HOUSTON, Nov. 8, 2011 /PRNewswire/ -- Omega Protein Corporation (NYSE: OME), a nutritional ingredient company and the nation's leading vertically integrated producer of omega-3 fish oil and specialty fish meal products, today reported financial results for the third quarter ended September 30, 2011.
Third Quarter 2011 Highlights:
- Revenues: $71.7 million, a 28.1% increase over the 2010 third quarter, due primarily to higher volumes
- Gross profit margin: 19%, down from 27% for the 2010 third quarter, reflecting low fish oil yields in 2011
- Net income: $4.7 million ($0.24 per diluted share) compared to $7.0 million ($0.37 per diluted share) in the 2010 third quarter
- Production: Highest year-to-date production since 2007 and highest fish catch since 2002
- Growth: Completed acquisition of InCon Processing, L.L.C.
Third Quarter 2011 Results
Omega Protein third quarter of 2011 revenues increased 28.1% to $71.7 million from $56.0 million in the same period last year. The composition of revenue by nutritional product line was 63% fish meal, 30% fish oil, 5% specialty nutraceutical ingredients, and 2% fish solubles and other. Fish meal sales prices decreased 23% compared to the third quarter of 2010, but were 9% higher than the third quarter average for the prior five years. Fish oil sales prices increased 12% compared to the third quarter of 2010 and were 22% higher than the third quarter average for the prior five years.
The Company recorded gross profit of $13.4 million, or 18.7% as a percentage of revenues, for the third quarter of 2011, versus gross profit of $15.3 million, or 27.3% as a percentage of revenues, for the third quarter of 2010. The decrease in gross profit was primarily due to a decrease in fish meal sales prices partially offset by an increase in fish oil sales prices and increased sales volumes of fish meal and fish oil. The global availability of fish meal, particularly from South America, influenced the decrease in fish meal sales prices. Strong export demand for quality oil and an increase in pricing of competitive fats and oils were significant factors related to the increase in fish oil pricing and the increase in sales volumes. Cost per unit of production was consistent for the two periods, as low fish oil yields offset the positive impact of an increased fish catch in 2011.
Net income for the third quarter ended September 30, 2011 was $4.7 million ($0.24 per diluted share) compared to $7.0 million ($0.37 per diluted share) for the same period last year. In addition to the items discussed above, the decrease was influenced by general and administrative expenses associated with a December 2010 acquisition.
"We are pleased with this season's strong catch and production results, as well as our ability to generate the highest quarterly revenues in our Company's history," commented Bret Scholtes, Omega Protein's Executive Vice President and Chief Financial Officer. "At the same time, we believe that the steps we have taken with the recent acquisitions of Cyvex Nutrition and InCon Processing better position Omega Protein by improving our ability to penetrate the more profitable human nutrition market with our fish oil."
Mr. Scholtes continued, "We believe our vertically integrated business model provides a distinct competitive advantage that allows us to better serve our customers and increase long-term shareholder value."