SOURCE: Unisync Corp.

Unisync Corp.

February 29, 2016 09:30 ET

Unisync Reports First Quarter Financial Results

VANCOUVER, BC--(Marketwired - February 29, 2016) - Unisync Corp. (TSX VENTURE: UNI) ("Unisync"), a leading provider of clothing apparel, highly technical protective garments, military operational clothing and accessories for a broad spectrum of corporate clients and multiple government agencies today reported first quarter financial results for the three months ended December 31, 2015.

The Company reported revenues of $13.4 million, which represented an increase of 28.8% over the last fiscal years' corresponding first quarter revenues of $10.4 million. Cash flow from operations, before non-cash working capital items and distributions to minority partner, was $386,732 for the three months ended December 31, 2015 versus $421,755 for the three months ended December 31, 2014.

Unisync operates through two business segments: Unisync Group Limited ("UGL") of Mississauga, Ontario and Peerless Garments LP ("Peerless") of Winnipeg, Manitoba. UGL is a leading customer-focused provider of corporate apparel, serving a list of leading Canadian iconic brands in a variety of industries. Peerless specializes in the production and distribution of highly technical protective garments, military operational clothing and accessories for a broad spectrum of Federal, Provincial and Municipal government departments and agencies such as the Armed Forces and the RCMP.

The UGL segment recorded a gross profit of 19% during the quarter ended December 31, 2015, compared to 18% for the three-month period ended December 31, 2014. The Peerless segment gross profit of 17% for the current quarter was down from 19% in the same period in the prior year due to reduced absorption of fixed costs on the lower volume of revenue generated in the most recent period.

"Unisync's first-quarter results reflected the continuing impact of the dramatic drop in the Canadian dollar on the UGL segment profit margins as well as reduced deliveries of military operational clothing in the Peerless domestic manufacturing segment," said Douglas F Good, Chief Executive Officer. "Nevertheless, I am extremely pleased with the dedication and ability of our management team to adjust to the devalued Canadian dollar and feel confident that the sourcing changes we have made to offset a portion of the increased cost of outsourced garments will produce long-term benefit to Unisync. Our 2015 acquisition of Ottawa based Carleton Uniforms Inc. ("Carleton") and Vancouver based Omega Uniforms Systems Ltd. ("Omega") provided a much broader geographical reach, which continues to produce positive results both operationally and in new business development. Omega and Carleton accounted for $1.9 million of the $3.0 million increase in revenues in the last quarter over the corresponding quarter last year. Furthermore, our decision to establish a Quebec presence with the hiring of a Montreal based Senior Vice President in early 2015 was a longer-term strategy decision which is beginning to open new opportunities to Unisync."

General and administrative expenses increased by $0.6 million in the three months ended December 31, 2015 from the three months ended December 31, 2014. This increase was mainly attributable to expenses associated with the addition of the Carleton and Omega expenses and the Quebec business development office. Interest expense of $156,254 for the current quarter was up from $139,253 in the same period in fiscal 2014 on account of greater operating loan utilization by the UGL segment to finance the two acquisitions and the effect of increased sales volume on working capital.

In addition to the trailing effects of the declining value of the Canadian dollar on profit margins, the Company's net income of $11,884 in the quarter ended December 31, 2015 ($95,543:2014) was impacted by the establishment of a Quebec presence and an increase in share-based payment expense associated with the grant of stock options in 2015.

More detailed information is contained in the Company's Interim Financial Statements for the three months ended December 31, 2015 and Management Discussion and Analysis dated February 26, 2016 which may be accessed at www.sedar.com.

Business Outlook

It is expected that gross profit margins for the UGL segment will continue to be affected by the trailing impact of the rising costs of offshore purchases caused by the rapid decline of the Canadian dollar against the US dollar. However, UGL margins are expected to return to more normal levels as the exchange rate continues to steady and cost effective sourcing alternatives start to flow through the sales channels.

The Peerless segment is now experiencing an upturn in orders requiring a build-up in production staff and sub-contractor capabilities, which are expected to result in greater deliverables and increased future profitability.

The combined operations of Unisync represent a vertically integrated and proudly Canadian enterprise with exceptional capabilities in garment design, domestic manufacturing and off-shore outsourcing, combined with state-of-the-art web based B2B ordering, distribution and program management systems. For more information on our capabilities, products and services please visit our website at www.unisyncgroup.com.

On Behalf of the Board of Directors

Douglas F Good, CEO

Forward Looking Statements

This news release may contain forward-looking statements that involve known and unknown risk and uncertainties that may cause the Company's actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied in these forward-looking statements. Any forward-looking statements contained herein are made as of the date of this news release and are expressly qualified in their entirety by this cautionary statement. Except as required by law, the Company undertakes no obligation to publicly update or revise any such forward-looking statements to reflect any change in its expectations or in events, conditions or circumstances on which any such forward-looking statements may be based, or that may affect the likelihood that actual results will differ from those set forth in the forward-looking statements.

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.

Contact Information

  • Investor Relations Contact:
    Bristol Capital
    Christopher Filewski
    905 326 1888 ext 40

    Unisync Corp.
    Douglas F Good 
    CEO 
    778-370-1725
    dgood@unisyncgroup.com