TORONTO, April 30, 2015 /CNW/ – Maple Leaf Foods Inc. (TSX: MFI) today
reported its financial results for the first quarter, March 31, 2015.
-
Adjusted Operating Earnings(1)(2) for the first quarter was $10.4 million, an improvement of $40.3
million, compared to a loss of $29.9 million last year - Adjusted EBITDA(2)(3) margin improved to 4.7% from (1.1%) last year
- Adjusted Earnings per Share(2)(4) for the quarter was $0.05 (loss of $0.24 last year)
-
Net loss from continuing operations for the first quarter was $2.8
million (loss of $124.6 million last year) -
The final production run at the last of the Company’s closing legacy
facilities occurs today, marking the end of the duplicative supply
chain network
“We had a very strong quarter, returning to profitability in adjusted
earnings per share,” said Michael H. McCain, President and CEO. “We
recorded a $40 million improvement in our adjusted operating earnings
year over year, restored our margins and made excellent progress in
recovering our prepared meats volume from last year’s unprecedented
environment. We were able to reduce our operating costs as we come to
the final stage of our network transition, and today, with the last
production run at our last legacy plant, we are bringing an end to our
duplicative supply chain. Our final phase is to bring our new state of
the art facilities to full operational effectiveness. All of this keeps
us on track to reach our strategic financial target.”
Financial Overview
Maple Leaf Foods Inc. (“the Company”) sales from continuing operations
of $780.2 million for the first quarter was an increase of 9.7% from
last year, or 8.5% after adjusting for the impact of foreign exchange.
The increase was primarily a result of higher pricing in the Meat
Products Group, partially offset by lower volumes.
Adjusted Operating Earnings for the first quarter was $10.4 million
compared to a loss of $29.9 million last year. The Meat Products Group
benefited from price increases in the prepared meats business and
improved export margins in the fresh pork business, which were
partially offset by lower volumes in the prepared meats business.
Adjusted Earnings per Share was $0.05 in the first quarter of 2015
compared to a loss of $0.24 last year.
Net loss from continuing operations for the first quarter was $2.8
million (loss of $0.02 per basic share attributable to common
shareholders(5)) compared to a loss of $124.6 million (loss of $0.89 per share) last
year. This included $10.8 million ($0.06 per share) of pre-tax expenses
related to restructuring and other related costs (2014: $21.8 million,
or $0.12 per share). The decrease was primarily due to non-recurring
finance costs that were incurred last year in relation to the repayment
of the Company’s outstanding debt and lower selling, general and
administrative costs.
Several items are excluded from the discussions of underlying earnings
performance as they are not representative of ongoing operational
activities. Refer to the section entitled Reconciliation of Non-IFRS
Financial Measures at the end of this news release for a description
and reconciliation of all non-IFRS financial measures.
Business Segment Review
Following is a summary of sales by business segment:
(Unaudited) | First Quarter | |||||
($ thousands) | 2015 | 2014 | ||||
Meat Products Group | $ | 776,409 | $ | 705,399 | ||
Agribusiness Group | 3,839 | 5,948 | ||||
Total Sales(2) | $ | 780,248 | $ | 711,347 |
The following table summarizes Adjusted Operating Earnings by business
segment:
(Unaudited) | First Quarter | |||||
($ thousands) | 2015 | 2014 | ||||
Meat Products Group | $ | 7,878 | $ | (27,447) | ||
Agribusiness Group | 2,532 | (346) | ||||
Protein Group | $ | 10,410 | $ | (27,793) | ||
Non-Allocated Costs in Adjusted Operating Earnings(6) | — | (2,135) | ||||
Adjusted Operating Earnings(2) | $ | 10,410 | $ | (29,928) |
Meat Products Group
Includes value-added prepared meats, lunch kits and snacks, and fresh
pork and poultry products sold under leading Canadian brands such as
Maple Leaf®, Schneiders® and many leading regional brands.
Sales in the Meat Products Group for the first quarter increased 10.1%
to $776.4 million, or 8.8% after adjusting for the weaker Canadian
dollar. The improvement was driven by price increases implemented in
the prepared meats business during the second quarter of 2014 in
response to higher raw material costs, increased volumes in the fresh
pork business and improved sales mix in the fresh poultry business.
