SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
April 17, 2003
Date of Report
(Date of earliest event reported)
Hershey Foods Corporation
(Exact name of registrant as specified in its charter)
Delaware
(State or other jurisdiction of incorporation)
|
1-183
(Commission File Number) |
23-0691590
(IRS Employer Identification No.) |
100 Crystal A Drive, Hershey, Pennsylvania 17033
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (717) 534-6799
Page 1 of 3 Pages
Exhibit Index - Page 3
INFORMATION TO BE INCLUDED IN REPORT
The information in this Current Report on Form 8-K, including the exhibit, is furnished pursuant to Item 9 and Item 12 and shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities under that Section. Furthermore, the information in this Current Report on Form 8-K, including the exhibit, shall not be deemed to be incorporated by reference into the filings of Hershey Foods Corporation under the Securities Act of 1933.
Item 9. Regulation FD Disclosure
Item 12. Results of Operations and Financial Condition
On April 17, 2003, Hershey Foods Corporation (the “Corporation”) announced sales and earnings for the first quarter of 2003. A copy of the Corporation’s press release is furnished herewith as Exhibit 99.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Date: April 17, 2003
HERSHEY FOODS CORPORATION
By:
/s/Frank Cerminara
Frank Cerminara
Senior Vice President,
Chief Financial Officer
Page 2 of 3 Pages
Exhibit Index - Page 3
Exhibit Index
| Exhibit No. | Description |
| 99 |
Hershey Foods Corporation Press Release dated April 17, 2003. |
Page 3 of 3 Pages
Exhibit Index - Page 3
Exhibit 99
HERSHEY FOODS ANNOUNCES FIRST QUARTER RESULTS
HERSHEY, Pa., April 17, 2003--Hershey Foods Corporation (NYSE: HSY) today
announced sales and earnings for the first quarter ended March 30, 2003.
Consolidated net sales for the first quarter were $953,162,000 compared with
$988,506,000 for the first quarter of 2002. Net income was $97,558,000, or $.73
per share-diluted, compared with $87,045,000, or $.63 per share-diluted, in the
first quarter of 2002. Excluding a one-time business realignment charge of $9.0
million pre-tax, net income for the first quarter of 2002 was $92,743,000, or
$.67 per share-diluted. On this more comparable basis, 2003 earnings per
share-diluted increased by 9.0 percent.
-more-
This quarter's earnings increase was achieved despite the fact that the Company
increased its bad debt reserve by $5.0 million (pre-tax), or two cents per
share-diluted, as its best estimate of possible exposure to the Fleming
bankruptcy announced on April 1, 2003.
Hershey's first quarter sales for 2003 were essentially flat on a comparable
basis as a result of the buy-in associated with the price increase announced in
December 2002 and continued rationalization of the Company's product line. Gross
margin expanded as a result of improved pricing, product and channel mix, supply
chain savings, and lower raw ingredient and packaging costs. Selling, marketing
and administrative expenses were also lower in the quarter, despite the
provision for the Fleming bankruptcy.
"Our performance during the quarter was in line with expectations, despite a
challenging retail environment," said Richard H. Lenny, Chairman, President and
Chief Executive Officer. "Profitability and margins increased through a
combination of better sales mix and on-going productivity gains. Equally as
important, Hershey's market leadership position strengthened with solid gains
driven by new products, more effective advertising and continued growth within
convenience stores. We look forward to building momentum during the balance of
2003 behind our value-enhancing strategy.
-more-
In this regard, our sales expectations for the year are 2-3 percent growth on a
comparable basis. In addition, we continue to expect earnings growth in the 9-11
percent range for 2003."
SAFE HARBOR STATEMENT
- ---------------------
This release contains statements which are forward-looking. These statements are
made based upon current expectations which are subject to risk and uncertainty.
Actual results may differ materially from those contained in the forward-looking
statements. Factors which could cause results to differ materially include, but
are not limited to: changes in the confectionery and grocery business
environment, including actions of competitors and changes in confectionery
preferences; customer and consumer response to selling price increases; changes
in governmental laws and regulations, including taxes; market demand for new and
existing products; changes in raw material and other costs; pension cost factors
such as actuarial assumptions and market performance; adequacy of the Company's
bad debt reserve; and the Company's ability to implement improvements to reduce
costs associated with its supply chain, as discussed in the Company's annual
report on Form 10-K for 2002.
LIVE WEB CAST
- -------------
As previously announced, the Company will hold a conference call with analysts
today at 10 a.m. EDT. The conference call will be web cast live via Hershey's
corporate Web Site www.hersheys.com. Please go to the Investor Relations Section
of the Web Site for further details.
# # #
Media Contact: Christine M. Dugan 717-508-3238
Financial Contact: James A. Edris 717-534-7556
Hershey Foods Corporation
Summary of Consolidated Statements of Income
for the periods ended March 30, 2003 and March 31, 2002
(in thousands of dollars except per share amounts)
First Quarter
-------------
2003 2002
---- ----
Net Sales $953,162 $988,506
-------- --------
Costs and Expenses:
Cost of Sales 596,879 624,024
Selling, Marketing and Administrative 187,552 202,741
Business Realignment Charge, net --- 8,762
-------- --------
Total Costs and Expenses 784,431 835,527
-------- --------
Income Before Interest and Income Taxes 168,731 152,979
Interest Expense, net 14,611 15,465
-------- --------
Income Before Income Taxes 154,120 137,514
Provision for Income Taxes 56,562 50,469
-------- --------
Net Income $97,558 $87,045
======== ========
Net Income Per Share - Basic $0.73 $0.64
======== ========
- Diluted $0.73 $0.63
======== ========
Shares Outstanding - Basic 133,366 136,707
======== ========
- Diluted 134,228 138,219
======== ========
Hershey Foods Corporation
Pro Forma Summary of Consolidated Statements of Income
for the periods ended March 30, 2003 and March 31, 2002
(in thousands of dollars except per share amounts)
First Quarter
-------------
2003 2002
---- ----
Net Sales $953,162 $988,506
-------- --------
Costs and Expenses:
Cost of Sales 596,879 623,787 (a)
Selling, Marketing and Administrative 187,552 202,741
Business Realignment Charge, net --- --- (b)
-------- --------
Total Costs and Expenses 784,431 826,528
-------- --------
Income Before Interest and Income Taxes 168,731 161,978
Interest Expense, net 14,611 15,465
-------- --------
Income Before Income Taxes 154,120 146,513
Provision for Income Taxes 56,562 53,770
-------- --------
Net Income $ 97,558 $ 92,743
======== ========
Net Income Per Share - Basic $0.73 $0.68
======== ========
- Diluted $0.73 $0.67
======== ========
Shares Outstanding - Basic 133,366 136,707
======== ========
- Diluted 134,228 138,219
======== ========
(a) Excludes business realignment charges of $.2 million pre-tax, or $.1 million
after-tax.
(b) Excludes business realignment charge of $8.8 million pre-tax, or $5.6
million after-tax.
Hershey Foods Corporation
Consolidated Balance Sheets
as of March 30, 2003 and December 31, 2002
(in thousands of dollars)
Assets 2003 2002
- ------ ---- ----
Cash and Cash Equivalents $144,076 $297,743
Accounts Receivable - Trade (Net) 296,003 370,976
Inventories 554,483 503,291
Prepaid Expenses and Other 100,612 91,608
---------- ---------
Total Current Assets 1,095,174 1,263,618
Net Plant and Property 1,493,599 1,486,055
Goodwill 381,863 378,453
Other Intangibles 39,772 39,898
Other Assets 302,144 312,527
---------- -----------
Total Assets $3,312,552 $3,480,551
========== ==========
Liabilities and Stockholders' Equity
- ------------------------------------
Loans Payable $27,571 $28,124
Accounts Payable 121,729 124,507
Accrued Liabilities 322,820 356,716
Taxes Payable 45,686 12,731
Deferred Income Taxes 11,764 24,768
---------- ----------
Total Current Liabilities 529,570 546,846
Long-Term Debt 851,329 851,800
Other Long-Term Liabilities 361,345 362,162
Deferred Income Taxes 353,991 348,040
---------- ----------
Total Liabilities 2,096,235 2,108,848
Total Stockholders' Equity 1,216,317 1,371,703
---------- ----------
Total Liabilities and Stockholders' Equity $3,312,552 $3,480,551
========== ==========