Laval, Québec, February 19, 2019– Savaria Corporation (“Savaria”) (TSX: SIS) one of the global leaders in the accessibility industry, today announced preliminary unaudited results for the fourth quarter and full year 2018. Savaria expects fourth quarter revenue to be approximately $93 million and adjusted EBITDA(1) to be approximately $13 million, and for the full year 2018, revenue of approximately $286 million and adjusted EBITDA of slightly over $40 million.
While revenues were ahead of the full year guidance, Savaria’s adjusted EBITDA in 2018 fell short of its expectations, primarily owing to a challenging operating environment in Europe for the Garaventa Lift group and significant cost inflation within the Span segment.
These preliminary results are based on information available to Savaria as of the date of this release and are subject to revision upon finalizing the audit of Savaria’s annual consolidated financial statements. Financial results for the fourth quarter and fiscal year ended December 31, 2018 will be reported on March 27, 2019.
A Word from the President
“While we are satisfied with the revenue result in 2018, we are disappointed that we could not achieve our full year adjusted EBITDA guidance. However, I am confident in our team and that the initiatives we have undertaken in Q4-2018 will enable us to realize significant cost savings in 2019. Savaria has always taken pride in having one of the highest EBITDA margins in the accessibility industry, and our focus this year will be to get back to a consolidated EBITDA margin of 15%,” said Marcel Bourassa, President and Chief Executive Officer of Savaria.
“Acquisitions will continue to play an important role in our long-term growth strategy, and we will continue to evaluate opportunities as they arise; however, for now our resources are better utilized in ensuring that we capture the significant cost synergies from our recent acquisitions.”
“As the timing of the full impact of these cost saving programs is difficult to determine, we believe it prudent to re-evaluate our guidance for 2019. Consequently, for 2019 we are now forecasting revenue of $385 to $400 million and adjusted EBITDA in a range of $55 to $60 million, excluding any contributions from potential future acquisitions.”
“Finally, I would like to thank our shareholders for the trust they have placed in us. It has been five years since we embarked on the most recent leg of this journey together following Savaria’s private placement in March 2014. Over this five-year period, Savaria has been able to grow its revenue by 30% and its adjusted EBITDA by 33% per year, while also increasing its dividend by an average of 22% per year. This extraordinary period of growth would not have been possible without the dedication of our employees and the confidence of our shareholders,” concluded Mr. Bourassa.
(1) This measure is presented for information purposes only and represents a measure of financial condition used especially in financial circles. It represents the following calculation: earnings before interest, taxes, depreciation, amortization, realized and unrealized business acquisition costs, the value adjustment on acquired inventories, stock-based compensation, provision for restructuring costs of Garaventa’s operations in China, proceeds from insurance claim, gain on financial instrument and litigation costs. It does not have a standardized meaning prescribed by IFRS and therefore may not be comparable to similar measures presented by other public corporations.
Savaria Corporation (savaria.com) is one of the global leaders in the accessibility industry. It provides accessibility solutions for the physically challenged to increase their comfort, their mobility and their independence. Its product line is one of the most comprehensive on the market. Savaria designs, manufactures, distributes and installs accessibility equipment, such as stairlifts for straight and curved stairs, vertical and inclined wheelchair lifts, elevators for home and commercial use, as well as ceiling lifts. It also manufactures and markets a comprehensive selection of pressure management products for the medical market, medical beds for the long-term care market, mattress overlays and foam pillows for the retail market and certain products for the industrial market. In addition, Savaria converts and adapts vehicles to be wheelchair accessible. Savaria records approximately 75% of its revenue outside of Canada, primarily in the United States. It operates a sales network of some 500 dealers worldwide and 28 direct sales offices in North America, Europe (Switzerland, Germany, Italy, Czech Republic and Poland), Australia and China. Savaria employs approximately 1,400 people globally and its plants are located in Canada: Laval and Magog (Québec), Brampton, Beamsville and Toronto (Ontario) and Surrey (British Columbia), in the United States at Greenville (South Carolina), in Huizhou (China) and in Milan (Italy).
Cautionary Notice Regarding Forward-Looking Statements
The statements set forth in this press release, which describe Savaria’s objectives, projections, estimates, expectations or forecasts, may constitute forward-looking statements within the meaning of securities legislation. Positive or negative verbs such as “will”, “plan”, “evaluate”, “estimate”, “believe”, “expect” and other related expressions are used to identify such statements. Savaria would like to point out that, by their very nature, forward-looking statements involve risks and uncertainties such that its results, or the measures it adopts, could differ materially from those indicated or underlying these statements, or could have an impact on the degree of realization of a particular projection. Major factors that may lead to a material difference between Savaria’s actual results and the projections or expectations set forth in the forward-looking statements include the effects of the integration of acquired businesses and the ability to achieve projected synergies, fluctuations in margins, competition, exchange rate variations, and such other risks as described in detail from time to time in documents such as its annual management report (MD&A) as filed by Savaria with securities regulatory authorities in Canada. Unless otherwise required by applicable securities laws, Savaria disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. The forward-looking information in this press release is based on information available as of the date of the release.
For further information:
Hélène Bernier, CPA, CA