestitures. | ||||||||||||||||||||||||||
(b) Excludes costs 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. |
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(c) Excludes currency translation versus FY11 average rates as well as current year translation hedge. | ||||||||||||||||||||||||||
(Totals may not add due to rounding) | ||||||||||||||||||||||||||
H.J. Heinz Company |
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Non-GAAP Performance Ratios | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Sales Variances |
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The following table illustrates the components of the change in net sales versus the prior year. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2006** | 2007** | 2008 | Q109 | Q209 | Q309 | Q409 | 2009 | Q110 | Q210 | Q310 | Q410 | 2010 | Q111 | Q211 | Q311 | Q411 | 2011 | Q112 | ||||||||||||||||||||||||||||||||||||||||||||||
Total Heinz (Continuing Operations): | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Volume | 3.9 | % | 0.8 | % | 3.9 | % | 5.4 | % | (0.9 | %) | (6.2 | %) | (1.9 | %) | (1.1 | %) | (3.9 | %) | (3.8 | %) | 1.2 | % | 1.6 | % | (1.3 | %) | 2.5 | % | 0.3 | % | 0.5 | % | (0.3 | %) | 0.7 | % | (0.7 | %) | ||||||||||||||||||||||||||
Price | (0.1 | %) | 2.2 | % | 3.5 | % | 5.3 | % | 7.2 | % | 8.1 | % | 7.6 | % | 7.1 | % | 6.0 | % | 4.6 | % | 1.8 | % | 1.0 | % | 3.4 | % | 1.1 | % | 0.6 | % | 1.2 | % | 1.9 | % | 1.2 | % | 3.8 | % | ||||||||||||||||||||||||||
Acquisition | 5.0 | % | 1.3 | % | 0.7 | % | 0.7 | % | 1.2 | % | 2.5 | % | 3.4 | % | 2.0 | % | 3.1 | % | 3.1 | % | 2.9 | % | 0.3 | % | 2.3 | % | 0.1 | % | 0.1 | % | 1.2 | % | 1.1 | % | 0.6 | % | 4.6 | % | ||||||||||||||||||||||||||
Divestiture | (1.2 | %) | (3.1 | %) | (0.8 | %) | 0.0 | % | (0.2 | %) | (0.1 | %) | (0.2 | %) | (0.1 | %) | (0.2 | %) | 0.0 | % | 0.0 | % | 0.0 | % | (0.1 | %) | 0.0 | % | 0.0 | % | 0.0 | % | 0.0 | % | 0.0 | % | 0.0 | % | ||||||||||||||||||||||||||
Exchange | (1.4 | %) | 2.8 | % | 5.2 | % | 4.1 | % | (3.2 | %) | (11.3 | %) | (13.9 | %) | (6.6 | %) | (9.0 | %) | (1.0 | %) | 6.9 | % | 5.5 | % | 0.5 | % | (2.1 | %) | (2.3 | %) | (1.4 | %) | 3.3 | % | (0.5 | %) | 7.2 | % | ||||||||||||||||||||||||||
Total Change in Net Sales | 6.1 | % | 3.9 | % | 12.3 | % | 15.5 | % | 4.0 | % | (7.1 | %) | (5.0 | %) | 1.3 | % | (4.0 | %) | 2.9 | % | 12.7 | % | 8.3 | % | 4.8 | % | 1.6 | % | (1.2 | %) | 1.5 | % | 6.0 | % | 2.0 | % | 14.9 | % | ||||||||||||||||||||||||||
Total Organic Growth (a) | 3.8 | % | 3.0 | % | 7.4 | % | 10.7 | % | 6.3 | % | 1.9 | % | 5.7 | % | 6.0 | % | 2.1 | % | 0.8 | % | 3.0 | % | 2.6 | % | 2.1 | % | 3.6 | % | 0.9 | % | 1.7 | % | 1.6 | % | 1.9 | % | 3.1 | % | ||||||||||||||||||||||||||
(a) Organic sales growth is a non-GAAP measure that excludes the impact of foreign currency exchange rates and acquisitions/divestitures. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
** Fiscal 2007 had one less week than Fiscal 2006 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(Totals may not add due to rounding) |
CONTACT:
H.J. Heinz Company
Media:
Michael Mullen, 412-456-5751
Michael.mullen@us.hjheinz.com
or
Investors:
Margaret
Nollen, 412-456-1048