EX-99.3 5 f90410exv99w3.txt EXHIBIT 99.3 . . . Exhibit 99.3 BUSINESS OVERVIEW EBITDA
LTM ($ Millions) SKF EBIT $ 257.4 SKF Depreciation and Amortization 58.8 --------- SKF EBITDA 316.2 Del Monte EBIT 117.4 Del Monte Depreciation and Amortization 31.2 --------- Del Monte EBITDA 148.6 --------- COMBINED LTM EBITDA $ 464.8 ========= Del Monte Adjustments Special charges related to plant consolidation $ 0.6 Merger-related expenses 12.4 Loss on financial instruments (0.5) Release of a contingent liability (0.7) Legal expenses related to the April 1997 recapitalization 0.7 SKF Adjustments Revisions to accruals and asset write-downs - Fourth quarter 2002 (2.4) --------- Total Adjustments 10.1 --------- COMBINED LTM EBITDA AS-ADJUSTED $ 474.9 $0.5 BILLION =========
LTM for legacy Del Monte is September 2001 through September 2002 LTM for legacy SKF Foods is October 2001 through October 2002 Depreciation and amortization expense excludes amortization of deferred debt issuance cost which is a component of interest expense. PROFIT STRUCTURE
FISCAL FISCAL EBITDA Legacy Del Monte Foods 1998 2002 CAGR -------- ----------- EBIT $ 83.5 $ 113.4 Depreciation and Amortization 28.3 30.4 -------- ----------- EBITDA 111.8 143.8 ======== =========== Contadina universal product code conversion -- 1.3 Inventory write-up 3.4 1.0 Special charges related to plant consolidation 9.6 1.3 Stock Compensation and related costs 2.9 -- Merger-related expenses -- 7.3 Expenses of acquisitions 6.9 -- Loss on financial instruments -- 5.8 Release of a contingent liability -- (0.7) Legal expenses related to the April 1997 recapitalization -- 0.7 -------- ----------- EBITDA AS-ADJUSTED LEGACY DEL MONTE $134.6 $ 160.5 4.5% ======== =========== Net Sales - 2002 1,322.4 Contadina universal product code conversion 1.3 ----------- Net Sales As-Adjusted - 2002 $1,323.7 =========== 2002 EBITDA MARGIN LEGACY DEL MONTE 12.1% ===========
FISCAL LEGACY SKF FOODS 2002 ----------- EBIT $ 261.9 Depreciation and Amortization 58.8 ----------- EBITDA 320.7 =========== Revisions to accruals and asset write-downs - Fourth quarter 2002 (2.4) Streamline implementation costs 7.9 ----------- EBITDA AS-ADJUSTED SKF FOODS - 2002 326.2 =========== EBITDA As-Adjusted Legacy Del Monte - 2002 160.5 Pro Forma adjustments - Pension/Postemployment benefits, etc (8.4) ----------- COMBINED AS-ADJUSTED EBITDA - 2002 478.3 =========== Net Sales SKF Foods - 2002 1,817.0 Net Sales As-Adjusted Legacy Del Monte - 2002 1,323.7 Adjustment to LTM April 2002 and SKF presentation 45.0 ----------- Net Sales As-Adjusted using SKF presentation - LTM April 2002 1,368.7 ----------- Combined As-Adjusted Net Sales $ 3,185.7 =========== COMBINED PRO FORMA AS-ADJUSTED EBITDA MARGIN-NEW DEL MONTE 2002 15.0%
Depreciation and amortization expense excludes amortization of deferred debt issuance cost which is a component of interest expense. DEL MONTE FOODS COMPANY COMBINED STATEMENTS OF INCOME FOR THE THREE MONTHS ENDED JANUARY 29, 2003 (IN MILLION'S)
GAAP GAAP Non-GAAP Non-GAAP 10-Q Pro Forma "As Adj" Pro Forma External Adj1 Adj "As Adjusted" --------------- ---------------- --------------- ----------------- Net sales 559.1 266.1 6.7 2 831.9 Cost of products sold 392.3 191.8 (13.5) 3 570.6 Selling, general and administrative 105.8 45.2 (10.4) 4 140.6 --------------- --------------- --------------- --------------- OPERATING INCOME 61.0 29.1 30.6 120.7 Interest expense 14.9 18.8 0.9 5 34.6 Other income/(expense) (5.0) -- 2.7 6 (2.3) --------------- --------------- --------------- --------------- Income before income taxes 41.1 10.3 32.4 83.8 Provision for income taxes 16.7 4.0 9.3 7 30.0 --------------- --------------- --------------- --------------- NET INCOME 24.4 6.3 23.1 53.8 =============== =============== =============== =============== BASIC AVERAGE SHARES 181,383,446 209,228,192 EPS $ 0.13 $ 0.26 FULLY DILUTED SHARES OUTSTANDING 181,112,972 210,240,446 EPS $ 0.13 $ 0.26 EBIT 56.0 29.1 33.3 118.4 Depreciation & Amortization 13.4 5.4 (1.0) 3 17.8 --------------- --------------- --------------- --------------- EBITDA 69.4 34.5 32.3 136.2
1 The historical GAAP consolidated statements of income include the results of operations for the Spun-Off Businesses, and the results of Del Monte Brands from the December 20, 2002 merger date. For comparability, the consolidated statements of operations include a pro forma adjustment for the results of Del Monte Brands for the entire period presented. Interest expense includes the addition of $11.2 million of pro forma expense as if the merger and related financing occurred on the first day of each fiscal year presented. 2 Net sales exclude trade promotion expenses of $6.7 million related to a change in estimate for liabilities associated with accounts receivables deductions for the Spun-Off Businesses. 3 In accordance with purchase accounting rules applied to the merger, Del Monte Brands inventory was increased to fair market value. This inventory step-up increases cost of products sold as inventory on-hand at the acquisition date is sold. These results exclude $11.0 million from inventory step-up, and $1.0 million resulting from incremental depreciation from the step-up of fixed assets to their fair market value. These results also exclude $1.5 million of Spun-Off Businesses expenses resulting from revisions to the parent company overhead rates as of the merger date. 4 SG&A excludes $4.3 million of integration expenses, $3.5 million of allocated parent company costs for the Spun-Off Businesses, and $2.6 million of incentive and retention compensation for the Spun-Off Businesses. 5 Interest expense excludes $0.9 million of interest income resulting from the amortization of a loss from interest rate swap agreements. 6 Other expense excludes a $2.6 million loss from foreign exchange related to the Company's Euro-denominated borrowings in connection with the merger financing, and a rounding adjustment of $0.1 million. 7 Income taxes are presented reflect the impact of the adjustments noted. DEL MONTE FOODS COMPANY COMBINED STATEMENTS OF INCOME FOR THE THREE MONTHS ENDED JANUARY 30, 2002 (IN MILLION'S)
GAAP GAAP Non-GAAP Non-GAAP 10-Q Pro Forma "As Adj" Pro Forma External Adj1 Adj "As Adjusted" ---------------- ---------------- ---------------- ------------------ Net sales 437.8 379.4 - 817.2 Cost of products sold 292.2 275.3 2.8 2 570.3 Selling, general and administrative 76.2 65.5 (0.7) 3 141.0 ---------------- ---------------- ---------------- ------------------ OPERATING INCOME 69.4 38.6 (2.1) 105.9 Interest expense (0.2) 34.8 0.2 4 34.8 Other income/(expense) (1.7) 1.5 (0.5) 5 (0.7) ---------------- ---------------- ---------------- ------------------ Income before income taxes 67.9 5.3 (2.8) 70.4 Provision for income taxes 22.2 2.2 0.3 6 24.7 ---------------- ---------------- ---------------- ------------------ NET INCOME 45.7 3.1 (3.1) 45.7 ================ ================ ================ ================== BASIC AVERAGE SHARES 156,921,228 209,191,169 EPS $ 0.29 $ 0.22 FULLY DILUTED SHARES OUTSTANDING 156,944,354 209,843,832 EPS $ 0.29 $ 0.22 EBIT 67.7 40.1 (2.6) 105.2 Depreciation & Amortization 14.7 4.4 (1.5) 2 17.6 ---------------- ---------------- ---------------- ------------------ EBITDA 82.4 44.5 (4.1) 122.8
1 The historical GAAP consolidated statements of income include the results of operations for the Spun-Off Businesses. For comparability, the consolidated statements of operations include a pro forma adjustment to include the results of Del Monte Brands. Cost of products sold excludes $5.2 million of amortization expense for intangible assets of the Spun-Off Businesses no longer subject to amortization. SFAS No. 142 "Goodwill and Other Intangible Assets" was adopted by the Company effective May 2, 2002. Cost of products sold also includes $0.4 million of pro forma depreciation expense to recognize the unwinding of Spun-Off Businesses assets held under synthetic lease obligations. SG&A includes the addition of $0.6 million of pro forma incentive and retention compensation for the Spun-Off Businesses. Interest expense includes the addition of $19.4 million of pro forma expense as if the merger and related financing occurred on the first day of each fiscal year presented. 