Unisync Reports Second Quarter Financial Results
By Marketwired News
By Marketwired News
VANCOUVER, BC–(Marketwired – May 19, 2016) – Unisync Corp. (TSX VENTURE: UNI) (“Unisync”) today reported revenues of $13.7 million for the three months ended March 31, 2016, representing an increase of 20.7% over the last fiscal years’ corresponding quarter revenues of $11.4 million. The Company’s net loss of $328,506 in the quarter (Q2 2015: net income of $74,374) was mainly the result of an increase in the cost of off-shore purchases caused by the sharp decline in the value of the Canadian dollar.
Unisync operates through two business segments: Unisync Group Limited (“UGL”) of Mississauga, Ontario and Peerless Garments LP (“Peerless”) of Winnipeg, Manitoba. UGL is a leading customer-focused provider of corporate apparel, serving a list of leading Canadian iconic brands in a variety of industries. Peerless specializes in the production and distribution of highly technical protective garments, military operational clothing and accessories for a broad spectrum of Federal, Provincial and Municipal government departments and agencies such as the Armed Forces and the RCMP.
The UGL segment recorded a gross profit margin of 12% during the quarter ended March 31, 2016, down from more normalized historical levels of 19-20%. The UGL segment’s gross profit margins in recent reporting periods have been negatively impacted by the weakening of the Canadian dollar against the US dollar and its effect on the segment’s offshore product purchases. The Peerless segment gross profit margin of 17% for the current quarter was down from 19% in the same period in the prior year due to lower absorption of fixed costs on the reduced revenue generated in the most recent period. As a result, consolidated earnings before interest, taxes, depreciation and amortization (“EBITDA”) declined to $68,228 compared to $488,687 for the corresponding quarter last year.
The general and administrative expense increase of $620,352 over the corresponding quarter last year was mainly attributable to expenses associated with the addition of the Carleton and Omega acquisitions and the establishment of the Quebec business development office. Interest expense of $239,596 for the current quarter was up from $164,419 in the same period in fiscal 2015 as a result of the introduction of deferred shareholder advances to finance the effect of increased sales volume on working capital. Share-based payment expense associated with the grant of stock options in 2015 amounted to $55,752 (Q2 2015: Nil).
More detailed information is contained in the Company’s Interim Financial Statements for the three months ended March 31, 2016 and Management Discussion and Analysis dated May 29, 2016 which may be accessed at www.sedar.com.
Approximately 55% of the UGL segment’s direct expenses are made in US dollars relating to offshore product purchases that take six months on average to be converted to sales. The recent appreciation of the Canadian dollar against the US dollar combined with sourcing changes to offshore duty-free jurisdictions should start to improve margins by the last quarter of this fiscal year. The combination of improved margins and a significant increase in projected revenues from UGL’s established and recently acquired accounts, is expected to result in a significant increase in profitability for the UGL segment in Fiscal 2017.
The Peerless segment is experiencing an upturn in orders requiring a build-up in production staff and sub-contractor capabilities, which is also expected to result in increased future revenues and profitability in this business segment.
The combined operations of Unisync represent a vertically integrated and proudly Canadian enterprise with exceptional capabilities in garment design, domestic manufacturing and off-shore outsourcing, combined with state-of-the-art web based B2B ordering, distribution and program management systems. For more information on our capabilities, products and services please visit our website at www.unisyncgroup.com.
On Behalf of the Board of Directors
Douglas F Good
Forward Looking Statements
This news release may contain forward-looking statements that involve known and unknown risk and uncertainties that may cause the Company’s actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied in these forward-looking statements. Any forward-looking statements contained herein are made as of the date of this news release and are expressly qualified in their entirety by this cautionary statement. Except as required by law, the Company undertakes no obligation to publicly update or revise any such forward-looking statements to reflect any change in its expectations or in events, conditions or circumstances on which any such forward-looking statements may be based, or that may affect the likelihood that actual results will differ from those set forth in the forward-looking statements.
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.
Investor relations contacts:
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Douglas F Good
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