Lassonde Industries (LAS-A) Q1 2025 earnings summary

Executive summary

• Sales rose 22.8% year-over-year to $699.7 million, with 9.3% growth excluding FX and Summer Garden, reflecting market share gains in both Canadian and U.S. beverage segments and strong specialty food performance.

• U.S. beverage volume increased 10% in a slightly contracting market, driven by build-back initiatives, new distribution, and improved efficiencies, with the North Carolina single-serve line now operating as expected.

• Canadian beverage activities benefited from price adjustments, productivity initiatives, and effective merchandising, leading to market share gains despite a contracting market.

• Specialty food saw positive top and bottom line growth, with Summer Garden contributing $55.5 million in sales and a 24% EBITDA margin.

• Completed acquisition of Summer Garden in August 2024, now fully consolidated and contributing to sales and profit growth.

Financial highlights

• Gross profit reached $183.2 million (26.2% of sales), up from last year; excluding Summer Garden, gross margin was 24.9% due to higher input costs and depreciation.

• Adjusted EBITDA rose 36.5% to $71.5 million (10.2% of sales), and adjusted profit attributable to shareholders was $27.3 million ($4.00 per share), up from $3.68 per share last year.

• Operating activities required $60.1 million in Q1 2025, compared to generating $11 million last year, mainly due to higher working capital needs and capital expenditure payments.

• Net income attributable to shareholders was $24.5 million (EPS $3.60), a 2.9% increase year-over-year.

• Q1 CAPEX reached $79.1 million, mainly for U.S. plant expansion.

Outlook and guidance

• Anticipates approximately 10% sales growth for 2025, excluding currency effects, driven by Summer Garden, price adjustments, and U.S. volume improvements.

• Expects working capital ratios to normalize by year-end and CapEx to reach up to 9% of sales in 2025, with the New Jersey facility on track and on budget.

• Cautiously optimistic for 2025 but remains vigilant due to economic and geopolitical uncertainties, commodity price volatility, and potential tariff impacts.

• Transportation and warehousing costs are rising and expected to remain elevated in H1 2025.

• Effective tax rate estimated at 26% for 2025; working capital days expected to rise but remain within historical ranges.