Van Houtte posts earnings per share of $0.95 before unusual items for fiscal 2007



    MONTREAL, June 7 /CNW Telbec/ -

    N.B. Unless otherwise indicated, amounts are in Canadian dollars. Amounts
    per share are on a fully diluted basis.

    
    TABLE 1: KEY FIGURES, FOURTH QUARTER AND FISCAL YEAR 2006-2007
    (In thousands of dollars, except amounts per share and % change. Amounts
    per share are fully diluted.)

    -------------------------------------------------------------------------
                                Quarters ended           Year ended
    -------------------------------------------------------------------------
                          March    April       %     March     April       %
                       31, 2007  1, 2006  Change  31, 2007   1, 2006  Change
    -------------------------------------------------------------------------
    Before unusual
     items
    -------------------------------------------------------------------------
    Revenues             94,542   91,122     3.8   388,158   376,173     3.2
    -------------------------------------------------------------------------
    EBITDA               18,597   17,941     3.7    72,878    69,256     5.2
    -------------------------------------------------------------------------
    Net earnings          5,868    6,464    (9.2)   20,296    22,506    (9.8)
    -------------------------------------------------------------------------
    Net earnings
     per share ($)         0.28     0.30    (6.7)     0.95      1.05    (9.5)
    -------------------------------------------------------------------------
    Including unusual
     items
    -------------------------------------------------------------------------
    Net earnings         10,341    6,464    60.0    24,961    22,506    10.9
    -------------------------------------------------------------------------
    Net earnings
     per share ($)         0.48     0.30    60.0      1.17      1.05    11.4
    -------------------------------------------------------------------------
    N.B. The reader will find the fiscal 2007 MD&A, as well as other
    information pertaining to Van Houtte, including the 2006 annual report
    and information form on the Company's Web site at www.vanhoutte.com and
    at SEDAR at www.sedar.com.

    Conference Call

    There will be a conference call today at 2:30 p.m. To participate, please
dial one of the following numbers after 2:15 p.m.: (514) 807-8791 or
1 800-732-0232. Only institutional analysts will be invited to ask questions.

    Recent Developments:

    - Van Houtte signed a definitive acquisition agreement to be acquired and
      taken private by a Company controlled by Littlejohn & Co. LLC,
      ("Littlejohn"), a Greenwich, Connecticut-based private equity firm, for
      a consideration of $25.00 per share.

    - Van Houtte continued executing the agreement with the U.S.-based Kroger
      Supermarkets chain. The improved freshly brewed coffee program is now
      available in 290 of the chain's 1,000 points of sale.

    - As per the Chevron agreement, Van Houtte continued to roll out its
      coffee stations in the company's corporate ExtraMile convenience stores
      on the U.S. West Coast. As of today, 140 such stations have been set
      up.

    Results

    The Board of Directors of Van Houtte Inc. ("Van Houtte" or the "Company")
(TSE: VH) today approved the Company's audited financial statements for the
fiscal year ended March 31, 2007.

    Highlights:

    - Excluding unusual items, earnings per share were $0.95 in 2007
      (Table 1), compared to $1.05 last year. If comparable tax rules were
      applied, last year's earnings per share would have been $0.93
      (Table 5), for an increase of 2.2%.

    - Quarterly earnings per share, excluding unusual items, were $0.28
      (Table 1), against $0.30 a year earlier, or $0.26 (Table 5) if
      comparable tax rules are applied, for an increase of 7.7%.

    - Consolidated EBITDA (non-GAAP measure) advanced 5.2% for the year and
      3.7% in the last quarter.

    - Manufacturing and Marketing sales were up 1.7% for the year and 3.3%
      for the quarter, reflecting an increase in shipments of the Van Houtte
      brand and a decline in sales by VKI Technologies.

    - Shipments of the Van Houtte brand rose 7.0% during the year, both to
      the retail and Coffee Services networks. Quarterly shipments of the
      brand rose 2.3%.

    - Manufacturing and Marketing EBITDA grew 8.5% for the year but fell 6.9%
      in the last quarter as a result of an increase in the price of green
      coffee and fuel.

