ROUGEMONT, QC, Aug. 13, 2021 /CNW Telbec/ - Lassonde
Industries Inc. (TSX: LAS.A) ("Lassonde") posted sales of
$469.3 million in the second
quarter of 2021, down 5.8% year over year. Excluding a $32.8 million unfavourable foreign exchange
impact, sales were up 0.8% year over year. The Company's operating
profit for the second quarter of 2021 totalled $29.9 million, down $12.8 million from $42.7 million in operating profit in the
same quarter last year. The 2021 second–quarter profit
attributable to the Company's shareholders totalled $18.8 million, down $7.2 million year over year.
Financial
highlights
(in thousands of
$)
|
Second
quarters
ended
|
|
July
3,
2021
|
June 27,
2020
|
Sales
|
$
469,292
|
|
$ 498,207
|
|
Operating
profit
|
29,932
|
|
42,658
|
|
Profit before income
taxes
|
25,839
|
|
37,096
|
|
Profit attributable
to the Company's shareholders
|
18,764
|
|
25,998
|
|
Basic and diluted
earnings per share (in $)
|
$
2.71
|
|
$
3.75
|
|
|
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 July 3, 2021 are
available on the SEDAR website at www.sedar.com and on the website
of Lassonde Industries Inc.
|
"Like other players in the industry, the Company is facing a
series of challenges such as labour scarcity, raw material
availability, and inflationary pressures that are affecting
transportation and input costs. We have gradually adjusted our
selling prices to neutralize the impacts of these factors on our
profitability, but further adjustments will be necessary as
inflationary pressures intensify. I am confident, however, that our
teams will demonstrate the agility needed to navigate such an
environment and to help the Company overcome these challenges,"
said Nathalie Lassonde, Chief
Executive Officer and Vice Chairman of the Board of
Directors of Lassonde Industries Inc.
Financial results
For the second quarter of 2021, the Company's sales totalled
$469.3 million, down
$28.9 million or 5.8% from
$498.2 million in the same
quarter of 2020. It is important to remember that, in April
and May 2020, sales had benefited
from an unusual volume increase resulting from an accumulation of
food reserves triggered by the pandemic. Excluding a $32.8 million unfavourable foreign exchange
impact, the Company's second-quarter sales were up $3.9 million or 0.8% year over year. This
increase was largely due to a higher sales volume of national
brands and to an increase in sales of private label products in
Canada, partly offset by lower
sales of private label products in the
United States. For the first six months of 2021, sales
totalled $936.1 million, down
3.6% from $970.7 million in the
first six months of 2020.
The Company's operating profit for the second quarter of 2021
totalled $29.9 million, down
$12.8 million from $42.7 million in the same quarter last
year. This decrease came mainly from a lower gross margin
realized by U.S. operations. This lower gross margin is explained
by (i) a decrease in sales of private label products due to a
slower production rate in certain plants related, among other
factors, to labour scarcity, which had an unfavourable impact on
the allocation of the manufacturing overhead costs on the cost of
the products and by (ii) an increase in the cost of certain inputs.
As for the Canadian operations, the gross margin was higher, mainly
reflecting an increase in sales volume, partly offset by an
increase in the cost of certain raw materials. Operating profit was
also affected by higher transportation and warehousing costs, an
unfavourable foreign exchange impact, and an increase in marketing
expenses in Canada. The Company's
operating profit for the first six months of 2021 totalled
$61.3 million, down $11.7 million from $73.0 million in the first six months of
2020.
The Company's financial expenses went from $4.5 million in the second quarter of 2020
to $2.8 million in the second
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. For the six-month periods, financial expenses
went from $9.6 million in 2020
to $5.8 million in 2021.
"Other (gains) losses" went from a $0.7 million loss in the second quarter of
2020 to a $1.0 million loss in
the second quarter of 2021. This 2021 second-quarter loss was
essentially due to a loss resulting from a change in the fair value
of financial instruments, whereas the 2020 second-quarter loss was
mainly due to $0.8 million in
foreign exchange losses. For the six-month periods, the "Other
(gains) losses" item was a $1.5 million loss in 2021 compared to a
$2.7 million gain in 2020.
