TORONTO, Ontario – Oct. 27, 2011, 2011 (Canada NewsWire via COMTEX) —
TSX: MFI
www.mapleleaffoods.com
Maple Leaf Foods Inc. (TSX:
MFI) today reported its financial results for the third quarter ended
September 30, 2011. Third quarter highlights include:
-- Adjusted Operating Earnings((1)) increased 17% to $73.3
million.
-- Net earnings increased to $43.0 million from a loss of $19.9
million.
-- Adjusted Earnings per Share((2)) increased to $0.34, including
$0.07 per share related to a tax adjustment associated with a
prior acquisition, from $0.22 last year.
-- Value creation initiatives on track and contributing to margin
growth.
“Our third quarter reflects strong earnings growth in our protein
business, and we are particularly pleased with the performance of our
consumer-facing prepared meats operations,” said Michael H. McCain,
President and CEO. “We are managing high commodity costs through
pricing, cost reduction and continuing to drive higher value product
innovation. Our strategic value creation initiatives are also
contributing to results and we are on track to deliver sustained
earnings growth.”
(1): Adjusted Operating Earnings measures are defined as earnings from
operations before restructuring and other related costs and associated
gains, other income and the impact of the change in fair value of
non-designated interest rate swaps, unrealized (gains) losses on
commodity futures contracts and the change in fair value of biological
assets.
(2): Adjusted Earnings per Share (“Adjusted EPS”) measures are defined
as basic earnings per share adjusted for the impact of restructuring
and other related costs and associated gains, the impact of the change
in fair value of non-designated interest rate swaps, unrealized (gains)
losses on commodity futures contracts, and the change in fair value of
biological assets, net of tax and non-controlling interest.
Please refer to the section entitled Reconciliation of Non-IFRS
Financial Measures at the end of this news release.
Financial Overview
Sales for the third quarter of 2011 decreased 2% to $1,262.2 million
compared to $1,293.2 million last year. After adjusting for the impacts
of divestitures and a stronger Canadian dollar, sales increased by 6%,
primarily as a result of higher selling prices.
Adjusted Operating Earnings increased to $73.3 million compared to $62.7
million last year, driven by stronger performance in the Protein Group.
Adjusted Earnings per Share increased to $0.34, including $9.8 million
($0.07 per share) related to a tax adjustment associated with a prior
acquisition, compared to $0.22 last year.
Net earnings increased to $43.0 million ($0.29 basic earnings per share)
in the third quarter compared to a net loss of $19.9 million ($0.16
basic loss per share) last year. Net earnings included $4.9 million
($0.03 per share) of pre-tax costs related to restructuring activities
(2010: $50.0 million).
Several items are excluded from the discussions of underlying earnings
performance during the quarter. These include restructuring charges,
mark-to-market adjustments on hedging contracts that are not designated
in a hedging relationship and mark-to-market adjustments related to
biological assets. Restructuring charges are excluded as they do not
reflect the continuing earnings performance of the business.
Mark-to-market adjustments do not reflect the economic effect of the
hedging transactions and are excluded from earnings discussions until
the underlying asset is sold or transferred. Refer to the section
entitled Reconciliation of Non-IFRS Financial Measures in this news
release.
Business Segment Review
Following is a summary of sales by business segment:
(Unaudited) Third Quarter Year-to-Date ($ thousands) 2011 2010 2011 2010 Meat Products Group $777,194 $834,655 $2,257,647 $2,418,570 Agribusiness Group 67,934 47,468 196,145 143,333 Protein Group $845,128 $882,123 $2,453,792 $2,561,903 Bakery Products Group 417,025 411,088 1,194,504 1,194,181 Sales $1,262,153 $1,293,211 $3,648,296 $3,756,084
The following table summarizes Adjusted Operating Earnings by business
segment:
(Unaudited) Third Quarter Year-to-Date ($ thousands) 2011 2010 2011 2010 Meat Products Group $20,766 $19,546 $68,515 $43,574 Agribusiness Group 25,440 15,644 67,151 35,609 Protein Group $46,206 $35,190 $135,666 $79,183 Bakery Products Group 28,094 28,286 70,165 71,983 Non-allocated Costs in Adjusted (953) (800) (4,261) (6,610) Operating Earnings((i)) Adjusted Operating Earnings $73,347 $62,676 $201,570 $144,556
(i) Non-allocated costs in Adjusted Operating Earnings comprise
costs related to systems conversion and consulting fees.
