UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES AND EXCHANGE ACT OF 1934
For the quarterly period ended March 30, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ________ to _________
COMMISSION FILE NUMBER 0-17060
WLR FOODS, INC.
(Exact name of Registrant as specified in its charter)
Virginia 54-1295923
(State or other jurisdiction (I.R.S. Employer
of incorporation) Identification No.)
P.O. Box 7000
Broadway, Virginia 22815
(Address including Zip Code of Registrant's
principal executive offices)
(540) 896-7001
(Registrant's telephone number, including area code)
Indicate by cross mark whether the Registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such
shorter period that the Registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90
days. Yes (X) No ()
The number of shares outstanding of Registrant's Common Stock, no par
value, at May 1, 1996 was 17,651,388 shares.
<PAGE>
PART 1. FINANCIAL INFORMATION
Item 1. Financial Statements
<TABLE>
WLR FOODS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
<CAPTION>
Thirteen Weeks Ended
(unaudited)
In thousands, except per share data March 30, 1996 April 1, 1995
-------------- -------------
<S> <C> <C>
Net sales $216,263 $211,469
Cost of sales 203,543 184,442
-------- --------
Gross profit 12,720 27,027
Selling, general and administrative expenses 21,994 22,624
-------- --------
Operating income (loss) (9,274) 4,403
Other expense:
Interest expense 2,271 1,695
Miscellaneous income (65) (618)
-------- --------
Other expense 2,206 1,077
-------- --------
Earnings (loss) before income taxes and minority interest (11,480) 3,326
Income tax expense (benefit) (4,419) 1,280
Minority interest in net earnings of consolidated subsidiary 1 13
-------- --------
NET EARNINGS (LOSS) ($7,062) $2,033
======== ========
NET EARNINGS (LOSS) PER COMMON SHARE ($0.40) $0.11
AVERAGE COMMON SHARES OUTSTANDING 17,625 18,238
DIVIDENDS DECLARED PER COMMON SHARE 0.06 0.06
See accompanying Notes to Consolidated Financial Statements.
</TABLE>
1
<PAGE>
<TABLE>
WLR FOODS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
<CAPTION>
Thirty-nine Weeks Ended
(unaudited)
In thousands, except per share data March 30, 1996 April 1, 1995
-------------- --------------
<S> <C> <C>
Net sales $734,856 $669,594
Cost of sales 652,887 573,458
-------- --------
Gross profit 81,969 96,136
Selling, general and administrative expenses 72,377 66,724
-------- --------
Operating income 9,592 29,412
Other expense:
Interest expense 6,453 4,648
Miscellaneous income (268) (221)
-------- --------
Other expense 6,185 4,427
-------- --------
Earnings before income taxes and minority interest 3,407 24,985
Income tax expense 1,308 9,619
Minority interest in net earnings of consolidated subsidiary 22 40
-------- --------
NET EARNINGS $2,077 $15,326
======== ========
NET EARNINGS PER COMMON SHARE $0.12 $0.86
AVERAGE COMMON SHARES OUTSTANDING 17,483 17,900
DIVIDENDS DECLARED PER COMMON SHARE $0.18 $0.17
See accompanying Notes to Consolidated Financial Statements.
</TABLE>
2
<PAGE>
<TABLE>
WLR FOODS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<CAPTION>
Dollars in thousands
(unaudited)
March 30, 1995 July 1, 1995
------------- -----------
<S> <C> <C>
ASSETS
Current Assets
Cash and cash equivalents $336 $706
Accounts receivable, less allowance for
doubtful accounts of $616 and $613. 59,961 63,194
Inventories (Note 2) 166,328 125,849
Other current assets 6,689 3,183
-------- --------
Total current assets 233,314 192,932
Investments 745 949
Property, plant and equipment, net 182,037 174,163
Other assets 6,133 4,481
-------- --------
TOTAL ASSETS $422,229 $372,525
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Notes payable to banks $3,150 $ -
Current maturities of long-term debt 8,027 8,028
Excess checks over bank balances 16,240 3,948
Trade accounts payable 32,464 28,021
Accrued expenses 18,837 22,036
Deferred income taxes 9,259 9,299
Other current liabilities 1,059 1,038
-------- --------
Total current liabilities 89,036 72,370
Long-term debt, excluding current maturities 135,590 106,481
Deferred income taxes 9,527 8,730
Minority interest in consolidated subsidiary 543 527
Other liabilities and deferred credits 3,346 3,323
-------- --------
Total liabilities 238,042 191,431
Common stock subject to repurchase 17,750 17,750
Shareholders' equity :
Common stock, no par value. Authorized 100,000,000 shares;
issued and outstanding 17,642,356 and 17,297,671 shares. 61,009 56,782
Additional paid-in capital 2,972 3,014
Retained earnings 102,456 103,548
-------- --------
Total shareholders' equity 166,437 163,344
-------- --------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $422,229 $372,525
======== ========
See accompanying Notes to Consolidated Financial Statements.
