Sleeman Reports Fourth Quarter and Fiscal 2005 Results.GUELPH, Ontario Guelph (IPA: gwɛlf) (population 114,943[1]) is a city located in the Southwestern region of Ontario, Canada. -- Sleeman Breweries Sleeman Breweries Ltd. operates in Guelph, Ontario, Canada. The company has been brewing beer since August 17, 1988, but the history of Sleeman beer goes back to 1834 when John H. Sleeman established himself as a brewer and malter, but the company ceased operations by 1933. Ltd. (TSX TSX Toronto Stock Exchange (TSE before April, 2002) TSX Transfer from Stack Pointer to Index TSX True Space Extension :ALE) today released its financial results for the fourth quarter and fiscal year ended December December: see month. 31, 2005. Fourth Quarter Financial Highlights - Net revenue was $49.6 million compared to $53.8 million for the same period last year. - Earnings before interest, taxes, depreciation and amortization Earnings before interest, taxes, depreciation and amortization (EBITDA) is a non-GAAP metric that can be used to evaluate a company's profitability.
- Net earnings were $0.5 million or $0.03 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 $3.9 million in the fourth quarter of 2004. "The fourth quarter of 2005 was a very challenging period for Sleeman due to the intense price competition the Company faced in all of its key 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. markets, especially Quebec Quebec, city, Canada Quebec, Fr. Québec, city (1991 pop. 167,517), provincial capital, S Que., Canada, at the confluence of the St. Lawrence and St. Charles rivers. ," said John Sleeman, Chairman and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. . "Our volumes and market share held up quite well in this environment. However, our revenue per hectolitre Noun 1. hectolitre - a metric unit of volume or capacity equal to 100 liters hectoliter, hl metric capacity unit - a capacity unit defined in metric terms and profitability were impacted as we offered limited time offer discounts to remain competitive with those offered by the large national brewers This is a list of member brewers of the Brewers Association. Numbered
The total cost of buying raw materials, and paying for all the factors that go into producing finished goods. cost of goods sold by $1 per hectoliter hec·to·li·ter n. Abbr. hl A metric unit of volume equal to 100 liters. Noun 1. hectoliter - a metric unit of volume or capacity equal to 100 liters hectolitre, hl in the quarter." Twelve Month Financial Review - Net revenue was $206.7 million compared to $211.5 million in the prior year. - EBITDA was $29.1 million compared to $35.9 million in the 2004 fiscal year. - Net income for the year was $8.1 million, or $0.48 per share on a diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. basis, compared to $14.4 million, or $0.87 per share on a diluted basis in 2004. - Normalized diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of were $0.60 for 2005 compared to $0.90 in 2004. Operational Highlights - Continuing with the highly successful John Sleeman Presents line of specialty beers, the Company introduced John Sleeman Presents India Pale Ale India Pale Ale, otherwise known as an IPA, is a distinct style of beer and is characterized as a sparkling pale ale with a slightly higher level of alcohol and hops that a typical Pale Ale; the hops lending it a distinct bitterness. nationally in the quarter. - Consistent with Unibroue's historical position as an innovative brewer of premium beers, Sleeman introduced two new Unibroue
Unibroue is a brewery located in Chambly, Quebec, Canada, that was started by Quebec native André Dion. It was bought by Sleeman Breweries Ltd. in 2004. product offerings into the Quebec market in the quarter, Cerezo and San Antonio San Antonio (săn ăntō`nēō, əntōn`), city (1990 pop. 935,933), seat of Bexar co., S central Tex., at the source of the San Antonio River; inc. 1837. . - In Western Canada
Western Canada, commonly referred to as the West , the Company introduced Okanagan This article is about the region in Canada. For other uses of the term, see Okanogan. The Okanagan (IPA: [o kə ˈnɑ ɡn̩]), also known as the Okanagan Valley and sometimes as Spring Winter Collections and Okanagan Spring Light to further solidify so·lid·i·fy v. so·lid·i·fied, so·lid·i·fy·ing, so·lid·i·fies v.tr. 1. To make solid, compact, or hard. 2. To make strong or united. v.intr. this brand's position as Western Canada's leading craft premium beer. - The Company introduced the "heritage series" of Sleeman packages for the US market to support Sleeman's position as Canada's Premium Beer in the large and growing US import beer market. The "heritage series" consists of Sleeman Cream Ale Cream ale is a style of beer which describes an American beer resembling a Kolsch, as well as a beer served with nitrogen. BJCP beer style According to the BJCP a Cream ale or also referred to as a "creamer," is related to American lagers. , Original Dark Amber, Porter and India Pale Ale and are available in embossed em·boss tr.v. em·bossed, em·boss·ing, em·boss·es 1. To mold or carve in relief: emboss a design on a coin. 2. amber bottles in open six pack carrier cases preferred by US craft beer drinkers. Today, we are announcing a further reorganization across the organization aimed at reducing the Company's costs by approximately $2.7 million annually; $1.7 million for the current fiscal year. The number of full time positions will be reduced by approximately 40 as a result of this initiative. A key element of this reorganization, will be the consolidation of the Ontario Ontario, city, United States Ontario, city (1990 pop. 133,179), San Bernardino co., S Calif., near Los Angeles, in a region of vineyards; inc. 1891. , Quebec and Maritimes provincial businesses under one Managing Director, Dan Fox. Sleeman will record a one-time one-time adj. 1. or one·time a. Occurring or undertaken only once: a one-time winner in 1995. b. charge of $2.0 million in the first quarter of 2006 in connection with this reorganization. Mr. Sleeman continued, "The reorganization announced today further reflects the Company's determination to reduce its cost structure. We will reduce our production, distribution and selling, general and administrative expenses to maintain our competitive position in response to continued pricing activity. We will also introduce innovative products and sales and marketing campaigns in the coming months to return the Company to its historical growth rates Growth Rates The compounded annualized rate of growth of a company's revenues, earnings, dividends, or other figures. Notes: Remember, historically high growth rates don't always mean a high rate of growth looking into the future. ." Management's Discussion and Analysis Management's discussion and analysis (MD&A) A report from management to shareholders that accompanies the firm's financial statements in the annual report. It explains the period's financial results and enables management to discuss topics that may not be apparent in the financial of Results of Operations and Financial Position: The following discussion and analysis should be read in conjunction with the financial statements for the fourth quarter of fiscal 2005 and 2004; with the MD&A in the fiscal 2004 annual report, including the section on risks and uncertainties; and with the notes to the financial statements Notes to the financial statements A detailed set of notes immediately following the financial statements in an annual report that explain and expand on the information in the financial statements. for the fourth quarter of fiscal 2005 and in the fiscal 2004 annual report. (All amounts are in 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 unless otherwise stated.) The following comments were prepared as of March 1, 2006. Additional information relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc the Company, including its Annual Information Form, is available on SEDAR SEDAR System for Electronic Document Analysis and Retrieval SEDAR Southeast Data, Assessment, and Review at www.sedar.com. Operating Results Quarterly Comparison The current fiscal quarter had 13 weeks while the prior year's fiscal quarter had 14 weeks. This represented a 7% reduction in sales days in the current quarter and explained a significant portion of the decline in sales volumes when compared to the prior year's fourth quarter. The following chart sets out the per hectolitre results(1) for the quarter based on the number of hectolitres produced and sold by the Company:
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3 months ended 3 months ended
December 31, 2005 January 1, 2005
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Net revenue $161 $173
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Cost of goods sold 77 78
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Gross margin 84 95
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Selling, general
and administrative 66 64
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EBITDA(2) 18 31
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Depreciation and amortization 7 6
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Earnings before interest
and taxes 11 25
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Interest 8 6
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Earnings before taxes 3 19
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Income taxes 2 6
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Net earnings $1 $ 13
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NET REVENUE Net revenue decreased to $49.6 million in the current quarter from $53.8 million in the prior year's quarter. The $12 per hectolitre decline in the current quarter, was the result of lower net prices on its value brands in the Quebec, Ontario and 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. markets and on its premium brands in Quebec and Ontario. Produced and sold volumes declined 1% to 309,000 hectolitres. Sapporo Sapporo (säp-pō`rō), city (1990 pop. 1,671,742), capital of Hokkaido prefecture, SW Hokkaido, Japan. It is one of Japan's most rapidly growing urban centers. volumes increased 3% to 51,000 hectolitres. Core volumes decreased 2% while industry volumes were flat in the quarter. In Eastern Canada Eastern Canada (also the Eastern provinces) is the region of Canada generally considered to be east of Manitoba, consisting of the following provinces:
In Western Canada, comparable net revenue was down 8%. Core volumes declined by 10% as value brand sales continued to be affected by tax subsidy subsidy, financial assistance granted by a government or philanthropic foundation to a person or association for the purpose of promoting an enterprise considered beneficial to the public welfare. induced induced /in·duced/ (in-dldbomacst´) 1. produced artificially. 2. produced by induction. induced, adj artificially caused to occur. induced induction. competitor pricing and provincial government bans of high alcohol large container packages in major urban centres. Net revenue per hectolitre increased due to the continuing mix shift in favour of premium brand sales. COST OF GOODS SOLD Comparable cost of goods sold decreased by 2% ($0.6 million) due primarily to a 1% decrease in produced and sold volumes and the continuing improvement in cost performance at the Company's Guelph Guelph (gwĕlf), city (1991 pop. 87,976), S Ont., Canada, on the Speed River. It is an industrial and agricultural center located in one of Canada's most densely populated regions. brewery A brewery can be a building or place that produces beer, or a business (brewing company) whose trade is the production and sale of beer. Breweries can take up multiple city blocks, or be a collection of equipment in a homebrewer's kitchen. . Comparable cost of goods sold in Eastern Canada decreased by $7 per hectolitre to $66 per hectolitre due to the aforementioned a·fore·men·tioned adj. Mentioned previously. n. The one or ones mentioned previously. aforementioned Adjective mentioned before Adj. 1. efficiencies in the Guelph facility. In Western Canada, comparable cost of goods sold increased by $16 per hectolitre due to the core volume decline and the resulting inefficiency of running the Vernon Vernon, city, Canada Vernon, city (1991 pop. 23,514), S British Columbia, Canada, near the north end of Okanagan Lake. The center of a fruit-growing and dairying area, it has packing and dehydrating plants. brewery at reduced production volumes. OTHER OPERATING ITEMS Selling, general and administrative (SG&A) expenses increased in the current quarter by $0.5 million due largely to the effects of higher premium category sales and marketing costs in British Columbia British Columbia, province (2001 pop. 3,907,738), 366,255 sq mi (948,600 sq km), including 6,976 sq mi (18,068 sq km) of water surface, W Canada. Geography . SG&A expenses in Eastern Canada were consistent with the prior year's fourth quarter level of $14.8 million. Segment management is strongly focused on reducing costs in the face of continuing price competition in both the premium and value categories. In Western Canada, SG&A expenses increased by $0.5 million. Excluding the increase in premium category marketing costs in the quarter noted above, SG&A expenses in this segment were consistent with those in the prior year. This segment's management also focused on controlling costs in this area in the face of declining value brand volumes and margins. Depreciation and amortization expense increased by $0.2 million due primarily to depreciation charges on the production assets acquired in the preceding 12 months. Interest expense increased $0.5 million in the quarter. The Company recorded an additional interest expense of $0.7 million in the quarter for the impact of the increase in the spread on its Syndicated Loan Syndicated Loan A very large loan in which a group of banks work together to provide funds for one borrower. There is usually one lead bank that takes a small percentage of the loan and syndicates the rest to other banks. Notes: Also known as a "syndicated bank facility. Facilities B and C for the 2005 fiscal year. The spread on these facilities is subject to variation based on the Company's ratio of funded debt Funded Debt Long-term debt that matures after more than one year. Notes: This is usually issued as a bond or a long-term note. See also: Bond, Debt, Maturity, Note Funded debt Debt maturing after more than one year. to EBITDA for the period. Excluding the impact of this charge, interest expense decreased by $0.2 million compared to the prior year's fourth quarter due to lower net borrowings in the current quarter. The provision for income taxes decreased by $1.3 million principally as a result of the decrease in pretax pre·tax adj. Existing before tax deductions: pretax income. pretax adj [profit] → vor (Abzug der) Steuern earnings in the fourth quarter of 2005 compared to the fourth quarter of 2004. The reduction in the provision for income taxes due to the decrease in pretax earnings was partially offset by the increase in the effective tax rate in the current quarter to 47% compared to an effective tax rate of 32% in the fourth quarter of 2004. The Company's effective tax rate for the quarter increased due to the impact of a change in Quebec's substantively sub·stan·tive adj. 1. Substantial; considerable. 2. Independent in existence or function; not subordinate. 3. Not imaginary; actual; real. 4. enacted tax rate and the impact of tax accounting differences on a reduced level of income before taxes. Year to Date Comparison The following chart sets out the per hectolitre results for the period based on the number of hectolitres produced and sold by the Company:
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12 months ended 12 months ended
