Source CANADA NEWSWIRE Date 03/31/2020 Time 05:08:42 PM Company IsoEnergy Ltd. Title IsoEnergy Intersects 4.0m of 20.5% U3O8 in Drill Hole LE20-40 and Drills More Off-Scale Uranium Mineralization CDNX Symbol: ISO Press Release " BC-IsoEnergy-Hurricaine 03-18 2646 News release via Canada NewsWire, Vancouver 604-669-7764 -ME- Attention co.265532: ^IsoEnergy Intersects 4.0m of 20.5% U3O8 in Drill Hole LE20-40 and Drills More Off-Scale Uranium Mineralization@ VANCOUVER, March 18, 2020 /CNW/ - IsoEnergy Ltd. ("IsoEnergy" or the "Company") (TSXV: ISO; OTCQX: ISENF) is pleased to report additional results from the winter 2020 drilling program at the Hurricane zone. The Hurricane zone is a new discovery of high-grade uranium mineralization on the Company's 100% owned Larocque East property (the "Property") in the Eastern Athabasca Basin of Saskatchewan (Figure 1). Highlights: << -- Assays received from previously reported drill hole LE20-40 average 20.5% U3O8 over 4.0m from 322.5 to 326.5m -- The last six drill holes at the Hurricane zone all intersected thick intervals (>7m) of strong uranium mineralization, including two with off-scale sub-intervals (>65,000CPS on the RS-125 hand-held spectrometer, the "RS-125") -- Assays from the final six drill holes at the Hurricane zone are still pending <>> Craig Parry, Chief Executive Officer commented: "I'd like to congratulate our field crews on a very successful drilling program. The program was delivered safely and efficiently whilst generating many intersections of strong uranium mineralization." Steve Blower, Vice President of Exploration commented: "I'm encouraged by the number of thick intersections of very strong uranium mineralization encountered in this drilling program. The potential for more of these intersections at the Hurricane zone remains very high, as most of the cross-sections are yet to be closed off." Assays Received Drill Hole LE20-40 (Hurricane Section 4435E) Drill hole LE20-40 was completed on section with (and 8.5m south of) previously reported drill hole LE20-34 (8.5m (at) 33.9% U3O8) to evaluate the extent of high-grade mineralization to the south of that drill hole. It successfully intersected 4.0m of strong uranium mineralization that averages 20.5% U3O8 from 322.5 to 326.5m, including a sub-interval of very strong mineralization that averages 53.8% U3O8 over 1.5m. Figure 2 shows the drill holes in plan-view. Figure 3 shows the drill holes plotted on a cross-section. Table 1 summarizes the assay and radioactivity results at the Hurricane zone. Drill holes LE20-36 and 38 (Hurricane Section 4460E) Drill holes LE20-36 and 38 were completed on section 4460E as follow-ups to the north and south, respectively, of mineralization previously reported in drill hole LE20-30 (5.5m (at) 7.1% U3O8). Radioactivity in these drill holes was reported previously. Drill hole LE20-36 was completed 15m north of LE20-30 and it intersected 3.7% U3O8 over 1.0m from 332.5 to 333.5m, toward the northern margin of the Hurricane zone. Drill hole LE20-38 was completed 14m south of LE20-30 and intersected 7.5m (at) 2.0% U3O8 from 319.5 to 327.0m. Figures 2 and 4 show the drill holes in plan and cross-section view, respectively. Drill holes LE20-42 and LE20-44 (Hurricane Sections 4410E and 4460E, respectively) Drill holes LE20-42 and 44 were completed 16m west and 36m east, respectively, of strongly mineralized drill hole LE20-34 (Figure 2). Both drill holes intersected weak uranium mineralization averaging 0.4% U3O8 over 3.0m in LE20-42 (Figure 5) and 0.3% U3O8 over 1.5m in LE20-44 (Figure 4). These drill holes are interpreted to be just north of the trend of higher-grade mineralization intersected in drill hole LE20-34. New Intersections of Radioactivity Drill Hole LE20-51 (Hurricane Section 4510E) Drilled on section with, and 8m south of drill hole LE20-32A, drill hole LE20-51 was designed to evaluate the potential for additional high-grade mineralization south of that drill hole. LE20-51 successfully intersected a 7.5m thick zone of strong uranium mineralization from 322.5 to 330.0m that includes a 3.0m subinterval of continuous mineralization measuring >30,000CPS (RS-125) (Figures 2 and 6). The subinterval contains abundant "worm-rock" textured intergrowths of pitchblende and hematite along with common nickel mineralization. A core photo is provided in Figure 7. Drill Hole LE20-52 (Hurricane Section 4435E) This drill hole was designed to evaluate the potential for additional high-grade mineralization to the south of drill holes LE20-40 and LE20-34. It successfully intersected 7.5m of strong uranium mineralization from 318.5 to 326.0m, 7m south of drill hole LE20-40 (Figures 2 and 3). The interval includes 1.5m of continuous off-scale radioactivity on the RS-125. Drill Hole LE20-53 (Hurricane Section 4410E) Completed 25m along-strike to the west of drill hole LE20-52, this drill hole successfully intersected 10.5m of strong uranium mineralization from 317.5 to 328.0m (Figures 2 and 5). The intersection includes a 3.0m subinterval of very strong uranium mineralization measuring >20,000CPS (RS-125). It also includes a 0.5m zone from 326.0 to 326.5m that is off-scale on the RS-125. Drill Holes LE20-46 and LE20-48 (Hurricane Section 4485E) These drill holes were designed to evaluate the potential for additional high-grade uranium mineralization to the north and south of drill hole LE19-12 (Figures 2 and 8). Both of the drill holes intersected thick intervals of uranium mineralization. Drill hole LE20-46 intersected 10m (from 318.0 to 328.0m) of strong uranium mineralization 6m north of LE19-12, including 2.0m that averages >20,000CPS (RS-125). Drill hole LE20-48 intersected 11.5m (from 316.0-317.5m) of uranium mineralization 12m south of LE19-12, including 0.5m that averages >20,000 CPS (RS-125). Drill Hole LE20-49 (Hurricane Section 4510E) Drilled 15m north of drill hole LE20-32A, drill hole LE20-49 intersected 9m of uranium mineralization from 320.5 to 329.5m, including 1m that averages >10,000CPS (RS-125) (Figures 2 and 6). Drilling to the East of the Hurricane Zone Drill holes LE20-43, 45A, 47 and 50 were completed up to 1.6km east of the Hurricane zone. Although no uranium mineralization was intersected, several important features were observed in the drill core that will require follow-up drilling in the area. These include strong graphitic brittle faults in the basement and strong sandstone alteration zones similar to those associated with uranium mineralization at the Hurricane zone. Geochemical analyses from the fault zones and alteration haloes are pending. Next Steps Winter drilling is now complete at the Larocque East property. Assays for the final six drill holes completed at the Hurricane zone are pending. Data compilation and interpretation are underway. Plans for a summer drilling program that will continue to define the extent of the Hurricane zone are being developed. The Larocque East Property and the Hurricane Zone The 100% owned Larocque East property consists of 20 mineral claims totaling 8,371 ha and is not encumbered by any royalties or other interests. Larocque East is immediately adjacent to the north end of IsoEnergy's Geiger property and is 35 km northwest of Orano Canada's McClean Lake uranium mine and mill. Along with other target areas, the Property covers a 15-kilometre-long northeast extension of the Larocque Lake conductor system; a trend of graphitic metasedimentary basement rocks that is associated with significant uranium mineralization at the Hurricane zone, and in several occurrences on Cameco Corp.'s neighbouring property to the southwest of Larocque East. The Hurricane zone was discovered in July, 2018 and was followed up with 29 drill holes in 2019. Dimensions are currently 575m along-strike, 40m wide and up to 11m thick. The zone is open for expansion along-strike to the east and on most sections. Mineralization is polymetallic and commonly straddles the sub-Athabasca unconformity 320 m below surface. The best intersection to date is 33.9% U3O8 over 8.5m in drill hole LE20-34. Drilling at Cameco Corp.'s Larocque Lake zone on the neighbouring property to the southwest has returned historical intersections of up to 29.9% U3O8 over 7.0m in drill hole Q22-040. Like the nearby Geiger property, Larocque East is located adjacent to the Wollaston-Mudjatik transition zone - a major crustal suture related to most of the uranium deposits in the eastern Athabasca Basin. Importantly, the sandstone cover on the Property is thin, ranging between 140m and 330m in previous drilling. In addition to the Hurricane zone discovery, four historical drill holes have intersected weak uranium mineralization at other locations on the Property to date. Table 1 - Drill 1 2020 Hurricane Zone Results Hole-ID From (m) To (m) Length (m) Radioactivity1,2 Chemical Assays Orientation Location (CPS) U3O8 (%) Ni (%) Co (%) (Azm/Dip) LE20-30(3) 330.0 335.5 5.5 >500 7.1 0.9 0.3 180/-80 Section 4460E incl. 331.0 331.5 0.5 >10,000 3.4 0.1 0.1 and incl. 332.0 333.5 1.5 >20,000 24.0 2.7 0.5 --- LE20-32A(3) 329.5 338.0 8.5 >500 19.6 1.1 0.1 180/-80 Section 4510E incl. 334.5 337.0 2.5 >20,000 63.6 0.4 0.0 incl. 335.0 336.5 1.5 Off-scale5 76.7 0.3 0.0 --- LE20-34(3) 326.0 334.5 8.5 >500 33.9 0.5 0.1 180/-80 Section 4435E incl. 328.0 333.0 5.0 >20,000 57.1 0.7 0.1 incl. 329.5 331.5 2.0 Off-scale5 62.8 0.4 0.1 --- LE20-364 332.5 333.5 1.0 >500 3.7 1.0 0.8 180/-80 Section 4460E incl. 332.5 333.0 0.5 >20,000 5.5 1.3 1.0 --- LE20-384 319.5 327.0 7.5 >500 2.0 0.2 0.2 000/-90 Section 4460E incl. 325.0 325.5 0.5 >20,000 3.5 0.0 0.0 and incl. 326.0 326.5 0.5 >20,000 9.8 0.1 0.2 --- LE20-404 319.5 320.5 1.0 >500 0.1 0.1 0.1 000/-90 Section 4435E and 322.5 326.5 4.0 >500 20.5 1.0 0.0 incl. 323.0 324.5 1.5 >20,000 53.8 2.3 0.0 incl. 323.0 323.5 0.5 Off-scale5 64.9 0.2 0.1 --- LE20-42 326.0 329.0 3.0 >500 0.4 0.2 0.4 000/-90 Section 4410E --- LE20-44 325.5 326.0 0.5 >500 0.2 0.0 0.0 000/-90 Section 4460E and 327.5 329.0 1.5 >500 0.3 0.6 0.7 --- LE20-46 318.0 328.0 10.0 >500 Pending 000/-90 Section 4485E Incl. 323.0 325.0 2.0 >20,000 and 326.0 327.0 1.0 >10,000 --- LE20-48 316.0 327.5 11.5 >500 Pending 000/-90 Section 4485E Incl. 321.0 321.5 0.5 >10,000 and incl. 324.0 327.0 3.0 >10,000 incl. 324.5 325.0 0.5 >20,000 --- LE20-49 320.5 329.5 9.0 >500 Pending 000/-90 Section 4510E incl. 326.5 327.5 1.0 >10,000 --- LE20-51 322.5 330.0 7.5 >500 Pending 000/-90 Section 4510E incl. 325.5 329.0 3.5 >10,000 Incl. 326.0 329.0 3.0 >20,000 --- LE20-52 312.5 313.0 0.5 >500 Pending 000/-90 Section 4435E and 318.5 326.0 7.5 >500 incl. 322.5 325.0 2.5 >10,000 incl. 322.5 324.0 1.5 Off-scale5 --- LE20-53 317.5 328.0 10.5 >500 Pending 000/-90 Section 4410E incl. 324.5 327.5 3.0 >20,000 incl. 326.0 326.5 0.5 Off-scale5 (equal sign)(equal sign)(equal sign) Notes: 1. Radioactivity is total gamma from drill core measured with an RS-125 hand-held spectrometer 2. Measurements of total gamma on drill core are an indication of uranium content, but may not correlate with chemical assays 3. Radioactivity and chemical assays previously disclosed 4. Radioactivity previously disclosed 5. Off-scale radioactivity is defined as exceeding 65,536 cps, the maximum measurable by an RS-125 spectrometer Qualified Person Statement The scientific and technical information contained in this news release was prepared by Andy Carmichael, P.Geo., IsoEnergy's Senior Geologist, who is a "Qualified Person" (as defined in NI 43-101 - Standards of Disclosure for Mineral Projects). Mr. Carmichael has verified the data disclosed. All radioactivity measurements reported herein are total gamma from an RS-125 hand-held spectrometer. As mineralized drill holes at the Hurricane zone are oriented very steeply (-80 to -90 degrees) into a zone of mineralization that is interpreted to be horizontal, the true thickness of the intersections is expected to be greater than or equal to 90% of the core lengths. This news release refers to properties other than those in which the Company has an interest. Mineralization on those other properties is not necessarily indicative of mineralization on the Company's properties. All chemical analyses are completed for the Company by SRC Geoanalytical Laboratories in Saskatoon, SK. For additional information regarding the Company's Larocque East Project, including its quality assurance and quality control procedures, please see the Technical Report dated effective May 15, 2019 on the Company's profile at www.sedar.com. About IsoEnergy IsoEnergy is a well-funded uranium exploration and development company with a portfolio of prospective projects in the eastern Athabasca Basin in Saskatchewan, Canada. The Company recently discovered the high-grade Hurricane Zone of uranium mineralization on its 100% owned Larocque East property in the Eastern Athabasca Basin. IsoEnergy is led by a Board and Management team with a track record of success in uranium exploration, development and operations. The Company was founded and is supported by the team at its major shareholder, NexGen Energy Ltd. Neither the TSX Venture Exchange nor its Regulations Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release. This news release shall not constitute an offer to sell or a solicitation of any offer to buy any securities, nor shall there be any sale of any securities in any jurisdiction in which such offer, solicitation or sale would be unlawful. The securities referenced herein have not been, nor will they be, registered under the United States Securities Act of 1933, as amended (the "U.S. Sec (92.0) 2.0 (7.0) 318.6 (7.0) --- --- Net earnings including non- controlling interests 1,531.4 245.0 (275.0) 7.0 (23.0) 1,508.4 (22.0) (equal sign)(equal sign)(equal sign) (equal sign)(equal sign)(equal sign) Net loss attributable to non- controlling interests 9.4 (2.0) 15.0 (12.0) 1.0 10.4 --- --- Net earnings attributable to shareholders of the Corporation 1,540.8 243.0 (260.0) (5.0) (22.0) 1,518.8 (22.0) (equal sign)(equal sign)(equal sign) (equal sign)(equal sign)(equal sign) (1) Depreciation and interest expenses are based on our assessment of Fiscal 2020 impact. (equal sign)(equal sign)(equal sign)
In order to facilitate the understanding of our financial performance, we have adjusted some of our previously reported performance measures. All adjustments related to IFRS 16 are clearly identified and are based on the calculations presented in the tables above.
Exchange Rate Data
We use the US dollar as our reporting currency, which provides more relevant information given the predominance of our operations in the United States.
The following table sets forth information about exchange rates based upon closing rates expressed as US dollars per comparative currency unit:
16-week periods ended 40-week periods ended February 2, 2020 February 3, 2019 February 2, 2020 February 3, 2019 Average for period Canadian dollar 0.7601 0.7542 0.7558 0.7622 Norwegian krone 0.1103 0.1177 0.1122 0.1204 Swedish krone 0.1046 0.1107 0.1045 0.1118 Danish krone 0.1484 0.1528 0.1490 0.1550 Zloty 0.2597 0.2653 0.2592 0.2689 Euro 1.1090 1.1400 1.1126 1.1560 Ruble 0.0158 0.0150 0.0156 0.0153
Summary Analysis of Consolidated Results for the Third Quarter and First Three Quarters of Fiscal 2020
The following table highlights certain information regarding our operations for the 16 and 40-week periods ended February 2, 2020, and February 3, 2019. CAPL refers to CrossAmerica Partners LP.
16-week periods ended 40-week periods ended (in millions of US dollars, unless otherwise stated) February 2, February 3, Variation February 2, February 3, Variation 2020 2019 % 2020 2019 % Statement of Operations Data: Merchandise and service revenues(1): United States 3,197.0 3,133.4 2.0 8,484.6 8,311.9 2.1 Europe 419.0 405.3 3.4 1,103.4 1,114.5 (1.0) Canada 672.0 618.3 8.7 1,816.0 1,686.9 7.7 CAPL 22.0 (100.0) 29.6 75.7 (60.9) Elimination of intercompany transactions with CAPL (0.7) (100.0) (0.8) (2.2) (63.6) Total merchandise and service revenues 4,288.0 4,178.3 2.6 11,432.8 11,186.8 2.2 Road transportation fuel revenues: United States 8,100.2 7,740.2 4.7 21,420.7 21,968.5 (2.5) Europe 2,324.4 2,396.6 (3.0) 6,120.7 6,420.6 (4.7) Canada 1,423.3 1,377.3 3.3 3,755.5 3,924.6 (4.3) CAPL 268.2 511.4 (47.6) 1,365.7 1,775.5 (23.1) Elimination of intercompany transactions with CAPL (50.5) (93.5) (46.0) (288.0) (364.7) (21.0) Total road transportation fuel revenues 12,065.6 11,932.0 1.1 32,374.6 33,724.5 (4.0) Other revenues(2): United States 13.1 6.4 104.7 28.1 16.9 66.3 Europe 219.4 380.0 (42.3) 536.3 1,023.7 (47.6) Canada 6.6 7.3 (9.6) 16.7 19.7 (15.2) CAPL 12.8 15.3 (16.3) 65.6 45.7 43.5 Elimination of intercompany transactions with CAPL (1.3) (4.3) (69.8) (8.9) (13.0) (31.5) Total other revenues 250.6 404.7 (38.1) 637.8 1,093.0 (41.6) Total revenues 16,604.2 16,515.0 0.5 44,445.2 46,004.3 (3.4) Merchandise and service gross profit(1): United States 1,087.7 1,055.0 3.1 2,884.4 2,809.9 2.7 Europe 177.2 169.5 4.5 460.6 465.6 (1.1) Canada 221.4 204.6 8.2 596.0 569.3 4.7 CAPL 5.4 (100.0) 6.8 18.4 (63.0) Elimination of intercompany transactions with CAPL (0.6) (100.0) (0.8) (1.9) (57.9) Total merchandise and service gross profit 1,486.3 1,433.9 3.7 3,947.0 3,861.3 2.2 Road transportation fuel gross profit: United States 856.9 914.5 (6.3) 2,227.8 2,021.5 10.2 Europe 277.4 272.7 1.7 725.8 755.1 (3.9) Canada 112.9 116.5 (3.1) 280.8 310.3 (9.5) CAPL 10.5 28.1 (62.6) 57.5 81.3 (29.3) Total road transportation fuel gross profit 1,257.7 1,331.8 (5.6) 3,291.9 3,168.2 3.9 Other revenues gross profit(2): United States 13.1 6.4 104.7 28.1 16.9 66.3 Europe 40.6 43.5 (6.7) 103.8 117.8 (11.9) Canada 6.6 7.3 (9.6) 16.6 19.7 (15.7) CAPL 12.9 15.3 (15.7) 65.7 45.7 43.8 Elimination of intercompany transactions with CAPL (1.3) (4.3) (69.8) (8.9) (13.0) (31.5) Total other revenues gross profit 71.9 68.2 5.4 205.3 187.1 9.7 Total gross profit 2,815.9 2,833.9 (0.6) 7,444.2 7,216.6 3.2 Operating, selling, administrative and general expenses Excluding CAPL 1,607.3 1,682.9 (4.5) 4,044.5 4,262.2 (5.1) CAPL 8.3 20.5 (59.5) 46.8 58.9 (20.5) Elimination of intercompany transactions with CAPL (1.1) (4.8) (77.1) (9.2) (14.5) (36.6) Total Operating, selling, administrative andgeneral expenses 1,614.5 1,698.6 (5.0) 4,082.1 4,306.6 (5.2) Restructuring costs 1.7 1.6 6.2 3.6 7.9 (54.4) Gain on disposal of property and equipment and other assets (74.9) (6.5) 1,052.3 (63.8) (5.8) 1,000.0 Depreciation, amortization and impairment Excluding CAPL 398.4 286.1 39.3 975.5 703.6 38.6 CAPL 7.7 19.1 (59.7) 53.9 125.6 (57.1) Total depreciation, amortization and impairment 406.1 305.2 33.1 1,029.4 829.2 24.1 Operating income Excluding CAPL 862.1 825.9 4.4 2,368.1 2,118.2 11.8 CAPL 6.6 9.2 (28.3) 25.3 (39.1) (164.7) Elimination of intercompany transactions with CAPL (0.2) (0.1) 100.0 (0.5) (0.4) 25.0 Total operating income 868.5 835.0 4.0 2,392.9 2,078.7 15.1 Net financial expenses 84.2 90.1 (6.5) 231.3 241.5 (4.2) Net earnings including non-controlling interests 663.9 611.8 8.5 1,779.3 1,531.4 16.2 Net (earnings) loss attributable to non- controlling interests (4.0) 0.3 (1,433.3) (2.0) 9.4 (121.3) Net earnings attributable to shareholders of the Corporation 659.9 612.1 7.8 1,777.3 1,540.8 15.3 Per Share Data: Basic net earnings per share (dollars per share) 0.59 0.54 9.3 1.58 1.37 15.3 Diluted net earnings per share (dollars per share) 0.59 0.54 9.3 1.58 1.36 16.2 Adjusted diluted net earnings per share (dollars per share)(13) 0.52 0.53 (1.9) 1.51 1.38 9.4 Other Operating Data - excluding CAPL: Merchandise and service gross margin(1): Consolidated 34.7% 34.4% 0.3 34.6% 34.6% United States 34.0% 33.7% 0.3 34.0% 33.8% 0.2 Europe 42.3% 41.8% 0.5 41.7% 41.8% (0.1) Canada 32.9% 33.1% (0.2) 32.8% 33.7% (0.9) Growth of same-store merchandise revenues(3): United States(4) 3.0% 4.5% (1.5) 2.9% 4.4% (1.5) Europe 2.1% 2.9% (0.8) 2.1% 4.8% (2.7) Canada(4) 4.2% 4.9%5.70 --- 52-week period ended February 3, 2019 --- United States (US dollars per gallon) - excluding CAPL 2.51 2.76 2.72 2.42 2.59 Europe (US cents per liter) 78.32 75.07 80.56 75.28 77.21 Canada (CA cents per liter) 110.39 117.95 115.22 97.59 109.34
Other revenues
Total other revenues for the third quarter and first three quarters of fiscal 2020 were $250.6 million and $637.8 million, respectively, a decrease of $154.1 million and $455.2 million compared with the corresponding periods of fiscal 2019. Excluding CAPL's revenues, as well as the net negative impact from the translation of our Canadian and European operations into US dollars, other revenues decreased by approximately $139.0 million and by $427.0 million in the third quarter and first three quarters of fiscal 2020, respectively, primarily driven by the disposal of our marine fuel business during the third quarter of fiscal 2019, which had an impact of approximately $80.0 million, and $267.0 million, respectively, as well as by lower aviation fuel revenues, which had a minimal impact on gross profit.
