Financial Results for the Second Quarter of Fiscal 2006
Financial Results for the Second Quarter of Fiscal 2006
11/07/2005 0:00 UTC
Net earnings down by 1.3% for the Quarter Ended September 30, 2005
Net earnings down 4.2% since the beginning of the Fiscal Year
(Montréal, November 7, 2005) – Saputo Inc. released today its financial results for the second quarter of fiscal 2006, which ended September 30, 2005.
- Net earnings totalled $55.2 million ($0.52 per share), down $0.7 million compared to the $55.9 million ($0.53 per share) for the same quarter in fiscal 2005.
- Consolidated revenues totalled $1.031 billion, an increase of $25.7 million or 2.6% compared to the $1.005 billion for the corresponding period last year. Our Canadian and Other Dairy Products Sector revenues increased by approximately $42 million compared to the same period last year as a result of higher selling prices, higher sales volumes in our Canadian fluid milk activities as well as the inclusion of Fromage Côté acquired on April, 18th 2005. Revenues from our US Dairy Products Sector decreased by approximately $16 million. The appreciation of the Canadian dollar and a lower average block market(1) per pound of cheese more than offset the 8.1% volume increase during the quarter. Revenues from our Grocery Products Sector totalled $43.0 million, identical to the revenues posted in the corresponding period last year.
- Consolidated EBITDA(2) stood at $101.5 million, an increase of $0.6 million compared to $100.9 million for the corresponding period last year. The EBITDA of our Canadian and Other Dairy Products Sector increased by approximately $10 million. Offsetting this increase was a decrease in the EBITDA of our US Dairy Products Sector of approximately $9 million, mainly due to unfavourable market conditions. Our Grocery Products Sector EBITDA for the second quarter remained relatively stable compared to the same period last year.
- EBITDA for the Canadian and Other Dairy Products Sector totalled $69.7 million, an increase of 16.6% or $9.9 million compared to $59.8 million for the same period last year. This increase is mainly due to savings derived from rationalizations activities undertaken in Fiscal 2005, increased revenues sales volumes from our Canadian fluid milk activities, and the inclusion of Fromage Côté.
- EBITDA for the US Dairy Products Sector totalled $25 million, resulting in a $9.1 million or 26.7% decrease compared to $34.1 million for the same period last year. This decrease is due to 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 the continued increase in fuel costs and additional promotional costs. These factors offset EBITDA increases resulting from improved margins and higher sales volumes.
- EBITDA for the Grocery Products Sector stood at $6.8 million, a decrease of $0.2 million compared to the same quarter last year. Additional pension costs and increased marketing expenses together totalling approximately $1.7 million were offset by improved margins and additional EBITDA generated by sales to new customers.
- Cash generated by operating activities before changes in non-cash working capital items amounted to $74.4 million, an increase of $0.7 million compared to $73.7 million for the same period last year.
For more information on the results of the second quarter of fiscal 2006, please read the attached interim report for the quarter ended September 30, 2005, which forms an integral part of this press release.
Normal Course Issuer Bid
The Company has the intention to purchase by way of a normal course issuer bid (the “Bid”), for cancellation purposes, some of its common shares through the facilities of the Toronto Stock Exchange, beginning on November 11, 2005.
Under the Bid, the Company may repurchase for cancellation up to 5,256,369 common shares. This represents 5% of its 105,127,391 issued and outstanding common shares as of October 28, 2005. These purchases will be made in accordance with applicable regulations over a maximum period of 12 months beginning on November 11, 2005 and ending on November 10, 2006. The Company will not purchase greater than 2% of the issued and outstanding common shares in any 30-day period. 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. The Company did not repurchase any of its shares within the previous twelve months.
The Company believes that the purchase of its own shares may, in appropriate circumstances, be a responsible investment of funds on hand.
Dividends
The Board of Directors declared a dividend of $0.18 per share, payable on December 9, 2005 to shareholders of record on November 25, 2005. This dividend relates to the quarter ended September 30, 2005.
Voting Trust
The Company has been informed that the agreement entered into in 1997 pursuant to which Gestion Jolina Inc., a holding company controlled by Mr. Emanuele (Lino) Saputo, was granted a power of attorney by the holding companies owned and controlled by Emanuele (Lino) Saputo’s brothers and sisters and their families (collectively, the “Saputo Shareholders”) will terminate effective March 31, 2006 instead of December 31, 2007. The Saputo Shareholders advised the Company that this decision was taken in light of the current size of the Company and its level of development, which no longer warrant the existence of the agreement.
This agreement granted to Gestion Jolina Inc. a power of attorney to vote the 25,405,164 Common Shares held by the other Saputo Shareholders, representing 24.17% of the Common Shares issued and outstanding as of October 28, 2005. Following the termination of this agreement in March 2006, Gestion Jolina Inc. will no longer exercise the voting rights with respect to such shares.
Gestion Jolina Inc. together with another entity controlled by Mr. Emanuele (Lino) Saputo currently hold 34,939,962 Common Shares, representing 33.24% of the Common Shares issued and outstanding as of October 28, 2005.
Conference Call
A conference call to discuss the second quarter of fiscal 2006 results will be held on November 7, 2005 at 3:00 PM, Eastern time. To participate in the conference dial 1 800 525 6497. 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/110705/index.php in your web browser.
For those unable to participate, an instant replay will be available until midnight, November 14, 2005. To access the replay dial 1 800 365 8354, passcode 9954215. 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, Alexis de Portneuf, 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.
