Document_and_Entity_Informatio
Document and Entity Information | 3 Months Ended | |
Nov. 30, 2014 | Jan. 05, 2015 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | FALSE | |
Document Period End Date | 30-Nov-14 | |
Document Fiscal Year Focus | 2015 | |
Document Fiscal Period Focus | Q1 | |
Trading Symbol | PENX | |
Entity Registrant Name | PENFORD CORP | |
Entity Central Index Key | 739608 | |
Current Fiscal Year End Date | -23 | |
Entity Filer Category | Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 12,788,527 |
Condensed_Consolidated_Balance
Condensed Consolidated Balance Sheets (Unaudited) (USD $) | Nov. 30, 2014 | Aug. 31, 2014 |
In Thousands, unless otherwise specified | ||
Current assets: | ||
Cash and cash equivalents | $310 | $189 |
Trade accounts receivable, net | 43,520 | 42,035 |
Inventories | 42,079 | 41,751 |
Prepaid expenses | 2,972 | 3,857 |
Material and supplies | 5,772 | 5,541 |
Other current assets | 4,128 | 5,071 |
Total current assets | 98,781 | 98,444 |
Property, plant and equipment, net | 115,984 | 114,804 |
Restricted cash value of life insurance | 7,796 | 7,803 |
Other assets | 2,744 | 1,991 |
Other intangible assets, net | 6,005 | 6,019 |
Goodwill, net | 10,129 | 10,129 |
Total assets | 241,439 | 239,190 |
Current liabilities: | ||
Cash overdraft, net | 3,318 | 6,146 |
Current portion of long-term debt and capital lease obligations | 192 | 184 |
Accounts payable | 23,421 | 21,452 |
Short-term financing arrangements | 912 | 1,454 |
Accrued liabilities | 8,910 | 9,779 |
Total current liabilities | 36,753 | 39,015 |
Long-term debt and capital lease obligations | 74,623 | 76,665 |
Other postretirement benefits | 18,689 | 18,726 |
Pension benefit liability | 5,712 | 5,752 |
Other liabilities | 8,456 | 6,899 |
Total liabilities | 144,233 | 147,057 |
Commitments and contingencies (Note 12) | ||
Shareholders' equity: | ||
Common stock, par value $1.00 per share, authorized 29,000 shares, issued 14,770 and 14,717 shares, respectively, including treasury shares | 14,597 | 14,544 |
Preferred stock, par value $1.00 per share, authorized 1,000 shares, none issued | ||
Additional paid-in capital | 107,829 | 106,696 |
Retained earnings | 13,536 | 11,402 |
Treasury stock, at cost, 1,981 shares | -32,757 | -32,757 |
Accumulated other comprehensive loss | -5,999 | -7,752 |
Total shareholders' equity | 97,206 | 92,133 |
Total liabilities and shareholders' equity | $241,439 | $239,190 |
Condensed_Consolidated_Balance1
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) (USD $) | Nov. 30, 2014 | Aug. 31, 2014 |
Statement of Financial Position [Abstract] | ||
Common stock, par value | $1 | $1 |
Common stock, shares authorized | 29,000,000 | 29,000,000 |
Common stock, shares issued | 14,770,000 | 14,717,000 |
Preferred stock, par value | $1 | $1 |
Preferred stock, share authorized | 1,000,000 | 1,000,000 |
Preferred stock, share issued | 0 | 0 |
Treasury stock, shares | 1,981,000 | 1,981,000 |
Condensed_Consolidated_Stateme
Condensed Consolidated Statements of Income (Loss) (Unaudited) (USD $) | 3 Months Ended | |
In Thousands, except Per Share data, unless otherwise specified | Nov. 30, 2014 | Nov. 30, 2013 |
Income Statement [Abstract] | ||
Sales | $103,636 | $109,251 |
Cost of sales | 85,490 | 98,542 |
Gross margin | 18,146 | 10,709 |
Operating expenses | 12,108 | 7,801 |
Research and development expenses | 1,628 | 1,267 |
Income from operations | 4,410 | 1,641 |
Interest expense | -904 | -813 |
Other non-operating (expense) income, net | -72 | 8 |
Income before income taxes | 3,434 | 836 |
Income tax expense | 1,300 | 348 |
Net income (loss) | $2,134 | $488 |
Weighted-average common shares and equivalents outstanding: | ||
Basic | 12,583 | 12,473 |
Diluted | 13,040 | 12,841 |
Earnings per common share: | ||
Basic earnings per share | $0.17 | $0.04 |
Diluted earnings per share | $0.16 | $0.04 |
Dividends declared per common share | $0 | $0 |
Condensed_Consolidated_Stateme1
Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Nov. 30, 2014 | Nov. 30, 2013 |
Statement of Comprehensive Income [Abstract] | ||
Net income (loss) | $2,134 | $488 |
Other comprehensive income (loss), net of tax: | ||
Change in fair value of derivatives, net of tax benefit (expense) of $(99) and $746, respectively | 158 | -1,217 |
(Gain) loss from derivative transactions reclassified into earnings, net of tax (expense) benefit of $964 and $753, respectively | 1,545 | 1,227 |
Amortization of prior service cost, net of tax benefit of $22 and $7, respectively | 36 | 13 |
Amortization of actuarial loss, net of tax benefit of $9 and $51, respectively | 14 | 80 |
Other comprehensive income (loss) | 1,753 | 103 |
Total comprehensive income (loss) | $3,887 | $591 |
Condensed_Consolidated_Stateme2
Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited) (Parenthetical) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Nov. 30, 2014 | Nov. 30, 2013 |
Statement of Comprehensive Income [Abstract] | ||
Change in fair value of derivatives, tax benefit (expense) | ($99) | $746 |
(Gain) loss from derivative transactions reclassified into earnings, tax (expense) benefit | 964 | 753 |
Amortization of prior service cost, tax benefit | 22 | 7 |
Amortization of actuarial loss, tax benefit | $9 | $51 |
Condensed_Consolidated_Stateme3
Condensed Consolidated Statements of Cash Flows (Unaudited) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Nov. 30, 2014 | Nov. 30, 2013 |
Cash flows from operating activities: | ||
Net income (loss) | $2,134 | $488 |
Adjustments to reconcile net income to net cash provided by operations: | ||
Depreciation and amortization | 2,184 | 3,291 |
Stock-based compensation | 504 | 249 |
Deferred income tax expense | 645 | 209 |
Non-cash (gain) loss on hedging transactions | -543 | 122 |
Excess tax benefit from stock-based compensation | -143 | -152 |
Non-cash change in asset retirement obligations | -131 | |
Loss on operating leases | 111 | |
Gain on sale of fixed assets | -1 | |
Change in assets and liabilities: | ||
Trade accounts receivable, net | -1,485 | 2,349 |
Other receivables | -325 | -976 |
Inventories | 215 | 1,150 |
Prepaid expenses | 885 | 335 |
Tenant allowance reimbursement | 182 | |
(Increase) decrease in margin accounts | 2,950 | 846 |
Accounts payable and accrued liabilities | 813 | 855 |
Taxes payable | 550 | 100 |
Pension and other postretirement benefit contributions | -267 | -724 |
Pension and other postretirement benefit costs | 272 | 761 |
Other | -462 | -229 |
Net cash flow provided by operating activities | 8,088 | 8,674 |
Cash flows from investing activities: | ||
Acquisitions of property, plant and equipment, net | -2,849 | -2,047 |
Acquisition of Gum Technology, net | -375 | |
Other | 8 | -272 |
Net cash used in investing activities | -3,216 | -2,319 |
Cash flows from financing activities: | ||
Proceeds from revolving line of credit | 6,100 | |
Payments on revolving line of credit | -8,100 | -3,500 |
Payments of long-term debt | -50 | |
Payment of loan fees | -147 | |
Payments under capital lease obligations | -45 | -39 |
Payments on financing arrangements | -551 | -549 |
Excess tax benefit from stock-based compensation | 143 | 152 |
Exercise of stock options | 677 | |
Increase (decrease) in cash overdraft | -2,828 | -2,393 |
Net cash provided by (used in) financing activities | -4,751 | -6,379 |
Increase (decrease) in cash and cash equivalents | 121 | -24 |
Cash and cash equivalents, beginning of period | 189 | 221 |
Cash and cash equivalents, end of period | $310 | $197 |
Business
Business | 3 Months Ended |
Nov. 30, 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 gums for the food manufacturing and food service industries. See Note 11 for financial information regarding the Company’s business segments. | |
In March 2014, the Company completed the acquisition of Gum Technology, an Arizona close corporation (“Gum Technology”), for a purchase price of $9.9 million, subject to certain adjustments. Gum Technology blends and distributes gums and hydrocolloids and customizes stabilizers to meet customers’ product formulation needs. The acquisition of this business has broadened the Company’s Food Ingredients portfolio of functional and specialty ingredient systems within its Food Ingredients segment. | |
On October 14, 2014, the Company and Ingredion Incorporated (“Ingredion”) entered into an Agreement and Plan of Merger (the “Merger Agreement”) pursuant to which Ingredion will acquire the Company in an all-cash transaction valued at approximately $340.0 million. Upon closing of the merger, each outstanding share of the Company’s common stock will be converted into the right to receive $19.00 in cash. The merger is subject to certain closing conditions and covenants and provides certain termination rights for the parties to the Merger Agreement. See Note 13. |
Basis_of_Presentation
Basis of Presentation | 3 Months Ended |
Nov. 30, 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 material intercompany transactions and balances have been eliminated. Transactions between segments are at cost plus a return on assets. The condensed consolidated balance sheet at November 30, 2014 and the condensed consolidated statements of income (loss), comprehensive income (loss) and cash flows for the interim periods ended November 30, 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, 2014, as amended. | |
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; the determination of potential write downs for lower-of-cost-or-market inventory evaluations; the reserve for obsolete inventory; 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, indefinite-lived intangible assets 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. | |
Change in Estimate | |
During the third quarter of fiscal year 2014, the Company changed its estimates of useful lives of certain machinery and equipment used by the Industrial Ingredients segment to better match depreciation expense of these assets with the periods in which these assets are expected to generate revenue. The new estimated useful lives were established based on manufacturing engineering data and external benchmark data and were generally increased as compared to the previous estimates. The Company accounted for this as a prospective change in accounting estimate as of May 1, 2014, thereby impacting the quarter in which the change occurred and future periods. The change in the estimate lowered depreciation expense as compared to the amount that would have been recorded using the historical estimated useful lives. The effect of this change on net income and diluted earnings per share for the quarter ended November 30, 2014 was $758,000 and $0.06 per share, respectively. | |
Recent Accounting Pronouncements | |
On May 28, 2014, the Financial Accounting Standards Board (“FASB”) issued guidance that requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. The guidance will replace most existing revenue recognition guidance when it becomes effective. The new standard is effective for the Company on September 1, 2017, and early application is not permitted. The standard permits the use of either the retrospective or cumulative effect transition method. The Company is evaluating the effect that this new guidance will have on its consolidated financial statements and related disclosures. The Company has not selected a transition method nor has it determined the effect of the standard on its ongoing financial reporting. |
