2002 Annual Meeting - MAAX Inc. Achieves Its Best First-Quarter Performance Ever and Raises Its Profit Target.Business Editors -- one billion dollars in sales; and -- return on equity of 14%," concluded Mr. Poulin. At the Annual General Meeting of Shareholders of MAAX MAAX Inc. , is a company producing bathroom products, kitchen cabinets and outdoor spas. The company was founded by Placide Poulin in 1969 as Modern Fibreglass Inc.. On March 11, 2004, MAAX was sold to a group of investors comprising J.W. Childs Equity Funding III, Inc. Inc. (TSX TSX Toronto Stock Exchange (TSE before April, 2002) TSX Transfer from Stack Pointer to Index TSX True Space Extension VENTURE:MXA MXA McIntosh Xaba and Associates MXA Malcolm X Academy (Detroit, Michigan) MXA Mobile Exercise Area ), the Company announced its financial results for the first quarter of fiscal 2003 ended May 31, 2002. Keeping up the momentum gathered in the third quarter of fiscal 2002, MAAX clearly outpaced the North American North American named after North America. North American blastomycosis see North American blastomycosis. North American cattle tick see boophilusannulatus. industry in terms of internal growth, increasing its sales by 20.2%. This sales growth, coupled with optimal use of assets, led to a 44.1% improvement in comparable net income. The Company achieved sales of $161.9 million, compared with $134.7 million in the first quarter last year. This internal growth of $27.2 million, or 20.2%, stemmed stemmed adj. 1. Having the stems removed. 2. Provided with a stem or a specific type of stem. Often used in combination: stemmed goblets; long-stemmed roses. mainly from its intensified in·ten·si·fy v. in·ten·si·fied, in·ten·si·fy·ing, in·ten·si·fies v.tr. 1. To make intense or more intense: product deployment strategy across North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. and new spa contracts. In addition, income before amortization of goodwill rose 44.1% to $10.8 million or $0.45 per share, up from $7.5 million or $0.32 per share for the equivalent period of the previous fiscal year. The net profit margin reached 6.7%, up from 5.6% a year earlier. Cash flows from operations followed a similar trend, totalling $18.7 million or $0.78 per share, up from $12.4 million or $0.52 per share last year. This increase of 50.3% clearly illustrates the positive impact of the integration program. "We are very pleased with MAAX's financial performance in the first quarter and I would like to sincerely thank each and every one of our 2,800 employees for the efforts and commitment they put into the implementation of our action plan. Our sales growth was also due to our ability to optimize optimize - optimisation our existing assets, leading to higher profit margins," indicated Andre An·dré , John 1751-1780. British army officer hanged as a spy in the American Revolution for conspiring with Benedict Arnold. Heroux, the Company's President and Chief Executive Officer, adding: "We are particularly happy about the strong turnaround Turnaround A situation where a company that has had poor performance for an extended period of time experiences a positive reversal. Notes: A speculator may profit from a turnaround if he or she accurately anticipates the improvement of a poorly performing company. in the spa segment." Segmented Results For a third consecutive quarter, the bathroom and kitchen segment distinctly improved its business and financial performance. Income before income taxes and amortization of goodwill grew by 29.5% to total $15.1 million, up from $11.6 million a year earlier. Driven by the rollout of national marketing programs, sales of such products rose 15.8% to $132.8 million, compared with $114.7 million in the first quarter last year. The profit margin therefore increased to 11.3% from 10.1% a year ago. As announced by management at the end of the fiscal year ended February February: see month. 