General Donlee Canada Inc. Reports Results for Second Quarter Ending June 30, 2013

TORONTO, Aug. 14, 2013 /CNW/ - General Donlee Canada Inc. ("General Donlee" or the "Company") (TSX: GDI) today announced its results for the second quarter ended June 30, 2013.

Financial highlights relating to General Donlee's second quarter 2013:

• Backlog remains solid at $61.3 million
• Sales of $12.4 million versus $14.2 million over the prior year comparable period 
• Net income before other gains, losses and income taxes was $1.1 million down from $1.8 million in second quarter 2012
• Quarterly dividend of 8.25 cents per share paid to shareholders on July 15, 2013

Continuing strength in aerospace revenues and healthy cash flow from operations

"While General Donlee's sales in the Aerospace segment were slightly down in Q2 2013 compared to the comparable quarter of 2012, demand from the aerospace sector remains generally steady, as reflected by the 6% year over year growth for the initial six months of the year. The Specialty Precision Products division has experienced a reduction in revenues mainly reflecting lower sales to an oilfield services customer year over year. In the second quarter of 2013 we generated $1.5 million of cash flow from operations before changes in working capital and net of interest expenses, and paid out $0.88 million in quarterly dividends to shareholders" said Garen Mikirditsian, President and Chief Executive Officer.

Solid backlog

"At June 30, 2013, our production order backlog was at $61.3 million remaining at a historically high level and reflecting the confidence our customers have in the Company's ability to consistently deliver product of the highest quality," said Mr. Mikirditsian.

Financial Highlights

The following summary of financial data presents General Donlee's consolidated results of operations for the three-month and six-month periods ended June 30, 2013, including comparative results for the same period in 2012.       

   

($ millions, except per Share amounts)		Three Months Ended					Six Months Ended
			June 30/13		June 30/12		June 30/13		June 30/12
Operations
Sales			12.4		14.2		25.6		28.3
Gross profit			3.0		3.8		5.9		7.7
Net income before other gains, losses and income taxes			1.1		1.8		2.2		3.6
Net income			0.7		0.7		1.5		2.2
Basic income per share			$0.062		$0.065		$0.144		0.211

Outlook

Conditions remain generally favourable in the commercial aerospace market, with large commercial aircraft manufacturers continuing to increase production rates for certain programs. Commercial aerospace backlogs remain strong, representing seven to eight years of production at current rates. The mid to large size business jet market is expected to gradually recover in the next few years driven by a better economy and decreasing pre-owned inventory levels. Conditions in the military rotorcraft market remain difficult, however spares parts demand is expected to partially mitigate reduced overall demand in this sector.

The Company continues to see steady demand from customers, especially those in the aerospace sector and believes that its production backlog of $61.3 million is evidence of the confidence customers have in the Company's ability to consistently deliver product of the highest quality.

"Over the past two quarters the Company has experienced a drop in revenues relating to the oil & gas sector, mainly reflecting slower customer demand. The Company is seeing its efforts to broaden its oil & gas customer base bearing fruit, with significant quoting activity and bookings noted with a new customer this quarter", said President and Chief Executive Officer, Garen Mikirditsian. The Company expects its revenues from the oil & gas sector to become less volatile as it successfully diversifies its customer base.

The Company expects demand for its services to gradually ramp-up as the year unfolds and expects demand to remain robust in the near term. "We see strong demand from various customers in the aerospace sector, and we note high quoting activity and increased net bookings during the past quarter", said Mr. Mikirditsian.  "Our confidence in the near term outlook is grounded in our ability to win parts on next-generation aerospace platforms and pending opportunities with oil & gas and nuclear customers. For example, we are pleased to note that we have recently been awarded orders by a major rotorcraft customer for new parts on a next-generation helicopter platform."

Company Profile

General Donlee Canada Inc. is a leading diversified manufacturer of precision-machined products serving the commercial, military, and general aerospace industries as well as the nuclear, power generation, oil & gas and capital equipment end markets. General Donlee's operating strategy focuses on targeting niche markets for products that are aligned with its sophisticated manufacturing capabilities and skilled workforce.

SEDAR Filings

On August 14, 2013 the Company will file its unaudited Condensed Consolidated Financial Statements (including the notes thereto) and Management's Discussion and Analysis for the period ended June 30, 2013 with SEDAR at www.sedar.com.  These documents will also be available on the Company's website at www.generaldonlee.com on the Financial Reports page.

Forward-Looking Information

As with all forward-looking statements, caution must be exercised to ensure that appropriate interpretation is made. Certain forward-looking statements are based on information currently available to Management, but are subject to a number of uncertainties and risks that could cause actual results to differ materially from the results discussed in the forward-looking statements. These uncertainties and risks include, but are not limited to those listed under the "Risk Factors" section of the Company's 2012 Annual Information Form, dated March 9, 2013 (which can be found at www.sedar.com).

Further information can be found in the disclosure documents filed by General Donlee Canada Inc. with the securities regulatory authorities, available at www.sedar.com or through the Company's website at www.generaldonlee.com.

% SEDAR 00017571E

SOURCE: General Donlee Canada Inc.

Robert S. Kheir, MBA, CMA
Chief Financial Officer
Telephone: [phone]
E-mail:  [email protected]
Web site: www.generaldonlee.com