Premium Brands Holdings Corporation
TSX : PBH

Premium Brands Holdings Corporation

March 10, 2011 06:00 ET

Premium Brands Holdings Corporation Announces Record Revenue and EBITDA for 2010

VANCOUVER, BRITISH COLUMBIA--(Marketwire - March 10, 2011) - Premium Brands Holdings Corporation (TSX:PBH), a leading producer, marketer and distributor of branded specialty food products, announced today its results for 2010.

HIGHLIGHTS

  • Revenue for 2010 increased by $72.5 million or 15.7% to a record $535.2 million as compared to $462.8 million in 2009. For the quarter, the Company's revenue increased by $44.8 million or 40.3% to $156.0 million.
  • Adjusted EBITDA for 2010 increased by $1.3 million or 3.1% to a record $42.0 million as compared to $40.7 million in 2009. For the quarter, the Company's adjusted EBITDA increased by $0.9 million or 9.1% to $10.6 million.
  • Free cash flow for 2010 of $32.2 million as compared to $29.3 million in 2009.
  • Dividends for 2010 of $1.176 per share totaling $21.0 million.
  • A dividend to free cash flow (payout) ratio of 65.2% in 2010 versus 70.7% in 2009.
  • Earnings before taxes and non-controlling interest for 2010 of $18.7 million or $1.05 per share as compared to $18.7 million or $1.06 per share in 2009. For the quarter, the Company's earnings before taxes and non-controlling interest were $3.6 million or $0.20 per share as compared to $3.5 million or $0.20 per share in the fourth quarter of 2009.
  • During the quarter the Company completed the acquisition of Seattle, WA based SK Food Group Inc. SK Food Group is a leading manufacturer of artisan breakfast sandwiches and wraps.
  • Also during the quarter the Company completed the acquisition of Nanaimo, BC based Hub City Fisheries. Hub City Fisheries is a value-added fresh seafood processor.
  • Subsequent to the quarter the Company completed the acquisition of Canada Bread Company Limited's (TSX:CBY) pre-packaged sandwich operations and related direct-to-store delivery (DSD) networks.
  • Also subsequent to the quarter the Company completed a $57.5 million offering of 5.75% convertible unsecured subordinated debentures, the majority of which is expected to be used to fund future acquisitions and capital projects.
 
SUMMARY FINANCIAL INFORMATION
   
(In thousands of dollars except per share amounts) 13 Weeks Ended 52 Weeks Ended  
  Dec 25, Dec 26, Dec 25,   Dec 26,  
  2010 2009 2010   2009  
Revenue 155,971 111,159 535,243   462,764  
Adjusted EBITDA 10,572 9,686 42,009   40,727  
Earnings before taxes and non-controlling interest 3,638 3,549 18,696   18,705  
EPS before taxes and non-controlling interest 0.20 0.20 1.05   1.06  
Earnings 2,428 3,260 16,250   18,857  
EPS 0.13 0.19 0.91   1.07  
   
Free cash flow     32,215   29,280  
Declared dividends     21,019   20,687  
Declared dividends per share     1.176   1.176  
Free cash flow ratio     65.2 % 70.7 %
Return on adjusted net assets     14.0 % 14.6 %

"2010 was a pivotal year in our evolution as one of North America's leading specialty food companies. In addition to delivering record revenues and EBITDA, we completed five strategic acquisitions with each enhancing or adding to one of our specialty foods business platforms," said Mr. George Paleologou, President and CEO.

"In terms of the fourth quarter, we also generated record sales and EBITDA despite a number of challenges including persistent weakness in certain sales channels as a result of a slower economic environment, and rising commodity prices.

"Overall, we are pleased with the progress we made in 2010 in positioning our Company for the future and that we were able to continue to deliver above average returns to our shareholders, including an annualized dividend of $1.176 per share.

"Looking forward, we are very well positioned for long-term sustainable growth with all of our business platforms, including our newer seafood and ethnic food platforms, capitalizing on a number of current and emerging consumer trends," said Mr. Paleologou.

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, Washington State and Nevada. The Company services over 26,000 customers and its family of brands and businesses include Grimm's, Harvest, McSweeney's, Bread Garden Express, Hygaard, Hempler's, Quality Fast Foods, Gloria's Best of Fresh, Harlan Fairbanks, Creekside Bakehouse, Centennial Foodservice, B&C Foods, Duso's Fine Foods, Maximum Seafood, SK Food Group, Hub City Fisheries, Audrey's, Deli Chef and Hamish & Enzo.

