Canada Packers Inc. Reports Second Quarter 2026 Financial Results

Canada NewsWire

Disciplined Execution and Continued Focus on Key Initiatives Drive Strong Free Cash Flow

TSX:CPKR www.canadapackers.com

MISSISSAUGA, ON , Aug. 5, 2026 /CNW/ -- Canada Packers Inc. ("Canada Packers" or the "Company") (TSX: CPKR) today reported its financial results for the 13-week and 26-week periods ended June 27, 2026.

Second Quarter Highlights

Sales of $431.7 million. Prior year Q2 sales of $473.2 million included operations that were not acquired by the Company in connection with the spin-off from Maple Leaf Foods.

Loss of $28.4 million in the quarter includes $48.3 million non-cash decrease in fair value of biological assets, (2025: earnings of $23.4 million, $8.1 million non-cash decrease in fair value of biological assets). The change in fair value of biological assets is excluded in the calculation of Adjusted EBITDA (ii) , and does not affect operating performance.

Adjusted EBITDA (ii) was $34.9 million, down $10.1 million compared to Q2 2025 pro-forma Adjusted EBITDA (i) of $45 million, primarily due to cutout markets that did not improve in line with historical seasonal patterns, partially offset by operational efficiencies.

Paid a dividend of $0.23 per share in the quarter, returning $6.8 million to shareholders.

Adjusted EPS (ii) of $0.34. Adjusted EPS in 2025 of $0.93 does not reflect the impacts of stand-alone costs incurred in 2026.

Net Debt (ii) was $432.8 million resulting in a leverage ratio of 2.4x based on trailing twelve months pro forma Adjusted EBITDA (i) .

Executive Commentary

"Our second quarter results demonstrate the resilience of our business, delivering Adjusted EBITDA within our 8% - 12% target range and generating strong free cash flow despite challenging market conditions," said Dennis Organ, President and Chief Executive Officer, Canada Packers. "Our disciplined execution, supported by our premium, valued added product mix and strategic global customer base helped offset softer year over year comparables. By remaining focused on execution, we continue to strengthen the business and create long-term value for our shareholders."

Quarterly Dividend

On August 4, 2026, the Board of Directors approved a quarterly dividend of $0.23 per share, ($0.92 per share on an annual basis), payable on September 30, 2026, to shareholders of record at the close of business on September 9, 2026. The dividend will be considered an eligible dividend for the purposes of the Enhanced Dividend Tax Credit System.

Historical 2025 periods presented exclude certain "standalone" and financing costs

Until July 28, 2025, the Company's earnings included costs allocated by its then-parent, Maple Leaf Foods Inc. ("Maple Leaf Foods"). Those allocated costs were less than the contractual service costs and other estimated costs that the Company expects to incur as a public reporting entity. Management's estimates of the impact on those costs on Adjusted EBITDA are presented in "Management's Pro Forma Estimates and Related Non-IFRS Measures", below.

RESULTS OF OPERATIONS

Results for the 13-week and 26-week periods ended June 27, 2026 and June 28, 2025

The following table sets out selected financial and operating data of Canada Packers for the periods presented.

Results for the 13-week period ended June 27, 2026

Sales for the 13-week period ended June 27, 2026 decreased 8.8% to $431.7 million compared to $473.2 million for the 13-week period ended June 28, 2025. The change in sales is primarily due to lower pork cutout, a weaker Japanese yen, and the net impact of ham boning operations remaining with Maple Leaf Foods as described in "The Spin Off" in the Management's Discussion and Analysis.

The Company is reporting a gross loss for the 13-week period ended June 27, 2026 of $6.2 million (1.4% of sales) compared to gross profit of $54.7 million (11.6% of sales) for the 13-week period ended June 28, 2025. The non-cash fair value in biological assets decreased gross profit by $48.3 million in the 13-week period ended June 27, 2026, compared to a decrease of $8.1 million in the 13-week period ended June 28, 2025. These amounts are excluded in the calculation of Adjusted Operating Earnings, Adjusted EBITDA and Adjusted EBT. Gross profit was negatively impacted by lower pork cutout values, unfavourable foreign exchange rates, and the impact of the removal of ham boning, partially offset by increased hog volumes and on-farm and supply chain performance.

