Canada Bread Reports Results for the Third Quarter 2013
TSX: CBY
TORONTO, Oct. 30, 2013 /CNW/ - Canada Bread Company, Limited (TSX: CBY) today reported its financial results for the third quarter ended September 30, 2013. Third quarter highlights include:
- Adjusted Operating Earnings(1)(2) increased 16.7% to $38.9 million compared to $33.3 million last year. Year-to-date Adjusted Operating Earnings increased 19.0% to $92.5 million compared to $77.7 million last year
- Net earnings(1) for the quarter increased to $24.5 million compared to $23.5 million last year. For the first nine months, net earnings increased to $51.3 million from $49.8 million last year.
- Adjusted Earnings per Share(1)(3) for the quarter was $1.10, up from $0.93 in the third quarter of 2012. For the first nine months, Adjusted Earnings per Share was $2.60, up from $2.18 last year.
- The Company achieved an Adjusted EBITDA(4) margin of 13.2% in the third quarter
"The business delivered solid earnings growth in the third quarter, benefiting from a very strong focus on efficiency gains, cost reduction and innovative new products," said Richard Lan, President and CEO. "We are realizing some of the benefits of our strategic initiatives already implemented and moving forward with others to realize this potential."
Financial Overview
Canada Bread Company, Limited ("the Company") sales for the third quarter decreased 2.2% to $392.5 million compared to $401.5 million last year, or 1.4% after adjusting for discontinued categories in the U.K. and the impact of currency translation on sales in the U.S. and U.K. The decrease was due to lower sales volumes, primarily in the fresh bread business, partially offset by higher pricing across the Company.
Sales for the first nine months decreased 1.5% to $1,158.8 million compared to $1,176.6 million last year, or 0.9% after adjusting for discontinued categories in the U.K. and the impact of currency translation, due to similar factors noted above.
Adjusted Operating Earnings increased 16.7% in the third quarter to $38.9 million compared to $33.3 million last year, driven by higher pricing and operational improvements, partly offset by lower volumes. For the first nine months, Adjusted Operating Earnings increased 19.0% to $92.5 million compared to $77.7 million last year, due to similar factors noted above.
Net earnings in the quarter was $24.5 million ($0.96 basic earnings per share) compared to $23.5 million ($0.93 basic earnings per share) last year and included $3.7 million of pre-tax restructuring and other related costs (2012: $0.2 million). Year-to-date net earnings was $51.3 million ($2.02 basic earnings per share) compared to $49.8 million ($1.96 basic earnings per share) last year and included $15.2 million of pre-tax restructuring and other related costs (2012: $7.3 million).
Adjusted Earnings per Share was $1.10 for the third quarter (2012: $0.93) and $2.60 for the first nine months of 2013 (2012: $2.18).
Several items are excluded from the discussions of underlying earnings performance as they are not representative of on-going operational activities. Refer to the section entitled Non-IFRS Financial Measures at the end of this News Release for a description and reconciliation of all non-IFRS financial measures.
Business Segment Review
The following table summarizes sales by business segment:
| ($ thousands) | Third Quarter | Year-to-Date | |||||||
| (Unaudited) | 2013 | 2012 | 2013 | 2012 | |||||
| Fresh Bakery | $ | 266,719 | $ | 277,709 | $ | 780,553 | $ | 805,056 | |
| Frozen Bakery | 125,782 | 123,785 | 378,283 | 371,543 | |||||
| Sales | $ | 392,501 | $ | 401,494 | $ | 1,158,836 | $ | 1,176,599 | |
The following table summarized Adjusted Operating Earnings by business segment:
| ($ thousands) | Third Quarter | Year-to-Date | ||||||
| (Unaudited) | 2013 | 2012(1) | 2013 | 2012(1) | ||||
| Fresh Bakery | $ | 26,417 | $ | 28,086 | $ | 68,245 | $ | 64,503 |
| Frozen Bakery | 12,483 | 5,243 | 24,215 | 13,206 | ||||
| Adjusted Operating Earnings(2) | $ | 38,900 | $ | 33,329 | $ | 92,460 | $ | 77,709 |
Fresh Bakery
Includes fresh bakery products, including breads, rolls, bagels, sweet goods, and fresh pasta and sauces sold to retail, foodservice and convenience channels. It includes national brands such as Dempster's® and Olivieri® and many leading regional brands.
