AutoCanada has responded to its challenges with an eye to cost management, a renegotiated credit line to give it more breathing room, and an intent to continue acquiring six to eight new dealerships a yearGetty Images/iStockphoto
Our roundup of Canadian small-caps of between $100-million and $2.5-billion in market capitalization making news and on the move today.
AutoCanada Inc. (ACQ-T) says it's reducing capital expenditures in 2016 and cutting costs to prepare for potential acquisition opportunities in the current market downturn.
The company, which operates franchised auto dealerships across Canada, said it will cut capital expenditures by $34 million compared to what it reported in November.
Back then, the company said in its management and discussion analysis that its capital plan for 2016 was $83.3 million for 2016.
AutoCanada also said it's undergoing a "cost reduction plan" to save $15 million annually.
"We continue to closely monitor the economic environment in our key markets and the automotive environment in the Canadian economy generally, and Alberta in particular, suggests that fiscal 2016 will be more challenging than the previous year from a retail perspective," stated CEO Tom Orysiuk in a release late Friday.
"The increase in unemployment levels and erosion of consumer confidence will likely continue throughout the year. One positive outcome of this challenging environment is the likelihood that good acquisition opportunities will come available which bring long-term shareholder value. To ensure that we have the ability to take advantage of these potential opportunities, we have embarked on a number of initiatives including the reduction of capital expenditures …. as well as a cost reduction plan," he added.
He said all but two dealership were profitable in 2015 and some in Western Canadian "were at significantly reduced levels as compared to previous years,"
"Our plan for 2016 is prudent management of the business in a manner that maintains a strong and conservatively managed balance sheet, while meeting all of our capital requirements and providing the necessary capital to take advantage of buying opportunities."
The company maintained its quarterly dividend at 25 cents per share.
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The Intertain Group Ltd (IT-T) announced Monday that it's looking for a new chief executive, citing a change in corporate direction.
"John Kennedy FitzGerald, Intertain's chief executive officer, has advised the board of his belief that the core business assets for Intertain's continued growth and prosperity are now in place," the company stated. "In that regard, Mr. FitzGerald's view is that the central focus of the chief executive officer will change from asset acquisition to operational excellence and that the Board should pursue a process for the recruitment of a new chief executive officer with this demonstrated skill competency."
The company said its board agrees and will start looking for " new operationally focused" CEO.
It also plans to increase its board by one or two more directors as part of a board renewal process.
The announcement came at the same time the company said an independent committee review found the recent accusations from a short seller about the quality and financial performance of the company's underlying businesses are "grossly erroneous."
Intertain also said its chief financial officer Keith Laslop, is taking a new senior operational management position at Intertain Bahamas.
"Over the coming months, Intertain expects to recruit additional experienced personnel to join the management of Intertain Bahamas," the company stated.
The company also announced the permanent cancellation of its Management Incentive Plan.
"As part of that cancellation, Messrs. FitzGerald and Laslop have voluntarily agreed to relinquish any right to any future payments under the Management Incentive Plan, including those related to the prior acquisitions completed by Intertain. Further, Messrs. FitzGerald and Laslop have also voluntarily agreed to reduce their severance entitlements, including in connection with any change of control, by 25%. These accommodations will materially reduce Intertain's future payment obligations to the benefit of all Intertain shareholders," the company said.
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Redknee Solutions Inc. (RKN-T) says it has signed new multi-year expansion of services contract with Turk Telekom.
"With signing of this new contract, Turk Telekom will further strengthen its relationship with Redknee and leverage its real-time monetization and subscriber management software to support the impending launch of new LTE services in the coming months," the company said in a release.
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Richmont Mines Inc. (RIC-T, RIC-N) reported a loss of 7 cents per-share in the fourth quarter, despite higher revenues.
The loss per share was compared to earnings of 2 cents per share for the same quarter a year earlier.
Revenue from mining operations was $31.9 million, above analysts' expectations of $29.3 million and compared to $29.6 million a year earlier.
Operating cash flow amounted to 12 cents per share in the quarter, up from 7 cents per share a year earlier.
The company said it spent about $14.5 million in project development costs in the fourth quarter.
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Second Cup Ltd. ended last year with its first profitable quarter since 2012.
The chain of coffee shops had $94,000 of net income in the three months ended Dec. 26, or one cent per share, compared with a loss of $469,000 or four cents per share in the fourth quarter a year earlier.
Same-store sales for locations open at least a year were up two per cent — the first time Second Cup has had positive same-store sales in 14 quarters going back to early 2013.
Second Cup (SCU-T) has been working to revitalize its brand and franchise network amid stiff competition from other coffee companies including Starbucks and restaurant chains including Tim Hortons and McDonald's.
The company's full-year loss was reduced to $1.153 million or nine cents per share, an improvement from the $27 million loss or $2.66 per share in 2014.
System-wide sales by the cafes fell to $46.9 million in the fourth quarter, from $49.4 million a year earlier when Second Cup had 37 more locations in its network.
Revenue for the quarter rose to $9.6 million from $8.4 million.
At the end of 2015, Second Cup had 310 cafes, including 32 owned by the parent company.
With files from The Canadian Press