Imperial Sugar Co. reported a net loss for the fiscal fourth quarter ended Sept. 30, 2010 of $2.3 million, or $0.19 per share, compared to a net loss from continuing operations of $0.2 million, or $0.02 per share, for the same period in fiscal 2009. For the year, the company reported net income of $136.9 million, or $11.33 per share, compared to a loss from continuing operations of $23.8 million, or $2.03 per share, for fiscal 2009. The current year results include pretax gains resulting from the settlement of insurance claims totaling $278.5 million.
Results for both fiscal 2010 and 2009 were impacted by the absence of a fully operational Port Wentworth refinery, which normally comprises approximately 60 percent of the company's refining capacity.
"Imperial Sugar Co. took important strategic steps in fiscal 2010 while managing the challenges associated with restoring full production at the Port Wentworth refinery," stated John Sheptor, president and CEO of Imperial Sugar in a prepared statement. "As production rates at the Port Wentworth refinery increased during the year, we identified facility and process modifications necessary to return the refinery to historical operating levels. We completed the last major modification in October 2010, and output improved significantly. While production days and fixed costs had a negative impact on fiscal 2010 results, the improvements that we have made should lead to sustained results at higher rates in 2011."
Sheptor continued, "Other important steps were taken in 2010 to strengthen our business and provide a path to a stronger future. Construction of the new refinery in Louisiana by our recently formed joint venture is well under way, with completion targeted for the summer of 2011. Our Natural Sweet Ventures initiative provides an exciting opportunity to expand our portfolio of all natural sweeteners. Customer interest in our stevia/sucrose products under the Steviacane(TM) brand name has been encouraging. The continued success of our strategic Mexican alliance was invaluable in dealing with the increasing complexities arising in the NAFTA sugar region, while Wholesome Sweeteners experienced significant top line and earnings growth from their organic and fair trade portfolio of sweeteners."
Net sales for the fourth quarter of fiscal 2010 increased to $264.4 million compared to $147.3 million for the same period in fiscal 2009. The increased revenues were due to 53 percent higher sales volumes owing to increased Port Wentworth refinery production, as well as 18 percent higher refined prices. Gross margin as a percent of sales was 2.7 percent in the current quarter compared to 13.3 percent last year as a result of higher raw sugar costs, which more than offset the higher sales prices.
Domestic raw sugar prices increased rapidly during the past 18 months, in part in response to significantly higher world raw sugar prices. The gains recognized on raw sugar futures contracts entered into to hedge raw sugar purchases in later periods, which did not qualify for deferral accounting, totaled $30.6 million in the current quarter compared to $27.9 million in the fourth quarter of fiscal 2009.
The company reported that at September 30, 2010, it had cash balances of $22.8 million and available, undrawn revolving credit capacity of $72 million, after deducting $22 million of borrowings and $6 million of letters of credit outstanding under that facility.