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Press release from Marketwire

Premium Brands Holdings Corporation Announces Record 2012 Second Quarter Revenue and Earnings

Thursday, August 09, 2012

Premium Brands Holdings Corporation Announces Record 2012 Second Quarter Revenue and Earnings07:00 EDT Thursday, August 09, 2012VANCOUVER, BRITISH COLUMBIA--(Marketwire - Aug. 9, 2012) - Premium Brands Holdings Corporation (TSX:PBH), a leading producer, marketer and distributor of branded specialty food products, announced today its results for the second quarter of 2012.HIGHLIGHTSRevenue for the quarter increased by 36.5% or $67.2 million to a record $251.0 million as compared to $183.8 million in the second quarter of 2011. Record Adjusted EBITDA for the quarter of $21.1 million representing a 53.5% increase as compared to $13.7 million in the second quarter of 2011. Adjusted earnings per share for the quarter of $0.39 per share as compared to $0.22 per share for the second quarter of 2011. Earnings for the quarter were $7.0 million as compared to $4.5 million in the second quarter of 2011 A quarterly dividend of $6.0 million or $0.294 per share. Rolling twelve months free cash flow of $44.6 million resulting in a dividend to free cash flow ratio of 53.6%. Completion of the Company's new state-of-the-art 20,000 square foot sandwich production facility in Laval, Quebec. Commencement of construction of a new seafood processing and distribution facility that will be adjacent to the Company's Centennial Foodservice business' facility in Richmond, B.C. The issuance of $57.5 million of convertible unsecured subordinated debentures bearing interest at 5.7% and due in June 2017. The Company revised its Adjusted EBITDA guidance for 2012 to a range of $70 million to $75 million from the previous range of $75 million to $80 million based in part on uncertainties about the impact that the drought conditions in the U.S. Midwest will have on the cost of food commodities used in the production of its products.SUMMARY FINANCIAL INFORMATION(In thousands of dollars except per share amounts)13 Weeks Ended26 Weeks EndedJun 30,Jun 25,Jun 30,Jun 25,2012201120122011Revenue251,024183,849469,748337,947Adjusted EBITDA21,05613,71633,08022,932Earnings7,0134,4748,1745,477EPS0.340.240.400.29Adjusted EPS0.390.220.460.30Rolling Four Quarters EndedJun 30,Dec 31,20122011Free cash flow44,62738,225Declared dividends23,92222,672Declared dividend per share1.1761.176Payout ratio53.6%59.3%"Our record results for the quarter reflect robust demand for our products in both the foodservice and retail channels," said Mr. George Paleologou, President and CEO. "Moderating commodity input costs as well as improved plant efficiencies resulting from a combination of recent capital investments and higher production volumes also contributed to our improved results."Looking forward, while we are concerned about the unusually severe drought in the U.S. Midwest and its possible inflationary impact on our input commodity costs, we view this as a short term issue and remain confident in our business model and the ability of our diverse portfolio of businesses to adapt to any challenges created by this situation."In the meantime, we continue to focus on optimizing and expanding our production capacities as demand for our premium, high quality products accelerates across all categories and channels. Some of our more recent initiatives include a new sandwich facility in Laval, Quebec that was commissioned in July, a new state-of-the-art artisan bakery in Langley, B.C. that was brought into full production in June, and the construction of a new seafood processing and distribution facility in Richmond, B.C. that commenced in May."I have no doubt that the disciplined execution of our core strategies will continue to generate superior returns for our shareholders over the long-term," stated Mr. Paleologou.About Premium BrandsPremium Brands owns a broad range of leading specialty food manufacturing and differentiated food distribution businesses with operations in British Columbia, Alberta, Saskatchewan, Manitoba, Ontario, Quebec, Nevada and Washington State. The Company services over 26,000 customers and its family of brands and businesses include Grimm's, Harvest, McSweeney's, Bread Garden Go, Hygaard, Hempler's, Quality Fast Foods, Gloria's Best of Fresh, Harlan Fairbanks, Creekside Bakehouse, Centennial Foodservice, B&C Foods, Shahir, Duso's, Maximum Seafood, SK Food Group, OvenPride, Hub City Fisheries, Audrey's, Deli Chef and Piller's.RESULTS OF OPERATIONSRevenue(in thousands of dollars except percentages)13 weeks%13 weeks%26 weeks%26 weeks%endedendedendedendedJun 30,Jun 25,Jun 30,Jun 25,2012201120122011Revenue by segment:Retail152,22760.6%92,30150.2%287,13561.1%171,00250.6%Foodservice98,79739.4%91,54849.8%182,61338.9%166,94549.4%Consolidated251,024100.0%183,849100.0%469,748100.0%337,947100.0%Retail's