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Exhibit 99

 

INVESTOR CONTACT:

 

MEDIA CONTACT:

Kevin Jones

 

Julie Craven

(507) 437-5248

 

(507) 437-5345

kcjones@hormel.com

 

media@hormel.com

 

HORMEL FOODS REPORTS THIRD QUARTER RESULTS AND MAINTAINS GUIDANCE

 

AUSTIN, Minn. (August 22, 2013) — Hormel Foods Corporation (NYSE: HRL) today reported its performance for the fiscal year 2013 third quarter.  All comparisons are to the third quarter or first nine months of fiscal 2012.

 

HIGHLIGHTS

 

Third Quarter

 

·                  Full year guidance range of $1.88 to $1.96 maintained

·                  Diluted EPS of $.42 up 2 percent from diluted EPS of $.41

·                  Segment operating profit up 5 percent

·                  Dollar sales of $2.2 billion, up 8 percent

·                  Volume up 3 percent

·                  Grocery Products operating profit up 32 percent; volume up 27 percent (volume down 1 percent excluding sales of SKIPPY® products); dollar sales up 25 percent (dollar sales flat excluding sales of SKIPPY® products)

·                  Jennie-O Turkey Store operating profit up 17 percent; volume up 1 percent; dollar sales up 4 percent

·                  Refrigerated Foods operating profit down 26 percent; volume down 3 percent; dollar sales up 2 percent

·                  Specialty Foods operating profit up 8 percent; volume down 5 percent; dollar sales up 5 percent

·                  International & Other operating profit up 34 percent; volume up 28 percent (volume up 10 percent excluding sales of SKIPPY® products); dollar sales up 31 percent (dollars sales up 11 percent excluding sales of SKIPPY® products)

 

The company reported fiscal 2013 third quarter net earnings of $113.6 million, up 2 percent from net earnings of $111.2 million a year earlier. For the nine months ended July 28, 2013, net earnings were $368.9 million, as compared to net earnings of $367.4 million the same period last year.  Diluted net earnings per share for the nine months ended July 28, 2013 were $1.37, equal to a year ago.

 

Sales for the quarter were $2.2 billion, up 8 percent from the same period in fiscal 2012. For the nine months ended July 28, 2013, sales totaled $6.4 billion, up 6 percent from the same period last year.

 

COMMENTARY

 

“We had a solid quarter, with all five segments reporting increased sales over last year,” said Jeffrey M. Ettinger, chairman of the board, president and chief executive officer.  “We also generated improved earnings, with four of five segments posting increased operating profits.  Earnings per share of $0.42 for the third quarter was in line with our expectations and keeps us on pace with our full year adjusted guidance range.”

 

1



 

“Our Grocery Products segment benefitted from good performance by our new SKIPPY® business. Our Jennie-O Turkey Store segment delivered a strong quarter, despite higher grain costs and lower commodity meat prices. Our International business continues to achieve impressive results, led by strong export sales of our SPAM® family of products and fresh pork, as well as the addition of the SKIPPY® business. Higher pork input costs squeezed margins for our retail value-added products, particularly bacon, decreasing our Refrigerated Foods segment results during the quarter,” Ettinger remarked.

 

“We are excited about the recent roll-out of our HORMEL® REV® snack wraps during the quarter, which is supported by a national advertising campaign that began in late July. I am also pleased with the progress our team has made in integrating and growing sales of SKIPPY® products, both in the U.S. and internationally,” commented Ettinger.

 

SEGMENT OPERATING HIGHLIGHTS — THIRD QUARTER

 

Grocery Products (17% of Net Sales, 29% of Total Segment Operating Profit)

 

Grocery Products segment profit increased by 32 percent.  Net sales, including SKIPPY® products, increased over last year’s results by 25 percent.  Excluding SKIPPY® products, segment sales were flat as compared to last year. Net sales of DINTY MOORE® stew, HORMEL® MARY KITCHEN® hash, and HORMEL® bacon toppings increased over last year.

 

Refrigerated Foods (50% of Net Sales, 24% of Total Segment Operating Profit)

 

Refrigerated Foods segment profit declined 26 percent, as elevated raw material costs squeezed margins in certain retail categories, with bacon impacted the most.  Sales increased 2 percent, led by retail sales of HORMEL® party trays, HORMEL® NATURAL CHOICE® deli meats, and HORMEL® CURE 81® hams, and foodservice sales of HORMEL® FIRE BRAISED meats and HORMEL® PECANWOOD bacon.

