Del Monte Foods Co., which recently agreed to a $4 billion buyout, reported second quarter gains for its pet product division, while overall sales declined and overall profits rose.
For the pet division, Del Monte reported operating income of $92.7 million on net sales of $433.2 million for the second quarter of fiscal 2011 ended Oct. 31, compared to operating income of $84.8 million on net sales of $422.1 million.
The San Francisco-based company, which manufactures Milk-Bone and Meow Mix, among other brands, attributed the increase in pet division net sales primarily to strong unit volume growth, particularly in dry pet food and pet snacks, and new product volume growth, particularly in the 9Lives brand. Higher trade spend, which supported dry pet food and new products, negatively impacted sales, according to the company.
For the first six months, Del Monte reported operating income of $191.4 million on net sales of $860.5 million for its pet division, compared to operating income of $187.6 million on net sales of $834.4 for the first six months of fiscal year 2010.
Overall, Del Monte Foods reported net income of $81.1 million on net sales of $940.9 million for the second quarter, compared to net income of $62.6 million on net sales of $958.9 million.
For the first six months, Del Monte reported net income of $140.5 million on net sales of $1.75 billion, compared to net income of $121.2 million on net sales of $1.77 billion in the previous year.
Last week, the company agreed to be acquired by an investor group led by funds from Kohlberg Kravis Roberts & Co. L.P., Vestar Capital Partners and Centerview Partners for $19 per share or $5.3 billion, which includes the assumption of $1.3 billion in debt. Del Monte has until early January 2011 to find a superior offer.
Excluding the impact of the potential transaction, Del Monte now expects for fiscal 2011 net sales growth of -1 percent to 1 percent over fiscal 2010 net sales of $3.7 billion, compared to previous expectations of 1 percent to 3 percent.