The Parsippany, New Jersey, USA-headquartered company is a major producer, marketer and distributors of brands frozen and shelf-table food products. Among its leading brands are Birds Eye vegetables, Van de Kamp's and Mrs. Paul's seafoods, Hungry-Man dinners and entrées and Aunt Jemima frozen breakfasts.
The net loss in the quarter, which ended on June 24, amounted to $11 million, after giving effect to $19 million of after-tax charges related to restructuring and refinancing, and a net loss in the six-month period of $1 million, after giving effect to $21 million of after-tax charges related to restructuring and refinancing.
Commenting on the results, Pinnacle Foods Chief Executive Officer Bob Gamgort stated, "We continue to face an especially challenging industry environment, marked by high levels of input cost inflation and weak consumer demand. Despite these headwinds, we sequentially improved the trend in our gross margin performance and invested in new product innovation, which enabled us to hold or gain share on brands representing approximately half of our profit contribution. Further, we continued to improve our debt profile and reduce interest expense by completing a successful refinancing during the quarter.
Net sales in our North American retail businesses declined 3% in the second quarter of 2012, largely reflecting the unfavorable impact of the earlier Easter holiday this year and overall softness in the industry. Celeste® pizza, Lender's® bagels and Comstock® and Wilderness® pie fillings experienced growth. Birds Eye® vegetables and Birds Eye® Voila!® complete bagged meals each experienced modest sales declines, but gained market share in a very difficult category environment.
Earnings before interest and taxes (EBIT) were $42 million in the second quarter of 2012, after giving effect to $17 million of pre-tax charges related to restructuring and refinancing, compared to EBIT in the second quarter of 2011 of $59 million, which included $17 million of pre-tax charges related to restructuring and a legal settlement. Excluding these charges in both periods, the change in EBIT for the quarter reflected the impacts of the sales decline and higher input cost inflation, which was only partially offset by productivity improvements and net pricing actions. Consolidated EBITDA, as defined in our borrowing agreements, was $85 million in the second quarter of 2012, compared to Consolidated EBITDA of $100 million in the second quarter of 2011. Consolidated EBITDA is defined below under Non-GAAP Financial Matters.
The company reported a net loss of $11 million in the second quarter of 2012, after giving effect to approximately $19 million of after-tax charges related to restructuring and refinancing, compared to net earnings of $8 million in the second quarter of 2011, which included approximately $10 million of after-tax charges related to restructuring and a legal settlement. Excluding these charges in both periods, the change in net earnings reflected the decline in EBIT, partially offset by lower interest expense stemming from the Company's refinancing activities and lower debt levels. The tax rate for the second quarter of 2012, excluding discrete items, would be approximately 40%.
Net sales of $1.21 billion in the first six months of 2012 were essentially even with net sales in the first six months of 2011. Net sales in the company's North American retail businesses decreased 1%. EBIT was $107 million in the first six months of 2012, after giving effect to $20 million in pre-tax charges related to restructuring and refinancing, compared to EBIT in the year-ago period of $144 million, after giving effect to $21 million in pre-tax charges related to restructuring and a legal settlement.
The company reported a net loss of $1 million in the first six months of 2012, after giving effect to $21 million in after-tax charges related to restructuring and refinancing. This compares with net earnings in the first six months of 2011 of $28 million, which included $13 million of after-tax charges related to restructuring and a legal settlement. Consolidated EBITDA, as defined in the Company's borrowing agreements, was $175 million in the first six months of 2012, compared to Consolidated EBITDA
of $207 million in the first six months of 2011. A detailed reconciliation of Consolidated EBITDA to Net Earnings (Loss) is provided in the tables that accompany this release.
