Archive for November, 2008
November 23rd, 2008
If you have struggled to meet your month…. (nevada secured home equity line)
Posted in Bad Credit Mortgages by Admin
If you have struggled to meet your monthly payments and in fact have used every option for deferment or forbearance your current loans offer, or find yourself about to default on your loan, a direct student loan consolidation can mean a fresh start.
If the homeowner is lucky, then the credit score will be increased and the interest rate for the desired home equity line of credit will be lowered.
The rate at which the bank borrows money is linked to the prime rate, which is the federal interest rate.
All of the steps that are supposed to help establish better credit require good credit in the first place.
If you have not kept your payments current, you have other liens on the property, or you have a high risk loan, you may not be able to cancel your PMI after you have gained 20 percent in equity.
When you work with a mortgage broker, he does the initial steps of the loan process: completing the application, obtaining your credit report, conducting the appraisal, verifying your employment, etc.
Why Your Credit Score is Important
Your credit score can either haunt you or reward you. It all depends
Popularity: 37% [?]
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November 23rd, 2008
6 percentage points thereby lowering you…. (henderson loan vs home equity line)
Posted in Bad Credit Mortgages by Admin
6 percentage points thereby lowering your monthly payments.
Bad credit can occur for a variety of reasons.
Mortgage Secrets Exposed
The new book that reveals the truth behind bad credit mortgages and the banking industry.
Popularity: 33% [?]
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November 23rd, 2008
Compare several sources. (on line home equity line in green valley)
Posted in Bad Credit Mortgages by Admin
Compare several sources.
The third option is the Graduated Repayment Plan.
Bad Credit Mortgage Loans Online - How Your Fico Credit Score Can Affect Your Loan Approval
When applying for a mortgage
Popularity: 31% [?]
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November 22nd, 2008
When the loan closes, you will no longer…. (rates for home loan in green valley)
Posted in Bad Credit Mortgages by Admin
When the loan closes, you will no longer work with the mortgage broker.
If repaying your student loans is challenging your budget, or worse, putting your finances and credit rating in the red, you might want to think about a direct student loan consolidation.
Finally, if you have a job and family, the Income Contingent Repayment Plan may be what youre looking for.
The first reason is insufficiency of current house.
Thus, Americans, even married once still continue to go to college.
Bad credit mortgage is possible too. (on line home equity line in henderson)
Bad credit mortgage is possible too.
Plans that offer low monthly payments during the draw period may require a balloon payment at the end of the loan period requiring the entire remaining balance to be paid.
A credit card is merely a type of loan, and is still an available type of bad credit loan available for …
For many homeowners, the change in month?. (nevada requirements for mortgages)
For many homeowners, the change in monthly mortgage payments is not something they want to risk, even for a currently lower interest rate.
After the broker completes these steps the lender conducts the underwriting process in which your risk as a borrower is determined.
Reducing your monthly payment will mean that you can have some spare money …
Is the risk worth it? (second line equity credit loan home in nevada)
Is the risk worth it?
Bad Credit Mortgages
The lender is freer to offer a lower interest rate on an adjustable rate mortgage because they do not have to guarantee the interest rate for the life of the loan, only until the first interest rate review.
The home equity line of credit is a device used by homeowners …
RONA INC.: RONA Announces its First Quarter Results for 2007
BOUCHERVILLE, QUEBEC —
RONA (TSX: RON)
- Sales up 10%.
- 4.1% decrease in operating income.
- Net earnings of $9.0 million, or $0.08 per share, compared to $16.4 million or $0.14 per share in 2006.
- Acquisition of plumbing specialist Noble Trade closed on April 2, 2007.
- Management stays on course for the 7-07 Program and implements additional measures to support earnings growth in the next quarters.
RONA (TSX: RON), the largest Canadian distributor and retailer of hardware, home renovation and gardening products, has announced a 10% increase in sales for the first quarter. Strong seasonal variations and unfavourable economic and weather conditions have, however, affected the Company’s profitability. Operating income for the first quarter was down 4.1%, and net earnings amounted to $9.0 million, or $0.08 per share, compared to $16.4 million, or $0.14 per share in 2006.
“Several factors negatively affected our first quarter results,” explained Robert Dutton, RONA president and CEO. “We don’t have much room to manoeuvre to adapt to the changes in our business environment in the first quarter of the year because historically less than 20% of sales and less than 10% of earnings are generated during that period. Half the reduction in our net earnings can be attributed to temporary and foreseen effects that will reduce in the coming quarters. The other half is related to conditions that were more difficult to anticipate, such as unfavourable weather conditions and a more pronounced than expected slowdown of economic growth in Ontario and Quebec.”
“It is part of RONA’s culture to react swiftly to unfavourable developments in the marketplace. To counter the current environment and maintain earnings growth, we have put in place a number of measures to stimulate sales and improve operational efficiency over the next quarters. These measures include an intensified program to increase sales of private label products, new measures to enhance customer loyalty, and further cost reduction and productivity improvement measures,” Dutton said.
“Despite the current situation, I still have confidence that we will achieve the goal of our 7-07 Program, which is to achieve $7 billion in annualized retail sales by the end of 2007. Our business model is robust and can perform very well in any kind of market environment. For the next quarters, sales growth will mostly come from acquisitions, recruitment of independent dealer-owners and store openings,” he concluded.
These are the main temporary and foreseen factors identified by management that represent half of the decrease in net earnings:
- Increase in fixed costs related to network development, especially depreciation and financial costs related to recent store openings and acquisitions. Since historically the first quarter represents less than 20% of annual sales and less than 10% of earnings, the effect of the increase in these fixed costs is much greater at the beginning of the year than in other quarters.
- Increase in seasonal effect related to the sale of building materials. The 2006 acquisitions of Curtis Lumber and Materiaux Coupal, two companies specializing in the sale of building materials, and Chester Dawe, a company with a high percentage of sales of building materials, have increased our sensitivity to this seasonal effect, which was more pronounced in the first quarter of 2007. These businesses, which are typically weak in the first quarter with much stronger results in the rest of the year - especially in the second quarter - largely account for the change. This situation should also be mitigated by last month’s acquisition of Noble Trade, which operates in a less seasonal and cyclical segment.
Two other unpredictable factors contributed to the other half of the decline in net earnings:
- Particularly bad weather conditions in the first quarter in several areas of the country, including periods of intense cold, deep snow and variable conditions at the beginning and end of the period.
- A greater-than-anticipated slowdown in economic growth in Eastern Canada. Because of a drop in demand for Canadian exports and the need to adjust inventory, production growth in the country slowed down more than the Bank of Canada predicted in the second half of 2006. In its most recent bulletin, the Bank of Canada adjusted its economic growth predictions for 2007 slightly downward, to 2.2%.
Weather and economic conditions also directly impacted the sales of product categories like paint, tools, building materials and forest products. On the other hand, sales in categories like plumbing, ventilation and electrical products performed well.
Other than the factors mentioned above, the distribution sector posted good growth, with an increase of 3.5% in revenues and 10% in operating income. This performance reflects a major effort to develop the distribution network and improve efficiency.
FINANCIAL HIGHLIGHTS
Sales up $80 million or 10%
Consolidated sales for the first quarter of 2007 stood at $878.5 million, or 10% more than the $798.8 million posted in 2006. This growth can mainly be attributed to acquisitions, store openings, and the recruitment of new affiliate dealer-owners. Excluding the contributions from major acquisitions, such as Chester Dawe, Curtis Lumber, Materiaux Coupal and Mountain Building Centres, consolidated sales increased by 4.7%. This internal growth comes from sales generated by new stores opened during the last 12 months and from increased sales in the distribution network.
Same-store sales declined by 0.1% during the first quarter. The effect of the drop in average lumber prices was 1.2 %. Excluding this, same-store sales increased by 1.1% during the quarter. This growth came mainly from stores in the western part of the country, where economic activity continued to be higher than in Ontario and Quebec.
Operating income down $1.7 million, or 4.1%
First quarter operating income was $40.9 million, a decrease of $1.7 million, or 4.1%, over 2006. This decline is rooted in the performance of corporate and franchise stores, since the distribution sector continued to perform well, with growth of 10% in operating income and continued improvement of its EBITDA margin, currently at 7.5%. This performance reflects a major effort to develop the distribution network and improve efficiency.
Part of the reduced operating profits for corporate and franchise stores can be attributed to temporary and foreseeable factors. First of all, fixed costs increased significantly year over year, reflecting the rapid growth of the network and, in particular, recent store openings and acquisitions. The second factor is the increase in the seasonal effect related to the sale of building materials. Finally, two other factors help explain the drop in operating income and the reduction in EBITDA margin: particularly unfavourable weather conditions in the first quarter and a more pronounced than expected slowdown of economic growth in Ontario and Quebec. To counter these effects, we have redoubled our efforts with investments to improve service and in promotional activities to stimulate traffic and maintain customer loyalty.
EBITDA margin declined from 5.3% in the first quarter of 2006 to 4.6% in the first quarter of 2007. Historically the EBITDA margin in the first quarter is considerably lower than in the other quarters because of the seasonal nature of our activities. The drop in comparison to the first quarter of 2006 arises from a reduction in the EBITDA margin for the corporate and franchise store sector, largely due to temporary factors. Half the drop in the sector can be attributed to seasonality and the margin level in the recently acquired specialized stores. The other half is the result of the relative weight of fixed investment costs related to the opening of new stores. Excluding these factors, EBITDA margin would have been the same as in 2006. Economic conditions and bad weather in the first quarter effectively eliminated productivity gains achieved by the network of corporate and franchise stores. The distribution sector, on the other hand, increased its EBTIDA margin by 50 basis points, reflecting ongoing efficiency enhancements in the Company’s distribution operations, including the expansion of the network, improved purchasing processes and the addition of more productive facilities, which reduced the costs of operating smaller satellite centres.
An exchange rate gain of $1.2 million was recorded relating to the adoption of a new accounting standard for financial instruments (for more information please see Note 2 in the financial statements).
Net earnings down
Net income in the first quarter 2007 was $9.0 million or $0.08 per share, compared with $16.4 million or $0.14 per share in 2006. Half this decline can be attributed to foreseen and temporary conditions in the first quarter, which should be recovered in the remaining quarters. The rest of the reduction was due to conditions that were more difficult to anticipate.
The factors that affected operating income also apply to the change in net earnings. To these factors can also be added the increase in fixed costs related to the growth of the network, including depreciation and financial fees related to recent store openings and acquisitions. Since the first quarter represents less than 20% of sales and less than 10% of annual net earnings, the effect of these charges is naturally greater at the beginning of the year. During the first quarter of 2007, the distribution sector performed very well, thanks to the development of the network and efficiency gains. Finally, a $1.2 million pre-tax gain on exchange rates was posted in the first quarter in relation to the application of a new accounting standard for financial instruments.
