Sigma Industries Inc.
TSX VENTURE : SSG

Sigma Industries Inc.

September 19, 2017 17:01 ET

Sigma Industries Reports Strong Fiscal 2018 First Quarter Results

Solid Revenue Growth and Significant Improvement in Operating Profitability

SAINT-ÉPHREM-DE-BEAUCE, QUÉBEC--(Marketwired - Sept. 19, 2017) - Sigma Industries Inc. (TSX VENTURE:SSG), a manufacturing company specializing in the production of composite components, announces results for the first quarter of its 2018 fiscal year ended July 29, 2017.

"Sigma Industries achieved a strong performance in the first quarter of its 2018 fiscal year. Revenues were up nearly 15% and we recorded higher year-over-year sales in most of our principal markets. Operating profitability also significantly improved during the period, as EBITDA more than doubled to reach $2.2 million," said Denis Bertrand, President and Chief Executive Officer of Sigma Industries.

"To ensure Sigma Industries remains at the forefront of business opportunities that may arise, we are proceeding with capital investments as part of a modernization program of our facilities and equipment. Following investments of $420,000 in the first quarter, we expect to accelerate the pace over the remainder of the fiscal year. These investments include a greater automation of our activities, which will partially alleviate the labour shortage we are facing, while further strengthening our reputation as an innovative manufacturer of high-quality composite products," added Mr. Bertrand.

FIRST QUARTER RESULTS

Revenues for the first quarter of fiscal 2018 amounted to $15.4 million, up $2.0 million, or 14.7%, from $13.4 in the previous year. This solid increase essentially reflects higher revenues from the heavy-duty truck industry resulting from improving market conditions, as well as higher sales to the bus and wind energy industries due to higher customer orders.

Earnings before interest, taxes, depreciation and amortization ("EBITDA") totalled $2.2 million, representing 14.3% of revenues, versus $1.0 million, or 7.4% of revenues, a year earlier. The increase, both in dollars and as a percentage of sales, is attributable to greater business activity, a more favourable year-over-year product mix and a foreign exchange gain in the first quarter of fiscal 2018, as opposed to a foreign exchange loss in the first quarter of fiscal 2017.

Sigma Industries concluded the first quarter of fiscal 2018 with net income of $1.4 million, or $0.12 per basic share ($0.05 per diluted share), versus net income of $287,000, or $0.02 per basic share ($0.01 per diluted share) in the first quarter of fiscal 2017.

OUTLOOK

"Looking ahead, we believe that market conditions will continue to improve in the heavy-duty truck industry, which should progressively translate into a higher business volume. We also expect demand to remain solid in our other market niches. In addition, our participation in the Québec government's Accelerated Growth Center program, which assists companies in developing their activities in the United States, should provide us with new growth vectors. The resources at our disposal under this program will allow Sigma Industries to assess every opportunity to increase its reach in the United States and to align its business strategy with the evolution of the American market. This includes finding an optimal location to set up a manufacturing facility in the United States in order to benefit from a closer proximity with our U.S.-based clients and better labour availability. Finally, over the longer term, we could also benefit from the free trade agreement between Canada and the European Union and further expand our presence abroad," concluded Mr. Bertrand.

SELECTED FINANCIAL INFORMATION

Consolidated results of operations Three months ended
(unaudited, in thousands of Canadian dollars except per-share amounts) July 29, 2017 July 30, 2016
$ $
Revenues 15,382 13,411
EBITDA 2,207 990
Net income 1,445 287
per share (basic) 0.12 0.02
per share (diluted) 0.05 0.01
Reconciliation of EBITDA and adjusted EBITDA with net income
(unaudited, in thousands of Canadian dollars)
Three months ended
July 29, 2017 July 30, 2016
$ $
Net income 1,445 287
PLUS (less):
Income tax expense (revenue) 150 0
Depreciation and amortization 379 413
Financial expenses 233 290
EBITDA 2,207 990
PLUS (less):
Net loss (gain) in fair value of foreign exchange derivatives (1,367 ) 213
Adjusted EBITDA 840 1,203
Consolidated balance sheet data As at
(in thousands of Canadian dollars) July 29, 2017 April 29, 2017
$ $
Total assets 25,987 24,839
Total liabilities 19,250 19,553
Shareholders' equity 6,737 5,286

NON-IFRS FINANCIAL MEASURES

The information in this press release includes certain measures that are not financial measures prescribed under IFRS. Sigma Industries uses earnings before interest, taxes, depreciation and amortization ("EBITDA") and adjusted earnings before interest, taxes, depreciation and amortization ("Adjusted EBITDA") in assessing its financial performance. As there is no generally accepted method of calculating these financial measures, they may not be comparable to similar measures reported by other companies. EBITDA is obtained by adding net income (loss) plus income taxes, financial expenses, as well as depreciation and amortization. Adjusted EBITDA consists of EBITDA plus (minus) items not related to current operations. These measures do not represent cash flow available for repayment of debt, payment of dividends, reinvestment or other discretionary uses, and should not be considered in isolation or as a substitute for other measures of performance calculated according to IFRS.

ABOUT SIGMA INDUSTRIES

Sigma Industries Inc. (TSX VENTURE:SSG), a manufacturing company specializing in the production of composite components, has two operating subsidiaries and employs 275 people. The Company is active in the heavy-duty truck, coach, transit, machinery and wind energy markets. Sigma sells its products to original equipment manufacturers and distributors in the United States, Canada and Europe.

FORWARD-LOOKING STATEMENTS

This press release contains certain forward-looking statements about the Company. Such forward-looking statements are dependent on a number of factors and are subject to risks and uncertainties. Actual results may differ from those expected. The information contained in this press release is dated September 19, 2017, the date on which management approved the press release. Management does not assume any obligation to update or revise any forward-looking statements, whether as a result of new information or future events, except as required by law.

Note to readers: Complete unaudited condensed interim financial statements and Management's Discussion & Analysis of Financial Position and Operating Results have been posted on SEDAR and are available at www.sedar.com.

Neither the TSX Venture Exchange nor its regulation services provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

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