ANNUAL REPORT ON FORM 10-K

 

HORMEL FOODS CORPORATION

 

OCTOBER 28, 2007

 

 

 

 

 

 

 



 

 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
FORM 10-K
 
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
 

For the Fiscal Year Ended OCTOBER 28, 2007          Commission File No. 1-2402

 

HORMEL FOODS CORPORATION

(Exact name of registrant as specified in its charter)

 

DELAWARE

 

41-0319970

(State or other jurisdiction of incorporation or organization)

 

(I.R.S. Employer Identification No.)

 

 

 

1 HORMEL PLACE AUSTIN, MINNESOTA

 

55912-3680

(Address of principal executive offices)

 

(Zip Code)

 

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

Title of each class

 

Name of each exchange on which registered

 

Securities registered pursuant to Section 12(g) of the Act:

 

NONE

(Title of Class)

 

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.  Yes  x    No  o

 

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.  Yes  o    No  x

 

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    No  o

 

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’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

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer.  See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act.  (Check one):

 

Large accelerated filer  x      Accelerated filer  o      Non-accelerated filer  o

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes  o    No  x

 

The aggregate worldwide market value of the voting and non-voting common stock held by non-affiliates of the registrant as of April 29, 2007, (the last business day of the registrant’s most recently completed second fiscal quarter), was $2,780,222,204 based on the closing price of $38.18 per share on that date.

 

As of December 3, 2007, the number of shares outstanding of each of the registrant’s classes of common stock was as follows:

 

Common Stock, $.0586 Par Value — 135,514,238 shares

Common Stock Non-Voting, $.01 Par Value — 0 shares

 

DOCUMENTS INCORPORATED BY REFERENCE

 

Portions of the Annual Stockholders’ Report for the year ended October 28, 2007, are incorporated by reference into Part I Items 1 and 1A, and Part II Items 5-8 and 9A, and included as Exhibit 13.1 filed herewith.

 

Portions of the Proxy Statement for the Annual Meeting of Stockholders to be held January 29, 2008, are incorporated by reference into Part III, Items 10-14.

 

 

1



 

HORMEL FOODS CORPORATION

 

TABLE OF CONTENTS

 

PART I

 

 

3

 

 

 

 

 

Item 1.

BUSINESS

 

3

 

 

 

 

 

 

Item 1A.

RISK FACTORS

 

9

 

 

 

 

 

 

Item 1B.

UNRESOLVED STAFF COMMENTS

 

9

 

 

 

 

 

 

Item 2.

PROPERTIES

 

10

 

 

 

 

 

 

Item 3.

LEGAL PROCEEDINGS

 

12

 

 

 

 

 

 

Item 4.

SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

 

12

 

 

 

 

 

PART II

 

 

13

 

 

 

 

 

Item 5.

MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

 

13

 

 

 

 

 

 

Item 6.

SELECTED FINANCIAL DATA

 

13

 

 

 

 

 

 

Item 7.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

 

13

 

 

 

 

 

 

Item 7A.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

 

13

 

 

 

 

 

 

Item 8.

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

 

14

 

 

 

 

 

 

Item 9.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

 

14

 

 

 

 

 

 

Item 9A.

CONTROLS AND PROCEDURES

 

14

 

 

 

 

 

 

Item 9B.

OTHER INFORMATION

 

14

 

 

 

 

 

PART III

 

 

15

 

 

 

 

 

Item 10.

DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

 

15

 

 

 

 

 

 

Item 11.

EXECUTIVE COMPENSATION

 

15

 

 

 

 

 

 

Item 12.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

 

15

 

 

 

 

 

 

Item 13.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

 

15

 

 

 

 

 

 

Item 14.

PRINCIPAL ACCOUNTANT FEES AND SERVICES

 

15

 

 

 

 

 

PART IV

 

 

15

 

 

 

 

 

Item 15.

EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

 

15

 

 

 

 

 

SIGNATURES

 

 

16

 

 

2



 

PART I

 

Item 1.  BUSINESS

 

(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 and internationally.  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, value-added consumer items rather than the commodity fresh meat business.  The Company has continually expanded its product portfolio through organic growth, new product development, and the completion of numerous strategic acquisitions.

 

In November of 2006, the Company acquired the assets of Saag’s Products, Inc. (Saag’s).  Saag’s is based in San Leandro, California, and is a processor and marketer of branded, premium quality gourmet sausages and specialty smoked meats.

 

In December of 2006, the Company completed the acquisition of Provena Foods Inc. (Provena).  Provena was a publicly traded company with facilities in Lathrop, California, and Chino, California, which provides pepperoni and pasta to pizza makers and packaged food manufacturers.

 

In August of 2007, the Company acquired privately-held Burke Corporation (Burke).  Burke is a manufacturer and marketer of pizza toppings and other fully cooked meat products, and operates facilities in Nevada, Iowa, and Ames, Iowa.

 

                              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 Australia, Canada, China, Japan, and the Philippines.  HFIC also has a global presence with minority positions in food companies in Mexico (Hormel Alimentos, 50% holding) and the Philippines (Purefoods-Hormel, 40% holding), and in a hog production and processing operation in Vietnam (San Miguel Pure Foods (VN) Co. Ltd., 49% 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.

 

The Company had no significant change in the type of products produced or services rendered, or in the markets or methods of distribution since the beginning of the 2007 fiscal year.

 

                              (b)  Segments

 

The Company’s business is reported in five segments: Grocery Products, Refrigerated Foods, Jennie-O Turkey Store (JOTS), Specialty Foods, and All Other.  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 Discussion and Analysis of Financial Condition and Results of Operations of the Annual Stockholder’s Report for the year ended October 28, 2007, incorporated herein by reference.

 

(c)  Description of Business

 

Products and Distribution

 

The Company’s products primarily consist of meat and other food products.  The meat products 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:

 

 

 

Year Ended

 

 

 

October 28, 2007

 

October 29, 2006

 

October 30, 2005

 

Perishable meat

 

54.2

%

53.8

%

54.0

%

Poultry

 

19.2

 

19.7

 

20.1

 

Shelf-stable

 

16.8

 

17.1

 

16.3

 

Other

 

9.8

 

9.4

 

9.6

 

 

 

100.0

%

100.0

%

100.0

%

 

 

3



 

                              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.  Revenues reported are based on financial information used to produce the Company’s general-purpose financial statements.

 

Perishable meat includes fresh meats, sausages, hams, wieners, and bacon (excluding JOTS products.)  The Poultry category is composed primarily of JOTS products.  Shelf-stable includes canned luncheon meats, shelf-stable microwaveable entrees, stews, chilies, hash, meat spreads, flour and corn tortillas, salsas, tortilla chips, and other items that do not require refrigeration.  The Other category primarily consists of nutritional food products and supplements, sugar and sugar substitutes, creamers, salt and pepper products, sauces and salad dressings, dessert and drink mixes, and industrial gelatin products.