Balance_Sheet_Details
Balance Sheet Details | 3 Months Ended | ||||||||||||||||
Nov. 30, 2014 | |||||||||||||||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||
Balance Sheet Details | 3—BALANCE SHEET DETAILS | ||||||||||||||||
The components of inventory were as follows: | |||||||||||||||||
(In thousands) | November 30, | August 31, | |||||||||||||||
2014 | 2014 | ||||||||||||||||
Raw materials | $ | 11,202 | $ | 10,069 | |||||||||||||
Work in progress | 958 | 1,322 | |||||||||||||||
Finished goods | 29,919 | 30,360 | |||||||||||||||
Total inventories | $ | 42,079 | $ | 41,751 | |||||||||||||
The components of property, plant and equipment, net were as follows: | |||||||||||||||||
(In thousands) | November 30, | August 31, | |||||||||||||||
2014 | 2014 | ||||||||||||||||
Land and land improvements | $ | 12,512 | $ | 12,512 | |||||||||||||
Plant and equipment | 370,606 | 369,224 | |||||||||||||||
Construction in progress | 9,419 | 7,603 | |||||||||||||||
392,537 | 389,339 | ||||||||||||||||
Accumulated depreciation | (276,553 | ) | (274,535 | ) | |||||||||||||
Net property, plant and equipment | $ | 115,984 | $ | 114,804 | |||||||||||||
At November 30, 2014 and August 31, 2014, the Company had approximately $0.9 million and $0.5 million, respectively, of payables related to property, plant and equipment that have been excluded from acquisitions of property, plant and equipment in the condensed consolidated statements of cash flows. | |||||||||||||||||
Penford’s intangible assets consist of patents, customer lists and relationships, trade names and brand portfolio and non-compete agreements. Patents are being amortized over the weighted-average remaining amortization period of five years as of November 30, 2014. The fair value of customer relationships and non-compete agreements from the acquisition of Gum Technology are being amortized over their estimated useful lives of 13 years and five years, respectively. The trade names/brand portfolio of $2.7 million from the acquisition of Gum Technology has an indefinite life and is not subject to amortization. The carrying amount and accumulated amortization of intangible assets were as follows (dollars in thousands): | |||||||||||||||||
November 30, 2014 | August 31, 2014 | ||||||||||||||||
Carrying | Accumulated | Carrying | Accumulated | ||||||||||||||
Amount | Amortization | Amount | Amortization | ||||||||||||||
Intangible assets: | |||||||||||||||||
Patents and other | $ | 1,895 | $ | 1,581 | $ | 1,870 | $ | 1,572 | |||||||||
Customer lists and relationships | 3,060 | 353 | 3,060 | 296 | |||||||||||||
Trade names/brand portfolio | 2,910 | 45 | 2,910 | 35 | |||||||||||||
Non-compete agreements | 190 | 71 | 190 | 108 | |||||||||||||
Other intangible assets | $ | 8,055 | $ | 2,050 | $ | 8,030 | $ | 2,011 | |||||||||
Amortization expense related to intangible assets was $39,000 and $42,000 for the three months ended November 30, 2014 and 2013, respectively. | |||||||||||||||||
Components of accrued liabilities were as follows: | |||||||||||||||||
(In thousands) | November 30, | August 31, | |||||||||||||||
2014 | 2014 | ||||||||||||||||
Employee-related costs | $ | 4,442 | $ | 5,271 | |||||||||||||
Other accrued liabilities | 4,468 | 4,508 | |||||||||||||||
Total accrued liabilities | $ | 8,910 | $ | 9,779 | |||||||||||||
Employee-related costs included accrued payroll, compensated absences, payroll taxes, benefits and incentives. |
Debt
Debt | 3 Months Ended |
Nov. 30, 2014 | |
Debt Disclosure [Abstract] | |
Debt | 4—DEBT |
On August 1, 2014, the Company refinanced its obligations then outstanding under the $130 million 2012 Fourth Amended and Restated Credit Agreement and entered into a $145 million Credit Agreement (the “2014 Agreement”) with a syndicate of lenders. | |
Under the 2014 Agreement, the Company may borrow $145 million in revolving lines of credit. The lenders’ revolving credit loan commitment may be increased under certain conditions. Under the 2014 Agreement, there are no scheduled principal payments prior to maturity on August 1, 2019. | |
At November 30, 2014, the Company had $74.0 million outstanding under the 2014 Agreement. Interest rates under the 2014 Agreement are variable and are based on either a base rate or a eurodollar rate, depending on the Company’s selection of available borrowing options, plus the applicable margin. The applicable margin varies from 1.0% to 2.5% for base rate loans and from 2.0% to 3.5% for eurodollar loans, depending on the Company’s Total Leverage Ratio (as defined in the 2014 Agreement). | |
The 2014 Agreement provides that the Total Leverage Ratio, which is generally computed as funded debt divided by earnings before interest, taxes, depreciation and amortization, shall not exceed 5.00 through August 31, 2015; 4.50 from November 30, 2015 through August 31, 2016; 4.25 from November 30, 2016 through August 31, 2017; and 3.75 thereafter. In addition, the Company must maintain a Fixed Charge Coverage Ratio (as defined in the 2014 Agreement) of not less than 1.25. Beginning in fiscal year 2015, annual capital expenditures are restricted to $25 million. Maximum annual capital expenditures may be increased to $35 million if the Total Leverage Ratio is less than 2.00 for the last two fiscal quarters of the preceding year. To the extent that annual capital expenditures are less than the maximum, the difference between the actual and maximum capital expenditures will be added to the capital expenditures permitted in the immediately succeeding fiscal year. The Company’s obligations under the 2014 Agreement are secured by substantially all of the Company’s assets. The Company was in compliance with the covenants in the 2014 Agreement as of November 30, 2014. | |
Pursuant to the 2014 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 2014 Agreement). As of November 30, 2014, the Company was not permitted to pay dividends. | |
Also on August 1, 2014, the Company entered into a $25 million Delayed Draw Term Loan Credit Agreement (the “Term Loan Agreement”) with Cooperatieve Centrale Raiffeisen–Boerenleenbank B.A., “Rabobank Nederland” New York Branch (“Rabobank”). The Term Loan Agreement provides the Company with a term loan facility in an aggregate principal amount up to $25 million. The term loan facility may be utilized in a series of up to six drawings until the 18-month anniversary of the date of the Term Loan Agreement. Any unused portion of the lender’s commitment to make term loans under this facility will expire on the 18-month anniversary of the closing date. The maturity date for loans under the Term Loan Agreement is July 31, 2020, and there are no scheduled principal payments due prior to maturity. The Company’s obligations under the Term Loan Agreement are secured on a second-priority basis by substantially all of the Company’s assets. There were no borrowings outstanding under the Term Loan Agreement as of November 30, 2014. | |
The Term Loan Agreement provides that the Total Leverage Ratio, which is computed as funded debt divided by earnings before interest, taxes, depreciation and amortization (as defined in the Term Loan Agreement) shall not exceed 5.50 through August 31, 2015; 5.00 from November 30, 2015 through August 31, 2016; 4.75 from November 30, 2016 through August 31, 2017; and 4.25 thereafter. In addition, the Company must maintain a Fixed Charge Coverage Ratio (as defined in the Term Loan Agreement) of not less than 1.10. | |
The foregoing summaries of the 2014 Credit Agreement and the Term Loan Agreement are qualified in their entirety by reference to such agreements, which are attached as Exhibits 10.1 and 10.2, respectively, to the Company’s Form 8-K filed on August 4, 2014. |
Accumulated_Other_Comprehensiv
Accumulated Other Comprehensive Income (Loss) ("AOCI") | 3 Months Ended | ||||||||||||||
Nov. 30, 2014 | |||||||||||||||
Equity [Abstract] | |||||||||||||||
Accumulated Other Comprehensive Income (Loss) ("AOCI") | 5—ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (“AOCI”) | ||||||||||||||
The following tables provide a summary of the changes in Accumulated other comprehensive income (loss) for the three months ended November 30, 2014 and 2013: | |||||||||||||||
(In thousands) | Net Unrealized | Gains | Total | ||||||||||||
Gains (Losses) | (Losses) | Accumulated | |||||||||||||
on Cash Flow | on | Other | |||||||||||||
Hedging | Postretirement | Comprehensive | |||||||||||||
Instruments, | Obligations, | Loss | |||||||||||||
Net of Tax | Net of Tax | ||||||||||||||
Balances at August 31, 2014 | $ | (2,022 | ) | $ | (5,730 | ) | $ | (7,752 | ) | ||||||
Other comprehensive income, net of tax | 1,703 | 50 | 1,753 | ||||||||||||
Balances at November 30, 2014 | $ | (319 | ) | $ | (5,680 | ) | $ | (5,999 | ) | ||||||
(In thousands) | Net Unrealized | Gains | Total | ||||||||||||
Gains (Losses) | (Losses) | Accumulated | |||||||||||||
on Cash Flow | on | Other | |||||||||||||
Hedging | Postretirement | Comprehensive | |||||||||||||
Instruments, | Obligations, | Loss | |||||||||||||
Net of Tax | Net of Tax | ||||||||||||||
Balances at August 31, 2013 | $ | (856 | ) | $ | (6,763 | ) | $ | (7,619 | ) | ||||||
Other comprehensive income, net of tax | 10 | 93 | 103 | ||||||||||||
Balances at November 30, 2013 | $ | (846 | ) | $ | (6,670 | ) | $ | (7,516 | ) | ||||||
Amounts reclassified from accumulated other comprehensive income (loss) were as follows: | |||||||||||||||
Three Months Ended November 30, 2014 | |||||||||||||||
(In thousands) | Location of Expense | Before Tax | Tax | Net of Tax | |||||||||||
(Income) Recognized | Amount | Amount | |||||||||||||
in Net Earnings | |||||||||||||||
Pension and other postretirement benefit plans: | |||||||||||||||
Amortization of actuarial loss (gain) | Cost of sales | $ | 58 | $ | (22 | ) | $ | 36 | |||||||
Amortization of prior service cost | Cost of sales | 23 | (9 | ) | 14 | ||||||||||
Total reclassification adjustments | 81 | (31 | ) | 50 | |||||||||||
Derivatives accounted for as hedges | Cost of sales | 2,509 | (964 | ) | 1,545 | ||||||||||
Total reclassifications into income | $ | 2,590 | $ | (995 | ) | $ | 1,595 | ||||||||
Three Months Ended November 30, 2013 | |||||||||||||||
(In thousands) | Location of Expense | Before Tax | Tax | Net of Tax | |||||||||||
(Income) Recognized | Amount | Amount | |||||||||||||
in 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 | 42 | (16 | ) | 26 | ||||||||||
expenses | |||||||||||||||
Amortization of prior service cost | Cost of sales | 2 | (1 | ) | 1 | ||||||||||
Amortization of prior service cost | Operating/R&D | 18 | (6 | ) | 12 | ||||||||||
expenses | |||||||||||||||
Total reclassification adjustments | 151 | (58 | ) | 93 | |||||||||||
Derivatives accounted for as hedges | Cost of sales | 1,980 | (753 | ) | 1,227 | ||||||||||
Total reclassifications into income | $ | 2,131 | $ | (811 | ) | $ | 1,320 | ||||||||
StockBased_Compensation
Stock-Based Compensation | 3 Months Ended | ||||||||||||||||
Nov. 30, 2014 | |||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||
Stock-Based Compensation | 6—STOCK-BASED COMPENSATION | ||||||||||||||||
