Ridley Inc.
TSX : RCL

Ridley Inc.

April 30, 2010 01:09 ET

Ridley Inc. Reports Financial Results for Fiscal 2010 Third Quarter

MANKATO, MINNESOTA and WINNIPEG, MANITOBA--(Marketwire - April 30, 2010) - Ridley Inc. (TSX:RCL) today reported its financial results for the third quarter of fiscal 2010, the three months ended March 31, 2010. All currency amounts are stated in U.S. dollars unless otherwise noted.

For the three months ended March 31, 2010, Ridley earned $2.5 million after income taxes (19 cents per share) compared to $3.5 million (25 cents per share) last year. Earnings before interest, taxes and amortization (EBITA (i)) for the third quarter of fiscal 2010 were $6.6 million compared to $7.7 million last year. For the nine months year-to-date EBITA was $21.3 million compared to $22.1 million for the same period last year.

The main driver for Ridley's earnings results in fiscal 2010 continues to be lower tonnage volume, broadly in line with reductions in livestock numbers resulting from a prolonged period of poor economics for many commercial animal segments. Overall volume in the third quarter was down 3.5% compared to last year and down 5.5% for the nine months year-to-date. Volume improved in other, more specialized, segments.

Gross profits in the third quarter were lower by $2.3 million from last year, mostly a result of lower unit margins which followed from the absence of ingredient position gains compared to last year. Operating expenses across all segments were reduced by $1.2 million this quarter as a result of efficiency initiatives undertaken last year.

Net debt as at March 31, 2010 was $11.8 million compared to $8.7 million at the start of the current year. The increase in debt included the repurchase and cancellation of 983,000 of Ridley's common shares since the start of fiscal 2010 under a normal course issuer bid through the Toronto Stock Exchange at a cost including commissions of $7.4 million.

 "We are generally satisfied with Ridley's results under the circumstances and cautiously optimistic that the corner has been turned in the livestock economy," said Steve VanRoekel, President & CEO of Ridley Inc. "Producer economics are improving in most segments, which will be positive for Ridley's long-term outlook. However, any significant recovery in livestock numbers and feed demand will take time, and producers' feeding strategies are likely to remain conservative until balance sheets are rebuilt," added VanRoekel.

MANAGEMENT'S DISCUSSION AND ANALYSIS

The following Management Discussion and Analysis as of April 29, 2010 is based on the accompanying financial statements prepared using Canadian Generally Accepted Accounting Principles ("GAAP"). All amounts are in U.S. dollars unless otherwise stated.

Third Quarter Results

The following summary data is presented to assist in understanding the fiscal 2010 third quarter results:

Summary of Results Three months ended Nine months ended
  March 31 March 31
($ million except for EPS) 2010 2009 2010 2009
Revenue 141.6 140.7 427.2 473.6
Gross profit 19.4 21.8 60.4 67.0
Operating income 4.5 5.6 14.8 12.6
Net earnings before exceptions 2.5 3.5 8.6 9.2
Exceptions, net of income taxes (noted below (ii)) - - - (2.1)
Net earnings 2.5 3.5 8.6 7.1
Diluted earnings per share (EPS) $0.19 $0.25 $0.64 $0.51
EBITA (i) 6.6 7.7 21.3 22.1
  1. EBITA – Operating income before amortization and exceptions. EBITA does not have a standardized meaning prescribed by Canadian GAAP and, therefore, is not readily comparable to similar measures presented by other companies. However, management believes that this measure provides investors with useful supplemental information.
  2. Exceptions – In the preceding summary data, net earnings were reported before exceptions. Those exceptions, which are mainly unusual or non-recurring items, are summarized below, net of income taxes:
Exceptions (Net of Income Taxes) Three months ended Nine months ended
  March 31 March 31
($ million) 2010 2009 2010 2009
Gain on sale of facilities - - - 0.2
Asset impairment loss - - - (0.9)
Restructuring charges - - - (1.5)
Total Exceptions - - - (2.1)

Consolidated Third Quarter Results

Revenue of $141.6 million in the third quarter of fiscal 2010 was higher by $0.8 million from the same period last year. A comparison of revenue is not necessarily indicative of the strength of Ridley's business because revenue can be influenced by fluctuating commodity prices. Total sales volume, as measured in tons of feed products sold, was 3.5% lower than the prior year. The decline in volume occurred in the Ridley Feed Operations (RFO) segment, particularly in Canadian feed operations, where an extended period of poor producer profitability has resulted in significantly reduced animal feed demand. The effect of lower volume in Canada on consolidated revenues was partly offset by the currency translation of Canadian revenues reported in U.S. dollars; a 19% appreciation in the Canadian currency against the U.S. dollar since last year had the effect of increasing reported revenues by about $4.5 million in the third quarter.

Consolidated gross profit in the third quarter of fiscal 2010 was $19.4 million compared to $21.8 million in the same period of fiscal 2009. Gross profits were lower mainly in the U.S. feed operations of RFO and in Ridley Feed Ingredients (RFI) as a result of reduced unit margins relative to last year. RFI's gross profit last year benefited from more favourable inventory positions.

Operating expenses, which include selling, general and administrative expenses as well as amortization of property, plant and equipment, were $15.0 million in the third quarter of fiscal 2010 compared to $16.2 million last year. Lower operating costs reflect cost management initiatives undertaken in the previous year.

EBITA is comprised of operating income before amortization and exceptions. For the three months ended March 31, 2010 EBITA was $6.6 million compared to $7.7 million for the same period last year. There were no exceptions of material significance in the third quarters of 2010 or 2009.

Net earnings after taxes for the third quarter of fiscal 2010 were $2.5 million (earnings per share of $0.19) compared with $3.5 million (earnings per share of $0.25) in the same period of fiscal 2009.

Comprehensive income is the change in net assets that results from transactions, events and circumstances from sources other than investments by and/or distributions to shareholders. Other comprehensive income (OCI) is comprised entirely of unrealized gains and losses on translation of financial statements of related entities with foreign functional currency to U.S. dollar reporting currency. Ridley recorded comprehensive income in the third quarter of fiscal 2010 of $1.9 million, comprised of net income of $2.5 million, as reported above, less unrealized losses of $0.5 million on the translation to U.S. currency of financial statements of Canadian entities.

Consolidated Nine Months Results

For the nine months ended March 31, 2010, revenues of $427.2 million were 9.8% lower than the same period in the previous year. Lower raw material prices and a 5.5% year-to-date decrease in volume accounted for most of the decline in revenue. Softer demand for animal feed products is reflective of economic difficulties that persisted for most of the year for livestock and poultry producers and the resulting reduction in animal herd sizes. Gross profit for the first nine months of the year was $60.4 million, a decline of 9.9% from the prior year. The decline in gross profits follows from decreased volume for the year to-date and lower unit margins this year compared to last year when the company held more favourable raw material inventory positions.

Operating expenses of $45.5 million in the nine months of fiscal 2010 were $8.9 million lower than the previous year. Included in operating expenses last year were $2.1 million in restructuring expenses and an asset impairment loss of $1.4 million for closure of a redundant facility. Operating expenses last year also included $0.8 million in advisory services related to the strategic review process which concluded following the sale by Ridley Corporation Limited of its 69% interest in Ridley Inc. to Fairfax Financial Holdings Limited. Last year also included a $0.3 million gain on the sale of property of a closed facility.

EBITA in the nine months of fiscal 2010 was $21.3 million compared to $22.1 million for the same period last year. EBITA is comprised of operating income before amortization and exceptions, which last year included a gain on the sale of facilities ($0.3 million), restructuring charges ($2.1 million) and an asset impairment loss ($1.4 million). There were no exceptions of material significance in the nine months of fiscal 2010.

Net earnings after taxes for the nine months ended March 31, 2010 were $8.6 million (earnings per share of $0.64) compared with $7.1 million (earnings per share of $0.51) in the same period last year.