RESULTS OF OPERATIONS
 
Revenue
 
(in thousands of dollars except percentages)
 
    13 weeks %   13 weeks %   52 weeks %   52 weeks %  
    ended     ended     ended     ended    
    Dec 25,     Dec 26,     Dec 25,     Dec 26,    
    2010     2009     2010     2009    
   
Revenue by segment:                        
  Retail 76,469 49.0 % 54,374 48.9 % 248,061 46.3 % 217,606 47.0 %
  Foodservice 79,502 51.0 % 56,785 51.1 % 287,182 53.7 % 245,158 53.0 %
  Consolidated 155,971 100.0 % 111,159 100.0 % 535,243 100.0 % 462,764 100.0 %

Retail's revenue for the fourth quarter of 2010 as compared to the fourth quarter of 2009 increased by $22.1 million or 40.6% primarily due to: (i) the acquisitions of Duso's and SK Food Group which accounted for $18.7 million of the increase; and (ii) general growth of $3.4 million, representing an organic growth rate of approximately 6.3%, across a range of products including premium processed meats, deli products and pre-packaged sandwiches. Consistent with previous quarters, Retail's sales to the economically sensitive convenience store channel continued to stabilize resulting in only a slight decline of $0.2 million or approximately 1.3% for the quarter as compared to the fourth quarter of 2009.

Retail's revenue for 2010 as compared to 2009 increased by $30.5 million or 14.0% primarily due to: (i) the acquisitions of Duso's and SK Food Group which accounted for $22.0 million of the increase; (ii) general growth of $9.4 million, representing an organic growth rate of approximately 6.2%, in sales to retail grocery and other customers not focused on the convenience store sales channel; and (iii) the Company's involvement with the 2010 Vancouver Winter Olympics which resulted in approximately $1.9 million in incremental sales for Retail in the first quarter of 2010. These increases were partially offset by a $2.8 million decrease in sales to the convenience store channel which occurred mainly in the first half of 2010 and was primarily due to the impact of the slowdown in western Canada's economy on consumer spending and related competitive pressures.

Foodservice's revenue for the fourth quarter of 2010 as compared to the fourth quarter of 2009 increased by $22.7 million or 40.0% due to: (i) the acquisitions of South Seas, Maximum Seafood and Hub City Fisheries in 2010 which resulted in $17.9 million in incremental sales; (ii) increased sales to Foodservice's core hotel, restaurant and institutional customers of $4.4 million representing an organic growth rate of approximately 8.4%; and (iii) increased sales in Foodservice's Worldsource food brokerage business of $0.4 million.

Foodservice's revenue for 2010 as compared to 2009 increased by $42.0 million or 17.1% primarily due to: (i) the acquisitions of South Seas, Maximum Seafood and Hub City Fisheries in 2010 and the acquisition of Multi-National Foods late in the first quarter of 2009, which resulted in $38.6 million in incremental sales; (ii) increased sales to Foodservice's core hotel, restaurant and institutional customers of $3.2 million representing an organic growth rate of approximately 1.4%; and (iii) the Company's involvement in the 2010 Vancouver Winter Olympics which resulted in approximately $0.7 million in incremental sales for Foodservice in the first quarter of 2010. These increases were partially offset by a $0.5 million decrease in sales by its Worldsource food brokerage in the first three quarters of 2010 due to limited trading opportunities.

Overall for 2010 as compared to 2009, the Company's revenue increased by $72.5 million with acquisitions accounting for $60.6 million of the increase and general organic growth, at a rate of approximately 2.6%, for $11.9 million. The Company's organic growth rate of 2.6% was below its long-term targeted rate of 6% to 8% primarily due to the impact, particularly in the first half of the year, that the slowdown in western Canada's economy had on consumer spending at its economically sensitive convenience store, hotel and restaurant customers' locations. For the latter half of 2010, the Company's organic growth rate was 5.1% and, for the fourth quarter it was within its targeted growth range at 7.4%.

