Maple Leaf Foods Reports Results for Third Quarter 2013
TSX: MFI
www.mapleleaffoods.com
-
Adjusted Operating Earnings(1)(2)(3) for the third quarter was
$18.6 million compared to$47.9 million last year. Year-to-date Adjusted Operating Earnings were$12.0 million compared$102.3 million last year -
Adjusted Earnings per Share(2)(3)(4) was a loss of
$0.01 compared to Adjusted Earnings per Share of$0.13 last year. Year-to-date Adjusted Earnings per Share was a loss of$0.25 compared to Adjusted Earnings per Share of$0.21 last year. -
The Bakery Products Group achieved Adjusted EBITDA(2)(5) margins of 13.5%, reflecting contributions from efficiency improvements and volume growth in theU.K. business
"This is a very challenging period of transition for the Maple Leaf
organization, as the short-term impact of volatile protein market
conditions, combined with the significant cost of change, has been
material," said
Financial Overview
Adjusted Operating Earnings for the third quarter decreased 61.1% to
Net earnings from continuing operations(2) for the third quarter were $nil (a loss of
Adjusted Earnings per Share in the third quarter was a loss of
Several items are excluded from the discussions of underlying earnings performance as they are not representative of on-going operational activities. Refer to the section entitled Reconciliation of Non-IFRS Financial Measures at the end of this News Release for a description and reconciliation of all non-IFRS financial measures.
Business Segment Review
Following is a summary of sales by business segment:
($ thousands) | Third Quarter | Year-to-Date | ||||||
(Unaudited) | 2013 | 2012 | 2013 | 2012 | ||||
Meat Products Group | $ | 750,947 | $ | 772,460 | 2,180,971 | $ | 2,295,124 | |
Agribusiness Group(3) | 6,339 | 6,359 | 24,420 | 17,657 | ||||
Protein Group | $ | 757,286 | $ | 778,819 | $ | 2,205,391 | $ | 2,312,781 |
Bakery Products Group | 392,924 | 401,294 | 1,158,836 | 1,176,019 | ||||
Sales | $ | 1,150,210 | $ | 1,180,113 | $ | 3,364,227 | $ | 3,488,800 |
The following table summarizes Adjusted Operating Earnings by business segment:
($ thousands) | Third Quarter | Year-to-Date | ||||||
(Unaudited) | 2013 | 2012(2) | 2013 | 2012(2) | ||||
Meat Products Group | $ | (21,624) | $ | 22,875 | $ | (43,568) | $ | 55,783 |
Agribusiness Group(3) | 1,559 | (3,978) | (28,255) | (10,627) | ||||
Protein Group | $ | (20,065) | $ | 18,897 | $ | (71,823) | $ | 45,156 |
Bakery Products Group | 38,547 | 29,903 | 85,355 | 63,506 | ||||
Non-allocated Costs in Adjusted Operating Earnings(i) | 120 | (934) | (1,499) | (6,404) | ||||
Adjusted Operating Earnings | $ | 18,602 | $ | 47,866 | $ | 12,033 | $ | 102,258 |
(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. |
Results for the
Sales for the third quarter in the
Adjusted Operating Earnings in the third quarter was a loss of
For the first nine months, Adjusted Operating Earnings decreased to a
loss of
Includes value-added prepared meats, 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.
Adjusted Operating Earnings for the third quarter declined to a loss of
The Company is in an intense phase of implementing a strategy to
increase scale, productivity and profitability in its prepared meats
network. This includes commissioning activities at three recently
expanded facilities, a new distribution centre servicing Central and
Earnings in primary pork processing continued to be negatively affected by the devaluation of the Japanese Yen, which lowered profitability on export sales. North American primary pork processing spreads also contracted as live hog costs outpaced an increase in pork prices. Earnings in fresh poultry were consistent as lower primary processing spreads were offset by lower selling, general, and administrative costs.
The sale of the Company's potato processing operations reduced Adjusted
Operating Earnings by approximately
For the first nine months, Adjusted Operating Earnings were a loss of
Includes Canadian hog production operations.
Adjusted Operating Earnings in the third quarter increased to
Year-to-date Adjusted Operating Earnings decreased to a loss of
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 CoTM, and many leading regional brands.