Reconciliation of Non-GAAP Financial Measures

The Company reports its financial results according to Canadian GAAP. However, included in this management discussion and analysis are certain non-GAAP financial measures and ratios which the Company's management believes provide useful information in measuring the financial performance and financial condition of the Company. These measures and ratios do not have a standardized meaning prescribed by Canadian GAAP and, therefore, may not be comparable to similar measures presented by other public companies, nor should they be construed as an alternative to other financial measures described by Canadian GAAP. Operating income is defined as net earnings before finance costs, interest income and provision for income taxes. EBITA is defined as operating income before amortization and exceptions.

The following table is a reconciliation of EBITA to net earnings, the most closely comparable GAAP measure to EBITA:

EBITA Three months ended Nine months ended
  March 31 March 31
($ million) 2010 2009 2010 2009
Net earnings 2.5 3.5 8.6 7.1
Provision for income taxes 2.0 1.7 6.1 3.9
Interest income (0.2) (0.1) (0.3) (0.4)
Finance costs 0.2 0.5 0.5 2.0
Operating income 4.5 5.6 14.8 12.6
Amortization of property, plant and equipment 2.1 2.1 6.3 6.2
Other amortization 0.1 0.0 0.1 0.1
Gain on sale of facilities - - - (0.3)
Asset impairment loss - - - 1.4
Restructuring charges - - - 2.1
EBITA 6.6 7.7 21.3 22.1
         
SEGMENT RESULTS        
The following is a summary of operating income of Ridley's reporting segments.    
Operating Income Three months ended Nine months ended
  March 31 March 31
($ million) 2010 2009 2010 2009
Ridley Feed Operations (RFO) $0.4 $1.1 $4.3 $0.3
Ridley Feed Ingredients (RFI) 0.9 2.4 3.3 7.3
Ridley Nutrition Solutions (RNS) 3.9 2.7 9.6 8.8
Corporate (0.7) (0.7) (2.3) (3.9)
Consolidated Operating Income $4.5 $5.6 $14.8 $12.6

Ridley Feed Operations (RFO)

The Ridley Feed Operations (RFO) segment consists of full-line animal feed manufacturing facilities operating in the United States and Canada, producing and marketing products primarily for commercial livestock and poultry segments. RFO's overall volume was lower by 5.1% in the third quarter of fiscal 2010 compared to last year. The downturn in volume is reflective of reduced animal numbers and competitive pressures, particularly in Canada. Volume in Canadian feed operations declined by 8.9% for the quarter, while volume in U.S. feed operations declined by 2.8% from last year. For the nine months of fiscal 2010 RFO volume is lower than last year by 6.2%. Year to-date volume in Canadian feed operations was lower by 9.5% compared to last year, while volume in U.S. feed operations was lower by 4.4%. Approximately two thirds of the decrease in volume in Canada this year relates to the swine sector where most producers have operated at significant losses for most of the year due to low hog prices and high feed costs. The U.S. dairy sector, which has also experienced poor profitability this year, accounted for a third of the volume decline at RFO's U.S. feed operations.

Lower commodity prices this year over last year translated into lower revenue for RFO as feed prices are generally set at a fixed margin above raw material costs. Total RFO revenue, including intersegment sales, was 2.0% lower in the third quarter of 2010 compared to last year due to lower volume. For the year-to- date, RFO revenues are 12.6% lower than last year. Currency exchange appreciation in the Canadian dollar since last year had the effect of increasing reported revenues for the third quarter this year by $4.5 million and for the year-to-date of about $6.2 million.

RFO gross profits of $10.4 million in the third quarter this year were 13.0% lower than the same period last year due to lower unit margins and a decline in sales volume. For the nine months of fiscal 2010, RFO gross profits of $34.5 million were lower by 6.9%, largely due to the 6.2% decline in volume.

RFO operating expenses in the third quarter were lower by $0.8 million as a result of cost reduction initiatives undertaken last year. For the year-to-date, RFO operating expenses are lower by $6.5 million compared to the same period last year. Operating expenses last year included $1.9 million related to restructuring charges and $1.4 million for closure of a facility.

Ridley Feed Ingredients (RFI)

The Ridley Feed Ingredients (RFI) segment consists of vitamin and trace mineral premixes, small packaged specialty products, medicated and non-medicated feed additives and micro feed ingredients produced and distributed through a specialized facility in Illinois. RFI revenues in the third quarter of fiscal 2010, including intersegment sales, increased by 8.9% from the same period last year, mainly the result of improved volume reflecting some stabilization of demand in key markets. The absence this year of gains from ingredient inventory positions has reduced RFI unit margins from last year. As a result, RFI gross profits were lower by 45.6% in the third quarter of fiscal 2010 compared to last year. Gross profits for the nine months of fiscal 2010 were 37.7% lower than the same period last year.

Ridley Nutrition Solutions (RNS)

Ridley Nutrition Solutions (RNS) includes Ridley's feed supplement block and equine nutrition businesses. RNS volume has been impacted negatively by the lower trending cattle population of the last several years and the effect of the economic recession last year on the purchasing behaviour of cattle producers. Weather and pasture conditions have been more favourable to nutrition supplementation this year. Following a slow start earlier this year, RNS volume in the third quarter increased by 4.0% over last year. Volume after nine months is about even with last year.

RNS gross profits in the third quarter this year were 10.2% higher than last year due to improved volume and more favourable unit margins as the RNS product mix continued improving towards higher value- added products. Operating income for the quarter was ahead of last year by 43.5% reflecting the improvement in gross profits and a 13.7% reduction in overhead expenses.

Corporate

Corporate expenses include certain corporate management, board of directors' and other public company expenses. Corporate expenses in the nine months this year were $1.6 million lower than last year, mainly the result of unusual expenditures last year related to the strategic review process and restructuring initiatives.

Liquidity/Capital Resources/Cash Flow

Ridley's working capital and debt to equity positions are summarized below:

  March December September June        March
  31 31 30 30 31
Balances ($000) as of:                                2010            2009          2009        2009 2009
Working capital (i) $47,612 $47,816 $47,022 $45,546 $53,163
Net debt (ii) 11,842 11,429 11,912 8,652 16,247
Equity 152,121 153,061 151,478 149,013 155,461
Net debt to equity ratio                                7.8%            7.5%          7.9%        5.8%        10.5%
  1. Working capital is defined as current assets less current liabilities, excluding cash and short term deposits.
  2. Net debt is defined as bank obligations and capital leases, less cash and short term deposits.

Net debt of $11.8 million as at March 31, 2010 was comprised of long term debt of $11.4 million and a $0.9 million balance in revolving credit, less $0.5 million of cash and short term deposits. For the nine months year-to-date the Company funded all capital expenditures from operating cash flows.

The following is a summary of cash generated or utilized by business operations, net of capital expenditures on plant and equipment, excluding business acquisitions.

Summary of Changes in Cash Available Three months ended Nine months ended
  March 31 March 31
($ million) 2010 2009 2010 2009
Cash flow from operating activities 4.5 7.2 14.9 14.8
Net decrease (increase) in non-cash working capital balances 1.9 (3.8) (3.2) (13.2)
Decrease in loans receivable, net 0.2 0.1 0.3 0.1
Proceeds on disposal of property, plant and equipment - 0.1 0.4 0.6
Capital expenditures, excluding business acquisitions (2.3) (1.6) (7.8) (6.2)
Business acquisitions - - - (0.1)
Increase (decrease) in cash available 4.2 2.0 4.6 (4.1)

For the third quarter of fiscal 2010, cash flows from operations net of capital expenditures were $4.2 million compared to $2.0 million in the same three-month period last year. Cash flows in the third quarter last year were reduced by the payment of $4.9 million into a settlement trust fund managed by the representative plaintiffs in the BSE class action lawsuits.

