Ridley Inc.
TSX : RCL

Ridley Inc.

April 27, 2011 21:32 ET

Ridley Inc. Reports Financial Results for Fiscal 2011 Third Quarter

MANKATO, MINNESOTA and WINNIPEG, MANITOBA--(Marketwire - April 27, 2011) - Ridley Inc. (TSX:RCL) today reported its financial results for the third quarter of fiscal 2011, the three months ended March 31, 2011. All currency amounts are stated in U.S. dollars unless otherwise noted.

For the three months ended March 31, 2011, Ridley earned $3.2 million after income taxes (25 cents per share) compared to $2.5 million (19 cents per share) last year. Earnings before interest, taxes and amortization (EBITA (i)) for the third quarter of fiscal 2011 were $7.4 million compared to $6.6 million last year.

On a year-over-year basis the third quarter of fiscal 2011 yielded positive results in Ridley's key financial measures. Gross profits increased by 7.7% over the last year to $20.9 million as a result of strong sales of feed supplement blocks and improved performance in Canadian feed operations. While overhead expenses were moderately higher in the third quarter, Ridley's operating income increased by 17.1% to $5.2 million. Notwithstanding historically high feed ingredient prices which have driven up working capital requirements, Ridley generated positive cash flows in the third quarter and paid down debt net of cash to under $1.3 million by the end of the period. For the fifth consecutive year Ridley has also improved its employee safety performance with a reduction by half in the number of recordable workplace injuries by the OSHA standard without a single lost-time injury in the year thus far.

Sales volumes in fiscal 2011 have been negatively affected by the difficult economic environment for livestock and poultry producers in which historically high feed costs have discouraged growth in North American herd and flock sizes. Average unit margins continue to increase as Ridley's product mix shifts towards higher value-added supplements, blocks and premixes. The increase in overhead costs in the third quarter of fiscal 2011 reflected the engagement of external consultants to assist in several initiatives to improve manufacturing productivity and enhance customer service.

Favourable economic conditions for U.S. beef producers and expanded distribution in block supplement products helped the Ridley Nutrition Solutions (RNS) segment to a 9.4% improvement in operating income to $4.3 million in the third quarter of fiscal 2011. However, high feed costs and low animal numbers continue to weigh on sales volumes in the Ridley Feed Operations (RFO) segment which recorded operating income of $0.6 million in the third quarter compared to $0.4 million last year. Ridley Feed Ingredients (RFI) contributed $1.0 million to operating income this quarter compared to $0.9 million last year on improved unit margins.

MANAGEMENT'S DISCUSSION AND ANALYSIS

The following Management Discussion and Analysis as of April 27, 2011 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 2011 third quarter results:

Three months endedNine months ended
Summary of ResultsMarch 31March 31
($ million except for EPS)2011201020112010
Revenue$154.2$141.6$441.0$427.2
Gross profit20.919.461.960.4
Operating income5.24.515.614.8
Net earnings3.22.59.68.6
Diluted earnings per share (EPS)$0.25$0.19$0.75$0.64
EBITA (i)7.46.622.121.3
(i) 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.

Consolidated Third Quarter Results

Revenue of $154.2 million in the third quarter of fiscal 2011 was $12.6 million higher than 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. Although sales volume, as measured in tons of feed products sold, was 3.8% lower than the prior year, average unit selling prices were higher this year as a result of increasing raw material costs and the Company's continuing focus on higher value-added products. The decline in volume was concentrated in the Ridley Feed Operations (RFO) segment where lower-margin complete feed volumes have been sensitive to lower animal numbers and higher feed prices.

Consolidated gross profit in the third quarter of fiscal 2011 was $20.9 million compared to $19.4 million in the same period last year. The $1.5 million increase in gross profits over the prior year reflects higher unit margins in all reporting segments, growth in sales volumes of feed supplement blocks and lower manufacturing costs following two plant closures in Canadian operations that offset a decrease in sales volumes of lower-margin complete feeds.

Operating expenses, which include selling, general and administrative expenses as well as amortization of property, plant and equipment, were $15.7 million in the third quarter of fiscal 2011 compared to $15.0 million last year. Increased employee benefit costs, advertising and sales promotion, and professional consulting fees accounted for most of the $0.7 million increase in operating expenses this year.

