Exhibit 99.1
Gold Kist Inc. Reports Fiscal First Quarter 2005 Results
ATLANTA, Ga. (February 9, 2005) – Gold Kist Inc. (NASDAQ:GKIS) today reported financial results for the first fiscal quarter ended January 1, 2005. Net income for the first fiscal quarter was $4.2 million, or $0.08 per diluted share, compared with net income of $3.4 million for the quarter ended December 27, 2003. Excluding tax affected charges related to conversion expenses and debt prepayment interest expense totaling $7.0 million, or $0.14 per diluted share, adjusted net income was $11.2 million or $0.22 per diluted share. Net sales for the first quarter of fiscal 2005 increased 2.8 percent to $552.0 million from $536.9 million in the quarter ended December 27, 2003.
Commenting on the results, John Bekkers, president and chief executive officer, said, “The increase in net sales for the quarter was due primarily to an approximate 5.4 percent increase in broiler pounds produced, partially offset by a 2.9 percent decline in average broiler sales prices. Broiler prices have improved in recent weeks, and a continuation of this trend should favorably impact sales and earnings for the next fiscal quarter ending April 2, 2005.
“Net operating income for the quarter ended January 1, 2005, declined to $21.5 million from $39.2 million in the comparable period last year. The decline was due to lower broiler prices and higher feed ingredient costs, which were 6.6 percent higher during the first quarter of fiscal 2005. Although cash market prices for soybean meal and corn moved lower during the first quarter, the declines were partially offset by our priced-forward purchase contracts that were entered into previously to secure a portion of the Company’s feed ingredient requirements. These positions reduced operating income for the quarter by $8.8 million. All of these contracts have been delivered, which will allow us to benefit from expected lower feed ingredient costs during the remainder of fiscal 2005.”
Gold Kist Inc. will hold a conference call to discuss this press release today, February 9, 2004, at 2:00 p.m. Eastern time. Investors will have the opportunity to listen to a live Internet broadcast of the conference call through the Company’s Web site at www.goldkist.com or through www.fulldisclosure.com. To listen to the live call, please go to the Web site at least 15 minutes early to register and download and install any necessary audio software. For those who cannot listen to the live broadcast, an Internet replay will be available shortly after the call and continue through February 16, 2005. If Internet access is unavailable, you may participate on the live call by telephone by dialing (800) 289-0518. The confirmation number for this call is 840387. Gold Kist will also file a first quarter report on Form 10-Q with the Securities and Exchange Commission that will contain additional details on its financial results for the quarter.
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Gold Kist Announces Fiscal 2005 First Quarter Financial Results
Page 2
February 9, 2005
This news release contains “forward-looking statements” as defined in the federal securities laws regarding Gold Kist’s beliefs, anticipations, expectations or predictions of the future. These forward-looking statements involve a number of risks and uncertainties. Among the important factors that could cause actual results to differ materially from those indicated in such forward-looking statements include uncertainties relating to the fluctuations in the commodity prices of feed ingredients and broiler products as well as other risks described under “Risk Factors” in our Quarterly Report on Form 10-Q and subsequent filings with the Securities and Exchange Commission. Gold Kist undertakes no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise.
About Gold Kist
Gold Kist is the third largest chicken company in the United States, accounting for more than 9 percent of chicken produced in the United States in 2004. Gold Kist operates a fully-integrated chicken production business that provides processing, purchasing and marketing services. Gold Kist’s production operations include nine complexes located in Alabama, Florida, Georgia, North Carolina and South Carolina. For more information, visit our Web site atwww.goldkist.com.
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Gold Kist Announces Fiscal 2005 First Quarter Financial Results
Page 3
February 9, 2005
GOLD KIST INC.
CONSOLIDATED BALANCE SHEETS
(Dollar Amounts, Except Share Amounts, in Thousands)
(Unaudited)
| | | | | | | | |
| | | October 2,
2004
| | | January 1,
2005
| |
ASSETS | | | | | | | | |
Current assets: | | | | | | | | |
Cash and cash equivalents | | $ | 175,289 | | | $ | 132,708 | |
Receivables, net | | | 115,015 | | | | 114,558 | |
Inventories | | | 238,892 | | | | 217,824 | |
Deferred income taxes | | | 15,732 | | | | 15,649 | |
Other current assets | | | 38,577 | | | | 30,633 | |
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Total current assets | | | 583,505 | | | | 511,372 | |
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Investments | | | 13,072 | | | | 13,179 | |
Property, plant and equipment, net | | | 247,398 | | | | 255,368 | |
Deferred income taxes | | | 13,215 | | | | 12,615 | |
Other assets | | | 65,652 | | | | 58,230 | |
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| | | $ | 922,842 | | | $ | 850,764 | |
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LIABILITIES AND EQUITY | | | | | | | | |
Current liabilities: | | | | | | | | |
Notes payable and current maturities of long-term debt | | $ | 20,875 | | | $ | 20,402 | |
Accounts payable | | | 84,121 | | | | 80,753 | |
Accrued compensation and related expenses | | | 42,556 | | | | 24,508 | |
Other current liabilities | | | 88,049 | | | | 78,450 | |
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Total current liabilities | | | 235,601 | | | | 204,113 | |
| | |
Long-term debt, less current maturities | | | 281,408 | | | | 209,767 | |
Accrued pension costs | | | 37,387 | | | | 31,157 | |
Accrued postretirement benefit costs | | | 6,760 | | | | 5,798 | |
Other liabilities | | | 44,138 | | | | 47,309 | |