 

During fiscal 2007, the Company continued to expand its Hormel Natural Choice line of sliced lunchmeats and deli meats.  Significant growth was also experienced on the Hormel Compleats line of microwave meals, with expansion for additional production capacity planned for the upcoming year.  No other new products in fiscal 2007 required a material investment of the Company assets.

 

                              Domestically, the Company sells its products in all 50 states.  The Company’s products are sold through its sales personnel, operating in assigned territories coordinated from sales offices located in most of the larger U.S. cities, as well as independent brokers and distributors.  Dedicated sales teams also serve major retail customers and coordinate sales of both Grocery Products and Refrigerated Foods products.  As of October 28, 2007, the Company had approximately 585 sales personnel engaged in selling its products.  Distribution of products to customers is primarily 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 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 licensees being Tulip International of Denmark and CJ Corporation 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 the live pork industry has evolved to large, vertically integrated, year-round confinement operations, and supply contracts have become 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.

 

The majority of the hogs harvested by the Company are purchased under supply contracts from producers located principally in Colorado, Idaho, Illinois, Iowa, Kansas, Minnesota, Nebraska, Oklahoma, South Dakota, Texas, Utah, Wisconsin, and Canada.  The cost of hogs and the utilization of the Company’s facilities are affected by both the level and the methods of pork production in the United States.  The movement toward year-round confinement operations which operate under supply agreements with processors has resulted in fewer hogs being available on the spot cash market.  The Company, along with others in the industry, uses supply contracts to manage the effects of this trend and to ensure a stable supply of raw materials.  The Company has been actively converting its contracts to market-based formulas to better match input costs with customer pricing, and all contract costs are fully reflected in the Company’s reported financial results.  In fiscal 2007, the Company purchased 89 percent of its hogs under supply contracts.  The Farmer John operation also procures a portion of its hogs through farms which the Company either owns or operates in Arizona, California, and Wyoming.

 

In fiscal 2007, JOTS raised turkeys representing approximately 68 percent of the volume 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’ turkey-raising farms are located throughout Minnesota and Wisconsin.  Production costs in raising turkeys are primarily subject to fluctuations in feed grain prices and, to a lesser extent, fuel costs.  To manage this risk, the Company periodically hedges its anticipated purchases of grain using futures contracts.

 

Manufacturing

 

The Company has plants in Austin, Minnesota; Fremont, Nebraska; Vernon, California; and Beijing, China that harvest hogs for processing.  Quality Pork Processors, Inc. of Dallas, Texas, operates the harvesting facility at Austin under a custom harvesting arrangement.

 

 

4



 

Facilities that produce and distribute manufactured items are located in Albert Lea, Minnesota; Algona, Iowa; Alma, Kansas; Ames, Iowa; Aurora, Illinois; Austin, Minnesota; Beloit, Wisconsin; Bondurant, Iowa; Bremen, Georgia; Browerville, Minnesota; Chino, California; Dayton, Ohio; Eldridge, Iowa; Ft. Dodge, Iowa; Fremont, Nebraska; Knoxville, Iowa; Lathrop, California; Long Prairie, Minnesota; Mitchellville, Iowa; Nevada, Iowa; New Berlin, Wisconsin; Osceola, Iowa; Perrysburg, Ohio; Quakertown, Pennsylvania; Rochelle, Illinois; San Leandro, California; Savannah, Georgia; Sparta, Wisconsin; St. Paul, Minnesota; Stockton, California; Tucker, Georgia; Turlock, California; Vernon, California; Visalia, California; Wichita, Kansas; Beijing, China; and Shanghai, China.  Albert Lea Select Foods, Inc. of Dallas, Texas, operates the processing facility at Albert Lea under a custom manufacturing agreement.  The Company’s Houston, Texas facility was closed during fiscal 2006.  Company products are also custom manufactured by several other companies.  The following are the Company’s larger custom manufacturers: Steuben Foods, Jamaica, New York; Lakeside Packing Company, Manitowoc, Wisconsin; Schroeder Milk, Maplewood, Minnesota; Reichel Foods, Rochester, Minnesota; Power Packaging, St. Charles, Illinois; and Tony Downs, St. James, Minnesota.  Power Logistics, Inc., based in St. Charles, Illinois, operates distribution centers for the Company in Dayton, Ohio, and Osceola, Iowa.

 

The Company’s turkey harvest and processing operations are located in Barron, Wisconsin; Faribault, 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’s business.  The Company holds 7 foreign and 48 U.S.-issued patents.  Some of the trademarks are registered and some are not.  Some of the more significant owned or licensed trademarks used in the Company’s segments are:

 

HORMEL, ALWAYS TENDER, AMERICAN CLASSICS, AUSTIN BLUES, BANGKOK PADANG, BLACK LABEL, BREAD READY, BÚFALO, CAFÉ H, CALIFORNIA NATURAL, CARAPELLI, CHI-CHI’S, COMPLEATS, CURE 81, CUREMASTER, DAN’S PRIZE, DI LUSSO, DINTY MOORE, DODGER DOGS, DOÑA MARIA, DUBUQUE, FARMER JOHN, FAST ‘N EASY, HERB-OX, HERDEZ, HIBACHI GRILL, HOMELAND, HOUSE OF TSANG, JENNIE-O TURKEY STORE, KID’S KITCHEN, LAYOUT, LITTLE SIZZLERS, LLOYD’S, MAGNIFOODS, MANNY’S, MARRAKESH EXPRESS, MARY KITCHEN, NATURAL CHOICE, NATURASELECT, OLD SMOKEHOUSE, PELOPONNESE, PILLOW PACK, PREP CHEF, PREMORO, RANGE BRAND, RICO OLE’, ROSA GRANDE, SAAG’S, SANDWICH MAKER, SAUCY BLUES, SPAM, SPAMTASTIC, STAGG, TEZZATA, THICK & EASY, VALLEY FRESH, and WRANGLERS.

 

The Company’s patents expire after a term that is typically 20 years from the date of filing, with earlier expiration possible based on the Company’s decision to pay required maintenance fees.  As long as the Company intends to continue using its trademarks, they are renewed indefinitely.

 

Customers and Backlog Orders

 

During fiscal year 2007, 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: 40 percent of Grocery Products, 40 percent of JOTS, 35 percent of Refrigerated Foods, 34 percent of Specialty Foods, and 21 percent of All Other.  The loss of one or more of the top customers in any of these segments could have a material adverse effect on the results of such segment.  Backlog orders are not significant due to the perishable nature of a large portion of the products.  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 2007 were Tyson Foods, Smithfield Foods, and Sara Lee Corporation; for its Grocery Products segment, ConAgra Foods, Pinnacle Foods, and Campbell Soup Co.; and for JOTS, Cargill, Inc. and Butterball, LLC.