Management believes that not allocating these costs provides a
more comparable assessment of operating results.
Meat Products Group
Includes value-added prepared meats, chilled meal entrees and lunch kits; and fresh
pork, poultry and turkey products sold to retail,
foodservice,industrial and convenience channels. Includes leading
Canadian brands such as Maple Leaf ®, Schneiders ® and many leading sub-brands.
Meat Products Group sales for the third quarter decreased 7% to $777.2
million from $834.7 million in the third quarter last year, largely due
to the sale of the Company’s Burlington, Ontario primary pork
processing operation in November 2010. After adjusting for this
divestiture and the impact of a stronger Canadian dollar that reduced
the sales value of pork exports, sales increased by 4%. Higher market
prices in fresh pork, price increases in prepared meats and value-added
poultry, and improved sales mix in the prepared meats business
contributed to higher sales. These benefits were partly offset by lower
retail sales volumes in prepared meats.
Adjusted Operating Earnings in the Meat Products Group for the third
quarter were $20.8 million, compared to $19.5 million last year, as
margin expansion driven by price increases, improved mix, and cost
reduction in prepared meats was largely offset by weaker primary
processing markets.
Prepared meats earnings and margins increased as a result of price
increases implemented earlier in the year to offset rising input costs,
improved sales product mix, and early benefits from the Company’s value
creation plan. These benefits were partly offset by lower sales volumes
and higher selling, general and administrative expenses.
Earnings in primary pork processing operations declined slightly, as the
benefits of strong exports and better product sales mix were offset by
compression in primary pork processor margins in North America and the
unfavourable impact of a stronger Canadian dollar.
Earnings from poultry processing operations declined significantly
driven by a continued rise in live birds costs as a result of increased
feed prices.
On October 19th the Company announced the approval by its Board of
Directors to invest approximately $560 million in its prepared meats
manufacturing and distribution network as part of its broader value
creation plan. Over the next three years the Company will close six
plants, consolidating production into four scale facilities, and close
four distribution centres, consolidating operations at its existing
distribution centre in Saskatoon and into a new facility in Ontario.
These changes, and the implementation of world-class technologies, are
expected to significantly enhance productivity and contribute to
continued margin expansion in this business.
Related to the early execution of initiatives within the value creation
plan, on September 30th the Company completed the sale of its Surrey,
B.C., plant and recorded a gain before taxes on the sale of $4.1
million. In addition, the Company estimated that it would record $170
million in restructuring and other related costs from 2012 to 2015
related to its three key strategic projects;the prepared meats
manufacturing and distribution network, the implementation of SAP and
the new fresh bakery in Hamilton, Ontario. This estimate includes $120
million in cash restructuring and other related costs.
Agribusiness Group
Consists of Canadian hog production and animal by-product recycling
operations.
Sales in the Agribusiness Group increased 43% to $67.9 million compared
to $47.5 million last year driven by higher sales prices in the
by-products recycling business, which reflect higher commodity values.
Adjusted Operating Earnings in the Agribusiness Group in the third
quarter increased to $25.4 million compared to $15.6 million last year,
also benefited from higher prices for recycled by-products. Lower
earnings in hog production resulted from higher feed costs that
outpaced increases in hog prices, combined with the unfavourable impact
of a stronger Canadian dollar.
Bakery Products Group
Includes fresh and frozen bakery products, including breads, rolls, bagels, specialty and
artisan breads, sweet goods, and fresh pasta and sauces sold to retail,
foodservice and convenience channels. It includes national brands such
as Dempster’s(®), Tenderflake(®), Olivieri(®) and New York Bakery Co(TM), and many leading regional brands.
