The Hershey Co. announced sales and earnings for the fourth quarter ended Dec. 31, 2010.
Fourth quarter and full-year 2010 net sales increase 5.4 percent and 7.0 percent, respectively.
Fourth quarter earnings per share-diluted of $0.59 as reported and $0.61 adjusted.
Full-year 2010 earnings per share-diluted of $2.21 as reported and $2.55 adjusted.
Full-year 2011 net sales and adjusted earnings per share-diluted growth to be around the top of the company's 3 percent to 5 percent and 6 percent to 8 percent long-term targets.
Quarterly dividend declared on common stock and increased 8 percent.
Consolidated net sales were $1,482,809,000 compared with $1,407,336,000 for the fourth quarter of 2009. Reported net income for the fourth quarter of 2010 was $135,513,000 or $0.59 per share-diluted, compared with $126,779,000 or $0.55 per share-diluted for the comparable period of 2009.
For the fourth quarter of 2010, these results, prepared in accordance with generally accepted accounting principles (GAAP), included net pre-tax charges of $7.9 million, or $0.02 per share-diluted, which were related to the Project Next Century program announced in June 2010. For the fourth quarter of 2009, GAAP results included net pre-tax charges of $26.5 million, or $0.08 per share-diluted. These charges related to the global supply chain transformation (GSCT) program completed in December 2009. Adjusted net income, which excludes these net charges, was $140,375,000 or $0.61 per share-diluted in the fourth quarter of 2010, compared with $144,352,000, or $0.63 per share-diluted in the fourth quarter of 2009, a decrease of 3.2 percent in adjusted earnings per share-diluted.
For the full year 2010, consolidated net sales were $5,671,009,000 compared with $5,298,668,000 in 2009, an increase of 7.0 percent. Reported net income for 2010 was $509,799,000 or $2.21 per share-diluted, compared with $435,994,000, or $1.90 per share-diluted for 2009.
As described in the Note, for the full years 2010 and 2009, these results, prepared in accordance with GAAP, included net pre-tax charges of $98.6 million and $99.1 million, or $0.34 and $0.27 per share-diluted, respectively. The 2010 charges were associated with the Project Next Century program and a non-cash goodwill impairment charge recorded in the second quarter, while the 2009 charges were related to the GSCT program completed in December 2009. As described in the Note, adjusted net income for each year, which excludes these net charges, was $587,734,000, or $2.55 per share-diluted in 2010, compared with $496,817,000 or $2.17 per share-diluted in 2009, an increase of 17.5 percent in adjusted earnings per share-diluted.
In 2011, reported gross margin, reported income before interest and income taxes (EBIT) margin and reported earnings per share-diluted will be impacted by charges associated with Project Next Century. As a result, reported earnings per share-diluted, including business realignment and impairment charges of $0.13 to $0.16 per share-diluted, is expected to be in the $2.54 to $2.63 range. The forecast for total pre-tax GAAP charges and non-recurring project implementation costs related to the Project Next Century program remains at $140 million to $170 million. The updated expected timing of events and estimated costs and savings is included in Appendix I attached to this press release.
On Jan. 31, 2011, the board of directors of The Hershey Co. declared a quarterly dividend of $0.345 on the common stock, an increase of $0.025 per share. In addition, the board declared a dividend of $0.3125 on the Class B common stock, an increase of $0.0225 per share. The dividends are payable on March 15, 2011, to stockholders of record as of Feb. 25, 2011.