Pareto announces third quarter financial results
Revenue of
Q3 Financial and Operating Highlights
- Revenue was $17.6 million in the third quarter, compared to
$18.1 million in Q3 2008
- EBITDA* was $2.7 million, an increase of 51% from $1.8 million a
year earlier
- As a percentage of revenue, EBITDA margins were 15.2%, up from 9.8% in
Q3 2008
- Net earnings were $1.5 million, up 132% from $0.6 million in the third
quarter of 2008
- Diluted earnings per share were $0.035, up from $0.015 a year earlier
- Completed Substantial Issuer Bid, purchasing for cancellation
10.5 million shares for a total cost of $10.0 million
Year-to-Date Highlights
- Revenue of $50.8 million, compared to $55.4 million in the first nine
months of 2008
- EBITDA of $6.2 million, representing 12.2% of revenue, compared to
$4.9 million or 8.9% of revenue in the comparable period a year
earlier
- Net earnings of $3.2 million, compared to $2.1 million in the first
nine months of 2008
- Diluted earnings per share of $0.075, compared to $0.050 in the
comparable period of 2008
"Our continued focus on cutting costs and driving growth in our core Shopper Marketing business led to a 51% increase in EBITDA this quarter, compared to the third quarter of 2008," said Kerry Shapansky, Pareto's President and CEO. "Going forward, we will continue to increase our focus on Shopper Marketing, an area in which Pareto has been developing industry-leading expertise for more than seven years. Shopper Marketing is the fastest growing sector of the marketing industry. We believe we are uniquely well-positioned to capitalize on our position as Canada's Shopper Marketing leader and profitably grow our business in the quarters and years to come."
"During the third quarter we also successfully completed a Substantial Issuer Bid ("SIB") intended to provide a short-term liquidity opportunity to our shareholders," continued
Financial Review
Pareto's revenues for the three months ended
EBITDA increased by 51% in the third quarter of 2009 to
Net earnings in the third quarter of 2009 were
At
Following the completion of the SIB on
* Non-GAAP Measures
Pareto presents EBITDA information as supplemental figures because management believes they provide useful information regarding operating performance. EBITDA (earnings before amortization, net interest and finance charges, share based compensation, income taxes, gain on acquisition and non-recurring expenses) is not a recognized measure under Canadian generally accepted accounting principles (GAAP), does not have standardized meaning, and is unlikely to be comparable to similar measures used by other companies. Accordingly, investors are cautioned that EBITDA should not be construed as an alternative to revenue, net earnings or loss determined in accordance with GAAP as an indicator of the financial performance of the Company or as a measure of the Company's liquidity and cash flows.
About Pareto Corporation
Pareto Corporation is a Shopper Marketing company that offers marketing execution solutions to leading companies in a broad range of industry sectors. Pareto provides measurable, quantifiable services that complement our clients' marketing and sales departments. For more information, please visit our website at www.pareto.ca.
This press release contains forward-looking statements related to expected future events and financial operating results of Pareto that involve risks and uncertainties. Actual results may differ materially from management expectations as projected in such forward-looking statements for a variety of reasons, including market and general economic conditions and the risks and uncertainties detailed from time to time in Pareto's SEDAR filings.
-------------------------------------------------------------------------
Pareto Corporation
Consolidated Balance Sheets
-------------------------------------------------------------------------
-------------------------------------------------------------------------
September 30 December 31
As at 2009 2008
(unaudited) (audited)
-------------------------------------------------------------------------
Assets
Current assets
Accounts receivable $ 16,029,248 $ 16,460,617
Inventories 2,948,487 1,746,355
Prepaid expenses 607,898 466,040
Current future income tax assets 43,759 38,167
--------------------------
19,629,392 18,711,179
--------------------------
Loans receivable and other assets 1,669,734 1,299,045
Long-term future income tax assets 183,184 258,209
Capital assets 4,728,082 3,340,697
Intangible assets 1,292,245 1,343,493
Goodwill 21,058,577 21,058,577
--------------------------
$ 48,561,214 $ 46,011,200
--------------------------
Liabilities and Shareholders' Equity
Current liabilities
Bank indebtedness $ 1,645,284 $ 654,573
Accounts payable and accrued liabilities 10,450,224 12,032,039
Dividends payable 488,762 1,717,246
Deferred revenue 2,774,619 2,023,252
Income taxes payable 1,495,295 983,915
Current portion of capital lease obligations - 314,275
Current portion of lease inducements 42,482 42,482
Current portion of long-term loan 1,200,000 -
--------------------------
18,096,666 17,767,782
--------------------------
Long-term future income tax liabilities 326,890 194,192
Long-term capital lease obligations - 395,004
Deferred lease inducements 310,881 342,742
Long-term loan 10,623,106 -
