Brampton Brick Limited
TSX : BBL.A

Brampton Brick Limited

March 12, 2010 15:42 ET

Brampton Brick Reports Results for the Fourth Quarter and Year Ended December 31, 2009

BRAMPTON, ONTARIO--(Marketwire - March 12, 2010) -

(All amounts are stated in thousands of Canadian dollars, except per share amounts, unless otherwise indicated.)

Brampton Brick Limited (TSX:BBL.A) today reported a loss for the year ended December 31, 2009 of $11,898, or $1.09 per Class A Subordinate Voting Share ("Class A share") and Class B Multiple Voting Share ("Class B share") outstanding, compared to a loss of $8,474, or $0.78 per Class A share and Class B share outstanding in 2008. The aggregate weighted average number of Class A shares and Class B shares outstanding was 10,937,000 in 2009 and 10,928,000 in 2008.

The major factors which impacted operating results from continuing operations in 2009 were:

  1. Significantly lower sales and production volumes of clay brick products.

  2. Start-up losses of the new Indiana clay brick plant, including pre-production costs charged against operations.

  3. Operating losses incurred by Universal, in which the Company has a 50% joint venture interest.

  4. A provision of $1,784 to reflect the unrealized loss on the interest rate swap contract.

Effective with the adoption of the new Canadian Institute of Chartered Accountants ("CICA") Handbook Section 3064, Goodwill and Intangible Assets, on January 1, 2009, operating costs in the amount of $1,832 pertaining to the pre-production period of the new Indiana clay brick plant and the Company's share of the unamortized balance of start-up costs related to Universal Resource Recovery Inc. ("Universal") in the amount of $179 were adjusted to opening retained earnings. As at December 31, 2008 these costs were included in the Consolidated Balance Sheet under Other assets. This change has been applied retroactively and the prior year comparative financial statements have been restated accordingly. Commencing in 2009 any such costs are charged to operations as incurred.

For the fourth quarter ended December 31, 2009, the Company recorded a loss from continuing operations of $2,320, or $0.21 per share, on a weighted average 10,937,000 Class A shares and Class B shares outstanding, compared to a loss from continuing operations of $9,907, or $0.91 per share, on a weighted average 10,937,000 Class A shares and Class B shares outstanding, for the fourth quarter of 2008.

The loss incurred in the fourth quarter of 2008 reflected the goodwill impairment charge, net of income taxes, of $5,991, or $0.55 per share.

These losses also reflect valuation allowances against the future income tax benefit that would otherwise have been recorded with respect to the non-capital losses incurred by the Company's U.S. operations and by Universal. In addition, a valuation allowance of $1,903 was recorded in 2008 against the future income tax asset pertaining to the U.S. operations.

RESULTS OF OPERATIONS

Year ended December 31, 2009

Net sales from continuing operations were $59,978 in 2009 compared to $81,476 in 2008, representing a net decline of $21,498. Net sales in the Masonry Products business segment declined by $23,137 due to the decline in housing starts. In the Landscape Products business segment, net sales declined marginally. Net sales from the new waste composting operations of Universal, which commenced operations in the third quarter of 2008, amounted to $2,862 in 2009 compared to $863 in 2008.

Substantially lower production volumes, primarily in the Masonry Products business segment, resulted in an increase in unabsorbed manufacturing costs charged against operations in 2009 compared to 2008. This matter is discussed in greater detail under the business segment results which follow.

The lower cost of goods sold and a significant decrease in selling, general and administrative expenses were partially offset by higher amortization charges pertaining to the new Indiana clay brick plant, which came on stream at the beginning of the second quarter of 2009, and to Universal's operations.

As a result of the above noted factors, the operating loss from continuing operations before interest and other items was $9,335 in 2009 compared to operating income of $1,634 in 2008.

Interest on long-term debt increased by $1,198 to $2,520 from $1,322 primarily due to the increase in term financing outstanding during 2009 and the Company's proportionate share, amounting to $7,500, of loans incurred by Universal in the second half of 2008 to finance a portion of the construction costs of its waste composting plant.

