/ Newsroom / Press Releases

Press Releases

Hormel Foods Reports Record Second Quarter Results

AUSTIN, Minn. | May 23, 2012

AUSTIN, Minn. – Hormel Foods Corporation (NYSE: HRL) today reported its performance for the fiscal year 2012 second quarter.

All comparisons are to the second quarter or first half of fiscal 2011.

HIGHLIGHTS

Second Quarter

 - Diluted EPS of $.48, up 20 percent from diluted EPS of $.40

 - Segment operating profit up 9 percent

 - Dollar sales of $2 billion, up 3 percent

 - Volume down 2 percent

 - Jennie-O Turkey Store operating profit up 50 percent; volume down 2 percent; dollar sales up 7 percent

 - Refrigerated Foods operating profit down 25 percent; volume down 4 percent; dollar sales down 1 percent

 - Grocery Products operating profit up 10 percent; volume down 3 percent; dollar sales up 1 percent

- Specialty Foods operating profit up 9 percent; volume up 2 percent; dollar sales up 12 percent

- All Other (primarily Hormel Foods International) operating profit up 52 percent; volume up 10 percent; dollar sales up 11 percent

The company reported fiscal 2012 second quarter net earnings of $127.9 million, up 17 percent from net earnings of $109.6 million a year earlier. For the six months ended April 29, 2012, net earnings were $256.3 million, down 1 percent from net earnings of $258.4 million the same period last year.  Diluted net earnings per share for the six months ended April 29, 2012 were $.95, equal to diluted net earnings per share of $.95 last year.

Sales for the quarter were $2 billion, up 3 percent from fiscal 2011. For the six months ended April 29, 2012, sales totaled $4.1 billion, up 4 percent from the same period last year.

COMMENTARY

“We are pleased to report record earnings and sales for the second quarter. This is a good example of our balanced business model in action, as we were able to increase earnings in four out of five segments.” said Jeffrey M. Ettinger, chairman of the board, president and chief executive officer, “Sales grew three percent, again with four of our five segments registering gains.”

“Our Jennie-O Turkey Store segment delivered another outstanding quarter, driven by value-added sales growth. Our International business also achieved impressive results, led by strong export sales. Both our Grocery Products and Specialty Foods segments returned to earnings growth during the quarter. Results of our Refrigerated Foods segment were significantly pressured by lower pork operating margins,” Ettinger remarked.

“We are particularly encouraged by the continued growth of our Jennie-O Turkey Store value-added sales and our MegaMex Foods joint venture,” Ettinger stated.

SEGMENT OPERATING HIGHLIGHTS – SECOND QUARTER

Grocery Products (13% of Net Sales, 22% of Total Segment Operating Profit)

The Grocery Products segment operating profit increased 10 percent, aided by lower pork and beef input costs.  Net sales exceeded last year by 1 percent. Strong results by our SPAM® family of products and our MegaMex Foods products offset soft sales of our microwave products and DINTY MOORE® stew.

Refrigerated Foods (51% of Net Sales, 27% of Total Segment Operating Profit)

Refrigerated Foods segment profit declined 25 percent, due primarily to lower pork operating margins during the quarter.  Net sales for the quarter declined 1 percent, with lower commodity pork sales offsetting strong sales of HORMEL® NATURAL CHOICE® deli meats, HORMEL® party trays, HORMEL® pepperoni and DILUSSO® deliproducts. Foodservice value-added sales also grew during the quarter.

Jennie-O Turkey Store (20% of Net Sales, 35% of Total Segment Operating Profit)

Jennie-O Turkey Store had another excellent quarter, with segment operating profit up 50 percent from a year ago, driven by value-added sales. Net sales for the quarter rose 7 percent, led by sales of JENNIE-O TURKEY STORE® retail tray pack and turkey burgers.

Specialty Foods (11% of Net Sales, 10% of Total Segment Operating Profit)

The Specialty Foods segment operating profit increased 9 percent, as pricing actions taken earlier helped offset higher raw material costs.  Net sales grew 12 percent, led by sales of private label canned meats, ingredients, bulk and nutritional items.

All Other (5% of Net Sales, 6% of Total Segment Operating Profit)

The All Other segment, which consists primarily of Hormel Foods International, grew segment profit 52 percent, and grew net sales by 11 percent, driven by stronger exports of fresh pork and the SPAM® family of products. 

General Corporate Expense

General corporate expenses were lower than last year due primarily to lower pension and insurance costs.

OUTLOOK

“Our second quarter results provide positive momentum heading into the back half of the year.  We believe continued weaker pork operating margins will be more than offset by stronger results from our other segments. We expect sales in the center of the store to slowly improve as we continue our advertising support of our HORMEL® and SPAM® brands. Taking all of the relevant factors into account, we are maintaining our full-year earnings guidance range of $1.79 to $1.89 per share,” Ettinger concluded. 

