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Phosphate Holdings impacted by floods in Morocco

MADISON — Phosphate Holdings Inc. reports fourth quarter 2010 income of $900,000, or $0.10 per share of common stock, compared to losses of $2.8 million, or $0.36 per share of common stock, for the same period in 2009.

Net income for the year ended Dec. 31, 2010, was $1.1 million, or $0.13 per share of common stock, as compared to losses of $13.6 million, or $1.76 per share of common stock, for the same period last year. The Company’s 2009 year-to-date results were materially impacted by inventory write-downs to net realizable value of approximately $10.4 million.

Net sales for the fourth quarter of 2010 were $68.5 million, a 45 percent increase from net sales of $47.2 million for the fourth quarter of 2009.

Net sales were $261.1 million, a 40 percent increase from net sales of $186.3 million for the year ended Dec. 31, 2009.

Robert E. Jones, CEO, said, “In Nov. 2010, we performed a major maintenance turnaround. This turnaround was designed to address all known issues constraining sulfuric acid, phosphoric acid and DAP production. Upon completion of the turnaround, we saw improvements in our DAP production rates, as we produced approximately 55,000 short tons in December 2010. However, with operational issues at the beginning of the quarter and substantial downtime associated with the turnaround, our DAP production was limited to approximately 127,000 short tons in the fourth quarter of 2010. This production volume limited our participation in a favorable phosphate market.

“While we believe we have improved the operating performance of our plants, phosphate rock shortages have hindered first quarter 2011 production. Severe flooding conditions in Morocco created logistical issues for our phosphate rock supplier, resulting in significant delays in the delivery of phosphate rock to our facility. Accordingly, we curtailed production during the latter half of January and early February to avoid a shutdown of our DAP granulation plant.”

On March 4, the company reports it and the Mississippi Department of Environmental Quality (MDEQ) executed an agreed order, which settled all matters previously cited by a Notice of Violation received by the company from the MDEQ and certain other pending environmental matters with the MDEQ. In connection with this settlement, the company agreed to pay a civil penalty of $297,000. This penalty has been recorded in the accompanying 2010 consolidated financial statements.

At the end of 2010, Phosphate Holdings’ board of directors appointed a special committee of independent directors to initiate a comprehensive review of strategic options. While this review is ongoing, the company reports it will not hold an earnings call to discuss our fourth quarter and year-end 2010 financial results and will not otherwise discuss this strategic process. When the strategic process is completed, we intend to resume regular quarterly earnings calls.

The company said it looks “forward to providing a more comprehensive update at our annual meeting in late June in New York City. Details regarding the date and time of this meeting will be forthcoming.”

The company is a Delaware corporation and the sole stockholder of Mississippi Phosphates Corporation. Mississippi Phosphates Corporation is a Delaware corporation with its executive headquarters in Madison. Mississippi Phosphates Corporation owns and operates manufacturing facilities in Pascagoula, which produce diammonium phosphate, the most common form of phosphate fertilizer used as a source of phosphate on all major row crops.

Source: Phosphate Holdings Inc.


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