Savaria Corporation
TSX : SIS

Savaria Corporation

May 12, 2009 12:43 ET

Savaria Significantly Reduces Operating Loss for the First Quarter of 2009

LAVAL, QUEBEC--(Marketwire - May 12, 2009) - Savaria Corporation (TSX:SIS), the second largest company in the accessibility industry in North America, announces its financial results for the first quarter of 2009.

First-Quarter Highlights

- Sales of $11 million, compared with $12 million in the corresponding quarter of 2008;

- $575,000 reduction in operating loss, which was lowered to $137,000 for the first quarter of 2009 from $712,000 for the first quarter of 2008;

- Recognition of a $902,000 gain relating to a put option following the restructuring of asset-backed commercial paper ("ABCP") and the signing of financing agreements;

- Delivery of first unit, by the subsidiary Van-Action, of a new vehicle called "TX Plus", with a rear entry in addition to a side entry, for the adapted transport of people with mobility problems.

A Word from the President

"I am most satisfied with our results for the first quarter of 2009. This first quarter, generally the weakest of the year, yielded a $137,000 operating loss, compared with a $712,000 operating loss in the first quarter of 2008. The significant reduction in the loss, achieved despite a 8% decrease in sales, highlights the work done in controlling costs. It should be noted that the fair value of our foreign exchange contracts, that was a negative $7.2 million as at March 31, 2009, is down to a loss of $2.5 million as at May 11th due to the strength of the Canadian dollar compared to the U.S, dollar," said Marcel Bourassa, Chairman of the Board, President and Chief Executive Officer.

"Our balance sheet remains very solid and will allow us to carry out our projects in regard to both product development and the search for new markets," concluded Mr. Bourassa.

Operating Results

Sales

The Corporation recorded sales of $11,041 million in the first quarter of 2009, compared with $12,010 million in the same quarter of 2008, a decrease of 8.1%.

During the first quarter, the number of units sold in the Accessibility segment was down by 14% for Elevators products and by 21% for Accessibility products from the first quarter of 2008, due to the U.S. economic slowdown. This decrease was partially offset by an increase in selling prices. In the Adapted Transportation segment, first-quarter revenues grew by $312,000 or 17%, due primarily to the increase in the Vehicle Adaptation Department's revenues.

First-quarter sales in Canada, the United States and outside North America amounted to $4.8 million, $5.6 million and $0.6 million respectively. U.S. sales, which decreased from 54% to 50% as a percentage of total sales, were recognized at an average translation rate of 1.0670, whereas this rate was 1.0063 in the first quarter of 2008.

Gross Profit

Gross profit improved to $2.776 million in the first quarter of 2009 from $2.290 million a year earlier, representing a 6% increase as a percentage of sales. This improvement is attributable to the measures taken to control costs and offset the decline in sales volume.

Net Earnings

The Corporation posted net earnings of $555,000 or 2 cents per share, as opposed to a net loss of $588,000 or 2.1 cents per share in the same period of 2008. In addition to the $575,000 improvement in the operating loss, a $646,000 gain relating to a put option (net of taxes of $256,000) had a positive impact on first-quarter net earnings.

Capital Stock

Due to the share repurchase and cancellation program underway, the average number of diluted common shares outstanding totalled 27,229,181 in the first quarter of 2009, compared with 27,483,578 shares in the same quarter of 2008.

Forward-Looking Statements

Certain statements in this press release may be forward-looking. Forward-looking statements involve known and unknown risks, uncertainties or other factors that may cause the Corporation's actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. The reader is warned against the risk of giving excessive credibility to these forward-looking statements.

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.

Savaria Corporation (www.savariaconcord.com) is Canada's leader and the second largest accessibility company in North America. The Corporation designs, manufactures and distributes products meeting the needs of people with mobility challenges, primarily stairlifts, vertical and inclined platform lifts, as well as elevators for residential and commercial use. Through its subsidiary Van-Action (2005) Inc., Savaria also converts and adapts automotive vehicles for the disabled. Its sales rely on a network of some 600 retailers in North America. Savaria records approximately 60% of its sales outside Canada and employs some 400 people.

Complete financial statements and the management's report for the quarter ended March 31, 2009 will shortly be available on Savaria's website and on SEDAR (www.sedar.com).



Financial Highlights
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(in thousands, except per-share amounts, Quarters Ended
percentages and exchange rates - unaudited) March 31,
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2009 2008 Variation
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Average effective exchange rate (1) 1.0670 1.0063 0.0607
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Sales $11,041 $12,010 (8.1)%
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Gross profit as a % of sales 25.1% 19.1% n/a
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Selling and administrative expenses $2,714 $2,784 (2.5)%
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Selling and administrative expenses
as a % of sales 24.6% 23.2% n/a
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Operating loss $137 $712 (80.8)%

Operating loss as a % of sales 1.2% 5.9% n/a
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EBITDA (2) $1,097 $(388) 383%
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EBITDA per share $0.040 $(0.014) 386%
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Exchange gain $66 $277 76.2%
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Net earnings (loss) $555 $(588) 194%
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Net earnings (loss) per share -
basic and diluted $0.02 $(0.021) 195%
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Dividends declared per share $0.03 - n/a
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Weighted average number of common
shares outstanding - diluted 27,229 27,484 (0.9)%
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As at March 31, 2009 As at Dec. 31, 2008
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Total assets $42,156 $40,683
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Total liabilities $25,298 $22,845
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Shareholders' equity $16,857 $17,839
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(1) Calculated considering foreign exchange contracts used during the
Period

(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

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Quarters Ended
(in thousands of dollars - unaudited) March 31,
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2009 2008
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Net earnings (loss) $555 $(588)
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Plus:

Interest on long-term debt $77 35
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Interest expense and banking fees $30 $93
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Income taxes $265 $(114)

Amortization of fixed assets $92 $110
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Amortization of deferred development costs $73 $71
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Amortization of intangible assets $34 $38
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Less:

Interest income and dividends $29 $33
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Earnings before interest, income taxes
and amortization ("EBITDA") $1,097 $(388)
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Contact Information

  • Savaria Corporation
    Marcel Bourassa
    Chairman of the Board, President and Chief Executive Officer
    1-800-931-5655
    or
    Savaria Corporation
    Helene Bernier, CA
    Vice-President, Finance
    1-800-931-5655
    www.savariaconcord.com