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Press release from Marketwire

Hartco Announces 2011 Fourth Quarter and Year-end Results

Thursday, February 23, 2012

Hartco Announces 2011 Fourth Quarter and Year-end Results13:36 EST Thursday, February 23, 2012MONTREAL, QUEBEC--(Marketwire - Feb. 23, 2012) - Hartco Inc. (TSX:HCI) today announced financial results for the fourth quarter and the year ended December 31, 2011. Hartco posted consolidated revenues of $107.2 million and net earnings of $0.5 million, or $0.03 per share on a diluted basis for the fourth quarter, compared to revenues of $118.6 million and net earnings of $4.0 million, or $0.29 per share on a diluted basis, for the corresponding quarter in 2010.Fourth quarter revenues decreased by $11.5 million compared to the same period last year. Product revenues declined by 9.7%, while service revenues increased by 8.4%. Consolidated EBITDA were $0.8 million for the quarter ended December 31, 2011 compared to $4.4 million for the same quarter in 2010."We experienced disappointing results during the fourth quarter, primarily due to lower than expected revenues and gross margins in the commercial segment." said Pat Waid, Hartco's President and Chief Operating Officer. "We are committed to implementing necessary changes to improve our operational execution".Consolidated results for the year ended December 31, 2011For the year ended December 31, 2011, net earnings amounted to $3.7 million, or $0.26 per share on a diluted basis, on consolidated revenues of $437.3 million, compared to net earnings of $7.1 million, or $0.49 per share on a diluted basis, on consolidated revenues of $465.3 million in 2010. Consolidated EBITDA was $5.2 million for the year ended December 31, 2011 compared to $11.3 million for the prior year.Financial PositionEffective management of our working capital enabled Hartco to end the year 2011 with a cash position of $20.9 million and no debt. Hartco's strategy is to leverage its cash to invest in future growth and productivity improvements.Hartco Outlook"Challenging business conditions are expected to prevail throughout 2012 and we will take appropriate actions to improve our performance." said Pat Waid. "We will leverage our strong financial position and comprehensive offering portfolio to increase our market penetration and improve our profitability."Detailed Financial InformationDetailed financial information pertaining to Hartco's fourth quarter and annual results can be accessed at www.sedar.com. The fourth quarter and annual financial statements have been prepared in accordance with the International Financial Reporting Standards ("IFRS").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 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)Fourth Quarter endedYear endedDecember 31December 312011201020112010$$$$Revenues107,151118,604437,275465,306EBITDA (1)7644,4185,19811,252Net earnings4874,0423,7277,073Diluted Earnings per share0.030.290.260.49Free Cash Flow (2)5,5653941,5642,764Adjusted Free Cash Flow (deficiency) (3)5,614387(3,007)3,115Cash position20,92524,24220,92524,242(1) Earnings before net financial costs, income tax expense, depreciation and amortization and share of results of equity investments. EBITDA is a non-IFRS measure as defined in the MD&A. (2) Cash flow from continuing and discontinued operating activities less capital expenditures. Free Cash Flow is a non-IFRS measure as defined in the MD&A. (3) Cash flow from continuing and discontinued operating activities, less capital expenditures, net of proceeds from disposal of assets, plus net investing activities, plus net collection of loans and other assets. Adjusted Free Cash Flow is a non-IFRS measure as defined in the MD&A. FOR FURTHER INFORMATION PLEASE CONTACT: Vice-President Finance and Chief Financial OfficerHarold GervaisHartco Inc.514-354-3810514-354-8989 (FAX)hgervais@hartco.comwww.hartco.com