McCormick Reports Record Profit and $2 Billion in Sales for Fiscal 1999
SPARKS, Md., Jan. 13 /PRNewswire/ -- McCormick & Company, Incorporated (NYSE: MKC) today reported record sales and earnings per share for the fourth quarter and fiscal 1999.
Earnings per share for the year ended November 30 were $1.69, excluding a previously announced special charge. On a comparable basis, this was an increase of 18% over 1998. The reported earnings per share, including special charges for 1999 and 1998, were $1.43 and $1.41, respectively. Sales increased 7% to $2.0 billion. Excluding foreign exchange and divested businesses, the increase in sales for 1999 was 8%. Gross profit margin ended the year at 35.7% versus 34.5% in 1998, through a combination of favorable product mix and cost reduction efforts. Each business segment -- consumer, industrial, and packaging -- contributed positively to sales and income growth. Unconsolidated income for 1999 was $13.4 million, $7.2 million above last year.
Earnings per share for the quarter were 77 cents, excluding special charges. This result compares to 70 cents for the prior year, an increase of 10%. The reported fourth quarter earnings per share, including special charges for 1999 and 1998, were 76 cents and 68 cents, respectively. Sales for the quarter were $620 million, up 6% over 1998. Gross profit margin for the quarter increased to 40.3% from 39.0% in 1998. Unconsolidated income for the quarter rose $4.0 million above 1998.
Operating cash flows for 1999 improved by $85 million for the year and $17 million for the quarter. A focus on managing assets more efficiently contributed to the improvement in cash flow.
Commented Robert J. Lawless, Chairman, President & CEO, "We have met or exceeded our 1999 targets for sales growth, gross margin improvement and earnings per share increase. Sales growth initiatives and improvements in operations contributed to another very successful quarter. The Company's consumer branded products continue to benefit from well executed strategies in markets worldwide. Our industrial and packaging segments are developing new products and gaining new customers. Our balance sheet is sound, and cash flow is strong.
"Despite our excellent performance, we believe our current market valuation has been adversely affected by the uncertainty surrounding the FTC investigation begun in 1996. Based an the FTC staff's review of more than 2,000 of our contracts with customers, the FTC believes that we have violated the price discrimination rules of the Robinson-Patman Act in three of those contracts. We take extraordinary care to insure that we are in compliance with the Robinson-Patman Act. It is our belief that we were meeting competition in the three contracts challenged by the FTC. Although we disagree with the FTC's conclusions, we believe it is in the best interest of our stockholders to enter into a settlement with the FTC as long as it does not impair our ability to compete in the future. We are pleased to report that settlement discussions are in progress. A resolution of this situation can be accomplished with no adverse financial effect on the Company. McCormick will continue to compete aggressively to grow all of our businesses in the United States and around the world.
"In summary, McCormick's 1999 results were consistently positive across all businesses. Our team is executing well, and we have the right programs underway to build shareholder value into 2000 and beyond."
MCCORMICK & COMPANY, INCORPORATED
Fourth Quarter Report
Consolidated Income Statement
(In thousands except per-share data)
Three Months Ended Year Ended
(Unaudited)
11/30/99 11/30/98 11/30/99 11/30/98
NET SALES $620,435 $585,698 $2,006,917 $1,881,146
Cost of goods sold 370,535 357,509 1,289,714 1,232,222
Gross profit 249,900 228,189 717,203 648,924
Gross profit margin 40.3% 39.0% 35.7% 34.5%
Selling, general &
administrative expense 167,275 143,171 522,317 463,779
Special charges 310 1,507 18,014 2,315
Operating income 82,315 83,511 176,872 182,830
Interest expense 7,912 9,622 32,431 36,935
Other (income)
expense, net (2,270) (2,701) (5,618) (6,604)
Income before income taxes 76,673 76,590 150,059 152,499
Income taxes 27,734 27,573 60,110 54,900
Net income from
consolidated operations 48,939 49,017 89,949 97,599
Income from unconsolidated
operations 5,040 1,061 13,357 6,229
NET INCOME $53,979 $50,078 $103,306 $103,828
EARNINGS PER SHARE - BASIC $0.76 $0.69 $1.45 $1.42
Average shares outstanding
- basic 70,729 72,668 71,449 73,259
EARNINGS PER SHARE
- ASSUMING DILUTION $0.76 $0.68 $1.43 $1.41
Average shares outstanding
- assuming dilution 71,350 73,242 71,999 73,886
Condensed Consolidated Balance Sheet
(In thousands)
11/30/99 11/30/98
Assets
Receivables $213,926 $212,804
Inventories 234,171 250,893
Prepaid allowances 109,253 143,722
Property, plant and equipment, net 363,251 377,032
Other assets 268,178 274,602
Total assets $1,188,779 $1,259,053
Liabilities and shareholders' equity
Short-term borrowings $100,671 $163,679
Other current liabilities 369,961 354,255
Long-term debt 241,432 250,363
Other liabilities 94,293 102,585
Shareholders' equity 382,422 388,171
Total liabilities and
shareholders' equity $1,188,779 $1,259,053
SOURCE McCormick & Company, Incorporated
CONTACT: McCormick Corporate Communications, 410-771-7310/
/Web site: http://www.mccormick.com /
(MKC)
CO: McCormick & Company, Incorporated
ST: Maryland
IN: FOD
SU: ERN
PD-MK
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0954 01/13/2000 09:48 EST http://www.prnewswire.com