Canada Bread Reports Third Quarter 2009 Financial Results
- Net earnings per share increased to $0.99 compared to $0.77 last year
- Adjusted Operating Earnings increased to $36.9 million from
$31.9 million
- Sales declined to $424.6 million from $443.1 million last year
Note: Adjusted Operating Earnings are defined as earnings from operations
before restructuring and other related costs and other income (expense).
Adjusted Earnings per Share ("Adjusted EPS") are defined as basic
earnings per share adjusted for the impact of restructuring and other
related costs, net of tax.
"Our organization has achieved steady earnings growth despite challenging global economic conditions," said
Financial Overview
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Sales for the third quarter decreased by 4.2% to
Adjusted Operating Earnings increased 15.9% to
The following is a summary of Adjusted Earnings per Share:
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Third Quarter Year-to-Date
Per share 2009 2008 2009 2008
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EPS $0.99 $0.77 $2.46 $1.51
Restructuring and other
related costs(i) 0.02 $0.16 $0.04 $0.23
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Adjusted EPS(ii) $1.00 $0.93 $2.50 $1.75
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(i) Includes impact of restructuring and other related costs, net of
tax.
(ii) Does not add due to rounding.
Business Segment Review
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Following is a summary of Adjusted Operating Earnings by business segment:
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($ thousands) Third Quarter Year-to-Date
2009 2008 2009 2008
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Fresh Bakery $33,260 25,985 $71,457 51,131
Frozen Bakery 3,655 5,874 19,949 12,670
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Adjusted Operating Earnings $36,915 31,859 $91,406 63,801
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Fresh Bakery (Fresh bakery products, sweet goods, sandwiches, and
specialty fresh pasta and sauces)
Fresh Bakery sales in the third quarter declined by 1.0% to
Adjusted Operating Earnings increased to
Fresh Bakery launched several exciting new innovative products in the quarter aimed at supporting margin and category expansion. Dempster's(R) OvenFresh(TM) is a line of fresh, long life white and multigrain baguettes and dinner rolls that finish baking at home in minutes. Under a licensing agreement, the Company has also launched Cadbury(TM) Snack Cakes in Eastern
Frozen Bakery (North American and U.K. frozen bakery products; including
frozen par-baked and specialty bakery products)
Frozen Bakery sales decreased by 10.2% to
Adjusted Operating Earnings in the quarter decreased to
Other Income (Expense)
----------------------
Other expense was
Other Matters
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On
Forward-Looking Statements
--------------------------
This document contains, and the Company's oral and written public communications often contain, forward-looking statements that are based on current expectations, estimates, forecasts and projections about the industries in which the Company operates and beliefs and assumptions made by the Management of the Company. Such statements include, but are not limited to, statements with respect to objectives and goals, expectations regarding earnings potential in the fresh sandwich business, as well as statements with respect to beliefs, plans, objectives, expectations, anticipations, estimates and intentions. 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 statements. These statements are not guarantees of future performance and involve assumptions and risks and uncertainties that are difficult to predict.
In particular, these forward-looking statements are based on expectations concerning performance of the Company's business in general, and are based on a number of factors and assumptions including, but not limited to: the condition of the Canadian,
Factors that could cause actual results or outcomes to differ materially from the results expressed or implied by forward-looking statements are discussed more fully under the heading "Risk Factors" in the Company's Annual Management's Discussion and Analysis for the year ended
Consolidated Financial Statements
(Expressed in Canadian dollars)
CANADA BREAD COMPANY, LIMITED
Three and nine months ended September 30, 2009 and 2008
CANADA BREAD COMPANY, LIMITED
Consolidated Balance Sheets
(In thousands of Canadian dollars)
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As at As at As at
September 30, September 30, December 31,
2009 2008 2008
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(Unaudited) (Unaudited)
ASSETS
Current assets
Cash and cash equivalents $ 24,549 $ 20,328 $ 11,721
Accounts receivable 70,879 76,108 57,079
Inventories 58,266 58,451 58,696
Future tax asset 4,878 18,719 5,388
Prepaid expenses and
other receivables 7,065 13,039 12,977
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$ 165,637 $ 186,645 $ 145,861
Property and equipment 392,695 408,160 417,150
Other long-term assets 10,616 9,815 9,964
Goodwill 392,456 395,181 404,484
Other intangible assets 18,775 18,331 17,451
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$ 980,179 $ 1,018,132 $ 994,910
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LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Bank indebtedness $ 4,357 $ 9,521 $ 8,894
Accounts payable and
accrued charges 169,361 185,670 207,928
Due to Maple Leaf Foods Inc. 4,971 3,960 -
Dividends payable 1,525 1,525 1,525
Income and other taxes
payable 13,610 18,560 10,860
Current portion of long-term
debt - 50 41
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$ 193,824 $ 219,286 $ 229,248
Long-term debt - 78,453 4,477
Future tax liability 34,079 35,867 36,043
Other long-term liabilities 8,639 13,918 16,802
Shareholders' equity 743,637 670,608 708,340
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$ 980,179 $ 1,018,132 $ 994,910
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CANADA BREAD COMPANY, LIMITED
Consolidated Statements of Earnings
(In thousands of Canadian dollars, except share amounts)
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Three months ended Nine months ended
September 30, September 30,
(Unaudited) 2009 2008 2009 2008
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Sales $ 424,555 $ 443,086 $ 1,273,598 $ 1,263,373
Cost of goods sold 335,413 363,501 1,023,257 1,054,553
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Gross margin $ 89,142 $ 79,585 $ 250,341 $ 208,820
