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Press release from CNW Group

Sigma Industries achieves solid improvement in operating results for its 2012 fiscal year

Friday, October 26, 2012

Sigma Industries achieves solid improvement in operating results for its 2012 fiscal year17:00 EDT Friday, October 26, 2012SAINT-ÉPHREM-DE-BEAUCE, QC, Oct. 26, 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 fourth quarter and fiscal year ended April 28, 2012. These results reflect the adoption of International Financial Reporting Standards ("IFRS") on May 1, 2011. Results for the corresponding period of the previous year have been restated."Driven by a strong increase in business activity that allowed for a better absorption of fixed costs, Sigma Industries achieved operating profitability for its 2012 fiscal year. More importantly, progress accomplished to this day motivates us to achieve maximum benefits from our restructuring efforts and to further optimize our operations," said Denis Bertrand, President and Chief Executive Officer of Sigma Industries.FOURTH QUARTER RESULTSRevenues for the fourth quarter of fiscal 2012 reached $21.6 million, up $5.0 million, or 30.1%, compared with the fourth quarter of fiscal 2011. The increase mainly reflects a $5.5 million increase in revenues from the heavy-duty truck industry as a result of the global economic recovery. Of note, the fourth quarter of fiscal 2011 was comprised of 14 weeks, versus 13 for the same period in fiscal 2012, resulting in additional revenues of almost $1.0 million in the fourth quarter of fiscal 2011.Reflecting an improved absorption of fixed costs as a result of the higher business activity, Sigma Industries recorded adjusted earnings before interest, taxes, depreciation and amortization ("EBITDA") of $1.2 million, or 5.5% of revenues, compared to an adjusted loss of $85,861 in the fourth quarter of the previous fiscal year. In the fourth quarter of fiscal 2012, the Company recorded a gain on debt settlement of $155,350, while in the fourth quarter of fiscal 2011, the Company had recorded an impairment of property, plant and equipment charge of $821,860. Given these items, the Company achieved net income of $237,965, or $0.02 per basic and diluted share, in the fourth quarter of fiscal 2012, as opposed to a net loss of $1.8 million, or a loss of $0.15 per basic and diluted share, in the same period a year earlier. FISCAL 2012 RESULTSFor the fiscal year ended April 28, 2012, revenues amounted to $73.7 million, up 38.1% from $53.4 million in fiscal 2011. Adjusted EBITDA stood at $4.9 million, or 6.6% of revenues, as opposed to an adjusted loss of $295,278 a year earlier.Of note, fiscal 2012 results include a non-recurring gain on debt settlement of $2.5 million resulting from the winding-up of a U.S. subsidiary. A similar gain of $5.4 million related to the Company's restructuring plan and an impairment of property, plant and equipment charge of $821,860 were recorded in fiscal 2011. Given these items, net income totalled $3.1 million in fiscal 2012, or $0.27 per basic and diluted share, versus a net loss of $76,154, or a loss of $0.01 per basic and diluted share, last year.CASH FLOW AND FINANCIAL POSITIONDriven by the significant improvement in operating results, cash flow from operations before changes in items of working capital reached $3.3 million in fiscal 2012. These liquidities allowed Sigma Industries to reduce its long-term debt by a net amount of $1.6 million during the fiscal year. Moreover, the sale of the U.S. subsidiary's property, plant and equipment resulted in the disposition of debt amounting to $4.3 million. As a result, the Company's financial position showed net debt of $19.0 million as at April 28, 2012, versus $24.7 million one year earlier.OUTLOOK"Leveraging the progress accomplished, we enter the new fiscal year with cautious optimism. On the one hand, our solid reputation in regards to quality and our innovation capabilities should lead to increased penetration in our target markets. On the other hand, we remain cautious in light of the fragile economic situation. Significant progress has been accomplished, but management is fully aware that we must sustain our efforts in order to reach our ultimate objective to create lasting value for our shareholders," concluded Mr. Bertrand.SELECTED FINANCIAL INFORMATION     Consolidated results of operationsThree months ended Fiscal years ended(unaudited, in thousands of Canadian dollars except per-share amounts)April 28, 2012April 30, 2011 April 28, 2012April 30, 2011 $$ $$Revenues21,61316,615 73,69653,375Adjusted EBITDA1,178(86) 4,853(295)Restructuring costs094 01,074Loss (gain) on debt settlement(155)616 (2,518)(5,375)Other non cash charges0822 0822Net income (loss)238(1,766) 3,141(76)Per share (basic and diluted)0.02(0.15) 0.27(0.01)      Reconciliation of adjusted EBITDA and net incomeThree months ended Fiscal years ended(unaudited, in thousands of Canadian dollars)April 28, 2012April 30, 2011 April 28, 2012April 30, 2011 $$ $$Net income (loss)238(1,766) 3,141(76)PLUS (less):     Income tax expense (recovery)56(944) 56(944)Depreciation and amortization425710 1,8172,162Financial expenses614382 2,3572,042Other non cash charges0822 0822Restructuring costs094 01,074Loss (gain) on debt settlement(155)616 (2,518)(5,375)Adjusted EBITDA1,178(86) 4,853(295)      Consolidated balance sheet dataAs at   (in thousands of Canadian dollars)April 28, 2012April 30, 2011    $$   Total assets32,33233,960   Total liabilities28,08032,433   Shareholders' equity4,2521,527NON-IFRS FINANCIAL MEASURESThe 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 INDUSTRIESSigma Industries Inc.(TSX-V: SSG), a manufacturing company specializing in the production of composite and metal components, has four operating subsidiaries and employs close to 475 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 STATEMENTSThis 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 October 26, 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.For further information: Sigma Industries Inc.  Denis Bertrand, President and Chief Executive Officer 418-484-5282 denis.bertrand@sigmaindustries.caMaisonBrison Martin Goulet, CFA 514-731-0000 martin@maisonbrison.com