Published:
Commercial Reports Q3 Earnings Increase of 60%
COMMERCIAL SOLUTIONS INC. ("Commercial" or "Company")(TSX: CSA) -
2006 3rd Quarter Highlights
- Q3 revenue growth of $7.7 million; a 30.3 percent increase over the comparative period
- EBITDA in the quarter rose to $2.7 million, 45.0 percent up from the comparative period
- Q3 net earnings up 60.0 percent over prior year to $1.5 million
- Basic and diluted EPS were $0.08 and $0.07 respectively for Q3
- 3,000,000 shares issued at the beginning of Q3 to finance future growth.
-------------------------------------------------------------
-------------------------------------------------------------
CAD, millions, Three Months Ended Nine Month Ended
except EPS June 30th June 30th
data
-------------------------------------------------------------
2006 2005 Change 2006 2005 Change
-------------------------------------------------------------
Revenue 33,062,700 25,379,869 30.3% 97,600,017 68,938,132 41.6%
EBITDA 2,722,903 1,877,358 45.0% 9,175,467 5,048,789 81.7%
Net
Earnings 1,481,346 926,071 60.0% 5,065,862 2,412,923 109.9%
Basic EPS $0.08 $0.08 0.0% $0.33 $0.23 43.5%
Diluted EPS $0.07 $0.07 0.0% $0.29 $0.20 45.0%
-------------------------------------------------------------
-------------------------------------------------------------
Note: EBITDA is defined as earnings before interest, taxes, depreciation
and amortization
COMMERCIAL SOLUTIONS INC. ("Commercial" or "Company") a leading Canadian distributor of bearings, power transmission, industrial, safety, survey and resource management equipment products and services, today announced its financial results for the third quarter ended June 30, 2006. A complete copy of the Company's report is available on the Internet at www.sedar.com. Financial highlights from the fiscal 2006 third quarter are as follows:
For the three-month period ended June 30, 2006, Commercial reported increased revenue of $33.1 million compared to revenue of $25.4 million for the same period last year, representing a year-over-year increase of 30 percent. For the quarter, the Company reported a 45 percent increase in Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) of $2.7 million versus $1.9 million for the same period last year. Net income for the quarter increased 60 percent to $1.5 million compared to $0.9 million during the third quarter of fiscal 2005.
For the nine-month period ended June 30, 2006, earnings increased 110 percent to $5.1 million or $0.33 per share ($0.29 diluted) as compared to $2.4 million or $0.23 per share ($0.20 diluted) from the comparable nine-month period in 2005. Consolidated revenues rose by 42 percent to $97.6 million from $68.9 million and EBITDA improved by 110 percent to $9.2 million from $5.0 million for the prior year.
For the three months and nine months ended June 30, 2006, the EBITDA margins continued to improve to 8.2 percent and 9.4 percent from 7.4 percent and 7.3 percent in the comparative periods.
"We are very encouraged by the strong financial results we have been able to achieve this year, and continue to seek opportunities to grow and expand our portfolio of product offerings across Canada", said Jim Barker, President & CEO of Commercial. "The acquisition of Excel Bearings Inc. and Rig Products Inc. in this quarter further diversifies our Industrial Supplies and Oilfield Parts & Supplies segments and expands our footprint as a leading national supplier. We look forward to the successful integration of these two acquisitions into our family of companies."
For the three-month and nine month periods ended June 30, 2006, the basic weighted average number of shares outstanding were 17,531,525 (19,719,234 fully diluted) and 15,471,999 (17,733,599 fully diluted) respectively.
About Commercial
Headquartered in Edmonton, Alberta, Commercial is one of Canada's leading independent industrial distributors with 30 Services Centres and approximately 300 employees located across Canada. Commercial offers more than 160,000 items critical to maintenance repair and operations (MRO) and original equipment manufacturer (OEM) customers. The Company represents 500 leading manufacturers and serves over 10,000 customer accounts within a broad cross-section of industries, including oil and gas, forestry, food processing, chemical processing, mining and aggregate, utilities, agriculture and construction. Commercial trades under the symbol "CSA" on the Toronto Stock Exchange. For further information on the Company, please visit www.commercialsolutions.ca and for detailed financial information visit www.sedar.com.
