Omega Protein Announces Fourth Quarter and Full Year 2013 Financial Results

Mar 10, 2014, 07:00 ET from Omega Protein Corporation

HOUSTON, March 10, 2014 /PRNewswire/ -- Omega Protein Corporation (NYSE: OME), a nutritional product company and a leading integrated producer of omega-3 fish oil and specialty protein products, today reported financial results for the fourth quarter and full year ended December 31, 2013.

Fourth Quarter and Full Year 2013 Highlights

  • Revenues:  $66.0 million for the quarter and $244.3 million for the year
  • Gross profit margin:  42.4% for the quarter and 33.9% for the year
  • Net income:  $9.7 million, or $14.2 million excluding plant closure charges and net gain on disposal of assets, for the quarter, and $30.5 million, or $35.0 million excluding plant closure charges and net loss on disposal of assets, for the year
  • Earnings:  Earnings per diluted share of $0.45, or $0.66 excluding plant closure charges and net gain on disposal, for the quarter, and $1.45, or $1.66 excluding plant closure charges and net loss on disposal,  for the year
  • Adjusted EBITDA:  $26.7 million for the quarter and $75.6 million for the year

"We are pleased with the progress made on our strategic objectives in 2013, as we continued to build a more balanced nutrition company focused on value-added products that allow families to live healthier lives through nutrition.  Our strong financial performance during the year included increased revenues, as well as record gross profit and gross margin," commented Bret Scholtes, Omega Protein's President and Chief Executive Officer.  "In the quarter, our financial results benefited from record human nutrition revenue, attractive animal nutrition forward contract pricing, and a productive end to the 2013 fishing season."

Mr. Scholtes concluded, "We are excited to build on this progress in 2014 as we introduce additional capacity and capabilities to capitalize on our market opportunities."

Fourth Quarter 2013 Results

The Company's revenues increased 4% from $63.1 million in the same period last year to $66.0 million.  This increase was due to a $4.4 million increase in human nutrition revenue, partially offset by a $1.6 million decrease in animal nutrition revenues.  The increase in human nutrition revenues was primarily due to sales of protein products from Wisconsin Specialty Protein ("WSP"), a business acquired by the Company in the first quarter of 2013.  The decrease in animal nutrition revenues was primarily due to a 33% decrease in the Company's fish meal sales volumes, partially offset by a 109% increase in fish oil sales volumes and increased sales prices of 19% and 15% for the Company's fish meal and fish oil, respectively.  The composition of revenue by nutritional product line for the fourth quarter of 2013 was 59% fish meal, 26% fish oil, 14% specialty nutraceutical and food ingredients and products, and 1% fish solubles and other. 

Fourth quarter of 2013 revenues decreased 25% from $87.6 million in the third quarter of 2013 to $66.0 million.  This decrease was due to a $23.2 million decrease in animal nutrition revenues, which reflected decreased sales volumes of 19% and 53% for fish meal and fish oil, respectively, and a 5% decrease in fish meal sales prices, partially offset by a 30% increase in fish oil sales prices.  The increase in fish oil sales prices was primarily due to a change in the product mix of higher priced refined and lower priced crude oils, and higher prices on those crude oil volumes.  Human nutrition revenues increased $1.6 million to $9.4 million in the fourth quarter compared to $7.8 million in the third quarter.  The increase in human nutrition revenues primarily reflects higher sales of OmegaActiv fish oil and other nutraceutical ingredients. 

The Company reported gross profit of $28.0 million, or 42.4% as a percentage of revenues, for the fourth quarter of 2013, versus $12.9 million, or 20.5% as a percentage of revenues, in the fourth quarter of 2012.  The increase was due to an increase in the animal nutrition segment gross profit as a percentage of revenues from 20.1% to 47.1% as a result of increased fish oil and fish meal sales prices and greater than anticipated fish catch in the fourth quarter.  As a result of this greater fish catch and production, standard cost for 2013 inventory, for which sales commenced largely in the third quarter of 2013, was decreased and all previous sales of 2013 inventory production were adjusted during the fourth quarter ended December 31, 2013. This increase in gross profit as a percentage of revenues was partially offset by a decrease in the human nutrition segment gross profit as a percentage of revenues from 24.9% to 13.6%, due primarily to lower gross profit as a percentage of revenues for other nutraceuticals and the addition of the protein products business.

