Sigma Industries reports fiscal 2014 second quarter results

SAINT-ÉPHREM-DE-BEAUCE, QC, Dec. 20, 2013 /CNW Telbec/ - Sigma Industries Inc. (TSX-V: SSG), a manufacturing company specializing in the production of composite components, announces results for the second quarter of its 2014 fiscal year ended October 26, 2013. The results reflect the sale of the PNS Tech ("PNS") division effective October 1, 2013 and in accordance with IFRS, PNS has been presented as discontinued operations in the Company's unaudited consolidated interim financial statements.

SECOND QUARTER RESULTS
Revenues from continuing operations for the second quarter of fiscal 2014 totalled $14.3 million, up from $13.4 million in the second quarter of fiscal 2013. This increase of $894,391 is mainly attributable to a rise of $483,288 in revenues from the heavy-duty truck market as a result of higher industry shipments, and to an increase of $390,088 in sales of industrial products reflecting the addition of a new customer in the United States.

Sigma Industries recorded adjusted earnings before interest, taxes, depreciation and amortization from continuing operations ("EBITDA") of $696,850 in the second quarter of fiscal 2014, up from $552,862 a year earlier. This increase reflects higher business activity, better operating efficiency and a more favourable product mix, partially offset by higher labour costs.

The Company concluded the second quarter of fiscal 2014 with a net loss from continuing operations of ($18,134), or ($0.00) per basic and diluted share, versus a net loss from continuing operations of ($285,418), or ($0.02) per basic and diluted share last year. Discontinued operations provided net income of $209,781, including a gain on the disposition of assets of $100,079, in the second quarter of fiscal 2014, versus net income of $124,664 last year. As a result, net income for the second quarter of fiscal 2014 stood at $191,647, or $0.02 per basic and diluted share, compared with a net loss of ($160,754), or ($0.01) per basic and diluted share last year.

"Sigma Industries posted improved year-over-year financial results in the second quarter. Revenues from continuing operations grew 6.7% led by a recovery in the heavy-duty truck market. Moreover, sales to the bus industry rose by 12.9% as we increasingly benefit from greater business activity with existing customers, while sales of industrial products nearly doubled reflecting the addition of a new customer. More importantly, this greater business volume led to increased operating profitability," said Denis Bertrand, President and Chief Executive Officer of Sigma Industries.

SIX MONTHS RESULTS
For the six-month period ended October 26, 2013, revenues from continuing operations stood at $27.8 million, versus $30.5 million for the corresponding period a year earlier. Adjusted EBITDA from continuing operations amounted to $619,824 compared with $1.4 million last year. The net loss from continuing operations was ($834,906), or ($0.07) per basic and diluted share, versus ($303,190), or ($0.03) per basic and diluted share a year ago, while the net loss reached ($591,151), or ($0.05) per basic and diluted share, compared with ($185,844), or ($0.02) per basic and diluted share in the prior year.

FINANCIAL POSITION
As at October 26, 2013, Sigma Industries' net debt stood at $17.0 million. Subsequent to the end of the second quarter, the Company proceeded with a private placement consisting of: (i) a loan of $800,000 for a term of eight years, bearing interest at an annual rate of 10%, payable quarterly, and convertible at any time during the five years following its disbursement, in whole or in part, into common shares of Sigma, at a price of $0.05 per share for an initial amount of $500,000 during the first year of the loan and $0.10 per share for the balance during the five years following disbursement; and (ii) five-year debentures totalling an amount of $275,000, bearing interest at an annual rate of 10%, payable quarterly, and convertible at any time, in whole or in part, into common shares of Sigma at a price of $0.10 per share.

OUTLOOK
"Going forward, our operating strategy will be focussed on further developing market opportunities for Sigma's leading-edge composite products. We believe 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, as evidenced by new business in the bus and the industrial products markets. Still, as we do not expect the economy to improve materially, we must continue our relentless drive to improve profitability and cash flow by further optimizing our cost structure. We have made interesting efficiency gains in recent periods and we aim to achieve more to the benefit of our customers, employees and shareholders," concluded Mr. Bertrand.

SELECTED FINANCIAL INFORMATION

       
Consolidated results of operations Three months ended   Six months ended
(unaudited, in thousands of Canadian dollars except per-share amounts) October 26, 2013 October 27, 2012   October 26, 2013 October 27, 2012
  $ $   $ $
Revenues from continuing operations 14,302 13,408   27,795 30,550
Adjusted EBITDA from continuing operations 697 553   620 1,410
Net income (loss) from continuing operations (18) (285)   (835) (303)
  Per share (basic and diluted) (0.00) (0.02)   (0.07) (0.03)
Net income (loss) 192 (161)   (591) (186)
  Per share (basic and diluted) 0.02 (0.01)   (0.05) (0.02)
       
Reconciliation of EBITDA, adjusted EBITDA and net income
(unaudited, in thousands of Canadian dollars)
Three months ended   Six months ended
October 26, 2013 October 27, 2012   October 26, 2013 October 27, 2012
  $ $   $ $
Net income (loss) 192 (161)   (591) (186)
MINUS:          
Net income (loss) from discontinued operations 210 124   244 117
Net income (loss) from continuing operations (18) (285)   (835) (303)
PLUS (less):          
Income tax expense (recovery) (21) -   (21) -
Depreciation and amortization 307 320   621 665
Financial expenses 409 518   855 1,048
Adjusted EBITDA from continuing operations 697 553   620 1,410
PLUS (less):          
Foreign exchange loss (gain) (91) 57   (93) (81)
Loss (gain) on disposal of property, plant and equipment - -   - (1)
EBITDA from continuing operations 606 610   527 1,328
       
Consolidated balance sheet data As at      
(in thousands of Canadian dollars) October 26, 2013 April 27, 2013      
  $ $      
Total assets 27,199 27,483      
Total liabilities 24,881 24,537      
Shareholders' equity 2,318 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 components, has four operating subsidiaries and employs 400 people. The Company is active in the heavy-duty truck, coach, transit, machinery 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 December 20, 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.

For further information:


Sigma Industries Inc. 
Denis Bertrand
President and Chief Executive Officer
418-484-5282
denis.bertrand@sigmaindustries.ca

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SIGMA INDUSTRIES INC.

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