 |
February 23, 2001
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Sales for the year to December 31, 2000 were $806.5 million, an increase of $13.1 million or 1.7% over the $793.4 million achieved in 1999, while fourth quarter sales, at $187.2 million were $15.0 million or 7.4% lower than last year.
Sales of the Packaging Segment in the fourth quarter were $92.3 which reflects a decrease of 11.5% from last year's $104.3 million with weakness noted in all geographic areas. Metal Processing sales, at $73.7 million, were down 3.7% in the quarter primarily due to lower sales of roll formed products. Distribution sales for the quarter, at $21.2 million, were the same as last year with higher sales at the U.S. unit offsetting a decline in Canada.
Earnings before goodwill amortization but after a restructuring charge were $20.1 million or $0.59 per share which represents a decrease of $15.6 million or 43.8% from the $35.7 million or $1.03 per share earned last year. A restructuring charge of $11.2 million after tax, negatively impacted earnings in 2000 by $0.33 per share. Net earnings for the year were $18.2 million or $0.53 per share which reflects a decrease of 46.2% from the $33.8 million or $0.98 per share earned last year. For the fourth quarter, the Company incurred a loss before goodwill amortization but after the restructuring charge of $6.0 million or $0.17 per share compared to earnings last year of $9.5 million or $0.27 per share. The net loss for the fourth quarter was $6.4 million or $0.19 per share compared to earnings last year of $9.0 million or $0.26 per share.
For the fourth quarter, the Packaging segment had operating profits of $0.4 million compared to $6.0 million last year with the Canadian and U.K. units reflecting lower earnings while the U.S. unit operated at a loss. As a result of the deteriorating profitability and continuing problems with plastic strapping, senior management undertook a detailed review of all operations in order to eliminate redundant or duplicated costs, equipment and facilities. All geographical units participated in the restructuring with a majority of the charges relating to the U.S. The review also concluded that a portion of the goodwill which had been acquired with the Interlake acquisition in 1996 had become permanently impaired and should be included in the restructuring charge. The aggregate restructuring charge of $18.6 million is comprised of a writeoff of redundant, obsolete and inefficient equipment and property $7.0 million; severance and other costs associated with consolidation and relocation $3.8 million; and the writeoff of unamortized goodwill $7.8 million.
Operating profits of the Metal Processing segment in the fourth quarter were $9.7 million which reflects a decrease of $2.7 million or 21.9% from last year's $12.4 million. Reduced profits from steel pickling and roll forming were the major reasons for the decrease.
The Distribution segment had an operating profit of $0.1 million in the quarter compared to $0.2 million last year with the decrease reflecting the slowing North American economy.
Provided economic conditions improve as expected in the second half of 2001, the Company expects that earnings will be higher chiefly arising from the restructuring initiatives in the Packaging segment.
Further details on the results for the year will be included in the annual report to be mailed to all shareholders in late March of 2001.
Mark C. Samuel
President
and CEO
February 2001
|
CONSOLIDATED STATEMENTS OF EARNINGS |
Twelve Months ended December 31, 2000 and 1999 (unaudited)
(thousands
of dollars except per share amounts)
 | |||||
 |
4TH QUARTER |
TWELVE MONTHS | |||
| |||||
| 2000 | 1999 | |
2000 | 1999 | |
 | |||||
NET SALES |
$ 187,195 | $ 202,210 | $ 806,482 | $ 793,354 | |
| COSTS (INCOME) AND EXPENSES: |
|||||
| Cost
of sales, selling & administration |
170,625 | 178,828 | 724,654 | 704,140 | |
| Depreciation and amortization |
7,130 | 5,864 | 26,992 | 24,107 | |
| Interest on long-term debt |
3,124 | 2,811 | 11,908 | 11,763 | |
| Interest on short-term debt |
369 | 250 | 1,476 | 1,146 | |
| Interest income |
(83) | (39) | (342) | (179) | |
| |||||
| 181,165 | 187,714 | 764,688 | 740,977 | ||
| |||||
| EARNINGS BEFORE RESTRUCTURING CHARGE, INCOME TAXES, AND GOODWILL
AMORTIZATION |
6,030 | 14,496 | 41,794 | 52,377 | |
| RESTRUCTURING CHARGE |
18,586 | -- | 18,586 | -- | |
| |||||
| EARNINGS BEFORE INCOME TAXESAND GOODWILL AMORTIZATION |
(12,556) | 14,496 | 23,208 | 52,377 | |
| PROVISION FOR INCOME TAXES | (6,600) | 4,950 | 3,150 | 16,700 | |
| |||||
| EARNINGS BEFORE GOODWILL AMORTIZATION |
(5,956) | 9,546 | 20,058 | 35,677 | |
| GOODWILL AMORTIZATION, net of income taxes | 454 | 499 | 1,883 | 1,909 | |
| |||||
| NET EARNINGS |
$ (6,410) | $ 9,047 | $ 18,175 | $ 33,768 | |
| |||||
| EARNINGS PER SHARE BEFOREGOODWILL AMORTIZATION |
$ (0.17) | $ 0.27 | $ 0.59 | $ 1.03 | |
| |||||
| NET EARNINGS PER SHARE | $ (0.19) | $ 0.26 | $ 0.53 | $ 0.98 | |
| |||||
|
SEGMENTED INFORMATION |
Twelve Months ended December 31, 2000 and 1999 (unaudited)
(thousands
of dollars)
| |||||
|
4TH
QUARTER |
TWELVE MONTHS | |||
| |||||
| NET SALES | 2000 | 1999 | |
2000 | 1999 |
| |||||
| Packaging |
$ 92,302 | $ 104,318 | $ 404,762 | $ 402,034 | |
| Metal Processing | 73,664 | 76,471 | 302,734 | 305,361 | |
| Distribution | 21,229 | 21,421 | 98,986 | 85,959 | |
| |||||
| Consolidated | $ 187,195 | $ 202,210 | $ 806,482 | $ 793,354 | |
| |||||
| |||||
|
4TH QUARTER |
TWELVE MONTHS | |||
| |||||
| EARNINGS BEFORE INTEREST ANDGOODWILL
AMORTIZATION |
2000 | 1999 | |
2000 | 1999 |
| |||||
| Packaging |
$ 397 | $ 5,970 | $ 14,110 | $ 20,941 | |
| Metal Processing | 9,657 | 12,359 | 41,638 | 49,624 | |
| Distribution | 49 | 168 | 2,903 | (1,144) | |
| Corporate | (663) | (979) | (3,815) | (4,314) | |
| Restructuring Charge | (18,586) | -- | (18,586) | -- | |
| |||||
| Consolidated | $ (9,146) | $ 17,518 | $ 36,250 | $ 65,107 | |
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|
|
CONSOLIDATED BALANCE SHEETS |
December 31, 2000 and 1999 (unaudited)
(thousands of dollars)
| ||
|
2000 |
1999 | |
| ||
| ASSETS |
||
| CURRENT ASSETS: |
||
| Cash and short-term deposits |
$ 7,009 | $ 8,538 |
| Accounts receivable |
114,405 | 115,139 |
| Inventories |
160,914 | 145,300 |
| Prepaids and sundry |
3,607 | 4,134 |
| Income taxes receivable |
555 | -- |
| Future income taxes |
9,343 | -- |
| ||
| 295,833 | 273,111 | |
| FIXED ASSETS | 201,741 | 180,529 |
| FUTURE INCOME TAXES | 10,617 | -- |
| DEFERRED PENSION COSTS | 4,372 | 4,282 |
| INTANGIBLE ASSETS |
42,535 | 53,612 |
| ||
| $ 555,098 | $ 511,534 | |
| ||
| LIABILITIES AND SHAREHOLDERS' EQUITY |
||
| CURRENT LIABILITIES: |
||
| Bank indebtedness |
$ 36,722 | $ 18,063 |
| Accounts payable and accrued liabilities |
86,329 | 90,013 |
