BRAMPTON, ONTARIO--(Marketwire - March 20, 2012) -
(All amounts are stated in thousands of Canadian dollars, except per share amounts.)
Brampton Brick Limited (TSX:BBL.A) today reported a loss of $9,976, or $0.91 per Class A Subordinate Voting share ("Class A share") and Class B Multiple Voting Share ("Class B share"), for the year ended December 31, 2011 compared to a loss of $2,538, or $0.24 per share, in 2010. The aggregate weighted average number of Class A shares and Class B shares outstanding was 10,936,554 in both periods.
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 accordingly, including an opening Consolidated Balance Sheet as at January 1, 2010. A summary of the significant financial effects of the conversion to IFRS is described below.
DISCUSSION OF OPERATIONS
YEAR ENDED DECEMBER 31, 2011
The loss for the year included the share of loss from the investment in Universal Resource Recovery Inc. ("Universal") of $8,857, or $0.81 per share. This loss included the impact of an impairment charge of $6,373, or $0.58 per share relating to the underlying assets of Universal. This matter is discussed in greater detail below. Excluding the impact of the impairment charge in Universal, the Company would have reported a loss of $3,603, or $0.33 per share.
For the year ended December 31, 2011, revenues increased by $7,390 to $80,013 compared to $72,623 in 2010, due primarily to sales volume increases in both the Masonry and Landscape Products business segments.
Operating results, however, were offset by higher manufacturing costs due to lower clay brick production volumes, start-up costs at the Brampton concrete plant and costs associated with new product development and processes at the Indiana and Brampton clay brick plants to better position the Company for positive growth in 2012 and beyond. Higher yard and delivery expenses and higher general and administrative expenses also increased and were partially offset by lower depreciation expense.
Yard and delivery expenses, which are included in Cost of Sales in the Consolidated Statement of Comprehensive Income (Loss) were higher for the year ended December 31, 2011 compared to 2010. This increase arose as a result of the 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 to 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 $4,318, primarily due to the change in the estimated useful life of production equipment of $3,780 for the year ended December 31, 2011 compared to the same period in 2010.
General and administrative expenses increased by $1,026, or 19.3%, primarily due to non-recurring consulting expenses, including the costs associated with the transition to IFRS, employment related expenses and an increase in the provision for uncollectible accounts.
For the year ended December 31, 2011, the Company recorded operating income of $1,098 compared to $2,160 in 2010.
Finance costs increased as a result of the additional interest expense in 2011 on the $9,000 subordinated debentures which were outstanding for the whole of 2011 compared with only 10 months in the prior year, as the debentures were issued on February 26, 2010. In addition, the Company recorded a loss on a derivative financial instrument in 2011, prior to its settlement on October 3, 2011.
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 therefore is not required to comply with IFRS in preparing its annual financial statements. To ensure consistency with the policies adopted by the Company, the accounting policies of Universal have been reviewed and adjustments have been made to comply with IFRS for reporting purposes. As a result of the suspension of operations, the Company assessed that there were indicators of impairment and consequently performed an impairment analysis on the underlying assets.
The recoverable amount of the assets was determined based on the fair value less costs to sell approach. The fair value was determined based on independent qualified appraisal reports and an assessment by industry experts. Based on this analysis, the Company concluded that, under IFRS, the underlying assets of the investment were impaired by an overall amount of $8,164. For reporting purposes at December 31, 2011, this impairment loss amount was limited to $6,373, which was the remaining value of the Company's investment in Universal after recording the Company's share of the 2011 operating loss in Universal. Losses in excess of the value of the investment in Universal are only recognized to the extent that the Company has incurred legal or constructive obligations or made payments on behalf of the joint venture of which there were none at December 31, 2011.
After recording the limited impairment loss, the value of the investment in Universal as at December 31, 2011 was reported as zero.
