Premier Tech
TSX : PTL.SV.A

Premier Tech

April 11, 2006 14:48 ET

Premier Tech Announces the Results of its Third Quarter

RIVIERE-DU-LOUP, QUEBEC--(CCNMatthews - April 11, 2006) - PREMIER TECH (TSX:PTL.SV.A) released the consolidated results for its third quarter ended February 25, 2006. All amounts are expressed in Canadian dollars unless otherwise indicated.

THREE-MONTH PERIOD ENDED FEBRUARY 25, 2006

For the three-month period ended February 25, 2006, consolidated sales reached $56.5 million, down 12.6% from the third quarter of the previous year, which was $64.7 million.

The decline in the Company's sales is almost exclusively attributable to decreased shipments from the Industrial Equipment Group (IEG), down 27.6% during the third quarter, compared with the same period the previous year. IEG's lower sales are mainly attributable to the repositioning of its European activities. Sales in the Environmental Technologies Group (ETG) grew by 5.3% over the same period a year ago. The increase in its activity level in the residential division explains the increase in ETG's sales. In the Horticulture and Agriculture Group (GHA), sales remained stable at nearly $33 million, despite the negative impact due to foreign exchange fluctuations.

During the three-month period ended February 25, 2006, the Company posted a loss before income taxes of $0.9 million, compared with a loss before income taxes of $4.8 million for the three-month period ended February 26, 2005. For the same period, Premier Tech's net loss totaled $0.7 million, or $0.04 per share, compared with the net loss of $3.2 million, or $0.20 per share, for the corresponding period a year earlier.

For the third quarter ended February 25, 2006, consolidated operating expenses amounted to $53.5 million, representing 94.7% of sales, compared with $65 million, or 100.5% of sales, representing an improvement of 5.8% over the third quarter of the previous year. By the same token, earnings before other items, such as depreciation and amortization, scientific research expenses, interests, bank charges and income taxes reached $3 million, or 5.3% of sales, for the period ended February 25, 2006, compared with a loss before other items of $0.3 million, or 0.5% of sales, for the same period of the previous fiscal year.

NINE-MONTH PERIOD ENDED FEBRUARY 25, 2006

For the nine-month period ended February 25, 2006, consolidated sales stood at $172.5 million, a decline of 14.4% from the $201.5 million in sales for the same period of the previous fiscal year. The reduction stems primarily from a reduction in shipments by IEG in Europe, and the adverse impact of the appreciation of the Canadian dollar relative to the US currency. These negative impacts were partially offset by an increase in GHA's sales.

For the nine-month period ended February 25, 2006, earnings before income taxes stood at $0.6 million, compared with the $8.6 million loss before income taxes for the same period of the previous fiscal year. For the first nine months, the Company's net loss thus stood at $0.3 million, or $0.02 per share, compared with the net loss of $7.3 million, or $0.45 per share, for the same period of the previous year.

During the nine-month period ended February 25, 2006, consolidated operating expenses stood at $159.3 million, representing 92.4% of sales, compared with $195.5 million, or 97.1% of sales, for the same period of the previous fiscal year. Earnings before other items amounted to $13.2 million, or 7.6% of sales, for the first nine-month period ended February 25, 2006, compared with $5.9 million, or 2.9% of sales, for the same period of the previous fiscal year.

The increase in earnings before other items is a reflection of the factors discussed in the quarterly analysis and of higher sales for GHA during this fiscal year's first quarter compared with the same quarter of the previous fiscal year.



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PREMIER TECH LTD
(in thousands or dollars, except for amounts per share)

2006 2005
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Three months to February 25, 2006
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$ $
Sales 56 526 64 653
Net loss (710) (3 197)
EBITDA 2 650 (745)
Loss per share (0.04) (0.20)
Operating cash flows 179 (2 043)
Cash used for operating activities (787) (658)
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Nine months to February 25, 2006
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$ $
Sales 172 462 201 453
Net loss (343) (7 314)
EBITDA 12 171 4 507
Loss per share (0.02) (0.45)
Operating cash flows 5 357 (2 089)
Cash used for operating activities (13 753) (3 513)
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Weighted average number of
outstanding shares 16 342 195 16 164 695
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OUTLOOK

Premier Tech follows on fiscal year 2006 confidently but realistically, and is positive that it has made the right decisions and wise choices in repositioning its activities. As well, the Company is taking a clear and realistic look at the efforts that it will have, along with its team members, to invest to deal with and control adverse environment elements.

The forth quarter of fiscal year 2006 will bring its share of challenges, especially as concerns the pursuit of target measures such as price increases and continuous improvement programs, aimed at reducing operating costs and improving operational efficiency, and necessary changes due to the permanent appreciation of the Canadian dollar against its US counterpart. As well, the Company strives to maintain a highly proactive approach to problems that will potentially be triggered by the tightening of Canada-US customs procedures. Furthermore, Premier Tech intends to pursue its vision of long-term development, as it clearly demonstrates with the implementation of its next Research, Development and Innovation program, ESSOR.

CORPORATE PROFILE

For more than 80 years, Premier Tech has been building its know-how and reputation on the various technology-oriented opportunities offered by sphagnum peat moss, an abundant natural resource in Canada. Its seven business units, gathered in three groups (Horticulture and Agriculture, Industrial Equipment and Environmental Technologies (have the mission to become technological and commercial leaders in their respective fields of expertise. Buoyed by a multidisciplinary team of over 1 300 people based in America, Europe and Asia, Premier Tech is building on the development of its personnel, on research, development and innovation and on the introduction of value-added products. Its strategic approach is supported by ongoing worldwide market development efforts. Premier Tech shares are listed on the Toronto Stock Exchange, in Canada, under the symbol PTL.SV.A.

Contact Information

  • Premier Tech
    Mr. Martin Noel, CA
    Senior Vice-President
    Chief Financial Officer
    (418) 867-8297 (FAX)
    (418) 867-8883, ext. 6438
    noem@premiertech.com