Imperial Sugar Company (NASDAQ:IPSU) today reported a net loss
for the fiscal fourth quarter ended September 30, 2011 of $32.5
million, or $2.73 per share, compared to a net loss of $2.3
million, or $0.19 per share, for the same period in fiscal 2010.
For the year, the Company reported a net loss of $53.4 million, or
$4.49 per share, compared to net income of $136.9 million, or
$11.33 per share, for fiscal 2010. Fiscal 2010 results include
pretax gains resulting from the settlement of insurance claims
totaling $278.5 million ($178.9 million or $14.81 per share after
tax), while fiscal 2011 results include a tax charge of $18.9
million to establish a valuation allowance for tax loss carry
forwards, as well as pre-tax impairment charges related to joint
venture investments totaling $7.1 million.
“Imperial’s results continue to be challenged by high raw sugar
prices and competitive pricing dynamics,” stated John Sheptor,
president and CEO of Imperial Sugar. “Additionally, our progress on
increasing production rates and reducing costs at the Port
Wentworth refinery has been slower than we expected, adding to the
unsatisfactory financial results. Studies completed by an outside
refining consultant, as well as by our internal operating and
engineering teams, identified potential improvements in processing
and equipment reliability issues in the refinery. We are evaluating
those findings and as part of our 2012 capital plan, have initiated
projects to replace equipment in several key areas of the refinery.
We continue to evaluate additional capital projects which may be
required to be undertaken later in fiscal 2012 or in fiscal
2013.
Sheptor continued, “our operating results and the impact of high
sugar prices on working capital have strained our financial
resources and we are exploring opportunities to improve liquidity,
including potential further asset sales. We continue to maintain
compliance with the terms of our revolving credit agreement and
have an open dialog with our lenders. We completed an amendment of
our credit agreement in late December, which is designed to provide
additional flexibility under the agreement over the next several
months.”
Net sales for the fourth quarter of fiscal 2011 decreased to
$231.4 million compared to $264.4 million for the same period in
fiscal 2010 as a result of 27% lower sales volumes, offset in part
by 19% higher refined prices. The lower sales volumes were the
result of the contribution of the Gramercy refinery to Louisiana
Sugar Refining LLC (“LSR”) in January 2011 in exchange for a
one-third membership interest, which was reported on the equity
method of accounting. As previously reported, in December 2011 the
Company sold its membership interest in LSR. Gross margin as a
percent of sales was a negative 3.5% in the current quarter
compared to a positive 2.7% last year as higher reported raw sugar
costs more than offset the higher sales prices.
Other income declined from a positive $1.0 million in the fourth
quarter of fiscal 2010 to a negative $6.0 million as the Company’s
share of operating losses in LSR, as well as impairment charges,
more than offset increased earnings from other investments.
Impairment charges totaling $7.1 million were recorded during the
fourth quarter of fiscal 2011, principally to reduce the carrying
value of the LSR investment to the sales value realized subsequent
to year end.
Fiscal Year Ended September 30,
2011
Net sales for fiscal 2011 were $848.0 million compared to $908.0
million in fiscal 2010, as lower sales volumes in the industrial
and distributor channels more than offset higher sales prices.
Gross margin as a percent of sales for fiscal 2011 improved
slightly to a negative 1.6% from a negative 2.1% largely from
higher sales prices.
The Company reported that it had available, undrawn revolving
credit availability of $44 million, at September 30, 2011, after
deducting $82 million of borrowings and $7 million of letters of
credit outstanding under its revolving credit agreement. Undrawn
availability was $36 million as of December 31, 2011.
Capital expenditures during fiscal 2011 were $24.8 million,
principally for safety and normal equipment replacement
projects.
Conference Call Details
Company officials will conduct a conference call starting at
11:00 a.m. Eastern, Monday, January 9, 2012. 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 fourth quarter and year ended September 30, 2011, 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
1-866-356-4279 and enter the Participant Passcode: 16857689. 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 and clicking
on the “Q4 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: 14750120. Both replays will be available
through February 9, 2012.
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.
About Imperial
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, our
liquidity and ability to finance our operations and capital
investment programs, future expenses and liabilities arising from
the Port Wentworth refinery incident, 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 sugars,
operating efficiencies, results of future investments and
initiatives, future asset sales, 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.
Tables to follow
IMPERIAL SUGAR COMPANY AND SUBSIDIARIES CONSOLIDATED
STATEMENTS OF OPERATIONS (In Thousands, Except Per Share Data)
(Unaudited) Three Months Ended September 30,
Year Ended September 30,
2011
2010
2011
2010
Net Sales $ 231,436 $ 264,413 $ 847,976 $ 908,033 Business
Interruption Insurance Recovery - - - 84,677 Cost of Sales (239,502
) (257,145 ) (861,507 ) (927,302 ) Selling, General and
Administrative Expense (9,255 ) (10,843 ) (38,013 ) (41,434 )
Refinery Explosion Related Charges (1,090 ) (795 ) (2,222 ) (8,600
) Insurance Recoveries Recognized - - - 193,796 Gain on
Contribution of Assets to Joint Venture 3,598
Operating Income (Loss) (18,411 ) (4,370 ) (50,168 )
209,170 Interest Expense (776 ) (414 ) (2,307 ) (1,721 )
Interest Income - 4 404 52 Other Income (Loss), Net (6,004 )
983 (6,818 ) 5,542 Income
(Loss) From Continuing Operations Before Income Taxes (25,191 )
(3,797 ) (58,889 ) 213,043 (Provision) Credit for Income Taxes
(7,358 ) 1,492
5,496
(76,183 ) Income
(Loss) from Continuing Operations (32,549 ) (2,305 ) (53,393 )
136,860 Income (Loss) from Discontinued Operations -
- 0 0 Net Income
(Loss) $ (32,549 ) $ (2,305 ) $ (53,393 ) $ 136,860
Basic Earnings Per Share of Common Stock: Income (Loss) from
Continuing Operations $ (2.73 ) $ (0.19 ) $ (4.49 ) $ 11.59 Loss
from Discontinued Operations - -
- - Net Income (Loss) $ (2.73 ) $ (0.19 ) $
(4.49 ) $ 11.59 Diluted Earnings Per Share of Common
Stock: Income (Loss) from Continuing Operations $ (2.73 ) $ (0.19 )
$ (4.49 ) $ 11.33 Loss from Discontinued Operations -
- - - Net Income (Loss) $
(2.73 ) $ (0.19 ) $ (4.49 ) $ 11.33 IMPERIAL SUGAR
COMPANY AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (In
Thousands of Dollars) (Unaudited)
September 30,2011
September 30,2010
Cash and Temporary Investments $ 134 $ 22,750 Marketable
Securities 206 198 Accounts Receivable, Net 55,622 55,093 Inventory
70,589 113,375 Other Current Assets 59,155 40,949
Current Assets 185,706 232,365 Property, Plant & Equipment, Net
251,009 280,211 Deferred Income Taxes, Net 11,034 10,624 Other
Assets 42,672 18,366 Total $ 490,421 $ 541,566
Accounts Payable, Raw Sugar $ 23,461 $ 81,673 Accounts Payable,
Trade 13,367 28,326 Borrowing under Revolving Credit Line 81,843
22,000 Deferred Income Taxes, Net 8,313 11,427 Other Current
Liabilities 74,200 54,189 Current Liabilities 201,184
197,615 Long-Term Debt - - Other Liabilities 127,783 125,219
Shareholders' Equity 161,454 218,732 Total $ 490,421
$ 541,566 Shares of Common Stock Outstanding 12,223,978
12,145,098
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