Penford Corp Narrows Q2 Net Loss, Revenues Rise 16%

Apr. 9.12 | About: Penford Corporation (PENX)

Penford Corp. (NASDAQ:PENX) Monday narrowed its net loss during the second-quarter as revenues grew by nearly 16 percent amid volume growth and improved pricing at its industrial ingredient unit.

Colorado-based Penford makes natural-based ingredient systems for food and industrial applications mainly in the U.S. Its starch products are made from corn and potatoes, which are used as binders and coatings in paper and food production, as well as an ingredient in fuel.

The company narrowed its net loss to $350,000, or three cents a share, compared with a net loss of $1.5 million, or 13 cents a share, a year-ago. For the quarter that ended February 29, consolidated net sales rose 15.8 percent to $86.1 million from $74.3 million a year earlier.

Revenue in the food ingredients unit - which provides specialty starches to the food service sector - jumped by 40 percent to $24.9 million from $17.7 million. The segment's operating profit rose to $5.2 million from $3.5 million in the year-ago period.

The industrial ingredient division saw sales grow to $61.2 million, up from $56.5 million a year earlier, helped by volume growth and improved pricing. The division's operating net loss narrowed to $985,000 compared to $1.1 million last year.

Penford attributed the eight percent sales increase in its industrial ingredient unit to speciality starches and higher processing fees, as well as its Carolina Starches business. Its corporate expenses rose to $6.4 million from $5.23 million in the prior year period, due to higher professional fees, employee costs and acquisition-related charges.

Next month, the company plans to redeem $20 million worth of its Series A cumulative non-voting, non convertible preferred stock. The stock will be called without premium at issue price, the company said. Banks debt rose to $30.7 million in the latest quarter, reflecting the $8.5 million acquisition of Carolina Starches in January this year.

Penford's share price closed Thursday at $6.90 in trade on the Nasdaq. Its stock was inactive during pre-market trade on Monday.

Disclosure: None