RW Packaging-2005, 3rd Quarter Results.WINNIPEG Winnipeg, city, Canada Winnipeg (wĭn`ĭpĕg), city (1991 pop. 616,790), provincial capital, SE Man., Canada, at the confluence of the Red and Assiniboine rivers. , Manitoba Manitoba (mănĭtō`bə), province (2001 pop. 1,119,583), 250,934 sq mi (650,930 sq km), including 39,215 sq mi (101,580 sq km) of water surface, W central Canada. -- RW Packaging Ltd. (TSX TSX Toronto Stock Exchange (TSE before April, 2002) TSX Transfer from Stack Pointer to Index TSX True Space Extension VENTURE:RWP RWP - Remote Write Protocol ) - (FOR THE THREE (3) AND NINE (9) MONTHS ENDED SEPTEMBER September: see month. 30, 2005) The Board of Directors announced today the Company's unaudited financial results for the three (3) and nine (9) months ended September 30, 2005. OVERALL PERFORMANCE Sales for the third quarter of 2005 rose 31.1 per cent compared to the same period during 2004, surpassing the 24.7 per cent year-over-year percentage increase reported during the previous quarter, bringing the year-to date sales increase for the nine months ended September 30, 2005 to 15.9 per cent. Domestically, sales during the quarter rose 29.3 per cent, while export sales to the U.S. increased 64.6 per cent. During the quarter, higher sales and gross margin dollars were recorded in each of the Company's four product divisions, and resulted in a 63.8 per cent sales increase at the Company's new year-old St. Albert St. Albert could refer to:
Third quarter margins expressed as a percentage improved 2.7 percentage points to 22.1 per cent compared to the second quarter of 19.4 per cent, however were still 1.7 percentage points lower than the 23.8 per cent reported during the same period last year. Gross margins expressed both, as a percentage of sales, and in overall dollars, improved each month of the quarter, and by September were 3.1 percentage points higher than the same month last year, and 7.8 percentage points higher than the gross margin reported during the fourth quarter of 2004. Year-to-date Year-to-date (YTD) The period beginning at the start of the calendar year up to the current date. , percentage margins are 20.6 per cent compared to 23.4 per cent for the same period in 2004, however percentage margins declined during the fourth quarter last year to 18.5 per cent, affected by a sharp rise in material costs in the period, reducing margins at year-end year-end also year·end n. The end of a year. adj. Occurring or done at the end of the year: a year-end audit. Noun 1. to 22.2 per cent in 2004. Management expects margins during the final quarter of 2005 to improve from the third quarter being reported on, reducing the year-over-year decline at year-end to between one-half and one percentage point. Overall gross margin dollars are expected to be 10 to 15 per cent higher than in 2004. For the year-to-date, average selling prices The average sales price of goods or commodities. Especially used in the retail sector and technology distribution. have increased approximately 5.1 per cent, while case volumes have increased approximately 10.3 per cent compared to 2004. Third quarter earnings before tax, more than doubled to $61,005 compared to the same period last year of $25,286. Net earnings for the period were $39,005 or 0.6 cents per share Cents per share The amount of a mutual fund's dividend or capital gains distributions that a shareholder will receive for each share owned. compared to the $68,686 or 1.0 cent per share reported during the third quarter last year. While operating performance and cash flow improved significantly over the same period last year, net earnings were lower due to a non-cash net gain of $43,400 reported last year resulting from a change in estimate of the Company's expected future income tax benefit, versus a non-cash expense Noun 1. non-cash expense - an expense (such as depreciation) that is not paid for in cash disbursal, disbursement, expense - amounts paid for goods and services that may be currently tax deductible (as opposed to capital expenditures) reported this year of $22,000. The improvement in operating performance resulted in a 57.2 per cent increase in cash flow from operations Cash flow from operations A firm's net cash inflow resulting directly from its regular operations (disregarding extraordinary items such as the sale of fixed assets or transaction costs associated with issuing securities), calculated as the sum of net income plus noncash expenses prior to changes in working capital for the quarter, and a 5.0 per cent increase for the year-to-date. Cash flow prior to the aforementioned a·fore·men·tioned adj. Mentioned previously. n. The one or ones mentioned previously. aforementioned Adjective mentioned before Adj. 1. changes in working capital was sufficient to meet the Company's financing obligations, as well as, investment activities, however, working capital requirements Capital requirements