Our roundup of Canadian small-caps of between $100-million and $2.5-billion in market capitalization making news and on the move today.
Aritzia Inc. (ATZ-T) reported same-store sales growth of 7.9 per cent in the first quarter versus a year ago and its quarterly results surpassed analysts’ expectations.
Revenue increased by 17.8 per cent to $196.7-million from $167-million a year ago. Net income increased by 31.5 per cent to $16.2-million from $12.3-million last year. Adjusted net income increased to $18.5-million or 17 cents per share from $15.2-million or 13 cents last year.
Analysts were expecting revenue of $190.3-million and earnings of 15 cents per share.
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Strosberg Sasso Sutts LLP announced it has started a proposed class action against CannTrust Holdings Inc. (TRST-T) and “some of the company’s officers and directors” on behalf of company shareholders.
The suit is related to CannTrust's announcement that Health Canada found its greenhouse facility in Pelham, Ont. "to be non-compliant with certain regulations."
"The plaintiff alleges that the defendants made misrepresentations by issuing documents, public statements, and prospectuses, which represented that CannTrust was in material compliance with all laws, regulations, licenses and permits and failing to make timely disclosure of the unlicensed cultivation," according to a release from Strosberg Sasso Sutts issued after markets closed on Thursday. "Once this information was revealed to the public, the price of CannTrust securities dropped significantly, causing substantial damages to holders of CannTrust securities."
The plaintiff seeks $250-million in damages for "negligent misrepresentation and liability for primary market misrepresentation and secondary market disclosure pursuant to Ontario’s Securities Act."
Separately, CannTrust Holdings has halted sales of all cannabis products amid a Health Canada investigation into illegal growing activities that saw the company cultivate thousands of kilograms of marijuana in unlicensed rooms.
In a statement on Thursday evening, the company said that it has implemented a “voluntary hold on sale and shipment of all cannabis products” while Health Canada investigates its manufacturing facility. The announcement comes one day after Ontario and Alberta’s provincial wholesalers stopped selling CannTrust products.
CannTrust also said Thursday that it has established a special committee composed of "independent members of [the] board of directors. The purpose of the special committee is to investigate this matter in its entirety.”
CannTrust shares have plummeted nearly 40 per cent since Monday, when the company acknowledged that Health Canada issued a noncompliance order to CannTrust for growing cannabis in five unlicensed rooms in its 12-room greenhouse in Pelham, Ont., between October, 2018, and March.
CannTrust also acknowledged Monday that employees sent “inaccurate information” to federal regulators. On Wednesday, The Globe and Mail reported allegations from a former employee that CannTrust used fake walls in its unlicensed rooms to cover up illegally grown plants in staged photographs that were sent to Health Canada.
-Mark Rendell
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MTY Food Group Inc. (MTY-T) reported a same-store sales increase of 1.4 per cent in the second quarter versus a year earlier. Revenue increased 21.6 per cent from $107.4-million to $130.6-million, “mainly due to the increase in sales to retail channels and the acquisition of Casa Grecque.” The results were ahead of revenue expectations of $124.6-million.
Net income attributable to shareholders increased to $19.3-million or 76 cents per share compared to $16.2-million or 64 cents per share for the same period last year. The expectation was for earnings of 94 cents per share in the latest quarter.
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Lifestyle Delivery Systems Inc. (LDS-CN) announced that it and TransCanna Holdings Inc. (TCAN-CN) have “mutually agreed” to terminate the non-binding letter of intent (LOI) dated June 28 to combine the companies in an amalgamation transaction.
"After receipt from TransCanna of a request to modify the terms of the amalgamation, the company's management determined that the proposed transaction would not be in the best interests of its shareholders and, as a result, the LOI has been terminated by mutual agreement," according to a release. "Neither LDS nor TransCanna has requested or provided any proprietary information to the other party, nor have they conducted any due-diligence with respect to the transaction proposed in the LOI."
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Alaris Royalty Corp. (AD-T) announced that it has invested an additional $60.2-million in an existing partner, PF Growth Partners, LLC.
The PF follow-on investment includes a new $43.7-million preferred equity contribution as well as an investment of $16.5-million in exchange for a minority ownership of the common equity.
This transaction will also include an exchange of Alaris' existing preferred units valued at $27.8-million, the company stated.
"The result of the PF follow-on and unit exchange results in a total investment of $88-million in PFGP," the company stated.
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Hive Blockchain Technologies Ltd. (HIVE-X) announced that it has restarted cryptocurrency mining operations in Sweden “with power again running through the facility and is continuing to conduct mining operations in Iceland.”
It said the reboot of the Swedish facility comes as Ethereum pricing "continues to show strength, now trading at US$273 against its lows in January of $104, while electricity prices in Sweden have declined by 70 per cent since the beginning of the year."
The company stated that it will "continue to optimize its equipment during this transition period."
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