SAINT-ÉPHREM-DE-BEAUCE, QC, March 1, 2012 /CNW Telbec/ - Sigma Industries Inc. (TSXV: SSG), a manufacturing company specializing in the production of composite and metal components, today announced results for the third quarter of its 2012 fiscal year ended January 28, 2012. These results reflect the adoption of International Financial Reporting Standards ("IFRS") on May 1, 2011. Results for the corresponding period of the previous year have been restated.
Sales for the quarter rose $6.2 million, or 46.2%, to reach $19.7 million, versus $13.5 million in the third quarter of the previous year. The increase mainly reflects a $5.9-million increase in sales to the heavy-duty truck industry as a result of the global economic recovery and, to a lesser extent, an increase in sales of snow removal products due to a greater market penetration resulting from enhanced efforts.
Reflecting an improved absorption of fixed costs as a result of the higher sales volume, Sigma Industries recorded adjusted earnings before interest, taxes, depreciation and amortization ("EBITDA") of $1.2 million, or 5.9% of sales, compared to an adjusted loss of $396,598 in the third quarter of the previous fiscal year. The Company recorded net income of $123,352, or $0.01 per share, in the third quarter of fiscal 2012, as opposed to net income of ($1.7) million, or ($0.14) per share, a year earlier.
"Sigma Industries has maintained the positive momentum gathered since the beginning of the current fiscal year. Sales have once again grown very strongly and, more importantly, profit margins have further increased and we achieved a positive net income for the second consecutive quarter," said Denis Bertrand, President and Chief Executive Officer of Sigma Industries.
For the first nine months of fiscal 2012, sales were $52.1 million, up 41.7% from $36.8 million in the first nine months of fiscal 2011. Adjusted EBITDA was $3.6 million, as opposed to an adjusted loss of $209,417 a year earlier. Of note, a non-recurring gain on debt settlements of $2.4 million was recorded in the second quarter of the current fiscal year as a result of the winding-up of a U.S. subsidiary, while a similar gain of $6.0 million related to the Company's restructuring plan was recorded in the previous fiscal year.
Net income excluding gains on debt settlements was $540,378, or $0.05 per share, in the first nine months of the current fiscal year, versus net income of ($4.3 million), or ($0.39) per share, last year. Net income including these gains was $2.9 million, or $0.25 per share, for the first nine months of the current fiscal year, compared to $1.7 million, or $0.15 per share, a year earlier.
CASH FLOW AND FINANCIAL POSITION
This significant improvement in operating results enabled the Company to generate cash flow from operations before changes in working capital of $2.6 million since the beginning of fiscal 2012. These liquidities allowed the Company to reduce its long-term debt by almost $1.1 million in the first nine months of fiscal 2012. Moreover, as at January 28, 2012, the Company's net debt was $24.0 million, down from $25.0 million three months earlier. As at that same date, the Company was in compliance with its financial ratios.
APPOINTMENT OF A NEW CHIEF FINANCIAL OFFICER
The Company also announced today that Mr. Guy Archambault, chief financial officer of Sigma Industries, will soon retire. His successor, Mr. Pierre Massicotte, CA, CFA, is assuming the duties of vice-president finance and chief financial officer effective today.
"The outlook is favourable, while our profitability and financial position continue to gradually improve. Activity remains strong in the heavy-duty truck market, which should allow us to conclude the fiscal year on a positive note. However, we remain cautious as the global economic situation remains fragile on several fronts. For this reason, it is imperative to stay the course on reducing operating expenses and optimizing manufacturing processes. To this point, our subsidiaries have accomplished significant progress, but management is fully aware that we must sustain our efforts in order to reach our ultimate objective to create lasting value for our shareholders," concluded Mr. Bertrand.
SELECTED FINANCIAL INFORMATION
|Consolidated results of operations||Three months ended||Nine months ended|
|(unaudited, in thousands of Canadian dollars except per-share amounts)||Jan. 28, 2012||Jan. 22, 2011||Jan. 28, 2012||Jan. 22, 2011|
|Net income before gain on debt settlements||123||(1,660)||540||(4,301)|
|Per share (basic and diluted)||0.01||(0.14)||0.05||(0.39)|
|Gain on debt settlements||0||0||(2,363)||(5,991)|
|Per share (basic and diluted)||0.01||(0.14)||0.25||0.15|
|Reconciliation of adjusted EBITDA and net income||Three months ended||Nine months ended|
|(unaudited, in thousands of Canadian dollars)||Jan. 28, 2012||Jan. 22, 2011||Jan. 28, 2012||Jan. 22, 2011|
|Depreciation and amortization||463||532||1 392||1,622|
|Gain on debt settlements||0||0||(2,363)||(5,991)|
|Consolidated balance sheet data||As at|
|(in thousands of Canadian dollars)||Jan. 28, 2012||April 30, 2011|
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") in assessing its financial performance. As there is no generally accepted method of calculating this financial measure, it 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. This measure does 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 close to 475 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.
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 March 1, 2012, 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 unaudited interim 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.
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