Hormel Foods announces two-for-one stock split

Hormel Foods Corporation (NYSE: HRL) has announced its Board of Directors has authorized a two-for-one split of the company’s common stock. This would be the 10^th stock split in the company’s history.
“For the second time in the last five years, we are excited to announce a proposed two-for-one stock split,” said Jeffrey M. Ettinger, chairman of the board and chief executive officer at Hormel Foods. “This decision acknowledges our track record of providing our shareholders solid long-term returns and demonstrates our confidence that we will continue to grow our sales and earnings in the future. In addition, we anticipate this will also put our stock price in a more attractive trading range for a number of individual investors.”
Stockholder approval of the stock split is required during the company’s Annual Meeting being held Jan. 26. Under the proposal, the number of authorized shares of voting common stock would increase from 800 million to 1.6 billion.
The Board of Directors established Jan. 26 as the record date for stockholders who would be entitled to receive the split shares. One additional share of common stock will be issued to stockholders around Feb. 9 for each share of common stock they hold on the record date.

Hormel distributes $17.8 million to employees

Hormel Foods Corporation distributed its annual profit sharing of $17.8 million to eligible hourly and salaried employees during its 77^th annual Thanksgiving Eve Day tradition.
"Our company has achieved seven consecutive years of record earnings," said Jeffrey M. Ettinger, chairman of the board and chief executive officer at Hormel Foods. "These results are due to the tremendous efforts of our dedicated employees year after year. We are proud to share in the success of our company with our team."
"Our employees continue to produce and deliver safe, wholesome and high-quality products to our customers and consumers," said James P. Snee, president and chief operating officer at Hormel Foods. "Our profit sharing program is unique within the industry, and it is truly gratifying to be able to share our success with the Hormel Foods team."
Hormel Foods, a multinational marketer of consumer-branded food and meat products, continues to be among an elite group in the industry for retaining its profit sharing plan. The program was started by Jay C. Hormel in 1938 and is voluntarily paid at the discretion of the company’s board of directors.

Hormel Foods earnings up despite avian influenza losses

Hormel Foods reported a record fourth quarter performance with net earnings of $187.2 million for the fourth quarter of fiscal year 2015, up from the $171.3 million reported during the fourth quarter of fiscal year 2014. The company made this financial progress in spite of the losses its Jennie-O Turkey Store segment faced in the wake of the 2015 avian influenza outbreak.
The operating profit for Jennie-O Turkey Store for the quarter was down 23 percent, while volume was down 21 percent and dollar sales were down 18 percent.
More than offsetting those losses were strong performances in the Grocery Products division, Refrigerated Foods division and Specialty Foods division, with operating profits up 57, 27 and 63 percent, respectively.
“I am proud of the excellent fourth quarter delivered by our team, achieving record earnings for the tenth straight quarter. We reported record bottom line results for the full year, with fiscal 2015 adjusted net earnings up 19 percent over last year and all five segments registering earnings growth,” said Jeffrey M. Ettinger, Hormel Foods’ chairman of the board and CEO. “We did face some headwinds during the year, including lower revenues impacted by declining pork markets and the loss of sales and operational efficiency related to highly pathogenic avian influenza in the Jennie-O Turkey Store segment. Our experienced team navigated these challenges to post this impressive bottom line performance.”

Hormel Foods awards Environmental Sustainibility 'Best of the Best'

Hormel Foods Corporation has announced its Beijing HFC Plant was named the 2014 Environmental Sustainability Best of the Best winner for its achievements from the Beijing Project Blue Sky, which aimed to reduce carbon dioxide emissions. The annual award recognizes internal teams who have identified areas for efficiency and implemented changes in the category of environmental sustainability.
The plant replaced two coal fire boilers with more efficient steam generators and relocated the equipment closer to ovens to reduce energy loss. The team also installed heat recovery technology and thermal solar panels to heat water for sanitation. The result was a 60 percent decrease in greenhouse gas emissions in 2014, compared to 2013.
“The success of Project Blue Sky, and other Best of the Best finalists, demonstrates the impact one team can have at both the local- and corporate-level,” said Thomas E. Raymond, director of environmental sustainability at Hormel Foods. “Streamlining manufacturing processes makes an impact in our plant communities, and helps Hormel Foods meet its global environmental goals. Through this annual challenge, we continue to find ways to reduce our energy use, solid waste, water use and air emissions and exemplify what it means to be leader in sustainability.”
The other Environmental Sustainability Best of the Best finalists included:

