TSX: SPF.UN
CALGARY, May 11 /CNW/ -
Q1 Highlights
Q1 Distributable cash flow reaches $63.7 million, up 5% over first
quarter last year:
- Stable returns from Superior Propane and ERCO Worldwide; and
- Strong performance by Winroc partially offset by soft results from
Superior Energy Management.
Acquisitions by Superior Propane, Winroc and ERCO Worldwide provide
diversified value growth.
May 2005 regular distribution declared of $0.20 per trust unit or $2.40
annualized.
<<
-------------------------------------------------------------------------
Three Months
Ended March 31
(millions of dollars except per trust unit amounts) 2005 2004(1)
-------------------------------------------------------------------------
Financial
Operating distributable cash flow
Superior Propane 44.2 44.3
ERCO Worldwide 22.0 21.8
Winroc 4.4 -
Superior Energy Management 1.6 2.4
-------------------------------------------------------------------------
72.2 68.5
Corporate costs (1.4) (0.6)
Interest (7.1) (7.4)
-------------------------------------------------------------------------
Distributable cash flow (see Note 1 to the
Interim Consolidated Financial Statements) 63.7 60.5
Distributable cash flow per trust unit outstanding $0.83 $0.86
Average number of trust units outstanding (millions) 76.5 70.4
-------------------------------------------------------------------------
Operating
Litres of retail propane sold (millions of litres) 485 514
Propane retail sales margin (cents per litre) 16.5 15.8
Total chemical sales (thousands of metric tonnes "MT") 164 155
Average chemical selling price (dollars per MT) 551 563
Gigajoules ("GJ") of natural gas sold (millions) 8.7 6.5
Natural gas sales margin (cents per GJ) 38.6 56.6
-------------------------------------------------------------------------
-------------------------------------------------------------------------
(1) Restated to give retroactive effect to change in accounting for
natural gas customer acquisition costs (See Note 2(b) to the Interim
Consolidated Financial Statements).
Q1 Earnings Highlights:
- Distributable cash flow per trust unit at $0.83, down 3% over Q1
last year, impacted by 9% growth in average number of trust units
outstanding.
- Increase in trust units due to conversion of debentures which
strengthens the balance sheet.
Major Q1 and Current Events Driving Value Growth:
- Superior Propane acquired Foster Energy, a North American natural
gas liquids wholesale marketer, in February 2005.
- Winroc acquired Leon's, Ontario's largest distributor of
insulation, drywall and associated products in April, 2005.
- ERCO Worldwide to acquire Occidental Chemical's chloralkali
business in Port Edwards, Wisconsin, diversifying its product line
into potassium products.
Forward Looking Statements
--------------------------
Except for the historical and present factual information, certain
statements contained herein are forward-looking. Such forward-looking
statements are not guarantees of future performance and involve a number of
known and unknown risks and uncertainties which may cause the actual results
of the Superior Plus Income Fund (the "Fund") or Superior Plus Inc.
("Superior") in future periods to differ materially from any projections
expressed or implied by such forward-looking statements and therefore should
not be unduly relied upon. Any forward-looking statements are made as of the
date hereof and neither the Fund nor Superior undertakes any obligation to
publicly update or revise such statements to reflect new information,
subsequent events or otherwise.
Distributable Cash Flow
-----------------------
Distributable cash flow of the Fund available for distribution to
Unitholders, is equal to the cash flow from operations before natural gas
customer acquisition costs and changes in working capital, less the
amortization of natural gas customer acquisition costs and maintenance capital
expenditures. Maintenance capital expenditures are equal to capital
expenditures incurred to sustain the ongoing capacity of Superior's operations
and are deducted from the calculation of distributable cash flow. Acquisitions
and other capital expenditures are incurred to expand the capacity of
Superior's operations or to increase its profitability and are not deducted
from the calculation of distributable cash flow. See Note 1 to the Interim
Consolidated Financial Statements for the calculation of distributable cash
flow. Distributable cash flow is the main performance measure used by
management and investors to evaluate the performance of the Fund and its
businesses. Readers are cautioned that distributable cash flow is not a
defined performance measure under Canadian generally accepted accounting
principles ("GAAP"), and that distributable cash flow cannot be assured. The
Fund's calculation of distributable cash flow may differ from similar
calculations used by comparable entities. Operating distributable cash flow is
distributable cash flow before corporate and interest expenses. It is also a
non-GAAP measure and is used by management to assess the performance of the
operating divisions.
Cash Distribution Notice
------------------------
The Fund announced today its regular monthly cash distribution for the
month of May 2005 of $0.20 (20.0 cents) per trust unit, payable on June 15,
2005, to unitholders of record at the close of business on May 31, 2005. The
ex-distribution date will be May 27, 2005. For income tax purposes, the cash
distribution of $0.20 per trust unit is considered to be a dividend of $0.0538
and other income of $0.1462 per trust unit. A cash distribution summary since
inception of the Fund, together with tax information, is posted on our website
at www.superiorplus.com .
Recent Appointments
-------------------
With the increasing growth and success of the Fund, Superior Plus has
recently appointed John D. Gleason, B. Comm., CA, MBA, as Senior Vice-
President, Corporate Development. Mr. Gleason has extensive experience in
merger and acquisition activities and will be responsible for all business
development initiatives to further the objectives and diversification strategy
at Superior Plus.
Management's Discussion and Analysis of 2005 First Quarter Results
------------------------------------------------------------------
The following should be read in conjunction with the Fund's Interim
Consolidated Financial Statements contained herein, along with the Management
Discussion and Analysis and Consolidated Financial Statements for the year
ended December 31, 2004.
First Quarter Results
First quarter distributable cash flow reached $63.7 million, an increase
of $3.2 million (5%) over the prior year period. Contributions from the
acquisition of Winroc in June 2004, were partially offset by lower natural gas
sales margins at Superior Energy Management and increased corporate costs.
Distributable cash flow per trust unit was $0.83 for the quarter, down
$0.03 per trust unit from the prior year period as the increase in
distributable cash flow was more than offset by a 9% increase in the average
number of trust units outstanding. The conversion of convertible debentures
into trust units has contributed to the increase in trust units outstanding
and continues to strengthen the Fund's balance sheet.
Net earnings for the first quarter were $41.5 million, an increase of
$4.5 million (12%) over the prior year period, due to the same reasons that
contributed to the increase in distributable cash flow.
Superior Propane
Superior Propane generated operating distributable cash flow of
$44.2 million, comparable to the prior year period, as improved propane sales
margins and contributions from the Superior Gas Liquids ("SGL") wholesale
marketing business (previously Foster Energy) acquired on February 2, 2005,
were offset by lower propane sales volumes and higher fuel delivery costs.
