Mr. Stuart Belkin reports

ROGERS SUGAR INC.: INTERIM REPORT FOR THE 3RD QUARTER 2015 RESULTS

Rogers Sugar Inc. has released the following message to shareholders:

Message to shareholders

On behalf of the board of directors, I am pleased to present the unaudited condensed consolidated interim financial results of Rogers Sugar Inc. for the three and nine months ended June 27, 2015.

Volume for the third quarter of fiscal 2015 was 160,713 metric tonnes compared with 158,489 metric tonnes in the comparable quarter of last year, an increase of approximately 2,200 metric tonnes. Year to date, volume of 465,900 metric tonnes was approximately 9,700 metric tonnes lower than last year. Industrial volume was higher for the quarter by approximately 900 metric tonnes but lower year to date by approximately 1,700 metric tonnes due to timing in deliveries. Consumer volume was lower for the quarter and year to date by approximately 400 metric tonnes and 5,900 metric tonnes, respectively. The decrease year to date is partially attributable to the timing in agreements with major accounts, whereby a new multiyear agreement started on Jan. 1, 2014, and another agreement with a major account ended March 31, 2014, thus resulting in additional volume in the second quarter of fiscal 2014. In addition, timing in customer retail promotions also contributed to the decrease in consumer volume. Liquid volume increased by approximately 3,300 metric tonnes for the quarter due to additional volume from existing customers. Year to date, the liquid segment has decreased by approximately 2,400 metric tonnes. The additional volume drawn by existing customers in fiscal 2015 partially offset the loss of volume following the completion of a one-year contract with a high-fructose corn syrup substitutable account in Western Canada, which ended in March, 2014. Finally, export volume was approximately 1,600 metric tonnes lower for the quarter and 300 metric tonnes higher year to date.

With the mark to market of all derivative financial instruments and embedded derivatives in non-financial instruments at the end of each reporting period, our accounting income does not represent a complete understanding of factors and trends affecting the business. Consistent with previous reporting, we therefore prepared adjusted gross margin and adjusted earnings results to reflect the performance of the company during the period without the impact of the mark to market of derivative financial instruments and embedded derivatives in non-financial instruments. Earnings before interest and income taxes included a mark-to-market loss of $8.6-million and $9.2-million for the third quarter and year to date, respectively, which were added to calculate adjusted EBIT and gross margin results.

Adjusted gross margin amounted to $19.4-million, an improvement of approximately $2.6-million versus last year's comparable quarter. The variance is largely attributable to the 2014 work force reduction at the Montreal refinery, which decreased labour costs in the third quarter by approximately $1.1-million versus the comparable quarter in fiscal 2014. In addition, adjusted gross margin increased due to higher sales volume and improved overall sales margin rates. As a result, on a per-metric-tonne basis, adjusted gross margin was favourable at $120.91 compared with $105.91, an increase of $15.

Despite lower volume, year-to-date adjusted gross margin, at $61.8-million, was $3.9-million higher than the same period last year. The adjusted gross margin rate per metric tonne was $132.71 compared with $121.84, an increase of $10.87 per metric tonne. The favourable increase in adjusted gross margin rate per tonne is due mainly to a reduction in labour and energy costs of approximately $4.1-million and $2.6-million, respectively. During fiscal 2015, the company benefited from energy cost savings as a result of a decline in natural gas prices, as well as the conversion from an interruptible gas contract in fiscal 2014 to a firm gas contract in the current year at the Montreal refinery. Labour and energy cost savings were partially offset by lower adjusted gross margin as a result of lower sales volume and by an increase in operating costs at the Taber beet factory as a result of severe beet deterioration at the end of the slicing campaign.

Administration and selling expenses were comparable with the third quarter of fiscal 2014, but include offsetting items. In the comparable quarter last year, the company recorded a non-cash administrative expense of $1.0-million, resulting from a decision to terminate the only remaining salaried defined benefit pension plan. Without this additional pension expense, administration and selling expenses were $1.0-million higher than the third quarter of fiscal 2014 due to higher employee benefits and timing of expenses. Year to date, administration and selling expenses were $400,000 higher than last year or $1.4-million higher if we exclude the pension expense with regard to the termination of the salaried defined benefit pension plan. The increase year to date is due mainly to higher consultant fees as a result of the completion of the process improvement review in Montreal and higher employee benefits.

Distribution expenses were $200,000 higher for the current quarter and $200,000 lower year to date when compared with last year.

As a result, adjusted EBIT was $12.3-million for the third quarter of fiscal 2015 versus $9.9-million for the comparable quarter and $39.9-million year to date, versus $36.2-million for the comparable period last year.

Free cash flow was $3.4-million higher than the comparable quarter in fiscal 2014. Year to date, free cash flow, at $28.8-million, was $6.9-million higher than the comparable period of fiscal 2014. The increase in free cash flow for the quarter is due mainly to lower interest paid of $1.4-million, lower income taxes paid of $800,000 and lower net capital expenditures of $800,000. Year to date, pension contributions were $3.7-million lower than the comparable period last year. In addition, income taxes and interest paid were lower by $3.6-million and $1.2-million, respectively. The increase in free cash flow is also explained by a cash inflow from the issuance of common shares as opposed to the repurchase of common shares in the comparable period of fiscal 2014. These positive variances were partially offset by an increase of $1.5-million in net capital expenditures.

In May, 2015, the company reached a four-year agreement with the Alberta Sugar Beet Growers Association. This new agreement will ensure the continuity and stability of beet sugar production in Taber over the next four years.

Following the Montreal work force reduction in September, 2014, the company expects to achieve labour savings of approximately $5.0-million in fiscal 2015 compared with fiscal 2014.

These labour savings, as well as the year-to-date energy savings, are expected to be generally offset by a reduction in adjusted gross margin as a result of lower sales volume.

Administration and selling expenses for fiscal 2015 are expected to decrease due to one-time events that occurred in fiscal 2014. The process improvement analysis at the Montreal refinery resulted in incremental consulting fees and severance costs, and additional non-cash pension expense was recorded in fiscal 2014 as a result of the termination of a defined benefit pension plan.

For the board of directors,

Stuart Belkin, chairman

Vancouver, B.C., July 30, 2015

                     CONSOLIDATED RESULTS OF OPERATIONS
  (in thousands of dollars, except for volume and per-share information)

                                   For the three             For the nine
                                    months ended             months ended
                                 June 27,    June 28,     June 27,    June 28,
                                    2015        2014         2015        2014

Volume (metric tonnes)           160,713     158,489      465,900     475,609
Revenues                       $ 130,592   $ 128,432    $ 386,438   $ 392,607
Gross margin                      10,854       8,353       52,620      67,862
Administration and selling
expenses                           4,873       4,852       15,448      15,066
Distribution expenses              2,233       2,024        6,455       6,668
Earnings before interest
and provision for income
taxes (EBIT)                   $   3,748   $   1,477    $  30,717   $  46,128
Net finance costs                  2,272       2,675        8,633       8,064
Provision for income taxes           426        (312)       5,852       9,709
Net earnings (loss)            $   1,050   $    (886)   $  16,232   $  28,355
Net earnings (loss) per
share -- basic                 $    0.01   $   (0.01)   $    0.17   $    0.30

We seek Safe Harbor.