Finally - IPSU Earnings PR for Q1-FY2003
Imperial Sugar Company Announces Results for First Fiscal Quarter
Tuesday February 18, 8:52 am ET
SUGAR LAND, Texas-- Feb. 18, 2003--Imperial Sugar Company (OTCBB:IPSU - News) announced results for its first fiscal quarter ended December 31, 2002. Net income for the quarter was $63.5 million or $6.35 per diluted share compared to a net loss during last year's first fiscal quarter of $0.8 million or $0.08 per share. Loss from continuing operations was $5.5 million or $0.55 per diluted share compared to a loss from continuing operations during last year's first fiscal quarter of $9.1 million or $0.91 per share.
These results have been heavily influenced by several events and transactions that occurred during the quarter, including the sale of three beet factories in October, the closing of the refining activities at its Sugar Land facility in December, the sale of Imperial's Diamond Crystal Brands ("DCB") foodservice subsidiary in December and the refinancing of its bank agreements in December.
Revenues from continuing operations for the quarter were $277.2 million, compared to $245.6 million for the first fiscal quarter of the previous year. This increase of $31.6 million was primarily due to an increase in sugar prices as well as somewhat higher sales volumes. The environment in the sugar industry is more favorable than in prior years and this has enabled the company to increase its gross margin as a percent of revenue to 7.3% in this fiscal quarter from 5.3% in the previous year.
Income from discontinued operations includes the gains on the sale of the beet factories and on the sale of the DCB totaling $64.1 million.
Included in reported results from continuing operations for the quarters were the following:
Charges totaling $2.8 million associated with the discontinuance of refining operations at its Sugar Land refinery, including severance, impairment of inventory and environmental costs. There were no comparable charges in last year's first fiscal quarter.
Charges totaling $2.1 million for professional fees and other costs incurred in connection with the company's restructuring initiatives versus $0.7 million in similar charges in last year's first fiscal quarter.
Charges totaling $4.6 million for costs related to the write-off of prior deferred debt costs and restructuring advisory fees as a result of negotiations with its former bank group and the refinancing of the bank agreements. There were no comparable charges in last year's first fiscal quarter.
A credit of $2.1 million related to the forgiveness of PIK interest accrued during fiscal 2002 as a result of repaying the senior bank debt in December. There was no comparable credit in last year's first fiscal quarter.
A credit of $1.4 million related to the sale of other assets, primarily surplus real estate during the quarter. There was a charge of $0.1 million related to the sale of other assets during last year's first fiscal quarter.
"The December quarter was one of considerable progress towards our objective of achieving reduced leverage and financial stability," said Bob Peiser, president and CEO of Imperial Sugar. "The amount of work by all involved that went into closing the various transactions was remarkable."
Peiser also noted, "At the same time, we have made considerable progress in improving the internal workings of our company, adding discipline and accountability and demonstrating an ability to create higher margins and increased profitability in our core business. We are pleased with the progress to date, but everyone inside the company knows that we have more work to do to prove to all of our stakeholders that we can improve our operating results to levels that are consistent with our objectives. Towards this end we are pursuing ways of increasing the value added component of our product portfolio by promoting certain customer logistics initiatives in our industrial business and reinvigorating our already strong brands in our consumer business."
About Imperial Sugar
The Imperial Sugar Company is one of the largest processors and marketers of refined sugar in the United States and a major distributor to the foodservice market. Imperial Sugar is a name recognized and trusted in the food industry for more than 150 years, as the company's history dates back to the mid-1800s. With packaging and refining facilities across the nation, the Company markets products nationally under the Imperial®, Dixie Crystals®, Spreckels®, Pioneer®, Holly® and Wholesome Sweeteners(TM) brands. Additional information about Imperial Sugar may be found on its Web site at www.imperialsugar.com.
Statements regarding future market prices and margins, future operating results, sugarbeet acreage, future operating efficiencies, future government and legislative action, cost savings, liquidity and ability to finance our operations and other statements which are not historical facts contained in this release are forward-looking statements that involve certain risks, uncertainties and assumptions. These include, but are not limited to, market factors, energy costs, the effect of weather and economic conditions, farm and trade policy, the ability of the Company to realize planned cost savings, the available supply of sugar, available quantity and quality of sugarbeets, court decisions and actions, the results of negotiations, actual or threatened acts of terrorism or armed hostilities, legislative and administrative actions and other factors detailed in the Company's Securities and Exchange Commission 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 SUBSIDIARIES
CONSOLIDATED STATEMENT OF INCOME
(In Thousands, Except Per Share Data)
Three Months Three Months
Ended Ended
December 31, December 31,
2002 2001
---------------- ----------------
Net Sales $277,209 $245,594
Cost of Sales 256,918 232,668
---------------- ----------------
Gross Margin 20,291 12,926
Selling, General and Administrative
Costs 14,541 11,754
Discount on Receivables Sold 1,930 964
Depreciation and Amortization 3,355 3,814
Asset Impairment and Other Charges 2,783 -
---------------- ----------------
Operating Income (2,318) (3,606)
Interest Expense (584) (5,910)
Costs Associated With Debt Repaid (4,617) -
Gain on Sale of Assets 1,424 (82)
Other 547 488
---------------- ----------------
Income (Loss) From Continuing
Operations Before Income Taxes (5,548) (9,110)
Provision for Income Taxes - -
---------------- ----------------
Income (Loss) from Continuing
Operations (5,548) (9,110)
Income (Loss) from Discontinued
Operations 69,007 8,271
---------------- ----------------
Net Income (Loss) $63,459 $(839)
================ ================
Basic and Diluted Earnings (Loss)
Per Share of Common Stock:
Income (Loss) from
Continuing Operations $(0.55) $(0.91)
Income (Loss) from
Discontinued Operations 6.90 0.83
---------------- ----------------
Net Income (Loss) $6.35 $(0.08)
================ ================
Weighted Average Shares
Outstanding 10,000,000 10,000,000
================ ================
IMPERIAL SUGAR COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In Thousands of Dollars)
December 31, September 30,
2002 2002
-------------- -------------
Cash and temporary investments $15,726 $5,885
Accounts Receivable 63,862 38,872
Inventory 103,180 143,008
Other Current Assets 28,226 14,271
Net Assets of Discontinued Operations - 51,679
-------------- -------------
Current Assets 210,994 253,715
Plant Property & Equipment 145,454 151,071
Other Assets 30,461 32,945
-------------- -------------
Total $386,909 $437,731
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Accounts Payable $47,714 $61,904
Current Maturities of Long Term Debt 36,858 6,844
Other Current Liabilities 54,907 53,785
-------------- -------------
Current Liabilities 139,479 122,533
Long-term Debt 12,286 148,878
Other Liabilities 71,377 68,060
Shareholders' Equity 163,767 98,260
-------------- -------------
Total $386,909 $437,731
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