 

Jennie-O Turkey Store (17% of Net Sales, 25% of Total Segment Operating Profit)

 

Jennie-O Turkey Store delivered a solid performance this quarter despite high feed costs, with segment operating profit up 17 percent from a year ago. Increased value-added sales and an improved product mix offset higher feed costs and lower commodity meat prices. Net sales for the quarter rose 4 percent, driven by growth in sales of JENNIE-O TURKEY STORE® ground turkey chubs and turkey bacon.

 

Specialty Foods (11% of Net Sales, 13% of Total Segment Operating Profit)

 

Specialty Foods segment profit increased 8 percent and net sales grew 5 percent, led by sales of sweetener, nutritional products, ready to drink beverages, and ingredients. The agreement allowing Diamond Crystal Brands to sell SPLENDA® sweetener into foodservice trade channels was extended one month to July 31, 2013.

 

International & Other (5% of Net Sales, 9% of Total Segment Operating Profit)

 

The International & Other segment grew segment profit by 34 percent and net sales by 31 percent, driven principally by stronger exports of our SPAM® family of products and fresh pork, improved performance by our operations in China, and the addition of the SKIPPY® export business.

 

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OUTLOOK

 

“Earnings reported in the third quarter keep us on track to achieve results consistent with our adjusted annual guidance range of $1.88 to $1.96 per share,” said Ettinger.  “Toward the end of the third quarter we were able to adjust for higher raw material costs in key product categories such as bacon.  We anticipate Jennie-O Turkey Store will continue to rebound from headwinds faced earlier in the year, which should benefit results through the rest of fiscal 2013.  We expect four of five segments to outperform in the fourth quarter, with only Specialty Foods expected to experience a down quarter.”

 

“We are excited about the new products that we are introducing to the marketplace this year, such as our HORMEL® REV® snack wraps and HORMEL® FIRE BRAISED meats,” concluded Ettinger.  “We have solid marketing and promotional plans in place to drive sales of our value-added products in the fourth quarter.”

 

DIVIDENDS

 

Effective August 15, 2013, the Company paid its 340th consecutive quarterly dividend, at the annual rate of $.68.

 

CONFERENCE CALL

 

A conference call will be Webcast at 8:00 a.m. CT (9:00 a.m. ET) on Thursday, August 22, 2013. 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 877-941-8609 and you must provide the access code of 4632577. An audio replay is available by calling 800-406-7325 and entering access code 4632577. The audio replay will be available beginning at 10:30 a.m. CT on Thursday, August 22, 2013, through 11:59 p.m. CT on Thursday, September 5, 2013. The Webcast replay will be available at 10:30 a.m. CT, Thursday, August 22, 2013, 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 fifth year in a row. Hormel Foods debuted on the G.I. Jobs magazine list of America’s Top 100 Military Friendly Employers in 2012. 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.

 

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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 31-38 in the company’s Form 10-Q for the quarter ended April 28, 2013, which was filed with the SEC on June 7, 2013, and can be accessed at www.hormelfoods.com under “Investors-SEC Filings.”

 

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Segment Data

 

Fiscal 2013 Third Quarter Segment Operating Results (dollars in thousands)

 

 

 

THIRD QUARTER – 13 WEEKS ENDED

 

 

 

July 28, 2013

 

July 29, 2012

 

% Change

 

NET SALES

 

 

 

 

 

 

 

Grocery Products

 

$

370,297

 

$

297,177

 

24.6

 

Refrigerated Foods

 

1,068,587

 

1,043,311

 

2.4

 

Jennie-O Turkey Store

 

367,125

 

351,604

 

4.4

 

Specialty Foods

 

240,512

 

230,072

 

4.5

 

International & Other

 

113,004

 

86,024

 

31.4

 

Total

 

$

2,159,525

 

$

2,008,188

 

7.5

 

 

 

 

 

 

 

 

 

OPERATING PROFIT

 

 

 

 

 

 

 

Grocery Products

 

$

52,962

 

$

40,052

 

32.2

 

Refrigerated Foods

 

44,769

 

60,757

 

(26.3

)

Jennie-O Turkey Store

 

45,623

 

39,106

 

16.7

 

Specialty Foods

 

23,170

 

21,490

 

7.8

 

International & Other

 

16,692

 

12,437

 

34.2

 

Total segment operating profit

 

183,216

 

