Tri-White Corporation announces third
quarter 2005 results and regular dividend of $0.06 per
share
Wednesday November 9, 7:22 pm ET
Tri-White Corporation (TSX:
TWH)
Financial Highlights
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Three months ended Year-to-date
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(in thousands of dollars September September September September
except per share amounts) 30, 2005 30, 2004 30, 2005 30, 2004
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Revenue 26,264 27,046 41,737 42,229
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EBITDA(1) 16,774 17,376 22,660 23,339
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Interest and other income
(expense) (240) 17 1,679 (120)
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Equity earnings 2,767 2,524 2,289 1,827
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Provision for income taxes (7,441) (7,166) (10,182) (9,252)
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Net earnings 11,031 11,930 13,949 13,317
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Earnings per share - basic $0.48 $0.52 $0.61 $0.58
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Weighted average shares
outstanding, on a post
consolidation basis 22,926 22,878 22,896 22,885
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Note: 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 DECEMBER 30TH TO SHAREHOLDERS OF
RECORD AS AT DECEMBER 16TH.
Third 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. 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 three months ended September 30, 2005
was $16.8 million compared with $17.4 million for the corresponding period in
2004. Operating margins remained consistent at the 64% level, though reported
Revenue and EBITDA were negatively impacted by the relative strength of the Canadian
dollar. Passenger counts increased 4.6% for the quarter, driven by enhanced marketing
programs developed at White Pass. Year-to-date, the total passenger count for
the rail excursion was 430,037, an increase of 6.2% over the 2004 season. The
change in US dollar exchange rates is estimated to have reduced reported EBITDA
by $1.8 million. For the nine months ended September 30th, EBITDA was $22.7 million,
compared with $23.3 million in 2004. Operating margins for the 9 months have
declined by approximately 1% to 54% as additional start-up costs were incurred
this 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 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 three months ended September 30, 2005 the Company
recorded equity income of $2.2 million compared to $2.0 million in the three
months ended September 30, 2004. This income is based on weighted average ownership
of 31.3% and 30.6% for the respective quarters. The Company received dividends
of $0.2 million during the quarter in 2005 and 2004. The Company also accounts
for its investment in Clearlink ("CNK", formerly MFP Financial Services
Ltd.) 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 $0.5 million were recorded during the
third quarter and $1.6 million for the year-to-date. Clearlink dividends of
$0.3 million were recorded during the quarter. Long-term investments include
5.4 million shares of ClubLink carried at $23.9 million, 3.1 million shares
of Clearlink carried at $25.6 million, and 1.1 million shares of Sizeler Properties
carried at $16.3 million. The market value of these securities exceeds their
carrying cost by $31.8 million at September 30, 2005.
Corporate Developments
Cruise ship capacity in Alaska increased by 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 6.2% 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
September 30th.
TRI-WHITE CORPORATION
CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
September 30, 2005
Tri-White Corporation
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
As at As at
September December
30, 2005 31, 2004
(in thousands of dollars) $ $
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ASSETS
Current
Cash and cash equivalents 9,677 4,908
Accounts receivable 4,874 1,516
Loan receivable 7,000 7,000
Income and other taxes recoverable - 286
Material and supplies 4,456 3,635
Prepaid expenses and other assets 1,063 407
Portfolio investments 1,348 2,310
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28,418 20,062
Long-term investments 65,864 48,829
Long-term loan receivable 6,121 -
Capital assets 71,402 71,583
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Total assets 171,805 140,474
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LIABILITIES AND SHAREHOLDERS' EQUITY
Current
Bank indebtedness 21,516 7,265
Promissory notes 17,935 6,000
Accounts payable and accrued liabilities 4,148 2,022
Income and other taxes payable 5,612 -
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49,211 15,287
Long term promissory note - 11,935
Future income tax liabilities 18,514 17,391
Provision for asset retirement obligations
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Total liabilities 67,725 44,613
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Shareholders' equity
Share capital 61,198 60,931
