CONSOLIDATED FINANCIAL STATEMENTS REPORT

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<ul><li>1.CONSOLIDATED FINANCIAL STATEMENTS REPORT Years ended December 31, 2006 and 2005 * Trademarks for witch Lassonde Industries Inc. is a licensed user. </li></ul><p>2. LASSONDE INDUSTRIES INC.Message to Shareholders Pursuing a Tradition of Growth! Dear Shareholders: As Chairman of the Board and Chief Executivenew business niches and in gaining additionalOfficer of Lassonde Industries Inc., I am market shares.pleased to announce that, again this year, ourCompany has extended its tradition of growth. At the end of 2006, the Companys assetsNet sales in the fourth quarter of 2006 totalled $224.8 million, an increase of 7.3%reached $91.8 million, a 9.0% increase over over the previous year. There was no significantthe same period last year. This brings netchange within the assets, the variations insales for the year 2006 to $353.3 million, athese items being above all the result of9.5% increase over the previous years results. seasonal factors or attributable to the growthin sales figures.Net earnings for the fourth quarter were$3.9 million, and $13.7 million for the yearCurrent liabilities were $58.2 million at the2006, down $1.0 million from the same quarter end of 2006, up from $44.4 million as atlast year, and $3.4 million from the previous December 31, 2005. The difference is abovefiscal period. The drop in the fourth quarter all due to a $5.7 million bank loan, to awas due to significant increases in the cost of $3.3 million increase in accounts payable andraw materials, containers, and packaging, accrued liabilities, and to a $5.2 millionand in sales and marketing costs associated increase in income taxes. For its part, long-termwith the development of new business niches.debt decreased $4.5 million. The percentageFor the year as a whole, the drop in netof long-term debt to the combined total ofearnings was mainly due to an unusual long-term debt and shareholders equity wasnon-recurring income tax charge and to a18.8% as at December 31, 2006, comparednon-recurring interest charge connected towith 22.0% at year-end 2005.the Quebec governments enactment ofBill 15, and to costs incurred to support the During the year just ended, we resumed ourdevelopment of new business niches. stock redemption program and redeemed forcancellation 92,500 Class A subordinateOn the whole, 2006 was a good year that voting shares for a cash consideration ofmet our expectations and that accurately$3.5 million. The redemptions were made inreflects the effort we invested in developing accordance with the Toronto Stock 02 3. LASSONDE INDUSTRIES INC. Message to Shareholders (continued)Exchanges rules and policies on normaland to make gains in all our geographical course issuer bids. We plan to redeemmarkets in the retail and food service market additional shares in 2007. segments. Special effort will be devoted tomarkets outside Quebec, markets that hold Considering the results as a whole, the Boardmajor growth potential. Finally, you should of Directors declared a quarterly dividend ofknow that we remain on the lookout for any $0.155 per share, payable on March 15, acquisition or partnership likely to create value 2007 to all registered holders of Class A andfor you, the shareholders. Class B shares as at March 5, 2007. You will be pleased to note that this dividend represents Finally, it is important to note that these a 24,0% increase over the dividend declaredresults would not be possible without the for the same quarter last year. It should be support, contribution, and excellence of our noted that this is an eligible dividend. employees. We are proud of the whole teamsperformance and are counting on them to The employees and the management team of uphold the tradition for a long time. Lassonde Industries Inc. continue to build on the quality of the Companys products, the reputation of its trademarks, its propensity for innovation, and a solid balance sheet in the pursuit of the corporate objectives of growth, profitability, and value creation for shareholders.Pierre-Paul LassondeChairman of the Boardand Chief Executive Officer We implement measures to mitigate the effect of increases in the cost of raw materials, containers, and packaging. For the year to come, we are optimistic that we will be able to increase our net sales and our net earnings, 755 Principale Street, Rougemont, Quebec J0L 1M003 4. LASSONDE INDUSTRIES INC.Managements Responsibilityfor Financial Reporting The preparation and presentation of the consolidated financial statements of Lassonde Industries Inc. and theother financial information contained in the MD&amp;A for years ended December 31, 2006 and 2005 are theresponsibility of management. This responsibility is based on a judicious choice of appropriate accounting principles and methods, the applicationof which requires making estimates and informed and careful judgments. It also includes ensuring that the financialinformation in the MD&amp;A is consistent with the consolidated financial statements. The consolidated financialstatements were prepared in accordance with Canadian generally accepted accounting principles and wereexamined and approved by the Board of Directors. The Company maintains disclosure controls and procedures which, in the opinion of management, providereasonable assurance regarding the disclosure of important information relating to the Company, as well as to itssubsidiaries, and the safeguarding of assets, and the well-ordered, efficient management of the Companysaffairs. Management recognizes its responsibility for conducting the Companys affairs to comply with therequirements of applicable laws and established financial standards and principles. The Board of Directors fulfills its duty, to oversee management in the performance of its financial reportingresponsibilities and to review the consolidated financial statements and MD&amp;A, principally through itsAudit Committee. The Committee is comprised solely of directors who are independent of the Company and isalso responsible for making recommendations for the nomination of external auditors. Also, it holds periodicmeetings with members of management as well as external auditors, to discuss internal controls, auditingmatters and financial reporting issues. The external auditors have access to the Committee without management.The Audit Committee has reviewed the consolidated financial statements of Lassonde Industries Inc. and theannual managements discussion and analysis and recommended their approval to the Board of Directors. The enclosed consolidated financial statements were audited by Samson Blair/Deloitte &amp; Touche s.e.n.c.r.l.,Chartered Accountants, and their report indicates the extent of their audit and their opinion on the consolidatedfinancial statements.Rougemont, CanadaPierre-Paul Lassonde Robert DeslandesFebruary 20, 2007Chairman of the BoardVice-President, Finance and Chief Executive Officer 04 5. LASSONDE INDUSTRIES INC. Auditors Report To the Shareholders of Lassonde Industries Inc.We have audited the consolidated balance sheets of Lassonde Industries Inc. as at December 31, 2006 and 2005 and the consolidated statements of earnings, retained earnings and cash flows for the years then ended. These financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these financial statements based on our audits.We conducted our audits in accordance with Canadian generally accepted auditing standards. Those standards require that we plan and perform an audit to obtain reasonable assurance whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation.In our opinion, these consolidated financial statements present fairly, in all material respects, the financial position of the Company as at December 31, 2006 and 2005 and the results of its operations and its cash flows for the years then ended in accordance with Canadian generally accepted accounting principles. Montreal, CanadaSamson Blair / Deloitte &amp; Touche s.e.n.c.r.l. February 20, 2007 Chartered AccountantsMember of Deloitte Touche Tohmatsu 05 6. Consolidated Statements of EarningsYears ended December 31, 2006 and 2005(in thousands of dollars, except earnings per share) 2006 2005 Net sales$ 353,318$ 322,763 Cost of goods sold and operating expenses316,808285,092Amortization (Note 12) 9,7199,379 326,527294,471Operating income26,791 28,292Other items Financial expenses (Note 13)2,1801,914 Gain on disposal of fixed assets (3)(226) Share of equity earnings of a company subject to significant influence 74 Reduction in value of investments 23482 Reduction in value of fixed assets87401Earnings before income taxes24,504 25,647Income taxes (Note 14)10,7568,547 Net earnings $13,748$17,100 Basic and diluted earnings per share $2.02$2.51Weighted average number of shares outstanding6,7926,814Consolidated Statements of Retained EarningsYears ended December 31, 2006 and 2005(in thousands of dollars) 2006 2005 Balance, beginning of year $97,099$83,406Net earnings13,748 17,100 110,847100,506 Excess of redemption cost of Class A shares over stated capital (Note 9)(3,033) Dividends (4,007)(3,407)Balance, end of year $ 103,807$97,099 06 7. Consolidated Balance Sheets As at December 31, 2006 and 2005 (in thousands of dollars) 20062005 Assets Current assetsShort-term investments $ 1,979 $ 994Accounts receivable 36,58732,385Inventories (Note 3)77,10772,382Prepaid expenses 1,108 1,351Future income taxes (Note 14)172 275Deferred loss on derivative instruments2 116,953 107,389Investments (Note 4) 23 Fixed assets (Note 5)91,97287,134 Goodwill2,531 2,531 Other long-term assets (Note 6) 8,190 7,992 Net accrued benefit asset (Note 11) 5,118 4,450 $ 224,764 $ 209,519Liabilities Current liabilitiesBank overdraft $ 1,524 $ 1,989Bank indebtedness (Note 7) 5,740Accounts payable and accrued