Sales for the first nine months decreased 1.5% to
Third quarter Adjusted Operating Earnings increased 28.9% to
The North American frozen bakery business benefited from operational
cost reductions and higher pricing, while the
For the first nine months, Adjusted Operating Earnings increased 34.4%
to
Sale of Rothsay Business
The Company disposed of its Rothsay by-product recycling business during
the fourth quarter, pursuant to an agreement to sell the business to
Long-term EBITDA Margin Targets
As a result of the disposition of the Rothsay business, the Company has
adjusted its 2015 EBITDA margin target to 10.8%, which reflects a
revised EBITDA margin target of 10.0% for the
Subsequent Events
On
On
On
On
Other Matters
On
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 at
A webcast presentation of the third quarter financial results will also be available at http://edge.media-server.com/m/p/p4cgamtu/lan/en
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, Net Debt and Return on Net Assets ("RONA"). Management believes that these non-IFRS measures provide useful information to investors in measuring the financial performance of the Company for the reasons outlined below. These measures do not have a standardized meaning prescribed by IFRS and therefore they may not be comparable to similarly titled measures presented by other publicly traded companies and should not be construed as an alternative to other financial measures determined in accordance with IFRS.
Adjusted Operating Earnings
Adjusted Operating Earnings, a non-IFRS measure, is used by Management to evaluate financial operating results. It is defined as earnings before income taxes adjusted for items that are not considered representative of on-going operational activities of the business and items where the economic impact of the transactions will be reflected in earnings in future periods when the underlying asset is sold or transferred. The table below provides a reconciliation of net earnings as reported under IFRS in the unaudited consolidated interim statements of earnings to Adjusted Operating Earnings for the three and nine 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 September 30, 2013 | |||||||||||
Meat | Bakery | ||||||||||
($ thousands) | Products | Agribusiness | Products | Unallocated | |||||||
(Unaudited) | Group | Group (3) | Group | costs | Consolidated | ||||||
Net earnings (loss) from continuing operations | $ | 14 | |||||||||
Income taxes | 1,091 | ||||||||||
Earnings (loss) before income taxes from continuing operations | $ | 1,105 | |||||||||
Interest expense | 18,673 | ||||||||||
Change in the fair value of non-designated | |||||||||||
interest rate swaps | (655) | ||||||||||
Other (income) expense | (2,029) | (141) | 755 | (17,040) | (18,455) | ||||||
Restructuring and other related costs | 11,379 | - | 3,714 | - | 15,093 | ||||||
Earnings (loss) from Continuing Operations | $ | (21,624) | $ | 1,559 | $ | 38,547 | $ | (2,721) | $ | 15,761 | |
Decrease (increase) in fair value of biological assets | - | - | - | (894) | (894) | ||||||
Unrealized (gains) losses on commodity futures contracts | - | - | - | 3,735 | 3,735 | ||||||
Adjusted Operating Earnings | $ | (21,624) | $ | 1,559 | $ | 38,547 | $ | 120 | $ | 18,602 | |
Three months ended September 30, 2012(2) | |||||||||||
Meat | Bakery | ||||||||||
($ thousands) | Products | Agribusiness | Products | Unallocated | |||||||
(Unaudited) | Group | Group (3) | Group | costs | Consolidated | ||||||
Net earnings (loss) from continuing operations | $ | 11,372 | |||||||||
Income taxes | 5,487 | ||||||||||
Earnings (loss) before income taxes from continuing operations | $ | 16,859 | |||||||||
Interest expense | 18,442 | ||||||||||
Change in the fair value of non-designated | |||||||||||
interest rate swaps | (2,247) | ||||||||||
Other (income) expense | (829) | (3) | 13 | (667) | (1,486) | ||||||
Restructuring and other related costs | 4,414 | - | 170 | - | 4,584 | ||||||
Earnings (loss) from Continuing Operations | $ | 22,875 | $ | (3,978) | $ | 29,903 | $ | (12,648) | $ | 36,152 | |
Decrease (increase) in fair value of biological assets | - | - | - | 13,038 | 13,038 | ||||||
Unrealized (gains) losses on commodity futures contracts | - | - | - | (1,324) | (1,324) | ||||||
Adjusted Operating Earnings | $ | 22,875 | $ | (3,978) | $ | 29,903 | $ | (934) | $ | 47,866 | |
Nine months ended September 30, 2013 | |||||||||||
Meat | Bakery | ||||||||||
($ thousands) | Products | Agribusiness | Products | Unallocated | |||||||
(Unaudited) | Group | Group (3) | Group | costs | Consolidated | ||||||
Net earnings (loss) from continuing operations | $ | (42,185) | |||||||||
Income taxes | (18,625) | ||||||||||
Earnings (loss) before income taxes from continuing operations | $ | (60,810) | |||||||||
Interest expense | 52,009 | ||||||||||
Change in the fair value of non-designated | |||||||||||
interest rate swaps | (1,930) | ||||||||||
Other (income) expense | (46,913) | (709) | 5,147 | (20,962) | (63,437) | ||||||
Restructuring and other related costs | 60,976 | - | 15,168 | 1,745 | 77,889 | ||||||
