Acasta Enterprises Inc. (TSX: AEF) (“Acasta” or the
“Company”) today announced its consolidated financial
results for the quarter ended June 30, 2018 and provided the
following corporate update.
Financial and Operating Highlights
- Acasta’s results from continuing
operations for the three-month period ended June 30, 2018 included
revenues of $44.1 million, a net loss of $96.9 million or $1.49 per
share (basic and diluted), an adjusted net loss of $17.6 million or
$0.27 per share (basic and diluted) and adjusted EBITDA of ($9.8)
million compared to revenues of $43.4 million, a net loss of $0.5
million or $0.01 per share (basic and diluted), adjusted net loss
of $2.2 million or $0.02 per share (basic and diluted) and adjusted
EBITDA of $6.4 million for the three-month period ended June 30,
2017.
- On June 1, 2018, the Company sold 100%
of its shares held in JemPak Corporation (“JemPak Sale
Transaction”) at a purchase price of $118.0 million. Net cash
proceeds were used to reduce debt outstanding and pay fees and
accrued interest to lenders.
- On May 15, 2018, Acasta monetized its
interest in the Stelloan profit participating notes (“PPNs”)
for net proceeds of US $25.8 million. These proceeds exclude the
additional U.S. $5.0 million in downside protection due from the
purchaser of Stellwagen pursuant to the sale agreement.
- Proceeds from the sales of JemPak,
Stellwagen and the monetization of the PPNs were primarily used to
repay debt. As a result, Acasta has effectively reduced its total
indebtedness by approximately $911.3 million from $983.9 million at
December 31, 2017 to $72.6 million at June 30, 2018.
Second Quarter 2018 Results Conference Call:
Acasta’s senior management will host a conference call on
Friday, August 10, 2018 at 9:00 a.m. (E.D.T.) to discuss the
Company’s financial and operating results. Please dial +1 (416)
340-2217 or toll-free (Canada/US) +1 (800) 806-5484 with passcode
2398339#. To ensure your participation, please join approximately
five minutes prior to the scheduled start of the conference
call.
The conference call will be available for replay at +1 (905)
694-9451 or toll-free (Canada/US) +1 (800) 408-3053 with passcode
4939925#, expiring on September 14, 2018.
Advisories:
Cautionary Note Concerning Forward-Looking Statements
This news release includes forward-looking statements. All such
statements constitute forward-looking information within the
meaning of applicable securities law and are made pursuant to the
“safe harbour” provisions of applicable securities laws.
Forward-looking statements include, but are not limited to,
statements about other anticipated future events or results,
including comments with respect to Company’s future financial
performance and condition. Forward-looking statements are
statements that are predictive in nature, depend upon or refer to
future events or conditions and are identified by words such as
“will”, “expects”, “anticipates”, “intends”, “plans”, “believes”,
“estimates” or similar expressions concerning matters that are not
historical facts. Such statements are based on current expectations
of the Company’s management and inherently involve numerous risks
and uncertainties, known and unknown, including economic factors.
The forward-looking information contained in this news release is
presented for the purpose of assisting readers in understanding the
Company’s business and strategic priorities and objectives. A
number of risks, uncertainties and other factors may cause actual
outcomes or financial results to differ materially from the
forward-looking statements contained in this news release,
including, among other factors, those referenced in the section
entitled “Risk Factors” in the Company’s annual information form
for the year ended December 31, 2017, a copy of which is available
on the SEDAR website at www.sedar.com under the Company’s profile.
Forward-looking statements contained in this news release are not
guarantees of future outcomes performance and, while
forward-looking statements are based on certain assumptions that
the Company considers reasonable, actual events could differ
materially from those expressed or implied by forward-looking
statements made by the Company. Readers are cautioned to consider
these and other factors carefully when making decisions with
respect to the Company and to not place undue reliance on
forward-looking statements. Circumstances affecting the Company may
change rapidly. Except as may be expressly required by the
applicable law, Acasta does not undertake any obligation to update
publicly or revise any such forward-looking statements, whether as
a result of new information, future events or otherwise. These
cautionary statements expressly qualify all forward-looking
statements in this new release.
Non-IFRS Financial Performance Measures (Unaudited)
Adjusted net income (loss), EBITDA and adjusted EBITDA are not
recognized measures under IFRS and this data may not be comparable
to data presented by other companies.
Adjusted net income (loss) is calculated by adjusting net income
(loss) as recorded in the unaudited condensed consolidated interim
statements of income (loss) and comprehensive income (loss) for the
exclusion of certain other income and expense items determined in
accordance with IFRS. The Company believes that this generally
accepted measure allows the evaluation of the results of continuing
operations and is useful in making comparisons between periods.
