Lassonde Industries Inc. announces its results for the fourth quarter and for fiscal 2011
ROUGEMONT, QC, March 29, 2012 /PRNewswire/ - Lassonde Industries Inc. (TSX: LAS.A) reports that its 2011 sales reached $760.3 million, up 41.8% from fiscal 2010. Profit attributable to the Company's shareholders stood at $34.5 million, up 7.8% over fiscal 2010.
These results are presented in accordance with International Financial Reporting Standards (IFRS). The results of the fourth quarter and of the prior fiscal year have been restated accordingly. An explanatory note concerning the transition is presented in Note 34 of the consolidated financial statements dated December 31, 2011.
(in thousands of dollars)
Fourth Quarters ended
|Profit before income taxes||17,253||16,314||46,386||45,188|
|Profit attributable to the Company's shareholders||13,157||11,501||34,471||31,976|
|Basic and diluted earnings per share (in $)||$1.91||$1.75||$5.12||$4.86||
Note: These are financial highlights only. Management's Discussion and Analysis, the audited consolidated financial statements and notes thereto for the year ended December 31, 2011 will be available on the SEDAR website at www.sedar.com and on the website of Lassonde Industries Inc.
"We are satisfied with the progress of the Clement Pappas integration. The results of fiscal 2011 are in line with our expectations despite a difficult business environment resulting from increased raw material costs," said Pierre-Paul Lassonde, Chairman of the Board and Chief Executive Officer of Lassonde Industries Inc.
Fiscal 2011 Financial Results
The Company's sales amounted to $760.3 million in 2011, up $224.1 million (41.8%) from $536.2 million in 2010. The growth in sales was mainly due to the acquisition of Clement Pappas and Company, Inc. (CPC), which contributed $178.6 million (33.3%) of this increase. Excluding CPC sales, the Company's sales were up $45.5 million (8.5%) mainly as a result of an increase in sales of private label products, a higher volume of national brands and lower slotting fees. The positive impact of these increases was mitigated by the estimated $1.8 million unfavourable impact of exchange rates on sales in U.S. dollars.
The Company's operating profit for the year ended December 31, 2011 stood at $60.3 million, up $10.1 million (20.3%) from the previous year. The CPC acquisition had a $7.8 million net favourable impact (including acquisition costs) on the 2011 operating profit. Excluding the impact of the CPC acquisition, the 2011 operating profit would have increased by $2.4 million (4.8%) from 2010. Operating profit before the impact of the CPC acquisition grew slower than sales, reflecting the combined impact of the following factors: (i) significantly higher costs of concentrates expressed in Canadian dollars and (ii) selling and administrative expenses that increased slightly faster than sales.
The Company's financial expenses rose from $4.6 million in 2010 to $13.9 million in 2011. This $9.3 million increase was entirely attributable to the financings related to the acquisition of CPC. "Other (gains) losses" went from a $0.4 million loss in 2010 to a loss of less than $0.1 million in 2011. The 2011 loss resulted primarily from the combined impact of a $0.9 million exchange gain on a bank balance of approximately US$70 million held to carry out the CPC acquisition, a $0.3 million exchange loss from operating activities and a $0.6 million loss from a change in fair value of the forward-starting interest rate swaps.
Profit before income taxes stood at $46.4 million for 2011, up $1.2 million from $45.2 million in 2010. Excluding the combined impact of CPC's profit before taxes, acquisition expenses and related financial costs, profit before income taxes would have amounted to $47.6 million, an increase of $2.4 million (5.4%) from the previous year.
An income tax expense at an effective rate of 25.4% (29.2% in 2010) brought the 2011 profit to $34.6 million, up 8.1% from $32.0 million in 2010. Profit attributable to the Company's shareholders stood at $34.5 million for basic and diluted earnings per share of $5.12 for 2011. Profit attributable to the Company's shareholders reflects the allocation of a portion of CPC's profit to a non-controlling interest. In 2010, profit attributable to the Company's shareholders stood at $32.0 million for basic and diluted earnings per share of $4.86. It should be noted that the profit from CPC together with all of the acquisition-related transactions (including the exchange gain on U.S. cash and cash equivalents) added approximately $0.1 million to the profit attributable to the Company's shareholders.
Fourth Quarter Financial Results
Fourth quarter sales totalled $269.6 million versus $140.6 million last year, a year-over-year increase of $129.0 million (91.7%) that was mainly due to the addition of $114.9 million in sales from CPC. Excluding the impact of the CPC acquisition, the Company's sales were up $14.0 million (10.0%) when compared to the same quarter of 2010. This increase is explained by the combined impact of the following items: (i) an increase in the sales volume of national brands; (ii) an increase in sales of private label products; (iii) price increases resulting from higher input costs and (iv) a $0.1 million favourable exchange impact.
The cost of sales rose from $95.9 million in the fourth quarter of 2010 to $195.9 million in the same quarter of 2011, up $100.0 million (104.4%). Most of the increase is explained by CPC's cost of sales of $87.7 million. Excluding the CPC acquisition, fourth quarter cost of sales stood at $108.2 million, up 12.9% from the same quarter last year. This increase is higher than the 10.0% increase in sales, reflecting the combined impact of: (i) a significant increase in the cost of orange and apple concentrates expressed in Canadian dollars and (ii) a significant increase in the purchase price of PET, which affects the manufacturing cost of plastic bottles.
