Maple Leaf Foods Reports Results for Second Quarter 2010

TORONTO, July 29 /CNW/ - Maple Leaf Foods Inc. (TSX: MFI) today reported its financial results for the second quarter ended June 30, 2010.

    
    -  Adjusted Operating Earnings increased 20% to $52.2 million from
       $43.6 million last year.
    -  Adjusted EPS increased 42% to $0.17 compared to $0.12 last year.
    -  Net earnings, which include a non-cash pre-tax charge of $20.7 million
       due to the change in fair value of long-term interest rate swaps,
       were $3.0 million compared to $4.9 million last year.
    

Note: Adjusted Operating Earnings measures are defined as earnings from operations before restructuring and other related costs, other income and the impact of the change in fair value of interest rate swaps. Adjusted Earnings per Share ("Adjusted EPS") measures are defined as basic earnings per share adjusted for the impact of restructuring and other related costs and the impact of the change in fair value of interest rate swaps, net of tax and non-controlling interest. Refer to the section entitled Reconciliation of Non-GAAP Financial Measures at the end of this news release.

"We are very pleased with the continued steady improvements across our business in spite of challenging market conditions." said Michael H. McCain, President and CEO. "The protein business saw healthy improvements in financial performance while facing significant raw material cost increases. We expect this trend of improvement to continue. While our bakery business earnings were off slightly from year ago, there was a solid recovery in margin towards more normal levels that we expect to continue in the second half of the year."

    
    Financial Overview
    ------------------
    

Sales for the second quarter decreased 4% to $1,271.4 million compared to $1,320.8 million last year. Sales declined due to currency impacts on U.S. and U.K. bakery operations and fresh pork sales, and lower sales volumes in prepared meats. These impacts were partly offset by higher sales values of fresh pork. Adjusted Operating Earnings increased 20% to $52.2 million compared to $43.6 million last year, mostly due to better performance in the Meat Products Group.

Net earnings, which include a non-cash pre-tax charge of $20.7 million due to the change in fair value of long-term interest rate swaps not designated in a formal hedging relationship, were $3.0 million in the second quarter of 2010 compared to $4.9 million last year. The impact of the interest rate swaps was partly offset by the benefits of increased Adjusted Operating Earnings and lower restructuring costs and interest expense.

    
    Business Segment Review
    -----------------------

    Following is a summary of sales by business segment:

    -------------------------------------------------------------------------
                                       Second Quarter         Year-to-Date
                                  -------------------------------------------
    ($ millions)                       2010       2009       2010       2009
    -------------------------------------------------------------------------
    Meat Products Group              $815.7     $830.4   $1,583.9   $1,652.6
    Agribusiness Group                 54.1       55.0       95.9       99.6
    -------------------------------------------------------------------------
    Protein Group                    $869.8     $885.4   $1,679.8   $1,752.2
    Bakery Products Group             401.6      435.4      783.1      847.9
    -------------------------------------------------------------------------
    Sales                          $1,271.4   $1,320.8   $2,462.9   $2,600.1
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    

Following is a summary of Adjusted Operating Earnings by business segment:

    
                                       Second Quarter         Year-to-date
    -------------------------------------------------------------------------
    ($ thousands)                      2010       2009       2010       2009
    -------------------------------------------------------------------------
    Meat Products Group             $14,443     $1,683    $28,656    $13,034
    Agribusiness Group               13,838     16,311     20,298     18,456
    -------------------------------------------------------------------------
    Protein Group                   $28,281    $17,994    $48,954    $31,490
    Bakery Products Group            26,239     27,984     42,983     47,509
    Non-allocated Costs(i)           (2,288)    (2,337)    (5,808)    (3,759)
    -------------------------------------------------------------------------
    Adjusted Operating Earnings     $52,232    $43,641    $86,129    $75,240
    -------------------------------------------------------------------------

    (i) Non-allocated costs comprise costs related to systems conversion and
        consulting fees. Management believes that not allocating these costs
        provides a more comparable assessment of segmented operating results.

