Lassonde Industries (LAS-A) Q3 2024 earnings summary

Executive summary

• Achieved strong sales and profit growth across all divisions in Q3 2024, with significant contributions from the Summer Garden acquisition and solid execution of strategic initiatives.

• U.S. beverage segment saw volume gains from private label and branded products, supported by the build-back plan and ramp-up of the North Carolina single-serve line, despite a 15-day disruption from Hurricane Helene.

• Canadian beverage activities focused on innovation, channel expansion, and productivity improvements, including deployment of a new high-speed juice box line.

• Specialty food division, including Summer Garden, delivered strong sales, with successful integration initiatives underway.

Financial highlights

• Q3 2024 sales reached $668.3M (CAD 668M), up 14.5% year-over-year; sales from acquired entities contributed $31.4M; excluding acquisitions and FX, sales rose 8.2%.

• Gross profit was $179.8M (26.9% of sales), up from $146M (25.1%); adjusted EBITDA increased 31% to $69.3M (10.4% of sales).

• Adjusted profit attributable to shareholders was $31M, or $4.53 per share, up from $25M, or $3.67 per share.

• Nine-month sales rose 8.9% to $1,862.8M; adjusted EBITDA for nine months was $196.2M (10.5% of sales), up from $155M (9%).

• Operating cash flow in Q3 was $87.5M, up from $76M; total assets rose to $2,095.3M, mainly due to Summer Garden acquisition.

Outlook and guidance

• Expects 2024 sales growth in the mid- to high-single-digit range, excluding acquisitions and FX, driven by price adjustments and U.S. volume recovery.

• U.S. beverage focus remains on private label volume build-back and North Carolina single-serve expansion; Canadian beverage to pursue innovation and productivity.

• Specialty food priorities include Summer Garden integration and North American growth strategy.

• Sustained cost inflation for key commodities anticipated; efficiency and productivity improvements are key to profit growth.

• Capital expenditures for 2024 estimated at up to 5% of sales, funded mainly by operating cash flow.