Milling & Baking News - February 24, 2009 - 14

Financial Results

Lance '08 profit eases despite
strong fourth quarter
CHARLOTTE, N.C. - Price increases
put in place late in the third quarter
helped drive higher earnings and sales
at Lance, Inc. in the fourth quarter but
were not enough to push profit higher
for the full year.
For the year ended Dec. 27, 2008,
net income was $17,706,000, equal to
57c per share on the common stock,
down 26% from $23,838,000, or 77c
per share, in fiscal 2007. Sales for the
year were $852,468,000, up 12% from
$762,736,000.
For the fourth quarter, though,
income soared to $7,544,000, or 24c
per share, from $1,081,000, or 3c per
share, in the same period a year earlier. Sales rose to $215,298,000 from
$185,222,000.
"We are pleased with the significant
improvement in our profitability in the
fourth quarter," said David V. Singer,
president and chief executive officer.
"As anticipated, the additional price
increases that we executed late in the
third quarter brought our prices back
in line with our costs."

Mr. Singer said sales growth and
operational improvements initiated
in 2008 will be key to driving margin
improvements in 2009 and beyond.
He also reflected on two

The acquisition of Brent & Sam's last
March has strengthened Lance's private
brands product portfolio.

MGPI suffers $42.7 million loss amid
charges, business deterioration
ATCHISON, KAS. - MGP Ingredients, Inc. sustained a loss of $42,716,000
in the second quarter ended Dec. 31,
2008, which compared with net income
of $5,229,000, equal to 32c per
share on the common stock,
in the previous year's second
quarter, the company said Feb.
9 in a filing with the Securities and Exchange Commission. Second-quarter sales dropped to
$73,242,000 from $93,995,000.
Results were adversely affected by
impairment and restructuring costs in
the second quarter that added up to
$17,460,000, as well as an unrealized
loss of $5,400,000 recorded to cost of
sales for projected settlements of natural gas contracts. In October 2008 the
company reported it was ceasing operations at its flour mill in Atchison. In
November the company ceased protein and starch production operations
at its Pekin, Ill., facility.
"We expect to see improved profitability because of these steps," MGPI
said. "However, they also produce a
current cost."
In addition, higher cost of sales

related to higher grain costs weighed
on results. A positive impact of discontinuing production of certain commodity starch and protein products at a Pekin, Ill., plant partially offset
the higher cost of sales. MGPI
also realized a gain of on the
settlement of litigation, net of
related expenses of $7.1 million in the second quarter.
Second-quarter sales for Ingredient
Solutions fell 10% to $22,455,000 from
$24,963,000. Revenues for specialty ingredients, consisting of specialty proteins and specialty starches, increased
by $615,000, or 4.8%. Decreased unit
sales for vital wheat gluten primarily
were related to the decision to cease
gluten and starch production in Pekin.
Second-quarter sales for Distillery Products fell to $49,733,000 from
$67,523,000.
For the first six months of the fiscal year, MGPI suffered a loss of
$59,959,000, which compared with
net income of $4,876,000, or 30c per
share, in the same time period the
previous year. Six-month sales fell to
$172,262,000 from $181,972,000. MBN

CREATING BETTER SOLUTIONS...NATURALLY

14 / February 24, 2009

Milling & Baking News

important acquisitions completed
during fiscal 2008.
"The acquisition of Brent & Sam's
strengthened our private brands
product portfolio with the addition
of a premium line of cookies," Mr.
Singer said. "The recent acquisition
of certain assets of Archway Cookies L.L.C. adds a solid brand to our
portfolio, along with manufacturing
capacity to support our continued
growth. Despite the temporary decline in our profit margin and e.p.s.
during 2008, driven by the sharp
escalation of input costs, we believe
that our notable accomplishments in
2008 position us well for the future."
Looking ahead to 2009, Lance
said sales for the full year will be
approximately $900 million to $920
million and e.p.s. will range from $1
to $1.15.
"The company believes that its
earnings per share will be negatively
impacted by the integration of the
Archway acquisition, heavier promotional and advertising activity focused in the first half of the year and
other key operational initiatives that
will have more impact as the year
progresses," Lance said. MBN

AIPC income up sharply
in first quarter
KANSAS CITY - American Italian
Pasta Co.'s net income for the first
quarter ended Jan. 2 was $26,028,000,
equal to $1.28 per share on the common stock, up sharply from $1,394,000,
or 7c per share, in the same period a
year ago.
Revenues
increased
53%
to
$171,206,000, which compared with
$111,723,000 in the previous year.
"Our strong first-quarter results
continue the trend that began in fiscal
year 2007, as we continue to deliver
solid growth in revenue and net income," said Jack Kelly, president and
chief executive officer. "Our growth
strategy to leverage our market leadership in 'customer brands' and focus
resources on our strongest proprietary
retail brands is paying off."
Institutional revenues increased
43% to $35.1 million during the first
quarter, primarily due to a 36% increase in higher average selling prices and a 7% increase in higher volume. Retail revenues increased 56%
to $136.1 million, primarily because
of a 45% increase related to higher
average selling prices and a 16% increase in volumes. MBN
bakingbusiness.com / world-grain.com

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Milling & Baking News - February 24, 2009

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