Maple Leaf Foods Reports Results for Fourth Quarter 2013
TSX: MFI
www.mapleleaffoods.com
-
Adjusted Operating Earnings(1)(2)(3) for the fourth quarter was a loss of
$21.7 million compared to Adjusted Operating Earnings of$70.0 million last year. Year-to-date Adjusted Operating Earnings were a loss of$12.3 million compared to Adjusted Operating Earnings of$172.0 million last year -
Adjusted Earnings per Share(2)(3)(4) was a loss of
$0.25 compared to Adjusted Earnings per Share of$0.27 last year. Year-to-date Adjusted Earnings per Share was a loss of$0.51 compared to Adjusted Earnings per Share of$0.47 last year. -
The Bakery Products Group achieved Adjusted EBITDA(2)(3)(5) margins of 11.6% for the full year compared to 10.1% last year -
The Company sold its Rothsay and Olivieri businesses for net combined
proceeds of
$744.8 million -
The Company announced an agreement to sell its 90% interest in
Canada Bread Company, Limited , to Grupo Bimbo
"We are in a peak phase of executing our prepared meats network
strategy, which added tremendous costs and inefficiency in the quarter
as we ramped up five new facilities while continuing to operate our
parallel older plants," said
"For three years we have been building a new plant network, which
entered a peak period in December of 2013 as we began commissioning
Maple Leaf's single largest facility in
Financial Overview
Adjusted Operating Earnings for the fourth quarter decreased to a loss
of
Net loss from continuing operations(2)(3) for the fourth quarter was
Adjusted Earnings per Share in the fourth quarter of 2013 was a loss of
Several items are excluded from the discussions of underlying earnings performance as they are not representative of on-going operational activities. Refer to the section entitled Reconciliation of Non-IFRS Financial Measures at the end of this News Release for a description and reconciliation of all non-IFRS financial measures.
Business Segment Review
Following is a summary of sales by business segment:
Fourth Quarter | Year-to-Date | |||||||
(Unaudited) | (Audited) | |||||||
($ thousands) | 2013 | 2012 | 2013 | 2012 | ||||
Meat Products Group | $ | 742,739 | $ | 751,362 | $ | 2,923,857 | $ | 3,046,633 |
Agribusiness Group(3) | 4,585 | 8,973 | 29,005 | 26,630 | ||||
Protein Group | $ | 747,324 | $ | 760,335 | $ | 2,952,862 | $ | 3,073,263 |
Bakery Products Group(3) | 359,661 | 370,340 | 1,453,586 | 1,478,565 | ||||
Sales | $ | 1,106,985 | $ | 1,130,675 | $ | 4,406,448 | $ | 4,551,828 |
The following table summarizes Adjusted Operating Earnings by business segment:
Fourth Quarter | Year-to-Date | |||||||
(Unaudited) | (Audited) | |||||||
($ thousands) | 2013 | 2012(2) | 2013 | 2012(2) | ||||
Meat Products Group | $ | (42,625) | $ | 42,585 | $ | (86,192) | $ | 98,367 |
Agribusiness Group(3) | (10,003) | (4,826) | (38,258) | (15,453) | ||||
Protein Group | $ | (52,628) | $ | 37,759 | $ | (124,450) | $ | 82,914 |
Bakery Products Group(3) | 30,912 | 33,139 | 113,699 | 96,410 | ||||
Non-allocated Costs in Adjusted Operating Earnings(i) |
- | (901) | (1,500) | (7,305) | ||||
Adjusted Operating Earnings | $ | (21,716) | $ | 69,997 | $ | (12,251) | $ | 172,019 |
(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. |
Includes value-added prepared meats, lunch kits, protein snacks, and
value-added 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.
Full year sales declined 4.0%, or 2.1% after adjusting for the impact of divestitures and foreign exchange, primarily due to lower volumes in the fresh pork and prepared meats businesses. Partly offsetting this was the benefit of higher commodity prices in fresh pork, price increases in the fresh poultry and prepared meats businesses, and higher fresh poultry volumes.
Adjusted Operating Earnings for the fourth quarter declined to a loss of
The Company is in a peak phase of completing its prepared meats
strategy, designed to establish a low cost supply chain and achieve
structural margin expansion. Earnings were significantly impacted by
the cost of commissioning five new facilities, resulting in
transitional costs of approximately
Margins in the prepared meats business were also compressed by higher
raw material and other input costs, as well as inflationary costs that
were not fully offset by pricing. Selling, general, and administrative
costs were higher than last year, due to comparatively lower variable
compensation expense last year. During the fourth quarter of 2012, the
prepared meats business recognized
Earnings in primary pork processing were negatively affected by lower export margins, primarily to the Japanese market, lower volumes, and declining values for by-product sales. These reductions were partly offset by lower selling, general, and administrative costs. Earnings in fresh poultry declined due to lower primary processing spreads and inflationary costs that were only partly offset by higher earnings from value-added sales.