As at January 1, 2010, an impairment assessment led to an impairment charge of $6,238 on the underlying assets of Universal. For the year ended December 31, 2010, a partial reversal of $3,760 of the impairment charge recorded at January 1, 2010 was recorded. These impairment charges and reversals led to the Company's share of loss of the investment in Universal to be increased by $3,119 as at January 1, 2010 and reduced by $1,880 for the year ended December 31, 2010.
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.
Recovery of income taxes was $2,281 for fiscal 2011, compared to a recovery of $246 in 2010. Loans advanced to Universal totaling $16,251 were determined for tax purposes to be a deemed bad debt and therefore claimed as an allowable business investment loss. Accordingly, a deferred tax asset amounting to $2,031 was recognized. This deferred tax asset can be used to offset future non-capital taxable income of the Company.
Deferred tax assets were recognized on losses relating solely to the Company's Canadian operations in both 2011 and 2010. The Company has not recorded a deferred tax asset with respect to the potential deferred tax benefit pertaining to losses incurred by its U.S. operations.
THREE MONTHS ENDED DECEMBER 31, 2011
For the fourth quarter ended December 31, 2011, the Company recorded net income of $63, or $0.00 per Class A share and Class B share, compared to net income of $784, or $0.07 per Class A share and Class B share, for the fourth quarter of 2010. The aggregate weighted average number of Class A shares and Class B shares outstanding was 10,936,554 in both periods.
Revenues increased by $3,443 to $19,595 in the fourth quarter of 2011 from $16,152 for the same period in 2010. The increase was the result of higher sales volumes in both the Masonry Products and Landscape Products business segments.
Operating results for the quarter were negatively impacted by an increase in manufacturing costs charged to operations because of lower production levels related to a realignment of inventory levels. This unfavourable cost variance was partially offset by a decline in depreciation expense.
For the fourth quarter ended December 31, 2011, the Company recorded operating income of $207, an improvement of $57 over operating income of $150 for the fourth quarter in 2010.
Finance costs were higher in the fourth quarter ended December 31, 2011 than the corresponding period in 2010 due to the gain on the interest rate swap contract recorded in the fourth quarter of 2010. The interest rate swap contract was settled on October 3, 2011.
A more detailed discussion with respect to each operating business segment follows:
MASONRY PRODUCTS
For the year ended December 31, 2011, revenues increased to $58,005 from $51,758 in 2010. The increase in revenues was generated from growth in shipments of masonry concrete products and an increase in clay brick revenues. The introduction of concrete block products into the Ontario market in April 2011 was a key component of the increase in masonry sales.
Clay brick shipments in the Company's Canadian markets were slightly below shipments in 2010. In the U.S., clay brick shipments improved due to the Company's ongoing establishment in the market place and its expanded product offerings. Masonry concrete products in 2011 benefitted from the increased advertising and marketing expenditures incurred in 2010 for the 2011 construction season.
Operating results for the year were negatively affected by higher manufacturing costs charged to operations because of much lower clay brick production volumes, and higher yard and delivery expenses. General and administrative expenses were higher for the same reasons as described in the 'Discussion of Operations' section. Lower depreciation expense of $2,305, partially offset these increases. As a result, operating income was $1,362 compared to $4,042 in 2010.
For the fourth quarter of 2011, revenues increased by $2,887, or 24%, from $12,104 in 2010 to $14,991 on the strength of higher shipments of clay brick. As noted earlier, the introduction of concrete block in April 2011 contributed to the increase over the corresponding quarter in 2010. The decision to scale back clay brick production resulted in higher manufacturing costs charged to operations which negatively affected operating results for the quarter. As a result, operating income for the quarter was $634 compared to $1,417 for the same period in 2010.
LANDSCAPE PRODUCTS
Revenues of the Landscape Products business segment were $22,008 for the year ended December 31, 2011, an increase of $1,143 over revenues of $20,865 in 2010.
Operating results were positively impacted from growth in sales volumes in the Company's Canadian markets, as the Company continued to improve its market position. This favourability was partially offset by lower sales in the Company's U.S. markets, primarily Michigan. Volumes in the U.S. markets were negatively impacted due to a slow recovery in the U.S. and by unfavourable weather conditions in the first half of 2011. A decrease in depreciation expense of $2,013 helped to reduce the negative operating results.
