ROUGEMONT, QC, May 7, 2021 /CNW Telbec/ - Lassonde
Industries Inc. (TSX: LAS.A) ("Lassonde") posted sales of
$466.8 million in the first
quarter of 2021, down 1.2% year over year. Excluding a $16.0 million unfavourable foreign exchange
impact, sales were up 2.2% year over year. The Company's operating
profit for the first quarter of 2021 totalled $31.4 million, up $1.1 million from $30.3 million in operating profit in the
same quarter last year. The 2021 first–quarter profit
attributable to the Company's shareholders totalled $20.1 million, down $2.8 million year over year.
Financial
highlights
(in thousands of
$)
|
First
quarters
ended
|
|
April
3,2021
|
March 28,
2020
|
Sales
|
$
|
466,794
|
$
|
472,446
|
Operating
profit
|
|
31,382
|
|
30,348
|
Profit before income
taxes
|
|
27,722
|
|
28,476
|
Profit attributable
to the Company's shareholders
|
|
20,090
|
|
22,947
|
Basic and diluted
earnings per share (in $)
|
$
|
2.90
|
$
|
3.31
|
Note:
These are financial highlights only. Management's Discussion and
Analysis, the unaudited interim condensed consolidated financial
statements and notes thereto for the quarter ended April 3, 2021
are available on the SEDAR website at www.sedar.com and on the
website of Lassonde Industries Inc.
|
"Although industry volumes and our sales are slightly down from
the same period in 2020, they remain up from historical averages.
It is also important to remember that sales in March 2020 were helped by an accumulation of food
reserves related to the pandemic. We are pleased with our
profitability level despite a marked increase in transportation and
warehousing costs. We are seeing the effect of inflationary
pressures on our costs and are gradually adjusting our prices in
order to neutralize such effects on our profitability. Finally, I
would like to thank our employees who, by their considerable effort
and their resilience, contribute to pursuing our mission during
these exceptional times," said Nathalie
Lassonde, Chief Executive Officer and Vice Chairman of the
Board of Directors of
Lassonde Industries Inc.
Financial results
For the first quarter of 2021, the Company's sales totalled
$466.8 million, down $5.6 million or 1.2% from $472.4 million in the same quarter of 2020.
Excluding a $16.0 million
unfavourable foreign exchange impact, the Company's first-quarter
sales were up $10.4 million or 2.2%
year over year. This increase was largely due to an increase in
sales of private label products and a favourable change in the
sales mix of national brands, partly offset by a decrease in
Canada in the sales volume of
national brands. It is important to remember that sales for
March 2020 benefited from an unusual
increase in volume resulting from the accumulation of food reserves
related to the pandemic.
The Company's operating profit for the first quarter of 2021
totalled $31.4 million, up
$1.1 million from $30.3 million in the same quarter last year. This
increase came from an increased profitability from the Canadian
operations, mainly due to (i) a higher gross margin, explained by a
favourable change in the sales mix and an improvement in the
production rate at one of the Company's plants, which had been
slowed in 2020 by investment related activities, and to (ii) lower
selling and marketing expenses, partly offset by higher warehousing
costs. As for the U.S. operations, the profitability is down
essentially due to higher transportation and warehousing costs,
partly offset by a higher gross margin attributable to a favourable
change in the sales mix.
The Company's financial expenses went from $5.0 million in the first quarter of 2020 to
$3.0 million in the first quarter of
2021. This decrease was essentially due to a decrease in the
interest expense on long term debt resulting from a lower debt
level.
"Other (gains) losses" went from a $3.4
million gain in the first quarter of 2020 to a $0.5 million loss in the first quarter of 2021.
This 2021 first-quarter loss was essentially due to a $0.4 million loss resulting from a change in the
fair value of financial instruments, whereas the 2020 first-quarter
gain was mainly due to $3.1 million in foreign exchange gains
resulting from the impact of a strong appreciation at quarter end
of the U.S. dollar against the Canadian dollar.
Profit before income taxes stood at $27.7
million in the first quarter of 2021, down $0.8 million from $28.5
million in the first quarter of 2020.
Income tax expense went from $4.7
million in the first quarter of 2020 to $7.3 million in the first quarter of 2021.
At 26.2%, the 2021 first-quarter effective income tax rate is
significantly higher than the 16.7% rate in the same quarter of
2020. The 2020 first-quarter effective income tax rate reflected
the impact of incentive measures adopted by the U.S. government to
help businesses deal with the COVID-19 crisis. Excluding this item,
the 2021 first-quarter effective income tax rate remains slightly
higher than the adjusted rate in the same quarter of 2020 and
mainly reflects a decrease in the deductible amounts on the
Company's interest expense.
The 2021 first-quarter profit totalled $20.5 million, down $3.2
million from $23.7 million in the first quarter of
2020.
Profit attributable to the Company's shareholders was
$20.1 million, resulting in basic and
diluted earnings per share of $2.90
for the first quarter of 2021. In the first quarter of 2020, profit
attributable to the Company's shareholders had totalled
$22.9 million, resulting in basic and
diluted earnings per share of $3.31.
The Company's operating activities generated $4.4 million in cash during the first quarter of
2021, while they had generated $24.9
million in cash during the same quarter last year. Financing
activities generated $3.1 million in
cash during the first quarter of 2021, while they had generated
$110.3 million in the same quarter of
2020. During the first quarter of 2020, the cash inflows related to
the financing of the acquisition of Sun-Rype Products Ltd. and of
two of its affiliates ("Sun-Rype") were $89.3 million, leaving a difference of
$17.9 million on a comparable basis.
Investing activities used $12.6
million in cash during the first quarter of 2021 compared to
$93.2 million used in the same
quarter of 2020. Excluding the $82.8 million in cash flows related to the
Sun-Rype acquisition in 2020, investing activities used
$2.2 million more cash than during
the first quarter of 2020. At the end of the first quarter of
fiscal 2021, the Company reported a cash and cash equivalents
balance of $2.8 million and the bank
overdraft balance was $1.2 million, whereas, at the end of the
first quarter of 2020, the cash and cash equivalents balance was
$31.7 million and the Company
reported no bank overdraft.
Outlook
For the three-month period ended April 3,
2021, the Company noted a slight decrease in industry sales
volumes in the U.S. and Canadian fruit juice and drinks markets. It
recalls that sales for March 2020
benefited from an unusual increase in volume resulting from the
accumulation of food reserves related to the pandemic. Excluding
foreign exchange impacts, the Company's sales were up 2.2% in the
first quarter of 2021 compared to the same period last year.
Barring any significant external shocks, including foreign exchange
impacts and the impacts of the evolution of COVID–19 and the speed
at 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 arrival of new
variants could postpone the return to complete deconfinement. In
addition, the level of food services activity could be affected by
a higher proportion of teleworking than historically, even once the
pandemic becomes a thing of the past.
The Company observed a reduction in the profitability of its
U.S. operations during the first quarter of 2021 due to a sharp
increase in transportation and warehousing costs, among other
factors. The transportation challenges are attributable to an
increase in demand exacerbated by a lack of truckers and equipment.
The Company believes that this situation is likely to continue, at
least until the end of 2021. Moreover, the combined impact of the
current pandemic and the beginning of economic recovery following a
gradual reduction in lockdown measures in the United States are creating strong
pressures on the availability of workers and inflationary pressures
affecting certain raw materials, such as PET resin. To offset these
inflationary pressures, the Company believes it will be able to
gradually adjust its sales prices in the second and third quarters,
however the full effect of these price increases will not be felt
before the third quarter due to the time required for them to come
into effect.
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
www.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.