Gross profit
Our gross profit was $2.8 billion for the third quarter of fiscal 2020, down by $18.0 million, or 0.6% compared with the corresponding quarter of fiscal 2019, mainly attributable to lower road transportation fuel gross margin in the U.S., the disposal of our interests in CAPL, which had an impact of approximately $22.0 million, and to the net negative impact from the translation of our Canadian and European operations into US dollars, which had an impact of approximately $15.0 million, partly offset by organic growth.
For the first three quarters of fiscal 2020, our gross profit increased by $227.6 million or 3.2% compared with the first three quarters of fiscal 2019, mainly attributable to higher fuel margins and to organic growth, partly offset by the net negative impact from the translation of our Canadian and European operations into US dollars.
Merchandise and service gross profit
In the third quarter of fiscal 2020, our merchandise and service gross profit was $1.5 billion, an increase of $52.4 million compared with the corresponding quarter of fiscal 2019. Excluding CAPL's gross profit, as well as the net negative impact from the translation of our Canadian and European operations into US dollars, merchandise and service gross profit increased by approximately $61.0 million or 4.2%, mainly attributable to organic growth. Our gross margin increased by 0.3% in the United States to 34.0%, and by 0.5% in Europe to 42.3%. These performances reflect changes in our product mix towards higher margin categories. In Canada, our gross margin decreased by 0.2% to 32.9%, mainly as a result of the conversion of our Esso stores from the agent model to the corporate model, partly offset by improved supply conditions.
During the first three quarters of fiscal 2020, our merchandise and service gross profit was $3.9 billion, an increase of $85.7 million compared with the first three quarters of fiscal 2019. Excluding CAPL's gross profit, as well as the net negative impact from the translation of our Canadian and European operations into US dollars, merchandise and service gross profit increased by approximately $123.0 million or 3.2%. The gross margin was 34.0% in the United States, an increase of 0.2%, 41.7% in Europe, a decrease of 0.1%, while in Canada the gross margin was 32.8%, a decrease of 0.9%.
Road transportation fuel gross profit
In the third quarter of fiscal 2020, our road transportation fuel gross profit was $1.3 billion, a decrease of $74.1 million compared with the corresponding quarter of fiscal 2019. Excluding CAPL's gross profit, as well as the net negative impact from the translation of our Canadian and European operations into US dollars, our third quarter of fiscal 2020 road transportation fuel gross profit decreased by approximately $47.0 million or 3.6%. Our road transportation fuel gross margin was strong at 27.04¢ per gallon in the United States, a decrease of 2.38¢ per gallon, compared to the markedly high fuel margins of the same quarter last year. In Europe, the road transportation fuel gross margin was US 8.50¢ per liter, an increase of US 0.20¢ per liter, while in Canada, it was CA 8.06¢ per liter, a decrease of CA 0.05¢ per liter.
During the first three quarters of fiscal 2020, our road transportation fuel gross profit was $3.3 billion, an increase of $123.7 million compared with the first three quarters of fiscal 2019. Excluding CAPL's gross profit, as well as the net negative impact from the translation of our Canadian and European operations into US dollars, road transportation fuel gross profit increased by approximately $190.0 million or 6.2%, as a result of higher fuel margins. The road transportation fuel gross margin was 27.37¢ per gallon in the United States, US 8.43¢ per liter in Europe, and CA 7.81¢ per liter in Canada.
The road transportation fuel gross margin of our company-operated stores in the United States and the impact of expenses related to electronic payment modes for the last eight quarters, starting with the fourth quarter of the fiscal year ended April 29, 2018, were as follows:
(US cents per gallon) Quarter 4th 1st 2nd 3rd Weighted average --- 52-week period ended February 2, 2020 Before deduction of expenses related to electronic payment modes 18.51 26.86 28.29 27.04 25.30 Expenses related to electronic payment modes(1) 4.40 4.70 4.63 4.54 4.60 After deduction of expenses related to electronic payment modes 14.11 22.16 23.66 22.50 20.70 --- 52-week period ended February 3, 2019 Before deduction of expenses related to electronic payment modes 17.29 22.70 21.88 29.42 23.30 Expenses related to electronic payment modes(1) 3.86 4.67 4.55 4.31 4.30 After deduction of expenses related to electronic payment modes 13.43 18.03 17.33 25.11 19.00 ---
(1) Please note that this information has been restated to reflect the cost of electronic payment expenses per corporate-store road transportation fuel gallons instead of per total road transportation fuel gallons.
As demonstrated by the table above, road transportation fuel margins in the United States can be volatile from one quarter to another but tend to be relatively stable over longer periods. Margin volatility and expenses related to electronic payment modes are not as significant in Europe and Canada.
Other revenues gross profit
In the third quarter and first three quarters of fiscal 2020, other revenues gross profit was $71.9 million and $205.3 million, respectively, an increase of $3.7 million and $18.2 million, compared with the corresponding periods of fiscal 2019, respectively. Excluding CAPL's gross profit, as well as the net negative impact from the translation of our Canadian and European operations into US dollars, other revenues gross profit increased by approximately $5.0 million and $1.0 million in the third quarter and first three quarters of fiscal 2020, respectively.
Operating, selling, administrative and general expenses ("expenses")
For the third quarter and first three quarters of fiscal 2020, expenses decreased by 5.0% and 5.2%, respectively, compared with the corresponding periods of fiscal 2019. If we exclude decrease in rent from the transition to IFRS 16 and certain items that are not considered indicative of future trends, expenses increased by 3.7% and 3.0%, respectively.
16-week period ended February 2, 2020 40-week period ended February 2, 2020 Total variance, as reported (5.0%) (5.2%) --- Adjusted for: Decrease in rent expense from transition to IFRS 16 6.6% 6.4% Decrease from settlements and reserves adjustments for specific elements recognized to earnings of fiscal 2019(1) 1.5% 0.6% Decrease in CAPL's expenses 0.7% 0.3% Decrease from the net impact of foreign exchange translation 0.6% 1.0% Increase from higher electronic payment fees, excluding acquisitions (0.6%) (0.3%) Acquisition costs recognized to earnings of fiscal 2020 (0.2%) (0.1%) Disposal of our marine fuel business 0.1% 0.1% Compensatory payment to CAPL for divestiture of assets recognized in fiscal 2019 0.2% --- Remaining variance 3.7% 3.0% (equal sign)(equal sign)(equal sign)
During the third quarter of fiscal 2019, we settled various claims and adjusted our reserves in connection with specific events of the quarter, which had a pre-tax negative impact of $24.2 (1) million on our earnings.
Excluding the conversion of our Esso stores from the agent model to the corporate model, the remaining variance for the third quarter and first three quarters of fiscal 2020 would have been 3.4% and 2.5%, respectively. Growth in expenses, amongst other items, was driven by normal inflation, higher labor costs from minimum wage increases in certain regions as well as from the challenging labor market in North America, and incremental investments in our stores and in data analytics to support our strategic initiatives. We continue to rigorously focus on controlling costs throughout our organization, while ensuring we maintain the quality of service we offer to our customers.
Earnings before interest, taxes, depreciation, amortization and impairment (EBITDA) and adjusted EBITDA
During the third quarter of fiscal 2020, EBITDA increased from $1.1 billion to $1.3 billion, an increase of 11.5% compared with the same quarter last year. Excluding the specific items shown in the table below from EBITDA of the third quarter of fiscal 2020 and of the corresponding period of fiscal 2019, the adjusted EBITDA for the third quarter of fiscal 2020 decreased by $35.6 million or 2.9% compared with the corresponding period of the previous fiscal year, mainly from lower road transportation fuel gross margins in the U.S., the higher level of initiatives throughout the organization, the disposal of our interests in CAPL, as well as from the net negative impact from the translation of our Canadian and European operations into US dollars, partly offset by organic growth. The variation in exchange rates had a net negative impact of approximately $5.0 million.
During the first three quarters of fiscal 2020, EBITDA increased from $2.9 billion to $3.4 billion, a growth of 17.5% compared with the same period last year. Excluding the specific items shown in the table below from EBITDA of the first three quarters of fiscal 2020 and of fiscal 2019, the adjusted EBITDA for the first three quarters of fiscal 2020 increased by $152.0 million or 4.8% compared with the corresponding period of the previous fiscal year, mainly attributable to higher road transportation fuel margins in the U.S. and Europe, and to organic growth. The variation in exchange rates had a net negative impact of approximately $32.0 million.
It should be noted that EBITDA and adjusted EBITDA are not performance measures defined by IFRS, but we, as well as investors and analysts, consider that those performance measures facilitate the evaluation of our ongoing operations and our ability to generate cash flows to fund our cash requirements, including our capital expenditures program and payment of dividends. Note that our definition of these measures may differ from the one used by other public corporations.
