Maple Leaf Foods reports 60% increase in first quarter operating earnings

Apr 27, 2001, 01:00 ET from Maple Leaf Foods Inc.

    TORONTO, April 27 /PRNewswire/ - Maple Leaf Foods Inc. (TSE:MFI) today
 announced its results for the quarter ended March 31, 2001. Mr. Michael H.
 McCain, President and Chief Executive Officer of Maple Leaf Foods said "We are
 pleased to report that substantial progress was made in the financial
 performance of the Company in the first quarter of 2001, as both sales and
 earnings grew significantly over last year."
 
     Financial Results
     Sales for the quarter of $1,054.9 million increased 29% from $818.3
 million last year. Earnings from operations for the quarter of $30.8 million
 increased 60% from $19.2 million last year. (Operating earnings in the first
 quarter last year excluded $18.5 million of capitalized start-up losses at the
 Brandon fresh pork facility.) The Meat Products Group and the Bakery Products
 Group both reported increased earnings while the Agribusiness Products Group
 reported lower earnings. Net earnings of $9.7 million ($0.09 per share) were
 up 76% for the quarter from $5.5 million ($0.05 per share) last year. While
 significantly higher quarter-over-quarter energy costs adversely affected
 earnings, the Company is focused on initiatives to mitigate the effect of
 these higher costs.
 
     Meat Products Group
     Meat Products Group sales of $689.4 million compared to $470.8 million
 last year. The large increase in sales was primarily due to the inclusion of
 sales from the Brandon facility (which were not included in the first quarter
 last year) and from businesses acquired since the first quarter of 2000.
 Operating profit of $10.4 million compared to an operating loss of $1.9
 million last year. The $12.3 million improvement in operating earnings is
 before taking into account $18.5 million of Brandon start-up losses incurred
 last year.
     Maple Leaf Pork reported significantly improved earnings compared to last
 year. Planned operational improvements were achieved at the Brandon facility.
 While the Brandon facility was not profitable for the quarter, we expect it
 will achieve profitability during 2001. The impact of livestock disease
 outbreaks in the European markets over the past several months has been
 largely neutral to the Company; however, the situation is being monitored
 closely. During the quarter, the purchase of the Winnipeg, Manitoba fresh pork
 operations of Schneider Corporation was completed.
     Maple Leaf Consumer Foods and Maple Leaf Foods International both
 recorded significantly improved results over year ago largely due to improved
 margins and strong volumes.
 
     Bakery Products Group
     Bakery Product Group sales of $163.6 million compared to $153.5 million
 last year. Operating profits of $6.2 million were up 100% from $3.1 million
 last year. Canada Bread reported an increase in operating earnings due to
 increased sales, improvements in product mix and ongoing cost reduction
 initiatives. A line of Dempster's whole grain breads was launched nationally
 during the quarter, bringing to market the first leading grain bread made from
 whole grain flour.
     In the United States, Maple Leaf Bakery achieved anticipated earnings,
 representing a significant change from the losses recorded in the first
 quarter last year. With strong sales momentum, improving product mix and
 higher plant utilization rates, Maple Leaf Bakery is expected to contribute
 increasingly to operating earnings throughout the year.
     During the quarter, Canada Bread announced that it had reached an
 agreement to purchase the remaining 75% of Multi-Marques to bring its
 ownership to 100%. The agreement continues to be subject to clearance under
 the Competition Act.
 
     Agribusiness Group
     Agribusiness Group sales of $201.9 million compared to $194.0 million
 last year. Operating earnings of $14.2 million declined from $18.0 million
 last year. The decline was principally due to substantial increases in natural
 gas costs combined with lower commodity prices for Rothsay Rendering, as well
 as a one-time bad debt related to a feed customer.
     Shur-Gain and Landmark Feeds animal nutrition operations continue to
 record strong earnings, benefiting from our Vertical Coordination pork and
 poultry value chain strategy. Elite Swine's results were lower than last year
 due to lower hog prices. Elite Swine continues to aggressively expand the
 Elite Swine system, both in Western Canada and in Ontario.
 
