Premium Brands Holdings Corporation
TSX : PBH

Premium Brands Holdings Corporation

August 09, 2012 07:00 ET

Premium Brands Holdings Corporation Announces Record 2012 Second Quarter Revenue and Earnings

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Aug. 9, 2012) - Premium Brands Holdings Corporation (TSX:PBH), a leading producer, marketer and distributor of branded specialty food products, announced today its results for the second quarter of 2012.

HIGHLIGHTS

  • Revenue for the quarter increased by 36.5% or $67.2 million to a record $251.0 million as compared to $183.8 million in the second quarter of 2011.
  • Record Adjusted EBITDA for the quarter of $21.1 million representing a 53.5% increase as compared to $13.7 million in the second quarter of 2011.
  • Adjusted earnings per share for the quarter of $0.39 per share as compared to $0.22 per share for the second quarter of 2011. Earnings for the quarter were $7.0 million as compared to $4.5 million in the second quarter of 2011
  • A quarterly dividend of $6.0 million or $0.294 per share.
  • Rolling twelve months free cash flow of $44.6 million resulting in a dividend to free cash flow ratio of 53.6%.
  • Completion of the Company's new state-of-the-art 20,000 square foot sandwich production facility in Laval, Quebec.
  • Commencement of construction of a new seafood processing and distribution facility that will be adjacent to the Company's Centennial Foodservice business' facility in Richmond, B.C.
  • The issuance of $57.5 million of convertible unsecured subordinated debentures bearing interest at 5.7% and due in June 2017.
  • The Company revised its Adjusted EBITDA guidance for 2012 to a range of $70 million to $75 million from the previous range of $75 million to $80 million based in part on uncertainties about the impact that the drought conditions in the U.S. Midwest will have on the cost of food commodities used in the production of its products.
SUMMARY FINANCIAL INFORMATION
(In thousands of dollars except per share amounts) 13 Weeks Ended 26 Weeks Ended
Jun 30, Jun 25, Jun 30, Jun 25,
2012 2011 2012 2011
Revenue 251,024 183,849 469,748 337,947
Adjusted EBITDA 21,056 13,716 33,080 22,932
Earnings 7,013 4,474 8,174 5,477
EPS 0.34 0.24 0.40 0.29
Adjusted EPS 0.39 0.22 0.46 0.30
Rolling Four Quarters Ended
Jun 30, Dec 31,
2012 2011
Free cash flow 44,627 38,225
Declared dividends 23,922 22,672
Declared dividend per share 1.176 1.176
Payout ratio 53.6% 59.3%

"Our record results for the quarter reflect robust demand for our products in both the foodservice and retail channels," said Mr. George Paleologou, President and CEO. "Moderating commodity input costs as well as improved plant efficiencies resulting from a combination of recent capital investments and higher production volumes also contributed to our improved results.

"Looking forward, while we are concerned about the unusually severe drought in the U.S. Midwest and its possible inflationary impact on our input commodity costs, we view this as a short term issue and remain confident in our business model and the ability of our diverse portfolio of businesses to adapt to any challenges created by this situation.

"In the meantime, we continue to focus on optimizing and expanding our production capacities as demand for our premium, high quality products accelerates across all categories and channels. Some of our more recent initiatives include a new sandwich facility in Laval, Quebec that was commissioned in July, a new state-of-the-art artisan bakery in Langley, B.C. that was brought into full production in June, and the construction of a new seafood processing and distribution facility in Richmond, B.C. that commenced in May.

"I have no doubt that the disciplined execution of our core strategies will continue to generate superior returns for our shareholders over the long-term," stated 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 and Washington State. The Company services over 26,000 customers 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, Harlan Fairbanks, Creekside Bakehouse, Centennial Foodservice, B&C Foods, Shahir, Duso's, Maximum Seafood, SK Food Group, OvenPride, Hub City Fisheries, Audrey's, Deli Chef and Piller's.

RESULTS OF OPERATIONS

Revenue
(in thousands of dollars except percentages)
13 weeks % 13 weeks % 26 weeks % 26 weeks %
ended ended ended ended
Jun 30, Jun 25, Jun 30, Jun 25,
2012 2011 2012 2011
Revenue by segment:
Retail 152,227 60.6% 92,301 50.2% 287,135 61.1% 171,002 50.6%
Foodservice 98,797 39.4% 91,548 49.8% 182,613 38.9% 166,945 49.4%
Consolidated 251,024 100.0% 183,849 100.0% 469,748 100.0% 337,947 100.0%

Retail's revenue for the second quarter of 2012 as compared to the second quarter of 2011 increased by $59.9 million or 64.9% due to: (i) the acquisitions of Piller's and SJ in 2011 which resulted in $49.7 million in incremental sales; and (ii) organic growth of $10.2 million representing an organic growth rate of approximately 11.1%.

