Royal Laser Corp.
TSX : RLC

Royal Laser Corp.

November 12, 2009 17:42 ET

Royal Laser Corp. Reports Financial Results for the Second Quarter of Fiscal 2010 Ended September 30, 2009

TORONTO, ONTARIO--(Marketwire - Nov. 12, 2009) - Royal Laser Corp. (the "Company" or "Royal Laser") (TSX:RLC) today reported its financial results for the second quarter ended September 30, 2009 ("Q2 Fiscal 2010").

The summarized financial results for the three and six months ended September 30, 2009, as compared to three and six months ended September 30, 2008, were:

    Three Months Ended  Six Months Ended
    September 30,  September 30,
    2009   2008  2009   2008
Revenues$67,598,369 $86,420,225$118,279,472 $178,714,067
Cost of sales$63,055,117 $70,505,386$111,073,796 $145,814,127
Gross margin$4,543,252 $15,914,839$7,205,676 $32,899,940
Adjusted EBITDA(i)$1,147,824 $10,264,907$3,001,068 $20,730,793
Adjusted EBITDA(i) per share$0.01 $0.11$  0.03 $0.22
Net earnings before taxes$(981,770)$7,466,475$(1,456,006)$15,180,446
Net earnings (loss)$(264,612)$5,075,655$(560,743)$10,338,759
Earnings/(loss) per share              
(basic) $0.00 $  0.05 $  (0.01) $0.11
Earnings/(loss) per share               
(diluted)  $0.00 $  0.05 $  (0.01)  $0.11
 
 
 
 
         As at       As at
         September 30, 2009March 31, 2009
Working capital       $53,086,850$   46,223,794
Shareholder's equity       $78,691,235$   79,450,131
Book value per share (ii)       $  0.84$   0.85

(i)Adjusted EBITDA refers to earnings (loss) before interest, taxes, depreciation and /amortization, non-cash stock-based compensation, and unusual items; See reconciliation of this non-GAAP measurement below.

(ii) Book Value Per Share is defined as Shareholder's Equity divided by the number of shares outstanding.

HIGHLIGHTS:

  • The Company's revenues for the three and six months ended September 30, 2009 decreased to $67,598,369 and $118,279,472, compared to $86,420,225 and $178,714,067 during the three and six months ended September 30, 2008. Decreased revenue occurred primarily due to lower sales revenues in the Steel Processing Business, led by a decline in the average price of steel by 30% and 21% during the three and six months ended September 30, 2009, compared to the same period in 2008. Sales volumes increased 2% and decreased 19% during the three and six months ended September 30, 2009, as compared to same period in 2008. The overall reduction in volumes was due to diminished demand for steel in the North American automotive and general manufacturing sectors, led by plant shutdowns as major automotive players completed financial restructurings.
  • Gross margin percentage for the three and six months ended September 30, 2009 was 7% and 6% compared to 18% and 18% for the three and six months ended September 30, 2008, representing a decrease in gross margin of 11% and 12%. The change in margin is a direct result of diseconomies of scale resulting from lower volumes, inconsistent and slower turnarounds at steel producing mills, a drop in the market price of steel and the strength of the Canadian dollar and its effect on sales revenues.
  • Working Capital increased to $53,086,850 and remains strong at September 30, 2009 compared to $46,223,794 at March 31, 2009 and increased predominantly because of a decreased investment in inventory in the Steel Processing Business, caused by the decrease in the price of steel.
  • Adjusted EBITDA was $1,147,824 and $3,001,068 for the three and six months ended September 30, 2009 compared to $10,264,907 and $20,730,793 for the three and six months ended September 30, 2009.

Commenting on the results of this past quarter in the Steel Processing Business, Beric Sykes, CO-CEO states: "The second quarter of Fiscal 2010 has seen some interesting challenges, as historically high volatility in the price of steel, demand and supply of steel, and end-user consumption have created numerous issues for all aspects of the steel supply chain. While the broader economic recovery remains tepid, and we remain cautiously optimistic about a further gradual recovery in the steel market, our operating environment remains challenging."