     Other Information
     Other income for the quarter of $3.5 million compared to $3.2 million
 last year
     The Company declared a dividend of $0.04 per share payable on June 29,
 2001 to shareholders of record on June 15, 2001.
     Mr. McCain said: "We have an unwavering commitment to the vision for the
 Company as set out in the Annual Report. Solid operational progress was made
 in the first quarter of 2001 in executing against this vision. Our Leadership
 initiatives are yielding tangible benefits across the Company. Six Sigma is
 being rolled out to additional operating units over the course of 2001. Our
 Vertical Coordination business model and strategy is being fully implemented
 in all operations that are part of the Pork and Poultry Value Chains. We
 believe these initiatives will lead to superior shareholder value creation."
     A live Webcast of the Annual and Special Meeting will be available
 commencing at 11:00 a.m at www.mapleleaf.com/live. A replay of the Webcast
 will be available at the www.mapleleaf.com/webcast shortly after the AGM and
 will remain available through to July 27, 2001.
     A conference call will be held at 3:00 p.m. on April 27, 2001 to review
 Maple Leaf Foods financial results for the first quarter ended March 31, 2001.
 Media are welcome to call in and listen. The call will be hosted by: Michael
 H. McCain, President and Chief Executive Officer; Tom Muir, Chief Financial
 Officer; and Michael Vels, Executive Vice President, Finance.
     To participate in the call, please dial in to 1-800-633-8755. For those
 who are unable to attend at 3:00 p.m. the call will be taped and posted on 1-
 800-558-5253 pass code 18737404.
     For those who do not have Webcast, access to the audio only broadcast of
 the Meeting is available by dialing in to 1-888-413-1922. Post view will be
 available on 1-800-558-5253 enter code No. 18677778 after 1:30 p.m.
 
 
     MAPLE LEAF FOODS INC.
     Consolidated Balance Sheets
 
                                                         As at
     -------------------------------------------------------------------------
     -------------------------------------------------------------------------
     In thousands of Canadian dollars          March 31,          December 31,
                                           2001         2000           2000
     -------------------------------------------------------------------------
                                        (Unaudited)  (Unaudited)    (Audited)
     ASSETS
     Current assets:
       Cash                              $   47,422   $   33,739   $   42,053
       Accounts receivable                  248,488      209,656      246,966
       Inventories                          235,167      193,819      192,335
       Prepaid expenses and other assets     18,488       18,055       13,546
                                        ------------ ------------ ------------
                                            549,565      455,269      494,900
     Investments in associated companies     85,371      120,607       95,141
     Property and equipment                 704,118      655,373      686,659
     Other long-term assets                 172,153      156,065      174,524
     Future tax asset                        15,942       11,229       13,945
     Goodwill                               326,199      301,299      318,746
                                        ------------ ------------ ------------
                                         $1,853,348   $1,699,842   $1,783,915
                                        ------------ ------------ ------------
                                        ------------ ------------ ------------
 
 
     LIABILITIES AND SHAREHOLDERS' EQUITY
     Current liabilities:
       Bank indebtedness                 $   30,574   $   11,581   $   41,852
       Accounts payable and accrued
        charges                             389,089      344,325      429,286
       Income and other taxes payable        14,992       18,593       14,960
       Current portion of long-term debt     13,261        2,353       13,334
                                        ------------ ------------ ------------
                                            447,916      376,852      499,432
     Long-term debt                         823,239      744,176      708,427
     Other long-term liabilities              5,928        5,874        6,001
     Future tax liability                    43,408       63,977       40,689
     Minority interest                       79,246       76,019       78,773
     Shareholders' equity                   453,611      432,944      450,593
                                        ------------ ------------ ------------
                                         $1,853,348   $1,699,842   $1,783,915
                                        ------------ ------------ ------------
                                        ------------ ------------ ------------
 
     The accompanying notes to the consolidated financial statements are an
     integral part of this statement.
 
