Business News: Planet Organic Gets a Haircut

Things have been very turbulent at Planet Organic for some time. A $16.7 million dollar loss in a single quarter is serious. The company hopes the worst is behind and sales remain strong.

Planet Organic Health Corp Announces Third Quarter Results

Canada NewsWire

EDMONTON, May 31

EDMONTON, May 31 /CNW/ - Planet Organic Health Corp (TSX Venture Exchange - POH), Canada's leading natural products retailer announces their financial results for the third quarter ended March 31, 2010. Sales from continuing operations for the quarter ended March 31, 2010 were $28.3 million compared to $29.3 million for the same period in 2009, a decrease of $1.0 million, or 3.4%. Foreign currency translation differences accounted for $2.3 million of the decrease. By removing the impact of foreign currency translation differences, third quarter sales actually increased by 4% over last year.

Sales from continuing operations for the nine months ended March 31, 2010 were $83.0 million compared to $84.0 million for the nine months ended March 31, 2009, a decrease of $1.0 million, or 1.2%. Removing the significant impact of foreign currency translation differences, year to date sales increased by 4%.

For the third quarter, the Corporation recorded a net loss from continuing operations of $16.7 million compared to a loss of $1.3 million last year. However, the current quarter includes an impairment charge of $17.7 million, which, if removed, results in an adjusted net income for the current quarter of $1.1 million. For the nine months ended March 31, 2010, the Corporation recorded a net loss from continuing operations of $20.3 million, compared to a loss of $5.0 million for the first nine months last year. However, the current year includes an impairment charge of $17.7 million and a loss on debt extinguishment of $2.1 million which, if removed from the current year, results in a net loss of $2.6 million.

EBITDASX from continuing operations before restructuring costs for the quarter was $2.0 million, or 57% higher than the third quarter last year. The increase was driven primarily by strong gross margins and expenditure control. On a year to date basis, EBITDASX before restructuring charges of $4.7 million is 42% higher than last year. Restructuring charges include one-time restructuring expenses and losses on debt extinguishment.

The Planet Organic Market division, operating in nine locations in Canada throughout the quarter, reported sales for the quarter ended March 31, 2010 of $16.3 million, an increase of 5.8% over the same period last year. Same store sales increased by 9.9% over the third quarter last year, continuing the sales recovery that began last quarter.

The Mrs. Green's Natural Market division, operating in eleven US locations, reported sales of $12.0 million for the quarter ended March 31, 2010, a decrease of 13.7% over the third quarter last year. However, the decrease was entirely attributable to changes in foreign currency translation. Same store sales, which exclude the impact of foreign exchange translation differences, grew by 2.8% from the same quarter last year, also continuing the sales recovery that began last quarter.

"We are continuing to see sales growth in both our Canadian and US divisions that began in the second quarter." reports Darren Krissie, Executive Vice President, adding that "new and innovative marketing has been particularly successful in Planet Organic Market stores."

To view the full statement