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GST Golden Sunset Trail Inc. (Tier2)

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Share Name Share Symbol Market Type
Golden Sunset Trail Inc. (Tier2) TSXV:GST TSX Venture Common Stock
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  0.00 0.00% 0 -

Brampton Brick Reports Results for the Second Quarter Ended June 30, 2010

09/08/2010 9:44pm

Marketwired Canada


(All amounts are stated in thousands of Canadian dollars, except per share amounts.)

Brampton Brick Limited (TSX:BBL.A) today reported net income of $370, or $0.03
per share for the second quarter ended June 30, 2010, compared to a loss of
$3,245, or $0.30 per share, for the second quarter of 2009. The aggregate
weighted average number of Class A Subordinate Voting Shares ("Class A shares")
and Class B Multiple Voting Shares ("Class B shares") outstanding was 10,937,000
in both periods.


For the six month period ended June 30, 2010, the Company incurred a loss of
$3,256, or $0.30 per share, compared to a loss of $9,501, or $0.87 per share,
for the corresponding period in 2009. The aggregate weighted average number of
Class A Subordinate Voting Shares ("Class A shares") and Class B Multiple Voting
Shares ("Class B shares") outstanding was also 10,937,000 in both periods.


RESULTS OF OPERATIONS

Three months ended June 30

Net sales for the quarter were $24,351 compared to $18,278 for the same period
in 2009. The net increase of $6,073 was primarily the result of significantly
higher shipments in the Masonry Products business segment. Net sales of the
Landscape Products business segment also increased over the second quarter of
2009.


Production volumes in both the Masonry Products and Landscape Products business
segments were also substantially higher in 2010 which resulted in a significant
reduction in per unit manufacturing costs. The combination of the increase in
net sales and the reduction in per unit manufacturing costs led to a substantial
improvement in profit margins.


Operating income for the quarter, before interest and other items, was $2,657,
representing an improvement of $3,530 over the operating loss of $873 reported
in the second quarter of 2009.


Interest on long-term debt increased by $504 to $991 due to higher term debt
outstanding during the second quarter of 2010 compared to the same period in
2009 and higher interest rates. Other interest expense increased due to lower
interest income earned on the promissory note receivable and the interest
differential payment on the interest rate swap contract which is now reflected
in this line item.


The Company recorded a foreign currency exchange loss of $33 for the second
quarter ended June 30, 2010. In 2009, a strengthening Canadian dollar and higher
net monetary liabilities denominated in a foreign currency produced a gain of
$192.


The loss in the second quarter of 2009 included the following unusual charges:



1.  A provision of $2,140 to record the unrealized loss on the interest rate
    swap contract. 
2.  A loss of $269 on the sale of a portion of the promissory note
    receivable. 
3.  A loss of $190 on the sale of the remaining surplus properties held for
    sale. 



After recording a recovery of income taxes in the estimated amount of $845 in
respect of these items, the impact on the loss for the second quarter of 2009
was $1,754, or $0.16 per share.


In June 2009, the Company entered into a new $30,000 fixed-rate, term financing
agreement with a new lender and repaid its $20,000 term bank loan. The Company
holds an interest rate swap contract which was previously designated as an
effective cash flow hedge against the term bank loan. The repayment of this term
bank loan resulted in the swap contract no longer being an effective cash flow
hedge. Consequently, the Company recorded a charge of $2,140 to reflect the
unrealized loss as at June 30, 2009 on the interest rate swap contract. The
change in the fair value of the Company's $20,000 interest rate swap contract in
the second quarter in 2010 resulted in an unrealized loss of $145.


In April 2009, the Company sold an undivided, co-ownership interest,
representing approximately 59.9%, in the proceeds of the promissory note
receivable, including future interest payments, for cash proceeds of $3,793
resulting in a loss of $269.


In June 2009, properties held for sale were sold for cash proceeds of $1,200,
resulting in a loss of $190.


