Synergex Corporation
TSX : SYX

Synergex Corporation

June 30, 2009 22:40 ET

Synergex Announces Fourth Quarter and Year End Results

MISSISSAUGA, ONTARIO--(Marketwire - June 30, 2009) - Synergex Corporation (TSX:SYX) ("Synergex" or the "Company"), a premier international integrated logistics and distribution service provider, today announced its financial results for the fourth quarter and year ended December 31, 2008.

Sales in the fourth quarter were $59.9 million compared to $116.7 million in the fourth quarter of 2007. Revenues were $176.6 million in the year ended December 31, 2008 compared to $199.0 million in the prior year.

In order to provide a meaningful historical comparison the Company calculates "normalized" revenues by deducting the low-margin billings of its SRS subsidiary, which it wound down in October of 2008. Accordingly, during the fourth quarter of 2008, the Company generated $59.9 million in sales on a normalized basis compared to the prior year's $63.1 million in the same period. Normalized sales for the year ended December 31, 2008 increased to $145.2 million compared to the prior year's $110.8 million. The Company experienced this increase despite sales declining in the Company's seasonally strong fourth quarter due to the global financial crisis. The impact of the financial crisis restricted the Company's working capital during the fourth quarter, limiting sales in this key period. In addition, the tightening of credit terms and the increased cost of foreign exchange impacted Synergex' gross profit margin.

The Company experienced significant revenue growth in Latin America after completing its first full year of operations, generating over $35 million in sales, an increase of 289% over the prior year. Management expects sales from Latin America to steadily increase over the next few years.

For 2008, Latin America contributed a loss before income taxes of $4.1 million, compared to $1.2 million loss in 2007. Included in the 2008 loss is $2.4 million of start-up costs incurred in 2007, which have now been fully written-off in 2008.

Synergex generated an EBITDA loss of $0.55 million for the 2008 year ended December 31st compared with a positive EBITDA of $3.6 million in 2007. The Core Canadian Operations continues to generate strong results, contributing $5.6 million of EBITDA in 2008, despite fourth quarter losses of $1.2 million. These losses were related to the declines in revenues and lower margins resulting from the global financial crisis as outlined above. The cost of the Company's corporate overhead on an EBITDA basis increased from $4.2 million in 2007 to $4.6 million in 2008, primarily as a result of additional overhead costs to support Latin American operations not present in 2007.

"The global financial crisis during the Company's seasonal peak operating period was an unprecedented challenge, but despite the adverse market conditions our core Canadian business remained profitable and Latin America experienced strong growth. It is important that we continue to protect and strengthen our Company from within and proceed with renewed focus and commitment of our growth strategy in Canada and Latin America." said David Aiello, President and CEO of Synergex Corporation.

Synergex' primary sources of liquidity are cash flow from operations, a revolving credit facility of between $5 million to 11 million, capital leases used to fund equipment purchases, and a long term debt facility of $10 million to replenish working capital. In addition, as previously announced, the Company has accepted a USD$6 million dollar long-term financing proposal in the first half of 2009.

"We have been collaboratively working with our lenders to strengthen our working capital to support the growth of our businesses worldwide." said Aiello.

The Company's audited financial statements, Management's Discussion and Analysis ("MD&A"), and Annual Information Form ("AIF") can be found at www.sedar.com. Management will host a conference call with shareholders on July 2nd at 11:00am EDT. Participants may access the conference call by dialing 416-644-3414 (or 1-800-733-7560).

About Synergex Corporation

Synergex is a premier international service provider of supply chain management solutions, specializing in logistics, distribution, freight forwarding, localization and packaging services. 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.

Forward-Looking Information

This news release contains certain statements that constitute forward-looking information within the meaning of applicable securities laws ("forward-looking statements"). Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of Synergex to differ materially from the anticipated results, performance or achievements expressed or implied by such forward-looking statements. Forward-looking statements in this press release include, but are not limited to, the Company's expectation with respect to applying to the applicable securities regulatory authorities for a management cease trade order, the expected time for filing of the Company's Required Documents and the imposition of a cease trade order by applicable securities regulatory authorities. Forward-looking statements may also include, without limitation, any statement relating to future events, conditions or circumstances. The forward-looking statements are subject to risks, uncertainties and other factors that could cause actual results or events to differ materially from current expectations including, but not limited to, the risks detailed from time to time in Synergex' filings with Canadian provincial securities regulators. Synergex cautions you not to place undue reliance upon any such forward-looking statements, which speak only as of the date they are made. Forward-looking statements are based on management's current plans, estimates, projections, beliefs and opinions, and Synergex does not undertake any obligation to update forward-looking statements should assumptions related to these plans, estimates, projections, beliefs and opinions change.

Contact Information

  • Synergex Corporation
    Kevin Daniels
    Chief Communications Officer
    905-740-3128
    kevin.daniels@syx.ca
    or
    Synergex Corporation
    David Aiello
    President and Chief Executive Officer
    905-565-1212
    david.aiello@syx.ca