Document_and_Entity_Informatio
Document and Entity Information | 6 Months Ended | |
Feb. 28, 2014 | Apr. 07, 2014 | |
Document And Entity Information [Abstract] | ' | ' |
Document Type | '10-Q | ' |
Amendment Flag | 'false | ' |
Document Period End Date | 28-Feb-14 | ' |
Document Fiscal Year Focus | '2014 | ' |
Document Fiscal Period Focus | 'Q2 | ' |
Trading Symbol | 'PENX | ' |
Entity Registrant Name | 'PENFORD CORP | ' |
Entity Central Index Key | '0000739608 | ' |
Current Fiscal Year End Date | '--08-31 | ' |
Entity Filer Category | 'Accelerated Filer | ' |
Entity Common Stock, Shares Outstanding | ' | 12,548,038 |
CONDENSED_CONSOLIDATED_BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (USD $) | Feb. 28, 2014 | Aug. 31, 2013 |
In Thousands, unless otherwise specified | ||
Current assets: | ' | ' |
Cash and cash equivalents | ' | $221 |
Trade accounts receivable, net | 41,420 | 43,432 |
Inventories | 35,812 | 33,992 |
Prepaid expenses | 2,304 | 3,100 |
Material and supplies | 4,857 | 4,634 |
Other current assets | 5,400 | 4,735 |
Total current assets | 89,793 | 90,114 |
Property, plant and equipment, net | 111,519 | 112,141 |
Restricted cash value of life insurance | 7,822 | 7,837 |
Deferred tax assets | 3,737 | 4,987 |
Other assets | 1,085 | 1,248 |
Other intangible assets, net | 499 | 313 |
Goodwill, net | 7,978 | 7,978 |
Total assets | 222,433 | 224,618 |
Current liabilities: | ' | ' |
Cash overdraft, net | 7,621 | 5,072 |
Current portion of long-term debt and capital lease obligations | 1,302 | 231 |
Accounts payable | 19,610 | 20,656 |
Short-term financing arrangements | 371 | 1,474 |
Accrued liabilities | 7,981 | 8,207 |
Total current liabilities | 36,885 | 35,640 |
Long-term debt and capital lease obligations | 67,597 | 72,739 |
Other postretirement benefits | 16,720 | 16,596 |
Pension benefit liability | 10,196 | 10,552 |
Other liabilities | 6,085 | 6,198 |
Total liabilities | 137,483 | 141,725 |
Commitments and contingencies (Note 12) | ' | ' |
Shareholders' equity: | ' | ' |
Common stock, par value $1.00 per share, authorized 29,000 shares, issued 14,529 and 14,479 shares, respectively, including treasury shares | 14,513 | 14,454 |
Preferred stock, par value $1.00 per share, authorized 1,000 shares, none issued | ' | ' |
Additional paid-in capital | 105,728 | 105,166 |
Retained earnings | 5,376 | 3,649 |
Treasury stock, at cost, 1,981 shares | -32,757 | -32,757 |
Accumulated other comprehensive loss | -7,910 | -7,619 |
Total shareholders' equity | 84,950 | 82,893 |
Total liabilities and shareholders' equity | $222,433 | $224,618 |
CONDENSED_CONSOLIDATED_BALANCE1
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) (USD $) | Feb. 28, 2014 | Aug. 31, 2013 |
In Thousands, except Per Share data, unless otherwise specified | ||
Statement Of Financial Position [Abstract] | ' | ' |
Common stock, par value | $1 | $1 |
Common stock, shares authorized | 29,000 | 29,000 |
Common stock, shares issued | 14,529 | 14,479 |
Preferred stock, par value | $1 | $1 |
Preferred stock, share authorized | 1,000 | 1,000 |
Preferred stock, share issued | 0 | 0 |
Treasury stock, shares | 1,981 | 1,981 |
CONDENSED_CONSOLIDATED_STATEME
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (USD $) | 3 Months Ended | 6 Months Ended | ||
In Thousands, except Per Share data, unless otherwise specified | Feb. 28, 2014 | Feb. 28, 2013 | Feb. 28, 2014 | Feb. 28, 2013 |
Income Statement [Abstract] | ' | ' | ' | ' |
Sales | $106,107 | $110,082 | $215,357 | $228,104 |
Cost of sales | 93,938 | 99,081 | 192,480 | 203,845 |
Gross margin | 12,169 | 11,001 | 22,877 | 24,259 |
Operating expenses | 7,850 | 7,171 | 15,650 | 14,944 |
Research and development expenses | 1,408 | 1,300 | 2,675 | 2,765 |
Income from operations | 2,911 | 2,530 | 4,552 | 6,550 |
Interest expense | -816 | -983 | -1,630 | -2,064 |
Other non-operating income (expense), net | 6 | 84 | 14 | -79 |
Income before income taxes | 2,101 | 1,631 | 2,936 | 4,407 |
Income tax expense | 861 | 440 | 1,209 | 1,510 |
Net income | $1,240 | $1,191 | $1,727 | $2,897 |
Weighted-average common shares and equivalents outstanding: | ' | ' | ' | ' |
Basic | 12,501 | 12,343 | 12,487 | 12,325 |
Diluted | 12,835 | 12,503 | 12,831 | 12,439 |
Earnings per common share: | ' | ' | ' | ' |
Basic earnings per share | $0.10 | $0.10 | $0.14 | $0.23 |
Diluted earnings per share | $0.10 | $0.10 | $0.13 | $0.23 |
CONDENSED_CONSOLIDATED_STATEME1
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Unaudited) (USD $) | 3 Months Ended | 6 Months Ended | ||
In Thousands, unless otherwise specified | Feb. 28, 2014 | Feb. 28, 2013 | Feb. 28, 2014 | Feb. 28, 2013 |
Statement Of Income And Comprehensive Income [Abstract] | ' | ' | ' | ' |
Net income | $1,240 | $1,191 | $1,727 | $2,897 |
Other comprehensive income (loss), net of tax: | ' | ' | ' | ' |
Change in fair value of derivatives, net of tax benefit (expense) of $1,625, $32, $2,371, and $(157), respectively | -2,651 | -53 | -3,868 | 256 |
(Gain) loss from derivative transactions reclassified into earnings, net of tax (expense) benefit of $1,326, $(95), $2,078, and $(1,434), respectively | 2,163 | -155 | 3,390 | -2,341 |
Amortization of prior service cost, net of taxes of $8, $8, $15, and $17, respectively | 12 | 14 | 25 | 28 |
Amortization of actuarial loss, net of taxes of $50, $209, $100, and $418, respectively | 81 | 341 | 162 | 682 |
Other comprehensive income (loss) | -395 | 147 | -291 | -1,375 |
Total comprehensive income | $845 | $1,338 | $1,436 | $1,522 |
CONDENSED_CONSOLIDATED_STATEME2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Unaudited) (Parenthetical) (USD $) | 3 Months Ended | 6 Months Ended | ||
In Thousands, unless otherwise specified | Feb. 28, 2014 | Feb. 28, 2013 | Feb. 28, 2014 | Feb. 28, 2013 |
Statement Of Income And Comprehensive Income [Abstract] | ' | ' | ' | ' |
Change in fair value of derivatives, Tax benefit (expense) | $1,625 | $32 | $2,371 | ($157) |
Gain from derivative transactions reclassified into earnings, Tax (expense) benefit | 1,326 | -95 | 2,078 | -1,434 |
Amortization of prior service cost, Taxes | 8 | 8 | 15 | 17 |
Amortization of actuarial loss, Taxes | $50 | $209 | $100 | $418 |
CONDENSED_CONSOLIDATED_STATEME3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (USD $) | 6 Months Ended | |
In Thousands, unless otherwise specified | Feb. 28, 2014 | Feb. 28, 2013 |
Cash flows from operating activities: | ' | ' |
Net income | $1,727 | $2,897 |
Adjustments to reconcile net income to net cash provided by operations: | ' | ' |
Depreciation and amortization | 6,599 | 6,803 |
Stock-based compensation | 515 | 812 |
Loss on sale of fixed assets | ' | 12 |
Deferred income tax expense | 1,049 | 1,394 |
Non-cash (gain) loss on hedging transactions | -14 | 760 |
Excess tax benefit from stock-based compensation | -152 | ' |
Change in assets and liabilities: | ' | ' |
Trade accounts receivable | 2,012 | -3,413 |
Inventories | -1,806 | -4,601 |
Prepaid expenses | 796 | 234 |
Other current assets | -665 | 2,080 |
Increase in margin accounts | -384 | -2,853 |
Accounts payable and accrued liabilities | -1,026 | -3,183 |
Pension and other postretirement benefit contributions | -1,453 | -262 |
Pension and other postretirement benefit costs | 1,522 | 2,554 |
Other | -329 | 118 |
Net cash flow provided by operating activities | 8,391 | 3,352 |
Cash flows from investing activities: | ' | ' |
Acquisitions of property, plant and equipment, net | -5,212 | -4,990 |
Other | -265 | ' |
Net cash used in investing activities | -5,477 | -4,990 |
Cash flows from financing activities: | ' | ' |
Proceeds from revolving line of credit | 4,500 | 10,500 |
Payments on revolving line of credit | -9,156 | -9,100 |
Payments of long-term debt | -100 | -100 |
Payments under capital lease obligations | -78 | -139 |
Payments on financing arrangements | -1,108 | -893 |
Excess tax benefit from stock-based compensation | 152 | ' |
Exercise of stock options | 106 | 201 |
Increase in cash overdraft | 2,549 | 1,173 |
Other | ' | -8 |
Net cash provided by (used in) financing activities | -3,135 | 1,634 |
Decrease in cash and cash equivalents | -221 | -4 |
Cash and cash equivalents, beginning of period | 221 | 154 |
Cash and cash equivalents, end of period | ' | $150 |
Business
Business | 6 Months Ended |
Feb. 28, 2014 | |
Accounting Policies [Abstract] | ' |
Business | ' |
1—BUSINESS | |
Penford Corporation (which, together with its subsidiary companies, is referred to herein as “Penford” or the “Company”) is a developer, manufacturer and marketer of specialty natural-based ingredient systems for food and industrial applications, including fuel grade ethanol. Penford’s products provide convenient and cost-effective solutions derived from renewable sources. Sales of the Company’s products are generated using a combination of direct sales and distributor agreements. | |
The Company has significant research and development capabilities, which are used in applying the complex chemistry of carbohydrate-based materials and in developing applications to address customer needs. In addition, the Company has specialty processing capabilities for a variety of modified starches. | |
Penford manages its business in two segments: Industrial Ingredients and Food Ingredients. These segments are based on broad categories of end-market users. The Industrial Ingredients segment is a supplier of specialty starches to the paper, packaging and other industries, and is a producer of fuel grade ethanol. The Industrial Ingredients segment also sells the by-products from its corn wet milling manufacturing operations, primarily germ, fiber and gluten to customers who use these by-products as animal feed or to produce corn oil. The Food Ingredients segment is a developer and manufacturer of specialty starches and dextrins for the food manufacturing and food service industries. See Note 10 for financial information regarding the Company’s business segments. |
Basis_of_Presentation
Basis of Presentation | 6 Months Ended |
Feb. 28, 2014 | |
Accounting Policies [Abstract] | ' |
Basis of Presentation | ' |
2—BASIS OF PRESENTATION | |
Consolidation | |
The accompanying condensed consolidated financial statements include the accounts of Penford and its wholly owned subsidiaries. All intercompany transactions and balances have been eliminated. The condensed consolidated balance sheet at February 28, 2014 and the condensed consolidated statements of operations, comprehensive income (loss) and cash flows for the interim periods ended February 28, 2014 and 2013 have been prepared by the Company without audit. In the opinion of management, all adjustments, consisting only of normal recurring adjustments, which are necessary to present fairly the financial information, have been made. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). The results of operations for interim periods are not necessarily indicative of the operating results of a full year or of future operations. Certain reclassifications have been made to prior year’s financial statements in order to conform to the current year presentation. The accompanying condensed consolidated financial statements should be read in conjunction with the consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended August 31, 2013. | |
Use of Estimates | |
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Estimates are used in accounting for, among other things, the allowance for doubtful accounts: accruals: legal contingencies: the determination of fair value of net assets acquired in a business combination: the determination of assumptions for pension and postretirement employee benefit costs, useful lives of property, plant and equipment: the assessment of a potential impairment of goodwill or long-lived assets and income taxes, including the determination of a need for a valuation allowance for deferred tax assets. Actual results may differ from previously estimated amounts. | |
Accounting Pronouncements Adopted | |
In February 2013, the Financial Accounting Standards Board (“FASB”) issued guidance requiring entities to provide information about the amounts reclassified out of accumulated other comprehensive income by component. Entities are required to present, either on the face of the financial statements or in the notes, significant amounts reclassified out of accumulated other comprehensive income by the respective line items of net income. This guidance did not change the current requirements for reporting net income or other comprehensive income. The Company adopted this guidance effective September 1, 2013 and the required disclosure is presented in Note 6. | |
In December 2011, the FASB issued guidance creating new disclosure requirements about the nature of an entity’s rights of setoff and related arrangements associated with its financial instruments and derivative instruments. The Company adopted this guidance effective September 1, 2013 and the required disclosure is presented in Note 9. | |
In July 2013, the FASB issued guidance designed to reduce diversity in practice of financial statement presentation of an unrecognized tax benefit when a net operating loss carryforward, a similar tax loss or a tax credit carryforward exists. The Company adopted this accounting presentation effective September 1, 2013. The Company complied with the prescribed accounting presentation in prior periods; therefore, the adoption of this guidance had no impact on the presentation of the Company’s financial statements. |
Balance_Sheet_Details
Balance Sheet Details | 6 Months Ended | ||||||||
Feb. 28, 2014 | |||||||||
Organization Consolidation And Presentation Of Financial Statements [Abstract] | ' | ||||||||
Balance Sheet Details | ' | ||||||||
3—BALANCE SHEET DETAILS | |||||||||
