Premium Brands Holdings Corporation
TSX : PBH

Premium Brands Holdings Corporation

August 07, 2014 07:00 ET

Premium Brands Holdings Corporation Announces Second Quarter 2014 Results

VANCOUVER, BRITISH COLUMBIA--(Marketwired - Aug. 7, 2014) - 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 2014.

HIGHLIGHTS

  • Revenue for the quarter increased by 15.5% to $322.3 million as compared to $278.9 million for the second quarter of 2013.
  • Adjusted EBITDA for the quarter increased to $21.7 million as compared to $21.0 million in the second quarter of 2013 despite record high input commodity protein costs. During the quarter the Company initiated a series of selling price increases in reaction to the high input commodity protein costs, however, due to factors such as customer notice periods, the full benefit of these increases was not realized in the quarter. Had the implemented selling price increases been in place at the start of the second quarter, the Company's adjusted
    EBITDA for the quarter would have been approximately $25.7 million.
  • Earnings for the quarter of $3.7 million or $0.17 per share as compared to $5.3 million or $0.25 per share for the second quarter of 2013. Excluding restructuring costs and adjusting for the $4.2 million in lost margin associated with the unusual protein commodities environment, the Company's normalized earnings for the quarter were $10.1 million or approximately $0.46 per share.
  • The Company declared a quarterly dividend of $0.3125 per share.
  • Rolling four quarters free cash flow of $47.3 million resulting in a dividend to free cash flow ratio of 58.2%.
  • During the quarter the Company completed its Deli Group restructuring initiative. This business is now well positioned to generate long-term sustainable growth in the Company's top and bottom lines.
  • Subsequent to the quarter, the Company sold its NDSD business' Quebec operations to a well-established Quebec based distributor as part of a new strategic alliance.
  • Also subsequent to the quarter the Company completed construction of its new 180,000 square foot sandwich production facility in Columbus, Ohio.

SUMMARY FINANCIAL INFORMATION

(In thousands of dollars except per share amounts and ratios)

13 weeks 13 weeks 26 Weeks 26 Weeks
Ended Ended Ended Ended
Jun 28, Jun 29, Jun 28, Jun 29,
2014 2013 2014 2013
Revenue 322,255 278,929 589,130 508,110
Adjusted EBITDA 21,655 21,015 37,574 33,773
Earnings 3,707 5,323 5,569 6,489
EPS 0.17 0.25 0.26 0.31
Rolling Four Quarters Ended
Jun 28, Dec 28,
2014 2013
Free cash flow 47,339 49,247
Declared dividends 27,541 26,498
Declared dividend per share 1.2500 1.2315
Payout ratio 58.2% 53.8%

"We are very pleased with our overall performance and with what we were able to achieve during the quarter. Our recent capital asset, restructuring and business investments are beginning to accelerate our top line growth and, despite a very challenging and inflationary commodities environment, enabled us to continue growing our adjusted EBITDA," said Mr. George Paleologou, President and CEO.

"Rapid increases in commodity proteins in the first quarter of the year, and early in the second quarter, resulted in record high input costs for many of our businesses. We increased our selling prices to compensate for these additional costs; however, delays resulting from customer notice periods created short-term pressure on our margins. Correspondingly, as the second quarter progressed, and the price increases took effect, we saw a steady improvement in our financial performance with our June results being significantly better than those of the first two months of the quarter.

"Looking forward, we are very optimistic about the latter half of 2014. With the volatility of protein commodity prices settling down and many of our capital and restructuring initiatives complete or nearly complete, we expect to continue generating solid organic growth and to show significant improvement in our margins.

"We are also excited about how full our business acquisitions pipeline is. The challenging commodities environment, in particular, is creating some very unique opportunities that we expect will further expand our portfolio of specialty food businesses and accelerate the growth of our company," 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 % 26 weeks % 26 weeks %
ended ended ended ended
Jun 28, Jun 29, Jun 28, Jun 29,
2014 2013 2014 2013
Revenue by segment:
Retail 203,511 63.2 % 174,305 62.5 % 375,716 63.8 % 312,628 61.5 %
Foodservice 118,744 36.8 % 104,624 37.5 % 213,414 36.2 % 195,482 38.5 %
Consolidated 322,255 100.0 % 278,929 100.0 % 589,130 100 % 508,110 100 %

Retail's revenue for the second quarter of 2014 as compared to the second quarter of 2013 increased by $29.2 million or 16.8% primarily due to organic growth across a range of products and customers. In particular, Retail's sandwich business generated significant growth in both Canada and the U.S. as a result of the introduction by one of its major customers of a variety of new products.

