AUSTIN, Minn., Nov. 24, 2020 /PRNewswire/ -- Hormel Foods
Corporation (NYSE: HRL), a leading global branded food company,
today reported results for the fourth quarter of fiscal 2020. All
comparisons are to the fourth quarter of fiscal 2019 unless
otherwise noted.
The impact of the Sadler's Smokehouse acquisition (March 2020) is excluded in the presentation of
the fourth quarter of fiscal 2020 non-GAAP measures of organic
volume and organic net sales. The impact of the CytoSport
divestiture last year is excluded from prior year adjusted diluted
earnings per share. Operating free cash flow is also presented as a
non-GAAP metric.
EXECUTIVE SUMMARY - FISCAL 2020
- Volume of 4.8 billion lbs., up 1%; organic volume1
up 2%
- Net sales of $9.6 billion, up 1%;
organic net sales1 up 2%
- Operating income of $1.1 billion,
down 8%
- Operating margin of 11.5% compared to 12.6% last year
- Diluted earnings per share of $1.66, down 8%; down 2% to adjusted diluted
earnings per share1 last year
- Cash flow from operations of $1.1
billion, up 22%
- Operating free cash flow1 of $0.8 billion, up 21%
EXECUTIVE SUMMARY - FOURTH QUARTER
- Volume of 1.2 billion lbs., down 2%; organic volume1
down 3%
- Net sales of $2.4 billion, down
3%; organic net sales1 down 4%
- Operating margin of 11.4% compared to 12.8% last year
- Effective tax rate of 15.9% compared to 21.0% last year
- Diluted earnings per share of $0.43, down 9% from $0.47
EXECUTIVE COMMENTARY
"I'm proud of how our team overcame multiple challenges to deliver
record sales this year," said Jim
Snee, chairman of the board, president and chief executive
officer. "We grew sales in all four segments, which speaks to the
strategic balance we have built into our company. In several of our
domestic businesses, strong demand for our products exceeded the
available supply. From a bottom-line perspective, our experienced
leadership team managed through the incremental supply chain costs
we incurred related to the pandemic, which was the largest driver
of our earnings decline," Snee said.
"For the quarter, growth in our International segment was
incredibly strong, particularly in China, where we drove balanced growth between
the retail and foodservice channels. International sales of
SPAM® luncheon meat and SKIPPY®
peanut butter remained robust," Snee said. "We continued to see a
high level of growth for many retail and deli brands, including
Applegate®, Columbus®,
Jennie-O®, Hormel® Black
Label®, Herdez® and
SKIPPY®. Consistent with industry trends, our
foodservice business showed declines this past quarter. As a leader
in the industry, we will continue to support the distributor and
operator community during this difficult time."
"I am optimistic about generating sales and earnings growth in
fiscal 2021. Our One Supply Chain team delivered steady production
improvements throughout the quarter, and our production capacity
for key product lines is structurally higher as we move into next
year. The balance we have across the retail, deli, foodservice and
international channels gives us confidence in our ability to
perform well in many different economic scenarios," Snee said.
"This most recent surge of COVID-19 cases in communities does
create a level of uncertainty in a number of areas, notably labor
availability, customer demand and raw material markets. Our company
has adjusted to these conditions and will continue to invest to
meet the needs of our team members, customers, consumers and
operators."
STRATEGIC INVESTMENTS
"We opened our new Burke pizza toppings plant expansion this
quarter, which will provide much-needed capacity for our pizza
toppings business," Snee said. "We are also on track to open our
new state-of-the-art dry sausage production facility for
Columbus® charcuterie products during the first
half of the year."
"Finally, we are investing in a major capacity expansion for our
pepperoni business," Snee said. "Even before the pandemic, we
needed more capacity to support our retail and foodservice
businesses. This expansion will give us a long runway to continue
growing in this important category."
COVID-19 RESPONSE
"As we enter fiscal 2021, we are witnessing another dramatic
increase in COVID-19 cases across the nation," Snee said. "Employee
safety remains our top priority, and we are doubling down on our
awareness initiative, KEEP COVID OUT!, which reinforces the
importance of taking preventive measures at our production
facilities and in our communities where we work and live."
For the full year, the company absorbed over $80 million in incremental supply chain costs
primarily related to lower production volumes, employee bonuses and
enhanced safety measures in its production facilities. The company
estimates most of the incremental supply chain costs are temporary
and can be minimized after the pandemic subsides.
DIVIDENDS
"We announced a five percent increase to our annual dividend,
making the new dividend $0.98 per
share," Snee said. "This is the
55th consecutive year in which we've increased our
dividend, which is a testament to the strong and consistent
performance our company continues to deliver."
