Lassonde Industries Inc. announces its Q2 2016 results

ROUGEMONT, QC, Aug. 12, 2016 /CNW Telbec/ - Lassonde Industries Inc. (TSX: LAS.A) ("Lassonde") posted sales of $360.2 million in the second quarter of 2016, a $3.4 million increase year over year. Profit attributable to the Company's shareholders for this period totalled $15.7 million, up $1.5 million from the second quarter of 2015.



Financial highlights
(in thousands of dollars)

Second quarters
ended


July 2,
2016

June 27,
2015

Sales

$ 360,159


$  356,817


Operating profit

30,326


29,303


Profit before income taxes

24,277


21,832


Profit attributable to the Company's shareholders

15,686


14,181


Basic and diluted earnings per share (in $)

$       2.24


$        2.03


Note: These are financial highlights only. Management's Discussion and Analysis, the unaudited interim condensed consolidated financial statements and notes thereto for the quarter ended July 2, 2016 will be available on the SEDAR website at www.sedar.com and on the website of Lassonde Industries Inc.

"We are satisfied with our results for the second quarter and first six months of 2016. They demonstrate our ability to adapt at a time when a low Canadian dollar continues to exert considerable pressure on the operating costs of our Canadian entities," said Pierre-Paul Lassonde, Chairman of the Board and Chief Executive Officer of Lassonde Industries Inc.

Financial results

The Company's sales totalled $360.2 million in the second quarter of 2016, up $3.4 million from $356.8 million in sales in the same period of 2015. This increase was primarily driven by a favourable foreign exchange impact and an increase in sales of private label products, partly offset by a decrease in the sales volume of national brands. For the first six months of 2016, sales totalled $746.6 million, up 9.1% from $684.5 million in the first six months of 2015.

The Company's operating profit for the second quarter of 2016 totalled $30.3 million, up $1.0 million from operating profit of $29.3 million in the same quarter last year. This increase came mainly from improved profitability within the U.S. operations combined with a favourable impact of foreign exchange movements on the conversion into Canadian dollars of the financial results of these entities. In Canada, a favourable impact driven by improved profitability has been more than offset by an unfavourable impact of a low Canadian dollar on U.S.-dollar purchases. Operating profit for the first six months of 2016 stood at $57.8 million, up $11.5 million from $46.3 million for the first six months of 2015.

The Company's financial expenses went from $6.8 million in the second quarter of 2015 to $5.8 million this quarter. This $1.0 million decrease was mainly attributable to a lower interest expense resulting from a reduction in indebtedness and to a smaller change in the fair value of participating loans due, in part, to the full settlement of these loans in May 2016. For the first six months, financial expenses went from $13.4 million in 2015 to $11.5 million this fiscal year.

"Other (gains) losses" went from a $0.7 million loss in the second quarter of 2015 to a $0.3 million loss in 2016. The 2015 second-quarter loss of $0.7 million was mainly due to $0.5 million in foreign exchange losses. The $0.3 million loss in the second quarter of 2016 was due to losses resulting from a change in the fair value of interest rate swaps related to the term loan of Lassonde Pappas and Company, Inc. For the first six months, the "Other (gains) losses" item was a $1.1 million loss in 2016 compared to a $0.6 million gain in 2015.

Profit before income taxes totalled $24.3 million for the second quarter of 2016, up $2.5 million from $21.8 million in the same quarter of 2015. For the first six months of 2016, profit before income taxes stood at $45.1 million, up $11.7 million from $33.4 million in the first six months of 2015.

Income tax expense went from $6.8 million in the second quarter of 2015 to $7.6 million in the same quarter of 2016. At 31.3%, the 2016 second-quarter effective income tax rate was slightly higher than the 31.0% rate in the same quarter of 2015. The higher tax rate reflects an unfavourable change in the geographic mix of the Company's taxable income. Income tax expense for the first six months of 2016 stood at $14.6 million, up $4.4 million from $10.2 million in the first six months of 2015.

