EXHIBIT 99 PRESS RELEASE
Published on
Exhibit 99
[Midwest Grain Products Logo and Address]
News Release
FOR IMMEDIATE RELEASE: MIDWEST GRAIN REPORTS SIGNIFICANT INCREASE
IN THIRD QUARTER EARNINGS
ATCHISON, Kan., May 8, 2000--Midwest Grain Products, Inc. (MWGP), today
reported that the company's net income for the third quarter of fiscal 2000
climbed to $1,607,000, or 18 cents per share, significantly overshadowing the
prior year's third quarter net income of $232,000, or 2 cents per share. Sales
for the period, which ended March 31, 2000, were $57,656,000 compared to sales
of $56,958,000 for the third quarter of fiscal 1999.
For the first nine months of fiscal 2000, the company had net income of
$3,921,000, or 43 cents per share, on sales of $172,593,000, compared to net
income of $2,328,000, or 24 cents per share, on sales of $162,813,000 for the
first nine months of fiscal 1999.
According to Ladd Seaberg, president and chief executive officer, the
third quarter earnings improvement resulted primarily from increased demand for
vital wheat gluten, specialty wheat proteins and wheat starches. Lower raw
material costs for grain on a per unit basis also had a favorable impact on the
quarter's results, he noted. The company's third quarter alcohol sales,
meanwhile, continued to be subjected to tight market conditions, squeezing
selling prices below levels of a year ago. However, Seaberg reported, alcohol
sales currently are benefitting from increased demand and improved pricing in
the fuel grade sector.
Seaberg also reported that steady growth is expected to continue in
sales of the company's value-added wheat-based ingredients, which are produced
and marketed for use in a variety of food and non-food applications. "These
products, consisting of specialty and modified proteins and starches, hold
tremendous promise and are the focal point of our long-term growth strategies,"
Seaberg said. "They continue to effectively prove their ability to satisfy
evolving needs in the marketplace such as helping customers meet growing demand
for products that offer greater consumer convenience, selection and quality."
To strengthen the company's sales capabilities, "we are fortifying our
marketing operations with an enhanced organizational structure that should allow
us to more effectively and rapidly move our products, particularly our specialty
proteins and starches, into a higher growth mode," Seaberg stated. "Measures we
are taking include the creation of an executive vice president's position to
oversee the development and implementation of all marketing and sales programs,
and the addition of experienced formulation scientists to assist our sales
personnel in providing enhanced technical support services to customers.
Additionally, we intend to actively explore possibilities for future
acquisitions and/or relationships that would complement our growth strategies,
add to our profitability and help strengthen stockholder value," he said.
"In the immediate future," Seaberg continued, "we expect fuel alcohol
demand to remain at or near the current higher level through the summer months
when motor fuel usage in this country typically climbs." He added that
grain-based fuel alcohol, or ethanol as it is commonly known, has
recently gained increased favor in the marketplace as "the safe, effective and
logical answer" to the nation's gasoline oxygenate needs. This has resulted from
the Environmental Protection Agency's recent proposal to phase-out MTBE, a
synthetically-derived oxygenate, as the result of health-related environmental
concerns. Seaberg also pointed out that prices for corn, which is used in the
alcohol production process, have nudged up due mainly to concerns about dry soil
conditions in sections of the nation's grain belt. As a result, improvements in
fuel alcohol prices could be partially offset, he noted.
While continuing at a higher rate than was experienced a year ago, sales of the
company's vital wheat gluten have slackened some since the end of the third
quarter, Seaberg reported. "Although the nearly two-year-old quota on imports of
foreign gluten has helped alleviate some of the severe effects of excessive,
artificially-priced shipments from the European Union, we have seen a
substantial rise in gluten shipments from other parts of the world, most notably
Poland," he said. "Furthermore, with the opening of the third year of the quota
on June 1, the market could be immediately inundated with imports as individual
producers race to beat quota limits placed on their respective countries."
Seaberg indicated that a stabilization or lowering of grain raw material costs
could help counter these conditions in the gluten market.
Seaberg added that actions to improve the effectiveness of the quota presently
are being pursued in Washington. "While there is no certainty as to when or to
what extent additional steps might be taken, further action on this issue would
reinforce the intent of the quota to help create a more level and stable playing
field in the gluten market," Seaberg stated. "Additionally," he said, "it would
demonstrate to the American public and to current and future trade partners that
the United States is sincere about enforcing necessary safeguard measures to
preserve fair trade.
This news release contains forward-looking statements as well as historical
information. Forward- looking statements are identified by or are associated
with such words as "intend," "believe," "estimate," "expect," "anticipate,"
"hopeful," "should," "may" and similar expressions. They reflect management's
current beliefs and estimates of future economic circumstances, industry
conditions, company performance and financial results and are not guarantees of
future performance. The forward-looking statements are based on many assumptions
and factors, including those relating to grain prices, gasoline prices, energy
costs, product pricing, competitive environment and related marketing
conditions, operating efficiencies, access to capital and actions of
governments. Any changes in the assumptions or factors could produce materially
different results than those predicted and could impact stock values.
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