SOURCE: American Italian Pasta Company

American Italian Pasta Company

November 24, 2009 08:00 ET

American Italian Pasta Company Reports Fiscal Year 2009 Results

Total Revenue of $628 Million -- up 10%; Total Volume Increased 6%; Operating Income of $113 Million -- up 163%

KANSAS CITY, MO--(Marketwire - November 24, 2009) - American Italian Pasta Company (NASDAQ: AIPC), the largest producer of dry pasta in North America, today announced 2009 net income of $88.3 million or $4.10 per diluted share compared with 2008 net income of $19.1 million or $0.99 per diluted share. The company reported fourth quarter 2009 net income of $15.8 million or $0.73 per diluted share compared with fourth quarter 2008 net income of $7.3 million or $0.36 per diluted share.

The fourth quarters of fiscal year 2009 and fiscal year 2008 contained 13 weeks of operations. Fiscal year 2009 contained 53 weeks of operations compared to 52 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 was a 53-week year that ended on October 2, 2009. Fiscal year 2008 was a 52-week year that ended on September 26, 2008. Therefore, all year-over-year comparisons reflect a 53-week period for fiscal 2009 and a 52-week period for fiscal 2008.

"We're very proud both of our financial results for the year and the continued dedication and hard work of our employees that created these strong financial results," said Jack Kelly, President and CEO. "Our ability to grow our market share while simultaneously making significant improvements in our key indicators of financial strength, such as gross profit margin, net income, operating cash flow, net debt, and EBITDA, is a reflection that our strategic decision to pursue long term profitable growth by focusing on customer brands and on our strongest proprietary brands was the right decision."

FISCAL 2009 FINANCIAL RESULTS

--   Total Revenues for the 53-week year increased $59.0 million, or 10%,
     to $628.2 million, led by a 17% increase in revenue growth in the
     retail market, offset by an 8% decrease in the institutional market.
     Overall volume increased approximately 6%.  Revenues for the fourth
     quarter decreased $13.0 million, or 8%, to $149.1 million, including
     a 3.2% decrease in the retail market and a 22.9% decrease in the
     institutional market.

     --   Retail Revenues: Retail revenues increased $70.1 million, or
          17%, to $495.6 million for 53-week fiscal year 2009, from $425.5
          million for 52-week fiscal year 2008. The revenue increase is
          primarily the result of a $38.2 million, or 9%, increase related
          to higher average selling prices, and a $35.7 million, or 8%,
          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.  Retail revenues
          decreased $3.9 million, or 3%, to $118.7 million for the fourth
          quarter of 2009, from $122.7 million for the fourth quarter of
          2008. The revenue decrease is primarily the result of lower
          average selling prices of 7.7%, partly offset by volume increases
          of 4.5%.

     --   Institutional Revenues: Institutional revenues decreased $11.1
          million, or 8%, to $132.6 million for 53-week fiscal year 2009,
          from $143.7 million for 52-week fiscal year 2008. The revenue
          decrease is primarily the result of a $10.1 million, or 7%,
          decrease due to lower average selling prices and a $1.0 million,
          or 1%, decrease due to lower volume. Institutional revenues
          decreased $9.0 million, or 23%, to $30.4 million for the fourth
          quarter of 2009, from $39.4 million for the fourth quarter of
          2008. The revenue decrease is primarily the result of a $6.5
          million, or 17%, decrease in average selling prices, and a $2.5
          million, or 6%, decrease due to lower volume. The volume
          decrease is primarily due to bid eligibility changes requiring
          small business participation in certain government contracts,
          challenges to our customers in the food service industry, and
          the impact of lower per-unit revenues on certain pass-through
          manufacturing agreements.

--   Cost of Goods Sold: Cost of goods sold increased $4.6 million, or 1%,
     to $451.5 million for 53-week fiscal year 2009, from $446.9 million
     for 52-week fiscal year 2008.  As a percentage of revenues, cost of
     goods decreased to 71.9% for fiscal year 2009, from 78.5% for fiscal
     year 2008. For the fourth quarter, cost of goods sold decreased $13.2
     million, or 11%, to $108.1 million, from $121.3 million for the prior
     year fourth quarter. As a percentage of revenues, cost of goods
     decreased to 72.5% for the fourth quarter, from 74.9% for prior year
     fourth quarter. Our raw materials, transportation, and other input
     costs continue to fluctuate, with lower durum costs offset by
     increases in other input costs.

--   Gross profit: Gross profit increased $54.4 million, or 45%, to $176.7
     million for 53-week fiscal year 2009, from $122.3 million for 52-week
     fiscal year 2008. Gross profit, as a percentage of revenues,
     increased to 28.1% during fiscal 2009, compared to 21.5% during
     fiscal 2008. Gross profit increased $0.3 million, or 0.7%, to $41.0
     million for the fourth quarter of 2009, from $40.7 million for the
     fourth quarter of 2008. Gross profit, as a percentage of revenues,
     increased to 27.5% during the fourth quarter, compared to 25.1%
     during the fourth quarter of 2008.

