Premium Brands Holdings Corporation
TSX : PBH

Premium Brands Holdings Corporation

November 07, 2013 07:30 ET

Premium Brands Holdings Corporation Announces Third Quarter Results

VANCOUVER, BRITISH COLUMBIA--(Marketwired - Nov. 7, 2013) - Premium Brands Holdings Corporation (TSX:PBH), a leading producer, marketer and distributor of branded specialty food products, announced today its results for the third quarter of 2013.

HIGHLIGHTS

  • Revenue for the quarter increased by 13.5% to $287.0 million as compared to $252.9 million for the third quarter of 2012. Revenue for the first three quarters of 2013 as compared to the first three quarters of 2012 increased by $76.8 million or 10.7% to $795.1 million.
  • Adjusted EBITDA for the quarter increased to $21.8 million as compared to $19.7 million in the third quarter of 2012. For the first three quarters of 2013, adjusted EBITDA increased to $55.5 million as compared to $52.0 million for the first three quarters of 2012.
  • The Company declared a quarterly dividend of $0.3125 per share.
  • Rolling four quarters free cash flow increased to $47.2 million from $46.8 million in 2012 resulting in a dividend to free cash flow ratio of 54.7%.
  • Subsequent to the quarter the Company completed the issuance of $57.5 million of convertible unsecured subordinated debentures bearing interest at 5.5% and due in June 2019.
  • Also subsequent to the quarter, the Company's SK Food Group business initiated a project to build a new $21.6 million state-of-the-art sandwich production facility in the north eastern U.S. The new plant will complement SK Food Group's existing facility in Reno, NV.

SUMMARY FINANCIAL INFORMATION

(In thousands of dollars except per share amounts and ratios) 13 Weeks 13 Weeks 39 Weeks 39 Weeks
Ended Ended Ended Ended
Sep 28, Sep 29, Sep 28, Sep 29,
2013 2012 2013 2012
Revenue 286,955 252,887 795,065 718,314
Adjusted EBITDA 21,774 19,723 55,547 52,014
Net earnings 5,180 4,599 11,669 12,773
EPS 0.25 0.22 0.56 0.62
Rolling Four Quarters Ended
Sep 28, Dec 29,
2013 2012
Free cash flow 47,198 46,784
Declared dividends 25,838 24,381
Declared dividend per share 1.213 1.176
Payout ratio 54.7 % 52.1 %

"The majority of our businesses, including our foodservice and sandwich groups, delivered solid results for the quarter driven by strong demand for their products across a variety of sales channels. Unfortunately a large part of this success was offset by a spike in the cost of certain input protein commodities that temporarily impacted the margins of our deli group," said Mr. George Paleologou, President and CEO.

"Our deli group's results were also negatively impacted by operational issues resulting from the transitioning of production from an older plant that was shut down earlier this year to several of our other plants. The majority of these issues have now been addressed and we expect to see a significant improvement in the deli group's earnings over the next several quarters.

"We are very pleased with the progress all of our businesses are making in positioning themselves for continued growth in both their top and bottom lines. Over the last two years we have invested a significant amount of capital in them and are now on the cusp of realizing on these investments, both through improved margins and sales growth.

"We are also very excited to be announcing our North American sandwich group's new initiative to build a $21.6 million state-of-the-art production facility in the north eastern U.S. This facility will complement the sandwich group's facilities in Reno, NV, Laval, QC and Edmonton, AB and will give the business the capacity needed to continue growing at double digit rates. Furthermore, this project will position our sandwich group, which is already one of, if not the largest, prepared sandwich businesses in North America, to provide national sandwich assembly solutions to retail and restaurant chains across North America," 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 and Washington State. The Company services over 22,000 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, Direct Plus, National Direct-to-Store Distribution (NDSD), Harlan Fairbanks, Creekside Bakehouse, 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 % 39 weeks % 39 weeks %
ended ended ended ended
Sep 28, Sep 29, Sep 28, Sep 29,
2013 2012 2013 2012
Revenue by segment:
Retail 178,963 62.4 % 156,383 61.8 % 491,591 61.8 % 439,197 61.1 %
Foodservice 107,992 37.6 % 96,504 38.2 % 303,474 38.2 % 279,117 38.9 %
Consolidated 286,955 100.0 % 252,887 100.0 % 795,065 100.0 % 718,314 100.0 %

Retail's revenue for the third quarter of 2013 as compared to the third quarter of 2012 increased by $22.6 million or 14.4% due to: (i) the acquisition of Freybe which accounted for $19.9 million of the increase; and (ii) organic growth of $5.6 million, representing an average growth rate of 4.1%, from its legacy businesses after excluding NDSD.

These increases were partially offset by (i) a $1.6 million decrease in fresh sandwich sales to the C-store channel resulting from the sale of Retail's fresh sandwich plant in Etobicoke, ON in the fourth quarter of 2012; and (ii) a $1.3 million decrease in NDSD's sales resulting primarily from the restructuring of its convenience store (C-store) distribution network. The restructuring resulted in the conversion of NDSD's customers in certain geographic regions from being serviced by NDSD's direct-to-store delivery trucks to being serviced by third party distributors and wholesale distributors. Correspondingly, in regions where this conversion has occurred the Company now sells its products at a discounted price to the new distributor who in turn sells and distributes the Company's products to C-store retailers.

The low organic growth rate of Retail's legacy businesses, as compared to its targeted growth rate of 6% to 8%, was primarily due to lost sales resulting from temporary capacity issues associated with the transitioning of products from its Richmond deli meats plant to other production facilities (see Restructuring Costs). Normalizing for the lost sales, Retail's organic growth rate was within Retail's targeted range.

Retail's revenue for the first three quarters of 2013 increased by $52.4 million or 11.9% as compared to the first three quarters of 2012 due to: (i) the acquisition of Freybe which accounted for $40.0 million of the increase; and (ii) organic growth of $23.9 million, representing an average growth rate of 6.2%, from its legacy businesses after excluding NDSD.

These increases were partially offset by: (i) a $6.5 million decrease in NDSD's sales resulting from the restructuring of its C-store distribution network as well as general contraction of food sales in the C-store channel in the first two quarters of the year; and (ii) the sale of Retail's fresh sandwich plant in Etobicoke, ON in the fourth quarter of 2012 which resulted in a $5.0 million decrease in fresh sandwich sales to the C-store channel.

Looking forward (see Forward Looking Statements), the Company is not providing growth guidance for the balance of 2013 for its Retail segment due to uncertainties associated with its Richmond plant transition initiative (see Restructuring Costs).

Foodservice's revenue for the third quarter of 2013 as compared to the third quarter of 2012 increased by $11.5 million or 11.9% due to: (i) general organic growth of $7.0 million representing an organic growth rate of 7.6%; (ii) the acquisition of certain businesses from Harbour Marine which accounted for $2.0 million of the increase; and (iii) increased sales in its Worldsource food brokerage business of $2.5 million resulting from improved trading opportunities.

Foodservice's revenue for the first three quarters of 2013 as compared to the first three quarters of 2012 increased by $24.4 million or 8.7% due to: (i) general organic growth of $14.4 million representing an organic growth rate of 5.4%; (ii) the acquisition of certain businesses from Harbour Marine which accounted for $5.8 million of the increase; and (iii) increased sales in its Worldsource food brokerage business of $4.2 million resulting from improved trading opportunities.

Foodservice's organic growth rate for the first three quarters of 2013 was below the Company's long-term target of 6% to 8% due to: (i) a general supply shortage of wild and exotic seafood that impacted the sales of Maximum Seafood and Hub City Fisheries, particularly in the second quarter; and (ii) poorer than normal weather in western Canada in the second quarter which impacted Harlan Fairbanks.

Looking forward (see Forward Looking Statements), for the balance of 2013 the Company expects Foodservice's organic sales growth to be within its long-term targeted range of 6% to 8%.