Other interest expense of $461 in 2009 is comprised primarily of interest on bank operating advances during the first half of the year and interest differential payments after June 29, 2009 on the interest rate swap. This was partially offset by interest income earned on the promissory note receivable. Interest income of $415 in 2008 is comprised primarily of interest income on the promissory note receivable plus interest earned on surplus cash balances.

The Company recorded a foreign currency exchange gain of $539 for the year compared to a loss of $123 in 2008. The exchange gain reported in 2009 reflected the positive impact of the strengthening of the Canadian dollar on settlement of foreign currency transactions during the year and on the translation of foreign currency denominated monetary assets and liabilities.

On April 9, 2009, the Company sold an undivided, co-ownership interest, representing approximately 59.9%, in the promissory note receivable, including future interest payments, for cash proceeds of $3,793 resulting in a loss of $269.

On June 17, 2009, the remaining surplus properties located in Quebec were sold for cash proceeds of $1,200, resulting in a loss of $190 after deduction of additional costs of $343 incurred in 2009. In 2008, the sale of certain properties resulted in a gain of $267.

On June 29, 2009, the Company entered into a new $30,000 fixed-rate, term financing agreement with a new lender and repaid its previous term bank loan. The Company holds an interest rate swap contract which was previously designated as an effective cash flow hedge against the previous term bank loan. The repayment of this term bank loan resulted in the swap contract no longer being an effective cash flow hedge. Consequently, the Company has recorded a charge against operations to reflect the unrealized loss on the interest rate swap contract. As at December 31, 2009 this amount was $1,784.

In 2008, the Company wrote off the remaining carrying value of goodwill in the amount of $6,711. Net of the related income tax benefit of $720, this resulted in a net charge of $5,991, or $0.55 per share.

The recovery of income taxes of $2,444 in 2009 relates primarily to the Company's Canadian Masonry Products and Landscape Products operations. Valuation allowances have been recorded in both the current and prior year against the future income tax benefit that would otherwise have been recorded with respect to the non-capital losses incurred in the Company's U.S. operations and by Universal. The losses incurred by the new Indiana clay brick plant, which commenced commercial production during the second quarter of 2009, and by Universal, which commenced operations in the second half of 2008, were higher in 2009 than in 2008.

Operating results for 2008 reflected an income tax expense of $2,246 on a loss before income taxes of $5,772. In 2008, the Company recorded a valuation allowance in the amount of $1,903 against the future tax asset related to U.S. operations. In addition, a future tax benefit of only $720 was recorded with respect to the $6,711 write off of goodwill.

The loss from discontinued operations in 2008 amounted to $355, or $0.03 per share.

Three months ended December 31, 2009

Net sales from continuing operations were $15,009, an increase of $741 over net sales of $14,268 in the fourth quarter of 2008. Most of the increase was the result of higher sales volumes in the Masonry Products business segment.

The operating loss from continuing operations, before interest and other items, was $2,329 for the fourth quarter of 2009, an improvement of $932 over the operating loss of $3,261 incurred in the fourth quarter of 2008.

Interest on long-term debt and other interest expense were higher than the corresponding period in 2008 for the same reasons as outlined above for the annual results.

More detailed discussion with respect to each operating business segment follows:

MASONRY PRODUCTS

For the year ended December 31, 2009, net sales were $36,840 compared to $59,977 in 2008, representing a decline of $23,137, or 38.6%. The operating loss incurred in 2009 was $4,730 compared to operating income of $7,530 in 2008.

Clay brick shipments have been significantly impacted by the downturn in residential construction activity in the Company's primary market areas. Sales volumes of the new concrete masonry products were up over last year.

In addition to the impact of much lower sales, lower production volumes in the Canadian operations resulted in a higher proportion of fixed manufacturing costs being charged against operations in the current period, thus negatively impacting margins.

Lower distribution costs and lower selling, general and administrative expenses, due primarily to reductions in personnel costs and various discretionary expenditures, partially offset the negative impact of lower sales and production volumes.

The new Indiana clay brick plant commenced production in the second quarter of 2009. Due to the economic environment in the U.S., initial sales and production volumes have been below expectations. The increase in the loss incurred in the U.S. operations, which included pre-production costs of approximately $1,478 and amortization charges of $2,240 in 2009, also contributed to the decrease in operating results in this business segment.

