Attached files
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| 8-K - FORM 8-K - PENFORD CORP | d81259e8vk.htm |
Exhibit 99.1
| Contacts: | Steven O. Cordier Senior Vice President and CFO Penford Corporation 303-649-1900 steve.cordier@penx.com |
Penford Reports Second Quarter Fiscal 2011 Financial Results
Revenue expanded 19% on higher average selling prices and volume increases in both segments.
Operating income of $0.5 million improved $1.6 million from the prior year period.
Demand for the Company’s value added product lines trending higher.
CENTENNIAL, Co., April 7, 2011 — Penford Corporation (Nasdaq: PENX), a leader in renewable
ingredient systems for industrial and food applications, today reported that consolidated sales for
the quarter ended February 28, 201l increased 19% to $74.3 million from $62.3 million a year ago.
Loss from continuing operations was $1.6 million, or $(0.13) per diluted share, for the quarter
ended February 28, 2011 compared with a loss from continuing operations of $1.8 million, or $(0.17)
per diluted share last year.
A table summarizing quarterly financial results is shown below:
| Penford Corporation — Financial Highlights | ||||||||||||||||||||
| (In thousands except per share data) | Q2 FY11 | Q1 FY11 | 4Q FY10 | 3Q FY10 | Q2 FY10 | |||||||||||||||
Industrial Ingredients: |
||||||||||||||||||||
Sales |
$ | 56,591 | $ | 53,930 | $ | 45,633 | $ | 42,010 | $ | 46,065 | ||||||||||
Gross margin |
1,458 | 2,904 | (1,907 | ) | (3,847 | ) | 1,229 | |||||||||||||
Operating income (loss) |
(1,103 | ) | 142 | (5,098 | ) | (6,847 | ) | (1,721 | ) | |||||||||||
Depreciation and amortization |
2,696 | 2,713 | 2,716 | 2,709 | 2,707 | |||||||||||||||
Food Ingredients: |
||||||||||||||||||||
Sales |
$ | 17,713 | $ | 18,336 | $ | 17,369 | $ | 19,899 | $ | 16,228 | ||||||||||
Gross margin |
5,385 | 6,353 | 5,406 | 7,112 | 4,833 | |||||||||||||||
Operating income |
3,576 | 4,808 | 3,698 | 5,018 | 2,848 | |||||||||||||||
Depreciation and amortization |
553 | 561 | 555 | 564 | 605 | |||||||||||||||
Consolidated: |
||||||||||||||||||||
Sales |
$ | 74,304 | $ | 72,266 | $ | 63,002 | $ | 61,909 | $ | 62,293 | ||||||||||
Gross margin |
6,843 | 9,257 | 3,499 | 3,265 | 6,062 | |||||||||||||||
Operating income (loss) |
488 | 2,969 | (2,796 | ) | (4,091 | ) | (1,116 | ) | ||||||||||||
Depreciation and amortization |
3,618 | 3,643 | 3,642 | 3,631 | 3,717 | |||||||||||||||
Food Ingredients Results
| • | Food Ingredients reported record second quarter sales, up 9% from the prior year on volume gains and product mix changes, reflecting strong demand for high performance applications as well as better prices on less modified products. | ||
| • | Sales of applications in several categories grew at double-digit rates, including dairy, pet and gluten-free bakery products. Non-coating revenues totaled 60% of the segment compared with 45% two years ago. | ||
| • | Product development, customer trials and commercialization activity remains strong. | ||
| • | Gross margin improved 11% from last year on higher revenues and stable total unit costs. Operating income increased 26% from a year ago on top-line gains and lower costs. |
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Industrial Ingredients Results
| • | Quarterly revenue grew 23% to $56.6 million in fiscal 2011 from $46.1 million from a year ago on higher average selling prices for industrial starches as well as increases in fuel ethanol volumes and pricing. | ||
| • | Demand for products positioned as alternatives for petrochemical derivatives continues to expand at double-digit rates while customer trials of our new fluorochemical replacement product continue. | ||
| • | Sales of ethanol in the second quarter of fiscal 2011 increased 43% to $25.8 million from $18.1 million last year. Market prices for ethanol rose 24% from a year ago. Market crush margins declined by approximately $0.25 per gallon from the second quarter of last year due to corn prices which were 69% higher than last year. | ||
