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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): OCTOBER 23, 1998
INTERNATIONAL HOME FOODS, INC.
(Exact name of registrants as specified in their charters)
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<S> <C> <C>
DELAWARE 001-13537 13-3377322
(State or other (Commission File Number) (IRS Employer
jurisdiction of incorporation) Identification No.)
1633 LITTLETON ROAD
PARSIPPANY, NEW JERSEY 07054
(Address of principal executive offices) (Zip code)
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Registrant's telephone number, including area code: (973) 359-9920
NOT APPLICABLE
(former name and former address, if changed since last report)
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ITEM 5 OTHER EVENTS
On October 23, 1998, International Home Foods, Inc. (the "Company")
purchased 4,400,000 shares of its common stock, par value $0.01 per share, from
AHP Subsidiary Holding Corporation, a wholly-owned subsidiary of American Home
Products Corporation. In addition, the Company released its results of
operations for the period ending September 30, 1998. A copy of the related press
release is attached hereto as an exhibit.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(c) EXHIBITS.
99.1 Press Release, dated October 27, 1998.*
* Filed herewith.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrants have duly caused this report to be signed on their behalf by the
undersigned thereunto duly authorized.
INTERNATIONAL HOME FOODS, INC.
(Registrant)
/s/ N. MICHAEL DION
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N. Michael Dion
Senior Vice President
and Chief Financial Officer
Date: October 27, 1998
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INDEX TO EXHIBITS
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Exhibit
Number Description
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99.1 Press Release, dated October 27, 1998.*
* Filed herewith.
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EXHIBIT 99.1
INTERNATIONAL HOME FOODS, INC. ANNOUNCES
SIGNIFICANTLY IMPROVED THIRD QUARTER RESULTS
AND
THE REPURCHASE OF 4.4 MILLION SHARES
PARSIPPANY, NEW JERSEY, October 27, 1998 - International Home Foods, Inc. (NYSE:
IHF) today reported net income of $28.3 million, or $.33 per diluted share, for
the third quarter ended September 30, 1998, an increase of 62% and 38%,
respectively, over the comparable 1997 period. The 1998 third quarter results
exclude a previously announced restructuring charge of $118.1 million, $75.3
million after-tax, and the 1997 third quarter results exclude a non-cash stock
option compensation charge incurred during that period. Including the
restructuring charge of $118.1 million, the Company reported a net loss of $49.0
million, or $.63 per share, for the third quarter. Sales in the quarter
increased 26% to $439.7 million from $349.5 million in the comparable 1997
period. Excluding acquisitions, the Company's sales were up 1% in the quarter.
The Company also announced that it has purchased 4.4 million shares of its
common stock, par value $.01 per share, from AHP Subsidiary Holding Corporation,
a subsidiary of American Home Products Corporation. In a related matter, the
Company has withdrawn the registration statement it previously filed with the
SEC seeking to register the sale of these shares in a secondary offering. The
4.4 million shares were purchased at a price of $13.00 per share and will be
held in treasury. The purchase of the common stock was financed by the Company
with borrowings under its senior credit facilities, and the Company now has
approximately 73.1 million shares of common stock issued and outstanding. AHP
continues to own approximately 4.4 million shares and to have demand
registration rights that it may exercise in the future with respect to these
shares.
C. Dean Metropoulos, International Home Foods Chairman and Chief Executive
Officer, said: "International Home Foods continues on a solid track of building
shareholder value buy focusing on efficiencies, plant and warehouse
consolidations, new product introductions and strategic acquisitions. As new
product introductions roll out and a more focused marketing strategy is
implemented, we expect continued sales growth from both our core business and
acquisitions."
THIRD QUARTER EVENTS
ACQUISITION
The Company completed the acquisition of the Libby's(R) brand of retail and
international canned meat products and the related Trenton, Missouri
manufacturing facility on September 8, 1998 for approximately $128 million.
Libby's(R) is a leading domestic manufacturer, importer and global marketer of
canned meat products, including Vienna sausages, corned beef, salmon, hash and
chili, and the Spreadables(R) and Broadcast(R) brands. The acquisition has
already been fully integrated into International Home Foods' sales, operations
and distribution networks.
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RESTRUCTURING CHARGE OF $118 MILLION
The previously announced third quarter 1998 restructuring charge of $118.1
million includes a one-time, non-cash pretax charge of $77.5 million related to
the writedown of goodwill on two of the Company's brands, and a one-time pretax
charge of $40.6 million related to the closure of its Vacaville, California and
Clearfield, Utah facilities and the redeployment of production into the
Company's remaining operations. It is anticipated that the consolidation of the
closed facilities into the remaining operations will generate an estimated
annual cost savings of $18.0 million, which represents approximately a one-year
payback of the cash charges associated with the consolidation.
CURRENT BRAND TRENDS/DEVELOPMENTS
The below references made to market share and consumer sales reflect data for
grocery sales only (excluding mass merchandisers) as gathered by A.C. Nielsen.
Data for Chef Boyardee(R) canned pasta and PAM(R) cooking spray are for the
periods ended October 10, 1998 and data for Chef Boyardee(R) microwave and
Bumble Bee(R) tuna are for the periods ended September 26, 1998.
o Chef Boyardee(R) factory sales for the third quarter increased 4.5% over
the same period in 1997. Chef Boyardee(R) trends in the canned pasta
category are showing signs of reversing, with consumer sales improving to
down 3.1% and 1.1% in the latest twelve- and four-week periods,
respectively, versus a decrease of 5.7% year-to-date. Dollar market share
also improved in the twelve- and four-week periods to 56.3% and 56.9%,
respectively, an increase of 0.4 and 3.6 share points over the comparable
1997 periods. Consumer sales of the Company's Chef Boyardee(R) microwave
products were also strong, increasing 6.6% and 4.4% for the twelve- and
four-week periods versus the comparable 1997 period.
In September 1998, the Company introduced Chef Boyardee(R) Overstuffed
Ravioli with a unique, hearty tomato and meat sauce recipe and almost twice
as much filling as its regular ravioli.
o Factory sales for PAM(R) were down 5.7% in the quarter versus the
comparable 1997 period; however, consumer sales of PAM(R) cooking spray
have shown recent improvement, increasing 1.5% and 13.1% in the latest
twelve- and four-week periods. Dollar market share increased to 51.0% in
the latest four-week period from 48.8% year-to-date.
The Company launched two new PAM(R) flavored cooking sprays, lemon and
garlic, in August 1998 and initial consumer response has been favorable.
o Bumble Bee(R) factory sales for the quarter ended September 30, 1998
increased 4.8% from the comparable 1997 quarter. Consumer trends remain in
line with factory sales, up 6.2% and 5.4%, in the latest twelve- and
four-week periods, respectively, versus the comparable 1997 period. The
Company continues to be the leading brand in the white tuna segment with a
38.3% shares for the twelve-week period.
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International Home Foods, Inc. is a nationally prominent manufacturer,
distributor and marketer of food products. Its significant established brands
include Chef Boyardee(R) prepared foods, Bumble Bee(R) and Orleans(R) canned
seafood, PAM(R) cooking spray, Libby's(R) canned meats, Polander(R) fruit
spreads and spices, Guiden's(R) mustard, Crunch `n Munch(R) glazed popcorn,
Campfire(R) marshmallows and crisped rice bars, Ro*tel(R) tomatoes with green
chilies, Dennison's(R) chili, Ranch Style(R) and Luck's(R) beans.
Information Concerning Forward-Looking Statements
This press release contains forward-looking statements as defined by the Private
Securities Litigation Reform Act of 1996, which are inherently subject to
various risks and uncertainties. The forward looking statements include, without
limitation, the effects of new products and marketing strategies intended to
grow sales and anticipated cost savings from the consolidation of closed
facilities. There are many risks associated with these forward looking
statements. In particular, in addition to other risks, the Company's ability to
successfully implement these and other business strategies is subject to adverse
changes in general economic conditions, changing consumer preferences based on
nutrition, health and other concerns, the availability and cost of raw materials
used in the Company's products, competition and other brands and other food
product categories, and the effects of evolving health, safety, environmental
and other governmental regulation. These risks and uncertainties, as well as
other related to the Company, are set forth in greater detail in the Company's
Annual Report on Form 10-K and Quarterly Reports on Forms 10-Q filed with the
Securities and Exchange Commission.
For further information, contact Lynne Misericordia, IHF Treasurer, at (973)
359-3195 or Mark Semer, Kekst and Company, (212) 521-4802.
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INTERNATIONAL HOME FOODS, INC.
(DOLLARS IN MILLIONS EXCEPT PER SHARE AND SHARE DATA)
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THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
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1998 1997 1998 1997
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Net sales $ 439.7 $ 349.5 $ 1,230.7 $ 843.9
Cost of sales 231.2 182.1 642.5 412.9
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Gross profit 208.5 167.4 588.2 431.0
Operating expenses 140.8 113.1 406.8 298.3
Restructuring charges 118.1 -- 118.1 --
Stock option compensation expense 0.3 44.8 0.9 44.8
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(Loss)/Income from operations (50.7) 9.5 62.4 87.9
Interest expense 24.2 27.5 70.8 79.2
Interest income and other, net 0.6 (0.2) 0.3 (1.6)
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(Loss)/income before income taxes (75.5) (17.8) (8.7) 10.3
(Benefit)/provision for income taxes (26.5) (7.0) (0.1) 4.2
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Net (loss)/income $ (49.0) $ (10.8) $ (8.6) $ 6.1
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(Loss)/income per share $ (0.63) $ (0.17) $ (0.11) $ 0.10
Weighted average basic shares outstanding 77,449,186 61,922,990 77,351,764 61,922,990
(Loss)/income per share * * * $ 0.10
Weighted average diluted shares outstanding * * * 63,347,912
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*Amounts are antidilutive
