FPI Limited - Report on Third Quarter Results; Part I of II.ST. JOHN'S, Newfoundland--(BUSINESS WIRE)--Oct. 30, 1995--Fishery Product (TSE See Tokyo Stock Exchange. TSE 1. See Tokyo Stock Exchange (TSE). 2. See Toronto Stock Exchange (TSE). , ME: FPL ) Financial Results Victor L. Young, Chairman and Chief Executive officer of FPI FPI Formal Public Identifier FPI Front Populaire Ivoirien (French: Ivorian Popular Front, Icory Coast) FPI Federal Prison Industries, Inc. FPI Front Pembela Islam (Indonesian: Islamic Defenders Front) Limited ("FPI") reported the results of the Company's third quarter of 1995. He noted that FPI recorded net income of $1.9 million (11 cents per share Cents per share The amount of a mutual fund's dividend or capital gains distributions that a shareholder will receive for each share owned. ) in the first nine months of 1995 compared with 10.2 million (62 cents per share) during the same period in 1994. Sales for the first nine months were $470.2 million compared with $491.9 million in the same period in 1994. Young noted that FPI recorded a net loss of $0.2 million (1 cent per share) during the third quarter of 1995, compared with net income of $3.3 million (20 cents per share) during the same period of 1994. Sales for the third quarter totalled $161.1 million compared with $169.9 million in the same period in 1994. The results for the quarter reflect an adjustment of $1.0 million related to write downs in the carrying value Carrying Value Also know as "book value," it is a company's total assets minus intangible assets and liabilities, such as debt. Notes: This is different than market value, as it can be higher or lower depending on the circumstances. of inventory, largely offset by a reduction of $0.8 million in excess expense accruals for vessel refits. The Company's balance sheet at the end of the quarter remained strong with working capital of $95.9 million and a current ratio of 1.8:1. Long term debt accounted for 17.2 percent of FPI's capital structure. Operating Overview Young reported that both the FPI and Clouston divisions continued to experience sales declines in the third quarter of 1995. General softness in seafood markets in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. and weakening prices for high value products such as warm water shrimp and crab were the most significant elements impacting on the Company's performance. The impact of the weak market environment was reflected in sales volumes, margins, and inventory carrying costs Carrying costs Costs that increase with increases in the level of investment in current assets. . These factors overshadowed favourable performance for cold water shrimp, scallops, redfish redfish or rosefish or ocean perch Commercially important food fish (Sebastes marinus) of the scorpion fish family (Scorpaenidae), found in the Atlantic along European and North American coasts. and turbot turbot: see flatfish. turbot Species (Scophthalmus maximus, family Scophthalmidae or Bothidae) of broad-bodied European flatfish, a highly valued food fish. It lives along sand and gravel shores. . He also noted that capital expenditures during the quarter totalled $0.9 million, bringing capital spending capital spending Spending for long-term assets such as factories, equipment, machinery, and buildings that permits the production of more goods and services in future years. in the first nine months of 1995 to $8.3 million. Capital expenditures include $5.1 million related to the completion of the new shrimp processing plant in Port au Choix. The Company concluded a $5.0 million ten year fixed rate loan during the quarter to support this capital program. Young reported that during the third quarter, FPI completed the sale of three deactivated groundfish vessels for $8.7 million. Additional sales are pending and the Company expects to have its vessel divestiture program, involving 42 vessels, concluded by year end. Outlook Seafood markets generally and in the US in particular have been unexpectedly weak throughout 1995. It is encouraging, however, that the Company's September sales exceeded the 1994 level after a dismal market environment in the April to August period. Moderate firming in the market is anticipated with sales of crab, cold water shrimp, scallops, and warm water shrimp (over US Thanksgiving and Christmas) improving chances for a return to profitability in the fourth quarter. Young noted that FPI is proceeding with a program to improve manufacturing efficiency and customer service in the United States. This will involve: (i) consolidating its two existing U.S. manufacturing facilities into one expanded facility in Danvers, Massachusetts Danvers is a town in Essex County, Massachusetts, United States. Located on the Danvers River near the northeastern coast of Massachusetts, Danvers is most widely known for its association with the 1692 Salem witch trials. ; and (ii) consolidating the Company's existing cold storage and distribution operations. Once the program is implemented in mid 1996, the Company will close its manufacturing facility in Boston. The capital expansion program at the Danvers facility will cost in the order of $US 4.0 million and will result in lower operating costs starting in the latter half of next year. CONTACT: FPI Limited, St. John's Victor L. Young, 709/570-0000 |
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