CASH FLOWS AND FINANCIAL POSITION
First quarter operations generated cash flows of $26.0 million in 2007, compared with $29.7 million in 2006. As a result of the increase in working capital related to development of the retail and distribution networks, operations used $131.6 million compared with $59.0 million in 2006. This is due primarily to the increase in inventories from acquisitions and new stores. At the end of the first quarter, inventory levels were higher than anticipated at this time of the year by about $30 million because of the unfavourable weather conditions during the quarter.
RONA’s balance sheet remains strong. On April 1, 2007, the total debt-to-capital ratio used was 35.1%, compared with 33.7% at the close of the first quarter in 2006. With relatively low debt and rates fixed for 10 years on our long-term debt, we have significant liquidity and can access some $ 350 million of additional credit at competitive rates. Our resources are sufficient to continue our development along our four vectors of growth: sales growth in our existing network, construction of new corporate and franchise stores, recruitment of new affiliate stores, and acquisitions.
OUTLOOK
No matter how the economic environment looks, structural factors, the consolidation of our industry and the diversity of our four growth vectors make our growth strategy robust. Despite the fact that our first quarter was more difficult than expected, RONA’s management will stay on course in 2007 and continue to pursue the 7-07 Program, with the goal of generating $7 billion in annualized retail sales from our network by the end of 2007. With the inclusion of Noble Trade, annualized sales are currently close to $6 billion. In light of the current business environment, however, management believes that sales from existing and new stores will be weaker than planned for 2007. Growth in coming quarters is expected to come from market consolidation through the recruitment of more dealer-owners, the addition of new stores, and acquisitions, all of which together should allow RONA to improve its position in the industry and continue to create value for our shareholders.
ADDITIONAL INFORMATION
The Management Discussion and Analysis and the financial statements for the first quarter of 2007 may be consulted in the investor relations section of the Company’s website at www.rona.ca, and at www.sedar.com. RONA’s annual report can also be found on the RONA and SEDAR websites, along with other information about RONA, including the Company’s annual information form.
CONFERENCE CALL WITH THE FINANCIAL COMMUNITY
On Tuesday, May 8, 2007, at 11:00 AM (DST), RONA will hold a conference call for the financial community. To join the conference, please dial 514-861-0443 or 1-866-696-5911. To follow the conference call online, please go to http://events.startcast.com/events/153/B0015.
ANNUAL GENERAL MEETING AND MEDIA INFORMATION SESSION
The Annual General Meeting of Shareholders will take place today, May 8, 2007, at 4:00 PM DST in the Grand Salon of the Fairmont Queen Elizabeth Hotel, 900 Rene-Levesque Boulevard West in Montreal. The meeting can be followed live online at http://events.onlinebroadcasting.com/rona/050807f/index.php.
As part of the Annual General Meeting of Shareholders, RONA management has also invited the media to an information session at 12:30 PM DST in the Salon Matapedia of the Fairmont Queen Elizabeth Hotel at 900 Rene-Levesque Boulevard West in Montreal.
NON-GAAP PERFORMANCE MEASURE
In this press release, as in our internal management, we use the concept of earnings before interest, taxes, depreciation and amortization (EBITDA), which we also refer to as operating income. This corresponds to “Earnings before the following items” in our consolidated financial statements.
While the meaning of EBITDA is not standardized by GAAP, it is widely used in our industry and financial circles to measure the profitability of operations, excluding tax considerations and the cost and use of capital. As it is not standardized, EBITDA cannot be compared from one company to the next, but we calculate it internally in the same way for every identified segment, and, unless expressly mentioned, our method does not change over time. EBITDA should not be regarded in isolation or as a substitute for other measurements of performance calculated according to GAAP, but rather as additional information.
FORWARD-LOOKING STATEMENTS
This press release includes “forward-looking statements” that involve risks and uncertainties. All statements other than statements of historical facts included in this press release, including statements regarding the prospects of the industry and prospects, plans, financial position and business strategy of the Company, may constitute forward-looking statements within the meaning of the Canadian securities legislation and regulations. Investors and others are cautioned that undue reliance should not be placed on any forward-looking statements.
For more information on the risks, uncertainties and assumptions that would cause the Company’s actual results to differ from current expectations, please also refer to the Company’s public filings available at www.sedar.com and www.rona.ca . In particular, further details and descriptions of these and other factors are disclosed in the MD&A under the “Risks and Uncertainties” section and in the “Risk Factors” section of the company’s current Annual Information Form.
The forward-looking statements in this press release reflect the Company’s expectations as of May 7, 2007, and are subject to change after this date. The Company expressly disclaims any obligation or intention to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, unless required by the applicable securities laws.
ABOUT RONA
RONA is the largest Canadian distributor and retailer of hardware, home renovation and gardening products. RONA operates a network of 668 franchise, affiliate and corporate stores of various sizes and formats. With over 26,000 employees working under its family of banners in every region of Canada and more than 14 million square feet of retail space, the RONA store network generates $6 billion in annual retail sales.
RONA
Consolidated Financial Statements
April 1, 2007 and March 26, 2006
RONA inc.
