Our roundup of Canadian small-caps of between $100-million and $2.5-billion in market capitalization making news and on the move today.
Laurentian Bank of Canada (LB-T) says it has “successfully resolved” issues related to mortgage loans purchased by a third-party purchaser and has agreed with the Canada Mortgage and Housing Corporation (CMHC) “on a clear action plan towards resolution on the CMHC securitization program.”
“We have made important headway in addressing this situation, which has no impact on our clients, and are confident that it will be completely resolved by the end of the fiscal year,” CEO François Desjardins said in a release. “This has been a learning experience and since November 2017, we have been implementing enhanced quality control and origination processes throughout the Bank. We firmly believe that this significantly strengthens our mortgage origination and securitization activities.”
As part of an agreement with the third party, the bank says it will repurchase an additional $115-million of branch originated ineligible mortgages during the third quarter, which it said is slightly lower than its initial assessment.
The bank also says it will do a “complete a review” of all “B2B Bank and branch-originated mortgage loans portfolio insured by CMHC but not sold to, as well as portfolio insured mortgage loans sold to the CMHC securitization program.” It said an independent third party will verify the review process and results.
“Based on the results of CMHC’s normal course audit the bank estimates the total amount of such mortgage loans to be repurchased at between $125- and $150-million,” it stated.
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Indigo Books & Music Inc. (IDG-T) reported fourth-quarter revenue of $215.3-million, up $5.8-million from the same quarter last year. The company said total comparable sales, including both online sales and comparable store sales, increased by 6.2 per cent in the fourth quarter.
Its net loss for the quarter was $10.8-million or 40 cents per share compared to a net loss of $8.9-million or 33 cents last year. “The improvement in revenue was offset by higher operating costs driven by the Ontario minimum wage increase and higher fixed costs due to expansion of the company’s distribution centres in Ontario and Alberta,” the company said.
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Ero Copper Corp. (ERO-T) says there has been “no material impact” on the company or its copper production from a truck drivers’ strike in Brazil. “The company has contingency plans in place to mitigate impacts the strike might have on copper production,” it stated.
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Iron Bridge Resources Inc. (IBR-X) confirmed after markets closed on Tuesday that Velvet Energy Ltd. has started its unsolicited offer to buy the company’s outstanding shares for 75 cents each, in cash.
The company said it will “carefully review and consider the offer,” and urged shareholders to not take any action or make any decision until the board “has had an opportunity to fully review the Velvet offer and to make a recommendation as to its merits.”
Iron Bridge said the bid is equal to a proposal received from Velvet Energy on May 13, “which Iron Bridge previously stated does not reflect the value inherent in the company, and it is below the current market share price of Iron Bridge.”
The stock closed at 77 cents on Tuesday, after hitting a 52-week high of 82 cents earlier in the day, according to the TSX website.
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Madalena Energy Inc. (MVN-X) reported oil and gas revenue of $9.6-million in the first quarter versus $10.3-million a year earlier. Its net loss was $622,000 or nil per share versus a loss of $3.3-million or a penny a year earlier.
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Liberty Health Sciences Inc. (LHS-CN) says it has signed a licensing agreement with Isodiol International Inc. to provide a complementary suite of medical cannabis products to patients in Florida and Massachusetts. “Liberty is proud to team up with Isodiol, a company renowned for its ability to process and extract high purity CBD on an industrial scale,” said George Scorsis, CEO of Liberty.
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Leucrotta Exploration Inc. (LXE-X) reported oil and natural gas sales of $10.4-million in the first quarter up from $4.8-million a year earlier. Net earnings were $2.5-million or a penny per share versus a loss of $878,000 or a penny per share a year ago. Analysts were expecting revenue of $9.4-million and earnings of a penny per share in the latest quarter.
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Rocky Mountain Dealerships Inc. (RME-T), which sells, leases and provides product and warranty support for agriculture and industrial equipment in Western Canada, says it launched a five-year growth plan to increase revenue and earnings.
“We have spent the last five years protecting and strengthening our foundations while our industry contracted, and the last three years integrating the 19 acquisitions that drove our revenues to the billion-dollar level,” said CEO Garrett Ganden in a statement. “Now that the industry has normalized, and after integrating our previous acquisitions, we are now ready to turn our attention to accretive growth armed with a sound integration framework. But our growth will not just be driven through acquisitions; the strong market of the Canadian Prairies is expected to add $200-million organically through our current geographic footprint and assets.”
The company said it expects to grow revenues from $959-million in 2017 to at least $1.5-billion in 2023 through a combination of revenue sources.
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VersaBank (VB-T) reported net income of $4.3-million or 18 cents per share for the second quarter ended April 30, up from $2.1-million or 7 cents a year earlier. Revenue was $12.5-million up from $10.1-million a year earlier. The expectation was for revenue of $12.4-million and earnings of 16 cents in the latest quarter.
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iAnthus Capital Holdings, Inc. (IAN-CN) reported revenue of $3.2-million in the first quarter compared to $300,000 for the same quarter last year. It said the revenue included inaugural cannabis revenues totaling $200,000 as it transitions to an owner and operator of licensed assets in the cannabis sector and $2.6 million in fair value adjustment on biological assets.
The net loss was $600,000 or a penny per share compared to a loss of $1.9-million or 7 cents a year ago. “The decrease in the net loss for Q1 2018 compared to the prior period is primarily due to increases in deal-related expenses including legal, professional and transaction fees relating to the acquisitions in Florida and New York, which were offset by a significant non-cash fair value adjustment on the derivatives attached to the debentures that were issued in January 2018,” the company stated.
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Maverix Metals Inc. (MMX-X) reported revenue of $6.8-million in the first quarter up from $3.8-million a year earlier. Net income was $1.2-million or a penny per share versus net income of $626,000 or zero cents per share a year ago. Analysts were expecting revenue of $7.8-million and earnings of a penny per share.
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Maricann Group Inc. (MARI-CN) reported revenue of $600,591 in the first quarter, down from $1.1-million a year ago. “The decline in revenue can be explained by the timing of a large bulk transaction that subsequently closed in the current quarter,” the company said.
Its net loss was $11.4-million or 11 cents per share versus a loss of $66.9-million or $1.53 a year earlier. “The decrease in net loss is mainly a result of a non-cash fair value loss on convertible debt and warrants related to share issuance of $60,290,740, go public listing expenses incurred of $514,386 during the period ended March 31, 2017 and offset by a general and administrative expenses increase of $4,964,375,” the company stated in its Sedar filings.
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Chemtrade Logistics Income Fund (CHE.UN-T) says a prolonged interruption of rail service resulting from the work stoppage at Canadian Pacific Railway Ltd. (CP-T) “could have a material impact on the operating results.”
CEO Mark Davis said in a release that the company’s operations “are heavily dependent on rail service, and a number of our locations across Canada are served by CP Rail. Where possible, we have plans in place to continue to deliver product to our customers. However, alternative supply arrangements are not just costly but are also generally not feasible. If the stoppage continues for more than a few days, the additional costs and lost sales revenue could have a material impact on our operating results.”