TSX Symbol: SQP
For Immediate Release
Strongco Reports Improved First Quarter Results
Mississauga, Ontario – May 10, 2004: Strongco Inc. today released its financial results for the first quarter of 2004.
Strongco lost $0.1 million - $0.01 per share – during the first quarter, traditionally its weakest period of the year due to seasonality factors throughout its markets. These results represent an improvement over last year’s first quarter loss of $0.5 million or $0.06 per share.
Mr. Larry Pirnak, President commented, “We are pleased with the results and anticipate continued improvement for the balance of 2004.”
Strongco will host a conference call at 3:30 p.m. on Monday May 10 th, to further discuss its first quarter. To participate in the conference call, dial 800.396.0424, reservation number is 21193623. A taped version of the call will be available until May 24 th, 2004. Dial 800.558.5253 and enter the reservation number of 21193623.
Strongco is a full-line equipment sales and service company with operations from Alberta through Atlantic Canada. Its shares are listed on the Toronto Stock Exchange and its website can be accessed at www.strongco.com
For further information contact:
Len Phillips, Vice President
Telephone No.: 905.565.3840
Email: lphillips@strongco.com
STRONGCO INC. |
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CONSOLIDATED BALANCE SHEETS |
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As at |
As at |
As at |
||||
March 31 |
March 31 |
December 31 |
||||
| [unaudited - in thousands of dollars] | $ | 2004
|
$ |
2003
|
$ |
2003
|
| ASSETS | ||||||
| Current | ||||||
| Accounts receivable | 27,250 | 33,632 | 31,040 | |||
| Inventories | 87,156 | 124,944 | 87,295 | |||
| Prepaid expenses and deposits | 1,566 | 879 | 1,797 | |||
| Income and other taxes receivable | —
|
21
|
—
|
|||
| Total current assets | 115,972 | 159,476 | 120,132 | |||
| Rental equipment, net | 15,935 | 23,369 | 17,425 | |||
| Capital assets, net | 17,371 | 18,864 | 17,548 | |||
| Capital assets held for sale, net | 3,980 | 4,288 |
3,980 |
|||
| Accrued benefit asset | 3,610
|
1,672
|
3,314
|
|||
| 156,868
|
207,669
|
162,399
|
||||
| LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||
| Current | ||||||
| Bank indebtedness | 17,770 | 28,023 | 21,465 | |||
| Accounts payable and accrued liabilities | 27,352 | 39,738 | 25,312 | |||
| Equipment notes payable | 54,484 | 79,804 | 57,540 | |||
| Current portion of long-term debt | 4,416 | 9,778 | 4,663 | |||
| Income and other taxes payable | 464
|
—
|
424
|
|||
| Total current liabilities | 104,486 | 157,343 | 109,404 | |||
| Long-term debt | 1,106 | 5,687 | 1,720 | |||
| Future income taxes | 229 | 141 | 229 | |||
| Accrued benefit liability | 1,393
|
324
|
1,295
|
|||
| Total liabilities | 107,214
|
163,495
|
112,648
|
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| Shareholders' equity | ||||||
| Share capital [note 2] | 52,143 | 52,100 | 52,131 | |||
| Contributed surplus [note 2] | 9 | — |
— |
|||
| Deficit | -2,498
|
-7,926
|
-2,380
|
|||
| Total shareholders' equity | 49,654
|
44,174
|
49,751
|
|||
| 156,868
|
207,669
|
162,399
|
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| See accompanying notes | ||||||
STRONGCO INC. |
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CONSOLIDATED STATEMENTS OF LOSS |
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AND DEFICIT |
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Three months |
||||
ended March 31 |
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| [unaudited - in thousands of dollars, except per share amounts] | $ | 2004
|
$ | 2003
|
| Revenue | 65,281 | 72,203 | ||
| Cost of sales | 51,857
|
58,838
|
||
| Gross margin | 13,424 | 13,365 | ||
| Expenses | ||||
| Administration, distribution and selling | 12,728
|
12,475
|
||
| Income before the following | 696 | 890 | ||
| Interest | 869
|
1,303
|
||
| Loss before income taxes | -173 | -413 | ||
| Provision for income taxes | -55
|
112
|
||
| Net loss | -118
|
-525
|
||
| Deficit, beginning of period | -2,380
|
-7,401
|
||
| Deficit, end of period | -2,498
|
