VANCOUVER, BRITISH COLUMBIA -- (Marketwire) -- 11/08/12 -- Premium Brands Holdings Corporation (TSX: PBH), a leading producer, marketer and distributor of branded specialty food products, announced today its results for the third quarter of 2012.
HIGHLIGHTS FOR THE QUARTER
-- Revenue for the quarter increased by 23.9% or $49.2 million to a record
$255.0 million as compared to $205.7 million in the third quarter of
2011.
-- Record Adjusted EBITDA for the quarter of $20.2 million representing a
14.4% increase as compared to $17.6 million in the third quarter of
2011.
-- A quarterly dividend of $6.2 million or $0.294 per share.
-- Rolling twelve months free cash flow of $45.9 million resulting in a
dividend to free cash flow ratio of 52.7%.
-- Adjusted EBITDA guidance for 2012 of $70 million to $75 million
maintained.
-- Implementation of a normal course issuer bid through the facilities of
the TSX for the purchase and cancellation of up to 5% of its issued and
outstanding common shares and up to 10% of each of its issued and
outstanding convertible debentures.
SUMMARY FINANCIAL INFORMATION
(In thousands of dollars except per
share amounts) 13 Weeks Ended 39 Weeks Ended
Sep 29, Sep 24, Sep 29, Sep 24,
2012 2011 2012 2011
Revenue 254,978 205,748 724,726 543,695
Adjusted EBITDA 20,165 17,632 53,245 40,564
Earnings 4,599 6,097 12,773 11,574
EPS 0.22 0.32 0.62 0.62
Rolling Four
Quarters Ended
Sep 29, Dec 31,
2012 2011
Free cash flow 45,852 38,225
Declared dividends 24,151 22,672
Declared dividend per share 1.176 1.176
Payout ratio 52.7% 59.3%
"We are pleased to report another quarter of record revenues and Adjusted EBITDA," said Mr. George Paleologou, President and CEO. "Overall, our businesses continue to see strong growth opportunities through a combination of product innovation, geographical expansion and entering new market segments.
"There is, however, no question that our results for the quarter do not show our full potential. Over the last year we have been investing heavily in the capital improvements, infrastructure and process changes needed to support our growth objectives for the next five years. While these projects will create value for our shareholders over the long term, in the short term they are having a negative impact on our results.
"Looking forward, we are now in the final phase of many of these initiatives and, correspondingly, we will start to see the benefits associated with them in the near future," added Mr. Paleologou.
About Premium Brands
Premium Brands owns a broad range of leading specialty food manufacturing and differentiated food distribution businesses with operations in British Columbia, Alberta, Saskatchewan, Manitoba, Ontario, Quebec, Nevada and Washington State. The Company services over 26,000 customers and its family of brands and businesses include Grimm's, Harvest, McSweeney's, Bread Garden Go, Hygaard, Hempler's, Quality Fast Foods, Gloria's Best of Fresh, Direct Plus, National Direct-to-Store Distribution (NDSD), Harlan Fairbanks, Creekside Bakehouse, Centennial Foodservice, B&C Foods, Shahir, Duso's, Maximum Seafood, SK Food Group, OvenPride, Hub City Fisheries, Audrey's, Deli Chef and Piller's.
RESULTS OF OPERATIONS
Revenue
(in thousands of dollars except percentages)
13 weeks 13 weeks 39 weeks 39 weeks
ended ended ended ended
Sep 29, Sep 24, Sep 29, Sep 24,
2012 % 2011 % 2012 % 2011 %
Revenue by
segment:
Retail 158,474 62.2% 113,385 55.1% 445,609 61.5% 284,387 52.3%
Foodservice 96,504 37.8% 92,363 44.9% 279,117 38.5% 259,308 47.7%
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Consolidated 254,978 100.0% 205,748 100.0% 724,726 100.0% 543,695 100.0%
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Retail's revenue for the third quarter of 2012 as compared to the third quarter of 2011 increased by $45.1 million or 39.8% due to: (i) the acquisition of Piller's in 2011 which resulted in $37.2 million in incremental sales; and (ii) organic growth of $7.9 million representing an organic growth rate of approximately 7.0%.
