Financial Results for the Second Quarter of Fiscal 2009, Ended September 30, 2008
Financial Results for the Second Quarter of Fiscal 2009, Ended September 30, 2008
11/04/2008 0:00 UTC
Net earnings at $69.0 million, up 10.4% for the quarter
Net earnings at $152.0 million, up 16.0% since the beginning of fiscal 2009
(Montréal, November 4, 2008) – Saputo Inc. released today its financial results for the second quarter of fiscal 2009, which ended September 30, 2008.
- Net earnings for the quarter totalled $69.0 million ($0.34 basic per share), an increase of $6.5 million compared to $62.5 million ($0.31 basic per share) for the same quarter last fiscal year. Included in the results of the same quarter last fiscal year is an income tax charge of approximately $3 million due to a reduction of future income tax assets recorded in previous fiscal years.
- Consolidated revenues for the quarter ended September 30, 2008 amounted to $1.454 billion, an increase of $165.0 million or 12.8% in comparison to $1.289 billion for the corresponding quarter last fiscal year. The increase is due mainly to our USA Dairy Products Sector, whose revenues increased by approximately $99 million. The inclusion of the activities of Alto Dairy Cooperative acquired on April 1st, 2008 (Alto Acquisition), partially offset by a lower average block1 market per pound of cheese and a less favourable by-product market, explains the revenue increase as compared to the same period last fiscal year. Revenues from our Canada, Europe and Argentina (CEA) Dairy Products Sector increased by approximately $67 million. Higher selling prices in accordance with the increase in the cost of milk as raw material in Canada and in Argentina, and increased sales volume from our Dairy Products Division (Argentina) are the main factors explaining the revenue increase. Revenues from our Grocery Products Sector decreased by approximately $1 million in comparison to the same quarter last fiscal year.
- Consolidated EBITDA2 amounted to $129.9 million, an increase of $5.8 million or 4.7% in comparison to $124.1 million for the same quarter last fiscal year. The increase results from higher EBITDA in our CEA Dairy Products Sector of approximately $10.2 million. The EBITDA of our USA Dairy Products Sector decreased by approximately $3 million and the EBITDA of our Grocery Products Sector decreased by approximately $1.4 million compared to same quarter last fiscal year.
- EBITDA for the CEA Dairy Products Sector amounted to $94.8 million, an increase of 12.1% in comparison to the same quarter last fiscal year. This increase was mainly due to the increase in volumes in our Argentinean domestic and export markets and the continued benefits derived from rationalization activities completed in prior years in our Canadian operations. These positive factors were partially offset by less favourable by-product market conditions.
- EBITDA for the USA Dairy Products Sector totalled $31.1 million, a decrease of 8.8% compared to the same period last fiscal year. A less favourable by-product market and increased operational costs are the main factors contributing to this decrease, partially offset by the contribution of the Alto Acquisition and a more favourable relationship between the average block market per pound of cheese and the cost of milk as raw material.
- EBITDA for the Grocery Products Sector amounted to $4.0 million, a decrease of 25.9% compared to the corresponding quarter last fiscal year. This is as a result of a decrease in sales volume and increased costs, which offset the benefits of the price increase that took effect in mid-November 2007.
- Cash generated by operating activities amounted to $111.3 million, compared to $81.7 million for the same period last fiscal year.
- In the second quarter, the Company issued shares for a cash consideration of $4.6 million, as part of the stock option plan and repaid $52.6 million of bank loans and paid $53.7 million in dividends.
For more information on the results of the second quarter of fiscal 2009, please read the attached interim report for the quarter ended September 30, 2008, which forms an integral part of this press release.
Dividends
The Board of Directors declared a quarterly dividend of $0.14 per share payable on December 19, 2008 to common shareholders of record on December 8, 2008.
Normal Course Issuer Bid
The Company has the intention to purchase by means of open market transactions or such other means as may be permitted by the Toronto Stock Exchange (TSX) or a securities regulatory authority, for cancellation purposes, some of its common shares (Common Shares) by way of a normal course issuer bid (Bid) that will begin on November 13, 2008, subject to regulatory approval.
Under the Bid, Saputo may repurchase for cancellation up to 10,340,377 Common Shares. This represents 5% of its 206,807,551 issued and outstanding Common Shares as of October 31, 2008. The average daily trading volume of Saputo’s Common Shares over the most recently completed six (6) calendar months was 260,589. Accordingly, the Company is entitled to purchase, on any trading day, up to 65,147 common shares. These purchases will be made in accordance with applicable regulations over a maximum period of 12 months beginning on November 13, 2008 and ending on November 12, 2009. The consideration that the Company will pay for any Common Shares acquired by it under the Bid will be in cash at the market price of such Common Shares at the time of acquisition. Within the previous twelve months, Saputo did not purchase any of its Common Shares under the normal course issuer bid established in November 2007.
