Westway Group, Inc. Announces 2009 Results
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<p><span class="xn-location">NEW ORLEANS</span>, <span class="xn-chron">March 16</span> /CNW/ -- Westway Group, Inc. (Nasdaq: WWAY) today reported consolidated EBITDA (on a pro forma adjusted basis) for the twelve months ended <span class="xn-chron">December 31, 2009</span> of <span class="xn-money">$40.2 million</span>, up <span class="xn-money">$0.5 million</span> or 1% from the same period in 2008. For the fourth quarter ended <span class="xn-chron">December 31, 2009</span>, consolidated actual EBITDA totaled <span class="xn-money">$12.7 million</span>. Consolidated EBITDA on a pro forma adjusted basis reflects income before income tax provision, equity in unconsolidated subsidiaries, interest expense, depreciation and discontinued operations.</p>
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(Logo: http://www.newscom.com/cgi-bin/prnh/20090529/DA24496LOGO)
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<p>For the 12 month period ended <span class="xn-chron">December 31, 2009</span>, net loss applicable to common shareholders totaled <span class="xn-money">$6.2 million</span> or (<span class="xn-money">$0.26</span>) loss per basic or diluted share. Net income applicable to common stockholders during 2009 was negatively impacted by expenses relating to the <span class="xn-chron">May 28, 2009</span> business combination of <span class="xn-money">$13.9 million</span> and by accrued preferred stock dividends of <span class="xn-money">$2.5 million</span>.</p>
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<p>In commenting on the Company's performance, <span class="xn-person">Peter Harding</span>, CEO, stated, "We are pleased with the results of both the liquid storage and liquid feed supplement businesses in the first year of consolidated operations since the acquisition of these businesses in May of 2009. During the period since the acquisition, our liquid storage business continued to grow capacity and generate increased revenue. Despite slightly lower tonnage volumes experienced in 2009, the results from our liquid feed business remained essentially flat compared to 2008 due to an emphasis on higher margin products. Our results on a pro forma twelve month basis, as though the merger had occurred on <span class="xn-chron">January 1, 2009</span>, are in keeping with our expectations, and they are reflective of management's commitment to improving efficiency and long-term shareholder value."</p>
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<p>"We have achieved a number of significant milestones during 2009 since our merger, including the following:</p>
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-- Successfully completed a major business combination, whereby we
acquired the bulk liquid storage and liquid feed supplements
businesses
of ED & F Man for cash and stock;
-- Paid a special cash dividend of $1.00 per share to Class A
shareholders
in accordance with agreements made in connection with the business
combination;
-- Structured an interim $100 million credit facility with ED & F Man
which was subsequently replaced by a three-year $175 million credit
facility with a syndicate of high quality banks;
-- Acquired all of the storage assets, contractual relationships, and
property of Southside River Rail Terminal, Inc., located in
Cincinnati,
Ohio with over 35 million gallons of bulk liquid storage capacity for
approximately $20 million;
-- Completed construction and commissioned a major new storage facility
at
Gray's Harbor, located in Washington State, which will add to our
annual earning capacity in 2010--this facility also has the
infrastructure in place for additional phases of growth;
-- Completed construction and commissioned a custom built liquid storage
facility for a major customer at our Houston facility which added
356,000 barrels of storage capacity and which will add approximately
$2.4 million of annual net revenue;
-- Launched a 5 million gallon expansion of the Port Allen terminal
facility, located in Baton Rouge, Louisiana;
-- Total bulk storage capacity reached approximately 350 million gallons,
and the storage utilization rate averaged 95%;
-- Liquid Feed Supplements ("Feed") tonnage totaled approximately 0.9
million tons, and our Feed operating margin improved due to an
increased emphasis on higher margin products;
-- Moved Westway Group, Inc. stock trading from OTC bulletin board to
NASDAQ."
