Company update: Maple Leaf Foods

Maple Leaf Foods has reported its financial results for the third quarter ended September 30, 2009.

Sales for the third quarter decreased 3.6% to $1,296.6 million compared to $1,344.3 million last year. The sales decline was due primarily to lower fresh meat prices, the strategic exit or sale of non-profitable hog operations in 2008, and lower volumes in the Bakery Products Group.

Adjusted Operating Earnings increased to $63.0 million compared to $41.1 million last year, driven by improved performance in prepared meats, fresh poultry and bakery operations, combined with reduced losses in hog production operations as a result of benefits from restructuring initiatives.

"Our third quarter results showed a very material increase in profitability compared to last year and prior historical levels and we are very pleased with this significant progress," said Michael H. McCain, President and CEO. "We benefited from the core strength of our bakery business, combined with substantial recovery in our packaged meats business. The sustainable earnings improvements from the protein restructuring implemented over the past three years are now more visible in our results. While we are making great progress, we still have to complete the work underway to fuel higher growth and margins consistent with our consumer packaged goods peer group."

Adjusted Operating Earnings for the Agribusiness Group in the third quarter of 2009 increased to $15.1 million from $12.3 million last year. Benefits from restructuring have improved results in hog production. Hog production in North America, however, continues to be unprofitable as a result of lower market prices. Earnings from rendering operations, which include biodiesel production, were slightly lower than last year due to lower commodity prices that decreased the value of rendered by-products.

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