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 28, 2012
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.) |
1 PPG Place, Suite 3100, 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 28, 2012 furnished herewith as Exhibit 99.1.
This press release presents the Company’s results 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 taken in Fiscal 2012 to accelerate growth. 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 presents the business measure of organic sales growth, which is defined as 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 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 fiscal years ended April 29, 2012 and April 27, 2011 and the expected financial results for the first quarter ended July 29, 2012 and the financial results for the first quarter ended July 27, 2011.
ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS
(d) Exhibits
Exhibit Number | |
(Referenced to |
|
Item 601 of | |
Regulation S-K) |
Description of Exhibit |
99.1 | H.J. Heinz Company Press Release dated August 28, 2012 |
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 |
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|
|
By |
/s/ Arthur B. Winkleblack |
|
Arthur B. Winkleblack |
||||
Executive Vice President and |
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Chief Financial Officer |
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Dated: August 28, 2012 |
EXHIBIT INDEX
Exhibit No. |
Description |
99.1 |
H. J. Heinz Company Press Release dated August 28, 2012 |
Exhibit 99.1
Heinz Chairman Tells Shareholders the Company Expects to Report Strong First-Quarter Results with EPS of $0.87
PITTSBURGH--(BUSINESS WIRE)--August 28, 2012--At the H.J. Heinz Company (NYSE: HNZ) Annual Meeting of Shareholders today, Chairman, President and CEO William R. Johnson said the Company expects to report “strong first-quarter results,” including:
Mr. Johnson said the expected first-quarter results would reflect “dynamic growth in Emerging Markets as well as improved productivity, higher margins and a favorable tax rate.”
He noted that Heinz achieved growth in earnings per share in the quarter “despite the headwinds of a still weak economy and adverse foreign currency trends that reduced EPS by around four cents.”
“Overall, our strong first-quarter results put Heinz on track to deliver our previously announced outlook for Fiscal 2013,” Mr. Johnson told shareholders at the meeting in Pittsburgh.
Heinz will report its first-quarter results on August 29.
Reconciliations of non-GAAP amounts are set forth in the attached financial tables. Results excluding charges for productivity initiatives in FY12 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. 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.
EXCERPTS FROM MR. JOHNSON’S SPEECH TO SHAREHOLDERS
Mr. Johnson said Heinz delivered “excellent Fiscal 2012 results” and that the Company is “off to a strong start” in Fiscal 2013 “despite the weak global economy.”
“In my opinion, few companies can match our track record of consistent growth and performance,” he said. “Despite the lingering impact of the worst recession in decades and a lethargic recovery in the U.S. and Western Europe, Heinz has delivered a remarkable 28 consecutive quarters of organic sales growth through the end of Fiscal 2012.”
Mr. Johnson said Heinz is “focused on driving the growth of Ketchup & Sauces, our crown jewel, our founder’s legacy and our largest and fastest-growing core category.”
He added: “Emerging Markets contributed almost one-quarter of our total Ketchup & Sauces revenue in Fiscal 2012 and I expect that to grow dramatically in the years to come.”
