TORONTO, May 13 /CNW/ - General Donlee Canada Inc. (the "Corporation",
the "Company" or "General Donlee") (TSX: GDI) (formerly "General Donlee
Income Fund") today announced its results for the first quarter, ended
March 31, 2011. General Donlee was converted from an Income Fund to a
Corporation effective January 1, 2011.
General Donlee's first quarter 2011 results included:
Sales of $12.6 million, up 21% compared to Q1 2010
Gross profit of $2.9 million compared to $2.5 million in Q1 2010
Net income of $1.3 million, a significant increase compared to net
income of $0.2 million in Q1 2010, with basic income per share of $0.24
compared to $0.03 per unit in the same period in 2010
Sales order backlog of $49.4 million at March 31, 2011, up $4.6 million
from year-end 2010
Declaration of $0.165 per share in dividends payable to shareholders of
record on March 31, 2011
"General Donlee's strong results in the first quarter of 2011, with a
21% increase over the comparable period in 2010, are evidence that the
Company's effective execution of its business strategy are yielding
results and that Management's anticipation of continued growth is
well-grounded," said Michael Snow, Chief Executive Officer of General
Donlee Canada Inc. "The significant $4.6 million growth in the
Company's production order backlog relative to 2010 year-end further
confirms the growth trends experienced by the industries General Donlee
serves and the success of the Company's business strategy."
Positive cash flow from operations in the first quarter
General Donlee's operating activities during the first quarter generated
positive cash flow of $1.6 million, consisting of cash from operating
activities of $1.7 million while non-cash working capital items
required $0.1 million.
Production backlog continues to build
The Company's continued efforts to augment relationships with existing
customers and to create opportunities with new ones have had the
two-fold effect of delivering consecutive quarters of significant sales
increases, and building on its already-strong production backlog.
"Leveraging our excellent track record and recognizing opportunities in
the marketplace, we were able to build our production backlog by a
further $4.6 million in the first quarter, bringing it to $49.4 million
by March 31, 2011," said Mr. Snow. "This is solid evidence of ongoing
demand for our products, and is a testament to continued customer
confidence in General Donlee. Looking to the second quarter and beyond,
we see significant opportunities to quote on new business in industries
served by both of our divisions, an excellent sign for the future."
The following summary of financial data presents General Donlee's
consolidated results of operations for the three-month period ended
March 31, 2011, including comparative results for the same period in
($ millions, except Share/Unit and
per Share/Unit amounts, unaudited)
Three Months Ended
Basic income per share/unit
(a) Based on weighted average of 5,332,317 shares/units outstanding.
In the quarter ended March 31, 2011 the Company delivered sales of $12.6
million - an increase of $2.2 million, or 21%, over its sales in the
same period in 2010. Sales in the Company's aerospace and power
generation products division were $7.6 million - growth of $1.4
million, or 22%, over 2010, largely reflecting higher demand in
commercial aerospace components for wide body aircraft engines, net of
the negative impact of the rising Canadian dollar. General Donlee's
industrial products division's sales in the first quarter of 2011 were
$5.0 million, an increase of $0.8 million or 20% over the same period
last year, due to the Company's ongoing efforts to engage new customers
and to grow its business with existing ones.
The net income General Donlee achieved for the three months ended March
31, 2011 was $1.3 million, an increase over the same period in the
previous year; this result incorporated the stronger gross profit
resulting from improved sales, net of the negative impact of the rising
Canadian dollar and as a result of the IFRS transition, the retroactive
inclusion in 2010 of a negative change of $0.45 million (net of a
deferred tax recovery of $0.39 million) in the fair value of the
debenture conversion option.
General Donlee has sufficient working capital to support its current
operations, as well as additional credit facilities to support future
growth. At March 31, 2011, General Donlee had working capital of $15.6
million, compared to $15.9 million at December 31, 2010.
Conversion to IFRS
As of January 1, 2011, IFRS became effective for the Corporation
replacing GAAP standards and as of that date the Corporation has
adopted IFRS in reporting its interim and annual financial statements.
Accordingly, the Corporation's inaugural IFRS results, and all future
results, will be reported under IFRS and 2010 historical results have
been restated to IFRS for comparison purposes. A reconciliation of the
results as reported under prior Canadian GAAP and under IFRS will be
included in the notes to the Corporation's interim Consolidated
Completion of Conversion to a Corporation
On January 1, 2011, General Donlee Canada Inc. completed its
previously-announced plan of arrangement to convert the Fund from an
income trust to a public corporation. The common shares and debentures
of the Corporation started trading on the Toronto Stock Exchange under
the symbols "GDI" and "GDI.DB," respectively, at the opening of trading
on January 4, 2011.
"The results we have delivered in the first quarter of 2011 build on the
momentum we began gaining in 2010, as our industry worked to climb its
way out of the economic challenges that had characterized the latter
part of the last decade," said Mr. Snow. "The strategies which we
employed enabled General Donlee to weather that economic storm, and now
we are well positioned to deliver significant sales growth as the
industry turns the corner. Thanks to our focus on customer
relationships - both with long-time customers and with new ones - as
well as our strategic efforts to improve our operational effectiveness
and profitability, we are a step ahead of the trend, and able to
leverage that position to our Shareholders' benefit."
"In the quarters ahead, we will continue to leverage our strengths to
take advantage of the positive trends seen in the military, industrial,
power generation and certain segments of the commercial aerospace
sectors." said Mr. Snow. "Already recognizing and acting on an increase
in opportunities to quote for new business, we are working to further
build on our strong production order backlog and make best use of our
first-rate facilities, state-of-the-art equipment, and expert staff."
General Donlee Canada Inc. is a leading diversified manufacturer of
precision-machined products for the military, commercial and general
aerospace industries, and a specialist in the manufacture of
precision-machined products for the industrial products and power
generation industries. General Donlee's operating strategy focuses on
targeting niche markets for products that are aligned with its
sophisticated manufacturing capabilities and skilled workforce.
On May 16, 2011 the Corporation will file its interim Consolidated
Financial Statements (including the notes thereto) and Management's
Discussion and Analysis for the quarter ended March 31, 2011 with SEDAR
at www.sedar.com. These documents will also be available on the company's website at www.generaldonlee.com on the Financial Reports page.
As with all forward-looking statements, caution must be exercised to
ensure that appropriate interpretation is made. Certain forward-looking
statements are based on information currently available to Management,
but are subject to a number of uncertainties and risks that could cause
actual results to differ materially from the results discussed in the
forward-looking statements. These uncertainties and risks include, but
are not limited to those listed under the "Risk Factors" section of the
Corporation's 2010 Annual Information Form, dated March 25, 2011 (which
can be found at www.sedar.com).
Further information can be found in the disclosure documents filed by
General Donlee Canada Inc. with the securities regulatory authorities,
available at www.sedar.com or through the Corporation's website at www.generaldonlee.com.
% SEDAR 00017571E
SOURCE General Donlee Canada Inc.
For further information:
Chief Financial Officer
Telephone: (416) 743-4417
Web site: www.generaldonlee.com