revenue for the second quarter of 2012 as compared to the second quarter of 2011 increased by $59.9 million or 64.9% due to: (i) the acquisitions of Piller's and SJ in 2011 which resulted in $49.7 million in incremental sales; and (ii) organic growth of $10.2 million representing an organic growth rate of approximately 11.1%.Retail's strong organic growth for the quarter, which exceeded the Company's targeted range of 6% to 8%, was due to a range of factors including: (i) a variety of new product and customer sales initiatives; (ii) price increases across a broad range of products; and (iii) favourable weather conditions in most of Retail's markets across Canada.Retail's revenue for the first two quarters of 2012 increased by $116.1 million or 67.9% as compared to the first two quarters of 2011 primarily due to: (i) the acquisitions of Piller's, SJ and Deli Chef in 2011, which resulted in incremental sales of $98.8 million; and (ii) organic growth across a range of products and customers of $17.3 million representing an organic growth rate of approximately 10.1%.Looking forward (see Forward Looking Statements), for the second half of 2012 the Company expects Retail's sales growth to either exceed or be at the top end of its guidance for organic growth of 6% to 8%.Foodservice's revenue for the second quarter of 2012 as compared to the second quarter of 2011 increased by $7.2 million or 7.9% due to: (i) general organic growth of $5.3 million representing an organic growth rate of 6.3%; and (ii) increased sales in its Worldsource food brokerage business of $1.9 million due to improved trading opportunities.Foodservice's organic growth, which was within the Company's guidance of 6% to 8%, was driven by a range of factors including: (i) higher sales to its core hotel, restaurant and institutional customers as a result of several factors including overall improved consumer spending in this channel and the success of its recently completed fresh burger patty production facility; and (ii) improved concessionary product sales due to favourable weather conditions across most of western Canada. These factors were partially offset by relatively flat seafood sales in the Ontario market due to hot weather conditions that negatively impacted consumer demand.Foodservice's revenue for the first two quarters of 2012 as compared to the first two quarters of 2011 increased by $15.7 million or 9.4% due to: (i) general organic growth of $11.8 million representing a growth rate of 7.6%; (ii) increased sales in its Worldsource food brokerage business of $2.8 million; and (iii) $1.1 million in unusual trading volume in its Hub City Fisheries business resulting from the sale of excess inventory relating to the 2011 salmon fishery.Looking forward (see Forward Looking Statements), the Company is maintaining its guidance for Foodservice's organic growth rate at 6% to 8%.Gross Profit(in thousands of dollars except percentages)13 weeks % 13 weeks % 26 weeks % 26 weeks % ended ended ended ended Jun 30, Jun 25, Jun 30, Jun 25, 2012 2011 2012 2011 Gross profit by segment: Retail 35,629 23.4% 24,511 26.6% 64,857 22.6% 45,624 26.7% Foodservice 19,628 19.9% 17,938 19.6% 34,686 19.0% 31,893 19.1% Consolidated 55,257 22.0% 42,449 23.1% 99,543 21.2% 77,517 22.9% Retail's gross profit as a percentage of its revenue (gross margin) for the second quarter of 2012 as compared to the second quarter of 2011 decreased from 26.6% to 23.4% primarily due to: (i) the acquisitions of Piller's and SJ in 2011 as these businesses generally have lower average gross margins as compared to Retail's other businesses; and (ii) a change in selling terms whereby certain customers now receive their products FOB the Company's plant versus FOB the customers' warehouses. This resulted in the elimination of freight being billed to these customers and corresponding decreases in gross profit and selling expenses.Normalizing for the above factors, Retail's margin for the quarter was 27.8% as compared to 26.7% in the second quarter of 2011. The increase in Retail's normalized gross margin was due primarily to: (i) lower costs, albeit still at historically high levels, for a variety of input commodities; and (ii) the impact of margin enhancement initiatives implemented over the last six months including selling price increases, production cost reduction programs and product packaging changes.Retail's gross margin for the first two quarters of 2012 as compared to the first two quarters of 2011 decreased primarily due to the same factors that resulted in its lower gross margin in the second quarter. Normalizing for these factors, Retail's gross margin for the first two quarters of 2012 was 26.7%, which is consistent with its gross margin for the first two quarters of 2011.Foodservice's