Premium Brands Inc. (Toronto: FFF) announced today its results for the second quarter ended June 16, 2001. Sales from continuing operations for the quarter were $62.2 million versus $58.8 million in 2000. On a year to date basis sales from continuing operations were $120.5 million versus $109.4 million in the prior year.
EBITDA from continuing operations for the second quarter increased by 77% to $4.5 million from $2.5 million in 2001. On a year to date basis, the Company’s EBITDA increased by 83% to $7.2 million from $3.9 in 2001.
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Net income for the quarter was $24.4 million or $2.95 per share versus $1.1 million or $0.14 per share in 2000. Included in the net income for the quarter was a $23.5 million gain resulting from the sale of the Company’s Fresh Pork Division. On a year to date basis the Company’s net income increased to $21.5 million or $2.59 per share versus $2.3 million or $0.29 per share in the previous year.
Sales through the Company’s direct to store delivery (“DSD”) and direct to home delivery (“DHD”) channels increased by 53% to $25.4 million in the second quarter of 2001 from $16.7 million in 2000 due to continued expansion of the Company’s unique proprietary distribution initiatives. These initiatives, which are focused on developing and controlling distribution networks into alternative marketing channels such as convenience stores, neighborhood delicatessens, small grocery chains and directly to consumers’ homes are creating significant top and bottom line growth opportunities. For the year, sales through the DSD and DHD channels have increased by 61% to $47.8 million from $29.7 million for the first two quarters of 2000.
“Our success in developing proprietary alternative distribution channels is what will differentiate our company from other good North American food companies. These channels diversify our customer base and improve our pricing power,” said Fred Knoedler, President and CEO. “No other company in our industry can match the degree of diversification and control we have in our distribution channels,” added Mr. Knoedler.
Sales from continuing operations through the Company’s more traditional retail and foodservice channels decreased by $5.2 million to $36.8 million in the quarter from $42.1 million in the previous year due primarily to a labour dispute at the Company’s Vancouver processing facility. The labour dispute was settled on April 8, 2001.
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By GlobalData“We are very encouraged by the progress being made by all of our various business units,” stated Mr. Knoedler.
The Company’s gross profit from continuing operations for the quarter, as a percentage of sales, expanded to 31.7% from 25.1% in 2000 due to an increased percentage of sales coming from its higher margin DSD and DHD channels and its focus on premium specialty food products.
“Our sales and margins continue to be positively impacted by our strategy to diversify the Company’s distribution channels and transition its production capacity away from commodity processed meats and towards premium specialty food products,” said Mr. Knoedler. “Going into the second half of the fiscal year, which is historically our strongest, we look forward to continued top and bottom line growth,” added Mr. Knoedler.
Premium Brands has been engaged in the food processing business since 1917 and has manufacturing facilities in British Columbia, Alberta, Saskatchewan, Manitoba, Ontario, Washington and Oregon.
For further information, please contact Will Kalutycz, CFO, at 604-656-3100.
CONSOLIDATED INCOME STATEMENT
(Unaudited and in thousands except per share amounts)
12 12 12 24 24 24
weeks weeks weeks weeks weeks weeks
ended ended ended ended ended ended
Jun 16, Jun 10, Jun 10, Jun 16, Jun 10, Jun 10,
2001 2000 2000 2001 2000 2000
Proforma (A) Proforma (A)
Sales by channel:
Retail $30,332 $36,832 $41,947 $60,397 $69,752 $78,553
Food services 6,468 5,271 6,550 12,259 9,969 12,170
Direct to store 17,927 15,150 15,150 33,561 28,156 28,156
Direct to home 7,504 1,506 1,506 14,250 1,506 1,506
62,231 58,759 65,153 120,467 109,383 120,385
Gross profit: 19,733 14,721 16,081 37,723 25,781 28,292
Selling, general
and
administrative 15,769 12,563 13,266 31,230 23,019 24,418
Equity earnings (539) (386) (386) (689) (1,168) (1,168)
4,503 2,544 3,201 7,182 3,930 5,042
Depreciation 1,992 1,476 1,588 3,919 2,660 2,882
Amortization 405 321 321 800 620 620
Interest 1,255 954 954 2,480 1,789 1,789
Non-controlling
interest (442) 76 76 (882) 54 54
Earnings (loss)
before income
taxes and unusual
items 1,293 (283) 262 865 (1,193) (303)
Labour dispute 0 0 0 5,724 0 0
Dilution gain on
subsidiary’s share
issuance 0 (4,758) (4,758) 0 (8,591) (8,591)
Loss (gain) on
discontinued
operations
(net of tax) (23,506) 3,253 3,253 (23,766) 4,985 4,985
Income tax 378 497 687 (2,555) 741 1,051
Net earnings $24,421 $725 $1,080 $21,462 $1,672 $2,252
Net earnings per share:
Basic $2.96 $0.09 $0.14 $2.60 $0.22 $0.29
Fully diluted $2.96 $0.09 $0.13 $2.60 $0.21 $0.28
Weighted
average shares
outstanding 8,258 7,757 7,757 8,262 7,756 7,756
(A) Proforma amounts exclude the Company’s salad division.
CONSOLIDATED BALANCE SHEET AMOUNTS
(Unaudited and in thousands except per share amounts)
Jun 16, Jun 10,
2001 2000
Current assets:
Cash $323 $585
Accounts receivable 21,871 61,211
Inventories 24,749 33,755
Prepaid expenses 3,584 3,027
Future income taxes 5,959 0
56,486 98,578
Notes receivable 5,215 5,828
Future income taxes 4,432 0
Investment in significantly influenced
companies 36,647 20,823
Capital assets 89,255 122,260
Goodwill and other 23,698 20,286
$215,733 $267,775
Current liabilities:
Bank Indebtedness $24,971 $39,211
Accounts payable 24,793 27,418
Current term-debt 3,756 3,266
53,520 69,895
Long-term debt 46,351 97,059
Deferred income taxes 0 2,765
99,871 169,719
Non-controlling interest 6,796 9,956
Shareholders’ equity 109,066 88,100
$215,733 $267,775
