Premium Brands Holdings Corporation

TSX : PBH


Premium Brands Holdings Corporation

March 13, 2014 07:00 ET

Premium Brands Holdings Corporation Announces Fourth Quarter Results

VANCOUVER, BRITISH COLUMBIA--(Marketwired - March 13, 2014) - Premium Brands Holdings Corporation (TSX:PBH), a leading producer, marketer and distributor of branded specialty food products, announced today its results for the fourth quarter of 2013.

HIGHLIGHTS

  • Revenue for the quarter increased by 14.8% to $277.7 million as compared to $241.8 million for the fourth quarter of 2012. Revenue for 2013 as compared to 2012 increased by $112.6 million or 11.7% to $1,072.7 million.
  • Adjusted EBITDA for the quarter increased to $15.4 million as compared to $14.8 million in the fourth quarter of 2012. For 2013, adjusted EBITDA increased to $70.9 million as compared to $66.8 million for 2012.
  • The Company declared a quarterly dividend of $0.3125 per share.
  • Free cash flow for 2013 increased to $49.2 million from $46.0 million in 2012 resulting in a dividend to free cash flow ratio of 53.8%.
  • During the quarter the Company completed the issuance of $57.5 million of convertible unsecured subordinated debentures bearing interest at 5.5% and due in June 2019.
  • Also during the quarter, the Company's SK Food Group business initiated a project to build a new US$21.6 million state-of-the-art sandwich production facility in Columbus, OH. The new plant will complement SK Food Group's existing facility in Reno, NV.
  • Subsequent to the quarter the Company completed the sale and leaseback of its distribution facility in Surrey, BC resulting in net proceeds of $10.2 million.
SUMMARY FINANCIAL INFORMATION
(In thousands of dollars except per share amounts and ratios) 13 Weeks 13 Weeks 52 Weeks 52 Weeks
Ended Ended Ended Ended
Dec 28, Dec 29, Dec 28, Dec 29,
2013 2012 2013 2012
Revenue 277,672 241,815 1,072,737 960,129
Adjusted EBITDA 15,350 14,780 70,897 66,794
Adjusted earnings (1) 3,077 3,293 21,548 19,515
Adjusted EPS 0.14 0.16 1.01 0.94
Earnings 870 2,501 12,539 15,274
EPS 0.04 0.12 0.60 0.73
(1) Excludes, on a tax adjusted basis, the following items: (i) acquisition costs; (ii) accretion on provisions; (iii) unrealized gains and losses on foreign currency and interest rate swap contracts; (iv) restructuring costs; and (v) other income.
52 Weeks Ended
Dec 28, Dec 29,
2013 2012
Free cash flow 49,247 45,984
Declared dividends 26,498 24,381
Declared dividend per share 1.2315 1.1760
Payout ratio 53.8% 53.0%

"We are pleased to report another quarter and year of record performance," said Mr. George Paleologou, President and CEO. "We are especially pleased to have reached the billion dollar sales level for the first time in our short history.

"The majority of our businesses performed well for the quarter and the year, however, this success was somewhat offset by the performance of our deli meats businesses whose margins were negatively impacted by rising commodity input costs in the latter half of 2013.

"Looking ahead to 2014, we are well positioned for solid growth in both our top and bottom lines. In addition to the continued strong performance of most of our businesses, our various businesses' are taking steps to mitigate the impact of rising commodity prices and we are starting to realize on the earnings potential of several significant investments made over the last two years.

"In terms of future investment opportunities, we expect 2014 to be another very active year. We have several major capital projects being completed in the coming quarters that will substantially enhance our earnings potential. In addition, we have a number of exciting acquisition opportunities in our pipeline that could further accelerate growth in our sales and earnings.

"Having achieved our five year sales target of $1 billion ahead of schedule, we are now well on our way to achieving our next billion dollars of sales growth," added Mr. Paleologou.