For the fourth quarter of 2009 net sales increased by $665, or 6.8%, from $9,779 in 2008 to $10,444 as a result of higher shipments of clay brick and concrete masonry products. The operating loss for the quarter was $532 compared to $2,171 for the same period in 2008.

LANDSCAPE PRODUCTS

Net sales of the Landscape Products business segment were $20,276 for the year ended December 31, 2009 compared to $20,636 in 2008. The decline of $360 was due to lower sales in the U.S. which, in turn, was caused by economic factors affecting the Company's U.S. markets, primarily Michigan. Net sales in the Company's Canadian markets were higher in 2009 than in 2008.

For the year ended December 31, 2009, the Landscape Products business segment incurred an operating loss of $2,866 compared to $5,271 in 2008. The improvement in operating results was due to improved manufacturing efficiencies and cost reduction programs. Lower selling, general and administrative expenses and lower amortization charges also contributed to the improvement in operating results.

For the fourth quarter of 2009 net sales were $3,706 compared to $3,783 for the corresponding period in 2008 and the operating loss for the quarter was $1,416 compared to $965 in 2008.

Operating results for the fourth quarter of 2009 were impacted by higher manufacturing costs and provisions related to the closure of the Da Vinci Stone Craft operations.

OTHER OPERATIONS

Other operations include, among other things, the Company's 50% joint venture interest in Universal. This investment is accounted for using the proportionate consolidation method. Composting operations commenced in the third quarter of 2008.

For the year ended December 31, 2009 the Company's proportionate share of net sales was $2,862 compared to $863 in 2008 and the proportionate share of the operating loss incurred by Universal in 2009 was $1,760 compared to $621 in 2008.

Composting operations at Universal's site in Welland were temporarily suspended in early May 2009 in order to construct and install capital improvements and to modify operating processes to address various issues which arose during the commissioning and start-up phase of these new operations. Composting operations resumed in early August 2009.

DISCONTINUED OPERATIONS

Discontinued operations represent the Company's former joint venture interest in Sharpsmart Canada Limited, which was sold in April 2008, and its interest in certain small quantity generator accounts which were disposed of effective September 1, 2008.

The loss from discontinued operations in 2008 was $355, or $0.03 per share.

CASH FLOW

Cash flow used for operating activities of continuing operations totaled $3,450 for the year ended December 31, 2009. In 2008, operating activities of continuing operations generated cash flow of $14,001.

The decline in cash flow from continuing operations reflected the decrease in operating results in 2009, net of non-cash charges, and the net use of cash of $3,909 for working capital items in 2009 compared to cash of $7,298 generated from a significant reduction of working capital in 2008.

Cash utilized for purchases of property, plant and equipment totaled $11,013 in 2009 compared to $48,967 in 2008. Expenditures in 2009 included $8,149 pertaining to the final construction costs of the Company's new clay brick plant in Indiana compared to $34,521 spent in 2008. Expenditures in 2009 also included an amount of $1,635, representing the Company's 50% share of expenditures incurred by Universal for the construction of its waste composting facility. In 2008, this amount was $9,341.

Deferred costs of $1,832 incurred in 2008 in connection with pre-operating costs for the Indiana clay brick plant during construction and in the testing and commissioning phase have been adjusted to opening retained earnings in accordance with CICA Handbook Section 3064, Goodwill and Intangible Assets, and the 2008 comparative financial statements have been restated accordingly. In addition, $691 incurred in 2008 in relation to a proposed new quarry site was reclassified to capital expenditures.

The sale on April 9, 2009, of an undivided, co-ownership interest, representing approximately 59.9%, in the proceeds of the promissory note receivable, including future interest payments, generated cash proceeds of $3,793. The proceeds were utilized to reduce bank operating advances. The Company has provided a guarantee to secure repayment of the proceeds to the purchaser in the event of default. The promissory note receivable is secured by a letter of credit from a major financial institution.

Proceeds of $2,958 from the first instalment and $1,338, being the Company's remaining 40.1% interest therein, from the second instalment of this promissory note receivable were received in October 2008 and October 2009, respectively.

The sale of the remaining surplus properties in Quebec generated cash proceeds of $1,200. The proceeds were utilized to reduce bank operating advances.

