Afton Food Group Ltd. Posts Record Fourth Quarter and Year End Results
AFF-TSE
Apr 02, 2001, 01:00 ET from Afton Food Group Ltd.
BURLINGTON, ON, April 2 /PRNewswire/ -
-------------------------------------------------------------------------
3 Months Ended December 31, 2000
(000s except per share amounts)
Current Last Year % Increase
-------------------------------------------------------------------------
System Sales $46,649 $32,709 43%
Revenue 9,442 2,876 228%
EBITDA 2,620 1,192 120%
Net Income 727 470 55%
Basic earnings per share ($) 0.10 0.06 67%
EBITDA per share ($) 0.34 0.16 113%
-------------------------------------------------------------------------
-------------------------------------------------------------------------
12 Months Ended December 31, 2000
(000s except per share amounts)
Current Last Year % Increase
-------------------------------------------------------------------------
System Sales $168,165 $117,967 43%
Revenue 29,455 9,665 205%
EBITDA 7,808 4,949 58%
Net Income 2,145 1,945 10%
Basic earnings per share ($) 0.28 0.26 8%
EBITDA per share ($) 1.00 0.67 49%
-------------------------------------------------------------------------
Afton Food Group Ltd. (TSE: AFF) today announced the Company's fourth
quarter and year-end results. Strong gains in revenues and profitability were
posted for the three and twelve month periods, ended December 31, 2000.
With the acquisition of Robin's Donuts, the Company doubled its number of
franchised locations and substantially increased system sales, revenues and
earnings. "Afton had another solid year of growth. The Company is now
positioned to aggressively implement the twinning of its 241 Pizza brand with
its Robin's locations across the Country. To date, the Company has opened four
twinned locations with very positive results. With the opening of additional
twinned and stand-alone locations, along with its current cost cutting
measures, the Company expects to further improve profitability" commented
Robert Macdonald, President and Chief Executive Officer, Afton Food Group Ltd.
"The Company expects to continue to grow organically with its existing
brands and to complete additional strategic acquisitions. The Company has
grown from a standing start six years ago into one of the top 10 Companies in
the Quick Service Restaurant industry. As more investors become aware of the
Company's exciting growth strategy, the Company believes this recognition will
be reflected positively in its share price." commented Macdonald.
About Afton Food Group
Afton has more than 500 corporate and franchised locations operating or
underdevelopment coast-to-coast in Canada, including locations in the United
States and Saudi Arabia. Afton is one of the 10 largest Quick Service
Restaurant Companies in Canada, whose brands include: 241 Pizza(R), Robin's
Donuts(R), Ruffage(R), Donut Delite Cafe and Mrs. Powell's Bakery Eatery(R).
These brands are expected to generate approximately $200 million in system
sales and more than $30 million in revenue for Afton on an annualized basis.
Full financial results attached.
Management's Discussion and Analysis of Afton Food Group Ltd.'s Fourth
Quarter Results:
Results of Operations:
----------------------
The Results of Operations increased significantly as a result of the
acquisition of Robin's Foods Inc. System sales for the three months ended
December 31, 2000, have increased to in excess of $46.6 million (in excess of
$168.1 million for the twelve months of this year), which represents an
increase of 43% over the fourth quarter of 1999 (43% increase for the twelve
months of this year). Franchise revenue for the fourth quarter of 2000
increased by 195% over the fourth quarter last year and has increased by 140%
for the twelve months of this year over last year. Corporate store sales
increased substantially during the current twelve months as a result of the
number of corporate stores purchased as part of the acquisition of Robin's
Foods. EBITDA rose by 120% and 58% to $2,619,923 and $7,807,633 respectively
for the fourth quarter and for the twelve months of this year over last year.
Earnings per share was $0.10 in the fourth quarter of 2000 compared to $0.06
in 1999 and is $0.28 for the twelve months of this year, which has increased
from $0.26 in 1999. The EBITDA per share rose from $0.16 to $0.34 for the
fourth quarter and from $0.67 to $1.00 for the twelve months ended. The
Company believes this is a better indicator of its continued corporate growth
and profitability.
Financial Position
------------------
The balance sheet has changed significantly as a result of the
acquisition of Robin's Foods Inc. The legal, financing and other costs of the
acquisition have been properly recorded as deferred financing charges on the
balance sheet. The Company has a cash position of $1,233,952 as at December
31, 2000. The Company's cash flow requirements from on-going operations will
be provided through existing working capital, cash flow from operations, the
sale of new stores and if required an unused line of credit.
Effective April 1, 2000, the Company purchased 100% of the outstanding
share capital of Robin's Foods Inc. The acquisition has been accounted for as
a share purchase and the accompanying statements reflect the results of
operations for the nine months from the date of purchase.
The purchase price was allocated in the accounts based on the estimated
fair value of the assets acquired less liabilities assumed as follows:
Net current assets $950,950
Capital assets $2,945,682
Other assets $389,388
Franchise agreements and trademarks $36,349,125
Bank Indebtedness $(2,805,380)
Long term liabilities $(2,079,334)
(x)Future Income taxes $(15,909,000)
---------------------------------------------------------------
Total Purchase Price $19,841,431
---------------------------------------------------------------
Purchase Price satisfied as follows:
Issuance of common shares of Afton Food Group Ltd. $(750,000)
Payment of Cash $(19,091,431)
---------------------------------------------------------------
Total satisfied $(19,841,431)
---------------------------------------------------------------
The acquisition of Robin's Foods Inc. and the consolidation of the
Company's debt was financed through a combination of $21.5 million senior debt
facility from Rabobank Canada, a private placement of securities comprised of
$2.6 million of special warrants and $5.2 million in special warrants, a
$600,000 vendor take-back note and the issuance of $750,000 of common shares
to the principals of Robin's. For further information on the acquisition of
Robin's Foods, please refer to the press release dated March 1, 2000.
Accounting Policy Change
------------------------
Effective January 1, 2000, the Company adopted, retroactively by
restating prior years, the new GAAP recommendations of the Canadian Institute
of Chartered Accountants with respect to accounting for income taxes. The
result was to increase opening retained earnings by $2,440,678 and decrease
future tax liabilities by a similar amount.
Under the new liability method, future tax assets and liabilities are
determined based on reporting differences between the basis of assets and
liabilities used for financial statements and income tax purposes. Such
differences are then measured using substantially enacted tax rates and laws
that will be in effect when these differences are expected to reverse. Prior
to adoption of the new recommendations, income tax expense was determined
using the deferral method of tax allocation.
(x)The new policy also requires the Company to record the effect that the
goodwill/franchise agreements, which arises from the purchase of Robin's
Shares, which are non-deductible for tax purposes, will have on future
income taxes. The effect was to increase franchise agreements and record
future income taxes of $15,909,000, which, when and if exigible, would be
charged against income at the rate of $99,500 per quarter.
Detailed financial results are disclosed below and include the operations
of Robin's Foods since its acquisition on March 31, 2000. Certain of the
groupings for Cost of Sales and General and administration from prior quarters
have been regrouped to conform with the year-end disclosure.
Statement of Earnings (in Cdn $'s)
For the period ended 3 Months Ended Year End
December 31 2000 1999 2000 1999
-------------------------------------------------------------------------
System Sales 46,649,367 32,709,695 168,165,845 117,967,750
-------------------------------------------------------------------------
Revenue 9,441,800 2,875,768 29,454,625 9,664,503
Cost of sales 5,310,280 552,669 16,201,601 1,959,104
-------------------------------------------------------------------------
Gross profit 4,131,520 2,323,099 13,253,024 7,705,399
Foreign exchange 20,831 62,346 (91,903) 100,050
General and
administration 1,490,766 1,069,167 5,537,294 2,656,031
-------------------------------------------------------------------------
1,511,597 1,131,513 5,445,391 2,756,081
EBITDA 2,619,923 1,191,586 7,807,633 4,949,318
Interest 1,121,800 226,960 2,526,773 852,348
Amortization and
depreciation 533,229 141,993 1,791,145 541,124
-------------------------------------------------------------------------
1,655,029 368,953 4,317,918 1,393,472
-------------------------------------------------------------------------
Net income before
taxes 964,894 822,633 3,489,715 3,555,846
Income taxes 237,945 353,000 1,345,200 1,611,000
-------------------------------------------------------------------------
Net earnings for
the period 726,949 469,633 2,144,515 1,944,846
Opening retained
earnings 5,788,002 3,843,156
-------------------------------------------------------------------------
Ending retained earnings 7,932,517 5,788,002
-------------------------------------------------------------------------
Basic earnings
per share 10 cents 6 cents $0.28 26 cents
-------------------------------------------------------------------------
-------------------------------------------------------------------------
EBITDA per Share 34 cents 16 cents $1.00 67 cents
-------------------------------------------------------------------------
Balance Sheet (in Cdn $'s)
As at December 31
-----------------
2000 1999
-------------------------------------------------------------------------
Assets:
Cash and cash equivalents 1,233,952 1,898,773
Accounts receivable 2,104,012 848,121
Inventory 384,371 62,528
Deferred franchise costs 1,065,169 105,000
Prepaid & other 467,562 584,913
Income taxes recoverable 65,702 -
Loans and notes receivable, current portion 2,398,199 2,627,307
-------------------------------------------------------------------------
Total Current Assets 7,718,967 6,126,642
-------------------------------------------------------------------------
Loans and notes receivable, long term portion 833,086 -
Capital assets 1,827,703 566,615
Franchise rights & trademarks 50,450,903 15,394,928
Other assets 2,069,807 295,700
-------------------------------------------------------------------------
Total Long Term Assets 55,181,499 16,257,243
-------------------------------------------------------------------------
Total Assets 62,900,466 22,383,885
-------------------------------------------------------------------------
Liabilities:
Accounts payable 2,145,148 812,728
Income taxes payable - 127,329
Unearned revenue 476,405 176,685
Current portion future lease commitments 340,705 -
Current portion-long term debt 1,887,786 1,540,222
-------------------------------------------------------------------------
Total Current Liabilities 4,850,044 2,656,964
-------------------------------------------------------------------------
Royalty funding 599,767 1,386,024
Long term debt 23,282,000 5,967,930
Future lease commitments 693,729 -
Future income taxes 15,300,844 -
-------------------------------------------------------------------------
Total Long Term Liabilities 39,876,340 7,353,954
-------------------------------------------------------------------------
Shareholders' Equity:
Share capital (Note 1) 7,117,732 6,361,632
Preferred shares (Note 2) 55,833 223,333
Special warrants (Note 3) 3,068,000 -
Retained earnings 7,932,517 5,788,002
-------------------------------------------------------------------------
Total Shareholders' Equity 18,174,082 12,372,967
-------------------------------------------------------------------------
Total Liabilities & Shareholders' Equity 62,900,466 22,383,885
-------------------------------------------------------------------------
Statement of Cash Flows (in Cdn $'s)
For the twelve months ended December 31 2000 1999
-------------------------------------------------------------------------
Operating activities
Net earnings for the period 2,144,515 1,944,846
Amortization and depreciation 1,791,145 541,124
Other (792,000) -
Loss on sale and write-down of assets 86,864 -
Future income taxes 886,200 1,030,106
Foreign exchange (91,903) 100,051
-------------------------------------------------------------------------
4,024,821 3,616,127
Net change in non-cash working capital (56,946) 349,163
-------------------------------------------------------------------------
Cash provided by operations 3,967,875 3,965,290
-------------------------------------------------------------------------
Investing Activities
Acquisition of Robin's Foods Inc. (19,091,431) -
Acquisition of capital assets (131,500) (138,491)
Proceeds on sale of capital assets 499,258 -
Acquisition of other assets (1,841,066) (282,627)
Loans and notes receivable (213,916) (1,735,503)
-------------------------------------------------------------------------
Cash used in investing activities (20,778,655) (2,156,621)
-------------------------------------------------------------------------
Financing Activities
Repayment of bank indebtedness (2,805,380) -
Proceeds from new long term debt 27,035,597 7,500,000
Repayment of long-term debt (10,099,884) (7,022,345)
Payment of future lease commitments (326,111) -
Amortization of deferred royalty funding (786,257) (818,421)
Issuance of common shares 6,100 -
Issuance of special warrants 3,068,000 -
Redemption of preferred shares (167,500) (167,500)
-------------------------------------------------------------------------
Cash Provided by (used in)
financing activities 15,924,565 (508,266)
-------------------------------------------------------------------------
Effect of exchange rate changes on cash 221,394 (91,705)
-------------------------------------------------------------------------
Decrease in cash (664,821) 1,208,698
Cash, beginning of year 1,898,773 690,075
-------------------------------------------------------------------------
Cash, end of period 1,233,952 1,898,773
-------------------------------------------------------------------------
Cash interest paid 2,247,237 892,563
Cash income taxes paid 364,135 222,914
Non-cash investing activities
Purchase of Robin's with issuance
of common shares (750,000) -
Non-cash financing activities
Issuance of common shares for
the purchase of Robin's 750,000 -
Notes to the Financial Statements:
1) The Company is authorized to issue an unlimited number of common
shares with no par value. As of December 31, 2000, 7,902,260 shares
have been issued for total consideration of $7,111,633.
The Company has 632,500 options issued to the Stock Option Plan for
Directors, Officers and Employees all of which have been granted. The
exercise price of these options range in price from $1.00 to $1.80. In
addition, the Company issued 40,000 stock options at $1.83 to
McCarvill Corporation that expire April 1, 2003. An additional 168,429
options have been granted at an exercise price of $1.10 as part of the
Robin's Financing, these options expire on April 1, 2002.
2) The Company has 55,833 preferred shares outstanding with a value of
$1.00 per share. These shares are being redeemed at the rate of
$13,958 per month.
3) The Company has 2,471,862 special warrants outstanding. Each special
warrant entitles the holder to acquire one unit in the capital of the
Company, for no additional consideration, consisting of one common
share and one-third of one common share purchase warrant. Each whole
purchase warrant will entitle the holder to purchase one common share
at a price of $1.60 and will be exercisable until March 20, 2003 when
they expire. The special warrants will result in the issue of
2,471,862 common shares and 823,954 common share purchase warrants.
4) The Company has a series of common share purchase warrants
outstanding, which were issued in connection with the issue and sale
of $5,200,000 of subordinated debentures. The common share purchase
warrants entitle the holders to purchase $5,200,000 of common shares
at a variable exercise price of between $1.50 per share and $3.00 per
share based upon the Company's future financial performance and expire
on March 20, 2005.
5) Earnings per share are based on the weighted average number of common
shares outstanding 7,785,749 (1999- 7,381,900) during the year.
SOURCE Afton Food Group Ltd.
BURLINGTON, ON, April 2 /PRNewswire/ -
-------------------------------------------------------------------------
3 Months Ended December 31, 2000
(000s except per share amounts)
Current Last Year % Increase
-------------------------------------------------------------------------
System Sales $46,649 $32,709 43%
Revenue 9,442 2,876 228%
EBITDA 2,620 1,192 120%
Net Income 727 470 55%
Basic earnings per share ($) 0.10 0.06 67%
EBITDA per share ($) 0.34 0.16 113%
-------------------------------------------------------------------------
-------------------------------------------------------------------------
12 Months Ended December 31, 2000
(000s except per share amounts)
Current Last Year % Increase
-------------------------------------------------------------------------
System Sales $168,165 $117,967 43%
Revenue 29,455 9,665 205%
EBITDA 7,808 4,949 58%
Net Income 2,145 1,945 10%
Basic earnings per share ($) 0.28 0.26 8%
EBITDA per share ($) 1.00 0.67 49%
-------------------------------------------------------------------------
Afton Food Group Ltd. (TSE: AFF) today announced the Company's fourth
quarter and year-end results. Strong gains in revenues and profitability were
posted for the three and twelve month periods, ended December 31, 2000.
With the acquisition of Robin's Donuts, the Company doubled its number of
franchised locations and substantially increased system sales, revenues and
earnings. "Afton had another solid year of growth. The Company is now
positioned to aggressively implement the twinning of its 241 Pizza brand with
its Robin's locations across the Country. To date, the Company has opened four
twinned locations with very positive results. With the opening of additional
twinned and stand-alone locations, along with its current cost cutting
measures, the Company expects to further improve profitability" commented
Robert Macdonald, President and Chief Executive Officer, Afton Food Group Ltd.
"The Company expects to continue to grow organically with its existing
brands and to complete additional strategic acquisitions. The Company has
grown from a standing start six years ago into one of the top 10 Companies in
the Quick Service Restaurant industry. As more investors become aware of the
Company's exciting growth strategy, the Company believes this recognition will
be reflected positively in its share price." commented Macdonald.
About Afton Food Group
Afton has more than 500 corporate and franchised locations operating or
underdevelopment coast-to-coast in Canada, including locations in the United
States and Saudi Arabia. Afton is one of the 10 largest Quick Service
Restaurant Companies in Canada, whose brands include: 241 Pizza(R), Robin's
Donuts(R), Ruffage(R), Donut Delite Cafe and Mrs. Powell's Bakery Eatery(R).
These brands are expected to generate approximately $200 million in system
sales and more than $30 million in revenue for Afton on an annualized basis.
Full financial results attached.
Management's Discussion and Analysis of Afton Food Group Ltd.'s Fourth
Quarter Results:
Results of Operations:
----------------------
The Results of Operations increased significantly as a result of the
acquisition of Robin's Foods Inc. System sales for the three months ended
December 31, 2000, have increased to in excess of $46.6 million (in excess of
$168.1 million for the twelve months of this year), which represents an
increase of 43% over the fourth quarter of 1999 (43% increase for the twelve
months of this year). Franchise revenue for the fourth quarter of 2000
increased by 195% over the fourth quarter last year and has increased by 140%
for the twelve months of this year over last year. Corporate store sales
increased substantially during the current twelve months as a result of the
number of corporate stores purchased as part of the acquisition of Robin's
Foods. EBITDA rose by 120% and 58% to $2,619,923 and $7,807,633 respectively
for the fourth quarter and for the twelve months of this year over last year.
Earnings per share was $0.10 in the fourth quarter of 2000 compared to $0.06
in 1999 and is $0.28 for the twelve months of this year, which has increased
from $0.26 in 1999. The EBITDA per share rose from $0.16 to $0.34 for the
fourth quarter and from $0.67 to $1.00 for the twelve months ended. The
Company believes this is a better indicator of its continued corporate growth
and profitability.
Financial Position
------------------
The balance sheet has changed significantly as a result of the
acquisition of Robin's Foods Inc. The legal, financing and other costs of the
acquisition have been properly recorded as deferred financing charges on the
balance sheet. The Company has a cash position of $1,233,952 as at December
31, 2000. The Company's cash flow requirements from on-going operations will
be provided through existing working capital, cash flow from operations, the
sale of new stores and if required an unused line of credit.
Effective April 1, 2000, the Company purchased 100% of the outstanding
share capital of Robin's Foods Inc. The acquisition has been accounted for as
a share purchase and the accompanying statements reflect the results of
operations for the nine months from the date of purchase.
The purchase price was allocated in the accounts based on the estimated
fair value of the assets acquired less liabilities assumed as follows:
Net current assets $950,950
Capital assets $2,945,682
Other assets $389,388
Franchise agreements and trademarks $36,349,125
Bank Indebtedness $(2,805,380)
Long term liabilities $(2,079,334)
(x)Future Income taxes $(15,909,000)
---------------------------------------------------------------
Total Purchase Price $19,841,431
---------------------------------------------------------------
Purchase Price satisfied as follows:
Issuance of common shares of Afton Food Group Ltd. $(750,000)
Payment of Cash $(19,091,431)
---------------------------------------------------------------
Total satisfied $(19,841,431)
---------------------------------------------------------------
The acquisition of Robin's Foods Inc. and the consolidation of the
Company's debt was financed through a combination of $21.5 million senior debt
facility from Rabobank Canada, a private placement of securities comprised of
$2.6 million of special warrants and $5.2 million in special warrants, a
$600,000 vendor take-back note and the issuance of $750,000 of common shares
to the principals of Robin's. For further information on the acquisition of
Robin's Foods, please refer to the press release dated March 1, 2000.
Accounting Policy Change
------------------------
Effective January 1, 2000, the Company adopted, retroactively by
restating prior years, the new GAAP recommendations of the Canadian Institute
of Chartered Accountants with respect to accounting for income taxes. The
result was to increase opening retained earnings by $2,440,678 and decrease
future tax liabilities by a similar amount.
Under the new liability method, future tax assets and liabilities are
determined based on reporting differences between the basis of assets and
liabilities used for financial statements and income tax purposes. Such
differences are then measured using substantially enacted tax rates and laws
that will be in effect when these differences are expected to reverse. Prior
to adoption of the new recommendations, income tax expense was determined
using the deferral method of tax allocation.
(x)The new policy also requires the Company to record the effect that the
goodwill/franchise agreements, which arises from the purchase of Robin's
Shares, which are non-deductible for tax purposes, will have on future
income taxes. The effect was to increase franchise agreements and record
future income taxes of $15,909,000, which, when and if exigible, would be
charged against income at the rate of $99,500 per quarter.
Detailed financial results are disclosed below and include the operations
of Robin's Foods since its acquisition on March 31, 2000. Certain of the
groupings for Cost of Sales and General and administration from prior quarters
have been regrouped to conform with the year-end disclosure.
Statement of Earnings (in Cdn $'s)
For the period ended 3 Months Ended Year End
December 31 2000 1999 2000 1999
-------------------------------------------------------------------------
System Sales 46,649,367 32,709,695 168,165,845 117,967,750
-------------------------------------------------------------------------
Revenue 9,441,800 2,875,768 29,454,625 9,664,503
Cost of sales 5,310,280 552,669 16,201,601 1,959,104
-------------------------------------------------------------------------
Gross profit 4,131,520 2,323,099 13,253,024 7,705,399
Foreign exchange 20,831 62,346 (91,903) 100,050
General and
administration 1,490,766 1,069,167 5,537,294 2,656,031
-------------------------------------------------------------------------
1,511,597 1,131,513 5,445,391 2,756,081
EBITDA 2,619,923 1,191,586 7,807,633 4,949,318
Interest 1,121,800 226,960 2,526,773 852,348
Amortization and
depreciation 533,229 141,993 1,791,145 541,124
-------------------------------------------------------------------------
1,655,029 368,953 4,317,918 1,393,472
-------------------------------------------------------------------------
Net income before
taxes 964,894 822,633 3,489,715 3,555,846
Income taxes 237,945 353,000 1,345,200 1,611,000
-------------------------------------------------------------------------
Net earnings for
the period 726,949 469,633 2,144,515 1,944,846
Opening retained
earnings 5,788,002 3,843,156
-------------------------------------------------------------------------
Ending retained earnings 7,932,517 5,788,002
-------------------------------------------------------------------------
Basic earnings
per share 10 cents 6 cents $0.28 26 cents
-------------------------------------------------------------------------
-------------------------------------------------------------------------
EBITDA per Share 34 cents 16 cents $1.00 67 cents
-------------------------------------------------------------------------
Balance Sheet (in Cdn $'s)
As at December 31
-----------------
2000 1999
-------------------------------------------------------------------------
Assets:
Cash and cash equivalents 1,233,952 1,898,773
Accounts receivable 2,104,012 848,121
Inventory 384,371 62,528
Deferred franchise costs 1,065,169 105,000
Prepaid & other 467,562 584,913
Income taxes recoverable 65,702 -
Loans and notes receivable, current portion 2,398,199 2,627,307
-------------------------------------------------------------------------
Total Current Assets 7,718,967 6,126,642
-------------------------------------------------------------------------
Loans and notes receivable, long term portion 833,086 -
Capital assets 1,827,703 566,615
Franchise rights & trademarks 50,450,903 15,394,928
Other assets 2,069,807 295,700
-------------------------------------------------------------------------
Total Long Term Assets 55,181,499 16,257,243
-------------------------------------------------------------------------
Total Assets 62,900,466 22,383,885
-------------------------------------------------------------------------
Liabilities:
Accounts payable 2,145,148 812,728
Income taxes payable - 127,329
Unearned revenue 476,405 176,685
Current portion future lease commitments 340,705 -
Current portion-long term debt 1,887,786 1,540,222
-------------------------------------------------------------------------
Total Current Liabilities 4,850,044 2,656,964
-------------------------------------------------------------------------
Royalty funding 599,767 1,386,024
Long term debt 23,282,000 5,967,930
Future lease commitments 693,729 -
Future income taxes 15,300,844 -
-------------------------------------------------------------------------
Total Long Term Liabilities 39,876,340 7,353,954
-------------------------------------------------------------------------
Shareholders' Equity:
Share capital (Note 1) 7,117,732 6,361,632
Preferred shares (Note 2) 55,833 223,333
Special warrants (Note 3) 3,068,000 -
Retained earnings 7,932,517 5,788,002
-------------------------------------------------------------------------
Total Shareholders' Equity 18,174,082 12,372,967
