Lassonde Industries Inc. reports its Q2-2023 outcomes

Lassonde Industries Achieves Strong Q2 Performance

“We are delighted with the solid results achieved in the second quarter,” stated Nathalie Lassonde, CEO and Vice-Chair of Lassonde Industries Inc. “This quarter’s performance showcases improvements across all our divisions, including robust growth in our U.S. operations. Our efforts are concentrated on bolstering capacity, refining processes, and fortifying our organization.”

Vince Timpano, President and COO of Lassonde Industries Inc., added, “Our second quarter outcomes are gratifying and align well with our multi-year strategy. Effective execution of our plans translated to heightened net sales and increased profitability in all divisions. Price adjustments and improved product mix contributed to strong top-line performance, with Canadian beverage sales outpacing industry trends. While U.S. volume saw a reduction due to portfolio simplification, enhanced logistics and operational efficiency led to margin and profit expansion. Our focal point remains steadfast – solid execution to drive growth at enhanced margins.”

Key Highlights from the Second Quarter:

– Sales reached $579.4 million. Excluding a $15.1 million favorable foreign exchange impact, sales surged by $34.8 million (6.6%) compared to the same quarter last year. This growth was primarily attributed to selling price adjustments, partially offset by decreased sales volume of private label products in the U.S.
– Gross profit amounted to $152.3 million (26.3% of sales), marking a $13.6 million increase from the same quarter in 2022. Excluding a $0.4 million unfavorable foreign exchange impact, gross profit surged by $14.0 million year-over-year.
– Higher gross profit was evident in all Corporation divisions.
– Elevated costs were observed in certain inputs, particularly apple and orange concentrates.
– Operating profit hit $41.3 million, an upswing of $19.0 million from the same quarter last year. This increase was attributed to factors including higher gross profit, a $13.2 million reduction in transportation costs, and more. Counterbalancing these gains were increased expenses in certain areas.
– Adjusted EBITDA1, excluding comparable items, stood at $58.6 million, reflecting a $18.4 million improvement from the same period in the previous year.
– Profit attributable to the Corporation’s shareholders amounted to $25.1 million, leading to basic and diluted earnings per share (“EPS”) of $3.68 and $3.89, respectively. These figures marked a significant increase from the same quarter in 2022 when excluding comparable items.

Financial Strategy and Outlook:

Lassonde Industries Inc. is actively pursuing a multi-year strategy centered around accelerating revenue growth, improving profitability, and cultivating long-term value. This strategy rests on three core pillars:

1. Building a growth-oriented portfolio
2. Driving sustainable performance
3. Improving the capacity to act

As part of these efforts, the Corporation has experienced associated incremental operating expenses and capital expenditures to support its strategic vision. Notably, Project Eagle, initiated in 2022, aims to revitalize U.S. operations and enhance overall performance. Lassonde Industries remains focused on these endeavors and continues to invest in technology, process optimization, and upgrading its production network.

Looking ahead, the Corporation foresees sales growth driven by pricing adjustments, enhanced productivity, and a focus on key commodities and input costs. The effective tax rate, working capital management, and capital expenditure projections are also outlined.

Please refer to Section 2 – “Forward-Looking Statements” in the Corporation’s MD&A for the second quarter of 2023 for a comprehensive overview of the Corporation’s outlook.

Non-IFRS Financial Metrics

The financial metrics or ratios outlined below are not standardized financial metrics or ratios as per the financial reporting framework employed for preparing the Corporation’s financial statements. These non-IFRS metrics should not be evaluated independently or used as a replacement for financial metrics prepared following IFRS standards. Making comparisons to equivalent financial metrics or ratios presented by other entities might not be feasible.

EBITDA and Adjusted EBITDA Definitions

EBITDA serves as a financial metric employed by the Corporation and investors to gauge the Corporation’s ability to generate future cash flows from operational activities and meet financial obligations. Adjusted EBITDA, on the other hand, is a financial metric used by the Corporation to facilitate a period-to-period comparison of EBITDA by excluding elements that impact comparability. EBITDA encompasses the sum of operating profit and the “depreciation of property, plant and equipment and amortization of intangible assets” item, as indicated in the Consolidated Statement of Cash Flows. Adjusted EBITDA is derived by modifying EBITDA to account for items recognized by management as influential to comparability between periods.

Days Operating Working Capital

Days operating working capital is a financial yardstick employed by the Corporation to indicate the proportion of sales entangled within operational working capital. The calculation for this financial measure entails dividing operational working capital by the sales from the last quarter, as presented within this press release, and then multiplying the outcome by 91 days. Operational working capital is defined as the total of accounts receivable and inventories, subtracting accounts payable and accrued liabilities, as presented within the Corporation’s Consolidated Statement of Financial Position.

About Lassonde

Lassonde Industries Inc. stands as a prominent figure in North America’s food and beverage sector. The Corporation specializes in the development, production, and marketing of a diverse array of products under both private label and national brands. This extensive range includes ready-to-drink beverages, fruit-based snacks, and frozen juice concentrates. Additionally, Lassonde Industries is a notable producer of cranberry sauces and specialty food items such as pasta sauces, soups, fondue broths, and sauces. The Corporation also takes part in the importation and marketing of selected wines from various countries of origin and contributes to the production of apple cider and cider-based beverages.