Gross Profit

(in thousands of dollars except percentages)
13 weeks % 13 weeks % 39 weeks % 39 weeks %
ended ended ended ended
Sep 28, Sep 29, Sep 28, Sep 29,
2013 2012 2013 2012
Gross profit by segment:
Retail 38,038 21.3 % 35,692 22.8 % 105,726 21.5 % 99,620 22.7 %
Foodservice 20,232 18.7 % 18,255 18.9 % 56,243 18.5 % 52,941 19.0 %
Consolidated 58,270 20.3 % 53,947 21.3 % 161,969 20.4 % 152,561 21.2 %

Retail's gross profit as a percentage of its revenue (gross margin) for the third quarter of 2013 as compared to the third quarter of 2012 decreased primarily due to: (i) several of Retail's businesses experiencing higher input costs that were the result of a temporary spike in certain protein commodity prices. This factor accounted for nearly half of the decrease in Retail's gross margin in the third quarter; (ii) reduced gross margins on product sales transitioned to third party distributors as part of the restructuring of NDSD's business (see Revenue). Corresponding with this change, and the lost margin associated with it, NDSD has been able to significantly reduce its SG&A (see Selling, General and Administrative Expenses); and (iii) approximately $0.3 million in production inefficiencies at SK Food Group's Reno, NV plant resulting from sub-standard input materials received from a third party supplier. SK Food Group is in the process of attempting to recover these costs from the supplier.

Retail's gross margin for the first three quarters of 2013 as compared to the first three quarters of 2012 decreased due to: (i) the restructuring of NDSD's business as discussed above; (ii) the temporary spike in certain protein commodity prices in the third quarter; (iii) temporary production inefficiencies at SK Food Group's Reno, NV plant in the first quarter of 2013 due to a combination of the launch of new sandwich wraps for two large international customers in the fourth quarter of 2012 and the installation of several new pieces of equipment during the first quarter of 2013; and (iv) approximately $0.3 million in production inefficiencies at SK Food Group's Reno, NV plant in the third quarter resulting from sub-standard input materials received from a third party supplier.

Foodservice's gross margin for the third quarter of 2013 as compared to the third quarter of 2012 decreased primarily due to Maximum Seafood not being able to maintain its historic selling margins as a result of global shortages in certain species of wild and exotic seafood combined with regional consumer price resistance. This decrease was, however, mostly offset by strong margins in Hub City Fisheries that were the result of several factors including a strong pink salmon fishery and its first time participation in a test fishery by the Pacific Salmon Commission.

Foodservice's gross margin for the first three quarters of 2013 as compared to the first three quarters of 2012 decreased due to: (i) poor production efficiencies at Hub City Fisheries in the second quarter resulting from record low sockeye salmon runs and a corresponding shortage of wild fish for processing; and (ii) lower gross margins in Maximum Seafood as discussed above.

Selling, General and Administrative Expenses (SG&A)

(in thousands of dollars except percentages)
13 weeks % 13 weeks % 39 weeks % 39 weeks %
ended ended ended ended
Sep 28, Sep 29, Sep 28, Sep 29,
2013 2012 2013 2012
SG&A by segment:
Retail 22,131 12.4 % 20,602 13.2 % 63,985 13.0 % 59,488 13.5 %
Foodservice 12,926 12.0 % 12,315 12.8 % 37,761 12.4 % 36,483 13.1 %
Corporate 1,439 1,307 4,676 4,576
Consolidated 36,496 12.7 % 34,224 13.5 % 106,422 13.4 % 100,547 14.0 %

Retail's SG&A for the third quarter of 2013 as compared to the third quarter of 2012 as well as for the first three quarters of 2013 as compared to the first three quarters of 2012 increased due to: (i) the acquisition of Freybe; and (ii) increased selling and marketing costs associated with Retail's organic sales growth (see Revenue).

