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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended January 31, 2004
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from_________________to__________________
COMMISSION FILE NUMBER 0-1287
STERLING SUGARS, INC.
____________________________________________________________________
Exact name of registrant as specified in its charter
Louisiana 72-0327950
_______________________________ ______________________________
State or other jurisdiction of IRS employer identification
incorporation or organization number
P. O. Box 572, Franklin, La. 70538
____________________________________________________________________
Address of principal executive offices Zip Code
Registrant's telephone number including area code 337 828 0620
Not Applicable
____________________________________________________________________
Former name, former address and former fiscal year, if changed since
last report.
Indicate by check mark whether registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or such shorter
period that the registrant was required to file such reports), and
(2) has been subject to such filing requirements for the past 90 days.
YES X NO
Indicate by check mark whether the registrant is an accelerated filer
(as defined in Rule 126-2 of the Exchange Act). Yes No X
There were 2,500,000 common shares outstanding at March 5, 2004.
Total number of pages -18-
-1-
STERLING SUGARS, INC.
I N D E X
PAGE
NUMBER
PART I: FINANCIAL INFORMATION:
ITEM 1. FINANCIAL STATEMENTS
Condensed balance sheets January 31, 2004
(unaudited) and July 31, 2003 I-1
Statements of earnings and retained earnings
Six months ended January 31, 2004 (unaudited)
and 2003 (unaudited) I-2
Statements of earnings and retained earnings
Three months ended January 31, 2004 (unaudited)
and 2003 (unaudited) I-3
Statements of cash flows
Six months ended January 31, 2004 (unaudited)
and 2003 (unaudited) I-4
Notes to condensed financial statements
Three and six months ended January 31, 2004
and 2003 I-5
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS I-6
ITEM 4. CONTROLS AND PROCEDURES I-9
PART II. OTHER INFORMATION:
ITEM 4. SUBMISSSION OF MATTERS TO A VOTE OF SECURITY
HOLDERS II-1
ITEM 6. EXHIBITS AND REPORTS ON FORM 8K II-1
-2-
STERLING SUGARS, INC.
CONDENSED BALANCE SHEETS
January 31, July 31,
2004 2003
UNAUDITED NOTE
ASSETS: ---------------------------
CURRENT ASSETS:
Cash and short-term investments $ 506,991 $ 1,110
Accounts receivable 2,622,632 195,943
Inventories at lower of cost or market 12,778,887 2,638,131
Deferred income taxes 1,576,000 1,576,000
Other current assets 269,545 415,183
------------- -------------
TOTAL CURRENT ASSETS $ 17,754,055 $ 4,826,367
------------- -------------
Property, plant and equipment - net $ 26,243,975 $ 24,928,615
------------- -------------
Expenditures for future crops $ 379,654 $ 379,654
------------- -------------
Notes receivable - No allowance for
doubtful accounts considered necessary $ 225,745 $ 255,646
------------- -------------
Other assets $ 56,498 $ 50,583
------------- -------------
$ 44,659,927 $ 30,440,865
============= =============
LIABILITIES AND STOCKHOLDERS' EQUITY:
CURRENT LIABILITIES:
Notes Payable $ 5,096,000 $ 4,207,023
Accounts payable and accrued expenses 3,563,009 1,449,124
Due cane growers 6,788,855 2,202,392
Current portion long-term debt 1,168,250 618,250
------------- -------------
TOTAL CURRENT LIABILITIES $ 16,616,114 $ 8,476,789
------------- -------------
Long-term debt $ 4,939,439 $ 3,167,085
------------- -------------
Deferred income taxes $ 2,475,000 $ 2,475,000
------------- -------------
STOCKHOLDERS' EQUITY:
Common stock $ 2,500,000 $ 2,500,000
Additional paid in capital 40,455 40,455
Retained earnings 18,088,919 13,781,536
------------- -------------
$ 20,629,374 $ 16,321,991
------------- -------------
$ 44,659,927 $ 30,440,865
============= =============
NOTE: The balance sheet at July 31, 2003 has been taken from the
audited financial statements at that date and condensed.
See notes to condensed financial statements
I-1 -3-
STERLING SUGARS, INC.
STATEMENT OF EARNINGS AND RETAINED EARNINGS
(UNAUDITED)
SIX MONTHS ENDED JANUARY 31
---------------------------
2004 2003
REVENUES: ----------- -----------
Sugar and molasses sales $26,925,532 $31,180,358
Interest earned 4,790 781
Mineral leases and royalties 264,248 151,738
Gain (loss) on disposal of Assets - 171,768
Other (NOTE B) 2,845,138 1,236,621
----------- -----------
$30,039,708 $32,741,266
COSTS AND EXPENSES: ----------- -----------
Cost of products sold $22,225,215 $30,269,836
General and administrative 541,856 526,725
Interest expense 325,245 194,182
----------- -----------
$23,092,316 $30,990,743
----------- -----------
NET EARNINGS BEFORE INCOME TAXES $ 6,947,392 $ 1,750,523
INCOME TAXES 2,640,009 665,199
----------- -----------
NET EARNINGS (NOTE B) $ 4,307,383 $ 1,085,324
RETAINED EARNINGS AT BEGINNING OF PERIOD 13,781,536 16,015,819
----------- -----------
RETAINED EARNINGS AT END OF PERIOD $18,088,919 $17,101,143
=========== ===========
NET EARNINGS PER SHARE $ 1.72 $ .43
=========== ===========
See notes to condensed financial statements
I-2 -4-
STERLING SUGARS, INC.
STATEMENT OF EARNINGS AND RETAINED EARNINGS
(UNAUDITED)
THREE MONTHS ENDED JANUARY 31
-----------------------------
2004 2003
----------- -------------
REVENUES:
Sugar and molasses sales $20,503,174 $22,739,432
Interest earned 3,870 -
Mineral leases and royalties 133,892 65,464
Gain on disposal of assets - 171,768
Other 684,884 798,251
----------- -----------
$21,325,820 $23,774,915
----------- -----------
COSTS AND EXPENSES:
Cost of products sold $16,142,672 $19,921,672
General and administrative 328,872 266,958
Interest expense 188,831 112,876
----------- -----------
$16,660,375 $20,301,506
----------- -----------
NET EARNINGS BEFORE INCOME TAXES $ 4,665,445 $ 3,473,409
INCOME TAXES 1,772,869 1,319,896
----------- -----------
NET EARNINGS $ 2,892,576 $ 2,153,513
RETAINED EARNINGS AT BEGINNING OF PERIOD 15,196,343 14,947,630
----------- -----------
RETAINED EARNINGS AT END OF PERIOD $18,088,919 $17,101,143
=========== ===========
NET EARNINGS (LOSS) PER SHARE $ 1.16 $ .86
=========== ===========
See notes to condensed financial statements
I-3 -5-
STERLING SUGARS, INC.