Profit before income taxes totalled $25.8 million in the second quarter of 2021,
down $11.3 million from
$37.1 million in the second
quarter of 2020. For the first six months of 2021, profit
before income taxes stood at $53.6 million, down $12.0 million from $65.6 million in the first six months of
2020.
Income tax expense went from $9.6 million in the second quarter of 2020
to $6.8 million in the second
quarter of 2021. At 26.4%, the 2021 second-quarter effective
income tax rate is higher than the 25.8% rate in the same quarter
of 2020. This higher 2021 effective income tax rate mainly reflects
a decrease in the deductible amounts on the Company's interest
expense. Income tax expense for the first six months of 2021 stood
at $14.1 million, down
$0.2 million from $14.3 million in the first six months of
2020.
The 2021 second-quarter profit totalled $19.0 million, down $8.5 million from $27.5 million in the second quarter of
2020. For the first six months of 2021, profit totalled
$39.5 million versus profit of
$51.3 million in the first six
months of 2020.
Profit attributable to the Company's shareholders was
$18.8 million, resulting in
basic and diluted earnings per share of $2.71 for the second quarter of 2021. In the
second quarter of 2020, profit attributable to the Company's
shareholders had totalled $26.0 million, resulting in basic and
diluted earnings per share of $3.75.
For the first six months of 2021, profit attributable to the
Company's shareholders totalled $38.9 million, resulting in basic and
diluted earnings per share of $5.60
and, in the same six-month period of 2020, it had totalled
$48.9 million, resulting in
basic and diluted earnings per share of $7.06.
The Company's operating activities generated $46.9 million in cash during the second
quarter of 2021, while they had generated $78.1 million in cash during the same
quarter last year. Financing activities used $43.0 million in cash during the second
quarter of 2021, while they had used $98.7 million in the same quarter of 2020.
Investing activities used $8.1 million in cash during the second
quarter of 2021 compared to $5.7 million used in the same quarter of
2020. At the end of the second quarter of fiscal 2021, the Company
reported a cash and cash equivalents balance of $3.5 million and a bank overdraft balance of
$5.9 million, whereas, at the
end of second quarter 2020, the cash and cash equivalents balance
was $5.3 million and the bank
overdraft was nil.
Outlook
The Company noted a very slight increase in industry sales
volumes in the U.S. and Canadian fruit juice and drink markets for
the three-month period ended July 3, 2021 when compared
to the same period in 2020, which reflected a more significant
increase compared to the equivalent period in 2019. Excluding
foreign exchange impacts, the Company's sales were up 1.5% in the
first six months of 2021 compared to the same period last year.
Barring any significant external shocks, including foreign exchange
impacts, the Company expects that, for the last six months of 2021,
it will be able to maintain a sales level similar to the same
period in 2020. However, the uncertainty surrounding such a
forecast is higher than it is under normal circumstances because of
the following factors: (i) the impact of the evolution of COVID-19,
including the arrival of new variants, on the deconfinement
schedule in certain regions of North
America and (ii) the effect of the current crisis affecting
the global supply chain on the availability of certain inputs,
including the main concentrates and types of packaging used by the
Company. It is also paying close attention to the movements in its
business environment, such as recent announcements involving some
of its main competitors, and their potential impacts on the
industry.
The Company observed a reduction in the profitability of its
U.S. operations during the first six months of 2021 due to
inflationary pressures affecting, among other costs, transportation
costs affected by the global supply chain crisis, warehousing
costs, and the cost of certain raw materials. Moreover, the
combined impact of the current pandemic and the beginning of an
economic recovery is affecting the availability and cost of labour,
thereby adding additional pressure on production rate and costs.
The Company believes that this situation is likely to continue at
least until the end of 2021. To offset these inflationary
pressures, the Company believes it will be able to gradually adjust
its selling prices in the beginning of the third quarter. However,
these price increases may not be sufficient, as inflationary
pressures are intensifying given that the current global supply
chain crisis is continuing to have a significant impact on raw
material supply and transportation costs. In addition, the
availability and delivered price of apple concentrate and certain
types of packaging is still being affected by a limited
availability of containers. Therefore, the Company will make
additional selling price adjustments during the last six months of
2021 while remaining attentive to the impact of these adjustments
on the demand for its products.
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.