 

All segments compete on the basis of price, product quality, brand identification, and customer service.  Through aggressive marketing and strong quality assurance programs, the Company’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.

 

 

5



 

Research and Development

 

Research and development continues to be a vital part of the Company’s strategy to extend existing brands and expand into new branded items.  The expenditures for research and development for fiscal 2007, 2006, and 2005, were approximately $21,475,000, $18,631,000, and $17,585,000, respectively.   There are 79 employees engaged in full time research and development, 36 in the area of improving existing products and 43 in developing new products.

 

Employees

 

As of October 28, 2007, the Company had approximately 18,500 active employees.

 

(d)  Geographic Areas

 

Financial information about geographic areas, including total revenues attributed to the U.S. and all foreign countries in total for the last three fiscal years of the Company, is reported in Note K of the Notes to Consolidated Financial Statements of the Annual Stockholder’s Report for the year ended October 28, 2007, incorporated herein by reference.

 

(e)  Available Information

 

The Company makes available, free of charge on its Web site at www.hormelfoods.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 “Investors” caption of the Company’s Web site and are available as soon as reasonably practicable after such material is electronically filed with or furnished to the Securities and Exchange Commission.

 

The documents noted above are also available in print, free of charge, to any stockholder who requests them.

 

 

6



 

(f)  Executive Officers of the Registrant

 

 
 
 
 
 
 
 
 
YEAR

 

 

 

 

 

 

 

 

FIRST

 

 

 

 

CURRENT OFFICE AND PREVIOUS

 

 

 

ELECTED

NAME

 

AGE

 

FIVE YEARS EXPERIENCE

 

DATES

 

OFFICER

 

 

 

 

 

 

 

 

 

Jeffrey M. Ettinger

 

49

 

Chairman of the Board, President and Chief Executive Officer

 

11/21/06 to Present

 

1998

 

 

 

 

President and Chief Executive Officer

 

01/01/06 to 11/20/06

 

 

 

 

 

 

President and Chief Operating Officer

 

06/28/04 to 12/31/05

 

 

 

 

 

 

Group Vice President/President and Chief Executive Officer Jennie-O Turkey Store

 

03/03/03 to 06/27/04

 

 

 

 

 

 

Group Vice President/President and Chief Operating Officer Jennie-O Turkey Store

 

10/29/01 to 03/02/03

 

 

 

 

 

 

 

 

 

 

 

Jody H. Feragen

 

51

 

Senior Vice President and Chief Financial Officer

 

01/01/07 to Present

 

2000

 

 

 

 

Vice President (Finance) and Treasurer

 

10/31/05 to 12/31/06

 

 

 

 

 

 

Vice President and Treasurer

 

10/29/01 to 10/30/05

 

 

 

 

 

 

 

 

 

 

 

Gary J. Ray

 

61

 

President Protein Business Units

 

07/30/07 to Present

 

1988

 

 

 

 

Executive Vice President (Refrigerated Foods)

 

11/01/99 to 07/29/07

 

 

 

 

 

 

 

 

 

 

 

Ronald W. Fielding

 

54

 

Executive Vice President (Grocery Products/Mergers and Acquisitions)

 

01/01/07 to Present

 

1997

 

 

 

 

Group Vice President (Grocery Products)

 

10/31/05 to 12/31/06

 

 

 

 

 

 

Group Vice President (Consumer Products Sales)

 

07/26/04 to 10/30/05

 

 

 

 

 

 

Group Vice President (Sales Strategy)

 

06/02/03 to 07/25/04

 

 

 

 

 

 

Group Vice President (Meat Products)

 

11/01/99 to 06/01/03

 

 

 

 

 

 

 

 

 

 

 

Steven G. Binder

 

50

 

Group Vice President (Refrigerated Foods)

 

07/30/07 to Present

 

1998

 

 

 

 

Group Vice President (Foodservice)

 

10/30/00 to 07/29/07

 

 

 

 

 

 

 

 

 

 

 

Richard A. Bross

 

56

 

Group Vice President/President Hormel Foods International Corporation

 

10/29/01 to Present

 

1995

 

 

 

 

 

 

 

 

 

Robert A. Tegt

 

56

 

Group Vice President (Specialty Foods Group)

 

10/29/07 to Present

 

2005

 

 

 

 

Vice President (Specialty Foods Group)

 

01/01/06 to 10/28/07

 

 

 

 

 

 

Senior Vice President (Foodservice Division) – Jennie-O Turkey Store

 

04/30/01 to 12/31/05

 

 

 

 

 

 

 

 

 

 

 

Michael D. Tolbert

 

51

 

Group Vice President/President Jennie-O Turkey Store

 

10/31/05 to Present

 

2004

 

 

 

 

Vice President/President Jennie-O Turkey Store

 

05/31/04 to 10/30/05

 

 

 

 

 

 

Chief Information Officer

 

01/28/02 to 05/30/04

 

 

 

 

 

 

 

 

 

 

 

Larry L. Vorpahl

 

44

 

Group Vice President (Consumer Products Sales)

 

10/31/05 to Present

 

1999

 

 

 

 

Vice President and General Manager (Grocery Products)

 

12/01/03 to 10/30/05

 

 

 

 

 

 

Vice President (Grocery Products Marketing)

 

11/01/99 to 11/30/03

 

 

 

 

 

 

 

 

 

 

 

James W. Cavanaugh

 

58

 

Senior Vice President (External Affairs) and General Counsel

 

10/29/07 to Present

 

2001

 

 

 

 

Senior Vice President (External Affairs), General Counsel, and Corporate Secretary

 

01/01/05 to 10/28/07

 

 

 

 

 

 

Corporate Secretary and Senior Attorney

 

01/29/01 to 12/31/04

 

 

 

 

 

 

 

 

 

 

 

Thomas R. Day

 

49

 

Senior Vice President (Foodservice)

 

07/30/07 to Present

 

2000

 

 

 

 

Vice President (Foodservice Sales)

 

10/30/00 to 07/29/07

 

 

 

 

 

 

 

 

 

 

 

William F. Snyder

 

50

 

Senior Vice President (Supply Chain)

 

10/31/05 to Present

 

1999

 

 

 

 

Vice President (Refrigerated Foods Operations)

 

11/01/99 to 10/30/05

 

 

 

 

 

 

 

 

 

 

 

D. Scott Aakre

 

43

 

Vice President Marketing (Grocery Products)

 

10/31/05 to Present

 

2005

 

 

 

 

Director of Marketing (Grocery Products)

 

09/15/03 to 10/30/05

 

 

 

 

 

 

Group Product Manager (Grocery Products)

 

