Q3 2024 Premium Brands Holdings Corp Earnings Call (Pre-recorded) Transcript
Key Points
- Premium Brands Holdings Corp (PRBZF) reported record sales of $1.67 billion for the quarter, marking a 1.3% increase compared to the third quarter of 2023.
- The company's specialty food group's organic volume growth for major US initiatives was 8.1%, excluding a temporary decline in sales to a key customer.
- The bakery and protein groups achieved significant growth rates of 25.3% and 7.8%, respectively, leveraging new US-based capacity.
- Premium Brands Holdings Corp (PRBZF) has a robust pipeline of new opportunities and sales initiatives, particularly in the sandwich group, which is expected to return to historical growth levels in 2025.
- The company is in a strong liquidity position with over $700 million of unused credit capacity, providing financial flexibility for future growth initiatives.
- The sandwich group experienced a 5% decline in sales due to a transitory issue with a key customer, impacting overall performance.
- Adjusted earnings and earnings per share for the quarter decreased to $49.4 million and $1.11 per share, respectively, down from $56.3 million and $1.27 per share in the third quarter of 2023.
- Sales volume contractions were noted in both specialty foods and premium food distribution segments, with declines of 0.4% and 2.9%, respectively.
- The company faced challenges with reduced jerky sales and weaker consumer spending in the food service and convenience store channels.
- Debt leverage levels remain above long-term target ranges, with a total debt-to-EBITDA ratio of 4.4 to 1, indicating higher financial risk.
Welcome everyone to our 2024 third-quarter conference call. Thank you for joining us today. With me here today is our CFO, Will Kalutycz. Our presentation will follow the deck that was posted on our website this morning.
We're now on slide 4, which outlines certain key highlights for the quarter. Results for the third quarter were generally in line with our expectations, with the exception of a material sales shortfall in our sandwich group due to an unanticipated decline in sales to a key customer. We believe that this decline is transitory and that sales to this customer will recover and will eventually return to their historical growth rates. Excluding sales to this customer, our specialty food group's organic volume growth for its major US initiatives was 8.1%. Our premium food distribution business improved sequentially during the quarter and has returned to modest growth in dollar terms as the consumer backdrop in Canada continues to show signs of improvement driven by lower interest rates and
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