MONTRÉAL, Aug. 06, 2026 (GLOBE NEWSWIRE) -- Saputo Inc. (TSX: SAP) (we, Saputo or the Company) reported today its financial results for the first quarter of fiscal 2027, which ended on June 30, 2026. All amounts in this news release are in millions of Canadian dollars (CDN), except per share amounts, unless otherwise indicated, and are presented according to International Financial Reporting Standards (IFRS) Accounting Standards. The results of the remaining 20% interest in the previously owned Dairy Division (Argentina), which had historically been reported within the International Sector and for which comparative information has been re-presented following its classification as a discontinued operation, continue to be accounted for as an investment in an associate using the equity method and are presented within the International Sector.

“We delivered a strong start to fiscal 2027, with all four sectors contributing to stronger results, and broad-based earnings growth,” said Carl Colizza, President and CEO. “Our performance this quarter was driven by strong sales volumes across our business, and by clear momentum in our ingredients platform, where sustained demand for high-protein dairy and constructive market conditions translated directly into results. This reflects the payoffs from the investments we have made to expand capacity, upgrade our production network, and build a more efficient, lower-cost platform, and it reinforces our conviction in the categories and platforms where we have chosen to invest and grow. With a more focused portfolio, a strengthened balance sheet, and disciplined execution, we are well positioned to keep converting demand into higher-quality, sustainable earnings.”

FINANCIAL HIGHLIGHTS

All operating sectors delivered higher profitability than the first quarter of the prior year, contributing to strong earnings growth. Results benefited from recent investments in incremental capacity and production capabilities, as well as commercial momentum and operational efficiencies, driving margin expansion despite ongoing inflationary pressures.

• Revenues of $4.421 billion, up $65 million or 1.5%, were mainly driven by higher dairy ingredient market prices, volume growth of high-protein ingredients, and higher selling prices implemented to mitigate inflationary pressures.
• Adjusted EBITDA¹ of $427 million, up $30 million or 7.6%, with an adjusted EBITDA margin¹ of 9.7%, up from 9.1%.
  • Our results benefited from recent investments to expand capacity and upgrade our production capabilities, which increased our ability to meet demand for high-protein ingredients;
  • Higher market prices of our high-protein ingredients were favourable;
  • Commercial initiatives supported a favourable product mix, driven by increased demand in high-protein dairy and ingredients, as well as branded products;
  • Operational improvements in manufacturing and warehousing, supported by ongoing network optimization initiatives, contributed to productivity gains and cost efficiencies;
  • Pricing actions in domestic markets and higher international cheese and dairy ingredient market prices helped mitigate inflationary pressures on input costs, such as higher labour, fuel, transportation, and packaging expenses; and
  • Higher selling, general, and administrative costs were driven by wages and compensation, continued investments in technology and digital initiatives, and incremental advertising and promotional activities to support core brands.
• Net earnings from continuing operations totalled $183 million or $0.46 per share (basic) and $0.45 per share (diluted), up $26 million. The increase in net earnings was mainly due to higher adjusted EBITDA¹ , as discussed above, lower financial charges and restructuring costs, partially offset by higher depreciation and amortization, and higher income tax expense. The increase in EPS also reflects a reduction in weighted average common shares outstanding resulting from shares purchased under our normal course issuer bid (NCIB).
• Adjusted net earnings from continuing operations¹ totalled $199 million or $0.49 per share¹ (basic and diluted), up $23 million or $0.07 per share. The increase in adjusted EPS from continuing operations¹ was mainly due to higher net earnings from continuing operations, as discussed above, and reflected a reduction in weighted average common shares outstanding resulting from shares purchased under our NCIB.
• Net earnings totalled $3 million, down $162 million. The decrease in net earnings was mainly due to a loss from discontinued operations⁴ due to the loss on disposal of discontinued operations after income taxes. This loss reflected the non-cash impact of recycling cumulative amounts previously recognized in other comprehensive income related to the Dairy Division (Argentina) to the consolidated income statement upon its sale, partially offset by the gain on disposal, net of income taxes. This decrease was partially offset by an increase in net earnings from continuing operations, as discussed above.
• Net cash from operating activities from continuing operations totalled $151 million, down $111 million or 42.4%. The decrease is mainly due to higher working capital usage partially offset by higher adjusted EBITDA¹.
• The Company received proceeds of approximately $710 million ($508 million USD), representing approximately $612 million after tax ($440 million USD), from the sale of its 80% interest in the Dairy Division (Argentina).
• The Company returned capital to shareholders through the purchase of 7.2 million common shares for a total purchase price of approximately $300 million and the payment of dividends totalling $80 million.

