Penford Announces Accounting Corrections

  Penford Announces Accounting Corrections

Business Wire

CENTENNIAL, Colo. -- June 19, 2013

Penford Corporation (Nasdaq: PENX), a leader in ingredient systems for
industrial and food applications, announced today that its management and
Audit Committee had determined that the Company’s financial statements for
fiscal years 2012, 2011 and 2010 and for the first two fiscal quarters of 2013
should be restated to make necessary accounting corrections.

Additional details concerning this determination appear in a Current Report on
Form 8-K filed today by the Company with the Securities and Exchange
Commission.

These restatements will reflect the correction in the accounting treatment for
proceeds received from the sale of certain by-products generated by the
Company’s industrial starch processing operations based in Cedar Rapids, IA.
Such by-products include corn gluten meal, corn germ that is sold to a third
party to be refined into corn oil, as well as materials that are primarily
sold as or used in animal feed.

In prior reporting periods, the Company recorded the proceeds from the sale of
these by-products as a reduction of the cost of sales. The Company had
previously disclosed the amounts of its by-products sales in prior reporting
periods, including fiscal years 2012, 2011 and 2010, as well as its accounting
treatment for such sales. After several months of consultation and review with
the staff of the Securities and Exchange Commission, the Company concluded
that the proceeds from the sale of by-products should be classified as sales
rather than as a reduction of cost of sales in its consolidated statements of
operations.

The restatements affect the amounts previously reported for the Company’s
consolidated sales and cost of sales and the sales of the Company’s Industrial
Ingredients segment. The impact of the restatements will be to increase the
Company’s consolidated and Industrial Ingredients segment sales and cost of
sales by $71.8 million, $58.3 million and $40.2 million for the years ended
August 31, 2012, 2011 and 2010, respectively; $23.2 million and $17.4 million
for the quarters ended November 30, 2012 and 2011, respectively; $21.0 million
and $44.2 million for the three- and six-month periods ended February 28,
2013, respectively; and $17.3 million and $34.7 million for the three- and
six-month periods ended February 29, 2012.

The restatements do not affect the Company’s previously reported consolidated
gross margin, income (loss) from operations, net income (loss) or earnings
(loss) per share or any items reported in the consolidated balance sheets or
the consolidated statements of comprehensive income (loss), cash flows or
stockholders’ equity.

About Penford Corporation

Penford Corporation (NASDAQ: PENX – www.penford.com) develops, manufactures
and markets a broad range of specialty ingredients derived from natural
sources that are used in food and industrial applications. Products include
food ingredients, pet and animal products, sustainable bioproducts to replace
petroleum-based chemicals, starches for paper and packaging products, and
biofuels. Penford has seven manufacturing and/or research locations in the
United States.

Contact:

Penford Corporation
Steve Cordier, 303-649-1900
Senior Vice President & Chief Financial Officer
steve.cordier@penx.com
 
Press spacebar to pause and continue. Press esc to stop.