The Globe and Mail

Go to the Globe and Mail homepage

Jump to main navigationJump to main content

Globe Investor

News Sources

Take control of your investments with the latest investing news and analysis

Press release from Marketwire

Hartco Announces 2010 First Quarter Results

Friday, May 14, 2010

Hartco Announces 2010 First Quarter Results09:55 EDT Friday, May 14, 2010MONTREAL, QUEBEC--(Marketwire - May 14, 2010) - Hartco Inc. (TSX:HCI) today announced financial results for the first quarter ended March 31, 2010. Hartco posted consolidated revenues of $122.6 million for the first quarter, compared to $115.3 million the previous year, and net earnings of $1.9 million, or $0.14 per share on a diluted basis, compared to earnings of $0.4 million, or $0.03 per share, for the corresponding quarter in 2009.First quarter revenues increased by $7.3 million or 6.4% compared to the same period last year. Revenues from the Commercial segment increased by 7.5% while the Franchising and Distribution segment revenues increased by 1.3%. Consolidated EBITDA was $3.4 million for the recent quarter, compared to $1.1 million for the same quarter in 2009, an increase of $2.4 million, or 227.5%."Our first quarter results reflect improving economic conditions and increased demand for IT solutions from public and private sector organizations across most regions of Canada," said Pat Waid, Hartco's President and Chief Operating Officer. "The merger of Metafore and Microserv at the beginning of the year enabled Hartco to realize immediate operating improvements and synergies across its operating divisions."Financial PositionIn the first quarter of 2010, Hartco generated free cash flow of $2.0 million, compared to $5.1 million in the same period in 2009 contributing to a cash position of $23.9 million at the end of the quarter. Hartco's policy, following the conversion from an income trust in April 2009, is to preserve cash to support future growth.Hartco Outlook"We expect business and IT related investments to improve throughout 2010, although the continued erosion of average selling prices and profit margins, and changing IT consumption models are expected to place pressure on Hartco's revenues and margins over the coming quarters," said Pat Waid. "The company's strong balance sheet will give us the opportunity to invest in growth strategies to strengthen our position amongst leading Canadian IT solution providers."Detailed Financial InformationDetailed financial information pertaining to Hartco's first quarter results can be accessed at www.sedar.com.About Hartco Inc.Hartco Inc. (TSX:HCI) has been a leader in the Canadian information technology business for more than thirty years. Through its operating divisions, which together include more than 60 locations across Canada, Hartco Inc. delivers information technology solutions to private and public sector organizations of every size. For more information, please visit www.hartco.com.Forward-Looking StatementsThis news release contains forward-looking information. Except for historical information contained herein, the statements in this document are forward-looking. Forward-looking statements involve known and unknown risks and uncertainties, which may cause actual results in future periods to differ materially from forecasted results. Those risks include, among others, changes in customer demand for information technology products or services, changes in supplier pricing actions or terms, customer orders, pricing actions by competitors, changes in laws and regulations and general changes in economic conditions. Risks that could cause our results to differ materially from our expectations are discussed in our Annual Management's Discussion & Analysis. FINANCIAL HIGHLIGHTS (In thousands of dollars, except per share amounts) Quarter ended March 31 2010 2009 -------------------------------------------------------------------------- -------------------------------------------------------------------------- $ $ Revenues 122,629 115,260 EBITDA 1) 3,448 1,054 Net earnings 1,881 355 Diluted Earnings per share 2) 0.14 0.03 Adjusted Free Cash Flow 3) 2,012 5,089 Cash position 23,902 9,867 1) Earnings before financial expenses, income taxes, depreciation and amortization, share of results of equity investments and non- controlling interest. EBITDA is a non-GAAP measure as defined in the MD&A. 2) Diluted earnings per share refer to diluted earnings per share or earnings per unit when Hartco operated as an income trust. 3) Cash flow from continuing and discontinued operating activities, less capital expenditures, net of proceeds from disposal of assets, plus collection of loans receivable. Adjusted Free Cash Flow is a non-GAAP measure as defined in the MD&A. FOR FURTHER INFORMATION PLEASE CONTACT: Hartco Inc. Carl Gauvreau, CA Vice-President Finance and Chief Financial Officer 514-354-3810 514-354-8989 (FAX) cgauvreau@hartco.com www.hartco.com