ROUGEMONT, QC, May 13, 2022 /CNW Telbec/ - Lassonde Industries Inc. (TSX: LAS.A) ("Lassonde" or the "Corporation") posted sales of $509.0 million in the first quarter of 2022, up 9.1% year over year. The Corporation's operating profit for the first quarter of 2022 totalled $22.4 million, down from $31.4 million in the same quarter last year. Excluding $2.4 million in expenses related to the multi-year strategy discussed below, operating profit was down $6.6 million. The 2022 first‑quarter profit attributable to the Corporation's shareholders totalled $14.8 million, down $5.3 million year over year.
Financial highlights (in thousands of $) |
First quarters ended |
|||||||
April 2, 2022 |
April 3, 2021 |
|||||||
Sales |
$ |
509,047 |
$ |
466,794 |
||||
Operating profit |
22,419 |
31,382 |
||||||
Profit before income taxes |
20,216 |
27,722 |
||||||
Profit attributable to the Corporation's shareholders |
14,789 |
20,090 |
||||||
Basic and diluted earnings per share (in $) |
$ |
2.14 |
$ |
2.90 |
||||
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 2, 2022 are available on the SEDAR website at www.sedar.com and on the website of Lassonde Industries Inc. |
"First-quarter results reflect the strength of our national brand products across North America. We increased our sales volume and selling price adjustments allowed us to offset inflationary pressures on the cost of our inputs. However, additional increases in transportation costs incurred to deliver products to clients had a negative impact on our profitability. During the first quarter, we launched our multi-year strategy, and I am fully confident that the initiatives put forward will be beneficial for our clients while creating further value for our shareholders," said Nathalie Lassonde, Chief Executive Officer and Vice-Chair of the Board of Directors of Lassonde Industries Inc.
"I am confident that our recently announced investments will enable us to further strengthen our leadership position in the juice and drink industry and improve the Corporation's performance over the long term. A key early priority includes the revitalization of our U.S. business by improving our production costs and capabilities while also fortifying our leadership in Canada with the investment in a new aseptic production line. We have a talented and dedicated team that proudly live our values every day and these efforts will continue to provide them the tools required to drive long profitable growth and value to our customers," added Vincent R. Timpano, President and Chief Operating Officer of Lassonde Industries Inc.
In the "Outlook" section of its 2021 annual MD&A, the Corporation announced the launch of a multi-year strategy to drive long-term value, accelerate growth, as well as improve overall margins and profitability. In 2022, this strategic initiative is expected to result in related operating expenses ranging between $10 million and $15 million. In addition, the initiative is supported by overall capital expenditures targeted at approximately $100 million in 2022, which represents approximately the double of historical levels.
The first phase of the strategy, in 2022, focuses primarily on three key areas: 1) Strategic review to establish the cornerstone of the Corporation's growth plan for the coming years; 2) Revitalization of U.S. operations ("Project Eagle") to optimize and increase production capacity as well as increase the operational efficiency; and 3) Implementation of new management systems and upgrading of technology infrastructures.
During the first quarter of 2022, the Corporation started its strategic review and substantially progressed the diagnostic step of its Project Eagle. It incurred expenses of $2.4 million related to these activities.
During the first quarter of 2022, the Corporation made capital expenditures of $2.2 million in growth and optimization projects. These investments include an ongoing project aimed at improving productivity and production capacity in Canada. It also invested $1.5 million in technology projects.
For the first quarter of 2022, the Corporation's sales totalled $509.0 million, up $42.2 million (9.1%) from $466.8 million in the same quarter of 2021. This increase was essentially due to selling price adjustments that had a favourable impact on sales of private label and national brand products as well as to an increase in the sales volume of the Corporation's national brands.
