WATERDOWN, ONTARIO--(Marketwired - March 1, 2016) - Opta Minerals Inc. (TSX:OPM) today announced results for the three and twelve months ended December 31, 2015. All figures are reported in U.S. dollars and are in accordance with International Financial Reporting Standards (IFRS), except where otherwise noted.
3 months | 3 months | 12 months | 12 months | |||||||||||
ended | ended | ended | ended | |||||||||||
Dec 31, | Dec 31, | Increase | Dec 31, | Dec 31, | Increase | |||||||||
2015 | 2014 | (Decrease) | % | 2015 | 2014 | (Decrease) | % | |||||||
Revenue | $ | 25,890 | $ | 34,189 | $ | (8,299) | -24.3% | $ | 113,805 | $ | 139,856 | $ | (26,051) | -18.6% |
Gross Profit | 2,346 | 4,234 | (1,888) | -44.6% | 14,076 | 20,917 | (6,841) | -32.7% | ||||||
9.1% | 12.4% | -3.3% | 12.4% | 15.0% | -2.5% | |||||||||
EBITDA1 | 555 | 1,342 | (787) | -58.6% | 5,161 | 9,005 | (3,844) | -42.7% | ||||||
EBIT2 | (17,473) | (4,109) | (13,364) | 325.2% | (17,117) | (1,346) | (15,771) | 1171.7% | ||||||
Loss | (17,553) | (2,874) | (14,679) | 510.8% | (21,895) | (1,882) | (20,013) | 1063.4% | ||||||
EPS | $ | (0.97) | $ | (0.15) | $ | (0.82) | $ | (1.21) | $ | (0.10) | $ | (1.11) |
1 EBITDA is a non-IFRS measure: refer to Footnotes |
2 EBIT is a non-IFRS measure; refer to Footnotes |
On February 12, 2016, the Company announced that it had entered into a definitive acquisition agreement (the "Acquisition Agreement") with Speyside Equity Fund I LP ("Speyside") pursuant to which a subsidiary of Speyside will acquire all of the issued and outstanding common shares of Opta (the "Acquisition"). The Acquisition Agreement was entered into following an extensive review and examination of potential strategic alternatives by the board of directors and management of Opta. Further information regarding the Acquisition will be contained in the management information circular to be prepared by Opta and mailed to its shareholders for the purpose of obtaining requisite shareholder approval of the Acquisition.
The Company continues to restructure its business which includes closing unprofitable locations, reducing costs, simplifying operations and improving the balance sheet by reducing inventory thereby improving liquidity. The restructuring impact is isolated to the Industrial Minerals Group and Corporate office, with limited impact on the Steel and Magnesium Group. The financial results reflect the changes the Company made and include a number of one time and non-cash costs as a result of the restructuring. Further details are provided on these restructuring costs in Management's Discussion and Analysis to be filed with our annual consolidated financial statements available under the Company's profile on SEDAR at www.sedar.com.
Fourth quarter revenues were impacted by normal seasonality, depreciation of the Canadian dollar and Euro against the U.S. dollar and softer markets in the Company's business segments.
Earnings include a number of impairment charges related to goodwill and intangible assets of $14,977 and property plant and equipment of $2,366. These non-cash charges reflect the fact that the carrying value of these assets exceeds the estimated recoverable amount based on projected future cash flows within certain cash generating units in the Steel and Magnesium and Infrastructure segments.
Operational and Financial Highlights:
For further details, please refer to the Company's audited consolidated financial statements for the financial year ended December 31, 2015 and related Management's Discussion and Analysis available under the Company's profile on SEDAR at www.sedar.com.
Opta Minerals is a vertically integrated provider of custom process solutions and industrial mineral products used primarily in the steel, foundry, loose abrasive cleaning, water-jet cutting and municipal water filtration industries. The Company has production and / or distribution facilities in Ontario, Quebec, Saskatchewan, Louisiana, South Carolina, Virginia, Maryland, Indiana, Michigan, New York, Texas, Ohio, Idaho, France, Slovakia and Germany.
