Tri-White Corporation
announces 2005 year
end results
and regular dividend
of $0.06 per share
Tuesday February 28, 5:41 pm ET
Tri-White Corporation (TSX:
TWH)
Financial Highlights
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Year Ended
(in thousands of dollars -------------------------------------
except per share amounts) December 31, 2005 December 31, 2004
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Revenue 41,531 41,679
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EBITDA(1) 18,353 19,002
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Interest and other income (expense) 3,785 655
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Equity earnings 1,530 1,062
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Provision for income taxes (8,071) (7,249)
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Net earnings 12,192 10,176
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Earnings per share - basic $0.53 $0.44
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Weighted average shares outstanding,
on a post consolidation basis 22,900 22,885
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(1) EBITDA is not a recognized performance measure under Canadian GAAP.
EBITDA is defined as earnings before interest, taxes, depreciation,
amortization and earnings from equity accounted investments.
Management believes that in addition to net earnings, this measure is
useful supplemental information to provide investors with an
indication of income available prior to debt service, capital
expenditures and income taxes. Investors should be cautioned,
however, that this measure should not be construed as an alternative
to net earnings determined in accordance with GAAP as an indicator of
the Company.
TODAY, THE COMPANY ANNOUNCED THE REGULAR DIVIDEND OF $0.06 PER SHARE TO BE PAID
ON MARCH 31st TO SHAREHOLDERS OF RECORD AS AT MARCH 17th
Operating Highlights
The tourist operations at White Pass and the golf operations
of the Company's equity accounted investment in ClubLink
Corporation ("ClubLink") are highly seasonal.
The majority of the revenue and earnings from these businesses
occur during the third quarter of the year. Accordingly,
the earnings of the Company will fluctuate with those of
the underlying business units.
Commencing in May, the Company's major operating division,
the White Pass & Yukon Route (the rail tourism and
docking segment) opens for the season. Significant amounts
of revenue are generated during this period as cruise ship
arrivals ramp up quickly to support the west coast schedules.
Volume peaks during the third quarter as the majority of
North Americans commence their summer vacations.
Virtually all of the Company's operating income originates
from White Pass, a wholly-owned subsidiary. The results
of the subsidiary, which is deemed self-sustaining, are
translated into Canadian currency using average rates during
the year. A change in average exchange rates, can impact
the net earnings of the Company.
EBITDA for the year ended December 31, 2005 was $18.4
million compared with $19.0 million for the corresponding
period in 2004. Operating margins declined marginally to
44%, though reported Revenue and EBITDA were negatively
impacted by the relative strength of the Canadian dollar.
Passenger counts increased 6.3% for the year, driven by
enhanced marketing programs developed at White Pass. The
change in US dollar exchange rates is estimated to have
reduced reported EBITDA by $1.6 million.
Tri-White has significant ownership in two public entities,
for which it records income on an equity basis. ClubLink
Corporation ("ClubLink") is Canada's largest
owner, operator and developer of high-quality Member Golf
Clubs, Daily Fee Golf Clubs and Golf Resorts, with 34 golf
courses open for play in 2005. Like the White Pass port
and tourist operations, ClubLink operates in a highly seasonal
market. For the year ended December 30, 2005 the Company
recorded an equity loss of $0.6 million, identical to the
loss for 2004. This income is based on weighted average
ownership of 31.3%. The Company received dividends of $0.9
million during the year.
The Company also accounts for its investment in Clearlink
("CNK") using the equity method. CNK is a leading
provider of innovative financial solutions in technology
and equipment leasing and equipment trading. Based in Ontario,
CNK operates throughout North America and Europe. The acquisition
of the Company's 35% interest in CNK was obtained in November
2003 and as CNK has a financial year-end of March 31, 2005,
the Company has determined that it will record its equity
interest in CNK on a three-month trailing basis. As a consequence,
equity earnings of $2.2 million were recorded during the
year. Clearlink dividends of $1.2 million were received
during the year.
Long-term investments include 5.4 million shares of ClubLink
carried at $22.4 million, and 3.1 million shares of Clearlink
carried at $25.9 million. The market value of these securities
exceeds their carrying cost by $33.3 million at December
31, 2005. During the year, the Company invested in Sizeler
Properties Inc. with an initial view of maintaining this
investment for the long term. However, further review led
to the conclusion that it was not an appropriate fit for
the Company and the shares were sold at a small profit.
Corporate Developments
Cruise ship capacity in Alaska increased this season, with
passenger numbers exceeding 2004 levels. The Company's
main operating subsidiary, White Pass benefited from the
growth in Alaska tourism and from its past investments
in port infrastructure and excursion capacity. For the
2005 season, which concluded on September 27th, the rail
excursion carried 430,037 passengers, an increase of 6.3%
from 2004.