Consolidated Earnings
For the thirteen-week periods ended April 1, 2007 and March 26, 2006
(Unaudited, in thousands of dollars, except earnings per share)
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2007 2006
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Sales $878,496 $798,786
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Earnings before the following items 40,850 42,581
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Interest on long-term debt 6,247 4,294
Interest on bank loans 784 714
Depreciation and amortization 21,605 15,650
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28,636 20,658
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Earnings before income taxes and
non-controlling interest 12,214 21,923
Income taxes 3,678 6,537
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Earnings before non-controlling interest 8,536 15,386
Non-controlling interest (491) (994)
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Net earnings $9,027 $16,380
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Earnings per share (Note 10) $0.08 $0.14
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Diluted earnings per share (Note 10) $0.08 $0.14
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The accompanying notes are an integral part of the interim
consolidated financial statements.
RONA inc.
Consolidated Retained Earnings
Consolidated Contributed Surplus
For the thirteen-week periods ended April 1, 2007 and March 26, 2006
(Unaudited, in thousands of dollars)
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2007 2006
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Consolidated Retained Earnings
Balance, beginning of period, as previously
reported $709,467 $518,883
Financial instruments - recognition and
measurement (Note 2) (1,589) -
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Restated balance, beginning of period 707,878 518,883
Net earnings 9,027 16,380
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Balance, end of period $716,905 $535,263
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Consolidated Contributed Surplus
Balance, beginning of period $9,182 $6,618
Compensation cost relating to stock-based
compensation plans 471 428
Exercise of stock options (219) (16)
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Balance, end of period $9,434 $7,030
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The accompanying notes are an integral part of the interim
consolidated financial statements.
RONA inc.
Consolidated Cash Flows
For the thirteen-week periods ended April 1, 2007 and March 26, 2006
(Unaudited, in thousands of dollars)
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2007 2006
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Operating activities
Net earnings $9,027 $16,380
Non-cash items
Depreciation and amortization 21,605 15,650
Derivative financial instruments (1,224) -
Future income taxes (4,281) (1,351)
Net loss (gain) on disposal of assets 60 (19)
Compensation cost relating to stock-based
compensation plans 471 428
Non-controlling interest (491) (994)
Other items 819 (406)
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25,986 29,688
Changes in working capital items (157,543) (88,659)
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Cash flows from operating activities (131,557) (58,971)
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Investing activities
Business acquisitions (Note 3) (3,023) (85,373)
Advances to joint ventures and other advances 4,025 (182)
Fixed assets (42,780) (38,033)
Other assets (1,493) (1,753)
Disposal of assets 1,270 1,190
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Cash flows from investing activities (42,001) (124,151)
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Financing activities
Bank loans and revolving credit 123,038 206,121
Other long-term debt 922 1,243
Repayment of other long-term debt and
redemption of preferred shares (9,742) (5,044)
Issue of common shares 2,220 1,143
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Cash flows from financing activities 116,438 203,463
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Net increase (decrease) in cash (57,120) 20,341
Cash, beginning of period 58,486 4,120
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Cash, end of period $1,366 $24,461
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Supplementary information
Interest paid $6,668 $4,795
Income taxes paid $37,462 $33,719
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The accompanying notes are an integral part of the interim
consolidated financial statements.
RONA inc.
Consolidated Balance Sheets
April 1, 2007, March 26, 2006 and December 31, 2006
(In thousands of dollars)
2007 2006 2006
April 1 March 26 December 31
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(unaudited) (unaudited)
Assets
Current assets
Cash $1,366 $24,461 $58,486
Accounts receivable 266,320 236,240 205,808
Income taxes receivable 22,254 19,899 -
Inventory 943,878 849,507 790,496
Prepaid expenses 27,165 25,888 23,454
Future income taxes 15,627 8,158 10,859
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1,276,610 1,164,153 1,089,103
Investments 14,793 17,236 17,642
Fixed assets 662,102 459,784 634,131
Goodwill 317,399 288,372 316,558
Trademarks 1,326 - 1,380
Other assets 25,321 17,719 30,314
Future income taxes 18,438 22,691 19,254
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$2,315,989 $1,969,955 $2,108,382
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Liabilities
Current liabilities
Bank loans $27,813 $33,702 $21,221
Accounts payable and accrued
liabilities 485,485 487,922 394,103
Income taxes payable - - 7,242
Derivative financial instruments
(Note 2) 1,158 - -
Future income taxes 971 205 3,314
Instalments on long-term debt 25,883 16,878 29,511
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541,310 538,707 455,391
Long-term debt 565,431 433,313 455,310
Other long-term liabilities 21,282 15,438 20,386
Future income taxes 20,491 13,677 19,402
Non-controlling interest 22,980 14,686 23,527
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1,171,494 1,015,821 974,016
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Shareholders' equity
Capital stock (Note 4) 418,156 411,841 415,717
Retained earnings 716,905 535,263 709,467
Contributed surplus 9,434 7,030 9,182
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1,144,495 954,134 1,134,366
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$2,315,989 $1,969,955 $2,108,382
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The accompanying notes are an integral part of the interim
consolidated financial statements.
RONA inc.
Notes to Interim Consolidated Financial Statements
April 1, 2007 and March 26, 2006
(Unaudited, in thousands of dollars, except amounts per share)
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1. Basis of presentation
The accompanying unaudited interim consolidated financial statements are in accordance with Canadian generally accepted accounting principles for interim financial statements and do not include all the information required for complete financial statements. They are also consistent with the policies outlined in the Company’s audited financial statements for the years ended December 31, 2006. The interim financial statements and related notes should be read in conjunction with the Company’s audited financial statements for the year ended December 31, 2006. The interim operating results do not necessarily reflect the results for the full fiscal year. Accordingly, the comparative balance sheet as March 26, 2006 is also included to reflect seasonal fluctuations that characterize the hardware, renovation and home garden industry. When necessary, the financial statements include amounts based on estimated information and management’s best judgments. Certain comparative figures have been reclassified to conform with the presentation adopted in the current period.
