ConAgra To Pare Seafood, Cheese Divisions in Restructuring

OMAHA, Neb. -- ConAgra Foods Inc. here said it will cut its dividend by 34 percent, pare its seafood and cheese businesses, and record an unspecified amount of charges over the rest of the year, as part of a sweeping restructuring plan.

Noting that the costs of implementing the restructuring would depress operating earnings until it returns to current earnings levels, expected to be in fiscal 2009, the company also said the actions would allow it to reduce expenses and focus on its existing highest potential brands.

ConAgra said it would specify the amount and nature of the restructuring charges in its next earnings release, which is scheduled for March 23. The charges will be recorded during the remainder of fiscal 2006 and in future quarters, while some of the asset sales will result in gains, ConAgra said.

The proposed sale of the seafood and domestic and imported cheese businesses comes after ConAgra announced last month it would sell its refrigerated meats business which include the Armour, Butterball and Eckrich brands. In late January, ConAgra also announced it was selling Cook's, a smoked-meat business, to Smithfield Foods Inc., for an undisclosed price. The seafood, cheese and refrigerated meats up for sale generated total annual revenues of $2.8 billion.

Amid the divestures, the company also intends to increase annual marketing spending of more than $75 million, in combination with the reallocation and disciplined application of current marketing dollars, to result in major increases for key consumer brands.

ConAgra said it also expects strong contribution to its future earnings from the impact of plant rationalization, supply chain improvements, the application of divestiture proceeds and reductions in the company's administrative costs, including significant costs currently absorbed by businesses to be divested.

"It is essential that we increase our investments behind our highest potential brands, simplify our portfolio of businesses and build a high quality earnings trajectory for ConAgra Foods," said Gary Rodkin, president and c.e.o. "The planned divestitures are the catalyst for our ability to attack costs, streamline our operations and return quickly to recent earnings levels, but with a significantly stronger foundation for future performance."

In other news, ConAgra Foods named Jacqueline McCook chief growth officer and e.v.p., putting her in charge of the company's growth strategy, marketing and international business opportunities.

In her new post, McCook, 49, will report to Rodkin. She previously was president and chief executive of the McCook Group consulting firm, advising consumer-oriented companies on strategy development, branding and innovation.

King Pouw has also joined ConAgra as its new s.v.p. of business transformation. Reporting to Owen Johnson, e.v.p. and chief administrative officer, Pouw will work with Johnson to devise common, cost-effective processes across the company that support streamlined organizational structures and approaches, ultimately benefiting customers, consumers and shareholders.

Pouw's experience includes over 25 years at Kellogg, where he directed manufacturing, engineering, procurement, research and development, and information technology, and led business transformation activities with the chief operating and chief financial officers.

As one of North America's largest packaged food companies, ConAgra's consumer brands include: Banquet, Chef Boyardee, Egg Beaters, Healthy Choice, Hebrew National, Hunt's, Marie Callender's, Orville Redenbacher's, PAM, and many others.
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