Cumulative translation adjustment (13,019) (11,084)
Contributed surplus 131 68
Retained earnings 55,770 45,946
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Total shareholders' equity 104,080 95,861
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Total liabilities and shareholders' equity 171,805 140,474
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Tri-White Corporation
CONSOLIDATED STATEMENTS OF EARNINGS AND RETAINED EARNINGS
(UNAUDITED)
Three months ended Nine months ended
September September September September
30, 2005 30, 2004 30, 2005 30, 2004
(in thousands of dollars, (Restated (Restated
except for per share Note 5) Note 5)
amounts) $ $ $ $
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REVENUE 26,264 27,046 41,737 42,229
Cost of sales and operating
expenses 9,490 9,670 19,077 18,890
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Earnings from operations
before the undernoted 16,774 17,376 22,660 23,339
Amortization 829 821 2,497 2,477
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Earnings before other income
(expense) and income taxes 15,945 16,555 20,163 20,862
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OTHER INCOME (EXPENSE)
Investment income 610 515 1,599 723
Interest expense (710) (498) (1,735) (1,004)
Net gain on insurance claim - - 1,328 -
Net gain on sale of
investments and capital
assets - - 589 161
Unrealized foreign exchange
loss (140) - (102) -
Income on equity accounted
investments 2,767 2,524 2,289 1,827
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2,527 2,541 3,968 1,707
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Earnings before income taxes 18,472 19,096 24,131 22,569
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Provision for income taxes
Current 6,587 6,782 8,457 8,481
Future 854 384 1,725 771
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7,441 7,166 10,182 9,252
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Net earnings for the period 11,031 11,930 13,949 13,317
Retained earnings, beginning
of period as previously
stated 46,115 41,265 45,946 42,648
Adjustments due to retroactive
changes in accounting
policies of equity accounted
investments - (1,225) - (1,110)
Dividends (1,376) (1,370) (4,125) (4,114)
Excess of purchase price of
common shares over average
carrying value - (43) - (184)
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Retained earnings, end of
period 55,770 50,557 55,770 50,557
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Net earnings per share
Basic 0.48 0.52 0.61 0.58
Diluted 0.48 0.52 0.60 0.58
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Tri-White Corporation
CONSOLIDATED STATEMENTS OF CASH FLOW
(UNAUDITED)
Three months ended Nine months ended
September September September September
30, 2005 30, 2004 30, 2005 30, 2004
(in thousands of dollars, (Restated (Restated
except for per share Note 5) Note 5)
amounts) $ $ $ $
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OPERATING ACTIVITIES
Net income for the period 11,031 11,930 13,949 13,317
Items not affecting cash
Amortization 829 821 2,495 2,477
Future income taxes 854 384 1,725 771
Net (gain) on insurance
claim - - (1,328) -
Net (gain) on sale of
capital assets and
investments - - (589) (161)
(Income) of equity
accounted investments (2,767) (2,524) (2,289) (1,827)
Net unrealized foreign
exchange loss 140 - 102 -
Stock compensation expense 30 - 63 -
Asset retirement
obligation expenditures (61) (165) (175) (286)
Distributions from equity
accounted investments 524 497 1,572 873
Net change in operating
assets and liabilities 7,037 7,723 3,371 4,136
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17,617 18,666 18,896 19,300
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FINANCING ACTIVITIES
Promissory note - - - 6,000
Proceeds on issue of common
shares - - 198 -
Shares purchased for
cancellation - (71) - (300)
Dividends paid (1,350) (1,248) (4,055) (3,950)
Net proceeds of bank
indebtedness (8,338) (6,102) 14,251 (325)
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(9,688) (7,421) 10,394 1,425
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INVESTING ACTIVITIES
Proceeds on sale of capital
assets and investments - - 1,589 2,643
Proceeds on insurance claim - - 1,830 -
Purchase of capital assets (2,099) (1,115) (5,146) (4,536)
Purchase of investments - - (16,319) (194)
Advances of loan receivable (716) (3,125) (8,966) (10,125)
Repayment of loan receivable 944 - 2,845 -
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(1,871) (4,240) (24,167) (12,212)
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Net effect of currency
translation adjustment on
cash balances 283 (404) (354) (477)
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Net increase in cash and cash
equivalents during the period 6,340 6,601 4,769 8,036
Cash and cash equivalents,
beginning of period 3,337 1,814 4,908 379
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Cash and cash equivalents,
end of period 9,677 8,415 9,677 8,415
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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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