KEY EVENTS

• The Board of Directors reviewed the dividend policy and increased the quarterly dividend from $0.20 per share to $0.21 per share, representing a 5% increase. The quarterly dividend will be payable on September 25, 2026, to shareholders of record on September 15, 2026.
• Subject to the Toronto Stock Exchange's (TSX) approval, the Company intends to amend its NCIB to increase the maximum number of common shares that may be repurchased for cancellation from 20,498,278 shares to approximately 24,000,000 shares, representing the maximum 10% of public float permitted under TSX rules. The Company expects to continue actively repurchasing shares, supported by the strength of its balance sheet.
• On June 22, 2026, we announced that we entered into an agreement with Danone Asia Pte Ltd to sell our interest in the Danone Saputo Dairy Australia (DSDA) joint venture, within our Dairy Division (Australia). The transaction is subject to regulatory approval and is expected to close in the second half of calendar 2026. The agreed consideration is approximately $253 million (AU$257 million), subject to customary post-closing adjustments in accordance with the terms of the agreement.
• On June 18, 2026, we completed the transaction announced on February 12, 2026, and sold an 80% interest in our Dairy Division (Argentina) to Gloria Foods, the dairy and food holding company of Grupo Gloria. In connection with the closing, Saputo received proceeds of approximately $710 million ($508 million USD), representing approximately $612 million after tax ($440 million USD), and retains a 20% ownership interest in the business. The business remains the leading dairy processor in Argentina.
• On June 19, 2026, the Company used the proceeds from the sale of an 80% interest in the Dairy Division (Argentina) to repay the $350 million aggregate principal amount of its Series 8 senior unsecured notes and outstanding bank loans, as well as for general corporate purposes.
   

Additional Information

For more information, reference is made to the condensed interim consolidated financial statements, the notes thereto and to the Management’s Discussion and Analysis for the first quarter of fiscal 2027. These documents can be obtained on SEDAR+ under the Company’s profile at www.sedarplus.ca and in the “Investors” section of the Company’s website, at www.saputo.com.

Webcast and Conference Call

A webcast and conference call will be held on Friday, August 7, 2026, at 8:30 a.m. (Eastern Time).

The webcast will begin with a short presentation followed by a question and answer period. The speakers will be Carl Colizza, President and CEO, and Maxime Therrien, CFO and Secretary.

To participate:

• Webcast: A live webcast of the event can be accessed using this link.
  Presentation slides will be included in the webcast and can also be accessed in the “Investors” section of Saputo's website (www.saputo.com), under “Calendar of Events”.
  
  
• Conference line: 1-800-715-9871; Conference ID: 3910029
  Please dial in five minutes prior to the start time.

Replay of the conference call and webcast presentation
For those unable to join, the webcast presentation will be archived on Saputo’s website (www.saputo.com) in the “Investors” section, under “Calendar of Events”.

About Saputo

Saputo, one of the top ten dairy processors in the world, produces, markets, and distributes a wide array of dairy products of the utmost quality, including cheese, fluid milk, extended shelf-life milk and cream products, cultured products, and dairy ingredients. Saputo is a leading cheese manufacturer and fluid milk and cream processor in Canada, and a leading dairy processor in Australia. In the USA, Saputo is a leading cheese producer and extended shelf-life and cultured dairy products manufacturer. In the United Kingdom, Saputo is the leading manufacturer of branded cheese and dairy spreads. In addition to its dairy portfolio, Saputo produces, markets, and distributes a range of dairy alternative products. Saputo products are sold in several countries under market-leading brands, as well as private label brands. Saputo Inc. is a publicly traded company and its shares are listed on the Toronto Stock Exchange under the symbol “SAP”. Follow Saputo’s activities at www.saputo.com or via Facebook, Instagram, and LinkedIn.

Investor Inquiries
Nicholas Estrela
Senior Director, Investor Relations 1-514-328-3117

Media Inquiries
1-514-328-3141 / 1-866-648-5902
media@saputo.com
 

CAUTION REGARDING FORWARD-LOOKING STATEMENTS

This news release contains statements which are forward-looking statements within the meaning of applicable securities laws. These forward-looking statements include, among others, statements with respect to our objectives, outlook, business projects, strategies, beliefs, expectations, targets, commitments, goals, ambitions and strategic plans including our ability to achieve these targets, commitments, goals, ambitions and strategic plans, and statements other than historical facts. The words “may”, “could”, “should”, “will”, “would”, “believe”, “plan”, “expect”, “intend”, “anticipate”, “estimate”, “foresee”, “objective”, “continue”, “propose”, “aim”, “commit”, “assume”, “forecast”, “predict”, “seek”, “project”, “potential”, “goal”, “target”, or “pledge”, or the negative of these terms or variations of them, the use of conditional or future tense or words and expressions of similar nature, are intended to identify forward-looking statements. All statements other than statements of historical fact included in this news release may constitute forward-looking statements within the meaning of applicable securities laws.

By their nature, forward-looking statements are subject to inherent risks and uncertainties. Actual results could significantly differ from those stated, implied, or projected in such forward-looking statements. As a result, we cannot guarantee that any forward-looking statements will materialize, and we warn readers that these forward-looking statements are not statements of historical fact or guarantees of future performance in any way. Assumptions, expectations, and estimates made in the preparation of forward-looking statements and risks and uncertainties that could cause actual results to significantly differ from current expectations are discussed in our materials filed with the Canadian securities regulatory authorities from time to time, including the “Risks and Uncertainties” section of the Management's Discussion and Analysis dated June 4, 2026, available on SEDAR+ under the Company's profile at www.sedarplus.ca.

Such risks and uncertainties include the following: product liability; the availability and price variations of milk and other dairy ingredients, our ability to transfer input costs increases, if any, to our customers in competitive market conditions; supply chain strain and supplier concentration; the price fluctuation of dairy products in the countries in which we operate, as well as in international markets; continuing economic and geopolitical uncertainties; changes in international trade agreements and policies, including those that may result from tariffs, quotas, trade barriers and other similar restrictions; actual or perceived changes in the condition of the economy or economic slowdowns or recessions; changes in consumer trends; our ability to identify, attract, and retain qualified individuals; the increased competitive environment in our industry; consolidation of clientele; cyber threats and other information technology-related risks relating to business disruptions, confidentiality, data integrity and business and email compromise-related fraud; changes to tariff protection on dairy; unanticipated business disruption; changes in environmental laws and regulations; the potential effects of climate change; increased focus on environmental sustainability matters; public health threats; the failure to execute our growth strategy as expected or to adequately integrate acquired businesses in a timely and efficient manner, or to realize the anticipated benefits from divestitures; the failure to complete capital expenditures as planned; changes in interest rates and access to capital and credit markets. There may be other risks and uncertainties that we are not aware of at present, or that we consider to be insignificant, that could still have a harmful impact on our business, financial state, liquidity, results, or reputation.

