Savaria Corporation
TSX : SIS

Savaria Corporation

August 07, 2013 08:30 ET

Savaria Reports Best Quarterly Results in its History

LAVAL, QUEBEC--(Marketwired - Aug. 7, 2013) - Savaria Corporation (TSX:SIS), North America's leader in the accessibility industry, today announced its results for the second quarter ended June 30, 2013.

Highlights

  • Revenue for 2nd quarter is up 11% from $17.5 million in 2012 to $19.4 million in 2013. This is the highest quarterly revenue in the Corporation's history;

  • Net income for 2nd quarter is up 106% or $734,000, from $691,000 in 2012 to $1.4 million in 2013;

  • Earnings before interest, taxes, depreciation and amortization ("EBITDA") are $2.5 million for the 2nd quarter of 2013 compared to $1.6 million in 2012, an increase of 58% or $924,000. This is the highest quarterly EBITDA in the history of the Corporation;

  • Transfer of plant operations in China to a new location to double the production area;

  • Payment of a first quarterly dividend of two cents ($0.02) per common share, following the adoption of a new dividend policy.

A Word from the President

"The second quarter of 2013 is the best quarter in the history of Savaria, both in revenue and EBITDA. Record revenue of $19.4 million, combined with an excellent productivity from our various divisions, have resulted in a record quarterly EBITDA of $2.5 million, or 11 cents per common share," declared Marcel Bourassa, President and Chief Executive Officer of Savaria.

"This May, our Chinese plant has more than doubled its area, from 35,000 square feet to 75,000 square feet. This will help it increase its production capacity in order to meet the growing demand for accessibility products coming from our Brampton plant.

"The development of our stairlift for curved staircases is progressing as planned and it will be launched in September. This product will be offered through our 600 North American retailers as well as our direct sales offices in Montreal, Toronto, Calgary and Edmonton. We are looking forward to the coming quarters with enthusiasm, given the growing demand for accessibility products facilitating the movement of people with mobility challenges", concluded Mr. Bourassa.

Operating Results (Comparative Analysis with Second Quarter and First Semester of 2012)

  • In the second quarter of 2013, revenue is up $1.9 million or 11%, from $17.5 million in second quarter 2012 to $19.4 million. For the first semester of 2013, revenue is up $3.9 million or 11.9%, from $32.7 million to $36.6 million.

  • Gross margin for the second quarter of 2013 is up $1 million, at 30.5% of revenue, compared to 27.9% in the second quarter of 2012. For the first semester of 2013, gross margin is up $1.7 million, at 29.6% of revenue compared to 27.8% in 2012. This increase is due to the increase in revenue and to the cost savings following the relocation of the Brampton plant in the building acquired in 2012.

  • Operating income for the second quarter of 2013 is up $846,000 or 78% from $1.1 million in 2012 to $1.9 million in 2013. For the first semester of 2013, operating income increased $1.9 million or 107% from $1.8 million to $3.7 million.

  • Net income for the second quarter of 2013 is up 106% from $691,000 in 2012 to $1.4 million in 2013, an increase of $734,000. For the first semester of 2013, net income is up 153% from $1.1 million to $2.7 million, an increase of $1.6 million.

  • EBITDA for the second quarter of 2013 is up by $924,000 or 58%, from $1.6 million in 2012 to $2.5 million in 2013. For the first semester of 2013, EBITDA is up $2.2 million or 83.3%, from $2.6 million in 2012 to $4.8 million in 2013.

Dividend

The Corporation's Board of Directors has declared a dividend of 2 cents ($0.02) per common share, payable on August 29, 2013 to shareholders of record of the Corporation at the close of business on August 15, 2013. 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 wheelchair accessible automotive vehicles and 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 and the collaboration with Savaria's other Canadian facilities increases its competitive edge in the market place. The Corporation records slightly over 50% 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 360 people at its head office in Laval and at its plants 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 June 30, 2013 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 June 30, Six-Month Periods Ended June 30,
2013 2012 Change 2013 2012 Change
Revenue $ 19,397 $ 17,472 11 % $ 36,600 $ 32,703 11.9 %
Gross margin as a % of revenue 30.5 % 27.9 % n/a 29.6 % 27.8 % n/a
Operating costs $ 3,963 $ 3,664 8.2 % $ 7,469 $ 7,178 4.1 %
As a % of revenue 20.4 % 21 % n/a 20.4 % 21.9 % n/a
Operating income $ 1,936 $ 1,090 77.6 % $ 3,714 $ 1,796 107 %
As a % of revenue 10 % 6.2 % n/a 10.1 % 5.5 % n/a
Gain on foreign exchange $ 126 $ 65 93.8 % $ 222 $ 35 584 %
Net income $ 1,425 $ 691 106 % $ 2,657 $ 1,051 153 %
Earnings per share - diluted $ 0.06 $ 0.03 100 % $ 0.11 $ 0.05 120 %
EBITDA (1) $ 2,525 $ 1,601 57.7 % $ 4,802 $ 2,620 83.3 %
EBITDA per share - basic and diluted $ 0.11 $ 0.07 57.1 % $ 0.21 $ 0.11 90.9 %
Dividends declared per share $ 0.02 - n/a $ 0.10 $ 0.094 n/a
Weighted average number of common shares outstanding - diluted 23,302 23,126 n/a 23,214 23,137 n/a
As at June 30, 2013 As at Dec. 31, 2012
Total assets $ 47,936 $ 49,380
Total liabilities $ 29,723 $ 30,156
Shareholders' equity $ 18,213 $ 19,224
(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 June 30, Six-Month Periods Ended June 30,
2013 2012 2013 2012
Net income $ 1,425 $ 691 $ 2,657 $ 1,051
Plus:
Interest on long-term debt 156 194 330 318
Interest expense and banking fees 24 20 46 44
Income tax expense 532 340 1,010 490
Depreciation of fixed assets 208 176 381 353
Amortization of intangible assets 182 188 383 380
Less:
Interest income 2 8 4 16
EBITDA $ 2,525 $ 1,601 $ 4,803 $ 2,620

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