16-week periods ended 40-week periods ended (in millions of US dollars) February 2, February 3, February 2, February 3, 2020 2019 2020 2019 --- Net earnings including non- controlling interests, as reported 663.9 611.8 1,779.3 1,531.4 --- Add: Income taxes 125.5 140.4 400.5 325.6 Net financial expenses 84.2 90.1 231.3 241.5 Depreciation, amortization and impairment 406.1 305.2 1,029.4 829.2 --- EBITDA 1,279.7 1,147.5 3,440.5 2,927.7 --- Adjusted for: Net gain on the disposal of the Corporation's interests in CAPL (61.5) (61.5) EBITDA attributable to non- controlling interests (14.0) (21.1) (64.6) (61.3) Acquisition costs 2.9 0.6 3.9 1.8 Restructuring costs attributable to shareholders of the Corporation 1.7 1.6 3.6 7.9 Gain on the disposal of the marine fuel business (3.2) (3.2) Compensatory payment to CAPL for divestiture of assets, net of non-controlling interests 5.0 --- Adjusted EBITDA, as previously reported 1,208.8 1,125.4 3,321.9 2,877.9 (equal sign)(equal sign)(equal sign) Estimated pro forma impact from transition to IFRS 16 attributable to shareholders of the Corporation 119.0 292.0 --- Adjusted EBITDA 1,208.8 1,244.4 3,321.9 3,169.9 (equal sign)(equal sign)(equal sign)
Depreciation, amortization and impairment ("depreciation")
For the third quarter and first three quarters of fiscal 2020, our depreciation expense increased by $100.9 million and $200.2 million, respectively. Excluding CAPL's results, as well as the $55.0 million impairment charge on CAPL's goodwill recorded in the first quarter of fiscal 2019, the depreciation expense increased by $112.3 million and by $271.9 million for the third quarter and first three quarters of fiscal 2020, respectively, mainly driven by " BC-IsoEnergy-Hurricaine 03-18 2646 News release via Canada NewsWire, Vancouver 604-669-7764 -ME- Attention co.265532: ^IsoEnergy Intersects 4.0m of 20.5% U3O8 in Drill Hole LE20-40 and Drills More Off-Scale Uranium Mineralization@ VANCOUVER, March 18, 2020 /CNW/ - IsoEnergy Ltd. ("IsoEnergy" or the "Company") (TSXV: ISO; OTCQX: ISENF) is pleased to report additional results from the winter 2020 drilling program at the Hurricane zone. The Hurricane zone is a new discovery of high-grade uranium mineralization on the Company's 100% owned Larocque East property (the "Property") in the Eastern Athabasca Basin of Saskatchewan (Figure 1). Highlights: << -- Assays received from previously reported drill hole LE20-40 average 20.5% U3O8 over 4.0m from 322.5 to 326.5m -- The last six drill holes at the Hurricane zone all intersected thick intervals (>7m) of strong uranium mineralization, including two with off-scale sub-intervals (>65,000CPS on the RS-125 hand-held spectrometer, the "RS-125") -- Assays from the final six drill holes at the Hurricane zone are still pending <>> Craig Parry, Chief Executive Officer commented: "I'd like to congratulate our field crews on a very successful drilling program. The program was delivered safely and efficiently whilst generating many intersections of strong uranium mineralization." Steve Blower, Vice President of Exploration commented: "I'm encouraged by the number of thick intersections of very strong uranium mineralization encountered in this drilling program. The potential for more of these intersections at the Hurricane zone remains very high, as most of the cross-sections are yet to be closed off." Assays Received Drill Hole LE20-40 (Hurricane Section 4435E) Drill hole LE20-40 was completed on section with (and 8.5m south of) previously reported drill hole LE20-34 (8.5m (at) 33.9% U3O8) to evaluate the extent of high-grade mineralization to the south of that drill hole. It successfully intersected 4.0m of strong uranium mineralization that averages 20.5% U3O8 from 322.5 to 326.5m, including a sub-interval of very strong mineralization that averages 53.8% U3O8 over 1.5m. Figure 2 shows the drill holes in plan-view. Figure 3 shows the drill holes plotted on a cross-section. Table 1 summarizes the assay and radioactivity results at the Hurricane zone. Drill holes LE20-36 and 38 (Hurricane Section 4460E) Drill holes LE20-36 and 38 were completed on section 4460E as follow-ups to the north and south, respectively, of mineralization previously reported in drill hole LE20-30 (5.5m (at) 7.1% U3O8). Radioactivity in these drill holes was reported previously. Drill hole LE20-36 was completed 15m north of LE20-30 and it intersected 3.7% U3O8 over 1.0m from 332.5 to 333.5m, toward the northern margin of the Hurricane zone. Drill hole LE20-38 was completed 14m south of LE20-30 and intersected 7.5m (at) 2.0% U3O8 from 319.5 to 327.0m. Figures 2 and 4 show the drill holes in plan and cross-section view, respectively. Drill holes LE20-42 and LE20-44 (Hurricane Sections 4410E and 4460E, respectively) Drill holes LE20-42 and 44 were completed 16m west and 36m east, respectively, of strongly mineralized drill hole LE20-34 (Figure 2). Both drill holes intersected weak uranium mineralization averaging 0.4% U3O8 over 3.0m in LE20-42 (Figure 5) and 0.3% U3O8 over 1.5m in LE20-44 (Figure 4). These drill holes are interpreted to be just north of the trend of higher-grade mineralization intersected in drill hole LE20-34. New Intersections of Radioactivity Drill Hole LE20-51 (Hurricane Section 4510E) Drilled on section with, and 8m south of drill hole LE20-32A, drill hole LE20-51 was designed to evaluate the potential for additional high-grade mineralization south of that drill hole. LE20-51 successfully intersected a 7.5m thick zone of strong uranium mineralization from 322.5 to 330.0m that includes a 3.0m subinterval of continuous mineralization measuring >30,000CPS (RS-125) (Figures 2 and 6). The subinterval contains abundant "worm-rock" textured intergrowths of pitchblende and hematite along with common nickel mineralization. A core photo is provided in Figure 7. Drill Hole LE20-52 (Hurricane Section 4435E) This drill hole was designed to evaluate the potential for additional high-grade mineralization to the south of drill holes LE20-40 and LE20-34. It successfully intersected 7.5m of strong uranium mineralization from 318.5 to 326.0m, 7m south of drill hole LE20-40 (Figures 2 and 3). The interval includes 1.5m of continuous off-scale radioactivity on the RS-125. Drill Hole LE20-53 (Hurricane Section 4410E) Completed 25m along-strike to the west of drill hole LE20-52, this drill hole successfully intersected 10.5m of strong uranium mineralization from 317.5 to 328.0m (Figures 2 and 5). The intersection includes a 3.0m subinterval of very strong uranium mineralization measuring >20,000CPS (RS-125). It also includes a 0.5m zone from 326.0 to 326.5m that is off-scale on the RS-125. Drill Holes LE20-46 and LE20-48 (Hurricane Section 4485E) These drill holes were designed to evaluate the potential for additional high-grade uranium mineralization to the north and south of drill hole LE19-12 (Figures 2 and 8). Both of the drill holes intersected thick intervals of uranium mineralization. Drill hole LE20-46 intersected 10m (from 318.0 to 328.0m) of strong uranium mineralization 6m north of LE19-12, including 2.0m that averages >20,000CPS (RS-125). Drill hole LE20-48 intersected 11.5m (from 316.0-317.5m) of uranium mineralization 12m south of LE19-12, including 0.5m that averages >20,000 CPS (RS-125). Drill Hole LE20-49 (Hurricane Section 4510E) Drilled 15m north of drill hole LE20-32A, drill hole LE20-49 intersected 9m of uranium mineralization from 320.5 to 329.5m, including 1m that averages >10,000CPS (RS-125) (Figures 2 and 6). Drilling to the East of the Hurricane Zone Drill holes LE20-43, 45A, 47 and 50 were completed up to 1.6km east of the Hurricane zone. Although no uranium mineralization was intersected, several important features were observed in the drill core that will require follow-up drilling in the area. These include strong graphitic brittle faults in the basement and strong sandstone alteration zones similar to those associated with uranium mineralization at the Hurricane zone. Geochemical analyses from the fault zones and alteration haloes are pending. Next Steps Winter drilling is now complete at the Larocque East property. Assays for the final six drill holes completed at the Hurricane zone are pending. Data compilation and interpretation are underway. Plans for a summer drilling program that will continue to define the extent of the Hurricane zone are being developed. The Larocque East Property and the Hurricane Zone The 100% owned Larocque East property consists of 20 mineral claims totaling 8,371 ha and is not encumbered by any royalties or other interests. Larocque East is immediately adjacent to the north end of IsoEnergy's Geiger property and is 35 km northwest of Orano Canada's McClean Lake uranium mine and mill. Along with other target areas, the Property covers a 15-kilometre-long northeast extension of the Larocque Lake conductor system; a trend of graphitic metasedimentary basement rocks that is associated with significant uranium mineralization at the Hurricane zone, and in several occurrences on Cameco Corp.'s neighbouring property to the southwest of Larocque East. The Hurricane zone was discovered in July, 2018 and was followed up with 29 drill holes in 2019. Dimensions are currently 575m along-strike, 40m wide and up to 11m thick. The zone is open for expansion along-strike to the east and on most sections. Mineralization is polymetallic and commonly straddles the sub-Athabasca unconformity 320 m below surface. The best intersection to date is 33.9% U3O8 over 8.5m in drill hole LE20-34. Drilling at Cameco Corp.'s Larocque Lake zone on the neighbouring property to the southwest has returned historical intersections of up to 29.9% U3O8 over 7.0m in drill hole Q22-040. Like the nearby Geiger property, Larocque East is located adjacent to the Wollaston-Mudjatik transition zone - a major crustal suture related to most of the uranium deposits in the eastern Athabasca Basin. Importantly, the sandstone cover on the Property is thin, ranging between 140m and 330m in previous drilling. In addition to the Hurricane zone discovery, four historical drill holes have intersected weak uranium mineralization at other locations on the Property to date. Table 1 - Drill 1 2020 Hurricane Zone Results Hole-ID From (m) To (m) Length (m) Radioactivity1,2 Chemical Assays Orientation Location (CPS) U3O8 (%) Ni (%) Co (%) (Azm/Dip) LE20-30(3) 330.0 335.5 5.5 >500 7.1 0.9 0.3 180/-80 Section 4460E incl. 331.0 331.5 0.5 >10,000 3.4 0.1 0.1 and incl. 332.0 333.5 1.5 >20,000 24.0 2.7 0.5 --- LE20-32A(3) 329.5 338.0 8.5 >500 19.6 1.1 0.1 180/-80 Section 4510E incl. 334.5 337.0 2.5 >20,000 63.6 0.4 0.0 incl. 335.0 336.5 1.5 Off-scale5 76.7 0.3 0.0 --- LE20-34(3) 326.0 334.5 8.5 >500 33.9 0.5 0.1 180/-80 Section 4435E incl. 328.0 333.0 5.0 >20,000 57.1 0.7 0.1 incl. 329.5 331.5 2.0 Off-scale5 62.8 0.4 0.1 --- LE20-364 332.5 333.5 1.0 >500 3.7 1.0 0.8 180/-80 Section 4460E incl. 332.5 333.0 0.5 >20,000 5.5 1.3 1.0 --- LE20-384 319.5 327.0 7.5 >500 2.0 0.2 0.2 000/-90 Section 4460E incl. 325.0 325.5 0.5 >20,000 3.5 0.0 0.0 and incl. 326.0 326.5 0.5 >20,000 9.8 0.1 0.2 --- LE20-404 319.5 320.5 1.0 >500 0.1 0.1 0.1 000/-90 Section 4435E and 322.5 326.5 4.0 >500 20.5 1.0 0.0 incl. 323.0 324.5 1.5 >20,000 53.8 2.3 0.0 incl. 323.0 323.5 0.5 Off-scale5 64.9 0.2 0.1 --- LE20-42 326.0 329.0 3.0 >500 0.4 0.2 0.4 000/-90 Section 4410E --- LE20-44 325.5 326.0 0.5 >500 0.2 0.0 0.0 000/-90 Section 4460E and 327.5 329.0 1.5 >500 0.3 0.6 0.7 --- LE20-46 318.0 328.0 10.0 >500 Pending 000/-90 Section 4485E Incl. 323.0 325.0 2.0 >20,000 and 326.0 327.0 1.0 >10,000 --- LE20-48 316.0 327.5 11.5 >500 Pending 000/-90 Section 4485E Incl. 321.0 321.5 0.5 >10,000 and incl. 324.0 327.0 3.0 >10,000 incl. 324.5 325.0 0.5 >20,000 --- LE20-49 320.5 