Stock Compensation Plans | |||||||||||||||||
Penford maintains a long-term incentive plan known as the 2006 Long-Term Incentive Plan (which, as amended, is referred to herein as the “2006 Incentive Plan”) pursuant to which various stock-based awards may be granted to employees, directors and consultants. As of November 30, 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 177,292. 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. In addition, the Company may from time to time award compensatory stock-based awards outside of the 2006 Incentive Plan to newly hired employees. | |||||||||||||||||
General Option Information | |||||||||||||||||
A summary of the stock option activity for the three months ended November 30, 2014 was as follows: | |||||||||||||||||
Number of | Weighted- | Weighted- | Aggregate | ||||||||||||||
Shares | Average | Average | Intrinsic Value | ||||||||||||||
Exercise Price | Remaining | ||||||||||||||||
Term (in years) | |||||||||||||||||
Outstanding balance, August 31, 2014 | 1,429,000 | $ | 10.42 | ||||||||||||||
Granted | — | — | |||||||||||||||
Exercised | (136,875 | ) | 16.4 | ||||||||||||||
Cancelled | — | — | |||||||||||||||
Outstanding balance, November 30, 2014 | 1,292,125 | $ | 9.78 | 3.22 | $ | 11,860,900 | |||||||||||
Options exercisable at November 30, 2014 | 946,460 | $ | 10.46 | 2.64 | $ | 8,052,000 | |||||||||||
The aggregate intrinsic value disclosed in the table above represents the total pre-tax intrinsic value, based on the Company’s closing stock price of $18.94 as of November 30, 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 three months of fiscal 2015 was $323,300. | |||||||||||||||||
There were no stock options granted under the 2006 Incentive Plan during the first three months of fiscal 2015. As of November 30, 2014, the Company had $0.4 million of unrecognized compensation cost related to non-vested stock option awards that is expected to be recognized over a weighted-average period of 0.8 years. | |||||||||||||||||
Restricted Stock Awards | |||||||||||||||||
The following table summarizes the restricted stock award activity for the three months ended November 30, 2014 as follows: | |||||||||||||||||
Number of | Weighted- | ||||||||||||||||
Shares | Average | ||||||||||||||||
Grant-Date | |||||||||||||||||
Fair Value | |||||||||||||||||
Non-vested at August 31, 2014 | 173,060 | $ | 12.64 | ||||||||||||||
Granted | — | — | |||||||||||||||
Vested | — | — | |||||||||||||||
Cancelled | (500 | ) | 12.68 | ||||||||||||||
Non-vested at November 30, 2014 | 172,560 | $ | 12.64 | ||||||||||||||
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 Company recognizes compensation cost for restricted stock ratably over the vesting period. As of November 30, 2014, the Company had $1.2 million of unrecognized compensation cost related to non-vested restricted stock awards that is expected to be recognized over a weighted-average period of 0.9 years. | |||||||||||||||||
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, totaling 15,560, vest one year from the grant date of the award. | |||||||||||||||||
In the third quarter of fiscal 2014, certain key employees of the Company received awards of restricted stock aggregating 157,500 shares under the 2006 Incentive Plan at the closing stock price on the date of the grant. These shares vest ratably over three 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 Income (Loss): | |||||||||||||||||
Three Months Ended | |||||||||||||||||
November 30, | |||||||||||||||||
(In thousands) | 2014 | 2013 | |||||||||||||||
Cost of sales | $ | 17 | $ | — | |||||||||||||
Operating expenses | 477 | 249 | |||||||||||||||
Research and development expenses | 10 | — | |||||||||||||||
Total stock-based compensation expense | $ | 504 | $ | 249 | |||||||||||||
Income tax benefit | (194 | ) | (95 | ) | |||||||||||||
Total stock-based compensation expense, net of tax | $ | 310 | $ | 154 | |||||||||||||
Pension_and_PostRetirement_Ben
Pension and Post-Retirement Benefit Plans | 3 Months Ended | ||||||||
Nov. 30, 2014 | |||||||||
Compensation and Retirement Disclosure [Abstract] | |||||||||
Pension and Post-Retirement Benefit Plans | 7—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 | ||||||||
November 30, | |||||||||
(In thousands) | 2014 | 2013 | |||||||
Service cost | $ | 255 | $ | 438 | |||||
Interest cost | 672 | 735 | |||||||
Expected return on plan assets | (966 | ) | (813 | ) | |||||
Amortization of prior service cost | 58 | 58 | |||||||
Amortization of actuarial losses | 23 | 131 | |||||||
Net periodic benefit cost | $ | 42 | $ | 549 | |||||
Post-retirement Health Care Plans | Three Months Ended | ||||||||
November 30, | |||||||||
(In thousands) | 2014 | 2013 | |||||||
Service cost | $ | 21 | $ | 28 | |||||
Interest cost | 210 | 222 | |||||||
Amortization of prior service cost | (1 | ) | (38 | ) | |||||
Amortization of actuarial losses | — | — | |||||||
Net periodic benefit cost | $ | 230 | $ | 212 | |||||
The Penford Corporation Retirement Plan, which is a defined benefit pension plan for certain salaried and other employees (the “Retirement Plan”), was closed to new entrants as of January 1, 2005 and was amended to cease the further accrual of participant benefits after February 28, 2014. |
Fair_Value_Measurements_and_De
Fair Value Measurements and Derivative Instruments | 3 Months Ended | ||||||||||||||||||||||||
Nov. 30, 2014 | |||||||||||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||
Fair Value Measurements and Derivative Instruments | 8—FAIR VALUE MEASUREMENTS AND DERIVATIVE INSTRUMENTS | ||||||||||||||||||||||||
Fair Value Measurements | |||||||||||||||||||||||||
Presented below are the fair values of the Company’s derivatives as of November 30, 2014 and August 31, 2014: | |||||||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||||
As of November 30, 2014 | Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||||||
Current assets (Other current assets): | |||||||||||||||||||||||||
Commodity derivatives | $ | (1,678 | ) | $ | — | $ | — | $ | (1,678 | ) | |||||||||||||||
(In thousands) | |||||||||||||||||||||||||
As of August 31, 2014 | Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||||||
Current assets (Other current assets): | |||||||||||||||||||||||||
Commodity derivatives | $ | (1,787 | ) | $ | — | $ | — | $ | (1,787 | ) | |||||||||||||||
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 | Recorded in | |||||||||||||||||||||
Assets | Offset in the | (Liabilities) | with | Balance Sheets | |||||||||||||||||||||
Balance Sheets | Counterparty | ||||||||||||||||||||||||
As of November 30, 2014 | |||||||||||||||||||||||||
Commodity derivatives | $ | 48 | $ | (1,726 | ) | $ | (1,678 | ) | $ | 3,192 | $ | 1,514 | |||||||||||||
As of August 31, 2014 | |||||||||||||||||||||||||
Commodity derivatives | $ | 413 | $ | (2,200 | ) | $ | (1,787 | ) | $ | 3,490 | $ | 1,703 | |||||||||||||
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, capital leases, short-term financing arrangements 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. | |||||||||||||||||||||||||
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 were historically designated as hedges. Effective August 1, 2014, the Company discontinued hedge accounting treatment for corn futures contracts as the hedging relationship no longer met the requirements for hedge accounting. The effect of the loss of hedge accounting on the Condensed Consolidated Financial Statements was not material in fiscal year 2014. Through July 31, 2014, the gains and losses on corn futures contracts designated as cash flow hedges were deferred in Accumulated other comprehensive income (loss). At November 30, 2014 and August 31, 2014, $0.1 million and $2.1 million of pre-tax losses continued to be deferred in Accumulated other comprehensive income (loss) for these corn futures contracts, respectively. These losses will be reclassified to Cost of sales during fiscal years 2015 and 2016 as the originally forecasted cash flows occur. | |||||||||||||||||||||||||
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. 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. These futures contracts have been designated as hedges. | |||||||||||||||||||||||||
Prices for natural gas fluctuate due to anticipated changes in supply and demand and movement of prices of related or alternative fuels. To reduce the price risk caused by market fluctuations, Penford may use exchange-traded futures contracts to hedge exposure to natural gas price fluctuations. These futures contracts do not qualify for hedge accounting, and the changes in fair value were recognized in current earnings as a component of Cost of sales. | |||||||||||||||||||||||||
Hedged transactions are generally expected to occur within 12 months of the time the hedge is established. The deferred gain (loss), net of tax, recorded in Accumulated other comprehensive income (loss) at November 30, 2014 that is expected to be reclassified into income within 12 months is $0.3 million. | |||||||||||||||||||||||||
As of November 30, 2014, the Company had the following outstanding futures contracts: | |||||||||||||||||||||||||
Corn futures | 4,060,000 | Bushels | |||||||||||||||||||||||
Ethanol futures | 13,650,000 | Gallons | |||||||||||||||||||||||
The following tables provide information about the fair values of the Company’s derivatives, by contract type, as of November 30, 2014 and August 31, 2014: | |||||||||||||||||||||||||
Assets | Liabilities | ||||||||||||||||||||||||
(In thousands) | Fair Value | Fair Value | |||||||||||||||||||||||
Balance Sheet | Nov 30, | Aug 31, | Balance Sheet | Nov 30, | Aug 31, | ||||||||||||||||||||
Location | 2014 | 2014 | Location | 2014 | 2014 | ||||||||||||||||||||
Derivatives designated as hedging instruments: | |||||||||||||||||||||||||
Cash flow hedges: | |||||||||||||||||||||||||
Corn futures | Other current assets | $ | 48 | $ | — | Other current assets | $ | 84 | $ | 320 | |||||||||||||||
Ethanol futures | Other current assets | — | — | Other current assets | 1,637 | 1,880 | |||||||||||||||||||
Fair value hedges: | |||||||||||||||||||||||||
Corn futures | Other current assets | — | 413 | Other current assets | 5 | — | |||||||||||||||||||
$ | 48 | $ | 413 | $ | 1,726 | $ | 2,200 | ||||||||||||||||||
The following tables provide information about the effect of derivative instruments on the financial performance of the Company for the three-month periods ended November 30, 2014 and 2013: | |||||||||||||||||||||||||
(In thousands) | Amount of Gain | Amount of Gain (Loss) | Amount of Gain | ||||||||||||||||||||||
(Loss) Recognized in | Reclassified from | (Loss) Recognized in | |||||||||||||||||||||||
OCI | AOCI into Income | Income | |||||||||||||||||||||||
3 Months Ended Nov 30, | 3 Months Ended Nov 30, | 3 Months Ended Nov 30, | |||||||||||||||||||||||
2014 | 2013 | 2014 | 2013 | 2014 | 2013 | ||||||||||||||||||||
Derivatives designated as hedging instruments: | |||||||||||||||||||||||||
Cash flow hedges: | |||||||||||||||||||||||||
Corn futures (1) | $ | — | $ | (2,048 | ) | $ | (2,030 | ) | $ | (2,512 | ) | $ | 815 | $ | (1,011 | ) | |||||||||
Ethanol futures (1) | 257 | 85 | (479 | ) | 532 | (357 | ) | (1,584 | ) | ||||||||||||||||
