McCormick Announces Strong Third Quarter Financial Results

McCormick Announces Strong Third Quarter Financial Results

FINANCIAL TABLES:

(in millions except per share data)		Three Months Ended								Nine Months Ended
		8/31/09				8/31/08				8/31/09				8/31/08
Operating income		$	116.6			$	92.9			$	289.0			$	250.8
Impact of restructuring charges			.9				3.5				8.2				4.2
Adjusted operating income		$	117.5			$	96.4			$	297.2			$	255.0
% increase versus prior period			21.9	%							16.5	%
Net income		$	75.1			$	68.6			$	183.5			$	173.4
Impact of restructuring charges		.7		*		2.4		*		5.7		*		2.9		*
Net gain related to Lawry’s acquisition     ($7.9 pre-tax)			–				(5.5	)			–				(5.5	)
Adjusted net income		$	75.8			$	65.5			$	189.2			$	170.8
Earnings per share - diluted		$	.57			$	.52			$	1.39			$	1.32
Impact of restructuring charges			–				.02				.04				.02
Net gain related to Lawry’s acquisition			–				(.04	)			–				(.04	)
Adjusted earnings per share – diluted		$	.57			$	.50			$	1.43			$	1.30
% increase versus prior period			14.0	%							10.0	%
* The impact of restructuring activity on net income includes:
Restructuring charges included in cost of good sold		$	–			$	(.9	)		$	–			$	(2.5	)
Restructuring charges			(.9	)			(2.6	)			(8.2	)			(1.7	)
Tax impact included in income taxes			.2				1.1				2.5				1.3
		$	(.7	)		$	(2.4	)		$	(5.7	)		$	(2.9	)
										Twelve Months Ended
														11/30/08
Earnings per share – diluted														$	1.94
Impact of restructuring charges															.09
Impact of impairment charge															.15
Net gain related to Lawry’s acquisition															(.04	)
Adjusted earnings per share – diluted														$	2.14

Live Webcast
As previously announced, McCormick will hold a conference call with analysts today at 8:00 a.m. ET. The conference call will be webcast live via the McCormick web site. Go to ir.mccormick.com and follow directions to listen to the call and access the accompanying presentation materials. At this same location, a replay of the call will be available following the live call. Past press releases and additional information can be found at this address.
Forward-looking Information
Certain information contained in this release, including expected trends in net sales and earnings performance, are “forward-looking statements” within the meaning of Section 21E of the Securities Exchange Act of 1934. Forward-looking statements are based on management’s current views and assumptions and involve risks and uncertainties that could significantly affect expected results. Results may be materially affected by external factors such as damage to our reputation or brand name, business interruptions due to natural disasters or similar unexpected events, actions of competitors, customer relationships and financial condition, the ability to achieve expected cost savings and margin improvements, the successful acquisition and integration of new businesses, fluctuations in the cost and availability of raw and packaging materials, and global economic conditions generally which would include the availability of financing, interest and inflation rates as well as foreign currency fluctuations and other risks described in the Company’s filings with the Securities and Exchange Commission. Actual results could differ materially from those projected in the forward-looking statements. The Company undertakes no obligation to update or revise publicly, any forward-looking statements, whether as a result of new information, future events or otherwise.
About McCormick
McCormick & Company, Incorporated is a global leader in the manufacture, marketing and distribution of spices, seasonings, specialty foods and flavors to the entire food industry – retail outlets, food manufacturers and food service businesses.