Condensed operating results for the three months ended March 31, 2005 and 2004
are provided in the following table:
-------------------------------------------------------------------------
(millions of dollars Three Months Ended March 31
except per litre amounts) 2005 2004
-------------------------------------------------------------------------
cents/ cents/
litre litre
Gross Profit ----- -----
Propane sales 80.1 16.5 81.1 15.8
Other services 12.5 2.6 10.0 1.9
-------------------------------------------------------------------------
Total Gross Profit 92.6 19.1 91.1 17.7
Less: Cash operating, admin &
cash tax costs (47.9) (9.9) (46.2) (9.0)
-------------------------------------------------------------------------
Cash generated from operations
before changes in working
capital 44.7 9.2 44.9 8.7
Maintenance capital
expenditures, net (0.5) (0.1) (0.6) (0.1)
-------------------------------------------------------------------------
Operating Distributable Cash Flow 44.2 9.1 44.3 8.6
-------------------------------------------------------------------------
Propane retail volumes sold
(millions of litres) 485 514
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Propane sales gross profit was $80.1 million, down $1.0 million from the
prior year period, as the impact of a 6% decline (29 million litres) in sales
volumes was partially offset by a 4% improvement in sales margins. Heating
sales volumes declined by 5% (12 million litres) and were generally impacted
by customer conservation in response to a 12% increase in average wholesale
propane costs over the prior year period. Heating degree days experienced
across Canada during the first quarter were comparable to the prior year
period and were 1% warmer than the last five year average. Industrial sales
volumes declined by 4% (9 million litres) due to the loss of a few large
volume, low margin customers during 2004. Auto propane sales volumes declined
by 18% (8 million litres) consistent with decline trends of the auto propane
market. Propane sales margins averaged 16.5 cents per litre, reflecting
improved margin performance for all end use applications over the prior year
period. Other sales gross profit reached $12.5 million in the first quarter,
an increase of $2.5 million over the prior year period due to higher premiums
realized from fixed price sales programs and $0.9 million generated from SGL.
Volume and Gross Profit by End Use Market Segment
-------------------------------------------------------------------------
Three Months Ended March 31
---------------------------------------
2005 2004
End Use Gross Gross
Applications: Volume(1) Profit(2) Volume(1) Profit(2)
---------------------------------------
Residential 77 24.7 80 24.8
Commercial 124 23.8 131 24.4
Agricultural 33 3.5 35 3.5
Industrial 214 23.4 223 23.4
Automotive 37 4.7 45 5.0
Other Services - 12.5 - 10.0
---------------------------------------
485 92.6 514 91.1
---------------------------------------
Average Margin(3) 16.5 15.8
-------------------------------------------------------------------------
Three Months Ended March 31
---------------------------------------
2005 2004
Gross Gross
Regions: Volume(1) Profit(2) Volume(1) Profit(2)
---------------------------------------
Atlantic 38 10.4 38 10.3
Quebec 82 15.2 91 15.1
Ontario 118 27.6 123 27.0
Sask/Man 81 9.6 79 8.9
AB/NWT/YK 103 17.8 117 18.6
BC 63 12.0 66 11.2
---------------------------------------
485 92.6 514 91.1
---------------------------------------
16.5 15.8
-------------------------------------------------------------------------
-------------------------------------------------------------------------
(1) Volume of retail propane sold (millions of litres)
(2) Millions of dollars
(3) Average retail propane sales margin (cents per litre)
Cash operating, administrative and capital tax costs of $47.9 million
increased by 4% ($1.7 million) over the prior year period due to higher fuel
delivery and equipment maintenance expenses. Maintenance capital expenses of
$0.5 million were comparable to the prior year period.
SGL, a North American natural gas liquids wholesale marketing business,
was acquired on February 2, 2005, for consideration of $25.6 million. This
acquisition enhances Superior Propane's profitability, strengthens its supply
and logistics capabilities, and increases its exposure to the retail propane
market in the United States. The acquisition cost is considered to be growth
capital in nature and has been included in "other capital expenditures" on the
Interim Consolidated Statement of Cash Flows and is excluded from the
calculation of distributable cash flow.
ERCO Worldwide
ERCO Worldwide generated operating distributable cash flow of
$22.0 million, comparable to the prior year period, as the impact of higher
sodium chlorate sales volumes and prices was offset by increased electrical
costs. Condensed operating results for the three months ended March 31, 2005
and 2004 are provided below:
-------------------------------------------------------------------------
(millions of dollars Three Months Ended March 31
except per metric tonne amounts) 2005 2004
-------------------------------------------------------------------------
Revenue $ per MT $ per MT
-------- --------
Chemicals 90.4 551 87.3 563
Technology 5.9 36 10.0 64
Cost of Sales
Chemicals (47.4) (289) (44.0) (283)
Technology (2.8) (17) (6.7) (43)
-------------------------------------------------------------------------
Gross Profit 46.1 281 46.6 301
Less: Cash operating, admin. & cash
tax costs (23.2) (141) (24.2) (156)
-------------------------------------------------------------------------
Cash generated from operations
before changes in working capital 22.9 140 22.4 145
Maintenance capital expenditures (0.9) (6) (0.6) (4)
-------------------------------------------------------------------------
Operating Distributable Cash Flow 22.0 134 21.8 141
-------------------------------------------------------------------------
Chemical volumes sold (thousands
of metric tonnes) 164 155
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Chemical sales gross profit of $43.0 million was comparable to the prior
year period. Average chemical revenue per tonne declined by 2% to $551 per
tonne as a result of exiting the calcium hypochlorite business in the third
quarter of 2004 in favour of production and sale of lower priced chloralkali
products. Chemical cost of sales increased by 2% to $289 per tonne as the
impact of increased electricity rates was partially offset by the cessation of
calcium hypochlorite production. Technology gross profit of $3.1 million was
comparable to the prior year period.
Cash operating, administrative and tax costs were $23.2 million in the
first quarter, down 4% ($1.0 million) from the prior year period due mainly to
lower overhead costs associated with exiting the calcium hypochlorite
business. Maintenance capital expenditures of $0.9 million were comparable to
the prior year period.
Growth capital expenditures on the five year cell replacement program
were $1.0 million during the first quarter ($13.2 million cumulatively). The
project is approximately 50% complete and is anticipated to be completed over
the next three years. Improvements in cell design are yielding an approximate
7% increase in electrical efficiency and have enabled ERCO Worldwide to
qualify for a $5 million grant under BC Hydro's "Power Smart" program which
will partially fund planned expenditures at its North Vancouver plant.
Procurement and site permitting work continued at the $65 million sodium
chlorate plant being constructed in Chile. The plant is scheduled to start up
in mid-2006 to provide CMPC Celulosa S.A. with a long term sodium chlorate
supply to its three pulp mills. Expenditures of $2.3 million were incurred
during the quarter ($4.0 million cumulatively). Remaining construction costs
are anticipated to be funded from existing term bank credit facilities.
On April 12, 2005, ERCO Worldwide announced that it had entered into an
agreement with an affiliate of Occidental Chemical Corporation, to acquire its
chloralkali business located at Port Edwards, Wisconsin at a cost of
US$29.5 million on a debt free basis, subject to certain adjustments. The
transaction is subject to certain closing conditions, including United States
Federal Trade Commission approval, which is expected to be received by the end
of the second quarter. The Port Edwards facility is the second largest
producer of potassium products in North America and has a strong competitive
position and track record of stable cash flow. The acquisition is expected to
provide ERCO Worldwide with the opportunity to profitably leverage its
chloralkali production and sales capability and diversify its product line
into potassium products which are used in making agricultural chemicals,
soaps, detergents, de-icing chemicals, and as an electrolyte in alkaline
batteries.