Retail's organic growth for the quarter, which was within the Company's targeted range of 6% to 8%, was due to a range of factors including: (i) a variety of new product and customer sales initiatives; (ii) price increases across a broad range of products; and (iii) favourable weather conditions in most of Retail's markets across Canada. These factors were partially offset by lower sales resulting from the restructuring of the Company's NDSD business' distribution network. This initiative involves the conversion of NDSD's customers in certain defined territories from being serviced by NDSD's direct-to- store delivery trucks to being serviced by exclusive third party distributors that form part of NDSD's distribution network. Hence, for territories that have been converted, the Company now sells its products at a discounted price (which results in a decrease in Retail's revenue) to an exclusive third party distributor who in turn sells and distributes the Company's products to convenience store retailers.
Retail's revenue for the first three quarters of 2012 increased by $161.2 million or 56.7% as compared to the first three quarters of 2011 primarily due to: (i) the acquisitions of Piller's, SJ and Deli Chef in 2011, which resulted in incremental sales of $136.0 million; and (ii) organic growth across a range of products and customers of $25.2 million representing an organic growth rate of approximately 8.9%.
Looking forward (see Forward Looking Statements), for the fourth quarter of 2012 the Company expects Retail's organic sales growth to continue to be within the range of its previous guidance of 6% to 8%.
Foodservice's revenue for the third quarter of 2012 as compared to the third quarter of 2011 increased by $4.1 million or 4.5% due to: (i) general organic growth of $3.4 million representing an organic growth rate of 3.9%; and (ii) increased sales in its Worldsource food brokerage business of $0.7 million resulting from improved trading opportunities.
Foodservice's low organic growth rate as compared to the Company's guidance of 6% to 8% was primarily due to lower seafood sales resulting from exceptionally warm weather that negatively impacted both consumer demand for seafood products and seafood harvesting. Foodservice's sales to its core hotel, restaurant and institutional customers grew at an organic rate of approximately 5.8% which was slightly below the Company's targeted range.
Foodservice's revenue for the first three quarters of 2012 as compared to the first three quarters of 2011 increased by $19.8 million or 7.6% due to: (i) general organic growth of $15.2 million representing a growth rate of 6.2%; (ii) increased sales in its Worldsource food brokerage business of $3.5 million; and (iii) $1.1 million in unusual trading volume in its Hub City Fisheries business resulting from the sale of excess inventory relating to a very successful salmon fishery in 2011.
Looking forward (see Forward Looking Statements), for the fourth quarter of 2012 the Company expects Foodservice's organic sales growth to be below its previous guidance of 6% to 8% primarily due to: (i) the negative impact on its sales to restaurants and pubs resulting from a delay in the start of the 2012/13 National Hockey League season; and (ii) product supply issues resulting from the shutdown at the end of the third quarter of one of Canada's largest beef processors due to a major product recall.
Gross Profit
(in thousands of dollars except percentages)
13 weeks 13 weeks 39 weeks 39 weeks
ended ended ended ended
Sep 29, Sep 24, Sep 29, Sep 24,
2012 % 2011 % 2012 % 2011 %
Gross profit by
segment:
Retail 36,205 22.8% 30,364 26.8% 101,062 22.7% 75,988 26.7%
Foodservice 18,255 18.9% 18,006 19.5% 52,941 19.0% 49,899 19.2%
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Consolidated 54,460 21.4% 48,370 23.5% 154,003 21.2% 125,887 23.2%
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Retail's gross profit as a percentage of its revenue (gross margin) for the third quarter of 2012 as compared to the third quarter of 2011 decreased from 26.8% to 22.8% due in part to: (i) the acquisition of Piller's in 2011 as this business generally has lower average gross margins as compared to Retail's other businesses; and (ii) a change in selling terms whereby certain customers now receive their products FOB the Company's plant versus FOB the customers' warehouses. This resulted in the elimination of freight being billed to these customers and corresponding decreases in gross profit and selling expenses.