Gross Profit
 
(in thousands of dollars except percentages)
 
    13 weeks %   13 weeks %   52 weeks %   52 weeks %  
    ended     ended     ended     ended    
    Dec 25,     Dec 26,     Dec 25,     Dec 26,    
    2010     2009     2010     2009    
   
Gross profit by segment:                        
  Retail 20,878 27.3 % 17,258 31.7 % 75,000 30.2 % 71,445 32.8 %
  Foodservice 14,338 18.0 % 12,064 21.2 % 56,637 19.7 % 50,166 20.5 %
  Consolidated 35,216 22.6 % 29,322 26.4 % 131,637 24.6 % 121,611 26.3 %

Retail's gross profit as a percentage of its revenue (gross margin) for the fourth quarter of 2010 as compared to the fourth quarter of 2009 decreased primarily due to:

  • The acquisition of SK Food Group as SK Food Group historically generates lower average gross margins as compared to Retail's other businesses. Excluding SK Food Group, Retail's gross margin for the fourth quarter was 29.1%;
  • Its premium processed meats operations generating below average gross margins in 2010 as a result of record high costs for certain commodities, mainly fresh protein, used in the production of finished products. These record high commodity costs were, in turn, primarily due to a contraction in supply resulting from record low commodity prices in 2009; and
  • Its premium processed meats operations generating higher than average gross margins in 2009 primarily due to historically low costs for the same commodities that were at record high levels in 2010.

Retail's gross margin for 2010 as compared to 2009 decreased primarily due to: (i) the same factors impacting Retail's gross margin in the fourth quarter of 2010; and (ii) Retail's gross margins in the third quarter of 2009 being further enhanced by Retail capitalizing on certain unique buying opportunities.

Looking forward, Retail expects the cost of the input commodities impacting its gross margins to remain at historically high levels until at least the fourth quarter of 2011 due to slower than previously expected increases in supply. In the interim, Retail has initiated product price increases, which will start to take effect in the second quarter of 2011, and is assessing a variety of other alternatives to improve its margins including new product development, packaging changes, and improving plant efficiencies.

Foodservice's gross margin for the fourth quarter of 2010 as compared to the fourth quarter of 2009 decreased primarily due to: (i) a rapid rise during the quarter in the cost of certain commodity beef input materials; (ii) the write-off of approximately $0.4 million in new production line setup costs that had been deferred in prior quarters; and (iii) the acquisition of Maximum Seafood, as Maximum Seafood historically generates lower average gross margins as compared to Foodservice's other businesses. Excluding Maximum Seafood and the new production line setup costs, Foodservice's gross margin for the fourth quarter was 19.1%.

The rapid rise in certain commodity beef costs was largely the result of increasing global demand for certain commodity beef products at a time when overall beef supply was contracting. The impact of this rise in costs on Foodservice's margins was unusually large due to: (i) the speed of the increase which resulted in short term margin loss while certain price increases were implemented; and (ii) a continued challenging economic environment for hotels and restaurants that is resulting in increased pressure on Foodservice to absorb, at minimum on a temporary basis, a portion of the cost increases.

Foodservice's gross margin for 2010 as compared to 2009 decreased primarily due to: (i) the impact of the rapid rise in certain commodity beef costs in the fourth quarter as discussed above; (ii) the acquisition of Maximum Seafood, as Maximum Seafood historically generates lower average gross margins as compared to Foodservice's other businesses; and (iii) the write-off of approximately $0.4 million in new production line setup costs in the fourth quarter. Excluding Maximum Seafood and the new production line setup costs, Foodservice's gross margin for 2010 was 20.3%.

Looking forward, Foodservice expects the cost of the input commodities impacting its gross margins to remain at historically high levels until at least the fourth quarter of 2011. It does, however, expect to see improvement in its margins starting in the second quarter of 2011 and running through to the end of the year due to: (i) the steady implementation of pricing strategies focused on recovering margin lost due to recent commodity input cost increases; (ii) improved operating efficiencies resulting from sales growth expected in 2011; and (iii) the introduction of a new hamburger pattie program when its Calgary facility expansion is completed in April 2011.

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 25,     Dec 26,     Dec 25,     Dec 26,    
    2010     2009     2010     2009    
   
SG&A by segment:                        
  Retail 12,430 16.3 % 9,595 17.6 % 44,806 18.1 % 40,946 18.8 %
  Foodservice 10,911 13.7 % 8,513 15.0 % 39,042 13.6 % 35,050 14.3 %
  Corporate 1,303     1,528     5,780     4,888    
  Consolidated 24,644 15.8 % 19,636 17.7 % 89,628 16.7 % 80,884 17.5 %

Retail's SG&A in the fourth quarter of 2010 as compared to the fourth quarter of 2009 increased by $2.8 million primarily due to: (i) the acquisitions of Duso's and SK Food Group, which accounted for $1.8 million of the increase; (ii) increased compensation expense in certain businesses resulting from a combination of improved performance in 2010 relative to 2009 and the timing of certain accruals; and (iii) increased selling and marketing costs associated with its sales growth. Excluding Duso's and SK Food Group, Retail's SG&A as a percentage of sales for the fourth quarter was 18.5%.

