BROADWAY, Va - WLR Foods Inc. reported a net loss of $4.5 million, or $0.27 per share for the quarter ended September 27, 1997 as compared to a loss of $8.1 million, or $0.46 per share for the same quarter last year. Net sales for the quarter decreased 7.5% to $251.6 million compared to $272.1 million for the same quarter last year. First fiscal quarter chicken revenues as compared to last year's first quarter increased by 4%, the result of a 10% increase in pounds sold partially offset by a 6% decrease in prices. Turkey sales were down as prices and volume each declined about 4% from the same quarter last year.
Gross profit for the first quarter was $22.2 million or 8.8% of sales, an increase of $8.6 million, as compared to the $13.6 million or 5.0% of sales in the first quarter of fiscal year 1997. This improvement was primarily attributable to a decrease in feed costs of approximately $18 million partially offset by weaker poultry market pricing. Feed costs declined as lower corn prices, down from historical highs a year ago, more than offset the increase in soybean meal costs. Other factors in the improved results included better live performance in chicken and stronger earnings in the ice and public refrigerated warehouse unit.
President and Chief Executive Officer, James L. Keeler stated, "With continuing high feed costs and an oversupply of product, the turkey industry has now experienced nearly two years of losses. Because of this, we continue to be unprofitable. However, it is encouraging to see the first improvement versus the prior year in quarterly operating results since the third quarter of 1995 when grain pricing began to accelerate rapidly."
"Despite the decline in grain pricing seen in the first quarter, Chicago Board of Trade futures market prices for corn and soymeal, although subject to a great deal of variability, currently reflect feed costs which are well above historical averages. To offset this, turkey pricing will need to be better than we have seen for some time. The turkey industry appears to be demonstrating some much needed discipline as both USDA and private forecasts now reflect declining poult placements. Hopefully, this will result in lower production and higher pricing which will allow the turkey industry to return to profitability."
The Company also reported that the combined effects of fewer shares outstanding and higher interest costs resulting from the acquisition of the shares held by Cuddy Farms, Inc. increased the loss per share in the most recent quarter by approximately four cents per share.
WLR Foods is a fully integrated provider of high quality turkey and chicken products primarily under the Wampler Foods(R) label and retail ice under the Cassco(R) label. It is nationally ranked as the second largest turkey processor, the seventh largest poultry processor by sales volume and has processing operations in Virginia, North Carolina, West Virginia, and Pennsylvania, close to its major mid-Atlantic markets.
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