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HSY · Hershey

33 filings

10-K

HSY 10-K Annual Reports

Hershey - 33 annual reports

Filing record · 2016–202610-K1110-Q358-K142

2025
Hershey Annual Report, Year Ended Dec 31, 2025
The Hershey Company reported full-year 2025 net sales of $11,692.6 million, up 4.4% from $11,202.3 million in 2024, driven by favorable price realization of approximately 6% and a volume decrease of approximately 1%. Gross margin fell to 33.5% from 47.3%, and operating profit dropped to $1,441.5 million from $2,898.2 million, as higher commodity and tariff costs and a $491.0 million unfavorable mark-to-market impact on commodity derivatives weighed on results. Net income declined to $883.3 million from $2,221.2 million, and diluted EPS was $4.34 compared with $10.92 in 2024. The filing attributes the decline primarily to cost pressures from cocoa and other commodities, supply chain costs including tariffs, and lower volume. Segment results were mixed. North America Confectionery net sales rose to $9,479.7 million, but segment income fell 15.3% to $2,493.8 million, with segment margin at 26.3%. North America Salty Snacks grew net sales 11.9% to $1,271.3 million, with segment income up 21.3% to $241.8 million, helped by volume gains and the LesserEvil acquisition completed November 18, 2025 for $815.2 million in consideration. International segment income collapsed to $3.3 million from $111.5 million. Balance sheet and cash flow changes were notable. Operating cash flow was $2,277.4 million, down from $2,531.6 million. Long-term debt rose to $4,681.2 million (carrying value of total debt $5.2 billion long-term plus short-term), following $2.0 billion of new notes issued in February 2025, and cash dividends paid totaled $1,085.3 million. The company guided 2026 capital expenditures of approximately $425 million to $475 million. Hershey Trust Company, as trustee for the Milton Hershey School Trust, retains voting control of the company.
Feb 17, 2026
2024
Hershey Annual Report, Year Ended Dec 31, 2024
The Hershey Company reported net sales of $11,202.3 million in 2024, up $37.3 million, or 0.3%, from $11,165.0 million in 2023. Gross margin rose to 47.3% from 44.8%, driven by a $563.0 million favorable year-over-year mark-to-market impact on commodity derivatives and favorable price realization, partially offset by higher commodity costs. Operating profit increased 13.2% to $2,898.2 million, and net income rose 19.3% to $2,221.2 million, or $10.92 per diluted share versus $9.06 in 2023. The filing also notes that volume declined approximately 2% in 2024, with declines in North America Confectionery and International, partially offset by growth in North America Salty Snacks. The filing describes a dynamic environment. Management states that consumer behavior shifted and that cost fatigue constrained spending, leading to overall declines in consumer demand for its products. Cocoa futures averaged $3.45 per pound in 2024 versus $1.49 in 2023, and the filing notes that the commodity price increase remains a primary incremental cost pressure. Segment income fell in North America Confectionery (down 5.5% to $2,945.7 million) and International (down 24.8% to $111.5 million), while North America Salty Snacks segment income rose 26.0% to $199.4 million. From a balance sheet and cash flow perspective, operating cash flow was $2,531.6 million and capital expenditures were $605.9 million, with the company expecting 2025 capital spending of approximately $425 million to $450 million. Dividends paid totaled $1,084.8 million, and the Board declared a quarterly dividend of $1.370 per share of Common Stock in February 2025. Total debt rose to $5.1 billion from $4.8 billion, largely from commercial paper, and cash and cash equivalents ended the year at $730.7 million. McLane Company, Inc. accounted for approximately 27% of 2024 consolidated net sales, and Hershey Trust Company, as trustee for the Milton Hershey School Trust, retains voting control of the company.
Feb 18, 2025
2023
Hershey Annual Report, Year Ended Dec 31, 2023
The Hershey Company reported 2023 net sales of $11,165.0 million, up 7.2% from $10,419.3 million in 2022, driven primarily by price realization of 8.3%, partially offset by a 1.3% volume decrease. Gross margin rose to 44.8% from 43.2%, and operating profit increased 13.3% to $2,560.9 million. Net income attributable to The Hershey Company was $1,861.8 million, up 13.2%, and diluted EPS was $9.06 compared with $7.96 in 2022. Management attributed the earnings growth mainly to higher gross profit, partly offset by higher SM&A expenses, which rose 9.0%, and higher income taxes and other expense. Cash flow from operations was $2.32 billion in 2023, roughly flat versus $2.33 billion in 2022. Capital expenditures rose to $771.1 million, and the company expects 2024 capital expenditures of approximately $600 million to $650 million. Cash dividends paid totaled $889.1 million, with the quarterly common dividend raised to $1.370 per share for March 2024. Total debt was $4.8 billion at year-end 2023, and the company repurchased shares, including a 1,000,000-share purchase from the Milton Hershey School Trust at $239.91 per share. Management also noted that the Board approved the Advancing Agility & Automation Initiative in February 2024, which is estimated to cost $200 million to $250 million in pre-tax charges through 2026, with ongoing annual savings of approximately $300 million expected at program conclusion. The company faces risks tied to cocoa price volatility, which rose an average of approximately 32% during 2023, along with pressure on consumer demand, with volume declining 1.3% in the year. McLane Company accounted for approximately 28% of 2023 net sales. The 2023 acquisition of Weaver Popcorn manufacturing assets added capacity to the North America Salty Snacks segment.
Feb 20, 2024
2022
Hershey Annual Report, Year Ended Dec 31, 2022
The Hershey Company reported net sales of $10.42 billion in 2022, up 16.1% from $8.97 billion in 2021, driven by favorable price realization of 8.0%, a 4.3% benefit from net acquisitions and divestitures (the 2021 acquisitions of Lily's, Dot's and Pretzels), and volume growth of 4.0%. Net income attributable to The Hershey Company rose 11.3% to $1.64 billion, and diluted EPS increased 12.0% to $7.96. Gross margin declined 200 basis points to 43.2%, reflecting higher supply chain inflation, unfavorable commodity derivative mark-to-market impact and unfavorable product mix. Operating profit rose 10.6% to $2.26 billion, with operating margin falling to 21.7% from 22.8%. Operating cash flow was $2.33 billion in 2022, compared with $2.08 billion in 2021, while capital additions were $519.5 million. Cash dividends paid totaled $775.0 million, and the Company repurchased $389.0 million of shares, including a 1,000,000-share purchase from the Milton Hershey School Trust at $203.35 per share in February 2022. Total short- and long-term debt was $4.8 billion at December 31, 2022, down from $5.0 billion, and the Company expects 2023 capital expenditures of $800 million to $900 million and long-term debt repayments of approximately $750 million. Management highlighted a CMG market share decline of approximately 54 basis points despite strong consumer takeaway growth, and the filing notes that Hershey Trust Company, as trustee for the Milton Hershey School Trust, maintains voting control over the Company. The filing also flags ongoing risks from supply chain disruptions, inflation, the Russia-Ukraine conflict, cocoa price and supply volatility, customer concentration (McLane Company accounted for approximately 28% of 2022 net sales), and the multi-year ERP system implementation. The auditor, Ernst & Young LLP, issued an unqualified opinion on both the financial statements and internal control over financial reporting, and no material weakness is reported.
