Acasta Enterprises Inc. (TSX:AEF and AEF.WT)
(“Acasta” or the “Company”) today announced its
consolidated financial results for the three and nine months ended
September 30, 2017 and provided the following corporate update.
Financial Highlights1
- Net loss was $9.7 million
or $0.11 per share.2
- Adjusted net loss was $10.8
million, or $0.12 per share.3
- EBITDA was $21.7 million.3
- Adjusted EBITDA was $20.7
million.3
Corporate Highlights
- Strong sales momentum in the Consumer
Products segment on a constant currency basis.
- Stellwagen continued on its path to
becoming an aviation asset manager with the launch of the Stelloan
Fund, a senior secured lending vehicle.
- Three Stelloan transactions were closed
during the quarter in the aggregate amount of U.S.$100
million.
- The Company continued to build out its
private equity team with the addition of experienced
professionals.
“Revenue in our Consumer Products segment was up slightly on an
absolute basis over the second quarter’s results and up
approximately 8% on a constant currency basis” commented Anthony
Melman. “Further, we were pleased that Stellwagen continued to make
good progress along its path to becoming an aviation asset manager
with the execution of its first fund based senior loan
transactions. With the recent addition of David Butler as COO of
Stellwagen, the acquisition of ECN Commercial Aviation completed in
the second quarter and certain other recent executive changes, Doug
Brennan has now established a strong management team to move the
business forward. Acasta’s focus over the past nine months has been
to ensure we have a strong foundation for our consumer products
platform and also for our commercial aircraft asset management
business. With respect to the Consumer Products segment, this
effort includes M&A transactions (potential acquisitions and
dispositions), strategic partnerships with private equity investors
and major industry players. We are very focused on determining the
most optimal path forward given the nature and scope of these
strategic options that are available to us.”
1 Until January 3, 2017, Acasta was a special purpose
acquisition corporation, only becoming a long-term investment and
private equity asset management firm upon the closing of its
Qualifying Acquisition. As a result, there are no meaningful
comparatives from the previous year. This will be the case for all
of the quarters in fiscal 2017.
2 Calculated excluding shares subject to the amended and
restated forfeiture conditions and transfer restrictions agreement
and undertaking. For further information, please see the section in
the MD&A entitled “Qualifying Acquisition.”
3 Please see the section entitled “Non-IFRS Financial
Performance Measures” under the Advisories section of this news
release.
Operating Results
Acasta’s operating companies have been presented and aggregated,
where appropriate, into three segments for reporting purposes:
Consumer Products, Aviation and Other.
The Consumer Products segment recorded a net loss and an
adjusted net loss of $1.7 million and $0.3 million, respectively,
for the third quarter of 2017. EBITDA and adjusted EBITDA were $6.7
million and $8.2 million, respectively.
Net loss for the Aviation segment was $2.5 million for the third
quarter of 2017. EBITDA and adjusted EBITDA were $15.8 million and
$15.9 million, respectively.
On a consolidated basis, Acasta’s net loss for the third quarter
of 2017 was $9.7 million or $0.11 per share and the Company
reported an adjusted net loss of $10.8 million or $0.12 per share.
The Company achieved EBITDA and adjusted EBITDA of $21.7 million
and $20.7 million, respectively. The Consumer Products segment
experienced compressed margins during the quarter due to several
non-recurring factors, including adverse foreign exchange, higher
launch costs associated with new programs at Apollo, and hurricane
related input price and freight price increases.
Our Management’s Discussion and Analysis (“MD&A”)
will provide additional details and will describe the results from
each of the reportable segments in our portfolio.
Acasta’s Unaudited Consolidated Interim Financial Statements of
Financial Position and MD&A for the third quarter fiscal 2017
will be available on the Company’s website at
www.acastaenterprises.com or on SEDAR at www.sedar.com on Friday,
November 10, 2017.
Third Quarter 2017 Conference Call Details:
As previously disclosed, Acasta’s senior management will host a
conference call on Friday, November 10, 2017 at 9:00
a.m. (Toronto time) to discuss the Company’s financial and
operating results.
