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RAI CEO: 'Returning Value in a Challenging Time'
Date:4/30/2008

ed out last month should also enhance the brand's performance. We also began to distribute Kodiak Pouch, to extend the brand's appeal among competitive pouch consumers."

Even with one less shipping day than the prior-year period, Conwood's net sales were up 7.7 percent at $167 million. And after significant first- quarter investments to launch new styles and further drive Conwood's growth, the company's operating income of $81 million was up 1.9 percent from the year-ago quarter. Operating margins of 48.8 percent were down from the prior- year quarter, due to these investments.

"Our brands and our business continue to perform well," Rosson said. "With the continuing growth of Grizzly and the new styles we're launching nationally, we expect Conwood to post another year of strong growth."

FINANCIAL UPDATE

"Clearly, the first quarter was marked by a number of challenges that hurt our performance and have caused us to reassess our outlook for the year," said Thomas R. Adams, Reynolds American's chief financial officer. "Given our results to date, we're reducing our full-year forecast. Excluding the gain from the joint venture, we now expect to deliver earnings in line with our 2007 adjusted results."

Adams said that R.J. Reynolds is taking steps to address factors that contributed to its weak volume in the first quarter and expects to improve its performance through the balance of the year. "R.J. Reynolds is making adjustments to ensure that its brands are more competitive, while also remaining focused on improving profits through increased efficiency," he said.

"The investments that Conwood is making to further strengthen brand performance are already beginning to pay off and position the company well for another year of solid growth," Adams said. "Conwood is a strong company with strong brands, and these investments will reinforce the company's ability to consistently deliver volume and earnings gains moving forward."

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SOURCE Reynolds American Inc.
Copyright©2008 PR Newswire.
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