TSX: MFI
www.mapleleaffoods.com
TORONTO, Aug. 1, 2012 /CNW/ - Maple Leaf Foods Inc. (TSX: MFI) today reported its financial results for the second quarter ended June 30, 2012.
- Adjusted Operating Earnings(1) for the second quarter were $71.9 million compared to $77.5 million last year
- Net earnings for the second quarter were $32.5 million, compared to $24.6 million in the second quarter last year
- Adjusted Earnings per Share(2) were $0.28 compared to $0.30 last year
"Our results rallied significantly from a weak first quarter due to improved profitability in both our fresh bakery and prepared meats businesses," said Michael H. McCain, President and CEO. "We've implemented selective price increases, grown our core branded businesses and our value creation initiatives are contributing to margin growth. While we made excellent progress in the quarter, we are heading into challenging commodity markets driven by drought conditions throughout North America that will fuel further food inflation. Our business fundamentals are strong and we will take action to manage ongoing cost increases."
(1): Adjusted Operating Earnings, a non-IFRS measure, is defined as earnings from operations before restructuring and other related costs and associated gains, other income (expense) and the impact of the change in fair value of non-designated interest rate swaps, unrealized (gains) losses on commodity futures contracts and the change in fair value of biological assets.
(2): Adjusted Earnings per Share ("Adjusted EPS"), a non-IFRS measure, is defined as basic earnings per share adjusted for the impact of restructuring and other related costs and associated gains, the impact of the change in fair value of non-designated interest rate swaps, hedge ineffectiveness recognized in earnings, unrealized (gains) losses on commodity futures contracts, and the change in fair value of biological assets, net of tax and non-controlling interest.
Please refer to the section entitled Reconciliation of Non-IFRS Financial Measures at the end of this news release.
Financial Overview
Business Segment Review
Following is a summary of sales by business segment:
| (Unaudited) | Second Quarter | Year-to-Date | ||
| ($ thousands) | 2012 | 2011 | 2012 | 2011 |
| Meat Products Group | $775,971 | $762,212 | $1,501,508 | $1,480,453 |
| Agribusiness Group | 79,543 | 70,918 | 144,840 | 128,211 |
| Protein Group | $855,514 | $833,130 | $1,646,348 | $1,608,664 |
| Bakery Products Group | 404,736 | 405,071 | 774,725 | 777,479 |
| Sales | $1,260,250 | $1,238,201 | $2,421,073 | $2,386,143 |
The following table summarizes Adjusted Operating Earnings by business segment:
| (Unaudited) | Second Quarter | Year-to-Date | ||
| ($ thousands) | 2012 | 2011 | 2012 | 2011 |
| Meat Products Group | $22,229 | $21,102 | $44,303 | $47,749 |
| Agribusiness Group | 19,065 | 27,706 | 38,156 | 41,711 |
| Protein Group | $41,294 | $48,808 | $82,459 | $89,460 |
| Bakery Products Group | 32,150 | 29,884 | 35,415 | 42,071 |
| Non-allocated Costs in Adjusted Operating Earnings(i) |
(1,559) | (1,156) | (5,470) | (3,308) |
| Adjusted Operating Earnings | $71,885 | $77,536 | $112,404 | $128,223 |
| (i) | Non-allocated costs comprise expenses not separately identifiable to business segment groups, and do not form part of the measures used by the Company when assessing the segments' operating results. |
Protein Group
Sales for the Protein Group, which includes the Company's Meat Products Group and Agribusiness Group, increased 3% to $855.5 million in the second quarter of 2012, from $833.1 million for the prior year period. Adjusted Operating Earnings decreased 15% to $41.3 million compared to $48.8 million for the second quarter last year. Results for the Company's Meat Products Group and Agribusiness Group should be viewed in combination due to the higher number of intercompany transactions and correlated factors within these operations.
Meat Products Group
Includes value-added prepared meats, lunch kits; and fresh pork, poultry and turkey products sold to retail, foodservice, industrial and convenience channels. Includes leading Canadian brands such as Maple Leaf ®, Schneiders ® and many leading sub-brands.
Meat Products Group sales for the second quarter increased 2% to $776.0 million from $762.2 million for the second quarter last year. After adjusting for the impact of a weaker Canadian dollar, which increased the sales value of pork exports, sales increased 1%. The increase in sales was primarily due price increases implemented earlier in the year and a higher value sales mix in the prepared meats business.
Adjusted Operating Earnings for the second quarter increased 5% to $22.2 million compared to $21.1 million last year, due to higher prepared meats and fresh poultry results, offset by compressed pork processing margins.
Earnings in the prepared meats business benefited from price increases implemented in 2011 and early 2012 to manage rising inflationary costs and a higher margin sales mix due to strong product innovation and sales execution. Also contributing to stronger earnings were benefits from the Company's network transformation initiatives, including the closure of two sub-scale facilities last year and continued simplification of the prepared meats product portfolio.
