0 million in reimbursements from insurers

Consolidated operating expenses were comparable to a year ago at $7.3 million.Operating results also include $6.8 million of flood recovery expenses incurredin the Industrial Ingredients business during the first fiscal quarter of 2009as well as the recognition of $11.0 million in reimbursements from insurers.Income from operations was $0.8 million versus $5.8 million last year. The effective tax rate for the three months ended November 30, 2008 was 57compared with 36 a year ago. The increase in the tax rate in the first quarter2009 is due to the recognition in the financial statements of $0.2 million oftax credits applicable to research and development activities. The net loss forthe quarter was $0.4 million, or $0.03 per diluted share, compared to net incomeof $3.2 million, or $0.33 per diluted share, for the same quarter last year. In the second quarter of fiscal 2008, the Company issued 2.0 million shares ofcommon stock in a public offering.

This transaction increased weighted averageshares for the first quarter of fiscal 2009 by 2.0 million over the prior yearfirst quarter. Segment ResultsFood Ingredients - North AmericaNorth American Food Ingredients first quarter fiscal 2009 revenues grew 10.4over last year to $17.7 million. Sales volume was comparable to last year,product mix improved contributing to an 11 increase in average selling price.Revenue from coating applications increased by 2 while non-coating applicationsexpanded by 20. Gross margin increased $0.7 million to $5.3 million in thefirst quarter 2009. Income from operations was$3.4 million compared with $2.7 million a year ago. Industrial Ingredients - North AmericaFirst quarter fiscal 2009 sales at the Industrial Ingredients business declined15 to $41.8 million from $49.2 million last year.

In mid-June 2008, theCompanys Cedar Rapids, Iowa manufacturing facility suffered an unprecedentedflood and plant operations were suspended for most of the fourth quarter of lastyear. Revenue decreases were attributable to the impact from the flood as starchproduction and customer shipments phased in through the quarter. The Industrialbusiness was also impacted by decisions by several paper customers to implementextended downtime, reflecting a significant decline in demand for our customerscoated and uncoated paper. Inventories for these paper segments remain lowrelative to historical levels. First quarter gross margin decreased to $0.1 million from $8.6 million a yearago.