    Meat Products Group
    -------------------
    

Includes value-added prepared meats, chilled meal entrees and lunch kits; and fresh pork, poultry and turkey products sold to retail, foodservice, industrial and convenience channels. Includes leading Canadian brands such as Maple Leaf(R), Schneiders(R) and many leading sub-brands.

Sales for the second quarter declined 2% to $815.7 million from $830.4 million in the second quarter last year. Price increases in the prepared meats business had the expected effect of reducing volumes in the short-term as consumers adjust to new price levels. Additionally, the impact of a stronger Canadian dollar on fresh pork sales and the exit of a non-core business category reduced sales. These impacts were partly offset by improved pork markets and increased net pricing in prepared meats.

Adjusted Operating Earnings in the Meat Products Group increased to $14.4 million compared to $1.7 million last year reflecting better results in the Company's fresh poultry operations due to improved markets and operating efficiencies. Earnings in the prepared meats business were impacted by higher meat prices and lower volumes. Meat prices continued to be significantly higher than the prior year, following very material increases in December 2009. The Company began implementing price adjustments in the second quarter and will complete this process in the third quarter. As a result, increased raw material costs were only partly recovered during the second quarter. Earnings from pork primary processing declined as export margins were reduced by the stronger Canadian dollar. This decline was partly offset by improved North American industry market conditions. During the second quarter the Company initiated the process to sell its primary pork processing plant in Burlington, Ontario which processes approximately two million hogs annually.

    
    Agribusiness Group
    ------------------
    

Consists of Canadian hog production and animal by-product recycling operations.

Agribusiness Group sales declined 2% to $54.1 million from $55.0 million in the second quarter last year due to lower sales prices in the rendering operations.

Adjusted Operating Earnings for the Agribusiness Group decreased to $13.8 million from $16.3 million as lower by-product recycling results were only partly offset by improvements in hog production. North American hog production operations returned to profitability in the second quarter of 2010 driven by higher hog prices and the Company's earnings improved as a result, although this benefit was partly offset by the stronger Canadian dollar and government support to compensate hog producers for losses received last year in the second quarter.

    
    Bakery Products Group
    ---------------------
    

Includes fresh and frozen bakery products, including breads, rolls, bagels, specialty and artisan breads, sweet goods, prepared sandwiches, and fresh pasta and sauces sold to retail, foodservice and convenience channels. It includes national brands such as Dempster's(R), Tenderflake(R), Olivieri(R) and New York Bakery Co(R), and many leading regional brands.

Sales in the Bakery Products Group in the second quarter 2010 declined 8% from $435.4 million to $401.6 million due to currency translation impacts of a stronger Canadian dollar on bakery sales in the U.S. and U.K. and lower sales volumes in the U.K. and North American frozen bakery businesses.

Adjusted Operating Earnings in the Bakery Products Group declined to $26.2 million from $28.0 million last year, mostly due to lower sales volumes in the U.S. and U.K. frozen operations. Management continues to expect the impact of lower volumes in North America to be transitory and is taking steps to reduce the cost base in the Company's U.K. operations.

Second quarter earnings in the fresh bakery operations increased slightly compared to the prior year. While the business benefited mostly from a stronger Canadian dollar, which reduced the cost of U.S. dollar priced ingredients, this was largely offset by inflationary costs and increased brand support. Brand investment included advertising and promotional expenses to support Dempster's(R) Oven Fresh(TM), Dempster's(R) Pita, and the new Dempster's(R) Smart(TM) 16, a line extension of Dempster's(R) Smart(TM), which includes 16 whole grains and reduced sodium.

