UNITED
STATES
|
SECURITIES
AND EXCHANGE COMMISSION
|
Washington,
D.C. 20549
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______________________________
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FORM
8-K
|
CURRENT
REPORT
|
Pursuant
to Section 13 or 15(d) of the
|
Securities
Exchange Act of 1934
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January
24,
2008
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Date
of Report (Date of earliest event
reported)
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The
Hershey
Company
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(Exact
name of registrant as specified in its
charter)
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Delaware
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(State
or other jurisdiction of
incorporation)
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1-183
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23-0691590
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(Commission
File Number)
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(IRS
Employer Identification No.)
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100
Crystal A Drive, Hershey,
Pennsylvania 17033
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(Address
of Principal Executive Offices) (Zip
Code)
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Registrant's
telephone number, including area code: (717)
534-4200
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Check
the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant
under any
of the following provisions:
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[ ]
|
Written
communications pursuant to Rule 425 under the Securities Act (17
CFR
230.425)
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[ ]
|
Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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[ ]
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act
(17 CFR
240.14d-2(b))
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[ ]
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act
(17 CFR
240.13e-4(c))
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Item
2.02
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Results
of Operations and Financial
Condition
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Item
9.01
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Financial
Statements and Exhibits
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(d)
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Exhibits
|
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99.1
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Press
Release dated January 24, 2008
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THE
HERSHEY COMPANY
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|
By:
/s/ Humberto Alfonso
|
|
Humberto
(Bert) P. Alfonso
Senior
Vice President, Chief Financial
Officer
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Exhibit
No.
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Description
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99.1
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The
Hershey Company Press Release dated January 24,
2008
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·
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Full-year
2007 reported earnings per share $0.93 diluted; $2.08 diluted
from
operations
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·
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Consumer
investment to increase significantly in 2008, supporting
core
brands globally and
the
U.S. launch of Hershey’s BlissTM and
Starbucks® new products
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·
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Outlook
for 2008 growth in net sales 3-4%, with diluted EPS from
operations
expected to be in
the
$1.85 to $1.90 range
|
2006
|
2007
|
2008
|
||
Reported
/ Expected EPS-Diluted
|
$2.34
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$0.93
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$1.43
- $1.53
|
|
Total
Business Realignment and Impairment Charges
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$0.03
|
$1.15
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$0.37
- $0.42
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|
EPS-Diluted
from Operations*
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$2.37
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$2.08
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--
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|
Expected
EPS-Diluted from Operations*
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$1.85
- $1.90
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|||
Financial
Contact:
|
Mark
Pogharian
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717-534-7556
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Media
Contact:
|
Kirk
Saville
|
717-534-7641
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Summary
of Consolidated Statements of Income
