Our roundup of Canadian small-caps of between $100-million and $2.5-billion in market capitalization making news and on the move today.
The Ontario Securities Commission and RCMP have opened a joint investigation into CannTrust Holdings Inc. (TRST-T; CTST-N), the company disclosed late Thursday.
OSC spokeswoman Kristen Rose confirmed that the OSC’s Joint Serious Offences Team, a partnership among the OSC, the RCMP’s Financial Crime program and the Ontario Provincial Police Anti-Rackets Branch, is conducting the investigation. She declined further comment.
The OSC contacted the legal counsel for the special committee of CannTrust’s board Thursday, and advised it “that an investigation has been opened into matters and parties related to CannTrust.” It offered no further comment on that matter.
CannTrust also announced that it will “likely miss” its Aug. 14 filing deadline for its second-quarter financial statements.
“Management is of the view that there is significant uncertainty with respect to the potential impact of pending Health Canada decisions on the valuation of the Company’s inventory and biological assets and revenue recognition.” That, CannTrust said, is because “Health Canada has broad discretion to exercise a wide range of regulatory powers.”
- David Milstead and Mark Rendell
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The Catalyst Capital Group Inc. commented on Friday on a letter sent late Thursday to the special committee of the board of Hudson’s Bay Co. (HBC-T) by Richard Baker, governor and executive chairman of HBC, and certain other insiders of the company.
"Catalyst notes that, since the disclosure of the Baker Group proposal, there has been broad public opposition by significant minority shareholders to the value proposed by the controlling insiders," it stated. "It is also widely recognized that the Baker Group only intends to use shareholder capital and assets to buy out the Company’s minority owners below fair value."
In its own letter released on Friday, the special committee stated the catalyst offer "is not a true alternative to the shareholder group proposal which, if acceptable terms are reached, will involve the acquisition by the company of 100 per cent of the common shares held by minority shareholders." It also said the Catalyst offer "does not provide shareholders with certain of the protections that such laws require be provided to shareholders in a formal take-over bid."
On Thursday, the "Baker Group" issued a letter outlining what it calls "significant risks" of Catalyst's 'coercive partial bid."
See also: HBC's chairman Richard Baker blasts Catalyst bid as 'coercive'
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TransAlta Corp. (TA-T; TAC-N) announced agreements with Capital Power Corp (CPX-T) to swap their respective non-operating interests in the Keephills 3 facility and the Genesee 3 facility. As a result of the transaction, TransAlta will own 100 per cent of the Keephills 3 facility and Capital Power will own 100 per cent of the Genesee 3 facility. “The purchase prices for each non-operating interest will be largely set-off against each other, resulting in a net payment of approximately $10-million being made from Capital Power to TransAlta, subject to working capital adjustments,” the company stated.
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The Second Cup Ltd. (SCU-T) said same-store sales were flat in the second quarter and its adjusted net loss was consistent at a penny per share, similar to last year. Total revenue came in at $6.5-million versus $6.4-million a year earlier. The company stated that its 'efforts to protect Second Cup brand standards resulted in more corporate cafés than originally planned, negatively impacting the quarter."
The company said it previously disclosed that it is pursuing strategic initiatives to enhance shareholder value. "With a healthy balance sheet and capital to invest, Second Cup is actively engaged in potential acquisitions of coffee and food brands that are strategically and culturally aligned with the Second Cup business," the company stated, adding that it "will more aggressively pursue new retail cannabis opportunities in future rounds of licensing in the Ontario region where the brand has its largest footprint."
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Supremex Inc. (SXP-T) said its revenue was up by 1.7 per cent to $47.6-million in the second quarter, from $46.8 million in the second quarter of 2018. Net Earnings of $1.8-million or 6 cents per share compared with net earnings of $3.1-million or 11 cents per share a year earlier. Adjusted net earnings reached $1.9-million or 7 cents per share compared with $3-million or 10 cents per share for the equivalent period in 2018.
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Kinaxis Inc (KXS-T) reported that its second-quarter revenue increased 9 per cent to US$42.4-million which was ahead of expectations of US$43.6-million. Adjusted EBITDA was up 5 per cent to US$11.6 million. Profit came in at US$4-million, which was better than expectations of US$3.3-million and compared to US$4.3-million a year earlier.
"Our second-quarter results further support our strong growth outlook for the year. We secured major new customer wins in every theatre this quarter, which are reflected in our record-breaking backlog. These contracts reinforce our confidence in 2019 guidance, drive increased revenue in [third quarter] and [fourth quarter], and support our accelerated investments in salesforce expansion," said John Sicard, Kinaxis CEO.
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Aphria Inc. (APHA-T; APHA-N)became the first major Canadian cannabis company to report a net profit, sending its U.S. shares up more than 30 per cent in pre-market trading Friday.
The company reported net income in its fourth quarter ended May 31 came in at $15.8-million versus a loss of $5-million a year earlier. Adjusted EBITDA was $209,000 versus a loss of $1.2-million a year earlier.
Net revenue of $128.6-million was an increase from $12-million a year earlier. Analysts were expecting revenue of $99.3-million and a loss of $16.4-million.
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Western Forest Products Inc. (WEF-T) reported adjusted EBITDA of $15.1-million in the second quarter compared to adjusted EBITDA of $50.2-million in the second quarter of 2018. Its net loss of $700,000 or nil per share compared to net income of $27.1-million or 7 cents per share for the second quarter of 2018. Revenue was $310.3-million down from $327.8-million a year earlier. “Results were impacted by challenging markets which led to production curtailments, and higher British Columbia coastal operating costs,” the company stated.
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Eldorado Gold Corp. (ELD-T) reported revenue of $173.7-million in the second quarter, up from $153.2-million a year earlier and ahead of expectations of $162.6-million. Net earnings totaled $12.2-million or 8 cents per share versus a loss of $24.4-million or 15 cents a year earlier. Its adjusted net loss was $1.2-million or a penny per share versus a loss of $1.8-million or a penny per share a year earlier.
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Rogers Sugar Inc.’s (RSI-T) reported revenue of $191.4-million for its third quarter ended June 29 versus $199-million a year earlier. Analysts were expecting revenue to come in at $200.8-million in the latest quarter. Adjusted EBITDA was $18.7-million down from $20.3-million a year earlier, the company said.
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North American Palladium Ltd. (PDL-T) reported second-quarter revenue of $135.6-million. which it said is the highest quarterly revenue in the company’s history, and compared to $94.1-million for the same period in 2018. Net income was $36.6-million, or 62 cents per share, compared to $14.2-million or 24 cents per share a year earlier. Analysts were expecting revenue of $118.3-million and earnings of 62 cents.
The company’s board also announced a special dividend of 35 cents per share to be issued to all common shareholders of record as of Sept. 1.
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Horizon North Logistics Inc. (HNL-T) reported second-quarter revenue of $104.6-million up from $93.6-million a year ago. Its net loss came in at $10.6-million or 6 cents per share compared with a loss of $3.4-million or 2 cents a year ago. Analysts were expecting revenue of $113.5-million and a loss of 2 cents per share.
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Slate Office REIT (SOT.UN-T) reported rental revenue of $54.5-million up from $52.1-million a year earlier and ahead of expectations of $52.2-million. Net income was $9.5-million down from $23.6-million a year earlier. Funds from operations came in at $13.1-million or 18 cents per unit which was in line with expectations and compared to $75.1-million or 20 cents a year earlier.