Analysts and investors are invited to participate by using the
following dial-in numbers:
Participant Number (Local): 1-416-340-2217
Participant Number (Canada/US): 1-800-806-5484 Passcode: 6690724#
To ensure your participation, please join approximately five
minutes prior to the scheduled start of the conference call.
A replay of the conference call will be available until May 27,
2018 and can be accessed by using the following dial-in
numbers:
Toll Free Dial-in Number: 1-800-408-3053 Local
Dial-in Number: 1-905-694-9451 Passcode: 4084701#
Investor Day
Acasta announced today that the Investor Day, previously
scheduled for November 17, 2017 has been postponed until such time
as the Company has determined the most optimal path forward given
the strategic alternatives being evaluated. The new date will be
announced as soon as practicable.
About Acasta Enterprises Inc.
Acasta Enterprises Inc. is a Canadian public company that
acquires businesses with exceptional potential for value creation
through strategic and transformational initiatives. As a proactive
private equity manager, Acasta partners with the senior management
teams of its acquired businesses, empowering them to pursue value
creating trajectories.
Advisories:
Cautionary Note Concerning Forward Looking Statements
This news release may include 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 may include, but are not limited to, statements
about anticipated future events or results, including comments with
respect to the Company’s objectives and priorities for 2017 and
beyond, strategies or further actions with respect to the Company,
including the acquisition by the Company of one or more businesses
or assets, and the Company’s future business operations, 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 as at
the periods indicated and may not be appropriate for other
purposes.
A number of risks, uncertainties and other factors may cause
actual 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, 2016, a copy of which is available on the SEDAR website at
www.sedar.com under the Company’s profile.
This news release contains certain financial measures that are
not recognized under IFRS. These measures are described in greater
detail in the section entitled “Non-IFRS Financial Performance
Measures” below.
Forward looking statements contained in this news release are
not guarantees of future 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 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
Adjusted net income (loss), EBITDA and adjusted EBITDA are not
recognized measures under International Financial Reporting
Standards (“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
financial 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 generally accepted 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 financial 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 (the calculation for adjusted net income (loss)) and then
further adjusting for finance costs, current and deferred income
tax, depreciation and amortization expenses. 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.
Currency
All financial information is presented in Canadian dollars,
except as otherwise indicated.
ACASTA ENTERPRISES INC.
NON-IFRS FINANCIAL PERFORMANCE MEASURES
RECONCILIATION
(In thousands of Canadian dollars,
except share and per share amounts)
Three Months Ended September 30, 2017 Three
MonthsEndedSeptember 30,2016 Reportable
Segments NON-IFRS FINANCIAL PERFORMANCE MEASURES
ConsumerProducts Aviation Other
AcastaConsolidated AcastaConsolidated
Net income (loss) (1,734) (2,546)
(5,459) (9,739) (5,584) Net loss (gain) on
foreign exchange transactions 1,446 37 (2,524) (1,041) —
Adjusted net income (loss) (288) (2,509)