December 31, 2005 January 1, 2005
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Net revenue $169 $173
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Cost of goods sold 82 86
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Gross margin 87 87
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Selling, general
and administrative 63 58
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EBITDA 24 29
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Depreciation and amortization 7 6
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Earnings before interest
and taxes 17 23
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Interest 6 5
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Earnings before taxes 11 18
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Income taxes 4 6
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Net earnings $7 $ 12
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The current period includes the twelve month results for the Unibroue business while the comparable period in 2004 includes the results for that business for the six month period from the date of acquisition of June June: see month. 30, 2004 to January January: see month. 1, 2005. Net revenue of $206.7 million for the year was 2% lower than the $211.5 million earned in fiscal 2004. Fiscal 2005 produced and sold volumes were consistent with the 1,225,000 hectolitre level in the prior year. Core volumes decreased by 4% (43,000 hectolitres) while Sapporo volumes increased by a similar number of hectolitres. Excluding the impact of the loss of the Quebec contract packaging business and the British Columbia competitor distributor strike in 2004, core volumes decreased by approximately 10,000 hectolitres. In terms of core volumes, there was a mix shift to higher priced premium product sales in 2005. Full year premium brand sales volumes increased to 53% of the Company's core sales volumes from 51% in the prior year. This core volume premium category shift combined with the increase in agency brand revenues increased net revenue per hectolitre. However, these positive factors were more than offset by the lower net pricing realized by the Company on its premium and value brand sales in the Ontario, Quebec and Alberta markets, most notably in Quebec in the last quarter of the year. Cost of goods sold were $100.6 million for the period, down from $104.3 million in 2004. Given the fact that produced and sold volumes were the same, in both years, this 4% decrease in total and per hectolitre cost of goods sold can be attributed to operational efficiencies most notably at the Guelph facility. The Guelph brewery is the Company's largest facility and capital expenditures were made to improve the efficiencies, effectiveness and economies of its brewing brewing: see beer. , packaging and logistics logistics In military science, all the activities of armed-force units in support of combat units, including transport, supply, communications, and medical aid. The term, first used by Henri Jomini, Alfred Thayer Mahan, and others, was adopted by the U.S. operations. Further investments are planned next year as well, for Guelph and the other breweries See for an up to date listing of all the breweries detailed on Wikipedia, sorted into regions. Africa
Asia
Selling, general and administrative (SG&A) expenses increased in 2005 by $5.8 million to $77 million (or $63 per hectolitre). Included in this year's total are $3 million of one-time costs the majority of which related to a restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). to eliminate approximately 40 full time positions. When these one-times costs are removed, per hectolitre SG&A costs in 2005 were $60 compared to $58 in the prior year. The increase in the per hectolitre costs resulted from inflationary in·fla·tion·ar·y adj. Of, associated with, or tending to cause inflation: inflationary prices; inflationary policies. Adj. 1. cost increases and the impacts of the Unibroue overhead costs overhead costs see fixed costs. for a full year in 2005 compared to six months in 2004. The Company's depreciation and amortization expense increased by 18% in the current year due to the effects of the Unibroue acquisition in 2004 and capital expenditures incurred over the past 12 months. Interest costs increased by $1.2 million (18%) in 2005. Approximately $0.9 million of this increase related to the increase in the average debt levels in 2005 compared to 2004 on account of the Unibroue acquisition in the third quarter of 2004. Interest costs increased by a further $0.7 million as a result of the increased interest margin incurred on the Company's loan facilities as discussed in the quarterly comparison above. Lower prevailing long term market interest rates generated reduced interest charges of approximately $0.4 million that partially offset the effects of these increases. The Company's effective tax rate for 2005 was 37% compared to 35% in 2004. The effective tax rate increased due to the impact of tax accounting differences on a reduced level of income before taxes in 2005 when compared to 2004. Financial Position The Company had a 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. balance of $9.7 million as at December 31, 2005 compared to a similar bank indebtedness balance of $9.6 million at January 1, 2005. The Company generated $15.9 million of operating cash flow Operating cash flow Earnings before depreciation minus taxes. Measures the cash generated from operations, not counting capital spending or working capital requirements. in the year which was used to fund its capital investment program and loan repayments. Trade accounts receivable accounts receivable n. the amounts of money due or owed to a business or professional by customers or clients. Generally, accounts receivable refers to the total amount due and is considered in calculating the value of a business or the business' problems in paying increased by $8 million during the year, the majority of which, $5 million, was from its principle distributor in Ontario. The Company has a minority interest in this customer and funds this customer's operations through changes in its accounts receivable balance. The Company's inventories increased by $5.2 million from January 1, 2005 levels as the Company increased its investments in returnable containers. This investment was necessary as a result of the increased production at the Chambly Chambly (shäNblē`), city (1991 pop. 15,893), S Que., Canada, on the Richelieu River, E of Montreal. Chambly Fort was built in 1665 and was a strategic point in the defense of New France against the British and the Iroquois. facility and the significant product movements between regions resulting from the success of Sleeman Original Draught (which is currently only produced in Vernon, British Columbia Vernon is a city in the south-central region of British Columbia, Canada. Named after Forbes George Vernon, a former MLA of British Columbia who helped grow the famed Coldstream Ranch, the City of Vernon was incorporated on December 30, 1892. ). Prepaid pre·pay tr.v. pre·paid, pre·pay·ing, pre·pays To pay or pay for beforehand. pre·pay  ment n. assets were at a level consistent with the prior year end