329.5 9.0 >500 Pending 000/-90 Section 4510E incl. 326.5 327.5 1.0 >10,000 --- LE20-51 322.5 330.0 7.5 >500 Pending 000/-90 Section 4510E incl. 325.5 329.0 3.5 >10,000 Incl. 326.0 329.0 3.0 >20,000 --- LE20-52 312.5 313.0 0.5 >500 Pending 000/-90 Section 4435E and 318.5 326.0 7.5 >500 incl. 322.5 325.0 2.5 >10,000 incl. 322.5 324.0 1.5 Off-scale5 --- LE20-53 317.5 328.0 10.5 >500 Pending 000/-90 Section 4410E incl. 324.5 327.5 3.0 >20,000 incl. 326.0 326.5 0.5 Off-scale5 (equal sign)(equal sign)(equal sign) Notes: 1. Radioactivity is total gamma from drill core measured with an RS-125 hand-held spectrometer 2. Measurements of total gamma on drill core are an indication of uranium content, but may not correlate with chemical assays 3. Radioactivity and chemical assays previously disclosed 4. Radioactivity previously disclosed 5. Off-scale radioactivity is defined as exceeding 65,536 cps, the maximum measurable by an RS-125 spectrometer Qualified Person Statement The scientific and technical information contained in this news release was prepared by Andy Carmichael, P.Geo., IsoEnergy's Senior Geologist, who is a "Qualified Person" (as defined in NI 43-101 - Standards of Disclosure for Mineral Projects). Mr. Carmichael has verified the data disclosed. All radioactivity measurements reported herein are total gamma from an RS-125 hand-held spectrometer. As mineralized drill holes at the Hurricane zone are oriented very steeply (-80 to -90 degrees) into a zone of mineralization that is interpreted to be horizontal, the true thickness of the intersections is expected to be greater than or equal to 90% of the core lengths. This news release refers to properties other than those in which the Company has an interest. Mineralization on those other properties is not necessarily indicative of mineralization on the Company's properties. All chemical analyses are completed for the Company by SRC Geoanalytical Laboratories in Saskatoon, SK. For additional information regarding the Company's Larocque East Project, including its quality assurance and quality control procedures, please see the Technical Report dated effective May 15, 2019 on the Company's profile at www.sedar.com. About IsoEnergy IsoEnergy is a well-funded uranium exploration and development company with a portfolio of prospective projects in the eastern Athabasca Basin in Saskatchewan, Canada. The Company recently discovered the high-grade Hurricane Zone of uranium mineralization on its 100% owned Larocque East property in the Eastern Athabasca Basin. IsoEnergy is led by a Board and Management team with a track record of success in uranium exploration, development and operations. The Company was founded and is supported by the team at its major shareholder, NexGen Energy Ltd. Neither the TSX Venture Exchange nor its Regulations Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release. This news release shall not constitute an offer to sell or a solicitation of any offer to buy any securities, nor shall there be any sale of any securities in any jurisdiction in which such offer, solicitation or sale would be unlawful. The securities referenced herein have not been, nor will they be, registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act"), and such securities may not be offered or sold within the United States absent registration under the U.S. Securities Act or an applicable exemption from the registration requirements thereunder. Forward-Looking Information The information contained herein contains "forward-looking statements" within the meaning of the United States Private Securities Litigation Reform Act of 1995 and "forward-looking information" within the meaning of applicable Canadian securities legislation. "Forward-looking information" includes, but is not limited to, statements with respect to the activities, events or developments that the Company expects or anticipates will or may occur in the future, including, without limitation, planned exploration activities. Generally, but not always, forward-looking information and statements can be identified by the use of words such as "plans", "expects", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates", or "believes" or the negative connotation thereof or variations of such words and phrases or state that certain actions, events or results "may", "could", "would", "might" or "will be taken", "occur" or "be achieved" or the negative connotation thereof. Such forward-looking information and statements are based on numerous assumptions, including among others, that the results of planned exploration activities are as anticipated, the price of uranium, the anticipated cost of planned exploration activities, that general business and economic conditions will not change in a material adverse manner, that financing will be available if and when needed and on reasonable terms, that third party contractors, equipment and supplies and governmental and other approvals required to conduct the Company's planned exploration activities will be available on reasonable terms and in a timely manner. Although the assumptions made by the Company in providing forward-looking information or making forward-looking statements are considered reasonable by management at the time, there can be no assurance that such assumptions will prove to be accurate. Forward-looking information and statements also involve known and unknown risks and uncertainties and other factors, which may cause actual events or results in future periods to differ materially from any projections of future events or results expressed or implied by such forward-looking information or statements, including, among others: negative operating cash flow and dependence on third party financing, uncertainty of additional financing, no known mineral reserves or resources, the limited operating history of the Company, the influence of a large shareholder, alternative sources of energy and uranium prices, aboriginal title and consultation issues, reliance on key management and other personnel, actual results of exploration activities being different than anticipated, changes in exploration programs based upon results, availability of third party contractors, availability of equipment and supplies, failure of equipment to operate as anticipated; accidents, effects of weather and other natural phenomena and other risks associated with the mineral exploration industry, environmental risks, changes in laws and regulations, community relations and delays in obtaining governmental or other approvals. Although the Company has attempted to identify important factors that could cause actual results to differ materially from those contained in the forward-looking information or implied by forward-looking information, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that forward-looking information and statements will prove to be accurate, as actual results and future events could differ materially from those anticipated, estimated or intended. Accordingly, readers should not place undue reliance on forward-looking statements or information. The Company undertakes no obligation to update or reissue forward-looking information as a result of new information or events except as required by applicable securities laws SOURCE IsoEnergy Ltd. View original content to download multimedia: http://www.newswire.ca/en/releases/archive/March2020/18/c2609.html -0- 03/18/2020 /For further information: Craig Parry, Chief Executive Officer, IsoEnergy Ltd., +1 778 379 3211, cparry(at)isoenergy.ca, www.isoenergy.ca; Investor Relations: Kin Communications, +1 604 684 6730, iso(at)kincommunications.com, www.isoenergy.ca/ /Web Site: www.isoenergy.ca / (ISENF ISO.) CO: IsoEnergy Ltd. ST: British Columbia IN: OIL UTI OTC MNG SU: -30- (92.0) 2.0 (7.0) 318.6 (7.0) --- --- Net earnings including non- controlling interests 1,531.4 245.0 (275.0) 7.0 (23.0) 1,508.4 (22.0) (equal sign)(equal sign)(equal sign) (equal sign)(equal sign)(equal sign) Net loss attributable to non- controlling interests 9.4 (2.0) 15.0 (12.0) 1.0 10.4 --- --- Net earnings attributable to shareholders of the Corporation 1,540.8 243.0 (260.0) (5.0) (22.0) 1,518.8 (22.0) (equal sign)(equal sign)(equal sign) (equal sign)(equal sign)(equal sign) (1) Depreciation and interest expenses are based on our assessment of Fiscal 2020 impact. (equal sign)(equal sign)(equal sign)
In order to facilitate the understanding of our financial performance, we have adjusted some of our previously reported performance measures. All adjustments related to IFRS 16 are clearly identified and are based on the calculations presented in the tables above.
Exchange Rate Data
We use the US dollar as our reporting currency, which provides more relevant information given the predominance of our operations in the United States.
The following table sets forth information about exchange rates based upon closing rates expressed as US dollars per comparative currency unit:
16-week periods ended 40-week periods ended February 2, 2020 February 3, 2019 February 2, 2020 February 3, 2019 Average for period Canadian dollar 0.7601 0.7542 0.7558 0.7622 Norwegian krone 0.1103 0.1177 0.1122 0.1204 Swedish krone 0.1046 0.1107 0.1045 0.1118 Danish krone 0.1484 0.1528 0.1490 0.1550 Zloty 0.2597 0.2653 0.2592 0.2689 Euro 1.1090 1.1400 1.1126 1.1560 Ruble 0.0158 0.0150 0.0156 0.0153
Summary Analysis of Consolidated Results for the Third Quarter and First Three Quarters of Fiscal 2020
The following table highlights certain information regarding our operations for the 16 and 40-week periods ended February 2, 2020, and February 3, 2019. CAPL refers to CrossAmerica Partners LP.
16-week periods ended 40-week periods ended (in millions of US dollars, unless otherwise stated) February 2, February 3, Variation February 2, February 3, Variation 2020 2019 % 2020 2019 % Statement of Operations Data: Merchandise and service revenues(1): United States 3,197.0 3,133.4 2.0 8,484.6 8,311.9 2.1 Europe 419.0 405.3 3.4 1,103.4 1,114.5 (1.0) Canada 672.0 618.3 8.7 1,816.0 1,686.9 7.7 CAPL 22.0 (100.0) 29.6 75.7 (60.9) Elimination of intercompany transactions with CAPL (0.7) (100.0) (0.8) (2.2) (63.6) Total merchandise and service revenues 4,288.0 4,178.3 2.6 11,432.8 11,186.8 2.2 Road transportation fuel revenues: United States 8,100.2 7,740.2 4.7 21,420.7 21,968.5 (2.5) Europe 2,324.4 2,396.6 (3.0) 6,120.7 6,420.6 (4.7) Canada 1,423.3 1,377.3 3.3 3,755.5 3,924.6 (4.3) CAPL 268.2 511.4 (47.6) 1,365.7 1,775.5 (23.1) Elimination of intercompany transactions with CAPL (50.5) (93.5) (46.0) (288.0) (364.7) (21.0) Total road transportation fuel revenues 12,065.6 11,932.0 1.1 32,374.6 33,724.5 (4.0) Other revenues(2): United States 13.1 6.4 104.7 28.1 16.9 66.3 Europe 219.4 380.0 (42.3) 536.3 1,023.7 (47.6) Canada 6.6 7.3 (9.6) 16.7 19.7 (15.2) CAPL 12.8 15.3 (16.3) 65.6 45.7 43.5 Elimination of intercompany transactions with CAPL (1.3) (4.3) (69.8) (8.9) (13.0) (31.5) Total other revenues 250.6 404.7 (38.1) 637.8 1,093.0 (41.6) Total revenues 16,604.2 16,515.0 0.5 44,445.2 46,004.3 (3.4) Merchandise and service gross profit(1): United States 1,087.7 1,055.0 3.1 2,884.4 2,809.9 2.7 Europe 177.2 169.5 4.5 460.6 465.6 (1.1) Canada 221.4 204.6 8.2 596.0 569.3 4.7 CAPL 5.4 (100.0) 6.8 18.4 (63.0) Elimination of intercompany transactions with CAPL (0.6) (100.0) (0.8) (1.9) (57.9) Total merchandise and service gross profit 1,486.3 1,433.9 3.7 3,947.0 3,861.3 2.2 Road transportation fuel gross profit: United States 856.9 914.5 (6.3) 2,227.8 2,021.5 10.2 Europe 277.4 272.7 1.7 725.8 755.1 (3.9) Canada 112.9 116.5 (3.1) 280.8 310.3 (9.5) CAPL 10.5 28.1 (62.6) 57.5 81.3 (29.3) Total road transportation fuel gross profit 1,257.7 1,331.8 (5.6) 3,291.9 3,168.2 3.9 Other revenues gross profit(2): United States 