Hormel Foods Reports Fourth Quarter And Fiscal 2020 Earnings
Hormel Foods Corporation (NYSE: HRL) reported its fourth quarter results for fiscal 2020, highlighting a 1% growth in total volume to 4.8 billion lbs. and a 1% increase in net sales to $9.6 billion. However, operating income fell 8% to $1.1 billion, with diluted earnings per share also declining 8% to $1.66. The company faced significant challenges due to COVID-19, resulting in over $80 million in incremental supply chain costs. Despite these setbacks, a 5% increase in dividends was announced, marking the 55th consecutive year of dividend growth.
- Cash flow from operations increased 22% to $1.1 billion
- Operating free cash flow rose 21% to $0.8 billion
- International sales grew 8%, driven by strong demand in China
- Continued growth in retail brands like SPAM® and SKIPPY®
- Announced a 5% increase in annual dividend to $0.98 per share
- Operating income decreased 8% to $1.1 billion
- Flat net sales in the fourth quarter, down 3% to $2.4 billion
- Foodservice net sales down 23% for the quarter
- Incremental supply chain costs exceeded $80 million due to COVID-19 challenges
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 up2% - Net sales of
$9.6 billion , up1% ; organic net sales1 up2% - Operating income of
$1.1 billion , down8% - Operating margin of
11.5% compared to12.6% last year - Diluted earnings per share of
$1.66 , down8% ; down2% to adjusted diluted earnings per share1 last year - Cash flow from operations of
$1.1 billion , up22% - Operating free cash flow1 of
$0.8 billion , up21%
EXECUTIVE SUMMARY - FOURTH QUARTER
- Volume of 1.2 billion lbs., down
2% ; organic volume1 down3% - Net sales of
$2.4 billion , down3% ; organic net sales1 down4% - Operating margin of
11.4% compared to12.8% last year - Effective tax rate of
15.9% compared to21.0% last year - Diluted earnings per share of
$0.43 , down9% 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
DIVIDENDS
"We announced a five percent increase to our annual dividend, making the new dividend
Effective Nov. 16, 2020, the company paid its 369th consecutive quarterly dividend at the annual rate of
SEGMENT HIGHLIGHTS – FOURTH QUARTER
Refrigerated Foods
- Volume down
4% ; organic volume1 down5% - Net sales down
5% ; organic net sales1 down7% - 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 to12.6% . 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 to19.1% 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 , up22% 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, an11% 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
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 | GAAP | CytoSport | Non-GAAP | % | ||||||||||||||
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, | October 27, | % | October 25, | October 27, | % | ||||||||||||||||
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 | Acquisitions | Organic | Reported | Divestitures | Organic | Non-GAAP | |||||||||||||||
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 | Acquisitions | Organic | Reported | Divestitures | Organic | Non-GAAP | |||||||||||||||
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, | October 27, | % 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, | October 27, | % 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, | October 27, | October 25, | October 27, | |||||||||||||
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, | October 27, | |||||||
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, | October 27, | October 25, | October 27, | |||||||||||||
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 | |
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SOURCE Hormel Foods Corporation
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