Rutter Releases Second Quarter Unaudited Financial Statements

ST. JOHN'S, NL, April 14 /CNW/ - Today, Rutter Inc. (TSX: RUT) released its unaudited second quarter consolidated financial statements for the six month period ended February 28, 2011.

Summary financial information is provided in this press release which should be read in conjunction with the full financial statements and MD&A available on the Company's web site at www.rutter.ca or on SEDAR at www.sedar.com.  Fraser H. Edison, President and CEO of the Company, and Karen M. Snook, Chief Financial Officer, will host a conference call on Friday, April 15, 2011, to discuss the results. Details of this call were announced in a press release dated April 14, 2011 and are also available on the Company's web site.

SUMMARY OF RESULTS

The Company's quarterly results are summarized in the tables below:

(in thousands except per share amounts)
  Q2
2011
Q2
2010
Change YTD
2011
YTD
2010
Change
             
Revenues:            
Third party manufacturing $6,265 $6,258 $7 $12,119 $15,938 $(3,819)
Company owned products 1,808 1,882 (74) 3,707 4,019 (312)
Total Technologies 8,073 8,140 (67) 15,826 19,957 (4,131)
Other (including Corporate) 107 124 (17) 216 193 23

Company total
$8,180 $8,264 (84) $16,042 $20,150 (4,108)
 
EBITDA (1)            
Technologies Segment 1,145 892 253 2,540 2,203 337
Other (including Corporate) (252) (210) (42) (461) (662) 201
Company total 893 682 211 2,079 1,541 538
 
Other (costs) (2) (905) (1,528) 623 (2,014) (2,614) 600
Net earnings (loss) from
discontinued
operations
92 (211) 303 221 217 4
Net earnings (loss) 80 (1,057) 1,137 286 (856) 1,142
 
Earnings (Loss) Per Share $ - $(0.01) $0.01 $ - $(0.01) $0.01

(1) EBITDA is identified in the Company's financial statements as "Earnings before undernoted items" and is more fully defined in the Company's financial statements and MD&A.
(2) Other (costs) income include:  Depreciation and amortization; Interest on long-term debt; Interest and bank charges; Other items and Write down of intangibles all of which are separately disclosed in the Company's financial statements.

Revenues

Third party manufacturing revenues are essentially unchanged on a comparative quarter basis but reflect a year to date decrease of $3,819,000 or 24%.  This is attributable to higher third party manufacturing revenues in the first quarter of the prior year which includes revenues relating to the manufacture of power distribution assemblies for the U.S. Army's Stryker vehicle.  This contract resulted in unusually high activity levels throughout fiscal 2009 and into the first quarter of fiscal 2010.

The decrease in revenues from Company owned products reflects an increase in radar revenues and a decrease in VDR revenues.  Radar revenues are continuing a gradual increasing trend and reflect an increasing proportion of the Company owned products' revenues.

EBITDA

The Technologies segment year to date EBITDA was $2,540,000, an increase of $337,000 as compared to the same period last year but on a revenue base that is $4,131,000 smaller in this year as compared to last year.   Reductions in selling, general and administrative expenses ("SG&A") and improved gross margins have driven the improvement in EBITDA.  Gross margins have improved in both Third party manufacturing and Company owned products due to the change in mix of the products sold.  Most of the infrastructure changes contributing to the lower SG&A costs were made during the second quarter of the prior year so impact of those were first evident in the fiscal 2010 third quarter.

Net earnings (loss) from discontinued operations

Included in the current year is a gain on sale of $169,000 with respect to AFN Engineering Inc, an investment disposed of during the first quarter and a gain on sale of $52,000 with respect to the Company's former Mechanical and Engineering business disposed of during the second quarter.

Net Earnings (Loss)

The Company has net earnings of $286,000 for the year to date compared to a loss of $856,000 in the prior year.

CONCLUSION

"In quarter one, we repaid $2,000,000 of debt, renegotiated terms on our senior debt, and completed the disposition of a non-core investment asset.  To date in quarter two and quarter three we have repaid a further $1,600,000 of long-term debt and are working to conclude the final transaction to exit the consulting engineering business, allowing for a further $800,000 debt reduction" noted Fraser Edison, President and CEO.  "In our core operations we continue to achieve a proportionately much stronger EBITDA result on a significantly smaller revenue stream as a result of actions taken to streamline operations during the second quarter of 2010.  Our backlog remains healthy with our key military customer and our radar business continues to demonstrate further growth opportunity.  We have strong core operations and we will continue efforts to reduce debt and associated borrowing costs," he concluded.

About Rutter Inc. - Rutter is an enterprise focused on providing innovative technologies and engineering solutions. Rutter's global network supplies technologies to improve efficiency and safety in the marine, defense, transportation, oil and gas sectors from its headquarters in the Province of Newfoundland and Labrador. For more information see www.rutter.ca

Forward-Looking Statements
This press release may contain forward-looking statements that involve risks and uncertainties. These statements reflect current expectations and are subject to a number of risks and uncertainties including but not limited to, change in technology and general market conditions. Due to the many risks and uncertainties, Rutter Inc. cannot assure that forward-looking statements that may be contained in this press release will be realized.

The TSX has not reviewed and does not accept responsibility for the adequacy or accuracy of this release. 

 

SOURCE RUTTER INC.

For further information:

Karen Snook, Chief Financial Officer and Corporate Secretary, Rutter Inc. +1 709 576 6666

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RUTTER INC.

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