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Hormel Foods Reports Fourth Quarter, Record Full Year Results

Stocks in this article: HRL

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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