(All amounts are stated in thousands of Canadian dollars, except
per share amounts.)
Brampton Brick Limited (TSX:BBL.A) today reported net income of
$2,215, or $0.20 per Class A Subordinate Voting share ("Class A
share") and Class B Multiple Voting Share ("Class B share"), for
the third quarter ended September 30, 2012 compared to a loss of
$5,074, or $0.46 per share, for the third quarter in 2011. The
aggregate weighted average number of Class A shares and Class B
shares outstanding for the third quarter in 2012 was 10,937,380 and
10,936,554 for the same period in 2011.
DISCUSSION OF OPERATIONS
Three months ended September 30, 2012
For the quarter ended September 30, 2012, revenues were $27,270
compared to $26,307 in 2011. The increase of $963 was primarily due
to higher shipments in the Masonry Products business segment.
Cost of sales during the current quarter declined slightly to
$19,813, from $20,597 in 2011. Higher levels of plant capacity
utilization reduced the average production cost per unit, as fixed
plant overhead is apportioned over a larger number of production
units. In the third quarter, clay brick shipments declined compared
to the third quarter of 2011. In the first half of 2012, commercial
and residential construction projects commenced earlier due to
favourable weather conditions. This decline was offset, in part, by
increases in sales volumes of concrete products.
Yard and delivery expenses during the current quarter also
declined compared to 2011 due to operating efficiencies realized
from the consolidation of distribution facilities.
Selling and general and administrative expenses during the
current quarter in 2012 were comparable to the third quarter of
2011.
The impairment loss recognized on the loan receivable is
discussed below under the caption 'Universal Resource Recovery
Inc.'
Overall, the revenue increase combined with lower product
manufacturing costs in the third quarter contributed to an increase
in operating income of $1,366, or 52%, from $2,610 in 2011 to
$3,976 in 2012.
Finance costs of $887 for the third quarter of 2012 declined by
$496 from the comparable period in 2011. During the quarter ended
September 30, 2012, the decrease in interest expense was
attributable to lower debt balances outstanding on the Company's
term loans and a payment of $500 to redeem part of the subordinated
secured debentures. As well, the settlement of the interest rate
swap contract on October 3, 2011, resulted in the elimination of
the interest rate differential payments.
The Company's share of loss from its joint venture investment is
discussed below under the caption 'Universal Resource Recovery
Inc.'
The provision for income taxes of $876 and $466 for the third
quarter of 2012 and 2011 respectively, relates solely to the
pre-tax income of the Company's Canadian operations. The Company
did not record a deferred tax asset with respect to the potential
future income tax benefit pertaining to the losses incurred by its
U.S. operations.
Nine months ended September 30, 2012
For the nine months ended September 30, 2012, the Company
recorded net income of $3,193, or $0.29 per share, compared to a
net loss of $10,039, or $0.92 loss per share, for the same period
in 2011. The aggregate weighted average number of Class A shares
and Class B shares outstanding for the nine month period in 2012
was 10,936,831 and 10,936,554 for the same period in 2011.
Revenues for the period ended September 30, 2012 totaled
$74,319, an increase of $13,901 from the same period in 2011.
Significantly higher sales volumes of masonry products and
landscape products, due in part to favourable weather conditions in
the first part of this year, together with the continued growth in
sales of concrete masonry products, including concrete block,
contributed to the increase in revenues.
Cost of sales for the nine months increased by 13% from 2011,
compared to a corresponding 23% increase in revenues for the same
period. The improvement in gross margin was due to increased
production volumes of both masonry and landscape products in 2012
and a number of initiatives undertaken to improve operating
efficiencies. Due to the relatively high fixed cost nature of the
Company's manufacturing facilities, large fluctuations in
production levels have a material impact on per unit manufacturing
costs and consequently gross margins.
Selling expenses for the nine months decreased by $98 in 2012
from the comparative period in 2011. These expenses were higher in
2011 due to increased advertising and marketing expenditures
incurred to support the introduction of a number of new products
and to upgrade the Company's service level capabilities.