On September 16th, 2005, the Company announced the renewal
of its normal course issuer bid providing the Company the
authority to purchase, for cancellation, up to 1,146,322
common shares over the following twelve-month period. During
the nine months ended September 30, 2005 the Company did
not purchase or cancel any shares.
The Company continued with its regular quarterly dividend
program and paid a dividend of $0.06 per share, or $1.3
million, on December 30th.
TRI-WHITE CORPORATION
CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2005
Tri-White Corporation
CONSOLIDATED BALANCE SHEETS
As at December 31,
2005 2004
(in thousands of dollars) $ $
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ASSETS
Current
Cash and cash equivalents 20,469 4,908
Amounts receivable 654 1,516
Loan receivable 7,000 7,000
Material and supplies 4,618 3,635
Prepaids and other assets 473 407
Portfolio investments 3 2,310
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33,217 19,776
Long-term investments 48,262 48,829
Capital assets 73,864 71,583
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Total assets 155,343 140,188
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LIABILITIES AND SHAREHOLDERS' EQUITY
Current
Bank indebtedness 15,139 7,265
Promissory notes 17,935 6,000
Accounts payable and accrued liabilities 3,985 2,022
Income and other taxes payable 517 428
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37,576 15,715
Long term promissory note - 11,935
Future income tax liabilities 17,471 16,677
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Total liabilities 55,047 44,327
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Shareholders' equity
Share capital 61,216 60,931
Cumulative translation adjustment (13,688) (11,084)
Contributed surplus 130 68
Retained earnings 52,638 45,946
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Total shareholders' equity 100,296 95,861
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Total liabilities and shareholders' equity 155,343 140,188
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Tri-White Corporation
CONSOLIDATED STATEMENTS OF EARNINGS AND RETAINED EARNINGS
For the year ended December 31,
2005 2004
(in thousands of dollars, except for
per share amounts) $ $
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REVENUE 41,531 41,679
Cost of sales and operating expenses 23,178 22,677
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Earnings from operations before the undernoted 18,353 19,002
Amortization 3,405 3,294
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Earnings before other income (expense)
and income taxes 14,948 15,708
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OTHER INCOME (EXPENSE)
Investment income 2,519 1,299
Interest expense (2,379) (1,447)
Net gain on insurance claim 1,328 -
Net gain on sale of investments and capital assets 2,366 161
Unrealized foreign exchange gain (loss) (49) 642
Earnings on equity accounted investments 1,530 1,062
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5,315 1,717
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Earnings before income taxes 20,263 17,425
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Provision for income taxes
Current 6,755 6,356
Future 1,316 893
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8,071 7,249
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Net earnings for the year 12,192 10,176
Retained earnings, beginning of year as previously
stated 45,946 42,648
Adjustments due to retroactive changes in accounting
policies of equity accounted investments - (1,110)
Dividends (5,500) (5,486)
Excess of purchase price of common shares
over average carrying value - (282)
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Retained earnings, end of year 52,638 45,946
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Net earnings per share
Basic 0.53 0.44
Diluted 0.53 0.44
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Tri-White Corporation
CONSOLIDATED STATEMENTS OF CASH FLOW
For the year ended December 31,
2005 2004
(in thousands of dollars, except for
per share amounts) $ $
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OPERATING ACTIVITIES
Net earnings for the year 12,192 10,176
Items not affecting cash
Amortization 3,405 3,294
Future income taxes 1,316 893
Net (gain) on insurance claim (1,328) -
Net (gain) on sale of capital assets and investments (2,366) (161)
Earnings of equity accounted investments (1,530) (1,062)
Net unrealized foreign exchange loss (gain) 49 (642)
Stock compensation expense 62 68
Distributions from equity accounted investments 2,097 1,688
Net change in operating assets and liabilities 1,864 1,585
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15,761 15,839
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FINANCING ACTIVITIES
Promissory note - 6,000
Proceeds on issue of common shares 198 -
Shares purchased for cancellation - (458)
Dividends paid (5,413) (5,300)
Net proceeds (repayment) of bank indebtedness 7,874 (1,877)
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2,659 (1,635)
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INVESTING ACTIVITIES
Proceeds on sale of capital assets and investments 21,522 2,643
Proceeds on insurance claim 1,830 -
Purchase of capital assets (8,299) (4,778)
Purchase of investments (16,319) (202)
Advances of loan receivable (9,510) (7,000)
Repayment of loan receivable 9,510 -
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(1,266) (9,337)
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Net effect of currency translation
on cash and cash equivalents (1,593) (338)
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Net increase in cash and cash equivalents
during the year 15,561 4,529
Cash and cash equivalents, beginning of year 4,908 379
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Cash and cash equivalents, end of year 20,469 4,908
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For
further information
Don Turple, Chief
Financial Officer
Tel: (416) 367-6877
Fax: (416) 637-6890
e-mail:
dturple@morguard.com
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