Saputo Inc. (TSX:SAP) (Saputo or the Company) reported today its financial
results for fiscal 2014, which ended on March 31, 2014. All amounts in this news
release are in Canadian dollars, unless otherwise indicated, and are presented
according to International Financial Reporting Standards (IFRS).
SELECTED ANNUAL FINANCIAL INFORMATION
(in millions of CDN dollars, except per share amounts)
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Fiscal years 2014 2013 Variance
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Revenues 9,232.9 7,297.7 26.5%
Adjusted EBITDA(1) 1,020.3 860.8 18.5%
Net earnings 534.0 481.9 10.8%
Acquisition costs(2) 9.2 6.1
Restructuring costs(2) 19.9 22.6
Other costs(2) 3.9 -
Adjusted net earnings(3) 567.0 510.6 11.0%
Attributable to:
Shareholders of Saputo Inc. 566.1 510.6
Non-controlling interest 0.9 -
------------------------
567.0 510.6
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Per Share:
Adjusted net earnings(3)
Basic 2.90 2.58 12.4%
Diluted 2.87 2.55
Net earnings
Basic 2.73 2.44 11.9%
Diluted 2.70 2.41
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1. Adjusted EBITDA is a non-IFRS measure and is defined as earnings before
interest, income taxes, depreciation, amortization, acquisition,
restructuring and other costs. Refer to "Measurements not in accordance
with International Financial Reporting Standards" on page 6 of the
Management's Discussion and Analysis, included in the Company's 2014
Annual Report, for the definition of this term.
2. Net of income taxes.
3. Adjusted net earnings and adjusted earnings per share (basic and
diluted) are non-IFRS measures. Adjusted net earnings is defined as net
earnings prior to the inclusion of acquisition, restructuring, and other
costs, net of applicable income taxes, if any. Adjusted earnings per
share is defined as adjusted net earnings attributable to shareholders
of Saputo Inc. per basic and diluted common share. Refer to
"Measurements not in accordance with International Financial Reporting
Standards" on page 6 of the Management's Discussion and Analysis,
included in the Company's 2014 Annual Report, for the definition of
these terms.
-- As of April 1, 2013, the Company realigned its reporting structure
consistent with its operating structure and reports under three
geographic sectors: the Canada Sector, the USA Sector and the
International Sector. The comparative figures have been reclassified to
reflect this reporting structure.
-- During the third quarter, the Company announced a takeover bid to buy
all the shares of Warrnambool Cheese & Butter Factory Company Holdings
Limited (Warrnambool Acquisition), a dairy processor in Australia. At
the closing of the bid on February 12, 2014, the Company held an 87.92%
interest in Warrnambool shares and its operations are consolidated since
January 21, 2014.
-- The acquisition of Morningstar Foods, LLC (Morningstar Acquisition) on
January 3, 2013, renamed Saputo Dairy Foods USA, LLC (Dairy Foods
Division (USA)), contributed to revenues and EBITDA in the USA Sector
for the full fiscal year.
SELECTED SEGMENTED ANNUAL FINANCIAL INFORMATION
(in millions of CDN dollars, except per share amounts)
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Fiscal years 2014 2013 Variance
(Reclassified)
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Revenues
Canada 3,653.5 3,578.1 2.1%
USA 4,489.9 2,849.2 57.6%
International 1,089.4 870.4 25.2%
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9,232.9 7,297.7 26.5%
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Adjusted EBITDA(1)
Canada 457.4 476.2 (4.0%)
USA 469.8 344.3 36.5%
International 93.2 40.3 131.3%
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1,020.3 860.8 18.5%
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1. Adjusted EBITDA is a non-IFRS measure and is defined as earnings before
interest, income taxes, depreciation, amortization, acquisition,
restructuring and other costs. Refer to "Measurements not in accordance
with International Financial Reporting Standards" on page 6 of the
Management's Discussion and Analysis, included in the Company's 2014
Annual Report, for the definition of this term.
