Sun-Rype Reports Q3 2012 Financial Results
TSX: SRF
KELOWNA, BC, Nov. 8, 2012 /CNW/ - Sun-Rype Products Ltd. (TSX:SRF) ("Sun-Rype" or the "Company") today released its financial results for the quarter and three quarters ended September 29, 2012.
Financial Highlights
Sun-Rype's net sales in the third quarter of 2012 were $39.3 million compared to $39.3 million in the third quarter of 2011. The Company's net income in the third quarter of 2012 was $0.5 million or $0.05 per share, compared to a net loss of $3.0 million or $0.28 per share in the third quarter of 2011.
The Company's net sales in the first three quarters of 2012 were $116.4 million compared to $110.8 million in the first three quarters of 2011. The Company's net income in the first three quarters of 2012 was $2.0 million or $0.18 per share, compared to a net loss of $4.0 million or $0.37 per share in the first three quarters of 2011.
"The increase in Sun-Rype's net sales in the first three quarters of 2012 is primarily due to a 2011 business acquisition, and the impact of a one week longer reporting period. The increase in gross profit from these higher sales, together with lower operating expenses, increased results from operating activities in the third quarter of 2012 by $4.0 million and increased net income by $3.5 million, compared to the third quarter of 2011," commented Dave McAnerney, President & CEO. "Results from operating activities in the first three quarters of 2012 increased by $8.6 million and net income increased by $5.9 million, compared to the first three quarters of 2011."
Sun-Rype's reporting for the first three quarters reflects business activity ending on the last Saturday of September. As a result of a shift in the calendar, the first quarter and first three quarter periods of 2012 were one week longer than the same periods of 2011, and correspondingly the fourth quarter of 2012 will be one week shorter than the fourth quarter of 2011. Management estimates that the additional week of business activity in the first quarter and first three quarters of 2012 resulted in $2.8 million higher net sales than in the same periods of 2011.
Outlook
Despite reporting net income in the first three quarters of 2012 after three previous quarters of reported losses in 2011, the Company faces continuing challenges. Market data indicates that sales in the shelf-stable juice category, in which the Company derives approximately 60% of its net sales, are in decline. It is unclear whether these declines will continue. The strong competitive pressures experienced on branded products in 2011 and 2012 are anticipated to continue. The prices of certain concentrates have stabilized but remain higher than historical averages for 2012 and are projected to remain at this level for the remainder of 2012 and early 2013. Management anticipates that these factors may result in net losses in the fourth quarter of 2012 and the first quarter of 2013.
The Company is continuing to focus on launching innovative products and broadening geographic distribution of its products to mitigate the challenges described. There is no certainty that the incremental sales from these new products will exceed associated product and launch costs in 2013.
Ratification of a new Collective Agreement with the Teamsters Union, Local 213 occurred in September of 2012. The new agreement, which supersedes the current collective agreement, expires August 31, 2020 and provides labour stability at the Kelowna facility for the foreseeable future.
Sun-Rype Products Ltd., based in Kelowna, BC, is a manufacturer and marketer of fruit-based juices and snacks. Sun-Rype is a publicly traded Canadian company with its common shares listed on the Toronto Stock Exchange under the symbol SRF.
Additional Information
The foregoing are financial highlights only. Management's Discussion and Analysis and consolidated financial statements and accompanying notes of Sun-Rype Products Ltd. for the year ended December 31, 2011, are available on the Canadian Securities Administrator's website at www.sedar.com and on the Company's website at www.sunrype.com. Additional information relating to Sun-Rype's operations can be found in the Company's Annual Information Form, filed with all applicable Canadian securities commissions and available for viewing on the Canadian Securities Administrator's website at www.sedar.com and on the Company's website at www.sunrype.com.
Forward Looking Statements
Statements contained in this press release, which are not based on historical fact, including without limitation, statements containing the words "may", "will", "plans", "intends", "expects", "anticipates", "believes", "estimate", "continue" and similar expressions, constitute "forward looking information" within the meaning of applicable Canadian securities laws. Forward looking statements contained in this document may involve, but are not limited to, statements relating to the Company's objectives, priorities, strategies, actions, targets, expectations and outlook. Forward looking statements are necessarily based upon assumptions and predictions with respect to the future, including but not limited to the factors referred to below. As a result, forward looking statements are subject to known and unknown risks, uncertainties and other factors that may cause the actual results, events or developments to be materially different from any future results, events or developments expressed or implied thereby. These risks, uncertainties and other factors include, but are not limited to, changes in the consumer packaged goods industry and external market factors, as well as the factors referred to in the Company's Annual Information Form dated March 7, 2012, and its other filings with the applicable Canadian securities regulatory authorities. In light of these uncertainties, assumptions and risks, readers are cautioned not to place undue reliance on such forward looking statements. Except as required by law, the Company assumes no obligation to update or revise such information to reflect later events or developments.
| Sun-Rype Products Ltd. Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited) (in thousands of Canadian dollars, except per share amounts) |
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| For the quarters ended | For the three quarters ended | |||||||||||
| September 29, 2012 |
September 24, 2011 |
September 29, 2012 |
September 24, 2011 |
|||||||||
| Net sales | $ | 39,280 | $ | 39,314 | $ | 116,410 | $ | 110,750 | ||||
| Cost of sales | (32,739) | (35,545) | (96,003) | (94,656) | ||||||||
| Gross profit | 6,541 | 3,769 | 20,407 | 16,094 | ||||||||
| Sales and marketing expenses | (2,702) | (4,292) | (7,798) | (11,743) | ||||||||
| Distribution expenses | (1,648) | (1,923) | (5,350) | (5,734) | ||||||||
| General and administrative expenses | (1,240) | (1,520) | (3,945) | (3,928) | ||||||||
| Results from operating activities | 951 | (3,966) | 3,314 | (5,311) | ||||||||
| Finance costs | (216) | (93) | (619) | (307) | ||||||||
| Income (loss) before income tax | 735 | (4,059) | 2,695 | (5,618) | ||||||||
| Income tax recovery (expense) | (234) | 1,082 | (737) | 1,620 | ||||||||
| Net income (loss) for the period | 501 | (2,977) | 1,958 | (3,998) | ||||||||
| Other comprehensive income | ||||||||||||
| Foreign currency translation differences for foreign operations |
(35) | - | (33) | - | ||||||||
| Total comprehensive income (loss) for the period | $ | 466 | $ | (2,977) | $ | 1,925 | $ | (3,998) | ||||
| Basic and diluted earnings (loss) per share | $ | 0.05 | $ | (0.28) | $ | 0.18 | $ | (0.37) | ||||
SOURCE: Sun-Rype Products Ltd.
Dave McAnerney
President & Chief Executive Officer
Sun-Rype Products Ltd.
1165 Ethel Street
Kelowna, BC V1Y 2W4
Tel: (250) 860-7973
Fax: (250) 762-3611
[email protected]
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