Feb 17, 2023
2021
Hershey Annual Report, Year Ended Dec 31, 2021
The Hershey Company's 2021 Form 10-K reports net sales of $8.97 billion, up 10.1% from $8.15 billion in 2020, with net income attributable to The Hershey Company of $1.48 billion (up 15.5%) and diluted EPS of $7.11 (up 16.4%). The increase was driven by a volume increase of 5.6% from everyday core U.S. confection and salty snack brands, price realization of 3.1%, and a 1.0% benefit from net acquisitions. Gross margin declined to 45.1% from 45.4% due to higher freight, logistics and plant costs, while operating profit margin rose to 22.8% from 21.9%, helped by lower business realignment and impairment charges. Management reorganized reporting into three segments (North America Confectionery, North America Salty Snacks and International), with North America Confectionery accounting for 85.6% of net sales. During 2021 the company spent about $1.6 billion to acquire Lily's Sweets, Dot's Pretzels and Pretzels Inc., with Dot's and Pretzels expected to generate aggregate annualized net sales over $300 million. Operating cash flow rose to $2.08 billion from $1.70 billion, while capital expenditures were $495.9 million and total debt increased to $5.0 billion from $4.6 billion, largely from commercial paper used to fund the acquisitions. Cash and cash equivalents fell to $329.3 million. The filing states the company expects 2022 capital expenditures of approximately $550 million to $600 million and maintains a $1.5 billion revolving credit facility, with $680 million available at year end. The filing also notes that Hershey Trust Company, as trustee for the Milton Hershey School Trust, holds voting control of the company, with about 81% of the votes entitled to be cast on matters requiring the vote of both classes of common stock. Key risks cited include commodity and cocoa cost volatility, supply chain disruptions, COVID-19, reliance on McLane Company as roughly 30% of net sales, and a multi-year ERP system implementation.
Feb 18, 2022
2020
Hershey Annual Report, Year Ended Dec 31, 2020
The Hershey Company's 2020 Form 10-K reports net sales of $8.15 billion in 2020, up from $7.99 billion in 2019, with net sales increasing 2.0% driven by price realization of 2.3% and a 0.5% benefit from net acquisitions and divestitures, partially offset by an unfavorable 0.5% foreign currency impact and a 0.3% volume decrease. Operating profit rose 11.7% to $1.78 billion, and operating profit margin improved to 21.9% from 20.0%, while net income attributable to The Hershey Company was $1.28 billion, or $6.11 diluted EPS, compared with $5.46 in 2019. North America, the company's only reportable segment, generated approximately 91% of consolidated revenue and segment income of $2.32 billion, while International and Other net sales declined 19.0% to $733.0 million, with China and Mexico sales hit by COVID-19 quarantine protocols. The company's balance sheet strengthened over the year: cash and cash equivalents rose to $1.14 billion from $493.3 million, supported by a $1 billion notes issuance in May 2020, while total debt increased to $4.6 billion. Operating cash flow was $1.70 billion, capital additions were $441.6 million, and the company expects 2021 capital expenditures to approximate $550 million. Management described COVID-19 impacts as primarily limited to the International and Other segment and considered them temporary, while noting the ERP implementation is expected to be delayed by approximately one year. Shareholder returns included $640.7 million in dividends paid in 2020 and a quarterly dividend of $0.804 per Common Stock share declared February 2, 2021, the company's 365th consecutive quarterly dividend. Investors should note the significant concentration of sales with McLane Company, Inc., which accounted for approximately 31% of 2020 net sales, and the Hershey Trust Company's controlling voting interest.
Feb 17, 2021
2019
Hershey Annual Report, Year Ended Dec 31, 2019
The Hershey Company's 2019 Form 10-K reports net sales of $7.99 billion in 2019, up 2.5% from $7.79 billion in 2018, driven by 1.7% favorable price realization and a 1.0% benefit from net acquisitions and divestitures, with volume up 0.1%. Operating profit declined 1.7% to $1.60 billion, and operating profit margin fell to 20.0% from 20.8%, primarily due to $112.5 million in long-lived and intangible asset impairment charges (largely the Krave business) and higher selling, marketing and administrative expense. Net income attributable to The Hershey Company was $1.15 billion, down 2.4%, and diluted EPS was $5.46, down 2.2%. Cash from operating activities rose to $1.76 billion from $1.60 billion. North America, which generated approximately 89% of consolidated revenue, grew net sales 2.6% to $7.08 billion and segment income 5.2% to $2.13 billion. International and Other net sales rose 1.7% to $904.5 million, and segment income increased to $95.7 million from $73.8 million. The company acquired ONE Brands, LLC in September 2019 for $402.2 million, and returned capital through dividends of $610.3 million and share repurchases of $527.2 million. Total debt was $4.3 billion at year-end, and cash and equivalents were $493.3 million. The filing notes that the company is monitoring a novel coronavirus outbreak in China, where financial impacts are currently unknown but are expected to be limited to its China business. Hershey Trust Company, as trustee for the Milton Hershey School Trust, retains voting control of the company.
Feb 20, 2020
2018
Hershey Annual Report, Year Ended Dec 31, 2018
The Hershey Company reported 2018 net sales of $7,791.1 million, up 3.7% from $7,515.4 million in 2017, with growth driven mainly by the Amplify and Pirate Brands acquisitions, which contributed 3.6%. Excluding a 0.2% unfavorable foreign exchange impact, net sales rose 3.9%. Reported operating profit was $1,623.7 million (20.8% margin) versus $1,313.4 million (17.5%) in 2017, while non-GAAP adjusted operating profit was $1,607.1 million (20.6% margin) versus $1,556.5 million (20.7%). Reported diluted EPS was $5.58 compared with $3.66, and non-GAAP diluted EPS was $5.36 compared with $4.69. The company attributed the adjusted margin decline mainly to lower non-GAAP gross margin, which the filing put at 44.0%, down 160 basis points, due to higher freight and logistics costs, unfavorable mix and additional plant costs. North America, the only reportable segment, generated 88.6% of net sales and segment income of $2,020.1 million, down 1.2%, as higher trade promotional expense, logistics costs and acquisition-related SM&A offset lower advertising spend. International and Other segment income improved to $73.8 million from $11.5 million. Cash from operations was $1,599.9 million, but investing outflows of $1,502.9 million reflected the Amplify and Pirate Brands acquisitions, and total debt rose to $4.5 billion from $2.9 billion. Total assets increased to $7,703.0 million from $5,553.7 million, and goodwill rose to $1,801.1 million. The filing also notes that Hershey Trust Company, as trustee for the Milton Hershey School Trust, maintains voting control of the company, and that CFO Patricia A. Little plans to retire in spring 2019, with a search underway for her replacement. The Board declared a quarterly dividend of $0.722 per share of Common Stock payable March 15, 2019.
