BRAMPTON, ONTARIO--(Marketwire - Nov. 7, 2011) -
(All amounts are stated in thousands of Canadian dollars, except per share amounts.)
Brampton Brick Limited (TSX:BBL.A) today reported a loss of $5,074, or $0.46 per share, for the third quarter ended September 30, 2011 compared to net income of $90, or $0.01 per share, for the third quarter of 2010. The aggregate weighted average number of Class A Subordinate Voting shares ("Class A shares") and Class B Multiple Voting shares ("Class B shares") outstanding was 10,936,554 in both periods.
Three months ended September 30
The loss for the quarter included an impairment charge of $5,303, or $0.48 per share, to reflect the Company's share under IFRS of an impairment charge in relation to the underlying assets of Universal Resource Recovery Inc. ("Universal"). This matter is discussed in greater detail below. Excluding this impairment charge, the Company would have reported net income of $229, or $0.02 per share, for the third quarter of 2011.
Revenues for the quarter increased by $5,797 from $20,510 in 2010 to $26,307 on the strength of a $4,881 increase in revenues in the Masonry Products business segment and a $916 increase in revenues in the Landscape Products business segment.
Operating results, however, were negatively impacted by higher manufacturing costs charged against operations, primarily due to lower production volumes of both masonry and landscape products, as well as higher yard and delivery expenses and higher general and administrative expenses. These increases were partially offset by lower selling expenses and lower depreciation expense.
Yard and delivery expenses, which are included in Cost of Sales in the Consolidated Statement of Comprehensive Income (Loss) were higher in the third quarter of 2011 compared to 2010. This increase arose as a result of higher delivery costs corresponding to increased sales volumes and an increase in masonry shipments from the Indiana plant into the Canadian market.
During the first quarter of 2011, the Company reviewed the remaining useful life of plant and production equipment which resulted in changes in the expected useful life of certain production equipment. As a result, depreciation expense, which is included in Cost of Sales in the Consolidated Statement of Comprehensive Income (Loss) decreased by $945 for the three month period ended September 30, 2011 compared to the same period in 2010.
Operating income for the quarter was $2,610 compared to $1,881 for the third quarter of 2010.
Finance costs increased to $1,383 for the third quarter in 2011 from $1,235 in 2010 primarily due to an increase in the loss on the derivative financial instrument.
The Company's share of the operational loss from its 50% joint venture interest in Universal amounted to $537 in the third quarter of 2011 compared to $690 in 2010. Universal suspended its operations in June 2011 and management of Universal is currently exploring strategic alternatives with respect to its future operations. Universal is a private company in Canada and is not required to comply with IFRS. However, the accounting policies of Universal have been reviewed and adjustments have been made for reporting purposes, where necessary, to ensure consistency with the policies adopted by the Company. As a result of the suspension of operations, the Company concluded that there were indicators of impairment and consequently, performed an impairment analysis. Based on this analysis, the Company concluded that under IFRS the underlying assets of the investment were impaired. As a result of this impairment charge, the Company's share of the loss increased by $5,303. As at September 30, 2011, the estimated recoverable amount of the Company's investment in the joint venture is $940. The Company will continue to evaluate this investment based on the decisions made by management of Universal in relation to the future direction of Universal and its operations. Under IFRS an impairment loss can be reversed if there is a change in the estimates used to determine the recoverable amount.
The provision for income taxes of $466 for the third quarter of 2011 compared to a recovery of $117 for the third quarter of 2010 relates solely to the pre-tax income of the Company's Canadian operations. The Company did not record a deferred tax asset with respect to the potential future income tax benefit pertaining to the losses incurred by its U.S. operations.
Nine months ended September 30
For the nine month period ended September 30, 2011, the Company incurred a loss of $10,039, or $0.92 per share, compared to a loss of $3,322, or $0.31 per share, for the nine month period ended September 30, 2010. The aggregate weighted average number of Class A shares and Class B shares outstanding was 10,936,554 in both periods.
As described above, the loss in 2011 included an impairment charge of $5,303, or $0.48 per share, with respect to the Company's investment in Universal.
Revenues increased to $60,418, an increase of $3,947 from the same period in 2010.
