Friday’s small-cap stocks to watch

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) announced a 40-per-cent cut to its quarterly dividend to 40 cents per share “to provide greater financial strength and flexibility to support continued growth, the pursuit of the bank’s strategic plan, and the alignment of the bank’s payout ratio with the bank’s policy.”

It also reported net income of $8.9-million or 13 cents per share for the second quarter, compared with $43.3-million or 95 cents for the second quarter of 2019. Analysts were expecting earnings of 23 cents in the latest quarter, according to S&P Capital IQ.

The bank said its provision for credit losses amounted to $54.9-million for the second quarter compared with $9.2-million for the second quarter of 2019. It said the increase is "mainly as a result of higher collective allowances. Individual allowances on a limited number of loans to business customers also contributed to the increase."

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CWB Financial Group (CWB-T), also known as Canadian Western Bank, reported second-quarter revenue of $214.4-million down from $209.8-million a year ago. Net income was $51.4-million or 59 cents per share versus $62-million or 71 cents a year ago.

"The decline in common shareholders' net income was driven by higher total revenue more than offset by an increase in the estimated provision for credit losses on performing loans ... and higher non-interest expenses as we continued to invest in people and technology to support ongoing strategic execution," the company stated.

Analysts were expecting revenue of $212.9-million and earnings of 46 cents per share.

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Aimia Inc. (AIM-T) says it plans to defend itself against a move by Air Canada in Quebec Superior Court to halt a merger that the smaller company sees as key to its corporate reinvention.

The former owner of Aeroplan — a rewards program that Aimia sold to Air Canada last year — says Air Canada has filed an application for an injunction against Aimia's proposed merger of its money-losing loyalty points business with Kognitiv Corp.

The agreement, announced on April 29, would see Aimia's Loyalty Solutions brand join forces with the Waterloo, Ont.-based tech company to form a new entity called Kognitiv, leaving Aimia with a 49 per cent stake in the spinoff.

Aimia says Air Canada's court filings allege that the transaction will result in breaches of non-competition and confidentiality provisions that Aimia agreed to when it announced the $720-million Aeroplan sale in November 2018.

Aimia says it denies the allegations and calls Air Canada's court application "without merit and an abuse of process."

The Kognitiv deal, slated to close the week of June 8, forms part of Aimia's plan to cast off its past as a rewards points company and reshape itself as an investment manager under an overhauled board following a tumultuous two years of shareholder unrest and litigation.

- The Canadian Press

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Clothing retailer Aritzia Inc. (ATZ-T) expects its net revenue is about 45 per cent lower for the current quarter compared with the same time last year due to COVID-19 related store closures and despite a significant spike in online sales.

The company expects net revenue for the three months ending May 31 to fall to between $105-million and $110-million, compared with about $197-million in the first quarter last year, the company said Thursday.

"This reflects two weeks of decelerating retail revenues in March prior to our boutique closures," said CEO and founder Brian Hill during a conference call with analysts.

Aritzia saw sales in stores slow in the first two weeks of March as the coronavirus pandemic unfolded in Canada. On March 16, the company shuttered its 96 stores in Canada and the U.S. in an effort to help curb the spread.

However, Aritzia experienced strong e-commerce revenues for the quarter, he said.

Its financial outlook came as the company reported results for its most recent quarter.

Aritzia saw net revenue for the fourth quarter ended March 1 grow 6.3 per cent to $275.4-million compared with $259.1-million in the same quarter the previous year.

Net income totalled $21.7-million, up 16 per cent from $18.7-million in the fourth quarter of the previous year.

Adjusted net income for the quarter fell 6.6 per cent to $23.4-million or 21 cents per diluted share, compared with $25.1-million or 21 cents per diluted share at the same time last year.

The company's "results were solid although a thread shy of forecast," wrote Irene Nattel, an analyst with RBC Dominion Securities Inc., in a note.

She noted that Aritzia's estimated first-quarter adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) loss of $24-million to $28-million is larger than her previously published forecast of a positive $3.5-million.

- The Canadian Press

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Guyana Goldfields Inc. (GUY-T) reported first-quarter revenues of US$38.6-million, down from US$49.7-million a year earlier.

Net earnings of US$2.3-million or a penny per share compared to a loss of US$2.3-million or a penny per share in the first quarter of 2019 "driven by higher margins from higher gold prices, partly offset by higher cost of sales per ounce due to higher fixed cost absorption from lower mined volumes."

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TerrAscend Corp. (TER-C) reported first-quarter sales of $34.8-million from $14.6-million. Its net loss was $13.9-million versus a loss of $10.7-million a year earlier.

Adjusted EBITDA was $4.9-million, compared with a loss of $5.5-million.

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CannTrust Holdings Inc. (TRST-T), currently under CCAA protection, announced that it has received notice from Health Canada that its licenses for its Fenwick Perpetual Harvest Facility in the Niagara region have been reinstated.

The company said it can't provide an exact timeframe for when its products will be available in the market. It also said the decision to reinstate the company's licenses at its Vaughan facility is independent of the Fenwick facility's licence reinstatement and at the discretion of Health Canada.

CannTrust says it's under CCAA protection to facilitate efforts to resolve its civil litigation exposures and complete its review of strategic alternatives. "Those efforts are ongoing," the company said, adding that it's unable to predict either their timing or their outcome.

In the meantime, the company said it remains "without meaningful revenues" and has terminated or laid-off a significant portion of its workforce.

"The company plans to begin operations following today's announcement as an important first step towards rebuilding stakeholder trust and delivering high-quality, innovative products to its patients and customers."

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Cresco Labs Inc. (CL-C) reported first-quarter revenue of US$66.4 million, an increase from US$21.1-million a year ago. Analysts were expecting revenue of US$65.9-million.

Its net loss was US$13.4 million versus US$7.6-million a year ago.

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Westport Fuel Systems Inc. (WPRT-T: WPRT-Q) announced it has secured a €5 million loan from UniCredit Italia "to bolster liquidity during the COVID-19 pandemic."

The company said the transaction, and the earlier announced deferral of 2020 principal payments of US$6-million to Export Development Canada on March 25, confirms its strategy to “secure and protect liquidity and to fund its operations through a prudent balance sheet policy.”

Editor’s note: An earlier version of this story stated an incorrect dividend number for Laurentian Bank