STOCK OF THE WEEK: DELMONTE

Delmonte Foods: Improving for Financial Significance



Del Monte Foods Company’s (DLM) quality brands are a leader in the packaging-food industry and can be found in virtually every food store in America today and in over 80% of all U.S. households.
(DLM) was created by the merger of the Del Monte canned fruit and vegetable operations with the spin-off of Heinz’s tuna, pet food, soup, and infant food businesses in December 2002. It’s two segments, Consumer Products and Pet Products are some of the most trusted brands like Del Monte®, StarKist®, S&W®, Kibbles 'n Bits®, Pup-Peroni® and 9Lives®. These products deliver 75% of the company's annual grocery sales, with category leaders accounting for over two thirds of the total.

Del Monte Foods seems to be positioned well in the $117 billion dry grocery segment of the U.S. retail food market and distributes its products in all areas. The company also owns marketing rights for the Del Monte brand throughout South America. Founded in 1916, it’s headquartered in San Francisco. Del Monte employs 8,500 full time employees and approximately 9,800 additional seasonal workers. The company operates 16 production facilities and 15 distribution centers in 14 states, and operations in American Samoa, Canada, Ecuador and Venezuela.

Dedicated to quality, the company was the first National Food Processor to carry nutrition information on its labels.
It is also recognized as a leader in promoting sound environmental policies and practices.

Del Monte has been reformulating products, updating packaging, and investing marketing dollars in brands like StarKist® and Kibbles 'n Bits® to revive the Heinz brands it acquired in 2002.. Once they have succeeded in improving these brands, the upside could be significant for the company. About 30% of their growth categories are in tuna pouches and premium fruits.

In their year-end report to share holders on June 23, 2005, Richard G. Wolford, Chairman & CEO highlighted several areas that should fortify Del Monte’s position as an industry-leader of quality food products:
-- Increase the branded focus of the product portfolio

-- Streamline the asset and cost profile

-- Accelerate innovation-driven organic growth in higher margin categories

-- Execute financial strategy for optimizing debt management and returning value to shareholders

Closing on August 29th at $10.90, (DLM) is close to its 52 week high in January of $11.65. Overall sales growth funs at less than 2% annually, however management forecasts that increased marketing will push future growth to 4%.

Del Monte products have been on my kitchen shelves for years. You decide if their vegetables are “green” enough for your portfolio.

STOCK OF THE WEEK: DELMONTE

Delmonte Foods: Improving for Financial Significance



Del Monte Foods Company’s (DLM) quality brands are a leader in the packaging-food industry and can be found in virtually every food store in America today and in over 80% of all U.S. households.
(DLM) was created by the merger of the Del Monte canned fruit and vegetable operations with the spin-off of Heinz’s tuna, pet food, soup, and infant food businesses in December 2002. It’s two segments, Consumer Products and Pet Products are some of the most trusted brands like Del Monte®, StarKist®, S&W®, Kibbles 'n Bits®, Pup-Peroni® and 9Lives®. These products deliver 75% of the company's annual grocery sales, with category leaders accounting for over two thirds of the total.

Del Monte Foods seems to be positioned well in the $117 billion dry grocery segment of the U.S. retail food market and distributes its products in all areas. The company also owns marketing rights for the Del Monte brand throughout South America. Founded in 1916, it’s headquartered in San Francisco. Del Monte employs 8,500 full time employees and approximately 9,800 additional seasonal workers. The company operates 16 production facilities and 15 distribution centers in 14 states, and operations in American Samoa, Canada, Ecuador and Venezuela.

Dedicated to quality, the company was the first National Food Processor to carry nutrition information on its labels.
It is also recognized as a leader in promoting sound environmental policies and practices.

Del Monte has been reformulating products, updating packaging, and investing marketing dollars in brands like StarKist® and Kibbles 'n Bits® to revive the Heinz brands it acquired in 2002.. Once they have succeeded in improving these brands, the upside could be significant for the company. About 30% of their growth categories are in tuna pouches and premium fruits.

In their year-end report to share holders on June 23, 2005, Richard G. Wolford, Chairman & CEO highlighted several areas that should fortify Del Monte’s position as an industry-leader of quality food products:
-- Increase the branded focus of the product portfolio

-- Streamline the asset and cost profile

-- Accelerate innovation-driven organic growth in higher margin categories

-- Execute financial strategy for optimizing debt management and returning value to shareholders

Closing on August 29th at $10.90, (DLM) is close to its 52 week high in January of $11.65. Overall sales growth funs at less than 2% annually, however management forecasts that increased marketing will push future growth to 4%.

Del Monte products have been on my kitchen shelves for years. You decide if their vegetables are “green” enough for your portfolio.

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