Normalizing for the above factors, Retail's gross margin for the quarter was 25.7% as compared to 27.0% in the third quarter of 2011. The balance of the decrease in Retail's gross margin was primarily due to: (i) reduced gross margins on product sales transitioned to third party distributors as part of the restructuring of NDSD's distribution network; and (ii) increased plant overheads associated with Retail's new bakery facility, which was completed in the third quarter.
Retail's gross margin for the first three quarters of 2012 as compared to the first three quarters of 2011 decreased from 26.7% to 22.7% due in part to: (i) the acquisitions of Piller's and SJ in 2011; and (ii) the change in selling terms for certain customers as discussed above. Normalizing for these factors, Retail's gross margin for the first three quarters of 2012 was 26.4% as compared to 27.1% for the first three quarters of 2011. The balance of the decrease in Retail's gross margin was primarily due to the restructuring of NDSD's distribution network and increased bakery plant overheads as discussed above.
Foodservice's gross margin for the third quarter of 2012 as compared to the third quarter of 2011 decreased from 19.5% to 18.9% due to a variety of commodity input cost increases including: (i) higher premium beef prices, which were the result of increased buying and promotion of premium beef by a large U.S. based retailer; (ii) higher seafood costs, which were the result of a poor harvest of several species of seafood; and (iii) increased popcorn kernel prices, which were due to relatively poor crops in 2011 and 2012.
Foodservice's gross margin for the first three quarters of 2012 was relatively consistent with its gross margin for the first three quarters of 2011.
Selling, General and Administrative Expenses (SG&A)
(in thousands of dollars except percentages)
13 weeks 13 weeks 39 weeks 39 weeks
ended ended ended ended
Sep 29, Sep 24, Sep 29, Sep 24,
2012 % 2011 % 2012 % 2011 %
SG&A by segment:
Retail 20,673 13.0% 17,700 15.6% 59,699 13.4% 46,796 16.5%
Foodservice 12,315 12.8% 11,550 12.5% 36,483 13.1% 33,946 13.1%
Corporate 1,307 1,488 4,576 4,581
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Consolidated 34,295 13.5% 30,738 14.9% 100,758 13.9% 85,323 15.7%
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Retail's SG&A in the third quarter of 2012 as compared to the third quarter of 2011 increased by $3.0 million primarily due to: (i) the acquisition of Piller's in 2011 which resulted in an increase of $2.9 million; and (ii) a variety of items consisting primarily of variable selling costs associated with Retail's organic sales growth. These increases were partially offset by: (i) a decrease in freight costs of approximately $0.9 million due to a change in selling terms whereby certain customers now receive their products FOB the Company's plant versus FOB the customers' warehouses. This resulted in the elimination of freight being billed to these customers and corresponding decreases in gross profit and selling expenses; and (ii) reduced distribution related costs resulting from the rationalization of Retail's DSD Network.
Retail's SG&A for the first three quarters of 2012 as compared to the first three quarters of 2011 increased by $12.9 million primarily due to: (i) the acquisitions of Piller's, SJ and Deli Chef in 2011 which resulted in an increase in Retail's SG&A of $13.5 million; and (ii) a variety of items consisting primarily of variable selling costs associated with Retail's organic sales growth. These increases were partially offset by: (i) a decrease in freight costs of approximately $2.5 million due to the change in selling terms whereby certain customers now receive their products FOB the Company's plant versus FOB the customers' warehouses; and (ii) reduced distribution related costs resulting from the rationalization of Retail's DSD Network.
Normalizing for the acquisitions of Piller's and SJ and for the impact of the change in selling terms for certain customers, Retail's SG&A as a percentage of revenue for the first three quarters of 2012 was 16.2% as compared to 16.5% for the first three quarters of 2011. The decrease in Retail's normalized SG&A as a percentage of revenue was due to a range of factors including reduced distribution related costs resulting from the rationalization of its DSD Network.
Foodservice's SG&A in the third quarter of 2012 as compared to the third quarter of 2011 increased by $0.8 million while its SG&A in the first three quarters of 2012 as compared to the first three quarters of 2011 increased by $2.5 million. Both increases were due to a variety of items including higher variable selling costs associated with Foodservice's organic sales growth.