DIVIDENDS

Effective May 15, 2012, the Company paid its 335th consecutive quarterly dividend, at the annual rate of $.60.

CONFERENCE CALL

A conference call will be Webcast at 8:30 a.m. CT (9:30 a.m. ET) on Wednesday, May 23, 2012. Access is available at http://www.hormelfoods.com.  If you do not have Internet access and want to listen to the call over the phone, the dial in number is 877-941-0844 and you must provide the access code of 4535051. An audio replay is available by calling 800-406-7325 and entering access code 4535051. The audio replay will be available beginning at 10:30 a.m. CT on Wednesday, May 23, 2012, through 11:59 p.m. CT on Wednesday, June 6, 2012. The Webcast replay will be available at 10:30 a.m. CT, Wednesday, May 23, 2012, and archived for one year.

About Hormel Foods           

Hormel Foods Corporation, based in Austin, Minn., is a multinational manufacturer and marketer of consumer-branded food and meat products, many of which are among the best known and trusted in the food industry. The company leverages its extensive expertise, innovation and high competencies in pork and turkey processing and marketing to bring branded, value-added products to the global marketplace. The company is a member of the Standard & Poor's 500 Index, Dow Jones Sustainability Indexes, Maplecroft Climate Innovation Indexes, and was named one of "The 100 Best Corporate Citizens” by Corporate Responsibility Magazine for the fourth year in a row in 2012.  The company enjoys a strong reputation among consumers, retail grocers, foodservice and industrial customers for products highly regarded for quality, taste, nutrition, convenience and value. For more information, visit http://www.hormelfoods.com.

FORWARD-LOOKING STATEMENTS

This news release contains forward-looking information based on management’s current views and assumptions. Actual events may differ materially. Please refer to the cautionary statement regarding Forward-Looking Statements and Risk Factors that appear on pages 28-35 in the company’s Form 10-Q for the quarter ended January 29, 2012, which was filed with the SEC on March 9, 2012, and can be accessed at www.hormelfoods.com under “Investors-SEC Filings.”

Statements Follow

                    #                                  #                                  #

Segment Data

Fiscal 2012 Second Quarter Segment Operating Results (dollars in thousands)

SECOND QUARTER – 13 WEEKS ENDED

NET SALES

4/29/ 2012

5/1/ 2011

% Change

Grocery Products

$      263,993

$      260,273

1.4 

Refrigerated Foods

1,031,975

1,040,624

(0.8)

Jennie-O Turkey Store

391,053

365,953

6.9 

Specialty Foods

228,947

205,001

11.7 

All Other

         96,891

         87,190

  11.1 

Total

$   2,012,859

$   1,959,041

    2.7 

OPERATING PROFIT

Grocery Products

$       42,858 

$       39,048 

9.8 

Refrigerated Foods

53,009 

70,250 

(24.5)

Jennie-O Turkey Store

70,198 

46,703 

50.3 

Specialty Foods

20,859 

19,164 

8.8

All Other

        12,855 

          8,444 

  52.2 

  Total segment operating profit

199,779 

183,609 

8.8 

  Net interest and investment expense

945 

5,215 

(81.9)

  General corporate expense

   6,088 

   11,969 

(49.1)

  Noncontrolling interest

          1,048 

          1,123 

   (6.7)

Earnings before income taxes

$     193,794 

$     167,548 

   15.7 

YEAR TO DATE – 26 WEEKS ENDED

NET SALES

4/29/ 2012

5/1/ 2011

% Change

Grocery Products

$      533,472

$      537,172

(0.7)

Refrigerated Foods

2,115,500

2,051,326

3.1 

Jennie-O Turkey Store

768,424

730,470

5.2 

Specialty Foods

446,971

396,346

12.8 

All Other

       187,931

       165,285

  13.7 

Total

$   4,052,298

$   3,880,599

    4.4 

OPERATING PROFIT

Grocery Products

$       86,951 

$       87,610 

(0.8)

Refrigerated Foods

106,758 

166,384 

  (35.8)

Jennie-O Turkey Store

146,960 

120,528 

21.9 

Specialty Foods

37,506 

36,442 

2.9 

All Other

        25,326 

        18,437 

  37.4 

  Total segment operating profit

403,501 

429,401 

(6.0)

  Net interest and investment expense (income)

2,569 

11,353 

(77.4)

  General corporate expense

   14,815 

   23,221 

(36.2)

  Noncontrolling interest

          1,986 

          2,332 

 (14.8)

Earnings before income taxes

$     388,103 

$     397,159 

   (2.3)

HORMEL FOODS CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share amounts)