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||||||||||||||||
for
the periods ended December 31, 2007 and December 31,
2006
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||||||||||||||||
(in
thousands except per share amounts)
|
||||||||||||||||
Fourth
Quarter
|
Twelve
Months
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|||||||||||||||
2007
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2006
|
2007
|
2006
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|||||||||||||
Net
Sales
|
$ |
1,342,222
|
$ |
1,336,609
|
$ |
4,946,716
|
$ |
4,944,230
|
||||||||
Costs
and Expenses:
|
||||||||||||||||
Cost
of Sales
|
924,745
|
854,543
|
3,315,147
|
3,076,718
|
||||||||||||
Selling,
Marketing and Administrative
|
232,762
|
200,264
|
895,874
|
860,378
|
||||||||||||
Business
Realignment and Impairment Charges, net
|
57,552
|
5,437
|
276,868
|
14,576
|
||||||||||||
Total
Costs and Expenses
|
1,215,059
|
1,060,244
|
4,487,889
|
3,951,672
|
||||||||||||
Income
Before Interest and Income Taxes (EBIT)
|
127,163
|
276,365
|
458,827
|
992,558
|
||||||||||||
Interest
Expense, net
|
28,062
|
31,528
|
118,585
|
116,056
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||||||||||||
Income
Before Income Taxes
|
99,101
|
244,837
|
340,242
|
876,502
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||||||||||||
Provision
for Income Taxes
|
44,758
|
91,265
|
126,088
|
317,441
|
||||||||||||
Net
Income
|
$ |
54,343
|
$ |
153,572
|
$ |
214,154
|
$ |
559,061
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||||||||
Net
Income Per Share - Basic - Common
|
$ |
0.24
|
$ |
0.68
|
$ |
0.96
|
$ |
2.44
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||||||||
-
Basic - Class B
|
$ |
0.22
|
$ |
0.61
|
$ |
0.87
|
$ |
2.19
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||||||||
-
Diluted - Common
|
$ |
0.24
|
$ |
0.65
|
$ |
0.93
|
$ |
2.34
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||||||||
Shares
Outstanding - Basic - Common
|
166,873
|
170,944
|
168,050
|
174,722
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||||||||||||
- Basic - Class B
|
60,808
|
60,816
|
60,813
|
60,817
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||||||||||||
- Diluted - Common
|
229,722
|
235,292
|
231,449
|
239,071
|
||||||||||||
Key
Margins:
|
||||||||||||||||
Gross
Margin
|
31.1 | % | 36.1 | % | 33.0 | % | 37.8 | % | ||||||||
EBIT
Margin
|
9.5 | % | 20.7 | % | 9.3 | % | 20.1 | % | ||||||||
Net
Margin
|
4.0 | % | 11.5 | % | 4.3 | % | 11.3 | % | ||||||||
The
Hershey Company
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||||||||||||||||
Pro
Forma Summary of Consolidated Statements of
Income
|
||||||||||||||||
for
the periods ended December 31, 2007 and December 31,
2006
|
||||||||||||||||
(in
thousands except per share amounts)
|
||||||||||||||||
Fourth
Quarter
|
Twelve
Months
|
|||||||||||||||
2007
|
2006
|
2007
|
2006
|
|||||||||||||
Net
Sales
|
$ |
1,342,222
|
$ |
1,336,609
|
$ |
4,946,716
|
$ |
4,944,230
|
||||||||
Costs
and Expenses:
|
||||||||||||||||
Cost
of Sales
|
890,273 | (a) | 854,543 | (d) | 3,192,057 | (a) | 3,079,917 | (d) | ||||||||
Selling,
Marketing and Administrative
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228,867 | (b) | 200,106 | (e) | 883,251 | (b) | 860,112 | (e) | ||||||||
Business
Realignment and Impairment Charges, net
|
--- | (c) | --- | (f) | --- | (c) | --- | (f) | ||||||||
Total
Costs and Expenses
|
1,119,140
|
1,054,649
|
4,075,308
|
3,940,029
|
||||||||||||
Income
Before Interest and Income Taxes (EBIT)
|
223,082
|
281,960
|
871,408
|
1,004,201
|
||||||||||||
Interest
Expense, net
|
28,062
|
31,528
|
118,585
|
116,056
|
||||||||||||
Income
Before Income Taxes
|
195,020
|
250,432
|
752,823
|
888,145
|
||||||||||||
Provision
for Income Taxes
|
70,900
|
93,425
|
271,016
|
321,511
|
||||||||||||
Net
Income
|
$ |
124,120
|
$ |
157,007
|
$ |
481,807
|
$ |
566,634
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||||||||
Net
Income Per Share - Basic - Common
|
$ |
0.56
|
$ |
0.70
|
$ |
2.16
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$ |
2.47
|
||||||||
-
Basic - Class B
|
$ |
0.50
|
$ |
0.63
|
$ |
1.95
|
$ |
2.22
|
||||||||
-
Diluted - Common
|
$ |
0.54
|
$ |
0.67
|
$ |
2.08
|
$ |
2.37
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||||||||
Shares
Outstanding - Basic - Common
|
166,873
|
170,944
|
168,050
|
174,722
|
||||||||||||
- Basic - Class B
|
60,808
|
60,816
|
60,813
|
60,817
|
||||||||||||
- Diluted - Common
|
229,722
|
235,292
|
231,449
|
239,071
|
||||||||||||
Key
Margins:
|
||||||||||||||||
Adjusted
Gross Margin
|
33.7 | % | 36.1 | % | 35.5 | % | 37.7 | % | ||||||||
Adjusted
EBIT Margin
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16.6 | % | 21.1 | % | 17.6 | % | 20.3 | % | ||||||||
Adjusted
Net Margin
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9.2 | % | 11.7 | % | 9.7 | % | 11.5 | % | ||||||||
(a)
Excludes business realignment and impairment charges of $34.5
million
pre-tax or $24.3 million after-tax for the fourth quarter and
$123.1
million pre-tax or $80.9 million after-tax for the twelve
months.
