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.
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.
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 US withholding taxes on a distribution by Ridley’s US 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: