This website requires certain cookies to work and uses other cookies to help you have the best experience. By visiting this website, certain cookies have already been set, which you may delete and block. By closing this message or continuing to use our site, you agree to the use of cookies. Visit our updated privacy and cookie policy to learn more.
This Website Uses Cookies
By closing this message or continuing to use our site, you agree to our cookie policy. Learn More
This website requires certain cookies to work and uses other cookies to help you have the best experience. By visiting this website, certain cookies have already been set, which you may delete and block. By closing this message or continuing to use our site, you agree to the use of cookies. Visit our updated privacy and cookie policy to learn more.
Prepared Foods logo
search
cart
facebook twitter linkedin youtube
  • Sign In
  • Create Account
  • Sign Out
  • My Account
Prepared Foods logo
  • Home
  • Trends
    • 2020 Trends
    • 2019 Trends
    • 2018 Trends
  • Products
    • Bakery
    • Beverages
    • Breakfast, Cereals & Bars
    • Cannabis
    • Dairy
    • Meals & Sides
    • Meat, Poultry & Seafood
    • Sauces & Marinades
    • Snacks & Appetizers
    • Soups
    • Food & Beverage Product Videos
  • Ingredients
    • Phosphates & Acidulants
    • Antioxidants & Nutritionals
    • Batters, Breading & Coatings
    • Cheese, Sauces & Bases
    • Colorings
    • Dietary Fiber
    • Emulsifiers, Fat & Oils
    • Flavors, Seasonings, Spices
    • Flours, Grains, & Pasta
    • Fruits, Vegetables and Nuts
    • Gums & Starches
    • Proteins & Enzymes
    • Sweeteners
  • Formulation
    • Allergens & Intolerance
    • Gluten Free
    • Authentic & Ethnic
    • Calorie Reduction
    • Cost Reduction
    • Fat Reduction
    • Organic & Natural
    • Shelf Stability
    • Sugar & Sodium Reduction
    • Weight Management
    • Vegetarian
    • R&D Lab Tech / QA-QC / Food Safety
  • Better for You
    • Functional New Products
    • Functional Ingredients
    • Functional Benefits
  • Food Master
  • Multimedia
    • Favorite Products Poll
    • Podcasts
    • Polls
    • Videos
    • Image Galleries
    • Interactive Spotlight
  • More
    • eNewsletter Archives
    • Events
      • New Product Conference
      • Spirit of Innovation Awards
      • Industry Events
      • Webinars
    • Prepared Foods Store
    • White Papers
    • First Person Q&A
    • 19 Product Development Resources
  • Magazine
    • Current Issue
    • Archives
    • Digital Editions
  • Contact
    • Contact Us
    • Advertise
Home » 1Q Sales Increase for Innophos
Breaking News

1Q Sales Increase for Innophos

Daily News
May 3, 2011
KEYWORDS innophos / net sales / Specialty Phosphates
Reprints
No Comments
May 2/Cranbury, N.J./PRNewswire -- Innophos Holdings Inc. announced its financial results for the first quarter 2011.

Net sales for the first quarter 2011 were $198 million, a 17% increase over first quarter 2010 on 9% price and 8% volume growth with specialty phosphates and GTSP & Other both contributing strongly. 

Specialty phosphates first quarter 2011 sales of $176 million increased 12% compared to first quarter 2010 with prices and volumes each up 6%. 

GTSP & Other sales at $22 million for the 2011 quarter were $9 million above the year ago level on favorable pricing and volumes.

Net income for the first quarter 2011 was $26 million, which included a net benefit of $2 million after-tax ($0.07 per share) to update the provision for expected future claims regarding Mexican water duties.  The update included eliminating a charge for the 2005 period which is now beyond the statute of limitations. Excluding this net benefit, net income would have been $24 million for the first quarter 2011. Net income for the first quarter 2010 was $10 million.

Diluted EPS for the first quarter 2011 was $1.15 compared to $0.47 for the first quarter 2010. Excluding the net benefit mentioned above, first quarter 2011 EPS would have been $1.08.

Randy Gress, CEO of Innophos, commented on the results, "We are pleased with our first quarter results, which reflect encouraging volume and margin performance throughout our business. In particular, we delivered continued growth in our core Specialty phosphates business driven by increasing demand for higher margin food-grade products from our food and beverage customers, the successful shift in our Mexican business toward higher value offerings, and ongoing success in growing our export business.  In addition, the strength of our value proposition continues to cement our relationships with customers allowing us to take appropriate pricing actions that are effectively offsetting the impact of higher raw material costs. Cash generation by the business also continues to be strong, and based on our excellent financial position we were pleased to announce a dividend increase of almost 50% during the first quarter while maintaining our focus on investing in the growth of our business."

Gress continued, "Our continued success in shifting the mix of our business to higher-value, higher margin specialty phosphate products underscores the strategic transformation we have achieved over the last few years. Looking ahead to the remainder of 2011, we will continue to focus on delivering on the strategic objectives that underpin our profitable growth, including: manufacturing upgrades to support continued growth in high-value food, beverage and pharmaceutical end-markets; further expansion of our core products into high-growth geographies; and, continued optimization of our supply chain. We have had a strong start to the year and look forward to the remainder of 2011."  

Segment Results First Quarter 2011 versus 2010

Specialty Phosphates

Specialty phosphates sales revenue was up 12% year over year, with prices and volumes both up 6%. Mexico volume improved 28% with continued growth in exports, while U.S./Canada volume was flat, as growth in Specialty Ingredients and Food & Technical Grade PPA were offset by STPP declines. 