Bakery Products Group sales for the third quarter increased to $417.0
million compared to $411.1 million last year. After adjusting for the
sale of the Company’s fresh sandwich product line in February of 2011
and currency translation on sales in the U.S. and U.K., sales increased
5%, primarily due to price increases implemented earlier in 2011. A
modest increase in overall sales volumes reflected higher retail sales
volume in fresh bakery operations and continued strength in bagel
volumes in the U.K. bakery business following the re-launch of the New
York Bakery Co.(TM) brand earlier in the year. Sales volumes in North American frozen
bakery operations declined slightly compared to last year.
Adjusted Operating Earnings in the Bakery Products Group for the third
quarter were $28.1 million, compared to $28.3 million last year. The
Company experienced some margin compression as price increases
implemented earlier in the year were not sufficient to fully offset the
impact of the continued rise of raw material costs. Lower costs
resulting from improved operating efficiencies in the Company’s frozen
bakery business and lower selling, general and administrative expenses
contributed to earnings. During the quarter the Company also benefited
from the sale of its fresh sandwich product line in the first quarter
of 2011.
During the quarter, the fresh bakery business recorded approximately
$2.3 million of duplicative overhead costs as the Company continues to
operate three sub-scale bakeries as it gradually transitions production
to its newly commissioned fresh bakery in Hamilton, Ontario, which
officially opened on September 28, 2011. Production lines for rolls
and breads are now in operation, and another two lines are planned to
start commercial production by the end of 2011. The final four lines,
including flat breads, are planned for 2012. The Company plans to
gradually transfer production from three bakeries in the Greater
Toronto Area, and proceed with their closures between the end of 2011
through to early 2013.
Other Matters
On October 26, 2011 Maple Leaf Foods Inc. declared a dividend of $0.04
per share payable December 30, 2011 to shareholders of record at the
close of business December 7, 2011. 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”.
In the third quarter of 2011, the Company paid two separate dividends
for total aggregate dividends of $0.04 per share. The Company
designated the second dividend of $0.015 per share to be an Eligible
Dividend, while the first dividend of $0.025 was not eligible for
purposes of the “Enhanced Dividend Tax Credit System”.
The dividends of $0.04 per share paid by the Company in each of the
first and second quarters of 2011 were not designated as Eligible
Dividends for purposes of the “Enhanced Dividend Tax Credit System”.
An investor presentation related to the Company’s third quarter
financial results is available at www.mapleleaffoods.com and can be found under Investor Relations on the Quarterly Results
page. A conference call will be held at2:30p.m. EDT on October 27,
2011 to review Maple Leaf Foods’ third quarter financial results. To
participate in the call, please dial 416-340-8018 or 866-223-7781. For
those unable to participate, playback will be made available an hour
after the event at 905-694-9451 / 800-408-3053 (Passcode2453483).
A webcast presentation of the third quarter financial results will also
be available at http://investor.mapleleaf.ca via a link:
http://phx.corporate-ir.net/phoenix.zhtml?p=irol-eventDetails&c=88490&eventID=4213105
The Company’s full financial statements and related Management’s
Discussion and Analysis are available for download on the Company’s
website.
Reconciliation of Non-IFRS Financial Measures
The Company uses the following non-IFRS measures: Adjusted Operating
Earnings and Adjusted EPS. Management believes that these non-IFRS
measures provide useful information to both Management and investors in
measuring the financial performance of the Company for the reasons
outlined below. These measures do not have a standardized meaning
prescribed by IFRS and therefore they may not be comparable to
similarly titled measures presented by other publicly traded companies
and should not be construed as an alternative to other financial
measures determined in accordance with IFRS.
