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August 9, 1999
Canada Bread Company, Limited Reports Second Quarter Earnings for 1999
TORONTO, ONTARIO--CBCL (TSE:CBY) today announced earnings for the second quarter of 1999.
Significant progress has been made in implementing the Six Point Turnaround Plan set out in the first quarter shareholders report. The benefits of these actions, however, are not reflected in the financial results for the quarter.
Sales for the quarter increased by 12 percent to $144.7 million from $129.2 million last year, primarily due to increased sales in Ontario from the new contract with A&P that began late in the first quarter, and increases in sales of other products. For the year to date, sales increased by 14 percent to $283.6 million compared to $248.1 million last year.
Operating earnings of $3.9 million for the quarter compared to $6.9 million last year. Earnings from bakery sales were at prior year levels, however, the cost of investments made in marketing, systems and training associated with the turnaround initiatives adversely affected earnings. The benefits from these investments will be realized in future periods.
Net earnings for the quarter of $2.3 million ($0.11 per share) compares to $4.5 million ($0.21 per share) last year. This decrease is due to the lower operating earnings and, to a lesser extent, a lower contribution from the Company's equity investment in Multi-Marques. Net earnings for the year to date of $4.2 million ($0.19 per share) compared to a loss of $2.5 million last year, including a special charge of $14.4 million ($9.4 million after taxes) last year.
Management is proceeding vigorously with improvements to the Company's core business processes and is convinced that these initiatives will result in a stronger and more profitable company. We expect the benefits of these initiatives to improve results in the second half of the year.
Canada Bread Company, Limited, which is 68 percent owned by Maple Leaf Foods Inc., is Canada's leading manufacturer and distributor of bakery products to the retail and food service business.
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