Published:
Sleeman Reports First Quarter Results
Core Volumes Grow 10%
Sleeman Breweries Ltd. (TSX:ALE) today released its financial results for the first quarter ended April 1, 2006.
First Quarter Financial Highlights
- Net revenues grew by 2% as core volumes increased 10% driven by double digit gains in the Eastern Canadian markets. Nationally, premium brand volumes grew in the mid-single digits and value brand volumes grew in the mid-teens.
- Excluding the impacts of non-recurring items, SG&A expenses declined by $0.5 million year over year. Total reported selling, general and administrative (SG&A) expenses increased by $2.4 million to $15.8 million in the quarter.
- Excluding the after-tax impact of the $2 million restructuring charge in the quarter, normalized net income was $0.5 million and normalized earnings per share were $0.03. There was a net loss in the quarter of $0.8 million, compared to net earnings of $1.6 million in the first quarter of 2005. The reported loss per share for the current quarter was $0.05.
"I am pleased with the fact that our core volume growth strategies allowed us to deliver solid volume gains and grow our total revenues in the face of the expected difficult pricing conditions we experienced in the quarter," said John Sleeman, Chairman & CEO. "In addition, our focus on cost controls continued to bear fruit as we reduced our ongoing SG&A expenses and maintained our average cost of goods sold per hectolitre at the prior year's levels."
First Quarter Financial Review
Operational Highlights
- The Company successfully installed the sterile filtration equipment required to produce Sleeman Original Draught at its Guelph facility and now produces all of its eastern requirements there. This change in production source will generate significant freight savings for the Company in the future.
- As previously announced, the Company implemented a second reorganization of its workforce during the quarter. This reorganization is expected to generate annual cost savings of $2.7 million.
- In Ontario, the Company successfully executed its value brand growth strategy generating volume growth in excess of 30% in the quarter.
- As of January 1, the Company began selling and distributing the popular FEMSA brands Sol and Dos Equis across Canada.
- The Company introduced Okanagan Spring India Pale Ale to premium beer drinkers in British Columbia in the quarter.
Mr. Sleeman continued, "We will continue to execute the volume growth and cost control strategies we achieved in the first quarter of 2006 as we realize the benefits of the two announced reorganizations and various capital projects completed recently. We believe that we are on the correct path to return Sleeman to its historical volume and earnings trends in the face of continuing competitive challenges."
Management's Discussion and Analysis of Results of Operations and Financial Position:
The following discussion and analysis should be read in conjunction with the financial statements for the first quarter of fiscal 2006 and 2005; with the MD&A in the fiscal 2005 annual report, including the section on risks and uncertainties; and with the notes to the financial statements for the first quarter of fiscal 2006 and in the fiscal 2005 annual report. (All amounts are in Canadian dollars unless otherwise stated.)
The following comments were prepared as of May 10, 2006. Additional information relating to the Company, including its Annual Information Form, is available on SEDAR at www.sedar.com.
Operating Results
The following chart sets out the per hectolitre results(1) for the quarter based on the number of hectolitres produced and sold by the Company:
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3 months ended 3 months ended
April 1, 2006 April 2, 2005
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Net revenue $152 $164
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Cost of goods sold 83 83
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Gross margin 69 81
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Selling, general and administrative 59 55
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EBITDA(2) 10 26
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Depreciation and amortization 8 8
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Earnings before interest and taxes 2 18
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Interest 7 7
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Earnings before taxes (5) 11
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Income taxes (2) 4
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Net earnings ($3) $ 7
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(1) Per hectolitre results are non-GAAP earnings measures, therefore, they do not have any standardized meaning prescribed by Canadian generally accepted accounting principles and may not be similar to measures presented by other companies. Management evaluates business trends on a per hectolitre basis as this is a measurement commonly used by breweries to benchmark revenue and costs.
