ROUGEMONT, QC, March 26, 2021 /CNW/ - Lassonde Industries
Inc. (TSX: LAS.A) ("Lassonde") announced today that profit
attributable to the Company's shareholders for fiscal 2020 was up
35.9%.
Lassonde also announced the appointment of Mr. Vincent R.
Timpano to succeed Mr. Jean Gattuso
as President and Chief Operating Officer of Lassonde as of
October 1, 2021. Lassonde has
previously announced that in accordance with its succession plan,
Mr. Gattuso indicated his decision to step down on September 30, 2021.
Since his appointment in September
2020 as President and Chief Executive Officer of
Lassonde Pappas and Company Inc.
("LPC,"), Lassonde's largest manufacturing and sales subsidiary of
ready-to-drink juices and drinks, Mr. Timpano took on the
oversight of the strategic growth and development of our U.S.
operations. During the six-month transition period provided for in
the Corporation's succession plan, he will benefit from the support
of the Corporation's executive team as he transitions to his new
set of responsibilities, while Mr. Gattuso maintains his current
role until September 30, 2021.
"The choice of Mr. Timpano as successor was clear because of his
leadership, his expertise in the area of consumer products, his
success managing LPC and his alignment with our values. He will
succeed Mr. Gattuso who, over the last 34 years with Lassonde,
contributed exceptionally to the growth and expansion of the
Corporation on both sides of the border. This transition between
executive officers will ensure continuity of a proven business
model," said Nathalie Lassonde,
Chief Executive Officer and Vice Chairman of the Board of Directors
and Pierre-Paul Lassonde, Chairman
of the Board of Directors.
Vincent R. Timpano will soon join Lassonde's management team at
the Rougemont head office, from
where he will be carrying out his duties.
"I am excited about the prospect of working with Nathalie Lassonde and the rest of the management
team to continue implementing the Corporation's business strategy.
Lassonde has a strong entrepreneurial spirit, a portfolio of
quality brands and a sound financial position," said Mr.
Timpano.
Mr. Timpano has a solid track record as a corporate officer with
extensive commercial and operational experience. Over the past 20
years, he has served in various executive roles, including
President, Global Coalitions at Aimia Inc., President of Coca-Cola
Canada and President and Chief Executive Officer of The Minute Maid
Company Canada. In addition, Mr. Timpano has served on numerous
boards, including as Chair, with United Way Toronto. He
currently serves on the board of advisors with The Napoleon Group
of Companies.
Mr. Timpano is a graduate of the Institute of Corporate
Directors, Rotman School of
Management of the University of Toronto
and received an MBA from the Ivey Business School of the
University of Western Ontario.
Fiscal 2020
Lassonde posted sales of $1,980.9 million in 2020, up 18.0% from
$1,678.3 million in 2019.
Excluding the $175.4 million in sales
from Sun-Rype, an entity acquired on January
3, 2020, and a $13.3 million
favourable foreign exchange impact, adjusted sales were up 6.8%
year over year. The 2020 profit attributable to the Company's
shareholders totalled $97.6 million compared to $72.0 million last year. Excluding the
impacts of the Sun-Rype acquisition and of a gain of $13.8 million, net of tax, realized in 2019
following the settlement of an insurance claim, the 2020 profit
attributable to the Company's shareholders was up $34.5 million year over year.
Financial
highlights
(in thousands of
dollars)
|
Fourth
quarters
ended
|
Years
ended
|
|
December 31,
2020
|
December 31,
2019
|
December 31, 2020
|
December 31,
2019
|
Sales
|
$
|
515,065
|
$
|
432,127
|
$
|
1,980,925
|
$
|
1,678,301
|
Operating
profit
|
|
38,907
|
|
24,964
|
|
151,931
|
|
100,826
|
Profit before income
taxes
|
|
33,815
|
|
40,694
|
|
134,592
|
|
100,488
|
Profit attributable
to the Company's
shareholders
|
|
23,538
|
|
28,466
|
|
97,816
|
|
71,977
|
Basic and diluted
earnings per
share (in $)
|
$
|
3.39
|
$
|
4.10
|
$
|
14.11
|
$
|
10.37
|
|
Note:
These are financial highlights only. Management's Discussion and
Analysis and the audited consolidated financial statements and
notes thereto for the year ended December 31, 2020 are
available on the SEDAR website at www.sedar.com and on the website
of Lassonde Industries Inc.
|
"Industry volumes as well as our sales increased significantly
in 2020. While this is a significant progression, we believe it is
too early to conclude that this is a sustainable phenomenon. We are
particularly pleased with our improved profitability, which is the
result of good performance in all our business units. Demand for
our products remains strong and we are striving to meet this demand
despite the constrained availability of labour due to the need to
maintain a safe environment for all our employees in the context of
the ongoing pandemic. I would like to take this opportunity to
thank our employees for their exceptional work during these
difficult times," said Nathalie
Lassonde, Chief Executive Officer and Vice Chairman of the
Board of Directors of Lassonde Industries Inc.
2020 Financial Results
On January 3, 2020, the Company
completed the acquisition of Sun-Rype Products Ltd. and of two of
its affiliates ("Sun-Rype") for a cash consideration of
$89.3 million that was paid at the
close of the transaction. This amount included preliminary
adjustments related to cash, working capital, and property, plant
and equipment. During the second quarter of 2020, an amount of
$2.2 million was received from the
seller following the final settlement of these adjustments. As part
of the transaction, the Company assumed liabilities of $23.0 million related to lease liabilities for
the Sun-Rype facilities. The acquisition was financed by the
Company's existing Canadian credit facility. The transaction costs,
incurred mainly in the fourth quarter of 2019, were $1.5 million. The Company has recognized this
business combination using the acquisition method in accordance
with the provisions of IFRS 3. Therefore, the
2020 consolidated financial statements include the results of
Sun-Rype from January 3, 2020.
For 2020, the Company's sales totalled $1,980.9 million, up $302.6 million or 18.0% from $1,678.3 million in 2019. Sales from Sun-Rype
added $175.4 million to the Company's
2020 sales. Excluding Sun-Rype's sales and a $13.3 million favourable foreign exchange impact,
the Company's sales were up $113.9
million or 6.8% year over year. This increase was largely
due to an increase in sales of private label products. The Company
believes that a significant portion of this increase could be due
to changes in food habits related to the impacts of COVID–19, as
industry sales volumes have also benefited from a notable
increase.
The Company's 2020 operating profit totalled $151.9 million, up $51.1
million from $100.8 million
last year. During 2020, Sun-Rype posted $8.2
million in operating profit whereas in 2019, the Company had
incurred $1.5 million in expenses
related to the Sun-Rype acquisition. Excluding these items, the
Company's operating profit was up $41.4
million year over year. This increase was explained by
higher gross margins from the Company's U.S. and Canadian
operations, mainly due to a favourable change in the sales mix, to
an increase in sales volume and to a decrease in the cost of
certain raw materials, especially orange concentrate and the resin
used to manufacture plastic bottles ("PET resin"), partly offset by
additional production costs related to the pandemic. The operating
profit was also affected by higher performance related salary
expenses and an increase in warehousing and transportation costs,
partly offset by lower selling and marketing expenses.
The Company's financial expenses went from $19.5 million in 2019 to $17.3 million in 2020. Excluding $2.7 million in interest expense related to the
Sun-Rype acquisition, financial expenses were down $4.9 million. This decrease was essentially due
to a reduction in the interest expense on long-term debt explained
by lower debt levels resulting from a significant cash flow
generation in 2020.
"Other (gains) losses" went from a $19.2
million gain in 2019 to a $0.8
million gain in 2020. This 2020 gain was due to $0.6 million in gains realized following the
settlement of various insurance claims and to a $0.2 million gain resulting from a change in the
fair value of financial instruments, whereas the 2019 gain was
mainly due to a $20.8 million gain
realized following the settlement of an insurance claim directly
related to the acquisition price of Old Orchard Brands, LLC
("OOB"), partly offset by a $1.0
million loss resulting from a change in the fair value of
financial instruments and by $0.8
million in foreign exchange losses.
Profit before income taxes stood at $134.6 million in 2020, up $34.1 million from $100.5
million in 2019.
Income tax expense went from $25.5
million in 2019 to $32.7
million in 2020. At 24.3%, the 2020 effective income tax
rate was lower than the 25.4% rate in 2019. The 2019 effective
income tax rate reflected the unfavourable impact of changes to
U.S. tax regulations affecting the deductibility of certain
interest expenses. Excluding this item, the 2020 effective income
tax rate was similar to the adjusted rate in 2019 and mainly
reflects a decrease in the deductible amounts on the Company's
interest expense offset by the impact of incentive measures adopted
by the U.S. government to help businesses deal with the COVID-19
crisis.
The 2020 profit totalled $101.9
million, up $27.0 million from
$74.9 million in 2019. The current
results include a profit of $5.6
million from Sun-Rype and an amount of $1.3 million, net of tax, in additional financial
expenses related to the financing of the Sun-Rype acquisition while
the 2019 profit included a $15.3
million gain, net of tax, realized following the settlement
of an insurance claim and $1.1
million, net of tax, in Sun-Rype acquisition-related costs.
Excluding these items, the Company's 2020 profit was up
$36.9 million year over year.
Profit attributable to the Company's shareholders was
$97.8 million, resulting in basic and
diluted earnings per share of $14.11
for 2020. In 2019, profit attributable to the Company's
shareholders had totalled $72.0
million, resulting in basic and diluted earnings per share
of $10.37. Excluding the impacts of
the Sun-Rype acquisition and of the gain realized in 2019 following
the settlement of an insurance claim, the 2020 profit attributable
to the Company's shareholders was up $34.5 million year over year.
The Company's operating activities generated $231.2 million in cash during 2020, while they
had generated $140.7 million in cash
during 2019. As for Sun-Rype's operating activities, they generated
$16.5 million in cash during 2020.
Financing activities used $92.6
million in cash during 2020, while they had used
$100.7 million in 2019. Investing
activities used $121.0 million in
cash during 2020 compared to $55.3
million used in 2019. At year-end 2020, the Company reported
a cash and cash equivalents balance of $6.8
million and no bank overdraft, whereas, at the end of 2019,
the cash and cash equivalents balance was $1.8 million and the bank overdraft balance
was $12.4 million.
Fourth Quarter Financial Results
For the fourth quarter of 2020, the Company's sales totalled
$515.1 million, up $83.0 million or 19.2% from $432.1 million in the fourth quarter of
2019. Sun–Rype's fourth-quarter sales totalled $48.1 million, leaving a $34.9 million favourable variance on a comparable
basis. This increase was mainly due to an increase in sales of
private label products and to the favourable impact of selling
price adjustments on national brand sales.
The Company's operating profit for the fourth quarter of 2020
totalled $38.9 million, up
$13.9 million from $25.0 million in the same quarter last year.
During the fourth quarter of 2020, Sun-Rype posted $1.7 million in operating profit whereas in 2019,
the Company had incurred $1.5 million
in expenses related to the Sun-Rype acquisition. Excluding these
items, the Company's operating profit was up $10.7 million year over year. The increase
came from higher gross margin from the Company's Canadian
operations, mainly due to selling price adjustments, partly offset
by higher performance-related salary expenses and by an increase in
marketing expenses in Canada.
The Company's financial expenses went from $5.1 million in the fourth quarter of 2019 to
$3.7 million in the fourth quarter of
2020. Excluding $0.5 million in
interest expense related to the Sun-Rype acquisition, financial
expenses were down $1.9 million.
This decrease was essentially due to a decrease in the interest
expense on long-term debt.
"Other (gains) losses" went from a $20.9
million gain in the fourth quarter of 2019 to a $1.2 million loss in the fourth quarter of 2020.
This 2020 fourth-quarter loss was essentially due to $1.8 million in foreign exchange losses, partly
offset by $0.4 million in gains
realized following the settlement of various insurance claims,
whereas the 2019 fourth-quarter gain was mainly due to a
$20.8 million gain realized following
the settlement of an insurance claim directly related to the OOB
acquisition price.
Profit before income taxes stood at $33.8
million in the fourth quarter of 2020, down $6.9 million from $40.7
million in the fourth quarter of 2019.
Income tax expense went from $10.3
million in the fourth quarter of 2019 to $9.6 million in the fourth quarter of 2020.
At 28.3%, the 2020 fourth quarter effective income tax rate was
higher than the 25.4% rate in the same quarter of 2019. The 2019
fourth-quarter effective income tax rate reflected the unfavourable
impact of changes to U.S. tax regulations affecting the
deductibility of certain interest expenses and special taxes
related thereto. Excluding this item, the 2020 fourth-quarter
higher effective income tax rate mainly reflects a decrease in the
deductible amounts on the Company's interest expense, adjustments
resulting from an unfavourable variance of the geographic
distribution of the Company's profit before income taxes and a U.S.
withholding tax related to an intercompany dividend.
The 2020 fourth-quarter profit totalled $24.3 million, down $6.1
million from $30.4 million in the fourth quarter of 2019.
The current quarter's results include a profit of $1.2 million from Sun-Rype and an amount of
$0.2 million, net of tax, in
additional financial expenses related to the financing of the
Sun-Rype acquisition while the 2019 fourth-quarter profit included
a $15.3 million gain, net of tax,
realized following the settlement of an insurance claim and
$1.1 million, net of tax, in Sun-Rype
acquisition-related costs. Excluding these items, the Company's
2020 fourth–quarter profit was up $7.1
million year over year.
Profit attributable to the Company's shareholders was
$23.5 million, resulting in basic and
diluted earnings per share of $3.39
for the fourth quarter of 2020. In the fourth quarter of 2019,
profit attributable to the Company's shareholders had totalled
$28.5 million, resulting in basic and
diluted earnings per share of $4.10.
Excluding the impacts of the Sun-Rype acquisition and of the gain
realized in 2019 following the settlement of an insurance claim,
the 2020 fourth-quarter profit attributable to the Company's
shareholders was up $6.8 million year
over year.
Outlook
For the twelve-month period ended December 31, 2020, the Company noted a marked
increase in industry sales volumes in the U.S. and Canadian fruit
juice and drinks markets. Excluding Sun-Rype's sales and foreign
exchange impacts, the Company's sales were up 6.8% in 2020 compared
to 2019. It believes that a non-negligible portion of this increase
could be due to the direct and indirect effects of the pandemic on
consumer behaviour. In addition, the Company observed a change in
its package mix relating to size of products purchased by
consumers, as well as in the distribution channels used by them.
There is no reliable way to determine whether these changes in
purchasing habits are permanent or will fade when COVID-19 is a
thing of the past. Barring any significant external shocks,
including the impacts of the evolution of COVID-19 and the speed in
which the restrictions will be lifted, the Company expects that,
for 2021, it will be able to maintain a sales level similar to
2020. However, the uncertainty surrounding such a forecast is
higher than it is under normal circumstances, as the impact in 2020
of the lockdown and physical distancing measures on demand for the
Company's products is hard to measure.
During 2020, the Company observed improved profitability at its
U.S. operations due to strong demand for its products, although the
competitive environment continues to be challenging at the private
label level in the United States.
However, it notes a rise of inflationary pressures, in particular
on transportation costs affected by both scarcity of labour and
equipment. In Canada, it expects
to benefit from a full year of improvement in the production rate
at one of its specialty food products plants, which was
significantly affected by investment-related activities in 2019 and
in the beginning of 2020.
