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Glendale International reports third quarter financial results
(Canada Newswire English Via Acquire Media NewsEdge) Attention Business/Financial Editors
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Toronto Stock Exchange Symbol: GIN
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OAKVILLE, ON, Oct. 10 /CNW/ - Glendale International Corp. (TSX: GIN) today reported financial results for the third quarter ended August 29, 2008.
Financial Results
Consolidated sales from continuing operations for the third quarter were $20,522,000 compared to $28,303,000 for the third quarter of last year. Year to date consolidated sales from continuing operations were $69,108,000 compared to $98,234,000 for the same period in 2007. Net loss from continuing operations for the third quarter of 2008 was $2,231,000, or $0.24 per share, compared to net loss from continuing operations of $771,000, or $0.06 per share, for the third quarter of 2007. Year to date net loss from continuing operations was $4,812,000, or $0.52 per share, compared to net loss from continuing operations of $475,000, or $0.04 per share, for the same period in 2007.
Glendale reports segmented information in its unaudited interim consolidated financial statements as follows: Recreational Vehicles, Electronics, and Corporate Office. The financial results for the third quarter ended August 29, 2008, and year to date 2008 compared to the same periods in 2007 are set out below:
Recreational Vehicles (Glendale RV and Travelaire)
Sales for the Recreational Vehicles segment for the third quarter were $4,774,000 compared to $14,408,000 for the third quarter of 2007. Year to date sales were $23,304,000 compared to $55,165,000 for the same period in 2007.
Net loss for the Recreational Vehicle segment for the third quarter of 2008 was $2,173,000 compared to net loss of $538,000 for the third quarter of the prior year. Year to date net loss was $4,090,000 compared to net earnings of $348,000 for the same period in 2007.
The Recreational Vehicle segment is comprised of two operating divisions, Glendale RV located in Strathroy, Ontario and Travelaire located in Red Deer, Alberta.
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Glendale RV
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Sales at Glendale RV were $3,398,000 in the current quarter compared to $8,459,000 in the prior year quarter representing a decrease of $5,061,000, or 59.8%. Year to date sales were $16,581,000 compared to $31,459,000 for the same period in 2007. The decrease in sales is the result of a combination of negative economic factors including: the weak economy in the US, tightening credit restrictions, the increased cost of fuel, the increased number of US imports to Canada and the strengthening Canadian currency.
Net loss for the Glendale RV division for the third quarter ended August?29, 2008 was $1,417,000 compared to a net loss of $381,000 for the same quarter of 2007. Year to date net loss was $1,747,000 compared to net loss of $399,000 for the same period in 2007.
The combination of negative economic factors had a significant negative impact on the sales levels and profitability of Glendale RV's business. During the third quarter the Recreational Vehicle Industry of America reported year over year declines of recreational vehicle shipments of 31.9% in June, 38.7% in July, and 44.4% in August. When the economic environment does recover, Glendale RV will be well positioned for an increase in dealer demand as our dealer inventories are down approximately 35% while retail sales of our Titanium product is only down approximately 18%. We are also well positioned to survive the economic downturn. Excluding Glendale's subsidiary Firan Technology Group Corporation, Glendale had no debt and working capital relating to its continuing operations of $21,439,000, including cash and cash equivalents of $10,394,000 as at August 29, 2008.
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Travelaire
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Sales at Travelaire were $1,376,000 in the current quarter compared to $5,949,000 in the prior year quarter representing a decrease of $4,573,000 or 77%. Year to date sales were $6,723,000 compared to $23,706,000 for the same period in 2007.
Net loss for the Travelaire division for the third quarter ended August?29, 2008 was $756,000 compared to a net loss of $157,000 for the same quarter of 2007. Year to date net loss was $2,343,000 compared to net earnings of $747,000 for the same period in 2007.
The decrease in sales at Travelaire is the result of the same negative economic factors that Glendale RV has experienced with two additional disadvantages. Travelaire has not been able to reduce its material cost by purchasing in the US due to its location and has seen an influx of inexpensive recreational vehicle imports from the United States to Western Canada. As a result of these factors we continue to focus our attention on the manufacture of relocatable structures, workforce accommodations, mobile office units and well site units for the natural resource and construction industries in Western Canada. In order to make this transition a success we recently hired Mr. John McCook as our new President of the Travelaire Relocatable Structures division. John has significant experience in this industry in Western Canada and will be a valuable addition to our team going forward.
