Ridley reports financial results

Ridley reports financial results

- Revenues increase 7.4%.

- Product mix shifting to higher-value-added products.

- Canadian Feed Operations segment discontinued.

RIDLEY Inc. recently reported financial results for its second quarter and six months ended Dec. 31, 2012.

For the quarter, Ridley's earnings before interest, taxes, depreciation and amortization (EBITDA) from continuing operations were $10.9 million, compared to $7.9 million last year (Table 1). Net income from continuing operations for the period was $5.9 million, compared to $3.8 million last year, and consolidated net income for the period was $6.6 million, compared to $4.0 million last year.

For the first six months, Ridley reported EBITDA from continuing operations of $20.9 million, compared to $12.6 million for the same period last year. Net income from continuing operations for the first half was $11.2 million, compared to $5.3 million last year, and consolidated net income was $11.8 million, compared to $4.7 million last year.

Ridley said revenues from continuing operations grew 7.4% to $157.1 million in the second quarter this year, primarily as a result of higher raw material prices relative to the same period last year and a continuing shift in product mix toward higher-value-added products.

Overall tonnage volumes were down 1% from the same period last year as gains in feed supplements and blocks were offset by lower volumes of complete feeds, the company said.

Sales volume in the second quarter continued to benefit from strong demand for feed supplements in the beef and dairy sectors due to drought in the U.S.

Gross profits from continuing operations increased 17.4% in the second quarter to $21.4 million, partly from growth in volumes of higher-value-added products and lower production costs but mainly due to increased average unit margins relative to last year, when feed ingredient prices were declining, Ridley said.

U.S. Feed Operations (USFO) and Ridley Block Operations (RBO) produced strong results in the second quarter on increased volumes of feed supplements and blocks in the beef cattle sector and improved unit margins from rising commodity prices and a favorable product mix.

USFO operating income increased by $1.7 million to $3.5 million in the quarter, while RBO operating income increased by $1.4 million to $6.1 million (Table 2). Ridley Feed Ingredients (RFI) reported improved gross profit in the second quarter as lower manufacturing overheads offset reduced volumes and the negative effect on unit margins of declining market prices for vitamins and other micro feed ingredients.

On Nov. 28, 2012, Ridley acquired substantially all of the assets and assumed certain liabilities of Stockade Brands Inc., a privately held manufacturer of blocks, loose minerals and dried molasses products. The Stockade business will be integrated and reported within the RBO segment.

On Nov. 30, 2012, Ridley and Masterfeeds Inc. completed the merger of their respective commercial livestock and poultry feed and nutrition businesses in Canada into a new limited partnership called Masterfeeds LP. Starting in the second quarter of fiscal 2013, Ridley's operations in Canada, previously reported as the Canadian Feed Operations segment, are now reported as discontinued operations.

 

Outlook

Ridley noted that since 2008, high feed ingredient prices have limited herd and flock expansion. The potential for continuing volatility in feed ingredient prices will remain one of the more significant drivers for Ridley's results.

Ridley said its business will be sensitive to any changes in the economic environment for producers and herd or flock populations. Ridley's growing lifestyle markets and higher-value-added products tend to have more stable market demand, the company noted.

In the face of these external uncertainties, the company said it continues to improve its cost competitiveness through a number of initiatives to improve operating efficiencies, including adding manufacturing automation, using lean manufacturing techniques and better utilizing information technology.

Ridley, headquartered in Mankato, Minn., is one of North America's leading commercial animal nutrition companies. Ridley employs more than 700 people in the manufacture, sale and marketing of a full range of animal nutrition products.

 

1. Ridley results, million $

 

-Second quarter-

-Six months-

2012

2011

2012

2011

Revenue

157.1

146.3

300.1

273.2

Gross profit

21.4

18.2

41.1

33.1

Operating income

9.2

6.0

17.5

8.7

Net income

5.9

3.8

11.2

5.3

EBITDA

10.9

7.9

20.9

12.6

Earnings per share ($)

0.46

0.30

0.88

0.42

 

2. Ridley segment operating income, million $

-Second quarter-

-Six months-

2012

2011

2012

2011

USFO

3.5

1.8

6.9

2.2

RFI

0.4

0.3

1.1

0.9

RBO

6.1

4.7

10.8

7.0

Corporate

(0.8)

(0.7)

(1.4)

(1.5)

Consolidated operating income from continuing operations

9.2

6.0

17.5

8.7

Note: Continuing operations excluded the results of Ridley's feed manufacturing operations in Canada previously reported as the Canadian Feed Operations segment.

 

Volume:85 Issue:09

Hide comments

Comments

  • Allowed HTML tags: <em> <strong> <blockquote> <br> <p>

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.
Publish