The Company expects its investment-related cash outflows in 2021
to exceed the average of the last five years. Among other things,
this increase is attributable to the upgrade of its ERP software in
Canada. The Company also expects
to make investments designed to increase its storage capacity at
one of its Canadian plants and the production capacity for
single-serve fruit juices and drinks in the United States. It believes that its use of
investing cash flows could reach between $50
million and $60 million in
2021. These disbursements will have a limited impact on the
Company's profit for 2021 but will affect its cash flows.
About Lassonde
Lassonde Industries Inc. is a North American leader in the
development, manufacture and sale of ready-to-drink juices and
drinks marketed under brands such as Apple & Eve, Everfresh,
Fairlee, Fruité, Graves, Oasis, Old Orchard, Rougemont and Sun-Rype. Lassonde is the
largest producer of fruit juices and drinks in Canada and one of the two largest producers of
store brand shelf-stable fruit juices and drinks in the United States. It is also a major producer
of cranberry sauces. The Company also produces fruit-based snacks
in the form of bars and bites.
Lassonde also develops, manufactures and markets specialty food
products under brands such as Antico and Canton. The Company also
imports and markets selected wines from various countries and
manufactures apple ciders and cider–based beverages.
The Company produces superior quality products through the
expertise of more than 2,700 people working in 17 plants across
Canada and the United States. To learn more, visit
www.lassonde.com.
Caution Concerning Forward-Looking
Statements
In this document and in other documents filed with Canadian
regulatory authorities or in other communications, the Company may
from time to time make written or oral forward-looking statements
within the meaning of applicable securities
legislation. Forward-looking statements notably include
estimates, expectations, forecasts, and projections of future
investment spending, revenues, expenses, earnings, profit,
indebtedness, financial position, losses, upcoming projects,
business and management strategies, and business growth and
expansion. In the context of this document, forward-looking
statements are particularly used to discuss preliminary results,
the rate of sales growth, and profit attributable to shareholders.
The forward-looking statements contained herein are used to help
readers better understand Lassonde's financial position and the
results of its operations as at the dates presented and may not be
appropriate for other purposes. Forward-looking statements can be
recognized by such words as "may," "should," "believes,"
"predicts," "plans," "expects," "intends," "anticipates,"
"estimates," "projects," "objective," "continues," "proposes,"
"targets," or "aims" as well as words and expressions of a similar
nature and whether they are used in the affirmative or negative or
used in the conditional or future tense. Forward-looking statements
also include any statements that do not refer to historical
facts.
By their very nature, forward-looking statements are based on
assumptions and involve inherent risks and uncertainties, both
general and specific in nature. It is therefore possible that the
forecasts, projections and other statements will not be achieved or
will differ significantly from those expressed or implied in such
forward-looking statements or could affect the extent to which a
particular forecast, projection or other statement materializes.
Although Lassonde believes that the expectations reflected in these
forward-looking statements are reasonable, it can give no
assurances that these expectations will prove to be correct.
Readers are cautioned against placing undue reliance on
forward-looking statements when making decisions, as the actual
results could differ considerably from the opinions, plans,
objectives, expectations, forecasts, estimates and intentions
expressed in such forward-looking statements due to various
significant factors. Such factors include, among others, the
economic, industrial, competitive and regulatory environment in
which Lassonde operates or factors that are likely to have an
impact on its operations, its ability to attract and retain
customers, consumers, and qualified staff, the availability and
cost of raw materials and transportation, its operating costs, and
the price of its finished products in the various markets where it
operates.
The Company cautions that the foregoing list of factors is not
exhaustive. For additional information about the risks,
uncertainties, and assumptions that could cause Lassonde's
actual results to differ from its stated expectations, readers may
also consult the "Uncertainties and Principal Risk Factors" section
of the Company's most recent annual MD&A and the other
documents it files from time to time with securities regulators in
Canada and available on sedar.com.
The forward-looking statements contained in this press release
reflect the Company's expectations on this date and are subject to
change after this date. Lassonde does not undertake to update
publicly or to revise these forward-looking statements, whether as
a result of new information, future events or otherwise, unless
required by applicable legislation or regulation.
SEDAR registration number: 00002099
SOURCE Lassonde Industries Inc.