Financial Results for the Third Quarter of Fiscal 2007, Ended December 31, 2006
Financial Results for the Third Quarter of Fiscal 2007, Ended December 31, 2006
02/06/2007 0:00 UTC
Net earnings at $64.1 million, up 42.4% for the quarter
Net earnings at $175.6 million, up 13.7% since the beginning of the fiscal year
(Montreal, February 6, 2007) – Saputo Inc. released today its financial results for the third quarter of fiscal 2007, which ended December 31, 2006.
- Net earnings totalled $64.1 million ($0.62 basic per share), up $19.1 million compared to the $45.0 million ($0.43 basic per share) for the same quarter in fiscal 2006.
- Consolidated revenues for the quarter ended December 31, 2006 totalled $1.017 billion, a $2.2 million increase compared to the $1.015 billion for the same period last year. This increase is mainly attributed to the Canadian and Other Dairy Products Sector, whose revenues increased by $31.5 million compared to the same period last year, as a result of higher selling prices in the Canadian operations in accordance with the increase in the cost of milk as raw material, increased sales volumes from the Canadian fluid milk activities and Argentinean operations, additional revenues due to a more favourable by-product market, and the inclusion of the German operations, acquired on April 13, 2006. The US Dairy Products Sector revenues decreased by $31.2 million compared to the same period last year. A lower average block market1 per pound of cheese, the appreciation of the Canadian dollar and reduced sales volumes are the main factors explaining the decrease. Revenues from the Grocery Products Sector increased by $1.8 million, due to a combination of higher sales volumes destined for the Canadian market and the inclusion of Boulangerie Rondeau Inc. and Biscuits Rondeau Inc. (“Rondeau”), acquired on July 28, 2006, offset by lower revenues generated by the co-packing agreements for the manufacturing of products for the US market.
- Consolidated EBITDA2 totalled $115.0 million, an increase of $29.0 million compared to the $86.0 million for the corresponding quarter of fiscal 2006. This increase is due to higher EBITDA in the Canadian and Other Dairy Products Sector of approximately $20 million and an increase in EBITDA of approximately $9 million in the US Dairy Products Sector. The Grocery Products Sector EBITDA remained unchanged compared to the same quarter last year.
- EBITDA for the Canadian and Other Dairy Products Sector totalled $84.5 million, an increase of 31.6% compared to $64.2 million for the same period last year. During the third quarter of fiscal 2007, the by-product market price positively impacted EBITDA by approximately $6 million. Better efficiencies in the cheese activities resulting from rationalization measures undertaken in prior years, synergies in the fluid milk activities derived from a better usage of logistics and warehousing facilities, and increased sales volumes in the fluid milk activities increased EBITDA. In Argentina, improved EBITDA was achieved as a result of increased sales volumes, benefits derived from capital investments completed in current and prior years, and the positive effect of the export tax rate reduction announced by the Argentinean government in August 2006.
- EBITDA for the US Dairy Products Sector totalled $24.0 million, resulting in an $8.8 million or 57.9% increase, compared to $15.2 million for the same period last year. Efforts with respect to improved operational efficiencies, increased selling prices, and the reduction of the cost associated with milk handling increased the EBITDA by approximately $6 million. A lower average block market per pound of cheese, the appreciation of the Canadian dollar, and a less favourable relationship between the average block market per pound of cheese and the cost of milk as raw material decreased the EBITDA. EBITDA was increased by approximately $5 million due to reduced expenses.
- EBITDA for the Grocery Products Sector stood at $6.6 million, stable in comparison to the same quarter last year. A reduction in marketing expenses was offset by lower revenues from co-packing agreements for the manufacturing of products for the US market.
- Cash generated by operating activities before changes in non-cash working capital items amounted to $89.1 million, an increase of $22.4 million compared to $66.7 million for the same period last year.
- In the third quarter, the Company used $17.9 million for additions to fixed assets. The Company also made long-term debt repayment of $33.8 million, purchased shares for cancellation for an amount of $17.7 million as part of the normal course issuer bid, and paid dividends in the amount of $20.6 million.
For more information on the results of the third quarter of fiscal 2007, please read the attached interim report for the quarter ended December 31, 2006, which forms an integral part of this press release.
Dividends
The Board of Directors declared a dividend of $0.20 per share, payable on March 23, 2007 to shareholders of record on March 12, 2007. This dividend relates to the quarter ended December 31, 2006.
Conference Call
A conference call to discuss the third quarter results of fiscal 2007 will be held on Tuesday, February 6, 2007 at 3:30 PM, Eastern Time. To participate in the conference call, dial 1 866 521 6084. 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/020607/index.php in your web browser.
For those unable to participate, an instant replay will be available until midnight, Tuesday, February 13, 2007. To access the replay dial 1 800 766 2843, ID number 7381949. A replay of the conference call will also be available on the Company’s web site at www.saputo.com.
About Saputo
Always with an expert hand, Saputo transforms into success the passion and initiative of the 8,500 dedicated men and women who work in its 46 plants around the world. Combining tradition and innovation, the Company produces, commercializes and distributes the highest quality products under such well-known brands as Saputo, Alexis de Portneuf, Armstrong, Baxter, Dairyland, De Lucia, Dragone, DuVillage de Warwick, Frigo, Kingsey, La Paulina, Nutrilait, Princesse, Ricrem, Sir Laurier d’Arthabaska, Stella, Treasure Cave, Big Daddy, HOP&GO!, Rondeau and Vachon. As 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, Saputo renews its commitment to excellence and growth every day. Saputo Inc. is a public company whose shares are listed on the Toronto Stock Exchange under the symbol SAP. Visit our Web site at www.saputo.com.
