April 26, 2006

 

Land O'Lakes reports improved sales and earning for first quarter

 

 

Land O'Lakes Inc. officials outlined strategic imperatives on Tuesday (Apr 25) after reporting of the company's first-quarter financial results on its website.

 

Land O'Lakes is a US farmer-owned cooperative and produces feeds for dairy cattle, beef, swine, poultry, game birds, and other livestock. The company sells feed, seed and agronomy products to dairy producers and farmers through a national network of independently owned and operated local farmer cooperatives.

 

The company's focus on its strategic priorities produced positive results, including increased efficiency at manufacturing facilities, simplified pricing and improved cross-functional decision making and coordination, a press statement said.

 

By focusing on sales and marketing performance, product rollouts, retail locations and cost reduction, Land O'Lakes Purina Feed translated its supply chain and organisation strategies into strong earnings, the statement said.

 

Its seed division experienced double-digit growth on the strength of the local co-op seed seller and system.

 

In 2005, its Croplan Genetics division trained more than 5,000 retail agronomy specialists nationwide. They also utilised the programme into a new customer acquisition strategy and had more than 6,875 growers attend its sessions.

 

In addition, the seed division have built market share in two crops and are now America's number-one canola and number-two sunflower seed business.

 

MoArk, LLC, the joint venture previously owned by Land O'Lakes, Inc. and Osborne Investments, LLC, had a

challenging year due to a steep decline in egg prices. However, the specialty egg division still managed a 26-percent sales increase and also had continued savings from production efficiencies.

 

Land O'Lakes reported net sales of US$ 2.1billion and net earnings of US$26.1 million for the first quarter of 2006, as compared to sales of US$2 billion and net earnings of US$24.3 million for the first quarter of 2005. Total EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) was US$69.4 million for the quarter versus US$71.3 million for the first quarter of 2005.

 

Land O'Lakes reported US$3.3 million in pretax earnings in its feed division for the quarter, as compared to US$8.8 million one year ago. The decline was attributed to tighter margins, particularly in dairy and horse feed.

 

The company also incurred additional costs in serving customers previously served by the company's North Carolina plant which shut down last year due to fire damage. Feed sales for the quarter were US$693 million, up about US$60 million from the first quarter of 2005.