FOOTNOTES:
Earnings before income taxes and interest ("EBIT"); and earnings before interest, income taxes, depreciation and amortization ("EBITDA") as defined below, are both non-IFRS earnings measures that do not have standardized measures prescribed by IFRS, and therefore may not be comparable to similar measures presented by other publicly traded companies.
For the three | For the twelve | |||||||
Months Ended | Months Ended | |||||||
Dec 31 | Dec 31 | |||||||
2015 | 2014 | 2015 | 2014 | |||||
$ | $ | $ | $ | |||||
Loss for the Period | (17,553 | ) | (2,874 | ) | (21,895 | ) | (1,882 | ) |
Finance Expense | 704 | 906 | 4,269 | 3,689 | ||||
Income Tax Expense (Recovery) | (624 | ) | (2,141 | ) | 509 | (3,153 | ) | |
Depreciation and Amortization | 1,210 | 1,503 | 5,014 | 6,002 | ||||
Goodwill and Intangible Asset Write-downs | 14,977 | 870 | 14,977 | 870 | ||||
Property, Plant and Equipment Write-downs | 1,871 | 2,990 | 2,366 | 3,170 | ||||
Fair Value Adjustments to Contingent Consideration | (30 | ) | 88 | (79 | ) | 309 | ||
EBITDA1 | 555 | 1,342 | 5,161 | 9,005 | ||||
Subtract: | ||||||||
Depreciation and Amortization | 1,210 | 1,503 | 5,014 | 6,002 | ||||
Goodwill and Intangible Asset Write-downs | 14,977 | 870 | 14,977 | 870 | ||||
Property, Plant and Equipment Write-downs | 1,871 | 2,990 | 2,366 | 3,170 | ||||
Fair Value Adjustments to Contingent Consideration | (30 | ) | 88 | (79 | ) | 309 | ||
EBIT2 | (17,473 | ) | (4,109 | ) | (17,117 | ) | (1,346 | ) |
Notes
Certain statements in this release constitute forward-looking statements within the meaning of applicable securities laws. Forward-looking statements in this press release include, without limitation, statements relating to: the Acquisition and its completion; the mailing of the management information circular in connection with the Acquisition; the continued restructuring of the Company's business and the Company continuing to explore opportunities to expand and diversify its business into new markets and products with higher growth opportunities. Wherever possible, words such as "may", 'would", "could", "should", "will", "anticipate", "believe", "plan", "expect", "intend", "estimate", "aim", "endeavour", "seek", "predict", "potential" and similar expressions have been used to identify these forward-looking statements. These statements reflect management's current beliefs with respect to future events and are based on information currently available to management of the Company. Forward-looking statements involve significant risks, uncertainties and assumptions. Many factors could cause the Company's actual results, performance or achievements to be materially different from any future results, performance or achievements that may be expressed or implied by such forward-looking statements, including, without limitation: risks associated with the Acquisition and acquisitions generally (such as the failure to satisfy closing conditions contained in the Acquisition Agreement, the absence of material adverse changes or other events which may give the parties a basis on which to terminate the Acquisition Agreement and the ability of the parties to complete and mail the information circular in respect of the meeting and hold the meeting within required time frames),
the impact of general economic conditions; the impact of specific industry conditions; the inability of the Company to successfully integrate acquired businesses or to achieve the anticipated benefits from such acquisitions; the risk of unexpected costs or liabilities relating to acquisitions; currency fluctuations and exchange rate risks; risks associated with foreign operations; governmental and environmental regulation; competition from other industry participants; cancellations of or the failure to renew purchase orders; production and delivery issues; quality, pricing and availability of raw materials; mining risks; and the other risks identified in the Company's Annual Information Form and other public filings (copies of which may be obtained under the Company's SEDAR profile at www.sedar.com). Should one or more of these risks or uncertainties materialize, or should assumptions underlying the forward-looking statements prove incorrect, actual results, performance or achievements may vary materially from those expressed or implied by this press release. These factors should be considered carefully and reader should not place undue reliance on the forward-looking statements. Although any forward-looking statements contained in this press release are based upon what management currently believes to be reasonable assumptions, the Company cannot assure readers that actual results, performance or achievements will be consistent with these forward-looking statements, and management's assumptions may prove to be incorrect. These forward-looking statements are made as of the date of this press release and, other than as required by law, the Company does not intend, and does not assume any obligation, to update or revise these forward-looking statements, whether as a result of new information, future events or otherwise.
