Campbell Reports Fourth-Quarter and Full-Year Results and Increases Quarterly Dividend
- Fourth-Quarter As Reported Sales Comparable to Prior Year, Organic Sales Decreased 1 Percent
-
Fourth-Quarter As Reported Earnings Per Share (EPS) Loss of
$0.26 , Fourth-Quarter Adjusted EPS of$0.46 Decreased 6 Percent - Full-Year As Reported Sales and Organic Sales Decreased 1 Percent
-
Full-Year As Reported EPS of
$1.81 Decreased 15 Percent, Adjusted EPS of$2.94 Increased 11 Percent -
Full-Year Cash Flow From Operations Increased to
$1.463 Billion from$1.182 Billion - Campbell Provides Fiscal 2017 Guidance
Three Months Ended |
Twelve Months Ended |
|||||||||||
($ in millions, except per share) |
July 31, 2016 |
Aug. 2, 2015 |
% Change |
July 31, 2016 |
Aug. 2, 2015 |
% Change |
||||||
Net Sales | ||||||||||||
As Reported (GAAP) | $1,687 | $1,693 | -% | $7,961 | $8,082 | (1)% | ||||||
Organic | (1) % | (1)% | ||||||||||
Earnings (Loss) Before Interest and Taxes | ||||||||||||
As Reported (GAAP) | $(37) | $43 | n/m | $960 | $1,054 | (9)% | ||||||
Adjusted | $253 | $259 | (2)% | $1,467 | $1,316 | 11% | ||||||
Diluted Earnings (Loss) Per Share | ||||||||||||
As Reported (GAAP) | $(0.26) | $0.05 | n/m | $1.81 | $2.13 | (15)% | ||||||
Adjusted | $0.46 | $0.49 | (6)% | $2.94 | $2.65 | 11% |
n/m – not meaningful
Note: A detailed reconciliation of the reported financial information to the adjusted financial information is included at the end of this news release.
CEO Comments
Morrison concluded, “While we have made progress, we recognize we need to deliver sales growth – and it remains a top priority. Reflecting its confidence in our long-term growth prospects and strong profit performance this year, the Board declared a 12 percent increase in our quarterly dividend today.”
Items Impacting Comparability
The Company reported a loss of
Fourth-Quarter Results
Sales of
Gross margin decreased from 33.2 percent to 32.4 percent. Excluding
items impacting comparability, adjusted gross margin decreased 0.9
points. The decrease in adjusted gross margin was primarily driven by
increased promotional spending, inflation, the impact of the
Marketing and selling expenses increased 14 percent to
As reported EBIT was a loss of
Net interest expense increased
Full-Year Results
Sales decreased 1 percent to
EBIT decreased 9 percent to
Net interest expense increased
Cash flow from operations increased to
Company Announces Quarterly Dividend Increase
Campbell announced that the company’s Board of Directors has approved an
increase in its quarterly dividend from
Fiscal 2017 Guidance
Campbell expects sales to increase by 0 to 1 percent, adjusted EBIT to
increase by 1 to 4 percent, and adjusted EPS to increase by 2 to 5
percent, or
Segment Operating Review
An analysis of net sales and operating earnings by reportable segment follows:
Three Months Ended July 31, 2016 |
||||||||
($ in millions) | ||||||||
Americas Simple Meals and Beverages |
Global Biscuits and Snacks |
Campbell Fresh |
Total | |||||
Net Sales, as Reported | $842 | $622 | $223 | $1,687 | ||||
|
||||||||
Volume and Mix | 2% | 3% | (10)% | 1% | ||||
Price and Sales Allowances | -% | 1% | -% | -% | ||||
Promotional Spending | (1)% | (2)% | (2)% | (2)% | ||||
Organic Net Sales | -%* | 2% | (12)% | (1)% | ||||
Currency | -% | (1)% | -% | (1)% | ||||
Acquisitions | -% | -% | 7% | 1% | ||||
% Change vs. Prior Year | -% | 1% | (5)% | -%* | ||||
Segment Operating Earnings | $191 | $81 | $8 | |||||
% Change vs. Prior Year | 4% | 5% | (62)% |
* Numbers do not add due to rounding.
Note: A detailed reconciliation of the reported net sales to organic net sales is included at the end of this news release.