Adjusted Operating Earnings
The following table reconciles earnings from operations before
restructuring and other related costs and associated gains, other
income (expense) and the impact of the change in fair value of
non-designated interest rate swaps, unrealized (gains) losses on
commodity futures contracts and the change in fair value of biological
assets to net earnings as reported under IFRS in the unaudited
condensed consolidated interim statements of earnings for the three
month periods ended as indicated below. Management believes that this
is the most appropriate basis on which to evaluate operating results,
as restructuring and other related costs, other income (expense) and
the change in fair value of non-designated interest rate swaps,
unrealized (gains) losses on commodity futures contracts and the change
in fair value of biological assets are not representative of
operational results during the period.
(Unaudited) Three months ended September 30, 2011
Meat
Products Agribusiness Bakery Unallocated
Products
($ thousands) Group Group Group costs Consolidated
Net earnings $43,007
Income taxes 4,192
Earnings from $ 47,199
operations
before income
taxes
Interest 17,927
expense
Change in the 10,423
fair value of
non-designated
interest rate
swaps
Other income (4,059) (680) (286) (123) (5,148)
Restructuring 2,966 - 1,598 318 4,882
and other
related costs
Earnings from $ 20,766 $25,440 $28,094 $983 $75,283
Operations
(Increase) - - - (3,227) (3,227)
decrease in
fair value of
biological
assets
Unrealized - - - 1,291 1,291
(gains) losses
on commodity
futures
contracts
Adjusted $ 20,766 $ 25,440 $ 28,094 $ (953) $ 73,347
Operating
Earnings
(Unaudited) Three months ended September 30, 2010
Meat
Products Agribusiness Bakery Unallocated
Products
($ thousands) Group Group Group costs Consolidated
Net earnings $ (19,856)
Income taxes (4,169)
Earnings from $ (24,025)
operations
before income
taxes
Interest 16,312
expense
Change in the 14,582
fair value of
non-designated
interest rate
swaps
Other income 168 (51) (67) (3) 47
Restructuring 39,405 70 10,512 3 49,990
and other
related costs
Earnings from $ 19,546 $ 15,644 $ 28,286 $ (6,570) $ 56,906
Operations (
(i)( ))
(Increase) - - - 3,256 3,256
decrease in
fair value of
biological
assets
Unrealized - - - 2,514 2,514
(gains) losses
on commodity
futures
contracts
Adjusted $ 19,546 $ 15,644 $ 28,286 $ (800) $ 62,676
Operating
Earnings ((i)
( ))
((i) May not add due to rounding)
Adjusted Earnings per Share
The following table reconciles Adjusted Earnings per Share to basic
earnings per share as reported under IFRS in the unaudited condensed
consolidated interim statements of earnings for the three and nine
month periods ended as indicated below. Management believes this is
the most appropriate basis on which to evaluate financial results as
restructuring and other related costs and associated gains, the changes
in the fair value of non-designated interest rate swaps, unrealized
(gains) losses on commodity futures contracts and the change in fair
value of biological assets net of tax and non-controlling interests are
not representative of operational results.
Three months Nine months
(Unaudited) ended Sep 30, ended Sep 30,
($ per share) 2011 2010 2011 2010
Basic earnings per share $ 0.29 $ (0.16) $0.53 $ (0.00)
Restructuring and other related costs(
(i)) 0.03 0.27 0.24 0.34
Gains associated with restructuring and
other related activities((ii)) (0.02) - (0.02) -
Change in the fair value of
non-designated
interest rate swaps((iii)) 0.05 0.08 0.06 0.18
Change in the fair value of unrealized
(gains)
losses on commodity futures
contracts((iii)) 0.01 0.01 (0.01) (0.01)
Change in the fair value of biological
assets ((iii)) (0.02) 0.02 0.01 (0.06)
Adjusted Earnings per Share ((iv)) $ 0.34 $ 0.22 $0.81 $ 0.46
(i) Includes per share impact of restructuring and other related
costs, net of tax and non-controlling interest.
