Imperial Sugar Company Announces Fiscal 2007 Financial Results and Declares $2.50 Special Dividend

Imperial Sugar Company (NASDAQ:IPSU) today announced financial results for its fourth quarter and fiscal year ended September 30, 2007 and announced the declaration of a special dividend of $2.50 per share payable January 3, 2008 to shareholders of record December 24, 2007. For the fiscal year ended September 30, 2007, the Company reported income from continuing operations of $43.6 million, or $3.71 per diluted share compared to $48.4 million or $4.31 per diluted share in fiscal 2006. The Company reported net income of $40.2 million or $3.43 per diluted shares for fiscal 2007, compared to $50.1 million, or $4.45 per diluted share for fiscal 2006. The current pre-tax income was $57.3 million (including a pre-tax gain aggregating $12.5 million from asset dispositions, an arbitration settlement and a gain on its commodity exchange seats), compared to pre-tax income of $73.7 million in fiscal 2006. "We are very pleased with our financial results for the last fiscal year,” said Robert A. Peiser, Imperial’s president and chief executive officer. "The favorable industry dynamics that began during our 2006 fiscal year continued through the first half of this year and enabled us to maintain margins across many of our channels to very acceptable levels for a good part of the year. "Unfortunately, as the year progressed, the fundamental supply/demand balance shifted with prices of our product softening during the latter part of the year. As we have discussed in the past, we expect soft prices to continue into our 2008 fiscal year, mitigated somewhat by lower raw sugar prices. "In recognition of the very strong results for the full year and our strong financial position, including a substantial amount of cash, our Board of Directors has declared a $2.50 special dividend payable January 3, 2008 to shareholders of record as of December 24, 2007. This is in addition to our regular quarterly dividend program and is the third special dividend we have paid since November 2005. We are pleased to be able to once again demonstrate to our investors our commitment towards enhancing stockholder value while retaining a very strong balance sheet with ample liquidity to both manage our business in this volatile domestic sugar industry and provide sufficient flexibility for appropriate strategic initiatives.” For the year ended September 30, 2007, revenues from continuing operations decreased 7.5% to $875.5 million from $946.8 million in fiscal 2006, because of lower domestic sales prices, as well as a 5.8% reduction in domestic sales volumes. Gross margin as a percent of sales decreased to 12.0% in fiscal 2007, from 13.8% the year earlier. Selling, general and administrative expense for fiscal 2007 increased $5.4 million, primarily due to increased employee benefit costs, litigation costs and corporate development expenses. For the fourth fiscal quarter ended September 30, 2007, the Company reported income from continuing operations of $7.8 million or $0.65 per diluted share, compared to $15.5 million or $1.34 per diluted share during the same quarter last year. Pre-tax income was $5.3 million in the current quarter (including pre-tax gains or $1.4 million from asset dispositions), compared to $23.3 million in last year’s fourth quarter. Net sales from continuing operations for the fiscal 2007 fourth quarter were $219.6 million, compared to $240.3 million for the fourth fiscal quarter last year due primarily to lower domestic sugar prices. Gross margin as a percentage of revenue decreased to 8.7% in the fourth fiscal quarter from 15.5% in the same quarter of the previous year primarily as a result of the lower sales prices. As previously announced, Company officials will discuss Imperial Sugar’s operating results for the quarter and year ended September 30, 2007, its current financial position and its business strategies on a call and webcast to be held at 11:00 a.m. EST on Monday, December 10, 2007. Participants wishing to listen and participate in a brief question-and-answer session after the presentation can dial 1-800-295-3991 and enter the Passcode: 41968150. The conference call also can be accessed via live audio webcast by visiting Imperial Sugar’s web site at http://www.imperialsugar.com and clicking on the "Q4 2007 Imperial Sugar Earnings Conference Call” icon under "Investor Relations”. For those who are unable to listen to the call during its live broadcast, a replay of the entire presentation will be available