Westway Group, Inc. Announces First Quarter 2010 Results Increased 34%


    


    
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<p><span class="xn-location">NEW ORLEANS</span>, <span class="xn-chron">May 10</span> /CNW/ -- Westway Group, Inc. (Nasdaq:   WWAY) today reported consolidated Adjusted EBITDA for the three months ended <span class="xn-chron">March 31, 2010</span> of <span class="xn-money">$13.1 million</span>, up <span class="xn-money">$3.3 million</span> or 34% from the pro forma results for the three months ended <span class="xn-chron">March 31, 2009</span>.  Consolidated Adjusted EBITDA reflects income before income tax provision, equity in loss of unconsolidated subsidiaries, net interest expense, and depreciation.</p>
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    (Logo:  http://www.newscom.com/cgi-bin/prnh/20090529/DA24496LOGO )

    First quarter of 2010, highlights:

    --  Completed a 5.6 million gallon expansion of our Port Allen terminal
        located adjacent to Baton Rouge, Louisiana, which will go into service
        during the second quarter of 2010.
    --  Experienced first full quarter results of our Cincinnati facility and
        our Grays Harbor, Washington facility.


    
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<p><span class="xn-person">Peter Harding</span>, CEO, stated, "We are pleased with the overall results of Westway in the first quarter of 2010.  During this period, we have seen the benefits of our investments in 2009 in greenfield expansions and acquisitions that are reflective of the vision and opportunities we expect for our company.  We have grown in both footprint and performance.  Evidencing these achievements are a 34% increase in Adjusted EBITDA and an increase of 22.5% in storage capacity, respectively, over the same period in 2009. As a whole, we are excited about the first quarter results, which we believe are demonstrative of management's commitment to improving long-term performance and shareholder value."</p>
<p/>
<p><span class="xn-person">Mr. Harding</span> additionally commented, "The recent BP oil spill in the Gulf of <span class="xn-location">Mexico</span> has not had an impact on our business, and we do not believe it is likely to have a material effect on our business in the future."</p>
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    1st Quarter 2010 Actual Compared to 1st Quarter 2009 Pro Forma

    
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<p>The results for the 3-month period ended <span class="xn-chron">March 31, 2010</span> reflect actual results, and are in each case compared to pro forma results for the same period in 2009.  The pro forma figures are calculated as though we had acquired the bulk liquid storage and liquid feed supplements businesses of the ED&F Man group on <span class="xn-chron">January 1, 2009</span>, rather than <span class="xn-chron">May 28, 2009</span>, with certain adjustments, as described in our recent 10-Q.</p>
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    Overview of Operating Business Segments

    Bulk Liquid Storage

    --  First quarter of 2010, revenues increased $4.9 million to $22.9
        million, up 27% as compared to the pro forma results for the three
        months ended March 31, 2009.  This improvement is primarily
        attributable to the acquisition of our Cincinnati Terminal in
        mid-October 2009, the expansion of our Houston facility during 2009,
        and the completion of our Gray's Harbor Washington facility, which
        began operations in December 2009.
    --  Adjusted Gross Profit increased $3.8 million to $14.0 million, up 37%.
    --  Adjusted Gross Profit Margin increased from 56.7% to 61.1%.
    --  The contribution to Adjusted EBITDA from bulk liquid storage increased
        $4.6 million to $12.0 million, up 63% compared to the prior year pro
        forma first quarter results.


    Liquid Feed Supplements
    --  First quarter of 2010, revenues decreased by $9.6 million to $65.4
        million, or 13%, as compared to the pro forma results for the three
        months ended March 31, 2009.  This decrease in net revenue was driven
        by a decrease in volume for the first quarter of 2010 of 7% to 416,000
        tons, compared to 445,000 tons for the first quarter of 2009 as a
        recent consequence of liquid feed supplement products being marginally
        less competitive compared to dry feed products.
    --  Adjusted Gross Profit increased by $0.3 million to $7.7 million, or
5%.
    --  Adjusted Gross Profit Margin increased from 9.9% to 11.9%.
    --  The contribution to Adjusted EBITDA from liquid feed supplements
        increased $1.2 million to $5.1 million, up 30%.
    --  The increases in our Adjusted Gross Profit and Adjusted EBITDA were
        primarily due to effective implementation of new marketing initiatives
        with greater focus on value-added products in place of commodity-based
        products. In addition, we have been successful in reducing our raw
        material costs as market conditions allowed.


    Consolidated Results

    --  First quarter 2010, consolidated Adjusted EBITDA for Westway Group
Inc.
        totaled $13.1 million compared to $9.8 million for the pro forma
        results for the three months ended March 31, 2009.
    --  Revenues decreased by $4.7 million to $88.3 million, or 5%, as
compared
        to the same period in the prior year on a pro forma basis primarily
due
        to a decline in the liquid feed supplement volume.
    --  Adjusted Gross Profit increased by $4.1 million to $21.7 million, up
        23%.
    --  Adjusted gross profit margin increased from 18.9% to 24.6%.