The Company believes that the purchase by Saputo of its own shares may, in appropriate circumstances, be a responsible investment of funds on hand.
To the knowledge of Saputo, no director, senior officer or associate of a director or senior officer of Saputo, person acting jointly or in concert with the Company, or person holding 10% or more of any class of equity securities of Saputo currently intends to sell any Common Shares under this normal course issuer bid. However, sales by such persons through the facilities of TSX may occur if the personal circumstances of any such person change or any such person makes a decision unrelated to these normal course purchases. The benefits to any such person whose Common Shares are purchased would be the same as the benefits available to all other holders whose Common Shares are purchased.
Conference Call
A conference call to discuss the second quarter results of fiscal 2009 will be held on Tuesday, November 4, 2008, at 2:30 PM, Eastern time. To participate in the conference call, dial 1.888.241.0326, ID number 69540175. 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/110408/index.php in your web browser.
For those unable to participate, a replay will be available until midnight, Eastern time, Tuesday, November 11, 2008. To access the replay, dial 1.800.695.9456, ID number 69540175. A replay of the conference call will also be available on the Company’s web site at www.saputo.com.
About Saputo
Together, over the years, we have aspired to grow, exploring new opportunities while staying true to our culture. Our progress is owed to the continued dedication of our 9,200 employees, who, across 5 countries, team up every day to go further. They craft, market and distribute a wide range of high-quality products, including cheese, milk, yogurt, dairy ingredients and snack-cakes. Saputo is the 15th largest dairy processor in the world, the largest in Canada, the third largest in Argentina, among the top three cheese producers in the United States, and the largest snack-cake manufacturer in Canada. Consumers and customers in over 40 countries appreciate our products distributed under our well-known brands such as Saputo, Alexis de Portneuf, Armstrong, Baxter, Dairyland, Danscorella, De Lucia, Dragone, DuVillage 1860, Frigo, Kingsey, La Paulina, Nutrilait, Ricrem, Stella, Treasure Cave, HOP&GO!, Rondeau and Vachon. Saputo Inc. is a public company whose shares are traded on the Toronto Stock Exchange under the symbol SAP.
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
Karine Vachon
Advisor, Communications
514.328.3377
Report
Net earnings at $152.0 million, up 16.0% since the beginning of fiscal 2009
(Montréal, November 4, 2008) – Saputo Inc. released today its financial results for the second quarter of fiscal 2009, which ended September 30, 2008.
- Net earnings for the quarter totalled $69.0 million ($0.34 basic per share), an increase of $6.5 million compared to $62.5 million ($0.31 basic per share) for the same quarter last fiscal year. Included in the results of the same quarter last fiscal year is an income tax charge of approximately $3 million due to a reduction of future income tax assets recorded in previous fiscal years.
- Consolidated revenues for the quarter ended September 30, 2008 amounted to $1.454 billion, an increase of $165.0 million or 12.8% in comparison to $1.289 billion for the corresponding quarter last fiscal year. The increase is due mainly to our USA Dairy Products Sector, whose revenues increased by approximately $99 million. The inclusion of the activities of Alto Dairy Cooperative acquired on April 1st, 2008 (Alto Acquisition), partially offset by a lower average block1 market per pound of cheese and a less favourable by-product market, explains the revenue increase as compared to the same period last fiscal year. Revenues from our Canada, Europe and Argentina (CEA) Dairy Products Sector increased by approximately $67 million. Higher selling prices in accordance with the increase in the cost of milk as raw material in Canada and in Argentina, and increased sales volume from our Dairy Products Division (Argentina) are the main factors explaining the revenue increase. Revenues from our Grocery Products Sector decreased by approximately $1 million in comparison to the same quarter last fiscal year.
- Consolidated EBITDA2 amounted to $129.9 million, an increase of $5.8 million or 4.7% in comparison to $124.1 million for the same quarter last fiscal year. The increase results from higher EBITDA in our CEA Dairy Products Sector of approximately $10.2 million. The EBITDA of our USA Dairy Products Sector decreased by approximately $3 million and the EBITDA of our Grocery Products Sector decreased by approximately $1.4 million compared to same quarter last fiscal year.
- EBITDA for the CEA Dairy Products Sector amounted to $94.8 million, an increase of 12.1% in comparison to the same quarter last fiscal year. This increase was mainly due to the increase in volumes in our Argentinean domestic and export markets and the continued benefits derived from rationalization activities completed in prior years in our Canadian operations. These positive factors were partially offset by less favourable by-product market conditions.
