Colabor Group Q3 profits dip slightly as acquisition boosts revenues

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BOUCHERVILLE, Que. - Food distributor Colabor Group Inc. reported Monday that its net earnings decreased slightly in the third-quarter to $3 million on restructuring and other charges.

The Quebec-based wholesaler and distributor says it earned 13 cents per share for the period ended Sept. 8, compared to 14 cents a year earlier when earnings were $3.1 million.

The January acquisition of Viandes Decarie boosted revenues by 7.9 per cent to $350.3 million. Excluding the $15.3 million of additional sales from the acquisition, comparable revenues increased 3.2 per cent.

Net earnings include a $2.8 million restructuring charge, partially offset by a $1.7-million favourable adjustment in the acquisition cost of Les Pecheries Norref Quebec Inc. following an arbitration decision.

The charges included efforts to close its Cambridge, Ont., distribution centre in December. It also transferred its Skor Distribution operations and merged the administrative operations and sales forces in Eastern Quebec and New Brunswick.

The Skor Culinary Concepts Division has been put up for sale. The division prepares more than 400 fresh and frozen products at a facility in Mississauga, Ont., mainly for institutions, schools, mobile canteen and vending machine operators.

The measures resulted in a $2.8-million charge in the quarter but are expected to reduce operating costs by about $2 million annually beginning in fiscal 2013.

Distribution segment sales increased by 3.6 per cent during the quarter to $248.1 million, up from $239.6 million a year earlier due to favourable weather last summer in eastern Canada and a more aggressive sales push.

Wholesale sales surged 20 per cent to $102.2 million, up from $85.2 million a year earlier due to the Viandes Decarie acquisition.

CEO Claude Gariepy said Colabor is beginning to feel the benefits of the changes it has adopted and is confident of achieving the operating and financial objectives for the current year.

"Over time, Colabor will become a more flexible and dynamic organization, which will allow it to be an important player in industry consolidation," he said in a news release.

On the Toronto Stock Exchange, Colabor's (TSX:GCL) shares gained eight cents at $7.83 in early afternoon trading.

Organizations: Les Pecheries Norref Quebec, Skor Culinary Concepts Division, Toronto Stock Exchange TSX

Geographic location: Cambridge, Eastern Quebec, New Brunswick Mississauga Eastern Canada

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