Retail's SG&A for 2010 as compared to 2009 increased by $3.9 million primarily due to: (i) the acquisitions of Duso's and SK Food Group, which accounted for $2.4 million of the increase; and (ii) increased selling and marketing costs associated with its sales growth. Excluding Duso's and SK Food Group, Retail's SG&A as a percentage of sales for 2010 was 18.8%.

Foodservice's SG&A in the fourth quarter of 2010 as compared to the fourth quarter of 2009 increased by $2.4 million primarily due to: (i) the acquisitions of South Seas, Maximum Seafood and Hub City Fisheries in 2010, which accounted for $2.0 million of the increase; and (ii) increased costs associated with the ramp up of Foodservice's infrastructure in anticipation of improving economic conditions and the successful execution of a variety of sales initiatives focused on growing its multi-unit restaurant chain business. Excluding South Seas, Maximum Seafood and Hub City Fisheries, Foodservice's SG&A as a percentage of sales for the fourth quarter was 14.6%.

Foodservice's SG&A in 2010 as compared to 2009 increased by $4.0 million primarily due to: (i) the acquisitions of South Seas, Maximum Seafood and Hub City Fisheries in 2010 which accounted for $3.5 million of the increase; and (ii) increased costs associated with the ramp up of Foodservice's infrastructure in anticipation of improving economic conditions and the successful execution of a variety of sales initiatives focused on growing its multi-unit restaurant chain business. These increases were partially offset by a $0.5 million gain on the sale of its Centennial business' Victoria, BC distribution facility in the second quarter. The Victoria property sale was due to this facility being made redundant by the acquisition of B&C Food Distributors in 2008. Excluding South Seas, Maximum Seafood, Hub City Fisheries and the gain on the Victoria property, Foodservice's SG&A as a percentage of sales for 2010 was 14.4%.

Adjusted EBITDA
 
(in thousands of dollars except percentages)
 
    13 weeks   %   13 weeks   %   52 weeks   %   52 weeks   %  
    ended       ended       ended       ended      
    Dec 25,       Dec 26,       Dec 25,       Dec 26,      
    2010       2009       2010       2009      
   
Adjusted EBITDA by segment:                                
  Retail 8,448   11.0 % 7,663   14.1 % 30,194   12.2 % 30,503   14.0 %
  Foodservice 3,427   4.3 % 3,551   6.3 % 17,595   6.1 % 15,116   6.2 %
  Corporate (1,303 )     (1,528 )     (5,780 )     (4,892 )    
  Consolidated 10,572   6.8 % 9,686   8.7 % 42,009   7.8 % 40,727   8.8 %

The Company's adjusted EBITDA for the fourth quarter of 2010 as compared to the fourth quarter of 2009 and for 2010 as compared to 2009 both increased primarily due to: (i) acquisitions; and (ii) net organic growth among its portfolio of businesses. The impact of these factors was partially offset by reduced selling margins in several businesses resulting from food inflation.

Interest

Interest and other financing costs for the fourth quarter of 2010 as compared to the fourth quarter of 2009 increased by $0.4 million primarily due to: (i) higher net funded debt in the fourth quarter of 2010 as compared to the fourth quarter of 2009; and (ii) higher interest rates on the Company's floating interest rate debt resulting from increases in 2010 in the Bank of Canada's targeted overnight lending rate. These increases were partially offset by a 50 basis points (0.5 percentage points) decrease in the Company's interest rates due to the renegotiation of the credit spread on its senior debt facilities in the quarter.

Interest and other financing costs for 2010 as compared to 2009 increased by $2.9 million due to: (i) higher average net funded debt levels in 2010 as compared to 2009; (ii) the pay down of lower cost senior debt through the issuance of unsecured convertible debentures in the third quarter of 2009; (iii) higher interest rates on the Company's floating interest rate debt resulting from increases in 2010 in the Bank of Canada's targeted overnight lending rate; and (iv) a higher interest rate credit spread on its senior debt facilities in the first two quarters of 2010 as compared to the first two quarters of 2009 due to the renegotiation of the terms on its senior debt facilities in July 2009. These increases were partially offset by a lower credit spread on its senior debt facilities in the fourth quarter of 2010 as discussed above.

