This excerpt taken from the HSY 8-K filed Oct 20, 2005.
Our results for the third quarter continued the momentum from the first half behind new product innovation, strong seasonal sales, and net price realization, said Richard H. Lenny, Chairman, President and Chief Executive Officer. Sales growth, excluding the impact of business acquisitions, of 6.5 percent was broad-based with solid gains in both our core confectionery business and our new snack platforms. Acquisitions contributed 2.6 percent to the total top-line growth. The combination of strong top-line growth and tight expense control, despite higher input costs, resulted in record profitability. Excluding the one-time charges, diluted earnings per share from operations increased 13.6 percent.
Performance for the first nine months has been excellent with strong gains in net sales, market share, and profitability. Were anticipating a solid fourth quarter given the good start to the important seasonal period and the upcoming introduction of several new products, most notably Hersheys Kissables and Hersheys Kisses filled with peanut butter. In addition, we expect to maintain effective cost controls across the business system, thereby yielding a gain in operating margins.
Therefore, for 2005 we expect net sales to increase at a rate above our long-term goal of 3-4 percent and diluted earnings per share from operations should increase at a rate greater than our long-term range of 9-11 percent.
As we look to 2006, our goal is to build upon the marketplace momentum established over the past several quarters. The strategy of benefit-driven innovation continues to resonate with consumers. Our plans reflect a step-up in new product innovation while capitalizing on key growth opportunities with the more profitable classes of trade.
Against this backdrop of strong performance are broadly higher input costs. Were now developing plans to address these cost pressures. These plans will include both productivity initiatives as well as the benefit of our previously announced business realignment program. Were confident in our ability to achieve organic sales growth in 2006 somewhat above our 3-4 percent long-term goal with an increase in diluted earnings per share, excluding business realignment charges, slightly above 9-11 percent.
Based on current estimates, the cost to implement the business realignment program will result in total pre-tax charges of approximately $140 million to $150 million, or $.41 to $.44 per share-diluted on an after-tax basis. Approximately 90 percent of the charge will be recorded in the second half of 2005, with the remainder recorded in the first half of 2006.
Note: In this sales and earnings release, Hershey has provided income measures excluding certain items described above, in addition to net income determined in accordance with generally accepted accounting principals (GAAP). These non-GAAP financial measures, as shown in the attached pro forma income statements, are used in evaluating results of operations for internal purposes. These non-GAAP measures are not intended to replace the presentation of financial results in accordance with GAAP. Rather, the Company believes exclusion of such items provides additional information to investors to facilitate the comparison of past and present operations.
This excerpt taken from the HSY 8-K filed Jan 26, 2005.
Fourth Quarter Performance
Hersheys fourth quarter sales increased by 7.5 percent, primarily attributable to strong unit volume growth for new products and limited editions. Despite higher commodity costs and expenses associated with new product introductions, earnings before interest and taxes grew by 11.7 percent, after excluding the charges for business rationalization and realignment in 2003. Shares outstanding declined as a result of the share purchase from the Milton Hershey School Trust in July, contributing to an increase of 17.2 percent in earnings per share-diluted.
The fourth quarter was excellent, said Richard H. Lenny, Chairman, President, and Chief Executive Officer. Strong sales growth fueled by new products and more efficient trade spending combined with solid cost control to deliver record profitability. Marketplace momentum accelerated as we gained market share in all major classes of trade. For the year, Hershey delivered record sales, earnings, and returns despite significant cost pressures. This performance further validates the sustainability of our value-enhancing strategy.
We expect this momentum to continue in 2005 behind additional consumer-driven innovation and superior performance across the value chain, both within core confectionery and the broader snack market. We expect organic net sales to grow near the top of our long-term objective of 3 to 4 percent, before the benefit of the business acquisitions completed in 2004. Earnings per share-diluted should increase within our long-range goal of 9 to 11 percent, Lenny concluded.
Note: In this sales and earnings release, Hershey has provided income measures excluding certain items described above, in addition to income determined in accordance with GAAP. These non-GAAP financial measures, as shown in the attached pro forma income statements, are used in evaluating results of operations for internal purposes. These non-GAAP measures are not intended to replace the presentation of financial results in accordance with GAAP. Rather, the Company believes exclusion of such items provides additional information to investors to facilitate the comparison of past and present operations.