Retail's strong organic growth for the quarter, which exceeded the Company's targeted range of 6% to 8%, was due to a range of factors including: (i) a variety of new product and customer sales initiatives; (ii) price increases across a broad range of products; and (iii) favourable weather conditions in most of Retail's markets across Canada.

Retail's revenue for the first two quarters of 2012 increased by $116.1 million or 67.9% as compared to the first two quarters of 2011 primarily due to: (i) the acquisitions of Piller's, SJ and Deli Chef in 2011, which resulted in incremental sales of $98.8 million; and (ii) organic growth across a range of products and customers of $17.3 million representing an organic growth rate of approximately 10.1%.

Looking forward (see Forward Looking Statements), for the second half of 2012 the Company expects Retail's sales growth to either exceed or be at the top end of its guidance for organic growth of 6% to 8%.

Foodservice's revenue for the second quarter of 2012 as compared to the second quarter of 2011 increased by $7.2 million or 7.9% due to: (i) general organic growth of $5.3 million representing an organic growth rate of 6.3%; and (ii) increased sales in its Worldsource food brokerage business of $1.9 million due to improved trading opportunities.

Foodservice's organic growth, which was within the Company's guidance of 6% to 8%, was driven by a range of factors including: (i) higher sales to its core hotel, restaurant and institutional customers as a result of several factors including overall improved consumer spending in this channel and the success of its recently completed fresh burger patty production facility; and (ii) improved concessionary product sales due to favourable weather conditions across most of western Canada. These factors were partially offset by relatively flat seafood sales in the Ontario market due to hot weather conditions that negatively impacted consumer demand.

Foodservice's revenue for the first two quarters of 2012 as compared to the first two quarters of 2011 increased by $15.7 million or 9.4% due to: (i) general organic growth of $11.8 million representing a growth rate of 7.6%; (ii) increased sales in its Worldsource food brokerage business of $2.8 million; and (iii) $1.1 million in unusual trading volume in its Hub City Fisheries business resulting from the sale of excess inventory relating to the 2011 salmon fishery.

Looking forward (see Forward Looking Statements), the Company is maintaining its guidance for Foodservice's organic growth rate at 6% to 8%.

Gross Profit
(in thousands of dollars except percentages)
13 weeks % 13 weeks % 26 weeks % 26 weeks %
ended ended ended ended
Jun 30, Jun 25, Jun 30, Jun 25,
2012 2011 2012 2011
Gross profit by segment:
Retail 35,629 23.4% 24,511 26.6% 64,857 22.6% 45,624 26.7%
Foodservice 19,628 19.9% 17,938 19.6% 34,686 19.0% 31,893 19.1%
Consolidated 55,257 22.0% 42,449 23.1% 99,543 21.2% 77,517 22.9%

Retail's gross profit as a percentage of its revenue (gross margin) for the second quarter of 2012 as compared to the second quarter of 2011 decreased from 26.6% to 23.4% primarily due to: (i) the acquisitions of Piller's and SJ in 2011 as these businesses generally have lower average gross margins as compared to Retail's other businesses; and (ii) a change in selling terms whereby certain customers now receive their products FOB the Company's plant versus FOB the customers' warehouses. This resulted in the elimination of freight being billed to these customers and corresponding decreases in gross profit and selling expenses.

Normalizing for the above factors, Retail's margin for the quarter was 27.8% as compared to 26.7% in the second quarter of 2011. The increase in Retail's normalized gross margin was due primarily to: (i) lower costs, albeit still at historically high levels, for a variety of input commodities; and (ii) the impact of margin enhancement initiatives implemented over the last six months including selling price increases, production cost reduction programs and product packaging changes.

Retail's gross margin for the first two quarters of 2012 as compared to the first two quarters of 2011 decreased primarily due to the same factors that resulted in its lower gross margin in the second quarter. Normalizing for these factors, Retail's gross margin for the first two quarters of 2012 was 26.7%, which is consistent with its gross margin for the first two quarters of 2011.

