TORONTO, Mar 06, 2003 (Canada NewsWire via COMTEX) --
BFI Canada Income Fund (TSX:BFC.UN) today announced its financial results for the 4th quarter and period from April 25, 2002 to December 31, 2002 (the 'quarter'and 'period', respectively).
Financial review
Operating results for the quarter and period were strong across all business segments, and exceeded the eight-month forecast set out in the Fund's prospectus.
'Our continued focus on core operations created a solid fourth quarter performance. We are also pleased that our results for the eight-month period exceeded the forecast in the prospectus,'said Keith Carrigan, President and Chief Executive Officer. 'Going forward, our primary goal is to increase distributable cash by continuing to enhance the Fund's service offerings, improving efficiencies and growing through strategic acquisitions.'
The Fund's prospectus included a forecast for the four and eight month periods ending April 30, 2002 and December 31, 2002, respectively. Accordingly no direct comparison can be made for the quarter and period ended December 31, 2002. For comparative purposes only, the table below compares operations and free cash flow available for distribution for the quarter to three eighths of the eight month forecast ('quarter forecast') and for the period to a 251 day equivalent of the eight month forecast ('period forecast'). The forecast was not prepared as a linear compilation and the following comparison should be regarded as a measure of business trends excluding seasonality for the quarter ended December 31, 2002.
(in millions Quarter Quarter Period Period
except for Ended Forecast Ended Forecast
per unit December 31, Restated December 31, Restated
amounts) 2002 (1) 2002 (1)
------------- ------------- ------------- -------------
Revenues $ 39.7 $ 37.4 $ 108.5 $ 102.2
Operating expenses 20.9 19.1 56.9 52.0
Selling, general
and administra-
tion expenses 6.5 5.8 16.5 15.8
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Income before
the undernoted 12.3 12.5 35.1 34.4
Amortization 11.4 11.3 30.2 30.7
Interest on
long-term debt 1.1 1.2 3.1 3.4
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Income before
income taxes (0.2) (0.0) 1.8 0.3
Income tax
(recovery) expense (0.7) 0.4 (4.1) 1.1
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Net income (loss) $ 0.5 $ (0.4) $ 5.9 $ (0.8)
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Net income (loss) per trust unit, basic &diluted $ 0.02 $ (0.02) $ 0.22 $ (0.03) Number of units outstanding (thousands) 26,500 26,500 26,500 26,500
Maintenance
capital
expenditures $ 2.1 $ 2.9 $ 6.8 $ 7.8
Growth capital
expenditures 4.3 1.2 6.6 3.6
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Total capital
expenditures $ 6.4 $ 4.1 $ 13.4 $ 11.4
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Free cash flow
available for
distribution $ 8.7 $ 8.0 $ 24.4 $ 22.1
Free cash flow
available for
distribution
per trust unit $ 0.33 $ 0.30 $ 0.92 $ 0.83
Aggregate distributions declared $ 8.0 $ 21.6 Aggregate distributions declared per trust unit $ 0.30 $ 0.82
(1) The compilation of the forecast included in the prospectus
characterized facility rent and selling, general and administration
expenses for Enterprise Sanitaire F.A. Ltee ('F.A.') as operating
expenses. Actual results for the period ending December 31, 2002
include both expense items in selling, general and administration.
The quarter and period forecasts have been restated to reflect this
change.
Revenues of $39.7 million for the quarter and $108.5 million for the period were 6.1 per cent and 6.2 per cent higher than the restated quarter and period forecasts, respectively, and largely attributable to higher landfill and industrial collection revenues and realized commodity prices.
Operating expenses were $20.9 million for the quarter and $56.9 million for the period compared to $19.1 and $52.0 million for the restated forecasts, respectively. Higher landfill costs account for $0.8 million of the quarter and $1.1 million of the period variances, of which landfill development activities in markets where the Fund operates accounted for $0.4 million of the quarter and period landfill cost variances. The balance of the increase is attributable to higher collection efforts to service organic revenue growth.
Selling, general and administration expenses were $6.5 million for the quarter and $16.5 million for the period compared to the restated quarter and period forecasts of $5.8 and $15.8 million, respectively. The principal reason for the quarterly variance is attributable to public company year-end accruals totalling approximately $0.4 million.
Income before amortization, interest and income taxes ('EBITDA(2)') of $12.3 million for the quarter and $35.1 million for the period was $0.2 million lower and $0.7 million higher than the restated quarter and period forecasts of $12.5 and $34.4 million, respectively. Revenue gains in landfill and collection were partially offset by higher variable operating costs, landfill development expenses and higher than forecast selling, general and administration expenses for the quarter and period, as discussed above.
The Fund paid cash distributions to unitholders of $0.30 for the quarter and $0.72 for the period. The Fund declared a distribution of $0.10 per unit to unitholders of record on December 31, 2002, paid January 15, 2003.
