| HERSHEY, Pa., April 23 /PRNewswire/ -- Hershey Foods Corporation (NYSE: HSY) today announced its financial results for the first quarter ended April 4, 1999. Consolidated net sales were $945,152,000 compared with $1,098,076,000 for the first quarter of 1998. Net income was $224,670,000, or $1.57 per share diluted, including the after-tax gain on the January 1999 sale of the pasta business of $165,016,000, or $1.15 per share diluted. Excluding the gain on the sale of the pasta business, net income for the first quarter of 1999 was $59,654,000, or $.42 per share diluted, compared with $75,433,000, or $.52 per share diluted, for the first quarter of 1998.
''As we announced last week, we had expected lower sales and earnings as a result of the divestiture of our pasta business, as well as difficult sales volume comparisons for our domestic confectionery business vis-a-vis a very strong first quarter of 1998,'' said Kenneth L. Wolfe, Chairman and Chief Executive Officer. ''However, the earlier Easter in 1999 and lower sales of our more profitable standard bars compounded the situation. The pasta divestiture on a net basis removed approximately $80 million in sales and approximately four cents a share from our 1999 first quarter.
''Hershey's confectionery retail sales growth continued to surpass the category during the first quarter, but our factory shipments during the period did not keep pace because of timing of product shipments to retailers. The lower sales impact in the first quarter of 1999 was offset somewhat by cost reductions including further changes in our retiree medical programs, lower net interest expense and fewer weighted average shares outstanding.
''For the remainder of the year, we expect confectionery sales increases more in line with our retail sales movement and continued cost improvements to result in another record year for Hershey Foods,'' Wolfe concluded.
Hershey Foods Corporation
Summary of Consolidated Statements of Income
for the periods ended April 4, 1999 and April 5, 1998
(in thousands of dollars except per share amounts)
First Quarter
1999 1998
Net Sales $945,152 $1,098,076
Costs and Expenses:
Cost of Sales 562,164 652,340
Selling, Marketing and Administrative 266,754 299,370
Gain on Sale of Business (243,785) --
Total Costs and Expenses 585,133 951,710
Income Before Interest and Income Taxes 360,019 146,366
Interest Expense, Net 18,440 22,706
Income Before Income Taxes 341,579 123,660
Provision for Income Taxes 116,909 48,227
Net Income $224,670 $75,433
Net Income Per Share - Basic $1.58 $.53
- Diluted $1.57 $.52
NOTE: Net Income Per Share - Basic and Diluted have been computed
based on the provisions of Statement of Financial Accounting Standards
No. 128 Earnings per Share. Basic shares outstanding for the first quarter
of 1999 were 141,795,000 compared with 143,376,000 for the first quarter
of 1998. Diluted shares outstanding for the first quarter of 1999 were
143,293,000 compared with 145,461,000 for the first quarter of 1998.
Net income for the first quarter of 1999 includes a one-time, after-tax
gain on the January 1999 sale of the corporation's pasta business of
$165,016,000, or $1.15 per share diluted.
Consolidated Balance Sheets
as of April 4, 1999 and December 31, 1998
(in thousands of dollars)
Assets 1999 1998
Current Assets $1,025,664 $1,133,966
Property & Equipment, net 1,533,238 1,648,058
Intangibles Resulting from
Business Acquisitions 460,054 530,464
Other Assets 84,506 91,610
$3,103,462 $3,404,098
Liabilities and
Stockholders' Equity 1999 1998
Current Liabilities $574,185 $814,824
Long-term Debt 879,095 879,103
Other Long-term Liabilities 327,297 346,769
Deferred Income Taxes 299,540 321,101
Stockholders' Equity 1,023,345 1,042,301
$3,103,462 $3,404,098
SOURCE: Hershey Foods Corporation
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