Foodservice's gross margin for the second quarter of 2012 was consistent with its gross margin in the second quarter of 2011 but below average historic levels due to: (i) continued record high costs for certain premium beef input commodities; and (ii) normal fluctuations in its gross margin.

Foodservice's gross margin for the first two quarters of 2012 was consistent with its gross margin for the first two quarters of 2011.

Selling, General and Administrative Expenses (SG&A)

(in thousands of dollars except percentages)
13 weeks % 13 weeks % 26 weeks % 26 weeks %
ended ended ended ended
Jun 30, Jun 25, Jun 30, Jun 25,
2012 2011 2012 2011
SG&A by segment:
Retail 19,798 13.0% 15,508 16.8% 39,026 13.6% 29,095 17.0%
Foodservice 12,574 12.7% 11,586 12.7% 24,168 13.2% 22,397 13.4%
Corporate 1,829 1,639 3,269 3,093
Consolidated 34,201 13.6% 28,733 15.6% 66,463 14.1% 54,585 16.2%

Retail's SG&A in the second quarter of 2012 as compared to the second quarter of 2011 increased by $4.3 million primarily due to: (i) the acquisitions of Piller's and SJ in 2011 which resulted in an increase of $4.7 million; and (ii) a variety of items consisting primarily of variable selling costs associated with

Retail's organic sales growth. These increases were partially offset by: (i) a decrease in freight costs of approximately $0.8 million due to a change in selling terms whereby certain customers now receive their products FOB the Company's plant versus FOB the customers' warehouses. This resulted in the elimination of freight being billed to these customers and corresponding decreases in gross profit and selling expenses; and (ii) reduced distribution related costs resulting from the rationalization of Retail's DSD Network.

Retail's SG&A for the first two quarters of 2012 as compared to the first two quarters of 2011 increased by $9.9 million primarily due to: (i) the acquisitions of Piller's, SJ and Deli Chef in 2011 which resulted in an increase in Retail's SG&A of $10.6 million; and (ii) a variety of items consisting primarily of variable selling costs associated with Retail's organic sales growth. These increases were partially offset by: (i) a decrease in freight costs of approximately $1.6 million due to the change in selling terms whereby certain customers now receive their products FOB the Company's plant versus FOB the customers' warehouses; and (ii) reduced distribution related costs resulting from the rationalization of Retail's DSD Network.

Normalizing for the acquisitions of Piller's and SJ and for the impact of the change in selling terms for certain customers, Retail's SG&A as a percentage of revenue for the first two quarters of 2012 was 16.5% as compared to 17.0% for the first two quarters of 2011. The decrease in Retail's normalized SG&A as a percentage of revenue was due to a range of factors including reduced distribution related costs resulting from the rationalization of its DSD Network.

Foodservice's SG&A in the second quarter of 2012 as compared to the second quarter of 2011 increased by $1.0 million while its SG&A in the first two quarters of 2012 as compared to the first two quarters of 2011 increased by $1.8 million. Both increases were due to a variety of items including higher variable selling costs associated with Foodservice's organic sales growth.

Foodservice's SG&A as a percentage of revenue for the first two quarters of 2012 was 13.2%, which is consistent with its SG&A as a percentage of revenue of 13.4% for the first two quarters of 2011.

ADJUSTED EBITDA
(in thousands of dollars except percentages)
13 weeks % 13 weeks % 26 weeks % 26 weeks %
ended ended ended ended
Jun 30, Jun 25, Jun 30, Jun 25,
2012 2011 2012 2011
Adjusted EBITDA by segment:
Retail 15,831 10.4% 9,003 9.8% 25,831 9.0% 16,529 9.7%
Foodservice 7,054 7.1% 6,352 6.9% 10,518 5.8% 9,496 5.7%
Corporate (1,829) (1,639) (3,269) (3,093)
Consolidated 21,056 8.4% 13,716 7.5% 33,080 7.0% 22,932 6.8%

The Company's Adjusted EBITDA for the first two quarters of 2012 as compared to the first two quarters of 2011 increased by $10.1 million or 44.3% primarily due to: (i) acquisitions; (ii) organic growth in a number of the Company's legacy businesses; (iii) improved selling margins resulting from a variety of factors including lower input commodities costs, increases in product selling prices, production cost reduction programs and product packaging changes; and (iv) reduced distribution related costs resulting from the rationalization of the Company's DSD Network.

