Our roundup of Canadian small-caps of between $100-million and $2.5-billion in market capitalization making news and on the move today.
The dividend declared on Aug. 2, 2019 is not affected and will be paid on Oct. 2, the company said.
"This past May, a second round of increases on Chinese imports, including furniture, bicycles and other goods, brought tariffs to 25 per cent, " the release states. "This is having a much greater impact on the business than the original implementation of 10 per cent introduced a year ago."
Dorel CEO Martin Schwartz said the impact of the increase on Dorel businesses was still unclear at the end of the second quarter.
"We raised prices midway through the third quarter and this has had several negative consequences. Not all competitors nor retailers raised prices at the same time or rate," he said. "Retailers have also changed their buying routines. New price points have caused some consumers to opt for different items creating a considerable product mix imbalance. As well, elevated warehousing costs are still being incurred as the shift in demand has delayed our inventory balancing program. The net result of these challenges is that Dorel Home’s expected gross margin improvement from first-half levels will be delayed to the beginning of 2020."
Dorel also said its large U.S. customers have delayed Christmas season deliveries to the beginning of the fourth quarter and that the recent rise in value of the U.S. dollar has had a negative impact on its sports and juvenile segments.
“It is prudent to suspend the dividend until the chaotic market conditions created by tariffs are normalized,” Mr. Schwartz said.
Holloway Lodging Corp. (HLC-T) announced it has sold the Holiday Inn Express hotel in Stellarton, N.S. the Travelodge hotel in New Glasgow, N.S. and the Travelodge hotel in Saint John, N.B. in two separate transactions for a combined price of $18.2-million. Holloway said it expects to use the net sale proceeds to repay $9.1-million on its amortizing mortgages and $7.7-million on its revolving credit facility.
Holloway also announced the completion of the previously announced agreement that saw Clarke Inc. (CKI-T) acquire shares of Holloway that it did not already own. Under the terms of the deal, Holloway shareholders will receive 0.65 of a Clarke common share for each Holloway share they own.
Savaria Corp. (SIS-T) announced it has concluded, through its subsidiary Garaventa (Canada) Ltd., a sale and leaseback transaction relating to its manufacturing plant located in Surrey, B.C. which was sold for $29-million. The agreement provides Savaria with a long-term lease for the next 25 years, the company stated.
“This transaction will provide Savaria with additional flexibility to strengthen its core accessibility business, support organic growth strategies and pursue acquisition opportunities,” stated Savaria CEO Marcel Bourassa.
HBC also said it permanently repaid its outstanding $429-million term loan, "strengthening the balance sheet."
The company also said it has assumed full ownership of the Netherlands retail business and the associated guaranteed rent obligations. “As previously announced, HBC will close its 15 Hudson’s Bay stores, e-commerce site and headquarters in the Netherlands on or before December 31, 2019. The Hudson’s Bay Netherlands management team worked intensively on a social plan, and have come to an agreement with local unions to offer solutions for employees impacted by the closure,” the company stated.