ROMAN CORPORATION LIMITED
TSX : RMN

ROMAN CORPORATION LIMITED

August 12, 2005 21:00 ET

Roman Corporation Reports Second Quarter Results

TORONTO, ONTARIO--(CCNMatthews - Aug. 12, 2005) - Roman Corporation Limited (TSX:RMN) reported a loss of $1,855,578 or $0.46 per share on revenue of $26,105,746 for the second quarter of 2005. This compares to a loss of $1,165,667 or $0.49 per share on revenue of $27,225,107 for the second quarter of 2004. Earnings before interest, taxes and amortization expense were $1,643,104 for the second quarter of 2005 compared to $3,527,678 for the second quarter of 2004. For the first six months of the year, the Company recorded a loss of $2,486,680 or $0.62 per share on revenue of $52,414,881. This compares to a loss of $1,258,342 or $0.57 per share on revenue of $54,576,845 for the comparable period in 2004. EBITDA was $5,042,326 for the six-month period compared to $8,298,990 for the first two quarters of 2004. "The results for the second quarter of 2005 were attributable to lower sales volumes, as a result of weak demand in the Company's core markets within the consumer packaged goods industry" said Helen Roman-Barber, Chairman and Chief Executive Officer. "In addition," she added, "a four-day operational disruption at the Company's paperboard mill had a negative impact of approximately $450,000 in the second quarter of 2005".

Notwithstanding the poor results for the second quarter, gains in operating efficiency and productivity that have been demonstrated through the trend of improved margins during the preceding three quarters, did continue in the second quarter of 2005. The shortfall in volumes attributable to weak market conditions and high inventory levels within the consumer packaged goods supply chain reduced the positive impact on margins of these productivity gains. However, it is expected that improvement in margins and earnings will be realized as volumes rebound.



Three months ended June 30, 2005 2004
(unaudited)

Revenue $26,105,746 $27,225,107

Expenses:
Cost of goods sold $22,004,636 $21,543,271
Selling, general and
administrative expenses $4,490,438 $4,234,156
Net (gain)/loss on investments $148,845 ($34,250)
Interest and bank charges $2,263,644 $3,135,821
Loss before income taxes ($2,801,817) ($1,653,891)
Loss ($1,855,578) ($1,165,667)
Loss per share ($0.46) ($0.49)


Six months ended June 30, 2005 2004
(unaudited)

Revenue $52,414,881 $54,576,845

Expenses:
Cost of goods sold $42,478,695 $42,530,416
Selling, general and
administrative expenses $9,027,132 $8,200,475
Net (gain)/loss on investments $148,845 ($386,123)
Interest and bank charges $4,399,925 $6,085,644
Loss before income taxes (3,639,716) ($1,853,567)
Loss ($2,486,680) ($1,258,342)
Loss per share ($0.62) ($0.57)


In July the Company announced its intention to revise its capital structure and that it had hired a financial advisor to assist the Company in this regard. The Company's credit agreements were amended as at August 12, 2005 to revise certain financial and other covenants and add new covenants. The Company has committed to its lenders to rationalize its capital structure in the near term and is currently reviewing options available in the market to raise capital. The Company intends to recapitalize in a manner that will result in a capital structure with a higher degree of flexibility and cost effectiveness in order to position the Company to prepay outstanding subordinated debt prior to November 30, 2005.

Roman Corporation's primary business is the manufacture of paperboard packaging for consumer packaged goods. The Company's products are the packaging choice for some of the most recognizable national and private label brand manufacturers in North America. Consumer goods packaged with the Company's products range from food and household goods, such as frozen and dry foods, beverages, powdered laundry detergent, batteries and light bulbs to toys, pet products, and hardware.

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