as the Company made a significant can purchase prepayment Prepayment1. The payment of a debt obligation prior to its due date. 2. The excess payment over a scheduled debt repayment amount. Notes: 1. Examples include deferred expenses such as rent and early loan repayments. 2. at the end of each year to take advantage of favourable prepayment terms offered by its can supplier. Property, plant and equipment increased by $3.6 million from the level reported at January 1, 2005 as capital expenditures amounting to $9.9 million, as compared to $15.7 million in the prior year, exceeded depreciation charges in the year. Significant capital expenditures in the year were at the Guelph facility related to the installation of a sterile sterile /ster·ile/ (ster´il) 1. unable to produce offspring. 2. aseptic. ster·ile adj. 1. Not producing or incapable of producing offspring. 2. filter to produce Sleeman Original Draught, and the installation of a carbon dioxide carbon dioxide, chemical compound, CO2, a colorless, odorless, tasteless gas that is about one and one-half times as dense as air under ordinary conditions of temperature and pressure. recovery system to allow the Company to significantly reduce its carbon dioxide usage. The only significant asset disposal in the current year related to the sale of a large portion of the Company's Calgary Calgary (kăl`gərē), city (1991 pop. 710,677), S Alta., Canada, at the confluence of the Bow and Elbow rivers. The largest city in Alberta and the fastest-growing major city in Canada, Calgary is a corporate, transportation, and financial brewing assets as part of the August 2005 restructuring. Intangible assets Intangible Asset An asset that is not physical in nature. Notes: Examples are things like copyrights, patents, intellectual property, and goodwill. These are the opposite of tangible assets. decreased by $1.7 million in 2005 as the amortization of these assets exceeded the value of additions in the year. There were no significant intangible asset additions or disposals in the year. Accounts payable increased by $6.2 million from the level at year end fiscal 2004 due to the timing of purchases and subsequent payments. Total long term debt decreased by $11.3 million from the level at the end of the 2004 fiscal year due to scheduled repayments on this debt in 2005. There were no net draws on these facilities in the year. The increase of $2.2 million in share capital related to the exercise of employee stock options of the Company during year. The increase of $0.4 million in contributed surplus in 2005 reflected the impact of employee stock options expensed in the year. Cash Flow Quarterly Comparison Operating cash flow in the current quarter decreased by $3.2 million from the level in the same period in the prior year to $4.3 million principally due to the decline in earnings in the period. Net investing activity outflows for the current quarter were $3.6 million less than the prior year due to the repayment of the final executive loan balance in the current quarter in the amount of $2.5 million and the $1.2 million reduction in net capital investments in the current quarter. The $8.1 million increase in debt repayments in the current quarter fully explained the net increase in non-operating loan financing outflows compared to the prior year's fourth quarter. As a result of these activities, there was a net cash outflow for the period of $9.7 million compared to a net outflow of $3.0 million last year. The net cash outflows in both periods were funded from the Company's operating bank loan. Year to Date Comparison During the year the Company reduced its total debt, being the combination of bank indebtedness and long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. borrowings, by $11.2 million. Operating cash flow amounted to $15.9 million compared with $13.2 million last year. The $2.7 million improvement in operating cash flow in 2005 resulted from a smaller increase in non-cash working capital of $6.7 million which was partially offset by the effect of lower earnings in 2005 compared to fiscal 2004. Investing activities used $46.7 million less in 2005. $40.3 million was used to finance the Unibroue acquisition in 2004. The remainder of the decrease in investing cash outflow in 2005 was attributable attributable emanating from or pertaining to attribute. attributable proportion see attributable risk (below). attributable risk to the $6 million decrease in capital expenditures in 2005 compared to 2004. Non-operating loan financing activities provided $41.1 million less during the current fiscal year compared to 2004. There were no proceeds drawn under the Company's loan facilities in 2005. In 2004, the Company drew $41.2 million on these facilities in 2004 principally to finance the Unibroue acquisition. The effects of the $1.1 million reduction in employee stock options proceeds in the current year were offset by the $1.2 million decrease in term loan repayments in 2005. As a result of the above noted changes in operating, investing and financing activities, there was a net cash outflow of $0.1 million in 2005 compared to a net cash outflow of $8.4 million last year. The net cash outflows in both periods were funded from the Company's operating bank loan. Outlook The Company expects that the intense price competition it has faced in key markets in the past two years will continue in 2006. The Company remains committed to returning to annual volume, revenue and profit growth in this competitive environment. Plans include improving the Company's operations and cost structures at all of its locations to ensure that it can compete profitably regardless of competitor pricing activities across Canada Across Canada was an afternoon program that formerly aired on The Weather Network. The segment ran from early 1999 until mid 2002. The show ran from 3:00PM ET until 7:00 PM ET. . In 2006, the Company will again strive to reduce its average cost of goods sold per hectolitre and control its SG&A. The Company expects to see the beneficial impacts on earnings of the March 2006 restructuring, various cost management programs and significant efficiency related capital expenditures including the installation of the sterile filtration filtration: see sewerage; water supply. Filtration The separation of solid particles from a fluidsolids suspension of which they are a part by passage of most of the fluid through a septum or membrane that retains most of the solids system in Guelph for production of Sleeman Original Draught commencing in the second quarter of 2006. Given this fact and the pricing environment mentioned above, management expects earnings in the first quarter of 2006 to be significantly lower than earnings reported in the first quarter of 2005. This assessment is based on management's expectation that the first quarter of last year benefited from less severe industry price discounting than what is expected for the first quarter of 2006 and last year's first quarter benefited from $0.9 million of insurance settlements which will not recur in the first quarter of 2006. The Company is also focused on continuing premium volume growth. It will introduce new and innovative products and continue to invest in its premium brands with distinctive sales and marketing programs in its key markets in Ontario, Quebec and Western Canada. In addition, Sleeman is a significant competitor in the value category of the Canadian beer Canada has a rich tradition of beer brewing. While the Canadian beer industry is massive and plays an important role in Canadian identity, globalization of the brewing industry has seen the major players in Canada acquired by or merged with foreign companies, notably its two market as a result of its high quality and well known stable of value brands. This category is growing and profitable in certain markets, therefore the Company will compete much more aggressively in those markets by introducing new products and sales and marketing programs to increase its value brand sales volumes and profits. The Company expects its depreciation and amortization and interest expenses for 2006 to be marginally higher than those amounts reported for the 2005 fiscal year. The Company anticipates its effective income tax rate for 2006 will be approximately 36%. In Eastern Canada, the Company will focus on reducing costs as it expects a continuation of the highly competitive market conditions its premium and value brands have faced in the past 18 months. Continued price discounting also implies there will be limited opportunities for revenue growth from price increases. As such, revenue growth in