STATEMENT OF CASH FLOWS
(UNAUDITED)
SIX MONTHS ENDED JANUARY 31
---------------------------
2004 2003
OPERATING ACTIVITIES: ------------ ------------
Net earnings $ 4,307,383 $1,085,324
Adjustments to reconcile net earnings to net
cash provided by operating activities:
Depreciation 1,115,725 985,553
(Gain) loss on disposl of assets - ( 171,768)
Changes in operating assets and liabilities:
Increase in accounts receivable (2,426,689) (1,564,220)
Increase in inventories (10,140,756) (6,392,473)
Increase in accounts payable accrued
expenses and due cane growers 6,700,438 7,729,536
Other items - net 137,652 129,138
----------- ------------
Net cash provided (Used In) Operating
Activities $( 306,247) $1,801,090
------------- -------------
INVESTING ACTIVITIES:
(Increase) decrease in Notes receivable 29,901 28,858
Purchase of property, plant and equipment (2,429,104) (453,764)
Proceeds from sale of assets - 132,710
------------- -------------
Net cash used in investing activities $ (2,399,203) $( 292,196)
------------- -------------
FINANCING ACTIVITIES:
Proceeds from short-term notes payable
and long-term debt $ 21,904,977 $ 22,724,340
Payments on short-term notes payable
and long-term debt (18,693,646) (22,933,469)
------------ -------------
Net cash provided by (used in)
financing activities $ 3,211,331 $( 209,129)
------------- -------------
Increase (decrease) in cash and temporary
investments $ 505,881 $ 1,299,765
Cash and temporary investments at the
beginning of the period 1,110 3,866
------------- -------------
Cash and temporary investments at the
end of the period $ 506,991 $ 1,303,631
============= =============
Supplemental information:
Interest paid $ 278,385 $ 220,946
============ ============
Income taxes paid $ 19,110 $ 127,435
============ ============
See notes to condensed financial statements
I-4 -6-
STERLING SUGARS, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
THREE AND SIX MONTHS ENDED JANUARY 31, 2004 AND 2003
(UNAUDITED)
A. CONDENSED FINANCIAL STATEMENTS:
The condensed balance sheet as of January 31, 2004,
the statements of earnings and retained earnings for the three
and six months ending January 31, 2004 and 2003, and the condensed
statements of cash flows for the six month periods then
ended have been prepared by the Company, without audit. In
the opinion of management, all adjustments (which include
only normal recurring adjustments) necessary to present
fairly the financial position, results of operations and
cash flows at January 31, 2004 and for all periods presented
have been made.
Certain information and footnote disclosures normally
included in financial statements prepared in accordance with
generally accepted accounting principles have been condensed
or omitted. It is suggested that these condensed financial
statements be read in conjunction with the July 31, 2003
report to stockholders and the Form 10-K filed with the
Securities and Exchange Commission on October 29, 2003. The
results of operations for the period ending January 31, 2004
are not necessarily indicative of the operating results expected
for the full year.
B. DISASTER RELIEF SUBSIDY
Under the Agricultural Assistance Act of 2003, the Commodity
Credit Corporation (CCC) has been directed to pay $60,000,000 in
compensation to Louisiana sugarcane producers and processors
suffering economic losses from the effects of Tropical Storm
Isadore, Hurricane Lili and excessive rains in October, 2002.
Under the plan, the CCC paid, in October, 2003, the
processors a calculated portion of the total based on a
predetermined formula, less a 7% holdback for appeals purposes.
The processors paid the cane suppliers based on existing contracts
between the mills and the farmers. The 7% holdback will be
disbursed at the conclusion of the appeals process.
Management estimates the gross amount to be paid to the Company
to be $4,386,000 before the 7% holdback and payments to farmers of
65%. After farmer payments, the Company's portion of the proceeds
is estimated to be approximately $1,535,000. These amounts are
before rentals to be received from producers on Company owned land.
These rentals, including the 7% holdback, are estimated to be
$106,875 resulting in a total due the Company of $1,641,875. This
amount is included in Other Income on the Statement of Earnings
and Retained Earnings.
I-5 -7-
STERLING SUGARS, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Forward -Looking Information:
This Form 10-Q contains certain statements that may be deemed
"forward-looking statements." All statements, other than historical
statements, in this Form 10-Q that address activities, events or
developments that the Company intends, expects, projects, believes or
anticipates will or may occur in the future, are forward-looking
statements. Such statements are based on assumptions and analysis made
by management of the Company in light of its experience and its
perception of historical trends, current conditions, expected future
developments and other factors it believes are appropriate. The
forward-looking statements in the Form 10-Q are also subject to a number
of material risks and uncertainties, including weather conditions in
south Louisiana during the sugarcane growing season, the success of
sugarcane pest and disease abatement procedures, the quality and quantity
of the sugarcane crops, mechanical failures at the Company's sugar mill,
and prices for sugar and molasses produced by the Company. Such
forward-looking statements are not guarantees of future performance and
actual results. Development and business decisions may differ from
those envisioned by such forward-looking statements.
Results of Operations:
General Information:
The Company's grinding season started on September 24, 2003 and
completed on December 22, 2003. Last year the Company started
on October 1, 2002 and because of Hurricane Lili which occurred on
October 3rd, operations were suspended until October 10th. The Company
completed grinding on January 22, 2003. The Company processed 901,639
tons of sugarcane compared to 1,046,748 tons of sugarcane the previous
year. The Company ground 1,027,102 tons of sugarcane for 2001 crop.
Sugar yield for the current crop is estimated at 207 pounds per ton
of cane compared to 175 and 207 pounds per ton of cane the previous two
years, respectively. The 175 pound yield for the past crop resulted from
Tropical Storm Isadore and Hurricane Lili. Also, weather during that
crop was unusually wet which caused higher costs in harvesting and
processing the cane. The higher processing cost and lower yield of raw
sugar resulted in a loss for the year ended July 31, 2003. Although
sugar yield for this year is estimated at 207 pounds per ton of cane,
the crop was shorter than normal causing the reduction in cane processed
for the current year.
The price the Company receives for its raw sugar is currently
averaging 20.86 cents per pound compared to the 20.33 cents per pound
for the six months ended January 31, 2003. For the six month period
ending January 31, 2002, the Company received 20.41 cents per pound.
The Company systematically sells on the futures market throughout the
year, which tends to average out the highs and lows over a period of
time.
I-6 -8-
Blackstrap molasses production is estimated at 4.70 gallons per
ton of cane compared to 4.51 and 5.36 gallons per ton the previous two
years, respectively. Total production of molasses is estimated at
4,214,128 this year compared to 4,722,116 gallons last year and
5,987,764 gallons for the previous year. The price for blackstrap
molasses is currently quoted at $52.50 per ton compared to $60 and
$67.50 per ton for the previous two years.
Sugar and Molasses Sales:
Sugar and molasses sales for the six months ended January 31, 2004
and 2003 were as follows:
2004 2003
----------- -----------
Raw sugar sales $25,779,679 $30,040,229
Blackstrap molasses 1,145,853 1,140,129
----------- -----------
$26,925,532 $31,180,358
=========== ===========
Sugar sales were down substantially for the six months ended January
31, 2004 compared to the same period in 2003 because of lesser demand
from sugar refiners. As a consequence, the Company has approximately
30,000 tons of sugar in inventory. This sugar is expected to be shipped
ratably over the period March-September, 2004. The refiners are
requiring raw sugar manufacturers such as Sterling to hold raw sugar for
longer periods. The Company has budgeted $1,200,000 to build a
new warehouse this spring that will enable the Company to store an
additional 30,000 tons of raw sugar. The Company currently can store
approximately 34,000 tons of raw sugar. Molasses sales were comparable
for the same period in 2003.
Interest Earned:
Interest earned for the six month period ending January 31,
2004 was $4,790 compared to $781 for the same period last year.
Interest earned was $3,870 for the three month period ending January
31, 2004 and $0 for the same period last year. The Company invested
the proceeds received from the government disaster payment hence the
increased interest income for the the six months ended January 31, 2004.
Mineral Leases and Royalties:
Income from Mineral leases and royalties were up for the six
months ended January 31, 2004 totaling $264,248 compared to $151,738 for
the same period last year. Royalties for the two periods were $228,448
and $128,125, respectively. Income from Mineral leases for the same
periods were $35,800 and $23,613, respectively. The increase in royalty
payments is the result of a new well brought in in May, 2003.
The Company continues to receive royalty payments from the Zenor A16
well located near Patterson, La. Payments received from the two wells
have been used to reduce the Company's long-term debt.
The Company's activities with respect to oil and gas are limited to
the granting of leases and the collection of bonuses, delay rentals and
I-7 -9-
landowner royalties thereunder. Accordingly, only limited information,
furnished primarily by the Company's lessees, has been included with
respect to oil and gas operations affecting Company lands. Complete
information respecting these and related matters, such as proved
reserves, are unavailable to the Company and cannot be obtained without
unreasonable effort and expense.
DISPOSAL OF ASSETS:
The Company had no gain or loss for the three and six month periods
ended January 31, 2004 but recorded a gain of $171,768 for the three and
six months ended January 31, 2003 principally from the sale of property
located in St. Mary Parish.
Other Revenues:
Other revenues, which consist mainly of miscellaneous income items
and cane land rentals, were $2,845,138 for the six months ended January
31, 2004 and $1,236,621 for the six months ended January 31, 2003. Cane
land rentals for the current period were $1,221,353 compared to
$1,129,503 for the same period last year. Other Revenues for 2004 also
include a disaster payment of $1,641,875. See Note B to the financial
statements for further information concerning the disaster payment.
Cost of Products Sold:
Cost of products sold totaled $22,225,215 for the six months ended
January 31, 2004 and $30,269,836 for the six months ended January 31,
2003. The large decrease in this account results from the decrease in
sales of $4,254,826. The Company installed a new boiler for the current
crop just completed and saved in excess of $1,500,000 on the cost
of natural gas which also reduced the cost of products sold as compared
to the previous year.
General and Administrative Expenses:
General and administrative expenses were $541,856 for the six
months ended January 31, 2004 and $526,725 for the same period last
year. Expenses were comparable for the two years.
Interest Expense:
Interest expense was $325,245 compared to $194,182 for the six
months ended January 31, 2004 and 2003, respectively. The higher
interest cost resulted from the Company having to hold sugar for longer
periods and the financing of $3,000,000 long-term to fund the new
boiler installed last fall. Short-term debt outstanding at January 31,
2004 was $5,096,000 compared to $3,538,000 at January 31, 2003.
Long-Term debt also increased from $3,590,625 for the period ended
January 31, 2003 to $4,939,439 for the current period.
I-8 -10-
Net Earnings:
The Statement of Earnings and Retained Earnings for the six months
ended January 31, 2004 is showing a profit of $6,947,392 before income
taxes. Budgets for the next six months ended July 31, 2004 indicate the
Company will show a profit for the year ended July 31, 2004 but it is
estimated to be substantially below that shown for the six months ended
January 31, 2004. Because of the highly seasonal nature of the sugar
industry, it is not unusual to have a substantial profit for the six
months ending January 31 of each year. Last year the Company had net
earnings before income taxes of $1,750,523 (a bad year because of weather
related problems) and $5,203,518 for the six months ended January 31,
2002.
The above is based on management's best estimates taking
into consideration budgeted expenditures for the next six months and
other factors that may affect the earnings or losses of the Company.
Circumstances and events that may happen in the future cannot be
predicted and earnings could be significantly different from that
estimated.
Income Taxes:
The income tax expense for the three and six month periods
ending January 31, 2004 and 2003 were recorded at the statutory rate
of 38 percent, which reflects the 34 percent federal corporate rate plus
4 percent state income taxes.
Liquidity and Capital Resources:
At January 31, 2004, the Company had working capital of
$1,137,941 compared to a negative working capital of $3,650,422 at July
31, 2003. Due to the seasonal nature of the industry, it is not
uncommon to have a negative working capital balance at July 31 of
each year or just before the start of the new season.
In November, 2003, the Company borrowed $3,000,000 payable in 12
semi-annual installments of $250,000 each. Interest is also payable
semi-annually at a 5.75% rate. Proceeds from the loan were used to
partially fund the new boiler installed for the 2003 crop.
For the period February 1, 2004 to September 30, 2004, the Company
has budgeted $3,843,550 for repairs and $1,775,000 for capital
improvements to the factory. The latter amount includes the new sugar
warehouse budgeted at $1,200,000. Management believes the new warehouse
is needed to meet stricter shipping requirements dictated by the
refiners. The Company expects to finance some of these expenditures
internally with any excess financed short-term through a bank with which
the Company has a $12,000,000 line of short-term credit.
I-9 -11-
Item 4. Disclosure Controls
Our principal executive officer and principal accounting officer
have evaluated our disclosure controls and procedures within 90 days
prior to the date of filing of this Quarterly Report on Form 10-Q for
the period ending January 31, 2004. They believe that our current
internal controls and procedures are effective and designed to ensure
that information required to be disclosed by us in our periodic reports
is recorded, processed, summarized and reported, within the appropriate
time periods specified by the SEC, and that such information is
accumulated and communicated to our principal executive officer and
principal accounting officer as appropriate to allow timely decisions to
be made regarding required disclosure. Subsequent to the date of the
evaluation, there were no significant corrective actions taken by us or
other changes made to these internal controls. Management does not
believe there were changes in other factors that could significantly
affect these controls subsequent to the date of the evaluation.
INTERNAL CONTROL OVER FINANCIAL REPORTING
There have not been any changes in our internal control over financial
reporting (as such term is defined in Rules 13-15(f) and 15d-15(f) under
the Exchange Act) during the second fiscal quarter that have materially
affected, or are reasonably likely to materially affect, our internal
control over financial reporting.
I-10 -12-
PART II - OTHER INFORMATION
ITEM 1 - LEGAL PROCEEDINGS
There have been no material developments in the legal proceedings
reported in the Company's Annual Report on Form 10-K for the year
ended July 31, 2003.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The Company held its Annual Meeting of Stockholders on
November 25, 2003. Stockholders voted on the election of
directors to serve for one year or until their successors are
elected and qualified. The voting results were as follows:
FOR WITHHELD
----- --------
Bernard E. Boudreaux, Jr. 2,109,333 17,123
Peter V. Guarisco 2,109,333 17,123
Victor Guarisco, II 2,109,333 17,123
James R. Keys 2,109,333 17,123
Robert B. Patout 2,109,333 17,123
Frank William Patout 2,109,333 17,123
William S. Patout, III 2,109,167 17,289
ITEM 6 - EXHIBITS AND REPORTS ON FORM 8K
(a) Exhibits
Exhibit Description Page
----------------------------------------------------
11 Computation of Earnings per Share 14
31.1 Section 906 Certification of Chief 14
Executive Officer
31.2 Section 906 Certification of Chief 15
Financial Officer
32.1 Certification Pursuant to 18 U.S.C. 16
Section 1350, as Adopted Pursuant
to Section 906 of the Sarbanes-Oxley
Act of 2002
(b) Reports on Form 8K
No reports on Form 8-K have been filed for the period.
II-1 -13-
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act
of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned thereunto duly authorized.
STERLING SUGARS, INC.
(REGISTRANT)
DATE March 12, 2004 By /s/ Craig P. Caillier
-------------- ---------------------
CRAIG P. CAILLIER
PRESIDENT AND
CHIEF EXECUTIVE OFFICER
DATE March 12, 2004 By /s/ Stanley H. Pipes
-------------- ---------------------
STANLEY H. PIPES
VICE PRESIDENT AND TREASURER
II-2 -14-
EXHIBIT 11
STERLING SUGARS, INC.
COMPUTATION OF EARNINGS PER SHARE
Years Ended January 31
-----------------------
2004 2003
------------ ------------
Primary
Income (Loss) $ 4,307,383 $ 1,085,324
============ ============
Shares
Weighted average number of common
shares outstanding 2,500,000 2,500,000
---------- ----------
Primary earnings (loss) per share $1.72 $.43
========== ==========
EXHIBIT 31.1
CERTIFICATIONS
I, Craig P. Caillier, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Sterling Sugars,
Inc.;
2. Based on my knowledge, this report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this report;
3. Based on my knowledge, the financial statements, and other financial
information included in this report, fairly present in all material
respects the financial condition, results of operations and cash flows of
the registrant as of, and for, the periods presented in this report.
4. The registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined
in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:
a) Designed such disclosure controls and procedures, or caused such
disclosure controls and procedures to be designed under our
supervision, to ensure that material information relating to the
registrant, including its consolidated subsidiaries, is made known to
us by others within those entities, particularly during the period in
which this report if being prepared;
b) Evaluated the effectiveness of the restrant's disclosure controls and
procedures and presented in this report our conclusions about the
effectiveness of the disclosure controls and procedures, as of the
end of the period covered by this report based on such evaluation;
and
-15-
c) Disclosed in this report any change in the registrant's internal
control over financial reporting that occurred during the registrant's
most recent fiscal quarter (the registrant's fourth fiscal quarter in
the case of an annual report) that has materially affected, or is
reasonably likely to materially affect, the registrant's internal
control over financial reporting; and
5. The registrant's other certifying officer and I have disclosed, based on
our most recent evaluation of internal control over financial reporting,
to the registrant's auditors and the audit committee of the registrant's
board of directors (or persons performing the equivalent functions):
a) All significant deficiencies and material weaknesses in the design or
operation of internal control over financial reporting which are
reasonably likely to adversely affect the registrant's ability to
record, process, summarize and report financial information; and
b) Any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal
control over financial reporting.
Date: March 12, 2004
----------------
/s/ Craig P. Caillier
----------------------
Craig P. Caillier
President and Chief Executive Officer
EXHIBIT 31.2
I, Stanley H. Pipes, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Sterling Sugars,
Inc.;
2. Based on my knowledge, this report does not contain any untrue
statement of a material fact or omit to state a material fact necessary
to make the statements made, in light of the circumstances under which
such statements were made, not misleading with respect to the period
covered by this report;
3. Based on my knowledge, the financial statements, and other financial
information included in this report, fairly present in all material
respects the financial condition, results of operations and cash flows of
the registrant as of, and for, the periods presented in this report.
4. The registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined
in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:
a) Designed such disclosure controls and procedures, or caused such
disclosure controls and procedures to be designed under our
supervision, to ensure that material information relating to the
registrant, including its consolidated subsidiaries, is made known to
us by others within those entities, particularly during the period in
which this report if being prepared;
-16-
b) Evaluated the effectiveness of the restrant's disclosure controls and
procedures and presented in this report our conclusions about the
effectiveness of the disclosure controls and procedures, as of the
end of the period covered by this report based on such evaluation; and
c) Disclosed in this report any change in the registrant's internal
control over financial reporting that occurred during the registrant's
most recent fiscal quarter (the registrant's fourth fiscal quarter in
the case of an annual report) that has materially affected, or is
reasonably likely to materially affect, the registrant's internal
control over financial reporting; and
5. The registrant's other certifying officer and I have disclosed, based
on our most recent evaluation of internal control over financial
reporting, to the registrant's auditors and the audit committee of the
registrant's board of directors (or persons performing the equivalent
functions):
a) All significant deficiencies and material weaknesses in the design or
operation of internal control over financial reporting which are
reasonably likely to adversely affect the registrant's ability to
record, process, summarize and report financial information; and
b) Any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal
control over financial reporting.
Date: March 12, 2004
-----------------
/s/ Stanley H. Pipes
--------------------
Stanley H. Pipes
Vice President and Treasurer
(Principal Financial and Accounting Officer)
EXHIBIT 32.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Sterling Sugars, Inc.
(the "Company") on Form 10-Q for the six months ending January 31, 2004 as
filed with the Securities and Exchange Commission on the date hereof
(the "Report"), I, Craig P. Caillier, President and Chief Executive Officer
of the Company, and I, Stanley H. Pipes, Vice President and Treasurer of
the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
(1) The Report fully complies with the requirements of section 13(a)
or 15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all
material respects, the financial condition and results of operations of the
Company.
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/s/ Craig P. Caillier
Date: March 12, 2004 ---------------------
Craig P. Caillier
President and Chief Executive Officer
Date: March 12, 2004 /s/ Stanley H. Pipes
____________________
Stanley H. Pipes
Vice President & Treasurer
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