Foodservice's SG&A as a percentage of revenue for the first three quarters of 2012 was 13.1%, which is consistent with its SG&A as a percentage of revenue of 13.1% for the first three quarters of 2011.
Adjusted EBITDA
(in thousands of dollars except percentages)
13 weeks 13 weeks 39 weeks 39 weeks
ended ended ended ended
Sep 29, Sep 24, Sep 29, Sep 24,
2012 % 2011 % 2012 % 2011 %
Adjusted EBITDA
by segment:
Retail 15,532 9.8% 12,663 11.2% 41,363 9.3% 29,192 10.3%
Foodservice 5,940 6.2% 6,457 7.0% 16,458 5.9% 15,953 6.2%
Corporate (1,307) (1,488) (4,576) (4,581)
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Consolidated 20,165 7.9% 17,632 8.6% 53,245 7.3% 40,564 7.5%
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The Company's Adjusted EBITDA for the first three quarters of 2012 as compared to the first three quarters of 2011 increased by $12.7 million or 31.3% to $53.2 million primarily due to: (i) acquisitions; and (ii) organic growth in a number of the Company's legacy businesses. These increases were partially offset by:
-- A decrease in the Company's Stuyver's business' Adjusted EBITDA in the
third quarter of 2012 as compared to the third quarter of 2011 due to a
combination of: (i) a planned increase in Stuyver's production overheads
resulting from the incremental capacity of its new artisan bakery; and
(ii) Stuyver's delay of a variety of selling initiatives (which are
based on leveraging its incremental capacity) due to startup related
issues at its new artisan bakery. The Company expects (see Forward
Looking Statements) Stuyver's startup related issues to be resolved in
the fourth quarter of 2012 after which Stuyver's will begin aggressively
pursuing its new selling initiatives.
-- A decrease in the Company's NDSD business' Adjusted EBITDA in the third
quarter of 2012 as compared to the third quarter of 2011 due to delays
in fully implementing the SG&A savings associated with the restructuring
of its distribution network. As a result, the Company lost the margin
associated with sales that were transitioned to exclusive third party
distributors but did not fully realize the cost savings projected to
result from these changes. The Company expects (see Forward Looking
Statements) NDSD to have all of the cost savings initiatives associated
with its restructuring implemented by the end of the first quarter of
2013.
Looking forward (see Forward Looking Statements), despite the impact of the decrease in Stuyver's and NDSD's Adjusted EBITDA, as discussed above, the Company still expects its Adjusted EBITDA for 2012 to be within its current guidance of $70.0 million to $75.0 million, albeit likely at the bottom end of this range.
Interest
The increase in the Company's interest and other financing costs for both the third quarter of 2012 as compared to the third quarter of 2011, and for the first three quarters of 2012 as compared to the first three quarters of 2011, was primarily due to: (i) an increase in the Company's average outstanding net funded debt; and (ii) the issuance of $57.5 million of convertible debentures, the proceeds of which were used to repay lower cost senior debt.
Restructuring Costs
Restructuring costs consist of costs associated with the significant restructuring of one or more of the Company's businesses. For the first three quarters of 2012, the Company incurred $4.0 million in restructuring costs consisting of:
-- $2.2 million in costs relating to the reconfiguration of the Company's
sandwich production facilities. This project consists of the following
three initiatives: (i) the construction of a new 20,000 square foot
sandwich plant in Laval, Quebec, which was completed at the end of the
second quarter of 2012 and commenced operations in July 2012; (ii) the
transfer of the operations of the Company's leased sandwich production
facility in Edmonton, Alberta to its owned sandwich production facility
in Edmonton and the subsequent shutdown of the leased facility. This was
completed in August 2012; and (iii) the transfer of the production of
certain products from the Company's sandwich plant in Etobicoke, Ontario
to its new plant in Laval and the subsequent sale of the Etobicoke
plant's remaining operations, which consisted primarily of fresh
sandwich production. This was completed at the end of September 2012.
