-Net earnings at $45.0 million, down 22.8% for the quarter
-Net earnings at $154.4 million, down 10.4% since the beginning of the fiscal year
Montréal, February 8, 2006 – Saputo Inc. released today its financial results for the third quarter of fiscal 2006, which ended December 31, 2005.
- Net earnings totalled $45.0 million ($0.43 per share), down $13.3 million compared to the $58.3 million ($0.55 per share) for the same quarter in fiscal 2005. The previous fiscal year third quarter results benefited from a one-time tax adjustment of $3.5 million. During the third quarter of fiscal 2006, rationalization charges having an after-tax effect of $1.2 million were recorded.
- Consolidated revenues for the quarter ended December 31, 2005 totalled
$1.015 billion, an increase of $72.6 million compared to the $942.2 million for the corresponding period last year. This increase is attributed mostly to the Canadian and Other Dairy Products Sector, whose revenues increased by approximately $73 million compared to the same period last year, as a result of higher selling prices, higher sales volume, as well as the inclusion of Fromage Côté, acquired on April 18, 2005. The US Dairy Products Sector revenues decreased by approximately $4 million. A lower average block market per pound of cheese was the main factor behind the decrease, eroding approximately $22 million in revenues. The appreciation of the Canadian dollar also reduced revenues by approximately $12 million. These negative factors offset a revenue increase of approximately $30 million as a result of an 8.5% increase in sales volume compared to the same quarter last year. Revenues from the Grocery Products Sector increased by about $4 million compared to the same quarter last year due mostly to new business generated by the Bakery division.
- Consolidated EBITDA stood at $86.0 million, a decrease of $10.5 million compared to the $96.5 million for the same period last year. Higher EBITDA in the Canadian and Other Dairy Products Sector of approximately $2 million was offset by a decrease in EBITDA of approximately $13 million in the US Dairy Products Sector. The EBITDA of the Grocery Products Sector showed a slight increase compared to the same quarter last year.
- EBITDA for the Canadian and Other Dairy Products Sector totalled $64.2 million, an increase of 2.9% compared to $62.4 million for the same period last year. This increase is mainly due to increased sales volume from the fluid milk activities, along with improved operational efficiencies and additional EBITDA generated from the operations of Fromage Côté acquired last April. This increase was offset by the following factors: a reduction of cheese production, consistent with a goal of reducing inventory levels, negatively affected EBITDA, along with a rationalization charge of $1 million taken in the quarter in relation to the plant in Harrowsmith, Ontario, expected to be closed by June 28, 2006. In Argentina, EBITDA continued to show improvements, although negatively affected by changes in the export tax.
- EBITDA for the US Dairy Products Sector totalled $15.2 million, resulting in a
$12.7 million or 45.5% decrease compared to $27.9 million for the same period last year. This decrease is due to a lower block market per pound of cheese, a less favourable relationship between the average block market per pound of cheese and the cost of milk as raw material, the appreciation of the Canadian dollar, the continued increase in fuel and certain promotional costs, and rationalization charges of $0.8 million incurred for the closure of the plant in Whitehall, Pennsylvania. These factors offset EBITDA increases resulting from higher sales volume.
- EBITDA for the Grocery Products Sector stood at $6.6 million, an increase of
$0.5 million compared to the same quarter last year. Additional pension costs and increased marketing expenses together totalling approximately $1.7 million were offset by improved margins and additional EBITDA generated by overall higher sales volume.
- Cash generated by operating activities before changes in non-cash working capital items amounted to $66.7 million, a decrease of $5.4 million compared to $72.1 million for the same period last year.
- In the third quarter, the Company repurchased 843,300 common shares at prices ranging from $34.57 to $35.94 per share as part of the normal course issuer bid initiated on November 11, 2005.
For more information on the results of the third quarter of fiscal 2006, please read the attached interim report for the quarter ended December 31, 2005, which forms an integral part of this press release.
Dividends
The Board of Directors declared a dividend of $0.18 per share, payable on
March 24, 2006 to shareholders of record on March 13, 2006. This dividend relates to the quarter ended December 31, 2005.