Accounting for the decline in earnings was the company’s resumption of income tax payments, having used up credits from losses sustained in earlier years. The company expensed $12,668,000 in taxes in the quarter, versus a tax benefit of $1,714,000 during the second quarter last year.
Income before taxes in the second quarter was $35,903,000, up 47% from $24,482,000 during the same period last year.
Accounting for the 10% sales decline, AIPC said 5.4 percentage points were due to lower average selling prices with the balance of the decline from a slide of volume.
“The volume decreases were in the institutional and non-strategic brand channels, which offset volume gains in the strategic retail channel of 2.7% for the quarter,” AIPC said.
Margins improved markedly during the second quarter with gross profits of 36.5% of revenues, up from 27.2% a year earlier, and operating profit margin of 25.3%, up from 17.6%.
“Our retail focus on private label or store brand business, along with our strategic brands, contributed to strong results in the second quarter of fiscal 2010,” said Jack P. Kelly, AIPC president and chief executive officer. “AIPC continued to outperform the pasta category in both revenue and volume, and we are operating the business more profitably, as second-quarter operating profit increased 30% from the year prior. Strong performance in 2010 has allowed us to continue our aggressive debt reduction, bringing total debt outstanding to $45 million from $110 million at the end of fiscal 2009. Since the second quarter ended, we have further reduced our debt outstanding by an additional $15 million.”
In the six months ended Oct. 2, AIPC net income was $43,934,000, or $2.07 per share, off 16% from $52,224,000, or $2.56 per share. Sales were $294,850,000, down 12%. Income before taxes year to date was $68,067,000, up 33%.