Pinnacle Foods Reports Growth For Second Quarter Fiscal 2013

Pinnacle Foods Inc. reported strong growth in net earnings and diluted earnings per share (EPS), excluding items affecting comparability, for the second quarter ended June 30, 2013 and raised its annual guidance for fiscal 2013 to reflect its recently-announced acquisition of Wish-Bone®.

Consolidated net sales for the second quarter of 2013 declined approximately 3 percent to $569 million, driven by the company's specialty foods segment, including its planned exit of low-margin, unbranded businesses, as well as the impact of an earlier Easter in 2013. Net sales for North America retail, which is comprised of the Birds Eye Frozen and Duncan Hines Grocery segments, declined 1.6 percent versus year-ago in the quarter and were even with year-ago for the first six months of 2013. Pinnacle's retail consumption for the first six months of 2013 slightly outpaced the performance of its composite categories, which declined approximately 1 percent versus year-ago, based on data from IRI.

As previously disclosed, results in the second quarter included charges relating to the April 3, 2013 close of the company's initial public offering, subsequent debt refinancing actions and other items affecting comparability. Combined, these charges impacted financial results by $62 million on an after-tax basis in the quarter.

On a generally accepted accounting principles (GAAP) basis, the company reported a net loss in the second quarter of 2013 of $31.8 million, or $0.28 per share, compared to a net loss of $10.6 million, or $0.13 per share, in the year-ago period. Excluding the items listed above, on a pro forma basis which is described below, net earnings for the second quarter advanced 65 percent to $33.7 million, or $0.29 per diluted share, compared to net earnings of $20.4 million, or $0.17 per diluted share, in the year-ago period.

Commenting on the results, Pinnacle Foods Chief Executive Officer Bob Gamgort said in a prepared statement, "We delivered another quarter of strong earnings growth as we expanded gross margins through effective productivity programs and ongoing improvement in product mix. We held share across the composite of our categories; however, our net sales were impacted by overall category weakness, partially due to the earlier timing of Easter. Our strong earnings performance in the first half of 2013 has enabled us to strengthen investment spending in the back half to remain fully competitive in several key categories."

Gamgort continued, "We are excited to add Wish-Bone® to our portfolio and expect it to be slightly accretive to EPS in 2013. Wish-Bone® is a great fit with our successful strategy of 'Reinvigorating Iconic Brands' and enhances our ability to offer consumers meal solutions across our broad portfolio."

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