Semcan Inc.
TSX VENTURE : STT

Semcan Inc.

November 06, 2009 13:41 ET

Semcan Inc. Announces Further Restructuring Initiatives

TORONTO, ONTARIO--(Marketwire - Nov. 6, 2009) - Semcan Inc. (TSX VENTURE:STT) ("Semcan") announced today that its United Kingdom subsidiary, Naston Limited, has engaged Pococks Chartered Accountants to assist with the restructuring and possible sale or winding-up of Naston. In early December 2009, Naston will be presenting a plan to its creditors under which the company could enter into a Company Voluntary Arrangement under UK law. Certain of its projects would be completed over the next two years, the net proceeds of which would be for the benefit of Naston's creditors.

At the end of 2008, Semcan made the decision to divest itself of Naston, and wrote down the investment during the period ended 30th June, 2009. The company anticipates a final non cash write down of $375,000 for the quarter ended 30th September 2009.

Semcan also announces the successful integration of the ZMI Portec operations into its Milton facility - the financial effect of which result in approximately $600,000 of annual cost savings. The full effect of these savings will be felt in fiscal year 2010.

In addition, the corporate office located at 365 Adelaide Street East, Toronto has now closed and the functions transferred to Stanco Projects Ltd at 8485 Parkhill Drive, Milton, Ontario, resulting in further annual cost savings in excess of $100,000.

Semcan Inc confirms that it has retired all term debt due to Toronto Dominion Commercial Bank ("TD") and that the company's sole indebtedness to TD is its revolving operating line with a limit of $1.5 million. Because of the low borrowings the company no longer meets the criteria set by the National Accounts Division of TD and have therefore transferred the management of the account to the bank's Financial Restructuring Group, an intermediate step before a possible transfer of the account to a regional centre of TD.

About Semcan Inc

Semcan is a worldwide supplier of industrial processes and environmental solutions with specific emphasis on water remediation and emission control systems

Forward-Looking Statement Disclaimer

Caution Regarding Forward-Looking Information and Non-GAAP Measures

This news release contains certain forward-looking statements. These statements relate to future events or future performance and reflect management's current expectations and assumptions regarding the growth, results of operations, performance, and business prospects and opportunities. Such forward-looking statements reflect management's current beliefs and expectations and are based on information currently available to management of Semcan. In particular, statements regarding the future operating results and economic performance are forward-looking statements. Forward-looking statements involve significant risks and uncertainties. A number of factors could cause actual events or results to differ materially from the events and results discussed in the forward-looking statements, including risks outlined under "Risk Factors" in our Annual Information Form, which is posted at www.sedar.com. In evaluating these statements, investors should specifically consider various factors, including such risks as Investment Risk; Business Valuations; Condition of Capital Markets; Dependence on Key Personnel; General Economic Factors; Interest Rate Risk; Competition; and Reliance on Key Suppliers. One or more of these "Risk Factors" could cause actual events or results to differ materially from any forward-looking statement. These factors should not be considered exhaustive. Although the forward-looking statements contained in this press release are based on what management of Semcan considers to be reasonable assumptions based on information currently available to them, there can be no assurance that actual events or results will be consistent with these forward-looking statements, and management's assumptions may prove to be incorrect. These forward-looking statements are made as of the date of this press release, and none of Semcan nor its directors assumes any obligation to update or revise them to reflect new events or circumstances. Undue reliance should not be placed on forward-looking statements.

Non-GAAP Measures

The term "EBITDA" is a financial measure used in this document which is not a standard measure under Canadian generally accepted accounting principles. Semcan's method of calculating EBITDA may differ from the methods used by other issuers. Therefore, Semcan's measure of EBITDA, as presented in this press release, may not be comparable to similar measures presented by other issuers. EBITDA refers to net earnings determined in accordance with generally accepted accounting principles, before depreciation and amortization, interest expense, and income tax expense. Management believes that EBITDA is a useful supplemental measure of cash available for debt service, working capital, capital expenditures, income taxes, and distribution. Investors are cautioned that EBITDA, as a non-GAAP measure, is not an alternative to measures under GAAP and should not, on its own, be construed as an indicator of performance or cash flows, a measure of liquidity or as a measure of actual return.

The TSX Venture Exchange has neither approved nor disapproved the contents of this press release.

Contact Information

  • Semcan Inc.
    Phil Jamieson
    Chairman
    (905) 875-5577