Marsulex announces strong first quarter 2010 results

TORONTO, April 28 /CNW/ - Marsulex Inc. (TSX: MLX) today announced results for the three months ended March 31, 2010. Gross profit and EBITDA increased by 6.3% to $23.8 million and by 27% to $14.6 million, respectively, from $22.4 million and $11.5 million in the first quarter of 2009. Revenue for the quarter decreased by 8.5% to $62.7 million from $68.5 million in the first quarter of 2009; however, this decline was primarily a result of the $5.4 million impact of the strengthening Canadian dollar. Earnings before income taxes and net earnings for the quarter more than doubled to $5.6 million and $3.8 million ($0.12 per share), respectively, compared to $2.2 million and $1.5 million in 2009 ($0.05 per share). The first quarter financial statements and MD&A will be available on SEDAR at www.sedar.com and on the Company's website at www.marsulex.com.

    
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                                                         Three months ending
    (in millions of dollars, except                                 March 31,
     per share amounts)                             2010      2009     % chg
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    Revenue                                        $62.7     $68.5     -8.5%
    Gross profit                                    23.8      22.4      6.3%
    SG&A(1)                                          9.2      10.9    -15.6%
    EBITDA(2)                                       14.6      11.5     27.0%
    Earnings before income taxes                     5.6       2.2    154.5%
    Net earnings                                     3.8       1.5    153.3%
    Earnings per share - basic                      0.12      0.05    140.0%
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    (1) Selling, general, administrative, and other costs, including foreign
        exchange.
    (2) Earnings before income taxes, depreciation, and amortization.
    

Commenting on the results, Marsulex President and Chief Executive Officer, Mr. Laurie Tugman said, "All business units reported improvements in quarterly EBITDA from a year earlier. It appears North America is emerging from last year's recession and that business conditions are improving. Having said this, it should be noted that our 2009 and latest quarterly results underscore that the nature of our business gives us limited exposure to the impacts of the downturn."

Quarterly Highlights

    
    -   Industrial services EBITDA increased 7.3% to $11.5 million on
        stronger results from the business. This more than offset foreign
        exchange on U.S. operations which reduced EBITDA by $1.1 million.
    -   Western Markets EBITDA increased 20.7% to $6.6 million on improved
        volumes from sulphur based products.
    -   Despite lower revenues, MET EBITDA improved by approximately
        $0.6 million on close out of several international projects. MET
        remains in the early stages of projects, totalling $150 million,
        announced in early January 2010.
    -   SG&A costs were lower than in the previous year. 2010 includes costs
        associated with the strategic review ($1.2 million) and 2009 includes
        severance costs ($0.8 million).
    -   On March 23 2010, the Company announced that it had initiated a
        review of strategic options.
    

Mr. Tugman commented on the strategic review, and said, "It will be a very thorough process that involves the board, management, and our financial advisors. We are unable to say how long the process will take and whether it will result in any transaction. In the meantime, the Company continues to conduct its business as usual and remains fully focused on providing environmental compliance solutions for customers. The Company continues to pursue growth projects. We are proceeding with additional capital projects of $7 million within the Industrial Services Group. These projects are expected to be completed in 2010 and provide incremental EBITDA in 2011."

Marsulex, which is based in Toronto, Ontario, is a leading provider of industrial services, including environmental compliance solutions for air quality control, processing or handling of industrial by-products or waste streams, and is a producer and marketer of sulphur-based industrial chemicals. The Company's services and products are provided to a broad base of industrial customers in a wide range of industries. Website: www.marsulex.com

A conference call with analysts and portfolio managers to review the first quarter 2010 results will be webcast live on www.marsulex.com and www.newswire.ca on Thursday, April 29, 2010 at 10:00 a.m. Eastern Time.

The Company's annual meeting will be held at 10:00 a.m. on Thursday, May 6, 2010 at the TSX Broadcast Centre, 130 King Street West, Toronto.

Information in this news release that is not current or historical factual information may constitute forward-looking information, including future-oriented financial information and financial outlooks, within the meaning of securities laws. This information is based on certain assumptions regarding expected growth, results of operations, performance, and business prospects and opportunities (collectively, the "Assumptions"). While the Company considers these Assumptions to be reasonable, based on information currently available, they may prove to be incorrect. Forward-looking information is subject to a number of risks, uncertainties and other factors that could cause actual results to differ materially from what the Company currently expects. These risks, uncertainties and other factors include, but are not limited to: the Company's ability to renegotiate contracts; the impact of acquisitions and growth opportunities; the timing and market acceptance of future products; competition in the Company's markets; the Company's reliance on customers; fluctuations in currency and exchange rates; commodity prices or interest rates; the Company's ability to maintain good relations with its employees; changes in the law or regulations regarding the environment or other environmental liabilities; the Company's ability to integrate acquisitions; the Company's ability to protect its intellectual property; and the outcome of a strategic review (collectively, the "Risks"). For more exhaustive information on these Risks you should refer to our Company's filings with the securities regulatory authorities, including the Company's most recently filed annual information form, which is available on SEDAR at www.sedar.com. Additional information relating to the Company can be found on the SEDAR website.

Actual results may differ materially from what the Company currently expects. Other than as required under securities laws, we do not undertake to update any forward-looking information at any particular time. The reader should not place undue importance on forward-looking information and should not rely upon this information as of any other date. All forward-looking information contained in this news release is expressly qualified in its entirety by this cautionary statement.

For further information: Laurie Tugman, President and CEO, Tel: [phone]; or William Martin, Chief Financial Officer, Tel: [phone]