Once completed, the benefits expected (see Forward Looking Statements)
to be generated from this project include: (i) a new state-of-the-art
facility in Laval which will be used to grow the Company's sandwich
business in central and eastern Canada; (ii) reduced plant operating
overhead costs through the shutdown of the Company's leased facility in
Edmonton; (iii) improved production efficiencies by transferring
production from the less efficient Etobicoke plant to the new Laval
plant; and (iv) freight savings associated with reconfiguring production
so that sandwiches for the central and eastern Canadian markets are made
in the Laval facility while sandwiches for the western Canadian market
are produced in the Edmonton facility.
Looking forward (see Forward Looking Statements), the Company
anticipates that it will incur an additional $0.4 million in
restructuring costs associated with this initiative in the fourth
quarter of 2012.
-- $0.9 million in charges relating to the restructuring of the Company's
NDSD business' direct-to- store distribution networks (DSD networks) for
the convenience store channel. This restructuring, which is expected to
be completed in the first quarter of 2013, involves the merging and
rationalization of the following three DSD networks:
a. The Company's Direct Plus DSD network, which operates primarily in
western Canada;
b. The DSD network acquired as part of the Deli Chef acquisition in
2011. This network operates in Ontario and Quebec; and
c. The independent distributor network controlled by the Company's
recently acquired Pridcorp business. This network operates in
various markets across Canada, including the Maritimes.
-- Once completed, this initiative is expected to (see Forward Looking
Statements): (i) create Canada's only national convenience store DSD
network in the sandwich, meat snack and pastry categories; (ii) gain
efficiencies by eliminating overlaps where two of the above three DSD
networks are servicing the same customer sites; and (iii) further
improve the profitability of the DSD delivery routes serviced by the
Company's own fleet by adding products to these routes that were
previously distributed exclusively by Pridcorp's network.
Looking forward (see Forward Looking Statements), the Company
anticipates that it will incur an additional $0.4 million in
restructuring costs relating to this initiative over the next two
quarters.
-- $0.9 million in startup, redundant lease and severance costs associated
with Stuyver's new artisan bread facility, which commenced commercial
operations in the second quarter of 2012.
This initiative is expected to (see Forward Looking Statements): (i)
provide a substantial increase in production capacity as Stuyver's
previous bakery, which was shut down in July 2012 and was operating at
near to capacity; and (ii) generate significant production efficiencies
once the plant is operating at a reasonable level of utilization of its
capacity.
Looking forward (see Forward Looking Statements), the Company
anticipates that it will incur an additional $0.2 million in
restructuring costs relating to this initiative in the fourth quarter of
2012.
FREE CASH FLOW
The following table provides a reconciliation of free cash flow to cash flow from operating activities:
(in thousands of dollars) 53 weeks 39 weeks 39 weeks Rolling
ended ended ended Four
Dec 31, 2011 Sep 24, 2011 Sep 29, 2012 Quarters
Cash flow from operating
activities 29,524 17,014 40,216 52,726
Changes in non-cash
working capital 6,050 9,592 (4,695) (8,237)
Deferred revenue 1,118 1,118 - -
Acquisition transaction
costs 1,594 892 193 895
Restructuring costs 2,819 2,745 3,991 4,065
Capital maintenance
expenditures (2,880) (1,905) (2,622) (3,597)
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Free cash flow 38,225 29,456 37,083 45,852
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FORWARD LOOKING STATEMENTS
This discussion and analysis contains forward looking statements with respect to the Company, including its business operations, strategy and financial performance and condition. These statements generally can be identified by the use of forward looking words such as "may", "could", "should", "would", "will", "expect", "intend", "plan", "estimate", "project", "anticipate", "believe" or "continue", or the negative thereof or similar variations.
Although management believes that the expectations reflected in such forward looking statements are reasonable and represent the Company's internal expectations and belief as of November 7, 2012, such statements involve unknown risks and uncertainties beyond the Company's control which may cause its actual performance and results in future periods to differ materially from any estimates or projections of future performance or results expressed or implied by such forward looking statements.
