Laval, Quebec, November 11, 2010– Savaria Corporation (TSX: SIS), Canada’s leader in the accessibility industry, today disclosed the results for its third quarter ended September 30, 2010.
Third-Quarter Highlights
- Sales of $17.7 million, up 21% over the corresponding quarter of the previous year and representing Savaria’s third consecutive quarter of sales growth, with its best sales ever since the start-up of operations;
- EBITDA of $1.4 million or 6 cents per share, an increase of 4.4 cents per share over the third quarter of 2009;
- Integration of the newly acquired subsidiaries Freedom Motors and Liberty Motor, which reinforce the Corporation’s leadership in the conversion of vehicles for people with mobility problems;
- Start-up of the operations of the new subsidiary Savaria Lift, which finalized the purchase of the assets of Concord Elevator (Alberta), an Alberta-based retailer specializing in the installation of elevators.
A Word from the President
“For the first three quarters of 2010, we post our best performance ever with sales reaching 48 million dollars and a record EBITDA in the amount of 4.2 million or 18.5 cents per share on a diluted basis. We surpassed our previous quarter’s sales record to achieve a new all-time high in quarterly sales, thanks mainly to our three most recent acquisitions. Integrating these new subsidiaries will allow us to increase our market share in both Canada and the U.S. with a full range of converted mini-van models,” indicated Marcel Bourassa, President and Chief Executive Officer of Savaria.
“What’s more, our steady sales growth proves that the scope of our product line, the strength of our sales network, our presence on the international scene and our solid financial position enable us to maintain our leadership status in our industry,” concluded Mr. Bourassa.
Operating Results
Sales
The Corporation recorded sales of $17.7 million in the third quarter of 2010, representing the best quarterly sales it has ever achieved, compared with $14.6 million in the corresponding quarter of fiscal 2009, an increase of 21% or $3.1 million. Of this growth, $2.7 million came from the contribution of the operations of the new subsidiaries acquired during 2010. The Accessibility segment’s sales accounted for $1.4 million of the total increase, whereas those of the AdaptedTransport segment contributed $1.7 million.
For the first three quarters of 2010, sales rose 17% from $40.9 million in 2009 to $47.9 million in 2010. Of this $7 million growth, $4.8 million came from the contribution of the operations of the subsidiaries acquired during 2010.
Gross Profit
Gross profit grew by $1.3 million for the third quarter of 2010 over the same period of 2009. The sales growth and different measures, such as greater productivity and a significant increase in purchases from the Chinese subsidiary Savaria Huizhou and other Chinese suppliers, enabled the Corporation to improve its gross margin to 29%, up from 26% for the third quarter of 2009.
For the first nine months, gross profit grew by $3.1 million for 2010 over the same period of 2009 and the gross margin rose, as for the Quarter, from 26% to 29%.
Operating Earnings
Operating earnings improved by $545,000 in the third quarter of 2010 over the corresponding quarter of 2009, from $599,000 in 2009 to $1.1 million in 2010. For the first three quarters, the increase came to $1.6 million over 2009, as operating earnings increased from $1.6 million to $3.2 million.
Net Earnings
Net earnings rose from $224,000 in the third quarter of 2009 to $526,000 in the same quarter of 2010, an increase of $302,000 or 135%. For the nine-month period, net earnings grew from $1.4 million in 2009 to $2 million in 2010.
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 residential 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 in the industry, enables the Corporation to stand out by offering 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 on the market. The Corporation records approximately 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 455 people at its head office in Laval and at its plants in Ville Saint-Laurent (Quebec), Brampton, London and Oakville (Ontario), Calgary (Alberta) and Huizhou (China).
Compliance with Canadian Generally Accepted Accounting Principles
The information appearing in this press release has been prepared in accordance with Canadian generally accepted accounting principles (“GAAP”). However, the Corporation uses earnings before interest, income taxes and amortization (“EBITDA”) for analysis purposes to measure its financial performance. This measure has no standardized definition in accordance with GAAP and is therefore regarded as a non-GAAP measure. This measure may therefore not be comparable to similar measures reported by other companies. A reconciliation between net earnings and EBITDA is provided in theFinancial Highlights section below.
Cautionary Notice Regarding Forward-Looking Statements
Certain information in this press release may constitute “forward-looking statement” 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 actions “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.
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