Financial Results for the First Quarter of Fiscal 2008, Ended June 30, 2007
Financial Results for the First Quarter of Fiscal 2008, Ended June 30, 2007
07/31/2007 0:00 UTC
Net earnings at $68.4 million, up 28.3% for the quarter
(Montréal, July 31, 2007) – Saputo Inc. released today its financial results for the first quarter of fiscal 2008, which ended June 30, 2007.
- Net earnings totalled $68.4 million ($0.66 basic per share), up $15.1 million compared to the $53.3 million ($0.51 basic per share) for the same quarter in fiscal 2007.
- Consolidated revenues for the quarter ended June 30, 2007 totalled $1.227 billion, an increase of $245.6 million or 25% over the $981.1 million for the corresponding period last fiscal year. This increase is due mainly to our US Dairy Products Sector, whose revenues increased by approximately $221 million. The acquisition of the activities of Land O’Lakes West Coast industrial cheese business in the US (Land O’Lakes West Coast Acquisition) and a higher average block market1 per pound of cheese explain the revenue increase. Revenues from our Canadian and Other Dairy Products Sector increased by approximately $24 million. Higher selling prices in accordance with the increase in the cost of milk as raw material, increased sales volumes from our Canadian fluid milk activities and the inclusion of our UK operations, acquired on March 23, 2007, are the main factors explaining the revenue increase. The revenues from our Grocery Products Sector increased by approximately $1 million in comparison to the same quarter last fiscal year. During the first quarter of fiscal 2008, the appreciation of the Canadian dollar eroded approximately $9 million in the Company’s revenues in comparison to the same quarter last fiscal year.
- Consolidated EBITDA2 amounted to $127.5 million, an increase of $34.4 million or 37% in comparison to the $93.1 million for the same quarter last fiscal year. This increase is due to higher EBITDA in the US Dairy Products Sector of approximately $19 million and an increase in EBITDA of approximately $18 million in the Canadian and Other Dairy Products Sector. The EBITDA of our Grocery Products Sector decreased by $2.4 million in comparison to the same quarter last fiscal year.
- EBITDA for the US Dairy Products Sector totalled $34 million, an increase of 131.3% compared to the same period last year. This increase is the result of benefits derived from measures undertaken by the division to counteract adverse market conditions, improved efficiencies, higher average block market per pound of cheese and the contribution of the Land O’Lakes West Coast Acquisition. These factors offset a less favourable relationship between the average block market per pound of cheese and the cost of milk as raw material. During the first quarter of fiscal 2007, a rationalization charge of $1.3 million was taken for the closure of our Peru, Indiana facility.
- EBITDA for the Canadian and Other Dairy Products Sector amounted to $89 million, an increase of 24.5% in comparison to the same quarter last fiscal year. This increase is due to a more favourable by-product market, benefits derived from rationalization activities undertaken in our Canadian operation during prior years, additional sales volumes from our Canadian fluid milk activities, and reduction in our handling and delivery costs. The EBITDA of our Dairy Products Division (Argentina) was slightly lower in comparison to the same quarter last fiscal year. The division was faced with difficult conditions with regards to milk supply as a result of major floods in certain regions of Argentina.
- EBITDA for the Grocery Products Sector stood at $4.5 million, a $2.4 million decrease compared to the corresponding quarter last fiscal year. The decrease is attributed to higher raw material, marketing and other costs, additional expenses relating to the pension fund, and lower sales volumes generated by our
co-packing agreements for the manufacturing of products for the US market.
- Cash generated by operating activities before the changes in non-cash working capital items amounted to $93.0 million, compared to $68.0 million for the same period last fiscal year.
- In the first quarter, the Company added $17.7 million in fixed assets, used $253.2 million essentially for the Land O’Lakes West Coast Acquisition, purchased shares for cancellation for an amount of $81.5 million in accordance with the normal course issuer bid and issued shares for a cash consideration of $9.7 million, as part of the Stock Option Plan.
For more information on the results of the first quarter of fiscal 2008, please read the attached interim report for the quarter ended June 30, 2007, which forms an integral part of this press release.
Dividends
The Board of Directors revised its policy and raised Company dividends. The quarterly dividend will rise to $0.24 per share from $0.20 per share, for a total of $0.96 per share annually, representing a 20% increase. This dividend will become effective for the dividend payment of September 14, 2007 to shareholders of record on September 4, 2007.