SG&A expenses for the 13-week period ended June 27, 2026 were $23.7 million (5.5% of sales), compared to $18.7 million (3.9% of sales) in the 13-week period ended June 28, 2025. The increase primarily reflects costs associated with being a standalone public entity, including the long-term services agreement and supply agreement.

Interest expense for the 13-week period ended June 27, 2026 was $6.7 million, compared to $1.1 million for the 13-week period ended June 28, 2025. The increase is due primarily to interest on the Company's Term Loan.

Canada Packers' income tax expense for the 13-week period ended June 27, 2026 resulted in an effective tax rate of 25.3%. This effective tax rate differs from the 2026 Canadian statutory tax rate of 26.4% primarily due to non-deductible expenses and income earned in other jurisdictions. Canada Packers' income tax expense for the 26-week period ended June 27, 2026 resulted in an effective tax rate of 28.0%, which differs from the 13-week period ended June 28, 2025 Canadian statutory tax rate of 26.4% primarily due to non-deductible expenses and income earned in other jurisdictions.

The Company is reporting a net loss for the 13-week period ended June 27, 2026 of $28.4 million compared to net earnings of $23.4 million for the 13-week period ended June 28, 2025. The change in earnings is due to the factors outlined above for gross profit and SG&A, and includes changes in biological assets.

Earnings margin for the 13-week period ended June 27, 2026 was (6.6)% compared to 5.0% for the 13-week period ended June 28, 2025. The change in margin is consistent with the factors noted above for earnings.

Adjusted Operating Earnings for the 13-week period ended June 27, 2026 were $21.5 million compared to $40.3 million for the 13-week period ended June 28, 2025 due to similar factors as noted above for sales, gross profit and SG&A, excluding the change in fair value of biological assets, which is not included in the calculation of Adjusted Operating Earnings.

Adjusted EBITDA for the 13-week period ended June 27, 2026 was $34.9 million compared to $51.4 million for the 13-week period ended June 28, 2025 due to similar factors as noted above for Adjusted Operating Earnings.

Adjusted EBITDA margin for the 13-week period ended June 27, 2026 was 8.1% compared to 10.9% for the 13-week period ended June 28, 2025. The change in margin is consistent with the factors noted above for Adjusted EBITDA.

Adjusted EBT for the 13-week period ended June 27, 2026 was $14.2 million compared to $38.4 million for the 13-week period ended June 28, 2025. The factors impacting Adjusted EBT in the 13-week period ended June 27, 2026 are similar to the factors noted above for Adjusted EBITDA including the impact of depreciation and interest expense.

Results for the 26-week period ended June 27, 2026

Sales for the 26-week period ended June 27, 2026 decreased 7.0% to $860.0 million compared to $925.2 million for the 26-week period ended June 28, 2025. The change in sales is primarily due to lower pork cutout, unfavourable currency primarily due to the lower Japanese yen, and the net impact of ham boning operations remaining with Maple Leaf Foods as described in "The Spin Off" in the Management's Discussion and Analysis.

Gross profit for the 26-week period ended June 27, 2026 was $86.7 million (10.1% of sales) compared to $124.0 million (13.4% of sales) for the 26-week period ended June 28, 2025. The non-cash fair value in biological assets decreased gross profit by $10.9 million in the 26-week period ended June 27, 2026, compared to an increase of $8.3 million in the 26-week period ended June 28, 2025. These amounts are excluded in the calculation of Adjusted Operating Earnings, Adjusted EBITDA and Adjusted EBT. Gross profit was negatively impacted by lower pork cutout values, unfavourable foreign exchange rates, primarily due to the weaker Japanese yen, and the impact of the removal of ham boning, partially offset by increased hog volumes and on-farm and supply chain performance.

SG&A expenses for the 26-week period ended June 27, 2026 were $47.9 million (5.6% of sales), compared to $36.9 million (4.0% of sales) in the 26-week period ended June 28, 2025. The increase primarily reflects costs associated with being a standalone public entity, including the long-term services agreement and supply agreement.

Interest expense for the 26-week period ended June 27, 2026 was $13.8 million, compared to $2.3 million for the 26-week period ended June 28, 2025. The increase is due primarily to interest on the Company's Term Loan.

Canada Packers' income tax expense for the 26-week period ended June 27, 2026 resulted in an effective tax rate of 29.0%. This effective tax rate differs from the 2026 Canadian statutory tax rate of 26.4% primarily due to non-deductible expenses and income earned in other jurisdictions. Canada Packers' income tax expense for the 26-week period ended June 28, 2025 resulted in an effective tax rate of 27.5%, which differs from the 26-week period ended June 28, 2025 Canadian statutory tax rate of 26.4% primarily due to non-deductible expenses and income earned in other jurisdictions.

Earnings for the 26-week period ended June 27, 2026 were $15.4 million compared to $57.6 million for the 26-week period ended June 28, 2025. The change in earnings is due to the factors outlined above for sales, gross profit and SG&A.

Earnings margin for the 26-week period ended June 27, 2026 was 1.8% compared to 6.2% for the 26-week period ended June 28, 2025. The change in margin is consistent with the factors noted above for earnings.

Adjusted Operating Earnings for the 26-week period ended June 27, 2026 were $51.3 million compared to $78.5 million for the 26-week period ended June 28, 2025 due to similar factors as noted above for sales, gross profit and SG&A, excluding the change in fair value of biological assets, which are not included in the calculation of Adjusted Operating Earnings.

Adjusted EBITDA for the 26-week period ended June 27, 2026 was $77.0 million compared to $101.1 million for the 26-week period ended June 28, 2025 due to similar factors as noted above for Adjusted Operating Earnings.

Adjusted EBITDA margin for the 26-week period ended June 27, 2026 was 9.0% compared to 10.9% for the 26-week period ended June 28, 2025. The change in margin is consistent with the factors noted above for Adjusted EBITDA.

Adjusted EBT for the 26-week period ended June 27, 2026 was $36.4 million compared to $74.8 million for the 26-week period ended June 28, 2025. The factors impacting Adjusted EBT in the 26-week period ended June 27, 2026 are similar to the factors noted above for Adjusted EBITDA including the impact of depreciation and interest expense.

NON-IFRS FINANCIAL MEASURES

Canada Packers uses the following non-IFRS measures: Adjusted Operating Earnings, Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted EBT, Net Debt, Net Debt to Trailing Twelve Months Adjusted EBITDA, Adjusted Earnings per Share ("EPS"), Free Cash Flow, Earnings Margin, and Return on Net Assets ("RONA"). Management believes that these non-IFRS measures provide useful information to investors in measuring the financial performance of Canada Packers. These measures do not have a standardized meaning prescribed by IFRS and therefore they may not be comparable to similarly titled measures presented by other publicly-traded companies and should not be construed as an alternative to other financial measures determined in accordance with IFRS.

Adjusted Operating Earnings, Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted EBT and Earnings Margin

Adjusted Operating Earnings, Adjusted EBITDA, Adjusted EBITDA Margin, and Adjusted EBT are non-IFRS measures used by management to evaluate financial operating results. Adjusted Operating Earnings is defined as earnings before income taxes adjusted for items that are not considered representative of ongoing operational activities of the business and items where the economic impact of the transactions will be reflected in earnings in future periods when the underlying asset is sold or transferred. Adjusted EBITDA is defined as Adjusted Operating Earnings plus depreciation and amortization, adjusted for items included in other expense that are considered representative of ongoing operational activities of the business. Adjusted EBITDA Margin is calculated as Adjusted EBITDA divided by sales. Adjusted EBT is used annually by Canada Packers to evaluate its performance and is a component of calculating bonus entitlements under the Company's short-term incentive plan. It is defined as Adjusted EBITDA less depreciation and amortization and interest expense and income. Earnings Margin is calculated as earnings determined in accordance with IFRS, divided by sales.

The table below provides a reconciliation of earnings before income taxes as reported under IFRS in the Company's unaudited Condensed Consolidated Interim Financial Statements to Adjusted Operating Earnings, Adjusted EBITDA and Adjusted EBT for the periods ended as indicated below. Management believes that these non-IFRS measures are useful in assessing the performance of Canada Packers ongoing operations and its ability to generate cash flows to fund its cash requirements.

Adjusted Earnings per Share

Adjusted Earnings per Share, a non-IFRS measure, is used by Management to evaluate financial operating results. It is defined as

basic earnings per share and is adjusted on the same basis as Adjusted Operating Earnings, net of income taxes. The table below provides a reconciliation of basic earnings per share as reported under IFRS in the Company's unaudited Condensed Consolidated Interim Financial Statements to Adjusted Earnings per Share for the periods indicated. Management believes this basis is the most appropriate on which to evaluate financial results as they are representative of the ongoing operations of the Company.

The effective tax rate in the 13-week period ended June 27, 2026 used in determining Adjusted Earnings per Share is 27.9% (2025: 27.9%). In 2026, the effective tax rate of the change in fair value of biological assets, change in unrealized gain on derivative contracts, and items included in other expenses not considered representative of ongoing operations used in the computation of Adjusted Earnings per Share is 26.0%. In 2025, the effective tax rate of the change in fair value of biological assets, change in unrealized gain on derivative contracts, and items included in other expense not considered representative of ongoing operations used in the computation of Adjusted Earnings per Share was 26.0%. The effective tax rate of costs related to the Spin-off was 30.7%.

The effective tax rate in the 26-week period ended June 27, 2026 used in determining Adjusted Earnings per Share is 27.8% (2025: 27.4%). In 2026, the effective tax rate of the change in fair value of biological assets, change in unrealized gain on derivative contracts, and items included in other expenses not considered representative of ongoing operations used in the computation of Adjusted Earnings per Share is 26.0%. In 2025, the effective tax rate of the change in fair value of biological assets, change in unrealized gain on derivative contracts, and items included in other expense not considered representative of ongoing operations used in the computation of Adjusted Earnings per Share was 26.0%. The effective tax rate of costs related to the Spin-off was 23.2%.

Free Cash Flow

Free Cash Flow is a non-IFRS measure used by management to evaluate cash flow after investing in the Company's asset base and is defined as cash provided by operating activities, less additions to long-term assets.The following table calculates Free Cash Flow for the periods indicated.

Discontinued Non-IFRS Measure – Adjusted Free Cash Flow Beginning in the second quarter of 2026, Canada Packers has discontinued the use of Adjusted Free Cash Flow as a non-IFRS financial measure. Following a review of the Company's key performance indicators and external reporting practices, management determined that Adjusted Free Cash Flow no longer provides meaningful incremental information regarding the Company's performance, liquidity, or capital allocation beyond that provided by Free Cash Flow and other measures disclosed in this MD&A. Accordingly, Adjusted Free Cash Flow is no longer used by management as a key performance measure and will not be presented in future disclosures. Comparative-period Adjusted Free Cash Flow information has not been presented, as management believes it is no longer relevant to an understanding of the Company's current performance and financial condition.

Net Debt

The following table reconciles Net Debt to amounts reported under IFRS in the Company's unaudited Condensed Consolidated Interim Financial Statements and calculates the Net Debt to Trailing Twelve Months Adjusted EBITDA ratio as at June 27, 2026, as shown below. The Company calculates Net Debt as long-term debt and lease obligations less cash, and calculates Net Debt to Trailing Twelve Months Adjusted EBITDA as Net Debt divided by Trailing Twelve Months Adjusted EBITDA. Management believes these measures are useful in assessing the amount of financial leverage employed.

Management's Pro Forma Estimates and Related Non-IFRS Measures

The following table presents management's pro forma estimates of certain financial information regarding Canada Packers. These estimates have not been audited or reviewed by any third party, have been derived from internal management reporting, and reflect sales, cost and expense allocations, including with respect to corporate expenses, as well as other estimates and adjustments.

Selected 2026 results compared to pro-forma estimates for 2025 are as follows:

The Company's unaudited Condensed Consolidated Interim Financial Statements and Management's Discussion and Analysis for the 13-week and 26-week periods ended June 27, 2026 are available on SEDAR+ and on the Company's website at canadapackers.com.

Canada Packers Second Quarter 2026 Earnings Conference Webcast:

To participate via conference call, please dial-in 647-932-3411 or 1-800-715-9871. All dial-in participants should ask to join the Canada Packers call. To join the conference call without operator assistance, you may register at the following link: https://registrations.events/easyconnect/9857252/reczNCy022fBO6CQz/ . For those unable to participate at the scheduled time, playback will be made available within two hours after the event at 647-362-9199 or 1-800-770-2030, entry code: 9857252 #.

Within 48 hours following the event, the webcast replay will be archived and available on the Company's website at canadapackers.com/investors/events-and-presentations/.

About Canada Packers Canada Packers (TSX: CPKR) is one of North America's largest producers of raised without antibiotics (RWA) pork and is committed to its vision to be the global standard in sustainable pork. Headquartered in Mississauga, Ontario, Canada Packers delivers a premium mix of products to a diverse mix of customers in North America and across the globe through representative offices in China, South Korea, Japan, and the Philippines. The Company's integrated operations span hog production, processing, and value-added innovation. Proudly raised; Responsibly made.

Forward-looking statements

This document contains, and the Company's oral and written public communications often contain, "forward-looking information" within the meaning of applicable securities law. These statements are based on current expectations, estimates, projections, beliefs, judgments and assumptions based on information available at the time the applicable forward-looking statement was made and in light of the Company's experience combined with its perception of historical trends. Such statements include, but are not limited to, statements with respect to objectives and goals, in addition to statements with respect to beliefs, plans, targets, goals, objectives, expectations, anticipations, estimates, and intentions. Forward-looking statements are typically identified by words such as "anticipate", "continue", "estimate", "expect", "may", "will", "project", "should", "could", "would", "believe", "plan", "intend", "design", "target", "undertake", "view", "indicate", "maintain", "explore", "entail", "schedule", "objective", "strategy", "likely", "potential", "outlook", "aim", "propose", "goal", and similar expressions suggesting future events or future performance. These statements are not guarantees of future performance and involve assumptions, risks and uncertainties that are difficult to predict.

By their nature, forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements. The Company believes the expectations reflected in the forward-looking statements are reasonable, but no assurance can be given that these expectations will prove to be correct and such forward-looking statements should not be unduly relied upon.

Specific forward-looking information in this document may include, but is not limited to, statements with respect to the operating capacity of the processing facilities; expected sales channels; expected future cash flows and the sufficiency thereof, sources of capital at attractive rates, future contractual obligations, future financing options, renewal of credit facilities, compliance with credit facility covenants and availability of capital to fund growth plans including the Canada Packers capital investment program, operating obligations and dividends; the anticipated future financial performance of the Company; implications associated with the spread of foreign animal disease (such as African Swine Fever); operating risks, including the execution, monitoring and continuous improvement of the Company's food safety programs, animal health initiatives, cost reduction initiatives, and service levels; the impact of commodity prices and foreign exchange impacts on the Company's operations and financial performance, including the use and effectiveness of hedging instruments; the amount and timing of dividend payments including the tax treatment thereof; the adoption of new accounting standards and the impact of such adoption on the financial position of the Company; and competitive conditions and the Company's ability to position itself competitively in the markets in which it competes.

Various factors or assumptions are typically applied by the Company in drawing conclusions or making the forecasts, projections, predictions or estimations set out in the forward-looking statements. These factors and assumptions are based on information currently available to the Company, including information obtained by the Company from third-party sources and include but are not limited to, expectations regarding the adaptations in operations, supply chain, customer and consumer behaviour, economic patterns (including but not limited to global pork markets), energy costs and availability, foreign exchange rates, tariffs and other international trade dynamics, access to capital, and potential structural changes in global economic patterns; the competitive environment, associated market conditions (including tariffs) and market share metrics, category growth or contraction, the expected behaviour of competitors and customers and trends in consumer preferences; the success of the Company's business strategy and the relationship between pricing, inflation, volume and sales of the Company's products; prevailing commodity prices, implications of tariffs, interest rates, tax rates and exchange rates; the economic condition of and the sociopolitical dynamics between Canada, the U.S., Japan and China, and the ability of the Company to access markets and source ingredients and other inputs in light of global sociopolitical disruption, and the ongoing impact of global conflicts on inflation, trade and markets, including the conflicts in the Middle East and related disruptions to global energy markets, supply chains and transportation costs; the spread of foreign animal disease (including African Swine Fever) preparedness strategies to manage such spread, and implications for the global pork market; availability of and access to capital to fund future capital requirements and ongoing operations; prevailing regulatory, tax and environmental laws; and future operating costs and performance, including the Company's ability to achieve operating efficiencies and maintain sales volumes, turnover of inventories and turnover of accounts receivable.

Readers are cautioned that the assumptions on which this information is based may prove to be incorrect in whole or in part, and actual outcomes may differ materially from those anticipated in any forward-looking statements.

Factors that could cause actual results or outcomes to differ materially from the results expressed, implied, or projected in the forward-looking statements contained in this document include, among other things, risks associated with, the results of Canada Packers' execution of its business plan, the degree to which benefits are realized or not and the timing to realize those benefits, including the implications on the financial results; potential structural changes in global economic patterns which may have implications for the operations and financial performance of the Company, as well the ongoing implications for macro socio-economic trends, trade action and global conflict; macro-economic trends, including inflation, consumer behaviour, recessionary indicators, labour availability and labour market dynamics and international trade trends, including tariffs, duties and global pork markets; competition, market conditions, and the activities of competitors and customers, including the expansion or contraction of key categories, inflationary pressures, pork market dynamics and Japan export margins; the health status of livestock, including the impact of potential pandemics; international trade and access to markets and supplies, as well as social, political and economic dynamics, including global conflicts and related energy market disruptions; operating performance, including manufacturing operating levels, fill rates and penalties; availability of and access to capital, and compliance with credit facility covenants; decisions respecting the return of capital to shareholders; the execution of capital projects and investment in maintenance capital; food safety, consumer liability and product recalls; climate change, climate regulation and the Company's sustainability performance; strategic risk management; acquisitions and divestitures; fluctuations in the debt and equity markets; fluctuations in interest rates and currency exchange rates; cyclical nature of the cost and supply of hogs and the competitive nature of the pork market generally; the effectiveness of commodity and interest rate hedging strategies; impact of changes in the market value of the biological assets and hedging instruments; intellectual property rights and licensing; reputation; weather; compliance with government regulation and adapting to changes in laws; compliance with the tax ruling received by the CRA in relation to the Spin-Off; actual and threatened legal claims; consumer trends and changes in consumer buying patterns; environmental regulation and potential environmental liabilities; employment matters, including complying with employment laws across multiple jurisdictions, the potential for work stoppages due to non-renewal of collective agreements, recruiting and retaining qualified personnel, reliance on key personnel and succession planning; pricing of products; managing the Company's supply chain; changes in IFRS and other accounting standards that the Company is required to adhere to for regulatory purposes; logistical considerations outside of our control; and other factors as set out under the heading "Risk Factors" of the Management Information Circular dated March 13, 2026, filed on SEDAR+ on March 26, 2026. The Company cautions readers that the foregoing list of factors is not exhaustive.

All forward-looking statements included herein speak only as of the date hereof. Unless required by law, the Company does not undertake any obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. All forward-looking statements contained herein are expressly qualified by this cautionary statement.

SOURCE Canada Packers Inc.

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August 5, 2026 - 3:30 AM PDT

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