These were partially offset by lower volumes in the prepared meats
business.
Adjusted Operating Earnings for the first quarter increased to $7.9
million compared to a loss of $27.4 million last year, primarily as a
result of improved margins. The prepared meats business benefited from
price increases and a reduction in transitional costs, partially offset
by lower volumes. Transitional costs primarily related to commissioning
activities at the new prepared meats facility in Hamilton, the largest
in the Company’s network, and duplicative overhead costs from legacy
plants scheduled to be closed. The reduction in transitional costs was
mainly attributable to a decrease in duplicative overhead costs
resulting from the closure of three legacy facilities in 2014 and the
largest legacy facility in the Company’s network on February 27, 2015.
Earnings in the fresh pork business improved due to increased export
margins, primarily in Japan, and growth in the Canadian retail market,
which more than offset a decline in pork processing margins. Earnings
in the fresh poultry business increased as a result of improvements in
poultry processing margins and operating efficiencies.
Agribusiness Group
Includes Canadian hog production operations that primarily supply the
Meat Products Group with livestock as well as toll feed sales.
Agribusiness Group sales for the first quarter declined to $3.8 million
compared to $5.9 million last year, due to lower toll feed sales.
Adjusted Operating Earnings in the first quarter increased to $2.5
million compared to a loss of $0.3 million last year as the hog
production operations benefited from hog prices, net of hedging
activities, which was offset by additional costs incurred relating to
the prevention of the Porcine Epidemic Diarrhea (“PED”) virus.
Other Matters
On April 29, 2015, the Company declared a dividend of $0.08 per share
payable June 30, 2015, to shareholders of record at the close of
business on June 5, 2015. Unless indicated otherwise by the Company in
writing on or before the time the dividend is paid, the dividend will
be considered an Eligible Dividend for the purposes of the “Enhanced
Dividend Tax Credit System”.
On March 23, 2015, the Company announced that the Toronto Stock Exchange
(“TSX”) accepted a notice filed by the Company to establish a normal
course issuer bid (“NCIB”) program. The NCIB program commenced on March
25, 2015 and will terminate on March 24, 2016, or on such earlier date
as the Company may complete its purchases pursuant to a Notice of
Intention filed with the TSX. Under the NCIB program, the Company is
authorized to purchase up to 8.65 million of its common shares by way
of normal course purchases effected through the facilities of the TSX
and/or alternative Canadian trading platforms. Common shares purchased
by the Company will be cancelled.
An investor presentation related to the Company’s first quarter
financial results is available at www.mapleleaffoods.com and can be found under Investor Material on the Investors page. A conference call will be held at 2:30 p.m. EDT on April 30,
2015, to review Maple Leaf Foods’ first quarter financial results. To
participate in the call, please dial 416-340-2216 or 800-355-4959. For
those unable to participate, playback will be made available an hour
after the event at 905-694-9451 / 800-408-3053 (Passcode 6172077).
A webcast presentation of the first quarter financial results will also
be available at:
http://www.media-server.com/m/p/q3ogwuwe/lan/en
The Company’s full financial statements and related Management’s
Discussion and Analysis are available on the Company’s website.
Reconciliation of Non-IFRS Financial Measures
The Company uses the following non-IFRS measures: Adjusted Operating
Earnings and Adjusted Earnings per Share. 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 net earnings
(loss) before income taxes from continuing operations adjusted for
items that are not considered representative of ongoing 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 (loss) from continuing operations as
reported under IFRS in the unaudited consolidated interim statements of
earnings (loss) 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 ongoing operations of the Company.