FINANCIAL RESULTS FOR THE FOURTH QUARTER OF THE FISCAL YEAR ENDED MARCH 31,
2014
Adjusted net earnings at $152.8 million, up 18.3%
Net earnings at $119.8 million, up 19.2%
Revenues at $2.486 billion, up 21.1%
SELECTED QUARTERLY FINANCIAL INFORMATION
(in millions of CDN dollars, except per share amounts)
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Fiscal years 2014
Q4 Q3 Q2 Q1
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Revenues 2,485.9 2,343.2 2,230.3 2,173.5
Adjusted EBITDA(1) 277.8 260.0 240.4 242.1
Net earnings 119.8 144.1 133.3 136.7
Acquisition costs(2) 9.2 - - -
Restructuring costs(2) 19.9 - - -
Other costs(2) 3.9 - - -
Adjusted net earnings(3) 152.8 144.1 133.3 136.7
Attributable to:
Shareholders of Saputo
Inc. 151.9 144.1 133.3 136.7
Non-controlling interest 0.9 - - -
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152.8 144.1 133.3 136.7
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Per Share
Adjusted net earnings(3)
Basic 0.78 0.74 0.68 0.70
Diluted 0.78 0.73 0.67 0.69
Net earnings
Basic 0.61 0.74 0.68 0.70
Diluted 0.61 0.73 0.67 0.69
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Fiscal years 2013
Q4 Q3 Q2 Q1
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Revenues 2,053.3 1,800.6 1,745.4 1,698.3
Adjusted EBITDA(1) 229.7 212.5 215.6 203.0
Net earnings 100.5 130.0 129.6 121.8
Acquisition costs(2) 6.1 - - -
Restructuring costs(2) 22.6 - - -
Other costs(2) - - - -
Adjusted net earnings(3) 129.2 130.0 129.6 121.8
Attributable to:
Shareholders of Saputo
Inc. 129.2 130.0 129.6 121.8
Non-controlling interest - - - -
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129.2 130.0 129.6 121.8
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Per Share
Adjusted net earnings(3)
Basic 0.65 0.66 0.66 0.61
Diluted 0.65 0.65 0.65 0.60
Net earnings
Basic 0.51 0.66 0.66 0.61
Diluted 0.51 0.65 0.65 0.60
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1. Adjusted EBITDA is a non-IFRS measure and is defined as earnings before
interest, income taxes, depreciation, amortization, acquisition,
restructuring and other costs. Refer to "Measurements not in accordance
with International Financial Reporting Standards" on page 6 of the
Management's Discussion and Analysis, included in the Company's 2014
Annual Report, for the definition of this term.
2. Net of income taxes.
3. Adjusted net earnings and adjusted earnings per share (basic and
diluted) are non-IFRS measures. Adjusted net earnings is defined as net
earnings prior to the inclusion of acquisition, restructuring, and other
costs, net of applicable income taxes, if any. Adjusted earnings per
share is defined as adjusted net earnings attributable to shareholders
of Saputo Inc. per basic and diluted common share. Refer to
"Measurements not in accordance with International Financial Reporting
Standards" on page 6 of the Management's Discussion and Analysis,
included in the Company's 2014 Annual Report, for the definition of
these terms.
SELECTED FACTORS POSITIVELY (NEGATIVELY) AFFECTING EBITDA
(in millions of CDN dollars)
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Fiscal year 2014
Q4 Q3 Q2 Q1
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Market factors(1, 2) 16 9 (17) 12
US currency exchange(1) 9 5 4 1
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1. As compared to the same quarter of the last fiscal year.
2. Market factors include the average block market per pound of cheese and
its effect on the absorption of fixed costs and on the realization of
inventories, the effect of the relationship between the average block
market per pound of cheese and the cost of milk as raw material as well
as market pricing impact related to sales of dairy ingredients.
INFORMATION BY SECTOR
Canada Sector
(in millions of CDN dollars)
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Fiscal years 2014
Q4 Q3 Q2 Q1
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Revenues 881.4 955.6 920.5 896.0
EBITDA 108.9 116.1 116.7 115.7
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Fiscal years 2013
Q4 Q3 Q2 Q1
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Revenues 856.0 937.9 892.2 891.9
EBITDA 119.1 123.2 116.2 118.0
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The Canada Sector includes the Dairy Division (Canada) and the Bakery Division.
USA Sector
(in millions of CDN dollars)
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Fiscal years 2014
Q4 Q3 Q2 Q1
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Revenues 1,220.0 1,138.0 1,078.6 1,053.3
EBITDA 128.2 121.1 107.9 112.6
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Fiscal years 2013
Q4 Q3 Q2 Q1
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Revenues 971.3 663.6 632.7 581.5
EBITDA 103.1 81.0 89.1 70.8
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Selected factors positively (negatively) affecting EBITDA
(in millions of CDN dollars)
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Fiscal years 2014
Q4 Q3 Q2 Q1
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Market factors(1, 2) 16 9 (17) 12
US currency exchange(1) 9 5 4 1
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Fiscal years 2013
Q4 Q3 Q2 Q1
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Market factors(1, 2) 5 8 10 (14)
US currency exchange(1) - (3) 2 3
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1. As compared to the previous fiscal year.
2. Market factors include the average block market per pound of cheese and
its effect on the absorption of fixed costs and on the realization of
inventories, the effect of the relationship between the average block
market per pound of cheese and the cost of milk as raw material as well
as market pricing impact related to sales of dairy ingredients.
Other pertinent information
(in US dollars, except for average exchange rate)
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Fiscal years 2014
Q4 Q3 Q2 Q1
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Average block market per
pound of cheese 2.178 1.836 1.735 1.779
Closing block price(1) per
pound of cheese 2.385 2.000 1.765 1.638
Average whey market price(2)
per pound 0.620 0.570 0.580 0.580
Spread(3) 0.012 0.044 0.041 0.046
US average exchange rate to
Canadian dollar(4) 1.104 1.042 1.039 1.023
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Fiscal years 2013
Q4 Q3 Q2 Q1
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Average block market per
pound of cheese 1.668 1.955 1.750 1.539
Closing block price(1) per
pound of cheese 1.693 1.760 2.075 1.650
Average whey market price(2)
per pound 0.580 0.620 0.550 0.500
Spread(3) 0.017 0.028 0.060 0.072
US average exchange rate to
Canadian dollar(4) 1.009 0.991 0.995 1.010
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1. Closing block price is the price of a 40 pound block of cheddar traded
on the Chicago Mercantile Exchange (CME) on the last business day of the
fiscal year.
2. Average whey powder market price is based on Dairy Market News published
information.
3. Spread is the average block market per pound of cheese less the result
of the average cost per hundredweight of Class III and/or Class 4b milk
price divided by 10.
4. Based on Bank of Canada published information.
The USA Sector includes the Cheese Division (USA) and the Dairy Foods Division
(USA).
International Sector
(in millions of CDN dollars)
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Fiscal years 2014
Q4 Q3 Q2 Q1
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Revenues 384.5 249.5 231.2 224.2
EBITDA 40.8 22.8 15.8 13.8
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Fiscal years 2013
Q4 Q3 Q2 Q1
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Revenues 226.0 199.1 220.5 225.0
EBITDA 7.5 8.3 10.3 14.2
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Selected factors positively (negatively) affecting EBITDA
(in millions of CDN dollars)
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Fiscal years 2014
Q4 Q3 Q2 Q1
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Inventory write-down - - - -
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Fiscal years 2013
Q4 Q3 Q2 Q1
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Inventory write-down - - - (3)
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The International Sector includes the Dairy Division (Argentina), the Dairy
Division (Australia) and the Dairy Ingredients Division. The Dairy Ingredients
Division includes national and export ingredients sales from the North American
divisions, as well as cheese exports from these same divisions. The Dairy
Division (Europe) ceased operations in the first quarter of fiscal 2014, as
announced in late fiscal 2013, and its results are included in the comparative
figures.
Consolidated revenues for the quarter ended March 31, 2014 amounted to $2.486
billion, an increase of $432.6 million or 21.1% compared to $2.053 billion for
the same quarter last fiscal year.
The USA Sector revenues increased by approximately $249 million as compared to
the corresponding quarter last fiscal year. A more favourable average block
market per pound of cheese in the fourth quarter of US$2.18 compared to US$1.67
during the same quarter of fiscal 2013 increased revenues by approximately $106
million. Contributing to the increase was an increase in sales volumes as well
as higher selling prices. The weakening of the Canadian dollar versus the US
dollar added approximately $91 million in revenues as compared to the same
quarter last fiscal year.