These increases were partially offset by: (i) a significant decrease in NDSD's SG&A as a result of its restructuring (see Gross Profit); and (ii) a $1.2 million gain on the sale of vacant land in Edmonton, AB.

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

Adjusted EBITDA

(in thousands of dollars except percentages)
13 weeks % 13 weeks % 39 weeks % 39 weeks %
ended ended ended ended
Sep 28, Sep 29, Sep 28, Sep 29,
2013 2012 2013 2012
Adjusted EBITDA by segment:
Retail 15,907 8.9 % 15,090 9.6 % 41,741 8.5 % 40,132 9.1 %
Foodservice 7,306 6.8 % 5,940 6.2 % 18,482 6.1 % 16,458 5.9 %
Corporate (1,439 ) (1,307 ) (4,676 ) (4,576 )
Consolidated 21,774 7.6 % 19,723 7.8 % 55,547 7.0 % 52,014 7.2 %

The Company's adjusted EBITDA for the third quarter of 2013 as compared to the third quarter of 2012 increased by $2.1 million or 10.4% to $21.8 million primarily due to: (i) growth of the Company's sales (see Revenue); (ii) a $1.2 million gain on the sale of vacant land (see Selling, General and Adminisrative Expenses); (iii) the restructuring of the Company's convenience store focused businesses (see Restructuring Costs); and (iv) strong margins in its Hub City Fisheries business (see Gross Profit).

These increases were partially offset by: (i) lower margins in several of the Company's deli meats businesses resulting from a temporary spike in certain commodity prices (see Gross Profit); and (ii) approximately $0.3 million in production inefficiencies at SK Food Group's Reno, NV plant resulting from sub-standard input materials received from a third party supplier (see Gross Profit).

The Company's EBITDA for the quarter was also negatively impacted by lost sales resulting from temporary capacity issues associated with the transitioning of products from its Richmond deli meats plant to other production facilities (see Revenue).

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

(i) a significant increase in the earnings of Freybe after the realignment of its Langley plant is complete (see Restructuring Costs). Currently the Company expects this process to be finished in the first quarter of 2014, at which time Freybe is projected to be generating annualized adjusted EBITDA of approximately $6.3 million; and
(ii) a steady improvement in Stuyver's and Deli Chef's margins as these businesses leverage the incremental capacity of new production facilities built in 2012 to generate new sales.

In terms of NDSD, its business has stabilized with its adjusted EBITDA for the third quarter showing an increase as compared to the third quarter of 2012. The Company recognizes, however, that as a result of the continued contraction of food sales in the C-store channel further consolidation is needed of the distribution companies servicing this industry. Correspondingly, the Company has initiated a process to explore strategic alternatives for better servicing the convenience store channel with the goals of improving the efficiency and effectiveness of the distribution system used for our products in this channel and maximizing the value of its NDSD convenience store distribution business.

Due to uncertainties associated with the timing and impact of the items outlined above, the Company is not providing guidance on its projected adjusted EBITDA for 2013.

Depreciation and Amortization (D&A)

The Company's D&A expense for the third quarter of 2013 as compared to the third quarter of 2012 and for the first three quarters of 2013 as compared to the first three quarters of 2012 increased due to: (i) the acquisition of Freybe; and (ii) additional depreciation associated with several major capital projects completed in 2012 and 2013 including Stuyver's new artisan bakery, Deli Chef's new sandwich plant, and Centennial Foodservice's new seafood facility.

Interest

The Company's interest and other financing costs for the third quarter of 2013 as compared to the third quarter of 2012 was relatively stable despite an increase in the Company's funded debt primarily due to: (i) lower cost senior bank debt being used to retire maturing vendor take-back notes and capital leases; and (ii) the refinancing of SJ Irvine.

The Company's interest and other financing costs for the first three quarters of 2013 as compared to the first three quarters of 2012 increased by $0.4 million primarily due to the Company's higher funded debt levels partially offset by the benefits associated with: (i) using lower cost senior bank debt to retire vendor take-back notes and capital leases; and (ii) the refinancing of SJ Irvine.

Restructuring Costs

Restructuring costs consist of costs associated with the significant restructuring of one or more of the Company's businesses. During the first three quarters of 2013 the Company incurred $8.7 million in restructuring costs consisting of:

  • $6.4 million ($3.9 million of which was in the third quarter) for the transitioning of production from the Company's Richmond, BC deli meat processing plant (the Richmond plant transition) to some of its other deli meat processing plants including Freybe's Langley, BC facility. This transition began in the first quarter of 2013 and the transfer of production was completed by the end of the second quarter.

    During the third quarter, Freybe's Langley plant continued to incur restructuring costs due to: (i) setup problems associated with processing equipment transferred from the Richmond plant; (ii) employee training related issues; and (iii) production disruptions resulting from the refinement of production processes and from the installation of new equipment designed to improve production flows and expand capacity. Furthermore, the severity of these issues was compounded, and the time required to resolve them extended, due to production capacity shortages created by significant increases in customer order sizes relative to order sizes in the third quarter of 2012.

    Looking forward (see Forward Looking Statements), the Company expects to complete this initiative in the first quarter of 2014 and, correspondingly, will continue to incur restructuring costs until that time.
  • $1.9 million ($0.3 million of which was in the third quarter) in costs relating to the restructuring and rationalization of NDSD's direct-to-store distribution network for the C-store channel (see Revenue). NDSD completed its restructuring plan in the third quarter and, correspondingly, has stabilized its adjusted EBITDA (see Adjusted EBITDA).

    Looking forward (see Forward Looking Statements) the Company is undergoing a further strategic review of NDSD (see Adjusted EBITDA) which could result in more changes to NDSD's business model and possible additional restructuring costs.
  • $0.2 million (none of which was in the third quarter) in non-recurring costs relating to Centennial Foodservice's seafood initiatives, which include the startup of its new seafood processing facility in Richmond, BC and the integration of the businesses acquired from Harbour Marine. This initiative was completed in the first quarter of 2013.
  • $0.2 million (none of which was in the third quarter) in restructuring costs associated with a variety of initiatives including moving the Company's head office to a new location in Richmond, BC.

FREE CASH FLOW

(in thousands of dollars) 52 weeks 39 weeks 39 weeks Rolling
ended ended ended Four
Dec 29, 2012 Sep 29, 2012 Sep 28, 2013 Quarters
Cash flow from operating activities 49,849 39,512 13,787 24,124
Changes in non-cash working capital (6,050 ) (5,279 ) 16,975 16,204
Acquisition transaction costs 197 193 534 538
Restructuring costs 5,705 3,991 8,711 10,425
Capital maintenance expenditures (2,917 ) (2,033 ) (3,209 ) (4,093 )
Free cash flow 46,784 36,384 36,798 47,198

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 November 6, 2013, such statements involve unknown risks and uncertainties beyond the Company's control which may cause its actual performance and results in future periods to differ materially from any estimates or projections of future performance or results expressed or implied by such forward looking statements.

Factors that could cause actual results to differ materially from the Company's expectations include, among other things: (i) seasonal and/or weather related fluctuations in the Company's sales; (ii) changes in consumer discretionary spending resulting from changes in economic conditions and/or general consumer confidence levels; (iii) changes in the cost of raw materials used in the production of the Company's products; (iv) changes in the cost of products sourced from third party manufacturers and sold through the Company's proprietary distribution networks; (v) risks associated with the Company's conversion from a publicly traded income trust to a publicly traded corporation, including related changes in Canada's income tax laws; (vi) changes in the Company's relationships with its larger customers; (vii) potential liabilities and expenses resulting from defects in the Company's products; (viii) changes in consumer food product preferences; (ix) competition from other food manufacturers and distributors; (x) execution risk associated with the Company's growth and business restructuring initiatives; (xi) risks associated with the Company's business acquisition strategies; (xii) changes in the value of the Canadian dollar relative to the U.S. dollar; and (xiii) new government regulations affecting the Company's business and operations. Details on these risk factors as well as other factors can be found in the Company's 2012 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 November 6, 2013 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)
September 28,
2013
December 29,
2012
September 29,
2012
January 1,
2012
Current assets:
Cash and cash equivalents 2,903 3,758 3,797 4,486
Accounts receivable 91,729 80,180 83,305 78,343
Other assets 93 193 162 103
Inventories 114,749 79,456 87,438 78,831
Prepaid expenses 5,506 6,631 5,583 13,340
214,980 170,218 180,285 175,103
Capital assets 177,833 166,447 173,286 158,801
Intangible assets 75,816 71,994 73,001 77,087
Goodwill 167,130 154,451 154,391 150,417
Other assets 4,120 4,866 2,191 2,250
Investment in associate 8,195 5,181 5,279 5,001
Deferred income taxes 25,633 32,575 33,247 41,334
673,707 605,732 621,680 609,993
Current liabilities:
Cheques outstanding 3,977 1,928 1,921 2,500
Bank indebtedness 25,946 11,179 1,370 18,061
Dividend payable 6,859 6,188 6,187 5,958
Accounts payable and accrued liabilities 102,188 83,081 92,279 79,998
Current portion of long-term debt 163,095 127,195 20,812 17,530
Current portion of provisions 2,994 3,848 2,349 2,924
Current portion of puttable interest in subsidiaries 2,000 - - -
Other 100 - 300 -
307,159 233,419 125,218 126,971
Long-term debt 11,824 13,058 126,088 160,915
Convertible unsecured subordinated debentures 122,042 133,842 133,751 89,396
Puttable interest in subsidiaries 14,143 15,649 15,282 15,210
Deferred revenue 1,226 1,443 1,544 1,943
Provisions 4,120 503 9,489 8,360
Pension obligation 1,983 1,873 1,349 1,345
Other - - - 100
462,497 399,787 412,721 404,240
Equity attributable to shareholders:
Accumulated earnings 159,707 147,916 145,981 133,370
Accumulated dividends declared (174,510 ) (154,878 ) (148,690 ) (130,497 )
Retained earnings (deficit) (14,803 ) (6,962 ) (2,709 ) 2,873
Share capital 221,767 209,093 209,068 198,057
Equity component of convertible debentures 1,747 1,785 1,869 1,916
Reserves 1,822 448 (796 ) 1,442
Non-controlling interest 677 1,581 1,527 1,465
211,210 205,945 208,959 205,753
673,707 605,732 621,680 609,993
Premium Brands Holdings Corporation
Consolidated Statements of Operations
(Unaudited and in thousands of dollars except per share amounts)
13 weeks ended
September 28,
2013
13 weeks ended
September 29,
2012
39 weeks ended
September 28,
2013
39 weeks ended
September 29,
2012
Revenue 286,955 252,887 795,065 718,314
Cost of goods sold 228,685 198,940 633,096 565,753
Gross profit before depreciation and amortization 58,270 53,947 161,969 152,561
Selling, general and administrative expenses before depreciation and amortization 36,496 34,224 106,422 100,547
21,774 19,723 55,547 52,014
Depreciation of capital assets 4,586 3,773 13,014 10,535
Amortization of intangible assets 1,092 1,214 3,272 3,701
Amortization of other assets 1 1 4 4
Interest and other financing costs 4,514 4,613 13,353 12,906
Amortization of financing costs 84 94 238 306
Acquisition transaction costs 62 140 534 193
Change in value of puttable interest in subsidiaries 681 500 1,163 1,205
Accretion of provisions for contingent consideration 201 210 305 629
Unrealized loss on foreign currency contracts 500 200 200 300
Unrealized loss (gain) on interest rate swap contracts 100 (100 ) 100 (200 )
Restructuring costs 4,192 2,331 8,711 3,991
Reversal of provision for contingent consideration (762 ) - (762 ) -
Equity income in associates (381 ) (118 ) (376 ) (278 )
Earnings before income taxes 6,904 6,865 15,791 18,722
Provision for income taxes
Current 1,073 1,297 2,279 2,239
Deferred 651 969 1,843 3,710
1,724 2,266 4,122 5,949
Earnings 5,180 4,599 11,669 12,773
Earnings for the period attributable to:
Shareholders 5,246 4,492 11,791 12,611
Non-controlling interest (66 ) 107 (122 ) 162
5,180 4,599 11,669 12,773
Earnings per share
Basic 0.25 0.22 0.56 0.62
Diluted 0.25 0.21 0.56 0.61
Weighted average shares outstanding (in 000's)
Basic 21,234 20,822 21,057 20,458
Diluted 21,347 20,917 21,171 20,553
Premium Brands Holdings Corporation
Consolidated Statements of Cash Flows
(Unaudited and in thousands of dollars)
13 weeks ended
September 28,
2013
13 weeks ended
September 29,
2012
39 weeks ended
September 28,
2013
39 weeks ended
September 29,
2012
Cash flows from operating activities:
Earnings 5,180 4,599 11,669 12,773
Items not involving cash:
Depreciation of capital assets 4,586 3,773 13,014 10,535
Amortization of intangible and other assets 1,093 1,215 3,276 3,705
Amortization of financing costs 84 94 238 306
Change in value of puttable interest in subsidiaries 681 500 1,163 1,205
Loss (gain) on disposal of capital assets (1,174 ) 228 (1,215 ) 243
Accrued interest income (6 ) (7 ) (19 ) (22 )
Unrealized loss on foreign currency contracts 500 200 200 300
Unrealized loss (gain) on interest rate swaps 100 (100 ) 100 (200 )
Equity income in associate (381 ) (118 ) (376 ) (278 )
Deferred revenue (149 ) (142 ) (397 ) (387 )
Accretion of convertible debentures, long-term debt and provisions 795 896 2,198 2,343
Reversal of provision for contingent consideration (762 ) - (762 ) -
Change in value of cash conversion option liability - - (170 ) -
Deferred income taxes 651 969 1,843 3,710
11,198 12,107 30,762 34,233
Change in non-cash working capital (9,484 ) 8,385 (16,975 ) 5,279
1,714 20,492 13,787 39,512
Cash flows from financing activities:
Long-term debt - net 3,875 (844 ) 30,339 (31,854 )
Bank indebtedness and cheques outstanding 5,084 (9,584 ) 16,815 (17,270 )
Convertible debentures - net of issuance costs - - - 54,600
Dividends paid to shareholders (6,602 ) (6,005 ) (18,960 ) (17,964 )
Purchase of 7.00% Debentures under normal course issuer bid - (261 ) (219 ) (261 )
Other (15 ) - (69 ) (2 )
2,342 (16,694 ) 27,906 (12,751 )
Cash flows from investing activities:
Capital asset additions (5,458 ) (3,097 ) (12,222 ) (26,112 )
Business acquisitions (347 ) - (54,189 ) -
Repayment of share purchase loans and notes receivable 32 26 124 210
Promissory note from associate - - 500 -
Proceeds from sale and leaseback of asset - - 25,000 -
Proceeds from sales of assets 2,452 - 2,507 285
Investment in associates - - (2,638 ) -
Payments to shareholders of non-wholly owned subsidiaries (32 ) (74 ) (896 ) (1,227 )
Payment of provisions (242 ) (363 ) (742 ) (575 )
(3,595 ) (3,508 ) (42,556 ) (27,419 )
Increase (decrease) in cash and cash equivalents 461 290 (863 ) (658 )
Effects of exchange on cash and cash equivalents (80 ) 45 8 (31 )
Cash and cash equivalents - beginning of period 2,522 3,462 3,758 4,486
Cash and cash equivalents - end of period 2,903 3,797 2,903 3,797
Interest and other financing costs paid 6,104 1,438 13,839 8,490
Net income taxes paid 45 89 2,010 1,613

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