990553 Vlasic's Loss Grows After Sale Of Beef Unit

Cherry Hill, NJ - Vlasic Foods International reported a wider third quarter net loss because of a $140 million charge against earnings for selling its Argentine beef business to the unit's management team.

Vlasic, the pickle maker spun off from Campbell Soup Co., had a loss of $140.1 million or $3.08 per share, equal to the expense of selling the Swift Armour beef unit. That compares with a loss the previous year of $20.8 million or 46 cents a share on sales of $320.7 million.

Without special charges, Vlasic posted earnings of 15 cents per diluted share. Wall Street had pegged the company at 16 cents per diluted, operating share according to First Call Corp.

In the third quarter of 1998, Vlasic reported operating earnings of 10 cents per share. Revenues were roughly flat at $320.6 million.

The company did not disclose a price tag on its Swift Armour sale but said the unit had 1998 sales of $200 million. The Argentine business employs about 2000 people, making chilled, frozen and canned beef products sold to manufacturers and foodservice companies.

The deal should close by the end of July, Vlasic said.

Analysts had not expected Vlasic to sell the business until March 2000 because of tax reasons, but the company said in February it would speed up the divesture plan after warning of lower profits for this year and next.

“We have moved quickly and decisively to divest our beef business at a good value because it is a non-strategic, commodity business,” Robert Bernstock, chief executive, said in a prepared statement. “This sale will allow us to pay down debt and focus more resources on growing our core Vlasic and Swanson businesses.”

The sale is part of Vlasic's five-part plan to focus on its core products. In January, Vlasic sold its gourmet food distributor, Kattus Gourmet Foods, to Germany-based Zuckerraffinerie Tangermuende Fr. Meyers Sohn GmbH for $70 million.

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