    
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                                           (Actual)
                                 3 Months Ended March 31, 2010
                              Bulk         Liquid
                            Liquid          Feed         Consolidated
                            Storage      Supplement            (5)
                           -------       ----------      ------------
    
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    Revenue                 $22,901         $65,381           $88,282
    Adjusted Gross
     Profit (4)              13,992           7,749            21,687
    Adjusted Gross
     Profit Margin (6)        61.10%          11.85%           24.57%
    Adjusted EBITDA
     (1) (3)                 12,028           5,083            13,060
    Earnings Per Share
     -Basic (2)                   -                -           $0.05
    Earnings Per Share
     -Diluted (2)                 -                -           $0.05
    
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                                         (Pro Forma)
                                 3 Months Ended March 31, 2009
                              Bulk         Liquid
                            Liquid          Feed         Consolidated
                            Storage      Supplement            (5)
                           -------       ----------      ------------
    
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    Revenue                 $17,985         $75,029           $93,014
    Adjusted Gross
     Profit (4)              10,202           7,413            17,615
    Adjusted Gross
     Profit Margin (6)        56.73%           9.88%            18.94%
    Adjusted EBITDA
     (1) (3)                  7,396           3,909             9,767
    Earnings Per Share
     -Basic (2)                   -               -             $0.04
    Earnings Per Share
     -Diluted (2)                 -               -             $0.04




    Business Drivers

    Bulk Liquid Storage

    
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<p>In the liquid storage business, the primary drivers of performance are total capacity, capacity utilization, rates, and throughput.  Our total capacity increased from approximately 289 million gallons on <span class="xn-chron">March 31, 2009</span> to approximately 354 million gallons as of <span class="xn-chron">March 31, 2010</span>, and our capacity utilization was consistently high at 94% and 95%, respectively.  We utilize long-term contractual arrangements in our bulk liquid storage business, which include annual CPI adjustments.  Our performance is also sensitive to the molasses throughput of ED&F Man, our primary customer and one of the largest molasses traders in the world.</p>
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    Liquid Feed Supplements

    
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<p>The primary drivers of performance for the liquid feed supplement business are tonnage sold and margins earned.  We did experience a decline in tonnage to 416,000 tons for the three-month period ended <span class="xn-chron">March 31, 2010</span> compared to 445,000 tons for the same period in 2009.  Adjusted Gross Profit Margin increased from 9.9% to 11.9%.  The increase in our Adjusted Gross Profit and Adjusted EBITDA are primarily due to effective implementation of new marketing initiatives with greater focus on value-added products in place of commodity-based products.  Additionally, raw material costs were reduced as feed ingredient prices declined during the quarter.  Factors affecting these drivers are general economic conditions in the dairy and cattle industries, as well as weather conditions and the relative price of liquid ingredients.</p>
<p/>
<p><span class="xn-person">Peter Harding</span> further commented, "We are continuing to pursue new business opportunities which will expand our footprint and the Westway brand on a global basis.  The demand for liquid storage remains healthy, and we are continuing to gain new customers in this business.  Ingredient costs for liquid feed supplements declined over the last quarter and continuation of this trend would be a long-term benefit for the future profit performance of this business."</p>
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    2010 First Quarter Results Conference Call

