UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 10-Q

 

 

ý Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

 

For the period ended February 28, 2005

 

Commission file number:  33-83868

 

AMERICAN CRYSTAL SUGAR COMPANY

(Exact name of registrant as specified in its charter)

 

Minnesota		84-0004720
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

 

101 North Third Street
Moorhead, Minnesota  56560

(Address of principal executive offices)

 

Telephone Number (218) 236-4400

(Registrant’s telephone number, including area code)

 

Indicate by check mark whether the 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, and (2) has been subject to such filing requirements for the past 90 days.

 

YES   ý

NO   o

 

Indicate by check mark whether the registrant is an accelerated filer (as defined in rule 12b-2 of the Act).

 

YES   o

NO   ý

 

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

 

Class of Common Stock		Outstanding at April 6, 2005
$10 Par Value		2,859

 

 

AMERICAN CRYSTAL SUGAR COMPANY

 

FORM 10-Q

 

INDEX

 

PART I		FINANCIAL INFORMATION
	ITEM 1.	CONSOLIDATED FINANCIAL STATEMENTS
		CONSOLIDATED BALANCE SHEETS
		CONSOLIDATED STATEMENTS OF OPERATIONS
		CONSOLIDATED STATEMENTS OF CASH FLOWS
		NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
	ITEM 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION
	ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
	ITEM 4.	CONTROLS AND PROCEDURES
PART II		OTHER INFORMATION
	ITEM 1.	LEGAL PROCEEDINGS
	ITEM 2.	CHANGES IN SECURITIES AND USE OF PROCEEDS
	ITEM 3.	DEFAULT UPON SENIOR SECURITIES
	ITEM 4.	SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
	ITEM 5.	OTHER INFORMATION
	ITEM 6.	EXHIBITS AND REPORTS ON FORM 8-K
SIGNATURES

 

 

AMERICAN CRYSTAL SUGAR COMPANY

Consolidated Balance Sheets

(Unaudited)

(Dollars in Thousands)

 

ASSETS

 

		February 28 2005			February 29 2004			August 31 2004*
Current Assets:
Cash and Cash Equivalents		$	672		$	629		$	184
Accounts Receivable:
Trade		60,932			90,446			79,185
Members		6			—			5,105
Other		2,267			2,137			3,605
Advances to Related Parties		9,191			2,833			13,508
Inventories		401,278			456,961			129,285
Prepaid Expenses		5,131			5,428			4,846
Total Current Assets		479,477			558,434			235,718
Property and Equipment:
Land		43,235			40,105			43,195
Buildings		94,377			91,438			93,988
Equipment		761,294			794,676			809,775
Construction-in-Progress		8,849			5,594			3,118
Less: Accumulated Depreciation		(594,197		)	(607,986		)	(619,534		)
Net Property and Equipment		313,558			323,827			330,542
Net Property and Equipment Held for Lease		155,766			165,675			160,643
Other Assets:
Investments in CoBank, ACB		18,045			19,552			19,069
Investments in Marketing Cooperatives		4,601			5,240			4,487
Investments in Crystech, LLC		15,886			15,863			15,353
Other Assets		57,294			45,542			56,343
Total Other Assets		95,826			86,197			95,252
Total Assets		$	1,044,627		$	1,134,133		$	822,155

 

* Derived from audited financial statements.

 

The Accompanying Notes are an Integral Part of These Consolidated Financial Statements.

 

1

 

AMERICAN CRYSTAL SUGAR COMPANY

Consolidated Balance Sheets

(Unaudited)

(Dollars in Thousands)

 

LIABILITIES AND MEMBERS’ INVESTMENTS

 

