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Imperial Sugar Company Announces First Fiscal Quarter Results and Declares Quarterly Dividend
SUGAR LAND, Texas-(Business Wire)-January 29, 2008 - Imperial Sugar Company (NASDAQ:IPSU) today announced financial results for its fiscal 2008 first quarter ended December 31, 2007. Imperial reported net income in the current quarter of $12.3 million ($1.04 per diluted share), compared to net income for the prior year's first fiscal quarter of $15.7 million ($1.37 per diluted share). The current quarter pre-tax income of $16.3 million, which compares to last year's pre-tax income of $24.5 million, includes $11.2 million from a distribution received from a limited partnership investment, which sold its principal asset. The Board also declared a regular quarterly dividend of $0.07 per share, payable February 22, 2008 to shareholders of record February 12, 2008.
For the quarter ended December 31, 2007, net sales were $215.5 million, compared to $227.0 million in the three months ended December 31, 2006, a decrease of 5.1% driven primarily by 11.4% lower domestic sales prices. Pricing pressure was experienced across all market channels, resulting from prospects of an oversupplied market from a historically large beet crop.
Gross margin as a percentage of sales for the three months ended December 31, 2007 decreased to 7.9% from 17.1% in the prior year quarter. Margin performance was the result of lower sugar sales prices coupled with higher freight and manufacturing costs, offset in part by a small decrease in raw sugar and energy costs.
Selling, general and administrative expense decreased $2.2 million for the quarter ended December 31, 2007, compared to the same period for the prior fiscal period.
Operating income was $3.6 million for the three months ended December 31, 2007, compared to $23.5 million for the three months ended December 31, 2006.
Commenting on these results, Robert A. Peiser, Imperial's president and ceo, stated that "We are reasonably pleased with our operating results for our first fiscal quarter given the challenging environment that is present within the cyclical domestic sugar market. In addition, it is obvious that the challenging earnings comparison is in part due to the higher than normal market prices for refined sugar present in the last two years from the after effects of weather-related events. Fortunately, Imperial is well positioned both operationally and financially to withstand this down cycle. We are continuing to make investments in our refineries and to our systems to improve operating efficiencies and enhance customer service capabilities and metrics.
"Our joint venture with the Santos group to market sugar in Mexico which we initiated during the first fiscal quarter is an important initiative for Imperial in the expanded NAFTA market. The venture has filled key staff positions, including a General Manager and a Sales Director, and I am pleased with the amount of Santos sugar production that the venture has sold in its first six weeks of operations. We look forward to continuing the development of this business and working with our partners to capitalize on opportunities that develop as these new markets evolve."
About Imperial Sugar
As previously announced, Company officials will discuss Imperial Sugar's operating results for the quarter ended December 31, 2007, its current financial position and business strategies on a call and webcast to be held at 3:30 p.m. EST on January 29, 2008. Participants wishing to listen and participate in a brief question-and-answer session after the presentation can dial 1-866-713-8567 and enter the Participant Passcode: 49490632. The conference call can also be accessed via live audio webcast by visiting Imperial Sugar's web site at http://www.imperialsugar.com and clicking on the "Q1 2008 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: 44090924. Both replays will be available through February 29, 2008.
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(R), Dixie Crystals(R) and Holly(R) brands. For more information about Imperial Sugar, visit www.imperialsugar.com.
Statements regarding future market prices and margins, future import and export levels, future government and legislative action, future operating results, future availability of raw sugar, operating efficiencies, future investments and initiatives, future cost savings, future product innovations, future energy costs, our liquidity and ability to finance our operations, future pension payments and other statements that are not historical facts contained in this release are forward-looking statements that involve certain risks, uncertainties and assumptions. These include, but are not limited to, market factors, farm and trade policy, 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 Securities and Exchange Commission filings. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual outcomes may vary materially from those indicated. -0- *T IMPERIAL SUGAR COMPANY AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (In Thousands, Except Per Share Data) (Unaudited) Three Months Ended December 31, 2007 2006 ——————— ——————— Net Sales $ 215,505 $ 226,998 Cost of Sales (198,502) (188,229) ———————- ———————- Gross Margin 17,003 38,769 Selling, General and Administrative Expense (9,884) (12,065) Depreciation (3,521) (3,252) ———————- ———————- Operating Income 3,598 23,452 Interest Expense (436) (480) Interest Income 918 874 Other Income (Expense), Net 12,269 630 ———————- ———————- Income Before Income Taxes 16,349 24,476 Provision for Income Taxes (4,086) (8,776) ———————- ———————- Net Income $ 12,263 $ 15,700 =============== =============== Earnings Per Share of Common Stock: Basic $ 1.06 $ 1.41 =============== =============== Diluted $ 1.04 $ 1.37 =============== =============== *T -0- *T IMPERIAL SUGAR COMPANY AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (In Thousands of Dollars) (Unaudited) December 31, September 30, 2007 2007 ————— ————— Cash and Cash Equivalents $ 95,173 $ 74,229 Marketable Securities 10,311 20,693 Accounts Receivable, Net 32,351 49,409 Inventory 92,306 100,120 Other Current Assets 4,514 7,342 —————— ——————- Current Assets 234,655 251,793 Property, Plant & Equipment, Net 86,892 88,649 Deferred Income Taxes, Net 10,467 13,226 Other Assets 7,314 6,397 —————— ——————- Total $ 339,328 $ 360,065 ============ ============= Accounts Payable, Trade $ 39,756 $ 69,057 Dividends Payable 29,939 400 Other Current Liabilities 8,631 20,591 —————— ——————- Current Liabilities 78,326 90,048 Long-Term Debt 1,500 1,500 Other Liabilities 74,181 68,426 Shareholders' Equity 185,321 200,091 —————— ——————- Total $ 339,328 $ 360,065 ============ ============= Shares of Common Stock Outstanding 11,816,875 11,808,743 *T
