CEO: Imperial Sugar will take advantage of reduced sugar prices
Imperial Sugar Co. (Nasdaq: IPSU) CEO Bob Peiser said trends that continue to affect the company include soft industry pricing and a Mexican sugar crop that is expected to be large. Peiser made the comments during a midday conference call.
“The Mexican sugar industry is expected to harvest a large crop. This creates more competition for our refined products but helps us to the extent that Mexican imports are in the form of their standard sugar and can be used as a raw material in our refineries,” Peiser said. “We have already seen raw sugar pricing reduced because of the greater expectations of Mexican imports that can be used by refiners of the raw material.”
In late November, Imperial Sugar announced that it created a joint venture with Mexico-based Ingenios Santos, S.A. de C.V. to market sugar in Mexico. Peiser said the combined Mexico and U.S. market is 50% larger than the U.S. market alone.
Peiser said the conference call will be his last as he steps down as CEO in January. John Sheptor, the current Chief Operating Officer, will be appointed as Imperial’s new president and CEO at that time.
“I plan to reduce my involvement with the company effective Jan. 29, which is the date of our annual meeting and at that time assume the position of vice chairman for the next year,” Peiser said. “John is very qualified to provide extraordinary leadership to our associates and to work toward enhancing stockholder value. His skill sets are very complimentary to mine and are the right ones for Imperial at this time.”
Sheptor has worked in the agriculture and international business world for more than 20 years, including more than 10 years in the sweetener segment.
“I and the management team have three principal priorities as we look to the near-term future: one, strengthen margin and consumer relationships across all three business channels through operational excellence; two, grow Imperial’s participation in the Mexican market and strategically place Mexican sugar with U.S. customers; and three, grow Imperials consumer channel business,” Sheptor said.
Peiser said he is ready for new challenges.
“It’s often difficult for someone in my position to step aside and let somebody else take over and it’s also difficult for that new CEO to come in and develop a partnership with that CEO,” Peiser said. “The partnership is quite good and I’m very optimistic that it will continue to be good. I think this will be a very interesting and good year.”
Before the opening, Imperial Sugar reported fourth-quarter net sales of $219.6 million, 9% below $240.3 million a year earlier. Analysts were expecting $219.2 million.
For the three months ended Sept. 30, Imperial Sugar’s net income plunged 48% to $8.2 million, or $0.71 per share, from $15.7 million, or $1.41 per share, during the year-ago period. Wall Street analysts projected earnings of $0.34 per share.
The firm’s operating income plummeted 79% to $4.7 million, from $22.6 million. Selling, general and administrative expenses for the fourth quarter rose 15% to $12.3 million, from $10.7 million during the same period of 2006.
Net sales during fiscal 2007 fell 8% to $875.5 million, from $946.8 million during fiscal 2006. Yearly profit declined 20% to $40.2 million, or $3.52 per share, from $50 million, or $4.59 per share, during fiscal 2006. Analysts predicted earning $2.72 per share on $871.1 million in revenue.
In midday trading, IPSU shares are down 2.63%, or $0.62, at $22.97. Over the last 52 weeks, shares have ranged from $22.67 to $35.21.
