Hormel Foods Reports First Quarter Results.AUSTIN, Minn. -- Hormel Foods Corporation (NYSE NYSE See: New York Stock Exchange :HRL HRL Hughes Research Laboratories HRL Harlingen, TX, USA (Airport Code) HRL Hunter River Lancers HRL Health Research Laboratory HRL Horizontal Reference Line HRL Home Run League (adult Wiffle ball league) ) today reported its performance for the fiscal 2007 first quarter. HIGHLIGHTS First Quarter * Diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. EPS (Encapsulated PostScript) A PostScript file format used to transfer a graphic image between applications and platforms. EPS files contain PostScript code as well as an optional preview image in TIFF, WMF, PICT or EPSI, the latter being an ASCII-only format. of $.54, up 8 percent from $.50 per share in 2006 * Dollar sales of $1.50 billion increased 6 percent from 2006 (up 5 percent excluding acquisitions) * Volume up 6 percent compared to last year (up 5 percent excluding acquisitions) * Grocery Products operating profit Operating profit (or loss) Revenue from a firm's regular activities less costs and expenses and before income deductions. operating profit See operating income. up 1 percent; volume up 1 percent (down 3 percent excluding acquisitions); dollar sales up 1 percent (down 4 percent excluding acquisitions) * Refrigerated re·frig·er·ate tr.v. re·frig·er·at·ed, re·frig·er·at·ing, re·frig·er·ates 1. To cool or chill (a substance). 2. To preserve (food) by chilling. Foods operating profit up 8 percent; volume up 4 percent (up 3 percent excluding acquisitions); dollar sales up 5 percent (up 4 percent excluding acquisitions) * Jennie-O Turkey Store operating profit down 25 percent; volume up 1 percent; dollar sales up 4 percent * Specialty Foods operating profit up 75 percent; volume up 18 percent (up 16 percent excluding acquisitions); dollar sales up 17 percent (up 16 percent excluding acquisitions) * All Other operating profit up 65 percent; volume up 35 percent; dollar sales up 33 percent * Company completes Provena acquisition in the quarter * Dan's Prize moved from All Other segment to the Refrigerated Foods segment (prior year reflects change) The company reported fiscal 2007 first quarter net earnings of $75.3 million, up 9 percent from earnings of $69.3 million a year earlier. Diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of for the quarter were $.54 this year compared to $.50 per share last year and sales totaled $1.50 billion, up from $1.42 billion in fiscal 2006. COMMENTARY "It was a solid quarter for Hormel Foods. We were able to grow both sales and profits in the first quarter amidst a challenging operating environment In computing, an operating environment is the environment in which users run programs, whether in a command line interface, such as in MS-DOS or the Unix shell, or in a graphical user interface, such as in the Macintosh operating system. ," said Jeffrey M. Ettinger, chairman of the board, president and chief executive officer. "The Specialty Foods segment and our International business reported another outstanding quarter," Ettinger continued, "and our Refrigerated Foods segment delivered top and bottom line growth by continuing to build its value-added portfolio. Grocery Products, however, delivered lower than expected top and bottom line results, and Jennie-O Turkey Store reported a significant decline in earnings as a result of a sharp run-up in grain costs. Overall, I am pleased with our continued success in marketing innovative products and in growing our value-added business throughout our various segments," Ettinger concluded. SEGMENT OPERATING HIGHLIGHTS - FIRST QUARTER Grocery Products (14% of Net Sales Net Sales The amount a seller receives from the buyer after costs associated with the sale are deducted. Notes: This amount is calculated by subtracting the following items from gross sales: merchandise returned for credit, allowances for damaged or missing goods, freight , 26% of Total Operating Profit) The Grocery Products segment reported a 1 percent increase in both net sales and operating profit compared to last year. The microwave tray line of products continues to gain momentum with higher net sales and increasing household penetration indicated during the quarter. With additional production capacity now available, we are increasing our promotional and marketing support for this product line. HORMEL bacon bits Bacon bits are condiments frequently used to enhance the flavor of salad or potatoes. They are a common element of salad bars. Bacon bits are made of either small, crumbled pieces of cooked bacon or, more frequently, textured vegetable protein artificially flavored to resemble also reported double-digit growth in the quarter. Lower sales were reported for the SPAM family of products, DINTY MOORE canned products and CHI-CHI'S sauces. Increased marketing activity, along with our continued efforts to contemporize con·tem·po·rize v. con·tem·po·rized, con·tem·po·riz·ing, con·tem·po·riz·es v.tr. 1. To regard or place in the same time period; synchronize. 