MONTREAL, QUEBEC--(Marketwire - Aug. 4, 2009) - We are presenting the results for the first quarter of fiscal 2010, which ended on June 30, 2009.
- Net earnings for the quarter ended June 30, 2009 totalled $84.8 million, an increase of $1.8 million or 2.2% compared to $83.0 million for the same quarter last fiscal year.
- Earnings before interest, income taxes, depreciation and amortization (EBITDA(1)) amounted to $158.5 million, an increase of $8.2 million or 5.4% in comparison to $150.3 million for the same quarter last fiscal year.
- Revenues for the quarter ended June 30, 2009 amounted to $1.446 billion, an increase of $84.0 million or 6.2% in comparison to the $1.362 billion for the corresponding quarter last fiscal year.
- Basic and diluted EPS for the quarter ended June 30, 2009 was $0.41, as compared to $0.40 for the corresponding quarter last fiscal year.
(in millions of dollars
except per share amounts) For the 13-week periods ended
(unaudited) June 30, 2009 June 30, 2008 March 31, 2009
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Revenues $ 1,446.4 $ 1,361.9 $ 1,460.4
EBITDA 158.5 150.3 141.9
Net earnings 84.8 83.0 69.2
Earnings per share
Basic $ 0.41 $ 0.40 $ 0.33
Diluted $ 0.41 $ 0.40 $ 0.33
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(1)Measurement of results not in accordance with Generally Accepted
Accounting Principles
The Company assesses its financial performance based on its EBITDA,
this being earnings before interest, income taxes, depreciation and
amortization. EBITDA is not a measurement of performance as defined by
generally accepted accounting principles in Canada, and consequently may
not be comparable to similar measurements presented by other companies.
(2)"Average block market" is the average daily price of a 40 pound block
of cheddar traded on the Chicago Mercantile Exchange (CME), used as
the base price for cheese.
SELECTED QUARTERLY FINANCIAL INFORMATION
(in millions of dollars except per share amounts)
Fiscal years 2010 2009
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Q1 Q4 Q3 Q2 Q1
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Revenues $ 1,446.4 $ 1,460.4 $ 1,517.5 $ 1,453.5 $ 1,361.9
EBITDA 158.5 141.9 125.7 129.9 150.3
Net earnings 84.8 69.2 57.8 69.0 83.0
Earnings per share
Basic $ 0.41 $ 0.33 $ 0.28 $ 0.34 $ 0.40
Diluted $ 0.41 $ 0.33 $ 0.28 $ 0.33 $ 0.40
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(in millions of dollars)
Fiscal years 2008
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Q4 Q3 Q2
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Revenues $ 1,266.1 $ 1,277.0 $ 1,289.0
EBITDA 137.5 137.0 124.1
Net earnings 75.2 82.0 62.5
Earnings per share
Basic $ 0.37 $ 0.40 $ 0.30
Diluted $ 0.36 $ 0.39 $ 0.30
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Selected factors positively (negatively) affecting EBITDA(1)
(in millions of dollars)
Fiscal years 2010 2009
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Q1 Q4 Q3 Q2
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Market factors(2) (30.0) (27.0) (12.9) (8.0)
US currency exchange 6.0 7.0 7.0 -
Inventory write-down - (2.4) (18.5) -
Plant closure costs - - (2.0) -
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(1) as compared to same quarter of previous fiscal year.
(2) Market factors include the market pricing impact related to sales of
dairy ingredients, the average block market per pound of cheese and
its effect on the absorption of fixed costs and on the realization of
inventories as well as the effect of the relationship between the
average block market per pound of cheese and the cost of milk as raw
material.