- EBITDA for the USA Dairy Products Sector totalled $31.1 million, a decrease of 8.8% compared to the same period last fiscal year. A less favourable by-product market and increased operational costs are the main factors contributing to this decrease, partially offset by the contribution of the Alto Acquisition and a more favourable relationship between the average block market per pound of cheese and the cost of milk as raw material.
- EBITDA for the Grocery Products Sector amounted to $4.0 million, a decrease of 25.9% compared to the corresponding quarter last fiscal year. This is as a result of a decrease in sales volume and increased costs, which offset the benefits of the price increase that took effect in mid-November 2007.
- Cash generated by operating activities amounted to $111.3 million, compared to $81.7 million for the same period last fiscal year.
- In the second quarter, the Company issued shares for a cash consideration of $4.6 million, as part of the stock option plan and repaid $52.6 million of bank loans and paid $53.7 million in dividends.
For more information on the results of the second quarter of fiscal 2009, please read the attached interim report for the quarter ended September 30, 2008, which forms an integral part of this press release.
Dividends
The Board of Directors declared a quarterly dividend of $0.14 per share payable on December 19, 2008 to common shareholders of record on December 8, 2008.
Normal Course Issuer Bid
The Company has the intention to purchase by means of open market transactions or such other means as may be permitted by the Toronto Stock Exchange (TSX) or a securities regulatory authority, for cancellation purposes, some of its common shares (Common Shares) by way of a normal course issuer bid (Bid) that will begin on November 13, 2008, subject to regulatory approval.
Under the Bid, Saputo may repurchase for cancellation up to 10,340,377 Common Shares. This represents 5% of its 206,807,551 issued and outstanding Common Shares as of October 31, 2008. The average daily trading volume of Saputo’s Common Shares over the most recently completed six (6) calendar months was 260,589. Accordingly, the Company is entitled to purchase, on any trading day, up to 65,147 common shares. These purchases will be made in accordance with applicable regulations over a maximum period of 12 months beginning on November 13, 2008 and ending on November 12, 2009. The consideration that the Company will pay for any Common Shares acquired by it under the Bid will be in cash at the market price of such Common Shares at the time of acquisition. Within the previous twelve months, Saputo did not purchase any of its Common Shares under the normal course issuer bid established in November 2007.
The Company believes that the purchase by Saputo of its own shares may, in appropriate circumstances, be a responsible investment of funds on hand.
To the knowledge of Saputo, no director, senior officer or associate of a director or senior officer of Saputo, person acting jointly or in concert with the Company, or person holding 10% or more of any class of equity securities of Saputo currently intends to sell any Common Shares under this normal course issuer bid. However, sales by such persons through the facilities of TSX may occur if the personal circumstances of any such person change or any such person makes a decision unrelated to these normal course purchases. The benefits to any such person whose Common Shares are purchased would be the same as the benefits available to all other holders whose Common Shares are purchased.
Conference Call
A conference call to discuss the second quarter results of fiscal 2009 will be held on Tuesday, November 4, 2008, at 2:30 PM, Eastern time. To participate in the conference call, dial 1.888.241.0326, ID number 69540175. 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/110408/index.php in your web browser.
For those unable to participate, a replay will be available until midnight, Eastern time, Tuesday, November 11, 2008. To access the replay, dial 1.800.695.9456, ID number 69540175. A replay of the conference call will also be available on the Company’s web site at www.saputo.com.
About Saputo
Together, over the years, we have aspired to grow, exploring new opportunities while staying true to our culture. Our progress is owed to the continued dedication of our 9,200 employees, who, across 5 countries, team up every day to go further. They craft, market and distribute a wide range of high-quality products, including cheese, milk, yogurt, dairy ingredients and snack-cakes. Saputo is the 15th largest dairy processor in the world, the largest in Canada, the third largest in Argentina, among the top three cheese producers in the United States, and the largest snack-cake manufacturer in Canada. Consumers and customers in over 40 countries appreciate our products distributed under our well-known brands such as Saputo, Alexis de Portneuf, Armstrong, Baxter, Dairyland, Danscorella, De Lucia, Dragone, DuVillage 1860, Frigo, Kingsey, La Paulina, Nutrilait, Ricrem, Stella, Treasure Cave, HOP&GO!, Rondeau and Vachon. Saputo Inc. is a public company whose shares are traded on the Toronto Stock Exchange under the symbol SAP.
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 -
Information
Karine Vachon
Advisor, Communications
514.328.3377
Report
Lynda Leith
Investor Relations
(514) 328-3381