In the Canada Sector, revenues increased by approximately $25 million in the
fourth quarter as compared to last fiscal year. Higher selling prices relating
to the cost of milk as raw material, in addition to increases in sales volumes
in both the retail and foodservice segments in Canada were the primary reasons
for the increase as compared to last fiscal year. Sales volumes of traditional
milk and cheese categories were higher, while value-added milk and butter
categories experienced a decrease in sales volumes.
Revenues from the International Sector increased by approximately $159 million
as compared to the corresponding quarter last fiscal year. The Sector benefitted
from the contribution of the Dairy Division (Australia) since January 21, 2014.
Additionally, selling price increases relating to the cost of milk as raw
material in Argentina as well as price increases in dairy ingredients in the
international market added to revenues. Sales volume increases in Argentina and
a more favourable dairy ingredients product mix offset lower sales volumes in
the Dairy Ingredients Division. The Dairy Division (Europe) ceased operations in
the first quarter of fiscal 2014, and as a result negatively impacted revenues
by approximately $15 million when compared to last fiscal year.
Consolidated adjusted earnings before interest, income taxes, depreciation,
amortization, acquisition, restructuring, and other costs (adjusted EBITDA(1))
totalled $277.8 million for the quarter ended March 31, 2014, an increase of
$48.1 million or 20.9% compared to the $229.7 million for the same quarter last
fiscal year.
The EBITDA of the USA Sector increased by approximately $25 million in the
fourth quarter compared to the same quarter last fiscal year. An increase in the
average block market per pound of cheese to US$2.18 in the fourth quarter, as
compared to US$1.67 in the same quarter last fiscal year, positively affected
the absorption of fixed costs. During the quarter, the block price opened at
US$2.00 and closed at US$2.39, an increase of US$0.39, compared to opening at
US$1.76 and closing at US$1.69, a decrease of US$0.07 for the same period last
fiscal year. This positive difference had a favourable impact on the realization
of inventories. The relationship between the average block market per pound of
cheese and the cost of milk as raw material was unfavourable as compared to the
same quarter last fiscal year. These combined market factors, including
unfavourable margins associated with higher commodity prices in the Dairy Foods
Division, increased EBITDA by approximately $16 million, as compared to the same
period last fiscal year. Increased sales volumes and lower promotional costs
were offset by higher ingredients, fuel and conversion costs as compared to the
same period of the prior fiscal year, negatively affecting EBITDA. The weakening
of the Canadian dollar versus the US dollar added approximately $10 million in
EBITDA as compared to the same quarter last fiscal year.
EBITDA for the Canada Sector decreased by approximately $10 million in
comparison to the same quarter last fiscal year. Higher ingredients and
operational costs in the Dairy Division (Canada) offset increased sales volumes,
in both retail and foodservice segments.
The EBITDA of the International Sector increased by approximately $33 million
for the quarter ended March 31, 2014 in comparison to the same quarter last
fiscal year. Contributing to this increase is the inclusion of EBITDA from the
Dairy Division (Australia) since January 21, 2014. EBITDA of the Dairy Division
(Argentina) increased, as compared to the corresponding period last fiscal year,
mainly due to higher selling prices in the export market. This increase was
slightly offset by an increase in operational costs.
Depreciation and amortization for the quarter ended March 31, 2014 totalled
$39.5 million, an increase of $3.9 million compared to $35.6 million for the
same quarter last fiscal year. The increase is mainly due to the inclusion of
Dairy Division (Australia)'s results beginning on January 21, 2014.
In the fourth quarter of fiscal 2014, the Company incurred acquisition costs
relating to the Warrnambool Acquisition, which closed on February 12, 2014, and
the Scotsburn Acquisition, finalized on April 14, 2014, totalling $9.5 million
($9.2 million after tax), restructuring costs in relation to plant closures in
the United States and Canada totalling $30.7 million ($19.9 million after tax),
as well as other costs totalling $5.5 million ($3.9 million after tax) relating
to amendments to pension plans for executive officers. In connection with the
restructuring costs, the Company has incurred $7.8 million in severance costs,
$0.8 million in other closure costs and $22.1 million in impairment charges to
property, plant and equipment.
