Wrigley Reports 15 Percent Earnings Per Share Increase on Record Quarterly Sales

CHICAGO, July 28  /PRNewswire-FirstCall/ -- The Wm. Wrigley Jr. Company (NYSE:WWY) today announced a 14 percent gain in second quarter sales versus a year ago to a record $1.57 billion, the Company's highest sales quarter ever. The sales increase primarily reflected the positive impact of currency translation and pricing, in combination with one percent growth in worldwide shipments.

Net earnings for the quarter of $0.70 per diluted share were up 15 percent or $0.09 from the year ago period.  On a non-GAAP basis, excluding the one-time charges related to the proposed merger with Mars, Incorporated ($0.04) and the negative impact of the supply chain restructuring program on the year-ago results ($0.01), second quarter earnings per share were up 19 percent from the same quarter last year -- $0.74 versus $0.62.*

"All major regions contributed to our sales gain in the quarter, and we are looking to build on that going forward as we continue to ramp up our investment in brand support and roll out innovative new products and packaging to the marketplace.  Growth in the gum category was solid, with Wrigley gaining share in key geographies, including the U.S., Russia and China," said President and Chief Executive Officer Bill Perez.  "At the same time, we are maintaining our focus on operational efficiency, leading to improved financial metrics despite inflationary pressure, with only modest growth in operating expenses and continued improvement in gross margins."

Bill Wrigley, Executive Chairman and Chairman of the Board added, "Despite increased competition and relatively tougher economic conditions, we continue to produce strong near-term results, which is testimony to the strength of both our team and our brands.  More importantly, we are doing so while continuing to lay the groundwork for the long-term, generational growth of our business, with significant innovation and marketing investments in key geographies around the world."

  * Please see Attachment B for full GAAP to non-GAAP reconciliation.

  Sales and Gross Margins


Second quarter sales increased by $194 million, or 14 percent, over the same quarter last year.  Somewhat more than half of the sales gain reflects the positive impact of currency, due to translation of international sales into a relatively weaker U.S. dollar.  The balance of the increase is primarily due to improved price/mix, mainly in the U.S. and Europe, with a small contribution from increased shipments, principally in Asia/Pacific.

In EMEAI (principally Europe), sales were $783 million, up $111 million or 17 percent versus a year ago, with just under three-quarters of the gain attributable to favorable currency translation.  Selected pricing actions, principally in Eastern Europe, accounted for most of the remaining sales gain, with a one percent overall increase in volume.

Russia and Ukraine continued to lead the growth in the region with strong double-digit sales gains.  Despite tough year-ago comparisons, Poland and Germany recorded solid gains, moderated by less vigorous results in Spain.  In the U.K., Wrigley's share trends continued to be positive through the first half of 2008, although the overall category has softened relative to the high level of marketplace activity a year ago.

Sales increased nearly $59 million or 25 percent in Asia/Pacific to $290 million, with about half the gain due to volume growth and the other half due to the positive impact of currency translation.  China continued to drive the region's growth, with strong double-digit shipment and sales growth across its diverse product portfolio.  Similar shipments and sales increases across the countries of South Asia -- including Vietnam, Indonesia, Malaysia and Thailand -- solidified the region's results.

North America net sales were up five percent to $474 million, although volume was off about five percent, reflecting the impact of pricing changes that began during the last part of the year-ago quarter.  In the U.S., gum sales and share trends in the quarter were positive, driven by the continued success of 5(TM).  The summer launches of Extra(R) Fruit Sensations(TM) and Wrigley's new Slim Pack(TM) are on track and provided a limited boost to sales in the current quarter, but their impact is expected to be more pronounced in the second half of the year.

Through the first six months of the year, worldwide sales grew by 15 percent, with somewhat more than half the gain attributable to the positive impact of currency translation.  The remaining increase primarily reflects improved price/mix, with a one percent contribution from volume growth. Year-to-date regional sales gains for Asia/Pacific, EMEAI and North America were 25 percent, 18 percent and five percent, respectively.

Consolidated gross margins for the second quarter, excluding restructuring, were 54.9 percent versus 53.2 percent in the same quarter last year.  The 170 basis-point improvement was driven largely by higher pricing, with a modest overall increase in costs being offset by other efficiencies. Year-to-date consolidated gross margins, excluding restructuring, improved by 100 basis points -- 54.0 percent versus 53.0 percent a year ago, also attributable to favorable pricing, partially offset by slight cost increases.

