Dakota Growers income rises 27% in Q3

by Eric Schroeder
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CARRINGTON, N.D. — Net income of Dakota Growers Pasta Co. in the third quarter ended April 30 was $1,882,000, equal to 14c per share on the common stock, up 27% from $1,487,000, or 11c per share, in the third quarter of fiscal 2006.

Net revenues of the company were $46,084,000, up 10% from $41,968,000 in the third quarter of the previous year.

For the first nine months of fiscal 2007, net income was $4,160,000, or 32c per share, up sharply from $2,053,000, or 16c per share. Revenues for the nine months were $142,190,000, up 11% from $128,530,000.

"The increase (in revenues) resulted from higher pasta per unit selling prices and higher pasta sales volumes," the company said in a 10-Q report filed June 15 with the Securities and Exchange Commission. "Benefits derived from increased sales were partially offset by higher durum costs. Durum prices have increased significantly during fiscal year 2007 when compared to fiscal year 2006 prices. The company has generally been successful in obtaining sales price increases to offset the higher durum cost. However, the company is uncertain whether it will be able to pass through higher durum or other input costs on a timely basis in the future. Higher mill byproduct sales prices in fiscal 2007 have helped to offset the negative impact of higher durum costs."

Overall, Dakota Growers said pasta sales volumes for the third quarter increased 0.7% along with an increase in pasta per unit selling prices of 7.7%. Revenues from the retail market rose $900,000, or 4.6%, while food service revenues climbed $1,700,000, or 14%. Ingredient sales jumped $700,000, or 9.5%, during the quarter.

Dakota Growers markets semolina production in excess of its own requirements as well as durum wheat flour, other flour blends and byproducts of the durum milling process. Revenues from those mill products totaled $3,800,000 during the quarter, up $800,000 from the same period a year ago.

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