In the third quarter of fiscal 2010, utilizing cash generated from operating activities, the Company repurchased 456,600 of its common shares under a normal course issuer bid at a cost including commissions of $3.6 million. Since the start of the current fiscal year the Company has repurchased 983,000 of its common shares at a cost including commissions of $7.4 million.

Capital Expenditures

Expenditures on plant and equipment in the third quarter of fiscal 2010 were $2.3 million compared to $1.6 million in the same period a year ago. For the nine months to-date, $2.7 million has been invested in the Worthington, MN and Mendota, IL facility expansion projects. The remaining balance of capital expenditures, $4.7 million, was made on a variety of smaller projects for the maintenance of equipment and facilities.

Outstanding Share Data

Ridley's share capital consists of an unlimited number of common shares, with no par value. On December 11, 2009 the Company received approval from the Toronto Stock Exchange (the "TSX") to initiate a normal course issuer bid for the Company's shares through the facilities of the TSX. The share repurchase program permits the Company to purchase for cancellation up to 663,169 of its common shares over the twelve month period ending December 14, 2010. This normal course issuer bid follows a previous share repurchase program which terminated on December 14, 2009. Under the previous share repurchase program, the Company had repurchased for cancellation 595,922 shares at an average price of C$7.48 per share, excluding commissions. As at March 31, 2010, the Company had repurchased for cancellation 456,600 shares at an average purchase cost of C$8.33 per share excluding commissions under the new normal course issuer bid. The number of shares outstanding as at March 31, 2010 and as at April 29, 2010 was 12,806,778.

Seasonality and Commodity Variability

The Company experiences seasonal variations in revenue. Historically, revenue is strongest in the second and third fiscal quarters when colder weather from October to March increases demand for beef feed. Other product lines are only marginally affected by seasonal conditions. Commodity-based agricultural raw materials constitute a significant component of the Company's complete feed production. Fluctuating commodity prices can influence revenues and associated cost of sales as selling prices and product costs generally move in relation to changes in commodity prices.

Selected Quarterly Financial Information

(US $ millions except per share data)        Fiscal First Second Third Fourth
  Year Quarter Quarter Quarter Quarter
Revenue 2010 135.7 150.0 141.6  
  2009 169.3 163.6 140.7 129.8
  2008 139.8 167.0 167.3 159.4
Net earnings (loss) (before exceptions (i) 2010 1.1 5.0 2.5  
net of income taxes). 2009 2.7 3.0 3.5 (0.2)
  2008 2.0 4.5 5.2 0.9
Net earnings (loss) 2010 1.1 5.0 2.5  
  2009 2.9 0.7 3.5 (8.4)
  2008 2.6 (2.8) 5.0 1.2
Net earnings (loss) per share (EPS) 2010 0.08 0.37 0.19  
  2009 0.21 0.05 0.25 (0.60)
  2008 0.19 (0.21) 0.37 0.08
  1. Exceptions include: asset impairment loss, restructuring charges, gain on sale of facilities, claim settlement and goodwill impairment.

Internal Control Over Financial Reporting

The Chief Executive Officer and Chief Financial Officer have each signed form 52-109F2 – Certification of Interim Filings and filed it with the appropriate securities regulators in Canada in compliance with Multilateral Instrument 52-109 – Certification of Disclosure in Issuers' Annual and Interim Filings issued by the Canadian Securities Administrators. There has been no change in Ridley's internal controls over financial reporting or disclosure controls and procedures that occurred during the most recent interim period that has materially affected, or is reasonably likely to materially affect, Ridley's internal control over financial reporting.

International Financial Reporting Standards

The Canadian Accounting Standards Board (AcSB) requires all public companies to adopt International Financial Reporting Standards (IFRS) for interim and annual financial statements for fiscal years beginning on or after January 1, 2011. Companies will be required to provide IFRS comparative information for the previous fiscal period. The impact of the adoption of IFRS on the consolidated financial statements of the Company may be significant and, as such, the Company is developing its convergence plan and entries to transition its financial statement reporting, presentation and disclosure for IFRS to meet its first quarter fiscal 2012 deadline. The Company continues to evaluate the potential impact of IFRS on its consolidated financial statements. The process will be ongoing as new standards and recommendations are issued by the International Accounting Standards Board and AcSB.