 
     MAPLE LEAF FOODS INC.
     Consolidated Statements of Earnings
 
 
     -------------------------------------------------------------------------
     -------------------------------------------------------------------------
     In thousands of Canadian dollars,                   Quarter ended
     except per share amounts                               March 31
     (Unaudited)                                     2001              2000
     -------------------------------------------------------------------------
 
     Sales                                       $ 1,054,901      $   818,305
 
     Earnings from operations                         30,834           19,192
     Other income (Note 3)                             3,522            3,243
                                                ------------------------------
     Earnings before interest and taxes               34,356           22,435
     Interest expense                                 16,333           13,161
                                                ------------------------------
     Earnings before income taxes                     18,023            9,274
     Income taxes                                      7,137            3,467
                                                ------------------------------
     Earnings before minority interest                10,886            5,807
     Minority interest                                 1,167              336
                                                ------------------------------
     Net earnings for the period                 $     9,719      $     5,471
                                                ------------------------------
                                                ------------------------------
 
     Earnings per share (basic and
      fully diluted)                             $      0.09      $      0.05
     Dividends per share declared                       0.04             0.04
     Weighted average number of shares
      (millions)                                        95.0             95.0
 
     The accompanying notes to the consolidated financial statements are an
     integral part of this statement.
 
 
 
     MAPLE LEAF FOODS INC.
     Consolidated Statements of Cash Flows
 
     -------------------------------------------------------------------------
     In thousands of Canadian dollars                 Quarter ended March 31,
     (Unaudited)                                        2001             2000
     -------------------------------------------------------------------------
     CASH PROVIDED BY (USED IN):
 
     Operating activities
       Net earnings for the period               $     9,719      $     5,471
       Add (deduct) items not affecting cash:
         Depreciation                                 19,928           16,633
         Amortization                                  2,654            2,488
         Minority interest                             1,167              336
         Future income taxes                             (44)          (1,626)
         Associated companies dividends,
          net of undistributed earnings                9,432           (1,173)
         Loss (gain) on sale of
          property and equipment                          87             (156)
         Other                                        10,966           (5,898)
       Change in non-cash
        operating working capital                    (87,952)        (109,135)
                                                -------------    -------------
                                                     (34,043)         (93,060)
                                                -------------    -------------
     Financing activities
       Dividends paid                                 (3,804)          (3,800)
       Dividends paid to minority interest              (516)            (698)
       Increase in long-term debt, net               106,247          166,061
       Convertible debenture interest paid            (1,370)          (1,370)
       Increase in share capital                         479              518
       Shares repurchased for cancellation            (1,218)               -
       Other                                             296              291
                                                -------------    -------------
                                                     100,114          161,002
                                                -------------    -------------
     Investing activities
       Additions to property and equipment            (7,005)         (35,757)
       Investments                                         -          (28,324)
       Proceeds from sale
        of property and equipment                         79            2,504
       Acquisition of net assets of businesses       (42,836)               -
       Net reduction in other investments                338                -
                                                -------------    -------------
                                                     (49,424)         (61,577)
                                                -------------    -------------
 
     Increase in cash and cash
      equivalents for the period                      16,647            6,365
     Cash and cash equivalents,
      beginning of period                                201           15,793
                                                -------------    -------------
     Cash and cash equivalents,
      end of period                              $    16,848      $    22,158
                                                -------------    -------------
                                                -------------    -------------
 
     The accompanying notes to the consolidated financial statements are an
 integral part of this statement.
 
 
     MAPLE LEAF FOODS INC.
     Consolidated Statements of Retained Earnings Deficit
 
     -------------------------------------------------------------------------
     -------------------------------------------------------------------------
     In thousands of Canadian dollars               Quarter ended March 31
     (Unaudited)                                    2001              2000
     -------------------------------------------------------------------------
 
     Deficit, beginning of period               $(32,889)         $(49,284)
     Net earnings                                  9,719             5,471
     Dividends declared ($0.04 per share;
      2000 - $0.04 per share)                     (3,804)           (3,800)
     Premium on repurchase of share
      capital (note 4)                              (654)                -
     Convertible debenture charge                 (1,131)           (1,127)
                                               -----------       -----------
     Deficit, end of period                     $(28,759)         $(48,740)
                                               -----------       -----------
                                               -----------       -----------
 
     The accompanying notes to the consolidated financial statements are an
     integral part of this statement.
 