06/02/03 to 09/14/03

 

 

 

 

 

 

Group Product Manager (Meat Products)

 

04/27/98 to 06/01/03

 

 

 

 

 

 

 

 

 

 

 

Deanna T. Brady

 

42

 

Vice President (Foodservice Sales)

 

07/30/07 to Present

 

2007

 

 

 

 

Regional Sales Manager-West (Foodservice Sales)

 

06/02/03 to 07/29/07

 

 

 

 

 

 

Area Manager (Foodservice Sales)

 

06/26/00 to 06/01/03

 

 

 

 

7



 

 

 

 

 

 

 

 

 

 

Julie H. Craven

 

52

 

Vice President (Corporate Communications)

 

08/01/05 to Present

 

2005

 

 

 

 

Director (Corporate Communications)

 

05/20/02 to 7/31/05

 

 

 

 

 

 

 

 

 

 

 

Bryan D. Farnsworth

 

50

 

Vice President (Quality Management)

 

08/01/05 to Present

 

2005

 

 

 

 

Director (Quality Management)

 

12/02/96 to 07/31/05

 

 

 

 

 

 

 

 

 

 

 

Roland G. Gentzler

 

53

 

Vice President (Finance) and Treasurer

 

01/01/07 to Present

 

2007

 

 

 

 

Assistant Controller and Director of Finance (Refrigerated Foods)

 

05/01/00 to 12/31/06

 

 

 

 

 

 

 

 

 

 

 

Dennis B. Goettsch

 

54

 

Vice President (Foodservice Marketing)

 

10/30/00 to Present

 

2000

 

 

 

 

 

 

 

 

 

Daniel A. Hartzog

 

56

 

Vice President (Consumer Products Sales)

 

07/26/04 to Present

 

2000

 

 

 

 

Vice President (Meat Products Sales)

 

10/30/00 to 07/25/04

 

 

 

 

 

 

 

 

 

 

 

David P. Juhlke

 

48

 

Vice President (Human Resources)

 

10/31/05 to Present

 

2005

 

 

 

 

Vice President (Human Resources/Administration) – Jennie-O Turkey Store

 

04/30/01 to 10/30/05

 

 

 

 

 

 

 

 

 

 

 

Donald H. Kremin

 

47

 

Vice President (Consumer Product Sales)

 

10/29/07 to Present

 

2007

 

 

 

 

Director Wal-Mart Business Team (Consumer Product Sales)

 

09/05/05 to 10/28/07

 

 

 

 

 

 

Director Customer Development-Eastern Chains (Consumer Product Sales)

 

07/26/04 to 09/04/05

 

 

 

 

 

 

National Sales Manager (Ethnic Specialties – Grocery Products)

 

12/27/99 to 07/25/04

 

 

 

 

 

 

 

 

 

 

 

Phillip L. Minerich, Ph.D.

 

54

 

Vice President (Research and Development)

 

10/31/05 to Present

 

2005

 

 

 

 

Director (Product & Process Development & Packaging)

 

07/14/03 to 10/30/05

 

 

 

 

 

 

Development Leader (New Interventions)

 

07/22/02 to 07/13/03

 

 

 

 

 

 

 

 

 

 

 

Kurt F. Mueller

 

51

 

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

 

 

 

 

 

 

 

 

 

 

 

Larry J. Pfeil

 

58

 

Vice President (Engineering)

 

11/01/99 to Present

 

1999

 

 

 

 

 

 

 

 

 

Russell C. Potter

 

59

 

Vice President (Grocery Products Production)

 

09/18/06 to Present

 

2006

 

 

 

 

Director (Grocery Products Production)

 

05/02/94 to 09/17/06

 

 

 

 

 

 

 

 

 

 

 

Douglas R. Reetz

 

53

 

Vice President (Consumer Products Sales)

 

07/26/04 to Present

 

1999

 

 

 

 

Vice President (Grocery Products Sales)

 

11/01/99 to 07/25/04

 

 

 

 

 

 

 

 

 

 

 

Bruce R. Schweitzer

 

56

 

Vice President (Refrigerated Foods Operations)

 

10/31/05 to Present

 

2005

 

 

 

 

Plant Manager (Austin)

 

07/19/04 to 10/30/05

 

 

 

 

 

 

Plant Manager (Fremont)

 

09/27/99 to 07/18/04

 

 

 

 

 

 

 

 

 

 

 

James N. Sheehan

 

52

 

Vice President and Controller

 

05/01/00 to Present

 

1999

 

 

 

 

 

 

 

 

 

James M. Splinter

 

45

 

Vice President (Marketing-Consumer Products – Refrigerated Foods)

 

06/02/03 to Present

 

2003

 

 

 

 

Senior Vice President (Retail Division) – Jennie-O Turkey Store

 

04/30/01 to 06/01/03

 

 

 

 

 

 

 

 

 

 

 

Joe C. Swedberg

 

52

 

Vice President (Legislative Affairs and Marketing Services)

 

06/02/03 to Present

 

1999

 

 

 

 

Vice President (Meat Products Marketing)

 

11/01/99 to 06/01/03

 

 

 

 

 

 

 

 

 

 

 

Brian D. Johnson

 

47

 

Corporate Secretary & Senior Attorney

 

10/29/07 to Present

 

2007

 

 

 

 

Assistant Secretary & Senior Attorney

 

01/31/05 to 10/28/07

 

 

 

 

 

 

Senior Attorney

 

08/14/00 to 01/30/05

 

 

 

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.

 

 

8



 

      Item 1A.  RISK FACTORS

 

Information on the Company’s risk factors included in the Management’s Discussion and Analysis of Financial Condition and Results of Operations on pages 32 through 34 of the Annual Stockholders’ Report for the year ended October 28, 2007, is incorporated herein by reference.

 

Item 1B.  UNRESOLVED STAFF COMMENTS

 

None.

