Financial Results for the First Quarter of Fiscal 2006
Financial Results for the First Quarter of Fiscal 2006
08/02/2005 0:00 UTC
Net earnings down by 7%
(Montréal, August 2, 2005) – Saputo Inc. released today its financial results for the first quarter of fiscal 2006, which ended June 30, 2005.
- Net earnings closed at $54.2 million, down 7.0% compared to the same period last year.
- Consolidated revenues totalled $1.007 billion, a decrease of 1.2% over the $1.019 billion posted one year earlier. Revenues from our US Dairy Products Sector were negatively affected by a lower average block market(1) per pound of cheese and the appreciation of the Canadian dollar compared to the same period last year. The decrease offset a revenue increase in our Canadian and Other Dairy Products Sector resulting from increased selling prices, higher sales volumes, as well as the inclusion of the activities of Fromage Côté S.A. and Distributions Kingsey Inc., acquired on April 18, 2005. Revenues from our Grocery Products Sector were $2.6 million lower compared to the same period last year.
- Consolidated EBITDA(2) for the first quarter of fiscal 2006 totalled $96.7 million, a decrease of $10.3 million from the $107.0 million posted one year earlier. Even though our Canadian and Other Dairy Products Sector increased its EBITDA by $10.3 million, our US Dairy Products Sector offset this increase and decreased the consolidated EBITBA, mainly due to unfavourable market conditions.
- EBITDA for the Canadian and Other Dairy Products Sector rose to $65.8 million, up 18.6% or $10.3 million over the same period last year. The EBITDA margin increased to 10.1% this year compared to 9.1% last year due mainly to savings derived from rationalization activities undertaken in fiscal 2005 and increased sales volumes.
- EBITDA for the US Dairy Products Sector totalled $25.3 million, resulting in a $19.2 million or 43.1% decrease compared to $44.5 million for the same period last year. A lower average block market per pound of cheese, a less favourable relationship between the average block market per pound of cheese and the cost of milk as raw material, the appreciation of the Canadian dollar along with increased promotional, fuel and ingredient costs compared to the same quarter last year were the major factors contributing to the decrease. During the first quarter of fiscal 2006, the average block market per pound of cheese was US$0.49 lower compared to the same period last year.
- EBITDA for the Grocery Products Sector stood at $5.6 million, a decrease of $1.4 million compared to the same quarter last year. The EBITDA margin went from 17% to 14.5% for the same period. The division incurred costs of $1.2 million related to additional marketing expenses and $0.5 million related to the pension fund in the first quarter of fiscal 2006 as compared to the first quarter of last fiscal year.
- Cash generated before changes in non-cash operating working capital items totalled $73.4 million, a decrease of $3.4 million from the corresponding period last year. The decrease is a direct result of lower earnings generated in the first quarter compared to the same quarter last year.
- During the first quarter of fiscal 2006, the Company acquired, for a cash consideration of $83.5 million, the activities of Fromage Côté S.A. and Distributions Kingsey Inc., a cheese manufacturer operating in Canada, along with the activities of Schneider Cheese, Inc., a cheese manufacturer operating in the United States.
For more information on the results of the first quarter of fiscal 2006, we invite you to read the attached interim report for the quarter ended June 30, 2005, 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 therefore rise to $0.18 per share from $0.15 per share, for a total of $0.72 per share annually, representing a 20% increase. This dividend will become effective for the dividend payment of September 2, 2005 to shareholders of record on August 19, 2005.
Conference Call
A conference call to discuss the first quarter of fiscal 2006 results will be held on August 2, 2005 at 2:00 PM, Eastern time. To participate in the conference 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/080205/index.php in your web browser.
For those unable to participate, an instant replay will be available until midnight, August 9, 2005. To access the replay dial 1 800 695 2814, passcode 7708496. The conference call will also be archived on the Saputo web site at www.saputo.com.
About Saputo
Solid foundations, a commitment to excellence and dedication to growth are the keystones that have enabled Saputo to evolve as the largest dairy processor in Canada, one of the most important cheese producers in North America, the third dairy processor in Argentina and the largest snack cake manufacturer in Canada. Our products, manufactured in 45 plants that stretch from one end of the Americas to the other, are marketed under such well-known brand names as Saputo, Armstrong, Caron, Cayer, Kingsey, Dairyland, Baxter, Nutrilait, Stella, Frigo, Dragone, Treasure Cave, La Paulina, Ricrem and Vachon. Saputo Inc. is a public company whose shares are listed on the Toronto Stock Exchange under the symbol SAP. Propelled by the same sense of dedication that motivates our 8,500 employees to surpass themselves day after day, we will continue to successfully craft our future. 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 -
To read the report
Information
Claude Pinard
Vice President, Communications
(514) 328-3377
(Montréal, August 2, 2005) – Saputo Inc. released today its financial results for the first quarter of fiscal 2006, which ended June 30, 2005.
