CALGARY, Feb. 26 /CNW/ - Winalta Inc. (TSX-V - "WTA-A") ("Winalta" or the "Company") For the twelve months ended October 31, 2009, the Company realized gross profit of $7.5 million on revenue of $43.4 million compared to $32.5 million gross profit on $92.7 million in 2008. The decrease in consolidated gross profit reflects strong competitive product pricing, higher direct selling and setup costs, increased costs related to reduced manufacturing operations resulting from lower production volumes, and low profit margins on paving and aggregate operations during 2009. The Company reports net losses of $27.0 million, or $0.76 loss per share for the year ended October 31, 2009, down from net earnings of $5.3 million, or $0.15 earnings per share for the year ended October 31, 2008.
The Company recorded a net loss of $23.2 million from continuing operations for the current year ended October 31, 2009 compared to net earnings from continuing operations of $4.9 million on revenue of $92.7 million for the year ended October 31, 2008. Included in the net loss for 2009 are write downs of $8.4 million to the net realizable value of certain equipment held for sale, goodwill, construction equipment, gravel reserves and valuation allowances for specific development lands. Overall Homes Division revenue for the 2009 fiscal year is lower by approximately $33.0 million due to the completed sales and deliveries of homes into communities in 2008. This represented 36% of the Company revenue for the fiscal year ended 2008 and is 67% of the reduction in overall revenue from 2008.
Over the past 12 months Winalta has been reviewing and eliminating excessive overhead costs. As a result, selling, general and administrative (SG&A) expenses have been reduced by $5.4 million on an annualized basis from November 2008 to October 2009. Not all SG&A reductions made to date are reflected in the October 2009 annualized figures and Winalta is continuing to review and reduce its expenses.
"We are executing on our plans to reduce overhead and debt. We are working with our lenders, who understand our plans, recognize our efforts to date and are willing to work with us through these challenging economic conditions. As we continue operations through fiscal 2010, our revenue and overheads will be closely aligned as to allow Winalta to return to profitability," says Ron Berg, President and CEO, Winalta Inc.
Winalta Inc. is an integrated company with three main operating divisions, Homes, Industrial, and Manufacturing. The Homes Division sells CSA approved homes via retail centers, communities and supply arrangements. The Industrial Division leases portable industrial accommodations and provides construction services that include excavating, aggregate trucking and paving. The Manufacturing Division builds CSA approved homes and portable industrial accommodations from facilities in Acheson, near Spruce Grove, Alberta.
The financial results for the year ended October 31, 2009 are now released and available at www.sedar.com and on the company website www.winaltainc.com.
Winalta Inc. shares trade on the TSX Venture Exchange under the symbol "WTA.A".
The TSX Venture Exchange has neither approved nor disapproved the contents of this news release. The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release.
The words "believe", "expect", "intend", "anticipate", or any variation of such words and similar expressions identify forward-looking statements, but their absence does not mean that the statement is not forward-looking. These statements are not guarantees of future performance and are subject to certain risks, uncertainties and assumptions that are difficult to predict. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this news release. Winalta undertakes no obligation to publicly update or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, except as required by securities laws.
SOURCE Winalta Inc.
For further information: For further information: Business Contact: Ron Berg, President & Chief Executive Officer, Winalta Inc., Tel: (780) 960-6900, Fax: (780) 962-9523, firstname.lastname@example.org; Austin Fraser, Vice President Corporate Development and Investor Relations, Tel: (403) 475-4698