Samuel Manu-Tech Inc. - First quarter results

Apr 27, 2001, 01:00 ET from Samuel Manu-Tech Inc.

    TORONTO, April 27 /PRNewswire/ -
 
     RESULTS OF OPERATIONS
 
     Net Sales
 
     Sales for the three months to March 31, 2001 were $186.6 million, which
 represents a decrease of $19.2 million or 9.3% from the $205.9 million
 achieved in the comparable period of last year. The slowing North American
 economy which resulted in weak business conditions in the final six months of
 last year continued to impact the Company in the first quarter of 2001 with
 all segments recording lower sales.
     Sales of the Packaging segment, at $95.9 million, were down $8.1 million
 or 7.8% with weakness noted in all geographic areas. Metal Processing sales
 for the quarter were $66.4 million, which is down 10.4% due primarily to lower
 sales of roll formed products. Distribution sales were $24.4 million which is
 down $3.5 million or 12.4% from last year with both the U.S. and Canadian
 operations contributing to the shortfall.
 
     Earnings
 
     Earnings before goodwill amortization for the first three months of 2001
 were $3.1 million or $0.09 per share which represents a decrease of 62.8% from
 the $8.3 million or $0.24 per share earned last year. Net earnings for the
 quarter were $2.7 million or $0.08 per share compared to the $7.9 million or
 $0.23 per share achieved in the comparable quarter of last year.
     Operating profits for the first quarter amounted to $7.7 million which is
 $7.3 million or 48.8% below last year.
     The Packaging segment had profits of $2.3 million which reflects a
 decrease of $2.2 million or 48.3% from the $4.5 million earned last year.
 Although there was a modest improvement in profit at the U.K. unit, overall
 Packaging earnings were down due to reduced demand for steel strapping in
 Canada and the continuing under-performance in the U.S. related primarily to
 plastic strapping activities. While the U.S. operation achieved savings in the
 quarter related to the December 2000 restructuring, the major benefits are not
 expected until the second half of 2001.
     The Metal Processing segment generated profits of $6.3 million which is
 37.6% below the comparable quarter of last year. Earnings from roll formed
 products declined due to reduced demand from the railroad industry while
 profits from pickling operations were also down due to soft market conditions
 in the North American auto industry. Profits from the sale of stainless steel
 pipe and tube were higher due to improved margins on specialty pipe products.
     Distribution earnings, at $0.2 million, are substantially below the $1.5
 million earned in the comparable quarter last year and reflect soft market
 conditions at both the Canadian and U.S. units.
 
     Financial Condition
 
     Cash flow before changes in non-cash working capital for the first
 quarter of 2001 amounted to $10.4 million which is down $4.4 million from
 $14.8 million in the comparable quarter of last year. Overall cash flow from
 operating activities increased to $14.0 million from $11.1 million last year
 reflecting reduced requirements for non-cash working capital.
     Cash used for investing activities at $13.5 million is well above last
 year's $3.4 million and is due to increased spending on fixed assets and
 business acquisitions. Cash flow from financing activities amounted to $8.8
 million in the quarter compared to an outflow of $6.1 million last year.
 During the quarter, the Company spent $0.6 million on the purchase of 103,100
 shares under its Normal Course Issuer Bid compared to $0.8 million last year.
 Dividends paid on common shares amounted to $1.7 million in the quarter which
 is the same as last year reflecting a dividend of $0.05 per share. In
 aggregate, cash and cash equivalents increased by $9.6 million compared to
 $1.8 million last year with the improvement resulting from higher long-term
 borrowings.
 
     Capital Expenditures
 
     Capital expenditures in the three months to March 31, 2001 were $10.9
 million compared to $3.7 million during the first quarter last year.
 Expenditures in the current quarter related primarily to the new pickling line
 at Nanticoke, Ontario and upgrades to plastic strapping machines in the United
 States.
 
     Business Acquisition
 
     On March 12, 2001, the acquisition of the business and assets of Surrey
 Wire Rope Ltd. ("Surrey") and Pearce Industries Ltd. ("Pearce") was completed
 at a cost of $2.7 million. Surrey and Pearce based in Surrey, British
 Columbia, are involved in the distribution of wire rope products in British
 Columbia, Alberta and the U.S. Pacific Northwest and will complement the
 activities of the Company's Unalloy-IWRC Distribution unit.
 
     Working Capital
 
     Working capital at March 31, 2001 was $171.3 million, an increase of
 $12.2 million from the year-end position, with an increase in cash,
 receivables, inventories and prepaids, offset by higher payables. Overall, the
 working capital ratio of 2.2 remained unchanged from both the year-end
 position as well as the end of the first quarter last year.
 
     Net Borrowings to Capitalization
 
     The Company's net borrowings as at March 31, 2001 amounted to $219.5
 million, an increase of $10.8 million from $208.7 million at December 31,
 2000. This increase reflects the higher spending on fixed assets and business
 acquisitions. The net debt to capitalization ratio at the end of the quarter
 increased to 49.6% compared to 48.5% at year end.
 
     Normal Course Issuer Bid
 
     Under the Company's Normal Course Issuer Bid 103,100 common shares of
 Samuel Manu-Tech Inc. were purchased during the quarter bringing the
 cumulative total under the Issuer Bid to 932,100 shares. The Issuer Bid
 approves the purchase for the Company of up to 1,713,277 common shares during
 the one-year period commencing August 19, 2000.
 
     Outlook
 
     Although difficult business conditions are expected to continue in the
 second quarter, the Company remains optimistic for improved performance in the
 second half of the year.
 
 
 
 
     CONSOLIDATED STATEMENTS OF EARNINGS
     -------------------------------------------------------------------------
     -------------------------------------------------------------------------
     Three Months ended March 31, 2001 and 2000 (unaudited)
     (thousands of dollars except per share amounts)
 
     -------------------------------------------------------------------------
                                                               1ST QUARTER
     -------------------------------------------------------------------------
                                                               2001      2000
     -------------------------------------------------------------------------
 
     NET SALES                                              186,639   205,872
     COSTS (INCOME) AND EXPENSES:
       Cost of sales, selling & administration              172,053   184,517
       Depreciation and amortization                          6,870     6,296
       Interest on long-term debt                             3,143     2,860
       Interest on short-term debt                              339       287
       Interest income                                          (79)     (113)
     -------------------------------------------------------------------------
                                                            182,326   193,847
     -------------------------------------------------------------------------
 
     EARNINGS BEFORE INCOME TAXES AND GOODWILL
      AMORTIZATION                                            4,313    12,025
 
     INCOME TAXES:
       Current                                                  797     3,679
       Future                                                   416        21
     -------------------------------------------------------------------------
                                                              1,213     3,700
     -------------------------------------------------------------------------
 
     EARNINGS BEFORE GOODWILL AMORTIZATION                    3,100     8,325
     GOODWILL AMORTIZATION, net of income taxes                 401       442
     -------------------------------------------------------------------------
 
     NET EARNINGS                                             2,699     7,883
     -------------------------------------------------------------------------
     -------------------------------------------------------------------------
     BASIC AND DILUTED EARNINGS PER SHARE BEFORE GOODWILL
      AMORTIZATION                                             0.09      0.24
     -------------------------------------------------------------------------
     -------------------------------------------------------------------------
     BASIC AND DILUTED EARNINGS PER SHARE                      0.08      0.23
     -------------------------------------------------------------------------
     -------------------------------------------------------------------------
 
     See accompanying notes to consolidated financial statements.
 
 
     SEGMENTED INFORMATION
     -------------------------------------------------------------------------
     -------------------------------------------------------------------------
     Three Months ended March 31, 2001 and 2000 (unaudited)
     (thousands of dollars )
     -------------------------------------------------------------------------
                                                               1ST QUARTER
     -------------------------------------------------------------------------
     SALES                                                     2001      2000
     -------------------------------------------------------------------------
 
     Packaging                                               95,857   103,920
     Metal Processing                                        66,361    74,067
     Distribution                                            24,421    27,885
     -------------------------------------------------------------------------
     Consolidated                                           186,639   205,872
     -------------------------------------------------------------------------
     -------------------------------------------------------------------------
 
 
     -------------------------------------------------------------------------
                                                               1ST QUARTER
     -------------------------------------------------------------------------
     EARNINGS BEFORE INTEREST, INCOME TAXES
     AND GOODWILL AMORTIZATION                                 2001      2000
     -------------------------------------------------------------------------
 
     Packaging                                                2,346     4,536
     Metal Processing                                         6,347    10,177
     Distribution                                               220     1,486
     Corporate                                               (1,197)   (1,140)
     -------------------------------------------------------------------------
     Earnings before interest, income taxes and goodwill
      amortization                                            7,716    15,059
     Interest on long-term debt                               3,143     2,860
     Interest on short-term debt                                339       287
     Interest income                                            (79)     (113)
     -------------------------------------------------------------------------
     Earnings before income taxes and goodwill amortization   4,313    12,025
     -------------------------------------------------------------------------
     -------------------------------------------------------------------------
 
     See accompanying notes to consolidated financial statements.
 
