2014

Maple Leaf Foods Reports Results for Third Quarter 2012

TSX: MFI
www.mapleleaffoods.com

TORONTO, Oct. 31, 2012 /PRNewswire/ - Maple Leaf Foods Inc. (TSX: MFI) today reported its financial results for the third quarter ended September 30, 2012.

  • Adjusted Operating Earnings(1) for the third quarter were $76.3 million compared to $73.3 million last year
  • Net earnings for the third quarter were $32.6 million, compared to $43.0 million in the third quarter last year
  • Adjusted Earnings per Share(2) were $0.29 compared to $0.34 last year ($0.27 excluding a $9.8 million tax adjustment associated with a prior acquisition)

"Our third quarter marked a return to operating profit growth in 2012 as we continue to enhance performance in our base business and execute our value creation strategies," said Michael H. McCain, President and CEO. "We are achieving earnings growth in our consumer facing prepared meats and bakery businesses, and managing higher input costs through responsible pricing. While the challenges of consumer bread demand and pork market conditions continue, we are seeing signs of improvement in both."

(1): Adjusted Operating Earnings, a non-IFRS measure, is defined as earnings from operations before restructuring and other related costs and associated gains, other income (expense) and the impact of the change in fair value of non-designated interest rate swaps, unrealized (gains) losses on commodity futures contracts and the change in fair value of biological assets. 

(2): Adjusted Earnings per Share ("Adjusted EPS"), a non-IFRS measure, is defined as basic earnings per share adjusted for the impact of restructuring and other related costs and associated gains, the impact of the change in fair value of non-designated interest rate swaps, hedge ineffectiveness recognized in earnings, unrealized (gains) losses on commodity futures contracts, and the change in fair value of biological assets, net of tax and non-controlling interest.

Please refer to the section entitled Reconciliation of Non-IFRS Financial Measures at the end of this news release.

Financial Overview

Business Segment Review

Following is a summary of sales by business segment:

                                   
(Unaudited)       Third Quarter     Year-to-Date
($ thousands)          2012         2011        2012        2011
Meat Products Group        $ 761,172     $ 777,194     $ 2,262,680     $ 2,257,647
Agribusiness Group          76,463       67,934       221,303       196,145
Protein Group        $ 837,635     $ 845,128     $ 2,483,983     $ 2,453,792
Bakery Products Group          401,294       417,025       1,176,019       1,194,504
Sales        $ 1,238,929     $ 1,262,153     $ 3,660,002     $ 3,648,296
                                   

The following table summarizes Adjusted Operating Earnings by business segment:

                                       
(Unaudited)       Third Quarter     Year-to-Date
($ thousands)           2012          2011        2012        2011
Meat Products Group        $   28,837     $   20,766     $ 73,139     $ 68,515
Agribusiness Group            17,620         25,440       55,776       67,151
Protein Group        $   46,457     $   46,206     $ 128,915     $ 135,666
Bakery Products Group            30,808         28,094       66,224       70,165
Non-allocated costs in Adjusted
Operating Earnings(i) 
          (934)         (953)       (6,404)       (4,261)
Adjusted Operating Earnings        $   76,331     $   73,347     $ 188,735     $ 201,570
(i)  Non-allocated costs comprise expenses not separately identifiable to business segment groups, and do not form part of the measures used by the Company when assessing the segments' operating results.

Protein Group

Sales for the Protein Group, which includes the Company's Meat Products Group and Agribusiness Group, declined 0.9% to $837.6 million in the third quarter of 2012, from $845.1 million for the prior year period. Adjusted Operating Earnings were $46.5 million compared to $46.2 million for the third quarter last year. Results for the Company's Meat Products Group and Agribusiness Group should be viewed in combination due to intercompany transactions and correlated factors within these operations.

Meat Products Group
Includes value-added prepared meats, lunch kits; and fresh pork, poultry and turkey products sold to retail, foodservice, industrial and convenience channels. Includes leading Canadian brands such as Maple Leaf ®, Schneiders ® and many leading sub-brands.

