TSX: CBY
TORONTO, May 1, 2014 /CNW/ - Canada Bread Company, Limited (TSX: CBY)
today reported its financial results for the first quarter ended March
31, 2014. First quarter highlights include:
-
Adjusted Operating Earnings(1)(3) increased 18.6% to $20.3 million in the first quarter compared to $17.1
million last year.
-
Net earnings from continuing operations(3) for the quarter increased to $9.8 million compared to $2.3 million last
year.
-
Adjusted Earnings per Share(2)(3) for the quarter was $0.60 compared to $0.45 in the first quarter of
2013.
"All segments of our business continued to benefit from strategic
capital investments that have improved operating efficiencies and
lowered costs," said Richard Lan, President and CEO. "We continue to
clear regulatory requirements to complete the sale of Canada Bread to
Grupo Bimbo and our people are excited about opportunities to grow this
business by joining the global bakery leader."
Financial Overview
Canada Bread Company, Limited ("the Company") sales from continuing
operations(3) for the first quarter decreased 1.2% to $342.8 million compared to
$346.9 million last year, or 2.4% after adjusting for discontinued
categories in the U.K. and the impact of currency translation on sales
in the U.S. and U.K. The decrease was due to lower sales volumes and a
lower value sales mix, partly offset by higher pricing across the
Company.
Adjusted Operating Earnings increased 18.6% in the first quarter to
$20.3 million compared to $17.1 million last year, as operational
improvements were partly offset by lower volumes.
Net earnings from continuing operations in the quarter totaled $9.8
million ($0.39 basic earnings per share) compared to $2.3 million
($0.09 basic earnings per share) last year, which included $1.9 million
of pre-tax restructuring and other related costs (2013: $10.4 million).
Adjusted Earnings per Share was $0.60 for the first quarter compared to
$0.45 last year.
Several items are excluded from the discussions of underlying earnings
performance as they are not representative of on-going operational
activities. Refer to the section entitled Non-IFRS Financial Measures
at the end of this News Release for a description and reconciliation of
all non-IFRS financial measures.
Business Segment Review
The following table summarizes sales by business segment:
|
|
|
|
|
|
|
(Unaudited)
|
First Quarter
|
($ thousands)
|
|
2014
|
|
|
2013
|
Fresh Bakery (3)
|
|
$
|
216,173
|
|
$
|
220,802
|
Frozen Bakery
|
|
|
126,664
|
|
|
126,065
|
Sales
|
|
$
|
342,837
|
|
$
|
346,867
|
|
|
|
|
|
|
|
The following table summarized Adjusted Operating Earnings by business
segment:
|
(Unaudited)
|
First Quarter
|
($ thousands)
|
|
2014
|
|
2013
|
Fresh Bakery (3)
|
|
$
|
15,276
|
|
$
|
13,277
|
Frozen Bakery
|
|
|
5,025
|
|
|
3,841
|
Adjusted Operating Earnings(1)
|
|
$
|
20,301
|
|
$
|
17,118
|
Fresh Bakery
Includes fresh bakery products, including breads, rolls, and bagels sold
to retail, foodservice, and convenience channels. It includes national
brands such as Dempster's® and many leading regional brands.
Fresh Bakery sales for the first quarter decreased 2.1% to $216.2
million compared to $220.8 million last year, as lower volumes and a
lower value sales mix were partly offset by the benefit of a price
increase taken in the early part of 2013.
Adjusted Operating Earnings in the Fresh Bakery segment increased 15.1%
to $15.3 million from $13.3 million last year, largely driven by
operational efficiencies. This was the result of lower overhead costs
as the third sub-scale Toronto, Ontario bakery was closed during the
second quarter of 2013, with production consolidated into the Hamilton,
Ontario bakery, as well as simplification of the product portfolio.
These benefits were partly offset by higher selling, general and
administrative costs and lower volumes. The benefit of a price increase
last year was offset by higher input costs, despite lower input costs
for wheat, due to the impact of a weaker Canadian dollar on other raw
material costs, and higher inflationary costs.
Frozen Bakery
Includes frozen bakery products, including frozen par-baked bakery
products, specialty and artisan breads, and bagels sold to retail,
foodservice, and convenience channels in North America and the U.K. It
includes national brands such as Tenderflake® and New York Bakery CoTM.
