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Approximately 4% of Construction Products Distribution's employees are unionized. Collective bargaining agreements are renegotiated in the normal course of business. While labour disruptions are not expected, there is always risk associated with the negotiation process that could have an adverse impact on the segment and Superior.
SUPERIOR PLUS CORP.Condensed Consolidated Balance Sheets----------------------------------------------------------------------------(unaudited, millions of Canadian December 31, December 31, dollars) Notes 2012 2011----------------------------------------------------------------------------AssetsCurrent AssetsCash and cash equivalents 7.6 5.2Trade and other receivables 5&13 389.0 472.9Prepaid expenses 24.7 20.7Inventories 6 213.7 203.1Unrealized gains on derivative financial instruments 13 16.6 13.3----------------------------------------------------------------------------Total Current Assets 651.6 715.2----------------------------------------------------------------------------Non-Current AssetsProperty, plant and equipment 7 829.9 885.0Intangible assets 39.6 65.6Goodwill 189.1 186.1Notes and finance lease receivables 10.1 10.0Deferred tax 14 303.1 315.5Unrealized gains on derivative financial instruments 13 12.9 16.0----------------------------------------------------------------------------Total Non-Current Assets 1,384.7 1,478.2----------------------------------------------------------------------------Total Assets 2,036.3 2,193.4--------------------------------------------------------------------------------------------------------------------------------------------------------Liabilities and EquityCurrent LiabilitiesTrade and other payables 9 314.1 297.6Deferred revenue 10 18.2 14.2Borrowing 11 59.7 54.3Convertible unsecured subordinated debentures 12&22 50.0 49.3Dividends and interest payable 7.3 7.6Unrealized losses on derivative financial instruments 13 36.5 61.7----------------------------------------------------------------------------Total Current Liabilities 485.8 484.7----------------------------------------------------------------------------Non-Current LiabilitiesBorrowing 11 574.7 701.4Convertible unsecured subordinated debentures 12 475.1 521.7Other liabilities 1.0 -Provisions 8 17.6 17.2Employee future benefits 54.1 65.3Deferred tax 14 2.5 5.9Unrealized losses on derivative financial instruments 13 42.6 47.6----------------------------------------------------------------------------Total Non-Current Liabilities 1,167.6 1,359.1--------------------------------------------------------------------------------------------------------------------------------------------------------Total Liabilities 1,653.4 1,843.8----------------------------------------------------------------------------EquityCapital 1,646.5 1,633.1Deficit (1,202.3) (1,228.2)Accumulated other comprehensive loss (61.3) (55.3)----------------------------------------------------------------------------Total Equity 15 382.9 349.6----------------------------------------------------------------------------Total Liabilities and Equity 2,036.3 2,193.4--------------------------------------------------------------------------------------------------------------------------------------------------------See accompanying Notes to the Condensed Consolidated Financial Statements.SUPERIOR PLUS CORP.Condensed Consolidated Statement of Changes in Equity----------------------------------------------------------------------------(unaudited millions of Canadian Share Contributed Total dollars) Capital Surplus(1) Capital----------------------------------------------------------------------------January 1, 2011 1,600.9 5.5 1,606.4 Net loss - - - Option value associated with redemption of convertible debentures - (2.2) (2.2) Shares issued under Dividend Reinvestment Plan 28.9 - 28.9 Dividends declared to shareholders - - - Unrealized foreign currency losses on translation of foreign operations - - - Actuarial defined benefit losses - - - Reclassification of derivative losses previously deferred - - - Income tax on other comprehensive loss - - -----------------------------------------------------------------------------December 