Lassonde Industries Inc.

Q2 2026 sales totaled $738 million versus $742 million last year; excluding an unfavorable foreign exchange effect, sales decreased by 0.5%. Gross profit was $228 million, up from $196 million a year ago; 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 last year. Profit attributable to corporation shareholders was $27 million, or $3.95 per share, versus $34 million, or $5.03 per share last year; adjusted profit attributable to shareholders was $51 million, or $7.45 per share, up 36%. The days of operating working capital ratio improved to 46 days from 51 days three months earlier. Operating activity generated $78 million in cash versus a use of $3 million last year. CapEx was $38 million in Q2, and management reiterated fiscal 2026 CapEx could be up to 7% of sales, including approximately USD 96 million for the New Jersey project. Net debt was $451 million, down from $474 million, and net debt to adjusted EBITDA was 1.22:1 versus 1.35:1 three months earlier. For 2026, management now expects sales to be slightly below last year’s level, excluding FX and major external disruptions.

Vincent Timpano emphasized that the quarter showed the resilience of Lassonde’s diversified portfolio despite industry volume pressure, macro uncertainty, and a tough prior-year comparison. He highlighted strong U.S. beverage execution, share gains for Apple & Eve, ongoing innovation in Canadian beverage, early success in food service, and solid specialty food performance outside the one customer change. His tone was constructive but cautious, repeatedly stressing disciplined revenue management, profitable sales, and the need to navigate a still-volatile demand and cost backdrop.

Francis Trudeau focused on the financial drivers behind the quarter: lower orange concentrate costs, favorable pricing, and mix helped gross profit, while higher transportation costs, compensation, administrative expenses, and a $30 million impairment weighed on the bottom line. He noted adjusted EBITDA of $101 million, working capital at 46 days, operating cash flow of $78 million, net debt of $451 million, and leverage of 1.22:1, all of which support the new share buyback plan. He also said the company is well protected on hedging, with most positions ending toward year-end, but cautioned that freight, transportation, PET resin, and broader geopolitical/tariff pressures make margin sustainability difficult to predict.

Analysts pressed management on whether the 440-basis-point gross margin expansion is sustainable, and management said the quarter benefited mainly from commodities, with price and mix also helping, but warned that freight, transportation, and PET resin remain volatile. They were also asked how lower full-year sales guidance fits with strong first-half adjusted EBITDA growth; management said it is too hard to quantify the second-half impact because of commodity, tariff, and demand uncertainty. On the U.S. Specialty Food impairment, management explained the customer did not leave entirely but reduced volume after diversifying supply, and said the expected shortfall is being backfilled quickly across multiple customers, with more than 50% already secured and additional volume likely to follow.