General and administrative expenses increased by $112 from the
prior year due to non-recurring employment related expenses and an
accrual for year-end employee bonuses.
The impairment loss recognized on the loan receivable is
discussed below under the caption 'Universal Resource Recovery
Inc.'
Operating income of $7,803 reflected the improvement in both
revenues and contribution margins for the nine month period ended
September 30, 2012. For the comparable period in 2011, operating
income was only $891.
Finance costs for the nine month period in 2012 decreased by
$813 for the same reasons noted under the discussion for the three
months ended September 30, 2012.
The Company's share of loss from its joint venture investment is
discussed below under the caption 'Universal Resource Recovery
Inc.'
As noted under the discussion for the three months ended
September 30, 2012, the Company records a recovery of, or a tax
provision for, income taxes with respect to its Canadian operations
only. In 2011, a current income tax recovery of $126 was recorded
to recognize non-capital losses pertaining to the Company's
Canadian operations which were carried back to prior taxation
years. The Company has not recorded a deferred tax asset with
respect to the potential future income tax benefit pertaining to
the losses incurred by its U.S. operations.
On June 20, 2012, Ontario's budget bill 114, approving the
provincial general corporate income tax rate freeze at 11.5%, was
substantively enacted. Previously enacted corporate income tax rate
reductions for 2012 and 2013 to 11.0% and 10.0%, respectively, were
repealed. However, there was no change to the current 10% income
tax rate on income from manufacturing and processing. Consequently,
for the Company's Canadian operations, the combined federal (15%)
and provincial (10%) current and deferred income tax rate remains
at 25%.
A more detailed discussion with respect to each operating
business segment follows:
MASONRY PRODUCTS
For the three month period ended September 30, 2012, the Masonry
Products business segment reported operating income of $3,207 on
revenues of $18,581 compared to $1,165 on revenues of $17,794 for
the same period in 2011.
During the third quarter of 2012, increases in sales volumes of
concrete masonry products contributed to the increase in overall
segment revenues. The strong growth in clay brick shipments in the
first half of the year levelled off during the third quarter of
2012. Greater product acceptance due to various marketing and
product promotion initiatives in 2011, translated into higher sales
volumes of masonry concrete products, including concrete block.
For the nine month period ended September 30, 2012, this
business segment recorded an operating income of $7,100 compared to
$728 in 2011. Revenues for the nine month period increased to
$54,009 from $43,014, representing a 26% increase over 2011.
For the nine month period in 2012, brick shipments into the
Canadian market were higher than last year due in part to
favourable weather conditions in both the first and second quarters
of this year. In the U.S. market, brick shipments have increased
over 2011 levels, although this market continues to be impacted by
a historically low level of residential construction activity. In
addition, the sale of new products, including concrete block, which
was introduced into the Ontario market in April 2011, generated
incremental revenues during the nine month period in 2012. The
associated increase in production volumes positively affected gross
margin and overall operating income for the period.
LANDSCAPE PRODUCTS
For the three month period ended September 30, 2012, the
Landscape Products business segment reported operating income of
$1,029 on revenues of $8,689 compared to $1,445 on revenues of
$8,513 for the same period in 2011. The decrease in operating
income is attributable to an increase in plant repair and
maintenance expenses and a write-down of certain merchandise
inventory.
For the nine month period ended September 30, 2012, this
business segment recorded operating income of $1,325 compared to
$163 in 2011. Revenues for the nine month period increased to
$20,310 from $17,404, or by 17%, over 2011.
The higher sales volume through the first nine months of the
year was due to a number of factors. Favourable weather conditions
led to an early start to the selling season. The Company benefitted
from an improvement in market share, due in part to the
introduction of an expanded product portfolio. As well, in 2012,
there has been a greater emphasis on sales of higher margin
products.
