Norwall Group Inc. reports results for the first quarter end March 31, 2010
BRAMPTON, ON, May 28 /CNW/ - Norwall Group Inc., one of North America's largest manufacturers and distributors of residential wallcovering, announced today its financial results for the quarter ended March 31, 2010.
Sales for the first quarter of 2010 were $3,896,000, down $2,878,000 or 42.5% as compared to the same period in the previous year. The loss of two major customers accounted for $1,331,000 (19.6%) of the decline and the appreciation of the Canadian dollar accounted for a further $1,043,000 (15.4%). The current quarter's net loss was $1,061,000 or $(0.13) per share as compared to the net loss of $1,040,000 or $(0.15) for the comparable period last year. The Company continues to maintain a positive working capital of $5,208,000 at the end of the first quarter of 2010 as compared to $6,087,000 at year end.
As a result of the continued erosion of global wallcovering markets and the appreciation of the Canadian dollar it is no longer feasible for Norwall to profitably manufacture in Canada and sell its products largely denominated in US dollars. In response, the company's Board of Directors made the decision to reposition the business and outsource its manufacturing operations.
In early 2010 the Company concluded a product supply agreement, with a South Korean company and has completed the sale of its manufacturing equipment to the same supplier. Manufacturing is expected to cease in Canada by the third quarter of 2010. Norwall subsequently entered into a conditional sales agreement for the sale of its manufacturing plant located in Brampton Ontario.
Norwall Group (TSXV:NGI) manufactures quality residential wallpapers and borders and distributes them to thousands of home centres, specialty stores and mass merchants in Canada and through its wholly-owned operating subsidiary, Patton Wallcoverings, in the United States.
This Press Release contains forward-looking statements reflecting management's current expectations regarding future results of operations, economic performance, financial conditions, and achievements of the Company. Actual results may differ materially from those in such statements. The Company wishes to caution the reader that those important factors described elsewhere in the management's discussion and analysis of operations could affect the Company's actual results and could cause such results to materially differ from those expressed in any forward-looking statement made by, or on behalf of, the Company.
NORWALL GROUP INC.
Consolidated Balance Sheets
(In thousands of Canadian dollars, except per share amounts)
March 31, December 31,
2010 2009
$ $
(Unaudited)
Assets
Current assets
Cash and cash equivalents 2,664 3,343
Accounts receivable 3,396 3,765
Inventories 3,784 3,902
Merchandising supplies 440 161
Prepaid expenses and other 176 135
Note receivable 1,793
Assets held for sale - 1,997
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12,253 13,303
Assets held for sale 6,647 6,647
Property, plant and equipment 952 1,168
Future income taxes 1,940 2,024
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21,792 23,142
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Liabilities
Current liabilities
Accounts payable and accrued liabilities 3,491 3,274
Current portion of long-term debt 3,554 3,942
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7,045 7,216
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Shareholders' Equity
Share capital 33,134 33,134
Accumulated other comprehensive income (loss) 21 21
Deficit (18,290) (17,229)
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14,747 15,926
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21,792 23,142
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NORWALL GROUP INC.
Consolidated Statements of Operations
(In thousands of Canadian dollars, except per share amounts)
THREE MONTHS ENDED
---------------------------
March 31, March 31,
2010 2009
---------------------------
(unaudited) (unaudited)
Sales $ 3,896 $ 6,774
Cost of goods sold 3,003 4,923
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Gross profit 893 1,851
Selling, general and administrative expenses 1,731 2,268
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Loss from operations before the undernoted
items (838) (417)
Restructuring and other costs - (607)
Loss from operations before the following
items (838) (1,024)
Foreign exchange gain (84) 263
Interest expense (58) (57)
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Loss from operations before income taxes (980) (818)
Income tax expense (81) (222)
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Loss for the period $ (1,061) $ (1,040)
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Basic and diluted loss per share $ (0.13) $ (0.15)
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Weighted average number of common shares
outstanding 7,135,032 7,135,032
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%SEDAR: 00002584E
For further information: (905) 791-2700; James J. Patton, President and Chief Executive Officer, [email protected]; Edward Diochon, Vice President of Finance, [email protected]
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