Mr. George Paleologou reports

PREMIUM BRANDS HOLDINGS CORPORATION REPORTS FOURTH QUARTER AND FULL YEAR 2023 FINANCIAL RESULTS AND ANNOUNCES A 10.4% DIVIDEND INCREASE

Premium Brands Holdings Corp. has released its results for the fourth quarter and fiscal year ended Dec. 30, 2023.

2023 highlights:

• Record revenue of $6.3-billion representing a 3.8-per-cent, or $231.2-million, increase as compared with 2022 despite 2022 having an extra week of sales.
• Record adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) of $559.1-million representing a 10.9-per-cent, or $54.9-million, increase as compared with 2022 despite 2022 having an extra week of sales.
• An 8.9-per-cent adjusted EBITDA margin, up from 8.4 per cent in 2022.
• Two thousand twenty-three adjusted EPS (earnings per share) of $4.03 per share representing a 16.4-per-cent, or 79-cent-per-share, decrease as compared with 2022, with the decrease being driven by higher interest costs.

Fourth quarter highlights:

• Fourth quarter revenue of $1.55-billion representing a 4.9-per-cent, or $80.1-million, decrease as compared with the fourth quarter of 2022. Normalizing for the extra week in 2022, fourth quarter revenue was up $1.4-million.
• Solid progress on specialty foods' core U.S. growth initiatives in sandwiches, protein and baked goods, which for the quarter generated an organic volume growth rate of 9.3 per cent and total sales of $580.9-million despite delays in new capacity coming on-line and the fourth quarter being slower for seasonal reasons. For the year, these initiatives generated an organic volume growth rate of 10.1 per cent and total sales of $2.3-billion.
• Record fourth quarter adjusted EBITDA of $137.2-million representing a 0.6-per-cent, or $800,000, increase as compared with the fourth quarter of 2022. Normalizing for the extra week in 2022, fourth quarter adjusted EBITDA was up $3.2-million.
• An 8.8-per-cent adjusted EBITDA margin, up from 8.3 per cent in the fourth quarter of 2022.
• Specialty foods' adjusted EBITDA margin continues to normalize reaching 9.2 per cent for the quarter, a 100-basis-point improvement as compared with the fourth quarter of 2022.
• Fourth quarter adjusted EPS of 85 cents per share representing a 28.6-per-cent, or 34-cent-per-share, decrease as compared with the fourth quarter of 2022, with the decrease being driven by higher interest costs.
• Issued revenue and adjusted EBITDA guidance for 2024. Excluding potential acquisitions, the company expects to generate revenue of $6.65-billion to $6.85-billion, and adjusted EBITDA of $630-million to $650-million in 2024.
• Declared a dividend of 85 cents per share for the first quarter of 2024, representing a 10.4-per-cent increase from the previous quarter's dividend rate.

Questions-and-answers session

The company will hold a Q&A session on its fourth quarter 2023 results today at 10:30 a.m. Vancouver time (1:30 p.m. Toronto time). Management's prerecorded remarks and an investor presentation that will be referenced on the conference call are available by navigating through the company's website.

Access to the Q&A session may be obtained by calling the operator at 289-514-5100 or 800-717-1738 (conference ID: 66569) up to 10 minutes prior to the scheduled start time. For those who are unable to participate, a recording of the conference call will be available through to 10:30 a.m. Toronto time on April 15, 2024, at 888-660-6264 (passcode: 66569 followed by the pound key). Alternatively, a recording of the conference call will be available at the company's website.

"We made solid progress during the quarter towards achieving several of our core long-term goals and remain on track to meet our 2027 targets of $10-billion in sales and $1-billion of EBITDA," said George Paleologou, president and chief executive officer. "We are particularly pleased with how our U.S.-focused growth initiatives are developing. For the quarter, these generated an organic volume growth rate of 9.3 per cent and $580.9-million in sales, despite it being a seasonally slow time and several temporary headwinds including delays in much-needed new capacity coming on-line. This progress shows the potential of the substantial investments we have been making in this market and as our new U.S.-based meat snack, cooked protein, sandwich and artisan baked goods capacity projects ramp up, we expect this growth to accelerate," added Mr. Paleologou.

"Our success in the U.S. market was partially offset by several of our Canadian businesses underperforming due to an increasingly challenging consumer environment in Canada. We are confident, however, that as inflation and interest rates normalize over the course of 2024, we will see progressively improving results from these businesses," said Mr. Paleologou.

"Over all for 2024, we are projecting sales of $6.65-billion to $6.85-billion and adjusted EBITDA of $630-million to $650-million before any new acquisitions," stated Mr. Paleologou. "In terms of potential acquisitions, with the chaos of the last couple of years fading into the background, and valuation expectations moderating, we have several transactions in the pipeline that we hope to complete in the coming quarters," added Mr. Paleologou.

First quarter 2024 dividend

The company also announced that its board of directors approved a cash dividend of 85 cents per share for the first quarter of 2024, which will be payable on April 15, 2024, to shareholders of record at the close of business on March 28, 2024.

"This will be our 10th consecutive year of rewarding our shareholders with a dividend increase of 10 per cent or more," said Mr. Paleologou.

Unless indicated otherwise in writing at or before the time the dividend is paid, each dividend paid by the company in 2024 or a subsequent year is an eligible dividend for the purposes of the enhanced dividend tax credit system.

About Premium Brands Holdings Corp.

Premium Brands owns a broad range of leading specialty food manufacturing and differentiated food distribution businesses with operations across Canada and the United States.

We seek Safe Harbor.