The sale of the Company's potato processing operations in
For the full year, Adjusted Operating Earnings was a loss of
Includes Canadian hog production operations that primarily supplies the
Adjusted Operating Earnings in the fourth quarter decreased to a loss of
Full year Adjusted Operating Earnings decreased to a loss of
Includes fresh and frozen bakery products, including breads, rolls,
bagels, frozen par-baked products, specialty and artisan breads sold to
retail, foodservice and convenience channels. It includes national
brands such as Dempster's®, Tenderflake®, and New York Bakery CoTM, and many leading regional brands.
Sales for the full year decreased 1.7% to
Fourth quarter Adjusted Operating Earnings decreased 6.7% to
Lower volumes in the fresh bakery business were only partly offset by
increased efficiencies at the new
For the full year, Adjusted Operating Earnings increased 17.9% to
Sale of Rothsay and Olivieri Businesses
During the fourth quarter, the Company sold its Rothsay by-product
recycling and Olivieri fresh pasta businesses for net proceeds of
Long-term EBITDA Margin Targets
In the Company's third quarter Management's Discussion & Analysis,
Management provided restated 2015 Adjusted EBITDA margin targets to
reflect the sale of the Rothsay business. These targets, which were
10.0% for the
Subsequent Events
On
On
Other Matters
On
An investor presentation related to the Company's fourth 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
A webcast presentation of the fourth quarter financial results will also be available at http://www.media-server.com/m/p/eb4zbyw7
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; Adjusted Earnings per Share; Adjusted EBITDA; and Net Debt. Management believes that these non-IFRS measures provide useful information to 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
Adjusted Operating Earnings, a non-IFRS measure, is used by Management to evaluate financial operating results. It is defined as earnings before income taxes adjusted for items that are not considered representative of on-going operational activities of the business and items where the economic impact of the transactions will be reflected in earnings in future periods when the underlying asset is sold or transferred. The table below provides a reconciliation of net earnings from continuing operations as reported under IFRS to Adjusted Operating Earnings for the three months ended, as indicated below, and a reconciliation of net earnings from continuing operations as reported under IFRS in the audited consolidated statements of earnings to Adjusted Operating Earnings for the years then ended, as indicated below. Management believes that this basis is the most appropriate on which to evaluate operating results, as they are representative of the on-going operations of the Company.
Three months ended December 31, 2013 | ||||||||||||
Meat | Bakery | |||||||||||
($ thousands) | Products | Agribusiness | Products | Unallocated | ||||||||
(Unaudited) | Group | Group (3) | Group (3) | costs | Consolidated | |||||||
Net earnings (loss) from continuing operations | $ | (14,449) | ||||||||||
Income taxes | (3,557) | |||||||||||
Earnings (loss) before income taxes from continuing operations | $ | (18,006) | ||||||||||
Interest expense | 17,833 | |||||||||||
Change in the fair value of non-designated | ||||||||||||
interest rate swaps | (92) | |||||||||||
Other (income) expense | (835) | (276) | (11,402) | (2,046) | (14,559) | |||||||
Restructuring and other related costs | 12,490 | - | 2,785 | - | 15,275 | |||||||
Earnings (loss) from Continuing Operations | $ | (42,625) | $ | (10,003) | $ | 30,912 | $ | 22,167 | $ | 451 | ||
Decrease (increase) in fair value of biological assets | - | - | - | (18,109) | (18,109) | |||||||
Unrealized (gains) losses on commodity futures contracts | - | - | - | (4,058) | (4,058) | |||||||
Adjusted Operating Earnings | $ | (42,625) | $ | (10,003) | $ | 30,912 | $ | - | $ | (21,716) |
Three months ended December 31, 2012(2) | ||||||||||||
Meat | Bakery | |||||||||||
($ thousands) | Products | Agribusiness | Products | Unallocated | ||||||||
(Unaudited) | Group | Group (3) | Group (3) | costs | Consolidated | |||||||
Net earnings (loss) from continuing operations | $ | 40,954 | ||||||||||
Income taxes | 14,595 | |||||||||||
Earnings (loss) before income taxes from continuing operations | $ | 55,549 | ||||||||||
Interest expense | 17,190 | |||||||||||
Change in the fair value of non-designated | ||||||||||||
interest rate swaps | (117) | |||||||||||