Opta Minerals Inc. | ||||||||
Consolidated Balance Sheets | ||||||||
As at December 31, 2015 | ||||||||
(Unaudited) | ||||||||
Expressed in Thousands of US Dollars (except number of shares) | ||||||||
December 31, 2015 |
December 31, 2014 |
|||||||
Assets | ||||||||
Current | ||||||||
Cash and cash equivalents | $ | 1,694 | $ | 2,170 | ||||
Trade receivables, other receivables and prepayments | 16,259 | 20,236 | ||||||
Inventories | 25,819 | 34,486 | ||||||
Income taxes receivable | 147 | 996 | ||||||
43,919 | 57,888 | |||||||
Property, Plant and Equipment | 16,019 | 21,926 | ||||||
Intangible Assets | 13,104 | 26,827 | ||||||
Goodwill | 3,300 | 9,447 | ||||||
Deferred Income Tax Assets | - | 1,645 | ||||||
$ | 76,342 | $ | 117,733 | |||||
Liabilities | ||||||||
Current | ||||||||
Trade and other payables | $ | 10,088 | $ | 17,216 | ||||
Borrowings | 37,811 | 17,492 | ||||||
Derivative financial instruments | 298 | - | ||||||
Provisions | 912 | 772 | ||||||
Other liabilities | 181 | 492 | ||||||
Income taxes payable | 226 | 136 | ||||||
49,516 | 36,108 | |||||||
Borrowings | 140 | 30,103 | ||||||
Derivative Financial Instruments | - | 285 | ||||||
Provisions | 656 | 447 | ||||||
Other Liabilities | 13 | 242 | ||||||
Deferred Income Tax Liabilities | 1,113 | 3,040 | ||||||
51,438 | 70,225 | |||||||
Equity Attributable to the Shareholders of the Company | ||||||||
Capital Stock | ||||||||
Authorized without limit as to number | ||||||||
Preference shares (without par value) | ||||||||
Common shares | ||||||||
Issued - | ||||||||
18,129,566 common shares (December 31, 2014 - 18,125,164) | 17,911 | 17,905 | ||||||
Contributed Surplus | 4,857 | 4,696 | ||||||
Accumulated Other Comprehensive Loss | (2,367 | ) | (1,491 | ) | ||||
Retained Earnings | 4,503 | 26,398 | ||||||
24,904 | 47,508 | |||||||
$ | 76,342 | $ | 117,733 | |||||
Opta Minerals Inc. | |||||||
Consolidated Statements of Loss | |||||||
For the Years Ended December 31, 2015 and 2014 | |||||||
(Unaudited) | |||||||
Expressed in Thousands of US Dollars (except per share amounts) | |||||||
December 31, 2015 |
December 31, 2014 |
||||||
Revenue | $ | 113,805 | $ | 139,856 | |||
Cost of Goods Sold | 99,729 | 118,939 | |||||
Gross Profit | 14,076 | 20,917 | |||||
Expenses | |||||||
Selling, general and administrative | 14,589 | 16,676 | |||||
Goodwill and intangible asset write-downs | 14,977 | 870 | |||||
Property, plant and equipment write-downs | 2,366 | 3,170 | |||||
Fair value adjustments to contingent consideration | (79 | ) | 309 | ||||
Foreign exchange (gain) loss | (660 | ) | 1,238 | ||||
31,193 | 22,263 | ||||||
Loss Before Finance Expense and Income Taxes | (17,117 | ) | (1,346 | ) | |||
Finance expense | 4,269 | 3,689 | |||||
Loss Before Income Taxes | (21,386 | ) | (5,035 | ) | |||
Income tax expense (recovery) | 509 | (3,153 | ) | ||||
Loss for the Year Attributable to the Shareholders of the Company | $ | (21,895 | ) | $ | (1,882 | ) | |
Loss per share for the year - basic and diluted | $ | (1.21 | ) | $ | (0.10 | ) | |
Opta Minerals Inc. | |||||||
Consolidated Statements of Comprehensive Loss | |||||||
For the Years Ended December 31, 2015 and 2014 | |||||||
(Unaudited) | |||||||
Expressed in Thousands of US Dollars | |||||||
