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Premium Brands Holdings Corporation Announces Record 2011 Second Quarter Sales and EBITDA

07:00 EDT Thursday, August 04, 2011

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Aug. 4, 2011) - Premium Brands Holdings Corporation (TSX:PBH), a leading producer, marketer and distributor of branded specialty food products, announced today its results for the second quarter of 2011.

HIGHLIGHTS

  • Revenue for the quarter increased by 46.0% or $57.9 million to a record $183.8 million as compared to $125.9 million in the second quarter of 2010.
  • Record EBITDA for the quarter of $13.7 million representing a 22.5% increase as compared to $11.2 million in the second quarter of 2010.
  • Earnings and earnings per share for the quarter of $4.5 million and $0.24 per share, respectively, as compared to $5.3 million and $0.30 per share, respectively, in the second quarter of 2010. Included in the Company's earnings for the second quarter of 2011 were $1.6 million or $0.09 per share in restructuring costs associated primarily with its recently acquired Deli Chef business.
  • Declared a quarterly dividend of $5.4 million or $0.294 per share.
  • Rolling twelve months free cash flow of $32.9 million resulting in a dividend to free cash flow ratio of 64.8%.
  • Record Retail segment sales and EBITDA for the quarter of $92.3 million and $9.0 million, respectively, as compared to $57.9 million and $7.4 million, respectively, in the second quarter of 2010.
  • Record Foodservice segment sales and EBITDA for the quarter of $91.5 million and $6.4 million, respectively, as compared to $68.0 million and $5.2 million, respectively, in the second quarter of 2010.
  • The acquisition of an additional 25.7% interest in SJ Irvine Fine Foods Ltd. (SJ) bringing the Company's total interest in SJ to 50.7% and resulting in it acquiring control of SJ. SJ, which started operations in January 2008, manufactures high quality processed meats for the foodservice and retail industries out of a modern 40,000 square foot facility in Saskatoon, SK.

SUMMARY FINANCIAL INFORMATION

(In thousands of dollars except per share amounts) 13 Weeks Ended 26 Weeks Ended
Jun 25, Jun 26, Jun 25, Jun 26,
2011 2010 2011 2010
Revenue 183,849 125,929 337,947 235,606
EBITDA 13,716 11,199 22,932 18,364
Earnings 4,474 5,311 5,477 6,298
EPS 0.24 0.30 0.29 0.35

"Even while very high commodity input costs, unusually poor weather and, to a lessening extent, economic headwinds, continued to impact our industry, our business still generated record sales and EBITDA," said Mr. George Paleologou, President and CEO. "Our consistent results, despite the challenging environment, reflect the diversity of our portfolio of businesses and the strength of our differentiation based business strategies.

"Looking forward, we are bullish on our expected performance for the balance of 2011. This is supported by the positive momentum that many of our businesses experienced during the latter part of the quarter. Furthermore, on a more global basis, we are also seeing continued improvement in the overall economy and some stabilization in the cost of many of the input commodities that have been impacting our margins.

"We are also pleased to report that during the quarter we commissioned a new burger manufacturing facility in Calgary, Alberta and completed the acquisition of a further 25.7% interest in SJ Irvine Fine Foods bringing our total interest in SJ to 50.7%. In addition, we made significant progress in the turnaround of our recently acquired Deli Chef business and remain confident that it will achieve profitability in 2011 and will contribute positively to our earnings in 2012.

"In terms of future business acquisitions, we are continuing to pursue a number of promising opportunities and fully expect to add to the seven transactions we have completed since the beginning of 2010," stated 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, Washington State and Nevada. The Company services over 26,000 customers and its family of brands and businesses include Grimm's, Harvest, McSweeney's, Bread Garden Express, Hygaard, Hempler's, Quality Fast Foods, Gloria's Best of Fresh, Harlan Fairbanks, Creekside Bakehouse, Centennial Foodservice, B&C Foods, Shahir, Duso's Fine Foods, Maximum Seafood, SK Food Group, OvenPride, Hub City Fisheries, Audrey's, Deli Chef and Hamish & Enzo.