Ontario will likely come from market share growth on the sale of new premium and value products like Sleeman Original Draught, "John Sleeman Presents", Red Bull and Maclays. In Quebec, Sleeman is now the second largest seller of premium products. We will leverage this position with retailers and consumers to increase our premium brand sales. We will also drive premium brand sales with the full year sales of our recently introduced new Unibroue brands: Chambly Noire, Ephemere Raspberry raspberry, name for several thorny shrubs of the genus Rubus of the family Rosaceae (rose family) and for their fruit (see bramble). raspberry Any of many species of fruit-bearing bushes of the genus Rubus in the rose family. , San Antonio and Cerezo. The Company expects the continued growth of its Sleeman and Unibroue products in the US market. The Company continues to believe innovation, speed to market and the quality of its products are key advantages and the resources of the Company will continue to be directed to realizing the benefits in these areas. In Western Canada, we expect price discounting by competitors to continue, and as a result, we will reduce operating and SG&A costs while focusing on growing and supporting our premium brands. With strong regional brands in Shaftebury and Okanagan Spring, our premium portfolio provides a solid base for product innovation that will generate increased sales. 50% of sales occur on-premise in this segment, therefore we expect our premium on-premise business will benefit from the return of NHL NHL Non-Hodgkin's lymphoma, see there hockey  Editing of this page by unregistered or newly registered users is currently disabled due to vandalism. for all of 2006. Meanwhile, the
Company expects ongoing challenges for its Western Canadian value beer
portfolio as a result of the continued deep discounting in this
category by small brewery competitors in provinces where there are no
minimum beer prices and these competitors are supported by favourable
provincial tax treatments.The Company has capacity availability for the next 24-36 months, given the expansions and process improvements at its Guelph, Vernon and Chambly breweries in 2005. The Company anticipates reducing its capital expenditures in 2006 to approximately $9 million. Summary of Quarterly Information for the Last Eight Quarters The following chart summarizes the quarterly results for the Company for the last eight fiscal quarters:
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Q4 2005 Q3 2005 Q2 2005 Q1 2005
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Net Revenue $49,623 $59,038 $57,862 $40,151
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S,G&A Expenses $20,351 $21,535 $21,763 $13,368
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EBITDA $5,674 $9,480 $7,689 $6,249
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Net Earnings $539 $3,458 $2,490 $1,610
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EPS (Basic) $0.03 $0.21 $0.15 $0.10
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EPS (Diluted) $0.03 $0.20 $0.15 $0.10
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Q4 2004 Q3 2004 Q2 2004 Q1 2004
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Net Revenue $53,757 $60,727 $58,712 $38,280
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S,G&A Expenses $19,873 $20,705 $19,134 $11,492
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EBITDA $9,708 $10,777 $9,033 $6,425
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Net Earnings $3,904 $4,463 $3,842 $2,217
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EPS (Basic) $0.24 $0.27 $0.24 $0.14
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EPS (Diluted) $0.23 $0.27 $0.23 $0.14
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Quarterly Conference Call Notification Please note the Company's conference call with analysts and media will be webcast live at 11:00 am ET, March 2, 2006 at www.cdn-news.com and on the Sleeman investor website at www.sleeman.com. Participants will require Windows Media Player Digital jukebox software for Windows from Microsoft that plays a variety of audio, video and streaming formats including MP3, WMA, CD audio and MIDI. Starting with Version 6.2 in 1999, the Windows Media Rights Manager was added for securing copyrighted content. (TM), which can be downloaded prior to accessing the call. The number to call to participate in the teleconference is 416-406-6419 or 888-575-8232. To ensure your participation, please call in about five minutes before the start of the call. For those unable to participate, a taped rebroadcast will be available until March 9, 2006. To access the rebroadcast, please dial 416-695-5800 or 800-408-3053. The reservation number is 3177637. All shareholders and other interested parties are invited to monitor this webcast, which is being offered on a listen-only basis. Sleeman Breweries Ltd. is the leading brewer and distributor of premium beer 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 and the third largest brewing company nation-wide nation-wide adj → diffuso/a in tutto il paese adv → in tutto il paese . The Company has supplemented its core Sleeman brands, which are available in every province, with a family of exceptional regional brands. These include Okanagan Spring and Shaftebury in British Columbia and Alberta, Upper Canada Upper Canada: see Ontario. in Ontario, Unibroue and Seigneuriale in Quebec and Maritime INTEREST, MARITIME. By maritime interest is understood the profit of money lent on bottomry or respondentia, which is allowed to be greater than simple interest because the capital of the lender is put in jeopardy. Beer in Atlantic Canada. Sleeman entered the rapidly growing value price category in 1999 by acquiring the Stroh For Stroh's Beer, see . For the Stroh violin, see . Stroh is a strong spiced rum from Austria. It is available in three variants, Stroh 40, Stroh 60 and Stroh 80. portfolio of brands in Canada. The company markets and/or and/or conj. Used to indicate that either or both of the items connected by it are involved. Usage Note: And/or is widely used in legal and business writing. distributes world-class world-class adj. 1. Ranking among the foremost in the world; of an international standard of excellence; of the highest order: a world-class figure skater. 2. imported products such as Guinness, Grolsch Grolsch is a Dutch brewery founded in 1615 by Willem Neerfeldt in Groenlo. It is located today in Enschede and is owned by Royal Grolsch N.V. (Koninklijke Grolsch N.V.) (Euronext: GROL) Brief details The Grolsch brewery was founded in 1615 in Groenlo. , Samuel Samuel, two books of the Bible, originally a single work, called First and Second Samuel in modern Bibles, and First and Second Kingdoms in the Septuagint. They are considered part of "Deuteronomistic history," in which the book of Deuteronomy functions as the Adams Adams, town (1990 pop. 9,445), Berkshire co., NW Mass., in the Berkshires, on the Hoosic River; inc. 1778. Its manufactures include chemicals, textiles, and paper products. The Berkshire region attracts tourists year-round. , Scottish & Newcastle Newcastle, city, Australia Newcastle, city (1991 pop. 262,331), New South Wales, SE Australia, on the Pacific Ocean. It is the center of one of the country's largest coal-mining areas and is a large port. Coal, wool, iron and steel, and wheat are exported. (including Bulmers Strongbow The term Strongbow may refer to:
Sol (sŏl), in Roman religion, sun god. An ancient god of Mesopotamian origin, he was introduced (c.220) into Roman religion as Sol Invictus by emperor Heliogabalus. , Sapporo and Pilsner Urquell