Conference Call
A conference call to discuss the first quarter results of fiscal 2008 will be held on Tuesday, July 31, 2007 at 2:00 PM, Eastern time. To participate in the conference call dial 1 800 525 6384. To ensure your participation, please dial in approximately five minutes before the call.
To listen to this call on the web, please enter http://events.onlinebroadcasting.com/saputo/073107/index.php in your web browser.
For those unable to participate, an instant replay will be available until midnight, Tuesday, August 7, 2007. To access the replay dial 1 800 395 0363, ID number 6807645. A replay of the conference call will also be available on the Company’s web site at www.saputo.com.
About Saputo
Saputo, a whole world to discover. With its distinctive array of products and its commitment to growth, Saputo continues to explore and seize new opportunities while maintaining the best of tradition. Through product innovations, global expansion and unwavering employee dedication, Saputo produces, markets and distributes products of the highest quality. Saputo is one of the top twenty dairy processors in the world, the largest dairy processor in Canada, among the top five cheese producers in the United States, the third largest dairy processor in Argentina and the largest snack-cake manufacturer in Canada. Success stems from the passion and expertise of the 8,900 men and women who work in its numerous locations worldwide. Well-known brands such as Saputo, Alexis de Portneuf, Armstrong, Baxter, Dairyland, Danscorella, De Lucia, Dragone, DuVillage de Warwick, Frigo, Kingsey, La Paulina, Nutrilait, Princesse, Ricrem, Sir Laurier d’Arthabaska, Stella, Treasure Cave, HOP&GO!, Rondeau and Vachon have earned the trust of consumers in over thirty countries. Saputo Inc. is a public company whose shares are traded on the Toronto Stock Exchange under the symbol SAP.
1 “Average block market” is the average daily price of a 40 pound block of Cheddar traded on the Chicago Mercantile Exchange (CME), used as the base price for the cheese.
2 Measurement of results not in accordance with generally accepted accounting principles
The Company assesses its financial performance based on its EBITDA, this being earnings before interest, income taxes, depreciation and amortization. EBITDA is not a measurement of performance as defined by generally accepted accounting principles in Canada, and consequently may not be comparable to similar measurements presented by other companies.
- 30 -
Information
Karine Vachon
Advisor, Communications
514.328.3377
Report
(Montréal, July 31, 2007) – Saputo Inc. released today its financial results for the first quarter of fiscal 2008, which ended June 30, 2007.
- Net earnings totalled $68.4 million ($0.66 basic per share), up $15.1 million compared to the $53.3 million ($0.51 basic per share) for the same quarter in fiscal 2007.
- Consolidated revenues for the quarter ended June 30, 2007 totalled $1.227 billion, an increase of $245.6 million or 25% over the $981.1 million for the corresponding period last fiscal year. This increase is due mainly to our US Dairy Products Sector, whose revenues increased by approximately $221 million. The acquisition of the activities of Land O’Lakes West Coast industrial cheese business in the US (Land O’Lakes West Coast Acquisition) and a higher average block market1 per pound of cheese explain the revenue increase. Revenues from our Canadian and Other Dairy Products Sector increased by approximately $24 million. Higher selling prices in accordance with the increase in the cost of milk as raw material, increased sales volumes from our Canadian fluid milk activities and the inclusion of our UK operations, acquired on March 23, 2007, are the main factors explaining the revenue increase. The revenues from our Grocery Products Sector increased by approximately $1 million in comparison to the same quarter last fiscal year. During the first quarter of fiscal 2008, the appreciation of the Canadian dollar eroded approximately $9 million in the Company’s revenues in comparison to the same quarter last fiscal year.
- Consolidated EBITDA2 amounted to $127.5 million, an increase of $34.4 million or 37% in comparison to the $93.1 million for the same quarter last fiscal year. This increase is due to higher EBITDA in the US Dairy Products Sector of approximately $19 million and an increase in EBITDA of approximately $18 million in the Canadian and Other Dairy Products Sector. The EBITDA of our Grocery Products Sector decreased by $2.4 million in comparison to the same quarter last fiscal year.
- EBITDA for the US Dairy Products Sector totalled $34 million, an increase of 131.3% compared to the same period last year. This increase is the result of benefits derived from measures undertaken by the division to counteract adverse market conditions, improved efficiencies, higher average block market per pound of cheese and the contribution of the Land O’Lakes West Coast Acquisition. These factors offset a less favourable relationship between the average block market per pound of cheese and the cost of milk as raw material. During the first quarter of fiscal 2007, a rationalization charge of $1.3 million was taken for the closure of our Peru, Indiana facility.
