GBO releases its first quarter results

STE-MARIE DE BEAUCE, QC, Aug. 17, 2011 /CNW Telbec/ - (Note: All amounts are in Canadian dollars.) For the three months ended May 31, 2011, GBO Inc. ("GBO" or the "Company") (TSXV: GBO), manufacturer of "Bonneville" windows and doors, had sales of $3.1 million compared with $4.6 million in the same period of the previous year. Canadian sales declined by $1.4 million or 53.6% to $1.2million, compared with $2.7 million in the same quarter of the previous year.

The Company's U.S. sales decreased by $0.1 million or 6.4% (0.5% decrease at a constant exchange rate) to stand at $1.8 million, compared with $1.9 million in the same quarter of the previous year.

GBO recorded an operating loss of $1.6 million during the first quarter of fiscal 2012, compared with an operating loss of $1.1 million a year earlier.

GBO completed the quarter with a pre-tax loss and a net loss of $1.8 million or $0.10 per share (basic and diluted), compared with a pre-tax loss of $1.1 million and net loss of $0.8 million or $0.02 per share (basic and diluted) in the same quarter of fiscal 2011. This decline is primarily due to the adverse weather since snow and rain delayed construction starts until the end of May. Compounding the problem was the work stoppage following the flooding of our production facility, which is situated less than 150 meters from the region's principal tributary. This work stoppage, which occurred twice during the quarter, pushed sales into the second quarter thus contributing to the decline.

Outlook

Despite the fact that the United States market remains fragile, the Company continues to see positive signs. We continue to enter into agreements with new distributors and our customer portfolio continues to increase significantly in this sector. At the current rate, the percentage of sales to the U.S. will surpass those to Canada which is unprecedented for the Company. The niche strategy employed to penetrate the South-Eastern United States market, where many customers have indicated their satisfaction with the quality and competitiveness of our products, remains the Company's battle horse. The Company has many major bids which are currently under examination, which bodes quite well for the upcoming quarters.

The next quarter will be dedicated to re-establishing our "in-time" deliveries following the temporary facility closures in April and May as well as familiarizing ourselves with our new sealed-glass unit partner. This new partner, one of the largest glass suppliers in North America, offers us exceptional support and will certainly increase brand recognition since these glass products are also employed by our major competitors. We continue to develop our new management system (ERP / MRP) which requires continued support from our personnel. However, the complexity of our custom products and our desire for a flawless deployment has forced us to review the implementation schedule and we are now looking at a fall 2011 launch.

Profile

Founded in 1946, GBO Inc. is an important Canadian window and door manufacturer. The Company designs, develops, manufactures, markets and distributes a selection of mid-range and high-end energy-efficient wood window arrangements, doors and accessories, sold primarily under the "Bonneville" and "Polar" brands. Recently, GBO launched a line of innovative fenestration products resistant to hurricanes and other impacts. The Company sells its windows and doors to the home improvement and construction markets mainly in Quebec, Ontario, the Maritimes and the Eastern and Southern eastern United States. GBO mainly serves independent building material distributors, distributors specializing in windows, doors and millwork, certain retailers, as well as construction and renovation contractors.

The statements set forth in this press release that describe GBO's objectives, projections, estimates, expectations or forecasts may constitute forward looking statements within the meaning of securities legislation. GBO would like to point out that, by their very nature, forward-looking statements involve a number of risks and uncertainties such that actual results or the measures it adopts could therefore differ materially from those indicated or underlying these forward-looking statements, or could have an impact on the degree of realization of a particular projection. There can be no assurance as to the materialization of the results, performance or achievements as expressed or implied by the forward-looking statements. Unless required to do so pursuant to applicable securities legislation, GBO's management assumes no obligation as to the updating or revision of the forward-looking statements as a result of new information, future events or other changes.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release. This press release contains forward-looking statements based on the Company's the current outlook regarding the future. Such information involves a number of risks, uncertainties and assumptions. Actual results and events could differ materially from those indicated or underlying the forward-looking statements.