Change in Value of Puttable Interest in Subsidiaries

Change in value of puttable interest represents an estimate of the change in the value of options held by non-controlling shareholders of certain subsidiaries of the Company that entitle such shareholders to require the Company to purchase their interest in the applicable subsidiary.

Change in value of puttable interest for the fourth quarter of 2010 as compared to the fourth quarter of 2009 increased by $0.5 million due to changes in the assumptions used to value the put options, namely when certain put options would be exercised and the projected earnings at the time they are exercised.

Change in value of puttable interest for 2010 as compared 2009 increased by $1.3 million primarily due to (i) changes in the assumptions used to value the put options, namely when certain put options would be exercised and the projected earnings at the time they are exercised; and (ii) incremental accretion relating to new put options resulting from business acquisitions made in 2010.

FREE CASH FLOW

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

(in thousands of dollars) 52 weeks   52 weeks  
  ended   ended  
  Dec 25, 2010   Dec 26, 2009  
   
Cash flow from operating activities 33,811   26,634  
Changes in non-cash working capital (2,837 ) 4,672  
Sale of redundant property 1,747   -  
Government grant income 1,207   -  
Capital maintenance expenditures (1,713 ) (2,026 )
   
Free cash flow 32,215   29,280  

FORWARD LOOKING STATEMENTS

This press release 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 9, 2011, 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; and (x) 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 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 9, 2011 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)
 
 
      Dec 25,     Dec 26,  
      2010     2009  
   
Current assets:            
  Cash and cash equivalents $ 868   $ 469  
  Accounts receivable   52,807     34,380  
  Current portion of other assets   194     180  
  Inventories   57,366     45,991  
  Prepaid expenses   3,421     2,116  
  Future income taxes   6,546     4,926  
      121,202     88,062  
   
Capital assets   76,184     66,029  
Investment in significantly influenced company   414     891  
Future income taxes   36,240     43,529  
Intangible assets   53,986     38,298  
Goodwill   142,109     110,535  
Other assets   3,023     2,663  
   
    $ 433,158   $ 350,007  
   
Current liabilities:            
  Cheques outstanding $ 1,670   $ 2,470  
  Bank indebtedness   6,827     2,411  
  Dividend payable   5,368     5,180  
  Accounts payable and accrued liabilities   53,912     37,429  
  Puttable interest in subsidiaries   2,086     1,992  
  Deferred credit   5,417     4,068  
  Current portion of long-term debt   19,822     8,212  
      95,102     61,762  
   
Puttable interest in subsidiaries   10,566     2,001  
Deferred revenue   1,369     -  
Deferred credit   34,373     37,087  
Long-term debt   112,004     74,705  
Convertible unsecured subordinated debentures   37,306     36,769  
      290,720     212,324  
Non-controlling interest   1,269     1,099  
Shareholders' equity:            
  Accumulated earnings   88,018     71,768  
  Accumulated distributions and dividends declared   (108,758 )   (87,739 )
  Retained earnings (deficit)   (20,740 )   (15,971 )
  Share capital   165,365     156,483  
  Equity component of convertible debentures   1,225     1,225  
  Accumulated other comprehensive loss   (4,681 )   (5,153 )
      141,169     136,584  
   
    $ 433,158   $ 350,007  
 
Premium Brands Holdings Corporation
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited and in thousands except per share amounts)
 
  13 weeks   13 weeks     52 weeks   52 weeks  
    ended   ended     ended   ended  
    Dec 25,   Dec 26,     Dec 25,   Dec 26,  
    2010   2009     2010   2009  
   
Revenue $ 155,971 $ 111,159   $ 535,243 $ 462,764  
Cost of goods sold   120,755   81,837     403,606   341,153  
Gross profit   35,216   29,322     131,637   121,611  
Selling, general and administrative expenses   24,644   19,636     89,628   80,884  
    10,572   9,686     42,009   40,727  
Depreciation of capital assets   2,330   1,869     8,210   8,301  
Interest and other financing costs   2,702   2,323     9,994   7,071  
Amortization of intangible and other assets   814   660     2,762   2,558  
Amortization of financing costs   49   88     295   244  
Change in value of puttable interest in subsidiaries 700   200     1,450   200  
Unrealized (gain) loss on foreign currency contracts 193   (66 )   125   818  
Equity loss in significantly influenced company 146   115     477   492  
Conversion costs   -   108     -   1,498  
Plant closure costs   -   840     -   840  
Earnings before income taxes and                    
  non-controlling interest   3,638   3,549     18,696   18,705  
   