Retail's revenue for the first two quarters of 2014 increased by $63.1 million or 20.2% as compared to the first two quarters of 2013 primarily due to: (i) organic growth of $47.1 million, representing an average growth rate of 15.1%; and (ii) the acquisition of Freybe Gourmet Foods Ltd. at the end of the first quarter of 2013 which accounted for $16.0 million of the increase.

Retail's organic growth rate for the first two quarters of 2014 was well above the Company's targeted range of 6% to 8% primarily due to: (i) selling price increases that were implemented by several of Retail's businesses in response to a record rise in the cost of a variety of input commodity proteins (see Gross Profit); and (ii) an increase in the translated value of Retail's U.S. based businesses' sales resulting from a decline in the value of the Canadian dollar. Excluding these factors, Retail's organic growth for the first two quarters of 2014 was slightly above its targeted range.

Looking forward (see Forward Looking Statements), the Company is expecting Retail's organic growth to continue exceeding its targeted range for the next several quarters based on (i) the factors outlined above; and (ii) the expected completion of several production capacity expansion projects.

Foodservice's revenue for the second quarter of 2014 as compared to the second quarter of 2013 increased by $14.1 million or 13.5% primarily due to: (i) organic growth of $10.3 million, representing an average growth rate of 10.5%; and (ii) the acquisition of Reddi Foods which accounted for $1.8 million of the increase; and (iii) increased sales in its Worldsource food brokerage business of $2.0 million resulting from improved trading opportunities and average higher selling prices for beef and pork products.

Foodservice's revenue for the first two quarters of 2014 increased by $17.9 million or 9.2% as compared to the first two quarters of 2013 primarily due to: (i) organic growth of $14.8 million, representing an average growth rate of 8.1%; (ii) the acquisition of Reddi Foods which accounted for $1.8 million of the increase; and (iii) increased sales in its Worldsource food brokerage business of $1.3 million resulting from improved trading opportunities and average higher selling prices for beef and pork products.

Foodservice's organic growth rate for the first two quarters of 2014 was at the top end of the Company's targeted range of 6% to 8% mainly due to selling price increases that were implemented by several of its businesses in response to a record rise in the cost of a variety of input commodity proteins (see Gross Profit). These increases were partially offset by lower than expected growth in Foodservice's sales volume that was the result of a variety of factors including poor weather conditions across the Prairies and Ontario for most of the first half of 2014.

Looking forward (see Forward Looking Statements), the Company is expecting Foodservice's organic growth to remain within its targeted range of 6% to 8% for the last half of 2014 based on: (i) selling price increases associated with the record rise in input commodity proteins; and (ii) a return to more normal weather conditions.

Gross Profit
(in thousands of dollars except percentages)
13 weeks % 13 weeks % 26 weeks % 26 weeks %
ended ended ended ended
Jun 28, Jun 29, Jun 28, Jun 29,
2014 2013 2014 2013
Gross profit by segment:
Retail 39,966 19.6 % 39,706 22.8 % 71,194 18.9 % 67,688 21.7 %
Foodservice 20,822 17.2 % 19,454 18.6 % 37,122 17.4 % 36,011 18.4 %
Consolidated 60,788 18.9 % 59,160 21.2 % 108,316 18.4 % 103,699 20.4 %

Retail's gross profit as a percentage of its revenue (gross margin) for the second quarter of 2014 as compared to the second quarter of 2013 decreased primarily due to: (i) an extremely rapid rise in the cost of a variety of input commodity proteins, which in some cases exceeded 75%, during the first quarter of 2014. Retail's businesses initiated a series of selling price increases designed to return its gross margin to normal levels, however, due to factors such as customer notice periods, the full benefit of these increases was not realized in the quarter. Had the implemented selling price increases been in place at the start of the second quarter, Retail's gross margin would have been approximately 21.2%; (ii) lower percentage margins on products sold on a cost plus basis due to a combination of factors including the significant increases in the cost of input commodity proteins; and (iii) further increases in the cost of certain input commodity proteins during the second quarter for which Retail's businesses are implementing additional selling price increases that will take effect in the third quarter of 2014.