Compared to the third quarter of 2013, fourth quarter gross profit decreased from $29.4 million to $28.0 million; however, gross profit as a percentage of revenues increased from 33.6% to 42.4%.  The increase in gross profit as a percentage of revenues was due to an increase in animal nutrition gross profit as a percentage of revenues from 34.5% to 47.1% primarily as a result of the lower inventory cost associated with greater than anticipated fish catch after September 30, 2013, as discussed above.  The human nutrition segment gross profit as a percentage of revenues decreased from 24.6% to 13.6% primarily due to lower gross profit as a percentage of revenues for protein products and changes in product mix. 

Selling, general and administrative expenses for the fourth quarter increased $0.5 million to $5.9 million compared to the fourth quarter of 2012, primarily as a result of the WSP acquisition.  Selling, general and administrative expenses decreased from $6.9 million for the third quarter of 2013, primarily as a result of decreased employee compensation related costs.

In the fourth quarter of 2013, the Company closed its menhaden fish processing plant located in Cameron, Louisiana and re-deployed certain vessels from that facility to the Company's other Gulf Coast facilities located in Abbeville, Louisiana and Moss Point, Mississippi, as previously announced.  In conjunction with the closure, the Company incurred charges of $6.6 million in the fourth quarter of 2013.  

The fourth quarter of 2013 effective tax rate was 31.9% compared to 126.2% in the fourth quarter of 2012 and 34.6% in the third quarter of 2013. The higher effective tax rate in the fourth quarter of 2012 was primarily the result of charges relating to a U.S. Attorney investigation that were non-deductible for tax purposes. 

Net income for the fourth quarter of 2013 was $9.7 million ($0.45 per diluted share) compared to a net loss of $0.5 million ($0.03 loss per diluted share) for the same period last year and net income of $14.0 million ($0.66 per diluted share) for the third quarter of 2013.  Excluding plant closure charges and net gain on disposal of assets, net income for the fourth quarter of 2013 would have been $14.2 million ($0.66 per diluted share) and excluding the impact of the charges related to the U.S. Attorney investigation and net loss on disposal of certain assets, net income for the fourth quarter of 2012 would have been $4.0 million ($0.20 per diluted share).

Adjusted EBITDA totaled $26.7 million for the fourth quarter of 2013, compared to $11.6 million for the same period last year and $27.1 million for the third quarter of 2013.

Full Year 2013 Results

Revenues for the year ended December 31, 2013 increased 4% to $244.3 million compared to revenues of $235.6 million for the year ended December 31, 2012. The increase in revenues for 2013 was due to a $9.1 million increase in human nutrition revenues partially offset by a $0.4 million decrease in animal nutrition revenues. The increase in human nutrition revenues was due primarily to the acquisition of WSP in the first quarter of 2013. The decrease in animal nutrition revenues was primarily due to decreased sales volumes of 28% for the Company's fish meal, partially offset by increased sales prices of 23% for the Company's fish meal and increased sales volumes and prices of 2% and 43%, respectively, for the Company's fish oil.

The Company reported record gross profit of $82.8 million, or 33.9% as a percentage of revenues, for the year ended December 31, 2013, versus gross profit of $42.1 million, or 17.8% as a percentage of revenues, for the year ended December 31, 2012. The increase in gross profit as a percentage of revenues was primarily due to an increase in animal nutrition segment gross profit as a percentage of revenues from 17.3% to 36.2%, reflecting an increase in animal segment revenues per unit as a result of higher fish meal and fish oil sales prices, partially offset by a decrease in human nutrition gross profit as a percentage of revenues from 22.8% to 18.2%.