Third Quarter Report		McCormick & Company, Incorporated
Consolidated Income Statement (Unaudited)
(In millions except per-share data)
		Three Months Ended									Nine Months Ended
		August 31, 2009				August 31, 2008					August 31, 2009				August 31, 2008
Net sales		$	791.7			$	781.6				$	2,267.5			$	2,269.7
Cost of goods sold			472.7				473.2					1,362.0				1,377.6
Gross profit			319.0				308.4					905.5				892.1
Gross profit margin			40.3	%			39.5	%				39.9	%			39.3	%
Selling, general and administrative expense			201.5				212.9					608.3				639.6
Restructuring charges			0.9				2.6					8.2				1.7
Operating income			116.6				92.9					289.0				250.8
Interest expense			12.8				12.8					40.2				40.3
Other income, net			(0.3	)			(10.0	)				(1.8	)			(16.4	)
Income from consolidated operations before income taxes			104.1				90.1					250.6				226.9
Income taxes			32.1				26.8					77.2				68.5
Net income from consolidated operations			72.0				63.3					173.4				158.4
Income from unconsolidated operations			3.1				5.3					10.1				15.0
Net income		$	75.1			$	68.6				$	183.5			$	173.4
Earnings per common share - basic		$	0.57			$	0.53				$	1.40			$	1.35
Earnings per common share - diluted		$	0.57			$	0.52				$	1.39			$	1.32
Average shares outstanding - basic			130.9				129.3					130.6				128.7
Average shares outstanding - diluted			132.4				132.3					132.1				131.6

Third Quarter Report			McCormick & Company, Incorporated
Consolidated Balance Sheet (Unaudited)
(In millions)
				August 31, 2009				August 31, 2008
Assets
Current assets
Cash and cash equivalents				$	27.9			$	30.3
Trade accounts receivables, net					328.6				388.3
Inventories					447.4				462.3
Prepaid expenses and other current assets					116.5				99.1
Total current assets					920.4				980.0
Property, plant and equipment, net					472.7				476.6
Goodwill, net					1,450.2				1,328.3
Intangible assets, net					235.7				419.7
Prepaid allowances					36.5				42.0
Investments and other assets					190.9				183.7
Total assets				$	3,306.4			$	3,430.3
Liabilities and shareholders' equity
Current liabilities
Short-term borrowings and current portion of long-term debt				$	288.6			$	473.5
Trade accounts payable					238.5				249.2
Other accrued liabilities					327.2				334.4
Total current liabilities					854.3				1,057.1
Long-term debt					870.9				878.2
Other long-term liabilities					249.5				279.8
Total liabilities					1,974.7				2,215.1
Shareholders' equity
Common stock					608.2				578.1
Retained earnings					542.3				403.3
Accumulated other comprehensive income					181.2				233.8
Total shareholders' equity					1,331.7				1,215.2
Total liabilities and shareholders' equity				$	3,306.4			$	3,430.3

Third Quarter Report		McCormick & Company, Incorporated
Consolidated Statement of Cash Flows (Unaudited)
(In millions)
			Nine Months Ended
			August 31, 2009				August 31, 2008
Cash flows from operating activities
Net income			$	183.5			$	173.4
Adjustments to reconcile net income to net cash flow from operating activities:
Depreciation and amortization				69.6				64.6
Losses/(Gains) on asset sales				0.2				(21.3	)
Stock based compensation				10.5				15.0
Income from unconsolidated operations				(10.1	)			(15.0	)
Changes in operating assets and liabilities				(68.3	)			(112.8	)
Dividends from unconsolidated affiliates				9.7				11.4
Net cash flow from operating activities				195.1				115.3
Cash flows from investing activities
Capital expenditures				(53.8	)			(56.7	)
Acquisitions of businesses				-				(696.8	)
Net proceeds from sale of Season-All				-				14.0
Proceeds from sale of property, plant and equipment				0.5				14.8
Net cash flow used in investing activities				(53.3	)			(724.7	)
Cash flows from financing activities
Short-term borrowings, net				(29.2	)			524.4
Long-term debt borrowings				-				255.0
Long-term debt repayments				(50.2	)			(150.3	)
Proceeds from exercised stock options				13.7				47.6
Common stock acquired by purchase				-				(9.3	)
Dividends paid				(94.0	)			(85.5	)
Net cash flow (used)/provided by financing activities				(159.7	)			581.9
Effect of exchange rate changes on cash and cash equivalents				6.9				11.9
Decrease in cash and cash equivalents				(11.0	)			(15.6	)
Cash and cash equivalents at beginning of period				38.9				45.9
Cash and cash equivalents at end of period			$	27.9			$	30.3

Source: McCormick & Company, Incorporated
McCormick & Company, Inc.
Corporate Communications:
John McCormick, 410-771-7110
john_mccormick@mccormick.com
or
Investor Relations:
Joyce Brooks, 410-771-7244
joyce_brooks@mccormick.com