Adjusted net income (loss) is intended to provide investors with
information about the Company’s continuing income generating
capabilities. Management uses this measure to monitor and plan for
the operating performance of the Company in conjunction with other
data prepared in accordance with IFRS.
EBITDA is calculated by adjusting net income (loss) as recorded
in the unaudited condensed consolidated interim statements of
income (loss) and comprehensive income (loss) for finance costs,
current and deferred income tax, depreciation and amortization
expenses. The Company believes that this measure allows the
evaluation of the results of continuing operations and is useful in
making comparisons between periods. EBITDA is intended to provide
investors with information about the Company’s continuing income
generating capabilities. Management uses this measure to monitor
and plan for the operating performance of the Company in
conjunction with other data prepared in accordance
with IFRS.
Adjusted EBITDA is calculated by adjusting net income (loss) as
recorded in the unaudited condensed consolidated interim statements
of income (loss) and comprehensive income (loss) for the exclusion
of certain other income and expense items determined in accordance
with IFRS, being the calculation for adjusted net income
(loss) and then further adjusting for finance costs, current and
deferred income tax, depreciation and amortization expenses,
foreign exchange and impairment charges. The Company believes that
this generally accepted measure allows the evaluation of the
results of continuing operations and is useful in making
comparisons between periods. Adjusted EBITDA is intended to provide
investors with information about the Company’s continuing income
generating capabilities. Management uses this measure to monitor
and plan for the operating performance of the Company in
conjunction with other data prepared in accordance
with IFRS.
ACASTA ENTERPRISES INC. NON-IFRS FINANCIAL
PERFORMANCE MEASURES RECONCILIATION (In thousands of
Canadian dollars, except share and per share amounts)
Three months ended June 30, 2018 Three
months ended June 30, 2017 ContinuingOperations
DiscontinuedOperations
ContinuingOperations
DiscontinuedOperations Reportable Segments
Reportable Segments NON-IFRS FINANCIAL
PERFORMANCE MEASURES(in thousands of Canadian
dollars,except share and per share amounts)
ConsumerProducts Other
ConsumerProducts AcastaConsolidated
ConsumerProducts Other
ConsumerProducts Aviation
AcastaConsolidated Net income (loss)
$(75,756) $(21,115) $— $(96,871)
$3,769 $(4,294) $— $— $(525)
Net income (loss) from discontinued operations —
—
(2,227) (2,227) — — (320)
(397) (717) Impairment of goodwill 79,775 — — 79,775
— — — — — Loss on revaluation of Profit Participating Notes — — — —
— — — — — Gain on redemption of Class A Shares — — — — — — — — —
Gain on disposal of property, plant and equipment — — — — — — —
(1,289) — Qualifying Acquisition transaction costs — — — — — — — —
— ECN Acquisition transaction costs — — — — — — — 628 — Costs to
prepare aircraft for sale — — — — — — — — — Net loss (gain) on
foreign exchange (1,417) 880 151 (537) (1,329) (314) 149 26 (1,643)
Amortization of inventory fair value increment — — — — — — — — —
Other non-recurring costs — — — — — — — — —
Adjusted net income
(loss) from continuing operations $2,602
$(20,235) $— $(17,633) $2,440
$(4,608) $— $— $(2,168) Adjusted net
income (loss) from discontinued operations $— $—
$(2,076) $(2,076) $— $— $(171)
$(1,032) $(1,203) Finance costs $1,911 $8,133 $803
$10,044 $1,021 $934 $1,161 $6,929 $1,955 Current income tax expense
(1,871) — 476 (1,871) 2,390 — 257 847 2,390 Deferred income tax
recovery (5,824) — (196) (5,824) (1,085) — (339) (820) (1,085)
Depreciation of property, plant and equipment and amortization of
intangible assets 5,438 — 1,124 5,438 5,270 — 2,390 14,721 5,270
