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| Del Monte Foods Company |
| One Market, San Francisco, CA 94105 * (415) 247-3000 |
| Business Description | The company is a branded marketer of premium quality, nutritious food products, is the largest producer and distributor of canned vegetables and canned fruit in the United States. |
| Offering Information Company has | |||
| Trading As | DLM (NYSE) | Industry | Manufacturing (SIC 2033) |
| Type of Stock Offered | Common Shares | Filing Date | 03/19/1998 |
| Domestic Shares Offered | 20,000,000 | Offer Date | 02/04/1999 |
| Foreign Shares Offered | 0 | Filing Range | $14.00 - $16.00 |
| Company Shares | 20,000,000 | Offer Price | $15.00 |
| Selling Shrhldrs Shares | 0 | Gross Spread | $0.900 |
| Gross Proceeds | $300,000,000 | Selling | $0.540 |
| Expenses | - - | Reallowance | $0.100 |
| Post-IPO Shares | 49,000,000 | Employees | 2700 |
| Primary Underwriting Group | ||
| Underwriter Name | Participation | Underwriter Phone |
| Morgan Stanley Dean Witter Discover & Co. | Lead Manager | (212) 761-5900 |
| BancAmerica Robertson Stephens | Co-manager | (415) 989-8500 |
| Bear, Stearns & Co. Inc. | Co-manager | (212) 272-4850 |
| BT Alex Brown | Co-manager | (410) 727-1700 |
| Donaldson, Lufkin & Jenrette Securities Corp. | Co-manager | (212) 371-0641 |
| Income Statement and Cash Flow Summary | |||||||
| Prior Audited Income |
Latest Unaudited Income | ||||||
| Full Year Audited Figures | 6 Months Ending | ||||||
| Figures in U.S. millions except per share data | 06/30/1995 | 06/30/1996 | 06/30/1997 | 12/31/1996 | 12/31/1997 | ||
| Revenues | - | - | 1,527.000 | 1,305.000 | 1,217.000 | 628.000 | 620.000 |
| Income from Oper. | - | - | - | - | 73.000 | 42.000 | 45.000 |
| Net Income | - | - | 5.000 | 88.000 | -56.000 | 3.000 | -11.000 |
| E.P.S | - | - | - | - | - | - | - |
| Revenue Growth (%) | - | - | -14.54 | -6.743 | -1.27 | ||
| Net Income Growth (%) | - | - | 1,660.00 | - | - | ||
| Oper. Profit Margin (%) | - | - | - | - | 6.00 | 7.26 | 6.69 |
| Net Profit Margin (%) | - | - | 0.33 | 6.74 | - | - | 0.48 |
| Cash Flow - Oper. | 25.00 | - | - | ||||
| Cash Flow - Inv. | 37.00 | - | - | ||||
| Cash Flow - Fin. | -63.00 | - | - | ||||
| Balance Sheet Summary and Financial Ratios | |||||
| Balance sheet as of: 12/31/1997 | Financial Ratios | ||||
| Total Assets | 1,053.00 | Current Assets | - | Current Ratio | - |
| Total Liab. | 1,389.00 | Current Liab. | - | Debt Ratio | 131.91% |
| Total Equity | -336.00 | Working Cap. | 224.00 | Debt to Equity Ratio | - |
| Cash | - | Return on Assets | - | ||
| Use Of Proceeds |
The proceeds from the proposed offering will be used to repay or redeem certain indebtedness and preferred stock. |
| Legal Counsel Registrar Auditor | |
| Issuer's Law Firm | Cleary, Gottlieb, Steen & Hamilton |
| Bank's Law Firm | Brown & Wood |
| Auditor | KPMG Peat Marwick |
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| Industry Competition |
While many companies compete in the domestic canned vegetable, fruit and tomato product categories, only a small number of well-established companies operate on both a national and a regional basis with single or multiple branded product lines. The Company faces substantial competition throughout its product lines from these and other companies. Certain of these competitors have greater financial resources and flexibility than the Company. Several of the Company's product lines are sensitive to competition from regional brands and many of the Company's product lines compete with imports, private label products and fresh alternatives. While no single private label competitor has greater market share than the Company in its principal product categories, for the 52 weeks ended December 27, 1997, private label competition as a group represented 42.7%, 40.5% and 30.0% of canned vegetable, fruit and solid tomato product sales, respectively. Furthermore, the Company cannot predict the pricing or promotional actions by its competitors or their effects on the Company's ability to market and sell its products. There can be no assurance that the Company's sales volume or market shares would not be adversely affected by negative consumer reaction to its higher prices. The categories of the canned food industry in which the Company competes have in the past been affected by processing over-capacity. Although the Company believes that recent consolidation among certain participants in those categories may result in capacity rationalization, there can be no assurance that the Company's results will not be adversely affected by industry over-capacity in the future or that crop supply levels will not change so as to create an imbalance of supply and demand in future periods. |
| Business Plan |
Following the consummation of the Recapitalization in 1997, the Company implemented a new business strategy designed to increase sales and improve operating margins. The key elements of this new business strategy are discussed below: (I) Leverage Brand Equity to Increase Sales and Market Share of High Margin Products, (ii) Focus on Consumption-Driven Marketing Strategy, (iii) Improve Profitability Through New Products and Packaging, (iv) Increase Penetration of High-Growth Distribution Channels, (v) Implement Further Cost Savings and (vi) Complete Strategic Acquisitions. |