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PFG Records 3Q Sales, Earnings Growth



Sales in the broadline distribution segment increased approximately 7.5% in the third quarter compared with the prior year period, said Bob Sledd, chairman and ceo.

Consolidated net sales from continuing operations in the third quarter increased to approximately $1.4 billion, a 7.3% increase compared to the prior year period. Inflation was nominal in the third quarter. Net earnings from continuing operations amounted to approximately $11.9 million compared to approximately $10.8 million in the year earlier period.

Net earnings per share from continuing operations were 28 cents per share diluted, compared to 23 cents per share diluted in the prior year period. The company's pre-tax results were reduced by approximately $2.4 million, or 3 cents per share diluted, during the quarter as a result of Hurricane Katrina. Net loss per share from discontinued operations was 1 cent per share diluted as a result of changes in the effective tax rate, estimated deferred taxes and the related gain associated with the sale of Fresh Express.

Consolidated net sales from continuing operations for the first nine months of 2005 were approximately $4.3 billion, up 12% from approximately $3.8 billion in the year earlier period. Net earnings from continuing operations in the same period increased 27.1% to approximately $28.8 million, compared with approximately $22.7 million in the prior year period. Net earnings per share from continuing operations increased to 63 cents per share diluted, compared to 49 cents per share diluted in the same period last year.

Acknowledging the negative impact of this season's hurricanes, Sledd said PFG recorded "solid" internal sales and net earnings growth during the third quarter due to the employees' "tremendous level of dedication to our customers and to on-going rebuilding efforts in the community."

He explained that the company's previously disclosed third-quarter rollout of new multi-unit business in the broadline segment was delayed "somewhat" as a result of Hurricane Katrina, but added that is expected to be completed during the fourth quarter.

"Also during the fourth quarter, we expect to begin exiting approximately $115 million of annualized multi-unit sales in the broadline segment. The vast majority of this business is a result of our Company's initiative to rationalize business that does not meet our profit objectives. We remain optimistic about driving future sales growth and profitability in our broadline segment as we execute our initiatives," Sledd said.

Sledd went on to report that sales in the customized distribution segment increased approximately 7% in the third quarter compared with, due to growth with existing customers. However, he noted, that start-up costs associated with the opening of new distribution facilities impacted operating margins slighting in the quarter.

Start up costs related to the opening of our new California facility, as well as the transfer of business between our facilities to gain efficiencies, are expected to impact customized operating margins in the fourth quarter. These initiatives will help set the stage for continued growth in the future," he said.

"We expect to finish the year on a strong note with solid results in the fourth quarter. We anticipate the residual impact of Hurricanes Katrina and Wilma to continue to affect the fourth quarter earnings somewhat. Based on current trends in our business, our expectations for operating profit from continuing operations, net of the impact of the recent hurricanes, are in the range of $69.5 to $71.0 million, a solid gain over the prior year," he said. "For the remainder of the year, we will continue to focus on our core strategies to drive continued sales and earnings growth and remain optimistic about the balance of 2005 and our prospects for the future."

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