Higher manufacturing costs charged against operations and higher yard and delivery expenses for the nine month period compared to last year were offset, in part, by a decrease in depreciation expense, all for the same reasons as noted above for the three months ended September 30, 2011.
The year to date increase in selling expenses was a result of higher advertising and marketing expenditures to support the introduction of new products and to expand the Company's product and geographic market profile. General and administrative expenses increased by $761, or 19.6%, primarily due to non-recurring expenses and an increase in the provision for uncollectible accounts.
For the nine month period ended September 30, 2011, the Company recorded operating income of $891 compared to $2,010 for the same period in 2010.
Finance costs of $3,593, as compared to $3,416 in 2010, increased as a result of the additional interest expense in the current period on the $9,000 subordinated debenture which was issued on February 26, 2010.
As noted above for the three months ended September 30, 2011, the Company records a recovery of, or provision for, income taxes only with respect to its Canadian operations. The Company has not recorded a deferred tax asset with respect to the potential future tax benefit pertaining to losses incurred by its U.S. operations.
For the nine month period ended September 30, 2011, the Company's share of the operational loss incurred by Universal amounted to $2,044 compared to $1,925 in 2010. The additional impairment charge of $5,303, recorded in the third quarter of 2011 as described above, brought the total loss from the Company's investment in Universal to $7,347 for the nine month period ended September 30, 2011.
More detailed discussion with respect to each operating business segment follows:
MASONRY PRODUCTS
For the three month period ended September 30, 2011, the Masonry Products business segment reported operating income of $1,165 on revenues of $17,794 compared to operating income of $1,053 on revenues of $12,913 for the corresponding period in 2010.
Revenues for the quarter increased by $4,881 over 2010 as a result of growth in sales volumes. In addition, the introduction of concrete block products in the Ontario market in April of this year generated new revenues.
For the nine month period, this business segment recorded an operating income of $728 in 2011 compared to $2,625 in 2010. Revenues for the nine month period increased by $3,360 from $39,654 in 2010 to $43,014 in 2011.
Operating results for both the three and the nine month periods were negatively affected by lower production volumes and higher yard and delivery expenses. Higher general and administrative expenses applicable to this business segment also impacted operating results for the nine month period. Lower depreciation expense partially offset these increases.
LANDSCAPE PRODUCTS
The Landscape Products business segment reported operating income of $1,445 on revenues of $8,513 for the three month period ended September 30, 2011 compared to operating income of $828 on revenues of $7,597 in 2010.
For the nine month period to September 30, 2011, revenues increased by $587 to $17,404 from $16,817 in 2010. Higher selling and general and administrative expenses were offset by lower depreciation expense resulting in an operating income of $163 compared to operating loss of $615 for the same period in 2010.
CASH FLOWS
Cash flow provided by operating activities totaled $3,186 for the nine month period ended September 30, 2011 compared to $8,450 for the same period last year. The primary reasons for the decrease in cash from operations were a higher operating loss for the period adjusted for non-cash expenses. An increase in accounts receivable outstanding at the end of the period, due to increased revenues and timing of collections and higher disbursements in relation to trade payables led to a further decrease in cash flow. Lower production volumes of certain products resulted in lower cash requirements for inventories.
Cash utilized for purchases of property, plant and equipment totaled $2,484 for the nine month period, including approximately $616 related to new products, compared to $1,501 in 2010.
Advances to Universal during the nine month period in 2011 were $2,725 compared to $3,400 in the same period in 2010.
Bank operating advances increased by $4,558 for the period to fund operating cash requirements, purchases of property, plant and equipment as well as interest and debt repayments. Advances to Universal were funded from the Company's cash resources.
On February 26, 2010, the Company completed a $9,000 subordinated secured debenture financing. In connection therewith, a $3,000 unsecured promissory note payable, which was due in December, 2009 but not paid, was refinanced as part of the debenture issue. Certain parties, including a Director of the Company, holding an indirect interest in $1,100 of the $3,000 promissory note payable, subscribed for an equal or greater principal amount of the debenture issue. The remaining parties, including a Director of the Company, holding an indirect interest in $1,900 of the $3,000 promissory note payable, agreed to accept a new unsecured promissory note with identical terms and conditions as the previous promissory note, except that the new promissory note was due in full on September 30, 2010. The new $1,900 promissory note payable was repaid on the due date.