About Premium Brands

Premium Brands owns a broad range of leading specialty food manufacturing and differentiated food distribution businesses with operations in British Columbia, Alberta, Saskatchewan, Manitoba, Ontario, Quebec, Nevada, Ohio and Washington State. The Company services a diverse base of customers located across North America and its family of brands and businesses include Grimm's, Harvest, McSweeney's, Bread Garden Go, Hygaard, Hempler's, Quality Fast Foods, Gloria's Best of Fresh, Direct Plus, National Direct-to-Store Distribution (NDSD), Harlan Fairbanks, Creekside Bakehouse, Stuyver's Bakestudio, Centennial Foodservice, B&C Food Distributors, Shahir, Wescadia, Duso's, Maximum Seafood, SK Food Group, OvenPride, Hub City Fisheries, Audrey's, Deli Chef, Piller's and Freybe.

RESULTS OF OPERATIONS

Revenue
(in thousands of dollars except percentages)
13
weeks
% 13
weeks
% 52
weeks
% 52
weeks
%
ended ended ended ended
Dec 28, Dec 29, Dec 28, Dec 29,
2013 2012 2013 2012
Revenue by segment:
Retail 175,495 63.2% 149,170 61.7% 667,086 62.2% 588,367 61.3%
Foodservice 102,177 36.8% 92,645 38.3% 405,651 37.8% 371,762 38.7%
Consolidated 277,672 100.0% 241,815 100.0% 1,072,737 100.0% 960,129 100.0%

Retail's revenue for the fourth quarter of 2013 as compared to the fourth quarter of 2012 increased by $26.3 million or 17.6% due to: (i) the acquisition of Freybe which accounted for $18.1 million of the increase; and (ii) organic growth of $8.2 million, representing an average growth rate of 5.5%.

Retail's organic growth rate for the quarter was below its long-term targeted range of 6% to 8% primarily due to: (i) lower deli meat sales growth resulting from the restructuring of its deli meats production capacity (see Restructuring Costs); (ii) reduced deli meats product promotions with several large retailers in the Ontario market primarily due to rising costs for certain input commodities (see Results of Operations - Gross Profit); and (iii) relatively flat sales in its NDSD business which recently completed a major restructuring of its business (see Restructuring Costs).

Retail's revenue for 2013 increased by $78.7 million or 13.4% as compared to 2012 due to: (i) the acquisition of Freybe which accounted for $58.0 million of the increase; and (ii) organic growth of $20.7 million, representing an average growth rate of 3.5%.

Retail's organic growth rate for 2013 was below its long-term targeted range of 6% to 8% primarily due to: (i) a decrease in NDSD's sales in the first three quarters of 2013 resulting from the restructuring of its business as well as general contraction of food sales in the C-store channel; (ii) the sale of Retail's fresh sandwich plant in Etobicoke, ON in the fourth quarter of 2012; and (iii) the factors that impacted Retail's performance in the fourth quarter as outlined above. Excluding NDSD and the impact of the sale of the fresh sandwich plant, Retail's organic growth rate was 6.2% for 2013.

Looking forward (see Forward Looking Statements), the Company is expecting the Retail segment to return to its long-term targeted organic growth rate range of 6% to 8% in the second quarter of 2014 based on, among other things: (i) completion of the restructuring of its deli meats production capacity (see Restructuring Costs); and (ii) completion of a variety of capacity expansion projects.

Foodservice's revenue for the fourth quarter of 2013 as compared to the fourth quarter of 2012 increased by $9.5 million or 10.3% due to: (i) general organic growth of $6.2 million representing an organic growth rate of 7.0%; (ii) the acquisition of certain businesses from Harbour Marine which accounted for $2.0 million of the increase; and (iii) increased sales in its Worldsource food brokerage business of $1.4 million resulting from increased trading opportunities.

Foodservice's revenue for 2013 as compared to 2012 increased by $33.9 million or 9.1% due to: (i) general organic growth of $20.4 million representing an organic growth rate of 5.7%; (ii) the acquisition of certain businesses from Harbour Marine which accounted for $7.8 million of the increase; and (iii) increased sales in its Worldsource food brokerage business of $5.7 million resulting from improved trading opportunities.

Foodservice's organic growth rate for 2013 was slightly below the Company's long-term target of 6% to 8% due to: (i) a general supply shortage of certain species of wild and exotic seafood that impacted the sales of Maximum Seafood and Hub City Fisheries, particularly in the second quarter; and (ii) challenging weather conditions across most of Canada for portions of the third and fourth quarters that resulted in reduced consumer spending in the foodservice channel.