Financing required for the operation of a business, composed of long-term and working capital plus fixed assets. have increased as a result of the Company's growth for the quarter and year, respectively. Despite the improved financial performance, the Company's slight working capital deficiency A shortage or insufficiency. The amount by which federal Income Tax due exceeds the amount reported by the taxpayer on his or her return; also, the amount owed by a taxpayer who has not filed a return. remained virtually unchanged from year-end as a result of; both higher 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. due to an increase in working capital required, and an increase in debt repayment obligations. Management expects cash flow from operations to continue improving through the remainder of 2005 and be sufficient to discharge its obligations, as well as, result in further de-leveraging of the Company's balance sheet overall. Looking ahead, management expects sales growth during the final quarter to be more moderate than the 25 and 31 per cent year-over-year increases recorded in the second and current quarter, respectively. Accordingly, management is updating its sales expectations to between $10.85 and $11.25 million for 2005, an increase of 13.0 to 17.2 per cent. However, as a result of the devastating dev·as·tate tr.v. dev·as·tat·ed, dev·as·tat·ing, dev·as·tates 1. To lay waste; destroy. 2. To overwhelm; confound; stun: was devastated by the rude remark. hurricane damage to the U.S. gulf coast, in addition to high oil and natural gas prices, further price increase announcements from refiners and suppliers have been received for many of the Company's raw materials, and in general, greater business uncertainty exists regarding the supply and pricing of a number of commodities. The Company continues to monitor the affects of these events closely and has announced offsetting selling price adjustments as necessary to maintain margins. Barring any further unforeseen events, management expects earnings during the final quarter of 2005 to surpass both the current quarter being reported on, and the $12,211 loss reported during the fourth quarter last year, and result in an increase in pre-tax pre-tax adj → anterior al impuesto pre-tax adj → avant impôt(s) pre-tax adj → al lordo d'imposta and net earnings for the full year. RESULTS OF OPERATIONS The Company reported net earnings for the three (3) months ended September 30, 2005 of $39,005 (or 0.6 cents per share) on sales of $2,540,955 compared to net earnings of $68,686 (or 1.0 cent per share) on sales of $1,938,485 for the same period in 2004. Domestic sales for the period increased 29.3 per cent; resulting from a 14.2 per cent increase in comparative sales ($1,459,987 versus $1,278,938) at the Company's Winnipeg pharmaceutical facility, and a 63.8 per cent comparative increase in sales ($917,713 versus $560,360) at its one year old St. Albert location. Export sales to the U.S. for the third quarter increased 64.6 per cent ($163,255 versus $99,187). As a result, overall sales for the quarter were 31.1 per cent higher than the same period a year ago. Net earnings for the nine (9) months ended September 30, 2005 was $108,965 (or 1.6 cents per share) on sales of $8,316,468 compared to net earnings of $170,541 (or 2.5 cents per share) on sales of $7,174,948 for the same period in 2004. Domestic sales for the year-to-date have increased 15.8 per cent; resulting from a 10.0 per cent increase in comparative sales ($4,366,121 versus $3,969,765) at the Company's Winnipeg pharmaceutical facility, and a 26.9 per cent comparative increase in sales ($2,638,196 versus $2,079,560) at its St. Albert location. Export sales to the U.S. for the year-to-date have increased 16.6 per cent ($1,312,151 versus $1,125,623). As a result, overall sales for the year-to-date were 15.9 per cent higher than the same period a year ago. Gross profit for the three (3) months ended September 30, 2005 was $560,817 (or 22.1%) compared to $460,694 (or 23.8%) for the three months ended September 30, 2004, an increase in gross margin dollars of $100,123 or 21.7 per cent. The 1.7 percentage point decrease in comparative gross margin during the third quarter was primarily due to a change in product mix comparative to last year. Gross profit for the nine (9) months ended September 30, 2005 was $1,711,194 (or 20.6%) compared to $1,680,612 (or 23.4%) for the same period a year ago. The 2.8 percentage point decrease in comparative gross margin during the first three quarters of 2005 was the result of; a 3.0 percentage point increase in cost-of-goods resulting from a change in product mix, and in certain cases, selling price adjustments which were insufficient to recover higher material costs, offset by a 0.2 percentage point reduction in freight and rebate rebate, partial refund of the total price paid for goods or services. In the