Food Business News - October 23, 2012 - (Page 10)

Culver acquisition boosts B&G third-quarter income continued success of the Culver Specialty Brands acquisition and improving sales trends in our base business,” said David L. Wenner, president and chief executive officer. “Margins in the base business improved as we realized strong pricing and increased sales of higher-margin products. At the end of the quarter we ann nounced an agreement to acquire the New Y York Style and Old London brands, which w we expect to complete by year end. We a are very excited to add these brands to the B B&G Foods family as they mark our entry in into the fast growing snack category. We e expect this acquisition to be immediately a accretive to our earnings per share and fr free cash flow.” Volume declines have been a challenge f for B&G Foods, but Mr. Wenner said the b business may be firming, and he is optimisti tic about the fourth quarter and next year. “I have made several references to increasing optimism about volumes going forward,” he said in a conference call with financial analysts on Oct. 19. “Part of that optimism stems from a belief that the overall food industry trends are improving, and part of it comes from building momentum in introducing new items and slotting new and existing items in our portfolio. Our success at mass merchants reflects this trend. Points of distribution on our base business are up over 20% at both Wal-Mart and Target.” Mr. Wenner added that on a channel-bychannel basis B&G Foods is continuing to gain momentum. “Sales to supermarket customers, roughly 50% of our business in Q3, were down 2.1% for the quarter,” he said. “As I mentioned earlier, this decline was very specific to several chains, and sales to the large majority of customers in this channel were flat or positive. The expectation for fourth quarter is that the declines will recover somewhat, and we will continue to see sales lift at the remaining supermarket chains. “Special markets, which include mass merchants, club, dollar, and drug customers, roughly 25% of our business, saw a 9.7% sales increase. This was driven by excellent results at Wal-Mart and Target, where our points of distribution continue to grow nicely, and by a nearly 80% increase in sales to dollar stores. “You may recall that dollar store sales were flat last quarter. That result and this quarter’s surge reflect the volatile nature of the dollar store business. Rotational placements can swing the business by quarter by quarter; and new distribution, typically, has a very significant pipeline effect on sales. We continue to build our dollar store business, on a very small sales base still, in an attempt to follow consumer buying patterns. Over onethird of our brands now have some distribution in one or more dollar store chains, and that presence is growing.” For the nine months ended Sept. 29, the company had an income of $49,701,000, equal to $1.03 per share, up 31% from $37,988,000, equal to 79c per share, during the same period of the previous year. Sales for the period were $460,106,000, up 17% from $393,868,000 during the same period of the previous year. FBN PARSIPPANY, N.J. — Improving sales and the Culver Specialty Brands acquisition helped contribute to a 40% increase in income during the third quarter at B&G Foods, Inc. Net income for the quarter ended Sept. 29 was $16,897,000, equal to 35c per share on the common stock, which compared with an income of $12,084,000, equal to 25c per share, during the same quarter of the previous year. Sales for the quarter were $154,155,000, up 16% from $133,010,000 during the same quarter of the previous year. “The strong improvement in key metrics — net sales, net income, earnings per share and EBITDA — reflects the Foreign exchange rate cuts into McDonald’s earnings OAK BROOK, ILL. — Earnings slipped 3% and revenues were relatively flat for McDonald’s Corp. in the third quarter. The results reflected the impact of foreign currency translation, or the exchange rate. Revenues of $7,152.4 million for the quarter ended Sept. 30 compared to $7,166.3 million in the previous year’s third quarter. Net income of $1,455 million, or $1.43 per diluted share, was down compared to $1,507.3 million, or $1.45 per diluted share, in the previous year’s third quarter. Excluding the exchange rate, revenues rose 4% and net income rose 1%. “While our sales momentum and current financial results reflect today’s challenging conditions, we continue to see significant long-term opportunities for brand McDonald’s and remain confident in the underlying strength of our business model,” said Don Thompson, chief executive officer of Oak Brook-based McDonald’s, when third-quarter results were reported Oct. 19. “We have the right plans in place to drive long-term profitable growth along with the experience and alignment throughout the McDonald’s system to navigate the current environment. “We expect the near-term top- and bottom-line growth to remain pressured as we focus on driving guest traffic and market share by leveraging our strategies and competitive advantages in response to the global economic, operating and competitive challenges. As we begin the fourth quarter, October’s global comparable sales are currently trending negative.” McDonald’s U.S. in the third quarter had a comparable sales increase of 1.2%, but operating income declined 1%. Also in the third quarter, Europe had a 1.8% gain in comparable sales growth and a 7% decrease in operating income. Asia/Pacific, Middle East and Africa (APMEA) in the third quarter had a 1.4% comparable sales increase and a 3% operating income increase. In the first nine months of the fiscal year, McDonald’s overall had revenues of $20,614.9 million, up 2% from $20,183.3 million in the same time period of the previous year, and net income of $4,068.7 million, or $3.98 per share, which compared to $4,126.5 million, or $3.94 per share, in the same time period of the previous year. FBN 10 FOODBUSINESS NEWS ® October 23, 2012

Table of Contents for the Digital Edition of Food Business News - October 23, 2012

Food Business News - October 23, 2012
Private label penetration forecast to grow in U.S.
Softer demand slows rate of Nestle sales growth
Drought’s impact becomes clearer
Table of Contents
Web Contents
Editorial - Food issues dampened before election
Culver acquisition boosts B&G third-quarter income
Foreign exchange rate cuts into McDonald’s earnings
Structural changes cut into PepsiCo sales in third quarter
Legislation proposed to track antibiotic use on farms
Dean Foods posts preliminary WhiteWave-Alpro results
California poultry processor files for Chapter 11 protection
Peapod testing virtual grocery stores in the Northeast
Shell egg prices push Cal-Maine income up sharply
ConAgra to close pork processing plant
Cereal Partners Worldwide to reduce sugar, sodium
Frozen food sales projected to remain sluggish
New food safety effort targets consumers
ConAgra Foods looks to heighten focus on nutrition addition
Cholesterol profile of U.S. adults improving
Food and beverage C.P.I. increases in September
Strong China results boost Yum! earnings
Global Greek yogurt introductions accelerate
Sunland recall reverberates throughout the industry
JBS USA has option to acquire XL Foods
Washington - F.D.A. issues guidance for food facility registration
Sports Nutrition - Broadening the appeal for sports nutrition products
Ingredient Innovations - Ushering in the next generation
Convenience Store Trends - On-the-go gourmet
Beverage Business News - Looking for a Pepsi rebound
Old Orchard debuts frozen sweet tea line
Red Bull to add fruit-flavored energy drinks
Lawsuit takes aim at New York’s 16-oz beverage rule
Coca-Cola profit climbs on volume growth
Beverage industry embraces calorie counts on vending machines
Journal report links sugary beverages to obesity
Tingyi partnership poised for flight
Beverage still tops at Pepsi...barely
Beverage Trends - An (energy) shot in the arm
New Food Products
Ingredient Market Trends - CME Group to acquire the K.C.B.T
Ingredient Markets
Supplier Innovations and News
Ad Index
Food Business in the News

Food Business News - October 23, 2012