Austin Daily Herald

Hormel Foods Corporation, reported fiscal 2003 first quarter net earnings of $46.9 million compared with $50.4 million a year earlier.

Earnings per share were $.34 versus $.36 in the fiscal 2002 first quarter.

"The protein markets continued to be a challenge during the first quarter, and our financial performance reflected these conditions," said Joel W. Johnson, chairman of the board, president and chief executive officer. "Our diversified portfolio of packaged food products helped to partially offset the challenges in our protein businesses.

"During the quarter, Refrigerated Foods continued to contend with the profitability impacts of the global protein oversupply and above-market procurement contract payments.

"We were pleased with the first month of integration of the Diamond Crystal Brands business, which occurred during January. The business got off to a good start and is already contributing to the bottom line," Johnson said.

"As we noted in our November conference call with investors, fiscal 2003 pension expense was expected to increase," Johnson continued.

"Our first quarter pension expense was $3.2 million higher than a year ago."

At the end of the first quarter, the debt-to-capital ratio was 27 percent and EBITDA-to-interest coverage was 12.8 times (based on a rolling 12-month average).