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ARCTIC GROUP ANNOUNCES 1999 YEAR-END RESULTS WINNIPEG, Manitoba - The Arctic Group Inc. (TSE: AGP), a leading North American producer and distributor of high-quality packaged ice, today reported results for the fiscal year ending December 31, 1999. Sales for 1999 totaled $74.3 million, a 64 per cent increase over the $45.1 million in sales achieved during the same 12-month period in 1998. Earnings before interest, taxes, amortization and non-recurring expenses (EBITDA) grew to $19.0 million, more than double the $8.6 million for the previous 12 months. EBITDA per share for 1999 was $0.53 per share (basic) compared to $0.41 per share (basic) in 1998. EBITDA performance as a percentage of revenue for 1999 (EBITDA margin) was 25.6 per cent, up from 19.2 per cent recorded in the previous 12 months.* Funds from operations (cash flow) totaled $8.5 million in 1999 compared to $4.9 million for the previous 12 months. This produced funds from operations per share in 1999 of $0.24 ($0.21 fully diluted) compared to $0.23 ($0.22 fully diluted) for the 12 months ended 1998. The Arctic Group reported a net loss for the year ended December 31, 1999, of $ (949,000) or $ (0.03) per share (basic, including goodwill charges) and $ (0.03) per share (fully diluted, including goodwill charges), compared to net earnings over the comparable period in 1998 of $183,000 or $0.01 per share (basic) and $0.01 per share (fully diluted). "1999 was a year of significant growth and change for The Arctic Group" said Arctic Group Chairman and CEO, Robert Nagy. "Although we incurred a modest net loss that reflected higher amortization and goodwill charges of $8.9 million and $1.7 million of one-time costs associated with rationalizing and improving operations, we exited 1999 a stronger, leaner company. During 1999, the company liquidated redundant facilities, rationalized labour and management staff ,and restructured the Company's long term financing. These activities resulted in the aforementioned one- time net losses on disposition, severance costs, withholding taxes and write off of financing charges. Our focus in 1999 was to create shareholder value by realizing the synergies made available by our continuing acquisition strategy. Rationalized production and distribution infrastructures combined with the implementation of our Arctic Glacier brand in Canada enabled us to increase EBITDA margin by 33%. We fully expect that our policy of selective acquisition together with the rollout of our brand across the United States will result in top line growth and further improvements in operating performance." The capital structure established in the 3rd Quarter of 1999 will provide The Arctic Group with the necessary resources to implement its acquisition strategy. The ongoing support of Bank of Nova Scotia, RoyNat Inc. and Citicorp North America Inc. leaves Arctic well positioned for future expansion. The Arctic Group is a leading North American producer, marketer
and distributor of purified, high-quality packaged ice products
to consumers in Canada and the U.S. under the 'Arctic Glacier' brand.
The company is dedicated to creating shareholder value through superior
profit growth, prudent management, and growing penetration of its
branded ice products in key target markets. *All 1998 figures shown are based on a 12-month pro-forma calculation since Arctic Group's year end was changed from April 30 to December 31. For further information, please contact: The Arctic Group Inc. |