Frozen Bakery sales for the first quarter increased 0.5% to $126.7
million, and decreased 3.0% after adjusting for discontinued categories
in the U.K. and the impact of currency translation on sales in the U.S.
and U.K. The decrease was due to lower sales volumes and a lower value
sales mix, partly offset by higher pricing across the segment.
First quarter Adjusted Operating Earnings increased to $5.0 million from
$3.8 million last year. Earnings in the U.K. bakery business benefited
from higher pricing and lower raw material costs, as well as lower
selling, general, and administration expenses. In the North American
frozen bakery business, earnings declined primarily due to higher
selling, general and administrative costs, resulting from a provision
recorded against a trade receivable. Lower volumes and higher
inflationary costs were offset by improved operating efficiencies and
lower input costs for wheat.
Pending Transaction
On February 12, 2014, the Company announced that Grupo Bimbo, S.A.B. de
C.V. of Mexico ("Grupo Bimbo") had agreed to acquire all of the issued
and outstanding common shares of Canada Bread, by way of a statutory
arrangement under the Business Corporations Act (Ontario) (the
"Arrangement"). Under the terms of the Arrangement, Grupo Bimbo has
agreed to acquire each common share of Canada Bread for $72.00 per
share in cash.
On March 17, 2014, the proposed transaction received approval from the
Canadian Competition Bureau to proceed. On March 24, 2014, the proposed
transaction received clearance from the U.S. Department of Justice
under the Hart-Scott-Rodino Act to proceed.
Subsequent to the quarter end, the Arrangement was also approved by the
shareholders of Canada Bread at a special meeting held in April 2014.
Subject to Investment Canada approval, the proposed transaction is
expected to close in the second quarter of 2014.
Other Matters
As previously disclosed, rather than payment of a full quarterly
dividend, the Arrangement contemplates the payment of a stub period
dividend in the quarter in which the transaction closes. As the
Arrangement is expected to close during the second quarter, no
quarterly dividend has been declared for this quarter, but rather
pursuant to the Arrangement, one will be deemed to have been declared
in the amount of $0.75 per share, pro-rated for the actual number of
days elapsed in the second quarter up to and including the closing date
of the transaction. This dividend will be payable at the effective time
of the Arrangement to holders of record of Canada Bread common shares
immediately prior to the effective time of the Arrangement. Unless
indicated otherwise by the Company in writing on or before the time the
dividend is paid, this dividend will be considered an Eligible Dividend
for the purposes of the "Enhanced Dividend Tax Credit System". If the
transaction does not close in the second quarter, the Company expects
it would declare and pay a dividend in respect of the second quarter
early in the third quarter of 2014.
Reconciliation of Non-IFRS Financial Measures
The Company uses the following non-IFRS measures: Adjusted Operating
Earnings and Adjusted Earnings per Share. Management believes that
these non-IFRS measures provide useful information to both Management
and investors in measuring the financial performance of the Company for
the reasons outlined below. These measures do not have a standardized
meaning prescribed by IFRS. Therefore, they may not be comparable to
similarly titled measures presented by other publicly traded companies,
and should not be construed as an alternative to other financial
measures determined in accordance with IFRS.
Adjusted Operating Earnings
Adjusted Operating Earnings, a non-IFRS measure, is used by Management
to evaluate financial operating results. It is defined as earnings
before income taxes adjusted for items that are not considered
representative of on-going operational activities of the business, and
items where the economic impact of the transactions will be reflected
in the earnings in future periods when the underlying asset is sold or
transferred. The table below provides a reconciliation of net earnings
from continuing operations as reported under IFRS to Adjusted Operating
Earnings for the three months ended, as indicated below. Management
believes that this basis is the most appropriate on which to evaluate
operating results, as they are representative of the on-going
operations of the Company.
