Exhibit 99.1
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| Contact: | | Karla Harvill |
| | | 770-393-5091 |
Gold Kist Inc. Reports Second Quarter 2005 Results
ATLANTA, Ga. (May 10, 2005) – Gold Kist Inc. (NASDAQ:GKIS) today reported financial results for the second quarter and six months ended April 2, 2005. For the second fiscal quarter, net income increased 29 percent to $38.7 million, or $0.76 per diluted share, from net income of $29.9 million in the same quarter last year. Second quarter sales were $570.8 million, compared with $575.6 million for the year-earlier period.
For the first six months of fiscal 2005, the Company reported net income increased 29 percent to $42.9 million, or $0.85 per diluted share, from net income of $33.3 million for the same period in the prior year. Sales for the first half of fiscal 2005 increased 1 percent to $1.12 billion from $1.11 billion for the year-earlier period.
Commenting on the results, John Bekkers, president and chief executive officer, said, “Overall, our results for the second quarter of fiscal 2005 were better than expected. The change in net sales for the second quarter of 2005 was due to a 9.1 percent reduction in average broiler sales prices offset by an 8.4 percent increase in broiler pounds produced and sold. Average broiler sales prices for the quarter ended April 2, 2005, were 4.9 percent higher than prices for the quarter ended January 1, 2005, due to increased demand. Our strategy remains unchanged. We believe we can reduce the impact of industry volatility on our results by increasing our value-added products as a percentage of sales, improving our cost structure and growing our private-label business.”
Gold Kist Inc. will hold a conference call to discuss this press release today, May 10, 2005, at 11a.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.earnings.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 June 10, 2005. If Internet access is unavailable, you may participate on the live call by telephone by dialing (800) 289-0494. The confirmation number for this call is 8328445.
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Gold Kist Announces Second-Quarter 2005 Financial Results
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May 10, 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, including statements relating to our plans to reduce the impact of industry volatility on our results by increasing our value-added products as a percentage of sales, improving our cost structure, and growing our private-label business. 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 fluctuations in the cost and availability of raw materials, such as feed ingredients; changes in the availability and relative costs of labor and contract growers; market conditions for value-added and other finished products, including competitive factors and the supply and pricing of alternative meat proteins; effectiveness of our sales and marketing programs; disease outbreaks affecting broiler production and/or marketability of our products; effectiveness of our capital expenditures and other cost-savings measures; contamination of products, which can lead to product liability and product recalls; access to foreign markets together with foreign economic conditions; acquisition activities and the effect of completed acquisitions; pending or future litigation; the ability to obtain additional financing or make payments on our debt; regulatory developments, industry conditions and market conditions; and general economic conditions; 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 integrated 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, processing and marketing business. Gold Kist’s production operations include nine divisions located in Alabama, Florida, Georgia, North Carolina and South Carolina. For more information, visit the company’s web site at www.goldkist.com.
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Gold Kist Announces Second-Quarter 2005 Financial Results
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May 10, 2005
GOLD KIST INC.
CONSOLIDATED BALANCE SHEETS
(Dollar Amounts, Except Per Share Amounts, in Thousands)
(Unaudited)
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| | | October 2, 2004
| | | April 2, 2005
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ASSETS | | | | | | | | |
Current assets: | | | | | | | | |
Cash and cash equivalents | | $ | 175,289 | | | $ | 169,334 | |
Receivables, net | | | 115,015 | | | | 116,552 | |
Inventories | | | 238,892 | | | | 215,579 | |
Deferred income taxes | | | 15,732 | | | | 17,675 | |
Other current assets | | | 38,577 | | | | 32,388 | |
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Total current assets | | | 583,505 | | | | 551,528 | |
Investments | | | 13,072 | | | | 13,008 | |
Property, plant and equipment, net | | | 247,398 | | | | 268,551 | |
Deferred income taxes | | | 13,215 | | | | 17,519 | |
Other assets | | | 65,652 | | | | 58,719 | |
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| | | $ | 922,842 | | | $ | 909,325 | |
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LIABILITIES AND EQUITY | | | | | | | | |
Current liabilities: | | | | | | | | |
Notes payable and current maturities of long-term debt | | $ | 20,875 | | | $ | 10,472 | |
Accounts payable | | | 84,121 | | | | 78,133 | |
Accrued compensation and related expenses | | | 42,556 | | | | 34,933 | |
Income taxes payable | | | 8,583 | | | | 33,574 | |
Other current liabilities | | | 79,466 | | | | 67,330 | |
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Total current liabilities | | | 235,601 | | | | 224,442 | |
Long-term debt, less current maturities | | | 281,408 | | | | 201,884 | |
Accrued pension costs | | | 37,387 | | | | 32,681 | |
Accrued postretirement benefit costs | | | 6,760 | | | | 5,027 | |
Other liabilities | | | 44,138 | | | | 46,803 | |
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Total liabilities | | | 605,294 | | | | 510,837 | |
Patrons’ and other equity/stockholders’ equity: | | | | | | | | |
Common stock | | | 2 | | | | 515 | |
Additional paid-in capital | | | — | | | | 397,546 | |
Patronage reserves | | | 232,569 | | | | — | |
Accumulated other comprehensive loss | | | (42,318 | ) | | | (42,160 | ) |
Retained earnings | | | 127,295 | | | | 42,862 | |
Common stock held in treasury | | | — | | | | (275 | ) |
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Total patrons’ and other equity/stockholders’ equity | | | 317,548 | | | | 398,488 | |
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| | | $ | 922,842 | | | $ | 909,325 | |
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Gold Kist Announces Second-Quarter 2005 Financial Results
Page 4
May 10, 2005
GOLD KIST INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Amounts in Thousands)
(Unaudited)
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| | | Three Months Ended
| | | Six Months Ended
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| | | March 27, 2004
| | | April 2, 2005
| | | March 27, 2004
| | | April 2, 2005
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Net sales volume | | $ | 575,589 | | | $ | 570,809 | | | $ | 1,112,516 | | | $ | 1,122,767 | |
Cost of sales | | | 480,128 | | | | 477,554 | | | | 948,845 | | | | 981,676 | |
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Gross margins | | | 95,461 | | | | 93,255 | | | | 163,671 | | | | 141,091 | |
Distribution, administrative and general expenses (including $7.1 million and $7.8 million of share-based compensation expense for the three and six months ended April 2, 2005, respectively) | | | 27,200 | | | | 33,076 | | | | 56,223 | | | | 58,042 | |
Pension plan settlement expense | | | 9,908 | | | | — | | | | 9,908 | | | | — | |
Conversion expenses | | | — | | | | — | | | | — | | | | 1,418 | |
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Net operating income | | | 58,353 | | | | 60,179 | | | | 97,540 | | | | 81,631 | |
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Other income (deductions): | | | | | | | | | | | | | | | | |
Interest and dividend income | | | 744 | | | | 1,890 | | | | 888 | | | | 2,715 | |
Interest expense | | | (13,316 | ) | | | (6,213 | ) | | | (20,098 | ) | | | (13,303 | ) |
Senior debt prepayment interest and pro-rata write-off of fees and discount | | | — | | | | — | | | | — | | | | (10,016 | ) |
Unrealized loss on investment | | | — | | | | — | | | | (18,486 | ) | | | — | |
Miscellaneous, net | | | 886 | | | | 1,284 | | | | 1,177 | | | | 2,986 | |
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Total other expenses, net | | | (11,686 | ) | | | (3,039 | ) | | | (36,519 | ) | | | (17,618 | ) |
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Income before income taxes | | | 46,667 | | | | 57,140 | | | | 61,021 | | | | 64,013 | |
Income tax expense | | | 16,805 | | | | 18,471 | | | | 27,754 | | | | 21,151 | |
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Net income | | $ | 29,862 | | | $ | 38,669 | | | $ | 33,267 | | | $ | 42,862 | |
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Net income per common share: | | | | | | | | | | | | | | | | |
Basic | | $ | — | | | $ | 0.77 | | | $ | — | | | $ | 0.86 | |
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Diluted | | $ | — | | | $ | 0.76 | | | $ | — | | | $ | 0.85 | |
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Weighted average common shares outstanding: | | | | | | | | | | | | | | | | |
Basic | | | — | | | | 49,971 | | | | — | | | | 49,971 | |
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Diluted | | | — | | | | 50,748 | | | | — | | | | 50,469 | |
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