Factors that could cause actual results to differ materially from the Company's expectations include, among other things: (i) seasonal and/or weather related fluctuations in the Company's sales; (ii) changes in consumer discretionary spending resulting from changes in economic conditions and/or general consumer confidence levels; (iii) changes in the cost of raw materials used in the production of the Company's products; (iv) changes in the cost of products sourced from third party manufacturers and sold through the Company's proprietary distribution networks; (v) risks associated with the Company's conversion from a publicly traded income trust to a publicly traded corporation, including related changes in Canada's income tax laws; (vi) changes in the Company's relationships with its larger customers; (vii) potential liabilities and expenses resulting from defects in the Company's products; (viii) changes in consumer food product preferences; (ix) competition from other food manufacturers and distributors; (x) execution risk associated with the Company's growth initiatives; (xi) risks associated with the Company's business acquisition strategies; and (xii) new government regulations affecting the Company's business and operations. Details on these risk factors as well as other factors can be found in the Company's 2011 MD&A, which is filed electronically through SEDAR and is available online at www.sedar.com.
Unless otherwise indicated, the forward looking information in this document is made as of November 7, 2012 and, except as required by applicable law, will not be publicly updated or revised. This cautionary statement expressly qualifies the forward looking information in this document.
Premium Brands Holdings Corporation
Consolidated Balance Sheets
(Unaudited and in thousands of dollars)
September December September
29, 31, 24,
2012 2011 2011
Current assets:
Cash and cash equivalents 3,895 4,860 4,290
Accounts receivable 83,669 78,830 79,370
Other assets 162 103 677
Inventories 88,685 79,977 87,415
Prepaid expenses 5,588 13,455 11,181
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181,999 177,225 182,933
Capital assets 182,204 167,982 157,919
Intangible assets 73,001 77,087 71,897
Goodwill 154,391 150,417 151,854
Other assets 2,191 2,250 1,264
Deferred income taxes 31,923 39,952 41,729
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625,709 614,913 607,596
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Current liabilities:
Cheques outstanding 1,941 2,504 3,438
Bank indebtedness 1,370 18,061 9,490
Dividend payable 6,187 5,958 5,958
Accounts payable and accrued liabilities 91,784 80,162 82,233
Current portion of long-term debt 23,596 20,536 17,516
Current portion of provisions 2,349 2,924 -
Other 300 - -
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127,527 130,145 118,635
Puttable interest in subsidiaries 15,282 15,210 15,285
Deferred revenue 1,544 1,943 2,032
Pension obligation 1,349 1,345 1,008
Provisions 9,489 8,360 8,151
Long-term debt 127,808 162,661 162,209
Convertible unsecured subordinated
debentures 133,751 89,396 89,030
Other - 100 -
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416,750 409,160 396,350
Equity attributable to shareholders:
Accumulated earnings 145,981 133,370 132,591
Accumulated dividends declared (148,690) (130,497) (124,525)
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Retained earnings (deficit) (2,709) 2,873 8,066
Share capital 209,068 198,057 198,057
Equity component of convertible unsecured
subordinated debentures 1,869 1,916 1,916
Reserves (796) 1,442 1,803
Non-controlling interest 1,527 1,465 1,404
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208,959 205,753 211,246
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625,709 614,913 607,596
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Premium Brands Holdings Corporation
Consolidated Statements of Operations
(Unaudited and in thousands of dollars except per share amounts)
13 weeks 13 weeks 39 weeks 39 weeks
ended ended ended ended
September September September September
29, 24, 29, 24,
2012 2011 2012 2011
Revenue 254,978 205,748 724,726 543,695
Cost of goods sold 200,518 157,378 570,723 417,808
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Gross profit before depreciation
and amortization 54,460 48,370 154,003 125,887
Selling, general and
administrative expenses before
depreciation and amortization 34,295 30,738 100,758 85,323
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20,165 17,632 53,245 40,564
Depreciation of capital assets 4,088 3,148 11,483 8,175