Three months ended March 31, 2015 | ||||||||||||
($ thousands) (Unaudited) |
Meat Products Group |
Agribusiness Group |
Non-allocated costs |
Consolidated | ||||||||
Net earnings (loss) from continuing operations | $ | (2,802) | ||||||||||
Income taxes | (931) | |||||||||||
Earnings (loss) before income taxes from continuing operations | $ | (3,733) | ||||||||||
Interest expense and other financing costs | 1,224 | |||||||||||
Other (income) expense | 193 | 3 | 5,641 | 5,837 | ||||||||
Restructuring and other related costs | 8,530 | — | 2,315 | 10,845 | ||||||||
Earnings (loss) from continuing operations | $ | 7,878 | $ | 2,532 | $ | 3,763 | $ | 14,173 | ||||
Decrease (increase) in fair value of biological assets(7) | — | — | 7,283 | 7,283 | ||||||||
Unrealized (gain) loss on futures contracts(7) | — | — | (11,046) | (11,046) | ||||||||
Adjusted Operating Earnings | $ | 7,878 | $ | 2,532 | $ | — | $ | 10,410 | ||||
Three months ended March 31, 2014 | ||||||||||||
($ thousands) (Unaudited) |
Meat Products Group |
Agribusiness Group |
Non-allocated 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(7) | — | — | (40,306) | (40,306) | ||||||||
Unrealized (gains) loss on futures contracts(7) | — | — | 36,503 | 36,503 | ||||||||
Modification of long-term incentive plan(8) | — | — | 8,600 | 8,600 | ||||||||
Adjusted Operating Earnings(2) | $ | (27,447) | $ | (346) | $ | (2,135) | $ | (29,928) |
Adjusted Earnings per Share
Adjusted Earnings per Share, a non-IFRS measure, is used by Management
to evaluate ongoing financial operating results. It is defined as basic
earnings (loss) per share from continuing operations attributable to
common shareholders, and is adjusted on the same basis as Adjusted
Operating Earnings. The table below provides a reconciliation of basic
earnings (loss) per share from continuing operations as reported under
IFRS in the unaudited consolidated interim statements of earnings
(loss) 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 ongoing operations of the Company.
($ per Share) | Three months ended March 31, | ||||
(Unaudited) | 2015 | 2014 | |||
Basic earnings (loss) per share from continuing operations | $ | (0.02) | $ | (0.89) | |
Restructuring and other related costs(9) | 0.06 | 0.12 | |||
Items included in other income not considered representative of ongoing operations(10) |
0.03 | 0.00 | |||
Change in the fair value of non-designated interest rate swaps(11) | ━ | (0.01) | |||
Change in the fair value of unrealized (gain) loss on futures contracts(11) | (0.06) | 0.19 | |||
Change in the fair value of biological assets(11) | 0.04 | (0.21) | |||
Other financing costs(12) | — | 0.51 | |||
Modification impact to long-term incentive plan(8) | — | 0.05 | |||
Adjusted Earnings per Share(13) | $ | 0.05 | $ | (0.24) |
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 anticipated benefits,
timing, actions, costs, and investments associated with the Value
Creation Plan; expectations regarding the use of derivatives, futures
and options; expectations regarding improving efficiencies; the
expected use of cash balances; source of funds for ongoing business
requirements; capital investments and debt repayment; expectations
regarding acquisitions and divestitures; the timing of old plant
closures and job losses; LEED certification; expectations regarding the
adoption of new accounting standards and the impact of such adoption on
financial position; expectations regarding sufficiency of the allowance
for uncollectible accounts; and expectations regarding pension plan
performance and future pension plan liabilities and contributions.
Words such as “expect”, “anticipate”, “intend”, “may”, “will”, “plan”,
“believe”, “seek”, “estimate”, and variations of such words and similar
expressions are intended to identify such forward-looking information.
These statements are not guarantees of future performance and involve
assumptions and risks and uncertainties that are difficult to predict.
In addition, these statements and expectations concerning the
performance of the Company’s business in general are based on a number
of factors and assumptions including, but not limited to: the condition
of the Canadian, U.S., and Japanese economies; the rate of exchange of
the Canadian dollar to the U.S. dollar, and the Japanese yen; the
availability and prices of raw materials, energy and supplies; product
pricing; the availability of insurance; the competitive environment and
related market conditions; improvement of operating efficiencies
whether as a result of the Value Creation Plan or otherwise; continued
access to capital; the cost of compliance with environmental and health
standards; no adverse results from ongoing litigation; no unexpected
actions of domestic and foreign governments; and the general assumption
that none of the risks identified below or elsewhere in this document
will materialize. All of these assumptions have been derived from
information currently available to the Company, including information
obtained by the Company from third-party sources. These assumptions may
prove to be incorrect in whole or in part. In addition, actual results
may differ materially from those expressed, implied, or forecasted in
such forward-looking information, which reflect the Company’s
expectations only as of the date hereof.