For the year ended December 31, 2011, the Landscape Products business segment incurred an operating loss of $264 compared to an operating loss of $1,882 in 2010.
The Landscape Products business segment reported an operating loss of $427 on revenues of $4,604 for the fourth quarter ended December 31, 2011 compared to an operating loss of $1,267 on revenues of $4,048 in 2010.
CASH FLOWS
For the year ended December 31, 2011, cash flow provided by operating activities totaled $7,642 compared to $7,581 in 2010. Non-cash expenses including depreciation and the loss from investment in Universal were offset in part by changes in working capital during the year ended December 31, 2011. In 2010, high non-cash expenses including depreciation were partially offset by higher investment in inventories.
The decrease in cash used for working capital requirements was due to an increase in accounts receivable outstanding as at the end of December 31, 2011, as a result of increased revenues in the fourth quarter and timing of collections. This was offset in part by lower inventories as a result of lower production volumes of certain products, primarily clay brick, which reduced cash requirements.
Cash utilized for purchases of property, plant and equipment totaled $2,981 in 2011, including approximately $620 relating to new products, compared to $2,266 in 2010.
Advances to Universal during 2011 were $3,295 compared to $4,800 in 2010.
Cash proceeds of $1,338 from the final principal and interest receivable under the promissory note were received on September 29, 2010. A portion of the cash proceeds from this promissory note was distributed to non-controlling interests by way of cash dividends by a subsidiary company amounting to $105, of which $30 was paid in December 2011 and $75 was paid in January 2012. Cash dividends paid to non-controlling interests in 2010 totaled $1,120.
Bank operating advances increased by $3,323 in 2011 to fund purchases of property, plant and equipment, as well as interest amounts and debt repayments. Advances to Universal were funded from the Company's cash resources.
In July 2007, the Company had entered into an interest rate swap contract to hedge the risk arising from variability of cash flows related to anticipated borrowings under its term bank facility. The repayment on June 29, 2009 of the term bank loan resulted in the interest rate swap contract no longer being an effective cash flow hedge. Changes in the fair value of the interest rate swap are reflected in 'Finance costs' in the Consolidated Statement of Comprehensive Income (Loss). The contract was settled on October 3, 2011 for $1,459. As at December 31, 2010 current and non-current derivative financial liabilities were $604 and $828 respectively.
During 2011, principal repayments on term loans totaled $2,791, of which $2,500 was paid on the long-term financing arrangement.
On February 26, 2010, the Company completed a $9,000 subordinated secured debenture financing. In connection with this debenture issue, parties, including a Director of the Company, holding an indirect interest in $1,100 of the $3,000 promissory note payable which was due but not paid on December 7, 2009, subscribed for an equal or greater principal amount of the debenture issue. The remaining parties, holding an indirect interest in $1,900 of the $3,000 promissory note payable and who include a Director of the Company, 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 promissory note was repaid on the due date.
The subordinated debentures were recorded at fair value for accounting purposes which, net of transaction costs incurred in the amount of $377, amounted to $8,623 and are 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 December 31, 2011, the unamortized transaction costs were $145.
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 December 31, 2011, bank operating advances were $5,147. This represented an increase of $3,323 from the amount outstanding at December 31, 2010.
Trade payables totaled $9,026 at December 31, 2011 compared to $9,638 at December 31, 2010 and $8,526 at January 1, 2010.
The ratio of total liabilities to shareholders' equity was 0.51:1 at December 31, 2011 compared to 0.49:1 at December 31, 2010 and 0.43:1 at January 1, 2010. The increase in this ratio from December 2010 to December 2011 was primarily due to lower retained earnings resulting from the loss incurred in 2011, offset in part by the impact of a decrease in foreign currency translation loss in Accumulated other comprehensive loss.
