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Omega Protein Reports 2008 Results

HOUSTON, March 10 /PRNewswire-FirstCall/ -- Omega Protein Corporation (NYSE: OME), the nation's leading producer of Omega-3 fish oil and specialty fish meal products, today reported net income of $12.6 million ($0.69 a share) for the fiscal year ended December 31, 2008, compared with net income of $12.1 million ($0.72 a share) for the year ended December 31, 2007.


For the year ended December 31, 2008, the Company had revenues of $177.4 million, compared with $157.1 million in revenues for the year ended December 31, 2007. Omega Protein recorded operating income of $23.5 million for the year ended December 31, 2008, versus operating income of $27.4 million for the comparable period a year earlier.

Revenues for the fourth quarter ended December 31, 2008 were $39.7 million compared with revenues of $44.3 million for the comparable quarter in 2007. Omega Protein recorded operating income of $2.5 million for the 2008 fourth quarter, versus operating income of $8.8 million for the fourth quarter of 2007.

The Company's 2008 results, in comparison to 2007, after excluding the effects of hurricane losses, insurance recoveries and debt refinancing costs from each of the reported periods, experienced growth in revenues (13%), gross profit (24%) and net income (80%). The 2008 results reflect increased pricing, particularly for fish oil, similar to other commodity markets during the first half of 2008, offset by decreased sales volumes. Commodity prices began to decrease mid year which contributed to declining gross profit margins in the third and fourth quarters of 2008.

During the quarter ended September 30, 2008, the Company suffered wind and flood damage to two facilities as a result of Hurricane Ike. The Company's Abbeville, Louisiana facility was restored to full capacity within a few weeks. The Company's Cameron, Louisiana facility is continuing its repairs and is expected to be fully functional for the beginning of the 2009 fishing season. Losses resulting from Hurricane Ike, net of insurance proceeds, were approximately $2.0 million. The Company's 2008 third and fourth quarter gross margins were further reduced primarily due to significantly higher per unit production costs due to the lost fishing days caused by Hurricanes Gustav and Ike, combined with increased energy, labor and repair costs experienced during the 2008 fishing season.

Results for the three and twelve months ended December 31, 2007 were favorably impacted by the settlement of the Company's lawsuit with its property insurance carriers pertaining to damages sustained from Hurricanes Katrina and Rita in 2005. The results for the year ended December 31, 2007 were also impacted by the net loss incurred during the first quarter of 2007 primarily due to the write-off of approximately $3.0 million in deferred debt issuance costs and prepayment fees resulting from the refinancing of the Company's prior credit agreement with a new credit facility which closed in March 2007. Excluding the settlement of the lawsuit and the write-off, reported 2007 net income would have resulted in Omega Protein reporting approximately $7.2 million in net income ($0.43 a share).

About Omega Protein

Omega Protein Corporation is the nation's largest manufacturer of heart-healthy fish oils containing Omega-3 fatty acids for human consumption, as well as specialty fish meals and fish oil used as value-added ingredients in aquaculture, swine and other livestock feeds. Omega Protein makes its products from menhaden, an Omega-3 rich fish that is not utilized as seafood, but which is abundantly available along the U.S. Gulf of Mexico and Atlantic Coasts.

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS: The statements contained in this press release that are not historical facts are forward-looking statements that involve a number of risks and uncertainties. The actual results of future events described in any of these forward-looking statements could differ materially from those stated in the forward-looking statements. Important factors that could cause actual results to be materially different from those forward-looking statements include, among others: (1) the Company's ability to meet its raw material requirements through its annual menhaden harvest, which is subject to fluctuations due to natural conditions over which the Company has no control, such as varying fish population, fish oil yields, adverse weather conditions and disease; (2) the impact of worldwide supply and demand relationships on prices for the Company's products; (3) Omega Protein's expectations regarding demand for OmegaPure(R) proving to be incorrect; (4) fluctuations in the Company's quarterly operating results due to the seasonality of the Company's business and its deferral of inventory sales based on worldwide prices for competing products; and (5) the capital and credit market crisis. These and other factors are described in further detail in Omega's filings with the Securities and Exchange Commission, including its reports on Form 10-K, Form10-Q and Form 8-K. The Company also posts its latest internally generated price list for various products on its Company website, Pricing and product availability information disclosed in the price list are subject to change or discontinuance without prior notice, and the Company undertakes no obligation to update such information.

                                    OMEGA PROTEIN CORPORATION
                                     Statement of Operations

                                    Three Months          Twelve Months
                                  Ended December 31,    Ended December 31,
                                   2008       2007       2008        2007
                                  (in thousands, except per share amounts)

    Revenues                     $39,668    $44,336   $177,412     $157,149
    Cost of sales                 31,411     35,650    134,387      122,455
    Gross profit                   8,257      8,686     43,025       34,694
    Selling, general and
     administrative expense        4,436      4,730     16,310       16,386
    Research and
     development expense             477        529      1,757        1,194
    (Insurance recoveries
     and other proceeds)
     losses relating to
     natural disaster and
     other, net                      807     (5,393)     1,415      (10,326)
    Operating income               2,537      8,820     23,543       27,440
    Interest income
     (expense), net                 (903)    (1,111)    (3,779)      (5,121)
    Loss resulting from
     debt refinancing                  -          -          -       (3,024)
    Other income (expense), net      (94)       (87)      (111)        (333)
    Income before income taxes     1,540      7,622     19,653       18,962
    Provision for income taxes       700      2,839      7,077        6,823
    Net income                      $840     $4,783    $12,576      $12,139
    Basic earnings per share       $0.04      $0.27      $0.69        $0.72
    Weighted average common
     shares outstanding           18,710     17,407     18,298       16,830
    Diluted earnings per share     $0.04      $0.27      $0.68        $0.70
    Weighted average common
     shares and potential common
     share outstanding            18,766     17,768     18,581       17,432

                                       OMEGA PROTEIN CORPORATION
                                        CONDENSED BALANCE SHEET

                                           December 31,     December 31,
                                               2008             2007
                                     (in thousands, except per share amount)
      Current assets                          $123,665        $107,651
      Property and equipment, net              106,181          96,659
      Deferred tax assets, net                       -             175
      Other assets                               2,735           3,344
        Total assets                          $232,581        $207,829
      Current liabilities                      $26,853         $24,190
      Long-term debt, less current maturities   51,312          58,976
      Capital lease obligation, net of
       current portion                           1,634               -
      Deferred tax liability,
       net of current portion                    3,005               -
      Pension liabilities, net and other        10,220           6,208
      Stockholders' equity                     139,557         118,455
        Total liabilities and
         stockholders' equity                 $232,581        $207,829

    Book value per share outstanding             $7.46           $6.79

SOURCE Omega Protein Corporation
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