Imperial Sugar Company (NASDAQ:IPSU) today reported a net loss
of $6.5 million, or $0.54 per diluted share, for the second fiscal
quarter ended March 31, 2012, compared to net income of $4.2
million, or $0.34 per diluted share, for the second fiscal quarter
of 2011. The prior year’s second quarter results include a $3.6
million pretax gain related to the contribution of the Gramercy,
Louisiana refinery to Louisiana Sugar Refining, LLC.
Net sales for the second fiscal quarter were $203.0 million,
compared to $192.2 million for the same period last year. The
increase in quarterly sales was principally due to a 10.5% increase
in domestic sugar prices, which more than offset a 2.4% decrease in
domestic sales volumes.
For the three months ended March 31, 2012, gross margin as a
percent of sales was 1.1% compared to 5.4% in the prior year
quarter. Raw sugar unit costs, before the impact of LIFO
liquidations, increased 8% in the current quarter when compared to
the same period of the prior year. Raw sugar costs during the prior
year’s second quarter benefited from the liquidation of LIFO basis
inventory at a cost which was $14.3 million lower than then-current
raw sugar costs. Higher manufacturing costs in the current quarter
also contributed to the lower gross margin.
The Company sold its 50% voting interest in Wholesome
Sweeteners, Incorporated in April 2012 for net proceeds of $60.4
million, subject to adjustment based on Wholesome’s closing date
working capital. Capital expenditures for the six months ended
March 31, 2012 totaled $7.4 million. As of May 8, 2012, undrawn
borrowing capacity under the Company’s revolving credit agreement
was $36.4 million, after deducting $44.3 million of outstanding
borrowings and $7.5 million of letters of credit.
Six Months Ended March 31,
2012
For the six-month period ended March 31, 2012, the Company
reported a net loss of $10.0 million, or $0.83 per diluted share,
compared to a net loss of $4.8 million, or $0.40 per diluted share,
for the same period last year.
Net sales for the current six-month period were $430.7 million
compared to $419.6 million during the same period last year
primarily due to higher domestic sugar prices. Sales volumes for
the current six-month period were reduced from the same period last
year as a result of the contribution of the Gramercy refinery to
Louisiana Sugar Refining, LLC in January 2011.
Gross margin as a percent of sales for the six months ended
March 31, 2012 was 2.2% compared to 1.6% for the same period last
year primarily due to higher refined sugar prices.
Pending Merger Agreement
On May 1, 2012, the Company and a subsidiary of Louis Dreyfus
Commodities LLC entered into a definitive agreement whereby the
Company would be acquired through a cash tender offer and second
step merger at $6.35 per share. The proposed transaction is subject
to customary closing conditions, including expiration of the
applicable waiting periods under the Hart-Scott-Rodino Antitrust
Improvements Act and a minimum tender of at least 662/3% of the
Company’s total shares outstanding. For further information, please
see the Current Report on Form 8-K filed by the Company on May 1,
2012.
Conference Call
As a result of the pending merger transaction, the Company will
not hold a conference call to discuss this quarter’s results of
operations.
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
Statements regarding completion of the pending merger agreement
with a subsidiary of Louis Dreyfus Commodities LLC, 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 liabilities arising from litigation, claims and assessments,
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, 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
or in the Company’s Securities and Exchange Commission (SEC)
filings are forward-looking statements that involve certain risks,
uncertainties and assumptions. These include, but are not limited
to, the minimum tender condition of the merger agreement being
satisfied, legislative, administrative and judicial actions, market
factors, farm and trade policy, our ability to obtain financing and
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, and other factors detailed in the
Company’s SEC 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.
IMPERIAL
SUGAR COMPANY AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF
OPERATIONS(In Thousands, Except Per Share Data)(Unaudited)
Three Months Ended March 31, Six Months Ended March 31,
2012
2011
2012
2011
Net Sales $ 203,012 $ 192,166 $ 430,688 $ 419,555 Cost of
Sales (200,714 ) (181,869 ) (421,361 ) (412,950 ) Selling, General
and Administrative Expense (10,419 ) (9,667 ) (21,256 ) (19,316 )
Gain on Contribution of Assets to Joint Venture -
3,598 - 3,598 Operating
Income (Loss) (8,121 ) 4,228 (11,929 ) (9,113 ) Interest
Expense (1,033 ) (435 ) (1,984 ) (798 ) Interest Income 1 386 1 399
Other Income, Net 2,653 1,266
3,955 581 Income (Loss) Before Income
Taxes (6,500 ) 5,445 (9,957 ) (8,931 ) (Provision) Credit for
Income Taxes - (1,290 ) -
4,171 Net Income (Loss) $ (6,500 ) $ 4,155 $
(9,957 ) $ (4,760 ) Basic Earnings Per Share of Common
Stock: Net Income (Loss) $ (0.54 ) $ 0.35 $ (0.83 ) $ (0.40
) Diluted Earnings Per Share of Common Stock: Net Income
(Loss) $ (0.54 ) $ 0.34 $ (0.83 ) $ (0.40 )
IMPERIAL SUGAR COMPANY AND
SUBSIDIARIESCONDENSED CONSOLIDATED BALANCE SHEETS(In Thousands of
Dollars)(Unaudited) March 31, September 30,
2012
2011
Cash and Cash Equivalents $ 278 $ 134 Marketable Securities
208 206 Accounts Receivable, Net 49,340 55,622 Inventory 47,968
70,589 Other Current Assets 17,044 59,155 Current
Assets 114,838 185,706 Property, Plant & Equipment, Net 249,065
251,009 Deferred Income Taxes, Net 11,223 11,034 Other Assets
26,118 42,672 Total $ 401,244 $ 490,421
Accounts Payable, Raw Sugar $ 7,157 $ 23,461 Accounts Payable,
Trade 14,354 13,367 Borrowing under Revolving Credit Line 69,015
81,843 Deferred Income Taxes, Net 8,313 8,313 Other Current
Liabilities 34,158 74,200 Current Liabilities 132,997
201,184 Long-Term Debt - - Other Liabilities 124,835 127,783
Shareholders' Equity 143,412 161,454 Total $ 401,244
$ 490,421 Shares of Common Stock Outstanding 12,241,618
12,223,978
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