Milling & Baking News - August 6, 2013 - 18

Financial Results 

Canada Bread earnings
ﬂat in second quarter
TORONTO — Solid gains in fresh
bread and the U.K. frozen bakery
business were not enough to propel
year-over-year earnings or sales at
Canada Bread Co. Ltd. in the second
quarter of fiscal 2013. Adjusted operating earnings in the quarter ended June
30 totaled C$36,459,000 ($35,323,000),
down narrowly from C$36,524,000
in the same period a year ago. Earnings from operations before interest
and income taxes were C$33,537,000
($32,492,000), down from C$36,668,000
in the same period a year ago.
Sales during the second quarter
of fiscal 2013 fell to C$397,630,000
($385,327,000) from C$404,861,000.
“In the quarter we realized returns
on prior strategic investments to lower
costs and improve productivity in our
manufacturing network,” said Richard Lan, president and chief executive
officer. “This includes our new bakery
in Hamilton, Ont., and our expanded

facilities in the U.K. We expect continued operational improvements, along
with profitable contributions from
many exciting new product launches
that are planned throughout the balance of the year.”
Adjusted operating earnings within the Fresh Bakery segment during the second
quarter of fiscal 2013 fell
4% to C$28,568,000 from
C$29,828,000, while sales
eased 3% to C$271,169,000
from C$279,164,000 in the
second quarter of fiscal 2012.
Canada Bread said earnings declined during the
quarter as higher net corporate costs
allocated to the segment more than
offset higher earnings at the fresh
bread and fresh pasta businesses.
“During the quarter, the company
closed a third bakery in the Toronto
area, eliminating any future duplicative

Soft pretzel sales spur earnings, sales
gains in quarter at J&J Snack
PENNSAUKEN, N.J. — Net income of
J&J Snack Foods Corp. in the third quarter ended June 29 totaled $21,172,000,
equal to $1.13 per share on the common
stock, up 13% from $18,672,000, or 99c per
share, in the same period of fiscal 2012.
Sales for the third quarter of fiscal
2013 were $237,036,000, up 5% from
$226,554,000.
“Sales of soft pretzels and food service
continued to be extremely strong and include new products such as rolls, sticks
and soft pretzel buns to casual dining restaurants and club stores,” Gerry Shreiber,
chairman, president and chief executive
officer, said during a July 30 conference
call with analysts. “Frozen juice bars and

Icees sales in food service were down as
we continued to be impacted by the elimination of the U.S.D.A.’s school food service program in this area of our business.”
Sales to food service customers increased $6,758,000, or 5%, in the third
quarter, to $145,222,000. Soft pretzel sales
to the food service segment increased
22% to $36,136,000, while frozen juices
and Icees sales fell 16% to $16,468,000.
Mr. Shreiber said J&J Snack has been
able to build up its soft pretzel business
by being innovative and reaching out to a
variety of markets.
He said the company has done “a terrific
job” of “infiltrating” the company’s pretzel
products into fast-food and restaurant chains.

Strong Frito-Lay results pace solid proﬁt
gain at PepsiCo Americas Foods
PURCHASE, N.Y. — Continued momentum within the Frito-Lay North America
and Latin America Foods units propelled
an 8% increase in operating profit in the
PepsiCo Americas Foods unit of PepsiCo,
Inc. in the second quarter ended June 15.
At $1,357 million, operating profit for
PepsiCo Americas Foods was up from
$1,260 million in the second quarter of
fiscal 2012. Net revenue in the division
18 / August 6, 2013 Milling & Baking News

increased 5%, rising to $6,025 million
from $5,724 million.
Frito-Lay North America, the largest
segment within PepsiCo Americas Foods,
posted an operating profit of $906 million
in the second quarter of fiscal 2013, up 8%
from $835 million a year ago. Net revenue
also was higher, climbing 4% to $3,332
million from $3,193 million.
Second-quarter operating profit at

overhead costs associated with consolidating production at its bakery
in Hamilton, Ont.,” Canada Bread
said. “Results in the fresh pasta business increased mainly due to lower
SG&A costs.”
Adjusted operating earnings in
the Frozen Bakery segment during
the second quarter of fiscal 2013 totaled C$7,691,000, which compared
with C$6,696,000 in the same period
a year ago. Sales increased
to
C$126,461,000
from
C$125,697,000.
“Performance
in
the
North American frozen
bakery business was consistent as earlier price increases offset inflationary
costs and lower volumes,”
the company said.
For the six months ended June
30, adjusted operating earnings at
Canada Bread were C$53,560,000
($51,871,000),
up
21%
from
C$44,380,000 in the same period a year
ago. Net sales were C$766,335,000,
down from C$775,105,000. MBN
Bakery product sales, excluding biscuit and dumpling sales and fruit and
fig bars, increased $1,345,000, or 2%, as
sales increases and decreases were spread
throughout the customer base.
Also during the call Mr. Shreiber addressed capacity utilization, noting that
of J&J Snack’s 15 plants, 11 or 12 are being
utilized “very, very efficiently.”
“One of the product lines that’s really
growing for us of course is the soft pretzel
— the entire category,” he said. “We doubled our (Carrollton) Texas plant about a
year-and-a-half ago. We’re also looking
for future expansion of our pretzel and
pretzel-like products.”
For the nine months ended June 29, net
income was $44,058,000, or $2.34 per share,
up 27% from $34,580,000, or $1.83 per share,
in the same period a year ago. Net sales rose
7% to $629,770,000 from $588,575,000. MBN

Quaker Foods North America fell to $133
million, down 14% from $154 million a
year ago. Net revenue also fell, easing 1%
to $577 million from $583 million.
Overall, net income at PepsiCo, Inc. in
the second quarter ended June 15 totaled
$2,010 million, equal to $1.28c per share
on the common stock, up 35% from $1,488
million, or 94c per share, in the same period a year ago. Net revenue was $16,807
million, up 2% from $16,458 million.
For the six months ended June 15, the
company saw income rise 18% to $3,08. MBN
bakingbusiness.com / world-grain.com

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Milling & Baking News - August 6, 2013

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