The subordinated debenture was recorded for accounting purposes at its fair value which, net of transaction costs incurred in the amount of $377, amounted to $8,623 and is being carried at amortized cost. The transaction costs are being amortized over the term of the loan resulting in an effective interest rate of 11.89%. As at September 30, 2011 the unamortized transaction costs were $177.
FINANCIAL CONDITION
The Company's Masonry Products and Landscape Products business segments are seasonal in nature. The Landscape Products business is affected to a greater degree than the Masonry Products business. As a result of this seasonality, operating results are impacted accordingly and cash requirements are generally expected to increase through the first half of the year and decline through the second half of the year.
As at September 30, 2011, bank operating advances were $6,382. This represented an increase of $4,558 from the amount outstanding at December 31, 2010. Trade payables totaled $9,303 at September 30, 2011 compared to $9,638 at December 31, 2010.
The ratio of total liabilities to shareholders' equity was 0.55:1 at September 30, 2011 compared to 0.49:1 at December 31, 2010. The increase in this ratio from December 2010 to September 2011 was primarily due to the increase in bank operating advances, as noted above, and lower retained earnings resulting from the loss incurred for the nine month period ended September 30, 2011, offset in part by the impact of a decrease in foreign currency translation loss in Accumulated other comprehensive loss.
As at September 30, 2011, working capital was $13,776, representing a working capital ratio of 1.57:1. Comparable figures for working capital and the working capital ratio at December 31, 2010 were $18,499 and 2.07:1, respectively. Cash and cash equivalents totaled $2,654 at September 30, 2011 compared to $5,383 at December 31, 2010.
As at September 30, 2011 the Company had an operating credit facility of $15,000. This is a demand facility which is secured primarily by trade receivables and inventories of the Company's Masonry Products and Landscape Products business segments in both Canada and the U.S. The actual amount that the Company may borrow under this facility is the lesser of $15,000 or the amount of the borrowing base determined according to margin formulas for trade receivables and inventories, less prior ranking claims and the mark-to-market exposure on the interest rate swap contract. As at September 30, 2011 the borrowing base exceeded $15,000. Consequently, the borrowing limit was $15,000 and the utilization was $6,722, including $6,382 for bank operating advances and $340 for outstanding letters of credit.
On October 4, 2011 the Company concluded new arrangements with a different Canadian bank to provide its operating credit requirements. The new facility provides for borrowings up to $20,000 based on margin formulas for trade receivables and inventories, less priority claims and the mark-to-market exposure on swap contracts, if applicable. It is a demand facility secured primarily by accounts receivable and inventories of the Company's Masonry Products and Landscape Products business segments in Canada and the U.S. The new agreement also contains certain financial covenants.
The Company settled its interest rate swap contract on October 3, 2011. Consequently, the fair value of the interest rate swap as at September 30, 2011 in the amount of $1,459 was classified as a current liability. As at December 31, 2010, current and non-current derivative financial liabilities were $604 and $828, respectively.
The Company expects that future cash flows from operations, cash and cash equivalents on hand and the unutilized balance of its operating credit facility will be sufficient to satisfy its obligations as they become due.
The Company was in compliance with all financial covenants under its long-term debt agreement as at September 30, 2011 and anticipates that it will maintain compliance throughout the year.
CONVERSION TO INTERNATIONAL FINANCIAL REPORTING STANDARDS
Effective January 1, 2011, the Company is required to prepare and report its financial statements in accordance with International Financial Reporting Standards ("IFRS"). Comparative information for 2010 was required to be restated to comply with IFRS, including an opening Consolidated Balance Sheet as at January 1, 2010.
Accordingly, in the accompanying Selected Financial Information, all amounts as at January 1, 2010 and December 31, 2010 and for the three and nine month periods ended September 30, 2010 have been restated to comply with the requirements of IFRS.
In the following discussion the term GAAP refers to Canadian GAAP before the adoption of IFRS.
A summary of the more significant financial effects of the conversion to IFRS on the Company's Consolidated Financial Statements is as follows:
a) Property, plant and equipment
Upon transition to IFRS, the Company elected to apply the fair value as deemed cost election as at January 1, 2010 for properties and certain production equipment utilized in its Canadian masonry products and landscape products operations. In the second quarter of 2011 the Company decided to revisit the use of certain elections, and for consistency, it also decided to apply the fair value as deemed cost election as at January 1, 2010 to production equipment utilized in its U.S. landscape operations. As a result, the net carrying value of land and machinery and equipment as at January 1, 2010 increased by $35,366 and $20,032, respectively. The aggregate increase, net of related deferred income tax liabilities of $9,356, amounted to $46,042 and was reflected as an adjustment to Equity in the January 1, 2010 opening Consolidated Balance Sheet.
The increase in the carrying amount of machinery and equipment resulted in an increase in depreciation expense of $559 for the three months ended September 30, 2010, $1,674 for the nine months ended September 30, 2010 and $2,229 for the year ended December 31, 2010 from the amount reported under previous GAAP.
b) Asset impairment
Under IAS 36, Impairment of Assets ("IAS 36"), asset impairments are determined based on the assessment of the difference between the carrying amount and recoverable amount of the assets in a cash generating unit (CGU). The Company has determined that the Brampton clay brick plant, the Canadian concrete plants (Markham, Milton and Brampton), the Farmersburg, Indiana clay brick plant and the Wixom, Michigan concrete plant are the CGUs for purposes of the asset impairment tests. The standard requires that an impairment is determined based on the recoverable amount of the CGU. The recoverable amount is the higher of the amount determined under the "value in use" or "fair value less costs to sell" basis. An impairment charge is recognized when the carrying value of the CGU exceeds its recoverable amount. Under IFRS, an impairment loss for a CGU can be reversed if there has been a change in the estimates used to determine the recoverable amount, however the reversal of an impairment loss shall not exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss been recognized for the CGU in prior periods.
Under the previous GAAP methodology, which utilized undiscounted future cash flows to determine the recoverable amount, the asset impairment evaluations completed as at January 1, 2010 and December 31, 2010 indicated that there was no impairment of any of the Company's CGUs.
Under IFRS, discounted cash flows are utilized to determine the recoverable amount. The Company completed its asset impairment evaluations with respect to its Brampton clay brick plant, the Canadian concrete plants ( Markham, Milton and Brampton) and the Wixom, Michigan concrete plant and concluded that there was no impairment as at January 1, 2010 or at December 31, 2010.
The asset impairment evaluation as at January 1, 2010 with respect to the Farmersburg, Indiana clay brick plant indicated an impairment and, accordingly, an impairment loss of $10,571 was recognized in the January 1, 2010 opening Consolidated Balance Sheet for property, plant and equipment. The loss was recorded in retained earnings.
The decrease in the carrying value of property, plant and equipment as at January 1, 2010 with respect to this impairment loss resulted in a decrease in depreciation expense of approximately $128 for the three months ended September 30, 2010, $380 for the nine months ended September 30, 2010 and $504 for the year ended December 31, 2010.
As at December 31, 2010, the Company evaluated the impairment loss recorded as at January 1, 2010 for possible reversal, and concluded that the impairment loss had reversed by an aggregate $885, net of exchange differences. The impairment loss decreased due to an improvement in the estimated future cash flows. The reversal of the loss was recorded in the Statement of Comprehensive Income (Loss) in the fourth quarter of 2010.
c) Accounting for joint venture
The Company's 50% joint venture interest in Universal was accounted for under previous GAAP using the proportionate consolidation method. The Company's share of Universal's assets, liabilities, revenues, expenses and cash flows were included in the consolidated financial statements on a line- by-line basis. Upon conversion to IFRS, the Company elected to account for this investment using the equity method of accounting. Under this method, the Company's net investment in Universal is now reflected on one line in the Consolidated Balance Sheet and its share of the equity income or loss and related cash inflows and outflows are reflected on one line in the Consolidated Statement of Comprehensive Income (Loss) and Consolidated Statement of Cash Flows, respectively.