</TABLE>
3
<PAGE>
<TABLE>
WLR FOODS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
<CAPTION>
(unaudited) Thirty-nine Weeks Ended
Dollars in thousands
CASH FLOWS FROM OPERATING ACTIVITIES: March 30, 1996 April 1, 1995
-------------- -------------
<S> <C> <C>
Net earnings $2,077 $15,326
Adjustments to reconcile net earnings to net cash provided by
(used in) operating activities:
Depreciation and amortization 20,915 18,295
Gain on sale of property, plant and equipment (108) (143)
Deferred income taxes (298) 3,397
Other, net 335 214
Change in operating assets and liabilities:
(net of acquired assets)
Decrease in accounts receivable 3,388 10,775
Increase in inventories (37,615) (17,487)
Increase in other current assets (3,339) (3,269)
Increase (decrease) in accounts payable 3,773 (3,913)
Increase (decrease) in accrued expenses and other (3,493) 740
--------- --------
Net Cash Provided by (Used in) Operating Activities (14,365) 23,935
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to property, plant and equipment (16,619) (12,136)
Net cash used in acquisitions, (including costs) (10,563) (40,130)
Proceeds from sales of property, plant and equipment 784 1,544
(Investments in) dispositions of other assets 819 (13)
Minority interest in net earnings of consolidated subsidiary 16 36
-------- --------
Net Cash Used in Investing Activities (25,563) (50,699)
CASH FLOWS FROM FINANCING ACTIVITIES:
Principal payments on long-term debt (13,892) (2,870)
Proceeds from long-term debt 43,000 25,000
Notes payable to banks (net of principal payments) 3,150 10,300
Increase in excess checks 12,292 1,150
Issuance of common stock 977 325
Repurchase of common stock (2,821) (4,607)
Dividends paid (3,148) (2,833)
-------- --------
Net Cash Provided by Financing Activities 39,558 26,465
-------- --------
Decrease in Cash and Cash Equivalents (370) (299)
Cash and Cash Equivalents at Beginning of Fiscal Year 706 771
-------- --------
Cash and Cash Equivalents at End of Period $336 $472
======== ========
Supplemental cash flow information:
Cash paid for:
Interest $5,213 $3,574
Income taxes 2,449 8,574
The Company considers all highly liquid investments of maturity of 3 months or less at
purchase to be cash equivalents.
Non cash transactions:
The Company issued 411,216 shares of common stock valued at $5.4 million on September 29,
1995, and an additional 45,720 shares, valued at $603 thousand, on January 11, 1996, for
the acquisition of New Hope Feeds, Inc. (Note 3)
See accompanying Notes to Consolidated Financial Statements.
</TABLE>
4
<PAGE>
Notes to Consolidated Financial Statements
WLR Foods, Inc. and Subsidiaries
1. Accounting Policies
The consolidated financial statements presented herein, include the
accounts of WLR Foods, Inc. and its wholly-owned and majority-owned
subsidiaries. All material balances have been eliminated in
consolidation. The consolidated balance sheet as of March 30, 1996,
the consolidated statements of earnings for the thirteen week and
thirty-nine week periods ended March 30, 1996 and April 1, 1995, and
the consolidated statements of cash flows for the thirty-nine weeks
ended March 30, 1996 and April 1, 1995 are unaudited. In the opinion
of management, all adjustments necessary for fair presentation of such
consolidated financial statements have been included. Such adjustments
consisted only of normal recurring accruals and the use of estimates.
Interim results are not necessarily indicative of results for the
entire fiscal year.
The consolidated financial statements and notes are presented as
permitted by Form 10-Q and do not contain certain information included
in the Company's annual consolidated financial statements and notes.
The Company's unaudited interim consolidated financial statements
should be read in conjunction with the consolidated financial
statements included in the Annual Report to Shareholders for the
fiscal year ended July 1, 1995. In both, the accounting policies and
principles used are consistent in all material respects. Certain
fiscal 1995 amounts have been reclassified to conform with fiscal 1996
presentations.