The components of inventory were as follows: | |||||||||
February 28, | August 31, | ||||||||
2014 | 2013 | ||||||||
(In thousands) | |||||||||
Raw materials | $ 10,324 | $ 10,381 | |||||||
Work in progress | 1,264 | 1,913 | |||||||
Finished goods | 24,224 | 21,698 | |||||||
Total inventories | $ 35,812 | $ 33,992 | |||||||
The components of property, plant and equipment, net were as follows: | |||||||||
February 28, | August 31, | ||||||||
2014 | 2013 | ||||||||
(In thousands) | |||||||||
Land and land improvements | $ 12,131 | $ 11,881 | |||||||
Plant and equipment | 363,144 | 359,909 | |||||||
Construction in progress | 6,402 | 5,255 | |||||||
381,677 | 377,045 | ||||||||
Accumulated depreciation | (270,158) | (264,904) | |||||||
Net property, plant and equipment | $ 111,519 | $ 112,141 | |||||||
At February 28, 2014 and August 31, 2013, the Company had approximately $0.5 million and $0.7 million, respectively, of payables related to property, plant and equipment that have been excluded from acquisitions of property, plant and equipment in the statement of cash flows. | |||||||||
Components of accrued liabilities were as follows: | |||||||||
February 28, | August 31, | ||||||||
2014 | 2013 | ||||||||
(In thousands) | |||||||||
Employee-related costs | $ | 3,950 | $ | 3,931 | |||||
Other accrued liabilities | 4,031 | 4,276 | |||||||
Total accrued liabilities | $ | 7,981 | $ | 8,207 | |||||
Employee-related costs included accrued payroll, compensated absences, payroll taxes, benefits and incentives. |
Debt
Debt | 6 Months Ended |
Feb. 28, 2014 | |
Debt Disclosure [Abstract] | ' |
Debt | ' |
4—DEBT | |
As of February 28, 2014, the Company had $66.9 million outstanding on its $130 million secured revolving credit facility (the “2012 Agreement”) with a syndicate of banks. The lenders’ loan commitment may be increased under certain circumstances. | |
The maturity date for the revolving loans under the 2012 Agreement is July 9, 2017. Interest rates under the 2012 Agreement are based on either the London Interbank Offered Rate (“LIBOR”) or the prime rate, depending on the selection of available borrowing options under the 2012 Agreement. Pursuant to the 2012 Agreement, the interest rate margin over LIBOR can range between 2% and 4%, depending upon the ratio of the Company’s funded debt to earnings before interest, taxes, depreciation and amortization (defined in the 2012 Agreement as the “Total Leverage Ratio”). | |
The 2012 Agreement provides that the Total Leverage Ratio shall not exceed 3.25 through May 31, 2014 and 3.0 thereafter. In addition, the Company must maintain a Fixed Charge Coverage Ratio, as defined in the 2012 Agreement, of not less than 1.35. Annual capital expenditures will be restricted to $15 million if the Total Leverage Ratio is greater than 2.50 for the last two consecutive fiscal quarters. The Company’s obligations under the 2012 Agreement are secured by substantially all of the Company’s assets. At February 28, 2014, the Company was in compliance with the covenants of the 2012 Agreement. On March 21, 2014, the 2012 Agreement was amended to adjust certain covenants. See Note 13. | |
At February 28, 2014, the Company also had two non-interest bearing loans from the Iowa Department of Economic Development (“IDED”). The IDED provided two five-year non-interest bearing loans as follows: (1) a $1.0 million loan to be repaid in 60 equal monthly payments of $16,667 beginning December 1, 2009; and (2) a $1.0 million loan, which is forgivable if the Company maintains certain levels of employment at the Cedar Rapids plant. At February 28, 2014, the Company had $1.1 million outstanding related to the IDED loans. | |
Pursuant to the 2012 Agreement, the Company may declare and pay dividends on its common stock in an amount not to exceed, in any consecutive four quarters, the lesser of $10 million or 50% of Free Cash Flow, as defined in the 2012 Agreement. As of February 28, 2014, the Company was not permitted to pay dividends. |
Income_Taxes
Income Taxes | 6 Months Ended |
Feb. 28, 2014 | |
Income Tax Disclosure [Abstract] | ' |
Income Taxes | ' |
5—INCOME TAXES | |
Effective Tax Rates | |
The Company’s effective tax rates for the three- and six-month periods ended February 28, 2014 were 41.0% and 41.2%, respectively. The difference between the effective tax rates and the U.S. federal statutory rate was due to state income taxes and the effect of additions to the liability for uncertain tax positions described below. | |
The Company’s effective tax rates for the three- and six-month periods ended February 28, 2013 were 27.0% and 34.2%, respectively. The difference between the effective tax rates and the U.S. federal statutory tax rate was primarily due to state income taxes, offset by the tax benefit associated with the research and development tax credit. On January 2, 2013, the American Taxpayer Relief Act of 2012 was enacted, which retroactively reinstated, to January 1, 2012, several corporate tax provisions that had expired, including the research and development tax credit. The Company recorded $0.15 million in the second quarter of fiscal 2013 related to this tax credit for research and development activities in fiscal 2012, which reduced the effective tax rates by 9% and 3%, respectively, for the three- and six-month periods ended February 28, 2013. | |
Valuation Allowance | |
The tax valuation allowance at February 28, 2014 of $1.7 million was related primarily to the small ethanol producer tax credit carryforwards in the United States. Tax laws in the U.S. require that any net operating loss carryforwards be utilized before the Company can utilize the small ethanol producer tax credit carryforwards. Due to the expiration of the small ethanol producer tax credit carryforward period in 2014, the Company does not believe it has sufficient positive evidence to substantiate that the small ethanol producer tax credit carryforwards are realizable at a more-likely-than-not level of assurance. | |
In the second quarter of fiscal 2014, the Company liquidated its Australian subsidiaries and received approval from the Australian tax authorities for the liquidation. As of August 31, 2013, the Company had provided a tax valuation allowance of $10.9 million against the entire Australian net deferred tax asset. During the quarter ended February 28, 2014, as a result of the liquidation, the previously recorded deferred tax asset and corresponding valuation allowance were reversed resulting in no net effect on current or deferred income taxes. | |
At February 28, 2014, the Company had $5.6 million of net U. S. deferred tax assets. Other than for the ethanol tax credit carryforwards discussed above, a valuation allowance has not been provided on the net U.S. deferred tax assets as of February 28, 2014. The determination of the need for a valuation allowance requires significant judgment and estimates. The Company evaluates the requirement for a valuation allowance each quarter. The Company believes that it is more likely than not that future operations and the reversal of existing taxable temporary differences will generate sufficient taxable income to realize its deferred tax assets, except for the small ethanol producer tax credit carryforwards, for which a valuation allowance has been provided. | |
Uncertain Tax Positions | |
In the three- and six month periods ended February 28, 2014, the amount of unrecognized tax benefits increased by approximately $42,000 and $80,000, respectively. The total amount of unrecognized tax benefits at February 28, 2014 was $0.8 million, all of which, if recognized, would favorably impact the effective tax rate. At February 28, 2014, the Company had $0.1 million of accrued interest and penalties included in the long-term tax liability. | |
Other | |
The Company files tax returns in the U.S. federal jurisdiction and various U.S. state jurisdictions, and is subject to examination by taxing authorities in all of those jurisdictions. From time to time, the Company’s tax returns are reviewed or audited by U.S. federal and various U.S. state taxing authorities. The Company believes that adjustments, if any, resulting from these reviews or audits would not be material, individually or in the aggregate, to the Company’s financial position, results of operations or liquidity. It is reasonably possible that the amount of unrecognized tax benefits related to certain of the Company’s tax positions will increase or decrease in the next twelve months as audits or reviews are initiated and settled. At this time, an estimate of the range of a reasonably possible change cannot be made. The Company is not subject to income tax examinations by U.S. federal or state jurisdictions for fiscal years prior to 2009. |
Accumulated_Other_Comprehensiv
Accumulated Other Comprehensive Income (Loss) ("AOCI") | 6 Months Ended | ||||||||||||||
Feb. 28, 2014 | |||||||||||||||
Equity [Abstract] | ' | ||||||||||||||
Accumulated Other Comprehensive Income (Loss) ("AOCI") | ' | ||||||||||||||
6—ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (“AOCI”) | |||||||||||||||
The following tables provide a summary of the changes in accumulated other comprehensive income (loss) for the six months ended February 28, 2014 and 2013: | |||||||||||||||
(In thousands) | Net Unrealized | Gains (Losses) | Accumulated | ||||||||||||
Gains (Losses) | on | Other | |||||||||||||
on Cash Flow | Postretirement | Comprehensive | |||||||||||||
Hedging | Obligations, | Loss | |||||||||||||
Instruments, | Net of Tax | ||||||||||||||
Net of Tax | |||||||||||||||
Balances at August 31, 2013 | $ | (856) | $ | (6,763) | $ | (7,619) | |||||||||
Other comprehensive income (loss) before reclassification adjustments, net of tax | (3,868) | - | (3,868) | ||||||||||||
Amounts reclassified from accumulated other comprehensive income (loss), net of tax | 3,390 | 187 | 3,577 | ||||||||||||
Balances at February 28, 2014 | $ | (1,334) | $ | (6,576) | $ | (7,910) | |||||||||
(In thousands) | Net Unrealized | Gains (Losses) | Accumulated | ||||||||||||
Gains (Losses) | on | Other | |||||||||||||
on Cash Flow | Postretirement | Comprehensive | |||||||||||||
Hedging | Obligations, | Loss | |||||||||||||
Instruments, | Net of Tax | ||||||||||||||
Net of Tax | |||||||||||||||
Balances at August 31, 2012 | $ | 1,638 | $ | (17,231) | $ | (15,593) | |||||||||
Other comprehensive income (loss) before reclassification adjustments, net of tax | 256 | - | 256 | ||||||||||||
Amounts reclassified from accumulated other comprehensive income (loss), net of tax | (2,341) | 710 | (1,631) | ||||||||||||
Balances at February 28, 2013 | $ | (447) | $ | (16,521) | $ | (16,968) | |||||||||
Amounts reclassified from accumulated other comprehensive income (loss) were as follows: | |||||||||||||||
Three Months Ended February 28, 2014 | |||||||||||||||
(In thousands) | Location of Expense | Before Tax | Tax | Net of Tax | |||||||||||
(Income) Recognized in | Amount | Amount | |||||||||||||
Net Earnings | |||||||||||||||
Pension and other postretirement benefit plans: | |||||||||||||||
Amortization of actuarial loss (gain) | Cost of sales | $ | 89 | $ | (35) | $ | 54 | ||||||||
Amortization of actuarial loss (gain) | Operating/R&D expenses | 42 | (15) | 27 | |||||||||||
Amortization of prior service cost | Cost of sales | 2 | (1) | 1 | |||||||||||
Amortization of prior service cost | Operating/R&D expenses | 18 | (7) | 11 | |||||||||||
Total reclassification adjustments | 151 | (58) | 93 | ||||||||||||
Derivatives accounted for as hedges | Cost of sales | 3,489 | (1,326) | 2,163 | |||||||||||
Total reclassifications into income | $ | 3,640 | $ | (1,384) | $ | 2,256 | |||||||||
Six Months Ended February 28, 2014 | |||||||||||||||
(In thousands) | Location of Expense | Before Tax | Tax | Net of Tax | |||||||||||
(Income) Recognized in | Amount | Amount | |||||||||||||
Net Earnings | |||||||||||||||
Pension and other postretirement benefit plans: | |||||||||||||||
Amortization of actuarial loss (gain) | Cost of sales | $ | 178 | $ | (70) | $ | 108 | ||||||||
Amortization of actuarial loss (gain) | Operating/R&D | 84 | (30) | 54 | |||||||||||
expenses | |||||||||||||||
Amortization of prior service cost | Cost of sales | 4 | (2) | 2 | |||||||||||
Amortization of prior service cost | Operating/R&D expenses | 36 | (13) | 23 | |||||||||||
Total reclassification adjustments | 302 | (115) | 187 | ||||||||||||
Derivatives accounted for as hedges | Cost of sales | 5,468 | (2,078) | 3,390 | |||||||||||
Total reclassifications into income | $ | 5,770 | $ | (2,193) | $ | 3,577 | |||||||||
StockBased_Compensation
Stock-Based Compensation | 6 Months Ended | ||||||||||||||||
Feb. 28, 2014 | |||||||||||||||||
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | ' | ||||||||||||||||
Stock-Based Compensation | ' | ||||||||||||||||
7—STOCK-BASED COMPENSATION | |||||||||||||||||
Stock Compensation Plans | |||||||||||||||||
Penford maintains the 2006 Long-Term Incentive Plan, as amended, (the “2006 Incentive Plan”) pursuant to which various stock-based awards may be granted to employees, directors and consultants. As of February 28, 2014, the aggregate number of shares of the Company’s common stock that were available to be issued as awards under the 2006 Incentive Plan was 426,792. In addition, any shares previously granted under the 1994 Stock Option Plan that are subsequently forfeited or not exercised will be available for future grants under the 2006 Incentive Plan. Non-qualified stock options and restricted stock awards granted under the 2006 Incentive Plan generally vest ratably over one to four years and expire seven years from the date of grant. | |||||||||||||||||
General Option Information | |||||||||||||||||
A summary of the stock option activity for the six months ended February 28, 2014, was as follows: | |||||||||||||||||
Number of | Weighted- | Weighted- | Aggregate | ||||||||||||||
Average | Average | Intrinsic Value | |||||||||||||||
Shares | |||||||||||||||||
Exercise Price | Remaining | ||||||||||||||||
Term (in years) | |||||||||||||||||
Outstanding Balance, August 31, 2013 | 1,517,588 | $ 10.30 | |||||||||||||||
Granted | 18,000 | 11.67 | |||||||||||||||
Exercised | -52,500 | 12.85 | |||||||||||||||
Cancelled | -79,250 | 13.55 | |||||||||||||||
Outstanding balance, February 28, 2014 | 1,403,838 | 10.27 | 3.51 | $ 6,066,900 | |||||||||||||
Options exercisable at February 28, 2014 | 1,090,423 | $ 11.29 | 3.01 | $ 3,993,200 | |||||||||||||
The aggregate intrinsic value disclosed in the table above represents the total pretax intrinsic value, based on the Company’s closing stock price of $13.35 as of February 28, 2014 that would have been received by the option holders had all option holders exercised on that date. The intrinsic value of options exercised during the first six months of fiscal 2014 was $327,200. | |||||||||||||||||
Under the 2006 Incentive Plan, the Company granted 18,000 stock options during the first six months of fiscal 2014. The Company estimated the fair value of stock options granted during the first six months of fiscal 2014 using the following weighted-average assumptions and resulting in the following weighted-average grant-date fair values: | |||||||||||||||||
Expected volatility | 60 | % | |||||||||||||||
Expected life (years) | 4.8 | ||||||||||||||||
Interest rate | 1.1-1.8 | % | |||||||||||||||
Weighted-average fair values | $5.88 | ||||||||||||||||
As of February 28, 2014, the Company had $0.5 million of unrecognized compensation cost related to non-vested stock option awards that is expected to be recognized over a weighted-average period of 1.2 years. | |||||||||||||||||
Restricted Stock Awards | |||||||||||||||||
The grant-date fair value of each share of the Company’s restricted stock awards is equal to the fair value of Penford’s common stock at the grant date. The following table summarizes the restricted stock award activity for the six months ended February 28, 2014 as follows: | |||||||||||||||||
Number of | Weighted- | ||||||||||||||||
Shares | Average | ||||||||||||||||
Grant Date | |||||||||||||||||
Fair Value | |||||||||||||||||
Nonvested at August 31, 2013 | 24,489 | $7.35 | |||||||||||||||
Granted | 15,560 | 12.85 | |||||||||||||||
Vested | (24,489) | 7.35 | |||||||||||||||
Cancelled | - | - | |||||||||||||||
Nonvested at February 28, 2014 | 15,560 | $12.85 | |||||||||||||||
On January 1, 2014, each non-employee director received an award of 1,556 shares of restricted stock under the 2006 Incentive Plan at the closing stock price on December 31, 2013. The shares vest one year from the grant date of the award. The Company recognizes compensation cost for restricted stock ratably over the vesting period. | |||||||||||||||||
As of February 28, 2014, the Company had $0.2 million of unrecognized compensation cost related to non-vested restricted stock awards that is expected to be recognized over a weighted-average period of 0.8 years. | |||||||||||||||||
Compensation Expense | |||||||||||||||||
The Company recognizes stock-based compensation expense utilizing the accelerated multiple option approach over the requisite service period, which equals the vesting period. The following table summarizes the total stock-based compensation cost and the effect on the Company’s Condensed Consolidated Statements of Operations (in thousands): | |||||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||||
February 28, | February 28, | ||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||
Cost of sales | $ | - | $ | - | $ | - | $ | - | |||||||||
Operating expenses | 266 | 395 | 515 | 812 | |||||||||||||
Research and development expenses | - | - | - | - | |||||||||||||
Total stock-based compensation expense | $ | 266 | $ | 395 | $ | 515 | $ | 812 | |||||||||
Income tax benefit | 101 | 150 | 196 | 309 | |||||||||||||
Total stock-based compensation expense, net of tax | $ | 165 | $ | 245 | $ | 319 | $ | 503 | |||||||||
Pension_and_PostRetirement_Ben
Pension and Post-Retirement Benefit Plans | 6 Months Ended | ||||||||||||||||
Feb. 28, 2014 | |||||||||||||||||
Compensation And Retirement Disclosure [Abstract] | ' | ||||||||||||||||
Pension and Post-Retirement Benefit Plans | ' | ||||||||||||||||
8—PENSION AND POST-RETIREMENT BENEFIT PLANS | |||||||||||||||||
The components of the net periodic pension and post-retirement benefit costs were as follows: | |||||||||||||||||
Defined Benefit Pension Plans | Three Months Ended | Six Months Ended | |||||||||||||||
February 28, | February 28, | ||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||
(In thousands) | |||||||||||||||||
Service cost | $ | 438 | $ | 486 | $ | 876 | $ | 972 | |||||||||
Interest cost | 735 | 662 | 1,470 | 1,324 | |||||||||||||
Expected return on plan assets | (813) | (717) | (1,626) | (1,434) | |||||||||||||
Amortization of prior service cost | 58 | 60 | 116 | 120 | |||||||||||||
Amortization of actuarial losses | 131 | 483 | 262 | 966 | |||||||||||||
Net periodic benefit cost | $ | 549 | $ | 974 | $ | 1,098 | $ | 1,948 | |||||||||
Post-retirement Health Care Plans | Three Months Ended | Six Months Ended | |||||||||||||||
February 28, | February 28, | ||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||
(In thousands) | |||||||||||||||||
Service cost | $ | 28 | $ | 59 | $ | 56 | $ | 118 | |||||||||
Interest cost | 222 | 215 | 444 | 430 | |||||||||||||
Amortization of prior service cost | (38) | (38) | (76) | (76) | |||||||||||||
Amortization of actuarial losses | - | 67 | 134 | ||||||||||||||
Net periodic benefit cost | $ | 212 | $ | 303 | $ | 424 | $ | 606 | |||||||||
In January 2014, the Company amended the defined benefit pension plan for salaried employees (the “Plan”) to cease the accrual of benefits under the Plan effective March 1, 2014. |
Fair_Value_Measurements_and_De
Fair Value Measurements and Derivative Instruments | 6 Months Ended | ||||||||||||||||||||||||
Feb. 28, 2014 | |||||||||||||||||||||||||
Derivative Instruments And Hedging Activities Disclosure [Abstract] | ' | ||||||||||||||||||||||||
Fair Value Measurements and Derivative Instruments | ' | ||||||||||||||||||||||||
9—FAIR VALUE MEASUREMENTS AND DERIVATIVE INSTRUMENTS | |||||||||||||||||||||||||
Fair Value Measurements | |||||||||||||||||||||||||
Presented below are the fair values of the Company’s derivatives as of February 28, 2014 and August 31, 2013: | |||||||||||||||||||||||||
As of February 28, 2014 | Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||||||
(in thousands) | |||||||||||||||||||||||||
Current assets (Other): | |||||||||||||||||||||||||
Commodity derivatives | $ | (2,517) | $ | - | $ | - | $ | (2,517) | |||||||||||||||||
As of August 31, 2013 | Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||||||
(in thousands) | |||||||||||||||||||||||||
Current assets (Other): | |||||||||||||||||||||||||
Commodity derivatives | $ | 512 | $ | - | $ | - | $ | 512 | |||||||||||||||||
The following table reconciles the gross fair value of assets and liabilities subject to offsetting arrangements to the net amounts recorded in the Condensed Consolidated Balance Sheets as Other Current Assets. | |||||||||||||||||||||||||
In thousands | Gross Amounts | Gross | Net Amount of | Cash Collateral | Net Fair Value as | ||||||||||||||||||||
of Recognized | Liabilities | Assets | on Deposit with | Recorded in | |||||||||||||||||||||
Assets | Offset in the | (Liabilities) | Counterparty | Balance Sheets | |||||||||||||||||||||
Balance Sheets | |||||||||||||||||||||||||
As of February 28, 2014 | |||||||||||||||||||||||||
Commodity derivatives | $ | 987 | $ | -3,504 | $ | -2,517 | $ | 4,343 | $ | 1,826 | |||||||||||||||
As of August 31, 2013 | |||||||||||||||||||||||||
Commodity derivatives | $ | 997 | $ | -485 | $ | 512 | $ | 1,700 | $ | 2,212 | |||||||||||||||
The three levels of inputs that may be used to measure fair value are: | |||||||||||||||||||||||||
• | Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity has the ability to access at the measurement date. | ||||||||||||||||||||||||
• | Level 2 inputs are other than quoted prices included within Level 1 that are observable for assets and liabilities such as (1) quoted prices for similar assets or liabilities in active markets, (2) quoted prices for identical or similar assets or liabilities in markets that are not active, or (3) inputs that are derived principally or corroborated by observable market data by correlation or other means. | ||||||||||||||||||||||||
• | Level 3 inputs are unobservable inputs to the valuation methodology for the assets or liabilities. | ||||||||||||||||||||||||
Other Financial Instruments | |||||||||||||||||||||||||
The carrying value of cash and cash equivalents, receivables and payables approximated fair value because of their short maturities. The Company’s bank debt reprices with changes in market interest rates and, accordingly, the carrying amount of such debt approximated fair value. | |||||||||||||||||||||||||
The Company has two non-interest bearing loans from the State of Iowa. The carrying value of the debt at February 28, 2014 was $1.1 million and the fair value of the debt was estimated to be $1.1 million. See Note 4. The fair values of these loans were calculated utilizing Level 2 inputs to a discounted cash flow model. The most significant input was the discount rate, which was determined by comparing yields on corporate debentures for debt issuers with financial characteristics similar to Penford’s non-interest bearing loans. | |||||||||||||||||||||||||
Commodity Contracts | |||||||||||||||||||||||||
For derivative instruments designated as fair value hedges, the gain or loss on the derivative instruments, as well as the offsetting gain or loss on the hedged firm commitments and/or inventory, are recognized in current earnings as a component of cost of sales. For derivative instruments designated as cash flow hedges, the effective portion of the gain or loss on the derivative instruments is reported as a component of other comprehensive income (loss), net of applicable income taxes, and recognized in earnings when the hedged exposure affects earnings. The Company recognizes the gain or loss on the derivative instrument as a component of cost of sales in the period during which the finished goods produced from the hedged item are sold. If it is determined that the derivative instruments used are no longer effective at offsetting changes in the price of the hedged item, then the changes in fair value would be recognized in current earnings as a component of cost of sales. | |||||||||||||||||||||||||
To reduce the price volatility of corn used in fulfilling some of its starch sales contracts, Penford uses readily marketable exchange-traded futures, as well as forward cash corn purchases. Penford also uses exchange-traded futures to hedge corn inventories, firm commitments to purchase corn and forecasted purchases of corn. The exchange-traded futures are not purchased or sold for trading or speculative purposes and are designated as hedges. | |||||||||||||||||||||||||
Selling prices for ethanol fluctuate based on the availability and price of manufacturing inputs and the status of various government regulations and tax incentives. To reduce the risk of the price variability of ethanol, Penford enters into exchange-traded futures contracts to hedge exposure to ethanol price fluctuations. In the first quarter of fiscal 2014, | |||||||||||||||||||||||||
the Company discontinued hedge accounting for certain ethanol futures contracts as they were not effective at offsetting changes in the selling prices of ethanol. The changes in the fair value of these futures contracts were recorded directly to cost of sales until the expiration of the contracts. In the second quarter of fiscal 2014, the Company identified and entered into different exchange-traded ethanol swap contracts, which were designated as cash flow hedges. | |||||||||||||||||||||||||
Hedged transactions are generally expected to occur within 12 months of the time the hedge is established. The deferred loss, net of tax, recorded in accumulated other comprehensive income at February 28, 2014 that is expected to be reclassified into income within 12 months is $1.3 million. | |||||||||||||||||||||||||
As of February 28, 2014, the Company had the following outstanding futures contracts: | |||||||||||||||||||||||||
Corn futures | 7,245,000 Bushels | ||||||||||||||||||||||||
Ethanol futures | 11,508,000 Gallons | ||||||||||||||||||||||||
Natural gas futures | 300,000 mmbtu (millions of British thermal units) | ||||||||||||||||||||||||
The following tables provide information about the fair values of the Company’s derivatives, by contract type, as of February 28, 2014 and August 31, 2013: | |||||||||||||||||||||||||
Assets | Liabilities | ||||||||||||||||||||||||
In thousands | Fair Value | Fair Value | |||||||||||||||||||||||
Balance Sheet | Feb 28, | Aug 31, | Balance Sheet | Feb 28, | Aug 31, | ||||||||||||||||||||
Location | 2014 | 2013 | Location | 2014 | 2013 | ||||||||||||||||||||
Derivatives designated as hedging instruments: | |||||||||||||||||||||||||
Cash flow hedges: | |||||||||||||||||||||||||
Corn futures | Other current assets | $ | 753 | $ | - | Other current assets | $ | - | $ | 485 | |||||||||||||||
Ethanol futures | Other current assets | - | 997 | Other current assets | 3,494 | - | |||||||||||||||||||
Fair value hedges: | |||||||||||||||||||||||||
Corn futures | - | - | Other current assets | 10 | - | ||||||||||||||||||||