Other (income) expense | 673 | (4,229) | (277) | (481) | (4,314) | |||||||
Restructuring and other related costs | 8,982 | - | 3,814 | - | 12,796 | |||||||
Earnings (loss) from Continuing Operations | $ | 42,585 | $ | (4,826) | $ | 33,139 | $ | 10,206 | $ | 81,104 | ||
Decrease (increase) in fair value of biological assets | - | - | - | (10,703) | (10,703) | |||||||
Unrealized (gains) losses on commodity futures contracts | - | - | - | (404) | (404) | |||||||
Adjusted Operating Earnings | $ | 42,585 | $ | (4,826) | $ | 33,139 | $ | (901) | $ | 69,997 |
Twelve months ended December 31, 2013 | ||||||||||||
Meat | Bakery | |||||||||||
($ thousands) | Products | Agribusiness | Products | Unallocated | ||||||||
(Audited) | Group | Group (3) | Group (3) | costs | Consolidated | |||||||
Net earnings (loss) from continuing operations | $ | (58,543) | ||||||||||
Income taxes | $ | (22,842) | ||||||||||
Earnings (loss) before income taxes from continuing operations | $ | (81,385) | ||||||||||
Interest expense | 69,842 | |||||||||||
Change in the fair value of non-designated | ||||||||||||
interest rate swaps | (2,022) | |||||||||||
Other (income) expense | (47,745) | (1,036) | (6,255) | (22,959) | (77,995) | |||||||
Restructuring and other related costs | 73,466 | - | 17,953 | 1,745 | 93,164 | |||||||
Earnings (loss) from Continuing Operations | $ | (86,192) | $ | (38,258) | $ | 113,699 | $ | 12,355 | $ | 1,604 | ||
Decrease (increase) in fair value of biological assets | - | - | - | (13,540) | (13,540) | |||||||
Unrealized (gains) / losses on commodity futures contracts | - | - | - | (315) | (315) | |||||||
Adjusted Operating Earnings | $ | (86,192) | $ | (38,258) | $ | 113,699 | $ | (1,500) | $ | (12,251) |
Twelve months ended December 31, 2012(2) | ||||||||||||
Meat | Bakery | |||||||||||
($ thousands) | Products | Agribusiness | Products | Unallocated | ||||||||
(Audited) | Group | Group (3) | Group (3) | costs | Consolidated | |||||||
Net earnings (loss) from continuing operations | $ | 41,967 | ||||||||||
Income taxes | 20,005 | |||||||||||
Earnings (loss) before income taxes from continuing operations | $ | 61,972 | ||||||||||
Interest expense | 71,707 | |||||||||||
Change in the fair value of non-designated | ||||||||||||
interest rate swaps | (7,297) | |||||||||||
Other (income) expense | (2,323) | (4,294) | (1,635) | (388) | (8,640) | |||||||
Restructuring and other related costs | 36,438 | - | 11,073 | - | 47,511 | |||||||
Earnings (loss) from Continuing Operations | $ | 98,367 | $ | (15,453) | $ | 96,410 | $ | (14,071) | $ | 165,253 | ||
Decrease (increase) in fair value of biological assets | - | - | - | 3,436 | 3,436 | |||||||
Unrealized (gains) losses on commodity futures contracts | - | - | - | 3,330 | 3,330 | |||||||
Adjusted Operating Earnings | $ | 98,367 | $ | (15,453) | $ | 96,410 | $ | (7,305) | $ | 172,019 |
Adjusted Earnings per Share
Adjusted Earnings per Share, a non-IFRS measure, is used by Management to evaluate on-going financial operating results. It is defined as basic earnings per share from continuing operations attributable to common shareholders, and is adjusted for items that are not considered representative of on-going operational activities of the business, and items where the economic impact of the transactions will be reflected in earnings in future periods when the underlying asset is sold or transferred. The table below provides a reconciliation of basic earnings per share from continuing operations as reported under IFRS to Adjusted Earnings per Share for the three months ended, as indicated below, and a reconciliation of basic earnings per share from continuing operations as reported under IFRS in the audited consolidated statements of earnings to Adjusted Earnings per Share for the years then ended, as indicated below. Management believes this basis is the most appropriate on which to evaluate financial results as they are representative of the on-going operations of the Company.
Three months ended | Twelve months ended | ||||||||
December 31, | December 31, | ||||||||
(Unaudited) | (Audited) | ||||||||
($ per share) | 2013(3) | 2012(2)(3) | 2013(3) | 2012(2)(3) | |||||
Basic earnings (loss) per share from continuing operations | $ | (0.13) | $ | 0.28 | $ | (0.48) | $ | 0.25 | |
Restructuring and other related costs(i) | 0.08 | 0.07 | 0.49 | 0.25 | |||||
Items included in other income not considered representative of | |||||||||
on-going operations(ii) | (0.09) | (0.02) | (0.43) | (0.02) | |||||