|
|
|
|
|
|
|
|
|
|
($ thousands)
|
Three months ended March 31, 2014
|
(Unaudited)
|
Fresh
Bakery (3)
|
|
Frozen
Bakery
|
|
Unallocated
Costs
|
|
Consolidated
|
Net earnings from continuing operations
|
|
|
|
|
|
|
|
|
|
$
|
9,844
|
Income taxes
|
|
|
|
|
|
|
|
|
|
|
3,960
|
Earnings before income taxes from continuing operations
|
|
|
|
|
|
|
|
|
|
$
|
13,804
|
Interest expense
|
|
|
|
|
|
|
|
|
|
|
214
|
Earnings before interest and income taxes from continuing operations
|
$
|
14,641
|
|
$
|
4,767
|
|
$
|
(5,390)
|
|
$
|
14,018
|
Other (income) expense
|
|
(1,248)
|
|
|
264
|
|
|
5,390
|
|
|
4,406
|
Restructuring and other related costs
|
|
1,883
|
|
|
(6)
|
|
|
-
|
|
|
1,877
|
Adjusted Operating Earnings
|
$
|
15,276
|
|
$
|
5,025
|
|
$
|
-
|
|
$
|
20,301
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
($ thousands)
|
Three months ended March 31, 2013
|
(Unaudited)
|
Fresh
Bakery (3)
|
|
Frozen
Bakery
|
|
Unallocated
Costs
|
|
Consolidated
|
Net earnings from continuing operations
|
|
|
|
|
|
|
|
|
|
$
|
2,294
|
Income taxes
|
|
|
|
|
|
|
|
|
|
|
1,503
|
Earnings before income taxes from continuing operations
|
|
|
|
|
|
|
|
|
|
$
|
3,797
|
Interest expense
|
|
|
|
|
|
|
|
|
|
|
397
|
Earnings before interest and income taxes from continuing operations
|
$
|
4,164
|
|
$
|
30
|
|
$
|
-
|
|
$
|
4,194
|
Other (income) expense
|
|
(1,298)
|
|
|
3,811
|
|
|
-
|
|
|
2,513
|
Restructuring and other related costs
|
|
10,411
|
|
|
-
|
|
|
-
|
|
|
10,411
|
Adjusted Operating Earnings
|
$
|
13,277
|
|
$
|
3,841
|
|
$
|
-
|
|
$
|
17,118
|
Adjusted Earnings per Share
Adjusted Earnings per Share, a non-IFRS measure, is used by Management
to evaluate on-going financial operating results. It is defined as
basic earnings per share, adjusted for items that are not considered
representative of on-going operational activities of the business, and
items where the economic impact of the transactions will be reflected
in earnings in future periods when the underlying asset is sold or
transferred. The table below provides a reconciliation of basic
earnings per share from continuing operations as reported under IFRS to
Adjusted Earnings per Share for the three months ended, as indicated
below. Management believes this basis is the most appropriate on which
to evaluate financial results as they are representative of the
on-going operations of the Company.
|
|
|
|
|
|
|
(Unaudited)
|
|
Three months ended
March 31,
|
($ per share)
|
|
2014(i)
|
|
2013(3)
|
|
|
|
|
|
|
|
Basic earnings per share from continuing operations
|
|
$
|
0.39
|
|
$
|
0.09
|
Items not considered representative of on-going operations(i)
|
|
|
0.16
|
|
|
0.06
|
Restructuring and other related costs(ii)
|
|
|
0.05
|
|
|
0.30
|
Adjusted Earnings per Share (iii)
|
|
$
|
0.60
|
|
$
|
0.45
|
(i)
|
Includes gains/losses associated with non-operational activities,
including gains/losses related to
restructuring activities, business combinations, discontinued
operations, and assets held for sale, all
net of tax.
|
(ii)
|
Includes per share impact of restructuring and other related costs, net
of tax.
|
(iii)
|
May not add due to rounding
|
Forward-Looking Statements
This document contains, and the Company's oral and written public
communications often contain, "forward-looking information" within the
meaning of applicable securities laws. These statements are based on
current expectations, estimates, forecasts, and projections about the
industries in which the Company operates and beliefs and assumptions
made by Management. Such statements include, but are not limited to,
statements with respect to objectives and goals, as well as statements
with respect to beliefs, plans, objectives, expectations,
anticipations, estimates, and intentions. Specific forward-looking
information in this document includes, but is not limited to,
statements concerning the expected timing of the completion of the sale
of the shares of the Company to Grupo Bimbo (there can be no assurances
that any transaction will be completed), expectations regarding the use
of derivatives, futures and options, expectations regarding the timing
and amount of capital investments, expectations regarding the timing
and cost of old facility closures and new facility openings, the
expected use of cash balances, source of funds for ongoing business
requirements, capital investments and debt repayment, expectations
regarding the impact of new accounting standards, expectations
regarding sufficiency of the allowance for uncollectible accounts and
expectations regarding pension plan performance and future pension
liabilities and contributions. Words such as "expect", "anticipate",
"intend", "attempt", "may", "will", "plan", "believe", "seek",
"estimate" and variations of such words and similar expressions are
intended to identify such forward-looking information. These statements
are not guarantees of future performance and involve assumptions and
risks and uncertainties that are difficult to predict.
