Meat + Poultry - March 2004 - 14

Smithfield Foods makes international investments
Smithfield Foods, Inc., Smithfield, Va., has purchased approximately
8 million shares of Campofrío Alimentación, S.A., for approximately
$87.8 million. The shares represent 15.2 percent of Campofrío's outstanding share capital.
Campofrío is the largest meat processor in Spain and one of
Europe's largest diversified meat processors, with estimated annual sales of about $1.25 billion. Primarily a processor of pork and
further processed pork products, Campofrío is the market leader in
Spain and has operations in Portugal, Russia, Poland, Romania and
France, and exports to over 40 countries.
"This transaction provides a strategic partner to develop synergies
with our operations in France and Poland to exploit many attractive
opportunities in Europe and Eastern Europe," said Joseph Luter, III,
Smithfield's chairman and C.E.O. "As there is limited overlap among
our operations, this opens new markets to Smithfield."

The company also announced its acquisition of two meat companies in the U.K., the Norwich Food Co. Ltd., and Ridpath Pek. The
newly acquired companies have been combined to form Smithfield
Foods Ltd., expected to generate 2004 revenues of $65 million.
Terms of the transaction were not disclosed.
The new venture will provide retail and foodservice customers
in the U.K. with a full line of fresh meats and further processed
chilled and canned meat products developed for the U.K. market.
"The establishment of Smithfield Foods Ltd. continues our strategy
of participating in attractive markets through dedicated, resident
companies with strong, local management and the resources to be
successful," said Robert Sharpe II, president of Smithfield's international operations.
Smithfield Foods Ltd. will be led by John Alton Jones, C.E.O.,
who was previously co-managing director of Norwich Foods.

Cagle's completes complex sale and restructures
Cagle's, Inc., Atlanta, completed the sale of its Perry, Ga., complex
to Perdue Farms, Inc., Salisbury, Md., on Jan. 30, 2004. As a result of
the sale, the company has consolidated its production capacity in its
Collinsville, Ala., and Pine Mountain Valley, Ga., plants.
In addition, Cagle's is restructuring its management team. This
restructuring will result in the elimination of several corporate positions and the departure of several senior executives. Jerry Gattis, president and C.O.O.; Ken Barkley, senior vice president of finance, treasurer and C.F.O.; and John Bruno, senior vice president

of sales and marketing, are leaving the company.
"I appreciate the years of dedicated service the departing senior
executives have provided to our customers and employees and I
wish them well," said J. Douglas Cagle, chairman and C.E.O. "The
sale of our Perry complex was necessitated to better balance our
sales mix of value-added product with our production capacity. By
consolidating our capacity into the two remaining plants and reducing the corporate overhead function, Cagle's will be a much more efficient and consistently profitable company."

Bob Evans benefits from third
quarter boost

P.S.F. suffers third quarter loss

Bob Evans Farms, Inc., Columbus, Ohio, announced financial results
for the fiscal third quarter and nine months ended Jan. 23, 2004. Total net sales for the quarter were $291.4 million, up 7 percent from
$271.3 million in this past year's third quarter. Net income was $15.6
million compared with $16.7 million. For the nine-month period, net
sales totaled $884.1 million, a 7 percent increase from the first nine
months of fiscal 2003.
The company's food products division benefited from continued
sales growth and a decline in raw material costs from the second
quarter level. Pounds sold from comparable products (principally
sausage and refrigerated potatoes) increased 7 percent from a year
ago. The segment's sales of $58.2 million were up 9 percent.
Hog costs in the company's sausage business averaged $35 cwt. for
the quarter, compared with $27 cwt. a year ago, but below the secondquarter average of $38 cwt. The segment's operating income was $6.6
million, a 9 percent increase from this past year's third quarter.
"The performance of the food products segment exceeded our expectations for the quarter," said Stewart Owens, chairman and C.E.O.
"Sales growth is benefiting from the continued strength of our core
sausage products, refrigerated potato products and our reformulated
Bob Evans Express fully cooked sausage links."
14

MEAT&POULTRY

P.S.F. Group Holdings, Inc., Kansas City, Mo., the parent company of
Premium Standard Farms, Inc., incurred a net loss of $0.8 million in
the third quarter of fiscal 2004 compared to a net loss of $12.3 million in the same period this past year.
"Even with the industry having higher levels of domestic hog
production and significant imports of
Canadian hogs, pork prices in the third
quarter averaged well above this past
year's level due to higher demand for
pork," said John Meyer, C.E.O. "However, even with good performance in
pork processing during the quarter,
live hog prices were lower than costs
to produce, resulting in the slight loss
for the quarter."
Net loss in the first nine months of fiscal 2004 was $1.1 million
compared with a net loss of $27 million in the same period this
past year.
Net sales for the quarter totaled $199.8 million, up 29.6 percent
from $154.1 million in the third quarter of fiscal 2003. Sales for the
first nine months of fiscal 2004 were $549.2 million, compared to
$448.9 million, an increase of 22.3 percent.

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MARCH 2004

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Meat + Poultry - March 2004

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