Factors that could cause actual results or outcomes to differ materially
from the results expressed, implied, or forecasted by forward-looking
information include, among other things:
-
risks associated with the Company focusing solely on the protein
business; -
risks related to the Company’s decisions regarding any potential return
of capital to shareholders; -
risks associated with implementing and executing the Value Creation
Plan; - risks associated with the availability of capital;
-
risks associated with changes in the Company’s information 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 in
interest 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, the potential for work stoppages due to non-renewal of
collective agreements, and recruiting and retaining qualified
personnel; - 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 Management Discussion and
Analysis for the fiscal year ended December 31, 2014, which is
available on SEDAR at www.sedar.com. The reader should review such section in detail. Some of the
forward-looking information may be considered to be financial outlooks
for purposes of applicable securities legislation including, but not
limited to, statements concerning future EBITDA margins; capital
expenditures; cash costs; and non-cash restructuring charges. These
financial outlooks are presented to allow the Company to benchmark the
results of the Value Creation Plan. These financial outlooks may not be
appropriate for other purposes and readers should not assume they will
be achieved. The Company does not intend to, and the Company disclaims
any obligation to, update any forward-looking information, whether
written or oral, or whether as a result of new information, future
events or otherwise, except as required by law. Additional information
concerning the Company, including the Company’s Annual Information Form
and Management’s Discussion and Analysis for the fiscal year ended
December 31, 2014 is available on SEDAR at www.sedar.com. Maple Leaf Foods Inc. is a leading Canadian consumer protein company.
Headquartered in Mississauga, Canada, the Company employs approximately
12,000 people at its operations in Canada, the U.S., and Asia.
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. -
2014 figures exclude the results of the Bakery Products Group. The
Bakery Products Group results are reported as discontinued operations
as disclosed in Note 22 of the Company’s 2015 first quarter unaudited
condensed consolidated interim financial statements. -
Adjusted EBITDA is calculated as earnings from continuing operations
before interest and income taxes plus depreciation and intangible asset
amortization, adjusted for items that are not considered representative
of ongoing 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 Non-IFRS Financial Measures in the
Company’s Management Discussion and Analysis for the first quarter of
2015. -
Adjusted Earnings per Share, a non-IFRS measure, is used by Management
to evaluate ongoing financial operating results. It is defined as basic
earnings per share from continuing operations attributable to common
shareholders, and is adjusted on the same basis as Adjusted Operating
Earnings. Please refer to the section entitled Reconciliation of
Non-IFRS Financial Measures in this news release. -
Unless otherwise stated, all per share amounts are presented as per
basic share attributable to common shareholders. -
Non-allocated costs are comprised of 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. -
Regarding biological assets, please refer to Note 7 of the Company’s
2015 first quarter unaudited condensed consolidated interim financial
statements. Unrealized gains/losses on futures contracts and settlement
of long-term incentive plan are reported within cost of sales and
selling, general and administrative expenses respectively in the
Company’s 2015 first quarter unaudited condensed consolidated interim
financial statements. -
Relates to an $8.6 million modification of long-term incentive
compensation plan as a result of the costs being fixed and payments
accelerated, which was a decision made conditional on the sale of
Canada Bread, and is therefore not considered representative of ongoing
operational activities of the business. -
Includes per share impact of restructuring and other related costs, net
of tax. -
Includes gains/losses associated with non-operational activities,
including gains/losses related to discontinued operations, assets held
for sale, and hedge ineffectiveness recognized in earnings, all net of
tax. -
Includes per share impact of the change in fair value of non-designated
interest rate swaps, unrealized and realized (gains) losses on futures
contracts and the change in fair value of biological assets, net of
tax. In 2015, the change in fair value of non-designated interest rate
swaps is presented as other income. -
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. - May not add due to rounding.
