Synergex Corporation
TSX : SYX

Synergex Corporation

November 05, 2009 22:24 ET

Synergex Announces Third Quarter Financial Results

COMPANY REPORTS INCREASED PROFITABILITY

MISSISSAUGA, ONTARIO--(Marketwire - Nov. 5, 2009) - Synergex Corporation (TSX:SYX) ("Synergex" or the "Company"), a premier international integrated provider of supply chain management services, today announced its financial results for the third quarter ended September 30, 2009.

Synergex' consolidated operations in Q3 2009 resulted in an EBITDA of $1.8 million compared to an EBITDA of $1.5 million for the same period in 2008. For the nine months ended September 30, 2009, EBITDA increased slightly to $4.1 million, compared to $4.0 million in the same period in 2008.

The Company reported net income of $800 thousand in the quarter, representing earnings of $0.03 per share (basic and fully diluted) compared to a net income of $367 thousand in the same period last year. For the nine month period, the Company reported net income of $1.5 million or $0.07 per share (basic and fully diluted), compared to a net income of $360 thousand in the prior year.

For the nine months ended September 30, 2009, gross profit rose by $3.5 million, or 20%, to $20.9 million compared to the comparable period in 2008. The Company's gross profit in the third quarter of 2009 increased significantly by $1.2 million, or 17%, to $8.1 million compared to the same period in 2008. As a percentage of sales, gross profit in the quarter topped 42% of consolidated sales compared to 19% of normalized sales from the same period last year. The increases in gross profit are mainly the result of an increase in higher margin service revenue, a decrease in low margin distribution revenue activity, and a profitable turnaround in Latin American operations.

Sales in the third quarter were $19.1 million compared to sales of $52.0 million in the third quarter of 2008. However, in order to provide a meaningful historical comparison the Company calculates "normalized" revenues by deducting the low-margin billings of its SRS subsidiary, which it wound down in October of 2008. Accordingly, during the third quarter of 2008 the Company's normalized sales were $35.8 million. On a normalized basis, Q3 2009 sales decreased by $16.7 million over the same period in the prior year. The decrease was mainly attributed to timing delays of new video game releases in Canada in the reporting period and the Company's choice to focus resources on profitable products and services and decrease the capital allocated to low-margin distribution operations.

The Company experienced solid sales performance in its Latin American operations, with a $1 million increase to $7.5 million, a 15% rise compared to the same quarter in the prior year.

"We are very pleased with our financial performance in the third quarter of 2009, having achieved record high Q3 EBITDA since the Company became publically listed. Synergex' third quarter financial performance reflects our continued focus on profitability, and these strong results demonstrate the success of the efforts of our worldwide team." said David Aiello, President & Chief Executive Officer of Synergex.

The Company's unaudited financial statements and Management's Discussion and Analysis ("MD&A") for the three months and nine months ended September 30, 2009 can be found in the Investor Relations section of the Company's website at www.syx.ca. Management will host a conference call with shareholders on Monday, November 9th at 11:00am EDT. Participants may access the conference call by dialing 1-416-644-3416 (or 1-800-814-4859). Following the conference call, an archived replay of the call will be available until November 17, 2009 and can be accessed by dialing +1-416-640-1917 (or 1-877-289-8525), passcode 4182300#.

About Synergex Corporation

Synergex is a premier international service provider of comprehensive supply chain management services in 6 countries across the Americas, specializing in distribution, licensing, sales, localization, packaging and marketing of digital entertainment products. Headquartered in Mississauga, Ontario, with operations across North, Central and South America, Synergex serves a broad base of customers that includes a number of multinational enterprises. Synergex is listed on the Toronto Stock Exchange and trades under the symbol SYX. For further information, please visit www.syx.ca.

Forward-Looking Statements

This press release contains "forward-looking statements" and "forward-looking information" within the meaning of the United States Private Securities Litigation Reform Act of 1995 and applicable Canadian securities legislation. Forward-looking statements include, but are not limited to, statements with respect to the timing and amount of estimated future expansion and costs of expansion. Generally, these forward-looking statements can be identified by the use of forward-looking terminology such as "plans", "expects" or "does not expect", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "plan", "continue", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases or state that certain actions, events or results "may", "could", "would", "might" or "will be taken", "occur" or "be achieved". All forward-looking statements are based on our beliefs and assumptions based on information available at the time the assumption was made. While Synergex considers its assumptions to be reasonable and appropriate based on the current information available, there is a risk that they may not be accurate. Forward-looking statements are subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of Synergex to be materially different from those expressed or implied by such forward-looking statements, including but not limited to risks related to the integration of acquisitions, as well as those factors discussed in the section entitled "Risk Factors" Synergex' 2008 Annual MD&A. Before making any investment decisions and for a detailed discussions of the risks, uncertainties and environment associated with our business, fully review the section entitled "Risk Factors" Synergex' 2008 Annual MD&A. Although Synergex has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking statements, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements. Synergex does not undertake to update any forward-looking statements that are incorporated by reference herein, except as required by law.

Contact Information

  • Company Contacts:
    Synergex Corporation
    Kevin Daniels, Chief Communications Officer
    905-740-3128
    kevin.daniels@syx.ca
    or
    Synergex Corporation
    David Aiello, President and Chief Executive Officer
    905-565-1212
    david.aiello@syx.ca