Imperial Holly Corporation Reports First Quarter Results and Declares Regular Dividend
SUGAR LAND, Texas, Jan. 30 /PRNewswire/ -- Imperial Holly Corporation (Amex: IHK) reported a loss before extraordinary item of $142,000 or $0.01 per share on revenues of $434,867,000 for its first fiscal quarter ended December 31, 1997. The net loss was $2,141,000 ($0.14 per share), after an extraordinary charge of $1,999,000 ($0.13 per share) net of tax, related to the repurchase of the Company's senior debt in connection with financing the acquisition of Savannah Foods & Industries, Inc. The current quarter results have been reduced $1,766,000, net of tax, for the minority interest in the earnings of Savannah Foods & Industries, Inc. for the period from October 17, 1997 to December 22, 1997. Results for the prior year's quarter ended December 31, 1996 were net income of $1,496,000 or $0.11 per share on revenues of $190,311,000.
As a result of the Savannah acquisition, the Company is the largest, most geographically diverse and most balanced producer and marketer of refined sugar in the United States. The Company acquired Savannah in a two step transaction concluded December 22, 1997, when it merged with a wholly-owned subsidiary of Imperial Holly. Previously, Imperial Holly had purchased 50.1% of Savannah in a tender offer which was completed October 17, 1997. Pro-forma results as if the Savannah acquisition had occurred September 30, 1996 are net income of $1,430,000 or $0.05 per share on revenues of $504,413,000 for the current year's quarter ended December 31, 1997, compared to net income of $3,496,000 or $0.13 per share on revenues of $493,432,000.
The reduction in operating results is principally due to lower refined sugar prices, primarily resulting from a larger domestic sugar beet crop. The impact of the price reduction was offset in part by strong operations at Savannah's refineries and sugar beet factories. In addition, higher costs at the Company's Sugar Land cane sugar refinery and costs attributable to continuing low acreage at two beet sugar factories affected the results.
At today's annual shareholders' meeting, James C. Kempner, President and CEO, said "Operations at the Company's Sugar Land refinery were unsatisfactory during the quarter. Refinery management has been replaced and overall responsibility for its operation has been combined with that of the Savannah refineries under Bill Sprague, President of Imperial's Savannah Foods & Industries subsidiary. We expect substantial and rapid improvement of operations under the new management."
"In addition, a corporate reorganization in connection with the Savannah acquisition as well as other measures management is taking are expected to ultimately produce cost savings in excess of $40 million. We continue to believe that, by the end of the current fiscal year, over one-half of these reductions will be in place on a 'run rate' basis."
At its meeting today, Imperial Holly's Board of Directors approved a $39 million capital expenditure program for the remainder of fiscal 1998. Approximately one-third of this amount is for completion of the expansion of the Company's Sidney, Montana factory and the completion of installation of bulk sugar storage silos and high speed packaging equipment at the Sugar Land, Texas refinery, projects which are expected to provide significant additional earnings when they begin operation this year.
Also at its meeting today, Imperial Holly Corporation's Board of Directors declared a dividend of $0.03 per share, payable February 17, 1998, to shareholders of record February 9, 1998. |
