Lassonde Industries Inc. announces its results for the fourth quarter and fiscal 2015

ROUGEMONT, QC, March 24, 2016 /CNW Telbec/ - Lassonde Industries Inc. (TSX: LAS.A) ("Lassonde") posted sales of $1,449.3 million in 2015, a 22.7% increase year over year. Profit attributable to the Company's shareholders for 2015 totalled $57.0 million, up $11.8 million from 2014.

 




Financial highlights

(in thousands of dollars)

Fourth quarters

ended

Years

ended


December 31,
2015


December 31,
2014


December 31,
2015


December 31,
2014

Sales

$

401,473


$

349,413


$

1,449,287


$

1,181,026

Operating profit


36,182



32,221



111,252



88,359

Profit before income taxes


30,442



24,880



86,390



66,868

Profit attributable to the Company's shareholders


20,197



16,307



56,979



45,242

Basic and diluted earnings per share (in $)

$

2.89


$

2.33


$

8.15


$

6.47

 

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, 2015 will be available on the SEDAR website at www.sedar.com and on the website of Lassonde Industries Inc.

"Our 2015 results reveal the flexibility of our business model at a time when a low Canadian dollar is affecting raw materials costs. Given our greater presence in the United States, we've been able to limit unfavourable foreign exchange impacts while also benefiting from the sound performance of our U.S. operations. As the volatility of the Canadian dollar does not seem to be levelling off in 2016, we plan on adjusting our business strategies to ease the effects of these fluctuations," said Pierre-Paul Lassonde, Chairman of the Board and Chief Executive Officer of Lassonde Industries Inc.

2015 Financial Results

The Company's sales amounted to $1,449.3 million in 2015, up $268.3 million (22.7%) from $1,181.0 million in 2014. Sales from Apple & Eve, LLC ("A&E"), a subsidiary acquired in 2014, stood at $258.0 million in 2015. A&E's sales had reached $98.2 million for the period of July 26, 2014 (the date when A&E began operating under the Company's control) to December 31, 2014. Excluding A&E's sales, the Company's 2015 sales increased $108.5 million (10.0%) year over year. This sales growth came mainly from a favourable foreign exchange impact and from higher sales of private label products, partly offset by lower sales volumes of the Company's national brands.

The Company's operating profit for the year ended December 31, 2015 totalled $111.3 million, a $22.9 million year-over-year increase. A&E's operating profit was $13.8 million for the year ended December 31, 2015. For the period of July 26, 2014 to December 31, 2014, A&E's operating profit had totalled $2.2 million, reflecting, in part, a $1.0 million increase in cost of sales attributable to an inventory step-up resulting from the acquisition and $0.7 million in integration fees. Moreover, in 2014, the Company had incurred $4.2 million in charges related to the A&E acquisition. Excluding the impact of the A&E acquisition, operating profit would have been up $7.1 million from 2014. This increase came mainly from a favourable impact of foreign exchange movements on the conversion into Canadian dollars of the results of Lassonde Pappas and Company, Inc. ("LPC") (formerly Clement Pappas and Company, Inc.) and from improved profitability in Canadian operations, partly offset by an unfavourable impact of a low Canadian dollar on U.S.-dollar purchases and by charges related to customs duties being claimed by the U.S. authorities.

The Company's financial expenses went from $23.3 million in 2014 to $27.8 million in 2015. This $4.5 million increase was largely due to an unfavourable foreign exchange impact resulting from the conversion of the financial expenses of U.S. entities into Canadian dollars and to a higher change in the fair value of participating loans explained mainly by a low Canadian dollar.

"Other (gains) losses" went from a $1.8 million gain in 2014 to a $3.0 million gain in 2015. The 2014 gain was essentially due to foreign exchange gains. The $3.0 million gain in 2015 was mainly due to $4.0 million in foreign exchange gains, partly offset by $1.3 million in losses resulting from a change in the fair value of interest rate swaps related to LPC's term loan.

Profit before income taxes totalled $86.4 million in 2015, up $19.5 million (29.2%) from $66.9 million in 2014.

Income tax expense went from $19.5 million in 2014 to $26.2 million in 2015.

