HOUSTON, Aug. 3, 2016 /PRNewswire/ -- Omega Protein Corporation (NYSE:OME), a nutritional product company and a leading integrated provider of specialty oils and specialty protein products, today reported financial results for the second quarter and six months ended June 30, 2016.
Second Quarter 2016 Highlights
- Revenues: $112.7 million, compared to $93.2 million in the same period a year ago
- Gross profit margin: 29.6%, compared to 27.7% in the same period a year ago
- Net income:$5.7 million, or $14.1 million on an adjusted basis, compared to $8.8 million, or $9.6 million, on an adjusted basis, in the same period a year ago
- Earnings per diluted share:$0.25, or $0.62 on an adjusted basis, compared to $0.40, or $0.43 on an adjusted basis, in the same period a year ago
- Adjusted EBITDA: $28.6 million, compared to $21.6 million in the same period a year ago
"Our second quarter consolidated financial results reflect the continued strength in our animal nutrition segment," commented Bret Scholtes, Omega Protein's President and Chief Executive Officer. "We are pleased with our season-to-date fish catch and higher fish oil yields. At the same time, we are intently focused on the improvement of our human nutrition segment as we build a stronger foundation through our strategic initiatives and regain operating momentum for sustainable growth. Going forward, we will continue to leverage our competitive advantages to drive growth in revenues and further improve operational efficiencies across both our animal and human nutrition segments."
Second Quarter 2016 Results
The Company's revenues increased 21% from $93.2 million in the same period last year to $112.7 million. This increase was due to an increase in animal nutrition revenues of $24.7 million, partially offset by a $5.3 million decrease in human nutrition revenues. The increase in animal nutrition revenues was primarily due to increased sales volumes of 47% and 101% for the Company's fish meal and fish oil, respectively, partially offset by decreased sales prices of 9% and 20% for the Company's fish meal and fish oil, respectively. The decrease in fish oil sales prices is a reflection of prevailing market conditions and prices when underlying sales contracts were executed, as well as a change in the product mix of higher priced refined and lower priced crude oils. The decrease in human nutrition revenues was primarily due to lower sales of specialty oils, partially offset by increased sales of protein products. The composition of revenues by nutritional product line for the second quarter of 2016 was 38% fish meal, 33% fish oil, 28% dietary supplements and 1% fish solubles and other.
Second quarter of 2016 revenues increased 33% from $84.8 million in the first quarter of 2016 to $112.7 million. This increase was due to a $31.4 million increase in animal nutrition revenues, partially offset by a decrease of $3.6 million in human nutrition revenues. The increase in animal nutrition revenues was due to increased fish meal and fish oil sales volumes of 28% and 181% respectively, partially offset by decreased fish meal and fish oil sales prices of 2% and 12%, respectively. The decrease in human nutrition revenues was primarily due to decreased sales of specialty oils, partially offset by increased sales of protein products.
The Company reported gross profit of $33.4 million, or 29.6% as a percentage of revenues, for the second quarter of 2016, versus $25.8 million, or 27.7% as a percentage of revenues, in the second quarter of 2015. The increase in gross profit as a percentage of revenues was due to an improvement in the animal nutrition segment, partially offset by a decrease in the human nutrition segment. Animal nutrition gross profit as a percentage of revenues increased from 36.7% to 37.4%, due primarily to higher fish catch and production in 2015 compared to 2014, which led to a decrease in the cost per unit of sales in the 2016 period. Human nutrition gross profit as a percentage of revenues decreased from 13.7% to 9.2% due primarily to decreased gross profit as a percentage of revenues for specialty oils.
Compared to the first quarter of 2016, second quarter gross profit increased from $24.8 million, or 29.3% as a percentage of revenues, to $33.4 million, or 29.6% as a percentage of revenues. The increase in gross profit as a percentage of revenues was due to an increase in the proportion of revenues attributable to the animal nutrition segment. Animal nutrition gross profit as a percentage of revenues decreased from 40.7% to 37.4% due to a higher cost per unit of sales for 2016 production. Human nutrition gross profit as a percentage of revenues decreased from 12.6% to 9.2% primarily as a result of lower gross profit as a percentage of revenues for protein products and specialty oils, due in part to a $0.6 million protein product inventory write-down.
Selling, general and administrative expense, including research and development expense ("SG&A"), for the second quarter increased to $11.8 million compared to $10.8 million in the second quarter of 2015 and $9.6 million in the first quarter of 2016. The increases were primarily due to professional fees for services as a result of the Company's proxy contest, as well as labor and other expenses.
