HOUSTON, March 8, 2012 /PRNewswire/ -- Omega Protein
Corporation (NYSE: OME), a nutritional ingredient company and the
nation's leading vertically integrated producer of omega-3 fish oil
and specialty fish meal products, today reported financial results
for the fourth quarter and full year ended December 31, 2011.
Fourth Quarter and Full Year 2011 Highlights:
- Revenues: $62.8 million for the quarter, a
46% increase over the 2010 fourth quarter, and $235.2 million for the year, a 40% increase over
2010
- Gross profit margin: 17.2% for the quarter
and 23.2% for the year
- Net income: $0.6
million ($0.03 per diluted
share) for the quarter and $34.2
million ($1.71 per diluted
share) for the year
- Production: The Company experienced its
highest overall production since 2003 and highest fish catch since
2002
Fourth Quarter 2011 Results
Omega Protein fourth quarter of 2011 revenues increased 46% to
$62.8 million from $43.1 million in the same period last year.
The composition of revenue by nutritional product line was
76% fish meal, 15% fish oil, 5% specialty nutraceutical
ingredients, and 4% fish solubles and other. Fish meal sales
prices decreased 27% compared to the fourth quarter of 2010.
Fish oil sales prices increased 28% compared to the fourth
quarter of 2010.
The Company reported gross profit of $10.8 million, or 17.2% as a percentage of
revenues, for the fourth quarter of 2011, versus gross profit of
$19.1 million, or 44.2% as a
percentage of revenues, for the fourth quarter of 2010. The
decrease in gross profit was due in part to decreased fish meal
sales prices and a 41% decrease in fish oil sales volumes,
partially offset by increased fish oil sales prices and a 120%
increase in fish meal sales volumes. Gross profit was also
adversely affected by low fish oil yields during the 2011 fishing
season, which offset the positive impact of an increased fish catch
on unit costs. In addition, on a comparable basis gross
profit as a percentage of revenues for the fourth quarter of 2010
benefited significantly from greater than anticipated inventory
production after September 30, 2010.
As a result, standard cost for 2010 inventory, for which
sales commenced largely in the third quarter of 2010, was decreased
and all previous sales of 2010 inventory production were adjusted
during the fourth quarter ended December 31,
2010. The impact of the change in standard cost to the
fourth quarter of 2010 was estimated to be approximately
$4.0 million.
Selling, general and administrative expenses for the fourth
quarter of 2011 increased $3.6
million to $8.4 million
compared to $4.8 million in the
fourth quarter of 2010. The increase in selling, general and
administrative expenses is primarily due to the addition of Cyvex's
and InCon's combined related expenses of $0.9 million and $1.4
million of increased employee compensation related costs
including stock option and restricted stock compensation expense.
In addition, the Company expensed $0.6
million for two legal reserves and incurred $0.6 million of impairment and other
non-recurring charges during the fourth quarter of 2011.
The Company also recorded a net loss on disposal of assets of
$1.4 million for the fourth quarter
of 2011 primarily related to the write down in value to net
realizable value of the Company's experimental catamaran style
fishing vessel that the Company does not anticipate using in the
future.
Net income for the fourth quarter ended December 31, 2011 was $0.6
million ($0.03 per diluted
share) compared to $8.3 million
($0.44 per diluted share) for the
same period last year. The decrease in net income was a
result of the factors previously described, which were partially
offset by a tax credit and other tax adjustments. Excluding the
expensed legal reserves, impairment and non-recurring charges, loss
on disposal of assets, and assuming an effective tax rate of 35.0%,
net income for the fourth quarter of 2011 would have been
$1.8 million ($0.09 per diluted share).
"We are pleased with our ability to increase production and as a
result improve revenues year-over-year and report record annual net
income, despite experiencing lower fish oil yields and lower
inventories in 2011 due to fishing restrictions from the 2010
Deepwater Horizon oil spill," commented Bret Scholtes, Omega Protein's President and
Chief Executive Officer. "Although fish meal prices continue
to be pressured, in 2012 we are hopeful Omega Protein will
experience another strong fishing season and improved yields
compared to 2011."
Mr. Scholtes continued, "Our executive team remains focused on
better positioning Omega Protein long-term by improving our ability
to penetrate the more profitable human nutrition market with our
nutrient-rich fish oils. We continue to be pleased with our
2010 Cyvex acquisition and the integration of our recent InCon
acquisition into our human nutrition business. Going forward,
we expect to continue to build upon our existing nutritional
platform and further expand our human nutrition products business.
Our strong balance sheet provides us with the opportunity to fund
complementary acquisitions and investments as we move further into
the food and nutrition market, which we believe will increase
shareholder value."
Full Year 2011 Results
Revenues in 2011 increased 40% to $235.2
million compared to revenues of $167.7 million for the year ended December 31, 2010. The increase in revenues was
primarily due to higher sales volumes of 67% for the Company's fish
meal and higher sales prices of 26% for the Company's fish oil,
partially offset by decreased sales prices of 16% for the Company's
fish meal and decreased sales volumes of 9% for the Company's fish
oil. Considering fish meal, fish oil and fish solubles sales
activities in total, the Company experienced a $13.1 million decrease in revenues due to the
decrease in fish meal sales prices and a $65.6 million increase in revenue caused by
increased fish meal sales volumes, when comparing 2011 and 2010.
Average revenue per ton for fish meal, oil and solubles
declined from $1,034 in 2010 to
$982 in 2011. Cyvex, acquired
by the Company in December 2010,
contributed $13.1 million of revenue
and InCon, acquired by the Company in September 2011, generated $1.2 million of revenue.
The Company reported gross profit of $54.7 million, 23.2% as a percentage of revenues,
in 2011, versus gross profit of $49.2
million, 29.3% as a percentage of revenues, for the same
period last year. The decrease in gross profit as a
percentage of revenue was primarily due to the decrease in fish
meal sales prices as well as an increased cost per unit of
production in 2011 as compared to 2010.
Net income for the year ended December
31, 2011 was $34.2 million
($1.71 per diluted share) compared to
$18.3 million ($0.97 per diluted share) in 2010. The 2011
net income results include $26.2
million of pre-tax final settlements with the Gulf Coast
Claims Facility (GCCF) related to the 2010 Gulf of Mexico oil spill disaster and
$0.8 million for a pre-tax settlement
with the Company's former insurance broker.
Balance Sheet
The Company's balance sheet continues to strengthen with
stockholders equity of $196.6 million
and working capital of $110.0 million
as of December 31, 2011. The
Company's cash balance increased $31.6
million to $51.4 million as
compared to $19.8 million at
December 31, 2010. This
increase was primarily due to the sale of inventory, the final
settlement of the Company's claims relating to damages resulting
from the Gulf of Mexico oil spill
disaster with the GCCF and proceeds from the exercise of stock
options. This increase was partially offset by spending
related to the 2011 fishing season, capital spending, debt
payments, the acquisition of InCon and final payments related to
the acquisition of Cyvex.
Adjusted EBITDA to Net Income Reconciliation
The following table provides a reconciliation of Adjusted
EBITDA, a non-GAAP (Generally Accepted Accounting Principles)
financial measure, to net income, the most directly comparable
financial measure calculated and presented in accordance with GAAP,
for the three and twelve months ended December 31, 2011 and 2010:
|
|
|
|
Three Months
Ended
December
31,
|
|
Year
Ended
December
31,
|
|
|
|
|
2011
|
|
2010
|
|
2011
|
|
2010
|
|
|
|
|
(in
thousands)
|
|
(in
thousands)
|
|
|
Net
Income
|
|
$ 563
|
|
$ 8,327
|
|
$ 34,157
|
|
$
18,259
|
|
|
Reconciling
items:
|
|
|
|
|
|
|
|
|
|
|
Interest
expense
|
|
298
|
|
389
|
|
1,936
|
|
2,323
|
|
|
Income tax
provision
|
|
(406)
|
|
4,222
|
|
17,728
|
|
9,980
|
|
|
Depreciation
and amortization
|
|
4,488
|
|
3,922
|
|
16,430
|
|
14,796
|
|
|
Net loss on
disposal of assets
|
|
1,447
|
|
749
|
|
2,096
|
|
1,002
|
|
|
GCCF, 2008
and 2005 hurricane settlements
|
|
--
|
|
--
|
|
(26,964)
|
|
(234)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
|
$ 6,390
|
|
$ 17,609
|
|
$ 45,383
|
|
$ 46,126
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA represents net income before interest expense,
income tax, depreciation and amortization, net loss on disposal of
assets, and the GCCF and 2008 and 2005 hurricane litigation
settlements. The Company has reported Adjusted EBITDA because it
believes Adjusted EBITDA is a measure commonly reported and widely
used by investors as an indicator of a company's operating
performance. The Company believes Adjusted EBITDA assists such
investors in comparing a company's performance on a consistent
basis. Adjusted EBITDA is not a calculation based on GAAP and
should not be considered an alternative to net income in measuring
our performance or used as an exclusive measure of cash flow
because it does not consider the impact of working capital growth,
capital expenditures, debt principal reductions and other sources
and uses of cash which are disclosed in our consolidated statements
of cash flows. Investors should carefully consider the specific
items included in our computation of Adjusted EBITDA. While
Adjusted EBITDA has been disclosed herein to permit a more complete
comparative analysis of our operating performance relative to other
companies, investors should be cautioned that Adjusted EBITDA as
reported by us may not be comparable in all instances to Adjusted
EBITDA as reported by other companies. Adjusted EBITDA amounts may
not be fully available for management's discretionary use, due to
certain requirements to conserve funds for capital expenditures,
debt service and other commitments, and therefore management relies
primarily on our GAAP results. Adjusted EBITDA is not intended to
represent net income as defined by GAAP and such information should
not be considered as an alternative to net income, cash flow from
operations or any other measure of performance prescribed by GAAP
in the United States.