Meat Products Group sales for the third quarter declined 2.1% to $761.2 million from $777.2 million for the third quarter last year. After adjusting for the impact of a weaker Canadian dollar, which increased the sales value of pork exports, sales declined 2.9%, primarily due to lower foodservice sales in the prepared meats business.

Adjusted Operating Earnings for the third quarter increased 38.9% to $28.8 million compared to $20.8 million last year, driven by strong earnings growth in the prepared meats and fresh poultry businesses.

Branded sales growth and innovation, as well as operating cost reductions drove margin expansion in the prepared meats business.  The Company's network transformation initiatives also contributed to results, although earnings growth was partly offset by lower sales volumes.  The Company continues to manage cost inflation through price increases as required.

Sales of higher value products under the Maple Leaf Prime chicken brand and improvements in industry poultry processor margins drove higher earnings in the fresh poultry operations.

Earnings in primary pork processing were consistent with last year as higher pricing and margins in international exports were offset by weaker industry margins in North America

Agribusiness Group
Consists of Canadian hog production, animal by-product recycling operations including bio-diesel manufacturing and distribution.

Sales in the Agribusiness Group increased 12.6% to $76.5 million for the third quarter compared to $67.9 million last year, reflecting higher toll feed sales.

Adjusted Operating Earnings for the third quarter of 2012 decreased 30.7% to $17.6 million compared to $25.4 million last year. Hog production earnings were lower due to a combination of higher feed costs and lower market prices for hogs.  Lower earnings in the by-products recycling operations compared to historically strong levels last year as prices paid for raw materials and operating costs increased.

Bakery Products Group
Includes fresh and frozen bakery products, including breads, rolls, bagels, specialty and artisan breads, sweet goods, and fresh pasta and sauces sold to retail, foodservice and convenience channels. It includes national brands such as Dempster's®, Tenderflake®, Olivieri® and New York Bakery CoTM, and many leading regional brands.

Bakery Products Group sales for the third quarter decreased 3.8% to $401.3 million, compared to $417.0 million last year. After adjusting for the closure of a bakery in the U.K. and currency translation on sales in the U.S. and U.K., sales declined 2.3%, primarily related to lower volume in the fresh bakery business.

Adjusted Operating Earnings for the third quarter of 2012 increased 9.7% to $30.8 million compared to $28.1 million last year, driven by higher earnings in the fresh bakery and North American frozen bakery operations, partly offset by lower earnings in the fresh pasta business.  Earnings in the U.K. bakery business were consistent with last year.  Results benefited from positive hedging activities for raw materials during the quarter, although the Company continues to experience inflationary costs and projected increases in flour and dairy costs that will require offsetting price increases. Fresh bakery volumes were consistent with the second quarter of 2012, but lower than last year, reflecting industry volume declines. Despite the lower volumes, margins expanded in the fresh bakery business, principally through cost management. The North American frozen bakery business benefited from higher pricing and increased sales volumes compared to last year. In the U.K., improvements from cost reduction strategies, including the closure of a bakery in the first quarter, were offset by lower volumes and costs of commissioning new croissant capacity.

Other Matters

On October 30, 2012, the Company declared a dividend of $0.04 per share payable December 31, 2012 to shareholders of record at the close of business on December 7, 2012. Unless indicated otherwise by the Company in writing on or before the time the dividend is paid, the dividend will be considered an Eligible Dividend for the purposes of the "Enhanced Dividend Tax Credit System".

An investor presentation related to the Company's third quarter financial results is available at www.mapleleaffoods.com and can be found under Investor Relations on the Quarterly Results page. A conference call will be held at 2:30 p.m. EDT on October 31, 2012 to review Maple Leaf Foods' third quarter financial results. To participate in the call, please dial 416-340-8018 or 866-223-7781. For those unable to participate, playback will be made available an hour after the event at 905-694-9451 / 800-408-3053 (Passcode 9670637).

A webcast presentation of the third quarter financial results will also be available at http://www.media-server.com/m/p/joy9ce24

The Company's full financial statements and related Management's Discussion and Analysis are available for download on the Company's website.

