Maple Leaf Foods Reports Results for Third Quarter 2010
TORONTO, Oct. 28 /CNW/ - Maple Leaf Foods Inc. (TSX: MFI) today reported its financial results for the third quarter ended September 30, 2010.
- Sales were consistent with last year at $1.3 billion
- Adjusted Operating Earnings increased 2% to $64.5 million from
$63.0 million last year
- Adjusted EPS increased 10% to $0.23 compared to $0.21 last year
- Net loss in the quarter, which included $48.1 million of non-cash
pre-tax adjustments, was $16.1 million compared to net earnings of
$22.5 million last year
Note: Adjusted Operating Earnings measures are defined as earnings from operations before restructuring and other related costs, other income and the impact of the change in fair value of interest rate swaps. Adjusted Earnings per Share ("Adjusted EPS") measures are defined as basic earnings per share adjusted for the impact of restructuring and other related costs and the impact of the change in fair value of interest rate swaps, net of tax and non-controlling interest. Refer to the section entitled Non-GAAP Financial Measures at the end of this news release.
"The rapid rise in raw material costs in both grains and meat proteins, is the story for 2010," said Michael H. McCain, President and CEO. "Notwithstanding this significant inflation, we realized our sixth consecutive quarter of earnings growth, continued margin expansion in the protein segment, and double digit earnings per share improvement over last year. This steady progress reflects our focus on near-term value creation and implementing initiatives across our businesses to increase margins and growth that are expected to deliver significant return to shareholders now and through 2015."
Financial Overview
------------------
Third quarter sales of $1,293.2 million were consistent with last year. Excluding currency impacts related to the U.K. and U.S. bakery operations and fresh pork sales, sales increased by 2%. Adjusted Operating Earnings increased 2% to $64.5 million compared to $63.0 million last year. Improved results in the Meat Group, supported by better performance in fresh pork and poultry, were partly offset by lower earnings in the Bakery Products Group, mostly due to lower volume and increased investment to support product launches, advertising and promotions.
Net loss, including a non-cash pre-tax charge of $14.6 million due to the change in fair value of long-term interest rate swaps not designated in a formal hedging relationship and $50.0 million in restructuring costs (including $33.5 million of non-cash charges), was $16.1 million in the third quarter of 2010 compared to net earnings of $22.5 million last year. Year-to-date net loss was $4.4 million compared to net earnings of $30.2 million last year.
Business Segment Review
-----------------------
Following is a summary of sales by business segment:
-------------------------------------------------------------------------
Third Quarter Year-to-Date
------------------------------------------------
($ millions) 2010 2009 2010 2009
-------------------------------------------------------------------------
Meat Products Group $834,655 $815,610 $2,418,570 $2,468,218
Agribusiness Group 47,468 55,813 143,333 155,378
-------------------------------------------------------------------------
Protein Group $882,123 $871,423 $2,561,903 $2,623,596
Bakery Products Group 411,088 425,174 1,194,181 1,273,103
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Sales $1,293,211 $1,296,597 $3,756,084 $3,896,699
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Following is a summary of Adjusted Operating Earnings by business segment:
Third Quarter Year-to-date
-------------------------------------------------------------------------
($ thousands) 2010 2009 2010 2009
-------------------------------------------------------------------------
Meat Products Group $21,532 $18,111 $50,188 $31,144
Agribusiness Group 15,804 15,062 36,102 33,518
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Protein Group $37,336 $33,173 $86,290 $64,662
Bakery Products Group 27,928 32,749 70,911 80,259
Non-allocated Costs(i) (801) (2,891) (6,609) (6,650)
-------------------------------------------------------------------------
Adjusted Operating
Earnings $64,463 $63,031 $150,592 $138,271
-------------------------------------------------------------------------
(i) Non-allocated costs comprise costs related to systems conversion and
consulting fees. Management believes that not allocating these costs
provides a more comparable assessment of segmented operating results.
Meat Products Group
-------------------
Includes value-added prepared meats, chilled meal entrees and 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(R), Schneiders(R) and many leading sub-brands.
