VANCOUVER, BC – Premium Brands Holdings Corporation (TSX: PBH) announced its plans to close its processed meats plant located in Toronto, Ontario in December, 2015.
The Company looked at various options to continue to operate this leased facility, which was built in 1958, but due to its age and its location in a predominantly residential area, none were economically feasible.
The Toronto plant currently produces branded and private label processed meats for a variety of retail and foodservice customers. The Company intends to gradually transition a portion of this business to its other production facilities in Ontario starting in the spring with the final shutdown date scheduled for December, 2015. The closure will affect approximately 200 employees, each of whom will receive severance packages and will have access to personal counselling and outplacement services and workshops.
"While necessary, we regret the impact the shutdown will have on our employees at the Toronto plant," said Mr. John Beliveau, COO of Premium Brands' Retail Group. "We greatly appreciate their years of service and dedication and will do our best to help them through this time of transition," added Mr. Beliveau.
The costs associated with the shutdown, which will consist primarily of employee severance outlays, are estimated at $7.3 million ($5.4 million after tax), most of which will be expensed in the fourth quarter of 2015.
"The shutdown of the Toronto plant and the corresponding transfer of production to our three other state-of-the-art or recently renovated deli meat production facilities in Ontario, combined with the investments we are making in expanding the capacity of these facilities, is expected to result in an increase in our pre-tax earnings of approximately $2.4 million," added Mr. Beliveau.
About Premium Brands
Premium 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, Ohio and Washington State. The Company services a diverse base of customers located across North America 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, Direct Plus, Harlan Fairbanks, Creekside Bakehouse, Stuyver's Bakestudio, Centennial Foodservice, B&C Food Distributors, Shahir, Wescadia, Duso's, Maximum Seafood, SK Food Group, OvenPride, Hub City Fisheries, Audrey's, Deli Chef, Piller's and Freybe.
www.premiumbrandsholdings.com
Forward Looking Statements
This release 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 January 26, 2015, 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 and business restructuring initiatives; (xi) risks associated with the Company's business acquisition strategies; (xii) changes in the value of the Canadian dollar relative to the U.S. dollar; and (xiii) new government regulations affecting the Company's business and operations; (xiv) the Company's ability to raise the capital needed to fund its various growth initiatives; and (xv) labour related issues including potential labour disputes with employees represented by labour unions and labour shortages. Details on these risk factors as well as other factors can be found in the Company's 2013 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 January 26, 2015 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.
Source: Premium Brands