CHICAGO, July 28 /PRNewswire-FirstCall/ -- The Wm. Wrigley Jr.
Company (NYSE:WWY) today announced a 14 percent gain in second
quarter sales versus a year ago to a record $1.57 billion, the
Company's highest sales quarter ever. The sales increase primarily
reflected the positive impact of currency translation and pricing,
in combination with one percent growth in worldwide shipments. Net
earnings for the quarter of $0.70 per diluted share were up 15
percent or $0.09 from the year ago period. On a non-GAAP basis,
excluding the one-time charges related to the proposed merger with
Mars, Incorporated ($0.04) and the negative impact of the supply
chain restructuring program on the year-ago results ($0.01), second
quarter earnings per share were up 19 percent from the same quarter
last year -- $0.74 versus $0.62.* "All major regions contributed to
our sales gain in the quarter, and we are looking to build on that
going forward as we continue to ramp up our investment in brand
support and roll out innovative new products and packaging to the
marketplace. Growth in the gum category was solid, with Wrigley
gaining share in key geographies, including the U.S., Russia and
China," said President and Chief Executive Officer Bill Perez. "At
the same time, we are maintaining our focus on operational
efficiency, leading to improved financial metrics despite
inflationary pressure, with only modest growth in operating
expenses and continued improvement in gross margins." Bill Wrigley,
Executive Chairman and Chairman of the Board added, "Despite
increased competition and relatively tougher economic conditions,
we continue to produce strong near-term results, which is testimony
to the strength of both our team and our brands. More importantly,
we are doing so while continuing to lay the groundwork for the
long-term, generational growth of our business, with significant
innovation and marketing investments in key geographies around the
world." * Please see Attachment B for full GAAP to non-GAAP
reconciliation. Sales and Gross Margins Second quarter sales
increased by $194 million, or 14 percent, over the same quarter
last year. Somewhat more than half of the sales gain reflects the
positive impact of currency, due to translation of international
sales into a relatively weaker U.S. dollar. The balance of the
increase is primarily due to improved price/mix, mainly in the U.S.
and Europe, with a small contribution from increased shipments,
principally in Asia/Pacific. In EMEAI (principally Europe), sales
were $783 million, up $111 million or 17 percent versus a year ago,
with just under three-quarters of the gain attributable to
favorable currency translation. Selected pricing actions,
principally in Eastern Europe, accounted for most of the remaining
sales gain, with a one percent overall increase in volume. Russia
and Ukraine continued to lead the growth in the region with strong
double-digit sales gains. Despite tough year-ago comparisons,
Poland and Germany recorded solid gains, moderated by less vigorous
results in Spain. In the U.K., Wrigley's share trends continued to
be positive through the first half of 2008, although the overall
category has softened relative to the high level of marketplace
activity a year ago. Sales increased nearly $59 million or 25
percent in Asia/Pacific to $290 million, with about half the gain
due to volume growth and the other half due to the positive impact
of currency translation. China continued to drive the region's
growth, with strong double-digit shipment and sales growth across
its diverse product portfolio. Similar shipments and sales
increases across the countries of South Asia -- including Vietnam,
Indonesia, Malaysia and Thailand -- solidified the region's
results. North America net sales were up five percent to $474
million, although volume was off about five percent, reflecting the
impact of pricing changes that began during the last part of the
year-ago quarter. In the U.S., gum sales and share trends in the
quarter were positive, driven by the continued success of 5(TM).
The summer launches of Extra(R) Fruit Sensations(TM) and Wrigley's
new Slim Pack(TM) are on track and provided a limited boost to
sales in the current quarter, but their impact is expected to be
more pronounced in the second half of the year. Through the first
six months of the year, worldwide sales grew by 15 percent, with
somewhat more than half the gain attributable to the positive
impact of currency translation. The remaining increase primarily
reflects improved price/mix, with a one percent contribution from
volume growth. Year-to-date regional sales gains for Asia/Pacific,
EMEAI and North America were 25 percent, 18 percent and five
percent, respectively. Consolidated gross margins for the second
quarter, excluding restructuring, were 54.9 percent versus 53.2
percent in the same quarter last year. The 170 basis-point
improvement was driven largely by higher pricing, with a modest
overall increase in costs being offset by other efficiencies.
Year-to-date consolidated gross margins, excluding restructuring,
improved by 100 basis points -- 54.0 percent versus 53.0 percent a
year ago, also attributable to favorable pricing, partially offset
by slight cost increases. Operating Profits and Net Earnings
Consolidated operating profits in the quarter were $298 million, up
13 percent from the same period in the prior year. The growth was
primarily driven by improved price/mix and the benefit of currency
translation, offset by additional investment in brand support,
which climbed by 29 percent in the quarter and is expected to
continue at a strong pace for the balance of the year. On a
non-GAAP basis, excluding the $17 million in one-time charges
related to the proposed merger with Mars, and the negative impact
of $4 million in year-ago restructuring charges, second quarter
operating profits were up 18 percent versus the same period in
2007. Consolidated net earnings of $194 million were up 14 percent
or $24 million from the second quarter of 2007. On a diluted per
share basis, earnings were $0.70, up 15 percent or $0.09 versus the
prior year. On a non-GAAP basis, excluding the impact of merger
expenses and year-ago restructuring charges, earnings per share
increased 19 percent or $0.12 versus the year-ago quarter, with
about $0.08 due to the positive impact of currency translation. For
the first six months of 2008, operating profits climbed by 20
percent, even with a 24 percent increase in brand support. About
two-thirds of the gain resulted from the positive impact of
currency translation and most of the remainder came from higher
pricing and a small increase in volume. Year-to-date diluted
earnings per share of $1.31 were up 16 percent or $0.18 from the
first six months of 2007. On a non-GAAP basis, excluding one-time
charges related to the proposed merger, as well as restructuring
costs and the one-time asset sale gain from the first half of 2007,
earnings per share of $1.36 increased 21 percent or $0.24 from the
same period a year ago, including a $0.15 benefit from currency
translation. About Wrigley The Wm. Wrigley Jr. Company is a
recognized leader in confections with a wide range of product
offerings including gum, mints, hard and chewy candies, lollipops,
and chocolate. The Company has global sales of $5.4 billion and
distributes its world-famous brands in more than 180 countries.
Three of these brands -- Wrigley's Spearmint(R), Juicy Fruit(R),
and Altoids(R) -- have heritages stretching back more than a
century. Other well-loved brands include Doublemint(R), Life
Savers(R), Big Red(R), Boomer(R), Pim Pom(R), Winterfresh(R),
Extra(R), Freedent(R), Hubba Bubba(R), Orbit(R), Excel(R), Creme
Savers(R), Eclipse(R), Airwaves(R), Solano(R), Sugus(R), P.K.(R),
Cool Air(R) and 5(TM). Additional Information and Where to Find It
In connection with the above-described transactions, the Company
will file with the U.S. Securities and Exchange Commission a
preliminary proxy statement and a definitive proxy statement. The
proxy statement will be sent to the Company's stockholders, who are
urged to read the proxy statement and other relevant materials when
they become available, because they will contain important
information about the above-described transactions. Wrigley
investors and security holders may obtain free copies of these
documents (when they are available) and other documents filed with
the SEC at its web site at http://www.sec.gov/. In addition,
investors and security holders may obtain free copies of the
documents filed with the SEC by the Company by going to the
Company's Investors page on its corporate website at
http://www.wrigley.com/ or by directing a request to Wm. Wrigley
Jr. Company, 410 North Michigan Avenue, Chicago, Illinois 60611 -
Attention: Investor Relations. The Company and its directors and
executive officers may be deemed to be participants in the
solicitation of proxies from the stockholders of the Company in
connection with the above-described transactions. Information about
the Company and its directors and officers can be found in the
Company's Proxy Statements and Annual Reports on Form 10-K filed
with the SEC, as well as on the Company's Investors page on its
corporate website at http://www.wrigley.com/. Additional
information regarding the interests of those persons may be
obtained by reading the proxy statement when it becomes available.
Cautionary Statement Regarding Forward-Looking Information This
press release contains statements which may be considered
forward-looking statements within the meaning of the Securities
Exchange Act of 1934, including, without limitation, statements
regarding operating strategies, future plans and financial results.