Sales for the third quarter increased 2% to $834.7 million from $815.6 million in the third quarter last year. Excluding the impact of a stronger Canadian dollar that reduced the value of fresh pork sales, sales increased by 4%. Improved pork markets, higher net pricing in prepared meats and improved sales mix contributed to increased sales. These benefits were partly offset by reduced volumes in fresh pork and prepared meats as consumers continue to adjust to new price points.
Adjusted Operating Earnings in the Meat Products Group increased to $21.5 million compared to $18.1 million last year, reflecting higher market prices for fresh chicken and pork and improved operational efficiencies in the Company's poultry operations. While margins in the prepared meats business benefited from improved net pricing and early operational benefits of product simplification, profitability in the business was impacted by lower volumes as consumers adjust to new price points. Margins continue to be pressured by further increases in raw material meat costs that resulted in continued focus on price adjustments during the quarter.
Management is focused on implementing near-term initiatives to increase margins in the prepared meats business as part of its recently announced value creation plan. In order to streamline product mix, significant changes are being implemented to standardize ingredient formulations, product sizes and specifications across all categories. These initiatives will be completed during 2011, reducing complexity for customers and improving operating efficiencies.
Agribusiness Group
------------------
Consists of Canadian hog production and animal by-product recycling operations.
Agribusiness Group sales declined 15% to $47.5 million from $55.8 million in the third quarter last year due to lower sales values and volumes in the rendering operations.
Adjusted Operating Earnings for the Agribusiness Group increased to $15.8 million from $15.1 million in the third quarter last year. Earnings from hog production operations improved due to higher hog market prices and lower feed costs. Stronger performance in hog production was partially offset by lower earnings in the by-product recycling business compared to last year due to lower by-product sales values and volumes.
Bakery Products Group
---------------------
Includes fresh and frozen bakery products, including breads, rolls, bagels, specialty and artisan breads, sweet goods, prepared sandwiches, and fresh pasta and sauces sold to retail, foodservice and convenience channels. It includes national brands such as Dempster's(R), Tenderflake(R), Olivieri(R) and New York Bakery Co(R), and many leading regional brands.
Third quarter sales in the Bakery Products Group declined 3% from $425.2 million last year to $411.1 million this year, primarily due to currency translation impacts and lower volumes. Excluding currency impacts on the translation of bakery sales in the U.S. and U.K., sales declined by 1%.
Third quarter Adjusted Operating Earnings in the Bakery Products Group declined from a strong comparative quarter of $32.7 million to $27.9 million this year. Lower volumes and increased investment in marketing and promotional activities in the fresh bakery business impacted earnings. Brand investment included advertising and promotional expenses to support Dempster's Smart(R) 16, a line extension of Dempster's Smart(R), which includes 16 whole grains and reduced sodium; support for the launch of Dempster's(R) rye bread line in Ontario; and extensions in Dempster's Oven Fresh(R). In the fourth quarter, the fresh bakery business launched a significant promotional bread campaign with hockey superstar Sidney Crosby as the brand ambassador of Dempster's(R) to promote the benefits of breads, healthy eating and good nutrition.
Management continues to focus on increasing volumes in the North American frozen business while driving cost improvements in baked goods production in the U.K. Cost improvements underway in the U.K. include the transfer of a production line to an existing low-cost scale facility in Maidstone, England in the second quarter that consolidates the majority of croissant production into one site.
The construction of a new large scale fresh bakery facility in Hamilton, Ontario is proceeding on plan. Commissioning of this 375,000 square foot facility is scheduled to commence in mid 2011, allowing for the consolidation of production from three Ontario bakeries. The Company expects to incur restructuring charges totalling approximately $25 million, which includes $5 million in non-cash items.
Other Matters
-------------
On October 27, 2010, Maple Leaf Foods Inc. declared a dividend of $0.04 per share payable on December 31, 2010 to shareholders of record at the close of business on December 6, 2010. Unless indicated otherwise by the Company in writing at or before the time the dividend is paid, these dividends will not be considered an eligible dividend for the purposes of the "Enhanced Dividend Tax Credit System".
