ELMHURST, Ill.--(BUSINESS WIRE)--May 21, 1999--Keebler Foods Company (NYSE:KBL) today reported record net sales and net income for the first quarter ended April 24, 1999. Net sales were up 34%, reaching $852.0 million from $636.7 million in the same quarter last year. Net income was up 133% to $32.7 million from $14.0 million last year. Diluted earnings per share were up 131% to $0.37, compared to $0.16 in last year's first quarter. Basic earnings per share were $0.39 compared to $0.17. First quarter results include contributions from the September 28, 1998 acquisition of President International Inc. ("President"). The President acquisition contributed $194.7 million to the first quarter's net sales. Excluding President, first quarter 1999 net sales increased 3.2% over the comparable quarter of the prior year. "Keebler's continued success reflects our sound marketing strategies, ongoing operational improvements and the initial benefits from the President acquisition," said Keebler CEO Sam K. Reed. "We are particularly pleased this quarter by the sales and profit growth for our branded businesses in a challenging competitive environment. The contribution from the recently acquired President businesses also exceeded our expectations." "Keebler continues to benefit from ongoing cost reduction programs, which yielded over $13 million in the quarter," Reed added. "The integration of the President businesses is on track. We recently announced the closure of our Sayreville, New Jersey bakery, which is expected to produce $23 million in annualized cost improvements commencing in fiscal 2000." Branded Segment Keebler's Branded Segment includes sales of cookies, crackers and brownies for retail distribution. Sales were up $101.3 million for the quarter to $622.8 million, a 19.4% increase over first quarter 1998. Keebler's Branded Segment recorded a profit contribution of $81.3 million for the current quarter versus $61.2 million for the first quarter 1998. Key factors for the growth were the inclusion of President, volume gains in the core Keebler/Sunshine branded business and favorable improvements in realized price and product mix. Cheez-It continued its fast-paced growth, with gains in core products and the recently introduced Snack Mix. Branded cookie and cracker consumer takeaway increased 4% versus the year ago quarter across supermarket, mass merchandiser and drug store channels. Specialty Segment Keebler's Specialty Segment encompasses foodservice sales, products custom-baked for other manufacturers and cookies manufactured for the Girl Scouts of America. The Specialty segment recorded sales of $229.2 million for the quarter, up 99% over first quarter 1998. Keebler's Specialty Segment recorded a profit contribution of $53.5 million for the first quarter, up from $25.3 million for the first quarter 1998. Key factors were the inclusion of President, increased custom-baked product sales as well as favorable commodity costs and productivity trends. Sales for the Girl Scouts of America set a new record. The Girl Scout Cookie(R) drive is highly seasonal, with most of the revenue realized in the first quarter. Keebler, founded in 1853, is the second largest cookie and cracker manufacturer in the United States with 1998 net sales of $2.2 billion. Keebler markets its products under well-recognized brands such as Keebler, Cheez-It, Carr's, Ready Crust, Famous Amos, Murray, and Plantation. Keebler is also a leading manufacturer for both the private label and foodservice markets. Through its Little Brownie Bakers subsidiary, Keebler is also a leading licensed supplier of Girl Scout Cookies(R). Keebler Foods Company is headquartered in Elmhurst, Illinois. Statements contained in this press release that are not historical facts are forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. All forward-looking statements are subject to risks and uncertainties that could cause actual results to differ from those projected. Other factors that may cause actual results to differ from the forward-looking statements contained in this release and that may affect the Company's prospects in general include, but are not limited to, changes in general economic and business conditions, the Company's ability to recover its raw materials costs in the pricing of its products, the availability of capital on acceptable terms, actions of competitors, the extent to which the Company is able to develop new products and markets for its products and such other factors as are described in the Company's fillings with the Securities and Exchange Commission. KEEBLER FOODS COMPANY Consolidated Condensed Statements of Income (Dollars in Thousands, Except Per Share Data) For the For the Sixteen Sixteen Weeks Ended Weeks Ended April 24, 1999 April 25, 1998 ------------- ------------- Net Sales $ 852,033 $ 636,746 Cost of Sales 380,703 264,087 Gross Margin 471,330 372,659 Selling, Marketing and Administrative Expenses 394,342 338,175 Other 6,343 2,808 Operating Income 70,645 31,676 Interest Expense, Net 13,316 7,441 Income before Income Tax Expense 57,329 24,235 Income Tax Expense 24,652 10,195 Net Income $ 32,677 $ 14,040 Memo: Total Depreciation $ 17,383 $ 14,108 Memo: Total Amortization $ 6,092 $ 2,128 Net Income per Share: Basic $ 0.39 $ 0.17 Diluted 0.37 0.16 Weighted Average Shares Outstanding: Basic 83,848 82,339 Diluted 88,042 87,138 KEEBLER FOODS COMPANY Consolidated Condensed Balance Sheet (Dollars in Thousands) April 24, 1999 January 2, 1999 ------------ ------------- ASSETS: Current Assets $ 304,120 $ 415,318 Property, Plant and Equipment, net 568,335 564,524 Intangible Assets 612,281 617,533 Other Assets 55,687 58,405 ============ ============== Total Assets $ 1,540,423 $ 1,655,780 ============ ============== LIABILITIES AND SHAREHOLDERS' EQUITY: Current Liabilities $ 411,981 $ 510,186 Long Term Debt 506,833 541,765 Deferred Income Taxes 138,757 147,098 Deferred Compensation 20,805 19,368 Other Liabilities 111,532 108,062 Shareholders' Equity 350,515 329,301 ============ ============== Total Liabilities and Shareholders' Equity $ 1,540,423 $ 1,655,780 ============ ============== -=-=- 