Michael Foods Reports Preliminary Fourth Quarter and Annual Results

Feb 14, 2011, 08:38 ET from Michael Foods Group, Inc.

MINNETONKA, Minn., Feb. 14, 2011 /PRNewswire/ -- Michael Foods Group, Inc. today reported preliminary financial results for the fourth quarter of 2010.  Net sales for the quarter ended January 1, 2011 are expected to be $428.9 million compared to $390.3 million for the fourth quarter of 2009, an increase of approximately 10%.  Net sales for the year ended January 1, 2011 are expected to be $1,602.3 million compared to $1,542.8 million in 2009, an increase of approximately 4%.  

Net income was significantly impacted by expenses related to the June 29, 2010 change-in-control transaction, its financing, the associated revaluation of our tangible and intangible assets, and the subsequent depreciation and amortization of those assets.  Accordingly, net income does not provide a meaningful comparison between the respective periods.  

Earnings before interest, taxes, depreciation and amortization and other adjustments (EBITDA, as defined in our credit facility) for the quarter ended January 1, 2011 is expected to be in the range of $61 to $63 million, compared to $54.1 million in 2009.  EBITDA for the year ended January 1, 2011 is expected to be in the range of $225 to $227 million, compared to $214.4 million in 2009, an increase of between 5 and 6%.  Michael Foods Group, Inc. uses EBITDA as a measurement of financial results, as an indication of the relative strength of its operating performance and to determine incentive compensation levels.

Commenting on the results, President and Chief Executive Officer James E. Dwyer, Jr. said, "Our fourth quarter EBITDA results were driven by improved performance across all segments of our business.  Fourth quarter volumes increased 3% in total with each of our businesses showing growth. Our focus on moving our customers up the value chain to our higher-margin products and tight cost controls allowed us to grow EBITDA at a rate in excess of our volume growth."

Dwyer concluded, "Our free cash flow remains strong, which allowed us to make an $8 million voluntary prepayment on our term debt in December 2010, bringing our total debt down to $1.23 billion, while maintaining approximately $45 million of cash on the balance sheet at year-end.  In January 2011, the company made an additional $17.7 million voluntary prepayment on its term debt."  

Michael Foods Group, Inc. will release its final results in late March, after its audit is complete.

Michael Foods Group, Inc. (formerly Michael Foods, Inc.) based in Minnetonka, MN, is a producer and distributor of food products to the foodservice, retail and food-ingredient markets.  Its principal products are egg products, refrigerated potato products, cheese and other dairy products.

Certain items in this release may be forward-looking statements, including statements regarding our preliminary fourth quarter and annual results.  Such forward-looking statements are subject to numerous risks and uncertainties, including, but not limited to, changes in domestic and international economic conditions. Also, the Company faces normal, and at times notable, variances in the supply of, and demand for, eggs, grain feed inputs, potatoes and cheese, which can result in pricing and profit margin volatility for certain egg products, potato products and cheese.  As a result, the Company's actual financial results could differ materially from the results estimated by, forecasted by, or implied by the Company in such forward-looking statements.

SOURCE Michael Foods Group, Inc.