Outlook
The Lachenaie landfill expansion permit approval process remains on track with management's expectations, as disclosed in the Fund's final prospectus. The Fund's management has completed all regulatory requirements to date and remains confident that approval will be obtained under the Environmental Quality Act (Quebec) prior to the expiry of the Fund's current permit which is expected to occur in April 2003. The Provincial zoning by-law approval process is complete. Further details are provided in Note 7 of the consolidated financial statements of BFI Canada Income Fund for the period ended December 31, 2002.
With respect to expansion permit approval under the Environment Quality Act (Quebec), processing of the environmental impact assessment for the site, which was filed with the Quebec Ministry of the Environment on April 2, 2002, continues without interruption. Part one of a two-part public hearing process is complete. The second part of the public hearing process is expected to be complete early in March 2003. No significant or unexpected issues have arisen during the hearing process.
The Fund has been awarded collection contracts for the City of Toronto and City of Terrebonne which are expected to generate aggregate annual revenues of approximately $3.4 million. At December 31, 2002 the Fund is committed to purchase vehicles and containers for these contracts totalling approximately $1.0 and $1.3 million, respectively, to meet its service obligations under these new collection contracts. The commitments represent growth capital, which will be financed from the Fund's revolving loan facility.
Management is actively reviewing financing alternatives to efficiently finance its future growth initiatives.
Looking ahead, management's principal objective is to increase distributable cash by continuing to enhance the Fund's service offerings, improving efficiencies and growing through strategic acquisitions. In that regard, management continuously reviews and evaluates potential strategic acquisitions; especially those that can increase free cash flow and, accordingly, distributions.
Future strategic initiatives may be financed with borrowings, the additional issuance of units, from working capital or from cash flow generated from operations.
Management expects that the Fund will be able to maintain the current distribution level. Future increases will be considered by the Trustees as appropriate.
(2) References to 'EBITDA'are to 'income before the following'on the
consolidated statement of operations, or more explicitly, to
'earnings before interest, amortization and income taxes'. EBITDA is
a term used by the Fund that does not have a standardized meaning
prescribed by generally accepted accounting principles and is
therefore unlikely to be comparable to similar measures used by other
issuers. EBITDA is a measure of the Fund's operating profitability,
and by definition, excludes certain expenses (specifically
amortization, interest and income taxes). These expenses are viewed
by management as either noncash (in the case of both amortization and
future income taxes) or non-operating (in the case of both interest
and current income taxes). EBITDA is a useful financial metric for
investors as it represents a starting point in the determination of
free cash flow available for distribution. The underlying reasons for
exclusion of each item are as follows:
Interest - interest expense is a function of an entity's debt/equity
mix and interest rates; as such, it reflects the treasury/financing
activities of the entity and represents a different class of expense
than the components of EBITDA.
Amortization - as a non-cash item amortization has no impact on the determination of cash flow available for distribution.
Income taxes - income taxes are a function of tax laws and rates and are affected by matters which are separate from the daily operations of the Fund.
EBITDA should not be construed as a measure of income or of cash
flows. The reconciling items between EBITDA and net income (loss) are
detailed in the statement of operations beginning with 'income before
the undernoted'and ending with 'net income'.
Forward-looking statements
This document may contain forward-looking statements relating to the
Fund's operations or to the environment in which it operates, which are
based on the Fund's operations, estimates, forecasts and projections.
These statements are not guarantees of future performance and involve
risks and uncertainties that are difficult to predict, and/or are beyond
the Fund's control. A number of important factors could cause actual
outcomes and results to differ materially from those expressed in these
forward-looking statements. These factors include those set forth in
other public filings (see the Fund's 2002 Annual Information Form for
additional details). Consequently, readers should not place any undue
reliance on such forward-looking statements. In addition, these forward-
looking statements relate to the date on which they are made. Although
the forward-looking statements contained herein are based upon what
management believes to be reasonable assumptions, the Fund cannot assure
unitholders that actual results will be consistent with these forward
looking statements, and the Fund disclaims any intention or obligation to
update or revise any forward-looking statements, whether as a result of
new information, future events or otherwise.
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Management will hold a conference call on Thursday, March 6, 2003 at
4:30 pm (ET). To access the call, participants should dial
1-800-814-4860, at approximately 4:20 pm. The conference call will also
be Webcast live at www.bficanada.com or www.vcall.com and subsequently
archived on the BFI Canada site.
A rebroadcast of the call will be available until midnight on March 13,
2003. To access the rebroadcast, dial (416) 640-1917 and quote the
reservation number 240001.
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The BFI Canada Income Fund, through its operating subsidiaries, is a full-service waste management company providing non-hazardous solid waste collection and landfill disposal services for commercial, industrial and residential customers in the provinces of British Columbia, Alberta, Manitoba, Ontario and Quebec. Based on revenues, the Fund is the second largest non- hazardous solid waste management company in Canada. The Fund owns and operates three landfills, carries on collection operations in 18 markets, and operates three transfer collection stations, seven material recovery collection facilities and one landfill gas to energy facility. The Fund's business does not include any management, collection or disposal of hazardous or liquid waste. The Fund's Units are listed on the Toronto Stock Exchange under the symbol BFC.UN. For more information on the Fund, visit our website at www.bficanada.com.
