Company Announcements

ROUGEMONT, QC , March 27, 2025 /CNW/ - Lassonde Industries Inc. (TSX: LAS.A) ("Lassonde" or the "Corporation") today announced its financial results for its fourth quarter and year ended December 31, 2024.

Financial Highlights:

"Lassonde delivered another quarter of strong profitable growth to conclude 2024 on a positive note," said Vince Timpano, Chief Executive Officer of Lassonde Industries Inc. "Solid fourth quarter results were driven by the contribution of Summer Garden, higher sales volume in our U.S. business resulting from our build-back plan as well as top-line growth in Canada driven by price adjustments to offset inflation related to orange juice and by product innovation launched throughout the year."

"We are entering 2025 with cautious optimism, as we continue to execute our strategic plan, including initiatives that will help reduce costs and improve capacity, most particularly with our announced plans for the construction of our new facility in New Jersey. We expect further progress in building back our U.S. volume, continued solid performance in Canada driven by our recently launched marketing campaign, as well as achieving synergies within our Specialty Food business in which we intend to reinvest to support long-term growth," added Mr. Timpano.

"Although the threat of tariffs in North America may impact consumer demand as well as the global supply chain, we have prepared measures to mitigate these effects to the extent possible. Driven by a strong product portfolio and a seasoned management team, Lassonde remains well positioned to lead through this period of uncertainty with a continued focus in driving sustained growth in 2025 and beyond," concluded Mr. Timpano.

Fourth Quarter Highlights:

• Sales of $738.1 million. Excluding a $9.1 million favourable foreign exchange impact and sales from the Acquired Entities[2], sales were up $64.5 million (10.7%) from the same quarter last year, essentially due to higher sales volumes, mainly in the U.S., and to the favourable impact of selling price adjustments in Canada, mainly for private label products.
• Gross profit of $192.9 million (26.1% of sales). Excluding gross profit from the Acquired Entities², gross profit was up $16.0 million from the same quarter last year. This net increase results mainly from the following items:
  • A favourable impact of an increase in sales volume;
  • A favourable impact of selling price adjustments to offset the higher costs of certain inputs, essentially for orange juice and orange concentrates;
  • A decrease in the Corporation's conversion costs, a portion of which results from operational improvements, including the impact of the ongoing insourcing of manufacturing for certain products sold by the Corporation's U.S. beverage business units;
  • $2.2 million in start-up costs related to key growth and optimization projects; and
  • $1.2 million in expenses related to a production interruption at the Corporation's North Carolina plant, resulting from Hurricane Helene.
• Operating profit of $43.0 million. Excluding the contribution from the Acquired Entities², operating profit was up $2.1 million from the same quarter last year. This net increase results mainly from the following items:
  • Higher gross profit;
  • $9.2 million increase in transportation costs incurred to deliver products to clients and in finished goods warehousing costs, essentially in the U.S.;
  • $0.6 million in losses on capital assets in 2024 compared to a $1.5 million gain in 2023 related to business optimization; and
  • $1.9 million increase in expenses related to the multi-year strategy ("Strategy") and the implementation of new key systems as the Corporation continues to invest in its deployment.
• Excluding items impacting comparability but including the Acquired Entities², adjusted EBITDA¹ was $79.6 million (10.8% of sales), up $27.0 million from the same quarter last year.
• Profit attributable to the Corporation's shareholders of $27.1 million, resulting in EPS of $3.97, up 29.0% from the same quarter in 2023. Excluding the contribution from the Acquired Entities² and the impact of additional financial expenses, net of taxes, related to the Summer Garden acquisition, profit attributable to the Corporation's shareholders was up $3.4 million (or 15.9%) year over year. Excluding items impacting comparability, adjusted EPS¹ was $5.13, up 63.4% from the same quarter last year.
• Operating activities generated $75.7 million in cash compared to $77.8 million generated in the same quarter last year. Excluding cash flows from Acquired Entities², operating activities generated $20.7 million less than in the fourth quarter of 2023 on a comparable basis. This decrease in cash inflows was essentially due to a change in non-cash operating working capital items, which generated $25.0 million less cash than in the same quarter of 2023, partly offset by a $9.8 million net withdrawal of certain excess amounts invested in its defined benefit pension plans.
• Dividend of $1.00 per share, paid on December 13, 2024.

