Financial Highlights:
Fourth quarters ended | Years ended | ||||||
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(in millions of dollars, unless otherwise indicated) | $ | $ | $ | $ | $ | $ | |
Sales | 604.8 | 556.0 | 48.8 | 2,314.9 | 2,151.0 | 164.0 | |
Gross profit | 152.5 | 123.6 | 28.9 | 587.7 | 523.3 | 64.4 | |
Operating profit | 32.1 | 16.7 | 15.4 | 135.4 | 81.3 | 54.1 | |
Profit | 20.5 | 10.1 | 10.4 | 88.3 | 53.3 | 34.9 | |
Attributable to: | Corporation's | 21.0 | 10.5 | 10.5 | 87.5 | 53.9 | 33.6 |
Non-controlling | (0.5) | (0.4) | (0.1) | 0.7 | (0.6) | 1.3 | |
EPS (in $) | 3.08 | 1.53 | 1.55 | 12.83 | 7.85 | 4.99 | |
Weighted average number of shares | 6,822 | 6,849 | (27) | 6,822 | 6,875 | (54) | |
Adjusted EBITDA1 | 52.6 | 38.3 | 14.3 | 207.1 | 157.1 | 50.0 | |
Adjusted EPS1 (in $) | 3.14 | 2.09 | 1.05 | 13.18 | 9.37 | 3.81 |
Note: These are financial highlights only. Management's Discussion and Analysis, the audited consolidated financial statements and notes thereto for the year ended |
"
"Reflecting solid momentum throughout the organization, all divisions delivered profit growth in the fourth quarter and for 2023. Simultaneously, we continued to progress on all pillars of our multi-year strategy, which includes fortifying the foundation of our
Fourth Quarter Highlights:
- Sales of
$604.8 million . Excluding a$1.1 million favourable foreign exchange impact, sales were up$47.7 million (8.6%) from the same quarter last year, mainly due to selling price adjustments and to an increase inU.S. sales volume, partly offset by a decrease in the Canadian sales volume of national brand products. - Gross profit of
$152.5 million (25.2% of sales). Excluding a$3.7 million unfavourable foreign exchange impact, gross profit was up$32.6 million from the same quarter last year. This net increase, coming from all of the Corporation's divisions, results mainly from the following items:- Favourable impact of selling price adjustments to offset cost increases, including the higher cost for certain inputs, especially apple and orange concentrates;
- Gross profit loss of
$3.7 million in 2022 following a production interruption of the cranberry sauce line at the Corporation'sNew Jersey plant; and $2.0 million in expenses related to business optimization.
- Operating profit of
$32.1 million , up$15.4 million from the same quarter last year. This net increase results mainly from the following items:- Higher gross profit;
$6.0 million increase in selling and marketing expenses, essentially inCanada ;$6.0 million increase in performance-related compensation expenses;$4.2 million decrease in transportation costs incurred to deliver products to customers, resulting (i) from decreases in fuel surcharges and in base transportation rates, and (ii) from savings related to the use of new processes and the transportation management system ("TMS") in theU.S. ;$1.9 million increase in certain administrative expenses; and$1.5 million in expenses related to business optimization.
- Excluding items impacting comparability, adjusted EBITDA1 was
$52.6 million (8.7% of sales), up$14.3 million from the same quarter last year. - Profit attributable to the Corporation's shareholders of
$21.0 million , resulting in basic and diluted earnings per share ("EPS") of$3.08 , up$10.6 million and$1.55 , respectively, from the same quarter in 2022. Excluding items impacting comparability, adjusted EPS1 was$3.14 compared to$2.09 in the same quarter last year. - Dividend of
$0.50 per share, paid onDecember 15, 2023 .