liabilities39,09135,837Income taxes 6,735 1,505Future income taxes (Note 14) 7976Derivative instruments 465Current portion of long-term debt (Note 8) 5,061 4,51458,23044,386Long-term debt (Note 8)28,87833,392 Future income taxes (Note 14)13,08213,445 100,19091,223 Shareholders equity Capital stock (Note 9) 19,36219,778 Contributed surplus 1,405 1,419 Retained earnings 103,80797,099 124,574 118,296 $ 224,764 $ 209,519 Commitments and contingencies (Note 17)Approved by the Board Director Director07 8. Consolidated Statements of Cash FlowsYears ended December 31, 2006 and 2005(in thousands of dollars)2006 2005 Operating activitiesNet earnings$ 13,748 $ 17,100Adjustments:Amortization (Note 12) 9,7199,379Amortization of deferred charges 2,8622,896Future income taxes (257) 3,049Excess (of disbursements) of the pension cost for retirement plans(668) (3,890)Gain on disposal of fixed assets(3) (226)Change in derivative instruments(463) (1,122)Share of equity earnings of a company subject to significant influence74Reduction in value of investments 23482Reduction in value of fixed assets8740125,048 28,143Changes in non-cash operating working capital items (Note 15) (804) (9,112)24,244 19,031 Financing activitiesChange in bank indebtedness5,740Increase in long-term debt 267Repayment of long-term debt(3,967)(1,742)Dividends paid (4,007)(3,407)Redemption of Class A shares (Note 9)(3,463) (5,697)(4,882) Investing activitiesAcquisition of fixed assets (13,187) (11,079)Acquisition of other long-term assets(3,979)(1,925)Disposal of fixed assets 69765(17,097) (12,239) Increase in cash and cash equivalents1,450 1,910Cash and cash equivalents, beginning of year(995) (2,905)Cash and cash equivalents, end of year$455 $(995) Cash and cash equivalents are comprised of cash, short-term investments and bank overdraft. Additional cash flow information (Note 15) 08 9. Notes to the Consolidated Financial Statements Years ended December 31, 2006 and 2005 (tabular amounts are in thousands of dollars) 1. Description of business The Company is active in the processing, conditioning, packaging and marketing of food products such as pure fruit juices and drinks, wine, meat marinades, grilling sauces, fondue sauces, baked beans and canning of corn-on-the-cob as well as fondue broths.2. Accounting policies The consolidated financial statements have been prepared in accordance with Canadian generally accepted accounting principles and include the following significant accounting policies: FINANCIAL STATEMENTS The consolidated financial statements include the accounts of the subsidiaries. REVENUE RECOGNITION Sales are recorded when products are delivered, which is when ownership title is passed to the buyer and the recovery of the consideration is reasonably assured. The Company presents the trade marketing costs under the form of rebates or allowances related to the promotion of its products as a reduction of sales. CASH AND CASH EQUIVALENTS Cash and cash equivalents comprise cash, bank overdraft and short-term investments that expire in three months or less. SHORT-TERM INVESTMENTS Short-term investments are recorded at cost and bear interest at rates varying from 4.29% to 4.31% in 2006 (3.10% to 3.21% in 2005). INVENTORIES Raw materials and supplies are valued at the lower of cost and replacement cost. Finished goods are valued at the lower of cost and net realizable value. Cost is determined using the first in, first out method. INVESTMENTS The investment in the company subject to significant influence is accounted for at equity. The portfolio investment is accounted for at cost or at devalued cost. FIXED ASSETS Fixed assets are recorded at acquisition cost, net of government grants. Amortization is calculated over the useful lives of the assets using the following methods and annual rates: Parking declining balance 10%Buildings declining balance3%Machinery and equipment declining balance 10%and straight-linefrom 2 1/2% to 33 1/3%Furniture and fixturesdeclining balance 20%and straight-line from 10% to 33 1/3%Laboratory equipmentdeclining balance 10%and straight-line 20%Automotive equipmentdeclining balance15% and 20%and straight-line 14 1/4%Computer system declining balance 30%and straight-line 33 1/3%09 10. Notes to the Consolidated Financial StatementsYears ended December 31, 2006 and 2005(tabular amounts are in thousands of dollars)2. Accounting policies (continued) GOODWILLGoodwill represents the excess of the acquisition price over the fair value of the net assets of entities acquired at the date ofacquisition. Goodwill is not amortized but rather is subject to an annual impairment test or more frequently if impairmentindicators arise. Any excess of the carrying amount over the fair value of goodwill is charged to earnings for the year. OTHER LONG-TERM ASSETSa) Deferred charges Deferred charges are comprised of incenti...</p>

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