OAKVILLE, ON, July 17 /CNW/ - Glendale International Corp. (TSX: GIN)
today reported financial results for the second quarter of fiscal 2006, ended
June 2, 2006.
Highlights for the quarter include:
<<
- Sales of $44.5 million compared with $48.4 million a year ago;
- Net earnings of $1.1 million, or $0.09 per share;
- Continued strength in specialty trailer sales;
- Electronics business achieves record sales of $14.8 million;
- Significant contract wins and increased bookings for Navigational
Aids business.
>>
"With our differentiated product offering and innovative features, our
core Recreational Vehicles business remains very competitive, however, sales
were negatively affected by the stronger Canadian dollar and higher fuel
prices," said Edward C. Hanna, Chief Executive Officer and Chairman, Glendale
International Corp. "While our overall RV business experienced weaker sales,
our Travelaire division based in Red Deer, benefited from the continued
strength of resource-based industries in Western Canada, with sales of our
specialty trailers doing exceptionally well. Our Electronics business achieved
record sales for the quarter, despite the impact of the stronger Canadian
dollar and production disruptions at their Chatsworth facility, which resulted
from planned upgrades to plant and equipment. And, although sales and
operating earnings were down in Canadian dollars, our Navigational Aids
business had recent contract wins and increased bookings, with a significant
order book backlog half way through the fiscal year."
Financial Results
Sales for the second quarter of fiscal 2006 were $44.5 million compared
with $48.4 million for the second quarter of fiscal 2005. The decrease was
primarily due to lower sales from the Recreational Vehicles business, as well
as lower sales from the Navigational Aids business when translated into
Canadian dollars. Net earnings for the quarter were $1.1 million, or $0.09 per
share, compared with $1.7 million, or $0.13 per share, for the second quarter
of fiscal 2005.
Sales for the first six months of fiscal 2006 were $83.1 million compared
with $85.4 million for the corresponding period of fiscal 2005. Net earnings
for the first six months were $1.9 million, or $0.15 per share, consistent
with $1.9 million or $0.15 per share for the same period last year.
As of June 2, 2006, Glendale International had working capital of $14.9
million, including cash and cash equivalents of $2.2 million, compared to
working capital of $9.2 million, including cash and cash equivalents of $6.2
million, on November 30, 2005.
Recreational Vehicles (Glendale RV and Travelaire Canada)
Sales for the Recreational Vehicles business for the second quarter of
fiscal 2006 were $25.1 million compared with $29.0 million for the second
quarter of last year. Sales for the quarter were impacted by the stronger
Canadian dollar, which resulted in increased price competition and reduced the
value of U.S. dollar denominated sales, and by higher fuel prices, which
influence consumers' purchase decisions. Sales were also lower as a result of
a two-week production disruption at the Travelaire plant in Red Deer, due to a
temporary supply issue, which has since been resolved. The Recreational
Vehicles business continued to experience strong demand for its specialty
trailers in Western Canada. Operating earnings for the quarter were $1.5
million compared with $2.6 million for the same quarter last year.
Electronics (Firan Technology Group Corporation)
Sales for Firan Technology Group Corporation (TSX:FTG) for the second
quarter increased to a record $14.8 million compared with $14.2 million a year
ago, despite the appreciation in the Canadian dollar reducing the translated
value of U.S. denominated sales by approximately $1.1 million. Sales for the
Circuits Division increased to $12.1 million from $11.7 million a year ago,
with improving market conditions and an improved sales team driving the
year-over-year improvement. Sales for the Aerospace Division increased to $2.7
million from $2.5 million a year ago, with the increase being attributable to
higher 'Quick Turn' activity and increased shipments to key customers.
Operating earnings for the quarter were $0.4 million compared to $0.3 million
for the same period last year. In accordance with its ownership position in
Firan Technology Group Corporation, Glendale International recorded net
earnings from the company for the second quarter of fiscal 2006 of $0.2
million compared with a net loss of $47,000 for the same period last year.
