ROUGEMONT, QC, May 13, 2022
/CNW Telbec/ - Lassonde Industries Inc. (TSX: LAS.A) ("Lassonde" or
the "Corporation") posted sales of $509.0
million in the first quarter of 2022, up 9.1% year over
year. The Corporation's operating profit for the first quarter of
2022 totalled $22.4 million, down
from $31.4 million in the same
quarter last year. Excluding $2.4
million in expenses related to the multi-year strategy
discussed below, operating profit was down $6.6 million. The 2022 first‑quarter profit
attributable to the Corporation's shareholders totalled
$14.8 million, down $5.3 million year over year.
|
Financial
highlights
(in thousands of
$)
|
|
First
quarters
ended
|
|
|
April
2,
2022
|
|
|
|
April 3,
2021
|
Sales
|
$
|
509,047
|
|
|
$
|
466,794
|
Operating
profit
|
|
22,419
|
|
|
|
31,382
|
Profit before income
taxes
|
|
20,216
|
|
|
|
27,722
|
Profit attributable to
the Corporation's shareholders
|
|
14,789
|
|
|
|
20,090
|
Basic and diluted
earnings per share (in $)
|
$
|
2.14
|
|
|
$
|
2.90
|
|
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 2, 2022
are available on the SEDAR website at www.sedar.com and on the
website of Lassonde Industries Inc.
|
"First-quarter results reflect the strength of our national
brand products across North
America. We increased our sales volume and selling price
adjustments allowed us to offset inflationary pressures on the cost
of our inputs. However, additional increases in transportation
costs incurred to deliver products to clients had a negative impact
on our profitability. During the first quarter, we launched our
multi-year strategy, and I am fully confident that the initiatives
put forward will be beneficial for our clients while creating
further value for our shareholders," said Nathalie Lassonde, Chief Executive Officer and
Vice-Chair of the Board of Directors of
Lassonde Industries Inc.
"I am confident that our recently announced investments will
enable us to further strengthen our leadership position in the
juice and drink industry and improve the Corporation's performance
over the long term. A key early priority includes the
revitalization of our U.S. business by improving our production
costs and capabilities while also fortifying our leadership in
Canada with the investment in a
new aseptic production line. We have a talented and dedicated team
that proudly live our values every day and these efforts will
continue to provide them the tools required to drive long
profitable growth and value to our customers," added Vincent R.
Timpano, President and Chief Operating Officer of Lassonde
Industries Inc.
Multi-Year Strategy
In the "Outlook" section of its 2021 annual MD&A, the
Corporation announced the launch of a multi-year strategy to drive
long-term value, accelerate growth, as well as improve overall
margins and profitability. In 2022, this strategic initiative is
expected to result in related operating expenses ranging between
$10 million and $15 million. In
addition, the initiative is supported by overall capital
expenditures targeted at approximately $100
million in 2022, which represents approximately the double
of historical levels.
The first phase of the strategy, in 2022, focuses primarily on
three key areas: 1) Strategic review to establish the
cornerstone of the Corporation's growth plan for the coming years;
2) Revitalization of U.S. operations ("Project Eagle") to
optimize and increase production capacity as well as increase the
operational efficiency; and 3) Implementation of new management
systems and upgrading of technology infrastructures.
During the first quarter of 2022, the Corporation started its
strategic review and substantially progressed the diagnostic step
of its Project Eagle. It incurred expenses of $2.4 million related to these activities.
During the first quarter of 2022, the Corporation made capital
expenditures of $2.2 million in
growth and optimization projects. These investments include an
ongoing project aimed at improving productivity and production
capacity in Canada. It also
invested $1.5 million in technology
projects.
Financial Results
For the first quarter of 2022, the Corporation's sales totalled
$509.0 million, up $42.2 million (9.1%) from $466.8 million in the same quarter of 2021. This
increase was essentially due to selling price adjustments that had
a favourable impact on sales of private label and national brand
products as well as to an increase in the sales volume of the
Corporation's national brands.
The Corporation's operating profit for the first quarter of 2022
totalled $22.4 million, down from
$31.4 million in the first quarter of
2021. Excluding $2.4 million in
expenses related to the multi-year strategy, operating profit was
down $6.6 million. This decrease came
mainly from a $10.9 million increase
in transportation costs incurred to deliver products to the
Corporation's clients resulting from higher tariffs and fuel
surcharges, partly offset by a higher gross margin. The Canadian
operations generated a higher gross margin as a result of (i) the
favourable impact of selling price adjustments on the Corporation's
national brand sales and (ii) a favourable foreign exchange impact
that affected purchases of raw materials in foreign currencies,
partly offset by an increase in the cost of inputs, including an
increase in the cost of transporting them to the Corporation's
plants. As for the U.S. operations, gross margin increased
slightly year over year, reflecting the favourable impact of
selling price adjustments, partly offset by (i) a decrease in sales
volume of private label products and an unfavourable impact from
this decrease on the allocation of manufacturing overhead to
product costs, and by (ii) an increase in the cost of inputs,
including an increase in the cost of transporting them to the
Corporation's plants.