2 Cost of products sold excludes $4.7 million of gains from the sale of assets for the Spun-Off Businesses, and $0.4 million of plant consolidation expense for Del Monte Brands. In accordance with purchase accounting rules applied to the merger, Del Monte Brands fixed assets were increased to fair market value. These results exclude $1.5 million resulting from incremental depreciation expense. 3 SG&A excludes $0.6 million of incentive and retention compensation for the Spun-Off Businesses, and a $0.1 million rounding adjustment. 4 Interest expense excludes $0.2 million of interest income resulting from the amortization of a loss from interest rate swap agreements. 5 Other expense excludes $0.5 million of gains from the change in fair value of interest rate swap agreements. 6 Income taxes are presented reflect the impact of the adjustments noted. DEL MONTE FOODS COMPANY COMBINED STATEMENTS OF INCOME FOR THE NINE MONTHS ENDED JANUARY 29, 2003 (IN MILLION'S)
GAAP GAAP Non-GAAP Non-GAAP 10-Q Pro Forma "As Adj" Pro Forma External Adj1 Adj "As Adjusted" ---------------- ---------------- ---------------- ---------------- Net sales 1,395.2 888.0 13.7 2 2,296.9 Cost of products sold 960.8 655.9 (16.5) 3 1,600.2 Selling, general and administrative 249.2 157.2 (16.6) 4 389.8 ---------------- ---------------- ---------------- ---------------- OPERATING INCOME 185.2 74.9 46.8 306.9 Interest expense 14.5 81.0 3.7 5 99.2 Other income/(expense) (3.2) (0.7) 3.7 6 (0.2) ---------------- ---------------- ---------------- ---------------- Income before income taxes 167.5 (6.8) 46.8 207.5 Provision for income taxes 57.5 (2.6) 19.0 7 73.9 ---------------- ---------------- ---------------- ---------------- NET INCOME 110.0 (4.2) 27.8 133.6 ================ ================ ================ ================ BASIC AVERAGE SHARES 165,075,301 209,228,132 EPS $ 0.67 $ 0.64 FULLY DILUTED SHARES OUTSTANDING 165,478,064 210,240,386 EPS $ 0.66 $ 0.64 EBIT 182.0 74.2 50.5 306.7 Depreciation & Amortization 31.5 29.7 (4.0) 3 57.2 ---------------- ---------------- ---------------- ---------------- EBITDA 213.5 103.9 46.5 363.9
1 The historical GAAP consolidated statements of income include the results of operations for the Spun-Off Businesses, and the results of Del Monte Brands from the December 20, 2002 merger date. For comparability, the consolidated statements of operations include a pro forma adjustment for the results of Del Monte Brands for the entire period presented. Cost of products sold includes $1.0 million of pro forma depreciation expense to recognize the unwinding of Spun-Off Businesses assets held under synthetic lease obligations. Interest expense includes the addition of $49.7 million of pro forma expense as if the merger and related financing occurred on the first day of each fiscal year presented. 2 Net sales exclude trade promotion and other sales related expenses of $13.7 million related to a change in estimate for liabilities associated with accounts receivables deductions for the Spun-Off Businesses. 3 In accordance with purchase accounting rules applied to the merger, Del Monte Brands inventory was increased to fair market value. This inventory step-up increases cost of products sold as inventory on-hand at the acquisition date is sold. These results exclude $11.0 million from inventory step-up, and $4.0 million resulting from incremental depreciation from the step-up of fixed assets to their fair market value. These results also exclude $1.5 million of Spun-Off Businesses expenses resulting from revisions to the parent company overhead rates as of the merger date. 4 SG&A excludes $9.2 million of integration expenses, $3.5 million of allocated parent company costs for the Spun-Off Businesses, and $3.9 million of incentive and retention compensation for the Spun-Off Businesses. 5 Interest expense excludes $3.7 million of interest income resulting from the amortization of a loss from interest rate swap agreements. 6 Other expense excludes a $2.6 million loss from foreign exchange related to the Company's Euro-denominated borrowings in connection with the merger financing, and a $1.1 million write-off of previously capitalized debt issuance costs as a result of debt prepayments. 7 Income taxes are presented reflect the impact of the adjustments noted. DEL MONTE FOODS COMPANY COMBINED STATEMENTS OF INCOME FOR THE NINE MONTHS ENDED JANUARY 30, 2002 (IN MILLION'S)
