![]() JP Morgan 2006 High Yield Conference February 2006 Exhibit 99.1 |
![]() 1 Forward Looking Statements Forward Looking Statements This presentation may contain statements that predict or forecast future events or results, depend on future events for their accuracy or otherwise contain “forward-looking information.” The words “estimates,” expects,” contemplates,” “anticipates,” “projects,” “plans,” “intends,” “believes,” “forecasts,” “may,” “should,” and variations of such words or similar expressions are intended to identify forward-looking statements. These statements are made based on management's current expectations and beliefs concerning future events and various assumptions and are not guarantees of future performance. Actual results may differ materially as a result of various factors, some of which are beyond our control, including but not limited to: general economic and business conditions, industry trends, changes in our leverage, interest rate changes, changes in our ownership structure, competition, the loss of any of our major customers or suppliers, changes in demand for our products, changes in distribution channels or competitive conditions in the markets where we operate, costs of integrating acquisitions, loss of our intellectual property rights, fluctuations in price and supply of raw materials, seasonality, our reliance on co-packers to meet our manufacturing needs, availability of qualified personnel, and changes in the cost of compliance with laws and regulations, including environmental laws and regulations. There may be other factors that may cause our actual results to differ materially from the forward-looking statements. We assume no obligation to update the information contained in this presentation. |
![]() 2 % Total Net Sales 18.0% 19.2 % 8.4% 1.1% % Total Net Sales 24.5% 12.0% 7.6% 5.8% 3.3% Diversified Product Lines Diversified Product Lines Frozen foods: 53.3% Dry foods: 46.7% |
![]() 3 Category Category size Major brands Market position Market share Pickles, peppers and relish $1.0 billion #1 17.8% Baking mixes and frostings $1.3 billion #2 19.4% Syrups $479 million #2 #3 9.5% 9.4% Frozen breakfast $1.1 billion #3 13.6% Frozen dinners and entrees (1) $2.2 billion #3 12.1% Frozen prepared seafood $575 million #2 #3 13.9% 9.4% Bagels $552 million #2 15.3% Leading Brands in Large Categories Leading Brands in Large Categories Note: IRI data for the 52 weeks ending December 2005. (1) Single-serve, full-calorie dinners and entrees. |
![]() 4 Results and Accomplishments Results and Accomplishments Sales and Marketing Momentum Rebuilt brands with strong advertising and consumer programming – Launched 40+ new items – Improved product quality and contemporized packaging – Reversal of longstanding steep declines in retail sales – Consistent consumption growth since June 2004 Rebuilt a decimated Aurora sales force and created a new marketing organization Brands have regained credibility with both retailers and customers Built significant penetration in emerging channels Strong sales growth in alternate distribution channels, including Canada, private label, and food service |
![]() 5 Results and Accomplishments Results and Accomplishments Integration Initiatives Annualized cost savings of $50 million achieved Completed closure of Omaha plant Effective SKU rationalization, over 250 SKUs discontinued Shifted production of Open Pit to in-house manufacturing from a co-packing arrangement, increasing margins for this product line Initiated closure of Erie plant (to be completed in H1 2006) Completed integration of corporate functions Organization and infrastructure have been streamlined and positioned to support future growth Restructuring of warehousing and transportation network in progress |
![]() 6 Recent IRI Trends Recent IRI Trends IRI Category Jun-04 Dec-04 Jun-05 Dec-05 52 wk Dec-05 Duncan Hines -7.5% -1.8% +10.7% +2.9% -3.2% Mrs. Butterworth's -8.8% -2.2% +3.0% +2.9% -2.7% Log Cabin -9.6% -6.2% -5.8% -3.6% -2.7% Vlasic -0.3% -1.5% -2.7% -3.9% -2.9% Hungry Man +7.4% -2.6% -2.5% -1.8% +0.8% Swanson -12.3% -17.5% -11.5% -6.3% +0.8% Aunt Jemima -6.1% -2.1% +2.4% +0.4% +2.7% Seafood -17.4% -16.4% -6.9% -4.6% -0.6% Lenders -16.9% -23.2% -19.3% -12.9% -0.3% Celeste -2.5% -3.0% -0.9% +0.7% -1.2% Open Pit -3.1% -5.4% -5.8% -9.1% -2.5% IRI - 52 weeks ending |
![]() 7 Industry Challenges Industry Challenges Pinnacle has absorbed over $40 million of increased commodity costs over the past two years – Higher costs for raw materials and packaging – Increased production energy costs – Increased fuel surcharges for product delivery Nationwide trucking shortage, increasing freight rates Increased leverage of growing and consolidating retail customers |
![]() 8 Key Strategic Initiatives for 2006 Key Strategic Initiatives for 2006 Warehousing and transportation initiatives are top-priority for 2006 – Hired Bill Darkoch as Executive Vice President of Supply Chain. Industry veteran with over 20 years of supply management experience – Implementation of identified annual savings • Optimize warehouse network – consolidation and closures • Improve deployment – reduce DC to DC transfers – Systems initiatives to fully integrate all of the Company’s supply chain functions Maintain sales momentum in retail channel and continue expansion in food service, private label and emerging channels Complete consolidation of Erie facility (H1 2006) |
![]() 9 2006 Marketing and Sales Strategy 2006 Marketing and Sales Strategy Branded Sales Optimizing the marketing mix to maintain branded sales momentum Strategic introduction of new items (12 new items for 2006 vs. 40 new items in 2005) – New distribution opportunities – Trade effectiveness Winning the war at the store – tactical marketing support and strategic alignment with customers – Category management initiatives – Account specific marketing – Enhanced trade strategies Harvest Brands Food Service Expand distribution at key national channels and street accounts New items including Grabwich sandwich and stuffed bagels line to capitalize on the “on– the–go” trend Continue to expand breakfast items into schools and business & industry |
![]() 10 New Items New Items Cream Cheese Whipped Frosting Hot Fudge Brownie Sundae Signature Dessert Chocolate Molten Lava Cake Signature Dessert Cheeseburger Pizza For One Aunt Jemima Magic Minis Pancakes Cinnamon Roll Aunt Jemima Magic Minis Pancakes Strawberry Shortcake Jumbo Rigatoni Dinner Chicken Parmigiana Dinner Triple Cheese Lasagna Dinner |
![]() 11 Summary Summary Accomplishments Brands have been revitalized and have regained credibility with retailers and customers Organization and infrastructure have been streamlined and positioned to support future growth Completed integration of corporate functions Pinnacle generates strong free cash flow Strategic Initiatives Restructuring of warehousing and transportation network in progress Complete supply chain systems implementation Complete Erie closing Maintain sales momentum in retail channel and continue expansion in food service, private l abel and emerging channels |
![]() JP Morgan 2006 High Yield Conference February 2006 |