$ | 257 | $ | (1,963 | ) | $ | (2,509 | ) | $ | (1,980 | ) | $ | 458 | $ | (2,595 | ) | ||||||||||
Fair value hedges: | |||||||||||||||||||||||||
Corn futures (1) (2) | $ | — | $ | 5 | |||||||||||||||||||||
Derivatives not designated as hedging instruments: | |||||||||||||||||||||||||
Natural gas futures (1) | $ | — | $ | 33 | |||||||||||||||||||||
Natural gas options (1) | — | 20 | |||||||||||||||||||||||
Soybean meal futures (1) | — | — | |||||||||||||||||||||||
$ | — | $ | 53 | ||||||||||||||||||||||
-1 | Gains and losses reported in Cost of sales | ||||||||||||||||||||||||
-2 | Hedged items are firm commitments and inventory |
Income_Taxes
Income Taxes | 3 Months Ended |
Nov. 30, 2014 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 9—INCOME TAXES |
Effective Tax Rates | |
The Company’s effective tax rate for the three-month period ended November 30, 2014 was 37.9%. The difference between the effective tax rate and the U.S. federal statutory rate was primarily due to state income taxes, as well as the domestic production activity deduction. | |
The Company’s effective tax rate for the three-month period ended November 30, 2013 was 41.6%. The difference between the effective tax rate 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. | |
Valuation Allowance | |
At November 30, 2014, the Company had $0.3 million of net U. S. deferred tax assets. Other than a $99,000 valuation allowance related to two state tax credit carryforwards, a valuation allowance has not been provided on the net U.S. deferred tax assets as of November 30, 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. | |
Uncertain Tax Positions | |
In the three-month period ended November 30, 2014, the amount of unrecognized tax benefits increased by approximately $35,000 due to unrecognized tax benefits plus imputed interest and penalties. The total amount of unrecognized tax benefits at November 30, 2014 was $0.5 million, all of which, if recognized, would favorably impact the effective tax rate. At November 30, 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 2010. |
Earnings_Per_Share
Earnings Per Share | 3 Months Ended | ||||||||
Nov. 30, 2014 | |||||||||
Earnings Per Share [Abstract] | |||||||||
Earnings Per Share | 10—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 | |||||||||
November 30, | |||||||||
(In thousands) | 2014 | 2013 | |||||||
Numerator: | |||||||||
Net income | $ | 2,134 | $ | 488 | |||||
Less: Allocation to participating securities | (29 | ) | (1 | ) | |||||
Net income applicable to common shares | $ | 2,105 | $ | 487 | |||||
Denominator: | |||||||||
Weighted average common shares outstanding, basic | 12,583 | 12,473 | |||||||
Dilutive stock options and awards | 457 | 368 | |||||||
Weighted average common shares outstanding, diluted | 13,040 | 12,841 | |||||||
Weighted-average stock options to purchase 455,581 and 551,584 shares of common stock for the three months ended November 30, 2014 and 2013, respectively, were excluded from the calculation of diluted earnings per share because they were antidilutive. |
Segment_Reporting
Segment Reporting | 3 Months Ended | ||||||||
Nov. 30, 2014 | |||||||||
Segment Reporting [Abstract] | |||||||||
Segment Reporting | 11—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 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 produces specialty starches and gums 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 | |||||||||
November 30, | |||||||||
(In thousands) | 2014 | 2013 | |||||||
Sales: | |||||||||
Industrial Ingredients: | |||||||||
Industrial starch | $ | 35,109 | $ | 43,620 | |||||
Ethanol | 22,046 | 22,021 | |||||||
By-products | 12,319 | 14,959 | |||||||
69,474 | 80,600 | ||||||||
Food Ingredients | 34,162 | 28,651 | |||||||
$ | 103,636 | $ | 109,251 | ||||||
Income (loss) from operations: | |||||||||
Industrial Ingredients | $ | 2,983 | $ | (2,043 | ) | ||||
Food Ingredients | 6,893 | 6,530 | |||||||
Corporate and other | (5,466 | ) | (2,846 | ) | |||||
$ | 4,410 | $ | 1,641 | ||||||
November 30, | August 31, | ||||||||
(In thousands) | 2014 | 2014 | |||||||
Total assets: | |||||||||
Industrial Ingredients | $ | 138,624 | $ | 135,973 | |||||
Food Ingredients | 90,910 | 89,781 | |||||||
Corporate and other | 11,905 | 13,436 | |||||||
$ | 241,439 | $ | 239,190 | ||||||
Legal_Proceedings_and_Continge
Legal Proceedings and Contingencies | 3 Months Ended |
Nov. 30, 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. | |
Merger Agreement Shareholder Litigation | |
In connection with the proposed merger with Ingredion, two purported class action lawsuits have been filed on behalf of Penford Corporation shareholders in the Superior Court of Washington, King County. A complaint captioned Pill v. Penford Corp. et al., No. 14-2-29641-0 SEA was filed on October 30, 2014, and a complaint captioned Toth v. Penford Corp, et al., No. 14-2-31935-5 SEA, was filed on November 25, 2014. The complaints named as defendants Penford Corporation, all of the members of Penford Corporation’s board of directors, Ingredion and Prospect Sub, Inc. (referred to as “Merger Sub”). The complaints allege, among other things, that the members of Penford Corporation’s board of directors breached their fiduciary duties to shareholders by failing to take steps to maximize shareholder value or to engage in a fair sale process before approving the proposed acquisition of the Company by Ingredion. | |
These actions were consolidated on December 18, 2014 under the new consolidated caption In re Penford Corporation Shareholders Litigation, No. 14-2-29641-0 SEA. Pursuant to the consolidation order, plaintiffs were required to file a Consolidated Amended Class Action Complaint. | |
On December 30, 2014, plaintiffs filed a Motion for Appointment of Lead and Liaison Counsel seeking an order appointing co-lead and liaison counsel for plaintiffs and establishing a structure for coordination and communication among plaintiffs and their counsel. | |
On December 31, 2014, plaintiffs filed a Consolidated Amended Class Action Complaint naming the same defendants as the Pill and Toth complaints. The amended complaint alleges, among other things, that the members of Penford’s board of directors breached their fiduciary duties to shareholders by failing to take steps to maximize shareholder value or to engage in a fair sale process before approving the proposed acquisition of the Company by Ingredion. Specifically, the amended complaint alleges that the consideration to be paid by Ingredion is inadequate in light of the Company’s current value and potential for future growth. The amended complaint also alleges that the Company’s transaction process was designed to ensure that only Ingredion had the opportunity to acquire the Company and that the use of certain deal protection mechanisms improperly precluded the Company from seeking out competing offers. | |
The amended complaint further alleges that the members of Penford’s board of directors breached their fiduciary duties of candor by failing to disclose to shareholders certain purportedly material information and by causing materially misleading information to be disseminated to the Company’s shareholders in the Definitive Proxy Statement pursuant to Section 14(a) of the Exchange Act filed by the Company with the SEC on December 29, 2014. Specifically, the amended complaint alleges that the Company failed to disclose material information concerning Penford’s financial advisor’s analyses and potential conflicts of interest, the Company’s financial projections and the Company’s transaction process. | |
The amended complaint further alleges that Ingredion and Merger Sub aided and abetted the alleged breaches of fiduciary duty by the Penford Corporation board of directors. Plaintiffs seek relief that includes an injunction prohibiting the completion of the proposed merger, rescission to the extent the merger terms have already been implemented and payment of plaintiffs’ attorneys’ fees and costs. | |
Also on December 31, 2014, plaintiffs filed a Motion for Expedited Discovery in support of a planned motion seeking to preliminarily enjoin the scheduled January 29, 2015 shareholder vote to approve the proposed merger. Plaintiffs seek an order compelling expedited production of documents by Penford and depositions of certain members of Penford’s board of directors. | |
Pet Product Patent Litigation | |
As previously reported, in June 2011 the Company was notified that a complaint (captioned T.F.H. Publications, Inc. v. Penford Products Co. et al) 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 alleges that certain pet products supplied by Penford Products to the customer infringed upon a patent owned by T.F.H. Publications, Inc. 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 the defense of this 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. In November 2013, the plaintiff filed another amended complaint adding Penford Products as a defendant in the suit. The plaintiff is seeking an injunction against infringement of its patents, as well as the recovery of an unspecified amount of damages. | |
The court held a claim construction hearing on August 7, 2013 and rendered an opinion dated April 30, 2014. The Company believes that the court’s opinion substantially supports its position that none of the products supplied by Penford Products infringes upon either of the patents in the suit. | |
The Company is currently participating in settlement negotiations with the plaintiff, but there can be no assurance that these negotiations will be successfully completed. If the negotiations fail, the Company will evaluate further steps in order to seek the dismissal of the litigation. | |
Estate of Brett D. Brown | |
As previously reported, in early October 2014, the Company was notified that a petition (captioned Heather A. Brown as Administrator for the Estate of Brett D. Brown v. Penford Corporation and Penford Products Co.) had been filed against it and Penford Products in the Iowa District Court for Linn County by the Administrator for the Estate of Brett D. Brown alleging negligence by the Company in connection with the death of Mr. Brown, a former employee of an electrical contractor retained by Penford Products at the Company’s Cedar Rapids plant. The petition does not specify an amount of damages being sought. The Company has tendered the defense of this litigation to the insurer for its contractor (Mr. Brown’s former employer), which has accepted the defense of the matter subject to a reservation of rights. The Company intends to vigorously defend this matter and to deny all allegations of negligence or fault. | |
Resistant Starch Patent Litigation | |
On December 23, 2014, the Company was notified that a lawsuit had been filed against it in the United States District Court for the District of Kansas by MGPI Processing, Inc. alleging infringement of a patent relating to the production of resistant starches that is allegedly licensed to the plaintiff. The complaint, which has not yet been served, seeks an unspecified amount of damages and an injunction, among other relief. | |
Potential Outcomes | |
