Opta Minerals Inc OPMMF

Q2 Report...Another Rock Solid Quarter

[TheRock17]

OPTA MINERALS INC Opta Minerals Inc. Reports 2nd Quarter Results for Fiscal 2007 8/8/2007 WATERDOWN, ONTARIO, Aug 08, 2007 (MARKET WIRE via COMTEX News Network) -- Opta Minerals Inc. (TSX: OPM), a vertically integrated producer, manufacturer, distributor and recycler of industrial minerals, silica-free loose abrasives, roofing shingle granules, specialty sands and related products, today announced results for the three and six months ended June 30, 2007. The Company has elected to change its reporting currency to U.S. dollars as approximately 70% of the Company's revenues are generated from operations based in the United States of America. All figures are therefore reported in U.S. dollars and in accordance with Canadian Generally Accepted Accounting Principles (GAAP), except where otherwise noted. Opta Minerals reported second quarter revenue for fiscal 2007 of $18.4 million, bringing year to date revenue to $34.9 million an 11% increase over the first half of 2006. Earnings before interest, income taxes, depreciation and amortisation ("EBITDA") for the quarter were $2.8 million, bringing year to date EBITDA to $5.0 million, a 7% increase over the $4.7 million reported in the first half of 2006. Year to date results have been positively affected by the inclusion of a full six months of results from the Bimac and Rossborough divisions that were acquired in 2006, the commencement of commercial production of desulfurization products at the Company's Waterdown Ontario facility, and shipment of product to the Company's new integrated steel mill customer in conjunction with a previously announced 2 year order that is expected to generate approximately $8.4 million in revenue over the term of the agreement. Results generated from these activities were partially offset by lower than expected sales volumes for the three months ended June 30, 2007 into the Canadian abrasive and foundry industries, and lower sales volumes of desulfurization products to several of the Company's significant U.S. customers. Revenues for the three months ended June 30 2006 were $18.4 million. For the quarter ended June 30 2006, EBITDA was $3.2 million or 14% higher than the same period in 2007. Approximately 4% of this decline is due to the change in foreign exchange gains recorded in the periods. Gross profit for the three months ended June 30 2007 was $4.4 million, bringing year to date gross profit to $8.5 million a 15% increase over the $7.4 million recorded in the first six months of 2006. Gross profit for the three months ended June 30, 2006 was $4.6 million or 4% higher than the same period in 2007. Earnings before income taxes and interest ("EBIT") for the three months ended June 30, 2007 were $2.0 million, bringing year to date EBIT to $3.5 million which is comparable to the results for the first six months ended June 30, 2006. In the second quarter of 2006, the Company converted several U.S. dollar denominated debts into Canadian dollars at a favorable exchange rate resulting in a one time gain on foreign exchange of approximately $0.14 million. For the three months ended June 30, 2006 the Company reported EBIT of $2.6 million or 26% higher than the comparable period in 2007. Net earnings for the three months ended June 30, 2007 were $1.2 million or $0.07 per diluted common share, brining year to date net earnings to $1.9 million or $0.11 per diluted common share, which is comparable to the results of first six months ended June 30, 2006. For the three months ended June 30, 2006 the Company reported net earnings of $1.4 million or 26% higher than the comparable period in 2007. The Company continues to maintain a strong balance sheet, with working capital of $11.4 million and total assets of $77.4 million. The debt to equity ratio as at June 30, 2007 was 0.66 to 1.00. The Company has cash and available credit facilities of a further $5.0 million, and is in the process of expanding available facilities by approximately $25.0 million. It is intended that these resources will be used to generate further shareholder value through strategic acquisitions and investment in the Company's existing operations. Recent events from the quarter: - Commencement of commercial production at the Company's new facility in Laval Quebec. During the first quarter, the Company acquired the production assets of an industrial minerals processing facility in Laval, Quebec. Located in a 39,000 square foot facility under lease, these assets are ideally suited to produce abrasive media for blasting purposes, as well as garnet for abrasive, waterjet and water filtration applications. The plant began commercial production in early May, and the Company expects 2007 revenues from operations to be over $0.6 million with continued strong internal growth in the following years. - Expansion of the magnesium desulfurization business. In March, the Company announced two significant developments with respect to its magnesium desulfurization business. First, Opta received a two year order with a global integrated steel manufacturer to supply desulfurization products. Production commenced during the second quarter and revenues from