The Company's Adjusted EBITDA as a percentage of revenue (Adjusted EBITDA margin) for the first two quarters of 2012 increased to 7.0% as compared to 6.8% for the first two quarters of 2011. This increase was primarily due to improved selling margins and reduced distribution costs as discussed above. These factors were partially offset by the impact of acquisitions completed in 2011 as the average Adjusted EBITDA margins generated by these businesses is lower than those of the Company's legacy businesses.

Normalizing for acquisitions, the Company's Adjusted EBITDA margin for the first two quarters of 2012 was 7.4%.

Looking forward (see Forward Looking Statements), despite the Company's Adjusted EBITDA for the first half of the year exceeding its expectations, it is reducing its Adjusted EBITDA guidance for 2012 from the current range of $75.0 million to $80.0 million to a range of $70.0 million to $75.0 million. This is based on:

  • Food inflation uncertainty resulting from the unknown impact that the significant drought conditions in the U.S. Midwest will have on the cost of some of the input food commodities purchased by the Company, such as wheat, pork and beef. The Company has not yet experienced any material impact on its costs as a result of the U.S. drought issues but is concerned that the current poor crop yields and herd contraction trends associated with these conditions, combined with speculative buying of the associated commodities, will result in rising commodity input prices. This, in turn, could have a short term impact on the Company's selling margins.
  • A temporary shortage of certain turkey raw materials in central Canada that is resulting in significant increases in the cost of this commodity and, in turn, lower selling margins in the
    Retail segment's deli business. The Company is implementing a number of initiatives to address this issue, including applying for supplementary quota to allow for the importation of turkey from other countries, but the timing of when these initiatives will begin having an impact is uncertain at this time.

The Company views these issues as short term in nature and expects that any impact resulting from them will be mitigated in the longer term by a return to normal market conditions and/or product selling price increases.

Interest

The increase in the Company's interest and other financing costs for both the second quarter of 2012 as compared to the second quarter of 2011, and for the first two quarters of 2012 as compared to the first two quarters of 2011, was primarily due to an increase in the Company's net funded debt.

Restructuring Costs

Restructuring costs consist of costs associated with the significant restructuring of one or more of the Company's businesses. In the second quarter of 2012, the Company incurred $0.9 million in restructuring costs consisting of:

  • $0.3 million in charges relating to the Company's restructuring of its direct-to-store distribution network (DSD network) for the convenience store channel. This restructuring, which is expected to be completed in the fourth quarter of 2012, involves the merging and rationalization of the following three DSD networks:
    1. The Company's Direct Plus DSD network, which operates primarily in western Canada;
    2. The DSD network acquired as part of the Deli Chef acquisition in 2011. This network operates in Ontario and Quebec; and
    3. The independent distributor network controlled by the Company's recently acquired
      Pridcorp business. This network operates in various markets across Canada, including the Maritimes.

    Once complete, this initiative is expected to (see Forward Looking Statements): (i) create Canada's only national convenience store DSD network in the sandwich, meat snack and pastry categories; (ii) gain efficiencies by eliminating overlaps where two of the above three DSD networks are servicing the same customer sites; and (iii) further improve the profitability of the DSD delivery routes serviced by the Company's own fleet by adding products to these routes that were previously distributed exclusively by Pridcorp's network. Looking forward (see Forward Looking Statements), the Company anticipates that it will incur an additional $0.6 million in restructuring costs relating to this initiative over the next two quarters.
  • $0.2 million in costs associated with the restructuring of the Company's Canadian sandwich operations. This project, which is expected to be completed in the fourth quarter of 2012, includes: (i) the construction of a new 20,000 square foot sandwich plant in Laval, Quebec, which was completed at the end of the quarter; and (ii) the shutdown in the third quarter of 2012 of the Company's leased sandwich plant in Edmonton, Alberta. Production from this facility will be moved to the Company's other sandwich plant located in Edmonton and to the new Laval facility.

    Once complete, this initiative is expected to (see Forward Looking Statements): (i) provide the Company with state-of-the-art capacity from which to grow its business in central and eastern
    Canada; (ii) generate significant freight savings by consolidating the Company's sandwich production so that products for the central and eastern Canadian markets are made in the new Laval facility and products for the western Canadian market are made at one facility in
    Edmonton. Currently a significant portion of the Company's sandwiches sold in central and eastern Canada are produced in Edmonton; and (iii) reduce the Company's plant operating costs by moving production from its older Edmonton plant into more efficient facilities.

