This news release contains forward-looking information that is
based upon assumptions and is subject to risks and uncertainties as
indicated in the cautionary note contained elsewhere in this news
release.
Andrew Peller Limited (TSX:ADW.A)(TSX:ADW.B) (the "Company")
announced today continued strong operating and financial
performance for the three and nine months ended December 31,
2012.
FISCAL 2013 HIGHLIGHTS:
-- Sales up 4.4% on solid growth through majority of trade channels
-- Sales have increased in 41 of the last 43 quarters
-- Net earnings up 14.9% to $15.6 million or $1.12 per Class A Share
-- Launch of new brands to contribute to further organic growth
-- Peller Estates remains top-selling wine brand across Canada
-- Export sales bolstered by new business with Sunwing Vacations and
prestigious international awards for ice wine
"The third quarter remains our strongest period of the year due
to seasonal sales and we were very pleased to generate a solid 4.2%
predominantly organic growth in sales for the quarter compared to
last year," commented John Peller, President and CEO. "We expect to
see another record year of growth and profitability for the 2013
fiscal year and continued strong performance going forward."
Sales for the third quarter of fiscal 2013 rose 4.2% to $79.8
million from $76.6 million in the prior year. For the nine months
ended December 31, 2012 sales increased 4.4% to $225.6 million from
$216.0 million last year. For the nine-month period, the increases
in revenues are due primarily to the contribution from the
licensing agreement with the Wayne Gretzky winery effective
November 8, 2011, the acquisition of Cellar Craft that was
effective October 28, 2011 as well as solid organic growth arising
from new product introductions, particularly skinnygrape, increased
sales of premium blended and varietal table wine brands sold
through provincial liquor boards, growth in sales at the Company's
retail store network, and strong export sales.
Gross margin was 38.6% of sales in the third quarter and for the
first nine months of fiscal 2013 compared to 40.1% and 39.5%
respectively in the same periods last year. Gross margin percentage
was negatively affected by higher costs for wine purchased on
international markets in fiscal 2013 as well as increased price
competition in certain markets. The decrease in gross margin
percentage was partially offset by the positive impact of sales of
higher margin products and successful cost control initiatives to
reduce distribution, operating, and packaging expenses. During
fiscal 2013 the Company implemented programs to enhance a number of
supply chain and distribution contracts that it expects will
contribute to improved profitability over the long term. The
special levy implemented by the Ontario government on July 1, 2010
served to reduce sales and gross margin by approximately $1.5
million and $1.9 million in the first nine months of fiscal 2013
and fiscal 2012 respectively.
Selling and administrative expenses increased in the third
quarter and first nine months of fiscal 2013 due to an increase in
advertising and promotional initiatives across all trade channels
and an increase in consulting expenses incurred to implement cost
control and information technology initiatives. As a percentage of
sales, selling and administrative expenses for the nine months
ended December 31, 2012 were 25.1%, down marginally from 25.5% in
the prior year.
Interest expense has declined in fiscal 2013 compared to the
prior year due to a decrease in short and long-term interest rates
partially offset by higher debt levels.
The Company recorded a non-cash gain in the first nine months of
fiscal 2013 related to mark-to-market adjustments on an interest
rate swap and foreign exchange contracts aggregating approximately
$1.1 million compared to a loss of $0.3 million in the prior year.
The Company has elected not to apply hedge accounting and
accordingly these financial instruments are reflected in the
Company's financial statements at fair value each reporting period.
These instruments are considered to be effective economic hedges
and have enabled management to mitigate the volatility of changing
costs and interest rates.
Other income received in fiscal 2013 related to $0.5 million
recorded upon expropriation of a small part of the property that
surrounds the Company's Port Moody facility. The property is being
temporarily used while construction of a rapid transit project
takes place. Payments amounting to $2.0 million for the use of the
property were received in advance and were recorded as deferred
income. The amount received is being reported as other income over
the five-year term of the expropriation, which started on July 1,
2012. Other expenses in fiscal 2013 include a $0.3 million fair
value adjustment to vines. Other expenses in fiscal 2012 included a
$0.6 million fair value adjustment to vines and $0.1 million in
maintenance costs for the Company's Port Moody facility.
Net earnings excluding gains (losses) on derivative financial
instruments, other expenses, and the related income tax effect of
these items for the three and nine months ended December 31, 2012
were $6.3 million and $14.7 million, respectively compared to $6.3
million and $14.3 million in the same periods last year. Net
earnings for the third quarter of fiscal 2013 were $6.6 million or
$0.47 per Class A Share compared to $6.3 million or $0.46 per Class
A Share in the prior year. For the nine months ended December 31,
2012 net earnings were $15.6 million or $1.12 per Class A Share
compared to $13.6 million or $0.98 per Class A Share last year. The
third quarter of the Company's fiscal year is historically the
strongest due to seasonal sales during the period.
