- Special Crops Division Delivers Strong Quarter for EBITDA and Cash Flow As Pacific Coast Canola Prepares for Full Production -
WINNIPEG, May 14, 2013 /CNW/ - Legumex Walker Inc. (TSX: LWP) (the "Company") today reported its financial results for the three months ended March 31, 2013. All figures are in Canadian dollars unless otherwise stated.
Highlights for the Three Months Ended March 31, 2013 (all growth metrics reflect comparison to the three months ended March 31, 2012):
- Improved financial results from the Special Crops division:
- Revenue increased 26% to $83 million on an increase in tonnes shipped of 19% to 97,500 tonnes;
- Adjusted gross profit increased 61% to $9.2 million with a commodity margin increase of 41% to $144 per tonne, reflecting the success of the Company's strategy to diversify into higher-margin products;
- EBITDA increased 62% to $6.4 million, reflecting the success of the Company's strategy to improve operating leverage;
- Cash flow provided by operations improved to $3.3 million (net of corporate costs);
- Commissioning of the Pacific Coast Canola plant ("PCC Plant") progressed according to plan with PCC shipping its first food-grade canola oil in mid-March. The PCC Plant remains on schedule to begin full production in the third quarter of 2013.
- Consolidated EBITDA of $0.2 million compared with $2.2 million (including corporate costs that were consistent year-over-year), reflecting the expected loss generated by the Oilseed Seed division during commissioning.
"Our improved Special Crops results for the first quarter of 2013 are indicative of the underlying strength of that division as we began to realize the benefit of last year's substantial investment in facilities, technology and people as well as improvements in demand in the marketplace," said Joel Horn, President and Chief Executive Officer, Legumex Walker Inc. "We are clearly seeing payoff from our acquisitions, diversification into higher margin products and optimization of our processing facilities to achieve EBITDA and cash flow that were not previously available to us."
"The Pacific Coast Canola team is completing final commissioning of our canola processing facility, building canola seed inventories, and lining up our customers to begin commercial-scale operations on schedule in the third quarter. Canola oil prices are rising as the new crop approaches and local planting, which benefits our profitability, is on track for another record year."
"Looking out to the remainder of 2013, we expect to continue to realize the value of last year's acquisitions and investments while leveraging our platform for organic growth opportunities that will be influenced by the new crop. In the back half of the year, we will see meaningful contribution from our Canola business and will begin to take advantage of additional margin opportunities. By next year, both the Special Crops and Oilseed Processing divisions will be well positioned to deliver on the full potential of our efforts."
Results for the Three Months Ended March 31, 2013
Consolidated revenue for the first quarter of 2013 increased by 33% to $87.3 million compared to the same quarter last year reflecting higher volumes due to the annualized impact of the Keystone Grain Ltd. acquisition on October 1, 2012. Adjusted gross profit of $5.6 million for the quarter was consistent with the same quarter last year as a $3.5 million increase for Special Crops from higher volumes and improved margins was largely offset by initial losses in Oilseed Processing during the commissioning phase of the PCC Plant.
EBITDA for the first quarter of 2013 was $165,000 compared to $2.2 million for the same quarter last year. Normalized selling and administrative expenses increased $1.9 million due to increased activity at the PCC Plant and the annualized effect of businesses acquired in February and October 2012. Corporate costs remained consistent with the same quarter last year.
Net loss attributable to shareholders, after excluding the 15% non-controlling interest in Pacific Coast Canola, for the first quarter of 2013 was $5.8 million, or $0.36 per share, and the loss was entirely attributable to the Oilseed Processing division as commissioning of the PCC plant continued during the quarter.
Revenue for the first quarter of 2013 increased 26% to $83 million. The Company sold 97,500 tonnes of special crops in the first quarter of 2013, an increase of 15,300 tonnes (19%) over the same quarter last year. The increase in volume also represents an increase in diversification towards the higher margin Edible Bean and Sunflower & Flax divisions. Increased volumes contributed $1.6 million of incremental commodity profit complemented by $4.1 million from improved commodity margins and offset by a $2.2 million increase in plant costs. Adjusted gross profit for the first quarter of 2013 increased 61% to $9.2 million from $5.7 million for the same quarter last year.
EBITDA for the first quarter of 2013 increased 64% to $6.4 million from $3.9 for the same quarter last year. Normalized Selling and Administrative costs increased $1.0 million to $2.8 million.
Construction of the PCC Plant was substantially completed in February 2013 and commissioning of the Plant continues as planned with full production expected in the third quarter of this year.
The PCC Plant generated revenue of $4.6 million as a result of the high quality of oil and meal produced during the commissioning phase. Although the PCC Plant has not yet achieved commercial production levels, the proportion of oil and meal processed was generally consistent with expectations.
Adjusted gross profit was a loss of $3.6 million as the commissioning of the plant incurred costs of $1.8 million that were not fully recouped from the non-commercial level production and sale of canola oil and meal during the commissioning phase.
Operating costs will continue to exceed revenues until commissioning is fully completed and the PCC Plant is operating at full production. Loss before interest, taxes depreciation and amortization was $4.5 million. Selling and administrative expenses increased to $943,000 as operating activity increased to normal levels in preparation for full production this year.
This news release contains references to "Adjusted gross profit", "EBITDA," "Cash Flow from Operations", and "Non-recurring Costs". Adjusted gross profit is defined for the purposes of this news release as gross profit before depreciation and amortization. EBITDA is defined for the purposes of this news release as earnings from operations before other income and expenses, depreciation and amortization, financing costs, non-recurring costs and income taxes. Cash Flow from Operations is defined for the purposes of this news release as the cash provided by or used in operating activities excluding non-cash working capital changes. Management believes excluding the seasonal swings of non-cash working capital assists in evaluation of long-term liquidity. Non-recurring Costs is defined as one-time costs deemed to be non-recurring by management relating to acquisitions, integration and other incorporation or amalgamation activities. Management believes that EBITDA and Cash Flow from Operations are useful supplemental measures of cash flow prior to finance costs, capital expenditures, income taxes and other non-cash items included in earnings. Management uses Cash Flow from Operations as a financial measure of liquidity. EBITDA and Cash Flow from Operations are not recognized earnings measures under Canadian Generally Accepted Accounting Principles or IFRS (collectively referred to herein as "Canadian GAAP") and do not have standardized meanings prescribed by Canadian GAAP. Therefore, EBITDA and Cash Flow from Operations may not be comparable to similar measures presented by other issuers. Investors are cautioned that EBITDA and Cash Flow from Operations should not be construed as an alternative to net earnings or loss (which are determined in accordance with Canadian GAAP) as an indicator of the performance of the Company or as a measure of liquidity and cash flows. The Company believes that EBITDA and Cash Flow from Operations are useful supplemental measures of cash flow prior to debt service, investing and financing activities and income taxes. The Company's method of calculating EBITDA and Cash Flow from Operations may differ materially from the methods used by other public companies and, accordingly, may not be comparable to similarly titled measures used by other public companies.
Financial Statements and MD&A
Legumex Walker's Financial Statements and Management's Discussion and Analysis ("MD&A") for the period ended March 31, 2013 are available on the Company's website at www.legumexwalker.com in the "Investors" section.
Legumex Walker will host a conference call on Wednesday, May 15, 2013 at 8:30 a.m. ET to discuss its first quarter 2013 financial results. To access the conference call by telephone, dial (647) 427-7450 or (888) 231-8191. Please connect approximately 10 minutes prior to the start of the call to ensure access.
A recording of the conference call will be archived for replay by telephone until Wednesday, May 22, 2013 at midnight. To access the archived conference call, dial 1-855-859-2056 and enter the reservation number 59254757.
A live audio webcast of the conference call will be available http://www.legumexwalker.com/investors-presentations.php. Please connect at least 15 minutes prior to the conference call to ensure adequate time for any software download that may be required to join the webcast.
About Legumex Walker Inc.
Legumex Walker is a growth-oriented processor and merchandiser of pulses (lentils, peas, beans and chickpeas), other special crops and canola products. The Company is one of the largest processors of pulses and other special crops in Canada. Legumex Walker has 14 processing facilities strategically located in key growing regions in the Canadian Prairie Provinces, the American Midwest, and China, a global sales, logistics, and distribution platform and access to multimodal transportation capabilities. In addition, the Company has an 85 percent interest in Pacific Coast Canola, LLC, which operates the first and only commercial-scale canola oilseed processing facility West of the Rocky Mountains.
Cautionary Note on Forward-looking Statements
This press release contains certain forward-looking statements. Forward-looking statements include, but are not limited to, those with respect to, the growth of the Company's business, including statements with respect to organic growth, the expansion of the Company's earnings potential and the increase in efficiency in certain divisions to sustain and enhance margins. Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company (including its operating subsidiaries) to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Such risks and uncertainties include, among others, timing and cost overrun risks associated with the commissioning of the PCC Plant (as defined herein), risks related to the operation of the PCC Plant, product liabilities, environmental risks, regulations related to agricultural commodities, weather related risks, the demand for and availability of rail, port and other transportation services, the actual results of harvests, fluctuations in the price of pulses and other crops and canola oil prices, failure of plant, equipment or processes to operate as anticipated, accidents, labour disputes, risks relating to the integration of acquisitions, as well as those factors referred to in the section entitled "Risk Factors" in the Company's Management's Discussion and Analysis for the period ended December 31, 2012 and the Company's 2013 Annual Information Form, which are available on SEDAR at www.sedar.com and which should be reviewed in conjunction with this document. Although the Company has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. There can be no assurance that forward-looking statements will prove to be accurate as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements. Although the Company believes the assumptions inherent in forward-looking statements are reasonable, undue reliance should not be placed on these statements, which only apply as of the date of this press release. The Company expressly disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except in accordance with applicable securities laws.
SOURCE: Legumex Walker Inc.
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