Meat Industry INSIGHTS Newsletter

970945 WSMP Reports Major 2nd Quarter Growth in Revenues and Income

September 29, 1997

CLAREMONT, N.C - WSMP Inc. reported earnings of 16 cents a share on significantly higher operating revenues for the quarter ended Aug. 15, 1997.

Revenues for the second quarter of WSMP's fiscal 1998 rose $8,120,105 compared to the corresponding quarter of the previous fiscal year. Operating revenues for the quarter increased 42% to $27,483,258, compared to $19,363,153 for the quarter ended Aug. 9, 1996.

Operating income for the second quarter nearly tripled compared to the second quarter of the previous fiscal year, climbing to $1,153,975 vs. $291,452. Net income climbed to $602,176 for the quarter, compared to a loss of $1,269 in the second quarter of the previous fiscal year. Both earnings per share and net income met the analysts' estimates for the second quarter.

WSMP's operating revenues, operating income, net income and earnings per share also posted gains compared to the first quarter of the company's fiscal 1998, with earnings per share doubling from 8 cents a share to 16 cents a share.

"The strong increases in sales and earnings performance, compared to the corresponding period of the prior year, continue the trend we established last year," said David R. Clark, WSMP president and COO. "Our performance is indicative of the many exciting things our company has going on at this time. In addition to the activities reflected in our second quarter numbers, we are looking forward to the new opportunities for performance that should be a result of actions announced Friday."

On Friday, it was announced that WSMP and CKE Restaurants Inc., have reached an agreement for the two companies to introduce a new line of Hardee's biscuits to be sold in supermarkets and other retail outlets. It also was announced that WSMP and Sagebrush Inc. have signed a letter of intent to pursue WSMP's acquisition of the Sagebrush restaurant chain.

For the six month period ended Aug. 15, 1997, WSMP reported that revenue increased 33%, net earnings increased 260%, and earnings per share tripled, compared to the six month period ended Aug. 9, 1996.

WSMP is comprised of a restaurant division and a variety of food processing operations. Its restaurant operations include 32 company owned and 47 franchised restaurants, with a majority of these being Western Steer(R) Steaks, Buffet and Bakery restaurants, Prime Sirloin(R) Buffet, Bakery and Steaks restaurants, and Bennett's(TM) Smokehouse and Saloon restaurants.

In its Mom 'n' Pop's(R) food processing operations, WSMP has the capacity to produce more than four million microwaveable sandwiches per week in its Claremont facility. It also produces packaged, refrigerated meats, vegetables, desserts and other items targeted for the Home Meal Replacement market. And WSMP is one of the largest country ham producers in the nation.

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