Exhibit 99.1
-------------------------------------------------------------------------
AMERICAN ITALIAN PASTA COMPANY |NEWS
|RELEASE
Contact:
Paul R. Geist
EVP & Chief Financial Officer
816-584-5228
pgeist@aipc.com
|  |
For Immediate Release
AMERICAN ITALIAN PASTA COMPANY REPORTS FIRST QUARTER 2009 RESULTS
TOTAL REVENUE OF $171 MILLION; OPERATING INCOME OF $32 MILLION
QUARTERLY EPS OF $1.23 PER DILUTED SHARE
KANSAS CITY, MO., February 11, 2009 -- American Italian Pasta Company
(NASDAQ:AIPC), the largest producer of dry pasta in North America, today
announced results for its first quarter of fiscal year 2009, which ended January
2, 2009.
The first quarter of fiscal year 2009 contained 14 weeks, one week longer than
the Company's comparative first quarter of fiscal year 2008. The Company reports
on a 52/53 week basis with the extra week occurring approximately every six
years. Fiscal year 2009 will be a 53-week fiscal year and ends on October 2,
2009. Fiscal year 2008 was a 52-week year that ended on September 26, 2008.
Thus, all year-over-year comparisons reflect a 14-week first quarter for fiscal
year 2009 and a 13-week first quarter in fiscal year 2008.
FIRST QUARTER FINANCIAL HIGHLIGHTS
Revenues for the 14-week first quarter increased $59.5 million, or 53%, to
$171.2 million, led by a 56% increase in the retail market and a 43% increase in
the institutional market. Overall volume increased 13%. Net income for the
14-week first quarter increased $24.6 million to $26.0 million, or $1.23 per
diluted share, versus a net income of $1.4 million, or $0.07 per diluted share,
in the 13-week first quarter of fiscal 2008.
"Our strong first quarter results continue the trend that began in fiscal year
2007, as we continue to deliver solid growth in revenue and net income," said
Jack Kelly, president and CEO. "Our growth strategy to leverage our market
leadership in `customer brands' and focus resources on our strongest proprietary
retail brands is paying off. Under this market approach, we will continue to
look for new ways to partner with our customers to promote the nutritional and
economic value of pasta as well as its versatility as a center-of-the-plate
staple. While economic uncertainty and fluctuating commodity prices continue to
pose challenges, we remain confident in our strategic plan and growth prospects
going forward."
American Italian Pasta Co.,
February 11, 2009
Page 2
Operational Highlights
• Retail Revenues: Retail revenues increased $48.9 million, or 56%, to
$136.1 million for the 14-week 2009 quarter, from $87.2 million for the
13-week 2008 quarter. The increase is primarily the result of a
$39.1million, or 45%, increase related to higher average selling
prices; and a $13.6 million, or 16%, increase in volume, offset by a
$3.8 million decrease in payments received from the U.S. government
under the Continued Dumping and Subsidy Offset Act of 2000.
• Institutional Revenues: Institutional revenues increased $10.6 million,
or 43%, to $35.1 million for the 14-week first quarter of 2009, from
$24.5 million for the first quarter of 2008. The revenue increase is
primarily the result of a $8.9 million, or 36%, increase due to higher
average selling prices, and a $1.7 million, or 7%, increase due to
higher volume.
• Cost of Goods Sold: Cost of goods sold increased $35.0 million, or 40%,
to $122.4 million for the 14-week first quarter of 2009, from $87.4
million for the first quarter of 2008. As a percentage of revenues,
cost of goods for the first quarter of 2009 decreased to 72%, from 78%
for the comparable prior period. The Company experienced higher
commodity prices during the first quarter of 2009 versus the first
quarter of 2008, specifically in the price of durum, additives and
packaging costs.
• Gross profit: Gross profit increased $24.5 million to $48.8 million for
the 14-week first quarter of 2009, from $24.3 million for the first
quarter of 2008. Gross profit, as a percentage of revenues, increased
to 28% during the first quarter, compared to 22% during the first
quarter of 2008.
• Selling and marketing expense: Selling and marketing expense increased
$1.4 million, or 23%, to $7.4 million for the 14-week first quarter of
2009, from $6.0 million for the first quarter of 2008. Selling and
marketing expense, as a percentage of revenue, decreased to 4% for the
first quarter of 2009, from 5% for the first quarter of 2008. The
increase in total selling and marketing expense is primarily due to
higher broker expense, brand amortization and stock based compensation.
• General and administrative expense: General and administrative expense
decreased 15% to $8.7 million for the 14-week first quarter of 2009,
from $10.2 million for the first quarter of 2008. General and
administrative expenses, as a percentage of revenues, decreased to 5%
for the first quarter of 2009, from 9% for the first quarter of 2008.
The decrease is primarily due to lower total professional fees
partially offset by higher compensation.
• Operating profit: Operating profit for the 14-week first quarter of
2009 was $32.5 million, an increase of $24.3 million, as compared to
$8.2 million for the first quarter of 2008. Operating profit increased,
as a percentage of revenues, to 19% for the first quarter of 2009, from
7% for the first quarter of 2008.