In the last quarter of fiscal 2013, the Company incurred acquisition costs
relating to the Morningstar Acquisition, totalling $9.6 million ($6.1 million
after tax), as well as restructuring costs in relation to plant closures in
Europe and Canada totalling $32.6 million ($22.6 million after tax). In
connection with the restructuring costs, the Company had incurred $7.8 million
in severance costs, $2.8 million in other closure costs, $21.7 million in
impairment charges to property, plant and equipment, and $0.3 million in other
charges.
Net interest expense increased to $19.3 million compared to $14.9 million for
the corresponding period last fiscal year. The increase is mainly attributed to
a higher level of debt resulting from the Warrnambool Acquisition, as well as a
general increase in interest rates in Argentina, as compared to the same quarter
last fiscal year.
With respect to income taxes, the effective tax rate for the current quarter was
30.2% compared to 27.9% for the same quarter last fiscal year, excluding
acquisition, restructuring and other costs in fiscal 2014 and restructuring and
acquisition costs in fiscal 2013. The income tax rate varies and could increase
or decrease based on the amount of taxable income derived and from which source,
any amendments to tax laws and income tax rates and changes in assumptions and
estimates used for tax assets and liabilities by the Company and its affiliates.
Net earnings amounted to $119.8 million for the quarter ended March 31, 2014, an
increase of $19.3 million compared to the net earnings of $100.5 million for the
same quarter last fiscal year. This is due to the factors mentioned above.
Adjusted net earnings(1) amounted to $152.8 million for the quarter ended March
31, 2014, an increase of $23.6 million compared to the same quarter last fiscal
year. This increase is due to the factors mentioned above, without considering
acquisition, restructuring and other costs.
During the quarter, the Company added approximately $80 million in property,
plant and equipment, issued shares for a cash consideration of $17.7 million as
part of the stock option plan and paid out $44.8 million in dividends to its
shareholders. For the same quarter, the Company generated net cash from
operating activities of $144.6 million, a decrease from the $160.1 million
generated for the corresponding period last fiscal year.
1. Adjusted EBITDA and adjusted net earnings represent non-IFRS measures.
Refer to "Measurement of Results not in Accordance with International
Financial Reporting Standards" on page 6 of the Management's Discussion
and Analysis, included in the Company's 2014 Annual Report, for the
definition of these terms.
OUTLOOK
In fiscal 2015, the Company intends to continue to improve its efficiencies,
while remaining committed to producing quality products, innovation and internal
growth. It will continue to analyze its activities, invest in capital projects
and identify opportunities. The Company's flexible capital structure and low
debt levels allow it to actively evaluate and pursue strategic acquisition
opportunities, with the goal of expanding its presence in key markets.
Fiscal 2015 will bring another year of continuous challenges in Canada due to
the competitive nature of the market. Despite these difficult conditions, the
Dairy Division (Canada) will continue to pursue volume growth in commodity and
specialty-type cheeses and in the fluid milk category. The Division will seek
opportunities in the value-added milk category, which offers growth potential,
and one in which the Company is well-positioned. The Dairy Division (Canada)
will pursue investments in product categories such as specialty cheeses, for
which the intention is to maximize exposure across Canada, with coast-to-coast
distribution capabilities.
The Dairy Division (Canada) will complete, in the first quarter of fiscal 2015,
the project to consolidate distribution activities of the Greater Montreal area
into one distribution center located in Saint-Laurent, Quebec. This initiative
was announced in fiscal 2013 and is a result of the Company's ongoing evaluation
of activities aimed at cost reduction and productivity enhancements.
The recent Scotsburn Acquisition will enable the Dairy Division (Canada) to
increase its presence in Atlantic Canada. The Division will evaluate
opportunities and possible synergies in an effort to improve and expand its
product offerings to all customers.
In fiscal 2015, the Company will close three facilities, as announced in fiscal
2013 and 2014. These measures are part of the Company's continual effort to
pursue additional efficiencies and decrease costs. Annual after tax savings
should be approximately $8 million, of which approximately $6 million should
commence in fiscal 2015.
Innovation has always been a priority, enabling the Company to offer products
that meet the needs of today's consumers. Accordingly, resources were allocated
to product innovation allowing it to forge and secure long-term relationships
with both customers and consumers.
