Ridley Inc.
TSX : RCL

Ridley Inc.

July 27, 2011 13:04 ET

Ridley Inc. Reports Preliminary Results for Fiscal 2011

MANKATO, MINNESOTA and WINNIPEG, MANITOBA--(Marketwire - July 27, 2011) - Ridley Inc. (TSX:RCL) today released preliminary unaudited financial information for the fourth quarter and fiscal year ended June 30, 2011 based on management's review of preliminary unaudited results for these periods. All currency amounts are stated in U.S. dollars unless otherwise noted.

For the twelve months of fiscal 2011, Ridley's preliminary unaudited results indicate net income after taxes of $8.7 million compared to net income of $4.7 million last year. Operating income before taxes and exceptions in fiscal 2011 improved by $3.8 million to $16.9 million compared to $13.1 million last year. The key drivers of earnings growth in fiscal 2011 were expanded sales of block supplements and a significant improvement over last year in the operating performance of Canadian feed operations, which had been adversely affected in prior years by poor economic conditions for livestock and poultry producers.

Ridley released its preliminary unaudited results in anticipation of the disclosure of certain of its financial information in the interim financial statements of its majority shareholder, Fairfax Financial Holdings Limited. Ridley's audited consolidated financial statements and MD&A for the year ended June 30, 2011 will be released in September 2011 and will contain additional information concerning Ridley's fourth quarter results. Both documents will be contained in Ridley's 2011 annual report and will be available on the Company's website www.ridleyinc.com or at www.sedar.com.

Ridley's preliminary unaudited results for the fourth quarter ended June 30, 2011 indicate operating income before exceptions of $1.3 million compared to a loss last year of $1.8 million. Ridley's results in the fourth quarter of fiscal 2011 reflect an improvement in operating performance of all reporting segments relative to the prior year. Gross profits were higher by $2.2 million as the result of growth in sales volumes and continued improvement in unit margins as Ridley's product mix trends towards higher value added animal nutrition products. Manufacturing costs and overhead expenses in the fourth quarter were lower this year due to improved operating efficiencies resulting from restructuring initiatives in prior years. Ridley's operating loss in the fourth quarter last year included a $2.6 million asset impairment loss, a $0.9 million restructuring charge resulting from the closure of two redundant feed manufacturing facilities in Manitoba and reorganization of Canadian head office functions, and a $0.3 million gain on the sale of a facility in North Carolina.

Income taxes in the fourth quarter this year include a $1.5 million provision for U.S. withholding taxes on a distribution by Ridley's U.S. subsidiary to its Canadian parent entity to settle an intercompany loan. Including this tax provision, Ridley's unaudited results for the fourth quarter of fiscal 2011 indicate a net loss after taxes of $0.9 million compared to a loss after taxes for the fourth quarter last year of $3.9 million.

The economic environment for livestock and poultry producers in Canada and the United States has improved since 2009, mainly as a result of higher market prices. However, exceptionally high feed costs and low animal numbers will continue to weigh on feed markets.

SUMMARY OF RESULTS

The following summary data is presented to assist in understanding the fourth quarter and fiscal year 2011 preliminary unaudited information:

Summary of Preliminary Information (unaudited) Three months
ended
Twelve months
ended
June 30 June 30
($ millions) 2011 2010 2011 2010
Revenue 146.5 120.3 587.5 547.6
Gross profit 16.5 14.3 78.4 74.7
Operating expenses before exceptions 15.2 16.1 61.6 61.6
Operating income (loss) before exceptions 1.3 (1.8 ) 16.9 13.1
Exceptions:
Asset impairments - 2.6 - 2.6
Gain on sale of facilities - (0.3 ) - (0.3 )
Restructuring costs - 0.9 - 0.9
Operating income (loss) 1.3 (4.9 ) 16.9 9.9
Interest - net 0.1 0.1 0.5 0.3
Earnings (loss) before income taxes 1.2 (5.1 ) 16.4 9.6
Provision for (recovery of) income taxes 2.1 (1.2 ) 7.7 4.9
Net earnings (loss) (0.9 ) (3.9 ) 8.7 4.7

Forward-Looking Information

This report contains "forward-looking" information. The forward-looking information includes statements concerning Ridley's outlook for the future, as well as other statements of beliefs, plans and strategies or anticipated events, and similar expressions concerning matters that are not historical facts. Forward- looking information and statements are subject to risks and uncertainties that could cause actual results to differ materially from those expressed in, contemplated or implied by, such statements. These risks and uncertainties include the ability to make effective acquisitions and successfully integrate newly acquired businesses into existing operations, the availability and prices of raw materials and supplies, livestock disease, product pricing, the competitive environment and related market conditions, operating efficiencies, access to capital, the cost of compliance with environmental and health standards and other regulatory requirements affecting Ridley's business, adverse results from ongoing litigation, and actions of domestic and foreign governments. Other risks are outlined in the Risk Management section of the MD&A included in Ridley's Annual Report. Unless otherwise required by applicable securities law, Ridley disclaims any intention or obligation to publicly update or revise this information, whether as a result of new information, future events or otherwise. Ridley cautions readers not to place undue reliance upon forward-looking statements.

Ridley Inc., headquartered in Mankato, Minnesota and Winnipeg, Manitoba, is one of North America's leading commercial animal nutrition companies. Ridley employs more than 900 people in the United States and Canada in the manufacture and distribution of a full range of animal nutrition products under highly regarded trade names. Ridley's common shares are listed on The Toronto Stock Exchange (trading symbol: RCL).

Contact Information

  • RIDLEY Inc.
    Steve VanRoekel
    President and CEO
    (507) 388-9412

    RIDLEY Inc.
    Gordon Hildebrand
    Chief Financial Officer
    (507) 388-9577