(2) EBITDA is a non-GAAP earnings measure, therefore, it does not have any standardized meaning prescribed by Canadian generally accepted accounting principles and may not be similar to measures presented by other companies. EBITDA represents earnings before interest, income taxes, depreciation and amortization. Management uses this measurement to evaluate the operating results of each of the Company's segments and the Company as a whole. Further, this measure is important to management since it is used by the Company's lenders to evaluate the ongoing cash generating capability of the Company and thus the amounts those lenders are willing to lend to the Company.
NET REVENUE
Net revenue grew to $40.6 million in the first quarter of 2006 from $39.8 million in the prior year. This represented a 2% increase. Total produced and sold volumes were up by 9% over the first quarter of 2005 to 266,000 hectolitres. Sapporo volumes increased 7% and core volumes increased 10% nationally. The industry increase for the quarter was estimated to be approximately 3%.
Net revenue slipped by $12 per hectolitre. The shift in product mix to a higher proportion of value category volumes caused approximately one-half of the reduction in net revenue per hectolitre. The balance of the reduction was evenly split between foreign exchange rate changes and the lower net prices realized in the current quarter on its premium brand sales in the Quebec, Ontario and Alberta markets.
In Eastern Canada, net revenue increased by 4%. A 17% increase in core volumes combined with the increase in Sapporo volumes generated increased net revenues which were partially offset by the increased proportion of value category sales and the impact of lower net pricing in Ontario and Quebec on premium brand sales.
In Western Canada, net revenue decreased by 2%, as a result of a 2% decrease in core volumes in this segment. Value brand volume declines exceeded premium brand volume increases in this segment.
COST OF GOODS SOLD
Cost of goods sold increased by 10% due primarily to the 9% increase in hectolitres produced and sold. Measured on a per hectolitre produced and sold basis, cost of goods sold were consistent with the prior year as the beneficial impacts of plant efficiency projects across the country and the favourable impact of exchange rate changes on US dollar denominated purchases offset the inflationary impacts of various commodity cost increases.
Cost of goods sold in Eastern Canada increased by $2 per hectolitre to $82 due to the effects of the increased production at the Chambly brewery in the current quarter compared to the first quarter of last year. The significant increase in sales volumes in the current quarter necessitated the increase in production at the Chambly brewery.
In Western Canada, cost of goods sold decreased by $2 per hectolitre due to continued improvements in plant efficiencies.
OTHER OPERATING ITEMS
Excluding the impact of the non-recurring reorganization expenses recorded in the current quarter ($2 million) and the $0.9 million of insurance settlement receipts netted against SG&A expenses in the prior year's first quarter, SG&A expenses decreased by $0.5 million. The beneficial impact of the August 2005 reorganization, lower realized costs related to certain expenses accrued at the end of 2005 and cost control measures allowed the Company to achieve this result in the current quarter. Reported selling, general and administrative (SG&A) expenses increased in the quarter by $2.4 million to $15.8 ($59 per hectolitre).
In Eastern Canada, excluding the $1.8 million of reorganization expenses recorded in the current quarter and the insurance settlement receipts recorded last year, SG&A expenses increased by $0.3 million to $10.6 million due to the effects of inflation and increased value category marketing activities in Ontario.
Excluding $0.2 million of reorganization expenses, Western Canadian SG&A expenses decreased by $0.7 million to $3.2 million as segment management continued to focus on controlling costs.
Depreciation and amortization expenses increased marginally by $0.1 million as the Company reduced capital expenditures in the past year.
Interest expense in the first quarter remained consistent with the first quarter of 2005 as the impact of higher prevailing interest rates in the current quarter were offset by the impact of lower net borrowings.
The effective tax rate in the first quarter of 2006 was 36%, compared to an effective tax rate of 35% in the first quarter of 2005.
Financial Position
The Company had a bank indebtedness balance of $11.3 million compared to an indebtedness balance of $ 9.7 million as at December 31, 2005. This is a 364 day committed operating loan facility with a $20 million limit which expired on April 26, 2006. The facility was extended subsequent to the end of the quarter for another year to April 25, 2007 on substantially the same terms and conditions.
