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 2019.
'Overall we are very pleased with our second quarter results as we continued to generate record sales, adjusted EBITDA and free cash flow while navigating through significant transitory challenges and unusual industry headwinds,' said Mr. George Paleologou, President and CEO. 'Furthermore, we remain on track to deliver another year of record results, driven by a wide variety of organic growth initiatives, several capacity expansions and an especially robust acquisitions pipeline. 'Our Seafood platform's recent expansion initiative in Ontario is going well and its new capacity projects in Quebec and Maine are either at or nearing completion positioning this platform for strong growth in the back half of 2019. Our Protein platform is also expected to have an exceptionally strong second half of the year with its growth in the U.S. continuing to accelerate as its new and innovative meat snack, cooked protein and charcuterie products gain traction,' stated Mr. Paleologou. 'Our Sandwich platform, which has undergone tremendous growth over the last number of years, is now set to enter the next phase of its evolution as it builds momentum in new channels such as grocery and convenience stores, and with new products such as assembled protein trays and snacks. It has taken some time for the platform to position itself in these new channels and product categories but now much of the heavy lifting is done and we are starting to see solid results. Correspondingly we are also expecting to see a strong performance from this platform in third and fourth quarters. 'Turning back to our second quarter results, we faced two major challenges in the quarter: very volatile commodity protein markets caused by a severe outbreak of African Swine Fever in China, and an unusually cold and wet spring in Ontario and Quebec that delayed the onset of barbecue season and other outdoor related lifestyle activities in these key markets. 'The weather issue has largely resolved itself with Central Canada returning to more normal conditions in the third quarter. In terms of the ASF crisis, we continue to monitor the situation closely and to work with our supply chain partners and customers in managing this challenge. Some specific steps we have taken include implementing selling price increases, many of which took effect late in the second quarter or in the third quarter, and investing in inventory positions when buying opportunities are presented. No one knows how this issue is going to play out as there are many complex variables to consider including consumer demand destruction, changes in retail and foodservice featuring, ongoing trade disputes between China and North America, the substitution of other proteins for pork and the progress made in the containment of the disease. I do, however, know that our unique business model of partnering with and empowering talented successful entrepreneurs and then supporting them in managing their businesses for the long term will enable us to continue to be leaders in the specialty foods industry no matter how this situation unfolds. 'On the acquisitions front, we are continuing to see a record number of opportunities, both at the Premium Brands level as well as within many of our businesses, as we are becoming the acquirer or partner of choice for an increasing number of successful food entrepreneurs in Canada and the U.S. Many of these opportunities are getting close to fruition and we expect to show robust acquisition activity in the second half of the year.
ABOUT PREMIUM BRANDS
Premium Brands owns a broad range of leading specialty food manufacturing and differentiated food distribution businesses with operations across Canada and the United States. For further information, please contact George Paleologou, President and CEO or Will Kalutycz, CFO at (604) 656-3100.
FORWARD LOOKING STATEMENTS
This press release contains forward looking statements with respect to the Company, including, without limitation, statements regarding its business operations, strategy and financial performance and condition, cash distributions, proposed acquisitions, budgets, projected costs and plans and objectives of or involving the Company. While 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 13, 2019, there can be no assurance that such expectations will prove to be correct as such forward looking 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. Forward looking statements generally can be identified by the use of the words 'may', 'could', 'should', 'would', 'will', 'expect', 'intend', 'plan', 'estimate', 'project', 'anticipate', 'believe' or 'continue', or the negative thereof or similar variations. Forward looking statements in this press release include statements with respect to the Company's expectations and/or projections on its: (i) revenue; (ii) adjusted EBITDA; (iii) plant start-up and restructuring costs; (iv) income tax rates; (v) dividend policy; (vi) capital expenditures and business acquisitions; (vii) senior debt capacity utilization; and (viii) convertible debentures. Some of the factors that could cause actual results to differ materially from the Company's expectations are outlined under Risks and Uncertainties in the Company's MD&A. Assumptions used by the Company to develop forward looking information contained or incorporated by reference in this press release are based on information currently available to it and include those outlined below as well as those outlined elsewhere in the Company's MD&A. Readers are cautioned that this information is not exhaustive.
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