Issued as at
Authorized July 29, 2009 June 30, 2009 March 31, 2009
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Common shares Unlimited 206,980,405 206,934,445 207,087,283
Preferred shares Unlimited - - -
Stock options 11,055,041 11,103,862 9,128,841
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(in thousands of dollars)
June 30, 2009
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Long-term debt Minimum lease Total
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Less than 1 year $ 197,710 $ 12,607 $ 210,317
1-2 years - 9,618 9,618
2-3 years - 8,311 8,311
3-4 years - 6,945 6,945
4-5 years 110,000 7,434 117,437
Subsequent years 278,150 11,796 289,946
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$ 585,860 $ 56,711 $ 642,571
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March 31, 2009
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Long-term debt Minimum lease Total
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Less than 1 year $ 214,421 $ 13,769 $ 228,190
1-2 years 200,000 10,042 210,042
2-3 years 140,000 8,831 148,831
3-4 years - 7,251 7,251
4-5 years - 6,213 6,213
Subsequent years 63,065 11,360 74,425
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$ 617,486 $ 57,466 $ 674,952
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(in millions of dollars)
Fiscal years 2010 2009
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Q1 Q4 Q3 Q2 Q1
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Revenues $ 945.7 $ 904.3 $ 854.1 $ 810.1 $ 755.0
EBITDA 112.5 98.3 86.7 94.9 99.0
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Fiscal years 2008
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Q4 Q3 Q2
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Revenues $ 746.2 $ 754.8 $ 743.2
EBITDA 94.2 95.6 84.6
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Selected factors positively (negatively) affecting EBITDA(1)
(in millions of dollars)
Fiscal years 2010 2009
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Q1 Q4 Q3 Q2
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Market factors(2) (2.0) (4.0) (6.0) (6.0)
Inventory write-down - (1.0) (7.4) -
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(1)as compared to same quarter of previous fiscal year.
(2)Market factors include the international market pricing impact
related to sales of dairy ingredients.
(in millions of dollars)
Fiscal years 2010 2009
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Q1 Q4 Q3 Q2 Q1
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Revenues $ 458.6 $ 517.0 $ 621.6 $ 601.5 $ 564.5
EBITDA 41.3 39.1 35.7 31.1 46.0
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Fiscal years 2008
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Q4 Q3 Q2
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Revenues $ 481.8 $ 480.2 $ 502.8
EBITDA 40.2 37.2 34.1
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Selected factors positively (negatively) affecting EBITDA(1)
(in millions of dollars)
Fiscal years 2010 2009
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Q1 Q4 Q3 Q2
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Market factors(2) (28.0) (23.0) (6.9) (2.0)
US currency exchange 6.0 7.0 7.0 -
Inventory write-down - (1.4) (11.1) -
Plant closure costs - - (2.0) -
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(1)as compared to same quarter of previous fiscal year.
(2)Market factors include the average block market per pound of cheese
and its effect on the absorption of fixed costs and on the realization
of inventories as well as the effect of the relationship between the
average block market per pound of cheese and the cost of milk as raw
material as well as market pricing impact related to sales of dairy
ingredients.
Other pertinent information
(in US dollars except for average exchange rate)
Fiscal years 2010 2009
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Q1 Q4 Q3 Q2 Q1
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Average block market per
pound of cheese $ 1.189 $ 1.203 $ 1.788 $ 1.864 $ 1.978
Closing block price(1) per
pound of cheese $ 1.115 $ 1.290 $ 1.133 $ 1.805 $ 1.925
Whey powder market price(2)
per pound $ 0.270 $ 0.160 $ 0.160 $ 0.260 $ 0.280
Spread(3) $ 0.176 $ 0.196 $ 0.198 $ 0.146 $ 0.168
US average exchange rate
to Canadian dollar(4) 1.172 1.254 1.205 1.043 1.011
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(1)Closing block price is the price of a 40 pound block of Cheddar traded
on the Chicago Mercantile Exchange (CME) on the last business day of
each quarter.
(2)Whey powder market price is based on Dairy Market News published
information.
(3)Spread is the average block price per pound of cheese less the result
of the average cost per hundredweight of Class III and/or Class IV milk
price divided by 10.
(4)Based on Bank of Canada published information.
(in millions of dollars)
Fiscal years 2010 2009
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Q1 Q4 Q3 Q2 Q1
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Revenues $ 42.2 $ 39.0 $ 41.7 $ 42.0 $ 42.4
EBITDA 4.6 4.5 3.2 4.0 5.3
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Fiscal years 2008
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Q4 Q3 Q2
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Revenues $ 38.1 $ 42.0 $ 42.9
EBITDA 3.1 4.2 5.4
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(signed) (signed)
Lino Saputo Lino A. Saputo, Jr.
Chairman of the Board President and
Chief Executive Officer
August 4, 2009
NOTICE
The consolidated financial statements of Saputo Inc. for the three-month
periods ended June 30, 2009 and 2008 have not been reviewed by an external
auditor.
