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Press Release
NORTHLAND CRANBERRIES, INC. REPORTS THIRD-QUARTER PROFIT
7/15/02 -- Wisconsin Rapids, WI -- Northland Cranberries, Inc. (OTC: NRCNA), manufacturer of Northland brand 100% juice cranberry blends and Seneca brand fruit juice products, today reported fiscal 2002 third-quarter financial results for the period ended May 31, 2002. The company reported net income for the quarter of $1.94 million, or 2 cents per diluted share, compared to a fiscal 2001 third-quarter net loss of ($2.41) million, or ($0.47) per diluted share. (All per-share information has been restated to reflect the one-for-four reverse stock split effective at the close of business on November 5, 2001.) Net revenues for the three-month period were $24.23 million, compared with $27.33 million in the third quarter of fiscal 2001. Net revenues for the nine months ended May 31, 2002, were $78.52 million, compared with $98.45 million in fiscal 2001. The revenue decreases were primarily due to reduced sales of Northland and Seneca branded products and the June 2001 sale of the company’s cranberry sauce business and a manufacturing facility, which generated co-packing revenue. These net revenue decreases were partly offset by increased sales of cranberry concentrate and reduced trade spending and consumer coupons.
For the first nine months of fiscal 2002,
net income was $53.85 million, or $0.69 per diluted share, compared with
a loss of ($3.57) million, or ($0.70) per diluted share, in the first
nine months of fiscal 2001. Net income in fiscal 2002 included a $50.5
million extraordinary gain, net of income taxes, or $0.65 per diluted
share, on forgiveness of indebtedness resulting from
John Swendrowski, Northland’s Chairman and Chief Executive Officer, said, “We are encouraged by the second consecutive quarter of profitability since our financial restructuring in November. Our focus for fiscal 2002 has been on improving our operations and reducing debt through a balanced marketing approach, with an emphasis on profitability as opposed to revenue growth. We continue to focus our efforts on regaining lost market share and we are targeting strategic parts of the United States to increase distribution. Specifically for the Northland brand of 100% juice cranberry blends, we are continuing to advertise on national television with the message to consumers that only Northland delivers the healthy goodness of 27% cranberry in each and every great flavor.” Northland is a vertically integrated grower, handler, processor and marketer of cranberries and value-added cranberry products. The company processes and sells Northland brand 100% juice cranberry blends, Seneca brand juice products, Northland brand fresh cranberries and other cranberry products through retail supermarkets and other distribution channels. Northland also sells cranberry and other fruit concentrates to industrial customers who manufacture juice products. Northland is the only publicly-owned, regularly-traded cranberry company in the United States, with shares traded on the Over-the-Counter Bulletin Board under the listing symbol NRCNA. SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS The Company makes certain “forward-looking statements” in this press release, such as statements about future plans, goals and other events which have not yet occurred. These forward-looking statements are intended to qualify for the safe harbors from liability provided by the Private Securities Litigation Reform Act of 1995. These forward-looking statements can generally be identified because they include words such as the Company “believes,” “anticipates,” “expects” or words of similar import. Forward-looking statements include, among others, statements about actions by the Company’s competitors, sufficiency of the Company’s working capital, potential operational improvements and efforts to return to profitability, sales and marketing strategies, expected levels of trade and marketing spending, anticipated market share of the Company’s branded products, expected levels of interest expense and net revenues, and disposition of significant litigation. These forward-looking statements involve risks and uncertainties and the actual results could differ materially from those discussed in the forward-looking statements. These risks and uncertainties include, without limitation, risks associated with (i) the Company’s ability to reinvigorate its Northland and Seneca brand names, regain lost distribution capabilities and branded products market share and generate increased levels of branded product sales; (ii) the level of cranberry inventory held by industry participants; (iii) the development, market share growth and consumer acceptance of the Company’s branded juice products; (iv) the disposition of certain litigation related to the sale of the net assets of the Company’s private label juice business; (v) the impact of a marketing order or lack of a marketing order of the United States Department of Agriculture relative to the 2002 crop year, as well as any potential cranberry purchase program adopted by the United States Congress; (vi) agricultural factors affecting the Company’s crop and the crop of other North American growers; and (vii) the Company’s ability to comply with the terms and conditions of, and to satisfy its responsibilities under, its new credit facilities and other debt agreements. You should consider these risks and factors and the impact they may have when you evaluate these forward-looking statements. These statements are based only on the Company’s knowledge and expectations on the date of this press release. The Company disclaims any duty to update these statements or other information in this press release based on future events or circumstances.
(Condensed Consolidated Statements of Operations Follow)
NORTHLAND CRANBERRIES, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (DOLLARS IN THOUSANDS, EXCEPT SHARE DATA) (Unaudited)
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