Omega Protein Corp. (OME, Financial) filed Quarterly Report for the period ended 2009-03-31.
Omega Protein Corporation headquartered in Houston is one of the nation's leading producers of edible fish oil which is high in nutritionally desirable Omega-3 fatty acids and is used in a variety of food products. Omega Protein also produces specialty fish meals for use in livestock feeds and fish solubles which are used as an organic fertilizer and in other applications. (Company Press Release) Omega Protein Corp. has a market cap of $58.7 million; its shares were traded at around $3.14 with a P/E ratio of 4.7 and P/S ratio of 0.3. Omega Protein Corp. had an annual average earning growth of 26.9% over the past 5 years.
During 2005, 2006 and 2008, the Companys fish catch and resultant product inventories were reduced, primarily due to adverse weather conditions, and the Company further expanded its purchase and resale of other fish meals and oils (primarily Panamanian, Peruvian and Mexican fish meal and U.S. menhaden oil). Although operating margins from these activities are less than the margins typically generated from the Companys base domestic production, these operations provide the Company with a source of fish meal and oil to sell into other markets, some of which, the Company has not historically had a presence. During 2006, the Company purchased products totaling approximately 14,600 tons, or approximately 7% of total volume 2006 sales. During 2007, the Company purchased fish oil totaling approximately 5,500 tons, or approximately 9.1% of fish oil sales volumes for 2007. During 2008 and the first quarter of 2009, the Company did not purchase any fish meal or fish oil.
Fish meal prices have historically borne a relationship to prevailing soybean meal prices (more weakly correlated in recent years), while prices for fish oil are generally influenced by prices for vegetable oils, such as rapeseed, soybean and palm oils. Thus, the prices for the Companys products are established by worldwide supply and demand relationships over which the Company has no control and tend to fluctuate significantly over the course of a year and from year to year. For example, during 2008, the Company experienced fish oil price increases of approximately 73.4% when compared to 2007, whereas palm oil and soy oil prices rose 35% and 43%, respectively. Beginning in the third quarter of 2008, pricing in the agricultural commodity markets began to decrease. Spot fish oil and fish meal prices have followed these general trends during the second half of 2008 and the first quarter of 2009.
Read the The complete ReportOME is in the portfolios of Robert Bruce of Bruce & Co., Inc..
Omega Protein Corporation headquartered in Houston is one of the nation's leading producers of edible fish oil which is high in nutritionally desirable Omega-3 fatty acids and is used in a variety of food products. Omega Protein also produces specialty fish meals for use in livestock feeds and fish solubles which are used as an organic fertilizer and in other applications. (Company Press Release) Omega Protein Corp. has a market cap of $58.7 million; its shares were traded at around $3.14 with a P/E ratio of 4.7 and P/S ratio of 0.3. Omega Protein Corp. had an annual average earning growth of 26.9% over the past 5 years.
Highlight of Business Operations:
Historically, approximately 35% to 40% of Omegas FAQ grade fish meal was sold on a two-to-twelve-month forward contract basis. The balance of FAQ grade fish meal and other products was substantially sold on a spot basis through purchase orders. In 2002, the Company began a similar forward sales program for its specialty grade meals and crude fish oil due to increasing demand for these products. During 2006, 2007 and 2008 approximately 70%, 50% and 65%, respectively, of the Companys fish meals and crude fish oil had been sold on a forward contract basis prior to those years respective fishing season. Prior to the beginning of the Companys 2009 fishing season, approximately 52% and 39% of the Companys 2009 forecasted fish meal and crude fish oil, respectively, had either been sold or sold forward on a contract basis. The percentage of fish meal and crude fish oil sold on a forward contract basis will fluctuate from year to year based upon perceived market availability.During 2005, 2006 and 2008, the Companys fish catch and resultant product inventories were reduced, primarily due to adverse weather conditions, and the Company further expanded its purchase and resale of other fish meals and oils (primarily Panamanian, Peruvian and Mexican fish meal and U.S. menhaden oil). Although operating margins from these activities are less than the margins typically generated from the Companys base domestic production, these operations provide the Company with a source of fish meal and oil to sell into other markets, some of which, the Company has not historically had a presence. During 2006, the Company purchased products totaling approximately 14,600 tons, or approximately 7% of total volume 2006 sales. During 2007, the Company purchased fish oil totaling approximately 5,500 tons, or approximately 9.1% of fish oil sales volumes for 2007. During 2008 and the first quarter of 2009, the Company did not purchase any fish meal or fish oil.
Fish meal prices have historically borne a relationship to prevailing soybean meal prices (more weakly correlated in recent years), while prices for fish oil are generally influenced by prices for vegetable oils, such as rapeseed, soybean and palm oils. Thus, the prices for the Companys products are established by worldwide supply and demand relationships over which the Company has no control and tend to fluctuate significantly over the course of a year and from year to year. For example, during 2008, the Company experienced fish oil price increases of approximately 73.4% when compared to 2007, whereas palm oil and soy oil prices rose 35% and 43%, respectively. Beginning in the third quarter of 2008, pricing in the agricultural commodity markets began to decrease. Spot fish oil and fish meal prices have followed these general trends during the second half of 2008 and the first quarter of 2009.
Read the The complete ReportOME is in the portfolios of Robert Bruce of Bruce & Co., Inc..
