Hershey: net income 66 percent lower than Q3/2006

Hershey / PA. (thc) The Hershey Company announced sales and earnings for the third quarter ended September 30, 2007. Consolidated net sales were 1.399.469.000 USD compared with 1.416.202.000 USD for the third quarter of 2006. Net income for the third quarter of 2007 was 62.784.000 USD compared with 185.121.000 USD for the comparable period of 2006.

For the third quarters of 2007 and 2006, these results, prepared in accordance with generally accepted accounting principles («GAAP»), include net pre-tax charges of 151,9 million USD and 1,7 million USD, respectively. The 2007 charges are associated with the Global Supply Chain Transformation plan announced in February, while the 2006 charges primarily relate to the completed business realignment initiatives announced in July 2005. Net income from operations, which excludes the net charges for the third quarters of 2007 and 2006, was 157.230.000 USD in 2007, compared with 186.234.000 USD in 2006.

Hershey´s is cutting the number of its production lines by more than one-third, outsourcing the manufacturing of less profitable items and building a factory in Mexico to meet emerging market demands.

Chief Executive Richard Lenny said the restructuring effort «remains on track and is scheduled to deliver savings of about 15 million USD by the end of the year with a significant step-up in 2008» (press release).