SAINT-ÉPHREM-DE-BEAUCE, QC, Sept. 17, 2013 /CNW Telbec/ - Sigma Industries Inc. (TSXV: SSG), a manufacturing company specializing in the production of composite and metal components, announces results for the first quarter of its 2014 fiscal year ended July 27, 2013.
Revenues for the first quarter of fiscal 2014 totalled $14.5 million, versus $18.1 million in the first quarter of fiscal 2013. This $3.6 million decrease, as anticipated by management, is mainly attributable to a $1.8 million reduction in revenues from the heavy-duty truck industry due to economic uncertainty in the United States which led to a 10% year-over-year decline in truck shipments. This uncertainty, combined with the conclusion of a manufacturing contract, also explain a decline of $863,566 in sales of wind energy products. Finally, sales to the bus market declined by $472,181 as a result of the conclusion of a manufacturing contract in fiscal 2013.
Sigma Industries recorded an adjusted loss before interest, taxes, depreciation and amortization of $12,317 in the first quarter of fiscal 2014, compared with adjusted earnings before interest, taxes, depreciation and amortization ("EBITDA") of $863,921 in the first quarter of fiscal 2013. This variation reflects the effect of lower business activity on the absorption of fixed overhead costs, as well as higher labour costs. The Company concluded the first quarter of fiscal 2014 with a net loss of $782,796, or ($0.07) per basic and diluted share, versus a net loss of $25,090, or $0.00 per basic and diluted share in the first quarter of fiscal 2013.
"While revenues decreased from the same period a year ago, the volume remained relatively stable compared with the fourth quarter of fiscal 2013. Still, revenues were insufficient to generate an appropriate operating profitability and we concluded the quarter with an adjusted EBITDA near breakeven. The situation remains difficult in the heavy-duty truck and the wind energy markets, two sectors relatively affected by the persistent economic uncertainty in the United States," said Denis Bertrand, President and Chief Executive Officer of Sigma Industries.
FINANCIAL POSITION
As at July 27, 2013, Sigma Industries' net debt stood at $16.8 million. In addition, subsequent to the end of the first quarter, the Company renegotiated its bank line of credit and two long-term loans with its principal bankers. These agreements show their confidence in the Company's business strategy and also provide Sigma with slightly more favourable terms and conditions.
OUTLOOK
"As we look ahead, the economy is not expected to improve materially and we must continue to optimize our cost structure to improve profitability and cash flow. Still, our base business is solid and our proven reputation in regards to quality and innovation should allow us to further increase our presence in our strategic markets. We are also poised to benefit in the next few quarters from new business in the bus industry," concluded Mr. Bertrand.
SELECTED FINANCIAL INFORMATION
| Consolidated results of operations | Three months ended | ||
| (unaudited, in thousands of Canadian dollars except per-share amounts) | July 27, 2013 | July 28, 2012 | |
| $ | $ | ||
| Revenues | 14,475 | 18,080 | |
| Adjusted EBITDA | (12) | 864 | |
| Net income (loss) | (783) | (25) | |
| Per share (basic and diluted) | (0.07) | 0.00 | |
| Reconciliation of EBITDA, adjusted EBITDA and net income (unaudited, in thousands of Canadian dollars) |
Three months ended | ||
| July 27, 2013 | July 28, 2012 | ||
| $ | $ | ||
| Net income (loss) | (783) | (25) | |
| PLUS (less): | |||
| Income tax expense (recovery) | - | (27) | |
| Depreciation and amortization | 331 | 361 | |
| Financial expenses | 440 | 555 | |
| Adjusted EBITDA | (12) | 864 | |
| PLUS (less): | |||
| Foreign exchange loss (gain) | 3 | (133) | |
| Loss (gain) on disposal of property, plant and equipment | - | (1) | |
| EBITDA | (9) | 730 | |
| Consolidated balance sheet data | As at | ||
| (in thousands of Canadian dollars) | July 27, 2013 | April 27, 2013 | |
| $ | $ | ||
| Total assets | 27,016 | 27,483 | |
| Total liabilities | 24,847 | 24,537 | |
| Shareholders' equity | 2,169 | 2,946 | |
NON-IFRS FINANCIAL MEASURES
The information in this press release includes certain measures that are not financial measures prescribed under IFRS. Sigma Industries uses adjusted earnings before interest, taxes, depreciation and amortization ("Adjusted EBITDA") and earnings before interest, taxes, depreciation and amortization ("EBITDA") in assessing its financial performance. As there is no generally accepted method of calculating these financial measures, they may not be comparable to similar measures reported by other companies. Adjusted EBITDA is earnings before interest, income taxes, depreciation, amortization and other non-operating expenses and revenues, EBITDA consists of adjusted EBITDA plus (minus) foreign exchange loss (gain) and loss (gain) on disposal of property, plant and equipment. These measures do not represent cash flow available for repayment of debt, payment of dividends, reinvestment or other discretionary uses, and should not be considered in isolation or as a substitute for other measures of performance calculated according to IFRS.
ABOUT SIGMA INDUSTRIES
Sigma Industries Inc. (TSX-V: SSG), a manufacturing company specializing in the production of composite and metal components, has four operating subsidiaries and employs 400 people. The Company is active in the heavy-duty truck, coach, transit, machinery, agriculture, and wind energy markets. Sigma sells its products to original equipment manufacturers and distributors in the United States, Canada and Europe.
FORWARD-LOOKING STATEMENTS
This press release contains certain forward-looking statements about the Company. Such forward-looking statements are dependent on a number of factors and are subject to risks and uncertainties. Actual results may differ from those expected. The information contained in this press release is dated September 17, 2013, the date on which management approved the press release. Management does not assume any obligation to update or revise any forward-looking statements, whether as a result of new information or future events, except as required by law.
Note to readers: Complete unaudited condensed interim consolidated financial statements and Management's Discussion & Analysis of Financial Position and Operating Results have been posted on SEDAR and are available at www.sedar.com.
Neither the TSX Venture Exchange nor its regulation 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.
SOURCE: SIGMA INDUSTRIES INC.
Sigma Industries Inc.
Denis Bertrand
President and Chief Executive Officer
418-484-5282
[email protected]
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