Penford Provides Update on Flood Situation
20 June 2008 - 7:45AM
Business Wire
Penford Corporation (Nasdaq: PENX), announced today that its
principal subsidiary, Penford Products Co., is making significant
progress in the restoration of its Cedar Rapids, IA plant. The
plant was shut down on June 12, 2008 due to record flooding of the
Cedar River and government-ordered mandatory evacuation of the
plant and surrounding areas. The impact has been widespread and the
entire community is collaborating to recover in and around Cedar
Rapids. Penford Products sales and technical service personnel are
working intensively to assist customers in meeting their
requirements. The plant was entered and surveyed early this week.
Outside resources have been engaged and are now working on-site
with Penford employees in the evaluation and clean-up phase of the
recovery. The Company plans to begin re-occupying sections of its
Research and Development and Administrative buildings this week. It
is still too early to estimate total damage costs or when the plant
will become fully operational. However, the Company presently
anticipates that the facility will not be in position to
manufacture significant product volumes prior to the end of this
August. Penford has in place National Flood Insurance Program and
other insurance policies with highly rated insurance companies.
This coverage includes property damage and business interruption
protection. Subject to the terms of the policies and the applicable
deductibles, Penford estimates that its aggregate policy limits are
approximately $30 to $35 million. The insurers have been notified
and loss adjusters have started visiting the plant. Penford is
unable to provide assurance at this time as to the amount or timing
of the ultimate recoveries under its insurance policies. The
Company�s potato starch manufacturing operations supporting its
North American Food Ingredients business were not affected by the
Cedar Rapids flood and all continue to produce at planned levels.
�We have an experienced team of exceptional employees who are
responding to this event,� said Tom Malkoski, Penford Corporation
President and Chief Executive Officer. �Detailed recovery plans are
in place and are being energetically implemented. In addition to
its insurance policies, the Company believes that it has sufficient
available capacity under its existing credit facilities to fund
expenditures required to restore the plant to optimal operating
conditions. We are committed to a complete recovery of the business
and to resume supplying our customers as quickly as possible.�
About Penford Corporation Penford Corporation develops,
manufactures and markets specialty natural-based ingredient systems
for a variety of food and industrial applications. Penford has nine
locations in the United States, Australia and New Zealand. The
statements contained in this release that are not historical facts
are forward-looking statements that represent management�s beliefs
and assumptions based on currently available information.
Forward-looking statements can be identified by the use of words
such as "anticipates," �believes,� �may,� �will,� �plans,� or
comparable terminology or by discussions of strategies or trends.
Although the Company believes that the expectations reflected in
such forward-looking statements are reasonable, it cannot give any
assurances that these expectations will prove to be correct. Such
statements by their nature involve substantial risks and
uncertainties that could significantly affect expected results.
Actual future results could differ materially from those described
in such forward-looking statements, and the Company does not intend
to update or revise any forward-looking statements, whether as a
result of new information, future events or otherwise. Among the
factors that could cause actual results to differ materially are
the risks and uncertainties discussed in this release and those
described from time to time in other filings made by the Company
with the Securities and Exchange Commission which include, but are
not limited to, competition; the possibility of interruption of
business activities due to equipment problems, accidents, strikes,
weather or other factors; product development risk; changes in corn
and other raw material prices and availability; expectations
regarding the ethanol facility; changes in general economic
conditions or developments with respect to specific industries or
customers affecting demand for the Company�s products, including
unfavorable shifts in product mix; unanticipated costs, expenses or
third-party claims; the risk that results may be affected by
construction delays, cost overruns, technical difficulties,
nonperformance by contractors or changes in capital improvement
project requirements or specifications; interest rate, chemical and
energy cost volatility; foreign currency exchange rate
fluctuations; changes in assumptions used for determining employee
benefit expense and obligations; other unforeseen developments in
the industries in which Penford operates; and other factors
described in the �Risk Factors� section in reports filed by the
Company with the Securities and Exchange Commission.
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