Even at the depths of the market crash/credit crunch/recession of 2008-09, most companies stayed healthy as businesses. And by maintaining dividends and financial strength in the hard times, they ensured their recovery in the stock market.

The key as always is business health. And we now have another golden opportunity to assess that for all of our Canadian Edge Portfolio companies, as third-quarter earnings reporting season unfolds.

To be sure, conditions were far from ideal this summer. Economic growth is slow and jagged, particularly in the US. Energy prices weakened, particularly in September. And worries spread that turmoil in Europe’s banking system could find its way to these shores.

That was somewhat offset for some companies by a stronger US dollar, which increased the value of revenue earned on this side of the border. Although credit dried up for some weaker outfits, the strong continue to be able to raise debt capital at the lowest cost in decades.

The upshot is that, while the environment isn’t nearly so dire as in 2008, it’s weak enough that more companies may stumble in the months ahead. Now more than ever, we need to examine the numbers carefully to ensure our favorites are still alive and well.

Happily, the first company to report its third quarter results most definitely is very much in the green: Colabor Group (TSX: GCL, OTC: COLFF). The company’s shares fell as far as USD8 this month because of the combination of a sliding Canadian dollar and worries about the strength of its dividend.

Third-quarter 2011 results released today, however, should set any concerns about the dividend to rest. Total sales surged 38.6 percent and cash flow–management’s primary metric for setting dividends–soared 35.5 percent. The 12-month payout ratio came down to 81 percent, and the company was also able to reduce debt and buy back 308,500 shares of its stock.

The big numbers were primarily due to a series of acquisitions made during the year that extended the food distribution company’s geographic reach and service mix. This continues the success of management’s long-term strategy to build scale, with the goal of better competing in what’s historically been a highly fragmented business in Canada.

More encouragingly, however, the company boosted comparable sales by 3.2 percent, meaning the business returned to growth even without the acquisitions. Meanwhile, cash flow margins rose to 3.25 percent of sales, up from 3.24 percent a year ago and 3.22 percent in the second quarter.

These numbers reflect management’s efforts to boost efficiency, offsetting what remains very tough competition in the food distribution industry. They’re also a reversal of the negative trend of prior quarters, including the second quarter of 2011, when comparable sales slipped 1.1 percent.

Being larger should help Colabor keep this positive momentum going in coming months. According to CEO Gilles Lachance, consumers’ discretionary buying power is still “restricted,” but the company expects increased cash flow as it continues to expand.

There’s roughly CAD14.3 million outstanding of a CAD50 million note maturing Dec. 31, 2011, that’s also convertible into 97.561 common shares of Colabor. Based on the stock’s price this morning, the conversion value is about CAD932, versus par value of CAD1,000.

Unless Colabor common stock can hit CAD10.25 before the end of the year–and bring conversion value back to par value–it’s likely the company will have to come up with at least some cash. That won’t be a problem, however, thanks to the CAD150 million loan facility. Only CAD113.5 million of this is currently drawn, down from CAD116 million at the end of the second quarter, and it doesn’t mature until Apr. 28, 2016. That, in fact, is the next maturity for Colabor, and it gives the company plenty of financial power to pursue more acquisitions.

Colabor’s yield has been well in double digits since disappointing first-quarter earnings this spring, and the stock currently trades at just 18 percent of clearly growing sales. Those numbers indicate investor expectations of a dividend cut, possibly a steep one. The analysts covering the stock have not shared that view, as all five have a 12-month target price more than 10 percent above the current level. But it does give the company a low bar of expectations to hurdle, which these numbers definitely have.

The stock is up in the immediate aftermath of the earnings release this morning. But it may take a few more quarters of good news to get this stock back solidly in double-digit territory. The good news is the dividend appears secure, which pays us richly to wait on recovery. Colabor Group remains a buy up to USD10.

In other news, Atlantic Power Corp (TSX: ATP, NYSE: AT) appears to have locked up the lion’s share of the permanent debt and equity financing needed for its purchase of Capital Power Income LP (TSX: CPA-U, OTC: CPAXF). The company announced this week it intends to sell CAD460 million in seven-year senior notes in a private offering to institutional investors. The offering has obtained a B1 rating from Moody’s, which should ensure a relatively low debt service cost for Atlantic.

This follows last week’s announcement that Atlantic has priced a public offering for 11 million shares of stock at USD13 and CAD13.26, for total proceeds of CAD146 million. Underwriters also have a 30-day overallotment option to purchase an additional 1.65 million shares at the same price, which could produce another CAD21.9 million.

When Atlantic announced the purchase of Capital Power on Jun. 20 it targeted public offerings of approximately CAD423 million of debt and CAD200 million in stock to permanently finance the deal, for a total of CAD623 million. These debt and equity offerings raise CAD606 million, or CAD627.9 million if underwriters exercise the overallotment option.

Atlantic has essentially eliminated the financing risk of this deal. There’s still the matter of the shareholder votes, which will conclude at special meetings on Nov. 1, 2011. I strongly advise Atlantic and Capital investors to vote “yes,” either in person at the meeting or by proxy. The merger will then be consummated in early November. Still yielding nearly 8 percent, Atlantic Power is a buy up to USD16 for those who don’t already own it.