Retail's gross margin for the first two quarters of 2014 as compared to the first two quarters of 2013 decreased primarily due to the factors discussed above. Overall, the impact on Retail's gross profit of higher input commodity protein costs, net of realized selling price increases, was approximately $6.3 million for the first two quarters of 2014.

Looking forward (see Forward Looking Statements), the Company expects Retail's margins to improve in the latter half of 2014 based on: (i) selling price increases that were implemented in the first and second quarters of 2014 which took effect in the second quarter; (ii) selling price increases that are currently being implemented which will take effect in August and September; and (iii) reduced volatility in the cost of input commodity proteins. Longer term the Company anticipates that commodity protein prices will return to more normal levels as: (i) higher commodity prices and current favourable feed prices result in the expansion of livestock herds; and (ii) North American hog herds recover from a recent outbreak of Porcine Epidemic Diarrhea Virus.

Foodservice's gross margin for the second quarter of 2014 as compared to the second quarter of 2013 and for the first two quarters of 2014 as compared to the first two quarters of 2013 decreased primarily due to continued increases in the cost of a variety of input commodity proteins, in general, and certain premium beef commodities, in particular. Excluding the impact of this issue, which is estimated at approximately $0.7 million for the second quarter of 2014 and $1.6 million for the first two quarters of 2014, Foodservice's gross margin for the second quarter and for the first two quarters of 2014 was 18.1%.

Looking forward (see Forward Looking Statements), the Company expects Foodservice's margins to remain at lower than normal levels for the next several quarters due to continued volatility and supply issues for premium beef products sold to the restaurant industry. As discussed above, longer term the Company anticipates that commodity protein prices will return to more normal levels as higher commodity prices and current favourable feed prices result in the expansion of livestock herds.

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 28, Jun 29, Jun 28, Jun 29,
2014 2013 2014 2013
SG&A by segment:
Retail 23,388 11.5 % 23,700 13.6 % 45,260 12.0 % 41,854 13.4 %
Foodservice 13,734 11.6 % 12,774 12.2 % 26,500 12.4 % 24,835 12.7 %
Corporate 2,011 1,671 3,685 3,237
Consolidated 39,133 12.1 % 38,145 13.7 % 75,445 12.8 % 69,926 13.8 %

Retail's SG&A for the second quarter of 2014 as compared to the second quarter of 2013 decreased by $0.3 million due to a variety of factors including a reduction in discretionary marketing and advertising programs during the period in which certain selling price increases, designed to address higher commodity input protein costs, were being implemented (see Gross Profit). These decreases were partially offset by increased variable selling costs associated with Retail's organic sales growth (see Revenue).

Retail's SG&A for the first two quarters of 2014 as compared to the first two quarters of 2013 increased primarily due to: (i) additional SG&A associated with the acquisition of Freybe Gourmet Foods Ltd. at the end of the first quarter of 2013; and (ii) increased variable selling costs associated with Retail's organic sales growth (see Revenue). These increases were partially offset by a variety of factors including a reduction in discretionary marketing and advertising programs during the period in which certain selling price increases, designed to address higher commodity input protein costs, were being implemented.

Retail's SG&A as a percentage of its revenue for the first two quarters of 2014 as compared to the first two quarters of 2013 decreased mainly due to: (i) the fixed nature of certain costs relative to the growth in its revenue (see Revenue); and (ii) a decrease in a variety of SG&A costs as discussed above.

Foodservice's SG&A for the second quarter of 2014 as compared to the second quarter of 2013 and for the first two quarters of 2014 as compared to the first two quarters of 2013 increased primarily due to: (i) additional sales and administrative infrastructure needed to support a variety of growth initiatives; and (ii) increased variable selling costs associated with its organic sales growth (see Revenue).

Foodservice's SG&A as a percentage of its revenue, for the second quarter of 2014 as compared to the second quarter of 2013 and for the first two quarters of 2014 as compared to the first two quarters of 2013 decreased primarily due the fixed nature of certain costs relative to the growth in its revenue (see Revenue).

