ANNUAL REPORT ON FORM 10-K
HORMEL FOODS CORPORATION
OCTOBER 26, 200230, 2004
ANNUAL REPORT ON FORM 10-K
HORMEL FOODS CORPORATION
OCTOBER 26, 200230, 2004
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d)15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the Fiscal Year EndedOCTOBER 26, 200230, 2004 Commission File No.1-24021-2402
HORMEL FOODS CORPORATION
(Exact name of registrant as specified in its charter)
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(State or other | 41-0319970 |
1 HORMEL PLACE AUSTIN, MINNESOTA | 55912-3680 |
Registrant’s telephone number, including area code (507) 437-5611
Securities registered pursuant to Section 12(b) of the Act:
COMMON STOCK, PAR VALUE $.0586 PER SHARE | NEW YORK STOCK EXCHANGE |
Securities registered pursuant to Section 12 (g)12(g) of the Act:
NONE
(Title of Class)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months, and (2) has been subject to such filing requirements for the past 90 days. Yes X xNoo
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant'sregistrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendments to this Form 10-K. (X)x
Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Act). Yes X xNoo
The aggregate market value of the voting and non-voting stock held by non-affiliates of the registrant as of April 26, 200224, 2004, (the last business day of the registrant'sregistrant’s most recently completed second fiscal quarter), was $1,845,340,119,$2,289,051,474 based on the closing price of $24.99$31.04 per share on that date.
As of December 2, 2002,31, 2004, the number of shares outstanding of each of the Corporation'sregistrant’s classes of common stock was as follows:
Common Stock, $.0586 Par Value - 138,424,274Value—138,104,985 shares
Common Stock Non-Voting, $.01 Par Value - Value—0 shares
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Annual Stockholders'Stockholders’ Report for the year ended October 26, 2002,30, 2004, are incorporated by reference into Part I and Part II Items 5-9,5-8, and included as a separate section in the electronic filing to the SEC.exhibit 13.1 filed herewith.
Portions of the Proxy Statement for the Annual Meeting of the Stockholders to be held January 28, 2003,25, 2005, are incorporated by reference into Part III, Items 10-13.10-14.
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HORMEL FOODS CORPORATION
TABLE OF CONTENTS
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(a)General Development of Business
Hormel Foods Corporation, a Delaware corporation (the Company), was founded by George A. Hormel in 1891 in Austin, Minnesota, as George A. Hormel & Company. The Company started as a processor of meat and food products and continues in this line of business. The Company name was changed to Hormel Foods Corporation on January 31, 1995. The Company is primarily engaged in the production of a variety of meat and food products and the marketing of those products throughout the United States. Although pork and turkey remain the major raw materials for Hormel products, the Company has emphasized for several years the manufacture and distribution of branded, consumer packaged items rather than the commodity fresh meat business. In recent years, the Company's emphasis on branded products has
The Company’s branding strategy led to the introductiondevelopment of a joint venture between Hormel Foods Corporation and growthCargill Meat Solutions Corporation (formerly Excel Corporation), a wholly owned subsidiary of ethnic product lines, such as Chi-Chi'sCargill Incorporated. This joint venture began marketing and Herdez (Mexican), House of Tsang (Asian), Marrakesh Expressselling nationally branded fresh case ready beef and Peloponnese (Mediterranean), Carapelli Olive Oil (Italian), and Patak's (Indian).pork under the existing HORMEL ALWAYS TENDER brand name in fiscal year 2003. This 51 percent owned joint venture, named Precept Foods, LLC, is based in Austin, Minn.
Fiscal 2002 wasIn fiscal 2001, the first full year of operations for the Company's Jennie-O Turkey Store, Inc. (JOTS) turkey business. The JOTS operationbusiness was createdformed as a result of merging the Company'sCompany’s existing Jennie-O Foods, Inc. andbusiness with the operations of The Turkey Store Company, which was acquired in the second quarter of fiscal 2001. The Turkey Store Company was a turkey processing business headquartered in Barron, Wisconsin. The merged JOTS operation is currently the largest turkey processor in the world. JOTS markets its turkey products through its own sales force and independent brokers.
The Company strengthened its presence in the nutritionally enhanced food products market with the second quarter fiscal 2001 acquisitionacquisitions of Diamond Crystal Brands Nutritional Products formerly headquartered in Savannah, Georgia.fiscal 2001 and the Century Foods International business in July of fiscal 2003 strengthened the Company’s presence in the nutritional food products and supplements market. The Company currently operates as one of the largest companies inproviding nutritional products to the U.S. nutritionally enhanced foodhealthcare industry.
The Company acquired the Diamond Crystal Brands, Inc. business from Imperial Sugar Co. in December of fiscal 2003. Diamond Crystal Brands packages and sells various sugar, sugar substitute, salt and pepper products, market.savory products, drink mixes, and dessert mixes to retail and foodservice customers.
During the fourththird quarter of fiscal year 2001,2004, the Company exitedcompleted the sale of Vista International Packaging, Inc., its food processing equipment business by selling its wholly ownedpackaging subsidiary Algona Fabricationin Kenosha, Wisconsin.
The Company acquired the assets of Concept Foods Inc. (Concept) in October of fiscal 2004. Concept was renamed Alma Foods, LLC upon acquisition, and Equipment Co. (AFECO) in Algona, Iowa.manufactures a wide variety of fully cooked entrees.
On December 29, 2004, subsequent to the fiscal 2004 year end, the Company acquired all of the stock of Clougherty Packing Company (Clougherty). Clougherty is a privately held Southern California pork processor and creator of the “Farmer John” brand of pork products popular throughout the Southwestern United States.
Internationally, the Company markets its products through Hormel Foods International Corporation (HFIC), a wholly owned subsidiary. HFIC has a presence in the international marketplace through joint ventures and placement of personnel in strategic foreign locations such as China, Spain,Australia, and the Philippines. HFIC also has a global presence with minority positions in food companies in Spain (Campofrio Alimentacion S.A., 15%Mexico (Hormel Alimentos, 50% holding) and the Philippines (Purefoods-Hormel, 40% holding).
The Company has not been involved in any bankruptcy, receivership, or similar proceedings during its history. Substantially all of the assets of the Company have been acquired in the ordinary course of business. Financial resources and anticipated funds from operations are considered adequate to meet normal operating cash requirements.
The Company had no significant change in the type of products produced or services rendered, noror in the markets or methods of distribution since the beginning of the fiscal year.
(b)Industry Segment
The Company'sCompany’s business is reported in fourfive segments: Grocery Products, Refrigerated Foods, Grocery Products, Jennie-O Turkey Store, Specialty Foods, and All Other. The contributions of each segment to net sales to unaffiliated customers and operating profit, and the presentation of certain other financial information by segment are reported in Note K of the Notes to Consolidated Financial Statements and in the Management's
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Management’s Discussion and Analysis of the Annual Stockholder'sStockholder’s Report for the year ended October 26, 2002,30, 2004, incorporated herein by reference.
(c)Description of Business
Products and Distribution
The principalCompany’s products primarily consist of the Company are meat and other food products. The meat products which are sold fresh, frozen, cured, smoked, cooked, and canned. The percentages of total revenues contributed by classes of similar products for the last three fiscal years of the Company are as follows:
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| | October 26, 2002 | October 27, 2001 | October 28, 2000 |
| October 30, 2004 |
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| October 26, 2002 |
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| Perishable meat | 53.0 | % | 54.7 | % | 51.9 | % |
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| Nonperishable meat | 19.8 | 21.0 | 27.2 |
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| 19.8 |
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| Poultry | 22.6 | 20.3 | 17.5 |
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| 22.0 |
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| 22.6 |
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| Other | 4.6 | 4.0 | 3.4 |
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| 10.4 |
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| 8.7 |
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| 4.6 |
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| 100.0 | % |
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| 100.0 | % | 100.0 | % | 100.0 | % | |||||||||||||||
Reporting of revenues from external customers is based on similarity of products, as the same or similar products are sold across multiple distribution channels such as retail, foodservice, or international. To more precisely reflect the sales of each category, some reclassification of products has occurred from the October 28, 2000, percentages presented above. This reclassification caused a shift in revenues from the Nonperishable meat to the Perishable meat category. Revenues reported are based on financial information used to produce the Company'sCompany’s general-purpose financial statements.
