Imperial Sugar Company Announces Third Fiscal Quarter 2009 Results

Sugar Land, Texas, Aug. 5, 2009 - Imperial Sugar Company today reported a net loss for the third fiscal quarter ended June 30, 2009, of $10.5 million, or $0.89 per share, compared to a net loss of $12.5 million, or $1.07 per share, for the same period last year.

Operating results continue to be negatively impacted by reduced volumes and increased costs resulting from last year’s industrial accident at the Port Wentworth, Georgia refinery. The recent quarter’s results include a pre-tax charge of $6.2 million compared to $5.2 million for the quarter ended June 30, 2008, related to the accident that occurred in February, 2008.

“Our Port Wentworth rebuild progress has been truly remarkable and all of our employees and contractors are to be commended for their hard work,” stated John Sheptor, president and CEO of Imperial Sugar. “During the quarter, we completed the concrete pour of the sugar silos and work began on the interior structures. The new packaging building is now virtually complete structurally and we are installing material handling and packaging equipment. In June, we resumed limited shipments of liquid bulk sugar and in late July, we began shipping bulk granulated sugar to our industrial customers.”

“Current USDA projections call for a continuation of tight refined sugar supplies for the upcoming year,” added Sheptor. “Wholesome Sweeteners is also well positioned to capture future growth in the natural and organic sweetener business and CSI Mexico continues to perform favorably with improved year-to-date earnings. All of these factors should help contribute to improved overall financial results in the coming months.”

For the third fiscal quarter, the Company reported that net sales increased 33% to $142.3 million, compared to $106.9 million for the same period last year due to increased supplies of sugar purchased from other producers to mitigate the loss of volume from the Port Wentworth refinery. In addition, increased deliveries from our Gramercy refinery into the consumer and distributor channels contributed to the higher sales.

Gross margin for the third quarter improved to a positive 0.2% compared to a negative 4.7% for the prior year quarter primarily due to sales price increases and domestic derivative gains, partially offset by manufacturing and raw sugar costs increases. The operating loss for the third quarter ended June 30, 2009 was $16.8 million compared to $21.2 million for the same period last year, which includes charges related to the Port Wentworth accident in both periods.

Nine months ended June 30, 2009

For the nine-month period ended June 30, the Company reported a net loss from continuing operations of $23.6 million, or $2.01 per share, compared with a net loss from continuing operations of $15.8 million, or $1.35 per share, for the same period last year. Included in the recent nine-month period are $14.4 million of pre-tax charges related to the refinery accident and a $16.1 million first quarter gain from a litigation settlement. Last year’s nine-month results include pre-tax charges of $17.3 million of refinery related charges and an $11.4 million gain from a limited partnership investment distribution.

Net sales for the nine-month period declined to $375.2 million compared to $467.6 million last year. Gross margin during the nine month period was a negative 2.3% compared to a positive 2.4% last year. Factors affecting year-to-date performance included lower sales volumes due to the Port Wentworth incident and higher energy and transportation costs, somewhat offset by increased sales prices and lower selling, general and administrative expenses.

Capital expenditures for the nine-month period were $99.1 million, including $93.2 million related to the Port Wentworth rebuild project. The Company believes that its liquidity and available capital resources, including insurance recoveries, cash balances and existing revolving credit agreement are sufficient at this time to meet operating and capital needs. At July 31, 2009, the Company had cash and cash equivalents of $54.8 million. Total borrowings under the revolving credit facility were $60 million with the capacity to borrow another $30.6 million. Advances received thus far on property insurance claims total $200 million.

About Imperial

Imperial Sugar Company is one of the largest processors and marketers of refined sugar in the United States to food manufacturers, retail grocers and foodservice distributors. The Company markets products nationally under the Imperial®, Dixie Crystals® and Holly® brands.