BSE Class Action Lawsuits

In April 2005, representative plaintiffs filed proposed class actions in Alberta, Saskatchewan, Ontario and Quebec against the Government of Canada and Ridley Inc. to include all Canadian cattle farmers who allegedly suffered damage as a result of international bans on trade in Canadian beef and cattle following the 2003 diagnosis of Bovine Spongiform Encephalopathy (BSE) in a cow in Alberta. A settlement agreement between Ridley and the representative plaintiffs was finalized in January 2009 when Ridley made payment of C$6.0 million into a plaintiffs' settlement trust fund for the benefit of the plaintiffs in continuation of their litigation against the Government of Canada. In agreeing to the settlement, Ridley made no admission of liability or wrongdoing in the matter. The settlement effectively capped Ridley's exposure to the claims made by the plaintiffs to that amount.

Following the settlement agreement with plaintiffs the Ontario Superior Court granted Ridley's motion for dismissal of the Ontario action as against Ridley on July 28, 2009. The Quebec Superior Court dismissed the Quebec action as against Ridley on November 13, 2009. The Alberta Court of Queen's Bench dismissed the Alberta action as against Ridley on March 2, 2010. Ridley will seek to obtain a similar court order in Saskatchewan where the plaintiffs commenced an identical action. If the Saskatchewan court grants the dismissal motion, Ridley will cease to be a party to the continuing class action lawsuits.

Forward-Looking Information

This report contains "forward-looking" information. The forward-looking information includes statements concerning Ridley's outlook for the future, as well as other statements of beliefs, plans and strategies or anticipated events, and similar expressions concerning matters that are not historical facts. Forward- looking information and statements are subject to risks and uncertainties that could cause actual results to differ materially from those expressed in, contemplated or implied by, such statements. These risks and uncertainties include the ability to make effective acquisitions and successfully integrate newly acquired businesses into existing operations, the availability and prices of raw materials and supplies, livestock disease, product pricing, the competitive environment and related market conditions, operating efficiencies, access to capital, the cost of compliance with environmental and health standards and other regulatory requirements affecting Ridley's business, adverse results from ongoing litigation, and actions of domestic and foreign governments. Other risks are outlined in the Risk Management section of the MD&A included in Ridley's Annual Report. Unless otherwise required by applicable securities law, Ridley disclaims any intention or obligation to publicly update or revise this information, whether as a result of new information, future events or otherwise. Ridley cautions readers not to place undue reliance upon forward-looking statements.

OUTLOOK

The economic drivers of Ridley's commercial feed business are strongly influenced by the dynamics of the North American livestock and poultry production industry. Livestock and poultry sectors are adjusting to higher feed costs and reduced protein demand following the global recession of 2008 and 2009. Animal populations declined in this period as poor producer returns led to significant liquidation of breeding stock. Feed ingredient prices rose rapidly in 2007 and 2008 but have now stabilized. Market conditions for beef and pork producers in Canada have been aggravated by the appreciation of the Canadian currency against the U.S. dollar.

Economic prospects for livestock and poultry producers are now improving as a result of lower animal populations and generally rising meat, milk and egg prices, which will be positive for Ridley's long-term outlook. However, it is difficult to project how long it will take for animal numbers to recover and raise the level of feed demand. In the near term, producers' feeding strategies are likely to remain conservative while they rebuild equity in their operations.

Management continues to focus on the needs of Ridley's customers, making customer satisfaction a top priority while helping producers find profitable feeding solutions in a challenging economic environment. Maintaining a balanced presence amongst each of the sectors of livestock and poultry production remains important for diversifying Ridley's earnings across multiple geographies and product categories.