 
     CONSOLIDATED BALANCE SHEETS
     -------------------------------------------------------------------------
     -------------------------------------------------------------------------
     March 31, 2001 and December 31, 2000 (unaudited)
     (thousands of dollars)
 
     -------------------------------------------------------------------------
                                                            March 31, Dec. 31,
                                                              2001      2000
     -------------------------------------------------------------------------
     ASSETS
 
     CURRENT ASSETS:
       Cash and short-term deposits                          16,330     7,009
       Accounts receivable                                  116,711   114,405
       Inventories                                          164,124   160,914
       Prepaid expenses and sundry                            3,892     3,607
       Income taxes receivable                                4,193       555
       Future income taxes                                    9,207     9,343
     -------------------------------------------------------------------------
                                                            314,457   295,833
 
     FIXED ASSETS                                           210,787   201,741
     FUTURE INCOME TAXES                                      9,391    10,617
     DEFERRED PENSION COSTS                                   4,407     4,372
     INTANGIBLE ASSETS                                       42,795    42,535
     -------------------------------------------------------------------------
                                                            581,837   555,098
     -------------------------------------------------------------------------
     -------------------------------------------------------------------------
 
     LIABILITIES AND SHAREHOLDERS' EQUITY
 
     CURRENT LIABILITIES:
       Bank indebtedness                                     36,401    36,722
       Accounts payable and accrued liabilities              92,466    86,329
       Dividends payable                                      1,669     1,673
       Current portion of long-term debt                     12,610    11,996
     -------------------------------------------------------------------------
                                                            143,146   136,720
 
     LONG-TERM DEBT                                         186,816   166,984
     POST-RETIREMENT BENEFITS OTHER THAN PENSIONS             3,840     3,751
     FUTURE INCOME TAXES                                     24,888    25,834
     -------------------------------------------------------------------------
                                                            358,690   333,289
 
     SHAREHOLDERS' EQUITY:
       Capital stock                                         26,868    26,951
       Retained earnings                                    190,080   189,552
       Cumulative translation adjustment                      6,199     5,306
     -------------------------------------------------------------------------
                                                            223,147   221,809
     -------------------------------------------------------------------------
                                                            581,837   555,098
     -------------------------------------------------------------------------
     -------------------------------------------------------------------------
 
     See accompanying notes to consolidated financial statements.
 
     CONSOLIDATED STATEMENTS OF RETAINED EARNINGS
     -------------------------------------------------------------------------
     -------------------------------------------------------------------------
     Three Months ended March 31, 2001 and 2000 (unaudited)
     (thousands of dollars)
 
     -------------------------------------------------------------------------
                                                               2001      2000
     -------------------------------------------------------------------------
 
     RETAINED EARNINGS, BEGINNING OF PERIOD                 189,552   193,957
     CHANGE IN ACCOUNTING POLICY FOR INCOME TAXES                 -   (10,004)
     NET EARNINGS                                             2,699     7,883
     DIVIDENDS PAID ON COMMON SHARES                         (1,661)   (1,717)
     SHARES PURCHASED AND CANCELLED                            (510)     (732)
     -------------------------------------------------------------------------
     RETAINED EARNINGS, END OF PERIOD                       190,080   189,387
     -------------------------------------------------------------------------
     -------------------------------------------------------------------------
 
     See accompanying notes to consolidated financial statements.
 