In particular, these statements are based on a variety of factors and
assumptions that are discussed throughout this document. In addition,
expectations concerning the performance of the Company's business in
general are based on a number of factors and assumptions including, but
not limited to: the condition of the Canadian, U.S., and U.K.
economies; the rate of exchange of the Canadian dollar to the U.S.
dollar and British pound; the availability and prices of raw materials,
energy and supplies; product pricing; the availability of insurance;
the competitive environment and related market conditions; improvement
of operating efficiencies; continued access to capital; the cost of
compliance with environmental and health standards; no adverse results
from ongoing litigation; no unexpected actions of domestic and foreign
governments and the general assumption that none of the risks
identified below or elsewhere will materialize. All of these
assumptions have been derived from information currently available to
the Company including information obtained by the Company from
third-party sources. These assumptions may prove to be incorrect in
whole or in part. In addition, actual results may differ materially
from those expressed, implied, or forecasted in such forward-looking
information, which reflect the Company's expectations only as of the
date hereof.
Factors that could cause actual results or outcomes to differ materially
from the results expressed, implied, or forecasted in such
forward-looking information include, among other things:
-
the risks associated with the pending acquisition by Grupo Bimbo
-
the risks associated with changes in the Company's shared systems and
processes;
-
the risks associated with the management service agreement with Maple
Leaf;
-
the Company's exposure to currency exchange risks;
-
the ability of the Company to hedge against the effect of commodity
price changes through the use of commodity futures and options;
-
the impact of international events on commodity prices and the free flow
of goods;
-
the risks associated with a consolidating retail environment;
-
the risks related to capital expansion projects;
-
the risks posed by food contamination, consumer liability, and product
recalls;
-
the risks related to acquisitions and divestitures;
-
the risks posed by compliance with extensive government regulation;
-
the risks posed by litigation;
-
the impact of changes in consumer tastes and buying patterns;
-
the impact of extensive environmental regulation and potential
environmental liabilities;
-
the risks associated with complying with differing employment laws and
practices globally, the potential for work stoppages due to non-renewal
of collective agreements, and recruiting and retaining qualified
personnel;
-
the impact on pension expense and funding requirements of fluctuations
in the market prices of fixed income and equity securities and changes
in interest rates;
-
the risks associated with the Company's independent distributors;
-
the risks posed by competition;
-
the risks associated with pricing the Company's products;
-
the risks associated with managing the Company's supply chain; and
-
the risks associated with failing to identify and manage the strategic
risks facing the Company.
The Company cautions the reader that the foregoing list of factors is
not exhaustive. These factors are discussed in more detail under the
heading "Risk Factors" in the Company's Management's Discussion and
Analysis for the year ended December 31, 2013, that is available on
SEDAR at www.sedar.com. The reader should review such section in
detail. The Company does not intend to, and the Company disclaims any
obligation to, update any forward-looking information, whether written
or oral, or whether as a result of new information, future events or
otherwise except as required by law.
Additional information concerning the Company, including the Company's
Annual Information Form, will be available on SEDAR at www.sedar.com.
Canada Bread Company Limited, which is 90.0% owned by Maple Leaf Foods
Inc. (TSX:MFI), is a leading manufacturer and distributor of fresh
bakery products and frozen par-baked products. The Company had sales of
$1.5 billion in 2013 and employs approximately 5,400 people at its
operations across North America and in the U.K.