gross margin for the second quarter of 2012 was consistent with its gross margin in the second quarter of 2011 but below average historic levels due to: (i) continued record high costs for certain premium beef input commodities; and (ii) normal fluctuations in its gross margin.Foodservice's gross margin for the first two quarters of 2012 was consistent with its gross margin for the first two quarters of 2011.Selling, General and Administrative Expenses (SG&A)(in thousands of dollars except percentages)13 weeks%13 weeks%26 weeks%26 weeks%endedendedendedendedJun 30,Jun 25,Jun 30,Jun 25,2012201120122011SG&A by segment:Retail19,79813.0%15,50816.8%39,02613.6%29,09517.0%Foodservice12,57412.7%11,58612.7%24,16813.2%22,39713.4%Corporate1,8291,6393,2693,093Consolidated34,20113.6%28,73315.6%66,46314.1%54,58516.2%Retail's SG&A in the second quarter of 2012 as compared to the second quarter of 2011 increased by $4.3 million primarily due to: (i) the acquisitions of Piller's and SJ in 2011 which resulted in an increase of $4.7 million; and (ii) a variety of items consisting primarily of variable selling costs associated withRetail's organic sales growth. These increases were partially offset by: (i) a decrease in freight costs of approximately $0.8 million due to a change in selling terms whereby certain customers now receive their products FOB the Company's plant versus FOB the customers' warehouses. This resulted in the elimination of freight being billed to these customers and corresponding decreases in gross profit and selling expenses; and (ii) reduced distribution related costs resulting from the rationalization of Retail's DSD Network.Retail's SG&A for the first two quarters of 2012 as compared to the first two quarters of 2011 increased by $9.9 million primarily due to: (i) the acquisitions of Piller's, SJ and Deli Chef in 2011 which resulted in an increase in Retail's SG&A of $10.6 million; and (ii) a variety of items consisting primarily of variable selling costs associated with Retail's organic sales growth. These increases were partially offset by: (i) a decrease in freight costs of approximately $1.6 million due to the change in selling terms whereby certain customers now receive their products FOB the Company's plant versus FOB the customers' warehouses; and (ii) reduced distribution related costs resulting from the rationalization of Retail's DSD Network.Normalizing for the acquisitions of Piller's and SJ and for the impact of the change in selling terms for certain customers, Retail's SG&A as a percentage of revenue for the first two quarters of 2012 was 16.5% as compared to 17.0% for the first two quarters of 2011. The decrease in Retail's normalized SG&A as a percentage of revenue was due to a range of factors including reduced distribution related costs resulting from the rationalization of its DSD Network.Foodservice's SG&A in the second quarter of 2012 as compared to the second quarter of 2011 increased by $1.0 million while its SG&A in the first two quarters of 2012 as compared to the first two quarters of 2011 increased by $1.8 million. Both increases were due to a variety of items including higher variable selling costs associated with Foodservice's organic sales growth.Foodservice's SG&A as a percentage of revenue for the first two quarters of 2012 was 13.2%, which is consistent with its SG&A as a percentage of revenue of 13.4% for the first two quarters of 2011.ADJUSTED EBITDA(in thousands of dollars except percentages)13 weeks%13 weeks%26 weeks%26 weeks%endedendedendedendedJun 30,Jun 25,Jun 30,Jun 25,2012201120122011Adjusted EBITDA by segment:Retail15,83110.4%9,0039.8%25,8319.0%16,5299.7%Foodservice7,0547.1%6,3526.9%10,5185.8%9,4965.7%Corporate(1,829)(1,639)(3,269)(3,093)Consolidated21,0568.4%13,7167.5%33,0807.0%22,9326.8%The Company's Adjusted EBITDA for the first two quarters of 2012 as compared to the first two quarters of 2011 increased by $10.1 million or 44.3% primarily due to: (i) acquisitions; (ii) organic growth in a number of the Company's legacy businesses; (iii) improved selling margins resulting from a variety of factors including lower input commodities costs, increases in product selling prices, production cost reduction programs and product packaging changes; and (iv) reduced distribution related costs resulting from the rationalization of the Company's DSD Network.The Company's Adjusted EBITDA as a percentage of revenue (Adjusted EBITDA margin) for the first two quarters of 2012 increased to 7.0% as compared to 6.8% for the first two quarters of 2011. This increase was primarily due to improved selling margins and reduced distribution costs as discussed above. These factors were partially offset by the impact of acquisitions completed in 2011 as the average Adjusted EBITDA margins generated by these businesses is lower than those of the Company's legacy