Sigma Industries reports fiscal 2015 second quarter results

SAINT-ÉPHREM-DE-BEAUCE, QC, Dec. 8, 2014 /CNW Telbec/ - Sigma Industries Inc. (TSXV: SSG), a manufacturing company specializing in the production of composite components, announces results for the second quarter of its 2015 fiscal year ended October 25, 2014. The results reflect the sale of the PNS Tech division effective October 1, 2013 and in accordance with IFRS, this division has been presented as discontinued operations in the Company's unaudited condensed interim consolidated financial statements.

"Sigma Industries' improved operating results reflect the strength of the U.S. economy and further validate our strategic decision to focus on our core competence of closed mould manufacturing," said Denis Bertrand, President and Chief Executive Officer of Sigma Industries. "Sales rose by 6.9%, while specialization initiatives and the favourable impact of greater business activity led to improved profitability. We also further strengthened our financial position, as we received final tranche payments from a private placement. The sums received, combined with a solid cash flow provided by operating activities, were used to reduce our bank loan by more than $1.0 million during the quarter. With this greater financial flexibility, we can now leverage Sigma's expertise and its proven reputation in regards to quality and innovation to further develop its presence in its strategic markets to the benefit of customers, employees and shareholders."

SECOND QUARTER RESULTS
Revenues from continuing operations for the second quarter of fiscal 2015 totalled $15.3 million, up 6.9% from $14.3 million in the second quarter of fiscal 2014. This increase is mainly attributable to a rise of $620,809 in sales to the heavy-duty truck market resulting from the recovery in that market. In addition, sales to the wind energy market rose $568,016 due to increased demand from an important customer, while sales to the bus industry increased by $106,223 as a result of a new manufacturing contract.

Sigma Industries recorded adjusted earnings before interest, taxes, depreciation and amortization ("EBITDA") from continuing operations of $1.2 million, or 7.9% of revenues, in the second quarter of fiscal 2015, versus adjusted EBITDA of $696,850, or 4.9% of revenues, in the second quarter of last year. This increase is attributable to the Company's specialization in closed mould manufacturing and to the favourable effect of higher business activity on the absorption of fixed overhead costs.

In the second quarter, the Company recorded a gain on lease cancellation of $601,868 following the definitive closure of its U.S. facility during the period. As a result, net income from continuing operations for the second quarter of fiscal 2015 amounted to $1.1 million, or $0.09 per basic and diluted share, versus a net loss from continuing operations of ($18,134), or ($0.001) per basic and diluted share last year.

During the quarter, the Company renewed its credit facility and a bank loan with its main lender. The new maturing date on the credit facility is August 31, 2015. The Company also received the final portions of a secured loan and of secured convertible debentures as part of a private placement. These sources of funds show the confidence that Sigma Industries' lenders have in its business plan and provide the Company flexibility to proceed with its execution.

SIX-MONTH RESULTS
For the six-month period ended October 25, 2014, revenues from continuing operations amounted to $30.3 million, versus $27.8 million for the six-month period ended October 26, 2013. Adjusted EBITDA from continuing operations totalled $2.0 million, or 6.7% of revenues, up from $619,824, or 2.2% of revenues, last year. Reflecting the aforementioned gain, net income from continuing operations reached $1.1 million, or $0.10 per basic and diluted share, versus a net loss from continuing operations of ($834,906), or ($0.07) per basic and diluted share, a year earlier.  

SELECTED FINANCIAL INFORMATION

Consolidated results of operations		Three months ended			Six months ended
(unaudited, in thousands of Canadian dollars except per-share amounts)		October 25, 2014	October 26, 2013		October 25, 2014	October 26, 2013
		$	$		$	$
Revenues from continuing operations		15,286	14,302		30,287	27,795
Adjusted EBITDA from continuing operations		1,213	697		2,020	620
Net income (loss) from continuing operations		1,068	(18)		1,125	(835)
	Per share (basic and diluted)	0.09	(0.001)		0.10	(0.07)
Net income (loss)		1,068	192		1,125	(591)
	Per share (basic and diluted)	0.09	0.02		0.10	(0.05)

 

Reconciliation of EBITDA, adjusted EBITDA and net income (unaudited, in thousands of Canadian dollars)	Three months ended			Six months ended
	October 25, 2014	October 26, 2013		October 25, 2014	October 26, 2013
	$	$		$	$
Net income (loss)	1,068	192		1,125	(591)
MINUS:
Net income from discontinued operations	-	210		-	244
Net income (loss) from continuing operations	1,068	(18)		1,125	(835)
PLUS (less):
Income tax expense recovery	-	(21)		(10)	(21)
Gain on lease cancellation	(602)	-		(602)	-
Depreciation and amortization	310	307		622	621
Financial expenses	437	429		885	855
Adjusted EBITDA from continuing operations	1,213	697		2,020	620
PLUS (less):
Foreign exchange gain	(148)	(91)		(44)	(93)
Gain on disposal of property, plant and equipment	(1)	-		-	-
EBITDA from continuing operations	1,064	606		1,976	527

 

Consolidated balance sheet data	As at
(in thousands of Canadian dollars)	October 25, 2014	April 26, 2014
	$	$
Total assets	25,581	25,344
Total liabilities	24,562	25,854
Shareholders' equity	1,019	(510)

 

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 components, has two operating subsidiaries and employs 350 people. The Company is active in the heavy-duty truck, coach, transit, machinery 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 December 8, 2014, 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 condensed interim 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.

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