business review & profit sharing

Business Review&

Profit Sharing

Business Review&

Profit Sharing

ManufacturingManufacturing

Cheese Curl Production Output

2,200 lbs. per hourCheese Curl Production Output

2,200 lbs. per hour

ManufacturingManufacturing

Baked CrispsBaked Crisps

Philadelphia MarketPhiladelphia Market

20%20%

ManufacturingManufacturing

Percent Within Specifications

98.9%Percent Within Specifications

98.9%

ManufacturingManufacturing

Total Production Tonnage

61 Million Lbs.Total Production Tonnage

61 Million Lbs.

ManufacturingManufacturing

Tonnage (New Plant)

+ 36%Tonnage (New Plant)

+ 36%

ManufacturingManufacturing

Manufacturing Efficiency

110 lbs. per man-hourManufacturing Efficiency

110 lbs. per man-hour

ManufacturingManufacturing

OSHA Recordable Incidents

- 16%OSHA Recordable Incidents

- 16%

ManufacturingManufacturing

Lost Time Accidents

5Lost Time Accidents

5

ManufacturingManufacturing

New ProductsIn DevelopmentNew Products

In Development

ManufacturingManufacturing

ManufacturingManufacturing

ManufacturingManufacturing

Sales & MarketingSales & Marketing

Sales & MarketingSales & Marketing

Total SalesTotal Sales

+ 12.1%+ 12.1%

Sales & MarketingSales & Marketing

DSD SalesDSD Sales

+ 6.6%+ 6.6%

Sales & MarketingSales & Marketing

Non-Franchise SalesNon-Franchise Sales

+ 5.5%+ 5.5%

Sales & MarketingSales & Marketing

National Retail SalesNational Retail Sales

+ 59.2%+ 59.2%

Sales & MarketingSales & Marketing

Distributor, Vending &Distributor, Vending &International SalesInternational Sales

