Our roundup of Canadian small-caps of between $100-million and $2.5-billion in market capitalization making news and on the move today.
Martinrea International Inc. (MRE-T) announced that it had amended its lending agreements with its banking syndicate “to provide enhanced financial covenant flexibility on a present and go-forward basis.” It also maintained its quarterly dividend, increased in March, of 5 cents per share.
“The declaration of our dividend underscores our confidence in the future of the company, the restart of our operations and our long-term view of the industry,” stated executive chairman Rob Wildeboer.
Mr. Wildeboer also said the company's second-quarter was "as we believe is the case for most participants in our industry, quite frankly, brutal — the worst quarter from a financial point of view in our history."
The company also expects quarterly sales will be down by about 55 per cent year-over-year and there may be some restructuring costs and non-cash asset write-downs "in light of the significant reduction in volumes and current industry production projections," he said.
Mr. Wildeboer added that the company responded "quickly and aggressively to the COVID-19 related shutdowns, but the reality is that it is impossible to make money when we are not producing and shipping parts."
He said the company has started producing again in North America and Europe in the past several weeks, "and production is ramping up nicely" and that China is operating at normal production rates based on customer orders.
"Subject to dealing with the continued COVID-19 pandemic, potential lockdown concerns, and overall industry volumes, we look forward to improving sales and profits in the second half of the year and beyond," he stated.
“The net loss for the fourth quarter of fiscal 2020 reflects a net decline in the fair value of Clairvest’s investee companies and a corresponding decrease in carried interest from the CEP [Clairvest Equity Partners] Funds as a result of significant market volatility and economic disruption resulting from the COVID-19 pandemic,” the company stated, adding that, “several of Clairvest’s investee companies have been forced to temporarily close due to, or been otherwise severely impacted by, the pandemic.”
CEO John Peller will takeover his responsibilities on an interim basis, the company stated.
Sienna Senior Living Inc. (SIA-T) announced new members of its executive leadership team, including Stephen Foster, as interim executive vice-president, long-term care; Karen Hon, chief financial officer and senior vice-president; and David Hung, senior vice-president, corporate services.
The moves come after CEO Lois Cormack resigned as president and CEO and as a board director at the company earlier this month “for personal reasons” and was replaced by CFO Nitin Jain.
The company also said that, as of June, 24, 43 of the 48 long-term care residences and all 35 retirement residences of Sienna’s 83 owned or managed residences don’t have any active resident cases of COVID-19. The company also said that, of the 9 residences with COVID-19, 4 residences don’t have any active resident cases and 3 residences have less than 5 active resident cases.
“As of June 24, 2020, we are encouraged with the progress in 18 of Sienna’s long-term care residences and 6 retirement residences, which have been cleared of outbreak status,” it stated.
The company also said it expects to continue to incur higher expenses to support the costs of managing COVID-19.
It said the net impact of pandemic-related expenses was $4.1-million for the first five months of the year, mainly comprised of additional staffing costs, personal protective equipment and supplies.
It also said its average same-property occupancy in the retirement portfolio dropped to 83 per cent in May, down from 84.6 per cent in March.
Canopy Growth Corp. (WEED-T) and Acreage Holdings Inc. (ACRG.U-C) announced amended the terms of the arrangement agreement last year that sees Canopy Growth buy Acreage contingent upon changes in U.S. federal law to permit the general cultivation, distribution, and possession of marijuana. The deal includes a repricing and restructuring of the terms.
Under the old deal, Canopy agreed to pay 0.5818 of a Canopy share for each Acreage share. As part of the changes, which include an up-front payment for Acreage shareholders and certain convertible security holders totalling US$37.5 million or about 30 cents US per share, Acreage shareholders will receive 0.7 of a fixed share and 0.3 of a floating share for each Acreage share they hold.
Once the cannabis laws change in the U.S., Canopy has agreed to swap 0.3048 of a Canopy share for each fixed Acreage share. Canopy will also have the option to buy the floating Acreage shares for a price equal to their 30-day volume-weighted average trading price, subject to a minimum of US$6.41 per share, payable in either cash or shares at Canopy’s option.
Canopy will now pay about US$843-million under current stock prices to acquire Acreage, down from an original purchase price of US$3.4-billion, according to BNN Bloomberg, which said the figure is likely to be different once the deal is triggered given it's based on two stock ratios used to determine the final price.
-With files from The Canadian Press