Imperial Sugar Company Reports Fourth Quarter and Fiscal Year 2010 Results
The Company reported that at September 30, 2010, it had cash balances of $22.8 million and available, undrawn revolving credit capacity of $72 million, after deducting $22 million of borrowings and $6 million of letters of credit outstanding under that facility.
1/3/2011 --- Imperial Sugar Company reported a net loss for the fiscal fourth quarter ended September 30, 2010 of $2.3 million, or $0.19 per share, compared to a net loss from continuing operations of $0.2 million, or $0.02 per share, for the same period in fiscal 2009. For the year, the Company reported net income of $136.9 million, or $11.33 per share, compared to a loss from continuing operations of $23.8 million, or $2.03 per share, for fiscal 2009. The current year results include pretax gains resulting from the settlement of insurance claims totaling $278.5 million.
Results for both fiscal 2010 and 2009 were impacted by the absence of a fully operational Port Wentworth refinery, which normally comprises approximately 60% of the Company's refining capacity.
"Imperial Sugar Company took important strategic steps in fiscal 2010 while managing the challenges associated with restoring full production at the Port Wentworth refinery," stated John Sheptor, president and CEO of Imperial Sugar. "As production rates at the Port Wentworth refinery increased during the year, we identified facility and process modifications necessary to return the refinery to historical operating levels. We completed the last major modification in October 2010, and output improved significantly. While production days and fixed costs had a negative impact on fiscal 2010 results, the improvements that we have made should lead to sustained results at higher rates in 2011."
Sheptor continued, "Other important steps were taken in 2010 to strengthen our business and provide a path to a stronger future. Construction of the new refinery in Louisiana by our recently formed joint venture is well under way, with completion targeted for the summer of 2011. Our Natural Sweet Ventures initiative provides an exciting opportunity to expand our portfolio of all natural sweeteners. Customer interest in our stevia/sucrose products under the Steviacane(TM) brand name has been encouraging. The continued success of our strategic Mexican alliance was invaluable in dealing with the increasing complexities arising in the NAFTA sugar region, while Wholesome Sweeteners experienced significant top line and earnings growth from their organic and fair trade portfolio of sweeteners."
Net sales for the fourth quarter of fiscal 2010 increased to $264.4 million compared to $147.3 million for the same period in fiscal 2009. The increased revenues were due to 53% higher sales volumes owing to increased Port Wentworth refinery production, as well as 18% higher refined prices. Gross margin as a percent of sales was 2.7% in the current quarter compared to 13.3% last year as a result of higher raw sugar costs, which more than offset the higher sales prices.
Domestic raw sugar prices increased rapidly during the past 18 months, in part in response to significantly higher world raw sugar prices. The gains recognized on raw sugar futures contracts entered into to hedge raw sugar purchases in later periods, which did not qualify for deferral accounting, totaled $30.6 million in the current quarter compared to $27.9 million in the fourth quarter of fiscal 2009.
The Company reported that at September 30, 2010, it had cash balances of $22.8 million and available, undrawn revolving credit capacity of $72 million, after deducting $22 million of borrowings and $6 million of letters of credit outstanding under that facility.
Fiscal Year Ended September 30, 2010
For the year, the Company reported net income of $136.9 million, or $11.33 per share, compared to a loss from continuing operations of $23.8 million, or $2.03 per share, for fiscal 2009. Included in the current year's results are $278.5 million of pre-tax gains associated with settlement of insurance claims related to the February 2008 Port Wentworth accident, $33.2 million of pretax gains on derivatives entered into to hedge raw sugar purchases in later periods, and $8.6 million of pretax charges related to the refinery accident. Last year's results include pretax insurance recoveries of $30.4 million, $53.8 million of refinery related pretax charges and a $16.1 million first quarter pretax gain from a litigation settlement.
Net sales for fiscal 2010 rose 74% to $908.0 million compared to $522.6 million in fiscal 2009 on higher sales volumes and prices. Gross margin as a percent of sales for fiscal 2010 declined to a negative 2.1% from a positive 2.1% last year, primarily due to higher raw sugar costs offset partially by higher sales prices
Other income, which includes equity investment earnings and distributions from cost basis investments, increased significantly for the year to $5.5 million as compared to $3.0 million last year due primarily to a significant improvement in Wholesome Sweeteners' earnings.
Capital expenditures during fiscal 2010 were $72.3 million, including spending related to the Port Wentworth rebuild project.
