Sigma Industries reports fiscal 2013 year-end results

SAINT-ÉPHREM-DE-BEAUCE, QC, Aug. 23, 2013 /CNW Telbec/ - Sigma Industries Inc. (TSXV: SSG), a manufacturing company specializing in the production of composite and metal components, announces results for the fourth quarter and fiscal year ended April 27, 2013.

FISCAL 2013 RESULTS
Revenues totalled $62.2 million in fiscal year ended April 27, 2013, versus $73.7 million in the fiscal year ended April 28, 2012. This $11.5 million decrease is mainly attributable to a $9.0 million reduction in revenues from the heavy-duty truck industry as a result of political, economic and fiscal uncertainty in the United States. This uncertainty also caused a reduction of $835,355 in revenues from the sale of wind energy products due to insecurity with regards to the extension of a production tax credit in the United States. The tax credit was extended for a one-year period, to December 31, 2013, as part of the American Taxpayer Relief Act of 2012. In addition, revenues from the bus industry declined by $1.0 million due to the conclusion of a manufacturing contract in fiscal 2013. Conversely, sales of snow removal products increased $324,167, as the Company further benefited from enhanced marketing efforts.

Sigma Industries recorded adjusted earnings before interest, taxes, depreciation and amortization ("EBITDA") of $2.0 million, or 3.2% of revenues, in fiscal 2013, compared with an adjusted EBITDA of $4.9 million, or 6.6% of revenues, in fiscal 2012. This variation reflects the effect of lower business activity on the absorption of fixed overhead costs, a less favourable product mix, as well as higher labour costs. The Company concluded fiscal 2013 with a net loss of $1.4 million, or ($0.12) per basic and diluted share, versus net income of $3.1 million, or $0.27 per basic and diluted share in fiscal 2012. This variation essentially reflects the decrease in adjusted EBITDA between the two periods and a $2.5 million gain on debt settlement recorded in fiscal 2012.

"Throughout most of its 2013 fiscal year, Sigma Industries felt the negative effects of economic, political and fiscal uncertainty that affected the United States. This uncertainty resulted in a reduction of business activity in the heavy-duty truck industry, our most important market. It also had ramifications into other markets, such as wind energy, where the extension of an important tax credit program was only confirmed in the late stages of our fiscal year. Still, our ability to promptly convert sales into cash resulted in further improvement in our financial position," said Denis Bertrand, President and Chief Executive Officer of Sigma Industries.

FOURTH-QUARTER RESULTS
For the three-month period ended April 27, 2013, revenues reached $15.3 million, down from $21.6 million in the three-month period ended April 28, 2012. This reduction of $6.3 million mainly reflects a $5.2 million decrease in sales to the heavy-duty truck industry as a result of political, economic and fiscal uncertainty in the United States. This uncertainty also caused a $770,480 reduction in revenues from wind energy products due to insecurity with regards to the aforementioned tax credit. Further reflecting enhanced marketing efforts, revenues from the sale of snow removal products increased by $374,021. Adjusted EBITDA amounted to $273,313, or 1.8% of revenues, in the fourth quarter of fiscal 2013, versus $1.2 million, or 5.8% of revenues in the fourth quarter of fiscal 2012. Sigma Industries' net loss for the quarter ended April 27, 2013 was $444,315, or ($0.04) per basic and diluted share, compared with net income of $237,965, or $0.02 per basic and diluted share, for the quarter ended April 28, 2012. The latter period also included a gain on debt settlement of $155,350.

CASH FLOW AND FINANCIAL POSITION
Cash flows provided by operating activities generated liquidities of $3.8 million in fiscal 2013, up $1.1 million, or 40.3%, from $2.7 million in fiscal 2012. Fiscal 2013 cash flows include a cash generation of $3.2 million from changes in items of working capital. As a result, Sigma Industries further improved its financial position in fiscal 2013, as the Company's net debt stood at $16.2 million as at April 27, 2013, versus $19.0 million a year earlier.

SUBSEQUENT EVENTS

Amendments to the financing agreement
On August 13, 2013, certain amendments were made to the financing agreement relating to the term loan amounting to $2.1 million. No principal repayment is required before September 2014 and principal installments will be subject to an annual repayment based on an excess cash flow formula.

Renewal of the credit agreement
On August 22, 2013, the Company renewed its credit facilities with its main lender, including the line of credit and certain debts amounting to $13,934,428 as at April 27, 2013 and maturing on December 31, 2013. Amendments to the credit agreement are effective August 22, 2013 and the maturity date of the agreement is August 31, 2014. Terms of use are similar to those of the prior agreement.

OUTLOOK
"Looking ahead, we do not foresee significant improvement in the economy. Still, we believe our base business is solid and our solid reputation in regards to quality and our innovation capabilities should allow us to further penetrate our target markets. We will leverage our proven strengths in improving existing products and developing new value-added solutions for our customers," concluded Mr. Bertrand.

SELECTED FINANCIAL INFORMATION

Consolidated results of operations	Three months ended			Fiscal years ended
(unaudited, in thousands of Canadian dollars except per-share amounts)	April 27, 2013	April 28, 2012		April 27, 2013	April 28, 2012
	$	$		$	$
Revenues	15,275	21,613		62,163	73,696
Adjusted EBITDA	273	1,178		1,994	4,853
Gain on debt settlement	0	(155)		0	(2,518)
Net income (loss)	(444)	238		(1,359)	3,141
Per share (basic and diluted)	(0.04)	0.02		(0.12)	0.27
Reconciliation of EBITDA, adjusted EBITDA and net income
	Three months ended			Fiscal years ended
(unaudited, in thousands of Canadian dollars)	April 27, 2013	April 28, 2012		April 27, 2013	April 28, 2012
	$	$		$	$
Net income (loss)	(444)	238		(1,359)	3,141
PLUS (less):
Income tax expense (recovery)	(35)	56		18	56
Depreciation and amortization	332	425		1,367	1,817
Financial expenses	421	614		1,968	2,357
Gain on debt settlement	0	(155)		0	(2,518)
Adjusted EBITDA	273	1,178		1,994	4,853
PLUS (less):
Foreign exchange loss (gain)	(51)	224		(144)	(329)
Loss (gain) on disposal of property, plant and equipment	5	30		4	(168)
EBITDA	222	1,432		1,854	4,355
Consolidated balance sheet data	As at
(in thousands of Canadian dollars)	April 27, 2013	April 28, 2012
	$	$
Total assets	27,483	32,332
Total liabilities	24,537	28,080
Shareholders' equity	2,946	4,252

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 and metal components, has four operating subsidiaries and employs 400 people. The Company is active in the heavy-duty truck, coach, transit, machinery, agriculture, 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 August 23, 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 audited 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.

Additional information: 
Sigma Industries Inc. 
Denis Bertrand
President and Chief Executive Officer
418-484-5282
[email protected]