Footnote Legend
|
|
(1)
|
Adjusted Operating Earnings, a non-IFRS measure, is used by Management
to evaluate financial operating results. It is defined as earnings
before income taxes adjusted for items that are not considered
representative of on-going operational activities of the business, and
items where the economic impact of the transactions will be reflected
in earnings in future periods when the underlying asset is sold or
transferred. Please refer to the section entitled Reconciliation of
Non-IFRS Financial Measures in this news release.
|
|
|
(2)
|
Adjusted Earnings per Share, a non-IFRS measure, is used by Management
to evaluate on-going financial operating results. It is defined as
basic earnings per share, adjusted for all items that are not
considered representative of on-going operational activities of the
business, and items where the economic impact of the transactions will
be reflected in earnings in future periods when the underlying asset is
sold or transferred. Please refer to the section entitled
Reconciliation of Non-IFRS Financial Measures in this News Release.
|
|
|
(3)
|
Figures exclude the results of the Olivieri business in the Fresh Bakery
segment. Olivieri results are reported as discontinued operations as
disclosed in Note 16 of the Company's 2014 first quarter unaudited
condensed consolidated financial statements.
|
|
|
Condensed Consolidated Interim Financial Statements
(Expressed in Canadian dollars)
(Unaudited)
CANADA BREAD COMPANY, LIMITED
Three months ended March 31, 2014 and 2013
|
|
|
|
|
|
|
|
|
|
|
(In thousands of Canadian dollars)
|
|
As at March 31,
|
|
As at March 31,
|
|
As at December 31,
|
|
|
|
|
|
|
2014
|
|
2013
|
|
2013
|
|
|
|
|
|
|
(Unaudited)
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
|
Current assets
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
$
|
144,096
|
$
|
95,526
|
$
|
325,062
|
|
Accounts receivable
|
|
14,761
|
|
47,983
|
|
38,480
|
|
Note receivable
|
|
|
46,432
|
|
42,311
|
|
35,982
|
|
Inventories
|
|
|
53,717
|
|
61,661
|
|
52,371
|
|
Income taxes recoverable
|
|
5,903
|
|
167
|
|
4,725
|
|
Assets held for sale
|
|
-
|
|
-
|
|
4,372
|
|
Prepaid expenses and other assets
|
|
6,362
|
|
7,002
|
|
3,579
|
|
|
|
|
|
$
|
271,271
|
$
|
254,650
|
$
|
464,571
|
|
Property and equipment
|
|
373,322
|
|
399,861
|
|
372,542
|
|
Investment property
|
|
9,815
|
|
9,148
|
|
9,634
|
|
Other long-term assets
|
|
4,793
|
|
5,190
|
|
4,435
|
|
Deferred tax asset
|
|
9,667
|
|
18,200
|
|
9,218
|
|
Goodwill
|
|
|
271,300
|
|
265,934
|
|
268,444
|
|
Employee benefits
|
|
1,758
|
|
-
|
|
-
|
|
Intangible assets
|
|
10,001
|
|
9,753
|
|
9,804
|
|
Total assets
|
|
$
|
951,927
|
$
|
962,736
|
$
|
1,138,648
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS' EQUITY
|
|
|
|
|
|
|
Current liabilities
|
|
|
|
|
|
|
|
|
Bank indebtedness
|
$
|
-
|
$
|
3,088
|
$
|
4,408
|
|
Accounts payable and accruals
|
|
215,599
|
|
162,416
|
|
204,422
|
|
Provisions
|
|
|
5,304
|
|
17,357
|
|
7,375
|
|
Due to Maple Leaf Foods Inc.
|
|
6,143
|
|
5,116
|
|
4,036
|
|
Dividends payable
|
|
19,062
|
|
12,708
|
|
216,042
|
|
Other current liabilities
|
|
100
|
|
-
|
|
100
|
|
Current portion of long-term debt
|
|
554
|
|
531
|
|
568
|
|
|
|
|
|
$
|
246,762
|
$
|
201,216
|
$
|
436,951
|
|
Long-term debt
|
|
|
2,051
|
|
4,138
|
|
2,357
|
|
Deferred tax liability
|
|
36,900
|
|
21,119
|
|
36,954
|
|
Employee benefits
|
|
36,960
|
|
47,855
|
|
32,547
|
|
Other long-term liabilities
|
|
4,562
|
|
-
|
|
1,876
|
|
Provisions
|
|
|
5,488
|
|
5,039
|
|
5,630
|
|
Total liabilities
|
|
$
|
332,723
|
$
|
279,367
|
$
|
516,315
|
|
|
|
|
|
|
|
|
|
|
|
Shareholders' equity
|
|
|
|
|
|
|
Share capital
|
|
$
|
142,965
|
$
|
142,965
|
$
|
142,965
|
Retained earnings
|
|
|
466,309
|
|
551,398
|
|
477,002
|
Accumulated other comprehensive income (loss)
|
|
9,930
|
|
(10,994)
|
|
2,366
|
Total shareholders' equity
