Savaria Corporation
TSX : SIS

Savaria Corporation

March 30, 2011 08:00 ET

Savaria Raises its EBITDA by 29% to 23.3 Cents per Share for Fiscal 2010 and Declares a Dividend of 10.2 Cents per Share

LAVAL, QUEBEC--(Marketwire - March 30, 2011) - Savaria Corporation (TSX:SIS), Canada's leader in the accessibility industry, today disclosed its results for the fourth quarter and fiscal year ended December 31, 2010.

Fiscal 2010 Highlights

  • Sales up by 18% to $65.2 million, representing the best annual sales since the start of operations;

  • EBITDA up by 29% to $5.3 million or 23 cents per share, representing the best EBITDA since the start of operations;

  • Earnings per share of 10.8 cents, up from 8.9 cents for 2009, an increase of 21%;

  • Four acquisitions, including two in the Accessibility segment and two in the Adapted vehicles segment, bringing sales on a annualized basis to a potential of $70 million;

  • ISO 9001 certification obtained by the Chinese subsidiary Savaria Huizhou, thereby confirming the application of high level manufacturing standards.

A Word from the President

"Savaria achieved its best results ever in 2010. Sales reached a record high of $65 million, a growth of more than 18% over 2009, whereas EBITDA rose to a record high of $5.3 million, an increase of more than 29% over 2009. The Corporation also closed four acquisitions in Canada, thereby confirming our leadership in the accessibility industry. These companies will benefit from our manufacturing expertise and the strength of our sales network and marketing," indicated Marcel Bourassa, President and Chief Executive Officer of Savaria.

"I therefore believe a very bright future lies ahead for Savaria, over both the short and long term. We are led to infer that these results attest simultaneously to the Corporation's financial health and its great potential," concluded Mr. Bourassa.

Operating Results

Sales

The Corporation recorded sales of $17.4 million for the fourth quarter of 2010, compared with $14.3 million for the corresponding quarter of fiscal 2009, an increase of 21% or $3.1 million. The new subsidiaries acquired in 2010 contributed total sales of $3.6 million for the quarter, of which $1.7 million for the Accessibility segment and $1.9 million for the Adapted Vehicles segment.

For fiscal 2010, sales rose 18% from $55.2 million in 2009 to $65.2 million in 2010, representing the highest annual sales in the Corporation's history. Of this $10.1 million increase, $8.4 million came from the contribution of the subsidiaries acquired in 2010.

Gross Profit

Gross profit grew by $781,000 for the fourth quarter of 2010 over the same period in 2009.

For fiscal 2010, gross profit was up by $3.9 million over 2009, and the gross margin rose from 27% to 29%. The sales growth and various measures, including greater productivity and a major increase in purchases from the Chinese subsidiary Savaria Huizhou and other Chinese suppliers, contributed to improve the Corporation's gross margin.

Operating Earnings

Operating earnings, which were up slightly in the fourth quarter of 2010 over the corresponding quarter of 2009, jumped by $1.6 million or 58% for the fiscal year, rising from $2.8 million in 2009 to $4.3 million in 2010.

Net Earnings

Net earnings declined from $816,000 in the fourth quarter of 2009 to $515,000 in the same quarter of 2010, and grew by $216,000 or 10% for the twelve-month period, from $2.3 million in 2009 to $2.5 million in 2010.

Dividend

The Corporation's Board of Directors has declared a dividend of 10.2 cents ($0.102) per common share, payable on April 26, 2011 to shareholders of record of the Corporation at the close of business on April 12, 2011. This is an eligible dividend within the meaning of the Income Tax Act.

Savaria Corporation (www.savaria.com) is Canada's leader and the second largest North American company in the accessibility industry focused on meeting the needs of people with mobility challenges. Savaria designs, manufactures and distributes primarily elevators for residential and commercial use, as well as stairlifts and vertical and inclined platform lifts. In addition, it converts and adapts wheelchair accessible automotive vehicles and also offers scooters and motorized wheelchairs. 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 since 2006 and the collaboration with Savaria's other Canadian facilities increases its competitive edge on the market. The Corporation records slightly over 50% of its sales outside Canada, primarily in the United States. It has a sales network of some 600 retailers in North America and employs 420 people at its head office in Laval and at its plants in Ville Saint-Laurent (Quebec), Brampton, and London (Ontario), Calgary (Alberta) and Huizhou (China).

Compliance with Canadian Generally Accepted Accounting Principles

The information appearing in this press release has been prepared in accordance with Canadian generally accepted accounting principles ("GAAP"). However, the Corporation uses earnings before interest, income taxes and amortization ("EBITDA") for analysis purposes to measure its financial performance. This measure has no standardized definition in accordance with GAAP and is therefore regarded as a non-GAAP measure. This measure may therefore not be comparable to similar measures reported by other companies. A reconciliation between net earnings 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 statement" 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 actions "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 the fiscal year ended December 31, 2010 will be available shortly on Savaria's website and on SEDAR (www.sedar.com).

Financial Highlights

(in thousands, except per-share amounts, percentages and exchange rates) Quarters Ended
December 31,
(Unaudited)
  Fiscal Years
Ended
December 31,
 
2010   2009   Change   2010   2009     Change  
Average effective exchange rate (1) 1.1017   1.0832   1.7 % 1.1018   1.0725     2.7 %
Sales $17,372   $14,301   21.5 % $65,236   $55,172     18.2 %
Gross profit as a % of sales 28.2 % 28.8 % n/a   28.5 % 26.7 %   n/a  
Selling and administrative expenses $3,397   $2,746   23.7 % $12,982   $11,143     16.5 %
Selling and administrative expenses as a % of sales 19.6 % 19.2 % n/a   19.9 % 20.2 %   n/a  
Operating earnings $1,189   $1,153   3.2 % $4,348   $2,755     57.8 %
Operating earnings as a % of sales 6.8 % 8.1 % n/a   6.7 % 5.0 %   n/a  
EBITDA (2) $1,146   $1,302   (12 )% $5,331   $4,121     29.4 %
EBITDA per share – diluted $0.05   $0.06   (16.7 )% $0.23   $0.16     43.8 %
Exchange loss $302   $77   292 % $256   $393     (34.9 )%
Net earnings $515   $816   (36.9 )% $2,474   $2,258     9.6 %
Net earnings per share – basic and diluted $0.02   $0.04   (50 )% $0.11   $0.09     22.2 %
Dividends declared per share -   -   n/a   $0.084   $0.03     180 %
Weighted average number of common shares outstanding – diluted 23,444   22,183   5.7 % 22,869   25,411     (10 )%
  As at Dec. 31, 2010   As at Dec. 31, 2009
Total assets $47,960   $39,888
Total liabilities $25,321   $19,099
Shareholders' equity $22,639   $20,789

(1) Calculated considering foreign exchange contracts applied to the periods in question

(2) Reconciliation of EBITDA with net earnings provided in the following table

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

Reconciliation of Earnings before Interest, Income Taxes and Amortization ("EBITDA") with Net Earnings

(in thousands of dollars) Quarters Ended
December 31,
Fiscal Years Ended
December 31,
2010 2009 2010 2009
Net earnings $515 $816 $2,474 $2,258
Plus:
Interest on long-term debt
 
162
 
97
 
532
 
319
Interest expense and banking fees 37 21 149 120
Income taxes 122 165 975 644
Amortization of fixed assets 110 109 478 395
Amortization of intangible assets 205 113 775 439
Less:
Interest income and dividends
 
5
 
19
 
52
 
54
EBITDA $1,146 $1,302 $5,331 $4,121

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