Hormel Foods Reports Fourth Quarter, Record Full Year Results

DIVIDENDS

Effective November 15, 2012, the Company paid its 337th consecutive quarterly dividend, at the annual rate of $.60.

CONFERENCE CALL

A conference call will be webcast at 8:00 a.m. CT on Tuesday, November 20, 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 the access code is 4573285. An audio replay is available by calling 800-406-7325 and entering access code 4573285. The audio replay will be available beginning at 10:30 a.m. CT on Tuesday, November 20, 2012, through 11:59 p.m. CT on November 27, 2012. The Webcast replay will be available at 10:30 a.m. CT, Tuesday, November 20, 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 (S&P) 500 Index, S&P Dividend Aristocrats for 2012, Maplecroft Climate Innovation Indexes, Global 1000 Sustainable Performance Leaders and was again named one of "The 100 Best Corporate Citizens” by Corporate Responsibility Magazine for the fourth year in a row. 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 32-38 in the company’s Form 10-Q for the quarter ended July 29, 2012, which was filed with the SEC on September 7, 2012, and can be accessed at www.hormelfoods.com under “Investors-SEC Filings.”

Segment Data
Fiscal 2012 Fourth Quarter Segment Operating Results (in Thousands)
			FOURTH QUARTER ENDED
NET SALES			October 28, 2012				October 30, 2011				% Change
Grocery Products			$	340,222			$	282,018			20.6
Refrigerated Foods				1,063,941				1,092,024			(2.6	)
Jennie-O Turkey Store				429,199				408,943			5.0
Specialty Foods				247,429				232,213			6.6
All Other				89,393				88,700			0.8
Total			$	2,170,184			$	2,103,898			3.2
OPERATING PROFIT
Grocery Products			$	54,248			$	44,518			21.9
Refrigerated Foods				61,150				69,420			(11.9	)
Jennie-O Turkey Store				52,232				49,561			5.4
Specialty Foods				24,093				22,322			7.9
All Other				12,126				9,770			24.1
Total segment operating profit				203,849				195,591			4.2
Net interest and investment expense (income)				1,407				6,611			(78.7	)
General corporate expense				3,389				9,827			(65.5	)
Noncontrolling interest				1,685				1,186			42.1
Earnings before income taxes			$	200,738			$	180,339			11.3
			YEAR TO DATE ENDED
NET SALES			October 28, 2012				October 30, 2011				% Change
Grocery Products			$	1,170,871			$	1,064,558			10.0
Refrigerated Foods				4,222,752				4,189,224			0.8
Jennie-O Turkey Store				1,549,227				1,467,222			5.6
Specialty Foods				924,472				835,584			10.6
All Other				363,348				338,501			7.3
Total			$	8,230,670			$	7,895,089			4.3
OPERATING PROFIT
Grocery Products			$	181,251			$	162,556			11.5
Refrigerated Foods				228,665				292,624			(21.9	)
Jennie-O Turkey Store				238,298				204,940			16.3
Specialty Foods				83,089				76,905			8.0
All Other				49,889				36,250			37.6
Total segment operating profit				781,192				773,275			1.0
Net interest and investment expense (income)				6,339				23,448			(73.0	)
General corporate expense				21,429				35,992			(40.5	)
Noncontrolling interest				4,911				5,001			(1.8	)
Earnings before income taxes			$	758,335			$	718,836			5.5

