Maple Leaf Foods Q4 Loss Narrows; Sales Up - Update

(RTTNews) - Canadian food processor Maple Leaf Foods Inc. ( MFI.TO | Quote | Chart | News | PowerRating), Tuesday reported a fourth quarter loss that narrowed on higher sales and helped by price increases, fluctuations in the Canadian dollar and contributions from acquisitions. Results, however, were impacted by the recall of meat products, contaminated with a strain of listeria bacteria, linked to the illness and death of several consumers. Quarterly revenues were also boosted by healthy sales from bakery products. Maple Leaf also said it expects no further one-time costs as the recall has been completed and all recalled product has been destroyed.

Fourth quarter net loss for Maple was C$14.58 million or C$0.12 per share, compared to a loss of C$22.07 million or C$0.17 per share in the year-ago quarter.

Quarterly results were over shadowed by a one-time product recall cost of C$0.11 per share related to call back of packaged meats occurred in August 2008 from Maple's plant in Toronto. The recalled products were found to be the cause for the outbreak of listeriosis food poisoning in four Canadian provinces by Public Health Agency of Canada and the Canadian Food Inspection Agency, confirmed later by the company.

Recall of the packaged meat hurt Maple's business by an estimated C$40 million to C$50 million before taxes as well as one-time recall costs amounting to C$18.5 million primarily for product destruction and facility sanitation. Restructuring and other related costs for the quarter were C$0.13 per share.

Excluding the effect of product recall and other costs, adjusted earnings decreased 38.9% to C$35.4 million or C$0.12 per share.

Earlier, Maple Leaf Foods' reached a tentative C$25 million settlement in a series of class-action lawsuits related to an outbreak of listeriosis.

Comprehensive loss widened to C$28.22 million from C$20.04 million in the comparable quarter a year ago.

In the previous third quarter, Maple Leaf slipped to a loss of C$12.92 million or C$0.10 per share on one-time direct product recall, restructuring and other related costs and certain non-recurring tax adjustments.

Maple Leaf's sales for the quarter increased 5.2% to C$1.34 billion from C$1.27 billion in the same quarter a year ago.

Meat product sales increased 3.2%, sales of bakery products rose 13.1%, while agribusiness sales were down more than 18% from the prior-year quarter.

In the third quarter, sales of the company increased to C$1.34 billion from the same quarter a year ago.

Michael McCain, President and Chief Executive Officer said, "Overall we are pleased with the early progress made in recovering our packaged meats business, and are even more confident in the direction of our transformational efforts. We look forward to improving trends in 2009."

Adjusted Operating Loss for quarter was C$2.1 million, compared to earnings of C$44.0 million in the year-earlier quarter.

For full-year 2008, Maple Leaf Foods slipped to a loss of C$36.86 million or C$0.29 per share from a profit of C$194.96 million or C$1.50 per share last year. On an adjusted basis, earnings were C$0.29 per share.

Comprehensive loss for the year was C$53.77 million, compared to earnings of C$201.55 million in the prior year.

Sales for the year improved slightly to C$5.24 billion from C$5.21 billion a year ago.

In another development, Maple Leaf Foods said that it is proceeding with a voluntary recall of approximately 1,100 cases of wieners produced at its plant in Hamilton, Ontario because the products were shipped in violation of its rigorous food safety protocols. There has been no illness reported as a result of consumption of these products and the risk to human health is extremely low.

MFI.TO is currently trading at C$8.97, on a volume of 0.11 million shares. In the last 52-week period, the stock traded in the range of C$6.54 to C$13.64, on a three-month average volume of 0.14 million shares.

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