Strong Financial Position
Working capital at December 31, 2012 increased to $45.0 million
compared to $34.9 million at March 31, 2012. The change related to
a larger harvest of grapes due to warmer summer temperatures,
higher accounts receivable due to the seasonality of sales, and a
reduction in accounts payable and accrued charges. These amounts
were partially offset by an increase in bank indebtedness. The
Company's debt to equity ratio was 0.85:1 at December 31, 2012
compared to 0.87:1 at March 31, 2012. Shareholders' equity as at
December 31, 2012 was $131.0 million or $9.16 per common share
compared to $120.6 million or $8.43 per common share as at March
31, 2012. The increase in shareholders' equity is primarily due to
higher net earnings for the year partially offset by the payment of
dividends.
In the first nine months of fiscal 2013 the Company generated
cash from operating activities, after changes in non-cash working
capital items, of $6.7 million compared to $0.7 million in the
prior year. Cash flow from operating activities has increased in
fiscal 2013 due to strong earnings performance, the advance
payments received for the use of the Port Moody property, lower
income tax installments and a smaller increase in working capital
than in the prior year.
Recent Events
The Company is pleased to confirm that its popular Peller
Estates wines remained the top-selling brand in Provincial liquor
stores across Canada. In addition, the Company's Trius portfolio
stands as one of the top-three Vintner's Quality Alliance (VQA)
brands in the country, and its new Crush brand was among the top
new VQA product launches at the Liquor Control Board of Ontario
(LCBO).
The Company's strong export business will be augmented by new
revenues supplying all of Sunwing Vacations' flights to southern
holiday destinations from Canada. The Company estimates that
approximately 1.4 million glasses of Peller Estates wines will be
served on all Sunwing Vacation flights equaling approximately
284,000 bottles of wine served this season. The Canadian charter
airline operates daily flights to over 12 favourite sun
destinations including; Florida, Jamaica and Cuba.
In addition, the Company is pleased to announce that its Peller
Estates Icewines have received a number of prestigious awards at
international competitions, including Gold at the Icewine du Monde
2012 competition and Gold at the Decanter World Wine Awards held in
London, England. Judged by a panel of over 200 wine experts
including wine merchants, sommeliers, journalists, Masters of Wine
and Master Sommeliers, Peller Estates Vidal Icewine 2010 received
these awards in competition against wines from 54 countries. In
addition, at the Japan Wine Challenge, Peller Estates Vidal Icewine
2010 was awarded the coveted distinction of Best Sweet Wine in the
competition from more than 1,300 wines entered representing 27
countries.
"These prestigious awards are a testament to the quality of our
ice wines, and we expect this recognition will enhance our presence
both in Canada and in our export markets around the world," Mr.
Peller stated.
During fiscal 2013 the Company launched its new Verano wines
imported from Spain, as well as skinnygrape, Canada's first low
calorie wine. Thirty Bench's award-winning Riesling has been
included in the "Vintages Essentials Collection" at the LCBO, while
the Company's Red Rooster wines are now fully distributed and
available in all British Columbia markets. In addition, the Company
is now approaching the capability to harvest a full crop from its
300 acre vineyard that was recently planted in BC's Okanagan
Valley, increasing the Company's VQA grape production by 50% in the
Province.
