 |
 |
||||||
[January 2009]
Brampton Brick Announces Writedown of Goodwill
Brampton Brick Ltd (Brampton, Ontario, Canada) has announced that for the fourth quarter and year ended 31 December 2008 it will record a non-cash charge of $6.7 million to write off the remaining carrying value of goodwill. This determination was made following completion of the annual test for impairment as required under Canadian generally accepted accounting principles.
The impact on consolidated net income is estimated to be approximately $6.0 million, or $0.55 per share, which is the net amount after taking into account a reduction in the provision for income taxes of approximately $0.7 million. The weighted average number of Class A Subordinate Voting shares and Class B Multiple Voting shares outstanding is approximately 10,936,000.
The goodwill carried on the company’s consolidated financial statements relates to the Landscape Products business operations acquired in 2002 and includes the concrete products manufacturing plants located in Markham and Milton, Ontario and Wixom, Michigan.
Operating results in these business operations in 2008 were significantly impacted by negative economic conditions affecting its primary market areas of Ontario and Michigan. Furthermore, given the current economic environment, it is highly possible that these negative conditions may continue for some time before the economy begins to recover to any meaningful degree. Consequently, the company considered it appropriate to write off the remaining carrying value of goodwill at this time.
Commencing in 2007 and continuing throughout 2008, management has undertaken a number of initiatives to rationalise manufacturing operations, integrate personnel and operating procedures and develop new products. Operating plans for 2009 have been structured to minimise the impact of the cyclical downturn on operating results and cash flows and to position the company to be able to maximise profitability during the ensuing recovery.
Complete results for the fourth quarter and year ended 31 December 2008 are scheduled to be released on 10 March 2009 following the meeting of the company’s Board of Directors.
ENDS