Condensed Consolidated Interim Financial Statements | |||||||||||
(Expressed in Canadian dollars) | |||||||||||
(Unaudited) | |||||||||||
MAPLE LEAF FOODS INC. | |||||||||||
Three months ended March 31, 2015 and 2014 | |||||||||||
Consolidated Balance Sheets | |||||||||||
(In thousands of Canadian dollars) | As at March 31, | As at March 31, | As at December 31, | ||||||||
2015 | 2014 | 2014 | |||||||||
(Unaudited) | (Unaudited) | ||||||||||
ASSETS | |||||||||||
Current assets | |||||||||||
Cash and cash equivalents | $ | 427,100 | $ | 470,783 | $ | 496,328 | |||||
Accounts receivable | 65,953 | 69,594 | 60,396 | ||||||||
Notes receivable | 108,833 | 109,154 | 110,209 | ||||||||
Inventories | 293,868 | 283,273 | 270,401 | ||||||||
Biological assets | 101,894 | 140,428 | 105,743 | ||||||||
Income and other taxes recoverable | — | 36,376 | — | ||||||||
Prepaid expenses and other assets | 32,368 | 41,818 | 20,157 | ||||||||
Assets held for sale | 1,107 | 1,000,946 | 1,107 | ||||||||
$ | 1,031,123 | $ | 2,152,372 | $ | 1,064,341 | ||||||
Property and equipment | 1,039,147 | 994,268 | 1,042,506 | ||||||||
Investment property | 7,388 | 3,221 | 3,312 | ||||||||
Employee benefits | 81,243 | 114,793 | 88,162 | ||||||||
Other long-term assets | 13,567 | 8,273 | 9,881 | ||||||||
Deferred tax asset | 72,531 | 66,399 | 74,986 | ||||||||
Goodwill | 428,236 | 428,236 | 428,236 | ||||||||
Intangible assets | 155,613 | 185,263 | 165,066 | ||||||||
Total assets | $ | 2,828,848 | $ | 3,952,825 | $ | 2,876,490 | |||||
LIABILITIES AND EQUITY | |||||||||||
Current liabilities | |||||||||||
Accounts payable and accruals | $ | 261,298 | $ | 435,628 | $ | 275,249 | |||||
Provisions | 46,010 | 40,100 | 60,443 | ||||||||
Current portion of long-term debt | 592 | 1,334,965 | 472 | ||||||||
Income taxes payable | 16,986 | — | 26,614 | ||||||||
Other current liabilities | 28,949 | 128,399 | 24,383 | ||||||||
Liabilities associated with assets held for sale | — | 311,400 | — | ||||||||
$ | 353,835 | $ | 2,250,492 | $ | 387,161 | ||||||
Long-term debt | 10,012 | 6,232 | 10,017 | ||||||||
Employee benefits | 177,184 | 140,051 | 196,482 | ||||||||
Provisions | 19,596 | 30,994 | 17,435 | ||||||||
Other long-term liabilities | 24,054 | 26,753 | 20,899 | ||||||||
Total liabilities | $ | 584,681 | $ | 2,454,522 | $ | 631,994 | |||||
Shareholders’ equity | |||||||||||
Share capital | $ | 937,883 | $ | 906,166 | $ | 936,479 | |||||
Retained earnings | 1,229,222 | 458,202 | 1,228,815 | ||||||||
Contributed surplus | 81,332 | 71,819 | 79,652 | ||||||||
Accumulated other comprehensive loss associated with continuing operations |
(4,046) | (1,230) | (226) | ||||||||
Accumulated other comprehensive income associated with discontinued operations |
— | 4,159 | — | ||||||||
Treasury stock | (224) | (1,350) | (224) | ||||||||
Total shareholders’ equity | $ | 2,244,167 | $ | 1,437,766 | $ | 2,244,496 | |||||
Non-controlling interest | — | 60,537 | — | ||||||||
Total equity | $ | 2,244,167 | $ | 1,498,303 | $ | 2,244,496 | |||||
Total liabilities and equity | $ | 2,828,848 | $ | 3,952,825 | $ | 2,876,490 |
Consolidated Statements of Net Earnings (Loss) | |||||||||||
(In thousands of Canadian dollars, except share amounts) | Three months ended March 31, | ||||||||||
(Unaudited) | 2015 | 2014 | |||||||||
Sales | $ | 780,248 | $ | 711,347 | |||||||
Cost of goods sold | 691,026 | 663,412 | |||||||||
Gross margin | $ | 89,222 | $ | 47,935 | |||||||