 

 

9



 Item 2.  PROPERTIES

Location

 

Principal Segment (1)

 

Approximate Area (Square Feet, Unless Noted)

 

Owned or Leased

 

Lease
Expiration Date

 

 

 

 

 

 

 

 

 

Harvest and Processing Plants

 

 

 

 

 

 

 

 

Austin, Minnesota

 

Refrigerated Foods

 

1,292,000

 

Owned

 

 

 

 

Grocery Products

 

 

 

 

 

 

 

 

Specialty Foods

 

 

 

 

 

 

 

 

All Other

 

 

 

 

 

 

Barron, Wisconsin

 

JOTS

 

372,000

 

Owned

 

 

Beijing, China

 

All Other

 

94,000

 

80.0% Owned

 

 

Faribault, Minnesota

 

JOTS

 

170,000

 

Owned

 

 

Fremont, Nebraska

 

Refrigerated Foods

 

670,000

 

Owned

 

 

 

 

Grocery Products

 

 

 

 

 

 

 

 

Specialty Foods

 

 

 

 

 

 

 

 

All Other

 

 

 

 

 

 

Melrose, Minnesota

 

JOTS

 

136,000

 

Owned

 

 

Vernon, California

 

Refrigerated Foods

 

750,000

 

Owned

 

 

 

 

All Other

 

113,000

 

Leased

 

March 2014

Willmar, Minnesota

 

JOTS

 

456,000

 

Owned

 

 

 

 

 

 

 

 

 

 

 

Processing Plants

 

 

 

 

 

 

 

 

Albert Lea, Minnesota

 

Refrigerated Foods

 

72,000

 

Owned

 

 

Algona, Iowa

 

Refrigerated Foods

 

153,000

 

Owned

 

 

Alma, Kansas

 

Refrigerated Foods

 

70,000

 

Owned

 

 

Ames, Iowa

 

Refrigerated Foods

 

9,000

 

Leased

 

March 2009

Aurora, Illinois

 

Specialty Foods

 

141,000

 

Owned

 

 

Beloit, Wisconsin

 

Grocery Products

 

339,000

 

Owned

 

 

 

 

Specialty Foods

 

 

 

 

 

 

Bremen, Georgia

 

Specialty Foods

 

156,000

 

Owned

 

 

Browerville, Minnesota

 

Refrigerated Foods

 

52,000

 

Owned

 

 

Chino, California

 

Refrigerated Foods

 

88,000

 

Leased

 

April 2015

Ft. Dodge, Iowa

 

Grocery Products

 

17,000

 

Owned

 

 

Knoxville, Iowa

 

Refrigerated Foods

 

130,000

 

Owned

 

 

Lathrop, California

 

Refrigerated Foods

 

85,000

 

Owned

 

 

Long Prairie, Minnesota

 

Refrigerated Foods

 

80,000

 

Owned

 

 

Mitchellville, Iowa

 

Specialty Foods

 

81,000

 

Owned

 

 

Montevideo, Minnesota

 

JOTS

 

85,000

 

Owned

 

 

Nevada, Iowa

 

Refrigerated Foods

 

139,000

 

Owned

 

 

New Berlin, Wisconsin

 

Grocery Products

 

84,000

 

Leased

 

February 2012

Osceola, Iowa

 

Refrigerated Foods

 

365,000

 

Owned

 

 

Pelican Rapids, Minnesota

 

JOTS

 

224,000

 

Owned

 

 

Perrysburg, Ohio

 

Specialty Foods

 

183,000

 

Owned

 

 

Quakertown, Pennsylvania

 

Specialty Foods

 

10,000

 

Owned

 

 

Rochelle, Illinois

 

Refrigerated Foods

 

520,000

 

Owned

 

 

 

 

Grocery Products

 

 

 

 

 

 

 

 

Specialty Foods

 

 

 

 

 

 

San Leandro, California

 

Refrigerated Foods

 

41,000

 

Leased

 

November 2021

Savannah, Georgia

 

Specialty Foods

 

353,000

 

Owned

 

 

Shanghai, China

 

All Other

 

38,000

 

80.7% Owned

 

 

Sparta, Wisconsin

 

Specialty Foods

 

385,000

 

Owned

 

 

St. Paul, Minnesota

 

Refrigerated Foods

 

57,000

 

Owned

 

 

 10



 Item 2.  PROPERTIES - Continued

Location

 

Principal Segment (1)

 

Approximate Area (Square Feet,
Unless Noted)

 

Owned or Leased

 

Lease
Expiration Date

 

 

 

 

 

 

 

 

 

Processing Plants (continued)

 

 

 

 

 

 

 

 

Stockton, California

 

Grocery Products

 

139,000

 

Owned

 

 

 

 

Specialty Foods

 

 

 

 

 

 

Tucker, Georgia

 

Grocery Products

 

259,000

 

Owned

 

 

 

 

Refrigerated Foods

 

 

 

 

 

 

 

 

Specialty Foods

 

 

 

 

 

 

Turlock, California

 

Grocery Products

 

153,000

 

Owned

 

 

 

 

Specialty Foods

 

 

 

 

 

 

Visalia, California

 

Specialty Foods

 

107,000

 

Owned

 

 

Wichita, Kansas

 

Refrigerated Foods

 

80,000

 

Owned

 

 

 

 

 

 

 

 

 

 

 

Warehouse/Distribution Centers

 

 

 

 

 

 

 

 

Austin, Minnesota

 

Refrigerated Foods

 

83,000

 

Owned

 

 

 

 

Grocery Products

 

 

 

 

 

 

Bondurant, Iowa

 

Specialty Foods

 

99,000

 

Owned

 

 

Dayton, Ohio

 

Refrigerated Foods

 

140,000

 

Owned

 

 

 

 

Grocery Products

 

 

 

 

 

 

 

 

Specialty Foods

 

 

 

 

 

 

Eldridge, Iowa

 

Grocery Products

 

280,000

 

Leased

 

September 2015

 

 

Specialty Foods

 

 

 

 

 

 

Nevada, Iowa

 

Refrigerated Foods

 

93,000

 

Owned

 

 

 

 

 

 

2,000

 

Leased

 

December 2008

Osceola, Iowa

 

All Segments

 

233,000

 

Owned

 

 

Stockton, California

 

Grocery Products

 

232,000

 

Leased

 

July 2010

Tucker, Georgia

 

Grocery Products

 

96,000

 

Leased

 

September 2009

 

 

Refrigerated Foods

 

 

 

 

 

 

 

 

Specialty Foods

 

 

 

 

 

 

Willmar, Minnesota

 

JOTS

 

25,000

 

Owned

 

 

 

 

 

 

 

 

 

 

 

Hog Confinement Buildings

 

 

 

 

 

 

 

 

Albin, Wyoming

 

Refrigerated Foods

 

475,000

 

Owned

 

 

Corcoran, California

 

Refrigerated Foods

 

806,000

 

Leased

 

December 2010

Las Animas, Colorado

 

Refrigerated Foods

 

566,000

 

Owned

 

 

 

 

 

 

141,000

 

Leased

 

December 2008

Pine Bluffs, Wyoming

 

Refrigerated Foods

 

64,000

 

Owned

 

 

Snowflake, Arizona

 

Refrigerated Foods

 

1,526,000

 

Owned

 

 

 

 

 

 

 

 

 

 

 

Feed Mills

 

 

 

 

 

 

 

 

Atwater, Minnesota

 

JOTS

 

19,000

 

Owned

 

 

Barron, Wisconsin

 

JOTS

 

26,000

 

Owned

 

 

Corcoran, California

 

Refrigerated Foods

 

5,000

 

Leased

 

December 2010

Dawson, Minnesota

 

JOTS

 