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Information
Manon Goudreault
Director, Communications
514.328.3377
Report
Net earnings down 4.2% since the beginning of the Fiscal Year
(Montréal, November 7, 2005) – Saputo Inc. released today its financial results for the second quarter of fiscal 2006, which ended September 30, 2005.
- Net earnings totalled $55.2 million ($0.52 per share), down $0.7 million compared to the $55.9 million ($0.53 per share) for the same quarter in fiscal 2005.
- Consolidated revenues totalled $1.031 billion, an increase of $25.7 million or 2.6% compared to the $1.005 billion for the corresponding period last year. Our Canadian and Other Dairy Products Sector revenues increased by approximately $42 million compared to the same period last year as a result of higher selling prices, higher sales volumes in our Canadian fluid milk activities as well as the inclusion of Fromage Côté acquired on April, 18th 2005. Revenues from our US Dairy Products Sector decreased by approximately $16 million. The appreciation of the Canadian dollar and a lower average block market(1) per pound of cheese more than offset the 8.1% volume increase during the quarter. Revenues from our Grocery Products Sector totalled $43.0 million, identical to the revenues posted in the corresponding period last year.
- Consolidated EBITDA(2) stood at $101.5 million, an increase of $0.6 million compared to $100.9 million for the corresponding period last year. The EBITDA of our Canadian and Other Dairy Products Sector increased by approximately $10 million. Offsetting this increase was a decrease in the EBITDA of our US Dairy Products Sector of approximately $9 million, mainly due to unfavourable market conditions. Our Grocery Products Sector EBITDA for the second quarter remained relatively stable compared to the same period last year.
- EBITDA for the Canadian and Other Dairy Products Sector totalled $69.7 million, an increase of 16.6% or $9.9 million compared to $59.8 million for the same period last year. This increase is mainly due to savings derived from rationalizations activities undertaken in Fiscal 2005, increased revenues sales volumes from our Canadian fluid milk activities, and the inclusion of Fromage Côté.
- EBITDA for the US Dairy Products Sector totalled $25 million, resulting in a $9.1 million or 26.7% decrease compared to $34.1 million for the same period last year. This decrease is due to 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 the continued increase in fuel costs and additional promotional costs. These factors offset EBITDA increases resulting from improved margins and higher sales volumes.
- EBITDA for the Grocery Products Sector stood at $6.8 million, a decrease of $0.2 million compared to the same quarter last year. Additional pension costs and increased marketing expenses together totalling approximately $1.7 million were offset by improved margins and additional EBITDA generated by sales to new customers.
- Cash generated by operating activities before changes in non-cash working capital items amounted to $74.4 million, an increase of $0.7 million compared to $73.7 million for the same period last year.
For more information on the results of the second quarter of fiscal 2006, please read the attached interim report for the quarter ended September 30, 2005, which forms an integral part of this press release.
Normal Course Issuer Bid
The Company has the intention to purchase by way of a normal course issuer bid (the “Bid”), for cancellation purposes, some of its common shares through the facilities of the Toronto Stock Exchange, beginning on November 11, 2005.
Under the Bid, the Company may repurchase for cancellation up to 5,256,369 common shares. This represents 5% of its 105,127,391 issued and outstanding common shares as of October 28, 2005. These purchases will be made in accordance with applicable regulations over a maximum period of 12 months beginning on November 11, 2005 and ending on November 10, 2006. The Company will not purchase greater than 2% of the issued and outstanding common shares in any 30-day period. 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. The Company did not repurchase any of its shares within the previous twelve months.
The Company believes that the purchase of its own shares may, in appropriate circumstances, be a responsible investment of funds on hand.
Dividends
The Board of Directors declared a dividend of $0.18 per share, payable on December 9, 2005 to shareholders of record on November 25, 2005. This dividend relates to the quarter ended September 30, 2005.
Voting Trust
The Company has been informed that the agreement entered into in 1997 pursuant to which Gestion Jolina Inc., a holding company controlled by Mr. Emanuele (Lino) Saputo, was granted a power of attorney by the holding companies owned and controlled by Emanuele (Lino) Saputo’s brothers and sisters and their families (collectively, the “Saputo Shareholders”) will terminate effective March 31, 2006 instead of December 31, 2007. The Saputo Shareholders advised the Company that this decision was taken in light of the current size of the Company and its level of development, which no longer warrant the existence of the agreement.
This agreement granted to Gestion Jolina Inc. a power of attorney to vote the 25,405,164 Common Shares held by the other Saputo Shareholders, representing 24.17% of the Common Shares issued and outstanding as of October 28, 2005. Following the termination of this agreement in March 2006, Gestion Jolina Inc. will no longer exercise the voting rights with respect to such shares.
Gestion Jolina Inc. together with another entity controlled by Mr. Emanuele (Lino) Saputo currently hold 34,939,962 Common Shares, representing 33.24% of the Common Shares issued and outstanding as of October 28, 2005.
Conference Call
A conference call to discuss the second quarter of fiscal 2006 results will be held on November 7, 2005 at 3:00 PM, Eastern time. To participate in the conference dial 1 800 525 6497. 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/110705/index.php in your web browser.
For those unable to participate, an instant replay will be available until midnight, November 14, 2005. To access the replay dial 1 800 365 8354, passcode 9954215. 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, Alexis de Portneuf, 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.
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Information
Manon Goudreault
Director, Communications
514.328.3377
Report
Saputo Group Inc.
Camillo Lisio, Executive Vice-President
(514) 328-3314
