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Sigma Industries Reports Fiscal 2013 Second Quarter Results

Friday, November 23, 2012 5:00 PM


SAINT-ÉPHREM-DE-BEAUCE, QC, Nov. 23, 2012 /CNW Telbec/ - Sigma Industries Inc. (TSXV: SSG), a manufacturing company specializing in the production of composite and metal components, today announced results for the second quarter of its 2013 fiscal year ended October 27, 2012.

Revenues totalled $15.3 million in the second quarter of fiscal 2013 compared with $17.2 million in the second quarter of fiscal 2012. This $1.9 million decrease is mainly attributable to a $1.3 million reduction in revenues from the heavy-duty truck industry as a result of economic uncertainty in the United States. In addition, revenues from the sale of industrial products declined by $178,597, or 28.8%, from a year ago due to strong demand for heavy equipment in the second quarter of fiscal 2012.

Sigma Industries recorded adjusted earnings before interest, taxes, depreciation and amortization ("EBITDA") of $785,222, or 5.1% of revenues, in the second quarter of fiscal 2013, down from $1.8 million, or 10.4% of revenues, a year earlier. This variation reflects the effect of lower business activity on the absorption of fixed costs.

The Company concluded the second quarter of fiscal 2013 with a net loss of $160,754, or $0.01 per basic and diluted share, versus net income of $3.1 million, or $0.26 per basic and diluted share for the same period a year ago. Excluding a $2.4-million gain on debt settlement recorded in the second quarter of fiscal 2012, net income for that period was $730,891, or $0.06 per basic and diluted share.

"Despite an increasingly hesitant economy, Sigma Industries achieved satisfactory results in the second quarter of fiscal 2013. Uncertainty, mainly with regards to the U.S. economic and fiscal situation, led to a gradual decline in sales of heavy-duty trucks, our main sector of activity which accounts for more than 60% of revenues," said Denis Bertrand, President and Chief Executive Officer of Sigma Industries.

SIX-MONTH RESULTS
For the six-month period ended October 27, 2012, revenues amounted to $33.4 million, up $1.0 million or 3.0%, from $32.4 million in the six-month period ended October 29, 2011. This variation essentially results from a $1.2 million increase in revenues from the heavy-duty truck industry. Adjusted EBITDA reached $1.6 million, or 4.9% of revenues, compared with $2.5 million, or 7.8% of revenues, a year earlier. Sigma Industries' net loss for the semester ended October 27, 2012 was $185,844, or $0.02 per basic and diluted share, compared with net income of $2.8 million, or $0.24 per share for the semester ended October 29, 2011. Excluding the gain on debt settlement recorded in the first half of last year, net income for that period was $417,026, or $0.04 per basic and diluted share.

CASH FLOW AND FINANCIAL POSITION
Cash flow from operations before changes in items of working capital reached $1.1 million in the first half of fiscal 2013. This cash generation enabled Sigma Industries to further improve its financial position. As a result, the Company's net debt stood at $17.9 million as at October 27, 2012, versus $19.0 million at the beginning of the fiscal year.

During the quarter, the Company successfully renegotiated its bank line of credit and two long-term loans with its principal bankers. More importantly, these agreements provide more favourable terms and conditions, including a lower interest rate.

OUTLOOK
"The successful renegotiation of our bank line of credit and of certain long-term loans will enhance our flexibility, as we focus on executing our strategic plan. We strongly believe that Sigma's solid reputation with regards to quality and its innovation capabilities should result in further market penetration, as we focus on improving existing products and developing new value-added solutions for our customers," concluded Mr. Bertrand.

SELECTED FINANCIAL INFORMATION

           
Consolidated results of operations Three months ended   Six months ended
(unaudited, in thousands of Canadian dollars except per-share amounts) October 27,
2012
October 29,
2011
  October 27,
2012
October 29,
2011
  $ $   $ $
Revenues 15,304 17,236   33,384 32,400
Adjusted EBITDA 785 1,786   1,649 2,519
Gain on debt settlement 0 2,363   0 2,363
Net income (loss) (161) 3,094   (186) 2,780
Per share (basic and diluted) (0.01) 0.26   (0.02) 0.24
           
           
Reconciliation of adjusted EBITDA and net income
(unaudited, in thousands of Canadian dollars)
Three months ended   Six months ended
October 27,
2012
October 29,
2011
  October 27,
2012
October 29,
2011
  $ $   $ $
Net income (loss) (161) 3,094   (186) 2,780
PLUS (less):          
Income tax expense (recovery) 59 0   32 0
Depreciation and amortization 336 472   697 929
Financial expenses 551 583   1,106 1,173
Gain on debt settlement 0 2,363   0 2,363
Adjusted EBITDA 785 1,786   1,649 2,519

     
Consolidated balance sheet data   As at
(in thousands of Canadian dollars)   October 27, 2012 April 28, 2012
    $ $
Total assets   29,202 32,332
Total liabilities   25,050 28,080
Shareholders' equity   4,152 4,252

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") in assessing its financial performance. As there is no generally accepted method of calculating this financial measure, it 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. This measure does 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. (TSXV: SSG), a manufacturing company specializing in the production of composite and metal components, has four operating subsidiaries and employs close to 425 people. The Company is active in the heavy-duty truck, coach, transit, machinery, agriculture, 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 November 23, 2012, 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 interim consolidated 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.

Sigma Industries Inc. 
Denis Bertrand,
President and Chief Executive Officer
418-484-5282
denis.bertrand@sigmaindustries.ca

MaisonBrison
Martin Goulet, CFA
514-731-0000
martin@maisonbrison.com

(Source: CNW )
(Source: Quotemedia)

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