Our roundup of Canadian small-caps of between $100-million and $2.5-billion in market capitalization making news and on the move today.
Airline and tour operator Transat AT Inc.’s (TRZ-T) third-quarter loss more than doubled due to fees and executive compensation related to its deal to be taken over by rival Air Canada.
For the three months ending on July 31, Montreal-based Transat said it lost $11-million, or 29 cents a share, compared with a loss of $5-million or 13 cents in the same period of 2018.
Revenue rose by 5 per cent to $700-million as vacation prices rose and the number of customers increased by 4 per cent in the company’s main market, transatlantic travel, Transat said in a pre-market release on Thursday morning.
Transat shareholders on Aug. 23 voted in favour of selling the company to Air Canada for $720-million. The takeover, subject to approval by transport and competition authorities, is expected to close in the second quarter of 2020, Transat said.
In a statement accompanying the financial results, Transat said the net loss included payouts associated with the takeover process, including “professional fees” of $6-million and stock-based compensation worth $7.7-million triggered by change-of-control provisions in employee contracts.
Excluding the takeover fees, compensation and other one-time items, Transat posted an adjusted operating profit of $22-million in the third quarter, compared with a loss of $7.6-million in the year-earlier period.
Transat operates a fleet of about 40 planes and has 5,000 employees.
Hudson’s Bay Co (HBC-T) reported a wider second-quarter loss on Thursday, hurt by several shuttered stores, heavy discounting and declining sales at the retailer’s namesake brand.
The Toronto-based company has been fighting a tough retail environment as e-commerce behemoth Amazon.com Inc and other department stores such as Macy’s and Nordstrom Inc continue to swoop up more customers with discounts. “The promotional activity in luxury was exceptionally intense in the second quarter and a notable change from the first quarter”, Chief Executive Officer Helena Foulkes said.
Brands Saks Fifth Avenue and Saks OFF 5TH, however, performed well in the quarter. Comparable sales at Saks Fifth Avenue rose 0.6% and that at Saks OFF 5TH climbed 3.4%.
Retail sales at the company fell marginally to $1.83-billion from a year earlier.
Over the past few years Hudson’s Bay has been closing stores and selling businesses to sustain business. Last month, it said it would sell its Lord + Taylor department store business to fashion rental service company Le Tote Inc for about US$100-million.
The company’s net loss from continuing operations widened to $462-million, or $2.51 per share in the quarter ended Aug. 3, from $104 million, or 58 cents a year earlier.
Total revenue fell to $1.85-billion from $1.86-billion.
Summit Industrial Income REIT (SMU.UN-T) announced it has sold its interests in its data centres in the Greater Toronto Area and downtown Montreal for approximately $178-million. The company said the transactions will generate “a significant realized gain” of approximately $42-million or 35 cents per unit, as well as the repayment of related working capital loans and mezzanine loans of approximately $62-million. Summit also announced a special distribution of 7 cents per unit to be paid on Oct, 2 to unitholders of record on Sept. 19.
Summit also said it will continue to be involved in the development of one of the data centres in the Greater Toronto Areas and the data centre in downtown Montreal by extending new mezzanine loans to new joint ventures with Urbacon.
“The new joint ventures will partner with a major Canadian institutional investor to complete the two developments,” the REIT stated. “These new mezzanine loans allow Summit to participate in potential gains when these two development projects are completed and fully leased.”
The North West Co. Inc. (NWC-T) said its second-quarter consolidated sales increased 4.7 per cent to $527.3-million, which was above expectations of $522.6-million. It said the increase was led by same-store sales gains and the impact of foreign exchange on the translation of international operations sales and new stores.
Excluding the foreign exchange impact, the company said consolidated sales increased 3.6 per cent and were up 1.5 per cent on a same-store basis.
Net earnings decreased 3.7 per cent to $17.9 million. Net earnings attributable to shareholders were $17.2-million or 35 cents per share compared 36 cents per share last year.
Wayland Group Corp. (WAYL-C) announced it has been “made aware that a statement of claim in a proposed securities class proceeding was issued in Ontario against the company, the former CEO of the company and two investment banking firms engaged by the company” related to certain capital markets transactions in 2018.
"In commenting on a newspaper account by lawyers making a promotional announcement, Wayland observed that no claim of this nature has been served on the company," it stated. "If the proposed matter proceeds, the company intends to defend the claim vigorously."
Greenbrook TMS Inc. (GTMS-T) announced it will acquire Achieve TMS Centers, LLC and Achieve TMS Alaska, LLC for an initial purchase price of US$10.5-million, net of Achieve TMS’ cash and debt.
The company said a portion of the purchase price is subject to an earn-out based on the EBITDA achieved by Achieve TMS during the 12-month period following the closing of the Acquisition.
As part of the agreement, the company will issue Greenbrook shares representing approximately 30 per cent of the purchase price. The shares will be valued based on a price equal to the volume-weighted average trading price on the Toronto Stock Exchange, based on a certain timeline. The company said it intends to pay the remaining 70 per cent with cash on hand.
Greenbrook provides Transcranial Magnetic Stimulation, a non-invasive therapy for the treatment of major depressive disorder and other mental health disorders. Achieve TMS operates 21 TMS Centers in California, Oregon and Alaska.
Currency Exchange International, Corp. (CXI-T) said third-quarter transactional activity increased 6 per cent to 365,000 transactions from 343,000 for the three-month period ended July 31, 2018.
Revenues increased 7 per cent to US$12.4-million year over year. Net operating income decreased to US$2.9-million from US$3.5-million.
Net income decreased to US$1.8-million or 28 cents per share from US$2.4-million or 37 cents a year earlier.