UNIVERSAL RESOURCE RECOVERY INC. ("UNIVERSAL")
Universal is a joint venture which is accounted for by the
Company using the equity method of accounting. The carrying value
of the investment in Universal on the consolidated balance sheet is
increased by advances from the Company and is increased or
decreased by the Company's share of profit or loss of Universal. If
the Company's share of losses equals or exceeds the carrying value
of the investment in Universal, the Company does not recognize
further losses, unless it had incurred legal or constructive
obligations or made payments on behalf of Universal, of which there
were none as at December 31, 2011 and as at September 30, 2012.
Universal suspended its commercial operations in June 2011. As
at December 31, 2011, the carrying value of the investment in
Universal on the Company's consolidated balance sheet was reduced
to zero due to losses incurred from Universal's operations.
Consequently, losses totaling $1,791, which exceeded the carrying
value of the Universal investment as at December 31, 2011, were not
recognized by the Company.
For the third quarter of 2012, Universal continued to incur
certain fixed costs, including interest on debt and facility
occupancy costs amounting to $215. This increased the total of the
unrecognized losses for the nine month period in 2012 to $574. The
Company's total share of cumulative unrecognized losses increased
to $2,365 as at September 30, 2012.
For the third quarter of 2011, the Company's share of loss from
Universal totaled $5,840. This loss comprised of an operational
loss of $537 and an impairment charge of $5,303, increasing the
share of loss from the Company's investment in Universal for the
nine months ended September 30, 2011 to $7,347.
The following table summarizes changes in the Company's carrying
value of its investment in Universal, as well as cumulative
unrecognized losses for the periods shown below:
----------------------------------------------------------------------------
----------------------------------------------------------------------------
2011 2012
----------------------------------------------------------------------------
January 1 July 1 to October 1 to January 1 July 1 to
to June 30 September 30 December 31 to June 30 September 30
----------------------------------------------------------------------------
Company's investment in Universal
----------------------------------------------------------------------------
Opening
balance $ 5,562 $ 5,930 $ 940 $ - $ -
----------------------------------------------------------------------------
Share of
loss (1,507) (5,840) (1,510(i)) - -
----------------------------------------------------------------------------
Shareholder
advances 1,875 850 570 - -
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Ending
balance $ 5,930 $ 940 $ - $ - $ -
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Cumulative unrecognized losses in Universal
----------------------------------------------------------------------------
Opening
balance $ - $ - $ - $(1,791) $(2,150)
----------------------------------------------------------------------------
For the
period - - (1,791) (359) (215)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Ending
balance $ - $ - $(1,791) $(2,150) $(2,365)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
(i) As at December 31, 2011, the Company's share of loss was limited to
$1,510, as the investment in Universal was reduced to zero.
Effective January 1, 2012, management of Universal committed to
an active program to locate a buyer for the sale of assets held in
Universal. Although it is expected that the sale will be recognized
within one year from the date of classification of assets as 'held
for sale', events beyond management's control may cause a delay in
the sale of these assets. Management remains committed to its plan
to sell the assets in Universal.
For the three months ended September 30, 2012, advances from the
Company to Universal relating to the short-term loan receivable
amounted to $705, increasing the total advanced to $2,045 for the
nine month period ended September 30, 2012. These advances were
classified as a short-term loan receivable as management believes
the Company will be repaid from the sale proceeds of Universal's
assets following the settlement of Universal's senior ranking
claims. In relation to this short-term loan receivable, the Company
has registered, as security, a mortgage on Universal's property
located in Welland, Ontario, behind the bank's security. This
short-term loan receivable was used by Universal primarily to fund
its scheduled bank debt repayments, which amounted to $1,326 for
the nine months ended September 30, 2012, as well as for debt
financing expenses and certain fixed facility occupancy costs.
Universal's continuing financial difficulties indicated a
potential impairment of the Company's short-term loan receivable.