Management is unable to provide additional information regarding any possible losses in connection with each of the foregoing claims and proceedings because (i) the Company currently believes that the claims are without merit, and (ii) there are significant factual and/or legal issues to be resolved in each case. 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. |
Merger_Agreement
Merger Agreement | 3 Months Ended |
Nov. 30, 2014 | |
Business Combinations [Abstract] | |
Merger Agreement | 13—MERGER AGREEMENT |
On October 14, 2014, the Company, Ingredion and Merger Sub, a wholly owned subsidiary of Ingredion, entered into the Merger Agreement pursuant to which Ingredion will acquire the Company in an all-cash transaction valued at approximately $340 million in the aggregate. Upon the terms and conditions set forth in the Merger Agreement, Merger Sub will merge with and into the Company (the “Merger”), and the Company will become a wholly owned subsidiary of Ingredion. | |
Pursuant to the Merger Agreement, upon the closing of the Merger (the “Closing”), each outstanding share of the Company’s common stock, other than the shares owned directly or indirectly by Ingredion or Merger Sub (which will be cancelled) and shares with respect to which dissenter’s rights are properly exercised and not withdrawn under Washington law, will automatically be converted into the right to receive $19.00 in cash (the “Merger Consideration”), without interest and subject to any withholding of taxes required by applicable law. Each Company option outstanding immediately prior to the Merger, whether or not then vested and exercisable, will be cancelled and converted into the right to receive, for each share of common stock subject to such stock option, an amount in cash, without interest, equal to the excess, if any, of the Merger Consideration over the per share exercise price of such option. In addition, other issued and outstanding equity-based awards will be cancelled and converted into the right to receive, for each share of common stock payable thereunder, the Merger Consideration, without interest. | |
The consummation of the Merger is subject to customary closing conditions and covenants. The Merger Agreement provides certain termination rights for the Company, Ingredion and Merger Sub, including (i) the Company’s right to terminate the Merger Agreement in order to enter into an acquisition agreement with respect to a superior acquisition proposal after complying with certain obligations; (ii) Ingredion’s ability to terminate the Merger Agreement if there is a change of recommendation by the Company’s board; and (iii) the Company’s and Ingredion’s right to termination the Merger Agreement if the Merger has not been consummated by the outside date, including due to anti-trust regulatory reasons. In connection with the termination of the Merger Agreement under specified circumstances, the Company will be required to pay Ingredion a termination fee equal to approximately $7.6 million. In the event the Company’s shareholders do not approve the Merger and the Merger Agreement is terminated, the Company will be required to pay Ingredion a fee equal to $2.0 million, which is intended to cover expenses. |
Basis_of_Presentation_Policies
Basis of Presentation (Policies) | 3 Months Ended |
Nov. 30, 2014 | |
Accounting Policies [Abstract] | |
Consolidation | Consolidation |
The accompanying Condensed Consolidated Financial Statements include the accounts of Penford and its wholly owned subsidiaries. All material intercompany transactions and balances have been eliminated. Transactions between segments are at cost plus a return on assets. The condensed consolidated balance sheet at November 30, 2014 and the condensed consolidated statements of income (loss), comprehensive income (loss) and cash flows for the interim periods ended November 30, 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, 2014, as amended. | |
Use of Estimates/Change in Estimate | 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; the determination of potential write downs for lower-of-cost-or-market inventory evaluations; the reserve for obsolete inventory; 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, indefinite-lived intangible assets 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. | |
Change in Estimate | |
During the third quarter of fiscal year 2014, the Company changed its estimates of useful lives of certain machinery and equipment used by the Industrial Ingredients segment to better match depreciation expense of these assets with the periods in which these assets are expected to generate revenue. The new estimated useful lives were established based on manufacturing engineering data and external benchmark data and were generally increased as compared to the previous estimates. The Company accounted for this as a prospective change in accounting estimate as of May 1, 2014, thereby impacting the quarter in which the change occurred and future periods. The change in the estimate lowered depreciation expense as compared to the amount that would have been recorded using the historical estimated useful lives. The effect of this change on net income and diluted earnings per share for the quarter ended November 30, 2014 was $758,000 and $0.06 per share, respectively. | |
Recent Accounting Pronouncements | Recent Accounting Pronouncements |
On May 28, 2014, the Financial Accounting Standards Board (“FASB”) issued guidance that requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. The guidance will replace most existing revenue recognition guidance when it becomes effective. The new standard is effective for the Company on September 1, 2017, and early application is not permitted. The standard permits the use of either the retrospective or cumulative effect transition method. The Company is evaluating the effect that this new guidance will have on its consolidated financial statements and related disclosures. The Company has not selected a transition method nor has it determined the effect of the standard on its ongoing financial reporting. |
Balance_Sheet_Details_Tables
Balance Sheet Details (Tables) | 3 Months Ended | ||||||||||||||||
Nov. 30, 2014 | |||||||||||||||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||
Components of Inventory | The components of inventory were as follows: | ||||||||||||||||
(In thousands) | November 30, | August 31, | |||||||||||||||
2014 | 2014 | ||||||||||||||||
Raw materials | $ | 11,202 | $ | 10,069 | |||||||||||||
Work in progress | 958 | 1,322 | |||||||||||||||
Finished goods | 29,919 | 30,360 | |||||||||||||||
Total inventories | $ | 42,079 | $ | 41,751 | |||||||||||||
Components of Property, Plant and Equipment | The components of property, plant and equipment, net were as follows: | ||||||||||||||||
(In thousands) | November 30, | August 31, | |||||||||||||||
2014 | 2014 | ||||||||||||||||
Land and land improvements | $ | 12,512 | $ | 12,512 | |||||||||||||
Plant and equipment | 370,606 | 369,224 | |||||||||||||||
Construction in progress | 9,419 | 7,603 | |||||||||||||||
392,537 | 389,339 | ||||||||||||||||
Accumulated depreciation | (276,553 | ) | (274,535 | ) | |||||||||||||
Net property, plant and equipment | $ | 115,984 | $ | 114,804 | |||||||||||||
Carrying Amount and Accumulated Amortization of Intangible Assets | The carrying amount and accumulated amortization of intangible assets were as follows (dollars in thousands): | ||||||||||||||||
November 30, 2014 | August 31, 2014 | ||||||||||||||||
Carrying | Accumulated | Carrying | Accumulated | ||||||||||||||
Amount | Amortization | Amount | Amortization | ||||||||||||||
Intangible assets: | |||||||||||||||||
Patents and other | $ | 1,895 | $ | 1,581 | $ | 1,870 | $ | 1,572 | |||||||||
Customer lists and relationships | 3,060 | 353 | 3,060 | 296 | |||||||||||||
Trade names/brand portfolio | 2,910 | 45 | 2,910 | 35 | |||||||||||||
Non-compete agreements | 190 | 71 | 190 | 108 | |||||||||||||
Other intangible assets | $ | 8,055 | $ | 2,050 | $ | 8,030 | $ | 2,011 | |||||||||
Components of Accrued Liabilities | Components of accrued liabilities were as follows: | ||||||||||||||||
(In thousands) | November 30, | August 31, | |||||||||||||||
2014 | 2014 | ||||||||||||||||
Employee-related costs | $ | 4,442 | $ | 5,271 | |||||||||||||
Other accrued liabilities | 4,468 | 4,508 | |||||||||||||||
Total accrued liabilities | $ | 8,910 | $ | 9,779 | |||||||||||||
Accumulated_Other_Comprehensiv1
Accumulated Other Comprehensive Income (Loss) ("AOCI") (Tables) | 3 Months Ended | ||||||||||||||
Nov. 30, 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 three months ended November 30, 2014 and 2013: | ||||||||||||||
(In thousands) | Net Unrealized | Gains | Total | ||||||||||||
Gains (Losses) | (Losses) | Accumulated | |||||||||||||
on Cash Flow | on | Other | |||||||||||||
Hedging | Postretirement | Comprehensive | |||||||||||||
Instruments, | Obligations, | Loss | |||||||||||||
Net of Tax | Net of Tax | ||||||||||||||
Balances at August 31, 2014 | $ | (2,022 | ) | $ | (5,730 | ) | $ | (7,752 | ) | ||||||
Other comprehensive income, net of tax | 1,703 | 50 | 1,753 | ||||||||||||
Balances at November 30, 2014 | $ | (319 | ) | $ | (5,680 | ) | $ | (5,999 | ) | ||||||
(In thousands) | Net Unrealized | Gains | Total | ||||||||||||
Gains (Losses) | (Losses) | Accumulated | |||||||||||||
on Cash Flow | on | Other | |||||||||||||
Hedging | Postretirement | Comprehensive | |||||||||||||
Instruments, | Obligations, | Loss | |||||||||||||
Net of Tax | Net of Tax | ||||||||||||||
Balances at August 31, 2013 | $ | (856 | ) | $ | (6,763 | ) | $ | (7,619 | ) | ||||||
Other comprehensive income, net of tax | 10 | 93 | 103 | ||||||||||||
Balances at November 30, 2013 | $ | (846 | ) | $ | (6,670 | ) | $ | (7,516 | ) | ||||||
Amounts Reclassified from Accumulated Other Comprehensive Income (Loss) | Amounts reclassified from accumulated other comprehensive income (loss) were as follows: | ||||||||||||||
Three Months Ended November 30, 2014 | |||||||||||||||
(In thousands) | Location of Expense | Before Tax | Tax | Net of Tax | |||||||||||
(Income) Recognized | Amount | Amount | |||||||||||||
in Net Earnings | |||||||||||||||
Pension and other postretirement benefit plans: | |||||||||||||||
Amortization of actuarial loss (gain) | Cost of sales | $ | 58 | $ | (22 | ) | $ | 36 | |||||||
Amortization of prior service cost | Cost of sales | 23 | (9 | ) | 14 | ||||||||||
Total reclassification adjustments | 81 | (31 | ) | 50 | |||||||||||
Derivatives accounted for as hedges | Cost of sales | 2,509 | (964 | ) | 1,545 | ||||||||||
Total reclassifications into income | $ | 2,590 | $ | (995 | ) | $ | 1,595 | ||||||||
Three Months Ended November 30, 2013 | |||||||||||||||
(In thousands) | Location of Expense | Before Tax | Tax | Net of Tax | |||||||||||
(Income) Recognized | Amount | Amount | |||||||||||||
in 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 | 42 | (16 | ) | 26 | ||||||||||
expenses | |||||||||||||||
Amortization of prior service cost | Cost of sales | 2 | (1 | ) | 1 | ||||||||||
Amortization of prior service cost | Operating/R&D | 18 | (6 | ) | 12 | ||||||||||
expenses | |||||||||||||||
Total reclassification adjustments | 151 | (58 | ) | 93 | |||||||||||
Derivatives accounted for as hedges | Cost of sales | 1,980 | (753 | ) | 1,227 | ||||||||||
Total reclassifications into income | $ | 2,131 | $ | (811 | ) | $ | 1,320 | ||||||||
