Conagra Brands Reports Fourth Quarter And Full-Year Results

CHICAGO, June 27, 2019 /PRNewswire/ -- Today Conagra Brands, Inc. (NYSE: CAG) reported results for the fourth quarter and full fiscal year 2019, which ended on May 26, 2019. All comparisons for total Company and Legacy Conagra results are against the prior-year fiscal period, unless otherwise noted. Certain terms used in this release, including "Organic net sales," "Legacy Conagra," "EBITDA," "Free cash flow," and certain "adjusted" results, are defined under the section entitled "Definitions."

• Fiscal 2019 net sales grew 20.2%; organic net sales excluding the sale of the Trenton, Missouri production facility (Trenton) grew 0.3%.
• Fourth quarter net sales grew 32.9%; organic net sales, excluding Trenton, declined 0.7% as several discrete items negatively impacted top line growth in the Legacy Conagra business.
• The Company exceeded its adjusted operating margin guidance range for fiscal 2019.
• Fiscal 2019 diluted earnings per share from continuing operations (EPS) was $1.53, and adjusted EPS was $2.01.
• The Company exceeded its free cash flow expectations for the fourth quarter and fiscal year.
• Through the end of the fiscal year, the Company reduced its total debt by $886 million since completing the Pinnacle acquisition in October 2018 and remains on-schedule to meet its de-leveraging targets.

• The Pinnacle integration and synergy realization remained on-track in the quarter, with approximately $31 millionof cost synergies realized in fiscal 2019.
• The Pinnacle business delivered net sales and adjusted operating margin in line with expectations in the fourth quarter.

• The Company is increasing its fiscal 2020 organic net sales growth guidance from approximately 1% to a range of 1.0% to 1.5%.
• The Company is updating its fiscal 2020 adjusted EPS guidance to a range of $2.08 to $2.18 to reflect the divestiture of the Gelit business. Excluding the adjustment for Gelit, the earnings guidance range has not changed from that presented at the Company's Investor Day in April 2019.

CEO Perspective

Sean Connolly, president and chief executive officer of Conagra Brands, commented, "During fiscal 2019, we made tremendous progress on improving the long-term health of our business. We launched our largest innovation slate to date while supporting our brands through robust marketing programs. These actions have led to strong consumption growth and steadily improving base velocities in our strategically important frozen and snacks portfolios. I am also pleased with the progress we have made on Pinnacle since we closed the acquisition in October 2018, and the integration remains on-track.  With a multi-year innovation pipeline now in place for the Pinnacle portfolio, and more opportunity in plant-based meat alternatives than previously forecasted, we are as optimistic as ever about the long-term value creation potential of the acquisition."

He continued, "While our results in the fourth quarter were below expectations, we did make good progress in key areas of the business. In addition to the progress on Pinnacle, strong consumption trends in our frozen and snacks businesses demonstrated the strength of our innovation and the effectiveness of our marketing programs. However, much of our progress was overshadowed by transitory events, including intensified promotional competition in certain categories, several isolated manufacturing-related challenges, and weak performance in our Ardent Mills joint venture. Looking ahead, we remain confident that the Conagra Way is the right approach to drive long-term profitable growth and shareholder value.  Consistent with this belief, we are increasing our organic net sales growth guidance and maintaining our EPS guidance range for fiscal 2020 before adjusting for the Gelit divestiture."

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