 
 
     MAPLE LEAF FOODS INC.
     Segmented Financial Information
 
 
     -------------------------------------------------------------------------
     -------------------------------------------------------------------------
                                                       Quarter ended
     In thousands of Canadian dollars,                   March 31
     (unaudited)                                  2001              2000
     -------------------------------------------------------------------------
 
     Sales
         Meat Products Group                 $   689,402       $   470,814
         Bakery Products Group                   163,613           153,528
         Agribusiness Group                      201,886           193,963
                                            --------------------------------
                                             $ 1,054,901       $   818,305
                                            --------------------------------
                                            --------------------------------
     Earnings (loss) from Operations
         Meat Products Group                 $    10,396       $    (1,917)
         Bakery Products Group                     6,248             3,132
         Agribusiness Group (i)                   14,190            17,977
                                            --------------------------------
                                             $    30,834       $    19,192
                                            --------------------------------
                                            --------------------------------
     Capital Expenditures
         Meat Products Group                 $     1,476       $    29,419
         Bakery Products Group                     2,992             2,664
         Agribusiness Group                        2,537             3,674
                                            --------------------------------
                                             $     7,005       $    35,757
                                            --------------------------------
                                            --------------------------------
     Depreciation and amortization
         Meat Products Group                 $    10,041       $     7,178
         Bakery Products Group                     8,018             7,747
         Agribusiness Group                        4,523             4,196
                                            --------------------------------
                                             $    22,582       $    19,121
                                            --------------------------------
                                            --------------------------------
     Total Assets
         Meat Products Group                 $   810,847       $   578,338
         Bakery Products Group                   555,393           633,182
         Agribusiness Group                      617,164           631,373
         Non-allocated assets                   (130,056)         (143,051)
                                            --------------------------------
                                             $ 1,853,348      $  1,699,842
                                            --------------------------------
                                            --------------------------------
 
     (i) The Agribusiness Group operating earnings include the Company's share
         of after tax earnings from equity accounted hog investments in the
         amount of $0.7 million and $1.0 million for the quarter ended March
         31, 2001 and 2000, respectively.
 
     The accompanying notes to the consolidated financial statements are an
     integral part of this statement.
 
 
     MAPLE LEAF FOODS INC.
 
     Notes to Consolidated Financial Statements
     (Quarters ended March 31, 2001 and March 31, 2000)
     (Tabular amounts in thousands of Canadian dollars, except share amounts)
 
 
     1. Significant Accounting Policies
 
     These consolidated financial statements should be read in conjunction
     with the Company's consolidated financial statements for the year ended
     December 31, 2000 as set out on pages 35 to 47 of the Company's 2000
     Annual Report. These financial statements have been prepared in
     accordance with Canadian generally accepted accounting principles using
     the same accounting policies as were applied in the consolidated
     financial statements for the year ended December 31, 2000.
 
     2.  Acquisitions
 
     In March, 2001 the Company purchased the assets of Schneider
     Corporation's two fresh pork operations in Manitoba. The purchase price
     of $42.8 million relates to acquiring fixed assets and working capital
     and is subject to final closing adjustments.
 
     On January 22, 2001, Canada Bread Company, Limited, a 68% owned
     subsidiary of the Company, reached an agreement to increase its ownership
     in Multi-Marques Inc. from 25% to 100% by acquiring the remaining
     outstanding shares from all of the other shareholders. The purchase will
     represent a net investment of approximately $125 million and will be
     financed with new long term bank debt. Finalization of the transaction
     is dependant on clearance of the transaction under the Competition Act.
 
     3. Other Income                                         Quarter ended
                                                                March 31
                                                           2001        2000
                                                         -------     -------
 
     Earnings from associated companies                  $   255     $   220
     Gain on sale of real estate development properties    2,813       1,378
     Gain on insurance proceeds                                -       1,525
     Gain (loss) on sale of property and equipment           (87)         85
     Other                                                   541          35
 
                                                         -------     -------
                                                          $3,522     $ 3,243
                                                         -------     -------
                                                         -------     -------
 
     4. Shareholders' Equity
 
     During the period, the Company repurchased for cancellation 140,100
     common shares pursuant to a normal course issuer bid at an average price
     of $8.69 per share. The excess of the purchase cost over the book value
     of the shares was charged to retained earnings deficit.
 
