ROUGEMONT, QC, Aug. 7, 2015 /CNW Telbec/ - Lassonde Industries Inc. (TSX: LAS.A) ("Lassonde") posted sales of $356.8 million in the second quarter of 2015, a 31.0% increase year over year. Profit attributable to the Company's shareholders for this period totalled $14.2 million, up $3.0 million from the second quarter of 2014.
| Financial highlights (in thousands of dollars) |
Second quarters ended |
|||||
| June 27, 2015 |
June 28, 2014 |
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| Sales |
$ |
356,817 |
$ |
272,403 |
||
| Operating profit |
29,303 |
21,851 |
||||
| Profit before income taxes |
21,832 |
16,877 |
||||
| Profit attributable to the Company's shareholders |
14,181 |
11,228 |
||||
| Basic and diluted earnings per share (in $) |
$ |
2.03 |
$ |
1.61 |
||
| Note: These are financial highlights only. Management's Discussion and Analysis, the unaudited interim condensed consolidated financial statements and notes thereto for the quarter ended June 27, 2015 will be available on the SEDAR website at www.sedar.com and on the website of Lassonde Industries Inc. |
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"For the second quarter of 2015, we're pleased to report solid sales and profit growth despite adverse effects from a low Canadian dollar. While we expect the unfavourable foreign exchange impact in the fourth quarter of 2015 to be higher than the average for the first three quarters, we remain optimistic about our results for fiscal 2015 as a whole," said Pierre-Paul Lassonde, Chairman of the Board and Chief Executive Officer of Lassonde Industries Inc.
Financial results
The Company's sales totalled $356.8 million in the second quarter of 2015, up $84.4 million or 31.0% from $272.4 million in sales in the same period of 2014. Sales from Apple & Eve, LLC ("A&E") added $59.7 million to the Company's second quarter sales. Excluding A&E's sales, the Company's second quarter sales posted a year-over-year increase of $24.7 million (9.1%). This increase was primarily driven by a favourable foreign exchange impact and higher sales of private label products. For the first six months of 2015, sales totalled $684.5 million, up 32.5% from $516.6 million in the first six months of 2014.
The Company's operating profit for the second quarter of 2015 totalled $29.3 million, up $7.4 million from operating profit of $21.9 million in the same quarter last year. Excluding the $3.1 million operating profit from A&E, operating profit was up $4.3 million from last year's second quarter. This increase came mainly from improved profitability within the Canadian operations owing to stronger performance by specialty food products, partly offset by an unfavourable impact of a low Canadian dollar on U.S.-dollar purchases. Operating profit benefited from the favourable impact of foreign exchange movements on the conversion of the results of Clement Pappas and Company, Inc. ("CPC") into Canadian dollars. Operating profit for the first six months of 2015 stood at $46.3 million, up $10.1 million from $36.2 million at the end of the first six months of 2014.
The Company's financial expenses went from $4.1 million in the second quarter of 2014 to $6.8 million this quarter. This $2.7 million increase was largely due to a higher interest expense related to the financing of the A&E acquisition, a higher change in the fair value of participating loans and an unfavourable foreign exchange impact resulting from the conversion of CPC's interest expense on borrowings at an exchange rate higher than in 2014. For the first six months, financial expenses went from $9.4 million in 2014 to $13.4 million this fiscal year.
"Other (gains) losses" went from a $0.9 million loss in the second quarter of 2014 to a $0.7 million loss in 2015. The 2014 second quarter loss was essentially due to $0.4 million in foreign exchange losses and to a $0.4 million loss related to a settlement at fair value of a derivative financial instrument. The $0.7 million loss in the second quarter of 2015 was mainly due to $0.5 million in foreign exchange losses. For the first six months, the "Other (gains) losses" item was a $0.6 million gain in 2015 compared to a $0.3 million gain in 2014.
Profit before income taxes totalled $21.8 million for the second quarter of 2015, up $4.9 million from $16.9 million in the same quarter of 2014. For the first six months of 2015, profit before income taxes stood at $33.4 million, up $6.3 million from $27.1 million in the first six months of 2014.