31, 2011 1,629.8 3.3 1,633.1---------------------------------------------------------------------------- Net earnings - - - Option value associated with redemption of convertible debentures - (0.8) (0.8) Shares issued under Dividend Reinvestment Plan 14.2 - 14.2 Dividends declared to shareholders - - - Unrealized foreign currency losses on translation of foreign operations - - - Actuarial defined benefit losses - - - Income tax on other comprehensive loss - - -----------------------------------------------------------------------------December 31, 2012 1,644.0 2.5 1,646.5--------------------------------------------------------------------------------------------------------------------------------------------------------(unaudited millions of Canadian Accumulated dollars) other comprehensive Deficit loss Total----------------------------------------------------------------------------January 1, 2011 (797.9) (54.1) 754.4 Net loss (302.6) - (302.6) Option value associated with redemption of convertible debentures - - (2.2) Shares issued under Dividend Reinvestment Plan - - 28.9 Dividends declared to shareholders (127.7) - (127.7) Unrealized foreign currency losses on translation of foreign operations - 13.6 13.6 Actuarial defined benefit losses - (25.5) (25.5) Reclassification of derivative losses previously deferred - 5.9 5.9 Income tax on other comprehensive loss - 4.8 4.8----------------------------------------------------------------------------December 31, 2011 (1,228.2) (55.3) 349.6---------------------------------------------------------------------------- Net earnings 93.1 - 93.1 Option value associated with redemption of convertible debentures - - (0.8) Shares issued under Dividend Reinvestment Plan - - 14.2 Dividends declared to shareholders (67.2) - (67.2) Unrealized foreign currency losses on translation of foreign operations - (9.0) (9.0) Actuarial defined benefit losses - 4.1 4.1 Income tax on other comprehensive loss - (1.1) (1.1)----------------------------------------------------------------------------December 31, 2012 (1,202.3) (61.3) 382.9----------------------------------------------------------------------------(1) Contributed surplus represents Superior's equity reserve for the option value associated with the issuance of convertible unsecured subordinated debentures and warrants.See accompanying Notes to the Consolidated Financial Statements.SUPERIOR PLUS CORP.Condensed Consolidated Statement of Net Earnings (Loss) and TotalComprehensive Income (Loss)---------------------------------------------------------------------------- Three Months Ended Year Ended December 31, December 31,(unaudited, millions of Canadian dollars except per share amounts) Note 2012 2011 2012 2011----------------------------------------------------------------------------REVENUES 18 934.0 1,043.4 3,624.3 3,925.6Cost of sales (includes products & services) 18 (705.8) (808.8) (2,778.0) (3,098.1)----------------------------------------------------------------------------Gross profit 228.2 234.6 846.3 827.5----------------------------------------------------------------------------EXPENSES Selling, distribution and administrative costs 18 177.9 188.7 694.0 706.7 Finance expense 18 18.2 20.7 77.6 85.5 Impairment of property, plant and equipment, intangible assets and goodwill 7 4.7 300.6 4.7 378.6 Unrealized losses (gains) on derivative financial instruments 13 14.1 (0.3) (32.1) 9.7---------------------------------------------------------------------------- 214.9 509.7 744.2 1,180.5----------------------------------------------------------------------------Net earnings (loss) before income taxes 13.3 (275.1) 102.1 (353.0)Income tax (expense) recovery 14 0.9 43.7 (9.0) 50.4----------------------------------------------------------------------------Net earnings (loss) 14.2 (231.4) 93.1 (302.6)----------------------------------------------------------------------------Net earnings (loss) 14.2 (231.4) 93.1 (302.6)Other comprehensive income: Unrealized foreign currency (losses) gains on translation of foreign operations 15 4.5 (11.0) (9.0) 13.6 Actuarial defined benefit gains (losses) 15 14.2 (5.4) 4.1 (25.5) Reclassification of derivative losses