The Company recorded goodwill impairment expenses in the second quarter of 2016 of $11.6 million related to the Wisconsin Specialty Protein business in the human nutrition segment. There were no impairment charges recognized in the second quarter of 2015.
Plant closure expenses were $1.0 million in the second quarter of 2016 compared to $0.6 million in the second quarter of 2015. The second quarter of 2016 expense is primarily due to the Company's decision to focus its omega-3 oils manufacturing operations on non-concentrated oils and dispose of its oil concentration facility.
Gain on foreign currency related to Bioriginal Food & Science ("Bioriginal") was $0.1 million for the second quarter of 2016 compared to a $0.1 million gain in the second quarter of 2015 and a $1.4 million loss in the first quarter of 2016.
Net income for the second quarter of 2016 was $5.7 million ($0.25 per diluted share) compared to $8.8 million ($0.40 per diluted share) in the same period last year and $8.4 million ($0.37 per diluted share) in the first quarter of 2016. Excluding adjustments for certain items, adjusted net income for the second quarter of 2016 would have been $14.1 million ($0.62 per diluted share), compared to $9.6 million ($0.43 per diluted share) in the same period last year and $9.1 million ($0.40 per diluted share) for the first quarter of 2016.
Adjusted EBITDA totaled $28.6 million for the second quarter of 2016, compared to $21.6 million for the same period last year and $20.4 million for the first quarter of 2016.
Six Month 2016 Results
Revenues in the first six months of 2016 increased 20% to $197.5 million compared to $164.8 million for the six months ended June 30, 2015. The increase in revenues was due to a $38.1 million increase in animal nutrition revenues partially offset by a $5.4 million decrease in human nutrition revenues. The increase in animal nutrition revenues was primarily due to increased sales volumes of 41% and 102% for the Company's fish meal and fish oil, respectively, partially offset by decreased sales prices of 7% and 20% for the Company's fish meal and fish oil, respectively. The decrease in fish oil sales prices is mainly a reflection of prevailing market conditions and prices when underlying sales contracts were executed, as well as a change in the product mix of higher priced refined and lower priced crude oils. The decrease in human nutrition revenues was primarily due to a decrease in sales of specialty oils and other nutraceutical ingredients, partially offset by an increase in sales of protein products.
The Company recorded gross profit of $58.2 million, or 29.5% as a percentage of revenues, for the first six months of 2016, versus gross profit of $40.6 million, or 24.7% as a percentage of revenues, for the first six months of 2015. The increase in gross profit as a percentage of revenues was due to an improvement in the animal nutrition segment from 33.5% to 38.7%, and an increase in the proportion of revenues attributable to the animal nutrition segment, partially offset by a reduction in human nutrition gross profit as a percentage of revenues from 13.0% to 11.0%.
Net income for the six months ended June 30, 2016 was $14.0 million ($0.62 per diluted share) compared to $10.5 million ($0.47 per diluted share) for the same period last year. Excluding adjustments for certain items, net income for the six months ended June 30, 2016 would have been $23.2 million ($1.03 per diluted share) compared to $12.2 million ($0.55 per diluted share).
Adjusted EBITDA totaled $49.1 million for six months ended June 30, 2016, an increase from $32.0 million for the same period last year.
Balance Sheet
Total debt decreased $18.1 million from $24.1 million on December 31, 2015 to $6.0 million on June 30, 2016. Stockholders' equity increased $18.5 million to $313.7 million as of June 30, 2016 compared to $295.2 million as of December 31, 2015.
Conference Call Information
Omega Protein will host a conference call on its second quarter and six month financial results at 8:30 a.m., Eastern Time, on Thursday, August 4, 2016. 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 and the prepared remarks will be available beginning shortly after the conclusion of the call at www.omegaprotein.com and will be available for 30 days. A telephonic playback will be available from 11:30 a.m. ET, August 4, 2016, through August 18, 2016. Participants can dial (877) 870-5176 in North America, and international listeners may dial (858) 384-5517. The password is 13640505.
About Omega Protein Corporation
Omega Protein Corporation (NYSE: OME) is a century old nutritional product company that develops, produces and delivers healthy products throughout the world to improve the nutritional integrity of 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 specialty oils, specialty protein products and nutraceuticals.
The Company operates eight manufacturing facilities located in the United States, Canada and Europe. The Company also operates more than 30 vessels to harvest menhaden, a fish abundantly found in the Atlantic Ocean and Gulf of Mexico.
For More Information
Visit Omega Protein at www.omegaprotein.com, follow us on Twitter at https://twitter.com/omegaprotein, or find us on LinkedIn at https://www.linkedin.com/company/omega-protein-inc-.
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.
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