Kansas City, Missouri-based American Italian Pasta Company (AIPC), the largest and fastest growing producer and marketer of dry pasta in the US, has announced record results for its fiscal Q2 2002, ended 29 March 2002.
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Q2 revenues increased 26% to US$94.8m, led by strong retail revenue growth of 33%. Gross margin expanded to 35.6%, up from 31.2% a year ago, primarily as a result of increased operating efficiencies and the higher margins associated with the recent brand acquisitions. Marketing and selling expenses increased by 83%, due in large part to the higher marketing support associated with selling branded products. Operating profit increased 28% to US$17.7m from US$13.8m year on year.
Operating profit margin was 18.6%, a 20 basis point improvement over the prior year. Net income increased 31% to US$10.1m, or US$0.54/diluted share, year on year. The 29% increase in diluted earnings per share to US$0.54 slightly exceeded the First Call Consensus estimate of US$0.53. As previously reported by the company, about US$.02 in EPS for the quarter is attributable to the net effect of accounting for a December 2001 payment from the US government under the “Continued Dumping and Subsidy Offset Act of 2000”,
“The Q2 results reflect continued, excellent progress for AIPC,” said Timothy S. Webster, president and CEO, “We had outstanding sales results driven by unit volume increases in all major business units. Total unit volume growth exceeded 19%, including retail growth of 21% and institutional growth of 15%. Our unit volume growth in retail was led by private label which was up 17% compared to a very strong quarter a year ago, and the additional volume from the brands acquired from Borden Foods last July, but mitigated by some continued softness in the Mueller’s line.
“However, consumer purchases of the Mueller’s brand showed significant increases during March, reflecting the best market performance by the line since the November 2000 acquisition. We are still implementing a series of marketing initiatives to increase unit sales growth in the Mueller’s line and look forward to a stronger performance in the H2.”
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By GlobalDataWebster continued, “We maintained the excellent momentum behind our cost reduction and efficiency programs. Our plants ran extremely well and our logistics strategies are contributing to lower cost and better service. For example, our order fill rate for the quarter again exceeded 99%.”
Revenues for the H1 were up 32% to US$186.8m compared with US$141.4m last year. Gross margin for the period improved to 35.6% from 30% for the year ago period. Excluding the impact of acquisition expenses last year, operating profit for the H1 grew by about 34% to US$33.7m. Net income increased by 34% to US$18.9m, or US$1.04 per diluted share, compared with US$14.1m, or US$0.79 per diluted share, last year before accounting for acquisition expenses.
Chairman Horst W. Schroeder commented: “The H1 was outstanding for AIPC. We successfully integrated the brands acquired from Borden Foods, we are making progress in turning around the Mueller’s brand, we added new business with several important customers, we announced a strategic new manufacturing facility in Arizona, and we continued to make good progress in Italy. I’m looking forward to continued momentum with our management team over the balance of the year.”
