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TheStreet Open House

Hormel Foods Reports Record Third Quarter Results

Stocks in this article: HRL

DIVIDENDS

Effective August 15, 2012, the Company paid its 336 th 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 Thursday, August 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 4556709. An audio replay is available by calling 800-406-7325 and entering access code 4556709. The audio replay will be available beginning at 10:30 a.m. CT on Thursday, August 23, 2012, through 11:59 p.m. CT on Thursday, September 6, 2012. The Webcast replay will be available at 10:30 a.m. CT, Thursday, August 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 30-36 in the company’s Form 10-Q for the quarter ended April 29, 2012, which was filed with the SEC on June 8, 2012, and can be accessed at www.hormelfoods.com under “Investors-SEC Filings.”

Statements Follow

Segment DataFiscal 2012 Third Quarter Segment Operating Results (dollars in thousands)

   

THIRD QUARTER – 13 WEEKS ENDED

       

NET SALES

July 29, 2012

July 31, 2011

% Change

Grocery Products $ 297,177 $ 245,368 21.1
Refrigerated Foods 1,043,311 1,045,874 (0.2 )
Jennie-O Turkey Store 351,604 327,809 7.3
Specialty Foods 230,072 207,025 11.1
All Other   86,024   84,516 1.8  
Total $ 2,008,188 $ 1,910,592 5.1  
 
 

OPERATING PROFIT

Grocery Products $ 40,052 $ 30,428 31.6
Refrigerated Foods 60,757 56,820 6.9
Jennie-O Turkey Store 39,106 34,851 12.2
Specialty Foods 21,490 18,141 18.5
All Other   12,437   8,043 54.6  
Total segment operating profit 173,842 148,283 17.2
Net interest and investment expense (income) 2,363 5,484 (56.9 )
General corporate expense 3,225 2,944 9.5
Noncontrolling interest   1,240   1,483 (16.4 )
Earnings before income taxes $ 169,494 $ 141,338 19.9  
 
 

YEAR TO DATE – 39 WEEKS ENDED

 

NET SALES

July 29, 2012

July 31, 2011

% Change

Grocery Products $ 830,649 $ 782,540 6.1
Refrigerated Foods 3,158,811 3,097,200 2.0
Jennie-O Turkey Store 1,120,028 1,058,279 5.8
Specialty Foods 677,043 603,371 12.2
All Other   273,955   249,801 9.7  
Total $ 6,060,486 $ 5,791,191 4.7  
 
 

OPERATING PROFIT

Grocery Products $ 127,003 $ 118,038 7.6
Refrigerated Foods 167,515 223,204 (24.9 )
Jennie-O Turkey Store 186,066 155,379 19.7
Specialty Foods 58,996 54,583 8.1
All Other   37,763   26,480 42.6  
Total segment operating profit 577,343 577,684 (0.1 )
Net interest and investment expense (income) 4,932 16,837 (70.7 )
General corporate expense 18,040 26,165 (31.1 )
Noncontrolling interest   3,226   3,815 (15.4 )
Earnings before income taxes $ 557,597 $ 538,497 3.5  
 
 
HORMEL FOODS CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
         

Thirteen Weeks Ended

Thirty-Nine Weeks Ended

7-29-2012

   

7-31-2011

7-29-2012

   

7-31-2011

 
Net sales

$

2,008,188

$ 1,910,592 $ 6,060,486 $ 5,791,191
 
Cost of products sold   1,701,132     1,612,737     5,080,414     4,793,104  
 
GROSS PROFIT: 307,056 297,855 980,072 998,087
 
Selling, general and administrative 145,022 156,595 446,183 461,892
 
Equity in earnings of affiliates   9,823     5,562     28,640     19,139  
 
OPERATING INCOME: 171,857 146,822 562,529 555,334
 
Other income & expenses:
Interest & investment income 844 139 4,772 2,552
Interest expense   (3,207 )   (5,623 )   (9,704 )   (19,389 )
 