Universal is a private company in Canada and is not required to comply with IFRS. However, the accounting policies of Universal have been reviewed and adjustments have been made for reporting purposes, where necessary, to ensure consistency with the policies adopted by the Company. On January 1, 2010, an impairment assessment of Universal's property, plant and equipment was performed in accordance with IAS 36, which resulted in an impairment charge that increased the loss that is shared by the joint venture partners under the equity method of accounting. Accordingly, the Company recorded an increase in its share of the loss in Universal of $3,119 on transition to IFRS. The recoverability of Universal's property, plant and equipment was re-evaluated at December 31, 2010 in accordance with IAS 36 which resulted in a partial reversal of the impairment charge recorded as at January 1, 2010. This resulted in a reduction in the Company's share of the loss in Universal as at December 31, 2010 by $1,880 as compared to the previously reported share of loss under previous GAAP. The Company's share of loss in Universal measured under IFRS was $805 for the year ended December 31, 2010.
d) Foreign currency translation
The Company has concluded that the functional currency of its U.S. subsidiaries is the U.S. dollar. The Company now translates all assets and liabilities included in the financial statements of its U.S. subsidiaries into Canadian dollars at current exchange rates in effect at the balance sheet date, revenues and expenses are translated at average exchange rates prevailing during the period and translation gains or losses are reflected in other comprehensive income (loss).
Previously, non-monetary assets and liabilities were translated at historical exchange rates in effect at the dates of the transactions, revenues and expenses were translated at average exchange rates prevailing during the period and unrealized translation gains or losses were recognized in the Consolidated Statement of Comprehensive Income (Loss).
The financial impact of this change was a decrease in the carrying value of current assets of $263 at January 1, 2010 and $243 at December 31, 2010, a decrease in the carrying value of property, plant equipment of $1,954 at January 1, 2010 and $4,708 at December 31, 2010. Other comprehensive loss increased by $1,537 and $831 for the three and nine month periods ended September 30, 2010, respectively and increased by $2,616 for the year ended December 31, 2010.
In addition, the Company has elected, in accordance with the IFRS transitional provisions, to reset the cumulative translation adjustment account, which includes gains and losses arising from the translation of its U.S. subsidiaries prior to January 1, 2010, to zero. Accordingly, Accumulated other comprehensive loss and Retained earnings were each reduced by $3,829 as at January 1, 2010.
The Company's business is seasonal. Historically, sales are greater in the second and third quarters of each year than in the first and fourth quarters. The Landscape Products business segment is affected to a greater degree than the Masonry Products business segment. Consequently, the results of operations and cash flows for the three and nine month periods ended September 30, 2011 are not necessarily indicative of the results to be expected for the full year.
The Company also wishes to announce the appointment of Mr. Trevor M. Sandler as Vice-President, Finance and Chief Financial Officer effective November 8, 2011. Mr. Sandler assumes the role previously held by Mr. Ken Mondor who retired effective the close of business on November 7, 2011. The Company and Board of Directors wish to thank Ken for his diligence, competence and tireless efforts throughout the past 20 years.
Certain statements contained herein constitute "forward-looking statements". Such forward-looking statements involve known and unknown risks, uncertainties and other factors, including, but not limited to, those identified under "Risks and Uncertainties" in the Company's 2010 Annual Report, which may cause actual results, performance or achievements of the Company to be materially different from any future result, performance or achievements expressed or implied by such forward- looking statements.
Brampton Brick is Canada's second largest manufacturer of clay brick, serving markets in Ontario, Quebec and the Northeast and Midwestern United States from its brick manufacturing plants located in Brampton, Ontario and near Terre Haute, Indiana. To complement the clay brick product line, the Company also manufactures a range of concrete masonry products, including stone veneer products marketed under the Stoneworks™ trade name. Concrete interlocking paving stones, retaining walls, garden walls and enviro products are manufactured in Markham, Milton and Brampton, Ontario and Wixom, Michigan. These products are sold to markets in Ontario, Quebec, Michigan, New York, Pennsylvania, Ohio, Kentucky, Illinois and Indiana under the Oaks™ trade name. Products are used for residential construction and for industrial, commercial, and institutional building projects. The Company also holds a 50% joint-venture interest in Universal Resource Recovery Inc., which operates a waste composting facility in Welland, Ontario.
