Imperial Sugar Plans $3 Dividend

Imperial Sugar (IPSU Quote) swung to a fourth-quarter profit and declared a $3 special dividend.

The Sugar Land, Texas, company made $15.5 million, or $1.34 a share, from continuing operations for the quarter ended Sept. 30, reversing the year-ago continuing operations loss of $2.8 million, or 26 cents a share. Sales rose to $240 million from $227 million a year earlier.

Gross margin as a percentage of revenue increased to 15.5% in the fourth fiscal quarter from 4.7% in the same quarter of the previous year. This margin improvement was primarily attributable to higher sales prices offset by higher energy, freight and raw sugar costs in the fourth quarter of fiscal 2006.

"Looking into our 2007 fiscal year, we have seen reduced market prices and margins in the industrial channel and parts of the foodservice channel," Imperial said. "At the same time, other areas have yet to be significantly affected by this softening. In addition, full impact of the industrial pricing and margin reductions will be delayed because of our industrial contracted position as many customers contract with us before the beginning of the fiscal year for periods of up to a full year.

"Nevertheless, while it is not possible to predict the magnitude or duration of sugar pricing trends, fiscal 2007 prices and margins are expected to be below 2006 levels. To some extent, we expect these dynamics to be offset by reduced costs of raw sugar and lower energy costs relative to fiscal 2006. As a result of the combination of these factors, we continue to believe we can maintain a profit outlook that is superior to historical averages."

The dividend is payable Jan. 5 to holders of record Dec. 26.