2016 transformative developments leave Empire focused on high-growth attractions segment
WINNIPEG, April 26, 2017 – Empire Industries Ltd. (TSX-V: EIL) today reported its audited consolidated financial results for the year ended December 31, 2016. 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.
“2016 was a transformative year for Empire,” said Guy Nelson, CEO of Empire Industries. “The spin-out of our Manufactured Products segment (Tornado Global Hydrovacs) into a stand-alone publicly traded company has sharply increased Empire’s focus on the Media-based Attractions segment. The fact that we were able to accomplish this with a gain of $3.3 million net of tax meant the transaction had immediate financial value, as well as immediate strategic value. We sharpened our focus further in early 2017, through the re-deployment of our Steel Fabrication segment assets into the Media-based Attractions segment and subsequently have been rightsizing our steel fabrication capacity to match our internal requirements. We are focused on the growth in this marketplace and on leveraging our unique, globally competitive advantages and unique selling proposition.”
“We continue to see strong growth in demand as evidenced by the 10 attractions we opened in 2016, and by our record pipeline of proposals outstanding. We also continue to develop promising projects that leverage our Orlando-based Unlimited AttractionsTM division’s unique skill set in turning ride systems into attractions and applying this to some of our proprietary ride systems. We expect to bring some of these exciting prospects to fruition starting in 2017.”
Summary of 2016 consolidated annual results
- Net Income increased by $2.6 million (190.4%) to $4.0 million from $1.4 million in 2015. Per Share Net Income (Basic) was $0.06 in 2016 (from $0.02 in 2015). The gain on sale of Tornado, use of our tax losses and gains on foreign exchange were the main contributors to this improvement in Net income.
- Revenues decreased by $13.2 million (10.1%), to $118.0 million from $131.2 million in 2015. The decrease was almost entirely driven by reduced revenues from the Steel Fabrication Services segment. In early 2017, management decided to cease actively pursuing third party steel fabrication opportunities in its Edmonton location and to re-deploy those assets to the Group’s Media-Based Attractions segment, integrating and right-sizing this capacity with our steel fabrication capacity in Port Coquitlam.
- Adjusted EBITDA decreased by $2.5 million (31.3%), to $5.6 million. This decrease was almost entirely attributed to an increase in the adjusted EBITDA loss in the Steel Fabrication Services segment.
- Contract Backlog as of Dec 31, 2016 was $109 million, down from $125 million at of the Group’s third quarter report. Despite our backlog decline, our pipeline of proposals has never been larger and more robust and management has confidence in returning to increasing its backlog in the near future.
- Total Shareholders’ Equity reduced by $3.5 million which was the net amount after the dividend of the Tornado Global Hydrovac division to all Empire shareholders.
- Working capital was strengthened during the year by the addition of USD $10 million of subordinate financing from Export Development Canada.
Summary of 2016 Segmented Financial Results
| For the quarter and year ended December 31 | ||||||||
| ($ millions) | Fiscal 2016 | Fiscal 2015 | Q4
2016 |
Q4
2015 |
||||
|
Media Based Attractions |
||||||||
| Revenue | 102.0 | 103.0 | 23.7 | 29.3 | ||||
| Adjusted EBITDA ($)1 | 10.6 | 11.7 | 3.9 | 4.5 | ||||
| Adjusted EBITDA %1 | 10.4% | 11.3% | 16.4% | 15.5% | ||||
|
Steel Fabrication |
||||||||
| Revenue | 15.8 | 28.1 | 3.8 | 4.2 | ||||
| Adjusted EBITDA ($)1 | (2.1) | (0.5) | (1.9) | (0.6) | ||||
| Adjusted EBITDA %1 | (13.4%) | (1.6%) | (49.8%) | (13.3%) | ||||
|
Corporate |
||||||||
| Revenue | 0.2 | 0.1 | 0.0 | 0.1 | ||||
| Adjusted EBITDA ($)1 | (2.9) | (3.1) | (0.8) | (1.0) | ||||
Summary of 2016 Consolidated Financial Results
| For the quarter and year ended December 31 | ||||||||
| ($ millions except share price and per share amounts) | Fiscal 2016 | Fiscal 2015 | Q4
2016 |
Q4
2015 |
||||
| Revenue | 118.0 | 131.2 | 27.5 | 33.7 | ||||
| Adjusted EBITDA ($)1 | 5.6 | 8.1 | 1.2 | 3.0 | ||||
| Adjusted EBIT ($)1 | 1.9 | 6.3 | (0.6) | 2.4 | ||||
| Net income from all operations | 4.0 | 1.4 | (2.6) | 0.4 | ||||
|
Financial Position (at December 31) |
||||||||
| Total assets | 78.7 | 80.1 | 78.7 | 80.1 | ||||
| Total long term financial liabilities | 13.1 | 2.9 | 13.1 | 2.9 | ||||
| Shareholders’ equity | 20.1 | 23.7 | 20.1 | 23.7 | ||||
|
Per Share Information |
||||||||
| Income per share (Basic) | 0.06 | 0.02 | (0.04) | 0.01 | ||||
| Income per share (Diluted) | 0.06 | 0.02 | (0.04) | 0.01 | ||||
1 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.
Conference Call Information
Empire’s management team will be holding an investor/analyst conference call to discuss the 2016 results and the outlook for the company. The call-in details are as follows:
Time/Date: April 27, 2017 at 2:00PM Eastern Time
Dial-in Number: 1-800-319-4610 (Canada/USA toll-free)
1-416-915-3239 (Toronto)
Callers should dial in 5 – 10 minutes prior to the scheduled start time and ask to join the Empire Industries 2016 Results Conference Call.
About Empire Industries Ltd.
Empire Industries Ltd. manufactures specialized engineered products and sells these products domestically and in select international export markets. The company has developed, designed and engineered products for the rapidly growing, global, Media-based Attractions market and works with specific clients in this market to execute highly specialized ride systems. Empire’s common shares are listed on the TSX Venture Exchange under the symbol EIL.
For more information about the Company, visit www.empind.com or contact:
| Guy Nelson
Chief Executive Officer Phone: (416) 366-7977 Email: gnelson@empind.com |
Allan Francis
Vice President – Corporate Affairs and Administration Phone: (204) 589-9301 Email: afrancis@empind.com |
Reader Advisory
This news release contains forward-looking statements, within the meaning of applicable securities legislation, concerning Empire’s business and affairs. In certain cases, forward-looking statements can be identified by the use of words such as ‘‘plans’’, ‘‘expects’’ or ‘‘does not expect’’, ‘‘budget’’, ‘‘scheduled’’, ‘‘estimates’’, “forecasts’’, ‘‘intends’’, ‘‘anticipates’’ or variations of such words and phrases or state that certain actions, events or results ‘‘may’’, ‘‘could’’, ‘‘would’’, ‘‘might’’ or ‘‘will be taken’’, ‘‘occur’’ or ‘‘be achieved’’. These forward looking statements are based on current expectations, and are naturally subject to uncertainty and changes in circumstances that may cause actual results to differ materially. Readers are cautioned not to place undue reliance on such forward-looking statements. Forward-looking information is provided as of the date of this press release, and Empire assumes no obligation to update or revise them to reflect new events or circumstances, except as may be required under applicable securities laws. Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.