Effective Nov. 16, 2020, the
company paid its 369th consecutive quarterly
dividend at the annual rate of $0.93
per share.
SEGMENT HIGHLIGHTS – FOURTH QUARTER
Refrigerated Foods
- Volume down 4%; organic volume1 down 5%
- Net sales down 5%; organic net sales1 down 7%
- Segment profit down 17%
Retail and deli sales growth from brands such as
Applegate®, Hormel® Black
Label® and
Columbus®, in addition to the impact
from the Sadler's Smokehouse acquisition did not offset a
significant decline in foodservice sales. Sales were impacted by
production limitations due to the COVID-19 pandemic and lower
inventory levels. The decline in segment profit was due to lower
foodservice sales, incremental supply chain costs related to the
COVID-19 pandemic and a decrease in commodity profits.
Grocery Products
- Volume up 1%
- Net sales down 1%
- Segment profit up 1%
Demand for center store brands remained strong, led by growth
from brands such as SKIPPY®,
Herdez® and Hormel®
Compleats®. Sales were impacted by lower inventory
levels and production limitations related to the COVID-19 pandemic
on certain center store products and lower sales for MegaMex
foodservice items. Segment profit increased as improved results
across the nut butters portfolio more than offset increased freight
expense and lower earnings from our MegaMex foodservice
business.
Jennie-O Turkey Store
- Volume down 2%
- Net sales down 6%
- Segment profit down 21%
Volume and sales growth of Jennie-O® lean
ground products and whole birds were exceptionally strong. Reduced
demand for foodservice and commodity products led to the overall
decline in sales. Lower foodservice earnings and increased supply
chain costs related to the COVID-19 pandemic drove the significant
decline in segment profit.
International & Other
- Volume down 1%
- Net sales up 8%
- Segment profit up 55%
Sales increased due to strong worldwide demand for
SPAM® luncheon meat and growth in China. Results in China were positively impacted by strong
demand for branded retail items, such as SKIPPY®
peanut butter, and an accelerating recovery in the foodservice
channel. The significant increase in segment profit was due to
improved results in China, higher
income from our partners in the
Philippines, South Korea
and Europe, and branded export
growth.
CHANNEL HIGHLIGHTS – FOURTH QUARTER
In an effort to add an increased level of disclosure and clarity to
the nature, timing and uncertainty of our revenue, net sales have
been disaggregated into sales channels, which can also be found in
the upcoming Form 10-K. The ongoing COVID-19 pandemic and
subsequent changes in consumer behavior drove higher retail sales
in each of the company's segments. Overall deli channel sales
increased even as some categories declined. Foodservice net sales
continued to show declines, similar to prior quarters.
International sales increased primarily due to sales increases in
China.
- U.S. retail net sales up 7%
- U.S. deli net sales up 1%
- U.S. foodservice net sales down 23%
- International net sales up 2%
SELECTED FINANCIAL DETAILS - FISCAL 2020
Income Statement
- Operating margin for the full year was 11.5% compared to 12.6%.
The company was negatively impacted by higher operating costs in
2020 due to the impact of the COVID-19 pandemic.
- Selling, general and administrative expenses increased by 5%.
The increase was primarily related to one-time adjustments in 2019
related to the CytoSport sale.
- Advertising investments were $124
million compared to $131
million last year.
- The effective tax rate was 18.5% compared to 19.1% last
year.
- The fourth quarter and full year of fiscal 2021 contain an
extra week as compared to fiscal 2020.
Cash Flow Statement
- Cash flow from operations was $1,128
million, up 22% compared to last year. The increase was
primarily due to effective management of working capital.
- The company acquired the Sadler's Smokehouse business for
$271 million during the year.
- Dividends paid to shareholders were $487
million. The company paid its 369th consecutive
quarterly dividend on Nov. 16 at the
annual rate of $0.93 per share, an
11% increase over the prior year.
- Capital expenditures were $368
million. The company's target for capital expenditures in
fiscal 2021 is $350 million. Large
projects include a new dry sausage facility in Nebraska, a pepperoni capacity expansion
project, Project Orion and many other projects to support growth of
branded products.
- Share repurchases totaled $12
million, representing 0.3 million shares purchased.
- Depreciation and amortization expense for the full year was
$206 million. Depreciation and
amortization expense for fiscal 2021 is expected to be
approximately $210 million.
Balance Sheet
- The company is in a strong financial position with ample
liquidity, a conservative level of debt and consistent cash
flows.
- Cash on hand increased to $1,714
million from $673 million at
the beginning of the year primarily due to the cash proceeds from
the $1.0 billion debt offering during
the year.
- Total long-term debt is $1,304
million compared to $250
million at the beginning of the year.
- Working capital increased to $2,075
million from $1,256 million at
the beginning of the year, primarily related to a higher cash
balance from the debt offering during the year.
PRESENTATION
A conference call will be webcast at 9 a.m.
CST on Nov. 24, 2020. Access
is available at www.hormelfoods.com by clicking on "Investors." The
call will also be available via telephone by dialing 888-317-6003
and providing the access code 5831860. An audio replay is available
by going to www.hormelfoods.com. The webcast replay will be
available at noon CST, Nov. 24, 2020, and will remain on the website for
one year.
ABOUT HORMEL FOODS - Inspired People. Inspired Food.™
Hormel Foods Corporation, based in Austin, Minn., is a global branded food
company with over $9 billion in
annual revenue across more than 80 countries worldwide. Its brands
include SKIPPY®, SPAM®, Hormel®
Natural Choice®, Applegate®,
Justin's®, Wholly®, Hormel® Black
Label®, Columbus® and more than 30 other
beloved brands. The company is a member of the S&P 500 Index
and the S&P 500 Dividend Aristocrats, was named on the "Global
2000 World's Best Employers" list by Forbes magazine for three straight years, is
one of Fortune magazine's most admired companies, has appeared on
Corporate Responsibility Magazine's "The 100 Best Corporate
Citizens" list for 12 years in a row, and has received numerous
other awards and accolades for its corporate responsibility and
community service efforts. The company lives by its purpose
statement - Inspired People. Inspired Food.™ - to bring some
of the world's most trusted and iconic brands to tables across the
globe. For more information, visit 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 statements
regarding "Risk Factors" and "Forward-Looking Statements" that
appear on pages 34-41 in the company's Form 10-Q for the fiscal
quarter ended Jul. 26, 2020, which
can be accessed at hormelfoods.com in the "Investors" section.
Note: Due to rounding, numbers presented throughout this
news release may not sum precisely to the totals provided, and
percentages may not precisely reflect the absolute figures.
1 COMPARISON OF U.S. GAAP TO
NON-GAAP FINANCIAL MEASUREMENTS
The non-GAAP adjusted financial measurement of adjusted diluted
earnings per share is presented to provide investors with
additional information to facilitate the comparison of past and
present operations. Adjusted diluted earnings per share
excludes the impact associated with the divestiture of the
CytoSport business in fiscal 2019.
The non-GAAP adjusted financial measurements of organic net
sales and organic volume are presented to provide investors with
additional information to facilitate the comparison of past and
present operations. Organic net sales and organic volume are
defined as net sales and volume, excluding the impact of
acquisitions and divestitures. Organic net sales and organic
volume exclude the impacts of the Sadler's Smokehouse acquisition
(March 2020) in the Refrigerated
Foods segment and the CytoSport divestiture (April 2019) in the Grocery Products, and
International & Other segments.
The company defines the non-GAAP adjusted financial measurement
of operating free cash flow as cash provided by or used in
operating activities from continuing operations (a GAAP measure)
less capital expenditures. The company views operating free cash
flow as an important measure, because it is one factor in
evaluating the amount of cash available for discretionary
investments.
The company believes these non-GAAP financial measurements
provide useful information to investors, because they are the
measurements used to evaluate performance on a comparable
year-over-year basis. Non-GAAP measurements are not intended
to be a substitute for U.S. GAAP measurements in
analyzing financial performance. These non-GAAP measurements
are not in accordance with generally accepted accounting principles
and may be different from non-GAAP measures used by other
companies.
The tables below show the calculations to reconcile from the
GAAP measures to the non-GAAP adjusted measures.