|
$
|
619,204
|
$
|
683,369
|
$
|
622,333
|
Total liabilities and shareholders' equity
|
$
|
951,927
|
$
|
962,736
|
$
|
1,138,648
|
|
|
|
|
|
(In thousands of Canadian dollars, except share amounts)
|
|
|
|
Three months ended March 31,
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
2014
|
|
2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Restated)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales
|
|
|
|
|
|
|
|
|
|
$
|
342,837
|
$
|
346,867
|
Cost of goods sold
|
|
|
|
|
|
|
|
|
|
272,659
|
|
282,995
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross margin
|
|
|
|
|
|
|
|
|
$
|
70,178
|
$
|
63,872
|
Selling, general and administrative expenses
|
|
|
|
|
|
49,877
|
|
46,754
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings before the following:
|
|
|
|
|
|
|
$
|
20,301
|
$
|
17,118
|
Restructuring and other related costs
|
|
|
|
|
|
|
(1,877)
|
|
(10,411)
|
Other expense
|
|
|
|
|
|
|
|
|
|
(4,406)
|
|
(2,513)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings before interest and income taxes from continuing operations
|
|
|
$
|
14,018
|
$
|
4,194
|
Interest expense
|
|
|
|
|
|
|
|
|
|
214
|
|
397
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings before income taxes from continuing operations
|
|
|
|
|
$
|
13,804
|
$
|
3,797
|
Income taxes
|
|
|
|
|
|
|
|
|
|
3,960
|
|
1,503
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings from continuing operations
|
|
|
|
|
|
$
|
9,844
|
$
|
2,294
|
Net loss on disposal of discontinued operations
|
|
|
|
|
|
(628)
|
|
(13)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings
|
|
|
|
|
|
|
|
|
$
|
9,216
|
$
|
2,281
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted earnings per share
|
|
|
|
|
|
$
|
0.36
|
$
|
0.09
|
|
Basic and diluted earnings per share from continuing operations
|
|
|
$
|
0.39
|
$
|
0.09
|
Weighted average number of shares (millions)
|
|
|
|
|
|
25.4
|
|
25.4
|
See accompanying Notes to the Unaudited Condensed Consolidated Interim
Financial Statements.
|
|
|
|
|
|
|
|
|
(In thousands of Canadian dollars)
|
|
|
|
|
|
|
Three months ended March 31,
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
2014
|
|
2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings
|
|
|
|
|
|
|
|
|
|
$
|
9,216
|
$
|
2,281
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Item that will not be reclassified to profit or loss:
|
|
|
|
|
|
|
|
|
|
|
|
Change in actuarial gains and losses
|
|
|
|
|
|
|
|
|
(847)
|
|
6,503
|
Total item that will not be reclassified to profit or loss
|
|
|
|
|
|
(847)
|
|
6,503
|
Items that are or may be reclassified subsequently to profit or loss:
|
|
|
|
|
|
|
|
|
|
Change in accumulated foreign currency
|
|
|
|
|
|
|
|
|
|
|
|
|
translation adjustment
|
|
|
|
|
|
|
|
|
|
6,999
|
|
928
|
|
|
Change in unrealized gains and losses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
on cash flow hedges
|
|
|
|
|
|
|
|
|
|
565
|
|
844
|
Total items that are or may be reclassified
|
|
|
|
|
|
|
|
|
|
|
|
subsequently to profit or loss
|
|
|
|
|
|
|
|
|
$
|
7,564
|
$
|
1,772
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
6,717
|
$
|
8,275
|
Comprehensive income
|
|
|
|
|
|
|
|
|
$
|
15,933
|
$
|
10,556
|
See accompanying Notes to the Unaudited Condensed Consolidated Interim
Financial Statements.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(In thousands of Canadian dollars)
(Unaudited)
|
Share
capital
|
|
Retained
earnings
|
|
Total
accumulated
other
comprehensive
income
|
|
Total
shareholders'
equity
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at December 31, 2013
|
$
|
142,965
|
|
$
|
477,002
|
|
$
|
2,366
|
|
$
|
622,333
|
|
Net earnings
|
|
|
|
-
|
|
|
9,216
|
|
|
-
|
|
|
9,216
|
|
Other comprehensive income
|
|
-
|
|
|
(847)
|
|
|
7,564
|
|
|
6,717
|
|
Dividends declared ($0.75 per share)
|
|
-
|
|
|
(19,062)
|
|
|
-
|
|
|
(19,062)
|
Balance at March 31, 2014
|
$
|
142,965
|
|
$
|
466,309
|
|
$
|
9,930
|
|
$
|
619,204
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(In thousands of Canadian dollars)
(Unaudited)
|
Share
capital
|
|
Retained
earnings
|
|
Total
accumulated
other
comprehensive
income (loss)
|
|
Total
shareholders'
equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at December 31, 2012
|
$
|
142,965
|
|
$
|
555,322
|
|
$
|
(12,766)
|
|
$
|
685,521
|
|
Net earnings
|
|
|
|
-
|
|
|
2,281
|
|
|
-
|
|
|
2,281
|
|
Other comprehensive income
|
|
-
|
|
|
6,503
|
|
|
1,772
|
|
|
8,275
|
|
Dividends declared ($0.50 per share)
|
|
-
|
|
|
(12,708)
|
|
|
-
|
|
|
(12,708)
|
Balance at March 31, 2013
|
|
$
|
142,965
|
|
$
|
551,398
|
|
$
|
(10,994)
|
|
$
|
683,369
|
See accompanying Notes to the Unaudited Condensed Consolidated Interim
Financial Statements.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(In thousands of Canadian dollars)
|
|
|
|
|
|
Three months ended March 31,
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
2014
|
|
2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CASH (USED IN) PROVIDED BY:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating activities
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings
|
|
|
|
|
|
|
|
|
$
|
9,216
|
$
|
2,281
|
|
Add (deduct) items not affecting cash:
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
|
|
|
|
|
|
11,714
|
|
12,777
|
|
|
Deferred income taxes
|
|
|
|
|
|
|
|
|
1,714
|
|
(2,502)
|
|
|
Income tax current
|
|
|
|
|
|
|
|
|
2,406
|
|
4,001
|
|
|
Interest expense
|
|
|
|
|
|
|
|
|
214
|
|
397
|
|
|
(Gain) loss on sale of property and equipment
|
|
|
|
|
|
124
|
|
(1,316)
|
|
|
Gain on sale of assets held for sale
|
|
|
|
|
|
|
(1,725)
|
|
-
|
|
|
Loss on sale of business
|
|
|
|
|
|
|
|
|
468
|
|
-
|
|
|
Gain on sale of intangibles
|
|
|
|
|
|
|
|
|
(364)
|
|
-
|
|
|
Loss on sale of investment properties
|
|
|
|
|
|
26
|
|
-
|
|
|
Impairment of assets
|
|
|
|
|
|
|
|
|
-
|
|
3,570
|
|
Increase in pension liability
|
|
|
|
|
|
|
|
|
1,513
|
|
1,282
|
|
Net income taxes paid
|
|
|
|
|
|
|
|
|
(5,665)
|
|
(8,591)
|
|
Interest received (paid)
|
|
|
|
|
|
|
|
|
(175)
|
|
64
|
|
Change in provision for restructuring and other related costs
|
|
|
|
(2,009)
|
|
6,421
|
|
Other
|
|
|
|
|
|
|
|
|
|
2,014
|
|
142
|
|
Change in non-cash operating working capital
|
|
|
|
|
|
22,894
|
|
(1,513)
|
Cash provided by operating activities
|
|
|
|
|
|
|
$
|
42,365
|
$
|
17,013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financing activities
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends paid
|
|
|
|
|
|
|
|
|
$
|
(216,042)
|
$
|
(12,708)
|
|
(Repayment) drawings of long-term debt
|
|
|
|
|
|
(349)
|
|
1,650
|
Cash used in financing activities
|
|
|
|
|
|
|
|
$
|
(216,391)
|
$
|
(11,058)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investing activities
|
|
|
|
|
|
|
|
|
|
|
|
|
Additions to property and equipment
|
|
|
|
|
|
|
|
$
|
(10,189)
|
$
|
(6,488)
|
|
Proceeds from sale of property and equipment
|
|
|
|
|
|
8,125
|
|
2,556
|
|
Adjustment to sale of business
|
|
|
|
|
|
|
|
(468)
|
|
-
|
Cash used in investing activities
|
|
|
|
|
|
|
|
$
|
(2,532)
|
$
|
(3,932)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Increase (decrease) in cash and cash equivalents
|
|
|
|
$
|
(176,558)
|
$
|
2,023
|
Net cash and cash equivalents, beginning of period
|
|
|
|
|
|
320,654
|
|
90,415
|
Net cash and cash equivalents, end of period
|
|
|
|
|
$
|
144,096
|
$
|
92,438
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash and cash equivalents is comprised of:
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
|
|
|
|
|
$
|
144,096
|
$
|
95,526
|
Bank indebtedness
|
|
|
|
|
|
|
|
|
|
-
|
|
(3,088)
|
Net cash and cash equivalents, end of period
|
|
|
|
|
$
|
144,096
|
$
|
92,438
|
See accompanying Notes to the Unaudited Condensed Consolidated Interim
Financial Statements.
SEGMENTED FINANCIAL INFORMATION
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended March 31,
|
|
|
|
|
|
2014
|
|
|
2013
|
|
|
|
|
|
|
|
|
|
Restated
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales
|
|
|
|
|
|
|
|
|
Fresh Bakery(i)
|
|
|
$
|
216,173
|
|
$
|
242,848
|
|
Frozen Bakery
|
|
|
|
126,664
|
|
|
126,065
|
Total sales
|
|
|
$
|
342,837
|
|
$
|
368,913
|
Sales from discontinued operations
|
|
-
|
|
|
(22,046)
|
Sales from continuing operations
|
$
|
342,837
|
|
$
|
346,867
|
|
|
|
|
|
|
|
|
|
|
Earnings before restructuring and other related
|
|
|
|
|
|
|
costs and other income
|
|
|
|
|
|
|
|
Fresh Bakery(i)
|
|
|
$
|
15,276
|
|
$
|
13,260
|
|
Frozen Bakery
|
|
|
|
5,025
|
|
|
3,841
|
Earnings before restrucutring and other related
|
|
|
|
|
|
|
costs and other income
|
|
$
|
20,301
|
|
$
|
17,101
|
Loss before restructuring and other related
|
|
|
|
|
|
|
costs and other income from discontinued operations
|
|
-
|
|
|
17
|
Earnings before restructuring and other related
|
|
|
|
|
|
|
costs and other income from continuing operations
|
$
|
20,301
|
|
$
|
17,118
|
|
|
|
|
|
|
|
|
|
|
Capital expenditures
|
|
|
|
|
|
|
|
Fresh Bakery(i)
|
|
|
$
|
6,565
|
|
$
|
1,841
|
|
Frozen Bakery
|
|
|
|
3,624
|
|
|
4,647
|
|
|
|
|
|
$
|
10,189
|
|
$
|
6,488
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
|
|
|
|
Fresh Bakery(i)
|
|
|
$
|
6,843
|
|
$
|
8,049
|
|
Frozen Bakery
|
|
|
|
4,871
|
|
|
4,728
|
|
|
|
|
|
$
|
11,714
|
|
$
|
12,777
|
(i) The prior year results from the Fresh Bakery Group include assets
and goodwill from the Fresh Pasta and Sauces business.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As at
March 31,
2014
|
|
As at
March 31,
2013(i)
|
|
As at
December 31,
2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets
|
|
|
|
|
|
|
|
|
|
|
|
Fresh Bakery(i)
|
|
|
$
|
455,457
|
|
$
|
495,095
|
|
$
|
427,722
|
|
Frozen Bakery
|
|
|
|
357,512
|
|
|
340,886
|
|
|
329,631
|
|
Non-allocated assets
|
|
|
138,958
|
|
|
126,755
|
|
|
381,295
|
|
|
|
|
|
$
|
951,927
|
|
$
|
962,736
|
|
$
|
1,138,648
|
Goodwill
|
|
|
|
|
|
|
|
|
|
|
|
Fresh Bakery(i)
|
|
|
$
|
123,867
|
|
$
|
125,892
|
|
$
|
123,867
|
|
Frozen Bakery
|
|
|
|
147,433
|
|
|
140,042
|
|
|
144,577
|
|
|
|
|
|
$
|
271,300
|
|
$
|
265,934
|
|
$
|
268,444
|
(i) The prior year results as at March 31, 2013 from the Fresh Bakery
Group include assets and goodwill from the Fresh Pasta and Sauces
business.
SOURCE Canada Bread Company, Limited