Milling & Baking News - May 20, 2008 - 12

Financial Results

Weston Foods operating income
up; price hikes offset rising costs
TORONTO - Operating income of
Weston Foods rose 29% to C$99 million ($97.8 million) in the first quarter
ended March 22. The company said it
experienced significant increases in the
cost of inputs, especially flour, but was
able to raise prices and manage sales
mix toward higher margin products.
According to Weston, the year-overyear change in operating income reflected income of C$24 million related
to the commodity derivatives fair value adjustment together with charges
of C$2 million related to restructuring
and C$13 million related to the net effect of stock-based compensation and
the associated equity derivatives.
Weston Foods sales were C$1,013
million ($1 billion), down 5% from the
same period a year ago. Weston said
foreign currency translation negatively affected sales growth by approximately 11%. Price increases across key
product categories combined with
changes in sales mix contributed 6%
growth during the quarter.
Overall volume at Weston Foods increased by approximately 0.1% for the
first quarter of 2008.
The company said fresh bakery
sales rose approximately 9% in the
first quarter, driven by price increases

in key product categories combined
with changes in sales mix.
"Branded volume increases in the
Arnold and Thomas' brands in the
United States and D'Italiano brand
in Canada were offset
by volume declines
in other categories,
particularly in food
service and private label products," Weston
said. "Sales growth
in whole grain and
whole wheat products
exceeded the sales
growth of white flourbased products. The introduction of
new and expanded products, such as
Thomas' Mini Bagels, Thomas' 100
Calorie Bagel, Thomas' 100 Calorie
English Muffin, Gadoua Vitalite, Wonder+ Headstart and products under
the Weight Watchers licensed brand,
contributed positively to branded
sales growth during the first quarter
of 2008."
Weston said fresh-baked sweet
goods sales, primarily sold under the
Entenmann's brand, decreased approximately 2% due to lower volumes
for the quarter. The volume decline
was attributed to softness in key full-

Ebro Puleva quarterly profit
virtually unchanged
MADRID, SPAIN - The Ebro Puleva
Group posted net profit of €29,331,000
($45,278,000) in the first quarter, up
narrowly from €29,285,000 in the
same quarter a year ago. Net sales
for the year rose 10% to €717,398,000
($1,107,457,000).
Ebro Puleva's pasta division recorded operating profit of €12,899,000,
down 27% from €17,639,000 in the
same period a year ago. Net sales,
meanwhile, rose 30% to €230,569,000
from €176,964,000. Ebro Puleva attributed the strong pasta sales to the incorporation of Birkel Teigwaren Gmbh,
Germany's largest pasta maker. The
company said that by the end of May
it will introduce Ronzoni microwavable pastas on the U.S. market.
The company's rice division operating profit rose 27% to €19,607,000
from €15,487,000. Sales rose 4% to
€206,262,000 from €198,184,000.
"We had been preparing ourselves
bakingbusiness.com / world-grain.com

for the price tension on the rice markets, and our strategic vision has
proved entirely correct," Ebro Puleva
said. "The medium-term prospects are
even more promising. The second harvests in the southeast of Asia will provide greater volume to ease tension in
the producing countries. "
Ebro Puleva also announced it is
considering the possible sale or spinoff of its sugar business, which generated operating profit of €12,003,000 on
sales of €156,618,000 in the first quarter of fiscal 2008.
"If this sale or spin-off is finally
made, the board considers that it would
contribute value to the Ebro Puleva
shareholders, on the one hand, and on
the other it would permit a more individual development of the sugar business in the medium and long term, free
from the constraints of being integrated
in a set of essentially brand-based businesses," the company said. MBN

size categories that were partially offset by growth in hand-held categories,
such as the Entenmann's 100 Calorie
Little Bites.
Weston noted that profitability in the
U.S. fresh-baked sweet goods segment
worsened as a result of redundancy
and start-up costs incurred as part of
the plan to downsize its Bay Shore,
N.Y., facility and transfer full-size cake production to new manufacturing assets located
in Hazleton, Pa.
Frozen bakery sales
increased approximately 7% during the first
quarter, driven mainly
by price increases combined with changes in
sales mix and timing of customer orders.
Biscuit sales, including wafers, ice
cream cones, cookies and crackers,
rose about 6% in the first quarter, due
in large part to higher volume of Girl
Scout cookie sales.
Net income of George Weston in
the first quarter ended March 22 was
C$131 million, equal to C$0.91 per
share on the common stock, down
from C$104 million, or C$0.70 per
share, in the same period a year ago.
Sales were C$7,337 million, up narrowly from C$7,221 million in the first
quarter of fiscal 2007. MBN

Einstein Noah
net expands on
same-store sales
LAKEWOOD, COLO. - Einstein
Noah Restaurant Group posted
net income of $3,842,000 in the first
quarter ended April 1, equal to 24c
per share on the common stock, up
from $1,132,000, or 11c per share,
in the same period a year ago. Net
sales totaled $103,264,000, up 7%
from $96,255,000 in the first quarter
of fiscal 2007.
"Thanks in large part to our increased same-store sales and our efforts in 2007 and early 2008 to lock in
the cost of wheat, implement a welltimed price increase and introduce a
revamped menu, our results for the
first quarter of 2008 reflect impressive financial performance," said
Paul Murphy, president and chief
executive officer. "We are in a growth
mode during a time when most companies are pulling back." MBN

Milling & Baking News

May 20, 2008 / 13

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Milling & Baking News - May 20, 2008

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