Royal Laser Corp.

Royal Laser Corp.

November 15, 2006 08:00 ET

Royal Laser Corp. Reports Second Quarter Results

TORONTO, ONTARIO--(CCNMatthews - Nov. 15, 2006) - Royal Laser Corp. (TSX:RLC) today reported its financial results for the second quarter of fiscal 2007, ended September 30, 2006.

Three months ended September 30, 2006, as compared to three months ended
September 30, 2005, were:

Q2 2007 Q2 2006
------- -------
Revenues $ 68,648,434 $ 7,513,673
Cost of Sales $ 60,413,106 $ 5,076,683
Gross Margin $ 8,235,328 $ 2,436,990
EBITDA(i) $ 3,246,455 $ 976,408
Net Earnings $ 466,466 $ 527,776
EPS (Basic) $ 0.01 $ 0.02
EPS (Diluted) $ 0.01 $ 0.02

Six months ended September 30, 2006, as compared to six months ended
September 30, 2005, were:

Q2 2007 Q2 2006
------- -------
Revenues $ 126,053,172 $ 15,766,553
Cost of Sales $ 110,032,602 $ 11,470,952
Gross Margin $ 15,420,570 $ 4,295,601
EBITDA(i) $ 5,731,634 $ 2,015,695
Net Earnings (Loss) $ (1,793,568) $ 981,738
EPS (Basic) $ (0.02) $ 0.03
EPS (Diluted) $ (0.02) $ 0.03

(i)Earnings (loss) before interest, taxes, depreciation and amortization
and one-time stock based compensation charges.

Royal Laser's acquisition of Venture Steel Inc. in the first quarter of fiscal 2007 has dramatically changed the financial position of the Company, as compared to a year ago.


- Growth in revenues over the previous year to $68.6 million for the quarter, and $126 million for the six months, compared to $7.5 million and $15.8 million respectively last year.

- For the second quarter, gross profit was $8.2 million or a gross margin rate of 12%, which reflects the integration of Venture Steel. For the six months the gross margin rate was slightly better at 12.2% .

- EBITDA increased 332% to $3.2 million in the second quarter compared to $0.98 million last year; and 284% for the six months to $5.7 million from $2.0 million.

- Net income remained positive for the second quarter at $0.5 million from $0.5 million last year; while for the six month period there was a net loss of $1.8 million, compared to net income of $0.98 million in 2005. Contributing to the net loss were significant one-time charges for stock option consideration that were posted in the first and second quarter totalling $3.6 million relating to the appointment of the Chairman of the Board.

- Cash position at the end of the second quarter is robust at $15.9 million, and cash flows are sufficient to service the Company's debt commitments; the long-term debt to equity ratio is strong at 0.18 times.

- Subsequent to the second quarter, on November 7th, the Company announced it will execute a Normal Course Issuer Bid to buyback up to 10% of the issued shares of the Company at market prices on the TSX over a period as long as one year.

Bill Iannaci, Royal Laser's Chief Executive Officer, commented, "In the second quarter more progress was made to integrate Venture Steel into the Royal Laser model and we are excited about the platform we have acquired and built. Overall, performance for the second quarter was affected by softer sales resulting from automotive customer cutbacks in our steel service centre business. If this market softening continues, we are well positioned with our cash reserves and proven entrepreneurial model to adjust accordingly."

Alex Shnaider, Royal Laser's Chairman, commented, "The acquisition of Venture Steel's operations has moved Royal Laser into a new echelon. Already the affects on operations and revenues have been dramatic for the first half of the fiscal year, and as we progressively increase the throughput at Venture Steel, and all the Royal Laser plants, we expect growth over the long-term that will boost revenues and improve profit margins through greater economies of scale."

The complete reports of the Company's audited financial statements and related notes for the six months ended September 30, 2006, together with Management's Discussion and Analysis of financial conditions have been filed on SEDAR and are available at

About Royal Laser Corp.

Royal Laser Corp., through its wholly-owned operating subsidiaries, manufactures custom wood and metal products targeted at the multi-billion dollar high-end retail in-store development industry, the OEM industrial products, automotive and construction industries, in Canada, the United States and increasingly, overseas. Royal Laser Corp. employs state of the art industrial technology to fabricate custom and standardized wood and metal products, including robotic wood finishing lines, advanced laser-based computer-integrated manufacturing systems and advanced stamping presses. In addition to contract manufacturing services, Royal Laser provides value-added engineering and design services. The Corporation's common shares trade on the Toronto Stock Exchange under the symbol "RLC" and there are approximately 92.4 million shares outstanding.

For further information on the Corporation, please visit SEDAR at or please contact:

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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" in the Management's Discussion and Analysis and in the Annual Information Form of Royal Laser dated June 29, 2006 and filed on SEDAR at, 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.

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