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Exhibit 99.1
FOR IMMEDIATE RELEASE
MCCORMICK REPORTS RECORD PROFIT AND SALES FOR FISCAL 2000
SPARKS, MD, JAN. 18 - - - McCormick & Company, Incorporated (NYSE:MKC),
today reported record sales and earnings per share for the fourth quarter and
fiscal 2000.
Earnings per share for the year ended November 30, 2000 were $1.98
compared to $1.43 for 1999. Excluding special charges and an accounting change,
earnings per share increased 18% to $1.99 from $1.69. Sales for fiscal year 2000
increased 6% to $2.1 billion. Excluding foreign exchange and the August 31
acquisition of Ducros, sales increased 4%. Each of the Company's three business
segments - consumer, industrial and packaging - contributed to this sales
growth. Gross profit margin ended the year at 37.9% versus 35.7% in 1999. This
was accomplished with stronger sales growth in the consumer business which has a
higher margin, cost reduction efforts across all business segments, the shift to
more value-added, higher margin products within the industrial business and the
addition of the Ducros business. McCormick's unconsolidated businesses grew
sales 15% and contributed income of $18.2 million, an increase of 36% versus
1999.
Fourth quarter earnings per share were 84CENTS and 76CENTS for 2000
and 1999, respectively. Excluding special charges, earnings per share for the
quarter increased 9% to 84CENTS compared to 77CENTS for the prior year. Sales
for the quarter grew 10% over 1999 to $680 million. Excluding Ducros and
foreign exchange, sales grew 2%. Gross profit margin for the quarter
increased to 43.8% from 40.3% in 1999.
Free cash flow (operating cash flows less dividend payments and capital
expenditures) was $96 million for fiscal year 2000. This is on target with our
long-term goal of $75-100 million per year.
Consumer Business
Sales for McCormick's consumer business rose 21% over last year's
fourth quarter. Excluding Ducros and foreign exchange, sales grew 5%. In local
currency, consumer sales were up 6% in the Americas, unchanged in Europe
(excluding Ducros) and up 9% in Asia. The sales gains were volume-driven and
resulted from effective marketing programs and new products. Operating income
for the quarter increased 18% to $80.9 million. As a percent of sales, operating
income decreased to 20.7% from 21.4% which reflects the anticipated impact of
Ducros.
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Industrial Business
Industrial sales declined 4% versus last year's quarter. Excluding
foreign exchange, the decline was 1%. In local currency, industrial sales
declined 3% in the Americas, grew 2% in Europe and grew 14% in Asia. In the
Americas, the sales weakness occurred as a result of continued slowness in sales
to restaurant customers as well as price reductions taken in the ingredient
business to match lower commodity costs. The increase in the industrial business
in Europe is an improvement over the performance of earlier quarters in fiscal
2000. Operating income for the quarter declined 3% to $18.5 million versus last
year. As a percent of net sales, operating income was unchanged at 7.6% for the
quarter.
Packaging Business
The packaging business reported third party sales up 1% for the quarter
over last year, with the increase primarily in our tube business. Operating
income (including intersegment business) was $5.5 million, an increase of 6%. As
a percent of total sales, operating income (including intersegment business)
increased to 9.7% from 9.6%.
Chairman's Comments
Commented Robert J. Lawless, Chairman, President & CEO, "We are pleased
with our financial performance for 2000. Sales growth initiatives and
improvements in operations contributed to a successful year. The Company's
branded products continue to benefit from well-executed strategies in markets
worldwide. Sales in our industrial business fell short of expectations - volume
gains with food service customers and food processors were offset by sales
softness with our restaurant customers. However, the industrial segment
continues to improve margins with sales of more value-added products. Our
packaging business had good sales growth and achieved operating profit growth
despite an increase in resin costs.
"A landmark event for McCormick in 2000 was the acquisition of
Ducros, the leading spice business in Europe. The integration of this
business is proceeding smoothly and in accordance with our business plan. Our
estimate for dilution in 2001 earnings remains 10CENTS per share. We expect
that most of the dilution to be recorded in the first and second quarters of
fiscal 2001. As a result, we expect that most of our earnings per share
growth for 2001 will occur in the second half of the year.
"In November of 2000, we launched Beyond 2000 (B2K), a global
initiative of business process improvement enabled by state-of-the-art
information technology. We expect a return on this investment through more
efficient processes throughout our organization. We will improve asset
management, integrate communications with customers and expand eBusiness
opportunities. Our total capital expenditures in 2001 will be in a range of
$85-95 million. In 2001, capital expenditures together with higher interest from
the Ducros acquisition will cause our annual free cash flow to be below our
long-term target of $75-100 million. We will be back on track with this target
in 2002. We are confident that the returns from B2K will provide funding for
future sales initiatives and profit improvement.
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"As we begin 2001, we are pleased that food stocks have gained some
interest among investors and that our shareholders are benefiting from a better
stock price for McCormick. Our commitment is to continue to deliver financial
results that are among the best in the industry. One of our long-term goals is
to increase sales 4-6%. In 2001, with a full year of the Ducros business, our
sales growth goal is 12-14%. We expect gross profit margin to reach 40% in 2001
and grow to 42% for fiscal year 2003. We also have a long-term objective to grow
earnings per share 10-12%. Including dilution from the Ducros acquisition, we
expect to increase earnings per share in 2001 by 8-10%.
"We thank our employees for their accomplishments in 2000 and
commitment to a successful future. I am confident that McCormick has the right
strategies and team in place to maintain our momentum, achieve aggressive goals
and build shareholder value in 2001 and beyond."
Forward-Looking Statement
Certain information contained in this release, including expected
trends in net sales and earnings performance, are "forward-looking statements"
within the meaning of Section 21E of the Securities and Exchange Act of 1934.
Forward-looking statements are based on management's current views and
assumptions and involve risks and uncertainties that could be materially
affected by external factors such as: actions of competitors, customer
relationships, fluctuations in the cost and availability of supply chain
resources and foreign economic conditions, including currency rate fluctuations.
The Company undertakes no obligation to update or revise publicly any
forward-looking statements, whether as a result of new information, future
events or otherwise.
About McCormick
McCormick & Co., Inc. is the global leader in the manufacture,
marketing and distribution of spices, seasonings and flavors to the entire food
industry - to foodservice and food processing businesses as well as to retail
outlets. In addition, the packaging group manufactures and markets specialty
plastic bottles and tubes for personal care and other industries.
# # #
For information:
410-771-7310
1/2001
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McCormick & Company, Incorporated
FOURTH QUARTER REPORT
CONSOLIDATED INCOME STATEMENT
(In thousands except per-share data)
<TABLE>
<CAPTION>
THREE MONTHS ENDED YEAR ENDED
--------------------------- -------------------------
(Unaudited) (Unaudited)
11/30/2000 11/30/1999 11/30/2000 11/30/1999
------------ ----------- ---------- ----------
<S> <C> <C> <C> <C>
NET SALES
Consumer $390,639 $322,123 $996,944 $898,487
Industrial 243,065 252,949 948,229 938,751
Packaging 45,827 45,363 178,351 169,679
------------ ----------- ---------- ----------
Total Net sales 679,531 620,435 2,123,524 2,006,917
Cost of goods sold 381,888 370,535 1,318,712 1,289,714
------------ ----------- ---------- ----------
Gross profit 297,643 249,900 804,812 717,203
Gross profit margin 43.8% 40.3% 37.9% 35.7%
Selling, general & administrative expense 200,658 166,495 578,696 521,346
Special charges 45 310 1,068 25,714
------------ ----------- ---------- ----------
Operating income 96,940 83,095 225,048 170,143
Interest expense 14,928 7,912 39,736 32,431
Other income 810 1,490 685 4,647
------------ ----------- ---------- ----------
Income before income taxes 82,822 76,673 185,997 142,359
Income taxes 29,861 27,734 66,649 57,210
------------ ----------- ---------- ----------
Net income from consolidated operations 52,961 48,939 119,348 85,149
Income from unconsolidated operations 4,686 5,040 18,183 13,357
------------ ----------- ---------- ----------
Net Income before cumulative effect of acctg change 57,647 53,979 137,531 98,506
Cumulative effect of accounting change - net of taxes - - - 4,800
------------ ----------- ---------- ----------
NET INCOME $57,647 $53,979 $137,531 $103,306
============ =========== ========== ==========
EARNINGS PER SHARE - BASIC
Continuing operations 0.84 0.76 2.00 1.38
Cumulative effect of an accounting change - - - 0.07
TOTAL EARNINGS PER SHARE - BASIC 0.84 0.76 2.00 1.45
============ =========== ========== ==========
Average shares outstanding - basic 68,438 70,729 68,799 71,449
EARNINGS PER SHARE - ASSUMING DILUTION
Continuing operations $0.84 $0.76 $1.98 $1.36
Cumulative effect of an accounting change - - - 0.07
TOTAL EARNINGS PER SHARE - ASSUMING DILUTION $0.84 $0.76 $1.98 $1.43
============ =========== ========== ==========
Average shares outstanding - assuming dilution 69,023 71,350 69,580 71,999
</TABLE>
Note: The Company has reclassified the effect of an accounting change related to
pension expense in 1999 from special charges to cumulative effect of accounting
change - net of taxes. In addition, the Company reclassified royalty income and
amortization of goodwill from other income to selling, general & administrative
expense. All prior year amounts have been reclassified to conform to the current
year presentation. The net amounts of royalty income and amortization of
goodwill were $(737) and $780 for the fourth quarter of 2000 and 1999,
respectively and $2,441 and $971 for the fiscal year of 2000 and 1999,
respectively. For the amount of the reclassifications of these items for prior
quarters, see the Company's form 8-K filed in January, 2001.
CONDENSED CONSOLIDATED BALANCE SHEET
(In thousands)
<TABLE>
<CAPTION>
11/30/2000 11/30/1999
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<S> <C> <C>
ASSETS
Receivables $303,340 $213,926
Inventories 274,039 234,171
Prepaid allowances 96,072 109,253
Property, plant and equipment, net 372,999 363,251
Other assets 613,489 268,178
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Total assets $1,659,939 $1,188,779
=================== ================
LIABILITIES AND SHAREHOLDERS' EQUITY
Short-term borrowings $551,960 $100,671
Other current liabilities 475,196 369,961
Long-term debt 160,192 241,432
Other liabilities 113,248 94,293
Shareholders' equity 359,343 382,422
------------------- ----------------
Total liabilities and shareholders' equity $1,659,939 $1,188,779
=================== ================
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