Feb 22, 2019
2017
Hershey Annual Report, Year Ended Dec 31, 2017
The Hershey Company's 2017 Form 10-K reports net sales of $7,515.4 million, up 1.0% from $7,440.2 million in 2016, with favorable price realization of 0.7% and a 0.3% benefit from acquisitions offsetting a 0.2% volume decrease. Reported gross margin rose to 45.8% from 42.4%, and operating profit grew 5.7% to $1,274.6 million. Net income attributable to The Hershey Company was $783.0 million, or $3.66 per diluted Common Stock share, versus $720.0 million and $3.34 in 2016. Non-GAAP adjusted EPS-diluted was $4.76, up 7.9% from $4.41. The filing attributes the results partly to lower trade promotional spending, while the company recorded $208.7 million of long-lived asset impairment charges, mainly tied to its China business, under the Margin for Growth Program. The company's North America segment generated approximately 88% of consolidated revenue and reported segment income of $2,045.6 million, up 0.2%. International and Other posted segment income of $11.5 million, compared with a loss of $29.1 million in 2016, but its net sales declined 1.4% amid a 4.7% volume decline, primarily in China. Operating cash flow was $1,249.5 million, and cash and cash equivalents ended the year at $380.2 million. Total debt was $2.9 billion, and the company completed the January 2018 acquisition of Amplify Snack Brands, Inc., which owns SkinnyPop, for approximately $908 million in purchase consideration. Management's Margin for Growth Program is expected to generate total pre-tax charges of $375 million to $425 million from 2017 to 2019, with ongoing annual savings of approximately $150 million to $175 million at program conclusion. The company also reported a $32.5 million net charge from U.S. tax reform and an effective tax rate of 31.9%, down from 34.5%. Cocoa futures averaged $0.91 per pound in 2017, down from $1.29 in 2016, and the Milton Hershey School Trust, which holds voting control, remains the controlling stockholder.
Feb 27, 2018
2016
Hershey Annual Report, Year Ended Dec 31, 2016
The Hershey Company's 2016 annual report (filed February 21, 2017) shows net sales of $7.44 billion, up 0.7% from $7.39 billion in 2015, with volume up 0.8% and foreign currency reducing sales by 0.7%. Reported net income rose to $720.0 million from $513.0 million, and diluted EPS rose to $3.34 from $2.32. The 2015 results were depressed by $280.8 million in goodwill impairment charges, so the comparison is distorted. On a non-GAAP basis, the company reports adjusted diluted EPS of $4.41 in 2016 versus $4.12 in 2015, an increase of 7.0%, and adjusted net income grew 4.3%. North America, the only reportable segment and about 88% of consolidated revenue, grew net sales 1.0% to $6.53 billion, while segment income fell 1.6% to $2.04 billion, pressured by higher trade promotional spending and supply chain costs. The International and Other segment still posted a segment loss of $29.1 million, though it improved from a $98.1 million loss in 2015. Gross margin declined to 42.4% from 45.8%, largely due to $163.2 million of unallocated mark-to-market losses on commodity derivatives and business realignment costs. Operating cash flow was $983.5 million, down from $1.21 billion, and total debt rose to about $3.0 billion as the company issued $800 million of notes to fund the Ripple Brand Collective (barkTHINS) acquisition. For 2017, management expects net sales growth of approximately 2% to 3% and GAAP diluted EPS of $4.54 to $4.65, or adjusted EPS of $4.72 to $4.81. The company also announced that John P. Bilbrey will retire as President and CEO effective March 1, 2017, and Michele G. Buck will succeed him in that role on the same date.
Feb 21, 2017
2015
Hershey Annual Report, Year Ended Dec 31, 2015
The Hershey Company's 2015 Form 10-K reports net sales of $7.39 billion, down 0.5% from $7.42 billion in 2014, as volume declines of 3.4% and a 1.6% unfavorable foreign currency impact offset favorable net price realization of 3.5%. Reported net income fell to $512.95 million from $846.91 million, and diluted EPS fell to $2.32 from $3.77, driven primarily by a $280.8 million goodwill and intangible impairment tied to the Shanghai Golden Monkey (SGM) acquisition and $120.98 million of business realignment charges, including the June 2015 productivity initiative. Non-GAAP diluted EPS rose to $4.12 from $3.98. North America generated over 87% of consolidated revenue, with segment income up 8.2% to $2.07 billion, while the International and Other segment posted a $98.1 million segment loss driven by China chocolate weakness. The filing discloses a material weakness in internal control over financial reporting related to hedge accounting for cocoa derivatives, and KPMG LLP issued an adverse opinion on internal control as of December 31, 2015, though its opinion on the financial statements is unqualified. Management stated that the company will no longer designate commodity derivatives for hedge accounting beginning January 1, 2016. For 2016, the company projects net sales growth of approximately 3% excluding currency effects and adjusted diluted EPS of $4.36 to $4.38, and it authorized an additional $500 million share repurchase program in January 2016. Cash from operations rose to $1.21 billion from $844.4 million, while total debt reached $2.4 billion at year-end. The company declared a quarterly dividend of $0.583 per share, its 342nd consecutive quarterly common dividend. Hershey Trust Company maintains voting control through Class B stock.
Feb 26, 2016
2014
Hershey Annual Report, Year Ended Dec 31, 2014
The Hershey Company's 2014 Form 10-K, filed February 20, 2015, reports net sales of $7.42 billion, up 3.9% from $7.15 billion in 2013, with net income of $846.9 million (up 3.2%) and diluted EPS of $3.77 (up 4.4%). Volume growth of 4.4% drove the sales increase, partly offset by a 0.7% currency headwind, while gross margin declined 90 basis points to 45.0% due to higher commodity and input costs, unfavorable sales mix, and dairy costs that cannot be effectively hedged. North America generated $6.35 billion of net sales and $1.92 billion of segment income, while International and Other contributed $1.07 billion of sales (up 13.0%) but only $40.0 million of segment income, reflecting higher trade promotions and advertising investment. The company made significant acquisitions in 2014, including an 80% stake in Shanghai Golden Monkey for $394.5 million in cash, and consolidated Lotte Shanghai Food Company. Operating cash flow fell to $838.2 million from $1,188.4 million, and total debt rose to $2.2 billion. Management expects 2015 net sales growth of 5.5% to 7.5%, diluted EPS growth of 10% to 13%, and adjusted diluted EPS of $4.30 to $4.38. The company also raised its July 2014 North American price increase, approximately 8%, whose benefit is expected mainly in 2015 earnings. Hershey Trust Company, as trustee for Milton Hershey School, retains voting control through its Class B holdings, which carry 10 votes per share, and this structure may delay or prevent a change in control. The company disclosed ongoing civil antitrust litigation in the United States and a pending Third Circuit appeal, and it reported a $1.0 billion undrawn revolving credit facility at year-end.