Perishable meat includes fresh meats, sausages, hams, wieners, and bacon.bacon (excluding JOTS products.) Nonperishable meat includes canned luncheon meats, shelf stable microwaveable entrees, stews, chilies, hash, meat spreads and other items that do not require refrigeration, as well as frozen processed products. The Poultry category is composed primarily of JOTS products. The Other category primarily consists of nutritionally enhancednutritional food products food packaging (casings for dry sausage),and supplements, sugar and sugar substitutes, salt and pepper products, dessert mixes, and industrial gelatin products, and food manufacturing equipment.products. The food manufacturing equipment business was sold in fiscal 2001. The Poultry and Other categories havecategory has increased over the past two years primarily becausedue to the acquisitions of The Turkey StoreCentury Foods International (July 2003) and Diamond Crystal Brands Nutritional Products acquisitions(December 2002).
In fiscal 2004, the Company launched the Tetra Recart packaging design for its Hormel and Stagg chili brands. The launch included the national roll-out of Stagg chili, which had previously been sold only in markets west of the Mississippi River. The Company also introduced Jennie-O Turkey Store Oven Ready Turkey in the secondfourth quarter of fiscal 2001.2004. Additionally, the Company is currently marketing itsnew SPAM Singles product in four test markets. These three initiatives are proceeding on target with Company expectations.
No other new product in fiscal 20022004 required a material investment of the Company assets.
Domestically, the Company sells its products in all 50 states. Hormel products are sold through Company sales personnel, operating in assigned territories coordinated from district sales offices located in most of the larger U.S. cities, as well as independent brokers and distributors. During fiscal 2004, dedicated sales teams were also developed to serve major retail customers and coordinate sales of both Grocery Products and Refrigerated Foods products. As of October 26, 2002,30, 2004, the Company had approximately 600550 sales personnel engaged in selling its products. Distribution of products to customers is by common carrier.
Through HFIC, the Company markets its products in various locations throughout the world. Some of the larger markets include Australia, Canada, China, England, Japan, Mexico, and Micronesia. The
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distribution of export sales to customers is by common carrier, while the China operations own and operate their own delivery system. The Company, through HFIC, has licensed companies to manufacture various Hormel products internationally on a royalty basis, with the primary licenseelicensees being Tulip International of Denmark.Denmark and CJ Corp. of South Korea.
Raw Materials
The Company has, for the past several years, been concentrating on processed branded products for consumers with year-round demand to minimize the seasonal variation experienced with commodity type products. Pork continues to be the primary raw material for Company products. Although hog producers are moving toward larger, more efficient year-round confinement operations and supply contracts are becoming increasingly prevalent in the industry, there is still a seasonal variation in the supply of fresh pork materials. The Company’s expanding line of processed items has reduced but not eliminated the sensitivity of Company results to raw material supply and price fluctuations.
Livestock slaughtered by the Company is purchased by Company buyers and commission dealers at sale barns and terminal markets or under long-term supply contracts at locations principally in Minnesota, Illinois, Iowa, Nebraska, Colorado and South Dakota. The cost of livestock and the utilization of the Company'sCompany’s facilities are affected by both the level and the methods of pork production in the United States. The hog production industry has been rapidly moving to very large, vertically integrated, year-round confinement operations operating under long-term supply agreements. This has resulted in fewer hogs being available on the spot cash market, which decreases the supply of hogs on the open market and can severely diminish the utilization of slaughter facilities and increase the cost of the raw materials they produce. The Company, along with others in the industry, uses long-term supply contracts to manage the effects of this trend and to assure a stable supply of raw materials while minimizing extreme fluctuations in costs over the long-term. This may result in costs for live hogs that are either higher or lower than the spot cash market depending on the relationship of the cash spot market to contract prices. Contract costs are fully reflected in the Company'sCompany’s reported financial results. In fiscal 2002,2004, the Company purchased 7567 percent of its hogs under long-term supply contracts.
In fiscal 2002,2004, JOTS raised approximately 5354 percent of the turkeys needed to meet its raw material requirements for whole bird and processed turkey products. Turkeys not sourced within the Company are contracted with independent turkey growers. JOTS'JOTS’ turkey-raising farms are located throughout Minnesota and Wisconsin.
Production costs in raising turkeys are primarily subject to fluctuations in feed grain prices particularly corn. Inand to a lesser extent fuel costs. As part of the fourth quarter of fiscal 2002,Company’s risk management program, the Company began hedgingperiodically hedges its corn needs by purchasing cornanticipated purchases of grain using futures contracts. The corn futures contracts offsetCompany measures the fluctuationeffectiveness of these hedges on a regular basis and has determined all such hedges to be highly effective in reducing the Company’s exposure to price fluctuations in the Company's future direct corn purchases.cash grain market.
Manufacturing
The Company has plants in Austin, Minnesota; Fremont, Nebraska; and Beijing, China; and Rochelle, Illinois (Rochelle converted to a 100 percent further processing facility effective January 6, 2003)China that slaughter livestock for processing. Quality Pork Processors of Dallas, Texas, operates the slaughter facility at Austin under a custom slaughter arrangement.
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Facilities that produce manufactured items are located in Algona, Iowa; Alma, Kansas; Aurora, Illinois; Austin, Minnesota; Beloit, Wisconsin; Bondurant, Iowa; Browerville, Minnesota; Ft. Dodge, Iowa; Fremont, Nebraska; Houston, Texas; Knoxville, Iowa; Long Prairie, Minnesota; Mitchellville, Iowa; Osceola, Iowa; Perrysburg, Ohio; Quakertown, Pennsylvania; Rochelle, Illinois; Savannah, Georgia; Sparta, Wisconsin; Stockton, California; Tucker, Georgia; Visalia, California; Wichita, Kansas; Beijing, China; and Shanghai, China. Several companies performCompany products are also custom manufacturing for Hormel, including Owatonna Canning Company, Owatonna, Minnesota;manufactured by several other companies. The following are the Company’s larger custom manufacturers: Lakeside Packing Company, Manitowoc, Wisconsin; Schroeder Milk, Maplewood, Minnesota; Steuben Foods, Jamaica, New York; Power Packaging, St. Charles, Illinois; Criders, Stilmore, Georgia; and Tony Downs, St. James, Minnesota; and Pierre Foods of Claremont, North Carolina.Minnesota. Power Logistics, Inc., based in St. Charles, Illinois, operates distribution centers for the Company in Dayton, Ohio, and Osceola, Iowa.
The Company'sCompany’s turkey slaughter and processing operations are located in Barron, Wisconsin; Faribault, Minnesota; Marshall, Minnesota; Melrose, Minnesota; Montevideo, Minnesota; Pelican Rapids, Minnesota; and Willmar, Minnesota.
Patents and Trademarks
There are numerous patents and trademarks that are important to the Company'sCompany’s business. The Company holds fiveseven foreign and 4048 U.S. issued patents. Some of the trademarks are registered and some are not. In recognition of the importance of these assets, the Company created a subsidiary, Hormel Foods, LLC, in 1998 to create, own, maintain and protect most of the Company'sCompany’s trademarks and patents. Some of the more significant owned or licensed trademarks used in the Company'sCompany’s segments are:
HORMEL, ALWAYS TENDER, AMERICAN CLASSICS, AUSTIN BLUES, BLACK LABEL, CARAPELLI, CHI-CHI'S,CHI-CHI’S, CURE 81, CUREMASTER, DAN'SDAN’S PRIZE, DI LUSSO, DINTY MOORE, DUBUQUE, EL TORITO, FAST 'N‘N EASY, HERB-OX, HERDEZ, HOMELAND, HOUSE OF TSANG, JENNIE-O TURKEY STORE, KID'SKID’S KITCHEN, LAYOUT, LITTLE SIZZLERS, MARRAKESH EXPRESS, MARY KITCHEN, OLD SMOKEHOUSE, PATAK'S,PATAK’S, PELOPONNESE, PILLOW PACK, QUICK MEAL, RANGE BRAND, ROSA, GRANDE, SANDWICH MAKER, SPAM, STAGG, SWEET THING, THICK & EASY and WRANGLERS.
