CFM Corporation Announces Results For 2nd Quarter Of Fiscal 2003.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)--April 30, 2003 CFM (Cubic Feet per Minute) The measurement of air flow. Cooling fans are rated in CFM. Corporation ("CFM") (TSX TSX Toronto Stock Exchange (TSE before April, 2002) TSX Transfer from Stack Pointer to Index TSX True Space Extension : CFM) announced today its financial results for the three and six months ended March 29, 2003. Sales for the second quarter increased 31% to $148 million from $113 million in the second quarter last year with sales for the six month period rising 36% to $328 million from $241 million in the corresponding period last year. Net income for the quarter decreased 30% to $4.4 million from $6.3 million in the second quarter last year. Year-to-date Year-to-date (YTD) The period beginning at the start of the calendar year up to the current date. net income of $21 million was up slightly from $20 million in the corresponding six months of the prior year. Earnings per share ("EPS (Encapsulated PostScript) A PostScript file format used to transfer a graphic image between applications and platforms. EPS files contain PostScript code as well as an optional preview image in TIFF, WMF, PICT or EPSI, the latter being an ASCII-only format. ") were $0.11 for the quarter, a decrease of $0.04 when compared to the second quarter of the prior year. EPS for the six months ended March 29, 2003 remained flat at $0.52 when compared with the first six months of fiscal 2002. -0-
Financial Highlights
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Three Months Ended Six Months Ended
($millions, except per Mar. 29, Mar. 30, Mar. 29, Mar. 30,
share amounts) 2003 2002 2003 2002
------- ------- ------- --------
Net Sales 148.4 113.1 328.3 240.8
Gross Profit 37.6 35.4 94.8 80.3
Net Income 4.4 6.3 20.9 20.2
Earnings per share 0.11 0.15 0.52 0.52
EBITDA (see enclosed
definition) 11.8 13.2 43.0 38.7
"We continued to achieve significant top line growth in our second quarter. This growth was achieved despite the negative impact that prolonged pro·long tr.v. pro·longed, pro·long·ing, pro·longs 1. To lengthen in duration; protract. 2. To lengthen in extent. severe cold winter weather in the quarter had on new home construction sales and pre-season demand for barbeque products. Unfortunately, an unusually high level of customer returns from key mass merchant retail customers late in the quarter, and additional inefficiencies and costs associated with the labour disruption disruption /dis·rup·tion/ (dis-rup´shun) a morphologic defect resulting from the extrinsic breakdown of, or interference with, a developmental process. that occurred in January January: see month. prior to reaching a new collective agreement with unionized employees at our Mississauga plants reduced our profitability. Profitability was also impacted by continuing operational inefficiencies in our barbeque operations, although we are starting to see positive trends in our efforts to remove these. We are confident that profitable growth will resume in the third quarter and believe we remain well positioned to achieve our business targets this year," 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 Six Months Ended
($millions, except per Mar. 29, Mar. 30, Mar. 29, Mar. 30,
share amounts) 2003 2002 2003 2002
------- ------- ------- --------
Hearth and Heating
Products 71.1 68.7 225.3 196.0
Barbeque and Outdoor
Products 76.1 44.4 98.1 44.8
Water Products 1.2 - 4.9 -
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148.4 113.1 328.3 240.8
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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 $11.8 million versus $13.2 million in the corresponding period in the prior year. EBITDA, as a percentage of sales, declined to 7.9% from 11.7% in the second quarter last year. On a year-to-date basis EBITDA was $43.0 million, up 11.3% from prior year. 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 For the six
months ended months ended
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Mar, 29, Mar. 30, Mar, 29, Mar. 30,
2003 2002 2003 2002
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Net income for the period 4.4 6.3 20.9 20.2
Amortization 4.2 3.3 8.3 6.3
Interest income (0.1) - (0.1) (0.1)
Interest expense 2.1 1.3 4.0 2.9
Income taxes 1.2 2.3 9.9 9.4
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EBITDA 11.8 13.2 43.0 38.7
