Imperial Sugar Company Announces Second Fiscal Quarter 2012 Results

SUGAR LAND, Texas--(BUSINESS WIRE)--

Imperial Sugar Company IPSU today reported a net loss of $6.5 million, or $0.54 per diluted share, for the second fiscal quarter ended March 31, 2012, compared to net income of $4.2 million, or $0.34 per diluted share, for the second fiscal quarter of 2011. The prior year's second quarter results include a $3.6 million pretax gain related to the contribution of the Gramercy, Louisiana refinery to Louisiana Sugar Refining, LLC.

Net sales for the second fiscal quarter were $203.0 million, compared to $192.2 million for the same period last year. The increase in quarterly sales was principally due to a 10.5% increase in domestic sugar prices, which more than offset a 2.4% decrease in domestic sales volumes.

For the three months ended March 31, 2012, gross margin as a percent of sales was 1.1% compared to 5.4% in the prior year quarter. Raw sugar unit costs, before the impact of LIFO liquidations, increased 8% in the current quarter when compared to the same period of the prior year. Raw sugar costs during the prior year's second quarter benefited from the liquidation of LIFO basis inventory at a cost which was $14.3 million lower than then-current raw sugar costs. Higher manufacturing costs in the current quarter also contributed to the lower gross margin.

The Company sold its 50% voting interest in Wholesome Sweeteners, Incorporated in April 2012 for net proceeds of $60.4 million, subject to adjustment based on Wholesome's closing date working capital. Capital expenditures for the six months ended March 31, 2012 totaled $7.4 million. As of May 8, 2012, undrawn borrowing capacity under the Company's revolving credit agreement was $36.4 million, after deducting $44.3 million of outstanding borrowings and $7.5 million of letters of credit.

Six Months Ended March 31, 2012

For the six-month period ended March 31, 2012, the Company reported a net loss of $10.0 million, or $0.83 per diluted share, compared to a net loss of $4.8 million, or $0.40 per diluted share, for the same period last year.

Net sales for the current six-month period were $430.7 million compared to $419.6 million during the same period last year primarily due to higher domestic sugar prices. Sales volumes for the current six-month period were reduced from the same period last year as a result of the contribution of the Gramercy refinery to Louisiana Sugar Refining, LLC in January 2011.

Gross margin as a percent of sales for the six months ended March 31, 2012 was 2.2% compared to 1.6% for the same period last year primarily due to higher refined sugar prices.

Pending Merger Agreement

On May 1, 2012, the Company and a subsidiary of Louis Dreyfus Commodities LLC entered into a definitive agreement whereby the Company would be acquired through a cash tender offer and second step merger at $6.35 per share. The proposed transaction is subject to customary closing conditions, including expiration of the applicable waiting periods under the Hart-Scott-Rodino Antitrust Improvements Act and a minimum tender of at least 66^2/3% of the Company's total shares outstanding. For further information, please see the Current Report on Form 8-K filed by the Company on May 1, 2012.

Conference Call

As a result of the pending merger transaction, the Company will not hold a conference call to discuss this quarter's results of operations.

About Imperial

Imperial Sugar Company is one of the largest processors and marketers of refined sugar in the United States to food manufacturers, retail grocers and foodservice distributors. The Company markets products nationally under the Imperial®, Dixie Crystals® and Holly® brands. For more information about Imperial Sugar, visit www.imperialsugarcompany.com

Statements regarding completion of the pending merger agreement with a subsidiary of Louis Dreyfus Commodities LLC, future market prices and margins, our liquidity and ability to finance our operations and capital investment programs, future expenses and liabilities arising from the Port Wentworth refinery incident, future liabilities arising from litigation, claims and assessments, future import and export levels, future government and legislative action, future environmental regulatory and compliance costs, future operating results, future availability and cost of raw sugar, operating efficiencies, results of future investments and initiatives, future cost savings, future product innovations, future energy costs, future pension plan contributions and other statements that are not historical facts contained in this release or in the Company's Securities and Exchange Commission (SEC) filings are forward-looking statements that involve certain risks, uncertainties and assumptions. These include, but are not limited to, the minimum tender condition of the merger agreement being satisfied, legislative, administrative and judicial actions, market factors, farm and trade policy, our ability to obtain financing and terms of any such financing, our ability to realize planned cost savings and other improvements, the available supply of sugar, energy costs, the effect of weather and economic conditions, results of actuarial assumptions, actual or threatened acts of terrorism or armed hostilities, and other factors detailed in the Company's SEC filings. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual outcomes may vary materially from those indicated.

IMPERIAL SUGAR COMPANY AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (In Thousands, Except Per Share Data) (Unaudited)
				Three Months Ended March 31,										Six Months Ended March 31,
				2012				2011						2012				2011
Net Sales				$	203,012			$	192,166					$	430,688			$	419,555
Cost of Sales					(200,714	)			(181,869	)					(421,361	)			(412,950	)
Selling, General and Administrative Expense					(10,419	)			(9,667	)					(21,256	)			(19,316	)
Gain on Contribution of Assets to Joint Venture					-				3,598						-				3,598
Operating Income (Loss)					(8,121	)			4,228						(11,929	)			(9,113	)
Interest Expense					(1,033	)			(435	)					(1,984	)			(798	)
Interest Income					1				386						1				399
Other Income, Net					2,653				1,266						3,955				581
Income (Loss) Before Income Taxes					(6,500	)			5,445						(9,957	)			(8,931	)
(Provision) Credit for Income Taxes					-				(1,290	)					-				4,171
Net Income (Loss)				$	(6,500	)		$	4,155					$	(9,957	)		$	(4,760	)
Basic Earnings
Per Share of Common Stock:
Net Income (Loss)				$	(0.54	)		$	0.35					$	(0.83	)		$	(0.40	)
Diluted Earnings
Per Share of Common Stock:
Net Income (Loss)				$	(0.54	)		$	0.34					$	(0.83	)		$	(0.40	)

IMPERIAL SUGAR COMPANY AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (In Thousands of Dollars) (Unaudited)
				March 31,					September 30,
				2012					2011
Cash and Cash Equivalents				$	278				$	134
Marketable Securities					208					206
Accounts Receivable, Net					49,340					55,622
Inventory					47,968					70,589
Other Current Assets					17,044					59,155
Current Assets					114,838					185,706
Property, Plant & Equipment, Net					249,065					251,009
Deferred Income Taxes, Net					11,223					11,034
Other Assets					26,118					42,672
Total				$	401,244				$	490,421
Accounts Payable, Raw Sugar				$	7,157				$	23,461
Accounts Payable, Trade					14,354					13,367
Borrowing under Revolving Credit Line					69,015					81,843
Deferred Income Taxes, Net					8,313					8,313
Other Current Liabilities					34,158					74,200
Current Liabilities					132,997					201,184
Long-Term Debt					-					-
Other Liabilities					124,835					127,783
Shareholders' Equity					143,412					161,454
Total				$	401,244				$	490,421
Shares of Common Stock Outstanding					12,241,618					12,223,978