| SUGAR LAND, Texas--(BUSINESS WIRE)--Dec. 14, 2000--Imperial
Sugar Company (AMEX:IHK - news) today reported results for the fourth
quarter and full year of the fiscal year ended September 30, 2000, and
announced the status of negotiations for financial restructuring.
The Company indicated that it was not in compliance with certain
financial covenants under its Senior Credit Agreement at September 30,
2000, and that it will not pay $12.2 million in interest on its $250
million 9 3/4% Senior Subordinated Notes (``Notes'') due December 15,
2000. The indenture for the Notes provides a thirty-day grace period. The
Company and its senior lenders have entered into an interim waiver
agreement waiving effective through January 8, 2001, this non-compliance
and the effect of not paying the scheduled December 15th interest payment
on the Notes. Under this agreement, the Senior Credit Agreement lenders
will continue to provide working capital financing for the Company's
operations. The Company also announced that the liquidity line of credit
issued in favor of the purchaser of its accounts receivable purchase
facility has been extended to January 8, 2001.
``We and our financial advisors, Wasserstein Perella & Company,
have been working over the past several months with Harris Trust and
Savings Bank, the agent bank for our Senior Credit Agreement lenders, as
well as a steering committee of lenders under that agreement, and with an
ad hoc committee of our noteholders to develop a consensual restructuring
plan that will enable us to delever our balance sheet through a conversion
of the Company's Notes into common equity and greatly enhance the
financial strength of Imperial Sugar, while enabling it to remain an
independent company under existing management,'' stated James C. Kempner,
President and CEO.
``These discussions have been constructive and fruitful, and I believe
we will soon reach an agreement with both groups of creditors which will
put the Company on track to complete a restructuring during fiscal 2001,''
Mr. Kempner continued. ``Whether a Chapter 11 filing is utilized or not to
complete the restructuring, our discussions with the two creditor groups
contemplate that our suppliers and other trade creditors will continue to
be paid in full and on time, that agreements and contracts with customers
will remain in force and that there will be no disruption in our
operations.''
Net sales for the fourth quarter were $457.2 million, compared with net
sales of $487.9 million for the year-ago period. The Company reported a
net loss of $37.1 million for the quarter, or $(1.15) per diluted share,
compared to a net loss of $8.6 million, or $(0.27) per diluted share, for
the same period last year.
Net sales in the Company's sugar segment decreased year over year,
primarily as a result 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 decreased to $19.4 million, or 4.2%
of net sales, from $39.9 million, or 8.2% of net sales, reported in the
same period a year ago. The decrease was primarily attributable to
significantly lower sales prices for refined sugar in both the sugar and
foodservice segments as well as higher energy costs, particularly in
California, which more than offset benefits from lower raw sugar costs
during the fiscal 2000 fourth quarter.
As previously announced, the Company will discontinue processing sugar
beets in December at its two Northern California sugarbeet factories and
has ceased refining operations in its Clewiston, Florida plant. As a
result, the Company took a charge in the fourth quarter of approximately
$27.5 million, or $17.9 million ($0.55 per share) after tax, of which
approximately $16.0 million before tax is related to impairment costs.
Additionally, during the fourth quarter, the Company forfeited to the
Commodity Credit Corporation (``CCC'') refined beet sugar securing $47.1
million of non-recourse loans from the CCC in full satisfaction of the
principal and interest due on those loans. The forfeited value of the
refined sugar exceeded the value realizable in a market sale.
For fiscal 2000, the Company reported net sales of $1.8 billion,
slightly below those recorded in fiscal 1999. Net loss for the full year
ended September 30, 2000, was $34.7 million, or $(1.07) per diluted share,
versus a net loss of $18.1 million, or $(0.57) per diluted share, a year
ago. Excluding securities gains of $23.3 million after tax, or $0.72 per
diluted share, and the charge for discontinuing sugar production at the
facilities described above, the Company would have reported a net loss of
$40.0 million, or $(1.24) per diluted share, in fiscal 2000. 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 $3.0 million after tax, or $0.10 per
diluted share, the Company would have reported a net loss of $10.2
million, or $(0.32) per diluted share, in fiscal 1999.
At September 30, 2000, available unused borrowing capacity under the
Senior Credit Agreement was $97.5 million. Available unused borrowing
capacity at December 12, 2000, was $81.4 million.