Income taxes went from $4.8 million in the second quarter of 2014 to $6.8 million in the same quarter of 2015. At 31.0%, the 2015 second‑quarter effective tax rate is higher than the 28.6% rate in the same quarter of 2014. This increase reflects an unfavourable change in the geographic mix of the Company's taxable income. Income tax expense for the first six months of 2015 stood at $10.2 million, up $2.5 million from $7.7 million in the first six months of 2014.
The 2015 second‑quarter profit was $15.1 million, up $3.1 million from $12.0 million in the second quarter last year. It should be noted that this quarter's result includes a net profit of $1.9 million from A&E. For the first six months of 2015, profit totalled $23.2 million versus profit of $19.4 million in the first six months of 2014.
Profit attributable to the Company's shareholders was $14.2 million, resulting in basic and diluted earnings per share of $2.03 for the second quarter of 2015. In the second quarter of 2014, profit attributable to the Company's shareholders had totalled $11.2 million, resulting in basic and diluted earnings per share of $1.61. For the first six months of 2015, profit attributable to the Company's shareholders totalled $21.9 million, resulting in basic and diluted earnings per share of $3.14 and, in the same six-month period of 2014, profit had totalled $18.3 million, resulting in basic and diluted earnings per share of $2.62.
Cash flows from operating activities generated $43.3 million in cash during the second quarter of 2015, while they had generated $1.7 million in cash during the same period last year. Financing activities used $34.2 million in the second quarter of 2015, while these activities had used $16.4 million in the same quarter of 2014. Investing activities used $5.2 million in the second quarter of 2015 compared to $4.2 million for the same quarter of 2014. At the end of the second quarter of 2015, the Company reported a cash and cash equivalents balance of $0.5 million and a bank overdraft of $14.6 million compared to a cash and cash equivalents balance of $17.4 million and a bank overdraft of $12.2 million at the end of the second quarter of 2014.
Outlook
A lack of sustained growth in the fruit juice and drink market continues to affect the sales volumes of North American producers in the sector. In the Canadian market, the Company has observed some recovery in demand despite a challenging competitive environment. The Company does not see any signs of competitive activity diminishing over the coming year. The Company is seeking to limit the impact of increased competition through national brand product innovation and continued private label customer development.
Fiscal 2015 will include an entire year of A&E's financial results. To better measure the impact of the acquisition, it is important to note that the closing date of the A&E acquisition was July 25, 2014 and that A&E had recorded, for the 12‑month period ended May 31, 2014, sales of approximately US$180 million and adjusted EBITDA of approximately US$15 million. The annual amortization of other intangible assets resulting from the A&E acquisition depends on the purchase price allocation that the Company completed in 2014. The Company believes that the annual amortization expense on these other intangible assets will be approximately US$5.7 million.
Barring any major external shocks (and excluding sales from A&E to maintain a comparable basis), the Company remains optimistic about its ability to slightly increase its consolidated sales in 2015 compared to those of 2014. At the same time, the Company plans to focus on its existing business activities in 2015.
About Lassonde
Lassonde Industries Inc. is a North American leader in the development, manufacture and sale of a wide range of ready-to-drink fruit and vegetable juices and drinks marketed under brands such as Everfresh, Fairlee, Fruité, Graves, Oasis and Rougemont.
Lassonde is also the second largest producer of store brand shelf-stable fruit juices and drinks in the United States and a major producer of cranberry sauces.
In 2014, Lassonde completed the acquisition of Apple & Eve, LLC of Port Washington, New York, a leading national brand juice company in the United States. This company offers more than 100 different products sold under its flagship brand, Apple & Eve, and also under the Northland, Seneca and The Switch brands.
Lassonde also develops, manufactures and markets specialty food products under brands such as Antico and Canton. The Company imports and markets selected wines from various countries and manufactures apple ciders and cider-based beverages.
The Company produces superior quality products through the expertise of approximately 2,100 people working in 14 plants across Canada and the United States. To learn more, visit www.lassonde.com.
SEDAR registration number: 00002099
Caution Concerning Forward-Looking Statements
This press release contains forward-looking statements that are based on certain assumptions. These forward-looking statements are subject to a number of risks and uncertainties that could cause actual results or events to differ materially from current expectations. Additional factors are discussed in materials filed from time to time with the securities regulatory authorities in Canada. Lassonde Industries Inc. disclaims any intention or obligation to update or revise any forward-looking statements except as required by law.
SOURCE Lassonde Industries Inc.
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
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