this order are expected to exceed U.S. $8.4 million over the term of the agreement. Second, the Company announced an expansion of its Waterdown facility to include the production of magnesium desulfurization products. The Company began commercial production and shipment of product to U.S. and Canadian integrated steel mill facilities late in the second quarter. The Company continues to expect annual revenues from this expansion of $3.9 million with strong internal growth in future years. David Kruse, President and Chief Executive Officer, said "Opta Minerals performed well in light of a number of market related challenges in the second quarter of 2007. Year to date revenues from operations were $34.9 million, and remain 11% higher than the first six months results in 2006, while EBITDA has grown 7% from $4.7 million in the first six months of 2006 to $5.0 million in 2007. A significant portion of this growth pertains to a full six months results being included in consolidated earnings for companies acquired in 2006 being partially offset by revenue weakness in the Company's Canadian abrasive and foundry products markets and lower sales volumes to several of the Company's significant U.S. based desulfurization products customers. We remain committed to a blended approach to Company growth that includes both acquisition and organic sources. We are now beginning to see results from the expansions of our existing steel and abrasive business during the quarter and expect to realize on this investment during the remainder of 2007". Opta Mineral's President and CEO, David Kruse, plans to host a conference call at 10:00 AM Eastern Standard Time, on Monday August 20th to discuss second quarter results and recent corporate developments. After opening remarks, there will be a question and answer period. This conference call can be accessed with the toll free dial-in number [phone] or [phone]. If you are unable to listen live, the conference call will be archived and can be accessed at the following replay numbers between August 20th and August 27th with the toll free dial-in number [phone] or [phone] followed by pass code: 216337. Opta Minerals is a vertically integrated producer, manufacturer, distributor and recycler of industrial minerals, silica-free loose abrasives, roofing shingle granules, specialty sands and related products for use primarily in the foundry, steel, marine/bridge cleaning and municipal water filtration industries. The Company currently has production and distribution facilities in Ontario, Quebec, Louisiana, South Carolina, Virginia, Maryland, Indiana, Ohio, Michigan and New York and one of the broadest product lines in the industry. FOOTNOTES: --------- Earnings before income taxes an interest ("EBIT"); and earnings before interest, income taxes, depreciation and amortization ("EBITDA") as defined below, are both non-GAAP earnings measures that do not have standardized measures prescribed by GAAP, and therefore may not be comparable to similar measures presented by other publicly traded companies. For the Three Months(unaudited) Ended June 30 2007 2006 $ $Net Earnings for the Period 1,150 1,445Interest Expense 384 404Provision for Income taxes 514 729Depreciation and Amortization 748 665 ------------------- -------------------EBITDA(1) 2,796 3,243Add (subtract):Depreciation and Amortization (748) (665) ------------------- -------------------Earnings before income taxes and interest(2) 2,048 2,578 Notes (1) The term "EBITDA" refers to earnings before deducting interest expense, provision for income taxes, depreciation and amortization. The Company believes that EBITDA is useful supplemental information as it provides an indication of the results generated by the Company's main business activities prior to taking into consideration how those activities are financed and taxed and also prior to taking into consideration asset depreciation. EBITDA is not a recognized measure under Canadian GAAP, and accordingly, investors are cautioned that EBITDA should not be construed as an alternative to net earnings or loss determined in accordance with Canadian GAAP as an indicator of the financial performance of the Company or as a measure of the Company's liquidity and cash flows. The Company's method of calculating EBITDA may differ from other issuers and accordingly, EBITDA may not be comparable to similar measures presented by other issuers. (2) The term "EBIT" refers to earnings before income taxes and interest expense. The Company believes that EBIT is useful supplemental information as it provides an indication of the results generated by the Company's main business activities prior to taking into consideration how those activities are financed or taxed. EBIT is a non-GAAP earnings measure that does not have standardized measures prescribed by GAAP, and therefore may not be comparable to similar measures presented by other publicly traded companies. This press release may contain ''forward-looking statements'' which reflect the current expectations of management of the Company regarding the Company's future growth, results of operations, performance, business prospects and opportunities. Wherever possible, words such as ''may'', 'would'', ''could'', ''should'', ''will'', ''anticipate'', ''believe'', ''plan'', ''expect'', ''intend'', ''estimate'', ''aim'', ''endeavour'', ''seek'', ''predict'', ''potential'' and similar expressions have been used to identify these forward-looking statements. These statements reflect management's current beliefs with respect to future events and are based on information currently available to management of the Company. Forward-looking statements involve significant risks, uncertainties and assumptions. Many factors could cause the Company's actual results, performance or achievements to be materially different from any future results, performance or achievements that may be expressed or implied by such forward-looking statements, including, without limitation, cancellations of or the failure to renew purchase orders; production and delivery issues; quality, pricing and availability of raw materials; compliance with environmental regulations; exchange rate fluctuations as well as the other risks identified in the ''Risk Factors'' section of the Company's Annual Information Form and other public filings (copies of which may be obtained at www.sedar.com). Should one or more of these risks or uncertainties materialize, or should assumptions underlying the forward-looking statements prove incorrect, actual results, performance or achievements may vary materially from those expressed or implied by this press release. These factors should be considered carefully and reader should not place undue reliance on the forward-looking statements. Although any forward-looking statements contained in this press release are based upon what management currently believes to be reasonable assumptions, the Company cannot assure readers that actual results, performance or achievements will be consistent with these forward-looking statements, and management's assumptions may prove to be incorrect. These forward-looking statements are made as of the date of this press release and, other than as required by law, the Company does not intend, and does not assume any obligation, to update or revise these forward-looking statements, whether as a result of new information, future events or otherwise. Opta Minerals Inc.Consolidated Statements of EarningsFor the three month periods ended June 30, 2007 and 2006(Expressed in thousands of U.S. dollars, except per share amounts)(Unaudited) 2007 2006 $ $Revenue 18,390 18,414Cost of goods sold 13,955 13,802 ------------------Gross profit 4,435 4,612Selling, general and administrative expenses 2,203 2,049 -------------------Earnings before the following 2,232 2,563 -------------------Interest expense - net 384 404Amortization of intangible assets 282 233Stock compensation expense 35 28Foreign exchange gain (133) (276) ------------------- 568 389 -------------------Earnings before income taxes 1,664 2,174Provision for income taxes 514 729 -------------------Net earnings for the period 1,150 1,445 ------------------- -------------------Earnings per share for the periodBasic and diluted 0.07 0.09Opta Minerals Inc.Consolidated Statements of EarningsFor the six month periods ended June 30, 2007 and 2006(Expressed in thousands of U.S. dollars, except per share amounts)(Unaudited) 2007 2006 $ $Revenue 34,853 31,498Cost of goods sold 26,353 24,075 -------------------Gross profit 8,500 7,423Selling, general and administrative expenses 4,434 3,664 -------------------Earnings before the following 4,066 3,759 -------------------Interest expense - net 755 695Amortization of intangible assets 586 363Stock compensation expense 69 73Foreign exchange gain (100) (201) ------------------- 1,310 930 -------------------Earnings before income taxes 2,756 2,829Provision for income taxes 901 983 -------------------Net earnings for the period 1,855 1,846 ------------------- -------------------Earnings per share for the periodBasic and diluted 0.11 0.11Opta Minerals Inc.Consolidated Balance Sheets(Expressed in thousands of U.S. dollars)(Unaudited) June 30, December 31, June 30, 2007 2006 2006 $ $ $AssetsCurrent assetsCash and cash equivalents 415 854 1,813Accounts receivable 9,888 8,111 8,630Inventories 16,435 14,057 12,978Prepaid expenses and other current assets 890 1,492 1,832Income taxes recoverable 67 248 - ---------------------------------- 27,695 24,762 25,253Property, plant and equipment - net 18,800 17,615 15,761Intangible and other assets - net 19,928 20,644 18,707Goodwill 10,237 10,169 7,552Future Income Taxes 733 803 590 ---------------------------------- 77,393 73,993 67,863 ---------------------------------- ----------------------------------LiabilitiesCurrent liabilitiesBank indebtedness 8,446 6,752 6,317Accounts payable and accrued liabilities 4,464 4,891 4,146Current portion of long-term debt 3,348 2,496 2,777Current portion of preference shares 44 39 42Income taxes payable - - 356 ---------------------------------- 16,302 14,178 13,638Long-term debt 12,353 12,749 12,727Other long-term liabilities 2,150 2,150 -Future income taxes 10,274 10,768 8,877 ---------------------------------- 41,079 39,845 35,242 ----------------------------------Shareholder's EquityCapital stockAuthorized: Unlimited number of common shares and preference shares without par