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HERSHEY, Pa., -- Bearing out last week's speculation, Hershey Foods Corp. said it is launching a "value-enhancing strategy" that includes dropping "Foods" from its name, the formation of two new business groups to capitalize on growth opportunities, and a proposed increase in the company's authorized stock.
In commenting on the announcement, Richard H. Lenny, chairman, president and c.e.o., Hershey Foods Corp., said, "We established our value-enhancing strategy and embarked upon our mission to execute it consistently and predictably in October 2001. Delivering upon this strategy -- whose foundation is profitable organic growth with significantly improved margins and return on investment -- has enabled us to achieve superior performance on behalf of our stockholders and employees."
The proposal to change the company’s name to "The Hershey Company," is a reflection of "how our consumers and customers best know us," Lenny said. "The new name conveys our long-term focus on Hershey being a leading confectionery and snack company. We're retaining our iconic name and enduring heritage as the key component of our corporate identity."
The company also said is will form two new business groups -- a U.S. confectionery business group and a U.S. snacks business group -- in order to strengthen its leadership within the confectionery segment and expand its presence in the broader snacks market. The creation of the new business groups will bring sharper focus and energy to Hershey's long-term growth opportunities in each of the markets, said Lenny.
Thomas K. Hernquist, current s.v.p./c.m.o., has been named s.v.p./president of Hershey's U.S. confectionery group. A search currently is underway for a president of the U.S. snacks business group. In his new role, Hernquist will lead Hershey's domestic chocolate and confectionery businesses. He also will continue to have responsibility for Hershey's special retail outlets, including Hershey's Chocolate World visitors center, Hershey's Time Square store and the new Hershey's Chicago store set to open in the spring of 2005.
The company also said its board has voted to recommend that stockholders approve an increase in the number of authorized shares of common and Class B common stock. While there are no current plans to issue additional shares, stockholder approval of this proposal would enable the company to consider and implement a stock split as well as respond quickly as opportunities arise to achieve its strategic growth objectives: "This proposed increase in the number of authorized shares will ensure that we have the financial resources to support the long-term growth of our company," according to Lenny.