Operating Profits and Net Earnings

Consolidated operating profits in the quarter were $298 million, up 13 percent from the same period in the prior year.  The growth was primarily driven by improved price/mix and the benefit of currency translation, offset by additional investment in brand support, which climbed by 29 percent in the quarter and is expected to continue at a strong pace for the balance of the year.  On a non-GAAP basis, excluding the $17 million in one-time charges related to the proposed merger with Mars, and the negative impact of $4 million in year-ago restructuring charges, second quarter operating profits were up 18 percent versus the same period in 2007.

Consolidated net earnings of $194 million were up 14 percent or $24 million from the second quarter of 2007.  On a diluted per share basis, earnings were $0.70, up 15 percent or $0.09 versus the prior year.  On a non-GAAP basis, excluding the impact of merger expenses and year-ago restructuring charges, earnings per share increased 19 percent or $0.12 versus the year-ago quarter, with about $0.08 due to the positive impact of currency translation.

For the first six months of 2008, operating profits climbed by 20 percent, even with a 24 percent increase in brand support.  About two-thirds of the gain resulted from the positive impact of currency translation and most of the remainder came from higher pricing and a small increase in volume. Year-to-date diluted earnings per share of $1.31 were up 16 percent or $0.18 from the first six months of 2007.  On a non-GAAP basis, excluding one-time charges related to the proposed merger, as well as restructuring costs and the one-time asset sale gain from the first half of 2007, earnings per share of $1.36 increased 21 percent or $0.24 from the same period a year ago, including a $0.15 benefit from currency translation.

About Wrigley

The Wm. Wrigley Jr. Company is a recognized leader in confections with a wide range of product offerings including gum, mints, hard and chewy candies, lollipops, and chocolate.  The Company has global sales of $5.4 billion and distributes its world-famous brands in more than 180 countries.  Three of these brands -- Wrigley's Spearmint(R), Juicy Fruit(R), and Altoids(R) -- have heritages stretching back more than a century.  Other well-loved brands include Doublemint(R), Life Savers(R), Big Red(R), Boomer(R), Pim Pom(R), Winterfresh(R), Extra(R), Freedent(R), Hubba Bubba(R), Orbit(R), Excel(R), Creme Savers(R), Eclipse(R), Airwaves(R), Solano(R), Sugus(R), P.K.(R), Cool Air(R) and 5(TM).

Additional Information and Where to Find It

In connection with the above-described transactions, the Company will file with the U.S. Securities and Exchange Commission a preliminary proxy statement and a definitive proxy statement.  The proxy statement will be sent to the Company's stockholders, who are urged to read the proxy statement and other relevant materials when they become available, because they will contain important information about the above-described transactions.  Wrigley investors and security holders may obtain free copies of these documents (when they are available) and other documents filed with the SEC at its web site at http://www.sec.gov/.  In addition, investors and security holders may obtain free copies of the documents filed with the SEC by the Company by going to the Company's Investors page on its corporate website at http://www.wrigley.com/ or by directing a request to Wm. Wrigley Jr. Company, 410 North Michigan Avenue, Chicago, Illinois  60611 - Attention: Investor Relations.

The Company and its directors and executive officers may be deemed to be participants in the solicitation of proxies from the stockholders of the Company in connection with the above-described transactions.  Information about the Company and its directors and officers can be found in the Company's Proxy Statements and Annual Reports on Form 10-K filed with the SEC, as well as on the Company's Investors page on its corporate website at http://www.wrigley.com/.  Additional information regarding the interests of those persons may be obtained by reading the proxy statement when it becomes available.

Cautionary Statement Regarding Forward-Looking Information

This press release contains statements which may be considered forward-looking statements within the meaning of the Securities Exchange Act of 1934, including, without limitation, statements regarding operating strategies, future plans and financial results.  Forward-looking statements may be accompanied by words such as "anticipate", "believe", "could", "estimate", "expect", "forecast", "intend", "may", "possible", "predict", "project" or similar words, phrases or expressions.  The Company does not undertake any obligation to update the information contained herein, which speaks only as of the date of this press release.  A variety of factors could cause actual results to differ materially from the anticipated results or expectations expressed including, without limitation, the occurrence of any event, change or circumstance that could give rise to the termination of the merger agreement and the possibility that the Company would be required to pay any termination fee in connection therewith; the outcome of any legal proceedings that may be instituted against the Company and others following the announcement of the merger agreement; risks that the required regulatory approvals will not be obtained in a timely manner, if at all; inability to complete the merger due to the failure to obtain stockholder approval or failure to satisfy the other conditions to the completion of the merger; risks that the proposed transaction disrupts current plans and operations; the availability or retention of retail space; the availability of raw materials; changes in demographics and consumer preferences; changes in foreign currency and market conditions; increased competition and discounting and other competitive actions; underutilization of or inadequate manufacturing capacity and labor stoppages; governmental regulations; and the outcome of integrating acquired businesses.  These factors, and other important factors that could affect these outcomes are set forth in the Company's most recently filed Annual Report on Form 10-K and the Company's other SEC filings, in each case under the heading "Forward-Looking Statements" and/or "Risk Factors".  Such discussions regarding risk factors and forward-looking statements are incorporated herein by reference.

  ATTACHMENT A

                         WM. WRIGLEY JR. COMPANY
                    STATEMENT OF CONSOLIDATED EARNINGS
             Amounts in thousands except for per share values

                               Three Months Ended        Six Months Ended
                                     June 30,                June 30,
                                  2008        2007        2008        2007

  Net sales                 $1,571,291  $1,377,780  $3,022,841  $2,631,826

  Cost of sales                708,402     644,547   1,389,405   1,237,442

  Restructuring charges              -       4,486           -       12,635

      Gross profit             862,889     728,747   1,633,436    1,381,749

  Selling, general and
   administrative expense      564,976     465,819   1,065,951      908,617

      Operating income         297,913     262,928     567,485      473,132

  Interest expense             (16,072)    (17,123)    (31,293)     (33,725)
  Investment income              5,393       2,537       8,782        4,427
  Other income (expense),
   net                          (2,277)      1,421     (12,077)      18,124

  Earnings before income
   taxes                       284,957     249,763     532,897      461,958

  Income taxes                  91,186      79,950     170,527      149,444

  Net earnings                $193,771    $169,813    $362,370     $312,514

  Net earnings per average
   share of common stock
   (basic)(a)                    $0.71       $0.62       $1.33       $1.13

  Net earnings per average
   share of common stock
   (diluted)(a)                  $0.70       $0.61       $1.31        $1.13

  Average number of basic
   shares outstanding for
   the period                  272,010     274,961     272,612      275,490

  Average number of diluted
   shares outstanding for
   the period                  275,875     277,008     275,679     277,299

  (a) Per share calculations based on the average number of shares
      outstanding for the period.



  ATTACHMENT B

                         WM. WRIGLEY JR. COMPANY
               RECONCILIATION OF GAAP TO NON-GAAP EARNINGS
             Amounts in thousands except for per share values

                                             Three Months Ended
                                   June 30, 2008            June 30, 2007
                                           Diluted                 Diluted
                                   Net     Earnings        Net     Earnings
                                Earnings  Per Share*    Earnings  Per Share*

  Net Earnings, as reported
   under U.S. GAAP            $193,771       $0.70    $169,813      $0.61

  Restructuring cost,
   net of tax (A)                    -           -       3,050       0.01

  Merger expense,
   net of tax (C)               11,416        0.04           -           -

  Non-GAAP earnings, excluding
   restructuring cost and
   merger expense             $205,187       $0.74    $172,863      $0.62


                                             Six Months Ended
                                   June 30, 2008           June 30, 2007
                                           Diluted                 Diluted
                                   Net     Earnings        Net     Earnings
                                Earnings  Per Share*    Earnings  Per Share*

  Net Earnings, as reported
   under U.S. GAAP            $362,370       $1.31    $312,514      $1.13

  Restructuring cost,
   net of tax (A)                    -           -       8,548       0.03

  Gain on sale of assets,
   net of tax (B)                    -           -      (9,415)      (0.03)

  Merger expense,
   net of tax (C)               11,416        0.04           -           -


  Non-GAAP earnings, excluding
   restructuring cost, gain on
   sale of assets and merger
   expense                    $373,786       $1.36    $311,647      $1.12

  * May not total due to rounding

  (A) Management has excluded restructuring cost as it is viewed as
      nonrecurring costs incurred to improve production operations.

  (B) Management has excluded the gain on the sale of certain assets as it
      is viewed as nonrecurring income.

  (C) Management has excluded expense related to the potential merger with
      Mars as it is viewed as nonrecurring.



  ATTACHMENT C

                         WM. WRIGLEY JR. COMPANY
                NET SALES AND OPERATING INCOME BY SEGMENT
                           Amounts in thousands

                               Three Months Ended         Six Months Ended
                                     June 30,                 June 30,
                                 2008        2007         2008       2007

  NET SALES

    North America             474,475     452,110      907,666    866,097

    EMEAI                     782,578     671,451    1,461,666  1,237,158

    Asia/Pacific              290,238     231,601      607,685    485,666

    All Other                  24,000      22,618       45,824     42,905

      Total Net Sales       1,571,291   1,377,780    3,022,841  2,631,826

  OPERATING INCOME

    North America             114,506      95,520      200,449    171,634

    EMEAI                     206,930     189,177      362,122    329,052

    Asia/Pacific               79,170      63,466      175,122    137,091

    All Other                (102,693)    (85,235)    (170,208)  (164,645)

      Total Operating Income  297,913     262,928      567,485    473,132



      ATTACHMENT D
                         WM. WRIGLEY JR. COMPANY
                   CONDENSED CONSOLIDATED BALANCE SHEET

                             Amounts in thousands

                                                   June 30,     December 31,
                                                     2008           2007
  Assets

  Current assets:
    Cash and cash equivalents                     $383,351        278,843
    Short-term investments, at amortized cost            -            635
    Accounts receivable, net                       530,142        469,221
    Inventories                                    625,813        620,082
    Other current assets                           200,201        180,997
      Total current assets                       1,739,507      1,549,778

  Deferred charges and other assets                222,293        214,457
  Goodwill                                       1,487,106      1,422,957
  Other intangibles                                493,742        484,256
  Net property, plant and equipment              1,574,778      1,560,064
  Total assets                                  $5,517,426      5,231,512

  Liabilities and Stockholders' Equity
  Current liabilities:
    Short-term debt                               $130,000              -
    Accounts payable and accrued expenses          903,714        871,901
    Dividends payable                               91,109         79,965
    Income and other taxes payable                 155,155        149,254
      Total current liabilities                  1,279,978      1,101,120

  Other noncurrent liabilities                     334,022        312,912
  Long term debt                                 1,000,000      1,000,000
      Total liabilities                          2,614,000      2,414,032

  Stockholders' equity                           2,903,426      2,817,480
  Total liabilities and stockholders' equity    $5,517,426      5,231,512



  ATTACHMENT E

                         WM. WRIGLEY JR. COMPANY
                   CONSOLIDATED STATEMENT OF CASH FLOWS
                           Amounts in thousands

                                                      Six Months Ended
                                                           June 30,
                                                      2008           2007
  OPERATING ACTIVITIES
    Net earnings                                  $362,370       $312,514
    Adjustments to reconcile net earnings to net
     cash provided by operating activities:
      Depreciation and amortization                116,260        101,868
      Net loss (gain) on retirements of property,
       plant and equipment                           8,450        (13,735)
      Non-cash share-based compensation             27,899         30,801
      Deferred income taxes                          6,157          1,112
      (Increase) decrease in:
        Accounts receivable                        (39,085)       (22,222)
        Inventories                                  7,077         43,575
        Other current assets                       (30,754)       (23,324)
        Deferred charges and other assets           (9,101)       (14,386)
      Increase (decrease) in:
        Accounts payable and accrued expenses       26,821         (8,369)
        Income and other taxes payable               3,875         18,083
        Other noncurrent liabilities                24,081         11,333

    Net cash provided by operating activities      504,050        437,250

  INVESTING ACTIVITIES
    Additions to property, plant and equipment     (86,206)       (97,759)
    Proceeds from retirements of property,
     plant and equipment                             3,261         23,165
    Proceeds from sale of investments                  635            685
    Acquisition, net of cash acquired              (95,726)      (293,912)

    Net cash used in investing activities         (178,036)      (367,821)

  FINANCING ACTIVITIES
    Dividends paid                                (170,486)      (150,371)
    Common Stock purchased and issued, net        (191,090)      (147,905)
    Issuances of short-term debt, net              130,000        266,444

    Net cash (used in) provided by
     financing activities                         (231,576)       (31,832)

  Effect of exchange rate changes on
   cash and cash equivalents                        10,070          3,440

  Net increase (decrease) in cash and
   cash equivalents                                104,508         41,037
  Cash and cash equivalents at
   beginning of period                             278,843        253,666

  Cash and cash equivalents at end of period      $383,351       $294,703


DATASOURCE: Wm. Wrigley Jr. Company



CONTACT:  Christopher Perille, Senior Director - External Relations of

Wm. Wrigley Jr. Company, [phone]



Web site:  http://www.wrigley.com/ 

Copyright