Laval, Quebec, November 13, 2014– Savaria Corporation (TSX: SIS), North America’s leader in the accessibility industry, discloses its results for its third quarter ended September 30, 2014.
Third-Quarter Highlights
- Revenue of $21.7 million, up 8.6%, from $20 million in 2013;
- Net income of $1.9 million, up 27% compared to 2013;
- Earnings before interest, taxes, depreciation and amortization ("EBITDA") of $3.2 million, up 19.5%, compared to $2.7 million in 2013;
- Acquisition of the assets of Silver Cross, a company that operates a lead generation program to capture and distribute leads to over 100 affiliates in North America and is a franchisor of stores of both new and recycled home accessibility equipment;
- Approval by the Board of Directors of an increase of the quarterly dividend, raising it from 3.5 cents to 4 cents per share.
A Word from the President
"I am very satisfied with our third quarter, which resulted in a record EBITDA of $3.2 million, representing 14.8% of revenue. Our market is constantly increasing since, in North America, every day some 10,000 people reach 65 years old. Considering our unique and comprehensive range of products, we are well positioned to capture a share of that growing market," declared Marcel Bourassa, President and Chief Executive Officer of Savaria.
"The recent acquisition of Silver Cross will have a positive impact on two fronts as early as 2015. On one front, we will benefit from their strong expertise in web marketing and we will put more emphasis on their already existing lead generation program, which will allow us to generate additional revenues. On a second front, we plan to double or even triple the number of franchisees over a 3-year period. Our strong financial position will allow us to invest to strengthen our position as industry leader, while providing an attractive return to our shareholders," concluded Mr. Bourassa.
Operating Results (Comparative Analysis with Third Quarter and First Nine Months of 2013)
- In the third quarter of 2014, revenue is up $1.7 million or 8.6%, from $20 million in 2013 to $21.7 million in 2014. For the first nine months of 2014, revenue is up $4.8 million or 8.5%, from $56.6 million to $61.4 million.
- The gross margin for the third quarter of 2014 is up by $868,000, at 31.2% of revenue compared to 29.6% in 2013. For the first nine months, the gross margin is up by $1.9 million, at 30.4% of revenue compared to 29.6% in 2013.
- Operating income for the third quarter of 2014 is stable at $2.4 million. For the first nine months, operating income increased by $327,000 or 5.3%, from $6.1 million in 2013 to $6.5 million in 2014. Were it not for a non-recurring income of $350,000 recorded in 2013, operating income for the first nine months of 2014 would have been up $677,000 or 11.7%.
- Net income for the third quarter of 2014 is up 27%, from $1.5 million in 2013 to $1.9 million in 2014, an increase of $409,000. For the first nine months of 2014, net income is up 12.1%, from $4.2 million to $4.7 million, an increase of $503,000.
- EBITDA for the third quarter is up $524,000, from $2.7 million in 2013 to $3.2 million in 2014, an increase of 19.5%. For the first nine months of 2014, EBITDA is up $639,000, from $7.5 million in 2013 to $8.1 million in 2014, an increase of 8.5%. Were it not for the non-recurring income of $350,000 recorded in 2013, the increase in EBITDA for the first nine months would have been $989,000 or 13.8%.
Dividend
As per the Corporation’s dividend policy, the Board of Directors has declared a dividend of 4 cents ($0.04) per common share, payable on December 8, 2014 to shareholders of record of the Corporation at the close of business on November 24, 2014. This is an eligible dividend within the meaning of the Income Tax Act.
Savaria Corporation (savaria.com) is North America's leader in the accessibility industry focused on meeting the needs of people with mobility challenges. Savaria designs, manufactures, distributes and installs primarily elevators for home and commercial use, as well as stairlifts and vertical and inclined platform lifts. With the acquisition of Silver Cross, the Corporation now operates a lead generation program to capture and distribute leads on potential customers to over 100 affiliates in North America; it also became a franchisor of stores through which new and recycled accessibility equipment is sold. In addition, Savaria converts and adapts minivans to be wheelchair accessible. 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 and the collaboration with Savaria’s other Canadian facilities increases its competitive edge in the market place. The Corporation records some 60% of its revenue outside Canada, primarily in the United States. It has a sales network of some 600 retailers in North America and employs some 410 people at its head office in Laval and at its plants and sales offices in Montreal (Quebec), Brampton and London (Ontario), Calgary (Alberta) and Huizhou (China).
Compliance with International Financial Reporting Standards (“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. 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.
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For more information, please contact:
Helene Bernier, CA
Vice-President, Finance
helene.bernier@savaria.com
1-800-931-5655, ext. 248
www.savaria.com
Marcel Bourassa
Chairman of the Board, President and
Chief Executive Officer
1-800-661-5112