Maple Leaf Foods Reports Results for the First Quarter 2014
TSX: MFI
www.mapleleaffoods.com
-
Adjusted Operating Earnings(1)(3) for the first quarter was a loss of
$29.9 million compared to a loss of$27.9 million last year. -
Adjusted Earnings per Share(3)(4) for the quarter was a loss of
$0.24 compared to a loss per share of$0.24 last year. -
Net loss from continuing operations was
$124.6 million compared to$30.6 million last year. -
The Company expects the proposed sale of its 90% interest in
Canada Bread Company, Limited to Grupo Bimbo to close in the second quarter of 2014.
"Although our financial performance is challenging in transition,
particularly with volatile raw material costs, our first quarter was
marked by significant accomplishments," said
"Pork markets have been impacted in an unprecedented way due to a virus in the U.S. hog industry, which has renewed pressure from a sharp rise in raw material costs. We have accelerated price increases in the second quarter to recover margins, and expect the effects of this to be transitory as the industry is forecasting a return to more normal conditions later in 2014."
Financial Overview
Adjusted Operating Earnings for the first quarter was a loss of
Net loss from continuing operations for the first quarter was
Adjusted Earnings per Share in the first quarter was a loss of
Several items are excluded from the discussions of underlying earnings performance as they are not representative of ongoing operational activities. Please refer to the section entitled Reconciliation of Non-IFRS Financial Measures at the end of this news release for a description and reconciliation of all non-IFRS financial measures.
Business Segment Review
Following is a summary of sales by business segment:
(Unaudited) | First Quarter | ||||
($ thousands) | 2014 | 2013 | |||
Meat Products Group | $ | 705,399 | $ | 678,066 | |
Agribusiness Group(5) | 5,948 | 11,287 | |||
Total Sales(3) | $ | 711,347 | $ | 689,353 |
The following table summarizes Adjusted Operating Earnings by business segment:
(Unaudited) | First Quarter | ||||
($ thousands) | 2014 | 2013(3) | |||
Meat Products Group | $ | (27,447) | $ | (10,452) | |
Agribusiness Group | (346) | (12,926) | |||
Protein Group | $ | (27,793) | $ | (23,378) | |
Non-allocated Costs in Adjusted Operating Earnings(i) | (2,135) | (4,474) | |||
Adjusted Operating Earnings(3) | $ | (29,928) | $ | (27,852) |
(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. Non-allocated costs for 2013 have been re-stated on a comparable basis. |
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.
Adjusted Operating Earnings for the first quarter declined to a loss of
The prepared meats business continued to execute its strategy to
establish a low cost supply chain by consolidating its manufacturing
network, including commissioning activities at its plant in
Margins in the prepared meats business were compressed by sharply higher raw material and inflationary costs that were not fully offset by pricing. Pork input prices increased significantly from last year due to outbreaks of disease in hog production herds in the U.S. that has significantly increased the price of live hogs in response to a decline in hog supply. The weakening Canadian dollar also contributed to higher input costs. To manage these higher costs, the Company is implementing price increases in the second quarter of 2014.
Growth in branded retail packaged meats volumes compared to last year partly offset the factors described above.