CONSOLIDATED STATEMENTS OF EARNINGS
(in thousands of dollars, except per share amounts)
(unaudited)
For the three-month periods
ended June 30
2009 2008
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Revenues $ 1,446,434 $ 1,361,910
Cost of sales, selling and administrative expenses 1,287,978 1,211,593
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Earnings before interest, depreciation,
amortization and income taxes 158,456 150,317
Depreciation and amortization (Note 5) 28,350 22,395
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Operating income 130,106 127,922
Interest on long-term debt 6,513 4,597
Other interest, net 1,531 2,188
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Earnings before income taxes 122,062 121,137
Income taxes 37,241 38,174
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Net earnings $ 84,821 $ 82,963
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Earnings per share (Note 10)
Net earnings
Basic $ 0.41 $ 0.40
Diluted $ 0.41 $ 0.40
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CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
(in thousands of dollars, except for common shares)
(unaudited)
For the three-month period ended June 30, 2009
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Share capital
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Accumulated
Other Common
Retained Comprehen- Shares (in
Earnings sive Income thousands) Amount
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Balance at beginning
of period $ 1,373,856 $ 16,219 207,087 $ 555,529
Comprenhensive
income:
Net income 84,821 - - -
Net change in
currency
translation of
financial
statements of
self-sustaining
foreign
operations - (73,718) - -
Losses on
derivative
financial
instruments
designated as
cash flow hedges,
net of tax - 1,263 - -
Dividends declared (28,971) - - -
Stock based
compensation (Note 11) - - - -
Shares issued under
stock option plans - - 177 2,618
Amount transferred from
contributed surplus to
share capital upon
exercise of options - - - 704
Excess tax benefit that
results from the
excess of the
deductible amount over
the compensation cost
recognized - - - -
Shares redeemed and
cancelled (7,084) - (329) (890)
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Balance at end of
period(1) $ 1,422,622 $(56,236) $ 206,935 $ 557,961
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Total
Contributed Shareholders'
Surplus Equity
----------------------------------------------
Balance at beginning $ 26,744 $ 1,972,348
of period
Comprenhensive
income:
Net income - 84,821
Net change in
currency
translation of
financial
statements
of self-sustaining
foreign operations - (73,718)
Losses on
derivative
financial
instruments
designated as
cash flow hedges,
net of tax - 1,263
-----------
Total comprehensive income 12,366
Dividends declared - (28,971)
Stock based
compensation (Note 11) 1,898 1,898
Shares issued under
stock option plans - 2,618
Amount transferred from
contributed surplus to
share capital upon
exercise of options (704) -
Excess tax benefit that
results from the
excess of the
deductible amount over
the compensation cost
recognized 26 26
Shares redeemed and
cancelled - (7,974)
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Balance at end of
period(1) $ 27,964 $ 1,952,311
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For the three-month period ended June 30, 2009
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Share capital
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Accumulated
Other Common
Retained Comprehen- Shares (in
Earnings sive Income thousands) Amount
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Balance at beginning
of period $ 1,206,568 $(146,414) 205,963 $ 536,921
Comprenhensive
income:
Net income 82,963 - - -
Net change in
currency
translation of
financial
statements
of self-sustaining
foreign operations - 3,060 - -
Dividends declared (24,772) - - -
Stock based
compensation (Note 11) - - - -
Shares issued under
stock option plans - - 469 6,972
Amount transferred from
contributed surplus to
share capital upon
exercise of options - - - 1,170
Excess tax benefit that
results from the
excess of the
deductible amount over
the compensation cost
recognized - - - -
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Balance at end of
period(2) $ 1,264,759 $(143,354) 206,432 $ 545,063
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Total
Contributed Shareholders'
Surplus Equity
----------------------------------------------
Balance at beginning
of period $ 22,085 $ 1,619,160
Comprenhensive
income:
Net income - 82,963
Net change in
currency
translation of
financial
statements
of self-sustaining
foreign operations - 3,060
-----------
Total comprehensive income 86,023
Dividends declared - (24,772)
Stock based
compensation (Note 11) 1,831 1,831
Shares issued under
stock option plans - 6,972
Amount transferred from
contributed surplus to
share capital upon
exercise of options (1,170) -
Excess tax benefit that
results from the
excess of the
deductible amount over
the compensation cost
recognized 386 386
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Balance at end of
period(2) $ 23,132 $ 1,689,600
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(1) Retained Earnings and Accumulated Other Comprehensive Income Total is
$ 1,366,386.
(2) Retained Earnings and Accumulated Other Comprehensive Income Total is
$ 1,121,405.
