Commercial Solutions Inc.
TSX : CSA

Commercial Solutions Inc.

December 12, 2011 17:23 ET

Commercial Solutions Announces $4.3 Million EBITDA for Fiscal 2011, Up from $1.3 Million in the Prior Fiscal Year

EDMONTON, ALBERTA--(Marketwire - Dec. 12, 2011) -

All figures in CAD Three Months Ended September 30 Twelve Months Ended September 30
2011 2010 % Change 2011 2010 % Change
Revenue $ 29,182,088 $ 23,151,095 26.1 % $ 107,702,207 $ 89,455,326 20.4 %
EBITDA * $ 1,462,582 $ 815,768 79.3 % $ 4,321,702 $ 1,316,903 228.2 %
Net Earnings (Loss) $ 563,449 $ (555,544 ) 201.4 % $ 893,136 $ (2,093,383 ) 142.7 %
Basic EPS ** $ 0.03 $ (0.03 ) 198.8 % $ 0.04 $ (0.10 ) 142.3 %
Diluted EPS ** $ 0.03 $ (0.03 ) 194.0 % $ 0.04 $ (0.10 ) 140.5 %

* EBITDA is defined as earnings before interest, taxes, depreciation and amortization

** EPS is defined as Earnings (loss) per Share

COMMERCIAL SOLUTIONS INC. ("Commercial" or "Company") (TSX:CSA) a leading Canadian distributor of bearings, power transmission equipment, oilfield, industrial, and safety products today announced its financial results for the three-month and twelve-month periods ended September 30, 2011. A complete copy of the Company's report will be available on the Internet at www.sedar.com.

Financial highlights from fiscal 2011 are as follows:

For the twelve-month period ended September 30, 2011, Commercial reported revenue of $107.7 million compared to revenue of $89.5 million for the same period last year, representing a year-over-year increase of 20.4 percent, as previously announced. Both EBITDA and net earnings improved significantly to $4.3 million from $1.3 million and $0.9 million from net loss of $2.1 million respectively.

For the three-month period ended September 30, 2011, Commercial reported revenue of $29.2 million compared to revenue of $23.2 million for the same period last year, representing an increase of 26.1 percent. EBITDA for the quarter was $1.5 million in comparison to $0.8 million in the same period last year. The Company reported net earnings of $0.6 million for the quarter compared to net loss of $0.6 million during the fourth quarter of fiscal 2010.

The Company achieved significant growth in EBITDA and net earnings in the fiscal year as a result of increased revenues and a less than proportionate increase in operating costs. Operating costs decreased as a percentage of revenues by 3.0 percent but increased in dollar amount by $1.7 million. The increase is primarily due to increases in headcount and sales commissions due to higher sales activity as well as wage increases to attract and retain experienced personnel. However, the Company has successfully managed its labour costs through operational efficiencies as the increase in labour costs is lower in comparison to the increase in revenues.

Outlook

The Company is anticipating activity levels in fiscal 2012 to be robust in the energy sector which will favourably impact the Company's overall revenues. Commercial generates significant revenues from this sector in Western Canada which is largely dependent on the price of oil and gas. With strong oil prices continuing to drive activity into 2012, the size of the drilling rig fleet in Western Canada is expected to increase. The Canadian Association of Oilwell Drilling Contractors is forecasting an additional 35 rigs from present levels with 15 new rigs joining the fleet in the second quarter of fiscal 2012. The Company also expects revenue growth from its recent business acquisition of an entity in Pinehurst, Texas as it has positioned key sales personnel in Houston to take on expansion opportunities with new and existing customers, primarily in the energy sector. Revenues generated from the Company's other primary markets including construction, mining and agriculture also continue to improve due to a general rebound in the economy and the Company's focused efforts on customer service and diversification.

Jim Barker, President and CEO of Commercial noted, "I am proud of the journey that Commercial has undertaken over the last years. We enjoyed explosive growth in boom years and prevailed over the challenges of the recent recession years. Over this time we have built an enterprise with a sound business structure. We have talented people who are dedicated to our customers and we are established in diverse industries and locations. We serve our customers well and we enjoy strong relationships with our senior lender and our suppliers. These factors will provide profitability and deliver value to our shareholders. While we anticipate strengthening of all sectors in fiscal 2012, the energy sector is expected to be particularly robust. We are cognizant of challenges including rising goods and services costs, strong competition for workforce talent as well as global economic issues. With the reorganization we have completed over the last two years we are confident that we have the flexibility and resilience to meet challenging market conditions."

About Commercial

Headquartered in Edmonton, Alberta, Commercial is one of Canada's leading independent industrial distributors with 23 Services Centres and approximately 260 employees located primarily in Western 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, agriculture, firefighting, food processing, chemical processing, mining, utilities, manufacturing, 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.

Contact Information

  • Commercial Solutions Inc.
    Rozina Kassam, CA
    Chief Financial Officer
    (780) 577-4360
    rkassam@csinet.ca

    Commercial Solutions Inc.
    Jim Barker
    President and Chief Executive Officer
    (780) 577-2220
    jbarker@csinet.ca