+ 16.1%+ 16.1%

Sales & MarketingSales & Marketing

New DSD Retail CustomersNew DSD Retail Customers

3,5203,520

Sales & MarketingSales & Marketing

New DistributorsNew Distributors

6161

Sales & MarketingSales & Marketing

Drug Store SalesDrug Store Sales

+ 12.9%+ 12.9%

Sales & MarketingSales & Marketing

Kettle Chip SalesKettle Chip Sales

+ 8.1%+ 8.1%

Sales & MarketingSales & Marketing

Baked Crisp SalesBaked Crisp Sales

3.6 Million3.6 Million

Sales & MarketingSales & Marketing

Baked CrispsBaked Crisps

Philadelphia MarketPhiladelphia Market

20%20%

Sales & MarketingSales & Marketing

Baked CrispsBaked Crisps

Total Market ShareTotal Market Share

8.4%8.4%

Sales & MarketingSales & Marketing

DSDDSDMIX Items SalesMIX Items Sales

+ 33.8%+ 33.8%

Sales & MarketingSales & Marketing

SupermarketSupermarketMIX Items SalesMIX Items Sales

+ 26%+ 26%

Sales & MarketingSales & Marketing

Total DSD GrowthTotal DSD Growth

+ 6.6%+ 6.6%

Sales & MarketingSales & Marketing

PreventablePreventableVehicle AccidentsVehicle Accidents

- 39.7%- 39.7%

Sales & MarketingSales & Marketing

OSHAOSHARecordable IncidentsRecordable Incidents

- 15.2%- 15.2%

Sales & MarketingSales & Marketing

Fiscal 2010 GoalsFiscal 2010 Goals

Sales & MarketingSales & Marketing

IncreaseIncreaseKettle Chip SalesKettle Chip Sales

10%10%

Fiscal 2010 GoalsFiscal 2010 Goals

Sales & MarketingSales & Marketing

IncreaseIncreaseNon-FranchiseNon-Franchise

10%10%

Fiscal 2010 GoalsFiscal 2010 Goals

Sales & MarketingSales & Marketing

IncreaseIncreaseMIX Item SalesMIX Item Sales

30%30%

Fiscal 2010 GoalsFiscal 2010 Goals

Sales & MarketingSales & Marketing

Continue to ReduceContinue to ReduceAccidents & InjuriesAccidents & Injuries

Fiscal 2010 GoalsFiscal 2010 Goals

Human ResourcesHuman Resources

Human ResourcesHuman Resources

Medical Expenses

$7,200,000

Medical Expenses

$7,200,000

Human ResourcesHuman Resources

Gold Silver BronzeGold Silver Bronze

Human ResourcesHuman Resources

PreventableVehicle Accidents

- 39%

PreventableVehicle Accidents

- 39%

Human ResourcesHuman Resources

OSHARecordable Incidents

- 16%

OSHARecordable Incidents

- 16%

Human ResourcesHuman Resources

OSHALost-Time Incidents

- 14%

OSHALost-Time Incidents

- 14%

Human ResourcesHuman Resources

Lost Working Days

- 42%

Lost Working Days

- 42%

Human ResourcesHuman Resources

•Herr Foods produces high quality products

•Herr Foods provides the best possible customer service

•Herr Foods makes customer satisfaction a very high priority

•Herr Foods produces high quality products

•Herr Foods provides the best possible customer service

•Herr Foods makes customer satisfaction a very high priority

Employee SurveyEmployee Survey

FinanceFinance

FinanceFinance

FY-09 Operating IncomeFY-09 Operating Income

$5 Million$5 Million

FinanceFinance

FY-09 Gross SalesFY-09 Gross Sales

$282 Million$282 Million

FinanceFinance

FY-09 Gross SalesFY-09 Gross Sales

+ 12.1%+ 12.1%

FinanceFinance

Cheese Curls SalesCheese Curls Sales

$15,361,000$15,361,000

FinanceFinance

Snack Fries SalesSnack Fries Sales

$3,921,000$3,921,000

FinanceFinance

Baked Crisps SalesBaked Crisps Sales

$3,638,000$3,638,000

FinanceFinance

2010 Budget Goals2010 Budget Goals

FinanceFinance

2010 Budget Goals2010 Budget Goals

Gross Sales

$315,671,000

Gross Sales

$315,671,000

FinanceFinance

2010 Budget Goals2010 Budget Goals

SelectivePrice Increases

SelectivePrice Increases

FinanceFinance

2010 Budget Goals2010 Budget Goals

Significant Growth inNon DSD Business

Significant Growth inNon DSD Business

FinanceFinance

2010 Budget Goals2010 Budget Goals

Capital Spending

$7,000,000

Capital Spending

$7,000,000

FinanceFinance

2010 Budget Goals2010 Budget GoalsCapital Spending

Vehicles

$2,700,000

Capital Spending

Vehicles

$2,700,000

FinanceFinance

2010 Budget Goals2010 Budget GoalsCapital Spending

I.T. Equipment

$1,000,000

Capital Spending

I.T. Equipment

$1,000,000

FinanceFinance

2010 Budget Goals2010 Budget GoalsCapital Spending

Plant Equipment

$3,300,000

Capital Spending

Plant Equipment

$3,300,000

ReviewReview

ReviewReview

FY 2010 GoalsFY 2010 Goals

GrowNet Sales

+ 14%

GrowNet Sales

+ 14%

ReviewReview

FY 2010 GoalsFY 2010 Goals

GrowNet Sales

+ 14%

GrowNet Sales

+ 14%

ReviewReview

FY 2010 GoalsFY 2010 GoalsKettle Sales

Increase

+ 10%

Kettle SalesIncrease

+ 10%

ReviewReview

FY 2010 GoalsFY 2010 GoalsNon-franchiseSales Increase

+ 10%

Non-franchiseSales Increase

+ 10%

ReviewReview

FY 2010 GoalsFY 2010 GoalsNew Products

Sales

$8,000,000

New ProductsSales

$8,000,000

ReviewReview

FY 2010 GoalsFY 2010 GoalsNon-DSD

Sales Increase

+ 33%

Non-DSDSales Increase

+ 33%

ReviewReview

FY 2010 GoalsFY 2010 Goals

Safety

People

Quality

Efficiency

Safety

People

Quality

Efficiency

Profit SharingProfit Sharing

Profit SharingProfit Sharing

Profit Sharing Trust

Founded in 1963

$10,000

Profit Sharing Trust

Founded in 1963

$10,000

Profit SharingProfit Sharing

Total Assets Exceed

$42 MILLION

Total Assets Exceed

$42 MILLION

Profit SharingProfit Sharing

Trustees:Trustees:•Administer policies of

the trust•Select fund managers

•Administer policies of the trust

•Select fund managers

Profit SharingProfit Sharing

Herr Foods Inc.Herr Foods Inc.Herr Foods Inc.Herr Foods Inc.

