Sturm Foods acquisition benefits TreeHouse earnings

by Eric Schroeder
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WESTCHESTER, ILL. — Strong performance from the North American Retail Grocery business, coupled with the benefit of the Sturm Foods acquisition, helped drive a 28% increase in first-quarter income for TreeHouse Foods, Inc.

For the quarter ended March 31, the company had net income of $16,319,000, equal to 49c per share on the common stock, up from $12,732,000, or 40c per share, during the same quarter of the previous year. Sales for the quarter were $397,124,000, up 12% from $355,396,000 during the same quarter of the previous year.

“We believe our strong first-quarter results are not only reflective of the overall strength of the private label market, but also support our belief that private label will continue to grow twice as fast as brands, as it has for the last two decades,” said Sam Reed, chairman and chief executive officer. “Additionally, we are very pleased to have closed the large and strategic Sturm Foods acquisition, while at the same time maintaining a high degree of focus on our core operating performance. We delivered excellent volume growth in all three of our operating segments and continued our focus on supply chain efficiencies, both of which boosted our earnings considerably over last year.”

The North American Retail Grocery segment had direct operating income of $42,122,000, up 23% from $34,305,000 during the same quarter of the previous year. Sales for the quarter were $261,800,000, up 13% from $230,682,000.

The Food Away From Home segment had direct operating income of $9,461,000, up 35% from $7,006,000 during the same quarter of the previous year. Sales for the segment were $73,427,000, up 10% from $66,753,000.

“We are off to a great start to the year and are encouraged by the opportunities that Sturm Foods presents to us as we look to expand the distribution of powdered soft drinks and hot cereal,” Mr. Reed said. “We are seeing that input costs are slowly starting to rise, but believe that those increases will be manageable this year. Given the strength we are seeing across the board in our operating segments, we are raising our previously issued guidance of $2.62 to $2.66 in adjusted earnings per share for 2010 to $2.65 to $2.70.”
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