Financial Highlights:
First quarters ended | ||||
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| ∆ | ||
(in millions of dollars, unless otherwise indicated) | $ | $ | $ | |
Sales | 569.8 | 547.3 | 22.5 | |
Gross profit | 149.6 | 136.6 | 13.0 | |
Operating profit | 34.6 | 26.2 | 8.3 | |
Profit | 23.7 | 17.6 | 6.0 | |
Attributable to: | Corporation's shareholders | 23.8 | 17.1 | 6.7 |
Non-controlling interests | (0.1) | 0.5 | (0.7) | |
EPS (in $) | 3.49 | 2.51 | 0.98 | |
Weighted average number of shares outstanding (in thousands) | 6,822 | 6,822 | - | |
Adjusted EBITDA1 | 52.4 | 43.1 | 9.3 | |
Adjusted EPS1 (in $) | 3.68 | 2.48 | 1.20 |
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"Lassonde's first-quarter results reflect ongoing momentum in sales and profit growth, supporting our positive outlook for 2024," said
"Solid pricing execution and rigorous cost management enabled Lassonde to deliver robust 32% growth in operating profit for the first quarter," added
First Quarter Highlights:
- Sales of
$569.8 million . Excluding a$0.8 million unfavourable foreign exchange impact and$8 .2 million in sales from Diamond Estates Wines & Spirits Inc. ("Diamond"), an entity of which Lassonde acquired control onNovember 14, 2023 , the Corporation's sales were up$15.1 million (2.8%) year over year, mainly due to the favourable impact of selling price adjustments inCanada partly offset by a decrease in Canadian sales volume. - Gross profit of
$149.6 million (26.2% of sales). Excluding a$3.3 million unfavourable foreign exchange impact and$3 .1 million in gross profit from Diamond, gross profit was up$13 .2 million from the same quarter last year. This net increase results mainly from the following items:- A favourable impact of selling price adjustments to offset the cost increases of certain inputs, essentially orange concentrates; and
- A favourable impact of a change in the sales mix.
- Operating profit of
$34 .6 million, up$8.3 million from the same quarter last year. This net increase results mainly from a higher gross profit partly offset by$4 .0 million in additional selling and administrative expenses in the first quarter of 2024 coming from Diamond. - Excluding items impacting comparability, adjusted EBITDA1 was
$52.4 million (9.2% of sales), up$9.3 million from the same quarter last year. - Profit attributable to the Corporation's shareholders of
$23 .8 million, resulting in EPS of$3.49 , up$6.7 million and$0.98 , respectively, from the same quarter in 2023. Excluding items impacting comparability, adjusted EPS1 was$3.68 compared to$2.48 in the same quarter last year. - As at
March 30, 2024 , the Corporation had total assets of$1,721.2 million versus$1,665.7 million as atDecember 31, 2023 , a 3.3% increase arising mainly from a higher foreign exchange conversion rate as atMarch 30, 2024 , from an increase in property, plant and equipment and from higher inventories. - As at
March 30, 2024 , long-term debt, including the current portion, stood at$219.8 million , representing a net debt to adjusted EBITDA1 ratio of 1.01:1. This is up$9 .3 million fromDecember 31, 2023 . - Operating activities generated
$11 .3 million in cash compared to$4 .9 million used in the same quarter last year. This increase in cash inflows was essentially due to a change in non-cash operating working capital items, which used$9 .8 million less cash than in the same quarter of 2023, to a higher operating profit and to a$4.7 million favourable change in settlements of derivative instruments, partly offset by a$6 .2 million increase in net income tax paid. - Dividend of
$1.00 per share, paid onMarch 15, 2024 .