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Total liabilities | | | 605,294 | | | | 498,144 | |
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Patrons’ and other equity / stockholders’ equity: | | | | | | | | |
Preferred stock, authorized 100,000,000 shares | | | — | | | | — | |
Common stock, $1.00 par value; authorized 500,000 shares at October 2, 2004; and $0.01 par value; authorized 900,000,000 shares as of January 1, 2005; issued and outstanding; 2,449 shares as of October 2, 2004, and 50,702,000 shares as of January 1, 2005 | | | 2 | | | | 507 | |
Additional paid-in capital | | | — | | | | 397,800 | |
Deferred stock compensation | | | — | | | | (7,297 | ) |
Patronage reserves | | | 232,569 | | | | — | |
Accumulated other comprehensive loss | | | (42,318 | ) | | | (42,318 | ) |
Retained earnings | | | 127,295 | | | | 4,193 | |
Less: Treasury stock, 24,123 shares | | | — | | | | (265 | ) |
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Total patrons’ and other equity / stockholders’ equity | | | 317,548 | | | | 352,620 | |
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| | | $ | 922,842 | | | $ | 850,764 | |
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Gold Kist Announces Fiscal 2005 First Quarter Financial Results
Page 4
February 9, 2005
GOLD KIST INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Amounts in Thousands, Except Per Share Amounts)
(Unaudited)
| | | | | | | | |
| | | Three Months Ended
| |
| | | Dec. 27,
2003
| | | January 1,
2005
| |
Net sales | | $ | 536,927 | | | $ | 551,958 | |
Cost of sales | | | 468,717 | | | | 504,122 | |
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Gross profit | | | 68,210 | | | | 47,836 | |
Distribution, administrative and general expenses | | | 29,023 | | | | 24,966 | |
Conversion expenses | | | — | | | | 1,418 | |
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Net operating income | | | 39,187 | | | | 21,452 | |
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Other income (expenses): | | | | | | | | |
Interest and dividend income | | | 144 | | | | 825 | |
Interest expense | | | (6,782 | ) | | | (7,090 | ) |
Senior debt prepayment interest expense and pro-rata write-off of fees and discount | | | — | | | | (10,016 | ) |
Unrealized loss on investment | | | (18,486 | ) | | | — | |
Miscellaneous, net | | | 291 | | | | 1,702 | |
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Total other expenses, net | | | (24,833 | ) | | | (14,579 | ) |
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Income before income taxes | | | 14,354 | | | | 6,873 | |
Income tax expense | | | 10,949 | | | | 2,680 | |
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Net income | | $ | 3,405 | | | $ | 4,193 | |
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Net income per common share: | | | | | | | | |
Basic | | $ | — | | | $ | 0.08 | |
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Diluted | | $ | — | | | $ | 0.08 | |
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Weighted average common shares outstanding: | | | | | | | | |
Basic | | | — | | | | 49,973 | |
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Diluted | | | — | | | | 50,131 | |
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Gold Kist Announces Fiscal 2005 First Quarter Financial Results
Page 5
February 9, 2005
GOLD KIST INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Amounts in Thousands)
(Unaudited)
| | | | | | | | |
| | | Three Months Ended
| |
| | | Dec. 27,
2003
| | | January 1,
2005
| |
Cash flows from operating activities: | | | | | | | | |
Net income | | $ | 3,405 | | | $ | 4,193 | |
Non-cash items included in net income from operations: | | | | | | | | |
Depreciation and amortization | | | 9,539 | | | | 11,063 | |
Unrealized loss on investment | | | 18,486 | | | | — | |
Pension and other benefit plans expense | | | 1,824 | | | | 2,214 | |
Deferred income tax expense | | | 8,051 | | | | 683 | |
Other | | | (1,726 | ) | | | 1,625 | |
Changes in operating assets and liabilities: | | | | | | | | |
Receivables | | | 3,708 | | | | 457 | |
Inventories | | | (4,152 | ) | | | 21,068 | |
Other current assets | | | (31 | ) | | | 3,342 | |
Accounts payable, accrued and other expenses | | | 4,808 | | | | (22,270 | ) |
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Net cash provided by operating activities | | | 43,912 | | | | 22,375 | |
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Cash flows from investing activities: | | | | | | | | |
Acquisitions of property, plant and equipment | | | (5,769 | ) | | | (17,688 | ) |
Contributions to pension and other benefit plans | | | (344 | ) | | | (7,929 | ) |
Other | | | 441 | | | | 4,376 | |
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Net cash used in investing activities | | | (5,672 | ) | | | (21,241 | ) |
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Cash flows from financing activities: | | | | | | | | |
Principal repayments of long-term debt | | | (35,688 | ) | | | (73,181 | ) |
Patronage refunds and other equity paid in cash | | | (456 | ) | | | (3,165 | ) |
Initial public offering, net of underwriting and offering expenses | | | — | | | | 138,859 | |
Cash distributions to members and equity holders | | | — | | | | (105,963 | ) |
Treasury stock acquired | | | — | | | | (265 | ) |
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Net cash used in financing activities | | | (36,144 | ) | | | (43,715 | ) |
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Net change in cash and cash equivalents | | | 2,096 | | | | (42,581 | ) |
Cash and cash equivalents at beginning of period | | | 13,875 | | | | 175,289 | |
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Cash and cash equivalents at end of period | | $ | 15,971 | | | $ | 132,708 | |
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Supplemental disclosure of cash flow information: | | | | | | | | |
Cash paid (received) during the quarters for: | | | | | | | | |
Interest (net of amounts capitalized) | | $ | 7,280 | | | $ | 10,557 | |
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Income taxes, net | | $ | (438 | ) | | $ | 98 | |
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