Tri-White Corporation announces third quarter 2007 results and regular eligible dividend of $0.06 per share



    TSX:TWH

    TORONTO, Nov. 12 /CNW/ -

    Financial Highlights

    
    -------------------------------------------------------------------------
                                    Three months ended     Nine months ended
                                 --------------------------------------------
    (in thousands of dollars      September  September  September  September
     except per share amounts)     30, 2007   30, 2006   30, 2007   30, 2006
    -------------------------------------------------------------------------
    Revenue                          96,992     25,723    141,416     40,373
    -------------------------------------------------------------------------
    EBITDA(1)                        40,424     16,999     55,814     22,260
    -------------------------------------------------------------------------
    Interest and other
     income (expense)                (6,194)        (7)    (7,572)      (288)
    -------------------------------------------------------------------------
    Equity income (loss)                117      2,926     (2,239)    11,698
    -------------------------------------------------------------------------
    Provision for income taxes       12,631      4,037     17,924      7,950
    -------------------------------------------------------------------------
    Non-controlling interest          2,611          -      3,934          -
    -------------------------------------------------------------------------
    Net earnings                     12,712     15,080     14,145     23,345
    -------------------------------------------------------------------------
    Earnings per share - basic        $0.56      $0.66      $0.62      $1.02
    -------------------------------------------------------------------------
    Weighted average shares
     outstanding                                           22,800     22,932
    -------------------------------------------------------------------------

    (1) EBITDA is not a recognized performance measure under Canadian GAAP.
        EBITDA is defined as earnings before taxes, interest, depreciation,
        amortization, non-controlling interest and earnings from equity
        accounted investments. Management believes that in addition to net
        earnings, this measure is useful supplemental information to provide
        investors with an indication of income available prior to debt
        service, capital expenditures and income taxes. Investors should be
        cautioned, however, that this measure should not be construed as an
        alternative to net earnings determined in accordance with GAAP as an
        indicator of the Company.

         TODAY, THE COMPANY ANNOUNCED THE REGULAR ELIGIBLE DIVIDEND
       OF $0.06 PER SHARE TO BE PAID ON DECEMBER 31st TO SHAREHOLDERS
                        OF RECORD AS AT DECEMBER 10TH
    

    Third Quarter Operating Highlights

    The tourist operations at White Pass and the golf operations of ClubLink
are highly seasonal. The majority of the revenue and earnings from these
businesses occur during the third quarter of the year. Accordingly, the
earnings of the Company will fluctuate with those of the underlying business
units.
    On June 1st, 2007, the Company acquired an additional 6,635,300 shares of
ClubLink (representing 39.0% of ClubLink's outstanding common shares) to
increase its ownership interest to 70.7%. The purchase price of this
additional interest, including transaction costs, was $88,018,000 and was
funded through issuance of a one year unsecured note of $35,000,000 bearing
interest at a rate of the greater of the Canadian prime lending rate and 6%,
with the balance of $53,018,000 in cash. The acquisition has been accounted
for under the purchase method of accounting. As part of the accounting
treatment, the Company allocated the purchase price on the identifiable assets
and liabilities acquired based on their estimated fair values at the time of
acquisition. The earnings of ClubLink have been accounted for under the equity
method to May 31st, 2007 and subsequently have been included in the
consolidated statement of income and cash flow from June 1st, 2007.
    The purchase price allocation is considered preliminary until the Company
has obtained the necessary information to complete its allocations. As a
result, the purchase price allocation may be adjusted in the fourth quarter of
2007.
    The Company's operating income originates from White Pass and ClubLink.
White Pass is a wholly owned subsidiary. Significant revenue is generated in
the third quarter as ship arrivals peak and tourist traffic is at its high
point. EBITDA from the Alaska operations decreased from US$15,337,000 in 2006
to US$15,048,000 for the third quarter of 2007. Although passenger counts
increased by approximately 7%, White Pass incurred unusually high maintenance
costs to sustain the efficiency and safety of the operation. As well, this
division established a reserve of US$1,578,000 relating to the settlement of
one of its major labour contracts.
    The results of the subsidiary, which is deemed self-sustaining, are
translated into Canadian currency using average rates during the period. A
change in average exchange rates can impact the net earnings of the Company.
    EBITDA (defined as revenue less cost of sales and operating expenses) for
the nine months ended September 30, 2007 was $55,814,000 compared with
$22,260,000 for the nine months ended September 30, 2006. The positive
variance of $33,554,000 over the same period last year is mainly due to the
acquisition of ClubLink on June 1, 2007, and accordingly Tri-White is
consolidating the results of ClubLink for the four month period from June 1st
to September 30th.
    Tri-White has a significant ownership interest in two public entities,
for which it has recorded income on an equity basis. ClubLink Corporation
("ClubLink") is Canada's largest owner, operator and developer of high-quality
Member Golf Clubs, Daily Fee Golf Clubs and Golf Resorts, with 39 and one-half
18-hole equivalent golf courses open for play in 2007. Like the White Pass
port and tourist operations, ClubLink operates in a highly seasonal market.
For the five months ended May 31, 2007 the Company recorded an equity loss of
$2,096,000 compared to income of $864,000 during the nine months ended
September 30, 2006. Commencing June 1st, 2007, the Company has reflected the
earnings of ClubLink on a consolidated basis.
    The Company also accounts for its investment in Renasant Financial
Partners Ltd. ("Renasant") using the equity method. The acquisition of the
Company's 34.5% interest in Renasant was obtained in November 2003. The
Company's interest as at September 30, 2007 stands at 36.5%. The equity income
recorded by Tri-White for the quarter ended September 30, 2007 was $117,000,
(2006 - equity income of $410,000). This was based on the operating results of
Renasant for the three months ended June 30, 2007. The Company records its
equity interest in Renasant on a three-month trailing basis. No dividends were
received in the quarter ended September 30, 2007 (2006 - $22,182,000).
    Net earnings for the nine months ended September 30, 2007 reached
$14,145,000 or $0.62 per share as compared with $23,345,000 or $1.02 per share
in 2006. The variance is largely attributable to a one-time gain in 2006 on
distributions from the investment in Renasant resulting in income of
$10,834,000 or $0.47 per share.
    Long-term investments include 3.2 million shares of Renasant carried at
$5,460,000. At September 30, 2007, the market value of these assets exceeds
their carrying cost by $1,416,000 (December 31, 2006 - below market value by
$1,478,000).

    Corporate Developments

    Tri-White has advised ClubLink Corporation that it does not intend to
make a follow-up offer to purchase the balance of the outstanding shares of
ClubLink on the same terms as it acquired 6,635,300 common shares of ClubLink
on June 1st, 2007. The shares of ClubLink are held for investment purposes;
Tri-White may increase or decrease its beneficial ownership of ClubLink shares
as circumstances warrant.
    The Company has been approved by the Toronto Stock Exchange to make a
normal course issuer bid to purchase up to 1,136,828 common shares. The
program expires September 19, 2008. During the nine months ended September 30,
2007 the Company purchased 204,700 shares (September 30, 2006 - nil).
    The Company continued with its regular quarterly dividend program and
paid an eligible dividend of $0.06 per share, or $1,356,000 on September 28th.

    Financial statements are attached.

    Statements contained herein that are not based on historical or current
fact, including without limitation statements containing the words
"anticipates," "believes," "may," "continue," "estimate," "expects," and
"will" and words of similar import, constitute "forward-looking statements".
Such forward-looking statements involve known and unknown risks, uncertainties
and other factors that may cause the actual results, events or developments to
be materially different from any future results, events or developments
expressed or implied by such forward-looking statements. Such factors include,
among others, the following: general economic and business conditions, both
nationally and in the regions in which the Company operates; changes in
business strategy or development/acquisition plans; environmental exposures,
financing risk; existing governmental regulations and changes in, or the
failure to comply with, governmental regulations; liability and other claims
asserted against the Company; and other factors referenced in the Company's
filings with Canadian securities regulators. Given these uncertainties,
readers are cautioned not to place undue reliance on such forward-looking
statements. The Company does not assume the obligation to update or revise any
forward-looking statements.

    Management's discussion and analysis, financial statements and other
disclosure information relating to the Company is available through SEDAR and
at www.sedar.com and on the Company website at www.tri-white.com.


    
                            TRI-WHITE CORPORATION

                      CONSOLIDATED FINANCIAL STATEMENTS

                                  UNAUDITED

                             September 30, 2007



                            TRI-WHITE CORPORATION
                         CONSOLIDATED BALANCE SHEETS
                                 (Unaudited)

                                                  September 30,  December 31,
    (in thousands of dollars)                             2007          2006
    -------------------------------------------------------------------------

    ASSETS
    Current
      Cash                                         $     4,484   $    21,853
      Accounts receivable                               20,597           543
      Mortgages and loans receivable                       417        16,892
      Inventories and prepaid expenses                  13,512         4,939
      Other assets                                       3,230             -
    -------------------------------------------------------------------------
                                                        42,240        44,227
    Long-term investments                                5,460        36,554
    Mortgages and loans receivable                       5,780             -
    Capital assets                                     597,868        73,957
    Other assets                                         3,618             -
    Intangible assets                                   10,607             -
    Goodwill                                             9,107             -
    -------------------------------------------------------------------------
    Total assets                                   $   674,680   $   154,738
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    LIABILITIES AND SHAREHOLDERS' EQUITY
    Current
      Revolving long-term debt                     $    23,791   $    21,706
      Non-revolving long-term debt                      11,373             -
      Capital lease obligations                          5,098             -
      Note payable                                      35,000             -
      Convertible debentures                            10,092             -
      Accounts payable and accrued liabilities          30,364         1,915
      Income and other taxes payable                    10,465         1,655
      Prepaid annual dues and deposits                  17,748             -
    -------------------------------------------------------------------------
                                                       143,931        25,276
    Revolving long-term debt                            43,996             -
    Non-revolving long-term debt                       239,498             -
    Capital lease obligations                           10,346             -
    Deferred membership fees                            56,672             -
    Future income taxes                                 17,961        17,055
    -------------------------------------------------------------------------
    Total liabilities                                  512,404        42,331
    -------------------------------------------------------------------------
    Non-controlling interest                            50,842             -
    -------------------------------------------------------------------------
    Shareholders' equity
      Share capital                                     60,765        61,278
      Contributed surplus                                  237           191
      Retained earnings                                 73,889        65,205
      Accumulated other comprehensive income           (23,457)      (14,267)
    -------------------------------------------------------------------------
    Total shareholders' equity                         111,434       112,407
    -------------------------------------------------------------------------
    Total liabilities and shareholders' equity     $   674,680   $   154,738
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------



                            TRI-WHITE CORPORATION
         CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
                                 (Unaudited)


                                         For the               For the
                                    Three months ended     Nine months ended
    (thousands of dollars           Sep. 30    Sep. 30    Sep. 30    Sep. 30
     except per share amounts)         2007       2006       2007       2006
    -------------------------------------------------------------------------

    REVENUE
      Operating revenue           $  93,527  $  25,723  $ 136,723  $  40,373
      Amortization of membership
       fees                           3,465          -      4,693          -
    -------------------------------------------------------------------------
                                     96,992     25,723    141,416     40,373
    -------------------------------------------------------------------------
    EXPENSES
      Operating expenses             56,568      8,724     85,602     18,113
    -------------------------------------------------------------------------
    Earnings before other items,
     income taxes and non-
     controlling interest            40,424     16,999     55,814     22,260
    -------------------------------------------------------------------------

    OTHER ITEMS
      Amortization of capital
       assets                        (5,066)      (801)    (8,122)    (2,375)
      Amortization of other
       assets and intangibles          (284)         -       (435)         -
      Land lease rent                (1,043)         -     (1,443)         -
      Investment income                 677        535      1,911      1,159
      Interest expense               (6,750)      (557)    (9,490)    (1,590)
      Gain (loss) on sale of
       investments and capital
       assets                             -         (3)         7         (3)
      Unrealized foreign
       exchange gain (loss)            (121)        18          -        146
      Income (loss) on equity
       accounted investments
        - ClubLink Corporation            -      2,516     (2,096)       864
        - Renasant Financial
          Partners Ltd.                 117        410       (143)    10,834
    -------------------------------------------------------------------------
                                    (12,470)     2,118    (19,811)     9,035
    -------------------------------------------------------------------------
    Earnings before income taxes
     and non-controlling interest    27,954     19,117     36,003     31,295
    -------------------------------------------------------------------------
    Provision for income taxes
      Current                        10,274      6,954     14,552      9,472
      Future                          2,357     (2,917)     3,372     (1,522)
    -------------------------------------------------------------------------
                                     12,631      4,037     17,924      7,950
    -------------------------------------------------------------------------
    Net earnings before non-
     controlling interest            15,323     15,080     18,079     23,345
    Non-controlling interest         (2,611)         -     (3,934)         -
    -------------------------------------------------------------------------
    Net earnings                     12,712     15,080     14,145     23,345
    Unrealized foreign currency
     translation loss                (3,150)      (199)    (9,190)    (3,369)
    -------------------------------------------------------------------------
    Total comprehensive earnings  $   9,562  $  14,881  $   4,955  $  19,976
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Earnings per share
    Basic                         $    0.56  $    0.66  $    0.62  $    1.02
    Diluted                       $    0.55  $    0.65  $    0.61  $    1.01
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------