Change in the fair value of non-designated interest rate swaps(iii) | - | - | (0.01) | (0.04) | |||||
Change in the fair value of unrealized (gains) losses on commodity | |||||||||
futures contracts(iii) | (0.02) | - | - | 0.02 | |||||
Change in the fair value of biological assets(iii) | (0.10) | (0.06) | (0.07) | 0.02 | |||||
Adjusted Earnings per Share(iv) | $ | (0.25) | $ | $ 0.27 | $ | (0.51) | $ | 0.47 |
(i) | Includes per share impact of restructuring and other related costs, net of tax and non-controlling interest. |
(ii) | Includes gains/losses associated with non-operational activities, including gains/losses related to restructuring activities, business combinations, discontinued operations, assets held for sale, and hedge ineffectiveness recognized in earnings, all net of tax. |
(iii) | Includes per share 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, net of tax. |
(iv) | 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 expected timing of the
completion of the sale of the shares of
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.,
Factors that could cause actual results or outcomes to differ materially from the results expressed, implied, or forecasted by forward-looking information include among other things:
-
the risks associated with the acquisition of
Canada Bread by Grupo Bimbo - the risks associated with implementing and executing the Plan;
- the risks associated with the availability of capital and the Company's outstanding indebtedness;
- the risks associated with changes in the Company's systems and processes;
- the risks posed by food contamination, consumer liability, and product recalls;
- the risks associated with acquisitions, divestitures, and capital expansion projects;
- the impact on pension expense and funding requirements of fluctuations in the market prices of fixed income and equity securities and changes in interest rates;
- the cyclical nature of the cost and supply of hogs and the competitive nature of the pork market generally;
- the risks related to the health status of livestock;
- the impact of a pandemic on the Company's operations;
- the Company's exposure to currency exchange risks;
- the ability of the Company to hedge against the effect of commodity price changes through the use of commodity futures and options;
- the impact of changes in the market value of the biological assets and hedging instruments;
- the impact of international events on commodity prices and the free flow of goods;
- the risks posed by compliance with extensive government regulation;
- the risks posed by litigation;
- the impact of changes in consumer tastes and buying patterns;
- the impact of extensive environmental regulation and potential environmental liabilities;
- the risks associated with a consolidating retail environment;
- the risks posed by competition;
- the risks associated with complying with differing employment laws and practices globally, the potential for work stoppages due to non-renewal of collective agreements, and recruiting and retaining qualified personnel;
- the risks associated with the Company's independent distributors;
- the risks associated with pricing the Company's products;
- the risks associated with managing the Company's supply chain; and
- the risks associated with failing to identify and manage the strategic risks facing the Company.
The Company cautions the reader that the foregoing list of factors is
not exhaustive. These factors are discussed in more detail under the
heading "Risk Factors" in the Company's Annual Management's Discussion
and Analysis for the period ended
Additional information concerning the Company, including the Company's Annual Information Form, will be available on SEDAR at www.sedar.com.
Footnote Legend
- Adjusted Operating Earnings, a non-IFRS measure, is used by Management to evaluate financial operating results. It is defined as earnings from operations adjusted for items that are not considered representative of on-going operational activities of the business, and items where the economic impact of the transactions will be reflected in earnings in future periods when the underlying asset is sold or transferred. Please refer to the section entitled Reconciliation of Non-IFRS Financial Measures in this news release.
- 2012 figures have been restated for the impact of adopting the revised International Accounting Standard 19 Employee Benefits ("IAS 19"), as disclosed in Note 32 of the Company's audited consolidated financial statements.