2. Changes in accounting policies
On January 1, 2007, in accordance with applicable transitional provisions, the Company retroactively adopted without restatement of prior period financial statements the following new recommendations of the Canadian Institute of Chartered Accountants (CICA) Handbook:
Financial instruments
Section 3855, Financial Instruments - Recognition and Measurement and Section 3861, Financial Instruments - Disclosure and Presentation describe standards for the classification, recognition, measurement, disclosure and presentation of financial instruments (including derivatives) and non-financial derivatives in the financial statements.
The adoption of these new standards resulted in the following changes in the classification and measurement of the Company’s financial instruments, previously recorded at cost:
- Cash is classified as a “financial asset held for trading” and is measured at fair value. All changes in fair value are recognized in earnings. This change had no impact on the Company’s consolidated financial statements.
- Accounts receivable and long-term loans and advances and redeemable preferred shares (included in investments) are classified as “loans and receivables” and are recorded at cost which at initial measurement corresponds to fair value. Subsequent revaluations of accounts receivable are recorded at amortized cost which generally corresponds to initial measurement less all allowances for doubtful accounts. Subsequent revaluations of long-term loans and advances and redeemable preferred shares are recorded at amortized cost using the effective interest method less any amortization. This change had no impact on the Company’s consolidated financial statements.
- Bank loans and accounts payable and accrued liabilities are classified as “other financial liabilities”. They are initially measured at fair value and subsequent revaluations are recorded at amortized cost using the effective interest method. This change had no impact on the Company’s consolidated financial statements.
- Long-term debt is classified as “other financial liabilities”. It is measured at amortized cost which corresponds to initial measurement plus accumulated amortization of financing costs. Initial measurement corresponds to the principal amount of the debt less applicable financing costs. This change resulted in a decrease of $4,870 in deferred financing costs previously included in other assets, a decrease of $4,824 in long-term debt and an increase of $46 ($31, net of future income taxes) in opening retained earnings.
The Company also adopted the following accounting policies:
- Transaction costs related to other financial liabilities are recorded as a reduction in the book value of the related financial liability.
- The Company records as a separate asset or liability only those derivatives embedded in hybrid financial instruments issued, acquired or substantially modified by the Company as at December 29, 2002 when these hybrid instruments are not recorded as held for trading and remain outstanding at January 1, 2007. Embedded derivatives that are not closely related to the host contracts must be separated from the host contract, classified as a financial instrument held for trading and measured at fair value with changes in fair value recorded in earnings. The Company has not identified any embedded derivatives to be separated other than derivatives embedded in purchase contracts concluded in foreign countries and settled in a foreign currency that is not the conventional currency of either of the two principal parties to the contract. Although the payments are made in a foreign currency that is routinely used in the economic environment where the transaction occurred, the Company has opted to separate the embedded derivatives. This policy change resulted in an increase in short-term liabilities of $2,382 and a decrease in Retained earnings of $2,382 ($1,620 net of future income taxes) at January 1, 2007. For the quarter ended April 1, 2007 this policy change resulted in an increase in earnings before interest, depreciation and amortization, income taxes and non-controlling interest of $1,224.
Comprehensive income
Section 1530, Comprehensive Income describes standards for the presentation of comprehensive income and its components. Comprehensive income is the change in shareholders’ equity, which results from transactions and events from sources other than the Company’s shareholders. The adoption of the new recommendation had no impact on the Company’s consolidated financial statements.
Equity
Section 3251, Equity describes standards for the presentation of equity and changes in equity in the period. The adoption of the new recommendation had no impact on the Company’s consolidated financial statements.
Accounting changes (Note 12)
On January 1, 2007, in accordance with applicable transitional provisions, the Company adopted the new recommendations of CICA Handbook, Section 1506, Accounting Changes. This section establishes the criteria for changing accounting policies together with the accounting treatment and disclosure of changes in accounting policies, changes in accounting estimates and corrections of errors.
Accounting by a vendor for consideration given to a customer (volume rebates)
At the beginning of fiscal year 2006, the Company adopted EIC-156 “Accounting by a Vendor for Consideration Given to a Customer (Including a Reseller of the Vendor’s Products)”, which provides guidance as to the circumstances under which a consideration is an adjustment of the selling price of the vendor’s products or services and under which it is a cost incurred by the vendor to sell his products. EIC-156 was applied retroactively, with restatement of prior years. Volume rebates to customers, previously presented as a reduction of earnings before interest, depreciation and amortization, income taxes and non-controlling interest are now presented as a reduction of sales.
3. Business acquisitions
During the period, the Company acquired two companies, operating in the corporate and franchised stores segment, by way of share or asset purchase. These acquisitions were for a total consideration of $3,133. The Company financed these acquisitions from its existing credit facilities. The results of operations of these companies are consolidated from their date of acquisition.
The preliminary allocation of the purchase price of the acquisitions was established as follows:
Current assets $6,424
Fixed assets 2,378
Goodwill 841
Future income taxes 163
Current liabilities (3,149)
Long-term debt (3,524)
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3,133
Less: Balance of purchase price (110)
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Cash consideration paid $3,023
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4. Capital stock
Issued and fully paid:
The following tables present changes in the number of outstanding
common shares and their aggregate stated value from December 25, 2005
to April 1, 2007:
April 1, 2007
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Number of shares Amount
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Balance, beginning of period 114,935,569 $413,542
Issuance in exchange for common share
subscription deposits 120,715 2,513
Issuance under stock-based compensation plans 334,327 1,859
Issuance in exchange for cash 2,350 55
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Balance before elimination of reciprocal
shareholdings 115,392,961 417,969
Elimination of reciprocal shareholdings (56,841) (341)
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Balance, end of period 115,336,120 417,628
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Deposits on common share subscriptions,
net of eliminations of joint ventures (a) 528
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$418,156
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March 26, 2006
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Number of shares Amount
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Balance, beginning of period 114,412,744 $408,943
Issuance in exchange for common share
subscription deposits 101,696 2,192
Issuance under stock-based compensation plans 138,000 527
Issuance in exchange for cash 10,757 245
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Balance before elimination of reciprocal
shareholdings 114,663,197 411,907
Elimination of reciprocal shareholdings (78,884) (455)
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Balance, end of period 114,584,313 411,452
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Deposits on common share subscriptions,
net of eliminations of joint ventures (a) 389
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$411,841
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December 31, 2006
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Number of shares Amount
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Balance, beginning of year 114,412,744 $408,943
Issuance in exchange for common share
subscription deposits 101,696 2,192
Issuance under stock-based compensation plans 400,550 1,952
Issuance in exchange for cash 20,579 455
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Balance before elimination of reciprocal
shareholdings 114,935,569 413,542
Elimination of reciprocal shareholdings (54,920) (301)
---------------------------------------------------------------------
Balance, end of year 114,880,649 413,241
---------------------------------------------------------------------
---------------------------------------------------------------------
Deposits on common share subscriptions, net
of eliminations of joint ventures (a) 2,476
---------------------------------------------------------------------
$415,717
---------------------------------------------------------------------
---------------------------------------------------------------------
(a) Deposits on common share subscriptions represent amounts received
during the year from affiliated and franchised merchants in
accordance with commercial agreements. These deposits are
exchanged for common shares on an annual basis.
Stock-based compensation plan of May 1, 2002
The Company adopted a stock option purchase plan for designated senior executives which was approved by the shareholders on May 1, 2002. A total of 2,920,000 options were granted at that date. Options granted under the plan may be exercised since the Company made a public share offering on November 5, 2002. The Company can grant options for a maximum of 3,740,000 common shares. At April 1, 2007 the 2,920,000 options granted have an exercise price of $3.47 and of this number, 1,444,500 options (916,323 options at March 26, 2006) were exercised.
The fair value of each option granted was estimated at the grant date using the Black-Scholes option-pricing model. Calculations were based upon a market price of $3.47, an expected volatility of 30%, a risk-free interest rate of 4.92%, an expected life of four years and 0% expected dividend. The fair value of options granted is $1.10 per option according to this method.
No compensation cost was expensed with respect to this plan for the thirteen-week periods ended April 1, 2007 and March 26, 2006.
Stock-based compensation plan of October 24, 2002
On October 24, 2002, the Board of Directors approved another stock-based compensation plan for designated senior executives of the Company and for designated directors. The total number of common shares which may be issued pursuant to the plan will not exceed 10% of the common shares issued and outstanding less the number of shares subject to options granted under a previous stock option plan. These options become vested at 25% per year, if the market price of the common share has traded, for at least 20 consecutive trading days during the twelve-month period preceding the grant anniversary date, at a price equal to or higher than the grant price plus a premium of 8% compounded annually.
On March 8, 2007 the Board of Directors approved certain modifications to the plan. These modifications are subject to shareholder approval at the annual shareholders meeting on May 8. Among others, these modifications establish that this plan is no longer applicable to the designated directors of the Company and also provide for the replacement of the terms and conditions for the granting of options under the plan by a more flexible mechanism for setting the terms and conditions for the granting of options. The Board of Directors will be able to adopt the most appropriate terms and conditions relative to each type of option. For the options granted on March 8, the Board approved the option grant where vesting will occur over a four-year period following the anniversary date of the grant at 25% per year, all subject to the approval by the shareholders as mentioned above.
At April 1, 2007, the 1,700,852 options (1,487,276 options at March 26, 2006) granted have exercise prices ranging from $14.29 to $26.87 ($14.29 to $23.73 in 2006) and of this number, 85,100 options (16,400 options at March 26, 2006) have been exercised and 95,200 options (60,850 options at March 26, 2006) have been cancelled.
The fair value of stock options granted was estimated at the grant date using the Black-Scholes option-pricing model on the basis of the following weighted average assumptions for the stock options granted during the period:
April 1, March 26,
2007 2006
---------------------------------------------------------------------
Weighted average fair value per option granted $8.50 $7.63
Risk-free interest rate 3.90% 4.07%
Expected volatility in stock price 26% 28%
Expected annual dividend 0% 0%
Expected life (years) 6 6
Compensation cost expensed with respect to this plan was $471 for the
thirteen-week period ended April 1, 2007 ($428 at March 26, 2006).