Earnings (loss) from Continuing Operations | $ | (43,568) | $ | (28,255) | $ | 85,355 | $ | (9,811) | $ | 3,721 | |
Decrease (increase) in fair value of biological assets | - | - | - | 4,569 | 4,569 | ||||||
Unrealized (gains) / losses on commodity futures contracts | - | - | - | 3,743 | 3,743 | ||||||
Adjusted Operating Earnings | $ | (43,568) | $ | (28,255) | $ | 85,355 | $ | (1,499) | $ | 12,033 | |
Nine months ended September 30, 2012(2) | |||||||||||
Meat | Bakery | ||||||||||
($ thousands) | Products | Agribusiness | Products | Unallocated | |||||||
(Unaudited) | Group | Group (3) | Group | costs | Consolidated | ||||||
Net earnings (loss) from continuing operations | $ | 1,199 | |||||||||
Income taxes | 5,474 | ||||||||||
Earnings (loss) before income taxes from continuing operations | $ | 6,673 | |||||||||
Interest expense | 54,503 | ||||||||||
Change in the fair value of non-designated | |||||||||||
interest rate swaps | (7,180) | ||||||||||
Other (income) expense | (2,996) | (65) | (1,358) | 93 | (4,326) | ||||||
Restructuring and other related costs | 27,456 | - | 7,259 | - | 34,715 | ||||||
Earnings (loss) from Continuing Operations | $ | 55,783 | $ | (10,627) | $ | 63,506 | $ | (24,277) | $ | 84,385 | |
Decrease (increase) in fair value of biological assets | - | - | - | 14,139 | 14,139 | ||||||
Unrealized (gains) losses on commodity futures contracts | - | - | - | 3,734 | 3,734 | ||||||
Adjusted Operating Earnings | $ | 55,783 | $ | (10,627) | $ | 63,506 | $ | (6,404) | $ | 102,258 |
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 in the unaudited consolidated interim statements of earnings to Adjusted Earnings per Share for the three and nine 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.
Three months ended | Nine months ended | |||||||||
($ per share) | September 30, | September 30, | ||||||||
($ thousands) | 2013 | 2012(2) | 2013 | 2012(2) | ||||||
Basic earnings (loss) per share from continuing operations | $ | (0.02) | $ | 0.06 | $ | (0.34) | $ | (0.02) | ||
Restructuring and other related costs(i) | 0.08 | 0.02 | 0.40 | 0.19 | ||||||
Items included in other income not considered representative of | ||||||||||
on-going operations(ii) | (0.08) | - | (0.34) | - | ||||||
Change in the fair value of non-designated interest rate swaps(iii) | - | (0.01) | (0.01) | (0.04) | ||||||
Change in the fair value of unrealized (gains) losses on commodity | ||||||||||
futures contracts(iii) | 0.02 | (0.01) | 0.02 | 0.02 | ||||||
Change in the fair value of biological assets(iii) | - | 0.07 | 0.02 | 0.07 | ||||||
Adjusted Earnings per Share(iv) | $ | (0.01) | $ | 0.13 | $ | (0.25) | $ | 0.21 |
(i) | Includes per share impact of restructuring and other related costs, net of tax and non-controlling interest. |
(ii) |
Includes gains/losses associated with non-operational activities,
including gains/losses related to restructuring activities, business combinations, discontinued operations, assets held for sale, and hedge ineffectiveness recognized in earnings, all net of tax. |
(iii) |
Includes per share impact of the change in fair value of non-designated
interest rate swaps, unrealized (gains) losses on commodity futures contracts and the change in fair value of biological assets, net of tax. |
(iv) | May not add due to rounding. |
Forward-Looking Statements
This document contains, and the Company's oral and written public
communications often contain, "forward-looking information" within the
meaning of applicable securities law. These statements are based on
current expectations, estimates, forecasts and projections about the
industries in which the Company operates and beliefs and assumptions
made by the Management of the Company. Such statements include, but are
not limited to, statements with respect to objectives and goals, as
well as statements with respect to beliefs, plans, objectives,
expectations, anticipations, estimates and intentions. Specific
forward-looking information in this document includes, but is not
limited to, statements with respect to the anticipated benefits,
timing, actions, costs and investments associated with the Company's
Value Creation Plan, expectations regarding improving business trends,
expectations regarding actions to reduce costs, restore and/or promote
volumes and/or increase prices, improve efficiencies, expected
duplicative overhead costs incurred due to the concurrent operation of
the new
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 is discussed more fully 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 operations adjusted for items that are not considered representative of on-going operational activities of the business, and items where the economic impact of the transactions will be reflected in earnings in future periods when the underlying asset is sold or transferred. Please refer to the section entitled Reconciliation of Non-IFRS Financial Measures in this news release.
- 2012 figures have been restated for the impact of adopting the revised International Accounting Standard 19 Employee Benefits ("IAS 19"), as disclosed in Note 28 of the Company's unaudited condensed consolidated interim financial statements.