    - Coffee Services' sales moved ahead 4.2% in 2007 (6.5% on a constant
      exchange rate basis) and 6.3% for the quarter (5.1% on a constant
      exchange rate basis).

    - Coffee Services EBITDA was up 5.7% in 2007 and 18.7% in the fourth
      quarter. The strong growth towards year-end was fuelled by a solid
      performance in Canada and an improvement in U.S. operations both in
      terms of growth and operating efficiency.

    - The second instalment of the special dividend of $0.25 per share will
      be paid out on June 15, 2007 to shareholders of record on June 7, 2007.

    "The fundamental work completed over the past few years gives us a solid
base for future growth," stated Van Houtte chief executive Jean-Yves Monette.
"We have every reason to be proud of our solid progress in the U.S. this past
year. Moreover, there are opportunities for growth in the development of
continental multi-location accounts. The fact that we are one of the few
companies that can manage and serve such accounts gives us an enduring
competitive edge.
    "On the home consumption side, we are solidly entrenched as market leaders
in Quebec. Most of our growth potential therefore lies in the rest of Canada
and in some niches in the U.S. In the past few years, we have expanded our
supermarket presence in Ontario and Western Canada. The visibility and growing
reputation of the Van Houtte brand on these markets, combined with our
marketing efforts, should help us deepen our footprint in these networks and
stimulate sales growth."


    TABLE 2: SEGMENT RESULTS, FISCAL 2007
    (In thousands of dollars except percent change)
    -------------------------------------------------------------------------
                                          Year ended  Year ended    % Change
                                            March 31,    April 1,
                                                2007        2006
    -------------------------------------------------------------------------
    REVENUES
    Manufacturing and Marketing              175,603     172,680         1.7
    Coffee Services                          278,766     267,469         4.2
    Intersegment                             (66,211)    (63,976)        3.5
                                              ------      ------         ---
    -------------------------------------------------------------------------
    Total                                    388,158     376,173         3.2
                                             -------     -------         ---
                                             -------     -------         ---
    -------------------------------------------------------------------------
    REVENUES
    Manufacturing and Marketing               35,754      32,944         8.5
    Coffee Services                           44,125      41,748         5.7
    General expenses                          (7,001)     (5,436)       28.8
                                               -----       -----        ----
    -------------------------------------------------------------------------
    Total                                     72,878      69,256         5.2
                                              ------      ------         ---
                                              ------      ------         ---
    -------------------------------------------------------------------------


    TABLE 3: SEGMENT RESULTS, FOURTH QUARTER 2007
    (In thousands of dollars except percent change)
    -------------------------------------------------------------------------
                                             Quarter     Quarter    % Change
                                               ended       ended
                                            March 31,    April 1,
                                                2007        2006
    -------------------------------------------------------------------------
    REVENUES
    Manufacturing and Marketing               41,642      40,330         3.3
    Coffee Services                           70,465      66,307         6.3
    Intersegment                             (17,564)    (15,515)       13.2
                                              ------      ------        ----
    -------------------------------------------------------------------------
    Total                                     94,542      91,122         3.8
                                              ------      ------         ---
                                              ------      ------         ---
    -------------------------------------------------------------------------
    REVENUES
    Manufacturing and Marketing                7,569       8,121        (6.9)
    Coffee Services                           12,942      10,908        18.7
    General expenses                          (1,914)     (1,089)       75.8
                                               -----       -----        ----
    -------------------------------------------------------------------------
    Total                                     18,597      17,940         3.7
                                              ------      ------         ---
                                              ------      ------         ---
    -------------------------------------------------------------------------