Navigational Aids (Fernau Avionics)
Sales for Fernau Avionics for the quarter were $4.6 million compared with
$5.2 million for the second quarter of fiscal 2005. Operating earnings for the
quarter were $0.6 million compared with $0.7 million for the second quarter of
fiscal 2005. When adjusted for the effect of the stronger Canadian dollar,
sales for the quarter remained flat to last year, while operating earnings
increased by 19.0%. During the quarter, Fernau signed significant contracts
for the provision of Distance Measuring Equipment ("DME"), including 103 units
for Nav Canada, and 52 units for Avinor AS, a Norwegian company, which owns
and operates 46 airports in Norway. Additionally, Fernau received its second
significant order for its Personal Locator Beacon ("PLB"), with a sale to the
Royal Danish Air Force.
Other Developments
Subsequent to quarter end, the Corporation completed a sale-leaseback of
its property located at 353 Iroquois Shore Road, in Oakville, Ontario, for net
proceeds of $2.4 million.
The Corporation intends on selling and leasing back its property located
at Golden West Avenue, in Red Deer, Alberta, with proceeds less carrying value
expected to be approximately $4.5 million before taxes. The sale is expected
to close in the next 12 months. The Corporation intends to acquire land and
construct a modern facility to replace the current 40-year old constrained
facility.
Outlook
"In keeping with our continued focus on innovation and differentiation,
late last year we made the strategic decision to introduce a line of 12-foot
wide park models to capture a larger share of a growing market for park models
over the next several years," said Mr. Hanna. "With strong advantages in
producing locally, our increased presence in park models will help mitigate
the affects of higher fuel prices and competitive pricing pressures resulting
from changes in currency valuation. And, we will continue to look at
implementing additional strategies that would protect each of our businesses
from external factors and create superior value for our shareholders."
<<
Financial Highlights
(in thousands of dollars except per share amounts)
(prepared without audit)
------------------------------------------
Three Months Ended Six Months Ended
June 2, May 27, June 2, May 27,
2006 2005 2006 2005
-------------------------------------------------------------------------
Sales $44,478 $48,378 $83,095 $85,426
Net Earnings from Continuing
Operations $980 $1,675 $1,989 $1,888
Net Earnings/(Loss) from
Discontinued Operation $122 $7 ($109) ($25)
------------------------------------------
Net Earnings $1,102 $1,682 $1,880 $1,863
------------------------------------------
-------------------------------------------------------------------------
Basic and Diluted Net Earnings
per Share from Continuing
Operations $0.08 $0.13 $0.16 $0.15
Basic and Diluted Net
Earnings per Share $0.09 $0.13 $0.15 $0.15
-------------------------------------------------------------------------
INTERIM CONSOLIDATED BALANCE SHEETS
(in thousands of dollars)
(prepared without audit)
As At
-------------------------------
CURRENT ASSETS June 2, November 30, May 27,
2006 2005 2005
-------------------------------
Cash and cash equivalents $2,237 $6,208 $5,861
Accounts receivable 22,110 20,616 23,129
Income taxes recoverable 81 - 620
Inventories 25,529 21,582 26,022
Deposits and prepaid expenses 868 885 1,277
Property held for sale 2,409 - -
Future income taxes 1,139 1,088 1,613
Current assets of discontinued
operation 28 689 485
-------------------------------
54,401 51,068 59,007
Future Income Taxes 1,282 564 -
Property, Plant and Equipment (net) 9,926 15,796 19,642
Property Held for Sale 2,476 - -
Note Receivable 1,967 1,967 -
Intangible Asset 271 281 338
Goodwill 4,876 4,876 4,541
Long Term Assets of Discontinued
Operation 1 198 209
-------------------------------
$75,200 $74,750 $83,737
