Saputo reports fiscal Q2 net earnings of C$129.7M, up 2% from year-ago period as revenues fall 2.6% to C$1.745B

Nevin Barich

MONTREAL , November 7, 2012 (press release) – Saputo Inc. (TSX:SAP) (Saputo or the Company) reported today its financial results for the second quarter of fiscal 2013, which ended on September 30, 2012. All amounts in this news release are in Canadian dollars, unless otherwise indicated, and are presented according to International Financial Reporting Standards (IFRS).

Net earnings totalled $129.7 million, an increase of $2.6 million or 2.0%.

Earnings before interest, income taxes, depreciation and amortization (EBITDA) amounted to $215.6 million, an increase of $2.5 million or 1.2%.

Revenues for the quarter amounted to $1.745 billion, a decrease of $46.0 million or 2.6%.

Basic earnings per share (EPS) was $0.66 and diluted EPS was $0.65 for the quarter, as compared to basic EPS of $0.63 and diluted EPS of $0.61 for the corresponding quarter last fiscal year.

In the United States (US), the average block market1 per pound of cheese decreased by US$0.26 compared to the same period last fiscal year, decreasing revenues.

In the US, market factors positively impacted EBITDA by approximately $10 million.

A better dairy ingredients product mix offset unfavourable dairy ingredients market conditions, positively affecting both revenues and EBITDA of the USA and Canadian dairy products Divisions as compared to the same quarter of fiscal 2012.

Dairy Products Division (Argentina) EBITDA decreased due to lower sales volumes and selling prices, mainly in the export market.

The weakening of the Canadian dollar versus the US dollar during the quarter had a positive impact on revenues and EBITDA as compared to the same quarter last fiscal year.

The Board of Directors approved a dividend of $0.21 per share payable on December 14, 2012 to common shareholders of record on December 4, 2012.

Renewal of the Normal Course Issuer Bid

The Company announced today that it has the intention to purchase, by means of open market transactions through the facilities of the Toronto Stock Exchange (TSX) or such other means as may be permitted by the TSX and under applicable laws, including by way of private agreements under an issuer bid exemption order issued by a securities regulatory authority in Canada, for cancellation purposes, some of its common shares (Common Shares) by way of a normal course issuer bid (Bid), subject to regulatory approval. Under the Bid, Saputo may repurchase for cancellation up to 9,850,532 Common Shares over the twelve-month period starting on November 15, 2012, representing approximately 5% of its 197,010,649 issued and outstanding Common Shares as of October 31, 2012. In connection with the Bid, Saputo has established an automatic purchase plan (Plan). The Plan enables the Company to provide standard instructions regarding how the Common Shares are to be repurchased on the open market during self-imposed blackout periods. The Plan is effective as of November 15, 2012 and should terminate together with the Bid. It constitutes an automatic plan for purposes of applicable Canadian securities legislation and has been reviewed by the TSX.

During the six calendar months ended October 31, 2012, the average daily trading volume of Saputo's Common Shares was 265,749 shares. Accordingly, the Company is entitled to purchase, on any trading day, up to 66,437 Common Shares representing 25% of the average daily trading volume of the issued and outstanding Common Shares. These purchases will be made in accordance with applicable regulations over a maximum period of 12 months beginning on November 15, 2012 and ending on November 14, 2013. The consideration that the Company will pay for any Common Shares acquired by it on the open market under the Bid will be in cash at the market price of such Common Shares at the time of acquisition. Purchases made by way of private agreements would be at a discount to the prevailing market price of the common shares at the time of the acquisition, as provided in the relevant exemption order. Within the previous twelve months, Saputo purchased 4,786,800 of its Common Shares under the normal course issuer bid established in November 2011, at a weighted average price of $40.68 per share, for a total consideration of $194,744,065.

The Company believes that the purchase by Saputo of its own shares may, under appropriate circumstances, be a responsible investment of funds on hand.

To the Company's knowledge, no director, senior officer or associate of a director or senior officer of Saputo, person acting jointly or in concert with the Company, or person holding 10% or more of any class of equity securities of Saputo currently intends to sell any Common Shares under the Bid. However, sales by such persons through the facilities of TSX may occur if the personal circumstances of any such person change or if any such person makes a decision unrelated to the Bid. The benefits to any such person whose Common Shares are purchased under the Bid would be the same as the benefits available to all other holders whose Common Shares are likewise purchased.

Additional Information

For more information on the second quarter results of fiscal 2013, reference is made to the condensed interim consolidated financial statements, the notes thereto and to the Management's Discussion and Analysis for the second quarter of fiscal 2013. These documents can be obtained on SEDAR at www.sedar.com and in the "Investors and Media" section of the Company's web site, at www.saputo.com.

Conference Call

A conference call to discuss the second quarter results of fiscal 2013 will be held on Wednesday, November 7, 2012 at 2:30 p.m. Eastern Time. To participate in the conference call, dial 1-800-732-5617. To ensure your participation, please dial in approximately five minutes before the call.

To listen to this call on the web, please enter www.gowebcasting.com/3882 in your web browser.

For those unable to participate, a replay of the conference will be available until midnight, Wednesday, November 14, 2012. To access the replay dial 1-800-558-5253, ID number 21607471. A webcast will also be archived on www.saputo.com, in the "Investors and Media" section, under Press Releases.

About Saputo

Saputo produces, markets, and distributes a wide array of products of the utmost quality, including cheese, fluid milk, yogurt, dairy ingredients and snack-cakes. Saputo is the 12th largest dairy processor in the world, the largest in Canada, the third largest in Argentina and among the top three cheese producers in the United States. Our products are sold in more than 50 countries under well-known brand names such as Saputo, Alexis de Portneuf, Armstrong, Baxter, Dairyland, Danscorella, Dragone, DuVillage 1860, Frigo Cheese Heads, Great Midwest, King's Choice, Kingsey, La Paulina, Neilson, Nutrilait, Ricrem, Salemville, Stella, Treasure Cave, hop & go, Rondeau and Vachon. Saputo is a publicly traded company whose shares are listed on the Toronto Stock Exchange under the symbol "SAP".

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