Earnings increased in fresh poultry operations, benefiting from improvements in industry poultry processor margins. The business also benefited from continued growth in higher value products under the Maple Leaf Prime Chicken brand.
Earnings declined in primary pork processing, reflecting unfavourable market conditions in North America and lower margins on export sales, primarily in the Japanese and Korean markets.
Agribusiness Group
Consists of Canadian hog production, animal by-product recycling operations including bio-diesel manufacturing and distribution.
Sales in the Agribusiness Group increased 12% to $79.5 million for the second quarter compared to $70.9 million last year, reflecting higher toll feed sales.
Adjusted Operating Earnings for the second quarter of 2012 decreased 31% to $19.1 million compared to $27.7 million last year. Hog production earnings declined due to higher feed costs and lower market prices for hogs. Earnings in the by-products recycling operations were impacted by a combination of higher prices paid for raw materials and lower selling prices following declines in certain commodities during the quarter.
Bakery Products Group
Includes fresh and frozen bakery products, including breads, rolls, bagels, specialty and artisan breads, sweet goods, and fresh pasta and sauces sold to retail, foodservice and convenience channels. It includes national brands such as Dempster's®, Tenderflake®, Olivieri® and New York Bakery CoTM, and many leading regional brands.
Bakery Products Group sales for the second quarter were $404.7 million, compared to $405.1 million last year. After adjusting for the closure of a bakery and related exit of unprofitable categories in the U.K. and currency translation on sales in the U.S. and U.K., sales increased 1%. The sales increase was mainly due to stronger volumes and selling prices in the North American frozen bakery operations. Volumes in the fresh bakery business were comparable to last year.
Adjusted Operating Earnings for the second quarter of 2012 increased 8% to $32.2 million compared to $29.9 million last year. While results in the fresh bakery business were consistent with last year, there was a significant improvement from the first quarter as a result of increased promotional and marketing activities and warm summer weather. However, an underlying decline in consumer demand continues to impact results. Included in results are $0.8 million in duplicative overhead costs related to the commissioning of a new fresh bakery in Hamilton, Ontario and which are expected to continue until early 2013. The Company expects the new bakery to be accretive to operating earnings commencing in 2013, with the closure of the third Toronto bakery and as volumes consolidate into the new Hamilton facility. Results from the fresh pasta business declined due to higher inflationary and operational costs, and increased advertising and promotional spending.
Frozen bakery earnings continued to improve due to higher pricing and volumes in the North American business, an improved sales mix in the U.K., and lower overhead costs resulting from the closure of the Walsall, U.K. bakery in the first quarter of 2012. These benefits were partially offset by higher inflationary costs in the business.
Margin Targets
The Company previously disclosed a 2012 Earnings Before Interest, Tax, Depreciation and Amortization ("EBITDA") margin target of 9.5%. As a result of short-term weakness in primary pork industry margins and a challenging first quarter performance in the bakery business, the Company now expects EBITDA margin to be up to one percent lower than previously estimated. EBITDA margin in the bakery business is expected to average 11.5% for the last three quarters of the year, however lower first quarter performance may reduce the previously disclosed full year EBITDA margin of 11.5% by up to 1.5%. The protein business is expected to achieve a run rate of 8.5% by the end of the year however the full year margin may be up to 0.5% lower than the previously disclosed 2012 target of 8.5% primarily due to compressed primary pork processing margins in 2012. The Company's 2015 EBITDA margin targets of 12.5% remain unchanged.
Capital Expenditure Estimate
The Company currently estimates its capital expenditures for the full year of 2012 will be approximately $350 million and this is a revision from the previously disclosed estimate of $435 million. It reflects lower base business capital spend to date and approximately $30 million timing differences in strategic capital spend. The timing differences related to strategic capital do not reflect significant changes in the estimates of construction timing.
Other Matters
On July 31, 2012, Maple Leaf Foods declared a dividend of $0.04 per share payable September 28, 2012 to shareholders of record at the close of business on September 7, 2012. Unless indicated otherwise by the Company in writing on or before the time the dividend is paid, the dividend will be considered an Eligible Dividend for the purposes of the "Enhanced Dividend Tax Credit System".
An investor presentation related to the Company's second quarter financial results is available at www.mapleleaffoods.com and can be found under Investor Relations on the Quarterly Results page. A conference call will be held at 2:30 p.m. EDT on August 1, 2012 to review Maple Leaf Foods' second quarter financial results. To participate in the call, please dial 416-340-8018 or 866-223-7781. For those unable to participate, playback will be made available an hour after the event at 905-694-9451 / 800-408-3053 (Passcode 9670637).
A webcast presentation of the second quarter financial results will also be available at http://www.media-server.com/m/p/ckjwbc92
The Company's full financial statements and related Management's Discussion and Analysis are available for download on the Company's website.
Reconciliation of Non-IFRS Financial Measures
The Company uses the following non-IFRS measures: Adjusted Operating Earnings and Adjusted EPS. Management believes that these non-IFRS measures provide useful information to both Management and investors in measuring the financial performance of the Company for the reasons outlined below. These measures do not have a standardized meaning prescribed by IFRS and therefore they may not be comparable to similarly titled measures presented by other publicly traded companies and should not be construed as an alternative to other financial measures determined in accordance with IFRS.
Adjusted Operating Earnings
The following tables reconcile earnings from operations before restructuring and other related costs and associated gains, other income (expense) and the impact of the change in fair value of non-designated interest rate swaps, unrealized (gains) losses on commodity futures contracts and the change in fair value of biological assets to net earnings as reported under IFRS in the unaudited earnings for the three and six months ended, as indicated below. Management believes that this is the most appropriate basis on which to evaluate operating results, as restructuring and other related costs, other income (expense) and the change in fair value of non-designated interest rate swaps, unrealized (gains) losses on commodity futures contracts and the change in fair value of biological assets are not representative of operational results during the period.
| (Unaudited) | Three months ended June 30, 2012 | ||||||
| ($ thousands) | Meat Products Group |
Agribusiness Group |
Bakery Products Group |
Unallocated costs |
Consolidated | ||
| Net earnings | $32,526 | ||||||
| Income taxes | 12,922 | ||||||
| Earnings from operations before income taxes | $45,448 | ||||||
| Interest expense | 18,413 | ||||||
| Change in the fair value of non-designated interest rate swaps | 220 | ||||||
| Other (income) expense | (2,259) | (433) | (1,349) | 624 | (3,417) | ||
| Restructuring and other related costs | 8,571 | - | 1,205 | - | 9,776 | ||
| Earnings from Operations | 22,229 | 19,065 | 32,150 | (3,004) | 70,440 | ||
| Decrease in fair value of biological assets | - | - | - | 3,233 | 3,233 | ||
| Unrealized gains on commodity futures contracts | - | - | - | (1,788) | (1,788) | ||
| Adjusted Operating Earnings | $22,229 | $19,065 | $32,150 | $(1,559) | $71,885 | ||
| (Unaudited) | Three months ended June 30, 2011 | ||||||
| ($ thousands) | Meat Products Group |
Agribusiness Group |
Bakery Products Group |
Unallocated costs |
Consolidated | ||
| Net earnings | $24,582 | ||||||
| Income taxes | 10,441 | ||||||
| Earnings from operations before income taxes | 35,023 | ||||||
| Interest expense | 17,074 | ||||||
| Change in the fair value of non-designated interest rate swaps | 5,623 | ||||||
| Other (income) expense | (25) | 26 | - | 76 | 77 | ||
| Restructuring and other related costs | 4,048 | - | 12,547 | - | 16,595 | ||
| Earnings from Operations | 21,102 | 27,706 | 29,884 | (4,300) | 74,392 | ||
| Decrease in fair value of biological assets | - | - | - | 9,828 | 9,828 | ||
| Unrealized gains on commodity futures contracts | - | - | - | (6,684) | (6,684) | ||
| Adjusted Operating Earnings | $21,102 | $27,706 | $29,884 | $(1,156) | $77,536 | ||
| (Unaudited) | Six months ended June 30, 2012 | ||||||
| ($ thousands) | Meat Products Group |
Agribusiness Group |
Bakery Products Group |
Unallocated costs |
Consolidated | ||
| Net earnings | $33,289 | ||||||
| Income taxes | 15,002 | ||||||
| Earnings from operations before income taxes | 48,291 | ||||||
| Interest expense | 36,056 | ||||||
| Change in the fair value of non-designated interest rate swaps | (4,933) | ||||||
| Other (income) expense | (2,167) | (523) | (1,371) | 760 | (3,301) | ||
| Restructuring and other related costs | 23,043 | - | 7,089 | - | 30,132 | ||
| Earnings from Operations | 44,303 | 38,156 | 35,415 | (11,629) | 106,245 | ||
| Decrease in fair value of biological assets | - | - | - | 1,101 | 1,101 | ||
| Unrealized losses on commodity futures contracts | - | - | - | 5,058 | 5,058 | ||
| Adjusted Operating Earnings | $44,303 | $38,156 | $35,415 | $(5,470) | $112,404 | ||
| (Unaudited) | Six months ended June 30, 2011 | ||||||
| ($ thousands) | Meat Products Group |
Agribusiness Group |
Bakery Products Group |
Unallocated costs |
Consolidated | ||
| Net earnings | $35,129 | ||||||
| Income taxes | 12,867 | ||||||
| Earnings from operations before income taxes | 47,996 | ||||||
| Interest expense | 35,025 | ||||||
| Change in the fair value of non-designated interest rate swaps | 958 | ||||||
| Other (income) expense | (29) | (63) | (78) | 92 | (78) | ||
| Restructuring and other related costs | 9,330 | - | 32,597 | 793 | 42,720 | ||
| Earnings from Operations | 47,749 | 41,711 | 42,071 | (4,910) | 126,621 | ||
| Decrease in fair value of biological assets | - | - | - | 4,321 | 4,321 | ||
| Unrealized gains on commodity futures contracts | - | - | - | (2,719) | (2,719) | ||
| Adjusted Operating Earnings | $47,749 | $41,711 | $42,071 | $(3,308) | $128,223 | ||
Adjusted Earnings per Share
The following table reconciles Adjusted Earnings per Share to basic earnings per share as reported under IFRS as indicated below. Management believes this is the most appropriate basis on which to evaluate financial results as restructuring and other related costs and associated gains, the changes in the fair value of non-designated interest rate swaps, hedge ineffectiveness recognized in earnings, unrealized (gains) losses on commodity futures contracts and the change in fair value of biological assets net of tax and non-controlling interests are not representative of operational results.
| (Unaudited) | Three months ended June 30, |
Six months ended June 30, |
||||
| ($ per share) | 2012 | 2011 | 2012 | 2011 | ||
| Basic earnings per share | $0.21 | $0.17 | $0.22 | $0.24 | ||
| Restructuring and other related costs(i) | 0.06 | 0.08 | 0.16 | 0.21 | ||
| Change in the fair value of non-designated interest rate swaps(ii) | 0.00 | 0.03 | (0.03) | 0.00 | ||
| Change in the fair value of unrealized (gains) losses on commodity futures contracts(ii) | (0.01) | (0.03) | 0.03 | (0.01) | ||
| Change in the fair value of biological assets (ii) | 0.02 | 0.05 | 0.01 | 0.02 | ||
| Adjusted Earnings per Share (iii) | $0.28 | $0.30 | $0.39 | $0.47 | ||
| (i) | Includes per share impact of restructuring and other related costs, net of tax and non-controlling interest. |
| (ii) | Includes per share impact of the change in fair value of non-designated interest rate swaps, hedge ineffectiveness recognized in earnings, unrealized (gains) losses on commodity futures contracts and the change in fair value of biological assets, net of tax. |
| (iii) | May not add due to rounding. |
Forward-Looking Statements
This document contains, and the Company's oral and written public communications often contain, "forward-looking information" within the meaning of applicable securities law. These statements 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, as well as statements with respect to beliefs, plans, objectives, expectations, anticipations, estimates and intentions. Specific forward-looking information in this document includes, but is not limited to, statements with respect to the anticipated benefits, timing, actions, costs and investments associated with the Company's Value Creation Plan, expectations regarding improving business trends, expectations regarding actions to reduce costs, restore and/or promote volumes and/or increase prices, improve efficiencies, expected duplicative overhead costs incurred due to the concurrent operation of the new Hamilton fresh bakery and existing bakeries, the expected use of cash balances, source of funds for ongoing business requirements, capital investments and debt repayment, and expectations regarding sufficiency of the allowance for uncollectible accounts. 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 information. These statements are not guarantees of future performance and involve assumptions and risks and uncertainties that are difficult to predict.
In addition, these statements and expectations concerning the performance of the Company's business in general are based on a number of factors and assumptions including, but not limited to: the condition of the Canadian, U.S., U.K. and Japanese economies; the rate of exchange of the Canadian dollar to the U.S. dollar, U.K. British pound and the Japanese yen; the availability and prices of raw materials, energy and supplies; product pricing; the availability of insurance; the competitive environment and related market conditions; improvement of operating efficiencies whether as a result of the Value Creation Plan or otherwise; continued access to capital; the cost of compliance with environmental and health standards; no adverse results from ongoing litigation; no unexpected actions of domestic and foreign governments; and the general assumption that none of the risks identified below or elsewhere in this document will materialize. All of these assumptions have been derived from information currently available to the Company including information obtained by the Company from third-party sources. These assumptions may prove to be incorrect in whole or in part. In addition, actual results may differ materially from those expressed, implied or forecasted in such forward-looking information, which reflect the Company's expectations only as of the date hereof.
Factors that could cause actual results or outcomes to differ materially from the results expressed, implied or forecasted by forward-looking information is discussed more fully in the Company's Annual Management's Discussion and Analysis for the period ended December 31, 2011 including the section entitled "Risk Factors", that are updated each quarter in the Management's Discussion and Analysis, and are available on SEDAR at www.sedar.com. The Company does not intend to, and the Company disclaims any obligation to, update any forward-looking information, whether written or oral, or whether as a result of new information, future events or otherwise except as required by law.
Maple Leaf Foods Inc. ("Maple Leaf" or the "Company") is a leading Canadian value-added meat, meals and bakery company committed to delivering quality food products to consumers around the world. Headquartered in Toronto, Canada, the Company employs approximately 19,500 people at its operations across Canada and in the United States, Europe and Asia.
Condensed Consolidated Interim Financial Statements
(Expressed in Canadian dollars)
(Unaudited)
MAPLE LEAF FOODS INC.
Three and six months ended June 30, 2012 and 2011
Consolidated Balance Sheets
| As at June 30, | As at June 30, | As at December 31, | |||||||||||
| (In thousands of Canadian dollars) | 2012 | 2011 | 2011 | ||||||||||
| (Unaudited) | (Unaudited) | ||||||||||||
| ASSETS | |||||||||||||
| Current assets | |||||||||||||
| Cash and cash equivalents | $ | 83,631 | $ | - | $ | - | |||||||
| Accounts receivable | 108,014 | 102,499 | 133,504 | ||||||||||
| Notes receivable | 124,323 | 173,537 | 98,545 | ||||||||||
| Inventories | 319,722 | 286,704 | 293,231 | ||||||||||
| Biological assets | 53,259 | 44,881 | 49,265 | ||||||||||
| Income and other taxes recoverable | 45,831 | 41,130 | 43,789 | ||||||||||
| Prepaid expenses and other assets | 18,946 | 21,669 | 24,688 | ||||||||||
| Assets held for sale | 25,502 | - | - | ||||||||||
| $ | 779,228 | $ | 670,420 | $ | 643,022 | ||||||||
| Property and equipment | 1,090,473 | 1,050,192 | 1,067,246 | ||||||||||
| Investment property | 12,305 | 11,436 | 11,232 | ||||||||||
| Employee benefits | 119,002 | 169,126 | 133,942 | ||||||||||
| Other long-term assets | 11,244 | 12,745 | 11,926 | ||||||||||
| Deferred tax asset | 130,892 | 95,992 | 127,456 | ||||||||||
| Goodwill | 754,150 | 751,535 | 753,739 | ||||||||||
| Intangible assets | 203,821 | 174,983 | 191,896 | ||||||||||
| Total assets | $ | 3,101,115 | $ | 2,936,429 | $ | 2,940,459 | |||||||
| LIABILITIES AND EQUITY | |||||||||||||
| Current liabilities | |||||||||||||
| Bank indebtedness | $ | 15,209 | $ | 14,063 | $ | 36,404 | |||||||
| Accounts payable and accruals | 482,917 | 458,381 | 482,059 | ||||||||||
| Provisions | 31,942 | 51,484 | 44,255 | ||||||||||
| Current portion of long-term debt | 5,739 | 205,337 | 5,618 | ||||||||||
| Other current liabilities | 17,543 | 71,605 | 20,409 | ||||||||||
| $ | 553,350 | $ | 800,870 | $ | 588,745 | ||||||||
| Long-term debt | 1,122,186 | 746,202 | 941,956 | ||||||||||
| Employee benefits | 382,811 | 222,098 | 350,853 | ||||||||||
| Provisions | 28,963 | 26,337 | 28,936 | ||||||||||
| Other long-term liabilities | 77,459 | 96,379 | 88,153 | ||||||||||
| Deferred tax liability | 8,749 | 24,890 | 11,703 | ||||||||||
| Total liabilities | $ | 2,173,518 | $ | 1,916,776 | $ | 2,010,346 | |||||||
| Shareholders' equity | |||||||||||||
| Share capital | $ | 902,810 | $ | 902,810 | $ | 902,810 | |||||||
| Retained earnings (deficit) | (96,872) | 17,182 | (78,674) | ||||||||||
| Contributed surplus | 75,066 | 67,550 | 64,327 | ||||||||||
| Accumulated other comprehensive loss | (12,530) | (20,672) | (17,042) | ||||||||||
| Treasury stock | (6,347) | (10,078) | (6,347) | ||||||||||
| Total shareholders' equity | $ | 862,127 | $ | 956,792 | $ | 865,074 | |||||||
| Non-controlling interest | 65,470 | 62,861 | 65,039 | ||||||||||
| Total equity | $ | 927,597 | $ | 1,019,653 | $ | 930,113 | |||||||
| Total liabilities and equity | $ | 3,101,115 | $ | 2,936,429 | $ | 2,940,459 | |||||||
Consolidated Statements of Earnings
| (In thousands of Canadian dollars, except share amounts) | Three months ended June 30, | Six months ended June 30, | |||||||||||||
| (Unaudited) | 2012 | 2011 | 2012 | 2011 | |||||||||||
| Sales | $ | 1,260,250 | $ | 1,238,201 | $ | 2,421,073 | $ | 2,386,143 | |||||||
| Cost of goods sold | 1,060,504 | 1,038,693 | 2,050,386 | 2,005,381 | |||||||||||
| Gross margin | $ | 199,746 | $ | 199,508 | $ | 370,687 | $ | 380,762 | |||||||
| Selling, general and administrative expenses | 129,306 | 125,116 | 264,442 | 254,141 | |||||||||||
| Earnings before the following: | $ | 70,440 | $ | 74,392 | $ | 106,245 | $ | 126,621 | |||||||
| Restructuring and other related costs | (9,776) | (16,595) | (30,132) | (42,720) | |||||||||||
| Change in fair value of non-designated interest rate swaps | (220) | (5,623) | 4,933 | (958) | |||||||||||
| Other income (expense) | 3,417 | (77) | 3,301 | 78 | |||||||||||
| Earnings before interest and income taxes | $ | 63,861 | $ | 52,097 | $ | 84,347 | $ | 83,021 | |||||||
| Interest expense | 18,413 | 17,074 | 36,056 | 35,025 | |||||||||||
| Earnings before income taxes | $ | $ 45,448 | $ | 35,023 | $ | $ 48,291 | $ | 47,996 | |||||||
| Income taxes | 12,922 | 10,441 | 15,002 | 12,867 | |||||||||||
| Net earnings | $ | 32,526 | $ | 24,582 | $ | 33,289 | $ | 35,129 | |||||||
| Attributed to: | |||||||||||||||
| Common shareholders | $ | 29,849 | $ | 23,103 | $ | 30,528 | $ | 33,765 | |||||||
| Non-controlling interest | 2,677 | 1,479 | 2,761 | 1,364 | |||||||||||
| $ | 32,526 | $ | 24,582 | $ | 33,289 | $ | 35,129 | ||||||||
| Earnings per share attributable to common shareholders | |||||||||||||||
| Basic earnings per share | $ | 0.21 | $ | 0.17 | $ | 0.22 | $ | 0.24 | |||||||
| Diluted earnings per share | $ | 0.21 | $ | 0.16 | $ | 0.21 | $ | 0.24 | |||||||
| Weighted average number of shares (millions) | 139.5 | 139.2 | 139.5 | 139.2 | |||||||||||
Consolidated Statements of Comprehensive (Loss) Income
| (In thousands of Canadian dollars) | Three months ended June 30, | Six months ended June 30, | ||||||||||||||
| (Unaudited) | 2012 | 2011 | 2012 | 2011 | ||||||||||||
| Net earnings | $ | 32,526 | $ | 24,582 | $ | 33,289 | $ | 35,129 | ||||||||
| Other comprehensive (loss) income | ||||||||||||||||
| Change in accumulated foreign currency translation adjustment | 2,500 | 305 | 283 | (906) | ||||||||||||
| Change in unrealized gains and losses on cash flow hedges | 537 | (2,854) | 4,243 | 2,184 | ||||||||||||
| Change in actuarial gains and losses | (30,511) | - | (38,165) | - | ||||||||||||
| $ | (27,474) | $ | (2,549) | $ | (33,639) | $ | 1,278 | |||||||||
| Comprehensive (loss) income | $ | 5,052 | $ | 22,033 | $ | (350) | $ | 36,407 | ||||||||
| Attributed to: | ||||||||||||||||
| Common shareholders | $ | 2,345 | $ | 20,529 | $ | (2,713) | $ | 35,678 | ||||||||
| Non-controlling interest | 2,707 | 1,504 | 2,363 | 729 | ||||||||||||
Consolidated Statements of Changes in Total Equity
| Attributable to Common Shareholders | ||||||||||||||||||||||||||
| (In thousands of Canadian dollars) | Share capital |
Retained earnings |
Contributed surplus |
Total accumulated other comprehensive loss |
Treasury stock |
Non- controlling interest |
Total equity |
|||||||||||||||||||
| Balance at | ||||||||||||||||||||||||||
| December 31, 2011 | $ | 902,810 | $ | (78,674) | $ | 64,327 | $ | (17,042) | $ | (6,347) | $ | 65,039 | $ | 930,113 | ||||||||||||
| Net earnings | - | 30,528 | - | - | - | 2,761 | 33,289 | |||||||||||||||||||
| Other comprehensive (loss) income | - | (37,753) | - | 4,512 | - | (398) | (33,639) | |||||||||||||||||||
| Dividends declared ($0.08 per share) | - | (10,973) | - | - | - | (1,932) | (12,905) | |||||||||||||||||||
| Stock-based compensation expense | - | - | 10,739 | - | - | - | 10,739 | |||||||||||||||||||
| Balance at June 30, 2012 | $ | 902,810 | $ | (96,872) | $ | 75,066 | $ | (12,530) | $ | (6,347) | $ | 65,470 | $ | 927,597 | ||||||||||||
| Attributable to Common Shareholders | ||||||||||||||||||||||||||
| (In thousands of Canadian dollars) | Share capital |
Retained earnings |
Contributed surplus |
Total accumulated other comprehensive loss |
Treasury stock |
Non- controlling interest |
Total equity |
|||||||||||||||||||
| Balance at | ||||||||||||||||||||||||||
| December 31, 2010 | $ | 902,810 | $ | (5,267) | $ | 59,002 | $ | (22,585) | $ | (10,078) | $ | 62,890 | $ | 986,772 | ||||||||||||
| Net earnings | - | 33,765 | - | - | - | 1,364 | 35,129 | |||||||||||||||||||
| Other comprehensive income (loss) | - | - | - | 1,913 | - | (635) | 1,278 | |||||||||||||||||||
| Dividends declared ($0.08 per share) | - | (11,316) | - | - | - | (758) | (12,074) | |||||||||||||||||||
| Stock-based compensation expense | - | - | 8,548 | - | - | - | 8,548 | |||||||||||||||||||
| Balance at June 30, 2011 | $ | 902,810 | $ | 17,182 | $ | 67,550 | $ | (20,672) | $ | (10,078) | $ | 62,861 | $ | 1,019,653 | ||||||||||||
Consolidated Statements of Cash Flows
| (In thousands of Canadian dollars) | Three months ended June 30, | Six months ended June 30, | ||||||||||||||
| (Unaudited) | 2012 | 2011 | 2012 | 2011 | ||||||||||||
| CASH PROVIDED BY (USED IN): | ||||||||||||||||
| Operating activities | ||||||||||||||||
| Net earnings | $ | 32,526 | $ | 24,582 | $ | 33,289 | $ | 35,129 | ||||||||
| Add (deduct) items not affecting cash: | ||||||||||||||||
| Change in fair value of biological assets | 3,233 | 9,828 | 1,101 | 4,321 | ||||||||||||
| Depreciation and amortization | 33,180 | 32,398 | 64,569 | 65,266 | ||||||||||||
| Stock-based compensation | 5,303 | 4,271 | 10,739 | 8,548 | ||||||||||||
| Deferred income taxes | 3,637 | 2,129 | 3,863 | 3,269 | ||||||||||||
| Income tax current | 9,285 | 8,312 | 11,139 | 9,598 | ||||||||||||
| Interest expense | 18,413 | 17,074 | 36,056 | 35,025 | ||||||||||||
| (Gain) loss on sale of property and equipment | (433) | 142 | (413) | 118 | ||||||||||||
| Gain on disposal of assets held for sale | (320) | - | (320) | - | ||||||||||||
| Change in fair value of non-designated interest rate swaps |
220 | 5,623 | (4,933) | 958 | ||||||||||||
| Change in fair value of derivative financial instruments | (326) | (6,295) | 5,623 | (1,922) | ||||||||||||
| (Increase) decrease in pension asset | (4,298) | (648) | (4,475) | 1,808 | ||||||||||||
| Net income taxes paid | (3,920) | (8,296) | (9,519) | (18,294) | ||||||||||||
| Interest paid | (18,585) | (20,484) | (35,378) | (23,848) | ||||||||||||
| Change in provision for restructuring and other related costs | 1,141 | 7,415 | 6,584 | 28,067 | ||||||||||||
| Other | (874) | 387 | (1,822) | (1,820) | ||||||||||||
| Change in non-cash operating working capital | 27,299 | (47,642) | (35,571) | (109,730) | ||||||||||||
| Cash provided by operating activities | $ | 105,481 | $ | 28,796 | $ | 80,532 | $ | 36,493 | ||||||||
| Financing activities | ||||||||||||||||
| Dividends paid | $ | (5,393) | $ | (5,722) | $ | (10,973) | $ | (11,316) | ||||||||
| Dividends paid to non-controlling interest | (661) | (152) | (1,169) | (402) | ||||||||||||
| Net increase in long-term debt | 30,000 | 9,960 | 180,000 | 87,765 | ||||||||||||
| Increase in financing costs | - | (3,986) | - | (6,124) | ||||||||||||
| Other | (321) | (750) | (783) | (749) | ||||||||||||
| Cash provided by (used in) financing activities | $ | 23,625 | $ | (650) | $ | 167,075 | $ | 69,174 | ||||||||
| Investing activities | ||||||||||||||||
| Additions to long term-assets | $ | (63,633) | $ | (57,920) | $ | (119,439) | $ | (108,255) | ||||||||