Accounts receivable decreased by $3.3 million from the level reported at the end of fiscal 2005 due primarily to the fact that the Company generated lower revenues due to seasonal fluctuations.
The Company's inventories increased by $1.7 million from December 31, 2005 levels as we built inventories in advance of the peak summer selling season, a trend that is consistent with prior years.
Prepaid expenses decreased by $1.3 million from the level reported at December 31, 2005. This decrease was attributable to a reduced can purchase prepayment balance partially offset by sales and marketing expenses prepaid in the current quarter.
Property, plant and equipment decreased by $0.7 million from the level reported at December 31, 2005 as depreciation charges exceeded capital expenditures in the quarter while intangible assets decreased by $0.4 million as amortization charges exceeded expenditures in the quarter.
Accounts payable increased by $1.2 million from the level at year end fiscal 2005 due to the timing of purchases and subsequent payments.
Long term debt levels decreased by $5.9 million as a result of debt repayments made during the first quarter of 2006. Subsequent to the end of the current quarter, the "Evergreen facility" (Facility B as described in the notes to the Company's 2005 audited financial statements) was renewed for a further one year period.
Cash Flow
The company reduced its combined long term debt and bank indebtedness by $4.4 million compared to a decrease in total borrowings of $2.4 million in the first quarter last year. This improvement stemmed principally from favourable working capital changes in the current quarter.
Operating cash flow for the quarter increased by $2 million compared to the prior year as the current quarter's $4.8 million net improvement in working capital cash flow exceeded the impact of the decline in earnings in the period.
Investing activities used $0.4 million less in this year's first quarter due mainly to the lower level of capital expenditures in the current period.
Non-cash financing activities used $3.9 million more in the first quarter of 2006, as compared to the first quarter of 2005 as the Company increased its principal payments on its long term debt facilities by $3.5 million in the current quarter.
Outlook
The Company expects that the intense price competition it has faced in key markets in the past two years will continue in 2006. The Company remains committed to returning to annual volume, revenue and profit growth in this competitive environment. Plans include implementing various core volume growth strategies and improving the Company's operations and cost structures at all of its locations to ensure that it can compete profitably regardless of competitor pricing activities across Canada.
In terms of core volume growth, the Company is focused on continuing its premium volume growth. It will introduce new and innovative products and continue to invest in its premium brands with distinctive sales and marketing programs in its key markets in Ontario, Quebec and Western Canada. In addition, Sleeman is a significant competitor in the value category of the Canadian beer market as a result of its high quality and well known stable of value brands. This category is growing and profitable and the Company will compete more aggressively in those markets by introducing new products and sales and marketing programs.
In 2006, the Company will again strive to reduce its average cost of goods sold per hectolitre from the level recorded in 2005 of $84/hl while focusing on controlling SG&A expenses. The Company expects to see the beneficial impact on earnings of the March 2006 restructuring; various cost management programs; and significant efficiency related capital expenditures including the installation of the sterile filtration system in Guelph for production of Sleeman Original Draught commencing in the second quarter of 2006.
The Company expects its depreciation and amortization and interest expenses for 2006 to be marginally higher than those reported for the 2005 fiscal year.
The Company anticipates its effective income tax rate for 2006 will be approximately 36%.
In Eastern Canada, the Company expects a continuation of the highly competitive price conditions its premium and value brands have faced in the past 24 months. As such, the Company is focused on growing its revenues by increasing its core volume sales in this segment in both the premium and value categories. The Company continues to develop innovative plans to distinguish its premium brands from its competitors in Ontario and Quebec while marketing its profitable value category brands more aggressively. The Company expects to generate double digit volume growth in both the Maritimes and US regions in 2006 on relatively small 2005 sales bases. The Company continues to believe innovation, speed to market and the quality of its products are key advantages, and the resources of the segment will be directed at realizing the benefits of these advantages.
