Tri-White Corporation announces 2007 year end results
Thursday March 13, 7:27 pm ET
Tri-White Corporation (TSX:
TWH)
TORONTO, March 13 - Tri-White Corporation announced today its financial results for the quarter and year ending December 31, 2007.
Financial Highlights
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Three months ended Year ended
(in thousands of ---------------------------------------------------
dollars except per December December December December
share amounts) 31, 2007 31, 2006 31, 2007 31, 2006
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Revenue 27,364 133 168,780 40,506
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EBITDA(1) 1,505 (3,671) 57,319 18,589
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Interest and other
income (expense) (8,919) 535 (16,491) 247
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Equity income (loss) 82 (295) (2,157) 11,403
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Provision for (recovery
of) income taxes (7,400) (1,246) 10,524 6,704
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Non-controlling interest (534) - 3,400 -
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Net earnings (loss) (5,276) (5,274) 8,869 18,071
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Earnings (loss) per
share - basic ($0.23) ($0.23) $0.39 $0.79
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Weighted average shares
outstanding 22,784 22,933
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(1) EBITDA is not a recognized performance measure under Canadian GAAP.
EBITDA is defined as earnings before taxes, interest, depreciation,
amortization, non-controlling interest 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.
Net earnings for the year ended December 31, 2007 was $8,869,000 or $0.39 per share as compared with $18,071,000 or $0.79 per share in 2006. The variance is largely attributable to a one-time gain in 2006 on distributions, from the investment in Renasant Financial Partners Ltd., which resulted in income of $10,834,000 or $0.47 per share. Net loss for the quarter ended December 31, 2007 was $5,276,000 or $0.23 per share; essentially the same as the 2006 loss of $5,274,000.
EBITDA for the year ended December 31, 2007 was $57,319,000 compared with $18,589,000 for 2006. The positive variance of $38,730,000 over the same period last year is mainly due to the acquisition of ClubLink on June 1, 2007; and accordingly, Tri-White is consolidating the results of ClubLink for the seven-month period from June 1, 2007.
Operating Highlights
The tourist operations at White Pass and Yukon Route ("White Pass") and the golf operations of 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.
The Company's operating income originates from White Pass and ClubLink. White Pass is a wholly owned subsidiary. Significant revenue is generated in the third quarter as ship arrivals peak and tourist traffic is at its high point. EBITDA from the Alaska operations decreased from US$18,214,000 in 2006 to US$16,696,000 for 2007. Although passenger counts increased by approximately 7.0%, White Pass incurred unusually high maintenance costs to sustain the efficiency and safety of the operation. As well, this division established a reserve of US$1,578,000 relating to the settlement of one of its major labour contracts.
The results of White Pass, which is deemed self-sustaining, are translated into Canadian currency using average rates during the period. A change in average exchange rates can impact the net earnings of the Company.
On June 1, 2007, the Company acquired an additional 6,635,300 shares of ClubLink (representing 39.0% of ClubLink's outstanding common shares) to increase its ownership to 70.7%. The purchase price of this additional interest, including transaction costs, was $88,018,000 and was funded through issuance of a one year unsecured note of $35,000,000 bearing interest at the greater of the Canadian prime lending rate and 6%, with the balance of $53,018,000 in cash. The acquisition has been accounted for under the purchase method of accounting. As part of the accounting treatment, the Company allocated the purchase price on the identifiable assets and liabilities acquired based on their estimated fair values at the time of acquisition. The earnings of ClubLink have been accounted for under the equity method to May 31, 2007 and subsequently have been included in the consolidated statement of income and cash flow from June 1, 2007.
The purchase price allocation has been adjusted in the fourth quarter to reflect the final determination of the fair value of the assets and liabilities acquired.
Net income at ClubLink for the year ended December 31, 2007 was $4,877,000 compared to $416,000 for 2006. In 2007, Tri-White recorded $3,067,000 of net earnings relating to ClubLink compared to $122,000 in 2006.
Corporate Development
The Company has been approved by the Toronto Stock Exchange to make a normal course issuer bid to purchase up to 1,136,828 common shares. No purchases have been made under this bid. The program expires September 19, 2008. During the year ended December 31, 2007 the Company purchased 204,700 shares under a previous bid.
The Company continued with its regular quarterly dividend program and paid an eligible dividend of $0.06 per share, or $1,354,000 on December 31, 2007. The dividend for the first quarter will be paid on March 31, 2008 to shareholders of record on March 14, 2008.
Outlook
For 2008, the Company believes it is well positioned to capitalize on its unique assets and their competitive strengths. It is unclear whether golf club operations and the rail, tourism and port operations would be impacted by a potential downturn in the economy. Tri-White anticipates that opportunities will arise to add quality assets in this environment. With the strength of the existing brands, experienced management, and a focus on cost control, stable returns are expected.
Financial statements are attached.
Statements contained herein that are not based on historical or current fact, including without limitation statements containing the words "anticipates," "believes," "may," "continue," "estimate," "expects," and "will" and words of similar import, constitute "forward-looking statements". Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, events or developments to be materially different from any future results, events or developments expressed or implied by such forward-looking statements. Such factors include, among others, the following: general economic and business conditions, both nationally and in the regions in which the Company operates; changes in business strategy or development/acquisition plans; environmental exposures, financing risk; existing governmental regulations and changes in, or the failure to comply with, governmental regulations; liability and other claims asserted against the Company; and other factors referenced in the Company's filings with Canadian securities regulators. Given these uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements. The Company does not assume the obligation to update or revise any forward-looking statements.
Management's discussion and analysis, financial statements and other disclosure information relating to the Company is available through SEDAR and at www.sedar.com and on the Company website at www.tri-white.com.