In fiscal 2015, the Company will continue the integration of the Dairy Foods
Division (USA) and will focus on implementing the Company's processes and
systems. The USA Sector intends to capitalize on the Division's national
manufacturing and distribution footprint and benefit from possible synergies. An
analysis of administrative and information technology will be done in order to
effectively integrate central functions, streamline systems, and adopt an
efficient working environment.
Additionally, in fiscal 2015, the Company will attempt to recuperate lost
volumes in the Cheese Division (USA) and should also benefit from the effort of
the International Sector, towards growing the export sales market.
The Cheese Division (USA) plans to continue to gain distribution and market
share for its premium lines of snack cheeses and flavoured blue cheese
offerings.
The closure of two plants in the US in fiscal 2015, which was announced in March
2014, is in line with the Company's continual review of operations in order to
maximize return on capital and seek additional efficiencies. Annual after tax
savings should be approximately $3 million.
The USA Sector will continue to evaluate opportunities to improve efficiencies
in both manufacturing and distribution facilities across the US. The Sector will
also continue to monitor fluctuations in dairy markets and take appropriate
decisions to mitigate the impact on operations.
The International Sector will continue to pursue sales volume growth in existing
markets, as well as develop additional international markets from its operations
in Argentina for which capacity was increased over the last two years. Also, the
Company will pursue growth of cheese export sales volumes out of the Cheese
Division (USA). The inclusion of the Dairy Division (Australia) has given the
International Sector an additional platform and will be key for the long-term
growth of this Sector as a dairy player on a global scale. The Company intends
to accelerate growth in Australia, by making necessary capital investments and
devoting resources to increase manufacturing capacity, grow milk intake and
create new opportunities. The International Sector will continue to evaluate
overall activities in an effort to improve efficiencies.
Additional Information
For more information on the results of fiscal 2014 and the fourth quarter of
fiscal 2014, reference is made to the audited consolidated financial statements,
the notes thereto and to the Management's Discussion and Analysis for the fiscal
year ended March 31, 2014. These documents can be obtained on SEDAR at
www.sedar.com and in the "Investors and Media" section of the Company's website,
at www.saputo.com.
Caution Regarding Forward-Looking Statements
This news release contains forward-looking statements within the meaning of
securities laws. These statements are based, among other things, on Saputo's
assumptions, expectations, estimates, objectives, plans and intentions as of the
date hereof regarding projected revenues and expenses, the economic, industry,
competitive and regulatory environments in which the Company operates or which
could affect its activities, its ability to attract and retain customers and
consumers, as well as the availability and cost of milk and other raw materials
and energy supplies, its operating costs and the pricing of its finished
products on the various markets in which it carries on business.
These forward-looking statements include, among others, statements with respect
to the Company's short and medium term objectives, outlook, business projects
and strategies to achieve those objectives, as well as statements with respect
to the Company's beliefs, plans, objectives and expectations. The words "may",
"should", "will", "would", "believe", "plan", "expect", "intend", "anticipate",
"estimate", "foresee", "objective", "continue", "propose" or "target", or the
negative of these terms or variations of them, the use of conditional tense or
words and expressions of similar nature, are intended to identify
forward-looking statements.
By their nature, forward-looking statements are subject to a number of inherent
risks and uncertainties. Actual results could differ materially from the
conclusion, forecast or projection stated in such forward-looking statements. As
a result, the Company cannot guarantee that any forward-looking statements will
materialize. Assumptions, expectations and estimates made in the preparation of
forward-looking statements and risks that could cause actual results to differ
materially from current expectations are discussed in the Company's materials
filed with the Canadian securities regulatory authorities from time to time,
including the "Risks and Uncertainties" section of the Management's Discussion
and Analysis included in the Company's 2014 Annual Report.
Forward-looking statements are based on Management's current estimates,
expectations and assumptions, which Management believes are reasonable as of the
date hereof, and, accordingly, are subject to changes after such date. You
should not place undue importance on forward-looking statements and should not
rely upon this information as of any other date.
Except as required under applicable securities legislation, Saputo does not
undertake to update or revise these forward-looking statements, whether written
or verbal, that may be made from time to time by itself or on its behalf,
whether as a result of new information, future events or otherwise.
Dividends
The Board of Directors approved a dividend of $0.23 per share, payable on July
17, 2014, to common shareholders of record on July 7, 2014.