Fiscal 2023 Highlights:
- Sales of
$2,314.9 million . Excluding a$43.8 million favourable foreign exchange impact, sales were up$120.1 million (5.6%) from last year, mainly due to the favourable impact of selling price adjustments and to a favourable change in the sales mix of private label products, partly offset by a decrease in sales volume, essentially in theU.S. - Gross profit of
$587.7 million (25.4% of sales). Excluding a$5.1 million unfavourable foreign exchange impact, gross profit was up$69.4 million from last year. This net increase, coming from all of the Corporation's divisions, results mainly from the following items:- Favourable impact of selling price adjustments to offset cost increases, including the higher cost for all inputs, especially apple and orange concentrates and the increase in the Corporation's conversion costs;
- Gross profit loss of
$5.2 million in 2022 following a production interruption on the cranberry sauce line at the Corporation'sNew Jersey plant; and $2.0 million in expenses related to business optimization.
- Operating profit of
$135.4 million , up$54.1 million from last year. This net increase results mainly from the following items:- Higher gross profit;
$38.9 million decrease in transportation costs incurred to deliver products to customers, resulting (i) from decreases in fuel surcharges and in base transportation rates, (ii) from savings related to the use of new processes and the TMS in theU.S. and (iii) from a decrease in sales volume;$28.9 million increase in performance-related compensation expenses;$8.1 million increase in certain administrative expenses;$6.5 million unfavourable foreign exchange impact that affected the conversion of the selling and administrative expenses of the U.S. entities into Canadian dollars;$6.4 million increase in selling and marketing expenses, essentially inCanada ;$5.7 million decrease in expenses related to the multi-year strategy and its deployment; and$1.9 million in expenses related to business optimization.
- Excluding items impacting comparability, adjusted EBITDAi was
$207.1 million (8.9% of sales), up$50.0 million from last year. - Profit attributable to the Corporation's shareholders of
$87.5 million , resulting in EPS of$12.83 , up$33.6 million and$4.99 , respectively, from 2022. Excluding items impacting comparability, adjusted EPS1 was$13.18 compared to$9.37 last year. - As at
December 31, 2023 , long-term debt, including the current portion, stood at$210.5 million , representing a net debt to adjusted EBITDAi ratio of 0.92:1. This is down$38.9 million fromDecember 31, 2022 . - Dividends totalling
$2.20 per share, for a total amount of$15.0 million paid in 2023.
Outlook
Lassonde continues to expect the largest factors impacting its performance in fiscal 2024 will be the financial health of consumers and the inflationary environment. As a result, the Corporation is currently retaining the following assumptions for its fiscal year 2024:
Sales growth rate
- For 2024, barring any significant external shocks and excluding foreign exchange impacts, Lassonde expects:
- a sales growth rate in the mid-single-digit range, mainly driven by the run rate effect of its selling price adjustments together with the volume growth expected in the second half of the year; and
- a slight decrease in sales volume in the first half of the year with sequential improvement in the second half resulting from the combined impact of the following items: (i) the pace of the
U.S. demand build back strategy for the Corporation's products; ii) additional volumes available following the deployment of its single serve line inNorth Carolina ; and (iii) the overall stabilization of demand.
- Lassonde will also consider further pricing action to be implemented over the course of 2024 if inflation persists. However, the Corporation is closely monitoring the evolution of consumer food habits and demand elasticity in a context of price increases.
Key commodity and input costs
- Lassonde's input costs have increased significantly since 2021. More recently, the prices for orange juice and orange concentrates remain an area of focus.
- Given that a large portion of the raw material purchases made by Lassonde's Canadian operations are in
U.S. dollars, a strengthening of this currency against the Canadian dollar results in a higher cost for products sold in the Canadian market. Furthermore, the Corporation is expecting an unfavourable foreign exchange impact for 2024 when considering its hedged positions.
Expenses, including items impacting the comparability between the periods
- The Corporation's performance-related compensation expenses are expected to return in 2024 to levels below those observed in 2023.
- During 2024, Lassonde plans to continue deploying its multi-year strategy, optimizing its business and upgrading its key systems and technology infrastructures to improve its efficiency. Planned spending in support of these elements is expected to reach up to
$5.0 million in 2024.