On June 29, 2009, the Company completed a new $30,000 term financing arrangement. Proceeds of the new financing were utilized to repay a $20,000 term bank loan with the balance utilized to reduce bank operating advances.

In 2008 term bank loans increased by $24,500. Of this amount, $17,000 represented financing of a portion of the costs of construction of the Indiana clay brick plant and $7,500 represented the Company's proportionate share of the term bank loan incurred by Universal for the construction of its waste composting facility. Debt repayments, including the promissory note payable and other term loans, totaled $4,451 in 2008.

A portion of the cash proceeds from the promissory note receivable were distributed by way of a cash dividend by a subsidiary company. The non-controlling interests' share of these distributions totaled $1,085 in 2009 and $1,750 in 2008.

Due to current economic conditions, the Board of Directors of the Company elected not to declare a dividend in 2009. The Company paid semi-annual dividends of $0.10 per Class A share and $0.10 Class B share in 2008.

In 2008, the Company purchased and cancelled 37,800 Class A shares for aggregate consideration of $365 under a Normal Course Issuer Bid.

FINANCIAL CONDITION

The nature of the Company's products and primary markets dictates that its Masonry Products and Landscape Products business segments are seasonal. The Landscape Products business is affected to a greater degree than the Masonry Products business. As a result of this seasonality, bank operating advances are generally expected to increase through the first half of the year and decline through the second half of the year.

As at December 31, 2009, bank operating advances were $750, a decrease of $1,831 from the amount outstanding at December 31, 2008. Accounts payable and accrued liabilities totaled $10,866 at December 31, 2009 compared to $15,146 at December 31, 2008, including amounts related to capital expenditures of approximately $545 and $4,495, respectively.

Working capital at December 31, 2009 was $13,272, including cash and cash equivalents totaling $2,868, representing a working capital ratio of 1.71:1. Comparable figures for working capital and the working capital ratio at December 31, 2008 were $4,715, including cash and cash equivalents of $2,088, and 1.18:1, respectively. The ratio of total liabilities to shareholders' equity at December 31, 2009 was 0.54:1 compared to 0.47:1 at December 31, 2008.

As noted above, the Company completed a new $30,000 long-term financing arrangement with a new lender on June 29, 2009. The term of the new loan is seven years with payments of interest only for the first two years. Principal repayments commence in July 2011 at $500 per month in the months of July to November inclusive ($2,500 per year) to 2015, and a balloon payment of $17,500 in June 2016. The rate of interest is fixed at 8.00%.

The loan is secured primarily by real estate and production equipment of the Company's Masonry Products and Landscape Products business segments in both Canada and U.S.

Transaction costs on the new term loan were netted against the principal amount and are being amortized over the term of the loan resulting in an effective interest rate of 8.40%.

The term loan agreement contains various financial covenants. Due to the seasonality of the Company's primary business segments and the low level of residential construction activity, the Company anticipated that it may not be able to maintain compliance with the minimum interest coverage requirement, which is calculated quarterly based on operating results for the previous four quarters, as at December 31, 2009 and through the first half of 2010. Consequently, the Company sought and obtained an amendment to this financial covenant. As at December 31, 2009, the Company was in compliance with the amended financial covenant and anticipates that it will maintain compliance with all financial covenants in 2010.

On February 26, 2010, the Company completed a subordinated secured debenture financing in the amount of $9,000. The debentures have a three year term and are secured by a second ranking security interest in the Company's real estate and production equipment utilized in the Masonry Products and Landscape Products business segments in Ontario. The rate of interest is fixed at 10.0%. In addition, the Company paid an up-front fee of 2.0% to subscribers.

In connection with this transaction, parties, including a Director of the Company, holding an indirect interest in $1,100 of the $3,000 promissory note payable, which was due but not paid on December 7, 2009, subscribed for an equal or greater principal amount of the debenture issue. The remaining parties, holding an indirect interest in $1,900 of the $3,000 promissory note payable, and who include a Director of the Company, agreed to accept a new unsecured promissory note with identical terms and conditions as the existing promissory note, except that the new promissory note is due and payable in full on September 30, 2010.

All of the transactions closed concurrently. Substantially all of the debentures were acquired by insiders of the Company or by persons associated with or related to them.

