Premium Brands Holdings Corporation (TSX: PBH), a leading producer, marketer and distributor of branded specialty food products, announced today its results for the first quarter of 2025.

QUARTER HIGHLIGHTS 

QUESTIONS AND ANSWERS SESSION

The Company will hold a Q&A session on its first quarter 2025 results today at 10:30 a.m. Vancouver time (1:30 p.m. Toronto time). Management's pre-recorded remarks and an investor presentation that will be referenced on the conference call are available here or by navigating through the Company's website at www.premiumbrandsholdings.com.

Access to the Q&A session may be obtained by calling the operator at (289) 514-5100 or (800) 717-1738 (Conference ID: 07724) up to ten minutes prior to the scheduled start time. For those who are unable to participate, a recording of the conference call will be available through to 11:59 p.m. Toronto time on June 7, 2025 at (289) 819-1325 or (888) 660-6264 (passcode: 07724#). Alternatively, a recording of the conference call will be available on the Company's website at www.premiumbrandsholdings.com.

SUMMARY FINANCIAL INFORMATION(In millions of dollars except per share amounts and ratios)

"We are pleased to report another quarter of solid progress in leveraging recent capital allocations to create long-term sustainable value for our shareholders. This was despite significant cost inflation for certain raw materials and a volatile consumer environment created by tariff-related uncertainties. 

"Our core protein, sandwich and bakery sales initiatives in the U.S. were again the big drivers of our performance generating total organic growth for the quarter of over $100 million and an organic volume growth rate of 9.9%. We have invested almost $900 million over the last three plus years to support these initiatives and are now starting to realize the related benefits. Corresponding with this progress, we reaffirmed our sales and adjusted EBITDA guidance for 2025," said Mr. George Paleologou, President and CEO.

"Recent acquisitions also helped drive our sales growth, however, as expected they were a drag on our profitability as we are in the early innings of implementing a variety of operational and best-practice initiatives that will significantly improve their margins over the coming quarters.

"On the acquisitions front, we continue to enjoy a robust deal pipeline and are working on several exciting opportunities that we expect to close in the coming quarters. We are, however, committed to deleveraging our balance sheet over the course of 2025 and any transactions we complete will be done within this context.

"In terms of the current tariff related challenges, we made solid progress in the quarter on mitigating our exposure and are confident that an escalation of the trade disputes between Canada and the U.S. will not have a direct material impact on our business," added Mr. Paleologou. 

SECOND QUARTER 2025 DIVIDEND

The Company also announced that its Board of Directors approved a cash dividend of $0.85 per common share for the second quarter of 2025, which will be payable on July 15, 2025 to shareholders of record at the close of business on June 30, 2025.

Unless indicated otherwise in writing at or before the time the dividend is paid, each dividend paid by the Company in 2025 or a subsequent year is an eligible dividend for the purposes of the Enhanced Dividend Tax Credit System.

ABOUT PREMIUM BRANDS

Premium Brands owns a broad range of leading specialty food manufacturing and differentiated food distribution businesses with operations across Canada and the United States. 

www.premiumbrandsholdings.com

RESULTS OF OPERATIONS

The Company reports on two reportable segments, Specialty Foods and Premium Food Distribution, as well as non-segmented investment income and corporate costs (Corporate). The Specialty Foods segment consists of the Company's specialty food manufacturing businesses while the Premium Food Distribution segment consists of the Company's differentiated distribution and wholesale businesses as well as certain seafood processing businesses. Investment income includes interest and management fees generated from the Company's businesses that are accounted for using the equity method.

Revenue

Specialty Foods' (SF) revenue for the quarter increased by $185.9 million or 18.8% primarily due to: (i) business acquisitions, which generated $75.6 million in growth; (ii) organic volume growth of $58.2 million representing an organic volume growth rate (OVGR) of 5.9%; (iii) a $34.9 million increase in the translated value of sales generated by SF's U.S. based businesses due to a weaker Canadian dollar; and (iv) selling price increases of $17.2 million, which were put into place to address rising chicken and beef costs.

