Net sales for the first quarter 2008 were $53.2 million, an increase of $4.6 million, or 9.4 percent over the prior fiscal year. Pounds sold in the first quarter were 78.7 million, a decrease of 28.5 million, or 26.6 percent less than the same period a year ago. The decrease is due to a significant reduction of the Millersburg, Ohio facility egg supply (20.3 million pounds), which resulted in an impairment charge in the fiscal year ended Aug. 31, 2007, the company says.
Additional causes for the decline are a decrease in pounds available to sell from production sourced from the company’s own flocks as bird numbers were reduced to comply with increased space requirements under its animal care programs (5.4 million pounds), a decrease in sales pounds as certain low margin businesses were exited (2.5 million pounds), and a net reduction of volume in all other product sales (0.3 million pounds).
The average selling price per pound sold increased from 43.2 cents to 67.3 cents, or a 55.8 percent increase, as a result of higher selling prices executed in an environment of sharply increased liquid egg markets, as well as an improved product mix, Golden Oval says.
Costs of goods sold in the first quarter was 10.6% higher than a year earlier due in part to increases of feed, purchased eggs and purchased liquid eggs, offset by reductions in operating costs in all locations still operating, and reduced operating levels in Millersburg.