		February 28			February 29			August 31
		2005			2004			2004*
Current Liabilities:
Short-Term Debt		$	165,363		$	217,855		$	30,199
Current Maturities of Long-Term Debt		20,932			20,917			20,932
Accounts Payable		20,311			20,197			27,063
Advances Due to Related Parties		10,608			8,771			7,864
Accrued Continuing Costs (See Note 5)		44,839			59,195			—
Other Current Liabilities		19,588			21,126			20,500
Amounts Due Growers		148,114			175,771			70,487
Total Current Liabilities		429,755			523,832			177,045
Long-Term Debt, Net of Current Maturities		223,108			260,290			250,086
Accrued Employee Benefits		36,627			32,916			33,939
Other Liabilities		9,497			11,062			10,297
Total Liabilities		698,987			828,100			471,367
Commitments and Contingencies (See Note 11)
Minority Interest in ProGold Limited Liability Company		49,306			45,427			47,362
Members’ Investments:
Preferred Stock		38,275			38,275			38,275
Common Stock		29			30			29
Additional Paid-in Capital		152,261			152,261			152,261
Unit Retains		130,299			109,022			138,714
Equity Retention		2,708			2,717			2,708
Accumulated Other Comprehensive Income/(Loss)		(376		)	(11,900		)	(376		)
Retained Earnings/(Deficit)		(26,862		)	(29,799		)	(28,185		)
Total Members’ Investments		296,334			260,606			303,426
Total Liabilities and Members’ Investments		$	1,044,627		$	1,134,133		$	822,155

 

* Derived from audited financial statements.

 

The Accompanying Notes are an Integral Part of These Consolidated Financial Statements.

 

2

 

AMERICAN CRYSTAL SUGAR COMPANY

Consolidated Statements of Operations

(Unaudited)

(Dollars in Thousands)

 

		For the Six Months Ended						For the Three Months Ended
		February 28			February 29			February 28			February 29
		2005			2004			2005			2004
Net Revenue		$	458,847		$	472,076		$	211,511		$	241,872
Cost of Sales		58,651			5,322			534			12,336
Gross Proceeds		400,196			466,754			210,977			229,536
Selling, General and Administrative Expenses		94,592			90,667			43,175			47,768
Accrued Continuing Costs (See Note 5)		44,839			59,195			24,218			17,064
Operating Proceeds		260,765			316,892			143,584			164,704
Other Income/(Expense)
Interest Income		161			125			29			8
Interest Expense		(9,520		)	(10,333		)	(5,088		)	(5,423		)
Other, Net		(330		)	641			(219		)	545
Total Other (Expense)		(9,689		)	(9,567		)	(5,278		)	(4,870		)
Proceeds before Minority Interest and Income Tax Expense		251,076			307,325			138,306			159,834
Minority Interest		(1,944		)	(1,658		)	(1,022		)	(846		)
Income Tax Expense		(11		)	(5		)	(11		)	(5		)
Net Proceeds Resulting from Member and Non-Member Business		$	249,121		$	305,662		$	137,273		$	158,983
Distribution of Net Proceeds:
Credited/(Charged) to Members’ Investments:
Non-Member Business Income		$	1,323		$	2,626		$	768		$	1,360
Unit Retains Declared to Members		—			—			—			—
Net Credit to Members’ Investments		1,323			2,626			768			1,360
Payments to/due Members for Sugarbeets, Net of Unit Retains Declared		247,798			303,036			136,505			157,623
Total		$	249,121		$	305,662		$	137,273		$	158,983

 

The Accompanying Notes are an Integral Part of These Consolidated Financial Statements.

 

3

 

American Crystal Sugar Company

Consolidated Statements of Cash Flows

(Unaudited)

(Dollars In Thousands)

 

		For the Six Months Ended
		February 28			February 29
		2005			2004
Cash Provided By/(Used In) Operations:
Net Proceeds Resulting from Member and Non-Member Business		$	249,121		$	305,662
Payments to/due Members for Sugarbeets, Net of Unit Retains Declared		(247,798		)	(303,036		)
Add/(Deduct) Non-Cash Items:
Depreciation and Amortization		34,860			35,430
(Income) from Equity Method Investees		(562		)	(571		)
Loss on the Disposition of Property and Equipment		1,248			390
Deferred Gain Recognition		(99		)	(99		)
Minority Interest in ProGold Limited Liability Company		1,944			1,658
Changes in Assets and Liabilities:
Receivables		24,691			(20,805		)
Inventories		(271,993		)	(325,980		)
Prepaid Expenses		(285		)	1,634
Long-Term Prepaid Pension Expense		(1,823		)	(8,712		)
Advances To/Due to Related Parties		7,061			6,900
Accounts Payable		(6,752		)	(2,872		)
Accrued Continuing Costs		44,839			59,195
Other Liabilities		973			3,260
Amounts Due Growers		77,627			116,875
Net Cash (Used In) Operations		(86,948		)	(131,071		)
Cash Provided By/(Used In) Investing Activities:
Purchases of Property and Equipment		(12,280		)	(9,115		)
Purchases of Property and Equipment Held for Lease		(655		)	(550		)
Proceeds from the Sale of Property and Equipment		2			39
Equity Refund from CoBank, ACB		1,024			2,133
Investments in Marketing Cooperatives		—			1,049
Acquisition by Crab Creek Sugar Company		—			(5,763		)
Changes in Other Assets		(426		)	4,545
Net Cash (Used In) Investing Activities		(12,335		)	(7,662		)
Cash Provided By/(Used In) Financing Activities:
Net Proceeds from/(Payments on) Short-Term Debt		135,164			167,866
Long-Term Debt Repayment		(26,978		)	(16,997		)
Proceeds from Issuance of Stock		—			4,023
Payment of Unit Retains & Equity Retention		(8,415		)	(16,389		)
Net Cash Provided By Financing Activities		99,771			138,503
Increase/(Decrease) In Cash and Cash Equivalents		488			(230		)
Cash and Cash Equivalents, Beginning of Year		184			859
Cash and Cash Equivalents, End of Period		$	672		$	629
Non-Cash Investing and Financing Activities: In September 2003, a note payable in the amount of $969,000 was issued in connection with the acquisition by Crab Creek Sugar Company.

 

The Accompanying Notes are an Integral Part of These Consolidated Financial Statements.

 

4

 

AMERICAN CRYSTAL SUGAR COMPANY

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE SIX MONTHS AND THREE MONTHS ENDED

FEBRUARY 28, 2005 AND FEBRUARY 29, 2004

(Unaudited)

 

Note 1:  Basis of Presentation

 

The unaudited consolidated financial statements of American Crystal Sugar Company (the Company) contained herein have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission.  Accordingly, they do not include all the information and footnotes required by accounting principles generally accepted in the United States of America.  However, in the opinion of management, all adjustments, consisting of normal recurring accruals, considered necessary for a fair presentation have been included.

 

The Company’s consolidated financial statements are comprised of: American Crystal Sugar Company; its wholly-owned subsidiaries Sidney Sugars Incorporated (Sidney Sugars) and Crab Creek Sugar Company (Crab Creek); and ProGold Limited Liability Company (ProGold), a limited liability company in which the Company holds a 51 percent ownership interest.

 

Crab Creek was formed in fiscal 2003 under the laws of the State of Minnesota, and on September 8, 2003, acquired the control of a sugarbeet processing facility and the related marketing allocations associated with such facility.

 

All material inter-company transactions have been eliminated.

 

The operating results for the six month period ended February 28, 2005 are not necessarily indicative of the results that may be expected for the year ended August 31, 2005.

 

The amount paid to shareholders for sugarbeets (member beet payment) depends on the future selling prices of sugar and agri-products as well as processing and other costs incurred during the remainder of the fiscal year associated with the 2004 Red River Valley sugarbeet crop (RRV crop).  The amount paid to non-member growers for sugarbeets (non-member beet payment) depends on the future selling prices of sugar and the related selling expenses associated with the 2004 Sidney sugarbeet crop (Sidney crop).  For the purposes of this report, the amount of the beet payments, future revenues and costs have been estimated.  Therefore, adjustments with respect to these estimates may be necessary in the future, as additional information becomes available.

 

These financial statements should be read in conjunction with the consolidated financial statements and notes included in the Company’s Annual Report on Form 10-K for the year ended August 31, 2004.

 

Certain reclassifications have been made to the February 29, 2004 and the August 31, 2004 consolidated financial statements to conform with the February 28, 2005 presentation.  These reclassifications had no effect on previously reported results of operations or Members’ Investments.

 

5

 

Note 2:  Inventories

 

The major components of inventories are as follows (In Thousands):

 

		02/28/05			02/29/04			8/31/04
Refined Sugar, Pulp, Molasses, Other Agri-Products and Sugarbeet Seed		$	260,769		$	312,836		$	107,812
Unprocessed Sugarbeets		119,699			126,603			—
Maintenance Parts & Supplies		20,810			17,522			21,473
Total Inventories		$	401,278		$	456,961		$	129,285

 

Sugar, pulp, molasses and other agri-products inventories are valued at estimated net realizable value.  Unprocessed sugarbeets are valued at the estimated gross beet payment.  Maintenance parts & supplies and sugarbeet seed inventories are valued at the lower of average cost or market.

 

Note 3: Short-Term Debt

 

The Company has a seasonal line of credit with a consortium of lenders led by CoBank, ACB of $265 million and a line of credit with Wells Fargo Bank for $1 million.  The Company’s commercial paper program provides short-term borrowings of up to $225 million.  Any borrowings under the commercial paper program along with outstanding short-term letters of credit will act to reduce the available credit under the CoBank, ACB seasonal line of credit by a commensurate amount.  The Company also utilizes the Commodity Credit Corporation (CCC) to meet its short-term borrowing needs.

 

As of February 28, 2005, the Company had outstanding commercial paper of $165.4 million at an average interest rate of 2.8% and maturity dates between March 1, 2005 and May 31, 2005.  The Company had no outstanding short-term debt with CoBank, ACB or the CCC as of February 28, 2005. The Company had $5.9 million of short-term letters of credit outstanding as of February 28, 2005.

 

As of February 29, 2004, the Company had outstanding commercial paper of $194.9 million at an average interest rate of 1.34% and maturity dates between March 1, 2004 and May 28, 2004.  In addition, the Company had an outstanding non-recourse loan with the CCC of $23.0 million, against which one million hundredweight of sugar was pledged as collateral.  The CCC loan carried an interest rate of 1.99% and a maturity date of August 31, 2004.  The Company had no outstanding short-term debt with CoBank, ACB as of February 29, 2004.

 

Note 4:  Interest Paid

 

Interest paid, net of amounts capitalized, was $9.6 million and $8.9 million for the six months ended February 28, 2005 and February 29, 2004.

 

Note 5:  Accrued Continuing Costs

 

For interim reporting, the Net Proceeds from Member Business is based on the forecasted gross beet payment and the percentage of the tons of sugarbeets processed to the total estimated tons of sugarbeets to process for a given crop year.  The Net Proceeds from the operations of Sidney Sugars is based on the forecasted net income for the fiscal year and the percentage of the tons of non-member sugarbeets processed to the total estimated tons of non-member sugarbeets to process for a given fiscal year.

 

Accrued continuing costs represent the difference between the Net Proceeds as determined above and actual member business crop year and Sidney Sugars fiscal year revenues realized and expenses incurred through the end of the reporting period.  Accrued continuing costs are reflected in the Consolidated Financial Statements as a cost on the Consolidated Statements of Operations and as a current liability on the Consolidated Balance Sheets.

 

6

 

Note 6:  Net Periodic Pension and Post-Retirement Costs

 

The following schedules provide the components of the Net Periodic Pension and Post-Retirement Costs for the Six Months and Three Months ended February 28, 2005 and February 29, 2004:

 

Components of Net Periodic Pension Cost

(In Thousands)

 

		For the Six Months Ended						For the Three Months Ended
		February 28			February 29			February 28			February 29
		2005			2004			2005			2004
Service Cost		$	1,633		$	1,386		$	817		$	693
Interest Cost		3,543			3,008			1,771			1,504
Expected Return on Plan Assets		(4,031		)	(2,980		)	(2,016		)	(1,490		)
Multiple Employer Adjustment		(79		)	(172		)	(40		)	(86		)
Amortization of Net Transition Assets		(11		)	(62		)	(5		)	(31		)
Amortization of Prior Service Costs		512			272			256			136
Amortization of Net (Gain) Loss		665			1,000			333			500
Net Periodic Pension Cost		$	2,232		$	2,452		$	1,116		$	1,226

 

Components of Net Periodic Post-Retirement Cost

(In Thousands)

 

		For the Six Months Ended						For the Three Months Ended
		February 28			February 29			February 28			February 29
		2005			2004			2005			2004
Service Cost		$	550		$	560		$	275		$	280
Interest Cost		1,086			882			543			441
Amortization of Net (Gain) Loss		144			228			72			114
Net Periodic Post-Retirement Cost		$	1,780		$	1,670		$	890		$	835

 

For the six months ended February 28, 2005, the Company had made contributions of approximately $3.9 million related to pensions.  An additional $2.1 million is expected to be contributed prior to the end of the current fiscal year.  The Company has made payments for Post-Retirement benefits of approximately $ .5 million for the six months ended February 28, 2005, and expects total payments for the current fiscal year to be approximately $1.0 million.

 

Note 7:  Members’ Investments

 

					Shares		Shares Issued
		Par Value			Authorized		& Outstanding
Preferred Stock:
April 6, 2005		$	76.77		600,000		498,570
February 28, 2005		$	76.77		600,000		498,570
August 31, 2004		$	76.77		600,000		498,570
February 29, 2004		$	76.77		600,000		498,570
Common Stock:
April 6, 2005		$	10.00		4,000		2,859
February 28, 2005		$	10.00		4,000		2,868
August 31, 2004		$	10.00		4,000		2,873
February 29, 2004		$	10.00		4,000		2,971

 

7

 

Note 8: Shipping and Handling Costs

 

The costs incurred for the shipping and handling of products sold are classified in the financial statements as a selling expense on the Statements of Operations.  Shipping and handling costs were $59.8 million and $58.1 million for the six months ended February 28, 2005 and February 29, 2004, respectively and $28.1 million and $31.2 million for the three months ended February 28, 2005 and February 29, 2004, respectively.

 

Note 9: Crab Creek Sugar Company

 

On September 8, 2003, the Company, through its wholly-owned subsidiary Crab Creek Sugar Company (Crab Creek), acquired all of the assets of Pacific Northwest Sugar Company, LLC (PNSC), certain assets of Central Leasing of Washington, LLC (Central Leasing) that were associated with PNSC and the Moses Lake, Washington, sugarbeet factory previously operated by PNSC and control of the sugar production assets owned by Central Leasing associated with the Moses Lake, Washington, sugarbeet factory for a purchase price of approximately $6.7 million.  In addition, Crab Creek entered into various contracts with Central Leasing such that Crab Creek controls the long-term production of sugar at the Moses Lake, Washington, facility.  In connection with this acquisition, the USDA transferred to the Company the sugar marketing allocations formerly allocated to PNSC.  Neither Crab Creek nor the Company intends to operate the Moses Lake, Washington, facility.

 

Note 10: Segment Reporting

 

The Company has identified two reportable segments: Sugar and Leasing.  The sugar segment is engaged primarily in the production and marketing of sugar from sugarbeets.  It also sells agri-products and sugarbeet seed.  The leasing segment is engaged in the leasing of a corn wet-milling plant used in the production of high-fructose corn syrup sweetener.  The segments are managed separately.  There are no inter-segment sales.  The leasing segment has a major customer that accounts for all of that segment’s revenue.

 

Summarized financial information concerning the Company’s reportable segments for the six months and three months ended February 28, 2005 and February 29, 2004 is shown below:

 

		For the Six Months Ended February 28, 2005
		(Dollars In Thousands)
		Sugar			Leasing			Consolidated
Net Revenue from External Customers		$	445,833		$	13,014		$	458,847
Gross Proceeds		$	393,186		$	7,010		$	400,196
Depreciation and Amortization		$	29,328		$	5,532		$	34,860
Interest Income		$	155		$	6		$	161
Interest Expense		$	6,525		$	2,995		$	9,520
Income from Equity Method Investees		$	562		$	—		$	562
Other Income/(Expense), Net		$	(330	)	$	—		$	(330	)
Net Proceeds		$	247,097		$	2,024		$	249,121
Capital Expenditures		$	12,280		$	655		$	12,935

 

8

 

		For the Six Months Ended February 29, 2004
		(Dollars In Thousands)
		Sugar			Leasing			Consolidated
Net Revenue from External Customers		$	459,167		$	12,909		$	472,076
Gross Proceeds		$	459,825		$	6,929		$	466,754
Depreciation and Amortization		$	29,922		$	5,508		$	35,430
Interest Income		$	122		$	3		$	125
Interest Expense		$	6,855		$	3,478		$	10,333
Income from Equity Method Investees		$	571		$	—		$	571
Other Income/(Expense), Net		$	666		$	(25	)	$	641
Net Proceeds		$	303,937		$	1,725		$	305,662
Capital Expenditures		$	9,115		$	550		$	9,665

 

		For the Three Months Ended February 28, 2005
		(Dollars In Thousands)
		Sugar			Leasing			Consolidated
Net Revenue from External Customers		$	204,954		$	6,557		$	211,511
Gross Proceeds		$	207,424		$	3,553		$	210,977
Depreciation and Amortization		$	14,670		$	2,768		$	17,438
Interest Income		$	26		$	3		$	29
Interest Expense		$	3,646		$	1,442		$	5,088
Income from Equity Method Investees		$	287		$	—		$	287
Other Income/(Expense), Net		$	(219	)	$	—		$	(219	)
Net Proceeds		$	136,208		$	1,065		$	137,273
Capital Expenditures		$	6,495		$	378		$	6,873

 

		For the Three Months Ended February 29, 2004
		(Dollars In Thousands)
		Sugar			Leasing			Consolidated
Net Revenue from External Customers		$	235,398		$	6,474		$	241,872
Gross Proceeds		$	226,054		$	3,482		$	229,536
Depreciation and Amortization		$	14,884		$	2,757		$	17,641
Interest Income		$	7		$	1		$	8
Interest Expense		$	3,688		$	1,735		$	5,423
Income from Equity Method Investees		$	278		$	—		$	278
Other Income/(Expense), Net		$	545		$	—		$	545
Net Proceeds		$	158,103		$	880		$	158,983
Capital Expenditures		$	4,066		$	294		$	4,360

 

9

 

		As of February 28, 2005
		(Dollars In Thousands)
		Sugar			Leasing			Consolidated
Property and Equipment, Net		$	313,557		$	1		$	313,558
Assets Held for Lease, Net		$	—		$	155,766		$	155,766
Segment Assets		$	876,957		$	167,670		$	1,044,627

 

		As of February 29, 2004
		(Dollars In Thousands)
		Sugar			Leasing			Consolidated
Property and Equipment, Net		$	323,824		$	3		$	323,827
Assets Held for Lease, Net		$	—		$	165,675		$	165,675
Segment Assets		$	956,843		$	177,290		$	1,134,133

 

Note 11: Legal Proceedings

 

As of the date of this report, four administrative proceedings have been brought against the United States Department of Agriculture (USDA) seeking reversal of prior decisions regarding the determination and transfer of sugar marketing allocations made by the USDA or an agency under the USDA.  These proceedings are in various stages of the applicable administrative process.  While the Company is not a party to any of these administrative proceedings, it is, solely or in coordination with other sugar processors, an intervenor in these administrative proceedings.  The initial decisions by the USDA in the four proceedings were decided such that the Company would not experience a reduction in its marketing allocations.  The initial decisions by the USDA were appealed under administrative guidelines promulgated by the USDA.  Two of these appeals were decided such that the Company would not experience a reduction in its marketing allocations.  One of the appeals has not yet been completed.  The decision in the fourth proceeding, however, if it stands, will result in the Company experiencing a reduction in marketing allocations equal to the loss of approximately 25,000 acres in future crop years and the recognition of an expense of approximately $3.1 million related to the valuation of these marketing allocations.  Management has determined that an unfavorable final outcome from this proceeding is possible but not probable and therefore no adjustments related to the valuation of these marketing allocations have been recognized in the financial statements as of February 28, 2005.  All of the decisions made in these administrative proceedings have been appealed by various parties, including the Company, to a judicial officer of the USDA.  Any decision made by a judicial officer of the USDA can be further appealed in federal court.

 

Item 2.   Management’s Discussion and Analysis of Results of Operations and Financial Condition for the Six Months and Three Months Ended February 28, 2005 and February 29, 2004

 

This report contains forward-looking statements that involve risks and uncertainties.  Such forward-looking statements include, among others, those statements including the words “expect”, “anticipate”, “believe”, “may” and similar expressions.  The Company’s actual results could differ materially from those indicated.  Important factors that could cause or contribute to such differences include, without limitation, market factors, weather and general economic conditions, farm and trade policy, available quantity and quality of sugarbeets.  For a more complete discussion of “Important Factors”, please refer to the Company’s 2004 Form 10-K.

 

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