It is currently anticipated that none of the dividends the Company will pay in 2010 will be considered an eligible dividend for the purposes of the "Enhanced Dividend Tax Credit System".
An investor presentation related to the Company's third quarter financial results is available at www.mapleleaf.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 October 28, 2010 to review Maple Leaf Foods' third quarter financial results. To participate in the call, please dial 416-340-2216 or 866-226-1792. For those unable to participate, playback will be made available an hour after the event at 416-695-5800/800-408-3053 (Passcode 8236200 followed by the number sign).
A webcast presentation of the third quarter financial results will also be available at http://investor.mapleleaf.ca via a link: http://www.bellwebcasting.ca/audience/index.asp?eventid=20810663
The Company's full financial statements and related Management's Discussion and Analysis are available for download on the Company's website.
Forward-Looking Statements
--------------------------
This document contains, and the Company's oral and written public communications often contain, forward-looking statements that 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, expectations, anticipations, estimates and intentions. Specific statements include, but are not limited to, statements with respect to expectations concerning improving trends in operational results and expectations regarding actions to reduce costs, improved efficiencies, restore volumes and/or increase prices. 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 statements. These statements are not guarantees of future performance and involve assumptions and risks and uncertainties that are difficult to predict.
In addition, expectations concerning 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, United States, United Kingdom and Japanese economies; the rate of exchange of the Canadian dollar to the U.S. dollar, British pound and Japanese yen; expectations regarding actions to reduce costs, restore volumes and/or increase prices; 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 protein business transformation or otherwise; continued access to capital; the cost of compliance with environmental and health standards; no adverse results from ongoing litigation that would not be covered by insurance; no unexpected actions of domestic and foreign governments and the general assumption that none of the risks identified under "Risk Factors" in the Company's Annual Management's Discussion and Analysis for the year ended December 31, 2009 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 statements, 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 statements are discussed more fully in the Company's Annual Management's Discussion and Analysis for the year ended December 31, 2009 including the section entitled "Risk Factors" that is available on SEDAR at www.sedar.com. The Company does not intend to, and the Company disclaims any obligation to, update any forward-looking statements, 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. is a leading food processing company, headquartered in Toronto, Canada. The Company employs approximately 23,500 people at its operations across Canada and in the United States, the United Kingdom, and Asia. The Company had sales of $5.2 billion in 2009.
Non-GAAP Financial Measures
---------------------------
The Company uses the following non-GAAP measures: Adjusted Operating Earnings, Adjusted EPS, EBITDA and Net Debt. Management believes that these non-GAAP measures provide useful information to both Management and investors in measuring the financial performance of the Company for the reasons outlined below. These measures do not have a standardized meaning prescribed by Canadian GAAP and therefore they may not be comparable to similarly titled measures presented by other publicly traded companies and should not be construed as an alternative to other financial measures determined in accordance with Canadian GAAP.
Adjusted Operating Earnings
The following table reconciles earnings from operations before restructuring and other related costs, other income (expense) and the impact of the change in fair value of non-designated interest rate swaps to net earnings as reported under Canadian GAAP in the unaudited interim period consolidated statements of earnings for the three-month and nine-month periods ended as indicated below. Management believes that this is the most appropriate basis on which to evaluate operating results, as restructuring and other related costs, other income (expense) and the change in fair value of non-designated interest rate swaps are not representative of operational results.