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<p>"These achievements are consistent with Westway's strategy for growth through acquisitions infill expansion of existing facilities, greenfield development, improving margins, and enhanced company recognition. We are excited about the future growth opportunities for Westway both in terms of our global footprint as well as our increasing emphasis on building long-term relationships through branding of the Westway name and reputation for consistent, quality customer service."</p>
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Overview of Business Segments
4th Quarter 2009 Compared to 3rd Quarter 2009
Bulk Liquid Storage
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<p>In the fourth quarter of 2009, revenues increased by <span class="xn-money">$3.8 million</span> or 22% as compared to the three months ended <span class="xn-chron">September 30, 2009</span>. Adjusted Gross Profit increased by <span class="xn-money">$3 million</span> or 30%. Additionally, the adjusted gross profit margin increased from 56.6% to 60.6%. The contribution to Adjusted EBITDA from bulk liquid storage increased <span class="xn-money">$4.8 million</span>, up 61% for the fourth quarter. These improvements in the quarter to quarter comparison are primarily attributable to the acquisition of our <span class="xn-location">Cincinnati</span> Terminal, which was completed in mid October, the expansion of our <span class="xn-location">Houston</span> facility, and the completion of our Gray's Harbor Washington facility, which began operations in December.</p>
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Liquid Feed Supplements
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<p>In the fourth quarter of 2009, revenues increased by <span class="xn-money">$11.8 million</span> or 21% as compared to the three months ended <span class="xn-chron">September 30, 2009</span>. Adjusted Gross Profit increased by <span class="xn-money">$1.6 million</span> or 23%. Additionally, adjusted gross profit margin increased from 12.7% to 12.8%. The contribution to Adjusted EBITDA from liquid feed supplements increased <span class="xn-money">$2.9 million</span>, up 70%. These improvements reflect the normal seasonality of the liquid feed business as evidenced by tonnage, which increased 23% in the fourth quarter to approximately 432,000 tons from approximately 352,000 tons in the third quarter.</p>
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Consolidated
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<p>In the fourth quarter 2009, consolidated Adjusted EBITDA for Westway Group Inc. totaled <span class="xn-money">$12.7 million</span> compared to <span class="xn-money">$9.8 million</span> for the third quarter of 2009. Revenues increased by <span class="xn-money">$15.6 million</span> or 21% as compared to the three months ended <span class="xn-chron">September 30, 2009</span>. Adjusted Gross Profit increased by <span class="xn-money">$4.4 million</span> or 26%. Additionally, adjusted gross profit margin increased from 23.2% to 24.0%.</p>
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<p>The results for the 3-month periods ended <span class="xn-chron">December 31, 2009</span> and <span class="xn-chron">September 30, 2009</span> reflect actual results and not pro forma.</p>
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Three-month actual results for the two operating segments of Westway Group
Inc.
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3 Month Actual Ended 3 Month Actual Ended
December 31, 2009 September 30, 2009
Bulk Liquid Bulk Liquid
Liquid Feed Liquid Feed
Storage Supplement Storage Supplement
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Revenue $21,439 $67,875 $17,609 $56,096
Adjusted Gross Profit
(4) 12,999 8,716 9,963 7,108
Adjusted Gross Profit
Margin 60.6% 12.8% 56.6% 12.7%
Adjusted EBITDA (3) 12,652 7,022 7,879 4,168
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<p>Three-month consolidated actual Results for Westway Group Inc. (Net of corporate charges)</p>
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3 Month Actual Ended
Consolidated
------------
December September
31, 2009 30, 2009
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Revenue $89,314 $73,705
Adjusted Gross Profit
(4) 21,446 17,071
Adjusted Gross Profit
Margin 24.0% 23.2%
Adjusted EBITDA (3) 12,674 9,843
Annual Comparison 2009 to 2008
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<p>Bulk Liquid Storage produced total pro forma revenue of approximately <span class="xn-money">$73.9 million</span>, up <span class="xn-money">$1.6 million</span> or 2%, for the twelve months ended <span class="xn-chron">December 31, 2009</span>. In the U.S., there was an increase of <span class="xn-money">$4.4 million</span>, reflecting a partial year benefit from the expansions achieved in 2009, including our <span class="xn-location">Houston</span> facility, Gray's Harbor Washington facility and the acquisition of Southside River-Rail terminal in <span class="xn-location">Cincinnati</span>, Ohio. Outside of the U.S., revenue decreased by <span class="xn-money">$2.9 million</span> primarily reflective of lower ED & F Man Group molasses throughput. Additionally, bulk liquid storage operating results for 2009 were adversely affected by lower foreign exchange rates for the Euro, Pound Sterling, and Canadian dollar--the combined effect on earnings was approximately <span class="xn-money">$900,000</span> for 2009.</p>