Profit attributable to the Corporation's shareholders totalled
$14.8 million, resulting in basic and
diluted earnings per share of $2.14
for the first quarter of 2022 compared to $20.1 million and $2.90, respectively, for the same quarter in
2021.
For the first quarter of 2022, operating activities used
$20.6 million in cash, while
they had generated $4.4 million in
cash during the same quarter of 2021. This increase in cash
outflows is mainly explained by a change in non-cash operating
working capital items that used $43.9
million in cash during the first quarter of 2022 compared to
$22.7 million in cash used in the
same period last year.
As at April 2, 2022, the
Corporation's long-term debt, including the current portion, stood
at $214.9 million compared to
$175.4 million at year-end 2021.
Outlook
According to industry data, sales volume for the Canadian fruit
juice and drink market increased during the first quarter of 2022
when compared to the first quarter of 2021, whereas sales volume
for the U.S. fruit juice and drink market decreased. Lassonde's
sales were up 9.1% in the first quarter of 2022 compared to the
same quarter of 2021, mainly due to selling price adjustments.
However, its U.S. operations continue to endure labour-related
challenges in addition to those related to supply that the
Corporation as a whole continues to address. These challenges are
still impacting the Corporation's ability to fully meet customer
demand. Despite selling price adjustments that successfully offset
significant increases in input costs, Lassonde's profitability
decreased in the first quarter of 2022 due to recent inflationary
pressure that is strongly affecting transportation costs.
As mentioned above, in the first quarter of 2022, Lassonde
launched a multi-year strategy to drive long-term value, accelerate
growth, as well as improve overall margins and profitability.
During the last nine months of 2022, Lassonde plans to progress the
work undertaken to deploy its strategic review, the revitalization
of its U.S. operations and the upgrade of its technology
infrastructures. It also plans to start implementing new demand
planning and transportation management systems in the United States.
Based on industry projections, sales volumes for the fruit juice
and drink markets in Canada and
the U.S. are expected to slightly decrease in 2022. Despite this
anticipated decrease, Lassonde expects to maintain moderate sales
growth in 2022. In the second quarter of 2022, profitability will
still be under pressure as the Corporation will continue to address
ongoing supply chain issues, labour challenges, and continued
inflationary pressures, which are particularly affecting packaging,
orange concentrate and transportation costs. Early transformation
initiatives in the U.S. and the run-rate effect of selling price
adjustments are expected to deliver benefits in the second half of
the year, which should offset a softer first-half performance.
Dividend
In accordance with the Corporation's dividend policy, the Board
of Directors today declared a quarterly dividend of $0.70 per share, payable on June 15, 2022 to all registered holders of Class
A and Class B shares on May 26, 2022.
On an annualized basis, this dividend represents approximately 25%
of the 2021 profit attributable to the Corporation's shareholders.
This dividend is an eligible dividend.
Change to the Board of
Directors
The Corporation announces that Ms. Geneviève Fortier has
notified them of her withdrawal from the Corporation's Board of
Directors (the "Board") and that she will not be able to stand for
re-election as director at the Corporation's Annual General Meeting
of Shareholders on May 20, 2022 (the
"Meeting"). Ms. Fortier has been appointed Chair of the Board of
Directors of Investissement Québec ("IQ"), a Quebec government corporation whose mission is
to contribute to the economic development of Quebec. Given IQ's role with Quebec and international businesses and Ms.
Fortier's position within the organization, she will no longer be
able to sit on the Board as is the case for those of other private
or public businesses who have or who may potentially have dealings
with IQ or that may receive financing from the Government of
Quebec.
Mr. Pierre-Paul Lassonde,
Chairman of the Board, said: "On behalf of the Corporation, I would
like to extend our sincere gratitude to Geneviève Fortier for her
excellent contribution to the Corporation. We wish her all the best
in her new position within Investissement Québec."
Following the withdrawal of Ms. Fortier's nomination, the Board
of Directors has set at seven (7) the number of directors to be
elected at the meeting. The revised list of nominees for the
position of director that will be submitted to shareholders at the
Meeting will include the other nominees described in the
Corporation's Management Proxy Circular, dated March 25, 2022, available under the Corporation's
profile on SEDAR (www.sedar.com). All other matters to be
considered at the Meeting, described in the circular, remain
unchanged.
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, 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 Corporation also produces fruit-based
snacks in the form of bars and bites.
Lassonde also develops, manufactures and markets specialty food
products such as pasta sauces and soups, mainly under private
label, as well as fondue broths and sauces under the brand Canton.
The Corporation also imports and markets selected wines from
various countries and manufactures apple ciders and cider-based
beverages.
The Corporation 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 Corporation
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 Corporation 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 Corporation'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 Corporation'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.