We will also continue to manufacture park models at Travelaire as we feel we can compete in this market due to the shipping cost our US competition must incur to transport this product to Western Canada.
"We are very excited about the potential in Western Canada for the manufacture of relocatable structures and are extremely happy to have John?McCook joining our team who brings a wealth of industry knowledge", commented Ed Hanna Chairman and CEO of Glendale.
Electronics (Firan Technology Group Corporation TSX: FTG)
Net sales increased by $1,853,000 or 13%, from $13,895,000 in the third quarter of 2007 to $15,748,000 in the third quarter of 2008. Excluding the impact of the strengthening Canadian dollar compared to the US dollar, revenue was up approximately $2.3 million or 16% over the same period last year.
The Circuit division sales increased by $1.9 million or 17% over the same period last year. The acquisition of Filtran increased revenues during the quarter by $700,000 which was all generated from FTG facilities as the Filtran facility was closed at the end of March 2008. The transition of Filtran business continues to progress well. All of the Filtran equipment has been moved to FTG's facilities and all critical items are operational. Year-to-date FTG has been qualified at a number of key new accounts as a result of this acquisition including Merrimac Industries, Lockheed Martin Corporation, L-3 Narda, Raytheon, Macom, and many others. FTG's share of high speed and RF printed circuit boards has increased dramatically this year and should continue to increase as more qualifications are completed and key programs ramp up.
For the Aerospace division, sales in the third quarter of 2008 were $3,002,000 compared to $3,018,000 in the third quarter of 2007. Sales levels for the third quarter 2007 were unusually high due to a increase in shipments at the end of the quarter just ahead of the move to a new facility. The business continues to see strong demand from existing and new customers.
Year to date FTG's revenues are up $2.7 million or 6% compared to the same period last year. Excluding the impact of the exchange rate, revenues are up 15% year over year.
FTG experienced strong bookings across all divisions in the third quarter of 2008. Total bookings in the quarter were over $16 million and the book-to-bill ratio was 1.04:1. The book-to-bill was 0.97:1 for FTG Circuits and 1.32:1 for FTG Aerospace. The Aerospace ratio is impacted by the timing of large individual orders from customers which typically levels out over a full year period. Total backlog of orders at the end of the third quarter were $16?million. FTG continues to add customers and reduce its dependence on any one customer.
Gross margin increased by $509,000 to $3,559,000 or 23% of sales for the third quarter of 2008 as compared with $3,050,000 or 22% of sales in the third quarter of 2007. The increase in gross margin is the result of increased revenues and the ongoing focus on higher technology products offset by the impact of the exchange rate and material cost increases.
Net earnings before non-controlling interest for the third quarter of 2008 were $190,000 as compared to a loss of $182,000 in the third quarter of 2007. FTG continues to invest in R&D to expand its product offerings and capture new customers and programs. R&D investments in the third quarter 2008 were $715,000 including R&D relating to Filtran products compared to $984,000 in the third quarter of 2007. Included in the third quarter 2008 was $177,000 in restructuring costs related to the Filtran acquisition. Included in third quarter 2007 was a recovery of $86,000 for research and development costs. Year to date net loss before non-controlling interest was $651,000 compared to earnings of $642,000 for the same period last year.
FTG had many accomplishments in the third quarter of 2008 that continue to improve and position it for the future which are as follows:
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- The continued transition of the equipment and customers of Filtran
Microcircuits, Inc. to existing FTG facilities
- A reduction of sales to the United States from 86% in Q3, 2007 to 74%
in Q3, 2008, reducing the Corporation's exposure to the US dollar.
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FTG had a positive cash flow from operations of $951,000 in the third quarter of 2008 compared to negative cash flow of $68,000 in the third quarter of 2007. This improvement is due to improved operating results and improved working capital management. Subsequent to the Filtran acquisition in the first quarter of 2008 which was financed from FTG operating line, FTG has repaid bank debt of $978,000 while continuing to finance $828,000 of Filtran R&D and restructuring costs from operations.
"We are extremely pleased with the continued sales growth FTG has experienced and our qualification at many key new customers is expected to enable us to maintain our growth rate in the future. Our focus on the aerospace and defence market is proving to be a good decision as this market continues to be robust," commented Brad Bourne, President and CEO, of FTG. He added, "Our strategy of increasing the technical capabilities of the Corporation to address the complete range of products required by our customers, through internal R&D and acquisition, is also paying off. This year, our acquisition of Filtran Microcircuits has accelerated FTG's penetration of high speed, radio frequency circuit boards and brought many new customers yielding immediate benefits to FTG".
