Financial Results for the Second Quarter of Fiscal 2008, Ended September 30, 2007
Financial Results for the Second Quarter of Fiscal 2008, Ended September 30, 2007
11/06/2007 0:00 UTC
Net earnings at $62.5 million, up 7.2% for the quarter
Net earnings at $131.0 million, up 17.4% since the beginning of the fiscal year
(Montréal, November 6, 2007) – Saputo Inc. released today its financial results for the second quarter of fiscal 2008, which ended September 30, 2007.
- Net earnings for the quarter totalled $62.5 million ($0.61 basic per share), an increase of $4.2 million compared to $58.3 million ($0.56 basic per share) for the same quarter last fiscal year. Included in the results of the current quarter is an income tax charge of approximately $3 million due to a reduction of future income tax assets recorded in previous fiscal years. Excluding this adjustment, net earnings would have reached $65.5 million, an increase of $7.2 million or 12.4% in comparison to the same quarter last fiscal year.
- Consolidated revenues for the quarter ended September 30, 2007, amounted to $1.289 billion, an increase of $294.9 million or 29.7% over the $994.1 million for the corresponding period last fiscal year. This increase is due mainly to our US Dairy Products Sector, whose revenues increased by approximately $247 million. The acquisition of the activities of Land O’Lakes West Coast industrial cheese business in the United States (Land O’Lakes West Coast Acquisition), a higher average block market1 per pound of cheese, increased selling prices and higher sales volume explain the revenue increase. Revenues from our Canadian and Other Dairy Products Sector increased by approximately $48 million. Higher selling prices in accordance with the increase in the cost of milk as raw material, a more favourable by-products market, increased sales volume from our Canadian fluid milk activities and the inclusion of our United Kingdom (UK) operations, acquired on March 23, 2007, are the main factors explaining the revenue increase. Revenues from our Grocery Products Sector decreased by approximately $1 million in comparison to the same quarter last fiscal year. During the second quarter of fiscal 2008, the appreciation of the Canadian dollar eroded approximately $29 million in the Company’s revenues compared to the same quarter last fiscal year.
- Consolidated EBITDA2 totalled $124.1 million, an increase of $17.3 million or 16.2% in comparison to $106.8 million for the same quarter last fiscal year. This increase is due to higher EBITDA in the US Dairy Products Sector of approximately $11 million and an increase in EBITDA of approximately $8 million in the Canadian and Other Dairy Products Sector. The EBITDA of our Grocery Products Sector decreased by approximately $2 million in comparison to the same quarter last fiscal year.
- EBITDA for the Canadian and Other Dairy Products Sector amounted to $84.6 million, an increase of 10.2% in comparison to the same quarter last fiscal year. The Dairy Products Division (Canada) was the major contributor to the EBITDA increase in the sector. This increase was derived from better efficiencies in our manufacturing and logistics activities, from rationalization activities undertaken in our Canadian operations during prior years, from a more positive by-products market and from additional sales volumes from our Canadian fluid milk activities.
- EBITDA for the US Dairy Products Sector totalled $34.1 million, an increase of 48.9% compared to the same period last fiscal year. This increase is due to the contribution of the Land O’Lakes West Coast Acquisition, along with initiatives undertaken in the prior and current fiscal years with regards to improved operational efficiencies, increased selling prices, reduction of costs associated with milk handling and a higher average block market per pound of cheese. These factors offset a less favourable relationship between the average block market per pound of cheese and the cost of milk as raw material.
- EBITDA for the Grocery Products Sector amounted to $5.4 million, a $1.7 million decrease compared to the corresponding quarter last fiscal year. The division experienced higher ingredients, packaging, labor and energy costs and the decline in revenues from its American co-packing activities.
- Cash generated by operating activities amounted to $81.7 million, compared to $97.1 million for the same period last fiscal year.
- In the second quarter, the Company issued shares for a cash consideration of $11.9 million, as part of the Stock Option Plan, purchased share capital totalling $44.9 million, and paid $45.1 million in dividends.
For more information on the results of the second quarter of fiscal 2008, please read the attached interim report for the quarter ended September 30, 2007, which forms an integral part of this press release.
Dividends
The Board of Directors approved today a stock dividend on the Common Shares which has the same effect as a two-for-one stock split of the Company's outstanding Common Shares. The dividend on the Common Shares will be paid on December 21, 2007, to shareholders of record as of the close of business on December 10, 2007, the record date for the dividend. This dividend is subject to obtaining all necessary regulatory approvals. The additional Common Shares will be issued on December 21, 2007, and will double the number of Common Shares outstanding.