RECONCILIATION OF
NON-GAAP MEASURES
|
(In thousands,
except per share amounts)
|
|
|
|
|
|
|
|
|
|
|
ADJUSTED EARNINGS
(NON-GAAP)
|
|
|
|
|
|
|
|
|
|
|
|
Fifty-Two Weeks
Ended
|
|
|
October 25,
2020
|
|
October 27,
2019
|
|
|
|
GAAP
Earnings
|
|
GAAP
Earnings
|
|
CytoSport
Business
Impact
|
|
Non-GAAP
Adjusted
Earnings
|
|
%
Change
|
TOTAL
SEGMENT PROFIT
|
$
|
1,166,782
|
|
|
$
|
1,214,735
|
|
|
$
|
(26,808)
|
|
|
$
|
1,187,927
|
|
|
(1.8)
|
|
Net unallocated
expense
|
52,307
|
|
|
5,362
|
|
|
16,469
|
|
|
21,831
|
|
|
139.6
|
|
Noncontrolling
interest
|
272
|
|
|
342
|
|
|
—
|
|
|
342
|
|
|
(20.5)
|
|
EARNINGS
BEFORE INCOME TAX
|
$
|
1,114,747
|
|
|
$
|
1,209,715
|
|
|
$
|
(43,277)
|
|
|
$
|
1,166,438
|
|
|
(4.4)
|
|
Provision for income
taxes
|
206,393
|
|
|
230,567
|
|
|
12,656
|
|
|
243,223
|
|
|
(15.1)
|
|
NET
EARNINGS
|
$
|
908,354
|
|
|
$
|
979,148
|
|
|
$
|
(55,933)
|
|
|
$
|
923,215
|
|
|
(1.6)
|
|
Less: Net earnings
attributable to noncontrolling interest
|
272
|
|
|
342
|
|
|
—
|
|
|
342
|
|
|
(20.4)
|
|
NET
EARNINGS ATTRIBUTABLE TO HORMEL FOODS CORPORATION
|
$
|
908,082
|
|
|
$
|
978,806
|
|
|
$
|
(55,933)
|
|
|
$
|
922,873
|
|
|
(1.6)
|
|
|
|
|
|
|
|
|
|
|
|
DILUTED
EARNINGS PER SHARE
|
$
|
1.66
|
|
|
$
|
1.80
|
|
|
$
|
(0.10)
|
|
|
$
|
1.70
|
|
|
(2.4)
|
|
OPERATING FREE
CASH FLOW (NON-GAAP)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Thirteen
Weeks Ended
|
|
|
|
Fifty-Two Weeks
Ended
|
|
|
|
October 25,
2020
|
|
October 27,
2019
|
|
%
Change
|
|
October 25,
2020
|
|
October 27,
2019
|
|
%
Change
|
Net cash provided by
operating activities
|
$
|
249,938
|
|
|
$
|
350,084
|
|
|
|
|
$
|
1,128,024
|
|
|
$
|
922,996
|
|
|
|
Purchases of property
and equipment
|
(140,671)
|
|
|
(139,607)
|
|
|
|
|
(367,501)
|
|
|
(293,838)
|
|
|
|
TOTAL
|
$
|
109,267
|
|
|
$
|
210,477
|
|
|
(48.1)
|
%
|
|
$
|
760,523
|
|
|
$
|
629,158
|
|
|
20.9
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ORGANIC VOLUME AND
NET SALES (NON-GAAP)
|
|
|
|
|
|
|
|
|
|
|
|
Thirteen Weeks
Ended
|
|
|
|
October 25,
2020
|
|
October 27,
2019
|
|
|
VOLUME
(LBS.)
|
Reported
GAAP
|
Acquisitions
|
Organic
(Non-GAAP)
|
|
Reported
GAAP
|
Divestitures
|
Organic
(Non-GAAP)
|
|
Non-GAAP
% Change
|
Grocery
Products
|
317,743
|
|
—
|
|
317,743
|
|
|
313,489
|
|
—
|
|
313,489
|
|
|
1.4
|
|
Refrigerated
Foods
|
572,873
|
|
(4,772)
|
|
568,101
|
|
|
598,474
|
|
—
|
|
598,474
|
|
|
(5.1)
|
|
Jennie-O Turkey
Store
|
237,435
|
|
—
|
|
237,435
|
|
|
242,421
|
|
—
|
|
242,421
|
|
|
(2.1)
|
|
International &
Other
|
81,383
|
|
—
|
|
81,383
|
|
|
82,493
|
|
—
|
|
82,493
|
|
|
(1.3)
|
|
TOTAL
|
1,209,434
|
|
(4,772)
|
|
1,204,662
|
|
|
1,236,877
|
|
—
|
|
1,236,877
|
|
|
(2.6)
|
|
NET
SALES
|
|
|
|
|
|
|
|
|
|
Grocery
Products
|
$
|
580,617
|
|
$
|
—
|
|
$
|
580,617
|
|
|
$
|
584,085
|
|
$
|
—
|
|
$
|
584,085
|
|
|
(0.6)
|
|
Refrigerated
Foods
|
1,308,842
|
|
(27,364)
|
|
1,281,478
|
|
|
1,373,009
|
|
—
|
|
1,373,009
|
|
|
(6.7)
|
|
Jennie-O Turkey
Store
|
373,471
|
|
—
|
|
373,471
|
|
|
398,512
|
|
—
|
|
398,512
|
|
|
(6.3)
|
|
International &
Other
|
157,175
|
|
—
|
|
157,175
|
|
|
145,907
|
|
—
|
|
145,907
|
|
|
7.7
|
|
TOTAL
|
$
|
2,420,105
|
|
$
|
(27,364)
|
|
$
|
2,392,741
|
|
|
$
|
2,501,513
|
|
$
|
—
|
|
$
|
2,501,513
|
|
|
(4.3)
|
|
|
|
|
|
|
|
|
|
|
|
|
Fifty-Two Weeks
Ended
|
|
October 25,
2020
|
|
October 27,
2019
|
|
|
VOLUME
(LBS.)
