PORK Premium Std Farms (MM)

KANSAS CITY, Mo, Nov. 4 /PRNewswire-FirstCall/ -- Premium Standard Farms, Inc. (NASDAQ:PORK) (PSF) announced that the Company has early adopted Statement of Financial Accounting Standards No. 123 (revised 2004)("FAS123R") effective as of the beginning of the third fiscal 2006 quarter (September 25, 2005). The Company will begin recording compensation expense under FAS123R in the third quarter of fiscal 2006 rather than in the first quarter of fiscal 2007. The Company has decided to early adopt FAS123R to provide investors with increased transparency of its equity compensation. The adoption of FAS123R would enable the Company to modify its 1999 Equity Incentive Plan to allow the Company to settle fully vested stock options with Company stock in the amount equal to the intrinsic value (the spread between the market price and the option strike price). This settlement could be done without incurring compensation expense, reducing the total number of Company shares that would have been issued and, as a result, reducing the dilution to existing shareholders. There would be no change in the value of the options with this modification. The non-cash impact of early adoption of FAS123R on the overall existing stock options and non-vested shares of common stock granted under the new 2005 Equity Incentive Plan will be approximately $250,000 in the final two quarters of fiscal 2006. The Company also advised that lockup agreements that prohibit the sale of shares of PSF common stock for four executives will expire on November 7, 2005. The 145-day lockup agreement, which was disclosed in the Company's final prospectus dated June 13, 2005, for the initial public offering of the Company's stock, allows four executives to sell shares of common stock acquired through exercise of stock options in an amount sufficient to fund expected federal and state tax liabilities resulting from option exercises. The executives were provided a shortened lockup period because their options granted under the 1999 Equity Incentive Plan were set to expire in December 2005. PSF is one of the largest vertically integrated providers of pork products in the United States, producing consistent, high quality pork products for the retail, wholesale, foodservice, export, and further processor markets. PSF is the nation's second largest pork producer and sixth largest pork processor, with approximately 4,100 employees working at farms and processing facilities in Missouri, North Carolina, and Texas. This news release contains "forward-looking statements" within the meaning of the federal securities laws. Naturally, all forward-looking statements involve risk and uncertainty and actual results or events could be materially different. Although we believe that our expectations are based on reasonable assumptions, we can give no assurance that our goals will be achieved. Important factors that could cause actual results to differ include: economic conditions generally and in our principal markets; competitive practices and consolidation in the pork production and processing industries; the impact of current and future laws, government regulations and fiscal policies affecting our industry and operations, including environmental laws and regulations, trade embargoes and tariffs; domestic and international transportation disruptions; food safety; the availability of additional capital to fund future commitments and expansion and the cost and terms of financing; outbreaks of disease in our herds; feed ingredient costs; fluctuations in live hog and wholesale pork prices; customer demands and preferences; and the occurrence of natural disasters and other occurrences beyond our control. In light of these risks, uncertainties and assumptions, the forward-looking events discussed might not occur. DATASOURCE: Premium Standard Farms, Inc. CONTACT: Steve Lightstone of Premium Standard Farms, Inc., +1-816-472-7675 Web site: http://www.psfarms.com/

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