Profit Sharing TrustProfit Sharing TrustProfit Sharing TrustProfit Sharing Trust

IndividualIndividualEmployee AccountsEmployee Accounts

IndividualIndividualEmployee AccountsEmployee Accounts

The amount placed in youraccount for 08-09 wasapproximately 2.6% of yourannual income

The amount placed in youraccount for 08-09 wasapproximately 2.6% of yourannual income

Profit SharingProfit SharingWhen you receive your certificate...When you receive your certificate...

Date HiredDate Hired Date ReceivedDate Received ShareShare

On or before 9/01/06 2008 Full

Between 9/02/06 and 3/01/07

2008 Half

Between 3/02/07 and 9/01/07 2009 Full

Between 9/02/07 and 3/01/08

2009 Half

Between 3/02/08 and 9/01/08

2010Full

Between 9/02/08 and 3/01/09

2010 Half

Profit SharingProfit SharingStatement of BenefitsStatement of Benefits

Account balance as of 8/03/08 $1,000.00

Contributions to investment account

$1,000.00

Your share of earnings / (losses) $100.00

Your share of forfeitures $100.00

Account balance as of 8/31/09 $2,200.00

Vested percent in your account 20%

Vested value in your account $440.00

Profit SharingProfit SharingVesting ScheduleVesting Schedule

Years of Service Vesting

2 20%

3 40%

4 60%

5 80%

6 100%

Profit SharingProfit Sharing100% vesting also at:100% vesting also at:

• Age 60• Permanent Disability• Death

• Age 60• Permanent Disability• Death

(Regardless of years of service)(Regardless of years of service)

Profit SharingProfit Sharing

ForfeituresForfeitures

The amount of an account whichisn’t vested at termination is added

to the accounts of active participants

The amount of an account whichisn’t vested at termination is added

to the accounts of active participants

Profit SharingProfit Sharing

You Receive Your Money Upon:You Receive Your Money Upon:

•Termination•Retirement•Permanent Disability•Death (Estate)

•Termination•Retirement•Permanent Disability•Death (Estate)

Profit SharingProfit Sharing

You May Receive Your Money As:You May Receive Your Money As:

• Lump Sum• Quarterly Amounts• Annuity

• Lump Sum• Quarterly Amounts• Annuity

Profit SharingProfit Sharing

Your money grows TAX FREE as long as you are a participant

in the fund.

Your money grows TAX FREE as long as you are a participant

in the fund.

Profit SharingProfit Sharing

Tax payment is required upon withdrawal unless

the account is rolled over

Tax payment is required upon withdrawal unless

the account is rolled over

Profit SharingProfit Sharing

Contribution toProfit Sharing Trust

$1,400,000

Contribution toProfit Sharing Trust

$1,400,000

Profit SharingProfit Sharing

Total Contribution

$28,716,600

Total Contribution

$28,716,600

Profit SharingProfit Sharing

Purchased in stock $477,000

Current Value $9,186,000

Annualized Growth + 13.6%

Profit SharingProfit SharingFund composition & rate of returnFund composition & rate of return

Profit SharingProfit Sharing

Herr’s StockHerr’s Stock

ReturnReturn 20.8%20.8%

FundFund 21.8%21.8%

Value Value (000)(000)

9,1869,186

Profit SharingProfit Sharing

Stocks / Mutual FundsStocks / Mutual Funds

ReturnReturn -18.1%-18.1%

FundFund 46.6%46.6%

Value Value (000)(000)

19,58119,581

Profit SharingProfit Sharing

BondsBonds

ReturnReturn 2.1%2.1%

FundFund 14.3%14.3%

Value Value (000)(000)

6,0426,042

Profit SharingProfit Sharing

Other AssetsOther Assets

ReturnReturn -12.1%-12.1%

FundFund 13.7%13.7%

Value Value (000)(000)

5,7795,779

Profit SharingProfit Sharing

Cash & ReceivablesCash & Receivables

ReturnReturn 0%0%

FundFund 3.6%3.6%

Value Value (000)(000)

1,5431,543

Profit SharingProfit SharingFund composition & rate of returnFund composition & rate of return

Total Rate of ReturnTotal Rate of Return

- 7.5%- 7.5%

Profit SharingProfit Sharing

Since Inception 8.1%Last 15 Years 7.2%

Investment Return HistoryInvestment Return History

Individual Account Individual Account $ 1,000 Contribution$ 1,000 Contribution

Profit SharingProfit SharingAccounts 08-09

$5,000 and under 475

Between $5,001 and $10,000 172

Between $10,001 and $25,000 266

Between $25,001 and $50,000 179

Between $50,001 and $100,000

123

Between $100,001 and $200,000

67

$200,001 and over 32

Total 1,314