Synergex Corporation
TSX : SYX

Synergex Corporation

May 15, 2008 10:00 ET

Synergex Announces First Quarter Profitability

Latin American sales contribute to Q1 growth Strong demand for software drives margin gains

MISSISSAUGA, ONTARIO--(Marketwire - May 15, 2008) - Synergex Corporation (TSX:SYX) ("Synergex" or "the Company"), a leading provider of integrated logistics and distribution services, today announced improved sales and profitability for the first quarter ending March 31, 2008.

Sales for the quarter increased to $28.8 million versus $26.1 million for the same period last year, reflecting growth in the Company's core international integrated logistics and distribution operations, as well a $3.8 million contribution to revenue from its recently started Latin American operations.

Net income was $48,000 an increase of $90,000 compared to the loss of $42,000 for the comparable period last year, notwithstanding the non cash amortization of $610,000 of previously deferred start-up costs for Latin American operations and facilities. The Company will expense 100% of deferred start-up costs during 2008.

EBITDA in the quarter increased to $1.2 million from $117 thousand in the first quarter in 2007.

Gross profit increased 48% to $5.145 million from $3.456 million for the comparable period in 2007. In spite of pricing pressures from a rising Canadian dollar, gross margins in the core logistics and distribution operations grew to 17.9% from 13.2% in the same quarter of 2007.

Margin growth reflected increased demand for game software following last year's strong sales of next generation game consoles, a pattern expected to continue in 2008.

"We are pleased with first quarter results, which favorably reflect the contributions of our core Commercial Gateway operations in Canada, and our expansion into Latin America," said David Aiello, President and CEO of Synergex Corporation. "We expect our continued growth will be driven by product line expansion and the penetration of new markets in Latin America."

About Synergex Corporation

Synergex is a Canadian-based international integrated logistics company providing distribution, freight forwarding and logistics services under its Commercial Gateway business group. It is among the largest distributors of video games, game consoles, portable units, and accessories in Canada.

In 2007, the core Commercial Gateway Logistics and Distribution operations represented 97% of the company's total revenue. Product lines are being expanded to include other licensed products related to video games or their license owners, taking advantage of the wide range of products originating from movies, home entertainment and licensed characters often included within, or resulting from, the creation of video games.

Headquartered in Mississauga, Ontario, with operations across North, Central and South America, Synergex serves a broad base of customers that includes a number of multinational enterprises. Synergex is listed on the Toronto Stock Exchange and trades under the symbol SYX. For further information, please visit www.syx.ca.

Conference Call Information

The Company will hold a conference call with investors on Thursday, May 15, 2008 at 11:00am (EDT). The conference call, hosted by David Aiello, President and Chief Executive Officer; Nick Blasutto, Chief Financial Officer; Eric So, Vice-President, Corporate Strategy; and John L. Smith, Senior Vice President will discuss the Company's financial results for the fourth quarter, year end, and its outlook for future periods. To access the investor conference call, please dial 416-644-3432 or 1-800-796-7558. A live web cast of this call will be available in the Investor Relations section of the Company's website, www.syx.ca.

A recording of the conference call will be available as of 5 p.m. (EST) the same day, until midnight May 22, 2008. To access the recording, dial 416-640-1917 or 1-877-289-8525, followed by the pass code 21271793#. An archived recording of the web cast will remain available on Synergex' website until the next quarterly financial results conference call.

Forward Looking Statements

Some of the statements contained in this news release may be forward-looking statements such as the Company's future plans, objectives and goals. The statements that are not historical facts are forward-looking statements involving known and unknown risks and uncertainties, which could cause actual results to vary considerably from these statements.

Contact Information

  • Synergex Corporation
    David Aiello
    President and CEO
    (905) 565-1212
    or
    Synergex Corporation
    Eric So
    Vice President
    (905) 740-3274
    or
    Synergex Corporation
    John L. Smith
    Senior Vice President
    (905) 740-5168
    Website: www.syx.ca