Forward-looking statements may be accompanied by words such as
"anticipate", "believe", "could", "estimate", "expect", "forecast",
"intend", "may", "possible", "predict", "project" or similar words,
phrases or expressions. The Company does not undertake any
obligation to update the information contained herein, which speaks
only as of the date of this press release. A variety of factors
could cause actual results to differ materially from the
anticipated results or expectations expressed including, without
limitation, the occurrence of any event, change or circumstance
that could give rise to the termination of the merger agreement and
the possibility that the Company would be required to pay any
termination fee in connection therewith; the outcome of any legal
proceedings that may be instituted against the Company and others
following the announcement of the merger agreement; risks that the
required regulatory approvals will not be obtained in a timely
manner, if at all; inability to complete the merger due to the
failure to obtain stockholder approval or failure to satisfy the
other conditions to the completion of the merger; risks that the
proposed transaction disrupts current plans and operations; the
availability or retention of retail space; the availability of raw
materials; changes in demographics and consumer preferences;
changes in foreign currency and market conditions; increased
competition and discounting and other competitive actions;
underutilization of or inadequate manufacturing capacity and labor
stoppages; governmental regulations; and the outcome of integrating
acquired businesses. These factors, and other important factors
that could affect these outcomes are set forth in the Company's
most recently filed Annual Report on Form 10-K and the Company's
other SEC filings, in each case under the heading "Forward-Looking
Statements" and/or "Risk Factors". Such discussions regarding risk
factors and forward-looking statements are incorporated herein by
reference. ATTACHMENT A WM. WRIGLEY JR. COMPANY STATEMENT OF
CONSOLIDATED EARNINGS Amounts in thousands except for per share
values Three Months Ended Six Months Ended June 30, June 30, 2008
2007 2008 2007 Net sales $1,571,291 $1,377,780 $3,022,841
$2,631,826 Cost of sales 708,402 644,547 1,389,405 1,237,442
Restructuring charges - 4,486 - 12,635 Gross profit 862,889 728,747
1,633,436 1,381,749 Selling, general and administrative expense
564,976 465,819 1,065,951 908,617 Operating income 297,913 262,928
567,485 473,132 Interest expense (16,072) (17,123) (31,293)
(33,725) Investment income 5,393 2,537 8,782 4,427 Other income
(expense), net (2,277) 1,421 (12,077) 18,124 Earnings before income
taxes 284,957 249,763 532,897 461,958 Income taxes 91,186 79,950
170,527 149,444 Net earnings $193,771 $169,813 $362,370 $312,514
Net earnings per average share of common stock (basic)(a) $0.71
$0.62 $1.33 $1.13 Net earnings per average share of common stock
(diluted)(a) $0.70 $0.61 $1.31 $1.13 Average number of basic shares
outstanding for the period 272,010 274,961 272,612 275,490 Average
number of diluted shares outstanding for the period 275,875 277,008
275,679 277,299 (a) Per share calculations based on the average
number of shares outstanding for the period. ATTACHMENT B WM.
WRIGLEY JR. COMPANY RECONCILIATION OF GAAP TO NON-GAAP EARNINGS
Amounts in thousands except for per share values Three Months Ended
June 30, 2008 June 30, 2007 Diluted Diluted Net Earnings Net
Earnings Earnings Per Share* Earnings Per Share* Net Earnings, as
reported under U.S. GAAP $193,771 $0.70 $169,813 $0.61
Restructuring cost, net of tax (A) - - 3,050 0.01 Merger expense,
net of tax (C) 11,416 0.04 - - Non-GAAP earnings, excluding
restructuring cost and merger expense $205,187 $0.74 $172,863 $0.62
Six Months Ended June 30, 2008 June 30, 2007 Diluted Diluted Net
Earnings Net Earnings Earnings Per Share* Earnings Per Share* Net
Earnings, as reported under U.S. GAAP $362,370 $1.31 $312,514 $1.13
Restructuring cost, net of tax (A) - - 8,548 0.03 Gain on sale of
assets, net of tax (B) - - (9,415) (0.03) Merger expense, net of
tax (C) 11,416 0.04 - - Non-GAAP earnings, excluding restructuring
cost, gain on sale of assets and merger expense $373,786 $1.36
$311,647 $1.12 * May not total due to rounding (A) Management has
excluded restructuring cost as it is viewed as nonrecurring costs
incurred to improve production operations. (B) Management has
excluded the gain on the sale of certain assets as it is viewed as
nonrecurring income. (C) Management has excluded expense related to
the potential merger with Mars as it is viewed as nonrecurring.
