Hormel Foods 2011 Annual Report Download - page 24

22 Hormel Foods Corporation
fiscal 2009, which excludes a non-recurring charge of
$
9.7
million related to the closing of the Company’s Valley Fresh
plant incurred during the second quarter
(
see table recon
-
ciling 2010 adjusted segment profit to U.S. GAAP segment
profit for Grocery Products on pa
g
e 18). Profits throu
g
hout
fiscal
20
1
0
were ne
g
atively impacted by hi
g
her pork and beef
raw material costs, most si
g
ni
fi
cantly in the latter hal
f
o
f
the year. Mar
g
ins were constricted across several product
lines, includin
g
the
S
PA
M
®
family of products, bacon toppings,
a
nd hash and stew items. Im
p
roved
p
ro
fi
tability on chili and
m
icrowave meals, as well as
f
avorable equity in earnings
r
esults
f
rom the MegaMex joint venture, were able to o
ff
set
a
portion o
f
the declines experienced on these other core
p
roduct l
i
nes.
Re
f
rigerated Foods: Net sales
f
or the Re
f
ri
g
erated Foods
se
g
ment were up 26.
3
percent for the fiscal 2010 fourth quar
-
t
er and 11.1 percent for the twelve months compared to fiscal
2009. Tonnage increased 9.
3
percent for the fourth quarter
a
nd 2.
3
p
ercent for the fiscal year as com
p
ared to 2009. Both
r
etail and foodservice sales improved throughout fiscal 2010,
a
nd were particularly strong during the
f
ourth quarter. The
C
om
p
any’
s
H
orme
l
®
b
ran
d
e
d
p
ro
d
ucts were su
pp
orte
d
b
y t
h
e
“
Life Better Served” advertising campaign, which began in the
second
q
uarter of fiscal 2010
.
G
rocery Products:
G
rocery Products net sales increased 23.7
p
ercent for the fiscal 2010 fourth
q
uarter and 12.5
p
ercent
f
or the year compared to fiscal 2009. Tonnage increased
2
2.2 percent for the quarter and 14.4 percent for the year
compared to fiscal
2009
results. The incremental sales of
M
exican products
g
enerated by the
C
ompany’s new Me
g
aMex
j
oint venture drove the substantial top-line
g
rowth
f
or this
s
e
g
ment throu
g
hout the fiscal
20
1
0
fourth quarter and year.
T
hese sales more than compensated for the sales of
C
arapell
i
®
o
live oil that were discontinued durin
g
fiscal 2009. Excludin
g
both the new Me
g
aMex sales and the d
i
scont
i
nued
C
arapelli
®
sales, net sales for Grocery Products increased 12.6 percent
a
nd 4.3 percent for the fiscal 2010 fourth quarter and year,
respectively, compared to fiscal
2009
.
S
ales results for other core products within
G
rocery Products
w
ere also stron
g
durin
g
fiscal
20
1
0
, includin
g
H
o
rm
el
®
ch
i
l
i
an
d
H
orme
l
®
M
ary
K
itc
h
en
®
hash. Follow
i
ng decl
i
nes earl
i
er
in the year, sales o
f
the SPA
M
®
f
amily o
f
p
roducts,
H
orme
l
®
Com
p
leat
s
®
m
i
crowave meals, and bacon topp
i
ngs also
re
g
ained momentum in the
f
ourth quarter with notable
i
ncreases over fiscal
2009
.
S
e
g
ment profit for
G
rocery Products decreased 6.
2
percent
for the fiscal
20
1
0
fourth quarter and 4.1 percent for the year
c
ompared to fiscal
2009
. Adjusted se
g
ment profit for
G
rocery
Products for fiscal
20
1
0
increased 1.
9
p
ercent com
p
ared to
S
egment Result
s
N
et sales and operatin
g
profits for each of the Company’s reportable se
g
ments are set forth below. The Company is an int
e
-
g
rated enterprise, characterized by substantial interse
g
ment cooperation, cost allocations, and sharin
g
o
f
assets. There
f
ore,
the
C
ompany does not represent that these se
g
ments, if operated independently, would report the operatin
g
profit and other
fin
a
n
c
i
a
l inf
o
rm
a
ti
o
n
s
h
o
wn
be
l
o
w.
Fourth Quarter Ende
d
Yea
r
E
n
ded
October
3
1
,
O
ctober
2
5
,
O
ctober
3
1
,
O
ctober
2
5
,
(
in thousands
)
2
0
1
0
2
009
%
Chan
g
e
20
1
0
2
00
9
%
Chan
ge
Net Sales
G
rocer
y
Products
$
2
87,112
$
2
32,04
3
23
.
7
$
1
,040,45
5
$
9
24,682
1
2.
5
R
e
f
ri
g
erated Food
s
1
,082,94
1
857,17
8
2
6.
3
3,818,78
8
3,436,242
1
1.
1
Jennie-O Turke
y
Store 402,04
8
337,544
1
9.
1
1
,310,412
1
,227,70
9
6
.
7
S
p
ecialty Food
s
2
12,01
7
1
89,05
1
1
2.
1
782,95
8
708,73
0
1
0.
5
All Other 78,92
1
5
9,28
6
33
.
1
268,10
6
236,308 1
3
.
5
Tota
l
$
2
,063,03
9
$
1
,675,102
23
.2
$
7
,220,71
9
$
6
,533,67
1
1
0.
5
S
e
g
ment Operatin
g
Profit
G
rocery Products
$
4
3,
1
3
4
$
4
6
,
004
(
6.2
)
$
1
55
,
922
$
1
62
,
5
31
(
4.1
)
R
efrigerated Food
s
86
,
06
5
70
,
44
0
22.2
2
76
,3
1
5
2
26
,
17
1
22.2
Jennie-O Turkey Store 47
,
544
2
5
,
062
8
9.
7
1
4
3,
644 86
,
90
9
6
5.
3
Specialty Food
s
1
9
,
88
6
2
1
,
24
7
(
6.4
)
80
,
72
7
6
8
,
484
17.9
All
O
th
e
r 9
,
44
8
9
,
69
5
(
2.5
)
26
,
126 27
,
6
3
1
(
5.4
)
Total segment operating profit
2
06
,
07
7
1
72
,
44
8
1
9.
5
6
82
,
7
3
4
5
71
,
72
6
19.4
Ne
t
i
nt
e
r
es
t
a
n
d
i
nv
es
tm
e
nt
expense
(
income
)
4,
572 4
,
48
1
2
.
0
2
2
,
024 8
,
4
3
2
16
1.2
G
eneral corporate expense
1
4
,
88
9
1
0
,
294 44.
6
40
,3
4
8
3
8
,3
12 5.
3
N
oncontroll
i
ng
i
nterest
1,
46
0
7
30
100
.
0
4,
18
9
3,
16
5
3
2.4
E
arnings before income taxes
$
1
88
,
07
6
$
1
58
,
40
3
18
.
7
$
6
24
,
55
1
$
5
28
,
14
7
1
8.
3