Heinz Net Income Rises

NEW YORK - May 31/07 - SNS -- The H. J. Heinz Company reported net income of U.S. $181 million on sales of $2,414.3 million for the three months ending May 2, compared to a net of $168 million on sales of $2,399.7 million during the fourth quarter of the previous fiscal year.

This lifted net income for the full fiscal year to $786 million on sales of $9,001.6 million, compared to a net of $645 million on sales of $8,643.4 million during the previous fiscal year.

The company said sales in its North American Consumer Products segment increased 7.3%. Volume increased 2.6%, (despite one less week than last year) primarily as a result of strong growth in Smart Ones and Boston Market frozen entrees and desserts and Classico pasta sauces. Pricing increased 2.1% largely due to Heinz ketchup, Ore-Ida frozen potatoes, Smart Ones frozen entrees and Bagel Bites and T.G.I. Friday's frozen snacks. Acquisitions increased sales 1.9%.

By contrast, sales of the U.S. Foodservice segment decreased 0.9%. Importantly, sales of the flagship ketchup business grew by more than 5%. Pricing increased sales 1.7%, largely due to Heinz ketchup and tomato products, single serve condiments and frozen desserts. Volume decreased 0.4%, as higher volume in Heinz ketchup was offset by declines resulting primarily from one less week in the fiscal year and a decision to exit certain low margin accounts. Divestitures, net of acquisitions, reduced sales 2.1%.

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