September 2, 2005
CanaDream Corporation Reports Record First Quarter Earnings of $1.5 Million or 9.0 Cents/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, 2005, the Company’s first quarter (Q1) of Fiscal 2006.
Revenues of $6.7 million were $1.14 million or 20.5% higher than last year’s $5.5 million, while earnings increased 63.5% to $1.5 million compared to $922,000 last year. Increased revenues resulted from higher levels of rental fleet, coupled with better utilization and pricing. Direct expenses of $2.28 million were roughly the same as last year, resulting in Gross Margins (Revenue less Direct Expenses) of $4.4 million, an increase of $1.13 million (34.6%). 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 increased by 5.5% to $911,000. Earnings per Share increased by 67% to 8.99 cents per share while Cash Flow from Operations was $3.13 million, 47% higher than last year’s $2.13 million.
Highlights
July 31, 2005 July 31, 2004 CDN$ CDN$ Revenue 6,693,619 5,554,746 Revenue Less Direct Expenses 4,412,284 3,277,791 Earnings Before Tax 12,317,142 1417,417 Net Earnings 1,504,892 922,167 Cash Flow from Operations 3,128,914 2,128,535 Earnings per Share – Basic 9.02 cents 5.44 cents Earnings per Share –Fully Diluted 8.99 cents 5.39 cents Cash Flow per Share 18.7% 12.6% Common Shares outstanding at
End of Quarter16,679,542 16,872,042 Weighted Average Number of
Common Shares Outstanding16,692,803 16,944,325 Investment in Rental Fleet was $24.2 million at July 31, 2005, an increase of $6.15 million (34.0%) over last July and an increase of $9.35 million (62.9%) over year-end levels, while the investment in Rental Units Held for Sale (Ex-Rental units) was $3.24 million at July 31, 2005, a decrease of $813,000 (20.1%) from year-end and a decrease of $542,000 (14.3%) from last July.
Term Debt outstanding on the Company’s inventories of Rental Fleet and Rental Units Held for Sale increased to $21.83 million, some $7.7 million more than last July and $9.0 million more than the $12.8 million at year-end.
The Company’s short-term liquidity position (Cash and cash equivalents plus accounts receivable, minus accounts payable and accrued liabilities) increased by almost $3.1 million to $4.99 million compared to $1.9 million last July.
The Company’s Future Income Tax liability increased to $1.4 million at July 31 2005, compared to $1,075,000 last July and 610,000 at April 30, 2005. As previously noted, the Company does not expect to pay income taxes (other than capital taxes) for the foreseeable future.
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. Most of the fleet sales occur between November and May. As a result of ongoing interest, amortization and general and administrative expenses, the last two quarters of the fiscal year normally produce operating losses.
The Company encourages interested parties to access CanaDream Corporation’s MD&A for the nine months ended January 31, 2005 on the SEDAR website, www.sedar.com.
The financial data included in this release has been prepared in accordance with Canadian generally accepted accounting principles (GAAP), except for the term cash flow from operations. Cash flow from operations as presented does not have any standardized meaning under Canadian GAAP and therefore, it may not be comparable with the calculation of similar measures for other entities. Cash flow from operations has been presented for information purposes only, and should not be considered an alternative to, or more meaningful than, cash flow from operating activities, as determined in accordance with GAAP. All references to cash flow from operations in this release are based on cash flow before changes in non-cash working capital.
CanaDream is a Canadian tourism company that is utilizing its proprietary business–to–business webenabled 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