| Dividends payable |
1,673 | 1,392 |
| Income taxes payable |
-- | 1,611 |
| Current portion of long-term debt |
11,996 | 12,221 |
| ||
| 136,720 | 123,300 | |
| LONG-TERM DEBT | 166,984 | 149,025 |
| POST-RETIREMENT BENEFITS | ||
| OTHER THAN PENSIONS |
3,751 | 4,050 |
| FUTURE INCOME TAXES | 25,834 | 6,624 |
| ||
| 333,289 | 282,999 | |
| SHAREHOLDERS' EQUITY: | ||
| Capital stock |
26,951 | 27,882 |
| Retained earnings |
189,552 | 193,957 |
| Cumulative translation adjustment |
5,306 | 6,696 |
| ||
| 221,809 | 228,535 | |
| ||
| $ 555,098 | $ 511,534 | |
| ||
| Number of common shares outstanding | 33,300,940 | 34,450,340 |
| Number of options outstanding | 671,000 | 459,000 |
Effective January 1, 2000 the Company adopted the new recommendations of the CICA with respect to accounting for income taxes and accounting for employee future benefits. The cumulative effect of adopting the liability method of tax allocation, on a retroactive basis without restating the financial statements of prior periods, was a decrease to retained earnings of $10,004, an increase to the cumulative translation adjustment of $503 and an increase to future income taxes of $9,501. The effect of adopting the recommendation with respect to employee future benefits, on a prospective basis, was not material.
|
CONSOLIDATED CASH FLOW STATEMENTS |
Twelve Months ended December 31, 2000 and 1999 (unaudited)
(thousands
of dollars)
| ||
|
2000 |
1999 | |
| ||
| CASH FLOWS FROM (USED IN) OPERATING ACTIVITIES: | ||
| Net earnings |
$ 18,175 | $ 33,768 |
| Items not involving cash: |
||
| Depreciation
and amortization |
26,992 | 24,107 |
| Goodwill
amortization |
2,383 | 2,409 |
| Restructuring
charge (net of tax) |
11,186 | -- |
| Future income
taxes |
(594) | 1,167 |
| Increase in
deferred pension costs |
(257) | (938) |
| Decrease in
post-retirement benefits other than pensions |
(431) | (582) |
| ||
| 57,454 | 59,931 | |
| Change in non-cash operating working capital: |
||
| Decrease
(increase) in accounts receivable |
4,861 | (9,285) |
| Decrease
(increase) in income taxes receivable |
(2,034) | 241 |
| Decrease
(increase) in inventories |
(15,840) | 7,156 |
| Decrease
(increase) in prepaids expenses and sundry |
939 | (717) |
| Increase
(decrease) in accounts payable and accrued liabilities |
(11,223) | 8,458 |
| ||
| 34,157 | 65,784 | |
| CASH FLOWS FROM (USED IN) INVESTING ACTIVITIES: | ||
| Proceeds on sale of fixed assets |
1,656 | 2,958 |
| Loss (gain) on disposal of fixed assets |
(312) | 136 |
| Purchase of fixed assets and intangible assets |
(26,730) | (20,753) |
| Business acquisition |
(27,056) | (3,444) |
| ||
| (52,442) | (21,103) | |
| CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES: | ||
| Purchase of common shares |
(6,712) | (725) |
| Increase in long-term debt |
25,868 | 5,393 |
| Repayment of long term debt |
(14,487) | (17,119) |
| Dividends paid on common shares |
(6,795) | (5,523) |
| ||
| (2,126) | (17,974) | |
| EFFECT OF EXCHANGE RATE CHANGESON CASH AND CASH
EQUIVALENTS |
223 | 401 |
| ||
| INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS |
(20,188) | 27,108 |
| CASH AND CASH EQUIVALENTS, BEGINNING OF
YEAR |
(9,525) | (36,633) |
| ||
| CASH AND CASH EQUIVALENTS, END OF YEAR |
$ (29,713) | $ (9,525) |
| ||
Cash and cash equivalents is comprised of cash and short-term deposits less bank indebtedness.