Twelve Months Ended July 31, 2016 |
||||||||
($ in millions) | ||||||||
Americas Simple Meals and Beverages |
Global Biscuits and Snacks |
Campbell Fresh |
Total | |||||
Net Sales, as Reported | $4,380 | $2,564 | $1,017 | $7,961 | ||||
|
||||||||
Volume and Mix | (2)% | 1% | (3)% | (1)% | ||||
Price and Sales Allowances | 1% | 1% | -% | 1% | ||||
Promotional Spending | -% | -% | (1)% | -% | ||||
Organic Net Sales | (1)% | 1%* | (4)% | (1)%* | ||||
Currency | (1)% | (4)% | -% | (2)% | ||||
Acquisitions | -% | -% | 10% | 1% | ||||
% Change vs. Prior Year | (2)% | (3)% | 5%* | (1)%* | ||||
Segment Operating Earnings | $1,069 | $422 | $60 | |||||
% Change vs. Prior Year | 13% | 10% | (2)% |
* Numbers do not add due to rounding.
Note: A detailed reconciliation of the reported net sales to organic net sales is included at the end of this news release.
Americas Simple Meals and Beverages
Sales in the quarter were comparable to the prior year at
Segment operating earnings increased 4 percent to
Global Biscuits and Snacks
Sales increased 1 percent in the quarter to
Segment operating earnings increased 5 percent to
Campbell Fresh
Sales decreased 5 percent in the quarter to
Segment operating earnings decreased 62 percent to
Unallocated Corporate Expenses
Unallocated corporate expenses for the quarter were
Conference Call
Campbell will host a conference call to discuss these results today at
About
Campbell (NYSE:CPB) is driven and inspired by our Purpose, “Real food
that matters for life’s moments.” We make a range of high-quality soups
and simple meals, beverages, snacks and packaged fresh foods. For
generations, people have trusted Campbell to provide authentic,
flavorful and readily available foods and beverages that connect them to
each other, to warm memories and to what’s important today. Led by our
iconic Campbell’s brand, our portfolio includes
Forward-Looking Statements
This release contains “forward-looking statements” that reflect the
company’s current expectations about the impact of its future plans and
performance on the company’s business or financial results. These
forward-looking statements, including the statements made regarding
sales, EBIT and EPS guidance for fiscal 2017, rely on a number of
assumptions and estimates that could be inaccurate and which are subject
to risks and uncertainties. The factors that could cause the company’s
actual results to vary materially from those anticipated or expressed in
any forward-looking statement include (1) the company’s ability to
manage changes to its organizational structure and/or business
processes; (2) the company’s ability to realize projected cost savings
and benefits from its efficiency programs; (3) the impact of strong
competitive responses to the company’s efforts to leverage its brand
power in the market; (4) the impact of changes in consumer demand for
the company’s products; (5) the impact of product quality and safety
issues, including recalls and product liabilities; (6) the risks
associated with trade and consumer acceptance of the company’s
initiatives, including its trade and promotional programs; (7) the
practices, including changes to inventory practices, and increased
significance of certain of the company’s key trade customers; (8) the
impact of fluctuations in the supply or costs of energy and raw and
packaging materials; (9) the impact of business portfolio changes; (10)
the uncertainties of litigation and regulatory actions against the
company; (11) disruption to the independent contractor distribution
models used by certain of our businesses, including the results of
litigation or regulatory actions that could affect their independent
contractor classification; (12) the company’s ability to protect its
intellectual property rights; (13) the impact of an impairment to
goodwill or other intangible assets; (14) the impact of a material
failure in or breach of the company’s information technology systems;
(15) the impact of changes in currency exchange rates, tax rates,
interest rates, debt and equity markets, inflation rates, economic
conditions, law, regulation and other external factors; (16) the impact
of unforeseen business disruptions in one or more of the company’s
markets due to political instability, civil disobedience, terrorism,
armed hostilities, natural disasters or other calamities; and (17) other
factors described in the company’s most recent Form 10-K and subsequent
CAMPBELL SOUP COMPANY | ||||||||
CONSOLIDATED STATEMENTS OF EARNINGS | ||||||||
(millions, except per share amounts) | ||||||||
Three Months Ended | ||||||||
July 31, 2016 | August 2, 2015 | |||||||
Net sales | $ | 1,687 | $ | 1,693 | ||||
Costs and expenses | ||||||||
Cost of products sold | 1,141 | 1,131 | ||||||
Marketing and selling expenses | 216 | 189 | ||||||
Administrative expenses | 185 | 193 | ||||||
Research and development expenses | 38 | 34 | ||||||
Other expenses / (income) | 145 | 10 | ||||||
Restructuring charges | (1 | ) | 93 | |||||
Total costs and expenses | 1,724 | 1,650 | ||||||
Earnings (loss) before interest and taxes | (37 | ) | 43 | |||||
Interest, net | 28 | 27 | ||||||
Earnings (loss) before taxes | (65 | ) | 16 | |||||
Taxes on earnings | 16 | (1 | ) | |||||
Net earnings (loss) | (81 | ) | 17 | |||||