businesses.Normalizing for acquisitions, the Company's Adjusted EBITDA margin for the first two quarters of 2012 was 7.4%.Looking forward (see Forward Looking Statements), despite the Company's Adjusted EBITDA for the first half of the year exceeding its expectations, it is reducing its Adjusted EBITDA guidance for 2012 from the current range of $75.0 million to $80.0 million to a range of $70.0 million to $75.0 million. This is based on:Food inflation uncertainty resulting from the unknown impact that the significant drought conditions in the U.S. Midwest will have on the cost of some of the input food commodities purchased by the Company, such as wheat, pork and beef. The Company has not yet experienced any material impact on its costs as a result of the U.S. drought issues but is concerned that the current poor crop yields and herd contraction trends associated with these conditions, combined with speculative buying of the associated commodities, will result in rising commodity input prices. This, in turn, could have a short term impact on the Company's selling margins. A temporary shortage of certain turkey raw materials in central Canada that is resulting in significant increases in the cost of this commodity and, in turn, lower selling margins in the Retail segment's deli business. The Company is implementing a number of initiatives to address this issue, including applying for supplementary quota to allow for the importation of turkey from other countries, but the timing of when these initiatives will begin having an impact is uncertain at this time.The Company views these issues as short term in nature and expects that any impact resulting from them will be mitigated in the longer term by a return to normal market conditions and/or product selling price increases.InterestThe increase in the Company's interest and other financing costs for both the second quarter of 2012 as compared to the second quarter of 2011, and for the first two quarters of 2012 as compared to the first two quarters of 2011, was primarily due to an increase in the Company's net funded debt.Restructuring CostsRestructuring costs consist of costs associated with the significant restructuring of one or more of the Company's businesses. In the second quarter of 2012, the Company incurred $0.9 million in restructuring costs consisting of:$0.3 million in charges relating to the Company's restructuring of its direct-to-store distribution network (DSD network) for the convenience store channel. This restructuring, which is expected to be completed in the fourth quarter of 2012, involves the merging and rationalization of the following three DSD networks: The Company's Direct Plus DSD network, which operates primarily in western Canada; The DSD network acquired as part of the Deli Chef acquisition in 2011. This network operates in Ontario and Quebec; and The independent distributor network controlled by the Company's recently acquired Pridcorp business. This network operates in various markets across Canada, including the Maritimes. Once complete, this initiative is expected to (see Forward Looking Statements): (i) create Canada's only national convenience store DSD network in the sandwich, meat snack and pastry categories; (ii) gain efficiencies by eliminating overlaps where two of the above three DSD networks are servicing the same customer sites; and (iii) further improve the profitability of the DSD delivery routes serviced by the Company's own fleet by adding products to these routes that were previously distributed exclusively by Pridcorp's network. Looking forward (see Forward Looking Statements), the Company anticipates that it will incur an additional $0.6 million in restructuring costs relating to this initiative over the next two quarters. $0.2 million in costs associated with the restructuring of the Company's Canadian sandwich operations. This project, which is expected to be completed in the fourth quarter of 2012, includes: (i) the construction of a new 20,000 square foot sandwich plant in Laval, Quebec, which was completed at the end of the quarter; and (ii) the shutdown in the third quarter of 2012 of the Company's leased sandwich plant in Edmonton, Alberta. Production from this facility will be moved to the Company's other sandwich plant located in Edmonton and to the new Laval facility. Once complete, this initiative is expected to (see Forward Looking Statements): (i) provide the Company with state-of-the-art capacity from which to grow its business in central and eastern Canada; (ii) generate significant freight savings by consolidating the Company's sandwich production so that products for the central and eastern Canadian markets are made in the new Laval facility and products for the western Canadian market are made at one facility in Edmonton. Currently a significant portion of the