 
     CONSOLIDATED CASH FLOW STATEMENTS
     -------------------------------------------------------------------------
     -------------------------------------------------------------------------
 
     (thousands of dollars)
 
     -------------------------------------------------------------------------
                                                               1ST QUARTER
     -------------------------------------------------------------------------
                                                               2001      2000
     -------------------------------------------------------------------------
     CASH FLOWS FROM (USED IN) OPERATING ACTIVITIES:
       Net Earnings                                           2,699     7,883
       Items not involving cash:
         Depreciation and amortization                        6,870     6,296
         Goodwill amortization                                  484       592
         Future income taxes                                    416        21
         Decrease (increase) in deferred pension costs          (34)      120
         Decrease in post-retirement benefits other than
          pensions                                              (72)     (125)
     -------------------------------------------------------------------------
                                                             10,363    14,787
       Change in non-cash operating working capital:
         Increase in accounts receivable                       (426)   (6,940)
         Decrease (increase) in inventories                   2,737    (4,672)
         Increase in prepaid expenses and sundry               (224)     (207)
         Decrease (increase) in income taxes receivable      (3,483)    1,935
         Increase in accounts payable and accrued
          liabilities                                         4,988     6,174
     -------------------------------------------------------------------------
                                                             13,955    11,077
     CASH FLOWS FROM (USED IN) INVESTING ACTIVITIES:
       Proceeds on sale of fixed assets                          76       313
       Loss (gain) on disposal of fixed assets                   12       (20)
       Purchase of fixed assets and intangible assets       (10,877)   (3,725)
       Business acquisition                                  (2,701)        -
     -------------------------------------------------------------------------
                                                            (13,490)   (3,432)
     CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES:
       Purchase of common shares                               (593)     (828)
       Increase in long-term debt                            11,047         -
       Repayment of long-term debt                                -    (3,585)
       Dividends paid on common shares                       (1,661)   (1,717)
     -------------------------------------------------------------------------
                                                              8,793    (6,130)
 
     EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH
      EQUIVALENTS                                               384       235
     -------------------------------------------------------------------------
     INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS         9,642     1,750
     CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD         (29,713)   (9,525)
     -------------------------------------------------------------------------
     CASH AND CASH EQUIVALENTS, END OF PERIOD               (20,071)   (7,775)
     -------------------------------------------------------------------------
     -------------------------------------------------------------------------
 
     Cash and cash equivalents is comprised of cash and short-term deposits
     less bank indebtedness.
 
     See accompanying notes to consolidated financial statements.
 
 
     NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
     ------------------------------------------------------------------------
     ------------------------------------------------------------------------
     Three Months ended March 31, 2001 and 2000 (unaudited)
     (thousands of dollars)
 
 
     1.  SIGNIFICANT ACCOUNTING POLICIES:
 
     The unaudited consolidated financial statements are prepared in
 accordance with accounting principles generally accepted in Canada. These
 financial statements should be read in conjunction with the Company's audited
 annual financial statements for the year ended December 31, 2000. Effective
 January 1, 2001 the Company adopted the new recommendations of the CICA with
 respect to the calculation of earnings per share. The adoption of these
 recommendations had no effect on basic earnings per share, and the assumed
 exercise of oustanding stock options would not have a dilutive effect. All
 other accounting policies and methods of their application used in the interim
 financial statements are consistent with the Company's annual financial
 statements.
 
     2.  COMMON STOCK:
 
     ------------------------------------------------------------------------
                                                   March 31,        Dec. 31,
                                                      2001            2000
     ------------------------------------------------------------------------
     ------------------------------------------------------------------------
 
     Number of common shares outstanding          33,197,840     33,300,940
     Number of options outstanding                   671,000        671,000
     ------------------------------------------------------------------------
     ------------------------------------------------------------------------
 
 
     3.  BUSINESS ACQUISITION:
 
     Effective March 12, 2001, the Company acquired the net assets and
 business of Pearce Industries Ltd. and Surrey Wire Rope Ltd. This acquisition
 has been accounted for under the purchase method of accounting and the results
 of operations since the acquisition have been included in the consolidated
 statement of earnings. Details of the consideration given and the fair value
 of net assets acquired are as follows:
 
     ------------------------------------------------------------------------
     Cash consideration                                               2,701
     ------------------------------------------------------------------------
     ------------------------------------------------------------------------
 
     Net assets acquired, at fair values:
       Inventories                                                    2,369
       Prepaid expenses                                                   4
       Fixed assets                                                     412
       Accounts payable                                                 (84)
 
     ------------------------------------------------------------------------
     Net assets acquired                                              2,701
     ------------------------------------------------------------------------
     ------------------------------------------------------------------------
 
