MAAX Inc.: Second-Quarter Results
SAINTE-MARIE, QUEBEC--OCTOBER 4, 2001 - 09:22 EDT
MAAX today announced its financial results
for the second quarter ended August 31, 2001. During the
three-month period, consolidated sales grew by 5.5% to $132.1
million, up from $125.2 million for the corresponding quarter of
the previous fiscal year. Net income rose to $6.6 million or
$0.28 per share, compared to $8.1 million or $0.34 per share one
year ago. Cash flow from operations amounted to $12.3 million or
$0.52 per share, as opposed to $14.0 million or $0.59 per share
last year.
For the first six-month period, the Company achieved net income of
$13.4 million or $0.57 per share on sales of $266.7 million,
compared with net income of $15.5 million or $0.65 per share and
sales of $258.6 million for the first half of the previous fiscal
year. Cash flow from operations totalled $24.7 million or $1.04
per share, as opposed to $27.0 million or $1.14 per share for the
first half of last year.
Segmented Results
Fuelled by the Company's consistently strong position in the home
improvement industry, sales in the bathroom and kitchen segment
grew by 4.8% to total $109.4 million in the second quarter,
compared to $104.4 million one year earlier. Income before income
taxes and amortization of goodwill in the bathroom and kitchen
segment rose 3.9% to $12.0 million, up from $11.6 million in the
second quarter of last year. Since the beginning of the current
fiscal year, this segment has posted income before income taxes
and amortization of goodwill of $23.6 million on sales of $224.1
million, reflecting increases of 10.0% and 4.6% respectively
compared with the first six months of the previous fiscal year.
"These results are especially encouraging since MAAX is just
starting to benefit from the synergies arising out of the
integration plan implemented in this sector over the past two
years," said Andre Heroux, President and Chief Executive Officer
of MAAX.
Sales of spas rose 8.8% to $22.7 million, up from $20.9 million in
the second quarter of last year. This increase stemmed entirely
from the contracts won early in the year, but margins have been
affected by the price pressure connected with economic conditions
and increased operating costs. Consequently, the spa segment
incurred a loss before income taxes and amortization of goodwill
of $1.0 million, compared with income before income taxes and
amortization of goodwill of $1.7 million in the second quarter of
last year. For the first six-month period, the spa segment
recorded a loss before income taxes and amortization of goodwill
of $0.9 million on sales of $42.7 million. For the first half of
last year, this segment had generated income before income taxes
and amortization of goodwill of $4.0 million on sales of $44.5
million. Management intends to complete an aggressive turnaround
plan by the third quarter in order to ensure an optimal production
capacity to achieve profitable sales, especially in the Canadian
markets.
On a geographical basis, Canadian sales rose 6.4% to $40.3 million
in the second quarter, while U.S. sales grew by 6.9% to total
$87.6 million. International sales amounted to $4.1 million, a
decrease of 23.3%, mainly due to the European slowdown.
Financial Position
MAAX's strong financial position has improved even further since
the beginning of the fiscal year. As at August 31, 2001, the
long-term debt/total capitalization ratio was 26.6%, versus 27.7%
as at February 28, 2001. Similarly, working capital amounted to
$97.9 million for a current ratio of 2.84:1, compared to $87.4
million and a ratio of 2.52:1 at the beginning of the fiscal year.
Outlook
Mr. Heroux indicated that in light of the slowdown in the North
American economy, our management team has been acting proactively
to protect profitability in both business segments. That means
management can consistently and rapidly apply the necessary
corrective measures. In addition, the marketing strategy had
already been steered toward the home improvement segment, which
accounts for over 70% of the Company's sales. Despite all of
these efforts, the economic downturn could have an impact on
results for the current fiscal year, but it is still too early to
measure its magnitude and duration.
"Despite the immediate outlook, our growth strategy remains
unchanged: we are focused on launching innovative new products,
deployment of national sales and marketing programs, and expanding
geographically through targeted acquisitions," concluded Mr.
Heroux.
A conference call on results for the second quarter will be
webcasted at www.q1234.com and www.maax.com on Thursday, October
4, 2001, at 10:00 a.m., and will be available subsequently on
these two Web sites.
MAAX Inc. is a leading North American manufacturer of bathroom
products and accessories, spas and kitchen cabinets. The Company
currently employs 2,700 people in its 23 plants and seven
distribution centres across Canada, the United States and Europe.
Its common shares are traded on the Toronto Stock Exchange under
the ticker symbol MXA.
PROSPECTIVE FINANCIAL INFORMATION
This press release includes forward-looking statements that
involve a number of risks and uncertainties. The Company would
like to point out that its results, or the measures it adopts,
could differ materially from those indicated or underlying these
statements, or could have an impact on the realization of a
particular financial projection.
/T/
MAAX INC.
CONSOLIDATED BALANCE SHEETS
(in thousands of dollars)
-----------------------------------------------------------------------
-----------------------------------------------------------------------
August February
31, 28,
2001 2001
(unaudited)
-----------------------------------------------------------------------
Assets
Current assets:
Cash $2,847 $-
Accounts receivable 72,814 61,474
Inventories 68,982 73,158
Income taxes recoverable 295 3,147
Prepaid expenses 4,044 5,026
Future income taxes 2,208 2,187
-----------------------------------------------------------------------
151,190 144,992
Fixed assets 131,520 126,809
Goodwill 127,493 128,783
Other assets 3,190 4,020
Future income taxes 3,914 3,592
-----------------------------------------------------------------------
$417,307 $408,196
-----------------------------------------------------------------------
-----------------------------------------------------------------------
Liabilities and Shareholders' Equity
Current liabilities:
Bank overdrafts $- $644
Bank loans 3,207 5,312
Accounts payable and accrued liabilities 47,307 44,948
Current portion of long-term debt 2,778 6,729
-----------------------------------------------------------------------
53,292 57,633
Long-term debt 92,617 92,870
Future income taxes 15,962 14,958
Shareholders' equity:
Capital stock 144,180 143,940
Balance payable in shares on business acquisition 720 960
Retained earnings 101,954 90,230
Cumulative translation adjustment 8,582 7,605
-----------------------------------------------------------------------
255,436 242,735
-----------------------------------------------------------------------
$417,307 $408,196
-----------------------------------------------------------------------
-----------------------------------------------------------------------
MAAX INC.
CONSOLIDATED STATEMENTS OF INCOME (unaudited)
(in thousands of dollars, except per share data)
-----------------------------------------------------------------------
-----------------------------------------------------------------------
Three months ended Six months ended
August 31, August 31,
2001 2000 2001 2000
-----------------------------------------------------------------------
Sales $132,063 $125,231 $266,728 $258,626
Expenses:
Operating 114,098 104,429 229,608 218,534
Research and development 454 707 1,376 1,439
Financial expenses 2,030 2,471 4,263 4,743
Amortization 4,492 4,321 8,736 8,379
-----------------------------------------------------------------------
121,074 111,928 243,983 233,095
-----------------------------------------------------------------------
Income before income taxes
and amortization of
goodwill 10,989 13,303 22,745 25,531
Income taxes 3,694 4,523 7,957 8,657
-----------------------------------------------------------------------
Income before amortization
of goodwill 7,295 8,780 14,788 16,874
Amortization of goodwill, net
of income taxes 696 688 1,399 1,373
-----------------------------------------------------------------------
Net income $6,599 $8,092 $13,389 $15,501
-----------------------------------------------------------------------
-----------------------------------------------------------------------
Earnings per share - basic:
Before amortization of
goodwill $0.31 $0.37 $0.62 $0.71
Net income $0.28 $0.34 $0.57 $0.65
Earnings per share - diluted:
Before amortization of
goodwill $0.30 $0.37 $0.62 $0.70
Net income $0.28 $0.34 $0.56 $0.64
Weighted average of
outstanding shares 23,688,559 23,772,581 23,688,477 23,745,401
-----------------------------------------------------------------------
-----------------------------------------------------------------------
MAAX INC.
CONSOLIDATED STATEMENTS OF RETAINED EARNINGS (unaudited)
(in thousands of dollars)
-----------------------------------------------------------------------
-----------------------------------------------------------------------
Six months ended
August 31,
2001 2000
-----------------------------------------------------------------------
Retained earnings, beginning of period $90,230 $72,069
Change in accounting policy - (99)
-----------------------------------------------------------------------
Beginning of period restated 90,230 71,970
Net income 13,389 15,501
Premium paid on redemption of shares - (394)
Dividends (1,665) (1,663)
-----------------------------------------------------------------------
Retained earnings, end of period $101,954 $85,414
-----------------------------------------------------------------------
-----------------------------------------------------------------------
SEGMENTED INFORMATION (unaudited)
(in thousands of dollars)
-----------------------------------------------------------------------
-----------------------------------------------------------------------
Three months ended Six months ended
August 31, August 31,
2001 2000 2001 2000
-----------------------------------------------------------------------
Sales:
Bathroom and kitchen $109,367 $104,352 $224,052 $214,172
Spas 22,710 20,879 42,698 44,470
Intersegment sales (14) - (22) (16)
-----------------------------------------------------------------------
$132,063 $125,231 $266,728 $258,626
-----------------------------------------------------------------------
-----------------------------------------------------------------------
Income before income taxes and
amortization of goodwill:
Bathroom and kitchen $12,011 $11,562 $23,636 $21,488
Spas (1,022) 1,741 (891) 4,043
-----------------------------------------------------------------------
$10,989 $13,303 $22,745 $25,531
-----------------------------------------------------------------------
-----------------------------------------------------------------------
Amortization of fixed
assets and goodwill:
Bathroom and kitchen $4,432 $4,302 $8,643 $8,362
Spas 517 486 1,035 939
-----------------------------------------------------------------------
$4,949 $4,788 $9,678 $9,301
-----------------------------------------------------------------------
-----------------------------------------------------------------------
MAAX INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)
(in thousands of dollars)
-----------------------------------------------------------------------
-----------------------------------------------------------------------
Three months ended Six months ended
August 31, August 31,
2001 2000 2001 2000
-----------------------------------------------------------------------
Cash provided by (used in):
Operations:
Net income $6,599 $8,092 $13,389 $15,501
Items not affecting cash:
Amortization 4,492 4,321 8,736 8,379
Amortization of goodwill 857 853 1,722 1,706
Amortization of financial
expenses 112 140 224 272
Future income taxes 209 545 620 1,125
-----------------------------------------------------------------------
Operating cash flows 12,269 13,951 24,691 26,983
Changes in non-cash
operating working capital 8,852 1,201 (637) (25,241)
-----------------------------------------------------------------------
21,121 15,152 24,054 1,742
Financing:
Increase (decrease) of
bank loans (2,827) 1,484 (2,114) 291
Increase in long-term debt 332 - 786 24,854
Repayment of long-term
debt (5,669) (3,640) (4,969) (4,693)
Proceeds of issuance
of shares - 10 - 661
Redemption of shares - - - (751)
Dividends paid - - (1,665) (1,663)
-----------------------------------------------------------------------
(8,164) (2,146) (7,962) 18,699
Investments:
Additions to fixed assets (8,207) (7,107) (13,834) (14,978)
Proceeds from disposal of
fixed assets 213 47 1,406 192
Goodwill - (2) - (156)
Other assets (66) (870) (177) (1,439)
-----------------------------------------------------------------------
(8,060) (7,932) (12,605) (16,381)
-----------------------------------------------------------------------
Increase in cash 4,897 5,074 3,487 4,060
Translation adjustment on
bank overdrafts denominated
in foreign currencies (59) 28 4 (82)
Bank overdrafts, beginning
of period (1,991) (5,610) (644) (4,486)
-----------------------------------------------------------------------
-----------------------------------------------------------------------
Cash (bank overdrafts),
end of period $2,847 $(508) $2,847 $(508)
-----------------------------------------------------------------------
-----------------------------------------------------------------------
SEGMENTED INFORMATION:
Additions to fixed assets
and goodwill:
Bathroom and kitchen $8,170 $6,833 $12,433 $14,344
Spas 37 276 1,401 790
-----------------------------------------------------------------------
$8,207 $7,109 $13,834 $15,134
-----------------------------------------------------------------------
-----------------------------------------------------------------------
MAAX INC.
Notes to consolidated financial statements
For the six-month period ended August 31, 2001
1.Basis of presentation
The consolidated interim financial statements, have been prepared by
the Corporation in accordance with Canadian generally accepted
accounting principles applicable to interim financial statements and
follow the same accounting policies and methods of their application as
the most recent annual financial statements, except for the change in
accounting policies described in note 2. In the opinion of Management,
all adjustments necessary for a fair presentation are reflected in the
interim financial statements. Such adjustments are of a normal and
recurring nature. The results of operations for the interim periods
are not necessarily indicative of the operating results for the full
year. The interim financial statements should be read in conjunction
with the audited consolidated financial statements and notes thereto
included in the Corporation's Annual Report for fiscal year 2001.
Certain reclassifications have been made to prior periods to conform
with current reporting.
2.Changes in accounting policies
Effective March 1, 2001, the Corporation retroactively adopted the new
recommendations published by the Canadian Institute of Chartered
Accountants (the "CICA") relating to the method of calculation and the
presentation and disclosure requirements for earnings per share. The
new recommendations require the use of the treasury stock method
instead of the imputed earnings method for calculating diluted earnings
per share. The impact of the adoption of the new recommendations on
the computation of basic and diluted earnings per share is not
material. |