- Figures exclude the results of the Rothsay business, which is reported as discontinued operations. Refer to Note 19 of the Company's third 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.
- Adjusted EBITDA, a non-IFRS measure, is used by Management to evaluate financial operating results. It is defined as earnings before interest and income taxes plus depreciation and intangible asset amortization, adjusted for items that are not considered representative of on-going operational activities of the business, and items where the economic impact of the transactions will be reflected in earnings in future periods when the underlying asset is sold or transferred.
Condensed Consolidated Interim Financial Statements
(Expressed in Canadian dollars)
(Unaudited)
Three and nine months ended
Consolidated Balance Sheets
(In thousands of Canadian dollars) | As at September 30, | As at September 30, | As at December 31, | As at January 1, | |||||||||
(Unaudited) | 2013 | 2012 | 2012 | 2012 | |||||||||
(Restated) | (Restated) | (Restated) | |||||||||||
ASSETS | |||||||||||||
Current assets | |||||||||||||
Cash and cash equivalents | $ | 400,306 | $ | 87,300 | $ | 90,414 | $ | - | |||||
Accounts receivable | 107,436 | 85,589 | 117,533 | 133,504 | |||||||||
Notes receivable | 124,005 | 138,661 | 124,457 | 123,545 | |||||||||
Inventories | 323,766 | 313,485 | 301,804 | 293,231 | |||||||||
Biological assets | 80,590 | 40,123 | 78,127 | 49,265 | |||||||||
Income and other taxes recoverable | 38,317 | 43,039 | 41,527 | 43,789 | |||||||||
Prepaid expenses and other assets | 21,808 | 19,419 | 12,590 | 24,688 | |||||||||
Assets held for sale | 110,838 | 23,259 | 37,087 | - | |||||||||
$ | 1,207,066 | $ | 750,875 | $ | 803,539 | $ | 668,022 | ||||||
Property and equipment | 1,273,264 | 1,122,881 | 1,212,177 | 1,067,246 | |||||||||
Investment property | 13,011 | 13,740 | 11,979 | 11,232 | |||||||||
Employee benefits | 126,813 | 101,840 | 107,831 | 133,942 | |||||||||
Other long-term assets | 16,634 | 11,930 | 13,663 | 11,926 | |||||||||
Deferred tax asset | 113,958 | 146,484 | 132,558 | 127,456 | |||||||||
Goodwill | 725,545 | 752,590 | 753,156 | 753,739 | |||||||||
Intangible assets | 199,576 | 207,264 | 208,793 | 191,896 | |||||||||
Total assets | $ | 3,675,867 | $ | 3,107,604 | $ | 3,243,696 | $ | 2,965,459 | |||||
LIABILITIES AND EQUITY | |||||||||||||
Current liabilities | |||||||||||||
Bank indebtedness | $ | - | $ | 31,279 | $ | 48,243 | $ | 36,404 | |||||
Accounts payable and accruals | 597,101 | 459,491 | 446,911 | 507,059 | |||||||||
Provisions | 36,993 | 27,382 | 26,335 | 44,255 | |||||||||
Current portion of long-term debt | 641,306 | 6,068 | 6,573 | 5,618 | |||||||||
Other current liabilities | 15,999 | 17,624 | 14,961 | 20,409 | |||||||||
Liabilities associated with | |||||||||||||
assets held for sale | 18,511 | - | - | - | |||||||||
$ | 1,309,910 | $ | 541,844 | $ | 543,023 | $ | 613,745 | ||||||
Long-term debt | 892,433 | 1,119,045 | 1,206,945 | 941,956 | |||||||||
Employee benefits | 264,924 | 429,568 | 420,933 | 350,853 | |||||||||
Provisions | 37,226 | 28,714 | 25,800 | 28,936 | |||||||||
Other long-term liabilities | 57,632 | 81,784 | 80,084 | 88,153 | |||||||||
Deferred tax liability | 13,750 | 8,617 | 8,912 | 11,703 | |||||||||
Total liabilities | $ | 2,575,875 | $ | 2,209,572 | $ | 2,285,697 | $ | 2,035,346 | |||||
Shareholders' equity | |||||||||||||
Share capital | $ | 902,986 | $ | 902,810 | $ | 902,810 | $ | 902,810 | |||||
Retained earnings (deficit) | 47,148 | (122,156) | (72,701) | (78,674) | |||||||||
Contributed surplus | 91,172 | 80,956 | 75,913 | 64,327 | |||||||||
Accumulated other | |||||||||||||
comprehensive loss | (10,472) | (13,942) | (13,263) | (17,042) | |||||||||