December 31, 2015 |
December 31, 2014 |
||||||
Loss for the Year Attributable to the Shareholders of the Company | $ | (21,895 | ) | $ | (1,882 | ) | |
Other Comprehensive Loss, net of income taxes | |||||||
Items that may be reclassified subsequently to profit or loss | |||||||
Unrealized loss on translation of foreign operations | (1,086 | ) | (649 | ) | |||
Unrealized (loss) gain on derivative financial instruments designated as cash flow hedges | (125 | ) | 20 | ||||
Ineffective portion of derivative financial instruments | 335 | - | |||||
Other comprehensive loss, net of income taxes | (876 | ) | (629 | ) | |||
Comprehensive Loss Attributable to the Shareholders of the Company | $ | (22,771 | ) | $ | (2,511 | ) | |
Opta Minerals Inc. | ||||||||||||||||||
Consolidated Statements of Changes in Equity | ||||||||||||||||||
For the Years Ended December 31, 2015 and 2014 | ||||||||||||||||||
(Unaudited) | ||||||||||||||||||
Expressed in Thousands of US Dollars (except per share amounts and number of shares) | ||||||||||||||||||
Number of Shares- Capital Stock |
Capital Stock |
Contributed Surplus- Share- based Payments |
AOCI*- Cash Flow Hedge |
AOCI*- Foreign Currency Translation Reserve |
Retained Earnings |
Total Equity |
||||||||||||
At January 1, 2015 | 18,125,164 | $ | 17,905 | $ | 4,696 | $ | (210 | ) | $ | (1,281 | ) | $ | 26,398 | $ | 47,508 | |||
Comprehensive (Loss) Income | ||||||||||||||||||
Loss for the year | - | - | - | - | - | (21,895 | ) | (21,895 | ) | |||||||||
Unrealized loss on translation of foreign operations | - | - | - | - | (1,086 | ) | - | (1,086 | ) | |||||||||
Unrealized loss on derivative financial instruments designated as cash flow hedges | - | - | - | (125 | ) | - | - | (125 | ) | |||||||||
Ineffective portion of derivative financial instruments | - | - | - | 335 | - | - | 335 | |||||||||||
Total Comprehensive (Loss) Income | - | - | - | 210 | (1,086 | ) | (21,895 | ) | (22,771 | ) | ||||||||
Transactions with Shareholders | ||||||||||||||||||
Employee share purchase plan | 4,402 | 6 | - | - | - | - | 6 | |||||||||||
Share-based payment expense | - | - | 161 | - | - | - | 161 | |||||||||||
Total Transactions with Shareholders | 4,402 | 6 | 161 | - | - | - | 167 | |||||||||||
At December 31, 2015 | 18,129,566 | $ | 17,911 | $ | 4,857 | $ | - | $ | (2,367 | ) | $ | 4,503 | $ | 24,904 | ||||
At January 1, 2014 | 18,111,247 | $ | 17,882 | $ | 4,358 | $ | (230 | ) | $ | (632 | ) | $ | 28,280 | $ | 49,658 | |||
Comprehensive Income (Loss) | ||||||||||||||||||
Loss for the year | - | - | - | - | - | (1,882 | ) | (1,882 | ) | |||||||||
Unrealized loss on translation of foreign operations | - | - | - | - | (649 | ) | - | (649 | ) | |||||||||
Unrealized gain on derivative financial instruments designated as cash flow hedges | - | - | - | 20 | - | - | 20 | |||||||||||
Total Comprehensive (Loss) Income | - | - | - | 20 | (649 | ) | (1,882 | ) | (2,511 | ) | ||||||||
Transactions with Shareholders | ||||||||||||||||||
Employee share purchase plan | 13,917 | 23 | - | - | - | - | 23 | |||||||||||
Share-based payment expense | - | - | 338 | - | - | - | 338 | |||||||||||
Total Transactions with Shareholders | 13,917 | 23 | 338 | - | - | - | 361 | |||||||||||