ABOUT AIPC
Founded in 1988 and based in Kansas City, Missouri, American Italian Pasta
Company is the largest producer of dry pasta in North America. The Company has
four plants that are located in Excelsior Springs, Missouri; Columbia, South
Carolina; Tolleson, Arizona and Verolanuova, Italy. The Company has
approximately 600 employees located in the United States and Italy. For more
information, visit www.aipc.com.
American Italian Pasta Co.,
February 11, 2009
Page 3
When used in this release, the words "anticipate," "projected," "believe,"
"estimate," and "expect" and similar expressions are intended to identify
forward-looking statements, but are not the exclusive means of identifying these
statements. The statements by the Company regarding the pasta market, cost of
goods, and financial performance are forward looking. There are numerous risks
and uncertainties that could cause actual future results to differ materially
from those anticipated by such forward-looking statements. The risks and
uncertainties could be caused by a number of factors, including, but not limited
to: (1) our dependence on a limited number of customers for a substantial
portion of our revenue: (2) our ability to obtain necessary raw materials and
minimize fluctuations in raw material prices: (3) the potential adverse impact
on revenue and margins of the highly competitive environment in which we
operate; (4) our reliance exclusively on a single product category: (5) our
ability to cost-effectively transport our products; (6) consumption trends for
our product; (7) the status of production capacity in the U.S. and the level of
imports from foreign producers; (8) our ability to sustain quality and service
requirements for our customers; and (9) our ability to attract and retain key
personnel. For a discussion of factors that could cause actual results to
materially differ from those anticipated, see the risk factors set forth in item
1A of the Company's Form 10-K for the fiscal year ended September 26, 2008. The
Company will not update any forward-looking statements in this press release to
reflect future events.
# # #
American Italian Pasta Co.,
February 11, 2009
Page 4
AMERICAN ITALIAN PASTA COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Unaudited
(in thousands, except per share amounts)
Quarter Ended
------------------------------------------------
January 2, 2009 December 28, 2007
(Fourteen Weeks) (Thirteen Weeks)
Revenues $ 171,206 $ 111,723
Cost of goods sold 122,362 87,388
------------ -----------
Gross profit 48,844 24,335
Selling and marketing expense 7,364 6,020
General and administrative expense 8,653 10,160
Losses related to long-lived assets 347 -
------------ -----------
Operating profit 32,480 8,155
Interest expense, net 5,878 7,088
Other (income) expense, net 95 (17)
------------ -----------
Income before income taxes 26,507 1,084
Income tax expense (benefit) 479 (310)
------------ -----------
Net income $ 26,028 $ 1,394
============ ===========
Net income per common share (basic) $ 1.28 $ 0.07
Weighted-average common shares outstanding (basic) 20,257 18,727
============ ===========
Net income per common share (diluted) $ 1.23 $ 0.07
Weighted-average common shares outstanding (diluted) 21,078 18,938
============ ===========
American Italian Pasta Co.,
February 11, 2009
Page 5
AMERICAN ITALIAN PASTA COMPANY
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except share amounts)
January 2, 2009 September 26, 2008
ASSETS
Current assets:
Cash and cash equivalents $ 42,316 $ 38,623
Short-term investments 1,459 2,370
Trade and other receivables, net 45,397 49,197
Inventories 59,489 66,026
Other current assets 9,363 5,819
Deferred income taxes 1,251 2,126
---------- ----------
Total current assets 159,275 164,161
Property, plant and equipment, net 299,022 303,503
Brands 79,356 79,769
Other assets 4,952 5,591
---------- ----------
Total assets $ 542,605 $ 553,024
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 30,162 $ 29,541
Accrued expenses 24,112 37,357
Short term debt and current maturities of long term debt 1,752 24,913
---------- ----------
Total current liabilities 56,026 91,811
Long term debt, less current maturities 217,000 217,000
Income taxes payable 1,810 1,783
Deferred income taxes 32,771 34,054
Other long term liabilities 3,176 2,405
---------- ----------
Total liabilities 310,783 347,053
Commitments and contingencies
Stockholders' equity:
Preferred stock, $.001 par value:
Authorized shares - 10,000,000 - -
Issued and outstanding shares - none
Class A common stock, $.001 par value:
Authorized shares - 75,000,000 23 22
Issued and outstanding shares - 22,561,601 and 20,364,122, respectively, at
January 2, 2009; 22,454,145 and 20,259,060, respectively, at September 26,
2008
Class B common stock, par value $.001
Authorized shares - 25,000,000;
Issued and outstanding - none - -
Additional paid-in capital 262,886 261,772
Treasury stock, 2,197,479 shares at January 2, 2009 and (52,115) (52,076)
2,195,085 shares at September 26, 2008, at cost
Accumulated other comprehensive income 15,475 16,728
Retained earnings (accumulated deficit) 5,553 (20,475)
---------- ----------
Total stockholders' equity 231,822 205,971
---------- ----------
Total liabilities and stockholders' equity $ 542,605 $ 553,024
========== ==========