The Corporation's operating profit for the first quarter of 2022 totalled $22.4 million, down from $31.4 million in the first quarter of 2021. Excluding $2.4 million in expenses related to the multi-year strategy, operating profit was down $6.6 million. This decrease came mainly from a $10.9 million increase in transportation costs incurred to deliver products to the Corporation's clients resulting from higher tariffs and fuel surcharges, partly offset by a higher gross margin. The Canadian operations generated a higher gross margin as a result of (i) the favourable impact of selling price adjustments on the Corporation's national brand sales and (ii) a favourable foreign exchange impact that affected purchases of raw materials in foreign currencies, partly offset by an increase in the cost of inputs, including an increase in the cost of transporting them to the Corporation's plants. As for the U.S. operations, gross margin increased slightly year over year, reflecting the favourable impact of selling price adjustments, partly offset by (i) a decrease in sales volume of private label products and an unfavourable impact from this decrease on the allocation of manufacturing overhead to product costs, and by (ii) an increase in the cost of inputs, including an increase in the cost of transporting them to the Corporation's plants.
Profit attributable to the Corporation's shareholders totalled $14.8 million, resulting in basic and diluted earnings per share of $2.14 for the first quarter of 2022 compared to $20.1 million and $2.90, respectively, for the same quarter in 2021.
For the first quarter of 2022, operating activities used $20.6 million in cash, while they had generated $4.4 million in cash during the same quarter of 2021. This increase in cash outflows is mainly explained by a change in non-cash operating working capital items that used $43.9 million in cash during the first quarter of 2022 compared to $22.7 million in cash used in the same period last year.
As at April 2, 2022, the Corporation's long-term debt, including the current portion, stood at $214.9 million compared to $175.4 million at year-end 2021.
According to industry data, sales volume for the Canadian fruit juice and drink market increased during the first quarter of 2022 when compared to the first quarter of 2021, whereas sales volume for the U.S. fruit juice and drink market decreased. Lassonde's sales were up 9.1% in the first quarter of 2022 compared to the same quarter of 2021, mainly due to selling price adjustments. However, its U.S. operations continue to endure labour-related challenges in addition to those related to supply that the Corporation as a whole continues to address. These challenges are still impacting the Corporation's ability to fully meet customer demand. Despite selling price adjustments that successfully offset significant increases in input costs, Lassonde's profitability decreased in the first quarter of 2022 due to recent inflationary pressure that is strongly affecting transportation costs.
As mentioned above, in the first quarter of 2022, Lassonde launched a multi-year strategy to drive long-term value, accelerate growth, as well as improve overall margins and profitability. During the last nine months of 2022, Lassonde plans to progress the work undertaken to deploy its strategic review, the revitalization of its U.S. operations and the upgrade of its technology infrastructures. It also plans to start implementing new demand planning and transportation management systems in the United States.
Based on industry projections, sales volumes for the fruit juice and drink markets in Canada and the U.S. are expected to slightly decrease in 2022. Despite this anticipated decrease, Lassonde expects to maintain moderate sales growth in 2022. In the second quarter of 2022, profitability will still be under pressure as the Corporation will continue to address ongoing supply chain issues, labour challenges, and continued inflationary pressures, which are particularly affecting packaging, orange concentrate and transportation costs. Early transformation initiatives in the U.S. and the run-rate effect of selling price adjustments are expected to deliver benefits in the second half of the year, which should offset a softer first-half performance.
In accordance with the Corporation's dividend policy, the Board of Directors today declared a quarterly dividend of $0.70 per share, payable on June 15, 2022 to all registered holders of Class A and Class B shares on May 26, 2022. On an annualized basis, this dividend represents approximately 25% of the 2021 profit attributable to the Corporation's shareholders. This dividend is an eligible dividend.
The Corporation announces that Ms. Geneviève Fortier has notified them of her withdrawal from the Corporation's Board of Directors (the "Board") and that she will not be able to stand for re-election as director at the Corporation's Annual General Meeting of Shareholders on May 20, 2022 (the "Meeting"). Ms. Fortier has been appointed Chair of the Board of Directors of Investissement Québec ("IQ"), a Quebec government corporation whose mission is to contribute to the economic development of Quebec. Given IQ's role with Quebec and international businesses and Ms. Fortier's position within the organization, she will no longer be able to sit on the Board as is the case for those of other private or public businesses who have or who may potentially have dealings with IQ or that may receive financing from the Government of Quebec.
Mr. Pierre-Paul Lassonde, Chairman of the Board, said: "On behalf of the Corporation, I would like to extend our sincere gratitude to Geneviève Fortier for her excellent contribution to the Corporation. We wish her all the best in her new position within Investissement Québec."
