Consoltex Announces Third Quarter Results.MONTREAL--(BUSINESS WIRE)--Nov. 5, 1998--CONSOLTEX(TSE See Tokyo Stock Exchange. TSE 1. See Tokyo Stock Exchange (TSE). 2. See Toronto Stock Exchange (TSE). :CTX CTX Context (Management; Tandem) CTX Centex Corporation (stock symbol) CTX Centrex CTX Cyclophosphamide CTX Corporate Trade Exchange CTX Cytoxan CTX Cholera Toxin CTX Clinical Trial Exemption .) (ME:CTX.) CONSOLTEX GROUP INC inc - /ink/ increment, i.e. increase by one. Especially used by assembly programmers, as many assembly languages have an "inc" mnemonic. Antonym: dec. . announces its results for the quarter ended September September: see month. 30, 1998. Consolidated sales during the quarter were $112.7 million versus $117.7 million in the same quarter of 1997, a decrease of 4.2 percent. In the quarter, the Company reported a loss of $2.9 million, or $0.17 per share, compared to net earnings of $2.2 million, or $0.13 per share, in the prior year. Cash flow was $2.5 million, or $0.15 per share, during the quarter as compared to $7.7 million, or $0.45 per share in the quarter ended September 30, 1997. There were a number of negative items in the quarter, the most significant of which was large foreign exchange losses. These losses, which totaled $3.8 million in the quarter, arose principally from the translation of Rafytek's net Peso working capital assets capital assets n. equipment, property, and funds owned by a business. (See: capital, capital account) to Canadian dollars Noun 1. Canadian dollar - the basic unit of money in Canada; "the Canadian dollar has the image of loon on one side of the coin" loonie dollar - the basic monetary unit in many countries; equal to 100 cents . The value of the Mexican Mexican named after or originating in Mexico. Mexican axolotl see ambystomamexicanum. Mexican beaded lizard (Heloderma horridum Peso decreased by 11 percent against the Canadian dollar from June June: see month. 30, 1998 to September 30, 1998. There is no tax relief on the majority of this exchange loss as it arises on translation of currency rather than through operations in the local country. The foreign exchange loss reduced the Company's E.P.S. by $0.22 per share in the third quarter. Excluding foreign exchange, investment tax credit refunds, utilization of unrecorded loss carryforwards Loss Carryforward An accounting technique with which a company applies net operating losses of the current year to future year's profits in order to reduce tax liability. Notes: , severence payments and non-recurring gains, Consoltex's normalized third quarter E.P.S. decreased from $0.08 per share in 1997 to $0.05 per share in 1998. Apparel Operations Third quarter sales from the Apparel Operations increased by 2.0 percent over the same period in 1997. Fashion Sector sales increased by 11.1 percent during the current quarter as compared to the same period last year. This increase is due almost entirely to growth in the Company's Home Furnishings furnishings the extra type or quantity of hair on the head, tail, ears or legs, specified for a particular breed. For example, the feathers in setters, the beard in Bearded collies, the eyebrows in Schnauzers. Division which principally sells curtaining fabrics. Strong emphasis on new product development, quality and service is resulting in excellent customer acceptance and demand for the Division's products. The Fashion Division, which continues to experience difficult market conditions as a result of the growing impact of imports of both fabrics and garments into 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. , reported a small increase in sales over the prior year's third quarter. This Division is selling less basic polyester polyester, synthetic fiber, produced by the polymerization of the product formed when an alcohol and organic acid react. The outstanding characteristic of polyesters is their ability to resist wrinkling and to spring back into shape when creased. goods and more short run, specialty fabrics at increased margins. Performance Fabrics Sector sales decreased by 3.0 percent compared to the prior year as a result of a soft market for nylon-based fabrics 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. . All other fabric segments in this sector were relatively stable compared to the prior year. Polypropylene polypropylene (pŏl'ēprō`pəlēn), plastic noted for its light weight, being less dense than water; it is a polymer of propylene. It resists moisture, oils, and solvents. Operations Sales in the Polypropylene Sector decreased by 13.9 percent compared to the same quarter in 1997. The decrease is attributable to i) a significant scaling back in the manufacturing and sale of commodity-based fabrics, such as primary carpet backing, ii) the drought drought, abnormally long period of insufficient rainfall. Drought cannot be defined in terms of inches of rainfall or number of days without rain, since it is determined by such variable factors as the distribution in time and area of precipitation during and before in the Southern United States The Southern United States—commonly referred to as the American South, Dixie, or simply the South—constitutes a large distinctive region in the southeastern and south-central United States. 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. affecting the Company's cotton bale bale 1. a package of wool in a wool pack weighing 150-250 lb depending largely on whether it is greasy or scoured. 2. a compressed bundle of hay, either about 100 lb tied with wire or twine, or large, round, untied bales, as big as a small hay stack and referred to as 'big bales'. wrap fabrics and fertilizer fertilizer, organic or inorganic material containing one or more of the nutrients—mainly nitrogen, phosphorus, and potassium, and other essential elements required for plant growth. bag product lines and iii) the effect of the devaluation devaluation, decreasing the value of one nation's currency relative to gold or the currencies of other nations. It is usually undertaken as a means of correcting a deficit in the balance of payments. of the Mexican peso on Rafytek's domestic sales. This decrease in production of commodity-based fabrics was planned for and has resulted in the Sector's fixed costs fixed costs, n.pl the costs that do not change to meet fluctuations in enrollment or in use of services (e.g., salaries, rent, business license fees, and depreciation). being allocated over a smaller production base thus increasing its fixed costs per unit produced and reducing its margins. This lost volume is expected to be recovered through increased sales in existing lines of specialty products and the introduction of new products. Nine-Month Results Sales in the current nine-month period decreased by 6.1 percent from $386.9 million in the previous year to $363.2 million as a result of increasing world competition in commodity fabrics and garments, the planned reduction in Consoltex's production and sale of commodity fabrics, lower sales volume in the first quarter due to the plant shutdowns in Canada Canada (kăn`ədə), independent nation (2001 pop. 30,007,094), 3,851,787 sq mi (9,976,128 sq km), N North America. Canada occupies all of North America N of the United States (and E of Alaska) except for Greenland and the French islands of resulting from the ice storm in January January: see month. 1998, the impact of dry weather conditions on certain of our fabric sales, and the devaluation of the Mexican peso and its effect on Rafytek's sales to the local market. These negative factors were offset, in part, by the strong sales growth in the Home Furnishings business. Net earnings for the nine months ended September 30, 1998 were $2.3 million, or $0.14 per share, compared to $8.7 million, or $0.52 per share, in the same period of 1997. This decrease in earnings is principally due to foreign exchange losses of $4.9 million, or $0.29 per share, in the nine months ended September 30, 1998 compared to a foreign exchange gain of $0.1 million, or $0.01 per share, in 1997. On a comparable basis, excluding foreign exchange, investment tax credit refunds, utilization of loss carryforwards, severance The act of dividing, or the state of being divided. The term severance has unique meanings in different branches of the law. Courts use the term in both civil and criminal litigation in two ways: first, when dividing a lawsuit into two or more parts, and second, when payments and non 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. gains, Consoltex's normalized E.P.S. increased from $0.31 per share for the nine months ended September 30, 1997 to $0.34 per share for the nine months ended September 30, 1998. OUTLOOK We are cautiously optimistic op·ti·mist n. 1. One who usually expects a favorable outcome. 2. A believer in philosophical optimism. op about the Company's results for the remainder of the year and into next year. With relatively stable polypropylene resin resin, any of a class of amorphous solids or semisolids. Resins are found in nature and are chiefly of vegetable origin. They are typically light yellow to dark brown in color; tasteless; odorless or faintly aromatic; translucent or transparent; brittle, fracturing costs, growing U.S. dollar revenue from our Mexican operations, we believe that the recent downturn Downturn The transition point between a rising, expanding economy to a falling, contracting one. downturn A decline in security prices or economic activity following a period of rising or stable prices or activity. in our Polypropylene Operations has bottomed out. We expect that our Apparel Operations will continue to grow with the introduction of new product lines, particularly in the Fashion Sector curtaining fabric business. The effect of the Asian crisis continues to be a concern to the Company. We are addressing this concern by continuing to back out