 
 
 

SOURCE Maple Leaf Foods Inc.
    TORONTO, April 27 /PRNewswire/ - Maple Leaf Foods Inc. (TSE:MFI) today
 announced its results for the quarter ended March 31, 2001. Mr. Michael H.
 McCain, President and Chief Executive Officer of Maple Leaf Foods said "We are
 pleased to report that substantial progress was made in the financial
 performance of the Company in the first quarter of 2001, as both sales and
 earnings grew significantly over last year."
 
     Financial Results
     Sales for the quarter of $1,054.9 million increased 29% from $818.3
 million last year. Earnings from operations for the quarter of $30.8 million
 increased 60% from $19.2 million last year. (Operating earnings in the first
 quarter last year excluded $18.5 million of capitalized start-up losses at the
 Brandon fresh pork facility.) The Meat Products Group and the Bakery Products
 Group both reported increased earnings while the Agribusiness Products Group
 reported lower earnings. Net earnings of $9.7 million ($0.09 per share) were
 up 76% for the quarter from $5.5 million ($0.05 per share) last year. While
 significantly higher quarter-over-quarter energy costs adversely affected
 earnings, the Company is focused on initiatives to mitigate the effect of
 these higher costs.
 
     Meat Products Group
     Meat Products Group sales of $689.4 million compared to $470.8 million
 last year. The large increase in sales was primarily due to the inclusion of
 sales from the Brandon facility (which were not included in the first quarter
 last year) and from businesses acquired since the first quarter of 2000.
 Operating profit of $10.4 million compared to an operating loss of $1.9
 million last year. The $12.3 million improvement in operating earnings is
 before taking into account $18.5 million of Brandon start-up losses incurred
 last year.
     Maple Leaf Pork reported significantly improved earnings compared to last
 year. Planned operational improvements were achieved at the Brandon facility.
 While the Brandon facility was not profitable for the quarter, we expect it
 will achieve profitability during 2001. The impact of livestock disease
 outbreaks in the European markets over the past several months has been
 largely neutral to the Company; however, the situation is being monitored
 closely. During the quarter, the purchase of the Winnipeg, Manitoba fresh pork
 operations of Schneider Corporation was completed.
     Maple Leaf Consumer Foods and Maple Leaf Foods International both
 recorded significantly improved results over year ago largely due to improved
 margins and strong volumes.
 
     Bakery Products Group
     Bakery Product Group sales of $163.6 million compared to $153.5 million
 last year. Operating profits of $6.2 million were up 100% from $3.1 million
 last year. Canada Bread reported an increase in operating earnings due to
 increased sales, improvements in product mix and ongoing cost reduction
 initiatives. A line of Dempster's whole grain breads was launched nationally
 during the quarter, bringing to market the first leading grain bread made from
 whole grain flour.
     In the United States, Maple Leaf Bakery achieved anticipated earnings,
 representing a significant change from the losses recorded in the first
 quarter last year. With strong sales momentum, improving product mix and
 higher plant utilization rates, Maple Leaf Bakery is expected to contribute
 increasingly to operating earnings throughout the year.
     During the quarter, Canada Bread announced that it had reached an
 agreement to purchase the remaining 75% of Multi-Marques to bring its
 ownership to 100%. The agreement continues to be subject to clearance under
 the Competition Act.
 
     Agribusiness Group
     Agribusiness Group sales of $201.9 million compared to $194.0 million
 last year. Operating earnings of $14.2 million declined from $18.0 million
 last year. The decline was principally due to substantial increases in natural
 gas costs combined with lower commodity prices for Rothsay Rendering, as well
 as a one-time bad debt related to a feed customer.
     Shur-Gain and Landmark Feeds animal nutrition operations continue to
 record strong earnings, benefiting from our Vertical Coordination pork and
 poultry value chain strategy. Elite Swine's results were lower than last year
 due to lower hog prices. Elite Swine continues to aggressively expand the
 Elite Swine system, both in Western Canada and in Ontario.
 