Customers and Backlog Orders
During fiscal year 2002,2004, no customer accounted for more than 10 percent of total Company sales. The five largest customers in each segment make up approximately the following percentage of segment sales: 3833 percent of Grocery Products, 3935 percent of Refrigerated Foods, 3332 percent of JOTS, 37 percent of Specialty Foods, and 2340 percent of All Other. The Company believes the loss of one or more of the top customers in any single customer would notof these segments could have a material adverse effect on the Company's business.results of such segment. Backlog orders are not significant due to the perishable nature of a large portion of the products and ordersproducts. Orders are accepted and shipped on a current basis.
Competition
The production and sale of meat and food products in the United States and internationally are highly competitive. The Company competes with manufacturers of pork and turkey products, as well as national and regional producers of other meat and protein sources, such as beef, chicken, and fish. The Company
believes that its largest domestic competitors for its Refrigerated Foods segment in 20022004 were Tyson Foods, Smithfield Foods and ConAgra Foods; for its Grocery Products segment, ConAgra Foods, Dial Corp. and Campbell Soup Co.; and for JOTS, ConAgra Foods and Cargill, Inc.
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All Hormel segments compete on the basis of price, product quality, brand identification, and customer service. Through aggressive marketing and strong quality assurance programs, the Company'sCompany’s strategy is to provide higher quality products that possess strong brand recognition, which would then support higher value perceptions from customers.
The Company competes using this same strategy in international markets around the world.
Research and Development
Research and development continues to be a vital part of the Company'sCompany’s strategy to extend existing brands and expand into new branded items. The expenditures for research and development for fiscal 2002, 20012004, 2003, and 2000,2002, respectively, were $12,097,000, $11,478,000approximately $15,944,000, $13,165,000, and $9,592,000.$12,097,000. There are 4051 professional employees engaged in full time research, 1823 in the area of improving existing products and 2228 in developing new products.
Employees
As of October 26, 2002,30, 2004, the Company had over 15,500approximately 15,600 active employees.
(d) Geographic Areas
Total revenues attributed to the U.S. and all foreign countries in total for the last three fiscal years of the Company are as follows (in thousands):
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| October 30, 2004 |
| October 25, 2003 |
| October 26, 2002 |
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United States |
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| 4,565,134 |
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| 4,027,520 |
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Foreign |
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| 214,741 |
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| 172,808 |
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| 204,210 |
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| 4,779,875 |
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| 3,910,314 |
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Revenues from external customers are classified as domestic or foreign based on the final customer destination. No individual foreign country is material to the consolidated results. Additionally, the company’s long-lived assets located in foreign countries are not significant.
(d)(e) Available Information
The Company makes available, free of charge on its website at www.hormel.com, its annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934. These reports are accessible under the “Investor” caption of the Company’s website and are available as soon as reasonably practicable after such material is electronically filed with or furnished to the Securities and Exchange Commission, which is within 24 hours.
The Company has adopted a Code of Ethical Business Conduct that covers its officers and directors, which is available on the Company’s website, free of charge, under the caption “Corporate.” The Company also adopted Corporate Governance Guidelines, which are available on the Company’s website, free of charge, under the caption “Investor.”
The Company’s Board of Directors conducts its business through meetings of the Board and the following standing committees: Audit, Compensation, Contingency, Governance, Employee Benefits, and
Executive. Each of the Audit, Compensation, Governance, Employee Benefits, and Executive Committees has adopted and operates under a written charter. Charters for the Audit, Compensation, and Governance Committees are available on the Company’s website, free of charge, under the caption “Investor — Corporate Governance.”
The documents noted above are also available in print, free of charge, to any stockholder who requests them.
(f)Executive Officers of the Registrant
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| Name | Age | Current Office and Previous Five Years Experience | Dates | Year First Elected Officer |
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| Joel W. Johnson | 59 | Chairman of the Board, President and Chief Executive Officer | 12/08/95 to Present | 1991 | Joel W. Johnson |
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| 06/28/04 to Present |
| 1991 | |||||
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| Chairman of the Board, President and Chief Executive Officer |
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Jeffrey M. Ettinger | Jeffrey M. Ettinger |
| 46 |
| President and Chief Operating Officer |
| 06/28/04 to Present |
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| Group Vice President/President and |
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| Chief Executive Officer Jennie-O Turkey Store |
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| 10/29/01 to 03/02/03 |
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| Chief Operating Officer Jennie-O Turkey Store |
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| Operating Officer Jennie-O Turkey Store |
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| Executive Officer Jennie-O Foods |
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Michael J. McCoy | 55 | Executive Vice President and Chief Financial Officer | 10/29/01 to Present | 1996 | Michael J. McCoy |
| 57 |
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| 10/29/01 to Present |
| 1996 | |||||
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| Vice President and Controller | 04/27/98 to 04/30/00 |
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Gary J. Ray | 56 | Executive Vice President Refrigerated Foods | 11/01/99 to Present | 1988 | Gary J. Ray |
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| 11/01/99 to Present |
| 1988 | |||||
| Executive Vice President Operations | 07/27/92 to 10/31/99 |
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Eric A. Brown | 56 | Group Vice President Prepared Foods | 12/02/96 to Present | 1987 | ||||||||||||||
Steven G. Binder | 45 | Group Vice President Foodservice | 10/30/00 to Present | 1998 | Steven G. Binder |
