Financial Results for Fiscal 2005
Financial Results for Fiscal 2005
06/06/2005 0:00 UTC
Net earnings up 9.3%
(Montréal, June 6, 2005) – Saputo Inc. revealed today its financial results for fiscal 2005, which ended March 31, 2005.
- Net earnings amounted to $232.1 million or $2.23 (basic) per share, a 9.3% increase over $212.4 million or $2.05 (basic) per share in fiscal 2004.
- Revenues totalled $3.883 billion, an increase of $313.0 million or 8.8% compared to $3.570 billion in fiscal 2004.
- Earnings before interest, income taxes, depreciation and amortization (EBITDA)amounted to $407.8 million, an increase of $4.5 million compared to $403.3 million in fiscal 2004.
- EBITDA in the Canadian and Other Dairy Products Sector totalled $244.2 million, as compared to $209.9 million a year earlier, an increase of $34.3 million or 16.3%. The EBITDA margin in this sector climbed from 9.7% in the previous fiscal year to 10.1% in fiscal 2005. During the year, this sector experienced increased volumes in all its divisions. Included in our EBITDA for fiscal 2005 is a $2.6 million gain on disposal of fixed assets held for sale.
- EBITDA in the US Dairy Products Sector totalled $137.0 million, a $23.9 million or 14.9% decrease compared to $160.9 million posted in fiscal 2004. Although the sector experienced a more favourable average block market per pound of cheese, it was negatively affected by the relationship between the average block market per pound of cheese and the cost of milk as raw material.
- EBITDA in the Grocery Products Sector amounted to $26.6 million, a drop of $5.9 million from that of the previous fiscal year. The EBITDA margin dipped from 19.4% in fiscal 2004 to 16.7% in fiscal 2005. The sector was affected throughout the fiscal year by reduced revenues, and additional pension, raw material, packaging and labour costs.
- Cash generated by operating activities before changes in non-cash working capital items totalled $305.3 million for fiscal 2005, slightly higher compared to the $301.3 million for fiscal 2004.
- Repayment of approximately $113 million of long-term debt and bank loans, issuance of shares for a cash consideration of $13.5 million as part of the Stock Option Plan, and payment of
$59.5 million in dividends.
Summary of Fourth Quarter Results
- Net earnings reached $59.7 million, an increase of $1.6 million from the same quarter in fiscal 2004.
- Revenues totalled $916.8 million, a decrease of 3.1% compared to $945.9 million for the same quarter last fiscal year. The decrease is attributed to our US Dairy Products Sector and our Grocery Products Sector. The appreciation of the Canadian dollar eroded approximately $24 million in revenues. This was partially offset by a higher average block market per pound of cheese, which increased revenues by $15 million. The Grocery Products Sector experienced reduced revenues of approximately $7 million principally due to reduced volumes in relation with the price increases implemented in February 2005 and Easter Holidays, which occurred during the fourth quarter and which traditionally is a slow period for the sector. Revenues from our Canadian and Other Dairy Products Sector were slightly lower in comparison to the same period last fiscal year, mainly due to lower volumes in our Canadian cheese activities.
- EBITDA for the fourth quarter totalled $103.3 million, a $3.3 million decrease from the same period last fiscal year.
- EBITDA from our US Dairy Products Sector decreased by approximately $13 million compared to the corresponding period last fiscal year. The appreciation of the Canadian dollar along with an unfavourable relationship between the average block market per pound of cheese and the cost of milk as raw material were the driving factors behind the decrease.
- The EBITDA of our Canadian and Other Dairy Products Sector increased by approximately $12 million in comparison to the corresponding period last fiscal year. The increase is attributed to the benefits derived from rationalization activities undertaken in the prior fiscal year, for which fiscal 2004 fourth quarter included $2.7 million in rationalization expenses, increased sales volumes specifically in our specialty cheese category, more interesting margins achieved in our Argentina operations, and a gain on disposal of fixed assets held for sale in the amount of $2.6 million.
- The Grocery Products Sector EBITDA decreased by approximately $2 million as a result of reduced revenues, and additional pension, raw material, packaging and labour costs.
Outlook
Although no acquisitions were made during the fiscal year, we nonetheless realized growth, and we did so on several levels. It was essentially organic growth that enabled us to generate a return on equity of 18.8%. Our vision for our development embodies a number of components: organic growth, consolidation of our position in current markets, growth by acquisitions, and preparing our future by tailoring our plans accordingly.