In light of its non-compliance with certain financial covenants at
September 30, 2000, the Company has classified substantially all of its
long-term debt as current liabilities.
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 the status of financing arrangements, the status
and outcomes of restructuring discussions, 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, the
negotiating positions of various constituencies, the results of
negotiations, 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 Twelve Months Ended
September 30, September 30,
-------------------------- --------------------------
2000 1999 2000 1999
------------ ------------ ------------ ------------
Net Sales $ 457,154 $ 487,895 $ 1,821,231 $ 1,888,630
Cost of Sales 437,761 448,041 1,682,529 1,704,339
------------ ------------ ------------ ------------
Gross Margin 19,393 39,854 138,702 184,291
Selling, General
& Administrative 24,889 24,938 87,004 85,115
Asset Impairment
& Other Charges 27,541 -- 27,541 --
Depreciation
& Amortization 10,601 12,195 51,979 51,272
------------ ------------ ------------ ------------
Operating Income
(Loss) (43,638) 2,721 (27,822) 47,904
Interest Expense (13,154) (14,072) (56,656) (59,071)
Securities Gains -- 26 35,874 4,697
Loss on Equity
Investment in
Partnership -- -- -- (16,706)
Other 147 (522) 954 1,598
------------ ------------ ------------ ------------
Loss Before
Income Tax
Benefit (56,645) (11,847) (47,650) (21,578)
Income Tax
Benefit (19,542) (3,263) (12,973) (3,454)
------------ ------------ ------------ ------------
Net Loss $ (37,103) $ (8,584) $ (34,677) $ (18,124)
============ ============ ============ ============
Basic and
Diluted Loss
Per Share
Common Stock: $ (1.15) $ (0.27) $ (1.07) $ (0.57)
Weighted
Average Shares
Outstanding 32,361,994 32,200,474 32,293,759 31,712,602
Note: Includes the results of Diamond Crystal from November 2, 1998.
IMPERIAL SUGAR COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In Thousands)
September 30, September 30,
2000 1999
---------- ----------
CURRENT ASSETS:
Cash and temporary investments $ 6,533 $ 7,925
Marketable securities 4,612 65,496
Accounts receivable 63,378 64,458
Inventories:
Finished Products 97,625 157,869
Raw and in-process materials 50,261 61,299
Supplies 39,585 39,896
---------- ----------
Total Inventory 187,471 259,064
Deferred costs and prepaid expenses 48,251 43,461
---------- ----------
Total current assets 310,245 440,404
PROPERTY, PLANT AND EQUIPMENT - net 357,681 402,364
GOODWILL & OTHER INTANGIBLES - net 395,818 406,627
OTHER ASSETS 29,946 31,388
---------- ----------
TOTAL $1,093,690 $1,280,783
========== ==========
CURRENT LIABILITIES:
Accounts payable $ 105,457 $ 141,428
Short-term borrowings 1,671 1,611
Current and deemed current maturities of
long-term debt 436,350 12,114
Deferred income taxes-net 16,285 10,719
Other current liabilities 114,646 72,443
---------- ----------
Total current liabilities 674,409 238,315
LONG TERM DEBT- net 20,000 553,577
DEFERRED INCOME TAXES- net 1,117 32,481
EMPLOYEE BENEFITS & OTHER CREDITS 79,563 82,986
SHAREHOLDERS' EQUITY 318,601 373,424
---------- ----------
TOTAL $1,093,690 $1,280,783
========== ==========
Detail of Long Term Debt
------------------------
LONG TERM DEBT:
Senior Revolving Credit Facility $ 30,000 $ 91,500
Senior Term Debt 150,767 192,068
Subordinated Debt 250,000 250,000
Other 25,583 32,123
---------- ----------
Total long term debt 456,350 565,691
Current and deemed current maturities of
long-term debt 436,350 12,114
---------- ----------
LONG TERM DEBT- net $ 20,000 $ 553,577
========== ==========
________________________
Contact:
Imperial Sugar Company
Mark Q. Huggins
Managing Director and Chief Financial Officer
281/490-9587
or
Morgen-Walke Associates
Investor Relations:
Gordon McCoun, Jeffrey Zack
Media Contact: Stacey Nield
212/850-5600 |