Looking forward (see Forward Looking Statements), for 2014 the Company expects Foodservice's organic sales growth to be within its long-term targeted range of 6% to 8% based on, among other things: (i) continued growth in the foodservice segment; and (ii) improved availability of certain species of wild and exotic seafood in the second and third quarters.

Gross Profit
(in thousands of dollars except percentages)
13
weeks
% 13
weeks
% 52
weeks

%
52
weeks
%
ended ended ended ended
Dec 28, Dec 29, Dec 28, Dec 29,
2013 2012 2013 2012
Gross profit by segment:
Retail 33,341 19.0% 31,304 21.0% 139,067 20.8% 130,924 22.3%
Foodservice 17,744 17.4% 16,734 18.1% 73,987 18.2% 69,675 18.7%
Consolidated 51,085 18.4% 48,038 19.9% 213,054 19.9% 200,599 20.9%

Retail's gross profit as a percentage of its revenue (gross margin) for the fourth quarter of 2013 as compared to the fourth quarter of 2012 decreased primarily due to:

  • Increased input costs in several of Retail's deli meat businesses that were the result of rising protein commodity prices, which were, in turn, due to several factors including record droughts in the U.S. Midwest in 2012 that resulted in higher than average feed costs and, correspondingly, lower than average livestock production levels. Subsequent to the quarter, all of the Company's deli meats businesses implemented selling price increases that are expected (see Forward Looking Statements) to result in higher gross margins in the latter part of the first quarter of 2014;
  • Sales mix changes as a significant portion of Retail's growth in the quarter was generated from products with selling margins that were below its average selling margins; and
  • A variety of one time and unusual costs that impacted several of Retail's manufacturing facilities, including higher than normal repair and maintenance costs.

Retail's gross margin for 2013 as compared to 2012 decreased due to factors that impacted its margins in the fourth quarter of 2013. In addition, Retail's gross margin for 2013 was impacted by the restructuring of its NDSD's business (see Restructuring Costs). The restructuring resulted in the conversion of NDSD's customers in certain geographic regions from being serviced by NDSD's direct-to-store delivery trucks to being serviced by third party distributors and wholesale distributors. Correspondingly, in regions where this conversion has occurred, the Company now sells its products at a discounted price to the new distributors who in turn sell and distribute the Company's products to convenience store retailers. Corresponding with this change, and the lost margin associated with it, NDSD has been able to significantly reduce certain SG&A costs (see Selling, General and Administrative Expenses).

Foodservice's gross margin for the fourth quarter of 2013 as compared to the fourth quarter of 2012 decreased primarily due to: (i) lower trading margins in its Worldsource food brokerage business as a result of temporary market circumstances; and (ii) additional overhead costs associated with its new seafood processing facility.

Foodservice's gross margin for 2013 as compared to 2012 decreased due to the factors that impacted its margins in the fourth quarter of 2013 as well as lower margins in its Maximum Seafood business for most of 2013 due to higher than normal purchase prices for a variety of wild and exotic seafood products.

Selling, General and Administrative Expenses (SG&A)
(in thousands of dollars except percentages)
13
weeks
% 13
weeks
% 52
weeks
% 52
weeks
%
ended ended ended ended
Dec 28, Dec 29, Dec 28, Dec 29,
2013 2012 2013 2012
SG&A by segment:
Retail 21,333 12.2% 20,092 13.5% 85,318 12.8% 79,580 13.5%
Foodservice 12,811 12.5% 12,047 13.0% 50,572 12.5% 48,530 13.1%
Corporate 1,591 1,119 6,267 5,695
Consolidated 35,735 12.9% 33,258 13.8% 142,157 13.3% 133,805 13.9%

Retail's SG&A for the fourth quarter of 2013 as compared to the fourth quarter of 2012 increased due to: (i) the acquisition of Freybe; and (ii) increased selling and marketing costs associated with Retail's organic sales growth (see Revenue). These increases were partially offset by a significant decrease in NDSD's SG&A as a result of its restructuring (see Gross Profit).

