WLR Foods, Inc. (Nasdaq: WLRF) today reported results for its fiscal first quarter ended September 30, 2000.
For the first quarter of fiscal 2001, the Company reported net income of $3.9 million, or $0.24 per diluted share, an increase of 53.6% over net income of $2.5 million, or $0.15 per diluted share, in the first quarter of fiscal 2000. Net sales in the fiscal 2001 first quarter increased 4.9% to $211.9 million versus net sales of $202.0 million in the year-ago first quarter.
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The Company’s fiscal 2001 first quarter results reflect improved profitability within both its chicken and turkey operations as a result of enhanced live performance, improved chicken processing costs and increased sales of the Company’s value-added turkey products. This increased profitability more than offset lower chicken pricing and slightly higher grain costs.
Commenting on these results, James L. Keeler, President and Chief Executive Officer of WLR Foods, stated, “We are very pleased to have accomplished such strong results despite the continued challenging conditions in the chicken markets. By maintaining our focus on careful cost management during this period, we were able to improve live performance and reduce chicken processing costs, allowing the Company’s chicken division to report a profitable quarter for the first time in five quarters.”
Mr. Keeler continued, “The fiscal first quarter also saw our turkey operations continue to strengthen, with profitability in this division improving over 50% from a year ago. While turkey commodity pricing has improved slightly from year-ago levels, the majority of our profitability improvement in this division resulted from an 8% increase in sales of our value-added turkey products. The improved sales mix and increased profitability within our turkey division indicate that we have begun to benefit from our recently implemented strategic plan.”
As previously announced during the quarter, the Company has signed a definitive agreement with Pilgrim’s Pride Corporation (NYSE: CHX, CHX.A) through which Pilgrim’s Pride has agreed to acquire all the outstanding stock of WLR Foods for $14.25 per share. The merger is subject to customary closing conditions, including the receipt of regulatory approval and the approval of WLR Foods’ shareholders. The transaction has received the unanimous approval of both companies’ Boards of Directors and is expected to be completed in January 2001.
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By GlobalDataWLR Foods is a fully integrated provider of high quality value-added turkey and chicken products primarily under the Wampler Foods® brand. It is nationally ranked as the seventh largest poultry food processor by sales volume and is an international leader in poultry exports. WLR Foods has processing operations in Virginia, North Carolina, West Virginia, and Pennsylvania.
Statements contained in this press release that state the intentions, beliefs, expectations or predictions of the future of WLR Foods and its management are forward-looking statements. It is important to note that actual results could differ materially from those projected in such forward-looking statements. For example, no assurance is or can be given that the merger described above will be consummated. Factors that could cause actual results to differ materially from those projected in such forward-looking statements also include: changes in commodity prices of chicken products, turkey products and feed ingredients; flock health; the impact of current and future laws and regulations; and other risks described in the company’s SEC filings. The foregoing release is not intended to solicit proxies in connection with the merger and shall not be deemed to be a proxy solicitation. WLR Foods will separately solicit proxies by means of a proxy statement that will be distributed to its shareholders.
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
(in thousands, except per share data)
Thirteen Weeks Ended
09/30/2000 10/02/1999
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Net sales $ 211,881 $ 202,007
Cost of sales 179,265 172,705
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Gross profit 32,616 29,302
Selling, general and administrative expenses 25,218 24,355
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Operating income 7,398 4,947
Interest expense 1,506 1,233
Other income, net (26) (371)
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Earnings before income taxes 5,918 4,085
Income tax expense 2,012 1,542
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Net earnings $ 3,906 $ 2,543
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Diluted earnings per common share $ 0.24 $ 0.15
Diluted weighted average common shares 16,516 16,857
Capital expenditures $ 2,237 $ 2,254
Depreciation expense 4,378 4,615
CONSOLIDATED BALANCE SHEETS
(in thousands)
09/30/2000 07/01/2000
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(unaudited)
Assets
Current assets
Cash and cash equivalents $ 120 $ 85
Accounts receivable, net 63,220 59,541
Inventories 108,244 110,980
Other current assets 3,975 3,032
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Total current assets 175,559 173,638
Property, plant and equipment, net 99,915 102,070
Other assets 5,676 7,807
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Total Assets $ 281,150 $283,515
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Liabilities and Shareholders' Equity
Current liabilities
Current maturities of long-term debt $ 6,299 $ 6,052
Trade accounts payable 34,878 38,641
Accrued payroll and related benefits 14,891 15,148
Other current liabilities 21,999 21,384
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Total current liabilities 78,067 81,225
Long-term debt, excluding current maturities 50,229 51,036
Other liabilities and deferred credits 7,652 7,250
Shareholders' equity 145,202 144,004
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Total Liabilities and Shareholders' Equity $ 281,150 $ 283,515
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