Effective tax rate
- Effective tax rate should be about 26.5% for fiscal 2024.
Working capital
- The Corporation's
Days Operating Working Capital 1 is now closer to its historical levels and only incremental improvements are expected for this ratio over the course of 2024. However, this outlook might be impacted by (i) opportunistic decisions to secure inventory cost ahead of potential additional price increases from suppliers, (ii) the objective of ensuring an adequate service level, or (iii) the decisions to counter new potential supply chain disruptions.
Capital expenditures
- The Corporation's overall capital expenditures program for 2024 is estimated to reach up to 5.0% of its sales as it continues to deploy capital in support of its multi-year strategy. This estimate depends on the rate of progress of certain large capital projects and on the evolution of the macroeconomic environment.
The above forward-looking statements exclude items related to Diamond Estates Wines & Spirits Inc. and have been prepared using the following key assumptions: currently observed geopolitical situation and macroeconomic trends, including employment, inflation and interest rates; a stable exchange rate between the
Conference Call to Discuss Fourth Quarter 2023 Financial Results
Open to: | Investors, analysts, and all interested parties |
DATE: | |
TIME: | |
CALL: | 604-638-5340 (for international participants) |
1-800-319-4610 (for North American participants) |
A live audio broadcast of the conference call will be available on the Corporation's website, on the Investors page or here: https://www.gowebcasting.com/13135. A replay of the webcast will remain available at the same link until midnight,
Financial Measures Not in Accordance With IFRS
To provide more information for evaluating the Corporation's performance, the financial information in the financial documents contains certain supplementary financial measures and certain data or ratios that are not financial measures defined under IFRS ("non-IFRS measures"), which are also calculated on an adjusted basis to exclude specific items impacting the comparability between periods. The Corporation believes that providing these non-IFRS measures is useful to management, investors, and analysts, as they provide additional information to analyze its performance and financial position. These measures may not be comparable to similar measures presented by other issuers.
Items impacting the comparability between periods
The following table contains a list, description and quantification of items impacting the comparability of the financial performance between the periods:
Fourth quarters ended | Years ended | ||||
(in millions of dollars) | $ | $ | $ | $ | |
Costs related to the multi-year strategy | 0.6 | 1.0 | 1.9 | 7.1 | |
Implementation costs of new key systems | 1.3 | 1.8 | 3.4 | 3.9 | |
Production interruption of a line in | - | 3.7 | - | 5.2 | |
Business optimization | 3.0 | - | 3.4 | - | |
Adjustment related to non-recoverable sales taxes | - | - | 0.9 | - | |
Sum of items impacting comparability on EBITDA: | 4.9 | 6.5 | 9.6 | 16.2 | |
Accelerated depreciation expense related to the production network optimization | 0.5 | - | 0.5 | - | |
Gain on capital assets related to the production network optimization | (1.5) | - | (1.0) | - | |
Sum of items impacting comparability on operating profit: | 3.9 | 6.5 | 9.1 | 16.2 | |
Items impacting comparability on "Other (gains) losses": | |||||
Gain related to the settlement of insurance claims | (0.6) | - | (3.2) | - | |
Gain on a business combination | (1.9) | - | (1.9) | - | |
Tax impact of previous items | (0.9) | (1.7) | (1.6) | (4.2) | |
Item impacting comparability on income tax expense: | |||||
Deferred tax liabilities adjustment following a tax rate reduction in a | - | (0.6) | - | (0.6) | |
Impact on profit | 0.6 | 4.2 | 2.5 | 11.4 | |
Attributable to: | Corporation's shareholders | 0.5 | 3.8 | 2.4 | 10.5 |
Non-controlling interests | 0.1 | 0.4 | 0.1 | 0.9 |
EBITDA and Adjusted EBITDA
EBITDA is a financial measure used by the Corporation and investors to assess the Corporation's capacity to generate future cash flows from operating activities and pay financial expenses. Adjusted EBITDA is a financial measure used by the Corporation to compare EBITDA between periods by excluding items impacting comparability. EBITDA consists of the sum of operating profit and of the "depreciation of property, plant and equipment and amortization of intangible assets" item and "(Gains) losses on capital assets," item, as shown in the Consolidated Statement of Cash Flows. Adjusted EBITDA is calculated by adjusting the EBITDA with items considered by management as impacting the comparability between periods.