Retail's SG&A for 2013 as compared to 2012 increased due to: (i) the acquisition of Freybe; and (ii) increased selling and marketing costs associated with Retail's organic sales growth (see Revenue). These increases were partially offset by: (i) a significant decrease in NDSD's SG&A as a result of its restructuring (see Gross Profit); and (ii) a $1.2 million gain on the sale of vacant land in Edmonton, AB in the third quarter of 2013.

Foodservice's SG&A for the fourth quarter of 2013 as compared to the fourth quarter of 2012 as well as for 2013 as compared to 2012 increased due to: (i) higher variable selling costs associated with Foodservice's organic sales growth (see Revenue); and (ii) increased costs associated with the development of the infrastructure needed to accelerate the growth of its seafood based initiatives.

Adjusted EBITDA
(in thousands of dollars except percentages)
13 weeks % 13 weeks % 52 weeks % 52 weeks %
ended ended ended ended
Dec 28, Dec 29, Dec 28, Dec 29,
2013 2012 2013 2012
Adjusted EBITDA by segment:
Retail 12,008 6.8% 11,212 7.5% 53,749 8.1% 51,344 8.7%
Foodservice 4,933 4.8% 4,687 5.1% 23,415 5.8% 21,145 5.7%
Corporate (1,591) (1,119) (6,267) (5,695)
Consolidated 15,350 5.5% 14,780 6.1% 70,897 6.6% 66,794 7.0%

The Company's adjusted EBITDA for the fourth quarter of 2013 as compared to the fourth quarter of 2012 increased by $0.6 million or 3.9% to $15.4 million primarily due to: (i) growth of the Company's sales (see Revenue); and (ii) the restructuring of the Company's NDSD business (see Restructuring Costs).

These increases were partially offset by: (i) lower margins in several of the Company's deli meats businesses resulting from increases in the cost of certain input commodities (see Gross Profit); and (ii) a variety of one time or unusual costs that impacted several of the Company's businesses, including higher than normal repair and maintenance costs (see Gross Profit).

The Company's adjusted EBITDA for the quarter was also negatively impacted by lost sales resulting from temporary capacity issues associated with the restructuring of its deli meats production capacity.

The Company's adjusted EBITDA for 2013 as compared to 2012 increased by $4.1 million or 6.1% to $70.9 million primarily due to the factors that impacted its adjusted EBITDA in the fourth quarter of 2013 as well as a $1.2 million gain on the sale of vacant land in the third quarter of 2013.

Looking forward (see Forward Looking Statements) the Company expects its adjusted EBITDA for 2014 to be favourably impacted by the following:

  • A significant increase in Freybe's earnings after the realignment of its Langley plant is complete (see Restructuring Costs). Currently the Company expects this process to be finished in the first quarter of 2014.
  • A steady improvement in Stuyver's and Deli Chef's margins as these businesses leverage the incremental capacity of new production facilities built in 2012 to generate incremental sales.
  • Product selling price increases being implemented by the Company's deli meats businesses in the first quarter of 2014 in response to continued increases in the cost of certain input commodities.
  • Continued improvement in NDSD's adjusted EBITDA as the restructuring of its business is complete and its management team is now focused on developing new sales opportunities.

Due to uncertainties associated with the timing and impact of the items outlined above, the Company is not providing specific guidance on its projected adjusted EBITDA for 2014.

Interest

The Company's interest and other financing costs for the fourth quarter of 2013 as compared to the fourth quarter of 2012 and for 2013 as compared to 2012 increased by $0.7 million and $1.1 million, respectively, due to an increase in the Company's funded debt partially offset by a reduction in the Company's overall blended cost of debt resulting from: (i) senior bank debt being used to retire higher cost vendor take-back notes and capital leases; and (ii) the refinancing of SJ Irvine.

Restructuring Costs

Restructuring costs consist of costs associated with the significant restructuring of one or more of the Company's businesses. During 2013, the Company incurred $12.7 million in restructuring costs consisting of:

  • $9.5 million ($3.1 million of which was in the fourth quarter) for the shutdown of its Grimm's business' older deli meats production facility in Richmond, BC (the Richmond plant) and the transition of production from this plant (the Richmond plant transition) to some of the Company's other deli businesses' processing plants including Freybe's Langley, BC facility. The transfer of production began in the first quarter of 2013 and was completed by the end of the second quarter.