The 2016 second-quarter profit was $16.7 million, up $1.6 million from $15.1 million in the second quarter of last year. For the first six months of 2016, profit totalled $30.6 million versus profit of $23.2 million in the first six months of 2015.

Profit attributable to the Company's shareholders was $15.7 million, resulting in basic and diluted earnings per share of $2.24 for the second quarter of 2016. In the second quarter of 2015, profit attributable to the Company's shareholders had totalled $14.2 million, resulting in basic and diluted earnings per share of $2.03. For the first six months of 2016, profit attributable to the Company's shareholders totalled $28.6 million, resulting in basic and diluted earnings per share of $4.10 and, in the same six-month period of 2015, profit had totalled $21.9 million, resulting in basic and diluted earnings per share of $3.14.

Cash flows from operating activities generated $29.9 million in cash during the second quarter of 2016, while they had generated $43.3 million in cash during the same quarter last year. Financing activities used $12.3 million in the second quarter of 2016, while these activities had used $34.2 million in the same quarter of 2015. Investing activities used $4.7 million in the second quarter of 2016 compared to $5.2 million in the same quarter of 2015. At the end of the second quarter of 2016, the Company reported a cash and cash equivalents balance of $27.1 million and a bank overdraft of $4.3 million compared to a cash and cash equivalents balance of $0.5 million and a bank overdraft of $14.6 million at the end of the second quarter of 2015.

Outlook

The Company is seeing moderate growth in industry sales in the U.S. fruit juice and drink market. The situation is different in the Canadian market, as industry sales remain lower. As a result, the competitive environment in Canada remains challenging, and the Company does not see any signs of competitive activity diminishing by the end of 2016. The Company is seeking to limit the impact of this increased competition through national brand product innovation and continued private label customer development.

During the first quarter of 2016, the Company's sales and profit had increased significantly year over year. Part of this increase came from the fact that, in the first quarter of 2016, there were five more delivery days than in the first quarter of 2015. Since the number of delivery days will remain constant for the year as a whole, this increase is expected to partially reverse, especially in the fourth quarter of 2016. Barring any significant external shocks (and excluding foreign exchange impacts to maintain a comparable basis), the Company remains optimistic about its ability to slightly increase its consolidated sales in 2016 compared to those of 2015.

About Lassonde

Lassonde Industries Inc. is a North American leader in the development, manufacture and sale of a wide range of ready-to-drink fruit and vegetable juices and drinks marketed under brands such as Apple & Eve, Everfresh, Fairlee, Fruité, Graves, Oasis and Rougemont.

Lassonde is also the second largest producer of store brand shelf-stable fruit juices and drinks in the United States and a major producer of cranberry sauces.

Lassonde also develops, manufactures and markets specialty food products under brands such as Antico and Canton. The Company imports and markets selected wines from various countries and manufactures apple ciders and cider-based beverages.

The Company produces superior quality products through the expertise of approximately 2,100 people working in 14 plants across Canada and the United States. To learn more, visit www.lassonde.com.

SEDAR registration number: 00002099

Caution Concerning Forward-Looking Statements

This press release contains forward-looking statements that are based on certain assumptions. These forward-looking statements are subject to a number of risks and uncertainties that could cause actual results or events to differ materially from current expectations. Additional factors are discussed in materials filed from time to time with the securities regulatory authorities in Canada. Lassonde Industries Inc. disclaims any intention or obligation to update or revise any forward-looking statements except as required by law.

 

SOURCE Lassonde Industries Inc.

For further information: Investor contact: Guy Blanchette, FCPA, FCA, Executive Vice-President and Chief Financial Officer, Lassonde Industries Inc., 450-469-4926, extension 10782; Media contact: Stefano Bertolli, Vice-President Communications, Lassonde Industries Inc., 450-469-4926, extension 10265

RELATED LINKS
http://www.lassonde.com

Custom Packages

Browse our custom packages or build your own to meet your unique communications needs.

Start today.

CNW Membership

Fill out a CNW membership form or contact us at 1 (877) 269-7890

Learn about CNW services

Request more information about CNW products and services or call us at 1 (877) 269-7890