Results for the fourth quarter and for fiscal 2009 - Lassonde Industries Inc.
announces its results for the fourth quarter and for fiscal 2009
ROUGEMONT, QC, March 31 /CNW Telbec/ - Lassonde Industries Inc. (TSX - LAS.A) is pleased to report an increase in net sales and net earnings for the fiscal year ended December 31, 2009.
The financial highlights are as follows:
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Financial highlights
(in thousands of dollars
except basic and diluted Fourth quarters ended Fiscal years ended
earnings per share) December 31 December 31
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2009 2008 2009 2008
(unaudited) (unaudited) (audited) (audited)
(1) (1)
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Net sales $139,412 $133,199 $524,179 $505,500
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Operating income 15,466 11,065 47,416 42,169
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Earnings before income
taxes 14,206 10,320 43,392 39,769
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Net earnings 10,233 7,658 30,600 29,250
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Basic and diluted earnings
per share 1.55 1.15 4.62 4.39
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Total assets 345,220 312,224 345,220 312,224
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Cash flows from (used by)
operating activities 6,494 (3,559) 47,270 31,873
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Shareholders' equity $182,018 $171,317 $182,018 $171,317
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Shareholders' equity to
total assets 52.7% 54.9% 52.7% 54.9%
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Note to the financial highlights: These are financial highlights only.
Management's Discussion and Analysis, the audited consolidated financial
statements and notes thereto of Lassonde Industries Inc. for the year
ended December 31, 2009 will be available on the SEDAR website at
www.sedar.com and on the website of Lassonde Industries Inc.
(1) The comparative figures for the fourth quarter of last fiscal year
and for last fiscal year have been restated to reflect a new
accounting standard on goodwill and intangible assets that was
applied as of January 1, 2009. This new standard has been applied
retroactively with restatement of the prior period consolidated
financial statements. Under this standard, the Company now accounts
for acquisitions of deferred charges directly as a reduction to
sales. Previously, these deferred charges were recorded at cost and
amortized over periods ranging from 12 to 24 months. The amortization
was applied against sales.
"Despite the volatile economic conditions prevailing this past year, we successfully achieved most of our 2009 business objectives, demonstrating the soundness of our prudent management approach," said Mr. Pierre-Paul Lassonde, Chairman of the Board and Chief Executive Officer of Lassonde Industries Inc.
Fiscal 2009 financial results
For fiscal 2009, the Company posted net sales of $524.2 million, up $18.7 million (3.7%) from net sales of $505.5 million in fiscal 2008.
This net sales growth was largely due to good performance by the Company's national brands in the retail segment. In 2009, the Company saw market share increases in most of its geographic markets. The positive impact of higher sales of national brands was partly offset by lower sales of private label products and by a decrease in sales to food services in the Western Canada market. Price adjustments did not have a significant impact on net sales growth in fiscal 2009 as the selling price increases of 2009 were offset by higher year-over-year trade spending.
Combined with the positive effect of higher net sales, cost reductions mainly involving raw material and transportation expenses, drove operating income to $47.4 million, a $5.2 million (12.4%) increase from the $42.2 million in operating income recorded in fiscal 2008. Operating income grew faster than net sales partly due to the favourable impact of lower raw material costs. Lower fuel prices reduced transportation costs, which also contributed to the improvement in operating income for the fiscal year. The beneficial impact of these factors was partly offset by the following: (i) a higher exchange rate on purchases made in U.S. dollars; (ii) higher costs for metal containers; (iii) a higher amortization expense due mainly to the Company's fixed asset investment program; and (iv) higher selling and marketing expenses resulting from targeted efforts to promote some of the Company's products.
The Company's net earnings totalled $30.6 million in 2009, up $1.3 million (4.6%) from the $29.3 million in net earnings reported in 2008. It should be noted that the 2008 net earnings had benefited from the reversal of a $1.0 million interest expense provision combined with the reversal of a $1.3 million provision for income taxes, due to the settlement of notices of assessment related to Bill 15. Excluding the impact of these reversals, net earnings for fiscal 2009 would have increased $3.6 million or 13.4% from the net earnings recorded for fiscal 2008.
Basic and diluted earnings per share for fiscal 2009 stood at $4.62, up 5.2% from the $4.39 per share recorded in fiscal 2008. Excluding the favourable impact of the settlement of notices of assessment related to Bill 15, basic and diluted earnings per share for fiscal 2008 would have been $4.05.
Fourth quarter financial results
Net sales for the fourth quarter of fiscal 2009 totalled $139.4 million, a $6.2 million (4.7%) increase from the $133.2 million in net sales recorded in the same quarter of 2008. This increase in net sales was mainly due to higher sales of the Company's national brands resulting in increased market shares. The Company's net sales were, however, affected by higher trade spending resulting from significant competitive pressures in the fourth quarter of 2009.