With a network of 16 plants situated in Canada and the United States, Lassonde Industries delivers top-tier products through the expertise of its over 2,700 employees. For more information, please visit www.lassonde.com.

Market Segments

Lassonde Industries operates within two key market segments:

  1. Retail sales encompass sales to food retailers and wholesalers, including supermarket chains, independent grocers, superstores, warehouse clubs, major pharmacy chains, as well as online sales.
  2. Food service sales involve catering to restaurants, hotels, hospitals, schools, and wholesalers serving these establishments.

Forward-Looking Statement Caution

This document contains forward-looking information, and the Corporation’s oral and written public communications that don’t constitute historical fact might be considered forward-looking information under applicable securities law. These forward-looking statements, encompassing objectives, goals, and projections of the Corporation, are based on current expectations, judgments, assumptions, and perceptions of historical trends informed by information available at the time of issuing the relevant forward-looking statement and reflecting the Corporation’s combined experience and perspective on historical patterns.

Typically identified by expressions like “anticipate,” “continue,” “estimate,” “expect,” “may,” “will,” “project,” “should,” “could,” “would,” “believe,” “plan,” “intend,” “design,” “target,” “objective,” “strategy,” “likely,” “potential,” “outlook,” “aim,” “goal,” and comparable terms implying future occurrences or future performance, these forward-looking statements should be understood in the context of negative forms of these terms or their variations. In addition to such terms, any statement apart from historical fact contained in this document could qualify as a forward-looking statement.

The document includes forward-looking statements like those in the “Outlook” section above, which also outlines a subset of the assumptions employed to derive these forward-looking statements. Some forward-looking statements in this document, such as those regarding sales growth rate, productivity and service level, key commodity and input costs, expenses (including Strategy-related expenses), effective tax rate, working capital, and capital expenditures, may be regarded as financial outlooks in accordance with applicable securities regulations. These financial outlooks are provided to assess potential future earnings and predicted future cash flow uses, and they may not be suitable for other purposes.

These forward-looking statements are usually based on factors and assumptions used by the Corporation to craft the forward-looking statements. These factors and assumptions rely on information available to the Corporation, often obtained from third-party sources. Readers should be aware that the assumptions employed by the Corporation to support these forward-looking statements may prove partially or entirely incorrect.

Significant factors that might cause actual results to diverge considerably from the conclusions, forecasts, or projections in the forward-looking statements contained herein involve risks related to the following: the availability and pricing volatility of raw materials; fluctuations in inbound and outbound freight prices, oil price influence on the Corporation’s direct and indirect costs, and the ability to transfer cost increases to clients through price hikes or alternate methods in competitive market settings; sustaining robust sourcing and manufacturing platforms and efficient distribution channels; disruptions or failures in the Corporation’s information technology systems, and the development and performance of technology; cyber threats and other information technology-associated risks related to business disruptions, data integrity, confidentiality, and business email-related fraud; labor shortages and their impact on personnel-related aspects, including hiring, training, retaining, developing, and relying on employees, and their productivity, employment law compliance across multiple jurisdictions, and potential work stoppages due to non-renewal of collective bargaining agreements or other factors; successful implementation of health and safety programs in compliance with regulations; serious injuries or fatalities and their potential impact on business continuity and reputation, leading to compliance-related expenses; successful execution of the Corporation’s Strategy, including Project Eagle; climate change and disasters causing increased operating costs, capital expenditures, reduced production output, and affecting key commodities’ availability, quality, or price volatility; growing concentration of powerful customers in the food industry; effectiveness, cost, and impact of environmental sustainability initiatives, as well as costs tied to remediating environmental liabilities; alterations to laws affecting the Corporation’s operations, along with regulatory interpretations; adapting to changes and trends affecting the industry, encompassing customer preferences, concerns, buying habits, and market conditions and competition; maintaining product quality and safety to prevent product recalls and product liability claims; fluctuations in interest rates, currency exchange rates, liquidity, credit, stock price, and pension obligations; deterioration of general macroeconomic conditions, including global conflicts affecting suppliers, customers, and operating costs; restructuring, disposal, or related charges, along with impairment charges on goodwill or assets; adequacy of insurance coverage; implications and results of potential legal actions, litigation, and regulatory proceedings involving the Corporation.

The Corporation’s ability to attain its environmental objectives and goals is further influenced by factors such as access to required technology and its deployment, as well as technology development, performance, and use, along with environmental regulation. The Corporation’s ability to meet its ESG commitments also hinges on leveraging its supplier relationships.

Assumptions, expectations, and estimates are employed in preparing forward-looking statements, while risks and uncertainties that could result in actual outcomes differing substantially from forward-looking statements are addressed in the Corporation’s periodic filings with Canadian securities regulatory authorities, including Section 19 – “Uncertainties and Principal Risk Factors” of the Corporation’s MD&A for the year ended December 31, 2022. Readers are advised to review this section in depth.

All forward-looking statements contained herein are relevant only as of the date of the document. Unless required by law, the Corporation has no obligation to update or modify forward-looking statements, whether due to new information, subsequent events, or other factors. All forward-looking statements here are explicitly qualified by this cautionary statement.




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