    
    Other Matters
    -------------
    

On July 28, 2010, Maple Leaf Foods Inc. declared a dividend of $0.04 per share payable on September 30, 2010 to shareholders of record at the close of business on September 6, 2010. Unless indicated otherwise by the Company in writing at or before the time the dividend is paid, these dividends will not be considered an eligible dividend for the purposes of the "Enhanced Dividend Tax Credit System".

It is currently anticipated that none of the dividends the Company will pay in 2010 will be considered an eligible dividend for the purposes of the "Enhanced Dividend Tax Credit System".

An investor presentation related to the Company's second quarter financial results is available at www.mapleleaf.com and can be found under Investor Relations on the Quarterly Results page. A conference call will be held at 2:30 p.m. EDT on July 29, 2010 to review Maple Leaf Foods' second quarter financial results. To participate in the call, please dial 416-340-2216 or 866-226-1792. For those unable to participate, playback will be made available an hour after the event at 416-695-5800/800-408-3053 (Passcode 6113830 followed by the number sign).

A webcast presentation of the second quarter financial results will also be available at http://investor.mapleleaf.ca via a link: http://bellwebcasting.ca/audience/index.asp?eventid=99381219

The Company's full financial statements and related Management's Discussion and Analysis are available for download on the Company's website.

    
    Forward-Looking Statements
    --------------------------
    

This document contains, and the Company's oral and written public communications often contain, forward-looking statements that are based on current expectations, estimates, forecasts and projections about the industries in which the Company operates and beliefs and assumptions made by the Management of the Company. Such statements include, but are not limited to, statements with respect to objectives and goals, as well as statements with respect to beliefs, plans, expectations, anticipations, estimates and intentions. Specific statements include, but are not limited to, statements with respect to expectations concerning improving trends in operational results and expectations regarding actions to reduce costs, restore volumes and/or increase prices. Words such as "expect," "anticipate," "intend," "attempt," "may," "will," "plan," "believe," "seek," "estimate," and variations of such words and similar expressions are intended to identify such forward-looking statements. These statements are not guarantees of future performance and involve assumptions and risks and uncertainties that are difficult to predict.

In addition, expectations concerning performance of the Company's business in general are based on a number of factors and assumptions including, but not limited to: the condition of the Canadian, United States, United Kingdom and Japanese economies; the rate of exchange of the Canadian dollar to the U.S. dollar, British pound and Japanese yen; expectations regarding actions to reduce costs, restore volumes and/or increase prices; the availability and prices of raw materials, energy and supplies; product pricing; the availability of insurance; the competitive environment and related market conditions; improvement of operating efficiencies whether as a result of the protein business transformation or otherwise; continued access to capital; the cost of compliance with environmental and health standards; no adverse results from ongoing litigation that would not be covered by insurance; no unexpected actions of domestic and foreign governments and the general assumption that none of the risks identified under "Risk Factors" in the Company's Annual Management's Discussion and Analysis for the year ended December 31, 2009 will materialize. All of these assumptions have been derived from information currently available to the Company including information obtained by the Company from third-party sources. These assumptions may prove to be incorrect in whole or in part. In addition, actual results may differ materially from those expressed, implied or forecasted in such forward looking statements, which reflect the Company's expectations only as of the date hereof.

Factors that could cause actual results or outcomes to differ materially from the results expressed, implied or forecasted by forward-looking statements are discussed more fully in the Company's Annual Management's Discussion and Analysis for the year ended December 31, 2009 including the section entitled "Risk Factors" that is available on SEDAR at www.sedar.com. The Company does not intend to, 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.

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 2009.

Reconciliation of Non-GAAP Financial Measures

The following non-GAAP measures are referred to in this news release: Adjusted Operating Earnings and Adjusted EPS. Management believes that these non-GAAP measures provide useful information to both Management and investors in measuring the financial performance of the Company for the reasons outlined below. These measures do not have a standardized meaning prescribed by Canadian GAAP and therefore they may not be comparable to similarly titled measures presented by other publicly traded companies and should not be construed as an alternative to other financial measures determined in accordance with Canadian GAAP.

Adjusted Operating Earnings

The following table reconciles earnings from operations before restructuring and other related costs, other income (expense) and the impact of the change in fair value of non-designated interest rate swaps to net earnings as reported under Canadian GAAP in the unaudited interim period consolidated statements of earnings for the three month and six month periods ended as indicated below. Management believes that this is the most appropriate basis on which to evaluate operating results, as restructuring and other related costs, other income (expense) and the change in fair value of non-designated interest rate swaps are not representative of operational results.

    
    -------------------------------------------------------------------------
    ($ thousands)                    Three months ended     Six months ended
                                           June 30,              June 30,
    -------------------------------------------------------------------------
                                       2010       2009       2010       2009
    -------------------------------------------------------------------------
    Net earnings                   $  2,967   $  4,899   $ 11,721   $  7,770
    Non-controlling interest          2,104      2,293      3,406      3,866
    Income Taxes                      2,549      3,622      6,629      5,779
    -------------------------------------------------------------------------
    Earnings from operations
     before income taxes           $  7,620   $ 10,814   $ 21,756   $ 17,415
    -------------------------------------------------------------------------
    Interest expense                 16,613     20,764     32,740     42,107
    -------------------------------------------------------------------------
    Restructuring and other
     related costs                    7,453     13,852     11,416     19,186
    -------------------------------------------------------------------------
    Change in the fair value of
     non-designated interest rate
     swaps                           20,748          -     20,748          -
    -------------------------------------------------------------------------
    Other income                       (202)    (1,789)      (531)    (3,468)
    -------------------------------------------------------------------------
    Adjusted Operating Earnings    $ 52,232   $ 43,641   $ 86,129   $ 75,240
    -------------------------------------------------------------------------
    

Adjusted Earnings per Share

The following table reconciles Adjusted Earnings per share to basic earnings per share as reported under Canadian GAAP in the unaudited interim period consolidated statements of earnings for the three and six month periods ended as indicated below. Management believes this is the most appropriate basis on which to evaluate financial results as restructuring and other related costs and the change in the fair value of non-designated interest rate swaps are not representative of operational results.

    
    -------------------------------------------------------------------------
    ($ per share)                    Three months ended     Six months ended
                                           June 30,              June 30,
    -------------------------------------------------------------------------
                                       2010       2009       2010       2009
    -------------------------------------------------------------------------
    Basic Earnings per Share       $   0.02   $   0.04   $   0.09   $   0.06
    -------------------------------------------------------------------------
    Restructuring and other related
     costs(i)                          0.04       0.08       0.06       0.11
    -------------------------------------------------------------------------
    Change in the fair value of
     non-designated interest rate
     swaps                             0.11          -       0.11          -
    -------------------------------------------------------------------------
    Adjusted Earnings per
     Share(ii)                     $   0.17   $   0.12   $   0.26   $   0.17
    -------------------------------------------------------------------------

    (i)  Includes per share impact of restructuring and other related costs,
         net of tax and non-controlling interest.
    (ii) Includes per share impact of the change in fair value of non-
         designated interest rate swaps, net of tax.



                  Consolidated Interim Financial Statements
                  (Expressed in Canadian dollars)

                  MAPLE LEAF FOODS INC.

                  Six months ended June 30, 2010 and 2009



    MAPLE LEAF FOODS INC.
    Consolidated Balance Sheets
    (In thousands of Canadian dollars)

    -------------------------------------------------------------------------
                                             As at        As at        As at
                                           June 30,     June 30, December 31,
                                              2010         2009         2009
    -------------------------------------------------------------------------
                                        (Unaudited)  (Unaudited)
    ASSETS

    Current assets
      Cash and cash equivalents        $    24,772  $   207,795  $    29,316
      Accounts receivable                  170,857      183,238      200,317
      Inventory                            374,695      388,006      349,909
      Income and other taxes recoverable    21,478       25,922       18,067
      Future tax asset                       8,706       24,763        4,301
      Prepaid expenses and other assets     24,092       42,356       15,328
      -----------------------------------------------------------------------
                                       $   624,600  $   872,080  $   617,238
    Property and equipment               1,129,883    1,159,897    1,135,056
    Other long-term assets                 336,791      331,966      328,063
    Future tax asset                        46,614       23,953       22,116
    Goodwill                               855,634      877,678      857,278
    Other intangible assets                 96,517      101,281       97,713
    -------------------------------------------------------------------------
                                       $ 3,090,039  $ 3,366,855  $ 3,057,464
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    LIABILITIES AND SHAREHOLDERS' EQUITY

    Current liabilities
      Bank indebtedness                $     8,071  $     9,511  $     4,247
      Accounts payable and accrued
       charges                             486,242      528,190      489,182
      Current portion of long-term debt    466,950      375,508      206,147
      Other current liabilities             16,006       51,355       37,837
      -----------------------------------------------------------------------
                                       $   977,269  $   964,564  $   737,413
    Long-term debt                         582,670      939,808      834,557
    Future tax liability                    48,155       45,787       27,851
    Other long-term liabilities            204,280      168,905      187,523
    Non-controlling interest                82,353       77,372       81,070
    Shareholders' equity                 1,195,312    1,170,419    1,189,050
    -------------------------------------------------------------------------
                                       $ 3,090,039  $ 3,366,855  $ 3,057,464
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------



    MAPLE LEAF FOODS INC.
    Consolidated Statements of Earnings
    (In thousands of Canadian dollars, except share amounts)

    -------------------------------------------------------------------------
                                Three months ended         Six months ended
                                      June 30,                  June 30,
    (Unaudited)                  2010         2009         2010         2009
    -------------------------------------------------------------------------

    Sales                 $ 1,271,366  $ 1,320,803  $ 2,462,873  $ 2,600,102
    Cost of goods sold      1,090,362    1,152,600    2,121,233    2,264,687
    -------------------------------------------------------------------------
    Gross margin          $   181,004  $   168,203  $   341,640  $   335,415
    Selling, general and
     administrative
     expenses                 128,772      124,562      255,511      260,175
    -------------------------------------------------------------------------
    Earnings from
     operations before
     the following:       $    52,232  $    43,641  $    86,129  $    75,240
    Restructuring and
     other related costs       (7,453)     (13,852)     (11,416)     (19,186)
    Change in fair value
     of non-designated
     interest rate swaps      (20,748)           -      (20,748)           -
    Other income                  202        1,789          531        3,468
    -------------------------------------------------------------------------
    Earnings from
     operations before
     interest and income
     taxes                 $   24,233  $    31,578  $    54,496  $    59,522
    Interest expense           16,613       20,764       32,740       42,107
    -------------------------------------------------------------------------
    Earnings from
     operations before
     income taxes          $    7,620  $    10,814  $    21,756  $    17,415
    Income taxes                2,549        3,622        6,629        5,779
    -------------------------------------------------------------------------
    Earnings from operations
     before non-controlling
     interest              $    5,071  $     7,192  $    15,127  $    11,636
    Non-controlling interest    2,104        2,293        3,406        3,866
    -------------------------------------------------------------------------
    Net earnings           $    2,967  $     4,899  $    11,721  $     7,770
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Basic earnings per
     share                 $     0.02  $      0.04  $      0.09  $      0.06
    Diluted earnings per
     share                 $     0.02  $      0.04  $      0.08  $      0.06

    -------------------------------------------------------------------------

    Weighted average number
     of shares (millions)       135.2        126.7        135.0        126.7

    -------------------------------------------------------------------------



    MAPLE LEAF FOODS INC.
    Consolidated Statements of Comprehensive Income
    (In thousands of Canadian dollars)