Company's sandwiches sold in central and eastern Canada are produced in Edmonton; and (iii) reduce the Company's plant operating costs by moving production from its older Edmonton plant into more efficient facilities. Looking forward (see Forward Looking Statements), the Company anticipates that it will incur an additional $1.9 million in restructuring costs associated with this initiative over the next two quarters, the majority of which will be for employee severance payments. $0.4 million in redundant lease and startup costs associated with the Company's new artisan bread facility. This initiative is expected to (see Forward Looking Statements): (i) provide a substantial increase in production capacity as Stuyver's previous bakery, which was shut down in July 2012, was operating at near to capacity; and (ii) generate significant production efficiencies based on the automation of a number of production processes.For the first two quarters of 2012, the Company incurred restructuring costs associated with its DSD network, sandwich production and artisan bread initiatives of $0.6 million, $0.4 million and $0.6 million, respectively.FREE CASH FLOWThe following table provides a reconciliation of free cash flow to cash flow from operating activities:(in thousands of dollars)53 weeks ended Dec 31, 201126 weeks ended Jun 25, 201126 weeks ended Jun 30, 2012Rolling Four QuartersCash flow from operating activities29,5241,69519,58547,414Changes in non-cash working capital6,05012,3033,242(3,011)Deferred revenue1,1181,118--Acquisition transaction costs1,594402531,245Restructuring costs2,8191,8451,6602,634Capital maintenance expenditures(2,880)(1,274)(2,049)(3,655)Free cash flow38,22516,08922,49144,627FORWARD LOOKING STATEMENTSThis discussion and analysis contains forward looking statements with respect to the Company, including its business operations, strategy and financial performance and condition. These statements generally can be identified by the use of forward looking words such as "may", "could", "should", "would", "will", "expect", "intend", "plan", "estimate", "project", "anticipate", "believe" or "continue", or the negative thereof or similar variations.Although management believes that the expectations reflected in such forward looking statements are reasonable and represent the Company's internal expectations and belief as of August 8, 2012, such 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.Factors that could cause actual results to differ materially from the Company's expectations include, among other things: (i) seasonal and/or weather related fluctuations in the Company's sales; (ii) changes in consumer discretionary spending resulting from changes in economic conditions and/or general consumer confidence levels; (iii) changes in the cost of raw materials used in the production of the Company's products; (iv) changes in the cost of products sourced from third party manufacturers and sold through the Company's proprietary distribution networks; (v) risks associated with the Company's conversion from a publicly traded income trust to a publicly traded corporation, including related changes in Canada's income tax laws; (vi) changes in the Company's relationships with its larger customers; (vii) potential liabilities and expenses resulting from defects in the Company's products; (viii) changes in consumer food product preferences; (ix) competition from other food manufacturers and distributors; (x) execution risk associated with the Company's growth initiatives; (xi) risks associated with the Company's business acquisition strategies; and (xii) new government regulations affecting the Company's business and operations. Details on these risk factors as well as other factors can be found in the Company's 2011 MD&A, which is filed electronically through SEDAR and is available online at www.sedar.com.Unless otherwise indicated, the forward looking information in this document is made as of August 8, 2012 and, except as required by applicable law, will not be publicly updated or revised. This cautionary statement expressly qualifies the forward looking information in this document.Premium Brands Holdings CorporationConsolidated Balance Sheets(Unaudited and in thousands of dollars)June 30,December 31,June 25,201220112011Current assets:Cash and cash equivalents3,5364,8604,962Accounts receivable83,34378,83066,925Other assets92103189Inventories94,20179,97769,298Prepaid expenses5,64513,4558,458186,817177,225149,832Capital assets183,973167,98292,263Intangible assets74,61877,08755,941Goodwill154,819150,417139,224Other assets2,3672,2501,304Deferred income taxes33,12439,95247,221635,718614,913485,785Current liabilities:Cheques outstanding2,0812,5046,996Bank indebtedness10,83218,06110,050Dividend payable6,0055,9585,380Accounts payable and accrued liabilities89,28680,16270,633Current portion