| • | Gross margin expanded 19% from the prior year despite higher net corn costs. Higher prices and stronger throughput rates as well as lower manufacturing costs helped offset increased input costs. | ||
| • | Segment operating income changed $0.6 million on stronger ethanol activity, better industrial starch prices, improved plant efficiencies and lower operating expenses. |
Consolidated Financial Results
| • | Consolidated operating expenses declined 14% from a year ago. | ||
| • | Interest expense, which includes dividends on preferred stock that are not deductible for income taxes, was $2.3 million compared with $1.6 million last year. | ||
| • | Consolidated gross margin increased 13% to $6.8 million and consolidated operating income rose $1.6 million to $0.5 million from an operating loss of $1.1 million in the same period last year. Both business segments contributed to improved financial results in the quarter. |
Conference Call
Penford will host a conference call to discuss second quarter fiscal 2011 financial and operational
results today, April 7, 2011 at 9:00 a.m. Mountain time (11:00 a.m. Eastern time). Access
information for the call and web-cast can be found at www.penx.com. To participate in the
call on April 7, 2011, please phone 1-877-407-9205 at 8:50 a.m. Mountain Time. A replay will be
available at www.penx.com.
About Penford Corporation
Penford Corporation develops, manufactures and markets specialty, natural-based ingredient systems
for a variety of industrial and food applications. Penford has five manufacturing and/or research
locations in the United States.
The statements contained in this release that are not historical facts are forward-looking
statements that represent management’s beliefs and assumptions based on currently available
information. Forward-looking statements can be identified by the use of words such as “believes,”
“may,” “will,” “looks,” “should,” “could,” “anticipates,” “expects,” or comparable terminology or
by discussions of strategies or trends. Although the Company believes that the expectations
reflected in such forward-looking statements are reasonable, it cannot give any assurances that
these expectations will prove to be correct. Such statements by their nature involve substantial
risks and uncertainties that could significantly affect expected results. Actual future results
could differ materially from those described in such forward-looking statements, and the Company
does not intend to update or revise any forward-looking statements, whether as a result of new
information, future events or otherwise. Among the factors that could cause actual results to
differ materially are the risks and uncertainties discussed in this release and those described
from time to time in other filings with the Securities and Exchange Commission which include, but
are not limited to: competition; the possibility of interruption of business activities due to
equipment problems, accidents, strikes, weather or other factors; product development risk; changes
in corn and other raw material prices and availability; the Company’s inability to comply
with the terms of instruments governing the Company’s debt; the effects of the current economic
recession as well as other changes in general economic conditions or developments with respect to
specific industries or customers affecting demand for the Company’s products, including
unfavorable shifts in product mix; unanticipated costs, expenses or third party claims; interest
rate, chemical and energy cost volatility; changes in returns on pension plan assets and/or
assumptions used for determining employee benefit expense and obligations; unforeseen developments
in the industries in which Penford operates; and other factors described in the “Risk Factors”
section in reports filed by the Company with the Securities and Exchange Commission.
