TreeHouse profit climbs 42% in quarter

by Eric Schroeder
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WESTCHESTER, ILL. — Pricing and cost containment programs began to yield benefits at TreeHouse Foods, Inc. in the second quarter ended June 30. Net income in the quarter totaled $9,362,000, equal to 30c per share on the common stock, up 42% from $6,594,000, or 21c per share, in the same period last year.

Net sales for the quarter totaled $256,031,000, up 10% from $232,118,000 in the second quarter of 2006. The gain reflected growth from the company’s acquisition of its SIF (Soup and Infant Feeding) business in April 2006, as well as the acquisition of San Antonio Farms and DeGraffenreid, L.L.C. in the second quarter of fiscal 2007.

Pickle segment net sales fell 4% in the quarter to $94,296,000. Although the company received a boost from the acquisition of DeGraffenreid, it was not enough to overcome continued softness in both food service and retail channels, TreeHouse said.

Powder segment net sales rose 8% to $65,642,000 due to higher selling prices and increased sales volumes.

SIF had sales of $61,279,000, up 44% from the same period a year ago.

"Second-quarter results finished at the high end of our expectations as we began to see the results of our pricing and cost containment programs," said Sam K. Reed, chairman and chief executive officer. "We showed good progress in margin improvement and expect that quarter-over-quarter progress will continue over the balance of the year despite the ongoing pressures of our key input costs."

TreeHouse said its proposed acquisition of E.D. Smith Income Fund is set to close early in the fourth quarter. E.D. Smith was forced to postpone voting on the acquisition until Sept. 27, giving the company additional time to resolve certain tax matters.

Mr. Reed said TreeHouse expects third-quarter earnings to be in the range of 29c to 32c per share, and reaffirmed the company’s full-year guidance of $1.29 to $1.34.

For the six months ended June 30, net income totaled $16,776,000, up 20% from $13,993,000 in the same period of fiscal 2006. Net sales were $515,015,000, up sharply from $404,842,000.

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