Reconciliation of Non-IFRS Financial Measures

The Company uses the following non-IFRS measures: Adjusted Operating Earnings and Adjusted EPS.  Management believes that these non-IFRS measures provide useful information to both Management and investors in measuring the financial performance of the Company for the reasons outlined below.  These measures do not have a standardized meaning prescribed by IFRS and therefore they may not be comparable to similarly titled measures presented by other publicly traded companies and should not be construed as an alternative to other financial measures determined in accordance with IFRS.

Adjusted Operating Earnings

The following tables reconcile earnings from operations before restructuring and other related costs and associated gains, other income (expense) and the impact of the change in fair value of non-designated interest rate swaps, unrealized (gains) losses on commodity futures contracts and the change in fair value of biological assets to net earnings as reported under IFRS in the unaudited earnings for the three and nine months ended, as indicated below.  Management believes that this basis is the most appropriate on which to evaluate operating results, as restructuring and other related costs, other income (expense) and the change in fair value of non-designated interest rate swaps, unrealized (gains) losses on commodity futures contracts and the change in fair value of biological assets are not representative of operational results during the period.

                                         
      Three months ended September 30, 2012
         Meat             Bakery               
(Unaudited)       Products     Agribusiness       Products     Unallocated        
($ thousands)       Group     Group       Group     costs     Consolidated
Net earnings                                     $ 32,581
Income taxes                                       12,806
Earnings from operations before income taxes                                     $ 45,387
Interest expense                                       18,442
Change in the fair value of non-designated                                        
  interest rate swaps                                       (2,247)
Other income       (829)       (66)       13       (667)       (1,549)
Restructuring and other related costs       4,414       -       170       -       4,584
Earnings from Operations     $ 28,837     $ 17,620     $ 30,808     $ (12,648)     $ 64,617
Decrease in fair value of biological assets       -       -       -       13,038       13,038
Unrealized gains on commodity futures contracts         -       -       -       (1,324)       (1,324)
Adjusted Operating Earnings     $ 28,837     $ 17,620     $ 30,808     $ (934)     $ 76,331
                                         
                                         
      Three months ended September 30, 2011
         Meat             Bakery              
(Unaudited)       Products     Agribusiness       Products     Unallocated        
($ thousands)       Group     Group       Group     costs     Consolidated
Net earnings                                     $ 43,007
Income taxes                                       4,192
Earnings from operations before income taxes                                     $ 47,199
Interest expense                                       17,927
Change in the fair value of non-designated                                        
  interest rate swaps                                       10,423
Other income       (4,059)       (680)       (286)       (123)       (5,148)
Restructuring and other related costs       2,966       -       1,598       318       4,882
Earnings from Operations     $ 20,766     $ 25,440     $ 28,094     $ 983     $ 75,283
Increase in fair value of biological assets       -       -       -       (3,227)       (3,227)
Unrealized losses on commodity futures contracts       -       -       -       1,291       1,291
Adjusted Operating Earnings     $ 20,766     $ 25,440     $ 28,094     $ (953)     $ 73,347
                                         
                                         
      Nine months ended September 30, 2012
         Meat             Bakery              
(Unaudited)       Products     Agribusiness       Products     Unallocated        
($ thousands)       Group     Group       Group     costs     Consolidated
Net earnings                                     $ 65,870
Income taxes                                       27,809
Earnings from operations before income taxes                                     $ 93,679
Interest expense                                       54,498
Change in the fair value of non-designated                                        
  interest rate swaps                                       (7,180)
Other income       (2,996)       (589)       (1,358)       93       (4,850)
Restructuring and other related costs       27,456       -       7,259       -       34,715
Earnings from Operations     $ 73,139     $ 55,776     $ 66,224     $ (24,277)     $ 170,862
Decrease in fair value of biological assets       -       -       -       14,139       14,139
Unrealized losses on commodity futures contracts       -       -       -       3,734       3,734
Adjusted Operating Earnings     $ 73,139     $ 55,776     $ 66,224     $ (6,404)     $ 188,735
                                         
