Rebuild highlights strong earnings at Imperial
February 5, 2010
by Eric Schroeder
SUGAR LAND, TEXAS — Completion of several major milestones associated with the rebuild of the company’s Port Wentworth, Ga., refinery highlighted a much improved first quarter at Imperial Sugar Co. Net income in the quarter ended Dec. 31, 2009, totaled $178,116,000, equal to $15.11 per share on the common stock, up sharply from $64,000, or 1c per share, in the same period a year earlier. Net sales in the quarter rose 60% to $173,779,000.
During the first quarter, Imperial Sugar said it realized a pre-tax gain of $278.5 million associated with the settlement of insurance claims related to the explosion at its Port Wentworth facility in February 2008. The company also recognized $18.9 million of gains on derivative contracts intended to hedge future raw sugar purchases.
In a Feb. 5 conference call with analysts, John Sheptor, president and chief executive officer, elaborated on the progress Imperial has made with its Port Wentworth rebuild.
“High speed lines for 50-lb, 25-lb and retail-sized packages for white refined sugar were all commissioned and the new silos were placed into service,” he said. “This has enabled us to reinitiate the branded and private label sales with many of our largest consumer channel customers within the southeast region. The three, 156-foot silos are particularly critical as the final step of moisture removal occurs in this storage system. Running without them has been rate-limiting.
“Installation of the final major production area, our new brown sugar and powdered sugar lines, is complete. Our team is engaged in commissioning activities and anticipation of supplying Easter holiday requirements. Limited production has already begun.”
Mr. Sheptor said the “convenience and hygienic properties” of the Redi-Measure brown sugar ½ cup packets introduced in 2009 were well received by consumers, helping the product to grow to 10% of total brown sugar sales during the holiday season. He said another new product — Bakers Supreme natural ingredient frosting mixes — performed well in Texas retail tests and the company is considering introduction of the product in a larger region.
Imperial Sugar celebrated the groundbreaking on its new $120 million LSR refinery in Gramercy, La., on Feb. 3. The facility, which was born from a partnership between Imperial, Cargill and sugar growers and millers, is expected to start up in the summer of 2011, Mr. Sheptor said.
“Imperial will be a benefactor from this partnership through our long-term supply agreement with the new refinery for bulk white refined sugar supplying our small bag packaging facility that will continue to operate on the Gramercy site as well as from being a one-third owner of the new refinery,” he said. “We continue to find new ways, through product development, to meet customer needs.”