ROUGEMONT, QC, March 31 /CNW Telbec/ - Lassonde Industries Inc. (LAS.A - TSX) is pleased to announce that it is reporting growth in net sales and net earnings for fiscal 2008 despite deteriorating economic conditions affecting the end of last year.
The financial highlights are shown below:
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Financial highlights
(in thousands of
dollars except Quarters ended Years ended
basic and diluted December 31 December 31
earnings per share)
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2008 2007 2008 2007
(unaudited) (unaudited) (audited) (audited)
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Net sales $133,001 $112,748 $505,149 $400,988
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Operating income 10,867 13,294 41,818 35,438
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Earnings before
income taxes 10,122 12,404 39,418 33,045
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Net earnings 7,557 9,329 29,055 23,331
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Basic and diluted
earnings per share 1.14 1.40 4.36 3.49
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Total assets 314,005 285,484 314,005 285,484
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Cash flows (used by)
from operating
activities (2,874) (7,470) 35,620 38,440
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Shareholders' equity $172,589 $141,928 $172,589 $141,928
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Shareholders' equity /
total assets 55.0 % 49.7 % 55.0 % 49.7 %
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Note to financial highlights: These are financial highlights only.
Management's Discussion and Analysis, the audited consolidated financial
statements and notes thereto of Lassonde Industries Inc. for the year
ended December 31, 2008 will be available on the SEDAR website at
www.sedar.com and on the website of Lassonde Industries Inc.
"I am pleased to report that, despite a tough economic environment, our business model continues to deliver good results and generates sustained growth in net sales combined with solid profitability," said Mr. Pierre-Paul Lassonde, Chairman of the Board and Chief Executive Officer of Lassonde Industries Inc.
Fiscal year financial results
Net sales for the fiscal year ended December 31, 2008 reached $505.1 million, a $104.1 million (26.0%) increase over the $401.0 million in net sales recorded in fiscal 2007. The two business acquisitions of November 2007 accounted for approximately half of the increase in net sales, with the balance reflecting organic growth in most of the Company's major markets.
This solid performance in the fiscal year's net sales drove the Company's 2008 operating income to $41.8 million, an increase of $6.4 million (18.0%) compared to $35.4 million reported in 2007. Operating income grew more slowly than net sales however, reflecting, among other things, higher storage and fuel costs, an increase in the cost of certain concentrates, increased amortization expense resulting mainly from the 2007 business acquisitions and, to a lesser extent, specific initiatives to promote some of the Company's products.
The Company's 2008 net earnings reached $29.1 million, an increase of $5.8 million compared to fiscal 2007 net earnings of $23.3 million. The increase in net earnings is mainly explained by the growth in fiscal 2008 operating income and by the $2.2 million reversal of provisions resulting from the settlement of matters arising from notices of assessment issued following the Quebec government's enactment of Bill 15 in June 2006, amending the Taxation Act with retroactive effect. For comparative purposes, it should be noted that the fiscal 2007 income tax provision had been reduced by $1.4 million due to future income tax adjustments.
Basic and diluted earnings per share grew from $3.49 per share in fiscal 2007 to $4.36 per share in fiscal 2008. Excluding the impact of the settlement of matters arising from the notices of assessment related to Bill 15, basic and diluted earnings per share for fiscal 2008 would be $4.03 per share.
Fourth-quarter financial results
Net sales in the fourth quarter of fiscal 2008 totalled $133.0 million, compared to net sales of $112.7 million posted in the same quarter of 2007. The increase is largely attributable to organic sales growth in the Company's main markets coupled with additional sales from the two business acquisitions made at the end of the previous year. Net sales of the acquired business contributed approximately $15 million to the Company's fourth-quarter sales in 2008, whereas they accounted for approximately $6 million during the same quarter of the previous year.
Fourth-quarter operating income went from $13.3 million, or 11.8% of net sales, in 2007 to $10.9 million, or 8.2% of net sales, in 2008, down $2.4 million despite higher net sales in the fourth quarter of 2008. This 8.2% operating margin is more consistent with the profitability of the first three quarters of 2008.
Fourth-quarter net earnings stood at $7.6 million, down $1.7 million from the $9.3 million in net earnings reported in the same quarter of 2007. The 2007 fourth-quarter income taxes reflected a $1.2 million reduction in future income taxes following the enacted reduction of federal corporate income tax rates in December 2007. Without the decrease in future tax liabilities, net earnings for the last quarter of 2007 would have been $8.1 million.
Basic and diluted earnings per share for the fourth quarter went from $1.40 per share in fiscal 2007 to $1.14 per share in fiscal 2008.
Cash flows for the fiscal year
Cash flows from operating activities declined from $38.4 million in 2007 to $35.6 million in 2008, down 7.3%. The combined impact of increased net earnings, higher amortization and higher future taxes was not sufficient to offset the change in non-cash operating working capital items, which used $11.7 million more funds than in 2007, reflecting an increase in inventories and a decrease in income taxes payable.
Dividends
On February 19, 2009, the Board of Directors declared a quarterly dividend of $0.215 per share for Class A and Class B shares, payable on March 16, 2009. On an annualized basis, this dividend represents approximately 25% of 2007 net earnings. This is an eligible dividend.
Share redemption program
During the year ended December 31, 2008, the Company repurchased for cancellation, by way of a normal course issuer bid, 24,000 Class A subordinate voting shares at an average price of $37.12 per share for a cash consideration of $891,000, of which $108,000 was applied against capital stock, $779,000 against retained earnings and $4,000 against contributed surplus. The Company has renewed its share redemption program for 2009, which means that it can repurchase for cancellation, by way of a normal course issuer bid, up to 195,900 of its Class A subordinate voting shares between January 13, 2009 and January 12, 2010. The repurchases will be made through the Toronto Stock Exchange at market price in accordance with the exchange's policies and regulations. The repurchased Class A subordinate voting shares will be cancelled.
Outlook
Most economic observers agree that the economies of the Company's geographic markets, Canada and the United States, have been deeply affected by the recession. Although Lassonde Industries Inc. operates in the food industry, which is perceived as being traditionally less vulnerable to economic downturns, the magnitude and relatively unprecedented nature of the present crisis have limited the usefulness of historical trends in forecasting future impacts.
From a sourcing standpoint, the economic crisis has reduced upward pressures on raw material prices but the price of metal packaging remains a concern. However, the weakening of the Canadian dollar against the U.S. currency has reduced the positive impact of lower raw material costs, as approximately 40% of the Company's purchases are made outside Canada. Since Lassonde Industries' financial performance is sensitive to fluctuations in raw material prices and exchange rates, the Company partially mitigates this risk by negotiating long-term supply agreements and by purchasing foreign exchange forward contracts.
"The current conditions should not significantly affect Lassonde Industries' business model or management approach. Barring a more drastic deterioration in the economic environment, the Company remains optimistic about its ability to maintain its level of net sales". "The current economic condition may also generate business opportunities for the Company. Any such opportunities will be examined and analyzed on their merit, but Lassonde Industries' priority will be to maintain its financial flexibility as a safeguard against any further economic downturn," concluded Mr. Pierre-Paul Lassonde, Chairman of the Board and Chief Executive Officer of Lassonde Industries Inc.
About Lassonde Industries Inc.
Lassonde Industries Inc. develops, manufactures and markets an innovative and distinctive line of fruit and vegetable juices and drinks as well as certain specialty food products such as fondue broths and fondue sauces, beans in sauce, soups, sauces and gravies, canned corn-on-the-cob, bruschetta topping, tapenades, pestos and pasta sauces. Lassonde Industries Inc. imports selected wines from several countries of origin for packaging and marketing purposes. It also imports olive oil. These products are marketed in various packaging and under several trademarks. Approximately 1,300 employees are currently employed by Lassonde Industries Inc. and contribute to its growth.
SEDAR registration number: 00002099
This press release contains forward-looking statements that are based on certain assumptions. These forward-looking statements are subject to a number of risks and uncertainties that could cause actual results or events to differ materially from current expectations. Additional factors are discussed in materials filed from time to time with the securities regulatory authorities in Canada. Lassonde Industries Inc. disclaims any intention or obligation to update or revise any forward-looking statements.
%SEDAR: 00002099EF