Excluding Universal, the Company had aggregate operating credit facilities as at December 31, 2009 totaling up to $17,450 which was reduced to $12,700 subsequent to December 31, 2009. These credit facilities are demand facilities and are secured primarily by accounts receivable and inventories of the Company's Masonry Products and Landscape Products business segments in both Canada and the U.S. The actual amount that the Company may borrow is determined based on standard margin formulas for accounts receivable and inventories, which amount is reduced by the amount of the mark-to-market exposure of the interest rate swap contract. Utilization as at December 31, 2009 totaled $1,106, including $356 for outstanding letters of credit, and the mark-to-market exposure on the interest rate swap contract was $1,784.

The Company expects that future cash flows from operations, cash and cash equivalents on hand, the unutilized balances of its operating credit facilities and the net proceeds from the new debenture financing described above will be sufficient to satisfy its obligations as they become due.

Universal's operating and term credit facilities are secured by substantially all of its assets and undertakings and a guarantee in the amount of $6,500 from each of the joint venture partners.

Borrowings under the demand operating facility are available by way of a combination of overdrafts of up to $3,000 and letters of credit of up to $3,000, subject to an overall maximum of $5,000. Overdrafts are further limited to the lesser of: (i) 75% of under 90 day accounts receivable minus the face value of letters of credit in excess of $1,000, and (ii) $3,000. As at December 31, 2009, $1,123 had been utilized through the issuance of letters of credit. The Company's proportionate share was $562.

During the second quarter of 2009, Universal's term loan facility was amended to commence monthly principal repayments in January 2010. Previously, the repayments were scheduled to commence in May 2009.

Universal's credit agreement contains various financial covenants. As a result of the losses being incurred in 2009, which were due to the additional costs incurred during the commissioning and start-up phase of this new operation and the temporary suspension of composting operations for a portion of the year, Universal anticipated that it would not be in compliance with the debt service coverage requirement which was to become effective for the first time for the year ended December 31, 2009. Consequently, Universal sought and obtained an amendment to this covenant. As at December 31, 2009, Universal was in compliance with its financial covenants and anticipates that it will be able to maintain compliance throughout 2010.

Universal expects that future cash flows from operations, the unutilized balance of its operating credit facility and, to the extent required, further advances from the joint venture partners, will be sufficient to satisfy its obligations as they become due.

Certain statements contained herein constitute "forward-looking statements". Such forward-looking statements involve known and unknown risks, uncertainties and other factors, including, but not limited to, those identified under "Risks and Uncertainties" in the Company's 2008 Annual Report, which may cause actual results, performance or achievements of the Company to be materially different from any future result, performance or achievements expressed or implied by such forward-looking statements.

Brampton Brick is Canada's second largest manufacturer of clay brick, serving markets in Ontario, Quebec and the Northeast and Midwestern United States from its brick manufacturing plants located in Brampton, Ontario and near Terre Haute, Indiana. To complement the clay brick product line, the Company also manufactures a range of concrete masonry products, including stone veneer products marketed under the Stoneworkstrade name and concrete window sills. Concrete interlocking paving stones, retaining walls, garden walls and enviro products are manufactured in Markham, Milton and Brampton, Ontario and Wixom, Michigan. These products are sold to markets in Ontario, Quebec, Michigan, New York, Pennsylvania, Ohio, Kentucky, Illinois and Indiana under the Oakstrade name. Products are used for residential construction and for industrial, commercial, and institutional building projects. The Company also holds a 50% joint-venture interest in Universal Resource Recovery Inc., which operates a waste composting facility in Welland, Ontario.

Selected Financial Information
         
(in thousands of dollars, except per share amounts) (unaudited)      
  Three months ended December 31   Year ended December 31  
 
CONSOLIDATED STATEMENTS OF OPERATIONS   2009     2008     2009     2008  
   
Net sales from continuing operations $ 15,009   $ 14,268   $ 59,978   $ 81,476  
   
Cost of goods sold   11,723     11,751     47,035     57,610  
Selling, general and administrative expenses   2,763     3,376     10,949     13,402  
Amortization   2,852     2,402     11,329     8,830  
    17,338     17,529     69,313     79,842  
Operating (loss) income from continuing operations before the undernoted items   (2,329 )   (3,261 )   (9,335 )   1,634   
  Interest on long-term debt   (785 )   (490 )   (2,520 )   (1,322 )
  Other interest (expense) income (net)   (225 )   85     (461 )   415  
  Foreign currency exchange gain (loss)   87     252     539     (123 )
  Other   (95 )   20     (317 )   68  
    (1,018 )   (133 )   (2,759 )   (962 )
(Loss) income from continuing operations before the following items   (3,347 )   (3,394   (12,094 )   672   
   