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| 10/30/00 to Present |
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| Director Foodservice Sales | 12/30/96 to 11/01/98 |
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Richard A. Bross | 51 | Group Vice President Hormel/President Hormel Foods International Corporation | 10/29/01 to Present | 1995 | Richard A. Bross |
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| 10/29/01 to Present |
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| Vice President Hormel/President Hormel Foods International Corporation | 11/01/99 to 10/28/01 |
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| Vice President Grocery Products | 01/30/95 to 10/31/99 |
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Ronald W. Fielding | Ronald W. Fielding |
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| 07/26/04 to Present |
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James A. Jorgenson | James A. Jorgenson |
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Mahlon C. Schneider | Mahlon C. Schneider |
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Thomas R. Day | Thomas R. Day |
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| 11/02/98 to 10/29/00 |
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Forrest D. Dryden | Forrest D. Dryden |
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Jody H. Feragen | Jody H. Feragen |
| 48 |
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| Assistant Treasurer, National Computer Systems |
| 12/01/95 to 10/29/00 |
|
| |||||||||
6
Jeffrey M. Ettinger | 44 | Group Vice President Hormel/President and Chief Operating Officer Jennie-O Turkey Store | 10/29/01 to Present | 1998 | ||||
| Vice President Hormel/President and Chief Operating Officer Jennie-O Turkey Store | 04/30/01 to 10/28/01 | |||||||
| Vice President Hormel/President and Chief Executive Officer Jennie-O Foods | 01/31/00 to 04/29/01 | |||||||
| Vice President Hormel/Jennie-O Foods | 11/01/99 to 01/30/00 | |||||||
| Treasurer | 04/27/98 to 10/31/99 | |||||||
| Assistant Treasurer | 11/24/97 to 04/26/98 | |||||||
| Special Assignment | 09/08/97 to 11/23/97 | |||||||
| Grocery Products Product Manager | 04/10/95 to 09/07/97 | |||||||
Ronald W. Fielding | 49 | Group Vice President Meat Products | 11/01/99 to Present | 1997 | ||||
| Vice President Hormel/President Hormel Foods International Corporation | 01/27/97 to 10/31/99 | |||||||
| President Hormel Foods International Corporation | 01/01/96 to 01/26/97 | |||||||
James A. Jorgenson | 58 | Senior Vice President Corporate Staff | 11/01/99 to Present | 1990 | ||||
| Vice President Human Resources | 12/30/91 to 10/31/99 | |||||||
Mahlon C. Schneider | 63 | Senior Vice President External Affairs and General Counsel | 11/01/99 to Present | 1990 | ||||
| Vice President and General Counsel | 11/19/90 to 10/31/99 | |||||||
Thomas R. Day | 44 | Vice President Foodservice Sales | 10/30/00 to Present | 2000 | ||||
| Director Foodservice Sales | 11/02/98 to 10/29/00 | |||||||
| Director Dubuque Foods Incorporated Foodservice Sales and Marketing | 03/07/94 to 11/01/98 | |||||||
Forrest D. Dryden | 59 | Vice President Research and Development | 01/26/87 to Present | 1987 | ||||
Jody H. Feragen | 46 | Vice President and Treasurer | 10/29/01 to Present | 2000 | ||||
| Treasurer | 10/30/00 to 10/28/01 | |||||||
| Assistant Treasurer, National Computer Systems in Eden Prairie, Minnesota, a data collection and software company | 12/01/95 to 10/30/00 | |||||||
Dennis B. Goettsch | 49 | Vice President Foodservice Marketing | 10/30/00 to Present | 2000 | ||||
| Director Foodservice Marketing | 10/01/90 to 10/29/00 | |||||||
Daniel A. Hartzog | 51 | Vice President Meat Products Sales | 10/30/00 to Present | 2000 | ||||
| Director of Meat Products Business Development | 07/03/00 to 10/29/00 | |||||||
| Meat Products Regional Sales Manager | 09/19/88 to 07/02/00 | |||||||
Kurt F. Mueller | 46 | Vice President Fresh Pork Sales and Marketing | 11/01/99 to Present | 1999 | ||||
| Director Fresh Pork Sales and Marketing | 02/03/97 to 10/31/99 | |||||||
| Manager Logistics and Customer Service Refrigerated Products | 03/06/95 to 02/02/97 | |||||||
Gary C. Paxton | 57 | Vice President Prepared Foods Operations | 11/01/99 to Present | 1992 | ||||
| Vice President Manufacturing | 01/27/92 to 10/31/99 |
|
|
|
|
|
|
| Year | |||||||
|
|
|
|
|
|
|
| First | ||||||
|
|
|
| Current Office and Previous |
|
|
| Elected | ||||||
Name |
|
|
| Age |
| Five Years Experience |
| Dates |
| Officer | ||||
|
|
|
|
|
|
|
|
| ||||||
Dennis B. Goettsch |
| 51 |
| Vice President (Foodservice Marketing) |
| 10/30/00 to Present |
| 2000 |
| |||||
|
|
| Director (Foodservice Marketing) |
| 10/01/90 to 10/29/00 |
|
|
| ||||||
Daniel A. Hartzog |
| 53 |
| Vice President (Consumer Products Sales) |
| 07/26/04 to Present |
| 2000 |
| |||||
|
|
|
| Vice President (Meat Products Sales) |
| 10/30/00 to 07/25/04 |
|
|
| |||||
|
|
|
| Director (Meat Products Business Development) |
| 07/03/00 to 10/29/00 |
|
|
| |||||
|
|
|
| Regional Sales Manager (Meat Products) |
| 09/19/88 to 07/02/00 |
|
|
| |||||
Kurt F. Mueller |
| 48 |
| Vice President (Consumer Products Sales) |
| 07/26/04 to Present |
| 1999 |
| |||||
|
|
| Vice President (Fresh Pork Sales and Marketing) |
| 11/01/99 to 07/25/04 |
|
|
| ||||||
|
|
| Director (Fresh Pork Sales and Marketing) |
| 02/03/97 to 10/31/99 |
|
|
| ||||||
Gary C. Paxton |
| 59 |
| Vice President (Specialty Foods Group) |
| 09/29/03 to Present |
| 1992 |
| |||||
|
|
|
| Vice President (Specialty Foods Group and Prepared |
| 12/30/02 to 09/28/03 |
|
|
| |||||
|
|
|
| Foods Operations) |
|
|
|
|
| |||||
|
|
|
| Vice President (Prepared Foods Operations) |
| 11/01/99 to 12/29/02 |
|
|
| |||||
|
|
|
| Vice President (Manufacturing) |
| 01/27/92 to 10/31/99 |
|
|
| |||||
Larry J. Pfeil |
| 55 |
| Vice President (Engineering) |
| 11/01/99 to Present |
| 1999 |
| |||||
|
|
| Director (Engineering) |
| 01/04/99 to 10/31/99 |
|
|
| ||||||
Douglas R. Reetz |
| 50 |
| Vice President (Consumer Products Sales) |
| 07/26/04 to Present |
| 1999 |
| |||||
|
|
|
| Vice President (Grocery Products Sales) |
| 11/01/99 to 07/25/04 |
|
|
| |||||
|
|
|
| Director (Grocery Products Sales and Business |
| 09/15/97 to 10/31/99 |
|
|
| |||||
|
|
|
| Development) |
|
|
|
|
| |||||
James N. Sheehan |
| 49 |
| Vice President and Controller |
| 05/01/00 to Present |
| 1999 |
| |||||
|
|
| Treasurer |
| 11/01/99 to 04/30/00 |
|
|
| ||||||
|
|
| President Hormel Financial Services Corporation |
| 09/21/98 to 10/31/99 |
|
|
| ||||||
William F. Snyder |
| 47 |
| Vice President (Refrigerated Foods Operations) |
| 11/01/99 to Present |
| 1999 |
| |||||
|
|
|
| Director (Fresh Pork Operations) |
| 09/27/99 to 10/31/99 |
|
|
| |||||
James M. Splinter |
| 42 |
| Vice President (Marketing-Consumer Products- |
| 06/02/03 to Present |
| 2003 |
| |||||
|
|
| Refrigerated Foods) |
|
|
|
|
| ||||||
|
|
| Senior Vice President Retail Division Jennie-O Turkey |
| 04/30/01 to 06/01/03 |
|
|
| ||||||
|
|
| Store |
|
|
|
|
| ||||||
|
|
| Senior Vice President Sales and Marketing Jennie-O |
| 09/06/99 to 04/29/01 |
|
|
| ||||||
|
|
| Turkey Store |
|
|
|
|
| ||||||
Joe C. Swedberg |
| 49 |
| Vice President (Legislative Affairs and Marketing |
| 06/02/03 to Present |
| 1999 |
| |||||