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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. Cash Flows Provided by Operating Activities Cash flows used in operating activities in the quarter were $36.4 million, an increase of $14.3 million from the $22.1 million consumed con·sume v. con·sumed, con·sum·ing, con·sumes v.tr. 1. To take in as food; eat or drink up. See Synonyms at eat. 2. a. in the second quarter of 2002. Cash flows provided by operating activities for the six months ended March 29, 2003 were $33.6 million, a decrease of 8% from $36.6 million in the prior year. Net Bank Debt Net bank debt increased in the quarter from December December: see month. 28, 2002 by $46.6 million to $171.3 million. Net bank debt at March 29, 2003 was $171.3 million, a decrease of $10.3 million from the $181.6 million of net bank debt at September September: see month. 28, 2002. 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 in the second quarter decreased by 353,000 shares to 39,963,000 as compared to 40,316,000 shares outstanding at the end of the quarter ended March 30, 2002. The decrease is primarily due to the purchase of 725,700 shares under the Normal Course Issuer Bid offset by the issuance of 195,366 shares on May 30, 2002 for the purchase of 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 and the issuance of 77,507 shares in connection with options exercised. During the second quarter, CFM purchased 221,900 shares at an average price of $12.02. On a year-to-date basis, 685,600 shares have been purchased under the Normal Course Issuer Bid at an average price of $11.78. 2003 Outlook CFM confirms its annual business guidance previously given and continues to expect revenues in the range of $675 to $725 million and earnings per share in the range of $1.25 to $1.35 for the fiscal year ended September 27, 2003. Management Change CFM also announced that, effective today, Jim Lutes has resigned as 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. of CFM to pursue other opportunities. The Board of Directors of CFM is currently conducting a search process in order to recruit RECRUIT. A newly made soldier. a new President for CFM. In the interim period, Colin Adamson, the Chairman and Chief Executive Officer of CFM will assume the role of President, in addition to his current duties. Jim Lutes will continue to work with CFM on transitional matters over the coming months and will continue to be available to CFM as an advisor as needs arise. CFM recognizes the significant contributions Mr. Lutes has made to the development of CFM over the last six years and wishes Jim all the best as he pursues new opportunities. New Director CFM also announced the appointment of John T. Mayberry to its Board of Directors. Mr. Mayberry is currently the Chairman and Chief Executive Officer of Dofasco DOFASCO Dominion Foundry and Steel Company Inc. "We would like to welcome John Mayberry 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, consumer confidence, the level of housing starts and 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. , CFM's ability to develop new products, patent protection, weather, and related customer buying patters and manufacturing issues, industry capacity, product liability, availability of gas and gas prices mass merchant consolidation, credit and collections, supply and cost of raw materials, purchased parts and personnel, 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 detail in CFM's Annual Information Form dated February February: see month. 10, 2003 and 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 of April 30, 2003 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 hearth symbol of home life. [Folklore: Jobes, 738] See : Domesticity and space heating Space heating is the heating of a space, usually enclosed, such as a house or room. A space heater keeps the air and surroundings at a comfortable temperature for people or animals, or even plants in a greenhouse. products, barbecue barbecue [West Indian or South American], in the United States, traditionally an open-air gathering, political or social, in which meats are roasted whole over a pit of embers and food and drink are liberally enjoyed. 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 Six Months Ended
Mar. 29, Mar. 30, Mar. 29, Mar. 30,
2003 2002 2003 2002
Sales 148,403 113,055 328,314 240,821
Cost of sales 110,851 77,631 233,533 160,500