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<p>For the twelve months ended <span class="xn-chron">December 31, 2009</span>, total pro forma revenue for the Liquid Feed Supplements business decreased <span class="xn-money">$43.5 million</span>, or 15%, driven by a decrease in volume of approximately 240,000 tons, or 13%, compared to the same period for 2008. This decrease was reflective of lower demand due to the relative high cost of molasses as an ingredient in our products and difficult business conditions in both the dairy and cattle industries. Cost of sales also decreased by <span class="xn-money">$40.4 million</span>, or 16%, due to lower volumes. Operating costs and expenses decreased by <span class="xn-money">$2.1 million</span>, or 9%, reflective of underlying cost control and reduced energy costs as well as lower variable operating costs due to the decrease in sales volumes.</p>
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<p>Twelve-month pro forma results for the two operating segments of Westway (operation of the acquired storage and feed businesses for full 2009)</p>
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12 Month Pro Forma 12 Month Pro Forma
Ended Ended
December 31, 2009 December 31, 2008
Bulk Liquid Bulk Liquid
Liquid Feed Liquid Feed
Storage Supplement Storage Supplement
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Revenue $73,890 $255,541 $72,329 $299,020
Adjusted Gross Profit
(4) 42,852 27,722 42,416 28,780
Adjusted Gross Profit
Margin 58.0% 10.8% 58.6% 9.6%
Adjusted EBITDA (3) 35,474 16,745 34,079 17,423
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<p>Twelve-month actual results for the two operating segments of Westway (reflecting 217 days of operations of the acquired businesses for 2009)</p>
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12 Month Actual Ended
December 31, 2009
Bulk Liquid
Liquid Feed
Storage Supplement
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Revenue $45,134 $143,653
Adjusted Gross Profit
(4) 26,783 17,457
Adjusted Gross Profit
Margin 59.3% 12.2%
Adjusted EBITDA (3) 23,176 11,952
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<p>The actual results for the twelve-month period ended <span class="xn-chron">December 31, 2008</span> are not presented because they would consist solely of Shermen WSC Acquisition Corporation--the non-operating special purpose acquisition corporation-which was renamed Westway Group, Inc. on <span class="xn-chron">May 28, 2009</span>. The 2009 results reflect only 217 days of operations of the businesses acquired from ED & F Man on <span class="xn-chron">May 28, 2009</span>.</p>
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<p>Twelve-month Consolidated actual results for Westway Group Inc. (Net of corporate charges)</p>
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2009 2008
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Revenues 188,787 -
Adjusted Gross profit (4) 43,495 -
Adjusted EBITDA (1) (3) 24,926 (869)
Net (loss) income applicable to common
stockholders (2) (6,175) 741
Earnings(loss) per share basic $(0.26) $0.04
Earnings(loss) per share diluted $(0.26) $0.03
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<p>Note 1 - Includes corporate selling, general & administrative expenses of <span class="xn-money">$9.5 million</span> and adjusted for <span class="xn-money">$13.9 million</span> of business combination expenses in 2009.</p>
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Note 2 -Includes accrued preferred stock dividends of $2.5 million in
2009.
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<p>The actual results for the twelve-month period ended <span class="xn-chron">December 31, 2008</span> consists solely of Shermen WSC Acquisition Corporation--the non-operating special purpose acquisition corporation-which was renamed Westway Group, Inc. on <span class="xn-chron">May 28, 2009</span>.</p>
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Business Drivers
Bulk Liquid Storage
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<p>In the liquid storage business, the primary drivers of performance are total capacity, capacity utilization, rates, and throughput. Our total capacity increased from approximately 284 million gallons in 2008 to approximately 350 million gallons in 2009, and our capacity utilization was consistently high at around 95%. We utilize long-term contractual arrangements in our bulk liquid storage business, which include annual CPI adjustments. Our performance is also sensitive to the molasses throughput of ED&F Man, our largest customer and one of the largest molasses traders in the world.</p>
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Liquid Feed Supplements
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<p>The primary drivers of performance for the liquid feed business are tonnage sold and margins earned. Factors affecting these drivers are general economic conditions in the dairy and cattle industries as well as weather conditions and the relative price of liquid ingredients.</p>
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<p><span class="xn-person">Peter Harding</span> further commented, "In 2009, molasses became a less attractively priced feed ingredient compared to 2008. As a result of higher prices for sugar in 2009, third party crop forecasts are predicting a material increase in world wide sugar production. If this occurs there could be an increase in the availability of molasses, which would, in turn, make molasses a more competitively priced ingredient."</p>
