Imperial Sugar 3Q Profits Slide

NEW YORK - Jul 31/07 - SNS -- Imperial Sugar Company reported net income of $7.603 million on sales of $216.4 million for the third quarter ending June 30, compared to a net of $15.1 million on sales of $231.3 million during the same three month period last year.

This lifted net income for the first nine months of the current fiscal year to $32 million on sales of $656 million, compared to a net of $34.3 million on sales of $706.5 million the first three quarters of the previous fiscal year.

The Company also announced that its $100 million senior secured revolving credit agreement led by Bank of America, N.A. has been amended to extend its maturity to December 31, 2011, and improve pricing on revolving credit loans. All other major terms of the agreement, which was scheduled to expire in December 2008, remain unchanged.

Discussing the quarterly results, Imperial Sugar said lower domestic raw sugar prices and lower natural gas costs offset in part the effect of lower sugar prices. The resulting gross margin as a percentage of sales decreased to 10.3% for the third quarter compared to 15.4% in the prior year quarter.

Arbitration proceedings concerning the sale of a subsidiary in 2005 were concluded during the current quarter. The Company recognized a $6.8 million gain related to its breach of contract claim under a five year supply option agreement negotiated in connection with the sale. Additionally, the Company recorded a $3.8 million charge in discontinued operations for indemnity claims by the purchaser of that business.

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