A summary of the situation from December 25, 2005 to April 1, 2007 of
the Company's stock option plans and the changes that occurred during
the periods then ended is presented below:
April 1, 2007
---------------------------------------------------------------------
Weighted average
Options exercise price
---------------------------------------------------------------------
Balance, beginning of period 3,162,479 $10.16
Granted 196,000 23.58
Exercised (334,327) 4.90
Cancelled (28,100) 19.62
---------------------------------------------------------------------
Balance, end of period 2,996,052 11.53
---------------------------------------------------------------------
---------------------------------------------------------------------
Options exercisable, end of period 1,896,600 $6.20
---------------------------------------------------------------------
---------------------------------------------------------------------
March 26, 2006
---------------------------------------------------------------------
Weighted average
Options exercise price
---------------------------------------------------------------------
Balance, beginning of period 3,131,327 $7.84
Granted 446,076 21.21
Exercised (138,000) 3.71
Cancelled (25,700) 17.78
---------------------------------------------------------------------
Balance, end of period 3,413,703 9.68
---------------------------------------------------------------------
---------------------------------------------------------------------
Options exercisable, end of period 2,370,827 $5.44
---------------------------------------------------------------------
---------------------------------------------------------------------
December 31, 2006
---------------------------------------------------------------------
Weighted average
Options exercise price
---------------------------------------------------------------------
Balance, beginning of year 3,131,327 $7.84
Granted 463,652 21.45
Exercised (400,550) 4.43
Cancelled (31,950) 18.34
---------------------------------------------------------------------
Balance, end of year 3,162,479 10.16
---------------------------------------------------------------------
---------------------------------------------------------------------
Options exercisable, end of year 2,230,927 $6.00
---------------------------------------------------------------------
---------------------------------------------------------------------
The following table summarizes information relating to stock options
outstanding at April 1, 2007:
Exercise Expiration Options Options
price date outstanding exercisable
------------------------------------------------------------
$ 3.47 December 31, 2012 1,475,500 1,475,500
$14.29 December 16, 2013 435,400 317,350
$20.27 December 22, 2014 427,000 103,750
$23.73 April 5, 2015 11,000 -
$21.21 February 24, 2016 416,000 -
$26.87 February 24, 2016 17,576 -
$21.78 September 1, 2016 17,576 -
$23.58 March 8, 2017 196,000 -
------------------------------------------------------------
2,996,052 1,896,600
------------------------------------------------------------
------------------------------------------------------------
5. Guarantees
In the normal course of business, the Company reaches agreements that could meet the definition of “guarantees” in AcG-14.
The Company guarantees mortgages for certain customers to an amount of $6,009. The terms of these loans extend until 2012 and the net carrying amount of the assets held as security, which mainly include land and buildings, is $15,102.
Pursuant to the terms of inventory repurchase agreements, the Company is committed towards financial institutions to buy back the inventory of certain customers at an average of 62% of the cost of the inventories to a maximum of $56,979. In the event of recourse, this inventory would be sold in the normal course of the Company’s operations. These agreements have undetermined periods but may be cancelled by the Company with a 30-day advance notice. In the opinion of management, the likelihood that significant payments would be incurred as a result of these commitments is low.
6. Vendor rebates
In accordance with EIC-144 “Accounting by a customer (including a reseller) for certain consideration received from a vendor”, the Company must disclose the amount recognized for which the full requirements for vendor rebate entitlement have not yet been met. For the thirteen-week period ended April 1, 2007, the Company recorded an amount of $6,234 ($5,734 at March 26, 2006) which was estimated based on the attainment of specified requirements to receive the rebates.
7. Employee future benefits
At April 1, 2007, the Company had nine defined contribution pension plans and four defined benefit pension plans. The net pension expense for the benefit plans is as follows:
2007 2006
---------------------------------------------------------------------
Costs recognized for defined contribution
pension plans $2,084 $1,551
Costs recognized for defined benefit pension
plans 326 310
---------------------------------------------------------------------
Net employee future benefit costs $2,410 $1,861
---------------------------------------------------------------------
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8. Contingencies
Various claims and litigation arise in the course of the Company’s activities and its insurers have taken up the Company’s defense in some of these cases. In addition, upon the acquisition of Reno-Depot Inc., the vendor committed to indemnify the Company for litigation which the Company assumed in the course of this acquisition.
Management does not expect that the outcome of these claims and litigation will have a material and adverse effect on the Company’s results and deemed its allowances adequate in this regard.
9. Segmented information
The Company has two reportable segments: distribution and corporate and franchised stores. The distribution segment relates to the supply activities to affiliated, franchised and corporate stores. The corporate and franchised stores segment relates to the retail operations of the corporate stores and the Company’s share of the retail operations of the franchised stores in which the Company has an interest.
The accounting policies that apply to the reportable segments are the same as those described in accounting policies. The Company evaluates performance according to earnings before interest, depreciation and amortization, rent, income taxes and non-controlling interest, i.e. sales less chargeable expenses. The Company accounts for intersegment operations at fair value.
