Royal Laser Corp.
TSX : RLC

Royal Laser Corp.

August 14, 2009 15:45 ET

Royal Laser Corp. Reports Financial Results for the First Quarter of Fiscal 2010 Ended June 30, 2009

TORONTO, ONTARIO--(Marketwire - Aug. 14, 2009) - Royal Laser Corp. (the "Company" or "Royal Laser") (TSX:RLC) today reported its financial results for the first quarter ended June 30, 2009 ("Q1 Fiscal 2010").

The summarized financial results for the three months ended June 30, 2009, as compared to three months ended June 30, 2008, were:



----------------------------------------------------------------------------
----------------------------------------------------------------------------
Three Months Ended
June 30,
----------------------------------------------------------------------------
2009 2008
Revenues $ 50,681,103 $ 92,293,842
Cost of sales $ 48,018,679 $ 75,308,741
Gross margin $ 2,662,424 $ 16,985,101
Adjusted EBITDA(i) $ 1,853,244 $ 10,465,886
Adjusted EBITDA(i) per share $ 0.02 $ 0.11
Net earning before taxes $ (474,236) $ 7,713,971
Net earnings (loss) $ (296,131) $ 5,263,104
EPS (basic) $ (0.00) $ 0.06
EPS (diluted) $ (0.00) $ 0.06
----------------------------------------------------------------------------
----------------------------------------------------------------------------

----------------------------------------------------------------------------
----------------------------------------------------------------------------
As at As at
June 30, 2009 March 31, 2009
----------------------------------------------------------------------------
Working capital $ 64,968,982 $ 46,223,794
Shareholder's equity $ 79,257,557 $ 79,450,131
Book value per share (ii) $ 0.84 $ 0.85
----------------------------------------------------------------------------
----------------------------------------------------------------------------

(i) Adjusted EBITDA refers to earnings (loss) before interest, taxes,
depreciation and /amortization, stock-based compensation, and unusual
items; See reconciliation of this non-GAAP measurement below.
(ii) Book Value Per Share is defined as Shareholder's Equity divided by the
number of shares outstanding.


HIGHLIGHTS:

- The Company's revenues for the three months ended June 30, 2009 decreased to 50,681,103, compared to $62,174,859 during the three months ended March 31, 2009 and compared to $92,293,842 for the three months ended June 30, 2008. Decreased revenue occurred primarily due to lower sales revenues in the Steel Processing Business, which experienced a reduction in sales volumes of 38% and a drop in the price of steel of 12% from the same period last year. The significant reduction in volumes was due to diminished demand for steel in the North American automotive and general manufacturing sectors.

- Gross margin percentage for the three months ended June 30, 2009 was 5% compared to 18% for the three months ended June 30, 2008, representing a decrease in gross margin of 13%. The change in margin is a direct result of diseconomies of scale resulting from lower volumes, a drop in the prices of steel and a drop in the amount of recoveries from scrap losses.

- Working Capital increased to $64,968,982 and remains strong at June 30, 2009 compared to $46,223,794 at March 31, 2009 and increased predominantly because of an increased investment in inventory in the Steel Processing Business, financed by the Company's revolving credit facility.

- Adjusted EBITDA was $1,853,244 for the three months ended June 30, 2009 compared to $(1,303,229) for the three months ended March 31, 2009.

Commenting on the results of this past quarter, Beric Sykes, co-CEO states, "The results of this quarter are in-line with our expectations, as we experience some of the most difficult times in the steel business, as well as the broader manufacturing environment. We continue to work on cost-savings initiatives which we believe will allow us to come out much stronger as the overall economic recovery begins to take place."

The Company's unaudited consolidated financial statements for the quarter ended June 30, 2009, together with Management's Discussion and Analysis have been filed on SEDAR and are available at www.sedar.com.

The following table reconciles Adjusted EBITDA to net income (loss) and comprehensive income (loss) in the three months ended June 30, 2009:



----------------------------------------------------------------------------
----------------------------------------------------------------------------
Three Months
Ended June 30,
2009
----------------------------------------------------------------------------

Adjusted EBITDA: $1,853,244
Deduct:
Income taxes (recovery) (178,105)
Interest expense, net 503,922
Depreciation/amortization 831,121
Depreciation/amortization - included in cost of sales 859,803
Stock-based compensation 103,557
Unusual items:
Settlement of legal claim expense 29,077

----------------------------------------------------------------------------
Net income (loss) and comprehensive income (loss) $(296,131)
----------------------------------------------------------------------------
----------------------------------------------------------------------------


About Royal Laser Corp.

Royal Laser Corp., through its operations, services, processes and distributes flat-rolled steel targeted at the multi-billion dollar automotive OEM, automotive after-market, and custom fabricates products for the industrial, environmental, automotive and construction industries in Canada, the United States and recently Mexico. The Company's common shares trade on the Toronto Stock Exchange under the symbol "RLC" and there are approximately 97 million shares outstanding.

For further information on the Corporation, please visit SEDAR at www.sedar.com.

To receive Company news by email, please contact info@royallaser.com and specify "Royal Laser news" in the subject line.

Forward-Looking Statements

Certain statements contained in this press release include statements which contain words such as "anticipate", "could", "should", "expect", "seek", "may", "intend", "likely", "will", "believe" and similar expressions, statements relating to matters that are not historical facts, and such statements of our beliefs, intentions and expectations about development, results and events which will or may occur in the future, constitute "forward-looking information" within the meaning of applicable Canadian securities legislation and are based on certain assumptions and analysis made by us derived from our experience and perceptions. All such forward-looking information is based on certain assumptions and analyses made by us in light of our experience and perception of historical trends, current conditions and expected future developments, as well as other factors we believe are appropriate in the circumstances. The risks, uncertainties, and assumptions are difficult to predict and may affect operations, and other factors, many of which are beyond our control, and are as discussed under the heading "Trends, Risks and Uncertainties" and in the Annual Information Form of Royal Laser dated June 29, 2009 and filed on SEDAR at www.sedar.com, as well as Royal Laser's periodic reports filed with the Ontario Securities Commission and other regulatory authorities. Actual results, performance or achievements could differ materially from those expressed in, or implied by, this forward-looking information and, accordingly, no assurance can be given that any of the events anticipated by the forward-looking information will transpire or occur, or if any of them do so, what benefits will be derived therefrom. Except as required by law, Royal Laser Corp. disclaims any intention or obligation to update or revise any forward-looking information, whether as a result of new information, future events or otherwise. The forward-looking information contained herein is expressly qualified by this cautionary statement.

The Toronto Stock Exchange does not accept responsibility for the adequacy or accuracy of this release.

Contact Information

  • Royal Laser Corp.
    Beric Sykes
    Co - Chief Executive Officer
    (416) 798-9396
    or
    Royal Laser Corp.
    Niral Merchant
    Chief Financial Officer
    (416) 798-9396