                                         
      Nine months ended September 30, 2011
         Meat             Bakery              
(Unaudited)       Products     Agribusiness       Products     Unallocated        
($ thousands)       Group     Group       Group     costs     Consolidated
Net earnings                                     $ 78,136
Income taxes                                       17,059
Earnings from operations before income taxes                                     $ 95,195
Interest expense                                       52,952
Change in the fair value of non-designated                                        
  interest rate swaps                                       11,382
Other income       (4,088)       (743)       (364)       (32)       (5,227)
Restructuring and other related costs       12,296       -       34,195       1,111       47,602
Earnings from Operations     $ 68,515     $ 67,151     $ 70,165     $ (3,927)     $ 201,904
Decrease in fair value of biological assets       -       -       -       1,094       1,094
Unrealized gains on commodity futures contracts         -       -       -       (1,428)       (1,428)
Adjusted Operating Earnings     $ 68,515     $ 67,151     $ 70,165     $ (4,261)     $ 201,570

Adjusted Earnings per Share

The following table reconciles Adjusted Earnings per Share to basic earnings per share as reported under IFRS as indicated below.  Management believes this basis is the most appropriate on which to evaluate financial results as restructuring and other related costs and associated gains, the changes in the fair value of non-designated interest rate swaps, hedge ineffectiveness recognized in earnings, unrealized (gains) losses on commodity futures contracts and the change in fair value of biological assets net of tax and non-controlling interests are not representative of operational results.

                                         
      Three months ended     Nine months ended
(Unaudited)     September 30,     September 30,
($ per share)         2012         2011         2012         2011
Basic earnings per share     $   0.22     $   0.29     $   0.44     $   0.53
Restructuring and other related costs(i)         0.02         0.03         0.19         0.24
Gains associated with restructuring and other related activities(i)         -         (0.02)         -         (0.02)
Change in the fair value of non-designated interest rate swaps(ii)          (0.01)         0.05         (0.04)         0.06
Change in the fair value of unrealized (gains) losses on commodity                                         
  futures contracts(ii)         (0.01)         0.01         0.02         (0.01)
Change in the fair value of biological assets(ii)         0.07         (0.02)         0.07         0.01
Adjusted Earnings per Share(iii)     $   0.29     $   0.34     $   0.67     $   0.81

(i)    Includes per share impact of restructuring and other related costs and associated gains, net of tax and
non-controlling interest.
(ii)    Includes per share impact of the change in fair value of non-designated interest rate swaps, hedge ineffectiveness
recognized in earnings, unrealized (gains) losses on commodity futures contracts and the change in fair value of
biological assets, net of tax.
(iii)    May not add due to rounding.

Forward-Looking Statements

This document contains, and the Company's oral and written public communications often contain, "forward-looking information" within the meaning of applicable securities law.  These statements are based on current expectations, estimates, forecasts and projections about the industries in which the Company operates and beliefs and assumptions made by the Management of the Company. Such statements include, but are not limited to, statements with respect to objectives and goals, as well as statements with respect to beliefs, plans, objectives, expectations, anticipations, estimates and intentions. Specific forward-looking information in this document includes, but is not limited to, statements with respect to the anticipated benefits, timing, actions, costs and investments associated with the Company's Value Creation Plan, expectations regarding improving business trends, expectations regarding actions to reduce costs, restore and/or promote volumes and/or increase prices, improve efficiencies, expected duplicative overhead costs incurred due to the concurrent operation of the new Hamilton fresh bakery and existing bakeries, the expected use of cash balances, source of funds for ongoing business requirements, capital investments and debt repayment, and expectations regarding sufficiency of the allowance for uncollectible accounts. Words such as "expect", "anticipate", "intend", "attempt", "may", "will", "plan", "believe", "seek", "estimate", and variations of such words and similar expressions are intended to identify such forward-looking information. These statements are not guarantees of future performance and involve assumptions and risks and uncertainties that are difficult to predict.

