Hershey Foods Corporation (NYSE: HSY) Friday (20 July) announced sales and earnings for the second quarter ended July 1, 2001. Consolidated net sales for the second quarter were $898,859,000 compared with $836,204,000 for the second quarter of 2000. Net income for the second quarter was $52,439,000, or $.38 per share diluted, compared with $39,996,000, or $.29 per share diluted, for the comparable period in 2000.
For the first six months of 2001, consolidated net sales were $1,979,140,000 compared with $1,829,319,000 for the first half of 2000. Net income for the first half of 2001 was $131,345,000, or $.95 per share diluted, compared with $111,176,000, or $.80 per share diluted, for the first half of 2000.
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During the quarter, sales increased 7.5 percent, driven by the acquired mint and gum business, as well as growth in non-domestic markets. A slight decline in the U.S. base business resulted from an SKU rationalization initiative begun last year, as well as retailer inventory de-stocking. Importantly, Hershey’s retail takeaway as measured by IRI continued to lead the category, resulting in market share gains for the latest twelve weeks.
Hershey achieved strong improvement in its gross margin as a result of lower logistics costs, favorable commodity costs and overall improved supply chain efficiencies, enabling additional marketing spending which contributed to the strong retail performance.
“The plan to manage our business for balanced, sustainable financial performance is evident in our results,” said Richard H. Lenny, President and Chief Executive Officer. “Looking ahead to the more important second half, we are encouraged by our plans for the key holiday seasons, and we continue to forecast achievement of our full-year financial results.”
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By GlobalDataThis release contains statements which are forward looking. These statements are made based upon current expectations which are subject to risk and uncertainty. Actual results may differ materially from those contained in the forward-looking statements. Factors which could cause results to differ materially include, but are not limited to: changes in the confectionery and grocery business environment, including actions of competitors and changes in consumer preferences; changes in governmental laws and regulations, including taxes; market demand for new and existing products; the Corporation’s ability to implement improvements to and reduce costs associated with the Corporation’s distribution operations; and changes in raw material and other costs, as discussed in the Corporation’s Annual Report on Form 10-K for 2000.
Hershey Foods Corporation
Summary of Consolidated Statements of Income
for the periods ended July 1, 2001 and July 2, 2000
(in thousands of dollars except per share amounts)
Second Quarter Six Months
2001 2000 2001 2000
Net Sales $898,859 $836,204 $1,979,140 $1,829,319
Costs and Expenses:
Cost of Sales 516,638 502,070 1,154,144 1,107,167
Selling, Marketing
and Administrative 282,670 250,722 581,289 504,522
Total Costs
and Expenses 799,308 752,792 1,735,433 1,611,689
Income Before Interest
and Income Taxes 99,551 83,412 243,707 217,630
Interest Expense, net 16,927 17,843 34,224 35,373
Income Before
Income Taxes 82,624 65,569 209,483 182,257
Provision for
Income Taxes 30,185 25,573 78,138 71,081
Net Income $52,439 $39,996 $131,345 $111,176
Net Income Per Share
– Basic $.38 $.29 $.96 $.81
– Diluted $.38 $.29 $.95 $.80
NOTE: Net Income Per Share – Basic and Diluted have been computed based
on the provisions of Statement of Financial Accounting Standards
No. 128 Earnings per Share. Basic shares outstanding for the
second quarter of 2001 were 136,410,000 compared with 137,415,000
for the second quarter of 2000. Diluted shares outstanding for
the second quarter of 2001 were 137,820,000 compared with
138,532,000 for the second quarter of 2000. Basic shares
outstanding for the first six months of 2001 were 136,580,000
compared with 137,930,000 for the first half of 2000. Diluted
shares outstanding for the first six months of 2001 were
138,034,000 compared with 138,870,000 for the first half of 2000.
Hershey Foods Corporation
Consolidated Balance Sheets
as of July 1, 2001 and December 31, 2000
(in thousands of dollars)
Assets 2001 2000
Cash and Cash Equivalents $21,071 $31,969
Accounts Receivable – Trade (Net) 256,517 379,680
Deferred Income Taxes 85,480 76,136
Inventories 798,308 605,173
Prepaid Expenses and Other 83,939 202,390
Total Current Assets 1,245,315 1,295,348
Net Plant and Property 1,584,046 1,585,388
Intangibles Resulting from
Business Acquisitions 466,938 474,448
Other Assets 131,200 92,580
Total Assets $3,427,499 $3,447,764
Liabilities and Stockholders’ Equity
Loans Payable 278,683 258,123
Accounts Payable 155,866 149,232
Accrued Liabilities 303,622 358,067
Taxes Payable 16,729 1,479
Total Current Liabilities 754,900 766,901
Long-Term Debt 877,415 877,654
Other Long-Term Liabilities 326,560 327,674
Deferred Income Taxes 300,717 300,499
Total Liabilities 2,259,592 2,272,728
Total Stockholders’ Equity 1,167,907 1,175,036
Total Liabilities and Stockholders’ Equity $3,427,499 $3,447,764