RESULTS OF OPERATIONS

Revenue

(in thousands of dollars except percentages)
13 weeks % 13 weeks % 26 weeks % 26 weeks %
ended ended ended ended
Jun 25, Jun 26, Jun 25, Jun 26,
2011 2010 2011 2010
Revenue by segment:
Retail 92,301 50.2% 57,880 46.0% 171,002 50.6% 109,805 46.6%
Foodservice 91,548 49.8% 68,049 54.0% 166,945 49.4% 125,801 53.4%
Consolidated 183,849 100.0% 125,929 100.0% 337,947 100.0% 235,606 100.0%

Retail's revenue for the second quarter of 2011 as compared to the second quarter of 2010 increased by $34.4 million or 59.5% due to: (i) the acquisitions of SK Food Group in the fourth quarter of 2010, Deli Chef in the first quarter of 2011 and SJ in the second quarter of 2011 which resulted in $32.6 million in incremental sales; and (ii) organic growth across a broad range of products and customers of $1.8 million representing an organic growth rate of approximately 3.1%.

Retail's organic growth for the quarter, which was below the Company's targeted range of 6% to 8%, was impacted by: (i) extremely poor weather across western Canada that resulted in lower sales of barbeque focused products; and (ii) a $1.4 million decrease in sales to convenience stores due to reduced consumer spending in this channel that was the result of a variety of factors, including the poor weather in western Canada and record high gas prices. The effect of these factors was partially offset by $2.7 million in incremental sales resulting from Easter occurring in the second quarter of 2011 as compared to the first quarter in 2010.

Retail's revenue for the first two quarters of 2011 increased by $61.2 million or 55.7% as compared to the first two quarters of 2010 primarily due to the acquisitions of Duso's and SK Food Group in 2010 and Deli Chef and SJ in 2011, which resulted in incremental sales of $65.0 million. These incremental sales were partially offset by: (i) lower sales of barbeque focused products due to extremely poor weather across western Canada for most of the two quarters; (ii) a $1.9 million decrease in revenue due to one-time sales in 2010 resulting from the Company's involvement with the 2010 Vancouver Winter Olympics; and (iii) a $2.4 million decrease in sales to convenience stores due to reduced consumer spending in this channel.

Looking forward (see Forward Looking Statements), assuming a return to normal weather conditions, Retail expects its organic growth rate, excluding the impact of the convenience store channel, to continue to improve in the latter half of 2011. In terms of its sales to the convenience store channel, Retail is working on a number of initiatives to address the impact that general industry contraction is having on both its sales and profitability. These include working with its convenience store customers to develop new foodservice product programs that will better position them to compete with quick serve restaurants, and exploring new strategic relationships with other distributors servicing this channel.

Foodservice's revenue for the second quarter of 2011 as compared to the second quarter of 2010 increased by $23.5 million or 34.5% due to: (i) the acquisitions of Maximum Seafood in the third quarter of 2010 and Hub City Fisheries in the fourth quarter of 2010 which resulted in $20.7 million in incremental sales; (ii) increased sales to Foodservice's core hotel, restaurant and institutional customers of $1.7 million representing an organic growth rate of approximately 2.7%; and (iii) increased sales in Foodservice's Worldsource food brokerage business of $1.1 million.

Foodservice's revenue for the first two quarters of 2011 as compared to the first two quarters of 2010 increased by $41.1 million or 32.7% due to: (i) the acquisitions of Maximum Seafood and Hub City Fisheries in 2010 which resulted in $36.6 million in incremental sales; (ii) increased sales to Foodservice's core hotel, restaurant and institutional customers of $3.8 million representing an organic growth rate of approximately 3.3%; and (iii) increased sales in Foodservice's Worldsource food brokerage business of $1.4 million. These increases were partially offset by a $0.7 million decrease in revenue due to one-time sales in 2010 resulting from the Company's involvement with the 2010 Vancouver Winter Olympics.

Foodservice's organic growth rate for sales to its core hotel, restaurant and institutional customers in the first half of 2011 was lower than expected primarily due to extremely poor weather conditions across most of western Canada. Looking forward (see Forward Looking Statements), assuming a return to more normal weather conditions, Foodservice expects to achieve the Company's targeted organic growth rate of 6% to 8% for the latter half of 2011.

