Southfield, MI - Meat processor Thorn Apple Valley Inc. said it expects to spend $1.0 to $7.0 million to cover the costs of a recall of 30 million pounds of hot dogs possibly contaminated with a potentially deadly bacteria.
In a statement accompanying its second quarter earnings, Thorn Apple said there have been no illnesses reported since the recall was announced in January. The hot dogs may be contaminated with listeria, a bacteria that can cause the food-borne illness listeriosis. Listeriosis can kill infants, the elderly, and people with weakened immune systems, and can also cause miscarriages.
Listeria has been blamed in a series of meat and milk recalls in recent weeks, including one by Sara Lee Corp. involving millions of pounds of hot dogs and deli meats. The products, made at Sara Lee's Bil Mar Foods plant in Michigan, have been blamed in the deaths of at least 11 adults and 5 miscarriages.
Thorn Apple said it lost $12.4 million, or $2.02 per share, in its second quarter ended December 11, compared with last year's second quarter loss of $230,000, or $0.04 a share. The current quarter includes a charge of $8.0 million for international restructuring and a loss of $2.8 million on the disposal of the fresh pork division. Sales fell to $119.9 million from $136.5 million a year ago.
“The road to recovery has been difficult,” Joel Dorfman, president and chief executive officer, said in a statement.
“The Russian export losses and USDA recall expenses were unexpected situations that were very disappointing to us,” he said. “We are in the process of reviewing our situation with our bank group in order to assure continued liquidity.”
Thorn Apple stopped exporting hot dogs to Russia late last year due to economic turmoil there.
As a result of the economic crisis there, Thorn Apple said it has built an $8 million receive against its foreign accounts receivable and inventory, and said it was “unclear if and when there be opportunities there in the future.”
Meat Industry Insights News Service
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