Alberta’s Commercial Solutions reports drop in revenue for its 2nd quarter
Edmonton, AB -- Commercial Solutions Inc., a Canadian distributor of bearings, power transmission, oilfield, indust...
Edmonton, AB — Commercial Solutions Inc., a Canadian distributor of bearings, power transmission, oilfield, industrial, safety, survey and resource management equipment products, has announced its financial results for the second quarter ended March 31, 2009.
Financial highlights from the fiscal 2009 second quarter are as follows:
For the three-month period ended March 31, 2009, Commercial reported revenue of $29.3 million compared to revenue of $37.5 million for the same period last year, representing a year-over-year decrease of 21.7%.
For the quarter, the company reported a 140.2% decrease in EBITDA to $(0.7) million versus $1.8 million for the same period last year. Due to the $19.5 million goodwill impairment charge, net loss for the quarter amounted to $20.7 million compared to net earnings of $0.6 million in the same period last year. Without the goodwill impairment charge, the quarterly loss would have been $1.1 million and basic and diluted EPS would have been $(0.06).
For the six-month period ended March 31, 2009, the goodwill impairment charge decreased earnings, creating a loss of $20.6 million or loss of $1.03 per share (basic and diluted) as compared to net earnings of $0.7 million and EPS of $0.03 (basic and diluted) in the prior period.
Revenues decreased by 8.5% to $65.1 million from $71.2 million and EBITDA fell by 93.7% to $0.2 million from $2.8 million for the prior year. Without the goodwill impairment charge, the year-to-date net loss would have been $1.1 million and basic and diluted EPS would have been $(0.05).
Fiscal 2009 continues to be a challenging year with all of Commercial’s primary industry sectors facing a downturn, especially the energy sector. The Company has initiated some major cutbacks since the beginning of 2009, which has resulted in a reduction of operating costs by 7.0% from the prior quarter. With the implemented programs in place, total annualized savings will approximate $6.0 million.
Jim Barker, president and chief executive officer of Commercial, noted “Our primary objective is to achieve a cost structure to protect and improve EBITDA and cash position. We are prepared to take additional measures should markets continue to deteriorate.”
Due to the prolonged challenging economic conditions, the Company felt that it was necessary to perform an interim assessment of balance sheet intangibles, which resulted in an impairment charge to goodwill. The goodwill impairment charge is an adjustment that does not have an impact on Commercial’s cash position, cash flow from operating activities, revolver availability or liquidity position, and does not have any effect on current or future operations of the Company.
Headquartered in Edmonton, AB, Commercial is one of Canada’s leading independent industrial distributors with 30 services centres and about 295 employees located across Canada. It offers more than 160,000 items critical to maintenance, repair and operations (MRO) and original equipment manufacturer (OEM) customers.
The company represents 450 leading manufacturers and serves over 11,000 customer accounts within a broad cross-section of industries, including oil and gas, forestry, food processing, chemical processing, mining and aggregate, utilities, agriculture and construction.
Commercial trades under the symbol “CSA” on the Toronto Stock Exchange (TSX). For further information on the company, please visit www.commercialsolutions.ca and for detailed financial information visit www.sedar.com.