Treasury stock | (1,350) | (15,370) | (1,845) | (6,347) | |||||||||
Total shareholders' equity | $ | 1,029,484 | $ | 832,298 | $ | 890,914 | $ | 865,074 | |||||
Non-controlling interest | 70,508 | 65,734 | 67,085 | 65,039 | |||||||||
Total equity | $ | 1,099,992 | $ | 898,032 | $ | 957,999 | $ | 930,113 | |||||
Total liabilities and equity | $ | 3,675,867 | $ | 3,107,604 | $ | 3,243,696 | $ | 2,965,459 |
Consolidated Statements of Earnings (Loss)
(In thousands of Canadian dollars, except share amounts) | ||||||||||||||
Three months ended September 30, | Nine months ended September 30, | |||||||||||||
(Unaudited) | 2013 | 2012 | 2013 | 2012 | ||||||||||
(Restated) | (Restated) | |||||||||||||
Sales | $ | 1,150,210 | $ | 1,180,113 | $ | 3,364,227 | $ | 3,488,800 | ||||||
Cost of goods sold | 1,013,074 | 1,015,360 | 2,990,174 | 2,997,684 | ||||||||||
Gross margin | $ | 137,136 | $ | 164,753 | $ | 374,053 | $ | 491,116 | ||||||
Selling, general and administrative expenses | 121,375 | 128,601 | 370,332 | 406,731 | ||||||||||
Earnings from continuing operations | ||||||||||||||
before the following: | $ | 15,761 | $ | 36,152 | $ | 3,721 | $ | 84,385 | ||||||
Restructuring and other related costs | (15,093) | (4,584) | (77,889) | (34,715) | ||||||||||
Change in fair value of non-designated | ||||||||||||||
interest rate swaps | 655 | 2,247 | 1,930 | 7,180 | ||||||||||
Other income (expense) | 18,455 | 1,486 | 63,437 | 4,326 | ||||||||||
Earnings (loss) before interest and | ||||||||||||||
income taxes from continuing operations | $ | 19,778 | $ | 35,301 | $ | (8,801) | $ | 61,176 | ||||||
Interest expense | 18,673 | 18,442 | 52,009 | 54,503 | ||||||||||
Earnings (loss) before income taxes | ||||||||||||||
from continuing operations | $ | 1,105 | $ | 16,859 | $ | (60,810) | $ | 6,673 | ||||||
Income taxes | 1,091 | 5,487 | (18,625) | 5,474 | ||||||||||
Net earnings (loss) from continuing operations | $ | 14 | $ | 11,372 | $ | (42,185) | $ | 1,199 | ||||||
Net earnings from discontinued operations | 15,507 | 14,671 | 42,974 | 45,057 | ||||||||||
Net earnings (loss) | $ | 15,521 | $ | 26,043 | $ | 789 | $ | 46,256 | ||||||
Attributed to: | ||||||||||||||
Common shareholders | $ | 12,955 | $ | 23,689 | $ | (4,436) | $ | 41,277 | ||||||
Non-controlling interest | 2,566 | 2,354 | 5,225 | 4,979 | ||||||||||
$ | 15,521 | $ | 26,043 | $ | 789 | $ | 46,256 | |||||||
Earnings per share attributable to common shareholders | ||||||||||||||
Basic earnings (loss) per share | $ | 0.09 | $ | 0.17 | $ | (0.03) | $ | 0.30 | ||||||
Diluted earnings (loss) per share | $ | 0.09 | $ | 0.16 | $ | (0.03) | $ | 0.30 | ||||||
Basic earnings (loss) per share | ||||||||||||||
from continuing operations | $ | (0.02) | $ | 0.06 | $ | (0.34) | $ | (0.02) | ||||||
Diluted earnings (loss) per share | ||||||||||||||
from continuing operations | $ | (0.02) | $ | 0.06 | $ | (0.34) | $ | (0.02) | ||||||
Weighted average number of shares (millions) | 139.9 | 139.5 | 139.9 | 139.5 |
Consolidated Statements of Comprehensive Income (Loss)
(In thousands of Canadian dollars) | Three months ended September 30, | Nine months ended September 30, | |||||||||||||||||
(Unaudited) | 2013 | 2012 | 2013 | 2012 | |||||||||||||||
(Restated) | (Restated) | ||||||||||||||||||
Net earnings (loss) | $ | 15,521 | $ | 26,043 | $ | 789 | $ | 46,256 | |||||||||||
Other comprehensive income (loss) | |||||||||||||||||||
Items that will not be reclassified | |||||||||||||||||||
to profit or loss: | |||||||||||||||||||
Change in actuarial gains and losses | 25,201 | (43,763) | 142,473 | (68,852) | |||||||||||||||
Total items that will not be reclassified | |||||||||||||||||||
to profit or loss | 25,201 | (43,763) | 142,473 | (68,852) | |||||||||||||||
Items that are or may be reclassified | |||||||||||||||||||
