VANCOUVER, British Columbia – Premium Brands Holdings Corp., a leading producer, marketer and distributor of branded specialty food products, reported record revenue for the second quarter.

For the most recent quarter ended Jun. 30, 2018, the company had revenue of C$761.5 million compared with C$577.4 million reported in the second quarter of 2017. Adjusted earnings for the quarter were C$35.0 million, or adjusted earnings per share of C$1.10, compared with adjusted earnings of C$27.9 million, or C$0.94 adjusted earnings per share in the year-ago period.

“We continue to make solid progress in building our business platforms into industry leaders by providing our talented management teams with the resources they need to grow and diversify their businesses, both through organic initiatives and acquisitions,” said George Paleologou, president and CEO. “In turn this is resulting in continued record top and bottom line growth for Premium Brands as shown by our most recent quarterly results.

“In particular, we are very pleased with how the talented management teams of our most recently acquired businesses are already leveraging their new relationships with us and our other partners to generate significant synergies and new growth opportunities,” he added. “These entrepreneurs are not only opening up new product segments for us but are further advancing our lead in many exciting categories such as meat snacks, sandwiches, dry cured meats, cooked protein and seafood.”

The company announced the acquisition of a 62.6 percent interest in organic poultry processor Yorkshire Valley Farms and North Plymouth, Minnesota-based sandwich business Select Food Products for a total combined purchase price of approximately C$46.2 million.

On a segment basis, the company’s Specialty Foods business reported second quarter revenue of C$522.0 million compared with C$347.7 million reported in 2017. The company attributed the result to acquisitions, which accounted for C$136.5 million of the increase; organic volume growth of C$38.0 million driven by sandwiches, meat snacks and cooked protein products; and selling price inflation of C$4.7 million. Results were partially offset by a C$4.9 million decrease in the translated value of its US-based businesses’ sales resulting from a stronger Canadian dollar, the company noted.

Acquisitions also drove revenue increases in the Premium Food Distribution segment, which reported revenue of C$239.6 million for the second quarter compared with C$229.7 million reported in the second quarter of 2017.

Sales growth in the segment was driven primarily by disruptions in the supply of various species of fresh fish from the south coast of the United States. The company said poor weather conditions hindered fishing activities. Also, sockeye salmon and tuna fisheries on the west coast of North America were weaker expected. Finally, a general slowdown in foodservice sales in western Canada impacted a large number of PFD Centennial Foodservice’s restaurant customers.

“These factors were partially offset by solid growth from PFD’s retail distribution initiatives in western Canada and Quebec,” the company said.

Paleologou said, “2018 has been a very busy year for us in terms of acquisitions. So far, we have invested over C$541 million in new businesses and we expect the back half of the year to continue to be busy as our pipeline of opportunities remains very robust. 

“As the partner of choice for a growing number of successful food entrepreneurs across North America, the length of our runway is expanding, not contracting,” he added. “I am very much looking forward to welcoming more great companies to our unique ecosystem.”

For the 26 weeks ended June 30, 2018, Premium Brands Holdings reported revenue of C$1,346.4 million compared with C$1,055.6 million reported in the year-ago period. Adjusted earnings for the period were C$50.5 million, or C$1.61 adjusted earnings per share, compared with C$43.5 million, or C$1.46 adjusted earnings per share reported for the 26 weeks ended July 1, 2017.

Based on the recent acquisitions of Yorkshire Valley Farms and Select Foods, the company raised its revenue guidance for fiscal 2018 to C$3,010.0 million to C$3,070.0 million. Previous guidance had revenue at C$2,980.0 million to C$3,060.0 million.

The company announced the acquisition of a 62.6 percent interest in Yorkshire Valley Farms Select Food Products for a total combined purchase price of approximately C$46.2 million.

“Both businesses are expected to have an immediate positive impact on the company’s sales but only Yorkshire Valley Farms is expected to have a positive impact on its adjusted EBITDA since the costs associated with transitioning Select Foods production to one of the company’s sandwich plants in Minneapolis are expected to largely offset its incremental adjusted EBITDA in 2018,” the company noted.

Guidance for adjusted earnings before interest and taxes was raised to C$278 million to C$287 million. Prior guidance for adjusted EBITDA was C$274 million to C$286 million.

“We are as excited about the future and about our ability to create long-term sustainable value for our shareholders as we have ever been,” Paleologou said. “Inevitably there will be bumps in the road, but we have no doubts about the path we are on.  A great example of how far we have come is that we now visualize many of our platforms becoming billion-dollar businesses versus not that long ago when this was our goal for Premium Brands as a whole.  Our Sandwich Platform is almost there, and we expect several of our other platforms to reach the billion-dollar target within the next five years.

“Our strategy of empowering successful food entrepreneurs to build their businesses into world class entities, without compromising their values and passion for producing great tasting products, is simple but it is at the heart of what is driving our success,” he said.