Net income for the year ended December 31, 2013 was $30.5 million ($1.45 per diluted share) compared to $4.1 million ($0.20 per diluted share) for the same period last year.  Excluding plant closure charges and net loss on disposal of assets, net income for 2013 would have been $35.0 million ($1.66 per diluted share) and excluding the impact of U.S. Attorney investigation charges and net gain on disposal of assets, net income for the year ended December 31, 2012 would have been $10.4 million ($0.52 per diluted share). 

Adjusted EBITDA totaled $75.6 million for the year ended December 31, 2013, an increase from $35.6 million for the previous year.

Balance Sheet

The Company's balance sheet remains strong, and stockholders' equity increased $41.6 million to $247.2 million as of December 31, 2013 as compared to $205.6 million at December 31, 2012.  Total debt decreased $3.1 million from December 31, 2012 to $24.2 million on December 31, 2013.  The Company's December 31, 2013 cash balance decreased $21.9 million from December 31, 2012 to $34.1 million. This decrease was primarily due to the acquisition of WSP in the first quarter of 2013, as well as expenditures related to 2013 fishing season, capital spending and debt payments, and was partially offset by the sale of inventory.

Conference Call Information

Omega Protein will host a conference call on its fourth quarter and full year 2013 financial results at 8:30 a.m., Eastern Time, on Monday, March 10, 2014. The Company's senior management team will be available to discuss recent financial results and current business trends as well as respond to questions.

Please dial (877) 407-3982 domestically or (201) 493-6780 internationally to join the call. Interested parties may also listen to the webcast live over the Internet at www.omegaprotein.com.

A webcast replay of the conference call will be available beginning shortly after the conclusion of the call at www.omegaprotein.com and will be available for 30 days. A telephonic replay of the conference call will be available through March 24, 2014. Domestic listeners can dial (877) 870-5176, and international listeners may dial (858) 384-5517. The replay access code 13576105.

About Omega Protein

Omega Protein Corporation (NYSE: OME) is a century old nutritional company that develops, produces and delivers healthy products throughout the world to improve the nutritional integrity of functional foods, dietary supplements and animal feeds.  Omega Protein's mission is to help people lead healthier lives with better nutrition through sustainably sourced ingredients such as highly-refined omega-3 rich fish oil, specialty proteins and nutraceuticals.

Forward Looking Statements

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS: The statements contained in this press release that are not historical facts are forward-looking statements that involve a number of risks and uncertainties. Forward-looking information may be based on projections, predictions and estimates. Some statements in this press release may be forward-looking and use words like "may," "may not," "believes," "do not believe," "expects," "do not expect," "anticipates," "do not anticipate," "see," "do not see," "should," or other similar expressions. The actual results of future events described in any of these forward-looking statements could differ materially from those stated in the forward-looking statements. Important factors that could cause actual results to be materially different from those forward-looking statements include, among others: (1) the Company's ability to meet its raw material requirements through its annual menhaden harvest, which is subject to fluctuations due to natural conditions over which the Company has no control, such as varying fish population, fish oil yields, adverse weather conditions, natural and other disasters and disease; (2) the impact of laws and regulations that may be enacted that may restrict the Company's operations or the sale of the Company's products; (3) the impact of worldwide supply and demand relationships on prices for the Company's products; (4) the Company's expectations regarding demand and pricing for its products proving to be incorrect, and the effect of forward sales of products on the Company's financial results; (5) fluctuations in the Company's quarterly operating results due to the seasonality of the Company's business, estimates of standard cost for inventory and subsequent adjustments to such costs, and the Company's deferral of inventory sales based on worldwide prices for competing products; (6)the Company's ability to realize the anticipated benefits from its acquisitions in the human nutrition business, Nutegrity; (7) the Company's expectations regarding Nutegrity, its future prospects and the dietary supplement market or the human health and wellness segment generally, proving to be incorrect; (8) the cost of compliance with existing and future government regulations; (9) the impact of the Company's settlement with U.S. Attorney's Office on the Company's operations and financial results, including the impact of any failure to comply with the terms of the Company's probation or the limitations imposed on the Company's ability to secure government contracts or loans under the NFMS Title XI program; (10) the impact of the closure of the Company's Cameron, Louisiana processing plant on the Company's operations and financial results; and (11) the cost of compliance or potential restrictions on sales caused by laws and regulations regarding fish meal or oil importation into foreign jurisdictions.  Other factors are described in further detail in the Company's filings with the Securities and Exchange Commission, including its reports on Form 10-K, Form 10-Q and Form 8-K.

