Laval, Quebec, November 8, 2011– Savaria Corporation (TSX: SIS), Canada’s leader in the accessibility industry, today disclosed its results for the third quarter ended September 30, 2011.
Net income for the period of $1.3 million, an increase of 68%;
Earnings before interest, income tax, depreciation and amortization (“EBITDA”) of $2.3 million, compared with $1.6 million in the third quarter of 2010; this represents the Corporation’s highest quarterly EBITDA ever; Revenue of $17.4 million, a decrease of 1.6% from the third quarter of 2010 attributable to unfavourable fluctuations in the Canadian dollar.
A Word from the President
“Following a disappointing second quarter, results for the third quarter were in line with our expectations. Revenue totalled $17.4 million and EBITDA rose to $2.3 million, representing the highest EBITDA ever achieved by the Corporation. The efforts of our management teams in all our divisions contributed to raise our EBITDA to 10 cents per share despite a similar sales level to the corresponding quarter of 2010. However, we should point out that the sharp rise in the U.S. dollar against the Canadian dollar at the end of the quarter had a favourable impact of 2.2 cents on the quarter’s EBITDA,” indicated Marcel Bourassa, President and Chief Executive Officer of Savaria.
“We are still faced with difficult conditions in the U.S. housing sector, but we are confident that our accessibility products will continue to be in demand due to the aging population,” concluded Mr. Bourassa.
Operating Results (Comparative Analysis for the Third Quarter and First Nine Months of 2010)
- The Corporation achieved revenue of $17.4 M for the third quarter of 2011, compared with $17.7 M in 2010, a decrease of 1.6% or $287,000. The unfavourable change in the U.S. dollar against the Canadian dollar represented $719,000. The contribution of the new subsidiaries acquired in 2010 totalled $403,000 for the Adapted Vehicles segment. For the first nine months of 2011, revenue grew by $1.1 M or 2.2%. The contribution of the new subsidiaries acquired in 2010 totalled $3.8 M, amounting to $884,000 for the Accessibility segment and $2.9 M for theAdapted Vehicles segment.
- The gross margin for the third quarter of 2011 increased by $162,000 and represented 29.5% of revenue, compared with 28.1% in 2010. For the first nine months of 2011, the gross margin increased by $213,000 but decreased slightly as a percentage of revenue, from 28.1% to 27.9%.
- Operating income for the third quarter of 2011 posted a slight decline of 6% or $82,000, slipping from $1.4 M in 2010 to $1.3 M in 2011. Changes in presentation subsequent to the implementation of International Financial Reporting Standards (“IFRS”) had a positive impact of $240,000 on 2010 operating income. For the first nine months, operating income was down by $950,000 or 28.7%. Changes in presentation subsequent to the implementation of IFRS accounted for $121,000 of this unfavourable variance. Operating costs increased by $735,000, whereas the expenses of the subsidiaries acquired in 2010 amounted to $1.2 M.
- Third quarter net income rose 68%, from $767,000 in 2010 to $1.3 M in 2011. This $519,000 increase includes a favourable change in the gain on foreign exchange of $620,000 and the fair value of restructured notes and the put option of $173,000. For the first nine months, net income for the period decreased by $477,000, slipping from $2.1 M in 2010 to $1.6 M in 2011.
Transition to IFRS
Due to their coming into effect on January 1, 2011, the Corporation has started to present its financial results for fiscal 2011, as well as corresponding figures for 2010, in accordance with IFRS. For further information in this regard, the reader is referred to Section 12, Significant Accounting Policies and Estimates, of the management’s report for the first quarter of 2011.
Savaria Corporation (savaria.com) is Canada’s leader and the second largest North American company in the accessibility industry focused on meeting the needs of people with mobility challenges. Savaria designs, manufactures and distributes primarily elevators for home and commercial use, as well as stairlifts and vertical and inclined platform lifts. In addition, it converts and adapts wheelchair accessible automotive vehicles and also offers scooters and motorized wheelchairs. The diversity of its product line, one of the world’s most comprehensive, enables the Corporation to stand out by proposing an integrated and customized solution for its customers’ mobility needs. Its operations in China have substantially grown since 2006 and the collaboration with Savaria’s other Canadian facilities increases its competitive edge in the market place. The Corporation records slightly over 50% of its sales outside Canada, primarily in the United States. It has a sales network of some 600 retailers in North America and employs 400 people at its head office in Laval and at its plants in Ville Saint-Laurent (Quebec), Brampton and London (Ontario), Calgary (Alberta) and Huizhou (China).
Compliance with IFRS
The information appearing in this press release has been prepared in accordance with IFRS. However, the Corporation uses (“EBITDA”) for analysis purposes to measure its financial performance. This measure has no standardized definition in accordance with IFRS and is therefore regarded as a non-IFRS measure. This measure may therefore not be comparable to similar measures reported by other companies. A reconciliation between net income for the period and EBITDA is provided in the Financial Highlights section below.
Cautionary Notice Regarding Forward-Looking Statements
Certain information in this press release may constitute “forward-looking statements” regarding Savaria, including, without being limited thereto, understanding of the elements that might affect the Corporation’s future, relating to its financial or operating performance, the costs and schedule of future acquisitions, supplementary capital expenditure requirements and legislative matters. Most frequently, but not invariably, forward-looking statements are identified by the use of such terms as “plan”, “expect”, “should”, “could”, “budget”, “expected”, “estimated” “forecast”, “intend”, “anticipate”, “believe”, variants thereof (including negative variants) or statements that certain events, results or shares “could”, “should” or “will” occur or be achieved. Such statements involve known and unknown risks, uncertainties and other factors liable to cause Savaria’s actual results, performance or achievements to differ materially from those set forth in or underlying the forward-looking statements. Such factors notably include general, economic, competitive, political and social uncertainties. Although Savaria has attempted to identify the key elements liable to cause actual measures, events or results to differ from those described in the forward-looking statements, other factors could have an impact on the reality and produce unexpected results. The forward-looking statements contained herein are valid at the date of this press release. As there can be no assurance that these forward-looking statements will prove accurate, actual future results and events could differ materially from those anticipated therein. Accordingly, readers are strongly advised not to unduly rely on these forward-looking statements.