StockBased_Compensation_Tables
Stock-Based Compensation (Tables) | 3 Months Ended | ||||||||||||||||
Nov. 30, 2014 | |||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||
Schedule of Share Based Compensation Stock Options Activity | A summary of the stock option activity for the three months ended November 30, 2014 was as follows: | ||||||||||||||||
Number of | Weighted- | Weighted- | Aggregate | ||||||||||||||
Shares | Average | Average | Intrinsic Value | ||||||||||||||
Exercise Price | Remaining | ||||||||||||||||
Term (in years) | |||||||||||||||||
Outstanding balance, August 31, 2014 | 1,429,000 | $ | 10.42 | ||||||||||||||
Granted | — | — | |||||||||||||||
Exercised | (136,875 | ) | 16.4 | ||||||||||||||
Cancelled | — | — | |||||||||||||||
Outstanding balance, November 30, 2014 | 1,292,125 | $ | 9.78 | 3.22 | $ | 11,860,900 | |||||||||||
Options exercisable at November 30, 2014 | 946,460 | $ | 10.46 | 2.64 | $ | 8,052,000 | |||||||||||
Schedule of Share-Based Compensation, Restricted Stock Award Activity | The following table summarizes the restricted stock award activity for the three months ended November 30, 2014 as follows: | ||||||||||||||||
Number of | Weighted- | ||||||||||||||||
Shares | Average | ||||||||||||||||
Grant-Date | |||||||||||||||||
Fair Value | |||||||||||||||||
Non-vested at August 31, 2014 | 173,060 | $ | 12.64 | ||||||||||||||
Granted | — | — | |||||||||||||||
Vested | — | — | |||||||||||||||
Cancelled | (500 | ) | 12.68 | ||||||||||||||
Non-vested at November 30, 2014 | 172,560 | $ | 12.64 | ||||||||||||||
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 Income (Loss): | ||||||||||||||||
Three Months Ended | |||||||||||||||||
November 30, | |||||||||||||||||
(In thousands) | 2014 | 2013 | |||||||||||||||
Cost of sales | $ | 17 | $ | — | |||||||||||||
Operating expenses | 477 | 249 | |||||||||||||||
Research and development expenses | 10 | — | |||||||||||||||
Total stock-based compensation expense | $ | 504 | $ | 249 | |||||||||||||
Income tax benefit | (194 | ) | (95 | ) | |||||||||||||
Total stock-based compensation expense, net of tax | $ | 310 | $ | 154 | |||||||||||||
Pension_and_PostRetirement_Ben1
Pension and Post-Retirement Benefit Plans (Tables) | 3 Months Ended | ||||||||
Nov. 30, 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 | ||||||||
November 30, | |||||||||
(In thousands) | 2014 | 2013 | |||||||
Service cost | $ | 255 | $ | 438 | |||||
Interest cost | 672 | 735 | |||||||
Expected return on plan assets | (966 | ) | (813 | ) | |||||
Amortization of prior service cost | 58 | 58 | |||||||
Amortization of actuarial losses | 23 | 131 | |||||||
Net periodic benefit cost | $ | 42 | $ | 549 | |||||
Post-retirement Health Care Plans | Three Months Ended | ||||||||
November 30, | |||||||||
(In thousands) | 2014 | 2013 | |||||||
Service cost | $ | 21 | $ | 28 | |||||
Interest cost | 210 | 222 | |||||||
Amortization of prior service cost | (1 | ) | (38 | ) | |||||
Amortization of actuarial losses | — | — | |||||||
Net periodic benefit cost | $ | 230 | $ | 212 | |||||
Fair_Value_Measurements_and_De1
Fair Value Measurements and Derivative Instruments (Tables) | 3 Months Ended | ||||||||||||||||||||||||
Nov. 30, 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 November 30, 2014 and August 31, 2014: | ||||||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||||
As of November 30, 2014 | Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||||||
Current assets (Other current assets): | |||||||||||||||||||||||||
Commodity derivatives | $ | (1,678 | ) | $ | — | $ | — | $ | (1,678 | ) | |||||||||||||||
(In thousands) | |||||||||||||||||||||||||
As of August 31, 2014 | Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||||||
Current assets (Other current assets): | |||||||||||||||||||||||||
Commodity derivatives | $ | (1,787 | ) | $ | — | $ | — | $ | (1,787 | ) | |||||||||||||||
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 | Recorded in | |||||||||||||||||||||
Assets | Offset in the | (Liabilities) | with | Balance Sheets | |||||||||||||||||||||
Balance Sheets | Counterparty | ||||||||||||||||||||||||
As of November 30, 2014 | |||||||||||||||||||||||||
Commodity derivatives | $ | 48 | $ | (1,726 | ) | $ | (1,678 | ) | $ | 3,192 | $ | 1,514 | |||||||||||||
As of August 31, 2014 | |||||||||||||||||||||||||
Commodity derivatives | $ | 413 | $ | (2,200 | ) | $ | (1,787 | ) | $ | 3,490 | $ | 1,703 | |||||||||||||
Outstanding Futures Contracts | As of November 30, 2014, the Company had the following outstanding futures contracts: | ||||||||||||||||||||||||
Corn futures | 4,060,000 | Bushels | |||||||||||||||||||||||
Ethanol futures | 13,650,000 | Gallons | |||||||||||||||||||||||
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 November 30, 2014 and August 31, 2014: | ||||||||||||||||||||||||
Assets | Liabilities | ||||||||||||||||||||||||
(In thousands) | Fair Value | Fair Value | |||||||||||||||||||||||
Balance Sheet | Nov 30, | Aug 31, | Balance Sheet | Nov 30, | Aug 31, | ||||||||||||||||||||
Location | 2014 | 2014 | Location | 2014 | 2014 | ||||||||||||||||||||
Derivatives designated as hedging instruments: | |||||||||||||||||||||||||
Cash flow hedges: | |||||||||||||||||||||||||
Corn futures | Other current assets | $ | 48 | $ | — | Other current assets | $ | 84 | $ | 320 | |||||||||||||||
Ethanol futures | Other current assets | — | — | Other current assets | 1,637 | 1,880 | |||||||||||||||||||
Fair value hedges: | |||||||||||||||||||||||||
Corn futures | Other current assets | — | 413 | Other current assets | 5 | — | |||||||||||||||||||
$ | 48 | $ | 413 | $ | 1,726 | $ | 2,200 | ||||||||||||||||||
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-month periods ended November 30, 2014 and 2013: | ||||||||||||||||||||||||
(In thousands) | Amount of Gain | Amount of Gain (Loss) | Amount of Gain | ||||||||||||||||||||||
(Loss) Recognized in | Reclassified from | (Loss) Recognized in | |||||||||||||||||||||||
OCI | AOCI into Income | Income | |||||||||||||||||||||||
3 Months Ended Nov 30, | 3 Months Ended Nov 30, | 3 Months Ended Nov 30, | |||||||||||||||||||||||
2014 | 2013 | 2014 | 2013 | 2014 | 2013 | ||||||||||||||||||||
Derivatives designated as hedging instruments: | |||||||||||||||||||||||||
Cash flow hedges: | |||||||||||||||||||||||||
Corn futures (1) | $ | — | $ | (2,048 | ) | $ | (2,030 | ) | $ | (2,512 | ) | $ | 815 | $ | (1,011 | ) | |||||||||
Ethanol futures (1) | 257 | 85 | (479 | ) | 532 | (357 | ) | (1,584 | ) | ||||||||||||||||
$ | 257 | $ | (1,963 | ) | $ | (2,509 | ) | $ | (1,980 | ) | $ | 458 | $ | (2,595 | ) | ||||||||||
Fair value hedges: | |||||||||||||||||||||||||
Corn futures (1) (2) | $ | — | $ | 5 | |||||||||||||||||||||
Derivatives not designated as hedging instruments: | |||||||||||||||||||||||||
Natural gas futures (1) | $ | — | $ | 33 | |||||||||||||||||||||
Natural gas options (1) | — | 20 | |||||||||||||||||||||||
Soybean meal futures (1) | — | — | |||||||||||||||||||||||
$ | — | $ | 53 | ||||||||||||||||||||||
-1 | Gains and losses reported in Cost of sales | ||||||||||||||||||||||||
-2 | Hedged items are firm commitments and inventory |
Earnings_Per_Share_Tables
Earnings Per Share (Tables) | 3 Months Ended | ||||||||
Nov. 30, 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 | |||||||||
November 30, | |||||||||
(In thousands) | 2014 | 2013 | |||||||
Numerator: | |||||||||
Net income | $ | 2,134 | $ | 488 | |||||
Less: Allocation to participating securities | (29 | ) | (1 | ) | |||||
Net income applicable to common shares | $ | 2,105 | $ | 487 | |||||
Denominator: | |||||||||
Weighted average common shares outstanding, basic | 12,583 | 12,473 | |||||||
Dilutive stock options and awards | 457 | 368 | |||||||
Weighted average common shares outstanding, diluted | 13,040 | 12,841 | |||||||
Segment_Reporting_Tables
Segment Reporting (Tables) | 3 Months Ended | ||||||||
Nov. 30, 2014 | |||||||||
Segment Reporting [Abstract] | |||||||||
Segment Wide Reporting Information | |||||||||
Three Months Ended | |||||||||
November 30, | |||||||||
(In thousands) | 2014 | 2013 | |||||||
Sales: | |||||||||
Industrial Ingredients: | |||||||||
Industrial starch | $ | 35,109 | $ | 43,620 | |||||
Ethanol | 22,046 | 22,021 | |||||||
By-products | 12,319 | 14,959 | |||||||
69,474 | 80,600 | ||||||||
Food Ingredients | 34,162 | 28,651 | |||||||
$ | 103,636 | $ | 109,251 | ||||||
Income (loss) from operations: | |||||||||
Industrial Ingredients | $ | 2,983 | $ | (2,043 | ) | ||||
Food Ingredients | 6,893 | 6,530 | |||||||
Corporate and other | (5,466 | ) | (2,846 | ) | |||||
$ | 4,410 | $ | 1,641 | ||||||
November 30, | August 31, | ||||||||
(In thousands) | 2014 | 2014 | |||||||
Total assets: | |||||||||
Industrial Ingredients | $ | 138,624 | $ | 135,973 | |||||
Food Ingredients | 90,910 | 89,781 | |||||||
Corporate and other | 11,905 | 13,436 | |||||||
$ | 241,439 | $ | 239,190 | ||||||
Business_Additional_Informatio
Business - Additional Information (Detail) (USD $) | 3 Months Ended | 1 Months Ended | 0 Months Ended |
In Millions, except Per Share data, unless otherwise specified | Nov. 30, 2014 | Mar. 31, 2014 | Oct. 14, 2014 |
Segment | |||
Business Acquisition [Line Items] | |||
Number of segments | 2 | ||
Gum Technology [Member] | |||
Business Acquisition [Line Items] | |||
Purchase price | $9.90 | ||
Ingredion Incorporated [Member] | |||
Business Acquisition [Line Items] | |||
Purchase price | $340 | ||
Proposed merger conversion of common shares into right to receive cash amount | $19 |
Basis_of_Presentation_Addition
Basis of Presentation - Additional Information (Detail) (USD $) | 3 Months Ended |
Nov. 30, 2014 | |
Change in Accounting Estimate [Abstract] | |
Effect of change in estimate on net income | $758,000 |
Increase in diluted earnings per share | $0.06 |
Balance_Sheet_Details_Componen
Balance Sheet Details - Components of Inventory (Detail) (USD $) | Nov. 30, 2014 | Aug. 31, 2014 |
In Thousands, unless otherwise specified | ||
Inventory Disclosure [Abstract] | ||
Raw materials | $11,202 | $10,069 |
Work in progress | 958 | 1,322 |
Finished goods | 29,919 | 30,360 |
Total inventories | $42,079 | $41,751 |
Balance_Sheet_Details_Componen1
Balance Sheet Details - Components of Property, Plant and Equipment (Detail) (USD $) | Nov. 30, 2014 | Aug. 31, 2014 |
In Thousands, unless otherwise specified | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $392,537 | $389,339 |
Accumulated depreciation | -276,553 | -274,535 |
Net property, plant and equipment | 115,984 | 114,804 |
Land and Land Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 12,512 | 12,512 |
Plant and Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 370,606 | 369,224 |
Construction in Progress [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $9,419 | $7,603 |
Balance_Sheet_Details_Addition
Balance Sheet Details - Additional Information (Detail) (USD $) | 3 Months Ended | 12 Months Ended | |
Nov. 30, 2014 | Nov. 30, 2013 | Aug. 31, 2014 | |
Property, Plant and Equipment [Line Items] | |||
Payables related to property, plant and equipment | $900,000 | $500,000 | |
Trade names/brand portfolio | 2,700,000 | ||
Amortization expense related to intangible assets | $39,000 | $42,000 | |
