- Special Crops Division Delivers Strong Quarter for EBITDA and Cash Flow
As Pacific Coast Canola Prepares for Full Production -
WINNIPEG, May 14, 2013 /CNW/ - Legumex Walker Inc. (TSX: LWP) (the
"Company") today reported its financial results for the three months
ended March 31, 2013. All figures are in Canadian dollars unless
Highlights for the Three Months Ended March 31, 2013 (all growth metrics reflect comparison to the three months ended March
Improved financial results from the Special Crops division:
Revenue increased 26% to $83 million on an increase in tonnes shipped of
19% to 97,500 tonnes;
Adjusted gross profit increased 61% to $9.2 million with a commodity
margin increase of 41% to $144 per tonne, reflecting the success of the
Company's strategy to diversify into higher-margin products;
EBITDA increased 62% to $6.4 million, reflecting the success of the
Company's strategy to improve operating leverage;
Cash flow provided by operations improved to $3.3 million (net of
Commissioning of the Pacific Coast Canola plant ("PCC Plant") progressed
according to plan with PCC shipping its first food-grade canola oil in
mid-March. The PCC Plant remains on schedule to begin full production
in the third quarter of 2013.
Consolidated EBITDA of $0.2 million compared with $2.2 million
(including corporate costs that were consistent year-over-year),
reflecting the expected loss generated by the Oilseed Seed division
"Our improved Special Crops results for the first quarter of 2013 are
indicative of the underlying strength of that division as we began to
realize the benefit of last year's substantial investment in
facilities, technology and people as well as improvements in demand in
the marketplace," said Joel Horn, President and Chief Executive
Officer, Legumex Walker Inc. "We are clearly seeing payoff from our
acquisitions, diversification into higher margin products and
optimization of our processing facilities to achieve EBITDA and cash
flow that were not previously available to us."
"The Pacific Coast Canola team is completing final commissioning of our
canola processing facility, building canola seed inventories, and
lining up our customers to begin commercial-scale operations on
schedule in the third quarter. Canola oil prices are rising as the new
crop approaches and local planting, which benefits our profitability,
is on track for another record year."
"Looking out to the remainder of 2013, we expect to continue to realize
the value of last year's acquisitions and investments while leveraging
our platform for organic growth opportunities that will be influenced
by the new crop. In the back half of the year, we will see meaningful
contribution from our Canola business and will begin to take advantage
of additional margin opportunities. By next year, both the Special
Crops and Oilseed Processing divisions will be well positioned to
deliver on the full potential of our efforts."
Results for the Three Months Ended March 31, 2013
Consolidated revenue for the first quarter of 2013 increased by 33% to
$87.3 million compared to the same quarter last year reflecting higher
volumes due to the annualized impact of the Keystone Grain Ltd.
acquisition on October 1, 2012. Adjusted gross profit of $5.6 million
for the quarter was consistent with the same quarter last year as a
$3.5 million increase for Special Crops from higher volumes and
improved margins was largely offset by initial losses in Oilseed
Processing during the commissioning phase of the PCC Plant.
EBITDA for the first quarter of 2013 was $165,000 compared to $2.2
million for the same quarter last year. Normalized selling and
administrative expenses increased $1.9 million due to increased
activity at the PCC Plant and the annualized effect of businesses
acquired in February and October 2012. Corporate costs remained
consistent with the same quarter last year.
Net loss attributable to shareholders, after excluding the 15%
non-controlling interest in Pacific Coast Canola, for the first quarter
of 2013 was $5.8 million, or $0.36 per share, and the loss was entirely
attributable to the Oilseed Processing division as commissioning of the
PCC plant continued during the quarter.
Revenue for the first quarter of 2013 increased 26% to $83 million. The
Company sold 97,500 tonnes of special crops in the first quarter of
2013, an increase of 15,300 tonnes (19%) over the same quarter last
year. The increase in volume also represents an increase in
diversification towards the higher margin Edible Bean and Sunflower &
Flax divisions. Increased volumes contributed $1.6 million of
incremental commodity profit complemented by $4.1 million from improved
commodity margins and offset by a $2.2 million increase in plant
costs. Adjusted gross profit for the first quarter of 2013 increased
61% to $9.2 million from $5.7 million for the same quarter last year.
EBITDA for the first quarter of 2013 increased 64% to $6.4 million from
$3.9 for the same quarter last year. Normalized Selling and
Administrative costs increased $1.0 million to $2.8 million.
Construction of the PCC Plant was substantially completed in February
2013 and commissioning of the Plant continues as planned with full
production expected in the third quarter of this year.
The PCC Plant generated revenue of $4.6 million as a result of the high
quality of oil and meal produced during the commissioning phase.
Although the PCC Plant has not yet achieved commercial production
levels, the proportion of oil and meal processed was generally
consistent with expectations.
Adjusted gross profit was a loss of $3.6 million as the commissioning of
the plant incurred costs of $1.8 million that were not fully recouped
from the non-commercial level production and sale of canola oil and
meal during the commissioning phase.
Operating costs will continue to exceed revenues until commissioning is
fully completed and the PCC Plant is operating at full production.
Loss before interest, taxes depreciation and amortization was $4.5
million. Selling and administrative expenses increased to $943,000 as
operating activity increased to normal levels in preparation for full
production this year.
This news release contains references to "Adjusted gross profit",
"EBITDA," "Cash Flow from Operations", and "Non-recurring Costs".