Feb 20, 2015
2013
Hershey Annual Report, Year Ended Dec 31, 2013
The Hershey Company reported strong 2013 results, with net sales of $7.15 billion, up 7.6% from $6.64 billion in 2012, driven mainly by sales volume increases in the United States and key international markets. Net income rose to $820.5 million, and diluted earnings per share increased to $3.61 from $2.89, a 24.9% increase. EBIT was $1,339.7 million, with an EBIT margin of 18.7% compared with 16.7% in 2012. Gross margin improved to 45.9% from 43.0%, though selling, marketing and administrative expenses grew 12.8% to $1.92 billion, including advertising expense of $582.4 million, up 21.3%. Cash provided from operating activities was $1.19 billion, and the company paid $393.8 million in cash dividends. Looking ahead, management expects 2014 net sales growth of 5% to 7% and GAAP diluted EPS growth of 11% to 14%, with projected adjusted EPS of $4.05 to $4.13. The company agreed in December 2013 to acquire Shanghai Golden Monkey Food Joint Stock Co., Ltd. for a purchase price of approximately $584 million, comprising about $498 million in cash and about $86 million of net debt, subject to government approvals. Major ongoing risks include concentrated customer exposure, since McLane Company accounted for approximately 25.5% of 2013 net sales, and U.S. and Canadian civil antitrust lawsuits, which management does not expect to materially affect its financial position or liquidity. The Milton Hershey School Trust continues to hold voting control of the company.
Feb 21, 2014
2012
Hershey Annual Report, Year Ended Dec 31, 2012
The Hershey Company's 2012 Form 10-K reports a strong year: net sales rose 9.3% to $6.64 billion, net income increased to $660.9 million, and diluted EPS grew to $2.89 from $2.74. Management attributed sales growth to net price realization (approximately 5.7%), sales volume (approximately 2.2%), and the Brookside acquisition (approximately 1.9%). Gross margin improved to 43.0% from 41.6%, while SM&A expense rose 15.3% to $1.70 billion, driven largely by advertising, which increased 15.9% to $480.0 million. Reported EBIT was $1.11 billion, and the company cited adjusted non-GAAP EPS of $3.24, up 14.5%, after excluding business realignment charges, pension expense, and acquisition costs. Cash flow and balance sheet were solid. Net cash from operating activities was $1.09 billion, versus $587.9 million in 2011, and capital additions were $258.7 million. The company repurchased $510.6 million of Common Stock and paid $341.2 million in dividends. Total assets reached $4.75 billion, and long-term debt was $1.53 billion, with $1.1 billion available under the revolving credit facility. The Next Century manufacturing consolidation program carries total expected pre-tax charges of $190 million to $200 million, with annual savings of $65 million to $80 million expected once complete. For 2013, management guided to net sales growth of 5% to 7%, GAAP EPS growth of 20% to 23%, adjusted EPS growth of 10% to 12%, and advertising spending up approximately 20%. Key risks include customer concentration, with McLane Company accounting for approximately 22.2% of 2012 net sales, cocoa and other commodity price volatility, and pending antitrust litigation over chocolate pricing in the U.S. and Canada. The Milton Hershey School Trust retains voting control of the company.
Feb 22, 2013
2011-A
Hershey Annual Report (Amendment), Year Ended Dec 31, 2011
This Amendment No. 1 to The Hershey Company's Form 10-K for the fiscal year ended December 31, 2011, dated March 19, 2012, amends only Part III, Item 12 (Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters) and the exhibit index. It does not contain financial statements, operating results, or business discussion. The filing reports the company's equity compensation plan data as of December 31, 2011, and states that information on beneficial ownership by principal holders, nominees, named executive officers, and directors as a group is incorporated by reference from the 2012 Proxy Statement. As of February 8, 2012, the company had 164,888,660 shares of Common Stock and 60,631,517 shares of Class B Common Stock outstanding. The aggregate market value of Common Stock held by non-affiliates was $8,821,386,884 as of July 1, 2011, and the Class B Common Stock held by non-affiliates was valued at $1,174,322 on the same date. The filing is signed by Humberto P. Alfonso, Chief Financial Officer, and includes Section 302 certifications from Chief Executive Officer John P. Bilbrey and Chief Financial Officer Humberto P. Alfonso.
Mar 19, 2012
2011
Hershey Annual Report, Year Ended Dec 31, 2011
The Hershey Company's 2011 results were strong, with net sales of $6.08 billion, up 7.2% from $5.67 billion in 2010, driven by net price realization (approximately 3.5%) and sales volume increases (approximately 3.4%). Net income rose to $628.9 million from $509.8 million, and diluted EPS increased to $2.74 from $2.21. Results were affected by business realignment and impairment charges, primarily related to the Project Next Century program, which reduced gross margin and EBIT margin, while a $17.0 million pre-tax gain on the sale of trademark licensing rights partially offset these costs. Adjusted non-GAAP diluted EPS was $2.82, up 10.6%. Cash flow from operations declined to $580.9 million from $901.4 million in 2010, reflecting higher working capital requirements, share repurchases of $384.5 million and capital additions of $324.0 million, largely tied to the Next Century program. Cash and cash equivalents ended the year at $693.7 million, and long-term debt rose to $1.75 billion from $1.54 billion after issuing $250 million of 1.5% Notes due 2016. The company also paid $304.1 million in dividends and declared a quarterly dividend of $0.38 per share. For 2012, the company expects reported diluted EPS of $2.79 to $2.89 and projects net sales growth of about 5% to 7%, excluding the January 2012 acquisition of Brookside Foods Ltd. for C$175 million, which has annual net sales of approximately $90 million. Key risks disclosed include customer concentration (McLane Company accounted for approximately 22.3% of 2011 net sales), commodity cost volatility, an ongoing Canadian and U.S. antitrust investigation and lawsuits involving pricing practices, and the controlling influence of the Milton Hershey School Trust over voting control of the company.
