Ridley Reports Reduced Loss of $3.9 Million

Ridley Inc. (CA:RCL 7.51, 0.00, 0.00%) has released preliminary unaudited financial information for the fourth quarter and fiscal year ended June 30, 2010 based on management's review of preliminary unaudited results for these periods. All currency amounts are stated in U.S. dollars unless otherwise noted.

For the three months ended June 30, 2010, Ridley's preliminary results indicate a net loss after taxes of $3.9 million compared to a net loss after taxes of $8.4 million for the same period last year. Ridley's results in the fourth quarter this year include a $2.6 million asset impairment loss and a $0.9 million restructuring charge resulting from the closure of two redundant feed manufacturing facilities in Manitoba and a reorganization of Canadian head office functions. The decision to close two facilities in Manitoba was part of an initiative to reduce operating costs which is expected to improve earnings of Canadian operations over the longer term. The loss in the fourth quarter last year included an $11.4 million write-down of goodwill in Canadian operations.

Ridley released its preliminary results in anticipation of the disclosure of certain of its financial information in the interim financial statements of its majority shareholder, Fairfax Financial Holdings Limited. Ridley's audited consolidated financial statements and MD&A for the year ended June 30, 2010 will be released in September, 2010 and will contain additional information concerning Ridley's fourth quarter results. Both documents will be contained in Ridley's 2010 annual report and will be available on the Company's website www.ridleyinc.com or at www.sedar.com.

For the twelve months of fiscal 2010, Ridley's preliminary results indicate net income after taxes of $4.7 million compared to a net loss of $1.3 million last year. Operating income this year was driven mainly by softer demand for animal feed products reflecting economic difficulties that have persisted for most of the year for livestock and poultry producers and the resulting reduction in animal herd sizes. Lower gross profits in fiscal 2010 were partly offset by reduced operating expenses as the Company benefited from cost reduction programs initiated last year. Included in the net loss last year was an asset impairment loss of $1.6 million for closure of a redundant facility in North Carolina and $2.1 million in restructuring charges.

Ridley's overall volumes in the fourth quarter of fiscal 2010 were lower compared to last year but the effect on gross profit was partly offset by higher unit margins resulting from an improved product mix. The fourth quarter normally represents a seasonal low in volume as demand for commercial feed products is generally reduced by warmer temperatures and more abundant forage.

Ridley's results in the fourth quarter of fiscal 2010 reflect a continuation of the effects of a prolonged period of poor economics for many commercial livestock and poultry producers. An exceptional increase in the price of feed ingredients in 2008, combined with recessionary conditions in 2009, forced many producers in Canada and the U.S. to adopt conservative feeding practices and, in many cases, to significantly reduce animal herd and flock numbers. The economic environment for livestock and poultry producers in North America has improved significantly since the first half of fiscal 2010, but feed demand will likely recover more slowly as producers remain cautious in their own business plans while rebuilding their balance sheets.


The following summary data is presented to assist in understanding the fourth quarter and fiscal year 2010 preliminary unaudited information:

Summary of Preliminary
 Information (unaudited)       Three months ended       Twelve months ended
                                          June 30                  	 June 30
($ millions)                   	 2010         2009         	2010         2009
Revenue                        	120.3        129.8      	547.6        603.4
Gross profit                    	  14.3           15.9         	  74.7          82.9
Operating expenses
 before exceptions              16.1            16.3              61.6         67.5
Operating income before
 exceptions                        (1.8)           (0.4)             13.1         15.4
 Asset impairments              2.6            0.2                2.6           1.6
 Goodwill impairments             -          11.4                    -         11.4
 Gain on sale of
  facilities                             (0.3)          (0.3)          (0.3)           (0.6)
 Restructuring costs               0.9              -               0.9              2.1
Operating income (loss)         (4.9)       (11.7)           9.9             0.9
Interest - net                          0.1           0.1            0.3             1.7
Earnings (loss) before
 income taxes                   (5.1)          (11.8)           9.6         (0.8)
Provision for income
 taxes                              (1.2)         (3.4)         4.9          0.5
Net earnings (loss)            (3.9)        (8.4)         4.7         (1.3)

Forward-Looking Information

This report contains "forward-looking" information. The forward-looking information includes statements concerning Ridley's outlook for the future, as well as other statements of beliefs, plans and strategies or anticipated events, and similar expressions concerning matters that are not historical facts. Forward- looking information and statements are subject to risks and uncertainties that could cause actual results to differ materially from those expressed in, contemplated or implied by, such statements. These risks and uncertainties include the ability to make effective acquisitions and successfully integrate newly acquired businesses into existing operations, the availability and prices of raw materials and supplies, livestock disease, product pricing, the competitive environment and related market conditions, operating efficiencies, access to capital, the cost of compliance with environmental and health standards and other regulatory requirements affecting Ridley's business, adverse results from ongoing litigation, and actions of domestic and foreign governments. Other risks are outlined in the Risk Management section of the MD&A included in Ridley's Annual Report. Unless otherwise required by applicable securities law, Ridley disclaims any intention or obligation to publicly update or revise this information, whether as a result of new information, future events or otherwise. Ridley cautions readers not to place undue reliance upon forward-looking statements.

Ridley Inc., headquartered in Mankato, Minnesota and Winnipeg, Manitoba, is one of North America's leading commercial animal nutrition companies. Ridley employs more than 900 people in the United States and Canada in the manufacture and distribution of a full range of animal nutrition products under highly regarded trade names. Ridley's common shares are listed on The Toronto Stock Exchange (trading symbol: RCL). Additional information, including prior period financial statements and Ridley's Annual Information Form (AIF), are available at www.sedar.com. Visit our website at www.ridleyinc.com.

Hide comments


  • Allowed HTML tags: <em> <strong> <blockquote> <br> <p>

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.