13.1 6.4 104.7 28.1 16.9 66.3 Europe 40.6 43.5 (6.7) 103.8 117.8 (11.9) Canada 6.6 7.3 (9.6) 16.6 19.7 (15.7) CAPL 12.9 15.3 (15.7) 65.7 45.7 43.8 Elimination of intercompany transactions with CAPL (1.3) (4.3) (69.8) (8.9) (13.0) (31.5) Total other revenues gross profit 71.9 68.2 5.4 205.3 187.1 9.7 Total gross profit 2,815.9 2,833.9 (0.6) 7,444.2 7,216.6 3.2 Operating, selling, administrative and general expenses Excluding CAPL 1,607.3 1,682.9 (4.5) 4,044.5 4,262.2 (5.1) CAPL 8.3 20.5 (59.5) 46.8 58.9 (20.5) Elimination of intercompany transactions with CAPL (1.1) (4.8) (77.1) (9.2) (14.5) (36.6) Total Operating, selling, administrative andgeneral expenses 1,614.5 1,698.6 (5.0) 4,082.1 4,306.6 (5.2) Restructuring costs 1.7 1.6 6.2 3.6 7.9 (54.4) Gain on disposal of property and equipment and other assets (74.9) (6.5) 1,052.3 (63.8) (5.8) 1,000.0 Depreciation, amortization and impairment Excluding CAPL 398.4 286.1 39.3 975.5 703.6 38.6 CAPL 7.7 19.1 (59.7) 53.9 125.6 (57.1) Total depreciation, amortization and impairment 406.1 305.2 33.1 1,029.4 829.2 24.1 Operating income Excluding CAPL 862.1 825.9 4.4 2,368.1 2,118.2 11.8 CAPL 6.6 9.2 (28.3) 25.3 (39.1) (164.7) Elimination of intercompany transactions with CAPL (0.2) (0.1) 100.0 (0.5) (0.4) 25.0 Total operating income 868.5 835.0 4.0 2,392.9 2,078.7 15.1 Net financial expenses 84.2 90.1 (6.5) 231.3 241.5 (4.2) Net earnings including non-controlling interests 663.9 611.8 8.5 1,779.3 1,531.4 16.2 Net (earnings) loss attributable to non- controlling interests (4.0) 0.3 (1,433.3) (2.0) 9.4 (121.3) Net earnings attributable to shareholders of the Corporation 659.9 612.1 7.8 1,777.3 1,540.8 15.3 Per Share Data: Basic net earnings per share (dollars per share) 0.59 0.54 9.3 1.58 1.37 15.3 Diluted net earnings per share (dollars per share) 0.59 0.54 9.3 1.58 1.36 16.2 Adjusted diluted net earnings per share (dollars per share)(13) 0.52 0.53 (1.9) 1.51 1.38 9.4 Other Operating Data - excluding CAPL: Merchandise and service gross margin(1): Consolidated 34.7% 34.4% 0.3 34.6% 34.6% United States 34.0% 33.7% 0.3 34.0% 33.8% 0.2 Europe 42.3% 41.8% 0.5 41.7% 41.8% (0.1) Canada 32.9% 33.1% (0.2) 32.8% 33.7% (0.9) Growth of same-store merchandise revenues(3): United States(4) 3.0% 4.5% (1.5) 2.9% 4.4% (1.5) Europe 2.1% 2.9% (0.8) 2.1% 4.8% (2.7) Canada(4) 4.2% 4.9% (0.7) 2.3% 5.5% (3.2) Road transportation fuel gross margin: United States (cents per gallon)(4) 27.04 29.42 (8.1) 27.37 25.12 9.0 Europe (cents per liter) 8.50 8.30 2.4 8.43 8.72 (3.3) Canada (CA cents per liter)(4) 8.06 8.11 (0.6) 7.81 8.45 (7.6) Total volume of road transportation fuel sold: United States (millions of gallons) 3,290.2 3,263.9 0.8 8,482.6 8,466.3 0.2 Europe (millions of liters) 3,264.6 3,287.3 (0.7) 8,611.4 8,660.6 (0.6) Canada (millions of liters) 1,848.9 1,912.0 (3.3) 4,779.9 4,839.0 (1.2) Growth of (decrease in) same-store road transportation fuel volume: United States(4) 0.1% 0.8% (0.7) 0.4% 0.9% (0.5) Europe(4) (0.8%) (1.4%) 0.6 (1.0%) (0.6%) (0.4) Canada(4) (3.1%) (0.6%) (2.5) (1.0%) (1.9%) 0.9 (in millions of US dollars, unless otherwise stated) February 2, 2020 April 28, 2019 Variation $ Balance Sheet Data(5): Total assets (including $1.1 billion for CAPL as at April 28, 2019) 24,838.9 25,033.0 (194.1) Interest-bearing debt (including $696.0 million for CAPL as at April 28, 2019)(6) 9,010.8 9,575.3 (564.5) Equity attributable to shareholders of the Corporation 9,994.3 8,913.7 1,080.6 Indebtedness Ratios(7): Net interest-bearing debt/total capitalization(6)(8) 0.42 : 1 0.48 : 1 Leverage ratio(9) 1.77 : 1 2.09 : 1 Adjusted leverage ratio(10) 1.84 : 1 2.18 : 1 Returns(7): Return on equity(11) 22.0% 21.9% Return on capital employed(12) 13.7% 12.6% ---
Includes revenues derived from franchise fees, royalties, suppliers' rebates on some purchases made by franchisees and licensees, as well as from (1) wholesale of merchandise. Includes revenues from the rental of assets and from the sale of aviation fuel, energy for stationary engines and marine fuel (2) (until November 30, 2018). Does not include services and other revenues (as described in footnotes 1 and 2 above). Growth in Canada and in Europe is calculated based on local (3) currencies. (4) For company-operated stores only. (5) The balance sheet data as at April 28, 2019, has been adjusted for the estimated pro forma impact of IFRS 16. This measure is presented including the following balance sheet accounts: Current portion of long- term debt, Long-term debt, Current portion of lease liabilities, and Lease (6) liabilities. Until November 2019, these measures are presented as if our investment in CAPL was reported using the equity method as we believe it allows a more relevant presentation of the underlying (7) performance of the Corporation. This measure is presented for information purposes only and represents a measure of financial condition used especially in financial circles. It represents the following calculation: interest-bearing debt, net of cash and cash equivalents and temporary investments divided by the addition of shareholders' equity and interest-bearing debt, net of cash and cash equivalents and temporary investments. It does not have a standardized meaning prescribed by IFRS and therefore may not be comparable to similar measures presented by other public corporations. For the purpose of this calculation, until November 2019, CAPL's long-term debt was excluded as it was a non-recourse debt to the Corporation, as referenced in footnote 7. This performance measure, for the 52- week period ended April 28, 2019, has been adjusted for the estimated pro forma impact of IFRS 16 and the previously disclosed measure was 0.39 : 1. We believe this measure is useful to (8) investors and analysts. This measure is presented for information purposes only and represents a measure of financial condition used especially in financial circles. It represents the following calculation: interest-bearing debt, net of cash and cash equivalents and temporary investments divided by EBITDA (Earnings before Interest, Tax, Depreciation, Amortization and Impairment) adjusted for specific items. It does not have a standardized meaning prescribed by IFRS and therefore may not be comparable to similar measures presented by other public corporations. For the purpose of this calculation, until November 2019, CAPL's long-term debt was excluded as it was a non-recourse debt to the Corporation, as referenced in footnote 7. This performance measure, for the 52- week period ended April 28, 2019, has been adjusted for the estimated pro forma impact of IFRS 16 and the previously disclosed measure was 1.61 : 1. We believe this measure is useful to (9) investors and analysts. This measure is presented for information purposes only and represents a measure of financial condition used especially in financial circles. It represents the following calculation:interest-bearing debt plus the product of eight times rent expense, net of cash and cash equivalents and temporary investments divided by EBITDAR (Earnings before Interest, Tax, Depreciation, Amortization, Impairment and Rent expense) adjusted for specific items. It does not have a standardized meaning prescribed by IFRS and therefore may not be comparable to similar measures presented by other public corporations. For the purpose of this calculation, until November 2019, CAPL's interest bearing debt was excluded as it was a non-recourse debt to the Corporation, as referenced in footnote 7. This performance measure, for the 52-week period ended April 28, 2019, has been adjusted for the estimated pro forma impact of IFRS 16 and the previously disclosed measure was 2.29 : 1. We believe this measure is useful to investors and (10) analysts. This measure is presented for information purposes only and represents a measure of performance used especially in financial circles. It represents the following calculation: net earnings divided by average equity for the corresponding period. It does not have a standardized meaning prescribed by IFRS and therefore may not be comparable to similar measures presented by other public corporations. This performance measure, for the 52-week period ended April 28, 2019, has been adjusted for the estimated pro forma impact of IFRS 16 and the previously disclosed measure was 22.3%. We believe this measure is useful to investors and (11) analysts. This measure is presented for information purposes only and represents a measure of performance used especially in financial circles. It represents the following calculation: earnings before income taxes and interests divided by average capital employed for the corresponding period. Capital employed represents total assets less short-term liabilities not bearing interests. It does not have a standardized meaning prescribed by IFRS and therefore may not be comparable to similar measures presented by other public corporations. This performance measure, for the 52-week period ended April 28, 2019, has been adjusted for the estimated pro forma impact of IFRS 16 and the previously disclosed measure was 14.1%. We believe this measure is (12) useful to investors and analysts. These performance measures, for the 16 and 40-week periods ended February 3, 2019, have been adjusted for the estimated pro forma impact of IFRS 16 and the previously reported adjusted net earnings per share were $0.54 and (13) $1.40, respectively.
Revenues
Our revenues were $16.6 billion for the third quarter of fiscal 2020, up by $89.2 million, an increase of 0.5% compared with the corresponding quarter of fiscal 2019, mainly attributable to a higher average road transportation fuel selling price and to organic growth, partly offset by the disposal of our interests in CAPL, which had an impact of approximately $221.0 million, as well as by the net negative impact from the translation of revenues from our Canadian and European operations into US dollars, which had a net negative impact of approximately $101.0 million.
For the first three quarters of fiscal 2020, our revenues decreased by $1.6 billion or 3.4% compared with the first three quarters of fiscal 2019, mainly attributable to a lower road transportation fuel average selling price, the net negative impact from the translation of revenues of our Canadian and European operations into US dollars, and the disposal of our interests in CAPL and our marine fuel business, partly offset by organic growth.
Merchandise and service revenues
Total merchandise and service revenues for the third quarter of fiscal 2020 were $4.3 billion, an increase of $109.7 million compared with the corresponding quarter of fiscal 2019. Excluding CAPL's revenues, as well as the net negative impact from the translation of our Canadian and European operations into US dollars, merchandise and service revenues increased by approximately $137.0 million or 3.3%. This increase is primarily attributable to continued strong organic growth while cycling against a strong third quarter last year. Same-store merchandise revenues increased by 3.0% in the United States, by 2.1% in Europe and by 4.2% in Canada, driven by the success of our rebranding activities, improvements made to our offering, as well as by our various initiatives to drive traffic in our stores.
For the first three quarters of fiscal 2020, the growth in merchandise and service revenues was $246.0 million. Excluding CAPL's revenues, as well as the net negative impact from the translation of our Canadian and European operations into US dollars, merchandise and service revenues increased by approximately $355.0 million or 3.2%. This increase is primarily attributable to organic growth. Same-store merchandise revenues increased by 2.9% in the United States, by 2.1% in Europe and by 2.3% in Canada.