Fourth quarters ended | Years ended | |||
(in millions of dollars) | $ | $ | $ | $ |
Operating profit | 32.0 | 16.7 | 135.4 | 81.3 |
Depreciation of property, plant and equipment and amortization of intangible assets | 17.1 | 14.9 | 63.3 | 59.5 |
(Gains) losses on capital assets | (1.5) | 0.1 | (1.1) | 0.1 |
EBITDA | 47.6 | 31.8 | 197.5 | 140.9 |
Sum of items impacting comparability | 4.9 | 6.5 | 9.6 | 16.2 |
Adjusted EBITDA | 52.6 | 38.3 | 207.1 | 157.1 |
Adjusted Profit Attributable to the Corporation's Shareholders and Adjusted EPS
Adjusted profit attributable to the Corporation's shareholders and adjusted EPS are financial measures used by the Corporation to compare profit attributable to the Corporation's shareholders and EPS between periods by excluding items impacting comparability. They are calculated by adjusting them with items considered by management as impacting the comparability between periods.
Fourth quarters ended | Years ended | |||
(in millions of dollars, unless otherwise indicated) | $ | $ | $ | $ |
Profit attributable to the Corporation's shareholders | 21.0 | 10.5 | 87.5 | 53.9 |
Sum of items impacting comparability | 0.6 | 3.8 | 2.5 | 10.5 |
Adjusted profit attributable to the Corporation's shareholders | 21.5 | 14.3 | 89.9 | 64.4 |
Weighted average number of shares outstanding (in thousands) | 6,822 | 6,849 | 6,822 | 6,875 |
Adjusted EPS (in $) | 3.14 | 2.09 | 13.18 | 9.37 |
Net Debt to Adjusted EBITDA
Net debt to adjusted EBITDA is a financial measure used by the Corporation to assess its ability to pay off existing debt and define available borrowing capacity. To calculate the net debt to adjusted EBITDA ratio, net debt is divided by the sum of adjusted EBITDA from the last four quarters. Net debt represents long-term debt, including the current portion, less the "Cash and cash equivalents" item, as they are presented in the Corporation's Consolidated Statement of Financial Position.
As at | As at | |
(in millions of dollars, except the net debt to adjusted EBITDA ratio) | $ | $ |
Current portion of long-term debt | 18.5 | 100.8 |
Long-term debt | 192.0 | 148.6 |
Less: Cash and cash equivalents | (19.8) | (2.7) |
Net debt | 190.7 | 246.7 |
Sum of adjusted EBITDA from the last four quarters | 207.1 | 157.1 |
Net debt to adjusted EBITDA ratio | 0.92:1 | 1.57:1 |
Days operating working capital is a financial efficiency measure used by the Corporation to represent the amount of sales tied up as operating working capital. To calculate this financial measure, operating working capital is divided by the last quarter's sales, as they are presented in this press release, and multiplied by 91 days. Starting in the annual MD&A for the year ended
About Lassonde
The Corporation operates 16 plants located in
The Corporation is active in two market segments:
- Retail sales consist of sales to food retailers and wholesalers such as supermarket chains, independent grocers, superstores, warehouse clubs, major pharmacy chains; and
- Food service sales consist of sales to restaurants, hotels, hospitals, schools, and wholesalers serving these institutions.