Selling and administrative expenses (SG&A) went from $27.1 million in the fourth quarter of 2010 to $48.7 million in the fourth quarter of 2011, a 79.4% increase that was essentially due to the addition of CPC's selling and administrative expenses of $17.6 million. CPC's SG&A would have been $16.5 million without the $1.1 million in acquisition-related costs incurred by CPC in the fourth quarter. Excluding CPC's expenses, the Company's selling and administrative expenses stood at $31.1 million, up $4.0 million (14.6%) from the same quarter of 2010. This 14.6% increase is larger than the increase in sales and it is explained by the following factors: (i) higher transportation costs arising from greater volumes; (ii) $0.4 million in acquisition-related costs incurred by the Company's Canadian entities and (iii) a $0.6 million expense related to a plant closure.
The Company's operating profit for the fourth quarter of 2011 stood at $24.9 million, up $7.3 million from operating profit of $17.6 million in the same quarter of 2010. CPC's contribution to operating profit for the fourth quarter of 2011 was $9.6 million. Excluding CPC's operating profit and $0.4 million in costs related to the CPC acquisition, the Company reports $15.7 million in operating profit, down $1.9 million from the operating profit for 2010.
The Company's financial expenses rose from $1.1 million in the fourth quarter of 2010 to $7.2 million in the same period of 2011. This $6.1 million increase is entirely due to financing of the CPC acquisition. "Other (gains) losses" declined from a $0.2 million loss in the fourth quarter of 2010 to a $0.5 million loss in the fourth quarter of 2011. The loss in 2011 stems essentially from a $0.4 million mark-to-market adjustment on forward-starting interest rate swaps. These financial instruments are related to CPC's long-term borrowing of US$230 million.
Profit before income taxes stood at $17.3 million in the fourth quarter of 2011, up $1.0 million from $16.3 million in the fourth quarter of 2010.
Income tax expense went from $4.8 million for the fourth quarter of 2010 to $3.8 million for the fourth quarter of 2011. The effective income tax rate of 21.8% for the fourth quarter of 2011 was lower than the rate of 29.5% for the same period of 2010. This decrease in tax rate reflects end-of-year adjustments attributable to the mix of statutory tax rates.
Profit for the fourth quarter of 2011 stood at $13.5 million, up $2.0 million or 17.2% from profit of $11.5 million recorded for the fourth quarter of 2010.
Profit attributable to the Company's shareholders totalled $13.2 million, resulting in basic and diluted earnings per share of $1.91 for the fourth quarter of 2011. This amount reflects the allocation of a portion of CPC's profit to a non-controlling interest. It compares to $11.5 million in profit attributable to the Company's shareholders for basic and diluted earnings per share of $1.75 for the same period of 2010. It should be noted that the combined favourable impact, after taxes, of all activities related to the CPC acquisition was approximately $2.6 million in the fourth quarter of 2011.
The food industry is currently facing strong headwinds caused by a sustained increase in the price of commodities. Higher costs of apple and orange concentrates have resulted in targeted price increases for products made from such concentrates. The Company has noted some volume declines for certain items subject to price increases, but it is difficult to determine whether these declines in consumption levels are permanent.
Fiscal 2012 will include an entire year of CPC results. To better understand the impact of this acquisition, it is important to note that CPC recorded, for the 12 months ended October 1, 2011, sales of approximately US$400 million. It should also be noted that the Company believes that CPC will record slightly higher sales 2012 compared to the twelve-month period ended October 1, 2011. For its Canadian entities, Lassonde Industries Inc. anticipates slightly higher sales than in 2011.
The Company does not plan on making major changes to its business model in fiscal 2012 as it intends to focus on the integration of the CPC acquisition.
About Lassonde Industries Inc.
Lassonde Industries is a North American leader in the development, manufacture and sale of a wide range of fruit and vegetable juices and drinks marketed under recognized brands such as Everfresh, Fairlee, Flavür, Fruité, Graves, Oasis and Rougemont.
Subsidiaries include Clement Pappas and Company, Inc., the second-largest producer of store brand ready-to-drink fruit juices and drinks in the United States, and a major producer of cranberry juices, drinks and sauces. Headquartered in New Jersey, Clement Pappas operates five production facilities and a cranberry receiving station that enable it to provide its U.S. customers with coast-to-coast service.
Lassonde also markets specialty food products such as fondue broths and sauces, cheese and chocolate fondues, soups, gravies, and sauces for pasta and pizza under recognized trademarks such as Antico and Canton. The Company imports and markets selected wines from various countries of origin, and manufactures apple ciders and wine-based beverages.
Lassonde strives to maintain high standards of quality and to promote
active and healthy living. Some 2,000 employees contribute to the
Company's growth. To learn more, visit www.lassonde.com.
SEDAR registration number: 00002099
Caution Concerning Forward-Looking Statements
This press release contains forward-looking statements that are based on certain assumptions. These forward-looking statements are subject to a number of risks and uncertainties that could cause actual results or events to differ materially from current expectations. Additional factors are discussed in materials filed from time to time with the securities regulatory authorities in Canada. Lassonde Industries Inc. disclaims any intention or obligation to update or revise any forward-looking statements except as required by law.
SOURCE LASSONDE INDUSTRIES INC.