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Q1 Results: All is Not as it Seems at Omega Protein

Nutrition Economics +2 more

HOUSTON, US - The leading US producer of Omega-3 fish oil and specialty fish meal products has reported an increased net income for the first quarter of 2009, but without a $2.7 million assistance grant these results would have proved far worse.

Omega Protein's first quarter net income for this year amounted to $2.1 million. This is a rise by comparison with last year's $1.9 million ($0.11 a share) for the first quarter of 2008. Revenues for the first quarter ended March 31, 2009 were $30.2 million compared with revenues of $36.1 million for the comparable quarter in 2008. Omega Protein recorded operating income of $4.3 million for the first quarter of 2009, versus operating income of $4.0 million for the first quarter of 2008.

However, the Company received a federal hurricane assistance grant of $2.7 million from the State of Mississippi, net of fees, related to the impact of Hurricane Katrina, which occurred during 2005. Excluding this grant from the results of operations, reported net income for the quarter ended March 31, 2009 would have resulted in Omega Protein reporting approximately $0.5 million of net income ($0.02 a share).

The Company says that its 2009 first quarter results reflect decreased revenues and margins primarily due to lower sales volumes and increased per unit costs, offset partially by increased sales prices when compared to the 2008 quarter.

The decreased sales volumes are a result of the general constriction of the global markets. Increased pricing was the result of carry over contracts entered into during 2008. Pricing trends for the remainder of 2009 are expected to trend downward, particularly for fish oil.

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