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 April 30, 2005
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 12b-2 in the Exchange Act).
YES NO X
There were 2,500,000 common shares outstanding at May 27, 2005.
Total number of pages 18
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STERLING SUGARS, INC.
I N D E X
PAGE
NUMBER
PART I: FINANCIAL INFORMATION:
ITEM 1. FINANCIAL STATEMENTS
Condensed balance sheets April 30, 2005
(unaudited) and July 31, 2004 I-1
Statements of earnings and retained earnings
Nine months ended April 30, 2005 (unaudited)
and 2004 (unaudited) I-2
Statements of earnings and retained earnings
Three months ended April 30, 2005 (unaudited)
and 2004 (unaudited) I-3
Statements of cash flows
Nine months ended April 30, 2005 (unaudited)
and 2004 (unaudited) I-4
Notes to condensed financial statements
Three and nine months ended April 30, 2005
and 2004 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 5. OTHER INFORMATION II-1
ITEM 6. EXHIBITS AND REPORTS ON FORM 8K II-1
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STERLING SUGARS, INC.
CONDENSED BALANCE SHEETS
April 30, July 31,
2005 2004
UNAUDITED NOTE
ASSETS: ---------------------------
CURRENT ASSETS:
Cash and short-term investments $ 1,832,937 $ 1,550,726
Accounts receivable 3,182,245 1,405,538
Inventories at lower of cost or market 9,998,502 8,406,006
Other current assets 410,895 504,470
------------- -------------
TOTAL CURRENT ASSETS $ 15,424,579 $ 11,866,740
------------- -------------
Property, plant and equipment - net $ 24,558,492 $ 25,471,499
------------- -------------
Expenditures for future crops $ 306,802 $ 106,870
------------- -------------
Notes receivable - No allowance for
doubtful accounts considered necessary $ 339,523 $ 228,174
------------- -------------
Other assets $ 91,482 $ 83,566
------------- -------------
$ 40,720,878 $ 37,756,849
============= =============
LIABILITIES AND STOCKHOLDERS' EQUITY:
CURRENT LIABILITIES:
Notes Payable $ 12,148,800 $ 8,404,000
Accounts payable and accrued expenses 1,330,067 420,446
Due to cane growers 3,230,975 3,872,774
Current portion long-term debt 1,124,065 1,129,327
------------- -------------
TOTAL CURRENT LIABILITIES $ 17,833,907 $ 13,826,547
------------- -------------
Long-term debt $ 2,518,567 $ 4,306,491
------------- -------------
Deferred income taxes $ 1,663,618 $ 1,663,618
------------- -------------
STOCKHOLDERS' EQUITY:
Common stock $ 2,500,000 $ 2,500,000
Additional paid in capital 40,455 40,455
Retained earnings 16,164,331 15,419,738
------------- -------------
$ 18,704,786 $ 17,960,193
------------- -------------
$ 40,720,878 $ 37,756,849
============= =============
NOTE: The balance sheet at July 31, 2004 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)
NINE MONTHS ENDED APRIL 30
---------------------------
2005 2004
---- ----
REVENUES:
Sugar and molasses sales $ 21,997,748 $ 29,703,169
Interest earned 13,532 10,213
Mineral leases and royalties 978,646 431,043
Gain on disposal of assets 233,046 25,857
Other 1,153,458 2,833,937
------------ ------------
$ 24,376,430 $ 33,004,219
------------ ------------
COSTS AND EXPENSES:
Cost of products sold $ 21,510,916 $ 26,518,560
General and administrative 833,236 758,708
Interest expense 831,322 503,492
------------ ------------
$ 23,175,474 $ 27,780,760
------------ ------------
NET EARNINGS (LOSS) BEFORE INCOME TAXES $ 1,200,956 $ 5,223,459
INCOME TAXES (CREDIT) 456,363 1,984,914
------------ ------------
NET EARNINGS (LOSS) $ 744,593 $ 3,238,545
RETAINED EARNINGS AT BEGINNING OF PERIOD 15,419,738 13,781,536
------------ ------------
RETAINED EARNINGS AT END OF PERIOD $ 16,164,331 $ 17,020,081
============ ============
NET EARNINGS (LOSS) PER SHARE $ .30 $ 1.30
============ ============
See notes to condensed financial statements
I-2 -4-
STERLING SUGARS, INC.
STATEMENT OF EARNINGS AND RETAINED EARNINGS
(UNAUDITED)
THREE MONTHS ENDED APRIL 30
-----------------------------
2005 2004
---- ----
REVENUES:
Sugar and molasses sales $ 8,301,982 $ 2,777,637
Interest earned 6,206 5,423
Mineral leases and royalties 265,039 166,795
Gain (Loss) on disposal of assets 228,876 25,857
Other 31,477 (11,201)
------------ ------------
$ 8,833,580 $ 2,964,511
------------ ------------
COSTS AND EXPENSES:
Cost of products sold $11,260,616 $ 4,293,345
General and administrative 163,100 216,852
Interest expense 233,294 178,247
------------ ------------
$11,657,010 $ 4,688,444
------------ ------------
NET LOSS BEFORE INCOME TAXES $(2,823,430) $(1,723,933)
INCOME TAXES (CREDIT) (1,072,903) (655,095)
------------ ------------
NET LOSS $(1,750,527) $(1,068,838)
RETAINED EARNINGS AT BEGINNING OF PERIOD 17,914,858 18,088,919
------------ ------------
RETAINED EARNINGS AT END OF PERIOD $16,164,331 $17,020,081
============ ============
NET LOSS PER SHARE $ (.70) $( .43)
============ ============
See notes to condensed financial statements
I-3 -5-
STERLING SUGARS, INC.
STATEMENT OF CASH FLOWS
(UNAUDITED)
NINE MONTHS ENDED APRIL 30
---------------------------
2005 2004
---- ----
OPERATING ACTIVITIES:
Net earnings (Loss) $ 744,593 $ 3,238,545
Adjustments to reconcile net earnings to net
cash provided by operating activities:
Depreciation 1,942,048 1,580,219
(Gain) loss on disposal of assets ( 233,046) ( 25,857)
Income tax refund 192,286 -
Changes in operating assets and liabilities:
Increase in accounts receivable ( 1,776,707) ( 1,343,586)
Increase in inventories ( 1,592,496) ( 7,556,553)
Increase in accounts payable accrued
expenses and due cane growers 251,752 2,977,183
Other items - net 201,340 ( 347,874)
------------ ------------
Net cash provided by operating activities $ ( 270,230) $( 1,477,923)
------------ ------------
INVESTING ACTIVITIES:
Collection on notes receivable $ 8,651 $ 36,276
Issuance of notes receivable ( 120,000) ( 31,200)
Purchase of property, plant and equipment (1,218,373) (3,089,697)
Proceeds from sale of assets 265,550 354,600
------------- ------------
Net cash used in investing activities $ (1,064,172) $ (2,730,021)
------------ ------------
FINANCING ACTIVITIES:
Proceeds from short-term notes payable
and long-term debt $ 23,485,000 $ 26,968,748
Payments on short-term notes payable
and long-term debt (21,868,387) (21,204,672)
------------ ------------
Net cash provided by financing activities $ 1,616,613 $ 5,764,076
------------ ------------
Increase in cash and temporary investments $ 282,211 $ 1,556,132
Cash and temporary investments at the
beginning of the period 1,550,726 1,110
------------ ------------
Cash and temporary investments at the
end of the period $ 1,832,937 $ 1,557,242
============= ============
Supplemental information:
Interest paid $ 882,015 $ 470,977
============ ============
Income taxes paid $ -0- 19,110
============ ============
See notes to condensed financial statements
I-4 -6-
STERLING SUGARS, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
THREE AND NINE MONTHS ENDED APRIL 30, 2005 AND 2004
(UNAUDITED) (CONTINUED)
A. CONDENSED FINANCIAL STATEMENTS:
The condensed balance sheet as of April 30, 2005,
the statements of earnings and retained earnings for the three
and nine months ending April 30, 2005 and 2004, and the condensed
statements of cash flows for the nine 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 April 30, 2005 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, 2004
report to stockholders and/or the Form 10-K filed with
the Securities and Exchange Commission on October 29, 2004.
The results of operations for the period ending April 30, 2005
are not necessarily indicative of the operating results expected
for the full year.
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 Septmeber 21, 2004 and
and was completed on December 9, 2004. The Company averaged approximately
204 pounds of sugar per ton of cane compared to 207 and 172 pounds of sugar
per ton the previous two years. Sugar yields are down slightly compared to
last year and tonnage of cane ground is down significantly. Dry weather
and excessive rainfall at inappropriate times reduced the yield of
sugarcane per acre this year. The Company ground 769,852 tons of
sugarcane for the 2004 crop compared to 901,639 tons of sugarcane
for the 2003 crop. The Company processed 1,046,748 tons of sugarcane
for the 2002 crop.
Sugar yield for the past crop is estimated at 204 pounds per ton of
cane compared to 207 and 175 pounds per ton of cane the previous two
years, respectively. The lower yield for the 2002 crop resulted from
Tropical Storm Isadore and Hurricane Lili. Also, weather during the
2002 crop was unusually wet which resulted in higher costs for harvesting
and processing the cane.
The average price the Company received for its raw sugar is currently
averaging 19.66 cents per pound compared to 20.72 cents per pound for the
2003 crop and 20.57 cents per pound for the 2002 crop. 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 for the 2004 crop was 4.76 gallons
per ton of cane compared to 4.99 and 5.36 gallons per ton the previous
two years, respectively. Total production of molasses was 3,667,644
gallons this year compared to 4,495,809 gallons last year and 5,514,088
gallons for the previous year. The price received for blackstrap
molasses for the nine months ended April 30, 2005 was $51.44 per ton
compared to $43.63 and $49.75 per ton for the previous two years,
respectively.
Sugar and Molasses Sales:
Sugar and molasses sales for the nine months ended April 30, 2005
and 2004 were as follows:
2005 2004
----------- -----------
Raw sugar sales $20,894,470 $28,523,544
Blackstrap molasses 1,103,278 1,179,625
----------- -----------
$21,997,748 $29,703,169
=========== ===========
Sugar sales were down substantially for the nine months ended April
30, 2005 compared to the same period in 2004 because of lesser demand
during the season from sugar refiners. At April 30, 2005, the Company
had on hand approximately 23,493 tons of raw sugar and at April 30, 2004,
the Company had on hand approximately 23,870 tons of raw sugar. Although
sugar on hand was approximately the same for both years, the Company
ground a lot less cane this year compared to last year which resulted
in much lower sales for the nine months ended April 30, 2005 compared to
sales last year for the same period. Molasses sales were down slightly
compared to the nine months ended April 30, 2004. Lower production,
coupled with a higher price, kept molasses sales just below that of
last year. All molasses had been shipped as of April 30, 2005 and
April 30, 2004.
For the three months ended April 30, 2005 raw sugar sales were up
substantially at $8,301,982 compared to $2,777,637 for the same period
last year. The difference in sales is due to shipping patterns dictated
by the refiners. At January 31, 2005 the Company had inventories of
$19,139,860 whereas on January 31, 2004 the Company had only $12,778,887
in inventories. This difference resulted in greater shipments of sugar
during the third quarter ended April 30, 2005 and higher sales compared
to the third quarter ended April 30, 2004.
Interest Earned:
Interest earned for the nine month period ending April 30,
2005 was $13,532 compared to $10,213 and $2,114 for the previous two
years, respectively. The higher interest income for the current year
reflects the investment of the Company's portion of the disaster relief
payment received from the government. All the funds received from the
disaster payment were invested short-term.
I-7 -9-
Mineral Leases and Royalties:
Income from Mineral leases and royalties were up for the nine
months ended April 30, 2004 totaling $978,646 compared to $431,043 and
$224,520 for the previous two years, respectively. Royalties for the
current year were $935,775 and for the previous two periods they were
$358,842 and $195,813, respectively. Income from Mineral leases for the
same periods were $42,872, $72,201 and $28,707, respectively. In
November, 2000, the Company began receiving royalty payments from a new
well named Zenor A16 located near Patterson, La. (St. Mary Parish) and
in May, 2003 another well was brought in in St. Mary Parish which has
resulted in the increased royalty income for the current period.
Royalties received from these wells are being 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
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 recorded a gain of $233,046 for the nine months ending
April 30, 2005. The gain was principally from the sale of eight acres
of land and some factory equipment. A gain of $25,857 was recorded the
year before mainly from the sale of a warehouse. A gain of gain of
$171,137 for the nine months ended April 30, 2003 resulted principally
from the sale of property located in LaFourche and St. Mary Parishes.
Other Revenues:
Other revenues, which generally consist of miscellaneous income
items and cane land rentals, were $1,153,458 for the nine months ended
April 30, 2005 and $2,833,937 for the nine months ended April
30, 2004. Cane land rentals for the current period were $971,256
compared to $1,219,622 for the same period last year. The lower cane
land rentals reflect the short 2004 crop. Other Revenues for
2004 also include a disaster payment from the U. S. Government of
$1,526,946.
Cost of Products Sold:
Cost of products sold totaled $21,510,916 for the nine months ended
April 30, 2005 and $26,518,560 for the nine months ended April 30, 2004.
The large decrease in this account results from the decrease in sales of
raw sugar and molasses for nine months ended April 30, 2004. The costs
charged to this account are relative to the sales of raw sugar and
molasses. For the three months ended April 30, 2005 cost of products
sold increased to $11,260,616 from $4,293,345 the previous year. At
January 31, 2005 the Company had inventories of $19,139,860 compared to
$12,778,887 at January 31, 2004. At April 30, 2005 inventories were
$9,998,502, a reduction of $9,141,358, and at April 30, 2004 inventories
were $10,194,684 or a reduction of only $2,584,203. Again, the
I-8 -10-
substantial difference in shipments and inventories are dictated by the
refiners based on their needs.
General and Administrative Expenses:
General and administrative expenses were $833,236 for the nine
months ended April 30, 2005 and $758,708 for the same period last
year. The increase results primarily from legal and appraisal fees
relating to going private.
Interest Expense:
Interest expense was $831,322 compared to $503,492 for the nine
months ended April 30, 2005 and 2004, respectively. The increase in
interest cost resulted from higher short-term borrowings required
because of the lesser sugar sales and higher sugar inventory. Short-term
debt outstanding at April 30, 2005 was $12,148,800 compared to $7,853,000
at April 30, 2004. Additionally, interest rates were several percentage
points higher this year compared to last year.
Income Taxes:
The income tax expense (credit) for the three and nine month
periods ending April 30, 2005 and 2004 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 April 30, 2005, the Company had negative working capital of
$2,409,327 compared to a negative working capital of $1,959,807 at July
31, 2004. Lower raw sugar sales and the resultant higher short-term
debt contributed to the deficit in working capital. Also, 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.
The Company installed a new boiler which went on line in September,
2003. The cost of the boiler was $3,551,109. Of this amount, $3,000,000
was financed through a bank at a 5.75% annual interest rate. Terms of
the loan require 12 semi-annual payments of $250,000 each with interest
payable semi-annually.
For the period February 1, 2005 to September 30, 2005, the Company
has budgeted $3,274,300 for repairs and $1,250,000 for capital
improvements to the factory. 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 $17,000,000 line of
short-term credit.
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 April 30, 2005. They believe that our current
internal controls and procedures are effective and designed to ensure
I-9 -11-
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 third 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, 2004. The Company settled two of the pending cases
out of court for a total of $18,290.
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 - There were no reports on Form 8K
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 June 10, 2005 By /s/ Craig P. Caillier
--------------------------- ---------------------
CRAIG P. CAILLIER
PRESIDENT AND
CHIEF EXECUTIVE OFFICER
DATE June 10, 2005 By /s/ Stanley H. Pipes
---------------------------- ---------------------
STANLEY H. PIPES
VICE PRESIDENT AND TREASURER
(PRINCIPAL FINANCIAL AND
ACCOUNTING OFFICER)
II-2 -14-
EXHIBIT 11
STERLING SUGARS, INC.
COMPUTATION OF EARNINGS PER SHARE
Nine Months Ended April 30
--------------------------
2005 2004
------------- ------------
Primary
Income $ 744,593 $ 3,238,545
============ ============
Shares
Weighted average number of common
shares outstanding 2,500,000 2,500,000
---------- ----------
Primary earnings (loss) per share $.30 $1.30
========== ==========
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 registrant'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: June 10, 2005
----------------
/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 registrant'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: June 10, 2005
-----------------
/s/ Stanley H. Pipes
--------------------
Stanley H. Pipes
Vice President and Treasurer
(Principal Financial and Accounting Officer)
-17-
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 nine months ending April 30, 2005 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.
/s/ Craig P. Caillier
Date: June 10, 2005 ---------------------
------------- Craig P. Caillier
President and Chief Executive Officer
Date: June 10, 2005 /s/ Stanley H. Pipes
------------- ---------------------
Stanley H. Pipes
Vice President & Treasurer
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