As at December 31, 2011, working capital was $13,137, representing a working capital ratio of 1.65:1. Comparable figures for working capital and the working capital ratio at December 31, 2010 and January 1, 2010 were $18,499, and 2.07:1; and $13,833, and 1.84:1 respectively. The decline in working capital was due to an increase in bank operating advances in 2011. Cash and cash equivalents totaled $1,180 at December 31, 2011 compared to $5,383 at December 31, 2010 and $2,886 at January 1, 2010.
On October 4, 2011 the Company concluded new arrangements with a 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 trade receivables 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. As at December 31, 2011 the borrowing base was $16,681 and the utilization was $5,376, including $5,147 for bank operating advances and $229 for outstanding letters of credit.
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 term financing agreement and operating credit facility as at December 31, 2011 and anticipates that it will maintain compliance throughout 2012.
CONVERSION TO INTERNATIONAL FINANCIAL REPORTING STANDARDS
Effective January 1, 2011, the Company was required to prepare and report its financial statements in accordance with IFRS. Accordingly, the conversion from Canadian generally accepted accounting principles ("GAAP") to IFRS was applicable to the Company's reporting for the first quarter ended March 31, 2011. The 2010 comparative information, included with the 2011 interims and annual consolidated financial statements were also prepared utilizing IFRS. However, throughout 2010, including the 2010 year-end, the Company's consolidated financial statements were reported in accordance with GAAP.
The more significant financial effects on the Company's consolidated financial statements resulting from the conversion to IFRS are presented below.
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 Retained Earnings in the January 1, 2010 opening Consolidated Balance Sheet. This deferred tax liability was partially offset by a deferred tax asset of $371 recognized as at January 1, 2010 and recorded in the fourth quarter of 2011 in respect of capital losses carried forward for which no tax benefit had previously been recorded.
The increase in the carrying amount of machinery and equipment resulted in an increase in depreciation expense of $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 $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 as 'Investment in Universal Resource Recovery Inc.' in the Consolidated Balance Sheet and its share of the equity income or loss and related cash inflows and outflows are reflected as 'Share of loss from investment in Universal Resource Recovery Inc.' 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 'Other (income) loss' 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 and equipment of $1,954 at January 1, 2010 and $4,708 at December 31, 2010. Other comprehensive loss 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.
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 and concrete brick and block. 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 is a waste composting facility located in Welland, Ontario.
Selected Financial Information
| (audited) (in thousands of Canadian dollars) | |||||||||||
| December 31 2011 |
December 31 2010 |
January 1 2010 |
|||||||||
| CONSOLIDATED BALANCE SHEET | |||||||||||
| ASSETS | |||||||||||
| Current assets | |||||||||||
| Cash and cash equivalents | $ | 1,180 | $ | 5,383 | $ | 2,886 | |||||
| Trade and other receivables | 9,964 | 6,136 | 6,278 | ||||||||
| Inventories | 20,805 | 23,754 | 17,488 | ||||||||
| Income taxes recoverable | 744 | 7 | 1,730 | ||||||||
| Promissory note receivable | - | - | 1,335 | ||||||||
| Other assets | 597 | 574 | 617 | ||||||||
| 33,290 | 35,854 | 30,334 | |||||||||
| Non-current assets | |||||||||||
| Property, plant and equipment | 172,629 | 175,023 | 183,834 | ||||||||
| Investment in Universal Resource Recovery Inc. | - | 5,562 | 1,567 | ||||||||
| Total assets | $ | 205,919 | $ | 216,439 | $ | 215,735 | |||||
| LIABILITIES | |||||||||||
| Current liabilities | |||||||||||
| Bank operating advances | $ | 5,147 | $ | 1,824 | $ | 750 | |||||
| Trade payables | 9,026 | 9,638 | 8,526 | ||||||||
| Income taxes payable | 829 | 825 | 1,572 | ||||||||
| Current portion of debt | 3,091 | 3,075 | 3,512 | ||||||||
| Current portion of derivative financial instrument | - | 604 | 867 | ||||||||
| Decommissioning provisions | 50 | 50 | 100 | ||||||||
| Other liabilities | 2,010 | 1,339 | 1,174 | ||||||||
| 20,153 | 17,355 | 16,501 | |||||||||
| Non-current liabilities | |||||||||||
| Non-current portion of debt | 35,166 | 37,271 | 30,971 | ||||||||
| Derivative financial instrument | - | 828 | 917 | ||||||||
| Decommissioning provisions | 950 | 942 | 905 | ||||||||
| Deferred income tax liabilities | 13,163 | 14,694 | 14,740 | ||||||||
| Total liabilities | $ | 69,432 | $ | 71,090 | $ | 64,034 | |||||
| EQUITY | |||||||||||
| Equity attributable to owners of the parent | |||||||||||
| Share capital | $ | 33,689 | $ | 33,689 | $ | 33,689 | |||||
| Contributed surplus | 1,801 | 1,658 | 1,488 | ||||||||
| Accumulated other comprehensive loss | (1,540 | ) | (2,616 | ) | - | ||||||
| Retained earnings | 102,527 | 112,506 | 115,078 | ||||||||
| $ | 136,477 | $ | 145,237 | $ | 150,255 | ||||||
| Non-controlling interests | 10 | 112 | 1,446 | ||||||||
| Total equity | $ | 136,487 | $ | 145,349 | $ | 151,701 | |||||
| Total liabilities and equity | $ | 205,919 | $ | 216,439 | $ | 215,735 | |||||
| (unaudited) (in thousands of Canadian dollars, except per share amounts) | ||||||||||||||||
| CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (LOSS) |
Three months ended December 31 |
Year ended December 31 |
||||||||||||||
| 2011 | 2010 | 2011 | 2010 | |||||||||||||
| Revenues | $ | 19,595 | $ | 16,152 | $ | 80,013 | $ | 72,623 | ||||||||
| Cost of sales | 15,955 | 13,916 | 65,566 | 59,431 | ||||||||||||
| Selling expenses | 1,743 | 1,833 | 7,029 | 7,000 | ||||||||||||
| General and administrative expenses | 1,713 | 1,448 | 6,351 | 5,325 | ||||||||||||
| Gain on sale of property, plant and equipment | - | (10 | ) | (63 | ) | (3 | ) | |||||||||
| Other (income) expense | (23 | ) | (300 | ) | 32 | (405 | ) | |||||||||
| Asset impairment reversal | - | (885 | ) | - | (885 | ) | ||||||||||
| 19,388 | 16,002 | 78,915 | 70,463 | |||||||||||||
| Operating income | 207 | 150 | 1,098 | 2,160 | ||||||||||||
| Finance (expense) income | ||||||||||||||||
| Finance costs | (930 | ) | (775 | ) | (4,523 | ) | (4,191 | ) | ||||||||
| Finance income | 2 | - | 25 | 52 | ||||||||||||
| (928 | ) | (775 | ) | (4,498 | ) | (4,139 | ) | |||||||||
| Share of income (loss) from investment inUniversal Resource Recovery Inc. | (1,510 |
) |
1,120 |
(8,857 |
) |
(805 |
) |
|||||||||
| Income (loss) before income taxes | (2,231 | ) | 495 | (12,257 | ) | (2,784 | ) | |||||||||
| Recovery of (provision for) income taxes | ||||||||||||||||
| Current | 624 | 713 | 750 | 200 | ||||||||||||
| Deferred | 1,670 | (424 | ) | 1,531 | 46 | |||||||||||
| 2,294 | 289 | 2,281 | 246 | |||||||||||||
| Net income (loss) for the period | $ | 63 | $ | 784 | $ | (9,976 | ) | $ | (2,538 | ) | ||||||
| Net income (loss) attributable to: | ||||||||||||||||
| Owners of the parent | $ | 62 | $ | 799 | $ | (9,979 | ) | $ | (2,572 | ) | ||||||
| Non-controlling interests | 1 | (15 | ) | 3 | 34 | |||||||||||
| Net income (loss) for the period | $ | 63 | $ | 784 | $ | (9,976 | ) | $ | (2,538 | ) | ||||||
| Other comprehensive income (loss) | ||||||||||||||||
| Foreign currency translation | $ | (1,556 | ) | $ | (1,785 | ) | $ | 1,076 | $ | (2,616 | ) | |||||
| Total comprehensive loss for the period | $ | (1,493 | ) | $ | (1,001 | ) | $ | (8,900 | ) | $ | (5,154 | ) | ||||
| Total comprehensive income (loss) attributable to: | ||||||||||||||||
| Owners of the parent | $ | (1,494 | ) | $ | (986 | ) | $ | (8,903 | ) | $ | (5,188 | ) | ||||
| Non-controlling interests | 1 | (15 | ) | 3 | 34 | |||||||||||
| Total comprehensive loss for the period | $ | (1,493 | ) | $ | (1,001 | ) | $ | (8,900 | ) | $ | (5,154 | ) | ||||
| Net income (loss) per Class A and Class B share | $ | (0.00 | ) | $ | 0.07 | $ | (0.91 | ) | $ | (0.24 | ) | |||||
| Weighted average Class A and Class Bshares outstanding (000's) | 10,937 |
10,937 |
10,937 |
10,937 |
||||||||||||
| (audited) (in thousands of Canadian dollars) | ||||||||
| Year ended | ||||||||
| December 31 | ||||||||
| CONSOLIDATED STATEMENT OF CASH FLOWS | 2011 | 2010 | ||||||
| Cash provided by (used for) | ||||||||
| Operating activities | ||||||||
| Loss for the year | $ | (9,976 | ) | $ | (2,538 | ) | ||
| Items not affecting cash and cash equivalents | ||||||||
| Depreciation | 6,756 | 11,074 | ||||||
| Current income taxes | (750 | ) | (200 | ) | ||||
| Deferred income taxes | (1,531 | ) | (46 | ) | ||||
| Gain on sale of property, plant and equipment | (63 | ) | (3 | ) | ||||
| Unrealized foreign currency exchange gain | (34 | ) | (335 | ) | ||||
| Asset impairment reversal | - | (885 | ) | |||||
| Loss (gain) on derivative financial instrument | 27 | (352 | ) | |||||
| Net interest expense | 4,471 | 4,536 | ||||||
| Share of loss in investment in Universal Resource Recovery Inc. | 8,857 | 805 | ||||||
| Other | 144 | 107 | ||||||
| 7,901 | 12,163 | |||||||
| Changes in non-cash operating items | ||||||||
| Trade and other receivables | (3,804 | ) | 116 | |||||
| Inventories | 3,098 | (6,239 | ) | |||||
| Other assets | (21 | ) | 16 | |||||
| Trade payables | (14 | ) | (4 | ) | ||||
| Income tax credits applied | - | 2,031 | ||||||
| Other liabilities | 524 | 550 | ||||||
| (217 | ) | (3,530 | ) | |||||
| Income tax refunds received (payments) | 17 | (855 | ) | |||||
| Payments for decommissioning of assets | (59 | ) | (197 | ) | ||||
| Cash provided by operating activities | 7,642 | 7,581 | ||||||
| Investing activities | ||||||||
| Purchase of property, plant and equipment | (2,981 | ) | (2,266 | ) | ||||
| Advances to Universal Resource Recovery Inc. | (3,295 | ) | (4,800 | ) | ||||
| Proceeds from promissory note | - | 1,338 | ||||||
| Proceeds from sale of property, plant and equipment | 63 | 12 | ||||||
