051002 Swift Posts First-Quarter Loss

Greeley, CO - Swift and Co., one of the world's largest processors of fresh beef and pork products, reported net sales of $2.4 billion for its first quarter of fiscal 2006 -- down four percent from fiscal 2005 first quarter. A continued strong net sales increase in the company's Swift Australia segment was more than offset by net sales declines in the Swift Pork and Swift Beef segments. Swift Australia's first quarter net sales benefited from a 7.5 percent increase in the Australian dollar to U.S. dollar exchange rate compared to the prior year period.

"We experienced challenging market conditions this quarter," Sam Rovit, Swift and Co.'s president and CEO, commented. "While we have noted a profitability improvement in Swift Beef, we recognize that the continued lack of access to export markets has impacted the bottom-line performance not just of this business but of the entire domestic beef industry. Swift Australia's profitability declined because of significantly higher raw material costs related to tight local livestock supply. Despite these issues, our capital structure has allowed us to maintain tremendous financial and operational flexibility. We will continue to actively address the controllable factors in our business as we prepare for the return of more favorable market conditions."

Swift Beef fiscal first quarter net sales decreased five percent to $1.4 billion compared to $1.5 billion in the prior year period. Nominally lower selling prices were accompanied by volume declines associated with competition from lower-priced Canadian boxed beef.

Swift Pork fiscal first quarter net sales declined 13 percent to $523 million from $600 million in the prior year period. Average selling prices declined 7 percent and sales volumes declined by 6 percent. Decreases in selling prices and volumes were attributable to reduced demand due in part to a return to normal seasonal patterns as well as increased competition in the marketplace from lower priced, previously inventoried frozen product.

RETURN TO HOME PAGE

E-mail: sflanagan@sprintmail.com