Our roundup of Canadian small-caps of between $100-million and $2.5-billion in market capitalization making news and on the move today.
Charlotte’s Web Holdings, Inc. (CWEB-T) announced a proposal to buy Abacus Health Products, Inc. (ABCS-C) in a deal valued at about $99 million. Under the terms of the agreement, shareholders of Abacus will receive 0.85 of a common share of Charlotte’s Web for each Abacus share held. The exchange ratio implies a price per Abacus share of C$4.39, representing a premium of 38 per cent based on the 10-day volume-weighted average price of the Abacus shares as of March 20.
Boston Pizza Royalties Income Fund (BPF.UN-T) announced it will temporarily suspend monthly distributions on units of the fund until further notice, starting with the March 2020 distribution that ordinarily would have been payable on April 30 to unitholders of record on April 21.
"In response to the unprecedented effects COVID-19 is having on the business of Boston Pizza restaurants across Canada and the corresponding decline in royalty and distribution income payable to the fund, the trustees of the fund decided to temporarily suspend the monthly distribution on units until further notice," said Marc Guay, chairman of the Fund. "We believe that this is a prudent decision to help preserve the fund's existing cash until the full economic consequences of COVID-19 on the fund are better understood."
Transat A.T. Inc. (TRZ-T) announced that it has temporarily laid off about 70 per cent of its workforce in Canada and said the final Air Transat flight prior to the full suspension of its operations is scheduled for April 1. On March 18, the company announced the “gradual temporary halting of all flights” until April 30.
"Operations are being stopped gradually in order to enable Transat to repatriate as many of its customers as possible to their home countries," the company stated.
“We are very much in agreement with the measures being taken to fight the spread of the virus and protect the public’s health. As a community, we have to do what is necessary to stop the pandemic,” said COE Jean-Marc Eustache. “These measures have forced us to totally suspend our operations. We have done this in such a way that none of our customers are stuck far from home, and we are in the process of bringing them back. We expect to have finished doing this by April 1, and we will then totally halt our flights. At the same time, in order to safeguard the company, we have unfortunately had to proceed with layoffs that affect a significant portion of our employees. We are doing this with great sadness and we hope that everyone will be able to return to work as quickly as possible.”
Martinrea International Inc. (MRE-T) announced late Friday that it’s withdrawing its previously disclosed financial guidance and medium-term outlook amid customer shutdown due to the COVID-19 outbreak.
"[The] announced customer plant shutdowns will affect the company's own production levels during the remainder of Q1 2020 and likely beyond, as restarting of production could be delayed, and partial or full shutdowns may continue. Additionally, if the virus persists or government actions in response to COVID-19 continue, demand may be impacted as consumers adjust buying patterns,” stated chief financial officer Fred Di Tosto.
NFI Group Inc. (NFI-T) announced it’s withdrawing the fiscal 2020 financial guidance issued on March 12 and has temporarily reduced its quarterly dividend for the period Jan. 1 to March 31 to 21.25 cents per common share.
"Due to the unpredictable impact of the COVID-19 pandemic on the global economy it is nearly impossible to forecast the ultimate effects on NFI's operations, financial performance and cash flow," the company stated. "Therefore, future dividends will depend on prevailing circumstances and are not assured."
The company also announced a series of measures at its operations to help fight the outbreak and cut costs including hiring freezes, suspension of salary increases and 2019 earned executive incentives and suspension or reduction of bus and coach production and part fabrication determined on a site-by-site basis, among others.
"In the past week, many customers have visited our retail stores for urgent and immediate help in creating new sleeping arrangements in their homes. Many of our customers required assistance to create self-isolation areas for family members and friends. We were able to provide customers with blankets, pillows, mattresses and folding cots, all of which are essential items to help families get through these uncertain times," said CEO Dave Friesema. "However, the federal and provincial government guidelines for retail environments are becoming more prescriptive as officials put an increased emphasis on the importance of social distancing in curbing the spread of the virus. Therefore, we have decided to move all customer shopping to our e-commerce platform and close our physical retail locations at this time."
Turquoise Hill Resources Ltd. (TRQ-T) reported fourth-quarter revenue of US$221.4-million, down from US$346.2-million a year ago. Its income was US$113.1-million or 6 US cents versus US$101-million or 5 US cents a year earlier.
Analysts were expecting revenue of US$197.2-million and earnings of zero cents, according to S&P Captial IQ.
The company said production in 2021 is expected to increase to a range of 170,000 to 200,000 tonnes of copper, and 450,000 to 500,000 ounces of gold, "as we transition to the higher grade ore in the lower benches of the pit and continue to increase the amount of underground development material processed."
Mullen Group Ltd. (MTL-T) announced it will temporarily suspend the monthly dividend of 5 cents per share three months, effective April 1, as part of a series of measures “in response to the unprecedented declines in economic activity related to spread of COVID-19.”
Other measures include reduced pay for senior executives and directors for 90 days.
The company also said it will suspend some services, along with temporary layoffs due to work shortages. It has also established an employee financial assistance fund of up to $5-million "to eligible employees."
The company said capital expenditures for fiscal 2020 will remain at $50-million, “although some capital will be delayed due to plant shutdowns and disruptions to the supply chain.”
Western Forest Products Inc. (WEF-T) announced that it will curtail its B.C. manufacturing facilities for up to one week starting Monday “due to the evolving COVID-19 pandemic and its impact on operating conditions.”
During this period, the company said it will "re-evaluate business and operating conditions to determine when these manufacturing operations will resume."
It said the packaging and shipping of lumber products will continue to meet customer requirements. “The ongoing curtailments at the ccompany’s Cowichan Bay and Ladysmith sawmills are expected to continue into the second quarter due to limited log supply and weak market demand.”
Goodfood Market Corp. (FOOD-T) announced today its plan to hire more than 500 employees in the coming weeks “to support growing operations and ensure the fulfilment of current and future orders across Canada.” The company said there are openings in Montreal, Toronto, Calgary and Vancouver.
CEO Jonathan Ferrari says the company has seen a rise in demand for all its home meal solutions "and we want to make sure we have the people in place to continue providing Canadians with products of excellent quality and a safe experience."
Endeavour shareholders will own about 70 per cent of the combined company, with Semafo shareholders holding the rest.
Semafo common shares will be exchanged at a ratio of 0.1422 Endeavour ordinary shares for each one Semafo common share, representing a premium of 27.2 per cent based on the 20-day volume-weighted average price of both companies for the period ended March 20. Existing Endeavour and Semafo shareholders will own approximately 70 per cent and 30 per cent, respectively of the combined company "on a fully-diluted in-the-money basis."
“This combination will create one of the leading gold companies, with the largest portfolio of operating assets located entirely in West Africa. In addition to being immediately accretive on all key metrics, this transaction will enhance our scale as well as providing improved trading liquidity, greater asset diversification and a reduced risk profile for all shareholders," stated Endeavour chairman Michael Beckett. "We will also continue to benefit from having La Mancha as a cornerstone shareholder, who will invest $100 million into to the combined entity and hold a 25 per cent interest on a pro forma basis.”
Westport Fuel Systems Inc. (WPRT-T; WPRT-N) announced it will temporarily suspend production at its facilities in Cherasco and Albinea, Italy. The directive is in effect until April 3. The temporary suspension of the company’s production in Brescia, Italy announced on March 16, will be extended to align with this latest directive, the company stated.
“The health and well-being of our global team of employees continues to be our utmost priority," said CEO David Johnson. “Our Italian team has shown tremendous resilience during this difficult time and we support government efforts to act decisively to mitigate the impact of the pandemic.”