Derivatives not designated as hedging instruments: | |||||||||||||||||||||||||
Natural gas futures | Other current assets | 234 | - | Other current assets | - | - | |||||||||||||||||||
$ | 987 | $ | 997 | $ | 3,504 | $ | 485 | ||||||||||||||||||
The following tables provide information about the effect of derivative instruments on the financial performance of the Company for the three- and six-month periods ended February 28, 2014 and 2013: | |||||||||||||||||||||||||
In thousands | Amount of Gain (Loss) | Amount of Gain (Loss) | Amount of Gain (Loss) | ||||||||||||||||||||||
Recognized in OCI | Reclassified from | Recognized in Income | |||||||||||||||||||||||
AOCI into Income | |||||||||||||||||||||||||
3 Months Ended Feb 28, | 3 Months Ended Feb 28, | 3 Months Ended Feb 28, | |||||||||||||||||||||||
2014 | 2013 | 2014 | 2013 | 2014 | 2013 | ||||||||||||||||||||
Derivatives designated as hedging instruments: | |||||||||||||||||||||||||
Cash flow hedges: | |||||||||||||||||||||||||
Corn futures (1) | $ | 1,369 | $ | -318 | $ | -1,349 | $ | 59 | $ | -386 | $ | (312) | |||||||||||||
Ethanol futures (1) | -5,645 | 233 | -2,140 | 191 | 18 | - | |||||||||||||||||||
$ | -4,276 | $ | -85 | $ | -3,489 | $ | 250 | $ | -368 | $ | (312) | ||||||||||||||
Fair value hedges: | |||||||||||||||||||||||||
Corn futures (1) (2) | $ | 91 | $ | (31) | |||||||||||||||||||||
Derivatives not designated as hedging instruments: | |||||||||||||||||||||||||
Natural gas futures (1) | $ | 187 | $ | 89 | |||||||||||||||||||||
Soybean meal futures (1) | 6 | - | |||||||||||||||||||||||
Ethanol futures (1) | 44 | - | |||||||||||||||||||||||
$ | 237 | $ | 89 | ||||||||||||||||||||||
(1) | Gains and losses reported in cost of sales | ||||||||||||||||||||||||
(2) | Hedged items are firm commitments and inventory | ||||||||||||||||||||||||
In thousands | Amount of Gain (Loss) | Amount of Gain (Loss) | Amount of Gain (Loss) | ||||||||||||||||||||||
Recognized in OCI | Reclassified from | Recognized in Income | |||||||||||||||||||||||
AOCI into Income | |||||||||||||||||||||||||
6 Months Ended Feb 28, | 6 Months Ended Feb 28, | 6 Months Ended Feb 28, | |||||||||||||||||||||||
2014 | 2013 | 2014 | 2013 | 2014 | 2013 | ||||||||||||||||||||
Derivatives designated as hedging instruments: | |||||||||||||||||||||||||
Cash flow hedges: | |||||||||||||||||||||||||
Corn futures (1) | $ (679) | $ (573) | $ (3,860) | $ 3,491 | $ (1,397) | $ (115) | |||||||||||||||||||
Ethanol futures (1) | -5,560 | 986 | -1,608 | 284 | -1,566 | (11) | |||||||||||||||||||
$ (6,239) | $ 413 | $ (5,468) | $ 3,775 | $ (2,963) | $ (126) | ||||||||||||||||||||
Fair value hedges: | |||||||||||||||||||||||||
Corn futures (1) (2) | $ 96 | $ (16) | |||||||||||||||||||||||
Derivatives not designated as hedging instruments: | |||||||||||||||||||||||||
Natural gas futures (1) | $ 220 | $ (82) | |||||||||||||||||||||||
Soybean meal futures (1) | 6 | - | |||||||||||||||||||||||
Ethanol futures (1) | 64 | - | |||||||||||||||||||||||
$ 290 | $ (82) | ||||||||||||||||||||||||
(1) | Gains and losses reported in cost of sales | ||||||||||||||||||||||||
(2) | Hedged items are firm commitments and inventory |
Segment_Reporting
Segment Reporting | 6 Months Ended | ||||||||||||||||
Feb. 28, 2014 | |||||||||||||||||
Segment Reporting [Abstract] | ' | ||||||||||||||||
Segment Reporting | ' | ||||||||||||||||
10—SEGMENT REPORTING | |||||||||||||||||
Financial information for the Company's two segments, Industrial Ingredients and Food Ingredients, is presented below. These segments serve broad categories of end-market users. The Industrial Ingredients segment provides carbohydrate-based starches for industrial applications, primarily paper and packaging products and fuel grade ethanol. The Food Ingredients segment produces specialty starches for food applications. A third item for "corporate and other" activity has been presented to provide reconciliation to amounts reported in the condensed consolidated financial statements. Corporate and other represents the activities related to the corporate headquarters such as public company reporting, personnel costs of the executive management team, corporate-wide professional services and consolidation entries. | |||||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||||
February 28, | February 28, | ||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||
(In thousands) | |||||||||||||||||
Sales: | |||||||||||||||||
Industrial Ingredients: | |||||||||||||||||
Industrial Starch | $ | 36,917 | $ | 44,237 | $ | 80,537 | $ | 88,039 | |||||||||
Ethanol | 22,994 | 18,196 | 45,014 | 41,599 | |||||||||||||
By-Products | 15,917 | 21,045 | 30,876 | 44,208 | |||||||||||||
75,828 | 83,478 | 156,427 | 173,846 | ||||||||||||||
Food Ingredients | 30,279 | 26,604 | 58,930 | 54,258 | |||||||||||||
$ | 106,107 | $ | 110,082 | $ | 215,357 | $ | 228,104 | ||||||||||
Income (loss) from operations: | |||||||||||||||||
Industrial Ingredients | $ | 14 | $ | (452) | $ | (2,029) | $ | 935 | |||||||||
Food Ingredients | 5,794 | 5,535 | 12,324 | 10,891 | |||||||||||||
Corporate and other | (2,897) | (2,553) | (5,743) | (5,276) | |||||||||||||
$ | 2,911 | $ | 2,530 | $ | 4,552 | $ | 6,550 | ||||||||||
February 28, | August 31, | ||||||||||||||||
2014 | 2013 | ||||||||||||||||
(In thousands) | |||||||||||||||||
Total assets: | |||||||||||||||||
Industrial Ingredients | $ 127,994 | $ 133,120 | |||||||||||||||
Food Ingredients | 72,699 | 68,550 | |||||||||||||||
Corporate and other | 21,740 | 22,948 | |||||||||||||||
$ 222,433 | $ 224,618 | ||||||||||||||||
Earnings_Per_Share
Earnings Per Share | 6 Months Ended | ||||||||||||||||
Feb. 28, 2014 | |||||||||||||||||
Earnings Per Share [Abstract] | ' | ||||||||||||||||
Earnings Per Share | ' | ||||||||||||||||
11—EARNINGS PER SHARE | |||||||||||||||||
All outstanding unvested share-based payment awards that contain rights to non-forfeitable dividends participate in undistributed earnings with common shareholders and, therefore, are included in computing earnings per share under the two-class method. Under the two-class method, net earnings are reduced by the amount of dividends declared in the period for each class of common stock and participating security. The remaining undistributed earnings are then allocated to common stock and participating securities, based on their respective rights to receive dividends. Restricted stock awards granted to certain employees and directors under the Company’s 2006 Incentive Plan, which contain non-forfeitable rights to dividends at the same rate as common stock, are considered participating securities. | |||||||||||||||||
Basic earnings per share reflect only the weighted-average common shares outstanding during the period. Diluted earnings per share reflect weighted-average common shares outstanding and the effect of any dilutive common stock equivalent shares. Diluted earnings per share is calculated by dividing net income by the average common shares outstanding plus additional common shares that would have been outstanding assuming the exercise of in-the-money stock options, using the treasury stock method. The following table presents the reconciliation of income from operations to income from operations applicable to common shares and the computation of diluted weighted-average shares outstanding: | |||||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||||
February 28, | February 28, | ||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||
(In thousands) | (In thousands) | ||||||||||||||||
Numerator: | |||||||||||||||||
Net income | $ | 1,240 | $ | 1,191 | $ | 1,727 | $ | 2,897 | |||||||||
Less: Allocation to participating securities | (2) | (4) | (3) | (10) | |||||||||||||
Net income applicable to common shares | $ | 1,238 | $ | 1,187 | $ | 1,724 | $ | 2,887 | |||||||||
Denominator: | |||||||||||||||||
Weighted average common shares outstanding, basic | 12,501 | 12,343 | 12,487 | 12,325 | |||||||||||||
Dilutive stock options and awards | 334 | 160 | 344 | 114 | |||||||||||||
Weighted average common shares outstanding, diluted | 12,835 | 12,503 | 12,831 | 12,439 | |||||||||||||
Weighted-average stock options to purchase 589,340 and 604,296 shares of common stock for the three and six months ended February 28, 2014, respectively, were excluded from the calculation of diluted earnings per share because they were antidilutive. Weighted-average stock options to purchase 987,885 and 972,581 shares of common stock for the three and six months ended February 28, 2013, respectively, were excluded from the calculation of diluted earnings per share because they were antidilutive. |
Legal_Proceedings_and_Continge
Legal Proceedings and Contingencies | 6 Months Ended |
Feb. 28, 2014 | |
Commitments And Contingencies Disclosure [Abstract] | ' |
Legal Proceedings and Contingencies | ' |
12—LEGAL PROCEEDINGS AND CONTINGENCIES | |
The Company regularly evaluates the status of claims and legal proceedings in which it is involved in order to assess whether a loss is probable or there is a reasonable possibility that a loss may have been incurred, and to determine if accruals are appropriate. The Company expenses legal costs as such costs are incurred. | |
Pet Product Patent Litigation | |
As reported in the Company’s most recent Annual Report on Form 10-K, in June 2011, the Company was notified that a complaint had been filed against a customer of a Company subsidiary, Penford Products Co. (“Penford Products”), in the United States District Court for the District of New Jersey. The complaint alleged that certain pet products supplied by Penford Products to the customer infringed upon a patent owned by T.F.H. Publications, Inc. (the “Plaintiff”). The customer tendered the defense of this lawsuit to Penford Products pursuant to the terms of its supply agreement with Penford Products. Penford Products thereafter commenced a defense of the litigation on behalf of the customer. In April 2012, the Plaintiff filed an amended complaint alleging that certain additional products made by Penford Products for the same customer infringed upon two of the Plaintiff’s patents. The Plaintiff is seeking an injunction against infringement of its patents, as well as the recovery of certain damages. | |
The court held a claim construction hearing on August 7, 2013, and the Company is awaiting the court’s decision regarding certain disputed patent claims. Following that hearing, in November 2013, the Plaintiff filed another amended complaint adding Penford Products as a defendant in the case. | |
The Company believes that its products do not infringe upon any of the Plaintiff’s patents; however, the Company cannot at this time determine the likelihood of any outcome or estimate any damages that might be awarded. | |
NewPage Bankruptcy Preference Litigation | |
As reported in the Company’s most recent Annual Report on Form 10-K, in late August and early September, 2013, two of the Company’s subsidiaries, Penford Products and Carolina Starches, LLC (“Carolina Starches”), were served with separate complaints filed by Pirinate Consulting Group, LLC, as Litigation Trustee (the “Trustee”) for the NP Creditor Litigation Trust, as successor in interest to the bankruptcy estate of NewPage Corporation, an industrial starch customer of each subsidiary, in the United States Bankruptcy Court for the District of Delaware. | |
The complaint filed against Penford Products seeks the recovery of alleged preferential transfers in the amount of approximately $778,000, together with other damages. An answer denying all liability in this matter has been filed. The Company believes that it has adequate defenses to this claim; however, the Company cannot at this time determine the likelihood of any outcome or estimate any damages that might be awarded. | |
The Trustee also sought recovery of alleged preferential transfers of approximately $216,000, together with other damages, from Carolina Starches. In March 2014, Carolina Starches entered into a settlement agreement with the Trustee which provides, among other things, for the full and final settlement of this matter in exchange for a payment by Carolina Starches to the Trustee of $10,000. | |
Management is unable to provide additional information regarding any possible loss in connection with the foregoing claims and proceedings because (i) the Company currently believes that the claims are not adequately supported, and (ii) there are significant factual and/or legal issues to be resolved. With regard to these matters, management does not believe, based on currently available information, that the eventual outcomes will have a material adverse effect on the Company’s financial condition, results of operations or liquidity, although the outcomes could be material to the Company’s operating results for any particular period, depending, in part, upon the operating results for such period. | |
Other Claims and Litigation | |
The Company is involved from time to time in various other claims and litigation arising in the normal course of business. In the judgment of management, which relies in part on information obtained from the Company’s outside legal counsel, the ultimate resolution of these other matters will not materially affect the consolidated financial position, results of operations or liquidity of the Company. |
Subsequent_Events
Subsequent Events | 6 Months Ended |
Feb. 28, 2014 | |
Subsequent Events [Abstract] | ' |
Subsequent Events | ' |
13—SUBSEQUENT EVENTS | |
Acquisition | |
