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Hartco Announces 2011 Fourth Quarter and Year-end Results(February 23, 2012)
MONTREAL, QUEBEC -- (Marketwire) -- 02/23/12 -- Hartco Inc. (TSX:HCI) today announced financial results for the fourth quarter and the year ended December 31, 2011. Hartco posted consolidated revenues of $107.2 million and net earnings of $0.5 million, or $0.03 per share on a diluted basis for the fourth quarter, compared to revenues of $118.6 million and net earnings of $4.0 million, or $0.29 per share on a diluted basis, for the corresponding quarter in 2010.
Fourth quarter revenues decreased by $11.5 million compared to the same period last year. Product revenues declined by 9.7%, while service revenues increased by 8.4%. Consolidated EBITDA were $0.8 million for the quarter ended December 31, 2011 compared to $4.4 million for the same quarter in 2010.
"We experienced disappointing results during the fourth quarter, primarily due to lower than expected revenues and gross margins in the commercial segment." said Pat Waid, Hartco's President and Chief Operating Officer. "We are committed to implementing necessary changes to improve our operational execution".
Consolidated results for the year ended December 31, 2011
For the year ended December 31, 2011, net earnings amounted to $3.7 million, or $0.26 per share on a diluted basis, on consolidated revenues of $437.3 million, compared to net earnings of $7.1 million, or $0.49 per share on a diluted basis, on consolidated revenues of $465.3 million in 2010. Consolidated EBITDA was $5.2 million for the year ended December 31, 2011 compared to $11.3 million for the prior year.
Effective management of our working capital enabled Hartco to end the year 2011 with a cash position of $20.9 million and no debt. Hartco's strategy is to leverage its cash to invest in future growth and productivity improvements.
"Challenging business conditions are expected to prevail throughout 2012 and we will take appropriate actions to improve our performance." said Pat Waid. "We will leverage our strong financial position and comprehensive offering portfolio to increase our market penetration and improve our profitability."
Detailed Financial Information
Detailed financial information pertaining to Hartco's fourth quarter and annual results can be accessed at www.sedar.com. The fourth quarter and annual financial statements have been prepared in accordance with the International Financial Reporting Standards ("IFRS").
About Hartco Inc.
Hartco Inc. (TSX:HCI) has been a leader in the Canadian information technology business for more than thirty years. Through its operating divisions, which together include 50 locations across Canada, Hartco Inc. delivers information technology solutions to private and public sector organizations of every size. For more information, please visit www.hartco.com.
This news release contains forward-looking information. Except for historical information contained herein, the statements in this document are forward-looking. Forward-looking statements involve known and unknown risks and uncertainties, which may cause actual results in future periods to differ materially from forecasted results. Those risks include, among others, changes in customer demand for information technology products or services, changes in supplier pricing actions or terms, customer orders, pricing actions by competitors, changes in laws and regulations and general changes in economic conditions. Risks that could cause our results to differ materially from our expectations are discussed in our Annual Management's Discussion & Analysis.
FINANCIAL HIGHLIGHTS (In thousands of dollars, except per share amounts) Fourth Quarter ended Year ended December 31 December 31 2011 2010 2011 2010 ---------------------------------------- $ $ $ $ Revenues 107,151 118,604 437,275 465,306 EBITDA (1) 764 4,418 5,198 11,252 Net earnings 487 4,042 3,727 7,073 Diluted Earnings per share 0.03 0.29 0.26 0.49 Free Cash Flow (2) 5,565 394 1,564 2,764 Adjusted Free Cash Flow (deficiency) (3) 5,614 387 (3,007) 3,115 Cash position 20,925 24,242 20,925 24,242 (1) Earnings before net financial costs, income tax expense, depreciation and amortization and share of results of equity investments. EBITDA is a non-IFRS measure as defined in the MD&A. (2) Cash flow from continuing and discontinued operating activities less capital expenditures. Free Cash Flow is a non-IFRS measure as defined in the MD&A. (3) Cash flow from continuing and discontinued operating activities, less capital expenditures, net of proceeds from disposal of assets, plus net investing activities, plus net collection of loans and other assets. Adjusted Free Cash Flow is a non-IFRS measure as defined in the MD&A.
Vice-President Finance and Chief Financial Officer
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