of the production of basic fabrics where it is difficult for us to compete profitably. We continue to focus on styling, product development, customer service and quality to differentiate ourselves from our competitors. We have strengthened our importing capability, enhancing our ability to import fabric to better serve our customers. Furthermore, we are implementing management and structural changes which will result in the more effective use of both our existing manufacturing capacity and our existing sales and distribution network in North America. CONSOLTEX GROUP INC. is a North American North American named after North America. North American blastomycosis see North American blastomycosis. North American cattle tick see boophilusannulatus. textile company with activities divided between its Polypropylene and Apparel Operations. Consoltex is vertically integrated from the production of yarn yarn, fibers or filaments formed into a continuous strand for use in weaving textiles or for the manufacture of thread. A staple fiber, such as cotton, linen, or wool, is made into yarn by carding, combing (for fine, long staples only), drawing out into roving, then , in the Polypropylene Operations, through to weaving weaving, the art of forming a fabric by interlacing at right angles two or more sets of yarn or other material. It is one of the most ancient fundamental arts, as indicated by archaeological evidence. , dyeing Dyeing The application of color-producing agents to material, usually fibrous or film, in order to impart a degree of color permanence demanded by the projected end use. , printing, finishing and coating. The Company also conducts its own research and development and maintains its own sales, marketing and distribution network throughout North America, including major centres such as Montreal, Toronto, New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of , Los Angeles Los Angeles (lôs ăn`jələs, lŏs, ăn`jəlēz'), city (1990 pop. 3,485,398), seat of Los Angeles co., S Calif.; inc. 1850. and Mexico City Mexico City Spanish Ciudad de México City (pop., 2000: city, 8,605,239; 2003 metro. area est., 18,660,000), capital of Mexico. Located at an elevation of 7,350 ft (2,240 m), it is officially coterminous with the Federal District, which occupies 571 sq mi . Consoltex operates 12 manufacturing plants, which together employ approximately 4,400 associates. The Company is listed on the Montreal and Toronto stock exchanges Toronto Stock Exchange (TSE) Canada's largest stock exchange, trading approximately 1,200 company stocks and 33 options. under the symbol CTX. The information in this press release contains forward-looking information with respect to Consoltex Group Inc. and its subsidiaries. These statements involve risks and uncertainties that could cause actual results to differ materially from those contemplated. These risks and uncertainties include interest rates, currency fluctuations, prices of raw materials, general economic conditions and other risks detailed from time-to-time in the publicly filed disclosure documents and securities commission reports of Consoltex Group Inc. and its subsidiaries. -0-
CONSOLTEX GROUP INC.
CONSOLIDATED
STATEMENT OF EARNINGS
(in thousands of Canadian dollars, except per share amounts)
Quarter ended Nine months ended
September 30 September 30
(unaudited) 1998 1997 1998 1997
---------------------------------------------------------------
Sales - Canada $17,179 $16,880 $61,834 $63,857
- Exports from Canada 24,372 22,230 72,954 71,995
- United States 54,455 61,827 172,012 198,466
- Latin America 16,690 16,768 56,367 52,575
---------------------------------------------------------------
112,696 117,705 363,167 386,893
Cost of sales 86,564 91,128 276,779 300,608
Selling and
administrative expenses 11,520 11,933 36,285 37,448
Foreign exchange
(gain) loss 3,789 (263) 4,872 (117)
Depreciation
and amortization 4,891 4,552 15,508 13,984
---------------------------------------------------------------
Earnings from operations 5,932 10,355 29,723 34,970
Financing costs:
Interest expense, net 6,585 5,723 19,091 16,640
Factor expenses 578 560 1,611 1,762
Amortization of deferred
financing expenses 412 463 1,288 2,383
---------------------------------------------------------------
7,575 6,746 21,990 20,785
Earnings (loss)
before income taxes (1,643) 3,609 7,733 14,185
Provision for income taxes 1,254 1,360 5,394 5,455
---------------------------------------------------------------
Net earnings (loss) $(2,897) $2,249 $2,339 $8,730
---------------------------------------------------------------
---------------------------------------------------------------
EBITDA (1) $14,612 $14,644 $50,103 $48,837
Earnings (loss) per share $(0.17) $0.13 $0.14 $0.52
Average number
of shares
outstanding 17,032,717 17,025,217 17,030,217 16,863,312
(1) Operating income before interest, taxes, depreciation,
amortization and foreign exchange gains or losses.
