The Penford Corporation reported a net income of US$0.1m, US$0.02/share, for its Q2 ended 28 February, versus a net loss of US$0.8m, US$0.11/share, in the previous year.
Go deeper with GlobalData
This year’s Q2 results include a pretax restructuring charge of US$1.4m, said the company, which decreased earnings by US$0.12 per share. This charge relates primarily to employee termination costs and costs associated with the closure of the Bellevue office as Penford relocates its corporate headquarters to Denver, in accordance with the strategic restructuring announced on 4 January 2002. The company also expects to incur incremental operating expenses as it opens the Denver office and hires new employees.
Incremental operating expenses of US$0.2m were incurred in the Q2. Penford expects to record US$0.2-US$0.3m of incremental costs each quarter until the transition is completed as expected late this fall.
Net income, prior to restructuring charges, was US$1m, US$0.14/share.
Q2 sales decreased 2% to US$54.8m, versus US$55.8m year on year. Lower sales volumes of industrial products more than offset improved sales volumes of food products in the US.
US Tariffs are shifting - will you react or anticipate?
Don’t let policy changes catch you off guard. Stay proactive with real-time data and expert analysis.
By GlobalDataFor the H1 2002, Penford reported earnings of US$1.4m, US$0.18/share after the restructuring charge, versus a net loss last year of US$0.6m, US$0.08/share, inclusive of an extraordinary loss of US$0.9m, or US$0.12/share. Absent the restructuring charge, net income for the first six months of fiscal 2002 was US$2.3m, US$0.30/share.
H1 sales increased 3% to US$111.1m, versus US$107.7m year on year. Growth of food products in the US and the positive impact of the acquisition of Penford Australia in September 2000 offset sales volume declines from industrial products.
Thomas D. Malkoski, CEO of Penford, said:”Continued growth of our global food ingredients business and lower key cost inputs have resulted in improved operating performance for the H1 2002. Improved profitability and working capital management over the past three quarters have allowed us to reduce our debt by more than US$16m from peak levels last May,” he said.
“Our US food ingredients group increased revenue 12% over last year’s Q2 and 23% over the H1 2001. I’m very encouraged by the pipeline of new initiatives we have in our coatings and protein product categories. Also, our Australian operations have benefited from increased export demand for our core product lines in key Asian markets,” Malkoski said.
“On the industrial side of our business, natural gas costs have declined substantially over last year’s historic highs, but production levels at our paper industry customers are still weak. We remain concerned with the near-term outlook for the health of the US paper industry although most indicators point to a modest recovery in paper demand for the H2 of calendar 2002,” Malkoski added.
“Penford’s long term growth depends on delivering technically differentiated starch-based ingredients that bring enhanced functional benefits to our customers’ products and processes. Despite the recent economic downturn, we are optimistic that the strategic resources we have in research, market position and specialty manufacturing will continue to deliver strong value to our customers and shareholders in the marketplace,” Malkoski said.
