Financial results for the first quarter of fiscal 2007, ended June 30, 2006
Financial results for the first quarter of fiscal 2007, ended June 30, 2006
08/02/2006 0:00 UTC
Net earnings at $53.3 million, down 1.7% for the quarter
(Montréal, August 2, 2006) – Saputo Inc. released today its financial results for the first quarter of fiscal 2007, which ended June 30, 2006.
- Net earnings totalled $53.3 million ($0.51 basic per share), down $0.9 million compared to the $54.2 million ($0.52 basic per share) for the same quarter in fiscal 2006. During the quarter, the Company benefited from a one-time tax reduction to adjust future tax balances, due to a reduction in Canadian federal tax rates, thus increasing net earnings by approximately $4 million.
- Consolidated revenues for the quarter ended June 30, 2006 totalled $981.1 million, a $25.6 million decrease compared to the $1.007 billion for the same period last year. The reduction is attributed to the US Dairy Products Sector, whose revenues decreased by approximately $73 million compared to the same period last year, as a result of a lower average block market per pound of cheese and the continued appreciation of the Canadian dollar. The Canadian and Other Dairy Products Sector revenues increased by approximately $45 million compared to the same period last year. Sales volume increases and higher selling prices in all divisions within this sector, along with the inclusion of our German operation acquired on April 13, 2006 are the main factors responsible for the increase. These increases offset the negative effect of the appreciation of the Canadian dollar on the revenues from the Argentinean operation. Revenues from the Grocery Products Sector increased by approximately $2 million compared to the same quarter last year, due mostly to co-packing agreements for the manufacturing of products for the US market.
- Consolidated EBITDA stood at $93.1 million, a decrease of $3.6 million compared to the $96.7 million for the corresponding quarter in fiscal 2006. Higher EBITDA in the Canadian and Other Dairy Products Sector of approximately $6 million was offset by a decrease in EBITDA of approximately $11 million in the US Dairy Products Sector. The Grocery Products Sector EBITDA increased by $1.3 million compared to the same quarter last year.
- EBITDA for the Canadian and Other Dairy Products Sector totalled $71.5 million, an increase of 8.7% compared to $65.8 million for the same period last year. This increase is mainly due to the benefit of rationalization activities completed in prior years, better efficiencies generated in operations, increased revenues from the Canadian fluid milk activities and benefits generated by the newly formed Speciality Cheese Group. During the first quarter of fiscal 2007, the by-product market price negatively impacted EBITDA by approximately $1 million. For the same period last year, rationalization charges of $1 million were incurred. In Argentina, EBITDA continued to show improvements, although negatively affected by the appreciation of the Canadian dollar and changes in the export tax.
- EBITDA for the US Dairy Products Sector totalled $14.7 million, resulting in a $10.6 million or 41.9% decrease, compared to $25.3 million for the same period last year. This decrease is due to a lower 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, the continued increase in fuel and ingredient costs and rationalization charges of $1.3 million incurred for the closure of the plant in Peru, Indiana.
- EBITDA for the Grocery Products Sector stood at $6.9 million, an increase of $1.3 million compared to the same quarter last year due mainly to a reduction in expenses related to the three-year investment program, as announced in the 2006 annual report.
- Cash generated by operating activities before changes in non-cash working capital items amounted to $68.0 million, a decrease of $5.4 million compared to $73.4 million for the same period last year.
- In the first quarter, the Company used $7.6 million for the acquisition of the activities of Spezialitäten-Käserei De Lucia Gmbh, a cheese manufacturer operating in Germany, completed on April 13, 2006. The Company added $17.6 million in fixed assets during the quarter. The Company also issued shares for a cash consideration of $4.9 million as part of the Stock Option Plan and purchased shares for cancellation for an amount of $24.5 million as part of the normal course issuer bid.
For more information on the results of the first quarter of fiscal 2007, please read the attached interim report for the quarter ended June 30, 2006, 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 $0.20 per share from $0.18 per share, for a total of $0.80 per share annually, representing an 11.1% increase. This dividend will become effective for the dividend payment of September 15, 2006 to shareholders of record on September 4, 2006.
Conference Call
A conference call to discuss the first quarter results of fiscal 2007 will be held on Wednesday, August 2, 2006 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/080206/index.php in your web browser.
For those unable to participate, an instant replay will be available until midnight, Wednesday, August 9, 2006. To access the replay dial 1 800 695 9469, ID number 2669897. 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, amongst 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.