Earnings in the fresh pork business increased due to higher primary pork
processing margins and increased labour and yield efficiencies. These
benefits were partly offset by lower export margins, primarily in the
Japanese market, and lower volumes. Earnings in fresh poultry were
relatively consistent with the prior year, as higher volumes and lower
selling, general and administrative costs were offset by unfavourable
operational variances, in part caused by the unusually cold winter in
Includes Canadian hog production operations that primarily supplies the
Adjusted Operating Earnings in the first quarter improved to a loss of
Discontinued operations
Discontinued operations in the first quarter of 2014 pertain to the
Company's 90.0% interest in
Sales from discontinued operations for the first quarter declined
Net earnings from discontinued operations decreased
Proposed Sale of
On
On
The arrangement was approved by the shareholders of
Subsequent Events
On
On
Other Matters
On
An investor presentation related to the Company's first 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 first quarter financial results will also be available at http://www.media-server.com/m/p/nb3tjyug
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 from continuing 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. 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. 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 March 31, 2014 | ||||||||||
Meat | ||||||||||
($ thousands) | Products | Agribusiness | Unallocated | |||||||
(Unaudited) | Group | Group | costs | Consolidated | ||||||
Net earnings (loss) from continuing operations | $ | (124,606) | ||||||||
Income taxes | (44,193) | |||||||||
Earnings (loss) before income taxes from continuing operations | $ | (168,799) | ||||||||
Interest expense and other financing costs | 114,711 | |||||||||
Change in the fair value of non-designated | ||||||||||
interest rate swaps | (1,110) | |||||||||
Other (income) expense | (526) | (291) | (476) | (1,293) | ||||||
Restructuring and other related costs | 11,472 | - | 10,294 | 21,766 | ||||||
Earnings (loss) from Continuing Operations | $ | (27,447) | $ | (346) | $ | (6,932) | $ | (34,725) | ||
Decrease (increase) in fair value of biological assets (2) | - | - | (40,306) | (40,306) | ||||||
Unrealized (gains) / loss on commodity futures contracts (2) | - | - | 36,503 | 36,503 | ||||||
Modification of long-term incentive plan(2) | - | - | 8,600 | 8,600 | ||||||
Adjusted Operating Earnings(3) | $ | (27,447) | $ | (346) | $ | (2,135) | $ | (29,928) | ||
Three months ended March 31, 2013 | ||||||||||
Meat | ||||||||||
($ thousands) | Products | Agribusiness | Unallocated | |||||||
(Unaudited) | Group | Group (5) | costs | Consolidated | ||||||
Net earnings (loss) from continuing operations | $ | (30,644) | ||||||||
Income taxes | (16,674) | |||||||||
Earnings (loss) before income taxes from continuing operations | $ | (47,318) | ||||||||
Interest expense | 16,103 | |||||||||
Change in the fair value of non-designated | ||||||||||
interest rate swaps | (617) | |||||||||
Other (income) expense | (43,393) | 889 | (793) | (43,297) | ||||||
Restructuring and other related costs | 35,213 | - | 1,745 | 36,958 | ||||||
Earnings (loss) from Continuing Operations | $ | (10,452) | $ | (12,926) | $ | (14,793) | $ | (38,171) | ||
Decrease (increase) in fair value of biological assets (2) | - | - | 5,278 | 5,278 | ||||||
Unrealized (gains) / losses on commodity futures contracts (2) | - | - | 5,041 | 5,041 | ||||||
Adjusted Operating Earnings(3) | $ | (10,452) | $ | (12,926) | $ | (4,474) | $ | (27,852) |
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. 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.
($ per Share) | Three months ended March 31, | ||||
(Unaudited) | 2014 | 2013(i) | |||
Basic earnings (loss) per share from continuing operations | $ | (0.89) | $ | (0.22) | |
Restructuring and other related costs(ii) | 0.12 | 0.20 | |||
Items included in other income not considered representative | |||||
of on-going operations(iii) | - | (0.27) | |||
Change in the fair value of non-designated interest rate swaps(iv) | (0.01) | - | |||
Change in the fair value of unrealized losses on commodity | |||||
futures contracts(iv) | 0.19 | 0.03 | |||
Change in the fair value of biological assets(iv) | (0.21) | 0.03 | |||
Other financing costs (v) | 0.51 | - | |||
Modification of long-term incentive plan (vi) | 0.05 | - | |||
