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American Italian Pasta Company: American Italian Pasta Company Reports Second Quarter and Year-to-Date 2009 Results

  //house-home.news-articles.net/content/2009/05/1 .. econd-quarter-and-year-to-date-2009-results.html
  Published in House and Home on Tuesday, May 12th 2009 at 4:12 GMT, Last Modified on 2009-11-03 07:39:24 by Market Wire

KANSAS CITY, MO--(Marketwire - May 12, 2009) - American Italian Pasta Company (NASDAQ: [ AIPC ]), the largest producer of dry pasta in North America, today announced results for its second quarter and year-to-date fiscal year 2009, which ended April 3, 2009.

The second quarter of fiscal year 2009 and fiscal year 2008 contained 13 weeks of operation. The year-to date fiscal year 2009 contains 27 weeks of operations compared to 26 weeks of operations for fiscal year 2008. The Company reports on a 52/53 week basis with the extra week occurring approximately every six years. Fiscal year 2009 will be a 53-week fiscal year and ends on October 2, 2009. Fiscal year 2008 was a 52-week year that ended on September 26, 2008. Thus, all year-over-year comparisons reflect a 27-week fiscal year 2009 and a 26-week fiscal year 2008.

FINANCIAL HIGHLIGHTS

Revenues for the second quarter increased $22.7 million, or 16%, to $162.3 million, led by a 21% increase in the retail market and a 3% increase in the institutional market. Overall volume increased 10%. Net income for the quarter increased $16.8 million to $26.2 million, or $1.21 per diluted share, versus a net income of $9.4 million, or $0.50 per diluted share, in the second quarter of fiscal 2008.

Revenues for the 27-week year-to-date period increased $82.2 million, or 33%, to $333.5 million, led by a 37% increase in the retail market and a 20% increase in the institutional market. Overall volume increased 12%. Net income for the 27-week year-to-date period increased $41.4 million to $52.2 million, or $2.44 per diluted share, versus a net income of $10.8 million, or $0.57 per diluted share, in the 26-week year-to-date period of fiscal 2008.

"Clearly, our strategy and great execution by the entire AIPC employee team are paying off," said Jack Kelly, CEO of AIPC. "Volume was a key factor in our overall revenue growth, handily outpacing the industry's overall growth rate. Moving forward, we are well positioned to capitalize on what we believe will be a lasting upward trajectory in consumption, given pasta's value, versatility and nutritional benefits."