Commenting on the results of this past quarter in the Industrial Business segment, Bill Iannaci, CO-CEO states: "The second quarter of Fiscal 2010 continued to be quite challenging for the industrial, retail and construction markets that we service. Although there has been a gradual recovery from the global recession in some market segments, we continue to focus on being a low-cost producer, to capitalize on the economic recovery, when it occurs."

The Company's unaudited consolidated financial statements for the quarter ended September 30, 2009, together with Management's Discussion and Analysis have been filed on SEDAR and are available at www.sedar.com.

The following table reconciles Adjusted EBITDA to net income (loss) and comprehensive income (loss) in the three and six months ended September 30, 2009:

    Three Months EndedSix Months Ended
    September 30,September 30,
    2009 20082009 2008
 
Adjusted EBITDA:  $1,147,824 $10,264,907$3,001,068 $20,730,793
 Deduct:           
 Income taxes (recovery)  (717,158)2,390,820(895,263)4,841,687
 Interest expense, net  462,404 835,913966,326 1,688,082
 Depreciation/amortization  798,470 1,633,6491,629,591 3,240,338
 Depreciation/amortization-included          
 in cost of sales  767,150 1,626,953 
Non-cash stock-based compensation72,174 328,870175,731 621,927
 Unusual items:           
  Legal claim expense  29,396 58,473 
 
Net income (loss) and           
comprehensive income (loss)  $(264,612)$5,075,655$(560,743)$10,338,759

About Royal Laser Corp.

Royal Laser Corp., through its operations, services, processes and distributes flat-rolled steel targeted at the multi-billion dollar automotive OEM, automotive after-market, and custom fabricates products for the industrial, environmental, automotive and construction industries in Canada, the United States and recently Mexico. The Company's common shares trade on the Toronto Stock Exchange under the symbol "RLC" and there are approximately 97 million shares outstanding.

For further information on the Corporation, please visit SEDAR at www.sedar.com.

To receive Company news by email, please contact info@royallaser.com and specify "Royal Laser news" in the subject line.

Forward-Looking Statements

Certain statements contained in this press release include statements which contain words such as "anticipate", "could", "should", "expect", "seek", "may", "intend", "likely", "will", "believe" and similar expressions, statements relating to matters that are not historical facts, and such statements of our beliefs, intentions and expectations about development, results and events which will or may occur in the future, constitute "forward-looking information" within the meaning of applicable Canadian securities legislation and are based on certain assumptions and analysis made by us derived from our experience and perceptions. All such forward-looking information is based on certain assumptions and analyses made by us in light of our experience and perception of historical trends, current conditions and expected future developments, as well as other factors we believe are appropriate in the circumstances. The risks, uncertainties, and assumptions are difficult to predict and may affect operations, and other factors, many of which are beyond our control, and are as discussed under the heading "Trends, Risks and Uncertainties" and in the Annual Information Form of Royal Laser dated June 29, 2009 and filed on SEDAR at www.sedar.com , as well as Royal Laser's periodic reports filed with the Ontario Securities Commission and other regulatory authorities. Actual results, performance or achievements could differ materially from those expressed in, or implied by, this forward-looking information and, accordingly, no assurance can be given that any of the events anticipated by the forward-looking information will transpire or occur, or if any of them do so, what benefits will be derived therefrom. Except as required by law, Royal Laser Corp. disclaims any intention or obligation to update or revise any forward-looking information, whether as a result of new information, future events or otherwise. The forward-looking information contained herein is expressly qualified by this cautionary statement.

 

The Toronto Stock Exchange does not accept responsibility for the adequacy or accuracy of this release.

Contact Information

  • Royal Laser Corp.
    Beric Sykes
    Co - Chief Executive Officer
    (416) 798-9396
    or
    Royal Laser Corp.
    Niral Merchant
    Chief Financial Officer
    (416) 798-9396