    TABLE 4
    RECONCILIATION OF NET EARNINGS BEFORE UNUSUAL ITEMS AND NET EARNINGS,
    2006 AND 2007
    (In thousands of $ except per share amounts)
    -------------------------------------------------------------------------
                                                        March 31,    April 1,
                                                            2007        2006
    -------------------------------------------------------------------------
    Net earnings, before unusual items                    20,296      22,506
      Per share ($)                                         0.95        1.05
    Gain realized on sale of an investment                19,948           -
    Tax on past earnings                                 (13,712)          -
    Strategic review fees of value enhancement,
     net of $312 in taxes                                   (663)          -
    Write-down of the value of certain assets               (909)          -
    Net earnings                                          24,961      22,506
      Per share ($)                                         1.17        1.05
    -------------------------------------------------------------------------

    Unusual Items

    Sale of our interest in Keurig

    On June 16, 2006, we completed the sale of our interest in Keurig for 
US$34.1 million ($37.4 million at the date of the transaction). Of this
amount, US$7.4 million ($8.3 million at the date of the transaction) is being
held in escrow until June 15, 2007. This amount is held in escrow in order to
guarantee the vendor's representations and there is no indication that the
Company will not receive the full amount. This transaction gave rise to a
$19.9 million gain. No taxes will be due on this gain as it was offset in the
fourth quarter by the materialization of capital losses not recorded as tax
benefits.

    Amendment to the Taxation Act

    On May 9, 2006, the Quebec Minister of Revenue tabled a bill in the
National Assembly entitled the Act to amend the Taxation Act and other
legislative provisions (the "Act"), which came into force on June 13, 2006.
    The impact of the Act is to retroactively increase taxable earnings in
Quebec for prior years with the result that Van Houtte recorded a provision of
$15.8 million in the first quarter of 2007. In the second and third quarters,
we paid the Quebec government a sum of $7.3 million in this regard. However, a
notice of objection to the assessment was filed and we are exploring various
ways to reduce this retroactive charge. In the fourth quarter, we reduced our
estimate of income tax on past earnings from $15.8 to $13.7 million to reflect
the current status of our discussions with the Quebec government.
    This Act prospectively reconciles our effective tax rate with the combined
regulatory rate of the various jurisdictions in which we are taxable. It
therefore increases the tax expense on current earnings.
    To facilitate comparison between this and the last fiscal year, we
calculated what net earnings per share would have been for 2006 and for each
of its quarters had our income tax been calculated according to the amended
Act.

    TABLE 5
    CALCULATION OF NET EARNINGS AND EARNINGS PER SHARE FOR FISCAL 2006 GIVING
    PRO FORMA EFFECT TO THE PROVISIONS OF THE ACT TO AMEND THE TAXATION ACT
    AND OTHER LEGISLATIVE PROVISIONS IN FORCE SINCE JUNE 13, 2006
    -------------------------------------------------------------------------
                               Total
                         Fiscal 2006        Q4        Q3        Q2        Q1
    -------------------------------------------------------------------------
    Actual net earnings
     ($ thousands)            22,506     6,464     5,948     5,097     4,998
    -------------------------------------------------------------------------
    Pro forma net earnings
     ($ thousands)            19,834     5,632     5,496     4,391     4 316
    -------------------------------------------------------------------------
    Actual earnings
     per share ($)              1.05      0.30      0.28      0.24      0.23
    -------------------------------------------------------------------------
    Pro forma earnings
     per share ($)              0.93      0.26      0.26      0.21      0.20
    -------------------------------------------------------------------------

    Write-down of certain assets

    The Company adopted stricter rules as regards recording certain asset
items and other assets, including allowance for inventory obsolescence. We
made a non-recurring adjustment to give effect to these new measures,
resulting in devaluations and write-downs of $1.3 million ($0.9 million after
taxes).

    Strategic review fees of value enhancement

    In the second quarter, we began examining various value-creating
strategies. This review entailed non-recurring expenses of $1.0 million
($0.7 million after tax). Additional costs in the order of approximately
$3.5 million ($2.4 million after tax) incurred after year-end will be recorded
in the next quarter.