- Figures exclude the results of the Rothsay and Olivieri businesses, which are reported as discontinued operations. Refer to Note 22 of the Company's audited consolidated financial statements.
- Adjusted Earnings per Share, a non-IFRS measure, is used by Management to evaluate on-going financial operating results. It is defined as basic earnings per share from continuing operations attributable to common shareholders, and is adjusted for all items that are not considered representative of on-going operational activities of the business, and items where the economic impact of the transactions will be reflected in earnings in future periods when the underlying asset is sold or transferred. Please refer to the section entitled Reconciliation of Non-IFRS Financial Measures in this news release.
- Adjusted EBITDA, a non-IFRS measure, is used by Management to evaluate financial operating results. It is defined as earnings before interest and income taxes plus depreciation and intangible asset amortization, adjusted for items that are not considered representative of on-going operational activities of the business, and items where the economic impact of the transactions will be reflected in earnings in future periods when the underlying asset is sold or transferred.
Consolidated Financial Statements
(Expressed in thousands of Canadian dollars)
Three and twelve months ended
Consolidated Balance Sheets
As at | As at | As at | |||||||
December 31, | December 31, | January 1, | |||||||
2013 | 2012 | 2012 | |||||||
(Restated) | (Restated) | ||||||||
ASSETS | |||||||||
Current assets | |||||||||
Cash and cash equivalents | $ | 506,670 | $ | $ 90,414 | $ | - | |||
Accounts receivable | 111,034 | 117,533 | 133,504 | ||||||
Notes receivable | 115,514 | 124,457 | 123,545 | ||||||
Inventories | 287,786 | 301,804 | 293,231 | ||||||
Biological assets | 95,740 | 78,127 | 49,265 | ||||||
Income taxes and other taxes recoverable | 43,300 | 41,527 | 43,789 | ||||||
Assets held for sale | 5,206 | 37,087 | - | ||||||
Prepaid expenses and other assets | 17,921 | 12,590 | 24,688 | ||||||
$ | 1,183,171 | $ | 803,539 | $ | 668,022 | ||||
Property and equipment | 1,323,318 | 1,212,177 | 1,067,246 | ||||||
Investment property | 12,865 | 11,979 | 11,232 | ||||||
Employee benefits | 117,615 | 107,831 | 133,942 | ||||||
Deferred tax asset | 26,119 | 132,558 | 127,456 | ||||||
Goodwill | 720,798 | 753,156 | 753,739 | ||||||
Intangible assets | 198,578 | 208,793 | 191,896 | ||||||
Other long-term assets | 16,628 | 13,663 | 11,926 | ||||||
Total assets | $ | 3,599,092 | $ | 3,243,696 | $ | 2,965,459 | |||
LIABILITIES AND EQUITY | |||||||||
Current liabilities | |||||||||
Bank indebtedness | $ | 4,408 | $ | 48,243 | $ | 36,404 | |||
Accounts payable and accruals | 649,554 | 446,911 | 507,059 | ||||||
Provisions | 54,853 | 26,335 | 44,255 | ||||||
Current portion of long-term debt | 209,780 | 6,573 | 5,618 | ||||||
Other current liabilities | 47,927 | 14,961 | 20,409 | ||||||
$ | 966,522 | $ | 543,023 | $ | 613,745 | ||||
Long-term debt | 744,212 | 1,206,945 | 941,956 | ||||||
Employee benefits | 174,503 | 420,933 | 350,853 | ||||||
Provisions | 19,603 | 25,800 | 28,936 | ||||||
Other long-term liabilities | 28,744 | 80,084 | 88,153 | ||||||
Deferred tax liability | 23,516 | 8,912 | 11,703 | ||||||
Total liabilities | $ | 1,957,100 | $ | 2,285,697 | $ | 2,035,346 | |||
Shareholders' equity | |||||||||
Share capital | $ | 905,216 | $ | 902,810 | $ | 902,810 | |||
Retained earnings (deficit) | 602,717 | (72,701) | (78,674) | ||||||
Contributed surplus | 79,139 | 75,913 | 64,327 | ||||||
Accumulated other comprehensive loss | (4,593) | (13,263) | (17,042) | ||||||
Treasury stock | (1,350) | (1,845) | (6,347) | ||||||
Total shareholders' equity | $ | 1,581,129 | $ | 890,914 | $ | 865,074 | |||
Non-controlling interest | 60,863 | 67,085 | 65,039 | ||||||
Total equity | $ | 1,641,992 | $ | 957,999 | $ | 930,113 | |||
Total liabilities and equity | $ | 3,599,092 | $ | 3,243,696 | $ | 2,965,459 |
Consolidated Statements of Earnings (Loss)
(In thousands of Canadian dollars, except share amounts) | ||||||||||
Three months ended December 31, | Twelve months ended December 30, | |||||||||
2013 | 2012 | 2013 | 2012 | |||||||
(Unaudited) | (Unaudited) | (Restated) | ||||||||
(Restated) | ||||||||||
Sales | $ | 1,106,985 | $ | 1,130,675 | $ | 4,406,448 | $ | 4,551,828 | ||
Cost of goods sold | 983,206 | 938,255 | 3,920,652 | 3,878,219 | ||||||
Gross margin | $ | 123,779 | $ | 192,420 | $ | 485,796 | $ | 673,609 | ||
Selling, general and administrative expenses | 123,328 | 111,316 | 484,192 | 508,356 | ||||||