Adjusted Earnings per Share(vii) | $ | (0.24) | $ | (0.24) |
(i) | 2013 figures have been restated for the classification of the Rothsay business and the Bakery Products Group as discontinued operations. Refer to Note 20 of the Company's 2014 first quarter unaudited condensed consolidated interim financial statements. |
(ii) | Includes per share impact of restructuring and other related costs, net of tax and non-controlling interest. |
(iii) | 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. |
(iv) | 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. |
(v) | Includes a $78.7 million early repayment premium to lenders, $10.1 million in financing costs, and a $9.6 million loss transferred from accumulated other comprehensive income into earnings related to the settlement of interest rate swaps that are no longer designated as hedging instruments |
(vi) | Relates to a $8.6 million modification of a long-term incentive compensation plan, which was a decision made as a result of the planned sale of Canada Bread Company, Limited, and is therefore not considered representative of ongoing operational activities of the business. |
(vii) | 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, as well as 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, in addition to 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 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:
• risks associated with the pending acquisition of
• risks associated with implementing and executing the Plan;
• risks associated with the availability of capital and the Company's outstanding indebtedness;
• risks associated with changes in the Company's systems and processes;
• risks posed by food contamination, consumer liability, and product recalls;
• risks associated with acquisitions, divestitures, and capital expansion projects;
• impact on pension expense and funding requirements of fluctuations in the market prices of fixed income and equity securities and changes ininterest rates;
• cyclical nature of the cost and supply of hogs and the competitive nature of the pork market generally;
• risks related to the health status of livestock;
• impact of a pandemic on the Company's operations;
• the Company's exposure to currency exchange risks;
• ability of the Company to hedge against the effect of commodity price changes through the use of commodity futures and options;
• impact of changes in the market value of the biological assets and hedging instruments;
• impact of international events on commodity prices and the free flow of goods;
• risks posed by compliance with extensive government regulation;
• risks posed by litigation;
• impact of changes in consumer tastes and buying patterns;
• impact of extensive environmental regulation and potential environmental liabilities;
• risks associated with a consolidating retail environment;
• risks posed by competition;
• 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;
• risks associated with the Company's independent distributors;
• risks associated with pricing the Company's products;
• risks associated with managing the Company's supply chain; and
• 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
Footnote Legend
- Adjusted Operating Earnings, a non-IFRS measure, is used by Management to evaluate financial operating results. It is defined as earnings from continuing 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.
- Regarding biological assets, please refer to Note 6 of the Company's 2014 first quarter unaudited condensed consolidated interim financial statements. Unrealized gains/losses on commodity futures contracts and settlement of long-term incentive plan are reported within cost of sales and selling, general and administrative respectively in the Company's 2014 first quarter unaudited condensed consolidated interim financial statements.
-
Figures exclude the results of the Rothsay business and the
Bakery Products Group , which are reported as discontinued operations. Refer to Note 20 of the Company's 2014 first quarter unaudited condensed consolidated interim 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.
- 2013 figures exclude the results of the Rothsay business, which are reported as discontinued operations. Refer to Note 20 of the Company's 2014 first quarter unaudited condensed consolidated interim financial statements.
Condensed Consolidated Interim Financial Statements
(Expressed in Canadian dollars)
(Unaudited)
Three months ended
(In thousands of Canadian dollars) | As at March 31, | As at March 31, | As at December 31, | ||||||
2014 | 2013 | 2013 | |||||||
(Unaudited) | (Unaudited) | ||||||||
ASSETS | |||||||||
Current assets | |||||||||
Cash and cash equivalents | $ | 470,783 | $ | 92,438 | $ | 506,670 | |||
Accounts receivable | 69,594 | 109,186 | 111,034 | ||||||
Notes receivable | 109,154 | 119,145 | 115,514 | ||||||
Inventories | 283,273 | 325,363 | 287,786 | ||||||
Biological assets | 140,428 | 79,934 | 95,740 | ||||||
Income and other taxes recoverable | 36,376 | 39,731 | 43,300 | ||||||
Prepaid expenses and other assets | 41,818 | 21,362 | 17,921 | ||||||
Assets held for sale | 1,000,946 | 22,847 | 5,206 | ||||||
$ | 2,152,372 | $ | 810,006 | $ | $ 1,183,171 | ||||
Property and equipment | 994,268 | 1,243,101 | 1,323,318 | ||||||
Investment property | 3,221 | 12,019 | 12,865 | ||||||
Employee benefits | 114,793 | 133,152 | 117,615 | ||||||
Other long-term assets | 8,273 | 12,731 | 16,628 | ||||||
Deferred tax asset | 66,399 | 127,288 | 26,119 | ||||||
Goodwill | 428,236 | 754,746 | 720,798 | ||||||
Intangible assets | 185,263 | 208,033 | 198,578 | ||||||
Total assets | $ | 3,952,825 | $ | 3,301,076 | $ | 3,599,092 | |||
LIABILITIES AND EQUITY | |||||||||
Current liabilities | |||||||||
Bank indebtedness | $ | - | $ | 33,491 | $ | 4,408 | |||
Accounts payable and accruals | 435,628 | 447,589 | 649,554 | ||||||
Provisions | 40,100 | 41,720 | 54,853 | ||||||
Current portion of long-term debt | 1,334,965 | 6,823 | 209,780 | ||||||
Other current liabilities | 128,399 | 17,842 | 47,927 | ||||||
Liabilities associated with assets held for sale | 311,400 | - | - | ||||||
$ | 2,250,492 | $ | 547,465 | $ | 966,522 | ||||
Long-term debt | 6,232 | 1,256,708 | 744,212 | ||||||
Employee benefits | 140,051 | 371,344 | 174,503 | ||||||
Provisions | 30,994 | 34,921 | 19,603 | ||||||
Other long-term liabilities | 26,753 | 75,647 | 28,744 | ||||||
Deferred tax liability | - | 9,449 | 23,516 | ||||||
Total liabilities | $ | 2,454,522 | $ | 2,295,534 | $ | 1,957,100 | |||
Shareholders' equity | |||||||||
Share capital | $ | 906,166 | $ | 902,986 | $ | 905,216 | |||
Retained earnings (deficit) | 458,202 | (31,151) | 602,717 | ||||||
Contributed surplus | 71,819 | 82,673 | 79,139 | ||||||
Accumulated other comprehensive loss | |||||||||
associated with continuing operations | (1,230) | (13,958) | (4,593) | ||||||
Accumulated other comprehensive income | |||||||||
associated with discontinued operations | 4,159 | - | - | ||||||
Treasury stock | (1,350) | (1,845) | (1,350) | ||||||
Total shareholders' equity | $ | 1,437,766 | $ | 938,705 | $ | 1,581,129 | |||
Non-controlling interest | 60,537 | 66,837 | 60,863 | ||||||
Total equity | $ | 1,498,303 | $ | 1,005,542 | $ | 1,641,992 | |||
Total liabilities and equity | $ | 3,952,825 | $ | 3,301,076 | $ | 3,599,092 |
(In thousands of Canadian dollars, except share amounts) | Three months ended March 31, | |||||
(Unaudited) | 2014 | 2013 | ||||
(Restated) | ||||||
Sales | $ | 711,347 | $ | 689,353 | ||
Cost of goods sold | 663,412 | 649,886 | ||||
Gross margin | $ | 47,935 | $ | 39,467 | ||
Selling, general and administrative expenses | 82,660 | 77,638 | ||||
Loss from continuing operations before the following: | $ | (34,725) | $ | (38,171) | ||
Restructuring and other related costs | (21,766) | (36,958) | ||||
Change in fair value of non-designated interest rate swaps | 1,110 | 617 | ||||
Other income | 1,293 | 43,297 | ||||
Loss before interest and income taxes from continuing operations | $ | (54,088) | $ | (31,215) | ||
Interest expense and other financing costs | 114,711 | 16,103 | ||||
Loss before income taxes from continuing operations | $ | (168,799) | $ | (47,318) | ||
Income taxes | (44,193) | (16,674) | ||||
Net loss from continuing operations | $ | (124,606) | $ | (30,644) | ||
Net earnings (loss) from discontinued operations | (7,388) | 15,902 | ||||
Net loss | $ | (131,994) | $ | (14,742) | ||
Attributed to: | ||||||
Common shareholders | $ | (132,911) | $ | (14,938) | ||
Non-controlling interest | 917 | 196 | ||||
$ | (131,994) | $ | (14,742) | |||
Loss per share attributable to common shareholders | ||||||
Basic and diluted loss per share | $ | (0.95) | $ | (0.11) | ||
Basic and diluted loss per share from continuing operations | $ | (0.89) | $ | (0.22) | ||
Weighted average number of shares (millions) | 140.2 | 139.9 |
See accompanying Notes to the Unaudited Condensed Consolidated Interim Financial Statements.
(In thousands of Canadian dollars) | Three months ended March 31, | |||||
(Unaudited) | 2014 | 2013 | ||||
Net loss | $ | (131,994) | $ | (14,742) | ||
Other comprehensive income (loss) | ||||||
Items that will not be reclassified to profit or loss: | ||||||
Change in actuarial gains and losses | ||||||
(Net of tax of $0.2 million; 2013: $19.4 million) | $ | 714 | $ | 56,231 | ||
Total items that will not be reclassified to profit or loss | $ | 714 | $ | 56,231 | ||
Items that are or may be reclassified subsequently to profit or loss: | ||||||
Change in accumulated foreign currency translation adjustment | ||||||
(Net of tax of $nil million; 2013: $nil million) | $ | 345 | $ | (239) | ||
Change in unrealized gains and losses on cash flow hedges | ||||||
(Net of tax of $0.8 million; 2013: ($0.7 million)) | 2,219 | (2,115) | ||||
Total items that are or may be reclassified | ||||||
subsequently to profit or loss | $ | 2,564 | $ | (2,354) | ||
Other comprehensive income from continuing operations | $ | 3,278 | $ | 53,877 | ||
Other comprehensive income from discontinued operations(i) | ||||||
(Net of tax of $0.1 million; 2013: $2.6 million) | $ | 4,860 | $ | 8,339 | ||
Total other comprehensive income | $ | 8,138 | $ | 62,216 | ||
Comprehensive income (loss) | $ | (123,856) | 47,474 | |||
Attributed to: | ||||||
Common shareholders | $ | (125,436) | $ | 46,451 | ||
Non-controlling interest | $ | 1,580 | $ | 1,023 | ||
(i) The above amount includes ($0.8 million) (2013: $6.5 million)
relating to actuarial gains and losses that will not subsequently be re-classified to profit or loss. |
||||||||||
See accompanying Notes to the Unaudited Condensed Consolidated Financial Statements. |
Attributable to Common Shareholders | |||||||||||||||||||||||||||||
Total | Total | ||||||||||||||||||||||||||||
accumulated | accumulated | ||||||||||||||||||||||||||||
other | other | ||||||||||||||||||||||||||||
comprehensive | comprehensive | ||||||||||||||||||||||||||||
loss | income | ||||||||||||||||||||||||||||
associated with | associated with | Non- | |||||||||||||||||||||||||||
(In thousands of Canadian dollars) | Share | Retained | Contributed | continuing | assets | Treasury | controlling | Total | |||||||||||||||||||||
(Unaudited) | capital | earnings | surplus | operations | held for sale | stock | interest | equity | |||||||||||||||||||||
Balance at | |||||||||||||||||||||||||||||
December 31, 2013 | $ | 905,216 | $ | 602,717 | $ | 79,139 | $ | (4,593) | $ | - | $ | (1,350) | $ | 60,863 | $ | 1,641,992 | |||||||||||||
Net earnings (loss) | - | (132,911) | - | - | - | - | 917 | (131,994) | |||||||||||||||||||||
Transfer to held for sale | - | - | - | 799 | (799) | - | - | - | |||||||||||||||||||||
Other comprehensive | |||||||||||||||||||||||||||||
income (loss) | - | (47) | - | 2,564 | 4,958 | - | 663 | 8,138 | |||||||||||||||||||||
Dividends declared | |||||||||||||||||||||||||||||
($0.04 per share) | - | (5,613) | - | - | - | - | (1,906) | (7,519) | |||||||||||||||||||||
Stock-based compensation | |||||||||||||||||||||||||||||
expense | - | - | 8,692 | - | - | - | - | 8,692 | |||||||||||||||||||||
Exercise of stock options | 950 | - | - | - | - | - | - | 950 | |||||||||||||||||||||
Modification of stock | |||||||||||||||||||||||||||||
compensation plan | - | (5,944) | (16,012) | - | - | - | - | (21,956) | |||||||||||||||||||||
Balance at March 31, 2014 | $ | 906,166 | $ | 458,202 | $ | 71,819 | $ | (1,230) | $ | 4,159 | $ | (1,350) | $ | 60,537 | $ | 1,498,303 | |||||||||||||
Attributable to Common Shareholders | |||||||||||||||||||||||||||||
Total | Total | ||||||||||||||||||||||||||||
accumulated | accumulated | ||||||||||||||||||||||||||||
other | other | ||||||||||||||||||||||||||||
comprehensive | comprehensive | ||||||||||||||||||||||||||||
loss | income | ||||||||||||||||||||||||||||
associated with | associated with | Non- | |||||||||||||||||||||||||||
(In thousands of Canadian dollars) | Share | Retained | Contributed | continuing | assets | Treasury | controlling | Total | |||||||||||||||||||||
(Unaudited) | capital | deficit | surplus | operations | held for sale | stock | interest | equity | |||||||||||||||||||||
Balance at December 31, 2012 | $ | 902,810 | $ | (72,701) | $ | 75,913 | $ | (13,263) | $ | - | $ | (1,845) | $ | 67,085 | $ | 957,999 | |||||||||||||
Net earnings | - | (14,938) | - | - | - | - | 196 | (14,742) | |||||||||||||||||||||
Other comprehensive | |||||||||||||||||||||||||||||
income (loss) | - | 62,084 | - | (695) | - | - | 827 | 62,216 | |||||||||||||||||||||
Dividends declared | |||||||||||||||||||||||||||||
($0.04 per share) | - | (5,596) | - | - | - | - | (1,271) | (6,867) | |||||||||||||||||||||
Stock-based compensation | |||||||||||||||||||||||||||||
expense | - | - | 5,560 | - | - | - | - | 5,560 | |||||||||||||||||||||
Exercise of stock options | 176 | - | - | - | - | - | - | 176 | |||||||||||||||||||||
Other | - | - | 1,200 | - | - | - | - | 1,200 | |||||||||||||||||||||
Balance at March 31, 2013 | $ | 902,986 | $ | (31,151) | $ | 82,673 | $ | (13,958) | $ | - | $ | (1,845) | $ | 66,837 | $ | 1,005,542 |
See accompanying Notes to the Unaudited Condensed Consolidated Interim Financial Statements.
