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Canada Bread Reports Results for Second Quarter 2010

^{Published on 2010-07-29 06:10:43 - Market Wire}
 

 - Adjusted Operating Earnings were $30.4 million; $33.1 million last year - Net earnings were $20.7 million compared to $22.5 million last year - Basic EPS were $0.81 compared to $0.89 last year Note: Adjusted Operating Earnings are defined as earnings from operations before restructuring and other related costs and other income. Adjusted Earnings per Share ("Adjusted EPS") are defined as basic earnings per share adjusted for the impact of restructuring and other related costs, net of tax. Refer to the section entitled Reconciliation of Non-GAAP Financial Measures at the end of this news release. 

 Financial Overview ------------------ 

 Business Segment Review ----------------------- 

 ------------------------------------------------------------------------- ($ thousands) Second Quarter Year-to-Date ---------------------------------------------------- 2010 2009 2010 2009 ------------------------------------------------------------------------- Fresh Bakery $ 282,530 $ 290,258 $ 539,719 $ 553,261 Frozen Bakery 119,532 145,660 244,275 295,782 ------------------------------------------------------------------------- Sales $ 402,062 $ 435,918 $ 783,994 $ 849,043 ------------------------------------------------------------------------- ------------------------------------------------------------------------- 

 ------------------------------------------------------------------------- ($ thousands) Second Quarter Year-to-Date 2010 2009 2010 2009 ------------------------------------------------------------------------- Fresh Bakery $ 27,515 $ 25,379 $ 48,206 $ 38,197 Frozen Bakery 2,871 7,762 2,504 16,294 ------------------------------------------------------------------------- Adjusted Operating Earnings $ 30,386 $ 33,141 $ 50,711 $ 54,491 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Fresh Bakery ------------ 

 Frozen Bakery ------------- 

 Other Matters ------------- 

 Forward-Looking Statements -------------------------- 

 Reconciliation of Non-GAAP Financial Measures --------------------------------------------- 

 ($ thousands) Three months ended Six months ended June 30, June 30, 2010 2009 2010 2009 Net earnings $ 20,686 $ 22,537 $ 33,413 $ 37,419 Income taxes 8,046 9,461 13,027 15,633 ------------------------------------------------------------------------- Earnings before income taxes $ 28,732 $ 31,998 $ 46,440 $ 53,052 Interest expense 904 1,814 1,888 3,307 Restructuring and other related costs 805 101 2,509 674 Other income (55) (772) (127) (2,542) ------------------------------------------------------------------------- Adjusted Operating Earnings $ 30,386 $ 33,141 $ 50,710 $ 54,491 ------------------------------------------------------------------------- ------------------------------------------------------------------------- 