                            TRI-WHITE CORPORATION
                    CONSOLIDATED STATEMENTS OF CASH FLOW
                                 (Unaudited)


                                         For the               For the
                                    Three months ended     Nine months ended
                                    Sep. 30,   Sep. 30,   Sep. 30,   Sep. 30,
    (in thousands of dollars)          2007       2006       2007       2006
    -------------------------------------------------------------------------

    OPERATING ACTIVITIES
      Net earnings for the period $  12,712  $  15,080  $  14,145  $  23,345
      Items not affecting cash:
        Amortization of capital
         assets                       5,066        801      8,122      2,375
        Amortization of other
         assets and intangibles         284          -        435          -
        Future income taxes           2,357     (2,917)     3,372     (1,522)
        Amortization of
         membership fees             (3,465)         -     (4,693)         -
        Loss (gain) on sale of
         assets and investments           -          3         (7)         3
        (Income) loss of equity
         accounted investment
         - ClubLink                       -     (2,516)     2,096       (864)
        (Income) loss of equity
         accounted investment
         - Renasant                    (117)      (410)       143    (10,834)
        Non controlling interest
         - ClubLink                   2,611          -      3,934          -
        Net unrealized foreign
         exchange loss (gain)           121        (18)         -       (146)
        Stock compensation expense       15         15         46         46
      Distributions from equity
       accounted investments              -     12,377        664     13,532
      Collection of membership
       fee installments               7,727          -      9,864          -
      Net change in operating
       assets and liabilities        (5,622)     7,364    (19,539)     2,228
    -------------------------------------------------------------------------
    Cash provided by operating
     activities                      21,689     29,779     18,582     28,163
    -------------------------------------------------------------------------

    FINANCING ACTIVITIES
      Promissory notes                    -     (6,000)         -    (17,935)
      Proceeds on issue of
       subsidiary common shares          34          -         50          -
      Shares purchased for
       cancellation                       -          -     (1,906)         -
      Dividends paid                 (1,356)    (1,360)    (4,068)    (4,080)
      Dividends paid
       - minority interest             (301)         -       (301)         -
      Capital lease obligations         665          -      1,779          -
      Deferred financing charges          -          -        (95)         -
      Revolving long-term debt      (13,116)       183      9,672          -
      Non-revolving long-term debt   (2,213)         -     (2,213)         -
      Loan payable                   (4,000)         -          -      6,384
    -------------------------------------------------------------------------
    Cash provided by (used in)
     financing activities           (20,287)    (7,177)     2,918    (15,631)
    -------------------------------------------------------------------------

    INVESTING ACTIVITIES
      Purchase of capital assets     (5,130)    (1,087)   (16,633)    (2,096)
      Long-term investments               -       (762)   (52,918)      (762)
      Return of capital                   -     10,073      9,480     10,073
      Cash acquired by increasing
       interest in ClubLink               -          -      1,603          -
      Advances of loan receivable         -          -     (5,204)         -
      Repayment of loans receivable   4,701      5,000     26,815      5,000
    -------------------------------------------------------------------------
    Cash provided by (used in)
     investing activities              (429)    13,224    (36,857)    12,215
    -------------------------------------------------------------------------
    Net effect of currency
     translation adjustment on
     cash and cash equivalents       (1,216)       (93)    (2,012)      (751)
    -------------------------------------------------------------------------
    Net increase (decrease) in
     cash and cash equivalents
     during the period                 (243)    35,733    (17,369)    23,996
    Cash and cash equivalents,
     beginning of period              4,727      8,732     21,853     20,469
    -------------------------------------------------------------------------
    Cash and cash equivalents,
     end of period                $   4,484  $  44,465  $   4,484  $  44,465
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Represented by
      Cash                        $   4,484  $  44,465  $   4,484  $  44,465
      Cash equivalents                    -          -          -          -
    -------------------------------------------------------------------------
                                  $   4,484  $  44,465  $   4,484  $  44,465
    -------------------------------------------------------------------------
    

    %SEDAR: 00009355E




For further information:

For further information: Mr. Donald Turple, Chief Financial Officer, 55
City Centre Drive, Suite 1000, Mississauga, Ontario, Phone: (905) 281-4800,
Fax: (905) 281-5890, dturple@morguard.com

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TRI-WHITE CORPORATION

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