TSX:TWH
TORONTO, May 10 /CNW/ -
Financial Highlights
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Three months ended
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(in thousands of dollars March 31, March 31,
except per share amounts) 2007 2006
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Revenue 110 118
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EBITDA(1) (2,699) (2,575)
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Interest and other income (expense) 241 (385)
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Equity earnings (loss) (1,100) (1,178)
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Recovery of income taxes 985 730
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Net loss (3,461) (4,210)
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Loss per share ($0.15) ($0.18)
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Weighted average shares outstanding 22,932 22,931
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(1) EBITDA is not a recognized performance measure under Canadian GAAP.
EBITDA is defined as earnings before taxes, interest, 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 THE REGULAR DIVIDEND OF $0.06 PER
SHARE TO BE PAID ON JUNE 29TH TO SHAREHOLDERS OF RECORD
AS AT JUNE 11TH
First Quarter Operating Highlights
The tourist operations at White Pass & Yukon Route ("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.
During the period from January to March, the Company's main operating subsidiary, White Pass, remained closed for the winter months. Small amounts of revenue are reported during this period as pre-selling commences for the upcoming tourist season.
Similarly, virtually all of the Company's operating income originates from White Pass, based in Alaska. The results of this subsidiary, which are deemed self-sustaining, are translated into Canadian currency using average rates for the period. Changes in exchange rates can impact the net earnings of Tri-White.
EBITDA (defined as revenue less cost of sales and operating expenses) for the three months ended March 31, 2007 was negative $2,699 compared with negative $2,575 for the period ended March 31, 2006. The operating performance was slightly impacted by an increase in insurance costs. On a Canadian dollar basis, the rail/tourism operations were flat year over year.
Tri-White has a significant ownership interest in two public entities, for which it records income on an equity basis. ClubLink Corporation ("ClubLink") is Canada's largest owner, operator and developer of high-quality Member Golf Clubs, Daily Fee Golf Clubs and Golf Resorts, with 39 18-hole equivalent golf courses open for play in 2007. Like the White Pass port and tourist operations, ClubLink operates in a highly seasonal market. For the three months ended March 31, 2007 the Company recorded an equity loss of $1,122 compared to a loss of $1,727 during the three months ended March 31, 2006. This loss was based on a weighted average ownership of 31.5% for the three months ended March 31, 2007 and 2006, respectively. The Company received $321 in dividends during the three months ended March 31, 2007 (March 31, 2006 - $268)
The Company also accounts for its investment in Renasant Financial Partners Ltd. ("Renasant") using the equity method. The acquisition of the Company's 34.5% interest in Renasant was obtained in November 2003. The Company's interest as at March 31, 2007 stands at 36.5%. The equity income recorded by Tri-White for the quarter ended March 31, 2007 was $22 (2006 - $549). This was based on the operating results of Renasant for the three months ended December 31, 2006 as the Company records its equity interest on a three-month trailing basis. A return of capital of $9,502 was received in the quarter ended March 31, 2007 (2006 - dividends of $310). In the consolidated statement of cash flows for the three months ended March 31, 2007, these amounts have been reflected as a return of capital of $9,480 in investing activities and $22 as a distribution in operating activities.
Long-term investments include 5.4 million shares of ClubLink carried at $20,007 and 3.2 million shares of Renasant carried at $5,624. At March 31, 2007, the market value of these assets exceeded their carrying cost by $47,993 (December 31, 2006 - $32,524).
On April 27, 2007 the Company announced it had reached an agreement to acquire 6,635,300 shares of ClubLink at a price of $13.25 per share for aggregate consideration of $87.9 million. Of the total price, $35 million will be settled by way of a one year unsecured note, with the balance in cash. Following the transaction, which is expected to close in the second quarter, the Company will own 11,995,475 common shares, representing a 70.7% interest in the issued and outstanding common shares of ClubLink.
Corporate Developments
Cruise ship arrivals in Skagway are expected to improve slightly this season, with expanded passenger numbers from 2006 levels. The Company's main operating subsidiary, White Pass, is focused on a series of programs aimed at improving margins through cost control and pricing initiatives. Currency fluctuations will continue to impact reported results.
The Company has been approved by the Toronto Stock Exchange to make a normal course issuer bid to purchase up to 1,146,711 common shares. The program expires September 19, 2007. During the three months ended March 31, 2007 the Company purchased 104,100 shares (March 31, 2006 - nil).
The Company continued with its regular quarterly dividend program and paid a dividend of $0.06 per share, or $1,370 on March 30th.
Financial statements are attached.
Statements contained herein that are not based on historical or current fact, including without limitation statements containing the words "anticipates," "believes," "may," "continue," "estimate," "expects," and "will" and words of similar import, 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. Such factors include, among others, the following: general economic and business conditions, both nationally and in the regions in which the Company operates; changes in business strategy or development/acquisition plans; environmental exposures, financing risk; existing governmental regulations and changes in, or the failure to comply with, governmental regulations; liability and other claims asserted against the Company; and other factors referenced in the Company's filings with Canadian securities regulators. 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.