2. these product lines, is planned for the remainder of the year to generate improved net sales and operating profit. There was good momentum in this segment as we ended the first quarter. Refrigerated Foods (53% of Net Sales, 32% of Total Operating Profit) Strong results for value-added products in the Refrigerated Foods segment led to an 8 percent increase in operating profit for the quarter. Both the Foodservice and Meat Products (retail) business units contributed to the increase. Retail products exhibiting double-digit growth include HORMEL sliced pepperoni, DILUSSO DELI COMPANY products and HORMEL party trays. Our NATURAL CHOICE pre-sliced deli sandwich meats continue to gain distribution. We have expanded the NATURAL CHOICE brand into the service deli and retail ham categories. Foodservice products posting strong results include ALWAYS TENDER premium pork, AUSTIN BLUES BBQ BBQ barbecue and Applewood n. 1. wood of any of various apple trees of the genus Malus. Noun 1. applewood - wood of any of various apple trees of the genus Malus apple tree - any tree of the genus Malus especially those bearing firm rounded edible fruits smoked bacon. Our Dan's Prize business, which was moved into the segment in fiscal year 2007, also reported strong results for the quarter. Jennie-O Turkey Store (18% of Net Sales, 23% of Total Operating Profit) Operating profits for the Jennie-O Turkey Store segment declined compared to last year as a result of higher input costs. Higher grain markets and costs associated with outside meat purchases contributed to the decline in profitability. Helping to offset these costs is continued growth in value-added products. Value-added net sales increased 13 percent for the quarter compared to last year with increases shown in each channel (retail, deli and foodservice). Products such as turkey burgers Burgers are hamburgers. Burgers may also refer to:
Specialty Foods (12% of Net Sales, 14% of Total Operating Profit) Favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. results in the Specialty Foods segment continued again this quarter with operating profits up 75 percent compared to first quarter last year. Each of the three businesses in the segment, including Diamond Crystal Brands, Hormel Specialty Products and Century Foods International, reported double-digit increases in operating profits for the quarter. Products that drove growth include liquid portion packets, blended nutritional products and ready-to-drink items. All Other (3% of Net Sales, 5% of Total Operating Profit) The All Other segment, which includes the International business unit, reported strong results for the quarter with net sales and operating profits up 33 percent and 65 percent, respectively. Results were driven by the continuation of strong export sales, particularly in STAGG chili (language) CHILI - D.L. Abt. A language for systems programming, based on ALGOL 60 with extensions for structures and type declarations. ["CHILI, An Algorithmic Language for Systems Programming", CHI-1014, Chi Corp, Sep 1975] and foodservice products. The China operations continue to experience robust growth in net sales and tonnage TONNAGE, mar. law. The capacity of a ship or vessel. 2. The act of congress of March 2, 1799, s. 64, 1 Story's L. U. S. 630, directs that to ascertain the tonnage of any ship or vessel, the surveyor, &c. while operating profits have been constrained con·strain tr.v. con·strained, con·strain·ing, con·strains 1. To compel by physical, moral, or circumstantial force; oblige: felt constrained to object. See Synonyms at force. 2. by higher hog input costs. OUTLOOK "The sharp rise in grain markets has added a new dynamic to our business and to the food industry in general. We anticipate higher grain costs will continue to burden our turkey operation and we are working hard to find ways to offset this extra expense, including through advances in pricing. At this time, we are maintaining our fiscal 2007 guidance of $2.15 - $2.25. Our guidance range for the second quarter of 2007 is $0.47 - $0.53 per share," Ettinger concluded. DIVIDENDS Effective Feb. 15, 2007, the company paid its 314th consecutive quarterly dividend. The annual rate is $.60 per share. CONFERENCE CALL A conference call will be Webcast at 10:30 a.m. CT on Friday, Feb. 16, 2007. Access is available at www.hormel.com. If you do not have Internet access See how to access the Internet. and want to listen to an audio replay, call 800-642-1687 in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. and 706-645-9291 internationally and enter conference call ID 8264168. The Webcast replay will be available at 12:00 (noon) CT, Feb. 16, and archived for one year. The audio replay will be available beginning at 11:30 a.m. CT on Friday, Feb. 16, 2007, through 11:00 p.m. CT on March 16, 2007. 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 leverages its extensive expertise, innovation and high competencies in pork and turkey processing and marketing to bring quality, value-added brands to the global marketplace. For each of the past eight years, Hormel Foods has been named one of "The Best Big Companies in America" by Forbes magazine. 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 www.hormel.com. FORWARD-LOOKING STATEMENTS forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. 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 that appears on pages 33-37 in the company's Annual Report for the fiscal year ended Oct. 29, 2006, which can be accessed at www.hormel.com under "Investor-Annual Report." Segment Data Fiscal 2007 First Quarter Segment Operating Results (in Thousands) [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] |
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