Fiscal 2024 Highlights:

• Sales of $2,600.9 million. Excluding a $19.9 million favourable foreign exchange impact and sales from the Acquired Entities², the Corporation's sales were up $163.6 million (7.1%) from last year, mainly due to the favourable impact of selling price adjustments in Canada and an increase in the U.S. sales volume for both private label and branded products, partly offset by an unfavourable change in the U.S. sales mix, mainly for private label products.
• Gross profit of $698.1 million (26.8% of sales). Excluding a $4.7 million unfavourable foreign exchange impact and gross profit from the Acquired Entities², gross profit was up $77.4 million from last year. This net increase results mainly from the following items:
  • A favourable impact of selling price adjustments to offset the higher costs of certain inputs, essentially for orange juice and orange concentrates;
  • A decrease in the Corporation's conversion costs, a portion of which results from operational improvements, including the impact of the ongoing insourcing of manufacturing for certain products sold by the Corporation's U.S. beverage business units;
  • A favourable impact of an increase in sales volume;
  • $2.2 million in start-up costs related to key growth and optimization projects; and
  • $1.2 million in expenses related to a production interruption at the Corporation's North Carolina plant, resulting from Hurricane Helene.
• Operating profit of $174.7 million. Excluding the contribution from the Acquired Entities², operating profit was up $36.6 million from last year. This net increase results mainly from the impact of the following items:
  • Higher gross profit;
  • $19.0 million increase in finished goods warehousing costs and transportation costs incurred to deliver products to clients, essentially in the U.S.;
  • $10.1 million in costs related to the Summer Garden acquisition;
  • $3.2 million unfavourable foreign exchange impact that affected the conversion of the selling and administrative expenses of the U.S. entities into Canadian dollars;
  • $2.5 million net increase in other selling and administrative expenses;
  • $0.7 million in losses on capital assets in 2024 compared to a $1.0 million gain in 2023 related to business optimization; and
  • $1.3 million increase in expenses related to the Strategy and the implementation of new key systems as the Corporation continues to invest in its deployment.
• Excluding items impacting comparability but including the Acquired Entities², adjusted EBITDA¹ was $275.8 million (10.6% of sales), up $68.7 million from last year.
• Profit attributable to the Corporation's shareholders of $114.1 million, resulting in EPS of $16.73, up 30.4% from 2023. Excluding the contribution from the Acquired Entities² and the impact of additional financial expenses, net of taxes, related to the Summer Garden acquisition, the profit attributable to the Corporation's shareholders was up $30.4 million (or 34.5%) year over year. Excluding items impacting comparability, adjusted EPS¹ was $19.05, up 44.5% from last year.
• As at December 31, 2024, the Corporation had total assets of $2,277.8 million versus $1,665.7 million as at December 31, 2023, a 36.7% increase arising mainly from the Summer Garden assets of $408.4 million, an increase in property, plant and equipment as well as a higher foreign exchange conversion rate as at December 31, 2024. 
• As at December 31, 2024, long-term debt, including the current portion, stood at $477.5 million, representing a net debt to adjusted EBITDA¹ ratio of 1.63:1. Excluding $309.4 million in borrowings to finance the Summer Garden acquisition, this is down $42.4 million from December 31, 2023.
• Operating activities generated $233.9 million in cash compared to $224.9 million generated in the same period last year. Excluding cash flows from Acquired Entities², operating activities generated $12.8 million less than in 2023 on a comparable basis. This decrease in cash inflows was mainly due to a change in non-cash operating working capital items, which generated $43.1 million less cash than in 2023 and to a $22.2 million increase in net income tax paid, partly offset by a higher operating profit and a net $9.8 million withdrawal of certain excess amounts invested in the defined benefit pension plans.
• Total dividend of $4.00 per share, paid in 2024.

Outlook

Lassonde continues to expect that the largest factors impacting its performance in fiscal 2025 will be the financial health of consumers and the inflationary environment. 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 Garden 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; (ii) additional volume available following the deployment of its single serve line in North Carolina; and (iii) the overall stabilization of demand.
• 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 its key commodities.

Key commodity and input costs

• Lassonde has experienced substantial increases in input costs since 2021. 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. However, the recent surge in apple concentrate costs will result in a margin contraction during the first quarter, due to the lag between the rise in costs and subsequent pricing adjustments.
• 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.