2. Inventories
A summary of inventories at March 30, 1996 and July 1, 1995 follows:
(unaudited)
Dollars in thousands March 30, 1996 July 1, 1995
-------------- ------------
Live poultry and breeder flocks $ 71,258 $54,487
Processed poultry and meat products 61,930 41,262
Packaging supplies, parts and other 19,630 19,704
Feed, grain and eggs 13,510 10,396
------- -------
Total inventories $166,328 $125,849
======= =======
3. Acquisition of New Hope Feeds, Inc. and an affiliated company
On September 29, 1995, the Company acquired the chicken processing and
production assets of New Hope Feeds, Inc. and an affiliated company
for $10.6 million in cash and 411,216 shares of common stock valued at
$5.4 million. An additional 45,720 shares of common stock, valued at
$603 thousand, were issued on January 11, 1996. The acquisition was
accounted for as a purchase, and, accordingly the assets of New Hope
Feeds are included in the Company's financial statements as of the
acquisition date. The transaction was recorded at the fair value of
assets acquired and liabilities assumed as follows:
5
<PAGE>
Dollars in thousands
Inventories $ 2,864
Other current assets 283
Property, plant & equipment 12,900
Other assets 2,535
------
Total assets acquired 18,582
Cash paid (including costs) 10,563
Issuance of common stock 6,028
------
Total liabilities assumed $ 1,991
======
Due to the immaterial size of the New Hope Feeds, Inc. historical
operation, relative to WLR Foods historical results, proforma
comparisons are not provided.
4. Subsequent event
As of May 1, 1996, the balance on the Company's revolving lines of
credit was $89 million, up from $71.1 million at March 30, 1996.
Subsequent to quarter end, the Company negotiated a $15 million demand
note with one of its lenders for general corporate purposes. Through
May 9, 1996, no draws had been made on the demand note.
6
<PAGE>
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
General
WLR Foods, Inc. (the Company) is a fully-integrated poultry
production, processing and marketing business with operations in
Virginia, West Virginia, Pennsylvania and North Carolina.
The Company experienced its most challenging quarter since becoming a
public company in 1988. Grain costs were up $22 million over the same
period last year and are expected to remain high at least through late
summer.
WLR Foods has taken steps to reduce other costs which should offset,
at least in part, the high grain costs. The Company has engaged
outside consultants to assist in identifying areas where costs may be
lowered or greater efficiencies may be utilized. Their suggestions
include, centralizing purchasing, consolidating products and product
lines, and improving production planning processes.
In addition, management has received numerous cost saving suggestions
from its employees which have been initiated or are under study.
These ideas range from generating nominal savings to significant
savings throughout the Company.
The Company s stock repurchase program remained in effect through
the quarter but, to preserve working capital share repurchases have
been suspended pending improvement in industry conditions. Through
April 30, 1996, the Company has repurchased a total of 1.3 million
shares for $19.2 million.
On December 21, 1995, Tyson Foods, Inc. filed a petition with the
United States Supreme Court, requesting an appeal of the September 22,
1995 ruling of the Fourth Circuit Court of Appeals. The Supreme Court
denied the request on February 20, 1996, thereby ending Tyson s
current litigation which effectively terminates Tyson s legal
remedies.
7
<PAGE>
Results of Operations
The following tables of Changes in Results of Operations show dollar
and percentage changes in the components of operating results over the
past thirteen weeks and thirty-nine weeks compared to the
corresponding periods in fiscal 1995.