Financial Highlights (Unaudited)
(Complete condensed consolidated financial statements to
follow)
----------------------------------------------------------------------------
(in $000 except as otherwise stated) Three Months Nine Months
For the Period Ended December 31, 2012 2011 2012 2011
----------------------------------------------------------------------------
Sales 79,813 76,595 225,557 215,992
Gross margin 30,812 30,719 87,141 85,304
Gross margin (% of sales) 38.6% 40.1% 38.6% 39.5%
Selling and administrative expenses 18,942 18,861 56,697 55,159
EBITA 11,870 11,858 30,444 30,145
Unrealized (gain) loss on financial
instruments (683) (117) (1,079) 296
Other (income) expenses 214 44 (213) 700
Net earnings 6,632 6,309 15,634 13,605
Earnings per share - Class A $ 0.47 $ 0.46 $ 1.12 $ 0.98
Earnings per share - Class B $ 0.42 $ 0.39 $ 0.98 $ 0.85
Dividend per share - Class A
(annual) $ 0.360 $ 0.360
Dividend per share - Class B
(annual) $ 0.314 $ 0.314
Cash provided by operations (after
changes in non-cash working capital
items) (5,067) (9,460) 6,655 695
Working capital 45,000 39,654
Shareholders' equity per share $ 9.16 $ 8.56
----------------------------------------------------------------------------
The Company calculates net earnings excluding gains (losses) on
derivative financial instruments, other expenses, and the related
income tax effect as follows:
----------------------------------------------------------------------------
(Unaudited) For the three For the nine
months ended months ended
December 31, December 31,
(in thousands of $) 2012 2011 2012 2011
----------------------------------------------------------------------------
Net earnings 6,632 6,309 15,634 13,605
Net unrealized losses (gains) on derivatives (683) (117) (1,079) 296
Other expenses (income) 214 44 (213) 700
Income tax effect of the above 127 20 349 (269)
----------------------------------------------------------------------------
Net earnings excluding gains (losses) on
derivative financial instruments, other
expenses, and the related income tax effect 6,290 6,256 14,691 14,332
----------------------------------------------------------------------------
Andrew Peller Limited ('APL' or the 'Company') is a leading
producer and marketer of quality wines in Canada. With wineries in
British Columbia, Ontario, and Nova Scotia, the Company markets
wines produced from grapes grown in Ontario's Niagara Peninsula,
British Columbia's Okanagan and Similkameen Valleys, and from
vineyards around the world. The Company's award-winning premium and
ultra-premium VQA brands include Peller Estates, Trius, Hillebrand,
Thirty Bench, Crush, Wayne Gretzky, Sandhill, Calona Vineyards
Artist Series, and Red Rooster. Complementing these premium brands
are a number of popularly priced varietal wine brands including
Peller Estates French Cross in the East, Peller Estates Proprietors
Reserve in the West, Copper Moon, XOXO, skinnygrape and Verano.
Hochtaler, Domaine D'Or, Schloss Laderheim, Royal, and Sommet are
our key value priced wine blends. The Company imports wines from
major wine regions around the world to blend with domestic wine to
craft these popularly priced and value priced wine brands. With a
focus on serving the needs of all wine consumers, the Company
produces and markets premium personal winemaking products through
its wholly-owned subsidiary, Global Vintners Inc., the recognized
leader in personal winemaking products. Global Vintners distributes
products through over 250 Winexpert and Wine Kitz authorized
retailers and franchisees and more than 600 independent retailers
across Canada, the United States, the United Kingdom, New Zealand,
Australia, and China. Global Vintners award-winning premium and
ultra-premium winemaking brands include Selection, Vintners
Reserve, Island Mist, Kenridge, Cheeky Monkey, Ultimate Estate
Reserve, Traditional Vintage, Cellar Craft, and Artful Winemaker.
The Company owns and operates more than 100 well-positioned
independent retail locations in Ontario under The Wine Shop, Aisle
43, and WineCountry Vintners store names. The Company also owns
Grady Wine Marketing Inc. based in Vancouver and The Small
Winemaker's Collection Inc. based in Ontario; both of these wine
agencies are importers of premium wines from around the world and
are marketing agents for these fine wines. The Company has entered
into a partnership to market the Wayne Gretzky Estate Winery brands
across Canada. The Company's products are sold predominantly in
Canada with a focus on export sales for its icewine and personal
winemaking products. Andrew Peller Limited common shares trade on
the Toronto Stock Exchange (symbols ADW.A and ADW.B).
The Company utilizes EBITA (defined as earnings before interest,
amortization, unrealized derivative (gain) loss, other expenses,
and income taxes). EBITA is not a recognized measure under IFRS.
Management believes that EBITA is a useful supplemental measure to
net earnings, as it provides readers with an indication of cash
available for investment prior to debt service, capital
expenditures, and income taxes. Readers are cautioned that EBITA
should not be construed as an alternative to net earnings
determined in accordance with IFRS as an indicator of the Company's
performance or to cash flows from operating, investing and
financing activities as a measure of liquidity and cash flows. The
Company also utilizes gross margin (defined as sales less cost of
goods sold, excluding amortization) and net earnings excluding
gains (losses) on derivative financial instruments, other expenses,
and the related income tax effect as defined above. The Company's
method of calculating EBITA, gross margin, and net earnings
excluding gains (losses) on derivative financial instruments, other
expenses, and the related income tax effect may differ from the
methods used by other companies and, accordingly, may not be
comparable to measures used by other companies.
Andrew Peller Limited common shares trade on the Toronto Stock
Exchange (symbols ADW.A and ADW.B).