EBITDA from continuing operations $(76,102) $(12,982) $—
$(89,084) $11,365 $(3,360) $— $— $8,005
EBITDA from discontinued
operations — — (20) (20) — — 3,149 21,280 24,429
EBITDA
$(76,102) $(12,982) $(20) $(89,104)
$11,365 $(3,360) $3,149 $21,280
$32,434 Adjusted EBITDA from continuing operations
$2,256 $(12,102) $— $(9,846) $10,036 $(3,674) $— $— $6,362
Adjusted EBITDA from discontinued operations — — 131 131 — —
3,298 20,645 23,943
Adjusted EBITDA $2,256
$(12,102) $131 $(9,715) $10,036
$(3,674) $3,298 $20,645 $30,305
ACASTA ENTERPRISES INC. NON-IFRS FINANCIAL
PERFORMANCE MEASURES RECONCILIATION (Continued) (In
thousands of Canadian dollars, except share and per share
amounts) Three months ended June 30, 2018
Three months ended June 30, 2017
ContinuingOperations
DiscontinuedOperations
ContinuingOperations
DiscontinuedOperations Reportable Segments
Reportable Segments NON-IFRS FINANCIAL
PERFORMANCE MEASURES(in thousands of Canadian
dollars,except share and per share amounts)
ConsumerProducts Other
ConsumerProducts AcastaConsolidated
ConsumerProducts Other
ConsumerProducts Aviation
AcastaConsolidated Net loss from continuing
operations per share — basic (1.49) (0.01) Net
income (loss) from discontinued operations per share — basic
(0.03) (0.01) Net loss from continuing operations
per share — diluted(1) (1.49) (0.01)
Net income (loss) from discontinued operations per share —
diluted(1) (0.03) (0.01) Adjusted net
income (loss) from continuing operations per share — basic
(0.27) (0.02) Adjusted net income (loss) from
discontinued operations per share — basic (0.03)
(0.02) Adjusted net income (loss) from continuing
operations per share — diluted(1) (0.27)
(0.02) Adjusted net income (loss) from discontinued
operations per share — diluted(1) (0.03)
(0.02) Weighted average number of Class B shares
outstanding — basic 64,972,060 88,435,533
Weighted average number of Class B shares outstanding —
diluted 64,972,060 88,435,533 (1) The
dilutive impact of Class B Shares related to the Company’s DSU Plan
was excluded from the computation of diluted weighted average
number of Class B Shares outstanding where the Company reported a
net loss or adjusted net loss because their effect would have been
anti-dilutive.
Six months ended June 30,
2018 Six months ended June 30, 2017
ContinuingOperations
DiscontinuedOperations
ContinuingOperations
DiscontinuedOperations Reportable
Segments Reportable Segments NON-IFRS FINANCIAL
PERFORMANCE MEASURES(in thousands of Canadian
dollars,except share and per share amounts)
ConsumerProducts Other
ConsumerProducts Aviation
AcastaConsolidated ConsumerProducts
Other ConsumerProducts
Aviation AcastaConsolidated Net income
(loss) from continuing operations $(79,471)
$(43,843) $— $— $(123,314)
$5,996 $(6,436) $— $— $(440)
Net income (loss) from discontinued operations —
— (14,653) (129,945) (144,598) —
— (678) 4,074 3,396 Impairment of
goodwill 79,775 — 12,248 — 79,775 — — — — — Loss on revaluation of
Profit Participating Notes — — — 33,121 — — — — — — Gain on
redemption of Class A Shares — — — — — — (3,699) — — (3,699) Gain
on disposal of property, plant and equipment — — — — — — — — (206)
— Qualifying Acquisition transaction costs — — — — — — 4,627 — —
4,627 ECN Acquisition transaction costs — — — — — — — — 628 — Costs
to prepare aircraft for sale — — — — — — — — 706 — Net (gain) loss
on foreign exchange (1,738) 2,886 (85) 61 1,148 (1,146) (409) 210 1
(1,555) Amortization of inventory fair value increment — — — — —
1,203 — 743 — 1,203 Other non-recurring costs — — — — — — — 359 — —
Adjusted net income (loss) from continuing operations
$(1,434) $(40,957) $— $—
$(42,391) $6,053 $(5,917) $— $—
$136 Adjusted net income (loss) from discontinued
operations $— $— $(2,490) $(96,763)
$(99,253) $— $— $634 $5,203
$5,837 Finance costs $2,576 $20,763 $1,356 $7,342 $23,339
$1,760 $1,126 $1,468 $12,343 $2,886 Current income tax expense