Forward Looking Statements
From time to time, the Company may publish forward-looking statements relating to such matters as expected financial performance, business prospects, development activities and like matters. These statements involve risk and uncertainties, including but not limited to the risk factors previously described. Actual results could differ materially from those projected as a result of these risks and should not be relied upon as a prediction of future events. Commercial undertakes no obligation to update any forward-looking statement to reflect events or circumstances after the date on which such statement is made, or to reflect the occurrence of unanticipated events.
Consolidated Balance Sheets
June 30 September 30
2006 2005
(unaudited) (audited)
Assets
Cash and cash equivalents (note 2) $ 3,071,629 $ -
Accounts receivable 23,548,414 18,338,534
Inventory 21,541,717 16,527,643
Prepaids 795,122 546,000
--------------- -----------
48,956,882 35,412,177
Deferred costs 92,695 110,590
Future income tax 124,709 813,736
Property and equipment 3,391,896 2,085,741
Property held for sale (note 3) - 725,229
Intangible assets 2,281,909 1,230,153
Goodwill 18,844,657 11,590,441
--------------- -----------
$ 73,692,748 $ 51,968,067
--------------- -----------
--------------- -----------
Liabilities
Bank indebtedness (note 2) $ - $ 4,443,374
Accounts payable and accrued liabilities 17,789,669 13,157,390
Income taxes payable 1,306,794 834,958
Current portion of deferred tenant
inducement 20,000 20,000
Current portion of long term debt 1,188,682 1,144,111
Current portion of notes payable 1,347,167 1,182,228
--------------- -----------
21,652,312 20,782,061
Deferred tenant inducement 163,333 178,333
Long term debt 4,765,906 5,657,283
Notes payable 1,252,607 993,801
Preferred shares (note 4) - 968,178
--------------- -----------
27,834,158 28,579,656
--------------- -----------
Shareholders' Equity
Capital stock (note 4) 34,088,759 16,789,358
Contributed surplus 1,153,790 1,048,874
Retained earnings 10,616,041 5,550,179
--------------- -----------
45,858,590 23,388,411
--------------- -----------
$ 73,692,748 $ 51,968,067
--------------- -----------
--------------- -----------
On behalf of the Board:
"signed" "signed"
------------------------ ------------------------
Jim Barker, Director Don Caron, Director
Consolidated Statements of Earnings & Retained Earnings
Unaudited
Three Months Nine Months
Ended June 30 Ended June 30
2006 2005 2006 2005
------------------------------------------------------------------------
Revenue $ 33,062,700 $ 25,379,869 $ 97,600,017 $ 68,938,132
Cost of goods sold 24,005,899 18,320,340 70,384,697 49,474,871
---------------------------------------------------
Gross margin ($) 9,056,801 7,059,529 27,215,320 19,463,261
---------------------------------------------------
Gross margin (%) 27.4% 27.8% 27.9% 28.2%
Expenses
Salaries and
benefits 4,219,140 3,377,298 11,817,959 9,549,283
Selling, general &
administrative 2,114,758 1,804,873 6,221,894 4,865,189
---------------------------------------------------
6,333,898 5,182,171 18,039,853 14,414,472
---------------------------------------------------
2,722,903 1,877,358 9,175,467 5,048,789
---------------------------------------------------
Interest 1,740 98,690 113,331 284,418
Interest on long term
debt 229,619 206,834 735,085 629,659
Amortization of
property and
equipment 169,212 118,839 446,573 304,255
Amortization of
deferred costs 5,965 - 17,895 -
Amortization of
intangibles 84,751 - 230,973 -
---------------------------------------------------
491,287 424,363 1,543,857 1,218,332
---------------------------------------------------
Earnings before
income taxes 2,231,616 1,452,995 7,631,610 3,830,457
Income taxes 750,270 526,924 2,565,748 1,417,534
---------------------------------------------------
Net earnings 1,481,346 926,071 5,065,862 2,412,923
Retained earnings,
beginning of period 9,134,695 3,237,664 5,550,179 1,750,812
---------------------------------------------------
Retained earnings,
end of period $ 10,616,041 $ 4,163,735 $ 10,616,041 $ 4,163,735
---------------------------------------------------
---------------------------------------------------
Earnings per share -
basic $ 0.08 $ 0.08 $ 0.33 $ 0.23
Weighted average
number of shares 17,531,525 12,234,786 15,471,999 10,558,583
------------------------------------------------------------------------
Earnings per share -
diluted $ 0.07 $ 0.07 $ 0.29 $ 0.20
Weighted average
number of shares 19,719,234 13,673,869 17,733,599 11,863,784
------------------------------------------------------------------------
Consolidated Statements of Cash Flows
Unaudited
Three Months Nine Months
Ended June 30 Ended June 30
2006 2005 2006 2005
------------------------------------------------------
Increase
(decrease) in
cash and cash
equivalents
Operating
Net earnings $ 1,481,346 $ 926,071 $ 5,065,862 $ 2,412,923
Tenant inducement (5,000) - (15,000) -
Amortization of
notes payable
discount 16,497 - 77,739 -
Amortization of
property &
equipment,
deferred costs
and intangibles 259,928 118,839 695,441 304,255
(Gain)/loss on
disposal of
property and
equipment 1,524 (3,658) (10,200) 6,675
Stock based
compensation
expense 32,701 49,071 85,200 127,853
Future income tax
recovery
(expense) (252,024) 274,197 655,715 708,635
------------------------------------------------------
1,534,972 1,364,520 6,554,757 3,560,341
Changes in
non-cash working
capital (52,241) 153,714 (4,340,493) (2,628,945)
------------------------------------------------------
1,482,731 1,518,234 2,214,264 931,396
------------------------------------------------------
Financing
Banker's
acceptances (3,500,000) 3,000,000 (3,500,000) (5,000,000)
Issuances of
special
warrants, net (79,741) - 13,806,803 -
Issuances of
common shares, net 977,259 7,514,200 1,599,630 9,812,503
Warrant
cancellation - (100,000) - (100,000)
Preferred share
redemption - (900,000) - (900,000)
Proceeds from long
term debt - 3,000,000 - 3,000,000
Repayments of long
term debt (282,286) (2,003,672) (846,806) (2,475,363)
Proceeds from
notes payable 805,757 809,112 805,757 809,112
Repayments of
notes payable (353,250) (53,250) (459,750) (159,750)
------------------------------------------------------
(2,432,261) 11,266,390 11,405,634 4,986,502
------------------------------------------------------
Investing
Purchase of
property
and
equipment (408,239) (93,834) (866,280) (245,739)
Deferred costs
(increase)
decrease - (35,574) - 14,515
Proceeds on
disposal of
property and
equipment 7,175 5,000 19,650 76,582
Acquisitions
(note 5) (8,758,265) (4,511,384) (8,758,265) (4,511,384)
------------------------------------------------------
(9,159,329) (4,635,792) (9,604,895) (4,666,026)
------------------------------------------------------
Increase
(decrease)
in cash
and cash
equivalents during
the period (10,108,859) 8,148,832 4,015,003 1,251,872
Cash and cash
equivalents (note 2)
Beginning of
period 13,180,488 (8,948,255) (943,374) (2,051,295)
------------------------------------------------------
End of period $ 3,071,629 $ (799,423) $ 3,071,629 $ (799,423)
------------------------------------------------------
------------------------------------------------------
Non-cash
transaction
Conversion of
preferred
shares
(note 4) $ 968,178 $ 100,000 $ 968,178 $ 100,000
------------------------------------------------------
------------------------------------------------------
Copyright © 2008, MarketWire
Copyright © 2008, NewsBlaze,
Daily NewsTags: ,Manufacturing and Production:MachineryandTools, ,NY,EDMONTON, ALBERTA
_ _Is your favorite bookmark site missing?
Ask for it.
Search News
Daily News
