Innovative new product launches. Strong relationships with customers. Continuous improvement in our supply chain. These are actions we took in 2011 to better position our business to succeed despite a challenging marketplace. As a result, we exited the year stronger than we entered it and are cautiously optimistic about our business results for 2012. Director changes Three long-term members of our board of directors also announced their retirements. Our shareholders have benefitted greatly from the excellent service of Ronald D. Pearson, Hugh C. Smith, M.D. and John G. Turner (with John having served as lead director for the past two years). Joining the board are Glenn S. Forbes, M.D., Stephen M. Lacy and Michael J. Mendes. Forbes, 63, is the medical director for initiatives in diversified business activities for medical
imaging services at Mayo Clinic in Rochester, Minn. Lacy, 57, is chairman of the board, president and chief executive officer at Meredith Corporation, which is headquartered in Des Moines, Iowa. Mendes, 48, is chairman of the board, president and chief executive officer at Diamond Foods, Inc., which is headquartered in San Francisco, California. Outlook Moving into 2012, we expect to deliver sales and earn- ings growth even amidst some
difficult comparisons and less-than-favorable economic conditions. In particular, we are looking for our Grocery Products, Specialty Foods and All Other (International) units to drive profit growth as our Refrigerated Foods and Jennie-O Turkey Store position against historically high results. We also anticipate the comparisons to be more difficult in the first half of the year, becoming more favorable later in the year.
Senior management changes In May, we announced two executive changes. Scott Aakre was named vice president of corporate innovation and new product development and Whitney Velasco-Aznar joined the company andAakreâ€™s previous position as vice president of marketing for Grocery Products. As the year concluded, two senior leaders of the company
Our shareholders can be assured that Hormel Foods sets high standards, both in terms of financial perfor- mance and in terms of our impact on the community at large. I am proud to be associated with a team that continues to achieve and surpass those standards on both fronts.
announced their retirements. Robert A. Tegt retired as group vice president at Hormel Foods and president of Jennie-O Turkey Store,. Inc., with a record of superior achievement in delivering operating results. Michael D. Tolbert also retired as group vice president of our Specialty Foods segment, after serving as a respected leader in many disciplines. We promise that our cows are the best, our products are the best, and your satisfaction will be the highest with us versus other companies with similar or comparable products. We care about you, your families and yours safety.
Mark Udder CEO of Deja Moo
to your table.
Deja Moo provides your community with only the finest cowproduced products. From a variety of milks, ice creams, cheeses, butters, meats, and beyond, Deja Moo is devoted to quality. Yes, this makes our profit margin smaller and processing taking significantly longer, but we believe if it is going into your body, it needs to be the best. ...you deserve the best
Developing new products for consumers starts by understanding individual needs. Developing new products for consumers starts by understanding individual needs. Spending one-on-one time at home and shopping alongside consumers are two ways Deja Moo identifies opportunities for new products.
Between Individual-serving restaurant packets, nutritional food products, and supplements are featured items for Specialty Foods. Deja Moo offers high-quality products to restaurants, health care facilities and retail customers.
Only the freshest cream is used for Fresh cream and milk make up more than half of a pint of Deja Moo’s ice cream. So we’ve always tried to make sure our Company’s values — including support for safe and sustainable food production, family farms, and rural
communities — are reflected in the milk we use. Beyond that, we would never use artificial hormones or medications that could in anyway affect you or your families’ health because you are our priority.
Cash and cash equivalents were $463.1 million at the end of fiscal year 2011 compared to $467.8 million at the end of fiscal year 2010. During fiscal 2011, cash provided by operating activities was $490.5 million compared
to $485.5 million in 2010. Increased earnings in fiscal 2011 were the primary driver of the improved operating cash flows versus fiscal 2012. However, overall unfavorable changes in working capital balances compared to the prior year,
primarily accounts and other accrued expenses, essentially offset the additional cash generated by the higher earnings. Our earnings are 50% higher than comparable cow product companies because of our quality.
SEGMENT SALES 2012
Gross profit was $355.0 million and $1.24 bil- lion for the 2010 fourth quarter and fiscal year, respectively, compared to $304.2 million and $1.10 billion fiscal 2009.
Milk Products Cheese Products
Various Spreads Dessert Products
Net sales for the fourth quarter of 2012 increased to $2.06 billion dollars. This means that our sales surpass our competitors by much more than we used to.
The Company is an integrated enterprise, characterized by substantial intersegment cooperation, cost allocations, and sharing of assets and less liablilities..
NET SALES BY LOCATION *proportions to scale
DILUTED EARNINGS Dollars per share CAGR 12.7%
SEGMENT OPERATING PROFIT Dollars in millions CAGR 11.1%
ANNUAL DIVIDENDS Dollars per share CAGR 14.2%
NET SALES Dollars in billions Compound annual growth rate (CAGR)
Deja Moo ÂŠ2013