Omega Protein Reports 2008 Results
The Company’s 2008 third and fourth quarter gross margins were further reduced primarily due to significantly higher per unit production costs due to the lost fishing days caused by Hurricanes Gustav and Ike, combined with increased energy, labor and repair costs experienced during the 2008 fishing season.
11/03/09 Omega Protein Corporation, the nation’s leading producer of Omega-3 fish oil and specialty fish meal products, reported net income of $12.6 million ($0.69 a share) for the fiscal year ended December 31, 2008, compared with net income of $12.1 million ($0.72 a share) for the year ended December 31, 2007.
For the year ended December 31, 2008, the Company had revenues of $177.4 million, compared with $157.1 million in revenues for the year ended December 31, 2007. Omega Protein recorded operating income of $23.5 million for the year ended December 31, 2008, versus operating income of $27.4 million for the comparable period a year earlier. Revenues for the fourth quarter ended December 31, 2008 were $39.7 million compared with revenues of $44.3 million for the comparable quarter in 2007. Omega Protein recorded operating income of $2.5 million for the 2008 fourth quarter, versus operating income of $8.8 million for the fourth quarter of 2007.
The Company’s 2008 results, in comparison to 2007, after excluding the effects of hurricane losses, insurance recoveries and debt refinancing costs from each of the reported periods, experienced growth in revenues (13%), gross profit (24%) and net income (80%). The 2008 results reflect increased pricing, particularly for fish oil, similar to other commodity markets during the first half of 2008, offset by decreased sales volumes. Commodity prices began to decrease mid year which contributed to declining gross profit margins in the third and fourth quarters of 2008.
During the quarter ended September 30, 2008, the Company suffered wind and flood damage to two facilities as a result of Hurricane Ike. The Company’s Abbeville, Louisiana facility was restored to full capacity within a few weeks. The Company’s Cameron, Louisiana facility is continuing its repairs and is expected to be fully functional for the beginning of the 2009 fishing season. Losses resulting from Hurricane Ike, net of insurance proceeds, were approximately $2.0 million. The Company’s 2008 third and fourth quarter gross margins were further reduced primarily due to significantly higher per unit production costs due to the lost fishing days caused by Hurricanes Gustav and Ike, combined with increased energy, labor and repair costs experienced during the 2008 fishing season.
Results for the three and twelve months ended December 31, 2007 were favorably impacted by the settlement of the Company’s lawsuit with its property insurance carriers pertaining to damages sustained from Hurricanes Katrina and Rita in 2005. The results for the year ended December 31, 2007 were also impacted by the net loss incurred during the first quarter of 2007 primarily due to the write-off of approximately $3.0 million in deferred debt issuance costs and prepayment fees resulting from the refinancing of the Company’s prior credit agreement with a new credit facility which closed in March 2007. Excluding the NEWS settlement of the lawsuit and the write-off, reported 2007 net income would have resulted in Omega Protein reporting approximately $7.2 million in net income ($0.43 a share).
