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, 2011 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|
|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|
|Depreciation and amortization||553||561||555||564||605|
|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.
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 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.
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