Lassonde Industries Inc. announces its Q1-2025 results

ROUGEMONT, Quebec, May 08, 2025 (GLOBE NEWSWIRE) -- Lassonde Industries Inc. (TSX: LAS.A) ("Lassonde” or the "Corporation”) today announced its financial results for the first quarter of 2025.

Financial Highlights:

Note: These are financial highlights only. Management's Discussion and Analysis, the unaudited interim condensed consolidated financial statements and notes thereto for the quarter ended March 29, 2025 are available on the SEDAR+ website at www.sedarplus.ca and on the website of Lassonde Industries Inc.

"Lassonde started 2025 on a strong footing, delivering solid sales and operating profit growth despite ongoing uncertainty,” said Vince Timpano, Chief Executive Officer of Lassonde Industries Inc. "When excluding the impact of Summer Garden and foreign exchange fluctuations, sales climbed a healthy 9.3%, driven by continued momentum in our U.S. volume build-back plan, and through selling price adjustments. Our Canadian brands also gained ground, supported by innovation, effective merchandising, and a strong 'Buy Canadian' sentiment that helped grow market share across most product lines, even as the industry volumes contracted. Looking ahead, we remain focused on executing our strategy, advancing key capacity expansion projects, and capitalizing on our broad and well-diversified product portfolio. With this foundation, Lassonde is well positioned to expand its presence in the North American food and beverage market.”

First Quarter Highlights:

• Sales of $699.7 million. Excluding a $21.3 million favourable foreign exchange impact and sales from Summer Garden², sales were up $53.0 million (9.3%) from the same quarter last year, essentially due to higher sales volumes in the U.S., and to the favourable impact of selling price adjustments in Canada.
• Gross profit of $183.2 million (26.2% of sales). Excluding a $2.6 million favourable foreign exchange impact and gross profit from Summer Garden², gross profit was up $8.0 million from the same quarter last year. This net increase results mainly from the following items:
  • A favourable impact of a change in the sales mix;
  • A favourable impact of an increase in U.S. sales volume; and
  • A $2.5 million accelerated depreciation expense related to business optimization.
• Operating profit of $42.7 million. Excluding the contribution from Summer Garden², operating profit was up $1.1 million from the same quarter last year. This net increase results mainly from the following items:
  • Higher gross profit;
  • $5.6 million increase in transportation costs incurred to deliver products to clients and in finished goods warehousing costs; and
  • A $3.3 million unfavourable foreign exchange impact that affected the conversion of the selling and administrative expenses of the U.S. entities into Canadian dollars.
• Excluding items impacting comparability but including Summer Garden², adjusted EBITDA¹ was $71.5 million (10.2% of sales), up $19.1 million from the same quarter last year.
• Profit attributable to the Corporation's shareholders of $24.5 million, resulting in EPS of $3.60, up 2.9% from the same quarter in 2024. Excluding the contribution from Summer Garden² and the impact of additional financial expenses, net of taxes, related to its acquisition, profit attributable to the Corporation's shareholders was down $1.7 million (or 7.2%) year over year. Excluding items impacting comparability, adjusted EPS¹ was $4.00, up 8.7% from the same quarter last year.
• As at March 29, 2025, the Corporation had total assets of $2,374.4 million versus $2,277.8 million as at December 31, 2024, a 4.2% increase arising mainly from an increase in inventories, property, plant and equipment and accounts receivable.
• As at March 29, 2025, long-term debt, including the current portion, stood at $612.5 million, representing a net debt to adjusted EBITDA¹ ratio of 1.99:1. This represents a $135.0 million increase from December 31, 2024, attributable to capital expenditures and working capital requirements.
• Operating activities used $60.1 million in cash compared to $11.3 million generated in the same quarter last year. Excluding cash flows from Summer Garden², operating activities used $77.7 million more than in the first quarter of 2024 on a comparable basis. This increase in cash outflows was essentially due to a change in non-cash operating working capital items, which used $58.1 million more cash than in the same quarter of 2024, mainly as a result of an increase in inventories, and to a $16.5 million unfavourable change in settlements of derivative instruments.
• Dividend of $1.10 per share, paid on March 14, 2025.

Outlook

Lassonde continues to expect that the largest factors impacting its performance in fiscal 2025 will be the financial health of consumers, the inflationary environment and market participants' reactions to these factors. Given the highly uncertain scale, breadth, timing, and duration of any trade conflict (including actual or threat on tariffs, duties, and other trade restrictions including countermeasures collectively referred to as "Tariffs"), and the rapidly evolving situation, this Outlook section has been prepared without considering the anticipated impact of the Tariffs as of the date of this press release. Any views on these Tariffs and their potential impact on Lassonde are isolated in a separate sub-section below. As a result, the Corporation is currently using the following assumptions for its fiscal year 2025:

Sales growth rate

• For 2025, barring any significant external shocks and excluding foreign exchange impacts, Lassonde expects a sales growth rate of approximately 10%, mainly driven by:
  • the impact of a full year of Summer Garden² results compared to only five months in 2024;
  • the run-rate effect of its existing and planned selling price adjustments; and
  • a sequential improvement in sales volume 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; and (ii) additional volume available following the deployment of its single serve line in North Carolina.
• The Corporation is closely monitoring the evolution of consumer food habits and demand elasticity for its products in a context of ongoing inflation in the cost of some of its key commodities. Additionally, the Corporation has recently noted an uptick in competitors' promotional activities, primarily within the U.S. market.

Key commodity and input costs

• Although inflation trends have recently abated for certain commodities, the costs of orange juice, orange concentrates, and apple concentrates are expected to remain volatile through 2025. The recent decreases in orange concentrate prices may provide some relief for purchases of such concentrate not covered by futures held by the Corporation. It is also closely monitoring the availability of pineapple concentrates and the impact on their costs.
• 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, after the exercise of existing foreign exchange forward contracts.

Expenses, including items impacting the comparability between the periods

• Due to the uncertainty surrounding Tariffs and their effects, transportation and warehousing costs in the market have risen and are expected to continue increasing, at least for the first half of 2025.
• The Corporation's operating expenses in 2025 will continue to reflect targeted investments to reinforce the innovation pipeline, distribution expansion, and strategic trade spending to support growth.
• 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 $15.0 million in 2025.

Depreciation and amortization

• The annual depreciation and amortization expense is estimated at $115.0 million. This includes: (i) the run rate effect of Summer Garden's² purchase price allocation, (ii) the commissioning of various capital projects undertaken in 2024, such as the new single-serve line at the North Carolina plant, and (iii) the accelerated depreciation of certain existing assets at the New Jersey plant, estimated at US$6.0 million for 2025, along with any new capital expenditures for this plant until its closure.

Effective tax rate

• Effective tax rate of about 26.0% for 2025.

Working capital

• The Corporation's Days Operating Working Capital¹ was slightly below its historical levels as of December 31, 2024. A certain increase in this metric should be anticipated throughout 2025. The Corporation remains focused on maintaining this ratio within historical ranges. 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, (iii) decisions to counter new potential supply chain disruptions, or (iv) support provided to the Corporation's manufacturing network optimization projects, including the timing of cash outflows related to certain capital expenditures.

Capital expenditures

• The Corporation's overall capital expenditures program for 2025 is estimated to reach up to 9.0% of its sales as it continues to deploy capital in support of its Strategy. This estimate depends on the rate of progress of certain large capital projects and on the evolution of the macroeconomic environment.
• The new capital assets will be financed, to the extent possible, using the Corporation's operating cash flows, although the Corporation may also turn to borrowing if interest rates and conditions prove advantageous.

Tariffs

• The Corporation sources raw materials globally, including from Canada, Mexico, and the U.S. It sells finished goods manufactured in Canada to the U.S. market, and to a lesser extent, sells finished goods manufactured in the U.S. to the Canadian market and as a result is exposed to potential Tariffs. In the current environment, the Corporation is actively evaluating its direct and indirect exposures, competitive position, and mitigation plans regarding the Tariffs, which include further price increases. Since several variables remain uncertain, including the duration and evolution of these Tariffs, currency fluctuations, interest rate trends, and their collective impact on the general economy, these factors may ultimately affect the timing and effectiveness of the Corporation's mitigation plans. As a result, Lassonde believes that sharing more information on its exposure would be premature. However, due to the time needed to implement mitigation measures, any impact is expected to be more heavily weighted in the initial months following the implementation of any Tariffs.

The above forward-looking statements have been prepared using the following key assumptions: the currently observed geopolitical situation and macroeconomic trends are maintained (subject to the factors set out above in a context of uncertainty related to trade conflicts and the ensuing implications, including employment, inflation, interest rates and the exchange rate between the U.S. dollar and the Canadian dollar); no further deterioration of consumer confidence and the continuity of recently observed favourable market trends for the Corporation's products; a stable exchange rate between the U.S. dollar and the Canadian dollar; the effectiveness of the Corporation's selling price adjustment initiatives; the limited impact of the Corporation's selling price adjustment initiatives on product demand; no material disruption to the Corporation's operations (including workforce availability) or to its supply chain; the continuity of observed trends in the competitive environment and the effectiveness of the Corporation's strategy to position itself competitively in the markets in which it operates; limited additional cost increases from suppliers; adequate availability of key inputs; the continuity of recently observed normalized trends in the throughput capacity of key U.S. plants; expected lead time for new manufacturing equipment; and adequate contractor or consultant availability to progress the Corporation's capital expenditures program. The Corporation cautions readers that the foregoing list of factors is not exhaustive. It should also be noted that some of these key assumptions, notably those related to the geopolitical situation and macroeconomic trends, are volatile and rapidly evolving. In preparing its outlook, the Corporation made assumptions that do not consider extraordinary events or circumstances beyond its control. The Corporation believes the expectations reflected in these forward-looking statements are reasonable, but no assurance can be given that these expectations will prove to be correct and such forward-looking statements should not be unduly relied upon. For additional information, refer to Section 2 - "Forward-Looking Statements” of the Corporation's MD&A for the first quarter of 2025.

Dividend

In accordance with the Corporation's dividend policy, the Board of Directors declared today a quarterly dividend of $1.10 per share, payable on June 13, 2025 to all registered holders of Class A and Class B shares on May 21, 2025. This dividend is an eligible dividend for Canadian tax purposes.

Conference Call to Discuss First Quarter 2025 Financial Results

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/14018. The replay of the webcast will remain available at the same link until midnight, May 16, 2025.

Financial Measures Not in Accordance With IFRS

The financial measures or ratios, further described below, do not constitute standardized financial measures or ratios in accordance with the financial reporting framework used to prepare the Corporation's financial statements. These non-IFRS measures should not be considered in isolation or as a substitute for financial measures prepared in accordance with IFRS. Comparing them to similar financial measures or ratios presented by other issuers may not be possible.

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 periods:

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.

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.

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.