Sigma Industries Inc. (TSX Venture Exchange: SIC), a leading composite and metal products manufacturer, today announced results for its fourth quarter and fiscal year ended April 26, 2008.
A stronger Canadian dollar, a substantial decline in the heavy truck market over the last twelve months following the introduction of new environmental regulations regarding greenhouse gas emissions in January 2007 and the economic slowdown impacted fiscal 2008 results. These factors offset the contribution from the acquisitions of Pickens Plastics, since renamed Sigma OH Industries Inc. for the last two months of the fiscal year and of the Acton Vale plant and Groupe Synergy Composites Inc. for the entire period.
FOURTH QUARTER RESULTS
For the fourth quarter ended April 26, 2008, sales reached $17.2 million compared with $22.4 million in the fourth quarter last year. This decline is essentially attributable to the decline in the heavy truck market, the economic slowdown as well as the strength of the Canadian currency. The contribution from Sigma OH for the last two months of the period amounted to $0.9 million.
Despite lower sales, fourth-quarter earnings before interest, taxes, depreciation and amortization (EBITDA) amounted to $1.6 million in 2008, a level comparable to $1.7 million achieved a year earlier. The strength of the Canadian dollar reduced EBITDA by $0.3 million in the fourth quarter of fiscal 2008. As a percentage of sales, fourth-quarter EBITDA was 9.1% of sales compared with 7.7% a year ago, an improvement resulting from the Company's significant investments in automation and robotization in order to enhance its productivity and further reduce operating costs. Of note, EBITDA as a percentage of sales sequentially improved in the four quarters of fiscal 2008.
The Company posted net earnings of $602,000, or $0.014 per diluted share, for the fourth quarter of fiscal 2008, compared with $533,000, or $0.013 per diluted share, for the same period a year earlier. For the fourth quarter ended April 26, 2008, cash flows from operating activities before changes in non-cash working capital items stood at $1.0 million, versus $0.1 million last year.
FISCAL 2008 RESULTS
For fiscal 2008, sales reached $69.8 million, a decline of 16.1% in comparison with sales $83.2 million recorded during fiscal 2007. This decrease reflects lower activity in the heavy truck market as well as the impact of a stronger Canadian dollar. Fiscal 2008 EBITDA stood at $2.3 million compared with EBITDA of $9.4 million one year earlier. In addition to the business slowdown in the heavy truck market, the strength of the Canadian dollar reduced fiscal 2008 EBITDA by $1.2 million. The Company's net loss for fiscal 2008 was $0.6 million, or $0.013 per diluted share, as opposed to net earnings of $3.7 million, or $0.099 per diluted share, in the previous fiscal year.
"Although affected by the anticipated slowdown in the heavy truck market, our operating profitability improved throughout the year," said Denis Bertrand, President and Chief Executive Officer. "Our efforts to further diversify our activities were successful. Sales of agricultural and industrial products as well as of components for the rapidly-growing wind power market represented more than 20% of sales in fiscal 2008 sales, a percentage nearly twice as high as a year earlier. The acquisition of Sigma OH and the creation of our joint venture, Compin Sigma Amérique, announced at the beginning of fiscal 2009, are perfectly in keeping with our growth strategy."
The Company's financial position remained solid at the end of fiscal 2008 with total net debt of $18.9 million and shareholders' equity of $20.3 million. Fiscal 2008 cash flows from operating activities before changes in non-cash working capital items totalled $1.1 million, compared with $5.6 million a year earlier. -- www.cnxmarketlink.com
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