The 2015 profit was $60.2 million, up $12.8 million from $47.4 million last year. It should be noted that, after the allocation of financial expenses, A&E's profit added $4.4 million to the Company's 2015 profit. In 2014, A&E's profit combined with the transactions related to acquiring A&E had reduced the Company's profit by approximately $3.6 million.

Profit attributable to the Company's shareholders totalled $57.0 million, resulting in basic and diluted earnings per share of $8.15 for 2015. In 2014, profit attributable to the Company's shareholders had stood at $45.2 million, resulting in basic and diluted earnings per share of $6.47.

The Company's cash flows from operating activities totalled $116.8 million during 2015 versus $79.1 million last year. Financing activities used $88.3 million in 2015 while they had generated $72.0 million last year. During 2014, cash flows generated for the A&E acquisition totalled $140.7 million, leaving a difference of $19.6 million on a comparable basis. Investing activities used $19.3 million during 2015 while they had used $180.7 million last year. Excluding the $156.9 million in cash flows related to the A&E acquisition in 2014, investing activities used $4.5 million less in cash flows when compared to 2014. At year-end 2015, the Company reported $0.5 million in cash and cash equivalents and a $9.5 million bank overdraft compared to $0.3 million in cash and cash equivalents and a $17.4 million bank overdraft at the end of last year.

Fourth Quarter Financial Results

The Company's sales totalled $401.5 million in the fourth quarter of 2015, up $52.1 million or 14.9% from $349.4 million in the same period of 2014. This increase was primarily driven by a favourable foreign exchange impact and higher sales of private label products.

The Company's operating profit for the fourth quarter of 2015 totalled $36.2 million, up $4.0 million from $32.2 million in the same quarter last year. This increase came mainly from a favourable impact of foreign exchange movements on the conversion into Canadian dollars of the results of the U.S. entities and from improved profitability within the U.S. operations, partly offset by lower profitability in the Canadian operations caused by an unfavourable impact of a low Canadian dollar on U.S.-dollar purchases and by a charge related to customs duties being claimed by the U.S. authorities.

The Company's financial expenses went from $8.0 million in the fourth quarter of 2014 to $6.8 million in the fourth quarter of 2015. This $1.2 million decrease was largely due to a lower change in the fair value of participating loans and to a lower interest expense, partly offset by an unfavourable foreign exchange impact resulting from the conversion of the financial expenses of the U.S. entities into Canadian dollars.

"Other (gains) losses" went from a $0.6 million gain in the fourth quarter of 2014 to a $1.1 million gain in 2015. The 2014 fourth-quarter gain was essentially due to foreign exchange gains. The 2015 fourth-quarter gain of $1.1 million was mainly due to $0.6 million in foreign exchange gains and to $0.4 million in gains resulting from a change in the fair value of interest rate swaps related to LPC's term loan.

Profit before income taxes stood at $30.4 million in the fourth quarter of 2015, up $5.5 million from $24.9 million in the fourth quarter of 2014.

An income tax expense at an effective rate of 30.0% (31.6% in 2014) brought the 2015 fourth-quarter profit to $21.3 million, up $4.3 million from the $17.0 million in profit generated during the same quarter of last year.

Profit attributable to the Company's shareholders totalled $20.2 million, resulting in basic and diluted earnings per share of $2.89 in the fourth quarter of 2015. In the fourth quarter of 2014, profit attributable to the Company's shareholders had totalled $16.3 million, resulting in basic and diluted earnings per share of $2.33.

Outlook

The Company is seeing a slight recovery in sales growth in the U.S. fruit juice and drink market. In the Canadian market, the situation is different, as industry volumes are down slightly given food price increases due to the impact of a low Canadian dollar. The competitive environment in Canada remains challenging, and the Company does not see any signs of competitive activity diminishing in 2016. The Company is seeking to limit the impact of this increased competition through adjustments to its sales and marketing strategies, national brand product innovation, and continued private label customer development.

The Company's sales were up 22.7% in 2015. Excluding foreign exchange impacts and the A&E acquisition, the adjusted growth rate was 2.3%. Barring any major 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 Lassone

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

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