Land O'Lakes Reports Third-Quarter and Year-To-Date Financial Results

ARDEN HILLS, Minn., Nov. 12, 2010 /PRNewswire/ -- Land O'Lakes, Inc. today reported continued strong sales across most of its business portfolio, with net sales up for the quarter and year-to-date.  Net earnings also were improved for the quarter, although year-to-date net earnings were behind 2009 due to a combination of factors, including the challenging economy, the impact of unrealized hedging, rebate timing, and one-time charges.  

Land O'Lakes President and Chief Executive Officer Chris Policinski said the company's results through September reflect:

• Solid performance in branded and proprietary product lines;
• Impressive contributions from innovative, new products;
• Strong customer and consumer relationships; and
• A continued focus on financial and operating efficiency.

"I'm pleased that our innovative new products – which have been introduced in the marketplace over the past three years – continue to generate strong earnings," Policinski said.  "This confirms the importance of maintaining very close relationships with customers and consumers.  By providing new products and services that they value, we're able to deliver strong results for our farmers-members – many of whom have been hard-hit by the challenging economy," Policinski noted.

"Our branded and proprietary product lines are also performing well. This reflects the strength of our brands and the willingness of consumers and customers to choose well-known, high-quality products, even in a down economy," Policinski added.  

From an operational standpoint, the Land O'Lakes CEO noted that the company is aggressively improving its operations and pursuing cost-management and revenue-generating initiatives.

"We're making sure that all our businesses are positioned to perform.  On a company-wide basis, we're taking steps to reduce costs and invest in activities that have the greatest potential to deliver an outstanding return.  These actions are fundamental to good business, and they're enabling us to manage through the difficult economic environment, which has particularly impacted our Feed and Industrial (dairy processing) Foods businesses.  By maintaining financial and operating discipline, we're overcoming the current challenges, and are positioning Land O'Lakes for continued strong performance in the future."

Net Sales Up for Third Quarter and Year-to-Date

Land O'Lakes reported net sales of $2.37 billion for the third quarter, up from $2.18 billion for the same quarter last year.  

Sales through September were $8.39 billion, up $454 million (5.7 percent) over the same period in 2009.  Year-to-date, sales were up in the company's Dairy Foods, Seed and Crop Protection Products businesses, essentially flat in the Egg business, and lower in the Feed business, where volumes and product mix have been affected by challenging conditions across livestock and dairy agriculture.

Net Earnings Improve for Third Quarter, Decline Year-to-Date

The company reported $7.3 million in net earnings for the traditionally soft third-quarter, versus a $4.3 million net loss for the same period in 2009.  

Net earnings through September stand at $103.6 million, down from $159.8 million for the first three quarters of 2009.  The company's year-to-date net earnings in 2010 reflect the impact of unrealized hedging, the timing of the recognition of agronomy vendor rebates, and a first-quarter charge related to a legal settlement.  Excluding those factors, year-to-date net earnings are up $5.7 million from 2009.

Debt Up Slightly

Total debt as of September 30, 2010, was $1.2 billion, up $70 million from the same date one year ago.  The increase was due to higher commodity prices and working capital levels.  

Land O'Lakes, Inc. (www.landolakesinc.com) is a national, farmer-owned food and agricultural cooperative with 2009 sales of approximately $10 billion.  Land O'Lakes does business in all 50 states and more than 50 countries.  It is a leading marketer of a full line of dairy-based consumer, foodservice and food ingredient products across the United States; serves its international customers with a variety of food and animal feed ingredients; and provides farmers and ranchers with an extensive line of agricultural supplies (feed, seed, and crop protection products) and services.  Land O'Lakes also provides agricultural assistance and technical training in more than 25 developing nations.

SOURCE Land O'Lakes, Inc.