Commercial Solutions Inc.
TSX : CSA

Commercial Solutions Inc.

May 15, 2009 08:00 ET

Commercial Announces Second Quarter Fiscal 2009 Results

EDMONTON, ALBERTA--(Marketwire - May 15, 2009) - COMMERCIAL SOLUTIONS INC. (TSX:CSA)

2009 Q2 Highlights

- Q2 sales decreased by 21.7% to $29.3 million versus $37.5 million during the same period last year

- Q2 operating costs decreased by 6.6% in comparison to prior year

- Q2 net loss would have been $1.1 million after normalizing results from the $19.5 million goodwill impairment charge.

- Basic and diluted Q2 EPS was $(1.03)



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All figures in CAD Three Months Ended March 31
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2009 2008 Change
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Revenue $ 29,333,030 $ 37,477,869 (21.7)%
EBITDA (728,162) 1,812,454 (140.2)%
Net (Loss) Earnings (20,659,429) 611,497
Basic and Diluted EPS $ (1.03) $ 0.03
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All figures in CAD Six Months Ended March 31
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2009 2008 Change
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Revenue $ 65,121,612 $ 71,188,710 (8.5)%
EBITDA 177,132 2,801,145 (93.7)%
Net (Loss) Earnings (20,621,445) 667,446
Basic and Diluted EPS $ (1.03) $ 0.03
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Note: EBITDA is defined as (loss) earnings before interest, taxes,
depreciation, amortization and goodwill impairment charge.


COMMERCIAL SOLUTIONS INC. (TSX:CSA) ("Commercial" or "Company") (TSX:CSA) a leading Canadian distributor of bearings, power transmission, oilfield, industrial, safety, survey and resource management equipment products, today announced its financial results for the second quarter ended March 31, 2009. A complete copy of the Company's report is available on the Internet at www.sedar.com.

Financial highlights from the fiscal 2009 second quarter are as follows:

For the three-month period ended March 31, 2009, Commercial reported revenue of $29.3 million compared to revenue of $37.5 million for the same period last year, representing a year-over-year decrease of 21.7 percent. For the quarter, the Company reported a 140.2 percent decrease in EBITDA to $(0.7) million versus $1.8 million for the same period last year. Due to the $19.5 million goodwill impairment charge, net loss for the quarter amounted to $20.7 million compared to net earnings of $0.6 million in the same period last year. Without the goodwill impairment charge, the quarterly loss would have been $1.1 million and basic and diluted EPS would have been $(0.06).

For the six-month period ended March 31, 2009, the goodwill impairment charge decreased earnings creating a loss of $20.6 million or loss of $1.03 per share (basic and diluted) as compared to net earnings of $0.7 million and EPS of $0.03 (basic and diluted) in the prior period. Revenues decreased by 8.5 percent to $65.1 million from $71.2 million and EBITDA fell by 93.7 percent to $0.2 million from $2.8 million for the prior year. Without the goodwill impairment charge, the year-to-date net loss would have been $1.1 million and basic and diluted EPS would have been $(0.05).

Fiscal 2009 continues to be a challenging year with all of Commercial's primary industry sectors facing a downturn, especially the energy sector. The Company has initiated some major cutbacks since the beginning of 2009 which has resulted in a reduction of operating costs by 7.0% from the prior quarter. With the implemented programs in place, total annualized savings will approximate $6.0 million. Jim Barker, President & CEO of Commercial noted "Our primary objective is to achieve a cost structure to protect and improve EBITDA and cash position. We are prepared to take additional measures should markets continue to deteriorate." Due to the prolonged challenging economic conditions, the Company felt that it was necessary to perform an interim assessment of balance sheet intangibles which resulted in an impairment charge to goodwill. The goodwill impairment charge is an adjustment that does not impact Commercial's cash position, cash flow from operating activities, revolver availability or liquidity position and does not have any effect on current or future operations of the Company.

About Commercial

Headquartered in Edmonton, Alberta, Commercial is one of Canada's leading independent industrial distributors with 30 Services Centers and approximately 295 employees located across Canada. Commercial offers more than 160,000 items critical to maintenance repair and operations (MRO) and original equipment manufacturer (OEM) customers. The Company represents 450 leading manufacturers and serves over 11,000 customer accounts within a broad cross-section of industries, including oil and gas, forestry, food processing, chemical processing, mining and aggregate, utilities, agriculture and construction. Commercial trades under the symbol "CSA" on the Toronto Stock Exchange. For further information on the Company, please visit www.commercialsolutions.ca and for detailed financial information visit www.sedar.com.

Forward Looking Statements

From time to time, the Company may publish forward-looking statements relating to such matters as expected financial performance, business prospects, development activities and like matters. These statements involve risk and uncertainties, including but not limited to the risk factors previously described. Actual results could differ materially from those projected as a result of these risks and should not be relied upon as a prediction of future events. Commercial undertakes no obligation to update any forward-looking statement to reflect events or circumstances after the date on which such statement is made, or to reflect the occurrence of unanticipated events, with an exception to securities laws requirements.

Contact Information

  • Commercial Solutions Inc.
    Rozina Kassam CA
    Chief Financial Officer
    (780) 577-4360
    Email: rkassam@csinet.ca
    or
    Commercial Solutions Inc.
    Eric Sauze CA
    Chief Operating Officer
    (780) 577-2215
    Email: esauze@csinet.ca