SAINT-ÉPHREM-DE-BEAUCE, QC, Dec. 13 /CNW Telbec/ - Sigma Industries Inc. (TSX Venture Exchange: SSG), a manufacturing company specialized in the production of composite and metal components, today announced results for the second quarter of its 2011 fiscal year ended October 23, 2010.
Sales reached $12.0 million, an increase of 12.2% from $10.7 million in the second quarter a year ago. This growth reflects a $1.0-million increase in sales to the heavy-duty truck industry resulting from a recovery in business activity in the sector following the trough of the recession. Moreover, sales to the bus industry rose by $693,766 as a result of new contracts in the transit bus market. However, sales of snow removal products declined $613,125, as last winter's unfavourable weather conditions reduced the need to purchase new equipment for certain clients.
The Company generated an adjusted loss before interest, taxes, depreciation and amortization of $273,089 compared with an adjusted loss of $291,723 in the second quarter of fiscal 2010. Despite a more robust business volume, non-recurring general, administrative and operating expenses related to the Company's reorganization process caused a reduction in operating profitability. This process also resulted in a non-recurring gain of $6.0 million on debt settlement. As a result, the Company recorded net earnings of $4.3 million, or $0.100 per share, fully diluted, in the second quarter of fiscal 2011, as opposed to a net loss of $1.4 million, or $0.032 per share, fully diluted, for the same period a year earlier.
As at October 23, 2010, the Company's balance sheet showed total net debt of $25.2 million, down from $26.2 million three months earlier. As at the same date, compliance with all financial ratios has been suspended by the lender until the end of the current fiscal year. Subsequent to the end of the second quarter, the Company announced the signing of a new banking agreement which also includes new terms for the repayment of certain long-term debts.
"The second quarter confirmed signs of recovery in the heavy-duty truck market," said Denis Bertrand, President and Chief Executive Officer of Sigma Industries. "This gradual recovery in our target markets should yield business opportunities that we intend to exploit in the best possible time frame. In parallel, the support received from our partners with respect to our reorganization plan is a true mark of confidence. Furthermore, in order to better control manufacturing costs and optimize capacity, we intend to integrate certain production phases currently outsourced. To this date, our team has successfully coped with all challenges and we remain confident in regards to our success as well as our business outlook."
SIX MONTHS RESULTS
For the first six months of the current fiscal year, sales amounted to $23.3 million, up 6.2% from $21.9 million in the first six months a year ago. The Company recorded adjusted earnings before interest, taxes, depreciation and amortization ("EBITDA") of $187,181, as opposed to an adjusted loss of $783,350 in the first six months of fiscal 2010. As a result of the gain on debt settlement, the Company recorded net earnings of $3.3 million, or $0.078 per share, fully diluted, versus a net loss of $2.8 million, or $0.066 per share, fully diluted, last year.
SELECTED FINANCIAL INFORMATION
|Consolidated results of operations||Three months ended||
||Six months ended|
| (unaudited, in thousands of Canadian dollars
except per-share amounts)
|October 23, 2010||October 24, 2009||October 23, 2010|| October 24, 2009
|Gain on debt settlement||(5,991)||-||
|Earnings (loss) before income taxes||4,285||(1,821)||
|Net earnings (loss)||4,285||(1,351)||
|Net earnings (loss) per share (basic and diluted)||0.100||(0.032)||
| Reconciliation of adjusted EBITDA and Net earnings (loss)
(unaudited, in thousands of Canadian dollars)
|Three months ended||
||Six months ended|
|October 23, 2010||October 24, 2009||
||October 23, 2010||October 24, 2009|
|Net earnings (loss)||4,285||(1,352)||
|Income tax recovery||-||(469)||
|Depreciation and amortization||520||738||
|Gain on debt settlement||(5,991)||-||
|Consolidated balance sheet data||As at|
|(in thousands of Canadian dollars)||October 23, 2010||April 24, 2010|
|Shareholders' equity||4 263||734|
NON-GAAP FINANCIAL MEASURES
The information in this press release includes certain measures that are not financial measures prescribed under GAAP. Sigma Industries uses earnings before interest, taxes, depreciation and amortization ("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 long-term 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 GAAP.
ABOUT SIGMA INDUSTRIES
Sigma Industries Inc. (TSX-V: SSG), a manufacturing company specializing in the production of composite and metal components, has five operating subsidiaries and employs close to 350 people. The Company is active in the heavy-duty truck, coach, transit and bus, train and subway, 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 December 10, 2010, 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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