| Selected Financial Information |
(unaudited) (in thousands of Canadian dollars) |
| September 30 | December 31 | January 1 | ||||||
| CONSOLIDATED BALANCE SHEET | 2011 | 2010 | 2010 | |||||
| ASSETS | ||||||||
| Current assets | ||||||||
| Cash and cash equivalents | $ | 2,654 | $ | 5,383 | $ | 2,886 | ||
| Trade and other receivables | 13,249 | 6,136 | 6,278 | |||||
| Inventories | 20,913 | 23,754 | 17,488 | |||||
| Income taxes recoverable | 125 | 7 | 1,730 | |||||
| Promissory note receivable | – | – | 1,335 | |||||
| Other assets | 982 | 574 | 617 | |||||
| 37,923 | 35,854 | 30,334 | ||||||
| Non-current assets | ||||||||
| Property, plant and equipment | 175,167 | 175,023 | 183,834 | |||||
| Investment in Universal Resource Recovery Inc. | 940 | 5,562 | 1,567 | |||||
| Total assets | $ | 214,030 | $ | 216,439 | $ | 215,735 | ||
| LIABILITIES | ||||||||
| Current liabilities | ||||||||
| Bank operating advances | $ | 6,382 | $ | 1,824 | $ | 750 | ||
| Trade payables | 9,303 | 9,638 | 8,526 | |||||
| Income taxes payable | 828 | 825 | 1,572 | |||||
| Current portion of long-term debt | 3,216 | 3,075 | 3,512 | |||||
| Current portion of derivative financial instrument | 1,459 | 604 | 867 | |||||
| Decommissioning provisions | 45 | 50 | 100 | |||||
| Other liabilities | 2,914 | 1,339 | 1,174 | |||||
| 24,147 | 17,355 | 16,501 | ||||||
| Non-current liabilities | ||||||||
| Long-term debt | 36,077 | 37,271 | 30,971 | |||||
| Derivative financial instrument | – | 828 | 917 | |||||
| Decommissioning provisions | 915 | 942 | 905 | |||||
| Deferred income tax liabilities | 15,205 | 15,065 | 15,111 | |||||
| Total liabilities | 76,344 | 71,461 | 64,405 | |||||
| EQUITY | ||||||||
| Equity attributable to owners of the parent | ||||||||
| Share capital | 33,689 | 33,689 | 33,689 | |||||
| Contributed surplus | 1,773 | 1,658 | 1,488 | |||||
| Accumulated other comprehensive income (loss) | 16 | (2,616 | ) | – | ||||
| Retained earnings | 102,094 | 112,135 | 114,707 | |||||
| 137,572 | 144,866 | 149,884 | ||||||
| Non-controlling interests | 114 | 112 | 1,446 | |||||
| Total equity | 137,686 | 144,978 | 151,330 | |||||
| Total liabilities and equity | $ | 214,030 | $ | 216,439 | $ | 215,735 | ||
| Selected Financial Information |
| (unaudited) (in thousands of Canadian dollars, except per share amounts) |
| CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (LOSS) | Three months ended September 30 | Nine months ended September 30 | |||||||||||
| 2011 | 2010 | 2011 | 2010 | ||||||||||
| Revenues | $ | 26,307 | $ | 20,510 | $ | 60,418 | $ | 56,471 | |||||
| Cost of sales | 20,597 | 15,472 | 49,611 | 45,515 | |||||||||
| Selling expenses | 1,545 | 1,810 | 5,286 | 5,167 | |||||||||
| General and administrative expenses | 1,581 | 1,326 | 4,638 | 3,877 | |||||||||
| (Gain) loss on sale of property, plant and equipment | (62 | ) | – | (63 | ) | 7 | |||||||
| Other (income) expense | 36 | 21 | 55 | (105 | ) | ||||||||
| 23,697 | 18,629 | 59,527 | 54,461 | ||||||||||
| Operating income | 2,610 | 1,881 | 891 | 2,010 | |||||||||
| Finance (expense) income | |||||||||||||
| Finance costs | (1,383 | ) | (1,235 | ) | (3,593 | ) | (3,416 | ) | |||||
