Profit Margins Continue to Strengthen as Mix of Business Improves
WINNIPEG, May 29, 2017 – Empire Industries Ltd. (TSX-V: EIL) today reported its unaudited consolidated financial results for the quarter ended March 31, 2017. The unaudited consolidated financial statements and MD&A have been filed on SEDAR and can be viewed at www.sedar.com or at www.empind.com.
“Empire’s adjusted EBITDA doubled to $3.1 million from $1.5 million during the same period last year. This resulted from a changing mix of business away from first generation media-based attractions, which had depressed profit margins in prior quarters towards ride systems and attractions we have built before,” stated Guy Nelson. “Our strategic focus targets theme park owners with compelling capital expansion plans that match our Company’s capability to deliver industry leading quality and innovation concurrent with leveraging our proprietary media-based attraction product line.”
Summary of first quarter 2017 consolidated results
- Revenues increased by $4.7 million (16.7%), to $32.4 million from $27.8 million. The increase was driven by the Company being into the production phase on 3 major projects which in the previous year were still in largely the design phase. This increase in production has also offset the Company’s decision to curtail operations in industrial steel fabrication.
- Adjusted EBITDA increased by $1.5 million (100.0%), to $3.1 million. This increase was driven by higher revenue volumes and improved adjusted gross margins more than offsetting the increase in selling, general and administrative expenses.
- Contract Backlog as of March 31, 2017 was $114 million, up 4.6% from $109 million at December 31, 2016. This backlog will be substantially higher in our 2nd quarter reporting period arising from the USD $120 million contract awards recently announced in the Company’s May 19, 2017 news release.
- Total Shareholders’ Equity reduced by $7.1 million, primarily due to the $8.3 million dividend distribution of the Tornado Global Hydrovac division to all Empire shareholders.
- Net Income decreased by $5.7 million (97.3%) to $0.2 million from $5.9 million in 1Q16. This decrease is due to the $5.3 million decrease in fair value changes in derivative financial instruments used to hedge the Company’s foreign exchange exposure, plus a $1.0 million restructuring charge relating to the Company’s previously announced decision to curtail independent steel fabrication services and deploy those steel fabrication assets into the Attractions business.
- Long Term Funded Debt increased to $17.2 million from $2.2 million in 1Q16 due to the addition of USD $10 million of subordinate financing from Export Development Canada used to strengthen working capital.
Summary of First Quarter 2017 Consolidated Financial Results
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 Company’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 Company’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 Company’s performance and management from a financial and operational perspective.
About Empire Industries Ltd.
The Company focuses its business on designing, supplying, and installing premium theme park, media-based attractions and ride systems for the global entertainment industry. The Company also uses these same turn-key integration services for special projects such as large optical telescopes and enclosures. The Company’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 |
Conference Call Information
Empire’s management team will be holding an investor/analyst conference call to discuss the first quarter 2017 results and the outlook for the company. The call-in details are as follows:
| Time/Date: | Tuesday, May 30, 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 First Quarter 2017 Results Conference Call.
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.