Weston Foods adjusted income up narrowly in second quarter

by Eric Schroeder
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TORONTO — Operating income at Weston Foods in the second quarter of fiscal 2013 ended June 15 increased sharply to C$64 million ($62.4 million)  from C$12 million in the second quarter of fiscal 2012. Income was boosted by a favorable year-over-year impact of the company’s multiemployer pension plan withdrawal liability of C$35 million recorded in the second quarter of fiscal 2012. Adjusted operating income, meanwhile, increased to C$66 million ($64.3 million) from C$65 million.

Net sales were C$413 million ($402.3 million), up 3% from C$400 million a year ago.

George Weston said fresh bakery sales increased approximately 3.9% in the second quarter compared with the same period in 2012, mainly due to the positive impact of pricing and changes in sales mix, as well as higher sales volumes.

“Volumes increased in the second quarter of 2013 and year-to-date as growth was realized in the Country Harvest and D’Italiano brands,” Weston Foods said. “The introduction of new products in the last 12 months, such as Country Harvest Flax and Quinoa, Sprouted Multigrain and Sprouted Wheat breads, Gadoua Pain de Ménage, the Flat Oven Bakery line of international flatbreads and the launch of gluten-free bread and sweet goods, including the recently launched All But Gluten brand, contributed positively to sales and volumes in the second quarter of 2013 and year-to-date.”

Frozen bakery sales decreased approximately 2.8% in the second quarter, mainly due to the loss of certain distributed products. Excluding the effect of the loss of the products, Weston Foods said frozen bakery sales increased by approximately 1.4% in the second quarter of fiscal 2013.

Biscuit sales, principally for wafers, ice cream cones, cookies and crackers, increased approximately 13.3% in the second quarter of 2013, due primarily to volume growth as well as the positive impact of pricing and changes in sales mix. Weston said volume growth was boosted by higher cookie sales, partially offset by declines in cone and wafer sales.

During the fourth quarter of fiscal 2012, Weston Foods started manufacturing and selling Mrs. Fields branded pre-packaged cookies under license, which again contributed positively to cookie sales and volumes in the second quarter of 2013.

Overall, net income at George Weston fell in the second quarter to C$98 million ($95.5 million), equal to C$0.69 per share on the common stock, down 27% from C$135 million, or C$0.98 per share, in the same period of fiscal 2012. Sales rose 2% to C$7,792 million ($7,591 million) from C$7,627 million.

For the six months ended June 15, net income was C$260 million ($253.1 million), or C$1.88 per share, up 2% from C$256 million, or C$1.84 per share, in the same period a year ago. Sales increased 3% to C$15,286 million ($14,877 million) from C$14,851 million.
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