on the company’s web site beginning one hour following the conclusion of the call. In addition to the webcast replay, a telephone replay will also be available beginning one hour following the conclusion of the call that can be accessed by dialing 1-888-286-8010 and entering the Passcode: 36913520. Both replays will be available through January 10, 2008. About Imperial Sugar Imperial Sugar Company is one of the largest processors and marketers of refined sugar in the United States to food manufacturers, retail grocers and foodservice distributors. The Company markets products nationally under the Imperial®, Dixie Crystals® and Holly® brands. For more information about Imperial Sugar, visit www.imperialsugar.com. Statements regarding future market prices and margins, future import and export levels, future government and legislative action, future operating results, future availability of raw sugar, operating efficiencies, future investments and initiatives, future cost savings, future product innovations, future energy costs, our liquidity and ability to finance our operations, future pension payments and other statements that are not historical facts contained in this release are forward-looking statements that involve certain risks, uncertainties and assumptions. These include, but are not limited to, market factors, farm and trade policy, our ability to realize planned cost savings and other improvements, the available supply of sugar, energy costs, the effect of weather and economic conditions, results of actuarial assumptions, actual or threatened acts of terrorism or armed hostilities, legislative, administrative and judicial actions and other factors detailed in the Company’s Securities and Exchange Commission filings. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual outcomes may vary materially from those indicated. IMPERIAL SUGAR COMPANY AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF OPERATIONS(In Thousands, Except Per Share Data) (Unaudited)         Three Months Ended September 30, Twelve Months Ended September 30, 2007 2006 2007 2006   Net Sales $ 219,563 $ 240,279 $ 875,527 $ 946,823 Cost of Sales   (200,374 )   (203,100 )   (770,573 )   (816,371 ) Gross Margin 19,189 37,179 104,954 130,452   Selling, General and Administrative Expense (12,276 ) (10,732 ) (49,596 ) (44,149 ) Depreciation (3,708 ) (3,816 ) (14,127 ) (14,499 ) Gain on Arbitration Settlement - - 6,752 - Gain on Commodity Exchange Seats - - 3,654 - Gain (Loss) on Operating Asset Dispositions   1,446     -     2,105     (116 ) Operating Income 4,651 22,631 53,742 71,688   Interest Expense (311 ) (530 ) (1,849 ) (2,156 ) Interest Income 996 708 3,951 2,237 Other Income (Expense), Net   (34 )   482     1,464     1,929     Income From Continuing Operations Before Income Taxes 5,302 23,291 57,308 73,698 Benefit (Provision) for Income Taxes   2,472     (7,835 )   (13,753 )   (25,286 ) Income from Continuing Operations 7,774 15,456 43,555 48,412 Income (Loss) from Discontinued Operations   460     275     (3,316 )   1,647     Net Income $ 8,234   $ 15,731   $ 40,239   $ 50,059     Basic Earnings Per Share of Common Stock: Income from Continuing Operations $ 0.67 $ 1.39 $ 3.81 $ 4.44 Income (Loss) from Discontinued Operations   0.04     0.02     (0.29 )   0.15   Net Income $ 0.71   $ 1.41   $ 3.52   $ 4.59     Diluted Earnings Per Share of Common Stock: Income from Continuing Operations $ 0.65 $ 1.34 $ 3.71 $ 4.31 Income (Loss) from Discontinued Operations   0.04     0.02     (0.28 )   0.14   Net Income $ 0.69   $ 1.36   $ 3.43   $ 4.45   IMPERIAL SUGAR COMPANY AND SUBSIDIARIESCONDENSED CONSOLIDATED BALANCE SHEETS(In Thousands of Dollars)(Unaudited)     September 30, September 30, 2007 2006   Cash and Cash Equivalents $ 74,229 $ 56,250 Marketable Securities 20,693 308 Accounts Receivable, Net 49,409 54,192 Inventory 100,120 136,999 Other Current Assets   7,342   12,317   Current Assets 251,793 260,066 Property, Plant & Equipment, Net 88,649 90,449 Deferred Income Taxes, Net 13,226 15,073 Other Assets   6,397   5,555   Total $ 360,065 $ 371,143     Accounts Payable, Trade $ 69,057 $ 67,574 Current Maturities of Long-Term Debt - 2,665 Other Current Liabilities   20,991   30,214   Current Liabilities 90,048 100,453 Long-Term Debt 1,500 4,165 Current Maturities of Long-Term Debt   -   (2,665 ) Long-Term Debt, Net of Current Maturities 1,500 1,500 Other Liabilities 68,426 83,305 Shareholders' Equity   200,091   185,885   Total $ 360,065 $ 371,143     Shares of Common Stock Issued Outstanding 11,808,743 11,292,449