--   Other Operating Expenses: Other operating expenses, comprised of
     selling and marketing, general and administrative, impairment charges
     to brands, and loss related to long-lived assets, decreased
     approximately $16.0 million, or 20%, to $63.2 million for the 53-week
     fiscal year 2009, from $79.2 million for the 52-week fiscal year
     2008. This decrease was primarily due to a decrease in professional
     fees related to the restatement of historical financial statements
     and pending legal matters. Other operating expenses decreased $12.3
     million, or 41%, to $17.5 million for the fourth quarter of 2009,
     from $29.8 million for the fourth quarter of 2008. This decrease was
     primarily related to professional fees incurred during 2008 to
     prepare multiple years of 10-K filings combined with the 2008
     impairment loss related to certain brands we planned to extract from
     underperforming markets.

--   Operating profit: Operating profit for 53-week fiscal year 2009 was
     $113.4 million, an increase of $70.3 million, as compared to $43.1
     million reported for 52-week fiscal year 2008.  Operating profit
     increased as a percentage of revenues to 18.1% for fiscal year 2009,
     from 7.6% for fiscal year 2008. Operating profit for the fourth
     quarter of 2009 was $23.5 million, an increase of $12.5 million,
     as compared to $11.0 million for the fourth quarter of 2008.
     Operating profit increased as a percentage of revenues to 15.8% for
     the fourth quarter of 2009, from 6.8% for the fourth quarter of 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 675 employees located in the United States and Italy.

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 October 2, 2009. The Company will not update any forward-looking statements in this press release to reflect future events.



                  AMERICAN ITALIAN PASTA COMPANY
                   CONSOLIDATED BALANCE SHEETS
                (in thousands, except share amounts)


                                              October 2,    September 26,
                                                 2009            2008
                                            --------------  --------------
                  ASSETS
Current assets:
Cash and cash equivalents                   $       30,959  $       38,623
Trade and other receivables, net                    45,828          49,197
Inventories                                         50,996          66,026
Other current assets                                 6,372           8,189
Deferred income taxes                               22,202           2,126
                                            --------------  --------------
    Total current assets                           156,357         164,161
Property, plant and equipment, net                 291,212         303,503
Brands                                              79,074          79,769
Other assets                                         3,420           5,591
                                            --------------  --------------
    Total assets                            $      530,063  $      553,024
                                            ==============  ==============

   LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable                            $       29,852  $       29,541
Accrued expenses                                    24,147          37,357
Short term debt and current maturities of
 long term debt                                      5,900          24,913
                                            --------------  --------------
    Total current liabilities                       59,899          91,811
Long term debt, less current maturities            104,100         217,000
Deferred income taxes                               52,972          34,054
Other long term liabilities                          5,676           4,188
                                            --------------  --------------
    Total liabilities                              222,647         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 - 23,198,013 and
   20,981,913, respectively, at October 2,
   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                         274,142         261,772
Treasury stock 2,216,100 shares at October
 2, 2009 and 2,195,085 shares at
 September 26, 2008, at cost                       (52,519)        (52,076)
Accumulated other comprehensive income              17,957          16,728
Retained earnings (accumulated deficit)             67,813         (20,475)
                                            --------------  --------------
Total stockholders' equity                         307,416         205,971
                                            --------------  --------------
  Total liabilities and stockholders'
   equity                                   $      530,063  $      553,024
                                            ==============  ==============




                   AMERICAN ITALIAN PASTA COMPANY
               CONSOLIDATED STATEMENTS OF OPERATIONS
              (in thousands, except per share amounts)


                                              Year Ended
                            ----------------------------------------------
                              October 2,    September 26,   September 28,
                                 2009            2008            2007
                              (53 weeks)      (52 weeks)      (52 weeks)

Revenues                    $      628,162  $      569,196  $      398,122
Cost of goods sold                 451,513         446,891         308,819
                            --------------  --------------  --------------
Gross profit                       176,649         122,305          89,303

Selling and marketing
 expense                            27,989          27,727          21,503
General and administrative
 expense                            34,363          46,663          33,548
Impairment charges to
 brands                                  -           3,654               -
(Gain) loss related to
 long-lived assets                     885           1,139            (109)
                            --------------  --------------  --------------
Operating profit                   113,412          43,122          34,361
Interest expense, net               16,499          26,240          29,421
Other (income) expense, net             (8)             92            (245)
                            --------------  --------------  --------------

Income before income taxes          96,921          16,790           5,185
Income tax expense
 (benefit)                           8,633          (2,321)           (163)
                            --------------  --------------  --------------
Net income                  $       88,288  $       19,111  $        5,348
                            ==============  ==============  ==============

Net income per common share
 (basic)                    $         4.27  $         1.00  $         0.29

Weighted-average common
 shares outstanding                 20,692          19,118          18,673
                            ==============  ==============  ==============

Net income per common share
 (assuming dilution)        $         4.10  $         0.99  $         0.28

Weighted-average common
 shares outstanding
 (including dilutive
 securities)                        21,555          19,384          18,951
                            ==============  ==============  ==============

Contact Information

  • Contact:
    Paul R. Geist
    EVP & Chief Financial Officer
    816-584-5228
    Email Contact