The Imperial Sugar Company (NASDAQ:IPSU) today reported a net loss for the second fiscal quarter ended March 31, 2008, of $15.5 million, or $1.33 per share, compared to net income of $8.7 million, or $0.74 per share, for the same period last year. Results include a pre-tax charge of $12.1 million related to the company’s Port Wentworth refinery explosion and fire that occurred on February 7, 2008. The total charge includes amounts for property impairment, inventory write-offs, and costs related to the fire totaling $28.0 million, offset by $15.9 million of insurance recoveries recognized from the company’s property damage policy.

Imperial’s board of directors declared a regular quarterly dividend of $0.07 per share, payable June 2, 2008 to shareholders of record May 23, 2008.

For the second fiscal quarter, net sales were $145.2 million, compared to $212.6 million for the same period last year. The decline in year-over-year quarterly sales was primarily due to the Port Wentworth event that curtailed sugar production and consequently sugar sales volumes.

Gross margin for the second quarter decreased to 1.5% from 10.2% in the prior year quarter. This decline was primarily due to lower prices resulting from U.S. sugar oversupply conditions and higher energy and transportation costs, offset in part by lower raw sugar prices.

The operating loss for the second quarter ended March 31, 2008 was $21.9 million, which includes the $12.1 million charge related to the Port Wentworth fire, compared with operating income of $11.3 million for second quarter ended March 31, 2007.

“Results for the second quarter were dramatically impacted by the costs and reduced volumes resulting from the refinery explosion and fire. The recognition of probable insurance recoveries, which lags incurred losses, did not fully offset the impact of the refinery event on the quarterly loss. This will likely continue for near term quarters as the ramp up of expenditures outpaces the timing of insurance settlements,” said John Sheptor, president and CEO of Imperial. “While historically the second quarter has been the sector’s weakest as retailers make inventory adjustments in the post holiday period, other factors in the quarter also contributed to lower operational results. An oversupplied market eroded prices further from the first quarter levels, and transportation and energy costs per hundredweight of sales rose 19% and 15% respectively year over year.”

For the six month period ended March 31, the Company reported a net loss of $3.3 million, or $0.28 per share, compared with net income of $24.4 million, or $2.11 per share, for the same period last year. Included in the recent six-month period are the $12.1 million pre-tax charge related to the refinery explosion and fire and a $11.2 million first quarter gain from a limited partnership investment distribution. Net sales for the period declined to $360.7 million compared to $439.6 million last year mainly due to the Port Wentworth incident. Gross margin declined in the six months to 4.5% versus 13.2% primarily due to pricing and higher energy and transportation costs.

“In addition to our focus on rebuild efforts in the second half of the year, we are working towards expansion of our Mexican joint venture and diversification of our portfolio. Sugar operations improvements resulting from our Lean/Six Sigma activities will be incorporated into the start up of the Port Wentworth refinery as well as the Gramercy refinery. Long term raw sugar sourcing for our Louisiana operations will continue to be a strategic priority. The engineering team is progressing in their assessment of repairs to the refinery and in the design of the new packaging facility,” added Sheptor.

“Our prayers go out to those impacted by the Port Wentworth tragedy and we extend our sincere thanks to all who have made donations to the relief fund. Imperial’s dedicated employees, board of directors, customers and shareholders have been very supportive during this challenging time. We continue to assist the affected families and communities, as well as the regulatory agencies as they conclude their investigations.”

Conference Call Details

Company officials will conduct a conference call today at 2:00 p.m. EST. Imperial Sugar's President and CEO John Sheptor and Senior Vice President and CFO Hal Mechler will discuss the company's operating results for its fiscal second quarter ended March 31, 2008, its current financial position and its business strategies.

Participants wishing to listen and participate in a brief question-and-answer session after the presentation can dial 1-800-706-7748 and enter the Participant Passcode: 61334263. The conference call can also be accessed via live audio webcast by visiting Imperial Sugar's web site at http://www.imperialsugar.com and clicking on the "Q2 2008 Imperial Sugar Earnings Conference Call" icon under "Investor Relations". For those who are unable to listen to the call during its live broadcast, a replay of the entire presentation will be available on the company's web site beginning one hour following the conclusion of the call. In addition to the webcast replay, a telephone replay will also be available beginning one hour following the conclusion of the call that can be accessed by dialing 1-888-286-8010 and entering the Passcode: 90700364. Both replays will be available through June 12, 2008.

Please note: Participants planning to listen to the call via the Internet may need to download Windows Media Player(R) to hear the call if this feature has not been previously installed on their computers.

About Imperial

Imperial Sugar Company is one of the largest processors and marketers of refined sugar in the United States to food manufacturers, retail grocers and foodservice distributors. The Company markets products nationally under the Imperial®, Dixie Crystals® and Holly® brands. For more information about Imperial Sugar, visit www.imperialsugar.com.

Statements regarding future market prices and margins, future Port Wentworth construction costs, timelines and operational restart dates, future expenses and liabilities arising from the Port Wentworth refinery incident, future insurance recoveries, future import and export levels, future government and legislative action, future operating results, future availability of raw sugar, operating efficiencies, future investments and initiatives, future cost savings, future product innovations, future energy costs, our liquidity and ability to finance our operations and capital investment programs, future pension payments and other statements that are not historical facts contained in this release are forward-looking statements that involve certain risks, uncertainties and assumptions. These include, but are not limited to, results of damaged equipment inspections, unforeseen engineering and equipment delays, results of insurance negotiations, market factors, farm and trade policy, our ability to realize planned cost savings and other improvements, the available supply of sugar, energy costs, the effect of weather and economic conditions, results of actuarial assumptions, actual or threatened acts of terrorism or armed hostilities, legislative, administrative and judicial actions and other factors detailed in the Company’s Securities and Exchange Commission filings. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual outcomes may vary materially from those indicated.

Imperial Sugar Company, Sugar Land
H. P. Mechler, 281-490-9652
Senior VP & CFO