Goodwill impairment       (6,711 )       (6,711 )
Gain (loss) on sale of property held for sale       131     (190 )   267  
Loss on sale of promissory note           (269 )    
Gain (loss) on derivative financial instruments   214         (1,784 )    
   
Loss from continuing operations before income taxes and non-controlling interests   (3,133   (9,974 )   (14,337 )    (5,772
Recovery of (provision for) income taxes                        
  Current   743     390     1,485     (1,871 )
  Future   79     (301 )   959     (375 )
    822     89     2,444     (2,246 )
Loss from continuing operations before non-controlling interests   (2,311 )    (9,885 )   (11,893 )   (8,018 )
Non-controlling interests   (9 )   (22 )   (5 )   (101 )
Loss from continuing operations   (2,320 )   (9,907 )   (11,898 )   (8,119 )
Loss from discontinued operations               (355 )
Loss for the period $ (2,320 ) $ (9,907 ) $ (11,898 ) $ (8,474 )
   
Loss per Class A and Class B share                        
  From continuing operations $ (0.21 ) $ (0.91 ) $ (1.09 ) $ (0.75 )
  For the period $ (0.21 ) $ (0.91 ) $ (1.09 ) $ (0.78 )
Weighted average Class A and Class B shares outstanding (000's)   10,937     10,937     10,937     10,928  
                         
Selected Financial Information  
   
(in thousands of dollars, except per share amounts) (unaudited)      
  Three months ended December 31   Year ended December 31  
 
CONSOLIDATED STATEMENTS OF CASH FLOWS   2009     2008     2009     2008  
   
Cash provided by (used for) activities of continuing operations                        
Operating activities                        
  Loss from continuing operations for the period $ (2,320 ) $ (9,907 ) $ (11,898 ) $ (8,119 )
  Items not affecting cash and cash equivalents                        
    Amortization and accretion   2,860     2,414     11,367     8,879  
    Future income taxes   (79 )   301     (959 )   375  
    Non-controlling interests   9     22     5     101  
    Unrealized foreign currency exchange gain   (35 )   (138 )   (305 )   (313 )
    Loss on disposal of property, plant and equipment   116     4     118      
    (Gain) loss on property held for sale       (131 )   190     (267 )
    Loss on sale of promissory note           269      
    (Gain) loss on derivative financial instruments   (214 )       1,784      
    Goodwill impairment       6,711         6,711  
    Other   60     50     228     229  
    397     (674 )   799     7,596  
Changes in non-cash operating items                        
  Accounts receivable   2,402     9,363     (1,015 )   1,743  
  Inventories   (599 )   (759 )   253     4,547  
  Accounts payable and accrued liabilities   (1,380 )   (2,767 )   (456 )   88  
  Income taxes payable (net)   (793 )   (1,075 )   (2,667 )   1,173  
  Other   44     183     (24 )   (253 )
    (326 )   4,945     (3,909 )   7,298  
Payments of asset retirement obligation   (87 )   (76 )   (340 )   (893 )
Cash provided by (used for) operating activities of continuing operations   (16 )   4,195     (3,450 )   14,001  
Investing activities                        
  Purchase of property, plant and equipment   (1,632 )   (6,770 )   (11,013 )   (48,967 )
  Proceeds from sale of promissory note           3,793      
  Proceeds from promissory note   1,338     2,958     1,338     2,958  
  Proceeds from sale of property held for sale       212     1,200     428  
  Proceeds from mortgage receivable       150         150  
  Proceeds from disposal of property, plant and equipment       1     3     13  
  Inter-company advances repaid by discontinued operations               715  
Cash used for investment activities of continuing operations   (294 )   (3,449 )   (4,679 )   (44,703 )
Financing activities                        
  Increase (decrease) in bank operating advances   30     902     (1,831 )   1,931  
  Increase in term loans       4,325     32,388     24,500  
  Repayment of term loans   (81 )   (4,162 )   (20,345 )   (4,451 )
  Payments on obligations under capital leases   (78 )   (97 )   (364 )   (277 )
  Payment of dividends by subsidiary to non-controlling interests   (1,085 )   (1,050 )   (1,085 )   (1,750 )
  Payment of dividends to shareholders       (1,093 )       (2,189 )
  Proceeds from exercise of stock options               634  
  Class A shares repurchased       (26 )       (365 )
Cash (used for) provided by financing activities of continuing operations   (1,214 )   (1,201 )   8,763     18,033  
Net cash provided by (used for) discontinued operations       560     (62 )   490  
Foreign exchange on cash held in foreign currency   (10 )   189     208     407  
Increase (decrease) in cash and cash equivalents   (1,534 )   294     780     (11,772 )
Cash and cash equivalents at the beginning of the period   4,402     1,794     2,088     13,860  
Cash and cash equivalents at the end of the period $ 2,868   $ 2,088   $ 2,868   $ 2,088  
                         