FORWARD-LOOKING INFORMATION
Certain statements in this news release may contain
"forward-looking statements" within the meaning of applicable
securities laws, including the "safe harbour provision" of the
Securities Act (Ontario) with respect to Andrew Peller Limited (the
"Company") and its subsidiaries. Such statements include, but are
not limited to, statements about the growth of the business in
light of the Company's recent acquisitions; its launch of new
premium wines; sales trends in foreign markets; its supply of
domestically grown grapes; and current economic conditions. These
statements are subject to certain risks, assumptions, and
uncertainties that could cause actual results to differ materially
from those included in the forward-looking statements. The words
"believe", "plan", "intend", "estimate", "expect", or "anticipate"
and similar expressions, as well as future or conditional verbs
such as "will", "should", "would", and "could" often identify
forward-looking statements. We have based these forward-looking
statements on our current views with respect to future events and
financial performance. With respect to forward-looking statements
contained in this news release, the Company has made assumptions
and applied certain factors regarding, among other things: future
grape, glass bottle, and wine prices; its ability to obtain grapes,
imported wine, glass, and its ability to obtain other raw
materials; fluctuations in the U.S./Canadian dollar exchange rates;
its ability to market products successfully to its anticipated
customers; the trade balance within the domestic Canadian wine
market; market trends; reliance on key personnel; protection of its
intellectual property rights; the economic environment; the
regulatory requirements regarding producing, marketing,
advertising, and labeling its products; the regulation of liquor
distribution and retailing in Ontario; and the impact of increasing
competition.
These forward-looking statements are also subject to the risks
and uncertainties discussed in this news release, in the "Risk
Factors" section and elsewhere in the Company's MD&A and other
risks detailed from time to time in the publicly filed disclosure
documents of Andrew Peller Limited which are available at
www.sedar.com. Forward-looking statements are not guarantees of
future performance and involve risks, uncertainties, and
assumptions which could cause actual results to differ materially
from those conclusions, forecasts, or projections anticipated in
these forward-looking statements. Because of these risks,
uncertainties and assumptions, you should not place undue reliance
on these forward-looking statements. The Company's forward-looking
statements are made only as of the date of this news release, and
except as required by applicable law, the Company undertakes no
obligation to update or revise these forward-looking statements to
reflect new information, future events or circumstances or
otherwise.
ANDREW PELLER LIMITED
Condensed Consolidated Balance Sheets
Unaudited
These financial statements have not been reviewed by our auditors
----------------------------------------------------------------------------
----------------------------------------------------------------------------
December 31 March 31
2012 2012
(in thousands of Canadian dollars) $ $
----------------------------------------------------------------------------
Assets
Current Assets
Accounts receivable 26,882 24,937
Inventory 114,694 110,256
Current portion of biological assets - 881
Prepaid expenses and other assets 3,073 1,338
----------------------------
144,649 137,412
Property, plant, and equipment 89,013 84,490
Biological assets 12,924 12,556
Intangibles 12,801 13,621
Goodwill 37,473 37,473
----------------------------
296,860 285,552
----------------------------
----------------------------
Liabilities
Current Liabilities
Bank indebtedness 62,284 57,495
Accounts payable and accrued liabilities 26,723 37,118
Dividends payable 1,252 1,252
Income taxes payable 1,928 40
Current portion of derivative financial
instruments 1,150 1,272
Current portion of long-term debt 6,312 5,366
----------------------------
99,649 102,543
Long-term debt 42,791 41,456
Long-term derivative financial instruments 1,297 1,943
Post-employment benefit obligations 8,119 7,151
Deferred income 1,415 -
Deferred income taxes 12,597 11,907
----------------------------
165,868 165,000
----------------------------
Shareholders' Equity
Capital stock 7,026 7,026
Retained earnings 123,966 113,526
----------------------------
130,992 120,552
----------------------------
296,860 285,552
----------------------------
----------------------------
The above statements should be read in conjunction with the
entire interim consolidated financial statements and notes.
They will be available on the Investor Relations section of
www.andrewpeller.com or at www.sedar.com.
ANDREW PELLER LIMITED
Condensed Consolidated Statements of Earnings
Unaudited
These financial statements have not been reviewed by our auditors
----------------------------------------------------------------------------
----------------------------------------------------------------------------
For the three months For the nine months
ended ended
December 31 December 31
(in thousands of Canadian 2012 2011 2012 2011
dollars) $ $ $ $
----------------------------------------------------------------------------
Sales 79,813 76,595 225,557 215,992
Cost of goods sold 49,001 45,876 138,416 130,688
Amortization of plant and
equipment used in production 1,180 1,233 3,527 3,677
-------------------------------------------
Gross profit 29,632 29,486 83,614 81,627
Selling and administration 18,942 18,861 56,697 55,159
Amortization of plant, equipment,
and intangibles used in selling
and administration 646 688 2,426 2,119
Interest 1,288 1,170 3,866 4,201
-------------------------------------------
Operating earnings 8,756 8,767 20,625 20,148
Net unrealized (gains) losses on
derivative financial instruments (683) (117) (1,079) 296
Other (income) expenses 214 44 (213) 700
-------------------------------------------
Earnings before income taxes 9,225 8,840 21,917 19,152
-------------------------------------------
Provision for income taxes
Current 2,140 1,879 5,089 4,706
Deferred 453 652 1,194 841
-------------------------------------------
2,593 2,531 6,283 5,547
-------------------------------------------
Net earnings for the period 6,632 6,309 15,634 13,605
Net earnings per share
Basic and diluted
Class A shares 0.47 0.46 1.12 0.98
-------------------------------------------
-------------------------------------------
Class B shares 0.42 0.39 0.98 0.85
-------------------------------------------
-------------------------------------------
The above statements should be read in conjunction with the
entire interim consolidated financial statements and notes.
They will be available on the Investor Relations section of
www.andrewpeller.com or at www.sedar.com.
ANDREW PELLER LIMITED
Condensed Consolidated Statements of Comprehensive Income
Unaudited
These financial statements have not been reviewed by our auditors
----------------------------------------------------------------------------
----------------------------------------------------------------------------
For the three For the nine
months ended months ended
December 31 December 31
2012 2011 2012 2011
(in thousands of Canadian dollars) $ $ $ $
----------------------------------------------------------------------------
Net earnings for the period 6,632 6,309 15,634 13,605
Net actuarial losses on post-employment
benefit plans (133) (438) (1,941) (2,295)
Deferred income taxes 34 114 504 597
-------------------------------
Other comprehensive loss for the period (99) (324) (1,437) (1,698)
-------------------------------
Net comprehensive income for the period 6,533 5,985 14,197 11,907
-------------------------------
-------------------------------
The above statements should be read in conjunction with the
entire interim consolidated financial statements and notes.
They will be available on the Investor Relations section of
www.andrewpeller.com or at www.sedar.com.
ANDREW PELLER LIMITED
Condensed Consolidated Statements of Cash Flows
Unaudited
These financial statements have not been reviewed by our auditors
----------------------------------------------------------------------------
----------------------------------------------------------------------------
For the nine For the nine
months ended months ended
December 31, December 31,
2012 2011
(in thousands of Canadian dollars) $ $
----------------------------------------------------------------------------
Cash provided by (used in)
Operating activities
Net earnings for the period 15,634 13,605
Adjustments for:
Loss (gain) on disposal of property and
equipment (547) 158
Amortization of plant, equipment, and
intangibles 5,953 5,796
Interest expense 3,866 4,201
Provision for income taxes 6,283 5,547
Revaluation of biological assets 295 563
Post-employment benefits (973) (647)
Deferred income 1,819 -
Net unrealized (gain) loss on derivative
financial instruments (1,079) 296
Interest paid (3,640) (4,043)
Income taxes paid (3,201) (5,002)
------------------------------
24,410 20,474
Changes in non-cash working capital items
related to operations (17,755) (19,779)
------------------------------
6,655 695
------------------------------
Investing activities
Proceeds from disposal of property and
equipment 514 -
Purchase of property, equipment, and
biological assets (11,266) (5,097)
Purchases of intangibles - (1,039)
Proceeds from disposal of a business 1,000 -
Acquisition of businesses - (600)
------------------------------
(9,752) (6,736)
------------------------------
Financing activities
Decrease in bank indebtedness 4,789 9,946
Issuance of long-term debt 6,500 50,263
Repayment of long-term debt (4,280) (49,611)
Deferred financing costs (155) (904)
Dividends paid (3,757) (3,653)
------------------------------
3,097 6,041
------------------------------
Increase (decrease) in cash during the period - -
Cash, beginning of period - -
Cash, end of period - -
------------------------------
------------------------------
The above statements should be read in conjunction with the
entire interim consolidated financial statements and notes.
They will be available on the Investor Relations section of
www.andrewpeller.com or at www.sedar.com.
Contacts: Andrew Peller Limited Mr. Peter Patchet CFO and EVP
Human Resources (905) 643-4131 Ext.
2210peter.patchet@andrewpeller.com www.andrewpeller.com
Andrew Peller (TSX:ADW.A)
Historical Stock Chart
From Apr 2024 to May 2024
Andrew Peller (TSX:ADW.A)
Historical Stock Chart
From May 2023 to May 2024
