Lassonde Industries Inc. announces its results for the fourth quarter and fiscal 2014

ROUGEMONT, QC, March 27, 2015 /CNW Telbec/ - Lassonde Industries Inc. (TSX: LAS.A) ("Lassonde") posted sales of $1,181.0 million in 2014, a 13.5% increase year over year. Profit attributable to the Company's shareholders for 2014 totalled $45.2 million, up $0.3 million from 2013.

 




Financial highlights

(in thousands of dollars)

Fourth quarters
ended

Years

ended


December 31,

2014

December 31,

2013

December 31,

2014

December 31,

 2013

Sales

$

349,413

$

283,512

$

1,181,026

$

1,040,209

Operating profit


32,221


27,662


88,359


83,130

Profit before income taxes


24,880


23,090


66,868


62,190

Profit attributable to the Company's shareholders


16,307


16,548


45,242


44,935

Basic and diluted earnings per share (in $)

$

2.33

$

2.37

$

6.47

$

6.43

 

Note: These are financial highlights only. Management's Discussion and Analysis, the audited consolidated financial statements and notes thereto for the year ended December 31, 2014 will be available on the SEDAR website at www.sedar.com and on the website of Lassonde Industries Inc.

"Despite a period where the weakness of the Canadian dollar has affected our raw materials costs, our 2014 results have met our expectations. Thanks to a stronger presence in the United States, we were able to limit the unfavourable impact of exchange rates while benefiting from the solid performance of our U.S. operations. Furthermore, we're pleased with the progress that we've made on integrating Apple & Eve," said Pierre-Paul Lassonde, Chairman of the Board and Chief Executive Officer of Lassonde Industries Inc.


2014 Financial Results

It should first be noted that, on July 25, 2014, the Company completed the acquisition of Apple & Eve, LLC ("A&E") for a cash consideration of US$147.6 million, paid at the close of the transaction. In February 2015, the Company received US$0.4 million as a final adjustment to net working capital.

The Company's sales amounted to $1,181.0 million in 2014, up $140.8 million (13.5%) from $1,040.2 million in 2013. Sales from A&E added $98.2 million to the Company's sales. Excluding A&E's sales, the Company's 2014 sales increased $42.6 million (4.1%) year over year. This sales growth came mainly from a higher volume of private label sales, owing partly to sales to a U.S. government agency, and from a favourable foreign exchange impact resulting from an increase in the conversion rate applied to the Company's U.S.-dollar-denominated sales. The positive impact of these factors was partly offset by lower sales volumes of the Company's national brands and by an unfavourable price impact on national brands sales that was largely due to higher trade spending.

The Company's operating profit for the year ended December 31, 2014 totalled $88.4 million, a $5.3 million year-over-year increase. Excluding the impact of the A&E acquisition, operating profit was up $7.3 million from 2013. This increase was mainly due to an improvement in the profitability of U.S. operations partly offset by a deterioration in the profitability of Canadian operations explained in part by higher trade spending and an increase in certain product costs. The net impact of the A&E acquisition was as follows: $4.2 million in transaction-related charges and $2.2 million in operating profit from A&E. The A&E operating profit includes a $1.0 million charge from an inventory step-up resulting directly from the acquisition and $0.7 million in integration fees.

The Company's financial expenses went from $22.2 million in 2013 to $23.3 million in 2014. This $1.1 million increase was largely due to a higher change in the fair value of participating loans partly offset by a decrease in interest expense.

"Other (gains) losses" went from a $1.3 million gain in 2013 to a $1.8 million gain in 2014. Substantially all of the gains came from foreign exchange gains.

Profit before income taxes totalled $66.9 million in 2014, up $4.7 million (7.5%) from $62.2 million in 2013.

An income tax expense at an effective rate of 29.1% (25.5% in 2013) brought the 2014 profit to $47.4 million, up $1.1 million from $46.3 million in 2013. Profit attributable to the Company's shareholders totalled $45.2 million, resulting in basic and diluted earnings per share of $6.47 for 2014. In 2013, profit attributable to the Company's shareholders had stood at $44.9 million, resulting in basic and diluted earnings per share of $6.43.