    Looking forward (see Forward Looking Statements), the Company anticipates that it will incur an additional $1.9 million in restructuring costs associated with this initiative over the next two quarters, the majority of which will be for employee severance payments.
  • $0.4 million in redundant lease and startup costs associated with the Company's new artisan bread facility. This initiative is expected to (see Forward Looking Statements): (i) provide a substantial increase in production capacity as Stuyver's previous bakery, which was shut down in July 2012, was operating at near to capacity; and (ii) generate significant production efficiencies based on the automation of a number of production processes.

For the first two quarters of 2012, the Company incurred restructuring costs associated with its DSD network, sandwich production and artisan bread initiatives of $0.6 million, $0.4 million and $0.6 million, respectively.

FREE CASH FLOW

The following table provides a reconciliation of free cash flow to cash flow from operating activities:

(in thousands of dollars)

53 weeks
ended
Dec 31,
2011
26 weeks
ended
Jun 25,
2011
26 weeks
ended
Jun 30,
2012
Rolling
Four
Quarters
Cash flow from operating activities 29,524 1,695 19,585 47,414
Changes in non-cash working capital 6,050 12,303 3,242 (3,011)
Deferred revenue 1,118 1,118 - -
Acquisition transaction costs 1,594 402 53 1,245
Restructuring costs 2,819 1,845 1,660 2,634
Capital maintenance expenditures (2,880) (1,274) (2,049) (3,655)
Free cash flow 38,225 16,089 22,491 44,627