(7,983) (10,780) (5,584) Net income (loss)
per share — basic (0.11) (0.60) Net income
(loss) per share — diluted (0.11) (0.60)
Adjusted net income (loss) per share — basic (0.12)
(0.60) Adjusted net income (loss) per share — diluted
(0.12) (0.60) Weighted average number of Class B
Shares outstanding — basic 90,494,283 9,349,648
Weighted average number of Class B Shares outstanding —
diluted 90,507,945 9,349,648 Finance costs 1,182
6,393 4,607 12,182 — Current income tax expense 900 289 — 1,189 —
Deferred income tax recovery (1,450) (931) — (2,381) — Depreciation
of property, plant and equipment and amortization of intangible
assets 7,827 12,622 — 20,449 —
EBITDA 6,725
15,827 (852) 21,700 (5,584) Adjusted
EBITDA 8,171 15,864 (3,376) 20,659
(5,584) Nine
Months Ended September 30, 2017 Nine
MonthsEndedSeptember 30,2016 Reportable
Segments NON-IFRS FINANCIAL PERFORMANCE
MEASURES ConsumerProducts
Aviation Other
AcastaConsolidated AcastaConsolidated
Net income (loss) 3,584 1,528 (11,895)
(6,783) (12,747) Gain on redemption of Class A Shares
— — (3,699) (3,699) — Net gain on disposal of property, plant and
equipment — (206) — (206) — Qualifying Acquisition transaction
costs — — 4,627 4,627 — ECN Acquisition transaction costs — 628 —
628 — Costs to prepare aircraft for sale — 706 — 706 — Net (gain)
loss on foreign exchange transactions 510 38 (2,933) (2,385) —
Amortization of inventory fair value increment 1,946 — — 1,946 —
Other non-recurring costs 359 — — 359 —
Adjusted net income
(loss) 6,399 2,694 (13,900) (4,807)
(12,747) Net income (loss) per share — basic
(0.08) (1.36) Net income (loss) per share —
diluted (0.08) (1.36) Adjusted net income
(loss) per share — basic (0.05) (1.36)
Adjusted net income (loss) per share — diluted (0.05)
(1.36) Weighted average number of Class B Shares
outstanding — basic 88,214,511 9,349,648
Weighted average number of Class B Shares outstanding —
diluted 88,219,082 9,349,648 Finance costs 4,410
18,736 5,733 28,879 — Current income tax expense 6,563 2,154 —
8,717 — Deferred income tax recovery (5,227) (2,488) — (7,715) —
Depreciation of property, plant and equipment and amortization of
intangible assets 23,042 39,879 — 62,921 —
EBITDA
32,372 59,809 (6,162) 86,019
(12,747) Adjusted EBITDA 35,187 60,975
(8,167) 87,995 (12,747)
ACASTA ENTERPRISES INC.
UNAUDITED CONDENSED CONSOLIDATED
INTERIM STATEMENTS OF FINANCIAL POSITION
(In thousands of Canadian
dollars)
As atSeptember 30,2017 As
atDecember 31,2016 Current assets Cash and cash
equivalents $18,318 $187 Trade and other receivables 48,758 597
Inventories 37,609 — Prepaid expenses and deposits 9,053 25
Restricted cash — 405,002 Current portion of loans receivable 8,579
— Other current assets 6,511 — $128,828 $405,811 Non-current assets
Property, plant and equipment $618,285 $— Intangible assets 308,911
— Goodwill 595,572 — Long-term loans receivable 146,293 — Other
non-current assets 10,433 710 $1,679,494 $710
Total assets
$1,808,322 $406,521 Liabilities Current
liabilities Accounts payable and accrued liabilities $34,288 $8,779
Current portion of long-term debt 55,604 — Class A Restricted
Voting Shares subject to redemption — 409,342 Income taxes payable
7,786 — Other current liabilities 42,458 13,504 $140,136 $431,625
Non-current liabilities Long-term debt $793,790 $— Deferred tax
liabilities 40,514 — Other non-current liabilities 59,983 —
$894,287 $—
Total liabilities $1,034,423
$431,625 Shareholders’ equity Share capital $849,383
$14,995 Contributed surplus 150 — Warrants 3,939 3,939 Deficit
(50,821) (44,038) Accumulated other comprehensive loss (28,752) —
Total shareholders’ equity $773,899 $(25,104)
Total liabilities and shareholders’ equity $1,808,322
$406,521
ACASTA ENTERPRISES INC.