Road transportation fuel revenues
Total road transportation fuel revenues for the third quarter of fiscal 2020 were $12.1 billion, an increase of $133.6 million compared with the corresponding quarter of fiscal 2019. Excluding CAPL's revenues, as well as the net negative impact from the translation of revenues of our Canadian and European operations into US dollars, road transportation fuel revenues increased by approximately $414.0 million or 3.6%. This increase is attributable to a net higher average road transportation fuel selling price, which had a net positive impact of approximately $414.0 million. Same-store road transportation fuel volume in the United States increased by 0.1%. In Europe and Canada, same-store road transportation fuel volume decreased by 0.8%, and 3.1%, both decreases attributable to the competitive landscape.
For the first three quarters of fiscal 2020, the road transportation fuel revenues decreased by $1.3 billion. Excluding CAPL's revenues, as well as the net negative impact from the translation of our Canadian and European operations into US dollars, road transportation fuel revenues decreased by approximately $653.0 million or 2.0%. This decrease is mostly attributable to the impact of a lower average road transportation fuel selling price, which had a negative impact of approximately $611.0 million. Same-store road transportation fuel volume increased by 0.4% in the United States, while it decreased by 1.0% in Europe and Canada, mainly attributable to similar factors as those of the third quarter.
The following table shows the average selling price of road transportation fuel of our company-operated stores in our various markets for the last eight quarters, starting with the fourth quarter of the fiscal year ended April 29, 2018:
Quarter 4th 1st 2nd 3rd Weighted average --- 52-week period ended February 2, 2020 --- United States (US dollars per gallon) - excluding CAPL 2.51 2.66 2.55 2.51 2.55 Europe (US cents per liter) 74.59 77.35 70.86 73.92 74.15 Canada (CA cents per liter) 103.45 111.16 105.14 103.47 10 5.70 --- 52-week period ended February 3, 2019 --- United States (US dollars per gallon) - excluding CAPL 2.51 2.76 2.72 2.42 2.59 Europe (US cents per liter) 78.32 75.07 80.56 75.28 77.21 Canada (CA cents per liter) 110.39 117.95 115.22 97.59 109.34
Other revenues
Total other revenues for the third quarter and first three quarters of fiscal 2020 were $250.6 million and $637.8 million, respectively, a decrease of $154.1 million and $455.2 million compared with the corresponding periods of fiscal 2019. Excluding CAPL's revenues, as well as the net negative impact from the translation of our Canadian and European operations into US dollars, other revenues decreased by approximately $139.0 million and by $427.0 million in the third quarter and first three quarters of fiscal 2020, respectively, primarily driven by the disposal of our marine fuel business during the third quarter of fiscal 2019, which had an impact of approximately $80.0 million, and $267.0 million, respectively, as well as by lower aviation fuel revenues, which had a minimal impact on gross profit.
Gross profit
Our gross profit was $2.8 billion for the third quarter of fiscal 2020, down by $18.0 million, or 0.6% compared with the corresponding quarter of fiscal 2019, mainly attributable to lower road transportation fuel gross margin in the U.S., the disposal of our interests in CAPL, which had an impact of approximately $22.0 million, and to the net negative impact from the translation of our Canadian and European operations into US dollars, which had an impact of approximately $15.0 million, partly offset by organic growth.
For the first three quarters of fiscal 2020, our gross profit increased by $227.6 million or 3.2% compared with the first three quarters of fiscal 2019, mainly attributable to higher fuel margins and to organic growth, partly offset by the net negative impact from the translation of our Canadian and European operations into US dollars.
Merchandise and service gross profit
In the third quarter of fiscal 2020, our merchandise and service gross profit was $1.5 billion, an increase of $52.4 million compared with the corresponding quarter of fiscal 2019. Excluding CAPL's gross profit, as well as the net negative impact from the translation of our Canadian and European operations into US dollars, merchandise and service gross profit increased by approximately $61.0 million or 4.2%, mainly attributable to organic growth. Our gross margin increased by 0.3% in the United States to 34.0%, and by 0.5% in Europe to 42.3%. These performances reflect changes in our product mix towards higher margin categories. In Canada, our gross margin decreased by 0.2% to 32.9%, mainly as a result of the conversion of our Esso stores from the agent model to the corporate model, partly offset by improved supply conditions.
During the first three quarters of fiscal 2020, our merchandise and service gross profit was $3.9 billion, an increase of $85.7 million compared with the first three quarters of fiscal 2019. Excluding CAPL's gross profit, as well as the net negative impact from the translation of our Canadian and European operations into US dollars, merchandise and service gross profit increased by approximately $123.0 million or 3.2%. The gross margin was 34.0% in the United States, an increase of 0.2%, 41.7% in Europe, a decrease of 0.1%, while in Canada the gross margin was 32.8%, a decrease of 0.9%.
Road transportation fuel gross profit
In the third quarter of fiscal 2020, our road transportation fuel gross profit was $1.3 billion, a decrease of $74.1 million compared with the corresponding quarter of fiscal 2019. Excluding CAPL's gross profit, as well as the net negative impact from the translation of our Canadian and European operations into US dollars, our third quarter of fiscal 2020 road transportation fuel gross profit decreased by approximately $47.0 million or 3.6%. Our road transportation fuel gross margin was strong at 27.04¢ per gallon in the United States, a decrease of 2.38¢ per gallon, compared to the markedly high fuel margins of the same quarter last year. In Europe, the road transportation fuel gross margin was US 8.50¢ per liter, an increase of US 0.20¢ per liter, while in Canada, it was CA 8.06¢ per liter, a decrease of CA 0.05¢ per liter.
During the first three quarters of fiscal 2020, our road transportation fuel gross profit was $3.3 billion, an increase of $123.7 million compared with the first three quarters of fiscal 2019. Excluding CAPL's gross profit, as well as the net negative impact from the translation of our Canadian and European operations into US dollars, road transportation fuel gross profit increased by approximately $190.0 million or 6.2%, as a result of higher fuel margins. The road transportation fuel gross margin was 27.37¢ per gallon in the United States, US 8.43¢ per liter in Europe, and CA 7.81¢ per liter in Canada.
The road transportation fuel gross margin of our company-operated stores in the United States and the impact of expenses related to electronic payment modes for the last eight quarters, starting with the fourth quarter of the fiscal year ended April 29, 2018, were as follows:
(US cents per gallon) Quarter 4th 1st 2nd 3rd Weighted average --- 52-week period ended February 2, 2020 Before deduction of expenses related to electronic payment modes 18.51 26.86 28.29 27.04 25.30 Expenses related to electronic payment modes(1) 4.40 4.70 4.63 4.54 4.60 After deduction of expenses related to electronic payment modes 14.11 22.16 23.66 22.50 20.70 --- 52-week period ended February 3, 2019 Before deduction of expenses related to electronic payment modes 17.29 22.70 21.88 29.42 23.30 Expenses related to electronic payment modes(1) 3.86 4.67 4.55 4.31 4.30 After deduction of expenses related to electronic payment modes 13.43 18.03 17.33 25.11 19.00 ---
(1) Please note that this information has been restated to reflect the cost of electronic payment expenses per corporate-store road transportation fuel gallons instead of per total road transportation fuel gallons.
As demonstrated by the table above, road transportation fuel margins in the United States can be volatile from one quarter to another but tend to be relatively stable over longer periods. Margin volatility and expenses related to electronic payment modes are not as significant in Europe and Canada.
Other revenues gross profit
In the third quarter and first three quarters of fiscal 2020, other revenues gross profit was $71.9 million and $205.3 million, respectively, an increase of $3.7 million and $18.2 million, compared with the corresponding periods of fiscal 2019, respectively. Excluding CAPL's gross profit, as well as the net negative impact from the translation of our Canadian and European operations into US dollars, other revenues gross profit increased by approximately $5.0 million and $1.0 million in the third quarter and first three quarters of fiscal 2020, respectively.
Operating, selling, administrative and general expenses ("expenses")
For the third quarter and first three quarters of fiscal 2020, expenses decreased by 5.0% and 5.2%, respectively, compared with the corresponding periods of fiscal 2019. If we exclude decrease in rent from the transition to IFRS 16 and certain items that are not considered indicative of future trends, expenses increased by 3.7% and 3.0%, respectively.
16-week period ended February 2, 2020 40-week period ended February 2, 2020 Total variance, as reported (5.0%) (5.2%) --- Adjusted for: Decrease in rent expense from transition to IFRS 16 6.6% 6.4% Decrease from settlements and reserves adjustments for specific elements recognized to earnings of fiscal 2019(1) 1.5% 0.6% Decrease in CAPL's expenses 0.7% 0.3% Decrease from the net impact of foreign exchange translation 0.6% 1.0% Increase from higher electronic payment fees, excluding acquisitions (0.6%) (0.3%) Acquisition costs recognized to earnings of fiscal 2020 (0.2%) (0.1%) Disposal of our marine fuel business 0.1% 0.1% Compensatory payment to CAPL for divestiture of assets recognized in fiscal 2019 0.2% --- Remaining variance 3.7% 3.0% (equal sign)(equal sign)(equal sign)
During the third quarter of fiscal 2019, we settled various claims and adjusted our reserves in connection with specific events of the quarter, which had a pre-tax negative impact of $24.2 (1) million on our earnings.
Excluding the conversion of our Esso stores from the agent model to the corporate model, the remaining variance for the third quarter and first three quarters of fiscal 2020 would have been 3.4% and 2.5%, respectively. Growth in expenses, amongst other items, was driven by normal inflation, higher labor costs from minimum wage increases in certain regions as well as from the challenging labor market in North America, and incremental investments in our stores and in data analytics to support our strategic initiatives. We continue to rigorously focus on controlling costs throughout our organization, while ensuring we maintain the quality of service we offer to our customers.
Earnings before interest, taxes, depreciation, amortization and impairment (EBITDA) and adjusted EBITDA
During the third quarter of fiscal 2020, EBITDA increased from $1.1 billion to $1.3 billion, an increase of 11.5% compared with the same quarter last year. Excluding the specific items shown in the table below from EBITDA of the third quarter of fiscal 2020 and of the corresponding period of fiscal 2019, the adjusted EBITDA for the third quarter of fiscal 2020 decreased by $35.6 million or 2.9% compared with the corresponding period of the previous fiscal year, mainly from lower road transportation fuel gross margins in the U.S., the higher level of initiatives throughout the organization, the disposal of our interests in CAPL, as well as from the net negative impact from the translation of our Canadian and European operations into US dollars, partly offset by organic growth. The variation in exchange rates had a net negative impact of approximately $5.0 million.
During the first three quarters of fiscal 2020, EBITDA increased from $2.9 billion to $3.4 billion, a growth of 17.5% compared with the same period last year. Excluding the specific items shown in the table below from EBITDA of the first three quarters of fiscal 2020 and of fiscal 2019, the adjusted EBITDA for the first three quarters of fiscal 2020 increased by $152.0 million or 4.8% compared with the corresponding period of the previous fiscal year, mainly attributable to higher road transportation fuel margins in the U.S. and Europe, and to organic growth. The variation in exchange rates had a net negative impact of approximately $32.0 million.
It should be noted that EBITDA and adjusted EBITDA are not performance measures defined by IFRS, but we, as well as investors and analysts, consider that those performance measures facilitate the evaluation of our ongoing operations and our ability to generate cash flows to fund our cash requirements, including our capital expenditures program and payment of dividends. Note that our definition of these measures may differ from the one used by other public corporations.