(In thousands of Canadian dollars) | Three months ended March 31, | ||||||
(Unaudited) | 2014 | 2013 | |||||
CASH (USED IN) PROVIDED BY: | |||||||
Operating activities | |||||||
Net loss | $ | (131,994) | $ | (14,742) | |||
Add (deduct) items not affecting cash: | |||||||
Change in fair value of biological assets | (40,306) | 5,278 | |||||
Depreciation and amortization | 26,643 | 33,852 | |||||
Stock-based compensation | 8,692 | 5,560 | |||||
Deferred income taxes | (44,014) | (14,738) | |||||
Income tax current | 2,431 | 4,275 | |||||
Interest expense and other financing costs | 114,885 | 16,500 | |||||
(Gain) loss on sale of property and equipment | 441 | (956) | |||||
(Gain) loss on sale of business | 468 | - | |||||
(Gain) loss on sale of assets held for sale | (1,736) | (45,388) | |||||
(Gain) loss on sale of investment property | (313) | - | |||||
(Gain) loss on acquisition | - | 985 | |||||
(Gain) loss on disposal of intangible assets | (364) | - | |||||
Change in fair value of non-designated interest rate swaps | (1,110) | (617) | |||||
Change in fair value of derivative financial instruments | 36,634 | 4,967 | |||||
Impairment of assets (net of reversals) | - | 5,134 | |||||
Increase in pension liability | 3,393 | 7,748 | |||||
Net income taxes paid | (6,853) | (7,074) | |||||
Interest paid | (18,325) | (15,431) | |||||
Change in provision for restructuring and other related costs | 13,660 | 38,105 | |||||
Other | 5,550 | (4,990) | |||||
Change in non-cash operating working capital | (36,083) | (20,857) | |||||
Cash used by operating activities | $ | (68,301) | $ | (2,389) | |||
Financing activities | |||||||
Dividends paid | $ | (5,613) | $ | (5,596) | |||
Dividends paid to non-controlling interest | (21,604) | (1,271) | |||||
Net increase in long-term debt | 299,650 | 43,525 | |||||
Exercise of stock options | 950 | 176 | |||||
Cash provided by financing activities | $ | 273,383 | $ | 36,834 | |||
Investing activities | |||||||
Additions to long-term assets | $ | (97,672) | $ | (76,055) | |||
Acquisition of business | - | (922) | |||||
Capitalization of interest expense | (2,783) | (3,250) | |||||
Adjustment to sale of business | (468) | - | |||||
Proceeds from sale of long-term assets | 2,350 | 4,491 | |||||
Proceeds from sale of assets held for sale | 6,108 | 58,067 | |||||
Cash used in investing activities | $ | (92,465) | $ | (17,669) | |||
Increase in cash and cash equivalents | $ | 112,617 | $ | 16,776 | |||
Net cash and cash equivalents, beginning of period | 502,262 | 42,171 | |||||
Net cash and cash equivalents, end of period | $ | 614,879 | $ | 58,947 | |||
Net cash and cash equivalents is comprised of: | |||||||
Attributed to continuing operations | |||||||
Cash and cash equivalents | $ | 470,783 | $ | 92,438 | |||
Bank indebtedness | - | (33,491) | |||||
Net cash and cash equivalents from continued operations, end of period | $ | 470,783 | $ | 58,947 | |||
Attributed to held for sale | |||||||
Cash and cash equivalents | $ | 144,096 | $ | - | |||
Bank indebtedness | - | - | |||||
Net cash and cash equivalents held for sale, end of period | $ | 144,096 | $ | - | |||