 
 
 

SOURCE Samuel Manu-Tech Inc.
    TORONTO, April 27 /PRNewswire/ -
 
     RESULTS OF OPERATIONS
 
     Net Sales
 
     Sales for the three months to March 31, 2001 were $186.6 million, which
 represents a decrease of $19.2 million or 9.3% from the $205.9 million
 achieved in the comparable period of last year. The slowing North American
 economy which resulted in weak business conditions in the final six months of
 last year continued to impact the Company in the first quarter of 2001 with
 all segments recording lower sales.
     Sales of the Packaging segment, at $95.9 million, were down $8.1 million
 or 7.8% with weakness noted in all geographic areas. Metal Processing sales
 for the quarter were $66.4 million, which is down 10.4% due primarily to lower
 sales of roll formed products. Distribution sales were $24.4 million which is
 down $3.5 million or 12.4% from last year with both the U.S. and Canadian
 operations contributing to the shortfall.
 
     Earnings
 
     Earnings before goodwill amortization for the first three months of 2001
 were $3.1 million or $0.09 per share which represents a decrease of 62.8% from
 the $8.3 million or $0.24 per share earned last year. Net earnings for the
 quarter were $2.7 million or $0.08 per share compared to the $7.9 million or
 $0.23 per share achieved in the comparable quarter of last year.
     Operating profits for the first quarter amounted to $7.7 million which is
 $7.3 million or 48.8% below last year.
     The Packaging segment had profits of $2.3 million which reflects a
 decrease of $2.2 million or 48.3% from the $4.5 million earned last year.
 Although there was a modest improvement in profit at the U.K. unit, overall
 Packaging earnings were down due to reduced demand for steel strapping in
 Canada and the continuing under-performance in the U.S. related primarily to
 plastic strapping activities. While the U.S. operation achieved savings in the
 quarter related to the December 2000 restructuring, the major benefits are not
 expected until the second half of 2001.
     The Metal Processing segment generated profits of $6.3 million which is
 37.6% below the comparable quarter of last year. Earnings from roll formed
 products declined due to reduced demand from the railroad industry while
 profits from pickling operations were also down due to soft market conditions
 in the North American auto industry. Profits from the sale of stainless steel
 pipe and tube were higher due to improved margins on specialty pipe products.
     Distribution earnings, at $0.2 million, are substantially below the $1.5
 million earned in the comparable quarter last year and reflect soft market
 conditions at both the Canadian and U.S. units.
 
     Financial Condition
 
     Cash flow before changes in non-cash working capital for the first
 quarter of 2001 amounted to $10.4 million which is down $4.4 million from
 $14.8 million in the comparable quarter of last year. Overall cash flow from
 operating activities increased to $14.0 million from $11.1 million last year
 reflecting reduced requirements for non-cash working capital.
     Cash used for investing activities at $13.5 million is well above last
 year's $3.4 million and is due to increased spending on fixed assets and
 business acquisitions. Cash flow from financing activities amounted to $8.8
 million in the quarter compared to an outflow of $6.1 million last year.
 During the quarter, the Company spent $0.6 million on the purchase of 103,100
 shares under its Normal Course Issuer Bid compared to $0.8 million last year.
 Dividends paid on common shares amounted to $1.7 million in the quarter which
 is the same as last year reflecting a dividend of $0.05 per share. In
 aggregate, cash and cash equivalents increased by $9.6 million compared to
 $1.8 million last year with the improvement resulting from higher long-term
 borrowings.
 
     Capital Expenditures
 
     Capital expenditures in the three months to March 31, 2001 were $10.9
 million compared to $3.7 million during the first quarter last year.
 Expenditures in the current quarter related primarily to the new pickling line
 at Nanticoke, Ontario and upgrades to plastic strapping machines in the United
 States.
 
     Business Acquisition
 
     On March 12, 2001, the acquisition of the business and assets of Surrey
 Wire Rope Ltd. ("Surrey") and Pearce Industries Ltd. ("Pearce") was completed
 at a cost of $2.7 million. Surrey and Pearce based in Surrey, British
 Columbia, are involved in the distribution of wire rope products in British
 Columbia, Alberta and the U.S. Pacific Northwest and will complement the
 activities of the Company's Unalloy-IWRC Distribution unit.
 
