SUGAR LAND, Texas--(BUSINESS WIRE)--Imperial Sugar Company (NASDAQ:IPSU) today reported a net loss for the fiscal first quarter ended December 31, 2010 of $8.9 million, or $0.75 per diluted share. Results for the same period of fiscal 2009, which included $278.5 million of pre-tax gains associated with settlement of insurance claims related to the February 2008 Port Wentworth accident, was net income of $178.1 million, or $14.84 per share. Additionally, the prior year’s results included $18.9 million of mark-to-market gains on raw sugar derivatives intended to hedge raw sugar purchases in subsequent periods. Absent the insurance and derivative gains the prior year’s results would have been a net loss of $12.2 million, or $1.03 per share.
Net sales for the quarter ended December 31, 2010 increased to $227.4 million compared to $173.8 million for the same period in the prior year. The increased revenues were due to 11% higher sales volumes and 18% higher refined prices. Gross margin as a percent of sales was a negative 1.6% in the current quarter compared to 7.1% last year, including 10.9 % attributable to the mark-to-market derivative gain. Current quarter results include a $2.9 million severance charge related primarily to the transition of refining operations in Louisiana.
“A number of important milestones were reached during the past few months as we continue to implement our strategic vision and position the company for the future,” stated John Sheptor, president and CEO. “We completed the necessary improvements to the Gramercy refinery, and turned over operational control of the facility to Louisiana Sugar Refining, LLC, our one-third owned joint venture, on the first of January. LSR re-initiated refining operations in the existing refinery in early February. Construction of the new LSR refinery remains on track for a summer 2011 start-up. “
Sheptor continued, “We are encouraged by the early results of the retail consumer trial initiated in November of SteviacaneTM, the first stevia-sucrose product developed by our 50% owned Natural Sweet Ventures. Consumer feedback has been positive and we are planning a wider retail distribution beginning later this year.”
Domestic raw sugar prices increased rapidly during the past 18 months, in part in response to significantly higher world raw sugar prices. Domestic raw sugar costs were 12.6% higher for the first fiscal quarter compared to the same period last year. Selling, general and administrative costs were 27% lower in the current quarter due to lower compensation and legal costs.
“The process modifications implemented in the Port Wentworth refinery at the beginning of October produced immediate improvements in refinery results,” added Sheptor. “The refined silo repairs were completed by the contractor in mid-January and we anticipate placing the silos back in service in early February. We are anxious to continue the ramp-up in production in Port Wentworth once the silos are on line.”
The Company reported that at December 31, 2010, it had cash balances of $6.7 million and available, undrawn revolving credit capacity of $46 million, after deducting $48 million of borrowings and $6 million of letters of credit outstanding under that facility.
Capital expenditures during the first quarter of fiscal 2011 were $10.1 million, including spending to complete the improvements to the Gramercy, Louisiana refinery prior to contribution to LSR.
Conference Call Details
Company officials will conduct a conference call, starting at 11:00 a.m. Eastern, Monday, February 7, 2011. Imperial Sugar President and CEO John Sheptor and Senior Vice President and CFO Hal Mechler, will discuss the company’s operating results for its fiscal first quarter ended December 31, 2010, its current financial position and its business strategies.
Participants wishing to listen and participate in a brief question-and-answer session after the presentation can dial 1-800-901-5218 and enter the Participant Passcode: 80397511. The conference call can also be accessed via live audio webcast by visiting Imperial Sugar’s web site at http://www.imperialsugarcompany.com/Investor-Relations/Investor-Home-1072.html and clicking on the “Q1 2011 Imperial Sugar Earnings Conference Call” icon under “Investor Relations”.
For those who are unable to listen to the call during its live broadcast, a replay of the entire presentation will be available on the company’s web site beginning one hour following the conclusion of the call. In addition to the webcast replay, a telephone replay will also be available beginning one hour following the conclusion of the call that can be accessed by dialing 1-888-286-8010 and entering the Passcode: 21013367. Both replays will be available through March 7, 2011.
Please note: Participants planning to listen to the call via the Internet may need to download Windows Media Player(R) to hear the call if this feature has not been previously installed on their computers.
Imperial Sugar Company is one of the largest processors and marketers of refined sugar in the United States to food manufacturers, retail grocers and foodservice distributors. The Company markets products nationally under the Imperial®, Dixie Crystals® and Holly® brands. For more information about Imperial Sugar, visit www.imperialsugarcompany.com and www.iscnewsroom.com.
Statements regarding future market prices and margins, future expenses and liabilities arising from the Port Wentworth refinery incident, refinery construction costs, timelines and operational dates, future costs and liabilities arising from the Louisiana Sugar Refining LLC venture, future import and export levels, future government and legislative action, future environmental regulatory and compliance costs, future operating results, future availability and cost of raw sugar, our liquidity and ability to finance our operations and capital investment programs, operating efficiencies, results of future investments and initiatives, future cost savings, future product innovations, future energy costs, future pension plan contributions and other statements that are not historical facts contained in this release are forward-looking statements that involve certain risks, uncertainties and assumptions. These risks, uncertainties and assumptions include, but are not limited to, market factors, farm and trade policy, unforeseen engineering and equipment delays, our ability to obtain financing and the terms of any such financing, our ability to realize planned cost savings and other improvements, the available supply of sugar, energy costs, the effect of weather and economic conditions, results of actuarial assumptions, actual or threatened acts of terrorism or armed hostilities, legislative, administrative and judicial actions and other factors detailed in the Company’s filings with the Securities and Exchange Commission. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual outcomes may vary materially from those indicated.
|IMPERIAL SUGAR COMPANY AND SUBSIDIARIES|
|CONSOLIDATED STATEMENTS OF OPERATIONS|
|(In Thousands, Except Per Share Data)|
|Three Months Ended December 31,|
|Business Interruption Insurance Recovery||-||84,677|
|Cost of Sales||(231,081||)||(161,379||)|
|Selling, General and Administrative Expense||(9,649||)||(13,241||)|
|Insurance Recoveries Recognized||-||193,796|
|Operating Income (Loss)||(13,341||)||277,632|
|Other Income (Loss), Net||(685||)||986|
|Income (Loss) Before Income Taxes||(14,376||)||278,329|
|(Provision) Credit for Income Taxes||5,461||(100,213||)|
|Net Income (Loss)||$||(8,915||)||$||178,116|
|Per Share of Common Stock:|
|Net Income (Loss)||$||(0.75||)||$||15.11|
|Per Share of Common Stock:|
|Net Income (Loss)||$||(0.75||)||$||14.84|
|IMPERIAL SUGAR COMPANY AND SUBSIDIARIES|
|CONDENSED CONSOLIDATED BALANCE SHEETS|
|(In Thousands of Dollars)|
|December 31,||September 30,|
|Cash and Temporary Investments||$||6,709||$||22,750|
|Accounts Receivable, Net||40,060||55,093|
|Other Current Assets||28,030||40,949|
|Property, Plant & Equipment, Net||282,363||280,211|
|Deferred Income Taxes, Net||11,762||10,624|
|Accounts Payable, Raw Sugar||$||20,460||$||81,673|
|Accounts Payable, Trade||26,671||28,326|
|Borrowing under Revolving Credit Line||48,000||22,000|
|Deferred Income Taxes, Net||11,427||11,427|
|Other Current Liabilities||47,664||54,189|
|Shares of Common Stock Outstanding||12,125,214||12,145,098|