Net cash and cash equivalents, end of period | $ | 614,879 | $ | 58,947 | |||
See accompanying Notes to the Unaudited Condensed Consolidated Interim Financial Statements. |
Three months ended March 31, | |||||||||||
2014 | 2013 | ||||||||||
(Restated) | |||||||||||
Sales | |||||||||||
Meat Products Group | $ | 705,399 | $ | 678,066 | |||||||
Agribusiness Group(i) | 5,948 | 69,422 | |||||||||
Bakery Products Group(i) | 342,837 | 368,913 | |||||||||
Total sales | $ | 1,054,184 | $ | 1,116,401 | |||||||
Sales from discontinued operations | (342,837) | (427,048) | |||||||||
Sales from continuing operations | $ | 711,347 | $ | 689,353 | |||||||
Earnings before restructuring and other related | |||||||||||
costs and other income | |||||||||||
Meat Products Group | $ | (27,447) | $ | (10,452) | |||||||
Agribusiness Group(i) | (346) | 5,380 | |||||||||
Bakery Products Group(i) | 26,872 | 17,101 | |||||||||
Non-allocated costs | (6,932) | (14,793) | |||||||||
Total earnings before restructuring | |||||||||||
and other related costs and other income | $ | (7,853) | $ | (2,764) | |||||||
Earnings before restructuring | |||||||||||
and other related costs and other income | |||||||||||
from discontinued operations | (26,872) | (35,407) | |||||||||
Earnings before restructuring | |||||||||||
and other related costs and other income | |||||||||||
from continuing operations | $ | (34,725) | $ | (38,171) | |||||||
Capital expenditures | |||||||||||
Meat Products Group | $ | 67,814 | $ | 66,144 | |||||||
Agribusiness Group(i) | 823 | 2,444 | |||||||||
Bakery Products Group(i) | 10,200 | 7,467 | |||||||||
$ | 78,837 | $ | 76,055 | ||||||||
Depreciation and amortization | |||||||||||
Meat Products Group | $ | 19,981 | $ | 15,568 | |||||||
Agribusiness Group(i) | 1,520 | 4,156 | |||||||||
Bakery Products Group(i) | 5,142 | 14,128 | |||||||||
$ | 26,643 | $ | 33,852 |
(i) | The prior year results of the animal by-product recycling operations, Fresh pasta and Sauces businesses and Canada Bread were included in the comparative results of the Agribusiness Group and Bakery Products respectively. |
As at March 31, | As at March 31, | As at December 31, | |||||||
2014 | 2013(i) | 2013 | |||||||
Total assets | |||||||||
Meat Products Group | $ | 1,953,203 | $ | 1,695,950 | $ | 1,823,866 | |||
Agribusiness Group(i) | 237,537 | 274,205 | 195,537 | ||||||
Bakery Products Group | 1,000,112 | 992,721 | 1,169,669 | ||||||
Non-allocated assets(i) | 761,973 | 338,200 | 410,020 | ||||||
$ | 3,952,825 | $ | 3,301,076 | $ | 3,599,092 | ||||
Goodwill | |||||||||
Meat Products Group | $ | 428,236 | $ | 442,925 | $ | 428,236 | |||
Agribusiness Group(i) | - | 13,845 | - | ||||||
Bakery Products Group | - | 297,976 | 292,562 | ||||||
$ | 428,236 | $ | 754,746 | $ | 720,798 |
(i) | The prior year results as at March 31, 2013 of the Agribusiness Group and Bakery Products Group include assets and goodwill from the animal by-product recycling operations, Fresh Pasta and sauces, and Canada Bread businesses, respectively. |
SOURCE
Investor Contact: Nick Boland,
VP Investor Relations: 416-926-2005
Media Contact: 416-926-2020