BFI CANADA INCOME FUND
Consolidated Balance Sheet
December 31, 2002
(in thousands of dollars)
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ASSETS
CURRENT
Cash and cash equivalents $ 5,666
Accounts receivable 24,962
Other receivables 415
Prepaid expenses 3,959
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35,002
OTHER RECEIVABLES 1,509
INTANGIBLES 77,805
GOODWILL 49,171
DEFERRED COSTS 1,832
DEFERRED FINANCING COSTS 2,058
CAPITAL ASSETS 89,665
LANDFILL ASSETS 122,399
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$ 379,441
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LIABILITIES
CURRENT
Accounts payable $ 15,410
Accrued charges 6,076
Distribution payable 2,650
Income taxes payable 157
Deferred revenue 5,360
Current portion of long-term debt 252
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29,905
LONG-TERM DEBT 76,985
LANDFILL CLOSURE AND POST-CLOSURE COSTS 8,013
FUTURE INCOME TAX LIABILITIES 25,298
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140,201
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UNITHOLDERS'EQUITY 239,240
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$ 379,441
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BFI CANADA INCOME FUND
Consolidated Statement of Operations
For the period from April 25, 2002 to December 31, 2002
(in thousands of dollars, except income per unit amounts)
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REVENUES $ 108,506 -------------------------------------------------------------------------
OPERATING EXPENSES 56,933
SELLING, GENERAL AND ADMINISTRATION EXPENSES 16,505 -------------------------------------------------------------------------
INCOME BEFORE THE FOLLOWING 35,068
AMORTIZATION 30,217
INTEREST ON LONG-TERM DEBT 3,118 -------------------------------------------------------------------------
INCOME BEFORE INCOME TAXES 1,733
INCOME TAX EXPENSE (RECOVERY)
Current 830
Future (4,982)
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(4,152)
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NET INCOME $ 5,885
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Net income per trust unit, basic and diluted $ 0.22 Weighted average number of units outstanding (thousands) 26,500
BFI CANADA INCOME FUND
Consolidated Statement of Cash Flows
For the period from April 25, 2002 to December 31, 2002
(in thousands of dollars)
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NET INFLOW (OUTFLOW) OF CASH RELATED
TO THE FOLLOWING ACTIVITIES
OPERATING
Net income $ 5,885
Items not affecting cash
Amortization of intangibles 8,357
Amortization of deferred financing costs 588
Amortization of capital assets 13,891
Amortization of landfill assets 7,381
Provision for landfill closure and post-closure costs 1,899
Future income taxes (4,982)
Landfill closure and post-closure expenditures (1,826)
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31,193
Changes in non-cash working capital items 2,146
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Cash generated from operating activities 33,339
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INVESTING
Acquisitions (158,660)
Investment in other receivables (987)
Proceeds from other receivables 50
Purchase of capital assets (9,497)
Landfill assets (3,880)
Deferred costs (396)
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Cash utilized in investing activities (173,370)
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FINANCING
Proceeds from revolving loan 5,250
Issue of trust units 176,609
Trust units purchased for cancellation (17,170)
Distributions paid to unitholders (18,992)
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Cash generated from financing activities 145,697
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NET CASH INFLOW 5,666
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD -
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CASH AND CASH EQUIVALENTS, END OF PERIOD $ 5,666
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SUPPLEMENTAL CASH FLOW INFORMATION:
Cash and cash equivalents are comprised of:
Cash $ 2,652
Cash equivalents 3,014
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$ 5,666
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Cash paid during the period for: Income taxes $ 493 Interest $ 3,410
BFI CANADA INCOME FUND
Consolidated Statement of Unitholders'Equity
For the period from April 25, 2002 to December 31, 2002
(in thousands of dollars)
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BALANCE, BEGINNING OF PERIOD $ -
Issue of trust units 272,167
Cancelled (17,507)
Contributed surplus 337
Net income 5,885
Distributions (21,642)
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BALANCE, END OF PERIOD $ 239,240
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%SEDAR: 00017538E
VIEW ADDITIONAL COMPANY-SPECIFIC INFORMATION: http://www.newswire.ca/cgi-bin/inquiry.cgi?OKEY=57624
For further information: The Fund provides a full Management Discussion
and Analysis document on its website: www.bficanada.com; BFI Canada Income
Fund, Joseph D. Quarin, Chief Financial Officer, Tel: (416) 401-7722, Email:
joe.quarin(at)bficanada.com; Anne Plasterer, Manager, Investor and Employee
Relations, Tel: (416) 401-7729, Email: anne.plasterer(at)bficanada.com
News release via Canada NewsWire, Toronto 416-863-9350
Copyright (C) 2003 CNW, All rights reserved