Hormel Foods officials report that the company plans to close its poultry plant in Turlock, Calif., by late October. The plant makes Valley Fresh canned chicken products.
Hormel bought Valley Fresh four years ago. An estimated 265 employees work at the 90,000-square-foot facility. Company officials report that employees will receive severance pay and could pursue jobs at one of four other Hormel facilities in the state. Officials report the company will take a charge to second-quarter earnings per share of about 5 cents, to account for employee-related costs and asset write-downs.
Hormel officials also point out the company will take an additional one-time charge of about 5 cents per share to account for changes required by the health-care reform law that Congress recently passed. The charge is due mostly to a "reduction in the value of the company's deferred tax asset as a result of a change to the tax treatment of Medicare Part D reimbursements," according to the news release.
The company's most recent earnings guidance, made in February, did not include either charge. More information about the changes' effect on Hormel's earnings will be provided in Hormel's second-quarter earnings release, due on May 19.
Source: Hormel Foods, Meatingplace.com