In addition, these statements and expectations concerning the performance of the Company's business in general are based on a number of factors and assumptions including, but not limited to: the condition of the Canadian, U.S., U.K. and Japanese economies; the rate of exchange of the Canadian dollar to the U.S. dollar, U.K. British pound and the Japanese yen;  the availability and prices of raw materials, energy and supplies; product pricing; the availability of insurance; the competitive environment and related market conditions; improvement of operating efficiencies whether as a result of the Value Creation Plan or otherwise; continued access to capital; the cost of compliance with environmental and health standards; no adverse results from ongoing litigation; no unexpected actions of domestic and foreign governments; and the general assumption that none of the risks identified below or elsewhere in this document will materialize.  All of these assumptions have been derived from information currently available to the Company including information obtained by the Company from third-party sources. These assumptions may prove to be incorrect in whole or in part.  In addition, actual results may differ materially from those expressed, implied or forecasted in such forward-looking information, which reflect the Company's expectations only as of the date hereof.

Factors that could cause actual results or outcomes to differ materially from the results expressed, implied or forecasted by forward-looking information is discussed more fully in the Company's Annual Management's Discussion and Analysis for the period ended December 31, 2011 including the section entitled "Risk Factors", that are updated each quarter in the Management's Discussion and Analysis, and are available on SEDAR at www.sedar.com. The Company does not intend to, and the Company disclaims any obligation to, update any forward-looking information, whether written or oral, or whether as a result of new information, future events or otherwise except as required by law.

Maple Leaf Foods Inc. ("Maple Leaf" or the "Company") is a leading Canadian value-added meat, meals and bakery company committed to delivering quality food products to consumers around the world. Headquartered in Toronto, Canada, the Company employs approximately 19,500 people at its operations across Canada and in the United States, Europe and Asia.

Condensed Consolidated Interim Financial Statements
(Expressed in Canadian dollars)
(Unaudited)

MAPLE LEAF FOODS INC.

Three and nine months ended September 30, 2012 and 2011

Consolidated Balance Sheets

            As at September 30,     As at September 30,     As at December 31,
(In thousands of Canadian dollars)             2012       2011       2011
                      (Unaudited)       (Unaudited)        
ASSETS                                
Current assets                                
  Cash and cash equivalents           $ 87,300     $ -     $ -
  Accounts receivable             85,508       99,375       133,504
  Notes receivable             138,742       147,322       98,545
  Inventories               313,485       302,864       293,231
  Biological assets             40,123       49,154       49,265
  Income and other taxes recoverable             43,039       47,530       43,789
  Prepaid expenses and other assets             19,419       16,855       24,688
  Assets held for sale             23,259       -       -
                    $ 750,875     $ 663,100     $ 643,022
  Property and equipment             1,122,881       1,059,553       1,067,246
  Investment property             13,740       11,584       11,232
  Employee benefits             101,840       128,613       133,942
  Other long-term assets              11,930       12,751       11,926
  Deferred tax asset             146,484       138,204       127,456
  Goodwill               752,590       754,935       753,739
  Intangible assets             207,264       186,070       191,896
  Total assets             $ 3,107,604     $ 2,954,810     $ 2,940,459
                               
LIABILITIES AND EQUITY                              
Current liabilities                              
  Bank indebtedness           $ 31,279     $ 17,729     $ 36,404
  Accounts payable and accruals             459,491       488,399       482,059
  Provisions               27,382       43,065       44,255
  Current portion of long-term debt             6,068       221,792       5,618
  Other current liabilities             17,624       73,153       20,409
                    $ 541,844     $ 844,138     $ 588,745
  Long-term debt               1,119,045       715,986       941,956
  Employee benefits             429,568       364,555       350,853
  Provisions               28,714       25,388       28,936
  Other long-term liabilities             81,784       77,504       88,153
  Deferred tax liability             8,617       26,444       11,703
  Total liabilities            $ 2,209,572     $ 2,054,015     $ 2,010,346
Shareholders' equity                              
Share capital             $ 902,810     902,810     $ 902,810
Retained deficit               (122,156)       (82,034)       (78,674)
Contributed surplus             80,956       71,820       64,327
Accumulated other comprehensive loss             (13,942)       (18,332)       (17,042)
Treasury stock               (15,370)       (38,915)       (6,347)
Total shareholders' equity            $ 832,298     $ 835,349     $ 865,074
Non-controlling interest             65,734       65,446       65,039
Total equity             $ 898,032     $ 900,795     $ 930,113
Total liabilities and equity           $ 3,107,604     $ 2,954,810     $ 2,940,459
                               