|
|
|
| Services) |
|
|
|
|
| |||||
|
|
|
| Vice President (Meat Products Marketing) |
| 11/01/99 to 06/01/03 |
|
|
| |||||
|
|
|
| Director (Meat Products Marketing) |
| 01/04/93 to 10/31/99 |
|
|
| |||||
Larry L. Vorpahl |
| 41 |
| Vice President and General Manager (Grocery |
| 12/01/03 to Present |
| 1999 |
| |||||
|
|
| Products) |
|
|
|
|
| ||||||
|
|
| Vice President (Grocery Products Marketing) |
| 11/01/99 to 11/30/03 |
|
|
| ||||||
|
|
| Director (Grocery Products Marketing) |
| 09/30/96 to 10/31/99 |
|
|
| ||||||
Michael D. Tolbert |
| 48 |
| Vice President/President Jennie-O Turkey Store |
| 05/31/04 to Present |
| 2004 |
| |||||
|
|
|
| Chief Information Officer |
| 01/28/02 to 05/30/04 |
|
|
| |||||
|
|
|
| Director of Business Development (Grocery Products) |
| 05/01/00 to 01/27/02 |
|
|
| |||||
|
|
|
| Grocery Products National Manager Business |
| 11/18/96 to 04/30/00 |
|
|
| |||||
|
|
|
| Development |
|
|
|
|
| |||||
James W. Cavanaugh |
| 56 |
| Senior Vice President External Affairs and |
| 01/01/05 to Present |
| 2001 |
| |||||
|
|
| Corporate Secretary and Senior Attorney |
| 01/29/01 to Present |
|
|
| ||||||
|
|
| Assistant Secretary and Senior Attorney |
| 01/29/90 to 01/28/01 |
|
|
| ||||||
7
Larry J. Pfeil | 53 | Vice President Engineering | 11/01/99 to Present | 1999 | ||||
| Director of Engineering | 01/04/99 to 10/31/99 | |||||||
| Corporate Manager Engineering | 01/13/97 to 01/03/99 | |||||||
| Corporate Manager Plant Engineering | 12/27/93 to 01/12/97 | |||||||
Douglas R. Reetz | 48 | Vice President Grocery Products Sales | 11/01/99 to Present | 1999 | ||||
| Director Grocery Products Sales and Business Development | 09/15/97 to 10/31/99 | |||||||
| Director Grocery Products Sales | 01/04/93 to 09/14/97 | |||||||
James N. Sheehan | 47 | Vice President and Controller | 05/01/00 to Present | 1999 | ||||
| Treasurer | 11/01/99 to 04/30/00 | |||||||
| President Hormel Financial Services Corporation | 09/21/98 to 10/31/99 | |||||||
| Corporate Manager Credit/Claims Hormel Financial Services Corporation | 07/28/97 to 09/20/98 | |||||||
| Corporate Manager Credit/Claims | 09/02/96 to 07/27/97 | |||||||
William F. Snyder | 45 | Vice President Refrigerated Foods Operations | 11/01/99 to Present | 1999 | ||||
| Director Fresh Pork Operations | 09/27/99 to 10/31/99 | |||||||
| Fremont Plant Manager | 12/25/95 to 09/26/99 | |||||||
Joe C. Swedberg | 47 | Vice President Meat Products Marketing | 11/01/99 to Present | 1999 | ||||
| Director Meat Products Marketing | 01/04/93 to 10/31/99 | |||||||
Larry L. Vorpahl | 39 | Vice President Grocery Products Marketing | 11/01/99 to Present | 1999 | ||||
| Director Grocery Products Marketing | 09/30/96 to 10/31/99 | |||||||
James W. Cavanaugh | 53 | Corporate Secretary and Senior Attorney | 01/29/01 to Present | 2001 | ||||
| Assistant Secretary and Senior Attorney | 01/29/90 to 01/28/01 |
No family relationship exists among the executive officers.
Executive officers are elected annually by the Board of Directors at the first meeting following the Annual Meeting of Stockholders. Vacancies may be filled and additional officers elected at any regular or special meeting.
89
Approximate |
| ||||||||||||||||
| Lease | ||||||||||||||||
(Square Feet) | Owned or | Expiration | |||||||||||||||
Location | Unless Noted | Leased | Date |
| |||||||||||||
Hormel Foods Corporation | |||||||||||||||||
Slaughtering and Processing Plants | |||||||||||||||||
Austin, Minnesota | 1,292,000 | Owned | |||||||||||||||
Fremont, Nebraska | 661,000 | Owned | |||||||||||||||
Processing Plants | |||||||||||||||||
Algona, Iowa | 153,000 | Owned | |||||||||||||||
Alma, Kansas | 70,000 | Owned | |||||||||||||||
Aurora, Illinois | 141,000 | Owned | |||||||||||||||
Beloit, Wisconsin | 339,000 | Owned | |||||||||||||||
Ft. Dodge, Iowa | 17,000 | Owned | |||||||||||||||
Houston, Texas | 93,000 | Owned | |||||||||||||||
Knoxville, Iowa | 130,000 | Owned | |||||||||||||||
Osceola, Iowa | 334,000 | Owned | |||||||||||||||
Quakertown, Pennsylvania | 13,000 | Owned | |||||||||||||||
Rochelle, Illinois | 440,000 | Owned | |||||||||||||||
Sparta, Wisconsin | 385,000 | Owned | |||||||||||||||
Stockton, California | 139,000 | Owned | |||||||||||||||
Tucker, Georgia | 259,000 | Owned | |||||||||||||||
Wichita, Kansas | 80,000 | Owned | |||||||||||||||
Warehouse/Distribution Centers | |||||||||||||||||
Austin, Minnesota—Annex | 83,000 | Owned | |||||||||||||||
Dayton, Ohio | 140,000 | Owned | |||||||||||||||
Eldridge, Iowa | 280,000 | Leased | September, 2005 | ||||||||||||||
Osceola, Iowa | 233,000 | Owned | |||||||||||||||
Stockton, California | 232,000 | Leased | July, | ||||||||||||||
Tucker, Georgia | 96,000 | Leased | September, 2009 | ||||||||||||||
Research and Development Center | |||||||||||||||||
Austin, Minnesota | 79,000 | Owned | |||||||||||||||
Corporate Offices | |||||||||||||||||
Austin, Minnesota | 203,000 | Owned | |||||||||||||||
| |||||||||||||||||
Browerville, Minnesota—Plant | 52,000 | Owned | |||||||||||||||
Long Prairie, | 80,000 | Owned | |||||||||||||||
Jennie-O Turkey Store, Inc. | |||||||||||||||||
Plants | |||||||||||||||||
Barron, Wisconsin | 372,000 | Owned | |||||||||||||||
Faribault, Minnesota | 170,000 | Owned | |||||||||||||||
Melrose, Minnesota | 127,000 | Owned | |||||||||||||||
9
Montevideo, Minnesota | 85,000 | Owned | ||||||||||||
Pelican Rapids, Minnesota | 224,000 | Owned | ||||||||||||
Willmar, Minnesota | 508,000 | Owned | ||||||||||||
Feed Mills | ||||||||||||
Atwater, Minnesota | 19,000 | Owned | ||||||||||
Barron, Wisconsin | 26,000 | Owned | ||||||||||
Dawson, Minnesota | 37,000 | Owned | ||||||||||
Faribault, Minnesota | 21,000 | Owned | ||||||||||
Henning, Minnesota | 5,000 | Owned | ||||||||||
Northfield, Minnesota | 17,000 | Owned | ||||||||||
Perham, Minnesota | 26,000 | Owned | ||||||||||
Swanville, Minnesota | 29,000 | Owned | ||||||||||
Other | ||||||||||||
Barron, Wisconsin—Hatchery | 37,000 | Owned | ||||||||||
Detroit Lakes, Minnesota—Hatchery | 31,000 | Owned | ||||||||||
Henning, Minnesota—Hatchery | 22,000 | Owned | ||||||||||
Melrose, Minnesota—Warehouse | 9,000 | Owned | ||||||||||
Turkey Farms | *14,500 | Owned | ||||||||||
Willmar, Minnesota—Warehouses | 25,000 | Owned | ||||||||||
| ||||||||||||
Mountain Prairie, LLC | ||||||||||||
Las Animas, |
|
|
| |||||||||
Beijing Hormel Foods Co. Ltd. | ||||||||||||
Beijing, China—Plant | 68,000 | 76.4% Owned | ||||||||||
Shanghai Hormel Foods Co. Ltd. | ||||||||||||
Shanghai, China—Plant | 38,000 | 80.7% Owned | ||||||||||
Diamond Crystal Brands, Inc. | ||||||||||||
Bondurant, Iowa—Plant | 68,000 | Owned | ||||||||||
Mitchellville, Iowa—Plants | 81,000 | Owned | ||||||||||
Perrysburgh, Ohio | 183,000 | Owned | ||||||||||
Savannah, Georgia | 353,000 | Owned | ||||||||||
Visalia, California | 107,000 | Owned | ||||||||||
*Acres
Many of these properties are not exclusive to any one of the Company'sCompany’s segments and a few of the properties are utilized in all fourfive segments of the Company. The Company has renovation or building projects in progress at Austin, Minnesota; Fremont, Nebraska; Rochelle, Illinois; Osceola, Iowa; Bondurant, Iowa; and at various JOTS locations. The Company believes its operating facilities are well maintained and suitable for current production volumes and all volumes anticipated in the foreseeable future.
