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SUGAR LAND, Texas--(BUSINESS WIRE)--May 1, 2000--Imperial
Sugar Company (AMEX:IHK
- news) today
announced results for the fiscal 2000 second quarter ended March
31, 2000.
Net sales for the second quarter were $429.2 million, compared
with net sales of $429.0 million for the year-ago period. The
Company reported a net loss of $5.0 million for the quarter, or
$(0.16) per diluted share, compared to a net loss of $18.6
million, or $(0.58) per diluted share, for the same period last
year. Excluding a gain of $4.4 million after tax, or $0.13 per
diluted share, related to the Company's continued selling of most
of its marketable securities portfolio, as previously announced,
the Company would have reported a net loss for the fiscal 2000
second quarter of $9.4 million, or $(0.29) per diluted share.
Excluding a non-recurring, non-cash charge of $10.9 million after
tax, or $(0.34) per diluted share, to write off its investment in
a limited partnership, and a gain on sales of securities of $1.5
million after tax, or $0.05 per diluted share, the Company would
have reported a net loss of $9.2 million, or $(0.29) per diluted
share in the fiscal 1999 second quarter.
Net sales in the second quarter increased slightly compared to
the same period last year. Net sales in the Company's sugar
segment increased year over year as a result of higher volumes in
both beet and cane sugar processing operations, reduced by the
impact of lower sales prices for refined sugar. Foodservice net
sales declined primarily as a result of lower sales prices
received for refined sugar sold in foodservice markets.
Gross margin in the recent quarter increased to $36.6 million,
or 8.5% of net sales, from $35.7 million, or 8.3% of net sales,
reported in the same period a year ago, reflecting better quality
sugarbeets processed during the period resulting from improved
growing conditions in the Company's Rocky Mountain and Michigan
sugarbeet growing areas. However, significantly lower sales prices
for refined sugar more than offset the benefits from lower sugar
costs during the quarter.
Selling, General & Administrative (SG&A) expenses in
the second quarter of 2000 were $22.1 million compared with $19.8
million in the same period last year. The increase was principally
due to the inclusion of $1.5 million of expense related to the
Company's accounts receivable securitization program and bad debt
expense of $1.0 million related to the bankruptcy of AmeriServe
Food Distribution, Inc., a foodservice customer.
Depreciation and Amortization expense increased $1.5 million
over last year's expense level as a result of capital
expenditures.
James C. Kempner, Chief Executive Officer, commented, ``As
expected, the Company's results for the second quarter reflect the
difficult operating environment for the domestic sugar industry,
which has been characterized by a significant oversupply of
refined sugar, causing depressed prices, which in turn has
dramatically reduced profitability. While our customer service
levels have improved considerably at Diamond Crystal Brands, Inc.
(''Diamond Crystal``) foodservice operations, operating expense
levels continue to run higher than expected, primarily due to
operating inefficiencies arising from the consolidation of four
facilities into two.''
Mr. Kempner continued, ``We are confident that our company-
wide program to reduce costs will achieve a $15.0 million annual
run rate beginning in July of this year. Roughly half of those
savings are expected to come from reducing operating costs in our
sugar refining operations, with the remainder split between
Diamond Crystal and SG&A.''
Mr. Kempner added, ``Normal reduction in seasonal liquidity
needs and the sale of our marketable securities portfolio has
contributed to an improved liquidity position and has enabled us
to pay down $36.6 million in senior term debt in the last two
quarters. The Company continues to be in full compliance with all
credit agreement covenants.''
Mr. Kempner stated, ``Consistent with our previously announced
objectives of optimizing our production, packaging and logistics
assets and reducing debt, we have had discussions with the
California sugarbeet growers about their acquiring our sugarbeet
processing operations in Tracy and Woodland, California; however,
the growers have not been able to enter into a transaction with
the Company. Therefore, the Company will cease processing
sugarbeets in those facilities at the end of calendar 2000
following the completion of the fall campaign. Those facilities
will continue to package and distribute refined sugar products
without interruption in service or supply to our customers with
sugar supplies sourced from our remaining two California beet
factories and other Company processing facilities. The real estate
surrounding the facilities will be sold and the proceeds applied
to the reduction of debt.''
For the fiscal 2000 six-month period, the Company reported net
sales of $897.8 million compared to net sales of $900.8 million in
the first six months of fiscal 1999. Net income for the first half
of fiscal 2000 was $8.9 million, or $0.28 per diluted share,
versus a net loss of $16.2 million, or $(0.52) per diluted share,
in the year-ago period. Excluding a gain of $23.3 million after
tax, or $0.72 per diluted share, related to the previously
mentioned sales of the Company's marketable securities portfolio,
the Company would have reported a net loss of $14.4 million, or
$(0.44) per diluted share in the fiscal 2000 six- month period.
Excluding the previously mentioned non-recurring, non-cash charge
and securities gains in the six-month period of fiscal 1999, the
Company would have reported a net loss of $6.8 million, or $(0.22)
per diluted share.
Gross margin in the first six months of fiscal 2000 was $80.8
million compared to $85.9 million in the comparable period of
fiscal 1999. SG&A expense in the first six months of fiscal
2000 was $44.0 million versus $38.7 million in the same period
last year. First half 2000 operating income was $9.1 million
compared to $22.1 million last year.
Mr. Kempner concluded, ``In the near term, there's not much on
the horizon to indicate improvement in the fundamentals of the
domestic sugar industry. Should announced increases in acreage to
be planted in sugarbeets result in additional supplies of beet
sugar and significantly higher imports of Mexican sugar begin as
scheduled in fiscal 2001, an already over-supplied market will be
placed under further pressure. As we navigate through these
turbulent times in our industry, we continue to focus on
rationalizing our production facilities to increase throughput in
our most efficient facilities in order to maintain market share in
the most cost effective manner. We also continue to focus on cost
reduction and cash flow enhancement to help assure the
availability of adequate liquidity to finance our business
activities.''
Imperial Sugar Company is the largest processor and marketer of
refined sugar in the United States and a major distributor to the
foodservice market. The Company markets its products nationally
under the Imperial(TM), Dixie Crystals(TM), Spreckels(TM),
Pioneer(TM), Holly(TM), Diamond Crystal(TM) 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, operating results,
synergies, sugarbeet acreage, future operating efficiencies, cost
savings 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, 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 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 STATEMENTS OF OPERATIONS
(Unaudited)
(In Thousands, Except Per Share Data)
Three Months Ended Six Months Ended
March 31, March 31,
--------------------- ---------------------
2000 1999 2000 1999
---------- ---------- ---------- ----------
Net Sales $ 429,165 $ 428,997 $ 897,764 $ 900,758
Cost of Sales 392,615 393,296 816,948 814,877
---------- ---------- ---------- ----------
Gross Margin 36,550 35,701 80,816 85,881
Selling, General &
Administrative 22,059 19,804 44,004 38,697
Depreciation &
Amortization 14,030 12,496 27,667 25,060
---------- ---------- ---------- ----------
Operating Income 461 3,401 9,145 22,124
Interest Expense (14,113) (16,350) (28,415) (30,467)
Securities Gains 6,696 2,292 35,874 2,292
Loss on Equity
Investment in
Partnership (16,706) (16,706)
Other 362 398 818 814
---------- ---------- ---------- ----------
Income (Loss) Before
Income Tax (6,594) (26,965) 17,422 (21,943)
Income Tax Expense
(Benefit) ( 1,566) (8,406) 8,531 (5,749)
---------- ---------- ---------- ----------
Net Income (Loss) $ ( 5,028) $ (18,559) $ 8,891 $ (16,194)
========== ========== ========== ==========
Earnings (Loss)
Per Share
of Common Stock:
Basic $ ( 0.16) $ (0.58) $ 0.28 $ (0.52)
========== ========== ========== ==========
Diluted $ ( 0.16) $ (0.58) $ 0.28 $ (0.52)
========== ========== ========== ==========
Weighted Average Shares
Outstanding 32,276 32,139 32,242 31,227
========== ========== ========== ==========
Note: Includes the results of Diamond Crystal from November 2, 1998.
IMPERIAL SUGAR COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In Thousands)
March 31, September 30, March 31,
-------- ------------ --------
2000 1999 1999
---- ---- ----
Current Assets $ 444,495 $ 440,404 $ 530,334
Plant, Property
& Equipment - net 386,151 402,364 417,280
Goodwill and other
Intangibles - net 401,271 406,627 406,191
Other Assets 31,903 31,388 26,568
----------- ----------- -----------
Total $ 1,263,820 $ 1,280,783 $1,380,373
=========== =========== ===========
Current Liabilities $ 271,965 $ 238,315 $ 247,857
Long-term Debt 518,392 553,577 632,142
Other 111,499 115,467 119,659
Shareholders' Equity 361,964 373,424 380,715
----------- ----------- -----------
Total $1,263,820 $ 1,280,783 $1,380,373
=========== =========== ===========
Contact:
Mark Q. Huggins
Managing Director and
Chief Financial Officer
(281) 490-9587
-or-
Investor Relations:
Morgen-Walke Associates
Gordon McCoun, Eric Boyriven,
Christina Cupp
Media Contact: Stacey Reed
(212) 850-5600
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