On March 4, 2014, Penford Products Co. (“Purchaser”), a wholly-owned subsidiary of the Company, entered into an Asset Purchase Agreement with Gum Technology, an Arizona close corporation, (“Gum Technology” or “Seller”), and Allen J Freed and Sheryl I. Freed, the owners of Seller. On March 25, 2014, the Company acquired substantially all of the assets of Seller and assumed certain liabilities in exchange for $10.2 million in cash, subject to working capital and certain other adjustments. The funding of the purchase price was provided by borrowings under the Company’s credit facility. In connection with the acquisition, $750,000 of the purchase price (“Holdback”) has been retained by the Company as a fund to satisfy certain of the Seller’s post-closing obligations. The Holdback is payable to the Seller, net of amounts applied to satisfy the obligations of the Seller, within twelve months of the date of the acquisition. | |
The Company entered into compensatory stock option agreements outside of the Company’s 2006 Incentive Plan with three key former employees of the Seller. Pursuant to these agreements, the Company granted options to purchase an aggregate of 45,000 shares of the Company’s common stock at an exercise price equal to the closing price as of the close of business on March 25, 2014. These options have a term of seven years and vest ratably over a three-year period. | |
Gum Technology, based in Tucson, Arizona, distributes and blends gums and hydrocolloids, serving primarily the food and beverage industries in North America and Asia. Gum Technology specializes in developing and producing customized stabilizers to meet customers’ product formulation needs. This acquisition will broaden the Company’s food ingredients portfolio of functional and specialty ingredient systems within the Food Ingredients segment. | |
Credit Facility Amendment | |
On March 21, 2014, in connection with the acquisition discussed above, the Company amended its Fourth Amended and Restated Credit Agreement (the “2012 Agreement”) to adjust certain financial covenants. The Total Leverage Ratio, as defined in the 2012 Agreement, shall not exceed 4.25 on May 31, 2014: 3.50 on August 31, 2014 and 3.00 at the end of each quarter thereafter. In addition, the Company’s maximum annual capital expenditures were increased to $17.5 million from $15.0 million for fiscal 2014. |
Basis_of_Presentation_Policies
Basis of Presentation (Policies) | 6 Months Ended |
Feb. 28, 2014 | |
Accounting Policies [Abstract] | ' |
Consolidation | ' |
Consolidation | |
The accompanying condensed consolidated financial statements include the accounts of Penford and its wholly owned subsidiaries. All intercompany transactions and balances have been eliminated. The condensed consolidated balance sheet at February 28, 2014 and the condensed consolidated statements of operations, comprehensive income (loss) and cash flows for the interim periods ended February 28, 2014 and 2013 have been prepared by the Company without audit. In the opinion of management, all adjustments, consisting only of normal recurring adjustments, which are necessary to present fairly the financial information, have been made. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). The results of operations for interim periods are not necessarily indicative of the operating results of a full year or of future operations. Certain reclassifications have been made to prior year’s financial statements in order to conform to the current year presentation. The accompanying condensed consolidated financial statements should be read in conjunction with the consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended August 31, 2013. | |
Use of Estimates | ' |
Use of Estimates | |
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Estimates are used in accounting for, among other things, the allowance for doubtful accounts: accruals: legal contingencies: the determination of fair value of net assets acquired in a business combination: the determination of assumptions for pension and postretirement employee benefit costs, useful lives of property, plant and equipment: the assessment of a potential impairment of goodwill or long-lived assets and income taxes, including the determination of a need for a valuation allowance for deferred tax assets. Actual results may differ from previously estimated amounts. | |
Accounting Pronouncements Adopted | ' |
Accounting Pronouncements Adopted | |
In February 2013, the Financial Accounting Standards Board (“FASB”) issued guidance requiring entities to provide information about the amounts reclassified out of accumulated other comprehensive income by component. Entities are required to present, either on the face of the financial statements or in the notes, significant amounts reclassified out of accumulated other comprehensive income by the respective line items of net income. This guidance did not change the current requirements for reporting net income or other comprehensive income. The Company adopted this guidance effective September 1, 2013 and the required disclosure is presented in Note 6. | |
In December 2011, the FASB issued guidance creating new disclosure requirements about the nature of an entity’s rights of setoff and related arrangements associated with its financial instruments and derivative instruments. The Company adopted this guidance effective September 1, 2013 and the required disclosure is presented in Note 9. | |
In July 2013, the FASB issued guidance designed to reduce diversity in practice of financial statement presentation of an unrecognized tax benefit when a net operating loss carryforward, a similar tax loss or a tax credit carryforward exists. The Company adopted this accounting presentation effective September 1, 2013. The Company complied with the prescribed accounting presentation in prior periods; therefore, the adoption of this guidance had no impact on the presentation of the Company’s financial statements. |
Balance_Sheet_Details_Tables
Balance Sheet Details (Tables) | 6 Months Ended | ||||||||
Feb. 28, 2014 | |||||||||
Organization Consolidation And Presentation Of Financial Statements [Abstract] | ' | ||||||||
Components of Inventory | ' | ||||||||
The components of inventory were as follows: | |||||||||
February 28, | August 31, | ||||||||
2014 | 2013 | ||||||||
(In thousands) | |||||||||
Raw materials | $ | 10,324 | $ | 10,381 | |||||
Work in progress | 1,264 | 1,913 | |||||||
Finished goods | 24,224 | 21,698 | |||||||
Total inventories | $ | 35,812 | $ | 33,992 | |||||
Components of Property, Plant and Equipment | ' | ||||||||
The components of property, plant and equipment, net were as follows: | |||||||||
February 28, | August 31, | ||||||||
2014 | 2013 | ||||||||
(In thousands) | |||||||||
Land and land improvements | $ 12,131 | $ 11,881 | |||||||
Plant and equipment | 363,144 | 359,909 | |||||||
Construction in progress | 6,402 | 5,255 | |||||||
381,677 | 377,045 | ||||||||
Accumulated depreciation | (270,158) | (264,904) | |||||||
Net property, plant and equipment | $ 111,519 | $ 112,141 | |||||||
Components of Accrued Liabilities | ' | ||||||||
Components of accrued liabilities were as follows: | |||||||||
February 28, | August 31, | ||||||||
2014 | 2013 | ||||||||
(In thousands) | |||||||||
Employee-related costs | $ | 3,950 | $ | 3,931 | |||||
Other accrued liabilities | 4,031 | 4,276 | |||||||
Total accrued liabilities | $ | 7,981 | $ | 8,207 | |||||
Accumulated_Other_Comprehensiv1
Accumulated Other Comprehensive Income (Loss) ("AOCI") (Tables) | 6 Months Ended | ||||||||||||||
Feb. 28, 2014 | |||||||||||||||
Equity [Abstract] | ' | ||||||||||||||
Summary of Changes in Accumulated Other Comprehensive Income (Loss) | ' | ||||||||||||||
The following tables provide a summary of the changes in accumulated other comprehensive income (loss) for the six months ended February 28, 2014 and 2013: | |||||||||||||||
(In thousands) | Net Unrealized | Gains (Losses) | Accumulated | ||||||||||||
Gains (Losses) | on | Other | |||||||||||||
on Cash Flow | Postretirement | Comprehensive | |||||||||||||
Hedging | Obligations, | Loss | |||||||||||||
Instruments, | Net of Tax | ||||||||||||||
Net of Tax | |||||||||||||||
Balances at August 31, 2013 | $ | (856) | $ | (6,763) | $ | (7,619) | |||||||||
Other comprehensive income (loss) before reclassification adjustments, net of tax | (3,868) | - | (3,868) | ||||||||||||
Amounts reclassified from accumulated other comprehensive income (loss), net of tax | 3,390 | 187 | 3,577 | ||||||||||||
Balances at February 28, 2014 | $ | (1,334) | $ | (6,576) | $ | (7,910) | |||||||||
(In thousands) | Net Unrealized | Gains (Losses) | Accumulated | ||||||||||||
Gains (Losses) | on | Other | |||||||||||||
on Cash Flow | Postretirement | Comprehensive | |||||||||||||
Hedging | Obligations, | Loss | |||||||||||||
Instruments, | Net of Tax | ||||||||||||||
Net of Tax | |||||||||||||||
Balances at August 31, 2012 | $ | 1,638 | $ | (17,231) | $ | (15,593) | |||||||||
Other comprehensive income (loss) before reclassification adjustments, net of tax | 256 | - | 256 | ||||||||||||
Amounts reclassified from accumulated other comprehensive income (loss), net of tax | (2,341) | 710 | (1,631) | ||||||||||||
Balances at February 28, 2013 | $ | (447) | $ | (16,521) | $ | (16,968) | |||||||||
Amounts Reclassified from Accumulated Other Comprehensive Income (Loss) | ' | ||||||||||||||
Amounts reclassified from accumulated other comprehensive income (loss) were as follows: | |||||||||||||||
Three Months Ended February 28, 2014 | |||||||||||||||
(In thousands) | Location of Expense | Before Tax | Tax | Net of Tax | |||||||||||
(Income) Recognized in | Amount | Amount | |||||||||||||
Net Earnings | |||||||||||||||
Pension and other postretirement benefit plans: | |||||||||||||||
Amortization of actuarial loss (gain) | Cost of sales | $ | 89 | $ | (35) | $ | 54 | ||||||||
Amortization of actuarial loss (gain) | Operating/R&D expenses | 42 | (15) | 27 | |||||||||||
Amortization of prior service cost | Cost of sales | 2 | (1) | 1 | |||||||||||
Amortization of prior service cost | Operating/R&D expenses | 18 | (7) | 11 | |||||||||||
Total reclassification adjustments | 151 | (58) | 93 | ||||||||||||
Derivatives accounted for as hedges | Cost of sales | 3,489 | (1,326) | 2,163 | |||||||||||
Total reclassifications into income | $ | 3,640 | $ | (1,384) | $ | 2,256 | |||||||||
Six Months Ended February 28, 2014 | |||||||||||||||
(In thousands) | Location of Expense | Before Tax | Tax | Net of Tax | |||||||||||
(Income) Recognized in | Amount | Amount | |||||||||||||
Net Earnings | |||||||||||||||
Pension and other postretirement benefit plans: | |||||||||||||||
Amortization of actuarial loss (gain) | Cost of sales | $ | 178 | $ | (70) | $ | 108 | ||||||||
Amortization of actuarial loss (gain) | Operating/R&D | 84 | (30) | 54 | |||||||||||
expenses | |||||||||||||||
Amortization of prior service cost | Cost of sales | 4 | (2) | 2 | |||||||||||
Amortization of prior service cost | Operating/R&D expenses | 36 | (13) | 23 | |||||||||||
Total reclassification adjustments | 302 | (115) | 187 | ||||||||||||
Derivatives accounted for as hedges | Cost of sales | 5,468 | (2,078) | 3,390 | |||||||||||
Total reclassifications into income | $ | 5,770 | $ | (2,193) | $ | 3,577 | |||||||||
StockBased_Compensation_Tables
Stock-Based Compensation (Tables) | 6 Months Ended | ||||||||||||||||
Feb. 28, 2014 | |||||||||||||||||
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | ' | ||||||||||||||||
Schedule of Share Based Compensation Stock Options Activity | ' | ||||||||||||||||
A summary of the stock option activity for the six months ended February 28, 2014, was as follows: | |||||||||||||||||
Number of | Weighted- | Weighted- | Aggregate | ||||||||||||||
Average | Average | Intrinsic Value | |||||||||||||||
Shares | |||||||||||||||||
Exercise Price | Remaining | ||||||||||||||||
Term (in years) | |||||||||||||||||
Outstanding Balance, August 31, 2013 | 1,517,588 | $ 10.30 | |||||||||||||||
Granted | 18,000 | 11.67 | |||||||||||||||
Exercised | -52,500 | 12.85 | |||||||||||||||
Cancelled | -79,250 | 13.55 | |||||||||||||||
Outstanding balance, February 28, 2014 | 1,403,838 | 10.27 | 3.51 | $ 6,066,900 | |||||||||||||
Options exercisable at February 28, 2014 | 1,090,423 | $ 11.29 | 3.01 | $ 3,993,200 | |||||||||||||
Schedule of Share Based Payment Award Stock Options Valuation Assumptions | ' | ||||||||||||||||
The Company estimated the fair value of stock options granted during the first six months of fiscal 2014 using the following weighted-average assumptions and resulting in the following weighted-average grant-date fair values: | |||||||||||||||||
Expected volatility | 60 | % | |||||||||||||||
Expected life (years) | 4.8 | ||||||||||||||||
Interest rate | 1.1-1.8 | % | |||||||||||||||
Weighted-average fair values | $5.88 | ||||||||||||||||
Schedule of Share-Based Compensation, Restricted Stock Award Activity | ' | ||||||||||||||||
The following table summarizes the restricted stock award activity for the six months ended February 28, 2014 as follows: | |||||||||||||||||
Number of | Weighted- | ||||||||||||||||
Shares | Average | ||||||||||||||||
Grant Date | |||||||||||||||||
Fair Value | |||||||||||||||||
Nonvested at August 31, 2013 | 24,489 | $7.35 | |||||||||||||||
Granted | 15,560 | 12.85 | |||||||||||||||
Vested | (24,489) | 7.35 | |||||||||||||||
Cancelled | - | - | |||||||||||||||
Nonvested at February 28, 2014 | 15,560 | $12.85 | |||||||||||||||
Schedule of Employee Service Share-Based Compensation, Allocation of Recognized Period Costs | ' | ||||||||||||||||
The following table summarizes the total stock-based compensation cost and the effect on the Company’s Condensed Consolidated Statements of Operations (in thousands): | |||||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||||
February 28, | February 28, | ||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||