Gross Profit

(in thousands of dollars except percentages)
13 weeks % 13 weeks % 26 weeks % 26 weeks %
ended ended ended ended
Jun 25, Jun 26, Jun 25, Jun 26,
2011 2010 2011 2010
Gross profit by segment:
Retail 24,511 26.6% 17,995 31.1% 45,624 26.7% 34,512 31.4%
Foodservice 17,938 19.6% 14,161 20.8% 31,893 19.1% 26,029 20.7%
Consolidated 42,449 23.1% 32,156 25.5% 77,517 22.9% 60,541 25.7%

Retail's gross profit as a percentage of its revenue (gross margin) for the second quarter of 2011 as compared to the second quarter of 2010 decreased primarily due to: (i) the acquisitions of SK Food Group in 2010 and SJ in 2011 as these businesses generate lower average gross margins as compared to Retail's other businesses; and (ii) a number of Retail's businesses being impacted by rising costs for a variety of food and non-food input commodities, in general, and turkey products, in particular. Excluding SK Food Group and SJ, Retail's gross margin for the first quarter was 30.6%.

Retail's gross margin for the first two quarters of 2011 as compared to the first two quarters of 2010 decreased primarily due to the same factors impacting its gross margin in the second quarter. Excluding SK Food Group and SJ, Retail's gross margin for the first two quarters of 2011 was 30.4%.

Looking forward (see Forward Looking Statements), Retail expects to see continued improvement in its gross margin (after normalizing for the impact of acquisitions) in the latter half of 2011 based on: (i) during the second quarter of 2011 Retail initiated a number of product selling price increases that were not in effect for the full quarter; (ii) the implementation of a variety of margin enhancement initiatives, including new product development, packaging changes, and improving plant efficiencies; and (iii) the cost of many of the input commodities impacting its gross margins in the first half of 2011 are expected to remain relatively stable, albeit at historically high levels, over the last half of 2011.

Foodservice's gross margin for the second quarter of 2011 as compared to the second quarter of 2010 decreased primarily due to: (i) the acquisitions of Maximum Seafood and Hub City Fisheries as both of these businesses generate lower average gross margins as compared to Foodservice's other businesses; and (ii) rising input costs for a variety of food and non-food commodities, in general, and for beef-based products, in particular. Excluding Maximum Seafood and Hub City Fisheries, Foodservice's gross margin for the second quarter was 20.2%.

Foodservice's gross margin for the first two quarters of 2011 as compared to the first two quarters of 2010 decreased primarily due to the same factors that impacted its gross margin in the second quarter of 2011. Excluding Maximum Seafood and Hub City Fisheries, Foodservice's gross margin for the first two quarters of 2011 was 19.7%.

Looking forward (see Forward Looking Statements), Foodservice expects the cost of the input commodities impacting its gross margins to remain at historically high levels for the foreseeable future. It does, however, expect to see continued improvement in its margins in the latter half of 2011 due to: (i) the steady implementation of product selling price increases; (ii) improved operating efficiencies resulting from sales growth expected in 2011; and (iii) the introduction of a new hamburger patty program that utilizes the recently completed capacity expansion at its Calgary facility.

Selling, General and Administrative Expenses (SG&A)

(in thousands of dollars except percentages)
13 weeks % 13 weeks % 26 weeks % 26 weeks %
ended ended ended ended
Jun 25, Jun 26, Jun 25, Jun 26,
2011 2010 2011 2010
SG&A by segment:
Retail 15,508 16.8% 10,570 18.3% 29,095 17.0% 21,204 19.3%
Foodservice 11,586 12.7% 8,983 13.2% 22,397 13.4% 17,985 14.3%
Corporate 1,639 1,404 3,093 2,988
Consolidated 28,733 15.6% 20,957 16.6% 54,585 16.2% 42,177 17.9%

Retail's SG&A in the second quarter of 2011 as compared to the second quarter of 2010 increased by $4.9 million primarily due to: (i) the acquisitions of SK Food Group in 2010 and Deli Chef and SJ in 2011 which resulted in an increase in of $4.8 million; and (ii) higher freight and fuel costs resulting from fuel price increases. These increases were partially offset by lower variable selling costs, such as sales commissions, resulting from reduced convenience store channel sales.

Retail's SG&A for the first two quarters of 2011 as compared to the first two quarters of 2010 increased by $7.9 million primarily due to: (i) the acquisitions of Duso's and SK Food Group in 2010 and the acquisition of Deli Chef in 2011 which resulted in an increase in Retail's SG&A of $8.4 million; and (ii) higher freight and fuel costs resulting from fuel price increases. These increases were partially offset by: (i) a decrease in one-time costs associated with the Company's involvement in the 2010 Vancouver Winter Olympics in 2010; and (ii) lower variable selling costs, such as sales commissions, resulting from reduced convenience store channel sales.