The provision for income taxes for the second quarter of 2010 reflected an
effective income tax rate of approximately 68.4%. In 2009 the recovery of income
taxes reflected an effective rate of 16.2%. Valuation allowances have been
recorded in both 2010 and 2009 against the future income tax benefit that would
otherwise have been recorded with respect to the non-capital losses incurred by
the Company's U.S. operations and by Universal. These valuation allowances have
caused the effective income tax rates to be significantly different from the
normalized rates of approximately 29.0% in 2010 and 31.0% in 2009.


Six months ended June 30

Net sales for the six month period were $37,176, an increase of $11,441 over the
same period in 2009. Significantly higher sales in the Masonry Products business
segment plus an increase in net sales in the Landscape Products business
accounted for the improvement over 2009.


As discussed under Results of Operations for the three month period,
year-to-date operating results were positively impacted by substantially higher
production volumes in both the Masonry Products and Landscape Products business
segments.


For the six month period ended June 30, 2010, the Company incurred an operating
loss, before interest and other items, of $617 compared to $8,124 for the same
period in 2009.


Variances in the remaining Consolidated Statements of Operations items,
including interest expenses, foreign currency exchange gain (loss) and the
provision for, or recovery of, income taxes reflect substantially the same
factors as outlined above for the three month period.


The three unusual charges which impacted results in the second quarter of 2009,
as described above, similarly impacted the year-to-date results in 2009.


More detailed discussion with respect to each operating business segment follows:

MASONRY PRODUCTS

The Masonry Products business segment reported operating income of $2,078 for
the second quarter of 2010 compared to an operating loss of $594 for the same
period in 2009. For the six month period, operating income was $1,868 in 2010
compared to an operating loss of $4,733 in 2009.


A substantial increase in residential construction activity in the Canadian
market has resulted in significantly higher shipments of all masonry products,
including both clay brick and concrete masonry products. Shipments from the
Company's U.S. plant in Indiana, which came on stream in the second quarter of
2009, also increased over last year.


As a result, net sales of this business segment increased by $5,450, or 55.2%,
to $15,308 in the second quarter of 2010 and by $11,200, or 72.1%, to $26,741
for the six month period.


Higher production volumes, to meet the increase in demand, have also contributed
to the improvement in profit margins through the reduction in per unit
manufacturing costs.


LANDSCAPE PRODUCTS

The Landscape Products business segment reported operating income of $1,202 on
net sales of $8,509 for the quarter ended June 30, 2010 compared to operating
income of $326 on net sales of $7,715 in 2009.


For the six month period to June 30, 2010, net sales increased over 2009 by $692
to $9,220 and the operating loss of $1,259 was $1,230 lower than last year.


Higher sales volumes in the Canadian market and the positive impact of higher
production volumes in both Canada and the U.S. were the primary drivers
contributing to the improvement in operating results.


OTHER OPERATIONS

Other operations include the Company's 50% joint venture interest in Universal.
This investment is accounted for using the proportionate consolidation method.


Composting operations have been operating at reduced capacity throughout the
second quarter and most of 2010 in order to address various operational and
processing issues. Management of Universal anticipates that it will be in a
position to resume normal operations near the end of the third quarter of 2010.


CASH FLOWS

Cash flow provided by operating activities of continuing operations totaled
$4,978 for the second quarter ended June 30, 2010 compared to cash used in
operations of $592 for the same period last year. For the six month period, cash
used for operating activities was $570 compared to $7,250 in 2009.


The $5,570 improvement in cash flow from operations for the quarter and the
$6,680 improvement for the year-to-date were attributable to the improvement in
operating results and the net change in non-cash working capital items.


Cash utilized for purchases of property, plant and equipment totaled $845 for
the quarter compared to $2,158 in 2009, including $1,439 incurred in connection
with the construction of the Indiana clay brick plant. For the six month period
in 2010, purchases of property, plant and equipment totaled $1,485, compared to
$6,616 in 2009, including $4,897 related to the construction of the Indiana clay
brick plant.


