September 26, 2006
CanaDream Corporation Reports First Quarter Earnings of $1.3 Million or 8.0 Cents per Share
Mr. Brian Gronberg, President and CEO of CanaDream Corporation is pleased to report the Company’s financial results for the three months ended July 31, 2006, the Company’s first quarter (Q1) of Fiscal 2007.
Revenues of $6.65 million were $46,000 or 0.7% less than last year’s $6.7 million, while earnings decreased by 12.4% to $1.3 million compared to $1.5 million last year. The quarter saw slightly higher numbers of average unit availability and a 3.3% higher number of rental nights, average rental rate per night decreased by 3.3%, in the face of competitive industry pricing. Direct expenses of $2.41 million were slightly higher last year, resulting in Gross Margins (Revenue less Direct Expenses) of $4.4 million, a decrease of $171,000 (3.9%) compared to last year. Interest and depreciation expenses were higher as a result of higher levels of fleet investment and related fleet debt, while Selling, General and Administrative expenses decreased by 3.7% to $877,000. Fully Diluted Earnings per Share decreased by 13.4% to 7.79 cents per share while Cash Flow from Operations was $2.96 million, 6.4% lower than last year’s $1.50 million.
Highlights
|
July 31, 2006 | July 31, 2005 | |
|
|
CDN$ | CDN$ | |
| Revenue | $6,647,962 | $6,693,619 | |
| Revenue Less Direct Expenses | $4,240,755 | $4,412,284 | |
| Earnings Before Tax | $1,974,914 | $2,317,141 | |
| Net Earnings | $1,317,664 | $1,504,891 | |
| Cash Flow from Operations | $2,963,901 | $3,166,340 | |
| Basic Earnings per share | 7.93 cents | 9.02 cents | |
| Fully Diluted Earnings per share | 7.79 cents | 8.99 cents | |
| Cash Flow per share | 17.5 cents | 18.9 cents | |
|
Common Shares outstanding at April 30 |
16,606,042 | 16,679,542 | |
|
Weighted Average Number of Common Shares Outstanding |
16,606,042 | 16,692,803 |
Investment in Rental Fleet was $28.34 million at July 31, 2006, an increase of $4.12 million (17.0%) over last July and an increase of $7.75 million (37.7%) over year-end levels, while the investment in Fleet Inventory Available for Sale (Ex-Rental units) was $2.35 million at July 31, 2006, a decrease of $773,000 (24.8%) from year-end and a decrease of $891,000 (27.5%) from last July.
Term Debt outstanding on the Company’ s inventories of Rental Fleet and Fleet Inventory Available for Sale increased to $24 million, some $2.2 million more than last July and $7.1 million more than the $16.9 million at year-end. The Company’s short-term liquidity position (Cash and cash equivalents plus accounts receivable, minus accounts payable and accrued liabilities) stands at $4.1 million compared to $4.99 million last July. The Company’s Future Income Tax liability increased to $1.2 million at July 31 2006, compared to $1.4 million last July and $466,000 at April 30, 2006. As previously noted, the Company does not expect to pay income taxes (other than capital taxes) for the foreseeable future.
FORWARD LOOK TO END OF 2006 SUMMER SEASON
While Q1 Revenues were slightly less than last year, due in part to the World Cup held in Germany from June 9 to July 9, 2006, management expects revenues for the second quarter to exceed last year based on the fact that booked nights for Q2 are currently 14% ahead of last year
It should be noted that the Company’s core business, rental of recreational vehicles, is seasonal in nature with the majority of its revenue being earned during the May to October period, its first and second quarters. The majority of the company’s direct expenses are incurred in that same period. The Company markets rental units and fleet inventory available for sale on a continuous basis throughout the year, however sales of such units are generally strongest in the spring and early summer. As a result of ongoing interest, amortization and adjustments and selling, general and administrative expenses, the last two quarters of the fiscal year normally produce operating losses. Losses incurred in the last two quarters may exceed profits earned in the first two quarters of the fiscal year.
We encourage interested parties to access copies of the Company’s First Quarter MD&A on the SEDAR website at www.sedar.com
The information in this news release includes certain information and statements about management’s views of future events, expectations, plans and prospects that constitute forward looking statements. These statements are based upon assumptions that are subject to significant risks and uncertainties. Because of these risks and uncertainties and as a result of a variety of factors, the actual results, expectations, achievements or performance may differ materially from those anticipated and indicated by those forward looking statements. Although CanaDream Corporation believes that the expectations reflected in forward looking statements are reasonable, it can give no assurances that the expectations of any forward looking statements will prove to be correct. CanaDream disclaims any intention, and assumes no obligation, to update or revise any forward looking statements to reflect actual results, whether as a result of new information, future events, changes in assumptions, changes in factors affecting such forward looking statements or otherwise.
CanaDream is a Canadian tourism company that is utilizing its proprietary business–to–business web enabled system, www.canadasbest.com, and its business–to–consumer on–line Internet reservation system, www.canadream.com, to operate and expand its network of RV rental locations in Canada. CanaDream maintains six Company–operated locations in Calgary, Vancouver, Whitehorse, Toronto, Montreal, and Halifax. The Company is also leveraging its proprietary technology to build a franchised network of associate dealers that are fully interconnected to CanaDream’s e–commerce systems. CanaDream now has three associate dealer franchisees in Edmonton Alberta, and Kelowna and Victoria, British Columbia.
For further information please contact:
Brian Gronberg, President and CEO, CanaDream Corporation
Phone: 800-461-7368
Email: brian@canadream.com
Website:www.canadream.com