--------------------------
Total liabilities 29,357,543 18,699,720
--------------------------
Shareholders' equity
Share capital 12,635,777 16,501,855
Contributed surplus 1,888,789 1,492,547
Retained earnings and accumulated other
comprehensive income 4,679,105 9,317,078
--------------------------
Total shareholders' equity 19,203,671 27,311,480
--------------------------
$ 48,561,214 $ 46,011,200
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Pareto Corporation
Consolidated Statements of Operations and Retained Earnings
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Three months ended Nine months ended
September 30 September 30
(unaudited) (unaudited)
2009 2008 2009 2008
-------------------------------------------------------------------------
Revenue $ 17,591,647 $ 18,126,430 $ 50,823,212 $ 55,433,452
Operating and
administrative
expenses 14,919,821 16,536,954 44,606,499 50,670,690
-------------------------------------------------------
2,671,826 1,589,476 6,216,713 4,762,762
-------------------------------------------------------
Amortization of
capital assets 153,221 177,355 477,226 494,945
Amortization of
intangible assets 52,779 52,778 158,336 158,333
Interest expense 51,938 118,691 148,306 404,328
Interest income (47,410) (6,375) (105,992) (20,559)
Share-based
compensation 208,441 203,214 629,374 604,805
-------------------------------------------------------
418,969 545,663 1,307,250 1,641,852
Earnings before
income taxes 2,252,858 1,043,813 4,909,464 3,120,910
Income taxes 757,735 399,483 1,683,608 1,058,189
-------------------------------------------------------
Net earnings and
comprehensive
income for the
period 1,495,122 644,330 3,225,855 2,062,721
Retained earnings,
beginning of period 9,758,685 8,766,100 9,317,077 7,877,806
Dividends declared (488,762) - (1,777,887) -
Excess price paid
over carrying value
on repurchase of
common shares (6,085,940) - (6,085,940) (530,097)
-------------------------------------------------------
Retained
earnings, end
of period $ 4,679,105 $ 9,410,430 $ 4,679,105 $ 9,410,430
-------------------------------------------------------------------------
Basic earnings
per share $ 0.036 $ 0.015 $ 0.076 $ 0.048
Diluted earnings
per share $ 0.034 $ 0.014 $ 0.073 $ 0.046
-------------------------------------------------------------------------
Weighted
average
number of
common shares
outstanding:
Basic 41,545,569 42,773,370 42,244,025 43,066,546
Diluted 43,857,647 44,664,783 44,410,848 44,841,339
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Pareto Corporation
Consolidated Statements of Cash Flows
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Three months ended Nine months ended
September 30 September 30
(unaudited) (unaudited)
2009 2008 2009 2008
-------------------------------------------------------------------------
Operating activities
Net earnings for
the period $ 1,495,122 $ 644,330 $ 3,225,855 $ 2,062,721
Items not
involving cash:
Amortization of
capital assets 153,221 177,354 477,226 494,945
Amortization of
intangible assets 52,779 52,778 158,336 158,333
Amortization of
lease inducement (10,621) (28,571) (31,862) (28,571)
Non-cash interest (41,805) - (90,189) -
Non-cash lease
expense - - - 197,130
Share-based
compensation 208,441 203,214 629,374 604,805
Future income
tax provision 69,491 236,099 202,131 847,976
-------------------------------------------------------
1,926,628 1,285,204 4,570,871 4,337,339
Changes in non
cash operating
accounts (37,428) 424,557 (1,246,689) (1,579,800)
-------------------------------------------------------
1,889,200 1,709,761 3,324,182 2,757,539
-------------------------------------------------------
Capital asset
additions (1,596,770) (144,903) (1,864,611) (629,174)
Intangible asset
additions (107,088) - (107,088) -
Proceeds from
lease inducement - 227,285 - 227,285
Loans receivable
and other assets (190,250) (188,500) (380,500) (738,500)
Acquisitions,
net of cash - - - (3,066,668)
-------------------------------------------------------
(1,894,108) (106,118) (2,352,199) (4,207,057)
-------------------------------------------------------
Financing activities
Dividends paid (645,147) - (3,006,371) -
Repayment of capital
lease obligations (582,503) (71,353) (709,279) (208,331)
Repayment of Loans
Receivable 75,000 - 100,000 -
Proceeds from term
loan 11,823,106 - 11,823,106 -
Issuance of
shares - 86,000 - 98,500
Share issue costs - - - (2,051)
Repurchase of
common shares (10,170,150) - (10,170,150) (1,026,430)
-------------------------------------------------------
500,306 14,647 (1,962,694) 1,138,312
-------------------------------------------------------
Increase
(Decrease)
in cash for
the period 495,398 1,618,290 (990,711) (2,587,830)
(Bank Indebtedness)
/Cash, beginning
of period (2,140,682) (4,574,411) (654,573) (368,291)
-------------------------------------------------------
(Bank Indebtedness)
/Cash, end
of period $ (1,645,284) $ (2,956,121) $ (1,645,284) $ (2,956,121)
-------------------------------------------------------------------------
For further information: Kerry Shapansky, President and Chief Executive Officer, Pareto Corporation, (416) 790-2350; Karen Trudell, Chief Financial Officer, Pareto Corporation, (416) 790-2360; Glen Williams, Investor Relations, Equicom Group, (416) 815-0700 ext 272
Share this article