CBCL (TSE:CBY) yesterday announced earnings for the fourth quarter of 2000.
Net earnings for the quarter were $7.5 million dollars ($0.34 per share), compared to a loss last year of $1.9 million ($0.09 per share). For the year to date, net earnings were $17.2 million ($0.80 per share), compared to $6.3 million ($0.29 per share) last year.
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Comparisons for the quarter and the year to date are affected both by a special charge of $8.4 million taken last year and a tax recovery in the current quarter of $2.8 million. After adjusting for these items, net earnings per share for the quarter of $0.21 compares to $0.17 last year representing a gain of 24%. This represents the sixth consecutive quarter of year-over-year improvement. For the full year, earnings per share on a comparable basis of $0.67 compares to $0.55 per share last year, representing a gain of 22%.
Sales for the quarter increased by 3.2% to $139.7 million from $135.3 million last year. For the full year, sales of $553.7 million compared to $567.3 million last year.
Operating earnings before unusual items for the quarter of $6.5 million compares to $6.4 million in 1999. Major improvements in supply chain productivity, and gross margins were partially offset by some declines in volume flowing from structural adjustments in the trade, and strategic marketing investments that were made to accelerate the growth of the Dempster’s brand in Eastern and Western Canada. For the year, operating earnings before unusual items of $24.7 million compares to $20.1 million last year, an increase of 23%.
The restructuring initiatives that led to the 1999 $8.4 million charge against earnings are substantially complete and contributed to the strong operating earnings performance for 2000.
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By GlobalDataOther income of $1.2 million for the quarter represents a significant increase from $0.2 million last year, due principally to improvements in operations at Multi-Marques, in which the Company holds a 25% interest.
Taxation expense for the quarter is a recovery of $0.2 million, largely due to the positive effect on the Company’s future tax liability of $2.8 million, due to tax rate reductions that were substantially enacted during the quarter.
During the quarter, the Company announced that it had signed an agreement to purchase the remaining 75% of Multi-Marques to bring its ownership to 100%. Finalization of this transaction is dependent on clearance of the transaction under the Competition Act.
Roger Dickhout, President and CEO said: “We achieved most of the priorities we set out at the beginning of the year against our five point plan. We entered 2001 with momentum in improving the Company’s productivity and margins, and we remain committed to making the investments in top notch human resources and marketing that are required to sustain strong earnings growth. We are also pleased with the progress being made by Multi-Marques.”
Canada Bread, which is 68% owned by Maple Leaf Foods Inc., is Canada’s leading manufacturer and distributor of bakery products to the retail and food service business.
CANADA BREAD COMPANY, LIMITED
CONSOLIDATED STATEMENTS OF EARNINGS
Quarter Ended
December 31,
(In thousands of Canadian dollars,
except per share amounts) 2000 1999
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Sales $ 139,713 $ 135,292
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Earnings from operations, before unusual items 6,538 6,355
Unusual items – (8,350)
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Earnings from operations 6,538 (1,995)
Other income 1,220 156
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Earnings before interest and taxes 7,758 (1,839)
Interest expense 449 406
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Earnings before income taxes 7,309 (2,245)
Income taxes (163) (319)
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Net earnings $ 7,472 $ (1,926)
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Earnings per share $ 0.34 $ (0.09)
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Twelve Months Ended
December 31,
(In thousands of Canadian dollars,
except per share amounts) Years ended 2000 1999
————————————————————————
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Sales $ 553,660 $ 567,251
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Earnings from operations,
before unusual items 24,652 20,111
Unusual items – (8,350)
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Earnings from operations 24,652 11,761
Other income 1,876 1,469
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Earnings before interest and taxes 26,528 13,230
Interest expense 2,323 2,174
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Earnings before income taxes 24,205 11,056
Income taxes 6,965 4,754
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Net earnings $ 17,240 $ 6,302
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Earnings per share $ 0.80 $ 0.29
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CANADA BREAD COMPANY, LIMITED
CONSOLIDATED BALANCE SHEETS
As at December 31, As at December 31,
(In thousands of Canadian dollars) 2000 1999
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ASSETS
Current assets:
Accounts receivable $ 25,094 $ 25,324
Due from related company 5,281 4,290
Inventories 16,065 17,898
Income and other taxes receivable 1,673 –
Future tax asset 2,655 –
Prepaid expenses 1,740 1,945
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52,508 49,457
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Investment in associated company 46,971 46,128
Property and equipment 156,676 166,290
Goodwill 74,225 77,490
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$ 330,380 $ 339,365
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LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Bank indebtedness $ 3,280 $ 1,436
Accounts payable and accrued charges 55,958 64,394
Dividends payable 1,285 1,285
Income and other taxes payable – 2,707
Current portion of long-term debt 102 106
————————————————————————
60,625 69,928
————————————————————————
Long-term debt 175 14,772
Future tax liability 34,139 –
Deferred income taxes – 23,505
Shareholders’ equity 235,441 231,160
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$ 330,380 $ 339,365
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CONSOLIDATED STATEMENTS OF CASH FLOWS
December 31, December 31,
(In thousands of Canadian dollars) Years ended 2000 1999
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CASH PROVIDED BY (USED IN):
OPERATING ACTIVITIES
Net earnings $ 17,240 $ 6,302
Add (deduct) items not affecting cash:
Depreciation 17,385 17,026
Amortization 3,265 3,075
Future income taxes (310) –
Deferred income taxes – 2,663
Undistributed earnings of an associated company (843) (360)
Non-cash amounts included in unusual items – 5,428
Changes in non-cash operating working capital (11,069) 5,122
————————————————————————
25,668 39,256
FINANCING ACTIVITIES
Dividends paid (5,140) (5,140)
Decrease in long-term debt, net (14,601) (12,072)
————————————————————————
(19,741) (17,212)
INVESTING ACTIVITIES
Additions to property and equipment (7,771) (21,359)
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(7,771) (21,359)
Increase (decrease) in cash and cash equivalents (1,844) 685
Bank indebtedness, beginning of year (1,436) (2,121)
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Bank indebtedness, end of year $ (3,280) $ (1,436)
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