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<p>Forward-Looking Statements. This press release includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. We have based these forward-looking statements on our current expectations and projections about future events. These forward-looking statements are subject to known and unknown risks, uncertainties and assumptions about us that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by such forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as "may," "should," "could," "would," "expect," "plan," "anticipate," "believe," "estimate," "continue," or the negative of such terms or other similar expressions. Factors that might cause or contribute to such a discrepancy include, but are not limited to, those described in our form 10-K filed today and other SEC filings.</p>
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<p>About Westway Group, Inc. Westway Group, Inc. ("Westway") is a leading provider of bulk liquid storage and related value-added services and a leading manufacturer and distributor of liquid animal feed supplements. Westway operates an extensive global network of 25 operating facilities providing approximately 350 million gallons of total bulk liquid storage shell capacity and 37 facilities producing 1.8 million tons of liquid feed supplements annually. Our bulk liquid storage business is a global business with infrastructure that includes a network of terminals offering storage to manufacturers and consumers of agricultural and industrial liquids, located at key port and terminal locations throughout <span class="xn-location">North America</span> and in Western <span class="xn-location">Europe</span> and Asia. Our liquid feed supplements business produces liquid animal feed supplements that are sold directly to end users and feed manufacturers, primarily supplying the beef and dairy livestock industries.</p>
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<p>Note 3- Adjusted EBITDA, as used herein, is defined as income (loss) before income tax benefit (provision) and equity in loss of unconsolidated subsidiaries, which is defined as the aggregate of gross profit plus depreciation, net other expense (which includes interest expense net of interest income), discontinued operations, and business combination costs.</p>
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<p>Adjusted EBITDA is presented in this release because it is an important supplemental measure of performance and is frequently used by securities analysts, investors and other interested parties in the evaluation of businesses. Other companies may calculate Adjusted EBITDA differently.</p>
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<p>Note 4- Adjusted Gross Profit, as used herein, is defined as net revenues, less cost of sales, and less other operating costs and expenses.</p>
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Income (Loss) Before Income Tax Benefit
(Provision) and Equity in Unconsolidated
Subsidiaries Reconciliation
----------------------------------------
Pro Forma Pro Forma
12 months ended 12 months ended
December 31, 2009 December 31, 2008
Storage Feed Storage Feed
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Income (loss) before
income tax benefit
(provision) and equity
in unconsolidated
subsidiaries $23,285 $12,783 $23,826 $13,542
Depreciation 12,189 3,962 10,253 3,881
Adjusted EBITDA (3) 35,474 16,745 34,079 17,423
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Income (Loss) Before Income Tax Benefit (Provision)
and Equity in Unconsolidated Subsidiaries
Reconciliation
---------------------------------------------------
Actual
12 months ended
December 31, 2009
Storage Feed
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Income (loss) before income
tax benefit (provision) and
equity in unconsolidated
subsidiaries $14,968 $8,932
Depreciation 8,034 3,000
Business Combination Costs 174 20
Adjusted EBITDA (3) 23,176 11,952
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Income (Loss) Before Income Tax Benefit
(Provision) and Equity in Unconsolidated
Subsidiaries Reconciliation
----------------------------------------
Pro Forma Pro Forma
12 months ended 12 months ended
December 31, 2009 December 31, 2008
Consolidated Consolidated
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Income (loss) before income
tax benefit (provision) and
equity in unconsolidated
subsidiaries 21,345 23,219
Interest Expense, net 2,688 2,383
Depreciation 16,207 14,190
Adjusted EBITDA (3) $40,241 $39,792
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Income (Loss) Before Income Tax Benefit
(Provision) and Equity in Unconsolidated
Subsidiaries Reconciliation
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Actual Actual
12 months ended 12 months ended
December 31, 2009 December 31, 2008
Consolidated Consolidated
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Income (loss) before income
tax benefit (provision) and
equity in unconsolidated
subsidiaries (1,343) 1,527
Interest Expense, net 1,318 (2,396)
Depreciation 11,060 -
Business Combination Costs 13,891 -
Adjusted EBITDA (3) $24,926 $(869)
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Income (Loss) Before Income Tax Benefit
(Provision) and Equity in Unconsolidated
Subsidiaries Reconciliation
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Actual Actual
3 months ended 3 months ended
December 31, 2009 September 30, 2009
Storage Feed Storage Feed
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Income (loss) before
income tax benefit
(provision) and equity
in unconsolidated
subsidiaries $8,347 $5,372 $4,879 $3,142
Depreciation 4,126 1,676 2,977 1,003
Interest Expense, net 5 (46) 23 23
Business Combination
Costs 174 20 - -