In Western Canada, we expect price discounting by competitors to continue, and as a result, we will reduce operating and SG&A costs while focusing on growing and supporting our premium brands. The Company has strong regional brands in Shaftebury and Okanagan Spring which, when combined with the Sleeman brand, provide a solid base for product and sales and marketing innovations that will generate increased core volume sales. The Company expects ongoing challenges for its Western Canadian value beer portfolio as a result of the continued deep discounting in this category by small brewery competitors in provinces where there are no minimum beer prices and these competitors are supported by favourable provincial tax treatments.
The Company has sufficient production capacity to meet its expected production requirements for the next 24 months. The Company plans to reduce its capital expenditures in 2006 to $7.5 million. This amount is significantly lower than prior years' capital spending levels and will be used to improve efficiencies at its Guelph, Chambly and Vernon breweries.
Summary of Quarterly Information for the Last Eight Quarters
The following chart summarizes the quarterly results for the Company for the last eight fiscal quarters:
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Q1 2006 Q4 2005 Q3 2005 Q2 2005
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Net Revenue $40,560 $49,623 $59,038 $57,862
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S,G&A Expenses $15,805 $20,351 $21,535 $21,763
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EBITDA $2,608 $5,674 $9,480 $7,689
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Net Earnings (Loss) ($813) $539 $3,458 $2,490
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EPS (Basic) ($0.05) $0.03 $0.21 $0.15
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EPS (Diluted) ($0.05) $0.03 $0.20 $0.15
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Q1 2005 Q4 2004 Q3 2004 Q2 2004
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Net Revenue $39,747 $53,757 $60,727 $58,712
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S,G&A Expenses $13,368 $19,873 $20,705 $19,134
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EBITDA $6,249 $9,708 $10,777 $9,033
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Net Earnings (Loss) $1,610 $3,904 $4,463 $3,842
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EPS (Basic) $0.10 $0.24 $0.27 $0.24
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EPS (Diluted) $0.10 $0.23 $0.27 $0.23
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Quarterly Conference Call Notification
Please note the Company's conference call with analysts and media will be webcast live at 11:00 am ET, May 11, 2006 at www.cdn-news.com and on the Sleeman investor website at www.sleeman.ca. Participants will require Windows Media Player(TM), which can be downloaded prior to accessing the call. The number to call to participate in the teleconference is 416-406-6419 or 888-575-8232. To ensure your participation, please call in about five minutes before the start of the call. For those unable to participate, a taped rebroadcast will be available until May 18, 2006. To access the rebroadcast, please dial 416-695-5800 or 800-408-3053. The reservation number is 3185379. All shareholders and other interested parties are invited to monitor this webcast, which is being offered on a listen-only basis.
Sleeman Breweries Ltd. is the leading brewer and distributor of premium beer in Canada and the third largest brewing company nation-wide. The Company has supplemented its core Sleeman brands, which are available in every province, with a family of exceptional regional brands. These include Okanagan Spring and Shaftebury in British Columbia and Alberta, Upper Canada in Ontario, Unibroue and Seigneuriale in Quebec and Maritime Beer in Atlantic Canada. Sleeman entered the rapidly growing value price category in 1999 by acquiring the Stroh portfolio of brands in Canada. The company markets and/or distributes world-class imported products such as Guinness, Grolsch, Samuel Adams, Scottish & Newcastle (including Bulmers Strongbow English Cider), Sol, Sapporo and Pilsner Urquell, and provides contract production for Japan's Sapporo Breweries' products. The Company's products are also available in selected international markets. Please visit our website at www.sleeman.ca.
Forward Looking Statements
All statements in this press release that do not directly and exclusively relate to historical facts constitute forward-looking statements as of the date of this press release. These forward-looking statements include the statements concerning 2006 volume, revenue, cost and earnings expectations. These forward-looking statements are not guarantees. Although the Company believes that these forward-looking statements are based on information and assumptions which are current, reasonable and complete, these statements are necessarily subject to a number of factors that could cause actual results to vary significantly from current expectations. The statements concerning 2006 volume, revenue, cost and earnings expectations are based on the following material factors or assumptions: average net revenues the Company will earn on its products in 2006 will be similar to the net revenues it earned on its products in 2005 due to continued price discounting by major competitors, no significant changes in consumer preferences, continued increasing competition from current and new competitors, the continuation of Company's current relationship with its employees including successful labour negotiations of collective bargaining agreements, no significant changes to the regulatory environment in which the Company operates, continuing performance of third party service providers, the continuing ability of the Company to attract and retain key executives and no significant supply and quality control issues with vendors. The Company cautions that this list of factors is not exhaustive. These factors and other risks and uncertainties are discussed in the Company's materials filed with the Canadian securities regulatory authorities from time to time, including in the Risks and Uncertainties section of the management's discussion and analysis included in the Company's 2005 Annual Report. Potential investors and other readers are urged to consider these factors carefully in evaluating these forward-looking statements and are cautioned not to place undue reliance on them. The forward-looking statements included in this news release are made only as of the date of this news release and the Company does not undertake to publicly update these forward-looking statements or material factors or assumptions to reflect new information, future events or otherwise. The Company has included in this news release non-GAAP earnings measures. Normalized earnings per share, per hectolitre revenues and costs and EBITDA do not have standardized meanings prescribed by GAAP and, therefore, may not be comparable to similarly titled measures presented by other publicly traded companies, nor should they be construed as alternatives to other financial measures determined in accordance with GAAP. The Company uses these earnings measures because it believes they provide useful information to both management and investors with respect to the operating and financial performance of the Company.
Interim Consolidated Statements of Earnings-unaudited
for the three months ended April 1, 2006
(all amounts in '000s except per share and per hectolitre amounts)
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3 months ended 3 months ended %
April 1, 2006 April 2, 2005 Change
---------------------------------------------------------------------
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Net revenue $40,560 $39,747 2%
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Cost of goods sold 22,147 20,130 10%
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Gross margin 18,413 19,617 -6%
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Selling, general
and administrative 15,805 13,368 18%
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Earnings before the
undernoted 2,608 6,249 -58%
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Depreciation
and amortization 2,028 1,955 4%
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Earnings before interest
and taxes 580 4,294 -86%
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Interest expense - net 1,853 1,815 2%
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Earnings (loss) before
income taxes (1,273) 2,479 N/A
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Income taxes (460) 869 N/A
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Net earnings (loss) ($813) $1,610 N/A
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Total Proforma HLs Reported 300,000 274,000 9%
EPS - Basic ($0.05) $0.10 N/A
EPS - Diluted ($0.05) $0.10 N/A
Weighted average common
shares during the period
-basic 16,737,286 16,487,976
-diluted 16,918,852 16,804,845
See accompanying notes to the consolidated financial statements.
These financial statements should be read in conjunction with the
audited annual financial statements.
