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Syracuse, New York
August 20, 2001
Agway, Inc. today reported sales and revenues for the year
ended June 30, 2001 were $1.55 billion, an increase of $190
million compared to sales and revenues for the prior year. The
14 percent increase in sales and revenues was primarily due to a
combination of higher product prices and volumes in the energy
business.
The Cooperative reported a net loss of $8.9 million, compared to
a net loss of $9.4 million in fiscal 2000 which included the
discontinued operations of the Cooperative's Retail business.
Agway reported strong earnings in fiscal 2001 for Agway Energy
Products, Agway Insurance and Telmark, Agway's lease financing
subsidiary. The net loss in fiscal 2001 was primarily due to
operating losses in the Cooperative's Agriculture segment,
including anticipated costs involved in the previously announced
reconfiguring of the Agriculture segment, and the costs for
closing an underperforming produce operation in Texas.
In December 2000, Agway announced a plan to realign the
Agriculture segment with the continuing concentration of farming
in the northeastern United States and to convert the segment's
historic operating losses to profits by fiscal 2003. The plan
called for the formation of a Feed Division and an Agronomy
Division, which has been completed. The plan also involved the
conversion of some Agway-owned facilities to dealer operations,
as well as the sale or closing of some Agway-owned facilities.
Fiscal 2001 costs associated with returning this business
segment to profitability included such items as new information
systems, new procurement systems, inventory liquidation and
severance pay. As stated in the December 2000 announcement, "we
expect continued losses from the Agriculture segment's
operations, potentially at higher levels in fiscal 2001 than in
fiscal 2000, due in part to the costs associated with the plan.
In fiscal 2002, while still in the transition phase, the
Agriculture segment's operating losses in total will likely
continue, but we expect substantial improvement in the
Agriculture segment's operating results to begin."
"This has been a challenging year for Agway and most of the
agriculture industry," said Donald P. Cardarelli, Agway
president and CEO. "Here in the Northeast we have seen a
dramatic shift in who is farming, where farming is taking place
and what products farmers want. This change has had a dramatic
impact on Agway's feed and agronomy locations, many of which
were designed and built for a much different form of farming
than what we have today."
"While we are disappointed with our overall financial results,
we are pleased with the strong performances in several of our
businesses and we are pleased with what we have been able to
achieve in a short period of time in realigning our Agriculture
segment with the rapidly changing Northeast farm marketplace,"
said Cardarelli. "The changes we are making in our Agriculture
segment provide a solid foundation for achieving improved
financial results for the Cooperative in the years ahead."
"Right now, we are focused on completing the implementation of
the Agriculture Plan and increasing our equity levels by
improving earnings in each of our businesses and reducing debt,"
the Agway CEO said. "As we work towards strengthening the
Cooperative's balance sheet, we will continue to look for new
ways to serve farmers through technology, knowledge, new
partnerships and new distribution methods. We are committed to
farming and we are committed to continuing as a leader in the
Northeast agriculture marketplace."
The Cooperative also reported that, during fiscal 2001, Agway
and Telmark paid over $37 million in dividends and interest to
their investors, principally Agway farmer-members, employees and
retirees.
Agway will hold its 2001 Annual Meeting on October 22 at its
headquarters building in DeWitt, NY. At the meeting, eight
individuals, nominated earlier in the year, are expected to be
officially elected to the Agway Board of Directors. The director
nominees include: Stanley J. Burkholder, Chambersburg, PA;
Donald P. Cardarelli, Syracuse, NY; John R. Cook, Boston, MA;
Andrew J. Gilbert, Potsdam, NY; Thomas G. Hardy, New York, NY;
John Ligo, Grove City, PA; Matt Rogers, Clinton, ME; and William
W. Young, Clifton Springs, NY.
Agway, Inc. is an agricultural cooperative owned by 69,000
Northeast farmer-members. The Cooperative is headquartered in
DeWitt, NY. Visit Agway's website at
http://www.agway.com.
Company news release
N3734
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