Canada Bread: Reports Results for Q1/2010

Toronto / CA. (cb) Canada Bread Company Limited reported its financial results for the first quarter ended March 31, 2010. First quarter highlights include:
Adjusted Operating Earnings were 20,3 million CAD; 21,4 million CAD last year
Adjusted EPS were 0,55 CAD compared to 0,60 CAD last year
Basic EPS were 0,50 CAD compared to 0,59 CAD last year

Note: Adjusted Operating Earnings are defined as earnings from operations before restructuring and other related costs and other income. Adjusted Earnings per Share («Adjusted EPS») are defined as basic earnings per share adjusted for the impact of restructuring and other related costs, net of tax.

«Our first quarter results were impacted by transitory challenges in our Frozen Bakery business, including our North American and U.K. operations, which more than offset earnings growth in our Fresh Bakery business», said Richard Lan, President and CEO. «We are taking steps to reduce costs and build volumes, and as a result are seeing signs of improvement in these businesses. We are confident that these initiatives will drive better results».

Financial Overview

Sales for the first quarter declined to 381,9 million CAD from 413,1 million CAD in the prior year, due to the unfavourable impact of currency shifts and lower volumes in the Frozen Bakery segment. Adjusted Operating Earnings in the quarter decreased to 20,3 million CAD from 21,4 million CAD. The earnings decline in the first quarter mostly reflected the impact of lower volumes in the Frozen Bakery segment. This was partly offset by increased operating earnings in the Fresh Bakery segment. Net earnings declined to 12,7 million CAD (0,50 CAD per share) compared to 14,9 million CAD (0.59 CAD per share) last year. Adjusted EPS declined to 0,55 CAD from 0,60 CAD in the prior year.

Fresh Bakery

Includes fresh bakery products, including breads, rolls, bagels, sweet goods, prepared sandwiches, and fresh pasta and sauces sold to retail, foodservice and convenience channels. It includes national brands and many leading regional brands. First quarter sales of 257,2 million CAD were slightly lower than sales of 263,0 million CAD in the same period last year, mostly due to lower sales in the fresh sandwich business and increased trade investment. Adjusted Operating Earnings in the quarter increased to 20,7 million CAD from 12,8 million CAD.

Frozen Bakery

Includes frozen bakery products, including frozen par-baked bakery products, specialty and artisan breads, and bagels sold to retail, foodservice and convenience channels in North America and the U.K. It includes national brands. Sales declined to 124,7 million CAD from 150,1 million CAD last year, in part due to the unfavourable impact of a stronger Canadian dollar on the Company´s sales in the U.S. and U.K. and lower sales volume in both the North American and U.K. frozen bakery businesses. Adjusted Operating Earnings in the quarter were a loss of 0,4 million CAD compared to earnings of 8,5 million CAD last year, mostly due to the decline in sales volume. Management expects the volume decline in North America to be transitory as new business is gradually being secured and is taking steps to reduce the cost base in the Company´s U.K. operations until volumes improve.

Info: The complete statement is available here.