- Comparable sales for the year up 1.6% (total sales up
11.7%)
- Cash flow of $28.4 million or $1.23 per share, dividend-to-cash-flow ratio of
58%
- EBITDA margin of 2.67% in 2012, down from 2.91% in
2011
- Key elements of action plan executed on schedule
BOUCHERVILLE, QC, March 25, 2013 /CNW Telbec/ - Colabor Group Inc.
(TSX: GCL) ("Colabor" or the "Company") today reported results for
the fourth quarter and fiscal year ended December 31, 2012.
"The 2012 year was marked by major
organizational changes and the execution on schedule of key
elements of our action plan, which combined with the recent
acquisition of T. Lauzon, make Colabor a distinctly more efficient
organization", said Claude Gariépy, President and Chief Executive
Officer of Colabor. "These changes were made necessary by
continuing difficult conditions in the foodservice industry in
eastern Canada, which exert
constant pressure on our operating margins. Our proactive approach
and strict management of operations have resulted in solid cash
flow, bringing our ratio of dividend to cash flow gradually closer
to our objective of 50% as soon as possible."
|
|
|
|
Financial highlights |
Quarters
ended |
Years
ended |
(thousands of dollars, except
per-share data) |
Dec. 31,
2012 |
Dec. 31,
2011 |
Dec. 31,
2012 |
Dec. 31,
2011 |
Sales |
464,280 |
431,664 |
1,466,848 |
1,313,251 |
EBITDA |
11,977 |
12,513 |
39,106 |
38,198 |
Charges not related to current
operations |
5,284 |
1,823 |
6,639 |
3,618 |
Net earnings |
(2,005) |
2,002 |
3,209 |
6,828 |
|
Per share - excluding charges
not related to current operations and related income
taxes ($) |
0.11 |
0.12 |
0.32 |
0.34 |
|
Per share - basic ($) |
(0.09) |
0.09 |
0.14 |
0.30 |
Cash flow* |
9,732 |
8,021 |
28,420 |
26,262 |
|
Per share - basic ($) |
0.42 |
0.35 |
1.23 |
1.15 |
Dividend payout ratio |
52% |
94% |
58% |
94% |
Weighted average number of shares
outstanding (basic, in thousands) |
23,088 |
22,779 |
23,079 |
22,928 |
* Cash flow
from operations before changes in operating assets and liabilities
less purchases of property, plant and equipment and interest
paid. |
RESULTS FOR THE YEAR 2012
Consolidated sales were $1,466.8
million, compared to $1,313.3
million for the year ended December 31, 2011. The 11.7% increase was
due essentially to the acquisition of Viandes Décarie Inc. on
January 1, 2012, and to the
contribution of The Skor Food Group Inc., Edfrex Inc. and Les
Pêcheries Norref Québec Inc. over the full year in 2012, versus 239
days, 279 days and 309 days, respectively, in 2011. These
acquisitions together accounted for $128.9
million in additional sales during 2012. Excluding these
acquisitions, comparable sales were up 1.6%.
Earnings before financial expenses, income
taxes, depreciation and amortization ("EBITDA") were $39.1 million, or 2.67% of sales, compared to
$38.2 million, or 2.91% of
sales, in 2011. The lower percentage of sales in 2012 reflects
stiff competition in the foodservice distribution industry in
eastern Canada and the more
aggressive selling approach adopted by the Company in the second
half of the year in order to maintain market share.
The results of the 2012 year take include a
pre-tax charge of $6.6 million not
related to current operations, of which almost $3.0 million involved no disbursement of
funds. As a result, net earnings for the year were $3.2 million or $0.14 per share. By way of comparison, net
earnings in 2011 were $6.8 million,
or $0.30 per share, after taking into
account a pre-tax charge of $3.6
million not related to current operations, arising mainly
from acquisitions made during that year. Excluding charges not
related to current operations and related income taxes, net
earnings per share in 2012 were $0.32, comparable to net earnings of $0.34 per share in 2011.
Cash flow increased 8.2% in 2012 to $28.4 million, or $1.23 per share, from $26.3 million, or $1.15 per share, in 2011. The ratio of dividend
to cash flow per share over the 12 months of 2012, reflecting the
full-year effect of the change in dividend, was 58%, a ratio
consistent with the Company's objective for 2012.
SEGMENTED RESULTS
Sales of the Distribution segment were $1,030.6 million in 2012, compared to
$941.9 million a year earlier. The
9.4% rise is attributable mainly to the contributions over a full
year of the acquisitions made in 2011. Comparable sales were up
2.2%, a performance judged satisfactory given the difficult
conditions prevailing in most of the Company's target markets.
Sales of the Wholesale segment were $436.2 million in 2012, up 17.5% from
$371.4 million in 2011. The increase
was due mainly to the acquisition of Viandes Décarie, offset in
part by the elimination of sales to Colabor divisions, including
acquisitions made in 2010 and 2011. Comparable sales were up
0.2%.
FOURTH-QUARTER RESULTS
Consolidated sales for the 114-day period ended December 31, 2012 were $464.3 million, up from $431.7 million for the 112-day period ended
December 31, 2011. The 7.6% rise
was due essentially to the acquisition of Viandes Décarie.
Excluding this item and adjusting for the difference in number of
days, the Company's comparable sales were up 1.0%. Also on a
comparable basis, Distribution segment sales were up 1.9%, while
Wholesale segment sales were down 1.2%.
