TSX: TWH
TORONTO, March 1 /CNW/ - Tri-White Corporation ("Tri-White" or the "Company") (TSX: TWH) today announced its financial results for the quarter and year ending December 31, 2006.
During the year:
- EBITDA for 2006 was up $0.2 million over 2005;
- White Pass achieved increased passenger capture rates and operating
margins; and
- Cash flow increased as a result of dividends received from equity
investments in ClubLink and Renasant of $1.1 million and
$22.2 million, respectively.
Financial Highlights
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Year Ended
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(in thousands of dollars except December 31, December 31,
per share amounts) 2006 2005
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Revenue 40,506 41,531
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EBITDA 18,589 18,353
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Interest and other income (expense) (195) 2,506
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Equity earnings 11,403 1,530
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Provision for income taxes (6,704) (8,071)
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Net earnings 18,071 12,192
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Earnings per share - basic $0.78 $0.53
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Weighted average shares outstanding 22,933 22,900
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Note: EBITDA is not a recognized performance measure under Canadian GAAP.
EBITDA is defined as earnings before interest, taxes, depreciation,
amortization and earnings from equity accounted investments. Management
believes that in addition to net earnings, this measure is useful
supplemental information to provide investors with an indication of
income available prior to debt service, capital expenditures and income
taxes. Investors should be cautioned, however, that this measure should
not be construed as an alternative to net earnings determined in
accordance with GAAP as an indicator of the Company.
TODAY, THE COMPANY ANNOUNCED A REGULAR DIVIDEND OF $0.06 PER SHARE WILL
BE PAID ON MARCH 30TH, 2007 TO SHAREHOLDERS OF RECORD AS AT MARCH 16TH,
2007.
Operating Highlights
Virtually all of the Company's operating income originates from its major operating division, White Pass & Yukon Route ("White Pass"). Additionally, Tri-White has significant ownership in two public entities, ClubLink Corporation ("ClubLink") and Renasant Financial Partners Limited ("Renasant"), formerly Clearlink Capital Corporation, for which it records income on an equity basis.
The rail tourism and docking operations at White Pass and the golf operations of the Company's equity accounted investment in ClubLink Corporation ("ClubLink") are highly seasonal. The majority of the revenue and earnings from these businesses occur during the third quarter of the year. Accordingly, the earnings of the Company will fluctuate with those of the underlying business units.
EBITDA for the year ended December 31, 2006 was $18.6 million compared with $18.4 million for the corresponding period in 2005. Operating margins increased to 45.9%, though reported revenue and EBITDA were negatively impacted by the relative strength of the Canadian dollar. Management continues to develop programs to counter cost pressure in labour, fuel and insurance components of the business. The results of White Pass are translated into Canadian currency using average rates during the year. As a result, a change in average exchange rates can impact the net earnings of the Company. In 2006, the change in US dollar exchange rates is estimated to have reduced reported EBITDA by $1.5 million.
Commencing in May, White Pass generates significant amounts of revenue as cruise ship arrivals ramp up quickly to support the west coast schedules. Volume peaks during the third quarter as the majority of North Americans commence their summer vacations.
Cruise ship capacity in Alaska decreased this season, with total on-board arrivals at Skagway slightly reduced from 2005 levels due to the one-time repositioning of several vessels. Still, White Pass benefited from increased capture rates and from its past investments in port infrastructure and excursion capacity. For the 2006 season, which concluded on September 27th, the rail excursion carried 431,249 passengers, a slight increase from 2005.
Tri-White continues to hold its investment in ClubLink. ClubLink is Canada's largest owner, operator and developer of high-quality Member Golf Clubs, Daily Fee Golf Clubs and Golf Resorts, with 36 18-hole equivalent golf courses open for play in 2006. For the year ended December 31, 2006, the Company recorded equity income of $0.1 million (2005 - an equity loss of $0.6 million). The income recognized is based on an average ownership of 31.5% and 31.3% for the years ended 2006 and 2005 respectively. The Company received dividends of $1.1 million in 2006 (2005 - $0.9 million). The dividend income received is consistent with the Company's objective to enhance cash flow.
The Company continues to maintain its investment in Renasant and accounts for the equity earnings on a three-month trailing basis. As such, the equity earnings recorded by Tri-White, for the year ended December 31, 2006, are based on the results of Renasant for the twelve months ended September 30, 2006.
On March 8, 2006, Renasant completed the sale of its active leasing business and now maintains the bulk of its assets in cash and marketable securities. The equity income recorded by Tri-White for the year ended December 31, 2006 was $11.3 million (2005 -$2.2 million) and dividends of $22.2 million were received for the year ended December 31, 2006 (December 31, 2005 - $1.2 million). The dividend has been reflected in the consolidated statement of cash flow as a return of capital of $9.6 million in "investing activities" and $13.2 million as a distribution in "operating activities". During 2006, the Company purchased an additional 70,000 shares of Renasant at a cost of $0.8 million, increasing the Company's ownership interest in Renasant to 36.5%.
During the year ended December 31, 2006, Renasant announced the settlement of material litigation matters, which had existed when the Company acquired the majority of its investment in Renasant. With resolution of these matters, the Company has recognized the fair value increment previously associated with this investment, resulting in a pre-tax gain of approximately $10.4 million, which is included in income from equity accounted investments. The Company has also recognized a future tax expense of $1.8 million relating to this transaction.
