Release Date: March 28, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Lassonde Industries Inc (LSDAF, Financial) achieved record financial results in 2024 with sales exceeding $2.6 billion and adjusted EBITDA of $276 million.
- The company's US business showed a 10% volume increase, indicating successful market share growth despite a declining category.
- Lassonde Industries Inc (LSDAF) expanded its specialty food business by acquiring Summer Garden Food Manufacturing, enhancing its product portfolio.
- The company is investing $220 million in a multi-year program to construct a new facility in New Jersey and enhance its North Carolina operations, boosting production capabilities and creating job opportunities.
- Lassonde Industries Inc (LSDAF) successfully executed pricing strategies in Canada to offset high orange juice costs, supported by innovation and promotional plans.
Negative Points
- The North Carolina facility faced disruptions due to Hurricane Elaine, leading to a 15-day plant closure and subsequent production delays.
- Mechanical issues with the single-serve line in North Carolina resulted in missed production targets and opportunities.
- The company anticipates margin contraction in Q1 2025 due to a recent surge in apple juice concentrate costs.
- Transportation and warehousing costs have risen due to potential North American trade disputes, impacting the company's cost structure.
- Lassonde Industries Inc (LSDAF) faces uncertainties related to tariffs, which could affect consumer demand and global supply chains.
Q & A Highlights
Q: Can you break down the 10% revenue growth guidance for 2025 in terms of organic growth versus pricing?
A: We estimate that roughly 50% of the growth will come from acquisition-related activities, with the remaining split equally between volume growth, primarily from our single-serve line in North Carolina, and price increases. (Eric Em, CFO)
Q: How do you expect gross margins to evolve in 2025 given the current commodity price volatility?
A: While we don't provide specific gross margin guidance, we anticipate some margin pressure in Q1 due to higher apple concentrate costs. However, we have implemented price increases to offset these costs. We expect margins to improve as the year progresses, aided by efficiency measures and new production lines. (Eric Em, CFO)
Q: What is the outlook for commodity prices, specifically apple and orange juice concentrates, and how will this impact your margins?
A: We have hedged 70% of our orange juice needs and are comfortable with our current pricing strategy. For apple juice, recent price spikes have been addressed with price increases, and we believe we are well-positioned for the rest of the year. (Eric Em, CFO)
Q: Can you provide more details on the potential expansion of the Summer Garden facility in Ohio?
A: We are concluding our assessment and expect to make a decision in the second half of 2025. The expansion would allow us to maximize existing assets and grow our presence in the U.S. market. (Vince Timpano, CEO)
Q: How is the "Buy Canadian" sentiment affecting your business, and how are you addressing consumer confidence issues?
A: The "Buy Canadian" sentiment is strengthening our position in Canada, where we have strong brands and market share. We are also focusing on innovation and promotional activities to maintain growth despite potential consumer confidence challenges. (Vince Timpano, CEO)
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