Net loss attributable to noncontrolling interests | — | — | ||||||
Net earnings (loss) attributable to Campbell Soup Company | $ | (81 | ) | $ | 17 | |||
Per share - basic | ||||||||
Net earnings (loss) attributable to Campbell Soup Company | $ | (.26 | ) | $ | .05 | |||
Dividends | $ | .312 | $ | .312 | ||||
Weighted average shares outstanding - basic | 308 | 310 | ||||||
Per share - assuming dilution | ||||||||
Net earnings (loss) attributable to Campbell Soup Company | $ | (.26 | ) | $ | .05 | |||
Weighted average shares outstanding - assuming dilution | 310 | 312 |
In fiscal 2016, the company changed the method of accounting for the
recognition of actuarial gains and losses for defined benefit pension
and postretirement plans and the calculation of expected return on
pension plan assets. These changes in accounting policy have been
retrospectively applied to all periods presented. The company excludes
the impact of the mark-to-market adjustments resulting from these
accounting changes in evaluating performance. In the fourth quarter of
fiscal 2016, the company incurred losses of
CAMPBELL SOUP COMPANY | |||||||
CONSOLIDATED STATEMENTS OF EARNINGS | |||||||
(millions, except per share amounts) | |||||||
Twelve Months Ended | |||||||
July 31, 2016 | August 2, 2015 | ||||||
Net sales | $ | 7,961 | $ | 8,082 | |||
Costs and expenses | |||||||
Cost of products sold | 5,181 | 5,300 | |||||
Marketing and selling expenses | 893 | 884 | |||||
Administrative expenses | 641 | 601 | |||||
Research and development expenses | 124 | 117 | |||||
Other expenses / (income) | 131 | 24 | |||||
Restructuring charges | 31 | 102 | |||||
Total costs and expenses | 7,001 | 7,028 | |||||
Earnings before interest and taxes | 960 | 1,054 | |||||
Interest, net | 111 | 105 | |||||
Earnings before taxes | 849 | 949 | |||||
Taxes on earnings | 286 | 283 | |||||
Net earnings | 563 | 666 | |||||
Net loss attributable to noncontrolling interests | — | — | |||||
Net earnings attributable to Campbell Soup Company | $ | 563 | $ | 666 | |||
Per share - basic | |||||||
Net earnings attributable to Campbell Soup Company | $ | 1.82 | $ | 2.13 | |||
Dividends | $ | 1.248 | $ | 1.248 | |||
Weighted average shares outstanding - basic | 309 | 312 | |||||
Per share - assuming dilution | |||||||
Net earnings attributable to Campbell Soup Company | $ | 1.81 | $ | 2.13 | |||
Weighted average shares outstanding - assuming dilution | 311 | 313 |
In fiscal 2016, the company changed the method of accounting for the
recognition of actuarial gains and losses for defined benefit pension
and postretirement plans and the calculation of expected return on
pension plan assets. These changes in accounting policy have been
retrospectively applied to all periods presented. The company excludes
the impact of the mark-to-market adjustments resulting from these
accounting changes in evaluating performance. In fiscal 2016, the
company incurred losses of
CAMPBELL SOUP COMPANY | ||||||||||
CONSOLIDATED SUPPLEMENTAL SCHEDULE OF SALES AND EARNINGS | ||||||||||
(millions, except per share amounts) | ||||||||||
Three Months Ended | ||||||||||
July 31, 2016 | August 2, 2015 |
Percent
Change |
||||||||
Sales |
||||||||||
Contributions: | ||||||||||
Americas Simple Meals and Beverages | $ | 842 | $ | 842 | —% | |||||
Global Biscuits and Snacks | 622 | 617 | 1% | |||||||
Campbell Fresh | 223 | 234 | (5)% | |||||||
Total sales | $ | 1,687 | $ | 1,693 | —% | |||||
Earnings |
||||||||||
Contributions: | ||||||||||
Americas Simple Meals and Beverages | $ | 191 | $ | 183 | 4% | |||||
Global Biscuits and Snacks | 81 | 77 | 5% | |||||||
Campbell Fresh | 8 | 21 | (62)% | |||||||
Total operating earnings | 280 | 281 | —% | |||||||
Unallocated corporate expenses | 318 | 145 | ||||||||
Restructuring charges | (1 | ) | 93 | |||||||
Earnings (loss) before interest and taxes | (37 | ) | 43 | (186)% | ||||||
Interest, net | 28 | 27 | ||||||||
Taxes on earnings | 16 | (1 | ) | |||||||
Net earnings (loss) | (81 | ) | 17 | (576)% | ||||||
Net loss attributable to noncontrolling interests | — | — | ||||||||
Net earnings (loss) attributable to Campbell Soup Company | $ | (81 | ) | $ | 17 | (576)% | ||||
Per share - assuming dilution | ||||||||||
Net earnings (loss) attributable to Campbell Soup Company | $ | (.26 | ) | $ | .05 | (620)% |
In fiscal 2016, the company modified its segment reporting as a result of changes in the management of the business. In addition, the company changed the method of accounting for the recognition of actuarial gains and losses for defined benefit pension and postretirement plans and the calculation of expected return on pension plan assets. In fiscal 2016, the company also modified its method of allocating pension and postretirement benefit costs to reportable segments. Through fiscal 2015, the company included all components of benefit expense in measuring segment performance. In fiscal 2016, service cost is allocated to segments. All other components of expense, including interest cost, expected return on assets, and recognized actuarial gains and losses, are reflected in Unallocated corporate expenses and not included in segment operating results. The changes in segment reporting and accounting policies have been retrospectively applied to all periods presented.
CAMPBELL SOUP COMPANY | ||||||||||
CONSOLIDATED SUPPLEMENTAL SCHEDULE OF SALES AND EARNINGS | ||||||||||
(millions, except per share amounts) | ||||||||||
Twelve Months Ended | ||||||||||
July 31, 2016 | August 2, 2015 |
Percent
Change |
||||||||
Sales |
||||||||||
Contributions: | ||||||||||
Americas Simple Meals and Beverages | $ | 4,380 | $ | 4,483 | (2)% | |||||
Global Biscuits and Snacks | 2,564 | 2,631 | (3)% | |||||||
Campbell Fresh | 1,017 | 968 | 5% | |||||||
Total sales | $ | 7,961 | $ | 8,082 | (1)% | |||||
Earnings |
||||||||||
Contributions: | ||||||||||
Americas Simple Meals and Beverages | $ | 1,069 | $ | 948 | 13% | |||||
Global Biscuits and Snacks | 422 | 383 | 10% | |||||||
Campbell Fresh | 60 | 61 | (2)% | |||||||
Total operating earnings | 1,551 | 1,392 | 11% | |||||||
Unallocated corporate expenses | 560 | 236 | ||||||||
Restructuring charges | 31 | 102 | ||||||||
Earnings before interest and taxes | 960 | 1,054 | (9)% | |||||||
Interest, net | 111 | 105 | ||||||||
Taxes on earnings | 286 | 283 | ||||||||
Net earnings | 563 | 666 | (15)% | |||||||
Net loss attributable to noncontrolling interests | — | — | ||||||||
Net earnings attributable to Campbell Soup Company | $ | 563 | $ | 666 | (15)% | |||||
Per share - assuming dilution | ||||||||||
Net earnings attributable to Campbell Soup Company | $ | 1.81 | $ | 2.13 | (15)% |
In fiscal 2016, the company modified its segment reporting as a result of changes in the management of the business. In addition, the company changed the method of accounting for the recognition of actuarial gains and losses for defined benefit pension and postretirement plans and the calculation of expected return on pension plan assets. In fiscal 2016, the company also modified its method of allocating pension and postretirement benefit costs to reportable segments. Through fiscal 2015, the company included all components of benefit expense in measuring segment performance. In fiscal 2016, service cost is allocated to segments. All other components of expense, including interest cost, expected return on assets, and recognized actuarial gains and losses, are reflected in Unallocated corporate expenses and not included in segment operating results. The changes in segment reporting and accounting policies have been retrospectively applied to all periods presented.
CAMPBELL SOUP COMPANY | |||||||
CONDENSED CONSOLIDATED BALANCE SHEETS | |||||||
(millions) | |||||||
July 31, 2016 | August 2, 2015 | ||||||
Current assets | $ | 1,908 | $ | 2,093 | |||
Plant assets, net | 2,407 | 2,347 | |||||
Intangible assets, net | 3,415 | 3,549 | |||||
Other assets | 107 | 88 | |||||
Total assets | $ | 7,837 | $ | 8,077 | |||
Current liabilities | $ | 2,728 | $ | 2,806 | |||
Long-term debt | 2,141 | 2,539 | |||||
Other liabilities | 1,435 | 1,355 | |||||
Total equity | 1,533 | 1,377 | |||||
Total liabilities and equity | $ | 7,837 | $ | 8,077 | |||
Total debt | $ | 3,533 | $ | 4,082 | |||
Cash and cash equivalents | $ | 296 | $ | 253 |
In fiscal 2016, the company changed the method of accounting for the recognition of actuarial gains and losses for defined benefit pension and postretirement plans and the calculation of expected return on pension plan assets. These changes in accounting policy have been retrospectively applied to all periods presented.
CAMPBELL SOUP COMPANY | ||||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||
(millions) | ||||||||
Twelve Months Ended | ||||||||
July 31, 2016 | August 2, 2015 | |||||||
Cash flows from operating activities: | ||||||||
Net earnings | $ | 563 | $ | 666 | ||||
Adjustments to reconcile net earnings to operating cash flow | ||||||||
Impairment charges | 141 | 6 | ||||||
Restructuring charges | 31 | 102 | ||||||
Stock-based compensation | 64 | 57 | ||||||
Pension and postretirement benefit expense | 317 | 118 | ||||||
Depreciation and amortization | 308 | 303 | ||||||
Deferred income taxes | (30 | ) | (49 | ) | ||||
Other, net | 6 | 15 | ||||||
Changes in working capital, net of acquisition | ||||||||
Accounts receivable | 24 | 12 | ||||||
Inventories | 59 | (18 | ) | |||||
Prepaid assets | 9 | 10 | ||||||
Accounts payable and accrued liabilities | (13 | ) | 6 | |||||
Pension fund contributions | (2 | ) | (5 | ) | ||||
Receipts from hedging activities | 44 | 11 | ||||||
Other | (58 | ) | (52 | ) | ||||
Net cash provided by operating activities | 1,463 | 1,182 | ||||||
Cash flows from investing activities: | ||||||||
Purchases of plant assets | (341 | ) | (380 | ) | ||||
Sales of plant assets | 5 | 15 | ||||||
Business acquired, net of cash acquired | — | (232 | ) | |||||
Other, net | (18 | ) | (6 | ) | ||||
Net cash used in investing activities | (354 | ) | (603 | ) | ||||
Cash flows from financing activities: | ||||||||
Net short-term borrowings (repayments) | (547 | ) | 100 | |||||
Long-term borrowings | — | 300 | ||||||
Repayments of notes payable | — | (309 | ) | |||||
Dividends paid | (390 | ) | (394 | ) | ||||
Treasury stock purchases | (143 | ) | (244 | ) | ||||
Treasury stock issuances | 2 | 9 | ||||||
Excess tax benefits on stock-based compensation | 7 | 6 | ||||||
Contributions from noncontrolling interest | — | 9 | ||||||
Other, net | — | (3 | ) | |||||
Net cash used in financing activities | (1,071 | ) | (526 | ) | ||||
Effect of exchange rate changes on cash | 5 | (32 | ) | |||||
Net change in cash and cash equivalents | 43 | 21 | ||||||
Cash and cash equivalents — beginning of period | 253 | 232 | ||||||
Cash and cash equivalents — end of period | $ | 296 | $ | 253 |
In fiscal 2016, the company changed the method of accounting for the recognition of actuarial gains and losses for defined benefit pension and postretirement plans and the calculation of expected return on pension plan assets. These changes in accounting policy have been retrospectively applied to all periods presented.
Reconciliation of GAAP to Non-GAAP Financial Measures
Fiscal
Year Ended
Organic Net Sales
Organic net sales are net sales excluding the impact of currency and acquisitions. Management believes that excluding these items, which are not part of the ongoing business, improves the comparability of year-to-year results. A reconciliation of net sales as reported to organic net sales follows.
Three Months Ended | ||||||||||||||||||||||||||
July 31, 2016 |
August 2, 2015 |
% Change | ||||||||||||||||||||||||
(millions) |
Net Sales, as Reported |
Impact of Currency |
Impact of Acquisitions |
Organic Net Sales |
Net Sales, as Reported |
Net Sales, as Reported |
Organic Net Sales |
|||||||||||||||||||
Americas Simple Meals and Beverages | $ | 842 | $ | 4 | $ | — | $ | 846 | $ | 842 | — | % | — | % | ||||||||||||
Global Biscuits and Snacks | 622 | 6 | — | 628 | 617 | 1 | % | 2 | % | |||||||||||||||||
Campbell Fresh | 223 | — | (16 | ) | 207 | 234 | (5 | )% | (12 | )% | ||||||||||||||||
Total Net Sales | $ | 1,687 | $ | 10 | $ | (16 | ) | $ | 1,681 | $ | 1,693 | — | % | (1 | )% | |||||||||||
Year Ended | ||||||||||||||||||||||||||
July 31, 2016 |
August 2, 2015 |
% Change | ||||||||||||||||||||||||
(millions) |
Net Sales, as Reported |
Impact of Currency |
Impact of Acquisitions |
Organic Net Sales |
Net Sales, as Reported |
Net Sales, as Reported |
Organic Net Sales |
|||||||||||||||||||
Americas Simple Meals and Beverages | $ | 4,380 | $ | 55 | $ | — | $ | 4,435 | $ | 4,483 | (2 | )% | (1 | )% | ||||||||||||
Global Biscuits and Snacks | 2,564 | 103 | — | 2,667 | 2,631 | (3 | )% | 1 | % | |||||||||||||||||
Campbell Fresh | 1,017 | — | (92 | ) | 925 | 968 | 5 | % | (4 | )% | ||||||||||||||||
Total Net Sales | $ | 7,961 | $ | 158 | $ | (92 | ) | $ | 8,027 | $ | 8,082 | (1 | )% | (1 | )% |
Items Impacting Gross Margin, Costs and Expenses, and Earnings
The company believes that financial information excluding certain items that are not considered to be part of the ongoing business, such as those listed below, improves the comparability of year-to-year results. Consequently, the company believes that investors may be able to better understand its results excluding these items.
