Lassonde Industries Inc.

Second-quarter sales totaled $738 million versus $742 million a year ago, or down 0.5% excluding unfavorable foreign exchange. Gross profit was $228 million versus $196 million last year; excluding FX, gross profit rose $29 million, or 15%. Adjusted EBITDA increased 19% to $101 million, or 13.7% of sales, from $84 million, or 11.4% of sales. Profit attributable to shareholders was $27 million, or $3.95 per share, versus $34 million, or $5.03 per share; adjusted profit attributable to shareholders was $51 million, or $7.45 per share, up 36%. Days of operating working capital improved to 46 days from 51 days sequentially. Net debt fell to $451 million from $474 million, and net debt to adjusted EBITDA improved to 1.22:1 from 1.35:1. For 2026, management now expects sales to be slightly below last year’s level, excluding FX and major external disruptions. CapEx is projected to be up to 7% of sales in fiscal 2026, including approximately USD 96 million for the New Jersey project.

Vince Timpano said the quarter showed the resilience of Lassonde’s diversified portfolio, with strong gross profit growth driven by revenue management, product mix and moderating input costs despite softer industry volumes. He emphasized disciplined pricing, profitable sales over volume for its own sake, and ongoing investment in innovation, single-serve capacity and the New Jersey facility. On Specialty Food, he said the company has already secured more than 50% of the expected 2027 backfill through multiyear agreements and sees the transition as an opportunity to diversify the business.

Francis Trudeau walked through the financial bridge, noting that commodity costs were the biggest driver of the gross profit increase, followed by price and mix. He highlighted $30 million of impairment charges in the quarter, including $27 million tied to a U.S. specialty food customer relationship, and said the impairment does not reflect goodwill deterioration. He also pointed to improved working capital, $78 million of operating cash generation in Q2, $38 million of CapEx, and $32 million of debt repayment, which reduced net debt to $451 million and leverage to 1.22:1. On capital allocation, he said the NCIB fits with higher recent CapEx and the completion of New Jersey, and does not preclude M&A.

Analysts focused on the sharp gross margin expansion, asking how much came from commodities, whether the margin is sustainable, and how hedging might affect the rest of the year. Management said the main drivers were commodities, price and mix, but stressed that freight, transportation, PET resin and other inputs remain volatile, so sustainability is uncertain. Questions also centered on the lowered sales outlook and the U.S. Specialty Food customer loss; management said the sales guide reflects discontinued product lines, customer go-to-market changes, and softer category/Buy Canadian comparisons, while the specialty-food issue was described as a customer diversification decision rather than a trend. On capital allocation, management said the buyback is being launched because CapEx is easing and leverage is conservative, while M&A remains part of the company’s historical strategy.