The Hershey Company (NYSE: HSY):

  • James Mead and Anthony Palmer elected to Board of Directors
  • Board of Directors declares quarterly dividend of $0.345 on the Common Stock; $0.3125 on the Class B Common Stock
  • Outlook for full-year 2011 reaffirmed; net sales and adjusted earnings per share-diluted growth to be around the top of the Company's 3-5% and 6-8% long-term targets

The Hershey Company (NYSE: HSY) today held its Annual Meeting of Stockholders at which James M. Mead and Anthony J. Palmer were elected as new directors. Additionally, the seven existing Company directors who were also nominees recommended by the Board were reelected. Details of all the business conducted at the meeting and voting results will be summarized in a current report on Form 8-K that will be filed with the SEC on May 3, 2011.

The Company also announced that the Board declared a quarterly dividend of $0.345 on the Common Stock and a quarterly dividend of $0.3125 on the Class B Common Stock. The dividends are payable June 15, 2011, to stockholders of record on May 25, 2011.

Mead, 65, serves as Vice Chairman of the Board of Capital BlueCross, Harrisburg, Pennsylvania, a managed care and health insurance provider, where he also served as President and Chief Executive Officer from 1984 to 2004. He also is Managing Director of JM Mead, LLC, Camp Hill, Pennsylvania, an economic advisory firm serving the health care industry and a partner at Radius Ventures, LLC, New York, New York, a venture capital firm focused on leading-edge health and life sciences companies. He is actively involved in other professional and community activities. Specifically, he is a board member and Treasurer of the North American branch of the International Life Sciences Institute, Washington, D.C.; and a director of Hershey Trust Company and the board of managers of Milton Hershey School. Mr. Mead holds a bachelor's degree in economics and a Masters of Arts degree from The Pennsylvania State University.

Palmer, 51, is Senior Vice President and Chief Marketing Officer of Kimberly-Clark Corporation, Dallas, Texas, a manufacturer and marketer of various personal and health care products. He has held that position since October 2006. From June 2002 to September 2006, he worked at the Kellogg Company, Battle Creek, Michigan, in a variety of leadership positions in both U.S. and international markets. Prior to June 2002, he held various positions of significant responsibility in the consumer products field, including marketing and general management positions with the Minute Maid division of the Coca-Cola Company. Mr. Palmer holds a bachelor's degree in business marketing from Monash University in Melbourne, Australia, and a Masters of Business Administration degree, with distinction, from the International Management Institute, Geneva, Switzerland.

"We are pleased to have leaders of Jim's and Tony's capabilities join the Board," said James Nevels, Chairman of the Board of Directors, The Hershey Company. "Jim's experience in finance, marketing, insurance, information technology and risk management and Tony's domestic and international experience in consumer packaged goods will be of immense value to The Hershey Company as we continue to win in the global marketplace."

In his presentation to stockholders, David J. West, President and Chief Executive Officer, reaffirmed the Company's full-year 2011 outlook that it provided on April 26, 2011, stating that net sales, including the impact of foreign currency exchange rates, and adjusted earnings per share-diluted growth are expected to be around the top of the Company's long-term 3 to 5 percent and 6 to 8 percent objectives, respectively.

Note: In this release, Hershey references income measures which are not in accordance with U.S. generally accepted accounting principles (GAAP) because they exclude business realignment and impairment charges. These non-GAAP financial measures 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.

In 2010, the Company recorded GAAP charges of $53.9 million, or $0.14 per share-diluted, attributable to the Project Next Century program. Additionally, in the second quarter of 2010, the Company recorded a non-cash goodwill impairment charge of $44.7 million, or $0.20 per share-diluted, related to the Godrej Hershey Ltd. joint venture. In 2011, the Company expects to record total GAAP charges of about $45 million to $55 million, or $0.13 to $0.16 per share-diluted, attributable to Project Next Century. Below is a reconciliation of GAAP and non-GAAP items to the Company's 2010 adjusted earnings per share-diluted and projected adjusted earnings per share-diluted for 2011:

   

2010

2011 (Projected)

Reported EPS-Diluted $2.21 $2.54 - $2.63
Total Business Realignment
and Impairment Charges $0.34 $0.13 - $0.16
Adjusted EPS-Diluted * $2.55 $2.70 - $2.76

*Excludes business realignment and impairment charges.

 
 
Appendix I
 
The Hershey Company
Project "Next Century"
Expected Timing of Costs and Savings ($m)

 

 

 

2011

  

 

2012

  

 

2013

  

 

2014

Realignment Charges:                
Cash $ 20 to $ 25 $ 15 to $ 20 $ 5 to $ 10 - -
Non-Cash $ 20 to $ 25 $ 10 to $ 15 - - - -

 

Project Management and
Start-up Costs

 

 

$

5

 

 

$ 10  

to

  $ 15     -    

-

-

 

Total "Next Century" Realignment
Charges & Costs $ 45 to $ 55 $ 35 to $ 50 $ 5 to $ 10 - -

 

"Next Century" Cap-Ex $ 180 to $ 190 $ 50 to $ 65 $ 5 to $ 10 - -
"Normal" Hershey Cap-Ex $ 150 to $ 160 $ 140 to $ 150 $ 140 to $ 150 $ 140 to $ 150
Total Hershey Company
Capital Expenditures $ 330 to $ 350 $ 190 to $ 215 $ 145 to $ 160 $ 140 to $ 150

 

Total Hershey Company Deprc. &
Amort. Exp. (excl. accelerated D&A)

$

175

to

$

185

$

175

to

$

185

$

175

to

$

185

$

175

to

$

185

 

"Next Century" projected savings:
Annual $ 10 to $ 15 $ 20 to $ 25 $ 25 to $ 30 $ 5 to $ 10
Cumulative $ 10 to $ 15 $ 30 to $ 40 $ 55 to $ 70 $ 60 to $ 80
 

Safe Harbor Statement

This release contains statements that are forward-looking. These statements are made based upon current expectations that are subject to risk and uncertainty. Actual results may differ materially from those contained in the forward-looking statements. Factors that could cause results to differ materially include, but are not limited to: issues or concerns related to the quality and safety of our products, ingredients or packaging; changes in raw material and other costs; selling price increases, including volume declines associated with pricing elasticity; market demand for our new and existing products; increased marketplace competition; disruption to our supply chain; failure to successfully execute acquisitions, divestitures and joint ventures; changes in governmental laws and regulations, including taxes; political, economic, and/or financial market conditions; risks and uncertainties related to our international operations; disruptions, failures or security breaches of our information technology infrastructure; the impact of future developments related to the investigation by government regulators of alleged pricing practices by members of the confectionery industry, including risks of subsequent litigation or further government action; pension cost factors, such as actuarial assumptions, market performance and employee retirement decisions and funding requirements; the ability to implement our supply chain realignment initiatives within the anticipated timeframe in accordance with our cost estimates and our ability to achieve the expected ongoing annual savings from these initiatives; and such other matters as discussed in our Annual Report on Form 10-K for 2010. All information in this press release is as of April 28, 2011. The Company undertakes no duty to update any forward-looking statement to conform the statement to actual results or changes in the Company's expectations.

The Hershey Company
Financial Contact:
Mark Pogharian, 717-534-7556
ot
Media Contact:
Kirk Saville, 717-534-7641