Long-term investments include 5.4 million shares of ClubLink carried at $21.4 million, and 3.2 million shares of Renasant carried at $15.1 million. The market value of these securities exceeds their carrying cost by $32.5 million at December 31, 2006.
Corporate Developments
During spring 2006, an extension to Broadway Dock was completed increasing the docking capacity in Skagway and creating facilities for contemporaneous docking by four of the largest cruise industry vessels.
On September 18th, 2006, the Company announced the renewal of its normal course issuer bid providing the Company the authority to purchase, for cancellation, up to 1,146,771 common shares over the following twelve-month period. During the year ended December 31, 2006 the Company did not purchase or cancel any shares.
The Company continued with its regular quarterly dividend program and paid a dividend of $0.06 per share, or $1.4 million, on December 29th.
Financial statements are attached.
Management's discussion and analysis, financial statements and other disclosure information relating to the Company is available through SEDAR at www.sedar.com and on the Company website at www.triwhite.com.
Statements contained herein that are not based on historical or current fact constitute "forward-looking statements". Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, events or developments to be materially different from any future results, events or developments expressed or implied by such forward-looking statements. Given these uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements. The Company does not assume the obligation to update or revise any forward-looking statements.
TRI-WHITE CORPORATION
CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2006
Tri-White Corporation
CONSOLIDATED BALANCE SHEETS
As at December 31, 2006 2005
(in thousands of dollars) $ $
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ASSETS
Current
Cash and cash equivalents 21,853 20,469
Amounts receivable 543 654
Loans receivable 16,892 7,000
Material and supplies 4,379 4,618
Prepaids and other assets 557 473
Portfolio investments 3 3
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44,227 33,217
Long-term investments 36,554 48,262
Capital assets 73,957 73,864
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Total assets 154,738 155,343
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LIABILITIES AND SHAREHOLDERS' EQUITY
Current
Bank indebtedness 21,706 15,139
Promissory notes - 17,935
Accounts payable and accrued liabilities 1,915 3,985
Income and other taxes payable 1,655 517
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25,276 37,576
Future income tax liabilities 17,055 17,471
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Total liabilities 42,331 55,047
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Shareholders' equity
Share capital 61,278 61,216
Cumulative translation adjustment (14,267) (13,688)
Contributed surplus 191 130
Retained earnings 65,205 52,638
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Total shareholders' equity 112,407 100,296
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Total liabilities and shareholders' equity 154,738 155,343
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Tri-White Corporation
CONSOLIDATED STATEMENTS OF EARNINGS AND RETAINED EARNINGS
For the year ended December 31,
(in thousands of dollars, except for 2006 2005
per share amounts) $ $
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REVENUE 40,506 41,531
Cost of sales and operating expenses 21,917 23,178
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Earnings from operations before the undernoted 18,589 18,353
Amortization 3,195 3,405
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Earnings before other income (expense)
and income taxes 15,394 14,948
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OTHER INCOME (EXPENSE)
Investment income 1,837 2,519
Interest expense (2,029) (2,379)
Net gain (loss) on sale of investments
and assets (3) 2,366
Unrealized foreign exchange gain (loss) 442 (49)
Income from equity accounted investments 11,403 1,530
Provision on long-term investment (2,269) -
Net gain on insurance claim - 1,328
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9,381 5,315
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Earnings before income taxes 24,775 20,263
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Provision for income taxes
Current 6,920 6,755
Future (216) 1,316
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6,704 8,071
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Net earnings for the year 18,071 12,192
Retained earnings, beginning of year 52,638 45,946
Dividends (5,504) (5,500)
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Retained earnings, end of year 65,205 52,638
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Earnings per share
Basic 0.79 0.53
Diluted 0.78 0.53
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Tri-White Corporation
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the year ended December 31, 2006 2005
(in thousands of dollars) $ $
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OPERATING ACTIVITIES
Net earnings for the year 18,071 12,192
Items not affecting cash
Amortization 3,195 3,405
Future income taxes (216) 1,316
Net (gain) loss on sale of investments
and assets 3 (2,366)
Net gain on insurance claim - (1,328)
Income from equity accounted investments (11,403) (1,530)
Net unrealized foreign exchange (gain) loss (442) 49
Stock compensation expense 61 62
Provision on long-term investment 2,269 -
Distributions from equity accounted investments 13,800 2,097
Net change in operating assets and liabilities (662) 1,864
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24,676 15,761
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FINANCING ACTIVITIES
Repayment of promissory notes (17,935) -
Proceeds on issue of common shares - 198
Dividends paid (5,442) (5,413)
Net proceeds from bank indebtedness 6,567 7,874
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(16,810) 2,659
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INVESTING ACTIVITIES
Proceeds on sale of capital assets and
investments 4 21,522
Proceeds on insurance claim - 1,830
Purchase of capital assets (3,765) (8,299)
Purchase of investments (762) (16,319)
Return of capital from investments 10,073 -
Advances of loans receivable (23,149) (9,510)
Repayment of loans receivable 11,257 9,510
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(6,342) (1,266)
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Net effect of currency translation
on cash and cash equivalents (140) (1,593)
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Net increase in cash and cash equivalents
during the year 1,384 15,561
Cash and cash equivalents, beginning of year 20,469 4,908
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Cash and cash equivalents, end of year 21,853 20,469
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Cash 14,353 20,469
Cash equivalents 7,500 -
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21,853 20,469
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%SEDAR: 00009355E