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.
• As overall demand stabilizes, 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.
• During 2025, Lassonde plans to continue deploying its 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 depreciation and amortization expense is estimated at $115.0 million. This includes: (i) the run rate effect of Summer Garden's 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, excluding the impact on the tax rate of Diamond's results.

Working capital

• The Corporation's Days Operating Working Capital¹ is slightly below its historical levels as of December 31, 2024. A certain increase in this metric should be anticipated throughout 2025. In addition, this outlook might be further 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.

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 speculative. 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: currently observed geopolitical situation and macroeconomic trends, particularly in the context of uncertainties related to trade conflicts and the ensuing implications, including employment, inflation and interest rates; a stable exchange rate between the U.S. dollar and the Canadian dollar; the continuity of recently observed consumer behaviours and market trends for the Corporation's products; 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. 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 year ended December 31, 2024.

Conference Call to Discuss Fourth Quarter and Fiscal 2024 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/13922. A replay of the webcast will remain available at the same link until midnight, April 4, 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 the 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.

Days Operating Working Capital

Days operating working capital is a financial efficiency measure used by the Corporation to represent the number of days of sales tied up as operating working capital. To calculate this financial measure, operating working capital is divided by the last quarter's sales, as they are presented in this press release, and multiplied by 91 days. Operating working capital consists of the sum of trade accounts receivable, discounts receivable and inventories, less trade payables and accrued expenses and trade spending, as they are presented in the accompanying notes to the Corporation's consolidated financial statements.

About Lassonde

Headquartered in Canada and with operations across North America, Lassonde Industries Inc. is a leader in the food and beverage industry in North America. The Corporation develops, manufactures, and markets a wide range of national brand and private label products, including fruit juices and drinks, specialty food products, and fruit‑based snacks. Lassonde also manufactures and markets cranberry sauces as well as selected wines, ciders and other selected alcoholic beverages. Altogether, Lassonde distributes over 3,500 unique products in approximately 200 formats across shelf-stable, chilled, and frozen categories.

The Corporation's go-to-market strategy consists of (i) retail sales to food retailers and wholesalers such as supermarket chains, independent grocers, superstores, warehouse clubs, convenience stores, and major pharmacy chains and (ii) food service sales to restaurants, hotels, hospitals, schools, and wholesalers serving these institutions.

Lassonde operates 19 plants located in Canada and the United States through the expertise of over 2,900 full-time equivalent employees. To learn more, visit www.lassonde.com. 

Caution Concerning Forward-Looking Statements

This document contains "forward-looking information" and the Corporation's oral and written public communications that do not constitute historical fact may be deemed to be "forward-looking information" within the meaning of applicable Canadian securities law. These forward-looking statements include, but are not limited to, statements on the Corporation's objectives and goals and are based on current expectations, projections, beliefs, judgments, and assumptions based on information available at the time the applicable forward-looking statement was made and considering the Corporation's experience combined with its perception of historical trends.

Forward-looking statements are typically identified by words such as "anticipate", "continue", "estimate", "expect", "may", "will", "project", "should", "could", "would", "believe", "plan", "intend", "design", "target", "objective", "strategy", "likely", "potential", "outlook", "aim", "goal", and similar expressions suggesting future events or future performance in addition to the negative forms of these terms or any variations thereof. All statements other than statements of historical fact included in this document may constitute a forward-looking statement.

In this document, forward-looking statements include, but are not limited to, those set forth in the above "Outlook" section, which also presents some (but not all) of the key assumptions used in determining the forward-looking statements. Some of the forward-looking statements in this report, such as statements concerning sales volume and sales growth rate, key commodity and input costs, expenses, including items impacting the comparability between the periods, effective tax rate, working capital, and capital expenditures may be considered financial outlooks for the purposes of applicable Canadian securities regulations. These financial outlooks are presented to evaluate potential future earnings and anticipated future uses of cash flows and may not be appropriate for other purposes.

Various factors or assumptions are applied by the Corporation in elaborating the forward‑looking statements. These factors and assumptions are based on information currently available to the Corporation, including information obtained by the Corporation from third parties. Readers are cautioned that the assumptions considered by the Corporation to support these forward-looking statements may prove to be incorrect in whole or in part.