|
||||||||||||||||
(b)
Excludes business realignment and impairment charges of $3.9
million
pre-tax or $2.5 million after-tax for the fourth quarter and
$12.6 million pre-tax or $7.8 million after-tax for the twelve
months.
|
||||||||||||||||
(c)
Excludes business realignment and impairment charges of $57.6
million
pre-tax or $43.0 million after-tax for the fourth quarter and
$276.9
million pre-tax or $178.9 million after-tax for the twelve
months.
|
||||||||||||||||
(d)
Includes no business realignment and impairment charges (credits)
for the
fourth quarter and excludes business realignment credit of $(3.2)
million
pre-tax or $(2.0) million after-tax for the twelve months.
|
||||||||||||||||
(e)
Excludes business realignment and impairment charges of $0.2
million
pre-tax or $0.1 million after-tax for the fourth quarter and
$0.3 million pre-tax or $0.2 million after-tax for the twelve
months.
|
||||||||||||||||
(f)
Excludes business realignment and impairment charges of $5.4
million
pre-tax or $3.3 million after-tax for the fourth quarter and
$14.6 million pre-tax or $9.4 million after-tax for the twelve
months.
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The
Hershey Company
|
|||||||
Consolidated
Balance Sheets
|
|||||||
as
of December 31, 2007 and December 31, 2006
|
|||||||
(in
thousands of dollars)
|
|||||||
Assets
|
2007
|
2006
|
|||||
Cash
and Cash Equivalents
|
$ |
129,198
|
$ |
97,141
|
|||
Accounts
Receivable - Trade (Net)
|
487,285
|
522,673
|
|||||
Deferred
Income Taxes
|
83,668
|
61,360
|
|||||
Inventories
|
600,185
|
648,820
|
|||||
Prepaid
Expenses and Other
|
126,238
|
87,818
|
|||||
Total
Current Assets
|
1,426,574
|
1,417,812
|
|||||
Net
Plant and Property
|
1,539,715
|
1,651,300
|
|||||
Goodwill
|
584,713
|
501,955
|
|||||
Other
Intangibles
|
155,862
|
140,314
|
|||||
Other
Assets
|
540,249
|
446,184
|
|||||
Total
Assets
|
$ |
4,247,113
|
$ |
4,157,565
|
|||
Liabilities,
Minority Interest and Stockholders' Equity
|
|||||||
Loans
Payable
|
$ |
856,392
|
$ |
843,998
|
|||
Accounts
Payable
|
223,019
|
155,517
|
|||||
Accrued
Liabilities
|
538,986
|
454,023
|
|||||
Taxes
Payable
|
373
|
---
|
|||||
Total
Current Liabilities
|
1,618,770
|
1,453,538
|
|||||
Long-Term
Debt
|
1,279,965
|
1,248,128
|
|||||
Other
Long-Term Liabilities
|
544,016
|
486,473
|
|||||
Deferred
Income Taxes
|
180,842
|
286,003
|
|||||
Total
Liabilities
|
3,623,593
|
3,474,142
|
|||||
Minority
Interest
|
30,598
|
---
|
|||||
Total
Stockholders' Equity
|
592,922
|
683,423
|
|||||
Total
Liabilities, Minority Interest and Stockholders' Equity
|
$ |
4,247,113
|
$ |
4,157,565
|
|||