Fresh Bakery sales for the third quarter decreased 4.0% to $266.7 million compared to $277.7 million last year, as lower volumes were partly offset by the benefit of an earlier price increase in the fresh bread business. During the first nine months of 2013, sales decreased 3.0% to $780.6 million compared to $805.1 million last year due to similar factors.
Adjusted Operating Earnings in the Fresh Bakery segment declined 5.9% to $26.4 million from $28.1 million last year. Lower volumes and higher raw material and inflationary costs in the fresh bread business were partly offset by operating efficiencies, driven by the closure of a third Toronto, Ontario bakery, higher pricing, and lower selling, general, and administrative expenses. Earnings in the fresh pasta business were consistent with the prior year.
For the first nine months, Adjusted Operating Earnings increased 5.8% to $68.2 million compared to $64.5 million last year. In the fresh bread business, earnings improved as a result of higher pricing, operational improvements, and lower selling, general, and administrative spend, partly offset by lower volumes and higher raw material and other inflationary costs. Earnings in the fresh pasta business increased mainly due to an inventory write-off in the first quarter of last year that did not re-occur.
Frozen Bakery
Includes frozen bakery products, including frozen par-baked bakery products, specialty and artisan breads, and bagels sold to retail, foodservice and convenience channels in North America and the U.K. It includes national brands such as Tenderflake® and New York Bakery CoTM.
Frozen Bakery sales for the third quarter increased 1.6% to $125.8 million, or 4.2% after adjusting for discontinued categories in the U.K. and the impact of currency translation on sales in the U.S. and U.K. The increase was driven by volume growth in the U.K., and higher pricing in both the North American and U.K. bakery businesses. Year-to-date Frozen Bakery sales increased 1.8% to $378.3 million, or 3.8% after adjusting for discontinued categories in the U.K. and the impact of currency translation on sales in the U.S. and U.K. The increase was due to similar factors affecting the third quarter.
Third quarter Adjusted Operating Earnings increased to $12.5 million from $5.2 million last year. The North American frozen bakery business benefited from operational cost reductions and higher pricing, while the U.K. business earnings benefited from increased volumes in the bagel and croissant categories. This business continued to benefit from network consolidation, investment in scale facilities and focus on its core categories.
For the first nine months of 2013, Adjusted Operating Earnings increased 83.4% to $24.2 million compared to $13.2 million last year, due to similar factors affecting the third quarter.
Subsequent Events
On October 21, 2013 the Company announced that it has established a Special Committee comprised solely of independent directors in connection with the potential sale by Maple Leaf Foods Inc., of its 90% interest in the Company. Maple Leaf has advised the Company's Board that it is exploring strategic alternatives for its 90% interest in the Company, including a potential sale. This process is expected to conclude in early 2014. There can be no assurance that the process being undertaken by Maple Leaf Foods Inc. will result in the consummation of any transaction.
On October 24, 2013, the Company announced that it has signed a definitive agreement to sell substantially all of the net assets of its fresh pasta and sauce business, a component of the Fresh Bakery segment, for gross proceeds of approximately $120 million. Subject to Competition Bureau review, the transaction is expected to close by the end of 2013.
Other Matters
On October 29, 2013, the Company declared a dividend of $0.50 per share payable on January 2, 2014 to shareholders of record at the close of business on December 6, 2013. Unless indicated otherwise by the Company in writing on or before the time the dividend is paid, this dividend will be considered an Eligible Dividend for the purposes of the "Enhanced Dividend Tax Credit System".
Reconciliation of Non-IFRS Financial Measures
The Company uses the following non-IFRS measures: Adjusted Operating Earnings and Adjusted Earnings per Share. Management believes that these non-IFRS measures provide useful information to both Management and investors in measuring the financial performance of the Company for the reasons outlined below. These measures do not have a standardized meaning prescribed by IFRS and therefore they may not be comparable to similarly titled measures presented by other publicly traded companies and should not be construed as an alternative to other financial measures determined in accordance with IFRS.