Excluding acquisitions, Retail's SG&A as a percentage of revenue increased to 19.5% for the first two quarters of 2011 from 19.3% for the first two quarters of 2010 due to a variety of factors including higher freight and fuel costs.

Foodservice's SG&A in the second quarter of 2011 as compared to the second quarter of 2010 increased by $2.6 million primarily due to: (i) the acquisitions of Maximum Seafood and Hub City Fisheries in 2010 which accounted for $2.0 million of the increase; (ii) the recognition in the second quarter of 2010 of a $0.5 million gain on the sale of redundant property; and (iii) increases in a variety of costs including freight and fuel.

Foodservice's SG&A for the first two quarters of 2011 as compared to the first two quarters of 2010 increased by $4.4 million primarily due to: (i) the acquisitions of Maximum Seafood and Hub City Fisheries in 2010 which accounted for $3.6 million of the increase; (ii) the recognition in the second quarter of 2010 of a $0.5 million gain on the sale of redundant property; and (iii) increases in a variety of costs including freight and fuel.

Excluding acquisitions, Foodservice's SG&A as a percentage of revenue increased to 14.4% for the first two quarters of 2011 from 14.3% for the first two quarters of 2010 primarily due to the recognition in the second quarter of 2010 of a $0.5 million gain on the sale of redundant property.

EBITDA

(in thousands of dollars except percentages)
13 weeks % 13 weeks % 26 weeks % 26 weeks %
ended ended ended ended
Jun 25, Jun 26, Jun 25, Jun 26,
2011 2010 2011 2010
EBITDA by segment:
Retail 9,003 9.8% 7,426 12.8% 16,529 9.7% 13,308 12.1%
Foodservice 6,352 6.9% 5,177 7.6% 9,496 5.7% 8,044 6.4%
Corporate (1,639) (1,404) (3,093) (2,988)
Consolidated 13,716 7.5% 11,199 8.9% 22,932 6.8% 18,364 7.8%

The Company's EBITDA for the second quarter of 2011 as compared to the second quarter of 2010 increased primarily due to acquisitions partially offset by the impact of rising commodity costs on the selling margins of several of the Company's businesses.

The Company's EBITDA for the first two quarters of 2011 as compared to the first two quarters of 2010 increased primarily due to acquisitions partially offset by (i) one-time benefits in the first quarter of 2010 associated with the Company's involvement with the 2010 Vancouver Olympics; (ii) the impact of rising commodity costs on the selling margins of several of the Company's businesses; (iii) the recognition in the second quarter of 2010 of a $0.5 million gain on the sale of redundant property; and (iv) approximately $0.2 million in lost EBITDA associated with the Deli Chef business.

Interest

The increases in the Company's interest and other financing costs for both the second quarter of 2011 as compared to the second quarter of 2010, and the first two quarters of 2011 as compared to the first two quarters of 2010, were primarily due to: (i) an increase in the Company's net funded debt; and (ii) the repayment of lower cost senior debt through the issuance of convertible unsecured subordinated debentures at the beginning of 2011.

Change in Value of Puttable Interest in Subsidiaries

The increases in the Company's change in value of puttable interest in subsidiaries for both the second quarter of 2011 as compared to the second quarter of 2010, and the first two quarters of 2011 as compared to the first two quarters of 2010, were primarily due to: (i) increased accretion resulting from changes made in the latter half of 2010 to the assumptions used to value the put options; and (ii) incremental accretion relating to new put options resulting from business acquisitions made in the last two quarters of 2010 and in 2011.

Restructuring Costs

Restructuring costs consist of costs associated with a significant restructuring of one or more of the Company's businesses. In the first two quarters of 2011 the Company incurred $1.8 million in restructuring costs consisting primarily of: (i) $1.5 million relating to the Company's recently acquired Deli Chef business. Included in these costs are $1.1 million associated with the shutdown on April 29, 2011 of Deli Chef's sandwich plant in Gatineau, Quebec and $0.2 million for restructuring relating to Deli Chef's direct-to-store distribution network. As previously announced the Company expects to incur $6 million to $7 million in capital and restructuring costs relating to changes being made to the Deli Chef business; and (ii) $0.3 million in redundant production overhead associated with the expansion of the Company's artisan bread capacity.

Acquisition Bargain Purchase Gains

During the second quarter of 2011, the Company finalized its purchase price allocation for the acquisition of Deli Chef. In doing so, it determined that the fair value of the net identifiable assets acquired was $1.4 million greater than the consideration paid. Under IFRS this difference is recognized immediately as a bargain purchase gain.

Free Cash Flow

The following table provides a reconciliation of free cash flow to cash flow from operating activities:

(in thousands of dollars) 52 weeks 26 weeks 26 weeks Rolling
ended ended ended Four
Dec 25, 2010 Jun 26, 2010 Jun 25, 2011 Quarters
Cash flow from operating activities 32,796 14,456 1,695 20,035
Changes in non-cash working capital (2,837) (1,485) 12,303 10,951
Sale of redundant property 1,747 1,747 - -
Deferred revenue 1,207 1,178 1,118 1,147
Acquisition transaction costs 1,015 194 402 1,223
Restructuring costs - - 1,845 1,845
Capital maintenance expenditures (1,713) (718) (1,274) (2,269)
Free cash flow 32,215 15,372 16,089 32,932

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 August 3, 2011, 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; and (x) 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 2010 MD&A, which is filed electronically through SEDAR and is available online at www.sedar.com.

Unless otherwise indicated, the forward looking information in this document is made as of August 3, 2011 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.

Premium Brands Holdings Corporation

CONSOLIDATED BALANCE SHEETS

(Unaudited and in thousands)

Jun 25, Dec 25, Jun 26,
2011 2010 2010
Current assets:
Cash and cash equivalents $ 4,962 $ 868 $ 448
Accounts receivable 66,925 52,807 37,763
Other assets 189 194 157
Inventories 69,298 57,366 50,028
Prepaid expenses 8,458 3,421 3,117
149,832 114,656 91,513
Capital assets 92,263 76,183 63,686
Intangible assets 55,941 53,986 38,083
Goodwill 139,227 141,094 116,493
Other assets 1,304 2,705 2,270
Investment in associate - 415 679
Deferred income taxes 47,221 42,817 46,319
$ 485,788 $ 431,856 $ 359,043
Current liabilities:
Cheques outstanding $ 6,996 $ 1,670 $ 1,235
Bank indebtedness 10,050 6,827 4,673
Dividend payable 5,380 5,368 5,224
Accounts payable and accrued liabilities 70,634 53,700 44,798
Puttable interest in subsidiaries - 2,086 1,762
Current portion of long-term debt 13,201 19,822 8,814
Other financial liabilities 301 220 167
106,562 89,693 66,673
Puttable interest in subsidiaries 14,817 10,566 3,792
Deferred revenue 2,380 1,369 920
Pension obligation 928 827 899
Long-term debt 95,751 112,004 75,170
Convertible unsecured subordinated
debentures 90,701 37,306 37,046
311,139 251,765 184,500
Shareholders' equity:
Accumulated earnings 126,581 121,254 113,492
Accumulated dividends declared (119,514) (108,758) (98,167)
Retained earnings 7,067 12,496 15,325
Share capital 164,557 163,754 156,064
Equity portion of convertible
debentures 1,916 919 919
Reserves (260) 1,653 1,119
Non-controlling interest 1,369 1,269 1,116
174,649 180,091 174,543
$ 485,788 $ 431,856 $ 359,043

Premium Brands Holdings Corporation

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited and in thousands except per share amounts)