Provision for income taxes                    
  Current   850   (79 )   1,140   11  
  Future   326   256     1,076   (147 )
    1,176   177     2,216   (136 )
Earnings before non-controlling interest   2,462   3,372     16,480   18,841  
Non-controlling interest - net of income taxes   34   112     230   (16 )
Earnings $ 2,428 $ 3,260   $ 16,250 $ 18,857  
   
   
Earnings per share:                    
Basic and diluted $ 0.13 $ 0.19   $ 0.91 $ 1.07  
   
Weighted average shares outstanding   18,135   17,618     17,807   17,589  
Premium Brands Holdings Corporation
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited and in thousands)
 
    13 weeks     13 weeks     52 weeks     52 weeks  
    ended     ended     ended     ended  
    Dec 25,     Dec 26,     Dec 25,     Dec 26,  
    2010     2009     2010     2009  
   
Cash flows from operating activities:                        
Earnings before non-controlling interest $ 2,462   $ 3,372   $ 16,480   $ 18,841  
Items not involving cash:                        
    Depreciation of capital assets   2,330     1,869     8,210     8,301  
    Amortization of intangible assets   813     615     2,757     2,509  
    Amortization of other assets   1     45     5     49  
    Amortization of financing costs   49     88     295     244  
    Change in value of puttable interest                        
        in subsidiaries   700     200     1,450     200  
    (Gain) loss on sale of assets   (8 )   (10 )   (407 )   (15 )
    Accrued interest income   24     12     (33 )   (57 )
    Unrealized (gain) loss on foreign                        
      currency contracts   193     (66 )   125     818  
Equity loss in significantly influenced                      
      company   146     115     477     492  
    Deferred revenue   (20 )   -     (299 )   -  
Accretion of convertible debentures 142     71     537     71  
    Accretion of notes payable   173     -     301     -  
    Future income taxes   326     256     1,076     (147 )
    7,331     6,567     30,974     31,306  
Change in non-cash working capital   380     (8,325 )   2,837     (4,672 )
    7,711     (1,758 )   33,811     26,634  
   
Cash flows from financing activities:                        
Long-term debt - net   16,719     (35,104 )   28,022     (23,370 )
Proceeds from convertible debentures   -     37,923     -     37,923  
Bank indebtedness and cheques outstanding 3,211     1,739     991     (6,149 )
Financing costs   (145 )   (410 )   (145 )   (410 )
Purchase of shares under normal course                      
  issuer bid   -     (1 )   -     (116 )
Shares issued under dividend                        
  reinvestment plan   -     361     -     378  
Dividends paid to shareholders   (5,224 )   (1,725 )   (20,831 )   (17,232 )
Share issuance costs   (26 ) -       (26 )   (17 )
Other   8     -     -     -  
    14,543     2,783     8,011     (8,993 )
   
Cash flows from investing activities:                        
Net proceeds from sales of assets   16     116     1,993     217  
Capital asset additions   (1,650 )   (833 )   (5,107 )   (5,742 )
Business acquisitions   (20,208 )   -     (38,895 )   (1,681 )
Conversion to corporation   -     -     -     (8,850 )
Investment in and promissory note from                        
  significantly influenced company   -     (187 )   (100 )   (2,806 )
Deferred revenue   8     -     1,207     -  
Payments to shareholders of non-wholly                        
  owned subsidiaries   (98 )   (135 )   (835 )   (335 )
Repayment of share purchase loans   21     54     84     170  
Other   100     24     192     103  
    (21,811 )   (961 )   (41,461 )   (18,924 )
   
Decrease in cash and cash equivalents   443     64     361     (1,283 )
Effects of exchange on cash and cash equivalents 21     19     38     73  
Cash and cash equivalents - beginning of period 404     386     469     1,679  
Cash and cash equivalents - end of period $ 868   $ 469   $ 868   $ 469  

Contact Information

  • Premium Brands Holdings Corporation
    George Paleologou
    President and CEO
    (604) 656-3100
    or
    Premium Brands Holdings Corporation
    Will Kalutycz
    CFO
    (604) 656-3100
    www.premiumbrandsholdings.com