Empire Industries Ltd. reports financial results for the year ended December 31, 2008



    WINNIPEG, April 30 /CNW/ - Empire Industries Ltd. (TSX-V: EIL) ("Empire"
or the "Company"), today announced its audited consolidated financial results
for the year ended December 31, 2008. On April 29, 2009, the Company announced
restated fiscal 2007 and interim fiscal 2008 financial results. The audited
consolidated financial statements and Management's Discussion and Analysis
("MD&A") for the fourth quarter and year ended December 31, 2008 have been
filed on SEDAR and can be viewed at www.sedar.com or on our web-site at
www.empind.com.

    
    Fiscal 2008 Financial Highlights (with comparisons to restated fiscal 2007
results):
    -   Consolidated revenue increased to $180 million or 52.9%
        (4th quarter - increased to $40.2 million or 11.8%);
    -   Consolidated gross profit increased to $26.7 million or 26.1%
        (4th quarter - decreased to 5.2 million or 12.7%);
    -   Consolidated earnings before interest, taxes, depreciation and
        amortization ("EBITDA") decreased to $5.3 million or 39.9%
        (4th quarter - loss of $317,000 declined from $2.3 million in fiscal
        2007);
    -   Engineered products group revenue increased to $83.3 million from
        $23.9 million in fiscal 2007; gross profit increased to $16.9 million
        from $2.6 million; EBITDA increased to $5.9 million from a loss of
        $45,000;
    -   Steel fabrication group revenue increased slightly to $96.7 million;
        gross profit declined to $9.7 million from $18.6 million; EBITDA
        declined to $1.5 million from $10.1 million;
    -   Corporate expenses increased to $2 million from $1.2 million in
        fiscal 2007;
    -   Net Loss was $1.8 million, or $0.02 loss per share, compared with net
        earnings of $4.0 million or $0.06 per share in fiscal 2007; and
    -   Cash flow from operating activities improved to $840,000 for fiscal
        2008 compared to cash flow used in operating activities in the prior
        year of $10,000.
    

    "An especially challenging fourth quarter capped off a disappointing year
for Empire Industries," said Guy Nelson, Chairman and CEO of Empire Industries
Ltd. "While we continued to grow our top line, our margins did not keep pace
and we had a net loss for the year. In particular, our steel fabrication group
was negatively impacted by lower realized margins on jobs in 2008 compared to
2007. On the positive side, our engineered products group had strong growth in
sales and earnings following the acquisition of a number of companies in this
segment in 2007 and our steel fabrication group benefited from our expansion
into the maintenance services market in the Fort McMurray area through our
Aboriginal partnership."
    The increase in sales, gross profit and EBITDA for the specialized
engineered products segment stem largely from the annualized results of Empire
Dynamic Structures Ltd. ("EDSL") acquired April 17, 2007, Tornado Technologies
Inc., acquired November 30, 2007 and Parr Metal Fabricators Ltd. acquired
December 31, 2007. In addition, EDSL's margins from the production and sale of
ride systems improved in fiscal 2008 as the company refocused its product
lines and transferred responsibility for the operation of its Kingsway plant
to the steel fabrication segment.
    The decline in gross profit and EBITDA for the steel fabrication and
installation segment reflects a combination of factors including, but not
limited to: unexpected escalation in material costs for steel of about $1
million on a single job, labour cost overruns and several jobs with lower
contracted margins compared with fiscal 2007, higher annualized indirect and
direct production costs associated with the acquisition of KWH Constructors
Corp. on April 30, 2007 and additional indirect labour, plant and other
production costs associated with the operation of the company's Kingsway plant
transferred to the steel fabrication and installation segment on January 1,
2008. Earnings from the company's non-controlling interest in its Fort
McMurray maintenance services operation improved $322,000 or 84.6% over fiscal
2007.
    Corporate expense increases reflect a $194,000 increase in non-cash
stock-based compensation expense, the addition of a Chief Financial Officer
role, other executive salary adjustments and higher professional fees
associated with the introduction of quarterly reviews, the transition of
auditors and investor relations services.
    At December 31, 2008, the Company's long term debt (including the current
portion due) of $19.7 million improved $5 million compared to long term debt
of $24.7 million at December 31, 2007 while shareholders' equity of $39.2
million reflected the loss for the year of $1.8 million.
    "The current economic downturn has resulted in reduced project spending,
delays and cancellations in certain markets in which we operate," said Mr.
Nelson. "We expect that the current downturn will negatively impact our steel
fabrication group in 2009. However, we are somewhat encouraged by federal and
provincial government announcements indicating a willingness to invest up to
$21 billion in infrastructure spending over the next two years. While we will
likely not benefit from this in a material way in 2009 it does provide for a
potentially much brighter outlook for our steel fabrication group for 2010.
Fortunately, our engineered products group and our aboriginal partnership both
have relatively positive outlooks for 2009. Growth in our engineered products
group is driven partly by environmental regulations which create a demand for
our proprietary products. Our unique aboriginal partnership is focused on
providing maintenance services to Alberta's oilsands producers and the outlook
for this business is robust."
    Mr. Nelson added, "The severity of the downturn in the capital markets
that started in the latter half of 2008 contributed to Empire having a market
capitalization far below its book value. The economic environment has changed
dramatically, and Empire is reviewing its strategy accordingly. The Company
and the board of directors are evaluating alternatives to maximize shareholder
value while seeking to optimize the value and performance of the steel
fabrication group. These alternatives may include the formation of a strategic
partnership in our steel fabrication segment to better respond to the higher
margin projects that we will be bidding on in the coming months. We will leave
no stone unturned in our drive to maximize value. On that basis, other forms
of restructuring, such as the sale of non-core asset debt refinancing and cost
containment and reduction, are also being considered."

    About Empire Industries Ltd.

    Empire Industries Ltd. adds value to steel through its leading, Western
Canadian engineered products manufacturing and steel fabrication groups and
its Fort McMurray-based strategic partnership in the maintenance services
sector. The Company's business operations are focused on the infrastructure,
commercial and industrial construction marketplace of Western Canada and
select niche markets internationally. Empire's common shares are listed on the
TSX Venture Exchange under the symbol EIL.

    Forward-looking statements

    This press release contains forward-looking statements, within the
meaning of applicable securities legislation, concerning Empire's business and
affairs. In certain cases, forward-looking statements can be identified by the
use of words such as ''plans'', ''expects'' or ''does not expect'',
''budget'', ''scheduled'', ''estimates'', "forecasts'', ''intends'',
''anticipates'' or variations of such words and phrases or state that certain
actions, events or results ''may'', ''could'', ''would'', ''might'' or ''will
be taken'', ''occur'' or ''be achieved''. These forward looking statements are
based on current expectations, and are naturally subject to uncertainty and
changes in circumstances that may cause actual results to differ materially.
Readers are cautioned not to place undue reliance on such forward-looking
statements. Forward-looking information is provided as of the date of this
press release, and Empire assumes no obligation to update or revise them to
reflect new events or circumstances, except as may be required under
applicable securities laws.

    
    Neither 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.
    





For further information:

For further information: please visit our web-site at: www.empind.com or
contact: Guy Nelson, Chairman & CEO, Empire Industries Ltd., Phone: (416)
366-7977, Email: gnelson@empind.com; David Carefoot, Chief Financial Officer,
Empire Industries Ltd., Phone: (204) 589-9305, Email: dcarefoot@empind.com;
Trevor Heisler, Investor Relations, The Equicom Group Inc., Phone: (416)
815-0700 x 270, Email: invest@empind.com

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EMPIRE INDUSTRIES LTD.

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