Total sales up 6.2% (comparable sales down slightly by 0.7%)
EBITDA of $4.9 million vs. $6.9 million a year earlier
Cash flow of $3.0 million vs. $5.4 million a year earlier
Strong balance sheet maintained
BOUCHERVILLE, QC, May 4 /CNW Telbec/ - Colabor Group Inc. (TSX: GCL)
("Colabor" or the "Company") today reported results for the first
quarter of fiscal 2011 ended March 26, 2011. These are the first
results of Colabor presented in accordance with IFRS.
Consolidated sales for the 85-day period ended March 26, 2011 were
$239.4 million, up 6.2% from $225.4 million for the 86-day period ended
March 27, 2010. The increase reflects the acquisition of RTD
Distributions Ltée ("RTD") on September 21, 2010 and Les Pêcheries
Norref Québec Inc. ("Norref") on February 28, 2011, acquisitions that
together contributed $26.4 million to sales for the quarter. This
contribution was partly offset by the residual effect of the loss of a
major supply contract in February 2010, amounting to an $8.2-million
reduction of sales. Excluding these changes, and on the basis of an
equal number of days, the Company's comparable sales decreased by a
marginal 0.7% as a result of difficult conditions in the foodservice
Earnings before financial expenses, income taxes, depreciation and
amortization ("EBITDA") were $4.9 million, or 2.05% of sales, compared
to $6.9 million, or 3.05% of sales, a year earlier. The reduction
reflects stiff competition in the foodservice distribution industry and
a steep increase in fuel costs that could not be immediately recovered.
Net earnings were breakeven, compared to $1.9 million in the
corresponding quarter of 2010. However, cash flow remained satisfactory
at $3.0 million, compared to $5.4 million a year earlier.
Under the newly applicable International Financial Reporting Standards
("IFRS"), the use of tax losses acquired at the time of conversion to a
corporation in 2009 requires the recording of a deferred income tax
charge against the Company's income. By way of comparison, the previous
accounting treatment, under Generally Accepted Accounting Principles
("GAAP"), entailed only a minimal deferred income tax charge and
amortization of the deferred credit in the Company's liabilities. Since
the deferred income tax charge involves no disbursement of funds,
management considers that cash flow is a better measure of Colabor's
financial performance. Results for the 86-day period ended March 27,
2010 have been restated.
(thousands of dollars except per-share data)
March 26, 2011
March 27, 2010
Weighted average number of shares outstanding (basic, in thousands)
* Cash flow from operations before changes in operating assets and
liabilities less purchases of property, plant and equipment and
"Difficult business conditions in the first quarter were aggravated by
normal seasonal variations," said Gilles C. Lachance, Colabor President
and Chief Executive Officer. "The increase in fuel costs weighed on our
results both by increasing our operating costs and by its dissuasive
effect on household discretionary expenditures such as spending on
meals taken outside the home. Despite these challenges, comparable
sales were almost stable and our operations generated satisfactory cash
Sales of the Wholesale segment were $72.3 million in the first quarter of 2011, down 8.4% from
$78.9 million in the first quarter of 2010. The decrease essentially
reflects the elimination of sales to entities of the Distribution
segment. Comparable sales were down 1.0%.
Sales of the Distribution segment were $167.1 million in first quarter 2011, compared to
$146.4 million a year earlier. The increase of $20.7 million is
attributable mainly to the acquisitions of RTD and Norref, offset in
part by the residual effect of the loss of a major contract in the
restaurant sector served by the Summit Division, in Ontario, in early
February 2010. Comparable sales were down 0.5%, with Summit sales
continuing to improve despite constraining business conditions.
As of March 26, 2011 the Company's balance sheet was sound, with
$70.6 million drawn on its authorized bank credit facility of
$150.0 million. The increase from the previous quarter reflects mainly
the acquisition of Norref for a net consideration of $42.8 million. The
ratio of total debt at March 26, 2011 to EBITDA of the previous 12
months was 1.93:1.00. The Company's credit agreement prescribes a ratio
below 3.00. The interest coverage ratio was 5.69:1.00, well above the
required minimum of 3.50.
During the first quarter, the company renewed its credit facilities.
Under the new agreement, Colabor will have access for a period of five
years to operating credit facilities of $150 million and will have the
option of increasing its credit facility by an additional $100 million,
subject to approval by the lenders.
On March 22, 2011, Colabor announced its intention to make an offer to
purchase all of the issued and outstanding common shares of SKOR Food
Group Inc. (TSX-V: SKF) ("SKOR") at a price of $1.33 in cash per share,
for a total consideration of approximately $35.6 million. SKOR is a
wholesale food supplier to the Ontario foodservices and retail
industries. For the 12 months ended February 28, 2011, SKOR had sales
of $138.1 million and EBITDA of $4.7 million. This acquisition,
expected to close in May 2011, will bring Colabor an expanded product
offering and footprint in Ontario.
On March 30, 2011, Colabor competed the acquisition of virtually all of
the assets of Edfrex Inc., an affiliated distributor in New Brunswick.
Edfrex distributes food products and food servings to food stores,
convenience stores, hotels, restaurants and institutions.
"Though we expect that competition will remain intense in 2011, Colabor
is advantageously positioned to benefit from the recovery as it gains
strength. Over the last eight months, Colabor has successfully
completed three acquisitions and is about to complete a fourth. These
initiatives have broadened our product offering and geographical scope
and have brought us appreciable synergies. Still more important,
Colabor's sound balance sheet allows us to remain on the lookout for
new business opportunities. Colabor's strategic objectives, beyond
expanding its product line and scope, are to offer its customers a
one-stop-shop solution and to become a player of national scope in its
target markets," Mr. Lachance concluded.
Colabor will hold a conference call to discuss its first-quarter results
on Wednesday, May 4, 2011, beginning at 4 p.m. Eastern Time. Interested
parties can join the call by dialling 1-877-974-0445. If you are unable
to participate, you can listen to a recording by dialling
1-877-289-8525 and entering the code 4436539# on your telephone keypad.
The recording will be available from 7 p.m. Wednesday, May 4 to 11:59
p.m. Wednesday, May 11, 2011.
The information provided in this release includes non-IFRS performance
measures, notably earnings before financial expenses, income taxes,
depreciation and amortization (EBITDA) and cash flow. Since these
concepts are not defined by IFRS, they may not be comparable to those
of other companies.
The Management Discussion and Analysis and financial statements of the Company will be available at SEDAR (www.sedar.com) following publication of this release. Additional information about
Colabor Group Inc. may also be found at SEDAR and on the Company's
website at www.colabor.com.
Colabor is a wholesaler and distributor of food and non-food products
serving the retail market (grocery stores, convenience stores, etc.)
and the foodservice market (cafeterias, restaurants, hotels, restaurant
chains), in Quebec, Ontario and the Atlantic provinces.
This news release may contain forward-looking statements reflecting the
opinions or current expectations of Colabor Group Inc. concerning its
performance and business operations and future events. These statements
are subject to risks, uncertainties and assumptions. Actual results or
events may differ.
SOURCE COLABOR GROUP INC.
For further information:
| Colabor Group Inc. || || MaisonBrison Inc. |
| Gilles C. Lachance |
President and Chief Executive
Tel. 450-449-0026 ext. 265
| Michel Loignon, CA |
Vice-President and Chief Financial
Tel. 450-449-0026 ext. 235
| Martin Goulet, CFA |
Tel. 514-731-0000 ext. 229