Derlan - Financial Results For First Quarter Of 1999
Derlan Industries Limited announced netearnings from continuing
operations of $0.7 million or, $0.03 per share, for the quarter ended March
31, 1999, compared to a net loss of $0.2 million or, $0.01 loss per share,
for the first quarter of 1998.
Sales from continuing operations were $51.3 million, an increase of
25.7 percent from sales of $40.8 million in 1998. Aerospace sales
increased 11.2 percent and Pump sales increased 50.8 percent from
comparable first quarter sales in 1998.
The basic earnings per share were $0.03 in the first quarter of 1999
and, including discontinued operations in 1998, were $0.05 per share.
Derlan reported net income of $0.7 million for the first quarter of 1999
compared to $1.5 million in 1998 including discontinued operations.
Cash flow per share from continuing operations, before considering the
change in non-cash working capital balances, was $0.11 per share as
compared to $0.06 per share in the first quarter of 1998.
EBITDA from continuing operations improved to $6.2 million from $4.1
million in 1998. Backlog at the end of March 31, 1999 was $195.9 million,
compared to $181.3 million in the previous year's first quarter and $183.6
million at December 31, 1998.
The Company continues to work with its advisors, BT Wolfensohn and BT
Alex Brown, to realize increased value for shareholders. The Company also
continues to make progress in the divestment of its discontinued
businesses. In addition to three U.S. based industrial technology
subsidiaries sold in 1998, three other divestments were completed since the
end of 1998 for gross proceeds of $19 million being the lighting and
printing product lines of Derlan Inc. in California and the Bayco division
in Winnipeg. These divestments, which have provided gross proceeds of more
than $80 million since our November announcement, continue to strengthen
Derlan's balance sheet and will allow management to focus more closely on
the growth of the Aerospace and Pump operations.
Derlan is an industrial corporation, manufacturing products for the
aerospace and pump industries. The company has operations in Canada, the
United States, Mexico and Germany. Its shares are listed on the Toronto
Stock Exchange under the symbol DRL.
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Attachments:
Consolidated Income Statement
Consolidated Balance Sheet
Consolidated Statement of Cash Flows
Notes to Consolidated Financial Statements
Derlan Industries Limited
Consolidated Income Statement
for the three months ended March 31, 1999 and 1998
(Unaudited)
(thousands of dollars except per share amounts)
1999 1998
Sales $51,303 $40,827
Manufacturing expenses 38,197 29,716
Selling, general and
administration expenses 6,919 7,061
Depreciation and amortization 1,947 1,435
Interest 2,252 1,956
Income from continuing operations
before income taxes and minority
interest 1,988 659
Provision for income taxes 685 230
Minority shareholders' interests
in earnings of subsidiary companies 578 643
Income from continuing operations 725 (214)
Discontinued operations - 1,689
Net income $725 $1,475
See accompanying notes to consolidated financial statements.
Derlan Industries Limited
Consolidated Balance Sheet
as at March 31, 1999 and December 31, 1998
(Unaudited)
(thousands of dollars) 1999 1998
Assets
Current assets
Cash $ 18,545 $ 49,897
Accounts receivable 58,212 62,557
Income taxes recoverable 6,842 7,527
Inventories 98,049 94,091
Prepaid expenses and other 4,960 5,172
186,608 219,244
Fixed assets, net 104,165 96,384
Goodwill, net 8,811 9,928
Other assets, net 17,434 17,941
$317,018 $343,497
Liabilities
Current liabilities
Accounts payable and
accrued liabilities $66,226 $79,046
Current portion of long-term debt 2,435 2,083
68,661 81,129
Long-term debt 156,157 176,336
Deferred taxes 3,039 3,039
Minority shareholders' interests
in subsidiary companies 19,186 13,499
Other non-current liabilities 7,773 8,165
254,816 282,168
Shareholders' Equity
Share capital 152,625 152,625
Currency translation adjustment (12,630) (12,778)
Retained earnings (Deficit) (77,793) (78,518)
62,202 61,329
$317,018 $343,497
See accompanying notes to consolidated financial statements.
Derlan Industries Limited
Consolidated Statement of Cash Flows
for the three months ended March 31, 1999 and 1998
(Unaudited)
(thousands of dollars) 1999 1998
Operating Activities
Income (loss) from continuing operations $725 $(214)
Add: Non-cash items-
Depreciation and amortization 1,946 1,435
Minority shareholders' interest in
earnings of subsidiary companies 578 643
3,249 1,864
Net change in non-cash working capital
balances related
to continuing operations (6,481) (2,994)
(3,232) (1,130)
Investing Activities
Acquisitions (1,311) -
Capital expenditures (5,409) (1,751)
Other (289) 153
(7,009) (1,598)
Financing Activities
Repayments and reclassification of
long-term debt (19,123) (162)
Repurchase and reclassification of
share capital - 62
Dividends paid to preference shareholders - (79)
Refundable advance corporation tax - (33)
(19,123) (212)
Effect of translation of foreign
currency amounts in self-sustaining
subsidiaries 218 (683)
Decrease in cash from continuing
Operations (29,146) (3,623)
Discontinued Operations (2,206) (17,201)
Decrease in cash during the period (31,352) (20,824)
Cash at beginning of the period 49,897 26,230
Cash at end of the period $18,545 $5,406
See accompanying notes to consolidated financial statements.
Derlan Industries Limited
Notes to Consolidated Financial Statements
for the three months ended March 31, 1999 and 1998
(Unaudited)
1. Earnings per share
Earnings per share from continuing operations were $0.03 per share for
the three months ended March 31, 1999 (compared to a loss of $0.01 per
share in 1998). The basic earnings per share were $0.03 per share for the
three months ended March 31, 1999 (compared to $0.05 per share in 1998).
2. Segmented information
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(thousands of dollars) 1999 1998
Sales
Aerospace $28,829 $25,928
Pump 22,474 14,899
$51,303 $40,827
Earnings before interest,
income taxes, depreciation and
Amortization (EBITDA)
Aerospace $ 4,061 $ 3,735
Pump 3,322 2,585
7,383 6,320
Less:
Depreciation and amortization
expenses 1,947 1,435
Corporate costs and other 1,196 2,270
Interest 2,252 1,956
Income from continuing operations
before Income taxes and minority
interest 1,988 659
Provision for income taxes 685 230
Minority interest 578 643
Income (loss) from continuing
operations $ 725 $ (214)
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TEL: (416) 364-5852 C. John Mastrella, Vice President, Chief
Financial Officer, Derlan Industries Limited
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