Second Quarter 1998
For the
period ended April 30, 1998
Press Release
MIDDLEFIELD BANCORP CONTINUES
SOLID GROWTH
Message to Shareholders
Middlefield Bancorp has achieved significant growth in its operating results in the second quarter ended April 30, 1998. The company has also expanded and diversified its investment portfolio while continuing to seek new investment opportunities.
The H.E.R.O. Industries division has been successful in further penetrating the North American market with clients such as Canadian Tire and Ace Hardware. Most recently, H.E.R.O. has also been approved as a supplier to Home Depot's newly formed rental division. Distribution has expanded in Eastern Europe into such countries as Poland and the Czech Republic. In fiscal 1998, it is expected that approximately 20% of H.E.R.O.'s total sales will be outside North America.
In March of this year, MBN announced an investment in Centurion Energy International Inc., a TSE listed oil and gas exploration and development company. Since then, Centurion has increased production to over 4,000 boe/day and recently announced a significant new gas discovery.
For the six months ended April 30, 1998, MBN achieved an increase in revenue of 24% over the same period last year. Net income and operating cash flow increased 17% and 11% respectively over the same period in 1997. Earnings per share in the second quarter increased to $0.05 compared to $0.03 per share in the first quarter.
| Financial Summary | ||
| For the six months ended April 30 | 1998 | 1997 |
| Revenue | $6,946,000 | $5,601,000 |
| Operating cash flow * | 1,227,000 | 1,107,000 |
| Net income | 695,000 | 593,000 |
| Earnings per share | 0.08 | 0.11 |
| Average number of shares outstanding | 8,891,000 | 5,365,000 |
| * Calculated as income before income tax, depreciation and amortization, interest on term debt and non-recurring expenses. | ||
Middlefield Bancorp trades on the Toronto Stock Exchange under the symbol "MBN".
| BALANCE SHEET | ||
| As at April 30, 1998 (with comparative figures for the preceding year) | ||
| Unaudited | 1998 | 1997 |
| (000's) | (000's) | |
| Assets | ||
| Current assets | ||
| Cash | $ 398 | $ 28 |
| Marketable securities | 11,915 | 1,866 |
| Receivables | 3,338 | 2,622 |
| Inventory | 1,738 | 1,744 |
| Prepaid expenses | 167 | 88 |
| 17,556 | 6,348 | |
| Property & equipment | 396 | 364 |
| Other assets | 521 | 513 |
| $ 18,473 | $ 7,225 | |
| Liabilities | ||
| Current liabilities | ||
| Bank indebtedness | 4,979 | - |
| Payables and accruals | 1,086 | 1,153 |
| Income taxes | 290 | 247 |
| Current portion of long term debt | - | 284 |
| 6,355 | 1,684 | |
| Shareholders' Equity | ||
| Capital stock | 8,500 | 3,238 |
| Retained earnings | 3,618 | 2,303 |
| 12,118 | 5,541 | |
| 18,473 | 7,225 | |
| STATEMENT OF INCOME AND RETAINED EARNINGS | ||
| For the six months ended April 30, 1998 (with comparative figures for the preceding year) | ||
| Unaudited | 1998 | 1997 |
| (000's) | (000's) | |
| Revenue | $ 6,946 | $ 5,601 |
| Operating income before the undernoted: | 1,905 | 1,337 |
| General and administrative expenses | 599 | 223 |
| Interest: | ||
| Term debt | - | 12 |
| Other | 79 | 7 |
| Depreciation and amortization | 59 | 54 |
| Income before income taxes | 1,168 | 1,041 |
| Provision for income taxes | 473 | 448 |
| Net income | 695 | 593 |
| Retained earnings, beginning of period | 2,923 | 1,710 |
| Retained earnings, end of period | $ 3,618 | $ 2,303 |
| STATEMENT OF CHANGES IN FINANCIAL POSITION | ||
| For the six months ended April 30, 1998 (with comparative figures for the preceding year) | ||
| Unaudited | 1998 | 1997 |
| (000's) | (000's) | |
| Operating | ||
| Net income | $ 695 | 593 |
| Deferred income taxes | (27) | 134 |
| Depreciation and amortization | 59 | 54 |
| 727 | 781 | |
| Decrease in non-cash operating working capital | (1,624) | (569) |
| (897) | 212 | |
| Investing | ||
| Purchase of marketable securities | (4,038) | (1,063) |
| Increase in development costs | (36) | (54) |
| Purchase of property and equipment | (83) | (41) |
| (4,157) | (1,158) | |
| Financing | ||
| Repayment of term debt | - | (143) |
| Issuance of capital stock | - | 96 |
| - | (47) | |
| Net decrease in cash | (5,054) | (993) |
| Cash, beginning of period | 473 | 1,021 |
| Cash (bank indebtedness), end of period | (4,581) | 28 |
Corporate Profile
Middlefield Bancorp Limited is a Canadian corporation engaged in merchant banking activities both in Canada and abroad. It is dedicated to the creation of shareholder value through the prudent selection, acquisition and management of investment opportunities. Middlefield Bancorp's board of directors and management include experienced and successful individuals who have committed their own capital to the Company. The Company's common shares are listed on the Toronto Stock Exchange under the symbol "MBN".
| Head Office | Directors |
| 1 First Canadian Place | Thomas I.A. Allen, Q.C |
| 58th Floor, P.O. Box 192 | Partner, Ogilvy Renault |
| Toronto, Ontario M5X 1A6 | Peter A. Braaten |
| Tel: 416-362-0714 | Director, Middlefield Group |
| Fax: 416-362-7925 | Murray J. Brasseur |
| Director, Middlefield Group | |
| Auditor | George S. Dembroski |
| Arthur Andersen & Co. | Former Vice Chairman, RBC Dominion Securities |
| Thomas C. Laurie | |
| Banker | Vice-President, RBC Dominion Securities Inc. |
| Bank of Nova Scotia | A. Gordon Stollery |
| Chairman, Northstar Energy Corporation | |
| Corporate Counsel | Charles B. Young |
| Ogilvy Renault | Director, Clearvision Lighting Limited |