SF's OVGR of 5.9% was driven by: (i) a variety of protein, sandwich and baked goods growth initiatives in the U.S. which generated organic volume growth of $57.8 million representing an OVGR of 9.9%; and (ii) stabilization of its Canadian sales, which grew at an OVGR of just under 1%. These factors were partially offset by a decline in beef jerky sales as this category continues to be challenged by record high beef prices and consumer price sensitivity.

Premium Food Distribution's (PFD) revenue for the quarter increased by $31.5 million or 6.6% due to: (i) selling price inflation of $28.9 million relating primarily to beef, lobster and to a lesser extent salmon products; and (ii) a $3.0 million increase in the translated value of sales generated by PFD's U.S. based businesses due to a weaker Canadian dollar. These factors were partially offset by a sales volume contraction of $0.4 million.

The contraction in PFD's sales volume was primarily due to lower lobster sales resulting from: (i) high selling prices, caused by a challenging Maine lobster fishery, which are impacting demand in the foodservice and retail channels; and (ii) reduced exports to China due to a tariff dispute between the U.S. and China. These factors were mostly offset by strong growth in PFD's Canadian distribution businesses, which grew at an OVGR of approximately 9.1%, driven by: (i) opportunistic inventory buys made in the fourth quarter of 2024; and (ii) solid momentum in several retail sales initiatives in eastern Canada.

Gross Profit

SF's gross profit as a percentage of its revenue (gross margin) for the quarter decreased by 150 basis points primarily due to: (i) raw material cost inflation, primarily associated with chicken and to a lesser extent beef products; and (ii) recent acquisitions, which on a combined basis are expected to generate margins below SF's average gross margin for the next several quarters as various sales and operational initiatives are implemented (see Forward Looking Statements). These factors were partially offset by: (i) production efficiency gains; and (ii) sales leveraging benefits associated with SF's organic volume growth.

PFD's gross margin for the quarter decreased by 100 basis points primarily due to: (i) the total of its selling price increases for lobster, beef and salmon products being only slightly higher than the associated commodity cost inflation; and (ii) a reduced allocation of production overhead to inventory resulting from low processed lobster production levels in the quarter.

Selling, General and Administrative Expenses (SG&A)

SF's SG&A as a percentage of sales (SG&A ratio) for the quarter decreased by 110 basis points primarily due to: (i) sales leveraging benefits associated with its sales growth; and (ii) recent acquisitions having a lower SG&A ratio relative to SF's average ratio.

PFD's SG&A ratio for the quarter decreased by 80 basis points primarily due to sales leveraging benefits associated with its sales growth.

Adjusted EBITDA (1)

Plant Start-up and Restructuring Costs

Plant start-up and restructuring costs consist of expenses associated with: (i) the start-up of new production capacity; (ii) the reconfiguration of existing capacity to gain efficiencies and/or additional capacity; and/or (iii) the restructuring of a business to improve its profitability. The Company expects (see Forward Looking Statements) these investments to result in improvements in its future earnings and cash flows.

During the first quarter of 2025, the Company incurred $6.4 million in plant start-up and restructuring costs relating primarily to the following projects, all of which are expected to expand its capacity and/or generate improved operating efficiencies (see Forward Looking Statements):

Equity Earnings (Losses) from Investments in Associates

Equity earnings (losses) from investments in associates includes the Company's proportionate share of the earnings and losses of its investments in associates.

Clearwater Seafoods Incorporated (Clearwater)

Clearwater's revenue for the first quarter of 2025 as compared to the first quarter of 2024 decreased by $31.6 million primarily due to: (i) unexpected maintenance on two Canadian vessels that resulted in lost harvesting days; and (ii) below average harvesting conditions for Canadian scallops and clams due to natural variability in these resources and weather-related challenges. These factors were partially offset by higher Argentine scallop volumes due to improved harvesting conditions.

Clearwater's loss before payments to shareholders for the first quarter of 2025 as compared to the first quarter of 2024 increased by $17.9 million primarily due to: (i) lost contribution margin from lower sales volumes; (ii) harvesting and processing inefficiencies associated with lower catch rates; and (iii) higher non-recurring restructuring costs.