13 weeks 13 weeks 26 weeks 26 weeks
ended ended ended ended
Jun 25, Jun 26, Jun 25, Jun 26,
2011 2010 2011 2010
Revenue $ 183,849 $ 125,929 $ 337,947 $ 235,606
Cost of goods sold 141,400 93,773 260,430 175,065
Gross profit 42,449 32,156 77,517 60,541
Selling, general and administrative expenses 28,733 20,957 54,585 42,177
13,716 11,199 22,932 18,364
Depreciation of capital assets 2,643 1,927 5,027 3,851
Interest and other financing costs 3,483 2,377 6,649 4,717
Amortization of intangible and other assets 802 626 1,558 1,241
Amortization of financing costs 88 95 138 208
Acquisition transaction costs 211 114 402 194
Change in value of puttable interest in subsidiaries 673 - 1,188 -
Unrealized loss (gain) on foreign currency contracts (189) (441) 81 (285)
Restructuring costs 1,574 - 1,845 -
Acquisition bargain purchase gains (1,355) - (1,355) -
Equity loss in associate 95 65 277 212
Earnings before income taxes 5,691 6,436 7,122 8,226
Provision for income taxes
Current 62 3 1,019 14
Deferred 1,155 1,122 626 1,914
1,217 1,125 1,645 1,928
Earnings $ 4,474 $ 5,311 $ 5,477 $ 6,298
Earnings for the period attributable to:
Shareholders $ 4,405 $ 5,282 $ 5,327 $ 6,221
Non-controlling interest 69 29 150 77
$ 4,474 $ 5,311 $ 5,477 $ 6,298
Earnings per share
Basic and diluted $ 0.24 $ 0.30 $ 0.29 $ 0.35
Weighted average shares outstanding (in 000's)
Basic 18,194 17,541 18,148 17,550
Diluted 18,291 17,698 18,245 17,707

Premium Brands Holdings Corporation

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited and in thousands)

13 weeks 13 weeks 26 weeks 26 weeks
ended ended ended ended
Jun 25, Jun 26, Jun 25, Jun 26,
2011 2010 2011 2010
Cash flows from operating activities:
Earnings $ 4,474 $ 5,311 $ 5,477 $ 6,298
Items not involving cash:
Depreciation of capital assets 2,643 1,927 5,027 3,851
Amortization of intangible assets 800 624 1,555 1,238
Amortization of other assets 2 2 3 3
Amortization of financing costs 88 95 138 208
Change in value of puttable interest
in subsidiaries 673 - 1,188 -
Loss (gain) on sale of assets (2) (476) (2) (473)
Accrued interest income (2) (31) (26) (42)
Unrealized loss (gain) on foreign currency
contracts (189) (441) 81 (285)
Equity loss in associate 95 65 277 212
Deferred revenue (83) (256) (107) (256)
Accretion of convertible debentures 390 137 727 278
Accretion of long-term debt 186 25 389 25
Acquisition bargain purchase gains (1,355) - (1,355) -
Deferred income taxes 1,155 1,122 626 1,914
8,875 8,104 13,998 12,971
Change in non-cash working capital (4,094) (4,239) (12,303) 1,485
4,781 3,865 1,695 14,456
Cash flows from financing activities:
Long-term debt - net 2,313 1,952 (30,801) 83
Bank indebtedness and cheques outstanding 9,121 1,843 8,549 1,003
Convertible debentures – net of issuance
costs (note 6) - - 54,600 -
Dividends paid to shareholders (5,376) (5,204) (10,744) (10,384)
Deferred revenue 1,118 1,176 1,118 1,176
Other - - (18) (8)
7,176 (233) 22,704 (8,130)
Cash flows from investing activities:
Collection of notes receivable 5 12 10 15
Net proceeds from sales of assets 5 1,747 5 1,912
Capital asset additions (2,988) (773) (6,302) (1,842)
Business acquisitions (3,835) (4,359) (10,835) (5,949)
Repayment of share purchase loans 21 21 42 42
Payments to shareholders of non-wholly
owned subsidiaries (2,457) (466) (2,648) (581)
Promissory note from associate - - (300) -
Other (212) 52 (319) 47
(9,461) (3,766) (20,347) (6,356)
Increase (decrease) in cash and cash equivalents 2,496 (134) 4,052 (30)
Effects of exchange on cash and cash equivalents 56 (6) 42 9
Cash and cash equivalents - beginning of period 2,410 588 868 469
Cash and cash equivalents - end of period $ 4,962 $ 448 $ 4,962 $ 448
Interest and other financing costs paid $ 1,128 $ 1,532 $ 2,379 $ 3,048
Net income taxes paid $ 490 $ 11 $ 490 $ 11

FOR FURTHER INFORMATION PLEASE CONTACT:

George Paleologou
Premium Brands Holdings Corporation
President and CEO
(604) 656-3100
OR
Will Kalutycz
Premium Brands Holdings Corporation
CFO
(604) 656-3100
www.premiumbrandsholdings.com




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