Feb 17, 2012
2010
Hershey Annual Report, Year Ended Dec 31, 2010
The Hershey Company's 2010 results were strong. Net sales rose 7.0% to $5.67 billion, driven mainly by sales volume gains of approximately 4% and favorable price realization of over 2%. Gross margin improved to 42.6% from 38.7%, and EBIT margin rose to 16.0% from 14.4%. GAAP net income increased to $509.8 million, or $2.21 per diluted Common Stock share, from $1.90 in 2009. Excluding business realignment and impairment charges, diluted EPS was $2.55, up 17.5%. Advertising expense rose to $391.1 million from $241.2 million, and management attributes the strong performance to its investments in core brands and cost-savings initiatives. Management expects the economic environment to remain challenging in 2011 and anticipates significantly higher input costs, particularly for dairy products, which it cannot effectively hedge. It expects to substantially offset these costs through productivity and cost savings, with 2011 adjusted gross margin about the same as 2010. Management projects 2011 net sales growth around the top of its 3% to 5% long-term objective and adjusted diluted EPS of $2.70 to $2.76. The company is executing Project Next Century, which carries pre-tax charges of $140 million to $170 million over three years and is expected to deliver annual savings of $60 million to $80 million once fully implemented. The filing also highlights concentration and legal exposure. McLane Company, Inc. accounted for approximately 22.1% of 2010 net sales. The company is the subject of a Canadian Competition Bureau antitrust investigation, faces approximately 90 related civil antitrust suits in the United States and 14 in Canada, and states that these matters should not have a material adverse effect. The Milton Hershey School Trust retains voting control of the company, holding about 80% of total votes.
Feb 18, 2011
2009
Hershey Annual Report, Year Ended Dec 31, 2009
The Hershey Company's 2009 results showed net sales rising 3.2% to $5.30 billion, driven primarily by price realization, while sales volumes declined at less than expected rates due to pricing elasticity. Net income increased to $436.0 million from $311.4 million, and diluted EPS rose to $1.90 from $1.36. EBIT grew to $761.6 million, with EBIT margin improving to 14.4% from 11.5%, largely because business realignment charges fell to $99.1 million from $180.7 million. Management stated that the global supply chain transformation program was essentially complete as of December 31, 2009. Cash generation strengthened, with net cash provided from operating activities of $1.07 billion in 2009 versus $519.6 million in 2008. Cash and cash equivalents rose to $253.6 million, and short-term debt fell substantially, from $483.1 million to $24.1 million, as commercial paper was repaid. Total long-term debt was $1.52 billion. The company paid $263.4 million in dividends, and the 2010 quarterly dividend was declared at $.32 per Common Stock share. For 2010, the company expects net sales growth within its 3% to 5% long-term objective, adjusted diluted EPS growth within 6% to 8%, and a 25% to 30% increase in advertising investment. Key risks disclosed include concentration with McLane Company, Inc., which accounted for approximately 27% of 2009 net sales, and pending antitrust investigations and about 91 civil antitrust suits in the United States and 14 in Canada related to the company's pricing practices, which management does not expect to have a material adverse effect. The Milton Hershey School Trust retains voting control of the company.
Feb 19, 2010
2008
Hershey Annual Report, Year Ended Dec 31, 2008
The Hershey Company's 2008 results were in line with management's expectations, with net sales of $5.13 billion, up 3.8% from $4.95 billion in 2007, driven by favorable price realization, improved U.S. marketplace performance and international sales gains, partly offset by reduced U.S. sales volume. Net income rose to $311.4 million, or $1.36 per diluted Common Stock share, from $214.2 million, or $.93, in 2007. The increase was largely due to lower business realignment charges tied to the global supply chain transformation program; excluding items affecting comparability, EBIT declined 11.6% and diluted EPS declined 9.6%, reflecting significantly higher input and energy costs. Management is preparing for further cost pressure in 2009. It expects a commodity cost basket increase of about $175 million, a pension expense increase of approximately $70 million, and advertising spend up $30 million to $35 million. It expects 2009 net sales growth of two to three percent and diluted EPS growth below its long-term six-to-eight percent objective. Price increases taken in 2008 will not be fully effective until the second half of 2009 because of previously committed promotions. Balance sheet changes included total assets falling to $3.63 billion from $4.25 billion, stockholders' equity falling to $318.2 million from $592.9 million, and long-term debt rising to $1.51 billion after a $250 million note issuance in March 2008. The filing also discloses an antitrust investigation by the Canadian Competition Bureau tied to the Company's pricing practices, along with approximately 92 related civil antitrust suits in the United States and nine in Canada. Management believes these should not have a material adverse effect. On the governance side, Chairman Kenneth L. Wolfe resigned at the Milton Hershey School Trust's request, and James E. Nevels was elected non-executive Chairman. The Trust retains voting control, holding approximately 80% of total votes.
Feb 20, 2009
2007
Hershey Annual Report, Year Ended Dec 31, 2007
The Hershey Company's 2007 annual report describes a very difficult year. Net sales were $4.95 billion, essentially even with 2006's $4.94 billion, as international growth and the Godrej Hershey acquisition were largely offset by lower U.S. sales. Gross margin fell to 33.0% from 37.8%, and management attributes the decline to sharp increases in commodity costs, particularly dairy, which the filing says totaled approximately $100 million. Net income dropped to $214.2 million from $559.1 million, and diluted EPS fell to $.93 from $2.34, largely because of $412.6 million in net pre-tax business realignment and impairment charges tied to the global supply chain transformation program and the Brazil business. The company's outlook for 2008 is for continued input cost pressure of approximately $100 million, reducing gross margin by 200 basis points, along with higher brand-support and international investment. Management expects net sales to grow 3% to 4% and non-GAAP diluted EPS excluding items affecting comparability of $1.85 to $1.90, versus GAAP EPS of $1.43 to $1.53. The supply chain program carries estimated pre-tax costs of $525 million to $575 million through 2009 and plans to reduce the number of production lines by more than one-third and eliminate 1,500 positions. Investors should also note several risks disclosed in the filing: an ongoing antitrust investigation by the Canadian Competition Bureau, a European Commission information request, a U.S. Department of Justice inquiry, and roughly 50 U.S. and three Canadian related civil suits. The Milton Hershey School Trust retains voting control, and the board was substantially reconstituted in November 2007. The company also paid $252.3 million in dividends and repurchased $256.3 million of stock in 2007.
Feb 19, 2008
2006
Hershey Annual Report, Year Ended Dec 31, 2006
The Hershey Company's 2006 annual report describes a difficult year. Net sales rose 2.6% to $4.94 billion, but management said results excluding items affecting comparability fell short of long-term goals and were below expectations. Retail takeaway slowed after a shift from limited edition line extensions to new product platforms, and North American chocolate market share declined in the second half. A product recall and temporary plant closure in Canada also weighed on results. GAAP net income was $559.1 million, or $2.34 per diluted share, versus $488.5 million, or $1.97 per diluted share, in 2005, which was burdened by business realignment charges. Excluding items affecting comparability, diluted EPS was $2.37 in 2006 against $2.27 in 2005. The company announced a comprehensive three-year supply chain transformation program in February 2007, expected to be completed by December 31, 2009. It estimates pre-tax charges and implementation costs of $525 million to $575 million, with about $300 million expected in 2007, and projects ongoing annual savings of approximately $170 million to $190 million by 2010. The program includes reducing production lines by more than one-third, outsourcing low value-added items, building a facility in Monterrey, Mexico, and eliminating about 1,500 positions. Management guides to 2007 net sales growth within its 3% to 4% long-term goal, a return to gross margin expansion, and flat EBIT margin excluding items affecting comparability. The balance sheet shows total assets of $4.16 billion and long-term debt of $1.25 billion, up from $942.8 million, following $500 million of notes issued in August 2006. Stockholders' equity fell to $683.4 million from $1.02 billion, reflecting $621.6 million of share repurchases and the adoption of SFAS No. 158. Cash dividends rose to $1.08 per share on an annual rate basis, the 32nd consecutive year of increases, and the company completed a $500 million repurchase program in December 2006 and approved an additional $250 million program.
