Empire Industries Ltd.
TSX VENTURE : EIL

Empire Industries Ltd.

April 18, 2016 07:00 ET

Empire Industries Reports 2015 Results

WINNIPEG, ALBERTA--(Marketwired - April 18, 2016) - Empire Industries Ltd. (TSX VENTURE:EIL) today reported its audited consolidated financial results for the year ended December 31, 2015. 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.

"The $8.0 million of EBITDA that was generated in 2015, demonstrates that our strategy of recent years has been a good one," said Guy Nelson, CEO of Empire Industries. "While remaining profitable, we have also put the wheels in motion for Empire's continued growth and development. The creation of our Unlimited Attractions Demonstration Centre in Orlando, Florida will ensure that we remain on the cutting edge of new attraction development and add another revenue stream to further enhance our product offering in this business segment. Our proposed spin-out of Tornado Hydrovacs will allow Empire to increase its focus and capital allocation on its core business of Media Based Attractions, while allowing Tornado to capitalize on exciting opportunities in North America and China by leveraging its proprietary hydrovac technology and unique business strategy. Empire's shareholders as of the Record Date for this transaction, will have the ability to participate in this opportunity through their direct ownership of 54.5% of Tornado Global Hydrovacs Inc., which will become an independently operated, publicly listed company on the TSXV. The Thirty Metre Telescope partnership has decided to open up the question of where to locate the telescope and we remain confident the enclosure will be designed and built by Empire, albeit a little bit delayed. There are tremendous opportunities in front of us, and we are well positioned to capitalize on them. There are plenty of reasons to be bullish on our long term future."

Summary of 2015 consolidated annual results

  • Revenues increased by $10.2 million (7.2%), to $151.4 million from $141.2 million in 2014. The increase was driven by an increase of $35.2 million in the media-based attractions segment, offset by decreases totaling $24.8 million in the Manufactured Products and Steel Fabrication segments.
  • Adjusted EBITDA was consistent with 2014 at $8.0 million. The mix of contribution to EBITDA was significantly different in 2015, with the Media-Based Attractions segment increasing its EBITDA by $5.2 million to $11.7 million. The Manufactured Products and Steel Fabrication segments were unable to contribute EBITDA due to significantly reduced volumes because of a market slow-down in western Canada.
  • Net Income was down $4.7 million to $1.4 million from $6.1 million in 2014. Per Share Net Income (Basic) was $0.005 in 2015 (from $0.024 in 2014). The vast majority of this decrease was from non-cash changes in deferred taxes and an increase in the unrealized loss in hedging contracts.
  • The Group uses foreign currency forward contracts to hedge its foreign exchange exposure. When the settlement value of these contracts less than the actual exchange rates at the end of the reporting period, it creates a liability position on the balance sheet. Similarly, when the settlement value is greater than the actual exchange rates, it creates an asset. As the Canadian dollar has strengthened relative to its currency forward contracts in the first quarter of 2016, the Group's liability position will improve by $3.2 million in that period.
  • Backlog of $130 million, down from $155 million at of the Group's third quarter report. Despite our backlog decline, our pipeline of active projects has never been larger or more high quality and robust.

Summary of 2015 Segmented Financial Results

For the quarter and year ended December 31
($ millions) Fiscal 2015 Fiscal 2014 Q4
2015
Q4
2014
Media Based Attractions
Revenue 103.0 67.8 29.3 16.0
Adjusted EBITDA ($)1 11.7 6.4 4.5 2.7
Adjusted EBITDA %1 11.3 % 9.5 % 15.5 % 16.7 %
Manufactured Products
Revenue 20.2 35.7 5.2 9.4
Adjusted EBITDA ($)1 (0.1 ) 3.4 0.0 0.6
Adjusted EBITDA %1 (0.6 %) 9.6 % 0.1 % 6.5 %
Steel Fabrication
Revenue 28.1 37.5 4.2 10.6
Adjusted EBITDA ($)1 (0.5 ) 0.6 (0.6 ) (0.8 )
Adjusted EBITDA %1 (1.6 %) 1.6 % (13.3 %) (7.1 %)
Corporate
Revenue 0.1 0.3 0.1 0.1
Adjusted EBITDA ($)1 (3.1 ) (2.4 ) (1.0 ) (0.7 )

Summary of 2015 Consolidated Financial Results

For the quarter and year ended December 31
($ millions except share price and per share amounts) Fiscal 2015 Fiscal 2014 Q4
2015
Q4
2014
Revenue 151.4 141.2 38.8 36.1
Adjusted EBITDA ($)1 8.0 8.0 3.0 1.8
Adjusted EBIT ($)1 5.9 6.4 2.2 1.4
Net income from all operations 1.4 6.1 0.4 2.5
Financial Position (at December 31)
Total assets 80.1 68.3
Total long term financial liabilities 3.0 4.0
Shareholders' equity 23.7 22.0
Per Share Information
Income per share (Basic) 0.005 0.024 0.000 0.009
Income per share (Diluted) 0.005 0.022 0.000 0.007
1 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. Adjusted EBIT is the result of the Group's Adjusted EBITDA less depreciation and amortization expenses. While not IFRS measures, Adjusted EBITDA and Adjusted EBIT are used by management, creditors, analysts, investors and other financial stakeholders to assess the Group's performance and management from a financial and operational perspective.

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 manufactures and sells hydrovac trucks and 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.

Contact Information

  • Empire Industries Ltd.
    Guy Nelson
    Chief Executive Officer
    (416) 366-7977
    gnelson@empind.com

    Empire Industries Ltd.
    Allan Francis
    Vice President - Corporate Affairs and Administration
    (204) 589-9301
    afrancis@empind.com