Pilsner Urquell (-German and international title, Plzeňský prazdroj , and provides contract production for Japan's Sapporo Breweries' products. The Company's products are also available in selected international markets. Please visit our website at www.sleeman.com. Forward Looking Statements All statements in this press release that do not directly and exclusively relate to historical facts constitute 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. as of the date of this press release. These forward-looking statements include the statements concerning 2006 volume, revenue, cost and earnings expectations. These forward-looking statements are not guarantees. Although the Company believes that these forward-looking statements are based on information and assumptions which are current, reasonable and complete, these statements are necessarily subject to a number of factors that could cause actual results to vary significantly from current expectations. The statements concerning 2006 volume, revenue, cost and earnings expectations are based on the following material factors or assumptions: net revenues the Company will earn on its products in 2006 will be similar to the net revenues it earned on its products in 2005 due to continued price discounting by major competitors, no significant changes in consumer preferences, continued increasing competition from current and new competitors, the continuation of Company's current relationship with its employees including successful labour negotiations of collective bargaining agreements The contractual agreement between an employer and a Labor Union that governs wages, hours, and working conditions for employees and which can be enforced against both the employer and the union for failure to comply with its terms. , no significant changes to the 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. environment in which the Company operates, continuing performance of third party service providers, the continuing ability of the Company to attract and retain key executives and no significant supply and quality control issues with vendors. The Company cautions that this list of factors is not exhaustive. These factors and other risks and uncertainties are discussed in the Company's materials filed with the Canadian 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 from time to time, including in the Risks and Uncertainties section of the management's discussion and analysis included in the Company's 2004 Annual Report. Potential investors and other readers are urged to consider these factors carefully in evaluating these forward-looking statements and are cautioned not to place undue reliance on them. The forward-looking statements included in this news release are made only as of the date of this news release and the Company does not undertake to publicly update these forward-looking statements or material factors or assumptions to reflect new information, future events or otherwise. The Company has included in this news release non-GAAP earnings measures. Normalized earnings Normalized Earnings 1. Earnings adjusted for cyclical ups and downs in the economy. 2. On the balance sheet, earnings adjusted to remove unusual or one-time influences. Notes: An example would be removing a land sale in which a large capital gain was realized. per share, per hectolitre revenues and costs and EBITDA do not have standardized standardized pertaining to data that have been submitted to standardization procedures. standardized morbidity rate see morbidity rate. standardized mortality rate see mortality rate. meanings prescribed pre·scribe v. pre·scribed, pre·scrib·ing, pre·scribes v.tr. 1. To set down as a rule or guide; enjoin. See Synonyms at dictate. 2. To order the use of (a medicine or other treatment). by GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). and, therefore, may not be comparable to similarly titled measures presented by other publicly traded companies publicly traded company A company whose shares of common stock are held by the public and are available for purchase by investors. The shares of publicly traded firms are bought and sold on the organized exchanges or in the over-the-counter market. , nor should they be construed as alternatives to other financial measures determined in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with GAAP. The Company uses these earnings measures because it believes they provide useful information to both management and investors with respect to the operating and financial performance of the Company.
Consolidated Statements of Earnings-unaudited
for the three months ended December 31, 2005
(all amounts in '000s except per share amounts)
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3 months 3 months
ended ended
December 31, January 1, %
2005 2005 Change
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Net revenue $49,623 $53,757 -8%
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Cost of goods sold 23,598 24,176 -2%
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Gross margin 26,025 29,581 -12%
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Selling, general
and administrative 20,351 19,873 2%
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Earnings before the undernoted 5,674 9,708 -42%
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Depreciation and amortization 2,201 2,019 9%
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Earnings before interest
and taxes 3,473 7,689 -55%
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Interest expense - net 2,460 1,968 25%
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Earnings before income taxes 1,013 5,721 -82%
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Income taxes 474 1,817 -74%
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Net earnings 539 3,904 -86%
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Total Proforma HLs Reported 339,000 340,000 0%
EPS - Basic $0.03 $0.24 -86%
EPS - Diluted $0.03 $0.23 -86%
Weighted average common shares
during the period
-basic 16,727,082 16,437,499
-diluted 16,925,836 16,836,847
See accompanying notes to the consolidated financial statements.
These financial statements should be read in conjunction with the
audited annual financial statements.
Certain prior year amounts have been reclassified to conform to the
current year's presentation format.
Consolidated Statements of Earnings-unaudited
for the twelve months ended December 31, 2005
(all amounts in '000s except per share amounts)
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12 months 12 months
ended ended
December 31, January 1, %
2005 2005 Change
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Net revenue $206,674 $211,476 -2%
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Cost of goods sold 100,565 104,329 -4%
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Gross margin 106,109 107,147 -1%
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Selling, general
and administrative 77,017 71,204 8%
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Earnings before the undernoted 29,092 35,943 -19%
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Depreciation and amortization 8,461 7,172 18%
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Earnings before interest
and taxes 20,631 28,771 -28%
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Interest expense - net 7,837 6,643 18%
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Earnings before income taxes 12,794 22,128 -42%
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Income taxes 4,697 7,702 -39%
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Net earnings 8,097 14,426 -44%
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Total Proforma HLs Reported 1,380,000 1,350,000 2%
EPS - Basic $0.49 $0.89 -45%
EPS - Diluted $0.48 $0.87 -45%
Weighted average common shares
during the period
-basic 16,593,981 16,259,645
-diluted 16,849,711 16,630,069
See accompanying notes to the consolidated financial statements.
These financial statements should be read in conjunction with the
audited annual financial statements.
Certain prior year amounts have been reclassified to conform to the
current year's presentation format.
Consolidated Balance Sheets-unaudited
as at December 31, 2005
(all amounts in 000s)
December 31 2005 January 1, 2005
-------------------------------------
Assets (audited)
Current
Accounts receivable $46,939 $44,422
Inventories 44,788 39,563
Prepaid expenses 6,271 6,589
-------------------------------------
97,998 90,574
Property, plant and equipment 103,891 100,332
Long-term note receivable - 1,083
Long-term investments 3,313 3,311
Intangible assets 103,134 104,852
-------------------------------------
$308,336 $300,152
-------------------------------------
-------------------------------------
Liabilities
Current
Bank indebtedness $9,744 $ 9,634
Accounts payable and accrued
liabilities 45,349 39,146
Current portion of
long-term debt 16,794 12,043
-------------------------------------
71,887 60,823
Long-term debt 87,581 103,616
Future income taxes 16,373 13,929
-------------------------------------
175,841 178,368
-------------------------------------
-------------------------------------
Shareholder's equity
Share capital 50,520 48,353
Contributed surplus 755 308
Retained earnings 81,220 73,123
-------------------------------------
132,495 121,784
-------------------------------------
$308,336 $300,152
-------------------------------------
-------------------------------------
Consolidated Statements of Retained Earnings-unaudited
for the twelve months ended December 31, 2005
(all amounts in 000s)
12 months ended 12 months ended
December 31, 2005 January 1, 2005
---------------------------------------
Retained earnings,
beginning of period $73,123 $58,697
Net earnings for the period 8,097 14,426
---------------------------------------
Retained earnings,
end of period $81,220 $73,123
---------------------------------------
---------------------------------------
See accompanying notes to the consolidated financial statements.
These financial statements should be read in conjunction with the
audited annual financial statements.
Consolidated Statements of Cash Flows-unaudited
for the period ended December 31, 2005
(all amounts in '000s)
3 Months Ended 12 Months Ended
December 31 January 1 December 31 January 1
2005 2005 2005 2005
Net inflow (outflow)
of cash related to
the following
activities:
OPERATING
Net earnings $539 $3,904 $8,097 $14,426
Items not affecting cash
Depreciation and
amortization 2,201 2,019 8,461 7,172
Future income taxes 1,400 966 2,444 2,184
Non-cash charges in
income (401) (180) (153) (314)
Stock-based compensation
expense 112 70 447 280
Loss (gain) on disposal
of equipment 401 (5) 384 (5)
-------------------------------------------
4,252 6,774 19,680 23,743
Changes in non-cash
operating working
capital items 26 659 (3,815) (10,544)
-------------------------------------------
4,278 7,433 15,865 13,199
-------------------------------------------
INVESTING
Business Acquisitions - - - (40,265)
Proceeds from note
receivable - - 1,352 1,176
Additions to property,
plant & equipment (4,460) (6,104) (9,878) (15,735)
Additions to
intangible assets (367) (223) (1,073) (859)
Proceeds from/
(additions to) long
term investments 2,527 - 2,527 1,499
Proceeds from sale
of property, plant
& equipment 197 630 215 630
-------------------------------------------
(2,103) (5,697) (6,857) (53,554)
-------------------------------------------
FINANCING
Net increase in bank
operating loans 9,744 3,021 110 8,388
Stock options exercised 238 203 2,167 3,274
Long-term debts
- proceeds - - - 41,193
Long-term debts
- principal repayments (13,062) (4,960) (11,285) (12,500)
-------------------------------------------
(3,080) (1,736) (9,008) 40,355
-------------------------------------------
NET CASH FLOW FOR THE
PERIOD $ (905) $ - $ - $ -
CASH BALANCE,
BEGINNING OF PERIOD 905 - - -
-------------------------------------------
CASH BALANCE,
END OF PERIOD $ - $ - $ - $ -
-------------------------------------------
-------------------------------------------
Supplemental disclosures
of cash flows:
Interest paid $1,586 $2,628 $7,188 $7,433
Net income taxes paid $2,752 $637 $2,709 $7,439
See accompanying notes to the consolidated financial statements.
These financial statements should be read in conjunction with the
audited annual financial statements.
Notes to the Consolidated Financial Statements - unaudited
(in thousands of dollars, except per share amounts)
1. DESCRIPTION OF BUSINESS The Company develops, produces, imports, markets and distributes beer for sale to provincial liquor liquor /li·quor/ (lik´er) (li´kwor) pl. liquors, liquo´res [L.] 1. a liquid, especially an aqueous solution containing a medicinal substance. 2. distribution organizations and entities engaged in the food and beverage F&B is a common abbreviation in the United States and Commonwealth countries, including Hong Kong. F&B is typically the widely accepted abbreviation for "Food and Beverage," which is the sector/industry that specializes in the conceptualization, the making of, and delivery of foods. industries within Canada. The Company prepares its financial statements in accordance with accounting principles generally accepted in Canada. The Company experiences seasonal variations in sales with revenue typically being highest in the second and third quarters and lowest in the first quarter of the fiscal year. 2. SIGNIFICANT ACCOUNTING POLICIES The disclosures contained in these unaudited 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 do not include all requirements of Canadian generally accepted accounting principles The standard accounting rules, regulations, and procedures used by companies in maintaining their financial records. Generally accepted accounting principles (GAAP) provide companies and accountants with a consistent set of guidelines that cover both broad accounting for annual financial statements. These unaudited consolidated financial statements should be read in conjunction with the annual consolidated financial statements for the year ended January 1, 2005. These unaudited consolidated financial statements are based upon accounting principles consistent with those used and described in the annual consolidated financial statements. Stock-Based Compensation During the year 45,000 options were granted by the Company at an exercise price of $13.85. In 2004, the Company granted 195,000 options at an exercise price of $11.56. During the current quarter, the compensation cost that has been charged against earnings for the stock options was $112 (2004 - $70). The fair value of each 2005 option grant was estimated on the date of grant using the Black-Scholes option pricing model option pricing model A mathematical formula for determining the price at which an option should trade. The model expresses the value of an option as a function of the value of the underlying asset, length of time until maturity, exercise price, yields on with the following weighted average assumptions used for grants during the period: dividend yield of 0%; expected volatility of 25%; risk-free interest rate Risk-Free Interest Rate Describes return available to an investor in a security somehow guaranteed to produce that return. The risk-free interest rate compensataes the investor for the temporary sacrifice of consumption. of 3.5%; and an expected life of 4 years (2004 - dividend yield of 0%; expected volatility of 24%; risk-free interest rate of 3.5%; and an expected life of 4 years). Other Pronouncements Effective January 2, 2005 the Company prospectively adopted the new provisions of the CICA CICA Competition In Contracting Act of 1984 (USA) CICA Canadian Institute of Chartered Accountants CICA Competition In Contracting Act CICA Criminal Injuries Compensation Authority (UK) Handbook
This article is about reference works. For the subnotebook computer, see .