37,000

 

Owned

 

 

Faribault, Minnesota

 

JOTS

 

25,000

 

Owned

 

 

Henning, Minnesota

 

JOTS

 

5,000

 

Owned

 

 

Northfield, Minnesota

 

JOTS

 

17,000

 

Owned

 

 

Perham, Minnesota

 

JOTS

 

26,000

 

Owned

 

 

Swanville, Minnesota

 

JOTS

 

29,000

 

Owned

 

 

 

 

 

 

 

 

 

 

 

Hatcheries

 

 

 

 

 

 

 

 

Barron, Wisconsin

 

JOTS

 

28,000

 

Owned

 

 

Detroit Lakes, Minnesota

 

JOTS

 

31,000

 

Owned

 

 

Henning, Minnesota

 

JOTS

 

22,000

 

Owned

 

 

 11



 Item 2.  PROPERTIES - Continued

Location

 

Principal Segment (1)

 

Approximate Area (Square Feet,
Unless Noted)

 

Owned or Leased

 

Lease
Expiration Date

 

 

 

 

 

 

 

 

 

Turkey Farms

 

 

 

 

 

 

 

 

Minnesota and Wisconsin

 

JOTS

 

15,000 (2)

 

Owned

 

 

 

 

 

 

 

 

 

 

 

Research and Development

 

 

 

 

 

 

 

 

Austin, Minnesota

 

All Segments

 

79,000

 

Owned

 

 

 

 

 

 

 

 

 

 

 

Administrative Offices

 

 

 

 

 

 

 

 

Austin, Minnesota

 

All Segments

 

231,000

 

Owned

 

 

Spicer, Minnesota

 

JOTS

 

11,000

 

Leased

 

June 2009

Vernon, California

 

Refrigerated Foods

 

15,000

 

Leased

 

December 2008


(1)

Many of the Company’s properties are not exclusive to any one segment, and a few of the properties are utilized in all five segments. For locations that support multiple segments, but with a substantial percentage of activity attributable to certain segments, only the principal segments have been listed.

(2)

Acres

 

The Company has renovation or building projects in progress at Austin, Minnesota; Atlanta, Georgia; Browerville, Minnesota; Pelican Rapids, Minnesota; and Rochelle, Illinois.  The Company believes its operating facilities are well maintained and suitable for current production volumes, and expansion plans are being pursued to accommodate all volumes anticipated in the foreseeable future. 

 

Item 3.  LEGAL PROCEEDINGS  

 

The Company is a party to various legal proceedings related to the on-going operation of its business.  The resolution of any currently known matters is not expected to have a material effect on the Company’s financial condition, results of operations, or liquidity. 

 

Item 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS 

 

No matters were submitted to stockholders during the fourth quarter of the 2007 fiscal year.

 

 12


 


PART II

 

Item 5.  MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

 

The high and low sales prices of the Company’s common stock and the dividends per share declared for each fiscal quarter of 2007 and 2006, respectively, are shown below:

 

2007

 

High

 

Low

 

Dividend

 

First Quarter

 

$

39.09

 

$

34.83

 

$

.1500

 

Second Quarter

 

39.15

 

36.05

 

.1500

 

Third Quarter

 

39.88

 

35.00

 

.1500

 

Fourth Quarter

 

37.36

 

30.04

 

.1500

 

 

 

 

 

 

 

 

 

2006

 

High

 

Low

 

Dividend

 

First Quarter

 

$

35.43

 

$

31.46

 

$

.1400

 

Second Quarter

 

36.09

 

32.59

 

.1400

 

Third Quarter

 

38.34

 

33.15

 

.1400

 

Fourth Quarter

 

38.41

 

35.16

 

.1400

 

 

Additional information about dividends, principal market of trade, and number of stockholders on page 57 of the Annual Stockholders’ Report for the year ended October 28, 2007, is incorporated herein by reference.  The Company’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 2007 are shown below:

 

Period

 

Total Number of Shares Purchased(1)

 

Average Price Paid Per Share

 

Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs(2)

 

Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs(2)

 

July 30, 2007 —

 

 

 

 

 

 

 

 

 

September 2, 2007

 

210,190

 

$

36.09

 

210,190

 

5,056,049

 

September 3, 2007 —

 

 

 

 

 

 

 

 

 

September 30, 2007

 

873,522

 

$

35.52

 

873,522

 

4,182,527

 

October 1, 2007 —

 

 

 

 

 

 

 

 

 

October 28, 2007

 

6,100

 

$

35.36

 

5,700

 

4,176,827

 

Total

 

1,089,812

 

$

35.63

 

1,089,412

 

 

 


(1) Shares repurchased during the quarter, other than through publicly announced plans or programs, represent purchases for the Company’s employee awards program.

 

(2) On October 2, 2002, the Company announced that its Board of Directors had authorized the Company to repurchase up to 10,000,000 shares of common stock with no expiration date.

 

Item 6.  SELECTED FINANCIAL DATA

 

Selected Financial Data for the five years ended October 28, 2007, on page 17 of the Annual Stockholders’ Report for the year ended October 28, 2007, is incorporated herein by reference.

 

Item 7.  MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

 

Information in the Management’s Discussion and Analysis of Financial Condition and Results of Operations on pages 18 through 35 of the Annual Stockholders’ Report for the year ended October 28, 2007, is incorporated herein by reference.

 

Item 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

 

Information on the Company’s exposure to market risk included in the Management’s Discussion and Analysis of Financial Condition and Results of Operations on pages 34 and 35 of the Annual Stockholders’ Report for the year ended October 28, 2007, is incorporated herein by reference.

 

13



 

Item 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

 

Consolidated Financial Statements, including unaudited quarterly data, on pages 39 through 56 and the Report of Independent Registered Public Accounting Firm on page 38 of the Annual Stockholders’ Report for the year ended October 28, 2007, are incorporated herein by reference.

 

Item 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

 

None.

 

Item 9A.  CONTROLS AND PROCEDURES

 

Disclosure Controls and Procedures

 

As of the end of the period covered by this report (the Evaluation Date), the Company 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)).  In designing and evaluating the disclosure controls and procedures, management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives.  Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of the Evaluation Date, our disclosure controls and procedures were effective to provide reasonable assurance that information we are required to disclose in reports we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in Securities and Exchange Commission  rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

 

Internal Control over Financial Reporting

 

(a)                The report entitled “Management’s Report on Internal Control Over Financial Reporting” on page 36 of the Annual Stockholder’s Report for the year ended October 28, 2007, is incorporated herein by reference.

 

(b)               The report entitled “Report of Independent Registered Public Accounting Firm” on page 37 of the Annual Stockholder’s Report for the year ended October 28, 2007, is incorporated herein by reference.

 

(c)                During the fourth quarter of fiscal year 2007, 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.

