Southfield, Mich - Joel Dorfman, president and chief executive officer of Thorn Apple Valley, Inc., indicated that he expects the company to return to profitability in the first quarter of fiscal 1999. The company's fiscal year ends the last Friday in May; its first quarter fiscal 1999 will end September 18, 1998.
"Thorn Apple Valley has in place an operating plan to achieve significant profitability in our Processed Meats Division. In fiscal 1999, our Ponca City facility should start operating at the two-million-pounds-per- week capacity originally envisioned and required for optimal efficiency. Other remaining adjustments to production location and major refinements to operations should be complete. Our NASCAR program should be contributing significantly, and the changes to our sales organization should be finalized. Further, unusual charges, such as severance pay, HACCP-related costs, inventory write-downs and NASCAR start-up expenses should be behind us by fiscal year-end 1998. These charges accounted for a substantial portion of our third- quarter deficit," explained Dorfman.
Regarding the company's fresh pork operations, he said, "Although the hog supply has increased significantly from last year, demand for pork has been lackluster as a result of a limited number of export opportunities and abundant beef and poultry supplies. However, these conditions should improve in the second half of the calendar year as hog supplies continue to increase modestly, beef and poultry supplies diminish and export opportunities redevelop."
Dorfman also noted that the company's recent refinancing will likely necessitate a fourth-quarter fiscal 1998 charge of approximately $3 million pretax to write off various expenses and pre-payment fees. The company had disclosed that it refinanced a major portion of its debt to increase liquidity and provide financial flexibility to pursue its operating objectives. The refinancing provides Thorn Apple Valley with a $170- million line of credit.
Dorfman concluded his remarks by reiterating management's commitment to "rewarding investor patience by realizing Thorn Apple Valley's substantial potential and inherent value."
Following a three-year, $180-million modernization program, Thorn Apple Valley has emerged as a leading meat processor with a low-cost infrastructure, an extensive product portfolio that includes five #1-selling national branded products, and an expanding international presence. The company is also one of the largest slaughterers of hogs and sellers of related fresh pork products in the United States. Thorn Apple Valley's common shares are traded on the Nasdaq National Market system under the symbol "TAVI."
This press release contains forward-looking statements with respect to the results of operations of Thorn Apple Valley, Inc. Management of the company believes that the expectations reflected in the forward-looking statements made in this press release are based on reasonable assumptions. Certain developments could occur that might cause actual results to vary from the expectations reflected in this press release. These include changes in raw material supplies or prices, changes in economic conditions, changes in relationships with customers or suppliers and unforeseen loss contingencies.
Press for Information on Placing Your Ad Here
Meat Industry Insights News Service
P.O. Box 553
Northport, NY 11768
Phone: 631-757-4010
Fax: 631-757-4060
E-mail: sflanagan@sprintmail.com
Web Site: http://www.spcnetwork.com/mii