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Company update: Ridley Inc Q3

For the three months ended March 31, 2012, Ridley's earnings before interest, taxes, depreciation, amortization, and exceptions (EBITDA were US$10.2 million compared to $7.4 million last year.

Net profit after income taxes (NPAT) was $4.0 million (30 cents per share) compared to $3.4 million (27 cents per share) last year.
 
Ridley's tonnage volumes in the third quarter of fiscal 2012 were even with the same period last year reflecting a continuation of generally favourable economic conditions for livestock and poultry producers despite unseasonably mild weather this year.
 
The Company continues to grow in volumes of higher value-added feed supplements and premixes while volumes of complete feeds have decreased.
 
Because of rising feed ingredient prices, sales revenues increased in the third quarter over last year by $13.1 million to $167.3 million.
 
Gross profits increased by 12.5% in the quarter to $22.2 million on increased volumes and higher unit margins from an improved product mix and rising commodity markets.
 
However, feed ingredient prices remain volatile and there is no certainty that the improvement in unit margins attributable to market trends in the third quarter will extend to future periods.
 
In the third quarter of fiscal 2012, Ridley discontinued operations at its feed manufacturing facilities in Bushnell, Illinois and Castleton, Indiana.
 
The decision to close these facilities was made after a determination that their feed products could be manufactured more efficiently at Ridley's other facilities in the Midwest.
 
Ridley recorded $2.0 million in charges in the third quarter for asset impairments, loss on sale of facilities, severance and other restructuring costs related to these closures.
 
Net earnings before exceptions in the third quarter of fiscal 2012 were $5.3 million compared to $3.4 million in the same period last year.
 
Volume growth and an improved product mix enabled US Feed Operations to report improved operating income before exceptions of $2.4 million in the third quarter.
 
Ridley Block Operations achieved a $1.0 million increase in operating income also on volume growth that more than offset unfavourable weather conditions this winter.
 
Ridley Feed Ingredients' operating income of $1.0 million in the quarter was even with last year.
 
An increase of $0.4 million in operating income from Canadian Feed Operations reflects improvements in unit margins and lower operating expenses in a difficult market environment where complete feed volumes have declined.
 

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