173,842

 

5.4

 

Net interest and investment expense (income)

 

3,577

 

2,363

 

51.4

 

General corporate expense

 

2,833

 

3,225

 

(12.2

)

Noncontrolling interest

 

270

 

1,240

 

(78.2

)

Earnings before income taxes

 

$

177,076

 

$

169,494

 

4.5

 

 

 

 

YEAR TO DATE – 39 WEEKS ENDED

 

 

 

July 28, 2013

 

July 29, 2012

 

% Change

 

NET SALES

 

 

 

 

 

 

 

Grocery Products

 

$

1,097,942

 

$

830,649

 

32.2

 

Refrigerated Foods

 

3,143,358

 

3,158,811

 

(0.5

)

Jennie-O Turkey Store

 

1,142,198

 

1,120,028

 

2.0

 

Specialty Foods

 

720,048

 

677,043

 

6.4

 

International & Other

 

324,906

 

273,955

 

18.6

 

Total

 

$

6,428,452

 

$

6,060,486

 

6.1

 

 

 

 

 

 

 

 

 

OPERATING PROFIT

 

 

 

 

 

 

 

Grocery Products

 

$

150,170

 

$

127,003

 

18.2

 

Refrigerated Foods

 

153,239

 

167,515

 

(8.5

)

Jennie-O Turkey Store

 

156,567

 

186,066

 

(15.9

)

Specialty Foods

 

72,898

 

58,996

 

23.6

 

International & Other

 

49,421

 

37,763

 

30.9

 

Total segment operating profit

 

582,295

 

577,343

 

0.9

 

Net interest and investment expense (income)

 

6,887

 

4,932

 

39.6

 

General corporate expense

 

19,228

 

18,040

 

6.6

 

Noncontrolling interest

 

2,720

 

3,226

 

(15.7

)

Earnings before income taxes

 

$

558,900

 

$

557,597

 

0.2

 

 

5



 

HORMEL FOODS CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share amounts)

 

 

 

Thirteen Weeks Ended

 

Thirty-Nine Weeks Ended

 

 

 

July 28, 2013

 

July 29, 2012

 

July 28, 2013

 

July 29, 2012

 

 

 

 

 

 

 

 

 

 

 

Net sales

 

$

2,159,525

 

$

2,008,188

 

$

6,428,452

 

$

6,060,486

 

 

 

 

 

 

 

 

 

 

 

Cost of products sold

 

1,829,219

 

1,701,132

 

5,401,152

 

5,080,414

 

 

 

 

 

 

 

 

 

 

 

GROSS PROFIT:

 

330,306

 

307,056

 

1,027,300

 

980,072

 

 

 

 

 

 

 

 

 

 

 

Selling, general and administrative

 

150,999

 

145,022

 

479,896

 

446,183

 

 

 

 

 

 

 

 

 

 

 

Equity in earnings of affiliates

 

1,346

 

9,823

 

18,383

 

28,640

 

 

 

 

 

 

 

 

 

 

 

OPERATING INCOME:

 

180,653

 

171,857

 

565,787

 

562,529

 

 

 

 

 

 

 

 

 

 

 

Other income & expenses:

 

 

 

 

 

 

 

 

 

Interest & investment (expense) income

 

(455

)

844

 

2,471

 

4,772

 

Interest expense

 

(3,122

)

(3,207

)

(9,358

)

(9,704

)

 

 

 

 

 

 

 

 

 

 

EARNINGS BEFORE INCOME TAXES:

 

177,076

 

169,494

 

558,900

 

557,597

 

 

 

 

 

 

 

 

 

 

 

Provision for income taxes

 

63,171

 

57,087

 

187,309

 

186,922

 

(effective tax rate)

 

35.67

%

33.68

%

33.51

%

33.52

%

 

 

 

 

 

 

 

 

 

 

NET EARNINGS

 

113,905

 

112,407

 

371,591

 

370,675

 

Less: net earnings attributable to noncontrolling interest

 

270

 

1,240

 

2,720

 

3,226

 

NET EARNINGS ATTRIBUTABLE TO HORMEL FOODS CORPORATION

 

$

113,635

 

$

111,167

 

$

368,871

 

$

367,449

 

 

 

 

 

 

 

 

 

 

 

NET EARNINGS PER SHARE

 

 

 

 

 

 

 

 

 

Basic

 

$

.43

 

$

.42

 

$

1.39

 

$

1.39

 