Interim Consolidated Balance Sheets-unaudited
as at April 1, 2006
(all amounts in 000s)
April 1, December 31, April 2,
2006 2005 2005
---------------------------------------
Assets (audited)
Current
Accounts receivable $43,645 $46,939 $41,117
Inventories 46,049 44,788 43,545
Prepaid expenses 4,950 6,271 5,925
---------------------------------------
94,644 97,998 90,587
Property, plant and equipment 103,186 103,891 100,650
Long-term note receivable - - 1,151
Long-term investments 3,313 3,313 3,312
Intangible assets 102,714 103,134 104,311
---------------------------------------
$303,857 $308,336 $300,011
---------------------------------------
---------------------------------------
Liabilities
Current
Bank indebtedness $11,329 $9,744 $9,731
Accounts payable and
accrued liabilities 46,190 45,349 39,025
Current portion of
long-term debt 17,976 16,794 11,701
---------------------------------------
75,495 71,887 60,457
Long-term debt 80,461 87,581 101,482
Future income taxes 16,117 16,373 14,130
---------------------------------------
172,073 175,841 176,069
---------------------------------------
---------------------------------------
Shareholders' equity
Share capital 50,562 50,520 48,789
Contributed surplus 815 755 420
Retained earnings 80,407 81,220 74,733
---------------------------------------
131,784 132,495 123,942
---------------------------------------
$303,857 $308,336 $300,011
---------------------------------------
---------------------------------------
Interim Consolidated Statements of Retained Earnings-unaudited
for the three months ended April 1, 2006
(all amounts in 000s)
3 months ended 3 months ended
April 1, 2006 April 2, 2005
------------------------------------
Retained earnings,
beginning of period $ 81,220 $ 73,123
Net earnings (loss) for
the period (813) 1,610
------------------------------------
Retained earnings, end of period $80,407 $74,733
------------------------------------
------------------------------------
See accompanying notes to the consolidated financial statements.
These financial statements should be read in conjunction with the
audited annual financial statements.
Interim Consolidated Statements of Cash Flows-unaudited
for the three months ended April 1, 2006
(all amounts in '000s)
3 months ended
-------------------------
April 1, April 2,
-------------------------
2006 2005
-------------------------
Net inflow (outflow) of cash related
to the following activities:
OPERATING
Net earnings (loss) ($813) $1,610
Items not affecting cash
Depreciation and amortization 2,028 1,955
Non-cash charges in income (net) (67) (56)
Stock-based compensation expense 60 112
Future income taxes (256) 201
-------------------------
952 3,822
Changes in non-cash operating working
capital items 4,262 (550)
-------------------------
5,214 3,272
-------------------------
INVESTING
Additions to property, plant and equipment (642) (1,229)
Additions to intangible assets (261) (100)
-------------------------
(903) (1,329)
-------------------------
FINANCING
Net proceeds from bank operating loans 1,585 97
Stock options exercised 42 436
Long-term debt - principal repayments (5,938) (2,476)
-------------------------
(4,311) (1,943)
-------------------------
NET CASH FLOW AND CASH BALANCE,
END OF PERIOD $ - $ -
-------------------------
-------------------------
Supplementary Cash Flow Information:
Interest paid $1,912 $1,950
Net income taxes paid (refunded) ($48) ($183)
See accompanying notes to the consolidated financial statements.
These financial statements should be read in conjunction with the
audited annual financial statements.
Notes to the Interim Consolidated Financial Statements - unaudited
(in thousands of dollars, except per share amounts)
1. DESCRIPTION OF BUSINESS
The Company develops, produces, imports, markets and distributes beer for sale to provincial liquor distribution organizations and entities engaged in the food and beverage industries within Canada.
The Company prepares its financial statements in accordance with accounting principles generally accepted in Canada.
The Company experiences seasonal variations in sales with revenue typically being highest in the second and third quarters and lowest in the first quarter of the fiscal year.
2. SIGNIFICANT ACCOUNTING POLICIES
The disclosures contained in these unaudited consolidated financial statements do not include all requirements of Canadian generally accepted accounting principles for annual financial statements. These unaudited consolidated financial statements should be read in conjunction with the annual consolidated financial statements for the year ended December 31, 2005.
These unaudited consolidated financial statements are based upon accounting principles consistent with those used and described in the annual consolidated financial statements.
Stock-Based Compensation
During the period, no options were granted by the Company. In the first quarter 2005, the Company granted 45,000 options at an exercise price of $13.85.
During the current quarter, the compensation cost that has been charged against earnings for the stock options was $60 (2005 - $112). The fair value of each 2005 option grant was estimated on the date of grant using the Black-Scholes option pricing model with the following weighted average assumptions used for grants during the period: dividend yield of 0%; expected volatility of 23%; risk-free interest rate of 3.5%; and an expected life of 4 years (2004 - dividend yield of 0%; expected volatility of 24%; risk-free interest rate of 3.5%; and an expected life of 4 years).
