Profit Margins Continue to Strengthen as Mix of Business Improves
WINNIPEG, August 10, 2017 – Empire Industries Ltd. (TSX-V: EIL) today reported its unaudited consolidated financial results for the quarter ended June 30, 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 was $2.7 million, up from $0.9 million during the same period last year. Like Q1 2017, this resulted from a changing mix of business away from first generation media-based attractions, which had depressed profit margins in the prior quarters of 2016 and 2015, towards more profitable ride systems and attractions we have built before,” stated Guy Nelson. “The increased backlog bodes well for future profit visibility and it also reinforces that some of the company’s strategic initiatives are meeting market acceptance.”
Summary of second quarter 2017 consolidated results
- Contract Backlog as of June 30, 2017 was $260 million, up 128% from $114 million at the Company’s March 31, 2017 report.
- Revenues increased by $1.5 million (4.9%), to $31.8 million from $30.3 million in Q2 2016. This increase in production has more than offset the revenue decline arising from the Company’s decision to curtail operations in industrial steel fabrication.
- Adjusted EBITDA increased by $1.8 million (207%), to $2.7 million from $0.9 million in Q2 2016. This increase was driven by higher revenue and improved adjusted gross margins more than offsetting the increase in selling, general and administrative expenses.
- Net Income in Q2 2017 was $1.8 million compared to $0 in Q2 2016.
- The Comprehensive net income for year to date 2016 of $6.8 million was heavily influenced by a $5.6 million FOREX gain and a $2.5 million gain on the sale of Tornado.
- Long Term Funded Debt increased to $15.5 million in 2Q17 from $5.0 million in 2Q16 due to the addition of USD $10 million of subordinate financing from Export Development Canada used to strengthen working capital.
Summary of Q2 2017 Segmented Financial Results
| For the quarter and year ended June 30 | ||||||||
| ($ millions) | Q2 2017 | Q2 2016 | YTD
2017 |
YTD
2016 |
||||
| Revenue | 31.8 | 30.3 | 64.3 | 58.1 | ||||
| Adjusted EBITDA ($)1 | 2.7 | 0.9 | 5.7 | 2.4 | ||||
| Adjusted EBIT ($)1 | 1.8 | 0.2 | 3.8 | 1.2 | ||||
| Net income from all operations | 1.3 | 3.1 | 1.4 | 6.8 | ||||
| Financial Position (at June 30) | ||||||||
| Total assets | 81.4 | 71.9 | ||||||
| Total long term financial liabilities | 9.8 | 4.9 | ||||||
| Shareholders’ equity | 21.8 | 22.2 | ||||||
| Per Share Information (Basic & Diluted) | ||||||||
| Income per share – continuing operations | 0.02 | 0.00 | 0.02 | 0.07 | ||||
| Income per share – discontinued operations | 0.00 | 0.04 | 0.02 | 0.04 | ||||
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.
Empire focuses on designing, supplying, and installing premium theme park, media-based attractions and ride systems for the global entertainment industry. Empire also uses these same turn-key integration services for special projects such as large optical telescopes and enclosures. Through Empire’s execution of its strategy over the years, Empire owns several non-entertainment investments that it seeks to optimize and liquidate at the appropriate time. Empire’s equity holding in Tornado falls into this category. 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 |
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: Wednesday, August 16, 2017 at 2:00 PM 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 Second 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.