CFM Corporation Announces Record Sales And Earnings For The 4th Quarter And Fiscal Year 2002.Business Editors MISSISSAUGA Mississauga (mĭsĭsaw`gə), city (1991 pop. 463,388), S Ont., Canada, 12 mi (20 km) W of Toronto on Lake Ontario. A residential suburb of Toronto and a growing transportation and industrial center, it is one of Canada's fastest-growing , Ontario--(BUSINESS WIRE)--Nov. 20, 2002 CFM (Cubic Feet per Minute) The measurement of air flow. Cooling fans are rated in CFM. Corporation (TSX TSX Toronto Stock Exchange (TSE before April, 2002) TSX Transfer from Stack Pointer to Index TSX True Space Extension :CFM)("CFM") announced today its financial results for the both its fourth quarter and its fiscal year ended September September: see month. 28, 2002. Sales for the fourth quarter increased 27% to $183.0 million from $144.0 million last year with sales for the 2002 fiscal year rising 38% to $576.2 million from $416.3 million last year. Net income for the quarter increased 11% to $14.6 million from $13.1 million last year. Net income for the year rose 34% to $42.1 million from $31.4 million in 2001. Earnings per share for the quarter were $0.36, a 6% increase over $0.34 for the fourth quarter of fiscal 2001. Earnings per share for the year rose 29% to $1.06 from $0.82 in the prior year. After giving retroactive Having reference to things that happened in the past, prior to the occurrence of the act in question. A retroactive or retrospective law is one that takes away or impairs vested rights acquired under existing laws, creates new obligations, imposes new duties, or attaches a effect to the accounting change concerning the amortization of goodwill, earnings per share declined to $0.36 from $0.38 for the quarter and increased to $1.06 from $0.95 for the year. Cash flows provided by operating activities for the year increased 44% to $49.7 million from $34.4 million in the prior year. Financial Highlights --------------------------------------------------------------------- ($millions, Three months ended Year ended except per Sept. 28, Sept. 29, Sept. 28, Sept. 29, share amounts) 2002 2001 2002 2001 --------------------------------------------------------------------- Net sales 183.0 144.0 576.2 416.3 Gross profit 54.2 45.8 173.7 137.4 Net income 14.6 13.1 42.1 31.4 Earnings per share 0.36 0.34 1.06 0.82 EBITDA (see enclosed definition) 27.6 26.2 82.0 69.3 "Our business continues to expand and gain market share. 2002 was a platforming year for the Company and positions us for new profitable growth in the future. We are very focussed on improving the profitability of our barbeque operations from our experience in 2002 and achieving benefits from the streamlining of our newly acquired Keanall, Great Outdoors and Greenway operations with our other operations. We now have a powerful presence in the markets for hearth hearth symbol of home life. [Folklore: Jobes, 738] See : Domesticity and space heat, barbeque and outdoor products and water and air treatment products to sustain our growth in the future," said Colin Col´in n. 1. (Zool.) The American quail or bobwhite. The name is also applied to other related species. See Bobwhite. Adamson “Adamson” redirects here. For other uses, see Adamson (disambiguation).
The Adamson was an English car manufactured in Enfield, Middlesex, from 1912 to 1925. , Chairman and Chief Executive Officer.
