TORONTO, Nov. 7, 2011 /CNW/ - General Donlee Canada Inc. (the
"Corporation," the "Company" or "General Donlee") (TSX: GDI) today
announced its results for the third quarter, ended September 30, 2011.
The Board has declared a quarterly dividend of $0.0825 per common share
payable on January 16, 2012 to holders of record at the close of
business on December 30, 2011.
Financial highlights relating to General Donlee's third quarter 2011
Sales of $12.5 million, up 25% compared to Q3 2010
$2.0 million in cash flow from operations before changes in working
capital, an increase of 55% compared to Q3 2010
Net income of $0.5 million compared to net income of $1.4 million in Q3
Sales order backlog of $53.6 million at September 30, 2011, up $8.8
million from year-end 2010
Quarterly dividend of $0.0825 per share announced on September 22, 2011
and paid to shareholders on October 14, 2011
Consistent growth in sales and positive cash flow from operations
"General Donlee's 25% increase in sales in the third quarter and 22%
increase in sales year-to-date over the comparable periods last year
continue to reflect improving fundamentals in the industries we serve
and our ability to grow our business with current and new customers. As
a result, in the third quarter we generated $2.0 million of positive
cash flow from operations before changes in working capital, and paid
out $0.88 million in quarterly dividends to shareholders," said Interim
Chief Executive Officer and Chief Financial Officer, Garen
"Our production order backlog which has grown by $8.8 million in the
first nine months of 2011 remains strong at $53.6 million, up 20%
relative to our backlog at the end of last year," said Mr.
Mikirditsian. "The strong backlog builds confidence for the future and
is evidence that our customer-focused business strategy is yielding
positive, concrete results. Based on the increased rate of quoting
activity we've seen in 2011, we expect demand to remain robust."
Impact of stronger USD at quarter-end
"Our net income for the quarter reflects a net foreign exchange loss of
$0.5 million mainly resulting from a non-cash mark-to-market loss of
$0.7 million on our long-term hedging program due to the USD gaining
strength at the end of the month of September. Net income for the third
quarter also reflects a $0.2 million provision for deferred taxes.
Excluding the impact of foreign exchange gains or losses and deferred
taxes, net income for the third quarter of 2011 was $1.2 million, a 60%
increase compared to net income of $0.75 million in the similar period
in 2010," said Mr. Mikirditsian.
To mitigate its exposure to currency fluctuations, General Donlee has a
rolling hedging program with a chartered Canadian bank through which it
reduces its U.S. dollar exposure by entering into foreign exchange
forward contracts. As of September 30, 2011, the Company had foreign
exchange forward contracts outstanding to sell $16.9 million U.S.
dollars and to buy Canadian dollars at an average exchange rate of CAD
$1.0242. In addition, the Company's significant U.S. dollar purchases
of raw materials and outside services provide a partial offset in its
U.S. dollar exposure.
The following summary of financial data presents General Donlee's
consolidated results of operations for the three-and nine month periods
ended September 30, 2011, including comparative results for the same
periods in 2010.
($ millions, except Share/Unit and
per Share/Unit amounts, unaudited)
Three Months Ended
Nine Months Ended
Basic income per share/Unit(a)
(a) Based on weighted average of 10,664,634 shares/Units outstanding.
General Donlee delivered sales of $37.1 million in the first nine months
of 2011 - an increase of $6.7 million, or 22%, over its sales in the
same period in 2010. Sales in the Company's aerospace and power
generation products division during the first nine month period ended
September 30, 2011 were $23.2 million - up by 27%, or $5.0 million,
over the comparable period in 2010. General Donlee's industrial
products division's sales during the same period were $13.9 million, an
increase of $1.7 million or 14% over the same period last year.
The Company's net income during the nine months ended September 30, 2011
was $2.9 million, compared to net income of $1.5 million during the
same period in the previous year. This increase in profitability
Stronger gross profit levels resulting from improved sales, net of the
negative impact of a rising Canadian dollar
An accounting gain of $0.7 million on pension curtailment.
The continuing growth in General Donlee's sales volumes during the first
nine months of 2011 reflects increasing demand within the industries
the Company serves, and General Donlee's ability to remain a supplier
of choice for many customers thanks to the expertise of its employees,
its continuous improvements in operational effectiveness, and a
commitment to invest in production capacity. "We are seeing an overall
increase in business activity. In addition to benefiting from robust
fundamentals tied to growing global demand for aerospace products, we
are noting strong traction with customers in the oil and gas and
industrial products sectors," said Interim Chief Executive Officer and
Chief Financial Officer, Garen Mikirditsian.
The Company's strong operating performance is also a result of its focus
on continuously improving its operations, and an emphasis on achieving
increasing integration between its two operating divisions. "Through
further integration, we are able to optimize capacity utilization,
share best practices and serve our customers better, " said Mr.
Mikirditsian. "Furthermore, increased sharing of resources allows us to
achieve cost synergies which result in improved profitability for our
business," added Mr. Mikirditsian.
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 November 7, 2011 the Corporation will file its interim Consolidated
Financial Statements (including the notes thereto) and Management's
Discussion and Analysis for the third quarter ended September 30, 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.
SOURCE General Donlee Canada Inc.
For further information:
Interim Chief Executive Officer
Chief Financial Officer
Telephone: (416) 743-4417
Web site: www.generaldonlee.com