Conference Call Information
Omega Protein will host a conference call on its fourth quarter
and full year 2011 financial results at 8:30
a.m., Eastern Time, on Friday, March
9, 2012. The Company's senior management will be available
to discuss recent financial results and current business trends as
well as respond to questions.
Please dial (877) 407-3982 domestically or (201) 493-6780
internationally to join the call. Interested parties may also
listen to the webcast live over the Internet at
www.omegaproteininc.com.
A webcast replay of the conference call will be available
beginning shortly after the conclusion of the call at
www.omegaproteininc.com and will be available for 90 days. A
telephonic replay of the conference call will be available through
March 22, 2012. Domestic callers can
access the replay by dialing (877) 870-5176 and international
callers can dial (858) 384-5517. The access code for the replay is
389514.
About Omega Protein
Omega Protein Corporation is a nutritional ingredient company
and the nation's leading vertically integrated producer of omega-3
fish oil and specialty fish meal products. Omega Protein makes its
products from menhaden, an Omega-3 rich fish which is abundantly
available along the U.S. Gulf of
Mexico and Atlantic Coasts.
Forward Looking Statements
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS: The
statements contained in this press release that are not historical
facts are forward-looking statements that involve a number of risks
and uncertainties. Forward-looking information may be based on
projects, predictions and estimates. Some statements in this press
release may be forward-looking and use words like "may," "may not,"
"believes," "do not believe," "expects," "do not expect,"
"anticipates," "do not anticipate," "see," "do not see," or other
similar expressions. The actual results of future events described
in any of these forward-looking statements could differ materially
from those stated in the forward-looking statements. Important
factors that could cause actual results to be materially different
from those forward-looking statements include, among others: (1)
the Company's ability to meet its raw material requirements through
its annual menhaden harvest, which is subject to fluctuations due
to natural conditions over which the Company has no control, such
as varying fish population, fish oil yields, adverse weather
conditions, natural and other disasters and disease; (2) the impact
of laws and regulations that may be enacted that may restrict the
Company's operations or the sale of the Company's products; (3) the
impact of worldwide supply and demand relationships on prices for
the Company's products; (4) the Company's expectations regarding
demand and pricing for its products proving to be incorrect; (5)
fluctuations in the Company's quarterly operating results due to
the seasonality of the Company's business and its deferral of
inventory sales based on worldwide prices for competing products;
(6) the long-term effect of the Deepwater Horizon oil spill on the
Company's business, operations and fish catch; (7) the business,
operations, potential or prospects for the Company's subsidiaries,
Cyvex Nutrition, Inc. and InCon Processing, LLC, the dietary
supplement market or the human health and wellness segment
generally; and (8) the cost of compliance with existing and future
government regulations. Other factors are described in further
detail in the Company's filings with the Securities and Exchange
Commission, including its reports on Form 10-K, Form 10-Q and Form
8-K.
