Pinnacle profit plunges 47% in second quarter

by Eric Schroeder
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MOUNTAIN LAKES, N.J. — Net income at Pinnacle Foods Finance L.L.C. fell 47% to $7,581,000 in the second quarter of fiscal 2011 ended June 26, down from $14,174,000 in the same period a year ago. Earnings before interest and taxes (EBIT) also was lower, falling 17% to $54,945,000 during the second quarter.

Net sales rose 5% to $602,024,000 from $576,080,000. Pinnacle said net sales in its North American retail businesses increased 7%, excluding the impact of the exited Birds Eye Steamfresh meals and U.S. Swanson meals businesses.

“We experienced strong growth in Birds Eye Steamfresh vegetables, Birds Eye Voila! complete bagged meals, Duncan Hines baking mixes and frostings, as well as Van de Kamp’s and Mrs. Paul’s frozen seafood,” Pinnacle said.

In the Duncan Hines Grocery division, EBIT was $32,517,000, down 8% from $35,185,000 in the same period a year ago. Net sales rose 3% to $251,187,000 from $244,425,000.

In the Specialty Foods division, EBIT was $6,409,000, down 14% from $7,415,000 in the same period a year ago. Net sales fell 4% to $96,692,000 from $101,008,000.

On April 15, Pinnacle announced plans to consolidate the Birds Eye brand’s Fulton, N.Y., plant operations into the Darien, Wis., and Waseca, Minn., facilities in order to locate vegetable processing closer to the crop growing region and thus reduce the related freight costs. The Fulton facility is expected to close at the end of 2011 and will result in the termination of approximately 270 employees, Pinnacle said. The company recorded termination costs of $1,850 in the three months and six months ended June 26, 2011. In addition, the company recorded accelerated depreciation costs of $2,635 in the three months and six months ended June 26, 2011.

For the six months ended June 26, net income was $27,833,000, up 54% from $18,104,000 in the same period of fiscal 2010. Net sales were $1,208,335,000, down 2% from $1,232,516,000.

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