Pinnacle Foods Boosted by Birds Eye Acquisition
Consolidated EBITDA, as defined in the company's Senior Secured Credit Facility and the Indentures governing our Senior Notes and Senior Subordinated Notes, was $127.5 million in the first quarter of 2010 and was $493.1 million for the last twelve months ended March 28, 2010.
14 May 2010 --- Pinnacle Foods Finance LLC, a leading manufacturer, marketer and distributor of branded, high-quality food products in North America, announced its financial results for the first quarter ended March 28, 2010. Net sales were $656.4 million compared to $427.4 million in last year’s first quarter. This increase was principally due to the acquisition of Birds Eye Foods, Inc. late in 2009. Net earnings were $3.9 million compared to a loss of $2.1 million in the first quarter of last year.
Consolidated EBITDA, as defined in the company's Senior Secured Credit Facility and the Indentures governing our Senior Notes and Senior Subordinated Notes, was $127.5 million in the first quarter of 2010 and was $493.1 million for the last twelve months ended March 28, 2010. Consolidated EBITDA is defined below under “Non-GAAP Financial Matters”. Pinnacle’s Chief Executive Officer, Robert J. Gamgort said, “We are pleased with our strong start in the first quarter of 2010. We were able to deliver share growth on the majority of our brands while generating strong earnings in an increasingly challenging environment. Integration of Birds Eye is proceeding well and we are beginning to realize acquisition synergies in our results”.
Net sales were $656.4 million in the first quarter of 2010 compared to $427.4 million in last year’s first quarter, an increase of $229.0 million. The acquisition of Birds Eye Foods, Inc. added $243.0 million of net sales. Birds Eye Steamfresh vegetables grew significantly compared with the same period a year ago driven by new product volume, promotional increases and strong market share performance. Birds Eye Voila! Complete bagged meals also showed a significant increase. Aunt Jemima frozen breakfasts, Van de Kamp’s and Mrs. Paul’s frozen seafood, Vlasic pickles and Duncan Hines baking mixes and frostings also posted sales increases.
Net sales for the first quarter of 2010 are about flat compared to the same period a year ago on a proforma basis after giving effect to the acquisition of Birds Eye. However, net sales in our retail brand businesses are up 4% and Specialty Foods Division net sales declined 15% in line with the company’s strategic initiative to deemphasize lower margin foodservice and private label products.
Earnings before interest and taxes (EBIT) were $62.1 million in the first quarter of 2010, or 9.5% of net sales, compared to 8.0% of net sales in the first quarter of 2009. Excluding the impact of the write-up of Birds Eye inventories at the date of acquisition to fair value ($17.3 million), termination benefits ($8.7 million) and integration costs ($2.5 million), EBIT would have been $90.6 million, or 13.8% of net sales. The growth in EBIT and the EBIT margin was principally driven by lower commodity costs, as well as reduced freight and distribution costs and improved mix.
Earnings were also impacted by higher interest expense to fund the Birds Eye acquisition and a lower effective tax rate. This year’s effective tax rate was 43.6%. Last year’s effective tax rate was influenced by the valuation allowance against deferred tax assets which was released in the fourth quarter of 2009. Overall, net earnings were $3.9 million in the first quarter of 2010, compared to $2.1 million loss in the same period a year ago. In the first quarter of 2010, net cash provided by operating activities was $102.2 million led by the strong earnings before interest, taxes, depreciation and amortization and seasonal working capital reductions. During the first quarter of 2010, we paid down $30.1 million of the bank term loans.