Selling, general and
administrative
expenses 52,227 47,726 158,935 145,019
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Earnings from
operations before
the following: $ 36,915 $ 31,859 $ 91,406 $ 63,801
Restructuring and
other related costs (597) (5,718) (1,271) (8,410)
Other income (expense) (113) 4,797 2,429 6,372
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Earnings before
interest and income
taxes $ 36,205 $ 30,938 $ 92,564 $ 61,763
Interest expense 673 2,147 3,980 5,982
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Earnings before
income taxes $ 35,532 $ 28,791 $ 88,584 $ 55,781
Income taxes 10,482 9,064 26,115 17,305
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Net earnings $ 25,050 $ 19,727 $ 62,469 $ 38,476
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Earnings per share -
basic and diluted $ 0.99 $ 0.77 $ 2.46 $ 1.51
Weighted average
number of shares
(millions) 25.4 25.4 25.4 25.4
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CANADA BREAD COMPANY, LIMITED
Consolidated Statements of Comprehensive Income
(In thousands of Canadian dollars)
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Three months ended Nine months ended
September 30, September 30,
(Unaudited) 2009 2008 2009 2008
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Net earnings $ 25,050 $ 19,727 $ 62,469 $ 38,476
Other comprehensive
income (loss) (23,530) (7,571) (22,610) 1,664
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Comprehensive income $ 1,520 $ 12,156 $ 39,859 $ 40,140
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Consolidated Statements of Retained Earnings
(In thousands of Canadian dollars, except per share amounts)
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Nine months ended September 30,
(Unaudited) 2009 2008
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Retained earnings, beginning of period $ 587,163 $ 528,327
Net earnings 62,469 38,476
Dividends declared ($0.18 per share;
2008: $0.18 per share) (4,575) (4,575)
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Retained earnings, end of period $ 645,057 $ 562,228
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CANADA BREAD COMPANY, LIMITED
Consolidated Statements of Cash Flows
(In thousands of Canadian dollars)
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Three months ended Nine months ended
September 30, September 30,
(Unaudited) 2009 2008 2009 2008
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CASH PROVIDED BY (USED IN):
Operating activities
Net earnings $ 25,050 $ 19,727 $ 62,469 $ 38,476
Add (deduct) items
not affecting cash:
Depreciation and
amortization 13,551 14,012 41,706 41,014
Future income
taxes (1,303) 1,817 (2,099) 1,394
Loss (gain) on
sale of property
and equipment 131 (34) 461 139
Asset impairments
and change in
provision for
restructuring and
other related costs 367 4,987 (607) 6,904
Amortization of
terminated
interest rate swap 672 - 1,317 -
Other (562) (218) (2,593) 1,087
Change in non-cash
operating working
capital (6,722) 1,154 (34,810) (33,752)
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Cash provided by
operating activities $ 31,184 $ 41,445 $ 65,844 $ 55,262
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Financing activities
Dividends paid (1,525) (1,525) (4,575) (4,575)
Net decrease in
long-term debt (15,038) (11,768) (4,518) (29,145)
Settlement of cross-
currency interest
rate swap with
Maple Leaf Foods Inc. - - (8,502) 80,586
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Cash provided by
(used in) financing
activities $ (16,563) $ (13,293) $ (17,595) $ 46,866
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Investing activities
Additions to
property and
equipment (6,081) (14,155) (30,447) (40,025)
Proceeds from
sale of property
and equipment 46 86 515 618
Acquisition of
business, - net
of cash acquired - (1,275) - (44,819)
Other (7) (58) (952) (97)
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Cash used in investing
activities $ (6,042) $ (15,402) $ (30,884) $ (84,323)
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Increase in cash and cash
equivalents 8,579 12,750 17,365 17,805
Net cash and cash
equivalents,
beginning of period 11,613 (1,943) 2,827 (6,998)
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Net cash and cash
equivalents, end
of period $ 20,192 $ 10,807 $ 20,192 $ 10,807
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CANADA BREAD COMPANY, LIMITED
Segmented Financial Information
(In thousands of Canadian dollars)
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Three months ended Nine months ended
September 30, September 30,
(Unaudited) 2009 2008 2009 2008
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Sales
Fresh Bakery $ 287,285 $ 290,196 $ 840,546 $ 815,058
Frozen Bakery 137,270 152,890 433,052 448,315
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$ 424,555 $ 443,086 $ 1,273,598 $ 1,263,373
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Earnings from
operations before
restructuring and
other related costs
and other income
(expense)
Fresh Bakery $ 33,260 $ 25,985 $ 71,457 $ 51,131
Frozen Bakery 3,655 5,874 19,949 12,670
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$ 36,915 $ 31,859 $ 91,406 $ 63,801
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Additions to property
and equipment
Fresh Bakery $ 4,246 $ 5,912 $ 15,677 $ 17,085
Frozen Bakery 1,835 8,243 14,770 22,940
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$ 6,081 $ 14,155 $ 30,447 $ 40,025
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Depreciation and
amortization
Fresh Bakery $ 6,757 $ 7,122 $ 20,816 $ 20,975
Frozen Bakery 6,794 6,890 20,890 20,039
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$ 13,551 $ 14,012 $ 41,706 $ 41,014
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As at As at As at
September 30, September 30, December 31,
2009 2008 2008
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(Unaudited) (Unaudited)
Total assets
Fresh Bakery $ 447,100 $ 459,396 $ 440,733
Frozen Bakery 493,270 507,191 523,843
Non-allocated assets 39,809 51,545 30,334
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$ 980,179 $ 1,018,132 $ 994,910
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Goodwill
Fresh Bakery $ 155,949 $ 156,691 $ 156,268
Frozen Bakery 236,507 238,490 248,216
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$ 392,456 $ 395,181 $ 404,484
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For further information: Lynda Kuhn, Senior Vice-President, Communications & Consumer Relations, (416) 926-2026, www.canadabread.ca
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