For a more detailed analysis of FTG's financial results please access such information at SEDAR.
www.sedar.com.
Corporate Office
Corporate office incurred expenses of $419,000 during the third quarter of 2008 compared to $1,162,000 during the third quarter of 2007. Year to date expenses were $1,820,000 in 2008 compared to $2,862,000 excluding a foreign exchange gain in the prior year. The decrease in corporate expenses of $1,042,000 year to date relates primarily to a reduction in administration expenses and professional fees.
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 owns growth businesses in the recreational vehicles and electronics industries, and will seek to acquire complementary businesses that support its value-building proposition.
Glendale's Recreational Vehicle business is comprised of two operating divisions: Glendale Recreational Vehicles ("Glendale RV") located in Strathroy, Ontario and Travelaire Canada ("Travelaire") located in Red Deer, Alberta. Glendale RV manufactures a broad range of innovative, differentiated high-quality Recreational Vehicles ("RV's") for both the US and Canadian markets and Travelaire manufactures Park Model trailers and Relocatable Structures for the Western Canadian market place. The Corporation also owns a controlling position in Firan Technology Group Corporation, a leading North American manufacturer of high technology printed circuit boards and precision illuminated display systems.
Glendale International's common shares are listed on the Toronto Stock Exchange ("TSX") under the symbol "GIN". The Corporation has 12,487,017 common shares outstanding.
To reach Glendale International via the worldwide web logon to www.glendaleint.com.
Forward-Looking Statements
This press release contains "forward-looking" statements related to future events or future performance and reflect the expectations of Glendale International Corp., regarding its growth, results of operations, performance and business prospects, and opportunities and trends affecting the recreational vehicles, and electronics industries. Such forward-looking statements reflect current beliefs of management and are based on information currently available. In certain cases, forward-looking statements can be identified by the use of words such as "believe", "expects", "will", "intends", "projects", "anticipates", "estimates", "continues" or similar words or the negative of these or other comparable terminology. Readers are cautioned that forward-looking information involves known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking information. Accordingly, investors should not place undue reliance on forward-looking information. Other than as specifically required by law, the Corporation undertakes no obligation to update any forward-looking statement to reflect events or circumstances after the date on which such statement is made, or to reflect the occurrence of unanticipated events, whether as a result of new information, future events or results otherwise.
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GLENDALE INTERNATIONAL CORP.
Interim Consolidated Balance Sheets
(in thousands of dollars)
(prepared without audit)
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August November
29, 2008 30, 2007
(unaudited) (audited)
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CURRENT ASSETS
Cash $10,508 $17,543
Restricted cash - 201
Accounts receivable 13,369 13,154
Income taxes recoverable 649 1,798
Inventories 21,583 18,987
Deposits and prepaid expenses 534 677
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46,643 52,360
Note Receivable 1,967 1,967
Investment 358 358
Accrued Benefit Asset 1,433 1,244
Future Income Taxes 703 294
Property, Plant and Equipment, net of accumulated
depreciation 9,444 9,994
Goodwill and Intangible Assets 4,887 4,231
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$65,435 $70,448
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CURRENT LIABILITIES
Bank indebtedness $2,537 $400
Accounts payable and accrued liabilities 12,086 13,268
Future income taxes - 700
Current portion of long-term debt and capital
leases 1,523 1,378
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16,146 15,746
Long-Term Debt and Capital Leases 5,722 5,927
Deferred Gain on Sale of Property 2,679 3,331
Non-Controlling Interest 7,147 7,513
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31,694 32,517
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SHAREHOLDERS' EQUITY
Share capital 1,249 1,249
Share puchase financing (4,284) (4,450)
Contributed surplus 9,943 9,795
Accumulated other comprehensive loss (521) (829)
Retained earnings 27,354 32,166
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33,741 37,931
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$65,435 $70,448
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GLENDALE INTERNATIONAL CORP.