 

OMEGA PROTEIN CORPORATION

CONSOLIDATED BALANCE SHEETS

December 31,

2013

December 31,

2012

(in thousands)

ASSETS

 Current assets:

          Cash and cash equivalents

$

34,059

$

55,998

          Receivables, net

21,140

17,267

          Inventories

94,339

66,659

          Deferred tax asset, net

1,062

1,165

          Prepaid expenses and other current assets

3,915

3,430

                Total current assets

154,515

144,519

Other assets, net

5,234

10,789

Property, plant and equipment, net

144,113

127,640

Goodwill

19,600

7,986

Other intangible assets, net

7,932

4,362

                Total assets

$

331,394

$

295,296

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:

         Current maturities of long-term debt

$

3,112

$

3,058

         Current portion of capital lease obligation

268

         Accounts payable

5,380

3,000

         Accrued liabilities

29,145

31,741

              Total current liabilities

37,637

38,067

Long-term debt, net of current maturities

21,130

24,242

Deferred tax liability, net

19,351

15,794

Pension liabilities, net

4,117

9,826

Other long-term liabilities

1,929

1,764

                Total liabilities

84,164

89,693

Commitments and contingencies                                                 

Stockholders' equity:

        Preferred stock, $0.01 par value; 10,000,000 authorized shares; none

issued

 

 

        Common Stock, $0.01 par value; 80,000,000 authorized shares;

20,804,189 and 19,883,940 shares issued and outstanding at December 31, 2013 and 2012, respectively

203

195

        Capital in excess of par value

136,428

129,040

        Retained earnings

116,807

86,292

        Accumulated other comprehensive loss

(6,208)

(9,924)

                Total stockholders' equity

247,230

205,603

                    Total liabilities and stockholders' equity

$

331,394

$

295,296

 

 

OMEGA PROTEIN CORPORATION

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(in thousands, except per share amounts)

Three Months Ended December 31,

Years Ended December 31,

2013

2012

2013

2012

Revenues

$        65,973

$        63,133

$      244,293

$      235,639

Cost of  sales

38,023

50,214

161,543

193,583

Gross profit

27,950

12,919

82,750

42,056

Selling, general and administrative expenses

5,890

5,364

25,293

21,737

Research and development expenses

637

537

2,407

2,209

Loss related to plant closure

6,597

    ―

6,597

              ―

Charges related to U.S. Attorney investigation

        ―

3,550

             ―

7,990

Impairment of intangible assets

186

      ―

266

129

(Gains) loss on disposal of assets

(39)

1,117

174

(2,635)

Operating  income

14,679

2,351

48,013

12,626

Interest income

3

11

18

32

Interest expense

(302)

(339)

(1,658)

(1,335)

Other expense, net

(109)

(83)

(394)

(365)

Income before income taxes

14,271

1,940

45,979

10,958

Provision for income taxes

4,553

2,448

15,464

6,895

Net income (loss)

$        9,718

$          (508)

$       30,515

$         4,063

Other comprehensive (loss) income:

Energy swap adjustment, net of tax expense (benefit) of $83,($142), $81 and $241 respectively

156

(263)

