- Fourth quarter diluted EPS improved
to $0.23 from a loss in last year’s fourth quarter.
- Full year diluted EPS increased to
$0.60 from $0.32 in fiscal year 2013.
- The Company’s Specialty Food and
Bio-Products businesses each grew by double digits in the fourth
quarter and fiscal year.
- On October 14, 2014, the Company
entered into a merger agreement with Ingredion
Incorporated.
Penford Corporation (Nasdaq: PENX), a leader in ingredient
systems for food and industrial markets, today reported fourth
quarter and fiscal year 2014 results.
Fiscal 2014 net income improved 94% over 2013 to $7.8 million.
Diluted earnings per share for the fiscal year ended August 31,
2014, increased to $0.60 from $0.32 a year ago. Gross margin
expanded by over 20% to $54.3 million for the year, benefiting from
higher profitability in both divisions. Consolidated sales for the
year were $443.9 million compared with $467.3 million in the last
fiscal year, primarily reflecting lower corn prices that were
passed through to customers and reduced industrial starch and
by-product revenues.
Fourth quarter net income increased to $3.0 million, or $0.23
per diluted share, from a loss in last year’s comparable quarter.
Gross margin in the fourth quarter rose to $16.6 million, more than
double last year’s result. Quarterly consolidated sales were $109.1
million compared to $117.4 million in fourth quarter 2013.
Penford Corporation - Financial
Highlights:
3 Months Ended
August 31
Year Ended August
31
(In thousands)
2014
2013
Change
2014
2013
Change
Food Ingredients: Sales $ 32,343 $ 28,441 13.7 % $ 126,590 $
111,234 13.8 % Gross Margin 9,982 9,111 9.6 % 37,641 34,399 9.4 %
EBITDA* 6,589 6,678 (1.3 )% 26,602 25,326 5.0 %
Industrial Ingredients: Sales $ 76,744 $ 88,986 (13.8 )% $
317,283 $ 356,016 (10.9 )% Gross Margin 6,580 (1,515 ) N/A 16,666
10,648 56.5 % EBITDA* 4,121 (2,114 ) N/A 12,838 7,721 66.3 %
Consolidated: Sales $ 109,086 $ 117,427 (7.1 )% $ 443,873 $
467,250 (5.0 %) Gross Margin 16,561 7,597 118.0 % 54,307 45,047
20.6 % EBITDA* 7,692 1,784 331.2 % 27,871 22,805 22.2 % Net
income(loss) 2,954 (949 ) N/A 7,753 4,007 93.5 %
* See the Reconciliation Table
below.
Highlights for the quarter and the year are as
follows:
Food Ingredients Division
- Food Ingredients revenue increased 14%
to a record $126.6 million for the year on strong growth in several
specialty starch segments and the acquisition of Gum
Technology.
- Fourth quarter revenue also rose by 14%
to $32.3 million, and gross margin improved 10% on double-digit
increases in several product segments. Operating expenses increased
by 50% in the quarter, primarily due to the Gum Technology
acquisition, additional commercial resources and some one-time
costs associated with expanded R&D facilities.
Industrial Ingredients Division
- Fiscal year revenue declined by 11% to
$317.3 million largely due to the declining market price of corn
which reduced industrial starch pass-through by 33% and by-product
revenues by 24%. Full year gross margin expanded 56% to $16.7
million on improved ethanol market dynamics, growth of our
specialty bio-products, and lower cost of physical corn. In the
2014 third quarter, the Company announced an adjustment to the
estimated useful lives of certain assets. This change reduced
depreciation expenses by $1.4 million for the year.
- In the fourth quarter, gross margin
improved by $8.1 million to $6.6 million from a loss in last year’s
quarter. Revenue from specialty bio-products grew by double-digits
on multiple new customer gains.
Credit Facility
- On August 1, 2014, Penford closed on
new $170 million credit facilities, replacing a prior revolving
credit agreement.
Merger Details
- The Company entered into a merger
agreement with Ingredion Incorporated on October 14, 2014.
- When the transaction closes, Ingredion
will acquire all outstanding shares of Penford for $19.00 in cash
per share.
- The transaction is subject to Penford
shareholder and regulatory approvals as well as other customary
closing conditions.
As a result of the announcement of the definitive merger
agreement with Ingredion Incorporated, Penford Corporation will not
host a conference call to discuss the results of the fourth quarter
and full fiscal year 2014.
About Penford Corporation
Penford Corporation develops, manufactures and markets specialty
ingredient systems for a variety of food and industrial products.
Penford operates six manufacturing facilities and three research
and development centers in the United States.
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 “believes,” “may,” “will,” “looks,” “should,” “could,”
“anticipates,” “expects,” 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 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; the Company’s inability to comply with the terms of
instruments governing the Company’s debt; changes in general
economic conditions or developments with respect to specific
industries or customers affecting demand for the Company’s
products, including changes in government rules or incentives
affecting ethanol consumption, unfavorable shifts in product mix;
unanticipated costs, expenses or third party claims; impairment of
the Company’s long-lived assets that could result in a noncash
charge to reported earnings; interest rate, chemical and energy
cost volatility; changes in returns on pension plan assets and/or
assumptions used for determining employee benefit expense and
obligations; unforeseen developments in the industries in which
Penford operates; and other factors described in the “Risk Factors”
section in reports filed with the Securities and Exchange
Commission.
