Milling & Baking News - January 13, 2004 - 16

F I N A N C I A L

R E S U L T S

the U.S. Consumer Products business posted net sales of $87.1 million during company also continues to take steps
remain conservative."
the third quarter of fiscal 2004, down 3% to minimize the complexity of its CaDuring the third quarter, net sales of from $90 million last year. Multifoods nadian food service products business
the Foodservice Products division were said that after adjusting for currency by reducing the number of products it
$53.4 million, down 10% from $59.4 effects, sales were down approximately sells and eliminating duplicative items,
million in the prior year. Multifoods 15% as a result of lower volumes and Multifoods said.
said the planned rationalization of low- lower returns on a U.S. dollar-denomiResults in both the third quarter of
margin accounts and product lines, and nated basis as a result of a stronger Ca- fiscal 2004 and 2003 were affected by
lower baking mix volumes in the food nadian dollar.
unusual and one-time items.
service distributor channel more than
Mr. Byom said that the company's
Excluding unusual and one-time items,
offset growth in the company's thaw- Canadian Foodservice baking mix busi- earnings from continuing operations for
and-serve products.
ness has been adversely affected by the the third quarter were $14.8 million, or
Excluding unusual items, operating decision of a large customer to move to 76c per diluted share, compared with
earnings were $600,000, down from a frozen product format. He added that $15.8 million, or 81c per share, in the third
$1.6 million in last year's third
quarter of fiscal 2003.
quarter.
The company's third-quarInternational Multifoods Corp.
"Results were negatively
ter results included unusual
operating results by segment
affected by higher ingredient
items totaling $1.1 million
in millions
costs and lower volumes," Mr.
pre-tax, $600,000 after-tax or 3c
Net
%
Operating
%
Byom said. "Ingredient costs in
per share, for severance costs
Third quarter ended Nov. 29
sales
change earnings change
our Foodservice Products busirelated to the departures of
U.S. Consumer Products
$133.2
-12%
$23.9
-3%
ness were up about $1 million
two executives.
Foodservice Products
$53.4
-10%
$0.3
-81%
in the quarter, reflecting sharply
In last year's third quarter,
higher egg costs. A tight supply
the company recorded a nonCanadian Foods
$87.1
-3%
$6.4
-28%
coupled with an increased
cash, pre-tax charge of $4.7
demand for eggs, due in part to the Multifoods expects the profitability of million, or 15c per share, to write off prepopularity of the low-carb protein diets, its Canadian Foods business to improve paid bank fees associated with the early
has resulted in a significant spike in egg during the fourth quarter. "First, we retirement of $194 million of debt.
prices. For the quarter, the cost of liquid should begin to see the results of our
Multifoods said it expects earnings
whole eggs was up 100% and the cost efforts to improve productivity at our before unusual and one-time items of
for dried egg whites rose 150%. To cover Bick's pickle plant and increase yields at $1.30 to $1.40 per share for the fiscal year
the higher costs we have taken selective our mills," Mr. Byom said. "Second, ear- ending Feb. 28.
price increases on products where we lier this year we organized our Canadian
Including unusual and one-time
have been hit the hardest.
operations to strengthen our competitive items, reported earnings per share are
"Though some segments of the food position, sharpen our focus on custom- expected to be in the range of 92c to
service industry appear to be improving, ers and improve speed of execution. $1.02, but the company acknowledged
our food service products business will These changes also allowed us to change that it might recognize additional chargcontinue to be affected in the near term our cost structure, which will help our es in the fourth quarter for restructuring
by higher costs. During the quarter we bottom line. And, finally, we have been actions related to the organizational ascontinued to invest in new value-added taking pricing actions on some products sessments that are under way.
products, such as our thaw-and-serve to offset higher commodity costs."
Multifoods' annualized financial tarmuffin line.
Multifoods noted that during the third gets for the three-year period beginning
"These products have been key to our quarter it completed an upgrade and ex- next fiscal year are net sales growth of
growing relationship with a leading na- pansion at its Montreal mill, which gave 2% to 3%, operating earnings growth of
tional food service customer."
the company greater supply chain flex- 4% to 6% and earnings per share growth
Multifoods' Canadian Foods business ibility and improved productivity. The of 7% to 9%. MBN

Monsanto sustains first-quarter
loss after $111 million in charges
ST. LOUIS - Monsanto Co. sustained a loss
in the first quarter ended Nov. 30 after $111
million in goodwill write-off and restructuring charges.
The first-quarter loss totaled $97 million,
compared with a loss of $18 million in the
first quarter of fiscal 2003.
The loss included a $69-million goodwill write-off related to the global wheat
business and $42 million in restructuring
charges. The latter included $24 million associated with discontinued operations.
Net sales increased 22% to $1,028 million, primarily reflecting higher sales of
Roundup herbicide in the United States
16 / Milling & Baking News, January 13, 2004

and Brazil.
"Our first-quarter performance was
anchored by improved Roundup and
branded corn seed results in Brazil," said
Hugh Grant, chairman, president and chief
executive officer of Monsanto. "We are also
pleased that our free cash flow generation
remains strong.
"As we begin the major selling season for
seeds in the United States, early indications
point to another solid showing for Monsanto's branded seeds and technology traits in
this major agricultural market."
First-quarter net sales of $385 million for
the Seeds and Genomics segment were up

$20 million from the first quarter of fiscal
2003. "This improvement was largely driven by a rebound in the performance of the
Brazilian branded corn seed business and
stronger corn seed sales in Mexico, where
favorable weather and planting conditions
prevailed," Monsanto said.
Higher revenues from cotton traits in
Australia also contributed to increased sales,
Monsanto said. "A severe drouth in Argentina that reduced sales of branded corn
somewhat offset these gains," it added.
Sales of soybean seed and traits increased
7% in the quarter to $169 million.
The segment sustained a loss from continuing operations of $96 million in the first
quarter, compared with earnings before
interest and taxes of $45 million in the yearago quarter. MBN
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Milling & Baking News - January 13, 2004

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