Empire Industries Ltd.

Empire Industries Ltd.

April 30, 2012 19:14 ET

Empire Industries Reports 2011 Year-end Results

WINNIPEG, MANITOBA--(Marketwire - April 30, 2012) - Empire Industries Ltd. (TSX VENTURE:EIL) today reported its audited consolidated financial results for the year ended December 31, 2012. The audited consolidated financial statements and MD&A have been filed on SEDAR and can be viewed at www.sedar.com or at www.empind.com.

For the year and quarter ended December 31
($ millions except share price and per share amounts) Q4 2011 Q4 2010 20111 20101
Financial Results
Revenue 12.8 8.3 55.4 50.0
Adjusted EBITDA2 (1.5 ) (1.4 ) (3.3 ) 1.7
Net loss from continuing operations (1.7 ) (1.4 ) (6.2 ) (2.0 )
Net loss from all operations (0.9 ) (3.3 ) (7.3 ) (9.3 )
Financial Position (at December 31)
Total assets 38.9 44.1
Net Funded debt 9.6 16.7
Subordinate Debt & limited recourse loan 3.7 4.0
Shareholders' equity 7.7 9.7
Share Information
Loss per share from continuing operations ($) (0.01 ) (0.01 ) (0.04 ) (0.02 )
Loss per share from all operations ($) (0.01 ) (0.04 ) (0.05 ) (0.10 )
1 Prepared in accordance with IFRS.
2 Adjusted earnings (loss) before interest, tax, depreciation and amortization (Adjusted EBITDA) is not defined by IFRS The definition of Adjusted EBITDA does not take into account the Group's share of profit of an associate investment, gains and losses on the disposal of assets, fair value changes in foreign currency forward contracts and non-cash components of stock based compensation. While not IFRS measures, Adjusted EBITDA is used by management, creditors, analysts, investors and other financial stakeholders to assess the Group's performance and management from a financial and operational perspective.
Summary of results
  • Revenues from continuing operations increased by 54% in the fourth quarter to $12.8 million and increased by 11% to $55.4 million for the year;
  • The Company had a fourth quarter 2011 net loss of $0.9 million ($0.01 loss per share) versus a net loss of $3.3 million ($0.04 loss per share) for the fourth quarter of 2010;
  • The Company had a net loss of $7.3 million ($0.05 loss per share) versus a net loss of $9.3 million ($0.10 loss per share) for 2010;
  • Completed the sale of three steel fabrication facilities plus miscellaneous redundant assets during the year and the sale of a steel erection firm subsequent to year end, with the proceeds used to reduce Funded Debt
  • The Company's Net Funded Debt decreased to $9.6 million at December 31, 2011 compared to $16.7 million at December 31, 2010 and down from $48.2 million at December 31, 2008.
  • Raised equity during the year totalling $5.1 million and convertible subordinate debt of $1.1 million
  • Commenced the operations of Dynamic Attractions in the fourth quarter of 2011 to sell the Company's proprietary media-based attractions to the global amusement park market
  • The Company's aboriginal partnership in the oil sands region of Alberta, more than doubled its capacity by acquiring Bartan Machine & Welding in the fall of 2011
  • Invested $0.7 million to acquire a 45% equity interest in a Chinese steel fabrication joint venture. This investment was financed by a $0.7 million limited recourse loan.
  • Backlog has increased to $43 million at December 31, 2011 from $19.5 million at December 31, 2010;
  • Backlog increased significantly in the first quarter of 2012 to $92 million at March 31, 2012

"There are two major achievements that I would like to highlight. First, we have reduced our Funded Debt from $48 million at the end of 2008 to $10 million at the end of 2011. Secondly, the significant investment we have been making in broadening our proprietary engineered product line is starting to show signs that it is working as represented by our record current backlog of $92 million," said Guy Nelson, Chief Executive Officer of Empire Industries Ltd. "Furthermore, I expect to see this trend of increasing backlog to continue and to translate into increasing profits which have been non-existent since the start of the recession in 2008."

The Company's strategic transformation is largely complete now and we are focusing our attention on performing our record backlog, continually adding to the backlog and delivering the type of profit inherent in our product sales. We expect to return to profitability in 2012 because of our specialty engineered products and because our steel fabrication business unit is now much leaner and cost competitive than ever before. The Company plans to embark on a communications program with its shareholders to explain the progress that has been made to align the value of the shares with their trading price.

Re-stated 2011 Interim Statements

Management conducted additional analysis of the transition to IFRS accounting presentation, specifically as it pertains to property, plant & equipment and deferred income taxes. To ensure that the opening equity balances in the interim statements conform with the year-end IFRS audited financial statements, the Company has restated its 1st, 2nd, and 3rd quarter unaudited interim financial statements. These restated financial statements can be viewed at www.sedar.com or at www.empind.com. Changes to balances in property, plant & equipment, deferred tax assets and deferred tax liabilities resulted in a change to the December 31, 2010 opening equity balance from $10.2 million to $9.7 million.

About Empire Industries Ltd.

Empire Industries Ltd. manufactures specialized engineered products and sells these products domestically and in select international export markets. The company has developed, designed and engineered products for the rapidly growing, global, media based attractions market. The company also provides steel fabrication & installation services, primarily to the industrial, commercial and infrastructure market in Western Canada. The company also has two key strategic equity partnerships; a 49% ownership of ACE Industrial Services that operates in the oil sands industrial maintenance services market, and a 45% ownership of a Chinese joint venture company in the steel fabrication market in Asia. Empire's common shares are listed on the TSX Venture Exchange under the symbol EIL.

Reader Advisory

This news release contains forward-looking statements, within the meaning of applicable securities legislation, concerning Empire's business and affairs. In certain cases, forward-looking statements can be identified by the use of words such as "plans", "expects" or "does not expect", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates" 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". These forward looking statements are based on current expectations, and are naturally subject to uncertainty and changes in circumstances that may cause actual results to differ materially. Readers are cautioned not to place undue reliance on such forward-looking statements. Forward-looking information is provided as of the date of this press release, and Empire assumes no obligation to update or revise them to reflect new events or circumstances, except as may be required under applicable securities laws.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

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