previously deferred 15 - 0.6 - 5.9 Income tax (expense) recovery on other comprehensive loss 14 (3.8) 1.3 (1.1) 4.8----------------------------------------------------------------------------Total comprehensive income (loss) for the period 29.1 (245.9) 87.1 (303.8)--------------------------------------------------------------------------------------------------------------------------------------------------------Net Earnings (Loss) per ShareFrom operations: Basic and diluted 16 $0.13 $(2.10) $0.83 $(2.77)----------------------------------------------------------------------------See accompanying Notes to the Condensed Consolidated Financial Statements.SUPERIOR PLUS CORP.Condensed Consolidated Statement of Cash Flows---------------------------------------------------------------------------- Three months ended Twelve Months Ended December 31, December 31,(unaudited, millions of Canadian dollars) Notes 2012 2011 2012 2011----------------------------------------------------------------------------OPERATING ACTIVITIESNet earnings (loss) for the period 14.2 (231.4) 93.1 (302.6)Adjustments for: Depreciation included in selling, distribution and administrative costs 7 10.7 13.4 42.4 44.3 Amortization of intangible assets 4.8 9.8 23.5 41.9 Depreciation included in cost of sales 7 11.5 11.4 44.9 44.9 Amortization of customer contract-related costs 0.7 0.5 3.3 4.2 Losses on disposal of assets 1.7 0.9 1.0 4.1 Impairment of intangible assets and goodwill - 300.6 - 378.6 Impairment of property, plant and equipment 4.7 3.4 4.7 3.4 Unrealized (gains) losses on derivative financial instruments 13 14.1 (0.3) (32.1) 9.7 Gain on bargain purchase 4 - (0.9) - (0.9) Customer contract-related costs (0.2) 0.2 (1.1) (1.6) Finance costs recognized in net earnings (loss) 18.2 20.7 77.6 85.5 Income tax expense (recovery) recognized in net earnings (loss) (0.9) (43.7) 9.0 (50.4) (Increase) Decrease in non- cash operating working capital 17 (57.9) (69.8) 81.6 30.1----------------------------------------------------------------------------Net cash flows from operating activities 21.6 14.8 347.9 291.2Income taxes paid (0.7) (0.9) (0.3) (1.3)Interest paid (29.0) (33.9) (74.3) (77.9)----------------------------------------------------------------------------Cash flows (used in) from operating activities (8.1) (20.0) 273.3 212.0----------------------------------------------------------------------------INVESTING ACTIVITIESPurchase of property, plant and equipment 7 (22.1) (14.6) (43.8) (38.2)Proceeds from disposal of property, plant and equipment 7 0.4 1.0 4.5 3.2Acquisitions 4 - (1.1) (5.5) (14.8)----------------------------------------------------------------------------Cash flows used in investing activities (21.7) (14.7) (44.8) (49.8)----------------------------------------------------------------------------FINANCING ACTIVITIESNet proceeds (repayment) of revolving term bank credits and other debt 78.9 125.4 (74.4) 132.3Repayment of senior secured notes (31.8) (32.5) (31.8) (32.5)Repayment of finance lease obligations (4.1) (3.4) (16.4) (14.2)Net repayment of the accounts receivable sales program - - - (90.1)Redemption of 5.75% convertible debentures 11 - (125.0) (49.9) (125.0)Proceeds from issuance of 7.50% convertible debentures 11 - 75.0 - 75.0Issuance costs incurred for the 7.50% convertible debentures 11 - (3.4) - (3.4)Proceeds from the dividend reinvestment program 3.6 5.5 14.2 28.9Dividends paid to shareholders (16.9) (27.6) (67.1) (136.7)----------------------------------------------------------------------------Cash flows from (used in) financing activities 29.7 14.0 (225.4) (165.7)--------------------------------------------------------------------------------------------------------------------------------------------------------Net (decrease) increase in cash and cash equivalents (0.1) (20.7) 3.1 (3.5)Cash and cash equivalents, beginning of period 7.7 26.0 5.2 7.8Effect of translation of foreign currency-denominated cash and cash equivalents - (0.1) (0.7) 0.9----------------------------------------------------------------------------Cash and cash equivalents, end of period 7.6 5.2 7.6 5.2----------------------------------------------------------------------------
