ROUGEMONT, QC, Feb. 15, 2019 /CNW Telbec/ - Lassonde Industries Inc. (TSX: LAS.A) (̎"Lassonde" or the "Company") is today announcing preliminary unaudited results for its fourth quarter and fiscal year ended December 31, 2018. These preliminary unaudited results are based on the information available to the Company on the release date of this press release and could vary once the preparation and audit work for the consolidated financial statements is completed. Lassonde expects that its financial results for the fourth quarter and fiscal year ended December 31, 2018 will be published on or around March 29, 2019.
Lassonde is providing this update to inform readers of downward variances between the preliminary estimates of its profit attributable to shareholders for fiscal 2018 and fourth-quarter 2018 and its actual profit attributable to shareholders for fiscal 2017 and fourth-quarter 2017.
The Company expects its fiscal 2018 sales to total $1,594 million compared to sales of $1,526.1 million in fiscal 2017, an increase of slightly more than 4%. Excluding the foreign exchange impact and the sales of Old Orchard Brands, LLC ("OOB") to maintain a comparable basis, the Company's sales should be approximately $1,528 million, an increase of approximately 0.1% when compared to fiscal 2017.
The Company's operating profit is expected to total approximately $105 million in fiscal 2018, down by approximately $28 million from $133.3 million in fiscal 2017. During fiscal 2018, OOB-acquisition-related expenses should be approximately $2 million. OOB expects to post operating profit of approximately $1 million. Excluding the impacts of the OOB acquisition, the decrease in the Company's operating profit should be approximately $27 million. The depreciation and amortization expense should total approximately $48 million for fiscal 2018 (approximately $3 million from OOB) versus $45.2 million in fiscal 2017.
For fiscal 2018, profit attributable to the Company's shareholders is expected to be approximately $66 million, down by approximately $24 million from $89.9 million in fiscal 2017. It should be noted, however, that the fiscal 2017 profit attributable to the Company's shareholders had benefited from a favourable $10.2 million impact arising from a lower federal corporate tax rate following the December 2017 U.S. tax reform. In addition, the costs of acquiring OOB are expected to have an unfavourable impact of approximately $1.3 million on the fiscal 2018 profit attributable to the Company's shareholders. When adjusted for these factors, the decrease in the profit attributable to the Company's shareholders is expected to be approximately $13 million.
The Company expects its fiscal 2018 fourth-quarter sales to total $425 million, a little less than 6% growth compared to sales of $402.6 million in the fourth quarter of 2017. Excluding the foreign exchange impact and OOB's sales to maintain a comparable basis, the Company's sales should be approximately $392 million, down a little less than 3% when compared to the same quarter of fiscal 2017.
The Company's operating profit should total approximately $25 million in the fourth quarter of 2018, down by approximately $17 million from $42.2 million in the fourth quarter of fiscal 2017. This decrease is fully attributable to lower profitability from the Company's U.S. operations that is due, among other factors, to a decrease slightly above 7% in the sales of the U.S. subsidiaries (when the foreign exchange impact and OOB's sales are excluded to maintain a comparable basis). The Company is adjusting its business model to mitigate rapidly rising input costs. It is aiming to improve its utilization of production capacity by replacing low-margin contracts with contracts that better reflect the current state of the U.S. market. However, a delay in finalizing one of these new contracts and strong pressure from the Company's main competitor in the United States have affected sales.
Furthermore, lower volume and inflation have had an unfavourable impact on production costs. The Company's results have also been affected by higher raw material costs, including resin costs, as well as higher transportation costs. The Company has been able to raise certain prices but not to the level of the cost increases of the past quarter. The Company expects OOB's results to have a negligible influence on its operating profit for the fourth quarter of 2018. The depreciation and amortization expense for the fourth quarter of 2018 should stand at approximately $13 million versus $11.3 million in the fourth quarter of 2017.
The Company expects its profit attributable to shareholders for the fourth quarter of 2018 to be approximately $15 million, down approximately $22 million from $37.2 million in the fourth quarter of fiscal 2017. It should be noted that the fourth quarter of 2017 had benefited from a favourable $10.2 million impact following the U.S. tax reform. Excluding the impacts of the 2017 U.S. tax reform on profit, profit attributable to the Company's shareholders should be down by approximately $12 million.