Ridley Inc., headquartered in Mankato, Minnesota and Winnipeg, Manitoba, is one of North America's leading commercial animal nutrition companies. Ridley employs more than 900 people in the United States and Canada in the manufacture and distribution of a full range of animal nutrition products under highly regarded trade names. Ridley's common shares are listed on The Toronto Stock Exchange (trading symbol: RCL). Additional information, including the notes to the interim financial statements and Ridley's Annual Information Form (AIF), are available at www.sedar.com. Visit our website at www.ridleyinc.com.

RIDLEY Inc.      
Consolidated Balance Sheets      
(Unaudited)      
(Expressed in thousands of U.S. dollars) March 31 June 30 March 31
  2010 2009 2009
ASSETS      
Current assets      
   Cash and short-term deposits 456 1,954 1,287
   Accounts receivable 33,513 30,697 32,648
   Inventories (Note 8) 50,994 48,153 49,667
   Income taxes recoverable 183 1,867 504
   Prepaids and other current assets 1,256 721 1,573
   Current portion of loans receivable 937 1,013 1,047
   Assets held-for-sale (Note 12) 148 245 -
   Future income tax asset 1,579 1,545 1,642
Total current assets 89,066 86,195 88,368
 
Non-current assets      
   Loans receivable 426 603 924
   Assets held-for-sale (Note 12) 450 598 817
   Property, plant and equipment 92,224 88,604 87,784
   Future income tax asset 4,577 3,425 -
   Other assets 3,750 4,431 3,834
   Other intangibles 4,587 4,379 4,422
   Goodwill 37,982 37,982 48,192
Total non-current assets 143,996 140,022 145,973
 
TOTAL ASSETS 233,062 226,217 234,341
 
LIABILITIES and SHAREHOLDERS' EQUITY      
Current liabilities      
   Outstanding cheques in excess of bank balances 3,295 2,038 -
   Short-term debt 864 364 -
   Accounts payable and accrued liabilities 34,883 34,525 30,858
   Advances from customers 1,903 1,716 3,008
   Current portion of long-term debt 53 52 52
Total current liabilities 40,998 38,695 33,918
 
Long-term liabilities      
   Long-term debt 11,381 10,190 17,482
   Future income tax liability 24,595 24,427 23,492
   Other accrued liabilities 3,967 3,892 3,988
Total long-term liabilities 39,943 38,509 44,962
 
Total liabilities 80,941 77,204 78,880
 
Shareholders' equity      
   Share capital (Note 11) 53,229 57,315 57,448
   Retained earnings 88,191 81,285 89,654
   Accumulated other comprehensive income (Note 4) 10,701 10,413 8,359
  98,892 91,698 98,013
Total shareholders' equity 152,121 149,013 155,461
 
TOTAL LIABILITIES & SHAREHOLDERS' EQUITY 233,062 226,217 234,341
RIDLEY Inc.        
Consolidated Statements of Earnings and Retained Earnings      
(Unaudited)        
(Expressed in thousands of U.S. dollars) Three Months Ended Nine Months Ended
  March 31 March 31
  2010 2009 2010 2009
 
Revenue 141,558 140,743 427,234 473,609
Cost of sales (Note 8) 122,117 118,954 366,853 406,582
Gross profit 19,441 21,789 60,381 67,027
 
Operating (income) expenses        
     Selling, general and administrative 12,694 13,857 38,500 46,338
     Amortization of property, plant and equipment 2,112 2,059 6,297 6,175
     Gain on sale of facility (Note 12) - - - (316)
     Research and development 102 196 600 682
     Other amortization 55 43 142 130
     Asset impairment loss (Note 13) - - - 1,407
Net operating expenses 14,963 16,155 45,539 54,416
 
Operating income 4,478 5,634 14,842 12,611
 
Finance costs (159) (545) (507) (1,995)
Interest income 158 126 324 388
Earnings before income taxes 4,477 5,215 14,659 11,004
 
Provision for income taxes (Note 9) 2,027 1,741 6,064 3,925
Net earnings for the period 2,450 3,474 8,595 7,079
 
Retained earnings, beginning of period 86,706 86,199 81,285 82,594
Net earnings for the period 2,450 3,474 8,595 7,079
Excess over stated value of shares        
 purchased for cancellation (965) (19) (1,689) (19)
Retained earnings, end of period 88,191 89,654 88,191 89,654
 
Net earnings per share, basic and diluted 0.19 0.25 0.64 0.51
 
Consolidated Statements of Comprehensive Income        
(Unaudited)        
(Expressed in thousands of U.S. dollars) Three Months Ended Nine Months Ended
  March 31 March 31
  2010 2009 2010 2009
 
Net earnings for the period 2,450 3,474 8,595 7,079
Unrealized gains (losses) on translation of financial        
 statements of related entities with foreign functional        
 currency to U.S. dollar reporting currency (Note 4) (527) (629) 288 (4,946)
Other comprehensive income (loss) for the period (527) (629) 288 (4,946)
Comprehensive income for the period 1,923 2,845 8,883 2,133
RIDLEY Inc.        
Consolidated Statements of Cash Flows        
(Unaudited)        
(Expressed in thousands of U.S. dollars) Three Months Ended Nine Months Ended
  March 31  March 31 
  2010 2009 2010 2009
 
Cash flow from operating activities        
   Net earnings for the period 2,450 3,474 8,595 7,079
   Add (deduct) items not affecting cash:        
   Amortization of property, plant and equipment 2,112 2,059 6,297 6,175
   Future income taxes (235) 1,434 (449) (34)
   Asset impairment loss (Note 13) - - - 1,407
   Loss on sale of property, plant and equipment 72 30 186 79
   Gain on sale of facility (Note 13) - - - (316)
   Other amortization 55 43 142 130
   Other items not affecting cash 44 116 138 264
  4,498 7,156 14,909 14,784
Net change in non-cash working capital balances related to operations:        
   Accounts receivable 2,821 6,853 (1,339) 315
   Inventories (6) 8,517 (1,683) 17,437
   Prepaids and other current assets 853 127 (490) (234)
   Accounts payable and accrued liabilities (114) (14,065) (1,475) (26,606)
   Claim settlement provision (Note 14) - (4,877) - (4,877)
   Advances from customers (1,470) (1,326) 156 799
   Income taxes payable and recoverable (216) 1,013 1,667 (35)
Net cash from operating activities 6,366 3,398 11,745 1,583
 
Cash flow from investing activities        
   Proceeds on disposal of facilities, property, plant and equipment 5 71 373 597
   Purchase of property, plant and equipment (2,342) (1,613) (7,440) (6,245)
   Purchase of intangibles - - (350) -
   Decrease in loans receivable, net 180 143 274 143
   Business acquisitions (Note 10) - - - (137)
Net cash utilized for investing activities (2,157) (1,399) (7,143) (5,642)
 
Cash flow from financing activities        
   Repayment of short- and long-term debt (3,333) (10,911) (9,826) (37,186)
   Proceeds from short- and long-term debt 2,286 4,872 10,068 39,356
   Payment of finance costs - (416) - (416)
   Purchases of share capital for cancellation (Note 11) (3,639) (198) (7,384) (201)
Net cash from (utilized for) financing activities (4,686) (6,653) (7,142) 1,553
 
Effect of exchange rate changes on cash (36) 262 (215) 283
 
Decrease in cash and cash equivalents (513) (4,392) (2,755) (2,223)
Cash and cash equivalents - beginning of period (2,326) 5,679 (84) 3,510
Cash and cash equivalents - end of period (2,839) 1,287 (2,839) 1,287
 
Cash and cash equivalents are comprised of:        
   Cash and short-term deposits 456 1,287 456 1,287
   Outstanding cheques in excess of bank balances (3,295) - (3,295) -
  (2,839) 1,287 (2,839) 1,287

Contact Information

  • RIDLEY Inc.
    Steve VanRoekel
    President and CEO
    (507) 388-9412
    or
    RIDLEY Inc.
    Gordon Hildebrand
    Chief Financial Officer
    (507) 388-9577
    www.ridleyinc.com