CONSOLIDATED BALANCE SHEETS
(in thousands of dollars)
June 30, March 31,
2009 2009
(unaudited) (audited)
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ASSETS
Current assets
Cash and cash equivalents $ 36,650 $ 43,884
Receivables 412,078 427,227
Inventories (Note 4) 573,976 583,594
Income taxes 8,859 9,585
Future income taxes 22,332 23,881
Prepaid expenses and other assets 28,426 37,501
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1,082,321 1,125,672
Portfolio investment 41,343 41,343
Fixed assets (Note 5) 1,098,569 1,149,662
Goodwill 735,210 760,283
Trademarks and other intangibles 323,922 327,516
Other assets (Note 6) 87,953 88,326
Future income taxes 7,044 6,301
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$ 3,376,362 $ 3,499,103
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LIABILITIES
Current liabilities
Bank loans (Note 7) $ 71,442 $ 139,399
Accounts payable and accrued liabilities 473,599 484,866
Dividend payable 28,971 -
Share purchase payable 7,974 -
Income taxes 92,251 113,910
Future income taxes 5,336 6,348
Current portion of long-term debt (Note 8) 197,710 214,421
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877,283 958,944
Long-term debt (Note 8) 388,150 403,065
Other liabilities 15,518 22,180
Future income taxes 143,100 142,566
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1,424,051 1,526,755
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SHAREHOLDERS' EQUITY 1,952,311 1,972,348
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$ 3,376,362 $ 3,499,103
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CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands of dollars)
(unaudited)
For the three-month periods
ended June 30
2009 2008
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Cash flows related to the following activities:
Operating
Net earnings $ 84,821 $ 82,963
Items not affecting cash and cash equivalents
Stock based compensation 1,898 1,831
Depreciation and amortization 28,350 22,395
Gain on disposal of fixed assets (97) (3,058)
Future income taxes 4,227 6,445
Deferred share units 574 360
Funding of employee plans in excess of costs (1,190) (503)
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118,583 110,433
Changes in non-cash operating working capital items (16,309) (38,447)
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102,274 71,986
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Investing
Business acquisition (Note 12) - (160,603)
Additions to fixed assets (26,277) (24,802)
Proceeds on disposal of fixed assets 97 4,129
Other liabilities (6,321) (1,089)
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(32,501) (182,365)
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Financing
Bank loans (65,697) (35,992)
Proceeds from long-term debt 330,000 -
Repayment of long-term debt (340,000) -
Issuance of share capital 2,618 6,972
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(73,079) (29,020)
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Decrease in cash and cash equivalents (3,306) (139,399)
Effect of exchange rate changes on cash and
cash equivalents (3,928) 1,010
Cash and cash equivalents, beginning of period 43,884 165,710
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Cash and cash equivalents, end of period $ 36,650 $ 27,321
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Supplemental information
Interest paid $ 12,391 $ 10,590
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Income taxes paid $ 53,042 $ 53,342
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For the three-month periods
ended June 30
2009 2008
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Foreign exchange gain $ 210 $ 362
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3 - Accumulated Other Comprehensive Income (Loss)
June 30, March 31,
2009 2009
-----------------------------------------------------
Unrealized (losses) gains on
currency translation of
financial statements of foreign
self-sustaining operations $(56,236) $ 17,482
Losses on derivative financial
instruments designated as cash
flow hedges, net of tax - (1,263)
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Accumulated other comprehensive
income (loss) $(56,236) $ 16,219
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4 - Inventories
June 30, March 31,
2009 2009
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Finished goods $ 349,437 $ 368,456
Raw materials, work in process
and supplies 224,539 215,138
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$ 573,976 $ 583,594
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5 - Fixed Assets
June 30, 2009
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Accumulated Net book
Cost depreciation value
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Land $ 41,215 $ - $ 41,215
Buildings 398,346 91,333 307,013
Furniture,
machinery
and equipment 1,278,475 535,396 743,079
Rolling stock 12,722 7,767 4,955
Held for sale 2,307 - 2,307
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$ 1,733,065 $ 634,496 $ 1,098,569
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March 31, 2009
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Accumulated Net book
Cost depreciation value
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Land $ 42,243 $ - $ 42,243
Buildings 417,335 90,675 326,660
Furniture,
machinery
and equipment 1,321,468 548,676 772,792
Rolling stock 13,329 7,864 5,465
Held for sale 2,502 - 2,502
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$ 1,796,877 $ 647,215 $ 1,149,662
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June 30, March 31,
2009 2009
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Net accrued pension plan asset $ 61,518 $ 61,040
Taxes receivable 17,246 18,993
Other 9,189 8,293
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$ 87,953 $ 88,326
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Available for Use
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Canadian
Currency
Credit Facilities Maturity Equivalent Base Currency
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North America-US Currency December 2012 151,190 130,000 USD
North America-CDN Currency December 2012 430,310 370,000 USD
Canada May 2009 - -
Argentina Yearly 16,766 55,150 ARS
Argentina Yearly 54,487 46,850 USD
Germany Yearly 8,149 5,000 EUR
United Kingdom Yearly 13,385 7,000 BPS
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674,287
Amount classified as
long-term debt
Amount Drawn
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Credit Facilities June 30, 2009 March 31, 2009
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North America-US Currency $ 254 $ -
North America-CDN Currency 25,000 390,000
Canada - 40,000
Argentina - -
Argentina 39,325 47,927
Germany 1,257 1,472
United Kingdom 5,606 -
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71,442 479,399
Amount classified as
long-term debt - (340,000)
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$ 71,442 $ 139,399
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8 - Long-Term Debt
June 30, 2009 March 31, 2009
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Unsecured senior notes
8.12%, issued in November 1999 and
due in November 2009 (US$170,000,000) $ 197,710 $ 214,421
8.41%, issued in November 1999 and
due in November 2014 (US$50,000,000) 58,150 63,065
5.34%, issued in June 2009 and due
in June 2014 110,000 -
5.82%, issued in June 2009 and due in
June 2016 220,000 -
Bank loan - long-term portion (Note 7) - 340,000
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585,860 617,486
Current portion 197,710 214,421
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$ 388,150 $ 403,065
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Estimated principal repayments are as follows:
Less than 1 year $ 197,710 $ 214,421
1-2 years - 200,000
2-3 years - 140,000
3-4 years - -
4-5 years 110,000 -
Subsequent years 278,150 63,065
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$ 585,860 $ 617,486
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For the three-month periods
ended June 30
2009 2008
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Pension plans $ 4,832 $ 5,177
Other benefits plans 274 326
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$ 5,106 $ 5,503
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10 - Earnings per Share
For the three-month periods
ended June 30
2009 2008
---------------------------------------------------------
Net earnings $ 84,821 $ 82,963
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Weighted average number of
common shares outstanding 207,029,240 206,253,867
Dilutive options 1,068,528 2,959,978
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Weighted average dilutive
number of common shares
outstanding 208,097,768 209,213,845
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Basic earnings per share $ 0,41 $ 0,40
Diluted earnings per share $ 0,41 $ 0,40
June 30, 2009 June 30, 2008
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Weighted Weighted
Number of average Number of average
options exercise price options exercise price
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Balance at beginning
of period 9,128,841 $ 16.93 8,893,428 $ 16.52
Options granted 2,232,039 $ 21.40 1,634,393 $ 27.81
Options exercised (176,562) $ 14.83 (468,965) $ 14.87
Options cancelled (80,456) $ 18.90 (109,626) $ 18.69
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Balance at end of
period 11,103,862 $ 17.00 9,949,230 $ 16.59
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June 30, March 31,
2009 2009
---------------------------------------------------------
Risk-free interest rate: 1.9% 3.0%
Expected life of options: 5 years 5 years
Volatility: 19% 19%
Dividend rate: 2.0% 1.7%
June 30, 2008
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Assets acquired
Receivables $ 31,709
Inventories 22,096
Prepaid expenses 262
Fixed assets 70,840
Goodwill 62,878
Liabilities assumed
Accounts payable and
accrued liabilities 27,182
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$ 160,603
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Consideration
Cash paid $ 160,603
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13 - Segmented Information
For the three-month periods
ended June 30
2009 2008
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Revenues
Dairy Products
CEA(1) $ 945,650 $ 755,004
USA 458,600 564,511
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1,404,250 1,319,515
Grocery Products 42,184 42,395
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$ 1,446,434 $ 1,361,910
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Earnings before interest, depreciation
amortization and income taxes
Dairy Products
CEA $ 112,511 $ 99,044
USA 41,302 46,014
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153,813 145,058
Grocery Products 4,643 5,259
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$ 158,456 $ 150,317
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Depreciation and amortization
Dairy Products
CEA $ 13,222 $ 9,365
USA 13,038 11,163
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26,260 20,528
Grocery Products 2,090 1,867
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$ 28,350 $ 22,395
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Operating income
Dairy Products
CEA $ 99,289 $ 89,679
USA 28,264 34,851
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127,553 124,530
Grocery Products 2,553 3,392
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$ 130,106 $ 127,922
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Interest 8,044 6,785
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Earnings before income taxes 122,062 121,137
Income taxes 37,241 38,174
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Net earnings $ 84,821 $ 82,963
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(1) Canada, Europe and Argentina