Forward-looking statements are based on Management’s current estimates, expectations and assumptions regarding, among other things; the projected revenues and expenses; the economic, industry, competitive, and regulatory environments in which we operate or which could affect our activities; international trade policies; our ability to identify, attract, and retain qualified and diverse individuals; our ability to attract and retain customers and consumers; the results of our sustainability efforts; the effectiveness of our environmental and sustainability initiatives; our operating costs; the pricing of our finished products on the various markets in which we carry on business; the successful execution of our growth strategy; our ability to deploy capital expenditure projects as planned; reliance on third parties; our ability to gain efficiencies and cost optimization from strategic initiatives; our ability to correctly predict, identify, and interpret changes in consumer preferences and demand, to offer new products to meet those changes, and to respond to competitive innovation; our ability to leverage our brand value; our ability to drive revenue growth in our key product categories or platforms or add products that are in faster-growing and more profitable categories; the market supply and demand levels for our products; our warehousing, logistics, and transportation costs; our effective income tax rate; the exchange rate of the Canadian dollar relative to other currencies we use for our business. Our financial performance goals and ambitions are set using assumptions regarding, among others: the absence of significant deterioration in macroeconomic conditions; tariffs, quotas, trade barriers and other similar restrictions; our ability to mitigate inflationary cost pressure; ingredient markets, commodity prices, foreign exchange; labour market conditions; the impact of price elasticity; our ability to increase the production capacity and productivity in our facilities; the efficiency of our network and cost optimization initiatives, and the demand growth for our products. Our ability to achieve our environmental targets, pledges, commitments, and goals (together, our “environmental targets”) is further subject to, among others: the development, effectiveness and costs of solutions to reduce emissions in dairy production systems; the ability of the Company and our industry to develop sustainable incentive models to reduce emissions; the availability of and our ability to access and implement the technology necessary to achieve our environmental targets at reasonable and sustainable costs; the development and performance of technology, innovation and the future use and deployment of technology and associated expected future results; the accessibility at sustainable costs of carbon and renewable energy instruments for which a market is still developing and which are subject to risk of invalidation or reversal; environmental regulation, and our ability to leverage our supplier relationships and our sustainability advocacy efforts.

Management believes that these estimates, expectations, and assumptions are reasonable as of the date hereof, and are inherently subject to significant business, economic, competitive, and other uncertainties and contingencies regarding future events, and are accordingly subject to changes after such date. Forward-looking statements are intended to provide shareholders with information regarding Saputo, including our assessment of future financial plans, and may not be appropriate for other purposes. Undue importance should not be placed on forward-looking statements, and the information contained in such forward-looking statements should not be relied upon as of any other date.

Unless otherwise indicated by Saputo, forward-looking statements in this news release describe our estimates, expectations, and assumptions as of the date hereof, and, accordingly, are subject to change after that date. Except as required under applicable securities legislation, Saputo does not undertake to update or revise forward-looking statements, whether written or verbal, that may be made from time to time by itself or on our behalf, whether as a result of new information, future events, or otherwise. All forward-looking statements contained herein are expressly qualified by this cautionary statement.

OPERATING SECTOR REVIEW

Revenues

Revenues for the first quarter of fiscal 2027 totalled $1.397 billion, up $76 million or 5.8%, as compared to $1.321 billion for the same quarter last fiscal year.

The increase in revenues was driven by higher sales volumes in our cheese, dairy foods, and milk categories, as well as by a favourable product mix. The favourable product mix was driven by stronger sales of value-added beverages and cultured products, fueled by consumer demand for high-protein offerings. Strategic advertising and promotional investments also supported sales volumes growth for our Armstrong and Saputo brands across several key customers.

Revenues also increased due to higher selling prices implemented to mitigate inflationary pressures on input costs and the higher cost of milk as raw material.

Adjusted EBITDA

Adjusted EBITDA for the first quarter of fiscal 2027 totalled $175 million, up $5 million or 2.9%, as compared to $170 million for the same quarter last fiscal year. Adjusted EBITDA margin was 12.5%, down from 12.9%.

The increase in adjusted EBITDA was primarily driven by higher sales volumes and a favourable product mix.

Manufacturing efficiencies driven by our capital investments in automation and optimized production capabilities continued to support adjusted EBITDA growth.

Inflationary pressures increased input costs, primarily related to labour, logistics, and packaging.