|
Reported
GAAP
|
Acquisitions
|
Organic
(Non-GAAP)
|
|
Reported
GAAP
|
Divestitures
|
Organic
(Non-GAAP)
|
|
Non-GAAP
% Change
|
Grocery
Products
|
1,281,562
|
|
—
|
|
1,281,562
|
|
|
1,283,492
|
|
(69,910)
|
|
1,213,582
|
|
|
5.6
|
|
Refrigerated
Foods
|
2,360,571
|
|
(15,298)
|
|
2,345,273
|
|
|
2,325,156
|
|
—
|
|
2,325,156
|
|
|
0.9
|
|
Jennie-O Turkey
Store
|
815,425
|
|
—
|
|
815,425
|
|
|
789,337
|
|
—
|
|
789,337
|
|
|
3.3
|
|
International &
Other
|
337,149
|
|
—
|
|
337,149
|
|
|
339,296
|
|
(2,052)
|
|
337,244
|
|
|
—
|
|
TOTAL
|
4,794,707
|
|
(15,298)
|
|
4,779,409
|
|
|
4,737,281
|
|
(71,962)
|
|
4,665,319
|
|
|
2.4
|
|
NET
SALES
|
|
|
|
|
|
|
|
|
|
Grocery
Products
|
$
|
2,385,291
|
|
$
|
—
|
|
$
|
2,385,291
|
|
|
$
|
2,369,317
|
|
$
|
(130,588)
|
|
$
|
2,238,729
|
|
|
6.5
|
|
Refrigerated
Foods
|
5,271,061
|
|
(89,363)
|
|
5,181,698
|
|
|
5,210,741
|
|
—
|
|
5,210,741
|
|
|
(0.6)
|
|
Jennie-O Turkey
Store
|
1,333,459
|
|
—
|
|
1,333,459
|
|
|
1,323,783
|
|
—
|
|
1,323,783
|
|
|
0.7
|
|
International &
Other
|
618,650
|
|
—
|
|
618,650
|
|
|
593,476
|
|
(3,889)
|
|
589,587
|
|
|
4.9
|
|
TOTAL
|
$
|
9,608,462
|
|
$
|
(89,363)
|
|
$
|
9,519,099
|
|
|
$
|
9,497,317
|
|
$
|
(134,477)
|
|
$
|
9,362,840
|
|
|
1.7
|
|
HORMEL FOODS
CORPORATION
|
SEGMENT
DATA
|
(Unaudited) (In
thousands)
|
|
|
|
|
|
|
|
Thirteen Weeks
Ended
|
|
|
October 25,
2020
|
|
October 27,
2019
|
|
%
Change
|
NET
SALES
|
|
|
|
|
|
|
Grocery
Products
|
|
$
|
580,617
|
|
|
$
|
584,085
|
|
|
(0.6)
|
|
Refrigerated
Foods
|
|
1,308,842
|
|
|
1,373,009
|
|
|
(4.7)
|
|
Jennie-O Turkey
Store
|
|
373,471
|
|
|
398,512
|
|
|
(6.3)
|
|
International & Other
|
|
157,175
|
|
|
145,907
|
|
|
7.7
|
|
TOTAL
|
|
$
|
2,420,105
|
|
|
$
|
2,501,513
|
|
|
(3.3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SEGMENT
PROFIT
|
|
|
|
|
|
|
Grocery
Products
|
|
$
|
81,642
|
|
|
$
|
80,923
|
|
|
0.9
|
|
Refrigerated
Foods
|
|
157,810
|
|
|
189,287
|
|
|
(16.6)
|
|
Jennie-O Turkey
Store
|
|
32,618
|
|
|
41,031
|
|
|
(20.5)
|
|
International & Other
|
|
27,047
|
|
|
17,455
|
|
|
55.0
|
|
TOTAL SEGMENT
PROFIT
|
|
299,116
|
|
|
328,696
|
|
|
(9.0)
|
|
Net unallocated
expense
|
|
20,553
|
|
|
5,065
|
|
|
305.8
|
|
Noncontrolling
interest
|
|
169
|
|
|
63
|
|
|
172.2
|
|
EARNINGS BEFORE
INCOME TAX
|
|
$
|
278,732
|
|
|
$
|
323,694
|
|
|
(13.9)
|
|
|
|
|
|
|
|
|
Fifty-Two Weeks
Ended
|
|
|
October 25,
2020
|
|
October 27,
2019
|
|
%
Change
|
NET
SALES
|
|
|
|
|
|
|
Grocery
Products
|
|
$
|
2,385,291
|
|
|
$
|
2,369,317
|
|
|
0.7
|
|
Refrigerated
Foods
|
|
5,271,061
|
|
|
