Legumex Walker’s special crops segment performed better during the first quarter of 2015 than it did in the last quarter of 2014.
The segment posted $5.9 million in adjusted earnings before interest, taxes, depreciation and amortization (EBITDA), which is much higher than the $1.4 million earned in the previous quarter.
“That is four times what we earned from special crops in Q4,” company president Joel Horn told investment analysts during a conference call.
“That puts special crops right back on track.”
He attributed the turnaround to a late 2014 harvest, which pushed special crop sales from the fourth quarter of 2014 to the first quarter of 2015.
Analysts who participated in the previous quarter’s conference call raised concerns about the company’s accounts receivables of $53 million, of which $9 million were more than 90 days past due as of Dec. 31, 2014.
The figure had blossomed to $58 million with $9 million past 90 days by March 31, 2015.
However, Horn said the company has made significant progress on accounts receivable since March 31.
“We have collected cash receipts of approximately $32 million, of which $24 million was applied to receivables outstanding as at March 31,” he said.
Adjusted gross profit for all business segments for the quarter was $8.5 million, down from $9 million in the first quarter of 2014.
The lower profit was attributed to higher margins in the special crops segment being offset by poor crush margins in the company’s oilseed division.
Horn said he could not provide an update on work that a special committee is doing to explore strategic alternatives for the company, including the possible sale of part or all of the business.
However, he said the committee is helping Legumex Walker change its strategy to put more of a focus on developing and marketing high margin food ingredients.
“The market for these types of products seems to be growing at ever increasing rates,” said Horn.
He said moving up the value chain presents a great opportunity for the company’s special crops and specialty oil businesses. The challenge is how to redeploy people and capital to take advantage of that opportunity.
“I hope that we will be able to get back to you soon with more answers to those questions,” said Horn.
sean.pratt@producer.com