The Company knows of no pending material legal proceedings.
Item 4.SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matters were submitted to shareholders during the fourth quarter of the 20022004 fiscal year.
10
Item 5.MARKET FOR THE REGISTRANT'SREGISTRANT’S COMMON STOCK ANDEQUITY, RELATED STOCKHOLDER MATTERS
AND ISSUER PURCHASES OF EQUITY SECURITIES
The high and low closing price of the Company'sCompany’s Common Stock and the dividends per share declared for each fiscal quarter of 20022004 and 2001,2003, respectively, are shown below:
| 2002 | High | Low | Dividend | ||||||
|---|---|---|---|---|---|---|---|---|---|
| Fourth Quarter | $ | 24.95 | $ | 20.95 | $ | .0975 | |||
| Third Quarter | 24.99 | 20.50 | .0975 | ||||||
| Second Quarter | 28.03 | 24.99 | .0975 | ||||||
| First Quarter | 27.14 | 23.12 | .0975 | ||||||
| 2001 | High | Low | Dividend | ||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
2004 |
|
|
| High |
| Low |
| Dividend |
| ||||||||||||
First Quarter | First Quarter |
| $ | 27.45 |
| $ | 23.80 |
| $ | .1125 |
| ||||||||||
Second Quarter | Second Quarter |
| 31.04 |
| 26.54 |
| .1125 |
| |||||||||||||
Third Quarter | Third Quarter |
| 31.63 |
| 29.06 |
| .1125 |
| |||||||||||||
| Fourth Quarter | $ | 26.39 | $ | 21.73 | $ | .0925 | Fourth Quarter |
| 29.70 |
| 26.00 |
| .1125 |
| |||||||
| Third Quarter | 25.25 | 19.52 | .0925 | ||||||||||||||||||
| Second Quarter | 21.50 | 18.51 | .0925 | ||||||||||||||||||
| First Quarter | 19.13 | 16.75 | .0925 | ||||||||||||||||||
2003 |
|
|
| High |
| Low |
| Dividend |
| |||
First Quarter |
| $ | 24.30 |
| $ | 21.76 |
| $ | .1050 |
| ||
Second Quarter |
| 22.60 |
| 20.18 |
| .1050 |
| |||||
Third Quarter |
| 24.98 |
| 22.41 |
| .1050 |
| |||||
Fourth Quarter |
| 24.15 |
| 21.25 |
| .1050 |
| |||||
Additional information about dividends, principal market of trade and number of stockholders on page 4149 of the Annual Stockholders'Stockholders’ Report for the year ended October 26, 2002,30, 2004, is incorporated herein by reference. The Company'sCompany’s Common Stock has been listed on the New York Stock Exchange since January 16, 1990.
Issuer purchases of equity securities in the fourth quarter of fiscal year 2004 are shown below:
Period |
|
|
| Total Number |
| Average Price |
| Total Number of Shares |
| Maximum Number of |
| |||||||||
July 25, 2004 - August 28, 2004 |
|
| 261,700 |
|
|
| $ | 28.39 |
|
|
| 261,700 |
|
|
| 9,029,072 |
|
| ||
August 29, 2004 - September 25, 2004 |
|
| 354,700 |
|
|
| 27.11 |
|
|
| 354,300 |
|
|
| 8,674,772 |
|
| |||
September 26, 2004 - October 30, 2004 |
|
| 276,400 |
|
|
| 26.62 |
|
|
| 276,400 |
|
|
| 8,398,372 |
|
| |||
Total |
|
| 892,800 |
|
|
| $ | 27.34 |
|
|
| 892,400 |
|
|
|
|
|
| ||
(
1)Shares repurchased during the quarter, other than through publicly announced plans or programs, represent purchases for the Company’s employee awards program.
(2)In October 2002, the Company’s Board of Directors authorized the Company to repurchase up to10,000,000 shares of common stock with no expiration date.
Item 6.SELECTED FINANCIAL DATA
Selected Financial Data for the five years ended October 26, 2002,30, 2004, on page 1816 of the Annual Stockholders'Stockholders’ Report for the year ended October 26, 2002,30, 2004, is incorporated herein by reference.
Item 7.MANAGEMENT'SMANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OFOPERATIONS
OPERATION
Management'sInformation in the Management’s Discussion and Analysis of Financial Condition and Results of Operations on pages 1916 through 2629 of the Annual Stockholders'Stockholders’ Report for the year ended October 26, 2002,30, 2004, is incorporated herein by reference.
Item 7A.QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Information on the Company'sCompany’s exposure to market risk is included in the Management'sManagement’s Discussion and Analysis of Financial Condition and Results of Operations on page 2729 of the Annual Stockholders'Stockholders’ Report for the year ended October 26, 2002,30, 2004, and is incorporated herein by reference.
Item 8.FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Consolidated Financial Statements, including unaudited quarterly data, on pages 2831 through 3946 and the Report of Independent AuditorsRegistered Public Accounting Firm on page 3930 of the Annual Stockholders'Stockholders’ Report for the year ended October 26, 2002,30, 2004, are incorporated herein by reference.
Item 9.CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE
None.
12Item 9A. CONTROLS AND PROCEDURES
(a)Disclosure Controls and Procedures. As of the end of the period covered by this report (the “Evaluation Date”), we carried out an evaluation, under the supervision and with the participation of management, including the Chief Executive Officer and the Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)). Based upon that evaluation, the Chief Executive Officer and the Chief Financial Officer concluded that, as of the Evaluation Date, our disclosure controls and procedures were adequately designed to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in applicable rules and forms.
(b)Internal Controls. During the last quarter of fiscal year 2004, there has been no change in the Company’s internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.
None.
Item 10.DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Information under "Election“Item 1—Election of Directors",Directors,” contained on pages 3 and 4 and 5under “Board of Director and Committee Meetings,” on pages 6 and 7, and the second sentence of the second paragraph under “Audit Committee Report,” contained on page 7 of the definitive proxy statement for the Annual Meeting of Stockholders to be held January 28, 2003,25, 2005, is incorporated herein by reference.
Information concerning Executive Officers is set forth in Item 1(d)1(f) of Part I pursuant to Instruction 3, Paragraph (b) of Item 401 of Regulation S-K.
Item 11.EXECUTIVE COMPENSATION
Information for the year ended October 26, 2002, under "Executive Compensation" on pages 12 through 18 and "Compensation of Directors" on page 6 of the definitive proxy statement for the Annual Meeting of Stockholders to be held January 28, 2003, is incorporated herein by reference.
Item 12.SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT ANDRELATED STOCKHOLDER MATTERS
“Section 16(a) Beneficial Ownership of securities of the Company by certain beneficial owners and management for the year ended October 26, 2002, as set forth on pages 10 and 11 and information under "Equity Compensation Plan Information"Reporting Compliance,” on page 18 of the definitive proxy statement for the Annual Meeting of Stockholders to be held January 28, 2003,25, 2005, is incorporated herein by reference.
The Company has adopted a Code of Ethical Business Conduct in compliance with applicable rules of the Securities and Exchange Commission that applies to its principal executive officer, its principal financial officer, and its principal accounting officer or controller, or persons performing similar functions. A copy of the Code of Ethical Business Conduct is available on the Company’s website at www.hormel.com, free of charge, under the caption, “Corporate.” The Company intends to satisfy any disclosure requirement under Item 13.CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
5.05 of Form 8-K regarding an amendment to, or waiver from, a provision of this Code of Ethical Business Conduct by posting such information on the Company’s website at the address and location specified above.
Item 11. EXECUTIVE COMPENSATION
Information under "Other Information Relating to Directors, Nominees, and Executive Officers" for the year ended October 26, 2002, as set forth30, 2004, commencing with “Summary Compensation Table” on page 2013 through page 16 and “Compensation of Directors” on page 7 of the definitive proxy statement for the Annual Meeting of Stockholders to be held January 28, 2003,25, 2005, is incorporated herein by reference.
Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
Information for the year ended October 30, 2004, under “Security Ownership of Certain Beneficial Owners” and “Security Ownership of Management” on pages 9 and 10, and information under “Equity Compensation Plan Information” on page 17 of the definitive proxy statement for the Annual Meeting of Stockholders to be held January 25, 2005, is incorporated herein by reference.
Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Information under “Related Party Transactions” for the year ended October 30, 2004, as set forth on page 18 of the definitive proxy statement for the Annual Meeting of Stockholders to be held January 25, 2005, is incorporated herein by reference.
Item 14.CONTROLSPRINCIPAL ACCOUNTANT FEES AND PROCEDURES
SERVICES
Within 90 days prior to the filing date of this Annual Report on Form 10-K, the Company performed an evaluationThe information under the supervision and with the participation“Payment of Fees to Auditors” on page 8 of the Company's management, including its Chairman, President and Chief Executive Officer ("CEO") and Executive Vice President and Chief Financial Officer ("CFO"),Company’s definitive proxy statement for the Annual Meeting of its "disclosure controls and procedures" (as defined in Securities Exchange Act of 1934 Rules 13a-14(c) and 15d-14(c)). The Company's disclosure controls and procedures are designedStockholders to ensure that the Company, including its consolidated subsidiaries,be held January 25, 2005, is able to record, process, summarize and report financial data within the time periods specified in Securities and Exchange Commission rules and forms. As a result of this evaluation, the Company's CEO and CFO have concluded that the Company's disclosure controls and procedures were effective for their intended purposes.incorporated herein by reference.
There were no significant changes in the Company's internal controls or in other factors that could significantly affect internal controls subsequent to the date of their most recent evaluation.
13
Item 15.EXHIBITS AND FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
The response to this portion of Item 15 is submitted as a separate section of this report.
Form 8-K was filed on July 29, 2002, announcing the election of Susan Marvin, President of Marvin Windows and Doors, to the Company's Board of Directors.
Form 8-K was filed on August 2, 2002, reporting that the Company filed with the Securities and Exchange Commission ("SEC") original sworn statements of the Company's Chief Executive Officer and Chief Financial Officer as required by the SEC's Order 4-460 issued on June 27, 2002.
Form 8-K was filed on October 9, 2002, announcing that the Company's Board of Directors has authorized the repurchase of up to 10 million shares of its common stock.
14
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrantregistrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
HORMEL FOODS CORPORATION
HORMEL FOODS CORPORATION | ||||
By: | /s/ JOEL W. JOHNSON | January 13, 2005 | ||
JOEL W. | ||||
and Chief Executive Officer | Date | |||
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrantregistrant and in the capacities and on the dates indicated. Each person whose signature to this report on Form 10-K appears below hereby constitutes and appoints each of Michael J. McCoy, Jody H. Feragen and Mark P. Kalvoda as his or her true and lawful attorney-in-fact and agent, with full power of substitution, to sign on his or her behalf individually and in the capacity stated below and to perform any acts necessary to be done in order to file the Annual Report on Form 10-K and all amendments to this report on Form 10-K, and any and all instruments or documents filed as part of or in connection with this report on Form 10-K or the amendments hereto, and each of the undersigned does hereby ratify and confirm all that said attorney-in-fact and agent, or his substitutes, shall do or cause to be done by virtue hereof.
Name | Date | Title | ||||||||
/s/ | 1/13/05 | Chairman, Chief Executive Officer and | ||||||||
JOEL W. | ||||||||||
/s/ JEFFREY M. ETTINGER | 1/13/05 | President, Chief Operating Officer | ||||||||
JEFFREY M. ETTINGER | ||||||||||
/s/ MICHAEL J. McCOY | 1/13/05 | Executive Vice President, Chief Financial | ||||||||
MICHAEL J. | ||||||||||
/s/ | 1/13/05 | |||||||||
15
16
Certification Required Under Section 302 of the Sarbanes-Oxley Act of 2002
I, Joel W. Johnson, Chairman, President and Chief Executive Officer of Hormel Foods Corporation, certify that:
17
Certification Required Under Section 302 of the Sarbanes-Oxley Act of 2002
I, Michael J. McCoy, Executive Vice President and Chief Financial Officer of Hormel Foods Corporation, certify that:
Executive Vice President Refrigerated Foods and | ||||||||||
GARY J. RAY | ||||||||||
/s/ JOHN W. ALLEN* | 1/13/05 | Director | ||||||||
JOHN W. ALLEN | ||||||||||
/s/ JOHN R. BLOCK* | 1/13/05 | Director | ||||||||
JOHN R. BLOCK | ||||||||||
/s/ E. PETER GILLETTE JR.* | 1/13/05 | Director | ||||||||
E. PETER GILLETTE JR. | ||||||||||
18
Name | Date | Title | |||||||||
/s/ LUELLA G. GOLDBERG* | 1/13/05 | Director | |||||||||
LUELLA G. GOLDBERG | |||||||||||
/s/ SUSAN I. MARVIN* | 1/13/05 | Director | |||||||||
SUSAN I. MARVIN | |||||||||||
/s/ JOHN L. MORRISON* | 1/13/05 | Director | |||||||||
JOHN L. MORRISON | |||||||||||
/s/ DAKOTA A. PIPPINS* | 1/13/05 | Director | |||||||||
DAKOTA A. PIPPINS | |||||||||||
/s/ JOHN G. TURNER* | 1/13/05 | Director | |||||||||
JOHN G. TURNER | |||||||||||
/s/ DR. ROBERT R. WALLER* | 1/13/05 | Director | |||||||||
DR. ROBERT R. WALLER | |||||||||||
*By: | /s/ MICHAEL J. McCOY | 1/13/05 | |||||||||
MICHAEL J. McCOY, | |||||||||||
F-1
16
F-1
ANNUAL REPORT ON FORM 10-K
ITEM 15 (a) (1), (2), AND (3) AND ITEM 15 (c) AND (d)
LIST OF FINANCIAL STATEMENTS
FINANCIAL STATEMENT SCHEDULE
LIST OF EXHIBITS
YEAR ENDED OCTOBER 26, 200230, 2004
HORMEL FOODS CORPORATION
Austin, Minnesota
1917
F-2
Item 15(a) (1), (2) and (3) and Item 15 (c) and (d)
LIST OF FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULES
HORMEL FOODS CORPORATION
The following consolidated financial statements of Hormel Foods Corporation included in the Annual Stockholders'Stockholders’ Report for the Registrant to its stockholders for the year ended October 26, 2002,30, 2004, are incorporated herein by reference in Item 8 of Part II of this report:
Consolidated Statements of Financial Position—October 26, 2002,30, 2004, and October 27, 2001.25, 2003.
Consolidated Statements of Operations—Years Ended October 26, 2002,30, 2004, October 27, 200125, 2003 and October 28, 2000.26, 2002.
Consolidated Statements of Changes in Shareholders'Shareholders’ Investment—Years Ended October 26, 2002,30, 2004, October 27, 2001,25, 2003, and October 28, 2000.26, 2002.
Consolidated Statements of Cash Flows—Years Ended October 26, 2002,30, 2004, October 27, 2001,25, 2003, and October 28, 2000.26, 2002.
Notes to Financial Statements—October 26, 2002.30, 2004.
Report of Independent AuditorsRegistered Public Accounting Firm
The following consolidated financial statement schedule of Hormel Foods Corporation required pursuant to Item 15(d)15(c) is submitted herewith:
Schedule II—Valuation and Qualifying Accounts and Reserves...F-3
All other schedules for which provision is made in the applicable accounting regulation of the Securities and Exchange Commission are not required under the related instructions or are inapplicable, and therefore have been omitted.
FINANCIAL STATEMENTS AND SCHEDULES OMITTED
Condensed parent company financial statements of the registrant are omitted pursuant to Rule 5-04(c) of Article 5 of Regulation S-X.