Starting in fiscal 2010 the Company has engaged external consultants with expertise in lean manufacturing principles to assist in the identification of opportunities to improve the efficiency of manufacturing and administrative processes and enhance customer service over the long term. Lean manufacturing practices focus on organizing the accurate and timely flow of raw materials, the design of optimal manufacturing processes and the efficient utilization of all resources necessary for delivering customer value.

EBITA is comprised of operating income before amortization and exceptions. For the three months ended March 31, 2011 EBITA was $7.4 million compared to $6.6 million for the same period last year. There were no exceptions of material significance in the third quarter of fiscal 2011 or 2010.

Net earnings for the third quarter of fiscal 2011 were $3.2 million (earnings per share of $0.25) compared with $2.5 million (earnings per share of $0.19) in the same period of fiscal 2010.

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. Comprehensive income of $3.4 million in the third quarter of fiscal 2011 was comprised of net income of $3.2 million, as reported above, plus unrealized gains of $0.1 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, 2011, revenue of $441.0 million was $13.8 million higher than the same period of the previous year. Higher average unit selling prices that reflect the shift in product mix to higher value added products and increased raw material costs more than offset a 4.7% decline in volumes. Softer demand for feed products, particularly in complete feeds, is reflective of the reduced size of cattle and swine herds and poultry flocks in Canada and the United States. Consolidated gross profit for the first nine months of fiscal 2011 was $61.9 million, an increase of $1.5 million (2.5%) from the prior year. Improved profit margins were the result of stronger volumes of feed supplement blocks and higher average unit margins resulting from the shift to higher value-added products.

Operating expenses of $46.3 million in the first nine months fiscal 2011 were higher by $0.7 million (1.6%) over the prior year. Expenditures on professional consultants to support various lean manufacturing and administrative process improvement initiatives were $0.7 million in the nine months of fiscal 2011.

EBITA in the nine months of fiscal 2011 was $22.1 million compared to $21.3 million for the same period last year. EBITA is comprised of operating income before amortization and exceptions. There were no unusual items of material significance in the nine months of fiscal 2011 or 2010.

Net earnings after taxes for the nine months ended March 31, 2011 were $9.6 million (earnings per share of $0.75) compared with net earnings after taxes of $8.6 million (earnings per share of $0.64) 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:

EBITAThree months endedNine months ended
March 31March 31
($ million)2011201020112010
Net earnings$3.2$2.5$9.6$8.6
Provision for income taxes1.72.05.66.1
Interest income(0.1)(0.2)(0.2)(0.3)
Finance costs0.40.20.70.5
Operating income$5.2$4.5$15.6$14.8
Amortization of property, plant and equipment2.02.05.95.9
Other amortization0.20.20.60.5
EBITA$7.4$6.6$22.1$21.3

SEGMENT RESULTS

The following is a summary of operating income of Ridley's reporting segments.

Operating Income (Loss)Three months endedNine months ended
March 31March 31
($ million)2011201020112010
Ridley Feed Operations (RFO)$0.6$0.4$4.7$4.3
Ridley Feed Ingredients (RFI)1.00.92.73.3
Ridley Nutrition Solutions (RNS)4.33.910.69.6
Corporate(0.7)(0.7)(2.4)(2.3)
Consolidated Operating Income$5.2$4.5$15.6$14.8

Ridley Feed Operations (RFO)

The Ridley Feed Operations (RFO) segment is comprised of Feed-Rite and Hubbard Feeds which operate as traditional Canadian and U.S. feed businesses producing a broad range of complete feeds, supplements and premixes for commercial livestock and poultry sectors as well as companion animal owners and lifestyle segments. In the third quarter of fiscal 2011, RFO's overall volume was lower by 5.3% compared to last year. Volume in the Canadian operations of RFO was lower by 13.3% while volume in U.S. operations was only slightly lower by 0.8%. Reduced animal numbers and higher feed costs borne by livestock and poultry producers negatively impacted demand for lower-margin complete feed products of RFO.

RFO gross profits of $11.0 million in the third quarter this year were 5.7% higher than the same period last year. Average unit margins were higher as a result of the shift in sales volumes from lower-margin complete feeds to higher value-added supplements. Gross profits also improved from lower manufacturing costs in Canadian operations following the closure of two production facilities at the start of the current fiscal year. Because of higher overhead expenses, RFO's operating income of $0.6 million in the third quarter was only slightly improved from $0.4 million in the same period last year.