3. OUTSTANDING SHARES As at December 31, 2005, the Company had outstanding 16,735,617 common shares and 739,357 options to acquire common shares under the Company's employee stock option plans. 4. SEGMENTED INFORMATION Sleeman Breweries Ltd. is the largest premium brewery in Canada, producing and marketing several unique brands of beer. The Company operates breweries in Guelph, Ontario; Chambly, Quebec Chambly is a town in southwestern Quebec, Canada, about 25km to the south east of Montreal. It sits on the Richelieu River in the Regional County Municipality of La-Vallée-du-Richelieu. ; Dartmouth, Nova Scotia Dartmouth (2001 pop.: 65,741[0]), founded in 1750, is a community and planning area of the Halifax Regional Municipality, a provincially designated Metropolitan Area, and a former city in the Canadian province of Nova Scotia. ; Vernon, British Columbia and LaCrosse lacrosse (ləkrôs`), ball and goal game usually played outdoors by two teams of 10 players each on a field 60 to 70 yd (54.86 to 64.01 m) wide by 110 yd (100.58 m) long. Two goals face each other 80 yd (73. , Wisconsin Wisconsin, state, United States Wisconsin (wĭskŏn`sən, –sĭn), upper midwestern state of the United States. It is bounded by Lake Superior and the Upper Peninsula of Michigan, from which it is divided by the Menominee . The Company's reportable segments represent the aggregation of strategic business units that produce and sell beer in distinct geographic markets. They are managed separately because each business operates in different market environments in terms of regulatory regimes, customer preferences and sales and distribution channels. The Company has two reportable segments: Eastern Canadian operations and Western Canadian operations. The accounting policies of the segments are the same as those described in the summary of significant accounting policies. The Company accounts for inter-segment sales and transfers, at the transferring segment's cost plus a production margin. Segment performance is evaluated based on earnings before interest, income taxes, depreciation and amortization ("EBITDA"). The following table sets forth information about segment profit or loss and segment assets:
Eastern Western Eastern Western
Canada Canada Totals Canada Canada Totals
----------------------------------------------------------
Quarter Ended 12 Months Ended
December 31, 2005 December 31, 2005
Revenues
from
external
customers $ 34,699 $ 14,924 $ 49,623 $ 141,444 $ 65,230 $ 206,674
Inter-segment
revenues 1,943 1,303 3,246 12,920 6,985 19,905
EBITDA 4,877 797 5,674 17,952 11,140 29,092
Depreciation
and
amortization 1,607 594 2,201 6,244 2,217 8,461
Segment
assets 230,185 78,151 308,336 230,185 78,151 308,336
Expenditures
for capital
assets 3,582 878 4,460 7,875 2,003 9,878
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Quarter Ended 12 Months Ended
January 1, 2005 January 1, 2005
Revenues
from
external
customers $ 37,467 $ 16,290 $ 53,757 $ 140,728 $ 70,748 $ 211,476
Inter-segment
revenues 1,253 - 1,253 8,811 - 8,811
EBITDA 6,557 3,151 9,708 21,503 14,440 35,943
Depreciation
and
amortization 1,414 605 2,019 5,126 2,046 7,172
Segment assets 225,138 75,014 300,152 225,138 75,014 300,152
Expenditures
for capital
assets 4,585 1,519 6,104 12,235 3,500 15,735
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5. RESTRUCTURING COSTS The Company announced a reorganization that would eliminate approximately 40 full time positions in the third quarter of 2005. The reorganization consisted of a workforce reduction across both business segments and the consolidation of production facilities in Western Canada. The costs related to this reorganization have been recorded in the selling, general and administration expense line in 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 Earnings and Retained Earnings Retained Earnings The percentage of net earnings not paid out in dividends, but retained by the company to be reinvested in its core business or to pay debt. It is recorded under shareholders equity on the balance sheet. . The following table shows the changes in the restructuring provision for this initiative by reportable segment :
Eastern Western
Canada Canada
-----------------------------------------
Worforce Worforce Redundant Total
Reduction Reduction Capital Subtotal Company
Assets
Original
Provision
Recorded
in Current Year $ 1,730 $ 395 $ - $ 395 $ 2,125
Revisions to
Accruals in
the Year - - 450 450 450
---------------------------------------------------------------------
Restructuring
Costs in the
Year 1,730 395 450 845 2,575
Cash Drawdowns (598) (160) - (160) (758)
Non-Cash Drawdowns - - (450) (450) (450)
---------------------------------------------------------------------
Provision at
December 31, 2005 $ 1,132 $ 235 $ - $ 235 $ 1,367
---------------------------------------------------------------------
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6. SUBSEQUENT EVENT Subsequent to the end of the year, the Company announced a second reorganization that will eliminate approximately 40 further full time positions. The Company will record a pretax restructuring charge restructuring charge The expense of reorganizing a company's operations. A restructuring charge is an infrequent expense that generally results from asset writedowns or facility closings. of $2 million in the first quarter of the 2006 fiscal year to account for the expected costs of this restructuring. 7. COMPARATIVE FIGURES Certain comparative figures have been reclassified to conform to Verb 1. conform to - satisfy a condition or restriction; "Does this paper meet the requirements for the degree?" fit, meet coordinate - be co-ordinated; "These activities coordinate well" the financial statement presentation adopted in the current period. (1) Per hectolitre results are non-GAAP earnings measures, therefore, they do not have any standardized meaning prescribed by Canadian generally accepted accounting principles and may not be similar to measures presented by other companies.Management evaluates business trends on a per hectolitre basis as this is a measurement commonly used by breweries to benchmark A performance test of hardware and/or software. There are various programs that very accurately test the raw power of a single machine, the interaction in a single client/server system (one server/multiple clients) and the transactions per second in a transaction processing system. revenue and costs. (2) EBITDA is a non-GAAP earnings measure, therefore, it does not have any standardized meaning prescribed by Canadian generally accepted accounting principles and may not be similar to measures presented by other companies.EBITDA represents earnings before interest, income taxes, depreciation and amortization.Management uses this measurement to evaluate the operating results of each of the Company's segments and the Company as a whole.Further, this measure is important to management since it is used by the Company's lenders to evaluate the ongoing cash generating capability of the Company and thus the amounts those lenders are willing to lend to the Company. Sleeman Breweries Ltd. (TSX:ALE) |
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