Del Monte Foods Company (NYSE: DLM), today reported earnings per share, as adjusted, of $0.24 for the third quarter of fiscal 2001. This compares with $0.23, as adjusted, in the third quarter of fiscal 2000. Net sales for the quarter were $383.4 million, compared to $353.4 million in the comparable prior year period. 

The increase in net sales for the quarter was due to increased sales in both retail and non-retail channels. Earnings per share, as adjusted, reflect these higher volumes, somewhat offset by higher production costs and an unfavorable mix as the Company continued to sell excess inventories by increasing sales through the lower margin non-retail channels. 

"Overall, we are pleased with the results for the quarter," said Richard G. Wolford, Chairman and Chief Executive Officer. "Our revenues were up 8.5% over the third quarter of last year. Consumer purchases of Del Monte products continue to be strong with vegetable consumption up 5%, and solid tomatoes up 14%. Like other grocery manufacturers, however, our shipments to our trade
customers lagged consumer purchases as retailers continued to reduce their inventory levels. 

"During the quarter, we were also very pleased to complete our acquisition of S&W, which is consistent with our strategy to grow with premium branded businesses that expand our markets and leverage our selling and operating infrastructure. The S&W acquisition is expected to be accretive to earnings per share and EBITDA beginning in fiscal 2002." 

Net income, as adjusted, for the quarter was $12.8 million compared to $12.0 million for the same quarter last year. EBITDA, as adjusted, for the quarter was $44.3 million compared to $43.4 million in the same quarter last year. 

As adjusted results exclude special charges related to plant consolidations and other non-recurring items and use an income tax rate of 32.1% compared to the 39.0% rate used last year. The Company's effective income tax rate for this year includes the benefit of net operating losses and other tax adjustments. 

Actual diluted earnings per share for the third quarter ended March 31, 2001 were $0.20 per share compared to $0.18 per share in last year's third quarter, and net income was $10.7 million compared to $9.3 million last year. 

Nine Months Ended March 31, 2001

Net sales for the first nine months of fiscal 2001 were $1,122.4 million compared to net sales of $1,142.4 million for the same period last year. Net income, as adjusted, for the first nine months was $32.0 million compared to $40.5 million for the first nine months of last year. Earnings per share, as adjusted, for the first nine months of fiscal 2001 were $0.61, compared to $0.76 for the first nine months of fiscal 2000. EBITDA, as adjusted, for the first nine months of fiscal 2001 was $129.6 million compared to $142.0 million for the comparable period last year. 

The decline in net sales for the nine months, when compared to the prior year period, reflects the impact of unusually high Y2K-related sales volumes in the first half of fiscal 2000. Earnings per share, as adjusted, decreased primarily due to lower volumes and higher production costs in the current year. 

Actual diluted earnings per share for the first nine months of fiscal 2001 were $0.49 per share compared to $0.73 per share in the prior year period, and net income was $25.6 million compared to $39.0 million last year. 

Outlook

For the full fiscal year 2001, the Company continues to expect that net sales will be approximately 2% to 4% higher than in fiscal 2000, including the impact of the March 2001 acquisition of S&W (or 1% to 2% excluding S&W). Adjusted earnings per share for fiscal 2001 are expected to be approximately $0.83 to $0.90 (or $0.88 to $0.92 excluding S&W). Adjusted EBITDA is expected to
range from $173 million to $179 million for the full year (or $175 million to $179 million excluding the impact of S&W). 

Del Monte Foods Company, with net sales of approximately $1.5 billion in fiscal 2000, is the largest producer and distributor of premium quality, branded processed fruit, vegetable and tomato products in the United States. The Del Monte brand was introduced in 1892 and is one of the best known brands in the United States. Del Monte products are sold through national grocery chains, independent grocery stores, warehouse club stores, mass merchandisers, drug stores and convenience stores under the Del Monte, Contadina, S&W and Sunfresh brands. The Company also sells its products to the U.S. military, certain export markets, the foodservice industry and food processors. The Company operates fourteen production facilities and seven distribution centers in the U.S., has operations in Venezuela and owns Del Monte brand marketing rights in South America. 

Company news release
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