Winroc
Winroc generated operating distributable cash flow of $4.4 million in the
first quarter. Condensed operating results for the three months ended
March 31, 2005 are provided below. For comparison purposes only, the 2004
prior year period results are also provided below and are not included in the
Interim Consolidated Financial Statements, as the business was acquired on
June 11, 2004.
-------------------------------------------------------------------------
Three Months Ended
(millions of dollars) 2005 2004
-------------------------------------------------------------------------
Distribution sales gross profit 20.9 17.9
Direct sales gross profit 0.8 0.8
-------------------------------------------------------------------------
Gross Profit 21.7 18.7
Less: Cash operating, administration & cash tax costs (16.0) (12.7)
-------------------------------------------------------------------------
Cash generated from operations before changes in
working capital 5.7 6.0
Capital expenditures, net (1.3) (2.1)
-------------------------------------------------------------------------
Operating distributable cash flow 4.4 3.9
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Operating distributable cash flow increased by 13% ($0.5 million) over
the prior year period. Gross profit reached $21.7 million in the first
quarter, an increase of 16% ($3.0 million) over the prior year period. Gross
profit in the prior year period included a positive adjustment of $2.5 million
related to 2003 purchase rebates. Higher sales volumes contributed to improved
gross profit performance as drywall sales, which are an indicator of overall
sales volumes, increased by 6%. Increased sales volumes were driven by the
year over year increase in the number of distribution branches from 29 to 32
and the relocation of two branches to larger locations. Robust new home
construction activity in the United States also contributed to the growth in
sales. Improved sales margins contributed the remainder of the increase in
gross profit. Cash operating, administration and tax costs were $16.0 million
in the quarter, an increase of 26% ($3.3 million) over the prior year period,
due to increased overhead costs associated with the growth in Winroc's
distribution network, higher variable delivery costs associated with the
growth in sales volumes, and increased fuel costs. Maintenance capital
expenditures were $1.3 million in the first quarter and were consistent with
anticipated ongoing expenditure requirements. Expenditures in the prior year
period of $2.1 million were increased to support pending distribution sales
volume growth.
On April 11, 2005, Winroc announced the acquisition of Leon's Insulation
Inc. and associated entities ("Leon's"), for $48.5 million on a debt free
basis, subject to certain adjustments. Leon's was founded in 1956 and is
Ontario's largest distributor of drywall, insulation and associated products.
Its two distribution locations servicing the Greater Toronto Area, combined
with the three Interior Building Supplies ("IBS") distribution locations in
South Western Ontario acquired in December 2004, provide Winroc with a strong
market presence in Ontario, which is the largest regional market in Canada.
Superior Energy Management ("SEM")
Effective January 1, 2005, SEM began to capitalize customer acquisition
costs and amortize capitalized costs on a straight line basis over the term of
the customer contract. Previously, customer acquisition costs were expensed at
the time natural gas deliveries commenced under new contracts. This change in
accounting policy results in improved matching of up-front contract
acquisition costs with the economic benefits derived from gas sales over the
term of the customer contract and has been retroactively applied. Capitalized
costs are treated as "growth capital" and the amortization of capitalized
costs are deducted from distributable cash flow. This change in accounting
increased SEM's operating distributable cash flow for the three month periods
ended March 31, 2005 and 2004 by $0.9 million and $0.4 million respectively as
detailed below (See Note 2(b) to the Interim Consolidated Financial
Statements):
-------------------------------------------------------------------------
Three Months
Ended March 31
2005 2004
-------------------------------------------------------------------------
Operating distributable cash flow, previous
accounting policy $ 0.7 $ 2.0
Capitalized customer acquisition costs 1.4 0.6
Amortization of capitalized costs (0.5) (0.2)
-------------------------------------------------------------------------
Operating distributable cash flow, new accounting
policy $ 1.6 $ 2.4
-------------------------------------------------------------------------
-------------------------------------------------------------------------
After giving retroactive effect to the change in accounting for customer
acquisition costs, SEM's condensed operating results for the three months
ended March 31, 2005 and 2004 are provided below:
-------------------------------------------------------------------------
(millions of dollars Three Months Ended March 31
except per GJ amounts) 2005 2004
-------------------------------------------------------------------------
cents cents
per GJ per GJ
------ ------
Gross profit 3.4 38.6 3.7 56.6
Operating, & admin. costs (including
amortization of customer acquisition
costs) (1.8) (20.7) (1.3) (20.0)
-------------------------------------------------------------------------
Operating Distributable Cash Flow 1.6 17.9 2.4 36.6
-------------------------------------------------------------------------
Gigajoules of natural gas sold
(millions) 8.7 6.5
-------------------------------------------------------------------------
-------------------------------------------------------------------------
SEM generated operating distributable cash flow of $1.6 million in the
first quarter, a decrease of $0.8 million from the prior year period. Sales
margins in the first quarter averaged 38.6 cents per GJ, down 32% from the
prior year period as high natural gas prices experienced since the fall of
2004, have compressed large volume, commercial/industrial fixed price margins
and encouraged consumers in this segment to purchase their gas requirements on
a floating rate basis. Residential and small commercial customer growth
continued in the first quarter and contributed to the 34% year over year
growth in sales volumes at attractive margins. Operating and administration
costs increased by $0.5 million over the prior year period due to increased
amortization of customer contract acquisition costs and higher overhead costs
associated with increased sales activity levels. The majority of fixed prices
sales contracts entered into during the quarter were for a five year term. The
average remaining term of SEM's sales contracts at March 31, 2005 was
32 months.
Corporate
Corporate costs were $1.4 million in the first quarter, an increase of
$0.8 million from the prior year period. Costs in the prior year period were
reduced by various expense adjustments. Cash taxes were limited to federal and
provincial capital taxes of $0.9 million, similar to the prior year period, as
income taxes were fully deferred. Capital taxes have been allocated to
Superior's four business segments based on net taxable capital deployed.
Interest expense on revolving term bank credits and term loans was
$5.2 million, an increase of $1.8 million over the prior year period due to
increased borrowing levels used to finance growth capital expenditures.
Interest on the Series 1 and Series 2, 8% Debentures totaled $1.9 million,
down $2.1 million from the prior year period, due to the conversion of
$111.7 million of Debentures into 5.7 million trust units since March 31,
2004.