(1,871) — 1,023 (379) (1,871) 4,929 — 734 1,865 4,929 Deferred
income tax recovery (7,103) — (660) (71) (7,103) (2,842) — (935)
(1,557) (2,842) Depreciation of property, plant and equipment and
amortization of intangible assets 10,824 — 3,644 8,008 10,824
10,434 — 4,781 27,257 10,434
EBITDA from continuing
operations $(75,045) $(23,080) $— $— $(98,125) $20,277 $(5,310)
$— $— $14,967
EBITDA from discontinued operations — —
(9,290) (115,045) (124,335) — — 5,370 43,982 49,352
EBITDA
$(75,045) $(23,080) $(9,290) $(115,045)
$(222,460) $20,277 $(5,310) $5,370
$43,982 $64,319 Adjusted EBITDA from continuing
operations $2,992 $(20,194) $— $— $(17,202) $20,334 $(4,791) $—
$— $15,543
Adjusted EBITDA from discontinued operations — —
2,873 (81,863) (78,990) — — 6,682 45,111 51,793
Adjusted
EBITDA $2,992 $(20,194) $2,873
$(81,863) $(96,192) $20,334 $(4,791)
$6,682 $45,111 $67,336
Six months ended June 30, 2018 Six months ended June 30,
2017
ContinuingOperations
DiscontinuedOperations
ContinuingOperations
DiscontinuedOperations
Reportable Segments Reportable Segments
NON-IFRS FINANCIAL PERFORMANCE MEASURES(in thousands of
Canadian dollars,except share and per share amounts)
ConsumerProducts Other
ConsumerProducts Aviation
AcastaConsolidated ConsumerProducts
Other ConsumerProducts
Aviation AcastaConsolidated Net loss from
continuing operations per share — basic (1.60)
(0.01) Net income (loss) from discontinued operations per
share — basic (1.88) 0.04 Net loss from
continuing operations per share — diluted(1)
(1.60) (0.01) Net income (loss) from discontinued
operations per share — diluted(1) (1.88)
0.04 Adjusted net income (loss) from continuing
operations per share — basic (0.55) 0.00
Adjusted net income (loss) from discontinued operations per
share — basic (1.29) 0.07 Adjusted net income
(loss) from continuing operations per share — diluted(1)
(0.55) 0.00 Adjusted net income (loss) from
discontinued operations per share — diluted(1)
(1.29) 0.07 Weighted average number of Class B
shares outstanding — basic 77,035,949 87,049,295
Weighted average number of Class B shares outstanding —
diluted 77,035,949 87,049,295 (1) The
dilutive impact of Class B Shares related to the Company’s DSU Plan
was excluded from the computation of diluted weighted average
number of Class B Shares outstanding where the Company reported a
net loss or adjusted net loss because their effect would have been
anti-dilutive.
ACASTA ENTERPRISES INC.
UNAUDITED CONDENSED CONSOLIDATED INTERIM STATEMENTS OF FINANCIAL
POSITION (in thousands of Canadian dollars)
As atJune 30, 2018 As
atDecember 31, 2017 Assets Current assets Cash
and cash equivalents $2,974 $26,139 Trade and other receivables
27,519 39,644 Inventories 42,491 48,423 Prepaid expenses and
deposits 3,372 54,548 Other current assets 6,445 5,534 Current
portion of loans receivable — 11,257 $82,801 $185,545 Non-current
assets Property, plant and equipment $37,608 $617,594 Intangible
assets 60,168 275,469 Goodwill — 176,552 Long-term loans receivable
— 189,974 Non-current deposits — 5,077 Other non-current assets —
12,889 $97,776 $1,277,555
Total assets $180,577
$1,463,100 Liabilities Current liabilities Accounts
payable and accrued liabilities $28,182 $37,107 Current debt
obligations 72,562 276,735 Income taxes payable 5,362 7,232 Other
current liabilities 477 14,333 $106,583 $335,407 Non-current
liabilities Deferred tax liabilities $3,262 $20,306 Other
non-current liabilities — 31,520 Long-term debt — 707,211 $3,262
$759,037
Total liabilities $109,845 $1,094,444
Shareholders’ equity Share capital $594,246 $849,383
Contributed surplus 197,946 300 Warrants 3,939 3,939 Deficiency
(725,399) (457,104) Accumulated other comprehensive loss — (27,862)
Total shareholders’ equity $70,732 $368,656
Total liabilities and shareholders’ equity $180,577
$1,463,100 ACASTA ENTERPRISES INC.