(ii) Gains associated with restructuring and other related
activities are 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 statements that 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 statements in this document include, but are not
limited to, statements with respect to improving business trends,
expectations regarding actions to reduce costs, restore and/or promote
volumes and/or increase prices, improve efficiencies, the expected use
of cash balances, source of funds for ongoing business requirements,
capital investments and debt repayment, and expectations regarding
sufficiency of the allowance for uncollectible accounts. Words such as
“expect”, “anticipate”, “intend”, “attempt”, “may”, “will”, “plan”,
“believe”, “seek”, “estimate”, and variations of such words and similar
expressions are intended to identify such forward-looking statements.
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, United States, United Kingdom and Japanese economies;
the rate of exchange of the Canadian dollar to the U.S. dollar, British
pound and the Japanese yen; the availability and prices of raw
materials, energy and supplies; product pricing; the availability of
insurance; the competitive environment and related market conditions;
improvement of operating efficiencies whether as a result of the
protein business transformation 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 statements, 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
statements are discussed more fully in the Company’s Annual
Management’s Discussion and Analysis for the period ended December 31,
2010 including the section entitled “Risk Factors”, that are updated
each quarter in the Management’s Discussion and Analysis, and are
available on SEDAR at www.sedar.com. The Company does not intend to, and the Company disclaims any
obligation to, update any forward-looking statements, whether written
or oral, or whether as a result of new information, future events or
otherwise except as required by law.
Maple Leaf Foods Inc. (“Maple Leaf” or the “Company”) is a leading
Canadian value-added meat, meals and bakery company committed to
delivering quality food products to consumers around the world.
Headquartered in Toronto, Canada, the Company employs approximately
21,000 people at its operations across Canada and in the United States,
Europe and Asia.
Condensed Consolidated Interim Financial Statements
(Expressed in Canadian dollars)
(Unaudited)
MAPLE LEAF FOODS INC.
Three and nine months ended September 30, 2011 and 2010
MAPLE LEAF FOODS INC.
Consolidated Balance Sheets
(In thousands of Canadian dollars)
(Unaudited)
As at As at As at As at
September September
30, 30, December 31, January 1,
2011 2010 2010 2010
ASSETS
Current assets
Cash and cash
equivalents $ - $ 10,303 $ - $ 29,316
Accounts
receivable 90,176 343,047 84,117 375,143
Notes
receivable 159,968 - 136,663 -
Inventories 302,864 299,707 275,643 298,320
Biological
assets 49,154 45,079 45,440 42,568
Income and
other taxes
recoverable 47,530 20,641 29,957 18,067
Prepaid
expenses and
other assets 16,855 17,403 14,766 15,328
Assets held
for sale - 24,086 - -
$ 666,547 $ 760,266 $ 586,586 $ 778,742
Property and
equipment 1,041,824 1,032,036 1,025,012 1,084,147
Investment
property 11,584 6,927 6,832 6,646
Employee
benefits 128,613 220,212 173,243 206,584
Other
long-term
assets 9,304 9,579 6,426 5,407
Deferred tax
asset 138,263 97,286 101,688 83,170
Goodwill 754,935 753,920 752,911 755,059
Other
intangible
assets 186,070 158,611 164,178 137,239
Assets held
for sale - 1,835 - -
Total assets $ 2,937,140 $ 3,040,672 $ 2,816,876 $ 3,056,994
LIABILITIES AND
EQUITY
Current
liabilities
Bank
indebtedness $ 17,729 $ 8,070 $ 15,858 $ 4,247
Accounts
payable and
accruals 493,780 651,569 481,816 638,146
Provisions 38,760 33,546 35,062 20,612
Current
portion of
long-term debt 221,792 385,377 496,835 206,147
Other current
liabilities 73,153 10,692 63,465 37,837
Liabilities
held for sale - 10,230 - -
$ 845,214 $ 1,099,484 $ 1,093,036 $ 906,989
Long-term
debt 715,986 569,338 389,078 834,557
Employee
benefits 363,479 225,358 223,331 203,577
Other
long-term
liabilities 85,163 140,369 98,417 98,918
Deferred tax
liability 26,444 27,739 26,183 31,091
Total
liabilities $ 2,036,286 $ 2,062,288 $ 1,830,045 $ 2,075,132
Shareholders'
equity
Share capital $ 902,810 $ 872,639 $ 902,810 $ 869,353
Retained
deficit (81,975) 3,944 (5,208) 24,135
Contributed
surplus 71,820 64,292 59,002 57,486
Accumulated
other
comprehensive
loss (18,332) (8,017) (22,585) (5,055)
Treasury stock (38,915) (17,164) (10,078) (24,499)
Total
shareholders' $
equity 835,408 $ 915,694 $ 923,941 $ 921,420
Non-controlling
interest 65,446 62,690 62,890 60,442
Total equity $ 900,854 $ 978,384 $ 986,831 $ 981,862
Total
liabilities and $
equity 2,937,140 $ 3,040,672 $ 2,816,876 $ 3,056,994
MAPLE LEAF FOODS INC.
Consolidated Statements of Earnings (Loss)
(In thousands of Canadian dollars, except share amounts)
(Unaudited)
Three months ended Nine months ended
September 30, September 30,
2011 2010 2011 2010
Sales $ 1,262,153 $ 1,293,211 $ 3,648,296 $ 3,756,084
Cost of goods
sold 1,062,392 1,109,102 3,067,773 3,214,239
Gross margin $ 199,761 $ 184,109 $ 580,523 $ 541,845
Selling, general
and administrative
expenses 124,478 127,203 378,619 385,869
Earnings from
operations before the
following: $ 75,283 $ 56,906 $ 201,904 $ 155,976
Restructuring and
other related
costs (4,882) (49,990) (47,602) (61,406)
Change in fair
value of
non-designated
interest rate
swaps (10,423) (14,582) (11,382) (35,330)
Other income
(expense) 5,148 (47) 5,227 484
Earnings (loss) from
operations before
interest
and income
taxes $ 65,126 $ (7,713) $ 148,147 $ 59,724
Interest
expense 17,927 16,312 52,952 48,789
Earnings (loss) from
operations before
income
taxes $ 47,199 $ (24,025) $ 95,195 $ 10,935
Income taxes 4,192 (4,169) 17,059 5,965
Net earnings
(loss) $ 43,007 $ (19,856) $ 78,136 $ 4,970
Attributed
to:
Common
shareholders $ 39,943 $ (21,313) $ 73,708 $ 55
Non-controlling
interest 3,064 1,457 4,428 4,915
$ 43,007 $ (19,856) $ 78,136 $ 4,970
Earnings per
share
attributable to
common
shareholders
Basic earnings
(loss) per share $ 0.29 $ (0.16) $ 0.53 $ 0.00
Diluted earnings
(loss) per share $ 0.28 $ (0.16) $ 0.52 $ 0.00
Weighted average
number of shares 138.0 135.5 138.8 135.2
(millions)
MAPLE LEAF FOODS INC.
Consolidated Statements of Comprehensive Income (Loss)
(In thousands of Canadian dollars)
(Unaudited)
Three months ended Nine months ended
September 30, September 30,
2011 2010 2011 2010
Net earnings
(loss) $ 43,007 $ (19,856) $ 78,136 $ 4,970
Other comprehensive
income (loss)
Change in
accumulated
foreign
currency
translation
adjustment 10,991 (4,771) 10,085 (6,521)
Change in unrealized
gains and losses
on cash
flow hedges (7,056) 2,835 (4,872) 2,841
Change in actuarial
gains and losses (134,959) - (134,959) -
$ (131,024) $ (1,936) $ (129,746) $ (3,680)
Comprehensive $ (88,017)
income (loss) $ (21,792) $ (51,610) $ 1,290
Attributed
to:
Common
shareholders $ (91,276) $ (22,569) $ (55,598) $ (2,907)
Non-controlling
interest 3,259 777 3,988 4,197
MAPLE LEAF FOODS INC.
Consolidated Statements of Changes in Shareholders’ Equity
(In thousands of Canadian dollars)
(Unaudited)
Attributable to Common Shareholders
Total
accumulated
other Non-
Share Retained Contributed comprehensive Treasury controlling Total
(Unaudited) capital earnings surplus loss stock interest equity
Balance at
January 1, 2011 $ 902,810 $ (5,208) $ 59,002 $ (22,585) $ (10,078) $ 62,890 $ 986,831
Net
earnings - 73,708 - - - 4,428 78,136
Other
comprehensive
income
(loss) - (133,559) - 4,253 - (440) (129,746)
Dividends
declared
($0.12 per
share) - (16,916) - - - (1,322) (18,238)
Stock-based
compensation
expense - - 12,818 - - - 12,818
Decrease in
minority
interest - - - - - (110) (110)
Re-purchase
of Treasury
Stock - - - - (28,837) - (28,837)
Balance at
September 30,
2011 $ 902,810 $ (81,975) $ 71,820 $ (18,332) $ (38,915) $ 65,446 $ 900,854
Attributable to Common Shareholders
Total
accumulated
other Non-
Share Retained Contributed comprehensive Treasury controlling Total
(Unaudited) capital earnings surplus loss stock interest equity
Balance at
January 1, 2010 $ 869,353 $ 24,135 $ 57,486 $ (5,055) $ (24,499) $ 60,442 $ 981,862
Net
earnings - 55 - - - 4,915 4,970
Other
comprehensive
loss - - - (2,962) - (718) (3,680)
Dividends
declared
($0.12 per
share) - (16,243) - - - (598) (16,841)
Stock-based
compensation
expense - - 11,984 - - - 11,984
Share options
exercised 3,273 - - - - - 3,273
Shares issued
from Treasury 13 - (13) - - - -
Premium on
shares issued
from
Restricted
Share Unit
Trust - (2,665) (5,165) - 7,830 - -
Re-purchase
of Treasury
Stock - - - - (495) - (495)
Increase in
subsidiary
interest - (1,338) - - - (1,351) (2,689)
Balance at
September 30,
2010 $ 872,639 $ 3,944 $ 64,292 $ (8,017) $ (17,164) $ 62,690 $ 978,384
MAPLE LEAF FOODS INC.
Consolidated Statements of Cash Flows
(In thousands of Canadian dollars)
(Unaudited)
Three months ended Nine months ended
September 30, September 30,
2011 2010 2011 2010
CASH PROVIDED BY
(USED IN):
Operating
activities
Net earnings
(loss) $ 43,007 $ (19,856) $ 78,136 $ 4,970
Add (deduct)
items not
affecting cash:
Change in fair
value of
biological
assets (3,227) 3,256 1,094 (10,129)
Depreciation
and
amortization 32,356 34,631 97,622 108,791
Stock-based
compensation 4,270 3,989 12,818 11,984
Deferred
income taxes 8,677 (12,547) 11,946 (18,739)
Income tax
current (4,485) 8,376 5,113 24,704
Interest
expense 17,927 16,312 52,952 48,789
Loss (gain) on
sale of property
and equipment (3,884) 84 (3,766) (1,015)
Change in fair
value of
non-designated
interest
rate swaps 10,423 14,582 11,382 35,330
Change in fair
value of
derivative
financial
instruments 4,754 5,839 2,832 563
Decrease in
pension asset 2,011 3,108 3,819 7,356
Income taxes
paid (net of
refunds) (505) (7,731) (18,799) (25,519)
Interest
paid (12,740) (5,218) (36,588) (36,890)
Change in
provision for
restructuring
and
other related
costs (7,429) 43,678 20,638 47,903
Other (1,890) (64) (3,714) (1,073)
Change in non-cash
operating working 39,844
capital 29,684 (69,530) 25,407
Cash provided by
operating
activities $ 129,109 $ 118,123 $ 165,955 $ 222,432
Financing
activities
Dividends