    Subsequent event

    As a result of a strategic review process initiated in October 2006 and
announced on January 12, 2007 (the "Announcement Date"), Van Houtte announced
on May 7, 2007 the signature of a definitive acquisition agreement to be
acquired and taken private by a Company controlled by Littlejohn & Co. LLC,
("Littlejohn"), a Greenwich, Connecticut-based private equity firm.
    Under the terms of the agreement, Littlejohn will acquire all of the
issued and outstanding shares of the Company for a consideration of $25.00 per
share. The total enterprise value of the transaction is approximately
$600 million, including the assumption of existing indebtedness. The $25.00
per share consideration represents a 44% premium over the volume-weighted
average price of $17.36 for the 20-day period ending prior to the Announcement
Date.

    Dividend

    In accordance with the Board resolution of August 30, 2006, the second
instalment ($0.25 per share) of the extraordinary dividend of $0.50 per share
will be paid on June 15, 2007, to shareholders of record on June 7, 2007.

    Forward-Looking Information

    This press release contains forward-looking statements reflecting Van
Houtte's objectives, estimates and expectations. Such statements may be marked
by the use of verbs such as "believe," "anticipate," "estimate" and "expect"
as well as the use of the future or conditional tense. By their very nature,
such statements involve risks and uncertainty. Consequently, results could
differ materially from the Company's projections or expectations. For
information on the nature of risk factors not specifically discussed in this
press release, the reader can consult Van Houtte's Management Discussion and
Analysis for the year ended March 31, 1007 under the heading "Risks and
Uncertainties", p. 19-20.

    About Van Houtte

    Founded in 1919, Van Houtte is one of North America's leading gourmet
coffee roasters, marketers and distributors. The Company roasts and markets
its gourmet coffees across Canada and the U.S. through distribution channels
that include coffee services, retail stores, café-bistros and online shopping.


                       (Financial information follows)



    Consolidated Balance Sheets
    March 31, 2007 and April 1, 2006
    (in thousands of dollars/audited)
                                                        March 31,    April 1,
                                                            2007        2006
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    ASSETS

    Current assets :
      Cash                                              $  4,884    $  5,796
      Accounts receivable                                 48,459      43,036
      Note receivable                                      8,320           -
      Inventories                                         29,539      29,972
      Prepaid expenses                                     3,320       3,553
      Future income taxes                                  1,571       1,804
    -------------------------------------------------------------------------
                                                          96,093      84,161

    Investments                                            2,641      20,121

    Fixed assets                                         116,604     118,474

    Goodwill                                             136,676     135,734

    Other assets                                          14,878      15,475

    Future income taxes                                    3,228       6,154
    -------------------------------------------------------------------------
                                                        $370,120    $380,119
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    LIABILITIES AND SHAREHOLDERS' EQUITY

    Current liabilities :
      Accounts payable and accrued liabilities          $ 44,369    $ 34,434
      Income taxes payable                                14,097       2,312
      Deferred income                                        747         372
      Current portion of long-term debt                    1,407       1,520
    -------------------------------------------------------------------------
                                                          60,620      38,638

    Long-term debt                                        51,073      93,589

    Other liabilities                                      3,135       1,799

    Future income taxes                                    1,201       1,498

    Non-controlling interest                               7,896       8,042

    Shareholders' equity :
      Capital stock                                      130,042     126,497
      Contributed surplus                                  1,795       2,461
      Retained earnings                                  132,177     124,766
      Currency translation adjustment                    (17,819)    (17,171)
    -------------------------------------------------------------------------
                                                         246,195     236,553