HORMEL FOODS CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
			Quarter Ended										Year Ended
			10-28-2012					10-30-2011					10-28-2012					10-30-2011
Net sales			$	2,170,184				$	2,103,898				$	8,230,670				$	7,895,089
Cost of products sold				1,818,405					1,767,872					6,898,819					6,560,976
GROSS PROFIT:				351,779					336,026					1,331,851					1,334,113
Selling, general and administrative				159,685					156,694					605,868					618,586
Equity in earnings of affiliates				10,051					7,618					38,691					26,757
OPERATING INCOME:				202,145					186,950					764,674					742,284
Other income & expenses:
Interest & investment income (loss)				1,748					(3,338	)				6,520					(786	)
Interest expense				(3,155	)				(3,273	)				(12,859	)				(22,662	)
EARNINGS BEFORE INCOME TAXES:				200,738					180,339					758,335					718,836
Provision for income taxes				66,452					61,844					253,374					239,640
(effective tax rate)				33.10	%				34.29	%				33.41	%				33.34	%
NET EARNINGS				134,286					118,495					504,961					479,196
Less: Net earnings attributable to noncontrolling interest				1,685					1,186					4,911					5,001
NET EARNINGS ATTRIBUTABLE TO HORMEL FOODS CORPORATION			$	132,601				$	117,309				$	500,050				$	474,195
NET EARNINGS PER SHARE
Basic			$	.50				$	.44				$	1.90				$	1.78
Diluted			$	.49				$	.43				$	1.86				$	1.74
WEIGHTED AVG SHARES O/S
Basic				262,949					264,913					263,466					266,394
Diluted				268,149					270,314					268,891					271,915
DIVIDENDS DECLARED PER SHARE			$	.1500				$	.1275				$	.6000				$	.5100

HORMEL FOODS CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
			October 28, 2012				October 30, 2011
			(In Thousands)
ASSETS
CURRENT ASSETS
Cash and cash equivalents			$	682,388			$	463,130
Short-term marketable securities				77,387				76,077
Accounts receivable				507,041				461,110
Inventories				950,521				885,823
Income taxes receivable				16,460				24,423
Deferred income taxes				68,560				69,203
Prepaid expenses				12,772				10,048
Other current assets				5,555				8,417
TOTAL CURRENT ASSETS				2,320,684				1,998,231
INTANGIBLES				753,947				762,930
OTHER ASSETS				564,855				576,140
PROPERTY, PLANT & EQUIPMENT, NET				924,480				907,090
TOTAL ASSETS			$	4,563,966			$	4,244,391
LIABILITIES AND SHAREHOLDERS' INVESTMENT
TOTAL CURRENT LIABILITIES			$	829,084			$	778,186
LONG-TERM DEBT – LESS CURRENT MATURITIES				250,000				250,000
OTHER LONG-TERM LIABILITIES				659,957				556,389
SHAREHOLDERS’ INVESTMENT				2,824,925				2,659,816
TOTAL LIAB. & SHAREHOLDERS’ INVESTMENT			$	4,563,966			$	4,244,391

HORMEL FOODS CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
			Year Ended
			10-28-2012					10-30-2011
			(In Thousands)
OPERATING ACTIVITIES
Net earnings			$	504,961				$	479,196
Depreciation and amortization of intangibles				119,494					124,165
Increase in working capital				(113,938	)				(102,781	)
Other				7,264					(10,101	)
NET CASH PROVIDED BY OPERATING ACTIVITIES				517,781					490,479
INVESTING ACTIVITIES
Net purchase of securities				-					(20,000	)
Acquisitions of businesses/intangibles				(168	)				(7,207	)
Net purchases of property / equipment				(127,739	)				(92,525	)
Decrease (increase) in investments, equity in affiliates, and other assets				21,143					(51,253	)
NET CASH USED IN INVESTING ACTIVITIES				(106,764	)				(170,985	)
FINANCING ACTIVITIES
(Payments on) Proceeds from long-term debt, net				-					(102,436	)
Dividends paid on common stock				(152,204	)				(129,975	)
Share repurchase				(61,366	)				(152,930	)
Other				21,811					61,132
NET CASH USED IN FINANCING ACTIVITIES				(191,759	)				(324,209	)
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS				219,258					(4,715	)
Cash and cash equivalents at beginning of year				463,130					467,845
CASH AND CASH EQUIVALENTS AT END OF YEAR			$	682,388				$	463,130

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