AUSTIN, Minn., May 17 /PRNewswire/ --
Hormel Foods Corporation (NYSE: HRL), a multinational marketer of
consumer-branded food and meat products, today announced record sales and
earnings for the quarter ended April 28, 2001.
(PHOTO: http://www.newscom.com/cgi-bin/prnh/20010509/HORMELLOGO )
Sales for the quarter were $1,018,406,000 versus $879,023,000 in the
year-ago period, an increase of 16 percent. Tonnage volume for the second
quarter increased 10 percent.
Net earnings for the fiscal second quarter were $38,894,000, or $.28 per
share, compared to $36,254,000, or $.26 per share, for the same period last
year. In spite of the expense related to a three-week labor strike in
Rochelle, Ill., earnings met the First Call analysts' consensus estimate.
For the six months ended April 28, sales totaled $1,965,899,000, up from
$1,782,936,000 in the prior-year six-month period. Earnings were $80,426,000,
or $.58 per share, for the six months, versus $80,102,000, or $.56 per share,
for the same year-ago period.
"Overall, sales for the second quarter were up, even before factoring in
the newly acquired volume from The Turkey Store," said Joel W. Johnson,
chairman of the board, president and chief executive officer. "It was a busy
quarter for Hormel Foods. We completed two acquisitions -- The Turkey Store
and Diamond Crystal Brands Nutritional Products -- and continued our intense
focus on promoting our branded products across all segments, which we are
doing with much success. Branded, value-added products continue to outpace
the other lines within our overall portfolio. Clearly, we have the right
strategies in place."
Refrigerated Foods
Refrigerated Foods, which includes Meat Products and Foodservice, was one
of the top performing business channels for the quarter.
Meat Products, which serves retail outlets including grocery stores and
large discount chains, saw solid tonnage volume growth of 6 percent over the
same quarter last year. Always Tender fresh pork had an excellent quarter
with record sales. Results were also driven by an especially strong Easter
holiday ham season and growth in the company's pre-packaged processed meats
like Black Label bacon, Hormel pepperoni and deli products. The fully cooked
entree and flavored meat product lines continue to appeal to time-pressed
consumers and are performing very well. Hormel Foods also experienced
significant deli business expansion with major retailers.
Foodservice, which serves restaurants and other away-from-home venues, had
sales tonnage slightly above last year. The softening U.S. economy, with
reduced personal and business related travel, appears to have slowed Hormel
Foods' growth in this important business channel. However, margins improved
and several product lines posted exceptional results. Austin Blues BBQ, which
was introduced just over a year ago, saw a 75 percent gain in tonnage volume
from first quarter 2001. Bread Ready sliced meats showed solid results and
Always Tender pork products continued as a strong category, with double-digit
increases over the same period last year. Old Smokehouse bacon, Applewood
smoked bacon and Fast 'N Easy precooked breakfast meats also experienced
double-digit gains, reinforcing our brand-driven, value-added strategies.
Grocery Products
Grocery Products business, which includes well-known brands such as SPAM
luncheon meat, Hormel chili and Kid's Kitchen microwave meals, posted sales
dollars for the quarter 1 percent ahead of last year. Tonnage volume was down
3 percent. Despite slowed growth in the quarter, Hormel Foods continues as
the leading marketer of canned meats and prepared foods. The company's new
SPAM oven roasted turkey, introduced in August 2000, was embraced by consumers
and has already achieved a 13.5 percent dollar share of the entire canned
luncheon meat category. It has also emerged as the number two selling item in
the category. Carapelli olive oil continues to make progress in market share
gains that position it as the number three brand.
During the quarter, Hormel Foods launched a number of Herdez products as
part of the company's authentic Mexican strategy, and expanded distribution of
Herdez and other products in the ethnic line to more retailers throughout the
country.
Jennie-O Turkey Store
A major highlight of the quarter was the closing of The Turkey Store
acquisition that, together with Jennie-O Foods, creates the largest turkey
marketer in the world, and gives Hormel Foods an 18.5 percent share of the
U.S. turkey market. The integration of this business has gone very well. For
the quarter, post-acquisition sales tonnage is up 36 percent and sales dollars
are up 50 percent. With the different brand strengths coming together,
Jennie-O Turkey Store has one of the best portfolios of value-added turkey
products in the industry.
In line with consumers' demand for ease and convenience, Jennie-O Turkey
Store continues its efforts to make turkey an everyday meal occasion and has
introduced new products like Thanksgiving Tonight premium boneless turkey
breasts, as well as a line of marinated breast items.
Hormel Foods International
While Hormel Foods International experienced strong tonnage volume for the
quarter, up 45 percent from the prior-year quarter, results were dampened by
international raw material costs and a strong dollar.
Key performers for the quarter included Hormel pizza toppings, Hormel
pre-cooked bacon, SPAM luncheon meat and Hormel chili. Stagg chili is seeing
double-digit growth in the United Kingdom, Canada and Australia compared to
the prior-year quarter.
Hormel HealthLabs
Hormel HealthLabs, serving hospitals, nursing homes and other health
facilities, experienced 20 percent growth for the quarter in tonnage. Because
Hormel Foods closed on the acquisition of the assets of Diamond Crystal Brand
Nutritional Products (DCBNP) on April 27, the company did not experience any
impact from the acquisition in the second quarter. DCBNP's extensive product
lines and experienced sales staff are now integrated into the Hormel
HealthLabs offering, and the newly expanded segment is positioned as second in
market share with favorable growth prospects in the institutional health care
market.
About Hormel Foods Corporation
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
enjoys a strong reputation among consumers, retail grocers, foodservice and
industrial consumers for products regarded for quality, taste, nutrition,
convenience and value. (Items listed in bold throughout this release represent
trademarks owned or licensed by Hormel Foods Corporation or its subsidiaries.)
Forward-Looking Statements
This press release contains forward-looking information based on
management's current views and assumptions. Actual events may differ. Please
refer to the Cautionary Statement Relevant to Forward-Looking Statements and
Information that appears on Exhibit 99 of the company's Annual Report on Form
10-K for the fiscal year ended October 28, 2000, which can be accessed at
http://www.hormel.com
HORMEL FOODS CORPORATION
CONSOLIDATED CONDENSED STATEMENTS OF EARNINGS
(In thousands, except per share amounts - unaudited)
Thirteen Weeks Ended Twenty-Six Weeks Ended
April 28, 2001 April 29, 2000 April 28, 2001 April 29, 2000
Net Sales $1,018,406 $879,023 $1,965,899 $1,782,936
Earnings before
Income Tax 61,026 56,644 126,173 125,190
Provision for
Income Tax
22,132 20,390 45,747 45,088
Net Earnings 38,894 36,254 80,426 80,102
Earnings Per Share $0.28 $0.26 $0.58 $0.56
CONSOLIDATED CONDENSED BALANCE SHEET
(In thousands - unaudited)
April 28, April 29,
2001 2000
Current Assets $726,553 $724,269
Property, Plant and Equipment, Net 695,912 521,951
Other 629,025 385,660
Total Assets $2,051,490 $1,631,880
Current Liabilities 378,669 330,954
Long-term Debt 457,928 175,233
Other Long-term Liabilities 273,753 269,377
Equity 941,140 856,316
Total Liabilities $2,051,490 $1,631,880
SOURCE Hormel Foods Corporation
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CONTACT:
Investors, Fred Halvin, 507-437-5007,
fdhalvin@hormel.com , or Media, Julie Craven, 507-437-5345,
jhcraven@hormel.com , both of Hormel Foods Corporation
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