    
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<p>The company has scheduled a conference call following this earnings release on <span class="xn-chron">Tuesday, May 11, 2010</span>, at <span class="xn-chron">10:30 a.m., Central Time</span>, <span class="xn-chron">11:30 a.m., Eastern Time</span>.  During the call, the company's Chief Executive Officer, <span class="xn-person">Peter Harding</span>, and Chief Financial Officer, Thomas Masilla, will discuss Westway's financial results.  Financial information referenced during the conference call will be posted to the "Investor Relations" section of the company's website, <a href="http://www.westway.com">http://www.westway.com</a>.</p>
<p/>
<p>To participate in the conference call, dial (408) 774-4004 or (877) 312-9404 and provide conference identification code 73229682.  The Company intends to have a playback available for seven days following the conference call, which may be accessed by calling (706) 645-9291 or (800) 642-1687 and providing conference identification code 73229682.  Thereafter, a playback will be available on the Company's website at <a href="http://www.westway.com">http://www.westway.com</a> for three months following the conference call.</p>
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<p>Forward-Looking Statements.  This press release includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended.  We have based these forward-looking statements on our current expectations and projections about future events.  These forward-looking statements are subject to known and unknown risks, uncertainties and assumptions about us that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by such forward-looking statements.  In some cases, you can identify forward-looking statements by terminology such as "may," "should," "could," "would," "expect," "plan," "anticipate," "believe," "estimate," "continue," or the negative of such terms or other similar expressions.  Factors that might cause or contribute to such a discrepancy include, but are not limited to, those described in our form 10-Q filed today and other SEC filings.</p>
<p/>
<p>About Westway Group, Inc.  Westway Group, Inc. ("Westway") is a leading provider of bulk liquid storage and related value-added services and a leading manufacturer and distributor of liquid animal feed supplements. Westway operates an extensive global network of 25 operating facilities providing approximately 354 million gallons of total bulk liquid storage shell capacity and 37 facilities producing approximately 1.6 million tons of liquid feed supplements annually. Our bulk liquid storage business is a global business with infrastructure that includes a network of terminals offering storage to manufacturers and consumers of agricultural and industrial liquids, located at key port and terminal locations throughout <span class="xn-location">North America</span> and in Western <span class="xn-location">Europe</span> and Asia. Our liquid feed supplements business produces liquid animal feed supplements that are sold directly to end users and feed manufacturers, primarily supplying the beef and dairy livestock industries.</p>
<p/>
<p>For more information for periods ending <span class="xn-chron">March 31, 2010</span> and <span class="xn-chron">March 31, 2009</span>, please refer to the company's Form 10-Q, which is available on Westway's website address at <a href="http://www.westway.com">www.westway.com</a></p>
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    Reconciliations:

    
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                                         (Actual)
                               3 Months Ended March 31, 2010
                            Bulk         Liquid
                          Liquid          Feed         Consolidated
                          Storage      Supplement            (5)
                         -------       ----------      ------------
    
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    Net Revenue           $22,901         $65,381           $88,282
    Cost of Sales               -          51,847            51,847
    Other Operating
     Costs and
     Expenses               8,909           5,785            14,748
    Adjusted Gross
     Profit (4)            13,992           7,749            21,687
    
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    Income (loss)
     before income
     tax benefit
     (provision) and
     equity in
     unconsolidated
     subsidiaries        $7,809        $3,741          $6,179
    Depreciation            4,245           1,340             5,602
    Interest
     Expense, net              26              (2)           (1,279)
    Adjusted EBITDA
     (3)                   12,028           5,083            13,060
    
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                                        (Pro Forma)
                               3 Months Ended March 31, 2009
                            Bulk         Liquid
                          Liquid          Feed         Consolidated
                          Storage      Supplement            (5)
                         -------       ----------      ------------
    
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    Net Revenue           $17,985         $75,029           $93,014
    Cost of Sales               -          60,649            60,649
    Other Operating
     Costs and
     Expenses               7,783           6,967            14,750
    Adjusted Gross
     Profit (4)            10,202           7,413            17,615
    
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    Income (loss)
     before income
     tax benefit
     (provision) and
     equity in
     unconsolidated
     subsidiaries          $4,739          $2,921            $5,203
    Depreciation            2,657             988             3,663
    Interest
     Expense, net               -                -            (901)
    Adjusted EBITDA
     (3)                    7,396           3,909             9,767



   
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<p>Note 1 - Consolidated Adjusted EBITDA includes corporate selling, general & administrative expenses of <span class="xn-money">$4.0 million</span> and <span class="xn-money">$1.5 million</span> for the actual three months ended <span class="xn-chron">March 31, 2010</span> and pro forma three months ended <span class="xn-chron">March 31, 2009</span> respectively.</p>
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    Note 2 -Includes accrued preferred stock dividends of $1.1 million.

    
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<p>Note 3- Adjusted EBITDA, as used herein, is defined as income (loss) before income tax benefit (provision) and equity in loss of unconsolidated subsidiaries, plus depreciation, plus interest expense net of interest income.</p>
<p/>
<p>Adjusted EBITDA is presented in this release because it is an important supplemental measure of performance and is frequently used by securities analysts, investors and other interested parties in the evaluation of businesses.  Other companies may calculate Adjusted EBITDA differently.</p>
<p/>
<p>Note 4- Adjusted Gross Profit, as used herein, is defined as net revenues, less cost of sales, and less other operating costs and expenses.  It is not reduced by depreciation or selling, general, and administrative expenses.  Other companies may calculate Adjusted Gross Profit differently.</p>
<p/>
<p>Note 5- Consolidated results include the results of the two operating segments, bulk liquid storage and liquid feed supplements, and the non-operating segment, corporate.</p>
<p/>
<p>Note 6- Adjusted Gross Profit Margin, as used herein, means Adjusted Gross Profit divided by net revenue.  Other companies may calculate Adjusted Gross Profit Margin differently.</p>
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For further information: For further information: Thomas A. Masilla, Jr., Chief Financial Officer of Westway Group, Inc., +1-504-636-4245 Web Site: http://www.westway.com

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WESTWAY GROUP, INC.

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