ARDEN HILLS, Minn., Nov. 5 /PRNewswire-FirstCall/ — Land O’Lakes, Inc. today reported third-quarter net sales of $2.2 billion and a net loss for the quarter of $4.3 million, as compared to net sales of $2.8 billion and net earnings of $28.6 million for the same quarter one year ago. Year-to-date, the company reported net sales of $7.9 billion and net earnings of $159.8 million, as compared to $9.4 billion and $192.6 million, respectively, for the first three quarters of 2008.
Land O’Lakes President and Chief Executive Officer Chris Policinski said third-quarter performance was in line with the company’s expectations, with overall year-to-date results affected by a combination of lower commodity prices and a consumer shift toward a lower-priced product mix.
“We have performed well in a very challenging economic environment,” Policinski said. “Our third-quarter performance is typically soft due to seasonal impacts. Year-to-date, we are on track with our projections and we remain cautiously optimistic about prospects for the fourth quarter. We are maintaining our earlier guidance (earnings projections) for year-end.”
Policinski added that Land O’Lakes $160 million in year-to-date earnings reflects the company’s commitment to best-cost discipline, the strength of its flagship brands, market-responsive product mix adjustments and the contributions of an experienced and dedicated leadership team and work force.
“While we have not been immune to the impact of the global recession and 2009’s volatile economic conditions, we have taken a disciplined approach to economic and marketplace challenges and, as a result, have delivered solid results,” he said.
Land O’Lakes total EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) was $288.3 million year-to-date and $34.2 million for the quarter, versus $346.3 million and $73.2 million for the same periods in 2008.
The company also reports EBITDA on a normalized basis, excluding the effects of unrealized hedging, significant asset sales or impairments, legal settlements, debt extinguishment costs and other special items. Year-to-date normalized EBITDA was $254.6 million, versus $371.4 million for the same period one year ago. Normalized EBITDA for the quarter was $38.3 million, compared to $99.3 million for the third quarter of 2008. The company maintained its guidance for full-year (2009) normalized EBITDA at $340 million.
In Dairy Foods, the company reported third-quarter sales of $776 million and pretax earnings of $8.9 million, versus sales of $985 million and a $25.4 million pretax loss for the third quarter of 2008. Year-to-date sales in Dairy Foods were $2.2 billion, versus $3.1 billion for the first three quarters of 2008. The company reported $9.0 million in pretax earnings in Dairy Foods through September, versus $14.2 million in pretax earnings for the first three quarters of 2008.
Volumes in Dairy Foods were mixed, but generally reflected a consumer shift toward lower-priced private label products. Overall Value Added volume was down 1 percent versus one year ago. Volume in the company’s industry-leading branded butter was down 1 percent, while the company’s private label butter volume was up 1 percent. Retail cheese volume (Deli and Dairy Case) was down 4 percent versus the first three quarters of 2008, while Dairy Solutions (Foodservice and Ingredient Solutions) was up 7 percent. In the Industrial segment, Cheese volumes were up 6 percent over the same period last year, Whey volume was down 1 percent and volume in Butter By-Products was flat.
Company officials, while noting that Dairy Foods’ performance over the first three quarters was negatively affected by commodity market volatility and the impact of higher prices and economic uncertainty on consumer purchasing decisions, indicated expectations for a strong fourth quarter. Fourth-quarter results, they said, should be bolstered by traditional holiday volume increases and the effective hedging of inventory positions earlier in the year, which should generate fourth-quarter gains.
Source: Land O Lakes Inc.