Caution Concerning Forward-Looking Statements
This document contains "forward-looking information" and the Corporation's oral and written public communications that do not constitute historical fact may be deemed to be "forward-looking information" within the meaning of applicable Canadian securities law. These forward-looking statements include, but are not limited to, statements on the Corporation's objectives and goals and are based on current expectations, projections, beliefs, judgments, and assumptions based on information available at the time the applicable forward-looking statement was made and considering the Corporation's experience combined with its perception of historical trends.
Forward-looking statements are typically identified by words such as "anticipate", "continue", "estimate", "expect", "may", "will", "project", "should", "could", "would", "believe", "plan", "intend", "design", "target", "objective", "strategy", "likely", "potential", "outlook", "aim", "goal", and similar expressions suggesting future events or future performance in addition to the negative forms of these terms or any variations thereof. All statements other than statements of historical fact included in this document may constitute a forward-looking statement.
In this document, forward-looking statements include, but are not limited to, those set forth in the above "Outlook" section, which also presents some (but not all) of the key assumptions used in determining the forward-looking statements. Some of the forward-looking statements in this report, such as statements concerning volume and sales growth rate, key commodity and input costs, expenses, including items impacting the comparability between the periods, effective tax rate, working capital, and capital expenditures may be considered financial outlooks for the purposes of applicable Canadian securities regulation. These financial outlooks are presented to evaluate potential future earnings and anticipated future uses of cash flows and may not be appropriate for other purposes.
Various factors or assumptions are applied by the Corporation in elaborating the forward‑looking statements. These factors and assumptions are based on information currently available to the Corporation, including information obtained by the Corporation from third-party sources. Readers are cautioned that the assumptions considered by the Corporation to support these forward-looking statements may prove to be incorrect in whole or in part.
The significant factors that could cause actual results to differ materially from the conclusions, forecasts or projections reflected in the forward-looking statements contained herein include, among other things, risks associated with the following: deterioration of general macroeconomic conditions, including international conflicts, which can lead to negative impacts on the Corporation's suppliers, customers and operating costs; the availability of raw materials and packaging and related price variations (including the prices of orange juice and orange concentrates, key commodities for the Corporation, which have continued to trade above historical highs for the past several months and show no sign of favourable change); loss of key suppliers or supplier concentration; disruptions in or failures of the Corporation's information technology systems, as well as the development and performance of technology; cyber threats and other information-technology-related risks relating to business disruptions, confidentiality, data integrity, and business email compromise-related fraud; the successful deployment of the Corporation's multi-year strategy (defined in Section 4 - "Multi-Year Strategy" of the Corporation's MD&A for the year ended
The Corporation's ability to achieve its sustainability targets and goals is further subject to, among other factors, its ability to access and implement all technology necessary to achieve them as well as the development, deployment and performance of technology, and environmental regulation. The Corporation's ability to achieve its environmental, social and governance risk commitments is further subject to, among other factors, its ability to leverage its supplier relationships.
The assumptions, expectations, and estimates involved in preparing forward-looking statements and risks and uncertainties that could cause actual results to differ materially from forward-looking statements are discussed in the Corporation's materials filed with the Canadian securities regulatory authorities from time to time, including information about risk factors that can be found in Section 19 - "Uncertainties and Principal Risk Factors" of the Corporation's MD&A for the year ended
All forward-looking statements included herein speak only as of the date hereof. Unless required by law, the Corporation does not undertake any obligation to publicly update or revise forward-looking statements, whether as a result of new information, future events or otherwise. All forward-looking statements contained herein are wholly and expressly qualified by this cautionary statement.
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1 This measure does not constitute a standardized financial measure in accordance with the financial reporting framework used to prepare the Corporation's financial statements. Comparing it to a similar financial measure presented by other issuers may not be possible. Refer to Section "Financial Measures Not in Accordance with IFRS" of this press release for more information, including the definition and composition of the measure or ratio as well as the reconciliation to the most comparable measure in the financial statements, as applicable. |
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