Del Monte Foods highlights shift away from focus on deleveraging

By Jennifer Lanning Drey

Portland, Ore., July 13 - Del Monte Foods Co. has shifted its focus away from using its cash to delever in order to instead return cash to shareholders, Larry Bodner, Del Monte's executive vice president of finance, said Tuesday during a company investor presentation.

"At 2 times [debt to EBITDA], we are consistent with our peer set. The company is no longer heavily levered," Bodner said.

Previously, the company was applying about 75% of its cash toward deleveraging.

However, after reducing its debt by about $600 million in the last two years, Del Monte now plans to use about 25% of its cash for dividends. The remainder of the cash will go toward share repurchases and mergers and acquisitions, he said.

Regarding mergers and acquisitions, Bodner said that Del Monte would remain disciplined, looking primarily at the pet snacks and dry food categories, which have attractive margin structures and growth profiles.

"We don't look to buy something just to say we bought something," he said.

Del Monte is a San Francisco-based producer, distributor and marketer of branded food and pet products.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.