UNAUDITED CONDENSED CONSOLIDATED INTERIM STATEMENTS OF
COMPREHENSIVE INCOME (LOSS) (in thousands of Canadian
dollars, except share and per share amounts)
Three months endedJune 30, Six months
endedJune 30, 2018 2017 2018
2017 Revenue $44,094 $43,381 $86,398 $85,426
Cost of revenue, expenses, and other items Cost of revenue
35,186 26,966 69,364 54,843 Selling, general and administrative
expense 24,817 15,321 43,709 31,537 Finance costs, net 10,044 1,955
23,339 2,886 Impairment of goodwill and intangible assets 79,775 —
79,775 — Net unrealized loss on change in fair value of financial
instruments 92 — 92 — Net loss (gain) on foreign exchange (537)
(1,643) 1,148 (1,555) Other loss (income) loss, net (717) 2 1,259
(3,932)
Income (loss) before income tax $(104,566)
$780 $(132,288) $1,647 Current income tax
expense (recovery) (1,871) 2,390 (1,871) 4,929 Deferred income tax
recovery (5,824) (1,085) (7,103) (2,842)
Net loss from
continuing operations $(96,871) $(525)
$(123,314) $(440) Net income (loss) from
discontinued operations, net of tax (2,227) (717)
(144,598) 3,396 Net income (loss)
$(99,098) $(1,242) $(267,912) $2,956
Other comprehensive income (loss) from discontinued operations,
net of tax $— $(12,607) $—
$(14,136) Total comprehensive loss $(99,098)
$(13,849) $(267,912) $(11,180) Net income
(loss) per share Basic — continuing operations $(1.49) $(0.01)
$(1.60) $(0.01) Basic — discontinued operations $(0.03) $(0.01)
$(1.88) $0.04 Diluted — continuing operations $(1.49) $(0.01)
$(1.60) $(0.01) Diluted — discontinued operations $(0.03) $(0.01)
$(1.88) $0.04
ACASTA ENTERPRISES INC.
UNAUDITED CONDENSED CONSOLIDATED INTERIM STATEMENTS OF CASH
FLOWS (in thousands of Canadian dollars)
Six months endedJune 30, 2018 Six months
endedJune 30, 2017 Operating activities Net
(loss) income $(267,912) $2,956 Adjustments for non-cash items and
other adjustments: Share-based compensation 1,036 — Depreciation of
property, plant and equipment 8,141 12,714 Amortization of
intangible assets 14,364 29,758 Net unrealized loss (gain) on
change in fair value of financial instruments 92 (236) Finance
costs 23,339 16,697 Current income tax expense (recovery) (1,227)
7,528 Deferred income tax recovery (7,834) (5,334) ECN
consideration paid in Class B Shares 1,005 — Impairment of goodwill
and intangible assets 92,023 — Loss on disposal of Aviation
reportable segment 97,721 — Loss on disposal of JemPak 2,649 — Gain
on fair value remeasurement of Profit Participating Notes (621) —
Net loss (gain) on foreign exchange 1,126 (1,344) Gain on
redemption of Class A Restricted Voting Shares — (3,699) Gain on
disposal of property, plant and equipment — (206) Amortization of
inventory fair value increment — 3,355 Changes in non-cash working
capital (3,175) (42,225) Cash (used in) provided by operating
activities $(39,273) $19,964 Income taxes paid (1,632) (3,620)
Net cash flows provided by (used in) operating activities
$(40,905) $16,344
Investing activities Additions to
property, plant and equipment $(5,923) $(305,746) Proceeds on
disposition of Aviation reportable segment, net 32,727 — Proceeds
on disposition of JemPak, net 114,062 — Proceeds on monetization of
Profit Participating Notes 33,215 — Additions to intangible assets
— (68,463) Proceeds on disposal of property, plant and equipment —
53,744 Proceeds from restricted cash to finance acquisitions —
106,240 Acquisition of Apollo — (161,545) Acquisition of JemPak —
(55,448) Acquisition of Stellwagen — (90,772)
Cash provided by
(used in) investing activities $174,081 $(521,990)
Financing
activities Proceeds from debt and credit facilities $39,362
$475,630 Repayment of debt (182,098) (62,724) Payment of debt
issuance costs (1,000) (20,362) Proceeds from restricted cash to
fund redemption of Class A Restricted Voting Shares and deferred
underwriters’ commission — 298,761 Redemption of Class A Restricted
Voting Shares — (285,680) Proceeds from private placement of Class
B Shares — 159,551 Payment of deferred underwriters’ commission —
(13,081) Payment of share issuance costs related to private
placement — (1,136) Interest paid (12,605) (14,040)
Cash
provided by (used in) financing activities $(156,341) $536,919
Net increase (decrease) in cash during the period $(23,165)
$31,273 Foreign exchange impact on cash held in foreign currencies
— 1,967 Cash and cash equivalents, beginning of period 26,139 187
Cash and cash equivalents, end of period $2,974
$33,427
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version on businesswire.com: https://www.businesswire.com/news/home/20180809005820/en/
Acasta Enterprises Inc.Ian Kidson, 1-647-725-6707Interim Chief
Executive Officerwww.acastaenterprises.com