# # #
CHARTS TO FOLLOW
CHARTS TO FOLLOW
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| Three months ended | Six months ended | |||||||||||||||
| Penford Corporation | February 28 | February 28 | ||||||||||||||
| Financial Highlights | 2011 | 2010 | 2011 | 2010 | ||||||||||||
| (In thousands except per share data) | (unaudited) | (unaudited) | ||||||||||||||
Consolidated Results |
||||||||||||||||
Sales |
$ | 74,304 | $ | 62,293 | $ | 146,570 | $ | 129,363 | ||||||||
Loss from continuing operations |
$ | (1,575 | ) | $ | (1,801 | ) | $ | (1,239 | ) | $ | (745 | ) | ||||
Income from discontinued operations, net of tax |
— | 13,048 | — | 16,531 | ||||||||||||
Net income (loss) |
$ | (1,575 | ) | $ | 11,247 | $ | (1,239 | ) | $ | 15,786 | ||||||
Loss per share, diluted — continuing operations |
$ | (0.13 | ) | $ | (0.17 | ) | $ | (0.10 | ) | $ | (0.08 | ) | ||||
Income per share, diluted — discontinued operations |
— | 1.16 | — | 1.48 | ||||||||||||
Income (loss) per share, diluted |
$ | (0.13 | ) | $ | 0.99 | $ | (0.10 | ) | $ | 1.40 | ||||||
Cash Flows |
||||||||||||||||
Cash flow provided by (used in) continuing operations: |
||||||||||||||||
Operating activities |
$ | (6,626 | ) | $ | (206 | ) | $ | (1,959 | ) | $ | 11,613 | |||||
Investing activities |
(1,718 | ) | 8,965 | (3,403 | ) | 16,902 | ||||||||||
Financing activities |
8,320 | (28,136 | ) | 5,339 | (34,055 | ) | ||||||||||
| (24 | ) | (19,377 | ) | (23 | ) | (5,540 | ) | |||||||||
Net cash flow provided by (used in) discontinued
operations |
— | (5,250 | ) | — | 620 | |||||||||||
Total cash used |
$ | (24 | ) | $ | (24,627 | ) | $ | (23 | ) | $ | (4,920 | ) | ||||
Balance Sheets
| February 28, | August 31, | |||||||
| 2011 | 2010 | |||||||
| (unaudited) | ||||||||
Current assets |
$ | 68,468 | $ | 61,115 | ||||
Property, plant and equipment, net |
108,824 | 111,930 | ||||||
Other assets |
34,720 | 35,363 | ||||||
Total assets |
212,012 | 208,408 | ||||||
Current liabilities |
24,198 | 26,000 | ||||||
Long-term debt |
27,324 | 21,038 | ||||||
Redeemable preferred stock |
36,492 | 34,104 | ||||||
Other liabilities |
44,211 | 43,694 | ||||||
Shareholders’ equity |
79,787 | 83,572 | ||||||
Total liabilities and equity |
$ | 212,012 | $ | 208,408 | ||||
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| Three months ended | Six months ended | |||||||||||||||
| Penford Corporation | February 28 | February 28 | ||||||||||||||
| Consolidated Statements of Operations | 2011 | 2010 | 2011 | 2010 | ||||||||||||
| (In thousands except per share data) | (unaudited) | (unaudited) | ||||||||||||||
Sales |
$ | 74,304 | $ | 62,293 | $ | 146,570 | $ | 129,363 | ||||||||
Cost of sales |
67,461 | 56,231 | 130,470 | 112,673 | ||||||||||||
Gross margin |
6,843 | 6,062 | 16,100 | 16,690 | ||||||||||||
Operating expenses |
5,235 | 6,054 | 10,430 | 12,542 | ||||||||||||
Research and development expenses |
1,120 | 1,124 | 2,214 | 2,121 | ||||||||||||
Income (loss) from operations |
488 | (1,116 | ) | 3,456 | 2,027 | |||||||||||
Interest expense |
2,303 | 1,621 | 4,572 | 3,420 | ||||||||||||
Non-operating income (expense), net |
(1 | ) | (27 | ) | 88 | 609 | ||||||||||
Loss before income taxes |
(1,816 | ) | (2,764 | ) | (1,028 | ) | (784 | ) | ||||||||
Income tax expense (benefit) |
(241 | ) | (963 | ) | 211 | (39 | ) | |||||||||
Loss from continuing operations |
(1,575 | ) | (1,801 | ) | (1,239 | ) | (745 | ) | ||||||||
Income from discontinued operations, net of tax |
— | 13,048 | — | 16,531 | ||||||||||||
Net income (loss) |
$ | (1,575 | ) | $ | 11,247 | $ | (1,239 | ) | $ | 15,786 | ||||||
Weighted average common shares and equivalents
outstanding, diluted |
12,257 | 11,204 | 12,239 | 11,193 | ||||||||||||
Loss per share, diluted — continuing operations |
$ | (0.13 | ) | $ | (0.17 | ) | $ | (0.10 | ) | $ | (0.08 | ) | ||||
Income per share, diluted — discontinued operations |
— | 1.16 | — | 1.48 | ||||||||||||
Income (loss) per share, diluted |
$ | (0.13 | ) | $ | 0.99 | $ | (0.10 | ) | $ | 1.40 | ||||||
# # #
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