Outlook
Lassonde continues to expect the largest factors impacting its performance in fiscal 2024 will be the financial health of consumers and the inflationary environment. As a result, the Corporation is currently retaining the following assumptions for its fiscal year 2024:
Sales growth rate
- For 2024, barring any significant external shocks and excluding foreign exchange impacts, Lassonde expects:
- a sales growth rate in the mid-single-digit range, mainly driven by the run rate effect of its selling price adjustments together with the volume growth expected in the second half of the year; and
- a slight decrease in sales volume in the first half of the year with sequential improvement in the second half resulting from the combined impact of the following items: (i) the pace of the demand build back strategy in
the United States ("U.S.") for the Corporation's products; (ii) additional volumes available following the deployment of its single-serve line inNorth Carolina ; and (iii) the overall stabilization of demand.
- The Corporation is closely monitoring the evolution of consumer food habits and demand elasticity in a context of ongoing inflation.
Key commodity and input costs
- Lassonde's input costs have increased significantly since 2021. The prices for orange juice and orange concentrates remain an area of focus.
- Given that a large portion of the raw material purchases made by Lassonde's Canadian operations are in
U.S. dollars, a strengthening of this currency against the Canadian dollar results in a higher cost for products sold in the Canadian market. Furthermore, the Corporation is expecting an unfavourable foreign exchange impact for 2024 when considering its hedged positions.
Expenses, including items impacting the comparability between the periods
- The Corporation's performance-related compensation expenses are expected to return in 2024 to levels below those observed in 2023.
- During 2024, Lassonde plans to continue deploying its Strategy, optimizing its business and upgrading its key systems and technology infrastructures to improve its efficiency. Planned spending in support of these elements is expected to reach up to
$5.0 million in 2024.
Effective tax rate
- Effective tax rate of about 26.5% for 2024, excluding the impact on the tax rate of Diamond's results.
Working capital
- The Corporation's
Days Operating Working Capital 1 remains close to its historical levels and only incremental improvements are expected for this ratio over the course of 2024. However, this outlook might be impacted by (i) opportunistic decisions to secure inventory cost ahead of potential additional price increases from suppliers, (ii) the objective of ensuring an adequate service level, or (iii) the decisions to counter new potential supply chain disruptions.
Capital expenditures
- The Corporation's overall capital expenditures program for 2024 is estimated to reach up to 5.0% of its sales as it continues to deploy capital in support of its Strategy. This estimate depends on the rate of progress of certain large capital projects and on the evolution of the macroeconomic environment.
- The Corporation has not yet finalized the determination of its buy versus build path in relation to supporting the growth of its specialty foods division and it is evaluating various investment scenarios to ensure the competitiveness of its
U.S. beverage divisions. Accordingly, there are no capital expenditures associated with these elements in the current outlook. - The new capital assets will be financed, to the extent possible, using the Corporation's operating cash flows, although the Corporation may also turn to borrowing if interest rates and conditions prove advantageous.
The above forward-looking statements exclude items related to Diamond Estates Wines & Spirits Inc. and have been prepared using the following key assumptions: currently observed geopolitical situation and macroeconomic trends, including employment, inflation and interest rates; a stable exchange rate between the
Dividend
In accordance with the Corporation's dividend policy, the Board of Directors declared today a quarterly dividend of
Conference Call to Discuss First Quarter 2024 Financial Results | |
OPEN TO: | Investors, analysts, and all interested parties |
DATE: | |
TIME: | |
CALL: | 647-484-8814 (for international participants) |
1-844-763-8274 (for North American participants) |
A live audio broadcast of the conference call will be available on the Corporation's website, on the Investors page or here: https://www.gowebcasting.com/13228. A replay of the webcast will remain available at the same link until midnight,
The financial measures or ratios, further described below, do not constitute standardized financial measures or ratios in accordance with the financial reporting framework used to prepare the Corporation's financial statements. These non-IFRS measures should not be considered in isolation or as a substitute for financial measures prepared in accordance with IFRS. Comparing them to similar financial measures or ratios presented by other issuers may not be possible.