Due to increasing liquidity requirements in Universal as at
September 30, 2012, an impairment analysis was performed to
ascertain the fair value of this loan. An assessment of the present
value of estimated future cash flows concluded that the carrying
value exceeded its net recoverable value. Accordingly, for the
three month period in 2012, an impairment loss of $260 was recorded
by the Company. This increased the total impairment loss to $622
for the nine month period in 2012. This loss reduced the Company's
short-term loan receivable to its fair value of $1,423 as at
September 30, 2012.
The Company will continue to fund its share of Universal's cash
requirements until proceeds from the sale of Universal's assets are
realized.
CASH FLOWS
Cash flow provided by operating activities for the period ended
September 30, 2012 increased significantly to $12,781 compared to
$3,186 in 2011. The increase in cash flow provided by operations
was primarily due to the improvement in the operating results in
2012.
Cash utilized for purchases of property, plant and equipment
totaled $2,220 for the nine month period in 2012, compared to
$2,484 in 2011.
During the second quarter of 2012, sale proceeds relating
primarily to the sale of certain obsolete production equipment,
which was no longer supported by the Company's operational
processes, totaled $461.
Advances to Universal relating to the short-term loan receivable
for the nine months ended September 30, 2012, amounted to $2,045.
Further discussion is contained above under the caption 'Universal
Resource Recovery Inc.'
Cash advances to Universal for the nine month period ended
September 30, 2011 totaled $2,725. These advances increased the
carrying value of the investment in Universal, as they were
utilized by Universal to finance its operational activities and
capital expenditures incurred during the start-up period of its
waste composting facility located in Welland, Ontario.
On February 26, 2010, the Company completed a subordinated
secured debenture financing in the amount of $9,000 at an effective
interest rate of 11.89%. A payment of $500 was made to a debenture
holder in August 2012, representing a partial redemption of the
subordinated secured debentures.
The balance of the subordinated secured debentures in the
principal amount of $8,500, were redeemed on October 11, 2012. A 2%
early redemption fee on the principal amount was also paid to
debenture holders, as the debentures were to have matured in
February 2013. The payment of both the principal and early
redemption fee was funded from the Company's operating credit
facility, bearing interest at prevailing bankers acceptance rates,
plus a credit spread of 2.00%. Utilization of the Company's
operating line of credit to redeem the debentures is expected to
achieve significant savings in interest costs because of the
reduction in comparable interest rates.
FINANCIAL CONDITION
The Company's Masonry Products and Landscape Products business
segments are seasonal in nature. The Landscape Products business is
affected by seasonality to a greater degree than the Masonry
Products business. As a result of this seasonality, operating
results are impacted accordingly and cash requirements are
generally expected to increase through the first half of the year
and decline through the second half of the year.
As at September 30, 2012, bank operating advances were $1,500.
This represented a decrease of $3,647 from the amount outstanding
at December 31, 2011. The repayment of bank operating advances was
funded by cash flows from operations during the nine month period.
Trade payables totaled $11,911 at September 30, 2012 compared to
$9,026 at December 31, 2011.
The ratio of total liabilities to shareholders' equity
attributable to owners of the parent was 0.50:1 at September 30,
2012 compared to 0.51:1 at December 31, 2011. The decrease in this
ratio from December 2011 to September 2012 was primarily due to
improved operating results, offset in part by the increase in
foreign exchange losses due to the strengthening of the Canadian
dollar on translation of the financial statements of the Company's
U.S. subsidiaries.
As at September 30, 2012, working capital was $8,759,
representing a working capital ratio of 1.30:1. Comparable figures
for working capital and the working capital ratio at December 31,
2011 were $13,137 and 1.65:1, respectively. The decline from
December 31, 2011 is due to the inclusion in current liabilities of
the subordinated debentures amounting to $8,451 which were redeemed
and paid to debenture holders in October 2012. Excluding the
subordinated debentures from current liabilities, the working
capital ratio would be 1.81:1. During the month of August 2012, a
portion of the subordinated debentures outstanding in the amount of
$500 was paid. Cash and cash equivalents totaled $1,247 at
September 30, 2012 compared with $1,180 at December 31, 2011.