paid $ (5,600) $ (5,432) $ (16,916) $ (16,243)
Dividends paid
to
non-controlling
interest (564) (155) (1,322) (598)
Net increase
(decrease) in
long-term debt (55,724) (81,770) 32,041 (108,379)
Increase in
share capital - 3,233 - 3,273
Increase in
financing costs (272) (63) (6,396) (1,757)
Purchase of
treasury stock (28,837) - (28,837) (495)
Other (396) 972 (1,145) (281)
Cash provided by
(used in)
financing
activities $ (91,393) $ (83,215) $ (22,575) $ (124,480)
Investing
activities
Additions to
long term assets $ (52,328) $ (49,073) $ (160,583) $ (119,937)
Capitalization
of interest
expense (1,154) (444) (4,491) (708)
Purchase of
Canada Bread
Shares - - - (2,690)
Proceeds from
long term assets 11,068 56 18,743 2,545
Other 1,032 85 1,080 2
Cash used in
investing
activities $ (41,382) $ (49,376) $ (145,251) $ (120,788)
Increase (decrease) in
cash and cash $ (3,666)
equivalents $ (14,468) $ (1,871) $ (22,836)
Net cash and cash
equivalents,
beginning
of 25,069
period (14,063) 16,701 (15,858)
Net cash and cash
equivalents, end
of period $ (17,729) $ 2,233 $ (17,729) $ 2,233
Net cash and cash
equivalents is
comprised of:
Cash and cash
equivalents $ - $ 10,303 $ - $ 10,303
Bank indebtedness (17,729) (8,070) (17,729) (8,070)
Net cash and cash
equivalents, end
of period $ (17,729) $ 2,233 $ (17,729) $ 2,233
MAPLE LEAF FOODS INC.
Segmented Financial Information
(In thousands of Canadian dollars)
(Unaudited)
Three months ended Nine months ended
September 30, September 30,
2011 2010 2011 2010
Sales
Meat Products
Group $ 777,194 $ 834,655 $ 2,257,647 $ 2,418,570
Agribusiness
Group 67,934 47,468 196,145 143,333
Bakery Products
Group 417,025 411,088 1,194,504 1,194,181
$ 1,262,153 $ 1,293,211 $ 3,648,296 $ 3,756,084
Earnings from
operations before
restructuring
and other
related
costs and other
income
Meat Products
Group $ 20,766 $ 19,546 $ 68,515 $ 43,574
Agribusiness
Group 25,440 15,644 67,151 35,609
Bakery
Products Group 28,094 28,286 70,165 71,983
Non-allocated
costs 983 (6,570) (3,927) 4,810
$ 75,283 $ 56,906 $ 201,904 $ 155,976
Capital
expenditures
Meat Products
Group $ 19,296 $ 16,676 $ 51,946 $ 49,366
Agribusiness
Group 3,546 3,554 8,708 13,267
Bakery Products
Group 29,486 28,843 99,929 57,304
$ 52,328 $ 49,073 $ 160,583 $ 119,937
Depreciation and
amortization
Meat Products
Group $ 15,784 $ 16,981 $ 47,416 $ 56,155
Agribusiness
Group 3,805 3,991 11,653 12,248
Bakery Products
Group 12,767 13,659 38,553 40,388
$ 32,356 $ 34,631 $ 97,622 $ 108,791
September September December
30, 30, 31,
2011 2010 2010
Total
assets
Meat Products
Group $ 1,450,924 $ 1,657,224 $ 1,487,804
Agribusiness
Group 215,731 259,701 247,102
Bakery Products Group 953,572 896,742 836,447
Non-allocated
assets 316,913 227,005 245,523
$ 2,937,140 $ 3,040,672 $ 2,816,876
Goodwill
Meat Products
Group $ 442,336 $ 442,336 $ 442,336
Agribusiness
Group 13,845 13,939 13,939
Bakery Products Group 298,754 297,645 296,636
$ 754,935 $ 753,920 $ 752,911
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SOURCE: Maple Leaf Foods Inc.
Investor Contact: Nick Boland, VP Investor Relations: 416-926-2005 Media Contact: 416-926-2020