WINNIPEG, April 18, 2016 – Empire Industries Ltd. (TSX-V: EIL) today reported its audited consolidated financial results for the year ended December 31, 2015. The audited consolidated financial statements and MD&A have been filed on SEDAR and can be viewed at www.sedar.com or at www.empind.com.
“The $8.0 million of EBITDA that was generated in 2015, demonstrates that our strategy of recent years has been a good one,” said Guy Nelson, CEO of Empire Industries. “While remaining profitable, we have also put the wheels in motion for Empire’s continued growth and development. The creation of our Unlimited Attractions Demonstration Centre in Orlando, Florida will ensure that we remain on the cutting edge of new attraction development and add another revenue stream to further enhance our product offering in this business segment. Our proposed spin-out of Tornado Hydrovacs will allow Empire to increase its focus and capital allocation on its core business of Media Based Attractions, while allowing Tornado to capitalize on exciting opportunities in North America and China by leveraging its proprietary hydrovac technology and unique business strategy. Empire’s shareholders as of the Record Date for this transaction, will have the ability to participate in this opportunity through their direct ownership of 54.5% of Tornado Global Hydrovacs Inc., which will become an independently operated, publicly listed company on the TSXV. The Thirty Metre Telescope partnership has decided to open up the question of where to locate the telescope and we remain confident the enclosure will be designed and built by Empire, albeit a little bit delayed. There are tremendous opportunities in front of us, and we are well positioned to capitalize on them. There are plenty of reasons to be bullish on our long term future.”
Summary of 2015 consolidated annual results
Revenues increased by $10.2 million (7.2%), to $151.4 million from $141.2 million in 2014. The increase was driven by an increase of $35.2 million in the media-based attractions segment, offset by decreases totaling $24.8 million in the Manufactured Products and Steel Fabrication segments.
Adjusted EBITDA was consistent with 2014 at $8.0 million. The mix of contribution to EBITDA was significantly different in 2015, with the Media-Based Attractions segment increasing its EBITDA by $5.2 million to $11.7 million. The Manufactured Products and Steel Fabrication segments were unable to contribute EBITDA due to significantly reduced volumes because of a market slow-down in western Canada.
Net Income was down $4.7 million to $1.4 million from $6.1 million in 2014. Per Share Net Income (Basic) was $0.005 in 2015 (from $0.024 in 2014). The vast majority of this decrease was from non-cash changes in deferred taxes and an increase in the unrealized loss in hedging contracts.
The Group uses foreign currency forward contracts to hedge its foreign exchange exposure. When the settlement value of these contracts is less than the actual exchange rates at the end of the reporting period, it creates a liability position on the balance sheet. Similarly, when the settlement value is greater than the actual exchange rates, it creates an asset. As the Canadian dollar has strengthened relative to its currency forward contracts in the first quarter of 2016, the Group’s liability position will improve by $3.2 million in that period.
Backlog of $130 million, down from $155 million at of the Group’s third quarter report. Despite our backlog decline, our pipeline of active projects has never been larger or more high quality and robust.
Summary of 2015 Segmented Financial Results
For the quarter and year ended Dec 31
Fiscal Fiscal Q4 Q4
($ millions) 2015 2014 2015 2014
Media Based Attractions
Revenue…………………………………………………………..103.0 67.8 29.3 16.0
Adjusted EBITDA ($)* …………………………………………..11.7 6.4 4.5 2.7
Adjusted EBITDA %* ……………………………………………11.3% 9.5% 15.5% 16.7%
Manufactured Products
Revenue ……………………………………………………………20.2 35.7 5.2 9.4
Adjusted EBITDA ($)*………………………………………….. (0.1) 3.4 0.0 0.6
Adjusted EBITDA %*…………………………………………… (0.6%) 9.6% 0.1% 6.5%
Steel Fabrication
Revenue ……………………………………………………………28.1 37.5 4.2 10.6
Adjusted EBITDA ($)* …………………………………………..(0.5) 0.6 (0.6) (0.8)
Adjusted EBITDA %* ……………………………………………(1.6%) 1.6% (13.3%) (7.1%)
Corporate
Revenue ……………………………………………………………..0.1 0.3 0.1 0.1
Adjusted EBITDA ($)* ……………………………………………(3.1) (2.4) (1.0) (0.7)
Summary of 2015 Consolidated Financial Results
For the quarter and year ended Dec 31
($ millions except per share amounts) Fiscal Fiscal Q4 Q4 2015 2014 2015 2014
Revenue ………………………………………………………….151.4 141.2 38.8 36.1
Adjusted EBITDA ($)* …………………………………………….8.0 8.0 3.0 1.8
Adjusted EBIT ($)* ………………………………………………..5.9 6.4 2.2 1.4
Net income from all operations …………………………………1.4 6.1 0.4 2.5
Financial Position (at December 31)
Total assets ……………………………………………………….80.1 68.3
Total long term financial liabilities ……………………………..3.0 4.0
Shareholders’ equity …………………………………………….23.7 22.0
Per Share Information
Income per share (Basic) ……………………………………..0.005 0.024 0.000 0.009
Income per share (Diluted) ……………………………………0.005 0.022 0.000 0.007
* Adjusted earnings (loss) before interest, tax, depreciation and amortization (Adjusted EBITDA) is not defined by IFRS. The definition of Adjusted EBITDA does not take into account the Group’s share of profit of an associate investment, gains and losses on the disposal of assets, fair value changes in foreign currency forward contracts and non-cash components of stock based compensation. Adjusted EBIT is the result of the Group’s Adjusted EBITDA less depreciation and amortization expenses. While not IFRS measures, Adjusted EBITDA and Adjusted EBIT are used by management, creditors, analysts, investors and other financial stakeholders to assess the Group’s performance and management from a financial and operational perspective.