Liquidity and Capital Resources
Superior's net working capital requirements decreased in the first
quarter by $18.5 million from December 31, 2004 levels, as Superior Propane
seasonally added $30.0 million of accounts receivable to its off-balance sheet
trade accounts receivable sales program and physical propane inventory storage
levels declined as the heating season came to an end. Working capital
requirements for Superior Propane peak seasonally during the first quarter and
then decline through the second and third quarters before building again in
the fall, consistent with the seasonal demand profile of its heating end use
customers. Superior's revolving trade accounts receivable sales program is
used to finance a portion of its working capital requirements. Proceeds from
the sale of receivables were $130.0 million at March 31, 2005 (March 31, 2004
- $125.0 million), compared to $100.0 million at December 31, 2004. As at
March 31, 2005, Superior had undrawn revolving term bank lines of
$150.8 million available to finance Winroc's $48.5 million acquisition of
Leon's and ERCO Worldwide's US$29.5 million acquisition of the Port Edwards
chloralkali facility that were announced subsequent to March 31, 2005.
Superior plans to arrange during 2005, more permanent financing of its recent
growth capital expenditures.
Superior's revolving term bank credits and term loans were $413.0 million
at March 31, 2005, down $33.2 million from December 31, 2004 of which
$30.0 million was financed from the increase in Superior's off-balance sheet
accounts receivable sales program. The remaining decrease of $3.2 million was
funded from cash flows from operations after payment of distributions to
unitholders and financing growth capital expenditures.
Convertible Debentures of the Fund outstanding at March 31, 2005 were
$98.1 million, down $18.0 million from December 31, 2004, due to the
conversion of Series 1 and Series 2 Debentures into 0.9 million trust units
during the first quarter.
Superior continues to enjoy a strong balance sheet as senior debt
(including off-balance sheet accounts receivable sales program amounts) at
March 31, 2005 was 2.2 times earnings before interest, taxes and amortization
for the last 12 month period (including acquisitions on a proforma basis),
calculated in accordance with its debt covenants (2.2 times at December 31,
2004). Including the Fund's Convertible Debentures, Superior's total leverage
ratios improved from 2.7 times at December 31, 2004 to 2.6 times at March 31,
2005.
Unitholders' Capital
The weighted average number of trust units outstanding during the first
quarter was 76.5 million trust units, an increase of 9% (6.1 million trust
units) over the prior year period due to the Debenture conversions described
previously and the issue of 0.4 million trust units resulting from the
exercise of trust unit warrants during 2004.
As at March 31, 2005 and December 31, 2004, the following trust units,
and securities convertible into trust units, were outstanding:
-------------------------------------------------------------------------
March 31, 2005 December 31, 2004
Convertible Trust Convertible Trust
(millions) Securities Units Securities Units
-------------------------------------------------------------------------
Series 1, 8% Debentures
(convertible at $16 per
trust unit) $ 11.6 0.7 $ 13.9 0.9
Series 2, 8% Debentures
(convertible at $20 per
trust unit) $ 86.9 4.4 $ 102.6 5.1
Warrants (exercisable (at)
$20 per trust unit) 3.1 3.1 3.1 3.1
Trust units outstanding 76.8 75.9
-------------------------------------------------------------------------
Trust units outstanding, and
issuable upon conversion of
Debenture and Warrant securities 85.0 85.0
-------------------------------------------------------------------------
-------------------------------------------------------------------------
The trust unit warrants are exercisable until May 2008 and represent a
potential $62.0 million source of future equity capital. In addition, as at
March 31, 2005, there were 918,000 trust unit options outstanding
(December 31, 2004 - 960,000 trust units) with a weighted average exercise
price of $21.01 per trust unit. The number of trust units issued upon exercise
of the trust unit options is equal to the growth in the value of the options
at the time the options are exercised, (represented by the market price less
the exercise price) times the number of options exercised, divided by the
current market price of the trust units.
Foreign Currency Hedging
SEM contracts a portion of its fixed price natural gas purchases in US
dollars and enters into forward US dollar purchase contracts to create an
effective Canadian dollar fixed price purchase cost. ERCO Worldwide enters
into US dollar forward sales contracts on an ongoing basis to mitigate the
impact of foreign exchange fluctuations on sales margins on production from
its Canadian plants that is sold in US dollars. Interest expense on Superior's
US dollar denominated debt is also used to mitigate the impact of foreign
exchange fluctuations on its US dollar distributable cash flow. Superior's US
dollar denominated debt acts as a balance sheet hedge against its US dollar
denominated net assets. Superior hedges its net US dollar future cash flows
with external third party contracts after first matching internally SEM's
forward US dollar purchase requirements against ERCO Worldwide's US dollar
revenues where possible.
As at March 31, 2005, SEM had hedged approximately 100% of its US dollar
natural gas purchase obligations and ERCO Worldwide had hedged 86%, 86%, 38%,
and 11% of its estimated US dollar revenue stream for 2005, 2006, 2007 and
2008 respectively, as shown in the table below. (See Note 7(i) to the Interim
Consolidated Financial Statements).
-------------------------------------------------------------------------
(US$ millions) 2005 2006 2007 2008 2009 2010 Total
-------------------------------------------------------------------------
SEM - US $ forward
purchases 98.4 97.9 63.3 54.5 45.9 3.1 363.4
ERCO - US $ forward
sales (71.7)(103.1) (45.0) (12.6) - - (232.4)
-------------------------------------------------------------------------
Net US $ forward
purchases/(sales) 26.7 (5.2) 18.3 41.9 45.9 3.1 130.7
-------------------------------------------------------------------------
SEM - Average US $
forward purchase rate 1.30 1.30 1.26 1.27 1.27 1.19 1.28
ERCO - Average US $
forward sales rate 1.37 1.29 1.25 1.23 - - 1.30
-------------------------------------------------------------------------
Net average external
US$/Cdn$ exchange rate 1.33 1.29 1.25 1.26 1.27 1.19 1.29
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Quarterly Financial and Operating Information(1)
-------------------------------------------------------------------------
(millions of
dollars except 2005 2004 Quarters 2003 Quarters
per trust unit Quarter Second
amounts) First Fourth Third Second First Fourth Third (3)
-------------------------------------------------------------------------
Propane sales
volumes (millions
of litres) 485 438 290 302 514 467 298 318
Chemical sales
volumes
(thousands of
metric tonnes) 164 170 163 161 155 165 138 132
Natural gas sales
volumes (millions
of GJs) 9 7 7 7 7 6 6 5
Gross profit 163.8 155.2 130.2 116.0 141.4 137.5 95.0 100.0
Net earnings
(loss) 41.5 33.5 20.8 21.1 37.0 27.1 11.6 (88.0)
Per basic trust
unit $0.54 $0.45 $0.28 $0.29 $0.53 $0.39 $0.18 $(1.59)
Per diluted trust
unit $0.52 $0.44 $0.28 $0.29 $0.49 $0.40 $0.18 $(1.59)
Distributable
cash flow 63.7 55.8 36.7 31.4 60.5 49.6 17.9 21.4
Per basic trust
unit $0.83 $0.73 $0.50 $0.44 $0.86 $0.72 $0.27 $0.39
Per diluted trust
unit $0.79 $0.69 $0.48 $0.42 $0.77 $0.68 $0.27 $0.38
Net working
capital(2) 54.9 97.9 62.9 36.2 (3.8) 36.9 32.5 26.4
-------------------------------------------------------------------------
-------------------------------------------------------------------------
(1) Restated to give retroactive effect to change in accounting for
natural gas customer acquisition costs (See Note 2(b) to the Interim
Consolidated Financial Statements).
(2) Net working capital reflects amounts as at the quarter end and is
comprised of accounts receivable and inventories, less accounts
payable and accrued liabilities.
(3) Second quarter 2003 results include a one time expense of
$141.3 million ($92.5 million after tax) related to the
internalization of management.
Outlook
In 2005, we anticipate distributable cash flow per trust unit to increase
modestly from the $2.51 per trust unit generated in 2004. Increased
distributable cash flow is anticipated from a full year's contribution from
the acquisition of Winroc, combined with partial year contributions from
Superior Propane's acquisition of the Superior Gas Liquids wholesale marketing
business, Winroc's acquisitions of IBS and Leon's, and ERCO Worldwide's
pending acquisition of the Port Edwards chloralkali facility. Increased
distributable cash flow is expected to be partially offset by the dilutive
impact of continued Debenture conversions and warrants exercised into trust
units.
Over the longer term, the Fund plans to continue its disciplined
diversification strategy by taking advantage of profitable growth
opportunities within each division and to acquire other businesses that have
risk profiles appropriate for an income fund structure. Acquisitions must be
accretive to unitholder distributions and be financed in a manner that
maintains Superior's existing financial strength.
-------------------------------------------------------------------------
Conference Call: Superior Plus will be holding a conference call and
webcast for investors, analysts, brokers and media representatives to
discuss the 2005 First Quarter Results on Thursday, May 12, 2005 at
9:00 a.m. (EST). To participate in the call, dial 1-800-814-4853. A
recording of the call will be available for replay until midnight,
May 19, 2005 by dialing 1-877-289-8525 and entering the pass code
21121449 followed by the No. key.
Internet users can listen to the call live, or as an archived call, which
can be accessed through the "Events and Presentations" section of
Superior's website at: www.superiorplus.com
-------------------------------------------------------------------------
SUPERIOR PLUS INCOME FUND
Consolidated Balance Sheets
-------------------------------------------------------------------------
March 31 December 31
(unaudited, millions of dollars) 2005 2004
-------------------------------------------------------------------------
(Restated -
Assets Note 2(b))
Current Assets
Accounts receivable (Note 4) 147.9 165.0
Inventories 80.2 93.6
-------------------------------------------------------------------------
228.1 258.6
Property, plant and equipment 729.6 741.0
Intangible assets 51.2 49.9
Goodwill 525.5 502.6
-------------------------------------------------------------------------
1,534.4 1,552.1
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Liabilities and Unitholders' Equity
Current Liabilities
Accounts payable and accrued liabilities 173.2 160.7
Distributions payable to Unitholders and
Debentureholders 18.6 17.0
-------------------------------------------------------------------------
191.8 177.7
Revolving term bank credits and term loans 413.0 446.2
Convertible unsecured subordinated
debentures (Note 5) 98.1 116.0
Future employee benefits 18.6 18.6
Future income tax liability 127.2 121.7
-------------------------------------------------------------------------
Total Liabilities 848.7 880.2
-------------------------------------------------------------------------
Unitholders' Equity
Unitholders' capital (Note 6) 1,139.9 1,122.0
Retained earnings from operations 303.8 262.3
Accumulated distributions on trust unit equity (757.0) (711.1)
-------------------------------------------------------------------------
Deficit (453.2) (448.8)
-------------------------------------------------------------------------
Currency translation account (1.0) (1.3)
-------------------------------------------------------------------------
Total Unitholders' Equity 685.7 671.9
-------------------------------------------------------------------------
1,534.4 1,552.1
-------------------------------------------------------------------------
-------------------------------------------------------------------------
(See Notes to the Interim Consolidated Financial Statements)
SUPERIOR PLUS INCOME FUND
Consolidated Statements of Net Earnings and Deficit
-------------------------------------------------------------------------
Three Months
(unaudited, in millions of dollars Ended March 31
except per trust unit amounts) 2005 2004
-------------------------------------------------------------------------
(Restated -
Note 2(b))
Revenues 512.1 375.6
Cost of products sold 348.3 234.2
-------------------------------------------------------------------------
Gross profit 163.8 141.4
-------------------------------------------------------------------------
Expenses
Operating and administrative 89.1 72.4
Amortization of property, plant and equipment 18.0 17.9
Amortization of intangible assets 1.3 1.4
Interest on revolving term bank credits and
term loans 5.2 3.4
Interest on convertible unsecured subordinated
debentures 1.9 4.0
Amortization of convertible debenture issue costs 0.3 0.4
Income tax expense of Superior 6.5 4.9
-------------------------------------------------------------------------
122.3 104.4
-------------------------------------------------------------------------
Net Earnings 41.5 37.0
-------------------------------------------------------------------------
Deficit, Beginning of Period (448.8) (382.1)
Net earnings 41.5 37.0
Distributions to Unitholders (45.9) (50.8)
-------------------------------------------------------------------------
Deficit, End of Period (453.2) (395.9)
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Net earnings per trust unit, basic (Note 6) $0.54 $0.53
Net earnings per trust unit, diluted (Note 6) $0.52 $0.49
-------------------------------------------------------------------------
-------------------------------------------------------------------------
(See Notes to the Interim Consolidated Financial Statements)
SUPERIOR PLUS INCOME FUND
Consolidated Statements of Cash Flows
-------------------------------------------------------------------------
Three Months
Ended March 31
(unaudited, in millions of dollars) 2005 2004
-------------------------------------------------------------------------
(Restated -
Note 2(b))
Operating Activities
Net earnings 41.5 37.0
Items not affecting cash:
Amortization of property, plant and equipment,
intangible assets and convertible debenture
issue costs 19.6 19.7
Amortization of natural gas customer acquisition
costs (Note 2(b)) 0.5 0.2
Trust unit incentive plan compensation expense
(recovery) (0.3) 0.9
Future income tax expense 5.6 4.1
-------------------------------------------------------------------------
Cash generated from operations before natural gas
customer acquisition costs and changes in working
capital 66.9 61.9
Natural gas customer acquisition costs capitalized
(Note 2(b)) (1.4) (0.6)
Decrease in non-cash operating working capital items 18.5 33.1
-------------------------------------------------------------------------
Cash flows from operating activities 84.0 94.4
-------------------------------------------------------------------------
Investing Activities
Maintenance capital expenditures, net (2.7) (1.2)
Other capital expenditures, net (3.3) (0.9)
Acquisition of Foster Energy (Note 3) (14.7) -
-------------------------------------------------------------------------
Cash flows from investing activities (20.7) (2.1)
-------------------------------------------------------------------------
Financing Activities
Revolving term bank credits and term loans (47.4) (67.6)
Net proceeds from sale of accounts receivable 30.0 25.0
Distributions to Unitholders (45.9) (50.8)
Proceeds from exercise of trust unit warrants - 1.1
-------------------------------------------------------------------------
Cash flows from financing activities (63.3) (92.3)
-------------------------------------------------------------------------
Change in Cash - -
-------------------------------------------------------------------------
Cash at Beginning and End of Period - -
-------------------------------------------------------------------------
-------------------------------------------------------------------------
(See Notes to the Interim Consolidated Financial Statements)
Notes to Interim Consolidated Financial Statements
(tabular amounts in Canadian millions of dollars, unless noted otherwise,
except per trust unit amounts)
1. Distributable Cash Flows
Three Months Ended March 31 2005 2004
-------------------------------------------------------------------------
(Note 2(b))
Cash generated from operations before natural gas
customer acquisition costs and changes in working
capital 66.9 61.9
Less: Amortization of natural gas customer
acquisition costs (Note 2(b)) (0.5) (0.2)
Maintenance capital expenditures, net (2.7) (1.2)
-------------------------------------------------------------------------
Distributable Cash Flow 63.7 60.5
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Distributable cash flow per trust unit,
basic (Note 6) $ 0.83 $ 0.86
Distributable cash flow per trust unit,
diluted (Note 6) $ 0.79 $ 0.77
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Distributable cash flow of the Superior Plus Income Fund (the "Fund")
available for distribution to its unitholders ("Unitholders"), is equal
to consolidated cash flow from operations before natural gas customer
acquisition costs and changes in working capital, less amortization of
natural gas customer acquisition costs and maintenance capital
expenditures. Maintenance capital expenditures are equal to capital
expenditures incurred to sustain the ongoing operating capacity of
Superior Plus Inc. ("Superior") and are deducted from the calculation of
distributable cash flow. Acquisitions and other capital expenditures are
incurred to expand the capacity of Superior's operations or to increase
its profitability and are not deducted from the calculation of
distributable cash flow. Distributable cash flow is the main performance
measure used by management and investors to evaluate Fund and business
segment performance. Readers are cautioned that distributable cash flow
is not a defined performance measure under Canadian generally accepted
accounting principles ("GAAP"), and that distributable cash flow cannot
be assured. The Fund targets to pay out substantially all of its ongoing
sustainable distributable cash flow through regular monthly
distributions. The Fund's calculation of distributable cash flow may
differ from similar calculations used by comparable entities.
2. Summary of Significant Accounting Policies
(a) Basis of Presentation
The accompanying unaudited Interim Consolidated Financial Statements have
been prepared according to Canadian GAAP applied on a consistent basis
and include the accounts of the Fund and its wholly owned subsidiary,
Superior Plus Inc. ("Superior"), and Superior's subsidiaries. Certain
information and disclosures included in annual financial statement notes
have been condensed and updated. The accounting principles applied are
consistent with those as set out in the Fund's annual financial
statements for the year ended December 31, 2004, except for the change in
accounting policy as described below. These financial statements and
notes thereto should be read in conjunction with the Fund's financial
statements for the year ended December 31, 2004. All significant
transactions and balances (including the Shareholder Notes) between the
Fund, Superior and Superior's subsidiaries have been eliminated on
consolidation.
In the opinion of Management, the accompanying unaudited Interim
Consolidated Financial Statements include all adjustments (of a normal
recurring nature) necessary to present fairly the consolidated financial
position of the Fund as at March 31, 2005 and December 31, 2004 and the
consolidated results of its operations for the three month periods ended
March 31, 2005 and 2004.
(b) Change in Accounting Policy
Effective January 1, 2005, the Fund retroactively adopted a new
accounting policy for Superior Energy Management's natural gas customer
acquisition costs. Previously customer acquisition costs were expensed at
the time natural gas deliveries commenced under new contracts. Under the
new policy, customer acquisition costs are capitalized and amortized on a
straight-line basis over the term of the customer contract. This new
policy provides improved matching of up-front contract acquisition costs
with the economic benefits derived from gas sales over the term of the
customer contract. The cumulative effect of the change in policy on the
balance sheet as at December 31, 2004 was to increase intangible assets
by $3.1 million, increase the future income tax liability by $1.1 million
and increase retained earnings from operations by $2.0 million. For the
period ended March 31, 2004, the effect of the new policy on the
statement of net earnings was to reduce operating and administrative
costs by $0.4 million and increase future income tax expense by
$0.1 million, resulting in an increase in net earnings of $0.3 million.
Distributable cash flow was increased by $0.4 million for the same
period. For the period ended March 31, 2004 basic net earnings per trust
unit, increased $0.01 to $0.53 per trust unit, there was no impact on
diluted earnings per trust unit. Basic and diluted distributable cash
flow per trust unit increased $0.01 to $0.86 and $0.77 per trust unit
respectively, for the same period.
(c) Customer Acquisition Costs
Superior Energy Management
Costs incurred to acquire natural gas customer contracts are capitalized
and recorded as intangible assets at the time the cost is incurred. The
costs are recognized into net earnings as an operating and administrative
expense and deducted from distributable cash flow over the term of the
underlying contracts.
(d) Revenue Recognition
Superior Propane
Revenues from sales are generally recognized at the time of delivery, or
when related services are performed. Amounts billed to customers for
shipping and handling are classified as revenues, with the related
shipping and handling costs included in cost of goods sold. Approximately
50% of Superior Propane's revenues are heating related and 50% are
related to economic activities. Propane sales typically peak in the first
quarter when approximately one-third of annual propane sales volumes and
gross profits are generated due to the demand from heating end use
customers. They then decline through the second and third quarters rising
seasonally again in the fourth quarter with heating demand. Similarly,
net working capital levels are typically at seasonally high levels at the
end of the first quarter, and normally decline to seasonally low levels
in the second and third quarters. Net working capital levels are also
significantly influenced by wholesale propane prices.
ERCO Worldwide
Revenues from chemical sales are recognized as products are shipped.
Revenues associated with the construction of chlorine dioxide generators
are recognized using the percentage of completion method based on cost
incurred compared to total estimated cost.
Winroc
Revenue is recognized when the products are delivered to the customer.
Revenue is stated net of discounts and rebates granted. Purchase rebates
are recognized as a reduction of cost of goods sold when the related
performance is completed and the inventory is sold. Vendor rebates that
are contingent upon Winroc completing a specified level of purchases are
recognized as a reduction of cost of goods sold based on a systematic and
rational allocation of the cash consideration to each of the underlying
transactions that results in progress toward earning that rebate or
refund, assuming that the rebate can be reasonably estimated and it is
probable that the specified target will be obtained. Otherwise, the
rebate is recognized as the milestone is achieved and the inventory is
sold.
Winroc's sales typically peak during the second and third quarters with
the seasonal increase in building and remodeling activities. They then
decline through the fourth and first quarters. Similarly, net working
capital levels are typically at seasonally high levels during the second
and third quarter, and normally decline to seasonally low levels in the
fourth and first quarters.
Superior Energy Management
Revenues are recognized as gas is delivered to local natural gas
distribution companies. Costs associated with balancing the amount of gas
used by SEM's customers with the volumes delivered by SEM to the local
distribution companies are recognized as period costs.
3. Acquisition of Foster Energy
On February 2, 2005, Superior Propane acquired the business of Foster
Energy Corporation, a wholesale marketer of natural gas liquids, for
consideration of $25.6 million of which $14.6 million was paid in cash.
Foster Energy is now being operated under the trade name Superior Gas
Liquids. Deferred consideration of $12.3 million is payable over a five
year period and has been recorded at its fair market value of
$10.9 million, calculated by discounting future cash payments.
Assets acquired were recorded at estimated fair values on the date of
acquisition. Superior consolidated the assets and liabilities from the
acquisition and included the net earnings as of the closing date. The
allocation of the purchase price may be adjusted if additional
information regarding the fair values of assets and liabilities becomes
available. The fair value of the consideration paid by Superior has been
allocated as follows:
-------------------------------------------------------------------------
Cash, net of $2.3 in cash acquired 14.6
Deferred consideration(1) 10.9
Transaction costs 0.1
-------------------------------------------------------------------------
25.6
-------------------------------------------------------------------------
Goodwill 22.7
Non-compete agreements 1.3
Net working capital 1.6
-------------------------------------------------------------------------
25.6
-------------------------------------------------------------------------
-------------------------------------------------------------------------
(1) Deferred consideration is an unsecured obligation and has been
included in revolving term bank credits and term loans on the Interim
Consolidated Balance Sheets.
4. Accounts Receivable
Superior sells, with limited recourse, certain trade accounts receivable
on a revolving basis to an entity sponsored by a Canadian chartered bank,
and has accounted for the sale in accordance with the CICA guidelines
relating to transfers of receivables. The accounts receivable are sold at
a discount to face value based on prevailing money market rates. Superior
has retained the servicing responsibility for the accounts receivable
sold and has therefore recognized a servicing liability. The level of
accounts receivable sold under the program fluctuates seasonally with the
level of accounts receivable. At March 31, 2005, net proceeds of
$130.0 million (December 31, 2004 - $100.0 million) had been received.
5. Convertible Unsecured Subordinated Debentures
The Fund has issued two series of Debentures denoted as Series 1 and
Series 2 as follows:
-------------------------------------------------------------------------
Total
Unamortized Carrying
Series 1 Series 2 Discount Value
-------------------------------------------------------------------------
Maturity date July 31, November 1,
2007 2008
Fixed distribution rate 8.0% 8.0%
Conversion price per trust unit $ 16.00 $ 20.00
-------------------------------------------------------------------------
Debentures outstanding
December 31, 2004 13.9 102.6 (0.5) 116.0
Conversion of debentures and
amortization of discount (2.3) (15.7) 0.1 (17.9)
-------------------------------------------------------------------------
Debentures outstanding
March 31, 2005 11.6 86.9 (0.4) 98.1
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Quoted market value
March 31, 2005 20.3 130.2
-------------------------------------------------------------------------
-------------------------------------------------------------------------
The Debentures may be converted into trust units at the option of the
holder at any time prior to maturity and may be redeemed by the Fund in
certain circumstances. The Fund may elect to pay interest and principal
upon maturity or redemption by issuing trust units to a trustee in the
case of interest payments, and to the Debentureholders in the case of
payment of principal. The number of any trust units issued will be
determined based on market prices for the trust units at the time of
issuance.
6. Unitholders' Equity
Authorized
The Fund may issue an unlimited number of trust units. Each trust unit
represents an equal undivided beneficial interest in any distributions
from the Fund and in the net assets in the event of termination or
wind-up of the Fund. All trust units are of the same class with equal
rights and privileges.
Trust Units Equity
-------------------------------------------------------------------------
Unitholders' equity, December 31, 2004 (Note 2(b)) 75.9 671.9
Conversion of Debentures - (Series 1 - $2.3 million
converted (at) $16 per trust unit and Series 2 -
$15.7 million converted (at) $20 per trust unit) 0.9 18.2
Trust unit incentive plan compensation expense - (0.3)
Currency translation adjustment - 0.3
Net earnings - 41.5
Distributions to unitholders - (45.9)
-------------------------------------------------------------------------
Unitholders' equity, March 31, 2005 76.8 685.7
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Unitholders' equity and deficit at March 31, 2005 and December 31, 2004
consists of the following components:
2005 2004
-------------------------------------------------------------------------
Unitholders' equity
Trust unit equity 1,132.8 1,114.5
Conversion feature on warrants and
convertible debentures 1.5 1.6
Contributed surplus 5.6 5.9
-------------------------------------------------------------------------
1,139.9 1,122.0
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Deficit (Note 2(b))
Retained earnings from operations 303.8 262.3
Accumulated distributions on trust unit equity (757.0) (711.1)
-------------------------------------------------------------------------
(453.2) (448.8)
-------------------------------------------------------------------------
-------------------------------------------------------------------------
The Fund's deficit is comprised of net earnings (loss), less
distributions paid to unitholders and prior period adjustments.
At March 31, 2005, the Fund had 3.1 million trust unit warrants
outstanding (December 31, 2004 - 3.1 million), exerciseable at $20 per
trust unit warrant. The trust unit warrants expire May 8, 2008.
The weighted average number of trust units used in the calculation of
basic net earnings per trust unit and distributable cash flow per trust
unit was 76.5 million trust units for the quarter (70.4 million for the
comparative period in 2004). The number of trust units used in the
calculation of diluted net earnings per trust unit and distributable cash
flow per trust unit, was calculated using 83.2 million trust units
(82.7 million for the comparative period in 2004) and reflects the
assumed conversion of all outstanding Series 1 (0.8 million trust units)
and Series 2 (4.6 million trust units) Debentures, and the incremental
dilutive effect resulting from the exercise of all trust unit options
(0.2 million incremental trust units) and trust unit warrants (1.1
million incremental trust units).
7. Commitments
(i) Superior has entered into long-term forward contracts to buy
US dollars in order to hedge US dollar in-flows of ERCO Worldwide and
US dollar out-flows of SEM as follows:
Net US $ Purchases Conversion Rate
------------------ ---------------
2005 $26.7 1.33
2006 $(5.2) 1.29
2007 $18.3 1.25
2008 $41.9 1.26
2009 $45.9 1.27
2010 and thereafter $ 3.1 1.19
As of March 31, 2005, the net mark-to-market loss on long-term
foreign currency forward contracts was $3.6 million.
(ii) ERCO Worldwide has entered into a long-term agreement with CMPC
Celulosa S.A. ("CMPC"), a division of Empresas S.A. to supply sodium
chlorate to CMPC's three pulp mills in Chile. As part of this
agreement, ERCO Worldwide will construct a sodium chlorate
manufacturing plant adjacent to the CMPC Pacifico Mill at an
estimated total cost of $65 million. The new plant is scheduled to
start-up in mid-2006. Cumulative expenditures to March 31, 2005 were
$4.0 million (December 31, 2004 - $1.4 million).
8. Business Segments
Superior operates four distinct business segments; the delivery of
propane and propane related services and accessories operating under the
Superior Propane trade name; the manufacture and sale of chemicals and
related products and services for the pulp and paper and water treatment
industries operating under the ERCO Worldwide trade name; the
distribution of walls and ceilings construction products operating under
the Winroc trade name; and the sale of natural gas under fixed price term
contracts operating under SEM. Superior's corporate office arranges
intersegment foreign exchange contracts from time to time between its
business segments. As a result, in the accompanying tables, the
elimination of intersegment revenues and cost of sales pertaining to
intersegment foreign exchange gains and losses are eliminated under the
Corporate cost column.
For the three Total
months ended Superior ERCO Consol-
March 31, 2005 Propane Worldwide Winroc SEM Corporate idated
-------------------------------------------------------------------------
Revenues $ 256.1 $ 96.3 $ 96.4 $ 64.1 $ (0.8) $ 512.1
Cost of products
sold 163.5 50.2 74.7 60.7 (0.8) 348.3
-------------------------------------------------------------------------
Gross Profit 92.6 46.1 21.7 3.4 - 163.8
Expenses
Operating and
administrative 47.6 22.7 15.6 1.8 1.4 89.1
Amortization of
property, plant
and equipment 5.2 12.2 0.6 - - 18.0
Amortization of
intangible assets - 1.3 - - - 1.3
Interest on
revolving term
bank credits and
term loans - - - - 5.2 5.2
Interest on
convertible
unsecured
subordinated
debentures - - - - 1.9 1.9
Amortization of
convertible
debenture
issue costs - - - - 0.3 0.3
Income tax expense
(recovery) of
Superior 15.1 3.6 1.9 0.8 (14.9) 6.5
-------------------------------------------------------------------------
67.9 39.8 18.1 2.6 (6.1) 122.3
-------------------------------------------------------------------------
Net earnings 24.7 6.3 3.6 0.8 6.1 41.5
Add:
Amortization of
property, plant
and equipment,
intangible assets
and convertible
debenture issue
costs 5.2 13.5 0.6 - 0.3 19.6
Future income tax
expense (recovery) 14.8 3.1 1.5 0.8 (14.6) 5.6
Trust unit
incentive plan
expense (recovery) - - - - (0.3) (0.3)
Less:
Maintenance capital
expenditures, net (0.5) (0.9) (1.3) - - (2.7)
-------------------------------------------------------------------------
Distributable
cash flow $ 44.2 $ 22.0 $ 4.4 $ 1.6 $ (8.5) $ 63.7
-------------------------------------------------------------------------
-------------------------------------------------------------------------
For the three Total
months ended Superior ERCO Winroc Consol-
March 31, 2004 Propane Worldwide (1) SEM(2) Corporate idated
-------------------------------------------------------------------------
Revenues $ 228.5 $ 97.3 $ - $ 50.0 $ (0.2) $ 375.6
Cost of products
sold 137.4 50.7 - 46.3 (0.2) 234.2
-------------------------------------------------------------------------
Gross Profit 91.1 46.6 - 3.7 - 141.4
Expenses
Operating and
administrative 45.9 23.7 - 1.3 1.5 72.4
Amortization of
property, plant
and equipment 5.5 12.4 - - - 17.9
Amortization of
intangible assets - 1.4 - - - 1.4
Interest on
revolving term
bank credits and
term loans - - - - 3.4 3.4
Interest on
convertible
unsecured
subordinated
debentures - - - - 4.0 4.0
Amortization of
convertible
debenture
issue costs - - - - 0.4 0.4
Income tax expense
(recovery) of
Superior 14.7 3.5 - 0.9 (14.2) 4.9
-------------------------------------------------------------------------
66.1 41.0 - 2.2 (4.9) 104.4
-------------------------------------------------------------------------
Net earnings 25.0 5.6 - 1.5 4.9 37.0
Add:
Amortization of
property, plant
and equipment,
intangible assets
and convertible
debenture issue
costs 5.5 13.8 - - 0.4 19.7
Future income tax
expense (recovery) 14.4 3.0 - 0.9 (14.2) 4.1
Trust unit
incentive plan
expense (recovery) - - - - 0.9 0.9
Less:
Maintenance capital
expenditures, net (0.6) (0.6) - - - (1.2)
-------------------------------------------------------------------------
Distributable cash
flow $ 44.3 $ 21.8 $ - $ 2.4 $ (8.0) $ 60.5
-------------------------------------------------------------------------
-------------------------------------------------------------------------
(1) Winroc was acquired June 11, 2004
(2) See Note 2(b)
Total Assets, Net Working Capital, Acquisitions and Other Capital
Expenditures
Total
Superior ERCO Winroc Consol-
Propane Worldwide (1) SEM(2) Corporate idated
-------------------------------------------------------------------------
As at March 31, 2005
Net working capital 21.5 (11.4) 45.4 1.3 (1.9) 54.9
Total assets 588.2 746.7 156.4 31.2 11.9 1,534.4
-------------------------------------------------------------------------
As at December 31,
2004
Net working capital 61.3 (8.1) 50.5 (2.3) (3.5) 97.9
Total assets 603.6 754.6 152.9 28.6 12.4 1,552.1
-------------------------------------------------------------------------
For the three months
ended March 31, 2005
Acquisitions 14.7 - - - - 14.7
Other capital
expenditures, net - 3.3 - - - 3.3
-------------------------------------------------------------------------
For the three months
ended March 31, 2004
Acquisitions - - - - - -
Other capital
expenditures, net - 0.9 - - - 0.9
-------------------------------------------------------------------------
-------------------------------------------------------------------------
(1) Winroc was acquired June 11, 2004
(2) See Note 2(b)
Total
Geographic Information United Consol-
Canada States Other idated
-------------------------------------------------------------------------
Revenues for the three months
ended March 31, 2005 431.1 77.6 3.4 512.1
Property, plant and equipment
as at March 31, 2005 652.2 77.4 - 729.6
Total assets as at March 31, 2005 1,266.4 268.0 - 1,534.4
-------------------------------------------------------------------------
Revenues for the three months
ended March 31, 2004 323.5 41.2 10.9 375.6
Property, plant and equipment
as at December 31, 2004 663.2 77.8 - 741.0
Total assets as at
December 31, 2004 (Note 2(b)) 1,282.0 270.1 - 1,552.1
-------------------------------------------------------------------------
-------------------------------------------------------------------------
9. Subsequent Events
On April 11, 2005, Winroc acquired the business of Leon's Insulation Inc.
and associated entities, a distributor of drywall, insulation and
associated products in the Greater Toronto Area, for consideration of
approximately $48.5 million.
On April 12, 2005, ERCO Worldwide announced that it had entered into an
agreement to acquire a chloralkali business in Port Edwards, Wisconsin
from an affiliate of Occidental Chemical Corporation, for approximately
US $29.5 million. The acquisition is subject to certain closing
conditions, including United States Federal Trade Commission approval,
which is expected to be received by June 30, 2005.
10. Comparative Figures
Certain reclassifications of prior period amounts have been made to
conform to current period presentations.
>>
Mogelijk gemaakt door 
Translate
Translate