On February 26, 2010, the Company completed a $9,000 subordinated secured
debenture financing. In connection therewith, the $3,000 unsecured promissory
note payable, which was due but not paid on December 7, 2009, was refinanced.
The subordinated debenture was recorded for accounting purposes at its fair
value which, net of transaction costs incurred in the amount of $377, amounted
to $8,623 and is being carried at amortized cost. The transaction costs are
being amortized over the term of the loan resulting in an effective interest
rate of 11.89%. As at June 30, 2010 the unamortized transaction costs were $334.


In June 2009, the Company completed a new $30,000 term financing arrangement,
secured primarily by real estate and production equipment of the Company's
Masonry Products and Landscape Products business segments in both Canada and the
U.S. Proceeds of the new financing were utilized to repay a $20,000 term bank
loan with the balance utilized to reduce bank operating advances.


The sale in April 2009 of an undivided, co-ownership interest, representing
approximately 59.9%, in the promissory note receivable, including future
interest payments, generated cash proceeds of $3,793.


The sale in June 2009 of the remaining properties held for sale generated cash
proceeds of $1,200.


FINANCIAL CONDITION

The nature of the Company's products and primary markets dictates that its
Masonry Products and Landscape Products business segments are seasonal. The
Landscape Products business is affected to a greater degree than the Masonry
Products business. As a result of this seasonality, operating results are
impacted accordingly and cash requirements are generally expected to increase
through the first half of the year and decline through the second half of the
year.


As noted above, the Company completed a $9,000 subordinated secured debenture
financing on February 26, 2010. The new financing has enhanced the Company's
overall financial position by providing additional balance sheet strength and
cash availability.


The ratio of total liabilities to shareholders' equity was 0.64:1 at June 30,
2010 compared to 0.54:1 at December 31, 2009. The increase in this ratio from
December 31, 2009 was primarily due to the increase in long-term debt resulting
from the issuance of the subordinated debenture, as noted above, and lower
retained earnings resulting from the loss incurred for the six months ended June
30, 2010.


As at June 30, 2010, working capital was $21,482, representing a working capital
ratio of 2.02:1. Comparable figures for working capital and the working capital
ratio at December 31, 2009 were $13,272 and 1.71:1, respectively. Cash and cash
equivalents totaled $8,033 at June 30, 2010 compared to $2,868 at December 31,
2009.


Excluding Universal, the Company has an operating credit facility of $12,000.
This is a demand facility which is secured primarily by accounts receivable and
inventories of the Company's Masonry Products and Landscape Products business
segments in both Canada and the U.S. The actual amount that the Company may
borrow under this facility is determined based on standard margin formulas for
accounts receivable and inventories. The borrowing limit is reduced by the
amount of the mark-to- market exposure on the interest rate swap contract.
Utilization at June 30, 2010 was $3,223, including $343 for outstanding letters
of credit and $1,720 for the mark-to-market exposure on the interest rate swap.


During the second quarter, the Company cancelled a $700 credit facility of a
subsidiary company as it was no longer deemed to be required.


The Company expects that future cash flows from operations, cash and cash
equivalents on hand and the unutilized balance of its operating credit facility
will be sufficient to satisfy its obligations as they become due.


The Company was in compliance with all financial covenants under its long-term
debt agreement as at June 30, 2010 and anticipates that it will maintain
compliance throughout the coming year.


Universal's credit agreement provides for a non-revolving term loan facility
which has been fully drawn. Principal repayments commenced in January 2010. The
Company's proportionate share of the principal balance outstanding at June 30,
2010 was $7,058.


Borrowings under Universal's demand operating facility are available by way of a
combination of overdrafts and letters of credit. As at June 30, 2010, the
Company's proportionate share was $562, all of which was represented by the
issuance of letters of credit.


Universal expects that future cash flows from operations, the unutilized balance
of its operating credit facility and, to the extent required, further advances
from the joint venture partners, will be sufficient to satisfy its obligations
as they become due.