Each of our divisions has set itself precise objectives for fiscal 2006, all of which should result in increased revenues, EBITDA, cash flow generated and consolidated net earnings. We are mainly relying on organic growth and improvement in our procedures and our efficiency to achieve continuous growth in our overall profitability.
During fiscal 2005, we started working on the acquisition of two businesses, which were announced during the early months of fiscal 2006. Certainly the Company’s larger-scale growth will be by way of acquisitions, and we will continue to toil steadily in that direction. At all levels, our growth will not take place at the expense of our profitability.
Our financial position is excellent, and provides us with considerable flexibility in our future development for the 2006 fiscal year as well as for the coming years. Our destiny is ours alone to shape.
Financial Statements and Management’s Analysis
For more information on the results for fiscal 2005 as well as the fourth quarter of fiscal 2005, reference is made to the audited consolidated financial statements and the notes thereto and to our Management’s Analysis for the fiscal year ended March 31, 2005. These documents can be obtained on SEDAR at www.sedar.com.
Forward-Looking Statements
This press release document contains management’s analysis on forward-looking statements. Caution should be used in the interpretation of management’s analysis and statements, since management often makes reference to objectives and strategies, which contain a certain element of risk and uncertainty. Due to the nature of our business, the risks and uncertainties associated with it could cause the results to differ materially from those stated in such forward-looking statements.
Dividends
The Board of Directors of the Company declared a dividend of $0.15 per share, payable on July 7, 2005, to shareholders of record as of June 22, 2005. This dividend is for the quarter ended March 31, 2005.
Conference Call
A conference call to discuss the fiscal 2005 results will be held on Monday, June 6, 2005 at 1:30 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/060605/index.php in your web browser.
For those unable to participate, an instant replay will be available until midnight, Monday, June 13, 2005. To access the replay dial 1 800 374-8183, passcode 6664568. 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 46 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)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.
(2)“Average block market” is the average daily price of a 40 pound block of cheddar cheese traded on the Chicago Mercantile Exchange (CME), used as the base price for the cheese.
- 30 -
Claude Pinard
Vice President, Communications
(514) 328-3377
(Montréal, June 6, 2005) – Saputo Inc. revealed today its financial results for fiscal 2005, which ended March 31, 2005.
- Net earnings amounted to $232.1 million or $2.23 (basic) per share, a 9.3% increase over $212.4 million or $2.05 (basic) per share in fiscal 2004.
- Revenues totalled $3.883 billion, an increase of $313.0 million or 8.8% compared to $3.570 billion in fiscal 2004.
- Earnings before interest, income taxes, depreciation and amortization (EBITDA)amounted to $407.8 million, an increase of $4.5 million compared to $403.3 million in fiscal 2004.
- EBITDA in the Canadian and Other Dairy Products Sector totalled $244.2 million, as compared to $209.9 million a year earlier, an increase of $34.3 million or 16.3%. The EBITDA margin in this sector climbed from 9.7% in the previous fiscal year to 10.1% in fiscal 2005. During the year, this sector experienced increased volumes in all its divisions. Included in our EBITDA for fiscal 2005 is a $2.6 million gain on disposal of fixed assets held for sale.
- EBITDA in the US Dairy Products Sector totalled $137.0 million, a $23.9 million or 14.9% decrease compared to $160.9 million posted in fiscal 2004. Although the sector experienced a more favourable average block market per pound of cheese, it was negatively affected by the relationship between the average block market per pound of cheese and the cost of milk as raw material.
- EBITDA in the Grocery Products Sector amounted to $26.6 million, a drop of $5.9 million from that of the previous fiscal year. The EBITDA margin dipped from 19.4% in fiscal 2004 to 16.7% in fiscal 2005. The sector was affected throughout the fiscal year by reduced revenues, and additional pension, raw material, packaging and labour costs.
- Cash generated by operating activities before changes in non-cash working capital items totalled $305.3 million for fiscal 2005, slightly higher compared to the $301.3 million for fiscal 2004.
- Repayment of approximately $113 million of long-term debt and bank loans, issuance of shares for a cash consideration of $13.5 million as part of the Stock Option Plan, and payment of
$59.5 million in dividends.
