KANSAS CITY, Mo., June 27 /PRNewswire-FirstCall/ -- American Italian Pasta Company (Pink Sheets: AITP), the largest producer of dry pasta in North America, today announced results for the fiscal year ended September 28, 2007. With this filing, the Company is current with its annual SEC reporting requirements.
RESTATEMENT PROCESS COMPLETE
"We are pleased to now be current on all of our annual filings and to have the entire restatement process behind us as we continue to lead the company in an exciting and positive direction," said Jack Kelly, CEO of AIPC. "More importantly, we are excited to share that the execution of our business plan is bearing fruit. Our operational performance and financial results reported for fiscal 2007 show significant improvement in operating profit and net income over the prior year."
FISCAL 2007 FINANCIAL RESULTS
Revenues for the year increased $31.1 million, or 8.5%, to $398.1 million, led by a 13.4% increase in revenue growth in the retail market which was partially offset by a 4.9% decrease in the institutional market. Net income for fiscal 2007 increased $35.7 million to $5.3 million, or $.28 per diluted share, versus a net loss of $30.4 million, or $1.65 loss per share, in fiscal 2006.
Operational Highlights
* Retail Revenues: The Company's retail revenues increased $35.9 million, or 13.4%, to $304.4 million for the fiscal year ended September 28, 2007, from $268.5 million for the fiscal year ended September 29, 2006. Revenues increased $15.4 million, or 5.7%, due to volume increase and increased $20.2 million, or 7.5%, due to higher average selling prices. Revenues increased by $0.3 million due to an increase in payments received from the U.S. Government under the Continued Dumping and Subsidy Offset Act of 2000.
* Institutional Revenues: The Company's institutional revenues (which include the food service channel) decreased $4.8 million, or 4.9%, to $93.7 million for fiscal year ended September 28, 2007 from $98.5 million for the fiscal year ended September 29, 2006. Revenues decreased $5.9 million, or 6.0%, due to volume losses and increased $1.1 million, or 1.1%, due to higher average selling prices and changes in sales mix.
* Cost of Goods Sold: Raw materials and other production costs were unfavorable to the prior year, but the effect of the increase was offset by higher selling prices, allowing the Company to maintain its gross margin at 22.4% for fiscal year 2007. Cost of goods sold in 2007 includes $0.8 million provision of inventory obsolescence, which was a reduction of $0.6 million from $1.4 million in fiscal year 2006.
* Loss on disposition of brands and trademarks: During fiscal 2006, the Company sold its Mrs. Leeper's and Eddie's Spaghetti brands and recorded a loss on disposition of brands and trademarks of $4.7 million. There was no such loss in fiscal 2007.
* Loss on long lived assets: During fiscal 2006, the Company permanently closed and sold its Kenosha, Wisconsin facility. The plant and certain equipment was sold and a pre-tax loss of $15.6 million was recorded. In addition, certain pasta lines and packaging equipment considered unnecessary for production planning were taken out of service. These assets were disposed or written down to their fair market value. In fiscal 2007, the Company recorded a $0.1 million gain.
As a result of minor year-end adjustments, the audited financial results described in this release differ slightly from those unaudited results previously reported for fiscal 2007.
Liquidity and Capital Resources
The Company stated that it is currently in compliance with the covenants of its credit facility. Projected future borrowing levels do not exceed the facility's available commitment. Absent any significant increases in historic levels of professional fees or indemnification obligations, the Company believes cash available through future operations and its existing credit facility will be sufficient to meet expected capital and liquidity needs in the foreseeable future.
CEO COMMENTS
"Through the efforts of our outstanding employees and with the support and confidence of our customers, AIPC has made significant progress and, indeed, is entering a new chapter with optimism and anticipation," Mr. Kelly continued. "We have significantly strengthened our operations, grown revenues, increased volume, and increased profitability -- even in the face of significant challenges -- and made financial integrity and strong corporate governance top priorities.
"As we look ahead, we will continue to focus on building upon these successes, capitalizing on our strengths and identifying growth areas and opportunities to deliver even more value to our customers," he added.
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 600 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 liquidity and capital resources are forward looking. If any of the Company's assumptions prove incorrect or should unanticipated circumstances arise, the Company's actual results could materially differ from those anticipated by such forward-looking statements. The Company will not update any forward-looking statements in this press release to reflect future events.
AMERICAN ITALIAN PASTA COMPANY CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per share amounts) Year Ended Year Ended September 28, 2007 September 29, 2006 Change Revenues $398,122 $367,023 $31,099 Cost of goods sold 308,819 284,777 24,042 Gross profit 89,303 82,246 7,057 Gross profit as a percent of revenues 22.4% 22.4% Selling and marketing expense 21,503 22,871 (1,368) General and administrative expense 33,548 35,459 (1,911) Impairment charges to brands and trademarks - 998 (998) Loss on disposition of brands and trademarks - 4,708 (4,708) (Gains) losses related to long- lived assets (109) 22,268 (22,377) Operating profit (loss) 34,361 (4,058) 38,419 Operating profit (loss)as a percent of revenues 8.6% (1.1)% Interest expense, net 29,421 29,509 (88) Other (income) expense, net (245) (913) 668 Income (loss) before income taxes 5,185 (32,654) 37,839 Income tax (benefit) (163) (2,241) 2,078 Net income (loss) $5,348 $(30,413) $35,761 EARNINGS PER COMMON SHARE Net income (loss) per common share $0.29 ($1.65) Weighted-average common shares outstanding 18,673 18,386 EARNINGS PER COMMON SHARE - ASSUMING DILUTION Net income (loss) per common share $0.28 $(1.65) Weighted-average common shares outstanding (including dilutive securities) 18,951 18,386 AMERICAN ITALIAN PASTA COMPANY CONSOLIDATED BALANCE SHEETS (in thousands, except share amounts) September 28, 2007 September 29, 2006 ASSETS Current assets: Cash and temporary investments $16,635 $22,805 Trade and other receivables, net 38,279 32,706 Inventories 44,443 40,638 Prepaid expenses and other current assets 7,629 6,389 Deferred income taxes 2,381 1,156 Total current assets 109,367 103,694 Property, plant and equipment, net 316,109 324,464 Brands and trademarks 83,282 82,772 Other assets 19,205 21,039 Total assets $527,963 $531,969 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $19,195 $18,555 Accrued expenses 31,523 28,258 Current portion of deferred revenues 99 99 Income taxes payable 1,082 715 Current maturities of long-term debt 1,963 1,782 Total current liabilities 53,862 49,409 Long-term debt, less current maturities 240,000 260,500 Deferred income taxes 35,286 34,728 Litigation settlement 26,500 26,500 Deferred revenue, less current portion 397 496 Total liabilities 356,045 371,633 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 21 21 Issued and outstanding shares - 20,832,627 and 18,674,628, respectively, at September 28, 2007; 20,779,204 and 18,640,660, respectively, at September 29, 2006 Class B common stock, par value $.001 Authorized shares - 25,000,000 - - Issued and outstanding - none Additional paid-in capital 247,492 245,623 Treasury stock, 2,157,999 shares in 2007 and 2,138,544 shares in 2006, at cost (52,029) (51,857) Accumulated other comprehensive income 15,352 10,815 Accumulated deficit (38,918) (44,266) Total stockholders' equity 171,918 160,336 Total liabilities and stockholders' equity $527,963 $531,969