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Gross profit 37,552 35,424 94,781 80,321
Expenses
Selling, administrative,
research and development 25,756 22,208 51,745 41,668
Amortization 4,210 3,290 8,295 6,292
Interest income (100) (4) (140) (123)
Interest expense on long
term debt 2,034 1,282 4,022 2,933
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31,900 26,776 63,922 50,770
Income before income taxes 5,652 8,648 30,859 29,551
Income taxes 1,212 2,313 9,951 9,340
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Net income for the period 4,440 6,335 20,908 20,211
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Earnings per share 0.11 0.15 0.52 0.52
Fully diluted earnings
per share 0.11 0.15 0.51 0.51
CFM CORPORATION
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
(In thousands of dollars, unaudited)
As at Mar. 29, As at Mar. 30,
ASSETS 2003 2002
Cash and cash equivalents 1,640 18,373
Accounts receivable 108,851 78,280
Income taxes recoverable 5,630 5,777
Inventory 142,975 135,050
Prepaid and other expenses 5,045 2,791
Future income taxes 13,250 6,518
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Total current assets 277,391 246,789
Capital assets, net 112,025 109,157
Future income taxes 547 644
Other assets 5,959 7,569
Goodwill, net 222,520 213,463
Intangible assets 7,614 6,512
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Total assets 626,056 584,134
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LIABILITIES AND SHAREHOLDERS' EQUITY
Bank indebtedness 12,068 22,168
Accounts payable and accrued
liabilities 76,758 52,024
Current portion of long-term
debt 15,074 16,110
Current portion of note payable 12,378 15,000
Future income taxes (13) 2
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Total current liabilities 116,265 105,304
Long-term debt 145,780 127,233
Note payable - 12,500
Future income taxes 29,024 21,081
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Total liabilities 291,069 266,118
Minority interest 40 31
Shareholders' equity
Share capital 159,392 152,105
Retained earnings 172,046 135,554
Cumulative translation adjustment 3,509 30,326
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Total shareholders' equity 334,947 317,985
Total liabilities and shareholders'
equity 626,056 584,134
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CFM CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands of dollars, unaudited)
Three Months Ended Six Months Ended
Mar. 29, Mar. 30, Mar. 29, Mar. 30,
2003 2002 2003 2002
Cash flows from operating
activities
Net income for the period 4,440 6,335 20,908 20,211
Add items not involving
cash
Depreciation and
amortization 4,210 3,290 8,295 6,292
Future income taxes (215) 2,177 (243) 4,686
Minority interest 5 (9) 32 11
Loss (Gain) on disposal
of capital assets 1 (7) 16 (7)
Non-cash interest on
Keanall note payable 79 - 178 -
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8,520 11,786 29,186 31,193
Change in non-cash
working capital (44,897) (33,856) 4,415 5,385
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Cash flows provided by
(used in) operating
activities (36,377) (22,070) 33,601 36,578
Cash flows from investing
activities
Acquisitions (343) (10,376) (336) (10,376)
Purchase of capital assets (4,376) (6,058) (8,067) (10,951)
Development costs (12) - (305) -
Proceeds on disposal of
capital assets 24 16 42 16
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Cash flows used in
investing activities (4,707) (16,418) (8,666) (21,311)
Cash flows from financing
activities
Repayment of
non-revolving term
facility (3,750) (3,750) (13,305) (7,530)
Revolving term facility, net 45,413 38,477 1,012 6,726
Bank indebtedness (12,087) 8,599 (7,025) 6,327
Repayment of note payable (3,750) (2,500) (7,500) (2,500)
Repurchase of common shares (2,667) - (8,089) (1,119)
Options repurchased - (2,967) - (2,993)
Issuance of common shares 516 - 622 31
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Cash flows provided by
(used in) financing
activities 23,675 37,859 (34,285) (1,058)
Effect of foreign
currency translation on
cash and cash equivalents (762) 2 (730) (102)
Net increase (decrease)
in cash and cash
equivalents during the
period (18,171) (627) (10,080) 14,107
Cash and cash
equivalents, beginning of
period 19,811 19,000 11,720 4,266
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Cash and cash
equivalents, end of
period 1,640 18,373 1,640 18,373
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