13 Weeks Ended

26 Weeks Ended

4-29-2012

5-1-2011

4-29-2012

5-1-2011

Net sales

$2,012,859

$1,959,041

$4,052,298

$3,880,599

Cost of products sold

 1,677,252 

 1,632,814 

 3,379,282 

 3,180,367 

GROSS PROFIT:

335,607 

326,227 

673,016 

700,232 

  Selling, general and administrative

148,684 

160,136 

301,161 

305,297 

  Equity in earnings of affiliates

       7,816 

       6,672 

      18,817 

      13,577 

OPERATING INCOME:

194,739 

172,763 

390,672 

408,512 

Other income & expenses:

  Interest & investment income

2,338 

1,972 

3,928 

2,413 

  Interest expense

     (3,283)

  (7,187)

    (6,497)

   (13,766)

EARNINGS BEFORE INCOME TAXES:

193,794 

167,548 

388,103 

397,159 

Provision for income taxes

64,859 

56,846 

129,835 

136,422 

  (effective tax rate)

    33.47%

     33.93%

     33.45%

     34.35%

NET EARNINGS

128,935 

110,702 

258,268 

260,737 

Less: net earnings attributable to  

     noncontrolling interest

  

      1,048 

  

      1,123 

    

       1,986 

    

       2,332 

NET EARNINGS ATTRIBUTABLE TO HORMEL FOODS CORPORATION

$127,887 

$109,579 

$256,282 

$258,405 

NET EARNINGS PER SHARE

         Basic

$        .49 

$        .41 

$        .97 

$        .97 

         Diluted

$        .48 

$        .40 

$        .95 

$        .95 

WEIGHTED AVG SHARES O/S

         Basic

263,610 

267,207 

263,778 

266,868 

         Diluted

269,061 

272,847 

269,334 

272,293 

DIVIDENDS DECLARED

        PER SHARE

$    .1500 

$    .1275 

$    .3000 

$    .2550 

HORMEL FOODS CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

4/29/ 2012

10/30/ 2011

(in thousands)

ASSETS

CURRENT ASSETS

  Cash and cash equivalents

$   524,779

$   463,130

  Short-term marketable securities

76,811

76,077

  Accounts receivable

439,348

461,110

  Inventories

912,672

885,823

  Income taxes receivable

16,649

24,423

  Deferred income taxes

69,485

69,203

  Prepaid expenses

11,986

10,048

  Other current assets

        8,345

        8,417

     TOTAL CURRENT ASSETS

2,060,075

1,998,231

INTANGIBLES

758,468

762,930

OTHER ASSETS

587,591

576,140

PROPERTY, PLANT & EQUIPMENT, NET

    908,529

    907,090

     TOTAL ASSETS

$ 4,314,663

$ 4,244,391

LIABILITIES AND SHAREHOLDERS’ INVESTMENT

TOTAL CURRENT LIABILITIES

$    699,968

$    778,186

LONG-TERM DEBT – LESS CURRENT MATURITIES

250,000

250,000

OTHER LONG-TERM LIABILITIES

558,872

556,389

SHAREHOLDERS’ INVESTMENT

 2,805,823

 2,659,816

    TOTAL LIAB. & SHAREHOLDERS’ INVESTMENT

$ 4,314,663

$ 4,244,391

HORMEL FOODS CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

26 Weeks Ended

4/29/2012

5/1/2011

(in thousands)

OPERATING ACTIVITIES

  Net earnings

$   258,268 

$   260,737 

  Depreciation and amortization of intangibles

59,707 

62,281 

  Increase in working capital

(100,401)

(35,822)

  Other

      (4,543)

    (11,277)

NET CASH PROVIDED BY OPERATING ACTIVITIES

213,031 

275,919 

INVESTING ACTIVITIES

  Net sale of securities

5,000 

  Acquisitions of businesses/intangibles

 (168)

 (7,207)

  Net purchases of property / equipment

(56,414)

(33,721)

  Decrease in investments, equity in affiliates, and other assets

       4,746 

       3,465 

NET CASH USED IN INVESTING ACTIVITIES

(51,836)

(32,463)

FINANCING ACTIVITIES

  Proceeds from long-term debt, net

247,657 

  Dividends paid on common stock

(73,186)

(61,925)

  Share repurchase

(42,088)

(34,718)

  Other

     14,662 

     49,871 

NET CASH (USED IN) PROVIDED BY FINANCING ACTIVITIES

(100,612)

    200,885 

EFFECT OF EXCHANGE RATE CHANGES ON CASH

       1,066 

       1,518 

INCREASE IN CASH AND CASH EQUIVALENTS

61,649 

445,859 

Cash and cash equivalents at beginning of year

   463,130 

   467,845 

CASH AND CASH EQUIVALENTS AT END OF QUARTER

$  524,779 

$  913,704 

 


Topics: Financial, Company

News Topic(Click to refine list of press releases)

Contact Us



Coupons