In the first quarter of fiscal 2011, production was discontinued at manufacturing facilities in Manitou and Arborg, Manitoba and customer volume from those plants was consolidated into larger facilities in Brandon and Winnipeg. Disposal of the facility at Arborg, Manitoba was completed in the second quarter of fiscal 2011.

Ridley Feed Ingredients (RFI)

The Ridley Feed Ingredients (RFI) segment produces and distributes vitamin and trace mineral premixes, small packaged specialty products, medicated and non-medicated feed additives and micro feed ingredients to customers throughout North America from its facility in Mendota, Illinois. RFI revenues of $28.8 million in the third quarter of fiscal 2011, including intersegment sales, were lower by 5.2% from the same period last year mainly as a result of a change in product mix to lower cost products relative to last year.

Gross profits of $2.0 million in the third quarter of fiscal 2011 increased 16.2% over the prior year on improved unit margins. In the same period operating income increased to $1.0 million from $0.9 million.

Ridley Nutrition Solutions (RNS)

Ridley Nutrition Solutions (RNS) includes Ridley's feed supplement block and equine nutrition businesses. RNS volume in the third quarter of fiscal 2011 was higher by 4.0% relative to last year. Economic conditions were favourable to feed block sales in the beef sector while expanded distribution helped RNS reach new customers for block supplements. RNS gross profits in the third quarter this year were $7.9 million compared to $7.3 million last year. Increased sales volumes and improved unit margins contributed to the 8.7% improvement in gross profits over last year.

RNS operating income in the third quarter of fiscal 2011 was $4.3 million compared to $3.9 million last year. Improved gross profits offset higher operating costs which included increased employee benefit expenses, sales promotion costs and consulting fees related to lean initiatives.

Capital Expenditures

Capital expenditures in the third quarter of fiscal 2011 were $1.5 million compared to $2.3 million in the same period a year ago. Capital expenditures in the period were mainly on a variety of routine equipment and facility upgrades. For the nine months year-to-date, capital expenditures were $5.5 million which was essentially the same as last year, excluding $2.2 million that was invested last year in major capacity expansions at facilities in Worthington, MN and Mendota, IL. Since the start of fiscal 2011, $1.0 million has been invested in robotic material handling equipment located in six facilities.

Liquidity/Capital Resources/Cash Flow

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

MarchDecemberSeptemberJuneMarch
3131303031
Balances ($000) as of:20112010201020102010
Working capital (i)$44,561$40,907$43,279$39,334$47,612
Net debt (ii)1,2591,8149,7476,71911,842
Equity157,969154,603149,563147,926152,121
Net debt to equity ratio0.8%1.2%6.5%4.5%7.8%
(i)Working capital is defined as current assets less current liabilities, excluding cash and short term deposits.
(ii)Net debt is defined as bank obligations and capital leases, less cash and short term deposits.

In the three months ended March 31, 2011 working capital balances (excluding cash and short term deposits) increased by $3.7 million to $44.6 million. An increase of $1.8 million in accounts receivable and inventories and a $1.7 million drawdown of customer prepayments were major factors in the increase in working capital in the third quarter. Although accounts receivable and inventory turns were improved over the prior year, higher raw material costs and correspondingly higher selling prices accounted for much of the increase in working capital balances.

Ridley's net debt as at March 31, 2011was $1.3 million. Since the start of fiscal 2011, the Company has reduced net debt by $5.5 million.

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

Summary of Changes inThree months endedNine months ended
Cash AvailableMarch 31March 31
($ million)2011201020112010
Cash flow from operating activities$6.0$4.5$17.3$14.9
Net decrease (increase) in non-cash working capital balances(3.8)1.9(4.7)(3.2)
Decrease (increase) in loans receivable, net-0.2-0.3
Proceeds on disposal of property, plant and equipment--0.30.4
Capital expenditures(1.5)(2.3)(5.5)(7.8)
Increase in cash available$0.7$4.2$7.4$4.6

In the third quarter of fiscal 2011 cash generated from operating activities, net of working capital changes and capital expenditures, was $0.7 million compared to $4.2 million in the same period last year. An increase in working capital balances of $3.1 million in fiscal 2011 against a decrease of $1.9 million in the same period last year accounted for the reduced cash flows in the third quarter of fiscal 2011. Most of the increased working capital requirements in the current period followed from the effect of higher raw material prices this year on accounts receivable and inventory balances.