3. OUTSTANDING SHARES
As at April 1, 2006, the Company had outstanding 16,741,558 common shares and 733,417 options to acquire common shares under the Company's employee stock option plans.
4. SEGMENTED INFORMATION
Sleeman Breweries Ltd. is the largest premium brewery in Canada, producing and marketing several unique brands of beer. The Company operates breweries in Guelph, Ontario; Chambly, Quebec; Dartmouth, Nova Scotia; Vernon, British Columbia and LaCrosse, Wisconsin. The Company's reportable segments represent the aggregation of strategic business units that produce and sell beer in distinct geographic markets. They are managed separately because each business operates in different market environments in terms of regulatory regimes, customer preferences and sales and distribution channels.
The Company has two reportable segments: Eastern Canadian operations and Western Canadian operations. The accounting policies of the segments are the same as those described in the summary of significant accounting policies. The Company, accounts for inter-segment sales and transfers at the transferring segment's cost plus a production margin. Segment performance is evaluated based on earnings before interest, income taxes, depreciation and amortization ("EBITDA").
The following table sets forth information about segment profit or loss and segment assets:
Eastern Western
Canada Canada Totals
-----------------------------------
Quarter Ended Apr. 1, 2006
Revenues from external customers $ 28,018 $ 12,542 $ 40,560
Inter-segment revenues 612 1,279 1,891
EBITDA (406) 3,014 2,608
Depreciation and amortization 1,468 560 2,028
Segment assets 227,669 76,188 303,857
Expenditures for capital assets 636 6 642
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Quarter Ended Apr. 2, 2005
Revenues from external customers $ 26,910 $ 12,837 $ 39,747
Inter-segment revenues 1,319 1,004 2,323
EBITDA 3,790 2,459 6,249
Depreciation and amortization 1,429 526 1,955
Segment assets 221,425 78,586 300,011
Expenditures for capital assets 717 512 1,229
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5. RESTRUCTURING COSTS
The Company announced a reorganization that would eliminate approximately 40 full time positions in the third quarter of 2005 and a further reorganization that would eliminate another 40 positions in the first quarter of 2006. These reorganizations consisted of workforce reductions across both business segments and the consolidation of production facilities in Western Canada. The costs related to these reorganizations have been recorded in the selling, general and administration expense line in the Consolidated Statement of Earnings. The following tables show the changes in the restructuring provision for these initiatives by reportable segment :
Eastern
Canada Western Canada
-------------------------------------------
Redundant
Workforce Workforce Capital Total
Reduction Reduction Assets Subtotal Company
Provision at
December 31,
2005 $ 1,132 $ 235 $ - $ 235 $ 1,367
Payments (298) (75) - (75) (373)
---------------------------------------------------------------------
---------------------------------------------------------------------
Provision at
April 1, 2006 $ 834 $ 160 $ - $ 160 $ 994
---------------------------------------------------------------------
---------------------------------------------------------------------
March 2, 2006 Restructuring
Eastern Canada Western Canada
-------------------------------------------
Workforce Workforce Total
Reduction Reduction Company
Original
Provision
Recorded
in Current Year $ 1,810 $ 190 $ 2,000
Payments (137) (15) (152)
---------------------------------------------------------------------
---------------------------------------------------------------------
Provision at
April 1, 2006 $ 1,673 $ 175 $ 1,848
---------------------------------------------------------------------
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6. COMPARATIVE FIGURES
Certain comparative figures have been reclassified to conform to the financial statement presentation adopted in the current period.
7. SUBSEQUENT EVENT
Subsequent to the end of the current quarter, the Company's 364 day committed operating loan facility and its "Evergreen Facility" (Facilities A and B, respectively, as described in the notes to the Company's 2005 audited financial statements) were renewed for another year to April 25, 2007 on substantially the same terms and conditions.
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