2018
F-3
SCHEDULE II—VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
HORMEL FINANCIAL SERVICES CORPORATION
(Dollars inIn Thousands)
| COLUMN A | COLUMN A | COLUMN B | COLUMN C | COLUMN D | COLUMN E |
| COLUMN B |
| COLUMN C |
| COLUMN D |
| COLUMN E |
| ||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
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| Additions |
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| |||||||||||||||||||||||||||||||||
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| Balance at |
| Charged to |
| Charged to |
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| Balance at |
| |||||||||||||||||||||||||||||||
| Additions |
| Beginning |
| Costs and |
| Other Accounts— |
| Deductions— |
| End of |
| |||||||||||||||||||||||||||||||
| Classification | Classification | Balance at Beginning of Period | (1) Charged to Costs and Expenses | (2) Charged to Other Accounts- Describe | Deductions- Describe | Balance at End of Period |
| of Period |
| Expenses |
| Describe |
| Describe |
| Period |
| |||||||||||||||||||||||||
| Valuation reserve deduction from assets account: | Valuation reserve deduction from assets account: |
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Fiscal year ended October 30, 2004 |
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Allowance for doubtful |
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|
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|
|
|
|
| $ | 560 | (1) |
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|
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| ||||||||||||||||||||
accounts receivable |
|
| $ | 2,880 |
|
|
| $ | 1,285 |
|
|
| $ | 120 | (4) |
|
| (875 | )(2) |
|
| $ | 4,600 |
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| |||||||||||||||||
Fiscal year ended October 25, 2003 |
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Allowance for doubtful |
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|
|
|
|
|
|
|
|
|
| $ | 6,644 | (1) |
|
|
|
|
| ||||||||||||||||||||
accounts receivable |
|
| $ | 1,393 |
|
|
| $ | 7,474 |
|
|
| $ | 431 | (3) |
|
| (226 | )(2) |
|
| $ | 2,880 |
|
| |||||||||||||||||
Fiscal year ended October 26, 2002 | Fiscal year ended October 26, 2002 |
|
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| Allowance for doubtful accounts receivable | $ | 1,393 | $ | 1,638 | $ | 0 | $ $ | 1,674 (36 | (1) ) (2) | $ | 1,393 | |||||||||||||||||||||||||||||||
Fiscal year ended October 27, 2001 | ||||||||||||||||||||||||||||||||||||||||||
| Allowance for doubtful accounts receivable | $ | 1,273 | $ | 1,041 | $ | 120 | (3) | $ $ | 1,112 (71 | (1) ) (2) | $ | 1,393 | ||||||||||||||||||||||||||||||
Fiscal year ended October 28, 2000 | ||||||||||||||||||||||||||||||||||||||||||
| Allowance for doubtful accounts receivable | $ | 1,273 | $ | 1,809 | $ | -0- | $ $ | 1,994 (185 | (1) ) (2) | $ | 1,273 | |||||||||||||||||||||||||||||||
Allowance for doubtful |
|
|
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|
|
|
|
|
|
|
|
|
| $ | 1,674 | (1) |
|
|
|
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| ||||||||||||||||||||
accounts receivable |
|
| $ | 1,393 |
|
|
| $ | 1,638 |
|
|
| $ | 0 |
|
|
| (36 | )(2) |
|
| $ | 1,393 |
|
| |||||||||||||||||
Note (1) - —Uncollectible accounts written off.
Note (2) - —Recoveries on accounts previously written off.
Note (3) - —Increase in the reserve due to the inclusion of The Turkey Store CompanyDiamond Crystal Brands accounts receivable.
21
Note (4)—Increase in the reserve due to the inclusion of Century Foods International accounts receivable.
19
LIST OF EXHIBITS
HORMEL FOODS CORPORATION
NUMBER | DESCRIPTION OF DOCUMENT |
| |||||
2.1(1) | Agreement and Plan of Merger and Plan of Reorganization dated January 22, 2001, by and among Hormel, Badger Acquisition Corporation, Jerome Foods, Inc. and Jerome K. Jerome. (Incorporated by reference to | ||||||
2.2(2) | Clougherty Packing Company Stock Purchase Agreement, dated as of December 29, 2004, between Hormel Foods Corporation, as Buyer, the Sellers (as identified in the Agreement), and Sellers’ Representative. | ||||||
3.1(1) | Certificate of Incorporation as amended to date. (Incorporated by reference to Exhibit 3A-1 to | ||||||
3.2(2) | Bylaws as amended to date. | ||||||
4.1(1) | Indenture dated as of June 1, 2001, between Hormel and U.S. Bank Trust National Association, as Trustee relating to certain outstanding debt securities. (Incorporated by reference to Exhibit 4.1 to | ||||||
4.2(1) | Supplemental Indenture No. 1 dated as of June 4, 2001, to Indenture dated as of June 1, 2001, between Hormel and U.S. Bank Trust National Association, as Trustee, relating to certain outstanding debt securities. (Incorporated by reference to Exhibit 4.2 to | ||||||
4.3(1) | Letter of Representations dated June 5, 2001, among Hormel, U.S. Bank Trust National Association, as Trustee, and The Depository Trust Company relating to certain outstanding debt securities of Hormel. (Incorporated by reference to Exhibit 4.3 to | ||||||
4.4(1) | Pursuant to Item | ||||||
10.1(1) | U.S. $150,000,000 Credit Agreement, dated as of October | ||||||
10.2(1)(3) | Hormel Foods Corporation | ||||||
10.3(1)(3) | Hormel Foods Corporation Supplemental Executive Retirement Plan (2002 Restatement.) (Incorporated by Reference to Exhibit 10.3 to Hormel’s Annual Report on Form 10-K for the fiscal year ended October 26, 2002, File No. 001-02402.) | ||||||
10.4(1)(3) | Hormel Foods Corporation 2000 Stock Incentive Plan. (Incorporated by Reference to Exhibit A to | ||||||
NUMBER | DESCRIPTION OF DOCUMENT | |||
10.5(1)(3) | Hormel Foods Corporation Long-Term Incentive Plan. (Incorporated by Reference to Appendix B to | |||
10.6(1)(3) | Hormel Foods Corporation Supplemental Retirement Benefits Plan for the Benefit of Joel W. Johnson (1999 Restatement.) (Incorporated by Reference to Exhibit 10.6 to Hormel’s Annual Report on Form 10-K for the fiscal year ended October 26, 2002, File No. 001-02402.) | |||
10.7(1)(3) | Hormel Foods Corporation Executive Deferred Income Plan II (2002 Restatement.) (Incorporated by Reference to Exhibit 10.7 to Hormel’s Annual Report on Form 10-K for the fiscal year ended October 26, 2002, File No. 001-02402.) | |||
10.8(1) | Form of Indemnification Agreement for Directors and Officers. | |||
22
10.9(2) | Hormel Foods Corporation Non Employee Director Deferred Stock Plan (Plan Adopted October 4, 1999; Amended and Restated November 24, 2003.) | |||
11.1(1) | Statement re: computation of | |||
13.1(2) | Pages 16 through 49 of the Annual Stockholders’ Report for the fiscal year ended October 30, 2004. | |||
21.1(2) | Subsidiaries of the Registrant. | |||
23.1(2) | Consent of Independent | |||
24.1(2) | Power of Attorney. | |||
31.1(2) | Certification Required Under Section 302 of the Sarbanes-Oxley Act of 2002. | |||
31.2(2) | Certification Required Under Section 302 of the Sarbanes-Oxley Act of 2002. | |||
32.1(2) | Certification Pursuant to 18 U.S.C. Section 1350 as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |||
99.1(2) | Cautionary Statement Regarding Forward-Looking Statements and Risk Factors. | |||
(1)Document has previously been filed with the Securities and Exchange Commission and is incorporated herein by reference.
(2)These Exhibits transmitted via EDGAR.
23(3) Management compensatory plan.
21