LO’L sales hit $7.6 billion;
co-op earns $128 million
Land O’Lakes Inc. had net earnings of
$128.9 million for 2005, up sharply
from $21.4 million for 2004. Co-op
officials said earnings were bolstered by
a $69.7-million after-tax gain from the
sale of its 38-percent interest in CF
Industries (a domestic fertilizer manufacturing
venture). The 2005 sales of
$7.6 billion were down 1 percent from
2004’s $7.7 billion.
Overall, the company reported strong
and improved performance in its feed,
seed and agronomy businesses, as well as
solid performance in its Dairy Foods
value-added product categories. This
positive performance was partially offset
by losses in its Layers business and
Dairy Foods manufacturing operations.
The company also reported significant
progress on key strategic initiatives
of paying down debt and building balance-
sheet strength, portfolio management
and building its branded businesses.
LO’L reduced total debt by
about $350 million in 2005 and ended
the year with a significantly improved,
long-term debt-to-capital ratio of 41.3
percent, compared to 51.9 percent at
the end of 2004. It had strong liquidity,
with $521 million in cash-on-hand and
unused borrowing authority. In the second
half of the year, Moody’s and
Standard and Poor’s each upgraded the
co-op’s financial ratings, with both
agencies indicating their ratings carried
a positive outlook.
LO’L sold its swine production
assets and its 38-percent ownership in
CF Industries Inc., generating $385
million in cash from asset dispositions
in 2005.
Among other 2005 highlights:
- In dairy foods, the launching of Land
O’ Lakes Light Butter with Canola
Oil and the introduction of a new
FlavorProtect wrapper for the company’s
flagship Land O’ Lakes butter;
- In feed, the launch of such diverse
new products as Cornerstone fullgrowth
milk replacer; RangeLand allweather
beef mineral and Ultium
Competition Horse Formula.
- In seed, the rollout of Roundup
Ready(R) Alfalfa, developed in 10-
year collaboration with Monsanto.
In other LO’L news, the co-op
announced plans to close its
Greenwood, Wis., cheese manufacturing
facility. The decision came after
considerable study of market trends and
plant capabilities, said Executive Vice
President Alan Pierson. “There is
declining milk production in the upper
Midwest. Given these market conditions,
it is not feasible to competitively
operate our Greenwood facility.” The
closing will affect approximately 30
employees.