| Finance income | 5 | 17 | 23 | 52 | |||||||||
| (1,378 | ) | (1,218 | ) | (3,570 | ) | (3,364 | ) | ||||||
| Share of loss from investment in Universal Resource Recovery Inc. | (5,840 | ) | (690 | ) | (7,347 | ) | (1,925 | ) | |||||
| Loss before income taxes | (4,608 | ) | (27 | ) | (10,026 | ) | (3,279 | ) | |||||
| Recovery of (provision for) income taxes | |||||||||||||
| Current | (570 | ) | (35 | ) | 126 | (513 | ) | ||||||
| Deferred | 104 | 152 | (139 | ) | 470 | ||||||||
| (466 | ) | 117 | (13 | ) | (43 | ) | |||||||
| Net income (loss) for the period | $ | (5,074 | ) | $ | 90 | $ | (10,039 | ) | $ | (3,322 | ) | ||
| Net income (loss) attributable to: | |||||||||||||
| Owners of the parent | $ | (5,074 | ) | $ | 73 | $ | (10,041 | ) | $ | (3,371 | ) | ||
| Non-controlling interests | – | 17 | 2 | 49 | |||||||||
| Net income (loss) for the period | $ | (5,074 | ) | $ | 90 | $ | (10,039 | ) | $ | (3,322 | ) | ||
| Other comprehensive income (loss) | |||||||||||||
| Foreign currency translation | $ | 4,172 | $ | (1,537 | ) | $ | 2,632 | $ | (831 | ) | |||
| Total comprehensive loss for the period | $ | (902 | ) | $ | (1,447 | ) | $ | (7,407 | ) | $ | (4,153 | ) | |
| Total comprehensive income (loss) attributable to: | |||||||||||||
| Owners of the parent | $ | (902 | ) | $ | (1,464 | ) | $ | (7,409 | ) | $ | (4,202 | ) | |
| Non-controlling interests | – | 17 | 2 | 49 | |||||||||
| Total comprehensive loss for the period | $ | (902 | ) | $ | (1,447 | ) | $ | (7,407 | ) | $ | (4,153 | ) | |
| Net income (loss) per Class A and Class B share | $ | (0.46 | ) | $ | 0.01 | $ | (0.92 | ) | $ | (0.31 | ) | ||
| Weighted average Class A and Class B shares outstanding (000's) | 10,937 | 10,937 | 10,937 | 10,937 | |||||||||
| Selected Financial Information |
| (unaudited) (in thousands of Canadian dollars) |
Nine months ended September 30 |
||||||||
| CONSOLIDATED STATEMENT OF CASH FLOWS | 2011 | 2010 | ||||||
| Cash provided by (used for) | ||||||||
| Operating activities | ||||||||
| Loss for the period | $ | (10,039 | ) | $ | (3,322 | ) | ||
| Items not affecting cash and cash equivalents | ||||||||
| Depreciation | 5,040 | 8,293 | ||||||
| Deferred income taxes | 139 | (470 | ) | |||||
| Unrealized foreign currency exchange gain | (67 | ) | (261 | ) | ||||
| Share of loss from investment in Universal Resource Recovery Inc. | 7,347 | 1,925 | ||||||
| (Gain) loss on sale of property, plant and equipment | (63 | ) | 7 | |||||
| Loss on derivative financial instrument | 27 | 7 | ||||||
| Net interest expense | 3,548 | 3,406 | ||||||
| Other | 115 | 136 | ||||||
| 6,047 | 9,721 | |||||||
| Changes in non-cash operating items | ||||||||
| Trade and other receivables | (6,984 | ) | (3,111 | ) | ||||
| Inventories | 3,148 | (3,743 | ) | |||||
| Other assets | (397 | ) | (260 | ) | ||||
| Trade payables | 78 | 2,502 | ||||||
| Income taxes payable (net) | (115 | ) | 1,751 | |||||
| Other liabilities | 1,468 | 1,740 | ||||||
| (2,802 | ) | (1,121 | ) | |||||
| Payments for decommissioning of assets | (59 | ) | (150 | ) | ||||
| Cash provided by operating activities | 3,186 | 8,450 | ||||||
