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[May 2008]
Brampton Brick First Quarter Results
Brampton Brick Ltd (Brampton, Ontario, Canada) has reported a loss of C$4.077 million for the first quarter ended 31 March 2008. For the first quarter of 2007, the company incurred a loss of C$2.542 million. Net sales from continuing operations for the quarter were C$10.391 million compared to C$11.015 million in 2007. Lower shipments in the Masonry Products business segment resulted in a net decrease of C$624,000 in consolidated net sales from continuing operations.
Substantially lower production volumes, in both the Masonry Products and Landscape Products business segments, in the first quarter of 2008 compared to the first quarter of 2007 resulted in an increase in unabsorbed manufacturing expenses charged against operations. This variance accounted for most of the increase in cost of goods sold. Higher distribution costs, which resulted from an increase in personnel costs and higher transportation costs in the Sharpsmart operations, also contributed to the increase in cost of goods sold.
Selling, general and administrative expenses increased by C$209,000 over last year. The increase was primarily attributable to higher advertising and other marketing expenditures related to the introduction of new products. As a result of the decrease in net sales and the increases in cost of goods sold and selling, general and administrative expenses, the operating loss from continuing operations, before interest and other items, amounted to C$5.739 million for Q1 2008 compared to C$3.543 million for the same period in 2007.
Interest on long-term debt decreased by C$92,000 to C$120,000 primarily due to the repayment of C$4 million in December 2007 on the promissory note payable. Net interest income decreased as a result of lower surplus cash balances available for investment.
As a result of unfavourable weather conditions and the continuing economic downturn affecting the company’s markets, clay brick shipments were approximately 6% lower in 2008 compared to 2007. The reduction in clay brick shipments was partially offset by sales of new concrete masonry products introduced in 2007.
Two of the company’s three clay brick kilns were shut down throughout the first quarter. As a result, production volumes were lower than in the first quarter of 2007. Due to the relatively high fixed cost nature of these operations, unabsorbed manufacturing expenses charged against operations were higher in the first quarter of 2008 compared to the first quarter of 2007.
Higher distribution costs and an increase in selling expenses, for the reasons outlined above, also contributed to the increase in the operating loss incurred by this business segment in 2008 over the operating loss incurred in 2007.
Construction of the company’s new clay brick manufacturing plant in Indiana, which commenced in 2007, is substantially on schedule and is expected to be completed in the fourth quarter of 2008. In 2007 Universal received the required Certificates of Approval from the Ministry of Environment (Ontario) to construct and operate a waste composting and material recycling facility at its site in Welland, Ontario. Construction has commenced and is expected to be completed in the third quarter of 2008.
www.bramptonbrick.com
ENDS