Originally created 03/15/97

Heinz to close or sell at least 25 plants

PITTSBURGH (AP) - H.J. Heinz Co. is closing or selling at least 25 plants, and eliminating about 2,500 jobs under a reorganization plan aimed at strengthening its main ketchup, tuna and Weight Watchers businesses.

The job cuts announced today are the equivalent of almost 6 percent of the company's work force of 43,000.

Heinz stock was up 2 percent on the New York Stock Exchange this afternoon, climbing 87« cents to $42.62« a share.

Included in the plans being discussed this afternoon with industry analysts is the sale for $500 million of part of its Ore-Ida Foods Inc. business to Canada's McCain Foods Ltd.

Heinz said the cost of its reorganization would reduce pre-tax profits by about $650 million for the fiscal year that ends April 30.

Anthony J.F. O'Reilly, chairman and chief executive, said the overhaul of the company should generate earnings growth of 10 percent to 12 percent into the new century.

"This plan will make Heinz one of the three pre-eminent branded food companies in the world," he said in announcing the reorganization.

O'Reilly told shareholders last fall that Heinz will shed all but its six core businesses of tuna, condiments, diet food, baby food, pet food and prepared foods for restaurants.

Its brands include Heinz ketchup, StarKist tuna, Ore-Ida frozen potatoes and 9-Lives pet food.

Heinz is keeping its Ore-Ida and Tater Tots brand potatoes, Rosetto frozen stuffed pasta and Bagel Bites frozen bagel snacks. McCain, which is licensing the Ore-Ida trademark for potatoes, is buying these Heinz brands of appetizers and pasta - Moore's, Delicious, Golden Crisp, Kim's, Brew City and Domani.

Earlier today, Heinz announced earnings rose 11.4 percent in the third quarter of the fiscal year.

Heinz reported it earned $174.4 million, or 47 cents a share, in the quarter ending Jan. 29, up from $156.5 million, or 42 cents a share, a year ago.

The results included $18.1 million in charges against earnings for costs of the restructuring program including reductions in the work force at affiliates in New Zealand, Italy and Australia. The charges were partially offset by a $13.1 million gain on the sale of real estate in the United Kingdom.

Sales rose 5.2 percent to $2.31 billion from $2.19 billion a year ago.

For the first nine months of the fiscal year, Heinz earned $531.4 million, or $1.42 a share, up from $489.1 million, or $1.30 a share, a year ago.

Nine-month revenue rose to $6.91 billion from $6.58 billion.


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