151

448

Pension benefits adjustment, net of tax expense (benefit) of  $1,515, ($233), $1,920 and $165, respectively

2,812

(433)

3,565

307

Comprehensive income (loss)

$      12,686

$      (1,204)

$       34,231

$        4,818

Basic earnings (loss) per share

$          0.47

$        (0.03)

$           1.50

$          0.21

Weighted average common shares outstanding

20,248

19,463

19,913

19,420

Diluted earnings (loss) per share

$          0.45

$        (0.03)

$           1.45

$          0.20

Weighted average common shares and potential common shares outstanding

20,942

19,857

20,634

19,874

 

OMEGA PROTEIN CORPORATION

 

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

 

Years Ended December 31,  

2013

2012

Cash flows from operating activities:

       Net income

$

30,515

$

4,063

       Adjustments to reconcile net income (loss) to net

         cash  provided by operating activities:

        Depreciation and amortization

21,056

17,999

        Loss disposal of assets, plant closure

5,514

                                                        ―

        (Gain) loss on disposal of assets, net

174

(2,635)

        Impairment of intangible assets

266

129

        Provisions for losses on receivables

103

48

        Share based compensation

1,982

3,721

        Deferred income taxes

3,579

2,272

        Changes in assets and liabilities:

                 Receivables

(2,630)

(494)

                   Inventories

(26,855)

(1,766)

                 Prepaid expenses and other current assets

(191)

(616)

                 Other assets

4,092

(6,379)

                 Accounts payable

1,644

(779)

                 Accrued liabilities

(5,250)

11,855

                 Pension liability, net

(2,144)

(735)

                 Other long-term liabilities

165

52

                         Net cash provided by operating activities

 

32,020

 

26,735

Cash flows from investing activities:

        Proceeds from disposition of assets

470

6,152

        Acquisition of InCon, net of cash acquired

                                                        ―

181

        Acquisition of Wisconsin Specialty Protein, net of

         cash acquired

(26,676)

                                                        ―

        Acquisition of Cyvex, net of cash acquired

                                                        ―

                                                        ―

        Land and building purchased in capital lease

         extinguishment

(5,005)

                                ―

        Capital expenditures

(24,796)

(25,064)

                         Net cash used in

                           investing activities

 

(56,007)

 

(18,731)

Cash flows from financing activities:

        Principal payments of long-term debt

(3,058)

(2,994)

        Principal payments of capital lease obligation

(309)

(517)

        Debt issuance costs

                                                        ―

(389)

        Proceeds from stock options exercised

4,009

469

        Tax effect of stock options exercised

1,406

34

                        Net cash provided by (used in) financing   

                            activities

 

2,048

 

(3,397)

Net  (decrease) increase in cash and cash equivalents

(21,939)

4,607

Cash and cash equivalents at beginning of year

55,998

51,391

Cash and cash equivalents at end of year

$

34,059

$

55,998

The tables below present information about reported segments for the quarters ended December 31, 2013 and 2012 (in thousands):

Quarter Ended December 31, 2013

Animal Nutrition

Human Nutrition

Unallocated

Total

Revenue

$   56,618

$   9,355

  $          ―

$   65,973

Cost of sales

29,945

8,078

             ―

38,023

Gross profit

26,673

1,277

             ―

27,950

Selling, general and administrative expenses (including research and development)

721

1,878

3,928

6,527

Loss related to plant closure

6,597

           ―

             ―

6,597

Other (gains) and losses

(74)

226

(5)

147

Operating income (loss)

$   19,429

$    (827)

$  (3,923)

$   14,679

Depreciation and amortization

$     4,594

$      648

$       187

$     5,429

 

Quarter Ended December 31, 2012

Animal Nutrition

Human Nutrition

Unallocated

Total

Revenue

$   58,173

$    4,960

$          ―

$   63,133

Cost of sales

46,490

3,724

              ―

50,214

Gross profit

11,683

1,236

              ―

12,919

Selling, general and administrative expenses (including research and development)