28, 2002, the spa segment achieved a solid turnaround in profitability as income before income taxes and amortization of goodwill grew by $1.4 million to reach $1.5 million, compared with $131,000 a year earlier. The profit margin soared to 5.0% from 0.7% a year ago. In addition, spa sales jumped 45.8% to $29.2 million, as opposed to less than $20 million in the corresponding quarter of the previous fiscal year. This growth came from new contracts and a steady increase in sales to existing customers. Geographical Breakdown of Sales On a geographical basis, sales in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. grew by 24.1% to total $111.4 million while Canadian Canadian (kənā`dēən), river, 906 mi (1,458 km) long, rising in NE New Mexico. and flowing E across N Texas and central Oklahoma into the Arkansas River in E Oklahoma. sales rose 15.0% to $46.1 million. Outlook Management raised MAAX's internal sales growth and net income targets for the fiscal year ending February 28, 2003. Andre Heroux indicated that the Company will achieve these objectives by: -- one billion dollars in sales; and -- return on equity of 14%," concluded Mr. Poulin. Placide Poulin Placide Poulin (born 1938 in Saint-Jules, Quebec, Canada) is a Canadian businessman. He was the founder of MAAX Inc., a company producing bathroom products, kitchen cabinets and outdoor spas. An influential man in the Beauce, Poulin is a member of the Parti libéral du Québec. , Chairman of the Board, went on to say: "I am very pleased with our first-quarter results which unequivocally prove the success of the integration plan carried out over the past two years and the improvement in profit margins in both our segments. What's more, we also plan to pursue our strategic acquisitions program in order to strengthen our presence in our existing markets, carve out Carve out Usually occurs when a company decides to IPO one of their subsidiaries or divisions. The company usually only offers a minority share to the equity market. Also known as equity carve out. new ones, and maximize our marketing synergies and especially our profitability. In areas where there are no businesses matching our criteria, or else there are none available, we will consider starting up plants to attain our geographical positioning objectives and enable MAAX to realize its full marketing potential." "A clear and dynamic strategy, a management team with an entrepreneurial en·tre·pre·neur n. A person who organizes, operates, and assumes the risk for a business venture. [French, from Old French, from entreprendre, to undertake; see enterprise. spirit, passionate employees and strong financial leverage are the best guarantees of successfully achieving our longer- term objectives, which are: -- one billion dollars in sales; and -- return on equity of 14%," concluded Mr. Poulin. Board of Directors During the Annual Meeting, the Company's shareholders elected Remi REMI Regional Economic Models, Inc Marcoux, Chairman of the Board and Chief Executive Officer of Transcontinental Group G.T.C., as a new director. Mr. Marcoux joins a solid group of directors comprised of Dennis Dennis is a male first name derived from the Greco-Roman name Dionysius meaning "servant of Dionysus", the Thracian god of wine, which is ultimately derived from the Greek Dios (Διος, "of Zeus") combined with Nysos or Nysa (Νυσα), where the Wood, Chairman of the Board, President and Chief Executive Officer of Dennis Wood Investments; Marcel Dutil Marcel Dutil (born 1942 in St-Georges-de-Beauce, Canada) is a Canadian businessman. In 1963, he began working at Canam Steel Works, a company founded by his father Roger Dutil in 1960. In 1973, he became CEO of his father company know known as the Canam Manac Group. , President and Chief Executive Officer of Canam Manac Group; Raymond Garneau Raymond Garneau (born January 3 1935) is a Canadian businessman and politician. Early life Born in Plessisville, Quebec (located 30km from Victoriaville, Quebec), the son of Daniel Garneau and Valérie Gosselin, he received a Master's degree in Commercial Sciences from , Chairman of the Board of Industrial-Alliance Life Insurance Company; Louis Garneau Louis Garneau, OC, CQ (born August 9, 1958, Quebec City, Quebec) is a Canadian road racing and track cyclist and cyclewear manufacturer. He is probably best known for putting his arm around Elizabeth II (breaking royal protocol) and having his photo taken. , President and Designer of Louis Garneau Sports; Jean-Guy Paquet Jean-Guy Paquet (born January 5, 1938) is a Canadian scientist, businessman, and former rector of Université Laval. Born in Montmagny, Quebec, he received a Doctor of Electrical Engineering from Université Laval in 1963. , President and Chief Executive Officer of the National Optics optics, scientific study of light. Physical optics is concerned with the genesis, nature, and properties of light; physiological optics with the part light plays in vision; and geometrical optics with the reflection and refraction of light as encountered in the study Institute; and four members of MAAX's senior management, namely Placide Poulin, Chairman of the Board and Executive Committee; Andre Heroux, President and Chief Executive Officer; Marie-France Poulin Poulin is a surname, and may refer to:
vice-chairman vice irreg n → vice-président(e) vice-chairman vice- n of the Board and Executive Vice-President vice president or vice-pres·i·dent n. Abbr. VP 1. An officer ranking next below a president, usually empowered to assume the president's duties under conditions such as absence, illness, or death. 2. , Sales; and Richard Garneau Richard Garneau, C.M., C.Q. (born 15 July 1930 in Quebec City) is a Canadian sports journalist and writer in Quebec. He is best known as the host of La Soirée du hockey, the very popular ice hockey television show in Quebec. , Executive Vice-President and Chief Financial Officer. A conference call will be webcasted simultaneously on www.q1234.com and www.maax.com at 2:30 p.m. on July July: see month. 3, 2002, and will be available subsequently at both websites. MAAX Inc. is a leading North American manufacturer of bathroom products and accessories, spas and kitchen cabinets. The Company currently employs 2,800 people in its 23 plants and seven distribution centres across Canada Across Canada was an afternoon program that formerly aired on The Weather Network. The segment ran from early 1999 until mid 2002. The show ran from 3:00PM ET until 7:00 PM ET. , the United States and Europe Europe (y  r`əp), 6th largest continent, c.4,000,000 sq mi (10,360,000 sq km) including adjacent islands (1992 est. pop. 512,000,000). . Its common shares
are traded on the Toronto Stock Exchange Toronto Stock Exchange (TSE)Canada's largest stock exchange, trading approximately 1,200 company stocks and 33 options. under the ticker symbol Ticker Symbol An arrangement of characters (usually letters) representing a particular security listed on an exchange or otherwise traded publicly. When a company issues securities to the public marketplace, it selects an available ticker symbol for its securities which investors MXA. PROSPECTIVE FINANCIAL INFORMATION This press release includes forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. that involve a number of risks and uncertainties. The Company would like to point out that its results, or the measures it adopts, could differ materially from those indicated or underlying these statements, or could have an impact on the realization (specification) realization - A UML semantic relationship between a classifier that specifies a contract and another classifier that guarantees to carry it out. [Handout by Mr. David Gillibrand]. of a particular financial projection projection, in psychology: see defense mechanism. See rear-projection TV, front-projection TV and LCD panel. (theory) projection - In domain theory, a function, f, which is (a) idempotent, i.e. .
MAAX INC.
CONSOLIDATED BALANCE SHEETS
(in thousands of dollars)
----------------------------------------------------------------------
May 31, February 28,
2002 2002
(Unaudited)
----------------------------------------------------------------------
Assets
Current assets:
Cash $- $1,298
Accounts receivable 95,411 80,583
Inventories 71,133 66,134
Income taxes recoverable 1,801 -
Prepaid expenses 3,631 4,194
Future income taxes 2,679 3,259
----------------------------------------------------------------------
174,655 155,468
Fixed assets 128,060 129,646
Goodwill 125,385 127,389
Other assets 2,935 3,090
Future income taxes 3,591 5,648
----------------------------------------------------------------------
$434,626 $421,241
----------------------------------------------------------------------
----------------------------------------------------------------------
Liabilities and Shareholders' Equity
Current liabilities:
Bank overdrafts $1,576 $-
Bank loans 3,882 4,404
Accounts payables and accrued liabilities 64,045 53,128
Income taxes payable - 1,934
Current portion of long-term debt 3,888 1,513
----------------------------------------------------------------------
73,391 60,979
Long-term debt 70,198 77,142
Future income taxes 18,342 18,140
Shareholder's equity:
Capital stock (note 5) 146,704 144,832
Balance payable in shares
on business acquisition 480 720
Retained earnings 117,775 108,655
Cumulative translation adjustment 7,736 10,773
----------------------------------------------------------------------
272,695 264,980
----------------------------------------------------------------------
$434,626 $421,241
----------------------------------------------------------------------
----------------------------------------------------------------------
MAAX INC.
