Added Capital Corp. (TSXV: LS)
WELLAND, ON, June 25 /CNW/ - Added Capital Corp. (TSXV: LS) ("Added" or
the "Company") today reported results for its fourth quarter and year ended
March 31, 2008. Net loss for the fourth quarter was $215,882 or $0.00 per
share and a net loss of $5,385,357 or $0.11 per share for the year ended March
31, 2008, compared with net income of $6,580,661 or $0.16 per share in the
fourth quarter in the prior year and net income of $3,024,012 or $0.08 per
share for the year ended March 31, 2007.
Vic Alboini, Chairman and Chief Executive Officer of Added stated: "The
Company improved its balance sheet substantially during FY 2008 with the
retirement of its long term debt and the completion of a private placement.
This balance sheet positions the Company to take advantage of merger and
acquisition opportunities which are being pursued."
Tim Clutterbuck, President and Chief Executive Officer of Lakeside Steel
Corporation, the wholly owned subsidiary of Added stated: "The Company has
made good progress operationally with the implementation of efficiencies. We
are expecting an improved performance in FY 2009."
Included in the net loss for the year ended March 31, 2008, was a foreign
exchange loss of $898,352 and one-time restructuring and reverse take over
costs of $2,240,058. The net income for the year ended March 31, 2007 was a
result of positive adjustments in the total amount of $11,520,475 for
re-measurement of pension costs, future employee benefits, establishment of
the purchase price settlement liability and the re-measurement of the
The Company's revenue for the year ended March 31, 2008, was $161,486,304
compared to $177,805,598 for the same period last year. Revenue declined 9.2%
as a result of the decline in the oil and gas sector which accounted for 50.3%
of revenue for the year ended March 31, 2007, but only 36.4% of revenue for
year ended March 31, 2008.
Operating and financial expenses for the year ended March 31, 2008, were
$10,458,147 compared to $10,092,382 for the same period last year. Foreign
exchange losses, reverse takeover transaction expenses, and one-time
restructuring costs accounted for $3,138,410 of the increase while interest
costs decreased $1,618,357 as a result of the retirement of the note payable
on November 30, 2007, and a reduction in the level of the interest bearing
The Company reduced its bank indebtedness by $7,621,343 and retired a
note payable of $10,000,000 plus interest of $3,422,535. This was accomplished
through the net proceeds of $8,444,144 received from the private placement in
November 2007 and positive cash flows from liquidation of inventory, an
improvement in days sales outstanding of trade receivables, and a reduction of
operating costs in FY 2008. The balance sheet of the Company improved with the
reduction of interest-bearing debt from $33,259,427 as at March 31, 2007, to
$13,155,195 on March 31, 2008.
During FY 2008 Lakeside implemented a series of significant operational
and organizational changes at the Welland facility including the addition of a
new senior management team consisting of a new President and Chief Executive
Officer, a Vice President of Human Resources, Chief Financial Officer, and,
more recently, a Vice President of Operations, Maintenance and Engineering.
The combined business experience of this team is in excess of 100 years with
close to 40 years in the steel industry. The balance of FY 2008 saw sales
initiatives broaden the Company's market reach and create a more diversified
customer base. Lakeside achieved operational improvements by refining its
planning and inventory control processes, improving productivity and reducing
costs. Capital investment focused on improving productivity and reducing
costs. Progress made in FY 2008 established a firm foundation on which
Lakeside plans to aggressively pursue attractive markets for its products in
FY 2009 and beyond.
In FY 2009 Lakeside's sales revenues are anticipated to increase by
approximately $44 million. Volume growth projections of 14% account for $20
million of this revenue increase and anticipated selling price increases will
account for the balance. While the near-term economic outlook for North
America is not healthy, some of Lakeside's major markets are showing signs of
resilience. High energy prices suggest that the oil and gas industry will
remain strong throughout the year precipitating increased drilling and
exploration activity and an anticipated increase in demand for the Company's
energy-related products. Oil Country Tubular Goods products are projected to
comprise up to 41% of Lakeside's planned sales volume in FY 2009 as compared
to 36% in FY 2008. Management is prepared to further capitalize on additional
sales opportunities (above plan levels) through adjustments in production
schedules and the redeployment of resources.
Strong operational and administrative cost control combined with an
increase in gross margin has the Company projecting an EBITDA target of $3.9
million for the year ending March 31, 2009, compared to EBITDA of ($4,768,000)
for the year ended March 31, 2008. While it remains early in the fiscal year,
the Company appears poised to meet or exceed its business targets for the year
and expects the Company's Fiscal Q1 2009 results to exceed the business plan.
Management recognizes that there are many risks that could impact the
successful implementation of the business plan in FY 2009. These risks include
but are not limited to the risk of currency fluctuation; increased import
activity; the loss of a major account or accounts for any reason; a sudden
change in the economic outlook for any of Lakeside's major markets; major
equipment breakdown; significant substitution of the Company's products;
changes in legislation affecting the Company's ability to operate in a
competitive environment; a strike or lockout due to unsuccessful bargaining of
the Collective Bargaining Agreement; and a sudden and significant drop in the
price of pipe for any reason.
About Added Capital Corp.
Added is the parent company of Lakeside Steel Corporation ("Lakeside").
Lakeside, located in Welland, Ontario, is a diversified steel pipe and tubing
manufacturer. Lakeside's list of customers includes large oil and gas, mining,
automotive and commercial and industrial supply companies. In addition to
supplying its products in these industries, Lakeside manufactures pipe and
mechanical tubing for the resale market, which are sold to distributors in
Eastern Canada and the Northeastern United States. Lakeside manufactures a
variety of products for these industries including oil well tubing and casing,
mechanical tubing, pressure tubing, automotive tubing, hollows for redraw,
line pipe, heating and plumbing pipe, drill rod and specialty tubing. Lakeside
serves customers worldwide, either directly or indirectly, in Canada,
Australia and the United States.
For further information:
For further information: Vic Alboini, Chairman & Chief Executive
Officer, Added Capital Corp., Tel: (416) 644-8110, Fax: (416) 644-0271,
e-mail: firstname.lastname@example.org; Ken Hunter, Chief Financial Officer, Added
Capital Corp., Tel: (905) 735-7473 ext 7218, Fax: (905) 735-9069, e-mail: