The Churchill Corporation Reports Third Quarter Financial Results
(TSX: CUQ) Third Quarter 2009 & YTD Financial Results ------------------------------------------ - Third quarter 2009 net earnings including the earnings from discontinued operations were $15.2 million ($0.86 per share) compared to $11.2 million ($0.62 per share) in the prior year. - Net earnings for the nine months ended September 30, 2009 were $27.1 million ($1.54 per share) compared to $25.2 million ($1.41 per share) for the same period of 2008. - Contract income margin increased to 16.8% compared to 13.0% in Q3 2008. - $17.3 million of EBITDA from continuing operations in Q3 2009 compared to $18.2 million in Q3 2008. - $11.7 million of earnings ($0.66 per share) from continuing operations in Q3 2009 compared to $11.9 million of earnings ($0.66 per share) from continuing operations in Q3 2008. - $157.1 million in cash and cash equivalents as at September 30, 2009, compared to $100.8 million at December 31, 2008. - $38.9 million of EBITDA from continuing operations in the nine month period ending September 30, 2009, compared to $38.6 million of EBITDA from continuing operations in the same nine month period of 2008. - $25.4 million of net earnings from continuing operations for the nine months ended September 30, 2009 compared to $24.3 million of net earnings from continuing operations for the same period of 2008. Highlights & Significant Items - Financial close of the Fort St. John Hospital project occurred on July 17, 2009 and resulted in $115 million being added to our backlog in Q3 2009. - In July 2009, Stuart Olson was awarded the $44 million, Simon Fraser University Schrum Science Centre Renewal - Phase 1 Chemistry project. - On August 12, 2009, the Corporation executed a purchase and sale agreement to divest itself of Triton's operations and certain assets and liabilities of the Corporate and Other segment receiving consideration of $18.3 million, resulting in a gain on sale of $4.2 million. Also, the eventual sale of the Davies Road building is expected to generate $4.0 to $5.0 million in cash proceeds when completed. - During the quarter, the Corporation completed the consolidation of its operating and corporate offices into Edmonton and Calgary. This initiative plus other restructuring is expected to generate $2 million of cost savings annually. - In August and September of 2009, Stuart Olson was awarded a $47 million contract with the Department of Defense for CFB Esquimalt in Victoria, British Columbia and the $66 million Genesis Recreation Centre project in the Southern Alberta region. - In late October, the Corporation created two new Vice President positions and reorganized existing internal resources to enhance the Corporate Centre's organizational capabilities in the areas of strategic planning and business development and to focus more resources on shareholder value creation.
------------------------------------------------------------------------- Three months ended September 30, 2009 -------------------------------------------------- ($ millions, except $ % per share amounts) 2009 2008 Change Change ------------------------------------------------------------------------- Contract revenue $161.5 $216.2 (54.7) -25% Contract income 27.1 28.1 (1.0) -4% EBITDA(1) from continuing operations 17.3 18.2 (0.9) -5% Earnings from continuing operations before income taxes 16.2 17.1 (0.9) -5% Net earnings from continuing operations 11.7 11.9 (0.2) -2% EPS from continuing operations - basic $0.66 $0.66 0.00 0% Net earnings and comprehensive income 15.2 11.2 4.0 36% EPS basic $0.86 $0.62 0.24 39% Work-in-hand(2) 770.2 556.0 214.2 39% Backlog(3) $1,517.5 $1,422.1 95.4 7% ------------------------------------------------------------------------- ------------------------------------------------------------------------- ------------------------------------------------------------------------- Nine months ended September 30, 2009 -------------------------------------------------- ($ millions, except $ % per share amounts) 2009 2008 Change Change ------------------------------------------------------------------------- Contract revenue $427.3 $576.0 (148.7) -26% Contract income 67.2 66.2 1.0 2% EBITDA(1) from continuing operations 38.9 38.6 0.3 1% Earnings from continuing operations before income taxes 35.4 35.2 0.2 1% Net earnings from continuing operations 25.4 24.3 1.1 5% EPS from continuing operations - basic $1.44 $1.36 0.08 6% Net earnings and comprehensive income 27.1 25.2 1.9 8% EPS basic $1.54 $1.41 0.13 9% Work-in-hand(2) 770.2 556.0 214.2 39% Backlog(3) $1,517.5 $1,422.1 95.4 7% ------------------------------------------------------------------------- ------------------------------------------------------------------------- (1) (2) (3) Refer to the "Terminology" section for further details.
"The Corporation delivered strong third quarter results, particularly in our
Overall performance
For the third quarter of 2009 consolidated contract revenue was
Contract income decreased from
Indirect and administrative expenses amounted to
Earnings before interest, taxes, depreciation and amortization in the quarter were
Earnings from continuing operations before income taxes in Q3 2009 decreased to
New contract awards of
Churchill's total backlog, including work-in-hand as at
Discontinued Operations
In
Proceeds from the sale recognized in the financial statements in the third quarter were
The following tables reflect our earnings (loss) from discontinued operations relating to Triton and the assets held-for-sale for the three and nine month periods ended
------------------------------------------------------------------------- Three months ended Nine months ended September 30, September 30, ------------------------------------------------------------------------- 2009 2008 2009 2008 ------------------------------------------------------------------------- Contract revenue $ 4,779 $ 13,011 $ 27,954 $ 67,386 Contract income 445 128 1,308 5,714 Gain on sale of discontinued operations 4,185 - 4,185 - Net operating earnings (loss) from discontinued operations(1) (701) (697) (2,463) 902 Total net earnings (loss) $ 3,484 $ (697) $ 1,722 $ 902 ------------------------------------------------------------------------- ------------------------------------------------------------------------- (1) Net operating earnings (loss) from discontinued operations for the nine months ended September 30, 2009 includes income tax recovery of $1,030 (2008 - $427 expense)
RESULTS OF OPERATIONS
Buildings
For the three month period ended
Contract income in the third quarter of 2009 increased 22% to
Earnings before tax from the buildings segment were
Revenue for the nine months ended
Contract income for the nine months ended
Earnings before tax from the buildings segment for the nine month period ended
Industrial Insulation Contracting
Industrial Insulation Contracting operates under three business units - Fuller Austin, Northern Industrial Insulation and Lakehead Insulation - all providing insulation related contracting services for capital projects and maintenance work. Lakehead is a wholly-owned subsidiary of Fuller Austin.
Revenue for the three months ended
Contract income in the third quarter of 2009 was
Earnings before tax were
For the nine months ended
Contract income for the first nine month period ended
Earnings before tax increased 8% year-to-date to
Industrial Insulation Contracting had work-in-hand of
With a strong backlog of projects, our belief is that Insulation Holdings is positioned to perform favourably over the next 15 months. However, industrial project delays and owner requests for rate resets continue to create increased competition for new work and apply downward pressure on contract income margins.
Industrial Electrical Contracting
For the three months ended
Contract income was
Laird reported earnings before tax of
For the nine months ended
Contract income for the nine months ended
Laird reported earnings before tax of
Laird's reported Q2 2009 work-in-hand and backlog was
Laird has increased its focus on business development activities during this slowdown and is successfully partnering with Fuller Austin on bids, securing electrical infrastructure projects and pursuing industrial opportunities in the Saskatchewan marketplace.
Corporate and Other
During the third quarter, management received board approval to undertake a new enterprise resource planning ("ERP") system. The capital cost and the expenses associated with this implementation will be recognized over subsequent reporting periods into 2011.
In the third quarter of 2009, the Corporate and Other segment incurred a loss before tax of
CAPITAL RESOURCES AND LIQUIDITY
Cash and cash equivalents at
Cash flow provided from operating activities was
Investing activities resulted in a use of cash of
During the third quarter of 2009, cash used in financing activities associated with net repayments of long term debt amounted to
Cash generated from operations of
Investing activities resulted in a use of cash of
For the nine months ended
As at
Management believes that the Corporation has the capital resources and liquidity necessary to meet its commitments, support its operations and finance its growth strategies. In addition to the Corporation's cash and cash equivalents, ability to generate cash from operations, and its
The Corporation is a partner in three joint ventures. In each instance the Corporation has provided a joint and several guarantee, increasing the maximum potential exposure to the full value of the work remaining under the contract. Public-Private Partnership infrastructure projects may expose the Corporation to financial penalties or liquidated damages under the contract for project delays. P3 projects require security in the form of letters of credit to support the obligations that the Corporation undertakes on these projects.
Shareholders' equity was
Share Data
On
As at
The Corporation has an Employee Share Purchase Plan (the "ESPP") available to all full-time employees. At
OUTLOOK
Laird Electric continues to be challenged as the slowdown in oil sands projects experienced earlier in the year endures. Laird's current financial performance mirrors that of key client spending and emphasizes the importance of management's efforts to achieve market and product diversification. A number of high-profile corporate transactions and a rebound in commodity prices to the
With their performance in the first three quarters of 2009 behind them, Insulation Holdings is forecasting the second best year in their history with upside potential for a record year. Positive developments in our end-markets include identification of possible future contracting opportunities with clients in the oil sands and industrial market such as PCL, Horton CBI, Jacobs and others. Overall, project delays and cancellations in the industrial market have resulted in significant competition for available work. Significant levels of backlog and work-in-hand are expected to drive 2010 revenues higher albeit at lower margins. To maintain market share our industrial companies have had to adjust bidding practices accordingly.
During the third quarter,
CONSOLIDATED STATEMENTS OF EARNINGS, COMPREHENSIVE INCOME AND RETAINED EARNINGS (unaudited, $ thousands, except per share Three months ended Nine months ended amounts) September 30 September 30 ---------------------------------- ------------ ------------ ------------ 2009 2008 2009 2008 ---------------------------------- ------------ ------------ ------------ Contract revenue $ 161,453 $ 216,181 $ 427,301 $ 575,967 Contract costs 134,352 188,101 360,084 509,769 ---------------------------------- ------------ ------------ ------------ Contract income 27,101 28,080 67,217 66,198 Interest income 133 566 480 2,091 Sundry income 241 53 504 247 Indirect and admin- istrative expenses (10,146) (10,485) (29,315) (29,998) Depreciation and amortization (1,075) (1,044) (3,302) (2,951) Interest expense (30) (117) (210) (385) ---------------------------------- ------------ ------------ ------------ Earnings from continuing operations before income taxes 16,224 17,053 35,374 35,202 ---------------------------------- ------------ ------------ ------------ Income tax (expense) recovery Current income tax (7,215) (6,669) (29,854) (15,503) Future income tax 2,680 1,491 19,885 4,647 ---------------------------------- ------------ ------------ ------------ (4,535) (5,178) (9,969) (10,856) ---------------------------------- ------------ ------------ ------------ Net earnings from continuing operations and comprehensive income 11,689 11,875 25,405 24,346 Net earnings (loss) from discontinued operations 3,484 (697) 1,722 902 ---------------------------------- ------------ ------------ ------------ Net earnings and comprehensive income 15,173 11,178 27,127 25,248 Retained earnings, beginning of period 93,416 61,598 83,132 47,528 Adjustment arising from shares pur- chased under a normal course issuer bid - - (1,670) - ---------------------------------- ------------ ------------ ------------ Retained earnings, end of period $ 108,589 $ 72,776 $ 108,589 $ 72,776 ---------------------------------- ------------ ------------ ------------ ---------------------------------- ------------ ------------ ------------ Net earnings per common share: Basic from continuing operations $ 0.66 $ 0.66 $ 1.44 $ 1.36 Basic from discontinued operations $ 0.20 $ (0.04) $ 0.10 $ 0.05 Basic net earnings per share $ 0.86 $ 0.62 $ 1.54 $ 1.41 ---------------------------------- ------------ ------------ ------------ Diluted from continuing operations $ 0.65 $ 0.67 $ 1.42 $ 1.34 Diluted from discontinued operations $ 0.20 $ (0.04) $ 0.10 $ 0.05 Diluted net earnings per share $ 0.85 $ 0.63 $ 1.52 $ 1.39 ---------------------------------- ------------ ------------ ------------ ---------------------------------- ------------ ------------ ------------ Weighted average common shares: Basic 17,599,491 17,927,430 17,627,519 17,927,430 ---------------------------------- ------------ ------------ ------------ Diluted 17,943,969 18,127,052 17,856,303 18,119,649 ---------------------------------- ------------ ------------ ------------ ---------------------------------- ------------ ------------ ------------ CONSOLIDATED BALANCE SHEETS (unaudited, $ thousands) ------------------------------------------------------------ ------------ September 30, December 31, 2009 2008 ------------------------------------------------------------ ------------ ASSETS Current Assets Cash and cash equivalents $ 157,113 $ 100,768 Accounts receivable 170,043 119,248 Inventories and prepaid expenses 1,289 1,285 Costs in excess of billings 6,517 17,692 Income taxes recoverable 56 3,615 Future income tax assets 38,722 1,390 Assets held-for-sale - 24,528 ------------------------------------------------------------ ------------ 373,740 268,526 Long-term receivable 3,000 - Future income tax assets 936 568 Property and equipment 15,465 16,547 Assets held-for-sale 2,715 9,844 Goodwill and intangible assets 7,315 7,336 ------------------------------------------------------------ ------------ $ 403,171 $ 302,821 ------------------------------------------------------------ ------------ ------------------------------------------------------------ ------------ LIABILITIES Current Liabilities Accounts payable and accrued liabilities $ 129,966 $ 134,194 Contract advances and unearned income 98,064 41,088 Income taxes payable 20,665 2,462 Future income tax liabilities 19,386 3,177 Current portion of long-term debt 629 1,082 Liabilities related to assets held-for-sale 1,114 8,220 ------------------------------------------------------------ ------------ 269,824 190,223 Long-term debt 335 6,787 Future income tax liabilities 22 238 ------------------------------------------------------------ ------------ 270,181 197,248 SHAREHOLDERS' EQUITY Share capital 16,625 16,663 Shares repurchased under a normal course issuer bid, not cancelled - (956) Contributed surplus 7,776 6,734 Retained earnings 108,589 83,132 ------------------------------------------------------------ ------------ 132,990 105,573 ------------------------------------------------------------ ------------ $ 403,171 $ 302,821 ------------------------------------------------------------ ------------ ------------------------------------------------------------ ------------ CONSOLIDATED STATEMENTS OF CASH FLOW Three months ended Nine months ended (unaudited, $ thousands) September 30 September 30 ---------------------------------- ------------ ------------ ------------ 2009 2008 2009 2008 ---------------------------------- ------------ ------------ ------------ OPERATING ACTIVITIES Net earnings from continuing operations and comprehensive income $ 11,689 $ 11,875 $ 25,405 $ 24,346 Depreciation and amortization 1,075 1,044 3,302 2,951 Gain on disposal of equipment (22) (18) (40) (38) Share-based compensation 469 326 1,103 696 Future income taxes (2,680) (1,831) (19,885) (4,214) ---------------------------------- ------------ ------------ ------------ 10,531 11,396 9,885 23,741 Change in non-cash balances relating to operations 1,683 3,354 34,886 (39,111) ---------------------------------- ------------ ------------ ------------ 12,214 14,750 44,771 (15,370) ---------------------------------- ------------ ------------ ------------ INVESTING ACTIVITIES Proceeds on disposal of equipment 73 (4) 225 178 Additions to property and equipment (677) (1,595) (2,334) (4,966) ---------------------------------- ------------ ------------ ------------ (604) (1,599) (2,109) (4,788) ---------------------------------- ------------ ------------ ------------ FINANCING ACTIVITIES Proceeds under operating line of credit - - - 9,000 Repayments under operating line of credit - - - (9,000) Repayment of long-term debt (201) (424) (6,953) (1,478) Share purchase under a normal course issuer bid - - (970) - Issuance of common shares - 51 158 287 ---------------------------------- ------------ ------------ ------------ (201) (373) (7,765) (1,191) ---------------------------------- ------------ ------------ ------------ Cash provided by (used in) continuing operations 11,409 12,778 34,897 (21,349) Cash provided by (used in) discontinued operations 13,887 (10,262) 21,448 (8,331) ---------------------------------- ------------ ------------ ------------ Change in cash and cash equivalents during the period 25,296 2,516 56,345 (29,680) Cash and cash equivalents, beginning of period 131,817 75,909 100,768 108,105 ---------------------------------- ------------ ------------ ------------ Cash and cash equivalents, end of period $ 157,113 $ 78,425 $ 157,113 $ 78,425 ---------------------------------- ------------ ------------ ------------ ---------------------------------- ------------ ------------ ------------ SUPPLEMENTAL CASH FLOW INFORMATION ---------------------------------- ------------ ------------ ------------ Cash received (paid) during the year for: Interest $ 57 $ 461 $ 251 $ 1,716 Income taxes $ 931 $ (997) $ (7,511) $ (23,680) ---------------------------------- ------------ ------------ ------------ SELECTED FINANCIAL STATEMENT DISCLOSURE Three months ended September Industrial Industrial Corporate 30, 2009 Buildings Insulation Electric and Other Total ------------------------------------------------------------------------- Contract revenue $ 135,034 $ 17,680 $ 8,739 $ - $ 161,453 ------------------------------------------------------------------------- ------------------------------------------------------------------------- EBITDA(1) 16,255 3,111 836 (2,873) 17,329 Depreciation and amortization 540 91 263 181 1,075 Interest expense 2 2 5 21 30 ------------------------------------------------------------------------- Earnings (loss) from continuing operations before income taxes $ 15,713 $ 3,018 $ 568 $ (3,075) $ 16,224 ----------- Income taxes (4,535) ----------- Net earnings from continuing operations 11,689 Net earnings from discontinued operations $ 3,484 ----------- Net earnings and comprehensive income $ 15,173 ----------- ----------- Goodwill and intangible assets $ 7,315 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Assets in continuing operations $ 277,975 $ 23,803 $ 22,796 $ 75,882 $ 400,456 Assets held-for-sale 2,715 ----------- Total assets $ 403,171 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Capital ex- penditures $ 414 $ 197 $ 148 $ (82) $ 677 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Three months ended September Industrial Industrial Corporate 30, 2008 Buildings Insulation Electric and Other Total ------------------------------------------------------------------------- Contract revenue $ 158,385 $ 19,423 $ 38,373 $ - $ 216,181 ------------------------------------------------------------------------- ------------------------------------------------------------------------- EBITDA(1) 12,668 2,950 4,438 (1,842) 18,214 Depreciation and amortization 511 55 267 211 1,044 Interest expense 13 1 15 88 117 ------------------------------------------------------------------------- Earnings (loss) from continuing operations before income taxes $ 12,144 $ 2,894 $ 4,156 $ (2,141) $ 17,053 ----------- Income taxes (5,178) Net earnings from continuing operations 11,875 Net loss from discontinued operations $ (697) ----------- Net earnings and comprehensive income $ 11,178 ----------- ----------- Goodwill and intangible assets $ 7,357 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Assets in continuing operations $ 219,208 $ 24,320 $ 42,658 $ 15,283 $ 301,469 Assets held-for-sale 40,967 Total assets $ 342,436 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Capital expenditures $ 913 $ 200 $ 432 $ 281 $ 1,826 ------------------------------------------------------------------------- ------------------------------------------------------------------------- (1) Refer to the "Terminology" section for further details. Nine months ended September Industrial Industrial Corporate 30, 2009 Buildings Insulation Electric and Other Total ------------------------------------------------------------------------- Contract revenue $ 346,373 $ 52,554 $ 28,374 $ - $ 427,301 ------------------------------------------------------------------------- ------------------------------------------------------------------------- EBITDA(1) 37,789 7,156 1,877 (7,936) 38,886 Depreciation and amortization 1,651 243 803 605 3,302 Interest expense 34 4 28 144 210 ------------------------------------------------------------------------- Earnings (loss) from continuing operations before income taxes $ 36,104 $ 6,909 $ 1,046 $ (8,685) $ 35,374 ----------- Income taxes (9,969) ----------- Net earnings from continuing operations 25,405 ----------- Net earnings from discontinued operations $ 1,722 ----------- Net earnings and comprehensive income $ 27,127 ----------- ----------- Goodwill and intangible assets $ 7,315 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Assets in continuing operations $ 277,975 $ 23,803 $ 22,796 $ 75,882 $ 400,456 Assets held-for-sale 2,715 Total assets $ 403,171 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Capital expenditures $ 1,285 $ 393 $ 419 $ 283 $ 2,380 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Nine months ended September Industrial Industrial Corporate 30, 2008 Buildings Insulation Electric and Other Total ------------------------------------------------------------------------- Contract revenue $ 434,715 $ 53,027 $ 88,225 $ - $ 575,967 ------------------------------------------------------------------------- ------------------------------------------------------------------------- EBITDA(1) 28,530 6,521 8,325 (4,838) 38,538 Depreciation and amortization 1,460 163 754 574 2,951 Interest expense 42 1 55 287 385 ------------------------------------------------------------------------- Earnings (loss) from continuing operations before income taxes $ 27,028 $ 6,357 $ 7,516 $ (5,699) $ 35,202 ----------- Income taxes (10,856) ----------- Net earnings from continuing operations 24,346 Net earnings from discontinued operations 902 ----------- Net earnings and comprehensive income $ 25,248 ----------- ----------- Goodwill and intangible assets $ 7,357 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Assets in continuing operations $ 219,208 $ 24,320 $ 42,658 $ 15,283 $ 301,469 Assets held-for-sale 40,967 ----------- Total assets $ 342,436 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Capital expenditures $ 2,573 $ 262 $ 1,058 $ 1,266 $ 5,159 ------------------------------------------------------------------------- ------------------------------------------------------------------------- (1) Refer to the "Terminology" section for further details.
About The Churchill Corporation:
The Churchill Corporation provides building construction, industrial insulation and electrical contracting services throughout Western
TERMINOLOGY
Throughout this third quarter MD&A, management refers to certain terms when explaining its financial results that do not have any standardized meaning under Canadian GAAP as set out in the CICA Handbook. Specifically, the terms "contract income margin percentage", "work-in-hand", "backlog", "working capital", "EBITDA" and "book value per share" have been defined as:
Contract income margin percentage is the percentage derived by dividing contract income by contract revenue. Contract income is calculated by deducting all associated direct and indirect costs from contract revenue in the period.
Work-in-hand is the unexecuted portion of work that has been contractually awarded for construction to the Corporation. It includes an estimate of the revenue to be generated from maintenance contracts during the shorter of (a) twelve months, or (b) the remaining life of the contract.
Backlog means the total value of work including work-in-hand that has not yet been completed that; (a) is assessed by the Corporation as having high certainty of being performed by the Corporation or its subsidiaries by either the existence of a contract or work order specifying job scope, value and timing; or (b) has been awarded to the Corporation or its subsidiaries, as evidenced by an executed binding or non-binding letter of intent or agreement, describing the general job scope, value and timing of such work, and with the finalization of a formal contract respecting such work currently assessed by the Corporation as being reasonably assured. All projects within backlog are classified as active unless the Company has received written or verbal notification from the client that a job/project/contract has been delayed, at which point the backlog is classified as delayed backlog. The Corporation provides no assurance that additional clients will not choose to defer or cancel their projects in the future. There can be no assurance that the client will resume the project or that the delayed backlog will not be retendered. Jobs or projects subsequently retendered and not awarded to the Corporation or its subsidiaries would at that time be removed from the Corporation's backlog.