valueIssued 16,976,627 (December 31, 2006 - 16,964,539, June 30, 2006 16,957,392) common shares 14,147 14,082 14,061Contributed surplus 1,263 1,213 1,117Retained earnings 17,691 15,960 14,265Accumulated other comprehensive income 3,213 2,893 3,178 ---------------------------------- 36,314 34,148 32,621 ---------------------------------- 77,393 73,993 67,863 ---------------------------------- ----------------------------------Opta Minerals Inc.Consolidated Statements of Cash FlowsFor the three month periods ended June 30, 2007 and 2006(Expressed in thousands of U.S. dollars)(Unaudited) 2007 2006 $ $Cash provided by (used in)Operating activitiesNet earnings for the period 1,150 1,445Items not affecting cash Amortization of property, plant and equipment 466 432 Amortization of intangible assets 282 233 Amortization of deferred financing costs - 30 Stock compensation expense 35 28 Future income taxes (112) 71 Unrealized foreign exchange gain on long term debt (273) (93) ---------------- 1,548 2,146Changes in non-cash working capital Accounts receivable 73 (720) Inventories (1,465) 552 Prepaid expenses and other current assets 440 39 Accounts payable and accrued liabilities (363) 284 Income taxes payable 165 (299) ---------------- 398 2,002Investing activities Acquisition of property, plant and equipment (610) (437) Additional consideration paid on acquisitions (12) (23) ---------------- (622) (460) ----------------Financing ActivitiesDeferred financing costs - (14)Proceeds from issuance of common shares 37 7Increase in bank indebtedness 774 (1,394)Repayment of long term debt (341) (133)Repayment of due from affiliates - (22)Purchase and redemption of preference shares - (26) ---------------- 470 (1,582) ----------------Increase (decrease) in cash and cash equivalents during period 246 (40)Cash and cash equivalents - Beginning of period 169 1,853 ----------------Cash and cash equivalents - End of period 415 1,813 ---------------- ----------------Supplemental cash flow informationInterest paid 393 288Income taxes paid 578 705Opta Minerals Inc.Consolidated Statements of Cash FlowsFor the six month periods ended June 30, 2007 and 2006(Expressed in thousands of U.S. dollars)(Unaudited) 2007 2006 $ $Cash provided by (used in)Operating activitiesNet earnings for the period 1,855 1,846Items not affecting cash Amortization of property, plant and equipment 903 767 Amortization of intangible assets 586 363 Amortization of deferred financing costs - 49 Stock compensation expense 69 73 Future income taxes (175) 211 Unrealized foreign exchange gain on long term debt (303) (93) Net loss on disposal of property, plant and equipment 7 - ---------------- 2,942 3,216Changes in non-cash working capital Accounts receivable (1,416) (1,149) Inventories (1,580) 2,005 Prepaid expenses and other current assets 653 (48) Accounts payable and accrued liabilities (573) (44) Income taxes payable 196 (121) ---------------- 222 3,859Investing activitiesAcquisition of property, plant and equipment (1,400) (726)Additional consideration paid on acquisitions (24) (29)Proceeds on disposal of property, plant and equipment 18 -Acquisition of company - (18,987) ---------------- (1,406) (19,742) ----------------Financing ActivitiesDeferred financing costs - (66)Proceeds from issuance of common shares 46 14Increase in bank indebtedness 942 6,216Proceeds from long term debt 1,497 8,542Repayment of long term debt (1,740) (482)Repayment of due from affiliates - (8)Purchase and redemption of preference shares - (26) ---------------- 745 14,190 ----------------Decrease in cash and cash equivalents during period (439) (1,693)Cash and cash equivalents - Beginning of period 854 3,506 ----------------Cash and cash equivalents - End of period 415 1,813 ---------------- ----------------Supplemental cash flow informationInterest paid 954 519Income taxes paid 975 778Opta Minerals Inc.Segmented InformationFor the three months ended June 30, 2007(Expressed in thousands of U.S. dollars)(Unaudited) For the three month period ended June 30, 2007 Mill and Abrasive foundry manufacturing products and and services distribution $ operations Unallocated Total $ $ $External revenue by market Canada 2,874 1,617 - 4,491 U.S. 9,040 4,685 - 13,725 Other 145 29 - 174 -------------------------------------------------Total revenue from external customers 12,059 6,331 - 18,390 ------------------------------------------------- -------------------------------------------------Segment net earnings before interest expense and income taxes 1,076 1,282 (310) 2,048Interest expense on long term debt 265Interest expense 119Provision for income taxes 514 -------------Net earnings 1,150 ------------- -------------Total assets as at June 30, 2007 41,596 34,016 1,781 77,393 ------------------------------------------------- -------------------------------------------------Amortization of property plant and equipment 194 267 5 466 ------------------------------------------------- -------------------------------------------------Amortization of intangible assets 270 12 - 282 ------------------------------------------------- -------------------------------------------------Goodwill and intangible assets as at March 31, 2007 23,032 7,133 - 