OMEGA
PROTEIN CORPORATION
UNAUDITED
CONDENSED CONSOLIDATED BALANCE SHEET
(Dollars in
thousands)
|
|
|
|
December 31,
2011
|
|
December 31,
2010
|
|
ASSETS
|
|
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
51,391
|
|
$
|
19,784
|
|
Receivables, net
|
|
|
16,788
|
|
|
11,492
|
|
Inventories
|
|
|
64,893
|
|
|
74,692
|
|
Deferred tax asset, net
|
|
|
1,784
|
|
|
1,673
|
|
Prepaid expenses and other current assets
|
|
|
2,238
|
|
|
3,641
|
|
|
|
|
|
|
|
|
|
Total current assets
|
|
|
137,094
|
|
|
111,282
|
|
Other assets,
net
|
|
|
5,423
|
|
|
3,051
|
|
Energy swap asset, net of
current portion
|
|
|
--
|
|
|
23
|
|
Property, plant and
equipment, net
|
|
|
122,512
|
|
|
111,726
|
|
Goodwill and other
intangible assets
|
|
|
12,801
|
|
|
10,702
|
|
Total assets
|
|
$
|
277,830
|
|
$
|
236,784
|
|
LIABILITIES
AND STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
|
Current maturities of long-term debt
|
|
$
|
2,992
|
|
$
|
2,994
|
|
Current portion of capital lease obligation
|
|
|
517
|
|
|
439
|
|
Accounts payable
|
|
|
3,779
|
|
|
2,776
|
|
Accrued liabilities
|
|
|
19,818
|
|
|
21,360
|
|
Total current liabilities
|
|
|
27,106
|
|
|
27,569
|
|
Long-term debt, net of
current maturities
|
|
|
27,302
|
|
|
30,307
|
|
Capital lease obligation,
net of current portion
|
|
|
268
|
|
|
820
|
|
Interest rate swap
liability, net of current portion
|
|
|
--
|
|
|
98
|
|
Energy swap liability, net
of current portion
|
|
|
113
|
|
|
--
|
|
Deferred tax
liability
|
|
|
13,900
|
|
|
11,313
|
|
Pension liabilities,
net
|
|
|
10,868
|
|
|
8,254
|
|
Other long-term
liabilities
|
|
|
1,712
|
|
|
896
|
|
Total liabilities
|
|
|
81,269
|
|
|
79,257
|
|
|
|
|
|
|
|
|
|
Commitments and
contingencies
|
|
|
|
|
|
|
|
Stockholders'
equity:
|
|
|
|
|
|
|
|
Preferred stock, $0.01 par value; 10,000,000 authorized
shares; none issued
|
|
|
--
|
|
|
--
|
|
Common Stock, $0.01 par value; 80,000,000 authorized shares;
19,568,851 and 18,827,278 shares issued and outstanding at December
31, 2011 and 2010, respectively
|
|
|
194
|
|
|
188
|
|
Capital in excess of par value
|
|
|
124,817
|
|
|
116,950
|
|
Retained earnings
|
|
|
82,229
|
|
|
48,072
|
|
Accumulated other comprehensive loss
|
|
|
(10,679)
|
|
|
(7,683)
|
|
Total stockholders'
equity
|
|
|
196,561
|
|
|
157,527
|
|
Total liabilities
and stockholders' equity
|
|
$
|
277,830
|
|
$
|
236,784
|
|
|
|
|
|
|
|
|
|
|
OMEGA
PROTEIN CORPORATION
UNAUDITED
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(In
thousands, except per share amounts)
|
|
|
|
Three Months
Ended
|
|
Years
Ended
|
|
|
|
December
31,
|
|
December
31,
|
|
|
|
2011
|
|
2010
|
|
2011
|
|
2010
|
|
Revenues
|
$
|
62,847
|
$
|
43,133
|
$
|
235,220
|
$
|
167,704
|
|
Cost of sales
|
|
52,035
|
|
24,058
|
|
180,546
|
|
118,519
|
|
Gross profit
|
|
10,812
|
|
19,075
|
|
54,674
|
|
49,185
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general, and
administrative expense
|
|
8,364
|
|
4,809
|
|
23,595
|
|
15,634
|
|
Research and development
expense
|
|
138
|
|
378
|
|
1,588
|
|
1,727
|
|
Proceeds/gains resulting
from Gulf of Mexico oil spill disaster
|
|
--
|
|
--
|
|
(26,177)
|
|
—
|
|
Other proceeds/gains
resulting from natural disaster, net – 2008 storms
|
|
--
|
|
--
|
|
--
|
|
(234)
|
|
Other proceeds/gains
resulting from natural disaster, net – 2005 storms
|
|
--
|
|
--
|
|
(787)
|
|
—
|
|