As a result of constraining business conditions
and inefficiencies caused by the integration of IT platforms in
Eastern Quebec and New Brunswick, EBITDA for the quarter was
$12.0 million, or 2.58% of sales,
compared to $12.5 million, or 2.90%
of sales, a year earlier. Reflecting pre-tax charges of
$5.3 million not related to current
operations, a net loss of $2.0 million was recorded for the quarter.
These charges include $2.7 million
related to internal restructuring of operations, a $1.2-million writeoff of a customer relationship
following the non-renewal of a supply contract, announced
May 2, 2012, and a $0.5-million loss on disposal of the operations
of the Skor Culinary Concepts Division in December 2012. In the fourth quarter of 2011, net
earnings were $2.0 million after
a pre-tax charge of $1.8 million not
related to current operations. Excluding charges not related to
current operations and related income taxes, net earnings per share
in the fourth quarter of 2012 were $0.11, comparable to net earnings of $0.12 per share a year earlier.
Cash flow in the fourth quarter of 2012 was
$9.7 million, or $0.42 per share, up 21.3% from $8.0 million, or $0.35 per share, in the corresponding quarter of
2011. The ratio of dividend to cash flow per share for the fourth
quarter of 2012 was 52%.
ACTION PLAN: KEY ELEMENTS EXECUTED ON
SCHEDULE
Colabor has actively pursued its action plan to optimize overall
operating efficiency and promote and accelerate the realization of
synergies. During the fourth quarter, the Company completed the
following components of this plan:
- Integration of IT platforms and merger of the administrative
operations and sales forces of the Eastern Quebec and New Brunswick operating units.
- The Cambridge, Ontario,
distribution centre closed December 14,
2012. The customers served by this facility are now supplied
mainly from the Vaughan distribution centre.
- The Skor Culinary Concepts Division was sold on December 24, 2012. As noted above, the
Company recorded a $0.5-million loss
related to this transaction.
- Colabor decided to discontinue most of its sales of
tobacco-related products. These sales were characterized by very
low margin and higher business risk. The Company estimates that
this discontinuation will reduce sales by approximately
$50.0 million on an annual
basis.
"Though the main components of our action plan
are now in place, we remain on the lookout for any additional
measure that will further improve our operating efficiency. We
anticipate that the initiatives taken to date will reduce our
operating costs by approximately $3.5
million on an annual basis," which will offset the loss of a
supply contract in Ontario as of
April 2013," added Mr. Gariépy.
FINANCIAL POSITION
As at December 31, 2012, the
Company's financial position remained sound. The $88.0 million drawn on its authorized bank credit
facility of $150.0 million was down
from $118.0 million at the end of the
third quarter as a result of seasonal variation in working capital.
The resulting ratio of debt as at December 31, 2012 to EBITDA of the previous
12 months was 2.56 : 1.00, below the maximum of
3.25 : 1.00 prescribed by the Company's credit agreement,
and the ratio of total debt to EBITDA was 3.97 : 1.00,
below the required maximum of 4.50 : 1.00. The interest
coverage ratio was 3.97 : 1.00, above the required
minimum of 3.50 : 1.00.
OUTLOOK
"Since we do not expect the business environment to improve
materially in 2013, the synergies resulting from our action plan
will be the main drivers for profitability and cash flow
improvements. We also intend to benefit promptly from the synergies
made possible by the acquisition of T. Lauzon, a transaction that
considerably broadens our offering of "centre-of-the-plate"
products and that will provide synergies to the entire
organization. Finally, Colabor's increased flexibility and dynamism
will enable it to leverage the initiatives it has taken to remain a
major player in the consolidation of its industry, while creating
value for its shareholders," concluded Mr. Gariépy.
CONFERENCE CALL
Colabor will hold a conference call to discuss these results on
Monday, March 25, 2013, beginning at
3 p.m. Eastern Time. Interested
parties can join the call by dialling 647-427-7450 (from
Toronto and overseas) or
1-888-231-8191 (from elsewhere in North
America). If you are unable to participate, you can listen
to a recording by dialling 1-855-859-2056 and entering the code
91106446 on your telephone keypad. The recording will be available
from 7 p.m. Monday, March 25 to
11:59 p.m. Monday, April 1,
2013.
NON-IFRS MEASURES
The information provided in this release includes non-IFRS
performance measures, notably earnings before financial expenses,
income taxes, depreciation and amortization (EBITDA) and cash flow.
Since these concepts are not defined by IFRS, they may not be
comparable to those of other companies.
ADDITIONAL INFORMATION
The Management Discussion and Analysis and the financial
statements of the Company will be available at SEDAR
(www.sedar.com) following publication of this release. Additional
information about Colabor Group Inc. may also be found at SEDAR and
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 market (grocery stores, convenience
stores, etc.) and the foodservice market (cafeterias, restaurants,
hotels, restaurant chains), in Quebec, Ontario and the Atlantic provinces.
FORWARD-LOOKING STATEMENTS
This news release may contain forward-looking statements reflecting
the opinions or current expectations of Colabor Group Inc.
concerning its performance and business operations and future
events. These statements are subject to risks, uncertainties and
assumptions. Actual results or events may differ.
SOURCE COLABOR GROUP INC.