Sigma Industries Reports Fiscal 2016 Second Quarter Results
By Marketwired News
By Marketwired News
SAINT-EPHREM-DE-BEAUCE, QUEBEC–(Marketwired – Dec. 16, 2015) – Sigma Industries Inc. (TSX VENTURE:SSG), a manufacturing company specializing in the production of composite components, announces results for the second quarter of its 2016 fiscal year ended October 31, 2015.
“Sigma Industries’ operating results continued to improve in the second quarter of fiscal 2016. Revenues rose 17.4% driven by favourable market conditions in the heavy-duty truck and bus markets, while our level of profitability confirms that we are progressively reaping benefits from our strategic decision to focus on our core competence of closed mould manufacturing. We have made significant progress since initiating this refocus, but sustained efforts to enhance the work flow throughout the organization can lead to additional efficiency gains and cost reductions. Growth in our main markets should give rise to new business opportunities and given its reputation for innovation, Sigma Industries is well positioned to leverage its expertise in the production of high-quality components,” said Denis Bertrand, President and Chief Executive Officer of Sigma Industries.
SECOND QUARTER RESULTS
Revenues for the second quarter of fiscal 2016 totalled $18.0 million, up 17.4% from $15.3 million in the second quarter of fiscal 2015. This growth mainly reflects increases of $1.1 million and $1.0 million, respectively, in sales to the bus and heavy-duty truck markets due to greater industry shipments, as well as a higher year-over-year conversion rate applied to U.S. dollar denominated sales as a result of currency fluctuations. The increase in sales to the heavy duty-truck market also partially reflects higher tooling sales to that product line.
Sigma Industries recorded adjusted earnings before interest, taxes, depreciation and amortization (“EBITDA”) of $1.2 million, or 6.7% of revenues, in the second quarter of fiscal 2016, versus $1.2 million, or 7.9% of revenues, a year earlier. During the period, benefits stemming from the specialization in closed mould manufacturing were offset by a less favourable product mix versus last year. In addition, the Company incurred a foreign exchange loss in the second quarter of fiscal 2016, as opposed to a foreign exchange gain in the second quarter of fiscal 2015.
During the second quarter of fiscal 2016, the Company recorded a $263,538 gain following a fire that severely damaged a facility in February 2015. This gain represented final proceeds from the insurance claim that exceeded the book value of the affected assets. During the second quarter of fiscal 2015, the Company had recorded a gain on lease cancellation of $601,868 following the definitive closure of its U.S. facility during that period.
As a result, Sigma Industries concluded the second quarter of fiscal 2016 with net income of $717,919, or $0.06 per basic and diluted share, compared with $1.1 million, or $0.09 per basic and diluted share, a year earlier.
For the six-month period ended October 31, 2015, revenues amounted to $34.4 million, versus $30.3 million in the six-month period ended October 25, 2014. Adjusted EBITDA reached $2.2 million, or 6.5% of revenues, versus $2.0 million, or 6.7% of revenues, last year. Reflecting the aforementioned gains, net income totalled $1.0 million, or $0.09 per basic and diluted share, in the first half of fiscal 2016, compared with net income of $1.1 million, or $0.10 per basic and diluted share, in the first half of fiscal 2015.
SELECTED FINANCIAL INFORMATION
|Consolidated results of operations||Three months ended||Six months ended|
|(unaudited, in thousands of Canadian dollars except per-share amounts)||October 31, 2015||October 25, 2014||October 31, 2015||October 25, 2014|
|Per share (basic and diluted)||0.06||0.09||0.09||0.10|
|Reconciliation of EBITDA, adjusted EBITDA and net income||Three months ended||Six months ended|
|(unaudited, in thousands of Canadian dollars)||October 31, 2015||October 25, 2014||October 31, 2015||October 25, 2014|
|Income tax expense (recovery)||–||–||1||(10||)|
|Gain on lease cancellation||–||(602||)||–||(602||)|
|Gain on disaster||(264||)||–||(264||)||–|
|Depreciation and amortization||378||310||730||622|
|Foreign exchange loss (gain)||45||(148||)||87||(44||)|
|Loss (gain) on disposal of property, plant and equipment||14||(1||)||14||–|
|Consolidated balance sheet data||As at|
|(in thousands of Canadian dollars)||October 31, 2015||May 2, 2015|
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 VENTURE:SSG), a manufacturing company specializing in the production of composite components, has two operating subsidiaries and employs 325 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.
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 16, 2015, 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.
Sigma Industries Inc.
President and Chief Executive Officer