Conference Call
A conference call to discuss the fourth quarter and year-end results for fiscal
2014 will be held on Thursday, June 5, 2014 at 2:30 p.m. Eastern Daylight Time.
To participate in the conference call, dial 1-800-732-8470. To ensure your
participation, please dial in approximately five minutes before the call.
To listen to this call on the Web, please enter www.gowebcasting.com/5544 in
your Web browser.
For those unable to participate, a replay of the conference will be available
until 11:59 p.m., Thursday, June 12, 2014. To access the replay, dial
1-800-558-5253, ID number 21716568. A webcast will also be archived on
www.saputo.com, in the "Investors and Media" section, under News Releases.
About Saputo
Saputo produces, markets, and distributes a wide array of dairy products of the
utmost quality, including cheese, fluid milk, extended shelf-life milk and cream
products, cultured products and dairy ingredients. We are one of the top ten
dairy processors in the world, the largest in Canada, the third in Argentina and
the fourth in Australia. In the US, the Company ranks among the top three cheese
producers and is one of the largest producers of extended shelf-life and
cultured dairy products. Our products are sold in more than 40 countries under
well-known brand names such as Saputo, Alexis de Portneuf, Armstrong, Baxter,
Dairyland, Dragone, DuVillage 1860, Friendship, Frigo Cheese Heads, Great
Midwest, King's Choice, Kingsey, La Paulina, Milk2Go, Neilson, Nutrilait,
Ricrem, Salemville, Scotsburn, Stella, Sungold and Treasure Cave. Saputo Inc. is
a publicly traded company whose shares are listed on the Toronto Stock Exchange
under the symbol "SAP".
CONSOLIDATED STATEMENTS OF EARNINGS
(in thousands of CDN dollars, except per share amounts)
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For the three-month For the years ended
periods ended March 31 March 31
(unaudited) (audited)
2014 2013 2014 2013
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Revenues $ 2,485,864 $ 2,053,326 $ 9,232,889 $ 7,297,677
Operating costs excluding
depreciation, amortization,
acquisition, restructuring
and other costs 2,208,041 1,823,646 8,212,544 6,436,905
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Earnings before interest,
depreciation, amortization,
acquisition, restructuring,
other costs and income
taxes 277,823 229,680 1,020,345 860,772
Depreciation and
amortization 39,451 35,568 146,607 116,629
Acquisition costs 9,459 9,646 9,459 9,646
Restructuring costs 30,739 32,631 30,739 32,631
Other costs 5,465 - 5,465 -
Interest on long-term debt 14,355 12,515 53,239 29,896
Other financial charges 4,942 2,345 15,846 4,203
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Earnings before income taxes 173,412 136,975 758,990 667,767
Income taxes 53,626 36,506 225,024 185,846
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Net earnings $ 119,786 $ 100,469 $ 533,966 $ 481,921
----------------------------------------------------------------------------
Attributable to:
Shareholders of Saputo
Inc. 118,917 100,469 533,097 481,921
Non-controlling interest 869 - 869 -
----------------------------------------------------------------------------
$ 119,786 $ 100,469 $ 533,966 $ 481,921
----------------------------------------------------------------------------
Earnings per share
Net earnings
Basic $ 0.61 $ 0.51 $ 2.73 $ 2.44
Diluted $ 0.61 $ 0.51 $ 2.70 $ 2.41
----------------------------------------------------------------------------
Note: These financial statements should be read in conjunction with the
Company's audited consolidated financial statements, the notes thereto and with
the Management's Discussion and Analysis for the fiscal year ended March 31,
2014, included in the Company's 2014 Annual Report. These documents can be
obtained on SEDAR at www.sedar.com and in the "Investors and Media" section of
the Company's website, at www.saputo.com.