Universal was in compliance with the financial covenants under its credit
agreement as at June 30, 2010 and anticipates that it will maintain compliance
throughout the coming year.


OTHER

The Company's Masonry Products and Landscape Products business segments are
cyclical. Demand for masonry products fluctuates in accordance with the level of
new residential and commercial construction activity. Demand for landscape
products fluctuates in accordance with the level of industrial, commercial and
institutional construction activity and consumer spending.


On the strength of significantly higher new home sales which began in the second
half of 2009, housing starts in the Company's Canadian markets increased
substantially in the first half of 2010 over the same period in 2009. Sales of
masonry products have increased accordingly. New home sales in the first half of
2010 were considerably greater than the first half of 2009.


In the Company's U.S. markets, sales of masonry products have continued to grow
since the commencement of commercial operations of the new Indiana clay brick
plant in the second quarter of 2009. However, housing starts in the U.S. remain
at extremely low levels and significant sales growth may not be achieved until
market conditions improve.


With respect to landscape products, sales in Canada in the first half of 2010
have benefitted from the improvement in general economic conditions. Sales in
the Michigan based U.S. landscape business continue to be impacted by the severe
contraction of the automotive industry and market conditions are expected to
remain difficult.


As noted earlier, management of Universal anticipates that it will be in a
position to resume normal operations near the end of the third quarter.


Effective July 1, 2010 the Ontario provincial government harmonized its retail
sales tax system with the Federal goods and services tax ("GST"). The tax base
and basic operational rules of the new harmonized sales tax ("HST") are
substantially the same as the GST.


The vast majority of goods purchased by the Company are used directly in the
manufacture of goods for sale. As such, these purchases were previously exempt
from provincial sales tax. Under the new HST, the Company is required to pay
provincial sales tax with respect to these purchases, but is also eligible to
claim an input tax credit for the taxes paid.


Similarly, most services provided to the Company by third parties (e.g. audit
and legal fees, consulting services) were previously exempt from provincial
sales tax. After July 1, these services are subject to the HST, but are also
eligible for an input tax credit.


Consequently, the impact of the HST on the Company should be tax neutral for
goods purchased for use in the manufacturing process or for services provided by
third parties.


Purchases of goods which are not used directly in the production of goods for
sale, and upon which the Company previously paid provincial sales tax, are now
eligible for an input tax credit. Previously there was no credit for the
provincial sales taxes paid with respect to these purchases. However, as the
Company has annual taxable sales in excess of $10,000, the provincial portion of
the HST is not recoverable, for the first five years, for certain costs,
including energy (except when used to produce goods for sale), telecommunication
services, automobiles (including fuel, parts and services) and food, beverages
and entertainment expenses. During the subsequent three year period, full input
tax credits are to be phased in for these items.


Overall, the net effect of the provincial portion of the new HST is not expected
to have a significant impact on the Company's operating results.


The imposition of the provincial portion of HST on goods sold by the Company,
and the expected pass-through to the ultimate consumer of those goods, may have
resulted in some work (e.g. new home construction, landscaping projects) being
moved forward into the first half of the year, to the extent possible, to avoid
the potential additional tax after July 1. While it is not possible to
accurately determine the magnitude of such a shift in timing, the Company does
not believe that it will have a material impact on aggregate sales volumes for
the year.


Certain statements contained herein constitute "forward-looking statements".
Such forward-looking statements involve known and unknown risks, uncertainties
and other factors, including, but not limited to, those identified under "Risks
and Uncertainties" in the Company's 2009 Annual Report, which may cause actual
results, performance or achievements of the Company to be materially different
from any future result, performance or achievements expressed or implied by such
forward- looking statements.


