Del Monte Net Boosted by Pet Products Demand

10 Dec 2012 --- Del Monte Foods today reported net sales in the second quarter fiscal 2013 of $1,009.7 million compared to $994.3 million in the second quarter fiscal 2012, an increase of 1.5%.

10 Dec 2012 --- Del Monte Foods has reported net sales in the second quarter fiscal 2013 of $1,009.7 million compared to $994.3 million in the second quarter fiscal 2012, an increase of 1.5%. Pet new product volumes and list pricing actions net of trade spend drove the increase. Existing product declines in both Pet and Consumer partially offset the increase.

Operating income declined 1.8% from $107.1 million in the prior year period to $105.2 million. The decrease was primarily driven by increased marketing and operating costs. This was partially offset by list pricing actions net of trade spend and lower G&A.
 
Adjusted EBITDA increased 1.1% to $160.7 million compared to $158.9 million in the prior year period. The drivers of Adjusted EBITDA were similar to those of operating income noted above. In addition, the cash impact of hedging activity drove the increase in Adjusted EBITDA. Gains and losses on economic hedging positions are recorded as other (income) expense. For cash flow hedges, the effective portion of gains and losses is deferred in equity and recognized as part of cost of products sold in the appropriate period. The cash impact of all hedging activities is reflected in Corporate Adjusted EBITDA. In calculating Adjusted EBITDA, the adjustment for cash benefits from economic hedge positions is calculated pursuant to the Company's 7.625% Notes Indenture and credit agreements.
 
The Company remains committed to long-term brand building in both Pet and Consumer, said Dave West, CEO of Del Monte Foods. In November, the Company launched a national integrated marketing campaign to support the iconic Del Monte brand, highlighting the brands vitality and nutritional appeal. Also, we continue to support new Pet Products such as Meow Mix Tender Centers, Pup-Peroni Mix-Stix, and Milo's Kitchen Chicken Grillers Chicken Recipe through increased marketing investment.
 
Pet Products net sales were $497.0 million, an increase of 5.8% from net sales of $469.6 million in the prior year period. The increase in Pet Products net sales was driven by new product volume growth, primarily in dry cat food and pet snacks. List pricing actions net of trade spend also positively contributed to net sales.
 
Pet Products operating income increased 3.4% from $79.5 million in the second quarter fiscal 2012 to $82.2 million in the second quarter fiscal 2013. The increase was primarily due to list pricing actions net of trade spend partially offset by higher marketing and operating costs. Pet Products Adjusted EBITDA declined from $100.5 million in the second quarter fiscal 2012 to $99.9 million in the second quarter fiscal 2013, or 0.6%.
 
Consumer Products net sales were $512.7 million, a decline of 2.3% from net sales of $524.7 million in the prior year period. The decline in Consumer Products net sales was driven by unit volume declines in existing products (retail Tomato) due to a planned shift in promotional activities and category softness.
 
Consumer Products operating income declined 18.0% from $51.6 million in the second quarter fiscal 2012 to $42.3 million in the second quarter fiscal 2013. The decline was primarily driven by the negative impact of the topline and higher marketing costs to support the Del Monte brand revitalization.

Related Articles

From TWOFI

MetabolAid: Tackling Metabolic Syndrome

Metabolic syndrome is a dangerous condition in which high blood pressure, high cholesterol and obesity combine to increase greatly the risk of someone developing type 2 diabetes or cardiovascular disease. Metabolic syndrome is a global epidemic, but now there’s a powerful new natural formula to address it.

From TWOFI

FMC Strengthens Foothold in Customized Applications

FMC Corporation is increasing its focus on health and nutrition and taking a more local approach to food product development in different regions across the globe. The new FMC European Innovation Center will serve as a central hub for R&D, regional corporate functions and commercial teams.

From TWOFI

The Serious Case for Eating Insects

Population growth around the world is exerting unprecedented pressure on global food production. Already popular in some regions, edible insects for human consumption, are increasingly seen as a key part of the food supply solution.

From TWOFI

View From The Top: Maria-Johanna Schaecher, Raps

Raps has set a turnover target of €180 million for 2015. The company recently commenced a 3-year investment plan entitled “Future Raps” and will invest €18 million in modernization and R&D. A rebranding has also been announced.

From TWOFI

View From The Top: Jim Bergin, CEO, Glanbia Ingredients Ireland

Glanbia Ingredients Ireland’s (GII) new hi-spec infant formula standard facility at Belview, is the single largest dairy investment in the history of the Irish State and the largest infrastructure investment by an indigenous company in Ireland since 1929.

More Articles