Stellarton, NS-based food distribution firm Empire Company Ltd has reported record earnings before net capital gains and other items (after goodwill charges) of C$35.3m (US$22.27m), C$1.08/share, for its Q3 ended 31 January 2002.
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This performance represents strong growth over the C$17.4m, C$0.53/share, recorded in the same period last year. All operating companies recorded improved earnings over the Q3 last year and each contributed to the record performance. Included in Q3 net earnings are earnings from discontinued operations of C$0.9m versus C$1.4m last year. Earnings from discontinued operations reflect accounting for SERCA foodservice operations as a discontinued operation based on a definitive agreement, announced 5 December 2001 to sell substantially all of the net assets of SERCA foodservice operations and the expectation for closing this transaction prior to the end of the fiscal year.
For the nine-month period ended 31 January 2002, earnings before net capital gains and other items was C$97m or 52% higher year on year. Excluding discontinued operations, earnings before net capital gains and other items was C$90.1m for the nine-month period ended 31 January 2002 versus C$57.7m the same period last year, a 56% increase.
Paul D. Sobey, president and CEO, commented: “We are pleased with the record operating earnings performance in the quarter both on a consolidated basis and for each of our operating companies. Solid earnings and revenue growth continued across all operating businesses in the Q3, keeping us on track to exceed our performance targets for fiscal 2002.
“Trailing year earnings per share before net capital gains and other items improved 47% to C$3.68 versus the C$2.51 earned during the comparable period at the end of the Q3 last year.”
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By GlobalDataFinancial results
The Q3 revenue of C$2.48bn was up 6% from C$2.33bn last year. The food division reported revenue of C$2.44bn, an increase of 6.6% over the Q3 last year. Real estate and other operations reported revenue growth of 2.6% and 13.2%, respectively, over the Q3 last year. Revenue for the first nine months of the fiscal year of C$7.45bn is up 6.5% over last year’s C$6.99bn.
Operating income totalled C$108.5m, an increase of C$36.8m or 51% compared to Q3 of the previous fiscal year. All operating companies recorded improvement in EBITDA margin over last year. Operating income for the first nine months of the fiscal year equaled C$307.9m, up 22% over last year’s C$252.5m.
Net capital gains and other items of C$0.8m or C$0.02 per share in the Q3 represents a C$4.7m increase over the C$(3.9)m recorded in the Q3 last year.
Net earnings, including net capital gains and other items totaled C$36.1m or C$1.10 per share versus C$13.5m or C$0.40 per share in the Q3 of last year.
Empire’s financial position continues to strengthen. Net debt to capital at the end of the Q3 of 38.1% compares to 40.8% at 30 April 2001.
Operating cash flow in the Q3 totaled C$91.5m, C$2.79/share, up C$31.6m or 53% from the C$59.9m, C$1.83/share, reported in the Q3 last year. This increase is largely the result of higher net earnings over last year. Operating cash flow for the first nine months of the fiscal year of C$295.3m, C$8.99/share, is up 61% over last year’s C$183.8m, C$5.60/share.
Empire’s board of directors have declared a quarterly dividend of 11.25 cents/share on both the Class A and Class B common shares, which will be payable on 30 April, 2002 to shareholders of record on 15 April 2002.
The board also declared regular dividends on the company’s outstanding preferred shares.