Cost of goods sold and operating expenses before amortization rose from $118.2 million in the fourth quarter of 2008 to $118.9 million in the same quarter of 2009. This 0.6% increase is lower than the 4.7% growth in net sales, mainly due to lower raw material and transportation costs.
As a result, fourth quarter operating income went from $11.1 million in 2008 to $15.5 million in 2009, a $4.4 million increase.
The Company's financial expenses rose from $0.7 million in the fourth quarter of fiscal 2008 to $1.3 million in the fourth quarter of 2009. The higher financial expense is due to a rise in interest expense of $0.4 million resulting from a higher level of long-term debt added to a $0.2 million unfavourable variance between the 2009 and the 2008 exchange gains.
Income taxes for the fourth quarter of 2009 stood at $4.0 million (effective tax rate of 28.0%), up $1.3 million from $2.7 million in the same quarter of fiscal 2008 (effective tax rate of 25.8%). The effective tax rate for 2008 was reduced by future income tax adjustments resulting from accelerated capital cost allowances generated by the Company's fixed asset investment program.
Net earnings for the last quarter therefore increased from $7.7 million in 2008 to $10.2 million in 2009, and basic and diluted earnings per share for the last quarter increased from $1.15 per share in 2008 to $1.55 per share in 2009.
Fiscal 2009 cash flows
Cash flows from operating activities totalled $47.3 million in 2009 compared to $31.9 million reported in 2008.
With respect to financing activities, the Company used $0.8 million in cash during fiscal 2009, whereas it used $3.4 million in cash in fiscal 2008.
Investing activities used $25.5 million and $26.8 million, respectively, for fiscal years 2009 and 2008. In 2009, the Company extended its fixed asset investment program to modernize equipment, increase productivity and support growing demand for its products.
Dividends
On February 18, 2010, the Company's Board of Directors declared a quarterly dividend of $0.27 per share to holders of Class A and Class B shares, payable on March 15, 2010. On an annualized basis, this dividend represents approximately 25% of 2008 net earnings. This is an eligible dividend.
Share repurchase plan
During the year ended December 31, 2009, the Company repurchased for cancellation, by way of a normal course issuer bid, 48,200 Class A subordinate voting shares at an average price of $39.88 per share for a cash consideration of $1,922,000, of which $217,000 was applied against capital stock, $1,698,000 against retained earnings, and $7,000 against contributed surplus. The Company has decided to renew its share repurchase plan. Consequently, the Company is allowed to repurchase, by way of a normal course issuer bid, up to 278,820 of its Class A subordinate voting shares between January 13, 2010 and January 12, 2011. The redemptions will be made through the Toronto Stock Exchange at market price in accordance with the exchange's policies and regulations. The repurchased Class A subordinate voting shares will be cancelled.
Outlook
Even though the economic outlook is still a cause of concern in Canada and the U.S., the food industry in which Lassonde Industries Inc. operates appears to be less affected by the economic turbulence than other, more cyclical industries. The Company has nevertheless noted that its clients remain cautious in their outlooks, and some have pointed to a risk of deflation when reporting their most recent financial results.
The Company intends to drive growth by launching several new products in the first two quarters of 2010. Concentrating these product launches in the first quarters of 2010 is expected to result in higher slotting fees for these periods. However, the Company expects that, on a full-year basis, the 2010 slotting fees will be comparable to those of fiscal 2009.
"Lassonde Industries Inc. is well positioned to benefit from the economic recovery, once it has been confirmed. We therefore plan on maintaining our management approach and our business model for the coming year. Barring any major external shocks, we remain optimistic about our ability to maintain the 2010 net sales growth at a level similar to that experienced in fiscal 2009," concluded Mr. Pierre-Paul Lassonde.
About Lassonde Industries Inc.
Lassonde Industries Inc. develops, manufactures and markets an innovative and distinctive line of fruit and vegetable juices and drinks as well as specialty food products such as fondue broths and fondue sauces, beans in sauce, soups, sauces and gravies, canned corn-on-the-cob, bruschetta toppings, tapenades, pestos and pasta sauces. Lassonde Industries Inc. imports selected wines from several countries of origin for packaging and marketing purposes. It also imports olive oil. These products are marketed in various packagings and under several trademarks. Approximately 1,300 employees are currently employed by Lassonde Industries Inc. and contribute to its growth.
SEDAR registration number: 00002099
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.
%SEDAR: 00002099EF
For further information: Guy Blanchette, CA, CMA, Vice-President and Chief Financial Officer, Lassonde Industries Inc., (450) 469-4926, ext. 782
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