Laval, Quebec, June 13, 2011 – Savaria Corporation (TSX: SIS), Canada’s leader in the accessibility industry, today disclosed its results for the first quarter ended March 31, 2011.
First-Quarter Highlights
- Revenue up by 17% over the first quarter of 2010, reaching $15.5 million;
- Operating income up by 51% despite the 5.5% appreciation in the Canadian dollar;
- Earnings before interest, income taxes, depreciation and amortization (“EBITDA”) of $809,000, compared with $521,000 in the first quarter of 2010;
- Declaration of a dividend of 10.2 cents ($0.102) per common share;
- Integration of the operations of the subsidiaries Freedom and Liberty, acquired in 2010.
A Word from the President
“I am pleased to announce that in the first quarter of 2011, Savaria carried on its growth despite the appreciation in the Canadian dollar and the sluggish economic recovery in the United States. Our advancement is reflected at both the sales level and in our operating results. The relocation of the subsidiaries Freedom and Liberty into Savaria’s premises in Brampton, combined with the integration of their operations with those of our subsidiary Van-Action, will enable us to take advantage of new synergies and to lower operating costs,” indicated Marcel Bourassa, President and Chief Executive Officer of Savaria,
“Our solid balance sheet represents a strong fundamental that allows us to execute our growth projects and increase our profitability. Furthermore, it enabled us to remunerate our shareholders by paying a dividend of 10.2 cents last April 26th,” concluded Mr. Bourassa.
Operating Results (Comparative Analysis for the First Quarter of 2010)
- The Corporation achieved revenue of $15.5 million in the first quarter of 2011, compared with $13.2 million in 2010, an increase of 17.1% or $2.3 million. The contribution of the subsidiaries acquired in 2010 totalled $1.8 million, of which $0.6 million for the Accessibility segment and $1.2 million for the Adapted Vehicles segment.
- Gross margin increased by $921,000 and represented 29.1% of revenue, compared with 27.1% in 2010. Tight control of expenses and personnel as well as the sustained increase in purchases from China led to a reduction in costs and an improvement in productivity.
- Operating income grew by 51.2% or $249,000, from $486,000 in 2010 to $735,000 in 2011. The $646,000 increase in operating expenses is due mainly to the addition of the expenses of the subsidiaries acquired in 2010.
- Net income for the period rose from $59,000 in 2010 to $177,000 in 2011, an increase of $118,000. It includes a $63,000 increase in the exchange loss and a $53,000 increase in interest expense as a result of the acquisition of a new long-term debt.
Share Capital
During the first quarter of 2011, Savaria issued 1,000,000 shares in connection with the acquisition of its subsidiary Concord London in January 2010 and 132,500 shares subsequent to the exercise of share purchase options. It also repurchased 138,100 shares for cancellation as part of its normal course issuer bid in progress. The number of common shares outstanding therefore totalled 23,011,964 as at March 31, 2011, compared with 22,017,564 as at December 31, 2010.
Transition to International Financial Reporting Standards (“IFRS”)
Effective January 1, 2011, the Corporation started to present its financial results for fiscal 2011 and the corresponding figures for 2010 in accordance with IFRS. For further information in this regard, the reader is referred to Section 12, Significant Accounting Policies and Estimates, of the management’s report for the first quarter of 2011.
Savaria Corporation (savaria.com) is Canada’s leader and the second largest North American company in the accessibility industry focused on meeting the needs of people with mobility challenges. Savaria designs, manufactures and distributes primarily elevators for residential and commercial use, as well as stairlifts and vertical and inclined platform lifts. In addition, it converts and adapts wheelchair accessible automotive vehicles and also offers scooters and motorized wheelchairs. The diversity of its product line, one of the world’s most comprehensive, enables the Corporation to stand out by proposing an integrated and customized solution for its customers’ mobility needs. Its operations in China have substantially grown since 2006 and the collaboration with Savaria’s other Canadian facilities increases its competitive edge on the market. The Corporation records slightly over 50% of its sales outside Canada, primarily in the United States. It has a sales network of some 600 retailers in North America and employs 400 people at its head office in Laval and at its plants in Ville Saint-Laurent (Quebec), Brampton and London (Ontario), Calgary (Alberta) and Huizhou (China).
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