- Net earnings closed at $54.2 million, down 7.0% compared to the same period last year.
- Consolidated revenues totalled $1.007 billion, a decrease of 1.2% over the $1.019 billion posted one year earlier. Revenues from our US Dairy Products Sector were negatively affected by a lower average block market(1) per pound of cheese and the appreciation of the Canadian dollar compared to the same period last year. The decrease offset a revenue increase in our Canadian and Other Dairy Products Sector resulting from increased selling prices, higher sales volumes, as well as the inclusion of the activities of Fromage Côté S.A. and Distributions Kingsey Inc., acquired on April 18, 2005. Revenues from our Grocery Products Sector were $2.6 million lower compared to the same period last year.
- Consolidated EBITDA(2) for the first quarter of fiscal 2006 totalled $96.7 million, a decrease of $10.3 million from the $107.0 million posted one year earlier. Even though our Canadian and Other Dairy Products Sector increased its EBITDA by $10.3 million, our US Dairy Products Sector offset this increase and decreased the consolidated EBITBA, mainly due to unfavourable market conditions.
- EBITDA for the Canadian and Other Dairy Products Sector rose to $65.8 million, up 18.6% or $10.3 million over the same period last year. The EBITDA margin increased to 10.1% this year compared to 9.1% last year due mainly to savings derived from rationalization activities undertaken in fiscal 2005 and increased sales volumes.
- EBITDA for the US Dairy Products Sector totalled $25.3 million, resulting in a $19.2 million or 43.1% decrease compared to $44.5 million for the same period last year. A lower average block market per pound of cheese, a less favourable relationship between the average block market per pound of cheese and the cost of milk as raw material, the appreciation of the Canadian dollar along with increased promotional, fuel and ingredient costs compared to the same quarter last year were the major factors contributing to the decrease. During the first quarter of fiscal 2006, the average block market per pound of cheese was US$0.49 lower compared to the same period last year.
- EBITDA for the Grocery Products Sector stood at $5.6 million, a decrease of $1.4 million compared to the same quarter last year. The EBITDA margin went from 17% to 14.5% for the same period. The division incurred costs of $1.2 million related to additional marketing expenses and $0.5 million related to the pension fund in the first quarter of fiscal 2006 as compared to the first quarter of last fiscal year.
- Cash generated before changes in non-cash operating working capital items totalled $73.4 million, a decrease of $3.4 million from the corresponding period last year. The decrease is a direct result of lower earnings generated in the first quarter compared to the same quarter last year.
- During the first quarter of fiscal 2006, the Company acquired, for a cash consideration of $83.5 million, the activities of Fromage Côté S.A. and Distributions Kingsey Inc., a cheese manufacturer operating in Canada, along with the activities of Schneider Cheese, Inc., a cheese manufacturer operating in the United States.
For more information on the results of the first quarter of fiscal 2006, we invite you to read the attached interim report for the quarter ended June 30, 2005, 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 therefore rise to $0.18 per share from $0.15 per share, for a total of $0.72 per share annually, representing a 20% increase. This dividend will become effective for the dividend payment of September 2, 2005 to shareholders of record on August 19, 2005.
Conference Call
A conference call to discuss the first quarter of fiscal 2006 results will be held on August 2, 2005 at 2:00 PM, Eastern time. To participate in the conference 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/080205/index.php in your web browser.
For those unable to participate, an instant replay will be available until midnight, August 9, 2005. To access the replay dial 1 800 695 2814, passcode 7708496. The conference call will also be archived on the Saputo web site at www.saputo.com.
About Saputo
Solid foundations, a commitment to excellence and dedication to growth are the keystones that have enabled Saputo to evolve as the largest dairy processor in Canada, one of the most important cheese producers in North America, the third dairy processor in Argentina and the largest snack cake manufacturer in Canada. Our products, manufactured in 45 plants that stretch from one end of the Americas to the other, are marketed under such well-known brand names as Saputo, Armstrong, Caron, Cayer, Kingsey, Dairyland, Baxter, Nutrilait, Stella, Frigo, Dragone, Treasure Cave, La Paulina, Ricrem and Vachon. Saputo Inc. is a public company whose shares are listed on the Toronto Stock Exchange under the symbol SAP. Propelled by the same sense of dedication that motivates our 8,500 employees to surpass themselves day after day, we will continue to successfully craft our future. 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 -
To read the report
Information
Claude Pinard
Vice President, Communications
(514) 328-3377
Saputo Group Inc.
Camillo Lisio, Executive Vice-President
(514) 328-3314