Following the withdrawal of Ms. Fortier's nomination, the Board of Directors has set at seven (7) the number of directors to be elected at the meeting. The revised list of nominees for the position of director that will be submitted to shareholders at the Meeting will include the other nominees described in the Corporation's Management Proxy Circular, dated March 25, 2022, available under the Corporation's profile on SEDAR (www.sedar.com). All other matters to be considered at the Meeting, described in the circular, remain unchanged.
Lassonde Industries Inc. is a North American leader in the development, manufacture and sale of ready-to-drink juices and drinks marketed under brands such as Apple & Eve, Fairlee, Fruité, Graves, Oasis, Old Orchard, Rougemont and Sun-Rype. Lassonde is the largest producer of fruit juices and drinks in Canada and one of the two largest producers of store brand shelf-stable fruit juices and drinks in the United States. It is also a major producer of cranberry sauces. The Corporation also produces fruit-based snacks in the form of bars and bites.
Lassonde also develops, manufactures and markets specialty food products such as pasta sauces and soups, mainly under private label, as well as fondue broths and sauces under the brand Canton. The Corporation also imports and markets selected wines from various countries and manufactures apple ciders and cider-based beverages.
The Corporation produces superior quality products through the expertise of more than 2,700 people working in 17 plants across Canada and the United States. To learn more, visit www.lassonde.com.
In this document and in other documents filed with Canadian regulatory authorities or in other communications, the Corporation may from time to time make written or oral forward-looking statements within the meaning of applicable securities legislation. Forward-looking statements notably include estimates, expectations, forecasts, and projections of future investment spending, revenues, expenses, earnings, profit, indebtedness, financial position, losses, upcoming projects, business and management strategies, and business growth and expansion. In the context of this document, forward-looking statements are particularly used to discuss preliminary results, the rate of sales growth, and profit attributable to shareholders. The forward-looking statements contained herein are used to help readers better understand Lassonde's financial position and the results of its operations as at the dates presented and may not be appropriate for other purposes. Forward-looking statements can be recognized by such words as "may," "should," "believes," "predicts," "plans," "expects," "intends," "anticipates," "estimates," "projects," "objective," "continues," "proposes," "targets," or "aims" as well as words and expressions of a similar nature and whether they are used in the affirmative or negative or used in the conditional or future tense. Forward-looking statements also include any statements that do not refer to historical facts.
By their very nature, forward-looking statements are based on assumptions and involve inherent risks and uncertainties, both general and specific in nature. It is therefore possible that the forecasts, projections and other statements will not be achieved or will differ significantly from those expressed or implied in such forward-looking statements or could affect the extent to which a particular forecast, projection or other statement materializes. Although Lassonde believes that the expectations reflected in these forward-looking statements are reasonable, it can give no assurances that these expectations will prove to be correct.
Readers are cautioned against placing undue reliance on forward-looking statements when making decisions, as the actual results could differ considerably from the opinions, plans, objectives, expectations, forecasts, estimates and intentions expressed in such forward-looking statements due to various significant factors. Such factors include, among others, the economic, industrial, competitive and regulatory environment in which Lassonde operates or factors that are likely to have an impact on its operations, its ability to attract and retain customers, consumers, and qualified staff, the availability and cost of raw materials and transportation, its operating costs, and the price of its finished products in the various markets where it operates.
The Corporation cautions that the foregoing list of factors is not exhaustive. For additional information about the risks, uncertainties, and assumptions that could cause Lassonde's actual results to differ from its stated expectations, readers may also consult the "Uncertainties and Principal Risk Factors" section of the Corporation's most recent annual MD&A and the other documents it files from time to time with securities regulators in Canada and available on www.sedar.com. The forward-looking statements contained in this press release reflect the Corporation's expectations on this date and are subject to change after this date. Lassonde does not undertake to update publicly or to revise these forward-looking statements, whether as a result of new information, future events or otherwise, unless required by applicable legislation or regulation.
SEDAR registration number: 00002099
SOURCE Lassonde Industries Inc.
Investor contact, Eric Gemme, Chief Financial Officer, Lassonde Industries Inc., 450-469-4926, extension 10456; Media contact, Isabelle Nadeau, Director, Communications, Lassonde Industries Inc., 450-469-4926, extension 10167
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