Lassonde processe packages and mark...

Lassonde processe packages and markets fruit juices and fruit drinks (94% of returns split about equally between juices and drinks-principally orange and apple works and a growing variety of fruit blends) and other aliments (e.g. canned corn on the spike dipping sauces, fondue bouillon and baked beans). proceedss are generally sold under the company's brand names (Oasis, Fruite, Rougemont Graves, Premium Collection, Canton, Puritan, etc) as well as in consequence of private labels. About 90% of Lassonde's productions are sold to food wholesalers for groceries chains (e.g. Loeb, Oshawa dispose Atlantic Wholesalers, Provigo, Metro, Hudon, Deauvelin and Sobeys) with the balance going to hospitals, [i]cabaret[/i]s and restaurants (through food services).

Approximately 65% of the company's returns are generated from sales in the province of Quebec; Ontario (19%); Maritimes (9%); Western Canada (1%); with the balance (6%) sold abroad in Europe and Asia. As well, Lassonde is a 25% partner in brace joint ventures in China to effect nectars (peach, apricot, apple and orange).

QUESTION #1: coming time SHARE PRICE FROM FUTURE extension IN REVENUES AND EPS

Estimated High Price according to the End of Fiscal Year 2001

A high price for Lassonde's subordinate voting shares ("LAS.A," MSE) is obtained through first estimating the company's EP in 2001 and then multiplying that number by dint of an estimated Price Earnings ("P/E") ratio for that year.

(a) Estimating income Growth to 2001. As indicated in the accompanying Guide, returns in this non-cyclical business grew at a pay by substitution rate of approximately 8% through year between 1989 and 1996 (estimated data)1. Estimated return growth in 1996 was simply about 6% as the come of a cold, rainy summer which minds to reduce the consumption of juices and drinks.

Lassonde's income growth has been driven principally on product innovations (e.g. new combines new packaging) and expansion outside of Quebec. of the present day plants were recently opened in Ontario and the Maritimes which allow the processing of local apple clips and the production of a dedicated replenish of products for the local region (rather than transporting harvests from Quebec.) The company markets its fruits through a dedicated sales force if it be not that relies on contractors to transport raw and finished outcomes

Recently, the company has obtained co-production contracts in Canada for Del Monte and Tetley

Future germination Lassonde expects revenue growth from: continued fruit innovation; increases in market share in the Maritimes and Ontario (including potential sales into the US); increased exports particularly to Asia and toward the south America; more co-production contracts; and, acquisitions.

In particular, the company wait fors further growth in refrigerated fruitss (not made from concentrate) versus shelf proceedss (made from concentrate). During the last five years the consumption of refrigerated issues has increased significantly from about 15% to 40% of the juice market with a decrease in consumption for shelf products; this shift in elections is expected to increase. Accordingly, while in 1994 refrigerated juices were not part of Lassonde's harvest line, by 1996 they are estimated to account for an estimated 10% of incomes These products will be introduced into the Maritime and Ontario markets and across the next five years might germinate to represent 25% of the company's returns

Allowing for continued geographic expansion (in Canada, the U and Asia); a broader returns mix; increased coproduction; and, near unfavourable developments over the nearest five years (e.g. some poor weather, difficulties in finding attractive acquisition candidates), an initial A good sense might project revenues to bourgeon on average, by about 10% for year between fiscal 1997 and 2001 to approximately $260 million.

(b) Controlling the preciousness of Making and Selling cropss The data in Part 2(1) of the Guide indicates that Lassonde's Operating Profit Margin2 ("OPM") has generally been steady at the 8%-9% even throughout the study period. In 1992 the company disposed of its unprofitable pastry fillings business and, in 1993 its nut business; one as well as the other had been undertaken as diversification risks in the 1980s.

The price of the company's raw materials are negotiated with associations of growers, for example, apple growers. Lassonde pays the growers more quickly than its competitors and believes that this practice gives it a competitive advantage in securing the desired quantity of issue particularly in years of poor harvests Large competitors and the large sustenance wholesalers that the company vends to keep the price of finished fruits very competitive. No additional fixed take away froms are associated with new sales in Ontario and the Maritimes.

(c) Controlling Interest costlinesss Lassonde's reliance on debt3 to finance its assets (recently $100 million) has fluctuated between 40% and 60% across the study period as a inference of equipment purchases and acquisitions. The company anticipates to continue its historical reliance forward debt to finance expansion, acquisitions and investments abroad.