     Other Information
     Other income for the quarter of $3.5 million compared to $3.2 million
 last year
     The Company declared a dividend of $0.04 per share payable on June 29,
 2001 to shareholders of record on June 15, 2001.
     Mr. McCain said: "We have an unwavering commitment to the vision for the
 Company as set out in the Annual Report. Solid operational progress was made
 in the first quarter of 2001 in executing against this vision. Our Leadership
 initiatives are yielding tangible benefits across the Company. Six Sigma is
 being rolled out to additional operating units over the course of 2001. Our
 Vertical Coordination business model and strategy is being fully implemented
 in all operations that are part of the Pork and Poultry Value Chains. We
 believe these initiatives will lead to superior shareholder value creation."
     A live Webcast of the Annual and Special Meeting will be available
 commencing at 11:00 a.m at www.mapleleaf.com/live. A replay of the Webcast
 will be available at the www.mapleleaf.com/webcast shortly after the AGM and
 will remain available through to July 27, 2001.
     A conference call will be held at 3:00 p.m. on April 27, 2001 to review
 Maple Leaf Foods financial results for the first quarter ended March 31, 2001.
 Media are welcome to call in and listen. The call will be hosted by: Michael
 H. McCain, President and Chief Executive Officer; Tom Muir, Chief Financial
 Officer; and Michael Vels, Executive Vice President, Finance.
     To participate in the call, please dial in to 1-800-633-8755. For those
 who are unable to attend at 3:00 p.m. the call will be taped and posted on 1-
 800-558-5253 pass code 18737404.
     For those who do not have Webcast, access to the audio only broadcast of
 the Meeting is available by dialing in to 1-888-413-1922. Post view will be
 available on 1-800-558-5253 enter code No. 18677778 after 1:30 p.m.
 
 
     MAPLE LEAF FOODS INC.
     Consolidated Balance Sheets
 
                                                         As at
     -------------------------------------------------------------------------
     -------------------------------------------------------------------------
     In thousands of Canadian dollars          March 31,          December 31,
                                           2001         2000           2000
     -------------------------------------------------------------------------
                                        (Unaudited)  (Unaudited)    (Audited)
     ASSETS
     Current assets:
       Cash                              $   47,422   $   33,739   $   42,053
       Accounts receivable                  248,488      209,656      246,966
       Inventories                          235,167      193,819      192,335
       Prepaid expenses and other assets     18,488       18,055       13,546
                                        ------------ ------------ ------------
                                            549,565      455,269      494,900
     Investments in associated companies     85,371      120,607       95,141
     Property and equipment                 704,118      655,373      686,659
     Other long-term assets                 172,153      156,065      174,524
     Future tax asset                        15,942       11,229       13,945
     Goodwill                               326,199      301,299      318,746
                                        ------------ ------------ ------------
                                         $1,853,348   $1,699,842   $1,783,915
                                        ------------ ------------ ------------
                                        ------------ ------------ ------------
 
 
     LIABILITIES AND SHAREHOLDERS' EQUITY
     Current liabilities:
       Bank indebtedness                 $   30,574   $   11,581   $   41,852
       Accounts payable and accrued
        charges                             389,089      344,325      429,286
       Income and other taxes payable        14,992       18,593       14,960
       Current portion of long-term debt     13,261        2,353       13,334
                                        ------------ ------------ ------------
                                            447,916      376,852      499,432
     Long-term debt                         823,239      744,176      708,427
     Other long-term liabilities              5,928        5,874        6,001
     Future tax liability                    43,408       63,977       40,689
     Minority interest                       79,246       76,019       78,773
     Shareholders' equity                   453,611      432,944      450,593
                                        ------------ ------------ ------------
                                         $1,853,348   $1,699,842   $1,783,915
                                        ------------ ------------ ------------
                                        ------------ ------------ ------------
 
     The accompanying notes to the consolidated financial statements are an
     integral part of this statement.
 