Revenue and Adjusted EBITDA Outlook

See Forward Looking Statements for a discussion of the risks and assumptions associated with forward looking statements.

2025 Outlook

The Company is maintaining its 2025 sales and adjusted EBITDA guidance ranges of $7.20 billion to $7.40 billion and $680 million to $700 million, respectively.

These estimates are based on a range of assumptions (see Forward Looking Statements) including: (i) reasonably stable economic environments in Canada and the U.S.; (ii) the Company being able to mostly offset the impact of higher raw material costs (see Results of Operations - Gross Profit) with selling price increases; and (iii) the Canadian dollar remaining at current levels relative to the U.S. dollar. 

The Company's guidance does not reflect any potential impact of tariffs imposed on trade between Canada and the U.S. due to a lack of visibility resulting from a rapidly changing state of affairs. It is, however, implementing strategies to mitigate potential impacts in the event that tariffs directly impacting the Company are put into place by the U.S. and/or Canadian governments.

The Company's guidance also does not reflect potential future acquisitions, however, it remains active on this front and is pursuing several opportunities (see Forward Looking Statements).

5 Year Plan

The Company has a strong pipeline of sales and acquisition opportunities and remains on track (see Forward Looking Statements) to meet or exceed the five-year targets it set at the beginning of 2023.

 

 

NON-IFRS FINANCIAL MEASURES

The Company uses certain non-IFRS financial measures including adjusted EBITDA, free cash flow, adjusted earnings and adjusted earnings per share, which are not defined under IFRS and, as a result, may not be comparable to similarly titled measures presented by other publicly traded entities, nor should they be construed as an alternative to other earnings measures determined in accordance with IFRS. These non-IFRS measures are calculated as follows:

Adjusted EBITDA

Free Cash Flow

Adjusted Earnings and Adjusted Earnings per Share

FORWARD LOOKING STATEMENTS 

This press release contains forward looking statements with respect to the Company, including, without limitation, statements regarding its business operations, strategy and financial performance and condition, cash distributions, proposed acquisitions, budgets, projected costs and plans and objectives of or involving the Company. While management believes that the expectations reflected in such forward looking statements are reasonable and represent the Company's internal expectations and belief as of May 7, 2025, there can be no assurance that such expectations will prove to be correct as such forward looking statements involve unknown risks and uncertainties beyond the Company's control which may cause its actual performance and results in future periods to differ materially from any estimates or projections of future performance or results expressed or implied by such forward looking statements.

Forward looking statements generally can be identified by the use of the words "may", "could", "should", "would", "will", "expect", "intend", "plan", "estimate", "project", "anticipate", "believe" or "continue", or the negative thereof or similar variations. Forward looking statements in this press release include statements with respect to the Company's expectations and/or projections on its: revenue; adjusted EBITDA; plant start-up and restructuring costs; income tax rates; dividends and dividend policy; capital expenditures and business acquisitions; convertible debentures; net working capital; liquidity outlook; financial leverage ratios; value of puttable interests; and sale and leaseback and lease renewal transactions.

Some of the factors that could cause actual results to differ materially from the Company's expectations are referenced in the Risks and Uncertainties section in the Company's MD&A for the 13 weeks ended March 29, 2025.

Assumptions used by the Company to develop forward looking statements contained or incorporated by reference in this press release are based on information currently available to it and include those outlined below as well as those outlined elsewhere in this document. Readers are cautioned that this information is not exhaustive.

Management has set out the above summary of assumptions related to forward looking statements included in this press release to provide a more complete perspective on the Company's future operations. Readers are cautioned that these statements may not be appropriate for other purposes.

Unless otherwise indicated, the forward looking statements in this press release are made as of May 7, 2025 and, except as required by applicable law, will not be publicly updated or revised. This cautionary statement expressly qualifies the forward looking statements in this press release.

SOURCE Premium Brands Holdings Corporation

SOURCE: Premium Brands Holdings Corporation

For further information, please contact George Paleologou, President and CEO, or Will
Kalutycz, CFO at (604) 656-3100.

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