Colabor Group Releases Its Results for the First Quarter of Fiscal 2010
28 Abril 2010 - 11:34AM
Marketwired Canada
Colabor Group Inc. (TSX:GCL)
-- Comparable sales slightly down by 3.4% (total sales down by 12.3%)
-- EBITDA margin increases to 3.05%
-- Net earnings of $0.12 per share vs. $0.08 per unit last year
-- Persisting solid cash flows and a sound balance sheet
Colabor Group Inc. (TSX:GCL) ("Colabor" or the "Company") today released its
results for the first quarter of fiscal 2010 ended March 27, 2010. Results for
Q1 2010 reflect the August 25, 2009 conversion of Colabor Income Fund into a
corporation, while results for Q1 2009 reflect Colabor's former corporate
structure.
FIRST QUARTER RESULTS
Sales for the 86-day period ended March 27, 2010 stood at $225.4 million, down
12.3% from $256.9 million for the 87-day period ended March 28, 2009. The
decline is largely due to the loss of a major supply contract, as of February
2010, and to the difficult economic situation which had a particular impact on
distribution operations to the foodservice industry. Excluding the lost
contract, which had a $19.9 million impact on Q1 sales, and based on a similar
number of days, comparable sales declined only 3.4%.
Earnings before financial expenses, taxes, depreciation and amortization
("EBITDA") stood at $6.9 million, or 3.05% of sales, versus $7.7 million, or
3.01% of sales, the year before. The slight improvement to the profit margin
attests to rigorous controls on operating expenses. Net earnings totalled $2.3
million, or $0.12 per diluted share, compared with $1.2 million, or $0.08 per
diluted unit, in 2009. The improvement in net earnings reflects, in part, a low
tax rate stemming from the acquisition of about $130M in tax losses for which
the Company paid $5M to ConjuChem Biotechnologies Inc. upon its conversion into
a corporation.
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Financial highlights Quarters ended
(in $ thousands, except for share data)
March 27, March 28,
2010 2009
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Sales 225,355 256,945
EBITDA(i) 6,873 7,724
Net earnings 2,277 1,215
Per share/unit - basic ($) 0.12 0.08
Per share/unit - diluted ($) 0.12 0.08
Weighted average number of shares outstanding (basic,
in thousands) 19,762 14,471
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(i) Earnings before financial expenses, tax, depreciation and amortization
"The first quarter has historically resulted in lower margins due to seasonal
factors," said Gilles C. Lachance, Colabor's President and Chief Executive
Officer. "Conditions in the foodservice industry remain somewhat challenging, as
the discretionary nature of this expenditure is prompting a wait-and-see
attitude from consumers. However, due to proactive management of operating
expenses, Colabor has succeeded in generating a solid cash flow and maintaining
a sound balance sheet."
Cash flows from operations, before changes in operating assets and liabilities,
totalled $6.0 million compared with $6.4 million a year earlier. As a result,
the basic dividend to cash flow ratio for the period was 94%, and 96% on a
diluted basis.
As at March 27, 2010, the Company had a sound balance sheet, with only $62.1
million drawn on its $100.0 million authorized bank credit facilities. At the
same date, the debt to EBITDA of the last twelve months ratio was 1.64: 1.00,
whereas the Company's credit agreement calls for a ratio of less than 3.00:
1.00. Moreover, the interest coverage ratio was 6.98: 1.00, well above the
required minimum of 3.50: 1.00.
SEGMENTED RESULTS
Sales for the Wholesale Segment were $78.9 million in Q1 2010, down 3.1% from
$81.5 million in Q1 2009. On a comparable basis, sales decreased 2.0%. The
decline on a comparable basis mainly stems from a 3.2% reduction in business
volume to the foodservice industry, which is more affected by the soft economy.
Conversely, comparable business volume with retailers increased by 0.4%,
attesting to this sector's greater resilience in the face of economic
fluctuations.
Sales for the Distribution Segment stood at $146.4 million in Q1 2010, versus
$175.5 million a year earlier. The 16.6% decline is primarily due to the loss of
a major contract in the restaurant sector served by the Summit Division. The
supply contract ended at the start of February 2010. On a comparable basis,
sales fell 4.0% due to tough conditions in the foodservice industry, especially
in Ontario.
OUTLOOK
"In the near term, we feel that restrictive market conditions in the foodservice
industry will also affect the second quarter of this year. On the other hand,
Colabor remains advantageously positioned to capitalize on expansion
opportunities that arise, because of its solid balance sheet, which has been
further strengthened by the recent issue of unsecured convertible subordinated
debentures. We are also actively seeking acquisition targets that would allow us
to expand our product line and geographic reach. We also wish to replace the
volume left open at the Summit Division as quickly as possible, although we are
focusing on business opportunities offering greater profit margins," concluded
Mr. Lachance.
TELECONFERENCE
Colabor will hold a conference call on Wednesday, April 28, 2010, starting at 3
p.m. Eastern Time to discuss its first-quarter results. Interested parties can
join the conference call by dialling 1-888-231-8191. If you are unable to
participate, you can listen to a recording by dialling 1-800-642-1687 and using
your telephone keypad to enter the code 69499048. The recording will be
available on Wednesday, April 28, 2010 as of 6 p.m. until 11:59 p.m. on
Wednesday, May 5, 2010.
NON-GAAP MEASURES
This press release also contains information that is a non-GAAP measure of
performance, such as the concept of earnings before financial charges, taxes,
depreciation and amortization ("EBITDA"). Since these concepts are not defined
under Canadian GAAP, they may not be comparable with those of companies.
ADDITIONAL INFORMATION
The Company's Management's Discussion & Analysis and financial statements will
also be available at SEDAR (www.sedar.com) following publication of this news
release. Additional information about Colabor Group Inc. May also be found on
SEDAR, as well as on the Company's website at www.colabor.com.
ABOUT COLABOR
Colabor is a wholesaler and distributor of food and non-food products serving
the retail (grocery stores, convenience stores, etc.) and food-service
(cafeterias, restaurants, hotels, restaurant chains, etc.) markets.
CAUTION
This news release may contain forward-looking statements reflecting the opinions
or present expectations of Colabor Group Inc. concerning their performance as
well as their respective business activities and future events. These statements
are subject to a number of risks, uncertainties and assumptions. Actual results
or events may differ.
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