Earnings from continuing operations | ||||||||||
before the following: | $ | 451 | $ | 81,104 | $ | 1,604 | $ | 165,253 | ||
Restructuring and other related costs | (15,275) | (12,796) | (93,164) | (47,511) | ||||||
Change in fair value of non-designated | ||||||||||
interest rate swaps | 92 | 117 | 2,022 | 7,297 | ||||||
Other income (expense) | 14,559 | 4,314 | 77,995 | 8,640 | ||||||
Earnings (loss) before interest and | ||||||||||
income taxes from continuing operations | $ | (173) | $ | 72,739 | $ | (11,543) | $ | 133,679 | ||
Interest expense and other financing costs | 17,833 | 17,190 | 69,842 | 71,707 | ||||||
Earnings (loss) before income taxes | ||||||||||
from continuing operations | $ | (18,006) | $ | 55,549 | $ | (81,385) | $ | 61,972 | ||
Income taxes | (3,557) | 14,595 | (22,842) | 20,005 | ||||||
Net earnings (loss) from continuing operations | $ | (14,449) | $ | 40,954 | $ | (58,543) | $ | 41,967 | ||
Net earnings and gain on disposal of discontinued | ||||||||||
operations | 525,824 | 9,352 | 570,706 | 54,595 | ||||||
Net earnings | $ | 511,375 | $ | 50,306 | $ | 512,163 | $ | 96,562 | ||
Attributed to: | ||||||||||
Common shareholders | $ | 500,747 | $ | 48,139 | $ | 496,310 | $ | 89,416 | ||
Non-controlling interest | 10,628 | 2,167 | 15,853 | 7,146 | ||||||
$ | 511,375 | $ | 50,306 | $ | 512,163 | $ | 96,562 | |||
Earnings (loss) per share attributable to common shareholders | ||||||||||
Basic earnings per share | $ | 3.58 | $ | 0.35 | $ | 3.55 | $ | 0.64 | ||
Diluted earnings per share | $ | 3.58 | $ | 0.34 | $ | 3.55 | $ | 0.63 | ||
Basic earnings (loss) per share | ||||||||||
from continuing operations | $ | (0.13) | $ | 0.28 | $ | (0.48) | $ | 0.25 | ||
Diluted earnings (loss) per share | ||||||||||
from continuing operations | $ | (0.13) | $ | 0.27 | $ | (0.48) | $ | 0.24 | ||
Weighted average number of shares (millions) | 140.0 | 139.3 | 139.9 | 139.4 |
Consolidated Statements of Comprehensive Income (Loss)
(In thousands of Canadian dollars) | Three months ended December 31, | Twelve months ended Decmeber 31, | |||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||
(Unaudited) | (Unaudited) | (Restated) | |||||||||||||
(Restated) | |||||||||||||||
Net earnings | $ | 511,375 | $ | 50,306 | $ | 512,163 | $ | 96,562 | |||||||
Other comprehensive income (loss) | |||||||||||||||
Items that will not be reclassified | |||||||||||||||
to profit or loss: | |||||||||||||||
Change in actuarial gains and losses $ | 60,892 | $ | 7,261 | $ | 203,365 | $ | (61,591) | ||||||||
Total items that will not be reclassified | |||||||||||||||
to profit or loss | $ | 60,892 | $ | 7,261 | $ | 203,365 | $ | (61,591) | |||||||
Items that are or may be reclassified | |||||||||||||||
subsequently to profit or loss: | |||||||||||||||
Change in accumulated foreign currency | |||||||||||||||
translation adjustment | $ | 6,189 | $ | 1,972 | $ | 10,728 | $ | (1,730) | |||||||
Change in unrealized gains and losses | |||||||||||||||
on cash flow hedges | 565 | (1,061) | (546) | 5,251 | |||||||||||
Total items that are or may be reclassified | |||||||||||||||
subsequently to profit or loss | $ | 6,754 | $ | 911 | $ | 10,182 | $ | 3,521 | |||||||
$ | 67,646 | $ | 8,172 | $ | 213,547 | $ | (58,070) | ||||||||
Comprehensive income | $ | 579,021 | $ | 58,478 | $ | 725,710 | $ | 38,492 | |||||||
Attributed to: | |||||||||||||||
Common shareholders | $ | 567,062 | $ | 55,773 | $ | 706,515 | $ | 31,981 | |||||||
Non-controlling interest | 11,959 | 2,705 | 19,195 | 6,511 |
Consolidated Statements of Changes in Total Equity
(In thousands of Canadian dollars)
Attributable to Common Shareholders | |||||||||||||||||
Total | |||||||||||||||||
accumulated | |||||||||||||||||
other | Non- | ||||||||||||||||
Share | Retained | Contributed | comprehensive | Treasury | controlling | Total | |||||||||||
capital | earnings | surplus | loss | stock | interest | equity | |||||||||||
Balance at December 31, 2012 | $ | 902,810 | $ | (72,701) | $ | 75,913 | $ | (13,263) | $ | (1,845) | $ | 67,085 | $ | 957,999 | |||
(Restated) | |||||||||||||||||
Net earnings | - | 496,310 | - | - | - | 15,853 | 512,163 | ||||||||||
Other comprehensive | |||||||||||||||||
income | - | 201,535 | - | 8,670 | - | 3,342 | 213,547 | ||||||||||
Dividends declared | |||||||||||||||||
($0.16 per share) | - | (22,427) | - | - | - | (25,417) | (47,844) | ||||||||||
Stock-based compensation | |||||||||||||||||
expense | - | - | 12,604 | - | - | - | 12,604 | ||||||||||
Exercise of stock options | 2,406 | - | - | - | - | - | 2,406 | ||||||||||