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(in thousands of dollars except per share data)
----------------------------------------------------------------------
Three months ended
May 31,
2002 2001
Sales $161,919 $134,665
Expenses:
Operating 136,067 115,510
Research and development 790 922
Financial expenses 3,936 2,233
Amortization 4,614 4,244
----------------------------------------------------------------------
145,407 122,909
----------------------------------------------------------------------
Income before income taxes
and amortization of goodwill 16,512 11,756
Income taxes 5,715 4,263
----------------------------------------------------------------------
Income before amortization of goodwill 10,797 7,493
Amortization of goodwill, net of income taxes - 703
----------------------------------------------------------------------
Net income $10,797 $6,790
----------------------------------------------------------------------
Earnings per share - basic (note 4):
Before amortization of goodwill $0.45 $0.32
Net income $0.45 $0.29
Earnings per share - diluted (note 4):
Before amortization of goodwill $0.44 $0.31
Net income $0.44 $0.28
----------------------------------------------------------------------
----------------------------------------------------------------------
MAAX INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)
(in thousands of dollars except amount per share)
----------------------------------------------------------------------
Three months ended
May 31,
2002 2001
----------------------------------------------------------------------
Cash provided by (used in):
Operations:
Net income $10,797 $6,790
Items not affecting cash:
Amortization 4,614 4,244
Amortization of goodwill - 865
Amortization of financial expenses 153 112
Future income taxes 3,112 411
----------------------------------------------------------------------
Operating cash flows 18,676 12,422
Changes in non-cash operating working capital (15,343) (9,489)
----------------------------------------------------------------------
3,333 2,933
Financing:
Increase (decrease) of bank loans (538) 713
Increase in long-term debt - 3,627
Repayment of long-term debt (1,295) (2,473)
Proceeds of issuance of shares (note 5) 1,632 -
Interests, net of income
taxes from shares purchase loan 4 -
Dividends paid (1,681) (1,665)
----------------------------------------------------------------------
(1,878) 202
Investments:
Additions to fixed assets (4,037) (5,627)
Proceeds from disposal of fixed assets 14 1,193
Goodwill (40) -
Other assets (145) (111)
----------------------------------------------------------------------
(4,208) (4,545)
----------------------------------------------------------------------
----------------------------------------------------------------------
Decrease in cash (2,753) (1,410)
Translation adjustment on cash
denominated in foreign currencies (121) 63
Cash (bank overdrafts), beginning of period 1,298 (644)
----------------------------------------------------------------------
Bank overdrafts, end of period $(1,576) $(1,991)
----------------------------------------------------------------------
----------------------------------------------------------------------
SEGMENTED INFORMATION:
Additions to fixed assets and goodwill:
Bathroom and kitchen $3,825 $4,263
Spas 252 1,364
----------------------------------------------------------------------
$4,077 $5,627
----------------------------------------------------------------------
----------------------------------------------------------------------
MAAX INC.
