| HERSHEY, Pa., Jan 8, 2002 /PRNewswire via COMTEX/ -- Hershey Foods Corporation
(NYSE: HSY) today announced a higher realignment charge and additional
anticipated savings from its value-enhancing initiatives announced on October
24, 2001. The changes primarily reflect higher employee acceptance of its
previously announced voluntary work force reduction program, one part of a broad
strategy to enhance the future operating performance of the Company.
As a result of the changes, the business realignment charges announced in
October will increase from $275 million to $310 million and from $1.24 to $1.39
per share-diluted, while projected savings will increase approximately $15
million annually to $75-$80 million per year when fully implemented. Consistent
with the strategic direction, on-going savings will be substantially reinvested
in enhanced brand building and selling capabilities.
The Corporation expects to record a charge of $1.25 per share-diluted in the
fourth quarter of 2001, including $.22 per share-diluted of operating charges
related to its previously announced raw material inventory reductions and $1.03
per share-diluted related to previously announced restructuring activities,
including the work force reduction initiatives. The $.14 per share-diluted
balance of the realignment charge will occur during 2002.
"Our underlying business performance remains on track and in line with previous
guidance. This greater acceptance of our voluntary work force reduction program
is good for both our employees and our shareholders. It enables Hershey to
further streamline the organization and free up additional funds for investment
in our business," said Richard H. Lenny, Chairman of the Board, President and
Chief Executive Officer.
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 consumer
preferences; changes in governmental laws and regulations, including taxes;
market demand for new and existing products; the Company's ability to implement
improvements to and reduce costs associated with the Company's distribution
operations; pension cost factors, such as actuarial assumptions and employee
retirement decisions; the Company's ability to sell certain assets at targeted
values; and changes in raw material and other costs, as discussed in the
Company's Annual Report on Form 10-K for 2000.
SOURCE Hershey Foods Corporation
CONTACT: John C. Long, +1-717-534-7631 or Financial: James A. Edris,
+1-717-534-7556, both of Hershey Foods
URL: http://www.hersheys.com
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