                               

Consolidated Statements of Earnings

(In thousands of Canadian dollars, except share amounts)       Three months ended September 30,     Nine months ended September 30,
(Unaudited)         2012       2011       2012       2011
                                   
Sales         $ 1,238,929     $ 1,262,153     $ 3,660,002     $ 3,648,296
Cost of goods sold         1,052,334       1,062,392       3,102,720       3,067,773
Gross margin       $ 186,595     $ 199,761     $ 557,282     $ 580,523
Selling, general and administrative expenses         121,978       124,478       386,420       378,619
Earnings before the following:       $ 64,617     $ 75,283     $ 170,862     $ 201,904
Restructuring and other related costs          (4,584)       (4,882)       (34,715)       (47,602)
Change in fair value of non-designated                                   
  interest rate swaps          2,247       (10,423)       7,180       (11,382)
Other income          1,549       5,148       4,850       5,227
Earnings before interest and income taxes       $ 63,829     $ 65,126     $ 148,177     $ 148,147
Interest expense          18,442       17,927       54,498       52,952
Earnings before income taxes       $ 45,387     $ 47,199     $ 93,679     $ 95,195
Income taxes         12,806       4,192       27,809       17,059
Net earnings        $ 32,581     $ 43,007     $ 65,870     $ 78,136
Attributed to:                                  
Common shareholders       $ 30,159     $ 39,943     $ 60,687     $ 73,708
Non-controlling interest         2,422       3,064       5,183       4,428
              $ 32,581     $ 43,007     $ 65,870     $ 78,136
Earnings per share attributable to                                  
  common shareholders                                   
Basic earnings per share       $ 0.22     $ 0.29     $ 0.44     $ 0.53
Diluted earnings per share       $ 0.21     $ 0.28     $ 0.42     $ 0.52
Weighted average number of shares (millions)         139.5       138.0       139.5       138.8
                                   
                                   

Consolidated Statements of Comprehensive Loss

(In thousands of Canadian dollars)           Three months ended September 30,     Nine months ended September 30,
(Unaudited)               2012       2011       2012       2011
                                               
Net earnings           $ 32,581     $ 43,007     $ 65,870     $ 78,136
Other comprehensive (loss) income                                      
  Change in accumulated foreign currency                                       
    translation adjustment             (3,985)       10,991       (3,702)       10,085
  Change in unrealized gains and losses                                       
    on cash flow hedges             2,069       (7,056)       6,312       (4,872)
  Change in actuarial gains and losses             (50,301)       (134,959)       (88,466)       (134,959)
            $ (52,217)     $ (131,024)     $ (85,856)     $ (129,746)
Comprehensive loss           $ (19,636)     $ (88,017)     $ (19,986)     $ (51,610)
Attributed to:                                        
Common shareholders           $ (21,079)     $ (91,276)     $ (23,792)     $ (55,598)
Non-controlling interest             1,443       3,259       3,806       3,988
                                       
                                       

Consolidated Statements of Changes in Total Equity

        Attributable to Common Shareholders                
                                Total                        
                                accumulated                        
                                other             Non-        
(In thousands of Canadian dollars)         Share       Retained     Contributed     comprehensive       Treasury     controlling       Total
(Unaudited)         capital       deficit     surplus     loss       stock     interest       equity
                                                                     