CONSOLIDATED STATEMENTS OF RETAINED EARNINGS (unaudited)
(in thousands of dollars)
----------------------------------------------------------------------
Three months ended
May 31,
2002 2001
----------------------------------------------------------------------
Retained earnings, beginning of period $108,655 $90,230
Net income 10,797 6,790
Interest, net of income taxes
from shares purchase loan 4 -
Dividends (1,681) (1,665)
----------------------------------------------------------------------
Retained earnings, end of period $117,775 $95,355
----------------------------------------------------------------------
----------------------------------------------------------------------
SEGMENTED INFORMATION:
----------------------------------------------------------------------
Three months ended
May 31,
2002 2001
----------------------------------------------------------------------
Sales:
Bathroom and kitchen $132,800 $114,685
Spas 29,152 19,988
Intersegment sales (33) (8)
----------------------------------------------------------------------
$161,919 $134,665
----------------------------------------------------------------------
----------------------------------------------------------------------
Income before income taxes and amortization of goodwill:
Bathroom and kitchen $15,056 $11,625
Spas 1,456 131
----------------------------------------------------------------------
$16,512 $11,756
----------------------------------------------------------------------
----------------------------------------------------------------------
Amortization of fixed assets and goodwill:
Bathroom and kitchen $3,856 $4,211
Spas 476 518
----------------------------------------------------------------------
$4,332 $4,729
----------------------------------------------------------------------
----------------------------------------------------------------------
MAAX INC. Notes to consolidated financial statements Consolidated Financial Statements The combined financial statements of a parent company and its subsidiaries. Notes: Because consolidated financial statements present an aggregated look at the financial position of a parent and its subsidiaries, they enable you to gauge For the three-month period ended May 31, 2002 1. Basis of Presentation The interim consolidated financial statements have been prepared by the Company in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with Canadian generally accepted accounting principles The standard accounting rules, regulations, and procedures used by companies in maintaining their financial records. Generally accepted accounting principles (GAAP) provide companies and accountants with a consistent set of guidelines that cover both broad accounting applicable to interim financial statements and follow the same accounting policies and methods in their application as the most recent annual financial statements, except for the changes in accounting policies described in note 2. In the opinion of Management, all adjustments necessary for a fair presentation are reflected in the interim consolidated financial statements. Such adjustments are of a normal and recurring re·cur intr.v. re·curred, re·cur·ring, re·curs 1. To happen, come up, or show up again or repeatedly. 2. To return to one's attention or memory. 3. To return in thought or discourse. nature. The results of operations for the interim periods are not necessarily indicative of the operating results for the full year. The interim consolidated financial statements should be read in conjunction with the audited Consolidated Financial Statements and notes thereto there·to adv. 1. To that, this, or it. 2. Archaic In addition to that; furthermore. thereto Adverb Formal 1. to that or it 2. included in the Company's Annual Report for fiscal year 2002. Certain reclassifications have been made to prior periods to conform with current reporting. 2. Changes in Accounting Policies Goodwill and other intangible assets Intangible Asset An asset that is not physical in nature. Notes: Examples are things like copyrights, patents, intellectual property, and goodwill. These are the opposite of tangible assets. On March 1, 2002, the Company prospectively adopted the new accounting recommendations published by the Canadian Institute of Chartered Accountants The Canadian Institute of Chartered Accountants (CICA) is the umbrella body for the Chartered Accountant profession in Canada and Bermuda. Membership of the CICA totals 70,000 Chartered Accountants and 8,500 students. ("CICA CICA Competition In Contracting Act of 1984 (USA) CICA Canadian Institute of Chartered Accountants CICA Competition In Contracting Act CICA Criminal Injuries Compensation Authority (UK) ") relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc goodwill and other intangible assets. Under these new rules, goodwill and other intangible assets resulting from business combinations and having an indefinite INDEFINITE. That which is undefined; uncertain. INDEFINITE, NUMBER. A number which may be increased or diminished at pleasure. 2. When a corporation is composed of an indefinite number of persons, any number of them consisting of a majority of those useful life are no longer amortized, but rather tested for impairment Impairment 1. A reduction in a company's stated capital. 2. The total capital that is less than the par value of the company's capital stock. Notes: 1. This is usually reduced because of poorly estimated losses or gains. 