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Penford, based in Centennial, Colo., said in its fourthquarter earnings report Thursday that flooding at its Cedar Rapids plant will cost the company $45 million to $46 million.
The company is continuing to process its flood insurance claim through property insurance carriers, but it doesn't expect to finish submitting the documentation until December.
Penford intends to claim for all covered losses, including $15 million in business interruption costs through August 31. That could make for a better earnings report next year.
Penford said the amount recovered from insurers "may be materially more or less than the company's estimate of total losses." Penford lost $20.9 million, or $1.87 per share, in its fourth quarter, which ended Aug. 31. Sales fell to $60.02 million for the quarter, down from $96.2 million in the year-earlier quarter.
That pushed Penford's earnings for the year to a $1.20 per share loss, down from a $1.46 per share gain in the previous fiscal year.
Penford's stock price rose despite the news. Penford shares climbed 76 cents per share, or 7 percent, to close at $11.51 on the Nasdaq on Thursday.
The Cedar Rapids plant was closed for several weeks for cleanup and restoration after the June flooding on the Cedar River. Manufacturing of liquid additive products resumed in mid-July at a pilot plant facility in Cedar Rapids that was not heavily damaged by the flood.
Limited production of cornstarch products resumed in late August. Effective Sept. 15, Penford announced that the emergency that disrupted shipments of industrial starch was over. Ethanol production resumed in late September.
In prepared remarks, Penford President and CEO Tom Malkoski praised the Cedar Rapids work force.
"The exceptionally difficult circumstances this year have tested the capacity and character of all of our employees," Malkoski said. "They have responded with remarkable resolve and focus." Malkoski said the events also demonstrated the commitment and support Penford has from its suppliers and customers.
Penford's Australia and New Zealand operations reported revenues flat yearover-year at $29 million, with volume decreasing from a year ago because of a planned shift to products with better expected long-term returns. The weakening of the Australian currency translated into lower results in U.S. dollars but will make the Australian operation's exports more attractive in future years.
-- Contact the writer: (319) 398-8317 or david.dewitte@gazcomm.com
To see more of The Gazette, or to subscribe to the newspaper, go to http://www.gazetteonline.com. Copyright (c) 2008, The Gazette, Cedar Rapids, Iowa Distributed by McClatchy-Tribune Information Services. For reprints, email tmsreprints@permissionsgroup.com, call 800-374-7985 or 847-635-6550, send a fax to 847-635-6968, or write to The Permissions Group Inc., 1247 Milwaukee Ave., Suite 303, Glenview, IL 60025, USA.
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