On October 4, 2011, the Company concluded arrangements from a
Canadian bank to provide its operating credit requirements. The new
facility provides for borrowings up to $20,000 based on margin
formulae for trade receivables and inventories, less priority
claims and the mark-to-market exposure on swap contracts, if
applicable. It is a demand facility secured primarily by trade
receivables and inventories of the Company's Masonry Products and
Landscape Products business segments in Canada and the U.S. The
agreement also contains certain financial covenants.
On September 7, 2012, the Company issued bankers acceptance
notes amounting to $1,500 under its operating credit facility.
These notes have a 30-day term and are renewed upon maturity, as
required. The rate of interest on the bankers acceptance notes as
at September 30, 2012 is based on prevailing bankers acceptance
rates plus a credit spread of 2.00%.
As at September 30, 2012, the borrowing limit was $19,066 and
the utilization was $1,744, including $1,500 representing bankers
acceptance notes and $244 representing outstanding letters of
credit.
The Company expects that future cash flows from operations, cash
and cash equivalents on hand and the unutilized balance of its
operating credit facility will be sufficient to satisfy its
obligations as they become due.
The Company was in compliance with all financial covenants with
respect to its financial arrangements as at September 30, 2012 and
anticipates that it will maintain compliance throughout the
year.
FORWARD-LOOKING STATEMENTS
Certain statements contained herein constitute 'forward-looking
statements'. All statements that are not historical facts are
forward-looking statements, including, among others, statements
regarding the expected repayment of the short-term loan receivable
from Universal, forecasts of sufficient cash flows from operations
and other sources of financing, anticipated compliance with
financial covenants under debt agreements, anticipated sales of
masonry and landscape products, and other statements regarding
future plans, objectives, results, business outlook and financial
performance. There can be no assurance that such forward-looking
statements will prove to be accurate.
Such forward-looking statements are based on information
currently available to management, and are based on assumptions and
analyses made by management in light of its experience and its
perception of historical trends, current conditions and expected
future developments, including, among others, assumptions regarding
pricing, weather and seasonal expectations, production efficiency,
and there being no significant disruptions affecting operations or
other material adverse changes.
Such forward-looking statements also involve known and unknown
risks, uncertainties and other factors which may cause actual
results, performance or achievements of the Company to be
materially different from future results, performance or
achievements expressed or implied by such forward-looking
statements. Such risks and uncertainties include, among others:
changes in economic conditions, including the demand for the
Company's primary products and the level of new home, commercial
and other construction; large fluctuations in production levels;
fluctuations in energy prices and other production costs; changes
in transportation costs; foreign currency exchange and interest
rate fluctuations; legislative and regulatory developments; as well
as those assumptions, risks, uncertainties and other factors
identified and discussed under 'Risks and Uncertainties' in the
2011 annual MD&A included in the Company's 2011 Annual Report
and those identified and reported in the Company's other public
filings (including the Annual Information Form for the year ended
December 31, 2011), which may be accessed at www.sedar.com.
The forward-looking information contained herein is made as of
the date hereof. Other than as specifically required by law, the
Company undertakes no obligation to update or revise any
forward-looking information, whether as a result of new
information, future events or otherwise. Readers are cautioned not
to place undue reliance on forward-looking statements.
Brampton Brick is Canada's second largest manufacturer of clay
brick, serving markets in Ontario, Quebec and the Northeast and
Midwestern United States from its brick manufacturing plants
located in Brampton, Ontario and near Terre Haute, Indiana. To
complement the clay brick product line, the Company also
manufactures a range of concrete masonry products, including stone
veneer products marketed under the Stoneworks(TM) trade name and
concrete brick and block. Concrete interlocking paving stones,
retaining walls, garden walls and enviro products are manufactured
in Markham, Milton and Brampton, Ontario and Wixom, Michigan. These
products are sold to markets in Ontario, Quebec, Michigan, New
York, Pennsylvania, Ohio, Kentucky, Illinois and Indiana under the
Oaks(TM) trade name. Products are used for residential construction
and for industrial, commercial, and institutional building
projects. The Company also holds a 50% joint-venture interest in
Universal Resource Recovery Inc., a waste composting facility
located in Welland, Ontario, which is currently not operating.
Selected Financial Information
(unaudited) (in thousands of Canadian dollars)
----------------------------------------------------------------------------
CONDENSED INTERIM CONSOLIDATED BALANCE September 30 December 31
SHEET 2012 2011
----------------------------------------------------------------------------
----------------------------------------------------------------------------
ASSETS
Current assets
Cash and cash equivalents $ 1,247 $ 1,180
Trade and other receivables 13,420 9,964
Inventories 21,142 20,805
Income taxes recoverable 274 744
Loan receivable 1,423 -
Other assets 890 597
---------------- ----------------
38,396 33,290
Non-current assets
Property, plant and equipment 168,319 172,629
---------------- ----------------
Total assets $ 206,715 $ 205,919
---------------- ----------------
---------------- ----------------
LIABILITIES
Current liabilities
Bank operating advances $ 1,500 $ 5,147
Trade payables 11,911 9,026
Income taxes payable 2,379 829
Current portion of debt 11,447 3,091
Decommissioning provisions 78 50
Other liabilities 2,322 2,010
---------------- ----------------
29,637 20,153
---------------- ----------------
---------------- ----------------
Non-current liabilities
Non-current portion of debt 24,542 35,166
Decommissioning provisions 954 950
Deferred income tax liabilities 13,422 13,163
---------------- ----------------
Total liabilities $ 68,555 $ 69,432
---------------- ----------------
---------------- ----------------
EQUITY
Equity attributable to owners of the
parent
Share capital $ 33,711 $ 33,689
Contributed surplus 1,894 1,801
Accumulated other comprehensive loss (3,175) (1,540)
Retained earnings 105,719 102,527
---------------- ----------------
$ 138,149 $ 136,477
---------------- ----------------
---------------- ----------------
Non-controlling interests 11 10
---------------- --------------
Total equity $ 138,160 $ 136,487
---------------- ----------------
---------------- ----------------
Total liabilities and equity $ 206,715 $ 205,919
---------------- ----------------
---------------- ----------------
----------------------------------------------------------------------------
(unaudited) (in thousands of Canadian dollars, except per share amounts)
----------------------------------------------------------------------------
CONDENSED INTERIM
CONSOLIDATED
STATEMENT OF
COMPREHENSIVE INCOME Three months ended Nine months ended
(LOSS) September 30 September 30
2012 2011 2012 2011
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Revenues $ 27,270 $ 26,307 $ 74,319 $ 60,418
Cost of sales 19,813 20,597 55,943 49,611
Selling expenses 1,660 1,545 5,188 5,286
General and
administrative
expenses 1,592 1,581 4,750 4,638
Loss (gain) on sale
of property, plant
and equipment 1 (62) 56 (63)
Other (income)
expense (32) 36 (43) 55
Impairment loss on
loan receivable 260 - 622 -
------------- ------------- ------------- -------------
23,294 23,697 66,516 59,527
Operating income 3,976 2,610 7,803 891
Finance (expense)
income
Finance costs (887) (1,383) (2,780) (3,593)
Finance income 2 5 6 23
------------- ------------- ------------- -------------
(885) (1,378) (2,774) (3,570)
------------- ------------- ------------- -------------
Share of loss from
investment in
Universal Resource