The Company's cash flows from operating activities totalled $79.1 million during 2014 versus $94.8 million last year. Financing activities generated $72.0 million in 2014 while they had used $81.9 million last year. During 2014, cash flows generated for the A&E acquisition totalled $140.7 million, leaving a difference of $13.2 million on a comparable basis. Investing activities used $180.7 million during 2014 while they had used $22.5 million last year. Excluding the $156.9 million in cash flows related to the A&E acquisition, investing activities used $1.3 million more in cash flows when compared to 2013. At year-end 2014, the Company reported $0.3 million in cash and cash equivalents and a $17.4 million bank overdraft compared to $13.5 million in cash and cash equivalents and a $0.8 million bank overdraft at the end of last year.

Fourth Quarter Financial Results

The 2014 fourth-quarter sales totalled $349.4 million, up $65.9 million (23.2%) from sales of $283.5 million in the fourth quarter of 2013. This sales growth came mainly from $59.3 million in sales from A&E. Excluding the impact of the A&E acquisition, the Company's sales were up $6.6 million (2.3%) compared to the same quarter of 2013. This sales growth came mainly from a higher volume of private label sales and from a favourable foreign exchange impact resulting from an increase in the conversion rate applied to the Company's U.S.-dollar-denominated sales. The positive impact of these factors was partly offset by lower sales volumes of the Company's national brands and by an unfavourable price impact on national brands sales that was largely due to higher trade spending.

The Company's operating profit for the fourth quarter of 2014 totalled $32.2 million, up $4.5 million from $27.7 million in the same quarter last year. It should be noted that this quarter's operating profit includes $2.8 million in operating profit from A&E. Excluding the impact of the A&E acquisition, operating profit was up $1.7 million from last year's fourth quarter. This increase was mainly due to an improvement in the profitability of U.S. operations partly offset by a deterioration in the profitability of Canadian operations explained in part by higher trade spending and an increase in certain product costs.

The Company's financial expenses went from $5.5 million in the fourth quarter of 2013 to $8.0 million this quarter, an increase that was mostly attributable to a higher change in the fair value of participating loans and to a higher interest expense resulting from the financing of the A&E acquisition.

"Other (gains) losses" went from a $0.9 million gain in the fourth quarter of 2013 to a $0.6 million gain in 2014. Substantially all of the gains came from foreign exchange gains on Canadian entity balances denominated in U.S. dollars.

Profit before income taxes stood at $24.9 million in the fourth quarter of 2014, up $1.8 million from $23.1 million in the fourth quarter of 2013.

An income tax expense at an effective rate of 31.6% (26.4% in 2013) brought the 2014 fourth-quarter profit to $17.0 million, essentially unchanged from the $17.0 million in profit generated during the same quarter of last year.

Profit attributable to the Company's shareholders totalled $16.3 million, resulting in basic and diluted earnings per share of $2.33 in the fourth quarter of 2014. In the fourth quarter of 2013, profit attributable to the Company's shareholders had totalled $16.5 million, resulting in basic and diluted earnings per share of $2.37.

Outlook

A lack of sustained growth in the fruit juice and drink market continues to affect the sales volumes of North American producers in the sector. In the Canadian market, the Company is seeing some weakness in demand that has created a highly competitive environment, consequently having an influence on both the prices and sales volumes of the Company's national brands. Moreover, the Company's management is not seeing any signs that competitive activity will diminish over the coming year. However, the Company believes that it will be able to limit the impact of the increased competition through new national brand product launches and new private label contracts.

Fiscal 2015 will include an entire year of A&E's financial results. To better measure the impact of the acquisition, it is important to note that the closing date of the A&E acquisition was July 25, 2014 and that A&E had recorded, for the 12-month period ended May 31, 2014, sales of approximately US$180 million and adjusted EBITDA of approximately US$15 million.

Barring any major external shocks (and excluding sales from A&E to maintain a comparable basis), the Company remains optimistic about its ability to slightly increase its consolidated sales in 2015 compared to those of 2014. At the same time, the Company plans to focus on its existing business activities in 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 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.

In 2014, Lassonde completed the acquisition of Apple & Eve, LLC of Port Washington, New York, a leading national brand juice company in the United States. This company offers more than 100 different products sold under its flagship brand, Apple & Eve, and also under the Northland, Seneca and The Switch brands.

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, CA, 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

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