Patents and Other [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Weighted average remaining amortization period (in years) | 5 years | ||
Customer Lists and Relationships [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Weighted average remaining amortization period (in years) | 13 years | ||
Non-compete Agreement [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Weighted average remaining amortization period (in years) | 5 years |
Balance_Sheet_Details_Carrying
Balance Sheet Details - Carrying Amount and Accumulated Amortization of Intangible Assets (Detail) (USD $) | Nov. 30, 2014 | Aug. 31, 2014 |
In Thousands, unless otherwise specified | ||
Acquired Intangible Assets By Major Class [Line Items] | ||
Carrying Amount | $8,055 | $8,030 |
Accumulated Amortization | 2,050 | 2,011 |
Trade Names/Brand Portfolio [Member] | ||
Acquired Intangible Assets By Major Class [Line Items] | ||
Carrying Amount | 2,910 | 2,910 |
Accumulated Amortization | 45 | 35 |
Patents and Other [Member] | ||
Acquired Intangible Assets By Major Class [Line Items] | ||
Carrying Amount | 1,895 | 1,870 |
Accumulated Amortization | 1,581 | 1,572 |
Customer Lists and Relationships [Member] | ||
Acquired Intangible Assets By Major Class [Line Items] | ||
Carrying Amount | 3,060 | 3,060 |
Accumulated Amortization | 353 | 296 |
Non-compete Agreement [Member] | ||
Acquired Intangible Assets By Major Class [Line Items] | ||
Carrying Amount | 190 | 190 |
Accumulated Amortization | $71 | $108 |
Balance_Sheet_Details_Componen2
Balance Sheet Details - Components of Accrued Liabilities (Detail) (USD $) | Nov. 30, 2014 | Aug. 31, 2014 |
In Thousands, unless otherwise specified | ||
Accrued Liabilities, Current [Abstract] | ||
Employee-related costs | $4,442 | $5,271 |
Other accrued liabilities | 4,468 | 4,508 |
Total accrued liabilities | $8,910 | $9,779 |
Debt_Additional_Information_De
Debt - Additional Information (Detail) (USD $) | 0 Months Ended | 12 Months Ended | 3 Months Ended |
Aug. 01, 2014 | Aug. 31, 2014 | Nov. 30, 2014 | |
2012 Agreement[Member] | |||
Debt Instrument [Line Items] | |||
Maximum borrowing capacity | $130,000,000 | ||
2014 Agreement [Member] | |||
Debt Instrument [Line Items] | |||
Borrowing capacity under line of credit facility | 145,000,000 | ||
Debt instrument principal payments | 0 | ||
Debt instrument maturity date | 1-Aug-19 | ||
Line of credit, amount outstanding | 74,000,000 | ||
2014 Agreement [Member] | Maximum [Member] | |||
Debt Instrument [Line Items] | |||
Covenant, amount of capital expenditure permitted | 35,000,000 | ||
Covenant, dividend declaration permitted | 10,000,000 | ||
Covenant, dividend declaration permitted as a percentage of cash flow | 50.00% | ||
2014 Agreement [Member] | Minimum [Member] | |||
Debt Instrument [Line Items] | |||
Covenant, fixed coverage ratio | 125.00% | ||
Covenant, amount of capital expenditure permitted | 25,000,000 | ||
2014 Agreement [Member] | Base Rate [Member] | Maximum [Member] | |||
Debt Instrument [Line Items] | |||
Debt instrument, base rate margin | 2.50% | ||
2014 Agreement [Member] | Base Rate [Member] | Minimum [Member] | |||
Debt Instrument [Line Items] | |||
Debt instrument, base rate margin | 1.00% | ||
2014 Agreement [Member] | Eurodollar [Member] | Maximum [Member] | |||
Debt Instrument [Line Items] | |||
Debt instrument, base rate margin | 3.50% | ||
2014 Agreement [Member] | Eurodollar [Member] | Minimum [Member] | |||
Debt Instrument [Line Items] | |||
Debt instrument, base rate margin | 2.00% | ||
2014 Agreement [Member] | Scenario, Forecast [Member] | Maximum [Member] | |||
Debt Instrument [Line Items] | |||
Covenant, maximum total leverage ratio permitted through August 31, 2015 | 500.00% | ||
Covenant, maximum total leverage ratio permitted from November 30, 2015 through August 31, 2016 | 450.00% | ||
Covenant, maximum total leverage ratio permitted from November 30, 2016 through August 31, 2017 | 425.00% | ||
Covenant, maximum total leverage ratio permitted after August 31, 2017 | 375.00% | ||
2014 Agreement [Member] | Two Consecutive Quarters [Member] | |||
Debt Instrument [Line Items] | |||
Covenant, total leverage ratio restricting capital expenditures | 200.00% | ||
Term Loan Agreement [Member] | |||
Debt Instrument [Line Items] | |||
Maximum borrowing capacity | 25,000,000 | ||
Debt instrument principal payments | 0 | ||
Debt instrument maturity date | 31-Jul-20 | ||
Line of credit, amount outstanding | $0 | ||
Anniversary period of term loan | 18 months | ||
Term Loan Agreement [Member] | Minimum [Member] | |||
Debt Instrument [Line Items] | |||
Covenant, fixed coverage ratio | 110.00% | ||
Term Loan Agreement [Member] | Scenario, Forecast [Member] | Maximum [Member] | |||
Debt Instrument [Line Items] | |||
Covenant, maximum total leverage ratio permitted through August 31, 2015 | 550.00% | ||
Covenant, maximum total leverage ratio permitted from November 30, 2015 through August 31, 2016 | 500.00% | ||
Covenant, maximum total leverage ratio permitted from November 30, 2016 through August 31, 2017 | 475.00% | ||
Covenant, maximum total leverage ratio permitted after August 31, 2017 | 425.00% |
Accumulated_Other_Comprehensiv2
Accumulated Other Comprehensive Income (Loss) - Summary of Components of Accumulated Other Comprehensive Income (Loss) (Detail) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Nov. 30, 2014 | Nov. 30, 2013 |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Beginning Balances | ($7,752) | ($7,619) |
Other comprehensive income, net of tax | 1,753 | 103 |
Ending Balances | -5,999 | -7,516 |
Cash Flow Hedging Instruments [Member] | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Beginning Balances | -2,022 | -856 |
Other comprehensive income, net of tax | 1,703 | 10 |
Ending Balances | -319 | -846 |
Postretirement Obligations [Member] | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Beginning Balances | -5,730 | -6,763 |
Other comprehensive income, net of tax | 50 | 93 |
Ending Balances | ($5,680) | ($6,670) |
Accumulated_Other_Comprehensiv3
Accumulated Other Comprehensive Income (Loss) - Amounts Reclassified from Accumulated Other Comprehensive Income (Loss) (Detail) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Nov. 30, 2014 | Nov. 30, 2013 |
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||
Amortization of actuarial loss (gain), Tax | ($9) | ($51) |
Amortization of actuarial loss (gain), Net of Tax Amount | -14 | -80 |
Amortization of prior service cost, Tax | 22 | 7 |
Amortization of prior service cost, Net of Tax Amount | -36 | -13 |
Before Tax Amount | -3,434 | -836 |
Tax | 1,300 | 348 |
Net of Tax Amount | -2,134 | -488 |
Reclassification out of Accumulated Other Comprehensive Income [Member] | ||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||
Before Tax Amount | 2,590 | 2,131 |
Tax | -995 | -811 |
Net of Tax Amount | 1,595 | 1,320 |
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 | 58 | 89 |
Amortization of actuarial loss (gain), Tax | -22 | -35 |
Amortization of actuarial loss (gain), Net of Tax Amount | 36 | 54 |
Amortization of prior service cost, Before Tax Amount | 23 | 2 |
Amortization of prior service cost, Tax | -9 | -1 |
Amortization of prior service cost, Net of Tax Amount | 14 | 1 |
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 | |
Amortization of actuarial loss (gain), Tax | -16 | |
Amortization of actuarial loss (gain), Net of Tax Amount | 26 | |
Amortization of prior service cost, Before Tax Amount | 18 | |
Amortization of prior service cost, Tax | -6 | |
Amortization of prior service cost, Net of Tax Amount | 12 | |
Reclassification out of Accumulated Other Comprehensive Income [Member] | Postretirement Obligations [Member] | ||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||
Before Tax Amount | 81 | 151 |
Tax | -31 | -58 |
Net of Tax Amount | 50 | 93 |
Reclassification out of Accumulated Other Comprehensive Income [Member] | Cash Flow Hedging Instruments [Member] | ||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||
Before Tax Amount | 2,509 | 1,980 |
Tax | -964 | -753 |
Net of Tax Amount | $1,545 | $1,227 |
StockBased_Compensation_Additi
Stock-Based Compensation - Additional Information (Detail) (USD $) | 3 Months Ended | 0 Months Ended | 3 Months Ended |
Nov. 30, 2014 | Jan. 01, 2014 | 31-May-14 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share price of Company's stock | $18.94 | ||
Intrinsic value of options exercised | $323,300 | ||
Options granted during the period | 0 | ||
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 | 177,292 | ||
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 | ||
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) | 10 months 24 days | ||
Compensation expense related to unvested awards not yet recognized | 1,200,000 | ||
Restricted Stock [Member] | 2006 Incentive Plan [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting period (in years) | 3 years | ||
Restricted stock awards granted (in shares) | 15,560 | 157,500 | |
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 | ||
Restricted stock awards granted (in shares) | 1,556 | ||
Stock Options [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Compensation expense related to non-vested awards not yet recognized | $400,000 | ||
Weighted-average period over which unrecognized compensation cost will be recognized (in years) | 9 months 18 days | ||
Stock Options [Member] | 2006 Incentive Plan [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Options granted during the period | 0 |
StockBased_Compensation_Schedu
Stock-Based Compensation - Schedule of Share Based Compensation Stock Options Activity (Detail) (USD $) | 3 Months Ended |
Nov. 30, 2014 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Options outstanding, beginning of period, Shares | 1,429,000 |
Shares, Granted | 0 |
Shares, Exercised | -136,875 |
Shares, Cancelled | 0 |
Options outstanding, end of period, Shares | 1,292,125 |
Options exercisable, end of period, Shares | 946,460 |
Weighted-Average Exercise Price, Options Outstanding beginning of period, Per Share | $10.42 |
Weighted-Average Exercise Price, Granted, Per Share | $0 |
Weighted-Average Exercise Price, Exercised, Per Share | $16.40 |
Weighted-Average Exercise Price, Cancelled, Per Share | $0 |
Weighted-Average Exercise Price, Options Outstanding end of period, Per Share | $9.78 |
Weighted-Average Exercise Price, Options exercisable, end of period, Per Share | $10.46 |
Weighted Average Remaining Term, Outstanding, Ending balance (in years) | 3 years 2 months 19 days |
Weighted Average Remaining Term, Options exercisable (in years) | 2 years 7 months 21 days |
Aggregate Intrinsic value, Outstanding, Ending balance | $11,860,900 |
Aggregate Intrinsic value, Options exercisable | $8,052,000 |
StockBased_Compensation_Schedu1
Stock-Based Compensation - Schedule of Share-Based Compensation, Restricted Stock Award Activity (Detail) (Restricted Stock [Member], USD $) | 3 Months Ended |
Nov. 30, 2014 | |
Restricted Stock [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Shares, Non-vested at August 31, 2014 | 173,060 |
Shares, Granted | 0 |
Shares, Vested | 0 |
Shares, Cancelled | -500 |
Shares, Non-vested at November 30, 2014 | 172,560 |
Weighted-Average Grant-Date Fair Value, Beginning balance (in USD per share) | $12.64 |
Weighted-Average Grant-Date Fair Value, Granted (in USD per share) | $0 |