Recovery Inc. - (5,840) - (7,347)
------------- ------------- ------------- -------------
Income (loss) before
income taxes 3,091 (4,608) 5,029 (10,026)
(Provision for)
recovery of income
taxes
Current (917) (570) (1,575) 126
Deferred 41 104 (261) (139)
------------- ------------- ------------- -------------
(876) (466) (1,836) (13)
------------- ------------- ------------- -------------
Net income (loss) for
the period $ 2,215 $ (5,074) $ 3,193 $ (10,039)
------------- ------------- ------------- -------------
------------- ------------- ------------- -------------
Net income (loss)
attributable to:
Owners of the parent $ 2,215 $ (5,074) $ 3,192 $ (10,041)
Non-controlling
interests - - 1 2
------------- ------------- ------------- -------------
Net income (loss) for
the period $ 2,215 $ (5,074) $ 3,193 $ (10,039)
------------- ------------- ------------- -------------
------------- ------------- ------------- -------------
Other comprehensive
income (loss)
Foreign currency
translation $ (1,677) $ 4,172 $ (1,635) $ 2,632
------------- ------------- ------------- -------------
Total comprehensive
income (loss) for
the period $ 538 $ (902) $ 1,558 $ (7,407)
------------- ------------- ------------- -------------
------------- ------------- ------------- -------------
Total comprehensive
income (loss)
attributable to:
Owners of the parent $ 538 $ (902) $ 1,557 $ (7,409)
Non-controlling
interests - - 1 2
------------- ------------- ------------- -------------
Total comprehensive
income (loss) for
the period $ 538 $ (902) $ 1,558 $ (7,407)
------------- ------------- ------------- -------------
------------- ------------- ------------- -------------
Net income (loss) per
Class A and Class B
share $ 0.20 $ (0.46) $ 0.29 $ (0.92)
Weighted average
Class A and Class
Bshares outstanding
(000's) 10,937 10,937 10,937 10,937
------------- ------------- ------------- -------------
----------------------------------------------------------------------------
(unaudited) (in thousands of Canadian dollars)
----------------------------------------------------------------------------
Nine months ended
September 30
CONDENSED INTERIM CONSOLIDATED STATEMENT OF CASH
FLOWS 2012 2011
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Cash provided by (used for)
Operating activities
Net income (loss) for the period $ 3,193 $ (10,039)
Items not affecting cash and cash equivalents
Depreciation 5,234 5,040
Current income taxes 1,575 (126)
Deferred income taxes 261 139
Loss (gain) on sale of property, plant and
equipment 56 (63)
Unrealized foreign currency exchange loss
(gain) 13 (67)
Impairment loss on loan receivable 622 -
Loss on derivative financial instrument - 27
Net interest expense 2,774 3,548
Share of loss in investment in Universal
Resource Recovery Inc. - 7,347
Other 96 115
----------- ------------
13,824 5,921
Changes in non-cash items
Trade and other receivables (3,486) (6,984)
Inventories (530) 3,148
Other assets (300) (397)
Trade payables 2,516 78
Income tax credits applied 449 11
Other liabilities 351 1,468
----------- ------------
(1,000) (2,676)
Income tax payments (3) -
Payments for decommissioning of assets (40) (59)
----------- ------------
Cash provided by operating activities 12,781 3,186
----------- ------------
Investing activities
Purchase of property, plant and equipment (2,220) (2,484)
Loan receivable (2,045) -
Advances to Universal Resource Recovery Inc. - (2,725)
Proceeds from sale of property, plant and
equipment 509 63
----------- ------------
Cash used for investment activities (3,756) (5,146)
----------- ------------
Financing activities
Decrease (increase) in bank operating advances (3,647) 4,558
Payment of term loans (1,759) (1,730)
Payment of subordinated secured debentures (500) -
Interest paid (2,567) (3,300)
Payments on obligations under finance leases (415) (316)
Payment of dividends by subsidiary to non-
controlling interests (75) -
Proceeds from exercise of stock options 19 -
----------- ------------
Cash used for financing activities (8,944) (788)
----------- ------------
Foreign exchange on cash held in foreign currency (14) 19
Increase (decrease) in cash and cash equivalents 67 (2,729)
Cash and cash equivalents at the beginning of the
period 1,180 5,383
----------- ------------
Cash and cash equivalents at the end of the period $ 1,247 $ 2,654
----------- ------------
----------- ------------
----------------------------------------------------------------------------
(unaudited) (in thousands of Canadian dollars)
CONDENSED INTERIM CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Attributable to owners of the parent
----------------------------------------------------
Accumulated
Other
Share Contributed Comprehensive
Capital Surplus Income (loss)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Balance - January 1,
2011 $ 33,689 $ 1,658 $ (2,616)
(Loss) income for the
period - - -
Other comprehensive
income (net of taxes,
$nil) - - 2,632
----------------------------------------------------
Comprehensive income
(loss) for the period - - 2,632
----------------------------------------------------
Share-based
compensation - 115 -
----------------------------------------------------
Balance - September 30,
2011 $ 33,689 $ 1,773 $ 16
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Attributable to owners
of the parent
----------------------------------------------------
Non-
Retained controlling Total
Earnings Total interests Equity
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Balance - January 1,
2011 $ 112,506 $ 145,237 $ 112 145,349
(Loss) income for the
period (10,041) (10,041) 2 (10,039)
Other comprehensive
income (net of taxes,
$nil) - 2,632 - 2,632
----------------------------------------------------
Comprehensive income
(loss) for the period (10,041) (7,409) 2 (7,407)
----------------------------------------------------
Share-based
compensation - 115 - 115
----------------------------------------------------
Balance - September 30,
2011 $ 102,465 $ 137,943 $ 114 $ 138,057
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----------------------------------------------------------------------------
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Attributable to owners of the parent
-----------------------------------------------------
Accumulated
Other
Share Contributed Comprehensive
Capital Surplus Income (loss)
-----------------------------------------------------
-----------------------------------------------------
Balance - January 1,
2012 $ 33,689 $ 1,801 $ (1,540)
Net income for the
period - - -
Other comprehensive
loss (net of taxes,
$nil) - - (1,635)
-----------------------------------------------------
Comprehensive (loss)
income for the period - - (1,635)
-----------------------------------------------------
Issue of Class A
Subordinate Voting
Shares under the
Employee Stock Option
Incentive Plan 19 - -
-----------------------------------------------------
Transfer to share
capital on exercise of
stock options 3 (3) -
-----------------------------------------------------
Share-based
compensation - 96 -
----------------------------------------------------------------------------
Balance - September 30,
2012 $ 33,711 $ 1,894 $ (3,175)
----------------------------------------------------------------------------
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Attributable to owners
of the parent
-----------------------------------------------------
Non-
Retained controlling Total
Earnings Total interests Equity
-----------------------------------------------------
-----------------------------------------------------
Balance - January 1,
2012 $ 102,527 $ 136,477 $ 10 136,487
Net income for the
period 3,192 3,192 1 3,193
Other comprehensive
loss (net of taxes,
$nil) - (1,635) - (1,635)
-----------------------------------------------------
Comprehensive (loss)
income for the period 3,192 1,557 1 1,558
-----------------------------------------------------
Issue of Class A
Subordinate Voting
Shares under the
Employee Stock Option
Incentive Plan - 19 - 19
-----------------------------------------------------
Transfer to share
capital on exercise of
stock options - - - -
-----------------------------------------------------
Share-based
compensation - 96 - 96
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Balance - September 30,
2012 $ 105,719 $ 138,149 $ 11 $ 138,160
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Contacts: Brampton Brick Limited Jeffrey G. Kerbel President and
Chief Executive Officer 905-840-1011 905-840-1535 (FAX) Brampton
Brick Limited Trevor M. Sandler Vice-President, Finance and Chief
Financial Officer 905-840-1011 905-840-1535
(FAX)investor.relations@bramptonbrick.com