Sales by Product Category
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Three months ended Year ended
Sept.28, Sept. 29, Sept. 28, Sept. 29,
($millions) 2002 2001 2002 2001
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Hearth and Heating
Products 163.4 143.0 443.2 397.6
Barbeque and
Outdoor Products 19.6 1.0 133.0 18.7
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183.0 144.0 576.2 416.3
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Sales of hearth and heating products were $163.4 million in the quarter, an increase of 14% from the prior year. Within this product category, new home hearth products and mass merchant hearth products and accessories generated significant growth. The warmer weather in September resulted in a year over year decline in retrofit ret·ro·fit v. ret·ro·fit·ted or ret·ro·fit, ret·ro·fit·ting, ret·ro·fits v.tr. 1. To provide (a jet, automobile, computer, or factory, for example) with parts, devices, or equipment not in retail product sales. On a year to date basis, the hearth and heating product category sales were $443.2 million, an increase of 11% from the prior year. Sales of barbeque and outdoor products were $19.6 million in the quarter, an increase of $18.6 million from the prior year. The significant increase is a result of end of season sales of the expanded programs in barbeque grills and barbeque accessories introduced earlier in the year. "Our sales growth has been supported by capacity in our own facilities and increased sourcing of product from factories in South Korea Korea (kôrē`ə, kə–), Korean Hanguk or Choson, region and historic country (85,049 sq mi/220,277 sq km), E Asia. , China and Mexico Mexico, city, Mexico Mexico or Mexico City, Span. Ciudad de México (Méjico), city (1990 pop. 8,236,960; 1991 met. area est. 20,899,000), central Mexico, capital and largest city of Mexico. . We have increased capacity and flexibility in our operations by partnering with other leading manufacturers and expect this will grow in future," said Jim Lutes, President and Chief Operating Officer Chief Operating Officer (COO) The officer of a firm responsible for day-to-day management, usually the president or an executive vice-president. . Gross Profit Gross margin in the quarter was 29.6% compared to 31.7% in the previous year. Gross margins in the quarter were negatively impacted by lower sales of high margin retrofit hearth products and the product mix changes toward new home fireplace fireplace Opening made in the base of a chimney to hold an open fire. The opening is framed, usually ornamentally, by a mantel (or mantelpiece). A medieval development that replaced the open central hearth for heating and cooking, the fireplace was sometimes large enough to and barbeque products which contribute a lower gross margin. Gross margins for the year were 30.1% compared to 33.0% last year reflecting the impact of lower margin barbeque sales and initial season barbeque manufacturing cost excesses, and higher sales growth in the lower margin new home segment. Expenses Selling, administrative, research and development expenses for the quarter increased to $26.7 million from $19.6 million in the previous year reflecting the consolidation for the first time of the CFM Keanall and The Great Outdoors ("TGO TGO Togo (ISO Country code) TGO Tarifverbund Ortenau GmbH (German) TGO The Great One (Wayne Gretzky) TGO Toxic Gas Ordinance TGO Total Gross Output ") expenses. As a percentage of sales, expenses increased to 14.6% from 13.6% reflecting the counter seasonal impact of fixed support costs for the barbeque and barbeque accessory accessory, in criminal law, a person who, though not present at the commission of a crime, becomes a participator in the crime either before or after the fact of commission. operations. For the fiscal year as a whole, these expenses were 15.9% slightly lower than the prior year of 16.4%. EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) A metric used to show a company's profitability, but not its cash flow. EBITDA became popular in the 1980s to show the potential profitability of leveraged buyouts, but has become Earnings before interest, taxes and amortization ("EBITDA") for the quarter were $27.6 million versus $26.2 million in the prior year. EBITDA, as a percentage of sales, declined to 15.1% from 18.2% for the quarter due to the lower gross margins and higher incremental Additional or increased growth, bulk, quantity, number, or value; enlarged. Incremental cost is additional or increased cost of an item or service apart from its actual cost. operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. reflecting the impact of additional sales of barbeque and higher