2. annually, in accordance with the new rules, namely by conducting an initial impairment test whereby any resulting impairment would be included in the opening retained earnings Retained Earnings The percentage of net earnings not paid out in dividends, but retained by the company to be reinvested in its core business or to pay debt. It is recorded under shareholders equity on the balance sheet. balance. Consequently, the Company is currently finalizing the calculation of the initial impairment test which will be completed by the end of the second quarter of fiscal 2003. Any adjustments will affect the retained earnings as of March 1, 2002, and there will be no restatement Restatement A revision in a company's earlier financial statements. Notes: The need for restating financial figures can result from fraud, misrepresentation, or a simple clerical error. of the comparative figures. Stock-based compensation and other stock-based payments On March 1, 2002, the Company prospectively adopted the new accounting recommendations published by the Canadian Institute of Chartered Accountants ("CICA") relating to stock-based compensation and other stock-based payments made in exchange for goods and services In economics, economic output is divided into physical goods and intangible services. Consumption of goods and services is assumed to produce utility (unless the "good" is a "bad"). It is often used when referring to a Goods and Services Tax. . The Company has chosen to continue using the intrinsic value Intrinsic Value 1. The value of a company or an asset based on an underlying perception of the value. 2. For call options, this is the difference between the underlying stock's price and the strike price. method to record the stock options granted for the benefit of senior executives and management. The adoption of the new recommendations will have no effect on the Company's consolidated balance sheet consolidated balance sheet A balance sheet in which assets and liabilities of a parent company and its controlled subsidiaries are combined, thereby presenting balance sheet items for the parent and its subsidiaries as if they were a single firm. and income for the first quarter of fiscal 2003 and for the year ending February 28, 2003. The Company has presented the required disclosures when using the intrinsic value in note 3. 3. Stock Option Purchase Plan During the quarter ended May 31, 2002, the Company granted 145,000 stock options to senior executives and management. The weighted average fair value of stock options granted in the three months ended May 31, 2002 was $7,13. The fair value of each option granted was determined using the Black-Scholes option pricing model option pricing model A mathematical formula for determining the price at which an option should trade. The model expresses the value of an option as a function of the value of the underlying asset, length of time until maturity, exercise price, yields on and the following weighted average assumptions:
-- Risk-free interest rate 5.47%
-- Expected life 8 years
-- Expected volatility 33.0%
-- Expected dividend yield $0.14
The Company has elected to account for its stock options by
measuring compensation cost for options determined under the intrinsic
value. If the stock options had been accounted for based on the fair
value based method, pro forma net income and pro forma net earnings
per share for the three months ended May 31, 2002 would have been as
follows:
As reported Pro forma
(unaudited) (unaudited)
----------------------------------------------------------------------
Net income $ 10,797 $ 10,743
----------------------------------------------------------------------
Earnings per share
Basic $ 0.45 $ 0.45
Diluted $ 0.44 $ 0.44
----------------------------------------------------------------------
The pro forma figures omit the effect of stock options granted
prior to March 1, 2002.
4. Earnings per Share
Basic and diluted earnings per share for the three months ended
May 31 were as follows :
2002 2001
(in thousands) (unaudited) (unaudited)
----------------------------------------------------------------------
Weighted average number of common
shares outstanding 23,855 23,688
Potentially dilutive effect 621 296
----------------------------------------------------------------------
Weighted average number of common
shares and dilutive common shares 24,476 23,984
----------------------------------------------------------------------
5. Capital Stock During the quarter ended May 31, 2002, the Company has issued 15,000 common shares for an amount of $240,000 in connection with the balance payable in shares on business acquisition. The Company has also issued 163,300 common shares for an amount of $1,632,000 following the exercise of stock options. 6. Stock Compensation Plan During the quarter ended May 31, 2002, the Company has established a Stock Compensation Plan for certain of its employees through a trust for purpose of private utility. The trust will purchase common shares from the capital stock of the Company. These shares shall be purchased for the benefit of the participants through annual contributions made by the Company at its own discretion. A bonus amounting to $163,599 has been declared and accounted in the results during the quarter ended May 31, 2002. The net proceed of that bonus has been used to acquire 5,000 common shares under the stock compensation plan. |
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