Maple Leaf Refiles Financial Statements to Reflect Previously Announced Restatement of Tax Liability on Sale of Discontinued Business
TORONTO, Feb 12, 2009 /PRNewswire-FirstCall via COMTEX/ -- Maple Leaf Foods Inc. (TSX: MFI) today refiled its consolidated annual financial statements and related management's discussion and analysis for fiscal 2007 to reflect a previously announced restatement of understated future tax expense related to the sale of its animal nutrition business in 2007. The Company has also restated and refiled its interim financial statements for the three, six and nine month periods ended March 31, 2008, June 30, 2008 and September 30, 2008 (the "2008 Interim Statements"), respectively, and its related management's discussion and analysis for these periods for the same reason. The restated management's discussion and analysis for fiscal 2007 also contains an update on management's assessment of the design and effectiveness of the Company's disclosure controls and procedures and the design of its internal control over financial reporting.
On July 20, 2007, the Company sold its animal nutrition business for gross proceeds of $524.8 million and recognized a gain on the sale of $219.4 million, net of income taxes of $65.1 million. As disclosed on February 3, 2009, the Company identified an understatement of future tax expense recognized on this transaction in earnings from discontinued operations of $12.2 million and an understatement of its net future tax liability of the same amount. The Company does not expect this restatement to have an impact on cash flows for at least the next three to five years. The Company has now restated and refiled its consolidated annual financial statements for the year ended December 31, 2007 and its 2008 Interim Statements to reflect the increase in tax expense and the increase in its net future tax liability. The impact of reflecting the above restatement results in revised net earnings for the year ended December 31, 2007 of $194.9 million (previously reported net earnings were $207.1 million) and in revised basic and diluted earnings per share ("EPS") of $1.53 and $1.50, respectively (previously reported basic and diluted EPS were $1.63 and $1.59, respectively).
As the sale of the animal nutrition business was reflected in the 2007 financial statements as a discontinued operation, the restatement does not affect earnings from continuing operations in fiscal 2007 or net earnings (loss) in fiscal 2008. Accordingly, earnings from continuing operations previously reported for the fiscal year ended December 31, 2007 and net earnings (loss) for the interim periods in fiscal 2008 remain unchanged.
Maple Leaf Foods Inc. is a leading food processing company, headquartered in Toronto, Canada. The Company employs approximately 23,500 people at its operations across Canada and in the United States, the United Kingdom and Asia. The Company had sales of $5.2 billion in 2007.
This press release may contain forward-looking statements. Such statements include, but are not limited to, statements with respect to the Company's expectations concerning the effect of the restatement on the amount and timing of future cash flows. These statements are not guarantees of future performance and involve assumptions and risks and uncertainties that are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed, implied or forecasted in such forward-looking statements. Factors that could cause actual results or outcomes to differ materially from the results expressed, implied or forecasted by these forward-looking statements are discussed more fully in the Company's filings with the securities regulatory authorities, including its management's discussion and analysis, all of which are available on SEDAR at www.sedar.com. The Company does not intend, 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.
SOURCE Maple Leaf Foods Inc.