Subsequent to the second quarter the Company's deli businesses continued to incur restructuring costs due to: (i) setup problems associated with processing equipment transferred from the Richmond plant; (ii) employee training related issues; and (iii) production disruptions resulting from the refinement of production processes and from the installation of new equipment designed to improve production flows and expand capacity. Furthermore, the severity of these issues was compounded, and the time required to resolve them extended, due to production capacity shortages created by significant increases in consumer demand for its products.

Looking forward (see Forward Looking Statements), the Company expects to complete this initiative in the first quarter of 2014 and, correspondingly, will continue to incur restructuring costs until that time.

In conjunction with this initiative, the Company is also expanding the manufacturing capacity of several of its deli businesses in order to address growing consumer demand and avoid the capacity shortages that it experienced in the latter half of 2013.

  • $2.2 million ($0.2 million of which was in the fourth quarter) in costs relating to the restructuring and rationalization of NDSD's direct-to-store distribution network for the C-store channel (see Gross Profit). NDSD completed its restructuring plan in the third quarter and, correspondingly, has stabilized its adjusted EBITDA (see Adjusted EBITDA).
  • $0.2 million (none of which was in the fourth quarter) in non-recurring costs relating to Centennial Foodservice's seafood initiatives, which include the startup of its new seafood processing facility in Richmond, BC and the integration of the businesses acquired from Harbour Marine. This initiative was completed in the first quarter of 2013.
  • $0.8 million ($0.6 million of which was in the fourth quarter) in restructuring costs associated with a variety of initiatives including the shutdown of an older bakery in 2012 and the moving of the Company's head office to a new location in Richmond, BC in 2013.

Other

In the fourth quarter the Company generated other income of $0.9 million as a result of a reduction in the provision for contingent consideration associated with certain third party indemnifications provided by the Company that expired in December 2013.

In 2013 the Company generated other income of $1.7 million as a result of: (i) the other income generated in the fourth quarter as outlined above; and (ii) a $0.8 million reduction in the provision for contingent consideration associated with the acquisition of Piller's in the third quarter due to Piller's not achieving certain profitability targets.

FREE CASH FLOW
(in thousands of dollars) 52 weeks 52 weeks
ended ended
Dec 28, 2013 Dec 29, 2012
Cash flow from operating activities 15,156 49,849
Changes in non-cash working capital 22,663 (6,850)
Sale of redundant property 2,413 -
Acquisition transaction costs 560 197
Restructuring costs 12,749 5,705
Capital maintenance expenditures (4,294) (2,917)
Free cash flow 49,247 45,984

FORWARD LOOKING STATEMENTS

This discussion and analysis contains forward looking statements with respect to the Company, including its business operations, strategy and financial performance and condition. These statements generally can be identified by the use of forward looking words such as "may", "could", "should", "would", "will", "expect", "intend", "plan", "estimate", "project", "anticipate", "believe" or "continue", or the negative thereof or similar variations.

Although management believes that the expectations reflected in such forward looking statements are reasonable and represent the Company's internal expectations and belief as of March 12, 2014, such statements involve unknown risks and uncertainties beyond the Company's control which may cause its actual performance and results in future periods to differ materially from any estimates or projections of future performance or results expressed or implied by such forward looking statements.

Factors that could cause actual results to differ materially from the Company's expectations include, among other things: (i) seasonal and/or weather related fluctuations in the Company's sales; (ii) changes in consumer discretionary spending resulting from changes in economic conditions and/or general consumer confidence levels; (iii) changes in the cost of raw materials used in the production of the Company's products; (iv) changes in the cost of products sourced from third party manufacturers and sold through the Company's proprietary distribution networks; (v) risks associated with the Company's conversion from a publicly traded income trust to a publicly traded corporation, including related changes in Canada's income tax laws; (vi) changes in the Company's relationships with its larger customers; (vii) potential liabilities and expenses resulting from defects in the Company's products; (viii) changes in consumer food product preferences; (ix) competition from other food manufacturers and distributors; (x) execution risk associated with the Company's growth and business restructuring initiatives; (xi) risks associated with the Company's business acquisition strategies; (xii) changes in the value of the Canadian dollar relative to the U.S. dollar; and (xiii) new government regulations affecting the Company's business and operations. Details on these risk factors as well as other factors can be found in the Company's 2013 MD&A, which is filed electronically through SEDAR and is available online at www.sedar.com.

