ROUGEMONT, QC, May 12, 2017 /CNW Telbec/ - Lassonde Industries Inc. (TSX: LAS.A) ("Lassonde") posted sales of $370.7 million in the first quarter of 2017. Excluding an $8.3 million unfavourable foreign exchange impact, sales were down 1.9% year over year. Profit attributable to the Company's shareholders for this period totalled $13.1 million, up $0.1 million from the first quarter of 2016.
| Financial highlights (in thousands of dollars) |
First quarters ended |
|||
| April 1, 2017 |
April 2, 2016 |
|||
| Sales |
$ |
370,738 |
$ |
386,475 |
| Operating profit |
23,666 |
27,430 |
||
| Profit before income taxes |
20,256 |
20,872 |
||
| Profit attributable to the Company's shareholders |
13,086 |
12,955 |
||
| Basic and diluted earnings per share (in $) |
$ |
1.87 |
$ |
1.85 |
| 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 April 1, 2017 will be available on the SEDAR website at www.sedar.com and on the website of Lassonde Industries Inc. |
"For the first quarter of 2017, our sales and operating profit are in line with expectations despite lower national brand sales in the United States. Barring any significant external shocks, we remain confident in achieving slightly higher sales in 2017 than in 2016," said Pierre-Paul Lassonde, Chairman of the Board and Chief Executive Officer of Lassonde Industries Inc.
Financial results
The Company's sales totalled $370.7 million in the first quarter of 2017, down $15.8 million from $386.5 million in sales in the same quarter of 2016. Excluding an $8.3 million unfavourable foreign exchange impact, sales decreased by $7.5 million (1.9%), largely due to a decrease in the sales volume of national brands, partly offset by an increase in sales of private label products.
The Company's operating profit for the first quarter of 2017 totalled $23.7 million, down $3.7 million from $27.4 million in the same quarter last year. This decrease came mainly from higher orange concentrate costs, from a decrease in the gross margin resulting from lower sales, from an unfavourable impact of a low Canadian dollar on hedged U.S-dollar purchases, and from severance payments, partly offset by a favourable impact of selling price adjustments.
The Company's financial expenses went from $5.7 million in the first quarter of 2016 to $3.3 million this quarter. This $2.4 million decrease was mainly attributable to a $1.7 million decrease in interest expense, of which $0.9 million is due to the lower interest rate negotiated in September 2016 on the term loan of Lassonde Pappas and Company, Inc. ("LPC") and $0.8 million is due to a reduction in indebtedness. The amortization of financial expenses was also down, decreasing by $0.6 million mainly due to the modification and renewal of the U.S. credit facilities.
"Other (gains) losses" went from a $0.9 million loss in the first quarter of 2016 to a $0.1 million loss in 2017. The 2016 first-quarter loss of $0.9 million was mainly due to $0.4 million in foreign exchange losses and to $0.4 million in losses resulting from a change in the fair value of interest rate swaps related to LPC's term loan. The $0.1 million loss in the first quarter of 2017 was mainly due to foreign exchange losses.
Profit before income taxes totalled $20.3 million for the first quarter of 2017, down $0.6 million from $20.9 million in the same quarter of 2016.
Income tax expense went from $7.0 million in the first quarter of 2016 to $6.3 million in the same quarter of 2017. At 31.2%, the 2017 first-quarter effective income tax rate was lower than the 33.4% rate in the same quarter of 2016. This decrease reflects an increase in a special deduction for domestic production activity as well as a favourable change in the geographic mix of the Company's profit before income taxes.
At $13.9 million, the 2017 first-quarter profit remains unchanged when compared to last year's first-quarter profit.
Profit attributable to the Company's shareholders was $13.1 million, resulting in basic and diluted earnings per share of $1.87 for the first quarter of 2017. In the first quarter of 2016, profit attributable to the Company's shareholders had totalled $13.0 million, resulting in basic and diluted earnings per share of $1.85.
Cash flows from operating activities generated $0.4 million in cash during the first quarter of 2017, while they had generated $37.3 million in cash during the same quarter last year. Financing activities generated $3.6 million in the first quarter of 2017, while these activities had used $9.0 million in the same quarter of 2016. Investing activities used $7.9 million in the first quarter of 2017 compared to $9.1 million used in the same quarter of 2016. At the end of the first quarter of 2017, the Company reported a cash and cash equivalents balance of $0.5 million and a bank overdraft of $10.0 million compared to a cash and cash equivalents balance of $13.0 million and a bank overdraft of $2.4 million at the end of the first quarter of 2016.
Outlook
For the first quarter of 2017, the Company saw a slight slowdown in industry sales in the U.S. fruit juice and drink market. However, it expects the U.S. fruit juice and drink market to be relatively stable through 2017. In the Canadian market, the situation is different, as industry sales continued to decrease in the first quarter of 2017. The Company does not see any signs of this trend reversing in the next three quarters of 2017. The Company is seeking to limit the impact of this relative weakness in demand through national brand product innovation and continued private label customer development.
The Company posted a 4.1% year-over-year decline in sales in the first quarter of 2017. Excluding foreign exchange impacts, sales decreased at an adjusted rate of 1.9%, in line with the Company's expectations despite lower national brand sales in the United States. Barring any significant external shocks (and excluding foreign exchange impacts to maintain a comparable basis), the Company remains optimistic about its ability to slightly increase its consolidated sales in 2017 compared to those of 2016.
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 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.
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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