Sugar Land / TX. (isc) Imperial Sugar Company (ISC) reported a net loss of 6,5 million USD or 0,54 USD per diluted share, for the second fiscal quarter ended March 31, 2012, compared to net income of 4,2 million USD or 0,34 USD per diluted share, for the second fiscal quarter of 2011. The prior year´s second quarter results include a 3,6 million USD pre-tax gain related to the contribution of the Gramercy, Louisiana refinery to Louisiana Sugar Refining LLC.
Net sales for the second fiscal quarter were 203,0 million USD, compared to 192,2 million USD for the same period last year. The increase in quarterly sales was principally due to a 10,5 percent increase in domestic sugar prices, which more than offset a 2,4 percent decrease in domestic sales volumes.
For the three months ended March 31, 2012, gross margin as a percent of sales was 1,1 percent compared to 5,4 percent in the prior year quarter. Raw sugar unit costs, before the impact of LIFO liquidations, increased eight percent in the current quarter when compared to the same period of the prior year. Raw sugar costs during the prior year´s second quarter benefited from the liquidation of LIFO basis inventory at a cost which was 14,3 million USD lower than then-current raw sugar costs. Higher manufacturing costs in the current quarter also contributed to the lower gross margin.
The Company sold its 50 percent voting interest in Wholesome Sweeteners, Incorporated in April 2012 for net proceeds of 60,4 million USD, subject to adjustment based on Wholesome´s closing date working capital. Capital expenditures for the six months ended March 31, 2012 totalled 7,4 million USD. As of May 08, 2012, undrawn borrowing capacity under the Company´s revolving credit agreement was 36,4 million USD, after deducting 44,3 million USD of outstanding borrowings and 7,5 million USD of letters of credit.
Six Months Ended March 31, 2012
For the six-month period ended March 31, 2012, the Company reported a net loss of 10,0 million USD or 0,83 USD per diluted share, compared to a net loss of 4,8 million USD or 0,40 USD per diluted share, for the same period last year.
Net sales for the current six-month period were 430,7 million USD compared to 419,6 million USD during the same period last year primarily due to higher domestic sugar prices. Sales volumes for the current six-month period were reduced from the same period last year as a result of the contribution of the Gramercy refinery to Louisiana Sugar Refining LLC in January 2011.
Gross margin as a percent of sales for the six months ended March 31, 2012 was 2,2 percent compared to 1,6 percent for the same period last year primarily due to higher refined sugar prices.
Pending Merger Agreement
On May 01, 2012, ISC and a subsidiary of Louis Dreyfus Commodities LLC entered into a definitive agreement whereby the Company would be acquired through a cash tender offer and second step merger at 6,35 USD per share. The proposed transaction is subject to customary closing conditions, including expiration of the applicable waiting periods under the Hart-Scott-Rodino Antitrust Improvements Act and a minimum tender of at least 662/3 percent of the Company´s total shares outstanding (see also b:eu on 2012-05-03).
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