Selected Financial Information
     
(audited) (in thousands of dollars)     
     
  December 31 December 31
CONSOLIDATED BALANCE SHEETS 2009 2008
 
ASSETS    
Current assets    
  Cash and cash equivalents $ 2,868 $ 2,088
  Accounts receivable   6,678   5,691
  Inventories   17,809   18,062
  Income taxes recoverable   1,730   10
  Future income taxes   896   40
  Other current assets   737   988
  Promissory note receivable, current   1,335   3,358
    32,053   30,237
         
Property, plant and equipment (net)   153,980   107,849
Construction in progress     49,149
    153,980   156,998
Other assets        
  Promissory note receivable, long-term     3,244
  Property held for sale     1,047
  Future income taxes   21   605
    21   4,896
  $ 186,054 $ 192,131
LIABILITIES        
Current liabilities        
  Bank operating advances $ 750 $ 2,581
  Accounts payable and accrued liabilities   10,866   15,146
  Income taxes payable   1,572   2,579
  Long-term debt, current portion   4,626   4,137
  Derivative financial instruments, current   867   834
  Asset retirement obligation   100   245
    18,781   25,522
         
Long-term debt, less current portion   37,583   25,521
         
Derivative financial instruments, non-current   917   2,267
         
Future income taxes   6,701   6,552
         
Asset retirement obligation   827   496
    64,809   60,358
         
Non-controlling interests   1,446   2,526
         
SHAREHOLDERS' EQUITY   119,799   129,247
  $ 186,054 $ 192,131
         
Selected Financial Information  
         
(in thousands of dollars) (unaudited)      
  Three months ended December 31   Year ended December 31  
 
CONSOLIDATED STATEMENTS OF RETAINED EARNINGS   2009     2008     2009     2008  
   
Balance at the beginning of the periodas previously reported $ 90,900   $ 111,493   $ 102,489   $ 111,587  
  Impact of accounting standard changes under CICA Handbook Section 3064 applied retroactively           (2,011 )   (231 )
Balance at the beginning of the period as restated $ 90,900   $ 111,493   $ 100,478   $ 111,356  
  Loss for the period   (2,320 )   (9,907 )   (11,898 )   (8,474 )
  Premiums paid on repurchase of capital stock       (15 )       (215 )
  Dividends       (1,093 )       (2,189 )
   
Balance at the end of the period $ 88,580   $ 100,478   $ 88,580   $ 100,478  
   

 

(in thousands of dollars) (unaudited)      
  Three months ended December 31   Year ended December 31  
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS   2009     2008     2009     2008  
                         
                         
Loss for the period $ (2,320 ) $ (9,907 ) $ (11,898 ) $ (8,474 )
                         
Other comprehensive income (loss)                        
  Gain (loss) on cash flow hedges, net of taxes       (932 )   702     (878 )
  Losses on derivatives designated as cash flow hedges in prior periods transferred to net income, net of taxes           1,562      
                         
Comprehensive loss for the period $ (2,320 ) $ (10,839 ) $ (9,634 ) $ (9,352 )
                         

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