                                                        $370,120    $380,119
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    Consolidated Statements of Earnings
    (in thousands of dollars,
     except for earnings
     per share data)
                                    Quarters ended           Years ended
                                March 31,    April 1,   March 31,    April 1,
                                    2007        2006        2007        2006
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
                              (unaudited) (unaudited)   (audited)   (audited)
    Revenues                    $ 94,542    $ 91,122    $388,158    $376,173
    Cost of goods sold and
     operating expenses           75,945      73,182     315,280     306,917
    -------------------------------------------------------------------------
                                  18,597      17,940      72,878      69,256
    Depreciation and
     amortization                  9,007       8,622      36,105      33,790
    Write-down of the value
     of certain assets             1,337           -       1,337           -
    -------------------------------------------------------------------------
    Operating profit before
     the undernoted                8,253       9,318      35,436      35,466
    Financial expenses               743        (574)      4,271       2,382
    Strategy review fees of
     value enhancement               975           -         975           -
    Materialized gain on
     disposal of
     investment                       89           -     (19,948)          -
    -------------------------------------------------------------------------
    Earnings before income
     taxes                         6,446       9,892      50,138      33,084
    Income taxes                  (2,369)      3,082       9,544       8,665
    Prior year income taxes       (2,060)          -      13,712           -
    -------------------------------------------------------------------------
    Net earnings before
     the undernoted               10,875       6,810      26,882      24,419
    Share in net earnings of
     companies subject to
     significant influence             -           -           -          31
    Non-controlling interest        (534)       (346)     (1,921)     (1,944)
    -------------------------------------------------------------------------
    Net earnings                $ 10,341    $  6,464    $ 24,961    $ 22,506
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    EARNINGS PER SHARE
    Basic :
      Net earnings              $   0.48    $   0.30    $   1.17    $   1.05
    Diluted :
      Net earnings              $   0.48    $   0.30    $   1.16    $   1.05
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Weighted average number of
     shares outstanding
     (in thousands)               21,418      21,358      21,375      21,399
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Diluted weighted average
     number of shares
     (in thousands)               21,535      21,406      21,428      21,454
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    Consolidated Statements of Shareholders' Equity
    Years ended March 31, 2007 and April 1, 2006
    (In thousands of dollars)
                                        Contri-           Currency
                             Capital     buted  Retained   Transla-
                               Stock   Surplus  Earnings      tion     Total
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Balance, April 2,
     2005                   $128,250  $  2,043  $114,603  $(13,519) $231,377
    Net earnings                   -         -    22,506         -    22,506
    Dividends                      -         -    (9,183)        -    (9,183)
    Currency translation
     adjustment                    -         -         -    (3,652)   (3,652)
    Premium paid on
     redemption of
     subordinate voting
     shares                   (2,040)        -    (3,160)        -    (5,200)
    Issuance of shares           287         -         -         -       287
    Stock-based
     compensation                  -       418         -         -       418
    -------------------------------------------------------------------------
    Balance, April 1,
     2006                    126,497     2,461   124,766   (17,171)  236,553
    Net earnings                   -         -    24,961         -    24,961
    Dividends                      -         -   (17,550)        -   (17,550)
    Currency translation
     adjustment                    -         -         -      (648)     (648)
    Issuance of shares         3,545      (898)        -         -     2,647
    Stock-based
     compensation                  -       232         -         -       232
    -------------------------------------------------------------------------
    Balance, March 31,
     2007                   $130,042  $  1,795  $132,177  $(17,819) $246,195
    -------------------------------------------------------------------------


    Consolidated Statements of Cash Flows
    (in thousands of dollars)
                                    Quarters ended           Years ended
                                March 31,    April 1,   March 31,    April 1,
                                    2007        2006        2007        2006
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
                              (unaudited) (unaudited)   (audited)   (audited)
    CASH FLOWS FROM OPERATING
     ACTIVITIES

    Net earnings                $ 10,341    $  6,464    $ 24,961    $ 22,506
    Adjustments for :
      Depreciation of
       fixed assets                8,454       7,504      33,644      31,061
      Amortization of
       other assets                  553       1,118       2,461       2,729
      Amortization of
       financial expenses            144         144         620       1,405
      Future income taxes          2,175        (241)      2,857         356
      Pension expense and post
       employment benefits           481          (2)      1,336          (2)
      Change in fair value of
       interest rate swaps           (32)       (713)        119      (2,169)
      Non-controlling interest       534         346       1,921       1,944
      Accreted redemption value
       of preferred shares
       and dividends                   -      (1,559)          -      (1,559)
      Stock-based compensation       109          91         232         418
      Gain on disposal of
       fixed assets                 (168)       (105)       (358)       (314)
      Loss (gain) on disposal
       of businesses                 (26)       (385)       (897)       (921)
      Materialized gain on
       disposal of investment         89           -     (19,948)          -
      Other elements                 (15)        (31)        (15)        (21)
    -------------------------------------------------------------------------
                                  22,639      12,631      46,933      55,433