CONSOLIDATED BALANCE SHEETS
(in thousands of CDN dollars)
(audited)
----------------------------------------------------------------------------
As at March 31, 2014 March 31, 2013
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ASSETS
Current assets
Cash and cash equivalents $ 39,346 $ 43,177
Receivables 807,409 624,553
Inventories 933,232 770,158
Income taxes 30,867 2,786
Prepaid expenses and other assets 84,992 71,882
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1,895,846 1,512,556
Property, plant and equipment 1,928,761 1,617,195
Goodwill 1,954,691 1,569,592
Trademarks and other intangibles 484,830 454,876
Other assets 79,968 29,962
Deferred income taxes 12,796 9,459
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Total assets $ 6,356,892 $ 5,193,640
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LIABILITIES
Current liabilities
Bank loans $ 310,066 $ 181,865
Accounts payable and accrued liabilities 897,222 748,318
Income taxes 124,206 144,064
Current portion of long-term debt 393,600 152,400
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1,725,094 1,226,647
Long-term debt 1,395,694 1,395,900
Other liabilities 48,396 74,101
Deferred income taxes 348,548 191,320
----------------------------------------------------------------------------
Total Liabilities $ 3,517,732 $ 2,887,968
----------------------------------------------------------------------------
EQUITY
Share capital 703,111 663,275
Reserves 242,282 38,049
Retained earnings 1,830,911 1,604,348
----------------------------------------------------------------------------
Equity attributable to shareholders of
Saputo Inc. 2,776,304 2,305,672
Non-controlling interest 62,856 -
----------------------------------------------------------------------------
Total equity $ 2,839,160 $ 2,305,672
----------------------------------------------------------------------------
Total liabilities and equity $ 6,356,892 $ 5,193,640
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CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands of CDN dollars)
----------------------------------------------------------------------------
For the three-month For the twelve-month
periods periods
ended March 31 ended March 31
(unaudited) (audited)
2014 2013 2014 2013
----------------------------------------------------------------------------
Cash flows related to the
following activities:
Operating
Net earnings $ 119,786 $ 100,469 $ 533,966 $ 481,921
Adjustments for:
Stock-based
compensation 6,137 3,611 22,084 17,537
Interest and other
financial charges 19,297 14,860 69,085 34,099
Income tax expense 53,626 36,506 225,024 185,846
Depreciation and
amortization 39,451 35,568 146,607 116,629
Gain on disposal of
property, plant and
equipment 122 (12) (122) (53)
Restructuring charges
related to plant
closures 22,096 23,820 22,096 23,820
Share of joint venture
earnings (1,406) - (1,406) -
Funding of employee
plans in excess of
costs 2,687 (4,030) (6,486) (12,485)
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261,796 210,792 1,010,848 847,314
Changes in non-cash
operating working
capital items (76,459) (3,744) (129,363) (4,425)
----------------------------------------------------------------------------
Cash generated from
operating activities 185,337 207,048 881,485 842,889
Interest and other
financial charges paid (10,880) (9,859) (65,837) (34,953)
Income taxes paid (29,830) (37,138) (159,338) (162,144)
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Net cash generated from
operating activities 144,627 160,051 656,310 645,792
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Investing
Business acquisition (449,578) (1,433,945) (449,578) (1,433,945)
Portfolio investment 4,088 - - -
Additions to property,
plant and equipment (79,989) (81,582) (223,624) (178,237)
Proceeds on disposal of
property, plant and
equipment (208) 76 253 901
Other (124) (11,038) 803 (13,719)
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(525,811) (1,526,489) (672,146) (1,625,000)
----------------------------------------------------------------------------
Financing
Bank loans 26,668 51,754 77,810 21,884
Proceeds from issuance
of long-term debt 390,000 1,198,565 390,000 1,198,565
Repayment of long-term
debt (57,081) (38,100) (175,045) (38,100)
Issuance of share
capital 17,749 12,504 41,861 38,468
Repurchase of share
capital - (58,173) (154,371) (190,404)
Dividends (44,812) (41,326) (175,321) (161,651)
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332,524 1,125,224 4,934 868,762
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Decrease in cash and cash
equivalents (48,660) (241,214) (10,902) (110,446)
Effect of exchange rate
changes on cash and cash
equivalents 3,138 10,327 7,071 9,486
Cash and cash equivalents,
beginning of year 84,868 274,064 43,177 144,137
----------------------------------------------------------------------------
Cash and cash equivalents,
end of year $ 39,346 $ 43,177 $ 39,346 $ 43,177
----------------------------------------------------------------------------
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FOR FURTHER INFORMATION PLEASE CONTACT:
Media and Investor Relations
Sandy Vassiadis
Director, Corporate Communications
514-328-3347
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