incremental expenses from the newly acquired CFM Keanall and TGO operations. On a year to date basis EBITDA was $82.0 million, up 18% from the prior year. EBITDA margins for the year declined to 14.2% from 16.6% last year reflecting the impact of lower gross margins. EBITDA is defined as earnings before the taking of any deductions in respect of interest, taxes and amortization. EBITDA is presented before deductions for interest expense, tax expense and amortizations to provide financial statement users a measure of CFM's earnings available to provide for these costs. EBITDA has been determined by taking net income for the period from the Consolidated con·sol·i·date v. con·sol·i·dat·ed, con·sol·i·dat·ing, con·sol·i·dates v.tr. 1. To unite into one system or whole; combine: Statement of Operations See Income statement. and adding to it interest expense, amortization and income taxes which are disclosed dis·close tr.v. dis·closed, dis·clos·ing, dis·clos·es 1. To expose to view, as by removing a cover; uncover. 2. To make known (something heretofore kept secret). as individual line items within the Consolidated Statement of Operations as follows:
EBITDA
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For the three months ended For the year ended
---------------------------------------------------------------------
Sept. 28, Sept. 29, Sept. 28, Sept. 29,
2002 2001 2002 2001
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Net income for the
period 14,571 13,139 42,081 31,398
Amortization 3,505 2,622 13,319 10,382
Interest income (84) (87) (282) (539)
Interest expense 1,965 2,308 7,127 8,363
Income taxes 7,597 6,829 19,719 14,757
Amortization of
Goodwill (net of
tax) - 1,422 - 4,983
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EBITDA 27,554 26,233 81,964 69,344
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EBITDA is not a recognized measure for financial statement presentation under 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. generally accepted account principles ("GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). "). Non-GAAP earnings measures (such as EBITDA) do not have any standardized standardized pertaining to data that have been submitted to standardization procedures. standardized morbidity rate see morbidity rate. standardized mortality rate see mortality rate. meaning and are therefore unlikely to be comparable to similar measures presented by other issuers. Investors are encouraged to consider this earnings measure in the context of CFM's GAAP results, as provided in the attached summary financial statements. Net Income Net income for the quarter was $14.6 million versus $13.1 million in the previous year. Net income was $14.6 million in the prior year after giving retroactive effect to the accounting change concerning the amortization of goodwill. Net income for the full year was $42.1 million, up from $31.4 million in 2001 and $36.4 million in 2001 after giving retroactive effect to the accounting change for goodwill. Cash Flows Provided by Operating Activities Cash flows provided by operating activities for the quarter increased $6.3 million to $3.9 million due primarily to a lower required working capital in the quarter compared to the prior year. Cash flows provided by operating activities for the year of $49.7 million increased 44% from $34.4 million in the prior year. Net Bank Debt Net bank debt increased in the quarter from June June: see month. 29, 2002 by $9.3 million to $181.6 million due to operating requirements. Net bank debt at September 28, 2002 of $181.6 million increased in comparison with September 29, 2001 at $151.2 million, primarily due to the acquisition of Keanall, TGO and the purchase of capital assets capital assets n. equipment, property, and funds owned by a business. (See: capital, capital account) . Net bank debt is defined as outstanding external debt plus bank indebtedness INDEBTEDNESS. The state, of being in debt, without regard to the ability or inability of the party to pay the same. See 1 Story, Eq. 343; 2 Hill. Ab. 421. 2. less cash. This measure is widely accepted by the financial markets as a measure of credit availability. Net bank debt is not a recognized measure for financial statement presentation under Canadian generally accepted account principles ("GAAP"). Non-GAAP financial measures (such as net bank debt) do not have any standardized meaning and are therefore unlikely to be comparable to similar measures presented by other issuers. Investors are encouraged to consider this financial measure in the context of CFM's GAAP results, as provided in the attached summary financial statements. Weighted Average Shares Outstanding The weighted average shares outstanding increased by 2,465,000 shares to 40,595,000 as compared to 38,130,000 shares outstanding in the quarter ended September 29, 2001. The increase is primarily due to the issuance of 2,526,314 shares on January January: see month. 