Concurrently, the Board of Directors declared a quarterly dividend of $0.12 per share payable on December 21, 2007, to common shareholders of record on December 10, 2007. This dividend represents a dividend of $0.24 per share prior to the stock split, which is the quarterly dividend usually paid by the Company in accordance with its fiscal 2008 dividend policy.
The Company’s Common Shares, which currently trade on the Toronto Stock Exchange under the symbol SAP, will begin trading on a split basis as of December 6, 2007.
Normal Course Issuer Bid
The Company has the intention to purchase by way of a normal course issuer bid (Bid), for cancellation purposes, some of its Common Shares through the facilities of the Toronto Stock Exchange, beginning on November 13, 2007.
Under the Bid, the Company may repurchase for cancellation up to 5,136,424 Common Shares. This represents 5% of its 102,728,495 issued and outstanding Common Shares as of October 31, 2007. The average daily trading volume of the Company’s Common Shares over the last six (6) completed calendar months was 191,094. Accordingly, the Company is entitled to purchase, on any trading day, up to 47,773 Commons Shares. These purchases will be made in accordance with applicable regulations over a maximum period of 12 months beginning on November 13, 2007, and ending on November 12, 2008. The consideration, which will be in cash, that the Company will pay for any Common Shares acquired by it under the Bid will be the market price of such Common Shares at the time of acquisition. Within the previous twelve months, Saputo purchased, for cancellation purposes, by way of a normal course issuer bid established in November 2006, 2,325,020 of its Common Shares at a weighted average price of $42.6531 per share. The Company believes that the purchase of its own shares may, in appropriate circumstances, be a responsible investment of funds on hand.
Conference Call
A conference call to discuss the second quarter results of fiscal 2008 will be held on Tuesday, November 6, 2007, at 2:00 PM, Eastern time. To participate in the conference call dial 1 888 241 0326. 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/110607/index.php in your web browser.
For those unable to participate, an instant replay will be available until midnight, Tuesday, November 13, 2007. To access the replay dial 1 888 214 7699, ID number 20688665. 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.
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Information
Karine Vachon
Advisor, Communications
514.328.3377
REPORT
Net earnings at $131.0 million, up 17.4% since the beginning of the fiscal year
(Montréal, November 6, 2007) – Saputo Inc. released today its financial results for the second quarter of fiscal 2008, which ended September 30, 2007.
- Net earnings for the quarter totalled $62.5 million ($0.61 basic per share), an increase of $4.2 million compared to $58.3 million ($0.56 basic per share) for the same quarter last fiscal year. Included in the results of the current quarter is an income tax charge of approximately $3 million due to a reduction of future income tax assets recorded in previous fiscal years. Excluding this adjustment, net earnings would have reached $65.5 million, an increase of $7.2 million or 12.4% in comparison to the same quarter last fiscal year.
- Consolidated revenues for the quarter ended September 30, 2007, amounted to $1.289 billion, an increase of $294.9 million or 29.7% over the $994.1 million for the corresponding period last fiscal year. This increase is due mainly to our US Dairy Products Sector, whose revenues increased by approximately $247 million. The acquisition of the activities of Land O’Lakes West Coast industrial cheese business in the United States (Land O’Lakes West Coast Acquisition), a higher average block market1 per pound of cheese, increased selling prices and higher sales volume explain the revenue increase. Revenues from our Canadian and Other Dairy Products Sector increased by approximately $48 million. Higher selling prices in accordance with the increase in the cost of milk as raw material, a more favourable by-products market, increased sales volume from our Canadian fluid milk activities and the inclusion of our United Kingdom (UK) operations, acquired on March 23, 2007, are the main factors explaining the revenue increase. Revenues from our Grocery Products Sector decreased by approximately $1 million in comparison to the same quarter last fiscal year. During the second quarter of fiscal 2008, the appreciation of the Canadian dollar eroded approximately $29 million in the Company’s revenues compared to the same quarter last fiscal year.
- Consolidated EBITDA2 totalled $124.1 million, an increase of $17.3 million or 16.2% in comparison to $106.8 million for the same quarter last fiscal year. This increase is due to higher EBITDA in the US Dairy Products Sector of approximately $11 million and an increase in EBITDA of approximately $8 million in the Canadian and Other Dairy Products Sector. The EBITDA of our Grocery Products Sector decreased by approximately $2 million in comparison to the same quarter last fiscal year.