Finally, some readers have apparently received a “mini-tender” offer for their shares of Pembina Pipeline Corp (TSX: PPL, OTC: PBNPF) from a privately held investment firm called TRC Capital. I strongly urge anyone who has to immediately tear up and burn whatever they’ve received.

A quick Google search reveals that TRC is famous for sending out such mini-tenders at times when investors’ fear level is running high. The offer price is always below the current market price, allowing TRC to simply sell any tendered shares for a profit at its leisure. Meanwhile, if the stock’s price drops, TRC can simply walk away. Investors have few if any rights to withdraw shares once tendered.

This may sound immoral, but it is perfectly legal. Mini-tenders are always for less than 5 percent of a company’s common stock, which largely exempts them from regulatory scrutiny in the US. If you fail to read the fine print and fall for TRC’s schemes, you’ll have no legal recourse. And don’t count on your broker to filter out such shenanigans either.

If you want to sell Pembina Pipeline–which I don’t advise–do so on the market as you would any stock. Note that the takeover deal for Daylight Energy Ltd (TSX: DAY, OTC: DAYYF) and Atlantic’s merger with Capital Power are legitimate, and your votes should be “yes.”

Here’s when the rest of the Canadian Edge Portfolio Holdings are scheduled to announce third-quarter earnings, including Atlantic and Daylight. I’ll be analyzing the numbers as they’re announced in Flash Alerts and the November CE.

Conservative Holdings

• AltaGas Ltd (TSX: ALA, OTC: ATGFF)–Oct. 27 (confirmed)
• Artis REIT (TSX: AX-U, OTC: ARESF)–Nov. 8 (confirmed)
• Atlantic Power Corp (TSX: ATP, NYSE: AT)–Nov. 11 (confirmed)
• Bird Construction Inc (TSX: BDT, OTC: BIRDF)–Nov. 8 (estimate)
• Brookfield Renewable Power Fund (TSX: BRC-U, OTC: BRPUF)–Nov. 9 (confirmed)
• Canadian Apartment Properties REIT (TSX: CAR-U, OTC: CDPYF)–Nov. 7 (confirmed)
• Capstone Infrastructure Corp (TSX: CSE, OTC: MCQPF)–Nov. 14 (confirmed)
• Cineplex Inc (TSX: CGX, OTC: CPXGF)–Nov. 11 (estimate)
• Davis + Henderson Income Corp (TSX: DH, OTC: DHIFF)–Nov. 8 (confirmed)
• Extendicare REIT (TSX: EXE-U, OTC: EXETF)–Nov. 4 (estimate)
• IBI Group Inc (TSX: IBG, OTC: IBIBF)–Nov. 10 (confirmed)
• Innergex Renewable Energy Inc (TSX: INE, OTC: INGXF)–Nov. 8 (estimate)
• Just Energy Group Inc (TSX: JE, OTC: JUSTF)–Nov. 9 (estimate)
• Keyera Corp (TSX: KEY, OTC: KEYUF)–Nov. 1 (confirmed)
• Northern Property REIT (TSX: NPR-U, OTC: NPRUF)–Nov. 8 (confirmed)
• Pembina Pipeline Corp (TSX: PPL, OTC: PBNPF)–Nov. 9 (confirmed)
• Provident Energy Ltd (TSX: PVE, NYSE: PVX)–Nov. 10 (estimate)
• RioCan REIT (TSX: REI-U, OTC: RIOCF)–Nov. 7 (confirmed)
• TransForce Inc (TSX: TFI, OTC: TFIFF)–Nov. 1 (confirmed)

Aggressive Holdings

• Acadian Timber Corp (TSX: ADN, OTC: ACAZF)–Oct. 27 (confirmed)
• Ag Growth International Inc (TSX: AFN, OTC: AGGZF)–Nov. 14 (confirmed)
• ARC Resources Ltd (TSX: ARX, OTC: AETUF)–Nov. 1 (estimate)
• Chemtrade Logistics Income Fund (TSX: CHE-U, OTC: CGIFF)– Nov. 10 (estimate)
• Daylight Energy Ltd (TSX: DAY, OTC: DAYYF)–Nov. 3 (estimate)
• EnerCare Inc (TSX: ECI, OTC: CSUWF)–Nov. 8 (estimate)
• Enerplus Corp (TSX: ERF, NYSE: ERF)–Nov. 10 (confirmed)
• Newalta Corp (TSX: NAL, OTC: NWLTF)–Nov. 4 (estimate)
• Parkland Fuel Corp (TSX: PKI, OTC: PKIUF)–Nov. 11 (estimate)
• Penn West Petroleum Ltd (TSX: PWT, NYSE: PWE)–Nov. 3 (estimate)
• Perpetual Energy Inc (TSX: PMT, OTC: PMGYF)–Nov. 8 (estimate)
• Peyto Exploration & Development Corp (TSX: PEY, OTC: PEYUF)–Nov. 9 (estimate)
• PHX Energy Services Corp (TSX: PHX, OTC: PHXHF)–Nov. 3 (estimate)
• Student Transportation Inc (TSX: STB, OTC: STUXF)–Nov. 11 (estimate)
• Vermilion Energy Inc (TSX: VET, OTC: VEMTF)–Nov. 4 (estimate)