Three months ended September 30,
-------------------------------------------------------------------------
($ thousands) 2010
-------------------------------------------------------------------------
Meat Agri- Bakery Unallocated Consol-
Products business Products costs idated
Group Group Group
Net earnings ($16,078)
Non-controlling interest 1,423
Income taxes (2,258)
-------------------------------------------------------------------------
Earnings from operations
before income taxes (16,913)
Interest expense 16,757
Change in the fair value
of non-designated
interest rate swaps 14,582
-------------------------------------------------------------------------
Earnings from operations
before income taxes,
interest expense and
changes in the fair
value of non-
designated interest
rate swaps (18,041) 15,785 17,483 (801) 14,426
Restructuring and other
related costs 39,405 70 10,512 3 49,990
Other income 168 (51) (67) (3) 47
-------------------------------------------------------------------------
Adjusted Operating
Earnings $21,532 $15,804 $27,928 ($801) $64,463
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Three months ended September 30,
-------------------------------------------------------------------------
($ thousands) 2009
-------------------------------------------------------------------------
Meat Agri- Bakery Unallocated Consol-
Products business Products costs idated
Group Group Group
Net earnings $22,457
Non-controlling interest 2,537
Income taxes 10,466
-------------------------------------------------------------------------
Earnings from operations
before income taxes 35,460
Interest expense 19,755
Change in the fair value
of non-designated
interest rate swaps -
-------------------------------------------------------------------------
Earnings from operations
before income taxes,
interest expense and
changes in the fair
value of non-
designated interest
rate swaps 12,864 15,044 32,039 (4,732) 55,215
Restructuring and other
related costs 5,046 114 597 1,810 7,567
Other income 201 (96) 113 31 249
-------------------------------------------------------------------------
Adjusted Operating
Earnings $18,111 $15,062 $32,749 ($2,891) $63,031
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Nine months ended September 30,
-------------------------------------------------------------------------
($ thousands) 2010
-------------------------------------------------------------------------
Meat Agri- Bakery Unallocated Consol-
Products business Products costs idated
Group Group Group
Net earnings ($4,357)
Non-controlling interest 4,829
Income taxes 4,371
-------------------------------------------------------------------------
Earnings from operations
before income taxes 4,843
Interest expense 49,497
Change in the fair value
of non-designated
interest rate swaps 35,330
-------------------------------------------------------------------------
Earnings from operations
before income taxes,
interest expense and
changes in the fair
value of non-
designated interest
rate swaps 4,838 35,278 58,084 (8,530) 89,670
Restructuring and other
related costs 46,490 (62) 13,021 1,957 61,406
Other income (1,140) 886 (194) (36) (484)
-------------------------------------------------------------------------
Adjusted Operating
Earnings $50,188 $36,102 $70,911 ($6,609) $150,592
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Nine months ended September 30,
-------------------------------------------------------------------------
($ thousands) 2009
-------------------------------------------------------------------------
Meat Agri- Bakery Unallocated Consol-
Products business Products costs idated
Group Group Group
Net earnings $30,227
Non-controlling interest 6,403
Income taxes 16,245
-------------------------------------------------------------------------
Earnings from operations
before income taxes 52,875
Interest expense 61,862
Change in the fair value
of non-designated
interest rate swaps -
-------------------------------------------------------------------------
Earnings from operations
before income taxes,
interest expense and
changes in the fair
value of non-
designated interest
rate swaps 9,312 32,177 81,130 (7,882) 114,737
Restructuring and other
related costs 21,601 2,071 1,271 1,810 26,753
Other income 231 (730) (2,142) (578) (3,219)
-------------------------------------------------------------------------
Adjusted Operating
Earnings $31,144 $33,518 $80,259 ($6,650) $138,271
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Adjusted Earnings per Share
The following table reconciles Adjusted Earnings per Share to basic earnings per share as reported under Canadian GAAP in the unaudited interim period consolidated statements of earnings for the three- and nine-month periods ended as indicated below. Management believes this is the most appropriate basis on which to evaluate financial results as restructuring and other related costs and the change in the fair value of non-designated interest rate swaps are not representative of operational results.
-------------------------------------------------------------------------
($ per share) Three months ended Nine months ended
September 30, September 30,
-------------------------------------------------------------------------
2010 2009 2010 2009
-------------------------------------------------------------------------
Basic Earnings per Share $(0.12) $0.17 $(0.03) $0.24
-------------------------------------------------------------------------
Restructuring and other
related costs(i) 0.27 0.04 0.33 0.15
-------------------------------------------------------------------------
Change in the fair value of
non-designated interest
rate swaps(ii) 0.08 - 0.18 -
-------------------------------------------------------------------------
Adjusted Earnings per Share(iii) $0.23 $0.21 $0.49 $0.39
-------------------------------------------------------------------------
(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, net of tax. Management believes
that it is appropriate to remove the impacts of these fair value
adjustments when discussing the underlying operations of the
business, as it provides shareholders with a more accurate
representation of the underlying results of the business.