Adjusted Operating Earnings
Adjusted Operating Earnings, a non-IFRS measure, is used by Management to evaluate financial operating results. It is defined as earnings before income taxes adjusted for items that are not considered representative of on-going operational activities of the business, and items where the economic impact of the transactions will be reflected in the earnings in future periods when the underlying asset is sold or transferred. The table below provides a reconciliation of net earnings as reported under IFRS in the unaudited consolidated interim statements of earnings to Adjusted Operating Earnings for the three and nine months ended, as indicated below. Management believes that this basis is the most appropriate on which to evaluate operating results, as they are representative of the on-going operations of the Company.
| ($ thousands) | Three months ended September 30, 2013 | |||||
| (Unaudited) | Fresh Bakery |
Frozen Bakery |
Consolidated | |||
| Net earnings | $ | 24,488 | ||||
| Income taxes | 10,027 | |||||
| Earnings before income taxes | $ | 34,515 | ||||
| Interest income | (73) | |||||
| Earnings before interest and income taxes | $ | 25,001 | $ | 9,441 | $ | 34,442 |
| Other expense | 539 | 205 | 744 | |||
| Restructuring and other related costs | 877 | 2,837 | 3,714 | |||
| Adjusted Operating Earnings | $ | 26,417 | $ | 12,483 | $ | 38,900 |
| ($ thousands) | Three months ended September 30, 2012(1) | |||||
| (Unaudited) | Fresh Bakery |
Frozen Bakery |
Consolidated | |||
| Net earnings | $ | 23,535 | ||||
| Income taxes | 9,246 | |||||
| Earnings before income taxes | $ | 32,781 | ||||
| Interest expense | 365 | |||||
| Earnings before interest and income taxes | $ | 27,897 | $ | 5,249 | $ | 33,146 |
| Other income | 13 | - | 13 | |||
| Restructuring and other related costs | 176 | (6) | 170 | |||
| Adjusted Operating Earnings | $ | 28,086 | $ | 5,243 | $ | 33,329 |
| ($ thousands) | Nine months ended September 30, 2013 | |||||
| (Unaudited) | Fresh Bakery |
Frozen Bakery |
Consolidated | |||
| Net earnings | $ | 51,298 | ||||
| Income taxes | 20,243 | |||||
| Earnings before income taxes | $ | 71,541 | ||||
| Interest expense | 615 | |||||
| Earnings before interest and income taxes | $ | 56,417 | $ | 15,739 | $ | 72,156 |
| Other (income) expense | 227 | 4,909 | 5,136 | |||
| Restructuring and other related costs | 11,601 | 3,567 | 15,168 | |||
| Adjusted Operating Earnings | $ | 68,245 | $ | 24,215 | $ | 92,460 |
| ($ thousands) | Nine months ended September 30, 2012(1) | |||||
| (Unaudited) | Fresh Bakery |
Frozen Bakery |
Consolidated | |||
| Net earnings | $ | 49,789 | ||||
| Income taxes | 20,826 | |||||
| Earnings before income taxes | $ | 70,615 | ||||
| Interest expense | 1,193 | |||||
| Earnings before interest and income taxes | $ | 62,537 | $ | 9,271 | $ | 71,808 |
| Other (income) expense | (1,567) | 209 | (1,358) | |||
| Restructuring and other related costs | 3,533 | 3,726 | 7,259 | |||
| Adjusted Operating Earnings | $ | 64,503 | $ | 13,206 | $ | 77,709 |
Adjusted Earnings per Share
Adjusted Earnings per Share, a non-IFRS measure, is used by Management to evaluate on-going financial operating results. It is defined as basic earnings per share, adjusted for items that are not considered representative of on-going operational activities of the business, and items where the economic impact of the transactions will be reflected in earnings in future periods when the underlying asset is sold or transferred. The table below provides a reconciliation of basic earnings per share as reported under IFRS in the unaudited consolidated interim statements of earnings to Adjusted Earnings per Share for the three and nine months ended, as indicated below. Management believes this basis is the most appropriate on which to evaluate financial results as they are representative of the on-going operations of the Company.