At December 31, 2014 | 18,125,164 | $ | 17,905 | $ | 4,696 | $ | (210 | ) | $ | (1,281 | ) | $ | 26,398 | $ | 47,508 |
*AOCI - Accumulated Other Comprehensive Income (Loss) |
Opta Minerals Inc. | ||||||||
Consolidated Statements of Cash Flows | ||||||||
For the Years Ended December 31, 2015 and 2014 | ||||||||
(Unaudited) | ||||||||
Expressed in Thousands of US Dollars | ||||||||
December 31, 2015 |
December 31, 2014 |
|||||||
Cash Provided by (Used in) - | ||||||||
Operating Activities | ||||||||
Loss for the year | $ | (21,895 | ) | $ | (1,882 | ) | ||
Items not affecting cash: | ||||||||
Depreciation of property, plant and equipment | 3,027 | 3,784 | ||||||
Amortization of intangible assets | 1,987 | 2,218 | ||||||
Goodwill and intangible asset write-downs | 14,977 | 870 | ||||||
Property, plant and equipment write-downs | 2,366 | 3,170 | ||||||
Share-based payment expense | 161 | 338 | ||||||
Fair value adjustments to contingent consideration | (79 | ) | 309 | |||||
Non-cash interest charges | 842 | - | ||||||
Deferred income taxes | (143 | ) | (3,543 | ) | ||||
Loss (gain) on disposal of property, plant and equipment | (207 | ) | 104 | |||||
1,036 | 5,368 | |||||||
Changes in non-cash working capital | ||||||||
Trade receivables, other receivables and prepayments | 2,403 | (6,008 | ) | |||||
Inventories | 6,541 | 4,262 | ||||||
Trade and other payables | (6,230 | ) | 3,863 | |||||
Provisions | 383 | 622 | ||||||
Income taxes receivable (payable) | 943 | (325 | ) | |||||
5,076 | 7,782 | |||||||
Financing Activities | ||||||||
Proceeds from issuance of common shares - net of issuance costs | 6 | 23 | ||||||
Proceeds from borrowings | 550 | - | ||||||
Repayment of borrowings | (4,411 | ) | (6,759 | ) | ||||
Repayment of finance lease liabilities | (354 | ) | (330 | ) | ||||
(4,209 | ) | (7,066 | ) | |||||
Investing Activities | ||||||||
Additions to property, plant and equipment | (1,394 | ) | (2,272 | ) | ||||
Proceeds on disposal of property, plant and equipment | 594 | 133 | ||||||
Additional contingent consideration paid on acquisitions | (433 | ) | (260 | ) | ||||
Additions to intangible assets | (42 | ) | (86 | ) | ||||
(1,275 | ) | (2,485 | ) | |||||
Effect of Foreign Exchange Loss on Cash and Cash Equivalents | (68 | ) | (145 | ) | ||||
Net Decrease in Cash and Cash Equivalents | (476 | ) | (1,914 | ) | ||||
Cash and Cash Equivalents | ||||||||
Beginning of Period | 2,170 | 4,084 | ||||||
End of Period | $ | 1,694 | $ | 2,170 |
Opta Minerals Inc. | ||||||||||||
Segmented Information | ||||||||||||
For the Years Ended December 31, 2015 and 2014 | ||||||||||||
(Unaudited) | ||||||||||||
Expressed in Thousands of US Dollars | ||||||||||||
2015 | ||||||||||||
Steel and | Industrial | |||||||||||
Magnesium | Minerals | Corporate | Total | |||||||||
External revenue by market | ||||||||||||
Canada | $ | 11,931 | $ | 9,380 | $ | - | $ | 21,311 | ||||
US | 47,777 | 19,037 | - | 66,814 | ||||||||
Europe | 8,998 | 8,542 | - | 17,540 | ||||||||
Other | 373 | 7,767 | - | 8,140 | ||||||||
Total revenue from external customers | 69,079 | 44,726 | - | 113,805 | ||||||||
Segment income (loss) before corporate expenses, goodwill and intangible asset write-downs, property, plant and equipment write-downs, fair value adjustments to contingent consideration, finance expense and income taxes | 8,563 | (4,766 | ) | - | 3,797 | |||||||
