Tri-White Corporation
announces first quarter 2006
results and regular dividend
of $0.06 per share
Wednesday May 10, 5:00 pm ET
Tri-White Corporation (TSX:
TWH)
Financial Highlights
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Three Months Ended
(in thousands of dollars -------------------------------------
except per share amounts) March 31, 2006 March 31, 2005
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Revenue 118 96
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EBITDA(1) (2,575) (2,408)
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Interest and other income (expense) (385) 707
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Equity earnings (loss) (1,178) (973)
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Recovery of income taxes 730 1,170
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Net earnings (loss) (4,210) (2,304)
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Earnings (loss) per share ($0.18) ($0.10)
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Weighted average shares outstanding 22,931 22,875
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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 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 JUNE 30 TO SHAREHOLDERS
OF RECORD AS AT JUNE 16.
First Quarter 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.
During the period from January to March, the Company's
main operating subsidiary, White Pass, remained closed
for the winter months. Small amounts of revenue are reported
during this period as pre-selling commences for the upcoming
tourist season.
Similarly, virtually all of the Company's operating income
originates from White Pass, based in Alaska. The results
of this subsidiary, which are deemed self-sustaining, are
translated into Canadian currency using average rates for
the period. Changes in exchange rates can impact the net
earnings of Tri-White.
EBITDA (defined as revenue less cost of sales and operating
expenses) for the three months ended March 31, 2006 was
($2.6 million) compared with ($2.4 million) for the period
ended March 31, 2005. The operating performance was impacted
by additional costs for corporate activities. On a Canadian
dollar basis, the rail/tourism operations were flat year
over year.
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 36 golf
courses open for play in 2006. Like the White Pass port
and tourist operations, ClubLink operates in a highly seasonal
market. For the three months ended March 31, 2006 the Company
recorded an equity loss of $1.7 million compared to $1.5
million in the three months ended March 31, 2005. This
loss is based on a weighted average ownership of 31.5%
and 31.2% for the respective quarters. The Company received
dividends of $0.3 million during the quarter in 2006 and
$0.2 million in 2005.
The Company also accounts for its investment in Renasant
Financial Partners Ltd. ("Renasant", formerly
Clearlink Capital Corporation) using the equity method.
During the quarter, Renasant completed the sale of its
active leasing business and now maintains the bulk of its
assets in cash and marketable securities. Since Renasant
has a financial year-end of March 31, 2006, the Company
has determined that it will record its equity interest
in Renasant on a three-month trailing basis. As a consequence,
equity earnings of $0.5 million were recorded during the
first quarter ($0.5 million in 2005). Dividends of $0.3
million were recorded during the quarter, comparable to
2005.
Long-term investments include 5.4 million shares of ClubLink
carried at $20.4 million, 3.1 million shares of Renasant
carried at $26.1 million. The market value of these securities
exceeds their carrying cost by $38.3 million at March 31,
2006.
Corporate Developments
Cruise ship arrivals in Skagway are expected to decline slightly
this season, with reduced passenger numbers from 2005 levels.
The Company's main operating subsidiary, White Pass is
focused on a series of programs aimed at improving margins
through cost control and pricing initiatives. Currency
fluctuations will continue to impact reported results.
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 three months ended March 31, 2006 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 March 30th.
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.
TRI-WHITE CORPORATION
CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
March 31, 2006
Tri-White Corporation
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
As at
March 31, December 31,
2006 2005
(in thousands of dollars) $ $
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ASSETS
Current
Cash and cash equivalents 6,445 20,469
Amounts receivable 981 654
Loan receivable 7,000 7,000
Income and other taxes recoverable 1,087 -
Material and supplies 4,668 4,618
Prepaids and other assets 1,823 473
Portfolio investments 3 3
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22,007 33,217
Long-term investments 46,507 48,262
Capital assets 73,403 73,864
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Total assets 141,917 155,343
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LIABILITIES AND SHAREHOLDERS' EQUITY
Current
Bank indebtedness 21,644 15,139
Promissory notes 6,000 17,935
Accounts payable and accrued liabilities 1,979 3,985
Income and other taxes payable - 517
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29,623 37,576
Future income tax liabilities 17,316 17,471
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Total liabilities 46,939 55,047
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Shareholders' equity
Share capital 61,232 61,216
Cumulative translation adjustment (13,451) (13,688)
Contributed surplus 145 130
Retained earnings 47,052 52,638
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Total shareholders' equity 94,978 100,296
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Total liabilities and shareholders' equity 141,917 155,343
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Tri-White Corporation
CONSOLIDATED STATEMENTS OF EARNINGS AND RETAINED EARNINGS
(UNAUDITED)
For the year ended March 31,
(in thousands of dollars, except for 2006 2005
per share amounts) $ $
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REVENUE 118 96
Cost of sales and operating expenses 2,693 2,504
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Loss from operations before the undernoted (2,575) (2,408)
Amortization 802 800
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Loss before other income (expense)
and income taxes (3,377) (3,208)
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OTHER INCOME (EXPENSE)
Investment income 277 592
Interest expense (606) (476)
Net gain on sale of investments - 506
Unrealized foreign exchange (loss) gain (56) 85
Loss on equity accounted investments (1,178) (973)
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(1,563) (266)
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Loss before income taxes (4,940) (3,474)
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Provision for (recovery of) income taxes
Current (553) (1,191)
Future (177) 21
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(730) (1,170)
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Net loss for the period (4,210) (2,304)
Retained earnings, beginning of period 52,638 45,946
Dividends (1,376) (1,374)
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Retained earnings, end of period 47,052 42,268
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Loss per share
Basic (0.18) (0.10)
Diluted (0.18) (0.10)
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Tri-White Corporation
CONSOLIDATED STATEMENTS OF CASH FLOW
(UNAUDITED)
For the year ended March 31,
2006 2005
(in thousands of dollars $ $
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OPERATING ACTIVITIES
Net loss for the period (4,210) (2,304)
Items not affecting cash
Amortization 802 800
Future income taxes (177) 21
Net gain on sale of investments - (506)
Loss of equity accounted investments 1,178 973
Net unrealized foreign exchange loss (gain) 56 (85)
Stock compensation expense 15 45
Distributions from equity accounted investments 577 524
Net change in operating assets and liabilities (5,337) (3,094)
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(7,096) (3,626)
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FINANCING ACTIVITIES
Promissory note (11,935) -
Dividends paid (1,360) (1,350)
Net proceeds of bank indebtedness 6,505 7,297
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(6,790) 5,947
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INVESTING ACTIVITIES
Proceeds on sale of capital assets and investments - 1,468
Purchase of capital assets (273) (1,839)
Advances of loan receivable - (7,000)
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(273) (7,371)
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Net effect of currency translation
on cash and cash equivalents 135 142
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Net decrease in cash and cash equivalents
during the period (14,024) (4,908)
Cash and cash equivalents, beginning of period 20,469 4,908
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Cash and cash equivalents, end of period 6,445 -
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- 30 -
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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