Interim Consolidated Statements of (Loss)/Earnings
(in thousands of dollars except per share amounts)
(prepared without audit)
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Three Months Ended Nine Months Ended
August 29, August 31, August 29, August 31,
2008 2007 2008 2007
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Sales $ 20,522 $ 28,303 $ 69,108 $ 98,234
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Costs and Expenses
Manufacturing, selling and
administration 21,277 28,570 70,093 95,369
Amortization of deferred
gain (217) (224) (652) (663)
Research and development
costs 715 984 2,912 2,373
Restructuring costs 117 - 325 -
Recovery of research and
development costs - (86) - (1,049)
Loss on sale of property,
plant and equipment 1 7 1 7
Stock based compensation 51 39 148 128
Depreciation and amortization 849 840 2,487 2,558
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22,793 30,130 75,314 98,723
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Loss Before Undernoted (2,271) (1,827) (6,206) (489)
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Other Income (Expenses)
Interest income 111 420 422 526
Interest expense - long term (124) (161) (387) (517)
Interest expense - short term (56) (14) (163) (38)
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(69) 245 (128) (29)
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Loss Before Income Taxes,
Non-Controlling Interest and
Discontinued Operation ($2,340) ($1,582) ($6,334) ($518)
Recovery of income taxes 217 709 1,155 405
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Loss Before Non-Controlling
Interest and Discontinued
Operation ($2,123) ($873) ($5,179) ($113)
Non-controlling interest (108) 102 367 (362)
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Loss from Continuing
Operations ($2,231) ($771) ($4,812) ($475)
Earnings from discontinued
operation, net of income
taxes - 13,992 - 15,759
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Net (Loss)/Earnings ($2,231) $13,221 ($4,812) $15,284
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Basic and Diluted Net Loss
per Share from Continuing
Operations ($0.24) ($0.06) ($0.52) ($0.04)
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Basic and Diluted Net
(Loss)/Earnings per Share ($0.24) $1.06 ($0.52) $1.22
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GLENDALE INTERNATIONAL CORP.
Interim Consolidated Statements of Cash Flows
(in thousands of dollars)
(prepared without audit)
-------------------------------------------------------------------------
Three Months Ended Nine Months Ended
August 29, August 31, August 29, August 31,
2008 2007 2008 2007
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Operating Activities
Net loss from continuing
operations ($2,231) ($771) ($4,812) ($475)
Items not affecting cash
Amortization of deferred
gain (217) (224) (652) (663)
Depreciation and
amortization 849 840 2,487 2,558
Stock based compensation
expense 51 39 148 128
Future income taxes (306) 1,609 (1,143) 1,217
Scientific research and
development tax credits - (814) - (814)
Non-controlling interest 108 (102) (367) 362
Loss on sale of property,
plant and equipment 1 7 1 7
Increase in accrued benefit
asset (97) - (189) -
Effect of exchange rates on
foreign currency denominated
Canadian debt 273 (19) 245 (237)
Changes in non-cash operating
working capital 2,093 (396) (2,603) (2,241)
-------------------------------------------------------------------------
524 169 (6,885) (158)
Discontinued operation - (5,879) - (1,237)
Investing Activities
Purchase of property, plant and
equipment (172) (1,187) (739) (3,275)
Proceeds on sale of property,
plant and equipment - 8 - 8
Restricted cash - (2,210) 201 (2,210)
Acquisition of Filtran
Microcircuits Inc. - - (1,462) -
Share purchase financing 55 - 166 -
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(117) (3,389) (1,834) (5,477)
Discontinued operation - 28,388 - 26,464
Financing Activities
(Decrease)/increase in bank
indebtedness (590) - 2,077 (597)
Proceeds from capital
expenditure facility - 1,054 501 2,115
Repayment of long-term debt
and capital leases (347) (243) (984) (735)
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(937) 811 1,594 783
Effect of foreign exchange
rates on cash 32 271 90 (13)
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(Decrease)/increase in cash (498) 20,371 (7,035) 20,362
Cash, Beginning of Period 11,006 2,339 17,543 2,348
-------------------------------------------------------------------------
Cash, End of Period $10,508 $22,710 $10,508 $22,710
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Supplemental cash flow
information:
Payments for interest $175 $172 $544 $454
Payments for income taxes $75 - $77 $30
Refunds for income taxes $313 $611 $1,518 $611
GLENDALE INTERNATIONAL CORP.