As at September 30, 2009 ($ millions ) Active Delayed Total Work-in-hand Backlog Backlog Backlog --------------------------------------------------------- $770.2 $630.3 $117.0 $1,517.5 --------------------------------------------------------- --------------------------------------------------------- As at December 31, 2008 ($ millions) Active Delayed Total Work-in-hand Backlog Backlog Backlog --------------------------------------------------------- $565.2 $794.8 $30.3 $1,390.3 --------------------------------------------------------- ---------------------------------------------------------
Working capital is current assets less current liabilities. Our calculation of working capital is provided in the table below:
------------------------------------------------------------------------- As at Sept. 30, December 31, ($ millions) 2009 2008 ------------------------------------------------------------------------- Current assets $373.7 $268.5 Less: Current liabilities 269.8 190.2 ------------------------------------------------------------------------- Working Capital $103.9 $78.3 -------------------------------------------------------------------------
EBITDA is a common financial measure widely used by investors to facilitate an "enterprise level" valuation of an entity. The Corporation follows the standardized definition of EBITDA. Standardized EBITDA represents an indication of the Corporation's capacity to generate income from operations before taking into account management's financing decisions and costs of consuming tangible and intangible capital assets, which vary according to their vintage, technological currency, and management's estimate of their useful life. Accordingly standardized EBITDA comprises revenues less operating cost before interest expense, capital asset amortization and impairment charges, and income taxes. This measure as reported by the Corporation may not be comparable to similar measures presented by other reporting issuers. The following is a reconciliation of net earnings to EBITDA from continuing operations for each of the periods presented in this MD&A in accordance with GAAP.
------------------------------------------------------------------------- Three months ended Six months ended ($ millions) Sept. 30, Sept. 30, ------------------- ------------------- 2009 2008 2009 2008 ------------------------------------------------------------------------- Net Earnings $11.7 $11.9 $25.4 $24.3 Add: Income Taxes 4.5 5.2 10.0 10.9 Depreciation & Amortization 1.1 1.0 3.3 3.0 Interest expense 0.0 0.1 0.2 0.4 ------------------------------------------------------------------------- EBITDA $17.3 $18.2 $38.9 $38.6 ------------------------------------------------------------------------- -------------------------------------------------------------------------
Book value per share is the value of shareholders' equity less value of preferred stock divided by basic shares outstanding at the end of the period.
FORWARD LOOKING STATEMENTS
Certain statements in this Third Quarter Press Release may constitute "forward-looking statements". Forward-looking statements include, without limitation, statements regarding the future financial position, business strategy, budgets, litigation, projected costs, capital expenditures, financial results, taxes, plans and objectives of the Corporation. Many of these statements can be identified by looking for words such as "believes," "expects," "may," "will," "intends," "anticipates," "estimates," "continues," or the negative thereof, or other variations thereon. Although management of Churchill believes its expectations regarding future performance of the Corporation are based on reasonable assumptions and currently available competitive, financial and economic data, market conditions and operating plans, it can give no assurance its expectations will be achieved. The Corporation cautions that, by their nature, forward-looking statements, involve risks, and uncertainties and that its actual actions, and/or results could differ materially from those expressed or implied in such forward-looking statements, and that the aforementioned risks, uncertainties and actions could affect the extent to which a particular projection materializes. The Corporation assumes no obligation to update the forward-looking statements should circumstances or the Corporation's management's estimates or opinions change.
%SEDAR: 00003704E
For further information: James C. Houck, B.Sc., MBA, President & Chief Executive Officer, The Churchill Corporation, (403) 685-7777; www.churchillcorporation.com; or Andrew Apedoe, Vice President Investor Relations & Secretary, The Churchill Corporation, (403) 685-7775, Email: [email protected]; www.churchillcorporation.com
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