    -------------------------------------------------------------------------
                                Three months ended         Six months ended
                                      June 30,                  June 30,
    (Unaudited)                  2010         2009         2010         2009
    -------------------------------------------------------------------------

    Net earnings          $     2,967  $     4,899  $    11,721  $     7,770
    Other comprehensive
     income (loss)
      Change in accumulated
       foreign currency
       translation
       adjustment              12,877        8,527       (5,239)       7,180
      Change in unrealized
       derivative loss on
       cash flow hedges           823        8,300        2,165       12,821
    -------------------------------------------------------------------------
                          $    13,700  $    16,827  $    (3,074) $    20,001
    -------------------------------------------------------------------------
    Comprehensive income  $    16,667  $    21,726  $     8,647  $    27,771
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------



    Consolidated Statements of Retained Earnings
    (In thousands of Canadian dollars)

    -------------------------------------------------------------------------
                                                    Six months ended June 30,
    (Unaudited)                                            2010         2009
    -------------------------------------------------------------------------

    Retained earnings, beginning of period          $   344,839  $   314,649
    Net earnings                                         11,721        7,770
    Adoption of new accounting standard                       -         (207)
    Dividends declared ($0.08 per share;
     2009: $0.08 per share)                             (10,811)     (10,130)
    Premium on shares issued from Restricted Share
     Unit Trust                                          (2,665)           -

    -------------------------------------------------------------------------
    Retained earnings, end of period                $   343,084  $   312,082
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------



    MAPLE LEAF FOODS INC.
    Consolidated Statements of Cash Flows
    (In thousands of Canadian dollars)

    -------------------------------------------------------------------------
                                Three months ended         Six months ended
                                      June 30,                  June 30,
    (Unaudited)                  2010         2009         2010         2009
    -------------------------------------------------------------------------

    CASH PROVIDED BY (USED IN):

    Operating activities
      Net earnings        $     2,967  $     4,899  $    11,721  $     7,770
      Add (deduct) items
       not affecting cash:
        Depreciation and
         amortization          36,253       38,910       73,798       77,278
        Stock-based
         compensation           4,441        4,547        8,881        9,113
        Non-controlling
         interest               2,104        2,293        3,406        3,866
        Future income taxes       547         (906)      (9,698)      (2,844)
        Loss (gain) on sale
         of property and
         equipment                145           55       (1,098)         164
        Gain on sale of
         investments                -         (501)           -         (501)
        Amortization of
         terminated
         interest rate swap       502          503        1,005        1,101
        Change in fair value
         of non-designated
         interest rate swaps   20,748            -       20,748            -
        Change in fair value
         of  derivative
         financial instruments     34        2,565       (2,202)     (10,242)
      Decrease (increase) in
       net pension asset         (635)         704          206        1,099
      Change in provision for
       restructuring and
       other related costs      4,043       10,250        4,225       12,904
      Other                     3,321       (9,728)       1,275       (5,327)
      Change in non-cash
       operating working
       capital                (34,848)     (63,077)      (8,223)    (142,698)
    -------------------------------------------------------------------------
    Cash provided by
     (used in) operating
     activities           $    39,622  $    (9,486) $   104,044  $   (48,317)
    -------------------------------------------------------------------------