| Cash used for investment activities | (6,213 | ) | (5,716 | ) | ||||
| Financing activities | ||||||||
| Increase in bank operating advances | 3,323 | 1,074 | ||||||
| Issuance of subordinated debentures | - | 7,523 | ||||||
| Repayment of promissory note | - | (1,900 | ) | |||||
| Settlement of derivative financial liability | (1,459 | ) | - | |||||
| Repayment of debt | (2,791 | ) | (265 | ) | ||||
| Interest paid on term loans and bank operating advances | (4,192 | ) | (4,327 | ) | ||||
| Payments on obligations under finance leases | (491 | ) | (329 | ) | ||||
| Payment of dividends by subsidiary to non-controlling interests | (30 | ) | (1,120 | ) | ||||
| Cash (used for) provided by financing activities | (5,640 | ) | 656 | |||||
| Foreign exchange on cash held in foreign currency | 8 | (24 | ) | |||||
| (Decrease) increase in cash and cash equivalents | (4,203 | ) | 2,497 | |||||
| Cash and cash equivalents at the beginning of the year | 5,383 | 2,886 | ||||||
| Cash and cash equivalents at the end of the year | $ | 1,180 | $ | 5,383 | ||||
| (audited) (in thousands of Canadian dollars) | |||||||||||||||||||||||||||
| CONSOLIDATED STATEMENT OF CHANGES IN EQUITY | |||||||||||||||||||||||||||
| Attributable to owners of the parent | |||||||||||||||||||||||||||
| Accumulated | |||||||||||||||||||||||||||
| Other | Non- | ||||||||||||||||||||||||||
| Share | Contributed | Comprehensive | Retained | controlling | Total | ||||||||||||||||||||||
| Capital | Surplus | Income (Loss) | Earnings | Total | interests | Equity | |||||||||||||||||||||
| Balance - January 1, 2010 | $ | 33,689 | $ | 1,488 | $ | - | $ | 115,078 | $ | 150,255 | $ | 1,446 | $ | 151,701 | |||||||||||||
| (Loss) income for the year | - | - | - | (2,820 | ) | (2,820 | ) | 34 | (2,786 | ) | |||||||||||||||||
| Reclassification of preference share dividends | - |
- |
- |
248 |
248 |
(248 |
) |
||||||||||||||||||||
| - | |||||||||||||||||||||||||||
| Other comprehensive loss | |||||||||||||||||||||||||||
| (net of taxes, $nil) | - | - | (2,616 | ) | - | (2,616 | ) | - | (2,616 | ) | |||||||||||||||||
| Comprehensive loss | |||||||||||||||||||||||||||
| for the year | - | - | (2,616 | ) | (2,572 | ) | (5,188 | ) | (214 | ) | (5,402 | ) | |||||||||||||||
| Dividends | - | - | - | - | - | (1,120 | ) | (1,120 | ) | ||||||||||||||||||
| Share-based compensation | - | 170 | - | - | 170 | - | 170 | ||||||||||||||||||||
| Balance - December 31, 2010 | $ | 33,689 | $ | 1,658 | $ | (2,616 | ) | $ | 112,506 | $ | 145,237 | $ | 112 | $ | 145,349 | ||||||||||||
| Balance - January 1, 2011 | $ | 33,689 | $ | 1,658 | $ | (2,616 | ) | $ | 112,506 | $ | 145,237 | $ | 112 | $ | 145,349 | ||||||||||||
| (Loss) income for the year | - | - | - | (9,979 | ) | (9,979 | ) | 3 | (9,976 | ) | |||||||||||||||||
| Other comprehensive income (net of taxes, $nil) | - |
- |
1,076 |
- |
1,076 |
- |
|||||||||||||||||||||
| 1,076 | |||||||||||||||||||||||||||
| Comprehensive loss for the year | |||||||||||||||||||||||||||
| - | - | 1,076 | (9,979 | ) | (8,903 | ) | 3 | (8,900 | ) | ||||||||||||||||||
| Dividends | - | - | - | - | - | (105 | ) | (105 | ) | ||||||||||||||||||
| Share-based compensation | - | 143 | - | - | 143 | - | 143 | ||||||||||||||||||||
| Balance - December 31, 2011 | $ | 33,689 | $ | 1,801 | $ | (1,540 | ) | $ | 102,527 | $ | 136,477 | $ | 10 | $ | 136,487 | ||||||||||||
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