ROUGEMONT, QC, March 27, 2017 /CNW Telbec/ - Lassonde Industries Inc. (TSX: LAS.A) ("Lassonde") posted sales of $1,509.5 million in 2016, a 4.2% increase year over year. Profit attributable to the Company's shareholders for 2016 totalled $68.2 million, up $11.2 million from 2015.
| Financial highlights (in thousands of dollars) |
Fourth quarters |
Years |
||||||||||
| December 31, 2016 |
December 31, 2015 |
December 31, 2016 |
December 31, 2015 |
|||||||||
| Sales |
$ |
385,646 |
$ |
401,473 |
$ |
1,509,505 |
$ |
1,449,287 |
||||
| Operating profit |
36,115 |
36,182 |
126,175 |
111,252 |
||||||||
| Profit before income taxes |
32,932 |
30,442 |
104,860 |
86,390 |
||||||||
| Profit attributable to the Company's shareholders |
21,915 |
20,197 |
68,152 |
56,979 |
||||||||
| Basic and diluted earnings per share (in $) |
$ |
3.14 |
$ |
2.89 |
$ |
9.75 |
$ |
8.15 |
||||
| Note: These are financial highlights only. Management's Discussion and Analysis, the audited consolidated financial statements and notes thereto for the year ended December 31, 2016 will be available on the SEDAR website at www.sedar.com and on the website of Lassonde Industries Inc. |
"In 2016, we made substantial progress in both profitability and in reducing the Company's indebtedness. Given our flexible business model, we should be well positioned to face a potentially challenging environment in 2017. We're paying particular attention to any tax- and customs-related changes that might affect our U.S. operations, and we will adjust our business strategies to minimize any potential negative effects of such changes and of a relatively weak Canadian dollar compared to the U.S. dollar," said Pierre-Paul Lassonde, Chairman of the Board and Chief Executive Officer of Lassonde Industries Inc.
2016 Financial Results
The Company's sales amounted to $1,509.5 million in 2016, up $60.2 million (4.2%) from $1,449.3 million in 2015. This sales growth was driven mainly by higher sales of private label products and by a favourable foreign exchange impact, partly offset by lower sales volumes of the Company's national brands.
For the year ended December 31, 2016, the Company's operating profit totalled $126.2 million, a $14.9 million year-over-year increase that came mainly from an improved contribution margin by the U.S. and Canadian operations, from a favourable impact of foreign exchange movements on the conversion of the financial results of the U.S. entities into Canadian dollars, and from a 2015 charge related to customs duties claimed by the U.S. authorities. These items were partly offset by an unfavourable impact of a low Canadian dollar on raw material purchases made in U.S. dollars and by higher salary expenses.
The Company's financial expenses went from $27.8 million in 2015 to $21.0 million in 2016. This $6.8 million decrease was largely due to a smaller change in the fair value of participating loans arising from the full settlement of these loans in May 2016 as well as to a decrease in interest expense resulting from a reduction in indebtedness and from lower interest rates on the Company's U.S. credit facilities. 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.
"Other (gains) losses" went from a $3.0 million gain in 2015 to a $0.4 million loss in 2016. The $3.0 million gain in 2015 was mainly due to $4.0 million in foreign exchange gains, partly offset by $1.3 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 $0.4 million loss in 2016 was essentially due to $0.5 million in losses resulting from a change in the fair value of interest rate swaps related to LPC's term loan, partly offset by $0.1 million in foreign exchange gains.
Profit before income taxes totalled $104.9 million in 2016, up $18.5 million (21.4%) from $86.4 million in 2015.
Income tax expense stood at $32.7 million in 2016 compared to $26.2 million in 2015. The 2016 effective income tax rate was 31.2% versus 30.3% last year. This increase reflects an unfavourable change in the geographic mix of the Company's profit before income taxes as well as the use, in 2015, of $1.2 million in capital losses carried forward against a $1.2 million foreign exchange gain. The Company had previously recorded a valuation allowance against the tax asset related to these losses.
