VANCOUVER, BC--(Marketwired - August 30, 2016) - Unisync Corp. (TSX VENTURE: UNI) ("Unisync") today reported revenues of $12.5 million for the three months ended June 30, 2016, representing an increase of 14.7% over the last fiscal years' corresponding quarter revenues of $10.9 million.
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 margin of 10% during the quarter ended June 30, 2016, down from 12% in the previous quarter and off significantly from more normalized historical levels of 19-20%. The UGL segment's gross profit margins in recent reporting periods have been negatively impacted by the sharp drop in the Canadian dollar against the US dollar and its effect on the segment's offshore product purchases. The Peerless segment gross profit margin of 18% for the current quarter was up from 17% reported in both the previous quarter and the same period in the prior year.
General and administrative expenses increased by $308,580 in the three months ended June 30, 2016 from the three months ended June 30, 2015 mainly as a result of the inclusion of a full quarter's expenses of Carleton and Omega in the current quarter. Interest expense of $243,086 for the current quarter was up from $145,585 in the same period in fiscal 2015 on account of greater operating loan utilization by the UGL segment to finance the effect of increased sales volume on working capital and higher borrowing costs on subordinated shareholder loans. Share-based payment expense associated with the grant of stock options in 2015 amounted to $28,977 (Q3 2015: $201,267).
The Company reported a net loss of $529,879 in the quarter ended June 30, 2016, up from a net loss of $123,523 in the comparable quarter last year for the reasons cited above. Cash flow from operations, before non-cash working capital items and distributions to minority partner, was a loss of $250,969 for the three months ended June 30, 2016 but a positive $203,990 for the nine months ended June 30, 2016.
More detailed information is contained in the Company's Interim Financial Statements for the three months ended June 30, 2016 and Management Discussion and Analysis dated August 26, 2016 which may be accessed at www.sedar.com.
Approximately 55% of the UGL segment's direct expenses are made in US dollars relating to offshore product purchases that take six months on average to be converted to sales. The recent stabilization of the Canadian dollar against the US dollar at higher levels than at the beginning of 2016, combined with sourcing changes to offshore duty-free jurisdictions, should start to improve margins in the last quarter of this fiscal year. The combination of improving margins and an increase in projected revenues from UGL's established and recently acquired accounts, is expected to result in an increase in profitability for the UGL segment especially during the latter half of Fiscal 2017.
The Peerless segment is experiencing an upturn in orders requiring a build-up in production staff and sub-contractor capabilities, which is also expected to result in increased future revenues and profitability in this business segment.
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
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.
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