• Atlanta Plant - Tucker, GA. Through educational newsletters, meetings and facility container improvements, reductions decreased to one trash pickup per week and solid waste to landfill was reduced by 42 percent compared to the previous year.
• Saag’s Products - San Leandro, CA. By engaging employees in recyclable material training, the plant reduced its solid waste to landfill by 89 tons, surpassing its original goal and improving recycling to 53 percent.
• Dold Foods - Wichita, KS. In an effort to minimize all solid waste streams, the plant realized an annualized savings of 127 tons of solid waste or 330 percent of the 2020 goal in fiscal 2014 alone.

The Environmental Sustainability Best of the Best champion is selected by a panel of judges at the Corporate Office in Austin, MN, based on the criteria of project scope and goal setting, teamwork, problem solving, achievement and savings.
Based on entries from 2014 alone, Hormel Foods documented the following annual savings from the 52 Environmental Sustainability Best of the Best projects:

• 82 million gallons in water use
• 8,100 MMBtu of natural gas
• 2,700,000 kWh of electricity
• 1,500 tons of solid waste
•  2,570 metric tons of greenhouse gas emissions 

Hormel Foods finalizes Applegate Farms acquisition

Hormel Foods Corporation has closed on its acquisition of leading natural and organic prepared meats company Applegate Farms LLC. Hormel Foods initially announced its intent to buy Applegate Farms in May.
Among Applegate Farms’ products are turkey deli meat, chicken strips, breaded chicken, hot dogs, bacon, breakfast and dinner sausage, corn dogs and pork.
As a growing number of consumers choose natural and organic products, this purchase provides Hormel Foods and the Applegate brand a faster path to expanded offerings in this high-growth category, the company stated. Applegate will operate autonomously as a stand-alone subsidiary in the Hormel Foods Refrigerated Foods segment.
The 2015 annual sales for Applegate are expected to be about $340 million. The purchase price is approximately $775 million. Including estimated deal costs and fair value adjustments, the deal is projected to be neutral to Hormel Foods earnings per share in fiscal 2015 and accretive by approximately 7 to 8 cents per share in fiscal 2016. Hormel Foods expects this acquisition to be accretive to company growth targets. 
Headquartered in Austin, Minnesota, Hormel Foods is also the parent company of Jennie-O Turkey Store, Spam, Saag’s, Stagg Chili, Dinty More, Chi-Chi’s, Don Miguel and Farmer John, among others.

5 ways Hormel Foods is reducing environmental footprint

Hormel Foods stated the ways it is helping reduce waste and reduce its environmental footprint in its recently released 2014 corporate responsibility report.
Five key areas where the company is making improvements to be more environmentally sustainable, according to the company, are:
1. Reduction of solid waste – Hormel Foods in 2014 implemented projects that reduced the amount of solid waste sent to landfills by more than 20 percent.
2. Reduction of greenhouse gas emissions – Hormel Foods reported that it reduced emissions of greenhouse gas from its domestic manufacturing operations by more than 2,500 metric tons.
3. Reduced energy use – In 2014, Hormel reduced its energy use by 17,400 million British Thermal Units (MMBTU).
4. Less water use – Hormel’s water usage during the 2014 reporting period was reduced by 0.082 billion gallons.
5. Reduction in product packaging – Hormel Foods reduced its product packaging by 8.27 million pounds in 2014.
“Our achievements in 2014 illustrate the dedication we have to being a responsible food manufacturer,” said Jeffrey M. Ettinger, chairman of the board, president and CEO of Hormel Foods.
This is the ninth corporate responsibility report released by Hormel Foods. The diverse meat, poultry and food company will continue to report on its environmental and social performance annually. The company’s next report will be released in June 2016 for data spanning from November 2014 to October 2015.

Hormel Foods to buy Applegate Farms

Hormel Foods has entered into a definitive agreement to acquire natural and organic value-added prepared meats company Applegate Farms LLC. The transaction is subject to customary closing conditions, including the receipt of regulatory approvals in the United States, and is expected to close within 60 days.
Among Applegate Farms’ products are Turkey deli meat, chicken strips, breaded chicken, hot dogs, bacon, breakfast and dinner sausage, corn dogs and pork.
“A growing number of consumers are choosing natural and organic products. This deal allows us to expand the breadth of our protein offerings to provide consumers more choice,” said Jeffrey M. Ettinger, chairman of the board, president and CEO of Hormel Foods. “The Applegate team has built a great brand, and consumers can rest assured there will not be any changes to the way Applegate meats are raised and produced. Together, we can provide a faster path to expanded offerings in this high-growth category.”
Applegate will operate autonomously as a standalone subsidiary in the company’s Refrigerated Foods segment. Applegate has 100 employees located primarily in Bridgewater, New Jersey, and the company will be managed by this core Applegate team plus a few new folks from the parent company who will relocate to Bridgewater. Applegate has strategic relationships with a diverse set of manufacturers and processors who draw from approximately 1,800 family farms.
“Over the last 28 years Applegate has brought transparency and clean ingredients to American favorites and classics like hot dogs, bacon and deli meat,” said Stephen McDonnell, Applegate founder and long-time CEO. “It was my mission from the start to change the way we think about meat – how it’s raised and produced – and this agreement is definitely a continuation of that mission.” 
Applegate 2015 annual sales are expected to be about $340 million. The purchase price is approximately $775 million. Including estimated deal costs and fair value adjustments, the deal is projected to be neutral to Hormel Foods earnings per share in fiscal 2015, and accretive by approximately 7 to 8 cents per share in fiscal 2016. Hormel Foods expects this acquisition to be accretive to company growth targets.
Credit Suisse is serving as exclusive financial advisor to Hormel Foods in connection with this transaction. The selling shareholders are Stephen McDonnell and Swander Pace Capital.

Hormel has record Q2 despite avian influenza woes

While the avian influenza outbreak in the United States posed financial challenges for Hormel Foods in the second quarter of fiscal year 2015, the company still had a record-setting second quarter with net earnings of $180.2 million. Those earnings were a 29 percent improvement over the $140.1 million net earnings Hormel Foods achieved during the same period in fiscal year 2014.
Despite having some of its turkey flocks hit by avian influenza, Hormel Foods subsidiary Jennie-O Turkey Store saw its operating profit rise by 41 percent, its volume rise by 14 percent and its dollar sales rise by 15 percent.
Hormel admitted that avian influenza cases began to impact Jennie-O operations toward the end of the quarter, the segment’s financial success was driven by the continued growth of value-added products and lower fuel and grain costs.
 “Jennie-O Turkey Store entered the quarter with excellent momentum and drove robust sales and earnings gains, but exited the quarter with substantial supply chain challenges brought on by avian influenza,” said Jeffrey M. Ettinger, chairman of the board, president and chief executive officer of Hormel Foods.


Outlook for Hormel Foods' second half
Ettinger said that he expects the current avian influenza situation to continue to challenge the company during the remainder of the fiscal year, but adds that companywide the diversified food company should benefit from the strengths of other business segments.
“While we enjoyed an excellent first half, we expect Jennie-O Turkey Store to be significantly challenged going forward due to the impacts of avian influenza on our turkey supply chain,” said Ettinger. “Refrigerated Foods and Grocery Products will continue to benefit from value-added product growth and lower pork input costs. Specialty Foods is positioned to deliver substantial earnings increases in the back half with the CytoSport business.”