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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): MAY 3, 1999
IMPERIAL SUGAR COMPANY
(Exact name of registrant as specified in its charter)
TEXAS 1-10307 74-0704500
(State or other jurisdiction (Commission File Number) (IRS Employer
of incorporation) Identification No.)
ONE IMPERIAL SQUARE
P. O. BOX 9
SUGAR LAND, TEXAS 77487
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (281)491-9181
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ITEM 5. OTHER EVENTS
The information set forth in the press release of Imperial Sugar
Company (the "Company") dated May 3, 1999, included herewith as Exhibit 99.1, is
incorporated by reference in this Current Report on Form 8-K.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(c) Exhibits
99.1 Press release issued by the Company dated May 3, 1999.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
IMPERIAL SUGAR COMPANY
Date: May 3, 1999 By: /s/ H.P. Mechler
_________________________________
Name: H.P. Mechler
Its: Vice President - Accounting
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EXHIBIT 99.1
[Imperial Sugar Company Letterhead]
Investor Relations:
Morgen-Walke Associates
Gordon McCoun, Eric Boyriven,
Andra Fogel
Media Contact: Eileen King
(212) 850-5600
IMPERIAL SUGAR COMPANY REPORTS SECOND QUARTER RESULTS
SUGAR LAND, TX, May 3, 1999 -- Imperial Sugar Company (AMEX:IHK),
formerly Imperial Holly Corporation, today announced results for the fiscal 1999
second quarter ended March 31, 1999.
For the fiscal 1999 second quarter, the Company reported a net loss before
non-recurring charges of $7,703,000, or $0.24 per diluted share, compared to a
loss of $5,330,000 or $0.20 per diluted share before non-recurring charges in
the comparable quarter a year ago. During the second quarter of 1999, the
Company recorded a non-recurring, non-cash charge of $16.7 million, or $0.34 per
diluted share after tax, to write off its investment in a limited partnership.
Included in the year ago period were non-recurring charges of $18.3 million, or
$0.34 per diluted share after tax, primarily in connection with the closing of
the Company's Hereford, Texas sugar beet factory and to record a loss the
Company incurred in meeting its contractual sales obligations as a result of
poor weather conditions at its Northern California factories. Including
these charges, the Company reported net losses in the second quarters of fiscal
1999 and fiscal 1998 of $18,559,000, or $0.58 per diluted share, and
$17,217,000, or $0.64 per diluted share, respectively. The number of shares
outstanding for the 1999 fiscal second quarter rose to 32.2 million from 27.0
million during the same period of 1998.
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Fiscal 1999 second quarter revenues increased to $429.0 million from $415.0
million, reflecting the inclusion of the recently acquired Diamond Crystal and
higher industrial sugar sales prices. Partially offsetting these factors were
decreases in sugar volumes and lower prices on sales of private label grocery
products.
Operating income increased to $3.4 million compared to operating income of
$2.1 million, before non-recurring charges, reported in the same period a year
ago. The increase in operating income was the result of the contribution from
Diamond and operating synergies realized by the consolidation of the Savannah
Foods operations. These benefits were offset by costs incurred in processing
sugar beets that were stored in warmer than normal temperatures which adversely
affected sugar recovery in the Michigan and Rocky Mountain growing areas.
James C. Kempner, Chief Executive Officer, commented, "We are extremely
disappointed with the Company's results for the quarter. While the synergies
realized were in line with previously announced targets, our progress in this
regard was masked by the weather-related losses at our beet processing
facilities. Fortunately, the financial effects of these events are restricted
to the quarter, and will not be carried over into subsequent quarters.
Additionally, in future quarters the Diamond synergies should be realized."
The non-recurring charge in the fiscal 1999 second quarter reflects the
Company's write- off of its investment in Pacific Northwest Sugar Company, a
partnership in which a subsidiary of Imperial Sugar was a 43% limited partner.
In connection with the restructuring of the partnership's debt, the Company
transferred its limited partnership interest to an affiliate of the general
partner. An agreement dated April 26, 1999 terminated the Company's involvement
with the project and includes mutual releases among the parties. As a result of
the agreement, the general partner becomes the sole owner of the partnership,
which constructed, owns and operates a beet sugar processing facility in Moses
Lake, Washington. The facility experienced substantial operating losses in its
first year of operation due principally to critical equipment failures,
exacerbated by warmer than normal weather during the processing campaign.
For the 1999 six month period, the Company reported a net loss of
$16,194,000, or $0.52 per diluted share on revenues of $900,758,000, versus a
net loss before extraordinary items of $17,359,000, or $0.82 per diluted share
on revenues of $849,834,000. The number of shares outstanding during the fiscal
1999 six month period was 31.2 million compared to 21.3 million shares
outstanding during the same period in 1998.
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Operating income before non-recurring charges for the first six months of
1999 was $22.1 million, a substantial increase over the $13.6 million reported
during the same period of 1998. Results for the six month period of 1998
include the acquisition of Savannah Foods since October 17, 1997.