16-week periods ended 40-week periods ended (in millions of US dollars) February 2, February 3, February 2, February 3, 2020 2019 2020 2019 --- Net earnings including non- controlling interests, as reported 663.9 611.8 1,779.3 1,531.4 --- Add: Income taxes 125.5 140.4 400.5 325.6 Net financial expenses 84.2 90.1 231.3 241.5 Depreciation, amortization and impairment 406.1 305.2 1,029.4 829.2 --- EBITDA 1,279.7 1,147.5 3,440.5 2,927.7 --- Adjusted for: Net gain on the disposal of the Corporation's interests in CAPL (61.5) (61.5) EBITDA attributable to non- controlling interests (14.0) (21.1) (64.6) (61.3) Acquisition costs 2.9 0.6 3.9 1.8 Restructuring costs attributable to shareholders of the Corporation 1.7 1.6 3.6 7.9 Gain on the disposal of the marine fuel business (3.2) (3.2) Compensatory payment to CAPL for divestiture of assets, net of non-controlling interests 5.0 --- Adjusted EBITDA, as previously reported 1,208.8 1,125.4 3,321.9 2,877.9 (equal sign)(equal sign)(equal sign) Estimated pro forma impact from transition to IFRS 16 attributable to shareholders of the Corporation 119.0 292.0 --- Adjusted EBITDA 1,208.8 1,244.4 3,321.9 3,169.9 (equal sign)(equal sign)(equal sign)
Depreciation, amortization and impairment ("depreciation")
For the third quarter and first three quarters of fiscal 2020, our depreciation expense increased by $100.9 million and $200.2 million, respectively. Excluding CAPL's results, as well as the $55.0 million impairment charge on CAPL's goodwill recorded in the first quarter of fiscal 2019, the depreciation expense increased by $112.3 million and by $271.9 million for the third quarter and first three quarters of fiscal 2020, respectively, mainly driven by the additional depreciation expense arising from right-of-use assets due to the adoption of IFRS 16, which had an impact of approximately $108.0 million and $272.0 million.
Net financial expenses
Net financial expenses for the third quarter of fiscal 2020 were $84.2 million, a decrease of $5.9 million compared with the third quarter of fiscal 2019. Excluding the items shown in the table below, net financial expenses decreased by $19.3 million, mainly attributable to our lower average long-term debt following the significant repayments made.
Net financial expenses for the first three quarters of fiscal 2020 were $231.3 million, a decrease of $10.2 million compared with the first three quarters of fiscal 2019. Excluding the items shown in the table below, net financial expenses for the first three quarters of fiscal 2020 decreased by $55.7 million for similar factors as those of the third quarter.
16-week periods ended 40-week periods ended (in millions of US dollars) February 2, 2020 February 3, 2019 February 2, 2020 February 3, 2019 --- Net financial expenses, as reported 84.2 90.1 231.3 241.5 --- Adjusted for: Net foreign exchange gain 5.4 1.5 10.7 4.2 CAPL's financial expenses (4.8) (7.5) (25.6) (21.6) Estimated pro forma impact from transition to IFRS 16 20.0 48.0 --- Net financial expenses excluding items above 84.8 104.1 216.4 272.1 (equal sign)(equal sign)(equal sign)
Income taxes
The income tax rate for the third quarter of fiscal 2020 was 15.9% compared with 18.7% for the corresponding period of fiscal 2019. The income tax rate for the third quarter of fiscal 2020 includes a net tax benefit of $29.0 million derived from the release of deferred tax assets valuation allowance following the disposal of our interests in CAPL. Excluding this adjustment, the income tax rate would have been 19.6% for the third quarter of fiscal 2020, an increase compared to the third quarter of fiscal 2019, stemming from the impact of a different mix in our earnings across the various jurisdictions in which we operate.
For the first three quarters of fiscal 2020 the income tax rate was 18.4% compared with 17.5% for the first three quarters of fiscal 2019. Excluding the adjustments below, the income tax rate would have been 19.6% for the first three quarters of fiscal 2020, an increase compared to the first three quarters of fiscal 2019, for similar reasons as the quarter.
16-week periods ended 40-week periods ended February 2, 2020 February 3, 2019 February 2, 2020 February 3, 2019 Income tax, as reported 15.9% 18.7% 18.4% 17.5% --- Adjusted for: Release of deferred tax asset valuation allowance 3.7% 1.3% Income tax expense following the Asset Exchange transactions with CAPL (0.1%) Tax benefit stemming from the decrease of the statutory income tax rate in Sweden 0.5% --- Net income tax excluding items above 19.6% 18.7% 19.6% 18.0% (equal sign)(equal sign)(equal sign)
Net earnings attributable to shareholders of the Corporation ("net earnings") and adjusted net earnings attributable to shareholders of the Corporation ("adjusted net earnings")
Net earnings for the third quarter of fiscal 2020 were $659.9 million, compared with $612.1 million for the third quarter of the previous fiscal year, an increase of $47.8 million or 7.8%. Diluted net earnings per share stood at $0.59, compared with $0.54 for the previous year. The translation of revenues and expenses from our Canadian and European operations into US dollars had a net negative impact of approximately $3.0 million on net earnings of the third quarter of fiscal 2020.
Excluding the items shown in the table below from net earnings of the third quarter of fiscal 2020 and fiscal 2019, adjusted net earnings for the third quarter of fiscal 2020 would have been approximately $583.0 million, compared with $602.0 million for the third quarter of fiscal 2019, a decrease of $19.0 million or 3.2%. Adjusted diluted net earnings per share would have been $0.52 for the third quarter of fiscal 2020 compared with $0.53 for the corresponding period of fiscal 2019, a decrease of 1.9%.
For the first three quarters of fiscal 2020, net earnings were $1.8 billion, compared with $1.5 billion for the first three quarters of fiscal 2019, an increase of $236.5 million or 15.3%. Diluted net earnings per share stood at $1.58, compared with $1.36 for the previous year. The translation of revenues and expenses from our Canadian and European operations into US dollars had a net negative impact of approximately $21.0 million on net earnings of the first three quarters of fiscal 2020.
Excluding the items shown in the table below from net earnings of the first three quarters of fiscal 2020 and fiscal 2019, net earnings for the first three quarters of fiscal 2020 would have been approximately $1.7 billion, compared with $1.6 billion for the comparable period of the previous year, an increase of $143.0 million or 9.2%. Adjusted diluted net earnings per share would have been $1.51 for the first three quarters of fiscal 2020, compared with $1.38 for the corresponding period of fiscal 2019, an increase of 9.4%.
The table below reconciles reported net earnings to adjusted net earnings:
16-week periods ended 40-week periods ended (in millions of US dollars) February 2, 2020 February 3, 2019 February 2, 2020 February 3, 2019 --- Net earnings attributable to shareholders of the Corporation, as reported 659.9 612.1 1,777.3 1,540.8 --- Adjusted for: Net gain on the disposal of the Corporation's interests in CAPL (61.5) (61.5) Release of deferred tax asset valuation allowance (29.0) (29.0) Net foreign exchange gain (5.4) (1.5) (10.7) (4.2) Acquisition costs 2.9 0.6 3.9 1.8 Restructuring costs attributable to shareholders of the Corporation 1.7 1.6 3.6 7.9 Income tax expense following the Asset Exchange transactions with CAPL 2.7 Gain on the disposal of the marine fuel business (3.2) (3.2) Impairment charge on CAPL's goodwill 55.0 Tax benefit stemming from the decrease of the statutory income tax rate in Sweden (6.2) Compensatory payment to CAPL for divestiture of assets, net of non-controlling interests 5.0 Tax impact of the items above and rounding 14.4 (0.6) 14.7 (16.9) --- Adjusted net earnings attributable to shareholders of the Corporation, as previously reported 583.0 609.0 1,701.0 1,580.0 (equal sign)(equal sign)(equal sign) Estimated pro forma impact from transition to IFRS 16 (7.0) (22.0) --- Adjusted net earnings attributable to shareholders of the Corporation 583.0 602.0 1,701.0 1,558.0 (equal sign)(equal sign)(equal sign)
It should be noted that adjusted net earnings is not a performance measure defined by IFRS, but we, as well as investors and analysts, consider this measure useful for evaluating the underlying performance of our operations on a comparable basis. Note that our definition of this measure may differ from the one used by other public corporations.
Dividends
During its March 17, 2020 meeting, the Board of Directors approved an increase in the quarterly dividend of CA 0.75¢ per share, bringing it to CA 7.00¢ per share, an increase of 12.0%.
During the same meeting, the Board of Directors declared a quarterly dividend of CA 7.00¢ per share for the third quarter of fiscal 2020 to shareholders on record as at March 26, 2020, and approved its payment for April 9, 2020. This is an eligible dividend within the meaning of the Income Tax Act (Canada).
Profile
Couche-Tard is the leader in the Canadian convenience store industry. In the United States, it is the largest independent convenience store operator in terms of the number of company-operated stores. In Europe, Couche-Tard is a leader in convenience store and road transportation fuel retail in the Scandinavian countries (Norway, Sweden and Denmark), in the Baltic countries (Estonia, Latvia and Lithuania), as well as in Ireland, and has an important presence in Poland.
As of February 2, 2020, Couche-Tard's network comprised 9,799 convenience stores throughout North America, including 8,594 stores with road transportation fuel dispensing. Its North American network consists of 18 business units, including 14 in the United States covering 48 states and 4 in Canada covering all 10 provinces. Approximately 109,000 people are employed throughout its network and at its service offices in North America.
In Europe, Couche-Tard operates a broad retail network across Scandinavia, Ireland, Poland, the Baltics and Russia through 10 business units. As of February 2, 2020, Couche-Tard's network comprised 2,697 stores, the majority of which offer road transportation fuel and convenience products while the others are unmanned automated fuel stations which only offer road transportation fuel. Couche-Tard also offers other products, including aviation fuel and energy for stationary engines. Including employees at branded franchise stores, approximately 24,000 people work in its retail network, terminals and service offices across Europe.
In addition, under licensing agreements, more than 2,380 stores are operated under the Circle K banner in 15 other countries and territories (Cambodia, China, Egypt, Guam, Honduras, Hong Kong, Indonesia, Jamaica, Macau, Mexico, Mongolia, New Zealand, Saudi Arabia, the United Arab Emirates and Vietnam), which brings the worldwide total network to more than 14,800 stores.
For more information on Alimentation Couche-Tard Inc. or to consult its quarterly Consolidated Financial Statements and Management Discussion and Analysis, please visit: https://corpo.couche-tard.com.
The statements set forth in this press release, which describes Couche-Tard's objectives, projections, estimates, expectations or forecasts, may constitute forward-looking statements within the meaning of securities legislation. Positive or negative verbs such as "believe", "can", "shall", "intend", "expect", "estimate", "assume" and other related expressions are used to identify such statements. Couche-Tard would like to point out that, by their very nature, forward-looking statements involve risks and uncertainties such that its results, or the measures it adopts, could differ materially from those indicated in or underlying these statements, or could have an impact on the degree of realization of a particular projection. Major factors that may lead to a material difference between Couche-Tard's actual results and the projections or expectations set forth in the forward-looking statements include the effects of the integration of acquired businesses and the ability to achieve pr ojected synergies, fluctuations in margins on motor fuel sales, competition in the convenience store and retail motor fuel industries, exchange rate variations, and such other risks as described in detail from time to time in the reports filed by Couche-Tard with securities authorities in Canada and the United States. Unless otherwise required by applicable securities laws, Couche-Tard disclaims any intention or obligation to update or revi