Hormel Foods Corp. (HRL, Financial) filed Quarterly Report for the period ended 2009-07-26.
Hormel Foods Corporation is a multinational manufacturer and marketer of consumer-branded meat and food products many of which are among the best known and trusted in the food industry. Products manufactured by the corporation include hams bacon sausages franks canned luncheon meats stews chilies hash meat spreads shelf-stable microwaveable entrees salsas and frozen processed foods. These selections are sold to retail foodservice and wholesale operations under many well-established trademarks some include BLACK LABEL CHI-CHI'S DINTY MOORE & HORMEL. Hormel Foods Corp. has a market cap of $4.93 billion; its shares were traded at around $36.69 with a P/E ratio of 16.2 and P/S ratio of 0.7. The dividend yield of Hormel Foods Corp. stocks is 2.1%. Hormel Foods Corp. had an annual average earning growth of 11.6% over the past 10 years. GuruFocus rated Hormel Foods Corp. the business predictability rank of 5-star.
Equity in earnings of affiliates was $290 and $964 for the third quarter and first nine months, respectively, compared to $241 and $3,431 last year. Equity for both the third quarter and nine months was negatively impacted by the dissolution of the Companys Carapelli USA, LLC joint venture in the second quarter of fiscal 2009. For the first nine months, results for the Companys other joint ventures have been mixed. Decreases compared to the prior year were primarily due to lower results from the Companys 40 percent owned Philippine joint venture, Purefoods-Hormel Company, and the Companys 49 percent owned joint venture, San Miguel Purefoods (Vietnam) Co. Ltd. These declines were partially offset by improved performance from the Companys 50 percent owned joint venture, Herdez Corporation. Minority interests in the Companys consolidated investments are also reflected in these figures, and remained comparable to the prior year.
Net interest and investment income represented a net expense of $553 and $3,951 for the third quarter and first nine months of fiscal 2009, respectively, compared to a net expense of $13,904 and $28,738 for the comparable quarter and nine months of fiscal 2008. The decreased expense was primarily driven by improved investment returns on the Companys rabbi trust for supplemental executive retirement plans and deferred income plans, which increased $10,469 and $20,126 for the third quarter and first nine months, respectively, compared to fiscal 2008. Fiscal 2009 results also include a $3,591 pretax gain recognized on the dissolution of the Companys Carapelli USA, LLC joint venture. Additionally, the Company recorded a $2,400 investment write-off in the third quarter of fiscal 2008. Interest expense of $6,963 and $21,336 for the third quarter and first nine months of 2009, respectively, was comparable to prior year levels. The Company anticipates that interest expense will approximate $29,000 for fiscal 2009.
General corporate expense for the third quarter and first nine months was $9,974 and $28,018, respectively, compared to $2,907 and $18,982 for the comparable periods of fiscal 2008. Increased expense for the third quarter and nine months reflects higher medical and pension related expenses, which are expected to continue in upcoming quarters. Additional employee incentive plan costs also contributed to the increase for the quarter.
Cash used in investing activities decreased to $60,240 in the first nine months of fiscal 2009 from $124,229 in the comparable period of fiscal 2008. Decreased cash outflow related to acquisition activity was the primary driver of the decrease, due to the acquisition of Boca Grande in the third quarter of fiscal 2008 for $23,255. Lower fixed asset expenditures during fiscal 2009 also contributed to the decrease, declining to $71,029 for the first nine months of fiscal 2009 from $96,293 in the comparable period of fiscal 2008. The Company currently estimates its fiscal 2009 fixed asset expenditures to be approximately $100,000. The Companys investments in available-for-sale securities also resulted in a lower net cash outflow of approximately $12,800 for the first nine months of fiscal 2009 compared to the prior year.
Cash used in financing activities was $126,562 in the first nine months of fiscal 2009 compared to $98,964 in the same period of fiscal 2008. The Company used $13,876 for common stock repurchases in first nine months of fiscal 2009, compared to $56,472 in the same period of the prior year. For additional information pertaining to the Companys share repurchase plans or programs, see Part II, Item 2 Unregistered Sales of Equity Securities and Use of Proceeds. Offsetting this decrease were increased net payments on short-term debt. Additionally, cash flows generated from the Companys stock option plan decreased approximately $17,800 during the first nine months of fiscal 2009, as compared to the prior year.