Balance at                                                             
  December 31, 2011       $ 902,810     $ (78,674)     $ 64,327     $ (17,042)     $ (6,347)     $ 65,039     $ 930,113
    Net earnings           -       60,687       -       -       -       5,183       65,870
    Other comprehensive                                                          
      (loss) income           -       (87,579)       -       3,100       -       (1,377)       (85,856)
    Dividends declared                                                          
      ($0.12 per share)         -       (16,590)       -       -       -       (3,202)       (19,792)
    Stock-based compensation                                                          
      expense           -       -       16,229       -       -       -       16,229
    Other           -       -       400       -       -       91       491
    Re-purchase of treasury stock         -       -       -       -       (9,023)       -       (9,023)
Balance at September 30, 2012       $ 902,810     $ (122,156)     $ 80,956      $ (13,942)     $ (15,370)     $ 65,734     $ 898,032
                                                           
                                                                   
                                                                   
        Attributable to Common Shareholders                
                                Total                        
                                accumulated                        
                                other             Non-        
(In thousands of Canadian dollars)         Share       Retained     Contributed     comprehensive       Treasury     controlling       Total
(Unaudited)         capital       deficit     surplus     loss       stock     interest       equity
                                                                     
Balance at                                                            
  December 31, 2010       $ 902,810     $ (5,267)     $ 59,002     $ (22,585)     $ (10,078)     $ 62,890     $ 986,772
    Net earnings           -       73,708       -       -       -       4,428       78,136
    Other comprehensive                                                          
      income (loss)           -       (133,559)       -       4,253       -       (440)       (129,746)
    Dividends declared                                                          
      ($0.12 per share)         -       (16,916)       -       -       -       (1,322)       (18,238)
    Stock-based compensation                                                          
      expense           -       -       12,818       -       -       -       12,818
    Decrease in non-controlling interest         -       -       -       -       -       (110)       (110)
    Re-purchase of treasury stock         -       -       -       -       (28,837)       -       (28,837)
Balance at September 30, 2011       $ 902,810     $ (82,034)     $ 71,820     $ (18,332)     $ (38,915)     $ 65,446     $ 900,795
                                                           
                                                           

Consolidated Statements of Cash Flows

(In thousands of Canadian dollars)         Three months ended September 30,     Nine months ended September 30,
(Unaudited)             2012       2011       2012       2011
                                             
CASH PROVIDED BY (USED IN):                                    
Operating activities                                    
  Net earnings          $ 32,581     $ 43,007     $ 65,870     $ 78,136
  Add (deduct) items not affecting cash:                                    
    Change in fair value of biological assets           13,038       (3,227)       14,139       1,094
    Depreciation and amortization           33,077       32,356       97,646       97,622
    Stock-based compensation           5,490       4,270       16,229       12,818
    Deferred income taxes           2,158       8,677       6,022       11,946
    Income tax current           10,648       (4,485)       21,787       5,113
    Interest expense           18,442       17,927       54,498       52,952
    Gain on sale of property and equipment           (8)       (3,884)       (421)       (3,766)
    Gain on disposal of assets held for sale           (139)       -       (459)       -
    Change in fair value of non-designated                                     
      interest rate swaps           (2,247)       10,423       (7,180)       11,382
    Change in fair value of                                    
      derivative financial instruments           (2,320)       4,754       3,303       2,832
  (Increase) decrease in pension asset           (3,806)       2,011       (8,281)       3,819
  Net income taxes paid           (6,993)       (505)       (16,512)       (18,799)
  Interest paid             (18,045)       (12,740)       (53,423)       (36,588)
  Change in provision for restructuring and                                     
    other related costs           (525)       (7,429)       6,059       20,638
  Other             (5,567)       (1,890)       (7,389)       (3,714)
  Change in non-cash operating working capital           (4,661)       39,844       (40,233)       (69,530)
Cash provided by operating activities         $ 71,123     $ 129,109     $ 151,655     $ 165,955
                                           
Financing activities                                    
  Dividends paid         $ (5,617)     $ (5,600)     $ (16,590)     $ (16,916)
  Dividends paid to non-controlling interest           (1,271)       (564)       (2,440)       (1,322)
  Net increase (decrease) in long-term debt           9,136       (55,724)       189,136       32,041
  Increase in financing costs           -       (272)       -       (6,396)
  Purchase of treasury stock           (9,023)       (28,837)       (9,023)       (28,837)
  Other             (484)       (396)       (1,267)       (1,145)
Cash provided by (used in) financing activities         $ (7,259)     $ (91,393)     $ 159,816     $ (22,575)
                                             
