Del Monte Foods Company Reports Fiscal 2008 Fourth Quarter and Full Year Results

Business Wire, June 5, 2008

"We must be more aggressive, targeted and innovative with our businesses in order to combat exogenous cost factors and better position the Company for sustained and enhanced growth," said Mr. Wolford. "To that end, we recently announced that we are seeking strategic alternatives for our seafood business, which has a distinct business model with margins significantly dependant on a single cost factor and highly sensitive price elasticity. We also recently announced an organizational realignment of our Company to create a more marketing-centric organization, including the appointment of the Company's first chief marketing officer. Centralizing Del Monte's marketing capabilities will directly support our strategic goals and help drive our enhanced focus on marketing and innovation-driven performance. Today, we are announcing additional initiatives that we believe will sharpen our focus on growth engines and take our Company to the next level."

Del Monte plans to implement two main directives that will position the Company to better deliver value to shareholders in the long-term. First, the Company plans to increase levels of strategic consumer and processing technology investments in higher-margin businesses where the Company has identified it has a competitive advantage and the growth potential is expected to be high. Specifically, Del Monte plans to make accelerated investments to grow its packaged produce and pet products platforms. Second, Del Monte plans to more aggressively execute against its core branded business, and it has identified specific initiatives to increase innovation and enhance implementation of productivity improvements. It also expects execution of pricing actions to drive margin expansion.

Del Monte will provide further details at its 2008 Analyst and Investor Day, which will be held in New York on July 8, 2008.

Outlook

Fiscal 2009

For fiscal 2009, the Company expects net sales growth of 5% to 7% over fiscal 2008 net sales of $3,736.8 million. Fiscal 2009 net sales is expected to be driven by strong growth in both Pet and Consumer, driven primarily by new products and the impact of a 53rd week.

The Company expects fiscal 2009 EPS from continuing operations to be $0.58 to $0.62. The Company reported $0.66 diluted EPS from continuing operations in fiscal 2008, which included $0.08 of transformation-related expense.

This reduction in fiscal 2009 EPS expectations when compared to fiscal 2008 results primarily reflects increased costs, which are not expected to be fully offset by pricing and cost reduction programs for fiscal 2009, as the full benefit from pricing actions are not expected to be realized until the second half of fiscal 2009. Strong volume growth across the Company, driven in part by increased marketing and innovation investment, is expected to positively contribute to EPS. Additionally, EPS is anticipated to benefit from the absence of $0.08 of transformation expense and lower interest expense, partially offset by the absence in fiscal 2009 as compared to fiscal 2008 of both the ~$0.03 gain on the sale of S&W in the Eastern Hemisphere and the ~$0.02 of Pet recall insurance proceeds net of fiscal 2008 Pet recall impact.