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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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 this press release: |
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Results from Continuing Operations Excluding Charges for Fiscal 2012 Productivity Initiatives | ||||
The following tables reconcile the Company's reported results for Q1 Fiscal 2012 to results excluding charges for productivity initiatives in Fiscal 2012 in this presentation. |
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(amounts in thousands, except per share data) |
First Quarter Ended |
Change in Results | ||
(Continuing Operations) |
Expected |
Excluding FY 12 Charges for |
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H.J. Heinz Company Net Income | ~ $280,000 | ~ 10% | ||
Diluted EPS | ~ $0.87 | ~ 10% | ||
(amounts in thousands, except per share data) | First Quarter Ended July 27, 2011 | |||
(Continuing Operations) | A | B | C=A-B | |
|
Charges for | Results Excluding | ||
Reported | Productivity | Charges for | ||
Results | Initiatives | Productivity Initiatives (1) | ||
H.J. Heinz Company Net Income | $226,729 | ($28,448) | $255,177 | |
Diluted EPS | $0.70 | ($0.09) | $0.79 | |
(1) Excludes charges 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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(Totals may not add due to rounding) | ||||
H. J. Heinz Company | ||||
Estimated Constant Currency Results | ||||
The following tables reconcile the Company's estimated reported results to estimated constant currency results for the first quarter of Fiscal 2013 in this presentation. |
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(amounts in thousands, except per share data) | First Quarter Ended July 29, 2012 | |||
(Continuing Operations) | A | B | C | D=A-B-C |
Currency | ||||
Expected | Currency | Translation | Constant Currency | |
Results | Translation | Hedges | Results (2) | |
H.J. Heinz Company Net Income | ~ $280,000 | ~ ($18,000) | ~ $4,000 | ~ $294,000 |
(amounts in thousands, except per share data) |
First Quarter Ended July 27, 2011 |
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(Continuing Operations) | Results Excluding | Constant Currency | ||
Charges for | ||||
Productivity Initiatives (1) | Change (3) | |||
H.J. Heinz Company Net Income | $255,177 | ~ 15% | ||
(1) See separate reconciliation and explanation of these figures compared to the reported amounts. | ||||
(2) Excludes currency translation versus FY12 average rates as well as current year currency translation hedges. | ||||
(3) Change is calculated by taking Q1 FY13 constant currency results versus the Q1 FY12 reported results. | ||||
(Totals may not add due to rounding) |
H. J. Heinz Company | |||||||||||||||||||||||||||||
Sales Variance Analysis | |||||||||||||||||||||||||||||
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 | |||||||||||||||||
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%) | ||||||||||||||||
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% | ||||||||||||||||
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% | ||||||||||||||||
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%) | ||||||||||||||||
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% | ||||||||||||||||
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% | ||||||||||||||||
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% | ||||||||||||||||
Q111 | Q211 | Q311 | Q411 | 2011 | Q112 | Q212 | Q312 | Q412 | 2012** | ||||||||||||||||||||
Total Heinz (Continuing Operations): | |||||||||||||||||||||||||||||
Volume | 2.5% | 0.3% | 0.5% | (0.3%) | 0.7% | (0.7%) | (2.9%) | 0.4% | 1.5% | (0.3%) | |||||||||||||||||||
Price | 1.1% | 0.6% | 1.2% | 1.9% | 1.2% | 3.8% | 4.4% | 4.2% | 3.0% | 3.8% | |||||||||||||||||||
Acquisition | 0.1% | 0.1% | 1.2% | 1.1% | 0.6% | 4.6% | 5.0% | 3.6% | 3.1% | 4.0% | |||||||||||||||||||
Divestiture | 0.0% | 0.0% | 0.0% | 0.0% | 0.0% | 0.0% | (0.6%) | (0.7%) | (0.7%) | (0.5%) | |||||||||||||||||||
Exchange | (2.1%) | (2.3%) | (1.4%) | 3.3% | (0.5%) | 7.2% | 2.4% | (0.4%) | (1.3%) | 1.8% | |||||||||||||||||||
Total Change in Net Sales | 1.6% | (1.2%) | 1.5% | 6.0% | 2.0% | 14.9% | 8.3% | 7.2% | 5.6% | 8.8% | |||||||||||||||||||
Total Organic Growth (a) | 3.6% | 0.9% | 1.7% | 1.6% | 1.9% | 3.1% | 1.5% | 4.6% | 4.5% | 3.5% | |||||||||||||||||||
Total Heinz (Continuing Operations): | Q113 | ||||||||||||||||||||||||||||
Volume | ~ 2.5% | ||||||||||||||||||||||||||||
Price | ~ 2.5% | ||||||||||||||||||||||||||||
Acquisition | 0.0% | ||||||||||||||||||||||||||||
Divestiture | ~ (0.5)% | ||||||||||||||||||||||||||||
Exchange | ~ (6.0)% | ||||||||||||||||||||||||||||
Total Change in Net Sales | ~ (1.5)% | ||||||||||||||||||||||||||||
Total Organic Growth (a) | ~ 5.0% | ||||||||||||||||||||||||||||
(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
** Fiscal 2012 had 2 extra business days than Fiscal 2011
(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
Mary Ann Bell, 412-237-9760