    Financing activities
      Dividends paid      $    (5,417) $    (5,064) $   (10,811) $   (10,130)
      Dividends paid to
       non-controlling
       interest                  (156)        (156)        (442)        (361)
      Net decrease in
       long-term debt         (36,084)     (32,450)     (26,609)     (33,195)
      Increase in share
       capital                      -            -           40            -
      Purchase of treasury
       stock                     (496)           -         (496)           -
      Increase in deferred
       financing costs         (1,694)           -       (1,694)           -
      Other                      (575)       2,511       (1,252)       2,728
    -------------------------------------------------------------------------
    Cash used in financing
     activities           $   (44,422) $   (35,159) $   (41,264) $   (40,958)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Investing activities
      Additions to property
       and equipment      $   (42,161) $   (36,015) $   (70,864) $   (93,687)
      Proceeds from sale
       of property and
       equipment                  317       22,780        2,489       23,393
      Proceeds from sale
       of investments               -        1,540            -        1,540
      Purchase of Canada
       Bread Shares            (2,690)           -       (2,690)           -
      Other                      (132)         239          (83)        (311)
    -------------------------------------------------------------------------
    Cash used in investing
     activities           $   (44,666) $   (11,456) $   (71,148) $   (69,065)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Decrease in cash and
     cash equivalents     $   (49,466) $   (56,101) $    (8,368) $  (158,340)
    Net cash and cash
     equivalents,
     beginning of period       66,167      254,385       25,069      356,624
    -------------------------------------------------------------------------
    Net cash and cash
     equivalents, end
     of period            $    16,701  $   198,284  $    16,701  $   198,284
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------



    MAPLE LEAF FOODS INC.
    Segmented Financial Information
    (In thousands of Canadian dollars)

    -------------------------------------------------------------------------
                                Three months ended         Six months ended
                                      June 30,                  June 30,
    (Unaudited)                  2010         2009         2010         2009
    -------------------------------------------------------------------------

    Sales
      Meat Products Group $   815,735  $   830,413  $ 1,583,915  $ 1,652,607
      Agribusiness Group       54,057       54,977       95,865       99,565
      Bakery Products Group   401,574      435,413      783,093      847,930
    -------------------------------------------------------------------------
                          $ 1,271,366  $ 1,320,803  $ 2,462,873  $ 2,600,102
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Earnings from operations before restructuring
     and other related costs, change in fair
     value of non-designated interest rate swaps
     and other income
      Meat Products Group $    14,443  $     1,683  $    28,656  $    13,034
      Agribusiness Group       13,838       16,311       20,298       18,456
      Bakery Products Group    26,239       27,984       42,983       47,509
      Non-allocated costs      (2,288)      (2,337)      (5,808)      (3,759)
    -------------------------------------------------------------------------
                          $    52,232  $    43,641  $    86,129  $    75,240
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Capital expenditures
      Meat Products Group $    19,064  $    20,711  $    32,690  $    51,960
      Agribusiness Group        5,522        2,141        9,713        5,189
      Bakery Products Group    17,575       13,163       28,461       36,538
    -------------------------------------------------------------------------
                          $    42,161  $    36,015  $    70,864  $    93,687
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Depreciation and
     amortization
      Meat Products Group $    18,856  $    20,033  $    38,787  $    39,611
      Agribusiness Group        4,179        4,037        8,324        8,071
      Bakery Products Group    13,218       14,840       26,687       29,596
    -------------------------------------------------------------------------
                          $    36,253  $    38,910  $    73,798  $    77,278
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    -------------------------------------------------------------------------
                                             As at        As at        As at
                                           June 30,     June 30, December 31,
                                              2010         2009         2009
    -------------------------------------------------------------------------
                                        (Unaudited)  (Unaudited)
    Total assets
      Meat Products Group              $ 1,654,609  $ 1,705,527  $ 1,653,389
      Agribusiness Group                   275,964      291,564      287,057
      Bakery Products Group                956,765    1,002,024      955,469
      Non-allocated assets                 202,701      367,740      161,549
    -------------------------------------------------------------------------
                                       $ 3,090,039  $ 3,366,855  $ 3,057,464
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Goodwill
      Meat Products Group              $   442,231  $   450,432  $   442,943
      Agribusiness Group                    14,136       14,136       14,136
      Bakery Products Group                399,267      413,110      400,199
    -------------------------------------------------------------------------
                                       $   855,634  $   877,678  $   857,278
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    

SOURCE Maple Leaf Foods Inc.

For further information: For further information: Lynda Kuhn, SVP Communications, 416-926-2026, www.mapleleaf.com


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