5,210,741
|
|
|
1.2
|
|
Jennie-O Turkey
Store
|
|
1,333,459
|
|
|
1,323,783
|
|
|
0.7
|
|
International & Other
|
|
618,650
|
|
|
593,476
|
|
|
4.2
|
|
TOTAL
|
|
$
|
9,608,462
|
|
|
$
|
9,497,317
|
|
|
1.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SEGMENT
PROFIT
|
|
|
|
|
|
|
Grocery
Products
|
|
$
|
358,008
|
|
|
$
|
339,497
|
|
|
5.5
|
|
Refrigerated
Foods
|
|
609,406
|
|
|
681,763
|
|
|
(10.6)
|
|
Jennie-O Turkey
Store
|
|
105,585
|
|
|
117,962
|
|
|
(10.5)
|
|
International & Other
|
|
93,782
|
|
|
75,513
|
|
|
24.2
|
|
TOTAL SEGMENT
PROFIT
|
|
1,166,782
|
|
|
1,214,735
|
|
|
(3.9)
|
|
Net unallocated
expense
|
|
52,307
|
|
|
5,362
|
|
|
875.5
|
|
Noncontrolling
interest
|
|
272
|
|
|
342
|
|
|
(20.4)
|
|
EARNINGS BEFORE
INCOME TAX
|
|
$
|
1,114,747
|
|
|
$
|
1,209,715
|
|
|
(7.9)
|
|
HORMEL FOODS
CORPORATION
|
CONSOLIDATED
STATEMENTS OF OPERATIONS
|
(Unaudited) (In
thousands, except per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
Thirteen Weeks
Ended
|
|
Fifty-Two Weeks
Ended
|
|
|
October 25,
2020
|
|
October 27,
2019
|
|
October 25,
2020
|
|
October 27,
2019
|
Net sales
|
|
$
|
2,420,105
|
|
|
$
|
2,501,513
|
|
|
$
|
9,608,462
|
|
|
$
|
9,497,317
|
|
Cost of products
sold
|
|
1,962,340
|
|
|
2,007,790
|
|
|
7,782,498
|
|
|
7,612,669
|
|
GROSS
PROFIT
|
|
457,765
|
|
|
493,723
|
|
|
1,825,963
|
|
|
1,884,648
|
|
Selling, general and
administrative
|
|
190,797
|
|
|
183,795
|
|
|
761,315
|
|
|
727,584
|
|
Equity in earnings of
affiliates
|
|
9,729
|
|
|
11,068
|
|
|
35,572
|
|
|
39,201
|
|
OPERATING
INCOME
|
|
276,697
|
|
|
320,996
|
|
|
1,100,220
|
|
|
1,196,265
|
|
Interest &
investment income
|
|
10,306
|
|
|
5,793
|
|
|
35,596
|
|
|
31,520
|
|
Interest
expense
|
|
(8,270)
|
|
|
(3,095)
|
|
|
(21,069)
|
|
|
(18,070)
|
|
EARNINGS BEFORE
INCOME TAXES
|
|
278,732
|
|
|
323,694
|
|
|
1,114,747
|
|
|
1,209,715
|
|
Provision for income
taxes
|
|
44,207
|
|
|
68,128
|
|
|
206,393
|
|
|
230,567
|
|
(effective tax
rate)
|
|
15.9
|
%
|
|
21.0
|
%
|
|
18.5
|
%
|
|
19.1
|
%
|
NET
EARNINGS
|
|
234,526
|
|
|
255,566
|
|
|
908,354
|
|
|
979,148
|
|
Less: net earnings
attributable to noncontrolling interest
|
|
169
|
|
|
63
|
|
|
272
|
|
|
342
|
|
NET EARNINGS
ATTRIBUTABLE TO HORMEL FOODS CORPORATION
|
|
$
|
234,356
|
|
|
$
|
255,503
|
|
|
$
|
908,082
|
|
|
$
|
978,806
|
|
|
|
|
|
|
|
|
|
|
NET EARNINGS PER
SHARE
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
0.43
|
|
|
$
|
0.48
|
|
|
$
|
1.69
|
|
|
$
|
1.83
|
|
Diluted
|
|
$
|
0.43
|
|
|
$
|
0.47
|
|
|
$
|
1.66
|
|
|
$
|
1.80
|
|
|
|
|
|
|
|
|
|
|
WEIGHTED AVG.