Feb 23, 2007
2005
Hershey Annual Report, Year Ended Dec 31, 2005
The Hershey Company's 2005 annual report reports net sales of $4.84 billion, up $406.7 million, or 9.2%, from 2004, with business acquisitions contributing about 2.9% of the increase. Net income fell to $493.2 million from $577.9 million, and diluted EPS declined to $1.99 from $2.25. The decline reflects $119.0 million in pre-tax business realignment charges recorded in the second half of 2005, along with the lower-margin Mauna Loa and Grupo Lorena businesses. Results in 2004 were boosted by a $61.1 million income tax contingency reserve adjustment. Excluding items affecting comparability, diluted EPS was $2.28, up 13.4%, and the company stated it exceeded its long-term goals for sales, EBIT and EPS growth. Gross margin declined to 38.7% from 39.5%, and EBIT margin fell to 17.8% from 19.9%. Operating cash flow dropped to $461.8 million from $787.8 million, mainly because of $277.5 million in pension contributions. Short-term debt rose to $819.1 million from $343.3 million, and total stockholders' equity fell to $1.02 billion from $1.14 billion, as the company repurchased $537.0 million of common stock. The company plans to repurchase about $575 million of stock in 2006 and expects 2006 sales growth somewhat above its 3%-4% long-term goal, with EBIT margin up about 90 basis points. The Milton Hershey School Trust holds approximately 78.7% of total votes across both classes of common stock, and McLane Company accounted for more than 20% of 2005 net sales. The company also acquired Scharffen Berger and Joseph Schmidt Confections in August 2005 for a combined $47.1 million, with a possible upward adjustment of up to $61.1 million.
Feb 28, 2006
2004
Hershey Annual Report, Year Ended Dec 31, 2004
Hershey Foods Corporation (now The Hershey Company) reported a strong 2004, with record net sales, net income and earnings per share. Net sales were $4,429,248 thousand, up from $4,172,551 thousand in 2003, and net income rose to $590,879 thousand from $457,584 thousand. Diluted earnings per share were $2.30, compared with $1.73 in 2003. Results were helped by a $61.1 million non-recurring reduction in the income tax provision from settling federal and state tax audits, which the company said made 2004 earnings not directly comparable with prior years. Excluding items affecting comparability, diluted EPS was $2.06 in 2004 versus $1.79 in 2003. Gross margin rose to 39.5% from 39.0%, driven by price realization, smaller product weights and supply chain efficiencies, which more than offset higher cocoa and dairy costs. The company repurchased 11,281,589 shares from the Milton Hershey School Trust in July 2004 for about $500.0 million, and total long-term and short-term borrowings rose as a result. The capitalization ratio increased to 55% from 43%, and the current ratio fell to .9:1 from 1.9:1, largely because $201.2 million of 6.7% Notes due 2005 were reclassified to current liabilities. Management said it expects 2005 net sales growth of 6%–7%, gross margin improvement of 30–40 basis points, and an effective tax rate of 36.6%, which it said would leave 2005 net income and EPS relatively flat versus 2004. In December 2004 the company acquired Mauna Loa for $127.8 million, and in October 2004 it acquired Grupo Lorena for $39.0 million.
Mar 7, 2005
2003
Hershey Annual Report, Year Ended Dec 31, 2003
Hershey Foods Corporation, now The Hershey Company, reported a strong 2003 in its 10-K for the fiscal year ended December 31, 2003. Net sales were $4,172.6 million, up about 1.3% from $4,120.3 million in 2002, driven by a January 2003 selling price increase and new product introductions. Gross margin rose to 39.0% from 37.8%, and net income increased to $457.6 million from $403.6 million. Diluted earnings per share were $3.46, up 18% from $2.93, and income before the cumulative effect of an accounting change was $3.52 per diluted share, 20% higher than in 2002. Management cited share repurchases as a contributor to per-share growth. The company also described several items affecting comparability. A business realignment program in 2003 produced a net charge of about $17.2 million, offset by an $8.3 million pre-tax gain on the sale of gum brands to Farley's & Sathers for $20.0 million. Adoption of FIN 46 led to consolidation of three special-purpose trusts tied to warehouse leases, adding $107.7 million to property, plant and equipment and $115.5 million to long-term debt, with a $7.4 million after-tax cumulative effect charge. The filing states that cocoa costs will increase substantially in 2004, and management expects 2004 results to fall within its long-term targets of 3-4% revenue growth and 9-11% diluted EPS growth despite higher raw material costs. Financial condition remained solid. Operating cash flow was $592.9 million in 2003, and the company repurchased $329.4 million of common stock. Total assets were $3,582.5 million and long-term debt was $968.5 million. Sales to McLane Company, formerly a Wal-Mart subsidiary, were about 22% of total sales. The Milton Hershey School Trust controlled about 78.3% of total voting power.
Mar 12, 2004
2003
Hershey Annual Report, Year Ended Mar 26, 2003
Hershey Foods Corporation reported net sales of $4.12 billion for 2002, down from $4.14 billion in 2001, with net sales decreasing $16.9 million as higher promotion costs, returns, discounts and allowances, the divestiture of the Heide brands and a sluggish retail environment offset volume gains in key confectionery brands. Net income rose to $403.6 million ($2.93 diluted EPS) from $207.2 million ($1.50 diluted EPS) in 2001, which included business realignment charges. Excluding business realignment initiatives and incremental expenses to explore a possible sale of the Corporation in both years, net income increased $44.5 million, or 11%, and gross margin excluding those items rose from 36.7% to 38.0%. Cocoa prices rose sharply in 2002 following unrest in the Ivory Coast, and the company states its cocoa costs will increase substantially in 2004. The company ended 2002 with total assets of $3.48 billion, stockholders' equity of $1.37 billion, and a capitalization ratio of 39% versus 44% a year earlier. It contributed $308.1 million to its pension plans during 2002 and announced a plan to repurchase up to $500 million of Common Stock, expected to be completed within approximately 12 months. The filing also notes that the Milton Hershey School Trust, which controls about 77.3% of combined voting power, asked the company to terminate a process to explore a sale of the Corporation in September 2002. Management's 2003 outlook calls for 3% to 4% revenue growth, 9% to 11% EPS growth, and an 11% increase in standard candy bar prices effective January 1, 2003.
