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The Hershey Co.'s product innovations, especially dark chocolate items, helped the company realize record second-quarter results, including net sales of $1.052 billion, up 6.4 percent compared to the same quarter in 2005. Net income for the second quarter of 2006 was $98,440,000, compared with $93,223,000.
"Hershey's second quarter results were encouraging," said Richard H. Lenny, chairman, president and CEO, "as strong sales growth combined with overall solid cost controls delivered a 13.5 percent increase in diluted earnings per share from operations. Hershey's new product innovation, particularly in the areas of dark chocolate, refreshment, and Kissables, was the major contributor to this sales performance. Seasonal shipments also positively impacted sales during the quarter."
Hershey executives were encouraged entering the second half of 2006. Anticipate net sales growth for 2006 should be somewhat above Hershey's stated long-term range of 3 percent to 4 percent and the increase in diluted earnings per share from operations should slightly exceed their long-term expectations of 9 percent to 11 percent, Lenny concluded.
During the second half of 2005, the company recorded pre-tax charges associated with business realignment initiatives of $119 million. Net pre-tax charges for business realignment initiatives of $4.4 million were recorded during the first half of 2006. Based on Hershey's current estimates, the total cost to implement the business realignment initiatives is expected to be approximately $125 million-$135 million before tax. The business realignment program is expected to be fully completed by the end of 2006.