Other Income

Other income for the first two quarters of 2014 consists of a $4.7 million gain resulting from the sale and leaseback of a distribution centre in Surrey, BC.

Adjusted EBITDA
(in thousands of dollars except percentages)
13 weeks % 13 weeks % 26 weeks % 26 weeks %
ended ended ended ended
Jun 28, Jun 29, Jun 28, Jun 29,
2014 2013 2014 2013
Adjusted EBITDA by segment:
Retail 16,578 8.1 % 16,006 9.2 % 30,637 8.2 % 25,834 8.3 %
Foodservice 7,088 6.0 % 6,680 6.4 % 10,622 5.0 % 11,176 5.7 %
Corporate (2,011 ) (1,671 ) (3,685 ) (3,237 )
Consolidated 21,655 6.7 % 21,015 7.5 % 37,574 6.4 % 33,773 6.6 %

The Company's adjusted EBITDA for the second quarter of 2014 as compared to the second quarter of 2013 increased by $0.7 million or 3.0% to $21.7 million primarily due to: (i) the Company's sales growth (see Revenue); and (ii) improved operating efficiencies associated with the reconfiguration of the Company's deli meats production capacity (see Restructuring Charges). These increases were partially offset by a decrease of approximately $3.5 million in the Company's gross profit that was the result of higher input commodity protein costs (see Gross Profit).

The Company's adjusted EBITDA for the first two quarters of 2014 as compared to the first two quarters of 2013 increased by $3.8 million or 11.3% to $37.6 million primarily due to: (i) a $4.7 million gain resulting from the sale and leaseback of a distribution centre in Surrey, BC (see Other Income); (ii) the Company's sales growth (see Revenue); and (iii) improved operating efficiencies associated with the reconfiguration of the Company's deli meats production capacity (see Restructuring Charges). These increases were partially offset by a decrease of approximately $6.3 million in the Company's gross profit that was the result of higher input commodity protein costs (see Gross Profit).

Looking forward (see Forward Looking Statements) the Company expects its adjusted EBITDA for the last half of 2014 as compared to the last half of 2013 to show significant improvement based on:

  • Implementation of selling price increases designed to address the first and second quarter gross margin issues that resulted from record high costs for a variety of input commodity proteins (see Gross Profit);
  • Stabilization of commodity pork markets and continued volatility in commodity premium beef markets but to a lesser degree as compared to the first half of 2014;
  • Improved performance by its Freybe Gourmet Foods business as the major initiatives associated with the restructuring of its Langley production facility were completed in the second quarter of 2014 (see Restructuring Costs); and
  • Steady growth in a number of the Company's businesses that is expected to result from capital projects completed in 2012, 2013 and 2014. These include Stuyver's new artisan bakery, Deli Chef's new sandwich plant, Centennial Foodservice's new seafood processing facility and SK Food Group's new sandwich plant.

Interest and other financing costs

The Company's interest and other financing costs for the second quarter of 2014 as compared to the second quarter of 2013 and for the first two quarters of 2014 as compared to the first two quarters of 2014 increased by $0.4 million and $1.2 million, respectively, primarily due to an increase in the Company's funded debt resulting from the Company's project capital expenditure initiatives.

Restructuring Costs

Restructuring costs consist of costs associated with the significant restructuring of one or more of the Company's businesses. During the first two quarters of 2014, the Company incurred $7.8 million in restructuring costs consisting of:

  • $3.4 million for the reconfiguration of the Company's deli meats production capacity including a major realignment and expansion of the capacity of Freybe Gourmet Foods' plant in Langley, BC. This project, which was completed in the second quarter of 2014, provided the Company's deli meats businesses with much needed incremental production capacity.
  • $3.0 million for the reconfiguration of the Company's sandwich production capacity including the construction of a new 180,000 square foot production facility in Columbus, OH. This project, which commenced in the fourth quarter of 2013 and is scheduled to be completed early in the third quarter of 2014, will provide the Company's sandwich businesses with much needed incremental production capacity as well as improved efficiencies at its existing plants.
  • $1.4 million in costs relating to the restructuring and rationalization of NDSD, the Company's direct-to-store distribution ("DSD") business for the convenience store industry, in order to address changes occurring in this industry. The major elements of this initiative were completed in 2013 with the costs in 2014 consisting mainly of employee severance payments and the write-down of inventory made obsolete by the restructuring. No further costs are expected to be incurred on this project.
    Subsequent to the quarter, the Company sold its NDSD business' Quebec operations to a well- established Quebec based distributor ("Martel") as part of a new strategic alliance. Under this alliance:
    • Martel will combine some of its existing operations with NDSD's Quebec operations to create a strong and efficient direct-to-store distribution network for the Quebec convenience store market;
    • Martel will be the exclusive distributor of the Company's sandwiches and meat snacks to direct-to-store distribution customers in Quebec; and
    • Martel will source primarily all of its sandwiches and meats snacks sold to the convenience store industry from the Company.
    The transaction is expected to result in an immediate increase in the Company's annual adjusted EBITDA of at least $0.8 million due to the Quebec region of NDSD's business not being profitable.
FREE CASH FLOW
(in thousands of dollars) 52 weeks 26 weeks 26 weeks Rolling
ended ended ended Four
Dec 28, 2013 Jun 29, 2013 Jun 28, 2014 Quarters
Cash flow from operating activities 15,156 12,073 12,603 15,686
Changes in non-cash working capital 22,663 7,491 2,826 17,998
Sale of redundant property 2,413 - - 2,413
Acquisition transaction costs 560 472 144 232
Restructuring costs 12,749 4,519 7,844 16,074
Capital maintenance expenditures (4,294 ) (1,664 ) (2,434 ) (5,064 )
Free cash flow 49,247 22,891 20,983 47,339

