Company officials said this strong performance was driven by a combination of factors, including improved agricultural markets, the strength of the Land O'Lakes brands, impressive results from innovative new products, and strategic actions that are making Land O'Lakes more competitive and profitable.
Net Sales Up $400 Million: Net sales for the quarter increased 13% to $3.47 billion, compared with $3.07 billion for the first quarter of 2010. Net sales were up in the company's Dairy Foods, Feed and Crop Inputs businesses, and relatively flat in the Eggs business.
Record-High First-Quarter Net Earnings: The company reported improved earnings in all its businesses, with overall first-quarter net earnings of $101.0 million, up from $30.9 million in the first quarter of 2010.
Balance Sheet Strength Maintained/Debt Ratings Upgraded: Land O'Lakes maintained a strong balance sheet, with the Long-Term Debt-to-Capital ratio improving to 31% (versus 34% at the end of the first quarter one year ago), and total equity increasing by $115 million. Total debt increased to $1.15 billion (as of March 31, 2011) from $0.94 billion on the same date in 2010, due primarily to higher working capital needs related to increased pricing levels and business volume. The company was upgraded to Investment Grade status by Moody's Investors Service on May 9, 2011.
Land O'Lakes president and chief executive officer Chris Policinski said, "We're pleased with our first-quarter results. Sales were up in our core businesses, improved markets were beneficial to our financials, and we're delivering on our commitment to operate in a very effective, cost-efficient manner."
Policinski noted Land O'Lakes continued to make solid progress in implementing Total Margin Management (TMM), an ongoing, company-wide initiative that is enabling the cooperative to reduce costs, expand margins and simplify business processes. TMM delivered more than $50 million in benefits in 2010, and is being accelerated in 2011.
"By applying the principles of TMM, Land O'Lakes is organically generating funds to promote strategic, profitable growth. This helps us create competitive advantage and positions us for the future," Policinski noted. "The steps we're taking will enable us to continue to be an industry leader in providing innovative, branded products and services to consumers and our business customers, which, in turn, will enable us to deliver strong returns to our member-owners."
From the May 13, 2011, Prepared Foods' Daily News.