(iii)Does not add due to rounding.
Consolidated Interim Financial Statements
(Expressed in Canadian dollars)
MAPLE LEAF FOODS INC.
Nine months ended September 30, 2010 and 2009
MAPLE LEAF FOODS INC.
Consolidated Balance Sheets
(In thousands of Canadian dollars)
-------------------------------------------------------------------------
As at As at As at
September 30, September 30, December 31,
2010 2009 2009
-------------------------------------------------------------------------
(Unaudited) (Unaudited)
ASSETS
Current assets
Cash and cash equivalents $ 10,303 $ 88,790 $ 29,316
Accounts receivable 164,740 207,207 189,221
Inventories 343,678 354,460 331,781
Income and other taxes
recoverable 20,641 17,081 18,067
Future tax asset 8,737 28,294 4,301
Prepaid expenses and other
assets 17,403 26,116 15,328
Assets held for sale 24,086 28,928 29,224
-----------------------------------------------------------------------
$ 589,588 $ 750,876 $ 617,238
Property and equipment 1,106,080 1,101,327 1,099,220
Other long-term assets 336,642 333,175 328,063
Future tax asset 57,761 25,557 22,116
Goodwill 853,652 867,941 857,278
Other intangible assets 96,160 99,810 97,713
Assets held for sale 1,835 36,742 35,836
-------------------------------------------------------------------------
$ 3,041,718 $ 3,215,428 $ 3,057,464
-------------------------------------------------------------------------
-------------------------------------------------------------------------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Bank indebtedness $ 8,070 $ 4,357 $ 4,247
Accounts payable and accrued
charges 513,413 520,542 477,071
Current portion of long-term
debt 385,377 363,546 206,147
Other current liabilities 10,692 45,101 37,837
Liabilities held for sale 10,230 12,210 12,111
-----------------------------------------------------------------------
$ 927,782 $ 945,756 $ 737,413
Long-term debt 569,338 786,744 834,557
Future tax liability 49,064 45,592 27,851
Other long-term liabilities 234,116 182,127 187,523
Non-controlling interest 83,621 79,752 81,070
Shareholders' equity 1,177,797 1,175,457 1,189,050
-------------------------------------------------------------------------
$ 3,041,718 $ 3,215,428 $ 3,057,464
-------------------------------------------------------------------------
-------------------------------------------------------------------------
MAPLE LEAF FOODS INC.
Consolidated Statements of Earnings
(In thousands of Canadian dollars, except share amounts)
-------------------------------------------------------------------------
Three months ended Nine months ended
September 30, September 30,
(Unaudited) 2010 2009 2010 2009
-------------------------------------------------------------------------
Sales $1,293,211 $1,296,597 $3,756,084 $3,896,699
Cost of goods sold 1,103,115 1,103,724 3,224,348 3,368,411
-------------------------------------------------------------------------
Gross margin $ 190,096 $ 192,873 $ 531,736 $ 528,288
Selling, general and
administrative expenses 125,633 129,842 381,144 390,017
-------------------------------------------------------------------------
Earnings from operations
before the following: $ 64,463 $ 63,031 $ 150,592 $ 138,271
Restructuring and
other related costs (49,990) (7,567) (61,406) (26,753)
Change in fair value
of non-designated
interest rate swaps (14,582) - (35,330) -
Other income (expense) (47) (249) 484 3,219
-------------------------------------------------------------------------
Earnings (loss) from
operations before
interest and income
taxes $ (156) $ 55,215 $ 54,340 $ 114,737
Interest expense 16,757 19,755 49,497 61,862
-------------------------------------------------------------------------
Earnings (loss) from
operations before
income taxes $ (16,913) $ 35,460 $ 4,843 $ 52,875
Income taxes (2,258) 10,466 4,371 16,245
-------------------------------------------------------------------------
Earnings (loss) from
operations before
non-controlling interest $ (14,655) $ 24,994 $ 472 $ 36,630
Non-controlling interest 1,423 2,537 4,829 6,403
-------------------------------------------------------------------------
Net earnings (loss) $ (16,078) $ 22,457 $ (4,357) $ 30,227
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Basic earnings (loss)
per share $ (0.12) $ 0.17 $ (0.03) $ 0.24
Diluted earnings (loss)
per share $ (0.12) $ 0.17 $ (0.03) $ 0.23
-------------------------------------------------------------------------
Weighted average number
of shares (millions) 135.5 131.0 135.2 128.2
-------------------------------------------------------------------------
MAPLE LEAF FOODS INC.