Higher selling, general, and administrative costs were driven by increased wages and compensation, continued investments in technology and digital initiatives, and incremental advertising and promotional activities to support our core brands.

Cost increases were mitigated to some extent by the benefits from our ongoing cost optimization measures on selling, general, and administrative costs.

Other elements

Depreciation and amortization for the first quarter of fiscal 2027 totalled $30 million, up $1 million, as compared to $29 million for the same quarter last fiscal year.

Revenues

Revenues for the first quarter of fiscal 2027 totalled $2.106 billion, down $22 million or 1.0%, as compared to $2.128 billion for the same quarter last fiscal year.

Revenues were negatively impacted by lower US dairy commodity market pricing³, due to the lower average block and butter market prices². This decrease was partially offset by higher dairy ingredient market prices and higher selling prices implemented to mitigate inflationary pressures.

Revenues were positively impacted by higher sales volumes and a favourable product mix, reflecting increased sales of cheese and of high-protein ingredients. Demand for protein-rich and value-added dairy products supported growth in our dairy ingredients and cultured product categories.

The conversion of the US dollar to the Canadian dollar had a minimal impact.

Adjusted EBITDA

Adjusted EBITDA for the first quarter of fiscal 2027 totalled $181 million, up $10 million or 5.8%, as compared to $171 million for the same quarter last fiscal year. Adjusted EBITDA margin was 8.6%, up from 8.0%.

Our results benefited from recent investments to expand capacity and upgrade our production capabilities, which increased our ability to meet demand for high-protein ingredients.

Higher market prices of our high-protein ingredients had a favourable impact on results. Cheese market dynamics remained challenging due to an unfavourable milk-cheese spread², despite the benefit from the new milk pricing formula, which contributed to a full-quarter compared to a partial-quarter last fiscal year.

Higher sales volumes and a favourable product mix positively impacted results, supported by our commercial initiatives that drove volume growth across several key customers and product categories, and contributed to margin improvement.

The increase in adjusted EBITDA also reflected operational improvements, including efficiencies from our consolidated Midwest warehousing facility, the elimination of duplicate operating costs across plants, and disciplined execution on customer fulfillment.

Inflationary pressures increased input costs, primarily related to labour, logistics, and packaging.

Higher selling, general, and administrative costs were driven by higher wages and compensation, continued investments in technology and digital initiatives, and incremental advertising and promotional activities to support our core brands. Those cost increases were mitigated to some extent by the benefits from our ongoing cost optimization measures on selling, general, and administrative costs.

Other elements

Depreciation and amortization for the first quarter of fiscal 2027 totalled $67 million, flat, as compared to the same quarter last fiscal year.

INTERNATIONAL SECTOR

The International Sector consists of the Dairy Division (Australia).

Revenues

Revenues for the first quarter of fiscal 2027 totalled $635 million, up $45 million or 7.6%, as compared to $590 million for the same quarter last fiscal year.

Higher international cheese and dairy ingredient market prices in our export markets, primarily driven by higher market prices of our high-protein ingredients, had a favourable impact. In our domestic markets, revenues increased due to higher selling prices implemented to mitigate inflationary pressures.

Lower export sales volumes were partially offset by higher domestic sales volumes, in line with our portfolio optimization strategy to reposition sales volumes toward our domestic markets and high-protein export ingredients.

The conversion of Australian dollars to Canadian dollars had a favourable impact.

Adjusted EBITDA

Adjusted EBITDA for the first quarter of fiscal 2027 totalled $38 million, up $12 million or 46.2%, as compared to $26 million for the same quarter last fiscal year. Adjusted EBITDA margin was 6.0%, up from 4.4%.

Margin expansion was further supported by a more favourable product mix, reflecting the impact of our portfolio optimization strategy.

The favourable impact of higher international cheese and dairy ingredient market prices helped mitigate the impact of higher milk costs.

Increased milk availability, due mostly to improved weather conditions in key milk-producing regions, favourably impacted efficiencies and the absorption of fixed costs.

Inflationary pressures increased input costs, primarily related to labour, logistics, and packaging.