Weighted-Average Grant-Date Fair Value, Vested (in USD per share) | $0 |
Weighted-Average Grant-Date Fair Value, Cancelled (in USD per share) | $12.68 |
Weighted-Average Grant-Date Fair Value, Ending balance (in USD per share) | $12.64 |
StockBased_Compensation_Schedu2
Stock-Based Compensation - Schedule of Employee Service Share-Based Compensation, Allocation of Recognized Period Costs (Detail) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Nov. 30, 2014 | Nov. 30, 2013 |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Total stock-based compensation expense | $504 | $249 |
Income tax benefit | -194 | -95 |
Total stock-based compensation expense, net of tax | 310 | 154 |
Cost of Sales [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Total stock-based compensation expense | 17 | |
Operating Expense [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Total stock-based compensation expense | 477 | 249 |
Research and Development Expense [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Total stock-based compensation expense | $10 |
Pension_and_PostRetirement_Ben2
Pension and Post-Retirement Benefit Plans - Components of Net Periodic Benefit Costs (Detail) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Nov. 30, 2014 | Nov. 30, 2013 |
Defined Benefit Pension Plans [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Service cost | $255 | $438 |
Interest cost | 672 | 735 |
Expected return on plan assets | -966 | -813 |
Amortization of prior service cost | 58 | 58 |
Amortization of actuarial losses | 23 | 131 |
Net periodic benefit cost | 42 | 549 |
Post-retirement Health Care Plans [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Service cost | 21 | 28 |
Interest cost | 210 | 222 |
Amortization of prior service cost | -1 | -38 |
Amortization of actuarial losses | 0 | 0 |
Net periodic benefit cost | $230 | $212 |
Fair_Value_Measurements_and_De2
Fair Value Measurements and Derivative Instruments - Fair Values of Company's Derivative Instruments (Detail) (Commodity Contract [Member], USD $) | Nov. 30, 2014 | Aug. 31, 2014 |
In Thousands, unless otherwise specified | ||
Derivative [Line Items] | ||
Commodity derivatives | ($1,678) | ($1,787) |
Other Current Assets [Member] | ||
Derivative [Line Items] | ||
Commodity derivatives | -1,678 | -1,787 |
Level 1 [Member] | Other Current Assets [Member] | ||
Derivative [Line Items] | ||
Commodity derivatives | -1,678 | -1,787 |
Level 2 [Member] | Other Current Assets [Member] | ||
Derivative [Line Items] | ||
Commodity derivatives | 0 | 0 |
Level 3 [Member] | Other Current Assets [Member] | ||
Derivative [Line Items] | ||
Commodity derivatives | $0 | $0 |
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 $) | Nov. 30, 2014 | Aug. 31, 2014 |
In Thousands, unless otherwise specified | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Gross Amounts of Recognized Assets | $48 | $413 |
Gross Liabilities Offset in the Balance Sheets | -1,726 | -2,200 |
Commodity Contract [Member] | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Gross Amounts of Recognized Assets | 48 | 413 |
Gross Liabilities Offset in the Balance Sheets | -1,726 | -2,200 |
Net Amount of Assets (Liabilities) | -1,678 | -1,787 |
Cash Collateral on Deposit with Counterparty | 3,192 | 3,490 |
Net Fair Value as Recorded in Balance Sheets | $1,514 | $1,703 |
Fair_Value_Measurements_and_De4
Fair Value Measurements and Derivative Instruments - Additional Information (Detail) (Commodity Contract [Member], USD $) | 3 Months Ended | 12 Months Ended |
In Millions, unless otherwise specified | Nov. 30, 2014 | Aug. 31, 2014 |
Commodity Contract [Member] | ||
Fair Value, Option, Quantitative Disclosures [Line Items] | ||
Pretax losses continued to be deferred in Accumulated other comprehensive income (loss) | $0.10 | $2.10 |
Deferred gain (loss), net of tax, recorded in other comprehensive income | $0.30 |
Fair_Value_Measurements_and_De5
Fair Value Measurements and Derivative Instruments - Outstanding Futures Contracts (Detail) (Designated as Hedging Instrument [Member], Commodity Contract [Member]) | Nov. 30, 2014 |
bu | |
Corn Futures [Member] | |
Derivative [Line Items] | |
Outstanding futures contracts | 4,060,000 |
Ethanol Futures [Member] | |
Derivative [Line Items] | |
Outstanding futures contracts | 13,650,000 |
Fair_Value_Measurements_and_De6
Fair Value Measurements and Derivative Instruments - Fair Value of Company's Derivatives by Contract Type (Detail) (USD $) | Nov. 30, 2014 | Aug. 31, 2014 |
In Thousands, unless otherwise specified | ||
Derivatives, Fair Value [Line Items] | ||
Assets Fair Value | $48 | $413 |
Liabilities Fair Value | 1,726 | 2,200 |
Commodity Contract [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Assets Fair Value | 48 | 413 |
Liabilities Fair Value | 1,726 | 2,200 |
Commodity Contract [Member] | Corn Futures [Member] | Cash Flow Hedges [Member] | Designated as Hedging Instrument [Member] | Other Current Assets [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Assets Fair Value | 48 | |
Liabilities Fair Value | 84 | 320 |
Commodity Contract [Member] | Corn Futures [Member] | Fair Value Hedges [Member] | Designated as Hedging Instrument [Member] | Other Current Assets [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Assets Fair Value | 413 | |
Liabilities Fair Value | 5 | |
Commodity Contract [Member] | Ethanol Futures [Member] | Cash Flow Hedges [Member] | Designated as Hedging Instrument [Member] | Other Current Assets [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Liabilities Fair Value | $1,637 | $1,880 |
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 | |
In Thousands, unless otherwise specified | Nov. 30, 2014 | Nov. 30, 2013 |
Designated as Hedging Instrument [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Amount of Gain (Loss) Recognized in OCI | $257 | ($1,963) |
Amount of Gain (Loss) Reclassified from AOCI into Income | -2,509 | -1,980 |
Amount of Gain (Loss) Recognized in Income | 458 | -2,595 |
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 | -2,048 | |
Amount of Gain (Loss) Reclassified from AOCI into Income | -2,030 | -2,512 |
Amount of Gain (Loss) Recognized in Income | 815 | -1,011 |
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 | 257 | 85 |
Amount of Gain (Loss) Reclassified from AOCI into Income | -479 | 532 |
Amount of Gain (Loss) Recognized in Income | -357 | -1,584 |
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 | 5 | |
Derivative Not Designated as Hedging Instruments [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Amount of Gain (Loss) Recognized in Income | 53 | |
Derivative Not Designated as Hedging Instruments [Member] | Natural Gas Futures [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Amount of Gain (Loss) Recognized in Income | 33 | |
Derivative Not Designated as Hedging Instruments [Member] | Natural Gas Options [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Amount of Gain (Loss) Recognized in Income | $20 |
Income_Taxes_Additional_Inform
Income Taxes - Additional Information (Detail) (USD $) | 3 Months Ended | |
Nov. 30, 2014 | Nov. 30, 2013 | |
Tax Credit Carryforward [Line Items] | ||
Effective tax rate | 37.90% | 41.60% |
Net deferred tax assets | $300,000 | |
Increase in unrecognized tax benefits due to statute expirations | 35,000 | |
Total amount of gross unrecognized tax benefits, if recognized that would impact effective tax rate | 500,000 | |
Accrued interest and penalties included in long-term tax liability | 100,000 | |
Open tax year | 2010 | |
State Tax Credits [Member] | ||
Tax Credit Carryforward [Line Items] | ||
Valuation allowance | $99,000 |
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 | |
In Thousands, unless otherwise specified | Nov. 30, 2014 | Nov. 30, 2013 |
Numerator: | ||
Net income | $2,134 | $488 |
Less: Allocation to participating securities | -29 | -1 |
Net income applicable to common shares | $2,105 | $487 |
Denominator: | ||
Weighted average common shares outstanding, basic | 12,583 | 12,473 |
Dilutive stock options and awards | 457 | 368 |
Weighted average common shares outstanding, diluted | 13,040 | 12,841 |
Earnings_Per_Share_Additional_
Earnings Per Share - Additional Information (Detail) (Stock Options [Member]) | 3 Months Ended | |
Nov. 30, 2014 | Nov. 30, 2013 | |
Stock Options [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive weighted-average restricted stock awards/options excluded from the calculation of diluted earnings (loss) per share | 455,581 | 551,584 |
Segment_Reporting_Additional_I
Segment Reporting - Additional Information (Detail) | 3 Months Ended |
Nov. 30, 2014 | |
Segment | |
Segment Reporting [Abstract] | |
Number of segments | 2 |
Segment_Reporting_Segment_Wide
Segment Reporting - Segment Wide Reporting Information (Detail) (USD $) | 3 Months Ended | ||
In Thousands, unless otherwise specified | Nov. 30, 2014 | Nov. 30, 2013 | Aug. 31, 2014 |
Segment Reporting Information [Line Items] | |||
Sales | $103,636 | $109,251 | |
Income (loss) from operations | 4,410 | 1,641 | |
Total assets | 241,439 | 239,190 | |
Industrial Ingredients [Member] | |||
Segment Reporting Information [Line Items] | |||
Sales | 69,474 | 80,600 | |
Food Ingredients [Member] | |||
Segment Reporting Information [Line Items] | |||
Sales | 34,162 | 28,651 | |
Industrial Starch [Member] | Industrial Ingredients [Member] | |||
Segment Reporting Information [Line Items] | |||
Sales | 35,109 | 43,620 | |
Ethanol [Member] | Industrial Ingredients [Member] | |||
Segment Reporting Information [Line Items] | |||
Sales | 22,046 | 22,021 | |
By-products [Member] | Industrial Ingredients [Member] | |||
Segment Reporting Information [Line Items] | |||
Sales | 12,319 | 14,959 | |
Operating Segments [Member] | Industrial Ingredients [Member] | |||
Segment Reporting Information [Line Items] | |||
Income (loss) from operations | 2,983 | -2,043 | |
Total assets | 138,624 | 135,973 | |
Operating Segments [Member] | Food Ingredients [Member] | |||
Segment Reporting Information [Line Items] | |||
Income (loss) from operations | 6,893 | 6,530 | |
Total assets | 90,910 | 89,781 | |
Corporate, Non-Segment [Member] | |||
Segment Reporting Information [Line Items] | |||
Income (loss) from operations | -5,466 | -2,846 | |
Total assets | $11,905 | $13,436 |
Legal_Proceedings_and_Continge1
Legal Proceedings and Contingencies - Additional Information (Detail) | 0 Months Ended | |
Apr. 30, 2012 | Dec. 23, 2014 | |
Patents | Patents | |
Pet Product Patent Litigation [Member] | ||
Loss Contingencies [Line Items] | ||
Number of patents under allegation of patent infringement | 1 | |
Resistant Starch Patent Litigation [Member] | ||
Loss Contingencies [Line Items] | ||
Number of patents under allegation of patent infringement | 1 |
Merger_Agreement_Additional_In
Merger Agreement - Additional Information (Detail) (Ingredion Incorporated [Member], USD $) | 0 Months Ended |
In Millions, except Per Share data, unless otherwise specified | Oct. 14, 2014 |
Ingredion Incorporated [Member] | |
Merger Related Items [Line Items] | |
Purchase money | $340 |
Proposed merger conversion of common shares into right to receive cash amount | $19 |
Merger agreement termination fee | 7.6 |
Expenses incurred for merger agreement | $2 |