- EBITDA for the Canadian and Other Dairy Products Sector amounted to $89 million, an increase of 24.5% in comparison to the same quarter last fiscal year. This increase is due to a more favourable by-product market, benefits derived from rationalization activities undertaken in our Canadian operation during prior years, additional sales volumes from our Canadian fluid milk activities, and reduction in our handling and delivery costs. The EBITDA of our Dairy Products Division (Argentina) was slightly lower in comparison to the same quarter last fiscal year. The division was faced with difficult conditions with regards to milk supply as a result of major floods in certain regions of Argentina.
- EBITDA for the Grocery Products Sector stood at $4.5 million, a $2.4 million decrease compared to the corresponding quarter last fiscal year. The decrease is attributed to higher raw material, marketing and other costs, additional expenses relating to the pension fund, and lower sales volumes generated by our
co-packing agreements for the manufacturing of products for the US market.
- Cash generated by operating activities before the changes in non-cash working capital items amounted to $93.0 million, compared to $68.0 million for the same period last fiscal year.
- In the first quarter, the Company added $17.7 million in fixed assets, used $253.2 million essentially for the Land O’Lakes West Coast Acquisition, purchased shares for cancellation for an amount of $81.5 million in accordance with the normal course issuer bid and issued shares for a cash consideration of $9.7 million, as part of the Stock Option Plan.
For more information on the results of the first quarter of fiscal 2008, please read the attached interim report for the quarter ended June 30, 2007, which forms an integral part of this press release.
Dividends
The Board of Directors revised its policy and raised Company dividends. The quarterly dividend will rise to $0.24 per share from $0.20 per share, for a total of $0.96 per share annually, representing a 20% increase. This dividend will become effective for the dividend payment of September 14, 2007 to shareholders of record on September 4, 2007.
Conference Call
A conference call to discuss the first quarter results of fiscal 2008 will be held on Tuesday, July 31, 2007 at 2:00 PM, Eastern time. To participate in the conference call dial 1 800 525 6384. To ensure your participation, please dial in approximately five minutes before the call.
To listen to this call on the web, please enter http://events.onlinebroadcasting.com/saputo/073107/index.php in your web browser.
For those unable to participate, an instant replay will be available until midnight, Tuesday, August 7, 2007. To access the replay dial 1 800 395 0363, ID number 6807645. A replay of the conference call will also be available on the Company’s web site at www.saputo.com.
About Saputo
Saputo, a whole world to discover. With its distinctive array of products and its commitment to growth, Saputo continues to explore and seize new opportunities while maintaining the best of tradition. Through product innovations, global expansion and unwavering employee dedication, Saputo produces, markets and distributes products of the highest quality. Saputo is one of the top twenty dairy processors in the world, the largest dairy processor in Canada, among the top five cheese producers in the United States, the third largest dairy processor in Argentina and the largest snack-cake manufacturer in Canada. Success stems from the passion and expertise of the 8,900 men and women who work in its numerous locations worldwide. Well-known brands such as Saputo, Alexis de Portneuf, Armstrong, Baxter, Dairyland, Danscorella, De Lucia, Dragone, DuVillage de Warwick, Frigo, Kingsey, La Paulina, Nutrilait, Princesse, Ricrem, Sir Laurier d’Arthabaska, Stella, Treasure Cave, HOP&GO!, Rondeau and Vachon have earned the trust of consumers in over thirty countries. Saputo Inc. is a public company whose shares are traded on the Toronto Stock Exchange under the symbol SAP.
1 “Average block market” is the average daily price of a 40 pound block of Cheddar traded on the Chicago Mercantile Exchange (CME), used as the base price for the cheese.
2 Measurement of results not in accordance with generally accepted accounting principles
The Company assesses its financial performance based on its EBITDA, this being earnings before interest, income taxes, depreciation and amortization. EBITDA is not a measurement of performance as defined by generally accepted accounting principles in Canada, and consequently may not be comparable to similar measurements presented by other companies.
- 30 -
Information
Karine Vachon
Advisor, Communications
514.328.3377
Report
Saputo Group Inc.
Camillo Lisio, Executive Vice-President
(514) 328-3314
