Hormel Foods, an American processor of meat and food products, said it plans to expand into the production of cold cuts and pepperoni.
Due to steady cash flow, liquidity, and a strong balance sheet, the company remained in a strong position in fiscal 2021, which began on October 26, 2020.
As a result, it reported at the beginning of its current fiscal year that it plans to invest its capital to support the growth of value-added businesses and advertise its many iconic brands.
Specifically, Hormel Foods included in its plans the opening of a new dry sausage plant for the Columbus brand, as well as investing in additional capacity to support its pepperoni business.
Additionally, the company is committed to returning cash to shareholders in the form of dividends.
Previously, the company continued to reinvest in the business through capital expenditures while returning cash to shareholders in the form of dividends.
Capital expenditures were $ 367.5 million in fiscal 2020.
Notable projects included the completion of the Burke pizza ingredient plant expansion, significant work on a new dry sausage facility in Nebraska, Project Orion and other projects to support the growth of branded products.
The annual dividend for 2021 will be $ 0.98 per share and marks the 55th consecutive year of dividend increases, representing an increase of 5 percent.
In March, the company acquired Sadler’s Smokehouse for $ 270.8 million.
Then, in June, it issued $ 1 billion 10-year notes at an annual interest rate of 1.8 percent.
The proceeds from the offering are expected to provide liquidity and allow the company to take advantage of strategic opportunities.
Since the beginning of the current fiscal year, Hormel Foods expects its retail product sales to remain strong, but not at the level of growth seen in fiscal 2020.
Brands the company markets include Herdez Sauces, Hormel Black Label Bacon, Applegate Brands, and Jennie-O Lean Ground Turkey.