TRI-WHITE CORPORATION
CONSOLIDATED BALANCE SHEETS
December 31, December 31,
(in thousands of dollars) 2007 2006
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ASSETS
Current
Cash and cash equivalents $ 6,177 $ 21,853
Accounts receivable 2,675 543
Mortgages and loans receivable 763 16,892
Inventories and prepaid expenses 7,561 4,939
Other assets 3,230 -
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20,406 44,227
Mortgages and loans receivable 6,306 -
Long-term investments 6,267 36,554
Capital assets 556,609 73,957
Intangible assets 10,488 -
Goodwill 26,689 -
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Total assets $ 626,765 $ 154,738
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LIABILITIES AND SHAREHOLDERS' EQUITY
Current
Bank indebtedness $ 31,629 $ 21,706
Long-term debt 12,820 -
Capital lease obligations 4,269 -
Note payable 35,000 -
Accounts payable and accrued liabilities 18,823 1,915
Income and other taxes payable 2,783 1,655
Prepaid annual dues and deposits 5,021 -
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110,345 25,276
Long-term debt 284,127 -
Capital lease obligations 9,082 -
Deferred membership fees 57,025 -
Future income tax liabilities 11,991 17,055
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Total liabilities 472,570 42,331
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Non-controlling interest 50,007 -
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Shareholders' equity
Share capital 60,775 61,278
Contributed surplus 253 191
Retained earnings 67,249 65,205
Accumulated other comprehensive loss (24,089) (14,267)
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Total shareholders' equity 104,188 112,407
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Total liabilities and shareholders' equity $ 626,765 $ 154,738
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TRI-WHITE CORPORATION
CONSOLIDATED STATEMENTS OF EARNINGS AND COMPREHENSIVE EARNINGS
For the Year Ended
December 31, December 31,
2007 2006
REVENUE
Operating revenue $ 168,780 $ 40,506
EXPENSES
Operating expenses 111,461 21,917
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Earnings before other items, income taxes
and non-controlling interest 57,319 18,589
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OTHER ITEMS
Amortization of capital assets 13,085 3,195
Amortization of intangible assets 312 -
Land lease rent 2,481 -
Investment and other income (96) (2,276)
Interest expense 16,587 2,029
Loss (income) on equity accounted investments
- ClubLink Corporation 2,096 (122)
- Renasant Financial Partners Ltd. 61 (11,281)
Provision on long-term investment - 2,269
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34,526 (6,186)
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Earnings before income taxes and
non-controlling interest 22,793 24,775
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Provision for income taxes (recovery)
Current 5,267 6,920
Future 5,257 (216)
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10,524 6,704
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Net earnings before non-controlling interest 12,269 18,071
Non-controlling interest 3,400 -
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Net earnings 8,869 18,071
Unrealized foreign currency translation loss
on self-sustaining foreign operations (9,822) (579)
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Total comprehensive earnings (loss) $ (953) $ 17,492
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Earnings per share
Basic $ 0.39 $ 0.79
Diluted $ 0.39 $ 0.78
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TRI-WHITE CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOW
For the Year Ended
December 31, December 31,
(in thousands of dollars) 2007 2006
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OPERATING ACTIVITIES
Net earnings for the year $ 8,869 $ 18,071
Items not affecting cash
Amortization of capital assets 13,085 3,195
Amortization of intangible assets 312 -
Amortization of deferred finance charges 590 -
Future income taxes (recovery) 5,257 (216)
Amortization of membership fees (8,070) -
Loss on sale of investments and assets 953 3
Loss (income) of equity accounted investments 2,157 (11,403)
Non controlling interest - ClubLink 3,400 -
Net unrealized foreign exchange loss - (442)
Stock compensation expense 62 61
Provision on long-term investment - 2,269
Distributions from equity accounted investments 664 13,800
Collection of membership fee instalments 13,594 -
Net change in operating assets and liabilities (30,351) (662)
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Cash provided by operating activities 10,522 24,676
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FINANCING ACTIVIITES
Repayment of promissory notes - (17,935)
Proceeds on issue of subsidiary common shares 50 -
Shares purchased for cancellation (1,906) -
Dividends paid (5,421) (5,442)
Dividends paid - non controlling interest (602) -
Capital lease obligations (314) -
Deferred financing charges (995) -
Bank indebtedness 9,923 6,567
Long-term debt 10,898 -
Convertible debentures (10,092) -
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Cash provided by (used in) investing activities 1,541 (16,810)
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INVESTING ACTIVITIES
Purchase of capital assets (21,827) (3,761)
Proceeds from real estate sales and deposits 16,900 -
Acquisition of ClubLink (52,918) -
Long-term investments - (762)
Return of capital 9,480 10,073
Cash acquired by increasing interest in ClubLink 1,603 -
Advances of loan receivable (4,834) (23,149)
Repayment of loans receivable 25,573 11,257
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Cash used in investing activities (26,023) (6,342)
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Net effect of currency translation adjustment
on cash and cash equivalents (1,716) (140)
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Net increase (decrease) in cash and cash
equivalents during the year (15,676) 1,384
Cash and cash equivalents, beginning of year 21,853 20,469
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Cash and cash equivalents, end of year $ 6,177 $ 21,853
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Represented by
Cash $ 6,177 $ 14,353
Cash equivalents - 7,500
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$ 6,177 $ 21,853
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For
further information
Mr. Robert Wright,
Chief Financial Officer,
55 City Centre Drive, Suite 1000,
Phone: (905) 281-5897
Fax: (905) 281-5890
bwright@morguard.com |
