McCormick Reports Record Profits and 7% Sales Increase for Third Quarter
SPARKS, Md., Sept. 16 /PRNewswire/ -- McCormick & Company, Incorporated (NYSE: MKC) today reported record sales and earnings per share for the third quarter of 1999 on a comparable basis with 1998. Earnings per share before the effect of previously announced special charges were 39 cents for the quarter versus 29 cents for the prior year, an increase of 34%. For the first three quarters, the Company reported comparable earnings per share of 92 cents, an increase of 26% over earnings per share of 73 cents for the prior year. Including the special charges, earnings per share were 35 cents for the third quarter and 68 cents for the first nine months.
Net sales for the quarter were $477 million, up 7% over the third quarter of 1998. Excluding the effects of foreign exchange and divested businesses, sales for the quarter increased 8%. Third quarter sales rose 9% for the Company's worldwide consumer food business and 6% for the industrial and food service businesses. Sales for the Company's packaging business rose 8%. For the first three quarters, McCormick's net sales were $1.4 billion, an increase of 7% over 1998.
In the quarter, gross margins increased to 34.4% from 32.9% in 1998. Before special charges, operating income rose 13%. Unconsolidated income from McCormick's joint ventures more than doubled to $4.5 million for the quarter.
Commented Robert J. Lawless, Chairman, President & CEO, "We are exceeding our 1999 targets for net sales growth, gross margin improvement and earnings per share increase. Sales growth initiatives and operations improvements contributed to another successful quarter. Supply chain management, programs to improve manufacturing efficiencies, well-executed marketing strategies and working capital management are translating into improved financial performance in our consumer, industrial and packaging operations worldwide.
"Performance was consistently positive across all businesses this quarter. We have good momentum as we begin our important fourth quarter and are confident that 1999 will be an outstanding year for McCormick."
McCormick & Company, Incorporated
Third Quarter Report
Consolidated Income Statement (Unaudited)
(In thousands, except per-share data)
Three Months Ended Nine Months Ended
8/31/99 8/31/98 8/31/99 8/31/98
NET SALES $476,761 $444,793 $1,386,482 $1,295,448
Cost of goods sold 312,532 298,518 919,179 874,713
Gross profit 164,229 146,275 467,303 420,735
Gross profit
percentage 34.4% 32.9% 33.7% 32.5%
Selling, general
& administrative
expense 120,280 107,295 355,042 320,608
Special charges 3,039 129 17,704 808
Operating income 40,910 38,851 94,557 99,319
Interest expense 8,231 9,616 24,519 27,313
Other (income)
expense, net (1,072) (1,162) (3,348) (3,903)
Income before
income taxes 33,751 30,397 73,386 75,909
Income taxes 12,904 10,943 32,376 27,327
Net income from
consolidated
operations 20,847 19,454 41,010 48,582
Income from
unconsolidated
operations 4,514 1,996 8,317 5,168
NET INCOME $25,361 $21,450 $49,327 $53,750
EARNINGS PER
SHARE - BASIC $0.36 $0.29 $0.69 $0.73
Average shares
outstanding - basic 71,220 73,154 71,700 73,452
EARNINGS PER
SHARE - DILUTED $0.35 $0.29 $0.68 $0.73
Average shares
outstanding - diluted 71,800 73,856 72,230 74,097
Condensed Consolidated Balance Sheet (Unaudited)
(In thousands)
8/31/99 8/31/98
Assets
Receivables $183,294 $179,647
Inventories 271,407 278,822
Prepaid allowances 136,653 162,592
Property, plant and equipment, net 364,458 384,270
Other assets 278,131 268,578
Total assets $1,233,943 $1,273,909
Liabilities and shareholders' equity
Short-term borrowings $213,020 $254,083
Other current liabilities 320,766 307,150
Long-term debt 242,197 262,016
Other liabilities 101,680 90,023
Shareholders' equity 356,280 360,637
Total liabilities and
shareholders' equity $1,233,943 $1,273,909
SOURCE McCormick & Company, Incorporated