- EBITDA for the Canadian and Other Dairy Products Sector amounted to $84.6 million, an increase of 10.2% in comparison to the same quarter last fiscal year. The Dairy Products Division (Canada) was the major contributor to the EBITDA increase in the sector. This increase was derived from better efficiencies in our manufacturing and logistics activities, from rationalization activities undertaken in our Canadian operations during prior years, from a more positive by-products market and from additional sales volumes from our Canadian fluid milk activities.
- EBITDA for the US Dairy Products Sector totalled $34.1 million, an increase of 48.9% compared to the same period last fiscal year. This increase is due to the contribution of the Land O’Lakes West Coast Acquisition, along with initiatives undertaken in the prior and current fiscal years with regards to improved operational efficiencies, increased selling prices, reduction of costs associated with milk handling and a higher average block market per pound of cheese. These factors offset a less favourable relationship between the average block market per pound of cheese and the cost of milk as raw material.
- EBITDA for the Grocery Products Sector amounted to $5.4 million, a $1.7 million decrease compared to the corresponding quarter last fiscal year. The division experienced higher ingredients, packaging, labor and energy costs and the decline in revenues from its American co-packing activities.
- Cash generated by operating activities amounted to $81.7 million, compared to $97.1 million for the same period last fiscal year.
- In the second quarter, the Company issued shares for a cash consideration of $11.9 million, as part of the Stock Option Plan, purchased share capital totalling $44.9 million, and paid $45.1 million in dividends.
For more information on the results of the second quarter of fiscal 2008, please read the attached interim report for the quarter ended September 30, 2007, which forms an integral part of this press release.
Dividends
The Board of Directors approved today a stock dividend on the Common Shares which has the same effect as a two-for-one stock split of the Company's outstanding Common Shares. The dividend on the Common Shares will be paid on December 21, 2007, to shareholders of record as of the close of business on December 10, 2007, the record date for the dividend. This dividend is subject to obtaining all necessary regulatory approvals. The additional Common Shares will be issued on December 21, 2007, and will double the number of Common Shares outstanding.
Concurrently, the Board of Directors declared a quarterly dividend of $0.12 per share payable on December 21, 2007, to common shareholders of record on December 10, 2007. This dividend represents a dividend of $0.24 per share prior to the stock split, which is the quarterly dividend usually paid by the Company in accordance with its fiscal 2008 dividend policy.
The Company’s Common Shares, which currently trade on the Toronto Stock Exchange under the symbol SAP, will begin trading on a split basis as of December 6, 2007.
Normal Course Issuer Bid
The Company has the intention to purchase by way of a normal course issuer bid (Bid), for cancellation purposes, some of its Common Shares through the facilities of the Toronto Stock Exchange, beginning on November 13, 2007.
Under the Bid, the Company may repurchase for cancellation up to 5,136,424 Common Shares. This represents 5% of its 102,728,495 issued and outstanding Common Shares as of October 31, 2007. The average daily trading volume of the Company’s Common Shares over the last six (6) completed calendar months was 191,094. Accordingly, the Company is entitled to purchase, on any trading day, up to 47,773 Commons Shares. These purchases will be made in accordance with applicable regulations over a maximum period of 12 months beginning on November 13, 2007, and ending on November 12, 2008. The consideration, which will be in cash, that the Company will pay for any Common Shares acquired by it under the Bid will be the market price of such Common Shares at the time of acquisition. Within the previous twelve months, Saputo purchased, for cancellation purposes, by way of a normal course issuer bid established in November 2006, 2,325,020 of its Common Shares at a weighted average price of $42.6531 per share. The Company believes that the purchase of its own shares may, in appropriate circumstances, be a responsible investment of funds on hand.
Conference Call
A conference call to discuss the second quarter results of fiscal 2008 will be held on Tuesday, November 6, 2007, at 2:00 PM, Eastern time. To participate in the conference call dial 1 888 241 0326. 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/110607/index.php in your web browser.
For those unable to participate, an instant replay will be available until midnight, Tuesday, November 13, 2007. To access the replay dial 1 888 214 7699, ID number 20688665. 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.
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Information
Karine Vachon
Advisor, Communications
514.328.3377
REPORT
Saputo Group Inc.
Camillo Lisio, Executive Vice-President
(514) 328-3314