SHARES OUTSTANDING
|
|
|
|
|
|
|
Basic
|
|
539,726
|
|
|
534,151
|
|
|
538,007
|
|
|
534,578
|
|
Diluted
|
|
548,029
|
|
|
543,802
|
|
|
546,592
|
|
|
545,232
|
|
|
|
|
|
|
|
|
|
|
Dividends declared
per share
|
|
$
|
0.2325
|
|
|
$
|
0.2100
|
|
|
$
|
0.9300
|
|
|
$
|
0.8400
|
|
HORMEL FOODS
CORPORATION
|
CONDENSED
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
|
(Unaudited) (In
thousands)
|
|
|
|
|
|
|
|
October 25,
2020
|
|
October 27,
2019
|
ASSETS
|
Cash and cash
equivalents
|
|
$
|
1,714,309
|
|
|
$
|
672,901
|
|
Short-term marketable
securities
|
|
17,338
|
|
|
14,736
|
|
Accounts
receivable
|
|
702,419
|
|
|
574,396
|
|
Inventories
|
|
1,072,762
|
|
|
1,042,362
|
|
Income taxes
receivable
|
|
41,449
|
|
|
19,924
|
|
Prepaid
expenses
|
|
18,349
|
|
|
22,637
|
|
Other current
assets
|
|
12,438
|
|
|
14,457
|
|
TOTAL CURRENT
ASSETS
|
|
3,579,063
|
|
|
2,361,413
|
|
|
|
|
|
|
Goodwill
|
|
2,612,727
|
|
|
2,481,645
|
|
Other
intangibles
|
|
1,076,285
|
|
|
1,033,862
|
|
Pension
assets
|
|
183,232
|
|
|
135,915
|
|
Investments in and
receivables from affiliates
|
|
308,372
|
|
|
289,157
|
|
Other
assets
|
|
250,382
|
|
|
177,901
|
|
Property, plant &
equipment, net
|
|
1,898,222
|
|
|
1,629,111
|
|
TOTAL
ASSETS
|
|
$
|
9,908,282
|
|
|
$
|
8,109,004
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND
SHAREHOLDERS' INVESTMENT
|
Accounts
payable
|
|
$
|
644,609
|
|
|
$
|
590,033
|
|
Accrued
expenses
|
|
59,136
|
|
|
62,031
|
|
Accrued worker's
compensation
|
|
25,070
|
|
|
24,272
|
|
Accrued
marketing
|
|
108,502
|
|
|
96,305
|
|
Employee-related
expenses
|
|
252,845
|
|
|
213,515
|
|
Taxes
payable
|
|
22,480
|
|
|
6,208
|
|
Interest and
dividends payable
|
|
132,632
|
|
|
112,685
|
|
Current maturities of
long-term debt
|
|
258,691
|
|
|
—
|
|
TOTAL CURRENT
LIABILITIES
|
|
1,503,965
|
|
|
1,105,049
|
|
|
|
|
|
|
Long-term debt, less
current maturities
|
|
1,044,936
|
|
|
250,000
|
|
Pension and
post-retirement benefits
|
|
552,878
|
|
|
536,490
|
|
Other long-term
liabilities
|
|
157,399
|
|
|
115,356
|
|
Deferred income
taxes
|
|
218,779
|
|
|
176,574
|
|
Accumulated other
comprehensive loss
|
|
(395,250)
|
|
|
(399,500)
|
|
Other shareholder's
investment
|
|
6,825,576
|
|
|
6,325,035
|
|
TOTAL
LIAB. & SHAREHOLDERS' INVESTMENT
|
|
$
|
9,908,282
|
|
|
$
|
8,109,004
|
|
HORMEL FOODS
CORPORATION
|
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
(Unaudited) (In
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
Thirteen Weeks
Ended
|
|
Fifty-Two Weeks
Ended
|
|
|
October 25,
2020
|
|
October 27,
2019
|
|
October 25,
