The Globe and Mail

Go to the Globe and Mail homepage

Jump to main navigationJump to main content

Press release from Marketwire

Hartco Announces 2010 Third Quarter Results

Thursday, November 11, 2010

Hartco Announces 2010 Third Quarter Results13:01 EST Thursday, November 11, 2010MONTREAL, QUEBEC--(Marketwire - Nov. 11, 2010) - Hartco Inc. (TSX:HCI) today announced financial results for the third quarter ended September 30, 2010. Hartco posted consolidated revenues of $113.0 million for the third quarter, compared to $99.0 million the previous year, and net earnings of $0.5 million, or $0.03 per share on a diluted basis, compared to earnings of $1.6 million, or $0.11 per share, for the corresponding quarter in 2009.Third quarter revenues increased by $14.0 million, or 14.1%, compared to the same period last year. Revenues from the Commercial segment increased by 6.8% while the Franchising and Distribution segment net revenues increased by 61.3%. Consolidated EBITDA was $1.3 million for the recent quarter, a decrease of 52.4% compared to $2.7 million for the same quarter in 2009, due to various non-recurring expenses, composed mainly of corporate and sales tax assessments."The encouraging demand trends which we experienced in the first half of 2010 persisted during the third quarter and had a positive impact on our revenues," said Pat Waid, Hartco's President and Chief Operating Officer. "We are disappointed that higher than expected costs and various non-recurring expenses prevented us from achieving stronger earnings for the recent quarter."Consolidated results for the nine-month period ended September 30, 2010For the nine-month period ended September 30, 2010, net earnings amounted to $3.1 million or $0.23 per share on a diluted basis, compared to net earnings of $2.6 million or $0.19 per share for the same period last year. Consolidated EBITDA was $7.1 million for the nine-month period ended September 30, 2010 compared to $5.0 million for the nine-month period ended September 30, 2009, an increase of 43.3%.Consolidated revenues amounted to $351.5 million for the nine-month period ended September 30, 2010, compared to $317.0 million for the same period last year, an increase of 10.9%.Financial PositionSince the beginning of the year, Hartco generated free cash flow of $4.0 million despite an investment to date of $5.5 million in its IT infrastructure and in an enterprise resource planning ("ERP") solution. This contributed to a cash position of $25.5 million as at September 30, 2010. Hartco's strategy is to preserve cash to support future growth while investing in productivity improvements.Hartco Outlook"In spite of enduring economic uncertainty, we anticipate demand to remain strong and we expect our positive momentum to carry on through the final quarter of 2010," said Pat Waid. "We will maintain a clear focus on operating our business successfully and improve cost controls to maximize profitability."Detailed Financial InformationDetailed financial information pertaining to Hartco's third quarter and year-to-date 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 50 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 endedNine-month period endedSeptember 30September 302010200920102009$$$$Revenues112,96299,041351,473317,005EBITDA 1)1,2752,6797,1484,988Net earnings4741,6143,1222,577Diluted Earnings per share0.030.110.230.19Adjusted Free Cash Flow 2)2,1103,7134,02612,905Cash position25,52816,63525,52816,6351) 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) 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: Carl Gauvreau, CAHartco Inc.Vice-President Finance and Chief Financial Officer514-354-3810514-354-8989 (FAX)cgauvreau@hartco.comwww.hartco.com