Cost of sales | $ | - | $ | - | $ | - | $ | - | |||||||||
Operating expenses | 266 | 395 | 515 | 812 | |||||||||||||
Research and development expenses | - | - | - | - | |||||||||||||
Total stock-based compensation expense | $ | 266 | $ | 395 | $ | 515 | $ | 812 | |||||||||
Income tax benefit | 101 | 150 | 196 | 309 | |||||||||||||
Total stock-based compensation expense, net of tax | $ | 165 | $ | 245 | $ | 319 | $ | 503 | |||||||||
Pension_and_PostRetirement_Ben1
Pension and Post-Retirement Benefit Plans (Tables) | 6 Months Ended | ||||||||||||||||
Feb. 28, 2014 | |||||||||||||||||
Compensation And Retirement Disclosure [Abstract] | ' | ||||||||||||||||
Components of Net Periodic Benefit Costs | ' | ||||||||||||||||
The components of the net periodic pension and post-retirement benefit costs were as follows: | |||||||||||||||||
Defined Benefit Pension Plans | Three Months Ended | Six Months Ended | |||||||||||||||
February 28, | February 28, | ||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||
(In thousands) | |||||||||||||||||
Service cost | $ | 438 | $ | 486 | $ | 876 | $ | 972 | |||||||||
Interest cost | 735 | 662 | 1,470 | 1,324 | |||||||||||||
Expected return on plan assets | (813) | (717) | (1,626) | (1,434) | |||||||||||||
Amortization of prior service cost | 58 | 60 | 116 | 120 | |||||||||||||
Amortization of actuarial losses | 131 | 483 | 262 | 966 | |||||||||||||
Net periodic benefit cost | $ | 549 | $ | 974 | $ | 1,098 | $ | 1,948 | |||||||||
Post-retirement Health Care Plans | Three Months Ended | Six Months Ended | |||||||||||||||
February 28, | February 28, | ||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||
(In thousands) | |||||||||||||||||
Service cost | $ | 28 | $ | 59 | $ | 56 | $ | 118 | |||||||||
Interest cost | 222 | 215 | 444 | 430 | |||||||||||||
Amortization of prior service cost | (38) | (38) | (76) | (76) | |||||||||||||
Amortization of actuarial losses | - | 67 | 134 | ||||||||||||||
Net periodic benefit cost | $ | 212 | $ | 303 | $ | 424 | $ | 606 | |||||||||
Fair_Value_Measurements_and_De1
Fair Value Measurements and Derivative Instruments (Tables) | 6 Months Ended | ||||||||||||||||||||||||
Feb. 28, 2014 | |||||||||||||||||||||||||
Derivative Instruments And Hedging Activities Disclosure [Abstract] | ' | ||||||||||||||||||||||||
Fair Values of Company's Derivative Instruments | ' | ||||||||||||||||||||||||
Presented below are the fair values of the Company’s derivatives as of February 28, 2014 and August 31, 2013: | |||||||||||||||||||||||||
As of February 28, 2014 | Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||||||
(in thousands) | |||||||||||||||||||||||||
Current assets (Other): | |||||||||||||||||||||||||
Commodity derivatives | $ | (2,517) | $ | - | $ | - | $ | (2,517) | |||||||||||||||||
As of August 31, 2013 | Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||||||
(in thousands) | |||||||||||||||||||||||||
Current assets (Other): | |||||||||||||||||||||||||
Commodity derivatives | $ | 512 | $ | - | $ | - | $ | 512 | |||||||||||||||||
Reconciliation of Gross Fair Value of Assets and Liabilities Subject to Offsetting Arrangements | ' | ||||||||||||||||||||||||
The following table reconciles the gross fair value of assets and liabilities subject to offsetting arrangements to the net amounts recorded in the Condensed Consolidated Balance Sheets as Other Current Assets. | |||||||||||||||||||||||||
In thousands | Gross Amounts | Gross | Net Amount of | Cash Collateral | Net Fair Value as | ||||||||||||||||||||
of Recognized | Liabilities | Assets | on Deposit with | Recorded in | |||||||||||||||||||||
Assets | Offset in the | (Liabilities) | Counterparty | Balance Sheets | |||||||||||||||||||||
Balance Sheets | |||||||||||||||||||||||||
As of February 28, 2014 | |||||||||||||||||||||||||
Commodity derivatives | $ | 987 | $ | -3,504 | $ | -2,517 | $ | 4,343 | $ | 1,826 | |||||||||||||||
As of August 31, 2013 | |||||||||||||||||||||||||
Commodity derivatives | $ | 997 | $ | -485 | $ | 512 | $ | 1,700 | $ | 2,212 | |||||||||||||||
Outstanding Futures Contracts | ' | ||||||||||||||||||||||||
As of February 28, 2014, the Company had the following outstanding futures contracts: | |||||||||||||||||||||||||
Corn futures | 7,245,000 Bushels | ||||||||||||||||||||||||
Ethanol futures | 11,508,000 Gallons | ||||||||||||||||||||||||
Natural gas futures | 300,000 mmbtu (millions of British thermal units) | ||||||||||||||||||||||||
Fair Values of Company's Derivatives by Contract Type | ' | ||||||||||||||||||||||||
The following tables provide information about the fair values of the Company’s derivatives, by contract type, as of February 28, 2014 and August 31, 2013: | |||||||||||||||||||||||||
Assets | Liabilities | ||||||||||||||||||||||||
In thousands | Fair Value | Fair Value | |||||||||||||||||||||||
Balance Sheet | Feb 28, | Aug 31, | Balance Sheet | Feb 28, | Aug 31, | ||||||||||||||||||||
Location | 2014 | 2013 | Location | 2014 | 2013 | ||||||||||||||||||||
Derivatives designated as hedging instruments: | |||||||||||||||||||||||||
Cash flow hedges: | |||||||||||||||||||||||||
Corn futures | Other current assets | $ | 753 | $ | - | Other current assets | $ | - | $ | 485 | |||||||||||||||
Ethanol futures | Other current assets | - | 997 | Other current assets | 3,494 | - | |||||||||||||||||||
Fair value hedges: | |||||||||||||||||||||||||
Corn futures | - | - | Other current assets | 10 | - | ||||||||||||||||||||
Derivatives not designated as hedging instruments: | |||||||||||||||||||||||||
Natural gas futures | Other current assets | 234 | - | Other current assets | - | - | |||||||||||||||||||
$ | 987 | $ | 997 | $ | 3,504 | $ | 485 | ||||||||||||||||||
Effect of Derivative Instruments on Company's Financial Performance | ' | ||||||||||||||||||||||||
The following tables provide information about the effect of derivative instruments on the financial performance of the Company for the three- and six-month periods ended February 28, 2014 and 2013: | |||||||||||||||||||||||||
In thousands | Amount of Gain (Loss) | Amount of Gain (Loss) | Amount of Gain (Loss) | ||||||||||||||||||||||
Recognized in OCI | Reclassified from | Recognized in Income | |||||||||||||||||||||||
AOCI into Income | |||||||||||||||||||||||||
3 Months Ended Feb 28, | 3 Months Ended Feb 28, | 3 Months Ended Feb 28, | |||||||||||||||||||||||
2014 | 2013 | 2014 | 2013 | 2014 | 2013 | ||||||||||||||||||||
Derivatives designated as hedging instruments: | |||||||||||||||||||||||||
Cash flow hedges: | |||||||||||||||||||||||||
Corn futures (1) | $ | 1,369 | $ | -318 | $ | -1,349 | $ | 59 | $ | -386 | $ | (312) | |||||||||||||
Ethanol futures (1) | -5,645 | 233 | -2,140 | 191 | 18 | - | |||||||||||||||||||
$ | -4,276 | $ | -85 | $ | -3,489 | $ | 250 | $ | -368 | $ | (312) | ||||||||||||||
Fair value hedges: | |||||||||||||||||||||||||
Corn futures (1) (2) | $ | 91 | $ | (31) | |||||||||||||||||||||
Derivatives not designated as hedging instruments: | |||||||||||||||||||||||||
Natural gas futures (1) | $ | 187 | $ | 89 | |||||||||||||||||||||
Soybean meal futures (1) | 6 | - | |||||||||||||||||||||||
Ethanol futures (1) | 44 | - | |||||||||||||||||||||||
$ | 237 | $ | 89 | ||||||||||||||||||||||
(1) | Gains and losses reported in cost of sales | ||||||||||||||||||||||||
(2) | Hedged items are firm commitments and inventory | ||||||||||||||||||||||||
In thousands | Amount of Gain (Loss) | Amount of Gain (Loss) | Amount of Gain (Loss) | ||||||||||||||||||||||
Recognized in OCI | Reclassified from | Recognized in Income | |||||||||||||||||||||||
AOCI into Income | |||||||||||||||||||||||||
6 Months Ended Feb 28, | 6 Months Ended Feb 28, | 6 Months Ended Feb 28, | |||||||||||||||||||||||
2014 | 2013 | 2014 | 2013 | 2014 | 2013 | ||||||||||||||||||||
Derivatives designated as hedging instruments: | |||||||||||||||||||||||||
Cash flow hedges: | |||||||||||||||||||||||||
Corn futures (1) | $ (679) | $ (573) | $ (3,860) | $ 3,491 | $ (1,397) | $ (115) | |||||||||||||||||||
Ethanol futures (1) | -5,560 | 986 | -1,608 | 284 | -1,566 | (11) | |||||||||||||||||||
$ (6,239) | $ 413 | $ (5,468) | $ 3,775 | $ (2,963) | $ (126) | ||||||||||||||||||||
Fair value hedges: | |||||||||||||||||||||||||
Corn futures (1) (2) | $ 96 | $ (16) | |||||||||||||||||||||||
Derivatives not designated as hedging instruments: | |||||||||||||||||||||||||
Natural gas futures (1) | $ 220 | $ (82) | |||||||||||||||||||||||
Soybean meal futures (1) | 6 | - | |||||||||||||||||||||||
Ethanol futures (1) | 64 | - | |||||||||||||||||||||||
$ 290 | $ (82) | ||||||||||||||||||||||||
(1) | Gains and losses reported in cost of sales | ||||||||||||||||||||||||
(2) | Hedged items are firm commitments and inventory |
Segment_Reporting_Tables
Segment Reporting (Tables) | 6 Months Ended | ||||||||||||||||
Feb. 28, 2014 | |||||||||||||||||
Segment Reporting [Abstract] | ' | ||||||||||||||||
Segment Wide Reporting Information | ' | ||||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||||
February 28, | February 28, | ||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||
(In thousands) | |||||||||||||||||
Sales: | |||||||||||||||||
Industrial Ingredients: | |||||||||||||||||
Industrial Starch | $ | 36,917 | $ | 44,237 | $ | 80,537 | $ | 88,039 | |||||||||
Ethanol | 22,994 | 18,196 | 45,014 | 41,599 | |||||||||||||
By-Products | 15,917 | 21,045 | 30,876 | 44,208 | |||||||||||||
75,828 | 83,478 | 156,427 | 173,846 | ||||||||||||||
Food Ingredients | 30,279 | 26,604 | 58,930 | 54,258 | |||||||||||||
$ | 106,107 | $ | 110,082 | $ | 215,357 | $ | 228,104 | ||||||||||
Income (loss) from operations: | |||||||||||||||||
Industrial Ingredients | $ | 14 | $ | (452) | $ | (2,029) | $ | 935 | |||||||||
Food Ingredients | 5,794 | 5,535 | 12,324 | 10,891 | |||||||||||||
Corporate and other | (2,897) | (2,553) | (5,743) | (5,276) | |||||||||||||
$ | 2,911 | $ | 2,530 | $ | 4,552 | $ | 6,550 | ||||||||||
February 28, | August 31, | ||||||||||||||||
2014 | 2013 | ||||||||||||||||
(In thousands) | |||||||||||||||||
Total assets: | |||||||||||||||||
Industrial Ingredients | $ 127,994 | $ 133,120 | |||||||||||||||
Food Ingredients | 72,699 | 68,550 | |||||||||||||||
Corporate and other | 21,740 | 22,948 | |||||||||||||||
$ 222,433 | $ 224,618 | ||||||||||||||||
Earnings_Per_Share_Tables
Earnings Per Share (Tables) | 6 Months Ended | ||||||||||||||||
Feb. 28, 2014 | |||||||||||||||||
Earnings Per Share [Abstract] | ' | ||||||||||||||||
Reconciliation of Income from Operations Applicable to Common Shares and Computation of Diluted Weighted Average Shares Outstanding | ' | ||||||||||||||||
The following table presents the reconciliation of income from operations to income from operations applicable to common shares and the computation of diluted weighted-average shares outstanding: | |||||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||||
February 28, | February 28, | ||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||
(In thousands) | (In thousands) | ||||||||||||||||
Numerator: | |||||||||||||||||
Net income | $ | 1,240 | $ | 1,191 | $ | 1,727 | $ | 2,897 | |||||||||
Less: Allocation to participating securities | (2) | (4) | (3) | (10) | |||||||||||||
Net income applicable to common shares | $ | 1,238 | $ | 1,187 | $ | 1,724 | $ | 2,887 | |||||||||
Denominator: | |||||||||||||||||
Weighted average common shares outstanding, basic | 12,501 | 12,343 | 12,487 | 12,325 | |||||||||||||
Dilutive stock options and awards | 334 | 160 | 344 | 114 | |||||||||||||
Weighted average common shares outstanding, diluted | 12,835 | 12,503 | 12,831 | 12,439 | |||||||||||||
Business_Additional_Informatio
Business - Additional Information (Detail) | 6 Months Ended |
Feb. 28, 2014 | |
Segment | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | ' |
Number of segments | 2 |
Balance_Sheet_Details_Componen
Balance Sheet Details - Components of Inventory (Detail) (USD $) | Feb. 28, 2014 | Aug. 31, 2013 |
In Thousands, unless otherwise specified | ||
Inventory Disclosure [Abstract] | ' | ' |
Raw materials | $10,324 | $10,381 |
Work in progress | 1,264 | 1,913 |
Finished goods | 24,224 | 21,698 |
Total inventories | $35,812 | $33,992 |
Balance_Sheet_Details_Componen1
Balance Sheet Details - Components of Property, Plant and Equipment (Detail) (USD $) | Feb. 28, 2014 | Aug. 31, 2013 |
In Thousands, unless otherwise specified | ||
Property, Plant and Equipment [Line Items] | ' | ' |
Property, plant and equipment, gross | $381,677 | $377,045 |
Accumulated depreciation | -270,158 | -264,904 |
Net property, plant and equipment | 111,519 | 112,141 |
Land and land improvements [Member] | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' |
Property, plant and equipment, gross | 12,131 | 11,881 |
Plant and equipment [Member] | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' |
Property, plant and equipment, gross | 363,144 | 359,909 |
Construction in progress [Member] | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' |
Property, plant and equipment, gross | $6,402 | $5,255 |
Balance_Sheet_Details_Addition
Balance Sheet Details - Additional Information (Detail) (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Feb. 28, 2014 | Aug. 31, 2013 |
Property Plant And Equipment [Abstract] | ' | ' |
Payables related to property, plant and equipment | $0.50 | $0.70 |
Balance_Sheet_Details_Componen2
Balance Sheet Details - Components of Accrued Liabilities (Detail) (USD $) | Feb. 28, 2014 | Aug. 31, 2013 |
In Thousands, unless otherwise specified | ||
Accrued Liabilities Current [Abstract] | ' | ' |
Employee-related costs | $3,950 | $3,931 |
Other accrued liabilities | 4,031 | 4,276 |
Total accrued liabilities | $7,981 | $8,207 |
Debt_Additional_Information_De
