Novamerican Steel Inc. Reports Strong First Quarter Earnings With 30% Increase Over First Quarter of 1999.Business/Financial Editors MONTREAL--(BUSINESS WIRE)--March 29, 2000 Novamerican Steel Inc. (Nasdaq:TONS) announced today its financial results for the first quarter ended February February: see month. 26, 2000. Highlights for the first quarter 2000 include increases in sales, gross margin and net income compared to first quarter 1999. (All amounts are in U.S. dollars).
Summary of Financial Highlights
(in thousands of U.S. dollars, except per share and tons data)
QUARTER ENDED
------------------------------------------
February 26, 2000 February 27, 1999 Change
----------------- ----------------- ------
Net sales $115,858 $96,067 20.6%
Gross margin 21.6% 21.2% 1.9%
Net income $3,019 $2,320 30.1%
Net income per share $0.31 $0.24 29.2%
Tons sold 191,324 168,477 13.6%
Tons processed 132,167 42,358 212.0%
------------------ ----------------- ------
323,491 210,835 53.4%
================== =================
First Quarter Results Net income for the first quarter increased by $0.7 million, to $3.0 million, or $0.31 per share, from $2.3 million, or $0.24 per share for the same period in 1999. Sales for the first quarter increased by $19.8 million, or 20.6%, to $115.9 million from $96.1 million for the same period in 1999. The gross profit margin Gross profit margin Gross profit divided by sales, which is equal to each sales dollar left over after paying for the cost of goods sold. gross profit margin A measure calculated by dividing gross profit by net sales. for the first quarter increased to 21.6% from 21.2% in the same quarter of 1999. Tons sold and processed in the first quarter of 2000 increased by 112,656 tons, or 53.4% to 323,491 tons from 210,835 in the first quarter 1999. Tons processed in the first quarter of 2000 increased by 89,809 tons or 212.0% to 132,167 tons from 42,358 in the first quarter 1999 due mainly to the inclusion of Nova Steel Processing Centre for the full three months in 2000 compared with one month in 1999. Novamerican Steel Inc. - 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 (unaudited)
Consolidated Statement of Operations and Comprehensive Income
(in accordance with U.S. GAAP, in thousands of U.S. dollars,
except per share and tons data)
Three months ended
-------------------------
February 26, February 27,
2000 1999
------------ ------------
$ $
Net sales 115,858 96,067
Cost of sales 90,776 75,748
------------ ------------
Gross margin 25,082 20,319
------------ ------------
Operating expenses
Plant 7,720 5,497
Delivery 3,681 3,218
Selling 3,134 2,541
Administrative and general 4,285 3,270
------------ ------------
18,820 14,526
------------ ------------
Operating income 6,262 5,793
------------ ------------
Interest expense 1,213 1,335
Unrealized loss on foreign
exchange contracts 17 768
Share in income of a joint venture (154) (116)
------------ ------------
1,076 1,987
------------ ------------
Income before income taxes and
minority interest 5,186 3,806
Income taxes 2,023 1,432
------------ ------------
Income before minority interest 3,163 2,374
Minority interest (144) (54)
------------ ------------
Net income 3,019 2,320
============ ============
Net income per share $0.31 $0.24
============ ============
Weighted average number of shares
outstanding 9,700,000 9,700,000
============ ============
Comprehensive income
Net income 3,019 2,320
Other comprehensive income 818 528
------------ ------------
3,837 2,848
============ ============
Tons sold 191,324 168,477
Tons processed 132,167 42,358
------------ ------------
323,491 210,835
============ ============
Consolidated Statement of Shareholders' Equity
(in accordance with U.S. GAAP, in thousands of U.S. dollars,
except share data)
Accumulated
Common Shares Other Total
------------- Retained Comprehensive Shareholders'
Number Amount Earnings Income Equity
------ ------ -------- ------------- -------------
$ $ $ $
Balance at
November
27, 1999 9,700,000 28,404 57,645 (3,637) 82,412
Net income 3,019 3,019
Changes in
cumulative
translation
adjustment - - - 818 818
Balance at--------- ------ -------- ------------- -------------
February
26, 2000 9,700,000 28,404 60,664 (2,819) 86,249
========= ====== ======== ============ =============
Consolidated Statement of Cash Flows
(in accordance with U.S. GAAP,
in thousands of U.S. dollars) Three months ended
-------------------------
February 26, February 27,
2000 1999
------------ ------------
$ $
Cash Flows From Operating Activities
Net income 3,019 2,320
Adjustments to reconcile net income to net
cash from (used for) operating activities
Depreciation and amortization 1,245 883
Share in income of a joint venture (154) (116)
Deferred income taxes 154 62
Minority interest 144 54
Gain on disposal of property and equipment (1) (25)
Unrealized loss on foreign
exchange contracts 17 768
Changes in working capital
Accounts receivable (889) (3,067)
Inventories (22,335) 2,303
Prepaid expenses and other (193) (442)
Accounts payable and accrued liabilities 6,221 (7,668)
Income taxes payable (2,291) (299)
------------ ------------
Net cash used for operating activities (15,063) (5,227)
------------ ------------
Cash Flows From Investing Activities
Distribution from a joint venture 188 162
Additions to property and equipment (2,959) (2,728)
Proceeds from disposal of property
and equipment 10 15
Other (9) 363
------------ ------------
Net cash used for investing activities (2,770) (2,188)
------------ ------------
Cash Flows From Financing Activities
Variation in bank indebtedness 9,107 1,351
Proceeds from long-term debt 6,592 6,388
Repayment on long-term debt (1,887) (336)
------------ ------------
Net cash from financing activities 13,812 7,403
------------ ------------
Effect of exchange rate changes on cash
and cash equivalents 69 1
------------ ------------
Net increase in cash and cash equivalents (3,952) (11)
Cash and cash equivalents,
beginning of period 5,984 223
------------ ------------
Cash and cash equivalents, end of period 2,032 212
============ ============
Supplemental Disclosure of Cash Flow Information
Interest paid 1,251 1,014
============ ============
Income taxes paid 4,238 1,986
============ ============
Consolidated Balance Sheets
(in accordance with U.S. GAAP, in thousands of U.S. dollars)
February 26, February 27,
2000 1999
------------ ------------
$ $
Assets
Current assets
Cash and cash equivalents 2,032 212
Accounts receivable 72,231 60,518
Inventories 92,319 69,343
Income taxes recoverable - 663
Prepaid expenses and other 802 1,078
------------ ------------
167,384 131,814
Investment in a joint venture 2,881 2,733
Property and equipment 54,496 49,411
Goodwill, net of accumulated amortization 11,588 11,907
Other assets 920 811
------------ ------------
237,269 196,676
============ ============
Liabilities
Current liabilities
Current portion of long-term debt 2,307 1,219
Bank indebtedness 9,550 10,389
Accounts payable and accrued liabilities 76,218 50,193
Income taxes payable 104 -
Deferred income taxes 773 1,543
------------ ------------
88,952 63,344
Long-term debt 54,441 57,581
Deferred income taxes 4,887 4,295
Minority interest 2,740 2,261
------------ ------------
151,020 127,481
------------ ------------
Shareholders' Equity
Share capital 28,404 28,404
Retained earnings 60,664 45,634
Accumulated other comprehensive income (2,819) (4,844)
------------ ------------
86,249 69,194
------------ ------------
237,269 196,675
============ ============
Operations Strong demand, particularly in December December: see month. , combined with milder winter conditions resulted in higher sales volumes for the first quarter throughout all of the Company's operations. New and Planned Facilities On February 2, 2000, the Company signed a joint venture agreement with Bethlehem Steel The Bethlehem Steel Corporation (1857–2003), based in Bethlehem, Pennsylvania, once was the second largest steel producer in the United States (after Pittsburgh, Pennsylvania-based US Steel). to build a new state-of-the-art tube manufacturing facility to produce steel tubes for use in hydroforming hy·dro·form·ing n. A process in which naphthas are converted to high-octane aromatics in the presence of hydrogen and a catalyst under pressure and heat. hy automobile automobile, self-propelled vehicle used for travel on land. The term is commonly applied to a four-wheeled vehicle designed to carry two to six passengers and a limited amount of cargo, as contrasted with a truck, which is designed primarily for the transportation of and truck parts. Management expects construction to begin in the second quarter of 2000 and tube production in the first quarter of 2001. Construction of the Philadelphia Philadelphia, ancient cities Philadelphia, name of several ancient cities. One was in Lydia, W Asia Minor (now W Turkey). At the foot of Mt. Tmolus and near the location of modern Alaşehir, it was founded in the 2d cent. B.C. tube mill and processing facility is well under way. Management expects to commence commercial operations in the third quarter of 2000. Expansions at the American American, river, 30 mi (48 km) long, rising in N central Calif. in the Sierra Nevada and flowing SW into the Sacramento River at Sacramento. The discovery of gold at Sutter's Mill (see Sutter, John Augustus) along the river in 1848 led to the California gold rush of Steel facilities of Albany Albany, town, Australia Albany (ăl`bənē), town (1996 pop. 14,590), Western Australia, SW Australia. It is a port on Princess Royal Harbour of King George Sound. The town has woolen mills and fish canneries. and Auburn Auburn (ô`bərn). 1 City (1990 pop. 33,830), Lee co., E Ala.; inc. 1839. The city's economy centers around Auburn Univ.; there is some manufacturing. 2 City (1990 pop. 24,309), seat of Androscoggin co. are in progress and are expected to be completed by the end of the third quarter of 2000. At NSPC NSPC National Standard Plumbing Code , due to increased demand, the Company has purchased a new slitter slitter see teat slitter. which is expected to be commissioned in the second quarter of 2000. Outlook Management believes that the market conditions currently prevailing will continue through the second quarter of fiscal 2000. Company Description Novamerican Steel Inc., based in Montreal Montreal (mŏn'trēôl`), Fr. Montréal (môNrāäl`), city (1991 pop. 1,017,666), S Que., Canada, on Montreal island, surrounded by St. Lawrence River and Rivière des Prairies. , 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 with twelve operating locations in Canada and nine operating locations 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. , processes and distributes carbon steel, stainless steel, stainless, n a steel that contains a minimum of 12% chromium and approximately 0.5% carbon to resist corrosion. steel and aluminum products, including carbon steel tubing for structural and automotive markets. Forward-looking for·ward-look·ing adj. Concerned with or making provision for the future: forward-looking educators; a forward-looking corporate plan. Adj. 1. (Safe Harbour) Statements Except for historical information contained herein, the matters set forth in this press release are 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 risks and uncertainties including, but not limited to, product demand, competition, regulatory reg·u·late tr.v. reg·u·lat·ed, reg·u·lat·ing, reg·u·lates 1. To control or direct according to rule, principle, or law. 2. approvals, the effect of economic conditions and technological difficulties and other risks detailed in the Company's filings with the U.S. Securities and Exchange Commission. |
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