Unless otherwise indicated, the forward looking information in this document is made as of March 12, 2014 and, except as required by applicable law, will not be publicly updated or revised. This cautionary statement expressly qualifies the forward looking information in this document.

Premium Brands Holdings Corporation
Consolidated Balance Sheets
(in thousands of Canadian dollars)
December 28,
2013
December 29,
2012
January 1,
2012
Current assets:
Cash and cash equivalents 1,437 3,758 4,486
Accounts receivable 92,880 80,180 78,343
Inventories 108,729 79,456 78,831
Prepaid expenses 7,746 6,631 13,340
Other assets 358 193 103
211,150 170,218 175,103
Capital assets 177,275 166,447 158,801
Intangible assets 75,099 71,994 77,087
Goodwill 168,925 154,451 150,417
Investment in associates 7,949 5,181 5,001
Deferred income taxes 26,697 32,575 41,334
Other assets 3,222 4,866 2,250
670,317 605,732 609,993
Current liabilities:
Cheques outstanding 5,689 1,928 2,500
Bank indebtedness 29,466 11,179 18,061
Dividend payable 6,863 6,188 5,958
Accounts payable and accrued liabilities 94,288 83,081 79,998
Current portion of long-term debt (1) 113,222 127,195 17,530
Current portion of provisions 2,219 3,848 2,924
251,747 233,419 126,971
Long-term debt 11,938 13,058 160,915
Convertible unsecured subordinated debentures 177,057 133,842 89,396
Puttable interest in subsidiaries 14,498 15,649 15,210
Deferred revenue 1,103 1,443 1,943
Provisions 3,820 503 8,360
Pension obligation 653 1,873 1,345
Other - - 100
460,816 399,787 404,240
Equity attributable to shareholders:
Accumulated earnings 161,560 147,916 133,370
Accumulated dividends declared (181,376) (154,878) (130,497)
Retained earnings (deficit) (19,816) (6,962) 2,873
Share capital 221,994 209,093 198,057
Equity component of convertible debentures 1,744 1,785 1,916
Reserves 4,929 448 1,442
Non-controlling interest 650 1,581 1,465
209,501 205,945 205,753
670,317 605,732 609,993
(1) The Company's senior debt facilities have a maturity date of September 9, 2014 and therefore have been classified as current. The Company expects (see Forward Looking Statements) to finalize the renewal of these facilities in the second quarter of 2014.

Premium Brands Holdings Corporation
Consolidated Statements of Operations
(Unaudited and in thousands of dollars except per share amounts)
13 weeks
ended
December 28,
2013
13 weeks
ended
December 29,
2012
52 weeks
ended
December 28,
2013
52 weeks
ended
December 29,
2012
Revenue 277,672 241,815 1,072,737 960,129
Cost of goods sold 226,587 193,777 859,683 759,530
Gross profit before depreciation and amortization 51,085 48,038 213,054 200,599
Selling, general and administrative expenses before depreciation and amortization 35,735 33,258 142,157 133,805
15,350 14,780 70,897 66,794
Depreciation of capital assets 4,583 3,705 17,597 14,240
Amortization of intangible assets 1,099 1,135 4,371 4,836
Amortization of other assets 1 1 5 5
Interest and other financing costs 5,107 4,416 18,460 17,322
Amortization of financing costs 74 74 312 380
Acquisition transaction costs 26 4 560 197
Change in value of puttable interest in subsidiaries 476 450 1,639 1,655
Accretion of provisions 2 2 307 631
Unrealized gain on foreign currency contracts (300) (400) (100) (100)
Unrealized loss (gain) on interest rate swap contracts 100 (100) 200 (300)
Restructuring costs 4,038 1,714 12,749 5,705
Equity loss (income) in associate 285 98 (91) (180)
Other (900) (69) (1,662) (69)
Earnings before income taxes 759 3,750 16,550 22,472
Provision for income taxes
Current 576 166 2,855 2,405
Deferred (687) 1,083 1,156 4,793
(111) 1,249 4,011 7,198
Earnings 870 2,501 12,539 15,274
Earnings (loss) for the year attributable to:
Shareholders 897 2,447 12,688 15,058
Non-controlling interest (27) 54 (149) 216
870 2,501 12,539 15,274
Earnings per share
Basic 0.04 0.12 0.60 0.73
Diluted 0.04 0.12 0.59 0.73

Premium Brands Holdings Corporation
Consolidated Statements of Cash Flows
(Unaudited and in thousands of dollars)
13 weeks
ended
December 28,
2013
13 weeks
ended
December 29,
2012
52 weeks
ended
December 28,
2013
52 weeks
ended
December 29,
2012
Cash flows from (used in) operating activities:
Earnings 870 2,501 12,539 15,274
Items not involving cash:
Depreciation of capital assets 4,583 3,705 17,597 14,240
Amortization of intangible and other assets 1,100 1,136 4,376 4,841
Amortization of financing costs 74 74 312 380
Change in value of puttable interest in subsidiaries 476 450 1,639 1,655
Loss (gain) on sales of capital assets 3 35 (1,212) 278
Accrued interest income (6) (7) (25) (29)
Net unrealized (gain) loss on foreign currency contracts and interest rate swaps (200) (500) 100 (400)
Equity loss (income) in associate 285 98 (91) (180)
Deferred revenue (131) (105) (528) (492)
Accretion of convertible debentures, long-term debt and provisions 690 622 2,888 2,965
Reversal of provision - (7,226) (762) (7,226)
Change in value of cash conversion option - - (170) -
Writedown of capital assets - 6,900 - 6,900
Deferred income taxes (687) 1,083 1,156 4,793
7,057 8,766 37,819 42,999
Change in non-cash working capital (5,688) 1,571 (22,663) 6,850
1,369 10,337 15,156 49,849
Cash flows from (used in) financing activities:
Long-term debt - net (49,997) (7,015) (19,658) (38,869)
Bank indebtedness and cheques outstanding 5,233 9,816 22,048 (7,454)
Convertible debentures - net of issuance costs 54,600 - 54,600 54,600
Purchase of 7.00% debentures under normal course issuer bid (6,862) (6,187) (228) (720)
Dividends paid to shareholders, net of dividends received from cancelled shares (9) (459) (25,822) (24,151)
Share issuance and financing costs - - (69) (2)
2,965 (3,845) 30,871 (16,596)
Cash flows from investing activities:
Capital asset additions (3,386) (3,630) (15,608) (29,742)
Business acquisitions (150) - (54,339) -
Investment in associates 97 18 (2,677) -
Repayment of share purchase loans and notes receivable - (2,600) 221 228
Promissory note from associate - - 500 (2,600)
Proceeds from sale and leaseback of asset 36 30 25,000 -
Net proceeds from sales of assets (39) - 2,543 315
Purchase of shares of non-wholly owned subsidiary pursuant to puttable interest (380) (83) (1,847) -
Payments to shareholders of non-wholly owned subsidiaries (1,847) - (1,276) (1,310)
Payment of provisions (178) (263) (920) (838)
(5,847) (6,528) (48,403) (33,947)
Increase (decrease) in cash and cash equivalents (1,513) (36) (2,376) (694)
Effects of exchange on cash and cash equivalents 47 (3) 55 (34)
Cash and cash equivalents - beginning of period 2,903 3,797 3,758 4,486
Cash and cash equivalents - end of period 1,437 3,758 1,437 3,758

Contact Information

  • Premium Brands Holdings Corporation
    George Paleologou
    President and CEO
    (604) 656-3100

    Premium Brands Holdings Corporation
    Will Kalutycz
    CFO
    (604) 656-3100
    www.premiumbrandsholdings.com