Issuance of treasury stock | - | - | (495) | - | 495 | - | - | ||||||||||
Cash settlement of stock compensation | - | - | (14,391) | - | - | - | (14,391) | ||||||||||
Modification of stock compensation plan | - | - | 3,508 | - | - | - | 3,508 | ||||||||||
Other | - | - | 2,000 | - | - | - | 2,000 | ||||||||||
Balance at December 31, 2013 | $ | 905,216 | $ | 602,717 | $ | 79,139 | $ | (4,593) | $ | (1,350) | $ | 60,863 | $ | 1,641,992 | |||
Attributable to Common Shareholders | |||||||||||||||||
Total | |||||||||||||||||
accumulated | |||||||||||||||||
other | Non- | ||||||||||||||||
Share | Retained | Contributed | comprehensive | Treasury | controlling | Total | |||||||||||
capital | deficit | surplus | loss | stock | interest | equity | |||||||||||
(Restated) | |||||||||||||||||
Balance at January 1, 2012 | $ | 902,810 | $ | (78,674) | $ | 64,327 | $ | (17,042) | $ | (6,347) | $ | 65,039 | $ | 930,113 | |||
(Restated) | |||||||||||||||||
Net earnings | - | 89,416 | - | - | - | 7,146 | 96,562 | ||||||||||
Other comprehensive | |||||||||||||||||
income (loss) | - | (61,214) | - | 3,779 | - | (635) | (58,070) | ||||||||||
Dividends declared | |||||||||||||||||
($0.16 per share) | - | (22,229) | - | - | - | (4,473) | (26,702) | ||||||||||
Stock-based compensation | |||||||||||||||||
expense | - | - | 24,711 | - | - | - | 24,711 | ||||||||||
Issuance of treasury stock | - | - | (13,525) | - | 13,525 | - | - | ||||||||||
Repurchase of treasury stock | - | - | - | - | (9,023) | - | (9,023) | ||||||||||
Acquisition of business | - | - | - | - | - | (82) | (82) | ||||||||||
Other | - | - | 400 | - | - | 90 | 490 | ||||||||||
Balance at December 31, 2012 | $ | 902,810 | $ | (72,701) | $ | 75,913 | $ | (13,263) | $ | (1,845) | $ | 67,085 | $ | 957,999 |
Consolidated Statements of Cash Flows
(In thousands of Canadian dollars) | Three months ended December 31, | Twelve months ended December 31, | |||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||
(Unaudited) | (Unaudited) | (Restated) | |||||||||||
(Restated) | |||||||||||||
CASH (USED IN) PROVIDED BY: | |||||||||||||
Operating activities | |||||||||||||
Net earnings | $ | 511,375 | $ | 50,306 | $ | 512,163 | $ | 96,562 | |||||
Add (deduct) items not affecting cash: | |||||||||||||
Change in fair value of biological assets | (18,109) | (10,703) | (13,540) | 3,436 | |||||||||
Depreciation and amortization | 36,682 | 35,093 | 141,818 | 132,739 | |||||||||
Stock-based compensation | 2,358 | 8,482 | 12,604 | 24,711 | |||||||||
Deferred income taxes | 76,304 | 10,695 | 52,847 | 9,967 | |||||||||
Income tax current | 3,747 | 7,135 | 23,443 | 28,922 | |||||||||
Interest expense | 16,445 | 17,187 | 68,496 | 71,685 | |||||||||
Gain on sale of property and equipment | 613 | (203) | (2,320) | (624) | |||||||||
Gain on sale of business | (605,901) | - | (605,901) | - | |||||||||
Gain on sale of assets held for sale | (10,564) | - | (67,640) | (459) | |||||||||
Gain on sale of investment property | - | - | (323) | - | |||||||||
Gain on business combination | - | (5,330) | 985 | (5,330) | |||||||||
Change in fair value of non-designated | |||||||||||||
interest rate swaps | (92) | (117) | (2,022) | (7,297) | |||||||||
Change in fair value of | |||||||||||||
derivative financial instruments | (3,746) | (196) | 117 | 3,107 | |||||||||
Impairment of assets (net of reversals) | (87) | - | 5,837 | - | |||||||||
Increase in pension liability | 1,079 | (4,801) | 15,789 | 13,282 | |||||||||
Net income taxes paid | (7,559) | (5,349) | (28,537) | (21,861) | |||||||||
Interest paid | (13,479) | (16,473) | (62,949) | (69,896) | |||||||||
Change in provision for restructuring | |||||||||||||
and other related costs | 7,591 | 7,120 | 55,497 | 13,179 | |||||||||
Other | 7,181 | (2,038) | (13,194) | (9,427) | |||||||||
Change in non-cash operating working capital | 43,236 | (24,383) | 166,955 | (64,616) | |||||||||
Cash provided by operating activities | $ | 47,074 | $ | 66,425 | $ | 260,125 | $ | 218,080 | |||||
Financing activities | |||||||||||||
Dividends paid | $ | (5,613) | $ | (5,639) | $ | (22,427) | $ | (22,229) | |||||
Dividends paid to non-controlling interest | (1,271) | (1,270) | (5,084) | (3,710) | |||||||||
Net increase (decrease) in long-term debt | (592,088) | 83,410 | (279,178) | 272,546 | |||||||||
Purchase of treasury stock | - | - | - | (9,023) | |||||||||
Exercise of stock options | 2,230 | - | 2,406 | - | |||||||||
Cash settlement of stock compensation | (14,391) | - | (14,391) | - | |||||||||
Increase in financing costs | (1,388) | - | (1,388) | - | |||||||||
