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SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities and Exchange Act of 1934
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Date of Report (Date of earliest
event reported) August 9, 1994
WLR Foods, Inc.
(Exact name of registrant as specified in its charter)
Virginia 0-17060 54-1295923
(State of (Commission File Number) IRS Employer
incorporation) Identification No.)
P.O. Box 7000 22815
Broadway, Virginia (Zip Code)
(Address of principal executive offices)
(703) 896-7001
(Registrant's telephone number,
including area code)
Highway 33 West, P.O. Box 228, Hinton, Virginia 22831
(Former name or former address, if changed since last report)
Exhibit Index is on Page 4<PAGE>
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Items 1-4. Not Applicable.
Item 5 Other Events.
In response to questions from shareholders, brokers, and securities
analysts, the Chief Financial Officer for WLR Foods, Inc. (the
Company) has released in a memorandum dated August 9, 1994 certain
information regarding the Company's proposed acquisition of
substantially all of the assets of the turkey processing division
of Cuddy Farms, Inc. A copy of that memorandum is set forth in its
entirety as an exhibit hereto.
Item 6. Not Applicable.
Item 7. Exhibits.
(99.1) Company Memorandum dated August 9, 1994.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf
by the undersigned thereunto duly authorized.
WLR Foods, Inc.
By: /s/______________________
Delbert L. Seitz
Chief Financial Officer
Secretary and Treasurer
Date: August 10, 1994
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Exhibit No. Description Sequentially
Numbered Page
(99.1) Company memorandum dated August 9, 1994 5
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MEMORANDUM Exhibit No. 99.1
TO: Analysts and Brokers
FROM: Delbert Seitz
DATE: August 9, 1994
SUBJECT: INFORMATION ABOUT THE CUDDY TRANSACTION
I. Cuddy Assets Purchased (in millions)
Working Capital. . . . . . . . . . $40.4
Plant, Property & Equipment . . . 32.2
Other Assets . . . . . . . . . . . 1.2
TOTAL . . . . . . . . . . . . $73.8
Assets were purchased at approximately book value and will
not require any allocation of value to goodwill. These
values are subject to post-closing adjustments which are not
thought to be material.
Payment will be made with $43.0 million of cash financed
with variable rate interest loans and $30.8 million of
equity. Shares issued may range from 1,283,333 shares of
common stock at $24.00 per share to 1,100,000 shares at
$28.00 per share. Post-closing adjustments will be adjusted
with equity, not cash.
Each dollar invested in Cuddy buys $2.7 of sales ($200.0
million sales divided by $73.8 million of investment). This
compares favorably to our recent Moorefield, West Virginia
chicken expansion that added approximately $1.7 of sales per
dollar invested. The Cuddy transaction acquires existing
turkey production capacity and markets and does not expand
the industry.
II. WLR Foods Approaches One Billion Dollars in Sales
Sales for the food division of Cuddy in their last completed
fiscal year were approximately $200 million. This should
bring WLR Foods
sales to one billion in 1995.
III. WLR Foods Becomes Number Two in Turkey Processing
Based on December 1993 issue of "Turkey World", for calendar
year 1994, Wampler-Longacre will grow 502 million pounds of
live weight turkey and Cuddy 240 million pounds. The
combined total of 742 million pounds of live weight turkey
clearly puts WLR Foods second in the industry to Con Agra's
Butterball Turkey Co.
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INFORMATION ABOUT THE CUDDY TRANSACTION
Page 2
IV. Cuddy Strengthens WLR Foods Position in Further Processed
Turkey and Food Service Markets
More than half of all Cuddy sales are further processed,
value added products with a heavy emphasis in food service
and institutional markets. This fits WLR Foods long-term
strategy for increased value added and food service sales.
V. The Addition of Approximately 1.2 Million Common Shares Adds
Shareholder Value
Because of the relative low number of shares issued for the
amount of equity acquired, the book value of all shares
outstanding will be increased by over $1.00 per share.
Dividing $200 million of added sales by 1.2 million added
shares, results in $167 of sales for each share issued.
This increases the sales per share for all WLR common stock
outstanding from approximately $65 per share to $75 per
share.
Based on the shares to be issued, the transaction will be
accretive as Cuddy is expected to meet WLR Foods existing
gross margin rate and later, when synergies and cost
improvements are implemented, contribute even more to
earnings per share.
DLS/ths