731

969

4,201

5,901

Charges related to U.S. Attorney investigation

3,550

            ―

              ―

3,550

Other (gains) and losses

1,117

            ―

              ―

1,117

Operating income (loss)

$     6,285

$       267

$  (4,201)

$     2,351

Depreciation and amortization

$     3,956

$       348

$       387

$     4,691

The tables below present information about reported segments for the years 2013 and 2012 (in thousands):

2013

Animal Nutrition

Human Nutrition

Unallocated

Total

Revenue

$ 213,236

$   31,057

  $           ―

$  244,293

Cost of sales

136,146

25,397

           ―

161,543

Gross profit

77,090

5,660

           ―

82,750

Selling, general and administrative expenses (including research and development)

2,744

6,959

17,997

27,700

Loss related to plant closure

6,597

            ―

            ―

6,597

Other (gains) and losses

140

305

(5)

440

Operating income (loss)

$   67,609

$   (1,604)

$ (17,992)

$   48,013

Depreciation and amortization

$   17,946

$     2,369

$        741

$   21,056

 

2012

Animal Nutrition

Human Nutrition

Unallocated

Total

Revenue

$ 213,624

$   22,015

  $           ―

$ 235,639

Cost of sales

176,588

16,995

            ―

193,583

Gross profit

37,036

5,020

            ―

42,056

Selling, general and administrative expenses (including research and development)

2,564

3,795

17,587

23,946

Charges related to U.S. Attorney investigation

7,990

            ―

            ―

7,990

Other (gains) and losses

(2,635)

129

            ―

(2,506)

Operating income (loss)

$   29,117

$     1,096

$ (17,587)

$   12,626

Depreciation and amortization

$   15,859

$     1,315

$        825

$   17,999

 

Adjusted EBITDA to Net Income Reconciliation The following tables (in thousands) provide a reconciliation of Adjusted EBITDA, a non-GAAP (Generally Accepted Accounting Principles) financial measure, to net income, the most directly comparable financial measure calculated and presented in accordance with GAAP, for the three months ended December 31, 2013, September 30, 2013 and December 31, 2012 and the full year ended December 30, 2013 and 2012:

 

Three Months Ended

December 31, 2013

September 30, 2013

December 31, 2012

Net Income (Loss)

$

9,718

$

13,962

$

(508)

Reconciling items:

     Interest expense

272

452

309

     Income tax provision

4,553

7,377

2,448

     Depreciation and amortization

5,429

5,374

4,691

     Loss related to plant closure

6,597

     Charge related to U.S. Attorney investigation

3,550

     Impairment of intangible assets

186

80

     Net (gain) loss on disposal of assets

(39)

(161)

1,117

Adjusted EBITDA

$

26,716

$

27,084

$

11,607

Year Ended

December 31, 2013

December 31, 2012

Net Income

$

30,515

$

4,063

Reconciling items:

     Interest expense

1,536

1,201

     Income tax provision

15,464

6,895

     Depreciation and amortization

21,056

17,999

     Loss related to plant closure

6,597

     Charge related to U.S. Attorney investigation

7,990

     Impairment of intangible assets

266

129

     Net (gain) loss on disposal of assets

174

(2,635)