Debt - Additional Information (Detail) (2012 Agreement [Member], USD $) | 6 Months Ended |
Feb. 28, 2014 | |
Debt Instrument [Line Items] | ' |
Maximum borrowing amount under amended and restated credit agreement | $130,000,000 |
Line of credit, amount outstanding | 66,900,000 |
Debt instrument maturity date | 9-Jul-17 |
Two Consecutive Quarters [Member] | ' |
Debt Instrument [Line Items] | ' |
Covenant, total leverage ratio permitted | 2.5 |
Minimum [Member] | ' |
Debt Instrument [Line Items] | ' |
Debt instrument, variable interest rate percentage over LIBOR | 2.00% |
Covenant, fixed charge coverage ratio | 1.35 |
Maximum [Member] | ' |
Debt Instrument [Line Items] | ' |
Debt instrument, variable interest rate percentage over LIBOR | 4.00% |
Covenant, amount of annual capital expenditures permitted | 15,000,000 |
Covenant, dividend declaration permitted | $10,000,000 |
Dividend declared, percentage of cash flow | 50.00% |
Maximum [Member] | Scenario, Forecast [Member] | ' |
Debt Instrument [Line Items] | ' |
Covenant, total leverage ratio permitted | 3.25 |
Covenant, total leverage ratio permitted after May 31, 2014 | 3 |
Debt_Iowa_Department_of_Econom
Debt - Iowa Department of Economic Development - Additional Information (Detail) (Iowa Department of Economic Development Loans [Member], USD $) | 0 Months Ended | 6 Months Ended |
Dec. 01, 2009 | Feb. 28, 2014 | |
SecurityLoan | ||
Iowa Department of Economic Development Loans [Member] | ' | ' |
Debt Instrument [Line Items] | ' | ' |
Non interest bearing loans | $1,000,000 | ' |
Number of monthly payments | ' | '60 equal monthly payments |
Number of non interest bearing loans | ' | 2 |
Loan period (in years) | ' | '5 years |
Potentially forgivable loan amount | ' | 1,000,000 |
Periodic repayments of loan | 16,667 | ' |
Outstanding amount of IDED loans | ' | $1,100,000 |
Income_Taxes_Additional_Inform
Income Taxes - Additional Information (Detail) (USD $) | 3 Months Ended | 6 Months Ended | ||||
Feb. 28, 2014 | Feb. 28, 2013 | Feb. 28, 2014 | Feb. 28, 2013 | Aug. 31, 2013 | Feb. 28, 2014 | |
Australian Operations [Member] | Small Ethanol Producer [Member] | |||||
Tax Credit Carryforward [Line Items] | ' | ' | ' | ' | ' | ' |
Effective tax rate | 41.00% | 27.00% | 41.20% | 34.20% | ' | ' |
Tax benefit related to research and development activities | ' | $150,000 | ' | ' | ' | ' |
Impact on the effective tax rate related to tax credit for research and development | ' | 9.00% | ' | 3.00% | ' | ' |
Valuation allowance | ' | ' | ' | ' | 10,900,000 | 1,700,000 |
Net deferred tax assets | 5,600,000 | ' | 5,600,000 | ' | ' | ' |
Increase in unrecognized tax benefits | 42,000 | ' | 80,000 | ' | ' | ' |
Total amount of gross unrecognized tax benefits, if recognized that would impact effective tax rate | 800,000 | ' | 800,000 | ' | ' | ' |
Accrued interest and penalties included in long-term tax liability | $100,000 | ' | $100,000 | ' | ' | ' |
Open tax year | ' | ' | '2009 | ' | ' | ' |
Accumulated_Other_Comprehensiv2
Accumulated Other Comprehensive Income (Loss) ("AOCI") - Components of Accumulated Other Comprehensive Income (Loss) (Detail) (USD $) | 6 Months Ended | |
In Thousands, unless otherwise specified | Feb. 28, 2014 | Feb. 28, 2013 |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ' | ' |
Beginning Balances | ($7,619) | ($15,593) |
Other comprehensive income (loss) before reclassification adjustments, net of tax | -3,868 | 256 |
Amounts reclassified from accumulated other comprehensive income (loss), net of tax | 3,577 | -1,631 |
Ending Balances | -7,910 | -16,968 |
Cash Flow Hedging Instruments [Member] | ' | ' |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ' | ' |
Beginning Balances | -856 | 1,638 |
Other comprehensive income (loss) before reclassification adjustments, net of tax | -3,868 | 256 |
Amounts reclassified from accumulated other comprehensive income (loss), net of tax | 3,390 | -2,341 |
Ending Balances | -1,334 | -447 |
Postretirement Obligations [Member] | ' | ' |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ' | ' |
Beginning Balances | -6,763 | -17,231 |
Other comprehensive income (loss) before reclassification adjustments, net of tax | ' | ' |
Amounts reclassified from accumulated other comprehensive income (loss), net of tax | 187 | 710 |
Ending Balances | ($6,576) | ($16,521) |
Accumulated_Other_Comprehensiv3
Accumulated Other Comprehensive Income (Loss) ("AOCI") - Amounts Reclassified from Accumulated Other Comprehensive Income (Loss) (Detail) (USD $) | 3 Months Ended | 6 Months Ended | ||
In Thousands, unless otherwise specified | Feb. 28, 2014 | Feb. 28, 2013 | Feb. 28, 2014 | Feb. 28, 2013 |
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ' | ' | ' | ' |
Amortization of actuarial loss (gain), Tax | $50 | $209 | $100 | $418 |
Amortization of actuarial loss (gain), Net of Tax Amount | -81 | -341 | -162 | -682 |
Amortization of prior service cost, Tax | 8 | 8 | 15 | 17 |
Amortization of prior service cost, Net of Tax Amount | -12 | -14 | -25 | -28 |
Before Tax Amount | -2,101 | -1,631 | -2,936 | -4,407 |
Tax | 861 | 440 | 1,209 | 1,510 |
Net of Tax Amount | -1,240 | -1,191 | -1,727 | -2,897 |
Reclassification out of Accumulated Other Comprehensive Income [Member] | ' | ' | ' | ' |
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ' | ' | ' | ' |
Before Tax Amount | 3,640 | ' | 5,770 | ' |
Tax | -1,384 | ' | -2,193 | ' |
Net of Tax Amount | 2,256 | ' | 3,577 | ' |
Reclassification out of Accumulated Other Comprehensive Income [Member] | Cost of sales [Member] | ' | ' | ' | ' |
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ' | ' | ' | ' |
Amortization of actuarial loss (gain), Before Tax Amount | 89 | ' | 178 | ' |
Amortization of actuarial loss (gain), Tax | -35 | ' | -70 | ' |
Amortization of actuarial loss (gain), Net of Tax Amount | 54 | ' | 108 | ' |
Amortization of prior service cost, Before Tax Amount | 2 | ' | 4 | ' |
Amortization of prior service cost, Tax | -1 | ' | -2 | ' |
Amortization of prior service cost, Net of Tax Amount | 1 | ' | 2 | ' |
Reclassification out of Accumulated Other Comprehensive Income [Member] | Operating/R&D expenses[Member] | ' | ' | ' | ' |
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ' | ' | ' | ' |
Amortization of actuarial loss (gain), Before Tax Amount | 42 | ' | 84 | ' |
Amortization of actuarial loss (gain), Tax | -15 | ' | -30 | ' |
Amortization of actuarial loss (gain), Net of Tax Amount | 27 | ' | 54 | ' |
Amortization of prior service cost, Before Tax Amount | 18 | ' | 36 | ' |
Amortization of prior service cost, Tax | -7 | ' | -13 | ' |
Amortization of prior service cost, Net of Tax Amount | 11 | ' | 23 | ' |
Postretirement Obligations [Member] | Reclassification out of Accumulated Other Comprehensive Income [Member] | ' | ' | ' | ' |
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ' | ' | ' | ' |
Before Tax Amount | 151 | ' | 302 | ' |
Tax | -58 | ' | -115 | ' |
Net of Tax Amount | 93 | ' | 187 | ' |
Cash Flow Hedging Instruments [Member] | Reclassification out of Accumulated Other Comprehensive Income [Member] | ' | ' | ' | ' |
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ' | ' | ' | ' |
Before Tax Amount | 3,489 | ' | 5,468 | ' |
Tax | -1,326 | ' | -2,078 | ' |
Net of Tax Amount | $2,163 | ' | $3,390 | ' |
StockBased_Compensation_Additi
Stock-Based Compensation - Additional Information (Detail) (USD $) | 0 Months Ended | 6 Months Ended |
Jan. 01, 2014 | Feb. 28, 2014 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' |
Share price of Company's stock | ' | 13.35 |
Intrinsic value of options exercised | ' | 327,200 |
Stock options granted, shares | ' | 18,000 |
2006 Incentive Plan [Member] | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' |
Number of common shares available for issuance under the plan | ' | 426,792 |
Non Qualified Stock Options And Restricted Stock [Member] | 2006 Incentive Plan [Member] | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' |
Expiration period (in years) | ' | '7 years |
Non Qualified Stock Options And Restricted Stock [Member] | 2006 Incentive Plan [Member] | Minimum [Member] | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' |
Vesting period (in years) | ' | '1 year |
Non Qualified Stock Options And Restricted Stock [Member] | 2006 Incentive Plan [Member] | Maximum [Member] | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' |
Vesting period (in years) | ' | '4 years |
Stock Options [Member] | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' |
Compensation expense related to non-vested awards not yet recognized | ' | 500,000 |
Weighted-average period over which unrecognized compensation cost will be recognized (in years) | ' | '1 year 2 months 12 days |
Stock Options [Member] | 2006 Incentive Plan [Member] | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' |
Stock options granted, shares | ' | 18,000 |
Restricted Stock [Member] | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' |
Weighted-average period over which unrecognized compensation cost will be recognized (in years) | ' | '9 months 18 days |
Compensation expense related to unvested awards not yet recognized | ' | 200,000 |
Restricted Stock [Member] | 2006 Incentive Plan [Member] | Non Employee Directors [Member] | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' |
Vesting period (in years) | ' | '1 year |
Number of shares issued for non-employee director, shares | 1,556 | ' |
StockBased_Compensation_Schedu
Stock-Based Compensation - Schedule of Share Based Compensation Stock Options Activity (Detail) (USD $) | 6 Months Ended |
Feb. 28, 2014 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | ' |
Options outstanding, beginning of period, Shares | 1,517,588 |
Shares, Granted | 18,000 |
Shares, Exercised | -52,500 |
Shares, Cancelled | -79,250 |
Options outstanding, end of period, Shares | 1,403,838 |
Options exercisable, end of period, Shares | 1,090,423 |
Weighted-Average Exercise Price, Options Outstanding beginning of period, Per Share | $10.30 |
Weighted-Average Exercise Price, Granted, Per Share | $11.67 |
Weighted-Average Exercise Price, Exercised, Per Share | $12.85 |
Weighted-Average Exercise Price, Cancelled, Per Share | $13.55 |
Weighted-Average Exercise Price, Options Outstanding end of period, Per Share | $10.27 |
Weighted-Average Exercise Price, Options exercisable, end of period, Per Share | $11.29 |
Weighted Average Remaining Term, Outstanding, Ending balance (in years) | '3 years 6 months 4 days |
Weighted Average Remaining Term, Options exercisable (in years) | '3 years 4 days |
Aggregate Intrinsic value, Outstanding, Ending balance | $6,066,900 |
Aggregate Intrinsic value, Options exercisable | $3,993,200 |
StockBased_Compensation_Schedu1
Stock-Based Compensation - Schedule of Share Based Payment Award Stock Options Valuation Assumptions (Detail) (Stock Options [Member], USD $) | 6 Months Ended |
Feb. 28, 2014 | |
Stock Options [Member] | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' |
Expected volatility | 60.00% |
Expected life (years) | '4 years 9 months 18 days |
Interest rate, minimum | 1.10% |
Interest rate, maximum | 1.80% |
Weighted-average fair values | $5.88 |
StockBased_Compensation_Schedu2
Stock-Based Compensation - Schedule of Share-Based Compensation, Restricted Stock Award Activity (Detail) (Restricted Stock [Member], USD $) | 6 Months Ended |
Feb. 28, 2014 | |
Restricted Stock [Member] | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' |
Shares, Nonvested at August 31, 2012 | 24,489 |
Shares, Granted | 15,560 |
Shares, Vested | -24,489 |
Shares, Cancelled | ' |
Shares, Nonvested at February 28, 2014 | 15,560 |
Weighted-Average Grant-Date Fair Value, Beginning balance (in USD per share) | $7.35 |
Weighted-Average Grant-Date Fair Value, Granted (in USD per share) | $12.85 |
Weighted-Average Grant-Date Fair Value, Vested (in USD per share) | $7.35 |
Weighted-Average Grant-Date Fair Value, Cancelled (in USD per share) | ' |
Weighted-Average Grant-Date Fair Value, Ending balance (in USD per share) | $12.85 |
StockBased_Compensation_Schedu3
Stock-Based Compensation - Schedule of Employee Service Share-Based Compensation, Allocation of Recognized Period Costs (Detail) (USD $) | 3 Months Ended | 6 Months Ended | ||
In Thousands, unless otherwise specified | Feb. 28, 2014 | Feb. 28, 2013 | Feb. 28, 2014 | Feb. 28, 2013 |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ' | ' | ' | ' |
Total stock-based compensation expense | $266 | $395 | $515 | $812 |
Income tax benefit | 101 | 150 | 196 | 309 |
Total stock-based compensation expense, net of tax | 165 | 245 | 319 | 503 |
Cost of sales [Member] | ' | ' | ' | ' |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ' | ' | ' | ' |
Total stock-based compensation expense | ' | ' | ' | ' |
Operating expenses [Member] | ' | ' | ' | ' |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ' | ' | ' | ' |
Total stock-based compensation expense | 266 | 395 | 515 | 812 |
Research and development expenses [Member] | ' | ' | ' | ' |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ' | ' | ' | ' |
Total stock-based compensation expense | ' | ' | ' | ' |
Pension_and_PostRetirement_Ben2
Pension and Post-Retirement Benefit Plans - Components of Net Periodic Benefit Costs (Detail) (USD $) | 3 Months Ended | 6 Months Ended | ||
In Thousands, unless otherwise specified | Feb. 28, 2014 | Feb. 28, 2013 | Feb. 28, 2014 | Feb. 28, 2013 |
Defined Benefit Pension Plans [Member] | ' | ' | ' | ' |
Defined Benefit Plan Disclosure [Line Items] | ' | ' | ' | ' |
Service cost | $438 | $486 | $876 | $972 |
Interest cost | 735 | 662 | 1,470 | 1,324 |
Expected return on plan assets | -813 | -717 | -1,626 | -1,434 |
Amortization of prior service cost | 58 | 60 | 116 | 120 |
Amortization of actuarial losses | 131 | 483 | 262 | 966 |
