ConAgra ends quarter with $707 million cash, $2.2 billion net debt

By Lisa Kerner

Charlotte, N.C., Dec. 20 - ConAgra Foods, Inc. closed its fiscal 2012 second quarter with about $707 million of cash on hand and no significant paper borrowings, chief financial officer John F. Gehring said during the company's earnings call on Tuesday.

The company repaid $343 million of the current portion of long-term debt during the quarter and remains committed to an investment-grade credit rating.

Net debt at the end of the quarter was $2.2 billion, and the ratio of net debt to total capital at quarter's end was 32%.

ConAgra's net interest expense for the quarter ended Nov. 27 was $51 million, up from $34 million in the prior-year period. Interest income from the notes receivable held in connection with the divestiture of the trading and merchandising operations benefited year-ago amounts by $19 million. Those notes were repaid in December 2010, the company said.

Net interest expense is expected to be about $200 million for the full year 2012.

Dividends for the fiscal second quarter increased to $95 million from $88 million in the same period in 2010, reflecting a higher dividend rate partially offset by fewer shares outstanding.

During the quarter, ConAgra repurchased about 4 million shares of its common stock for about $95 million. After the end of the quarter, the board of directors increased the share repurchase authorization by $750 million.

ConAgra expects to repurchase shares periodically over several years, depending on market conditions and other factors, in the open market or privately.

Capital expenditures decreased to $65 million for the quarter from $82 million in the year-ago period.

For the fiscal year 2012, capital expenditures are projected to be about $450 million.

Looking ahead, ConAgra expects fiscal 2012 full-year adjusted earnings per share to grow at a low- to mid-single digit rate over the $1.75 earned last fiscal year, benefiting from a strong second-quarter performance, recent acquisitions and upwardly revised inflation estimates.

ConAgra Foods is an Omaha-based food products, agriculture and feed company.

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