Summary of Fourth Quarter Results
- Net earnings reached $59.7 million, an increase of $1.6 million from the same quarter in fiscal 2004.
- Revenues totalled $916.8 million, a decrease of 3.1% compared to $945.9 million for the same quarter last fiscal year. The decrease is attributed to our US Dairy Products Sector and our Grocery Products Sector. The appreciation of the Canadian dollar eroded approximately $24 million in revenues. This was partially offset by a higher average block market per pound of cheese, which increased revenues by $15 million. The Grocery Products Sector experienced reduced revenues of approximately $7 million principally due to reduced volumes in relation with the price increases implemented in February 2005 and Easter Holidays, which occurred during the fourth quarter and which traditionally is a slow period for the sector. Revenues from our Canadian and Other Dairy Products Sector were slightly lower in comparison to the same period last fiscal year, mainly due to lower volumes in our Canadian cheese activities.
- EBITDA for the fourth quarter totalled $103.3 million, a $3.3 million decrease from the same period last fiscal year.
- EBITDA from our US Dairy Products Sector decreased by approximately $13 million compared to the corresponding period last fiscal year. The appreciation of the Canadian dollar along with an unfavourable relationship between the average block market per pound of cheese and the cost of milk as raw material were the driving factors behind the decrease.
- The EBITDA of our Canadian and Other Dairy Products Sector increased by approximately $12 million in comparison to the corresponding period last fiscal year. The increase is attributed to the benefits derived from rationalization activities undertaken in the prior fiscal year, for which fiscal 2004 fourth quarter included $2.7 million in rationalization expenses, increased sales volumes specifically in our specialty cheese category, more interesting margins achieved in our Argentina operations, and a gain on disposal of fixed assets held for sale in the amount of $2.6 million.
- The Grocery Products Sector EBITDA decreased by approximately $2 million as a result of reduced revenues, and additional pension, raw material, packaging and labour costs.
Outlook
Although no acquisitions were made during the fiscal year, we nonetheless realized growth, and we did so on several levels. It was essentially organic growth that enabled us to generate a return on equity of 18.8%. Our vision for our development embodies a number of components: organic growth, consolidation of our position in current markets, growth by acquisitions, and preparing our future by tailoring our plans accordingly.
Each of our divisions has set itself precise objectives for fiscal 2006, all of which should result in increased revenues, EBITDA, cash flow generated and consolidated net earnings. We are mainly relying on organic growth and improvement in our procedures and our efficiency to achieve continuous growth in our overall profitability.
During fiscal 2005, we started working on the acquisition of two businesses, which were announced during the early months of fiscal 2006. Certainly the Company’s larger-scale growth will be by way of acquisitions, and we will continue to toil steadily in that direction. At all levels, our growth will not take place at the expense of our profitability.
Our financial position is excellent, and provides us with considerable flexibility in our future development for the 2006 fiscal year as well as for the coming years. Our destiny is ours alone to shape.
Financial Statements and Management’s Analysis
For more information on the results for fiscal 2005 as well as the fourth quarter of fiscal 2005, reference is made to the audited consolidated financial statements and the notes thereto and to our Management’s Analysis for the fiscal year ended March 31, 2005. These documents can be obtained on SEDAR at www.sedar.com.
Forward-Looking Statements
This press release document contains management’s analysis on forward-looking statements. Caution should be used in the interpretation of management’s analysis and statements, since management often makes reference to objectives and strategies, which contain a certain element of risk and uncertainty. Due to the nature of our business, the risks and uncertainties associated with it could cause the results to differ materially from those stated in such forward-looking statements.
Dividends
The Board of Directors of the Company declared a dividend of $0.15 per share, payable on July 7, 2005, to shareholders of record as of June 22, 2005. This dividend is for the quarter ended March 31, 2005.
Conference Call
A conference call to discuss the fiscal 2005 results will be held on Monday, June 6, 2005 at 1:30 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/060605/index.php in your web browser.
For those unable to participate, an instant replay will be available until midnight, Monday, June 13, 2005. To access the replay dial 1 800 374-8183, passcode 6664568. 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 46 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)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.
(2)“Average block market” is the average daily price of a 40 pound block of cheddar cheese traded on the Chicago Mercantile Exchange (CME), used as the base price for the cheese.
- 30 -
Claude Pinard
Vice President, Communications
(514) 328-3377
Lynda Leith
Investor Relations
(514) 328-3381