Adjusted gross profit is defined for the purposes of this news release
as gross profit before depreciation and amortization. EBITDA is
defined for the purposes of this news release as earnings from
operations before other income and expenses, depreciation and
amortization, financing costs, non-recurring costs and income taxes.
Cash Flow from Operations is defined for the purposes of this news
release as the cash provided by or used in operating activities
excluding non-cash working capital changes. Management believes
excluding the seasonal swings of non-cash working capital assists in
evaluation of long-term liquidity. Non-recurring Costs is defined as
one-time costs deemed to be non-recurring by management relating to
acquisitions, integration and other incorporation or amalgamation
activities. Management believes that EBITDA and Cash Flow from
Operations are useful supplemental measures of cash flow prior to
finance costs, capital expenditures, income taxes and other non-cash
items included in earnings. Management uses Cash Flow from Operations
as a financial measure of liquidity. EBITDA and Cash Flow from
Operations are not recognized earnings measures under Canadian
Generally Accepted Accounting Principles or IFRS (collectively referred
to herein as "Canadian GAAP") and do not have standardized meanings
prescribed by Canadian GAAP. Therefore, EBITDA and Cash Flow from
Operations may not be comparable to similar measures presented by other
issuers. Investors are cautioned that EBITDA and Cash Flow from
Operations should not be construed as an alternative to net earnings or
loss (which are determined in accordance with Canadian GAAP) as an
indicator of the performance of the Company or as a measure of
liquidity and cash flows. The Company believes that EBITDA and Cash
Flow from Operations are useful supplemental measures of cash flow
prior to debt service, investing and financing activities and income
taxes. The Company's method of calculating EBITDA and Cash Flow from
Operations may differ materially from the methods used by other public
companies and, accordingly, may not be comparable to similarly titled
measures used by other public companies.
Financial Statements and MD&A
Legumex Walker's Financial Statements and Management's Discussion and
Analysis ("MD&A") for the period ended March 31, 2013 are available on
the Company's website at www.legumexwalker.com in the "Investors" section.
Legumex Walker will host a conference call on Wednesday, May 15, 2013 at
8:30 a.m. ET to discuss its first quarter 2013 financial results. To
access the conference call by telephone, dial (647) 427-7450 or (888)
231-8191. Please connect approximately 10 minutes prior to the start
of the call to ensure access.
A recording of the conference call will be archived for replay by
telephone until Wednesday, May 22, 2013 at midnight. To access the
archived conference call, dial 1-855-859-2056 and enter the reservation
A live audio webcast of the conference call will be available http://www.legumexwalker.com/investors-presentations.php. Please connect at least 15 minutes prior to the conference call to
ensure adequate time for any software download that may be required to
join the webcast.
About Legumex Walker Inc.
Legumex Walker is a growth-oriented processor and merchandiser of pulses
(lentils, peas, beans and chickpeas), other special crops and canola
products. The Company is one of the largest processors of pulses and
other special crops in Canada. Legumex Walker has 14 processing
facilities strategically located in key growing regions in the Canadian
Prairie Provinces, the American Midwest, and China, a global sales,
logistics, and distribution platform and access to multimodal
transportation capabilities. In addition, the Company has an 85 percent
interest in Pacific Coast Canola, LLC, which operates the first and
only commercial-scale canola oilseed processing facility West of the
Cautionary Note on Forward-looking Statements
This press release contains certain forward-looking statements.
Forward-looking statements include, but are not limited to, those with
respect to, the growth of the Company's business, including statements
with respect to organic growth, the expansion of the Company's earnings
potential and the increase in efficiency in certain divisions to
sustain and enhance margins. Forward-looking statements involve known
and unknown risks, uncertainties and other factors which may cause the
actual results, performance or achievements of the Company (including
its operating subsidiaries) to be materially different from any future
results, performance or achievements expressed or implied by the
forward-looking statements. Such risks and uncertainties include, among
others, timing and cost overrun risks associated with the commissioning
of the PCC Plant (as defined herein), risks related to the operation of
the PCC Plant, product liabilities, environmental risks, regulations
related to agricultural commodities, weather related risks, the demand
for and availability of rail, port and other transportation services,
the actual results of harvests, fluctuations in the price of pulses and
other crops and canola oil prices, failure of plant, equipment or
processes to operate as anticipated, accidents, labour disputes, risks
relating to the integration of acquisitions, as well as those factors
referred to in the section entitled "Risk Factors" in the Company's
Management's Discussion and Analysis for the period ended December 31,
2012 and the Company's 2013 Annual Information Form, which are
available on SEDAR at www.sedar.com and which should be reviewed in
conjunction with this document. Although the Company has attempted to
identify important factors that could cause actual actions, events or
results to differ materially from those described in forward-looking
statements, there may be other factors that cause actions, events or
results not to be as anticipated, estimated or intended. There can be
no assurance that forward-looking statements will prove to be accurate
as actual results and future events could differ materially from those
anticipated in such statements. Accordingly, readers should not place
undue reliance on forward-looking statements. Although the Company
believes the assumptions inherent in forward-looking statements are
reasonable, undue reliance should not be placed on these statements,
which only apply as of the date of this press release. The Company
expressly disclaims any intention or obligation to update or revise any
forward-looking statements, whether as a result of new information,
future events or otherwise, except in accordance with applicable
SOURCE: Legumex Walker Inc.
For further information:
INVESTOR & MEDIA RELATIONS:
Investor Relations - Legumex Walker
(416) 815-0700 ext. 257