Outstanding Share Data

Ridley's share capital consists of an unlimited number of common shares, with no par value. The number of shares outstanding as at March 31, 2011 and as at April 26, 2011 was 12,806,778.

On December 13, 2010 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 640,339 of its common shares over the twelve month period ending December 14, 2011. As at March 31, 2011, the Company had made no share repurchases under the new normal course issuer bid.

Selected Quarterly Financial Information

($ millions except per share data)Fiscal
Year
First
Quarter
Second
Quarter
Third
Quarter
Fourth
Quarter
Revenue2011127.6159.3154.2
2010135.7150.0141.6120.3
2009169.3163.6140.7129.8
Net earnings (loss) (before exceptions (i) net of income taxes).20111.54.93.2
20101.15.02.5(1.5)
20092.73.03.5(0.2)
Net earnings (loss)20111.54.93.2
20101.15.02.5(3.9)
20092.90.73.5(8.4)
Net earnings (loss) per share (EPS)20110.120.380.25
20100.080.370.19(0.28)
20090.210.050.25(0.60)
(i)Exceptions include: asset impairment loss, restructuring charges, gain on sale of facilities, claim settlement and goodwill impairment.

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.

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. The Company will report its financial results in accordance with IFRS for the year ended June 30, 2012 and its quarterly unaudited interim results starting with the quarter ending September 30, 2011. The Company will provide comparative data on an IFRS basis, including an opening balance sheet as at July 1, 2010.

The Company formally commenced its conversion plan in the first quarter of fiscal 2009 and has engaged the services of an external advisor with IFRS expertise to assist in the conversion. Regular reporting is provided to management and the Audit Committee of the Board of Directors. The conversion plan consists of three phases: assessment, analysis, and reporting and implementation. The assessment and analysis phases, including a third party diagnostic are complete. Initial work on reporting and implementation has started. The Company is currently working through the IFRS adjustments with its external auditors.

The Company has performed an evaluation of its financial information systems and the financial reporting impact of divergences identified to-date and concluded that the transition to IFRS will not require material modifications to information and reporting systems. The Company has concluded that its internal controls over financial reporting, disclosure controls and procedures are appropriately designed and properly functioning for an IFRS reporting environment. The design includes new controls over the transition accounting.

Areas where the adoption of IFRS will have a significant impact are:

  • IAS 19 – Employee Benefits, require the past service cost element of defined benefit plans to be amortized on a straight-line basis over the average period until the benefits become vested. To the extent the benefits are already vested, the past service cost is recognized immediately in earnings. Under GAAP, past service costs are amortized on a straight-line basis over the expected average remaining service period of active employees covered by the plan. Additionally, IAS 19 provides the following accounting policy choices regarding recognizing actuarial gains and losses: a) corridor method which is similar to current GAAP; b) directly to income in the year incurred; and c) directly in equity through comprehensive income. The International Accounting Standards Board has initiated a project to make fundamental improvements to the recognition, presentation and disclosure of defined benefit plans. An exposure draft was issued in April 2010, with the final standard expected to be issued in mid-2011. The exposure draft includes eliminating the use of the corridor method. The expected impact of adopting IAS 19 on the opening transition balance sheet is an increase in long-term liabilities of $11.4 million, a decrease in deferred income tax liability of $4.5 million and a net reduction in equity of $6.9 million. The Company has chosen to recognize actuarial gains and losses directly through equity as a component of other comprehensive income.

  • IAS 36 – Impairment of Assets, uses a one-step approach in determining impairment of long-lived and finite-lived intangible assets by comparing asset carrying values with the higher of fair value less costs to sell and value in use, which is based on discounted future cash flows. GAAP uses a two-step approach in determining impairment. First, a comparison is made of long-lived asset carrying values to undiscounted future cash flows to determine if impairment exists. If under this basis it is determined impairment exists, the impairment is calculated by comparing asset values to fair value in a similar manner as computed under IFRS. The use of discounted cash flows under IFRS in determining fair value less costs to sell compared to undiscounted cash flows in step one under GAAP results in the Company realizing an impairment of certain assets under IFRS. The expected impact of adopting IAS 36 on the opening transition balance sheet is a decrease in property, plant and equipment of $12.7 million, an increase in deferred tax benefits of $2.3 million, a decrease in deferred tax liabilities of $1.5 million and a net reduction to equity of $8.9 million.

