- New Company Name to Reflect Broader Strategic Direction -
- Two New Business Groups Formed to Capitalize on Growth Opportunities -
- Increase in Authorized Stock to Provide Flexibility for Future Actions -
HERSHEY, Pa., Feb. 28 /PRNewswire-FirstCall/ -- Hershey Foods Corporation
(NYSE: HSY) today announced a number of steps in support of its value-
enhancing strategy. These include a proposed change in the company's name to
"The Hershey Company," the formation of two new business groups to capitalize
on growth opportunities, and a proposed increase in the company's authorized
stock.
In commenting on the announcement, Richard H. Lenny, Chairman, President
and Chief Executive Officer, Hershey Foods Corporation, said, "We established
our value-enhancing strategy and embarked upon our mission to execute it
consistently and predictably in October 2001. Delivering upon this strategy --
whose foundation is profitable organic growth with significantly improved
margins and return on investment -- has enabled us to achieve superior
performance on behalf of our stockholders and employees. The steps announced
today are designed to further support this value-enhancing strategy as well as
to build upon the marketplace strength we've achieved over the past three
years."
In commenting upon the Board of Directors' recommendation that
stockholders vote to change the company's name to "The Hershey Company," Lenny
said, "We're asking our stockholders to adopt the new name as this is how our
consumers and customers best know us. The new name conveys our long-term focus
on Hershey being a leading confectionery and snack company. We're retaining
our iconic name and enduring heritage as the key component of our corporate
identity."
The company also announced that it has formed two new business groups -- a
U.S. Confectionery business group and a U.S. Snacks business group -- in order
to strengthen its leadership within the confectionery segment and expand its
presence in the broader snacks market. Thomas K. Hernquist, the company's
current Senior Vice President, Chief Marketing Officer, has been named Senior
Vice President, President U.S. Confectionery. A search currently is underway
for a president of the U.S. Snacks business group.
"We're confident in our ability to sustain Hershey's superior performance
and to extend our reach within core confectionery and the broader $65 billion
snacks market. With the creation of these new business groups, we'll bring
sharper focus and energy to Hershey's unique, long-term growth opportunities
in each of these markets," said Lenny.
Hernquist, in his new role, will lead Hershey's domestic chocolate and
confectionery businesses. He also will continue to have responsibility for
Hershey's special retail outlets, including Hershey's Chocolate World visitors
center, Hershey's Time Square store and the new Hershey's Chicago store, set
to open in the spring of 2005. "Tom's leadership has been instrumental in the
success we have achieved through a combination of core brand growth and
accelerated new product innovation," said Lenny. "As president of Hershey's
U.S. Confectionery business group, he will ensure that we have the focus,
strategic alignment, as well as organizational resources needed to build on
this momentum. Tom's group, as well as the U.S. Snacks business group, will be
supported by the company's global operations, sales and administrative
capabilities."
Further, the company announced today that its Board of Directors has voted
to recommend that stockholders approve an increase in the number of authorized
shares of Common Stock and Class B Common Stock. While there are no current
plans to issue additional shares, stockholder approval of this proposal would
enable the company to consider and implement a stock split as well as respond
quickly as opportunities arise to achieve its strategic growth objectives. In
commenting on the Board's recommendation, Lenny said, "This proposed increase
in the number of authorized shares will ensure that we have the financial
resources to support the long-term growth of our company."
Hershey advanced its value-enhancing strategy during the past year through
the introduction of several new confectionery product platforms bringing news
and superior benefits to consumers -- including caramel-filled Kisses, Swoops,
S'mores, Ice Breakers Liquid Ice and Hershey's Take 5. New product
introductions in adjacent snack segments included the company's SnackBarz
line, Hershey's SmartZone balanced nutrition bars, and a four-item line of
premium cookies, all of which capitalize on Hershey's iconic brands,
confectionery expertise and leading-edge business system.
Momentum behind Hershey's expansion into new markets was strengthened in
2004 through innovative marketing partnerships and high-potential
acquisitions. Hershey's partnership with Latina pop superstar Thalia, as well
as such new products as Hershey's Kisses filled with dulce de leche and Jolly
Rancher lollipops with chili, significantly strengthened its presence in the
rapidly growing Hispanic market. The acquisition of Grupo Lorena increased the
company's Mexican business by over 40%, providing access to the many small
retail outlets in Mexico and creating the opportunity to expand the very
popular Pelon Pelo Rico brand in the U.S. Hershey also acquired Mauna Loa, the
leading brand of macadamia nuts and macadamia nut snacks -- a healthy snack
segment with immense opportunities to build the Mauna Loa brand and extend
Hershey brands.
About Hershey Foods Corporation
Hershey Foods Corporation (NYSE: HSY) is a leading snack food company and
the largest North American manufacturer of quality chocolate and non-chocolate
confectionery products. With revenues of over $4 billion and more than 13,000
employees worldwide, Hershey Foods markets such well-known brands as
Hershey's, Reese's, Hershey's Kisses, Kit Kat, Almond Joy, Mounds, York, Jolly
Rancher, Twizzlers, and Ice Breakers as well as innovative new products such
as Swoops and Hershey's S'mores. In addition to its traditional confectionery
products, Hershey Foods offers a range of products specifically developed to
address the nutritional interests of today's health-conscious consumer. These
products include sugar-free Hershey's, Reese's and York candies, as well as
Hershey's SmartZone bars for people seeking balanced nutrition. It also
markets Hershey's cocoa, Hershey's syrup and other branded baking ingredients,
toppings and beverages. Visit us at http://www.hersheynewsroom.com.
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 Company's business
environment, including actions of competitors and changes in consumer
preferences; customer and consumer response to selling price increases;
changes in governmental laws and regulations, including taxes; market demand
for new and existing products; changes in raw material and other costs;
pension cost factors such as actuarial assumptions, market performance, and
employee retirement decisions; successful resolution of upcoming labor
contract negotiations; the Company's ability to implement improvements to
reduce costs associated with its supply chain; and such other matters as
discussed in the Company's Annual Report on Form 10-K for 2003.
SOURCE Hershey Foods Corporation
02/28/2005
CONTACT: Media, Stephanie L. Moritz, +1-717-534-7641, or Financial
James A. Edris, +1-717-534-7556, both of Hershey Foods Corporation
Web site: http://www.hersheys.com
http://www.hersheynewsroom.com
(HSY)
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