subsequently to profit or loss: | |||||||||||||||||||
Change in accumulated foreign currency | |||||||||||||||||||
translation adjustment | (445) | (3,985) | 4,539 | (3,702) | |||||||||||||||
Change in unrealized gains and losses | |||||||||||||||||||
on cash flow hedges | (1,410) | 2,069 | (1,111) | 6,312 | |||||||||||||||
Total items that are or may be reclassified | |||||||||||||||||||
subsequently to profit or loss | (1,855) | (1,916) | 3,428 | 2,610 | |||||||||||||||
$ | 23,346 | $ | (45,679) | $ | 145,901 | $ | (66,242) | ||||||||||||
Comprehensive income (loss) | $ | 38,867 | $ | (19,636) | $ | 146,690 | $ | (19,986) | |||||||||||
Attributed to: | |||||||||||||||||||
Common shareholders | $ | 36,288 | $ | (21,079) | $ | 139,454 | $ | (23,792) | |||||||||||
Non-controlling interest | 2,579 | 1,443 | 7,236 | 3,806 |
Consolidated Statements of Changes in Total Equity
Attributable to Common Shareholders | |||||||||||||||||||||||||
Total | |||||||||||||||||||||||||
accumulated | |||||||||||||||||||||||||
Retained | other | Non- | |||||||||||||||||||||||
(In thousands of Canadian dollars) | Share | earnings | Contributed | comprehensive | Treasury | controlling | Total | ||||||||||||||||||
(Unaudited) | capital | (deficit) | surplus | loss | stock | interest | equity | ||||||||||||||||||
Balance at | |||||||||||||||||||||||||
December 31, 2012 | $ | 902,810 | $ | (72,701) | $ | 75,913 | $ | (13,263) | $ | (1,845) | $ | 67,085 | $ | 957,999 | |||||||||||
(restated) | |||||||||||||||||||||||||
Net earnings (loss) | - | (4,436) | - | - | - | 5,225 | 789 | ||||||||||||||||||
Other comprehensive | |||||||||||||||||||||||||
income (loss) | - | 141,099 | - | 2,791 | - | 2,011 | 145,901 | ||||||||||||||||||
Dividends declared | |||||||||||||||||||||||||
($0.12 per share) | - | (16,814) | - | - | - | (3,813) | (20,627) | ||||||||||||||||||
Stock-based compensation | |||||||||||||||||||||||||
expense | - | - | 10,246 | - | - | - | 10,246 | ||||||||||||||||||
Exercise of stock options | 176 | - | - | - | - | - | 176 | ||||||||||||||||||
Issuance of treasury stock | - | - | (495) | - | 495 | - | - | ||||||||||||||||||
Modification of DSU plan | - | - | 3,508 | - | - | - | 3,508 | ||||||||||||||||||
Other | - | - | 2,000 | - | - | - | 2,000 | ||||||||||||||||||
Balance at September 30, 2013 | $ | 902,986 | $ | 47,148 | $ | 91,172 | $ | (10,472) | $ | (1,350) | $ | 70,508 | $ | 1,099,992 | |||||||||||
Attributable to Common Shareholders | |||||||||||||||||||||||||
Total | |||||||||||||||||||||||||
accumulated | |||||||||||||||||||||||||
other | Non- | ||||||||||||||||||||||||
(In thousands of Canadian dollars) | Share | Retained | Contributed | comprehensive | Treasury | controlling | Total | ||||||||||||||||||
(Unaudited) | capital | deficit | surplus | loss | stock | interest | equity | ||||||||||||||||||
(Restated) | |||||||||||||||||||||||||
Balance at | |||||||||||||||||||||||||
January 1, 2012 | $ | 902,810 | $ | (78,674) | $ | 64,327 | $ | (17,042) | $ | (6,347) | $ | 65,039 | $ | 930,113 | |||||||||||
(restated) | |||||||||||||||||||||||||
Net earnings | - | 41,277 | - | - | - | 4,979 | 46,256 | ||||||||||||||||||
Other comprehensive | |||||||||||||||||||||||||
income (loss) | - | (68,169) | - | 3,100 | - | (1,173) | (66,242) | ||||||||||||||||||
Dividends declared | |||||||||||||||||||||||||
($0.12 per share) | - | (16,590) | - | - | - | (3,202) | (19,792) | ||||||||||||||||||
Stock-based compensation | |||||||||||||||||||||||||
expense | - | - | 16,229 | - | - | - | 16,229 | ||||||||||||||||||
Other | - | - | 400 | - | - | 91 | 491 | ||||||||||||||||||
Re-purchase of treasury stock | - | - | - | - | (9,023) | - | (9,023) | ||||||||||||||||||
Balance at September 30, 2012 | $ | 902,810 | $ | (122,156) | $ | 80,956 | $ | (13,942) | $ | (15,370) | $ | 65,734 | $ | 898,032 |