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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Report
Information
Céline Patenaude
Acting Director, Communications
514.328.3377
Net earnings at $175.6 million, up 13.7% since the beginning of the fiscal year
(Montreal, February 6, 2007) – Saputo Inc. released today its financial results for the third quarter of fiscal 2007, which ended December 31, 2006.
- Net earnings totalled $64.1 million ($0.62 basic per share), up $19.1 million compared to the $45.0 million ($0.43 basic per share) for the same quarter in fiscal 2006.
- Consolidated revenues for the quarter ended December 31, 2006 totalled $1.017 billion, a $2.2 million increase compared to the $1.015 billion for the same period last year. This increase is mainly attributed to the Canadian and Other Dairy Products Sector, whose revenues increased by $31.5 million compared to the same period last year, as a result of higher selling prices in the Canadian operations in accordance with the increase in the cost of milk as raw material, increased sales volumes from the Canadian fluid milk activities and Argentinean operations, additional revenues due to a more favourable by-product market, and the inclusion of the German operations, acquired on April 13, 2006. The US Dairy Products Sector revenues decreased by $31.2 million compared to the same period last year. A lower average block market1 per pound of cheese, the appreciation of the Canadian dollar and reduced sales volumes are the main factors explaining the decrease. Revenues from the Grocery Products Sector increased by $1.8 million, due to a combination of higher sales volumes destined for the Canadian market and the inclusion of Boulangerie Rondeau Inc. and Biscuits Rondeau Inc. (“Rondeau”), acquired on July 28, 2006, offset by lower revenues generated by the co-packing agreements for the manufacturing of products for the US market.
- Consolidated EBITDA2 totalled $115.0 million, an increase of $29.0 million compared to the $86.0 million for the corresponding quarter of fiscal 2006. This increase is due to higher EBITDA in the Canadian and Other Dairy Products Sector of approximately $20 million and an increase in EBITDA of approximately $9 million in the US Dairy Products Sector. The Grocery Products Sector EBITDA remained unchanged compared to the same quarter last year.
- EBITDA for the Canadian and Other Dairy Products Sector totalled $84.5 million, an increase of 31.6% compared to $64.2 million for the same period last year. During the third quarter of fiscal 2007, the by-product market price positively impacted EBITDA by approximately $6 million. Better efficiencies in the cheese activities resulting from rationalization measures undertaken in prior years, synergies in the fluid milk activities derived from a better usage of logistics and warehousing facilities, and increased sales volumes in the fluid milk activities increased EBITDA. In Argentina, improved EBITDA was achieved as a result of increased sales volumes, benefits derived from capital investments completed in current and prior years, and the positive effect of the export tax rate reduction announced by the Argentinean government in August 2006.
- EBITDA for the US Dairy Products Sector totalled $24.0 million, resulting in an $8.8 million or 57.9% increase, compared to $15.2 million for the same period last year. Efforts with respect to improved operational efficiencies, increased selling prices, and the reduction of the cost associated with milk handling increased the EBITDA by approximately $6 million. A lower average block market per pound of cheese, the appreciation of the Canadian dollar, and a less favourable relationship between the average block market per pound of cheese and the cost of milk as raw material decreased the EBITDA. EBITDA was increased by approximately $5 million due to reduced expenses.
- EBITDA for the Grocery Products Sector stood at $6.6 million, stable in comparison to the same quarter last year. A reduction in marketing expenses was offset by lower revenues from co-packing agreements for the manufacturing of products for the US market.
- Cash generated by operating activities before changes in non-cash working capital items amounted to $89.1 million, an increase of $22.4 million compared to $66.7 million for the same period last year.
- In the third quarter, the Company used $17.9 million for additions to fixed assets. The Company also made long-term debt repayment of $33.8 million, purchased shares for cancellation for an amount of $17.7 million as part of the normal course issuer bid, and paid dividends in the amount of $20.6 million.
For more information on the results of the third quarter of fiscal 2007, please read the attached interim report for the quarter ended December 31, 2006, which forms an integral part of this press release.
Dividends
The Board of Directors declared a dividend of $0.20 per share, payable on March 23, 2007 to shareholders of record on March 12, 2007. This dividend relates to the quarter ended December 31, 2006.
Conference Call
A conference call to discuss the third quarter results of fiscal 2007 will be held on Tuesday, February 6, 2007 at 3:30 PM, Eastern Time. To participate in the conference call, dial 1 866 521 6084. 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/020607/index.php in your web browser.
For those unable to participate, an instant replay will be available until midnight, Tuesday, February 13, 2007. To access the replay dial 1 800 766 2843, ID number 7381949. A replay of the conference call will also be available on the Company’s web site at www.saputo.com.
About Saputo
Always with an expert hand, Saputo transforms into success the passion and initiative of the 8,500 dedicated men and women who work in its 46 plants around the world. Combining tradition and innovation, the Company produces, commercializes and distributes the highest quality products under such well-known brands as Saputo, Alexis de Portneuf, Armstrong, Baxter, Dairyland, De Lucia, Dragone, DuVillage de Warwick, Frigo, Kingsey, La Paulina, Nutrilait, Princesse, Ricrem, Sir Laurier d’Arthabaska, Stella, Treasure Cave, Big Daddy, HOP&GO!, Rondeau and Vachon. As 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, Saputo renews its commitment to excellence and growth every day. Saputo Inc. is a public company whose shares are listed on the Toronto Stock Exchange under the symbol SAP. Visit our Web site at www.saputo.com.
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 -
Report
Information
Céline Patenaude
Acting Director, Communications
514.328.3377
Lynda Leith
Investor Relations
(514) 328-3381