-------------------------------
-------------------------------
CURRENT LIABILITIES
Bank indebtedness $7,971 $6,506 $10,439
Accounts payable and accrued
liabilities 23,046 23,436 23,869
Income taxes payable 35 200 566
Dividends payable - - 624
Current portion of long-term debt 8,497 11,520 9,617
Current liabilities of discontinued
operation 2 177 320
-------------------------------
39,551 41,839 45,435
Long-Term Debt 25 - 5,159
Future Income Taxes 49 49 405
Non-Controlling Interest 8,426 8,096 7,944
-------------------------------
48,051 49,984 58,943
SHAREHOLDERS' EQUITY
Share capital 1,249 1,249 1,249
Contributed surplus 9,019 8,923 8,859
Cumulative translation adjustment (988) (1,395) 265
Retained earnings 17,869 15,989 14,421
-------------------------------
27,149 24,766 24,794
-------------------------------
$75,200 $74,750 $83,737
-------------------------------
INTERIM CONSOLIDATED STATEMENTS OF EARNINGS
(in thousands of dollars except per share amounts)
(prepared without audit)
Three Months Ended Six Months Ended
------------------------------------------
June 2, May 27, June 2, May 27,
2006 2005 2006 2005
------------------------------------------
Sales $44,478 $48,378 $83,095 $85,426
------------------------------------------
Costs and Expenses
Manufacturing, selling and
administration 41,517 43,887 77,450 79,320
Impairment of property
held for sale 561 - 561 -
Loss/(gain) on sale of
property, plant and equipment 3 - (3) -
Depreciation and amortization 962 1,166 1,985 2,351
Research and development 462 525 821 955
------------------------------------------
43,505 45,578 80,814 82,626
------------------------------------------
Earnings Before Undernoted 973 2,800 2,281 2,800
------------------------------------------
Restructuring and
severance costs - - - 276
------------------------------------------
Operating Earnings 973 2,800 2,281 2,524
------------------------------------------
Other Income (Expenses)
Interest income 53 44 119 67
Interest expense - long term (156) (226) (327) (448)
Interest expense - short term (228) (126) (419) (155)
Dilution gain - - - 185
------------------------------------------
(331) (308) (627) (351)
------------------------------------------
Earnings Before Income Taxes,
Non-Controlling Interest and
Discontinued Operation $642 $2,492 $1,654 $2,173
(Recovery of)/Provision for
income taxes (568) 920 (665) 941
------------------------------------------
Earnings Before Non-
Controlling Interest and
Discontinued Operation $1,210 $1,572 $2,319 $1,232
Non-controlling interest 230 (103) 330 (656)
------------------------------------------
Earnings from Continuing
Operations $980 $1,675 $1,989 $1,888
Earnings/(Loss) from
discontinued operation 122 7 (109) (25)
------------------------------------------
Net Earnings $1,102 $1,682 $1,880 $1,863
------------------------------------------
------------------------------------------
Basic and Diluted Net Earnings
per Share from
Continuing Operations $0.08 $0.13 $0.16 $0.15
------------------------------------------
------------------------------------------
Basic and Diluted Net
Earnings per Share $0.09 $0.13 $0.15 $0.15
------------------------------------------
INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands of dollars)
(prepared without audit)
Three Months Ended Six Months Ended
------------------------------------------
June 2, May 27, June 2, May 27,
2006 2005 2006 2005
------------------------------------------
Operating Activities
Net earnings from continuing
operations $980 $1,675 $1,989 $1,888
Items not affecting cash
Depreciation and
amortization 962 1,166 1,985 2,351
Stock option expense 48 31 96 79
Future income taxes (549) (32) (753) (1)
Non-controlling interest 230 (103) 330 (656)
Dilution gain - - - (185)
Impairment of property
held for sale 561 - 561 -
Loss/(gain) on sale of
property, plant and
equipment 3 - (3) -
Changes in non-cash
operating working capital 2,369 (287) (5,924) (9,215)
------------------------------------------
4,604 2,450 (1,719) (5,739)
Discontinued operation 83 (21) 427 280
Investing Activities
Acquisition of
Young Electronics - - - (6,202)
Purchase of property,
plant and equipment (611) (619) (1,517) (1,513)
Proceeds on sale of property,
plant and equipment 9 - 9 -
------------------------------------------
(602) (619) (1,508) (7,715)
Discontinued operation 131 (4) 131 (8)
Financing Activities
Change in bank indebtedness (2,206) 418 1,465 8,630
Issuance of common shares
by FTGC - (13) - 2,710
New term loan financing - - - 3,526
Repayment of long-term debt
and capital leases (878) (690) (2,849) (818)
------------------------------------------
(3,084) (285) (1,384) 14,048
Effect of foreign
exchange rates on cash 70 (202) 82 (5)
------------------------------------------
Increase/(Decrease) in cash
and cash equivalents 1,202 1,319 (3,971) 861
Net Cash and Cash Equivalents,
Beginning of Period 1,035 4,542 6,208 5,000
------------------------------------------
Net Cash and Cash Equivalents,
End of Period $2,237 $5,861 $2,237 $5,861
------------------------------------------
------------------------------------------
Supplemental disclosures
of cash flows:
Payments for interest $ 456 $ 313 $ 819 $ 565
Payments for income taxes $ - $ 224 $ 343 $ 1,794
Refunds of income taxes $ - $ - $ 14 $ -
SEGMENTED INFORMATION
(in thousands of dollars)
(prepared without audit)
OPERATING SEGMENTS
------------------------------------------------------
Recre- Nav Elec- Other Corp- Total
Three Months Ended ational Aids tronics orate
June 2, 2006 Vehicles Office
------------------------------------------------------
Sales $25,114 $4,600 $14,764 - - $44,478
Costs and expenses 23,619 3,969 14,340 - 1,577 43,505
------------------------------------------------------
Operating earnings 1,495 631 424 - (1,577) 973
Interest income - 17 - - 36 53
Interest expense -
long term - 61 (114) - (103) (156)
Interest expense -
short term - - - - (228) (228)
Income tax recovery - (171) 98 - 641 568
Non-controlling
interest - - (230) - - (230)
------------------------------------------------------
Earnings from
continuing
operations 1,495 538 178 - (1,231) 980
Earnings from
discontinued
operation - - - 122 - 122
------------------------------------------------------
Net earnings $1,495 $538 $178 $122 ($1,231) $1,102
------------------------------------------------------
------------------------------------------------------
Total and
identifiable
assets 27,011 18,149 19,825 29 10,186 75,200
Capital
expenditures 123 25 461 - 2 611
Depreciation and
amortization 136 58 761 - 7 962
Goodwill - - 4,876 - - 4,876
Three Months Ended
May 27, 2005
Sales $29,028 $5,188 $14,162 - - $48,378
Costs and expenses 26,447 4,492 13,870 - 769 45,578
------------------------------------------------------
Operating earnings 2,581 696 292 - (769) 2,800
Interest income - 45 - - (1) 44
Interest expense -
long term - 21 (126) - (121) (226)
Interest expense -
short term - - - - (126) (126)
Income tax provision - (56) (316) - (548) (920)
Non-controlling
interest - - 103 - - 103
------------------------------------------------------
Earnings from
continuing
operations 2,581 706 (47) - (1,565) 1,675
Earnings from
discontinued
operation - - - 7 - 7
------------------------------------------------------
Net earnings $2,581 $706 ($47) $7 ($1,565) $1,682
------------------------------------------------------
------------------------------------------------------
Total and
identifiable
assets 28,094 17,489 22,997 694 14,463 83,737
Capital
expenditures 181 55 380 - 3 619
Depreciation and
amortization 134 68 888 - 76 1,166
Goodwill - - 4,541 - - 4,541
OPERATING SEGMENTS
------------------------------------------------------
Recre- Nav Elec- Other Corp- Total
Six Months Ended ational Aids tronics orate
June 2, 2006 Vehicles Office