-7,926
|
||
| Basic earnings per share | ||||
| Loss per share | $ (0.01)
|
$ (0.06)
|
||
| Weighted average number of shares | 9,413,827
|
9,386,135
|
||
| Diluted earnings per share | ||||
| Loss per share | $ (0.01)
|
$ (0.06)
|
||
| Weighted average number of shares | 9,561,553
|
9,386,135
|
||
| See accompanying notes | ||||
STRONGCO INC. |
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CONSOLIDATED STATEMENTS OF CASH FLOWS |
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Three months |
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ended March 31 |
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| [unaudited - in thousands of dollars] | $ | 2004 |
$ | 2003 |
| OPERATING ACTIVITIES | ||||
| Net loss | -118 | -525 | ||
| Add (deduct) items not involving a current outlay (inflow) of cash | ||||
| Amortization of rental equipment | 890 | 1,210 | ||
| Amortization of capital assets | 236 | 296 | ||
| (Gain) / loss on disposal of capital assets and rental equipment | -16 | -97 | ||
| Stock based compensation | 9 |
— |
||
| Future income taxes | — |
20 |
||
| Other | -198
|
158
|
||
| 803 | 1,062 | |||
| Net change in non-cash working capital balances | ||||
| related to operations | 3,184
|
1,275
|
||
| Cash provided by operating activities | 3,987 | 2,337 | ||
| INVESTING ACTIVITIES | ||||
| Purchase of rental equipment | -11 | -68 | ||
| Purchase of capital assets | -59 | -31 | ||
| Proceeds on disposal of capital assets and rental equipment | 627
|
1,397
|
||
| Cash provided by investing activities | 557 | 1,298 | ||
| FINANCING ACTIVITIES | ||||
| Decrease in bank indebtedness | -3,695 | -262 | ||
| Repayment of long-term debt | -206 | -1,563 | ||
| Decrease in rental equipment financing | -655 | -1,810 | ||
| Issuance of share capital | 12
|
—
|
||
| Cash used in financing activities | -4,544 | -3,635 | ||
| Net increase in cash and cash equivalents during the period | — |
— |
||
| Cash and cash equivalents, beginning of period | — |
— |
||
| Cash and cash equivalents, end of period | — |
— |
||
| Supplemental cash flow information | ||||
| Interest paid | 931 | 1,344 | ||
| Income taxes received | -95 | -2 | ||
| See accompanying notes | ||||
March 31, 2004
Notes to unaudited interim consolidated financial statements
1. Basis of Presentation
The unaudited interim consolidated financial statements have been prepared following the accounting policies as set out in the fiscal 2003 annual consolidated financial statements.
The interim consolidated financial statements have been prepared by the Corporation in accordance with Canadian generally accepted accounting principles (GAAP) applicable to interim consolidated financial statements, and follow the same accounting policies and methods in their application as the most recent annual financial statements. In the opinion of management, all adjustments necessary for a fair presentation are reflected in the interim consolidated financial statements. Such adjustments are of a normal and recurring nature. The interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Corporation’s annual report for fiscal year 2003.
2. Share Capital and Contributed Surplus
Details of issued share capital are as follows:
As at March 31, 2004 contributed surplus is comprised of stock based compensation of $9 [2003 – nil].
3. Segmented Information
Segmented information for the three months ended March 31, 2004 and March 31, 2003 is as follows.
[a] The reconciling items to adjust segment profit (loss) represent common corporate costs not allocated to the segments and corporate head office costs incurred during the year.
[b] The reconciling items to adjust segment total assets includes prepaid expenses and accrued benefit assets carried on the corporate head office ledger, offset by the elimination of the intercompany receivables at the corporate head office.
4. Comparative Consolidated Financial Statements
The comparative interim consolidated financial statements have been reclassified from statements previously presented to conform to the presentation of the 2004 interim consolidated financial statements.
