Milling & Baking News - January 4, 2005 - 14

F I N A N C I A L

R E S U L T S

Food Ingredients unit's profit soars
46% in quarter at ConAgra Foods

million, reflecting healthy volume
growth of approximately 7% as well
as increased pricing necessitated by
higher input costs.
OMAHA - Buoyed by good perfor- ics were better, contributing to the
For ConAgra as a whole, net income
mance from grain-based foods in- profit increase for those types of items. in the second quarter dropped 10% to
gredients due to higher volumes and
"Our focus is on profitable growth $242.3 million, equal to 47c per share
improved market conditions, the Food for our highest potential products," on the common stock. Last year 's
Ingredients unit of ConAgra Foods, Mr. Heckman said. "We have new second-quarter net income of $270.1
Inc. posted its second consecutive sales opportunities with our season- million, or 51c per share, included
period of strong operating profit. For ings, blends and flavoring items contributions from businesses that
the second quarter ended Nov.
ConAgra no longer owns.
28, operating profit of the Food
Net sales in the second quarConAgra Foods, Inc.
Ingredients unit totaled $79.2
ter were $4,116.2 million, an 8%
second-quarter
results
million, up 46% from $54.1
increase over last year 's $3,804.8
(in millions)
million in last year 's second
million.
quarter.
Operating profit was $545.4
Operating profit
2004
2003
% change
The Food Ingredients unit,
million, up 10% from $497.7
Retail Products
$375.2
$357.8
4.9%
which includes the company's
million in the second quarter
Foodservice Products
$91.0
$85.8
6.1%
flour milling and millfeed marlast year.
Food Ingredients
$79.2
$54.1
46.4%
keting businesses, recorded
"The company is tracking
Sales
2004
2003
% change
second-quarter sales of $691.3
with its plan for solid e.p.s. permillion, a 20% increase over
formance this fiscal year," said
Retail Products
$2,485.4
$2,271.6
9.4%
last year 's $577 million.
Bruce Rohde, ConAgra's chairFoodservice Products
$939.5
$956.2
(1.7%)
"The $25 million of operatman and chief executive officer.
Food Ingredients
$691.3
$577.0
19.8%
ing profit increase includes
"Our sales growth this quarter
growth of approximately $19
builds on last quarter 's strong
million from trading and merchandis- and our whole grain products ... all top-line performance and reflects
ing energy, grains, fertilizer and other of which allow us to give our trade continued progress with marketing
inputs and commodities," ConAgra customers ingredients with great taste and operating initiatives being implesaid. "These trading and merchandis- and consistent quality."
mented to fuel profitable growth. As
ing operations are benefiting from a
Year-to-date operating profit for the expected, we continued to experifavorable market environment."
Food Ingredients division was $139 ence increased input costs in several
In a Dec. 22 conference call, Greg million, up 70% from the $82 million areas of our business, which we were
Heckman, president and chief operat- posted in the first half of last year.
able to largely offset through volume
ing officer of ConAgra Food IngreOperating profit for the company's gains, price adjustments, better sales
dients, said that flour volumes were Retail Products segment climbed 5% and marketing, and cost-saving initiaahead of last year and market dynam- to $375.2 million on sales of $2,485.4 tives." MBN

Slowdown in low-carb demand
adds to earnings decline at Penford
CENTENNIAL, COLO. - Penford
Corp., a developer, manufacturer
and marketer of specialty naturalbased ingredient systems for various
applications, sustained a net loss of
$3,826,000 in the first quarter of fiscal
2005 ended Nov. 30. Results compared
with net income of $845,000, equal to
6c per share on the common stock,
in the first quarter of fiscal 2004.
Year-ago results included a $700,000
pre-tax, non-operating expense related to unamortized transaction fees
associated with Penford's prior credit
agreement and a $300,000 pre-tax restructuring charge in the Australian
business segment.
Sales increased 9% in the quarter
to $72,065,000, as volume gains in the
Industrial Ingredients and Australian
businesses contributed a 6.5-percentage point increase. Strengthening of
the Australian currency contributed the
14 / Milling & Baking News, January 4, 2005

remaining 2.5-percentage point gain.
Consolidated gross margin as a per
cent of sales fell to 4.5% from 14.8% a
year ago. The decrease included a 6.9percentage point decline from costs
related to a strike at the Industrial Ingredients Cedar Rapids, Iowa, operating facility and a 1.2-percentage point
decline due to higher energy, chemical
and freight charges. Sluggish demand
for low-carbohydrate applications in
the Australian and North American
Food Ingredients business contributed another 1.2 percentage points to
the decline. The remaining difference
was attributed to additional manufacturing expenses associated with
introducing a new manufacturing
configuration at the company's wheat
processing plant in Australia.
"The strike in the Industrial business is now behind us," said Tom Malkoski, chief executive officer, Penford.

"Production is returning to pre-strike
levels and costs are beginning to normalize. The new union contract will
help bring labor expense in this business more in line with industry peers
over the next several years.
"We are also addressing higher oilrelated inputs costs through pricing
adjustments and by using more efficient processes. In addition, the new
production design at our Tamworth
(Australia) factory is scheduled to be
on-line by the end of December with
orders shipping in January." MBN

Seaboard in
75c payout
MERRIAM, KAS. - Seaboard
Corp. on Dec. 8 declared a cash
dividend of 75c per share on the
common stock, payable Dec. 31
to stockholders of record on Dec.
21. MBN

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Milling & Baking News - January 4, 2005

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