Premier Tech
TSX : PTL.SV.A

Premier Tech

September 27, 2005 15:32 ET

Premier Tech Improves its Financial Performance

RIVIERE-DU-LOUP, QUEBEC--(CCNMatthews - Sept. 27, 2005) - All amounts are expressed in Canadian dollars unless otherwise indicated.

At its Annual Shareholders Meeting held today at the Hotel Hilton Montreal Aeroport, Premier Tech (TSX:PTL.SV.A) released its consolidated results for the three-month period ended August 27, 2005.

Consolidated sales for the three-month period ended August 27, 2005, reached $53.2 million, down 15.6% from the first quarter of the previous year, which was $63 million. The decline in the Company's sales are mainly attributable to decreased shipments from the Industrial Equipment Group (IEG) and the Environmental Technologies Group (ETG), down 45.9% and 10.3%, respectively, during the first quarter compared with the same period the previous year, and to the negative impact of foreign exchange fluctuations. Horticulture and Agriculture Group (GHA) sales grew by 25% over the same period a year ago. IEG's lower sales are mainly attributable to the repositioning of its European activities and the September delivery of projects initially scheduled for completion in August for North America. As well, the transfer to the second quarter of projects planned for the first quarter explains the change in ETG's sales.

During the three-month period ended August 27, 2005, the Company posted a loss before income taxes of $0.4 million, a 70% reduction compared with a loss before income taxes of $1.5 million for the quarter ended August 28, 2004.

Consequently, the net loss for the three-month period ended August 27, 2005, totaled $0.7 million, or $(0.04) per share, 50% less than the net loss of $1.4 million, or $(0.09) per share, for the corresponding period a year earlier.

Several factors under the Company's control as well as external factors contributed to the improvement of its financial performance. The factors under management's control include namely the efficient implementation of the measures announced during the past year to reduce costs and improve the financial performance of Chronos Richardson in Europe and of Erin Systems, the introduction of the Company's three new business groups (GHA, ETG and IEG), as well as the sound management of the Company's various working capital items and investments in an effort to rapidly afford the Company the necessary maneuvering room to ensure its continued long-term development.

As for external factors, once again, the Company was forced to deal with numerous changes that impacted on the activities of some of its business units. The Company had to sustain the negative impact of foreign currency fluctuations against the Canadian dollar, which had a negative impact of $2.7 million on sales and $0.5 million on net loss during the first quarter ended August 27, 2005, compared with the first quarter ended August 28, 2004. The Horticulture and Agriculture Group had, once again, to deal with increases in its transportation costs following a major hike in gas prices, the consolidation of the Canadian transportation industry and the implementation of regulatory measures.

During the first quarter ended August 27, 2005, Premier Tech completed arrangements regarding a new five-year operational financing. The financing, with a new partner, provides for a $50-million operational line of credit, with loans determined on the basis of inventory and accounts receivable. The par value of this new financing is around $9 million more than the previous one, allowing Premier Tech the necessary maneuvering room to pursue its development.

Subsequent events

On September 17, 2005, a plant of the Horticulture and Agriculture Group (GHA) was damaged by a fire. The extent of this event on both the building and equipment is very serious. It is presently too soon for the Company to forecast the impact this event might or might not have on the performance and the financial position for fiscal year 2006.

Appointments

The Company takes this opportunity to inform the public on two new appointments within its senior management. After six years as Senior Vice-President and Chief Financial Officer, Mr. Christian Dollo is now President of the business unit Premier Horticulture, a position held on an acting basis by Mr. Bernard Belanger. Therefore, Mr. Martin Noel, who first joined the Company in 1998 and is currently Vice-President Corporate Development, will also hold the position of Senior Vice-President and Chief Financial Officer of the Company, left vacant by Mr. Dollo.

Outlook

Premier Tech begins fiscal year 2006 with equanimity, confident 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 external environment elements.

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.

In short, Premier Tech must continue to show rigor and discipline in its efforts to constantly improve its financial performance. This is the primary commitment of the Company's management team.



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PREMIER TECH LTD. Three-month period Twelve-month period
(in thousands of dollars, ended August 27, 2005 ended May 28, 2005
except per share amounts)
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$ $
Operation

Sales 53,207 296,299
Loss before income taxes (445) (4,584)
Net loss (664) (6,848)
Net loss per share (0.04) (0.42)
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Financial position

Total assets 186,906 195,876
Working capital 40,403 40,665
Long-term debt 41,119 42,488
Debt bearing interest 64,970 69,694
Total liabilities 141,411 149,724
Shareholders' equity 45,495 46,152
Shareholders' equity per share 2.79 2.83
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Number of shares outstanding 16,314,695 16,314,695
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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, on the introduction of value-added products and on proactive management of its business units' manufacturing operations. 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, C.A.
    Senior Vice-President, Chief Financial Officer
    (418) 867-8883 Ext. 6438
    (418) 867-8297 (FAX)
    noem@premiertech.com