Penford Corporation
Financial Highlights
Three months endedAugust 31
Year ended August 31
(In thousands, except per share data)
2014
2013
2014
2013
(unaudited)
Consolidated Results
Sales $ 109,086 $ 117,427 $ 443,873 $ 467,250 Income
(loss) from operations $ 5,814 $ (1,421 ) $ 15,291 $ 9,404
Net income (loss) $ 2,954 $ (949 ) $ 7,753 $ 4,007 Earnings
(loss) per share, diluted $ 0.23 $ (0.08 ) $ 0.60 $ 0.32
Cash Flows Cash flow provided by (used in)
operations: Operating activities $ 6,717 $ 10,069 $ 18,054 $ 24,649
Investing activities (4,909 ) (5,861 ) (22,325 ) (12,062 )
Financing activities
(2,002 )
(4,244 ) 4,239
(12,520 ) Total cash
provided by (used in ) operations $ (194 ) $ (36 ) $ (32 ) $ 67
Balance Sheets
August 31,2014
August 31,2013 Current
assets $ 98,444 $ 90,114 Property, plant and equipment, net 114,804
112,141 Other assets 25,942 22,363 Total assets
239,190 224,618 Current liabilities 39,015
35,640 Long-term debt 76,665 72,739 Other liabilities 31,377 33,346
Shareholders’ equity 92,133 82,893 Total liabilities
and equity $ 239,190 $ 224,618
Penford Corporation
Consolidated Statements of
Operations
Three months ended August 31, Year ended August 31,
(Unaudited)
(In thousands, except per share data) 2014
2013 2014
2013 Sales $ 109,086 $ 117,427 $ 443,873 $
467,250 Cost of sales 92,525 109,830
389,566 422,203 Gross margin 16,561 7,597 54,307
45,047 Operating expenses 9,088 7,504 33,407 29,773 Research
and development expenses 1,659 1,514
5,609 5,870 Income (loss) from operations
5,814 (1,421 ) 15,291 9,404 Interest expense 1,019 927 3,583
3,989 Other non-operating income (expense), net (262 )
7 766 75 Income (loss) before income
taxes 4,533 (2,341 ) 12,474 5,490 Income tax expense
(benefit) 1,579 (1,392 ) 4,721
1,483 Net income (loss) $ 2,954 $ (949 ) $ 7,753 $ 4,007
Weighted average common shares and equivalents outstanding,
diluted 12,895 12,431 12,858 12,618 Earnings (loss) per
common share, diluted $ 0.23 $ (0.08 ) $ 0.60 $ 0.32
Penford CorporationReconciliation of
Non-GAAP Measure
To supplement the segment and consolidated financial results
prepared in accordance with generally accepted accounting
principles (“GAAP”), the Company utilizes a non-GAAP financial
measure-net income (loss) before interest, taxes, depreciation and
amortization expense (“EBITDA”). The Company uses EBITDA to
evaluate performance and establish goals. The Company believes that
this measure is valuable to investors in assessing the Company’s
operating results when viewed in conjunction with GAAP results.
This non-GAAP measure is not a substitute for, or an alternative
to, the corresponding measure calculated in accordance with
GAAP.
Reconciliation of
non-GAAP EBITDA to GAAP Operating Income (Loss)
(In thousands)
Three months
ended August 31, 2014
Year ended August
31, 2014
Food
Ingredients
IndustrialIngredients
Consolidated
Food
Ingredients
IndustrialIngredients
Consolidated
Operating income $ 5,996 $ 2,659 $ 5,814 $ 24,345 $ 2,587 $
15,291 Depreciation and amortization 594 1,458 2,140 2,260
9,219 11,814 Iowa loan forgiveness - - - - 1,000 1,000 Loss on
early extinguishment of debt - - (265 ) - - (265 ) Other
non-operating income (loss) (1 ) 4
3 (3 )
32 31 EBITDA $
6,589 $ 4,121 $ 7,692
$ 26,602 $ 12,838
$ 27,871
Three months
ended August 31, 2013
Year ended August
31, 2013
Food
Ingredients
Industrial
Ingredients
Consolidated
Food
Ingredients
Industrial
Ingredients
Consolidated
Operating income (loss) $ 6,168 $ (4,738 ) $ (1,421 ) $
23,265 $ (3,238 ) $ 9,404 Depreciation and amortization 510
2,607 3,198 2,061 10,933 13,326 Other non-operating income -
17 7
- 26
75 EBITDA $ 6,678 $ (2,114 )
$ 1,784 $ 25,326 $ 7,721
$ 22,805
Penford CorporationEllen G. Grinde, 630-590-0707Director,
Investor Relations and Communicationsegrinde@penx.com
(MM) (NASDAQ:PENX)
Historical Stock Chart
From Jun 2024 to Jul 2024
(MM) (NASDAQ:PENX)
Historical Stock Chart
From Jul 2023 to Jul 2024