Adjusted EBITDA (3) 12,652 7,022 7,879 4,168
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Income (Loss) Before Income Tax Benefit
(Provision) and Equity in Unconsolidated
Subsidiaries Reconciliation
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Actual Actual
3 months ended 3 months ended
December 31, 2009 September 30, 2009
Consolidated Consolidated
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Income (loss) before income
tax benefit (provision) and
equity in unconsolidated
subsidiaries 6,165 5,396
Interest Expense, net 692 462
Depreciation 5,817 3,985
Adjusted EBITDA (3) $12,674 $9,843
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Net Revenue
Reconciliation
--------------
Actual
12 months ended
December 31, 2009
Storage Feed
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<p> </p>
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Net Revenue 45,134 143,653
Cost of Sales - (115,416)
Operating Costs and Expenses (18,351) (10,780)
Adjusted Gross Profit (4) 26,783 17,457
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Net Revenue Reconciliation
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Pro Forma Pro Forma
12 months ended 12 months ended
December 31, 2009 December 31, 2008
Storage Feed Storage Feed
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<p> </p>
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Net Revenue 73,890 255,541 72,329 299,020
Cost of Sales - (206,738) - (247,096)
Operating Costs and
Expenses (31,038) (21,081) (29,913) (23,144)
Adjusted Gross Profit
(4) 42,852 27,722 42,416 28,780
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Net Revenue Reconciliation
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Actual Actual
3 months ended 3 months ended
December 31, 2009 September 30, 2009
Storage Feed Storage Feed
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Net Revenue 21,439 67,875 17,609 56,096
Cost of Sales - (54,328) - (44,852)
Operating Costs and
Expenses (8,440) (4,831) (7,646) (4,136)
Adjusted Gross Profit
(4) 12,999 8,716 9,963 7,108
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Net Revenue Reconciliation
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Actual Actual
3 months ended 3 months ended
December 31, 2009 September 30, 2009
Consolidated Consolidated
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<p> </p>
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Net Revenue 89,314 73,705
Cost of Sales (54,328) (44,852)
Operating Costs and Expenses (13,540) (11,782)
Adjusted Gross Profit (4) 21,446 17,071
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Net Revenue
Reconciliation
--------------
Actual
12 months ended
December 31, 2009
Consolidated
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<p> </p>
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Net Revenue 188,787
Cost of Sales (115,416)
Operating Costs and Expenses (29,876)
Adjusted Gross Profit (4) 43,495
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Summary of Selected Consolidated
Balance Sheet Items (in thousands)
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As of As of
December 31, December 31,
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2009 2008
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Property, plant and equipment 324,587 (5) -
Goodwill 89,970 (5) -
Net deferred tax liability 65,108 -
Borrowings under credit
facility 91,633 -
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Stockholders' equity 295,360 80,512
Total Liabilities and Stock.
Equity $517,697 $139,377
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<p>Note 5- Reflects the revised preliminary estimate of the purchase price allocation.</p>
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2009 Results Conference Call:
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<p>The company has scheduled a conference call following this earnings release on <span class="xn-chron">Tuesday, March 16, 2010</span>, at <span class="xn-chron">10:30 a.m., Central time</span>, <span class="xn-chron">11:30 a.m., Eastern Time</span>. During the call, the company's Chief Executive Officer, <span class="xn-person">Peter Harding</span>, and Chief Financial Officer, Thomas Masilla, will discuss Westway's financial results. Financial information referenced during the conference call will be posted to the "Investor Relations" section of the company's website, <a href="http://www.westway.com">http://www.westway.com</a>.</p>
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<p>To participate in the conference call, dial (408) 774-4004 or (877) 312-9404 and provide conference identification code 62671773. The Company intends to have a playback available for seven days following the conference call, which may be accessed by calling (706) 645-9291 or (800) 642-1687 and providing conference identification code 62671773. Thereafter, a playback will be available on the Company's website at <a href="http://www.westway.com">http://www.westway.com</a> for three months following the conference call.</p>
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<p>For more information for periods ending <span class="xn-chron">December 31, 2009</span> and <span class="xn-chron">December 31, 2008</span>, please refer to the company's Form 10-K, which is available on Westway's website address at <a href="http://www.westway.com">www.westway.com</a></p>
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For further information: Thomas A. Masilla, Jr., Chief Financial Officer of Westway Group, Inc., +1-504-636-4245 Web Site: http://www.westway.com
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