United States, rebates were historically given by railroads to favored shippers as a return on transportation charges. expenses. Gross margins, expressed both as a percentage and in dollars, improved consecutively each month of the third quarter, resulting in a 2.7 percentage point improvement compared to the second quarter of 2005. Warehouse, Selling and Administrative expenses were $362,511 (2004 - $317,586) for the three (3) months ended September 30, 2005 and $1,138,538 (2004 - $1,085,234) for the nine (9) months ended September 30, 2005, an increase of 14.1 and 4.9 per cent, respectively. Warehouse, Selling and Administrative expenses for the quarter and year-to-date represented 14.3 per cent (2004 - 16.4 per cent) and 13.7 per cent (2004 - 15.1 per cent) of sales, respectively. An increase in general insurance costs and public company expenses were among the primary causes for the year-to-date increase in Warehouse, Selling and Administrative expenses. Earnings before Interest, Taxes and Amortization (EBITA EBITA Earnings Before Interest Taxes Amortization ) were $198,306 compared to $143,108 in the third quarter of 2004, an increase of 38.6 per cent. Amortization expense of $68,982 (2004 - $57,404) and interest expense of $68,319 (2004 -$58,670) resulted in earnings before tax of $61,005 compared to earnings before tax of $25,286 in 2004. During the third quarter last year the Company reported a relocation RELOCATION, Scotch law, contracts. To let again to renew a lease, is called a relocation. 2. When a tenant holds over after the expiration of his lease, with the consent of his landlord, this will amount to a relocation. & disposition expense of $1,748 (2005 - NIL NIL - /nil/ 1. New Implementation of Lisp. A language intended to be the successor of MacLisp. A large Lisp, implemented mostly in VAX assembly language. A forerunner of Common LISP. ["NIL: A Perspective", Jon L. White, MACSYMA Users' Conf Proc, 1979]. 2. ) related to the closure of its Edmonton Edmonton (ĕd`məntən), city (1991 pop. 616,741), provincial capital, central Alta., Canada, on the North Saskatchewan River. The center of the largest metropolitan area in Alberta, Edmonton, known as the "Gateway to the North," is located operation and relocation to its new facility in St.Albert Albert, German churchman Albert, 1490–1545, German churchman, cardinal of the Roman Catholic Church. A member of the house of Brandenburg, he became (1514) Archbishop of Mainz. , Alberta Alberta (ălbûr`tə), province (2001 pop. 2,974,807), 255,285 sq mi (661,188 sq km), including 6,485 sq mi (16,796 sq km) of water surface, W Canada. during the year. An expense to the Company's future income tax benefit of $22,000 was recorded during the period, versus a net gain of $43,400 reported in 2004. Last year, a non-cash tax expense of $10,400 for the quarter was offset by a gain of $53,800 resulting from a change in estimate of the Company's future income tax benefit. As a result, net earnings for the third quarter were $39,005 or 0.6 cents per share compared to net earnings of $68,686 or 1.0 cent per share the year prior. For the nine (9) months ended September 30, 2005 earnings before Interest, Taxes and Amortization (EBITA) was $572,656 compared to $595,378 for the corresponding period in 2004. Management expects a year-over-year improvement in EBITA during the final quarter of 2005 to more than offset the decline in EBITA to date, and result in an overall increase in EBITA for the full year. For the nine (9) months ended September 30, 2005 amortization expense was $206,945 (2004 - $172,212) and interest expense was $195,446 (2004 - $162,876) resulting in earnings before tax of $170,265 compared to $186,941 in 2004. During the nine months ended September 30 last year, the Company reported a relocation & disposition expense of $73,349 (2005 - NIL) related to the closure of its Edmonton operation and relocation to its new facility in St. Albert, Alberta St. Albert is a city in Alberta, located northwest of Edmonton, on the Sturgeon River. It was originally settled as a French Catholic community, and is now an affluent suburb. . For the year-to-date, management recorded an expense to the Company's future income tax benefit of $61,300 (or 36.0%) compared to $16,400 (or 8.8%) in 2004, reflecting the estimated taxes Federal and state tax laws require a quarterly payment of estimated taxes due from corporations, trusts, estates, non-wage employees, and wage employees with income not subject to withholding. which would have otherwise been payable for the periods. The lower comparative expense to the Company's future income tax benefit during 2004 was the result of the aforementioned gain of $53,800 reported during the third quarter last year. Accordingly, net earnings for the nine (9) months ended September 30, 2005 were $108,965 or 1.6 cents per share compared to $170,541 or 2.5 cents per share the year prior.
RW Packaging Ltd.
Statement of Operations and Retained Earnings
---------------------------------------------
Three (3) months ended Nine (9) months ended
Sept. 30, Sept. 30, Sept. 30, Sept. 30,
2005 2004 2005 2004
Revenue $ 2,540,955 $ 1,938,485 $ 8,316,468 $ 7,174,948
Manufacturing &
Operating Costs $ 2,342,649 $ 1,795,377 $ 7,743,812 $ 6,579,570
----------- ----------- ----------- ------------
EBITA $ 198,306 $ 143,108 $ 572,656 $ 595,378
Amortization $ 68,982 $ 57,404 $ 206,945 $ 172,212
----------- ----------- ----------- ------------
EBIT $ 129,324 $ 85,704 $ 365,711 $ 423,166
Bank Charges
and Interest $ 68,319 $ 58,670 $ 195,446 $ 162,876
----------- ----------- ----------- ------------
Earnings Before
Other Items $ 61,005 $ 27,034 $ 170,265 $ 260,290
Relocation &
Disposition
Costs $ 0 $ 1,748 $ 0 $ 73,349
----------- ----------- ----------- ------------
Earnings Before
Tax $ 61,005 $ 25,286 $ 170,265 $ 186,941
Current Income
Tax $ 0 ($ 59,000) $ 0 $ 0
Future Income
Tax Benefit $ 22,000 $ 69,400 $ 61,300 $ 70,200
Change in
Estimate
of FIT $ 0 ($ 53,800) $ 0 ($ 53,800)
----------- ------------ ----------- -------------
Net Earnings for
the Period $ 39,005 $ 68,686 $ 108,965 $ 170,541
Retained Earnings,
Beginning of
Period $ 1,876,137 $ 1,749,702 $ 1,806,177 $ 1,647,847
Retained
Earnings,
End of Period $ 1,915,142 $ 1,818,388 $ 1,915,142 $ 1,818,388
Net Earnings per
Share -
Basic and Fully
diluted $ 0.006 / $ 0.010 / $ 0.016 / $ 0.025 /
share share share share
Cash Flow from
Operations $ 129,987 $ 82,690 $ 377,210 $ 359,153
(before change
in working
capital)
Shareholder's
Equity $ 3,206,677 $ 3,109,923
Shareholders
Equity
per Share $ 0.462 / $ 0.448 /
share share
Issued and
Outstanding
Common
Shares 6,934,398 6,934,398
Shares Issued 6,934,398 2005-11-08 Close $0.26 RW is GMP GMP (guanosine monophosphate): see guanine. and ISO (1) See ISO speed. (2) (International Organization for Standardization, Geneva, Switzerland, www.iso.ch) An organization that sets international standards, founded in 1946. The U.S. member body is ANSI. 9001 & 9002 registered. The Company blends and packages liquid and powder private brand consumer products for major retailers and national brand marketers 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. . E-mail inquiries may be sent to rwp@rwpackaging.com. Additional information relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc the Company is available online at www.sedar.com or the Company's website at www.rwpackaging.com. The TSX Venture Exchange TSX Venture Exchange Originally called the Canadian Venture Exchange (CDNX), this was a result of the merger of the Vancouver and Alberta stock exchanges. The goal of TSX Venture Exchange is to provide venture companies with effective access to capital while protecting investors. (TSX Venture) has not reviewed, and does not accept responsibility for, the adequacy or accuracy of this releas e. RW Packaging Ltd. (TSX VENTURE:RWP) |
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