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Penford reports net income up 12% for Q1 ended May 31

22 Jun '05

5 min read

Year-to-date fiscal 2004 results include $1.1 million in pre-tax restructuring costs in the Australian and Industrial Ingredients businesses and a $0.7 million pre-tax, non-operating expense related to unamortized transaction fees associated with the Company's prior credit agreement.

Third quarter consolidated sales rose to $76.1 million, up 5% over the same period last year.

Higher volumes in the Food Ingredients and Australian operations, improved pricing in the Industrial Ingredients business and stronger Australian Dollar currency exchange rates contributed to the gain. Consolidated gross margin as a percent of sales declined to 13.2% from 16.6% in the prior year due to increased energy and chemical costs that are tracking the rising price of oil as well as higher manufacturing expense in Australia.

Operating expenses for the third quarter of fiscal 2005 increased to 8.9% of sales from 8.5% last year primarily due to employee costs. Interest expense for the third quarter rose to $1.5 million from $1.1 million last year on higher short-term interest rates in the United States.

Programs to optimize working capital and improve asset returns increased third quarter operating cash flow to $12.0 million from $7.1 million a year ago. The balance sheet remains strong with total debt outstanding declining by $12.3 million from the beginning of the fiscal year to $68.0 million. Segment Results Third quarter fiscal 2005 sales grew 22% hird quarter fiscal 2005 sales grew 22% to a record level of $13.9 million at the Food Ingredients – North America business. Quarterly volumes improved in the core potato coatings product category and in applications used in the meat, dairy and “low-carbohydrate” markets.

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