"The Company is diligently working to counter the impacts of higher input costs and to adjust its strategic position in a highly competitive environment. It should also be noted that a labour shortage, transportation costs, and customs duties on certain inputs are creating instability in its cost base in the United States. It is important to not sacrifice the Company's long-term position to satisfy the pressures for short-term profitability. We will make the necessary adjustments to our business model to respond to the disruptions in our U.S. market but, in doing so, will maintain our focus on innovation. We expect to benefit from the synergies generated by our recent acquisitions and we believe that the know-how of our employees is our biggest asset," said Pierre-Paul Lassonde, Chairman of the Board and Chief Executive Officer of Lassonde Industries Inc.
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 one of the two largest producers of store brand shelf-stable fruit juices and drinks in the United States and a major producer of cranberry sauces.
In 2018, Lassonde completed the acquisition of Old Orchard Brands, LLC ("OOB"), a fruit juice and beverage manufacturing company based in Sparta, Michigan. OOB's product portfolio consists of nearly 100 different varieties, including 100% juice, 100% juice blends, reduced-sugar juice cocktails, seasonal lemonades and flavoured teas. Moreover, OOB is a leader in ready-to-drink fruit juices and drinks in the Central United States. Old Orchard is also the second largest frozen juice concentrates brand in the United States.
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 2,200 people working in 15 plants across Canada and the United States. To learn more, visit www.lassonde.com.
SEDAR registration number: 00002099
Caution Concerning Forward-Looking Statements
In this document and in other documents filed with Canadian regulatory authorities or in other communications, the Company may from time to time make written or oral forward-looking statements within the meaning of applicable securities legislation. Forward-looking statements notably include estimates, expectations, forecasts, and projections of future investment spending, revenues, expenses, earnings, profit, indebtedness, financial position, losses, upcoming projects, business and management strategies, and business growth and expansion. In the context of this document, forward-looking statements are particularly used to discuss preliminary results, the rate of sales growth, and profit attributable to shareholders. The forward-looking statements contained herein are used to help readers better understand Lassonde's financial position and the results of its operations as at the dates presented and may not be appropriate for other purposes. Forward-looking statements can be recognized by such words as "may," "should," "believes," "predicts," "plans," "expects," "intends," "anticipates," "estimates," "projects," "objective," "continues," "proposes," "targets," or "aims" as well as words and expressions of a similar nature and whether they are used in the affirmative or negative or used in the conditional or future tense. Forward-looking statements also include any statements that do not refer to historical facts.
By their very nature, forward-looking statements are based on assumptions and involve inherent risks and uncertainties, both general and specific in nature. It is therefore possible that the forecasts, projections and other statements will not be achieved or will differ significantly from those expressed or implied in such forward-looking statements or could affect the extent to which a particular forecast, projection or other statement materializes. Although Lassonde believes that the expectations reflected in these forward-looking statements are reasonable, it can give no assurances that these expectations will prove to be correct. The forward-looking statements are based on certain key assumptions made by the Company, in particular certain assumptions presented in the "Outlook" heading of its quarterly and annual MD&As.
Readers are cautioned against placing undue reliance on forward-looking statements when making decisions, as the actual results could differ considerably from the opinions, plans, objectives, expectations, forecasts, estimates and intentions expressed in such forward-looking statements due to various significant factors. Such factors include, among others, the economic, industrial, competitive and regulatory environment in which Lassonde operates or factors that are likely to have an impact on its operations, its ability to attract and retain customers, consumers, and qualified staff, the availability and cost of raw materials and transportation, its operating costs, and the price of its finished products in the various markets where it operates.
The Company cautions that the foregoing list of factors is not exhaustive. For additional information about the risks, uncertainties, and assumptions that could cause Lassonde's actual results to differ from its stated expectations, readers may also consult the "Uncertainties and Principal Risk Factors" section of the Company's 2017 annual MD&A and the other documents it files from time to time with securities regulators in Canada and available on sedar.com. The forward-looking statements contained in this press release reflect the Company's expectations on this date and are subject to change after this date. Lassonde does not undertake to update publicly or to revise these forward-looking statements, whether as a result of new information, future events or otherwise, unless required by applicable legislation or regulation.
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