BRAMPTON, ONTARIO -- (Marketwired) -- 05/07/13 -- (All amounts are stated in thousands of Canadian dollars, except per share amounts.)
Brampton Brick Limited (TSX: BBL.A) today reported a loss of $2,574, or $0.24 per Class A Subordinate Voting share ("Class A share") and Class B Multiple Voting Share ("Class B share"), for the first quarter ended March 31, 2013 compared to a loss of $2,793, or $0.26 per share, in 2012. The aggregate weighted average number of Class A shares and Class B shares outstanding for the first quarter of 2013 was 10,940,354 and 10,936,554 for the same period in 2012.
DISCUSSION OF OPERATIONS
Revenues for the first quarter were $12,889 compared to $15,995 in 2012. The decrease of 19.4% was primarily due to lower shipments in the Masonry Products business segment. Revenues of the highly seasonal Landscape Products business segment were also lower in the first quarter of this year. Unfavourable weather conditions negatively impacted shipments for both business segments compared to the first quarter of 2012.
Cost of sales for the quarter amounted to $11,774, compared to $14,843 in 2012. The reduction in cost of sales reflected the impact of the lower sales volumes, as well as higher production volumes and related efficiencies. First quarter repair and maintenance were higher than in the comparable period of 2012 for the landscape and concrete masonry products.
Selling expenses decreased to $1,785 in the first quarter from $1,861 in the prior period. In the first quarter of 2012, higher selling expenses included advertising and marketing expenditures to promote new products introduced in 2011 and to expand the Company's geographic market profile. The decrease in the first quarter of 2013 from 2012 was offset, in part, by the Company's ongoing investment program to upgrade its information systems and enhance its customer support capabilities.
For the first quarter of 2013, an impairment loss of $158 relating to the loan receivable from Universal Resource Recovery Inc. ("Universal"), the Company's 50/50 joint venture, was recognized. There was no impairment loss recognized for the Universal loan in the comparable 2012 condensed interim consolidated financial statements.
For the quarter ended March 31, 2013, the operating loss increased moderately to $2,384 from $2,287 in 2012.
Finance costs of $666 declined for the first quarter of 2013 compared to $912 for the same period in 2012. The decrease in interest expense was due to the repayment of the Company's subordinated secured debentures, which bore an effective interest rate of 11.89%. The redemption of these debentures was funded from the Company's operating credit facility bearing interest at prevailing banker's acceptance rates, plus a credit spread of 2%. In addition, lower long term debt balances outstanding during the first quarter of 2013 also contributed to the decline in interest expense. Scheduled principal payments totaling $2,500 on the long term debt were made in the second half of 2012. This debt bears an effective interest rate of 8.40%.
A net recovery of income taxes of $474 was recorded for the first quarter of 2013 compared to a net recovery of $404 in 2012. The income tax recovery in both periods relates to the pre-tax losses of the Company's Canadian operations. The Company has not recorded a deferred tax asset with respect to the potential future income tax benefit pertaining to the losses incurred by its U.S. operations.
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