| Capitalization of interest expense | (1,307) | (1,960) | (2,521) | (3,337) | ||||||||||||
| Acquisition of business | - | - | (31,130) | - | ||||||||||||
| Proceeds from sale of long-term assets | 2,203 | 2,238 | 4,749 | 7,675 | ||||||||||||
| Proceeds from disposal of assets held for sale | 5,557 | - | 5,557 | - | ||||||||||||
| Other | 3 | (503) | 3 | 45 | ||||||||||||
| Cash used in investing activities | $ | (57,177) | $ | (58,145) | $ | (142,781) | $ | (103,872) | ||||||||
| Increase (decrease) in cash and cash equivalents | $ | 71,929 | $ | (29,999) | $ | 104,826 | $ | 1,795 | ||||||||
| Net cash and cash equivalents, beginning of period | (3,507) | 15,936 | (36,404) | (15,858) | ||||||||||||
| Net cash and cash equivalents, end of period | $ | 68,422 | $ | (14,063) | $ | 68,422 | $ | (14,063) | ||||||||
| Net cash and cash equivalents is comprised of: | ||||||||||||||||
| Cash and cash equivalents | $ | 83,631 | $ | - | $ | 83,631 | $ | - | ||||||||
| Bank indebtedness | (15,209) | (14,063) | (15,209) | (14,063) | ||||||||||||
| Net cash and cash equivalents, end of period | $ | 68,422 | $ | (14,063) | $ | 68,422 | $ | (14,063) | ||||||||
Segmented Financial Information
| Three months ended June 30, | Six months ended June 30, | ||||||||||||
| 2012 | 2011 | 2012 | 2011 | ||||||||||
| Sales | |||||||||||||
| Meat Products Group | $ | 775,971 | $ | 762,212 | $ | 1,501,508 | $ | 1,480,453 | |||||
| Agribusiness Group | 79,543 | 70,918 | 144,840 | 128,211 | |||||||||
| Bakery Products Group | 404,736 | 405,071 | 774,725 | 777,479 | |||||||||
| $ | 1,260,250 | $ | 1,238,201 | $ | 2,421,073 | $ | 2,386,143 | ||||||
| Earnings before restructuring and other related costs and other income |
|||||||||||||
| Meat Products Group | $ | 22,229 | $ | 21,102 | $ | 44,303 | $ | 47,749 | |||||
| Agribusiness Group | 19,065 | 27,706 | 38,156 | 41,711 | |||||||||
| Bakery Products Group | 32,150 | 29,884 | 35,415 | 42,071 | |||||||||
| Non-allocated costs | (3,004) | (4,300) | (11,629) | (4,910) | |||||||||
| $ | 70,440 | $ | 74,392 | $ | 106,245 | $ | 126,621 | ||||||
| Capital expenditures | |||||||||||||
| Meat Products Group | $ | 46,159 | $ | 18,232 | $ | 85,131 | $ | 32,650 | |||||
| Agribusiness Group | 2,614 | 2,529 | 5,694 | 5,162 | |||||||||
| Bakery Products Group | 14,860 | 37,159 | 28,614 | 70,443 | |||||||||
| $ | 63,633 | $ | 57,920 | $ | 119,439 | $ | 108,255 | ||||||
| Depreciation and amortization | |||||||||||||
| Meat Products Group | $ | 15,151 | $ | 15,814 | $ | 29,917 | $ | 31,632 | |||||
| Agribusiness Group | 3,983 | 3,908 | 7,926 | 7,848 | |||||||||
| Bakery Products Group | 14,046 | 12,676 | 26,726 | 25,786 | |||||||||
| $ | 33,180 | $ | 32,398 | $ | 64,569 | $ | 65,266 | ||||||
| As at June 30, | As at June 30, | As at December 31, | ||||||||
| 2012 | 2011 | 2011 | ||||||||
| Total assets | ||||||||||
| Meat Products Group | $ | 1,548,254 | $ | 1,530,055 | $ | 1,465,576 | ||||
| Agribusiness Group | 222,849 | 250,125 | 223,013 | |||||||
| Bakery Products Group | 991,870 | 903,669 | 937,292 | |||||||
| Non-allocated assets | 338,142 | 252,580 | 314,578 | |||||||
| $ | 3,101,115 | $ | 2,936,429 | $ | 2,940,459 | |||||
| Goodwill | ||||||||||
| Meat Products Group | $ | 442,726 | $ | 442,336 | $ | 442,336 | ||||
| Agribusiness Group | 13,845 | 13,939 | 13,845 | |||||||
| Bakery Products Group | 297,579 | 295,260 | 297,558 | |||||||
| $ | 754,150 | $ | 751,535 | $ | 753,739 | |||||
SOURCE: Maple Leaf Foods Inc.
Investor Contact: Nick Boland,
VP Investor Relations: 416-926-2005
Media Contact: 416-926-2020
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