The Company will elect to reclassify cumulative translation differences totalling $11.2 million as of January 1, 2010 from a separate component of equity to retained earnings. This has no impact on total equity.

The transition date to IFRS for the Company's majority shareholder is January 1, 2010. As a result, the Company has adopted a transition date to IFRS as at January 1, 2010. This commentary is intended to highlight only those areas believed to be the most significant and is not intended to be a complete list of all expected changes. The International Accounting Standards Board continues to issue new accounting standards and, as a result, the final impact of IFRS can only be accurately measured once all the applicable IFRS at the conversion date are known. The analysis and policy decisions that have been made are based on the Company's expectations regarding accounting standards anticipated to be effective upon conversion to IFRS. Readers are cautioned that disclosed impacts of IFRS on financial reporting are preliminary and may be subject to change.

Future IFRS changes will include a new accounting standard for leases. The International Accounting Standards Board issued an exposure draft with an underlying concept to record operating leases in a similar manner as finance leases. The result is recording a leased asset, which is amortized, and an offsetting lease liability. An element of interest is recognized over the lease term, as the liability is initially established at a discounted present value. The effective date for this change is expected to be no earlier than January 1, 2013.

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 its customer base, the North American livestock and poultry production industry. Producers' prices this year continue to respond positively to lower animal numbers and most livestock and poultry sectors in the U.S. and Canada are likely to operate profitably into 2011. However, feed input costs continue to trend higher and producers remain cautious of expansionary plans. In this environment, a continuing focus on higher value-added, lower inclusion products will be a key element of Ridley's competitive growth strategy. Maintaining a balanced presence amongst each of the sectors of livestock and poultry production will remain important for diversifying Ridley's earnings across multiple geographies and product categories.

The animal nutrition business in North America can be generally characterized as a mature industry in which cost efficiency is a key element of a competitive strategy. Ridley is developing a core competency in reducing waste in production systems and streamlining administrative processes through the adoption of lean manufacturing techniques. Initiated in fiscal 2010, Ridley has since invested about $1.0 million in several lean management initiatives organized and implemented by employee teams and supported by consulting experts to identify and reorganize unproductive processes throughout all operating units of Ridley. Through common training and continual practice of lean management techniques the company expects to see a return on this investment over the next several years in improved capacity utilization, lower costs of production and improved customer service.

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 31June 30March 31
201120102010
ASSETS
Current assets
Cash and short-term deposits1,577902456
Accounts receivable36,50028,07433,513
Inventories (Note 7)49,05447,73150,994
Income taxes recoverable596864183
Prepaids and other current assets1,2429251,256
Current portion of loans receivable1,070797937
Assets held-for-sale (Note 11)--148
Future income tax asset1,4261,5331,579
Total current assets91,46580,82689,066
Non-current assets
Loans receivable125365426
Assets held-for-sale (Note 11)699786450
Property, plant and equipment85,99785,04588,437
Future income tax asset6,2685,5424,577
Other assets3,1943,4703,750
Other intangibles7,5988,1668,374
Goodwill37,98237,98237,982
Total non-current assets141,863141,356143,996
TOTAL ASSETS233,328222,182233,062
LIABILITIES and SHAREHOLDERS' EQUITY
Current liabilities
Outstanding cheques in excess of bank balances1,7603,2503,295
Short-term debt2,2812,259864
Accounts payable and accrued liabilities39,05334,18934,883
Advances from customers2,1778381,903
Current portion of long-term debt565453
Total current liabilities45,32740,59040,998
Long-term liabilities
Long-term debt4995,30811,381
Future income tax liability25,74224,61024,595
Other accrued liabilities3,7913,7483,967
Total long-term liabilities30,03233,66639,943
Total liabilities75,35974,25680,941
Shareholders' equity
Share capital (Note 9)53,22953,22953,229
Retained earnings93,92584,32188,191
Accumulated other comprehensive income (Note 8)10,81510,37610,701
104,74094,69798,892
Total shareholders' equity157,969147,926152,121
TOTAL LIABILITIES & SHAREHOLDERS' EQUITY233,328222,182233,062
RIDLEY Inc.
Consolidated Statements of Earnings and Retained Earnings
(Unaudited)
(Expressed in thousands of U.S. dollars)Three Months
Ended
Nine Months
Ended
March 31March 31
2011201020112010
Revenue154,180141,558441,042427,234
Cost of sales (Note 7)133,233122,117379,143366,853
Gross profit20,94719,44161,89960,381
Operating (income) expenses
Selling, general and administrative13,29412,69439,31738,500
Amortization of property, plant and equipment2,0041,9905,8885,927
Gain on sale of facility (Note 11)--(56)-
Research and development223102554600
Other amortization183177569512
Net operating expenses15,70414,96346,27245,539
Operating income5,2434,47815,62714,842
Finance costs(407)(159)(652)(507)
Interest income73158195324
Earnings before income taxes4,9094,47715,17014,659
Provision for income taxes (Note 10)1,6622,0275,5666,064
Net earnings for the period3,2472,4509,6048,595
Retained earnings, beginning of period90,67886,70684,32181,285
Net earnings for the period3,2472,4509,6048,595
Excess over stated value of shares
purchased for cancellation (Note 9)-(965)-(1,689)
Retained earnings, end of period93,92588,19193,92588,191
Net earnings per share, basic and diluted0.250.190.750.64
Consolidated Statements of Comprehensive Income
(Unaudited)
(Expressed in thousands of U.S. dollars)Three Months
Ended
Nine Months
Ended
March 31March 31
2011201020112010
Net earnings for the period3,2472,4509,6048,595
Unrealized gains (losses) on translation of financial statements of related entities with foreign functional currency to U.S. dollar reporting currency (Note 8)119(527)439288
Other comprehensive income (loss) for the period119(527)439288
Comprehensive income for the period3,3661,92310,0438,883
RIDLEY Inc.
Consolidated Statements of Cash Flows
(Unaudited)
(Expressed in thousands of U.S. dollars)Three Months
Ended
Nine Months
Ended
March 31March 31
2011201020112010
Cash flow from operating activities
Net earnings for the period3,2472,4509,6048,595
Amortization of property, plant and equipment2,0041,9905,8885,927
Future income taxes540(235)1,027(449)
Gain on sale of facility (Note 11)-72(56)186
Loss on sale of property, plant and equipment2-39-
Other amortization183177569512
Other items not affecting cash3344191138
6,0094,49817,26214,909
Net change in non-cash working capital balances related to operations:
Accounts receivable(436)2,821(7,464)(1,339)
Inventories(870)(6)(566)(1,683)
Prepaids and other current assets663853(290)(490)
Accounts payable and accrued liabilities(564)(114)2,046(1,475)
Advances from customers(1,724)(1,470)1,317156
Income taxes payable and recoverable(891)(216)2691,667
Net cash from operating activities2,1876,36612,57411,745
Cash flow from investing activities
Proceeds on disposal of facilities, property, plant and equipment25316373
Purchase of property, plant and equipment(1,549)(2,342)(5,462)(7,440)
Purchase of intangibles---(350)
Decrease in loans receivable, net18180(30)274
Net cash utilized for investing activities(1,529)(2,157)(5,176)(7,143)
Cash flow from financing activities
Repayment of short- and long-term debt(3,336)(3,333)(22,919)(9,826)
Proceeds from short- and long-term debt3,2222,28617,77010,068
Purchases of share capital for cancellation (Note 9)-(3,639)-(7,384)
Net cash utilized for financing activities(114)(4,686)(5,149)(7,142)
Effect of exchange rate changes on cash(2)(36)(84)(215)
Increase (decrease) in cash and cash equivalents542(513)2,165(2,755)
Cash and cash equivalents - beginning of period(725)(2,326)(2,348)(84)
Cash and cash equivalents - end of period(183)(2,839)(183)(2,839)
Cash and cash equivalents are comprised of:
Cash and short-term deposits1,5774561,577456
Outstanding cheques in excess of bank balances(1,760)(3,295)(1,760)(3,295)
(183)(2,839)(183)(2,839)

Contact Information

  • RIDLEY Inc.
    Steve VanRoekel
    President and CEO
    (507) 388-9412

    RIDLEY Inc.
    Gordon Hildebrand
    Chief Financial Officer
    (507) 388-9577