The following items impacted gross margin, costs and expenses, and earnings:
(1) | In fiscal 2016, the company changed the method of accounting for the recognition of actuarial gains and losses for defined benefit pension and postretirement plans and the calculation of expected return on pension plan assets. Historically, actuarial gains and losses associated with benefit obligations were recognized in Accumulated other comprehensive loss in the Consolidated Balance Sheets and were amortized into earnings over the remaining service life of participants to the extent that the amounts were in excess of a corridor. Under the new policy, actuarial gains and losses will be recognized immediately in the Consolidated Statements of Earnings as of the measurement date, which is typically the end of the fiscal year, or more frequently if an interim remeasurement is required. In addition, the company will no longer use a market-related value of plan assets, which is an average value, to determine the expected return on assets but rather will use the fair value of plan assets. The company excludes the impact of the mark-to-market adjustments resulting from these accounting changes in evaluating performance. These changes in accounting policy have been retrospectively applied to all periods presented. In the fourth quarter of fiscal 2016, the company incurred losses of $138 million in Costs and expenses ($90 million after tax, or $.29 per share) due to mark-to-market adjustments. In fiscal 2016, the company incurred losses of $313 million in Costs and expenses ($200 million after tax, or $.64 per share) due to mark-to-market adjustments. In the fourth quarter of fiscal 2015, the company incurred losses of $110 million in Costs and expenses ($69 million after tax, or $.22 per share). In fiscal 2015, the company incurred losses of $138 million in Costs and expenses ($87 million after tax, or $.28 per share) due to mark-to-market adjustments. | |
(2) | In fiscal 2015, the company implemented a new enterprise design and initiatives to reduce costs and to streamline its organizational structure. In the fourth quarter of fiscal 2016, the company recorded implementation costs and other related costs of $12 million in Administrative expenses related to these initiatives. In the fourth quarter of fiscal 2016, the company also recorded a reduction to Restructuring charges of $1 million related to the fiscal 2014 initiatives. The aggregate after-tax impact of Restructuring charges, implementation costs and other related costs was $7 million, or $.02 per share. In fiscal 2016, the company recorded Restructuring charges of $35 million and implementation costs and other related costs of $47 million in Administrative expenses related to the fiscal 2015 initiatives. The company also recorded a reduction to Restructuring charges of $4 million related to the fiscal 2014 initiatives. The aggregate after-tax impact of Restructuring charges, implementation costs and other related costs was $49 million, or $.16 per share. In the fourth quarter of fiscal 2015, the company recorded Restructuring charges of $93 million and implementation costs of $13 million in Administrative expenses related to the fiscal 2015 initiatives (aggregate impact of $67 million after tax, or $.21 per share). In fiscal 2015, the company recorded Restructuring charges of $102 million and implementation costs of $22 million in Administrative expenses related to the fiscal 2015 initiatives (aggregate impact of $78 million after tax, or $.25 per share). | |
(3) | In fiscal 2016, the company recorded a gain of $25 million in Other expenses / (income) ($.08 per share) from a settlement of a claim related to the Kelsen acquisition. | |