The significant factors that could cause actual results to differ materially from the conclusions, forecasts or projections reflected in the forward-looking statements contained herein include, among other things, risks associated with the following: deterioration of general macroeconomic conditions, including international conflicts, such as trade conflicts (including tariffs, duties and other trade restrictions), which can lead to negative impacts on the Corporation's suppliers, customers and operating costs; the availability of raw materials and packaging and related price variations (including the prices of orange juice and orange concentrates, key commodities for the Corporation, which have continued to trade above historical highs for the past several months); disruptions in or failures of the Corporation's information technology systems, as well as the development and performance of technology; cyber threats and other information-technology-related risks leading to business disruptions, confidentiality, data integrity, and business email compromise-related fraud; the successful deployment of the Corporation's multi-year strategy (defined in Section 4 - "Multi‑Year Strategy" of the Corporation's MD&A for the year ended December 31, 2024), including the successful execution of its key capital projects along with the materialization of the underlying expected benefits, and the Corporation's ability to effectively integrate any acquisitions; climate change and disasters causing higher operating costs and capital expenditures and reduced production output, or impacting the availability, quality or price volatility of key commodities sourced by the Corporation; loss of key suppliers or supplier concentration; changes made to laws and rules that affect the Corporation's activities, particularly in matters of tax, as well as the interpretation thereof, and new positions adopted by relevant authorities; the Corporation's ability to maintain strong sourcing and manufacturing platforms and efficient distribution channels; fluctuations in the prices of inbound and outbound freight, the impact of oil prices (and derivatives thereof) on the Corporation's direct and indirect costs along with the Corporation's ability to transfer those increases through higher prices or other means, if any, to its customers in competitive market conditions and considering demand elasticity; the scarcity of labour and the related impact on the hiring, training, developing, retaining and reliance of personnel together with their productivity, employment matters, compliance with employment laws across multiple jurisdictions, and the potential for work stoppages due to the non-renewal of collective bargaining agreements or other reasons; the successful deployment of the Corporation's health and safety programs in compliance with applicable laws and regulations; serious injuries or fatalities, which could have a material impact on the Corporation's business continuity and reputation and lead to compliance-related costs; disputes with significant suppliers; the increasing concentration of customers in the food industry, providing them with significant bargaining power, particularly on the Corporation's selling prices; the implementation, cost, and impact of environmental sustainability initiatives, as well as the cost of remediating environmental liabilities; the ability to adapt to changes and developments affecting the Corporation's industry, including customer preferences, tastes, and buying patterns, market conditions and the activities of competitors and customers; failure to maintain the quality and safety of the Corporation's products, which could result in product recalls and product liability claims for misbranded, adulterated, contaminated, or spoiled food products, along with reputational damage; risks related to fluctuations in interest rates, currency exchange rates, liquidity and credit, stock price and pension obligations; the incurrence of restructuring, disposal, or other related charges together with the recognition of impairment charges on goodwill or long_­‑lived assets; the sufficiency of insurance coverage; and the implications and outcome of potential legal actions, litigation or regulatory proceedings to which the Corporation may be a party. The Corporation cautions readers that the foregoing list of factors is not exhaustive.

The Corporation's ability to achieve its sustainability targets and goals is further subject to, among other factors, its ability to access and implement all technology necessary to achieve them as well as the development, deployment, and performance of technology, and environmental regulation. The Corporation's ability to achieve its environmental, social and governance ("ESG") risk commitments is further subject to, among other factors, its ability to leverage its supplier relationships.

The assumptions, expectations, and estimates involved in preparing forward-looking statements and risks and uncertainties that could cause actual results to differ materially from forward-looking statements are discussed in the Corporation's materials filed with the Canadian securities regulatory authorities, including information about risk factors that can be found in Section 21 - "Uncertainties and Principal Risk Factors" of the Corporation's MD&A for the year ended December 31, 2024. Readers should review this section in detail.

All forward-looking statements included herein speak only as of the date hereof. Unless required by law, the Corporation does not undertake any obligation to publicly update or revise forward-looking statements, whether as a result of new information, future events or otherwise. All forward-looking statements contained herein are wholly and expressly qualified by this cautionary statement.

SOURCE Lassonde Industries Inc.