-------------------------------------------------------------------------
Total Liabilities & Shareholders' Equity 62,900,466 22,383,885
-------------------------------------------------------------------------
Statement of Cash Flows (in Cdn $'s)
For the twelve months ended December 31 2000 1999
-------------------------------------------------------------------------
Operating activities
Net earnings for the period 2,144,515 1,944,846
Amortization and depreciation 1,791,145 541,124
Other (792,000) -
Loss on sale and write-down of assets 86,864 -
Future income taxes 886,200 1,030,106
Foreign exchange (91,903) 100,051
-------------------------------------------------------------------------
4,024,821 3,616,127
Net change in non-cash working capital (56,946) 349,163
-------------------------------------------------------------------------
Cash provided by operations 3,967,875 3,965,290
-------------------------------------------------------------------------
Investing Activities
Acquisition of Robin's Foods Inc. (19,091,431) -
Acquisition of capital assets (131,500) (138,491)
Proceeds on sale of capital assets 499,258 -
Acquisition of other assets (1,841,066) (282,627)
Loans and notes receivable (213,916) (1,735,503)
-------------------------------------------------------------------------
Cash used in investing activities (20,778,655) (2,156,621)
-------------------------------------------------------------------------
Financing Activities
Repayment of bank indebtedness (2,805,380) -
Proceeds from new long term debt 27,035,597 7,500,000
Repayment of long-term debt (10,099,884) (7,022,345)
Payment of future lease commitments (326,111) -
Amortization of deferred royalty funding (786,257) (818,421)
Issuance of common shares 6,100 -
Issuance of special warrants 3,068,000 -
Redemption of preferred shares (167,500) (167,500)
-------------------------------------------------------------------------
Cash Provided by (used in)
financing activities 15,924,565 (508,266)
-------------------------------------------------------------------------
Effect of exchange rate changes on cash 221,394 (91,705)
-------------------------------------------------------------------------
Decrease in cash (664,821) 1,208,698
Cash, beginning of year 1,898,773 690,075
-------------------------------------------------------------------------
Cash, end of period 1,233,952 1,898,773
-------------------------------------------------------------------------
Cash interest paid 2,247,237 892,563
Cash income taxes paid 364,135 222,914
Non-cash investing activities
Purchase of Robin's with issuance
of common shares (750,000) -
Non-cash financing activities
Issuance of common shares for
the purchase of Robin's 750,000 -
Notes to the Financial Statements:
1) The Company is authorized to issue an unlimited number of common
shares with no par value. As of December 31, 2000, 7,902,260 shares
have been issued for total consideration of $7,111,633.
The Company has 632,500 options issued to the Stock Option Plan for
Directors, Officers and Employees all of which have been granted. The
exercise price of these options range in price from $1.00 to $1.80. In
addition, the Company issued 40,000 stock options at $1.83 to
McCarvill Corporation that expire April 1, 2003. An additional 168,429
options have been granted at an exercise price of $1.10 as part of the
Robin's Financing, these options expire on April 1, 2002.
2) The Company has 55,833 preferred shares outstanding with a value of
$1.00 per share. These shares are being redeemed at the rate of
$13,958 per month.
3) The Company has 2,471,862 special warrants outstanding. Each special
warrant entitles the holder to acquire one unit in the capital of the
Company, for no additional consideration, consisting of one common
share and one-third of one common share purchase warrant. Each whole
purchase warrant will entitle the holder to purchase one common share
at a price of $1.60 and will be exercisable until March 20, 2003 when
they expire. The special warrants will result in the issue of
2,471,862 common shares and 823,954 common share purchase warrants.
4) The Company has a series of common share purchase warrants
outstanding, which were issued in connection with the issue and sale
of $5,200,000 of subordinated debentures. The common share purchase
warrants entitle the holders to purchase $5,200,000 of common shares
at a variable exercise price of between $1.50 per share and $3.00 per
share based upon the Company's future financial performance and expire
on March 20, 2005.
5) Earnings per share are based on the weighted average number of common
shares outstanding 7,785,749 (1999- 7,381,900) during the year.
SOURCE Afton Food Group Ltd.
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