McCormick Reports Higher Sales And Profits
Earnings per share for the fourth quarter were 68¢ versus 65¢ for the comparable quarter of 1997, an increase of 5%. Sales increased 5% to $586 million. Operating income for the quarter excluding restructuring increased 9%. The Company's global consumer and foodservice businesses had excellent results, with double-digit sales and profit growth. These gains were partially offset by unfavorable foreign currency exchange rates and lower fourth quarter profit in the Company's industrial food business and packaging businesses. Also in the quarter, the Company recorded net restructuring charges of $1.5 million (1.3¢ per share) resulting primarily from the discontinuation of manufacturing operations in Venezuela, offset by other restructuring charges and credits relating to the completion of prior years' restructuring plans.
Commented Robert J. Lawless, President & CEO, "Again this quarter, the Company's earnings improved over the same quarter of the prior year. We are particularly pleased with the performance of our global consumer and foodservice businesses. Successful consumer marketing initiatives, such as the relaunch of our dry seasoning mix line, along with distribution gains, made an important contribution. Our McCormick and Schilling brand products are outperforming the category growth, and we expect this success to continue into 1999.
"Outstanding operating results and distribution gains in Australia and Canada were dampened by unfavorable currency exchange rates. Weak economies in Asia and Latin America continue to negatively impact our results. "The fundamentals of our business remain strong. Our programs are working, and we firmly believe we are on the right track for future success."
Consolidated Income Statement
(in thousands except per-share data)
Three months ended Year ended
(Unaudited)
11/30/98 11/30/97 11/30/98 11/30/97
NET SALES $585,698 $556,974 $1,881,146 $1,800,966
Cost of goods sold 357,509 338,060 1,232,222 1,172,328
Gross profit 228,189 218,914 648,924 628,638
Percentage 39.0% 39.3% 34.5% 34.9%
Selling, general and administrative expense 143,171 141,146 463,779 461,022
Restructuring charge (credit) 1,507 113 2,315 (3,227)
Operating income 83,511 77,655 182,830 170,843
Interest expense 9,622 9,281 36,935 36,332
Other (income) expense, net (2,701) (3,395) (6,604) (7,795)
Income from consolidated continuing operations
before income taxes 76,590 71,769 152,499 142,306
Income taxes 27,573 25,915 54,900 52,653
Net income from consolidated continuing operations 49,017 45,854 97,599 89,653
Income from unconsolidated operations 1,061 2,336 6,229 7,762
Net income from continuing operations 50,078 48,190 103,828 97,415
Income from discontinued operations,
net of income taxes - - - 1,013
NET INCOME $ 50,078 $ 48,190 $ 103,828 $ 98,428
EARNINGS PER SHARE - BASIC
Continuing operations $0.69 $0.65 $1.42 $1.29
Discontinued operations - - - 0.01
EARNINGS PER SHARE - BASIC $0.69 $0.65 $1.42 $1.30
Average shares outstanding - basic 72,668 74,397 73,259 75,658
EARNINGS PER SHARE - DILUTED
Continuing operations $0.68 $0.65 $1.41 $1.29
Discontinued operations - - - 0.01
EARNINGS PER SHARE - DILUTED $0.68 $0.65 $1.41 $1.30
Average shares outstanding - diluted 73,242 74,606 73,886 75,852
Condensed Consolidated Balance Sheet
(in thousands)
11/30/98 11/30/97
Assets
Receivables $ 212,804 $ 217,198
Inventories 250,893 252,084
Prepaid allowances 143,722 130,943
Property - net 377,032 380,015
Other assets 274,602 275,992
Total assets $ 1,259,053 $ 1,256,232
Liabilities and shareholders' equity
Short-term borrowings $ 163,679 $ 121,302
Other current liabilities 354,255 376,947
Long-term debt 250,363 276,489
Other liabilities 102,585 88,384
Shareholders' equity 388,171 393,110
Total liabilities and shareholders' equity $ 1,259,053 $ 1,256,232