 

Item 9B.  OTHER INFORMATION

 

None.

 

14



 

PART III

 

Item 10.  DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

 

Information under “Item 1 - Election of Directors” on pages 2 through 4, information under “Board Independence” on pages 5 and 6, and information under “Board of Director and Committee Meetings” on pages 6 through 8 of the definitive proxy statement for the Annual Meeting of Stockholders to be held January 29, 2008, is incorporated herein by reference.

 

Information concerning Executive Officers is set forth in Item 1(f) of Part I pursuant to Instruction 3, Paragraph (b) of Item 401 of Regulation S-K.

 

Information under “Section 16(a) Beneficial Ownership Reporting Compliance,” on page 35 of the definitive proxy statement for the Annual Meeting of Stockholders to be held January 29, 2008, 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 Web site at www.hormelfoods.com, free of charge, under the caption, “Investors - Corporate Governance.”  The Company intends to satisfy any disclosure requirement under Item 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 Web site at the address and location specified above.

 

Item 11.  EXECUTIVE COMPENSATION

 

Information commencing with “Executive Compensation” on page 17 through “Compensation Committee Interlocks and Insider Participation” on page 35, and information under “Compensation of Directors” on pages 9 through 11 of the definitive proxy statement for the Annual Meeting of Stockholders to be held January 29, 2008, is incorporated herein by reference.

 

Item 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

 

Information under “Equity Compensation Plan Information” on page 15, and information under “Security Ownership of Certain Beneficial Owners” and “Security Ownership of Management” on pages 15 through 17 of the definitive proxy statement for the Annual Meeting of Stockholders to be held January 29, 2008, is incorporated herein by reference.

 

Item 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

 

Information under “Related Party Transactions” on page 35 and “Board Independence” on pages 5 and 6 of the definitive proxy statement for the Annual Meeting of Stockholders to be held January 29, 2008, is incorporated herein by reference.

 

Item 14.  PRINCIPAL ACCOUNTANT FEES AND SERVICES

 

Information under “Independent Registered Public Accounting Firm Fees” through “Audit Committee Preapproval Policies and Procedures” on pages 11 and 12 of the Company’s definitive proxy statement for the Annual Meeting of Stockholders to be held January 29, 2008, is incorporated herein by reference.

 

PART IV

 

Item 15.  EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

 

The response to Item 15 is submitted as a separate section of this report.

 

15



 

SIGNATURES

 

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

 

HORMEL FOODS CORPORATION

 

 

 

 

 

By:

/s/ JEFFREY M. ETTINGER

December 21, 2007

 

 

JEFFREY M. ETTINGER, Chairman of the

Date

 

 

Board, President and Chief Executive Officer

 

 

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 registrant and in the capacities and on the dates indicated.

 

 

 

Name

 

Date

 

Title

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  /s/ JEFFREY M. ETTINGER

 

12/21/07

 

Chairman of the Board, President, Chief

  JEFFREY M. ETTINGER

 

 

 

Executive Officer, and Director

 

 

 

 

(Principal Executive Officer)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  /s/ JODY H. FERAGEN

 

12/21/07

 

Senior Vice President, Chief Financial

  JODY H. FERAGEN

 

 

 

Officer, and Director

 

 

 

 

(Principal Financial Officer)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  /s/ JAMES N. SHEEHAN

 

12/21/07

 

Vice President and Controller

  JAMES N. SHEEHAN

 

 

 

(Principal Accounting Officer)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  /s/ GARY J. RAY*

 

12/21/07

 

President Protein Business Units

  GARY J. RAY

 

 

 

and Director

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  /s/ TERRELL K. CREWS*

 

12/21/07

 

Director

  TERRELL K. CREWS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  /s/ LUELLA G. GOLDBERG*

 

12/21/07

 

Director

  LUELLA G. GOLDBERG

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  /s/ SUSAN I. MARVIN*

 

12/21/07

 

Director

  SUSAN I. MARVIN

 

 

 

 

 

16



 

Name

 

Date

 

Title

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  /s/ JOHN L. MORRISON*

 

12/21/07

 

Director

  JOHN L. MORRISON

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  /s/ ELSA A. MURANO*

 

12/21/07

 

Director

  ELSA A. MURANO

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  /s/ ROBERT C. NAKASONE*

 

12/21/07

 

Director

  ROBERT C. NAKASONE

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  /s/ RONALD D. PEARSON*

 

12/21/07

 

Director

  RONALD D. PEARSON

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  /s/ DAKOTA A. PIPPINS*

 

12/21/07

 

Director

  DAKOTA A. PIPPINS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  /s/ DR. HUGH C. SMITH*

 

12/21/07

 

Director

  DR. HUGH C. SMITH

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  /s/ JOHN G. TURNER*

 

12/21/07

 

Director

  JOHN G. TURNER

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  *By: /s/ JAMES N. SHEEHAN

 

12/21/07

 

 

JAMES N. SHEEHAN,

 

 

 

 

as Attorney-In-Fact

 

 

 

 

 

17



 

F-1

 

ANNUAL REPORT ON FORM 10-K

 

ITEM 15

 

 

 

 

LIST OF FINANCIAL STATEMENTS

 

FINANCIAL STATEMENT SCHEDULE

 

LIST OF EXHIBITS

 

 

 

 

YEAR ENDED OCTOBER 28, 2007

 

HORMEL FOODS CORPORATION

 

Austin, Minnesota

 

18



 

F-2

 

Item 15

 

LIST OF FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULES

 

HORMEL FOODS CORPORATION

 

FINANCIAL STATEMENTS

 

The following consolidated financial statements of Hormel Foods Corporation included in the Annual Stockholders’ Report for the year ended October 28, 2007, are incorporated herein by reference in Item 8 of Part II of this report:

 

Consolidated Statements of Financial Position—October 28, 2007, and October 29, 2006.

 

Consolidated Statements of Operations—Years Ended October 28, 2007, October 29, 2006, and October 30, 2005.

 

Consolidated Statements of Changes in Shareholders’ Investment—Years Ended October 28, 2007, October 29, 2006, and October 30, 2005.

 

Consolidated Statements of Cash Flows—Years Ended October 28, 2007, October 29, 2006, and October 30, 2005.

 

Notes to Financial Statements—October 28, 2007.

 

Report of Independent Registered Public Accounting Firm

 

FINANCIAL STATEMENT SCHEDULES

 

The following consolidated financial statement schedule of Hormel Foods Corporation required pursuant to Item 15(c) is submitted herewith:

 

Schedule II - Valuation and Qualifying Accounts and Reserves...F-3

 

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.

 

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.