EARNINGS BEFORE INCOME TAXES: 169,494 141,338 557,597 538,497
 
Provision for income taxes 57,087 41,374 186,922 177,796
(effective tax rate)   33.68 %   29.27 %   33.52 %   33.02 %
 
NET EARNINGS 112,407 99,964 370,675 360,701
Less: net earnings attributable to

noncontrolling interest

 

1,240

   

1,483

   

3,226

   

3,815

 
NET EARNINGS ATTRIBUTABLE TO

HORMEL FOODS CORPORATION

$

111,167

 

$

98,481

 

$

367,449

 

$

356,886

 
 
NET EARNINGS PER SHARE
Basic

$

.42

  $ .37   $ 1.39   $ 1.34  
Diluted

$

.41

  $ .36   $ 1.37   $ 1.31  
 
WEIGHTED AVG SHARES O/S
Basic 263,359 266,925 263,638 266,887
Diluted 268,746 272,759 269,138 272,449
 

DIVIDENDS DECLARED PER SHARE

$

.1500

  $ .1275   $ .4500   $ .3825  
 
 
HORMEL FOODS CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
       
 

July 29, 2012

October 30, 2011

(in thousands)

ASSETS

 
CURRENT ASSETS
Cash and cash equivalents

$

533,217

$ 463,130
Short-term marketable securities 77,013 76,077
Accounts receivable 474,425 461,110
Inventories 927,047 885,823
Income taxes receivable 18,799 24,423
Deferred income taxes 68,086 69,203
Prepaid expenses 12,865 10,048
Other current assets 5,806   8,417
 
TOTAL CURRENT ASSETS 2,117,258 1,998,231
 
INTANGIBLES 756,242 762,930
 
OTHER ASSETS 593,327 576,140
 
PROPERTY, PLANT & EQUIPMENT, NET   915,792   907,090
 
TOTAL ASSETS

$

4,382,619

$ 4,244,391
 
 
 
 

LIABILITIES AND SHAREHOLDERS’ INVESTMENT

 
TOTAL CURRENT LIABILITIES

$

676,710

$ 778,186
 
LONG-TERM DEBT – LESS CURRENT MATURITIES 250,000 250,000
 
OTHER LONG-TERM LIABILITIES 559,710 556,389
 
SHAREHOLDERS’ INVESTMENT 2,896,199   2,659,816
 
TOTAL LIAB. & SHAREHOLDERS’ INVESTMENT

$

4,382,619

$ 4,244,391
 
 
HORMEL FOODS CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
   

Thirty-Nine Weeks Ended

7-29-2012

   

7-31-2011

(in thousands)
OPERATING ACTIVITIES
Net earnings $ 370,675 $ 360,701
Depreciation and amortization of intangibles 88,627 92,927
Increase in working capital (171,992 ) (125,958 )
Other   (3,257 )   (8,245 )
NET CASH PROVIDED BY OPERATING ACTIVITIES 284,053 319,425
 
INVESTING ACTIVITIES
Net sale of securities - (20,000 )
Acquisitions of businesses/intangibles (168 ) (7,207 )
Net purchases of property / equipment (90,405 ) (52,757 )
Decrease in investments, equity in affiliates, and other assets   17,661     7,010  
NET CASH USED IN INVESTING ACTIVITIES (72,912 ) (72,954 )
 
FINANCING ACTIVITIES
Proceeds from long-term debt, net - (102,436 )
Dividends paid on common stock (112,683 ) (95,991 )
Share repurchase (50,692 ) (80,648 )
Other   21,511     59,983  
NET CASH USED IN FINANCING ACTIVITIES (141,864 ) (219,092 )
EFFECT OF EXCHANGE RATE CHANGES ON CASH   810     2,140  
INCREASE IN CASH AND CASH EQUIVALENTS 70,087 29,519
Cash and cash equivalents at beginning of year   463,130     467,845  
CASH AND CASH EQUIVALENTS AT END OF QUARTER $ 533,217   $ 497,364  
 




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