CONSOLTEX GROUP INC.
CONSOLIDATED
BALANCE SHEET
(in thousands of Canadian dollars)
September 30 December 31
1998 1997
-------------------------------------------------------------
ASSETS (unaudited) (audited)
Current assets -
Cash $1,591 $874
Accounts receivable
and prepaid expenses 79,463 54,654
Inventories 116,018 101,411
-------------------------------------------------------------
197,072 156,939
Fixed assets, net 161,249 153,529
Goodwill 54,053 52,258
Other assets 15,231 14,072
-------------------------------------------------------------
Total assets $427,605 $376,798
-------------------------------------------------------------
-------------------------------------------------------------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities -
Bank loans and acceptances $52,191 $25,149
Accounts payable and
accrued liabilities 61,354 48,013
Income taxes payable 9,475 8,467
Current portion of long-term debt 10,588 8,753
Current portion of
long-term liabilities - 72
-------------------------------------------------------------
133,608 90,454
Long-term debt 202,297 198,645
Long-term liabilities 4,234 2,897
Deferred income taxes 14,928 14,543
Shareholders' equity -
Share capital 92,985 92,965
Retained earnings 15,163 12,824
Deferred translation adjustment (35,610) (35,530)
-------------------------------------------------------------
72,538 70,259
-------------------------------------------------------------
Total liabilities
and shareholders' equity $427,605 $376,798
-------------------------------------------------------------
-------------------------------------------------------------
CONSOLIDATED
STATEMENT OF CASH FLOWS
(unaudited)
----------------------------------------------------------------
(in thousands of
Canadian dollars) Quarter ended September 30 Nine months ended
September 30
1998 1997 1998 1997
$ $ $ $
-----------------------------------------------------------------
Funds provided by (used for) operations:
Net earnings
(loss) for
the period (2,897) 2,249 2,339 8,730
Depreciation 3,941 3,564 12,010 10,996
Amortization of
goodwill and
other assets 950 988 3,498 2,988
Amortization of
deferred
financing expense 412 463 1,288 2,383
Gain on sale of
land -- -- (745) --
Deferred income
taxes 126 471 119 1,408
-----------------------------------------------------------------
2,532 7,735 18,509 26,505
Changes in -
Accounts receivable
and prepaid
expenses 1,758 9,860 (22,350) (7,411)
Inventories (4,741) (6,317) (11,034) (7,074)
Accounts payable
and accrued
liabilities 3,107 (1) 11,501 4,830
Income taxes
payable 256 1,284 962 4,276
----------------------------------------------------------------
Net funds provided
(used) by
operations 2,912 12,561 (2,412) 21,126
Investments:
Purchase of fixed
assets, net of
disposals (7,644) (3,875) (17,446) (12,902)
Proceeds on sale
of land -- -- 1,535 --
----------------------------------------------------------------
Net funds provided
(used) before financial
transactions (4,732) 8,686 (18,323) 8,224
Financial transactions:
Repayment of long-
term debt (2,638) (2,017) (6,428) (8,706)
Increase (decrease)
in other long-term
liabilities 921 532 1,178 (233)
Issuance of share
capital -- -- 20 6,120
Share issue costs -- -- -- (959)
Increase (decrease)
in other assets 146 (1) (2,772) (2,880)
----------------------------------------------------------------
Increase (decrease)
in available funds
(6,303) 7,200 (26,325) 1,566
Net borrowings at
the beginning of
the period (44,297) (31,319) (24,275) (25,685)
----------------------------------------------------------------
Net borrowings at
the end of the
period (50,600) (24,119) (50,600) (24,119)
--------------------------------------------
--------------------------------------------
Represented by:
Cash 1,591 7,545 1,591 7,545
Bank loans and
acceptances (52,191) (31,664) (52,191) (31,664)
----------------------------------------------------------------
(50,600) (24,119) (50,600) (24,119)
--------------------------------------------
--------------------------------------------
Cash flow per
share (1) 0.15 0.45 1.09 1.57
(1) Cash flow per share is net earnings plus depreciation,
amortization, deferred income taxes and non-cash, non-recurring
items, the sum of which is divided by the average number of shares
outstanding.
|
|
||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion