Record Earnings Report
CHURCHILL CORP ("CUQ-T") - Achieves Record Earnings
The Churchill Corporation reported record earnings during its fourth quarter and fiscal year ended December 31, 1999. (All figures restated to reflect the adoption of the new CICA method of accounting for income tax.)
Highlights of the year include:
- Construction contract revenue increased by $17 million to $228 million.
- Earnings from construction operations increased by 34% to $6,450,000 from $4,810,000 in 1998.
- Net earnings increased by 27% to $3,403,000 from $2,676,000 in 1998.
- Earnings per share increased by 19% to $0.32 from $0.27 in 1998. - Tangible net book value per share increased by 18% to $1.86 during 1999.
- Return on average shareholders' equity was 19%.
Churchill's construction operations have been profitable during each of the last eight years. Each of Churchill's construction subsidiaries was profitable again in 1999. Churchill's rate of return on shareholders' equity was among the highest in the country for the third consecutive year. Churchill increased shareholders' equity by 20% to $19.4 million during the year and has no debt. This strong balance sheet provides a solid base from which to grow the business.
Fourth quarter results include:
- Construction contract revenue was $56 million, compared to $63 million in 1998.
- Earnings from construction operations increased by 43% to $2,908,000 from $2,039,000 in 1998.
- Net earnings increased by 34% to $1,580,000 from $1,177,000 in 1998.
"I am pleased to report we achieved record profitability in 1999," said Hank Reid, Churchill's President and CEO. "With work in hand of $199 million at the start of 2000, up from $155 million at the start of 1999, we are well-positioned to continue our record of profitable growth this year. With the strength of the resource sector and momentum of the economy in western Canada, we believe that the construction market will continue to provide good opportunity for us."
The Churchill Corporation is a western Canadian commercial and industrial construction corporation with annual revenue in excess of $225 million. Churchill shares are listed on The Toronto Stock Exchange under the trading symbol "CUQ".
(financial statements attached)
THE CHURCHILL CORPORATION
Consolidated Statements of Earnings
Years ended December 31
Restated
($ thousands, except per share amounts) 1999 1998 (x)
CONSTRUCTION
OPERATIONS
Contract Revenue $228,038 $210,680
Contract Costs 209,114 193,996
Contract Income 18,924 16,684
Interest Income 1,411 658
Sundry Income 76 67
Indirect and Administrative Expenses (12,394) (10,852)
Depreciation (677) (681)
Interest Expense (178) (644)
Amortization of Deferred Loan Costs (426) (144)
Minority Interest (286) (278)
Earnings from Construction Operations 6,450 4,810
NON-CONSTRUCTION
OPERATIONS
Earnings before Depreciation and Interest 90 667
Depreciation (4) (31)
Interest Expense (129) (215)
(Loss) Earnings from Non-Construction
Operations (43) 421
Earnings Before Income Tax 6,407 5,231
Income Taxes
Current (1,886) (984)
Future (1,118) (1,571)
(3,004) (2,555)
Net Earnings $ 3,403 $ 2,676
Net Earnings Per Common share
Basic $ 0.32 $ 0.27
Fully Diluted $ 0.29 $ 0.23
The weighted average number of common shares outstanding during the
year was 10,514,853 (1998 - 10,004,172).
Consolidated Statements of Retained Earnings
Years ended December 31
Restated
($ thousands) 1999 1998 (x)
Retained Earnings, beginning of year
As previously reported $ 6,171 $ 1,950
Change in accounting policy 4,549 6,094
10,720 8,044
Net Earnings 3,403 2,676
Share Redemption in Excess of Stated Value (326) -
Retained Earnings, end of year $ 13,797 $ 10,720
(x) 1998 Consolidated Financial Statements restated based on new CICA
method of accounting for income taxes.
THE CHURCHILL CORPORATION
Consolidated Balance Sheets
As at December 31
Restated
($ thousands) 1999 1998 (x)
ASSETS
Current Assets
Cash and Term Deposits $ 28,329 $ 23,500
Accounts Receivable 34,348 41,577
Inventories and Prepaid Expenses 669 1,031
Properties for Sale 297 1,035
Future Income Tax Assets 2,408 3,175
Current Portion of Agreement Receivable 83 27
66,134 70,345
Agreement Receivable - 83
Equity Investment 1,070 1,017
Future Income Tax Assets 390 743
Property and Equipment 3,321 3,240
$ 70,915 $ 75,428
LIABILITIES
Current Liabilities
Accounts Payable $ 35,121 $ 39,158
Contract Advances and Unearned Income 14,533 14,305
Income Taxes Payable 1,156 1,003
Current Portion of Long-Term Debt - 226
50,810 54,692
Long-Term Debt - 3,955
Future Income Tax Liabilities 71 73
Minority Interest 607 467
51,488 59,187
SHAREHOLDERS' EQUITY
Shareholders' Equity 19,427 16,241
$ 70,915 $ 75,428
(x) 1998 Consolidated Financial Statements restated based on new CICA
method of accounting for income taxes.
THE CHURCHILL CORPORATION
Consolidated Statements of Net Cash Flow
Years ended December 31
Restated
($ thousands) 1999 1998 (x)
OPERATING ACTIVITIES
Net earnings $ 3,403 $ 2,676
Add (deduct) non-cash items
Net equity (earnings) loss of affiliate (53) 145
Depreciation 681 712
Amortization of deferred loan costs 426 144
Gain on disposal of properties for sale - (632)
Future income taxes 1,118 1,571
5,575 4,616
Change in minority interest 140 (95)
Net change in accounts receivable, inventories
and prepaid expenses 7,165 (10,935)
Net change in accounts payable, contract
advances and unearned income (3,809) 18,914
Change in income taxes payable 153 453
9,224 12,953
INVESTING ACTIVITIES
Change in agreements receivable 27 876
Proceeds on disposal of properties for sale 734 1,259
Proceeds on disposal of equity investments - 8
Proceeds on disposal of property and equipment 18 104
Additions to property and equipment (776) (960)
3 1,287
FINANCING ACTIVITIES
Decrease in bank indebtedness - (1,871)
Long-term debt repayment (4,181) (1,591)
Redemption of common shares (339) (3)
Issuance of common shares 122 70
(4,398) (3,395)
Increase in cash 4,829 10,845
Cash and term deposits, beginning of year 23,500 12,655
Cash and term deposits, end of year $ 28,329 $ 23,500
(x) 1998 Consolidated Financial Statements restated based on new CICA
method of accounting for income taxes.
|