Operational Highlights

 -- Retail Revenues: Retail revenues increased $21.8 million, or 21%, to $127.6 million for the second quarter of 2009, from $105.8 million for the second quarter of 2008. The revenue increase is the result of higher average selling prices of 11%, and volume increases of 10%. Retail revenues increased $70.7 million, or 37%, to $263.7 million for fiscal year- to-date 2009, from $193.0 million for fiscal year-to-date 2008. The revenue increase is primarily the result of a $49.9 million, or 26%, increase related to higher average selling prices, and a $24.6 million, or 13%, increase in volume, partially offset by a $3.8 million decrease in payments received from the U.S. government under the Continued Dumping and Subsidy Offset Act of 2000. -- Institutional Revenues: Institutional revenues increased $0.9 million, or 3%, to $34.7 million for the second quarter of 2009, from $33.8 million for the second quarter of 2008. The revenue increase is primarily the result of an 11% increase due to higher volume, offset by an 8% decrease in average selling prices. Institutional revenues increased $11.5 million, or 20%, to $69.8 million for fiscal year-to-date 2009, from $58.3 million for fiscal year-to-date 2008. The revenue increase is primarily the result of an 11% increase due to higher average selling prices and a 9% increase due to higher volume. -- Cost of Goods Sold: For the second quarter, cost of goods sold increased $10.9 million, or 10%, to $118.2 million, from $107.3 million for the prior year second quarter. As a percentage of revenues, cost of goods decreased to 73% for the second quarter, from 77% for the prior year second quarter. Cost of goods sold increased $45.8 million, or 24%, to $240.5 million for fiscal year-to-date 2009, from $194.7 million for fiscal year- to-date 2008. As a percentage of revenues, cost of goods decreased to 72% for fiscal year-to-date 2009, from 77% for fiscal year-to-date 2008. -- Gross profit: Gross profit increased $12.0 million, or 37%, to $44.2 million for the second quarter of 2009, from $32.2 million for the second quarter of 2008. Gross profit, as a percentage of revenues, increased to 27% during the second quarter, compared to 23% during the second quarter of 2008. Gross profit increased $36.4 million, or 64%, to $93.0 million for fiscal year-to-date 2009, from $56.6 million for fiscal year-to-date 2008. Gross profit, as a percentage of revenues, increased to 28% during fiscal year-to-date 2009, compared to 23% during fiscal year-to-date 2008. -- Selling and marketing expense: Selling and marketing expense increased $1.2 million, or 20%, to $7.3 million for the second quarter of 2009, from $6.1 million for the second quarter of 2008. Selling and marketing expense, as a percentage of revenue, increased to 4.5% for the second quarter of 2009, from 4% for the second quarter of 2008. Selling and marketing expense increased $2.6 million, or 21%, to $14.7 million for fiscal year-to-date 2009, from $12.1 million for fiscal year-to-date 2008. Selling and marketing expense, as a percentage of revenue, decreased to 4% for fiscal year-to-date 2009, from 5% for fiscal year-to-date 2008. -- General and administrative expense: General and administrative expense decreased 13% to $8.1 million for the second quarter of 2009, from $9.3 million for the second quarter of 2008. General and administrative expenses, as a percentage of revenues, decreased to 5% for the second quarter of 2009, from 7% for the second quarter of 2008. General and administrative expense decreased 14% to $16.8 million for fiscal year-to- date 2009, from $19.5 million for fiscal year-to-date 2008. General and administrative expenses, as a percentage of revenues, decreased to 5% for fiscal year-to-date 2009, from 8% for fiscal year-to-date 2008. -- Operating profit: Operating profit for the second quarter of 2009 was $28.5 million, an increase of $12.0 million, as compared to $16.5 million for the second quarter of 2008. Operating profit increased as a percentage of revenues to 18% for the second quarter of 2009, from 12% for the second quarter of 2008. Operating profit for fiscal year-to-date 2009 was $61 million, an increase of $36.3 million, as compared to $24.7 million reported for fiscal year-to-date 2008. Operating profit increased as a percentage of revenues to 18% for fiscal year-to-date 2009, from 10% for fiscal year-to-date 2008. 

ABOUT AIPC

Founded in 1988 and based in Kansas City, Missouri, American Italian Pasta Company is the largest producer of dry pasta in North America. The Company has four plants that are located in Excelsior Springs, Missouri; Columbia, South Carolina; Tolleson, Arizona and Verolanuova, Italy. The Company has approximately 650 employees located in the United States and Italy. For more information, visit [ www.aipc.com ].

When used in this release, the words "anticipate," "projected," "believe," "estimate," and "expect" and similar expressions are intended to identify forward-looking statements, but are not the exclusive means of identifying these statements. The statements by the Company regarding the pasta market, and financial performance are forward-looking. There are numerous risks and uncertainties that could cause actual future results to differ materially from those anticipated by such forward-looking statements. The risks and uncertainties could be caused by a number of factors, including, but not limited to: (1) our dependence on a limited number of customers for a substantial portion of our revenue; (2) our ability to obtain necessary raw materials and minimize fluctuations in raw material prices; (3) the potential adverse impact on revenue and margins of the highly competitive environment in which we operate; (4) our reliance exclusively on a single product category; (5) our ability to cost-effectively transport our products; (6) consumption trends for our product; (7) the status of production capacity in the U.S. and the level of imports from foreign producers; (8) our ability to sustain quality and service requirements for our customers; and (9) our ability to attract and retain key personnel. For a discussion of factors that could cause actual results to materially differ from those anticipated, see the risk factors set forth in item 1A of the Company's Form 10-K for the fiscal year ended September 26, 2008. The Company will not update any forward-looking statements in this press release to reflect future events.

