Penford Corporation (Nasdaq: PENX), a leader in renewable ingredient systems for industrial and food applications, today reported that consolidated sales for the quarter ended November 30, 2011 increased 25.6% to $90.7 million from $72.3 million a year ago. Gross margin expanded $2.6 million from last year. Consolidated net income rose 76% to $0.6 million, or $0.05 per diluted share, from $0.3 million, or $0.03 per diluted share last year.
A table summarizing quarterly financial results is shown below:
|Penford Corporation – Financial Highlights|
|(In thousands)||Q1 FY 12||Q4 FY 11||Q3 FY11||Q2 FY11||Q1 FY11|
|Sales||$ 25,924||$ 22,554||$ 23,637||$ 17,713||$ 18,336|
|Depreciation and amortization||505||486||510||553||561|
|Sales||$ 64,822||$ 61,085||$ 61,596||$ 56,591||$ 53,930|
|Operating income (loss)||743||(3,023)||(734)||(1,103)||142|
|Depreciation and amortization||2,629||2,691||2,712||2,696||2,713|
|Sales||$ 90,746||$ 83,638||$ 85,233||$ 74,304||$ 72,266|
|Operating income (loss)||4,359||(1,518)||2,506||488||2,969|
|Depreciation and amortization||3,512||3,556||3,598||3,618||3,643|
- Food Ingredients reported record quarterly sales, gross margin and operating income.
- Revenue grew more than 40%; all end market segments expanded at double-digit rates.
- Gross margin increased 29% from volume growth and higher pricing. Product mix changes reflect new business gains in specialty modified products, as well as expansion of value added corn-based applications.
- Operating income rose 24% to $6.0 million on volume and margin increases.
- Revenue increased 20% to $64.8 million reflecting higher corn prices that were passed through to customers, increased pricing from processing and manufacturing fees, higher ethanol volumes, and growth of specialty bio-products.
- Ethanol sales expanded 32% to $32.4 million. Market prices for ethanol rose about 25% from a year ago while comparable industry crush margins improved by approximately $0.10 per gallon, or about 15% from last year.
- Specialty bio-products sales grew over 40% on new business gains, higher volumes at existing accounts and unit pricing.
- Gross margin expanded $0.7 million from a year ago, as higher average unit selling prices for industrial starch and ethanol outpaced rapidly rising corn and chemical costs. Industry net corn costs increased more than 50% from last year.
- Operating results improved $0.6 million from last year’s first quarter and increased sequentially over the fourth quarter of fiscal 2011 by $3.8 million on higher throughput rates, lower unit costs and improved ethanol crush margins.
- Corporate expenses increased by $0.4 million on higher professional fees, employee costs and acquisition related charges.
- Outstanding bank debt on the Company’s $60 million bank facility fell by $6 million from August 31, 2011 to $16.1 million.
- Cash flow from operations improved to $12.2 million from $4.7 million last year.
- The effective tax rate for the first quarter was 70%, which reflects the increased tax expense for the non-deductible preferred stock dividends. The preferred stock dividends are recorded as interest expense in the statements of operations.
- The Company reported last quarter that it had executed a definitive agreement to purchase the stock and certain assets of the business currently operated by Carolina Starches. The Company expects to close the transaction in January.
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