 
     MAPLE LEAF FOODS INC.
     Consolidated Statements of Earnings
 
 
     -------------------------------------------------------------------------
     -------------------------------------------------------------------------
     In thousands of Canadian dollars,                   Quarter ended
     except per share amounts                               March 31
     (Unaudited)                                     2001              2000
     -------------------------------------------------------------------------
 
     Sales                                       $ 1,054,901      $   818,305
 
     Earnings from operations                         30,834           19,192
     Other income (Note 3)                             3,522            3,243
                                                ------------------------------
     Earnings before interest and taxes               34,356           22,435
     Interest expense                                 16,333           13,161
                                                ------------------------------
     Earnings before income taxes                     18,023            9,274
     Income taxes                                      7,137            3,467
                                                ------------------------------
     Earnings before minority interest                10,886            5,807
     Minority interest                                 1,167              336
                                                ------------------------------
     Net earnings for the period                 $     9,719      $     5,471
                                                ------------------------------
                                                ------------------------------
 
     Earnings per share (basic and
      fully diluted)                             $      0.09      $      0.05
     Dividends per share declared                       0.04             0.04
     Weighted average number of shares
      (millions)                                        95.0             95.0
 
     The accompanying notes to the consolidated financial statements are an
     integral part of this statement.
 
 
 
     MAPLE LEAF FOODS INC.
     Consolidated Statements of Cash Flows
 
     -------------------------------------------------------------------------
     In thousands of Canadian dollars                 Quarter ended March 31,
     (Unaudited)                                        2001             2000
     -------------------------------------------------------------------------
     CASH PROVIDED BY (USED IN):
 
     Operating activities
       Net earnings for the period               $     9,719      $     5,471
       Add (deduct) items not affecting cash:
         Depreciation                                 19,928           16,633
         Amortization                                  2,654            2,488
         Minority interest                             1,167              336
         Future income taxes                             (44)          (1,626)
         Associated companies dividends,
          net of undistributed earnings                9,432           (1,173)
         Loss (gain) on sale of
          property and equipment                          87             (156)
         Other                                        10,966           (5,898)
       Change in non-cash
        operating working capital                    (87,952)        (109,135)
                                                -------------    -------------
                                                     (34,043)         (93,060)
                                                -------------    -------------
     Financing activities
       Dividends paid                                 (3,804)          (3,800)
       Dividends paid to minority interest              (516)            (698)
       Increase in long-term debt, net               106,247          166,061
       Convertible debenture interest paid            (1,370)          (1,370)
       Increase in share capital                         479              518
       Shares repurchased for cancellation            (1,218)               -
       Other                                             296              291
                                                -------------    -------------
                                                     100,114          161,002
                                                -------------    -------------
     Investing activities
       Additions to property and equipment            (7,005)         (35,757)
       Investments                                         -          (28,324)
       Proceeds from sale
        of property and equipment                         79            2,504
       Acquisition of net assets of businesses       (42,836)               -
       Net reduction in other investments                338                -
                                                -------------    -------------
                                                     (49,424)         (61,577)
                                                -------------    -------------
 
     Increase in cash and cash
      equivalents for the period                      16,647            6,365
     Cash and cash equivalents,
      beginning of period                                201           15,793
                                                -------------    -------------
     Cash and cash equivalents,
      end of period                              $    16,848      $    22,158
                                                -------------    -------------
                                                -------------    -------------
 
     The accompanying notes to the consolidated financial statements are an
 integral part of this statement.
 
 
     MAPLE LEAF FOODS INC.
     Consolidated Statements of Retained Earnings Deficit
 
     -------------------------------------------------------------------------
     -------------------------------------------------------------------------
     In thousands of Canadian dollars               Quarter ended March 31
     (Unaudited)                                    2001              2000
     -------------------------------------------------------------------------
 
     Deficit, beginning of period               $(32,889)         $(49,284)
     Net earnings                                  9,719             5,471
     Dividends declared ($0.04 per share;
      2000 - $0.04 per share)                     (3,804)           (3,800)
     Premium on repurchase of share
      capital (note 4)                              (654)                -
     Convertible debenture charge                 (1,131)           (1,127)
                                               -----------       -----------
     Deficit, end of period                     $(28,759)         $(48,740)
                                               -----------       -----------
                                               -----------       -----------
 
     The accompanying notes to the consolidated financial statements are an
     integral part of this statement.
 