Operating income at $34 million was $12 million above first quarter 2010 levels and $5 million higher than fourth quarter 2010. Operating income margin was 19% for first quarter 2011 compared to 14% for the same period in 2010. As expected, margins increased 1% sequentially as price increases were achieved ahead of raw material cost increases. 

U.S./Canada

U.S./Canada Specialty phosphates sales increased 6% for first quarter 2011 compared to first quarter 2010 primarily on price increases. The business continued to record good progress on commercializing new products, as low sodium baking powders using Innophos' CAL-RISE® leavening agent are expected to be launched at major retailers in the second quarter.

Operating income at $30 million was $10 million above first quarter 2010 levels and $3 million higher sequentially. Operating income margin increased 1% sequentially to 23% for first quarter 2011 compared to 16% for the same period in 2010.

Mexico

The Specialty phosphates business in Mexico showed significant revenue improvement over first quarter 2010. Volumes increased 28% and prices were up 9% for a total revenue increase of 37%. Volume growth was driven by higher grade PPA and food grade specialty phosphates sales.

Operating income at $4 million was $3 million above first quarter 2010 levels and $2 million higher sequentially. Included in the first quarter 2011 results was $2 million of scheduled major maintenance expenses. Operating income margin increased 4% sequentially to 9% for first quarter 2011 compared to 4% for the same period in 2010.

GTSP & Other

GTSP & Other sales (primarily fertilizer co-product) increased 75% for first quarter 2011 compared to the same period in 2010. GTSP pricing improved further on a sequential basis and was up 50% year over year. Volume in 2011 was up 25% versus the year ago quarter and represented around 18% of the total anticipated for the year, a figure in line with fairly typical first quarter demand.

GTSP & Other recorded operating income of $7 million in first quarter 2011 compared to break-even in first quarter 2010. Included in the first quarter 2011 operating income was a $4 million benefit for the elimination of the 2005 portion of the expected future claims regarding Mexican water duties now beyond the statute of limitations and $1 million of scheduled major maintenance expenses. Excluding the noted Mexican water duties benefit, operating income margin was 15% for first quarter 2011, in line with expectations, compared to 1% for first quarter 2010.

Recent Trends and Outlook

Ongoing volume strength is expected to continue in the company's specialty phosphate business and management expects full year 2011 growth in net sales for Specialty phosphates to be similar to the 12% achieved in the current quarter.

Management's expectations for margins remain unchanged for specialty phosphates, with full year 2011 expected to be similar to the 2010 average of 17%. As previously noted, first quarter margins were 2% higher than full year 2011 expectations, and 1% higher sequentially, due to price increases achieved in advance of the increased cost of goods sold expected to become more evident from the 2011 second quarter. 

For GTSP & Other, further pricing improvement and stronger volumes are expected for the second quarter, leaving full year 2011 expectations for this segment, excluding the effects of Mexican water duties updates, also unchanged at around $100 million in revenue with a 15% operating income margin. Current profitability for GTSP & Other is above its historical average, assisted by current strong fertilizer market conditions.

The second quarter sequential increase in cost of goods sold is expected to be in the $6 to $8 million range, leading to a year over year increase near the upper end of the $10 to $15 million range management has previously indicated.  Further increases in rock and sulfur related raw material costs are anticipated into the third quarter, and the company has already begun to take actions to offset these increases.

 

From the May 3, 2011, Prepared Foods' Daily News. 

Subscribe to Prepared Foods

Related Articles

Sales Increase for Dr Pepper Snapple

Del Monte's 1Q Sales Drop

Unilever 3Q Sales Increase

Price Increase Leading to Weak Sales

You must login or register in order to post a comment.

Report Abusive Comment

Subscribe For Free!
  • Print & Digital Edition Subscriptions
  • Prepared Foods eNewsletter
  • Online Registration
  • Subscription Customer Service

More Videos

Popular Stories

Innova_StreetCouple_900

Innova Market Insights Top Trends for 2020

SFA_900

2020 Food Trend Predictions

Food and Beverage Industry Trends

Food Trend Predictions For 2020

Cannabinoids Molecules Graphic

Beyond CBD and THC: Other cannabinoids offer possibilities for cannabis edibles

BlueDiamond_Pickle_900

Blue Diamond Spicy Dill Pickle Almonds

Prepared Foods Favorite Products Poll

Events

January 1, 2030

Webinar Sponsorship Information

For webinar sponsorship information, visit www.bnpevents.com/webinars or email webinars@bnpmedia.com.

View All Submit An Event

Poll

BEST SNACKS OF 2019

Which is your favorite snack launch from 2019?
View Results Poll Archive

Products

Accelerating New Food Product Design and Development, 2nd Edition

Accelerating New Food Product Design and Development, 2nd Edition

See More Products

Prepared Foods

Prepared Foods December 2019 Cover

2019 December

Check out the December 2019 issue of Prepared Foods, featuring food and beverage industry trend predictions for 2020!

View More Create Account
  • More
    • Want More
    • Connect
    • Editorial Guidelines
    • New Product Submission Form
    • Food & Beverage Brands
    • Custom Content & Marketing Services
    • Market Research
    • List Rental
    • Survey And Sample
    • Privacy Policy
  • Advertise With Us
    • Advertise
  • Subscribe

Copyright ©2019. All Rights Reserved BNP Media.

Design, CMS, Hosting & Web Development :: ePublishing