 ($ per share) Three months ended Six months ended June 30, June 30, 2010 2009 2010 2009 Basic Earnings per Share $ 0.81 $ 0.89 $ 1.31 $ 1.47 Restructuring and other related costs(i) 0.02 - 0.07 0.02 ------------------------------------------------------------------------- Adjusted Earnings per Share(ii) $ 0.84 $ 0.89 $ 1.39 $ 1.49 ------------------------------------------------------------------------- ------------------------------------------------------------------------- (i) Includes per share impact of restructuring and other related costs, net of tax. (ii) Does not add due to rounding. Consolidated Interim Financial Statements (Expressed in Canadian dollars) CANADA BREAD COMPANY, LIMITED Three months ended June 30, 2010 and 2009 CANADA BREAD COMPANY, LIMITED Consolidated Balance Sheets (In thousands of Canadian dollars) ------------------------------------------------------------------------- As at As at As at June 30, June 30, December 31, 2010 2009 2009 ------------------------------------------------------------------------- (Unaudited) (Unaudited) ASSETS Current assets Cash and cash equivalents $ 88,875 $ 21,124 $ 57,698 Accounts receivable 70,032 68,020 63,620 Due from Maple Leaf Foods Inc. 978 76 - Inventories 57,790 58,140 56,659 Future tax asset 1,770 5,436 1,640 Prepaid expenses and other assets 5,323 6,571 4,438 ----------------------------------------------------------------------- $ 224,768 $ 159,367 $ 184,055 Property and equipment 382,044 410,456 387,252 Goodwill 384,379 405,877 386,807 Other intangible assets 15,482 20,245 16,678 Other long-term assets 11,849 10,453 11,620 ------------------------------------------------------------------------- $ 1,018,522 $ 1,006,398 $ 986,412 ------------------------------------------------------------------------- ------------------------------------------------------------------------- LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities Bank indebtedness $ 8,071 $ 9,511 $ 4,247 Accounts payable and accrued charges 183,182 179,756 172,172 Due to Maple Leaf Foods Inc. - - 3,817 Dividends payable 1,525 1,525 1,525 Income and other taxes payable 10,022 12,576 13,155 Current portion of long-term debt - 42 - ----------------------------------------------------------------------- $ 202,800 $ 203,410 $ 194,916 Long-term debt 2,420 14,997 2,547 Future tax liability 32,055 35,726 33,338 Other long-term liabilities 8,299 8,623 8,524 Shareholders' equity 772,948 743,642 747,087 ------------------------------------------------------------------------- $ 1,018,522 $ 1,006,398 $ 986,412 ------------------------------------------------------------------------- ------------------------------------------------------------------------- CANADA BREAD COMPANY, LIMITED Consolidated Statements of Earnings (In thousands of Canadian dollars, except share amounts) ------------------------------------------------------------------------- Three months ended Six months ended June 30, June 30, (Unaudited) 2010 2009 2010 2009 ------------------------------------------------------------------------- Sales $ 402,062 $ 435,918 $ 783,994 $ 849,043 Cost of goods sold 317,045 350,578 623,852 687,844 ------------------------------------------------------------------------- Gross margin $ 85,017 $ 85,340 $ 160,142 $ 161,199 Selling, general and administrative expenses 54,631 52,199 109,432 106,708 ------------------------------------------------------------------------- Earnings from operations before the following: $ 30,386 $ 33,141 $ 50,710 $ 54,491 Restructuring and other related costs (805) (101) (2,509) (674) Other income 55 772 127 2,542 ------------------------------------------------------------------------- Earnings before interest and income taxes $ 29,636 $ 33,812 $ 48,328 $ 56,359 Interest expense 904 1,814 1,888 3,307 ------------------------------------------------------------------------- Earnings before income taxes $ 28,732 $ 31,998 $ 46,440 $ 53,052 Income taxes 8,046 9,461 13,027 15,633 ------------------------------------------------------------------------- Net earnings $ 20,686 $ 22,537 $ 33,413 $ 37,419 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Earnings per share - basic and diluted $ 0.81 $ 0.89 $ 1.31 $ 1.47 ------------------------------------------------------------------------- Weighted average number of shares (millions) 25.4 25.4 25.4 25.4 ------------------------------------------------------------------------- CANADA BREAD COMPANY, LIMITED Consolidated Statements of Comprehensive Income (In thousands of Canadian dollars) ------------------------------------------------------------------------- Three months ended Six months ended June 30, June 30, (Unaudited) 2010 2009 2010 2009 ------------------------------------------------------------------------- Net earnings $ 20,686 $ 22,537 $ 33,413 $ 37,419 Other comprehensive income (loss) 16,506 (2,874) (4,502) 920 ------------------------------------------------------------------------- Comprehensive income $ 37,192 $ 19,663 $ 28,911 $ 38,339 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Consolidated Statements of Retained Earnings (In thousands of Canadian dollars, except share amounts) ------------------------------------------------------------------------- Six months ended June 30, (Unaudited) 2010 2009 ------------------------------------------------------------------------- Retained earnings, beginning of period $ 658,541 $ 587,163 Net earnings 33,413 37,419 Dividends declared ($0.12 per share; 2009: $0.12 per share) (3,050) (3,050) ------------------------------------------------------------------------- Retained earnings, end of period $ 688,904 $ 621,532 ------------------------------------------------------------------------- ------------------------------------------------------------------------- CANADA BREAD COMPANY, LIMITED Consolidated Statements of Cash Flows (In thousands of Canadian dollars) ------------------------------------------------------------------------- Three months ended Six months ended June 30, June 30, (Unaudited) 2010 2009 2010 2009 ------------------------------------------------------------------------- CASH PROVIDED BY (USED IN): Operating activities Net earnings $ 20,686 $ 22,537 $ 33,413 $ 37,419 Add (deduct) items not affecting cash: Depreciation and amortization 12,380 14,078 25,071 28,155 Future income taxes 108 (872) (1,933) (796) Loss (gain) on sale of property and equipment 5 138 (47) 330 Amortization of terminated interest rate swap 659 645 1,317 645 Change in provision for restructuring and other related costs (725) (433) 347 (974) Other (20) (1,388) 75 (2,031) Change in non-cash operating working capital 1,514 (7,096) (6,201) (28,088) ------------------------------------------------------------------------- Cash provided by operating activities $ 34,607 $ 27,609 $ 52,042 $ 34,660 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Financing activities Dividends paid (1,525) (1,525) (3,050) (3,050) Net increase (decrease) in long-term debt 109 1,272 (127) 10,520 Settlement of interest rate swaps with Maple Leaf Foods Inc. - (8,502) - (8,502) ------------------------------------------------------------------------- Cash used in financing activities $ (1,416) $ (8,755) $ (3,177) $ (1,032) ------------------------------------------------------------------------- ------------------------------------------------------------------------- Investing activities Additions to property and equipment (14,554) (9,524) (22,110) (24,366) Proceeds from sale of property and equipment - 77 685 469 Other (137) 255 (87) (945) ------------------------------------------------------------------------- Cash used in investing activities $ (14,691) $ (9,192) $ (21,512) $ (24,842) ------------------------------------------------------------------------- ------------------------------------------------------------------------- Increase in cash and cash equivalents $ 18,500 $ 9,662 $ 27,353 $ 8,786 Net cash and cash equivalents, begin- ning of period 62,304 1,951 53,451 2,827 ------------------------------------------------------------------------- Net cash and cash equivalents, end of period $ 80,804 $ 11,613 $ 80,804 $ 11,613 ------------------------------------------------------------------------- ------------------------------------------------------------------------- CANADA BREAD COMPANY, LIMITED Segmented Financial Information (In thousands of Canadian dollars) ------------------------------------------------------------------------- Three months ended Six months ended June 30, June 30, (Unaudited) 2010 2009 2010 2009 ------------------------------------------------------------------------- Sales Fresh Bakery $ 282,530 $ 290,258 $ 539,719 $ 553,261 Frozen Bakery 119,532 145,660 244,275 295,782 ------------------------------------------------------------------------- $ 402,062 $ 435,918 $ 783,994 $ 849,043 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Earnings from operations before restructuring and other related costs and other income Fresh Bakery $ 27,515 $ 25,379 $ 48,206 $ 38,197 Frozen Bakery 2,871 7,762 2,504 16,294 ------------------------------------------------------------------------- $ 30,386 $ 33,141 $ 50,710 $ 54,491 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Additions to property and equipment Fresh Bakery $ 9,407 $ 5,703 $ 13,491 $ 11,431 Frozen Bakery 5,147 3,821 8,619 12,935 ------------------------------------------------------------------------- $ 14,554 $ 9,524 $ 22,110 $ 24,366 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Depreciation and amortization Fresh Bakery $ 6,476 $ 6,911 $ 13,265 $ 14,059 Frozen Bakery 5,904 7,167 11,806 14,096 ------------------------------------------------------------------------- $ 12,380 $ 14,078 $ 25,071 $ 28,155 ------------------------------------------------------------------------- ------------------------------------------------------------------------- ------------------------------------------------------------------------- As at As at As at June 30, June 30, December 31, 2010 2009 2009 ------------------------------------------------------------------------- (Unaudited) (Unaudited) Total assets Fresh Bakery $ 456,530 $ 443,964 $ 441,020 Frozen Bakery 458,575 516,077 476,681 Non-allocated assets 103,417 46,357 68,711 ------------------------------------------------------------------------- $ 1,018,522 $ 1,006,398 $ 986,412 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Goodwill Fresh Bakery $ 157,120 $ 155,962 $ 155,946 Frozen Bakery 227,259 249,915 230,861 ------------------------------------------------------------------------- $ 384,379 $ 405,877 $ 386,807 ------------------------------------------------------------------------- -------------------------------------------------------------------------