 

19



 

F-3

 

SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS AND RESERVES

 

HORMEL FOODS CORPORATION

 

(In Thousands)

 

 

 

 

 

Additions

 

 

 

 

 

Classification

 

Balance at Beginning of Period

 

Charged to Costs and Expenses

 

Charged to Other Accounts- Describe

 

Deductions- Describe

 

Balance at End of Period

 

 

     

 

     

 

     

 

     

 

     

 

 

Valuation reserve deduction from assets account:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fiscal year ended

 

 

 

 

 

 

 

 

 

 

 

October 28, 2007

 

 

 

 

 

 

 

 

 

 

 

Allowance for

 

 

 

 

 

 

 

 

 

 

 

doubtful accounts

 

 

 

 

 

 

 

$

979

(2)

 

 

receivable

 

$

3,922

 

$

(257

)

$

187

(1)

(307)

(3)

$

3,180

 

 

 

 

 

 

 

 

 

 

 

 

 

Fiscal year ended

 

 

 

 

 

 

 

 

 

 

 

October 29, 2006

 

 

 

 

 

 

 

 

 

 

 

Allowance for

 

 

 

 

 

 

 

 

 

 

 

doubtful accounts

 

 

 

 

 

 

 

$

937

(2)

 

 

receivable

 

$

5,518

 

$

(1,716

)

$

71

(4)

(986)

(3)

$

3,922

 

 

 

 

 

 

 

 

 

 

 

 

 

Fiscal year ended

 

 

 

 

 

 

 

 

 

 

 

October 30, 2005

 

 

 

 

 

 

 

 

 

 

 

Allowance for

 

 

 

 

 

 

 

 

 

 

 

doubtful accounts

 

 

 

 

 

 

 

$

1,287

(2)

 

 

receivable

 

$

4,600

 

$

(1,233

)

$

1,120

(5)

(2,318)

(3)

$

5,518

 


Note (1) — Increase in the reserve due to the inclusion of Burke and Provena accounts receivable.

 

Note (2) — Uncollectible accounts written off.

 

Note (3) — Recoveries on accounts previously written off.

 

Note (4) — Increase in the reserve due to the inclusion of Valley Fresh accounts receivable.

 

Note (5) — Increase in the reserve due to the inclusion of Farmer John, Mexican Accent, and Mark-Lynn accounts receivable.

 

20



 

LIST OF EXHIBITS

 

HORMEL FOODS CORPORATION

 

NUMBER

 

DESCRIPTION OF DOCUMENT

 

 

 

3.1(1)

 

Certificate of Incorporation as amended to date. (Incorporated by reference to Exhibit 3A-1 to Hormel’s Annual Report on Form 10-K/A for the fiscal year ended October 28, 2000, File No. 001-02402.)

 

 

 

3.2(1)

 

Bylaws as amended to date. (Incorporated by reference to Exhibit 3.2 to Hormel’s Annual Report on Form 10-K for the fiscal year ended October 30, 2005, File No. 001-02402.)

 

 

 

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 Hormel’s Registration Statement on Form S-4 dated, August 28, 2001, File No. 333-68498.)

 

 

 

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 Hormel’s Registration Statement on Form S-4 dated August 28, 2001, File No. 333-68498.)

 

 

 

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 Hormel’s Registration Statement on Form S-4 dated August 28, 2001, File No. 333-68498.)

 

 

 

4.4(1)

 

Pursuant to Item 601(b)(4)(iii) of Regulation S-K, copies of instruments defining the rights of holders of certain long-term debt are not filed. Hormel agrees to furnish copies thereof to the Securities and Exchange Commission upon request.

 

 

 

10.1(1)(3)

 

Hormel Foods Corporation Operators’ Shares Incentive Compensation Plan. (Incorporated by reference to Appendix A to Hormel’s definitive Proxy Statement filed on December 23, 1997, File No. 001-02402.)

 

 

 

10.2(1)(3)

 

Hormel Foods Corporation Supplemental Executive Retirement Plan (2005 Restatement.) (Incorporated by reference to Exhibit 10.1 to Hormel’s Current Report on Form 8-K dated September 18, 2006, File No. 001-02402.)

 

 

 

10.3(1)(3)

 

Hormel Foods Corporation 2000 Stock Incentive Plan (Amended 1-31-2006.) (Incorporated by reference to Exhibit 10.1 to Hormel’s Current Report on Form 8-K dated January 31, 2006, File No. 001-02402.)

 

 

 

10.4(1)(3)

 

Hormel Foods Corporation Executive Deferred Income Plan II (2008 Restatement.) (Incorporated by reference to Exhibit 10.1 to Hormel’s Current Report on Form 8-K dated October 1, 2007, File No. 001-02402.)

 

 

 

10.5(1)

 

Form of Indemnification Agreement for Directors and Officers. (Incorporated by reference to Exhibit 10.8 to Hormel’s Annual Report on Form 10-K for the fiscal year ended October 26, 2002, File No. 001-02402.)

 

 

 

10.6(1)(3)

 

Hormel Foods Corporation Nonemployee Director Deferred Stock Plan (Plan Adopted October 4, 1999; Amended and Restated September 18, 2006.) (Incorporated by reference to Exhibit 10.2 to Hormel’s Current Report on Form 8-K dated September 18, 2006, File No. 001-02402.)

 

 

 

10.7(1)(3)

 

Hormel Foods Corporation 2005 Long-Term Incentive Plan. (Incorporated by reference to Exhibit 10.1 to Hormel’s Current Report on Form 8-K dated January 25, 2005, File No. 001-02402.)

 

 

 

10.8(1)(3)

 

Hormel Survivor Income Plan for Executives (1993 Restatement.) (Incorporated by reference to Exhibit 10.11 to Hormel’s Annual Report on Form 10-K for the fiscal year ended October 29, 2006, File No. 001-02402.)

 

 

 

11.1(1)

 

Statement re: computation of per share earnings. (Included in Exhibit 13.1 filed with this Annual Report on Form 10-K for the fiscal year ended October 28, 2007.)

 

 

 

13.1(2)

 

Pages 17 through 58 of the Annual Stockholders’ Report for the fiscal year ended October 28, 2007.

 

 

 

21.1(2)

 

Subsidiaries of the Registrant.

 

 

 

23.1(2)

 

Consent of Independent Registered Public Accounting Firm.

 

 

 

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(1)

 

U.S. $200,000,000 Credit Agreement, dated as of June 1, 2005, between Hormel, the banks identified on the signature pages thereof, and Citicorp U.S.A. Inc., as Administrative Agent. (Incorporated by reference to Exhibit 99 to Hormel’s Current Report on Form 8-K dated June 1, 2005, File No. 001-02402.)


(1)

 

Document has previously been filed with the Securities and Exchange Commission and is incorporated herein by reference.

 

 

 

(2)

 

These exhibits transmitted via EDGAR.

 

 

 

(3)

 

Management compensatory plan.

 

21