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Hormel Foods Corporation is a multinational manufacturer and marketer of consumer-branded meat and food products many of which are among the best known and trusted in the food industry. Products manufactured by the corporation include hams bacon sausages franks canned luncheon meats stews chilies hash meat spreads shelf-stable microwaveable entrees salsas and frozen processed foods. These selections are sold to retail foodservice and wholesale operations under many well-established trademarks some include BLACK LABEL CHI-CHI'S DINTY MOORE & HORMEL. Hormel Foods Corp. has a market cap of $4.93 billion; its shares were traded at around $36.69 with a P/E ratio of 16.2 and P/S ratio of 0.7. The dividend yield of Hormel Foods Corp. stocks is 2.1%. Hormel Foods Corp. had an annual average earning growth of 11.6% over the past 10 years. GuruFocus rated Hormel Foods Corp. the business predictability rank of 5-star.
Highlight of Business Operations:
Net earnings for the third quarter of fiscal 2009 increased 48.6 percent to $77,169 from $51,947 in the same quarter of 2008. Diluted earnings per share for the quarter increased 50.0 percent to $0.57 from $0.38 last year. Net earnings for the first nine months of 2009 increased 9.8 percent to $238,937 from $217,689 in 2008. Diluted earnings per share increased to $1.76 from $1.58 for the same period of the prior year.Equity in earnings of affiliates was $290 and $964 for the third quarter and first nine months, respectively, compared to $241 and $3,431 last year. Equity for both the third quarter and nine months was negatively impacted by the dissolution of the Companys Carapelli USA, LLC joint venture in the second quarter of fiscal 2009. For the first nine months, results for the Companys other joint ventures have been mixed. Decreases compared to the prior year were primarily due to lower results from the Companys 40 percent owned Philippine joint venture, Purefoods-Hormel Company, and the Companys 49 percent owned joint venture, San Miguel Purefoods (Vietnam) Co. Ltd. These declines were partially offset by improved performance from the Companys 50 percent owned joint venture, Herdez Corporation. Minority interests in the Companys consolidated investments are also reflected in these figures, and remained comparable to the prior year.
Net interest and investment income represented a net expense of $553 and $3,951 for the third quarter and first nine months of fiscal 2009, respectively, compared to a net expense of $13,904 and $28,738 for the comparable quarter and nine months of fiscal 2008. The decreased expense was primarily driven by improved investment returns on the Companys rabbi trust for supplemental executive retirement plans and deferred income plans, which increased $10,469 and $20,126 for the third quarter and first nine months, respectively, compared to fiscal 2008. Fiscal 2009 results also include a $3,591 pretax gain recognized on the dissolution of the Companys Carapelli USA, LLC joint venture. Additionally, the Company recorded a $2,400 investment write-off in the third quarter of fiscal 2008. Interest expense of $6,963 and $21,336 for the third quarter and first nine months of 2009, respectively, was comparable to prior year levels. The Company anticipates that interest expense will approximate $29,000 for fiscal 2009.
General corporate expense for the third quarter and first nine months was $9,974 and $28,018, respectively, compared to $2,907 and $18,982 for the comparable periods of fiscal 2008. Increased expense for the third quarter and nine months reflects higher medical and pension related expenses, which are expected to continue in upcoming quarters. Additional employee incentive plan costs also contributed to the increase for the quarter.
Cash used in investing activities decreased to $60,240 in the first nine months of fiscal 2009 from $124,229 in the comparable period of fiscal 2008. Decreased cash outflow related to acquisition activity was the primary driver of the decrease, due to the acquisition of Boca Grande in the third quarter of fiscal 2008 for $23,255. Lower fixed asset expenditures during fiscal 2009 also contributed to the decrease, declining to $71,029 for the first nine months of fiscal 2009 from $96,293 in the comparable period of fiscal 2008. The Company currently estimates its fiscal 2009 fixed asset expenditures to be approximately $100,000. The Companys investments in available-for-sale securities also resulted in a lower net cash outflow of approximately $12,800 for the first nine months of fiscal 2009 compared to the prior year.
Cash used in financing activities was $126,562 in the first nine months of fiscal 2009 compared to $98,964 in the same period of fiscal 2008. The Company used $13,876 for common stock repurchases in first nine months of fiscal 2009, compared to $56,472 in the same period of the prior year. For additional information pertaining to the Companys share repurchase plans or programs, see Part II, Item 2 Unregistered Sales of Equity Securities and Use of Proceeds. Offsetting this decrease were increased net payments on short-term debt. Additionally, cash flows generated from the Companys stock option plan decreased approximately $17,800 during the first nine months of fiscal 2009, as compared to the prior year.
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