Higher selling, general, and administrative costs were driven by continued investments in technology and digital initiatives, and incremental advertising and promotional activities to support our core brands. Those cost increases were mitigated to some extent by the benefits from our ongoing cost optimization measures on selling, general, and administrative costs.

The conversion of Australian dollars to Canadian dollars had a favourable impact.

Other elements

Depreciation and amortization for the first quarter of fiscal 2027 totalled $27 million, up $4 million, as compared to $23 million for the same quarter last fiscal year.

This increase was mainly attributable to the net effect of the commissioning and decommissioning of assets in connection with our strategic capital projects.

EUROPE SECTOR

Revenues

Revenues for the first quarter of fiscal 2027 totalled $283 million, down $34 million or 10.7%, as compared to $317 million for the same quarter last fiscal year.

Revenues decreased due to lower sales volumes of bulk cheese, as a result of lower milk intake, partially offset by higher branded cheese sales volumes.

Lower selling prices, reflecting input cost deflation, negatively impacted revenues.

The conversion of the British pound sterling to the Canadian dollar had a favourable impact.

Adjusted EBITDA

Adjusted EBITDA for the first quarter of fiscal 2027 totalled $33 million, up $3 million or 10.0%, as compared to $30 million for the same quarter last fiscal year. Adjusted EBITDA margin was 11.7%, up from 9.5%.

The improved performance was mainly driven by favourable product mix, which resulted from lower bulk cheese and higher branded cheese sales volumes, primarily due to volume growth of our Cathedral City brand. The consolidation of cheese packing operations at Nuneaton and the transition of our ingredients strategy delivered operational efficiencies and cost savings. Inflationary pressures increased input costs, primarily related to labour, logistics, and packaging.

Incremental investments in advertising and promotional activities to support our core brands were incurred in the quarter. Those cost increases were mitigated to some extent by the benefits from our ongoing cost optimization measures on selling, general, and administrative costs.

Other elements

Depreciation and amortization for the first quarter of fiscal 2027 totalled $25 million, down $2 million, as compared to $27 million for the same quarter last fiscal year.

This decrease was mainly attributable to the net effect of the commissioning and decommissioning of assets in connection with our strategic capital projects.

There were no restructuring costs in the first quarter of fiscal 2027. In the first quarter of fiscal 2026, restructuring costs totalled $6 million and comprised severance costs in connection to our decision to stop manufacturing certain functional dairy ingredients, as well as the optimization of selling, general, and administrative costs.

FY27 OUTLOOK

• The operating environment continues to be shaped by macroeconomic and geopolitical uncertainty, including inflationary pressures, volatile consumer sentiment, tariff uncertainty, and ongoing geopolitical conflicts, particularly in the Middle East, which continue to influence input costs, energy prices, supply chains, and end-market demand across regions.
• Higher volumes and improved product mix are anticipated in certain categories, supported by an enhanced commercial strategy increasingly centred on disciplined, category-led growth, prioritizing returns, customer quality, and long-term brand strength over undifferentiated volume expansion. This approach is supported by enhanced commercial capabilities, pricing governance, and focused investment, positioning Saputo to navigate market uncertainty while pursuing sustainable and value-accretive growth.
• Demand for high-protein and value-added dairy products continues to exhibit solid underlying momentum, despite evolving consumption patterns and variability across markets, reinforcing the importance of portfolio and market segment diversification.
• Operating efficiencies are expected to continue to improve as recent capital investments scale, supporting productivity, cost absorption, and network optimization. Saputo remains focused on operating as a low-cost manufacturer of high-quality dairy products, through ongoing investments in technology and automation, as well as cost discipline.
• The US ingredients portfolio is expected to maintain its positive momentum, supported by international pricing and sustained demand for high-protein ingredients. In contrast, cheese market dynamics in the USA are expected to continue reflecting increased milk production and herd expansion, resulting in greater cheese supply, alongside timing differences between input costs, pricing mechanisms, and inventory realization cycles.
• Capital expenditures are expected to increase relative to FY26 to approximately $515 million, as previously disclosed, reflecting disciplined investment in high-return projects focused on fast-growing dairy segments, capacity optimization, and operational efficiency, with timing and returns subject to execution, and project phasing.
• Selling, general, and administrative expenses are expected to reflect higher labour costs, investments in technology and digital initiatives, and planned increases in advertising and promotional spending to support our brands, as well as commercial and growth initiatives. Those increases are expected to be partially offset by ongoing administrative cost optimization, structural simplification, and efficiency initiatives.
• Saputo maintains a disciplined approach to capital allocation, with a focus on reinvesting cash flows into organic growth initiatives, capital expenditures, and disciplined M&A aligned with its strategic priorities. Capital deployment decisions are guided by cash flow generation, enabling disciplined investment in growth while maintaining balance sheet strength and capacity to return capital to shareholders over time.
• Overall, Saputo’s outlook reflects a disciplined approach centred on operating efficiency, a more focused and integrated commercial strategy, and continued investment to capture the long-term opportunity in dairy. By strengthening its cost position, supporting market-leading brands and value-added innovation, and expanding its portfolio across products and market segments, the Company believes it is well positioned to navigate market uncertainty while creating sustainable value for stakeholders.