Selling, general and administrative expenses | 75,049 | 82,660 | |||||||||
Earnings (loss) from continuing operations before the following: | $ | 14,173 | $ | (34,725) | |||||||
Restructuring and other related costs | (10,845) | (21,766) | |||||||||
Change in fair value of non-designated interest rate swaps | ━ | 1,110 | |||||||||
Other income (expense) | (5,837) | 1,293 | |||||||||
Earnings (loss) before interest and income taxes from continuing operations |
$ | (2,509) | $ | (54,088) | |||||||
Interest expense and other financing costs | 1,224 | 114,711 | |||||||||
Earnings (loss) before income taxes from continuing operations | $ | (3,733) | $ | (168,799) | |||||||
Income taxes | (931) | (44,193) | |||||||||
Earnings (loss) from continuing operations | $ | (2,802) | $ | (124,606) | |||||||
Earnings (loss) from discontinued operations | (59) | (7,388) | |||||||||
Net earnings (loss) | $ | (2,861) | $ | (131,994) | |||||||
Attributed to: | |||||||||||
Common shareholders | $ | (2,861) | $ | (132,911) | |||||||
Non-controlling interest | — | 917 | |||||||||
$ | (2,861) | $ | (131,994) | ||||||||
Earnings (loss) per share attributable to common shareholders: | |||||||||||
Basic and diluted earnings (loss) per share | $ | (0.02) | $ | (0.95) | |||||||
Basic and diluted earnings (loss) per share from continuing operations | $ | (0.02) | $ | (0.89) | |||||||
Weighted average number of shares (millions) | 143.0 | 140.2 |
Consolidated Statements of Other Comprehensive Income (Loss) | ||||||||||||
(In thousands of Canadian dollars) | Three months ended March 31, | |||||||||||
(Unaudited) | 2015 | 2014 | ||||||||||
Net earnings (loss) | $ | (2,861) | $ | (131,994) | ||||||||
Other comprehensive income (loss) | ||||||||||||
Items that will not be reclassified to profit or loss: | ||||||||||||
Actuarial gains and losses | ||||||||||||
(Net of tax of $5.1 million; 2014: $0.2 million) | $ | 14,707 | $ | 714 | ||||||||
Total items that will not be reclassified to profit or loss | $ | 14,707 | $ | 714 | ||||||||
Items that are or may be reclassified subsequently to profit or loss: | ||||||||||||
Change in accumulated foreign currency translation adjustment | ||||||||||||
(Net of tax of $0.0 million; 2014:$0.0 million) | $ | 1,082 | $ | 345 | ||||||||
Change in unrealized gains and losses on cash flow hedges | ||||||||||||
(Net of tax of $1.7 million; 2014: $0.8 million) | (4,902) | 2,219 | ||||||||||
Total items that are or may be reclassified subsequently to profit or loss |
$ | (3,820) | $ | 2,564 | ||||||||
Other comprehensive income (loss) from continuing operations | $ | 10,887 | $ | 3,278 | ||||||||
Other comprehensive income (loss) from discontinued operations(i) | ||||||||||||
(2014: Net of tax of $0.1 million) | — | 4,860 | ||||||||||
Total other comprehensive income (loss) | $ | 10,887 | $ | 8,138 | ||||||||
Comprehensive income (loss) | $ | 8,026 | $ | (123,856) | ||||||||
Attributed to: | ||||||||||||
Common shareholders | $ | 8,026 | $ | (125,436) | ||||||||
Non-controlling interest | $ | — | $ | 1,580 |
(i) |
The above amount includes $0.0 million for the three months ended March 31, 2015 (2014: $0.8 million) relating to actuarial gains and losses that will not subsequently be re-classified to profit or loss. |
Consolidated Statements of Changes in Total Equity | ||||||||||||||||||||||||
Attributable to Common Shareholders | ||||||||||||||||||||||||
Total | Total | |||||||||||||||||||||||