of long-term debt21,40720,53613,201Provisions for contingent consideration2,7052,924-Other100-301132,416130,145106,561Puttable interest in subsidiaries14,84715,21014,817Deferred revenue1,6981,9432,380Pension obligation1,3891,345928Provisions for contingent consideration8,7798,360-Long-term debt131,080162,66195,751Convertible unsecured subordinated debentures142,45189,39690,701Other-100-432,660409,160311,138Equity attributable to shareholders:Accumulated earnings141,489133,370126,579Accumulated dividends declared(142,503)(130,497)(119,514)Retained earnings (deficit)(1,014)2,8737,065Share capital200,079198,057164,557Equity component of convertible debentures1,9161,9161,916Reserves6571,442(260)Non-controlling interest1,4201,4651,369203,058205,753174,647635,718614,913485,785Premium Brands Holdings CorporationConsolidated Statements of Operations(Unaudited and in thousands of dollars except per share amounts)13 weeks13 weeks26 weeks26 weeksendedendedendedendedJune 30,June 25,June 30,June 25,2012201120122011Revenue251,024183,849469,748337,947Cost of goods sold195,767141,400370,205260,430Gross profit before depreciation and amortization55,25742,44999,54377,517Selling, general and administrative expenses before depreciation and amortization34,20128,73366,46354,58521,05613,71633,08022,932Depreciation of capital assets3,7762,6437,3955,027Amortization of intangible assets1,2458002,4871,555Amortization of other assets-233Interest and other financing costs4,3483,4838,4246,649Amortization of financing costs10288212138Acquisition transaction costs521153402Change in value of puttable interest in subsidiaries5256737051,188Accretion of provisions for contingent consideration210-419-Unrealized (gain) loss on foreign currency contracts(200)(189)10081Unrealized loss (gain) loss on interest rate swap contracts400-(100)-Restructuring costs9211,5741,6601,845Acquisition bargain purchase gain-(1,355)-(1,355)Equity loss in associate-95-277Earnings before income taxes9,7245,69111,7227,122Provision for income taxesCurrent314629421,019Deferred2,3971,1552,6066262,7111,2173,5481,645Earnings7,0134,4748,1745,477Earnings for the period attributable to:Shareholders7,0044,4058,1195,327Non-controlling interest969551507,0134,4748,1745,477Earnings per shareBasic and diluted0.340.240.400.29Weighted average shares outstanding (in 000's)Basic20,32518,19420,27518,148Diluted20,42018,29120,37018,245Premium Brands Holdings CorporationConsolidated Statements of Cash Flows(Unaudited and in thousands of dollars)13 weeks13 weeks26 weeks26 weeksendedendedendedendedJune 30,June 25,June 30,June 25,2012201120122011Cash flows from operating activities:Earnings7,0134,4748,1745,477Items not involving cash:Depreciation of capital assets3,7762,6437,3955,027Amortization of intangible and other assets1,2458022,4901,558Amortization of financing costs10288212138Change in value of puttable interest insubsidiaries5256737051,188Loss (gain) on disposal of capital assets48(2)16(2)Accrued interest income(8)(2)(15)(26)Unrealized (gain) loss on foreign currencycontracts(200)(189)10081Unrealized loss (gain) on interest rate swaps400-(100)-Equity loss in associate-95-277Deferred revenue(116)(83)(245)(107)Accretion of convertible debentures416390778727Accretion of long-term debt115186292389Accretion of provisions for contingentconsideration210-419-Acquisition bargain purchase gain-(1,355)-(1,355)Deferred income taxes2,3971,1552,60662615,9238,87522,82713,998Change in non-cash working capital(5,979)(4,094)(3,242)(12,303)9,9444,78119,5851,695Cash flows from financing activities:Long-term debt - net(42,527)2,313(31,242)(30,801)Bank indebtedness and cheques outstanding(3,836)9,121(7,652)8,549Convertible debentures - net of issuance costs54,600-54,60054,600Deferred revenue-1,118-1,118Dividends paid to shareholders(6,001)(5,376)(11,959)(10,744)Other(2)-(2)(18)2,2347,1763,74522,704Cash flows from investing activities:Capital asset additions(12,451)(2,988)(23,683)(6,302)Business acquisitions-(3,835)-(10,835)Repayment of share purchase loans and notesreceivable1152618452Promissory note from associate---(300)Net proceeds from sales of assets20552935Payments to shareholders of non-wholly ownedsubsidiaries(1,007)(171)(1,153)(362)Purchase of shares of non-wholly owned subsidiarypursuant to puttable interest-(2,286)-(2,286)Payment of provisions for contingent consideration(219)-(219)-Other-(212)-(319)(13,357)(9,461)(24,578)(20,347)(Decrease) increase in cash and cash equivalents(1,179)2,496(1,248)4,052Effects of exchange on cash and cash equivalents(40)56(76)42Cash and cash equivalents - beginning of period4,7552,4104,860868Cash and cash equivalents - end of period3,5364,9623,5364,962FOR FURTHER INFORMATION PLEASE CONTACT: George PaleologouPremium Brands Holdings CorporationPresident and CEO(604) 656-3100ORWill KalutyczPremium Brands Holdings CorporationCFO(604) 656-3100