Consolidated Statements of Cash Flows
(In thousands of Canadian dollars) | Three months ended September 30, | Nine months ended September 30, | |||||||||||||||
(Unaudited) | 2013 | 2012 | 2013 | 2012 | |||||||||||||
(Restated) | (Restated) | ||||||||||||||||
CASH (USED IN) PROVIDED BY: | |||||||||||||||||
Operating activities | |||||||||||||||||
Net earnings (loss) | $ | 15,521 | $ | 26,043 | $ | 789 | $ | 46,256 | |||||||||
Add (deduct) items not affecting cash: | |||||||||||||||||
Change in fair value of biological assets | (894) | 13,038 | 4,569 | 14,139 | |||||||||||||
Depreciation and amortization | 35,867 | 33,077 | 105,136 | 97,646 | |||||||||||||
Stock-based compensation | (515) | 5,490 | 10,246 | 16,229 | |||||||||||||
Deferred income taxes | (1,275) | (92) | (23,457) | (728) | |||||||||||||
Income tax current | 7,725 | 10,648 | 19,696 | 21,787 | |||||||||||||
Interest expense | 18,715 | 18,442 | 52,051 | 54,498 | |||||||||||||
Gain on sale of property and equipment | (1,452) | (8) | (2,933) | (421) | |||||||||||||
Gain on sale of assets held for sale | (11,520) | (139) | (57,076) | (459) | |||||||||||||
Gain on sale of investment property | - | - | (323) | - | |||||||||||||
Gain on acquisition | - | - | 985 | - | |||||||||||||
Change in fair value of non-designated | |||||||||||||||||
interest rate swaps | (655) | (2,247) | (1,930) | (7,180) | |||||||||||||
Change in fair value of | |||||||||||||||||
derivative financial instruments | 2,353 | (2,320) | 3,863 | 3,303 | |||||||||||||
Impairment of assets (net of reversals) | 115 | - | 5,924 | - | |||||||||||||
Increase in pension liability | 2,081 | 4,982 | 14,710 | 18,083 | |||||||||||||
Net income taxes paid | (8,941) | (6,993) | (20,978) | (16,512) | |||||||||||||
Interest paid | (17,656) | (18,045) | (49,470) | (53,423) | |||||||||||||
Change in provision for restructuring | |||||||||||||||||
and other related costs | 5,955 | (525) | 47,906 | 6,059 | |||||||||||||
Other | (9,191) | (5,567) | (20,376) | (7,389) | |||||||||||||
Change in non-cash operating working capital | 82,145 | (4,661) | 123,719 | (40,233) | |||||||||||||
Cash provided by operating activities | $ | 118,378 | $ | 71,123 | $ | 213,051 | $ | 151,655 | |||||||||
Financing activities | |||||||||||||||||
Dividends paid | $ | (5,620) | $ | (5,617) | $ | (16,814) | $ | (16,590) | |||||||||
Dividends paid to non-controlling interest | (1,271) | (1,271) | (3,813) | (2,440) | |||||||||||||
Net increase in long-term debt | 199,418 | 9,136 | 312,910 | 189,136 | |||||||||||||
Purchase of treasury stock | - | (9,023) | - | (9,023) | |||||||||||||
Exercise of stock options | - | - | 176 | - | |||||||||||||
Other | (293) | (484) | - | (1,267) | |||||||||||||
Cash provided by (used in) financing activities | $ | 192,234 | $ | (7,259) | $ | 292,459 | $ | 159,816 | |||||||||
Investing activities | |||||||||||||||||
Additions to long-term assets | $ | (108,076) | $ | (78,172) | $ | (273,508) | $ | (197,611) | |||||||||
Acquisition of business | - | - | (922) | (31,130) | |||||||||||||
Capitalization of interest expense | (3,931) | (1,609) | (11,126) | (4,130) | |||||||||||||
Proceeds from sale of long-term assets | 2,030 | 1,102 | 8,496 | 5,851 | |||||||||||||
Proceeds from sale of assets held for sale | 61,748 | 2,417 | 129,685 | 7,974 | |||||||||||||
Other | - | (3) | - | - | |||||||||||||
Cash used in investing activities | $ | (48,229) | $ | (76,265) | $ | (147,375) | $ | (219,046) | |||||||||
Increase (decrease) in cash and cash equivalents | $ | 262,383 | $ | (12,401) | $ | 358,135 | $ | 92,425 | |||||||||
Net cash and cash equivalents, beginning of period | 137,923 | 68,422 | 42,171 | (36,404) | |||||||||||||
