Acquisition boosts TreeHouse Foods earnings
August 5, 2010
by Eric Schroeder
WESTCHESTER, ILL. — The acquisition of Sturm Foods in March 2010 bolstered TreeHouse Foods, Inc.’s results for the second quarter of fiscal 2010. Net income for the quarter ended June 30 was $21,652,000, equal to 62c per share on the common stock, up 18% from $18,425,000, or 58c per share, in the second quarter of fiscal 2009.
Sales for the most recent quarter were $446,195,000, up 20% from $372,605,000 during 2009.
“Our legacy businesses posted solid operating performance in the quarter, and we are very pleased with the addition of Sturm Foods,” said Sam K. Reed, chairman and chief executive officer. “Our relentless focus on attacking the center of the P&L is paying off as we continued to improve productivity and achieved purchasing savings, driving year over year gross margin improvement of 240 basis points.”
The acquisition of Sturm Foods, a manufacturer of hot cereals and beverage mixes, had a direct impact on TreeHouse Foods’ North American Retail Grocery business unit, which saw its sales increase 30% to $307.5 million during the quarter. Operating income rose 45% to $52,218,000.
For the first six months of fiscal 2010 TreeHouse Foods’ net income was $37,971,000, or $1.10 per share, up 22% from $31,157,000, or 99c per share, during the first half of 2009. Sales for the first half of the year were $843,319,000, up 16% from $728,001,000 during 2009.
“We delivered excellent results in the first half, particularly given the challenging dynamics of the current retail environment,” Mr. Reed said. “Our success is directly related to consumers’ continued desire to find value through the right combination of price and quality. Private label continues to be a cornerstone of retailers’ strategy to be innovative and responsive within a highly competitive marketplace.
“Although industry volumes have been challenged of late, we believe we are positioned to continue to outperform market trends, and are therefore raising our full year 2010 guidance from $2.65 to $2.70 in adjusted earnings per share, to $2.70 to $2.75.”