Mar 26, 2003
2000
Hershey Annual Report, Year Ended Dec 31, 2000
Hershey Foods Corporation reported net sales of $4.22 billion for 2000, up $250.1 million, or 6%, from $3.97 billion in 1999. Net income was $334.5 million, or $2.42 per diluted share, down $125.8 million, or 27%, from 1999. The decline reflects the $165.0 million after-tax gain on the 1999 sale of the pasta business; excluding that gain, net income increased $39.2 million, or 13%. Gross margin improved to 41.5% from 40.7%, driven by lower cocoa costs and fewer product returns, discounts and allowances, partly offset by higher distribution and warehousing costs. Management expects gross margin to increase in 2001 and planned advertising spending to be significantly higher. The balance sheet remained strong, with total assets of $3.45 billion, stockholders' equity of $1.18 billion, and a capitalization ratio of 49%, down from 50%. The company acquired Nabisco's intense and breath freshener mints and gum businesses for $135.0 million in December 2000. Cash from operations was $412.2 million in 2000. Short-term borrowings rose to fund the acquisition and stock repurchases, and the company repurchased $99.9 million of common stock during the year. Cash dividends were $1.08 per common share for 2000, and the company adopted a stockholder protection rights agreement in December 2000. The filing also discloses a $61.2 million IRS deficiency related to Corporate Owned Life Insurance, which the company paid in September 2000 while continuing to seek a refund. Wal-Mart accounted for approximately 17% of 2000 net sales. Effective with the quarter ending June 30, 2001, the company will adopt EITF Issue No. 00-14, which may materially reduce reported net sales and selling, marketing and administrative expenses by equal amounts, with no effect on net income.
Mar 15, 2001
1999
Hershey Annual Report, Year Ended Dec 31, 1999
Hershey Foods Corporation's 10-K for fiscal 1999 shows net sales declining to $3.97 billion from $4.44 billion in 1998, reflecting the January 1999 divestiture of the U.S. pasta business (which contributed $343.8 million to the sales reduction) and reduced 1999 shipments of core confectionery and grocery products. The decline was attributed primarily to order fulfillment difficulties following the July 1999 start-up of a new integrated information system. Net income rose to $460.3 million, or $3.26 per diluted share, but this included a $165.0 million after-tax gain on the pasta sale; excluding the gain, net income decreased $45.6 million, or 13%. The company describes its financial position as strong, with a capitalization ratio of 50% and a current ratio of 1.8:1 at year-end. The filing describes operational problems in the third and fourth quarters of 1999 that caused lost sales, longer turnaround times, higher freight and warehousing costs, and elevated receivable deductions and past-due amounts. Management says order cycle time and fill rates improved in early 2000, though customer service has not fully returned to historical levels. A new 1.2 million square-foot distribution center is expected to begin operating in spring 2000. The company also disclosed an IRS proposed deficiency related to its Corporate Owned Life Insurance program, with a total impact of approximately $60.4 million, which it is contesting. Capital returns were significant in 1999: the company repurchased 5,478,379 common shares for $318.0 million, including $100.0 million from the Milton Hershey School Trust, and declared a quarterly dividend of $.26 per Common share. Wal-Mart accounted for approximately 15% of 1999 net sales, and the Hershey Trust controlled approximately 77% of total votes.
Mar 13, 2000
1998
Hershey Annual Report, Year Ended Dec 31, 1998
Hershey Foods Corporation (now The Hershey Company) reported record sales and income for 1998, following a record 1997. Net sales were $4,435,615 thousand in 1998, up from $4,302,236 thousand in 1997, and net income was $340,888 thousand, or $2.34 per share on a diluted basis, compared with $336,251 thousand and $2.23 in 1997. Management attributed the 1998 sales increase mainly to new confectionery products and higher volume of existing confectionery and grocery brands in North America, partly offset by weaker Asian and Russian sales, Canadian and Mexican currency effects, higher unsalables and lower pasta sales. Gross margin declined, with cost of sales at 59.2% of net sales in 1998 versus 57.9% in 1997, driven by higher milk and cocoa costs. The company completed the sale of a 94% interest in its U.S. pasta business to New World Pasta, LLC in January 1999, receiving $450.0 million in cash proceeds and recording an after-tax gain of approximately $165.0 million, or $1.13 per share diluted, in the first quarter of 1999. The balance sheet strengthened in some respects while leverage remained significant. Stockholders' equity rose to $1,042,301 thousand from $852,806 thousand, and the capitalization ratio fell to 54% from 60%. Total debt was $879.2 million in long-term debt plus $345.9 million in short-term debt at year-end 1998. The company repurchased Common Stock, including 28,000,536 shares purchased from the Milton Hershey School Trust, and in February 1999 approved a new repurchase program of up to $230 million. Management stated that first-quarter 1999 results may not compare favorably with the prior year, reflecting the pasta divestiture, higher software amortization and international expansion costs. The filing also disclosed an IRS Notice of Proposed Deficiency tied to the Corporate Owned Life Insurance program for 1989 through 1996, which the company intends to contest, and year 2000 remediation expected to be essentially complete by the third quarter of 1999.
Mar 15, 1999
1997
Hershey Annual Report, Year Ended Dec 31, 1997
Hershey Foods Corporation reported record net sales of $4.30 billion in 1997, up from $3.99 billion in 1996, and record income. Net income rose to $336.3 million, or $2.23 per diluted share, compared with $273.2 million ($1.75 per diluted share) in 1996, which included a $35.4 million after-tax loss on the sale of the Gubor and Sperlari European businesses. Growth was driven by the December 1996 acquisition of Huhtamaki's Leaf North America confectionery operations for $437.2 million, the introduction of new confectionery products, and core brand growth. Gross costs rose modestly, with cost of sales at 57.9% of net sales in 1997 versus 57.7% in 1996. The balance sheet became more leveraged during the year. Long-term debt rose to $1.03 billion from $655.3 million, largely to fund the Leaf acquisition and an August 1997 purchase of 9,900,990 common shares from the Milton Hershey School Trust for $500.0 million. Total stockholders' equity fell to $852.8 million from $1.16 billion, and the company's capitalization ratio rose to 60% from 46%. Cash from operations was $476.9 million in 1997. Capital additions were $172.9 million, and management anticipates $175 million to $200 million per year in capital expenditures. The company also disclosed Year 2000 remediation work tied to a $75 million to $85 million enterprise-wide information system project. The Milton Hershey School Trust held roughly 76% of the total votes of both common classes, a control position that the filing notes must be preserved for any share issuance. Wal-Mart accounted for approximately 12% of 1997 net sales. The company reported no material pending legal proceedings, and it stated that environmental compliance expenditures had not been material.