Changes in Results of Operations Thirteen-weeks ended
Mar. 30, 1996 vs. Apr. 1, 1995
In millions, except earnings $ Increase %Change
per share (Decrease)
Net sales $ 4.8 2.3%
Cost of sales 19.1 10.4
----- -----
Gross profit (14.3) (52.9)
Selling, general and administrative expenses (0.6) ( 2.8)
----- -----
Operating profit (13.7) (310.6)
Interest expense 0.6 34.0
Other income (expense), net (0.5) (89.5)
----- -----
Earnings before income taxes and
minority interest (14.8) (445.2)
Income tax expense and minority interest (5.7) (441.7)
----- -----
Net earnings ($9.1) (447.4)
===== =====
Net earnings per common share ($0.51) (463.6)
===== =====
Changes in Results of Operations Thirty nine-weeks ended
Mar. 30, 1996 vs. Apr. 1, 1995
In millions, except earnings $ Increase %Change
per share (Decrease)
Net sales $65.3 9.7%
Cost of sales 79.4 13.9
----- ----
Gross profit (14.1) (14.7)
Selling, general and administrative expenses 5.7 8.5
----- ----
Operating profit (19.8) (67.4)
Interest expense 1.8 38.8
Other income (expense), net - -
----- -----
Earnings before income taxes and
minority interest (21.6) (86.4)
Income tax expense and minority interest (8.3) (86.2)
----- ----
Net earnings ($13.3) (86.4)
===== ====
Net earnings per common share ($0.74) (86.0)
===== ====
8
<PAGE>
For the periods indicated, the following tables set forth
selected information from the Company's Consolidated Statements of
Operations expressed as a percentage of sales.
Operations as a Thirteen-weeks ended
Percentage of Net Sales Mar. 30, 1996 vs. Apr. 1, 1995
Net sales 100.0% 100.0%
Cost of sales 94.1 87.2
----- -----
Gross profit margin 5.9 12.8
Selling, general and
administrative expenses 10.2 10.7
----- -----
Operating profit margin (4.3) 2.1
Interest expense 1.0 0.8
Other (income)/expense - (0.3)
----- -----
Earnings before income taxes and
minority interest (5.3) 1.6
Income tax expense and minority
interest (2.0) 0.6
----- -----
Net Earnings (3.3%) 1.0%
===== =====
Operations as a Thirty-nine weeks ended
Percentage of Net Sales Mar. 30, 1996 vs. Apr. 1, 1995
Net sales 100.0% 100.0%
Cost of sales 88.8 85.6
----- -----
Gross profit margin 11.2 14.4
Selling, general and
administrative expenses 9.9 10.0
----- -----
Operating profit margin 1.3 4.4
Interest expense 0.8 0.7
Other (income)/expense - -
----- -----
Earnings before income taxes and
minority interest 0.5 3.7
Income tax expense and
minority interest 0.2 1.4
----- -----
Net Earnings 0.3% 2.3%
===== =====
Results of operations
Net sales rose $4.8 million or 2.3%, while overall sales volumes
decreased 4.3% for the quarter ended March 30, 1996 compared to the
same period last year. Chicken sales volumes were up 13.4%, due to the
Goldsboro acquisition, but were also affected adversely by the Russian
embargo. The average realized sales price for chicken was up 6.5%
compared to the third quarter last year. Turkey sales volumes fell
19.2% compared to the same period last year, while average realized
sales prices rose 13.5%. Volumes of finished goods increased by 31%
compared to levels on April 1, 1995. The increases in inventory
levels were due primarily to the impact of the Russian embargo on
poultry products, combined with a strategy of holding products for
sale in anticipation of seasonal price improvements. Management
anticipates a return to normal inventory levels later in the summer
of 1996.
9
<PAGE>
Net sales were up 9.7% or $65.3 million to $734.9 million for
the thirty-nine weeks ended March 30, 1996. Sales volumes were up 6.2%
with chicken volumes up 11.9% and turkey volumes up 1.6%. Sales volume
increases in chicken and turkey were both affected by the impact of
increased volumes due to acquisitions made since the beginning of last
fiscal year. Average realized prices for chickens were up 2.4%, while
average realized prices for turkey were up 4.5%.
Cost of sales increased $19.1 million or 10.4% this quarter
compared to the same quarter last year. Higher grain prices increased
costs $22 million. Corn prices averaged 51% higher and soy bean meal
40% higher than the third quarter last year. Prices of both
commodities are expected to remain high at least through the summer
until the new crop is harvested. The fourth quarter of fiscal 1996
should show approximately $25 million of higher grain costs than the
same quarter last year, with at least part offset by reduced costs in
other areas during the quarter, better flock health, and better
selling prices. Severe weather also added costs to operations. The
Company canceled 40 production shifts (an average of 2 production days
per plant) because of bad weather. Flock performance was also
adversely impacted by the weather during the quarter.
Disease is a risk faced by producers of poultry and WLR Foods
uses strict bio-security measures to minimize this risk. At the
present time, management is not aware of any significant disease
situations that are currently impacting the performance of the live
production operations of the Company. The Company is monitoring the
North Carolina turkey flocks for spiking mortality, which tends to
occur in warm weather. Flock management measures to reduce risk from
this disease have been taken and a new drug introduced last fall is
expected to reduce costs associated with the disease. While there
has been one flock diagnosed with symptoms of spiking mortality,
which was treated with this new drug, it will be summer before
the Company may determine how effective the action taken will be
overall.