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 August 8, 2012, 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 initiatives; (xi) risks associated with the Company's business acquisition strategies; and (xii) 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 2011 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 August 8, 2012 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
(Unaudited and in thousands of dollars)
June 30, December 31, June 25,
2012 2011 2011
Current assets:
Cash and cash equivalents 3,536 4,860 4,962
Accounts receivable 83,343 78,830 66,925
Other assets 92 103 189
Inventories 94,201 79,977 69,298
Prepaid expenses 5,645 13,455 8,458
186,817 177,225 149,832
Capital assets 183,973 167,982 92,263
Intangible assets 74,618 77,087 55,941
Goodwill 154,819 150,417 139,224
Other assets 2,367 2,250 1,304
Deferred income taxes 33,124 39,952 47,221
635,718 614,913 485,785
Current liabilities:
Cheques outstanding 2,081 2,504 6,996
Bank indebtedness 10,832 18,061 10,050
Dividend payable 6,005 5,958 5,380
Accounts payable and accrued liabilities 89,286 80,162 70,633
Current portion of long-term debt 21,407 20,536 13,201
Provisions for contingent consideration 2,705 2,924 -
Other 100 - 301
132,416 130,145 106,561
Puttable interest in subsidiaries 14,847 15,210 14,817
Deferred revenue 1,698 1,943 2,380
Pension obligation 1,389 1,345 928
Provisions for contingent consideration 8,779 8,360 -
Long-term debt 131,080 162,661 95,751
Convertible unsecured subordinated debentures 142,451 89,396 90,701
Other - 100 -
432,660 409,160 311,138
Equity attributable to shareholders:
Accumulated earnings 141,489 133,370 126,579
Accumulated dividends declared (142,503) (130,497) (119,514)
Retained earnings (deficit) (1,014) 2,873 7,065
Share capital 200,079 198,057 164,557
Equity component of convertible debentures 1,916 1,916 1,916
Reserves 657 1,442 (260)
Non-controlling interest 1,420 1,465 1,369
203,058 205,753 174,647
635,718 614,913 485,785
Premium Brands Holdings Corporation
Consolidated Statements of Operations
(Unaudited and in thousands of dollars except per share amounts)
13 weeks 13 weeks 26 weeks 26 weeks
ended ended ended ended
June 30, June 25, June 30, June 25,
2012 2011 2012 2011
Revenue 251,024 183,849 469,748 337,947
Cost of goods sold 195,767 141,400 370,205 260,430
Gross profit before depreciation and amortization 55,257 42,449 99,543 77,517
Selling, general and administrative expenses before depreciation and amortization 34,201 28,733 66,463 54,585
21,056 13,716 33,080 22,932
Depreciation of capital assets 3,776 2,643 7,395 5,027
Amortization of intangible assets 1,245 800 2,487 1,555
Amortization of other assets - 2 3 3
Interest and other financing costs 4,348 3,483 8,424 6,649
Amortization of financing costs 102 88 212 138
Acquisition transaction costs 5 211 53 402
Change in value of puttable interest in subsidiaries 525 673 705 1,188
Accretion of provisions for contingent consideration 210 - 419 -
Unrealized (gain) loss on foreign currency contracts (200) (189) 100 81
Unrealized loss (gain) loss on interest rate swap contracts 400 - (100) -
Restructuring costs 921 1,574 1,660 1,845
Acquisition bargain purchase gain - (1,355) - (1,355)
Equity loss in associate - 95 - 277
Earnings before income taxes 9,724 5,691 11,722 7,122
Provision for income taxes
Current 314 62 942 1,019
Deferred 2,397 1,155 2,606 626
2,711 1,217 3,548 1,645
Earnings 7,013 4,474 8,174 5,477
Earnings for the period attributable to:
Shareholders 7,004 4,405 8,119 5,327
Non-controlling interest 9 69 55 150
7,013 4,474 8,174 5,477
Earnings per share
Basic and diluted 0.34 0.24 0.40 0.29
Weighted average shares outstanding (in 000's)
Basic 20,325 18,194 20,275 18,148
Diluted 20,420 18,291 20,370 18,245
Premium Brands Holdings Corporation
Consolidated Statements of Cash Flows
(Unaudited and in thousands of dollars)
13 weeks 13 weeks 26 weeks 26 weeks
ended ended ended ended
June 30, June 25, June 30, June 25,
2012 2011 2012 2011
Cash flows from operating activities:
Earnings 7,013 4,474 8,174 5,477
Items not involving cash:
Depreciation of capital assets 3,776 2,643 7,395 5,027
Amortization of intangible and other assets 1,245 802 2,490 1,558
Amortization of financing costs 102 88 212 138
Change in value of puttable interest in
subsidiaries 525 673 705 1,188
Loss (gain) on disposal of capital assets 48 (2) 16 (2)
Accrued interest income (8) (2) (15) (26)
Unrealized (gain) loss on foreign currency
contracts (200) (189) 100 81
Unrealized loss (gain) on interest rate swaps 400 - (100) -
Equity loss in associate - 95 - 277
Deferred revenue (116) (83) (245) (107)
Accretion of convertible debentures 416 390 778 727
Accretion of long-term debt 115 186 292 389
Accretion of provisions for contingent
consideration 210 - 419 -
Acquisition bargain purchase gain - (1,355) - (1,355)
Deferred income taxes 2,397 1,155 2,606 626
15,923 8,875 22,827 13,998
Change in non-cash working capital (5,979) (4,094) (3,242) (12,303)
9,944 4,781 19,585 1,695
Cash flows from financing activities:
Long-term debt - net (42,527) 2,313 (31,242) (30,801)
Bank indebtedness and cheques outstanding (3,836) 9,121 (7,652) 8,549
Convertible debentures - net of issuance costs 54,600 - 54,600 54,600
Deferred revenue - 1,118 - 1,118
Dividends paid to shareholders (6,001) (5,376) (11,959) (10,744)
Other (2) - (2) (18)
2,234 7,176 3,745 22,704
Cash flows from investing activities:
Capital asset additions (12,451) (2,988) (23,683) (6,302)
Business acquisitions - (3,835) - (10,835)
Repayment of share purchase loans and notes
receivable 115 26 184 52
Promissory note from associate - - - (300)
Net proceeds from sales of assets 205 5 293 5
Payments to shareholders of non-wholly owned
subsidiaries (1,007) (171) (1,153) (362)
Purchase of shares of non-wholly owned subsidiary
pursuant to puttable interest - (2,286) - (2,286)
Payment of provisions for contingent consideration (219) - (219) -
Other - (212) - (319)
(13,357) (9,461) (24,578) (20,347)
(Decrease) increase in cash and cash equivalents (1,179) 2,496 (1,248) 4,052
Effects of exchange on cash and cash equivalents (40) 56 (76) 42
Cash and cash equivalents - beginning of period 4,755 2,410 4,860 868
Cash and cash equivalents - end of period 3,536 4,962 3,536 4,962

Contact Information

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

    Premium Brands Holdings Corporation
    Will Kalutycz
    CFO
    (604) 656-3100