Milling & Baking News - January 2, 2007 - 16

F I N A N C I A L

R E S U L T S

Dakota Growers Pasta income
rises behind strong sales growth
CARRINGTON, N.D. - Net income of
Dakota Growers Pasta Co. in the first
quarter ended Oct. 31 was $894,000,
equal to 7c per share on the common stock, up 124% from $399,000,
or 3c per share, in the first quarter
of fiscal 2006.
Net revenues of the company were
$48,933,000, up 11% from $44,072,000 in
the first quarter of the previous year.
"The revenue increase was the result of higher pasta sales volumes,
particularly in the ingredient market,
and to a lesser extent higher per unit
selling prices," the company said in a
10-Q report filed Dec. 15 with the Securities and Exchange Commission.
"Benefits derived from increased sales
were partially offset by higher durum
costs. Durum prices increased significantly in the first quarter of fiscal year
2007 when compared to fiscal year
2006 prices."
Overall, Dakota Growers said
pasta sales volumes increased 7%
along with an increase in pasta per
unit selling prices of 2.9%. Revenues
from the retail market rose $500,000,
or 2.5%, while food service revenues
climbed $400,000, or 3%. Ingredi-

ent sales jumped $3,200,000, or 54%,
during the quarter.
The company also markets semolina
production in excess of its own requirements as well as durum wheat flour,
other flour blends
and byproducts of the
durum milling process. Revenues from
mill product sales
totaled
$3,200,000
for the three months
ended Oct. 31, 2006,
up $700,000 from
the same period a
year ago.
During the most
recent quarter, Dakota Growers said
it incurred losses on disposition of
$700,000 related to the retirement of
equipment at its New Hope, Minn.,
pasta plant.
Gross profit at Dakota Growers in
the first quarter of fiscal 2007 totaled
$6,073,000, up 16% from $5,240,000 in
the same period a year ago. Operating income also improved during the
quarter, rising 106% to $2,831,000.
In a Dec. 18 letter to shareholders,
Dakota Growers Pasta said its board

S.W.P. has C$19.3 million net
income in first quarter
REGINA, SASK. - The Saskatchewan Wheat Pool Inc. reported net
earnings from continuing operations,
prior to one-time adjustments, of
C$19.3 million ($16.7 million) in the
first quarter of fiscal 2007 ended Oct.
31, up 77% from earnings of C$10.9
million the same
quarter last year.
Earnings from
continuing operations before interest, taxes, depreciation and amortization (EBITDA)
were C$2.8 million for the first
quarter of 2007, up from C$34,000 the
same quarter last year. Strong performance in the Pool's Grain Handling
and Marking segment more than offset lower contributions from its AgriProducts and Agri-food Processing
segments, the S.W.P. said.
First-quarter sales and other operating revenues were C$341.3 million,
up 25% from C$273.9 million during
16 / Milling & Baking News, January 2, 2007

the same period in 2006. Stronger volumes through its Grain Handling and
Marketing segment and higher sales
from its Agri-food Processing segment
offset lower sales in its Agri-products
group, the S.W.P. said.
The Grain Handling and Marketing
segment
turned
in the strongest
performance
for
the quarter, with
EBITDA of C$10.4
million, twice the
C$5.2 million in the
first quarter a year
earlier. The S.W.P.
said higher exports
of Canadian Wheat Board grains and
canola contributed to the increase.
EBITDA for the Agri-products segment were a loss of C$5.1 million for
the period compared with a loss of
C$4.8 million a year earlier. The loss
was attributed to lower fertilizer sales
volumes and lower supplier rebates.
Sales for the segment were C$48.9 million, down 10% from a year earlier.

of directors is considering a range of
alternatives to maximize shareholder
value, including, but not limited to,
a recapitalization involving possible
share repurchases or other means to
improve share liquidity.
"We believe that the limited market
for Dakota Growers' shares may be
undervaluing the company's common
stock at this point in
time, considering the
limited activity in
the current alternative trading systems
and considering our
current views of the
company's prospects
and position within
the pasta industry,"
the company said.
Dakota
Growers
said it is considering options that would
value the company's common stock at
a price near $10 per share or more, but
noted that no definitive agreements or
arrangements have been reached.
The company's board of directors
on Dec. 20 authorized the payment
of a non-periodic dividend of 14c
per share on its common stock and a
1c per share dividend on its Series D
delivery preferred stock, both payable
on Jan. 3, 2007, to shareholders of record as of Dec. 20, 2006. MBN

The Agri-food Processing segment
reported EBITDA of C$3.1 million for
the first quarter, down 40% from C$5.2
million in the first quarter of 2006. The
decline was the result of higher cost
for oats and lower processing yields
due to crop quality issues and a drop
in foreign exchange rates. The S.W.P.
operates Can-Oat Milling and Prairie Malt. Sales for the segment were
C$36.3 million, up 24% from C$29.3
million a year earlier.
Prior to the end of the first quarter, the S.W.P. announced a proposed
merger with Agricore United.
"Over the past number of weeks,
we have met with numerous Pool and
Agricore shareholders to discuss the
combination," said Mayo Schmidt,
president and chief executive officer
of the S.W.P. "We have been extremely
encouraged by the feedback we have
received and the confidence that has
been expressed about the financial
and strategic rationale underlying
this proposal."
However, the Agricore board of directors voted unanimously to recommend its shareholders reject the merger proposal, which Agricore considers
a hostile takeover. MBN
bakingbusiness.com / world-grain.com

http://www.bakingbusiness.com http://www.world-grain.com

Milling & Baking News - January 2, 2007

Table of Contents for the Digital Edition of Milling & Baking News - January 2, 2007