GAAP GAAP Non-GAAP Non-GAAP 10-Q Pro Forma "As Adj" Pro Forma External Adj1 Adj "As Adjusted" ---------------- ---------------- ---------------- ---------------- Net sales 1,318.6 1,015.3 1.3 2 2,335.2 Cost of products sold 894.2 750.3 (11.2) 3 1,633.3 Selling, general and administrative 225.0 175.1 (2.7) 4 397.4 ---------------- ---------------- ---------------- ---------------- OPERATING INCOME 199.4 89.9 15.2 304.5 Interest expense (1.1) 112.1 0.2 5 111.2 Other income/(expense) (1.2) (44.9) 48.1 6 2.0 ---------------- ---------------- ---------------- ---------------- Income before income taxes 199.3 (67.1) 63.1 195.3 Provision for income taxes 66.8 (26.2) 28.2 7 68.8 ---------------- ---------------- ---------------- ---------------- NET INCOME 132.5 (40.9) 34.9 126.5 ================ ================ ================ ================ BASIC AVERAGE SHARES 156,921,228 209,189,860 EPS $ 0.84 $ 0.61 FULLY DILUTED SHARES OUTSTANDING 156,946,612 209,864,083 EPS $ 0.84 $ 0.60 EBIT 198.2 45.0 63.3 306.5 Depreciation & Amortization 44.1 13.9 (4.5) 2 53.5 ---------------- ---------------- ---------------- ---------------- EBITDA 242.3 58.9 58.8 360.0
1 The historical GAAP consolidated statements of income include the results of operations for the Spun-Off Businesses. For comparability, the consolidated statements of operations include a pro forma adjustment to include the results of Del Monte Brands. Cost of products sold excludes $15.5 million of amortization expense for intangible assets of the Spun-Off Businesses no longer subject to amortization. SFAS No. 142 "Goodwill and Other Intangible Assets" was adopted by the Company effective May 2, 2002. Cost of products sold also includes $1.4 million of pro forma depreciation expense to recognize the unwinding of Spun-Off Businesses assets held under synthetic lease obligations. SG&A includes the addition of $1.9 million of pro forma incentive and retention compensation for the Spun-Off Businesses. Interest expense includes the addition of $64.5 million of pro forma expense as if the merger and related financing occurred on the first day of each fiscal year presented. 2 Net sales excludes $1.3 million of trade promotion expense related to an earlier acquisition. 3 Cost of products sold excludes $7.3 million of restructuring expense for the Spun-Off Businesses and $1.4 million for Del Monte Brands plant consolidation expense. In addition, cost of products sold excludes $4.7 million of gains from the sale of assets for the Spun-Off Businesses, and $2.4 million for the fair market value inventory step-up related to an earlier acquisition. In accordance with purchase accounting rules applied to the merger, Del Monte Brands fixed assets were increased to fair market value. These results exclude $4.5 million resulting from incremental depreciation expense. In addition, $0.3 million of other expenses are excluded from cost of products sold. 4 SG&A excludes $1.9 million of incentive and retention compensation for the Spun-Off Businesses, $0.5 million of Spun-Off Businesses restructuring expense and $0.3 million of other expense. 5 Interest expense excludes $0.2 million of interest income resulting from the amortization of a loss from interest rate swap agreements. 6 Other expense excludes a $42.3 million of prepayment premiums and related write-off of previously capitalized debt issuance costs as a result of a May 2001 debt refinancing, and $5.8 million of losses from the change in fair value of interest rate swap agreements. 7 Income taxes are presented reflect the impact of the adjustments noted.