Segmented Information
(in thousands of dollars)
(prepared without audit)
-------------------------------------------------------------------------
OPERATING SEGMENTS
-------------------------------------------------------------------------
Three Months
Ended August Recreational Nav Aids Electronics Corporate Total
29, 2008 Vehicles Office
-------------------------------------------------------------------------
Sales $4,774 - $15,748 - $20,522
Costs and expenses 6,947 - 15,427 419 22,793
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Loss before
undernoted (2,173) - 321 (419) (2,271)
Interest income - - - 111 111
Interest expense -
long term - - (124) - (124)
Interest expense -
short term - - (46) (10) (56)
Income tax recovery - - 39 178 217
Non-controlling
interest - - (108) - (108)
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Net loss ($2,173) - $82 ($140) ($2,231)
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Total and
identifiable assets $11,691 - $22,722 $31,022 $65,435
Capital expenditures $57 - $115 - $172
Depreciation and
amortization $125 - $719 $5 $849
Goodwill - - $4,887 - $4,887
Three Months Ended
August 31, 2007
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Sales $14,408 - $13,895 - $28,303
Costs and expenses 14,946 - 14,022 1,162 30,130
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Loss before
undernoted (538) - (127) (1,162) (1,827)
Interest income - - - 420 420
Interest expense -
long term - - (147) (14) (161)
Interest expense -
short term - - (6) (8) (14)
Income tax recovery - - 98 611 709
Non-controlling
interest - - 102 - 102
-------------------------------------------------------------------------
Loss from
continuing
operations (538) - (80) (153) (771)
Earnings from
discontinued
operation, net of
income taxes - 15,925 - (1,933) 13,992
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Net earnings ($538) $15,925 ($80) ($2,086) $13,221
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Total and
identifiable assets $17,941 - $24,440 $37,418 $79,799
Capital expenditures $31 - $1,156 - $1,187
Depreciation and
amortization $111 - $724 $5 $840
Goodwill - - $4,392 - $4,392
GLENDALE INTERNATIONAL CORP.
Segmented Information
(in thousands of dollars)
(prepared without audit)
-------------------------------------------------------------------------
OPERATING SEGMENTS
-------------------------------------------------------------------------
Nine Months
Ended August Recreational Nav Aids Electronics Corporate Total
29, 2008 Vehicles Office
-------------------------------------------------------------------------
Sales $23,304 - $45,804 - $69,108
Costs and expenses 27,394 - 46,100 1,820 75,314
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Loss before
undernoted (4,090) - (296) (1,820) (6,206)
Interest income - - - 422 422
Interest expense -
long term - - (387) - (387)
Interest expense -
short term - - (141) (22) (163)
Income tax recovery - - 173 982 1,155
Non-controlling
interest - - 367 - 367
-------------------------------------------------------------------------
Net loss ($4,090) - ($284) ($438) ($4,812)
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Total and
identifiable assets $11,691 - $22,722 $31,022 $65,435
Capital expenditures $228 - $511 - $739
Depreciation and
amortization $373 - $2,100 $14 $2,487
Goodwill - - $4,887 - $4,887
Nine Months Ended
August 31, 2007
-------------------------------------------------------------------------
Sales $55,165 - $43,069 - $98,234
Costs and expenses 54,817 - 41,636 2,270 98,723
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Loss before
undernoted 348 - 1,433 (2,270) (489)
Interest income - - - 526 526
Interest expense -
long term - - (413) (104) (517)
Interest expense -
short term - - (13) (25) (38)
Income tax recovery - - (365) 770 405
Non-controlling
interest - - (362) - (362)
-------------------------------------------------------------------------
Loss from continuing
operations 348 - 280 (1,103) (475)
Earnings from
discontinued
operation, net of
income taxes - 17,692 - (1,933) 15,759
-------------------------------------------------------------------------
Net earnings $348 $17,692 $280 ($3,036) $15,284
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-------------------------------------------------------------------------
Total and
identifiable
assets $17,941 - $24,440 $37,418 $79,799
Capital
expenditures $284 - $2,977 $14 $3,275
Depreciation and
amortization $329 - $2,211 $18 $2,558
Goodwill - - $4,392 - $4,392
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%SEDAR: 00002453E
Edward C. Hanna, Chief Executive Officer and Chairman, Glendale International Corp., (905) 844-2870, (905) 844-2907 fax, Email: ehanna@glendaleint.com; Brian Jennings, Chief Financial Officer, Glendale International Corp., (905) 844-2870, (905) 844-2907 fax, Email: bjennings@glendaleint.com
Copyright ? 2008 Canada Newswire Ltd. All Rights Reserved.
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