Premium Brands Holdings Corporation Announces Record First Quarter Sales and EBITDA
(firmenpresse) - VANCOUVER, BRITISH COLUMBIA -- (Marketwired) -- 05/09/13 -- Premium Brands Holdings Corporation (TSX: PBH), a leading producer, marketer and distributor of branded specialty food products, announced today its results for the first quarter of 2013.
HIGHLIGHTS
SUMMARY FINANCIAL INFORMATION
"Although we are pleased with our overall performance for the quarter, we still have some work to do," said Mr. George Paleologou, President and CEO.
"We have made significant capital investments in many of our businesses over the last year and a half and expect to start generating solid returns on these initiatives in the coming quarters. This, combined with our recent Freybe acquisition, which we expect to be very synergistic, and the significant progress being made on the restructuring of our NDSD business, positions us for a strong second half of 2013.
"In the meantime, our diversified group of businesses and their focus on selling premium, branded specialty products continues to deliver consistent growth and earnings. This is despite the range of issues currently facing the food industry and the constant economic headwinds that are challenging all businesses.
"Our recently announced 6.3% dividend increase reflects our confidence in our business model and the competitive strength of the many entrepreneurial businesses under the Premium Brands umbrella.
"In terms of acquisitions, we are working on a number of exciting opportunities and expect that 2013 will be another eventful year," said Mr. Paleologou.
About Premium Brands
Premium Brands owns a broad range of leading specialty food manufacturing and differentiated food distribution businesses with operations in British Columbia, Alberta, Saskatchewan, Manitoba, Ontario, Quebec, Nevada and Washington State. The Company services over 22,000 customers and its family of brands and businesses include Grimm's, Harvest, McSweeney's, Bread Garden Go, Hygaard, Hempler's, Quality Fast Foods, Gloria's Best of Fresh, Direct Plus, National Direct-to-Store Distribution (NDSD), Harlan Fairbanks, Creekside Bakehouse, Centennial Foodservice, B&C Food Distributors, Shahir, Wescadia, Duso's, Maximum Seafood, SK Food Group, OvenPride, Hub City Fisheries, Audrey's, Deli Chef, Piller's and Freybe.
RESULTS OF OPERATIONS
Retail's revenue for the first quarter of 2013 as compared to the first quarter of 2012 increased by $5.7 million or 4.3% due to organic growth across a range of products and customers. Its growth rate was below the Company's targeted range of 6% to 8% primarily due to the following factors:
Excluding the $3.7 million sales decrease associated with the above factors, Retail's organic growth rate for the quarter was approximately 7.1%.
Looking forward (see Forward Looking Statements), for the balance of 2013 the Company expects Retail's organic sales growth to be at or slightly below its long-term targeted range of 6% to 8%.
Foodservice's revenue for the first quarter of 2013 as compared to the first quarter of 2012 increased by $7.0 million or 8.4% due to: (i) general organic growth of $3.8 million representing an organic growth rate of 4.8%; (ii) the acquisition of certain businesses from Harbour Marine which accounted for $1.8 million of the increase; and (iii) increased sales in its Worldsource food brokerage business of $1.4 million resulting from improved trading opportunities.
Foodservice's organic growth rate for the quarter was below the Company's long-term target of 6% to 8% due to: (i) a general shortage of wild and exotic fish species that impacted the sales of its Maximum Seafood and Hub City Fisheries businesses; and (ii) poorer than normal weather in a number of areas across Canada in the latter half of the quarter which impacted its Centennial Foodservice and Harlan Fairbanks businesses.
Looking forward (see Forward Looking Statements), for the balance of 2013 the Company expects Foodservice's organic sales growth to be within its long-term targeted range of 6% to 8%.
Retail's gross profit as a percentage of its revenue (gross margin) for the first quarter of 2013 as compared to the first quarter of 2012 decreased due to: (i) temporary production inefficiencies at SK Food Group's Reno, NV plant due to a combination of the launch of new sandwich wraps for two large international customers in the fourth quarter of 2012 and the installation of several new pieces of equipment during the first quarter of 2013; (ii) lower margins at NDSD resulting from the transition of certain product sales to third party distributors and wholesale distributors (see Revenue); and (iii) increased plant overheads associated with Stuyver's new artisan bakery in Langley, BC, which was completed in the third quarter of 2012, and Deli Chef's new sandwich production facility in Laval, QC, which was completed at the end of the second quarter of 2012.
Foodservice's gross margin for the first quarter of 2013 as compared to the first quarter of 2012 remained relatively stable.
