BROADWAY, VA - WLR Foods, Inc. reported greatly improved earnings for the 1999 first quarter ended September 26, 1998. Net earnings from continuing operations before unusual items reached $7.8 million, or $0.46 per diluted share, compared with a net loss of $6.4 million, or $0.39 per diluted share, in the first quarter of fiscal 1998. After a one-time gain of $7.9 million ($4.8 million or $0.29 per diluted share after tax) from the sale of the Company's Goldsboro chicken complex, and a non-cash restructuring charge of $1.5 million ($0.9 million or $0.05 per diluted share after tax), fiscal 1999 first quarter net income from continuing operations was $11.7 million, or $0.70 per diluted share. Net sales for the quarter were $237.9 million compared with $242.5 million in the fiscal 1998 first quarter.
Net income for the first quarter of 1999 was $26.3 million, or $1.56 per diluted share, and included: $0.7 million, or $0.04 per diluted share after tax, in income from its Cassco Ice & Cold Storage subsidiary, which was sold July 31, 1998 and is treated as a discontinued operation; a gain of $25.0 million ($15.5 million or $0.92 per diluted share after tax) on the sale of Cassco; and an after tax, non-cash write off of $1.6 million or $0.10 per diluted share on the early extinguishment of debt.
James L. Keeler, President and Chief Executive Officer, commented: “This was an outstanding quarter for our Company by almost any measure. We clearly benefited from the strongest chicken market we have seen in a long time, and even more so from very favorable grain prices, which together enabled us to return to strong profitability. It also was the quarter in which the changes we have made in the focus and direction of our Company were realized in the strategic divestitures of Cassco and Goldsboro. These actions combined with our strong cash flow from operations enabled us to end the quarter with our strongest balance sheet in many years.”
The Company noted that for the period ending September 26, 1998, long-term debt was $78.5 million, a reduction of $114.2 million from the beginning of quarter. Long-term debt represented 38% of total capital, compared with 65% at year-end for fiscal 1998. Stockholders' equity increased $27.2 million to $131.1 million at the end of the fiscal 1999 first quarter, while book value per share increased to $7.97 from $6.33 for the year ended June 27, 1998.
WLR Foods is a fully integrated provider of high quality turkey and chicken products primarily under the Wampler Foods(R) brand. It is nationally ranked as the seventh largest poultry 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.
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