Fiscal 2010 Off to an Excellent Start at Savaria with 18% Sales Growth in the 1st Quarter
Laval, Quebec, May 11, 2010 – Savaria Corporation (TSX: SIS), Canada’s leader in the accessibility industry, today announced its results for the first quarter of 2010.
First-Quarter Highlights
- Sales growth of 18.4% over the first quarter of 2009;
- Operating earnings up by $717,000 over the first quarter of 2009;
- Declaration of a dividend of 8.4 cents ($0.084) per common share;
- Closing of the acquisition of Concord Elevator (London) Ltd. (“Concord London”), the leading Canadian retailer specializing in the installation and maintenance of elevators and platform lifts.
A Word from the President
“Our results for the first quarter of 2010 are most satisfactory, considering that the first quarter is historically the least profitable of the year. Sales increased by 18.4% and operating earnings rose to $580,000, compared with a loss of $137,000 in the first quarter of 2009,” indicated Marcel Bourassa, President and Chief Executive Officer of Savaria. “On February 1st, 2010, we closed the strategic acquisition of Concord London, which will enable us to better serve the Toronto area. Also, our balance sheet remains as solid as ever and will allow the Corporation to achieve its growth objectives,” added Mr. Bourassa.
Sales
The Corporation recorded sales of $13.2 million during the first quarter of 2010, compared with$11.2 million in the corresponding quarter of fiscal 2009, an increase of 18.4%. Of this growth,$684,000 or 6.1% came from the two-month contribution in operations of the new subsidiary Concord London. During the first quarter, the number of units sold in the Accessibility segment grew by 20% for accessibility products, as opposed to a slight decline for elevators. The Adapted Transportation segment’s first-quarter revenues remained stable.
Gross Profit
Gross profit grew by $944,000 for the first quarter of 2010 over the same period of 2009. The strong sales growth and various measures, including enhanced productivity and a significant increase in purchases from the Chinese subsidiary Savaria Huizhou and other Chinese suppliers, enabled the Corporation to raise its gross margin to 27.7%, up from 24.3% in the first quarter of 2009.
Operating Earnings
Operating earnings improved by $717,000 in the first quarter 2010 over the first quarter of 2009, from a loss of $137,000 to a profit of $580,000. This favourable variation is due to the growth in gross profit, less the increase in selling and administrative expenses stemming from the addition of the new subsidiary Concord London.
Net Earnings
Net earnings fell from $555,000 in the first quarter of 2009 to $179,000 in the same quarter of 2010, a decrease of $376,000 primarily reflecting the unfavourable variation of $998,000 in a put option related to restructured notes and of $252,000 in exchange gains and losses.
Cash Flows
The Corporation’s operating activities generated cash flows of approximately $507,000 during the first quarter, as opposed to cash outflow of $172,000 in the corresponding quarter of 2009.