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

22 Jun '05

5 min read

Volumes into the “low-carb” market meet outstanding orders that are expected to be fulfilled by the end of fiscal 2005. Revenues from formulations developed for markets that represent entirely new business have more than doubled from the third quarter last year. Gross margin as a percent of sales increased to 27.4% from 24.8% for the same period a year ago as sales of higher margin products accelerated.

Australia/New Zealand sales for the third quarter rose 5% over the same period a year ago on increased volumes and appreciating foreign exchange rates. Gross margin as a percent of sales for the third quarter was 5.1% compared to 15% for the third quarter in the prior year. Higher chemical and fuel costs accounted for approximately half of the decline. Reduced production yields and throughput associated primarily with transitioning manufacturing processes to more value-added product lines contributed to the balance of the decrease.

Fiscal 2005 third quarter revenues at the Industrial Ingredients – North America business were comparable to the same period last year. Pricing has improved in core, international and specialty products categories. Higher average selling prices have offset rising utility and chemical expenses as well as a 17% increase in natural gas costs. Sales of higher margin specialty starches rose 10% in the third quarter and 35% year-to-date. Total volume decreased 6% with lower margin starches declining from peaks achieved in the tt rising utility and chemical expenses as well as a 17% increase in natural gas costs. Sales of higher margin specialty starches rose 10% in the third quarter and 35% year-to-date. Total volume decreased 6% with lower margin starches declining from peaks achieved in the third quarter of fiscal 2004.

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