accumulated | accumulated | |||||||||||||||||||||||
other | other | |||||||||||||||||||||||
comprehensive | comprehensive | |||||||||||||||||||||||
income (loss) | income (loss) | |||||||||||||||||||||||
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, 2014 | $ | 936,479 | $ | 1,228,815 | $ | 79,652 | $ | (226) | $ | — | $ | (224) | — | $ | 2,244,496 | |||||||||
Net earnings (loss) | — | (2,861) | — | — | — | — | — | (2,861) | ||||||||||||||||
Other comprehensive income (loss) | — | 14,707 | — | (3,820) | — | — | — | 10,887 | ||||||||||||||||
Dividends declared ($0.08 per share) | — | (11,439) | — | — | — | — | — | (11,439) | ||||||||||||||||
Stock-based compensation expense | — | — | 1,680 | — | — | — | — | 1,680 | ||||||||||||||||
Exercise of stock options | 1,404 | — | — | — | — | — | — | 1,404 | ||||||||||||||||
Balance at March 31, 2015 | $ | 937,883 | $ | 1,229,222 | $ | 81,332 | $ | (4,046) | $ | — | $ | (224) | $ | — | $ | 2,244,167 | ||||||||
Attributable to Common Shareholders | ||||||||||||||||||||||||
Total | Total | |||||||||||||||||||||||
accumulated | accumulated | |||||||||||||||||||||||
other | other | |||||||||||||||||||||||
comprehensive | comprehensive | |||||||||||||||||||||||
income (loss) | income (loss) | |||||||||||||||||||||||
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 |
Consolidated Statements of Cash Flow | |||||||||
(In thousands of Canadian dollars) | Three months ended March 31, | ||||||||
(Unaudited) | 2015 | 2014 | |||||||
CASH (USED IN) PROVIDED BY: | |||||||||
Operating activities | |||||||||
Net earnings (loss) | $ | (2,861) | $ | (131,994) | |||||
Add (deduct) items not affecting cash: | |||||||||
Change in fair value of biological assets | 7,283 | (40,306) | |||||||
Depreciation and amortization | 31,766 | 26,643 | |||||||
Stock-based compensation | 1,680 | 8,692 | |||||||
Deferred income taxes | (979) | (44,014) | |||||||
Income tax current | 48 | 2,431 | |||||||
Interest expense and other financing costs | 1,244 | 114,885 | |||||||
Loss (gain) on sale of long-term assets | (593) | (236) | |||||||
Loss (gain) on sale of business | — | 468 | |||||||
Loss (gain) on sale of assets held for sale | — | (1,736) | |||||||
Change in fair value of non-designated interest rate swaps | (1,569) | (1,110) | |||||||
Change in fair value of derivative financial instruments | (11,371) | 36,634 | |||||||
Impairment of assets (net of reversals) | 979 | — | |||||||
Increase in pension liability | 6,640 | 3,393 | |||||||
Net income taxes paid | (10,841) | (6,853) | |||||||
Interest paid | (855) | (18,325) | |||||||
Change in provision for restructuring and other related costs | (5,303) | 13,660 | |||||||
Other | 187 | 5,550 | |||||||
Change in non-cash operating working capital | (49,991) | (36,083) | |||||||
Cash (used in) provided by operating activities | $ | (34,556) | $ | (68,301) | |||||
Financing activities | |||||||||
Dividends paid | $ | (11,439) | $ | (5,613) | |||||
Dividends paid to non-controlling interest | — | (21,604) | |||||||
Net increase (decrease) in long-term debt | — | 299,650 | |||||||
Exercise of stock options | 1,404 | 950 | |||||||
Payment of financing fees | (227) | — | |||||||
Cash (used in) provided by financing activities | $ | (10,262) | $ | 273,383 | |||||
Investing activities | |||||||||
Additions to long-term assets | $ | (26,433) | $ | (97,672) | |||||
Capitalization of interest expense | — | (2,783) | |||||||
Adjustment to sale of business | — | (468) | |||||||
Proceeds from sale of long-term assets | 2,023 | 2,350 | |||||||
Proceeds from sale of assets held for sale | — | 6,108 | |||||||
Cash (used in) provided by investing activities | $ | (24,410) | $ | (92,465) | |||||
(Decrease) increase in cash and cash equivalents | $ | (69,228) | $ | 112,617 | |||||
Net cash and cash equivalents, beginning of period | 496,328 | 502,262 | |||||||
Net cash and cash equivalents, end of period | $ | 427,100 | $ | 614,879 | |||||
Net cash and cash equivalents is comprised of: | |||||||||
Cash and cash equivalents attributed to continuing operations | $ | 427,100 | $ | 470,783 | |||||
Cash and cash equivalents attributed to held for sale | — | 144,096 | |||||||
Net cash and cash equivalents, end of period | $ | 427,100 | $ | 614,879 |
Segmented Financial Information | |||||||||
Three months ended March 31, | |||||||||
2015 | 2014 | ||||||||
Sales | |||||||||
Meat Products Group | $ | 776,409 | $ | 705,399 | |||||
Agribusiness Group | 3,839 | 5,948 | |||||||
Bakery Products Group(i) | — | 342,837 | |||||||
Total sales | $ | 780,248 | $ | 1,054,184 | |||||
Sales from discontinued operations | — | (342,837) | |||||||
Sales from continuing operations | $ | 780,248 | $ | 711,347 | |||||
Earnings (loss) before restructuring and other related costs and other income |
|||||||||
Meat Products Group | $ | 7,878 | $ | (27,447) | |||||
Agribusiness Group | 2,532 | (346) | |||||||
Bakery Products Group(i) | — | 26,872 | |||||||
Non-allocated costs | 3,763 | (6,932) | |||||||
Total earnings (loss) before restructuring and other related costs and other income |
$ | 14,173 | $ | (7,853) | |||||
Earnings (loss) before restructuring and other related costs and other income from discontinued operations |
— | (26,872) | |||||||
Earnings (loss) before restructuring and other related costs and other income from continuing operations |
$ | 14,173 | $ | (34,725) | |||||
Capital expenditures | |||||||||
Meat Products Group | $ | 23,873 | $ | 67,814 | |||||
Agribusiness Group | 1,994 | 823 | |||||||
Bakery Products Group(i) | — | 10,200 | |||||||
$ | 25,867 | $ | 78,837 | ||||||
Depreciation and amortization | |||||||||
Meat Products Group | $ | 25,189 | $ | 19,981 | |||||
Agribusiness Group | 1,452 | 1,520 | |||||||
Non-allocated costs(ii) | 5,125 | — | |||||||
Bakery Products Group(i) | — | 5,142 | |||||||
$ | 31,766 | $ | 26,643 |
(i) |
The prior year results of Canada Bread were included in the comparative results of the Bakery Products Group. |
(ii) | Includes depreciation on assets used to service divested business. |
As at March 31, 2015 | As at March 31, 2014 | As at December 31, 2014 | ||||||||||||
Total assets | ||||||||||||||
Meat Products Group | $ | 1,863,932 | $ | 1,953,203 | $ | 1,965,280 | ||||||||
Agribusiness Group | 193,028 | 237,537 | 211,516 | |||||||||||
Bakery Products Group(i) | — | 1,000,112 | — | |||||||||||
Non-allocated assets | 771,888 | 761,973 | 699,694 | |||||||||||
$ | 2,828,848 | $ | 3,952,825 | $ | 2,876,490 | |||||||||
Goodwill | ||||||||||||||
Meat Products Group | $ | 428,236 | $ | 428,236 | $ | 428,236 | ||||||||
$ | 428,236 | $ | 428,236 | $ | 428,236 |
(i) |
The prior year results as at March 31, 2014 of the Bakery Products Group include assets and goodwill from the Canada Bread business. |
SOURCE Maple Leaf Foods Inc.
Investor Contact: Nick Boland
VP Investor Relations: 905-285-5898
Media Contact: 888-995-5030