Brampton Brick is Canada's second largest manufacturer of clay brick, serving
markets in Ontario, Quebec and the Northeast and Midwestern United States from
its brick manufacturing plants located in Brampton, Ontario and near Terre
Haute, Indiana. To complement the clay brick product line, the Company also
manufactures a range of concrete masonry products, including stone veneer
products marketed under the Stoneworks(TM) trade name and concrete window sills.
Concrete interlocking paving stones, retaining walls, garden walls and enviro
products are manufactured in Markham, Milton and Brampton, Ontario and Wixom,
Michigan. These products are sold to markets in Ontario, Quebec, Michigan, New
York, Pennsylvania, Ohio, Kentucky, Illinois and Indiana under the Oaks(TM)
trade name. Products are used for residential construction and for industrial,
commercial, and institutional building projects. The Company also holds a 50%
joint-venture interest in Universal Resource Recovery Inc., which operates a
waste composting facility in Welland, Ontario.




                       Selected Financial Information                       
                                                                            
(unaudited) (in thousands of dollars)                                       
----------------------------------------------------------------------------
                                                      June 30   December 31 
CONSOLIDATED BALANCE SHEETS                              2010          2009 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
ASSETS                                                                      
Current assets                                                              
 Cash and cash equivalents                        $     8,033   $     2,868 
 Accounts receivable                                   11,646         6,678 
 Inventories                                           18,602        17,809 
 Income taxes recoverable                               1,648         1,730 
 Future income taxes                                      432           896 
 Other current assets                                     874           737 
 Promissory note receivable, current                    1,368         1,335 
                                                 ------------- -------------
                                                       42,603        32,053 
Property, plant and equipment, at cost                252,813       251,138 
Less: Accumulated amortization                       (102,282)      (97,158)
                                                 ------------- -------------
                                                      150,531       153,980 
Other assets                                                                
 Future income taxes                                        -            21 
                                                 ------------- -------------
                                                  $   193,134   $   186,054 
                                                 ------------- -------------
                                                 ------------- -------------
LIABILITIES                                                                 
Current liabilities                                                         
 Bank operating advances                          $     1,160   $       750 
 Accounts payable and accrued liabilities              14,447        10,866 
 Income taxes payable                                     891         1,572 
 Long-term debt, current portion                        3,617         4,626 
 Derivative financial instrument, current                 734           867 
 Asset retirement obligation                              272           100 
                                                 ------------- -------------
                                                       21,121        18,781 
Long-term debt, less current portion                   45,417        37,583 
Derivative financial instrument, non-current              986           917 
Future income taxes                                     6,628         6,701 
Asset retirement obligation                               845           827 
                                                 ------------- -------------
                                                       74,997        64,809 
Non-controlling interests                               1,478         1,446 
SHAREHOLDERS' EQUITY                                                        
 Capital stock                                         33,689        33,689 
 Contributed surplus                                    1,475         1,359 
 Retained earnings                                     85,324        88,580 
 Accumulated other comprehensive loss                  (3,829)       (3,829)
                                                 ------------- -------------
                                                      116,659       119,799 
                                                 ------------- -------------
                                                  $   193,134   $   186,054 
                                                 ------------- -------------
                                                 ------------- -------------
                                                                            
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                       Selected Financial Information                       
                                                                            
(unaudited) (in thousands of dollars, except per share amounts)             
                                                                            
----------------------------------------------------------------------------
                                   Three months ended      Six months ended 
                                              June 30               June 30 
CONSOLIDATED STATEMENTS OF                                                  
 OPERATIONS                           2010       2009       2010       2009 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
Net sales                         $ 24,351   $ 18,278   $ 37,176   $ 25,735 
                                                                            
Cost of goods sold                  16,182     13,251     26,756     22,832 
Selling, general and                                                        
 administrative expenses             2,921      2,856      5,890      5,565 
Amortization                         2,591      3,044      5,147      5,462 
                                 ---------- ---------- ---------- ----------
                                    21,694     19,151     37,793     33,859 
                                                                            
Operating income (loss) before                                              
 the undernoted items                2,657       (873)      (617)    (8,124)
                                                                            
Other (expense) income                                                      
  Interest on long-term debt          (991)      (487)    (1,866)      (958)
  Other interest expense (net)        (268)       (83)      (474)       (61)
  Foreign currency exchange                                                 
   (loss) gain                         (33)       192         69        291 
  Other income (expense)                 5        (81)        30        (48)
                                 ---------- ---------- ---------- ----------
                                    (1,287)      (459)    (2,241)      (776)
                                 ---------- ---------- ---------- ----------
                                                                            
Income (loss) before the                                                    
 following items                     1,370     (1,332)    (2,858)    (8,900)
                                                                            
(Loss) gain on derivative                                                   
 financial instrument                 (145)    (2,140)        64     (2,140)
Loss on sale of promissory note          -       (269)         -       (269)
Loss on sale of property held for                                           
 sale                                    -       (190)         -       (190)
                                 ---------- ---------- ---------- ----------
                                                                            
Income (loss) before income taxes                                           
 and non-controlling interests       1,225     (3,931)    (2,794)   (11,499)
                                                                            
(Provision for) recovery of                                                 
 income taxes                                                               
  Current                             (876)      (152)      (478)     1,086 
  Future                                38        788         48        875 
                                 ---------- ---------- ---------- ----------
                                      (838)       636       (430)     1,961 
                                 ---------- ---------- ---------- ----------
                                                                            
Income (loss) before non-                                                   
 controlling interests                 387     (3,295)    (3,224)    (9,538)
Non-controlling interests              (17)        50        (32)        37 
                                 ---------- ---------- ---------- ----------
                                                                            
Net income (loss) for the period  $    370   $ (3,245)  $ (3,256)  $ (9,501)
                                 ---------- ---------- ---------- ----------
                                 ---------- ---------- ---------- ----------
                                                                            
Net income (loss) per Class A and                                           
 Class B share                    $   0.03   $  (0.30)  $  (0.30)  $  (0.87)
                                 ---------- ---------- ---------- ----------
                                 ---------- ---------- ---------- ----------
Weighted average Class A and                                                
 Class B shares outstanding                                                 
 (000's)                            10,937     10,937     10,937     10,937 
                                                                            
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                       Selected Financial Information                       
                                                                            
(unaudited) (in thousands of dollars)                                       
                                                                            
----------------------------------------------------------------------------
                                   Three months ended      Six months ended 
                                              June 30               June 30 
CONSOLIDATED STATEMENTS OF CASH                                             
 FLOWS                                2010       2009       2010       2009 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Cash provided by (used for)                                                 
 activities of continuing                                                   
 operations                                                                 
Operating activities                                                        
 Net income (loss) from                                                     
  continuing operations for the                                             
  period                          $    370   $ (3,245)  $ (3,256)  $ (9,501)
 Items not affecting cash and                                               
  cash equivalents                                                          
  Amortization and accretion         2,597      3,056      5,162      5,485 
  Future income taxes                  (38)      (788)       (48)      (875)
  Non-controlling interests             17        (50)        32        (37)
  Unrealized foreign currency                                               
   exchange gain                       (13)      (181)       (70)      (296)
  Loss (gain) on derivative                                                 
   financial instruments               145      2,140        (64)     2,140 
  Loss on sale of promissory note        -        269          -        269 
  Loss on sale of property held                                             
   for sale                              -        190          -        190 
  Loss on disposal of property,                                             
   plant and equipment                   7          2          7          2 
  Other                                 94         61        202        108 
                                 ---------- ---------- ---------- ----------
                                     3,179      1,454      1,965     (2,515)
 Changes in non-cash operating                                              
  items                                                                     
  Accounts receivable               (1,940)    (4,761)    (5,029)    (4,547)
  Inventories                         (151)     1,611       (793)     2,168 
  Accounts payable and accrued                                              
   liabilities                       3,045      1,725      3,623       (103)
  Income taxes payable (net)           887       (940)      (141)    (2,267)
  Other                                  5        513       (147)       208 
                                 ---------- ---------- ---------- ----------
                                     1,846     (1,852)    (2,487)    (4,541)
 Payments of asset retirement                                               
  obligation                           (47)      (194)       (48)      (194)
                                 ---------- ---------- ---------- ----------
Cash provided by (used for)                                                 
 operating activities of                                                    
 continuing operations               4,978       (592)      (570)    (7,250)
Investing activities                                                        
 Purchase of property, plant and                                            
  equipment                           (845)    (2,158)    (1,485)    (6,616)
 Proceeds from sale of promissory                                           
  note                                   -      3,793          -      3,793 
 Proceeds from sale of property                                             
  held for sale                          -      1,200          -      1,200 
 Proceeds from disposal of                                                  
  property, plant and equipment          1          3          1          3 
                                 ---------- ---------- ---------- ----------
Cash provided by (used for)                                                 
 investment activities of                                                   
 continuing operations                (844)     2,838     (1,484)    (1,620)
Financing activities                                                        
 Increase (decrease) in bank                                                
  operating advances                (4,360)    (9,546)       410     (1,851)
 Issuance of subordinated                                                   
  debentures                            18          -      7,523          - 
 Increase in term loans                  -     29,389          -     32,389 
 Repayment of term loans              (239)   (20,262)      (564)   (20,264)
 Payments on obligations under                                              
  capital leases                       (76)      (102)      (156)      (200)
                                 ---------- ---------- ---------- ----------
Cash provided by (used for)                                                 
 financing activities of                                                    
 continuing operations              (4,657)      (521)     7,213     10,074 
Net cash used for discontinued                                              
 operations                              -          -          -        (62)
Foreign exchange on cash held in                                            
 foreign currency                       16        127          6        258 
                                 ---------- ---------- ---------- ----------
Increase (decrease) in cash and                                             
 cash equivalents                     (507)     1,852      5,165      1,400 
Cash and cash equivalents at the                                            
 beginning of the period             8,540      1,636      2,868      2,088 
                                 ---------- ---------- ---------- ----------
Cash and cash equivalents at the                                            
 end of the period                $  8,033   $  3,488   $  8,033   $  3,488 
                                 ---------- ---------- ---------- ----------
                                 ---------- ---------- ---------- ----------
                                                                            
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                       Selected Financial Information                       
                                                                            
(unaudited) (in thousands of dollars)                                       
                                                                            
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                   Three months ended      Six months ended 
CONSOLIDATED STATEMENTS                       June 30               June 30 
OF RETAINED EARNINGS                   2010      2009       2010       2009 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
Balance at the beginning of the                                             
 period                            $ 84,954  $ 94,222   $ 88,580   $100,478 
 Net income (loss) for the period       370    (3,245)    (3,256)    (9,501)
                                  --------- ---------- ---------- ----------
                                                                            
Balance at the end of the period   $ 85,324  $ 90,977   $ 85,324   $ 90,977 
                                  --------- ---------- ---------- ----------
                                  --------- ---------- ---------- ----------
                                                                            
----------------------------------------------------------------------------
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(unaudited) (in thousands of dollars)                                       
----------------------------------------------------------------------------
                                   Three months ended      Six months ended 
CONSOLIDATED STATEMENTS                       June 30               June 30 
OF COMPREHENSIVE income (LOSS)         2010      2009       2010       2009 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
Net income (loss) for the period   $    370  $ (3,245)  $ (3,256)  $ (9,501)
Other comprehensive income                                                  
 Gain on cash flow hedge, net of                                            
  taxes                                   -       646          -        702 
 Cumulative losses on derivatives                                           
  designated as cash flow hedges                                            
  at June 29, 2009 transferred to                                           
  net income, net of taxes                -     1,562          -      1,562 
                                  --------- ---------- ---------- ----------
                                                                            
Comprehensive income (loss) for                                             
 the period                        $    370  $ (1,037)  $ (3,256)  $ (7,237)
                                  --------- ---------- ---------- ----------
                                  --------- ---------- ---------- ----------
                                                                            
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