Steps to reduce costs have been taken including implementing a
hiring freeze. 400 positions with an annual cost of $8 million in
wages and benefits have been permanently eliminated. Changes in
certain work schedules and standardizing breaks in operations will
generate savings of over $3 million per year. Savings realized to date
from centralizing purchasing will save $2 million per year, with
greater savings expected as more and more purchases are made centrally
throughout the year.
For the thirty-nine weeks, cost of sales was up $79.4 million,
compared to the same period last year. Higher grain costs and higher
sales volumes caused the increase in cost of sales. Year-to-date grain
costs are up $34 million compared to the same period last year.
The gross profit margin dropped to 5.9% compared to 12.8% for the
third quarter last year due to high grain costs. For the thirty-nine
weeks, gross profit margin dropped to 11.2% compared to 14.4% last
year.
For the thirteen weeks, selling general and administrative
expenses were down $0.6 million due to slightly lower sales volumes
and reduced bonuses. These reductions somewhat offset consulting
fees.
10
<PAGE>
For the thirty-nine weeks, selling, general and administrative
costs increased $5.7 million, or 8.5% due to higher sales volumes,
somewhat offset by lower bonuses and reduced administrative costs.
Management believes selling, general and administrative costs should
be at or below 9.5% of sales on an annual basis and below 10.0% in all
quarters.
Operating profit decreased $13.7 million for the thirteen week
period, primarily the result of lower gross profits on sales. For the
thirty-nine weeks, operating profit was down $19.8 million due to
reduced gross profits and higher selling, general and administrative
expenses.
For the third quarter, other expenses increased $1.1 million
compared to last year s same quarter due to an increase of $0.6
million in interest expense, bad debt charges of $0.3 million, net of
the impact of a one-time gain of $0.2 million last year on the
prepayment of long-term debt.
Year-to-date other expense is up $1.8 million due to higher
interest costs, the result of higher levels of borrowings.
Net income decreased $9.1 million for the thirteen weeks, net of
a decrease in income tax expense of $5.7 million. For the thirty-nine
weeks, the Company s net income decreased $13.3, net of an $8.3
million reduction of income tax expense.
WLR Foods anticipates high grain costs through the summer months
of 1996. The higher grain costs are expected to increase operating
costs by as much as $25 million in the fourth quarter over the same
period last year. Grain costs should be somewhat offset by other cost
savings and seasonal increases in poultry prices.
Financial Condition and Liquidity
WLR Foods closed the third quarter of fiscal 1996 with a strong
balance sheet. Working capital was $144.3 million. The current ratio
remains strong at 2.6-to-1. Total assets were $422.2 million,
reflecting the high levels of finished goods inventories. The Company
anticipates a reduction in finished goods inventory by calendar year
end. The ratio of total debt to total capital, including common stock
subject to repurchase as debt, was 49.7%. The Company's book value per
common share was $10.44 as of March 30, 1996.
Capital Resources
Management is in the process of expanding the Company's current
$110 million revolving credit facility. Terms of the expanded facility
are being negotiated. As of March 30, 1996, the Company had $23.9
million available on revolving credit facilities. Through May 1, 1996
the Company borrowed an additional $17.9 million to cover working
capital needs.
11
<PAGE>
Capital spending for the thirty-nine weeks was $16.6 million, of
which $14.1 million was for normal replacements and upgrades of
existing equipment and facilities. The remaining spending was for land
and the construction of the Richmond ice manufacturing facility.
Depreciation expense was $20.9 million, along with $0.6 million in
amortization expense.
Capital spending for fiscal 1996 has been reduced to
approximately $21 million from $30 million because of industry
conditions and the need to conserve working capital. A new chicken
hatchery at the Goldsboro complex projected to cost $5 million has
been delayed until industry conditions improve. Normal replacements
and upgrades of equipment and facilities are expected to be
approximately $17 million, with $2.8 million spent for the Richmond
ice manufacturing facility, and the remaining $2 million committed for
information system upgrades and enhancements. Depreciation and
amortization projections remain at $27 million, including the added
depreciation from the Goldsboro division.
The capital budget for fiscal 1997 is expected to be $15 million
to $17 million. Due to industry conditions, management has reduced
capital spending to conserve working capital.
