991106 WLR Foods Reports First Quarter ResultsNovember 1, 1999Broadway, VA - WLR Foods, Inc. reported results for its fiscal first quarter ended October 2, 1999. Net earnings for the first quarter of fiscal 2000 were $2.5 million, or $0.15 per diluted share, compared with net earnings from continuing operations before unusual items of $7.8 million, or $0.46 per diluted share in the same period last year. During the first quarter of fiscal 2000, net sales were $202.0 million compared to net sales of $237.9 million in the first quarter of 1999. The earnings and sales declines were primarily due to significantly weaker chicken pricing. In the prior year first quarter, net earnings from continuing operations were $11.7 million or $0.70 per diluted share and included a one-time gain of $7.9 million ($4.8 million or $0.29 per diluted share after tax) from the sale of the Company's Goldsboro, North Carolina chicken complex, and a $1.5 million non-cash write-off ($0.9 million, or $0.05 per diluted share after tax). The prior year first quarter net earnings of $26.3 million, or $1.56 per diluted share, included: $0.7 million after tax, or $0.04 per diluted share, income from the Company's Cassco Ice & Cold Storage subsidiary; a gain on the sale of the Cassco subsidiary of $25.0 million, ($15.5 million, or $0.92 per diluted share after tax); and an after-tax, non-cash write-off of $1.6 million, or $0.10 per diluted share on the early extinguishment of debt. James L. Keeler, President and Chief Executive Officer of WLR Foods said, "Despite an unfavorable market for chicken, we are extremely pleased with the continued improvement in our operating performance in the first quarter, as we realized approximately $4 million in internal improvements to partially offset the negative industry conditions. These improvements were primarily in improved operating performance at the recently converted Marshville, North Carolina chicken complex and at the Franconia, Pennsylvania facility, where all further processing operations have been consolidated. Additionally, we continue to see improvements in our live bird performance. Industry conditions in the first quarter confirmed our previous concerns, as chicken whole breast pricing reached historically low levels, decreasing approximately 30% from year-ago levels, due to an excessive supply of chicken on the market. The sharp declines in chicken pricing resulted in a negative impact to our company of approximately $24 million, negating the benefit of approximately $6 million that we received from lower corn and soybean meal pricing in the quarter. However, we did benefit from WLR's position as a turkey producer, as turkey pricing and profitability continued to improve during the quarter." Mr. Keeler continued, "Although the second quarter outlook for chicken remains much the same, we are encouraged by favorable turkey industry conditions during a seasonally strong time for that market. Furthermore, the steps we took in fiscal 1999 to strengthen our balance sheet, which reduced interest expense during the current quarter by approximately 75%, puts the company on solid financial footing as we go through the current softness in the chicken cycle." WLR Foods is a fully integrated provider of high quality turkey and chicken products primarily under the Wampler Foods(r) brand. It is nationally ranked as the seventh largest poultry processor by sales volume and is an international leader in poultry exports. WLR Foods has processing operations in Virginia, North Carolina, West Virginia, and Pennsylvania.
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