(4) | In the fourth quarter of fiscal 2016, as part of the annual review of intangible assets, the company recorded a non-cash impairment charge of $141 million in Other expenses / (income) ($127 million after tax, or $.41 per share) related to the intangible assets of the Bolthouse Farms carrot and carrot ingredients reporting unit. |
The following tables reconcile financial information, presented in accordance with GAAP, to financial information excluding certain items:
Three Months Ended | |||||||||||||||||||||||||||
July 31, 2016 | August 2, 2015 | ||||||||||||||||||||||||||
(millions, except per share amounts) |
As reported |
Adjustments(a) | Adjusted |
As reported |
Adjustments(a) | Adjusted |
Adjusted Percent Change |
||||||||||||||||||||
Gross margin | $ | 546 | $ | 63 | $ | 609 | $ | 562 | $ | 64 | $ | 626 | (3 | )% | |||||||||||||
Gross margin percentage | 32.4 | % | 36.1 | % | 33.2 | % | 37.0 | % | |||||||||||||||||||
Marketing and selling expenses | 216 | (20 | ) | 196 | 189 | (17 | ) | 172 | |||||||||||||||||||
Administrative expenses | 185 | (57 | ) | 128 | 193 | (34 | ) | 159 | |||||||||||||||||||
Research and development expenses | 38 | (10 | ) | 28 | 34 | (8 | ) | 26 | |||||||||||||||||||
Other expenses / (income) | 145 | (141 | ) | 4 | 10 | — | 10 | ||||||||||||||||||||
Restructuring charges | (1 | ) | 1 | — | 93 | (93 | ) | — | |||||||||||||||||||
Earnings (loss) before interest and taxes | $ | (37 | ) | $ | 290 | $ | 253 | $ | 43 | $ | 216 | $ | 259 | (2 | )% | ||||||||||||
Interest, net | 28 | — | 28 | 27 | — | 27 | |||||||||||||||||||||
Earnings (loss) before taxes | $ | (65 | ) | $ | 290 | $ | 225 | $ | 16 | $ | 216 | $ | 232 | ||||||||||||||
Taxes | 16 | 66 | 82 | (1 | ) | 80 | 79 | ||||||||||||||||||||
Effective income tax rate | (24.6 | )% | 36.4 | % | (6.3 | )% | 34.1 | % | |||||||||||||||||||
Net earnings (loss) attributable to Campbell Soup Company | $ | (81 | ) | $ | 224 | $ | 143 | $ | 17 | $ | 136 | $ | 153 | (7 | )% | ||||||||||||
Diluted net earnings (loss) per share attributable to Campbell Soup Company | $ | (.26 | ) | $ | .72 | $ | .46 | $ | .05 | $ | .44 | $ | .49 | (6 | )% | ||||||||||||
(a)See following table for additional information. |
Three Months Ended | ||||||||||||||||||||||||||||
July 31, 2016 | August 2, 2015 | |||||||||||||||||||||||||||
(millions, except per share amounts) |
Mark-to- market (1) |
Restructuring charges, implementation costs and other related costs (2) |
Impairment charges (4) |
Adjustments |
Mark-to- market (1) |
Restructuring charges and implementation costs (2) |
Adjustments | |||||||||||||||||||||
Gross margin | $ | 63 | $ | — | $ | — | $ | 63 | $ | 64 | $ | — | $ | 64 | ||||||||||||||
Marketing and selling expenses | (20 | ) | — | — | (20 | ) | (17 | ) | — | (17 | ) | |||||||||||||||||
Administrative expenses | (45 | ) | (12 | ) | — | (57 | ) | (21 | ) | (13 | ) | (34 | ) | |||||||||||||||
Research and development expenses | (10 | ) | — | — | (10 | ) | (8 | ) | — | (8 | ) | |||||||||||||||||
Other expenses / (income) | — | — | (141 | ) | (141 | ) | — | — | — | |||||||||||||||||||
Restructuring charges | — | 1 | — | 1 | — | (93 | ) | (93 | ) | |||||||||||||||||||
Earnings before interest and taxes | $ | 138 | $ | 11 | $ | 141 | $ | 290 | $ | 110 | $ | 106 | $ | 216 | ||||||||||||||
Interest, net | — | — | $ | — | — | — | — | — | ||||||||||||||||||||
Earnings before taxes | $ | 138 | $ | 11 | $ | 141 | $ | 290 | $ | 110 | $ | 106 | $ | 216 | ||||||||||||||
Taxes | 48 | 4 | 14 | 66 | 41 | 39 | 80 | |||||||||||||||||||||
Net earnings attributable to Campbell Soup Company | $ | 90 | $ | 7 | $ | 127 | $ | 224 | $ | 69 | $ | 67 | $ | 136 | ||||||||||||||
Diluted net earnings per share attributable to Campbell Soup Company* | $ | .29 | $ | .02 | $ | .41 | $ | .72 | $ | .22 | $ | .21 | $ | .44 | ||||||||||||||
*The sum of the individual per share amounts may not add due to rounding. |
Year Ended | |||||||||||||||||||||||||||