Consolidated Statements of Comprehensive Income (Loss)
(In thousands of Canadian dollars)
-------------------------------------------------------------------------
Three months ended Nine months ended
September 30, September 30,
(Unaudited) 2010 2009 2010 2009
-------------------------------------------------------------------------
Net earnings (loss) $ (16,078) $ 22,457 $ (4,357) $ 30,227
Other comprehensive
income (loss)
Change in accumulated
foreign currency
translation adjustment (4,779) (15,009) (10,018) (7,829)
Change in unrealized
derivative loss on
cash flow hedges 1,100 1,353 3,265 14,174
-------------------------------------------------------------------------
$ (3,679) $ (13,656) $ (6,753) $ 6,345
-------------------------------------------------------------------------
Comprehensive income
(loss) $ (19,757) $ 8,801 $ (11,110) $ 36,572
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Consolidated Statements of Retained Earnings
(In thousands of Canadian dollars)
-------------------------------------------------------------------------
Nine months ended
September 30,
(Unaudited) 2010 2009
-------------------------------------------------------------------------
Retained earnings, beginning of period $ 344,839 $ 314,649
Net earnings (loss) (4,357) 30,227
Adoption of new accounting standard - (207)
Dividends declared ($0.12 per share;
2009: $0.12 per share) (16,243) (15,504)
Premium on shares issued from Restricted
Share Unit Trust (2,665) -
-------------------------------------------------------------------------
Retained earnings, end of period $ 321,574 $ 329,165
-------------------------------------------------------------------------
-------------------------------------------------------------------------
MAPLE LEAF FOODS INC.
Consolidated Statements of Cash Flows
(In thousands of Canadian dollars)
-------------------------------------------------------------------------
Three months ended Nine months ended
September 30, September 30,
(Unaudited) 2010 2009 2010 2009
-------------------------------------------------------------------------
CASH PROVIDED BY (USED IN):
Operating activities
Net earnings $ (16,078) $ 22,457 $ (4,357) $ 30,227
Add (deduct) items not
affecting cash:
Depreciation and
amortization 34,356 36,637 108,154 113,915
Stock-based compensation 4,440 4,551 13,321 13,664
Non-controlling interest 1,423 2,537 4,829 6,403
Future income taxes (10,635) (9,541) (20,333) (12,385)
Loss (gain) on sale of
property and equipment 83 313 (1,015) 477
Gain on sale of
investments - - - (501)
Amortization of
terminated interest
rate swap 503 502 1,508 1,603
Change in fair value
of non-designated
interest rate swaps 14,582 - 35,330 -
Change in fair value
of derivative
financial instruments 3,382 (2,028) 1,180 (12,270)
Decrease in net pension
asset 1,087 20 1,293 1,119
Change in provision for
restructuring and other
related costs 43,678 2,946 47,903 15,850
Other (2,096) (3,843) (821) (9,170)
Change in non-cash
operating working
capital 42,955 2,464 34,732 (140,234)
-------------------------------------------------------------------------
Cash provided by
operating activities $ 117,680 $ 57,015 $ 221,724 $ 8,698
-------------------------------------------------------------------------
Financing activities
Dividends paid $ (5,432) $ (5,374) $ (16,243) $ (15,504)
Dividends paid to non-
controlling interest (156) (155) (598) (516)
Net decrease in
long-term debt (81,770) (132,682) (108,379) (165,877)
Increase in share capital 3,234 - 3,274 -
Purchase of treasury stock - (3,190) (496) (3,190)
Increase in deferred
financing costs (63) - (1,757) -
Other 971 78 (281) 2,806
-------------------------------------------------------------------------
Cash used in financing
activities $ (83,216) $ (141,323) $ (124,480) $ (182,281)
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Investing activities
Additions to property
and equipment $ (49,073) $ (29,705) $ (119,937) $ (123,392)
Proceeds from sale of
property and equipment 56 179 2,545 23,572
Proceeds from sale of
investments - - - 1,540
Purchase of Canada Bread