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Information
Manon Goudreault
Director, Communications
514.328.3377
Interim report
(Montréal, August 2, 2006) – Saputo Inc. released today its financial results for the first quarter of fiscal 2007, which ended June 30, 2006.
- Net earnings totalled $53.3 million ($0.51 basic per share), down $0.9 million compared to the $54.2 million ($0.52 basic per share) for the same quarter in fiscal 2006. During the quarter, the Company benefited from a one-time tax reduction to adjust future tax balances, due to a reduction in Canadian federal tax rates, thus increasing net earnings by approximately $4 million.
- Consolidated revenues for the quarter ended June 30, 2006 totalled $981.1 million, a $25.6 million decrease compared to the $1.007 billion for the same period last year. The reduction is attributed to the US Dairy Products Sector, whose revenues decreased by approximately $73 million compared to the same period last year, as a result of a lower average block market per pound of cheese and the continued appreciation of the Canadian dollar. The Canadian and Other Dairy Products Sector revenues increased by approximately $45 million compared to the same period last year. Sales volume increases and higher selling prices in all divisions within this sector, along with the inclusion of our German operation acquired on April 13, 2006 are the main factors responsible for the increase. These increases offset the negative effect of the appreciation of the Canadian dollar on the revenues from the Argentinean operation. Revenues from the Grocery Products Sector increased by approximately $2 million compared to the same quarter last year, due mostly to co-packing agreements for the manufacturing of products for the US market.
- Consolidated EBITDA stood at $93.1 million, a decrease of $3.6 million compared to the $96.7 million for the corresponding quarter in fiscal 2006. Higher EBITDA in the Canadian and Other Dairy Products Sector of approximately $6 million was offset by a decrease in EBITDA of approximately $11 million in the US Dairy Products Sector. The Grocery Products Sector EBITDA increased by $1.3 million compared to the same quarter last year.
- EBITDA for the Canadian and Other Dairy Products Sector totalled $71.5 million, an increase of 8.7% compared to $65.8 million for the same period last year. This increase is mainly due to the benefit of rationalization activities completed in prior years, better efficiencies generated in operations, increased revenues from the Canadian fluid milk activities and benefits generated by the newly formed Speciality Cheese Group. During the first quarter of fiscal 2007, the by-product market price negatively impacted EBITDA by approximately $1 million. For the same period last year, rationalization charges of $1 million were incurred. In Argentina, EBITDA continued to show improvements, although negatively affected by the appreciation of the Canadian dollar and changes in the export tax.
- EBITDA for the US Dairy Products Sector totalled $14.7 million, resulting in a $10.6 million or 41.9% decrease, compared to $25.3 million for the same period last year. This decrease is due to a lower 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, the continued increase in fuel and ingredient costs and rationalization charges of $1.3 million incurred for the closure of the plant in Peru, Indiana.
- EBITDA for the Grocery Products Sector stood at $6.9 million, an increase of $1.3 million compared to the same quarter last year due mainly to a reduction in expenses related to the three-year investment program, as announced in the 2006 annual report.
- Cash generated by operating activities before changes in non-cash working capital items amounted to $68.0 million, a decrease of $5.4 million compared to $73.4 million for the same period last year.
- In the first quarter, the Company used $7.6 million for the acquisition of the activities of Spezialitäten-Käserei De Lucia Gmbh, a cheese manufacturer operating in Germany, completed on April 13, 2006. The Company added $17.6 million in fixed assets during the quarter. The Company also issued shares for a cash consideration of $4.9 million as part of the Stock Option Plan and purchased shares for cancellation for an amount of $24.5 million as part of the normal course issuer bid.
For more information on the results of the first quarter of fiscal 2007, please read the attached interim report for the quarter ended June 30, 2006, 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 $0.20 per share from $0.18 per share, for a total of $0.80 per share annually, representing an 11.1% increase. This dividend will become effective for the dividend payment of September 15, 2006 to shareholders of record on September 4, 2006.
Conference Call
A conference call to discuss the first quarter results of fiscal 2007 will be held on Wednesday, August 2, 2006 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/080206/index.php in your web browser.
For those unable to participate, an instant replay will be available until midnight, Wednesday, August 9, 2006. To access the replay dial 1 800 695 9469, ID number 2669897. 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, amongst 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.
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Information
Manon Goudreault
Director, Communications
514.328.3377
Interim report
Lynda Leith
Investor Relations
(514) 328-3381