The following table contains a list, description, and quantification of items impacting the comparability of the financial performance between the periods:
First quarters ended | |||
|
| ||
(in millions of dollars) | $ | $ | |
Costs related to the Strategy | 1.2 | 0.5 | |
Implementation costs of new key systems | 0.2 | 0.6 | |
Business optimization | 0.4 | - | |
Adjustment related to non-recoverable sales taxes | - | 0.6 | |
Sum of items impacting comparability on operating profit and EBITDA: | 1.8 | 1.7 | |
Item impacting comparability on "Other (gains) losses": | |||
Gain related to the preliminary settlement of an insurance claim | - | (2.1) | |
Tax impact of previous items | (0.5) | 0.1 | |
Impact on profit | 1.3 | (0.3) | |
Attributable to: | Corporation's shareholders | 1.2 | (0.2) |
Non-controlling interests | 0.1 | (0.1) |
EBITDA is a financial measure used by the Corporation and investors to assess the Corporation's capacity to generate future cash flows from operating activities and pay financial expenses. Adjusted EBITDA is a financial measure used by the Corporation to compare EBITDA between periods by excluding items impacting comparability. EBITDA consists of the sum of operating profit and of the "depreciation of property, plant and equipment and amortization of intangible assets" item and "(Gains) losses on capital assets" item, as shown in the Consolidated Statement of Cash Flows. Adjusted EBITDA is calculated by adjusting the EBITDA with items considered by management as impacting the comparability between periods.
First quarters ended | ||
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| |
(in millions of dollars) | $ | $ |
Operating profit | 34.6 | 26.2 |
Depreciation of property, plant and equipment and amortization of intangible assets | 16.1 | 15.1 |
(Gains) losses on capital assets | (0.1) | - |
EBITDA | 50.6 | 41.4 |
Sum of items impacting comparability | 1.8 | 1.7 |
Adjusted EBITDA | 52.4 | 43.1 |
Adjusted profit attributable to the Corporation's shareholders and adjusted EPS are financial measures used by the Corporation to compare profit attributable to the Corporation's shareholders and EPS between periods by excluding items impacting comparability. They are calculated by adjusting them with items considered by management as impacting the comparability between periods.
First quarters ended | ||
|
| |
(in millions of dollars, unless otherwise indicated) | $ | $ |
Profit attributable to the Corporation's shareholders | 23.8 | 17.1 |
Sum of items impacting comparability | 1.2 | (0.2) |
Adjusted profit attributable to the Corporation's shareholders | 25.1 | 16.9 |
Weighted average number of shares outstanding (in thousands) | 6,822 | 6,822 |
Adjusted EPS (in $) | 3.68 | 2.48 |
Net debt to adjusted EBITDA is a financial measure used by the Corporation to assess its ability to pay off existing debt and define available borrowing capacity. To calculate the net debt to adjusted EBITDA ratio, net debt is divided by the sum of adjusted EBITDA from the last four quarters. Net debt represents long-term debt, including the current portion, less the "Cash and cash equivalents" item, as they are presented in the Corporation's Consolidated Statement of Financial Position.
As at | As at
| |
(in millions of dollars, except the net debt to adjusted EBITDA ratio) | $ | $ |
Current portion of long-term debt | 29.6 | 18.5 |
Long-term debt | 190.2 | 192.0 |
Less: Cash and cash equivalents | (1.6) | (19.8) |
Net debt | 218.2 | 190.7 |
Sum of adjusted EBITDA from the last four quarters | 216.5 | 207.1 |
Net debt to adjusted EBITDA ratio | 1.01:1 | 0.92:1 |
Days operating working capital is a financial efficiency measure used by the Corporation to represent the number of days of sales tied up as operating working capital. To calculate this financial measure, operating working capital is divided by the last quarter's sales, as they are presented in this press release, and multiplied by 91 days. Operating working capital consists of the sum of trade accounts receivable, discounts receivable and inventories, less trade payables and accrued expenses and trade spending, as they are presented in the accompanying notes to the Corporation's interim consolidated financial statements.
The Corporation operates 18 plants located in
The Corporation is active in two market segments:
- Retail sales consist of sales to food retailers and wholesalers such as supermarket chains, independent grocers, superstores, warehouse clubs, major pharmacy chains; and
- Food service sales consist of sales to restaurants, hotels, hospitals, schools, and wholesalers serving these institutions.