2020
|
|
October 27,
2019
|
OPERATING
ACTIVITIES
|
|
|
|
|
|
|
|
|
Net
earnings
|
|
$
|
234,526
|
|
|
$
|
255,566
|
|
|
$
|
908,354
|
|
|
$
|
979,148
|
|
Depreciation and
amortization
|
|
56,007
|
|
|
42,994
|
|
|
205,781
|
|
|
165,209
|
|
(Increase) decrease
in working capital
|
|
(74,876)
|
|
|
(9,303)
|
|
|
(29,013)
|
|
|
(215,548)
|
|
Other
|
|
34,282
|
|
|
60,827
|
|
|
42,902
|
|
|
(5,813)
|
|
NET CASH PROVIDED BY
OPERATING ACTIVITIES
|
|
249,938
|
|
|
350,084
|
|
|
1,128,024
|
|
|
922,996
|
|
|
|
|
|
|
|
|
|
|
INVESTING
ACTIVITIES
|
|
|
|
|
|
|
|
|
Net (purchase) sale
of securities
|
|
53
|
|
|
(612)
|
|
|
(2,589)
|
|
|
(14,496)
|
|
Proceeds from sale of
business
|
|
—
|
|
|
5,921
|
|
|
—
|
|
|
479,806
|
|
Acquisitions of
businesses and intangibles
|
|
—
|
|
|
—
|
|
|
(270,789)
|
|
|
—
|
|
Purchases of property
and equipment
|
|
(140,671)
|
|
|
(139,607)
|
|
|
(367,501)
|
|
|
(293,838)
|
|
Proceeds from sales
of property and equipment
|
|
450
|
|
|
1,144
|
|
|
1,916
|
|
|
37,402
|
|
(Increase) decrease
in investments, equity in affiliates, and other assets
|
|
(10,109)
|
|
|
(1,634)
|
|
|
(17,352)
|
|
|
11,279
|
|
NET CASH PROVIDED BY
(USED IN) INVESTING ACTIVITIES
|
|
(150,276)
|
|
|
(134,788)
|
|
|
(656,316)
|
|
|
220,153
|
|
|
|
|
|
|
|
|
|
|
FINANCING
ACTIVITIES
|
|
|
|
|
|
|
|
|
Proceeds from
long-term debt
|
|
—
|
|
|
—
|
|
|
992,381
|
|
|
—
|
|
Repayments of
long-term debt and finance leases
|
|
(2,147)
|
|
|
—
|
|
|
(8,368)
|
|
|
(374,840)
|
|
Dividends paid on
common stock
|
|
(125,373)
|
|
|
(112,082)
|
|
|
(487,376)
|
|
|
(437,053)
|
|
Share
repurchase
|
|
—
|
|
|
—
|
|
|
(12,360)
|
|
|
(174,246)
|
|
Other
|
|
9,700
|
|
|
11,788
|
|
|
81,895
|
|
|
59,895
|
|
NET CASH PROVIDED BY
(USED IN) FINANCING ACTIVITIES
|
|
(117,820)
|
|
|
(100,294)
|
|
|
566,172
|
|
|
(926,244)
|
|
Effect of exchange
rate changes on cash
|
|
3,098
|
|
|
(2,300)
|
|
|
3,526
|
|
|
(3,140)
|
|
INCREASE (DECREASE)
IN CASH AND CASH EQUIVALENTS
|
|
(15,060)
|
|
|
112,702
|
|
|
1,041,407
|
|
|
213,765
|
|
Cash and cash
equivalents at beginning of period
|
|
1,729,368
|
|
|
560,199
|
|
|
672,901
|
|
|
459,136
|
|
CASH AND CASH
EQUIVALENTS AT END OF YEAR
|
|
$
|
1,714,309
|
|
|
$
|
672,901
|
|
|
$
|
1,714,309
|
|
|
$
|
672,901
|
|
INVESTOR
CONTACT:
|
MEDIA
CONTACT:
|
Nathan
Annis
|
(507)
437-5345
|
(507)
437-5248
|
media@hormel.com
|
ir@hormel.com
|
|
View original content to download
multimedia:http://www.prnewswire.com/news-releases/hormel-foods-reports-fourth-quarter-and-fiscal-2020-earnings-301179417.html
SOURCE Hormel Foods Corporation