July 31, 2016 | August 2, 2015 | ||||||||||||||||||||||||||
(millions, except per share amounts) |
As reported |
Adjustments(a) | Adjusted |
As reported |
Adjustments(a) | Adjusted |
Adjusted Percent Change |
||||||||||||||||||||
Gross margin | $ | 2,780 | $ | 176 | $ | 2,956 | $ | 2,782 | $ | 80 | $ | 2,862 | 3 | % | |||||||||||||
Gross margin percentage | 34.9 | % | 37.1 | % | 34.4 | % | 35.4 | % | |||||||||||||||||||
Marketing and selling expenses | 893 | (46 | ) | 847 | 884 | (21 | ) | 863 | |||||||||||||||||||
Administrative expenses | 641 | (118 | ) | 523 | 601 | (49 | ) | 552 | |||||||||||||||||||
Research and development expenses | 124 | (20 | ) | 104 | 117 | (10 | ) | 107 | |||||||||||||||||||
Other expenses / (income) | 131 | (116 | ) | 15 | 24 | — | 24 | ||||||||||||||||||||
Restructuring charges | 31 | (31 | ) | — | 102 | (102 | ) | — | |||||||||||||||||||
Earnings before interest and taxes | $ | 960 | $ | 507 | $ | 1,467 | $ | 1,054 | $ | 262 | $ | 1,316 | 11 | % | |||||||||||||
Interest, net | 111 | — | 111 | 105 | — | 105 | |||||||||||||||||||||
Earnings before taxes | $ | 849 | $ | 507 | $ | 1,356 | $ | 949 | $ | 262 | $ | 1,211 | |||||||||||||||
Taxes | 286 | 156 | 442 | 283 | 97 | 380 | |||||||||||||||||||||
Effective income tax rate | 33.7 | % | 32.6 | % | 29.8 | % | 31.4 | % | |||||||||||||||||||
Net earnings attributable to Campbell Soup Company | $ | 563 | $ | 351 | $ | 914 | $ | 666 | $ | 165 | $ | 831 | 10 | % | |||||||||||||
Diluted net earnings per share attributable to Campbell Soup Company* | $ | 1.81 | $ | 1.13 | $ | 2.94 | $ | 2.13 | $ | .53 | $ | 2.65 | 11 | % | |||||||||||||
(a)See following table for additional information. | |||||||||||||||||||||||||||
*The sum of the individual per share amounts may not add due to rounding. |
Year Ended | ||||||||||||||||||||||||||||||||
July 31, 2016 | August 2, 2015 | |||||||||||||||||||||||||||||||
(millions, except per share amounts) |
Mark-to- market (1) |
Restructuring charges, implementation costs and other related costs (2) |
Claim settlement (3) |
Impairment charges (4) |
Adjustments |
Mark-to- market (1) |
Restructuring charges and implementation costs (2) |
Adjustments | ||||||||||||||||||||||||
Gross margin | $ | 176 | $ | — | $ | — | $ | — | $ | 176 | $ | 80 | $ | — | $ | 80 | ||||||||||||||||
Marketing and selling expenses | (46 | ) | — | — | — | (46 | ) | (21 | ) | — | (21 | ) | ||||||||||||||||||||
Administrative expenses | (71 | ) | (47 | ) | — | — | (118 | ) | (27 | ) | (22 | ) | (49 | ) | ||||||||||||||||||
Research and development expenses | (20 | ) | — | — | — | (20 | ) | (10 | ) | — | (10 | ) | ||||||||||||||||||||
Other expenses / (income) | — | — | 25 | (141 | ) | (116 | ) | — | — | — | ||||||||||||||||||||||
Restructuring charges | — | (31 | ) | — | — | (31 | ) | — | (102 | ) | (102 | ) | ||||||||||||||||||||
Earnings before interest and taxes | $ | 313 | $ | 78 | $ | (25 | ) | $ | 141 | $ | 507 | $ | 138 | $ | 124 | $ | 262 | |||||||||||||||
Interest, net | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||
Earnings before taxes | $ | 313 | $ | 78 | $ | (25 | ) | $ | 141 | $ | 507 | $ | 138 | $ | 124 | $ | 262 | |||||||||||||||
Taxes | 113 | 29 | — | 14 | 156 | 51 | 46 | 97 | ||||||||||||||||||||||||
Net earnings attributable to Campbell Soup Company | $ | 200 | $ | 49 | $ | (25 | ) | $ | 127 | $ | 351 | $ | 87 | $ | 78 | $ | 165 | |||||||||||||||
Diluted net earnings per share attributable to Campbell Soup Company | $ | .64 | $ | .16 | $ | (.08 | ) | $ | .41 | $ | 1.13 | $ | .28 | $ | .25 | $ | .53 |
View source version on businesswire.com: http://www.businesswire.com/news/home/20160901005605/en/
Source:
Campbell Soup Company INVESTOR CONTACT: Ken Gosnell, 856-342-6081 ken_gosnell@campbellsoup.com or MEDIA CONTACT: Carla Burigatto, 856-342-3737 carla_burigatto@campbellsoup.com