This document contains "forward-looking information" and the Corporation's oral and written public communications that do not constitute historical fact may be deemed to be "forward-looking information" within the meaning of applicable Canadian securities law. These forward-looking statements include, but are not limited to, statements on the Corporation's objectives and goals and are based on current expectations, projections, beliefs, judgments, and assumptions based on information available at the time the applicable forward-looking statement was made and considering the Corporation's experience combined with its perception of historical trends.
Forward-looking statements are typically identified by words such as "anticipate", "continue", "estimate", "expect", "may", "will", "project", "should", "could", "would", "believe", "plan", "intend", "design", "target", "objective", "strategy", "likely", "potential", "outlook", "aim", "goal", and similar expressions suggesting future events or future performance in addition to the negative forms of these terms or any variations thereof. All statements other than statements of historical fact included in this document may constitute a forward-looking statement.
In this document, forward-looking statements include, but are not limited to, those set forth in the above "Outlook" section, which also presents some (but not all) of the key assumptions used in determining the forward-looking statements. Some of the forward-looking statements in this report, such as statements concerning sales volume and sales growth rate, key commodity and input costs, expenses, including items impacting the comparability between the periods, effective tax rate, working capital, and capital expenditures may be considered financial outlooks for the purposes of applicable Canadian securities regulations. These financial outlooks are presented to evaluate potential future earnings and anticipated future uses of cash flows and may not be appropriate for other purposes.
Various factors or assumptions are applied by the Corporation in elaborating the forward‑looking statements. These factors and assumptions are based on information currently available to the Corporation, including information obtained by the Corporation from third parties. Readers are cautioned that the assumptions considered by the Corporation to support these forward-looking statements may prove to be incorrect in whole or in part.
The significant factors that could cause actual results to differ materially from the conclusions, forecasts or projections reflected in the forward-looking statements contained herein include, among other things, risks associated with the following: deterioration of general macroeconomic conditions, including international conflicts, which can lead to negative impacts on the Corporation's suppliers, customers, and operating costs; the availability of raw materials and packaging and related price variations (including the prices of orange juice and orange concentrates, key commodities for the Corporation, which have continued to trade above historical highs for the past several months and show no sign of favourable change); loss of key suppliers or supplier concentration; disruptions in or failures of the Corporation's information technology systems, as well as the development and performance of technology; cyber threats and other information-technology-related risks leading to business disruptions, confidentiality, data integrity, and business email compromise-related fraud; the successful deployment of the Corporation's multi-year strategy (defined in Section 4 - "Multi-Year Strategy" of the Corporation's MD&A for the first quarter ended
The Corporation's ability to achieve its sustainability targets and goals is further subject to, among other factors, its ability to access and implement all technology necessary to achieve them as well as the development, deployment and performance of technology and environmental regulation. The Corporation's ability to achieve its environmental, social and governance risk commitments is further subject to, among other factors, its ability to leverage its supplier relationships.
The assumptions, expectations, and estimates involved in preparing forward-looking statements and risks and uncertainties that could cause actual results to differ materially from forward-looking statements are discussed in the Corporation's materials filed with the Canadian securities regulatory authorities from time to time, including information about risk factors that can be found in Section 19 - "Uncertainties and Principal Risk Factors" of the Corporation's MD&A for the year ended
All forward-looking statements included herein speak only as of the date hereof. Unless required by law, the Corporation does not undertake any obligation to publicly update or revise forward-looking statements, whether as a result of new information, future events, or otherwise. All forward-looking statements contained herein are wholly and expressly qualified by this cautionary statement.
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1 This measure does not constitute a standardized financial measure in accordance with the financial reporting framework used to prepare the Corporation's financial statements. Comparing it to a similar financial measure presented by other issuers may not be possible. Refer to Section "Financial Measures Not in Accordance with IFRS" of this press release for more information, including the definition and composition of the measure or ratio as well as the reconciliation to the most comparable measure in the financial statements, as applicable. |
SOURCE Industries Lassonde inc.
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