010721 Farmland Reports Results for 3rd QuarterJuly 14, 20Kansas City, MO - Farmland Industries announced its operating results through the third quarter of fiscal 2001 (Sept. 1, 2000 through May 31, 2001). Pretax earnings for the first nine months of fiscal 2001, exclusive of one- time charges, were $27.1 million. This represents a year-to-date improvement of $91 million over the prior year's operating results. While Farmland's earnings from operations continue to demonstrate significant improvement from the prior year, the company recorded a one-time pre-tax charge of $79 million in the 3rd quarter, associated with restructuring and other non-recurring items. Reflected in these mainly non-cash charges are the closure of meat plants, the closure of the Russell, Kan., wheat gluten plant, and write-downs for information systems and for goodwill associated with the sale of Farmland's grain merchandising subsidiary, Farmland-Atwood LLC. Including the $79 million in one-time charges, Farmland posted a net loss for the nine-month period of $37.1 million. Sales were $9.2 billion, up from $8.8 billion in the first nine months of fiscal 2000. Farmland President and CEO Bob Honse said, “Farmland continues to make progress on our Navigating Tomorrow goals-improving operations, reducing administrative costs, and strengthening the balance sheet. Our key operations continue to perform well, while corporate and service unit expenses have been reduced by more than half since this time last year.” In addition to significant reductions in selling, general and administrative expenses, increased earnings in the company's Petroleum and Crop Production business segments drove the improvement. Earnings increased in the company's Petroleum segment primarily due to increased refining and propane margins. Improved operating margins in the Crop Production segment were due primarily to management of natural gas positions.
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