Goodwill and intangible asset write-downs | (14,977 | ) | - | - | (14,977 | ) | ||||||
Property, plant and equipment write-downs | (1,205 | ) | (1,161 | ) | - | (2,366 | ) | |||||
Fair value adjustments to contingent consideration | 79 | - | - | 79 | ||||||||
Corporate expenses | - | - | (3,650 | ) | (3,650 | ) | ||||||
Segment loss before finance expense and income taxes | (7,540 | ) | (5,927 | ) | (3,650 | ) | (17,117 | ) | ||||
Finance expense | - | - | - | (4,269 | ) | |||||||
Income tax expense | - | - | - | (509 | ) | |||||||
Loss for the year | - | - | - | (21,895 | ) | |||||||
Total assets as at December 31, 2015 | 41,840 | 33,599 | 903 | 76,342 | ||||||||
Total liabilities as at December 31, 2015 | 8,619 | 1,666 | 41,153 | 51,438 | ||||||||
Depreciation of property, plant and equipment | 1,849 | 1,061 | 117 | 3,027 | ||||||||
Amortization of intangible assets | 1,914 | 4 | 69 | 1,987 | ||||||||
Goodwill and intangible assets as at December 31, 2015 | 16,341 | - | 63 | 16,404 | ||||||||
Expenditures on property, plant and equipment | $ | 745 | $ | 609 | $ | 40 | $ | 1,394 | ||||
Opta Minerals Inc. | ||||||||||||
Segmented Information | ||||||||||||
For the Years Ended December 31, 2015 and 2014 | ||||||||||||
(Unaudited) | ||||||||||||
Expressed in Thousands of US Dollars | ||||||||||||
2014 | ||||||||||||
Steel and | Industrial | |||||||||||
Magnesium | Minerals | Corporate | Total | |||||||||
External revenue by market | ||||||||||||
Canada | $ | 14,673 | $ | 10,716 | $ | - | $ | 25,389 | ||||
US | 53,881 | 27,282 | - | 81,163 | ||||||||
Europe | 12,779 | 11,438 | - | 24,217 | ||||||||
Other | 133 | 8,954 | - | 9,087 | ||||||||
Total revenue from external customers | 81,466 | 58,390 | - | 139,856 | ||||||||
Segment income (loss) before corporate expenses, goodwill and intangible asset write-downs, property, plant and equipment write-downs, fair value adjustments to contingent consideration, finance expense and income taxes | 11,565 | (2,220 | ) | - | 9,345 | |||||||
Goodwill and intangible asset write-downs | (265 | ) | (605 | ) | - | (870 | ) | |||||
Property, plant and equipment write-downs | (410 | ) | (2,760 | ) | - | (3,170 | ) | |||||
Fair value adjustments to contingent consideration | (309 | ) | - | - | (309 | ) | ||||||
Corporate expenses | - | - | (6,342 | ) | (6,342 | ) | ||||||
Segment income (loss) before finance expense and income taxes | 10,581 | (5,585 | ) | (6,342 | ) | (1,346 | ) | |||||
Finance expense | - | - | - | (3,689 | ) | |||||||
Income tax recovery | - | - | - | 3,153 | ||||||||
Loss for the year | - | - | - | (1,882 | ) | |||||||
Total assets as at December 31, 2014 | 66,013 | 47,319 | 4,401 | 117,733 | ||||||||
Total liabilities as at December 31, 2014 | 18,298 | 6,940 | 44,987 | 70,225 | ||||||||
Depreciation of property, plant and equipment | 1,878 | 1,746 | 160 | 3,784 | ||||||||
Amortization of intangible assets | 2,132 | 2 | 84 | 2,218 | ||||||||
Goodwill and intangible assets as at December 31, 2014 | 36,164 | - | 110 | 36,274 | ||||||||
Expenditures on property, plant and equipment | $ | 1,672 | $ | 451 | $ | 149 | $ | 2,272 | ||||
Contact Information: