Skip to main content
stocks

A 2006 file photo of Dorel chief executive Martin Schwartz.CHRISTINNE MUSCHI/Reuters

Our roundup of Canadian small-caps making news and on the move today.

Ottawa software firm Kinaxis Inc. (KXS-T) has continued its earnings winning streak since its IPO 11 months ago with the release of better-than-expected first quarter earnings.

The company, whose technology enables large multinational companies to more efficiently manage their dense supply chains, said late Wednesday it earned an adjusted profit of 13 cents per share on revenue of $19.7 million in the quarter. Those figures, as well as its adjusted operating profit, edged ahead of analyst expectations. "This was a solid quarter," BMO Nesbitt Burns analyst Thanos Moschopoulos said in a  note.

Particularly encouraging was the company's comments on recurring subscription revenues earned from ongoing clients. Kinaxis clocked in a 36 per cent year over year gain, booking $15.4 million in subscription revenue, and said it forecasts a 26 per cent to 28 per cent bump this year over last year's $51.1 million in subscription revenues. Both the quarterly gain and outlook exceeded analyst expectations and "suggest stronger momentum," RBC analyst Paul Treiber said in a note.

Kinaxis, whose stock has more than doubled since its IPO at $13 last June and has now reported four solid quarterly reports as a public company, nudged up slightly in early trading Thursday.

=====

Resolute Forest Products Inc. (RFP-T) reported its preliminary first-quarter financial results, which included a net loss of $33-million, or $0.35 per share, compared to a net loss of $50-million, or $0.53 per share, in the first quarter of last year. Sales for the quarter declined by 9-per-cent year over year to $920-million. The company said the results were affected by lower prices in the market pulp and wood products markets, and "intensifying challenges" in the global newsprint business. "Even as market prices have retreated from recent highs this quarter, we remain bullish on our lumber and pulp businesses," said Richard Garneau, Resolute's CEO. "We're confident that we will add significant value with our investments to build capacity."

=====

Golden Star Resources Ltd. (GSC-T) reported its first-quarter financial results, while announcing a $150-million (U.S.) financing to develop its gold mines in Ghana. Golden Star struck an agreement with RGLD Gold AG, a wholly owned subsidiary of Royal Gold Inc., which includes a $130-million stream transaction and a$20-million term loan to develop the Wassa and Prestea mines, which are expected to be in production by late 2016. Under the deal, Golden Star will deliver to Royal Gold 8.5 per cent of all gold produced until 185,000 ounces have been delivered, 5 per cent until an additional 22,500 ounces have been delivered and 3 per cent thereafter. Royal Gold will also pay Golden Star 20 per cent of the gold spot price until 207,500 ounces have been delivered and 30 per cent thereafter. Meanwhile, Golden Star's first quarter saw revenue fall to $76.5-million from $86.6-million one year prior, while net loss attributable to shareholders decreased to $13.1-million from $48.2-million over the same time. "Mining and processing operations in the first quarter were largely in line with our mine plans," said Sam Coetzer, President and CEO of Golden Star. "Now that we have secured the necessary funding to advance these projects, we look forward to the lower operating cost profile that they are expected to deliver."

=====

KP Tissue Inc. (KPT-T) realized a 13.1-per-cent increase in revenue in its first quarter over the prior year, while EBITDA rose by 28.8-per-cent, the company said. For the 13-week period ended March 29, the company posted revenue of $265.4-million and EBITDA of $31.1-million. "While our Canadian consumer brands continue to perform well from a market share point of view, the market remains competitive and price sensitive despite high commodity costs," the company said. "As a result, we are implementing further cost reduction initiatives in 2015 expected to reduce annual expenses by $5-million starting in the first quarter of 2015."

=====

Bankers Petroleum Ltd. (BNK-T) posted a 96-per-cent drop in net income in the first quarter, while revenues declined by half. For the three months ended March 31, the company realized revenues of $72.4-million (U.S.) and net income of $879,000, down from $24.9-million in the same quarter last year. The company said it plans to issue a second-quarter operational update and host a conference call on July 14. "The company continues to execute on its three part strategy to deliver reliable and repeatable low cost horizontal wells through the primary drilling program, expanding its product margin through surface-level improvements and accelerate the enhanced oil recovery program," Bankers said.

=====

Dorel Industries Inc. (DII.B-T) posted first-quarter net income of $11.6-million (U.S.) or $0.36 per share, compared to $24.8-million or $0.77 per share a year earlier. The company attributed most of the decrease in profits to negative effect of foreign exchange. "As expected, the negative impact of the increased value of the U.S. dollar against practically all of our local currencies severely depressed earnings in the first quarter of 2015," said Martin Schwartz, Dorel's CEO. "Although rates have stabilized somewhat over the past month or so, we have not seen any of the currencies in our markets significantly increase in value." The company derives almost half of its revenue in markets outside of the U.S. The currency effect offset what the company said was strong performance in its home furnishings, sports, and juvenile segment. Revenue in the quarter increased by 2.7-per-cent to $665.5-million. The company reported that price increases have been implemented in some markets to try to mitigate the foreign exchange losses. "We anticipate this will benefit the second quarter, but the significant benefit will be in the second half," Mr. Schwartz said.

=====

Automodular Corp. (AM-T) reported a first-quarter net loss of $1.6-million or $0.08 per share, compared to net earnings of $3.2-million or $0.16 per share in the same period last year. The company noted that it ceased operations at its Oakville facilities in December 2014 and no longer has active operations. The company said its interim consolidated financial statements will be filed on or about May 12.

=====

Patient Home Monitoring Corp. (PHM-X) said it has executed a final binding purchase agreement to acquire a Kentucky-based business offering home-based medical equipment and services for patients with chronic pulmonary conditions. Patient Home Monitoring said it will acquire Legacy Oxygen for a mix of cash and stock. It will pay $1.65-million in cash and issue about 1.7 million shares, or less than 1 per cent of PHM's total outstanding common shares. This acquisition is expected to increase PHM's revenues by more than 5 per cent and EBITDA by more than 5 per cent before any organic growth from potential cross-selling opportunities. Legacy Oxygen has trailing 12-month annual revenues of approximately $3.5-million and adjusted EBITDA of about $750,000. "Acquiring small regional businesses continues to augment our acquisition and growth strategy," said Michael Dalsin, PHM's chairman. "With this acquisition, PHM has closed three acquisition targets in this calendar year with annualized revenue exceeding $17-million. We are working toward closing the acquisition targets under letters of intent and continue to build the acquisition pipeline for both large and small deals."

=====

Morguard North American Residential REIT (MRG.UN-T) reported its first-quarter financial results, which showed a year-over-year increase of 25 per cent in basic adjusted funds from operations. Adjusted net operating income for the three months ended March 31, increased by $2.7-million, or 12.3 per cent, to $24.9-million. The company said the increase was due to higher rental revenue due to rental increases in Canada and U.S., as well as the change in foreign exchange rate.

=====

Cott Corp. (BCB-T) reported its first-quarter financial results, which included large increases to revenue and adjusted EBITDA as a result of recent acquisitions. Revenue for the three months ended April 4, increased by 49 per cent over the prior year to $710-million. Excluding the effects of foreign exchange and the acquisition of DS Services, revenue rose by 2.3 per cent in the quarter as a result of the addition of the Aimia Foods business in the U.K., as well as increased volumes. Adjusted net loss for the quarter was $8-million, or $0.08 per diluted share, which was quadruple the loss posted one year ago. The increase was due primarily to an increase in interest expense as a result of additional debt related to the DS Services acquisition, as well as additional depreciation and amortization expenses from the deal. "I am pleased to say both DS Services and our traditional business performed ahead of expectations as we saw increased volumes, improved revenue growth, strong gross margins, and adjusted EBITDA growth of 13 per cent in our DS Services business and 5 per cent in our traditional business," said Jerry Fowden, Cott's CEO. "We believe these positive trends, alongside the successful integration and capture of targeted synergies at DS Services, better position Cott to grow in line with the overall liquid refreshment beverage industry."

=====

Black Diamond Group Ltd. (BDI-T) reported a 20-per-cent decline in revenues and a 50-per-cent drop in profits in the first quarter amid the energy sector slowdown. The company said that while oil sands activity continues to be slow, gas-rich projects offer some promise. Utilization at the company's camps bottomed in November and rebounded modestly to 74 per cent as the first phase of the Dawson Creek, B.C., camp started earning rent in January. The second phase started earning rent in April. Revenues for the quarter were $99.6-million, compared to $124.6-million one year earlier, while profits fell to $9.0-million from $17.9-million over the same time. "We remain confident that with the core run rate of Black Diamond's business, current contract coverage, and diverse range of marketable assets, we will be able to meet all of our financial obligations while continuing to pay a dividend which we have increased twice since the fourth quarter of 2013," the company said. "While we are optimistic that liquefied natural gas represents a positive opportunity for Black Diamond in 2015 and 2016, it is prudent to highlight the current uncertainty in the western Canadian oil and gas sector relative to future realized commodity pricing and the future of capital programs that are predicated on these economics."

Follow related authors and topics

Authors and topics you follow will be added to your personal news feed in Following.

Interact with The Globe