Saxonburg, Pa.-based fungal technology giant Sylvan has posted net income of US$1m, or US$0.18 per share, for its Q2 ended 30 June, down from US$1.4m, or US$0.25 per share, in the Q2 2001. Operating income for the Q2 2002 was US$1.8m.
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Net income for the H1 ended 30 June was US$2.2m, or US$0.4 per share, compared to US$2.5m, or US$0.46 per share, for the corresponding 2001 period. Operating income for the H1 2002 was US$4.1m, and strong cash flow allowed for debt reduction payments of over US$5.6m.
Segment information
(in US$000s)
Spawn Products Segment Fresh Mushrooms Segment
2002 2001 %Change 2002 2001 %Change
Second Quarter
Net Sales $15,401 $15,364 0 $6,316 $6,031 +5
Operating Income 2,390 2,681 -11 748 826 -9
Six Months
Net Sales $30,407 $30,990 -2 $12,555 $11,592 +8
Operating Income 4,957 5,578 -11 1,565 1,344 +16
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By GlobalDataSpawn product sales volume for the Q2 2002 fell 2% year on year, with a 4% decrease in the Americas and a 1% decrease in Sylvan’s overseas markets. Sales of spawn- related products
(mushroom nutritional supplements and disease-control agents) were however up 5% and accounted for 19% of Sylvan’s sales in the Q2 2002. Operating income of the bioproducts division, a component of the Spawn Products Segment, fell US$140,000, due to a reduction in its sales of a specialised variety of mushroom. For the H1 comparison, overall spawn product sales volume decreased 1% and bioproducts operating income decreased US$360,000.
The Fresh Mushrooms Segment Q2 operating income fell 9% compared with the corresponding quarter of 2001, but H1 operating income was 16% higher year on year.
Chairman and CEO Dennis C. Zensen said: “Quincy’s performance during the H1 2002 was excellent and very close to our 2002 plan. Our European spawn operations are close to budget; but, as expected, our bioproducts and US spawn operations are running behind our 2001 performance levels. This will probably continue in the H2 2002. Historically, Sylvan’s Q2 is weaker due to the seasonality of our European spawn operations; however, I remain confident that Sylvan will reach our 2002 expectations of between US$0.9 and US$0.95 per share.”
Condensed consolidated statements of income
(In US$000s except share data)
Three months ended Six months ended
30 June, 1 July, 30 June, 1 July,
2002 2001 2002 2001
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
Net sales $21,388 $21,074 $42,307 $41,954
Operating costs
and expenses:
Cost of sales 12,554 12,194 24,632 24,105
Selling, administration,
research and
development 5,570 5,005 10,741 10,174
Depreciation 1,421 1,309 2,815 2,686
19,545 18,508 38,188 36,965
Operating income 1,843 2,566 4,119 4,989
Interest expense 447 625 877 1,243
Other income (expense) 62 41 64 (6)
Income before income
taxes 1,458 1,982 3,306 3,740
Income tax expense 471 594 1,082 1,122
Minority interest 2 16 24 70
Net income $985 $1,372 $2,200 $2,548
Diluted earnings per
share $0.18 $0.25 $0.40 $0.46
Equivalent diluted
shares 5,499,634 5,580,688 5,491,152 5,566,012