UNAUDITED CONDENSED CONSOLIDATED
INTERIM STATEMENTS
OF INCOME (LOSS) AND COMPREHENSIVE
INCOME (LOSS)
(In thousands of Canadian dollars,
except share and per share amounts)
Three months ended September 30, Nine months
endedSeptember 30, 2017 2016
2017 2016 Revenue $91,233 $488 $274,806 $1,404
Cost of revenue, expenses, and other items Cost of revenue
50,045 — 138,388 — Selling, general and administrative expense
43,647 1,242 122,284 2,076 Finance costs 12,182 — 28,879 — Net
unrealized loss (gain) on change in fair value of financial
liabilities — 4,830 (236) 12,075 Net gain on foreign exchange
transactions (1,041) — (2,385) — Other income, net (2,669) —
(6,343) —
Loss before income tax $(10,931)
$(5,584) $(5,781) $(12,747) Current income tax
expense 1,189 — 8,717 — Deferred income tax recovery (2,381) —
(7,715) —
Net loss $(9,739) $(5,584)
$(6,783) $(12,747) Comprehensive loss Items
that may be subsequently reclassified to net income (loss)
Foreign currency translation $(16,100) $— $(27,775) $— Net movement
in cash flow hedges, net of tax 1,484 — (977) —
Other
comprehensive loss $(14,616) $— $(28,752)
$— Total comprehensive loss $(24,355)
$(5,584) $(35,535) $(12,747) Net loss per
share Basic $(0.11) $(0.60) $(0.08) $(1.36) Diluted $(0.11)
$(0.60) $(0.08) $(1.36)
Other comprehensive loss per share
Basic $(0.16) $— $(0.33) $— Diluted $(0.16) $— $(0.33) $—
Weighted average number of Class B Shares outstanding Basic
90,494,283 9,349,648 88,214,511 9,349,648 Diluted 90,507,945
9,349,648 88,219,082 9,349,648
ACASTA ENTERPRISES INC.
UNAUDITED CONDENSED CONSOLIDATED
INTERIM STATEMENTS OF CASH FLOWS
(In thousands of Canadian
dollars)
Nine monthsendedSeptember
30,2017 Nine monthsendedSeptember
30,2016 Operating activities Net loss $(6,783)
$(12,747) Adjustments for non-cash items and other adjustments:
Share-based compensation 150 — Depreciation of property, plant and
equipment 19,417 — Amortization of intangible assets 43,504 — Gain
on redemption of Class A Restricted Voting Shares (3,699) — Gain on
disposal of property, plant and equipment (211) — Net unrealized
(gain) loss on change in fair value of financial liabilities (236)
12,075 Finance costs (income) 28,879 (1,404) Current income tax
expense 8,717 — Deferred income tax recovery (7,715) — Net gain on
foreign exchange transactions (2,385) — Amortization of inventory
fair value increment 3,355 — Changes in non-cash working capital
(17,207) 1,091 Net cash flows provided by (used in) operating
activities $65,786 $(985) Income taxes paid (2,671) —
Cash
provided by (used in) operating activities $63,115 $(985)
Investing activities Additions to loans receivable
$(158,135) $— Additions to property, plant and equipment (309,000)
— Additions to intangible assets (68,464) — Proceeds on disposal of
property, plant and equipment 53,979 — Interest received on
restricted cash held in escrow — 1,409 Proceeds on maturity of
restricted cash held in escrow — 1,614,437 Investment in restricted
cash and cash equivalents held in escrow — (1,615,846) Proceeds
from restricted cash to finance acquisitions 106,240 — Acquisition
of Apollo (161,545) — Acquisition of JemPak (55,448) — Acquisition
of Stellwagen (84,946) —
Cash used in investing activities
$(677,319) $—
Financing activities Proceeds from long-term
debt and credit facilities $592,460 $— Repayment of long-term debt
(77,114) — Payment of debt issuance costs (20,542) — 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 (23,776) —
Cash provided by financing activities $629,443 $—
Net
increase (decrease) in cash and cash equivalents during the
period $15,239 $(985) Foreign exchange impact on cash and cash
equivalents held in foreign currencies 2,892 — Cash and cash
equivalents, beginning of period 187 3,096
Cash and cash
equivalents, end of period $18,318 $2,111
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version on businesswire.com: http://www.businesswire.com/news/home/20171109006781/en/
Acasta Enterprises Inc.Ian Kidson, 1-647-725-6707Chief Financial
Officer and Chief Operating Officerwww.acastaenterprises.com