See Caution Regarding Forward-Looking Statements.

SELECTED QUARTERLY FINANCIAL INFORMATION

(in millions of CDN dollars, except per share amounts and ratios)

Quarterly financial information by sector

NON-GAAP MEASURES

We report our financial results in accordance with GAAP and generally assess our financial performance using financial measures that are prepared using GAAP. However, this news release also refers to certain non-GAAP and other financial measures which do not have a standardized meaning under GAAP, and are described in this section.

We use non-GAAP measures and ratios to provide investors with supplemental metrics to assess and measure our operating performance and financial position from one period to the next. We believe that those measures are important supplemental metrics because they eliminate items that are less indicative of our core business performance and could potentially distort the analysis of trends in our operating performance and financial position. We also use non-GAAP measures to facilitate operating and financial performance comparisons from period to period, to prepare annual budgets and forecasts, and to determine components of management compensation. We believe these non-GAAP measures, in addition to the financial measures prepared in accordance with GAAP, enable investors to evaluate the Company's operating results, underlying performance, and future prospects in a manner similar to management. These metrics are presented as a complement to enhance the understanding of operating results but not in substitution of GAAP results.

These non-GAAP measures have no standardized meaning under GAAP and are unlikely to be comparable to similar measures presented by other issuers. Our method of calculating these measures may differ from the methods used by others, and, accordingly, our definition of these non-GAAP financial measures may not be comparable to similar measures presented by other issuers. In addition, non-GAAP financial measures should not be viewed as a substitute for the related financial information prepared in accordance with GAAP. This section provides a description of the components of each non-GAAP measure used in this news release and the classification thereof.

NON-GAAP FINANCIAL MEASURES AND RATIOS

A non-GAAP financial measure is a financial measure that depicts the Company's financial performance, financial position, or cash flow and either excludes an amount that is included in or includes an amount that is excluded from the composition of the most directly comparable financial measures disclosed in the Company's financial statements. A non-GAAP ratio is a financial measure disclosed in the form of a ratio, fraction, percentage, or similar representation and that has a non-GAAP financial measure as one or more of its components.

Below are descriptions of the non-GAAP financial measures and ratios that we use as well as reconciliations to the most comparable GAAP financial measures, as applicable.

Adjusted net earnings from continuing operations

Adjusted net earnings from continuing operations is defined as net earnings (loss) from continuing operations before the following items (when they occur): restructuring costs, amortization of intangible assets related to business acquisitions, net of applicable income taxes. We believe that this financial measure provides useful information to investors because it provides precision with regards to our ongoing operations by eliminating the impact of non-operational or non-cash items. We believe that in the context of our history of business acquisitions, this provides a more effective measure to assess performance against the Company's peer group, including due to the application of various accounting policies in relation to the amortization of acquired intangible assets.

We also believe adjusted net earnings from continuing operations is useful to investors because it helps identify underlying trends in our business that could otherwise be masked by certain write-offs, charges, income, or recoveries that can vary from period to period. We believe that securities analysts, investors, and other interested parties also use this measure to evaluate the performance of issuers. Excluding these items does not imply they are non-recurring. This measure does not have any standardized meaning under GAAP and is therefore unlikely to be comparable to similar measures presented by other companies.

The following table provides a reconciliation, net of applicable income taxes, of net earnings from continuing operations to adjusted net earnings from continuing operations:

Adjusted EPS basic and adjusted EPS diluted from continuing operations

Adjusted EPS basic from continuing operations (adjusted net earnings from continuing operations per basic common share) and adjusted EPS diluted from continuing operations (adjusted net earnings from continuing operations per diluted common share) are non-GAAP ratios and do not have any standardized meaning under GAAP. Therefore, these measures are unlikely to be comparable to similar measures presented by other issuers. We define adjusted EPS basic and diluted from continuing operations as adjusted net earnings from continuing operations divided by the basic and diluted weighted average number of common shares outstanding for the period. Adjusted net earnings from continuing operations is a non-GAAP financial measure. For more details, refer to the discussion above.

We use adjusted EPS basic and diluted from continuing operations, and we believe that certain securities analysts, investors, and other interested parties use these measures, among other ones, to assess the performance of our business without the effect of restructuring costs and amortization of intangible assets related to business acquisitions. We exclude these items because they affect the comparability of our financial results and could potentially distort the analysis of trends in business performance. Adjusted EPS from continuing operations is also a component in the determination of long-term incentive compensation for management.

TOTAL OF SEGMENTS MEASURES

A total of segments measure is a financial measure that is a subtotal or total of two or more reportable segments and is disclosed within the notes to Saputo's consolidated financial statements, but not in its primary financial statements. Consolidated adjusted EBITDA is a total of segments measures.

Consolidated adjusted EBITDA is the total of the adjusted EBITDA of our four geographic sectors. We report our business under four sectors: Canada, USA, International, and Europe. The Canada Sector consists of the Dairy Division (Canada), the USA Sector consists of the Dairy Division (USA), the International Sector consists of the Dairy Division (Australia), and the Europe Sector consists of the Dairy Division (UK). We sell our products in three different market segments: retail, foodservice, and industrial.

Adjusted EBITDA and adjusted EBITDA margin

Adjusted EBITDA is defined as net earnings (loss) from continuing operations before the following items (when they occur): income taxes, financial charges, restructuring costs, (gain) loss on disposal of assets, goodwill and intangible assets impairment charge, and depreciation and amortization. Net earnings (loss) from continuing operations before income taxes, financial charges, restructuring costs, (gain) loss on disposal of assets, goodwill and intangible assets impairment charge, and depreciation and amortization is a measure which is presented on the consolidated income statements. Adjusted EBITDA margin consists of adjusted EBITDA expressed as a percentage of revenues.

We believe that adjusted EBITDA and adjusted EBITDA margin provide investors with useful information because they are common industry measures. These measures are also key metrics of the Company's operational and financial performance without the variation caused by the impacts of the elements itemized below and provide an indication of the Company's ability to seize growth opportunities in a cost-effective manner, finance its ongoing operations, and service its long-term debt. Adjusted EBITDA is the key measure of profit used by management for the purpose of assessing the performance of each sector and of the Company as a whole, and to make decisions about the allocation of resources. We believe that securities analysts, investors, and other interested parties also use adjusted EBITDA to evaluate the performance of issuers. Adjusted EBITDA is also a component in the determination of short-term incentive compensation for management.

The following tables provide a reconciliation of net earnings from continuing operations to adjusted EBITDA on a consolidated basis.

Revenues, adjusted EBITDA, and depreciation and amortization of International Sector and Europe Sector Subtotals are total of segments measures, as reconciled to total consolidated measures in the below tables.

¹    Comparative information has been re-presented to reflect discontinued operations.