Printer Friendly

CONDITIONS IMPROVING AT MIDWEST GRAIN AFTER FRUSTRATING FIRST QUARTER, COMPANY SAYS

 ATCHISON, Kan., Nov. 5 /PRNewswire/ -- Marked improvements continue at Midwest Grain Products, Inc. (NASDAQ-NMS: MWGP), following a trying first quarter in which the effects of record-setting rainfall and floods caused earnings to shrink, the company said.
 Saying he is confident the worst is over, Ladd Seaberg, president and chief executive officer, called the quarter "one of the most unusual and frustrating" in the company's history. He announced that income from continuing operations for the period, which ended Sept. 30, was $1,093,000, or 11 cents per share on sales of $39,162,000. For the first quarter of fiscal 1993, income from continuing operations was $3,253,000, or 33 cents per share on sales of $40,117,000.
 As announced in August, Seaberg reiterated factors which caused the expected decline in first quarter earnings.
 According to Seaberg, higher raw material costs for what turned out to be lower quality, lower protein-yielding wheat caused production costs to skyrocket in the first quarter. Shipping costs also rose substantially due to more expensive rail and truck traffic which was necessary to circumvent flood-damaged transportation routes. On top of that, Seaberg said, product pricing was established prior to the quarter, when conditions looked favorable, particularly from a raw material standpoint. Therefore, when conditions deteriorated, the company was not in a position to adjust prices to help offset the substantially increased costs.
 "As challenging as the quarter was, it has not diminished our optimism," Seaberg said. "We have struggled through other difficult periods in our past and each time have come out stronger. Now, as on those occasions, we must take the same view and not allow temporary setbacks to overshadow our long-term prospects for growth," he stated.
 Currently, Seaberg said, markets for all of the company's major products are very strong. Demand is especially high for the company's vital wheat gluten and premium wheat starch; plus there are solid indications of strengthened demand for its high quality industrial alcohol, he noted.
 Last month the company completed a sizable expansion of its modified starch production capacity in Atchison as a result of that product's steady rate of growth over the past year. Additionally, the new construction at Midwest Grain's Pekin, Ill., plant, that will double the company's total alcohol production capacity by early 1995, continues to move ahead on schedule.
 While wheat prices have remained high, Seaberg said, wheat protein and milling yields for gluten processing have gotten better since the first quarter. Also, he said he expects the cost efficiency of the company's rail and truck shipments to gradually return to the more economical levels experienced prior to the floods this past summer.
 "With some creative approaches to improving production efficiency," Seaberg stated, "we feel we can continue to gain ground and pave the way for more positive long-term opportunities."
 -0- 11/5/93
 /CONTACT: Steve Pickman of Midwest Grain Products, 913-367-1480/
 (MWGP)


CO: Midwest Grain Products, Inc. ST: Kansas IN: AGR SU:

DC-DT -- DC001 -- 1057 11/05/93 07:02 EST
COPYRIGHT 1993 PR Newswire Association LLC
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1993 Gale, Cengage Learning. All rights reserved.

Article Details
Printer friendly Cite/link Email Feedback
Publication:PR Newswire
Date:Nov 5, 1993
Words:500
Previous Article:HOMEOWNER INSURANCE RATE ORDER DELAYED UNTIL DECEMBER
Next Article:LOCAL HYUNDAI DEALERS AND THE MILWAUKEE RESCUE MISSION LAUNCH 'CAN DRIVE' IN BID FOR A HAPPIER HOLIDAY SEASON
Topics:

Terms of use | Copyright © 2016 Farlex, Inc. | Feedback | For webmasters