Other | - | (352) | - | (1,619) | |||||||||
Cash provided by (used in) financing activities | $ | (612,521) | $ | 76,149 | $ | (320,062) | $ | 235,965 | |||||
Investing activities | |||||||||||||
Additions to long-term assets | $ | (87,647) | $ | (108,723) | $ | (361,155) | $ | (306,334) | |||||
Acquisition of business | - | (46,560) | (922) | (77,690) | |||||||||
Capitalization of interest expense | (4,854) | (2,771) | (15,980) | (6,901) | |||||||||
Proceeds from sale of long-term assets | 3,598 | 1,630 | 12,094 | 7,481 | |||||||||
Proceeds from sale of business | 744,811 | - | 744,811 | - | |||||||||
Proceeds from sale of assets held for sale | 11,495 | - | 141,180 | 7,974 | |||||||||
Cash provided by (used in) investing activities | $ | 667,403 | $ | (156,424) | $ | 520,028 | $ | (375,470) | |||||
Increase (decrease) in cash and cash equivalents | $ | 101,956 | $ | (13,850) | $ | 460,091 | $ | 78,575 | |||||
Net cash and cash equivalents, beginning of period | 400,306 | 56,021 | 42,171 | (36,404) | |||||||||
Net cash and cash equivalents, end of period | $ | 502,262 | $ | 42,171 | $ | 502,262 | $ | 42,171 | |||||
Net cash and cash equivalents is comprised of: | |||||||||||||
Cash and cash equivalents | $ | 506,670 | $ | 90,414 | $ | 506,670 | $ | 90,414 | |||||
Bank indebtedness | (4,408) | (48,243) | (4,408) | (48,243) | |||||||||
Net cash and cash equivalents, end of period | $ | 502,262 | $ | 42,171 | $ | 502,262 | $ | 42,171 |
Segmented Financial Information
Three months ended December 31, | Twelve months ended December 31, | |||||||||
2013 | 2012 | 2013 | 2012 | |||||||
(Unaudited) | (Unaudited) | (Restated) | ||||||||
(Restated) | ||||||||||
Sales | ||||||||||
Meat Products Group | $ | 742,739 | $ | 751,362 | $ | 2,923,857 | $ | 3,046,633 | ||
Agribusiness Group | 22,303 | 64,938 | 235,199 | 259,181 | ||||||
Bakery Products Group | 372,805 | 390,747 | 1,531,993 | 1,567,196 | ||||||
Total sales | $ | 1,137,847 | $ | 1,207,047 | $ | 4,691,049 | $ | 4,873,010 | ||
Sales from discontinued operations | (30,862) | (76,372) | (284,601) | (321,182) | ||||||
Sales from continuing operations | $ | 1,106,985 | $ | 1,130,675 | $ | 4,406,448 | $ | 4,551,828 | ||
Earnings before restructuring and other related | ||||||||||
costs and other income | ||||||||||
Meat Products Group | $ | (42,625) | $ | 42,585 | $ | (86,192) | $ | 98,367 | ||
Agribusiness Group | (6,365) | 10,327 | 23,303 | 59,813 | ||||||
Bakery Products Group | 30,675 | 30,504 | 116,030 | 94,010 | ||||||
Non-allocated costs | 22,167 | 10,206 | 12,355 | (14,071) | ||||||
Total earnings before restructuring | ||||||||||
and other related costs and other income | $ | 3,852 | $ | 93,622 | $ | 65,496 | $ | 238,119 | ||
Earnings before restructuring | ||||||||||
and other related costs and other income | ||||||||||
from discontinued operations | (3,401) | (12,518) | (63,892) | (72,866) | ||||||
Earnings before restructuring | ||||||||||
and other related costs and other income | ||||||||||
from continuing operations | $ | 451 | $ | 81,104 | $ | 1,604 | $ | 165,253 | ||
Capital expenditures | ||||||||||
Meat Products Group | $ | 87,532 | $ | 85,951 | $ | 318,995 | $ | 234,663 | ||
Agribusiness Group | 6,481 | 7,424 | 17,917 | 16,361 | ||||||
Bakery Products Group | 17,864 | 15,348 | 48,473 | 55,310 | ||||||
$ | 111,877 | $ | 108,723 | $ | 385,385 | $ | 306,334 | |||
Depreciation and amortization | ||||||||||
Meat Products Group | $ | 19,264 | $ | 16,431 | $ | 69,111 | $ | 61,260 | ||
Agribusiness Group | 2,453 | 4,031 | 14,748 | 15,980 | ||||||
Bakery Products Group | 14,965 | 14,631 | 57,959 | 55,499 | ||||||
$ | 36,682 | $ | 35,093 | $ | 141,818 | $ | 132,739 |
Segmented Financial Information
As at December 31, | As at December 31, | As at January 1, | |||||||||
2013 | 2012 | 2012 | |||||||||
(Restated) | (Restated) | ||||||||||
Total assets | |||||||||||
Meat Products Group | $ | 1,823,866 | $ | 1,617,413 | $ | 1,482,741 | |||||
Agribusiness Group | 195,537 | 275,167 | 224,108 | ||||||||
Bakery Products Group | 1,169,669 | 1,005,432 | 944,032 | ||||||||
Non-allocated assets | 410,020 | 345,684 | 314,578 | ||||||||
$ | 3,599,092 | $ | 3,243,696 | $ | 2,965,459 | ||||||
Goodwill | |||||||||||
Meat Products Group | $ | 428,236 | $ | 442,925 | $ | 442,336 | |||||
Agribusiness Group | - | 13,845 | 13,845 | ||||||||
Bakery Products Group | 292,562 | 296,386 | 297,558 | ||||||||
$ | 720,798 | $ | 753,156 | $ | 753,739 |
SOURCE
Investor Contact: Nick Boland,
VP Investor Relations: 416-926-2005
Media Contact: 416-926-2020