Farnham, Quebec, Oct. 31-- Domco Tarkett had net earnings of C$7.4 million or $0.29 per share for the third quarter, compared to C$4.4 million or $0.18 per share for the same period a year ago. For the first nine months of the year, net earnings were C$15.1 million or $0.60 per share, compared to C$10.9 million or $0.43 per share, one year before.
"The results of the third quarter are encouraging," said Domco Tarkett president and CEO, Ulf Mattsson. This increase is due to an improved operating profit, lower interest expense and the positive impact of the non-amortization of goodwill in line with new accounting standards.
Including the impact of the non-amortization of goodwill, last year's third quarter net earnings would have been C$5.6 million or $0.22 per share. For the first nine months of 2001, they would have been C$14.4 million or $0.56 per share.
Consolidated net sales for the third quarter reached C$178.7 million, an increase of 4.8% over the previous year. For the first nine months of the year, sales reached C$518.1 million, an increase of 1.5% over the
corresponding period a year ago.
In the resilient flooring segment, Domco Tarkett posted net sales of C$125.1
million compared to C$122.5 million for the same quarter last year. For the nine months, this segment's sales reached C$366.5 million, compared to C$369.5 million a year ago.
Third quarter sales in the hardwood flooring segment grew by 11.9% to C$53.6 million. Sales were C$151.6 million for the first nine months, compared to C$141.0 million a year ago or an increase of 7.5%. The hardwood segment accounted for 30.0% of consolidated net sales, compared to 28.1% in the same period a year ago.
For the third quarter, Domco Tarkett reported earnings before interest, taxes, depreciation and amortization (EBITDA) of C$16.2 million (or 9.1% of consolidated sales) compared to C$15.3 million (or 9.0% of consolidated
sales) for the third quarter a year ago. For the first nine months, EBITDA was C$40.0 million or 7.7% of sales compared to C$44.8 million or 8.8% of sales in 2001 where there was an improvement in the resilient business and a decrease in the hardwood segment.
During the third quarter, cash flows from operating activities reached C$20.1
million compared to C$14.5 million in the third quarter of the previous year. For the first nine months, cash flows amounted to C$25.2 million compared to C$28.5 million for the same period last year. Year to date, the Company has repaid C$55.9 million of its long term debt, of which $26.3 million was repaid during the third quarter.
"As anticipated, we are now beginning to reap the benefits of the restructuring activities of the resilient operations provisioned in the financial statements. The latest step of this project consists in the closure of a sampling facility in the US and outsourcing of this activity in Canada," stated Mattsson.
The downward sales trend in resilient flooring has been reversed in the third quarter. An increase of 2.1% in resilient net sales combined with strong growth in the hardwood segment has produced overall revenue growth of 4.8%. "We remain cautious due to the current economic situation in the US but we are maintaining our goal of improving operating profits through an aggressive sales strategy and tight control of expenses."