Shares - - (2,690) -
Other 85 (17) 2 (328)
-------------------------------------------------------------------------
Cash used in investing
activities $ (48,932) $ (29,543) $ (120,080) $ (98,608)
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Decrease in cash and
cash equivalents $ (14,468) $ (113,851) $ (22,836) $ (272,191)
Net cash and cash
equivalents, beginning
of period 16,701 198,284 25,069 356,624
-------------------------------------------------------------------------
Net cash and cash
equivalents, end of
period $ 2,233 $ 84,433 $ 2,233 $ 84,433
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Net cash and cash
equivalents is
comprised of:
Cash and cash
equivalents $ 10,303 $ 88,790 $ 10,303 $ 88,790
Bank indebtedness (8,070) (4,357) (8,070) (4,357)
-------------------------------------------------------------------------
Net cash and cash
equivalents, end of
period $ 2,233 $ 84,433 $ 2,233 $ 84,433
-------------------------------------------------------------------------
-------------------------------------------------------------------------
MAPLE LEAF FOODS INC.
Segmented Financial Information
(In thousands of Canadian dollars)
-------------------------------------------------------------------------
Three months ended Nine months ended
September 30, September 30,
(Unaudited) 2010 2009 2010 2009
-------------------------------------------------------------------------
Sales
Meat Products Group $ 834,655 $ 815,610 $2,418,570 $2,468,218
Agribusiness Group 47,468 55,813 143,333 155,378
Bakery Products Group 411,088 425,174 1,194,181 1,273,103
-------------------------------------------------------------------------
$1,293,211 $1,296,597 $3,756,084 $3,896,699
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Earnings from operations
before restructuring and
other related costs,
change in fair value of
non-designated interest
rate swaps and other
income (expense)
Meat Products Group $ 21,532 $ 18,111 $ 50,188 $ 31,144
Agribusiness Group 15,804 15,062 36,102 33,518
Bakery Products Group 27,928 32,749 70,911 80,259
Non-allocated costs (801) (2,891) (6,609) (6,650)
-------------------------------------------------------------------------
$ 64,463 $ 63,031 $ 150,592 $ 138,271
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Capital expenditures
Meat Products Group $ 16,676 $ 17,278 $ 49,366 $ 69,238
Agribusiness Group 3,554 3,110 13,267 8,299
Bakery Products Group 28,843 9,317 57,304 45,855
-------------------------------------------------------------------------
$ 49,073 $ 29,705 $ 119,937 $ 123,392
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Depreciation and
amortization
Meat Products Group $ 16,693 $ 18,542 $ 55,480 $ 58,151
Agribusiness Group 4,025 4,004 12,349 12,077
Bakery Products Group 13,638 14,091 40,325 43,687
-------------------------------------------------------------------------
$ 34,356 $ 36,637 $ 108,154 $ 113,915
-------------------------------------------------------------------------
-------------------------------------------------------------------------
-------------------------------------------------------------------------
As at As at As at
September September December
30, 2010 30, 2009 31, 2009
-------------------------------------------------------------------------
(Unaudited) (Unaudited)
Total assets
Meat Products Group $1,643,340 $1,701,854 $1,653,389
Agribusiness Group 275,160 285,499 287,057
Bakery Products Group 957,911 977,113 955,469
Non-allocated assets 165,307 250,962 161,549
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$3,041,718 $3,215,428 $3,057,464
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Goodwill
Meat Products Group $ 442,124 $ 450,004 $ 442,943
Agribusiness Group 14,142 14,136 14,136
Bakery Products Group 397,386 403,801 400,199
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$ 853,652 $ 867,941 $ 857,278
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For further information: Lynda Kuhn, SVP Communications, 416-926-2026, www.mapleleaf.com
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