For the second quarter of 2014, results included net pre-tax charges of $2.0 million or $0.01 per share-diluted. These charges included $1.2 million related to the Project Next Century program, net acquisition and transaction costs of $1.1 million, and non-service-related pension income (NSRPI) of $0.3 million. Adjusted net income, which excludes these net charges, was $171.9 million, or $0.78 per share-diluted, in the second quarter of 2015, compared with $170.0 million, or $0.76 per share-diluted, in the second quarter of 2014, an increase of 2.6% in adjusted earnings per share-diluted. For the first six months of 2015, consolidated net sales were $3,516.6 million compared with $3,450.2 million for the first six months of 2014. Reported net income for the first six months of 2015 was $144.8 million or $0.65 per share-diluted, compared with $420.7 million or $1.86 per share-diluted for the first six months of 2014. As described in the Note, for the first six months of 2015 and 2014, these results, prepared in accordance with GAAP, included net pre-tax charges of $281.6 million and $15.4 million, or $1.22 and $0.04 per share-diluted, respectively. These charges included $26.1 million, or $0.08 per share-diluted, primarily related to the business productivity initiative announced on June 19, 2015. Charges associated with international business realignment and other supply chain programs for the first six months of 2015 and 2014 were $5.2 million and $4.3 million, or $0.02 and $0.01 per share-diluted, respectively. Acquisition and integration costs for the first six months of 2015 and 2014 were $4.9 million, or $0.01 per share-diluted, and $12.0 million, or $0.03 per share-diluted, respectively. Additionally, for the first six months of 2015 NSRPE was $2.9 million, or $0.01 per share-diluted, compared with NSRPI of $0.9 million in 2014. Also, in 2015 the company had a gain on the sale of a trademark of $10.0 million, or $0.03 per share-diluted, incurred divestiture costs related to Mauna Loa of $2.7 million and recorded an impairment charge of $249.8 million, or $1.13 per share-diluted, related to SGM. As described in the Note, adjusted net income, which excludes these net charges, was $415.4 million, or $1.87 per share-diluted, for the first six months of 2015, compared with $430.0 million, or $1.90 per share-diluted, for the same period of 2014, a decrease of 1.6% in adjusted earnings per share-diluted. In 2015, the company expects reported gross margin to increase 125 to 135 basis points versus last year and reported earnings per share-diluted of $2.49 to $2.66, including net pre-tax GAAP charges of approximately $1.52 to $1.61 per share-diluted. This projection, prepared in accordance with GAAP, assumes business productivity initiatives of $0.29 to $0.35 per share-diluted, international business realignment and other supply chain program costs of $0.04 to $0.05 per share-diluted, NSRPE of $0.04 to $0.05 per share-diluted, net acquisition, integration and transaction costs of $0.05 to $0.06 per share-diluted, a gain on the sale of a trademark of $0.03 per share-diluted and the aforementioned goodwill impairment charge of $1.13 per share-diluted. Second-Quarter Performance Consolidated net sales were $1,578.8 million in the second quarter, in line with the second quarter of 2014. Price realization, primarily in the U.S., was a 5.8 point benefit. Volume was off 3.6 points due primarily to elasticity related to the previously announced price increase, in line with expectations and lower sales in China. Increased promotional spending, mainly in China, and foreign currency translation were a 2.3 point and 1.3 point headwind, respectively. Net acquisitions and divestitures were a 1.4 point benefit. North America net sales were slightly better than expectations, primarily due to solid U.S. CMG performance. International and Other net sales, excluding the benefit of the SGM acquisition and unfavorable foreign currency exchange rates, declined versus a year ago due primarily to the underperformance of Hersheys chocolate business in China. Adjusted gross margin was 46.7% in the second quarter of 2015, compared to 45.4% in the second quarter of 2014. The 130 basis point increase was driven by net price realization, supply chain productivity and costs savings initiatives, partially offset by international trade allowances and inventory obsolescence, primarily in China. Advertising and related consumer marketing expense declined about 3% in the second quarter, driven by a reduction in international spending. Selling, marketing and administrative (SM&A) expenses, excluding advertising and related consumer marketing, increased about 7%. Excluding the SGM, KRAVE Pure Foods, Inc. (Krave) and Allan Candy Company (Allan Candy) acquisitions and the Mauna Loa Macadamia Nut Corporation (Mauna Loa) divestiture, SM&A expenses excluding advertising and related consumer marketing were about the same as the year ago period. Consolidated adjusted operating profit increased 3.3% to $289.4 million in the second quarter of 2015, compared to $280.1 million in the second quarter of 2014. Additionally, the Board of Directors of The Hershey Company declared a quarterly dividend of $0.583 on the Common Stock, an increase of about 9%, or $0.048 per share. The Board also announced a quarterly dividend on the Class B Common Stock of $0.53, an increase of about 9%, or $0.044 per share.
For the original version including any supplementary images or video, visit http://finance.yahoo.com/news/hershey-announces-second-quarter-results-110000847.html