2007
---------------------------------------------------------------------
Corporate
and
franchised
Distribution stores Total
---------------------------------------------------------------------
Segment sales $489,528 $647,195 $1,136,723
Intersegment sales and royalties (255,907) (2,320) (258,227)
---------------------------------------------------------------------
Sales 233,621 644,875 878,496
---------------------------------------------------------------------
---------------------------------------------------------------------
Earnings before interest,
depreciation and amortization,
rent, income taxes and
non-controlling interest 22,115 48,850 70,965
Earnings before interest,
depreciation and amortization,
income taxes and non-controlling
interest 17,463 23,387 40,850
Total assets 475,332 1,840,657 2,315,989
Acquisition of fixed assets 4,558 39,446 44,004
Goodwill - 841 841
2006
---------------------------------------------------------------------
Corporate
and
franchised
Distribution stores Total
---------------------------------------------------------------------
Segment sales $446,889 $575,057 $1,021,946
Intersegment sales and royalties (221,117) (2,043) (223,160)
---------------------------------------------------------------------
Sales 225,772 573,014 798,786
---------------------------------------------------------------------
---------------------------------------------------------------------
Earnings before interest,
depreciation and amortization,
rent, income taxes and
non-controlling interest 21,903 47,744 69,647
Earnings before interest,
depreciation and amortization,
income taxes and non-controlling
interest 15,879 26,702 42,581
Total assets 440,303 1,529,652 1,969,955
Acquisition of fixed assets 10,480 33,828 44,308
Goodwill - 36,035 36,035
10. Earnings per share
The following tables present a reconciliation of earnings per share
and diluted earnings per share.
2007
---------------------------------------------------------------------
Weighted
average
number
Earnings of shares EPS
---------------------------------------------------------------------
(in
thousands)
Earnings per share:
Net earnings $9,027 115,129.1 $0.08
Diluted earnings per share:
Effect of dilutive securities
Impact of exercising
stock options(a) - 1,635.1
---------------------------------------------------------------------
Net earnings available for common
shareholders $9,027 116,764.2 $0.08
---------------------------------------------------------------------
---------------------------------------------------------------------
2006
---------------------------------------------------------------------
Weighted
average
number
Earnings of shares EPS
---------------------------------------------------------------------
(in
thousands)
Earnings per share:
Net earnings $16,380 114,481.4 $0.14
Diluted earnings per share:
Effect of dilutive securities
Impact of exercising
stock options (a) - 1,916.5 -
---------------------------------------------------------------------
Net earnings available
for common shareholders $16,380 116,397.9 $0.14
---------------------------------------------------------------------
---------------------------------------------------------------------
(a) At April 1, 2007, 658,152 common share stock options (916,076 at
March 26, 2006) were excluded from the calculation of diluted
earnings per share since the unrecognized future compensation
cost of these options has an antidilutive effect.
11. Subsequent event
The Company has received all required regulatory approvals to complete the acquisition of all of the assets of Noble Trade Inc., a private company operating in the corporate and franchised stores and distribution segments. Previously announced on February 7, 2007, the transaction closed on April 2, 2007 and the results of operations will be consolidated as of this date.
12. Effect of new accounting standards not yet implemented
In December 2006, the CICA issued the following new recommendations which apply to fiscal years beginning on or after October 1, 2007. During the next quarters, the Company will evaluate the impact of the adoption of these new sections on its consolidated financial statements.
Financial instruments - disclosures
Section 3862, Financial Instruments - Disclosures describes the required disclosures related to the significance of financial instruments on the entity’s financial position and performance and the nature and extent of risks arising for financial instruments to which the entity is exposed and how the entity manages those risks. This Section complements the principles of recognition, measurement and presentation of financial instruments of Section 3855, Financial Instruments - Recognition and Measurement.
Financial instruments - presentation
Section 3863, Financial Instruments - Presentation establishes standards for presentation of financial instruments and non-financial derivatives. It complements standards of Section 3861, Financial Instruments - Disclosure and Presentation.
Capital disclosures
Section 1535, Capital Disclosures establishes standards for disclosing information about the entity’s capital and how it is managed to enable users of financial statements to evaluate the entity’s objectives, policies and procedures for managing capital.
Contacts: RONA Inc./Media Michele Roy, Vice-President, Communications and Public Affairs 514-599-5900, extension 5398 michele.roy@rona.ca RONA Inc./Financial Community Stephane Milot, Senior Director, Investor Relations 514-599-5951 stephane.milot@rona.ca Sphere Communications France Bouffard 514-286-2772, extension 10
SOURCE: RONA INC.
Popularity: 31% [?]
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November 22nd, 2008
A document that many financial instituti…. (nevada understanding mortgage)
Posted in Bad Credit Mortgages by Admin
A document that many financial institutions request when you are applying for first time loans is a copy of your income tax return.
If the homeowner is lucky, then the credit score will be increased and the interest rate for the desired home equity line of credit will be lowered.
The first thing to consider for 2nd mortgage is the reason behind you going for the second mortgage.
You can analyze other possibilities by keeping in mind how the adjustable rate mortgage acts as fixed rate mortgage.
Rising Bad Debt Could Mean the End of Free Banking
Consumers set to suffer as banks may take away free banking and announce bumper profits but increases in bad debt.
(PRWEB via PR Web Direct) August 16, 2006 – Rising bad debt and industry restrictions may finally kill the UK’s access to free banking.
style=’text-decoration:none;color:#748DA7; font-size: 16px; font-family: Arial,
Helvetica, sans-serif; font-weight: bold’>Banks are clearly feeling the heat from increased scrutiny over their charges – the impact of the Office of Fair Trading’s recommended reduction in credit card penalty fees from an average of £22 to £12, said Richard Mason, director at price comparison website www.moneysupermarket.com.
Despite its announcement of booming profits this week, HSBC said it was experiencing increasing numbers of borrowers reneging on their repayments, and a spokesman later stated it may need to consider charging customers for their current accounts.
Popularity: 31% [?]