Investing activities                                    
  Additions to long term-assets         $ (78,172)     $ (52,328)     $ (197,611)     $ (160,583)
  Capitalization of interest expense           (1,609)       (1,154)       (4,130)       (4,491)
  Acquisition of business           -       -       (31,130)       -
  Proceeds from sale of long-term assets           1,102       11,068       5,851       18,743
  Proceeds from disposal of assets held for sale           2,417       -       7,974       -
  Other             (3)       1,032       -       1,080
Cash used in investing activities         $ (76,265)     $ (41,382)     $ (219,046)     $ (145,251)
                                             
Increase (decrease) in cash and cash equivalents         $ (12,401)     $ (3,666)     $ 92,425     $ (1,871)
Net cash and cash equivalents, beginning of period           68,422       (14,063)       (36,404)       (15,858)
Net cash and cash equivalents, end of period         $ 56,021     $ (17,729)     $ 56,021     $ (17,729)
                                           
Net cash and cash equivalents is comprised of:                                    
Cash and cash equivalents         $ 87,300     $ -     $ 87,300     $ -
Bank indebtedness           (31,279)       (17,729)       (31,279)       (17,729)
Net cash and cash equivalents, end of period         $ 56,021     $ (17,729)     $ 56,021     $ (17,729)
                                     
                                     

Segmented Financial Info

            Three months ended September 30,     Nine months ended September 30,
                    2012       2011       2012       2011
                                             
Sales                                        
  Meat Products Group           $ 761,172     $ 777,194     $ 2,262,680     $ 2,257,647
  Agribusiness Group             76,463       67,934       221,303       196,145
  Bakery Products Group             401,294       417,025       1,176,019       1,194,504
                  $ 1,238,929     $ 1,262,153     $ 3,660,002     $ 3,648,296
                                             
Earnings before restructuring and other                                      
   related costs and other income                                      
  Meat Products Group           $ 28,837     $ 20,766     $ 73,139     $ 68,515
  Agribusiness Group             17,620       25,440       55,776       67,151
  Bakery Products Group             30,808       28,094       66,224       70,165
  Non-allocated costs             (12,648)       983       (24,277)       (3,927)
                  $ 64,617     $ 75,283     $ 170,862     $ 201,904
                                             
Capital expenditures                                      
  Meat Products Group           $ 63,582     $ 19,296     $ 148,712     $ 51,946
  Agribusiness Group             3,242       3,546       8,937       8,708
  Bakery Products Group             11,348       29,486       39,962       99,929
                  $ 78,172     $ 52,328     $ 197,611     $ 160,583
                                             
Depreciation and amortization                                      
  Meat Products Group           $ 14,912     $ 15,784     $ 44,829     $ 47,416
  Agribusiness Group             4,023       3,805       11,949       11,653
  Bakery Products Group             14,142       12,767       40,868       38,553
                  $ 33,077     $ 32,356     $ 97,646     $ 97,622

 

              As at September 30,     As at September 30,       As at December 31,
              2012     2011       2011
                                         
Total assets                                    
  Meat Products Group             $ 1,554,470     $ 1,468,653       $ 1,465,576
  Agribusiness Group               213,808       215,731         223,013
  Bakery Products Group               999,391       953,572         937,292
  Non-allocated assets               339,935       316,854         314,578
              $ 3,107,604     $ 2,954,810       $ 2,940,459
                                         
Goodwill                                    
  Meat Products Group             $ 442,692     $ 442,336       $ 442,336
  Agribusiness Group               13,845       13,845         13,845
  Bakery Products Group               296,053       298,754         297,558
              $ 752,590     $ 754,935       $ 753,739

 

 

 

 

 

 

 

SOURCE Maple Leaf Foods Inc.



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