Diluted

 

$

.42

 

$

.41

 

$

1.37

 

$

1.37

 

 

 

 

 

 

 

 

 

 

 

WEIGHTED AVG SHARES O/S

 

 

 

 

 

 

 

 

 

Basic

 

264,605

 

263,359

 

264,472

 

263,638

 

Diluted

 

270,769

 

268,746

 

270,230

 

269,138

 

 

 

 

 

 

 

 

 

 

 

DIVIDENDS DECLARED PER SHARE

 

$

.17

 

$

.15

 

$

.51

 

$

.45

 

 

6



 

HORMEL FOODS CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

 

 

 

July 28, 2013

 

October 28, 2012

 

 

 

(in thousands)

 

ASSETS

 

 

 

 

 

 

 

 

 

 

 

CURRENT ASSETS

 

 

 

 

 

Cash and cash equivalents

 

$

329,496

 

$

682,388

 

Short-term marketable securities

 

 

77,387

 

Accounts receivable

 

514,398

 

507,041

 

Inventories

 

1,003,736

 

950,521

 

Income taxes receivable

 

2,868

 

16,460

 

Deferred income taxes

 

76,502

 

68,560

 

Prepaid expenses

 

14,867

 

12,772

 

Other current assets

 

9,723

 

5,555

 

 

 

 

 

 

 

TOTAL CURRENT ASSETS

 

1,951,590

 

2,320,684

 

 

 

 

 

 

 

INTANGIBLES

 

1,314,882

 

753,947

 

 

 

 

 

 

 

OTHER ASSETS

 

545,756

 

564,855

 

 

 

 

 

 

 

PROPERTY, PLANT & EQUIPMENT, NET

 

949,021

 

924,480

 

 

 

 

 

 

 

TOTAL ASSETS

 

$

4,761,249

 

$

4,563,966

 

 

 

 

 

 

 

LIABILITIES AND SHAREHOLDERS’ INVESTMENT

 

 

 

 

 

 

 

 

 

 

 

TOTAL CURRENT LIABILITIES

 

$

789,484

 

$

786,300

 

 

 

 

 

 

 

LONG-TERM DEBT — LESS CURRENT MATURITIES

 

250,000

 

250,000

 

 

 

 

 

 

 

OTHER LONG-TERM LIABILITIES

 

667,881

 

702,741

 

 

 

 

 

 

 

SHAREHOLDERS’ INVESTMENT

 

3,053,884

 

2,824,925

 

 

 

 

 

 

 

TOTAL LIAB. & SHAREHOLDERS’ INVESTMENT

 

$

4,761,249

 

$

4,563,966

 

 

7



 

HORMEL FOODS CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

 

 

 

Thirty-Nine Weeks Ended

 

 

 

July 28, 2013

 

July 29, 2012

 

 

 

(in thousands)

 

OPERATING ACTIVITIES

 

 

 

 

 

Net earnings

 

$

371,591

 

$

370,675

 

Depreciation and amortization of intangibles

 

92,986

 

88,627

 

Increase in working capital

 

(41,711

)

(171,992

)

Other

 

5,983

 

(3,257

)

NET CASH PROVIDED BY OPERATING ACTIVITIES

 

428,849

 

284,053

 

 

 

 

 

 

 

INVESTING ACTIVITIES

 

 

 

 

 

Net sale of securities

 

77,558

 

 

Acquisitions of businesses/intangibles

 

(665,415

)

(168

)

Net purchases of property / equipment

 

(62,212

)

(90,405

)

(Increase) decrease in investments, equity in affiliates, and other assets

 

(4,810

)

17,661

 

NET CASH USED IN INVESTING ACTIVITIES

 

(654,879

)

(72,912

)

 

 

 

 

 

 

FINANCING ACTIVITIES

 

 

 

 

 

Dividends paid on common stock

 

(129,426

)

(112,683

)

Share repurchase

 

(45,668

)

(50,692

)

Other

 

48,198

 

21,511

 

NET CASH USED IN FINANCING ACTIVITIES

 

(126,896

)

(141,864

)

EFFECT OF EXCHANGE RATE CHANGES ON CASH

 

34

 

810

 

(DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS

 

(352,892

)

70,087

 

Cash and cash equivalents at beginning of year

 

682,388

 

463,130

 

CASH AND CASH EQUIVALENTS AT END OF QUARTER

 

$

329,496

 

$

533,217

 

 

8