    Net changes in non-cash
     balances related to
     working capital items        (1,035)      1,231      10,492      (7,622)
    -------------------------------------------------------------------------
                                  21,604      13,862      57,425      47,811

    CASH FLOWS FROM INVESTING
     ACTIVITIES
    Business acquisitions            318         659        (435)     (9,545)
    Additions to fixed assets     (7,796)     (5,989)    (32,957)    (30,589)
    Proceeds from disposal of
     fixed assets                    558       2,219       1,553       3,105
    Proceeds from disposal
     of an investment                  -           -      29,096           -
    Acquisition of investments       (25)         50          19        (177)
    Increase in other assets        (343)       (782)     (1,274)     (1,187)
    -------------------------------------------------------------------------
                                  (7,288)     (3,843)     (3,998)    (38,393)

    CASH FLOWS FROM FINANCING
     ACTIVITIES
    Issue of subordinate
     voting shares                 2,647          98       2,647         287
    Redemption of subordinate
     voting shares for
     cancellation                      -           -           -      (5,200)
    Increase in long-term debt     2,000      12,118      41,081      65,197
    Decrease in long-term debt   (19,220)    (22,425)    (83,776)    (57,778)
    Dividends                     (1,719)     (1,602)    (12,184)     (9,183)
    Dividends paid to
     non-controlling
     shareholders of
     subsidiaries                   (521)       (477)     (1,914)     (1,973)
    -------------------------------------------------------------------------
                                 (16,813)    (12,288)    (54,146)     (8,650)
    Effect of exchange rate
     changes on cash
     denominated in foreign
     currency                       (302)        (54)       (193)       (310)
    -------------------------------------------------------------------------

    Net increase (decrease)
     in cash                      (2,799)     (2,323)       (912)        458

    Cash at the beginning          7,683       8,119       5,796       5,338
    -------------------------------------------------------------------------

    Cash at the end             $  4,884    $  5,796    $  4,884    $  5,796
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    Segmented Information
    (in thousands of dollars)
                                    Quarters ended           Years ended
                                March 31,    April 1,   March 31,    April 1,
                                    2007        2006        2007        2006
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
                              (unaudited) (unaudited)   (audited)   (audited)
    Business segments

    Revenues :

      Manufacturing and
       marketing                $ 41,642    $ 40,330    $175,603    $172,680

      Coffee services             70,464      66,307     278,766     267,469
    -------------------------------------------------------------------------
                                 112,106     106,637     454,369     440,149

      Intersegments              (17,564)    (15,515)    (66,210)    (63,976)
    -------------------------------------------------------------------------
                                  94,542      91,122     388,158     376,173
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Operating earnings before
     depreciation and
     amortization and financial
     expenses:

      Manufacturing and
       marketing                   7,569       8,121      35,754      32,944

      Coffee services             12,942      10,908      44,125      41,748
    -------------------------------------------------------------------------
                                  20,511      19,029      79,879      74,692

      General corporate
       expenses                   (1,914)     (1,089)     (7,001)     (5,436)
    -------------------------------------------------------------------------
                                $ 18,597    $ 17,940    $ 72,878    $ 69,256
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

                                                             Years ended
                                                        March 31,    April 1,
                                                            2007        2006
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
                                                        (audited)   (audited)
    Assets

      Manufacturing and marketing                       $113,473    $123,329

      Coffee services                                    276,732     266,576
    -------------------------------------------------------------------------
                                                         390,205     389,905

      Intersegments                                      (20,083)     (9,786)
    -------------------------------------------------------------------------
                                                        $370,122    $380,119
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    
    %SEDAR: 00002622EF




For further information:

For further information: Jean-Yves Monette, President and Chief
Executive Officer; Gérard Geoffrion, Executive Vice-President, Van Houtte
Inc., (514) 593-7711, www.vanhoutte.com

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