------------------------------------------------------
Sales $46,491 $8,477 $28,127 - - $83,095
Costs and expenses 44,096 7,320 27,387 - 2,011 80,814
------------------------------------------------------
Operating earnings 2,395 1,157 740 - (2,011) 2,281
Interest income - 53 - - 66 119
Interest expense -
long term - 79 (219) - (187) (327)
Interest expense -
short term - - - - (419) (419)
Income tax recovery - 36 65 - 564 665
Non-controlling
interest - - (330) - - (330)
------------------------------------------------------
Earnings from
continuing
operations 2,395 1,325 256 - (1,987) 1,989
Loss from
discontinued
operation - - - (109) - (109)
------------------------------------------------------
Net earnings $2,395 $1,325 $256 ($109) ($1,987) $1,880
------------------------------------------------------
------------------------------------------------------
Total and
identifiable
assets 27,011 18,149 19,825 29 10,186 75,200
Capital
expenditures 166 39 1,293 - 19 1,517
Depreciation and
amortization 272 120 1,561 - 32 1,985
Goodwill - - 4,876 - - 4,876
Six Months Ended
May 27, 2005
Sales $49,665 $9,568 $26,193 - - $85,426
Costs and expenses 46,040 8,310 26,438 - 1,838 82,626
------------------------------------------------------
Earnings before
undernoted 3,625 1,258 (245) - (1,838) 2,800
Severance costs - - 276 - - 276
------------------------------------------------------
Operating earnings 3,625 1,258 (521) - (1,838) 2,524
Interest income - 66 - - 1 67
Interest expense -
long term - 40 (244) - (244) (448)
Interest expense -
short term - - - - (155) (155)
Dilution gain - - 185 - - 185
Income tax provision - (56) (399) - (486) (941)
Non-controlling
interest - - 656 - - 656
------------------------------------------------------
Earnings from
continuing
operations 3,625 1,308 (323) - (2,722) 1,888
Loss from
discontinued
operation - - - (25) - (25)
------------------------------------------------------
Net earnings $3,625 $1,308 ($323) ($25) ($2,722) $1,863
------------------------------------------------------
------------------------------------------------------
Total and
identifiable
assets 28,094 17,489 22,997 694 14,463 83,737
Capital
expenditures 675 80 739 - 19 1,513
Depreciation and
amortization 264 131 1,802 - 154 2,351
Goodwill - - 4,541 - - 4,541
>>
About Glendale International Corp.
Glendale International Corp. manages businesses that provide the
opportunity for superior long-term value creation through the application of
proven managerial expertise and innovative business strategies. The
Corporation has built a core portfolio of profitable growth businesses in the
recreational vehicles, electronics and technology sectors and will seek to
acquire complementary businesses that support its value-building proposition.
Glendale International's businesses include: Glendale Recreational
Vehicles/Travelaire Canada, the largest Canadian manufacturer of recreational
vehicles (RVs); A controlling position in Firan Technology Group Corporation,
the largest aerospace and defence supplier of advanced technology printed
circuits in Canada and among the top 25 PCB manufacturers in North America;
and Fernau Avionics, a leading international supplier of ground-based air
navigational systems for military, naval and civil aviation applications.
Glendale International Corp. is a public corporation whose shares trade
on the Toronto Stock Exchange ("TSX") under the symbol "GIN". The Corporation
has approximately 12.5 million common shares outstanding.
To reach Glendale International via the worldwide web logon to
www.glendaleint.com.
This press release contains certain forward-looking statements that
reflect the current views and/or expectations of management of Glendale
International Corp. with respect to its performance, business and future
events. Such statements are subject to a number of risks, uncertainties and
assumptions. Actual results and events may vary significantly.