The 2016 profit was $72.2 million, up $12.0 million from $60.2 million last year.
Profit attributable to the Company's shareholders totalled $68.2 million, resulting in basic and diluted earnings per share of $9.75 for 2016. In 2015, profit attributable to the Company's shareholders had stood at $57.0 million, resulting in basic and diluted earnings per share of $8.15.
The Company's cash flows from operating activities totalled $147.4 million during 2016 versus $116.8 million last year. Financing activities used $115.8 million in 2016 while they had used $88.3 million last year. Investing activities used $28.2 million during 2016 while they had used $19.3 million last year. At year-end 2016, the Company reported $0.5 million in cash and cash equivalents and a $6.4 million bank overdraft compared to $0.5 million in cash and cash equivalents and a $9.5 million bank overdraft at the end of last year.
Fourth Quarter Financial Results
The Company's sales totalled $385.6 million in the fourth quarter of 2016, down $15.9 million or 3.9% from $401.5 million in the same period of 2015. Part of this decrease stems from the fact that, in the fourth quarter of 2016, there were four fewer delivery days than in the fourth quarter of 2015, resulting in an estimated $24.7 million decrease in year-over-year sales. Excluding this circumstance, to obtain a comparable basis, the remaining $8.8 million increase in sales was mainly due to an increase in sales of private label products, partly offset by a decrease in the sales volume of national brands.
For the fourth quarter of 2016, the Company's operating profit totalled $36.1 million compared to $36.2 million in the same quarter last year, a $0.1 million year-over-year decrease attributable to an unfavourable impact of lower sales resulting from four fewer delivery days than in the fourth quarter of 2015 as well as to an increase in the price of orange concentrates, largely offset by improved profitability within the Canadian operations.
The Company's financial expenses went from $6.8 million in the fourth quarter of 2015 to $3.4 million in the fourth quarter of 2016. This $3.4 million decrease was largely due to the favourable impact of the full settlement of participating loans in May 2016 and to a lower interest expense resulting from a reduction in indebtedness and from a lower interest rate on the Company's U.S. credit facilities.
"Other (gains) losses" went from a $1.1 million gain in the fourth quarter of 2015 to a $0.2 million gain in 2016. The 2015 fourth-quarter gain of $1.1 million was mainly due to $0.6 million in foreign exchange gains and to $0.4 million in gains resulting from a change in the fair value of interest rate swaps related to LPC's term loan. The 2016 fourth-quarter gain was essentially due to foreign exchange gains.
Profit before income taxes stood at $32.9 million in the fourth quarter of 2016, up $2.5 million from $30.4 million in the fourth quarter of 2015.
An income tax expense at an effective rate of 29.9% in 2016 (30.0% in 2015) brought the 2016 fourth-quarter profit to $23.1 million, up $1.8 million from the $21.3 million in profit generated during the fourth quarter of 2015.
Profit attributable to the Company's shareholders totalled $21.9 million, resulting in basic and diluted earnings per share of $3.14 in the fourth quarter of 2016. In the fourth quarter of 2015, profit attributable to the Company's shareholders had totalled $20.2 million, resulting in basic and diluted earnings per share of $2.89.
Outlook
For 2016, the Company saw moderate growth in industry sales in the U.S. fruit juice and drink market. Barring any significant tax- or customs-related changes in the United States, the relative stability of the U.S. fruit juice and drink market should continue into 2017. In the Canadian market, the situation is different, as industry sales were down in 2016. The Company does not see any signs of this trend reversing in 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 sales growth of 4.2% in 2016. Excluding foreign exchange impacts, the adjusted growth rate was 1.9%. 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. It should be noted, however, that this forecast could change significantly if major changes were to affect the tax or customs treatments of the raw material imports of the Company's U.S. subsidiaries.
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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