     Working Capital
 
     Working capital at March 31, 2001 was $171.3 million, an increase of
 $12.2 million from the year-end position, with an increase in cash,
 receivables, inventories and prepaids, offset by higher payables. Overall, the
 working capital ratio of 2.2 remained unchanged from both the year-end
 position as well as the end of the first quarter last year.
 
     Net Borrowings to Capitalization
 
     The Company's net borrowings as at March 31, 2001 amounted to $219.5
 million, an increase of $10.8 million from $208.7 million at December 31,
 2000. This increase reflects the higher spending on fixed assets and business
 acquisitions. The net debt to capitalization ratio at the end of the quarter
 increased to 49.6% compared to 48.5% at year end.
 
     Normal Course Issuer Bid
 
     Under the Company's Normal Course Issuer Bid 103,100 common shares of
 Samuel Manu-Tech Inc. were purchased during the quarter bringing the
 cumulative total under the Issuer Bid to 932,100 shares. The Issuer Bid
 approves the purchase for the Company of up to 1,713,277 common shares during
 the one-year period commencing August 19, 2000.
 
     Outlook
 
     Although difficult business conditions are expected to continue in the
 second quarter, the Company remains optimistic for improved performance in the
 second half of the year.
 
 
 
 
     CONSOLIDATED STATEMENTS OF EARNINGS
     -------------------------------------------------------------------------
     -------------------------------------------------------------------------
     Three Months ended March 31, 2001 and 2000 (unaudited)
     (thousands of dollars except per share amounts)
 
     -------------------------------------------------------------------------
                                                               1ST QUARTER
     -------------------------------------------------------------------------
                                                               2001      2000
     -------------------------------------------------------------------------
 
     NET SALES                                              186,639   205,872
     COSTS (INCOME) AND EXPENSES:
       Cost of sales, selling & administration              172,053   184,517
       Depreciation and amortization                          6,870     6,296
       Interest on long-term debt                             3,143     2,860
       Interest on short-term debt                              339       287
       Interest income                                          (79)     (113)
     -------------------------------------------------------------------------
                                                            182,326   193,847
     -------------------------------------------------------------------------
 
     EARNINGS BEFORE INCOME TAXES AND GOODWILL
      AMORTIZATION                                            4,313    12,025
 
     INCOME TAXES:
       Current                                                  797     3,679
       Future                                                   416        21
     -------------------------------------------------------------------------
                                                              1,213     3,700
     -------------------------------------------------------------------------
 
     EARNINGS BEFORE GOODWILL AMORTIZATION                    3,100     8,325
     GOODWILL AMORTIZATION, net of income taxes                 401       442
     -------------------------------------------------------------------------
 
     NET EARNINGS                                             2,699     7,883
     -------------------------------------------------------------------------
     -------------------------------------------------------------------------
     BASIC AND DILUTED EARNINGS PER SHARE BEFORE GOODWILL
      AMORTIZATION                                             0.09      0.24
     -------------------------------------------------------------------------
     -------------------------------------------------------------------------
     BASIC AND DILUTED EARNINGS PER SHARE                      0.08      0.23
     -------------------------------------------------------------------------
     -------------------------------------------------------------------------
 
     See accompanying notes to consolidated financial statements.
 
 
     SEGMENTED INFORMATION
     -------------------------------------------------------------------------
     -------------------------------------------------------------------------
     Three Months ended March 31, 2001 and 2000 (unaudited)
     (thousands of dollars )
     -------------------------------------------------------------------------
                                                               1ST QUARTER
     -------------------------------------------------------------------------
     SALES                                                     2001      2000
     -------------------------------------------------------------------------
 
     Packaging                                               95,857   103,920
     Metal Processing                                        66,361    74,067
     Distribution                                            24,421    27,885
     -------------------------------------------------------------------------
     Consolidated                                           186,639   205,872
     -------------------------------------------------------------------------
     -------------------------------------------------------------------------
 
 
     -------------------------------------------------------------------------
                                                               1ST QUARTER
     -------------------------------------------------------------------------
     EARNINGS BEFORE INTEREST, INCOME TAXES
     AND GOODWILL AMORTIZATION                                 2001      2000
     -------------------------------------------------------------------------
 
     Packaging                                                2,346     4,536
     Metal Processing                                         6,347    10,177
     Distribution                                               220     1,486
     Corporate                                               (1,197)   (1,140)
     -------------------------------------------------------------------------
     Earnings before interest, income taxes and goodwill
      amortization                                            7,716    15,059
     Interest on long-term debt                               3,143     2,860
     Interest on short-term debt                                339       287
     Interest income                                            (79)     (113)
     -------------------------------------------------------------------------
     Earnings before income taxes and goodwill amortization   4,313    12,025
     -------------------------------------------------------------------------
     -------------------------------------------------------------------------
 
     See accompanying notes to consolidated financial statements.
 