Management's discussion and analysis, financial statements and other
disclosure information relating to the Company is available through SEDAR
and at www.sedar.com and on the Company website at www.tri-white.com.
TRI-WHITE CORPORATION
CONSOLIDATED FINANCIAL STATEMENTS
UNAUDITED
March 31, 2007
Tri-White Corporation
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
As at March 31, December 31,
2007 2006
(in thousands of dollars) $ $
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ASSETS
Current
Cash and cash equivalents 27,321 21,853
Accounts receivable 710 543
Loan receivable 12,441 16,892
Income and other taxes recoverable 859 -
Materials and supplies 4,416 4,379
Prepaid expenses and other assets 2,398 560
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48,145 44,227
Long-term investments 25,631 36,554
Capital assets 73,703 73,957
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Total assets 147,479 154,738
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LIABILITIES AND SHAREHOLDERS' EQUITY
Current
Bank indebtedness 22,137 21,706
Accounts payable and accrued liabilities 2,067 1,915
Income and other taxes payable - 1,655
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24,204 25,276
Future income tax liabilities 17,048 17,055
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Total liabilities 41,252 42,331
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Shareholders' equity
Share capital 61,010 61,278
Contributed surplus 207 191
Retained earnings 59,706 65,205
Accumulated other comprehensive income (14,696) (14,267)
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Total shareholders' equity 106,227 112,407
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Total liabilities and shareholders' equity 147,479 154,738
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Tri-White Corporation
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
For the three months ended March 31, 2007 2006
(in thousands of dollars,
except for per share amounts) $ $
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REVENUE 110 118
Cost of sales and operating expenses 2,809 2,693
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Loss from operations before the undernoted (2,699) (2,575)
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Amortization 888 802
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Loss before other income (expense)
and income taxes (3,587) (3,377)
OTHER INCOME (EXPENSE)
Investment income 679 277
Interest expense (436) (606)
Unrealized foreign exchange loss (2) (56)
Loss on equity accounted investments (1,100) (1,178)
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(859) (1,563)
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Loss before income taxes (4,446) (4,940)
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Provision for (recovery of )income taxes
Current (1,085) (553)
Future 100 (177)
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(985) (730)
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Net loss for the period (3,461) (4,210)
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Other comprehensive loss/(gain):
Unrealized foreign currency translation
loss/(gain) 429 (237)
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Total comprehensive loss (3,890) (3,973)
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Loss per share
Basic (0.15) (0.18)
Diluted (0.15) (0.18)
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Tri-White Corporation
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
(UNAUDITED)
Three months ended
March 31, March 31,
2007 2006
(in thousands of dollars) $ $
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Share Capital
Balance, beginning of period 61,278 61,216
Issuance of common shares 10 16
Repurchase of common shares (278) -
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Balance, end of period 61,010 61,232
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Contributed surplus
Balance, beginning of period 191 130
Stock compensation expense 16 15
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Balance, end of period 207 145
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Retained earnings
Balance, beginning of period 65,205 52,638
Net loss for the period (3,461) (4,210)
Dividends (1,370) (1,376)
Excess of purchase price of common shares
over average carrying value (668) -
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Balance, end of period 59,706 47,052
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Accumulated other comprehensive income
Balance, beginning of period (14,267) (13,688)
Unrealized foreign currency translation
gain (loss) (429) 237
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Balance, end of period (14,696) (13,451)
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Shareholders' equity 106,227 94,978
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Tri-White Corporation
CONSOLIDATED STATEMENTS OF CASH FLOW
(UNAUDITED)
For the three months ended March 31,
2007 2006
(in thousands of dollars) $ $
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OPERATING ACTIVITIES
Net loss for the period (3,461) (4,210)
Items not affecting cash
Amortization 888 802
Future income taxes 100 (177)
Loss of equity accounted investments 1,100 1,178
Net unrealized foreign exchange loss 2 56
Stock compensation expense 16 15
Distributions from equity accounted investments 343 577
Net change in operating assets and liabilities (4,405) (5,337)
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Cash used in operating activities (5,417) (7,096)
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FINANCING ACTIVITIES
Promissory note - (11,935)
Proceeds on issue of common shares -
Shares purchased for cancellation (946) -
Dividends paid (1,360) (1,360)
Net proceeds from bank indebtedness 431 6,505
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Cash used in financing activities (1,875) (6,790)
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INVESTING ACTIVITIES
Purchase of capital assets (1,066) (273)
Return of capital 9,480 -
Advances of loan receivable (4,765) -
Repayment of loan receivable 9,185 -
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Cash provided by (used in) investing activities 12,834 (273)
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Net effect of currency translation adjustment
on cash and cash equivalents (74) 135
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Net change in cash and cash equivalents
during the period 5,468 (14,024)
Cash and cash equivalents, beginning of period 21,853 20,469
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Cash and cash equivalents, end of period 27,321 6,445
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Represented by
Cash 7,821 6,445
Cash equivalents 19,500 -
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27,321 6,445
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%SEDAR: 00009355E