Adjusted EBITDA

$

75,608

$

35,642

Adjusted EBITDA represents net income before interest expense, income tax, depreciation and amortization, charges related to U.S. Attorney investigation, impairment of intangible assets, loss related to plant closure and net (gain) loss on disposal of assets. The Company has reported Adjusted EBITDA because it believes Adjusted EBITDA is a measure commonly reported and widely used by investors as an indicator of a Company's operating performance. The Company believes Adjusted EBITDA assists such investors in comparing a company's performance on a consistent basis. Adjusted EBITDA is not a calculation based on GAAP and should not be considered an alternative to net income in measuring our performance or used as an exclusive measure of cash flow because it does not consider the impact of working capital changes, capital expenditures, debt principal reductions and other sources and uses of cash which are disclosed in our consolidated statements of cash flows. Investors should carefully consider the specific items included in our computation of Adjusted EBITDA. While Adjusted EBITDA has been disclosed herein to permit a more complete comparative analysis of our operating performance relative to other companies, investors should be cautioned that Adjusted EBITDA as reported by us may not be comparable in all instances to Adjusted EBITDA as reported by us or by other companies. Adjusted EBITDA amounts may not be fully available for management's discretionary use, due to certain requirements to conserve funds for capital expenditures, debt service and other commitments, and therefore management relies primarily on our GAAP results. Adjusted EBITDA is not intended to represent net income as defined by GAAP and such information should not be considered as an alternative to net income, cash flow from operations or any other measure of performance prescribed by GAAP in the United States.

Adjusted Net Income and Diluted Earnings Per Share to Net Income Reconciliation The following tables (in thousands, except per share amounts) provide a reconciliation of Adjusted Net Income and Diluted Earnings Per Share, non-GAAP (Generally Accepted Accounting Principles) financial measures, to net income, the most directly comparable financial measure calculated and presented in accordance with GAAP, for the three months ended December 31, 2013, September 30, 2013 and December 31, 2012 and the full year ended December 30, 2013 and 2012:

Three Months Ended

December 31, 2013

September 30, 2013

December 31, 2012

Net Income (Loss)

$

9,718

$

13,962

$

(508)

Reconciling items:

     Income tax provision prior to adjustments

4,553

7,377

2,448

     Loss related to plant closure

6,597

     Charges related to U.S. Attorney investigation

3,550

     (Gains) loss on disposal of assets

(39)

(161)

1,117

Adjusted income before income taxes

20,829

21,178

6,607

     Provision for income taxes after adjustments

6,645

7,321

2,570

Adjusted net income

$

14,184

$

13,857

$

4,037

Adjusted diluted earnings per share

$

0.66

$

0.65

$

0.20

Year Ended

December 31, 2013

December 31, 2012

Net Income

$

30,515

$

4,063

Reconciling items:

     Income tax provision prior to adjustments

15,464

6,895

     Loss related to plant closure

6,597

     Charges related to U.S. Attorney investigation

7,990

     (Gains) loss on disposal of assets

174

(2,635)

Adjusted income before income taxes

52,750

16,313

     Provision for income taxes after adjustments

17,740

5,936

Adjusted net income

$

35,010

$

10,377

Adjusted diluted earnings per share

$

1.66

$

0.52

 

Adjusted net income and Adjusted diluted earnings per share represent net income and diluted earnings per share without loss related to plant closure, charges related to U.S. Attorney investigation, net (gain) loss on disposal of assets and taxes associated with these items. The Company has reported Adjusted net income and Adjusted diluted earnings per share because it believes these measures are widely used by investors as an indicator of a Company's operating performance. The Company believes Adjusted net income and Adjusted diluted earnings per share assist investors in comparing a company's performance on a consistent basis.  Adjusted net income and Adjusted diluted earnings per share are not calculations based on GAAP and should not be considered alternatives to net income or diluted earnings per share in measuring our performance. Investors should carefully consider the specific items included in our computation of Adjusted net income and Adjusted diluted earnings per share. While Adjusted net income and Adjusted diluted earnings per share has been disclosed herein to permit a more complete comparative analysis of our operating performance across time periods and relative to other companies, investors should be cautioned that these measures as reported by us may not be comparable in all instances to Adjusted net income and Adjusted diluted earnings per share as reported by us or by other companies. Adjusted net income and Adjusted diluted earnings per share are not intended to represent net income or diluted earnings per share as defined by GAAP and such information should not be considered as an alternative to net income, diluted earnings per share or any other measure of performance prescribed by GAAP in the United States.

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SOURCE Omega Protein Corporation



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