FORWARD LOOKING INFORMATION

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 6, 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; (xiv) the Company's ability to raise the capital needed to fund its various growth initiatives; and (xv) labour related issues including potential labour disputes with employees represented by labour unions and labour shortages. 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 August 6, 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
(Unaudited and in thousands of dollars)
June 28, December 28, June 29,
2014 2013 2013
Current assets:
Cash and cash equivalents 3,252 1,437 2,522
Accounts receivable 102,892 92,880 90,327
Inventories 119,926 108,729 100,367
Prepaid expenses 6,820 7,746 7,349
Other assets 161 358 498
233,051 211,150 201,063
Capital assets 194,494 177,275 178,579
Intangible assets 72,874 75,099 77,286
Goodwill 169,409 168,925 167,442
Investment in associates 9,722 7,949 7,814
Deferred income taxes 26,342 26,697 25,865
Other assets 3,133 3,222 4,262
709,025 670,317 662,311
Current liabilities:
Cheques outstanding 3,966 5,689 2,280
Bank indebtedness 26,797 29,466 22,559
Dividend payable 6,922 6,863 6,595
Accounts payable and accrued liabilities 113,104 94,288 98,227
Current portion of long-term debt 147,544 113,222 23,549
Current portion of convertible unsecured subordinated debentures 9,057 - -
Current portion of provisions 1,152 2,219 4,223
308,542 251,747 157,433
Long-term debt 10,301 11,938 147,557
Convertible unsecured subordinated debentures 166,680 177,057 133,727
Puttable interest in subsidiaries 14,639 14,498 15,541
Deferred revenue 3,458 1,103 1,381
Provisions 2,742 3,820 3,695
Pension obligation 728 653 1,952
507,090 460,816 461,286
Equity attributable to shareholders:
Accumulated earnings 167,218 161,560 154,461
Accumulated dividends declared (195,210 ) (181,376 ) (167,643 )
Deficit (27,992 ) (19,816 ) (13,182 )
Share capital 224,626 221,994 209,558
Equity component of convertible debentures 1,744 1,744 1,747
Reserves 2,996 4,929 2,159
Non-controlling interest 561 650 743
201,935 209,501 201,025
709,025 670,317 662,311
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 28, June 29, June 28, June 29,
2014 2013 2014 2013
Revenue 322,255 278,929 589,130 508,110
Cost of goods sold 261,467 219,769 480,814 404,411
Gross profit before depreciation and amortization 60,788 59,160 108,316 103,699
Selling, general and administrative expenses before depreciation and amortization 39,133 38,145 75,445 69,926
Other income - - (4,703 ) -
21,655 21,015 37,574 33,773
Depreciation of capital assets 4,617 4,485 9,196 8,428
Amortization of intangible assets 1,110 1,092 2,227 2,180
Amortization of other assets 2 2 3 3
Interest and other financing costs 5,083 4,674 10,059 8,839
Amortization of financing costs 74 80 147 154
Acquisition transaction costs 144 439 144 472
Change in value of puttable interest in subsidiaries 583 282 799 482
Accretion of provisions 80 101 182 104
Unrealized loss (gain) on foreign currency contracts 300 (200 ) 200 (300 )
Unrealized gain on interest rate swap contracts - (100 ) - -
Restructuring costs 4,479 3,222 7,844 4,519
Equity loss (income) in associates (81 ) (177 ) (59 ) 5
Earnings before income taxes 5,264 7,115 6,832 8,887
Provision for income taxes
Current 290 848 691 1,206
Deferred 1,267 944 572 1,192
1,557 1,792 1,263 2,398
Earnings 3,707 5,323 5,569 6,489
Earnings (loss) for the period attributable to:
Shareholders 3,764 5,349 5,658 6,545
Non-controlling interest (57 ) (26 ) (89 ) (56 )
3,707 5,323 5,569 6,489
Earnings per share
Basic and diluted 0.17 0.25 0.26 0.31
Weighted average shares outstanding (in 000's)
Basic 22,037 20,982 21,983 20,969
Diluted 22,146 21,076 22,092 21,064
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 28, June 29, June 28, June 29,
2014 2013 2014 2013
Cash flows from operating activities:
Earnings 3,707 5,323 5,569 6,489
Items not involving cash:
Depreciation of capital assets 4,617 4,485 9,196 8,428
Amortization of intangible and other assets 1,112 1,094 2,230 2,183
Amortization of financing costs 74 80 147 154
Change in value of puttable interest in subsidiaries 583 282 799 482
Loss (gain) on disposal of capital assets 34 (38 ) (4,668 ) (41 )
Accrued interest income (5 ) (7 ) (11 ) (13 )
Unrealized loss (gain) on foreign currency and interest rate swap contracts 300 (300 ) 200 (300 )
Equity loss (income) in associates (81 ) (177 ) (59 ) 5
Deferred revenue (50 ) (121 ) (174 ) (248 )
Accretion of convertible debentures, long-term debt and provisions 799 749 1,628 1,403
Change in value of cash conversion option liability - - - (170 )
Deferred income taxes 1,267 944 572 1,192
12,357 12,314 15,429 19,564
Change in non-cash working capital (10,025 ) 4,952 (2,826 ) (7,491 )
2,332 17,266 12,603 12,073
Cash flows from financing activities:
Long-term debt - net 17,437 (20,527 ) 32,511 26,464
Bank indebtedness and cheques outstanding 7,427 (10,674 ) (4,392 ) 11,731
Dividends paid to shareholders (6,912 ) (6,170 ) (13,775 ) (12,358 )
Purchase of 7.00% Debentures under normal course issuer bid - (41 ) - (219 )
Other - (16 ) - (54 )
17,952 (37,428 ) 14,344 25,564
Cash flows from investing activities:
Capital asset additions (17,145 ) (3,683 ) (29,183 ) (6,764 )
Business acquisitions (1,702 ) 505 (1,702 ) (53,842 )
Payments to shareholders of non-wholly owned subsidiaries (472 ) (750 ) (595 ) (864 )
Payment of provisions (2,268 ) (247 ) (2,326 ) (500 )
Collection of share purchase loans and notes receivable 19 74 81 92
Investment in associates - (2,638 ) (1,860 ) (2,638 )
Promissory note from associate - 500 - 500
Distribution from associate 146 - 146 -
Net proceeds from sale and leaseback of asset - 25,000 10,200 25,000
Net proceeds from other asset sales 108 52 136 55
(21,314 ) 18,813 (25,103 ) (38,961 )
Increase (decrease) in cash and cash equivalents (1,030 ) (1,349 ) 1,844 (1,324 )
Effects of exchange on cash and cash equivalents (94 ) 65 (29 ) 88
Cash and cash equivalents - beginning of period 4,376 3,806 1,437 3,758
Cash and cash equivalents - end of period 3,252 2,522 3,252 2,522

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