WINNIPEG, Aug. 25 /CNW/ - Empire Industries Ltd. (TSX-V: EIL) ("Empire"
or the "Company"), a provider of steel fabrication and installation services
and specialized engineered products, today announced its unaudited
consolidated financial results for the second quarter ended June 30, 2008. The
unaudited consolidated financial statements and Management's Discussion and
Analysis for the second quarter are available on Empire's website at
www.empind.com and have been filed on SEDAR.
Second Quarter Highlights:
- Revenue of $43.7 million, an increase of 37.2%;
- Gross profit of $7.1 million, an increase of 33.4%;
- Net loss of $0.4 million ($0.00 per share), compared to earnings of
$0.7 million ($0.01 per share) for the second quarter of 2007.
- Contract backlog of $110 million at the end of the second quarter, up
from $91 million at March 31, 2008.
"Our backlog continues to grow to record levels and the breadth of our
major contract negotiations and bidding activity clearly demonstrates that our
acquisition strategy focused on western Canada is working," said Guy Nelson,
Chairman and Chief Executive Officer, Empire Industries Ltd. "As expected, our
second quarter earnings were negatively impacted by our post acquisition
integration program, a series of unusual charges aggregating $1.4 million and
less than optimal capacity utilization. We are pleased with the progress of
our integration program which is now largely completed and we have been
successful in booking new business to fill much of our added capacity."
Revenue increased 37.2% to $43.7 million for the second quarter and 52.1%
to $82.1 million for the year-to-date compared to the same periods a year
earlier. Revenue increases were driven largely by the acquisitions of Dynamic
Structures and KWH Constructors during the second quarter of last year and of
Tornado Technologies during the fourth quarter of last year.
Gross profit for the quarter increased to $7.1 million (16.1% of revenue)
from $5.3 million (16.6% of revenue) for the second quarter of last year. For
the year-to-date, gross profit increased to $13.1 million (15.9% of revenue)
from $9.7 million (18.0% of revenue) for the same period last year.
Net loss for the quarter was $0.4 million, or $0.00 per share, compared
to earnings of $0.7 million, or $0.01 per share, for the second quarter of
2007. For the year-to-date, net loss was $0.0 million, or $0.00 per share,
compared to $1.7 million, or $0.03 per share, for the same period in 2007. The
company incurred unusual charges aggregating $1.4 million in the quarter, of
which $1.0 million can be considered one-time items. These charges include:
warranty costs on a product line that has since been discontinued, costs for
the related re-structuring, write-down of a receivable to reflect the final
settlement of a long term outstanding claim, and increased provisions for
accounts receivable and inventory.
The acquisitions mentioned above resulted in higher amortization and
higher interest expense as a result of long term debt assumed, impacting
profitability for the second quarter and year-to-date.
Net loss per share for the second quarter is based on a weighted average
of 91,196,962 common shares outstanding during the quarter compared to a
weighted average of 58,573,210 common shares outstanding for the second
quarter of 2007.
"With our shop and field construction capacity filling up, we look
forward to posting much stronger financial results for the second half of the
year," said Mr. Nelson. "Our increased scale has positioned us to compete for
much larger projects. We have world-class steel fabrication and installation
capabilities and are a leading designer and builder of specialized, engineered
products in the niche markets we operate in. Additionally, our focus has now
shifted from post acquisition integration to leveraging the growth potential
of both segments of our business."
About Empire Industries Ltd.
Empire Industries Ltd. is a leading, Western Canadian steel fabricator
and engineered products manufacturer. Empire's mission is to increase
shareholder value by adding value to steel through a combination of organic
growth and strategic acquisitions. Since becoming a public entity, Empire has
expanded its fabrication space to more than 400,000 square feet and grown its
workforce to more than 800 skilled tradespersons and technical personnel. The
Company owns several steel fabrication shops and manufacturing facilities,
each with longstanding track records of success, and is uniquely positioned to
capitalize on the burgeoning infrastructure, commercial and industrial
construction marketplace of Western Canada. Empire's common shares are listed
on the TSX Venture Exchange under the symbol EIL.
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.
The TSX Venture Exchange does not accept 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: firstname.lastname@example.org; Trevor Heisler, Investor Relations, The
Equicom Group Inc., Phone: (416) 815-0700 x 270, Email: email@example.com