ATTACHMENT C WM. WRIGLEY JR. COMPANY NET SALES AND OPERATING INCOME
BY SEGMENT Amounts in thousands Three Months Ended Six Months Ended
June 30, June 30, 2008 2007 2008 2007 NET SALES North America
474,475 452,110 907,666 866,097 EMEAI 782,578 671,451 1,461,666
1,237,158 Asia/Pacific 290,238 231,601 607,685 485,666 All Other
24,000 22,618 45,824 42,905 Total Net Sales 1,571,291 1,377,780
3,022,841 2,631,826 OPERATING INCOME North America 114,506 95,520
200,449 171,634 EMEAI 206,930 189,177 362,122 329,052 Asia/Pacific
79,170 63,466 175,122 137,091 All Other (102,693) (85,235)
(170,208) (164,645) Total Operating Income 297,913 262,928 567,485
473,132 ATTACHMENT D WM. WRIGLEY JR. COMPANY CONDENSED CONSOLIDATED
BALANCE SHEET Amounts in thousands June 30, December 31, 2008 2007
Assets Current assets: Cash and cash equivalents $383,351 278,843
Short-term investments, at amortized cost - 635 Accounts
receivable, net 530,142 469,221 Inventories 625,813 620,082 Other
current assets 200,201 180,997 Total current assets 1,739,507
1,549,778 Deferred charges and other assets 222,293 214,457
Goodwill 1,487,106 1,422,957 Other intangibles 493,742 484,256 Net
property, plant and equipment 1,574,778 1,560,064 Total assets
$5,517,426 5,231,512 Liabilities and Stockholders' Equity Current
liabilities: Short-term debt $130,000 - Accounts payable and
accrued expenses 903,714 871,901 Dividends payable 91,109 79,965
Income and other taxes payable 155,155 149,254 Total current
liabilities 1,279,978 1,101,120 Other noncurrent liabilities
334,022 312,912 Long term debt 1,000,000 1,000,000 Total
liabilities 2,614,000 2,414,032 Stockholders' equity 2,903,426
2,817,480 Total liabilities and stockholders' equity $5,517,426
5,231,512 ATTACHMENT E WM. WRIGLEY JR. COMPANY CONSOLIDATED
STATEMENT OF CASH FLOWS Amounts in thousands Six Months Ended June
30, 2008 2007 OPERATING ACTIVITIES Net earnings $362,370 $312,514
Adjustments to reconcile net earnings to net cash provided by
operating activities: Depreciation and amortization 116,260 101,868
Net loss (gain) on retirements of property, plant and equipment
8,450 (13,735) Non-cash share-based compensation 27,899 30,801
Deferred income taxes 6,157 1,112 (Increase) decrease in: Accounts
receivable (39,085) (22,222) Inventories 7,077 43,575 Other current
assets (30,754) (23,324) Deferred charges and other assets (9,101)
(14,386) Increase (decrease) in: Accounts payable and accrued
expenses 26,821 (8,369) Income and other taxes payable 3,875 18,083
Other noncurrent liabilities 24,081 11,333 Net cash provided by
operating activities 504,050 437,250 INVESTING ACTIVITIES Additions
to property, plant and equipment (86,206) (97,759) Proceeds from
retirements of property, plant and equipment 3,261 23,165 Proceeds
from sale of investments 635 685 Acquisition, net of cash acquired
(95,726) (293,912) Net cash used in investing activities (178,036)
(367,821) FINANCING ACTIVITIES Dividends paid (170,486) (150,371)
Common Stock purchased and issued, net (191,090) (147,905)
Issuances of short-term debt, net 130,000 266,444 Net cash (used
in) provided by financing activities (231,576) (31,832) Effect of
exchange rate changes on cash and cash equivalents 10,070 3,440 Net
increase (decrease) in cash and cash equivalents 104,508 41,037
Cash and cash equivalents at beginning of period 278,843 253,666
Cash and cash equivalents at end of period $383,351 $294,703
DATASOURCE: Wm. Wrigley Jr. Company CONTACT: Christopher Perille,
Senior Director - External Relations of Wm. Wrigley Jr. Company,
+1-312-645-4077 Web site: http://www.wrigley.com/
Copyright
Wrigley WM JR (NYSE:WWY)
Historical Stock Chart
From Sep 2024 to Oct 2024
Wrigley WM JR (NYSE:WWY)
Historical Stock Chart
From Oct 2023 to Oct 2024