Amortization of intangible assets 1,214 817 3,701 2,372
Amortization of other assets 1 1 4 4
Interest and other financing
costs 4,676 3,653 13,100 10,302
Amortization of financing costs 94 55 306 193
Acquisition transaction costs 140 490 193 892
Change in value of puttable
interest in subsidiaries 500 490 1,205 1,678
Accretion of provisions 210 35 629 35
Unrealized loss (gain) on foreign
currency contracts 200 (796) 300 (715)
Unrealized gain on interest rate
swap contracts (100) - (200) -
Restructuring costs 2,331 900 3,991 2,745
Acquisition bargain purchase gain - - - (1,355)
Equity loss in associate - - - 277
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Earnings before income taxes 6,811 8,839 18,533 15,961
Provision for income taxes
Current 1,109 386 2,051 1,405
Deferred 1,103 2,356 3,709 2,982
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2,212 2,742 5,760 4,387
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Earnings 4,599 6,097 12,773 11,574
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Earnings for the period
attributable to:
Shareholders 4,492 6,012 12,611 11,339
Non-controlling interest 107 85 162 235
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4,599 6,097 12,773 11,574
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Earnings per share
Basic 0.22 0.32 0.62 0.62
Diluted 0.21 0.32 0.61 0.62
Weighted average shares
outstanding (in 000's)
Basic 20,822 18,555 20,458 18,284
Diluted 20,917 18,651 20,553 18,380
Premium Brands Holdings Corporation
Consolidated Statements of Cash Flows
(Unaudited and in thousands of dollars)
13 weeks 13 weeks 39 weeks 39 weeks
ended ended ended ended
September September September September
29, 24, 29, 24,
2012 2011 2012 2011
Cash flows from operating
activities:
Earnings 4,599 6,097 12,773 11,574
Items not involving cash:
Depreciation of capital
assets 4,088 3,148 11,483 8,175
Amortization of intangible
and other assets 1,215 818 3,705 2,376
Amortization of financing
costs 94 55 306 193
Change in value of
puttable interest in
subsidiaries 500 490 1,205 1,678
Loss (gain) on disposal of
capital assets 228 1 244 (1)
Accrued interest income (7) (17) (22) (43)
Net unrealized loss (gain)
on foreign currency and
interest rate swap
contracts 100 (796) 100 (715)
Equity loss in associate - - - 277
Deferred revenue (142) (109) (387) (216)
Accretion of convertible
debentures 494 329 1,272 1,056
Accretion of long-term
debt 212 201 504 590
Accretion of provisions 210 35 629 35
Acquisition bargain
purchase gain - - - (1,355)
Deferred income taxes 1,103 2,356 3,709 2,982
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12,694 12,608 35,521 26,606
Change in non-cash working
capital 7,937 2,711 4,695 (9,592)
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20,631 15,319 40,216 17,014
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Cash flows from financing
activities:
Long-term debt - net (922) 60,178 (32,164) 29,740
Bank indebtedness and cheques
outstanding (9,602) (4,118) (17,254) 4,431
Convertible debentures - net
of issuance costs - - 54,600 54,600
Deferred revenue - - - 1,118
Purchase of 7.00% Debentures
under normal course issuer
bid (261) - (261) -
Dividends paid to shareholders (6,005) (5,380) (17,964) (16,124)
Other - - (2) (381)
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(16,790) 50,680 (13,045) 73,384
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Cash flows from investing
activities:
Capital asset additions (3,115) (2,896) (26,798) (9,198)
Business acquisitions - (63,846) - (74,681)
Repayment of share purchase
loans and notes receivable 26 21 210 63
Promissory note from associate - - - (300)
Net proceeds from sales of
assets - 14 285 19
Payments to shareholders of
non-wholly owned subsidiaries (74) (83) (1,227) (445)
Purchase of shares of non-
wholly owned subsidiary
pursuant to puttable interest - - - (2,286)
Payment of provisions for
contingent consideration (356) - (575) -
Other (8) 141 - (168)
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(3,527) (66,649) (28,105) (86,996)
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Increase (decrease) in cash and
cash equivalents 314 (650) (934) 3,402
Effects of exchange on cash and
cash equivalents 45 (22) (31) 20
Cash and cash equivalents -
beginning of period 3,536 4,962 4,860 868
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Cash and cash equivalents - end
of period 3,895 4,290 3,895 4,290
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Contacts:
Premium Brands Holdings Corporation
George Paleologou
President and CEO
(604) 656-3100
Premium Brands Holdings Corporation
Will Kalutycz
CFO
(604) 656-3100
