Company update: Maple Leaf reports steady first quarter results
Maple Leaf Foods has reported its financial results for the first quarter ended March 31, 2011.
"Maple Leaf Foods delivered our eighth consecutive quarter of improved results, with a significant increase in profitability in our fresh and prepared meats businesses." said Michael H. McCain, President and CEO. "We are very pleased with the progress on both short and long-term initiatives. Our value creation plan is on track and contributed to earnings in the quarter. While the most significant challenge has been rising raw material costs, we are passing on price increases to protect our margins. Overall, this was another strong quarter of performance."
Sales for the first quarter of 2011 decreased 4% to $1,147.9 million compared to $1,191.5 million last year, primarily due to business divestitures. Excluding the effect of divestitures, and the impact of a stronger Canadian dollar, sales increased by 4%.
Adjusted Operating Earnings increased to $50.7 million compared to $31.5 million last year primarily due to improved performance in the Protein Group. Adjusted Earnings per Share increased to $0.18, including $2.4 million ($0.02 per share) related to tax benefits associated with a prior acquisition. Adjusted Earnings per Share for the prior period were $0.07.
Net earnings decreased to $10.5 million or $0.08 basic earnings per share in the first quarter compared to net earnings of $19.9 million or $0.14 basic earnings per share last year. Net earnings in the quarter included $26.1 million of pre-tax costs related to restructuring activities (2010: $4.0 million).
Rising input costs
Prepared meats margins strengthened as price increases were successfully implemented to manage the effect of rising input costs. Higher prices continued to result in some volume declines, consistent with the experience of others in the food industry. As food inflation trends continue in 2011, pricing will continue to be implemented as required to offset higher costs. New product innovation, including the Natural Selections(TM) line of sliced meat products, contributed to an improved sales mix and higher margins.
The Company is building on the success of this natural product offering, made with no artificial preservatives, with the launch of Schneiders(R) Country Naturals(TM) sliced meats across a broad range of prepared meat products.
Source: Maple Leaf Foods
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