ROUGEMONT, QC, Nov. 11, 2016 /CNW Telbec/ - Lassonde Industries Inc. (TSX: LAS.A) ("Lassonde") posted sales of $377.2 million in the third quarter of 2016, a $13.9 million increase year over year. Profit attributable to the Company's shareholders for this period totalled $17.6 million, up $2.8 million from the third quarter of 2015.
| Financial highlights (in thousands of dollars) |
Third quarters |
||||
| October 1, |
September 26, |
||||
| Sales |
$ |
377,225 |
$ |
363,337 |
|
| Operating profit |
32,304 |
28,806 |
|||
| Profit before income taxes |
26,779 |
22,539 |
|||
| Profit attributable to the Company's shareholders |
17,596 |
14,837 |
|||
| Basic and diluted earnings per share (in $) |
$ |
2.52 |
$ |
2.12 |
|
| 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 October 1, 2016 will be available on the SEDAR website at www.sedar.com and on the website of Lassonde Industries Inc. |
"We are satisfied with our results for the third quarter and first nine months of 2016. They reflect the sound performance of all our operations as well as a significant reduction in our financial expenses. It's important to mention, however, that our cumulative results benefited from five more delivery days than in 2015, and that the fourth quarter of 2016 may be affected by a reversal of this effect," said Pierre-Paul Lassonde, Chairman of the Board and Chief Executive Officer of Lassonde Industries Inc.
Financial results
The Company's sales totalled $377.2 million in the third quarter of 2016, up $13.9 million from $363.3 million in sales in the same period of 2015. This increase was primarily driven by an increase in sales of private label products, partly offset by a decrease in the sales volume of national brands. For the first nine months of 2016, sales totalled $1,123.9 million, up 7.3% from $1,047.8 million in the first nine months of 2015.
The Company's operating profit for the third quarter of 2016 totalled $32.3 million, up $3.5 million from operating profit of $28.8 million in the same quarter last year. This increase came mainly from improved profitability within the Canadian operations due to higher sales, partly offset by an unfavourable impact of a low Canadian dollar on U.S.-dollar purchases. The Company also benefited from improved profitability within the U.S. operations due to a slight decrease in its input costs. Operating profit for the first nine months of 2016 stood at $90.1 million, up $15.0 million from $75.1 million for the first nine months of 2015.
The Company's financial expenses went from $7.6 million in the third quarter of 2015 to $6.1 million this quarter. This $1.5 million decrease was mainly attributable to a smaller change in the fair value of participating loans due to the full settlement of these loans in May 2016 and to a lower interest expense resulting from a reduction in indebtedness. These favourable items were partly offset by a $1.3 million write-off of capitalized financial costs following the modification and renewal of the U.S. credit facilities. For the first nine months, financial expenses went from $21.0 million in 2015 to $17.6 million this fiscal year.
"Other (gains) losses" went from a $1.3 million gain in the third quarter of 2015 to a $0.6 million gain in 2016. The 2015 third‑quarter gain of $1.3 million was mainly due to $1.8 million in foreign exchange gains partly offset by $0.7 million in losses resulting from a change in the fair value of interest rate swaps related to the term loan of Lassonde Pappas and Company, Inc. ("LPC"). The $0.6 million gain in the third quarter of 2016 was mainly due to $0.3 million in foreign exchange gains and to a $0.2 million gain resulting from a change in the fair value of the interest rate swap related to LPC's term loan. For the first nine months, the "Other (gains) losses" item was a $0.6 million loss in 2016 compared to a $1.9 million gain in 2015.
Profit before income taxes totalled $26.8 million for the third quarter of 2016, up $4.3 million from $22.5 million in the same quarter of 2015. For the first nine months of 2016, profit before income taxes stood at $71.9 million, up $16.0 million from $55.9 million in the first nine months of 2015.
Income tax expense went from $6.9 million in the third quarter of 2015 to $8.3 million in the same quarter of 2016. At 31.0%, the 2016 third-quarter effective income tax rate was slightly higher than the 30.5% rate in the same quarter of 2015. The higher tax rate reflects an unfavourable change in the geographic mix of the Company's taxable income. Income tax expense for the first nine months of 2016 stood at $22.9 million, up $5.8 million from $17.1 million in the first nine months of 2015.
Profit for the third quarter of 2016 was $18.5 million, up $2.8 million from $15.7 million in the third quarter of last year. For the first nine months of 2016, profit totalled $49.1 million versus profit of $38.9 million in the first nine months of 2015.
Profit attributable to the Company's shareholders was $17.6 million, resulting in basic and diluted earnings per share of $2.52 for the third quarter of 2016. In the third quarter of 2015, profit attributable to the Company's shareholders had totalled $14.8 million, resulting in basic and diluted earnings per share of $2.12. For the first nine months of 2016, profit attributable to the Company's shareholders totalled $46.2 million, resulting in basic and diluted earnings per share of $6.62 and, in the same nine-month period of 2015, profit had totalled $36.8 million, resulting in basic and diluted earnings per share of $5.26.
Cash flows from operating activities generated $46.9 million in cash during the third quarter of 2016, while they had generated $27.9 million in cash during the same quarter last year. Financing activities used $54.5 million in the third quarter of 2016, while these activities had used $22.7 million in the same quarter of 2015. Investing activities used $7.0 million in the third quarter of 2016 compared to $4.2 million in the same quarter of 2015. At the end of the third quarter of 2016, the Company reported a cash and cash equivalents balance of $8.3 million and a bank overdraft of $nil compared to a cash and cash equivalents balance of $0.5 million and a bank overdraft of $14.3 million at the end of the third quarter of 2015.
Outlook
The Company is seeing moderate growth in industry sales in the U.S. fruit juice and drink market. The situation is different in the Canadian market, as industry sales remain lower. As a result, the competitive environment in Canada remains challenging, and the Company does not see any signs of activity increasing by the end of 2016. 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.
During the first quarter of 2016, the Company's sales and profit increased significantly year over year. Part of this increase came from the fact that, in the first quarter of 2016, there were five more delivery days than in the first quarter of 2015. Since the number of delivery days will remain constant for the year as a whole, this increase is expected to partially reverse as there will be five fewer delivery days in the fourth quarter of 2016 than in the same period of 2015. 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 2016 compared to those of 2015.
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 the second largest producer 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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