You've gotta cook sugar to make caramel. When you leave it on the heat for 12 months, however, you get market-crushing returns above 250% -- at least, you do if you're talking about Imperial Sugar (NASDAQ:IPSU), a sugar maker and marketer that owns the Dixie Crystals, Holly, and Spreckels brands, among other businesses.

Its shares were up big again today on heavy volume following the announcement of fiscal Q4 (ended Sept. 30) and full-year financial results. No doubt the company's massive growth in reported net income (from $16.4 million to $76.7 million) caught some investors' eyes, but to really understand what's going on here you've got to look a bit closer.

Imperial emerged from bankruptcy in Aug. 2001. Management has since reshaped the company considerably by refinancing debt, selling businesses, and consolidating facilities to concentrate solely on producing, packaging, and distributing sugar. That business has generally been strong over time with domestic demand growing until recently, though price increases have helped maintain gross margins.

What all this means for investors, in the end, is that following reported net income doesn't tell enough of the story. The list of items and notes accompanying the latest press release is impressive and clouds the company's profitability picture considerably with talk of gains on asset sales, severance costs, professional fees, lease income from facilities now off the books, interest forgiveness credits, and more.

To get the best idea of how the company will look going forward, you might concentrate instead on revenue from continuing operations and take care to consider which items affecting operating income will be temporary. (Sales from continuing operations were about flat year over year, while gross margins improved as the operational restructuring bore fruit.)

Presumably the company's financial picture will clear up considerably before long. The Dixie Crystal ball says Imperial has the makings of a nice, boring, cash-producing company -- not bad for investors who locked on shortly after it came out of bankruptcy's darkness.

It's worth keeping in mind, however, that it's difficult to see big long-term profit growth in the sugar business. A dividend might make up for that, but the company doesn't pay one -- its credit pact forbids it to do so until at least 2006 unless it pays debt off early.

Dave Marino-Nachison can be reached at