Mr. Kempner concluded, "We have moved aggressively to institute price
increases on our private label products, to follow on those previously announced
on our industrial products. In addition, we are on schedule to achieve our
stated objective of $20 million in additional operating synergies for fiscal
1999. The operating synergies and higher prices combined with successful
campaign starts in our California sugarbeet factories give us grounds for an
optimistic outlook for financial results for the remainder of the fiscal year.
Additionally, a preliminary look at our sugarbeet operations for fiscal 2000
shows full acreage at each of our California and Michigan factories and at
Sidney, Montana, with substantial acreage increases as well at our Torrington,
Wyoming and Worland, Wyoming factories."
At its meeting on April 30th, the Company's Board of Directors also
declared a dividend of $0.03 per share, payable May 20, 1999 to shareholders of
record as of May 10, 1999.
Imperial Sugar Company is the largest processor and marketer of refined
sugar in the United States and a major food service manufacturer and
distributor. The Company markets its products nationally under the Imperial(TM),
Dixie Crystals(TM), Spreckels(TM), Pioneer(TM), Holly(TM), Diamond Crystal(TM)
and Wholesome Foods(TM) brands.
Statements regarding future market prices, operating results, synergies,
sugarbeet acreage and other statements which are not historical facts contained
in this release are forward-looking statements that involve certain risks,
uncertainties and assumptions. These include, but are not limited to, market
factors, the effect of weather and economic conditions, farm and trade policy,
the ability of the Company to realize cost savings from acquisitions, the
available supply of sugar, available quantity and quality of sugar beets and
other factors detailed in the Company's Securities and Exchange Commission
filings. Should one or more of these risks or uncertainties materialize, or
should underlying assumptions prove incorrect, actual outcomes may vary
materially from those indicated.
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IMPERIAL SUGAR COMPANY AND SUBSIDIARIES
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
March 31, March 31,
----------------------- ----------------------
In Thousands of Dollars 1999 1998 1999 1998
---------- ---------- --------- ----------
<S> <C> <C> <C> <C>
NET SALES $ 428,997 $ 414,967 $ 900,758 $ 849,834
---------- ---------- --------- ----------
COSTS AND EXPENSES:
Cost of Sales 395,635 383,835 819,617 779,571
Selling, General & Administrative 17,465 16,718 33,957 34,208
Asset impairment and other charges -- 18,287 -- 18,287
Depreciation & Amortization 12,496 12,333 25,060 22,421
---------- ---------- --------- ----------
Total 425,596 431,173 878,634 854,487
---------- ---------- --------- ----------
Operating Income 3,401 (16,206) 22,124 (4,653)
Interest Expense (16,350) (14,598) (30,467) (22,978)
Securities Gains (Loss) 2,292 2,069 2,292 2,179
Loss on Investment in Partnership (16,706) -- (16,706) --
Other Income (Expense) - Net 398 2,183 814 2,758
---------- ---------- --------- ----------
Income Before Income Tax (26,965) (26,552) (21,943) (22,694)
Provision for Income Taxes (8,406) (9,335) (5,749) (7,101)
Minority Interest in Income of Savannah -- -- -- 1,766
---------- ---------- --------- ----------
Income (Loss) Before Extraordinary Item (18,559) (17,217) (16,194) (17,359)
Extraordinary Item - Net of Tax -- -- -- (1,999)
---------- ---------- --------- ----------
Net Income (Loss) $ (18,559) $ (17,217) $ (16,194) $ (19,358)
========== ========== ========= ==========
Earnings (Loss) Per Share of Common Stock:
Basic:
Before Extraordinary Item $ (0.58) $ (0.64) $ (0.52) $ (0.82)
========== ========== ======== ==========
Net Income (Loss) $ (0.91)
==========
Diluted:
Before Extraordinary Item $ (0.58) $ (0.64) $ (0.52) $ (0.82)
========== ========== ========= ==========
Net Income (Loss) $(0.91)
==========
Weighted Average Shares Outstanding 32,138,541 27,028,990 31,227,182 21,287,413
========== ========== ========== ==========
</TABLE>
Note: Includes the results of Savannah Foods and Industries, Inc. from
October 17, 1997 and Diamond Crystal from November 2, 1998
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IMPERIAL SUGAR COMPANY AND SUBSIDIARIES
FINANCIAL POSITION
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<TABLE>
<CAPTION>
March 31, September 30, March 31,
---------- ------------- ---------
In Thousands of Dollars 1999 1998 1998
---------- ------------- ---------
<S> <C> <C> <C>
Current Assets $ 530,334 $ 446,289 $ 506,951
Plant, Property & Equipment 417,280 398,193 398,998
Goodwill and other Intangibles 401,747 279,410 283,908
Other 31,012 55,908 70,797
---------- ---------- ----------
Total $1,380,373 $1,179,800 $1,260,654
========== ========== ==========
Current Liabilities $ 247,857 $ 186,060 $ 233,569
Long-term Debt 632,142 525,893 537,391
Other 119,659 114,940 144,097
Shareholders' Equity 380,715 352,907 345,597
---------- ---------- ----------
Total $1,380,373 $1,179,800 $1,260,654
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</TABLE>
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