Mar 16, 1998
1996
Hershey Annual Report, Year Ended Dec 31, 1996
Hershey Foods Corporation's 1996 annual report reports net sales of $3,989,308 thousand, up from $3,690,667 thousand in 1995, and net income of $273,186 thousand, down from $281,919 thousand in 1995. The filing attributes the 1996 result to a $35.4 million after-tax loss on the sale of the Gubor and Sperlari businesses, which the company says was not offset by a tax benefit. Excluding that loss and the 1995 restructuring effects, the company states income increased $28.6 million, or 10%. Net income per share was $1.77 in 1996 versus $1.70 in 1995, and the company describes its financial position as strong, with a capitalization ratio of 46% at year-end 1996 versus 42% in 1995. The major growth driver cited was the December 1996 acquisition of Huhtamaki's Leaf North America confectionery operations for $437.2 million, plus $17.0 million of assumed debt. Total assets rose to $3,184,796 thousand from $2,830,623 thousand, and long-term debt increased to $655,289 thousand from $357,034 thousand, largely reflecting commercial paper borrowings used to fund the acquisition. The company also issued $150 million of 6.95% Notes due 2007 in March 1997 to repay part of those borrowings. Management expects capital expenditures of $175 million to $225 million per year over the next several years. The company's principal exposure is to commodity costs, particularly cocoa, sugar, milk, peanuts, almonds and durum semolina, which it manages through forward purchasing and futures contracts. Management reported higher 1996 raw material costs, mainly cocoa, milk, almonds and semolina, which were offset in part by price increases. Wal-Mart Stores accounted for approximately 12% of 1996 net sales, and the Milton Hershey School Trust held about 77% of the total votes of both common stock classes as of December 31, 1996.
Mar 17, 1997
1995
Hershey Annual Report, Year Ended Dec 31, 1995
Hershey Foods Corporation's 10-K for fiscal 1995 reports net sales of $3.69 billion, up from $3.61 billion in 1994 (net sales rose $84.4 million or 2% in 1995). Net income was $281.9 million, or $3.40 per share, compared with $184.2 million, or $2.12 per share, in 1994, which included a $106.1 million pre-tax restructuring charge. Excluding after-tax restructuring effects, income rose $15.5 million or 6%, and operating return on average stockholders' equity was 22.2%. The company describes itself as a major factor in chocolate and non-chocolate confectionery, grocery and pasta products in North America, with more than 50 brands and products sold in over 2 million retail outlets. Wal-Mart Stores accounted for approximately 11% of 1995 net sales. Balance sheet and capital structure changed significantly during the year. Total assets were $2.83 billion, while total stockholders' equity declined 25% to $1.08 billion, primarily due to the repurchase of Common Stock, including 9,049,773 shares bought from the Milton Hershey School Trust for $500.0 million in August 1995. Total liabilities rose $297.8 million, or 21%, as short-term debt increased to $413.3 million and the company issued $200 million of 6.7% Notes due 2005. The capitalization ratio rose to 42% from 25%, and the current ratio was 1.1:1. Management describes the financial position as strong, and the company expects capital expenditures of $125 million to $175 million per year. Operationally, the company completed the acquisition of Henry Heide, Incorporated for approximately $12.5 million and the sale of OZF Jamin in June 1995. It also agreed to sell Hershey Canada's Planters and Life Savers/Beech-Nut businesses, with both transactions completed in January 1996. Cocoa futures averaged 61.2 cents per pound in 1995, and the company raised the wholesale price of its standard and king-size candy bars by approximately 11% in December 1995. The filing states that the Milton Hershey School Trust held roughly 76% of total votes, and it announced an additional $200 million share repurchase program in February 1996.
Mar 13, 1996
1994
Hershey Annual Report, Year Ended Dec 31, 1994
Hershey Foods Corporation, a Delaware company engaged in the manufacture, distribution and sale of consumer food products, reported net sales of $3,606,271 thousand ($3.61 billion) for 1994, up from $3,488,249 thousand in 1993. Net income fell to $184,219 thousand from $193,325 thousand, reflects a pre-tax restructuring charge of $106.1 million recorded in the fourth quarter of 1994 that reduced net income by $80.2 million, or $.92 per share. Excluding that charge, the filing's own eleven-year summary shows 1994 income per share from continuing operations of $3.04, versus $2.12 reported. Net income per share was $2.12 in 1994 compared with $2.15 in 1993, which included a $1.16 per share charge for accounting changes and a $.45 per share gain on the sale of the Freia investment. The balance sheet remained solid: total assets were $2,890,981 thousand, stockholders' equity was $1,441,100 thousand, and the company's current ratio was 1.2:1 at year-end, with a capitalization ratio of 25%. Cash flow from operations was $337,306 thousand, and capital additions were $138,711 thousand. The company expects capital expenditures of $125 million to $175 million per year and anticipates restructuring savings of approximately $18.0 million annually starting in 1996. Gross margin deteriorated, with cost of sales rising to 58.2% of net sales in 1994 from 57.2% in 1993, driven mainly by higher semolina and other raw material costs. The Hershey Trust controls roughly 77% of the total votes, and the filing notes that Class B stock carries ten votes per share. The filing describes a broad portfolio of chocolate, confectionery, grocery and pasta brands, with international operations in Canada, Mexico, Germany, Italy and the Netherlands/Belgium. Wal-Mart Stores, Inc. accounted for approximately 10% of 1994 net sales. The company reports no material pending legal proceedings, and cocoa and sugar exposure is managed through forward purchasing and futures contracts.
Mar 10, 1995
1993
Hershey Annual Report, Year Ended Dec 31, 1993
Hershey Foods Corporation, which filed this report under that name (now The Hershey Company), manufactures, distributes and sells chocolate, confectionery, grocery and pasta products, primarily in the United States and Canada. For 1993, net sales rose to $3,488,249 thousand from $3,219,805 thousand in 1992, a gain the filing describes as 8%. Net income fell to $193,325 thousand, or $2.15 per share, from $242,598 thousand, or $2.69 per share, because of a $103.9 million net cumulative effect of accounting changes (FAS No. 106 and FAS No. 109). Income before cumulative effect of accounting changes was $297,233 thousand, or $3.31 per share, which includes an after-tax gain of $40.6 million from the sale of the Freia Marabou investment. The filing also highlights acquisitions made in 1993, including Sperlari in Italy for approximately $130.0 million, Overspecht B.V. (OZF Jamin) in the Netherlands and Belgium for approximately $20.2 million plus $13.4 million in assumed debt, and certain Cleveland-area pasta assets for approximately $14.6 million. Management attributes the second-quarter sales and income decline to sluggish demand for existing brands that began in late in the first quarter of 1993 and has continued into early 1994. The company repurchased 2,573,100 shares of Common Stock during 1993 under a $200 million program, and its capitalization ratio was 27% at year-end 1993 and 1992. The company remains heavily influenced by the Hershey Trust, which held 21,398,312 shares of Common Stock and 15,153,003 shares of Class B Stock and was entitled to cast approximately 77% of total votes. The filing states that cocoa and semolina costs are key risks, with semolina supplies expected to remain tight until the fall 1994 harvest.
Mar 11, 1994