| ($ per share) | Three months ended September 30, |
NIne months ended September 30, |
|||||||
| (Unaudited) | 2013 | 2012(1) | 2013 | 2012(1) | |||||
| Basic earnings per share | $ | 0.96 | $ | 0.93 | $ | 2.02 | $ | 1.96 | |
| Items not considered representative of on-going operations(i) | 0.02 | - | 0.14 | - | |||||
| Restructuring and other related costs(ii) | 0.11 | 0.01 | 0.44 | 0.22 | |||||
| Adjusted Earnings per Share (iii) | $ | 1.10 | $ | 0.93 | $ | 2.60 | $ | 2.18 | |
| (i) | Includes gains/losses associated with non-operational activities, including gains/losses related to restructuring activities, business combinations, discontinued operations, and assets held for sale, all net of tax. | |
| (ii) | Includes per share impact of restructuring and other related costs, net of tax. | |
| (iii) | May not add due to rounding |
Forward-Looking Statements
This document contains, and the Company's oral and written public communications often contain, "forward-looking information" within the meaning of applicable securities laws. These statements are based on current expectations, estimates, forecasts and projections about the industries in which the Company operates and beliefs and assumptions made by Management. Such statements include, but are not limited to, statements with respect to objectives and goals, as well as statements with respect to beliefs, plans, objectives, expectations, anticipations, estimates and intentions. Specific forward-looking information in this document includes, but is not limited to, statements concerning expectations regarding the use of derivatives, futures and options, expectations regarding the timing and amount of capital investments, expectations regarding the timing and cost of old facility closures and new facility openings, the expected use of cash balances, source of funds for ongoing business requirements including capital investments and debt repayment, expectations regarding LEED® certification, expectations regarding the impact of new accounting standards, expectations regarding sufficiency of the allowance for uncollectible accounts and expectations regarding pension plan performance and future pension liabilities and contributions. 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 information. These statements are not guarantees of future performance and involve assumptions and risks and uncertainties that are difficult to predict.
In particular, these statements are based on a variety of factors and assumptions that are discussed throughout this document. In addition, expectations concerning the 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, U.S. and U.K. economies; the rate of exchange of the Canadian dollar to the U.S. dollar and British pound; 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; continued access to capital; the cost of compliance with environmental and health standards; no adverse results from ongoing litigation; no unexpected actions of domestic and foreign governments and the general assumption that none of the risks identified below or elsewhere 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 information, 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 in such forward-looking information include, among other things:
- the risks associated with changes in the Company's systems and processes
- the risks associated with the management service agreement with Maple Leaf
- the Company's exposure to currency exchange risks
- the ability of the Company to hedge against the effect of commodity price changes through the use of commodity futures and options
- the impact of international events on commodity prices and the free flow of goods
- the risks associated with a consolidating retail environment
- the risks related to capital expansion projects
- the risks posed by food contamination, consumer liability and product recalls
- the risks related to acquisitions and divestitures
- the risks posed by compliance with extensive government regulation
- the risks posed by litigation
- the impact of changes in consumer tastes and buying patterns
- the impact of extensive environmental regulation and potential environmental liabilities
- the risks associated with complying with differing employment laws and practices globally, the potential for work stoppages due to non-renewal of collective agreements and recruiting and retaining qualified personnel
- the impact on pension expense and funding requirements of fluctuations in the market prices of fixed income and equity securities and changes in interest rates
- the risks associated with the Company's independent distributors
- the risks posed by competition
- the risks associated with pricing the Company's products
- the risks associated with managing the Company's supply chain
the risks associated with failing to identify and manage the strategic risks facing the Company.
The Company cautions the reader that the foregoing list of factors is not exhaustive. These factors are discussed in more detail under the heading "Risk Factors" in the Company's Management's Discussion and Analysis for the year ended December 31, 2012 that is available on SEDAR at www.sedar.com. The reader should review such section in detail. The Company does not intend to, and the Company disclaims any obligation to, update any forward-looking information, whether written or oral, or whether as a result of new information, future events or otherwise except as required by law.
Additional information concerning the Company, including the Company's Annual Information Form, is available on SEDAR at www.sedar.com.
Canada Bread Company Limited, which is 90.0% owned by Maple Leaf Foods Inc. (TSX:MFI), is a leading manufacturer and distributor of fresh bakery products, frozen par-baked products and fresh pasta and sauces. The Company had 2012 sales of $1.6 billion and employs approximately 6,400 people at its operations across North America and in the United Kingdom.
Footnote Legend
| (1) | 2012 figures have been restated for the impact of adopting the revised International Accounting Standard 19 Employee Benefits ("IAS 19"), as disclosed in Note 20 of the Company's unaudited condensed consolidated interim financial statements. |
| (2) | Adjusted Operating Earnings, a non-IFRS measure, is used by Management to evaluate financial operating results. It is defined as earnings before income taxes adjusted for items that are not considered representative of on-going operational activities of the business, and items where the economic impact of the transactions will be reflected in earnings in future periods when the underlying asset is sold or transferred. Please refer to the section entitled Reconciliation of Non-IFRS Financial Measures in this news release. |
| (3) | Adjusted Earnings per Share, a non-IFRS measure, is used by Management to evaluate on-going financial operating results. It is defined as basic earnings per share, adjusted for all items that are not considered representative of on-going operational activities of the business, and items where the economic impact of the transactions will be reflected in earnings in future periods when the underlying asset is sold or transferred. Please refer to the section entitled Reconciliation of Non-IFRS Financial Measures in this news release. |
| (4) | Adjusted EBITDA, a non-IFRS measure, is used by Management to evaluate financial operating results. It is defined as earnings before interest and income taxes plus depreciation and intangible asset amortization, adjusted for items that are not considered representative of on-going operational activities of the business, and items where the economic impact of the transactions will be reflected in earnings in future periods when the underlying asset is sold or transferred. |
Condensed Consolidated Interim Financial Statements
(Expressed in Canadian dollars)
(Unaudited)
CANADA BREAD COMPANY, LIMITED
Three and nine months ended September 30, 2013 and 2012
Consolidated Balance Sheets
| (In thousands of Canadian dollars) | As at September 30, | As at September 30, | As at December 31, | As at January 1, | ||||||||||
| (Unaudited) | 2013 | 2012 | 2012 | 2012 | ||||||||||
| (Restated) | (Restated) | (Restated) | ||||||||||||
| ASSETS | ||||||||||||||
| Current assets | ||||||||||||||
| Cash and cash equivalents | $ | 188,359 | $ | 87,300 | $ | 90,415 | $ | 59,223 | ||||||
| Accounts receivable | 39,807 | 39,782 | 50,465 | 56,522 | ||||||||||
| Note receivable | 30,225 | 50,893 | 43,033 | 52,587 | ||||||||||
| Inventories | 59,689 | 63,912 | 62,766 | 60,048 | ||||||||||
| Income taxes recoverable | 380 | - | - | 2,162 | ||||||||||
| Assets held for sale | 5,320 | - | - | - | ||||||||||
| Prepaid expenses and other assets | 6,562 | 4,288 | 4,972 | 5,218 | ||||||||||
| $ | 330,342 | $ | 246,175 | $ | 251,651 | $ | 235,760 | |||||||
| Property and equipment | 391,304 | 409,958 | 410,479 | 425,944 | ||||||||||
| Investment property | 10,125 | 9,524 | 9,103 | 8,415 | ||||||||||
| Other long-term assets | 4,783 | 4,713 | 4,994 | 4,456 | ||||||||||
| Deferred tax asset | 17,588 | 19,419 | 17,874 | 17,917 | ||||||||||
| Goodwill | 267,082 | 263,177 | 264,243 | 266,013 | ||||||||||
| Intangible assets | 9,622 | 12,046 | 11,647 | 12,710 | ||||||||||
| Total assets | $ | 1,030,846 | $ | 965,012 | $ | 969,991 | $ | 971,215 | ||||||
| LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||||||||
| Current liabilities | ||||||||||||||
| Bank indebtedness | $ | - | $ | 1,587 | $ | - | $ | 3,153 | ||||||
| Accounts payable and accruals | 208,175 | 177,101 | 169,431 | 192,551 | ||||||||||
| Provisions | 7,207 | 10,251 | 9,928 | 23,066 | ||||||||||
| Due to Maple Leaf Foods Inc. | 6,320 | 3,571 | 4,830 | 2,451 | ||||||||||
| Dividends payable | 12,708 | 12,708 | 12,708 | 5,083 | ||||||||||
| Income taxes payable | - | 123 | 2,008 | - | ||||||||||
| Current portion of long-term debt | 564 | 350 | 358 | 2,452 | ||||||||||
| $ | 234,974 | $ | 205,691 | $ | 199,263 | $ | 228,756 | |||||||
| Long-term debt | 2,433 | 2,986 | 2,921 | 1,634 | ||||||||||
| Deferred tax liability | 26,375 | 19,224 | 19,998 | 21,784 | ||||||||||
| Employee benefits | 40,112 | 60,447 | 56,011 | 50,434 | ||||||||||
| Provisions | 8,144 | 5,521 | 6,277 | 5,005 | ||||||||||
| Total liabilities | $ | 312,038 | $ | 293,869 | $ | 284,470 | $ | 307,613 | ||||||
| Shareholders' equity | ||||||||||||||
| Share capital | $ | 142,965 | $ | 142,965 | $ | 142,965 | $ | 142,965 | ||||||
| Retained earnings | 582,262 | 543,316 | 555,322 | 530,852 | ||||||||||
| Accumulated other | ||||||||||||||
| comprehensive loss | (6,419) | (15,138) | (12,766) | (10,215) | ||||||||||
| Total shareholders' equity | $ | 718,808 | $ | 671,143 | $ | 685,521 | $ | 663,602 | ||||||
| Total liabilities and shareholders' equity | $ | 1,030,846 | $ | 965,012 | $ | 969,991 | $ | 971,215 | ||||||
Consolidated Statements of Earnings
| (In thousands of Canadian dollars, except share amounts) | Three months ended September 30, |
Nine months ended September 30, |
||||||||||
| (Unaudited) | 2013 | 2012 | 2013 | 2012 | ||||||||
| (Restated) | (Restated) | |||||||||||
| Sales | $ | 392,501 | $ | 401,494 | $ | 1,158,836 | $ | 1,176,599 | ||||
| Cost of goods sold | 305,866 | 318,879 | 923,339 | 946,787 | ||||||||
| Gross margin | $ | 86,635 | $ | 82,615 | $ | 235,497 | $ | 229,812 | ||||
| Selling, general and administrative expenses | 47,735 | 49,286 | 143,037 | 152,103 | ||||||||
| Earnings before the following: | $ | 38,900 | $ | 33,329 | $ | 92,460 | $ | 77,709 | ||||
| Restructuring and other related costs | (3,714) | (170) | (15,168) | (7,259) | ||||||||
| Other (expense) income | (744) | (13) | (5,136) | 1,358 | ||||||||
| Earnings before interest and income taxes | $ | 34,442 | $ | 33,146 | $ | 72,156 | $ | 71,808 | ||||
| Interest (income) expense | (73) | 365 | 615 | 1,193 | ||||||||
| Earnings before income taxes | $ | 34,515 | $ | 32,781 | $ | 71,541 | $ | 70,615 | ||||
| Income taxes | 10,027 | 9,246 | 20,243 | 20,826 | ||||||||
| Net earnings | $ | 24,488 | $ | 23,535 | $ | 51,298 | $ | 49,789 | ||||
| Earnings per share | ||||||||||||
| Basic and diluted earnings per share | $ | 0.96 | $ | 0.93 | $ | 2.02 | $ | 1.96 | ||||
| Weighted average number of shares (millions) | 25.4 | 25.4 | 25.4 | 25.4 | ||||||||
Consolidated Statements of Comprehensive Income
| (In thousands of Canadian dollars) | Three months ended September 30, |
Nine months ended September 30, |
|||||||||||||
| (Unaudited) | 2013 | 2012 | 2013 | 2012 | |||||||||||
| (Restated) | (Restated) | ||||||||||||||
| Net earnings | $ | 24,488 | $ | 23,535 | $ | 51,298 | $ | 49,789 | |||||||
| Other comprehensive income (loss) | |||||||||||||||
| Item that will not be reclassified to profit or loss: | |||||||||||||||
| Change in actuarial gains and losses | 836 | (4,061) | 13,767 | (6,824) | |||||||||||
| Total item that will not be reclassified to profit or loss | 836 | (4,061) | 13,767 | (6,824) | |||||||||||
| Items that are or may be reclassified subsequently to profit or loss: | |||||||||||||||
| Change in accumulated foreign currency | |||||||||||||||
| translation adjustment | (471) | (4,836) | 6,331 | (4,273) | |||||||||||
| Change in unrealized gains and losses | |||||||||||||||
| on cash flow hedges | (430) | (228) | 16 | (650) | |||||||||||
| Total items that are or may be reclassified | |||||||||||||||
| subsequently to profit or loss | $ | (901) | $ | (5,064) | $ | 6,347 | $ | (4,923) | |||||||
| $ | (65) | $ | (9,125) | $ | 20,114 | $ | (11,747) | ||||||||
| Comprehensive income | $ | 24,423 | $ | 14,410 | $ | 71,412 | $ | 38,042 | |||||||
Consolidated Statements of Changes in Shareholder's Equity
| Total | |||||||||||||||
| accumulated | |||||||||||||||
| other | Total | ||||||||||||||
| (In thousands of Canadian dollars) | Share | Retained | comprehensive | shareholders' | |||||||||||
| (Unaudited) | capital | earnings | loss | equity | |||||||||||
| Balance at December 31, 2012 | |||||||||||||||
| (restated) | $ | 142,965 | $ | 555,322 | $ | (12,766) | $ | 685,521 | |||||||
| Net earnings | - | 51,298 | - | 51,298 | |||||||||||
| Other comprehensive income | - | 13,767 | 6,347 | 20,114 | |||||||||||
| Dividends declared ($1.50 per share) | - | (38,125) | - | (38,125) | |||||||||||
| Balance at September 30, 2013 | $ | 142,965 | $ | 582,262 | $ | (6,419) | $ | 718,808 | |||||||
| Total | |||||||||||||||
| accumulated | |||||||||||||||
| other | Total | ||||||||||||||
| (In thousands of Canadian dollars) | Share | Retained | comprehensive | shareholders' | |||||||||||
| (Unaudited) | capital | earnings | loss | equity | |||||||||||
| (Restated) | |||||||||||||||
| Balance at January 1, 2012 | |||||||||||||||
| (restated) | $ | 142,965 | $ | 530,852 | $ | (10,215) | $ | 663,602 | |||||||
| Net earnings | - | 49,789 | - | 49,789 | |||||||||||
| Other comprehensive loss | - | (6,824) | (4,923) | (11,747) | |||||||||||
| Dividends declared ($1.20 per share) | - | (30,501) | - | (30,501) | |||||||||||
| Balance at September 30, 2012 | |||||||||||||||
| (restated) | $ | 142,965 | $ | 543,316 | $ | (15,138) | $ | 671,143 | |||||||
Consolidated Statements of Cash Flows
| (In thousands of Canadian dollars) | Three months ended September 30, |
Nine months ended September 30, |
|||||||||||||
| (Unaudited) | 2013 | 2012 | 2013 | 2012 | |||||||||||
| (Restated) | (Restated) | ||||||||||||||
| CASH (USED IN) PROVIDED BY: | |||||||||||||||
| Operating activities | |||||||||||||||
| Net earnings | $ | 24,488 | $ | 23,535 | $ | 51,298 | $ | 49,789 | |||||||
| Add (deduct) items not affecting cash: | |||||||||||||||
| Depreciation and amortization | 13,051 | 12,582 | 38,947 | 36,522 | |||||||||||
| Deferred income taxes | 2,615 | (1,039) | 1,531 | (121) | |||||||||||
| Income tax current | 7,412 | 10,285 | 18,712 | 20,947 | |||||||||||
| Interest (income) expense | (73) | 365 | 615 | 1,193 | |||||||||||
| Gain on sale of long-term assets | (30) | (11) | (1,387) | (137) | |||||||||||
| Impairment of assets | - | - | 4,212 | - | |||||||||||
| Increase in pension liability | 1,235 | 473 | 2,706 | 840 | |||||||||||
| Net income taxes paid | (10,022) | (7,831) | (23,576) | (18,222) | |||||||||||
| Interest received (paid) | 121 | (350) | (15) | (1,204) | |||||||||||
| Change in provision for restructuring and | |||||||||||||||
| other related costs | 502 | (1,157) | (217) | (7,755) | |||||||||||
| Other | (553) | (112) | 41 | 304 | |||||||||||
| Change in non-cash operating working capital | 27,665 | (12,608) | 67,094 | (1,553) | |||||||||||
| Cash provided by operating activities | $ | 66,411 | $ | 24,132 | $ | 159,961 | $ | 80,603 | |||||||
| Financing activities | |||||||||||||||
| Dividends paid | $ | (12,708) | $ | (12,708) | $ | (38,125) | $ | (22,840) | |||||||
| Net decrease in long-term debt | (1,761) | (34) | (211) | (822) | |||||||||||
| Cash used in financing activities | $ | (14,469) | $ | (12,742) | $ | (38,336) | $ | (23,662) | |||||||
| Investing activities | |||||||||||||||
| Additions to long-term assets | $ | (9,214) | $ | (10,147) | $ | (26,797) | $ | (32,180) | |||||||
| Capitalization of interest expense | (323) | - | (323) | - | |||||||||||
| Proceeds from sale of long-term assets | 346 | 2,434 | 3,439 | 4,882 | |||||||||||
| Cash used in investing activities | $ | (9,191) | $ | (7,713) | $ | (23,681) | $ | (27,298) | |||||||
| Increase in cash and cash equivalents | $ | 42,751 | $ | 3,677 | $ | 97,944 | $ | 29,643 | |||||||
| Net cash and cash equivalents, beginning of period | 145,608 | 82,036 | 90,415 | 56,070 | |||||||||||
| Net cash and cash equivalents, end of period | $ | 188,359 | $ | 85,713 | $ | 188,359 | $ | 85,713 | |||||||
| Net cash and cash equivalents is comprised of: | |||||||||||||||
| Cash and cash equivalents | $ | 188,359 | $ | 87,300 | $ | 188,359 | $ | 87,300 | |||||||
| Bank indebtedness | - | (1,587) | - | (1,587) | |||||||||||
| Net cash and cash equivalents, end of period | $ | 188,359 | $ | 85,713 | $ | 188,359 | $ | 85,713 | |||||||
Segmented Financial Information
| Three months ended September 30, | Nine months ended September 30 | ||||||||||||
| 2013 | 2012 | 2013 | 2012 | ||||||||||
| (Restated) | (Restated) | ||||||||||||
| Sales | |||||||||||||
| Fresh Bakery | $ | 266,719 | $ | 277,709 | $ | 780,553 | $ | 805,056 | |||||
| Frozen Bakery | 125,782 | 123,785 | 378,283 | 371,543 | |||||||||
| $ | 392,501 | $ 401,494 | $ | 1,158,836 | $ | 1,176,599 | |||||||
| Earnings before restructuring and other related | |||||||||||||
| costs and other income | |||||||||||||
| Fresh Bakery | $ | 26,417 | $ | 28,086 | $ | 68,245 | $ | 64,503 | |||||
| Frozen Bakery | 12,483 | 5,243 | 24,215 | 13,206 | |||||||||
| $ | 38,900 | $ | 33,329 | $ | 92,460 | $ | 77,709 | ||||||
| Capital expenditures | |||||||||||||
| Fresh Bakery | $ | 1,247 | $ | 6,821 | $ | 7,995 | $ | 24,553 | |||||
| Frozen Bakery | 7,967 | 3,326 | 18,802 | 7,627 | |||||||||
| $ | 9,214 | $ | 10,147 | $ | 26,797 | $ | 32,180 | ||||||
| Depreciation and amortization | |||||||||||||
| Fresh Bakery | $ | 8,190 | $ | 7,918 | $ | 24,425 | $ | 22,622 | |||||
| Frozen Bakery | 4,861 | 4,664 | 14,522 | 13,900 | |||||||||
| $ | 13,051 | $ | 12,582 | $ | 38,947 | $ | 36,522 | ||||||
| As at September 30, | As at September 30, | As at December 31, | As at January 1, | ||||||||||
| 2013 | 2012 | 2012 | 2012 | ||||||||||
| (Restated) | (Restated) | (Restated) | |||||||||||
| Total assets | |||||||||||||
| Fresh Bakery | $ | 465,687 | $ | 507,476 | $ | 504,062 | $ | 522,236 | |||||
| Frozen Bakery | 342,552 | 350,922 | 356,311 | 369,523 | |||||||||
| Non-allocated assets | 222,607 | 106,614 | 109,618 | 79,456 | |||||||||
| $ | 1,030,846 | $ | 965,012 | $ | 969,991 | $ | 971,215 | ||||||
| Goodwill | |||||||||||||
| Fresh Bakery | $ | 125,892 | $ | 125,892 | $ | 125,892 | $ | 125,892 | |||||
| Frozen Bakery | 141,190 | 137,285 | 138,351 | 140,121 | |||||||||
| $ | 267,082 | $ | 263,177 | $ | 264,243 | $ | 266,013 | ||||||
SOURCE: Canada Bread Company, Limited
Investor Contact: Nick Boland,
VP Investor Relations: 416-926-2005
Media Contact: 416-926-2020
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