The Company paid a dividend of $0.06 per share on May 3, 1996 to
shareholders of record as of April 12, 1996.
Other
At the present time, management does not anticipate any of the
FASB statements that will be adopted within the next year to have a
material effect on the company s operation or financial position. WLR
Foods will adopt FASB Statement No. 121 Accounting for the
Impairment of Long Lived Assets in Fiscal 1997. Management does not
believe this requirement will have any effect on the Company at this
time. The Company will adopt FASB Statement No. 123 Accounting for
Stock-Based Compensation in Fiscal 1997. This requirement is for
disclosure purposes and will not have an impact on the Company s
operations or financial position.
12
<PAGE>
PART III OTHER INFORMATION
Item 1. Legal Proceedings
On March 8, 1996, suit was filed against WLR Foods, Inc.
(Company) and its wholly owned subsidiary, WLR Poultry Products, Inc.
(collectively, WLR), New Hope Feeds, Inc. and Equipment Truck Leasing,
Inc. (collectively, New Hope) and the principal shareholders of New
Hope, by Case Foods, Inc. and its wholly owned subsidiary, Case Farms
of North Carolina, Inc. (collectively, Case). The suit, filed in the
Burke County, North Carolina, General Court of Justice, Superior Court
Division arises from the September 29, 1995 acquisition by WLR Foods,
Inc. of the chicken processing plant, live production assets, and
inventory of New Hope (the Acquisition). See Forms 8-K filed by WLR
Foods, Inc. with the Securities Exchange Commission on September 5,
1995 and October 10, 1995.
The Complaint maintains that the Acquisition was in
violation of a right of first refusal previously granted by New Hope
to Case. The suit also maintains that the Acquisition was in
violation of a letter of intent between New Hope and Case, and in
contravention of certain oral promises and representations claimed to
have been made by New Hope. In addition to breach of contract and
other claims against New Hope, the claims against WLR include tortious
interference with contract, tortious interference with prospective
advantage, and unfair and deceptive trade practices under North
Carolina law. The Complaint seeks monetary damages of an unspecified
amount from WLR and New Hope, some of which are requested to be
trebled pursuant to North Carolina law.
The Company intends to defend vigorously against the claims
made by Case, and does not expect the litigation to have a material
effect on the Company or its financial statements. Moreover, in
connection with the Acquisition, the Company entered into an
Indemnification Agreement with New Hope, secured by a Stock Escrow
Agreement, pursuant to which New Hope is obligated to defend WLR, and
to indemnify WLR for certain liabilities arising from the Acquisition,
specifically including liabilities arising from this litigation.
13
<PAGE>
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
Exhibit 27 Financial Data Schedule
14
<PAGE>
SIGNATURE
Pursuant to the requirements of Section 13 or 15(d) 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.
Date:___5/13/96___ By: ____James L. Keeler______________________
Its President & Chief Executive Officer
Date:__5/13/96____ ___Daniel R. Detamore-Hunsberger________
Assistant Treasurer
15
<PAGE>
EXHIBIT INDEX
Exhibit No. Description Page
27 Financial Data Schedule 17
16
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1000
<CURRENCY> US DOLLARS
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUN-29-1996
<PERIOD-START> DEC-31-1995
<PERIOD-END> MAR-30-1996
<EXCHANGE-RATE> 1
<CASH> 336
<SECURITIES> 0
<RECEIVABLES> 59,961
<ALLOWANCES> 616
<INVENTORY> 166,328
<CURRENT-ASSETS> 233,314
<PP&E> 353,676
<DEPRECIATION> 171,639
<TOTAL-ASSETS> 422,229
<CURRENT-LIABILITIES> 89,036
<BONDS> 143,617
0
0
<COMMON> 78,759
<OTHER-SE> 105,427
<TOTAL-LIABILITY-AND-EQUITY> 422,229
<SALES> 216,263
<TOTAL-REVENUES> 216,263
<CGS> 203,543
<TOTAL-COSTS> 203,543
<OTHER-EXPENSES> 21,994
<LOSS-PROVISION> 284
<INTEREST-EXPENSE> 2,271
<INCOME-PRETAX> (11,480)
<INCOME-TAX> (4,419)
<INCOME-CONTINUING> (7,062)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (7,062)
<EPS-PRIMARY> (.40)
<EPS-DILUTED> (.40)
</TABLE>
