Pinnacle Foods Inc. (PF) Wednesday reported a sharp increase in its first-quarter profit, reflecting mainly a decline in interest expense resulted from its refinancing activities and lower overall debt levels.
The maker of branded convenience food products noted that its Initial Public Offering and refinancing of its outstanding indebtedness will benefit its financial performance beginning in the second quarter of the year.
In the first quarter, the company's net earnings climbed to $24.8 million or $0.29 per share from $9.54 million or $0.11 per share in the previous year.
On average, seven analysts polled by Thomson Reuters expected the company to earn $0.29 per share for the quarter. Analysts' estimates typically exclude special items.
On a pro forma basis, net earnings for the recent quarter totaled $39.6 million or $0.34 per share. The company has provided pro forma results assuming the IPO and refinancing occurred on the first day of fiscal 2013.
Pinnacle completed its Initial Public Offering of common stock and began trading on the NYSE under the ticker symbol PF on March 28, 2013. All of the proceeds from the IPO, which closed on April 3, 2013, were used to pay down debt.
In addition, Pinnacle refinanced all of its outstanding indebtedness in April, in a series of transactions that significantly reduced its annual cash interest expense and extended its maturity profile.
Net sales decreased 0.6 percent to $612.98 million from $616.93 million in the year-ago quarter, driven by a 10.6 percent decline in Specialty Foods segment, which offset 1.4 percent growth in North America Retail business. Analysts expected revenue of $615.17 million for the quarter.
Cost of products sold declined to $458.14 million from $481.25 million a year earlier. Interest expense was $40.66 million, lower than $49.61 million last year.
For full-year 2013, the company expects earnings per share to be in the range of $1.49 to $1.55. Analysts expect the company to report earnings per share of $1.52 for the year.
Due to the impacts that the company's IPO and 2013 refinancing will have on its interest expense and diluted profit per share beginning in the second quarter of 2013, Pinnacle Foods is providing its annual outlook for these measures for the year on a pro forma basis.
On Tuesday, Pinnacle announced its board has adopted a policy to pay a regular quarterly dividend. The company will pay an initial quarterly cash dividend of $0.18 per share, to all common stockholders of record on June 20, 2013, payable on July 10.
PF is currently trading at $24.84, up 3.33 percent, on a volume of 440 thousand shares.
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