Savaria Corporation

TSX : SIS


Savaria Corporation

May 15, 2014 08:00 ET

Savaria Announces Results for the First Quarter of 2014

LAVAL, QUEBEC--(Marketwired - May 15, 2014) - Savaria Corporation (TSX:SIS), North America's leader in the accessibility industry, discloses its results for its first quarter ended March 31, 2014.

First-Quarter Highlights

  • Record revenue for a first quarter of $17.7 million, up 3%, from $17.2 million in 2013;
  • Net income of $1.2 million for the first quarter, stable compared to 2013;
  • Earnings before interest, taxes, depreciation and amortization ("EBITDA") of $2.2 million for the first quarter of 2014 compared to $2.3 million in 2013, slightly down by $58,000 or 2.5%;
  • Declaration in March 2014 of a dividend of 13 cents ($0.13) per common share, broken down into 2 cents ($0.02) for Q4 2013 plus a special year-end dividend of 11 cents ($0.11);
  • Signing of an agreement regarding a private placement that was completed on April 15, 2014 resulting in the issuance of 5,750,000 shares and gross proceeds of $18.7 million.

A Word from the President

"I am very pleased with the achievements of the first quarter of 2014. Despite a difficult start to the year caused by bad weather in eastern North America, we achieved results similar to the first quarter of 2013, which was the best first quarter ever for Savaria," declared Marcel Bourassa, President and Chief Executive Officer of Savaria.

"After the end of the quarter, Savaria completed a private placement to a net amount of $17.7 million, received on April 15, 2014. We are very happy with the market's positive response to our offer. This new cash influx will allow the Corporation to fast track some expansion projects to accelerate growth," concluded Mr. Bourassa.

Operating Results (Comparative Analysis with First Quarter of 2013)

  • In the first quarter of 2014, revenue is up $485,000 or 2.8%, from $17.2 million in first quarter 2013 to $17.7 million in 2014.
  • The gross margin for the first quarter of 2014 is up by $229,000, at 29.2% of revenue compared to 28.7% in the first quarter of 2013.
  • Operating income for the first quarter of 2014 decreased by $304,000 or 17.1% from $1.8 million in 2013 to $1.5 million in 2014. Were it not for an income of $350,000 recorded in the first quarter of 2013 derived from a successful appeal related to sales tax, operating income for the first quarter of 2014 would have been up $46,000 or 3.2%.
  • At $1.2 million, net income for the first quarter of 2014 is stable with the first quarter of 2013.
  • EBITDA for the first quarter fell from $2.3 million or 10 cents per share in 2013 to $2.2 million or 9 cents per share in 2014, a slight decrease of $58,000.

Dividend

As per the Corporation's new dividend policy, the Board of Directors has declared a dividend of 3.5 cents ($0.035) per common share, payable on June 9, 2014 to shareholders of record of the Corporation at the close of business on May 26, 2014. This is an eligible dividend within the meaning of the Income Tax Act.

Savaria Corporation (savaria.com) is North America's leader in the accessibility industry focused on meeting the needs of people with mobility challenges. Savaria designs, manufactures, installs and distributes primarily elevators for home and commercial use, as well as stairlifts and vertical and inclined platform lifts. In addition, it converts and adapts minivans to be wheelchair accessible. The diversity of its product line, one of the world's most comprehensive, enables the Corporation to stand out by proposing an integrated and customized solution for its customers' mobility needs. Its operations in China have substantially grown and the collaboration with Savaria's other Canadian facilities increases its competitive edge in the market place. The Corporation records some 60% of its revenue outside Canada, primarily in the United States. It has a sales network of some 600 retailers in North America and employs some 380 people at its head office in Laval and at its plants and sales offices in Montreal (Quebec), Brampton and London (Ontario), Calgary (Alberta) and Huizhou (China).

Compliance with International Financial Reporting Standards ("IFRS")

The information appearing in this press release has been prepared in accordance with IFRS. However, the Corporation uses EBITDA for analysis purposes to measure its financial performance. This measure has no standardized definition in accordance with IFRS and is therefore regarded as a non-IFRS measure. This measure may therefore not be comparable to similar measures reported by other companies. Reconciliation between net income for the period and EBITDA is provided in the Financial Highlights section below.

Cautionary Notice Regarding Forward-Looking Statements

Certain information in this press release may constitute "forward-looking statements" regarding Savaria, including, without being limited thereto, understanding of the elements that might affect the Corporation's future, relating to its financial or operating performance, the costs and schedule of future acquisitions, supplementary capital expenditure requirements and legislative matters. Most frequently, but not invariably, forward-looking statements are identified by the use of such terms as "plan", "expect", "should", "could", "budget", "expected", "estimated" "forecast", "intend", "anticipate", "believe", variants thereof (including negative variants) or statements that certain events, results or shares "could", "should" or "will" occur or be achieved. Such statements involve known and unknown risks, uncertainties and other factors liable to cause Savaria's actual results, performance or achievements to differ materially from those set forth in or underlying the forward-looking statements. Such factors notably include general, economic, competitive, political and social uncertainties. Although Savaria has attempted to identify the key elements liable to cause actual measures, events or results to differ from those described in the forward-looking statements, other factors could have an impact on the reality and produce unexpected results. The forward-looking statements contained herein are valid at the date of this press release. As there can be no assurance that these forward-looking statements will prove accurate, actual future results and events could differ materially from those anticipated therein. Accordingly, readers are strongly advised not to unduly rely on these forward-looking statements.

Complete financial statements and the management's report for quarter ended March 31, 2014 will be available shortly on Savaria's website and on SEDAR (www.sedar.com).

Financial Highlights

(in thousands, except per-share amounts and percentages - unaudited) Quarters Ended
March 31,
2014 2013 Change
Revenue $ 17,688 $ 17,203 2.8 %
Gross margin as a % of revenue 29.2 % 28.7 % n/a
Operating costs $ 3,689 $ 3,506 5.2 %
As a % of revenue 20.9 % 20.4 % n/a
Operating income $ 1,474 $ 1,778 (17.1 )%
As a % of revenue 8.3 % 10.3 % n/a
Gain on foreign exchange $ 309 $ 96 222 %
Net income $ 1,205 $ 1,232 (2.2 )%
Earnings per share - basic and diluted $ 0.05 $ 0.05 - %
EBITDA (1) $ 2,220 $ 2,278 (2.5 )%
EBITDA per share - basic and diluted $ 0.09 $ 0.10 (10 )%
Dividends declared per share $ 0.13 $ 0.08 n/a
Weighted average number of commonshares outstanding - diluted 23,748 23,109 n/a
As at March 31, 2014 As at Dec. 31, 2013
Total assets $ 51,537 $ 49,013
Total liabilities $ 34,061 $ 28,780
Shareholders' equity $ 17,476 $ 20,233
(1) Reconciliation of EBITDA with net income provided in the following table.

Although EBITDA is not recognized according to IFRS, it is used by management, investors and analysts to assess the Corporation's financial and operating performance.

Reconciliation of EBITDA with Net Income

(in thousands of dollars - unaudited)
Quarters ended March 31,
2014 2013
Net income $ 1,205 $ 1,232
Plus :
Interest on long-term debt 136 174
Interest expense and banking fees 22 22
Income tax expense 422 478
Depreciation of fixed assets 240 173
Amortization of intangible assets 197 201
Less:
Interest income 2 2
EBITDA $ 2,220 $ 2,278

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