GBO INC.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Periods ended May 31
(unaudited; in thousands of Canadian dollars, except amounts per share)

  3-month periods
ended May 31
  2011   2010
  $   $
Revenue   3,078   4,626
Cost of sales and operating expenses, including amortization and 
depreciation of $318; $293 in 2010
  4,696     5,764
Operating loss (1,618)   (1,138)
       
Finance costs 107   (7)
Financial revenue (1)   (26)
Loss on disposal of property, plant and equipment 20   1
Exchange loss (gain) 7   (48)
Loss before tax (1,751)   (1,058)
Deferred tax expense     (288)
Net loss and comprehensive income (1,751)   (770)
             
Loss per share      
Basic and diluted (0.10)   (0.02)
       
Weighted average number of ordinary shares outstanding 17,695,569   32,686,569



GBO INC.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Periods ended May 31
(unaudited; in thousands of Canadian dollars)

        Share
capital
  Contributed
surplus
  Deficit   Total
equity
    $   $   $
Balance at March 1, 2011 23,985   17,843   (28,981)   12,847
Net loss for the period         (1,751)   (1,751)
Share-based payments and total transactions with owners     1       1
Balance at May 31, 2011 23,985   17,844   (30,732)   11,097
               
Balance at March 1, 2011 44,527   455   (24,310)   20,672
Net loss for the period         (770)   (770)
Redemption of preferred shares (212)   197       (15)
Share-based payments     1       1
Total transactions with owners (212)   198       (14)
Balance at May 31, 2011 44,315   653   (25,080)   19,888



GBO INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
Periods ended May 31
(unaudited; in thousands of canadian dollars)

        3-month periods
ended May 31
        2011   2010
        $   $
OPERATING ACTIVITIES      
Loss before tax   (1,751)   (1,058)
  Non-cash items      
    Loss on disposal of property, plant and equipment 20   1
    Amortization of property, plant and equipment 235   236
    Amortization of intangible assets 83   57
    Interest revenue on note receivable (12)    
    Share-based payments 1   1
    Net changes in working capital 977   (910)
Cash flows from operating activities (447)   (1,673)
             
INVESTING ACTIVITIES      
  Property, plant and equipment (167)   (152)
  Disposal of property, plant and equipment     7
  Receipt of note receivable     36
  Intangible assets (87)   (164)
Cash flows from investing activities (254)   (273)
             
FINANCING ACTIVITIES      
  Bank loan 989    
  Repayment of note payable to a company controlled by a Director (492)    
  Redemption of preferred shares     (15)
  Loan repayments (23)   (22)
Cash flows from financing activities 474   (37)
Net change in CCE (227)   (1,983)
CCE, beginning of year 94   5,097
CCE (bank overdraft), end of year (133)   3,114
Interest paid included in operating activities aggregate to $97 for the period ended May 31, 2011 ($8 for the period ended May 31, 2010).



GBO INC.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
(unaudited; in thousands of Canadian dollars)

        May 31,
2011
  February 28,
2011
  March 1,
2010
           
        $   $   $
ASSETS            
                 
Current            
  Cash and cash equivalents     94   5,097
  Trade and other receivables 1,406   2,449   2,091
  Note receivable         1,000
  Current tax assets         30
  Inventories 2,416   2,464   2,436
  Prepaid expenses and other 297   189   288
  Other short-term financial asset 200   200   200
Current assets 4,319   5,396   11,142
                 
Non-current          
  Other long-term financial asset 920   908   1,331
  Property, plant and equipment 8,499   8,587   9,157
  Intangible assets 607   603   643
  Deferred tax assets 2,378   2,378   2,378
Non-current assets 12,404   12,476   13,509
Total assets 16,723   17,872   24,651
                 
Liabilities and equity          
                 
LIABILITIES          
                 
Current            
  Bank overdraft 133        
  Note payable to a company controlled by a Director, 12%, payable on demand     492    
  Bank loan 989        
  Trade and other payables 4,141   4,147   3,525
  Provision for warranties 300   300   300
  Finance lease liabilities 47   69   85
Current liabilities 5,610   5,008   3,910
                 
Non-current          
  Finance lease liabilities 16   17   69
Total liabilities 5,626   5,025   3,979
                 
Equity            
  Share capital 23,985   23,985   44,527
  Contributed surplus 17,844   17,843   455
  Deficit   (30,732)   (28,981)   (24,310)
Total equity 11,097   12,847   20,672
Total liabilities and equity 16,723   17,872   24,651

 

 

 

 

For further information:
Source :   GBO Inc.
Contact : Christopher M. Wood, Chairman of the Board and Chief Executive Officer
(418) 387-7723