DEAR FELLOW SHAREHOLDERS:
I apologize for being late in getting out the newsletter this month. We were in South Florida working with our distributor on placing Soy2O™ into our listing with Publix® stores there. That is a very good chain for not only Soy2O™, but our products generally and I am pleased that we are developing that relationship.
Initial indications for our Fall food selling season are good. Customer demand is strong and we are aided by an improving Canadian/US dollar exchange rate. It is interesting to note that with the Canadian dollar reaching an 11 year high of more than $0.82 US last week there has now been a more than 30% improvement in the relative value of the Canadian dollar since 2002. That change directly impacts our gross margins. As most of the raw materials that we purchase are denominated in US dollars, that provides us a direct margin benefit in Canada and is a flow through to US sales. Although it is certainly difficult to forecast exchange rates, we anticipate the Canadian dollar staying close to $0.80 US throughout the balance of this fiscal year.
Production volumes for certain of our co-pack customers slackened in September, partly due to the change in season, but also due to the colder than average Summer in Central and Eastern North America. We anticipate that customer inventories will adjust early this month to allow us to get back on schedule.
This is the time of year that we set the stage for next Spring and Summer. It is important now for us to obtain new listings and work ourselves into more and more retail shelf schematics. Early indications are that we are significantly increasing our shelf space in a broad cross-section of retailers both in Canada and the United States. We have substantially increased our budgets for listing fee allowances and promotions for beverages next year and have several promotions underway in Canada surrounding Caesar® and our cracker lines and Soy2O™ in the US.
Thank you for your continued support.
LEADING BRANDS, INC.
Ralph D. McRae
Chairman & CEO
Certain information contained in this press release includes forward-looking statements. Words such as “believe”, “expect,” “will,” or comparable terms, are intended to identify forward-looking statements concerning the Company’s expectations, beliefs, intentions, plans, objectives, future events or performance and other developments. All forward-looking statements included in this press release are based on information available to the Company on the date hereof. Such statements speak only as of the date hereof. Important factors that could cause actual results to differ materially from the Company’s estimations and projections are disclosed in the Company’s securities filings and include, but are not limited to, the following: general economic conditions, weather conditions, changing beverage consumption trends, pricing, availability of raw materials, economic uncertainties (including currency exchange rates), government regulation, managing and maintaining growth, the effect of adverse publicity, litigation, competition and other risk factors described from time to time in securities reports filed by Leading Brands, Inc.