Savaria Corporation (TSX:SIS), North America's leader in the
accessibility industry, today disclosed its results for the third
quarter ended September 30, 2012.
Third-Quarter Highlights
-- Relocation of Brampton's manufacturing operations to a newly acquired
facility with a one-time moving cost of $857,000;
-- Revenue of $16.2 million compared to $17.4 million in 2011, down 7.1% in
spite of losing almost 15% of production time from moving manufacturing
operations;
-- Operating loss of $135,000 in 2012, compared to operating income of $1.3
million in 2011;
-- Signing of a landmark project in China valued at $850,000 for 27
accessibility lifts in nine high-speed train stations to be completed by
the end of the year.
A Word from the President
"Third quarter results were adversely affected by the relocation
of our manufacturing operations at our Brampton, Ontario plant. In
addition to decreasing revenue due to the temporary shutdown of
operations, it resulted in moving expenses to the amount of
$857,000 during the third quarter. On the other hand, this
investment will result in yearly savings of some $1 million,"
declared Marcel Bourassa, President and Chief Executive Officer of
Savaria.
"However, two events that occurred during the third quarter will
contribute positively to the future results of the company.
Firstly, our main North American competitor, TK Access, ceased
operations on August 22, which will potentially enable our
Corporation to increase our market share and revenue; secondly, our
Chinese subsidiary has won its first major contract, for the
delivery of 27 platform lifts, to equip the high-speed train
stations on the island of Hainan in China.
"We have a strong balance sheet, which enables us to further our
development," concluded Mr. Bourassa.
Operating Results (Comparative Analysis with Third Quarter and
First Three Quarters of 2011)
-- In third quarter 2012, the Corporation reported revenue of $16.2 M,
compared to $17.4 M in 2011, a decrease of $1.2 M or 7.1%. This decrease
is mainly due to a temporary shutdown of the Brampton, Ontario plant's
operations to relocate said operations to a building acquired last
April, and to a negative impact of $265,000 from variations in foreign
exchange rates. For the first three quarters of 2012, revenue is stable
at $48.9 M.
-- Gross margin for third quarter 2012 is down by $1.7 M, representing
21.4% of revenue compared to 29.5% in 2011. For the first three quarters
of 2012, gross margin is down by $1.2 M, representing 25.4% of revenue
compared to 27.9% in 2011. In addition to the decrease in revenue,
moving costs of $770,000 for the third quarter and $921,000 for the
nine-month period also have had an adverse effect on gross margins.
-- Operating income for third quarter 2012 is down by $1.4 M or 110% from a
gain of $1.3 M in 2011 to a loss of $135,000 in 2012. For the first
three quarters of 2012, the decrease was $697,000 or 30%, from $2.4 M to
$1.7 M.
-- Net income for third quarter is down by 133%, from a gain of $1.3 M in
2011 to a loss of $425,000 in 2012, a decrease of $1.7 M. For the first
three quarters, net income is down 61%, from $1.6 M to $626,000, a
decrease of $977,000.
-- EBITDA for third quarter was down $2.2 M from $2.3 M in 2011 to $62,000
in 2012. For the first three quarters, EBITDA decreased by $1.2 M, from
$3.9 M in 2011 to $2.7 M in 2012, a decrease of 32%.
Savaria Corporation (savaria.com) is North America's leader in
the accessibility industry focused on meeting the needs of people
with mobility challenges. Savaria designs, manufactures and
distributes primarily elevators for home and commercial use, as
well as stairlifts and vertical and inclined platform lifts. In
addition, it converts and adapts wheelchair accessible automotive
vehicles and offers scooters and motorized wheelchairs. The
diversity of its product line, one of the world's most
comprehensive, enables the Corporation to stand out by proposing an
integrated and customized solution for its customers' mobility
needs. Its operations in China have substantially grown since 2006
and the collaboration with Savaria's other Canadian facilities
increases its competitive edge in the market place. The Corporation
records slightly over 50% of its sales outside Canada, primarily in
the United States. It has a sales network of some 600 retailers in
North America and employs close to 400 people at its head office in
Laval and at its plants in Montreal (Quebec), Brampton and London
(Ontario), Calgary (Alberta) and Huizhou (China).
Compliance with International Financial Reporting Standards
("IFRS")
The information appearing in this press release has been
prepared in accordance with IFRS. However, the Corporation uses
EBITDA for analysis purposes to measure its financial performance.
This measure has no standardized definition in accordance with IFRS
and is therefore regarded as a non-IFRS measure. This measure may
therefore not be comparable to similar measures reported by other
companies. Reconciliation between net income for the period and
EBITDA is provided in the Financial Highlights section below.
Cautionary Notice Regarding Forward-Looking Statements
Certain information in this press release may constitute
"forward-looking statements" regarding Savaria, including, without
being limited thereto, understanding of the elements that might
affect the Corporation's future, relating to its financial or
operating performance, the costs and schedule of future
acquisitions, supplementary capital expenditure requirements and
legislative matters. Most frequently, but not invariably,
forward-looking statements are identified by the use of such terms
as "plan", "expect", "should", "could", "budget", "expected",
"estimated" "forecast", "intend", "anticipate", "believe", variants
thereof (including negative variants) or statements that certain
events, results or shares "could", "should" or "will" occur or be
achieved. Such statements involve known and unknown risks,
uncertainties and other factors liable to cause Savaria's actual
results, performance or achievements to differ materially from
those set forth in or underlying the forward-looking statements.
Such factors notably include general, economic, competitive,
political and social uncertainties. Although Savaria has attempted
to identify the key elements liable to cause actual measures,
events or results to differ from those described in the
forward-looking statements, other factors could have an impact on
the reality and produce unexpected results. The forward-looking
statements contained herein are valid at the date of this press
release. As there can be no assurance that these forward-looking
statements will prove accurate, actual future results and events
could differ materially from those anticipated therein.
Accordingly, readers are strongly advised not to unduly rely on
these forward-looking statements.
Complete financial statements and the management's report for
quarter ended September 30, 2012 will be available shortly on
Savaria's website and on SEDAR (www.sedar.com).
Financial Highlights
----------------------------------------------------------------------------
(in thousands,
except per-
share amounts
and
percentages - Quarters Ended Nine-Month Periods Ended
unaudited) September 30, September 30,
--------------------------------------------------------------
2012 2011 Variation 2012 2011 Variation
----------------------------------------------------------------------------
Revenue $16,166 $17,395 (7.1)% $48,869 $48,916 (0.1)%
----------------------------------------------------------------------------
Gross margin
as a % of
revenue 21.4% 29.5% n/a 25.4% 27.9% n/a
----------------------------------------------------------------------------
Operating
costs $3,588 $3,825 (6.2)% $10,775 $11,289 (4.6)%
As a % of
revenue 22.2% 22% n/a 22% 23.1% n/a
----------------------------------------------------------------------------
Operating
income (loss) $(135) $1,307 (110)% $1,661 $2,358 (29.6)%
As a % of
revenue (0.8)% 7.5% n/a 3.4% 4.8% n/a
----------------------------------------------------------------------------
Gain (loss) on
foreign
exchange $(151) $513 (129)% $(117) $315 (137)%
----------------------------------------------------------------------------
Net (loss)
income $(425) $1,286 (133)% $626 $1,603 (60.9)%
----------------------------------------------------------------------------
Earnings per
share -
diluted $(0.02) $0.06 (133)% $0.03 $0.07 (57.1)%
----------------------------------------------------------------------------
EBITDA(1) $62 $2,332 (97.3)% $2,682 $3,929 (31.7)%
----------------------------------------------------------------------------
EBITDA per
share -
diluted $0.003 $0.10 (97)% $0.11 $0.17 (35.3)%
----------------------------------------------------------------------------
Dividends
declared per
share - - n/a $0.094 $0.102 n/a
----------------------------------------------------------------------------
Weighted
average
number of
common shares
outstanding -
diluted 23,145 23,279 (0.6)% 23,141 23,261 (0.5)%
----------------------------------------------------------------------------
--------------------------------------------
As at Sep. 30, As at Dec. 31,
2012 2011
--------------------------------------------
Total assets $50,182 $42,413
--------------------------------------------
Total
liabilities $31,899 $22,268
--------------------------------------------
Shareholders'
equity $18,283 $20,145
--------------------------------------------
(1) Reconciliation of EBITDA with net income provided in the following
table
Although EBITDA is not recognized according to IFRS, it is used
by management, investors and analysts to assess the Corporation's
financial and operating performance.
Reconciliation of EBITDA with Net Income
----------------------------------------------------------------------------
Nine-Month Periods
(in thousands of dollars - Quarters Ended Ended
unaudited) September 30, September 30,
-----------------------------------------------
2012 2011 2012 2011
----------------------------------------------------------------------------
Net income (loss) $(425) $1,286 $626 $1,603
----------------------------------------------------------------------------
Plus :
Interest on long-term debt 204 149 522 430
----------------------------------------------------------------------------
Interest expense and banking
fees 23 26 68 155
----------------------------------------------------------------------------
(Recovery of) income tax
expense (141) 487 349 640
----------------------------------------------------------------------------
Depreciation of fixed assets 235 185 588 538
----------------------------------------------------------------------------
Amortization of intangible
assets 176 201 556 588
----------------------------------------------------------------------------
Less:
Interest income 10 2 27 25
----------------------------------------------------------------------------
EBITDA $62 $2,332 $2,682 $3,929
----------------------------------------------------------------------------
Contacts: Helene Bernier, CPA, CA Vice-President, Finance
1-800-931-5655, ext. 248helene.bernier@savaria.com Marcel Bourassa
President and Chief Executive Officer
1-800-661-5112marcel.bourassa@savaria.com www.savaria.com
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