 AMERICAN ITALIAN PASTA COMPANY CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS Unaudited (in thousands, except per share amounts) Year-to-date Period Second Quarter Ended Ended -------------------- -------------------- April 3, March 28, April 3, March 28, 2009 2008 2009 2008 --------- --------- --------- --------- (Twenty- (Twenty- (Thirteen (Thirteen seven six Weeks) Weeks) Weeks) Weeks) Revenues $ 162,325 $ 139,568 $ 333,531 $ 251,291 Cost of goods sold 118,164 107,328 240,526 194,716 --------- --------- --------- --------- Gross profit 44,161 32,240 93,005 56,575 Gross profit as a percent of revenues 27.2% 23.1% 27.9% 22.5% Selling and marketing expense 7,290 6,118 14,654 12,138 General and administrative expense 8,104 9,342 16,757 19,502 Losses related to long-lived assets 258 235 605 235 --------- --------- --------- --------- Operating profit 28,509 16,545 60,989 24,700 Operating profit as a percent of revenues 17.6% 11.9% 18.3% 9.9% Interest expense, net 4,070 6,956 9,948 14,044 Other (income) expense, net (43) 431 52 414 --------- --------- --------- --------- Income before income taxes 24,482 9,158 50,989 10,242 Income tax benefit (1,714) (286) (1,235) (596) --------- --------- --------- --------- Net income $ 26,196 $ 9,444 $ 52,224 $ 10,838 ========= ========= ========= ========= EARNINGS PER COMMON SHARE - BASIC Net income per common share $ 1.27 $ 0.50 $ 2.56 $ 0.58 Weighted-average common shares outstanding 20,598 18,851 20,421 18,789 ========= ========= ========= ========= EARNINGS PER COMMON SHARE - DILUTED Net income per common share $ 1.21 $ 0.50 $ 2.44 $ 0.57 Weighted-average common shares outstanding (including dilutive securities) 21,583 18,885 21,365 18,966 ========= ========= ========= ========= AMERICAN ITALIAN PASTA COMPANY CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands, except share amounts) April 3, September 26, 2009 2008 --------- ----------- ASSETS Current assets: Cash and cash equivalents $ 58,324 $ 38,623 Trade and other receivables, net 44,070 49,197 Inventories 54,988 66,026 Other current assets 5,736 8,189 Deferred income taxes 1,760 2,126 --------- ----------- Total current assets 164,878 164,161 Property, plant and equipment, net 294,761 303,503 Brands 78,930 79,769 Other assets 5,827 5,591 --------- ----------- Total assets $ 544,396 $ 553,024 ========= =========== LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Accounts payable $ 24,435 $ 29,541 Accrued expenses 25,234 37,357 Short term debt and current maturities of long term debt - 24,913 --------- ----------- Total current liabilities 49,669 91,811 Long term debt, less current maturities 200,000 217,000 Deferred income taxes 25,398 34,054 Other long term liabilities 5,391 4,188 --------- ----------- Total liabilities 280,458 347,053 Commitments and contingencies Stockholders’ equity: Preferred stock, $.001 par value: Authorized shares - 10,000,000; Issued and outstanding shares - none - - Class A common stock, $.001 par value: Authorized shares - 75,000,000 Issued and outstanding shares - 23,168,445 and 20,954,937, respectively, at April 3, 2009; 22,454,145 and 20,259,060, respectively, at September 26, 2008 23 22 Class B common stock, par value $.001 Authorized shares - 25,000,000; Issued and outstanding - none - - Additional paid-in capital 270,680 261,772 Treasury stock, 2,213,508 shares at April 3, 2009 and 2,195,085 shares at September 26, 2008, at cost (52,445) (52,076) Accumulated other comprehensive income 13,931 16,728 Retained earnings (accumulated deficit) 31,749 (20,475) --------- ----------- Total stockholders’ equity 263,938 205,971 --------- ----------- Total liabilities and stockholders’ equity $ 544,396 $ 553,024 ========= ===========