30,165 ------------------------------------------------- -------------------------------------------------Expenditures on property, plant and equipment 186 404 20 610 ------------------------------------------------- -------------------------------------------------Opta Minerals Inc.Segmented InformationFor the six months ended June 30, 2007(Expressed in thousands of U.S. dollars)(Unaudited) For the six month period ended June 30, 2007 Mill and Abrasive foundry manufacturing products and and services distribution $ operations Unallocated Total $ $ $External revenue by market Canada 5,405 2,771 - 8,176 U.S. 17,886 8,448 - 26,334 Other 314 29 - 343 ------------------------------------------------Total revenue from external customers 23,605 11,248 - 34,853 ------------------------------------------------ ------------------------------------------------Segment net earnings before interest expense and income taxes 2,441 2,017 (947) 3,511Interest expense on long term debt 537Interest expense 218Provision for income taxes 901 ---------Net earnings 1,855 --------- ---------Amortization of property plant and equipment 371 523 9 903 ------------------------------------------------ ------------------------------------------------Amortization of intangible assets 562 24 - 586 ------------------------------------------------ ------------------------------------------------Expenditures on property, plant and equipment 408 969 23 1,400 ------------------------------------------------ ------------------------------------------------Opta Minerals Inc.Segmented InformationFor the three months ended June 30, 2006(Expressed in thousands of U.S. dollars)(Unaudited) For the three month period ended June 30, 2006 Mill and Abrasive Foundry Manufacturing Products and and Services distribution $ operations Unallocated Total $ $ $External revenue by market Canada 3,073 2,754 - 5,827 U.S. 8,108 4,063 - 12,171 Other 407 9 - 416 ------------------------------------------------Total revenue from external customers 11,588 6,826 - 18,414 ------------------------------------------------ ------------------------------------------------Segment net earnings before interest expense and income taxes 1,613 996 (31) 2,578Interest expense on long term debt 277Interest expense 127Provision for income taxes 729 --------Net earnings 1,445 -------- --------Total assets as at December 31, 2006 40,521 34,421 1,051 73,993 ------------------------------------------------ ------------------------------------------------Amortization of property plant and equipment 131 301 - 432 ------------------------------------------------ ------------------------------------------------Amortization of intangible assets 218 15 - 233 ------------------------------------------------ ------------------------------------------------Goodwill and intangible assets as at December 31, 2006 23,768 6,921 - 30,689 ------------------------------------------------ ------------------------------------------------Expenditures on property, plant and equipment 194 226 17 437 ------------------------------------------------ ------------------------------------------------Opta Minerals Inc.Segmented InformationFor the six months ended June 30, 2006(Expressed in thousands of U.S. dollars)(Unaudited) For the six month period ended June 30, 2006 Mill and Abrasive Foundry Manufacturing Products and and distribution Services operations Unallocated Total $ $ $ $External revenue by market Canada 5,584 4,868 - 10,452 U.S. 11,943 8,544 - 20,487 Other 543 16 - 559 ------------------------------------------------Total revenue from external customers 18,070 13,428 - 31,498 ------------------------------------------------ ------------------------------------------------Segment net earnings before interest expense and income taxes 2,298 1,930 (704) 3,524Interest expense on long term debt 487Interest expense 208Provision for income taxes 983 ------Net earnings 1,846 ------ ------Amortization of property plant and equipment 176 591 - 767 ------------------------------------------------ ------------------------------------------------Amortization of intangible assets 332 31 - 363 ------------------------------------------------ ------------------------------------------------Expenditures on property, plant and equipment 334 375 17 726 ------------------------------------------------ ------------------------------------------------ Contacts:Opta Minerals Inc.David KrusePresident and Chief Executive Officer(905) 689-6661, ext 401Opta Minerals Inc.James WilsonChief Financial Officer and Secretary(905) 689-6661, ext 401Email: [e-mail]: www.optaminerals.com SOURCE: Opta Minerals Inc. mailto:[e-mail] https://www.optaminerals.com Copyright 2007 Market Wire, All rights reserved. © 2007 Stockgroup Media Inc. | Disclaimer OPM Releases SHfn Opta Minerals Inc. Reports 2nd Quarter Results for Fiscal 2007 SunOpta Announces Record Second Quarter Results; Revenues Increase 33.5% and Net Earnings Increase 55.4% Opta Minerals Schedules Second Quarter 2007 Financial Results Release and Conference Call SunOpta Inc. Acquires Operating Assets of ProSoya Corporation Located in Heuvelton, New York SunOpta to Present at Canaccord Adams' 27th Global Growth Conference SH @