| Investing activities | ||||||||
| Purchase of property, plant and equipment | (2,484 | ) | (1,501 | ) | ||||
| Advances to Universal Resource Recovery Inc. | (2,725 | ) | (3,400 | ) | ||||
| Proceeds from promissory note | – | 1,338 | ||||||
| Proceeds from sale of property, plant and equipment | 63 | 2 | ||||||
| Cash used for investment activities | (5,146 | ) | (3,561 | ) | ||||
| Financing activities | ||||||||
| Increase (decrease) in bank operating advances | 4,558 | (750 | ) | |||||
| Issuance of subordinated debentures | – | 7,523 | ||||||
| Repayment of promissory note | – | (1,900 | ) | |||||
| Repayment of long-term debt | (1,730 | ) | (187 | ) | ||||
| Interest paid on term loans and bank operating advances | (3,300 | ) | (3,250 | ) | ||||
| Payments on obligations under capital leases | (316 | ) | (240 | ) | ||||
| Cash (used for) provided by financing activities | (788 | ) | 1,196 | |||||
| Foreign exchange on cash held in foreign currency | 19 | (8 | ) | |||||
| (Decrease) increase in cash and cash equivalents | (2,729 | ) | 6,077 | |||||
| Cash and cash equivalents at the beginning of the period | 5,383 | 2,886 | ||||||
| Cash and cash equivalents at the end of the period | $ | 2,654 | $ | 8,963 | ||||
| Selected Financial Information |
| (unaudited) (in thousands of Canadian dollars) |
| CONSOLIDATED STATEMENT OF CHANGES IN EQUITY |
| Attributable to owners of the parent | |||||||||||||||||||
| Share Capital | Contributed Surplus | Accumulated Other Comprehensive Income (Loss) | Retained Earnings | Total | Non-controlling interests | Total Equity | |||||||||||||
| Balance - January 1, 2011 | $ | 33,689 | $ | 1,658 | $ | (2,616 | ) | $ | 112,135 | $ | 144,866 | $ | 112 | 144,978 | |||||
| Loss for the period | – | – | – | (10,041 | ) | (10,041 | ) | 2 | (10,039 | ) | |||||||||
| Other comprehensive income (net of taxes) | – | – | 2,632 | – | 2,632 | – | 2,632 | ||||||||||||
| Comprehensive loss for the period | – | – | 2,632 | (10,041 | ) | (7,409 | ) | 2 | (7,407 | ) | |||||||||
| Share-based compensation | – | 115 | – | – | 115 | – | 115 | ||||||||||||
| Balance - September 30, 2011 | $ | 33,689 | $ | 1,773 | $ | 16 | $ | 102,094 | $ | 137,572 | $ | 114 | $ | 137,686 | |||||
| Balance - January 1, 2010 | $ | 33,689 | $ | 1,488 | $ | – | $ | 114,707 | $ | 149,884 | $ | 1,446 | 151,330 | ||||||
| Loss for the period | – | – | – | (3,371 | ) | (3,371 | ) | 49 | (3,322 | ) | |||||||||
| Other comprehensive loss (net of taxes) | – | – | (831 | ) | – | (831 | ) | – | (831 | ) | |||||||||
| Comprehensive loss for the period | – | – | (831 | ) | (3,371 | ) | (4,202 | ) | 49 | (4,153 | ) | ||||||||
| Share-based compensation | – | 136 | – | – | 136 | – | 136 | ||||||||||||
| Balance - September 30, 2010 | $ | 33,689 | $ | 1,624 | $ | (831 | ) | $ | 111,336 | $ | 145,818 | $ | 1,495 | $ | 147,313 | ||||
Contact Information:
Jeffrey G. Kerbel
President and Chief Executive Officer
905-840-1011
905-840-1535 (FAX)
Brampton Brick Limited
Trevor M. Sandler
Vice-President, Finance and Chief Financial Officer
905-840-1011
905-840-1535 (FAX)
investor.relations@bramptonbrick.com