Loss on disposal of
assets
|
|
1,447
|
|
749
|
|
2,096
|
|
1,002
|
|
Operating
income
|
|
863
|
|
13,139
|
|
54,359
|
|
31,056
|
|
Interest income
|
|
9
|
|
10
|
|
43
|
|
38
|
|
Interest
expense
|
|
(471)
|
|
(561)
|
|
(2,109)
|
|
(2,495)
|
|
Other expense,
net
|
|
(244)
|
|
(39)
|
|
(408)
|
|
(360)
|
|
Income before income
taxes
|
|
157
|
|
12,549
|
|
51,885
|
|
28,239
|
|
|
|
|
|
|
|
|
|
|
|
Provision for income
taxes
|
|
(406)
|
|
4,222
|
|
17,728
|
|
9,980
|
|
Net income
|
$
|
563
|
$
|
8,327
|
$
|
34,157
|
$
|
18,259
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per
share
|
$
|
0.03
|
$
|
0.44
|
$
|
1.77
|
$
|
0.97
|
|
Weighted average common
shares outstanding
|
|
19,418
|
|
18,819
|
|
19,255
|
|
18,799
|
|
Diluted earnings per
share
|
$
|
0.03
|
$
|
0.44
|
$
|
1.71
|
$
|
0.97
|
|
Weighted average common
shares and potential common share equivalents
outstanding
|
|
19,907
|
|
19,109
|
|
19,940
|
|
18,911
|
|
|
|
|
|
|
|
|
|
|
|
|
OMEGA
PROTEIN CORPORATION
UNAUDITED
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(Dollars in
thousands)
|
|
|
|
2011
|
|
2010
|
|
|
|
Cash flows from operating
activities:
|
|
|
|
|
|
Net
income
|
$
|
34,157
|
$
|
18,259
|
|
Adjustments
to reconcile net income to net cash provided by operating
activities:
|
|
|
|
|
|
Depreciation and amortization
|
|
16,430
|
|
14,796
|
|
(Other proceeds/gains) loss resulting from natural disaster,
net – 2008 storms
|
|
--
|
|
(234)
|
|
Loss
resulting from debt refinancing
|
|
--
|
|
--
|
|
Loss
on disposal of assets, net
|
|
2,096
|
|
1,002
|
|
Provisions for losses on receivables
|
|
48
|
|
48
|
|
Share
based compensation
|
|
3,295
|
|
1,794
|
|
Deferred income taxes
|
|
4,255
|
|
9,526
|
|
Changes in assets and liabilities:
|
|
|
|
|
|
Receivables
|
|
(4,751)
|
|
(315)
|
|
Inventories
|
|
10,181
|
|
(10,866)
|
|
Prepaid expenses and other current
assets
|
|
126
|
|
(600)
|
|
Other assets
|
|
(3,850)
|
|
(1,535)
|
|
Accounts payable
|
|
761
|
|
384
|
|
Accrued liabilities
|
|
446
|
|
4,111
|
|
Pension liability, net
|
|
(748)
|
|
(604)
|
|
Other long-term liabilities
|
|
816
|
|
32
|
|
|
|
|
|
|
|
Net cash
provided by operating activities
|
|
63,262
|
|
35,798
|
|
Cash flows from investing
activities:
|
|
|
|
|
|
Proceeds from disposition of assets
|
|
2,339
|
|
72
|
|
Proceeds from insurance companies and grant,
hurricanes
|
|
--
|
|
234
|
|
Acquisition of InCon, net of cash acquired
|
|
(9,028)
|
|
--
|
|
Acquisition of Cyvex, net of cash acquired
|
|
(2,170)
|
|
(10,289)
|
|
Capital expenditures
|
|
(23,893)
|
|
(15,599)
|
|
|
|
|
|
|
|
Net cash
used in investing activities
|
|
(32,752)
|
|
(25,582)
|
|
|
|
|
|
|
|
Cash flows from financing
activities:
|
|
|
|
|
|
Principal payments of long-term debt
|
|
(3,007)
|
|
(2,619)
|
|
Principal payments of capital lease obligation
|
|
(474)
|
|
(375)
|
|
Debt
issuance costs
|
|
--
|
|
--
|
|
Proceeds from borrowings
|
|
--
|
|
10,000
|
|
Proceeds from stock options exercised
|
|
2,879
|
|
339
|
|
Tax
effect of stock options exercised
|
|
1,699
|
|
46
|
|
Net cash
provided by financing activities
|
|
1,097
|
|
7,391
|
|
|
|
|
|
|
|
Net increase in cash and
cash equivalents
|
|
31,607
|
|
17,607
|
|
Cash and cash equivalents at
beginning of year
|
|
19,784
|
|
2,177
|
|
Cash and cash equivalents at end
of year
|
$
|
51,391
|
$
|
19,784
|
|
|
|
|
|
|
|
|
SOURCE Omega Protein Corporation