Provision for income taxes totaling $1,566 for the 2012 year related solely to the pre-tax income of the Company's Canadian operations and is net of a deferred tax recovery of $160 pertaining to the impairment loss on the loan receivable from Universal.
The recovery of income taxes was $2,281 for the 2011 year. Cumulative advances to Universal up to and including December 31, 2011 totaling $16,251 were determined under taxation rules to be an allowable business investment loss, and accordingly, a deferred tax asset amounting to $2,031 was recognized in 2011. The deferred tax asset can be used by the Company to offset future taxes payable and is likely to be used in 2013 by a reduction in income tax instalments during the year.
In 2011 deferred tax assets were recognized on non-capital losses relating solely to the Company's Canadian operations. The Company has not recorded a deferred tax asset with respect to the potential deferred tax benefit pertaining to non-capital losses of $50,963 incurred by its U.S. operations.
Fourth quarter ended December 31, 2012
For the fourth quarter ended December 31, 2012, the Company recorded a loss of $1,708, or $0.16 per Class A share and Class B share, compared to net income of $63, or $0.00 per Class A share and Class B share, for the fourth quarter of 2011. The aggregate weighted average number of Class A shares and Class B shares outstanding for the fourth quarter of 2012 and 2011 was 10,940,354 and 10,936,554, respectively.
For the fourth quarter of 2012, revenues increased significantly by $3,147 to $22,742 from $19,595 for the same period in 2011. The improvement was due to an increase in revenues from masonry product shipments, reflecting stronger residential construction activity in both Canada and the U.S.
Although operations were positively impacted by the increase in revenues and lower unit production costs due to higher plant capacity utilization, losses from operations totaled $1,078 for the fourth quarter of 2012, compared to operating income of $207 for the comparable period of 2011. Three major factors totaling $2,655 impacted operating results for the quarter:
-- a write-off of certain obsolete and discontinued merchandise inventory in the amount of $1,019;-- an increase in plant repair and maintenance expenses, including roof repair costs incurred at the Brampton clay brick facility totaling $980; and-- an impairment loss of $656 recognized on the loan receivable from Universal.
Finance costs declined for the fourth quarter compared to the same period in 2011 due to reduced interest costs resulting from lower debt balances outstanding and the redemption of the balance of the subordinated secured debentures in the principal amount of $8,500 in October 2012. These decreases were offset in part by the 2% early redemption fee paid to the debenture holders and the increase in interest expense due to the increased utilization of the Company's operating credit facility.
A more detailed discussion with respect to each operating business segment follows:
For the year ended December 31, 2012, revenues increased by $14,101, or 24%, to $72,106 from $58,005 in 2011. An increase in clay brick shipping and a significant growth in shipments of masonry concrete products contributed to the increase in revenues.
In 2012, higher concrete block volumes reflected a full year of sales activity as the Company's product offerings continue to gain market acceptance. The Company initially introduced concrete block products into the Ontario market in April 2011.