Retail's SG&A in the first quarter of 2013 as compared to the first quarter of 2012 decreased by $1.0 million due to the rationalization of NDSD's distribution network (see Restructuring Costs). This decrease was partially offset by increased selling and marketing costs associated with Retail's organic sales growth (see Revenue).
Foodservice's SG&A in the first quarter of 2013 as compared to the first quarter of 2012 increased by $0.5 million due to: (i) higher variable selling costs associated with Foodservice's organic sales growth (see Revenue); and (ii) increased costs associated with the development of the infrastructure needed to accelerate the growth of its seafood based initiatives.
The Company's Adjusted EBITDA for the first quarter of 2013 as compared to the first quarter of 2012 increased by $1.2 million or 10.0% to $12.8 million primarily due to: (i) a significant improvement in the performance of Centennial Foodservice. This was driven by a variety of differentiation based selling initiatives as well as the success of its new fresh burger production facility; (ii) solid organic growth across a number of the Company's businesses; and (iii) the stabilization of the Company's convenience store focused businesses, which include NDSD (see Restructuring Costs).
These increases were partially offset by: (i) temporary production inefficiencies at SK Food Group's Reno, NV plant due to a combination of the launch of new sandwich wraps for two large international customers in the fourth quarter of 2012 and the installation of several new pieces of equipment during the first quarter of 2013; and (ii) a decrease in the contribution margins generated by Stuyver's and Deli Chef due to increased overhead costs associated with their respective new plants, both of which were completed in 2012.
Looking forward (see Forward Looking Statements) the Company expects its Adjusted EBITDA to be favourably impacted by the following:
The Company is not, however, at this time providing specific guidance on its projected Adjusted EBITDA for 2013 due to uncertainties associated with timing and impact of the above outlined items as well as the restructuring of NDSD's DSD network.
The Company expects (see Forward Looking Statements) both the restructuring of NDSD's DSD network and the reconfiguration of its deli meats production to be substantially completed early in the third quarter of 2013 at which time it will look to resume providing guidance on its projected Adjusted EBITDA.
Interest
The Company's interest and other financing costs for the first quarter of 2013 was relatively consistent with the first quarter of 2012 despite the increase in the Company's funded due to the increase in funded debt being primarily the result of the acquisition of Freybe which occurred at the end of the quarter.
Restructuring Costs
Restructuring costs consist of costs associated with the significant restructuring of one or more of the Company's businesses. During the first quarter of 2013 the Company incurred $1.3 million in restructuring costs consisting of:
FORWARD LOOKING STATEMENTS
This discussion and analysis contains forward looking statements with respect to the Company, including its business operations, strategy and financial performance and condition. These statements generally can be identified by the use of forward looking words such as "may", "could", "should", "would", "will", "expect", "intend", "plan", "estimate", "project", "anticipate", "believe" or "continue", or the negative thereof or similar variations.
Although management believes that the expectations reflected in such forward looking statements are reasonable and represent the Company's internal expectations and belief as of May 8, 2013, such statements involve unknown risks and uncertainties beyond the Company's control which may cause its actual performance and results in future periods to differ materially from any estimates or projections of future performance or results expressed or implied by such forward looking statements.
Factors that could cause actual results to differ materially from the Company's expectations include, among other things: (i) seasonal and/or weather related fluctuations in the Company's sales; (ii) changes in consumer discretionary spending resulting from changes in economic conditions and/or general consumer confidence levels; (iii) changes in the cost of raw materials used in the production of the Company's products; (iv) changes in the cost of products sourced from third party manufacturers and sold through the Company's proprietary distribution networks; (v) risks associated with the Company's conversion from a publicly traded income trust to a publicly traded corporation, including related changes in Canada's income tax laws; (vi) changes in the Company's relationships with its larger customers; (vii) potential liabilities and expenses resulting from defects in the Company's products; (viii) changes in consumer food product preferences; (ix) competition from other food manufacturers and distributors; (x) execution risk associated with the Company's growth initiatives; (xi) risks associated with the Company's business acquisition strategies; and (xii) new government regulations affecting the Company's business and operations. Details on these risk factors as well as other factors can be found in the Company's 2012 MD&A, which is filed electronically through SEDAR and is available online at .
Unless otherwise indicated, the forward looking information in this document is made as of May 8, 2013 and, except as required by applicable law, will not be publicly updated or revised. This cautionary statement expressly qualifies the forward looking information in this document.
Contacts:
Premium Brands Holdings Corporation
George Paleologou
President and CEO
(604) 656-3100
Premium Brands Holdings Corporation
Will Kalutycz
CFO
(604) 656-3100
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Datum: 09.05.2013 - 05:00 Uhr
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