2, 2002 for the purchase of Keanall and the issuance of 195,366 shares on May 30, 2002 for the purchase of TGO. CFM purchased 40,100 shares during the quarter at an average price of $14.54 per share. On a year over year basis, the weighted average shares outstanding increased by 1,490,000 to 39,836,000 for the reasons noted above. CFM purchased 179,500 shares during the year at an average price of $9.48 per share. Subsequent to the year end to the date of this press release, CFM repurchased 287,800 shares at an average price of $11.64. 2003 Outlook By press release dated October October: see month. 30, 2002 CFM Corporation announced 2003 business guidance. CFM continues to expect revenues in the range of $675 to $725 million and earnings per share of $1.25 to $1.35 for the fiscal year ended September 30, 2003. The pattern of earnings in the year will vary from the experience in 2002, as outlined in our October 30, 2002 press release. "2003 will be a year for us to push forward on internal sales growth, profitability enhancement and growth in cash flow. We are in the markets we want to be in. Our challenge is to execute To run a program, which causes the computer to carry out its instructions. See executable code, instruction and EXE file. execute - execution on these opportunities," concluded Colin Adamson, Chairman and Chief Executive Officer. This press release contains forward looking statements that involve certain risks and uncertainties which could cause actual results to differ materially from future results expressed or implied Inferred from circumstances; known indirectly. In its legal application, the term implied is used in contrast with express, where the intention regarding the subject matter is explicitly and directly indicated. by such forward looking statements. Important factors that could affect these statements include, without limitation, general economic conditions, demographics The attributes of people in a particular geographic area. Used for marketing purposes, population, ethnic origins, religion, spoken language, income and age range are examples of demographic data. , consumer confidence and the level of housing starts, war and acts of terrorism terrorism, the threat or use of violence, often against the civilian population, to achieve political or social ends, to intimidate opponents, or to publicize grievances. , CFM's ability to develop new products, patent protection, weather, the seasonality of the demand for CFM's products, the seasonal buying patterns of major customers, the availability of CFM's manufacturing capacity to respond to seasonal demand, industry capacity, product liability, relationships with certain significant customers, suppliers and employees, availability of gas and gas prices mass merchant consolidation, credit and collections, supply and cost of raw materials, purchased parts and labour, costs of certain employee benefits, the inability to increase selling prices as costs increase, competition, foreign currency fluctuations and government regulation. These factors and other risks and uncertainties are discussed in the reports and disclosure documents filed by CFM with Canadian and U.S. securities regulatory authorities Noun 1. regulatory authority - a governmental agency that regulates businesses in the public interest regulatory agency administrative body, administrative unit - a unit with administrative responsibilities and commissions. Statements made in this press release are made as November November: see month. 20, 2002 and CFM disclaims any intention or obligation to update or reverse any statements made herein, whether as a result of new information, future events or otherwise. CFM is a leading vertically integrated manufacturer of home products and related accessories in 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 the United Kingdom. CFM designs, develops, manufactures and distributes a line of hearth, barbeque and outdoor products and water and air purification purification, in religion, the ceremonial removal of what the religion deems unclean. The usual agents of purification are water (as in baptism), bodily alteration (as in circumcision), and fire. products. CFM maintains an ongoing program of research and development aimed at continually con·tin·u·al adj. 1. Recurring regularly or frequently: the continual need to pay the mortgage. 2. improving the quality, design, features and efficiency of its products.