Net periodic benefit cost | 549 | 974 | 1,098 | 1,948 |
Post-retirement Health Care Plans [Member] | ' | ' | ' | ' |
Defined Benefit Plan Disclosure [Line Items] | ' | ' | ' | ' |
Service cost | 28 | 59 | 56 | 118 |
Interest cost | 222 | 215 | 444 | 430 |
Amortization of prior service cost | -38 | -38 | -76 | -76 |
Amortization of actuarial losses | ' | 67 | ' | 134 |
Net periodic benefit cost | $212 | $303 | $424 | $606 |
Fair_Value_Measurements_and_De2
Fair Value Measurements and Derivative Instruments - Fair Values of Company's Derivative Instruments (Detail) (Commodity Contract [Member], USD $) | Feb. 28, 2014 | Aug. 31, 2013 |
In Thousands, unless otherwise specified | ||
Derivative [Line Items] | ' | ' |
Commodity derivatives | ($2,517) | $512 |
Other current assets [Member] | ' | ' |
Derivative [Line Items] | ' | ' |
Commodity derivatives | -2,517 | 512 |
Level 1 [Member] | Other current assets [Member] | ' | ' |
Derivative [Line Items] | ' | ' |
Commodity derivatives | -2,517 | 512 |
Level 2 [Member] | Other current assets [Member] | ' | ' |
Derivative [Line Items] | ' | ' |
Commodity derivatives | ' | ' |
Level 3 [Member] | Other current assets [Member] | ' | ' |
Derivative [Line Items] | ' | ' |
Commodity derivatives | ' | ' |
Fair_Value_Measurements_and_De3
Fair Value Measurements and Derivative Instruments - Reconciliation of Gross Fair Value of Assets and Liabilities Subject to Offsetting Arrangements (Detail) (USD $) | Feb. 28, 2014 | Aug. 31, 2013 |
In Thousands, unless otherwise specified | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ' | ' |
Gross Amounts of Recognized Assets | $987 | $997 |
Commodity Contract [Member] | ' | ' |
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ' | ' |
Gross Amounts of Recognized Assets | 987 | 997 |
Gross Liabilities Offset in the Balance Sheets | -3,504 | -485 |
Net Amount of Assets (Liabilities) | -2,517 | 512 |
Cash Collateral on Deposit with Counterparty | 4,343 | 1,700 |
Net Fair Value as Recorded in Balance Sheets | $1,826 | $2,212 |
Fair_Value_Measurements_and_De4
Fair Value Measurements and Derivative Instruments - Additional Information (Detail) (USD $) | 6 Months Ended |
In Millions, unless otherwise specified | Feb. 28, 2014 |
SecurityLoan | |
Commodity Contract [Member] | ' |
Fair Value, Option, Quantitative Disclosures [Line Items] | ' |
Deferred loss, net of tax, recorded in accumulated other comprehensive income | $1.30 |
Iowa Department of Economic Development Loans [Member] | ' |
Fair Value, Option, Quantitative Disclosures [Line Items] | ' |
Number of non-interest bearing loans | 2 |
Carrying value of debt | 1.1 |
Fair value of debt | $1.10 |
Fair_Value_Measurements_and_De5
Fair Value Measurements and Derivative Instruments - Outstanding Futures Contracts (Detail) (Designated as Hedging Instrument [Member], Commodity Contract [Member]) | Feb. 28, 2014 |
bu | |
Corn futures [Member] | ' |
Derivative [Line Items] | ' |
Outstanding futures contracts | 7,245,000 |
Ethanol futures [Member] | ' |
Derivative [Line Items] | ' |
Outstanding futures contracts | 11,508,000 |
Natural gas futures [Member] | ' |
Derivative [Line Items] | ' |
Outstanding futures contracts | 300,000 |
Fair_Value_Measurements_and_De6
Fair Value Measurements and Derivative Instruments - Fair Value of Company's Derivatives by Contract Type (Detail) (USD $) | Feb. 28, 2014 | Aug. 31, 2013 |
In Thousands, unless otherwise specified | ||
Derivatives, Fair Value [Line Items] | ' | ' |
Assets Fair Value | $987 | $997 |
Liabilities Fair Value | 3,504 | 485 |
Commodity Contract [Member] | ' | ' |
Derivatives, Fair Value [Line Items] | ' | ' |
Assets Fair Value | 987 | 997 |
Corn futures [Member] | Cash flow hedges [Member] | Designated as Hedging Instrument [Member] | Other current assets [Member] | Commodity Contract [Member] | ' | ' |
Derivatives, Fair Value [Line Items] | ' | ' |
Assets Fair Value | 753 | ' |
Liabilities Fair Value | ' | 485 |
Corn futures [Member] | Fair value hedges [Member] | Designated as Hedging Instrument [Member] | Other current assets [Member] | Commodity Contract [Member] | ' | ' |
Derivatives, Fair Value [Line Items] | ' | ' |
Liabilities Fair Value | 10 | ' |
Ethanol futures [Member] | Cash flow hedges [Member] | Designated as Hedging Instrument [Member] | Other current assets [Member] | Commodity Contract [Member] | ' | ' |
Derivatives, Fair Value [Line Items] | ' | ' |
Assets Fair Value | ' | 997 |
Liabilities Fair Value | 3,494 | ' |
Natural gas futures [Member] | Derivative Not Designated as Hedging Instruments [Member] | Other current assets [Member] | Commodity Contract [Member] | ' | ' |
Derivatives, Fair Value [Line Items] | ' | ' |
Assets Fair Value | $234 | ' |
Fair_Value_Measurements_and_De7
Fair Value Measurements and Derivative Instruments - Effect of Derivative Instruments on Company's Financial Performance (Detail) (USD $) | 3 Months Ended | 6 Months Ended | ||
In Thousands, unless otherwise specified | Feb. 28, 2014 | Feb. 28, 2013 | Feb. 28, 2014 | Feb. 28, 2013 |
Designated as Hedging Instrument [Member] | Cash flow hedges [Member] | ' | ' | ' | ' |
Derivative Instruments, Gain (Loss) [Line Items] | ' | ' | ' | ' |
Amount of Gain (Loss) Recognized in OCI | ($4,276) | ($85) | ($6,239) | $413 |
Amount of Gain (Loss) Reclassified from AOCI into Income | -3,489 | 250 | -5,468 | 3,775 |
Amount of Gain (Loss) Recognized in Income | -368 | -312 | -2,963 | -126 |
Designated as Hedging Instrument [Member] | Cash flow hedges [Member] | Corn futures [Member] | ' | ' | ' | ' |
Derivative Instruments, Gain (Loss) [Line Items] | ' | ' | ' | ' |
Amount of Gain (Loss) Recognized in OCI | 1,369 | -318 | -679 | -573 |
Amount of Gain (Loss) Reclassified from AOCI into Income | -1,349 | 59 | -3,860 | 3,491 |
Amount of Gain (Loss) Recognized in Income | -386 | -312 | -1,397 | -115 |
Designated as Hedging Instrument [Member] | Cash flow hedges [Member] | Ethanol futures [Member] | ' | ' | ' | ' |
Derivative Instruments, Gain (Loss) [Line Items] | ' | ' | ' | ' |
Amount of Gain (Loss) Recognized in OCI | -5,645 | 233 | -5,560 | 986 |
Amount of Gain (Loss) Reclassified from AOCI into Income | -2,140 | 191 | -1,608 | 284 |
Amount of Gain (Loss) Recognized in Income | 18 | ' | -1,566 | -11 |
Designated as Hedging Instrument [Member] | Fair value hedges [Member] | Corn futures [Member] | ' | ' | ' | ' |
Derivative Instruments, Gain (Loss) [Line Items] | ' | ' | ' | ' |
Amount of Gain (Loss) Recognized in Income | 91 | -31 | 96 | -16 |
Derivative Not Designated as Hedging Instruments [Member] | ' | ' | ' | ' |
Derivative Instruments, Gain (Loss) [Line Items] | ' | ' | ' | ' |
Amount of Gain (Loss) Recognized in Income | 237 | 89 | 290 | -82 |
Derivative Not Designated as Hedging Instruments [Member] | Ethanol futures [Member] | ' | ' | ' | ' |
Derivative Instruments, Gain (Loss) [Line Items] | ' | ' | ' | ' |
Amount of Gain (Loss) Recognized in Income | 44 | ' | 64 | ' |
Derivative Not Designated as Hedging Instruments [Member] | Natural gas futures [Member] | ' | ' | ' | ' |
Derivative Instruments, Gain (Loss) [Line Items] | ' | ' | ' | ' |
Amount of Gain (Loss) Recognized in Income | 187 | 89 | 220 | -82 |
Derivative Not Designated as Hedging Instruments [Member] | Soybean meal futures [Member] | ' | ' | ' | ' |
Derivative Instruments, Gain (Loss) [Line Items] | ' | ' | ' | ' |
Amount of Gain (Loss) Recognized in Income | $6 | ' | $6 | ' |
Segment_Reporting_Additional_I
Segment Reporting - Additional Information (Detail) | 6 Months Ended |
Feb. 28, 2014 | |
Segment | |
Segment Reporting [Abstract] | ' |
Number of segments | 2 |
Segment_Reporting_Segment_Wide
Segment Reporting - Segment Wide Reporting Information (Detail) (USD $) | 3 Months Ended | 6 Months Ended | |||
In Thousands, unless otherwise specified | Feb. 28, 2014 | Feb. 28, 2013 | Feb. 28, 2014 | Feb. 28, 2013 | Aug. 31, 2013 |
Segment Reporting Information [Line Items] | ' | ' | ' | ' | ' |
Sales | $106,107 | $110,082 | $215,357 | $228,104 | ' |
Income (loss) from operations | 2,911 | 2,530 | 4,552 | 6,550 | ' |
Total assets | 222,433 | ' | 222,433 | ' | 224,618 |
Industrial Ingredients [Member] | ' | ' | ' | ' | ' |
Segment Reporting Information [Line Items] | ' | ' | ' | ' | ' |
Sales | 75,828 | 83,478 | 156,427 | 173,846 | ' |
Food Ingredients [Member] | ' | ' | ' | ' | ' |
Segment Reporting Information [Line Items] | ' | ' | ' | ' | ' |
Sales | 30,279 | 26,604 | 58,930 | 54,258 | ' |
Industrial Starch [Member] | Industrial Ingredients [Member] | ' | ' | ' | ' | ' |
Segment Reporting Information [Line Items] | ' | ' | ' | ' | ' |
Sales | 36,917 | 44,237 | 80,537 | 88,039 | ' |
Ethanol [Member] | Industrial Ingredients [Member] | ' | ' | ' | ' | ' |
Segment Reporting Information [Line Items] | ' | ' | ' | ' | ' |
Sales | 22,994 | 18,196 | 45,014 | 41,599 | ' |
By-Products [Member] | Industrial Ingredients [Member] | ' | ' | ' | ' | ' |
Segment Reporting Information [Line Items] | ' | ' | ' | ' | ' |
Sales | 15,917 | 21,045 | 30,876 | 44,208 | ' |
Operating Segments [Member] | Industrial Ingredients [Member] | ' | ' | ' | ' | ' |
Segment Reporting Information [Line Items] | ' | ' | ' | ' | ' |
Income (loss) from operations | 14 | -452 | -2,029 | 935 | ' |
Total assets | 127,994 | ' | 127,994 | ' | 133,120 |
Operating Segments [Member] | Food Ingredients [Member] | ' | ' | ' | ' | ' |
Segment Reporting Information [Line Items] | ' | ' | ' | ' | ' |
Income (loss) from operations | 5,794 | 5,535 | 12,324 | 10,891 | ' |
Total assets | 72,699 | ' | 72,699 | ' | 68,550 |
Corporate, Non-Segment [Member] | ' | ' | ' | ' | ' |
Segment Reporting Information [Line Items] | ' | ' | ' | ' | ' |
Income (loss) from operations | -2,897 | -2,553 | -5,743 | -5,276 | ' |
Total assets | $21,740 | ' | $21,740 | ' | $22,948 |
Earnings_Per_Share_Reconciliat
Earnings Per Share - Reconciliation of Income from Operations Applicable to Common Shares and Computation of Diluted Weighted Average Shares Outstanding (Detail) (USD $) | 3 Months Ended | 6 Months Ended | ||
In Thousands, unless otherwise specified | Feb. 28, 2014 | Feb. 28, 2013 | Feb. 28, 2014 | Feb. 28, 2013 |
Numerator: | ' | ' | ' | ' |
Net income | $1,240 | $1,191 | $1,727 | $2,897 |
Less: Allocation to participating securities | -2 | -4 | -3 | -10 |
Net income applicable to common shares | $1,238 | $1,187 | $1,724 | $2,887 |
Denominator: | ' | ' | ' | ' |
Weighted average common shares outstanding, basic | 12,501 | 12,343 | 12,487 | 12,325 |
Dilutive stock options and awards | 334 | 160 | 344 | 114 |
Weighted average common shares outstanding, diluted | 12,835 | 12,503 | 12,831 | 12,439 |
Earnings_Per_Share_Additional_
Earnings Per Share - Additional Information (Detail) (Stock Options [Member]) | 3 Months Ended | 6 Months Ended | ||
Feb. 28, 2014 | Feb. 28, 2013 | Feb. 28, 2014 | Feb. 28, 2013 | |
Stock Options [Member] | ' | ' | ' | ' |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ' | ' | ' | ' |
Antidilutive weighted average stock options excluded from the calculation of diluted earnings per share | 589,340 | 987,885 | 604,296 | 972,581 |
Legal_Proceedings_and_Continge1
Legal Proceedings and Contingencies - Additional Information (Detail) (USD $) | 1 Months Ended | 6 Months Ended | 1 Months Ended | ||
In Thousands, unless otherwise specified | Apr. 30, 2012 | Feb. 28, 2014 | Feb. 28, 2014 | Feb. 28, 2014 | Mar. 31, 2014 |
Patents | Defendants | Penford Products [Member] | Carolina Starches, LLC [Member] | Carolina Starches, LLC [Member] | |
Subsequent Event [Member] | |||||
Loss Contingencies [Line Items] | ' | ' | ' | ' | ' |
Number of patents under allegation of patent infringement | 2 | ' | ' | ' | ' |
Number of defendants | ' | 2 | ' | ' | ' |
Name of defendants | ' | 'Penford Products and Carolina Starches, LLC | ' | ' | ' |
Name of plaintiff | ' | 'Pirinate Consulting Group, LLC | ' | ' | ' |
Amount of recovery sought in complaint | ' | ' | $778 | $216 | ' |
Payment for full and final settlement of litigation | ' | ' | ' | ' | $10 |
Subsequent_Events_Additional_I
Subsequent Events - Additional Information (Detail) (USD $) | 6 Months Ended | 0 Months Ended | ||||||
Feb. 28, 2014 | Feb. 28, 2014 | Mar. 21, 2014 | Mar. 21, 2014 | Mar. 21, 2014 | Mar. 25, 2014 | Mar. 25, 2014 | Mar. 25, 2014 | |
Maximum [Member] | Subsequent Event [Member] | Subsequent Event [Member] | Subsequent Event [Member] | Subsequent Event [Member] | Subsequent Event [Member] | Subsequent Event [Member] | ||
2012 Agreement [Member] | Maximum [Member] | Measurement Date May 31, 2014 [Member] | Measurement Date August 31, 2014 [Member] | Gum Technology [Member] | Gum Technology [Member] | Gum Technology [Member] | ||
2012 Agreement [Member] | Maximum [Member] | Maximum [Member] | Maximum [Member] | 2006 Incentive Plan [Member] | ||||
2012 Agreement [Member] | 2012 Agreement [Member] | Employees | ||||||
Subsequent Event [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' |
Acquisition of net assets | ' | ' | ' | ' | ' | $10,200,000 | ' | ' |
Purchase price held for post-closing obligations | ' | ' | ' | ' | ' | 750,000 | ' | ' |
Holdback repayable period | ' | ' | ' | ' | ' | ' | '12 months | ' |
Number of key former employees | ' | ' | ' | ' | ' | ' | ' | 3 |
Stock options granted, shares | 18,000 | ' | ' | ' | ' | ' | ' | 45,000 |
Contractual term of options | ' | ' | ' | ' | ' | ' | ' | '7 years |
Options vesting period | ' | ' | ' | ' | ' | ' | ' | '3 years |
Covenant, total leverage ratio permitted | ' | ' | ' | 4.25 | 3.5 | ' | ' | ' |
Covenant, total leverage ratio permitted at the end of each quarter thereafter | ' | ' | 3 | ' | ' | ' | ' | ' |
Covenant, amount of annual capital expenditures permitted | ' | $15,000,000 | $17,500,000 | ' | ' | ' | ' | ' |