 
 
     MAPLE LEAF FOODS INC.
     Segmented Financial Information
 
 
     -------------------------------------------------------------------------
     -------------------------------------------------------------------------
                                                       Quarter ended
     In thousands of Canadian dollars,                   March 31
     (unaudited)                                  2001              2000
     -------------------------------------------------------------------------
 
     Sales
         Meat Products Group                 $   689,402       $   470,814
         Bakery Products Group                   163,613           153,528
         Agribusiness Group                      201,886           193,963
                                            --------------------------------
                                             $ 1,054,901       $   818,305
                                            --------------------------------
                                            --------------------------------
     Earnings (loss) from Operations
         Meat Products Group                 $    10,396       $    (1,917)
         Bakery Products Group                     6,248             3,132
         Agribusiness Group (i)                   14,190            17,977
                                            --------------------------------
                                             $    30,834       $    19,192
                                            --------------------------------
                                            --------------------------------
     Capital Expenditures
         Meat Products Group                 $     1,476       $    29,419
         Bakery Products Group                     2,992             2,664
         Agribusiness Group                        2,537             3,674
                                            --------------------------------
                                             $     7,005       $    35,757
                                            --------------------------------
                                            --------------------------------
     Depreciation and amortization
         Meat Products Group                 $    10,041       $     7,178
         Bakery Products Group                     8,018             7,747
         Agribusiness Group                        4,523             4,196
                                            --------------------------------
                                             $    22,582       $    19,121
                                            --------------------------------
                                            --------------------------------
     Total Assets
         Meat Products Group                 $   810,847       $   578,338
         Bakery Products Group                   555,393           633,182
         Agribusiness Group                      617,164           631,373
         Non-allocated assets                   (130,056)         (143,051)
                                            --------------------------------
                                             $ 1,853,348      $  1,699,842
                                            --------------------------------
                                            --------------------------------
 
     (i) The Agribusiness Group operating earnings include the Company's share
         of after tax earnings from equity accounted hog investments in the
         amount of $0.7 million and $1.0 million for the quarter ended March
         31, 2001 and 2000, respectively.
 
     The accompanying notes to the consolidated financial statements are an
     integral part of this statement.
 
 
     MAPLE LEAF FOODS INC.
 
     Notes to Consolidated Financial Statements
     (Quarters ended March 31, 2001 and March 31, 2000)
     (Tabular amounts in thousands of Canadian dollars, except share amounts)
 
 
     1. Significant Accounting Policies
 
     These consolidated financial statements should be read in conjunction
     with the Company's consolidated financial statements for the year ended
     December 31, 2000 as set out on pages 35 to 47 of the Company's 2000
     Annual Report. These financial statements have been prepared in
     accordance with Canadian generally accepted accounting principles using
     the same accounting policies as were applied in the consolidated
     financial statements for the year ended December 31, 2000.
 
     2.  Acquisitions
 
     In March, 2001 the Company purchased the assets of Schneider
     Corporation's two fresh pork operations in Manitoba. The purchase price
     of $42.8 million relates to acquiring fixed assets and working capital
     and is subject to final closing adjustments.
 
     On January 22, 2001, Canada Bread Company, Limited, a 68% owned
     subsidiary of the Company, reached an agreement to increase its ownership
     in Multi-Marques Inc. from 25% to 100% by acquiring the remaining
     outstanding shares from all of the other shareholders. The purchase will
     represent a net investment of approximately $125 million and will be
     financed with new long term bank debt. Finalization of the transaction
     is dependant on clearance of the transaction under the Competition Act.
 
     3. Other Income                                         Quarter ended
                                                                March 31
                                                           2001        2000
                                                         -------     -------
 
     Earnings from associated companies                  $   255     $   220
     Gain on sale of real estate development properties    2,813       1,378
     Gain on insurance proceeds                                -       1,525
     Gain (loss) on sale of property and equipment           (87)         85
     Other                                                   541          35
 
                                                         -------     -------
                                                          $3,522     $ 3,243
                                                         -------     -------
                                                         -------     -------
 
     4. Shareholders' Equity
 
     During the period, the Company repurchased for cancellation 140,100
     common shares pursuant to a normal course issuer bid at an average price
     of $8.69 per share. The excess of the purchase cost over the book value
     of the shares was charged to retained earnings deficit.
 
 
 
 SOURCE Maple Leaf Foods Inc.