Net cash and cash equivalents, end of period | $ | 400,306 | $ | 56,021 | $ | 400,306 | $ | 56,021 | |||||||||
Net cash and cash equivalents is comprised of: | |||||||||||||||||
Cash and cash equivalents | $ | 400,306 | $ | 87,300 | $ | 400,306 | $ | 87,300 | |||||||||
Bank indebtedness | - | (31,279) | - | (31,279) | |||||||||||||
Net cash and cash equivalents, end of period | $ | 400,306 | $ | 56,021 | $ | 400,306 | $ | 56,021 |
Segmented Financial Information
Three months ended September 30, | Nine months ended September 30, | |||||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||
(Restated) | (Restated) | |||||||||||||||
Sales | ||||||||||||||||
Meat Products Group | $ | 750,947 | $ | 772,460 | $ | 2,180,971 | $ | 2,295,124 | ||||||||
Agribusiness Group | 75,687 | 67,330 | 212,896 | 194,243 | ||||||||||||
Bakery Products Group | 392,924 | 401,294 | 1,158,836 | 1,176,019 | ||||||||||||
Total sales | $ | 1,219,558 | $ | 1,241,084 | $ | 3,552,703 | $ | 3,665,386 | ||||||||
Sales from discontinued operations | (69,348) | (60,971) | (188,476) | (176,586) | ||||||||||||
Sales from continuing operations | $ | 1,150,210 | $ | 1,180,113 | $ | 3,364,227 | $ | 3,488,800 | ||||||||
Earnings before restructuring and other related | ||||||||||||||||
costs and other income | ||||||||||||||||
Meat Products Group | $ | (21,624) | $ | 22,875 | $ | (43,568) | $ | 55,783 | ||||||||
Agribusiness Group | 22,562 | 15,699 | 29,668 | 49,486 | ||||||||||||
Bakery Products Group | 38,547 | 29,903 | 85,355 | 63,506 | ||||||||||||
Non-allocated costs | (2,721) | (12,648) | (9,811) | (24,277) | ||||||||||||
Total earnings before restructuring | ||||||||||||||||
and other related costs and other income | $ | 36,764 | $ | 55,829 | $ | 61,644 | $ | 144,498 | ||||||||
Earnings before restructuring | ||||||||||||||||
and other related costs and other income | ||||||||||||||||
from discontinued operations | (21,003) | (19,677) | (57,923) | (60,113) | ||||||||||||
Earnings before restructuring | ||||||||||||||||
and other related costs and other income | ||||||||||||||||
from continuing operations | $ | 15,761 | $ | 36,152 | $ | 3,721 | $ | 84,385 | ||||||||
Capital expenditures | ||||||||||||||||
Meat Products Group | $ | 92,257 | $ | 63,582 | $ | 231,463 | $ | 148,712 | ||||||||
Agribusiness Group | 3,591 | 3,242 | 11,436 | 8,937 | ||||||||||||
Bakery Products Group | 12,228 | 11,348 | 30,609 | 39,962 | ||||||||||||
$ | 108,076 | $ | 78,172 | $ | 273,508 | $ | 197,611 | |||||||||
Depreciation and amortization | ||||||||||||||||
Meat Products Group | $ | 17,428 | $ | 14,912 | $ | 49,847 | $ | 44,829 | ||||||||
Agribusiness Group | 4,043 | 4,023 | 12,295 | 11,949 | ||||||||||||
Bakery Products Group | 14,396 | 14,142 | 42,994 | 40,868 | ||||||||||||
$ | 35,867 | $ | 33,077 | $ | 105,136 | $ | 97,646 |
As at September 30, | As at September 30, | As at December 31, | As at January 1, | |||||||||||
2013 | 2012 | 2012 | 2012 | |||||||||||
(Restated) | (Restated) | (Restated) | ||||||||||||
Total assets | ||||||||||||||
Meat Products Group | $ | 1,798,777 | $ | 1,554,470 | $ | 1,617,413 | $ | 1,482,741 | ||||||
Agribusiness Group | 282,061 | 213,808 | 275,167 | 224,108 | ||||||||||
Bakery Products Group | 1,014,807 | 999,391 | 1,005,432 | 944,032 | ||||||||||
Non-allocated assets | 580,222 | 339,935 | 345,684 | 314,578 | ||||||||||
$ | 3,675,867 | $ | 3,107,604 | $ | 3,243,696 | $ | 2,965,459 | |||||||
Goodwill | ||||||||||||||
Meat Products Group | $ | 428,235 | $ | 442,692 | $ | 442,925 | $ | 442,336 | ||||||
Agribusiness Group | - | 13,845 | 13,845 | 13,845 | ||||||||||
Bakery Products Group | 297,310 | 296,053 | 296,386 | 297,558 | ||||||||||
$ | 725,545 | $ | 752,590 | $ | 753,156 | $ | 753,739 |
SOURCE
Investor Contact: Nick Boland,
VP Investor Relations: 416-926-2005
Media Contact: 416-926-2020