 
     CONSOLIDATED BALANCE SHEETS
     -------------------------------------------------------------------------
     -------------------------------------------------------------------------
     March 31, 2001 and December 31, 2000 (unaudited)
     (thousands of dollars)
 
     -------------------------------------------------------------------------
                                                            March 31, Dec. 31,
                                                              2001      2000
     -------------------------------------------------------------------------
     ASSETS
 
     CURRENT ASSETS:
       Cash and short-term deposits                          16,330     7,009
       Accounts receivable                                  116,711   114,405
       Inventories                                          164,124   160,914
       Prepaid expenses and sundry                            3,892     3,607
       Income taxes receivable                                4,193       555
       Future income taxes                                    9,207     9,343
     -------------------------------------------------------------------------
                                                            314,457   295,833
 
     FIXED ASSETS                                           210,787   201,741
     FUTURE INCOME TAXES                                      9,391    10,617
     DEFERRED PENSION COSTS                                   4,407     4,372
     INTANGIBLE ASSETS                                       42,795    42,535
     -------------------------------------------------------------------------
                                                            581,837   555,098
     -------------------------------------------------------------------------
     -------------------------------------------------------------------------
 
     LIABILITIES AND SHAREHOLDERS' EQUITY
 
     CURRENT LIABILITIES:
       Bank indebtedness                                     36,401    36,722
       Accounts payable and accrued liabilities              92,466    86,329
       Dividends payable                                      1,669     1,673
       Current portion of long-term debt                     12,610    11,996
     -------------------------------------------------------------------------
                                                            143,146   136,720
 
     LONG-TERM DEBT                                         186,816   166,984
     POST-RETIREMENT BENEFITS OTHER THAN PENSIONS             3,840     3,751
     FUTURE INCOME TAXES                                     24,888    25,834
     -------------------------------------------------------------------------
                                                            358,690   333,289
 
     SHAREHOLDERS' EQUITY:
       Capital stock                                         26,868    26,951
       Retained earnings                                    190,080   189,552
       Cumulative translation adjustment                      6,199     5,306
     -------------------------------------------------------------------------
                                                            223,147   221,809
     -------------------------------------------------------------------------
                                                            581,837   555,098
     -------------------------------------------------------------------------
     -------------------------------------------------------------------------
 
     See accompanying notes to consolidated financial statements.
 
     CONSOLIDATED STATEMENTS OF RETAINED EARNINGS
     -------------------------------------------------------------------------
     -------------------------------------------------------------------------
     Three Months ended March 31, 2001 and 2000 (unaudited)
     (thousands of dollars)
 
     -------------------------------------------------------------------------
                                                               2001      2000
     -------------------------------------------------------------------------
 
     RETAINED EARNINGS, BEGINNING OF PERIOD                 189,552   193,957
     CHANGE IN ACCOUNTING POLICY FOR INCOME TAXES                 -   (10,004)
     NET EARNINGS                                             2,699     7,883
     DIVIDENDS PAID ON COMMON SHARES                         (1,661)   (1,717)
     SHARES PURCHASED AND CANCELLED                            (510)     (732)
     -------------------------------------------------------------------------
     RETAINED EARNINGS, END OF PERIOD                       190,080   189,387
     -------------------------------------------------------------------------
     -------------------------------------------------------------------------
 
     See accompanying notes to consolidated financial statements.
 
 
     CONSOLIDATED CASH FLOW STATEMENTS
     -------------------------------------------------------------------------
     -------------------------------------------------------------------------
 
     (thousands of dollars)
 
     -------------------------------------------------------------------------
                                                               1ST QUARTER
     -------------------------------------------------------------------------
                                                               2001      2000
     -------------------------------------------------------------------------
     CASH FLOWS FROM (USED IN) OPERATING ACTIVITIES:
       Net Earnings                                           2,699     7,883
       Items not involving cash:
         Depreciation and amortization                        6,870     6,296
         Goodwill amortization                                  484       592
         Future income taxes                                    416        21
         Decrease (increase) in deferred pension costs          (34)      120
         Decrease in post-retirement benefits other than
          pensions                                              (72)     (125)
     -------------------------------------------------------------------------
                                                             10,363    14,787
       Change in non-cash operating working capital:
         Increase in accounts receivable                       (426)   (6,940)
         Decrease (increase) in inventories                   2,737    (4,672)
         Increase in prepaid expenses and sundry               (224)     (207)
         Decrease (increase) in income taxes receivable      (3,483)    1,935
         Increase in accounts payable and accrued
          liabilities                                         4,988     6,174
     -------------------------------------------------------------------------
                                                             13,955    11,077
     CASH FLOWS FROM (USED IN) INVESTING ACTIVITIES:
       Proceeds on sale of fixed assets                          76       313
       Loss (gain) on disposal of fixed assets                   12       (20)
       Purchase of fixed assets and intangible assets       (10,877)   (3,725)
       Business acquisition                                  (2,701)        -
     -------------------------------------------------------------------------
                                                            (13,490)   (3,432)
     CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES:
       Purchase of common shares                               (593)     (828)
       Increase in long-term debt                            11,047         -
       Repayment of long-term debt                                -    (3,585)
       Dividends paid on common shares                       (1,661)   (1,717)
     -------------------------------------------------------------------------
                                                              8,793    (6,130)
 
     EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH
      EQUIVALENTS                                               384       235
     -------------------------------------------------------------------------
     INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS         9,642     1,750
     CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD         (29,713)   (9,525)
     -------------------------------------------------------------------------
     CASH AND CASH EQUIVALENTS, END OF PERIOD               (20,071)   (7,775)
     -------------------------------------------------------------------------
     -------------------------------------------------------------------------
 
     Cash and cash equivalents is comprised of cash and short-term deposits
     less bank indebtedness.
 
     See accompanying notes to consolidated financial statements.
 
 
     NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
     ------------------------------------------------------------------------
     ------------------------------------------------------------------------
     Three Months ended March 31, 2001 and 2000 (unaudited)
     (thousands of dollars)
 
 
     1.  SIGNIFICANT ACCOUNTING POLICIES:
 
     The unaudited consolidated financial statements are prepared in
 accordance with accounting principles generally accepted in Canada. These
 financial statements should be read in conjunction with the Company's audited
 annual financial statements for the year ended December 31, 2000. Effective
 January 1, 2001 the Company adopted the new recommendations of the CICA with
 respect to the calculation of earnings per share. The adoption of these
 recommendations had no effect on basic earnings per share, and the assumed
 exercise of oustanding stock options would not have a dilutive effect. All
 other accounting policies and methods of their application used in the interim
 financial statements are consistent with the Company's annual financial
 statements.
 
     2.  COMMON STOCK:
 
     ------------------------------------------------------------------------
                                                   March 31,        Dec. 31,
                                                      2001            2000
     ------------------------------------------------------------------------
     ------------------------------------------------------------------------
 
     Number of common shares outstanding          33,197,840     33,300,940
     Number of options outstanding                   671,000        671,000
     ------------------------------------------------------------------------
     ------------------------------------------------------------------------
 
 
     3.  BUSINESS ACQUISITION:
 
     Effective March 12, 2001, the Company acquired the net assets and
 business of Pearce Industries Ltd. and Surrey Wire Rope Ltd. This acquisition
 has been accounted for under the purchase method of accounting and the results
 of operations since the acquisition have been included in the consolidated
 statement of earnings. Details of the consideration given and the fair value
 of net assets acquired are as follows:
 
     ------------------------------------------------------------------------
     Cash consideration                                               2,701
     ------------------------------------------------------------------------
     ------------------------------------------------------------------------
 
     Net assets acquired, at fair values:
       Inventories                                                    2,369
       Prepaid expenses                                                   4
       Fixed assets                                                     412
       Accounts payable                                                 (84)
 
     ------------------------------------------------------------------------
     Net assets acquired                                              2,701
     ------------------------------------------------------------------------
     ------------------------------------------------------------------------
 
 
 
 SOURCE Samuel Manu-Tech Inc.