CFM CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands of dollars, unaudited)
Three Months Ended Year Ended
Sept. 28, Sept. 29, Sept. 28, Sept. 29,
2002 2001 2002 2001
Sales 182,954 144,049 576,232 416,332
Cost of sales 128,721 98,266 402,534 278,892
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Gross profit 54,233 45,783 173,698 137,440
Expenses
Selling, administrative,
research and development 26,679 19,550 91,734 68,096
Amortization 3,505 2,622 13,319 10,382
Interest income (84) (87) (282) (539)
Interest expense 1,965 2,308 7,127 8,363
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32,065 24,393 111,898 86,302
Income before income taxes
and amortization of goodwill 22,168 21,390 61,800 51,138
Income taxes 7,597 6,829 19,719 14,757
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Income before amortization
of goodwill 14,571 14,561 42,081 36,381
Amortization of goodwill (1) 1,422 4,983
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Net income for the period 14,571 13,139 42,081 31,398
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Earnings per share before
amortization of goodwill 0.36 0.38 1.06 0.95
Earnings per share 0.36 0.34 1.06 0.82
Fully diluted earnings
per share 0.35 0.34 1.03 0.81
Average number of
shares outstanding 40,595 38,130 39,836 38,346
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(1) Net of tax of - 786 - 2,529
CFM CORPORATION
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
(In thousands of dollars, unaudited)
As at As at
Sept. 28, 2002 Sept. 29, 2001
ASSETS
Cash and cash equivalents 11,720 4,266
Accounts receivable 156,064 122,592
Income taxes recoverable - 8,421
Inventory 118,232 79,693
Prepaid and other expenses 4,123 1,985
Future income taxes 9,588 6,447
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Total current assets 299,727 223,404
Capital assets, net 116,376 94,124
Future income taxes 888 630
Other assets 6,780 5,501
Goodwill, net 232,716 172,051
Intangible assets 8,298 6,319
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Total assets 664,785 502,029
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LIABILITIES AND SHAREHOLDERS' EQUITY
Bank indebtedness 19,279 10,976
Accounts payable and accrued liabilities 79,152 49,900
Current portion of long-term debt 16,338 16,009
Current portion of note payable 14,722 -
Income taxes payable 1,370 -
Future income taxes 205 231
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Total current liabilities 131,066 77,116
Long-term debt 157,695 128,513
Note payable 4,978
Future income taxes 27,662 18,644
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Total liabilities 321,401 224,273
Minority interest 8 144
Shareholders' equity
Share capital 161,498 128,545
Retained earnings 156,501 119,942
Cumulative translation adjustment 25,377 29,125
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Total shareholders' equity 343,376 277,612
Total liabilities and shareholders' equity 664,785 502,029
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CFM CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands of dollars, unaudited)
Three Months Ended Year Ended
Sept. 28, Sept. 29, Sept. 28, Sept. 29,
2002 2001 2002 2001
Cash flows from operating
activities
Net income for the period 14,571 13,139 42,081 31,398
Add items not involving cash
Depreciation and
amortization 3,505 5,208 13,319 17,894
Future income taxes (1,268) 2,665 6,432 6,015
Minority interest (5) (9) (11) (93)
Loss / (gain) on disposal
of capital assets 8 - 144 (175)
Non-cash interest on Keanall
note payable 118 - 357 -
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16,929 21,003 62,322 55,039
Change in non-cash
working capital (12,989) (23,381) (12,646) (20,646)
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Cash flows (used in) provided
by operating activities 3,940 (2,378) 49,676 34,393
Cash flows from investing
activities
Acquisitions (1,914)(a) - (29,421)(a)(23,363)
Purchase of capital assets (4,335) (9,124) (20,854) (16,525)
Development costs (79) (1,459) (79) (1,459)
Proceeds on disposal of
capital assets 7 3 64 328
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Cash flows used in
investing activities (6,321) (10,580) (50,290) (41,019)
Cash flows from financing
activities
Repayment of non-revolving
term facility - (3,811) (11,280) (15,074)
Revolving term facility, net (591) 8,490 31,645 17,747
Bank indebtedness 15,913 4,804 3,445 3,574
Repayment of note payable (3,750)(a) - (10,000)(a) -
Repurchase of common shares (586) (1,125) (1,705) (10,537)
Options repurchased (682) (669) (4,182) (870)
Issuance of common shares 38 (24) 114 151
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Cash flows provided by (used
in) financing activities 10,342 7,665 8,037 (5,009)
Effect of foreign currency
translation on cash
and cash equivalents 328 916 31 (572)
Net increase (decrease) in cash
and cash equivalents during
the period 8,289 (4,377) 7,454 (12,207)
Cash and cash equivalents,
beginning of period 3,431 8,643 4,266 16,473
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Cash and cash equivalents,
end of period 11,720 4,266 11,720 4,266
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(a) On a year to date basis, repayment of the note payable has been
reclassified to financing activities from investing activities.
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